Paying for the City We Already Have:
Infrastructure and the Long-Term Fiscal Capacity of a City

RenPet Research
Stuart A. Sutton, Editor
September 10,2 026

A city's financial condition is usually described in terms of its annual budget. We ask whether revenues are sufficient to cover expenditures, whether the city has a balanced budget, whether it carries debt, and whether it has enough money in its reserves. These are important questions, but they do not tell us everything we need to know about the city's long-term fiscal capacity.

A city is also the steward of a large collection of physical assets: streets and sidewalks, water and wastewater systems, stormwater facilities, buildings, parks, vehicles, equipment, and other infrastructure. These assets make the city's daily operations possible, but they also create an obligation that extends well beyond any single budget year. They must be maintained, repaired, renewed, and eventually replaced.

That obligation is easy to overlook because much of it does not appear as a conventional liability on the city's balance sheet. A city can have a balanced operating budget while the physical infrastructure on which that budget depends is steadily aging. It can also postpone maintenance without immediately creating a corresponding financial liability. The fiscal consequences may not become visible until a relatively inexpensive maintenance problem has become an expensive rehabilitation or replacement problem.

This raises a deceptively simple question:

How can we tell whether a city is maintaining its physical infrastructure at a rate sufficient to preserve its long-term fiscal capacity?

The question is more difficult than it first appears because there is no single number that answers it. Financial statements measure infrastructure in one way. Engineers measure its physical condition in another. Neither measure, by itself, tells us what the city's future obligation will be.

In the following discussion, we will explore several aspects of this problem. We will first define the question we are asking and distinguish it from the narrower question of whether a city can balance its current budget. We will then look at how cities measure infrastructure, and what those different measures actually tell us. We will examine what Petaluma's financial and physical-condition data show, using its streets and roads as a particularly visible example. We will consider what those data allow us to reasonably infer—and what they do not. Finally, we will step back from the road network to consider why streets represent only one part of the city's larger infrastructure burden.

The purpose is not to prescribe what Petaluma should do. Nor is it to advocate for a particular tax, spending program, development policy, or infrastructure strategy. Those questions deserve public debate, but meaningful debate requires something that comes first: a shared understanding of the condition we are debating.

This paper is therefore an exercise in seeing and learning. Its objective is to make the numbers sufficiently visible and understandable that a resident can look at the same evidence as city officials, understand what the numbers mean, recognize their limitations, and participate intelligently in the questions that follow.

The infrastructure burden question

Suppose a city has enough current revenue to operate its police department, maintain its parks, collect its garbage, operate its libraries, pay its employees, and provide all of the other services included in its annual budget. It might reasonably be described as fiscally sound.

But now suppose that the same city owns roads that are deteriorating, a water and sewage systems beneath its streets that are approaching the end of their useful life, aging public buildings, and other infrastructure that will eventually require substantial investment. None of those future costs appears in the city’s current operating deficit.

The distinction can be illustrated with a deliberately simplified example.

A Hypothetical City's Operating Budget
and Infrastructure Funding Gap

While the numbers are fictional, their purpose is to expose a distinction that can disappear in an annual budget.

The city in this example can balance its operating budget in both years. Yet it is not necessarily maintaining its infrastructure adequately. If the gap between what the infrastructure requires and what the city spends to maintain it persists, the city is accumulating a future obligation even while its annual operating budget appears under control.

This is the central idea we need to keep in view: fiscal capacity is not simply the capacity to pay for today's operations. It is also the capacity to sustain the physical assets that make those operations possible.

That does not mean that every dollar of deferred maintenance represents a dollar of future liability. Nor does it mean that a city should always spend more on infrastructure. Some assets can be maintained economically; others may be better replaced, redesigned, consolidated, or retired. The important point at this stage is narrower: the annual budget does not, by itself, reveal the full financial consequences of decisions about physical infrastructure.

To understand those consequences, we first need to understand how infrastructure is measured.

While the numbers are fictional, their purpose is to expose a distinction that can disappear in an annual budget.

The city in this example can balance its operating budget in both years. Yet it is not necessarily maintaining its infrastructure adequately. If the gap between what the infrastructure requires and what the city spends to maintain it persists, the city is accumulating a future obligation even while its annual operating budget appears under control.

