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Districts respond to impact fee assessment

A long-awaited assessment of county and town impact fees finally arrived late last month, and two area water districts have now voiced concerns.

Economic & Planning Systems Inc. (EPS) prepared the preliminary 48-page report — entitled Archuleta County/Pagosa Springs Joint Impact Fee Analysis — as an apparent update to a similar study completed in 2006. Local governments and special districts had until Jan. 20 to submit questions or comments to EPS, toward a final draft.

According to the EPS report, “An impact fee is a one-time charge assessed against new development that attempts to recover the costs incurred by a local government in providing the public facilities required to serve new development.”

The report adds, “An impact fee program enables a local government to collect revenue from a developer to cover capital costs that are directly related to the impacts generated by a proposed development.”

Again, according to EPS, the benefits of an impact fee program include:

• Requiring growth to pay its own way, while preventing existing residents from subsidizing costs generated by new development.

• Providing clear consistent standards for developers, while increasing predictability in the approval process.

• Enabling communities to provide the facilities and infrastructure necessary to keep pace with growth, thus improving quality of life within the community.

Due to rising tourism, and substantial residential and commercial growth in the 1990s and early 2000s, Archuleta County and Pagosa Springs first considered how best to provide adequate services and facilities in 2005. At the time, they set three primary goals:

• Establish a method to accommodate growth in a fiscally responsible manner.

• Establish a consistent set of expectations across jurisdictional boundaries and provide uniform standards to developers, regardless of annexation status.

• Maintain high levels of service for residents and businesses and require new development to pay its fair share.

To achieve their objectives, the county and town eventually created a joint impact fee program designed to offset some of the costs associated with providing necessary off-site infrastructure in the area of new developments. As part of the process, both jurisdictions considered a range of potential fees that might be assessed to accommodate new roadways, public facilities, parks, trails, water storage, fire protection and schools.

Despite some inconsistencies in the fee schedule, a profound economic downturn ultimately led to both governmental entities waiving all 2009 impact fees and reducing those for 2010 by 50 percent.

Meanwhile, in its latest area study, EPS considered the timeframe between 2009 and 2030 a reasonable planning horizon for all necessary capital facilities, except a proposed water storage facility. Within the 21-year period, EPS predicted an average 2.63-percent increase in overall residential units and a 1.77-percent bump in non-residential space.

While the San Juan Water Conservancy District (SJWCD) and Pagosa Area Water and Sanitation District (PAWSD) now question the EPS methodology in projecting growth rates, they have also expressed the following concerns with the EPS report:

• The percent of average annual growth used for each (taxing) entity is not detailed in the individual sections. The districts wonder if EPS considered the fact that different service area boundaries may have different growth rates?

• The San Juan Water Conservancy District name is used inconsistently and is incorrect in many places.

• Paragraph three, page one (of the report) lists “water storage” twice in the same sentence.

• On page 22 of the report, EPS suggests the total capital cost of an 11,700-acre-foot water storage facility is “$8,027,000, including wetlands replacement, boater bypass, and fish bypass.”

Actually, that amount is just for the SJWCD portion of the capital project, or the environmental mitigation and accommodations. The total project cost (for a 19,000-acre-foot reservoir) is estimated at more than $300 million.

• On the above note, there is no clear distinction between the SJWCD and PAWSD. Again on page 22, a portion of the report reads, “ ... the current proposal is for the county and town to adopt an impact fee to offset the costs of capital improvements required for water storage and to arrange sharing these funds with the water district through an appropriate intergovernmental agreement in exchange for the provision of water and sewer service.” It adds, “The existing SJWC district boundary was utilized as the benefit district for this fee program.”

In truth, the SJWCD does not provide water or sewer services, and PAWSD is not a recipient of impact fee funds, or a participant in the EPS study (other than providing data and reports).

• The SJWCD already has a conditional-water-rights decree for 6,300 acre feet of storage at Dry Gulch. Therefore, regardless of the final outcome in ongoing litigation with Trout Unlimited — particularly in respect to diversion (water) rights and reservoir size — the environmental work should continue. Because both water districts believe that cost will be the same for a reservoir of any size, they suggest EPS rescind its recommendation that related impact fees not be collected until the court case is resolved.

• In the Comparable Community Research portion of the report, EPS failed to analyze any other communities currently planning major water storage projects. Too, no counties were used for comparison, even though the report pertains to county-wide analysis. Therefore, the districts wonder how comparable the “comparable communities” really are.

• Also, in its water/sewer comparisons, EPS makes no distinction between PAWSD sewer fees and Pagosa Springs General Improvement District sewer fees, the former of which should not be included in this study.

• On page 37 (of the report), EPS refers to a 3/4-inch water meter as the basis for calculating “equivalent units” when estimating residential water usage. PAWSD considers a 5/8-inch meter — or the industry standard — as its basis of comparison. The districts insist the difference skews calculations in determining the number of EUs needed in the future, and how much related impact fees should be.

While the above are initial water districts concerns, others will likely surface as legal and engineering consultants continue their review of the EPS report. Meanwhile, after all stakeholder comments are in, board members of both districts hope to meet with EPS and representatives of the county, town and other special districts to resolve respective conflicts.

No one has said how long that process might take, or when a final report is due.