PROJ01959 ‎(2)‎

• Contract/PO #: C150131A
• Contractor Name: Paonia, Town of
• Contract Type: Loan
• Water District: 0
• Loan Projects - Doc Type: Feasibility Study

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Feasibility Report for Improvement of Paonia's Water Supply System
Town of Paonia
April 21,2000

this average masks the fact that the Town grew very little during the 1980s, but has grown at an
average annual rate of 3 percent per year since 1990.

Given the fact that the portion ofthe Paonia water service area outside the Town boundaries does
not correspond well to traditional Census jurisdictional boundaries, it is more difficult to obtain
a complete picture of historical growth in this area. However, BBC's analysis of 1990 Census
data on the age of houses in this area compared with houses within the Town ofPaonia indicates
that growth outside the Town has been more rapid than in-Town growth during each of the past
several decades. We estimate that, on average, the population outside of the Town but in the
water service area has been increasing at about 1.5 times the growth rate of in-Town population.

Economic Factors Affecting Future Growth

For a relatively small community, Paonia's economic base is highly diverse. Historically, the
primary economic activities in the area have been coal mining and agriculture. However, during
the 1960s-1970s, and again during the 1990s, the Town has attracted many new residents
because of the quality of life available in Paonia. The Town has become a center for artists,
including photographers, bronze sculptors, and ivory carvers.

There may be a tendency to focus on the art center and quality of life aspect of what attracts
people to Paonia, while overlooking the continued importance of the community's traditional
economic base. It is BBC's opinion that traditional economic activity, particularly mining,
continues to support a substantial portion of Paonia's population and economy. Figure 4.4
compares Paonia' s population with the number of miners employed in Delta County and
Gunnison County coal mines from 1970 through 1997. Figure 4.4 illustrates a fairly strong
correlation between Paonia's population and the regional mining activity.

Based on BBC's previous experience, the relationship between coal mining and the Town's
population may be one of the most uncertain aspects of Paonia's future. Short-term prospects
for high BTU, low-sulfur Western coal continue to be very positive, as many utilities continue
to convert from traditional Eastern U.S. suppliers. Longer-term prospects are much more
uncertain in the face of electric utility deregulation, efforts by some utilities to convert to lower
BTU and lower-cost Wyoming coal sources, and concerns about global carbon emissions. As
a result of this and other uncertainties regarding future growth, future water demands were
projected under three alternative scenarios.

m GEl Consultants, Inc.

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