This is the central idea we need to keep in view: fiscal capacity is not simply the capacity to pay for today's operations. It is also the capacity to sustain the physical assets that make those operations possible.

That does not mean that every dollar of deferred maintenance represents a dollar of future liability. Nor does it mean that a city should always spend more on infrastructure. Some assets can be maintained economically; others may be better replaced, redesigned, consolidated, or retired. The important point at this stage is narrower: the annual budget does not, by itself, reveal the full financial consequences of decisions about physical infrastructure.

To understand those consequences, we first need to understand how infrastructure is measured.

Here is how cities measure it

Consider a hypothetical city street.

The financial records treat the street as a capital asset. [1]  Its original cost is recorded, and that cost is generally depreciated over an assumed useful life of the street. The pavement engineer looks at the same street very differently. The engineer is interested in cracking, rutting, surface deterioration, structural condition, traffic, drainage, previous treatments, and other physical characteristics that help determine what should happen to the pavement.

Neither perspective is wrong. They simply answer different questions.

Two Ways of Measuring the
Same Physical Asset

This distinction between the two perspectives is fundamental to everything that follows.

When an Annual Comprehensive Financial Report (ACFR) reports that a city's infrastructure has accumulated depreciation of a particular amount, it is not saying that engineers have inspected the infrastructure and determined that precisely that proportion of its physical usefulness has disappeared. Depreciation is an accounting method for allocating the recorded cost of an asset over an assumed useful life established for financial reporting purposes.

A useful life is not a prediction that the physical asset will cease functioning when the accounting clock reaches zero.[1]  It is an accounting judgment about the period over which the recorded cost of the asset is to be allocated. The actual physical life of an asset may be shorter or longer, depending on how it was designed, constructed, used, maintained, and renewed.

The pavement engineer is asking a different question. Rather than asking how much of the asset's recorded cost has been allocated to past periods, the engineer asks what condition the pavement is in now and what treatment is appropriate given that condition.

Similarly, when a pavement-management system reports a Payment Condition Index (PCI) rating of 50, it is not saying that the street has exactly half of its useful life remaining. It describes the observed condition of pavement on a standardized scale. [2]

The two numbers can therefore be placed beside one another, but they should not be treated as interchangeable. One describes the accounting consumption of recorded cost; the other describes observed physical condition.

That distinction becomes especially important when we try to understand what "wearing out," "used," or "used up" actually means.

Here is what the measures actually mean

What depreciation does—and does not—tell us

Imagine, again, a hypothetical street constructed for $1 million and assigned an accounting life of 20 years by the city.

If we simplify the accounting and assume straight-line depreciation, the book value would decline as follows:

Illustrative Depreciation of a $1 Million Street
Over Its Accounting Life

This is useful because it shows exactly what the accounting system is doing. It is allocating the original cost over the assumed useful life.

But notice what the table does not tell us. It does not tell us that the physical condition of the street is 75 percent at year five, 50 percent at year ten, or zero at year twenty. A street does not necessarily deteriorate at a constant rate, and maintenance can materially alter its physical condition.

Nor does a zero net book value at year 20 mean that the city has no asset. Hopefully, the street may continue to provide service for many years. The accounting value has reached zero; the physical infrastructure has not necessarily ceased to exist.

This is why accumulated depreciation can be useful evidence of the extent to which the recorded cost of an infrastructure system has been consumed for accounting purposes without being a substitute for an engineering assessment of its physical condition.

The distinction will become particularly important when we examine Petaluma's financial records. Before doing that, however, there is another measurement we need to understand: the measure used to describe the physical condition of pavement.

What a pavement score actually means

The PCI provides a common way of describing pavement condition on a scale from 0 to 100. [2]  Higher numbers represent better pavement condition; lower numbers represent greater deterioration.

It is tempting to interpret the scale as though it were a percentage of useful life remaining. It is not.

A simplified illustration makes the point. The following is not Petaluma data. It is an illustrative representation of the general pattern of pavement deterioration.

