Crumbling infrastructure is a weighty problem many U.S. cities face. Yet with reduced funding, some cities are scrambling to pay for necessary repairs and upgrades through alternative means. Santa Fe, N.M., is among them and it is looking to a bond issue — passed last fall — to provide relief.
As recently as 2015, the city of 70,000 people faced a $15 million deficit in operating revenue compared to expenditures. That deficit was addressed with budget cuts and freezes, exacerbating infrastructure challenges and affecting public services, public safety operations and internal city processes.
Fast-forward to today and the city is still grappling with the consequences of those tough decisions. Regina Wheeler has served as the city of Santa Fe’s public works director since July 2018. She described the current state of affairs in terms of infrastructure as generally poor, but she’s optimistic at the same time.
“I think the story is common in many cities,” she said. “Funding for infrastructure has been scarce since the Great Recession. Our backlog in road repairs is over $200 million (and) our facilities were in dire need of repairs. Most of which will be addressed by the $20 million 2018 GRT Bond.”
Santa Fe, she added, is experiencing a transformation from “an old funky town to a desirable small city to live in and visit.” That’s why it’s especially critical to make the necessary investments in infrastructure, she said, to rise to the level desired by residents.
A September 2018 memo from the city’s finance department outlines its plans:
“To begin addressing the city’s capital infrastructure needs, the finance department proposes issuing a $20 million, Senior Lien Gross Receipts Tax (GRT) Bond for 2018. This bond issue would not increase taxes. The GRT Bond issue enables the city to commit future Gross Receipts Tax revenue to finance the cost of the improvements, which more fairly spreads the cost over both current and future users of the facilities and services. Bond interest rates are also currently low, offering additional savings.”
The memo goes on, making a case for the city’s financial prudence. “We have not issued a Senior Lien GRT Bond for capital improvements since 2014, at a total of $15.46 million. Since 2014, the city has been active in refunding or paying off outstanding debt to lower interest costs and debt burdens. The city has only issued one new revenue bond for capital improvement projects since 2014 — the 2018 Gas Tax Bond, which has funded significant road repaving work throughout the city.”
In order to accommodate future growth, city staff assembled a package of priority capital improvement projects to be funded by the GRT Bond, taking into account factors like the city’s obligation, critical need, deferred maintenance and leveraging matching funds. They also were concerned with equity, geographical diversity, potential public reach, best use of funds, potential savings and project readiness.
Per the memo, staff took into account that 85 percent of the total $20 million should be spent within three years of the bond issuance. So, what types of projects will the funds support? In general, the city is financially committed to boosting quality of life and quality of place.
“A majority of the funds will go to building repairs and upgrades, making rec centers, libraries, pools and ice-skating rinks more functional, comfortable, energy efficient and safe,” said Wheeler.
As is prescribed in the memo, these projects are more short term in nature and scope. To that end, Wheeler said many of the projects are shovel ready and will be executed in the next 12 months.
For example, “We are building a new fire station that has just entered the design phase, and that will take a couple of years,” she said.
These projects are just as much about physical investment as they are societal benefit, she pointed out. The book “Palaces for the People” by Eric Klinenberg has informed her approach to public works.
“It is a great book about the importance of infrastructure that builds social infrastructure,” she said. “He says that by investing in libraries, recreation centers, swimming pools and trails, we build health, resiliency and tolerance into our city. This is what we are going for — the most sustainable, family-friendly and user-friendly city in America. These bond projects take a big step in achieving these goals.”
And those goals seem to be aligned with the residents’ expectations.
“We haven’t had any negative feedback about these projects and what feedback we’ve gotten has been positive,” Wheeler said. “These are important places to invest to maintain and improve our social infrastructure. I think the lack of commentary from our citizens is a sign that they are relieved we are addressing these critical facilities and community needs.”