‘We’ve just built more than we can maintain’

The dilemma local officials face this time of year is usually portrayed as a struggle between cutting services and raising taxes, a choice that gets harder each year as budgets get made and taxes get levied.

As these choices play out, you can see how Minnesota residents define themselves and the places they live in. Budgets reflect community personalities; some even talk about them as moral documents that lay out what a community ought to do with its common resources.

But precious few are coming to grips with the real challenge, says Chuck Marohn.

“We seem to be operating under the guise that there’s going to be a recovery,” he says.

Marohn is a Brainerd area engineer, planner, writer and voice in the wilderness crying for local governments to adapt to a new world. He is president of Strong Towns, a non-profit organization that advocates for changes in development patterns, and has compiled a booklet from the Curbside Chats he’s been delivering to community leaders, a 57-page guide to why he thinks the local world will never be the same.

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Chuck Marohn at a Ground Level panel discussion in Princeton last year.

Put simply, his message is that the growth communities have built on and counted on is not sustainable and, in fact, has generated a set of road, sewer and other built-in infrastructure costs that will become increasingly difficult to pay.

“We’ve just built more than we can maintain,” he said Tuesday.

Marohn was part of a panel discussion Ground Level hosted last year in Princeton, focusing on the costs of growth in nearby Baldwin Township north of the Twin Cities.

His new report cites a number of examples showing long-term maintenance costs of housing development roads, industrial parks and sewer systems outweighing the ability of the beneficiaries to pay for them. He points to the small city of Backus, which needs to replace its 1960s era sewer system. The cost is $3.3 million, or $27,000 per household. The median income is the same $27,000.

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The proposed Stillwater bridge (rendering above courtesy of MnDOT) is likewise designed to generate a poor return, he argues. If the planned bridge over the St. Croix River were considered a local improvement and served 16,000 vehicles a day, its $668 million cost would translate into a $6 toll for each trip, Marohn figures.

Faced with tighter budgets, cities all over Minnesota are deciding to delay street repairs and maintenance to save money, for example. That’s not cutting; it’s simply putting off expenses, in Marohn’s mind.

What they should be doing, he thinks, is making choices about what local investments truly will pay an acceptable return in terms of tax revenue or benefits and sacrificing the rest. He says he doesn’t see many communities making choices like returning roads to two-track paths.

A few nuggets from his new booklet:

The benefits of growth are immediate: additional tax base and tax revenue. The costs come after one life cycle, when infrastructure needs to be maintained.

Once a problem is identified, it is natural to want a clear solution. We are often asked what can be done to solve this problem? When people ask this question, they often mean: What is the solution that will allow me to continue to live essentially the way I do now without undergoing too much turmoil? The answer is: no such solution exists.

The standard economic development model at the local level in the United States relies on convincing an employer from outside the community to relocate to the community. We have established an immense system of subsidies, supports and programs to facilitate these transactions. Not only is this vastly inefficient, it almost never works as planned.

Marohn doesn’t minimize the difficulty. He sympathizes with city managers who see a problem — traffic congestion or crumbling sewers, say — and don’t like the expensive fix that consultants may suggest. But they see no alternative.

So what’s his advice?

–First, stop building infrastructure projects that add to a community’s long-term maintenance obligations.

–Add up the true long-term obligations a community has taken on to maintain its infrastructure.

–Then divide communities into high-amenity and low-amenity areas. Put the public investment into the former and cut investment in the latter. Maybe not every place needs a wide street.

–Shift emphasis from cars to pedestrians.

And if that leaves some communities or parts of communities withering, there might be no way to avoid it, Marohn thinks. “A lot of these areas will be used for salvage. Send a machine out and grind up the asphalt.”

When it comes to economic development, Marohn likes two approaches.

One, pioneered after tough times in Littleton, Colo., is known as “economic gardening,” helping existing small companies (10 to 100 employees) become growth engines.

A second calls for relying less and less on bringing products and services from elsewhere, finding ways as energy prices rise, to make things locally. Food is a prime example, he said.

“We’re not going back to 2005.”

  • John O.

    Change is constant. I struggle, however, with his premise that communities that have “withered” should be “salvaged” like a bunch of old vehicles.

    Who makes that choice? A planner or politician in St. Paul? An engineer in Brainerd?

    I travel extensively across Minnesota and there is no doubt that there are small communities that are struggling to survive. Many of the doctors, dentists and pharmacists are gone. The grocery store has been replaced by a convenience store. What was once a small local hospital has become a nursing home. The number of school districts that have consolidated since the 1970’s is substantial. The dwindling number of school-age children that live in many of these “withering” communities spend significant time on a school bus each day.

    I wish I had a tidy solution but I don’t. However, I suspect that Mr. Marohn and his neighbors would probably not take kindly to being told that their community is “no longer sustainable” and will be left to wither away and ultimately be “salvaged.”

  • http://www.strongtowns.org Charles Marohn

    Thank you, MPR, for bringing attention to this issue.

    @JohnO – you should read the report. To answer your question: Who makes that choice? It will be community leaders ultimately. And the market. (And for the record, I would definitely agree that it should not and can not be a planner, politician or disconnected person/group).

    This is not simply a small town or rural phenomenon. The financial viability of our development pattern impacts all places; urban, suburban and rural. They have all been shaped by the suburban experiment.

