Smart technologies will result in substantial cost savings to cities and their residents. However, finding the initial funds needed to pay for upgrades and new technologies will be challenging, especially in the present era of reduced federal assistance to cities. Over time, however, smart cities will have opportunities to pay for themselves by generating new revenues from economic development while maximizing existing revenues from user fees, franchise fees, lease payments and other newly created opportunities for packaging and branding city assets.
To be sure, there are still occasional grant and government funding opportunities for smart cities initiatives. Very often these are for pilot projects, but some are for more permanent infrastructure. As an initial step and ongoing process, city leadership should seek to identify and exhaust all possible government grants that might relate to or support the smart city initiative. However, a broad array of other funding options also must be examined as potential resources for investment in smart infrastructure.
Utilities are a natural and indispensable partner for investment in the backbone technologies that will support the other smart technologies. A modernized power and telecommunications grid is the critical starting point, serving as the platform for the smart city. Utilities offer the benefit of a publicly reviewed rate structure plus a vested interest in a modernized multidirectional grid. So a financing mechanism is already in place.
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