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Making Cities Work for Everyone
Adopting a new mindset
By putting greater pressure on infrastructure,
urbanization requires national and city
governments to up their game. However, the
budgetary resources of many governments
are under pressure: often authorities are being
required to do vastly more with very little
increase in funding. Fortunately, because cities
are where challenges first emerge, they have the
opportunity to be first-movers when it comes to
innovation, creativity and developing solutions.
To take advantage of such innovation, cities need
to adopt a new mindset. Rather than assuming
government has all the answers, there needs to
be an acceptance that models from the public,
private and non-profit sectors which have a
role to play in creating cities that are fit for the
future. The aim must be to apply best practice —
from whatever source — so that innovation can
be put to work to meet cities’ infrastructure,
social and economic challenges.
Two crucial sources of creative thinking that
can yield results for cities are the worlds of
finance and technology. Innovative financial
tools can strengthen supply chains, streamline
cash management, and simplify payments and
collections. As a result, efficiency and resilience
can be improved, helping to lower costs and
improve service quality. The financial sector can
also be a critical source of capital for important
city projects.
Similarly, technology — and specifically
digitization — has a role to play in mitigating the
challenges faced as a result of urbanization.
Indeed, by dramatically reducing costs,
improving accessibility and transparency,
and bringing government closer to citizens,
digitization has the potential to turn many of
the challenges faced by cities into opportunities.
It can enhance citizens’ quality of life while
significantly lowering the financial burden for
government and other public sector authorities.
Harnessing the power of finance
Citi has been at the forefront of efforts to use
innovative financing and digitization to improve
cities’ prospects. Citi can play numerous roles
to help cities adapt to growth and increasing
demand for services. Using its financial
structuring skills, Citi can help cities to optimize
assets, seek cost-effective access to financing
in the wholesale markets, and use income
streams, such as the revenues from toll roads
or subways, as a flexible and inexpensive
capital source.
For example, Citi was integral in helping the City
of Detroit bring its public lighting system back
to life in 2013, when 40% of its street lights
did not work, and the ones that did work were
running on outdated and unreliable technology.
Moreover, the transformation occurred at one
of the worst periods in Detroit’s history: having
declared bankruptcy in July 2013, the City was
not paying its general obligation bonds.
The Public Lighting Authority (PLA) of Detroit
had a bold plan to turn the lights back on
and install low energy LED lights but needed
finance. Working with the State of Michigan,
the Michigan Finance Authority, the State
Treasurer’s office, and the Governor’s office,
Citi devised a financing plan that saw it commit
$60 million dollars of its own balance sheet to
the project. By demonstrating its confidence in
the plans of the PLA, Citi was able to win over
fixed income investors and ultimately $185
million was raised from the bond market.
The terms offered by Citi for its 30-year loan
were so favorable that the Public Lighting
Authority of Detroit was able to add 10,000
more lights to its original plan. Ultimately, with
Citi’s help, 65,000 cutting-edge LED lights will
be installed across the city. These new lights will
reduce the City’s energy bill to just $3 million
a year. With the continued commitment of the
PLA, Citi and others, the lights are coming back
on across Detroit, improving quality of life for
Detroit residents.
Citi is also involved in helping to make cities
better places to live by improving social mobility
and encouraging aspiration. For example, Citi
Community Development has worked with the
City and County of San Francisco on the award-
winning Kindergarten to College program. This
collaborative initiative enables all incoming
kindergarten students to receive a college
savings account and a first deposit of $50. The
program provides a much-needed jumpstart to
college savings and helps to tackle the rising
Two crucial
sources of
creative
thinking that
can yield
results for
cities are the
worlds of
finance and
technology.