Illustrative Relationship Between
Pavement Age and Condition

The important feature of the illustration is not any particular number. It is the shape of the decline. Pavement condition does not ordinarily deteriorate in a straight line. A pavement can remain in relatively good condition for years and then deteriorate increasingly rapidly. 

That matters financially because the appropriate intervention changes as pavement condition changes. A relatively inexpensive preventive treatment may preserve a street that would eventually require a much more expensive rehabilitation or reconstruction if deterioration is allowed to continue.

Thus the physical-condition measure introduces something that depreciation alone cannot show: timing matters. The question is not simply how much infrastructure has aged. It is also where that infrastructure is on its physical deterioration curve and what intervention remains economically sensible.

With those distinctions established, we can turn to Petaluma's actual data.

Here is what Petaluma's data show

Petaluma's ACFR provides a record of the city's capital assets, including infrastructure, its original or historical cost, accumulated depreciation, and the resulting net book value. These figures give us a way to ask how much of the recorded cost of the city's infrastructure has been allocated to past periods.

They do not, however, tell us what percentage of the city's streets are in poor condition, how many years a particular road has before it requires reconstruction, or what it would cost to replace the network at today's construction prices. Those are different questions. The accounting record is useful precisely because it answers one question while leaving others for different forms of evidence.

For FY 2025, Petaluma reported governmental infrastructure with a historical cost of approximately $284.6 million and accumulated depreciation of approximately $162.1 million. The resulting net book value was approximately $122.5 million. [1]

Petaluma Governmental Infrastructure:
Historical Cost, Depreciation,
and Book Value, FY2025

The 57 percent figure is therefore an accounting measure that tells us that approximately 57 percent of the historical cost recorded for Petaluma's governmental infrastructure has been allocated to depreciation. It does not tell us that 57 percent of the physical infrastructure has worn out.

That distinction is worth pausing over because the language of "consumption" can easily become misleading. If we say that an asset is "57 percent consumed," a reader may naturally imagine a physical object that is 57 percent worn out. The accounting record does not support that interpretation. What has been consumed, in the accounting sense, is 57 percent of the recorded historical cost through depreciation, nothing more.

There is nevertheless something important here. A large amount of accumulated depreciation means that the city has a substantial stock of infrastructure whose recorded cost has already been allocated to past periods. The accounting measure therefore provides evidence of the age and financial history of the asset base, even though it does not provide a direct measure of its physical condition.

The distinction becomes even clearer if we separate Petaluma's governmental infrastructure from its business-type infrastructure.

Petaluma Infrastructure by Governmental
and Business-Type Activity, FY2025

This broader view is important. Streets are generally included among governmental infrastructure, while water and wastewater systems are accounted for within business-type activities for providing services. The combined figures therefore begin to show the scale of the physical infrastructure for which Petaluma is responsible. [1]

Yet even these figures do not give us a current replacement bill. Historical cost is what the city originally recorded when an asset was constructed or acquired. Construction costs, labor, materials, engineering requirements, and regulatory requirements are likely to all be substantially more today.

This creates another distinction that will become important when we examine the streets: historical cost is not replacement cost. 

A road that cost $1 million to construct twenty years ago will cost considerably more to reconstruct today. Conversely, some assets may have been substantially renewed or improved since their original construction. The accounting record does not simply translate into today's price of rebuilding the physical asset.

We therefore have several different questions:

Different Questions Require
Different Infrastructure Measures

The first question can be answered from the ACFR. The second requires information about the physical condition of the infrastructure. The third requires a cost estimate based on what it would take to reproduce or replace the asset today. [1]  The fourth requires us to consider the timing and cost of maintenance, rehabilitation, renewal, and eventual replacement.

Keeping these questions separate prevents a surprisingly common analytical error: treating the number appearing on a city's balance sheet as though it were the amount of money required to replace the physical infrastructure.

A closer look at the accounting trend

The FY 2025 snapshot is useful, but a single year tells us less than a sequence of years. Infrastructure is not a static asset. It is continually being constructed, improved, depreciated, and retired. To understand what may be happening to the city's infrastructure base, we therefore need to look at the trend.

