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Kevin Faulconer's Love-Hate Relationship With Loans to Fix Your Street

The Republican city councilman is relying on loans for a big part of his initial investment in city infrastructure. But he’s against a big loan that would require a tax increase.

San Diego’s three major mayoral candidates have made repairing the city’s broken roads and building new neighborhood infrastructure cornerstones of their platforms. We’ve defined their plans, explained their key ideas and fleshed out what’s missing. This post is the last in the series. Read our takes on Councilman David Alvarez and former Assemblyman Nathan Fletcher.

Republican City Councilman Kevin Faulconer’s Streets & Neighborhood Repair Plan dedicates the most upfront money of the three major mayoral candidates to deal with San Diego’s giant infrastructure backlog. But unlike his opponents, he’s against a voter-approved infrastructure bond that would produce much more money down the road.

The Most Money Now: Faulconer says he’ll put a minimum $180 million annually toward repairing the city’s infrastructure for the next five years. That’s $20 million more than the city has projected it needs right now to keep streets, storm drains and buildings from deteriorating further. And it’s $20 million more than what Nathan Fletcher says he’ll put toward infrastructure in the first year. Faulconer’s other major opponent, David Alvarez, isn’t committing to an initial dollar amount.

Of his pledge, Faulconer says $60 million of it will be in cash, leaving $120 million in loans.

This approach has a few problems. The City Council has tried to prioritize boosting cash payments for infrastructure fixes, and Faulconer’s cash pledge is significantly lower than what the Council has said it wants to spend in the future. Borrowing money also requires the city to pay it pack with interest over decades.

Faulconer’s own plan calls relying on loans to pay for infrastructure repairs, “the equivalent of running a balance on a credit card to pay for day-to-day household items.”

Faulconer says he’s going to dedicate much more cash to repairs than the $60 million in his plan indicates. Half of the city’s revenue growth in property, sales, hotel-room and other taxes will go to infrastructure, he said.

“As we grow out, not only of the recession, but as new revenues come in, cash funding is going to become a greater and greater part of how we do that,” Faulconer said.

Do What the City’s Been Doing: Lots of what Faulconer pledges in his plan is a continuation of what the city’s already committed to do. He wants to put one person in charge of overseeing repairs – and a recent bureaucratic re-organization takes care of that. He wants the city to put together a multi-year repair plan – something the Council’s infrastructure committee is handling now.  He also calls for the city to regularly evaluate the condition of its streets, sidewalks, pipes and other infrastructure; some of those assessments are under way this year.

The Least Money in the Future: When the city finishes evaluating its sidewalks, facilities and park equipment, the backlog of repairs is going to grow. The city’s throwing around a $2 billion to $3 billion price tag for the backlog. Add to that the cost of meeting strict new stormwater regulations and building new stuff communities want, such as fire stations, and we’re talking an investment unlike San Diego’s seen.

Alvarez is strongest of the three major candidates in support of a big infrastructure bond to deal with the problem. Fletcher is open to a bond. Faulconer said he couldn’t see any circumstance where he’d back one. The bond, unlike the ones Faulconer supports in his plan, would include a tax increase and require voter approval.

“I think the best way to do it is the way I’ve outlined,” he said.

Most political watchers believe the bond has its best shot of passage in November 2016. If that happens, the bond likely would provide significantly more money than Faulconer’s plan after that date.

The Bottom Line: Falconer’s infrastructure plan is the most detailed of the three major mayoral candidates, and he’s committing the most money toward the problem at the start.

But his position on loans to pay for repairs is inconsistent at best. He’s relying on them to finance as much as two-thirds of the annual repair dollars in his plan, yet derides them as the equivalent of irresponsible credit card use.

He’s also opposed to the kind of loan that would include a tax increase, but also provide enough money to deal with the scope of the problem. By ruling out a big bond and not providing alternatives that would generate a similar amount of funding, Faulconer hasn’t proven he has a way to tackle the city’s crumbling infrastructure in the long term.

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