Los Angeles is showing its age, and city officials don’t have plans for financing the facelift. From buckling sidewalks to potholed thoroughfares to storm drains that can’t handle a little rain, the infrastructure that holds the second-largest U.S. city together is suffering from years of deferred maintenance. Bringing pipes that deliver water to 3.9 million people up to snuff could cost $4 billion — more than half the city’s annual operating budget. The bill for repaving streets will be almost that much, according to estimates, and patching or replacing cracked sidewalks will require $640 million.

City Council members recently gave up on a proposal to ask voters for a sales-tax increase to finance street and sidewalk repairs. Mayor Eric Garcetti has ruled out raising water rates. “We’re in trouble,’’ said Jack Humphreville, budget advocate for L.A.’s advisory neighborhood councils. His estimate, based on figures provided by the city, is that getting public works into good shape will take $10 billion to $15 billion. “This is no different from debt.’’ A 30-foot geyser that spewed some 20 million gallons of water from a ruptured trunk line under Sunset Boulevard on July 29 brought renewed attention to the decay. The council called on the Department of Water and Power to scrutinize pipelines and other parts of the system, but didn’t discuss ways of finding money to fix what might be broken. “We can’t tax our way out of this,’’ said Councilman Mitchell Englander. Voters won’t approve adding to the local sales tax, which at 9 percent is among the nation’s highest, and would revolt if the price of water went up, he said. As it is, the rate is the seventh-highest in the U.S., according to a survey by the conservation nonprofit Circle of Blue.

The riveted-steel line that burst under Sunset is 90 years old. To replace every line by the time it hits 100, as many engineers recommend, would require a 4 percent boost in water rates every year, according to City Councilman Paul Koretz. About 240 miles of L.A.’s pipes are more than a century old, James McDaniel, senior assistant general manager of the Department of Water and Power, told the the City Council’s energy and environment committee on Aug. 6. The utility replaces only about 18 miles of pipe per year rather than the 34 miles officials called for in 2012. McDaniel said managers want to be able to replace pipes at a rate of every 170 years, which would be an improvement over the present changeout pace of every 315 years.

— James Nash

This article was taken from the Bloomberg Brief Municipal Market Newsletter.

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