San Diego Financially, the City of San Diego is going down a rat hole. Make that a pothole. That's because years of infrastructure neglect -- both the shirking of maintenance duties and the shelving of critical construction projects -- have created a monster that could be larger than the pension mess. It certainly causes more citizen distress.
There are two kinds of neglect. Deferred maintenance is the backlog of necessary repairs -- replacement of roofs and cooling systems, filling of potholes, repairing of police and fire vehicles, painting, reflooring, and the like. A second deficiency is postponement of capital improvement programs -- big sewer and water projects, new buildings and parks that are usually financed through bonds or tax and fee increases. Since the City is currently shut out of the bond market, most such projects are on hold, as the city decays alarmingly.
The City's pension and health-care deficit is now $3.1 billion. That figure is likely to rise. But deferred maintenance is probably $2 billion and delayed capital improvement programs another $2 billion, according to David A. Bainbridge, associate professor of sustainable management in Alliant International University's business school. Councilmember Donna Frye believes Bainbridge's figures could be close to correct, as do others. But the entire proposed 2007 city budget is for $3 billion, and only $1.3 billion of that is for general fund operations.
"Deferred maintenance leads to more and more expensive repairs the longer it is put off -- pay me now or pay me later," says Bainbridge. The City must replace miles of storm-water pipe. "Roads and parking lot maintenance are even worse." According to the Public Safety and Neighborhood Services Committee, 60 percent of the city's 2735 miles of streets are in need of repair. A recent story in USA Today concluded that San Diego has the sixth-worst roads of U.S. cities, adding $618 a year to every vehicle's cost.
Ancient cast-iron water pipes are in desperate need of replacement, says Bainbridge. "The sewer treatment facility is still using primitive technology. Recreation facilities are often barely kept functional. Maintenance of city trees and landscaping is woefully underfunded. Many city buildings are patched together instead of properly repaired," he says.
The San Diego Association of Governments notes that regional planners want to channel growth into the metro areas such as the city of San Diego, but an inordinate amount of infrastructural spending is being done in the unincorporated areas.
Despite the desperate infrastructure needs in the city, the mayor's budget to tackle deferred maintenance is a mere $20 million for 2007, and that figure is dependent on issuance of pension obligation bonds, which are a long shot. Thus, the actual expenditure will be more like $8 million -- about enough to fix the hole in Harry Belafonte's bucket. The City is now compiling an inventory of the deferred maintenance backlog.
The root cause of the dilapidation is politics. As the council spent money willy-nilly on glitzy corporate welfare projects such as the ballpark, the budget was perpetually out of balance for a decade. So San Diego plundered its pension fund, diverted money from sewer and water operations, and delayed maintenance and construction projects. "Politicians love ribbon-cutting ceremonies -- opening new fire stations, libraries, ballparks -- but they don't like to provide money for maintenance," says Carl DeMaio, president of the Performance Institute think tank. He, too, believes that the City's deferred maintenance and delayed capital improvement programs "are in the multi-billions of dollars."
Alan Gin, associate professor of economics at the University of San Diego, teaches a course in urban economics. "One of the things that helps economic growth is infrastructure; it's good for business," says Gin. With adequate infrastructure, "it's easier to produce goods and services, easier to transport things." That's one reason he believes that streets and roads are San Diego's "most pressing needs" now.
But Steve Erie, professor of political science at the University of California, San Diego, says, "You have to fix the water and sewer systems first. When those go, everything goes. Next are roads." Such things as parks and libraries will have to wait, he says.
"The most critical needs are downtown," says Jim Mills, former president pro tem of the California Senate. Sewer and water mains are far too old. "Unacceptable levels of pollution are being delivered to the bays and ocean. Yet part of the City's plan for expenditures is for that goddamned new library."
Mills notes, "Along with Philadelphia, we are the most expensive city in the U.S. for transit. It costs $2.25 for a bus ride here. A lot of poor people can't afford it, and those are the people you want to take transit, so they can apply for jobs and go to and from jobs. Los Angeles has a full one-cent sales tax to support transit, and we have one-third of one-half a cent." He is concerned that the track is breaking up on the trolley to the border because heavy freight is going over it. Yet the San Diego Association of Governments still advocates more highway construction. "The planning is terrible, the priorities all wrong. Jerry Sanders was elected by developers who didn't want an environmentalist to interfere with urban sprawl."
Says Frye, the environmentalist who lost to Sanders, "The first thing we should look at is what we are required to do by law." The City must comply with the State's drinking water laws and the Americans with Disabilities Act, for example. There has to be adequate sewage monitoring to remain in compliance with the law. The potential liabilities are huge.
In assessing the needs, the City must try being honest for once. Bainbridge says that not long ago the City was estimating that galvanized storm-water pipe in one project would cost 85 percent less than it had cost in two other projects at roughly the same time.
"We buy inferior materials. This is a town that does everything on the cheap," says Erie. "The City always overstates the benefits and understates the costs."
And that brings us to how San Diego will pay for upgraded infrastructure. More taxes and fees? Spending cuts in other areas of the budget? "I don't see how it's possible to deal with the pension and medical deficit and infrastructure backlog at the current revenue levels," says Gin. "There has to be a tax increase combined with cutbacks in expenditures."
Bainbridge says it will take a tax or fees increase. Says Mills: "There are two options: one is to raise taxes and the other is to go bankrupt, and if we go bankrupt we will still have to raise taxes." Frye says that a tax increase is one option on the table.
Says Erie, "It's flabbergasting that people in this town think that we can get out of this without raising taxes. In Los Angeles when San Diego is mentioned, there is always a chuckle in the room. Tax is a four-letter word in San Diego. We don't know how to do infrastructure and never have."
DeMaio demurs. "The cost of government is far in excess of what it should be," he says. "Until you can reform it, why put more money in? If you say you are going to raise taxes, you are saying we don't need to reform the system. It would be throwing good money after bad.