Parker: Searching for dough to complete Rueter-Hess

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The collapse in real estate in Parker has had a negative impact on funds for Parker Water and Sanitation’s Rueter-Hess Reservoir. Here’s a report from Chris Michlewicz writing for the Parker Chronicle. From the article:

When the housing market began its long slide into the abyss in 2006, district officials immediately began to notice the impact. The number of tap fees collected went from 1,700 in 2005 to suddenly 600 the following year. Last year, just more than 300 taps were connected. This year, as of June 4, only 18 taps have been sold. “All of our planning was based on a worst-case scenario of 600 taps per year,” [Frank Jaeger Parker Water and Sanitation District’s longtime manager] said during an interview in late April. “This thing has escalated on us.”[...]

Unfortunately for the district — and for its customers, it turns out — the end came into sight much quicker than ever thought possible. Between 2005 and 2008, Parker water collected $65.9 million in taps fees. The money funded capital projects, built up reserve funds, and was also used to pay debt service on the $105 million in revenue bonds issued in 2004. (Money for the expansion was paid up front by Castle Rock, Castle Pines North and Stonegate, who entered into a partnership to buy water storage in Rueter-Hess, which is still under construction just southwest of Parker’s town boundary). Counting the 5.118 percent interest rate on the bonds, Parker water is responsible for paying $12 million per year on its debt. To date, according to its finance director, the Parker Water and Sanitation District has paid only $4.1 million of the loan principal. That means the outstanding principal for Rueter-Hess alone stands at $101.3 million. And there is little in the way of revenue coming in right now. Enter last December’s proposed rate and fee increase of 28 percent on the water district’s 12,900 customers…

Conversely, prospective residents have a new quandary to consider. They, along with the existing population, will be responsible for covering the remaining costs for Rueter-Hess Reservoir, plus another $80 million in outstanding district debt, unless development picks up soon. Those who eventually move into The Canyons, a massive planned residential development just north of Castle Rock that will also be served by the Parker water district, will pay the high cost of water and eat the tap fee expense that is passed on from the developer. “People moving into Parker who haven’t got their homes built right now are in for that same surprise,” Jaeger said. “There’s no getting away from the cost of developing water.” One study conducted by a district consultant showed that the Parker area will need roughly 31,000 acre-feet of water as an indefinite supply. Jaeger is still exploring options — some very promising — for obtaining water for the future. “I’m looking 100 years down the road,” he said. “This community is not going to go away, and it’s going to need a water supply.”

More Coyote Gulch coverage here and here.

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