Local governments can choose from a variety of sources to fund infrastructure projects

Cities and counties have numerous infrastructure needs, such as implementing renewable energy systems, modernizing equipment and optimizing water utilities. But local government officials are facing challenges. A recent Johnson Controls survey of more than 100 local government officials shows the three biggest infrastructure funding obstacles for government leaders are competing budget priorities (52 percent), limited access to debt financing (43 percent), and insufficient information about funding options (41 percent).

There are a number of funding vehicles that provide flexibility for those entities, says Lisa Brown, senior director, local government, sustainable infrastructure for Johnson Controls. The firm offers a portfolio of building technology, software and services. It also is a provider of OpenBlue, a suite of connected solutions. Brown notes that state and federal funding for infrastructure can come from the American Rescue Plan Act, Bipartisan Infrastructure Law and the Inflation Reduction Act legislation.

Local governments may consider non-traditional options that go beyond simply taking out a loan or upping taxes to cover upfront costs of infrastructure builds, Brown says. These can include setting up a performance contract, which is a potential alternative to bond proposals. Performance contracting is a unique form of funding through which the project is paid for by the savings generated. “As part of the contract, the responsibility and risk for infrastructure performance is transferred to Johnson Controls, freeing up local government leaders to focus on their many other community priorities,” Brown explains. Her firm can serve as an advisor from process start to finish on performance contracts.

Other financing options include public-private partnerships (P3s) and as-a-service models that uncover opportunities to further strengthen fiscal stewardship. “In these relationships Johnson Controls works closely with local government leaders to better understand each communities’ unique needs and prioritize accordingly, designing a solution, and then navigating application and reporting requirements for the selected method of funding,” Brown tells Co-op Solutions. Johnson Controls offers a range of sustainable infrastructure solutions for local governments.

The town of Lake Park, Fla., recently partnered with Johnson Controls on a performance contract for infrastructure improvements to enhance facility reliability, energy efficiency and resiliency while addressing deferred maintenance. The project upgraded seven public spaces throughout the community ranging from the town hall and the library to the Lake Park Marina and the town public works facility. Improvements included LED lighting retrofits, water conservation solutions, HVAC equipment replacements and upgraded building automation systems. Energy savings will fully fund the $1.5 million initiative. The project is expected to generate more than $2.2 million in energy, operations, maintenance and capital cost savings. The contract includes guarantees for several financial and system performance outcomes. The deal ensures the town maintains a flatlined budget with minimal impact on taxpayers.

No question, mechanical systems and other equipment in municipal facilities may need an upgrade. Brown tosses out the following impressive line item: “Currently, commercial and government buildings require $190 billion to power their energy needs annually, in part due to old, large and inefficient installed equipment.”

Brown says solutions exist today to improve outdated infrastructure, address climate change and save money in the long run. She adds that her firm’s technology offerings can help reduce energy and water consumption, emissions, waste and improve overall resiliency. “With these solutions in mind, local leaders will be well-suited to ensure their communities are places where people want to live, work and serve for years to come.” Local governments that don’t adopt needed infrastructure improvements may see an exodus of their citizens and business owners to more forward-thinking communities where infrastructure is kept up to date.

Johnson Controls is helping local governments fund smart improvements that power campus-wide building operating systems. The firm offers virtual assets that enable connecting buildings and systems with digital solutions. These tools can capture data to deliver measurable results and insights needed to improve building performance. Its OpenBlue solutions give local government leaders a better way to collect and analyze data from core building systems, either in one building or city-wide, to enable better monitoring and decision-making. The OpenBlue Net Zero Advisor is a platform designed to help building managers digitally assess carbon footprints, set emissions targets, manage emissions and track progress for reporting.

Different procurement approaches can help cities and counties update their infrastructure, Brown tells Co-op Solutions. “Innovative procurement mechanisms like performance contracting and public-private partnerships (P3) give communities the flexibility, capital and risk transfer models necessary to confidently make critical facilities updates.” She mentions another useful procurement tool: “Cooperative contracts can play a huge role in making these infrastructure goals a reality.”

OMNIA Partners offers a robust portfolio of cooperative contracts in the public procurement space. Here is a link to an OMNIA Partners Public Sector cooperative contract with Johnson Controls.

Michael Keating is senior editor for American City & County. Contact him at [email protected].