Petaluma's governmental infrastructure provides an instructive example. The relationship between accumulated depreciation and net depreciable assets changed substantially over the period examined. The ratio rose from approximately 0.80 in FY 2013 to 1.72 in FY 2022 before falling to approximately 1.38 in FY 2023 and remaining near that level thereafter. [5]

At first glance, this appears puzzling. How can a ratio involving accumulated depreciation rise above 1.0? The answer lies in the particular denominator being used in this analysis and in changes to the city's capital-asset classifications over time. It is a reminder that accounting ratios are not self-explanatory. Before interpreting a trend, we need to understand exactly what is being divided by what and whether the underlying accounting categories have remained comparable.

The FY 2022 peak is particularly instructive because the subsequent decline was not evidence that Petaluma's infrastructure suddenly became physically healthier. A substantial amount of construction-in-progress—approximately $38.8 million—was transferred into depreciable infrastructure. [5] Once those assets entered the depreciation schedule, the relationship between accumulated depreciation and the depreciable asset base changed.

In other words, an accounting ratio can move because the underlying physical asset base changes, not because the condition of existing infrastructure has improved or deteriorated at the same rate.

The financial records nevertheless reveal something consequential. Petaluma has a substantial infrastructure base, and the city must continually convert capital investment into maintained and renewed physical assets if it is to preserve the services those assets provide. The ACFR can help us see the financial history of that asset base. It cannot tell us whether the city is spending enough to maintain it.

For that, we need to turn from the accountant's perspective to the engineer's.

What Petaluma's streets tell us

Streets provide an unusually useful case study because Petaluma has two quite different bodies of information about them. The financial records tell us how roads and other infrastructure are represented in the city's accounts. The city's pavement-management system tells us something about the actual condition of its streets.

The latter is summarized through the PCI.

PCI is a standardized condition measure ranging from 0 to 100. A higher score indicates better pavement condition; a lower score indicates greater deterioration. Unlike depreciation, PCI is intended to describe the physical condition of pavement and to assist in determining what treatment is appropriate.

MTC's 2024 data place Petaluma's three-year average PCI at 50. The Bay Area average was 67. [4]

Petaluma and Bay Area Pavement
Condition, FY2024

The significance of that 17-point difference becomes clearer when the PCI scale is placed in its engineering context.

MTC classifies pavement with scores of 80 and above as very good or excellent, 70–79 as good, 60–69 as fair, 50–59 as at risk, 25–49 as poor, and below 25 as failed. [3] Petaluma's average of 50 therefore sits at the boundary of the at-risk category and the poor category.

More importantly, the number should not be read as though 50 means that half of the street's useful life remains. PCI is a condition index, not a percentage of remaining life.

Pavement Condition Categories
and Typical Treatment Implications

These categories help explain why a city can have a pavement score that sounds merely mediocre while facing a much more serious financial problem. The economic consequences of deterioration are not evenly distributed across the scale.

MTC identifies PCI 60 as an important threshold because pavement deterioration accelerates below it. [2]  The precise experience of any individual street will vary, but the general principle is straightforward: delaying appropriate treatment can allow a pavement to move from a condition in which relatively modest intervention is effective into one requiring much more expensive work.

This is the point at which the engineering perspective adds something that the financial statements cannot provide.

The financial records tell us that capital assets have been depreciated. The PCI data tell us that the city's pavement, on average, is already below an important condition threshold. Neither number alone tells us what Petaluma should spend. Together, however, they make visible two different dimensions of the same problem: the city has an aging physical asset base, and at least one major component of that asset base is exhibiting measurable physical deterioration.

That is a much stronger statement than saying that "57 percent of Petaluma's infrastructure is worn out." The latter is not what the accounting data tell us.

The street data also allow us to look backward.

Petaluma's pavement condition remained in the mid-40s for much of the period before the recent improvement. [4]  In 2019, the city described its roads as the worst in the Bay Area. Its own later documents attribute the condition in part to a historic lack of investment and deferred maintenance. [5]

The subsequent numbers tell a different story.

Petaluma Pavement Condition
Compared with the Bay Area, 2015–2024

The pattern is notable. Petaluma's pavement condition was essentially flat or slowly deteriorating through 2022. It then improved substantially in the following two years.

