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Citi Perspectives for the Public Sector |
2014
15
Cities in North America face considerable
financial pressures. Revenues are down at
the same time that operating and capital
expenses continue to mount.
Many American cities are plagued by lingering financial challenges.
Aging infrastructures and capital-intensive projects, such as roads,
schools and telecommunications networks, put huge strains on already
stretched capital budgets.
On the operating side, funding and cash flow problems are often
compounded by outdated, unreliable and poorly integrated technology
platforms, not to mention inefficient paper-based administrative processes.
As a result, many cities are struggling to meet the needs and modern-
day expectations of the residents and businesses they serve. What’s
more, after decades of suburban growth, a shift back to urban living is
increasing the fiscal and operating challenges for a growing number of
cities. According to census data released in 2012, city centers in 27 of
the 51 largest U.S. metropolitan areas grew faster than suburbs between
July 2010 and July 2011. This trend toward city living is expected to
continue, further stressing insufficient municipal infrastructures and
inefficient operating environments.
At the same time, Federal and State assistance to cities is down due
to general budget cuts, lower tax revenues and reduced funding for
modernization projects. Municipal tax revenues are also down. Higher
unemployment, slowdowns in economic development, and reduced
property values have put pressure on local governments to hold down
taxes. In short, American cities are being asked to do much more with
fewer funds while an estimated $3.6 trillion of infrastructure investment
is needed by 2020.
Modernization Speeds
Revenue Collection
and Boosts Citizen
Satisfaction
Gary Schneider
Public Sector Group
NA Head, Corporate and
Investment Banking,
Citi