Cities coping with phenomena like climate change and cybersecurity, often forced to fend for themselves, are empowering themselves through data mining and other smart technologies.
“On the local level, we are committed to providing services and every year it gets a little bit harder because we get less and less help from the federal government and at least in the state of Missouri, a lot less help from the state,” Kansas City, Missouri, Mayor Sly James said in an interview during the three-day Smart Cities New York urban planning conference.
“We still have to provide the same services. And as you might suspect, costs of goods and personnel go up,” James added. “So as we’re doing those things we have to be more efficient and collection of data, use of Smart Cities technologies, the way we communicate, all of things can be used to build in efficiencies and help our budgetary constraints."
Data also helps governments respond to emergencies. After Monday's severe storm in Connecticut — which included one confirmed tornado — killed two people and left thousands without power throughout the week, Gov. Dannel Malloy urged affected municipal leaders to partner with the state and collect data critical for determining whether the state can request a major disaster declaration from the federal government.
Such a move could enable the state and municipalities to receive federal aid.
"It is critical for every municipality to collect the data needed," Malloy said.
Initial reviews will include uninsured major damage to homes and businesses, and eligible costs for emergency protective measures and debris removal.
This month's Smart Cities New York, a three-day tech-and-sustainability-themed conference, included topics such as green bonds, smart grids, transit and the future workforce.
“Cities have had to deal with more and more over the past 15 years, particularly with less support from the federal and the state governments,” said Simone Brody, the executive director of What Works Cities, a Bloomberg Philanthropies initiative that partners with mayors and city leaders nationwide.
Interest has become more mainstream, said Alan Rubin, a storm financing expert and a principal in the government relations unit at law firm Blank Rome LLP in New York.
“It's no longer just an 'eco' thing,” said Rubin, known as the “Hurricane Czar” for crafting a catastrophe fund on behalf of Lehman Brothers after Hurricane Andrew struck South Florida in 1992. “It used to be ‘hair’s on fire’ recovery people. Now there’s an economy around it all. You saw new people at the conference, like developers and aviation folks."
Within the past month, the Municipal Analysts Group of New York and New York University’s Wagner Graduate School of Public Service held similar discussions about green bonds and, more widely, creative planning.
Paul Brandley, the chief financial officer of the Massachusetts Bay Transportation Authority, told MAGNY members that impact-related issuance can produce lower borrowing costs. He cited the MBTA's combined $300 million of subordinated sales tax bonds and bond anticipation notes in October.
Officials at the MBTA, which operates Greater Boston mass transit, say it represented the first tax-exempt sustainability bonds issued in the U.S. Further, the bonds were offered as the first issuance under the authority’s subordinated sales tax program. The transaction won The Bond Buyer’s 2017 Northeast Deal of the Year award.
According to Brandley, more banks participated in the sustainability bond offering than the traditional bond offering – thus reducing the authority’s borrowing costs – while the banks that participated in both offerings submitted more aggressive bids on the sustainability bonds than the traditional bonds.
“We structured this so it was almost an A-B test between the two issuances,” said Brandley. “Same starting notional, same amortization schedule, same average life, same rating, and we competitively priced the two series within minutes of one another.”
Also speaking before MAGNY, Climate Resilience Consulting president Joyce Coffee referenced a report from the World Economic Forum in Davos, Switzerland, that said four of the five biggest global risks by impact, behind weapons of mass destruction, were weather-related.
They included extreme weather events, water crises, major natural disasters and the failure to adapt to and mitigate climate change.
“For cities, this is particularly important because many of the assets under management – what cities really care most about, especially real estate and infrastructure – are at risk,” Coffee said.
Sustainability has become more encompassing, New York Mayor Bill de Blasio told an international audience in one of the Smart Cities keynote speeches.
“If we want sustainability, it’s not just environmental sustainability,” de Blasio said. “We need that. We understand there has to be economic inclusion and fairness, that you don’t have a sustainable city if it’s so economically stratified and so divided that the society doesn’t work.”
