Earlier this week, the San Juan Water Conservancy District (SJWCD) Board of Directors adopted a long-awaited resolution and related mission statement, terminating the collection of an “impact fee” that contributes partial funding for a proposed Dry Gulch Reservoir.
The action — unanimously approved and signed Monday — calls for the immediate suspension of the imposition and collection of a fee established through an Intergovernmental Agreement (IGA) with the town of Pagosa Springs in August 2006.
Since February 2007, the town has charged the $1,129 per-equivalent-unit fee on behalf of the district, to aid in funding the development of future water rights and storage, including those associated with Dry Gulch. An equivalent unit is equal to the normal amount of water used by a single-family home.
The town also assesses additional impact fees to fund certain projects and other special districts, including fire, health and education.
According to state law, county and municipal governments may adopt impact fees to benefit themselves or special districts, in order to help fund capital improvements necessary to accommodate growth. Such fees may not be used to repair or maintain existing facilities or infrastructure, but must be applied toward future expansion.
The district’s move to suspend its fee comes amid increasing community-wide concern over the dramatic decline in residential and commercial construction in recent months. Locally, construction has been a principal economic driver, but as regional, national and global financial conditions worsen, district officials fear a prolonged pause in area construction will further erode the local economy.
While suspending the impact fee effective Jan.1, the district will apparently keep and utilize funds collected prior to that time.
As a portion of the resolution reads, “ ... The District does not intend such termination of the Impact Fee IGA or immediate suspension of the Impact Fee to affect the use of such fees already received by the District or the collection and transfer, by the Town to the District, of revenues derived from the Impact Fee imposed on development approvals granted before January 1, 2009, including the continued collection and transfer to the District of any deferred, or amortized, payments of such fees.”
According to the “Impact Fee Position Statement” approved with the resolution, the district will shift its focus to “wholly funding a distinct component” of the Dry Gulch project, while maintaining support for current intergovernmental efforts to “recalibrate” local impact fees.
To now, the district has participated, financially and otherwise, in land negotiations, land acquisition and overall development of Dry Gulch. The impact fees previously collected, and a $1 million Colorado Water Conservation Board grant, were among its most significant financial contributions. Its water rights and associated legal costs are vital offerings, as well.
From here on, the district will devote time and energy toward funding a Dry Gulch component referred to as “Environmental Accommodations,” which the board feels is best aligned with its overall mission. Environmental Accommodations includes, without limitation:
• Wetlands development
• Public access easements
• Boat and fish by-pass accommodations at the San Juan River diversion
• Studies for a potential boat ramp, handicap access and other public amenities
• Studies for fish and wildlife mitigation and enhancements
• Biological and cultural studies
Currently, the estimated cost of the Environmental Accommodations component stands at $10,027,000 over the length of the project. In its position statement, the district commits to its partner in the Dry Gulch plan, the Pagosa Area Water and Sanitation District (PAWSD), to funding Environmental Accommodations “via any source of revenue.”
While not mentioned in the statement, those sources of revenue most likely include various grants the district feels are attainable as the project gains momentum. In fact, a clause in the document “solicits the support of the Town, County and greater community in its endeavor to develop alternate sources of funding.”
Neither the resolution or position statement indicate whether the district might seek reinstatement of the impact fee sometime in the future, but a clause in the statement emphasizes that “at this time,” the board believes it appropriate to pursue alternatives to impact fees for Dry Gulch.
Meanwhile, the district board intends to support a newly-formed economic roundtable comprised of all local taxing entities, including governments and special districts, for the purpose of analyzing and defining impact fees the development community can live with.