VERGE City Summit: 8 secrets to public-private partnerships

Cties and businesses are coming together to build resilient communities across the country,

When it comes to promoting resilience in communities nationwide, cities and businesses are coming together to innovate, scale solutions and get things done. By viewing nature as an investment rather than a liability, local leaders are able to sidestep much of the political deadlock that prevents federal-level resilience policy measures from materializing.

Building upon the lessons from last year’s inaugural VERGE City Summit, the event brought together leaders from business and local government to discuss how cities can take “talk to walk” and scale resilience projects across the country.

To fund resilience projects, cities are unlocking and accessing new sources of capital. To measure and define resilient infrastructure, cities are developing new standards and metrics. To advance these projects, cities are learning to work more collaboratively among finance, sustainability, building and operations departments.

Challenges remain, such as selling resilience projects both to higher-ups and citizens, as well as moving beyond treating resilience projects as a series of one-offs toward a more comprehensive portfolio. Likewise, the proliferation of public-private partnerships to advance city-level resilience solutions offers its own opportunities and challenges.

The City Summit was a closed working session to enable participants to speak freely. Here are eight prime points that summarize their discussion:

Start with a clear definition of resilience and how to measure it

Despite what some might think, resilience is not "the new sustainability," and it’s not just about climate change. Although sustainability lays the foundation for resilience, the latter is a multifaceted issue with no simple definition.

Some might say resilience is the ability to take a punch and come back swinging, while others would call it “the capacity to survive, adapt, and thrive in the face of chronic stresses and acute shocks, and even transform when conditions require it.” A report by the Community & Regional Resilience Institute, for example, cites nearly 50 separate definitions of resilience.

Measuring resilience qualitatively often focuses on the "Four Rs:" Robustness, Redundancy, Resourcefulness and Rapidity. Peformance indicators include minimal human vulnerability; reduced physical exposure and vulnerability; reliable communications and mobility; and integrated development planning.

Cities should think like startups

Many of today’s cities lack the resources they once enjoyed, which means they should start thinking like scrappy startups. By operating like a business, cities can use sustainability and resilience projects to differentiate themselves and retain valuable businesses, jobs and tax dollars.

While budgets may be limited, state and federal money is available to help support resilience initiatives. Due to the unwieldy nature of state and federal funding, however, cities might rather pursue private financing for smaller-scale projects, such as installing solar panels on homes and installing fiberoptic cables.

Technology is a people problem for cities

Technology advances quickly and cities move slowly, which poses a problem for municipalities trying to take advantage of the latest and greatest sustainability tools.

Digital technologies can be integrated into city operations to optimize resource efficiency and strengthen resilient infrastructure, but operational silos often prevent them from ever being used. One way to break down silos and shore up support within bureaucracies is to make the case that the cost of doing nothing is higher than the cost of doing something.

Partnering with startups to employ cutting-edge technology also can prove difficult, due to the long time horizons of cities and the short shelf life of young companies. Cities could get around this by raising the dollar amount needed for RFPs.

It's also a story about creating value, not just sustainability

Many sustainability and resilience projects can be sold as money-saving ventures — both in terms of direct financial savings from efficiency and averted disaster costs. The best way to create this kind of value in a city is by defining sustainability and resilience challenges in the broadest possible terms, and creating solutions that multiply benefits.

One city in a region characterized by cheap, dirty energy, for example, sold an energy-efficiency initiative as a form of economic development — that is, by making it cheaper for businesses to operate in the city, more would want to move there.

But it’s important to note that projects might not always result in direct financial savings — in which case resilience might be framed as a policy win instead.

Historically, massive investments have occurred under three circumstances: During times of emergency such as World War II, to promote stealth such as during the Cold War, and when an effective national narrative inspires it. It's up to city and business sustainability leaders to craft the stories to convey the need to act now to benefit everyone in the long term.

Cities should get creative to finance resilience projects

Because generating sufficient revenues to pay for resilient infrastructure can be challenging, cities should resort to “value arbitrage” to look for significant private gains from public infrastructure, and share part of that value. Finding co-benefits across many city departments also can help free up critical budgetary resources. More importantly, cities can transition from focusing cost recovery from resilience projects to shared value creation.

Fortunately, many profit-driven private financiers are interested in financing city projects, and there is a plethora of capital waiting to enter the resilience space. Investing in low-carbon cities, for example, is a $17 trillion opportunity, according to a recent report from the New Climate Economy.

Green bonds are emerging as an effective new mechanism for financing resilience projects. Although no different than conventional bonds, green bonds typically pass third-party verification to show they will finance eco-friendly projects. What constitutes a green bond currently is in flux, however, which could be stifling the market. However, tere has been exponential growth in these markets in recent years.

Transparency can accelerate private-public partnerships

The concept of public-private partnerships isn’t new, but is often misunderstood. This is particularly true in the business community, where there are preexisting notions of what government should do — and what it should stay out of.

Before engaging in such partnerships, cities and businesses should make sure they are clear about what they are getting into — and agree on roles and expectations. Public-private partnerships work best when everyone collaborates to understand the problem, and acts accordingly.

Developing effective governance for public-private partnerships hinges on transparency and flexibility. It’s important for these partnerships to have a 360-degree review process, as well as a built-in exit ramp in case policy changes.

Interagency collaboration streamlines resilience

City agencies may feel they have disparate or even competing goals, but effective cities know how to unite them under a single resilience banner. In order to achieve this, city sustainability leaders need to show that resilience projects have a value-add, and develop a shared vision with different departments. When different groups collaborate, this often results in better resilience projects with more widespread support. If city budgets are tied to sustainability goals, then all departments gain an incentive to work together to succeed.

Cities should act now with an eye on the future

In 10 years, the business and political landscape may change in ways we can't even hope to comprehend today. Big Data likely will continue to improve the way we learn about and act on sustainability and resilience opportunities, and certainly will change the way cities absorb shocks, climate-driven or otherwise.

Digital technologies will put the power of Big Data in everyone's hands, which may help build a "global FitBit" that allows everyone to constantly monitor their personal environmental footprints. Building codes may also evolve to be more responsive, as well as considering weather shift data.

If today's forward-looking cities and businesses continue the course, in 10 years there may be no more need for the "S" word of sustainability; the new business-as-usual will be all that we need to secure a sustainable and resilient future.

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