Telluride Council Votes to Fund Pandora Water Shortfall
by Samuel Adams
Sep 08, 2013 | 2449 views | 0 0 comments | 29 29 recommendations | email to a friend | print

Town to Mortgage Assets to Fund $4.8M Shortfall

TELLURIDE – In a 5-1 decision, the Telluride Town Council approved spending $4.8 million in additional funding to finish constructing the Pandora water project, which began in 2011. The project is facing a budget shortfall due to unexpected costs associated with overcoming engineering obstacles.

Councilors voted to mitigate the nearly $5 million shortfall by using “certificates of participation,” a funding mechanism that allows the town to bet against its own assets. In essence, the town chose to mortgage the Stillwell facility and place a second mortgage on the Telluride Marshal’s Office building. To date, the only town facility not currently under a similar mortgage is the Telluride Historical Museum.

Council could have closed the budget gap by asking voters for tax increases or by selling town properties but ultimately chose not to.

Councilor Thom Carnevale was the only dissenting vote during the meeting at Rebekah Hall on Aug. 27. Carnevale, who voted for the $10 million bond program in 2005 that funded much of the project, said of the budget gap, “I’m not saying a tax increase was the best alternative to mitigate this shortfall, but the people should have a voice in making that decision. Given that choice, they probably would have voted to complete the project using a tax increase meechanism.”

Telluride Mayor Stu Fraser agreed with council’s decision to use certificates of participation, saying, “It worked for the Valley Floor, it’s worked for other areas… It’s a path we can follow without having to increase taxes.”

Council is eager to finish construction of the Pandora water treatment facility, a project nearly a decade in the making. The Pandora station will pipe water from lakes in Upper Bridal Veil Basin to a new treatment facility that will be flowed down to the town for use.

Years of low water levels have strained the Mill Creek Water Plant, the town’s current water treatment facility, causing the town to seek alternate water sources. Even after voters approved the $10 million bond program ballot question in 2005, the town endured eight years of legal wrangling with the Idarado Mining Company over water treatment rights, exacerbating the town’s water shortage problem.

In November 2012  Telluride reached a settlement with Idarado, shoring up the town’s ability to develop a new municipal water supply, and streamlining construction of the new water treatment facility. Town attorney Kevin Geiger called the settlement in December 2012, “One of the more intensive engineering and legal efforts the town has ever undertaken.”

Construction for the Pandora water treatment station began in the summer of 2011, and is anticipated to continue through it’s opening day on Nov. 1, 2014, the date the plant is legally required to begin operating in accordance the town’s 2012 settlement with the Idarado Mining Company.

Public Works Project Manager Karen Guglielmone said this year’s construction, which began in May, is slated to end mid-December in anticipation of winter conditions and avalanche danger. Construction crews are scheduled to start working in early spring. Construction is generally on time, she added, adding that unpredicted high levels of visitors in the area and substantial rocks on the access roads caused some delays.

Years of low water levels have struck concern in the region, most notably when the town banned all public and private use of fireworks at the Telluride Fourth  of July celebration for the past two years.

“We are just a fire away from having a crisis in town,” Greg Clifton, Telluride Town Manager, said of the water shortages in December 2012, “The numbers do not lie: we do not have any margin to play with.”

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