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By Mike McManus, Director of Engineering Construction & Industry Relations - partial article published in Monday Morning Quarterback February 24, 2025 It seems we keep seeing reports of unfunded government infrastructure needs. Last week the California Transportation Commission report that cited unfunded transportation infrastructure needs over the next 10 years, in California they are estimated to be in the neighborhood of $200 billion. This week the City of San Diego is reporting a growing shortfall of revenue versus projected needs for the City’s infrastructure. The recently released report, “The 5-Year Capital Infrastructure Planning Outlook (CIP Outlook) for Fiscal Years (FYs) 2026–2030” outlines a grim picture of crumbling infrastructure. The city may have to finally face up to what its priorities really should be. The City’s infrastructure needs over the next five years are estimated at $11.87 billion. This includes the estimated costs for ongoing active and also newly identified capital improvement needs. The estimated funding available for these needs is forecasted to be $5.36 billion. Therefore, there is an estimated $6.51 billion funding gap to meet all the needs outlined during the CIP 5-year Outlook period. It should be noted that in 2021 the funding gap was estimated to be $2.3 billion. The problem has tripled in four years. It looks like it is on the verge of going out of control. Last year’s 5-year outlook pegged the 5-year CIP needs at $9.25 billion. The report estimated that $4.44 billion in funding would be available for future capital needs. Therefore, an estimated additional $4.81 billion would be required to meet all the needs outlined during the Outlook period. The funding gap has grown by 11% in a year even though revenue projections are up by about 20% for the next five years. This trend of a growing infrastructure funding gap has been known and reported by city staff going back at least five years. Here is the funding gap broken down by asset type: Public Utilities and Stormwater stick out as they both have multi-billion-dollar needs over the report’s five-year horizon. Public utilities are shown as fully funded, and represent two-thirds of the available revenue, but that masks another problem. What is not shown is that the fully funded public utilities need will be the result of large, anticipated rate increases for the City of San Diego residents and county residents. The Pure Water project costs are going to be shared across the county, so even if you don’t live in the city, your water-related utility bills are going up. Stormwater underfunding has been chronic, and as we saw at Chollas Creek, the lack of funding for maintenance of the system has the potential to cause large-scale economic disasters. Maintaining the city’s streets has a total unfunded gap of $1.7 billion, and when in combination with the stormwater unfunded needs of $3.7 billion, the situation appears to be headed for a public safety crisis. If you take the public utility’s needs and revenue out of the equation, the rest of the city's infrastructure needs are $8.4 billion and the projected revenue to solve the problems is only $1.9 billion. In other words, the infrastructure needs for the next five years are only 25% funded.
By Mike McManus, Director of Engineering Construction & Industry Relations - partial article published in Monday Morning Quarterback February 24, 2025
It seems we keep seeing reports of unfunded government infrastructure needs. Last week the California Transportation Commission report that cited unfunded transportation infrastructure needs over the next 10 years, in California they are estimated to be in the neighborhood of $200 billion. This week the City of San Diego is reporting a growing shortfall of revenue versus projected needs for the City’s infrastructure.
The recently released report, “The 5-Year Capital Infrastructure Planning Outlook (CIP Outlook) for Fiscal Years (FYs) 2026–2030” outlines a grim picture of crumbling infrastructure. The city may have to finally face up to what its priorities really should be.
The City’s infrastructure needs over the next five years are estimated at $11.87 billion. This includes the estimated costs for ongoing active and also newly identified capital improvement needs. The estimated funding available for these needs is forecasted to be $5.36 billion. Therefore, there is an estimated $6.51 billion funding gap to meet all the needs outlined during the CIP 5-year Outlook period. It should be noted that in 2021 the funding gap was estimated to be $2.3 billion. The problem has tripled in four years. It looks like it is on the verge of going out of control.
Last year’s 5-year outlook pegged the 5-year CIP needs at $9.25 billion. The report estimated that $4.44 billion in funding would be available for future capital needs. Therefore, an estimated additional $4.81 billion would be required to meet all the needs outlined during the Outlook period. The funding gap has grown by 11% in a year even though revenue projections are up by about 20% for the next five years.
This trend of a growing infrastructure funding gap has been known and reported by city staff going back at least five years. Here is the funding gap broken down by asset type:
Public Utilities and Stormwater stick out as they both have multi-billion-dollar needs over the report’s five-year horizon. Public utilities are shown as fully funded, and represent two-thirds of the available revenue, but that masks another problem. What is not shown is that the fully funded public utilities need will be the result of large, anticipated rate increases for the City of San Diego residents and county residents. The Pure Water project costs are going to be shared across the county, so even if you don’t live in the city, your water-related utility bills are going up.
Stormwater underfunding has been chronic, and as we saw at Chollas Creek, the lack of funding for maintenance of the system has the potential to cause large-scale economic disasters. Maintaining the city’s streets has a total unfunded gap of $1.7 billion, and when in combination with the stormwater unfunded needs of $3.7 billion, the situation appears to be headed for a public safety crisis.
If you take the public utility’s needs and revenue out of the equation, the rest of the city's infrastructure needs are $8.4 billion and the projected revenue to solve the problems is only $1.9 billion. In other words, the infrastructure needs for the next five years are only 25% funded.