Blue Ridge Advances, Legislature Threatens

Meetings with SRP intended to start money flowing, so long as state does not drain town’s bank account

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Payson officials recently completed another round of key meetings to crank open the financial spigots on the Blue Ridge pipeline, with a few fearful looks over their shoulders at the budget berserkers at the legislature.

“We’ve concluded the work to make sure we’ll have the funding to make Blue Ridge work — and some of that is fairly sophisticated discussions about the complicated and convoluted NEPA (National Environmental Protection Act) process we’ll have to go through,” said Payson Mayor Kenny Evans, who has spent months kayaking a flood of meetings.

Town officials concluded fresh meetings with officials from Salt River Project, hoping to make sure the town can quickly begin spending nearly $11 million in federal stimulus money on pipeline repairs.

In addition, the town has been trying to get started on the environmental impact studies required by both the Forest Service and the U.S. Bureau of Reclamation. The town must pontoon through a swamp of bureaucratic requirements to satisfy both the Forest Service, that owns the land across which the pipeline runs, and the Bureau of Reclamation, which will play a key role in the actual construction and operation of the pipeline.

Payson officials at one point convinced First District Congresswoman Ann Kirkpatrick to sponsor a bill designating the Bureau of Reclamation as the lead agency in supervising the construction of the $30 million to $40 million pipeline, which will deliver 3,500 acre-feet annually starting in about 2015.

And if that’s not enough, the U.S. Fish and Wildlife Service will have a say on the pipeline route and measures taken to protect the vulnerable riparian area alongside which it runs.

But the state legislature could prove prove the most vexing problem, if Republican leaders crafting their budget follow through on a threat to suck money out of the bank accounts of towns statewide that have accumulated money from impact fees for infrastructure projects.

Legislative leaders emerged recently for a long succession of closed-door meetings on their efforts to cope with a huge budget deficit projected for fiscal 2009-10. One option included sweeping funds cities had accumulated from impact fees, to balance the state budget.

Payson has already spent nearly $5 million and accumulated another $4.5 million from a $7,500-per-unit water impact fee, imposed on new construction several years ago.

A legislative sweep of the $4.5 million saved up could inflict a heavy blow on the project, especially since Payson must front the money for all the design work and environmental studies.

However, Evans predicted that a developing firestorm of protests from cities and legal questions will prompt the legislature to drop the idea of sweeping the local impact fees.

“They’re not going to do it,” he said flatly. “And if they were stupid enough to try to do that, they’d find themselves in endless litigation that would end up just like the funds sweep last year.”

The legislature for the current budget year voted to take back money promised to municipalities. That would have cost Payson about $90,000 and Star Valley about $15,000. The Arizona League of Cities and Towns sued and a judge overturned the legislative action.

Evans said a raid on local impact fees would face even steeper legal hurdles, since the state legislature had earlier passed a law that forbid cities from spending the impact fees they collected on anything except the stated purpose.

Builders in Payson must pay about $15,000 in impact fees, half of it to underwrite the construction of the Blue Ridge pipeline. Other fees go to parks facilities, police and the sanitation district. Payson has exhausted all of its accumulated impact fees except for the $4.5 million in the water fund. The sanitation district, however, also has substantial reserves built up as a result of its impact fees.

The money for Blue Ridge had been accumulating steadily, until the construction market in the Rim Country collapsed two years ago. Previously, Payson had been issuing an average of 250 permits annually, but last year the number fell to about 60. So far this year, only a handful of builders have filed permits.

However, assorted federal programs promise to bail out the program — and perhaps pay the bulk of the construction costs.

The 3,500 acre-feet delivered through the pipeline would more than double Payson’s water supply, while also providing water to other communities along the route of the pipeline. The pipe may actually end up carrying more water if the Tonto Apache Tribe can strike a deal with Salt River Project to swap its existing allotment of Colorado River water.

If the town can complete the pipeline, it will have enough water to supply a population of 38,000, without pumping more from the water table than rainfall replaces each year.

The evaporation of impact fees in the past two years had raised questions about the town’s ability to finance the pipeline from that source alone.

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