The Palmer Lake Sanitation District has stopped issuing new commercial and residential sewer taps due to concerns about the main outflow line’s capacity and age. The tap moratorium is limiting development within the district to lots already approved for a connection.
The sewage outflow line was built in the early 1970s, according to Becky Orcutt, district manager.
“Sometimes you have to step back and see where you are, because you can’t just let people keep tapping in there and wait and see what happens,” she said. “We are trying to be proactive and make sure that our lines have the capacity for further growth.”
There are about 50 undeveloped lots in Palmer Lake that may be affected by the sewer tap moratorium, according to Cathy Green, town administrator.
Other available lots in town — including about 200 in an undeveloped subdivision — can’t be developed because of railroad access issues or they are out of the centralized utility area, she said.
“And with those 50, some of them may have sewer taps that the landowner has been paying on for years, but I doubt that’s the case with a lot of them,” Green said. The sanitation district’s boundaries are different from the town’s, Orcutt said. She referred interested parties to the district’s website at plsd.org for a map.
Orcutt was unable to provide the date the district’s board decided to conduct the study and stop issuing new taps.
“I don’t have that exact date in front of me, but it was in the latter part of last year,” she said.
A study of the line is underway and is expected to be completed by the end of April, Orcutt said, adding the length of the tap moratorium will depend on the findings. Current sewage customers are not expected to be affected.
“We just want to see where we are before allowing any more taps,” she said.
The district has received multiple inquiries for service since it stopped issuing new taps, Orcutt said, though she couldn’t provide an estimate.
Green said she also has fielded questions from landowners needing a sewer tap.
“I’ve had, I want to say, about three calls from people who own lots and wanted to build houses this year,” she said. “It’s frustrating for them, but they’ve all kind of been put on an indefinite hold for now.”
A property on Highway 105 in Palmer Lake also recently had a potential buyer who had plans to build a mixed-use development, Green said.
“But with the sewer tap put on hold, that can’t really happen right now either,” she said. “It’s a frustration for [the potential buyer] as well as for the person that was going to be selling the property.”
Typically, a town might be concerned because of a potential halt in development and loss of generated tax revenue; however, Palmer Lake is different because of its size, Green said.
“We’re very small, and we weren’t expecting any large housing developments or large shopping centers coming through,” she said. “It’s not exactly like we’re Monument.
“I hate to use the old adage but, ‘It is what it is,’ and we’re just going to have to get through it.”
Green said what’s important is the sanitation district is taking action to prevent the line from reaching capacity.
“And hopefully, we won’t see any public health issues come out of it,” she said.
Taking a risk
Trish Flake, a broker and Realtor for Main Street Brokers in Palmer Lake, believes available lots with sewer connections will begin to outvalue those without them, due to the town’s limited number of homes for sale and developable land.
“The lots without connections are going to have to sit and wait for who knows how long,” she said, adding landowners in that situation do have the option of submitting a septic plan to the district.
“A septic system is a lot more expensive though,” Flake said. “But the town code does state that if the sewer system is not available, a landowner can install a septic system.”
Benjamin Davidson, founder and owner of the real estate appraising and consulting company Blake and Associates LLC in Conifer, said buyers are “taking a risk” on properties with utility issues.
“And when there’s risk involved, you expect a reduction in price to take that on,” he said. “That’s in anything — that’s in real estate; that’s in the stock market.”
Davidson said an appraiser will consider what can physically be done at a site while analyzing its value.
“If utilities are not allowed to that site, that’s going to really hinder the development side of what you could do with that property,” he said. “[Utilities] does play into value, really, everything plays into value. And if there’s something not right about a site, a buyer is going to want to a price reduction for taking a risk.”
Davidson couldn’t speak specifically to the impact the sewage tap moratorium could have on the Palmer Lake real estate market without conducting research, he said.
“But from a general standpoint, you could say a lack of utilities can affect a site’s value tremendously,” he said. “For instance, let’s say that you have a house with running water and a functional sewer, but then suddenly your water and sewer is taken away. What do you think that does to your house value if you can’t get it back?”
Nonetheless, Flake doesn’t expect affected lots to decrease too much in value, she said, citing previous issues with development in Palmer Lake.
“The town always has something going on, like in the past, we’ve had a water tap moratorium,” she said. “It’s not a builder-friendly town, and it seems the town administration is not excited about adding more homes or other types of development.”