$3.2 Billion to Fix Tampa's Aging Pipes? From Where?


They say the first step is admitting you have a problem.

Nearly every North American city fails—and has been failing for decades—to set aside enough resources for essential infrastructure maintenance. As a rule, new infrastructure is treated by cities as an asset, not a liability. That is, even though we know that one day that street or pipe or pumping station will need repair, until that repair makes its way into something like a five-year capital improvement plan, you’re not going to actually see it recorded on any balance sheet as a future expense. Out of sight, out of mind. This approach to growth effectively robs the future to enjoy an Illusion of Wealth in the present.

Tampa, Florida is no exception to having indulged in the Illusion of Wealth, the honeymoon phase of rapid growth. The Gulf Coast metropolis benefitted from post-WWII boom times, enjoying a steady stream of new residents buoyed by the advent of air conditioning, and for decades didn't do a whole lot of worrying about the condition of its pipes. They were (mostly) new, and they were working fine.

Well, folks, Tampa has reached Step 1: Admit you have a problem.

Today, unlike in the 1960s, things underground aren't going swimmingly. Sometimes in reading the news you come upon a statistic that stops you in your tracks. Like in this piece from ABC Action News

Officials with the City of Tampa say they responded to more than 1,200 water main breaks in 2018 and nearly 1,000 wastewater cave-ins since July 2017.

Those are staggering numbers. One of the more dramatic incidents of late was a water main break in 2018 which created what the Tampa Bay Times called a “large crater” in the middle of North Rome Avenue and caused the evacuation of eight homes. A May 2019 article from the Times expands upon the scale of the problem that Tampa faces:

Each year, the city loses between 7 percent to 10 percent of its water to broken water mains — about 2 to 2.75 billion gallons per year. City officials estimate those leaks cost the city about $10 million annually.

The problem is simple: the city's pipes are old. Some date back to the early 1900s. A much bigger chunk installed in the 1950s and 60s are at the end of their life. Overall, about 500 miles of pipe needs to be replaced in the next 20 years out of the city's network of 2,160 miles.

To put that in context, if you stretched the city's pipes in a straight line on roads, they would run nearly to Salt Lake City. The city needs to replace an amount stretching almost to Birmingham, Ala.

University pump station force main break. Photo via City of Tampa.

Tampa is dealing with a rolling crisis of deferred maintenance and failing infrastructure that threatens to create a massive health and safety hazard. So now the city has to tackle the tough question it’s long avoided: What does it look like to actually pay your way for infrastructure?

Admitting you have a problem is only step 1, after all. From the ABC Action News story: 

We're told the City of Tampa spends about $20 million a year fixing its aging infrastructure. Public Works rolled out a plan to residents Monday night to make a fix, spending $3.2 billion over the next 20 years.

For those without a calculator handy, $3.2 billion comes out to an average of $160 million per year for the next 20 years, or a stunning eightfold increase over what Tampa is spending now.

My first reaction upon reading that was, "How are they going to convince citizens to just accept this?" Tampa has about 150,000 households, which means (disregarding potential growth in that number) the city is looking to spend about $1,066 per year per household just on water and wastewater maintenance projects—an increase of $933 over the present level. That’s not the roads, the streetlights, schools, police, fire, parks, garbage collection, even ongoing operational expenses for water and sewer service: that $1,066 doesn’t include any of the other things that taxes pay for.

The city’s proposed repair surge is a program it calls PIPES: Progressive Infrastructure Planning to Ensure Sustainability. There's scant public information available so far about this program, but the slides from this week's community presentations are available on the program’s website, and they're illuminating. This one reveals the sheer scale of the city’s identified maintenance needs, relative to business as usual:

 

Via City of Tampa PIPES presentation

 

How does Tampa plan to pay for this? Essentially in two ways:

1) Phase in higher water/sewer utility rates, ultimately roughly tripling the rate over the course of 20 years.

2) Debt. Good, old fashioned debt. $1.5 billion of it.

