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Wednesday, March 6, 2013

Taken for a ride

The placement of the following two articles by Darren DaRonco in the March 4, 2013 Arizona Daily Star makes for a powerful juxtaposition by the paper's editors.  The first article, City told streetcar operating cost will be 4 times earlier estimate, appears above the fold on the front page and continues on page A4.  The second article, Tucson must bridge $15M gap in budget, also appears on page A4 just to the left of the first article.  The editors of the paper leave it to the reader to reach his own conclusion about Tucson's city government.

Residents of Tucson have watched as the boondoggle known as the modern streetcar has mercilessly played out over the last several years.  Disruption of downtown business, delays in the delivery of streetcars, and fights between different government entities over costs were just the opening acts to the real budget buster: the misestimated costs of actually operating the system.  This new quadrupled cost estimate is being made even before the streetcar has run its first mile.  These are the costs that will haunt the city of Tucson and its taxpayers for the indefinite future.

The modern streetcar was the perfect addition to a city already struggling to pay for core services.  Last November, city residents barely approved Proposition 409, a $100 million bond program to fix the city's deteriorating roads.  This bond program will increase long-term costs to the city via debt service.  Mr. DaRonco writes, "The biggest causes for the ($15 million) deficit are salaries, benefits, and debt service."  This brings us to members of the Tucson Police (TPD) and Fire Departments (TFD).

The previous post about the Arizona Public Safety Personnel Retirement System FY 2012 actuarial report details the increased annual required contributions that the city of Tucson will have to pay PSPRS in the next fiscal year.  These costs amount to approximately $3 million for TFD and $5 million for TPD.  These two amounts alone make up more than half the $15 million deficit.

I would not want to be sitting across from representative of Tucson's city government trying to negotiate a new contract for wages and benefits.  A city council facing a $15 million budget shortfall and publicly embarrassed by an overbudget streetcar project is unlikely to be a sympathetic negotiating partner.  The additional $8 million in public safety pension costs will have to be made up out of somebody's budgets.  I will leave it to the readers of this post to reach their own conclusions from whose budget those costs will be recouped.

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