urbanism

We've Done Ponzi Proud.

We've probably all heard of a Ponzi Scheme, and have at least a vague understanding that it's a type of investment we want to avoid. Named for Boston businessman Charles Ponzi (who promised investors a 50% return in just 90 days based on arbitrage in International Mail Coupons) these deals snag investors with promises of high, consistent returns, and little to no risk. 

Charles Ponzi, 1920. Via  Wikipedia .

Charles Ponzi, 1920. Via Wikipedia.

And for a while, these schemes can actually deliver on their promises -- as long as the pool of investors continues to grow exponentially. There is no legitimate "business" here, no real sales or creation of wealth; the scheme depends on paying returns out of new investments, rather than profits. Without a constant influx of new investor dollars, a Ponzi scheme will fall apart and the promotor will be caught or disappear.

Photo via WREX, story and news coverage  here . There were many more empty chairs than pictured here, only 6 residents attended the meeting.

Photo via WREX, story and news coverage here. There were many more empty chairs than pictured here, only 6 residents attended the meeting.

Last Wednesday I attended a Community Input session held by the Water Division of the City of Rockford. The purpose of the meeting was to solicit feedback on proposed rate hikes which are intended to provide an additional $1M for the "Water Pipe Replacement Program" which currently accounts for about $1.5M of the Capital Improvement Plan (CIP) funds allocated to the Water Division. (view full 2015-2019 CIP; Water Division begins pg. 76). 

Tim Holdeman, Water Superintendent, explained the expanse of the water system and the various threats that impact the City's ability to reliably provide the highest quality water to all residents. These threats include the size of the system (850+ miles of water mains, 26 wells) and decrease in water usage (due to increased industry efficiency, decreased number of residential users, better water conservation by business and residents, recent cooler, wet summers, etc.) resulting in decreased revenue. But the major threat is the age of the mains. Here come a lot of statistics, stick with me, I'll try to be as brief and as clear as possible.

Slide from Water Division presentation, graph showing miles of pipe at each age range.

Slide from Water Division presentation, graph showing miles of pipe at each age range.

The average life expectancy of a water main is 70 years. About 20% of the City's water mains are older than this, some as old as 120 years. According to the current CIP, "Replacing all the water mains older than 70 years would cost approximately $200 million...replacing the highest risk water main would cost approximately $21 million." But wait, there's more! According to the flyer distributed to residents along with our water bills, "The City should be replacing 3-4 miles of water pipe per year. Currently we are replacing about 1 mile per year. It costs between $1.5 to $2.5 million per mile to replace water pipe." Feeling nervous yet? We're just getting started. Back to the CIP: "Because the capital improvement needs are so much greater than available funding...the highest priority projects are considered for further analysis and funding. If the funding is available, the project becomes programmed...then...it is taken before City Council where if approved it becomes committed....A project may also be driven to become programmed or committed based on roadway projects that are committed by other Divisions or State entities....The cost of committed and programmed projects for 2015-2017 are about twice the Water Replacement and Improvement Account (WRIA) budget." 

Let's take a step back and consider this information, taken word for word directly from the City's own documents. Pipe that is 70+ years should be replaced, and we've got 120 miles of that. We'd need $200M to do it, but currently we're spending only $1.5M a year. At this rate it will take 133 years to replace the pipe that right now, today, is already 70+ years old.  And you're only asking for $1M more each year for the next 5 years? Holy Sh*t we've got a problem on our hands.

Compound this problem with the fact that, as the CIP states, projects are often added on to the WRIA budget based on other projects, typically road work (when it makes sense to replace mains if the road is already torn up). But these are projects that the Water Division cannot necessarily anticipate, projects which may not replace the mains that are at the top of the priority list because they are at the highest risk of failure. The 2015 CIP WRIA budget is $5M, and the project breakdown lists 10 committed and 9 programmed projects, for a total of just over $9M, or a deficit of over $4M. Currently the 2019 CIP breakdown lists only 3 committed and 2 programmed projects with a projected surplus of $3.3M; I asked Mr. Holdeman how likely it is that the 2019 project list will expand to meet or even exceed the number of projects in the 2015 and he responded "Very likely." 

Slide from Water Division presentation, graph shows number of repairs to water system. 

Slide from Water Division presentation, graph shows number of repairs to water system. 

Compound this problem yet again with a series of very cold winters, and overall repairs increasing by 30% (not surprising considering all the other factors). The Water Division attempts to hold reserves of $3M to address unexpected breaks, but Mr. Holdeman stated that in the winter of 2013 alone unexpected main breaks used up $2.2M of the reserves; add right on top of that the fact that reserves are being used to pay for those pesky unpredictable committed and programmed projects. 

