The Morning Report
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Last week, the city of San Diego released a big, ol’ report detailing the state of its (insert bad adjective here) infrastructure.
I’ll be unpacking this a lot going forward, especially now that city officials finally seem to be getting around to thinking about a way to pay for fixes. Let’s start with three charts that explain the issue in three very different ways.
A Storm Water Storm’s a-Brewin’
The storm water tsunami is coming.
This chart compares what the city says it needs to spend to improve its storm water system over the next five years versus what it actually plans to spend.
That giant gulf between the two charts is almost $700 million – more than the San Diego Padres are worth. These numbers come from the costs to improve the city’s system to meet strict new regional water-quality standards passed almost two years ago. If the city doesn’t meet these standards, it could ultimately face daily fines and other penalties.
The city’s first approach to this problem was denial — “The thinking was, it’s in the future and it’s such a ridiculous cost, it can’t be correct,” a budget analyst told me a while back. Then it was to freak out – the city has been telling investors storm water costs might wreak havoc on the city’s balance sheet. What the city hasn’t done is figured out a way to fix things.
The idea was to try to negotiate with water quality board officials to change some of the standards before major ones take effect in 2018. Whatever the status of those talks, the costs remain astronomical. The city could also try to increase its “extremely low” – in the words of the independent budget analyst – storm water fee. But doing so would require a public vote.
We’re Going to Fix the Water and Sewer Pipes But You’re Going to Pay for It
If you want to feel better, and worse, about the city’s infrastructure challenges, look at this chart that tracks the next five years of water and sewer infrastructure planning.
You’ll notice that the roughly $1.5 billion the city expects to spend improving its water and sewer system is fully funded. That’s the good news. The bad news: You’re the one fully funding it.
Water and sewer officials are soon going to be proposing rate increases to pay for these fixes, city public works officials told me. They also told me they expect these rate increases will be approved because they’ve always been in the past. Rate increases don’t require a public vote and they’ve gone through with barely any protest in recent years. Water rates have already gone up 7.5 percent in each of the last two years. Also looming is the recently approved $2.5 billion plan to recycle San Diego’s sewage into drinking water. No one has figured out how to pay for that, either.
OK, What About Streets?
The report’s section on street repairs reveals both the promise of the city’s evolving approach to infrastructure and its ongoing shortcomings. I’m not going to depress you with a chart showing the gap between street repair needs and funding over the next five years. (It’s almost $300 million.) Instead, here’s a picture of what the street conditions have been like recently and what they could be a decade from now.
The city grades its streets on a scale of 0 to 100. Streets scored 70 or higher are considered in good condition, meaning they’re typically pothole-free.
The city’s streets department has set a goal of improving the city’s road network to an average of 70 by 2025. The street funding needs outlined in the report represents the money public works officials estimate they’ll need each year to meet that goal.
What’s great about this approach? The city has actually set a goal to improve street conditions and said how much it’ll cost to do it.
What’s not so great? There’s still a lot of missing information. The costs listed in the report are just the expenses for capital street repairs, not on-going road maintenance. Think of it as the difference between replacing your car’s engine and changing its oil. We have now have the engine replacement costs, but not the price tag for oil changes. This number will be less, but it will still add tens of millions of dollars to the city’s repair bill each year. Public works officials said they planned to publish this figure in the coming months.
If you put all of this together, you can see why Mayor Kevin Faulconer’s repair proposals so far aren’t much more than lip service. He makes a big deal out of saying he’ll dedicate half of all new tax revenues to infrastructure, but that’s a drop in the bucket compared with what’s needed to make things better. Similarly, his plan announced in this month’s State of the City to repave 1,000 miles of streets won’t move the needle in the big picture.
Ever since Faulconer took office a year ago, even his supporters have said his infrastructure funding ideas were inadequate. There are signs that he seems to finally be getting the message. City Councilman Mark Kersey, his Republican ally, announced plans to put a financing package before voters next year.