Balanced…but Unsustainable!

A person who responded to my weekly email last Sunday commented, “I thought you were always warning Councilmembers that the City was on an unsustainable financial path. This 2014-15 operating budget doesn’t look unsustainable: Am I missing something?”

Indeed, you are, I responded!

Drawing conclusions about sustainability from the Operating Budget – even if it is balanced – does not reveal how asset maintenance has been postponed in order to pay other expenses. A review of the City’s Capital Budget would have better disclosed how inadequately we are providing for the replacement of Scottsdale’s depreciating assets… roads, sewers, buildings, fire trucks, automobiles – basically, every asset we own except land (which, we hope, doesn’t depreciate.)

The entire City of Scottsdale is our front yard. City assets belong to each of us and their condition reflects our City’s image as well as our investment. It matters to us what the assets of our City look like and it matters to us that the City is simply letting another liability accumulate to pass on to the next generation.

I referred the reader to a Community Voices article I submitted to the Arizona Republic several months ago. The following comments are quoted from that article:

“…the City’s Capital Investment Program is unsustainable because we do not have the money to reinvest in new capital assets at the same pace old assets are wearing out. Every car owner knows that merely changing the oil and tires on their family car does not prevent the need to one day replace that car; city assets are no different. They depreciate and wear out, requiring replacement.

balanced“I met frequently with the Citizens’ Bond Task Force throughout 2012-13 to explain how City’s assets were depreciating at the rate of almost $100 million per year. With this knowledge, the Citizens’ Bond Task Force worked diligently to pare down the list of capital projects to only $50 million per year for the four-year bonding program.

“But the 2013 bond questions failed. There won’t be $100 million per year of new capital to offset depreciation of the City’s assets. There won’t even be $50 million. There might be [only] $5 million…

“That’s unsustainable: period!”

Arizona Republic, February 15, 2014

If I am elected your Councilman, you can count on my financial experience and integrity to insist we return to a sustainable financial path. I will not leave a legacy of liabilities for our children and grandchildren. That’s why I ask for your vote and your support in the upcoming Council elections.