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How many roads will $55.3 million repair?

City policies seem to create surplus while $120 million is borrowed

There’s $55.3 million sitting in the bank that could be used on roads and sidewalk repairs if the City of San Diego wants to use it. And while $55.3 million is a drop in bucket when considering the City of San Diego's estimated $3.8 billion infrastructure backlog, it's a much needed drop.

Meanwhile, as funds continued to go unspent, the city opted to accrue more debt, issuing $120 million in lease revenue bonds in May 2015 to pay for road repairs and build new libraries and fire stations.

In regards to TransNet, since 2010, the city has spent approximately $14.7 million a year in TransNet funds on capital improvement projects and left tens of millions of dollars sitting in the bank. In June 2014, the balance had swelled to $52,162,000.

The problem: dual city policies. According to a city auditor report, it has been a city policy “to allocate small amounts of funding to a large number of projects” while at the same time another policy requires "the full amount of a contract be appropriated to a project.”

The conflicting policies have resulted in millions of dollars being encumbered but the city has been unable to spend it until the entire amount is obtained for each project.

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The Issue Is Not New

In January 2015, councilmember Todd Gloria spoke out on the issue upon discovering a $46 million pot of TransNet revenues.

"With the City’s infrastructure needs estimated at more than $2 billion, it is appalling that these critical transportation improvement dollars are sitting idle in an account rather than being spent on performing much needed repairs, restoring existing roadways, and constructing assets within the public right-of-way," wrote Gloria in a memo.

"As the Chair of the City Council’s Budget & Government Efficiency Committee, I will schedule hearings to draw attention to this matter throughout 2015, with the goal of quickly spending down the existing bubble on high priority projects throughout the City, and exploring a management strategy to do a better job of spending these funds moving forward to address the most pressing transportation problems."

A Plan in Place

As a result of Gloria’s budget hearings, financial staff came up with a plan to monitor the TransNet account on a quarterly basis and change the TransNet ordinance to allow the city to transfer excess funds to underfunded and unfinished projects.

According to the June 2015 city auditor’s report, the goal is "to fully utilize all available resources, including funds budgeted for current and future use…. Financial Management will be meeting regularly with Public Works and other asset-owning departments to determine which funds would be available for reallocation to projects that are nearer to completion. The goal of this strategy is to put collected TransNet funds to work and to help identify where projects may be stalled."

New Plans Take Time

While identifying new strategies to spend the TransNet funds in a more timely fashion, implementation of those strategies continues to take time.

“Quarterly reports on project progress will allow for greater oversight by the city council and, more importantly, ensure the taxpayer money we have is being used to address the infrastructure projects taxpayers need done,” said Gloria in an August 25 statement.

“The city faces many challenges complicated by our lack of resources to address them. While TransNet revenue is not enough to address our infrastructure backlog of $3.87 billion, using it on projects now makes far more sense than stockpiling it for future projects and risk losing future allocations.”

Gloria's Budget and Government Efficiency Committee will discuss the unspent balances at a January 2016 hearing.

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There’s $55.3 million sitting in the bank that could be used on roads and sidewalk repairs if the City of San Diego wants to use it. And while $55.3 million is a drop in bucket when considering the City of San Diego's estimated $3.8 billion infrastructure backlog, it's a much needed drop.

Meanwhile, as funds continued to go unspent, the city opted to accrue more debt, issuing $120 million in lease revenue bonds in May 2015 to pay for road repairs and build new libraries and fire stations.

In regards to TransNet, since 2010, the city has spent approximately $14.7 million a year in TransNet funds on capital improvement projects and left tens of millions of dollars sitting in the bank. In June 2014, the balance had swelled to $52,162,000.

The problem: dual city policies. According to a city auditor report, it has been a city policy “to allocate small amounts of funding to a large number of projects” while at the same time another policy requires "the full amount of a contract be appropriated to a project.”

The conflicting policies have resulted in millions of dollars being encumbered but the city has been unable to spend it until the entire amount is obtained for each project.

Sponsored
Sponsored

The Issue Is Not New

In January 2015, councilmember Todd Gloria spoke out on the issue upon discovering a $46 million pot of TransNet revenues.

"With the City’s infrastructure needs estimated at more than $2 billion, it is appalling that these critical transportation improvement dollars are sitting idle in an account rather than being spent on performing much needed repairs, restoring existing roadways, and constructing assets within the public right-of-way," wrote Gloria in a memo.

"As the Chair of the City Council’s Budget & Government Efficiency Committee, I will schedule hearings to draw attention to this matter throughout 2015, with the goal of quickly spending down the existing bubble on high priority projects throughout the City, and exploring a management strategy to do a better job of spending these funds moving forward to address the most pressing transportation problems."

A Plan in Place

As a result of Gloria’s budget hearings, financial staff came up with a plan to monitor the TransNet account on a quarterly basis and change the TransNet ordinance to allow the city to transfer excess funds to underfunded and unfinished projects.

According to the June 2015 city auditor’s report, the goal is "to fully utilize all available resources, including funds budgeted for current and future use…. Financial Management will be meeting regularly with Public Works and other asset-owning departments to determine which funds would be available for reallocation to projects that are nearer to completion. The goal of this strategy is to put collected TransNet funds to work and to help identify where projects may be stalled."

New Plans Take Time

While identifying new strategies to spend the TransNet funds in a more timely fashion, implementation of those strategies continues to take time.

“Quarterly reports on project progress will allow for greater oversight by the city council and, more importantly, ensure the taxpayer money we have is being used to address the infrastructure projects taxpayers need done,” said Gloria in an August 25 statement.

“The city faces many challenges complicated by our lack of resources to address them. While TransNet revenue is not enough to address our infrastructure backlog of $3.87 billion, using it on projects now makes far more sense than stockpiling it for future projects and risk losing future allocations.”

Gloria's Budget and Government Efficiency Committee will discuss the unspent balances at a January 2016 hearing.

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