Read Part One
"Public-private partnerships." We've heard, for many years now, that these types of business relationships are "beneficial" for the community. The partnerships, we are told, can accomplish projects that neither government nor private business are able to accomplish separately.
We've seen a small number of these partnerships formed here in Pagosa Springs, including the Ross Aragon Community Center, (about which we are having a frank discussion in this article) and the new Geothermal Power Utility — a "public-private partnership" between the Town and the County and a relatively new (and inexperienced) business named Pagosa Verde.
Other recent partnerships include the proposed Geothermal Greenhouse project in Centennial Park — and the controversial Pagosa Springs Community Development Corporation (CDC) project, originally created by the Town and County as a supposedly "independent" corporation, but with leadership supplied by Town and County officials. Over three years, the CDC spent about $500,000 of mostly taxpayer subsidies, and had nothing to show for it.
One interesting thread connects all of these projects, beyond than the fact that they were supposedly "public-private" collaborations. They were all created with rather vaguely written contracts, or without any written contracts at all, concerning the operations and maintenance of the partnership assets. Apparently, former mayor Ross Aragon and his supporters on the Town Council simply assumed that the Town taxpayers would happily subsidize these partnerships for decades into the future.
As mentioned in Part One, the Ross Aragon Community Center has been staffed and funded by the Town government since 2001 — but I had never heard any Council member raise questions about those subsidies, or ask about the lack of a operations agreement, until this current 2015 budget approval cycle. Based on what little I know about Town government, I assume the Council's surprising new interest in this particular (perhaps problematic) partnership is mainly due to the fact that we have a new Mayor serving the community.
We also noted previously that the Town assumed a 51 percent ownership of the Community Center — at least in part, because a $500,000 Community Development Block Grant, that helped fund the facility, required Town ownership.
Additionally, the Town took out a $2.1 million loan to fund an additional portion of the construction costs ($2.8 million when you count the interest.) In order to sidestep the Colorado constitution, which requires voter approval of new municipal debt, the mortgage was designed as a so-called "Lease Purchase". The Town still paid back the loan with interest, as they would any "voter approved loan" — but the designation of the document was changed to protect Town leaders from a lawsuit.
I believe the final payment on that loan was made this past July?
In the 2001 "public-private partnership" agreement that approved the construction of the Ross Aragon Community Center, the "private" half of the partnership — the Pagosa Springs Community Facilities Coalition — agreed to administer and manage the day-to-day aspects of the Community Center. Paragraph 9 of the agreement states, “It is contemplated that the Coalition will contract with the Town for the administration of the Community Center using Town Employees. Coalition would then reimburse the Town for time and whatever miscellaneous costs are incurred by [T]own employees in performing administration and personnel management services.”
The Town's budgets for 2010, 2011 and 2012 show a total of $402,364 spent on staffing and operating the Community Center. (Source: Town budgets)
For those same three years, the federal 990 filings for the Coalition show a total income, from rentals and other sources, of $239,765. (Source: report by Matt Roane) That's nearly a quarter-million dollars.
From what I can tell, none of that nearly quarter-million dollars of Coalition income, from 2010-2012, went to reimburse the Town "for the administration of the Community Center using Town employees." And even if the private corporation had indeed contributed their entire revenue to the Town (as implied in the 2001 agreement), the Coalition would still be $160,000 shy of fulfilling their promise, during that three year period.
It appears that the Coalition has been violating the 2001 "public-private partnership" agreement on a consistent basis. The taxpayers have picked up the corporation's tab. We now have a new Mayor at Town Hall, and a new Town Council, and a new Town administrator. I sense, from listening to recent Council discussions, that the relationship between the Coalition and the Town will be renegotiated in the coming months. It's not clear, however, whether the Coalition will be asked to reimburse the taxpayers for past broken promises — even if that would be the proper thing to do.
Meanwhile, the Town Council is currently looking at creating yet another "public-private partnership" with yet another group created by Ross Aragon and his friends: the Geothermal Greenhouse Partnership. Once again, the Town will become the majority owner of a "privately administered" project so that a private corporation can once again benefit from a Colorado grant program for which the corporation is legally ineligible.
From what I can tell, the Council has signed no agreement whatsoever defining the limits and responsibilities of this new, proposed "public-private partnership" — other that a sweetheart lease with the corporation, to provide free municipal land and water resources.
As Mayor Don Volger noted earlier this month, "When we join together with resources, we're going to get more done." He also stated, at the same meeting, "I think that we need to protect the interests of the Town when we enter into these agreements, to make sure, you know, that our primary focus is on the interests of the Town residents."
Surely, the Mayor understands that we need not only competent agreements that protect the public's interests — we also need competent leaders who actually enforce those agreements. We've had neither, over the past decade.