Is Town of Telluride Ballot Issue 2A — which asks voters to authorize a $7.4 million bond debt to fund improvements to the wastewater treatment plant — the Steve Bullock of this year’s ballot?
Wedged between town’s perennial hot-button issue of financing affordable housing and a proposed mill levy increase to shore up funding for the very popular Wilkinson Public Library, the wastewater treatment plant’s bond is much like the Democratic presidential hopeful: struggling to get the attention of voters.
Telluride Director of Public Works Paul Ruud acknowledged that 2A isn’t exactly setting the Sweet Rants thread alight.
“My nightmare scenario is that there isn’t a lot of discussion about it, so there’s not a lot of understanding of the topic and why the funding is necessary,” he said. “What I am hopeful of is that given the fact that we have gone through a really public Wastewater Treatment Plant Master Plan, coupled with a very public presentation and feedback last year when we did our rates study, that there is public understanding of what’s going on with the plant itself and our genuine need for additional funding.”
According to Ruud, there are three challenges facing the wastewater plant, which serves customers in Telluride, Mountain Village, Hillside, Eider Creek, Lawson Hill and Aldasoro.
First, is age, he said, “The treatment plant is more than 30 years old and it is showing its age.”
In addition, Ruud explained, the treatment plant is sometimes full, which, in the world of wastewater treatment, is not a good a thing.
“Thankfully, it doesn’t happen frequently, but three, four or five times a year, the treatment plant is running at, or near, capacity,” he said.
And then there are the regulatory changes taking place in Colorado that are good news for the environment, but add to the to-do lists and budgets of public works officials like Ruud and his colleague, Telluride Environmental and Engineering Division Manager Karen Guglielmone.
“As challenging as the first two items are — old and full — the challenge of the regulatory changes may be even bigger,” he said. “We’ve seen a phenomenal push from the State of Colorado to have stricter standards on the effluent that is coming out of the treatment plant. I’m an environmentalist, and I spend as much time as I can in the summer rafting on the rivers, I have no desire to pollute a river. When they come with these very strict limits on what the effluent can be, though, there are real financial implications.”
According to Ruud, these financial implications refer to the considerable cost of the plant improvements necessary to meet the new limits.
Ruud said that failing to meet the state limits on effluent can lead to written warnings and later to fines in the “mid-range eight-figure numbers for a community of a couple of a thousand people. It really does have a financial impact.”
Ruud explained that town staff examined three options for funding in response to these challenges and in order to implement the recommendations of the master plan: a rate increase, a debt issuance, or a hybrid approach, which called for a more moderate rate increase coupled with a strategically timed debt issuance, like the one proposed in Ballot Issue 2A. Town Council chose the third option.
“It shoots for the middle and makes for a smoother line of revenue generation,” Ruud said. “We did that substantial rate increase last fall, which helped us with the cash-only part of our operation. Now, the ballot question that we are weighing with the community is the debt issuance of $7.4 million that should infuse some much-needed capital for these much-needed improvements.”
With the Town of Telluride sharing ownership of the plant with the Town of Mountain Village and customers spread over five communities, Ruud remarked that the plant itself will repay the debt, not the Town of Telluride.
“What we’ve done is a revenue bond,” he said. “The wastewater utility itself will be making the repayments. It’s not a property tax, nobody will get a bill for this debt issuance. The wastewater utility will pay the debt. I’m not a big fan of borrowing money, but the one time when it makes sense for a government-run utility is if it’s a long-term improvement, something that is going to last for 20 years and so you spread the expense over 20 years.”
Ruud added, “Our philosophy is that we infuse the fund with capital now, so we can do the next steps identified in the master plan to make the plant run the way it needs to.”
Ruud pointed out that some of those next steps will need to address new state nutrient standards to regulate the processing of nitrogen and phosphorous by the wastewater treatment systems. Currently, he said, the new standards are only applicable to the state’s larger communities, with rollout to smaller towns and districts coming in the next few years.
“It will require a new technology; we won’t be able to get there with our existing plant. There is going to need to be a substantial rebuild of the treatment plant that includes newer technologies to get the nutrient levels down to what they need to be,” he said.
Ruud said that this will involve substantial work at the plant without taking it offline, a complex task.
“We know it’s coming,” he said. “We are trying to prepare for it. All of these other improvements we are doing with the master plan are to get us to that pretty substantial rebuild that will need to come online prior to 2027. That’s the one that is driving some of the really large numbers in our finances. It’s daunting financially and it’s daunting in terms of how we’re going to actually rebuild a wastewater treatment plant while it’s still in operation.”
With the bond issue now in the hands of Telluride’s voters and with these challenges ahead, a group of elected officials and town staff recently travelled to Decatur, Arkansas, a town roughly the same size as Telluride located outside Bentonville. The group included Telluride Mayor Sean Murphy, council members Tom Watkinson and Jessie Rae Arguelles, and staff members Ruud, town manager Ross Herzog, town engineer Joyce Huang, and Town of Mountain Village Public Works Director Finn Kjome.
Ruud said that the plant is about the same size as Telluride’s and has already achieved some of the improvements that Telluride will need to implement.
“I’m very excited that I have elected officials that are this interested in what is arguably Telluride’s biggest challenge over the next few years,” Ruud said. “This was about education and learning and illuminating the path forward. It was an important trip.”
Ballot Issue 2A and funding for the wastewater treatment plant will get some attention tonight (Wednesday) at the Telluride Association of Realtors’ Candidates and Issues Forum from 6-8 p.m. at Rebekah Hall.