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Sanitation board considers fee waivers, effects

Appealing to the board of the Pagosa Springs Sanitation General Improvement District (PSSGID) during a meeting last week, two area residents asked for sewer fee waivers on properties they claimed were not using sewer services.

While the board did not make a decision on the waivers during the meeting, the appeals brought two broader issues to light: Inconsistencies on how PSSGID applies waivers between commercial and residential customers, and how those inconsistencies could affect a pending application for USDA funding for a new wastewater treatment plant.

Currently, the PSSGID is pursuing federal money through the USDA to fund a wastewater treatment plant

In 2006, the Colorado Department of Public Health and Environment (CDPHE) mandated construction of a new plant after the current wastewater treatment system reached capacity and was subject to several outflow violations. Originally set for construction in October 2008, the project ran into funding and permitting problems during the planning stages. The project was further hobbled with construction on the plant delayed indefinitely, and with contract bids for construction of the facility far exceeding the amount the town had secured for the project.

Last year, bids for construction submitted in mid-April 2009 far exceeded the structured funding pursued by the town and PSSGID at that time, a combination of loans and grants from the Colorado Water Resources and Power Development Authority (CWRPDA) and Department of Local Affairs (DOLA).

When PSSGID determined that DOLA and CWRPDA money would not sufficiently fund a new plant, Pagosa Springs Town Manager David Mitchem and PSSGID supervisor Phil Starks looked to the USDA for funding options. However, by mid-summer 2009, the board turned the USDA down, deeming federal requirements too stringent, and potentially too expensive, to pursue the USDA’s offer.

Earlier this year, a combination of factors led the board to take a second look at USDA funding. With the CDPHE having rejected various alternatives for wastewater treatment proposed by PSSGID, CWRPDA and DOLA demanding money back due to inactivity on treatment plant construction (with the district stuck with a $75,000 bill for interest last year) and relaxed USDA stipulations for initial engineering on a proposed plant, the board became more receptive to federal funding. In early March, the board voted to take a second bite at the USDA apple.

With USDA approval of the PSSGID’s funding application on the line, the board considered what impact fee waivers ( and how those waivers are applied) would have on potential funding opportunities. Early in the discussion, Starks (who recommended rejecting the appeals) stated that the USDA would be looking closely how the district structures its rates.

In the first appeal, developer Chris Smith requested the waiver of nine Equivalent Residential Taps (ERTs) at the Pagosa Riverwalk Condominiums on South Fifth Street. Smith’s appeal stated that since the condominiums had not been sold, with “zero income or cash flow,” the fees were an undue financial burden.

In the second appeal, local resident Martha Maez requested a waiver on her mother’s home. Maez stated that her mother now lived at home with her and was not using sewer service. Furthermore, Maez stated that she had been unable to sell her mother’s home.

According to Starks, sewer service (in Pagosa Springs) is different than other utilities in that it is not metered and cannot shut off. In the former, metering is expensive, requiring comprehensive retrofitting throughout the district. In the latter, shutting off service potentially creates health and sanitary issues (e.g. a nonpaying customer improperly disposing of human waste).

Acknowledging the validity of those issues, it was the fact that the PSSGID had approved waivers on several commercial customers that led to some matter of contention.

PSSGID regulations allow for account dormancy on seasonal businesses (e.g. campgrounds), provided those customers provide closure dates in advance and there is complete closure of the business during those dates.

Starks conceded, however, that the PSSGID had granted a waiver to the Skyview Motel on five uninsulated units that remain closed during the winter months while the remainder of the motel stays open.

“I disagree this is residential,” said board member Stan Holt, referring to Smith’s condominiums, adding, “We didn’t even follow our own regulations with the Skyview Motel. I don’t think we can be selective.”

Board member Kathie Lattin disagreed, pointing out that the Skyview Motel is zoned as commercial and asking (in regards to the condominiums), “This has been zoned residential, has it not?”

Disputes over commercial versus residential zoning aside, the board moved on to the question of customers paying for a utility even though the utility was not being used.

“It seems to me that we’re charging for a service and we’re not providing a service,” said board member Darrell Cotton.

It was board member Jerry Jackson who brought the issues full circle when he asked Starks if fee waivers and apparent discrepancies in the policy could compromise USDA funding opportunities. Starks and Mitchem responded that those inconsistencies would be problematic as far the scrutiny of the PSSGID and its funding application.

“If we change our accounting midstream, it could create some confusion,” Mitchem said.

“Certainly, we don’t want to jeopardize that,” said Cotton regarding federal funding opportunities, “but we need to do something different.”

Board member Don Volger agreed with Cotton, adding that the matter should be tabled until staff had investigated impacts to the USDA application as well as dealing with fee discrepancies.

“It sounds like the board needs staff to work on a number of different options,” Mitchem said, telling the board that, if the matter was tabled, staff would investigate the matters in question. However, Mitchem suggested that, until all aspects of the fee waiver issue had been resolved, an abeyance should be put on the appellants accounts, sparing them penalties pending staff’s findings and the board’s decision.

The board approved a motion instructing staff to investigate fee waiver impacts with the USDA and how to handle dormant accounts, as well as agreeing with an abeyance on the accounts in question.

Although the next PSSGID board meeting is Thursday, July 22, following the noon Pagosa Springs Town Council meeting in Town Hall, it is unknown if the board will rule further on the matter.