Another Example of Orderly but Dumb

I’m sitting here in Wenatchee, WA, where I’ve been asked to keynote the Infrastructure Assistance Coordinating Council (IACC) workshop, listening to a breakout group talking about a sewer project. I picked this room because, on paper, it sounds like the prototypical small town infrastructure project. I’m sitting in the back now and a friendly woman just walked back and gave me a handout with the project details.

City: Packwood, WA

Project: Build a new wastewater collection, treatment and disposal system

Reason: Current on-site treatment systems have been deemed inadequate

Number of connections: 115

Estimated construction cost: $3,223,638.25 (no joking, the sheet gives that level of precision)

Engineering design (20% of cost): $644,727.65

I’m so depressed. I don’t even know where to start.

Let’s go with the math. The cost here is $33,600 per connection. Looking at the city data website, the median house price with mortgages and without mortgages in this zip code are $162,000 and $129,000, so we’re talking about a project that represents between 20% and 26% of median property values.

The conversation here is about the concentration of poverty within the city (a good thing when you are looking for funding) and so I’m guessing this is a typical small town situation where the wealthier live far outside of town. Thus, for this project, the costs are likely to be over 30% and perhaps even 40% of home value.

So, from a math standpoint, this is an investment completely disproportionate to what the market is going to be able to (a) justify and thus (b) sustain over the long run. In this group they are talking about the residents who are already complaining that they can’t afford the monthly charge, which is listed in the report at $37 per month. How in the world is this community going to maintain $4 million in improvements?

That’s not part of the discussion, and I feel a little bit guilty for not interjecting but I can see that the train has left the station, so to speak. The quotes from the guy who appears to be the organizer are along the lines of the need for economic growth. The exact quote is one we’ve heard before, that mindless, self-serving trope that we need to “spend money to make money.” Someone remarked that the city has the “second highest unemployment rate in the state” and so, as they conclude, this will really help them.

Can we really say we’re helping people with this type of approach?

At the most – THE MOST – we’re buying them one generation of a faux prosperity. We are helping them solve an immediate problem – inadequate wastewater treatment systems – by throwing an enormous sum of money at them. The people themselves will have that immediate problem solved and avoid the stress and tension of working that problem out, but now they will have a monthly bill they will struggle to meet and, over time, the community will have a system their tax base can’t support. Within a decade or two, they will be a broken pipe or failed pump away from an urgent problem they won’t have the resources to address. And nobody will be there to help them.

This isn’t going to create growth and opportunity for anyone besides an engineering firm and a contractor, and them only for a short time. It is not going to address the underlying financial problems that are creating high unemployment and an unproductive tax base in this small town. There is no evidence, based on decades of these types of projects, that cities with them fare any better. Yet we keep doing it, destroying small towns by making them financially more fragile and less productive, all in the name of helping them out.

Some of you are turned off by my libertarian leanings, my skepticism with the federal government’s ability to do good with the enormous power they have amassed. My leanings are not based on my upbringing – my entire family is pretty solidly filled with your typical big government, FDR liberals – but on my experience. This project, just like dozens I’ve seen before and even worked on myself, is going to be paid for largely by the U.S. Department of Agriculture through their highly touted (and bi-partisan supported) Rural Development program.

Orderly but dumb.

I’ll admit that these are not easy problems to work through, but small towns need to work through them. Neighbors need to work with neighbors to put in small, communal systems that are actually scaled to their community. Over time these systems may grow as the community grows and the tax base supports it. Viable growth is incremental, and incremental is messy. Some will not be able to work it out and for a complex set of reasons that defy our ability to project or even properly analyze, they will fail. Better they fail quickly so those people can get on with their lives and seek out those places that have resolved their complex, messy problems.

These huge, centralized approaches are short circuiting the natural growth and evolution of cities in an attempt to optimize a narrow set of outcomes (growth, unemployment). All they are doing is transforming complex economic environments into economic monocultures, making strong, small towns (and to a lesser extent, big cities) incredibly fragile, literally condemning most of them to eventual, painful failure.

How do we stop this? I feel so powerless sometimes. These are good people caught in bad, destructive system. It is all so sad.

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