Money Doesn’t Grow on Trees. Money Grows on Construction Projects.
A financial professional's
view by Terry Jackson, CPA
I’m a CPA and I have worked with clients who build parks, do environmental remediation,
have trucking fleets, build senior housing with public/private partners, and manage war
rooms for lobbying campaigns. So, I have an insider’s view.
$268 million—repeat that over and over until it sinks in. This is the estimate from 2020 for
the cost of the proposals in the Silver Lake Reservoirs Master Plan. The cost of
construction projects has risen dramatically in the last two years and today when jobs go
out to bid the material and subcontractor estimates are an eye-opener. There is no funding
for this project and the LADWP won’t kick in a nickel. Where would the money come
from? The most likely source would be a Community Facilities District bond which would
be charged to properties within the district and added to property tax bills. The potential
size of the facilities district would not be large and it would be very difficult to achieve the
two thirds vote to approve the bond. Other potential funding sources are not even close to
the funds that would be needed.
In addition, the Draft Environmental Impact Report estimates thousands of heavy haul
trucking trips and 250,000 cubic yards of excavation. The report also estimates that the
best-case timeline to complete the project is five years. However, with no funding in place,
it would be a piecemeal project that would not meet the “best case” forecast.
There are many improvements that could be implemented in a greatly reduced
project. The project, as proposed, is overblown and needs to be scaled back to something
achievable and realistic. If we were to ask members of the Park and Recreation
department what they would do with a $300 million capital improvement budget, I don’t
think they would say, “Let’s spend it all in Silver Lake.”