Sunday, March 11, 2012

City Council, March 12th - Flood Damage

On Monday Council will receive an information report on the damage caused by the flooding earlier this year.

The most significant item is the damage to the Winter Street bridge over Shelton Ditch.
Of the seven bridge structures significantly damaged, only the Winter Street SE Bridge over Shelton Ditch is currently closed to traffic. Given its critical location providing access to Salem Hospital, Public Works staff is working to expedite the process to evaluate options for either repairing or replacing the 84-year old bridge. The cost estimate [$4.4M] contained in Table 4 is based on complete replacement.
There was also damage to parks, streets, wastewater and stormwater facilities, and to private property.

There's also the renewal of fees for downtown parking services, but these are mostly administrative tweaks rather than any major adjustment.

Finally, I haven't been watching annexation issues much, but buried in a proposal to annex a parcel in the 1900 block of Wallace Road NW is a note that
The fiscal impact model created by ECONorthwest estimated the proposed annexation would create an annual deficit of $1,698 to the City's General Fund given the current level of service for park, library and fire facilities. If the level of service is increased by additional capital investment in these facilities, thus causing a corresponding increase in their operation and maintenance costs, the annual effect on the general fund would be to increase the deficit to $2,048 by 2020.
This sure looks like an example of what the Strong Towns analysis calls the post-war Ponzi Scheme:
What we have found is that the underlying financing mechanisms of the “suburban era”—our post-World War II pattern of development—operate like a classic Ponzi scheme, with ever-increasing rates of growth required to sustain long-term liabilities. Cities and towns benefit from a growing tax base associated with new growth, however they also typically assume the long-term liability for maintaining new infrastructure.Th is exchange—a near-term cash advantage for a long-term financial obligation— is one element of a Ponzi scheme. The other is the fact that the revenue collected does not come close to covering the costs of maintaining the infrastructure.
Again, I don't follow annexation issues, but this sure makes you ask why we want to put growth here if the rest of the city will need to subsidize its infrastructure.

And that's it for transportation, really.


Salem Breakfast on Bikes said...

I was thinking more about the annexation, and the magnitude seems trivial. Maybe $1,000 or $2,000 per year is the same magnitude as a rounding error? So maybe it's not an example of the "ponzi scheme." Perhaps a reader who follows annexation can chime in with better analysis.

Anonymous said...

You're right to be suspicious of this and ANY annexation.

The Strong Towns analysis you quote falls into a common trap. Cities and towns DON'T benefit from a growing tax base BECAUSE increased tax revenues from new construction (houses, malls, factories) hardly ever cover the initial costs or long-term maintenance of infrastructure and services new construction requires.

The American real estate development industry is one of the most heavily subsidized industries in the world. That is one reason why, after decades of annexations, the City general fund is still short.

Many of us are still living here and proud of our successful campaign to claim the right to vote on annexations and put it in the City Charter. Since then, Salem Councils under the influence of the real estate industry have modified the annexation ordinance so that not all of the costs and impacts of annexations appear on the ballot. Many voters believe they are getting all the facts about an annexation.

The City tells ECONorthwest what to exclude from their estimates so the ECONorthwest estimate is probably artificially low. Voters see nothing on the ballot about annexation impacts on streets, public health and safety, classrooms, libraries, park usage etc. There are about 40 community factors impacted by increasing population. Instead of showing a $2000 deficit the City should show the costs. If the City General fund is already over $10 million short where are the public funds coming from to pay for more services? Why is ANY "deficit" acceptable if it means we have less to fund bike lanes, schools, parks etc?

Research in Oregon shows the costs of providing services to new construction range from $40,000 to $80,000 per house depending on where it is built. How many years does it take for existing taxpayers to pay this off? (For facts and analysis of the costs of growth in Oregon and the Northwest see

As the Strong Towns "Curbside Chat" points out, many forced out of their homes by unscrupulous mortgage brokers and failed financial institutions are seeking apartments like those likely to be built on this annexation. There is likely a need for more multi-family housing.

But what are new renters getting? Increased traffic? Crowded classrooms? In adequate police and fire coverage? Is the developer solvent? Will more asphalt cause more flooding?

This annexation may be a good idea but no one could tell from its description on the ballot. Personally, when I don't know I vote no.

Richard Reid

NOTE: There is a LOT of useful information about annexations and the right to vote on them at Oregon Communities for a Voice in Annexations, a group I'm proud to Chair.

Salem Breakfast on Bikes said...

Thanks for the commentary, Richard! Good stuff to consider.