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September 3, 2014

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Las Vegas City Council:

Maintaining a city is a costly, never-ending endeavor

Image

Steve Marcus

Construction continues on the new City Hall in downtown Las Vegas Wednesday, Feb. 1, 2012.

Keeping the roads, sewers, storm drains and parks in Las Vegas in working order costs the city tens of millions of dollars each year.

But shrinking revenues have led to a $16 million shortfall in the maintenance budget that threatens to grow worse with time, meaning needed repairs aren’t made as soon as they should be, according to a report presented Wednesday to the Las Vegas City Council.

The city owns $7.4 billion worth of assets, which require about $91.8 million worth of maintenance annually. The biggest cost is the city’s roadways, which require about $28.5 million worth of repairs each year. But there’s only enough funding in the city budget for $16 million worth of road repairs.

Some of the maintenance is funded by outside sources — road repair, for instance, is partially funded by the gas tax and the Regional Transportation Committee while storm drains are paid for with a quarter-cent sales tax collected by the Clark County Regional Flood Control District.

Jorge Cervantes, the city’s director of public works, said the city benefited from having relatively new infrastructure, much of which was built in the past 30 years.

By investing in maintenance early, the lifespan of the roads, sewers and storm drains is extended significantly, Cervantes said, often lasting twice as long as it would without upkeep.

But as the city continues to age, maintenance costs will grow, especially if the city defers needed repairs due to a lack of funding, he said.

Before the recession, the city addressed the shortfall in the maintenance budget by reallocating money from general fund surpluses. But as the city budget shrank, available funding for maintenance dwindled.

Now, Cervantes said, his department attempts to cover the $16 million total annual shortfall through federal grants, deferring lower-priority repairs and using some general fund dollars.

Councilman Bob Coffin, who pushed for the inventory of the city’s assets and maintenance costs, said the annual deficit was a warning sign that would continue to get bigger if the city underfunded maintenance.

“There’s going to come a time when there isn’t enough money to do all that. We’re already robbing our general fund to pay for these things,” Coffin said. “That’s money that’s not going into salaries or other assets.”

Although no immediate solutions for addressing the maintenance shortfall were presented Wednesday, Coffin said having a complete listing would help frame the discussion and give the council more information when allocating funds.

“What it shows us is you have to have long-term thinking. You can’t just say fix this or build this without an understanding that you have to keep fixing it. It never stops,” he said.

Here’s a look at the city’s assets and what it costs to maintain them:

    • Arterial Roadways

      Arterial roadways are the major thoroughfares in the city and are typically four lanes or larger.

      Size: 297 miles

      Value: $1.32 billion

      Lifespan: 40 years

      Annual preventative maintenance or replacement cost: $18 million

      Annual funding: $9 million

      Annual deficit: $9 million

    • Local roadways

      Local roadways are smaller streets typically found in neighborhoods.

      Size: 1,010 miles

      Value: $1.23 billion

      Lifespan: 50 years

      Annual preventative maintenance or replacement cost: $10.5 million

      Annual funding: $7 million

      Annual deficit: $3.5 million

    • Detention basins

      Detention basins are used to control flooding in Las Vegas.

      Size: 530 acres

      Value: $50 million

      Lifespan: 100 years

      Annual preventative maintenance or replacement cost: $500,000

      Annual funding: $500,000

      Annual deficit: None

    • Storm drain network

      Size: 432 miles

      Value: $1.36 billion

      Lifespan: 50 to 100 years

      Annual preventative maintenance or replacement cost: $4.1 million

      Annual funding: $2.1 million

      Annual deficit: $2 million

    • Sanitary sewer system

      Size: 1,718 miles

      Value: $1.37 billion

      Lifespan: 50 years

      Annual preventative maintenance or replacement cost: $17 million

      Annual funding: $17 million

      Annual deficit: None

    • City parks

      Size: 76 parks covering 1,700 acres

      Value: $380 million

      Lifespan: 50 years

      Annual preventative maintenance or replacement cost: $1.9 million

      Annual funding: None

      Annual deficit: $1.9 million

    • City buildings

      Size: 149 buildings

      Value: $690 million

      Lifespan: 50 years

      Annual preventative maintenance or replacement cost: $750,000

      Annual funding: $500,000

      Annual deficit: $250,000

    • Vehicle fleet and fuel assets

      Costs for use of the city fleet are paid out of the budgets of departments that use the vehicles. Fire vehicles are not included in the analysis.

      Size: 1,129 vehicles plus 24 subsurface fuel tanks

      Value: $35 million

      Lifespan: Eight to 10 years

      Annual preventative maintenance or replacement cost: $3.5 million

      Annual funding: $3.5 million

      Annual deficit: None

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    1. A partial solution would be for city workers to stop maintaining private property around town and make home owners do it their self.

      Every little bit adds up and when you put four man crews, two trucks and equipment on the street for private use each day that gets costly.

    2. Perhaps because of the declining economics of the news business (perhaps it's just print) the amount of effort and resources available to write this story kept the author from a more comprehensive evaluation of the challenges, or perhaps the writer does not have the experience in business to ask the questions needed of the public officials as to what they are looking at from a cost (expense) standpoint to meet the expectations of their departments. There certainly was not an effort to be an advocate of the taxpayer as to what else they may be doing to meet their obligations. To have public officials (as is the case most times stories like this are presented) complain about the lack of revenues is a waste of time.

      You can't look at this challenge from just the standpoint(s) of revenue and from the people employed to execute the tasks. You have to look below the revenue line to see where there may be some opportunities to actually do the work.

      When a private company has a revenue shortfall they evaluate ways to increase the top line AND if those efforts do not meet the projected expectations, they look at the expense side of things.

      Simple evaluation of the expense side would have provided the author plenty of information in order to ask basic questions as other ways to complete the tasks. For example:

      What are the payroll costs as a percentage of the department?
      Has this percentage (including benefits) risen as a percentage over the years?
      How many administrative positions are there that do not support the actual execution of the many projects (diversity, social aims, etc.).

      There was a great article in Sunday's paper on the topic of bike lanes. Who is making these decisions and why are we spending money on these vs. the actual value or use vs. how that money could be spent on repairing infrastructure.

      The point is the article is incomplete without investigating or presenting any effort into a more inquisitive evaluation of other ways to secure funds to do the work. What was presented is a one sided story on behalf of public agencies and their common and tired pleading for more revenue.