Interestingly, about a month ago I had a conversation with a city manager who is in the Marcellus and Utica Shale area that is beginning to see an “oil boom.” The next day, I came across this fascinating article (at the bottom of this post) on the the economic impact of shale oil drilling. I’ve wanted to let it seep in for a while. My conversation with the colleague was similar to this article, but in a different way.
The manager was talking about the things that managers talk about and get excited over: new jobs! Revenue (that thing that so many have been missing for years)! He then talked about the need for community infrastructure to process and deal with the advent of hundreds of new jobs to a community, that frankly was barely holding its own: water and sewer lines, water and sewer plant expansions, new housing and development processes, downtown revitalization, rental housing, the need for new school buildings, new road maintenance issues, revised capital improvements priorities, hiring more staff, etc. He was getting ready for the work to come and was ready to provide the city council with a good solid analysis of the “cumulative costs” the community could be facing. It’s one thing to celebrate a high rate of growth, it is another to fully understand it and its long term issues.
As I read the article, and started to think through the “boom” issues from a municipal manager lens, my colleague is certainly heading in the right direction (which I would expect, he’s a darn smart guy and top notch city manager) . If the authors are correct in their “boom-bust scenario” the items my colleague is listing and for which he is preparing himself and the council, are just part of the overall discussion.
New considerations for capital improvements and reserve funding policies will have to be discussed. Instead of a the usual five year or ten year capital plan, Councils and administrators will need to look longer in the future. Some of the items that may need to be talked about are: useful life of roads, sidewalks, and water and sewer lines and plants, ramping up and scaling back of personnel, financial policies and reserve funds created based on the useful life equation.
This new growth and development will create a new paradigm and new political and administrative challenges. Our present local public officials, who have governed for years with a great deal of austerity and conservative budgeting are probably well suited to lead their communities, keeping an ethic of careful and conservative budgeting.