This was a good explanation of why US cities will never be able to cover their infrastructure maintenance costs.
The town I live in recently completed a $20mil sewer treatment plant and is in the process of beginning a $2mil+ project to replace the water lines.
It has approx. 1,600 residents, although the neighboring town is a customer of our sewer plant and they supply our drinking water (even though we are on the river).
I believe, as an investor of municipal bonds, the tax liability is eliminated, so this may be a reason this type of investment is ‘pushed’.
Municipal bonds are barely above the inflation rate. Split what 1,600 x2 = 3,200 ways a 6,250$ per person investment at those rates really isn’t that expensive. It’s roughly what everyone building a septic system would cost. Especially, if it’s sized with the expectation of any kind of growth.
>>> Especially, if it’s sized with the expectation of any kind of growth.
I don't think that most villages are growing. They're usually shrinking slowly as the old inhabitants die and the young leave to cities to find work. It's quite risky to go big and plan for growth when the taxpayer base is likely to shrink 10 years from now.
If the sewer treatment plant is really only lasting 20 years before becoming worthless that’s an issue. Those things should be lasting 50 to 100 years with maintenance and equipment replacement not 20. My comparison was assuming roughly half the interest rate, twice the upfront cost, but twice the lifespan.
In comparison to a septic system for a family of 4 running ~12k, but only lasting 15-40 years.
The town I live in recently completed a $20mil sewer treatment plant and is in the process of beginning a $2mil+ project to replace the water lines.
It has approx. 1,600 residents, although the neighboring town is a customer of our sewer plant and they supply our drinking water (even though we are on the river).
I believe, as an investor of municipal bonds, the tax liability is eliminated, so this may be a reason this type of investment is ‘pushed’.