For the first time in fifty years, American cities are growing at a higher rate than the suburbs. Cities are centers of innovation, productivity, and economic growth and they fuel the modern economy. At the same time, as the financial pressures of healthcare and pension bills increase, cities across the country are struggling to fix potholes, water main breaks, dilapidated roads, and bridges.
At the recent Clinton Global Initiative America meeting, I had the pleasure of meeting with other mayors, organized labor, private sector financial experts, and other leaders to discuss the future of America’s infrastructure. To some, roads and sewers may not sound like a sexy topic, but as mayor I see them as the basic foundations to any additional economic growth.
Participating in the Infrastructure for Cities and States Working Group, our first group exercise was to think of our greatest challenges with respect to infrastructure, and then replace the word “challenge” with “opportunity.” Cities are hamstrung by the traditional method of financing infrastructure projects through general obligation bonds. These bonds are typically limited for smaller projects or those with dedicated revenue streams. With the right financing model in place, these challenges would become major opportunities for Syracuse and cities across the country to experience economic, social and community growth.
With the right financing model in place, these challenges would become major opportunities for Syracuse and cities across the country to experience economic, social, and community growth.
Syracuse faces both immediate and long-term infrastructure needs. Our hundred year old water system has experienced a 42 percent increase in water main breaks since last year. These breaks require immediate attention. The week after Syracuse University’s graduation, a water main burst on a main thoroughfare to the University and two of our major hospitals. Roads were closed, curbs and private driveways were upended, and repairs totaled more than $350,000.
And on the other end of the spectrum—Syracuse’s economy boomed when the Erie Canal was built through the city in 1820. It created jobs, transformed commerce, and opened access across New York State. However, today’s knowledge-based economy demands more than transporting goods, people, and cars—we need to transport information and ideas. Consider city-wide broadband the “modern day Erie Canal,” a channel to transport information that will increase accessibility to the rest of the world. However, at the cost of paying for our immediate needs, long-term infrastructure investments such as city-wide broadband are nearly impossible. Visual effects companies interested in opening in Syracuse were dissuaded when faced with overly expensive Internet service. City-wide broadband access is necessary to keep up with the modern economy and help level economic, social, and education inequality, yet it is an infrastructure investment that the city has no way of financing through traditional methods.
The Infrastructure Working Group dedicated much of our discussion to exploring a new financing process that runs efficiently and maintains accountability. Current public dialogue suggests Public Private Partnerships (P3’s) as the panacea for financing woes, but we have also seen the perils of P3’s when implemented in haste. Like the West Coast Infrastructure Exchange
model, governments need an entity sophisticated enough to vet the investor’s proposal and offer recommendations, and private investors need a solid commitment from governments that they will execute projects to completion, regardless of who holds office.
Hearing from other mayors and private sector leaders in my Working Group helped bring to light the many challenges and opportunities related to developing 21st century infrastructure. I look forward to finding new, effective financing models for the City of Syracuse, and continuing the discussion as to how to structure public-private partnerships that are mutually beneficial for both private investors and the public.
In June of 2014, President Clinton, Secretary Clinton, and Chelsea Clinton hosted the fourth meeting of CGI America, an annual event focused on finding solutions that promote economic recovery in the United States. For more information, visit cgiamerica.org.