Door closed on Dry Gulch


By Lindsey Bright

Staff Writer

After nearly a decade, a door has been shut, a motion has been made, a loan will be closed.

During Tuesday’s Pagosa Area Water and Sanitation board of director’s meeting, with both directors Mike Church and Roy Vega excused, the board unanimously passed a motion to send a letter, “requesting substantial completion” to the Colorado Water Conservation Board regarding their $11. 2 million loan, of which only $9.2 million has been drawn and used.

The letter will be sent to Kirk Russell, CWCB’s finance section chief, who had recently told PAWSD that he needed a letter of intent and direction by Sept. 18 to present to the CWCB board.

PAWSD Business Manager Shellie Peterson will write the letter to inform the CWCB board that PAWSD does not, with the current board, intend on building Dry Gulch Reservoir and they will not be drawing the remainder of the loan out. The PAWSD board used $9.2 million of the CWCB loan, along with the San Juan Water Conservancy District’s $1 million CWCB grant, to purchase the Running Iron Ranch in 2007 as a reservoir site. Prior to this letter, there had been discussion by previous PAWSD boards considering use of the rest of the funds to buy a small portion of the adjacent Laverty property in order to have enough land to build the reservoir.

“This doesn’t close anything to the CWCB; it just closes out the loan,” Peterson said. Peterson said that closing out the loan and repayment of the loan has been budgeted.

Currently, PAWSD is paying $1,000 per day in interest and will continue to do so until it is able to call substantial completion. Once substantial completion is called, the district will be able to pay on the principal, thus minimizing the interest.

In an interview with SUN staff, Peterson explained that the financial plan and rate study Red Oak Consulting completed last year had this scenario — closing and paying back the CWCB loan — worked out in the study.

When asked if there was a plan that did not assume that the loan would be closed out, Peterson responded in an e-mail, “Prior to the most recent study it would have been assumed that the District would have drawn the full $11.217 million and payments would have been calculated on that amount. In either event, 2013 has always been used as the date in which principal payment would begin.”

Director Glenn Walsh asked for a work session in which the budget, and costs of the loan and repayment, would be discussed in more depth.

The PAWSD board made more changes during the meeting.

During the past year, the PAWSD board has discussed the equivalent unit measurement now in place. The Resolution to Amend the Resolutions Adopting Policy to Determine Equivalent Units for New or Change of Use Commercial and Residential Connections was approved by the board unanimously. Previous to this amendment, in order to make a connection to the PAWSD water system, a fixture count worksheet had to be completed. Based on the number of fixtures, PAWSD determined the EU rating. Board Chair Allan Bunch said this method was a good planning tool, but not a good billing tool; the number of fixtures in one house does not mean that house will use more water than a house with fewer fixtures.

The methodology for determining EU for new construction will have a licensed engineer working with the owner or agent fill out the worksheet — to be used as a planning tool. The EU size will be determined based on the hydraulic capacity ratio of the meter size. Thus, one EU is equal to a 1-inch meter size.

The PAWSD board also took action on the matter of unequal pricing on water sold at fill stations versus that sold to water haulers at the PAWSD main campus. District Manager Ed Winton explained that, currently, the cost for a water hauler at the main campus is $10 per 1,000 gallons of water, while at the fill stations it is  $7.58 for every 1,000 gallons.

“That is price discrimination that doesn’t seem to have a rationale,” Walsh said.

The board made and passed a motion changing the price for water haulers to $7.58 per 1,000 gallons at both sites.

Related to this matter, Winton said there had been some vandalism to some of the fill stations since the district switched to credit card or PIN (issued by PAWSD) payment. Because of this, security cameras with the ability to pan, tilt, zoom and read license plates numbers have been installed. If people have questions regarding the new payment system at the fill stations, they should contact PAWSD by phone, 731-2691, or go to the website,

Region 9 Executive Director Ed Morlan and Parelli Natural Horsemanship President Mark Weiler requested that PAWSD sponsor a community development block grant. The grant’s purpose would be to assist in building pipeline infrastructure to include the Parelli ranch into the PAWSD system. The cost is currently estimated at $180,000. The grant would pay for 50 percent if Parelli will produce new jobs from this growth. The other 50 percent would be paid by Parelli. After construction, the infrastructure would be deeded over to PAWSD. The board consented to participate in the application process. No grant has yet been awarded, but if one is, Weiler hopes to begin construction in spring of 2013.