On Oct. 1, Town Manager David Harris revealed the town’s budget proposal for fiscal year 2025 at the regular meeting of the Pagosa Springs Town Council.
A transmittal letter on the matter, written by Harris, states that the council will be holding several workshops and one public hearing on the budget proposal before its final adoption on Nov. 21, with the council’s first workshop scheduled for Thursday, Oct. 10.
The letter states, “The annual budget is fiscally conservative and utilizes Town resources to maintain economic development, sustain Town service levels across all funds, and address long-term infrastructure needs … all accomplished within available resources.”
It has been stated at previous meetings that the town’s budget is a statement about its goals and priorities. This latest budget proposal lists the town’s sanitation district, staffing, and workforce housing as the town’s top three priorities.
On the town’s top priority — its sanitation system, governed by the board of Pagosa Springs Sanitation General Improvement District (PSSGID) — the town is currently moving forward with $4.5 million worth of revenue bonds to finance critical repairs to the district’s most urgent problem — failing sewer lines.
The budget proposal states, “The sewer collection system is in significant need of repair or replacement and has approximately one-third of its lines listed as Category 4 or 5 (on a scale from 1 to 5, with 5 being the worst).”
The sewer pipe rehabilitation project has been described as Phase 1 of upgrading the system’s infrastructure and will cost about $4 million, but other repairs and upgrades will be necessary.
“Staff and the Town’s new Municipal Financial Advisor are discussing alternative revenue sources” and “once a budget plan is in place over the next month or two, details will be added to the fiscal year 2025 budget,” the budget proposal states.
On the issue of staffing, the proposal looks to continue with the pay increases for town staff that it started with the 2024 budget, making “the Town of Pagosa Springs a more competitive employer and aid in recruiting and retaining employees,” the proposal states.
This staffing initiative has largely been successful, the proposal explains, stating, “For the first time in six or seven years, we have – or have had – fully staffed Police, Parks and Recreation, and Public Works Departments.”
The 2025 budget proposes a 2.7 percent cost-of-living adjustment (COLA) “to keep salaries competitive,” with the price of this increase costing $130,378 across all funds.
However, compared to 2025, money will be saved by the town “changing its insurance provider for health, life, dental, and disability beginning in November 2024, the proposal states, adding, “By making this change, the Town will save approximately $220,000 across all funds in 2025.”
Harris explained that the projected total revenue that the town will collect in 2025 would amount to about $16.8 million and that the total expenditures projected for the fiscal year would amount to about $16.7 million, with about $117,659 leftover that would go into reserves.
By the end of the year, the town would have about $11.6 million in reserves, and by the end of 2025, the projected reserves would grow to $11.7 million, leaving the town in “a healthy situation,” Harris said.
Concerning revenues, he noted that “sales tax makes up the vast majority” of the revenues for the town’s General Fund, “to the tune of about 75 to 76 percent.”
“Revenues for the fiscal year (FY) 2025 proposed budget are expected to increase 3.24% compared with FY 2024 year-end estimates,” the proposal states, with “the largest contributor of this increase coming from a [projected] 1.27% increase in Sales Tax and reallocation of Town and Archuleta County state Marijuana Tax revenue.”
But, Harris said, “Sales tax is a particularly fickle number … that is not as predictable as property tax or other forms” of revenue.
“That being said, understanding this — we monitor it monthly,” he said.
Some of the capital improvement projects proposed for 2025 include:
• Town Hall security upgrades, with a total project cost of $142,775.
• The design, engineering and construction of the 1st Street pedestrian bridge over the San Juan River, with a cost “just shy of $1 million.”
• The Gateway River Improvement Project and the Yamaguchi South River Improvement Project.
During public comment, resident Bill Hudson suggested that he appreciates the strategic goals being a part of the budget, but he didn’t see “anything about housing, your third most important priority,” in the budget proposal.
Hudson added that all he heard in the presentation about housing was that “you are going to take money out of where you’re putting it now from your fees from [short-term rentals] to help pay for the housing coordinator,” adding that he was under the impression that the position was going to be paid for by a $200,000 state grant. “I saw a big hole in your budget. You’ve got at least three parcels that you could put housing on and I didn’t see anything in the budget that was gonna make that happen, so I hope you can get this fixed, because we are in a desperate state here in our community.”
A budget workshop is scheduled for the council at 5 p.m. Thursday, Oct. 10, at Town Hall.
derek@pagosasun.com
