Maintenance costs piling up for South Lake Tahoe
February 17, 2014
Roads are deteriorating. Pipes, buildings and city fleets are aging.
At a workshop Monday, the South Lake Tahoe City Council had no easy answers for how to pay for millions of dollars in maintenance needs stuck on hold for years. But it's starting to see the problem's size and to lay out a plan to try to address it.
"It's time to face the music," City Manager Nancy Kerry said about an asset management plan the public works department is preparing and presented to the City Council.
It's the first such plan the city has had, Kerry said.
"We have to realize what we are facing and the more we can be strategic and stay the course, the better off we'll be," she said.
For years, maintenance of city assets has languished. Those costs are large and coming due with no money set aside or coming in to pay for them, said Jim Marino, the city's capital improvement projects manager.
Forty-seven percent of city roads — about 120 miles — have less than five years of service life remaining. Most of those have less than two years.
That doesn't mean roads will crumble or disappear overnight, Marino said. But they will require more expensive rebuilds if or when the city finally gets around to fixing them.
South Lake Tahoe's road network has a Pavement Condition Index of 42, the same rating as the four worst Bay Area cities, Marino said.
City officials estimate $7 million per year is needed over the next five years to stop the decline in road conditions and reduce a $26 million maintenance backlog. About $2 million per year is needed to maintain the status quo.
With no additional spending, by 2018 the city's PCI rating will drop to 33, which is considered a failed road, and deferred maintenance costs will reach $41 million.
The asset management plan identifies other significant needs.
A 260-vehicle fleet promises to keep South Lake Tahoe hunting for cash. The average vehicle is 15 years old, almost double industry standards, and 72 percent of city vehicles are in use beyond replacement schedules, Marino said.
Twenty-five vehicles are targeted for immediate replacement at a cost of $2.4 million. That includes pickup trucks, street sweepers, graders, loaders and fire trucks.
"Then we still have a large percentage of fleet over or just approaching their replacement values. So once we get these done there will be a whole other stream of vehicles to do," Marino said.
Public works staffers are still inventorying 43 city buildings that total about 400,000 square feet.
The buildings are facing an estimated $6 million maintenance backlog. Immediate needs are estimated at $250,000 with $800,000 needed over the next three years.
Needed repairs include handicap accessibility and code compliance problems, the flooring at the ice arena and a leaking roof at the recreation center.
Thirty-nine percent of the city's underground stormwater system is beyond its life expectancy. With 1,800 inlets and 31.5 miles of pipe, the system is estimated to face $17 million in deferred maintenance costs.
The city would have to double the $300,000 for stormwater work in this year's budget to maintain the system and its permit compliance going forward, Marino said.
While such maintenance work has been left on hold, over the last 12 years the city has added about $72 million in new infrastructure and facilities. State and federal grants covered much of their cost.
"We have to bring those budgets online so we don't lose ground like we have with the infrastructure built 30 to 40 years ago," Marino told the council.
South Lake Tahoe has ended its last two budget years with surplus revenues of about $650,000 and $1 million. But the City Council still must decide whether to bring that limited money to bear on deferred maintenance needs or on new city projects.
Council members wrestled with that question Monday with no clear outcome.
Working with hired financial consultant Mike Levinson, the city approved a community investment policy. It states, "We will focus on the built environment based on critical need and prioritize investment in geographical locations that strive to achieve the greatest return on investment."
Council members directed the city's budget subcommittee to come back with a recommended line-item for future budgets to start addressing some community investment and maintenance needs.
They also will explore spending some of the city's $9 million in general fund reserves. But that would be a one-time expenditure on recurring maintenance costs.
"We need a long-term solution to dedicate revenues to these needs," Kerry said after Monday's meeting.
While it lays out a huge financial challenge for the city, councilwoman Angela Swanson praised the public works department for preparing an asset management plan.
"It's so long overdue," Swanson said. "It's excellent information. Horrifying price tags."
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