Wednesday, October 23, 2013
AF Road Bond: Genesis
The financial story behind our crumbling streets goes back farther than the road bond's opposition is looking, to a time when we yielded to one of the most universal temptations in government.
This is the second in a series of eleven short posts on the proposed $20 million road bond in American Fork. The first is here.
Ask someone at the City how we got into this mess, where 80 percent of our streets are beyond repair, and we're trying to borrow $20 million to jump-start their recovery. He or she will list several reasons. Increased traffic volume increases wear on a road. Some vehicles now being driven on our streets, including certain buses, are beyond the streets' design specifications. Materials costs have increased. There hasn't been much slack -- to put it mildly -- in the budget in recent years, due to a recession and its aftermath. And virtually every street in the city was cut to install pressurized irrigation piping. (Most weren't in great shape to begin with, but it didn't help.)
They'll list another crucial reason but politely refrain from a full explanation, out of respect for past leaders: years of inadequate funding.
A great temptation in any government is to move revenue away from maintaining infrastructure, such as roads, bridges, water lines, dikes around New Orleans, etc., into other budget categories. This makes it easier to avoid or minimize unpopular tax increases or to preserve or expand popular programs, while still balancing the budget. It's irresponsible but nearly irresistible.
One reason culinary water bills went up so much as we were implementing pressurized irrigation is that the rates themselves had been allowed to slip far below the level where they paid for delivering the water and maintaining the system. That's roughly akin to a store owner pricing his goods to recoup the wholesale cost of the goods but not the cost of keeping the store itself open and running. Now rates are structured for both culinary and irrigation systems to include the cost of maintaining the infrastructure. It's much sounder management, and it will mean -- if persisted in -- that our two water systems are adequately funded in the long term. This is one of the smartest things that happened during the late Heber Thompson's mayoral administration.
In the 1990s the road maintenance budget was cut very dramatically -- a 90% cut, give or take. It's not hard to imagine officials wrangling over the budget, desperately not wanting to raise taxes or gut programs, and deciding that it wouldn't hurt much -- or soon -- if they reallocated most of the road budget for a year or two.
Unfortunately, this cut provided the new benchmark for the annual road maintenance budget. This massive shortfall continued more or less under the radar for more than a decade, until a later city council discovered the problem. They did what they could to start fixing the problem in a prolonged economic downturn, but by that point we were many millions of dollars behind. The deficit was even greater than the sum of the redirected budget funds because, beyond a certain thresold of disrepair, neglected streets cost many times more to repair than they would have just a few years earlier.
So there really is some irresponsible borrowing in our road picture, but it happened years ago. Nobody called it debt at the time, but it was, essentially, the City borrowing from the future -- from our infrastructure -- instead of making hard choices, which might have included tax increases.
Next in this series: Pressurized Irrigation -- A Cautionary Tale?
Copyright 2013 by David Rodeback.