That improvement coincides with a significant increase in investment in streets, including funding made possible by Measure U. The data therefore support an important observation: Petaluma has demonstrated that increased investment can produce measurable improvement in its pavement condition.

But that observation should not be stretched into a conclusion about whether the current level of spending is adequate. That is a different question, and answering it requires us to examine the relationship among condition, treatment, cost, and the size of the network.

That is where the financial question becomes more interesting.

From condition to cost

Knowing that Petaluma's average PCI is 50 tells us something about the condition. It does not tell us what it would cost to restore the streets to a particular condition, nor does it tell us what level of annual spending is necessary to prevent further deterioration.

Those questions require a pavement-management model.

Petaluma's five-year paving plan, adopted in November 2024, provides some of the information needed to make that connection. The city's StreetSaver analysis modeled several different spending levels and their expected effects on pavement condition. [6]

The results illustrate an important principle: the amount required to maintain a network is different from the amount required to improve it, which is different again from the amount required to restore it to a substantially higher condition. [8]

StreetSaver Spending Scenarios and
Projected Pavement Condition

These are modeling scenarios, not forecasts of what Petaluma will actually spend or achieve. They also use a different PCI convention from the city's adopted five-year plan, which expresses its target using a three-year average. That distinction matters when comparing the numbers.

The city's adopted plan provides a more immediate measure of what Petaluma has actually chosen to fund. It calls for approximately $59.4 million over five years, or about $11.9 million per year, with a stated objective of moving the city's three-year average from approximately 52 to 54. [6]

The apparent discrepancy between the $11.9 million annual plan and the $20 million annual StreetSaver estimate is not necessarily an error. The figures answer somewhat different questions and rely on different assumptions about treatment costs. City staff reported that updated local bid prices led them to conclude that approximately $59 million over five years would be sufficient to maintain a PCI of 54. [6]

That disagreement is analytically useful rather than something we need to resolve prematurely. It demonstrates why a question such as "How much should Petaluma spend on its roads?" cannot be answered simply by looking at the current PCI or the accumulated depreciation in the ACFR.

We need to know what condition we are trying to maintain or achieve, how quickly we want to get there, what treatments are available, what they cost under current conditions, and how the network responds to those treatments over time.

In other words, condition must be connected to cost through an engineering model.

And there is one more number we need before we can fully understand the scale of the problem: what would it cost to replace the street network itself?

That question takes us from maintenance into replacement—and from the engineering condition of today's pavement back toward the larger fiscal question with which we began.

What we can reasonably infer

We now have two records describing the same physical city from different perspectives. The pavement-management record tells us that Petaluma's streets have been in poor condition for a prolonged period and that their measured condition has recently improved. The financial record tells us that the city has accumulated a substantial stock of infrastructure and that a considerable portion of its recorded historical cost has been consumed through depreciation.

Neither record, by itself, establishes why the city's infrastructure reached its present condition. Together, however, they provide some evidence about the history behind it.

The most defensible inference is that Petaluma has been living with a substantial stock of aging infrastructure while historically investing less in streets than would have been necessary to maintain a higher level of pavement condition. This is not simply an inference drawn from the numbers. The city's own recent paving documents describe a "historic lack of investment" and identify "lack of investment prior to 2020" as deferred maintenance.

The pavement data provide an independent indication of the consequence. Petaluma's PCI remained in the mid-40s for years, while the Bay Area average remained near 67. The city subsequently increased its street investment, and the PCI began to rise. The relationship is consistent with the straightforward proposition that infrastructure condition responds to investment, although the data do not allow us to assign a precise amount of improvement to any particular dollar spent.

Investment and depreciation are not opposites

There is another inference we can make from the financial record, but it requires more care.

Depreciation is sometimes described as though it were the financial equivalent of maintenance. It is not. Depreciation is an accounting allocation; maintenance is an expenditure that preserves or restores an asset. A city can record depreciation without spending anything to maintain the asset in that year, and it can spend substantial amounts on maintenance without changing the asset's depreciable cost in the way one might expect.

For this reason, comparing annual capital outlay with annual depreciation is useful only as an indicator of the relationship between capital consumption and capital investment. It is not a test of whether the city has "maintained" its infrastructure.

