“We cannot afford merely to sit down and deplore the evils of city life as 'inevitable,' when cities are constantly growing... We must set ourselves about the task of improving them..“ –Theodore Roosevelt, The City in Modern Life (1926)
The tasks ‘have’ begun. Rapid urbanization has forced the need to improve our cities. The stress on municipal (legacy) infrastructures has reached an all-time high. Yet, most of our municipalities are operating with little-to-no budget.
Enter Public-Private Partnerships (PPPs)
This formal arrangement between a municipality or a consortium of agencies (formed to create uniformity for a particular region), private-sector companies and academic partners isn’t by any means cutting-edge strategy—however, there’s an uptick in its adoption. Considering the huge hurdle a lack of funding presents, this model allows for a smart city project to be completed sooner.
Generally, PPPs have focused on projects that are only important to the nation, usually driven by politics, and are costly. They have customarily required federal agencies to accept liability while providing a certain level of guarantee.
Comparatively, PPPs involving municipalities aren’t national news. They involve the “tasks” that Roosevelt spoke of to improve our cities, such as transportation, infrastructure, public health or energy. These tasks, which improve the citizens’ way of life include:
- Smart Street Lighting – Municipalities across the country are increasingly investing in energy-efficient street lighting to replace or improve their legacy systems. Private partners gain a share of the savings on the city's energy bill for the street lighting. In return, cities like Tampa, Fla. get improved and well-maintained street lighting concurrently creating a deterrent in high crime areas, reducing accidents and allowing for businesses to operate after sunset.
- Smart Parking – The municipality shares revenues (or in some cases, concedes the parking fees) with their private partners while off-loading the construction and maintenance costs. Simultaneously citizens enjoy the benefits of having well lit and timely indicators to available parking spots, which reduces time spent searching for parking and creates a pleasant (repeatable) experience. This model is used for hospitals and universities alike.
- Smart Buses/Stations – The private partner builds the stations/terminals to specification and outfits the buses with route optimizing software and WiFi. The private partner will recover investments via physical advertising space, a share of the parking fees and free WiFi. Free WiFi can capture priceless data that speaks to customers’ shopping patterns and habits, which assist with targeted marketing opportunities. This optimization would improve the travel experience for commuters, and provide a clean and safe place to wait for and change buses.
- Public Health – Private partners will fund expansions/developments of an entire wing of a public hospital for specialist services (i.e. cancer, dialysis, rehabilitation, etc.), and in return, the partner(s) receives an availability fee for the infrastructure. This (advanced) infrastructure enhances the patient care and experience, which is key when Medicare reimbursements are tied to patient satisfaction scores.
Unfortunately, these projects won’t capture a national audience or may barely make the local news, but they are improving city infrastructure. Ultimately, cities are (for profit) businesses, whose residents (new or native) and visitors are in essence consumers/customers. Street lighting, smart parking, public transportation and public health all share a common objective – they serve customers. And if a municipality like Frisco, Texas, is to keep up with the rapid growth, exploding needs and rising crime, all while dealing with a limited budget and lengthy grant processes, being creative and having strategic partnerships that are mutually beneficial will be imperative to funding this daunting task.