POLL: Should Pittsburgh Borrow $80 Million for Capital Projects? (Carnegie: HOA, camper)

[Blackbeauty212]

Originally Posted by BrianTH

Depressing article on the politics:

City's capital budget to grow

It is fine to ask if the money would be well-spent. But a lot of Council is suggesting it requires a political motive to want to borrow a substantial sum right now, and in turn they seem to be opposing the plan for their own political reasons. As I pointed out above, to explain why borrowing now makes sense, all you need to do is note municipal borrowing rates are incredibly low.

Unfortunately, we are seeing a similar dynamic play out at multiple levels of government--some folks are more concerned about harming their political opponents than doing what is best for their constituents.

I TOLD YOU!!!!!!!.....Council are going to be Obstructionist to any Ravenstahl puts forward regardless if its good for the city or not...

[pman]

Originally Posted by Blackbeauty212

I TOLD YOU!!!!!!!.....Council are going to be Obstructionist to any Ravenstahl puts forward regardless if its good for the city or not...

they have a point, such tactics (large bond issue for things like senior centers right before an election) smack of WAM. both sides play petty politics as much as anywhere I've seen.

[SteelCityRising]

I wish people would just elect ME to city council!

[airwave09]

Originally Posted by SteelCityRising

I wish people would just elect ME to city council!

Well you would somehow have to start a campaign and get yourself on the ballot first.

[SteelCityRising]

Originally Posted by airwave09

Well you would somehow have to start a campaign and get yourself on the ballot first.

I know. It's a goal of mine to be elected to serve our community as a city councilman during my lifetime. I'd prefer to be on more solid financial footing first, though, and have a few more years of networking, volunteering, etc. under my belt to help "establish" myself here.

[BrianTH]

Originally Posted by pman

they have a point, such tactics (large bond issue for things like senior centers right before an election) smack of WAM.

It is always right before some election or another.

Generally, a basic premise of representative democracy is that elected officials will try to do good things for their constituents as a means of popularizing themselves. If elected officials start opposing anything that might make some rival elected official a bit more popular, regardless of whether doing that thing is actually a good idea for their constituents, our whole system of divided government is going to break down (of course fans of parliamentary systems will tell you this is inevitable).

[ML North]

From the PG article:

After a year in which the city bought no ambulances and only 14 police cars, Mr. Ravenstahl wants to spend $7.5 million on vehicles and heavy equipment next year. "We shouldn't be borrowing for things like police cars," said Councilman Patrick Dowd, who prefers spending bond money on projects with long-term benefits.

Read more: City's capital budget to grow

One justification for issuing bonds to finance long term projects is that some future population is going to receive a significant portion of the total benefit, and as such that future population should share some of the cost as well. I think that logic is fine.

What I would take issue with, though, is that Councilman Dowd is opposing the use of long term financing to purchase tools -- vehicles, warehouses, etc. And while the useful life of those tools may be comparatively short, the ultimate benefits dervied from their use can definitely be realized over a much longer time period.

[BrianTH]

Yeah, that was a silly argument. The definition of a capital expenditure typically includes property whose useful life is longer than a year, which in turn includes most vehicles. It can make perfect sense to borrow to finance such expenditures, although maybe you don't want to borrow for too long of a term (you can roughly try to match the expected useful life, for example).

And refusing to borrow for such purchases can be financially foolish. As I noted previously, vehicles specifically often enter a period in which they can technically still be used, but they are costing enough in maintenance, down time, and such that you would be better off in the long run exchanging them for new vehicles. Again, the cash flow benefits of making that exchange could be spread over several years, so it doesn't necessarily make sense to insist on financing such exchanges out of cash on hand versus borrowing. Same deal with roads--deferring maintenance can end up costing you a lot more in the end. And so on.

[pman]

Originally Posted by BrianTH

Generally, a basic premise of representative democracy is that elected officials will try to do good things for their constituents as a means of popularizing themselves. If elected officials start opposing anything that might make some rival elected official a bit more popular, regardless of whether doing that thing is actually a good idea for their constituents, our whole system of divided government is going to break down (of course fans of parliamentary systems will tell you this is inevitable).

there's still some question, I think, as to whether this is the right move on the whole but I think that at least a good chunk of it is worthwhile (I can't comment on the police radio situation but if the current radios are having problems, then maybe it is good, though new radios aren't always a solution..google police radios motorola philadelphia). cop cars, otoh, you could have both maintenance issues and reduced fuel usage which I imagine could add up quickly. I wouldn't be surprised if they compromised on a number in between and, in the end, that's probably not a bad thing anyway. the mayor would get some of what he wants, council would look like they're being concerned about spending, and hopefully some of the more frivolous projects would be cut.

as for roads, once a road has to be ripped up, I doubt there's much difference between paving this year or next, the maintenance headache is passed onto your car...bridges otoh, those costs can add up quickly if you don't address them....to the extent this proposal does those things remains an open question.

[BrianTH]

I agree there is no inherent problem with Council scrutinizing the proposed expenditures for waste--I just don't like where else they seem to be heading.

Incidentally, I posted this before, but it explains how deferring maintenance of paved roads leads to higher long term costs:

Senate Introduces Fix-It-First Bill to Save Crumbling U.S. Roads | INFRASTRUCTURIST





Here is the source from which that is drawn:

http://www.forconstructionpros.com/a...ith-their-eyes

It is true that if the road is so far gone the pavement actually needs to be replaced, it may not matter much for road costs if you further delay (the cost to road users, on the other hand, is a real cost). But if you can catch the pavement earlier than that on a regular basis, you can significantly lower your total long term costs.