The Petaluma data nonetheless make the comparison instructive.

Capital Outlay and Depreciation:
What the Comparison Tells Us

The final qualification in each case matters. A city can spend heavily on new facilities while allowing older streets to deteriorate. Conversely, a relatively modest capital program can be directed toward replacing precisely those assets that are most urgently in need.

The Petaluma series illustrates this problem particularly well. Through FY 2020, capital outlay was below depreciation in four of seven years. After FY 2022, capital outlay exceeded depreciation in every year examined. [5]  That change is consistent with a period of increased capital investment.

But it does not, by itself, establish that Petaluma has solved its infrastructure problem. The pavement data tell us otherwise: even after the recent improvement, the city's PCI remains substantially below the regional average.

The lesson is not that one dataset is right and the other is wrong. It is that capital investment and infrastructure condition are related without being interchangeable.

What happened after 2020?

The timing becomes particularly interesting when we place the pavement and financial histories beside the city's fiscal decisions.

Petaluma voters approved Measure U, a one-cent general sales tax, in November 2020. The measure subsequently became an important source of revenue for the city's street program. Measure U receipts were approximately $15.6 million in FY 2022, $15.8 million in FY 2023, and $16.2 million in FY 2025. [7]

The city's adopted five-year paving plan for FY 2025–26 through FY 2029–30 provides another useful view. It allocates approximately $59.4 million to the five-year program, or about $11.9 million per year on average. Approximately 53 percent of that program is funded from Measure U, with additional funding coming from gas taxes, utility-related funds and fees, traffic-mitigation fees, and other sources. [7]

These figures establish something important about the recent improvement in pavement condition: the city has not merely announced an intention to address its roads. It has created a substantial funding stream and committed that funding to a multi-year pavement program.

They do not, however, answer the more difficult question of whether the level of investment is sufficient.

That question is where the city's own analysis becomes particularly revealing. The adopted paving plan seeks to move the city's StreetSaver three-year average from approximately 52 to 54 over five years. The earlier StreetSaver modeling presented to the council, using somewhat different PCI measures, estimated that approximately $20 million per year would be required merely to maintain a PCI of 54, while substantially greater expenditures would be required to improve the network.

The difference between those figures should not be treated as an error to be resolved by selecting whichever number better supports a conclusion. The city's staff and its consultant were working with different assumptions and cost information. Staff subsequently argued that actual Petaluma construction costs were lower than the consultant's regional assumptions and estimated that approximately $59 million over five years would be sufficient to maintain a PCI of 54.

The important information is therefore not simply "$59 million" or "$20 million." It is that the amount required depends upon the condition we want to maintain, the condition we want to achieve, and the assumptions used to estimate the cost of getting there.

That is a much more useful way to understand an infrastructure budget than asking whether a particular dollar figure is large or small.

What remains unknown

At this point it is useful to draw a boundary around the conclusions.

We can say that Petaluma's pavement condition has been poor relative to the Bay Area for many years. We can say that the condition has improved since the beginning of the city's recent period of increased investment. We can say that the city itself acknowledges a history of insufficient street investment and deferred maintenance. We can identify the major sources of current pavement funding and the scale of the adopted five-year program.

We can also say that the city's financial statements show substantial accumulated depreciation in its governmental infrastructure and that the relationship between capital investment and depreciation has changed materially in recent years.

What we cannot say from these data alone is that the city has a single, precisely measurable infrastructure liability. We cannot translate accumulated depreciation directly into a repair bill. We cannot infer physical condition from book value. We cannot determine from the published material exactly what it would cost to raise Petaluma's PCI to 67. And we cannot conclude from the road data alone that a particular tax, development policy, spending level, or other policy response is the appropriate answer.

Those are different questions.

Recognizing that boundary is not a weakness in the analysis. It is what makes the analysis useful. Once the distinction between observation and inference is maintained, the reader can see both the seriousness of the information we have and the importance of the information we do not yet have.

But the exercise also reveals something else. The information needed to understand a long-term infrastructure question does not necessarily reside in a single information system.