At NYU Wagner, South Bend, Indiana, Mayor Pete Buttgieg said that while television coverage of climate change typically invokes palm trees, polar bears and melting icecaps, mayors experience it close at hand.
“What climate change looks like is the flooded basement of the low-income family I’m talking to from their porch as their kids are wandering around wondering what to do the night before the first day of school,” he said. “American cities already are on the business end of climate change. You don’t have to be a vanishing Pacific island to be dealing with this right now.”
Cybersecurity is an increasing resilience component.
De Blasio included $41 million for cybersecurity alone in his $89.1 billion fiscal 2019 executive budget, which the City Council is deliberating.
This could open the door to additional federal funding, according to Rubin, given President Trump’s emphasis on domestic security.
“It’s a multiplier,” Rubin said.
In Kansas City, smart-technology initiatives have featured a new north-south streetcar line along downtown Main Street – part of what James and chief innovation officer Bob Bennett call “the 54 smartest blocks in America"; a Wi-Fi partnership with Google Fiber; and citizen-engagement programs such as KCStat and OpenData KC.
“The metamorphosis over the past 10 to 12 years has been amazing,” James said of his city.
Kansas City has another request for proposals in the works that would expand smart technologies to include an underdeveloped neighborhood east of downtown.
The Google partnership, he said, helped generate public-private partnerships. “Other companies, other entities wanted to be engaged somehow,” he said. “It brought a lot of attention.
"We had a real estate developer from Denver who came in and walked the entire streetcar route, before a streetcar was up and running, and bought four or five surface parking lots in which they’re putting up residential and mixed-use buildings. We are attracting talent to the city in various forms and fashions, whether it’s artistic talent, whether it’s design and engineering talent, whether it’s medical talent."
James urged his fellow cities to examine carefully how technology can improve situations.
“The first thing that I think every city needs to learn is before you start thinking seriously about all of the gadgetry and the technology, figure out what issues that gadgetry and technology can help you resolve,” he said.
Like de Blasio, James worries about data creating a new layer of inequality.
“We have a huge group of citizens that are not digitally connected,” he said. “One of the things we found out with Google when it came to town was how divided we were from a digital standpoint, based on basic traditional, racial lines of segregation in the city.
“And you cannot have a half of a city that’s connected and the other half not. That creates a whole different type of a gap. We’ve already got gaps in education and gaps in earnings and gaps in skill sets and gaps in preschool and all those types of things.”
The MBTA's Brandley said the authority's green bond issuance has generated non-economic benefits, including a spike in employment applications from high-end young professionals.
"To be able to recruit young, talented folks these days, you have to show you're cognizant of your social and environmental footprint," he said. "The resumes we've gotten from Harvard Business School, Harvard Kennedy School, MIT ... it's been really, really astounding."
A better understanding between the public and private sectors, especially in the procurement process, could enhance partnerships, said Emma Bassein, a vice president of strategic initiatives for Carbon Lighthouse, a San Francisco company that aims to reduce carbon emissions while increasing revenue for commercial property owners.
The company’s rare collaborations with the public sector — both in Northern California — include a building efficiency project in Morgan Hill and energy audits of an industrial park in Benicia.
“Both contracts were great projects overall, but took multiple years to execute,” she said. “There are a lot of multi-stakeholder agreements.”
Previously, Bassein coordinated energy efficiency programs targeted at large commercial and industrial customers for the New York State Energy Research and Development Authority.
“You have this RFP process and all these hoops and all this stuff and having been on the government side of it, I understand the motivation behind all of it, but I think it’s not taking into account the time value of money and understanding the level of risk,” she said. “We have this inherent belief that the current way we’re doing it, any deviation from that is risky but we don’t actually accept that what we’re doing right now is risky.
“When we’re protecting taxpayer money by delaying the installation of that solar system in Morgan Hill by two years, what we’ve done is cost the taxpayers that two years of time that they could have been saving,” she added. “You’re delaying that financial benefit.”