Funding and Financing Smart Cities

Government leaders, citizens and business professionals across the U.S. understand that our infrastructure needs major reinvestment and modernization. As is most visibly apparent in our cities, a pressing concern is that these needs typically surpass municipal capacity to fund them, forcing city governments to carefully consider the cost benefit of pursuing a particular project or suite of projects, and new models for funding/financing infrastructure programs. Government financial officers can play a key role in enabling city reinvestment and modernization using fiscal policy, public private partnerships (PPPs), and performance-based revenue models as important levers to catalyze economically impactful capital investments that create long-term value for the city, citizens and business. Not only are the safety and security of our citizens and businesses at risk as infrastructure assets age and fall into disrepair, but so, too, are our cities' - and, ultimately, country's - broader economic well-being and global competitiveness. Undertaking a broad-based smart city reinvestment and modernization program will help reduce costs, maximize revenue potential and improve citizen well-being through deployment of cutting-edge, technologically enabled infrastructure that is more environmentally friendly and resilient.

According to the American Society of Civil Engineers' 2013 Report Card on the state of America's infrastructure conditions and needs, we are By: Steve Hamilton, MA; and Ximon Zhugetting a near-failing grade (D+), with an estimated investment of $3.6 trillion needed by 2020.1 In September 2016, former U.S. Treasury Secretary Lawrence Summers wrote: "The case for infrastructure investment has been strong for a long time, but it gets stronger with each passing year, as government borrowing costs decline and ongoing neglect raises the return on incremental spending increases."2 Summers is a leading voice of the need for major infrastructure reinvestment and modernization in the U.S., which can not only improve the quality and condition of our infrastructure, but also produce positive economic returns for society.

The country's deferred maintenance challenges coexist with disruptive technologies - automated/autonomous vehicles; ride-sharing services; cloud-based management services for improving municipal services delivery; Internet of Things (IoT); and roads, water and lighting systems with sensors embedded - which are reconfiguring how we live, work and interact with our cities. These technologies force city managers, planners, and financial and accounting managers to consider or rethink issues such as citizen data...