Back of Envelope

I saw this article in the Gazette (here) which outlines how the city had applied for $21.5 in stimulus money for replacing 65 miles of water mains. The article states that there are 1200 hydrants in the city.

So for ballparking a ‘fix’ to the infrastructure issue — assuming hydrants and main define the totality of the issue– is around $23M ($21.5M + 1.5M for hydrants (assuming 50% of the 1200 hydrants (600 hydrants) need replacement at $2500 per hydrant. My $2500 is just a midpoint based upon Google searches– again it’s an assumption)

The bottom line is that this is possibly a $23M fix.

As our city budget is $24.5M, it represents the same order of magnitude as our city budget. So it’s unlikely that we would expense this fix as it would not be feasible but just for fun, we could say one option would be to impose a one time tax on city taxpayers of 2 times their normal city tax. So if you pay $1000 in city taxes, you now pay $2000.

Or , and more likely and wisely, the city could bond for this project — although now is not ideal time for bonding but again this is for fun– so I took a very conservative approach and said let’s say the city can bond at a 5% rate for 20 years. The bottom line bond payment is then $1.9M per year for 20 years meaning a roughly a 6.5% tax increase so if you pay $1000 per year in taxes you would pay $1065 per year for the next 20 years. (I’m not going to adjust for inflation, et al to keep it simple). Also I think we cannot exceed a 3% tax hike per year due to legislation but I’m sure we can wiggle around that if need be through a fee or other construct.

I’ll admit to being snarky by saying this is ‘for fun’ but it’s really not. It’s not fun because our aging infrastructure has some life-and-death consequences. I think what drives my snarkiness is a visceral response to the notion that this is an immediate fix that just lacks the political will to address when in fact, this is a highly complicated problem with a significant challenge in how to finance.

Somehow the notion of financing this project gets lost and frankly, given the numbers above , I’m not sure the public will exists to fund it. So I guess I’m calling the people demanding action out to fight for the tax increase mentioned above. I expect this may create a cognitive dissonance fest on local radio but it’s a chance I’m willing to take.

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