Bankrupt Cities

Charles Mahron, writing for his Strong Towns blog, addresses the bankruptcy of San Bernadino, the third California city to do so this year:

In fact, we’re essentially experiencing default of one type or another in almost every city in this country. In every city that I’ve ever interacted with, basic maintenance of critical infrastructure is being deferred because the city lacks the immediate cash necessary to complete the task. As maintenance is deferred, the costs expand, a cascade of compounding, future liabilities. Look at your own community and understand that not all defaults will be accompanied by formal bankruptcy filings. Most seem likely to be just a general across-the-board decline.

As for specific reasons San Bernadino couldn’t meet it’s obligations, he rejects the notion that the public safety unions demanded too much and cites this reason:

From all outside appearances, it seems that the business of San Bernardino – the apparent reason for it existing – was to build San Bernardino. A full 13% of the work force is still in construction, with much of the other employment coming in secondary, service industries (education, health care, etc…). The city was #11 on the list of Top 101 cities with the largest percentage of males in the construction and extraction occupations (#16 for females). City budgets still show huge revenue projections for permit fees, plan review fees and development impact fees.

How many cities need to go bankrupt before we realize that the suburban pattern isn’t sustainable? My prediction - quite a few more but attitudes are slowly changing.