The financial records tell us something about the city's capital assets and the history of their recorded cost. Pavement management tells us something about physical condition and treatment. The capital plan tells us what the city proposes to invest and how that investment is to be funded. Each system exists for a legitimate functional purpose, and each answers questions appropriate to that purpose.

The difficulty arises when a civic question crosses those boundaries.

What a synthesis layer might make visible

Consider a resident trying to understand a proposed infrastructure project. The resident might reasonably want to know not only what the city proposes to spend this year, but what the project means over the life of the asset. How old is the existing asset? What condition is it in? What does the proposed project address? What will remain to be maintained or replaced? What funding has been identified? And what future obligation may the project create?

The information needed to begin answering those questions may already exist. It may simply exist in different functional systems.

That does not mean those systems should be reorganized. Financial accounting has its own purposes and standards. Engineering and facilities management have their own methods. Capital planning has its own requirements. Each system should continue to produce the information needed for the function it serves.

What might be added is a synthesis layer above those systems: one that draws selected information from them and represents the relationships among that information in terms of a longer-term civic question.

The distinction is important. The synthesis would not simply collect existing numbers in one place. It would create a new representation of their relationships.

Consider a deliberately simplified example:

Illustrative Synthesis Layer:
Making the Invisible Visible

The first three columns could be populated from information already produced by the city's functional systems. The last three are different. They require assumptions about what will happen over time and relationships among information that no single underlying system necessarily records.

Those projected values therefore do not simply "come from" the accounting system, the engineering system, or the capital plan. They are created through synthesis.

That distinction is worth making explicit because it explains why a synthesized table can tell a citizen something that none of its component sources tells the citizen independently. The financial system may tell us the recorded value of an asset. Engineering may tell us its present condition. The capital plan may tell us what the city proposes to spend. But the relationship among those facts—what the proposed project may mean for the asset's longer-term financial requirement—is an additional piece of information.

The mechanism by which the synthesis is produced need not be understood by every reader for the resulting information to be useful. A citizen does not necessarily need to understand the accounting standards behind accumulated depreciation, the engineering model behind PCI, or the computational method used to project future renewal costs in order to understand what a projected funding gap means in relation to a proposed project.

What does matter is that the information be understandable and that its provenance remain visible.

A citizen should be able to distinguish information derived from financial accounting, information derived from engineering or facilities management, information derived from the capital plan, and information that represents a projection or synthesis. The assumptions underlying the projection should also be available to a reader who wants to examine them more closely.

In this sense, transparency has two dimensions. One is meaning: can a resident understand what the number says about the decision under consideration? The other is provenance: can a resident determine where the information came from and, when the number is projected or synthesized, what assumptions produced it?

The first is what makes the information useful in civic decision-making. The second makes it possible to examine and challenge the information.

This is particularly important because projections are not discoveries of facts that already exist. They are analytical constructions. When we project the future maintenance or renewal requirement of an asset, we create information that does not otherwise exist in that form. The projection can therefore be useful without being treated as a prediction of certainty.

The value lies in making the long-term consequence visible.

A resident considering a proposed project could then see something different from the conventional annual-budget presentation. The question would not be limited to whether the city has identified $Y million for the project this year. It could also show what the project is expected to address, what future maintenance or renewal remains, what funding has already been identified for that future requirement, and what remains uncertain or unfunded.

The purpose would not be to tell the resident whether the project is good or bad.  It would allow the resident to see more of the decision.

The larger infrastructure question

The streets provide a particularly clear example because pavement condition can be expressed through PCI, treatment costs can be modeled, and recent investment can be observed alongside changes in measured condition. They allow us to see the relationship among physical condition, expenditure, timing, and future requirements more clearly than many other infrastructure categories.

But streets are only one component of Petaluma's infrastructure burden.

The city also owns and operates water and wastewater systems, stormwater infrastructure, public buildings, parks, vehicles, equipment, and other assets. Each has its own physical characteristics, useful-life considerations, maintenance requirements, renewal cycles, funding sources, and accounting treatment.

