San Diego’s nearly $5 billion infrastructure funding deficit would be about $1 billion larger if the city included hundreds of maintenance projects that officials postpone and ignore, a city audit says.
Postponing those projects, which include roof patches and minor repairs to air conditioning systems, will increase long-term costs by forcing the city to replace entire buildings sooner than necessary, according to the 57-page audit.
“Although deferring maintenance can save money in the short term, deferring maintenance results in higher future costs and can impact city services, worker morale and the overall reputation of the city,” the audit says.
It can also deprive city leaders of an accurate picture of how far behind they are on infrastructure projects. The audit says deferred maintenance should be included in future evaluations of the city’s infrastructure deficit.
If it is included, it will likely account for the second largest deficit behind only stormwater. In last winter’s evaluation, the stormwater deficit was $1.6 billion, the streets deficit was $989 million and the parks deficit was $801 million.
The audit says the roughly $25 million San Diego spends annually on facility maintenance is only somewhere between 8% and 18% of what the city should be spending.
That’s based on recommendations from the National Research Council that cities should spend between 2% and 4% of the replacement value of their assets on routine facilities maintenance each year.
San Diego’s 1,600 buildings and facilities have an estimated net worth — or replacement value — of $7.2 billion, which would require annual spending between $143 million and $287 million on routine maintenance.
The audit also says the city is spending those limited resources the wrong way.
It says best practices dictate government agencies should spend 30% of facilities maintenance money on repairs and 70% on preventative maintenance projects.
By contrast, San Diego spends 87% of its facilities maintenance money on repairs and only 13% on preventative maintenance.
“We found that continually underfunding facility maintenance has also resulted in the Facilities Services Division needing to take a reactive approach to maintenance, meaning the city is fixing facility components as they break and delaying repairs until it has the needed staff time and funding,” the audit says. “This pattern has created a substantial deferred maintenance backlog and limits Facilities Services’ ability to conduct preventative maintenance.”
To help solve this problem, the audit said the city should develop a facility management plan to track and report maintenance needs and decide how to address them and how much money is needed for each project.
The audit also recommends the city use that plan to create a long-term funding strategy to address both annual maintenance needs and deferred maintenance.
A third recommendation is that the city set a goal for the percentage of total facility replacement value the city intends to spend annually on facility maintenance. The city is now spending 0.4% of its $7.2 billion facility replacement value — far below the recommended 2% to 4%.
In the city’s defense, the audit says San Diego is far from alone in deferring maintenance, because it’s a way for cities to make ends meet — spend money on immediate priorities and postpone less immediate ones.
“The National Research Council says underfunding of maintenance and repair is such a prevalent practice in the public sector that it has become a de facto policy that compounds the problem each year as the backlog of maintenance needs grows,” the audit says.
City officials agreed to all of the audit’s recommendations but stressed that complying with them would require more money.
“Significant investment in the Facilities Services Division is required to correct the underfunding issues and be able to take actions required for ongoing maintenance to protect the city’s investments in its facilities,” two officials — Comptroller Rolando Charvel and General Service Director Musheerah Little — wrote in a letter to City Auditor Andy Hanau.
