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The nations mayors are facing big needs alongside budget shortfalls: New Survey

Yahoo Finance’s Brian Sozzi and Alexis Christoforous speak with Barbara Humpton Siemens USA CEO, about the company’s new study that reveals how city mayors’ priorities have changed amid COVID-19.

Video Transcript

BRIAN SOZZI: OK. Moments ago, we heard from Newark, New Jersey mayor Ras Baraka on how the city has managed to save about $14 million during COVID-19. But a new report out this morning shows that many small city mayors aren't finding as much success during this difficult time, and their city priorities are, in fact, changing.

Joining us now to discuss that report is Siemens USA CEO Barbara Humpton. Barbara, good to see you this morning. Walk us through this report. What are some of the key findings?

BARBARA HUMPTON: Yeah, Brian, thanks for having me on. Siemens and the US Conference of Mayors joined together for a survey of mayors of cities with a population over 30,000. 124 mayors across 35 states participated. They answered this survey during the last week of August, so it's very fresh data.

And what we see is an overwhelming response that mayors view the need for the health and recovery of their communities and containing the spread of the coronavirus is critical for their economic health as well. And then, when you look at their top priorities, two-thirds of them see that there's an opportunity to invest in infrastructure, not just as a way to create jobs, but actually to really enable economic growth. They see this as both a near-term and a long-term opportunity.

ALEXIS CHRISTOFOROUS: Barbara, one of your findings here shows that nearly every mayor you spoke to, I think 98%, believe that their operating budgets are going to decline. They may want to invest in infrastructure but how are they going to find the money to invest in infrastructure?

BARBARA HUMPTON: Yeah, Alexis, it's a really great point, because everyone recognizes that they're their source of revenue is going to be declining. In fact, many cities found that they had an over-reliance on sales tax. And you just see how our buying habits have changed throughout the coronavirus.

Really, as you all pointed out this morning in a Yahoo Finance article, this is a moment when we need to mobilize capital from all sources. We know that it's going to take government investment. And we know that governments at the federal and state levels are working on this and working on how they can support cities.

But I also think this is a chance for us to focus on public-private partnership. A recent op-ed we've published, our head of Siemens Financial Services, Anthony Casciano, notes that we have a lower rate of P3's here in the US than other countries. So that's an opportunity for us to get more private money engaged in building our infrastructure.

BRIAN SOZZI: Barbara, you work really cool things at Siemens USA, a lot of smart city technology. Are governments able to pay for coal now, or are they pushing these investments off until 2021, 2022?

BARBARA HUMPTON: Yeah, there's a variety of decisions to be made here. We're looking at our response to these crises, the health, the economic, and the societal crises that we're dealing with, in a three-phase approach, the response, and we've come to their aid with immediate technologies to help in fighting the coronavirus.

There's the recovery, getting people back to work. We've been bringing in technologies that can help convert how we use buildings. And then thinking about reinvention-- how should we be doing things differently in the future? Clearly, in order to support cities and their objectives, we're going to have to get creative. And that may include addressing new business models that will make it possible for us, for instance, to bring in technology as a service. Just a way to change things up, so they're not as dependent on that capital investment.

ALEXIS CHRISTOFOROUS: Give us an idea of what the city of the future, or perhaps the not-too-distant future, is going to look like, now that we're living in this world where more and more is becoming a touchless society. People don't want to go out and touch communal things anymore.

BARBARA HUMPTON: Yeah, this is a brilliant moment for reinvention. Imagine a city in the future where our public transportation actually is clean and electric. You know how we all loved living in smog-free cities throughout the pandemic? We know that as we transform mobility to become more electric, it's going to be cleaner and healthier for all of us.

Think about the way buildings can be used, with new technologies to help us understand who's in the building and the condition of their health, as well as bringing in new technologies to help keep people separated.

And by the way, COVID won't be the only virus that we'll be dealing with. We have flu season upon us, and we have to be prepared for that next virus. So thinking about those technologies inside buildings and rethinking how we use buildings-- why do we need to gather as people?

So finally, we're finding that much more of our work can be done virtually. And that, in itself, is going to enhance the standard of living in so many places across the United States. We think it's a real boon for small and mid-sized cities, as they become hubs for people to engage in the digital economy, not having to move into the larger cities.

BRIAN SOZZI: I certainly have been thinking about it. I just bought a new touchless faucet, which I'm pretty excited to install. But we'll leave it there for now. Siemens USA CEO Barbara Humpton, good to speak with you.

BARBARA HUMPTON: Thank you.