17th Annual Municipal Survey

In Search Of The Silver Lining
By Robert Carpenter, Editor | February 2014, Vol. 69 No. 2

Of course, having funding issues has led to additional concerns for cities. A municipal official from the Mountain West region reported that due to lack of funding, his city is always looking for ways to “repair old, failing systems as cheap as possible.”

So why do a majority of the respondents believe they will actual spend more money in 2014 than in past years? Some of the survey participants admitted it was just “blue sky, feel good” opinions. “We’ve been expecting the worst for so long, it’s about time we started expecting something better,” admitted a West Coast municipal spokesperson.

But most had tangible reasons for their optimism – like the release of full budgets. “We’ve had budgeted money each year but couldn’t spend a big chunk as our city council was worried about cash flow,” explained a respondent from the Midwest. “But while we’re still a long ways from where we were five or 10 years ago, our budgets have stabilized now for several years in a row so we’ve got a little increased confidence that our funds will be available.”

Said another survey participant from the Southwest: “Our managers actually believe we’ll have the money available that’s been budgeted when we need it, so we’re getting ready to let contracts this spring – for the first time since 2009!”

Indeed, a level of confidence in the public works economy has been largely absent from U.S. cities since the Great Recession peaked in 2009-2010. Over the last two years, the Municipal Survey has been filled with comments about cities being too concerned about cash flow to actually fully fund budgets. Finally, at least to some degree, it appears that municipal management believes their figures.
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Of course, there is another practical reason for increased funding in 2014 – desperation. Sewer, water and storm water systems, already in poor condition, have reached the critical stage for many cities. The Environmental Protection Agency has shown little concern for city budget woes when it comes to Consent Decrees.

Desperation is a strong motivator. Cities who failed to adequately adjust their user fees over a period of time are now finding they have little choice but to boost rates in order to find some funding to maintain systems. Cities reported an average of 3.4 years since their sewer rates were last increased, 3.2 years for water.