VIEWPOINT: The 'stroad' to Hell paved with unacknowledged liabilities

Guest column by Boyd McPeek, Strong Towns Sioux Falls chapter

The winter of 2022-2023 was long, cold, snowy and costly. As we sat inside and watched the plows sculpt snow canyons along the streets, the snow removal and pothole patching budgets disappeared. The city of Sioux Falls had to budget millions of dollars more to cover costs through the end of 2023. Money was taken from other projects and reallocated to street work. Obviously, the extreme weather was the main contributor to the problem, but another major factor that isn’t acknowledged is the large number of miles of street in the city that have to be plowed and patched. In 2023, the city says we have over 900 centerline miles of streets. If you turned the streets into one lane streets that are 10 feet wide, we have about 3,000 miles of streets (this is known as lane miles). This is slightly more miles than the distance from New York to Los Angeles via I-80. This number grows by 10 to 15 centerline miles per year, according to the city website.

Most of these streets are what Strong Towns calls a stroad. It is a cross between a street and a road. Strong Towns founder, Chuck Marohn, calls them a futon. A futon is an uncomfortable couch and an uncomfortable bed. A stroad is a dangerous street and a bad road. Stroads are too wide and traffic moves too fast for a safe, productive street, and numerous intersections cause conflicts that make it as unsafe as a highway. The excessive width of a stroad also makes it a money pit to maintain because of the large amounts of pavement required – i.e. the aforementioned 3,000 lane miles of asphalt. Higher speeds on stroads also reduce property values along it so they don’t even pay for themselves.

NEWS: Land acquisitions needed to add capacity along one of Sioux Falls' busiest corridors

The city is obligated to maintain these streets as well as water lines, sewer lines and other infrastructure at a cost of many millions of dollars, yet those costs are not included in the city budgeting process or city bookkeeping requirements. We call these costs  unacknowledged liabilities (we are referring to liabilities in the accounting sense as money we may owe). The cost to repair and replace streets is a liability the city accepts when it annexes new neighborhoods into the city. In exchange for property taxes generated by the new neighborhood, the city promises to take care of the streets, water and sewer lines – forever. That is a huge liability.

Ignoring  these costs could lead to serious budget conflicts and poor management of funds, which in turn could lead to the city eventually going bankrupt like Detroit and a growing number of U.S. cities have. But the most immediate effect of these unacknowledged liabilities is that the streets could go to hell – a state where there isn’t enough money to fix all the streets, and we have to live with bone jarring potholes for eternity. Is this possible? Do we actually know how much it will cost to maintain the infrastructure we already have?

Since the city doesn’t track liabilities for future maintenance in the budget process, city leaders feel blindsided when a major maintenance issue occurs. In 2023, the city realized the Sixth Street bridge needed replacement. Some city leaders expressed dismay about this “unexpected” infrastructure expense. The bridge was close to 50 years old. It was obvious that it would need work at some point, and it shouldn’t have been a surprise when it did. But the city doesn’t acknowledge future obligations, and therefore can’t plan for them.

If we don’t know about a 50-year old bridge that needs work, what else don’t we know about.  The city doesn’t acknowledge this, but every street, bridge, water line, sewer line and other infrastructure component will need repair and replacement at some point. This costs money – a lot of money.

According to a 2019 report done by Infrastructure Management Services (IMS) for the city, about 4 percent of Sioux Falls streets need a complete rebuild. That is about 120 lane miles of streets that now need replacement. At $1.5 million per lane mile, this will cost about $180 million. This number is not included in the city budget. And, If we don’t come up with enough money for just routine maintenance, street conditions will deteriorate rapidly until even more streets need complete replacement. This is like running on a treadmill that keeps going faster.

Right now, Sioux Falls is staying ahead of a budget crunch by running what Strong Towns calls the Municipal Ponzi Scheme. Each year the city annexes land and uses the fees and other charges from the new neighborhoods to balance the budget – the essence of a Ponzi scheme. But the city also accepts all the infrastructure in those neighborhoods, which is why 10 to 15 miles of streets are added every year along with water, sewer, etc. Those streets are usually brand new and in good condition. But that doesn’t last forever. 

In 1998, the city annexed 2,676 acres into the city – a record so far. All the streets, water lines, sewer lines, etc. in that annexation are now at least 25 years old. That is well into the lifespan of that infrastructure. Extensive maintenance work may be needed, which could sharply increase budget needs in the near future.

The point is that we – the taxpayers – are not being told what our true financial obligations are as a city. The great Suburban Experiment of building complete subdivisions on the edge of town without a property tax base to support them is not working, as explained in the Strong Towns philosophy. The city budget process does not acknowledge the millions of dollars in liabilities the city owes for infrastructure maintenance. If infrastructure costs were attached to parcels like property taxes are, we could balance expenses (infrastructure costs) against revenue (property tax) to see if the land we annex into the city creates a positive return on investment for taxpayers. 

Spoiler alert: No, it doesn’t. 

You can read “Strong Towns — A Bottom-Up Revolution To Rebuild American Prosperity” to get an understanding of why the great Suburban Experiment has failed.

So, we don’t know what we owe. We can guess that it is a very large sum, but until the city includes this information in its budgeting and accounting practices, we can only speculate. In the meantime, we can expect budget crises on a regular basis, especially if more hard winters are in the forecast.

Boyd McPeek has been a Sioux Falls resident since 1980 and is an active member in Strong Towns, a nonprofit organization dedicated to helping cities and towns in the United States achieve financial resiliency through civic engagement. He spent three decades working as a safety professional before a dozen years as a data analyst.