The $100 million roadway figure therefore should not be understood as Petaluma's infrastructure liability. [9]  Nor should the $284.6 million historical cost of governmental infrastructure, the $162.1 million accumulated depreciation, or the $634.5 million combined historical infrastructure cost be interpreted as a current replacement bill.

Each number answers a different question.

What the analysis here has shown is something more fundamental. A city's long-term fiscal capacity depends in part upon its ability to sustain the physical assets through which it provides public services. Understanding that capacity requires information from several perspectives. Accounting can show the financial history of the asset base. Engineering can show physical condition. Capital planning can show proposed investment. Cost modeling can show possible future requirements.

None of those perspectives needs to be discarded or transformed into another. But when a civic decision has consequences that extend across all of them, the relationships among the information may need to be made visible.

That is where a synthesis layer might have its greatest value.

It would not replace the city's existing information systems. It would not make engineering information into accounting information or accounting information into engineering information. It would sit above them, selecting and relating information in response to a longer-term civic question.

And it would give residents something that an annual budget, an ACFR, a pavement-management report, or a capital plan cannot provide by itself: a way to see the consequences of a decision across time.

That is ultimately the reason for beginning with the question of long-term fiscal capacity rather than with a particular infrastructure project or funding proposal.

The issue is not simply whether a city can afford what it wants to do this year. It is whether the city can understand, and make understandable to its residents, what today's decisions mean for the physical and financial obligations that follow.

The streets give us one way to see that problem. They do not constitute the whole problem.  And the first step toward making decisions about the whole problem is not advocacy.

It is seeing the whole picture.

ENDNOTES

[1] City of Petaluma, Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2025.

This is the principal source for Petaluma's treatment of infrastructure as capital assets, its definition of infrastructure, historical-cost methodology, accumulated depreciation, useful lives, and book value. It is also the source for the FY2025 infrastructure figures used in this paper. The report explains that Petaluma uses historical records, standard unit costs, and indexed replacement-cost methods to establish estimated historical costs, and that accumulated depreciation is calculated on a straight-line basis using industry-accepted life expectancies.

[2] Metropolitan Transportation Commission, “Pavement Condition Index (PCI).”

This is the source for MTC's explanation of the Pavement Condition Index, including its 0–100 scale, its use as a measure of pavement condition, the factors affecting the index, and the StreetSaver pavement-management program.

[3] Metropolitan Transportation Commission, “Street Pavement Condition,” Vital Signs, updated February 2026.

This is the source for MTC's three-year moving-average methodology, pavement-condition categories, and regional pavement-condition context.

[4] Metropolitan Transportation Commission, Pavement Condition of Bay Area Jurisdictions 2024.

This is the source for Petaluma's reported three-year PCI scores of 44 in 2022, 48 in 2023, and 50 in 2024, as well as the Bay Area comparison and related jurisdiction-level pavement data.

[5] City of Petaluma, Annual Comprehensive Financial Reports, FY2014–FY2025.

These reports provide the historical financial data underlying the discussion of changing infrastructure values, accumulated depreciation, and capital investment. The ratios and trends discussed in this paper are the author's calculations from the City's published figures.

[6] City of Petaluma, Public Works, Five-Year Paving Plan, November 4, 2024, including staff report, presentation, and adopted plan materials.

This is the source for the adopted five-year paving program, including its approximately $59.4 million funding level, its stated objective of moving the City's three-year average PCI from approximately 52 to 54, and the City's StreetSaver analysis of alternative spending levels and projected pavement conditions.

[7] City of Petaluma, FY2025 adopted budget, Annual Comprehensive Financial Report, and Measure U financial materials.

These City records provide the Measure U revenue figures and information concerning Measure U as a source of funding for the City's street program.

[8] Metropolitan Transportation Commission, Pavement Management Program (PMP) Certification.

MTC's pavement-management requirements distinguish among scenarios such as maintaining the current PCI and increasing PCI over time. This provides methodological context for the different funding scenarios discussed in the paper.

[9] City of Petaluma, Public Works, roadway and pavement-management materials, including materials addressing identified roadway repair needs.

These materials are the source for the City's identification of more than $100 million in roadway repair needs. The figure represents the scale of identified roadway needs; it is not a single calculated infrastructure liability or the cost of achieving a specified PCI.