With revenues declining on several fronts and investments cut as a result, the infrastructure of southeast Michigan – its transit, water and sewer systems – is facing a “train wreck,” Washtenaw County commissioners were told at a recent working session.
A report from the Southeast Michigan Council of Governments drafted by a task force on infrastructure led by county board chair Rolland Sizemore Jr., laid out steps that SEMCOG hopes to take to address the situation – including, most immediately, lobbying Lansing lawmakers to raise the state’s gas tax, which funds road construction and upkeep. The briefing prompted commissioner Jeff Irwin to express frustration at SEMCOG’s approach, which he indicated wasn’t bold enough to tackle the underlying problems that have fostered sprawl.
At their May 20 session, commissioners also got an update on what’s known as the Chevron project – a multi-year, multimillion-dollar effort to cut energy usage in county facilities. And staff of the county’s energy and economic development office asked for feedback from commissioners about what type of pilot project the county should pursue, as part of a recent federal energy grant. Some commissioners are leaning toward a solar photovoltaic installation.
The meeting also included a presentation by county administrator Verna McDaniel on a request for more funds to complete the county jail expansion and new 14A-1 District Court facility.
SEMCOG: Regional Infrastructure Needs
Paul Tait, SEMCOG’s executive director, began the presentation with a grim statement about the region’s infrastructure: “We’re really headed for a train wreck.” The goal of SEMCOG’s infrastructure task force was to try to get ahead of the challenges, he said, and to figure out potential solutions.
Chuck Hersey, manager of SEMCOG’s environment department, described their first step, which was to assess the current situation, and it didn’t look good. The revenue base is declining on several fronts: Gasoline sales, which provide gas tax revenues, are falling. Travel is decreasing, and with new fuel economy standards, gasoline sales are expected to decline even more, Hersey said. Property values – and thus taxable values – are also falling, which impacts revenues for local governments. Water usage is down as well, which means revenues from water usage fees are also falling.
Bottom line: Current revenues are insufficient to maintain the infrastructure that’s in place – as revenues fall, investment in infrastructure is cut. Hersey noted that some believe cutting investments in infrastructure saves money. But underinvestment doesn’t save in the long-term, he said – it actually leads to increased costs, especially in the case of infrastructure like roads, and water and sewer systems.
Another problem: funding formulas and policies are outdated, he said, inasmuch as they depend on increased consumption. Yet increased consumption conflicts with newer “green” policy goals that push for less use of gasoline, water and electricity. These conflicting approaches are on a collision course, Hersey said.
The region’s shrinking population is another challenge, and it’s expected to drop even more in the coming years. As a result, the region has more capacity than it needs – and though it might offend some people to say this, Hersey added, the region needs to “right-size.” These changes aren’t something that are going to blow over in six months or a year, he said.
There are also fewer jobs, and per-capita income is falling – which means people’s ability to pay is falling, too, Hersey said.
He discussed how a consumer’s needs and expectations of service drive costs. Under the current paradigm, consumers expect a full level of service at all times. Service providers, like water plants, design systems that can deliver that expectation. This results in high fixed costs, Hersey said. For example, when people turn on their faucet to water the lawn, they expect water to flow at the same level of pressure – even if it’s been dry and hot for several days or weeks. So water systems are designed to meet that expectation. For roads, the expectation is that there will be little or no congestion at any time – so roads are designed to meet peak rush-hour needs.
The model is unsustainable, Hersey said.
There are several components to a solution, he said: 1) restructuring revenue-collection systems, 2) taking a holistic view of needs and outcomes, rather than just looking at silos of interest, like transportation or water, 3) pushing for service providers to collaborate, 4) reducing costs, 5) strategically investing funds, focused on where infrastructure currently exists, and 6) developing a legislative strategy.