So, where does that leave us? And why did I begin this tirade by defining a Ponzi scheme? Consider carefully the language used on the City's website: "The City of Rockford Public Works Department is pleased to present the 2015-2019 Improvement Program, which proposes $139M of infrastructure investment throughout the City." Here, investment and improvement are very loaded words. "Improvement" implies that the work to be done will leave the system better than it was before, more ready to provide the service for which it was intended. In the case of WRIA, the improvement is so negligible in light of the size of the system and the scope of the problem, it barely registers. 

Screen Shot 2015-08-29 at 9.24.19 PM.png

And "Investment"? For over a century the people of Rockford have been investing in a system that was flawed, faulty, doomed from the start. A system that promised little to no risk and depended totally on the expansion of users to fund not reinvestment in the original system but growth, growth, growth. Sound familiar?

Take another look at the graph of the age of pipes in our system. The pipes that are 70+ years old are certainly a problem. But I see another problem that is just a few short years down the road, certainly fewer than 133 years down the road. There are nearly 500 miles of pipes that are 20-70 years old, and where did the return on the "investment" of building those pipes go? Was it paid back to investors with interest? Well, if you count being able to turn on a faucet or flush a toilet a "return on investment", perhaps, but that's not really a return on investment, it's a service in exchange for payment. Did the return on investment at least go back into the water system, to maintain and replace older pipes? Ok, one more recap (and I promise it's the last): 120 miles of pipes 70+ years old, an out of balance CIP, and proposed rate increases that won't even make a dent...honey, we're in over our heads and the lifeguard is very busy fixing a parking garage (which, by the way, has little chance for a return on investment, either). 

We've done Ponzi proud, folks. And I'm not blaming the current administration, the trouble started long before them. For decades we've been buying into a flawed development scheme that "entices cities to exchange near-term cash advantages of new growth for the long-term maintenance obligation..." and the failure of our cities to remain solvent, to provide the most basic of services to their residents, is a serious problem. But it's only part of the problem, because our cities, including Rockford, continue to buy into this scheme, the promise that just building one more road, widening a few more lanes, allowing new development to add 8-9 miles of pipe to the City's maintenance obligations a year, will somehow right the ship.

I have a call in to Mr. Holdeman with a few more questions, mostly because I want him to tell me I'm wrong, that the system isn't as doomed as it appears (I'll amend this post with any answers that add light to the situation). He, like most city employees I have encountered, is a pleasant, capable, intelligent person who is committed to doing their best for the City of Rockford. But the system? It's broken, y'all. If I thought doubling our bills was the answer, I'd gladly pay twice as much for water service. But the choices are going to get much, much harder than that before this Ponzi scheme crashes and burns (and by then, our water system may not be reliable enough to put the fire out).

*The infrastructure/Ponzi scheme analogy isn't mine, thanks to Strong Towns for that*

**As of 8/31/15 the Water Division is still accepting comments on the proposed rate hike. I encourage Rockford residents to take their brief survey and if this post helped inform your responses in any way, let me know in the comments below.**

Healing City Scars

"When distance and convenience sets in; the small, the various, and the personal fade away.
- Jane Jacobs, The Death and Life of Great American Cities

Saturday morning I spent a few hours observing, photographing, and traversing several intersections in Rockford. My first stop was Ethel Avenue and 251.

Intersection of 251 and Ethel Ave, looking south. Number of lanes: 7 (including turn lane). Speed limit: 45. Distance cars have traveled from north without interruption: 1.6 miles. 

Southeast corner of Ethel Ave. and 251 intersection, an unassuming crosswalk button capable of stopping 6 lanes of commuter traffic.

At this point in the city, 251 runs parallel to the river as well as to a well-travelled section of multi-use path that includes The Symbol, Sinnissippi rose gardens and lagoon, Nicholas Conservatory, the YMCA, fishing piers, and lots of public park space. To the immediate north and east of this intersection lies Sinnissippi park, with a golf course, band shell, pickle ball courts, and acres of oak-forested park land. 

This intersection provides the only non-vehicle access (other than Spring Creek Road bridge) from east side neighborhoods to these incredible city amenities, from Loves Park to nearly downtown. It is also the only vehicle access (again, other than Spring Creek Road bridge) from west side neighborhoods to the east side, from Loves Park to nearly downtown. This was not always the case. 

