Fingers Crossed: 15th Annual Municipal Survey

By Robert Carpenter, Editor | February 2012, Vol. 67 No. 2

Indeed, funding was cited by an overwhelming majority of survey respondents as the defining issue of 2011 and going into 2012. The good news for contractors and consulting engineers is that rehabilitation work is piling up and delayed replacement or new construction projects mounting – all waiting for funding. “When we are finally able to start letting projects,” pointed out this municipal official from the West Coast, “it could be epic.”

But where the funding will come from and when those funds become available are the questions on everyone’s mind. Most experts concur that both the Clean Water Fund and State Revolving Loan Fund will be cut again. There has been talk of an infrastructure stimulus but there probably won’t be any firm action until after the presidential election.

Most agree that an improved economy is essential. Some municipal personnel don’t see any relief on the horizon for at least the next six months. However, a majority of the survey respondents said they are beginning to see some signs of improvement – albeit small. “Our budget people are telling us that we should see our finances improving the back half of the year and we may finally start to see some relief,” said this Northeast respondent. “We’re budgeting to let most of the work start in mid-summer – but keeping our fingers crossed that will happen,” admitted this Florida city representative.

Survey participants anticipated that if money was available, their budgets would need to increase by more than 30 percent just to catch up from the previous three years of shortfalls.

User fees
Increasing user fees is another revenue track that many cities are finally addressing. The survey revealed that more cities either passed or are considering passing sewer/water rate increases than at any time in the past 15 years. The average time between rate increases also fell to a new low at about three years indicating more cities are biting the proverbial bullet and boosting fees.

Many respondents expressed optimism that once the presidential election is over, the country will be able to move forward regardless of who is elected. This public works director from a large Midwest city stressed. “Our state and local officials are expecting our cash flow to ease somewhat by late in the year, and are hoping that Congress can do something to encourage growth and get us some relief.”