By Chris Mannara
During a regular meeting of the Pagosa Area Water and Sanitation District (PAWSD) Board of Directors on Jan. 16, the board discussed potential fee waivers for affordable housing developments and how to make up for potential lost revenue.
The majority of the discussion at the board meeting on Jan. 16 centered around a worksheet crafted by PAWSD District Manager Justin Ramsey.
In a follow-up interview on Jan. 21, Ramsey clarified more about what the fee waivers could mean for PAWSD.
Currently, PAWSD charges about $4,898.68 per equivalent unit (EU) for its water capital investment fee (CIF), according to the worksheet.
For its wastewater CIF, PAWSD charges $1,079.44 per EU.
PAWSD has 5,961 water connections, 3,382 wastewater connections, 7,837 water EUs and 4,581.5 wastewater EUs.
Within the worksheet, variables are also noted, and for potential affordable housing developments that would serve those making under 60 percent of the area median income (AMI), PAWSD would be willing to waive 100 percent of its CIF fees.
For developments that are 60 to 80 percent AMI, PAWSD would be willing to waive 50 percent of its CIF; for developments that are 81 to 100 percent AMI, PAWSD would only be willing to waive 25 percent of its CIF, according to the worksheet.
“An AMI is either a mortgage, or rent of $1,269. It gets more complicated than that. It depends on if you’re single, married, kids, all that stuff, but in general, that’s what it is,” Ramsey said.
PAWSD has not figured out who exactly will tell them what the AMI is, he noted.
“We’re not going to let the contractor tell us that,” he said. “If somebody comes in and they are going to build a home that’s less than 60 percent AMI, we’re not going to charge them a capital investment fee.”
Within the worksheet, it is noted that PAWSD will have 2 percent growth annually; this equates to about 157 water EUs, or $768,092.76, and 92 wastewater EUs, or $99,308.48.
“That’s where we came up with for our capital investment plan and it’s what we use for our rate study. So, it’s consistent with that rate study,” he said. “Based on 2 percent, we’re going to see 157 water EUs this coming year and 92 wastewater EUs, assuming 2 percent growth.”
Additionally, PAWSD assumes that, of those 157 EUs, 5 percent will be workforce housing that is less than 60 percent AMI, 8 percent will be 61 to 80 percent AMI, and 10 percent will be 81 to 100 percent AMI, Ramsey explained.
If there is 5 percent of workforce housing that is less than 60 percent AMI, that equates to eight EUs, which also equates to $39,189.44 that PAWSD could lose in water EUs, Ramsey explained.
Additionally, that would equate to five wastewater EUs, which equates to $5,397.20 that PAWSD could lose.
For units that are 61 to 80 percent AMI, it would be 12 water EUs and seven wastewater EUs, which means PAWSD could lose $29,392.08 and $3,778.04, respectively.
On developments that are 81 to 100 percent AMI, that equates to 16 water EUs and 10 wastewater EUs, respectively, which means PAWSD could lose $19,594.72 and $2,698.60.
“Everything is based off that rate study and that capital investment plan, which assumes you’re going to have that money,” he said.
Under the assumption that there will be 157 new homes built next year, and that 5 percent will be under 60 percent AMI, 8 percent will be 60 to 80 percent AMI and 10 percent AMI, PAWSD could lose $88,176.24 in water CIF and $11,873.84 in wastewater CIF, according to Ramsey.
“We’re going to make an assumption. We’re going to go out on a limb and say this is how many we’re going to get,” he said. “If there’s more, we lose more. If there’s less, we don’t lose that much.”
If everything goes according to PAWSD’s assumptions, PAWSD will have to make up about $100,000 in lost water and wastewater CIFs, Ramsey noted.
The way to make that up is to increase the remaining CIFs for all of the homes that are being built for over 100 percent AMI, Ramsey explained.
For homes above 100 percent AMI, water CIFs could go up $728.73, making the new water CIF $5,627.41, Ramsey explained.
This would be a 12.9 percent increase for the water CIF, he added.
For the wastewater CIF, homes over 100 percent AMI could see an increase of $169.63, making the new wastewater CIF $1,249.07.
This would be a 13.6 percent increase for wastewater CIF, he noted.
“If all that happens and all of our assumptions are correct, that we do get exactly 157 new homes built and 5 percent of those are less than 60, 8 percent of those are 60 to 80 and 10 percent are 81 to 100, PAWSD breaks even,” he said. “If it’s less than that, we’ll actually bring in more. If it’s more than that, we will lose some. But we’re assuming, over time, that’s what we’re going to average.”
These assumptions could be adjusted later, Ramsey explained later.
“The board represents the people. So, they have to make a decision on if it’s worth — every house that’s built out there that’s not affordable is now going to cost an extra $900,” Ramsey said. “Is the benefit of having affordable housing worth that additional cost to the public as a whole?”
Ramsey explained that this proposition will be a decision item for the PAWSD Board of Directors at its next board meeting on Feb. 13 at 5 p.m. at the district office, 100 Lyn Ave.