Water will come from a well; tap fees and appraisals cause friction
By Mark Reaman
While not yet settled, it appears the Crested Butte Fire Protection District’s (CBFPD) new safety campus along Gothic Road near the Crested Butte cemetery will break ground in the spring of 2024 and utilize town sewer service but not town water. The fire district board of directors rejected the town’s offer of providing water citing the cost, and plans to proceed with an onsite well, augmentation water and accompanying water storage for fire suppression which the district believes will be cost effective over time. The district is also asking the town to discount the out-of-town tap fees and monthly service charges for the wastewater utility service.
“As we previously discussed, sewer service involved a number of conditions that were both related and unrelated to the sewer service itself,” said CBFPD chief executive officer Sean Caffrey in an email. “The biggest unrelated condition we were working through involved the rough-in of a trail section from the (town-owned) TP-1 parcel to the Slate River near where the old bridge was. Also involved was a lift station and sidewalk connection. We estimate those items combined will add up to about $400,000 plus the Town of CB sewer tap fee of $222,768 which is 1.5 times the usual tap fee. We have asked for a discount down to the regular rate on the sewer tap and service fees from the Town council. If they approve the discount, tap fees will be reduced to the regular in-town rate calculated at $148,512. Overall, however, we have received conditional approval for the connection from the Town and are now working through the details of the connection as we continue design.”
Crested Butte town manager Dara MacDonald said council felt it was important that wastewater service be connected to town. “The Town is willing and interested in providing sewer service to help protect water quality in the area by limiting the proliferation of individual waste treatment systems,” she said. “Similar motivation does not exist to provide water service. As part of the agreement to provide sewer service, a public trail easement from town to the Slate River is included.”
As for the water utility, Caffrey said the higher out-of-town service fee (twice the in-town rate) and tap fees (1.5 times the in-town rate) would be a significant financial hit to the fire district. He also said the town was requiring that town purchase some of the property on the campus. “The proposed tap fee for water for the site at the 1.5 rate was an additional $275,184,” Caffrey said.
MacDonald said the council offered the fire district a reduction in the water tap fee to the in-town rate “in recognition of the public service provided by the district.” She said that savings was estimated to be about $91,000. The land purchase would allow a trail to go all the way to the cemetery from town and not stop at the river, she explained. Council wanted to find a way to work with the fire district to make that happen and the offer to purchase some land was thought to be an incentive.
But Caffrey said the town offer was significantly less than what the CBFPD paid for the property. “In addition to the tap fee the Town also required we sell them about 2/3 or 5 acres of the 7.5-acre site for about 50% less than what we paid per acre in order to provide water to our emergency services facilities.” He said the fire district paid about $2.5 million for the 7.5 acres which comes out to be about $335,000 per acre and the town was offering to pay only $130,000 per acre.
A May 31 letter from the town to the fire district said the town would pay the CBFPD the appraised value for the property. MacDonald said the council offered to pay what the land appraised for during the CBFPD purchase. “The purchase price for the approximately 5 acres would be approximately $650,000 based upon the per-acre value established in the restricted appraisal prepared for CBFPD by East West Econometrics in August 2022,” according to a letter from the town to the fire district.
Stating that the town recognized that the fire district paid a higher per acre price for the overall property the letter continued, “it would be difficult for the Town to pay more than appraised value” and council hoped the district would take into consideration the town was offering per-acre appraised value “for the least useable portion of the land.” The council offered $650,000 for the five acres despite much of the property being wetlands. MacDonald said town offered to get a new appraisal to value the property if that made it easier for the fire district board to make a deal.
Caffrey said that framing wasn’t correct. “Looking back at the analysis before we went under contract in September of 2022 we had four appraisals, two brokers’ opinions, looked at six comparable sales, and five current listings between August of 2020 and September of 2022 with a range of values between $54,000 – $571,000 per acre,” he explained.
Caffrey continued, “There was also a fair amount of change in the market over the 2020–2022 time period. As such the board settled with the Spanns on the two purchase prices (adding up to $2.5 million). I’m not sure which appraisal the Town was referencing in their offer, however the board chose to hang on to the land over selling at a loss.”
As for getting a new appraisal, Caffrey said that would be up to the board but, “I’d suppose we are more interested in getting started on construction rather than negotiating further on what the CBFPD should be required to give up to the Town in order to provide their citizens with essential emergency services.”
When asked if the fire district anticipated selling the land in the future, Caffrey responded that, “At this point we are happy to have control over the full parcel as we begin the project. While it would be imprudent to develop some of the parcel due to wetlands concerns, we would disagree (a majority of the land is not useable) as our analysis tells us there are major portions of the 5 acres that are developable, especially for public uses. However, at this point there are no plans to sell any portion of the property.”
“The CBFPD board did not believe those concessions valued at about $700,000 for water service before the tap fee would be in our taxpayer’s interest so the board decided to reject municipal water service,” Caffrey said. “We will proceed with an onsite well, augmentation water, and accompanying water storage for fire suppression which we believe will be far more cost effective over time. We did propose potentially installing a dry pipe when we do the site work to facilitate a water connection should that be mutually agreeable in the future.”
The fire district board approved the schematic design documents for both the fire station and the search and rescue facility at the July 11 meeting. A preliminary budget for the campus came in at approximately $22 million for the 22,650-square-foot fire station and 5,950-square-foot search and rescue building. The expectation is to line up contractors by the end of this year and start construction in the spring of 2024.
“In a related development, the CBFPD recently partnered with Gunnison County to have the site evaluated for a potential geothermal heating system,” Caffrey said. “The County was already evaluating the Whetstone housing and public works sites for geothermal feasibility, so we were able to use the same contractor to do some testing on our site while they were in the area. We will know more about the viability and cost differential of geothermal heating and cooling by the end of the summer. Currently the plan is to use a combination of variable refrigerant flow (VRF) electric heat pumps for interior spaces and gas boilers for garage spaces. We would like to eliminate the gas boilers if possible.”
Caffrey said the district also received a state grant award in early June to install approximately 20 kilowatts (kW) of solar generation on the search and rescue building. He said the fire station will also be pre-wired for solar panels, “however, it is unclear how much of an array will be affordable as the project goes out to bid so we are carrying up to 75kW of solar panels as an ‘add-alternate’ as funds are identified.”
Workforce housing element
As part of the bond issue approved by voters in 2021 for the safety campus, some affordable housing was required. Caffrey explained that the district was close to a land purchase in Brush Creek. “We are also participating in the upcoming Lazy K lottery for a three-bedroom unit in Gunnison and are on the interest list for a couple of units in the upcoming Mineral Point project in Crested Butte,” he said. “The district currently owns four units and has a master lease on two more. Our strategic plan calls for the CBFPD to own 10 units within the Fire District by 2030.”
Caffrey expects to hear back from the town on the request for the discounted sewer tap and service fee sometime in August.
With a groundbreaking in the spring, Caffrey said the expectation is to move into the station and search-and-rescue building by December of 2025, but he admits the current construction environment makes that a soft expectation.