How can Oakland and other mid-size American cities afford to make significant investments in smart city technologies? How can they do this in a sustainable way when those very investments threaten to undermine important sources of revenue such as gas taxes, parking citations and parking meter fees?

These are important questions given the “mother of all disruptions” that is likely heading toward US cities:

“Google, Uber and Tesla are all testing cars in which powerful software, not humans, operates the vehicles. It’s not hard to foresee the danger these self-driving cars pose to automobile sales, which is one reason why General Motors last week decided to invest $500 million in San Francisco on-demand car service Lyft. Smart move, since GM officials seem to be getting ahead of what could be the mother of all disruptions. Mayors and governors should adopt GM’s forward thinking because driverless cars will inevitably drain hundreds of millions of dollars of revenue from public coffers each year. Reduced car ownership will mean fewer automobile sales to tax. But perhaps more important, cops and meter maids will write a lot fewer tickets because smart cars presumably won’t double park, change lanes without signaling or bust through the speed limit. Since cars sit empty about 95 percent of time, self-driving cars can greatly increase efficiency by constantly being in use.” (SF Chronicle, 1/10/16)

At present, there appear to be only two viable options for Oakland and other mid-size cities that are increasingly aware of the benefits of smart cities: 

  1. apply for and receive financial and technical help from the DOT and other funding and support agencies (e.g., DOT’s Smart City Challenge); or
  2. enter into a franchise agreement with a qualified private-party who builds and owns the network infrastructure and pays the city a royalty fee that can be used in turn by the city to purchase and run smart city applications over that private network (e.g. NYC’s franchise agreement with Citybridges, LLC for LinkNYC). 

ARTICLE X of The Charter of the City of Oakland gives the City the power to enter into franchise agreements.

At present, what other power does the City have that can be used or built upon in order to engineer an alternative to franchise arrangements–one that results in Oakland owning and maintaining control of its smart city infrastructure, platform, applications and data?
In 1955, Oakland voter passed a measuring adding Article XXVII to the City of Oakland Charter:

“the City of Oakland shall have power to acquire (whether by purchase, lease, eminent domain, or otherwise), construct, establish, improve, extend, maintain, operate, administer, lease and sublease off-street vehicular parking facilities, and places within the City of Oakland, including any and all public parking lots, garages, or other automotive parking facilities, in order to relieve traffic congestion and promote the welfare of the citizens and inhabitants of said City, and, for the payment of the cost thereof, to issue bonds payable from the revenues of any such off-street vehicular parking facilities and from other revenues, all as hereinafter provided in this Article. One of the prime purposes of conferring the above mentioned powers upon the City of Oakland is to aid in providing low cost off-street parking for automotive vehicles within sections or portions of the City where additional off-street parking is needed.”

Today, the City of Oakland Off-Street Parking Program includes twenty municipal parking garages and lots with over five thousand parking stalls that generate about $10 million in parking fees and taxes annually.

Today, we need to ask how a new Article modeled after Article XXVII could empower the City to finance, construct, operate, maintain and continuously improve an open network and platform capable of supporting smart city applications.

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