I’ve been ragging recently about how Virginia state and local governments are doing a poor job of taking full life-cycle costs into account when making infrastructure-investment decisions, and how some are doing an equally poor job of setting side money to replace their assets when they wear out.

A perfect example of such blinkered thinking appeared in the Sunday pages of the Richmond Times-Dispatch. If potholes seem to be bad and getting worse on city streets of the state capital, there’s a reason for it. The city is not dedicating enough of its capital budget to road repair, and the streets are deteriorating.

A November 2011 city auditor’s report identified a $277 million backlog in road work, with 66% of the city’s 1,860 road-miles of streets requiring “major rehabilitation or reconstruction.” Stated the report:

Currently, the city does not adequately fund the maintenance of good roads, which could result in the deterioration of the entire roadway system, including the 33 percent of roadways in good condition. Once the roads are completely deteriorated, the funding required to cure the situation will be significantly higher than the current estimate of $277 million.

The city has allocated $5 million, plus $5 million from the state, to pave 175 road-miles in proposed FY 2013-2014 budget. Over five years the city plans to pave 465 line-miles, or one quarter of the street network. That puts the city on pace to re-pave every street, on average, once every 20 years.

According to the auditor’s report, funding is insufficient to follow industry practices on preventive maintenance that would extend the life-span of the city’s streets. City officials plead significant competing priorities such as heavy spending on water, waste water and storm water (much of it federally mandated, I believe) as well as a new city jail and new school buildings.

(It would be interesting to know to what extent the need for new schools is dictated by the failure of previous administrations to allocate sufficient funds to properly maintain the old ones.)

A few thoughts….

First, the Virginia Department of Transportation allocates funds to Virginia cities that, in theory, should be sufficient to cover street maintenance costs. How adequate are those payments? If the city has to supplement the $5 million VDOT contribution with $5 million of its own, is the state short-changing the city?

Second, preventive maintenance is the very first thing that should be funded in every city budget. If the city neglects maintenance, the deterioration of its streets (school buildings, fire stations, office buildings, etc.) accelerates and becomes more expensive in the future. As an aside, poor maintenance shifts costs to motorists, who incur higher maintenance costs as the result of driving over potholes.

Third, the short-changing of maintenance should not be the type of thing that one discovers from an auditor’s report. Private corporations must report depreciation, which is counted against their earnings. Cities don’t have earnings, so depreciation is rarely an issue in budget deliberations. But it should be. Every political jurisdiction in Virginia should report the value of its assets and the depreciation of those assets, and should be required to set aside money in a reserve to replace those assets when they have outlived their useful lives.

To do anything less is to shatter the pretense of running a “balanced budget” and to shift the burden of paying for today’s government services to the next generation.