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Depreciation

According to the core tax opposition, the town budget includes surpluses for as far as the eyes can see. In making this assertion, they have invited outsiders, the Koch brothers network (Americans for Prosperity), into our election process. They fail to mention that budgets are on a cash basis. In other words, budgets only reflect the expenses that will be paid during the year.

The budget has not included all essential street maintenance expenses, which have been silently and massively deferred. The latest Comprehensive Annual Financial Report reflects this deferral as an annual $4 million in non-cash depreciation. Even this is a gross understatement, as it is based on historic construction cost.

This depreciation also assumes that neglect has a linear cost response. In fact, it is somewhat exponential. The recent street condition survey placed infrastructure value in current condition at $200 million. Imagine the cost to put these streets into new condition when the value of infrastructure is 61 percent depreciated on a linear, historic basis.

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Depreciation

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According to the core tax opposition, the town budget includes surpluses for as far as the eyes can see. In making this assertion, they have invited outsiders, the Koch brothers network (Americans for Prosperity), into our election process. They fail to mention that budgets are on a cash basis. In other words, budgets only reflect the expenses that will be paid during the year.

The budget has not included all essential street maintenance expenses, which have been silently and massively deferred. The latest Comprehensive Annual Financial Report reflects this deferral as an annual $4 million in non-cash depreciation. Even this is a gross understatement, as it is based on historic construction cost.

This depreciation also assumes that neglect has a linear cost response. In fact, it is somewhat exponential. The recent street condition survey placed infrastructure value in current condition at $200 million. Imagine the cost to put these streets into new condition when the value of infrastructure is 61 percent depreciated on a linear, historic basis.

Our town is no exception to the historic pattern. Nationally, the overwhelming majority of municipalities have habitually put off maintenance to economically critical infrastructure. This is to the long-term financial detriment of their residents, as the repairs only become increasingly more expensive than proper maintenance with the passage of time.

Elected officials allow this to happen in response to voter opposition to tax increases. That same opposition will later blame them for the outcome.

Some surrounding communities have pavement management programs. The town’s consultant has recommended a minimalist standard pavement condition index (PCI) of 60-65. The cities of Mesa (PCI 85), Scottsdale and Phoenix all have considerably higher standards. The long-term objective of pavement management programs is cost minimization.

Vote yes for the property tax to pave the way to long-term cost minimization.

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