Look beneath the surface

In recent weeks I’ve seen a spate of pothole patching being done on neighborhood streets in Chico. I hope these efforts are being made, at least in some part, in response to my publicity (“Breaking the Bank,” CN&R, March 29) regarding the city pampering its employees with such rich wage and benefit goodies there’s little left for street repair.

While it’s good news to know that some pothole repair is going on, the bad news is that, as things stand now, our neighborhood streets will probably never be fixed. Apparently the City Council wants Chico drivers to just suck it up and “incrementally” get used to driving on deteriorating streets, as Councilman Steve Bertagna suggests. The main reason I doubt the big fix will ever happen is because the property tax slice of the city revenue inflow is constantly shrinking.

I’ll explain.

The city’s 2006-07 budget—now ready for updating—shows income from property taxes at $4,283,971. That amount represents the so-called “frozen base” of property tax because it must always stay the same—and so, of course, loses value because of inflation.

Why is it frozen?

By now most Chicoans have heard of redevelopment, a term that replaced urban renewal, and its job of fighting urban blight. Between 1980 and 1993, the city established four redevelopment project areas (Southeast Chico, Airport, Central Chico, and the Greater Chico Urban area), with our council members changing hats to sit as the board of directors for them.

The amount of property tax revenue flowing to the city general fund from each project area froze when the project was born, and the money from the 2 percent yearly property tax increase, or “increment,” allowed under Proposition 13 was diverted to the redevelopment projects. Then the council in 2004 joined the four areas as the Chico Consolidated Redevelopment Agency (RDA) because that way the directors could increase the limit, or cap, on the amount of money they could raise through issuing bonds for capital-improvement projects without a vote of approval by the public.

That bond debt stood at $33 million in 1993, but after another 13 years it now stands at $140 million. The city now pays $7.6 million in interest and principal annually to service the debt, money that comes from the property tax increment and the bond money itself. Remember that RDA money funds capital-improvement projects and represents a different and separate pot of money from the Chico general fund that finances all city services.

Most Chicoans remember the $70 million RDA bond issue floated a couple of years ago and the public furor it caused because the RDA board of directors (City Council members) created the debt without knowing specifically what they would spend the money for. They finally gave, at a projected cost of $4.7 million, the renovated City Plaza plus the big arterial road “restructuring"—Mangrove, Cohasset, Skyway, etc.—that took place last autumn for $9 million.

It’s legally OK to use RDA funds for such total renovation, but redevelopment money can’t be legally used for routine maintenance of neighborhood street potholes, surface peeling, and so-called “alligatoring” (see photos).

But the frozen base, separate from the RDA bankroll, will represent a locked-in and growing drag on the city budget because inflation—particularly in skyrocketing costs of road building and repair components like asphalt oil and crushed rock—constantly erodes it, and the frozen base is one key factor in repairing neighborhood streets.

City Manager Greg Jones says it would take $6 to $8 million a year to fix the streets, money he doesn’t have. He says it will take “a number of years” to fix the streets but didn’t want to say how many years.

Unfortunately, the neighborhood streets will never be fixed as things stand now. The 2006-07 city budget allowed only about one-third of the money Jones needs, and it’s only going to get worse.

In addition to the frozen base problem, there is the problem of annexing the so-called county islands that lie within Chico’s boundaries; the city has added 18,153 residents via this route since 1992.

Annexation comes with a major price tag for the city because no such thing as an annexation impact fee exists. The annexed areas now require all city services, including police and fire, but most costly are the substandard streets the county has allowed to run down. East Avenue is a good example. The county knew the city would annex the street, so it had no reason to keep it up.

Meanwhile, the $2.4 million restructuring of East Fifth Avenue— first on the original list of projects compiled by former City Manager Tom Lando—has not gone forward, nor has the $6 million restructuring of East Eighth Street.

Conceivably, all the ailing neighborhood streets could be added to the restructuring list, but going that route could cost, with inflation, $40 million to $50 million because so much work would need to be done: excavation for gutters, curbs, and sidewalks; grading and crowning; paving from side to side; providing for sewer lines and PG&E routes; and putting in quite a few storm drains where they don’t exist.

While not cost-effective or realistic, this strategy might end up as the end-game plan for needed quality repairs.

To me, the immediate solution options are to delay the $40-plus million new city police campus and use the money instead on streets; keep the cop campus on track but float $40 to $50 million in new street bonds; or—horror of horrors—raise taxes earmarked for streets.

Raising taxes means paying upfront and as you go, which is downright un-American. The American way is to take on more debt (30-year bonds) and pay twice as much in the long run.

The City Council, aka the RDA board, needs to wake up and smell the coffee on the big streets problem, one Bertagna says isn’t discussed often. Also, Chico drivers need to organize a protest to let the council know they are mad as hell and aren’t going to take it anymore. Such a move would get action.