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PAWSD debt: County wants to know

Cryptic comments made during a town council work session last week, a July letter from the Pagosa Springs Area Association of Realtors (PSAAR) and two Freedom of Information Act Requests (FOIA), have led many to believe county leadership intends to oust the Pagosa Area Water and Sanitation District (PAWSD) board and install leadership more willing to do the commissioners’ bidding.

Local Realtor Jim Smith tipped the county’s hand in his address to the Pagosa Springs Town Council July 30 when he asked the council to support PSAAR and the county in their efforts to dissolve the district and fold it into the county’s jurisdiction.

In response, Pagosa Springs Mayor Ross Aragon said he would fight “tooth and nail” against any move to unseat the PAWSD board and he decried any jurisdiction’s push to meddle in another’s affairs.

Although Smith’s request took most in the audience by surprise, PSAAR laid the groundwork for such a move in July with a letter to PAWSD leadership stating that PAWSD’s failure to waive its development-related fees would result in a PSAAR push for the ouster of the PAWSD board and top management.

On July 14, when the county and town asked PAWSD to waive it’s development-related fees as part of a multi-jurisdictional, local economic stimulus plan, the PAWSD board said, “No.” (See Chuck McGuire’s story in the July 16, 2009, issue of The SUN). Hence, Smith’s July 30 request to town council.

With Smith’s comment indicating there was a move afoot in the courthouse to use statutory power to dissolve PAWSD, SUN staff asked Archuleta County Attorney Todd Starr what the organization’s intentions are.

Starr penned two FOIA requests seeking, almost exclusively, PAWSD financial documents.

“At no time has the county stated it intends to take over PAWSD. My clients, the commissioners, haven’t made any decisions. They are seeking more information,” Starr said.

To that end, county staff and the commissioners intend to scrutinize PAWSD financial documents to determine if the agency’s debt load has outstripped it’s ability to repay the loans and what impact that situation — if it does in fact exist — may have on the county.

In addition, county staff and the commissioners are exploring what a PAWSD board recall might entail and they have determined that statute allows them to take over PAWSD via a vote of the citizenry.

In the meantime, Starr repeated that the commissioners have tasked him with undertaking a fact-finding mission.

Colorado Revised Statute 32-1-701 allows for the dissolution of a special district either through an act of a majority of PAWSD board members or with 5 percent, or 250, of the eligible electors within the PAWSD district, whichever is less, calling for the dissolution.

A reading of the statute indicates that amassing the requisite number of eligible electors within the PAWSD district may be the easiest part of the task.

For example, after the eligible electors petition the PAWSD board for dissolution, the effort begins winding its way through the court system. Among items the county or whomever might take control of the agency, must produce, is a plan describing how it intends to handle PAWSD debt and other obligations and how it intends to continue providing water service should PAWSD disappear.

A dissolution effort will likely require significant staff hours to produce the plan, not to mention legal fees and other administrative costs.

Archuleta County Finance Director Don Warn issued a preliminary second quarter report Tuesday, and if expenditures and revenues keep pace with his projections, the county will end 2009 able to tell three major success stories: successful completion of the first unqualified audit in years; a year-end positive cash balance, and third, sufficient revenue to comfortably handle debt service obligations and bank reserves.

In 2007, years of poor leadership and financial mismanagement caught up to the county and the organization nearly went bankrupt, programs and services were cut and many employees lost their jobs.

Just two years later, and despite the national and local economic downturns, the county has begun to put the pieces back together — but just barely.

That said, why would county staff and elected officials either support, or embark on a plan of their own to dissolve PAWSD when they have just begun to get their own house in order?

Questions remain: Who is behind the dissolution of PAWSD? Clearly the PSAAR supports the effort, as indicated by Smith’s comments and their letter to PAWSD leadership.

The Archuleta Economic Development Association (AEDA), certain builders, developers and key members of the business community support changes at PAWSD, as the AEDA has gone to great lengths to produce a report they say shows PAWSD fees have crushed the local economy. That report, and the data it included, played a vital role in the county’s July 7 hearing — and the commissioners decision — to waive all development-related fees and provide sales tax rebates to new construction-related purchases.

Archuleta County Commissioner John Ranson said his task was to determine PAWSD’s true financial status and to provide that information and any possible recommendations to his constituents.

Assuming PAWSD financial documents aren’t up to snuff, voters could do nothing and let the organization ride, or citizens could get involved and field themselves as candidates in May 2010 when two PAWSD board seats come up for grabs. As alternatives, voters could also launch a board member recall effort, or they could take the Smith approach and seek PAWSD dissolution with the courts.

Although Ranson did not advocate for any particular approach, Archuleta County Commissioner Clifford Lucero emphatically rebuked efforts to dissolve PAWSD or recall its board, saying he did not, nor would not support such activities.

“There’s an election coming up and at that time, people can step up and run for those seats. I don’t support a (PAWSD) recall. It divides the community and that’s not a good thing,” Lucero said.

Archuleta County Commissioner Bob Moomaw was out of town and unavailable for comment.

james@pagosasun.com