Policy Blog

Doing Less with Less (9-1-10)

"Like cities throughout the country, (Colorado Springs) has been hit hard by the recession. So the Springs slashed its budget and enacted a series of severe service cuts to save money.

One-third of the city's streetlights were turned off.
The city stopped mowing the medians in the streets.
The parks department budget was gutted from $17 million in 2009 to just $3 million this year.
The city has cut some 550 employees from its work force by eliminating positions or through outright layoffs.
Municipal bus service has been reduced by 100,000 hours, meaning buses no longer run in the evenings or on weekends.
In addition to selling off helicopters, the police department has slashed its ranks.

It's a crisis, to be sure. But in this politically conservative, tax-averse town, it's also something of an experiment. After the impending cuts were announced in fall 2009, the city put a property tax increase on the November ballot. With their vote, residents made it clear they'd rather suffer service cuts than see their taxes raised.

City Councilmember Sean Paige is one person who thinks scaling back government's role in the Springs is a good thing. 'I think the citizens have made it clear that this is the government people are willing to pay for right now. So let's make it work.'"

Facing Budget Gaps, Cities Sell Parking, Airports, Zoos (8-24-10)

"Cities and states across the nation are selling and leasing everything from airports to zoos-a fire sale that could help plug budget holes now but worsen their financial woes over the long run.

California is looking to shed state office buildings. Milwaukee has proposed selling its water supply; in Chicago and New Haven, Conn., it's parking meters. In Louisiana and Georgia, airports are up for grabs.

About 35 deals now are in the pipeline in the U.S., according to research by Royal Bank of Scotland's RBS Global Banking & Markets. Those assets have a market value of about $45 billion-more than ten times the $4 billion or so two years ago, estimates Dana Levenson, head of infrastructure banking at RBS. Hundreds more deals are being considered, analysts say.

In many cases, the private takeover of government-controlled industry or services can result in more efficient and profitable operations. On a toll road, for example, a private operator may have more money to pump into repairs and would bear the brunt of losses if drivers used the road less.

While asset sales can create efficiencies, critics say the way these current sales are being handled could hurt communities over the long run. Some properties are being sold at fire-sale prices into a weak market. The deals mean cities are giving up long-term, recurring income streams in exchange for lump-sum payments to plug one-time budget gaps."

Nashville Enacts 'Pay As You Throw' Plan (8-18-10)

"The (Nashville Metro) council overwhelmingly approved changes to the city's solid waste code, highlighted by a new 'pay as you throw' plan. The measure will charge a fee to residents in the Urban Services District . . . if they use more than one 96-gallon garbage container each week.

'It's important to try to guide more trash into recycling as opposed to filling up the landfill,' said Councilman Walter Hunt, a co-sponsor of the bill and chairman of the council's Public Works Committee. 'The more you throw, the more you pay. But Public Works will try to set the fee in advance so people will know.'"

Survey Compares Water and Sewer Rates (8-17-10)

Water and wastewater bills across the country have increased steadily since 2001, according to a recent rate survey of 50 cities, including Tulsa. For all cities, the survey reflects rates as of June 30, 2009.

For residential customers' combined water and sewer rates, Tulsa ranked 18^th-19^th lowest out of 50. Tulsa ranked 14^th lowest for commercial customers, and 12^th lowest for industrial customers. We were below the average and the median in all categories.

More generally, the survey found that there is significant inflationary pressure on water and sewer rates, largely attributable to five key issues:

Commodity price increases, primarily in electricity, chemicals and natural gas costs, which are leading contributors to operating and maintenance costs of water and wastewater facilities.
Lower consumption and high fixed cost. In general, demand or a consumer's use is declining while many utility costs, such as debt service, are fixed. Because most pricing structures include volume-based charges, revenues are declining while costs are not.
Benefits. Pension obligations and health care benefits are prompting an increase in labor costs.
Influence of wastewater legal action. Significant capital programs are being implemented in most major cities to comply with legal action related to wastewater system performance.
Aging infrastructure. Updating and replacing aging infrastructure are significant costs for most water and sewer utilities.

Download the survey results from Black & Veatch

Local Governments Making 'Sweeping Changes' to Retiree Healthcare Plans (8-9-10)

"The suffering economy has slowed the ability of local governments to address long-term funding of their retiree health care obligations, according to a new issue brief from the Washington-based Center for State and Local Government Excellence (CSLGE). The brief follows up on a 2009 survey in which 206 local governments indicated they were likely to adopt a long-term strategy to strengthen their retiree health care funding.

The new brief finds that many jurisdictions are making sweeping changes in their retiree health care plans, such as eliminating or planning to eliminate retiree health benefits for new hires (39 percent); increasing or planning to increase the years of service required to vest (36 percent); and increasing the retirement age (11 percent)."

Tulsa City Council