By Catherine Konieczny | Federalism In Action

A new $40 million Smart City Challenge has been announced by the Department of Transportation (DOT) to fund proposals that promise more efficient and environmentally-friendly infrastructure ideas. Looking into the details, the funding favors plans that “reduce congestion, keep travelers safe, protect the environment, respond to climate change, connect underserved communities, and support economic vitality” while using ideas from a list of 12 favored technologies including urban automation (driverless vehicles), connected vehicles (automated braking to prevent collision), and sensor-based infrastructure (automated data collection on traffic flows).

DOTMany of the stipulations are expected, raw materials such as steel used in the projects must be sourced from the US, but an interesting caveat (question 25) is that the cities do not have to own and maintain the infrastructure being implemented with the $40 million. This spot is the most questionable as other parts of the challenge’s announcement detail that cities should have environments “conducive to demonstrating proposed strategies” and “committed leadership”, indicating that cities should have an invested interest in the infrastructure being built. Further, for infrastructure projects to be used by public transportation and public regulations such as signage and striping to be enforced, the local DOT must take ownership of the project after construction according to the sponsorship specifications.

The actual outcomes of that caveat and use of the $40 million will depend on the agreements drawn up between the project proposers and the DOT commissions in the winning city. But possible outcomes are:

  • city DOTs support the infrastructure plans and use the $40 million to construct new plans but are liable for maintenance there-after;
  • the $40 million is not enough to complete construction of the plan and cities must pick up the tab for the rest of construction AND maintenance there-after;
  • competent budgeting does not use all of the $40 million for construction and the remaining money is tied up in bonds to be used for maintenance but requires appropriation.

These are only some of the possible outcomes, but it is not hard to see how the costs can quickly add up for the city that “wins” the competition. In theory, these costs would be carefully accounted for at the city-level before approval of any final project but as we have seen from the current state of transportation funding that does not happen, often costs are unaccounted for or go over-budget during actual implementation.

More importantly, despite the competitions desire for involved citizens, projects like these are rarely transparent. In the proposal process details are confined to closed meetings for the sake of preventing competitors from taking ideas, but this also prevents citizens from weighing in on the development process. Even at the final approval stage when the city’s DOT commission passes final approval, meetings are not often publicly announced, are made at inconvenient times, or dockets are designed such that public commentary time is taken up by higher precedent items by the time the infrastructure plans come up.

The bottom line, while all the popular buzz words are present in grant competitions like the Smart City Challenge, there is no promise that the winning city will see the benefits those words promise. It is far more likely that when the rhetoric is over and the project winner has taken their earnings, the city will be left with the rest of the bill.

Catherine Konieczny

Catherine Konieczny

About the author: Catherine Konieczny is a millennial and graduating senior at North Carolina State University in Raleigh, NC. Her degree is in economics with a minor in political science. She joins Federalism In Action (FIA) from State Budget Solutions and before that, was a long time intern at the John Locke Foundation. At FIA her focus is fiscal policy – Financial Ready and federal aid to the states – highlighting the hidden impacts and costs of “free” federal money and federal intervention into state duties.

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