9/13/16, Milwaukee Journal Sentinel – Milwaukee and Milwaukee County will need to spend more on aging streets, highways, bridges and buses in the next several years even as both governments face significant obstacles to going deeper into debt, uncertain state and federal support, and growing competition for funds from major building projects, says a new report by the Public Policy Forum.
The city estimates it should spend an average of $76 million a year on street and bridge repairs or reconstruction for the next four years to keep pace with the need, according to the report, “A Fork In The Road.” Milwaukee maintains 1,415 miles of streets and 157 bridges.
The county projects spending of nearly $11 million a year in the next four years to keep up with fixing its highways and bridges, not including parkways, the report says. Milwaukee County maintains 84.5 miles of highways and 47 bridges.
“However, the single biggest transportation infrastructure challenge facing either government is the county’s need to maintain a regular replacement cycle for its fleet of 436 buses,” Public Policy Forum President Rob Henken said. That is No. 1 “because of the magnitude of the financial need associated with those replacements when compared to the county’s overall borrowing capacity,” he said.
The county anticipates spending an average of $13.3 million a year of local funds from 2017 to 2020 just to replace transit system buses, the report says. Average bus replacement cost is $475,000 each.
Nearly one-third of the county’s bus fleet, or 130 vehicles with the highest mileage, should be replaced, according to the forum’s analysis. That will not be done in one year or several.
Borrowing a $13.5 million chunk in 2016 helped pay costs of replacing 30 buses this year. Borrowing $13.3 million next year just to buy buses would take up one-third of the county’s $40 million bonding limit for 2017.
Total county capital spending in 2017— its large construction and major equipment replacement projects — is projected at $50 million, county Budget Director Steve Kreklow said Monday. The budget bottom line is made up of 80% bonding, or $40 million, and 20% cash match from property taxes, or $10 million.
Local spending on buses could take up nearly 27% of next year’s capital budget.
“It is difficult to see how we can sustain that,” Kreklow said. Spending up to $180 million on a new building for criminal courts a few years down the road, while maintaining debt management policies, “adds another challenge on top of that.” he said.
Other competing capital needs include tens of millions of dollars of repairs and upgrades at county parks and cultural institutions.
In advance of the forum report, Kreklow last month proposed another funding sourcefor the county — a vehicle registration fee, or wheel tax — as one way to reduce borrowing money for transportation infrastructure. That would enable the county to borrow those funds for other capital projects.
“We are looking at options” for new funding in the 2017 budget, he said Monday.
A $20 vehicle registration fee would generate $10.8 million a year. A $50 registration fee would generate more than $27.1 million a year.
A wheel tax proposal was rejected by the County Board in 2010.
Like the county, the city borrows funds through bonding to pay most capital projects. Both governments have adopted policies to limit amounts of annual borrowing so that increases in debt payments do not threaten funds available for operating costs.
The city goes beyond that with an informal policy recommending the city should not issue new debt exceeding the amount paid off through property taxes that year.
Milwaukee officials estimate they will spend an average of $76 million a year in the next four years from local, state and federal sources to meet street and bridge rehabilitation needs, the report says.
To accomplish that, the city already is forecasting an increase in bonding for street projects, from $28.1 million in 2017 and 2018 to $33.2 million in 2019 and $34.1 million in 2020.
About 56% of city streets, or 792 miles, are rated in poor or fair condition, according to the forum report.
While the city’s high impact streets program targets heavily traveled streets for repaving to prevent them from falling into poor condition, that approach cannot be used for the 337 miles of streets already in poor condition and in need of full reconstruction, the report says.
“Among the big ticket items with which those needs will have to compete are major repairs to the foundation of City Hall, which could cost up to $60 million, and remodeling of the Milwaukee Police Administration Building, which is estimated to require $20 million,” the report says.