Dallas: a New High Tech Smart City or a Sinkhole City?

According to several news reports, Dallas is emerging as an up-and-coming high-tech “Smart City.”

However, a recent Truth in Accounting (TIA) report grades Dallas with an F, lists it as a Sinkhole City, and calculates that if every taxpayer were to cover its $7.9 billion shortfall they would each owe $21,700.

First the good news (or is it if the city can’t pay for it?): The city is currently in its second phase of becoming more technologically advanced and accessible to individuals and companies by attempting to become a “Smart City.”

A Smart City implements a city-wide technology platform, which involves private companies working with local governments to access existing infrastructure with technological connectivity. The technological platform is vast– incorporating the collection and transmission of data for payments to assist retailers and restaurants, mobile applications for users city-wide, and cloud platforms that will securely collect, store and parcel data. The network is designed to offer services that range from free public Wi-Fi, mobile apps that find parking spots, and a water conservation and leak detection project.

Two organizations heavily involved in making Dallas a Smart City are the Dallas Innovation Alliance (DIA) and the Dallas Entrepreneurship Center (DEC). DIA is a public-private partnership dedicated to the design and execution of a multi-phased smart city strategy for Dallas. It “seeks to leverage social and technological infrastructures to accelerate sustainable economic growth, resource efficiency and improve quality of life for citizens.”

DIA’s Executive Director Jennifer Sanders describes the Smart City effort as creating a “Living Lab.” She told Inc.com, “We are building something that didn’t exist before – a Living Lab – that is very much a startup in city government.”

Dealing with permits and codes to access sidewalks, streets, lighting systems or pole attachments, is made easier through the Alliance, which acts as the middle man between a company and the city’s bureaucratic network.

The network provides a foundation for start-ups to operate, which is another advantage of Dallas becoming a Smart City. Trey Bowles, co-founder of DEC, has recruiting startups and entrepreneurs to Dallas for several years. The Smart City phase engages over 30 entrepreneurial public and private partners in the development of the Living Lab.

It also includes larger companies like Park Hub, a parking technology company, data manager EB Systems, and Entegra Technologies, which establishes cybersecurity design and infrastructure to implement Internet of Things (IoT) networks and capabilities.

With the connectivity of companies and people comes actual technological connectivity. Inc.com writes that such innovation “inspires a ripple effect throughout the community, proving that innovation is contagious.”

The partnerships, startups, and new technology, could lend to more companies and individuals investing their time in Dallas, as opposed to non-connected cities.

Here’s the reality: These groups are challenged by the city’s significant debt problems. Dallas’ financial health is the fifth worst in the nation. With #75 being the worst, and #1 being the least worst, TIA ranked Dallas #71.

Dallas earned its Sinkhole City title and F grade because it can’t pay its bills. It only has $2.1 billion in assets and owes $10 billion in bills. The report adds that Dallas government officials “continue to hide significant amounts of retirement debt from their balance sheets, despite new rules to increase financial transparency.” City officials included pension debt in their accounting but hid much of its retiree healthcare debt, which amounts to a hidden debt of $240.7 million.

The Silver Lining: Dallas, a sinkhole city, with an F grade, reveals that there is nothing smart about it. Since Dallas can’t pay its bills, perhaps entrepreneurs can teach them.

Becoming a Smart City might become a reality if city officials stop using skewed financial data and figure out a way to pay for the programs they have not funded for years. If Dallas can’t fund its runaway entitlement obligations of $7.3 billion in unfunded pension promises and $492.9 million in unfunded retiree healthcare benefits it won’t matter if people can connect to free Wi-Fi. The city will be bankrupt and retirees won’t be able to afford to live in the homes they’ve lived in for decades.

Entrepreneurs and a Living Lab might pave the way for making the city financially healthier, and Dallas officials must learn from businesses that can’t afford to operate in the red.

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