“What you do not maintain today, might haunt you later.” City Staff
Jan. 21, 2014 (San Diego) The Infrastructure Committee, chaired by Council Member Mark Kersey, made history. We had the first comprehensive report on infrastructure needs and how much it will cost to maintain, repair or replace them over the course of the next five years.
This report, which is quite comprehensive, has found a serious problem. From the report: “Based on currently identified needs, the total projected needs for Fiscal Years 2016 through 2020 are $3.87 billion and of these capital needs, approximately $2.16 billion is projected to be funded. The projected funding gap presented in this report for Fiscal Years 2016 through 2020 is approximately $1.71 billion. Table 5 below provides a summary of total projected needs over the next five fiscal years, projected funding sources for each asset type, and the estimated funding gap per fiscal year.”
This $1.71 Billion gap is quite serious and if other sources of funding are not found, the city might have to play catch-up with infrastructure needs for not just years to come, perhaps decades.
Of this the members of the council are very aware off. While, according to staff, “revenue is on the rise,” so are the costs. This is what catching up to this is not easy. One of the proposals was not just to look at this plan from the big picture level, but to meet more often with staff, to examine how to close the gap. Also to examine in detail some of the 20 areas identified as critical for development.
One of the priorities identified was the perennial problem with San Diego’s streets. According to staff it is much cheaper to maintain streets, than to replace them. The order of magnitude is resurfacing costs $100,000 per mile, while replacement can run all the way to $700,000 per mile. Currently one fourth of San Diego streets can be considered marginal and in need of replacement. The goal is to reach a point when most of the roads are in good condition.
The committee then heard from the Office of the Independent Analyst (IBA). Given he gap in money that we need to maintain what we have, not what we want, the IBA had a few proposals to generate higher revenue streams, what the rest of us call taxes. Just in the general fund, the IBA report states that the city needs $898 million dollars, just to cover streets, storm drains and city facilities.
They need another $110 million for both Qualcomm Stadium ($80 million) and Phase II of the Convention Center ($30 million.) Of note, nobody was talking of a future stadium, estimated to be at least $1 billion. Or the sea wall that will be needed if even mid range estimates for sea level raise comes to pass. The latter there is no estimate.
The infrastructure committee was only talking of what we have, not what the city might want. Though they did raise up the issue that when phase III of the convention center is finally ready to go, the city will need $520 million dollars.
As one in the city staff noted, we have a lot of stuff, and this stuff needs to be taken care off, since deferred maintenance actually makes it more expensive to take care off.
The Staff Report also notes this on our current needs for Fiscal Year 2015:
- $1.06 billion in funding for stormwater projects is estimated to be needed to comply with new permit requirements over the next five years.
- There is an ongoing and serious need for affordable housing – the General Plan Housing Element calls for 9,600 new units to be constructed from 2013 through 2020, and requires an average Housing Commission contribution of $62,500 per unit. The Smart Growth and Land Use Committee’s consideration of this issue in July was the impetus for this report.
Council Member Myrtle Cole wants to keep the affordable housing as part of the discussion. She made this abundantly clear during the hearing.
SO these are the various means of taxes that were mentioned during the hearing. None is set in stone. This is just a discussion begging, but the time line is for any or all of these to be on the ballot by 2016.
- Increased Sales Taxes : They are talking 0.25 percent, with $64 m annually, requires a two thirds to pass. Ours is the lowest in the county according to the IBA.
- Increased Transient Occupancy Taxes . They are talking a 1 percent increase, netting $16.6 million annually. Ours is the lowest in the nation when compared to similar cities.
- Utility Users Taxes We do not have it, it would net up to 99.9 million, and it requires two thirds to pass.
- Parking Occupancy Taxes 10 percent tax, netting $38.6 million annually, it requires two thirds. Currently the city does not have it, but cities like Los Angeles and San Francisco do.
- Repeal of the People’s Ordinance: It would net 47.3 million, and it requires a simple majority to pass. This has been talked off in the past, and essentially means charging a small fee for refuse collection.
From the report: Should the People’s Ordinance be repealed and single-family residences be required to pay the costs associated with providing them refuse, recyclable, and green waste collection services, the City could free up existing General Fund revenues that currently subsidize the Environmental Services Department’s refuse collection services.
- Increased Stormwater Fees: Currently residents pay $0.95 per household, They are talking increasing it by $1 dollar. It would net $6 million per year, it requires a two thirds majority.
- General Obligation Bonds: The city is talking $100 m raised for a 0.0032 percent increase in the tax assessment. On an average household that would come to less than $73 dollars a year. It also needs two thirds vote.
- Infrastructure Financing Districts: This is a new mechanism, and involves raising funds from special taxing districts, formed for a particular goal. Los Angeles is thinking of this for the Los Angeles River District. They are so new that there is no data to really speak off.
Suffice it to say the conversation has started. Also, the infrastructure document is a living document and it will change as the situation changes. The Committee expects to hear more from both the IBA and City Engineers as the year moves forwards. Kersey’s goal is to have a plan to present to voters, ready by the end of the year.
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