Infrastructure investment is part of nearly every government wish list at the local, state and federal level. However, instead of just seeking to finance new infrastructure Washington D.C. has decided to approach the infrastructure issue by first analyzing its current infrastructure, including deferred maintenance. This effort has been viewed favorably by S&P Global Ratings (“S&P”) with a recommendation that other state and local governments conduct the same analysis.

The District took a look at infrastructure financing during the development of its long-range financing plan by compiling data on the following areas: (1) an inventory of currently owned infrastructure assets that require maintenance, (2) the quality of those infrastructure assets, (3) the priority of those infrastructure assets and (4) the funding available for maintenance of those infrastructure assets. This information can be used in the budget process and presumably updated for future uses.  

S&P has indicated that high levels of deferred maintenance can create a credit concern and could be an area of increasing focus in future credit analysis. However, measurement of the level of deferred maintenance can be problematic, since state and local governments either do not report it or report it in different ways. S&P has suggested that state and local governments begin to self-report on deferred maintenance of infrastructure and do so in a standardized way. Since the areas reviewed and the information compiled by Washington D.C. were viewed as positive by S&P, perhaps the District’s review should be used as model by other state and local governments. 

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