    If there is not enough money to maintain everything we have built — and there clearly is not — then there is only one possible outcome. Some of what we have built is going to go away. It can either go away by a slow general atrophy in kind of a long decline (that is basically what we are doing today – the default setting) or our community leaders can make strategic choices to prioritize public investment to projects/initiatives that have, in the long-term, an above-average rate of return.

    In the report we contend that the most prosperous cities and towns will be the ones that implement the second option. That is not an easy conversation — some underutilized roads are going back to gravel, for instance — but it is necessary if our cities are going to emerge from this transition in a stronger position.

  • Bill Lindeke

    The proposed Stillwater bridge and freeway expansion is a tremendous misallocation of resources. It’s based on a mid 90’s assumption that sprawl development is going to continue at tremendous rates, all through Western Wisconsin.

    The housing bubble, the financial crisis, and the annual budget deficits all point to why we need to re-prioritize and think about how to spend government money in better ways. Building a huge freeway to empty corn fields in rural Wisconsin is a terrible public decision.

  • John O.

    Charles, thanks for your reply. I have read the “Curbside Chat” booklet. Nicely done, thoughtful, and to the point. Conclusions 1 and 2 on page 50 are spot on.

    Your third conclusion, however, seems to assume that local leaders (political, business, education, etc.) have the courage to face down the developers, tell certain residents (who are also voters) that their neighborhood is no longer sustainable, and have the wisdom to be able to foresee future impacts of their decision-making beyond “ribbon-cutting” ceremonies.

    Reality is very different. In my own community, the “all or nothing” polarization of politics–even at the local level–are pitting neighbor versus neighbor and business owner versus business owner. Our community’s city council reflects that same polarization.

    In previous years, the city council in my community was a congenial group who generally managed their resources well, thanks to Minnesota’s LGA. When there were disagreements, they could tackle difficult issues and work through their differences and find consensus in a conference room instead of on the internet. More importantly, those leaders were receptive to compromising.

    Some of the things you have in your principles like interconnected parks and civic structures (which I personally agree with and have supported with my vote) make sense. However, there is no shortage of residents and business owners who view these sorts of expenditures as “wasteful” and a “luxury we cannot afford.”

    In the case of the small rural towns that are decaying, many of the elderly residents are from second- or third-generation families that are not going to be easily persuaded to leave. If at all.

    Again, thanks for your reply.

  • Lee Ellis

    Yes, we’re going to have to start deciding what’s good enough. This talk of a high speed rail connection from the Twin Cities to Duluth is good case. How many will actually use it? I’m all in favor if the indications are that it will serve a good number of people but right now it looks more like solution looking for an issue. As for a new Stillwater bridge, no doubt one is needed but not the current proposal. Too big and the architecture doesn’t fit the area. Needs less futuristic concrete and more scenic river town look to it.

  • Brian

    It is excellent that this conversation is taking place. Underlying all of these issues are rising energy and material costs and the overgrowth of the credit-based economy. There is a large amount of deleveraging that will occur over the next decade, and we need to get ready for it.

  • http://www.strongtowns.org Charles Marohn

    Thanks @JohnO – thoughtful comments.

    I can’t argue with your assessment of the petty and shortsighted nature of a lot of our local decision-making. I have faith though that if we were less parochial in our approach to local governments and allowed them more opportunity to innovate and respond, some great things would happen.

    Some great failures would happen too – no doubt – but innovation requires failure. I think a lot of these problems are being devolved to the local level. If that is going to happen, the tools to deal with them need to be devolved as well.

    It is our hope that the Curbside Chat program and booklet gives a new generation of local leaders an alternative narrative on how to achieve prosperity.

  • http://hizeph400.blogspot.com/ Mulad

    For Lee, I’ll note that the projected cost of the proposed 155-mile Northern Lights Express to Duluth is roughly the same as the 0.5-mile Stillwater bridge. The train is currently estimated to cost between $650 and $750 million, but it’s not going to be free to use, of course — it will charge “tolls” through fares. A series of studies projects it should cover ongoing maintenance costs through fare revenue. On top of that, it’s planned to cost only about 1/5th as much to take the train there than it currently costs to fly from MSP to DLH, so I’m sure it will be popular.

    I’m not sure what Chuck thinks of trains — I personally think the NLX line partially meshes with his point about bringing pedestrian investments more in balance with all the money that has been spent on car infrastructure. About half the reason why I still own a car has to do with the fact that it’s very difficult for me to get to my parents’ house near Rochester without it — it’s possible, but I’d basically have to take a day or two off of work to make the trip. I may sell off my car someday, which would give me thousands of dollars in savings each year, but it’s hard to let go of a car once you have one. The most effective thing to do is to give high-schoolers and college students the option to avoid buying a car in the first place by providing them good transportation alternatives.

    Not everyone will choose to go car-free (or for a family, get by with one less car), but getting just a few people out of every hundred to give up a car can add up to tens of thousands of dollars in collective extra savings for a neighborhood or small community each year.

  • MzM

    If small farms existed the countryside would come back to life

    down w/ unsustainable agri biz

  • New Era

    I’m overjoyed that old people are now realizing that the future isn’t coming, it’s here, change isn’t coming, change has happened. The change is a world where suburbia is now urban, where cars intermingle among many modes of movement, where people must live near work. What exists today, right now, will be what will exist from now on, and nothing new will be coming, no new roads or houses, no new highways or stores. There will absolutely be no growth in the Twin Cities from here on out, at least, not in anyone’s lifetime. We must tend to our garden we have today.