 

Via City of Tampa PIPES presentation

 

There are appropriate times for a local government to take on debt. Essentially, when your problem is short-term cash flow, debt is reasonable—issue bonds, pay for a large but necessary project, and pay it back (preferably within the political careers of the people who approved the debt) out of predictable, sustainable revenue sources.

But if you’ve been reading Strong Towns for any length of time, you’ve seen us repeat this mantra: debt is not a funding source. Issuing bonds creates no new wealth. Debt is a means of shifting consumption from the future to the present.

Tampa already pays millions in debt service — these two departments, water and wastewater, alone spent $28 million on debt service in 2018 [FY2020 Budget pp. 179 and 181], which is more than they spent doing maintenance on aging pipes. Tampa has a tough set of choices ahead of it.

All-too-typical Tampa landscape: auto-oriented businesses and parking lots along a massive (and expensive) stroad.

And nature isn't going to do the city any favors. As I write this, Hurricane Dorian is barreling toward Florida's east coast, exposing Tampa to the risk of heavy rain and flooding if it happens to stall over the middle or western part of the state, like Harvey did in Houston in 2017. Tampa's development pattern looks a lot like Houston's, it should be said. So does its topography: flat, swampy, sea level. Flooding is going to be the new normal here. The stresses on the system are only going to get worse, maybe much worse.

Do Tampa Leaders Understand the Nature of the Problem?

The city has taken step one: admit you have a problem. It has a plan to pay for needed, deferred repairs—but that shouldn't be mistaken for a plan to afford the repairs, or to become solvent and financially resilient in the long term. To a large extent, the city is still using debt financing to punt on the hard question: how do we achieve a productive development pattern that can generate the wealth needed to actually maintain these systems in perpetuity?

Here’s a statement from the City of Tampa’s own PIPES program page (emphasis mine):

Why didn’t we address these needs sooner?

The City did not start installing a large amount of pipe before the 1940s. Most of the pipe installed in the 1940s through the 1960s was cast iron pipe. The pipe has a lifespan of 80 to 100 years. A large replacement program was not needed until now. The City has spent the last three years analyzing the pipes in our systems and the equipment at the treatment plants to determine what needs to be replaced, when it needs to be replaced, how much it will cost, and how we can fund it. 

No, a large replacement program actually was needed. You always knew it would be needed. You just didn't set aside the resources you were going to need.

Tampa’s problem is deeper than not having the cash it needs on hand now to fix pipes and water treatment facilities. Tampa has massive liabilities and many acres of really unproductive land use that hasn’t been generating the wealth to cover them. And the way it got there was a complete lack of uncomfortable feedback over decades that should have been screaming, “Change course!” I find the below contrast illuminating. In the city’s PIPES presentation is a chart of the age profile of Tampa’s water mains, by the decade in which they were built. I’ve reproduced that graph (in green, axis on the right) and overlaid on it (in red, axis on the left) Tampa’s population growth in each of those decades:

 

Data via City of Tampa (pipe age profile), US Census Bureau (historical population figures)

 

In a strong town, one with a pay-as-you-go model of development oriented toward long-term stability, you would expect the red and green bars to roughly match each other. Add population, add a commensurate amount of water and sewer capacity. That’s not what happened in Tampa. Rather, the city’s water system exploded in size during the second half of the 20th century, all decades (aside from an explosive 1950s boom) in which the city’s actual population was stagnant. These are the pipes that are leaking and bursting now. The people who built them stuck us with the bill.

Tampa's not alone in this, though. It’s important to understand that they’re the norm, just like Lafayette, Louisiana (about which we’ve made similar observations) is the norm. Just like Detroit, everyone’s favorite cautionary tale, is the norm. Take what's going on in Tampa, multiply it by hundreds of cities and towns across the continent, and you’ve got an idea of the mess we're in.

We can’t just paper it over with debt. We need to change our whole model of development and public investment. We need a Strong Towns approach.

(Cover photo via City of Tampa, Florida)