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City Council Proposes 20-Year Bond to Fix L.A. Streets

Council members say the bond measure is necessary, because the city cannot afford on its own the estimated $300 million annual cost to fix some 8,700 lane-miles of damaged streets. It does not include sidewalk repair.

A pair of City Council members Friday proposed a $3 billion, 20-year bond to repair thousands of miles of damaged city streets.

City Councilmen Mitchell Englander and Joe Buscaino, who represent the far corners of the city, from Sylmar to San Pedro, introduced a motion to place the bond measure on the May 21 citywide general election ballot.

Buscaino billed the plan -- called the "Los Angeles Emergency Local Street Safety And Traffic Improvement Measure" -- as the "largest public infrastructure project in the country."

The council members say the bond measure is necessary, because the city cannot afford on its own the estimated $300 million annual cost to fix some 8,700 lane-miles of damaged streets. The city budget for the current fiscal year is running a deficit and legislators will be tasked with closing an estimated $216 million budget hole for the fiscal year that starts in July.

"A general obligation bond, approved by the voters, is the only option to secure sufficient funding to accomplish this work within a realistic, 10-year time frame," the motion states.

The council members are planning a major public roll-out of the plan over the next week, including press briefings and pitches to newspaper editorial boards.

"This is absolutely the biggest issue in infrastructure facing the city of Los Angeles," Englander said.

The motion instructs the city attorney to draft the resolution to place the bond measure before voters. The council must approve the instruction by Wednesday in order to get it on the May 21 ballot, according to the city clerk's website.

Jan. 30 is the final deadline for the council to approve placing the bond measure before voters in May.

The motion also instructs the city administrative officer and Bureau of Street Services to prepare analyses of the plan.

The poor condition of the city's streets affect "the environment, traffic, goods-movement, and public safety," Englander said. "There's more people that die in traffic accidents from the conditions of our streets than almost all other crimes committed."

Buscaino and Englander are also expected to pitch the plan as a job- creator. Buscaino predicted the work would create 30,000 private-sector jobs.

The measure would not pay for which is estimated to cost more than $1 billion.

Despite the huge price tag for the work, Englander said the measure would be a net savings to city residents, who he said pay about $750 per year in maintenance for their cars because of the conditions of city streets.

The bond measure would pay for an inventory of every city street and would include comprehensive online displays of what streets are being fixed and when, the councilmen said.

Englander and Buscaino said they were influenced by the advice of UCLA Anderson School of Business Professor Edward Leamer, who called the measure "good borrowing." Leamer argues the low cost of borrowing -- interest rates for cities are at their lowest level in 40 years -- and the resulting street repairs would likely increase property values throughout the city by more than the total cost of the loan.

"In addition to the damage that is done to vehicles, the poor quality of the streets of the city sends a subtle, but clear message to our citizens, potential businesses and our visitors," Leamer said in a letter to city leaders last month. "Los Angeles is a city of the past and not of the future. The city of Los Angeles cannot afford to send this signal."

Mayor Antonio Villaraigosa had not yet seen the proposal and was not prepared to comment until next week, a spokesman said.

Odysseus Bostick January 04, 2013 at 11:10 PM
I applaud Mitch Englander and Joe Buscaino for proffering this proposal. There are a lot of reasons to support this bond measure. We have historically low interest rates, so the money is very cheap now. More importantly, we will be making streets useable again after decades where the city council has been derelict in prioritizing the way they spend our money. It should also be noted by anyone reading this that we have pent-up inflation that will be unleashed within the next decade due to the Fed's 3 rounds of quantitative easing (fancy talk for printing more money). Because the road repairs will be a tangible asset obtained, bonding for them at these rates of interest right before a large rise in inflation will provide tremendous cost savings equal to the difference between interest (2-3%) for the bonds and the rise in inflation (4-6%). It will also, as they say, create many thousands of jobs. But I don't think we should pass this bond. Our city council cannot be allowed to ignore the structural deficit in our pension system. It is an unsustainable pension system created with the expectation that we would continue the stock market return of the dot com bubble. The funding gap is growing larger each year, consuming more and more of our general fund. Today, $1 out of every $5 goes to pensions. In five years, it will rise to $1 out of every $2. If we give them more money, we relieve the pressure to fix the pensions and avoid bankruptcy. Unfortunately,

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