Municipal Ledgers Remain in Critical Condition

If Petaluma is an example, and I expect it is, municipal budgets have improved.  However, significant travails are still to come, perhaps as severe as those recently experienced.  It should be a signal that urbanism is increasingly needed, but too few decision-makers are grasping the message.

In a common municipal practice, the Petaluma City Council often meets in work sessions.  The sessions are publicly scheduled like regular meetings, but focus on a single topic, with sufficient time for the Council to be updated in depth.

Few citizens attend the work sessions.  At the most recent work session, the total attendance was the City Council, members of City staff, a reporter, and me.  Yes, I was the only member of the general public in the council chambers.  It was lonely in the back rows.

It’s a shame that more folks don’t partake of the educational opportunities.  Work sessions are far more informative than regular meetings.

In recent months, Petaluma has held work sessions on the budget for the new fiscal year, revised stormwater management rules, and a street maintenance prognosis.  The message from all three was that municipal finances for Petaluma, and presumably for most cities, remain precarious.   

From the session on the city budget, it’s true that the deepest trough of the recession is behind us.  The city has the revenues to begin replenishing reserve funds that had been reduced to seriously deficient levels.

But the respite is short-lived.  As bills that were deferred during the recession begin to come due, such as employee benefit and retirement costs, municipal financial projections again plummet.  Within a couple of years, new deficits are predicted.  It appears that deficits that can only be avoided if new taxes are approved, probably at the November 2014 general election.  The need for new taxes was a recurring theme of the work sessions.

The stormwater management work session addressed the updated and expanded federal standards for discharges to natural waterways such at the Petaluma River.  Expanded standards were likely needed.  We’ve made great strides in waterway health in our lifetimes, but more can still be done.

However, some of the new regulations will be surprises to the general public.  An example is a permitting system for charity carwashes.  It seems legitimate that carwashes, with their mountain of suds flowing down gutters toward stormwater systems, are a threat to a waterway, but few of us had probably considered that fact.

The problem for the city is that costs of managing stormwater regulations, including carwash permitting, are growing beyond what can be covered by property tax revenues.  City staff suggested and the City Council will consider a stormwater management fee, much like the water and wastewater fees that residents already pay.  This new fee would require voter approval, so is another possibility for the November 2014 ballot.

The street maintenance work session included the pothole issue that has long bedeviled Petaluma, starting well before the recent economic travails.  The short version is that the streets won’t be getting better.  (Petaluma Patch covered the work session here.)

Pavement Condition Index (PCI) is the standard method for monitoring pavement conditions.    PCIs range from 0 to 100, with results under 50 indicating pavements that are poor or have failed.  An average PCI of 85 is the goal for adequately-funded cities.

The average PCI for Petaluma streets is 45, at the upper end of the poor range.  The tax increase under consideration by the City Council would be a half-cent sales tax, of which one-quarter would be dedicated to street maintenance.  If the sales tax is approved at the ballot box, City staff estimated that the average street condition in Petaluma would be in the high 30s in five years.

That’s right, even with the maximum funding that the City Council suspects the public might approve, the condition of the Petaluma streets would continue to decline.  No one would estimate how steep the decline might be if the new sales tax were rejected.

City staff can’t be blamed for the street conditions.  Staff has been aggressively researching and implementing new techniques for pavement management, increasing the maintenance that can be done with the available dollars.  I won’t call the content or presentation scintillating, but anyone interested in pavement maintenance would do well to watch the video of the work session.

Against this darkening fiscal picture, it’s reasonable to ask if our cities should be doing something differently.  There are likely a number of areas in which alternative paradigms would help.  Urbanism is firmly on the list.  As a Smart Growth America study established, urbanism is a less expensive land use to service and to maintain.

However, many decision-makers seem not to recognize the value of urbanism.  Instead they argue for more drivable suburban development to somehow balance the books, conveniently forgetting that it was the drivable suburban decisions of their forbearers that put us into this mess.  The direction ignores the first rule of holes; when you find yourself in a hole, quit digging.

It’s like that old joke about a business losing money on every transaction, but making up for it by doing lots of volume.  Except that no one is laughing.

Urbanism can’t fully fix what’s wrong with municipal budgets over the next decade or two.  The effect it might make, however beneficial, would be longer-term.  In the shorter term, it seems inevitable that new taxes will be required.  As a financially-aware member of the community, I’ll likely vote for those taxes.  But I’d feel better about my vote if I knew Petaluma and other cities were making decisions, such as a swing toward urbanism, so as not to continue having fiscal crises into the indefinite future.

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. - Dave Alden (davealden53@comcast.net)