Whitman Street Interchange. Photo courtesy of Rockford Reminisce

During the 1960s, as the great American experiment of urban renewal, suburban sprawl, and car madness began to take hold, Rockford was not immune to the appeal of fresh pavement and the "convenience" that an expressway bisecting the city would offer. Dozens of homes were bulldozed, and the working-class, downtown adjacent neighborhoods on the west borders of this interchange were neatly separated from those on the east. Numerous connecting streets were widened and made into one-ways to accommodate the interchange. And that fabulous expressway? Yeah. It never came. 

If neighborhoods are the fabric of a great city, the fine-grained network of economic vitality, the Whitman project ripped a gaping hole in Rockford's rich tapestry (although it is arguable that we avoided the full extent of the damage because of the expressway that never materialized). Many great American cities were irreparably damaged and bear the lasting scars of the expansion of the highway system. The Institute for Quality Communities at the University of Oklahoma has created a unique representation of this damage in the form of "city sliders" which overlay aerial photos of downtowns of major American cities in the 1950s with the downtowns in those same cities today. 

Downtown Cincinnati, 1955 and 2013. Click image to visit article with live "slider"; within article click and drag circle with arrows to view before and after images. 

Downtown Cincinnati, 1955 and 2013. Click image to visit article with live "slider"; within article click and drag circle with arrows to view before and after images. 

At their best, city streets provide access to services and amenities, connect neighborhoods and districts, and promote economic activity. However, for any of these "bests" to be achieved, city streets must first be designed for the people living, working, and playing on them. The Whitman Interchange represents all the worsts that a city street can be: a literal, physical barrier to services and amenities, a disconnecting of neighborhoods and the people therein, a portal of convenience for people who don't live in the city to get through it as quickly as possible with no opportunity for interaction with city residents or with the city economy. In short, convenience for some has led to disaster for many. 

The word "disaster" may seem hyperbolic, but I use it very intentionally. A natural disaster may last only a few minutes but change the physical landscape and the emotional connection of a community forever; the response to such a disaster can unite residents and strangers in a common act of rebuilding. For urban communities, infrastructure projects such as those I have discussed also drastically alter the physical landscape, and with those physical changes come a social and emotional toll. Those living in the wake of these projects are left to reknit the delicate network of businesses and homes and find new ways to navigate the everyday paths of life (to shops, to schools, to workplaces, to churches), and all too often "the small, the various, and the personal fade away." Worse yet, these disasters are accepted as normal and necessary; the strangers that traverse these disasters for the convenience they offer have no reason to unite with residents in an act of rebuilding, or to become familiar with the diverse, unique assets of each region of the city. 

How do we begin to fully heal the scars of failed roadway projects across our city? How can we avoid further wounding the intricate and fragile web of places and people? How do we respond to current and (planned) future projects that continue to divide and damage, rather than unite and support, the regions of this city? Below, more pictures I took Saturday to highlight a few such projects.

South Main and Island, looking west. El Tanampa bar housed in purple building, a long-standing business in southwest Rockford, now accessed only by right-in, right-out traffic. 

South Main and Knowlton, looking north. Bus stop on gravel path in front of strip with Chiquita grocery, Family Dollar, Rent to Own, and across street from South Main Food & Liquor. 

Google streetview, South Main and Lincoln, July 2012 (the month after Michael and I moved to Rockford). House has already lost some yard due to road widening/retaining wall addition. Note truck in driveway. 

South Main and Lincoln, photo taken Saturday (August 15, 2015). Yard is nonexistent, retaining wall doubled, trees gone, driveway gone (same story for many houses in this stretch of road). Sign on door indicates that house is condemned. 

North Main and Fulton looking west, taken standing in front of Olympic Tavern. Former site of an insurance office, hair salon, clock repairman, tailor (further to south), barbershop (northeast corner of this intersection), and other homes and businesses. Removed to widen and slightly alter route of North Main (Rt.2). 

North Main and Fulton looking west, taken standing in front of Olympic Tavern. Former site of an insurance office, hair salon, clock repairman, tailor (further to south), barbershop (northeast corner of this intersection), and other homes and businesses. Removed to widen and slightly alter route of North Main (Rt.2). 

There is much, much more to say on this topic and no easy answers available to unravel 60 years of failed urban experiments. Even now Rockford city officials are weighing options for how to "deal with" the Whitman Interchange, in which 2 out of 5 bridges are currently closed due to structural issues. I urge them, as I urge you, to consider the needs of the people of this city first, and not settle for what is bigger, faster, more convenient. Remember, cities are for people.