Moving Forward Without the Feds

The infrastructure finance cohort convening in Washington, D.C., proved that local ingenuity combined with the right partners can push projects ahead.
May 18, 2017 AT 11:00 AM
By Ron Littlefield  |  Senior Fellow
Ron Littlefield, a former mayor of Chattanooga, Tenn., is a senior fellow with the Governing Institute and its lead analyst on the City Accelerator initiative. A city planner by career, he also consults to government through Littlefield Associates.

Perhaps the greatest hope for post-election times in the United States was that we would finally see that long-awaited new resolve to address the nation's crumbling infrastructure. 

In fact, now-President Donald Trump spoke frequently and fervently during the campaign about his intentions and plans for a new trillion dollar federal investment to bring our roads, bridges, tunnels, pipes and other such necessities up to standard. Those of us engaged in the business of government know this is a task we must undertake if we expect our economy to move forward. We also know that a trillion dollars is probably not enough. However, no matter how expensive the solution, the need simply must be met. Infrastructure should never be viewed as an optional investment.

As the dust continues to settle following the most contentious election in decades, we anxiously await direction from Washington, D.C. With that in mind, it was wholly appropriate that the third convening of City Accelerator’s cohort on financing infrastructure assembled in that very city, Washington, D.C., in April 2017 to report and compare notes.

Washington, D.C., is a "good bad example" of deferred investment in infrastructure. The city's 40-year-old Metrorail system -- that many of us can recall riding back when it was shiny and new -- has now deteriorated to what can only be described as a sad state. A news report by Max Smith of WTOP radio in November 2016 points out the system requires an investment of $25 billion over the next 10 years “just for needs such as basic safety compliance, repairs, technology upgrades and projects to deal with overcrowding, according to the agency’s first solid estimates on the issue."

A more comprehensive article by Peter Harkness published on Governing’s website in May 2016 describes the entirety of the city's infrastructure situation in dismal detail. The fact that the city was built in a swamp in the first place and over the years employed what were once widely accepted civil engineering practices, such as the use of combined sewers for drainage purposes, gives it several infrastructure challenges that many other cities share. Of course, the unique quality of Washington, D.C., not shared by other cities is that it is the nation's capital -- and therefore something of a national and international showplace. 

All that being said, it was the right place to gather to talk about challenges of financing public infrastructure.

The first afternoon of the convening started off in a sprint with representatives of the four participating cities -- Pittsburgh, Saint Paul, San Francisco and (of course) Washington, D.C. -- all piled onto a bus to visit several sites that showcase how a city can use creativity and innovation to overcome seemingly impossible financial investment hurdles. The field trip set the right tone. Not many years ago, Washington, D.C., was dingy, dangerous and bankrupt. Accordingly, it was essentially written off by many observers as being a community that could establish and maintain a high quality of life for its citizens and visitors. Over the brief course of the afternoon, leaders of a variety of District initiatives dispelled any residual effect of those dark days.

The District is doing what any pragmatic community should be doing these days -- making use of what it already has -- and not waiting on help from the federal government (with which they share such a unique relationship). For instance, replacing the 11th Street Bridge was used to tap into multiple opportunities within the community. By engaging with stakeholders affected by the project, it evolved to become "more than just a transportation facility" according to our guides. Portions of the old bridge were saved and slated to become an elevated park and overlook. Through joint interactions, the project produced more than just a new bridge -- it produced a new atmosphere of trust within the community.

As the tour continued through DC's Capitol Riverfront and NoMa Business Improvement Districts, a more detailed story unfolded as to how today's development tools are being employed. Within the course of about 3 hours, we heard references to practically all the terms that a student of public and private finance might expect to encounter in a comprehensive university course. A basic level of private investment is assured through special fees and charges collected within the geographic area most impacted by development initiatives. Anchor projects such as parks and metrorail stations are financed through a combination of property donations, conventional financial sources and private contributions. Extensive use is made of loans and loan guarantees. Transit is used to leverage other investment. Parks are carefully planned and placed to bring life and vitality to the urban environment. And whenever possible, projects serve multiple purposes such as stormwater management. Of course, there is some participation by District and federal funding sources, but the important point is that such participation is not what drives these projects – they are much more local in nature. What D.C. is doing is the very definition of public-private partnerships (P3s), including these BIDs – business improvement districts.

On the second day of the convening, class was back in session. A parade of speakers outlined the state of finance and introduced a dizzying array of programs and acronyms that are in use today.  Even for those who work in it everyday, it was both encouraging and exhausting. The take-away is that there is almost certainly something already in existence that can be employed to make a worthwhile project happen -- all it takes is creativity and innovation.

When it came time for participating communities to report, the atmosphere was positive. Pittsburgh described progress on efforts to develop a reliable inventory of the city's ever-growing number of public staircases; Saint Paul outlined its plan for a reliable stormwater model; San Francisco reported on employing focus groups to help address its immense seawall problem; and Washington, D.C., stated it is utilizing private contracts to replace 75,000 street lights with lower cost LEDs (while gaining free public WiFi as part of the deal). In short, it was a "can do" moment.

Jen Mayer, Infrastructure Finance Cohort Lead for City Accelerator, brought the gathering back to earth by reminding those present that all financing options must be viewed through an equity lens that measures the effect of project financing on low-income citizens. Other speakers demonstrated some of the new technologies available to aid in communicating the complexities of infrastructure finance to any audience utilizing plans, maps and storytelling skills.

The Trump Administration may yet gain sufficient traction with Congress and other major players to obtain the financing for a trillion dollar infrastructure program, but the political reality makes "waiting" a foolish option. For those still waiting for some new grant program or other federal bailout, the clear message of the convening of the infrastructure finance cohort was this:

Stop waiting and get busy.

Be part of the campaign for civic innovation at the City Accelerator, presented by Citi Foundation.