Pagosa Springs Town Council unanimously approved placing a $3 million flood recovery loan on the April 7 ballot during their January 20 meeting, addressing a federal funding shortfall after FEMA denied the town’s disaster assistance request. The Colorado Water Conservation Board loan would carry zero interest for three years, then 3.35% interest for 27 years, with annual payments of approximately $170,000 after the initial period and total debt obligations of $4.6 million over the full term. Council members expressed concerns about borrowing for recurring flood risks but acknowledged the necessity, with funds designated for public safety improvements and bank stabilization rather than rebuilding to pre-flood conditions. The meeting also featured approval of municipal court fine adjustments for the same ballot, a property agreement supporting downtown emergency medical services, discussions of ongoing sewer system emergencies that could impact future development, and tourism recovery efforts showing mixed results. Mayor Shari Pierce and all seven council members attended the 5 p.m. meeting at Town Hall, with an executive session lasting 47 minutes to discuss development negotiations with Servitas, LLC.
Flood Recovery Funding
The loan addresses an estimated $5.7 million in total flood damage, with a Natural Resources Conservation Service grant covering approximately $3 million. Town Manager David Harris reported that Governor Polis has petitioned the federal administration for FEMA reconsideration.
The loan terms include a 1% origination fee of $30,000 and the ability to prepay without penalty. Individual projects funded by the loan will require separate council approval, focusing on protecting public infrastructure including the museum and South Sixth Street.
Municipal Court Charter Amendment
Council approved placing a charter amendment on the April ballot to change municipal court penalties from fixed $1,000 fines and one-year jail sentences to “maximum permitted by state or federal law.” The change responds to recent Colorado Supreme Court decisions on municipal penalties and shifts authority to the Town Council for setting rates within legal limits.
Medical Center Property Agreement
Council unanimously approved an amendment to the agreement with Pagosa Springs Medical Center for the San Juan Rangers building at 302 San Juan Street. The amended agreement allows the medical center to continue owning the property for emergency medical services station development while the town retains right of first refusal if the property is sold or no longer used for emergency services. The change supports downtown emergency medical services for the eastern part of town.
Sales Tax Decline Continues
November sales tax declined 9.91% town-wide, excluding marijuana sales, with major impacts in retail trade and accommodation sectors. However, lodging tax showed improvement in November after earlier declines.
The town’s quarterly investment report showed average yields of 4.32% through ColoTrust, generating over $668,000 in interest with a $15 million average balance.
Tourism Recovery Efforts
Tourism Director Jennifer Green presented a $525,225 marketing budget representing a 16.67% increase, focusing on recovery messaging and shoulder season growth. The department launched “Pagosa is Open” campaigns targeting regional markets after flood impacts caused visitor confusion.
November lodging tax increased 6.8% despite earlier declines, with mobility data showing overnight visitor increases. The tourism department hired BPR public relations agency for media relations and crisis communications, while social media efforts generated over 1 million YouTube views in December.
Sewer System Emergency Discussions
Council member Gary Williams proposed elevating sewer emergencies to official emergency status, suggesting potential building moratoriums or external engineering reviews. Williams advocated for a more holistic approach beyond current repair cycles.
Harris reported daily coordination with state officials and expedited applications, with discharge limits applications due the first week of February. The town briefed State Senator Cleave Simpson on the urgency of the sewer situation. The town is exploring temporary solutions including mobile treatment units while pursuing permanent infrastructure improvements.
Housing Development Progress
Habitat for Humanity Executive Director Leah Ballard reported completing year four of their “15 Homes in 5 Years” program, successfully tripling historical build capacity from one home annually to three homes per year. The program has generated 3,084 volunteer hours on-site and $73,000 in business contributions.
The organization requested $10,000 for loan packaging services, having assisted 14 additional USDA mortgage applications for non-Habitat buyers. Typical mortgage payments range from $1,500-1,700 monthly at 1% subsidized interest rates, compared to $1,800-1,900 monthly rent.
Public Safety and Recreation Reports
Police Chief William Rockensock reported 534 calls for service in December with no open staffing positions. The department secured a $4,280 training grant while officers completed training in fire investigation, community policing, and anti-bias procedures.
Parks and Recreation Director Darren Lewis reported 657 December participants in free programs, with 8,146 community members utilizing facilities throughout 2025. The department secured $86,000 in grants from Colorado Parks and Wildlife and Great Outdoors Colorado over two years.
Administrative Updates
The town is preparing for 2026 elections with four positions available: three Town Council seats and one mayoral position. Current staffing includes 63 full-time positions with 61 filled and 10 part-time positions all filled.
Town Hall remodeling neared completion with security improvements. Business licensing showed 832 active licenses and 93 vacation rental permits issued.
Municipal Court processed 41 cases in December, with 34 total cases under supervision.
Public Comment and Routine Business
Eddie Archuleta raised ongoing concerns about sidewalk snow removal affecting children walking from low-income apartments. Mayor Pierce committed to getting clarification on responsibility between property owners and the town.
Council approved the consent agenda including December financial statements, quarterly investment reports, and a letter of support for a Colorado Tourism Office grant.
Upcoming Decisions
Council scheduled a joint work session with county commissioners for January 26 at 5 p.m. to discuss housing deed restrictions, Highway 160 updates, and North Pagosa Boulevard reconstruction opportunities. Ongoing discussions continue regarding school board middle school location preferences and their potential impact on downtown development patterns.
The April 7 ballot will present both the flood recovery loan and municipal court charter amendment to voters, with implications for long-term municipal finances and legal authority structures.
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