Tuesday, February 25, 2014

Tar without feathers

In Indianapolis the city (or city/county kinda hybrid) has started the municipal asphalt plant early this year to get a jump on pothole repair.   Has the city of Pittsburgh restarted its asphalt plant?

Well, no. That would be hard to do since there is no municipal asphalt plant here. BUT there used to be not very long ago. What I pointed out here some years ago was a bit of esoteric city government history. The city's first Act 47 plan all but mandated the city of Pittsburgh to shut down its municipal asphalt plant. It was one of the biggest specific cost savings recommendations to come out of the whole Act 47 process actually. It was a decision made of an excessive faith in efficiency.  Probably was the efficient thing to do and all. Close the asphalt plant and rely on the private market to supply the city with asphalt was the idea (no Galt jokes here. I'm pretty sure he was never into the mundanity of street repair.) I am sure from a sheer cost point of view that makes a lot of sense. Efficient markets I am sure provided a much cheaper $$/ton than the municipal plant could. A no brainer argument to some at the time.

But who was it efficient for in the end? What if you can't get the asphalt from the private market when you most need it. Thus the argument that has again resurfaced is for the city to buy an asphalt plant anew. I get a point for that pun. Ironically, the "cold patch" the city is using to less effect than "hot patch" asphalt is actually more expensive. So we are spending more to get some very temporary repairs. Again, it's efficient.

Closing the city's asphalt plant was quickly seen as an error. In fact the very next Act 47 plan which few people actually read (see first link above) recommended a study to reopening a city asphalt plant. It was pretty much an admission that the plant's closure was not the greatest idea. I am unclear if that study ever happened... Maybe we should ask the ICA if that was one of the dozens of studies they have financed over the years. Oh wait, can't find any library on their web site any longer, LIKE THEY USED TO HAVE.

OK.. I'm getting ornery. I'll just end with an asphalt joke.Only thing I've read worse than economist jokes.


Anonymous DBR96A said...

All a city-run asphalt plant has to do is break even, as opposed to a private contractor which has to make a profit. Also, the city doesn't have to wait in line with a bunch of other boroughs and townships to get served; it can just serve itself with its own plant.

Tuesday, February 25, 2014 10:16:00 AM  
Anonymous Anonymous said...

Peduto was talking yesterday on WESA about the vagaries of the market vis a vis road salt and how the private companies were controlling distribution to keep prices high, resulting in unavailability when the city most needs it. Go free market!

Tuesday, February 25, 2014 12:56:00 PM  
Blogger Bram Reichbaum said...

What we need is a salt mine.

Tuesday, February 25, 2014 1:14:00 PM  

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