Four tips city managers can use to prioritize infrastructure renewal projects
Thomas Jackson is the corporate vice president of sales & major projects for Climatec LLC, a Robert BOSCH Company. Bruce Dickinson is the president of Eagle Energy Solutions, LLC.
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Balancing budget constraints is complicated. But in 2025, unpredictable inflationary pressures, federal policies, and state-mandated programs make deciding which infrastructure renewal projects to prioritize even tougher. Below are four tips to help city managers navigate these challenges effectively.
Tip #1: Update municipal lighting and HVAC systems to meet state mandates.
As of Jan. 1, California prohibits the sale and distribution of fluorescent bulbs for new or replacement lighting systems. These bulbs, which can be found in any city facility, can pose health risks and are less efficient than LED bulbs.
If you have not already started planning for this change, you should assess city facilities to identify existing fluorescent lighting and develop a transition plan to other compliant alternatives. Upgrading lighting systems now can help mitigate supply challenges, reduce energy costs, and ensure compliance with the new regulations.
Likewise, you should conduct an immediate assessment of your city’s HVAC and refrigeration systems to determine current refrigerant use, potential compliance risks, and future budget impacts for replacements. As of Jan. 1, California prohibits the sale, distribution, or introduction of bulk hydrofluorocarbons with a global warming potential of 2,200 or greater. New cooling and refrigeration equipment must meet updated global warming potential limits or be made with restricted refrigerants outside of California.
Tip #2: Stay informed about federal energy and infrastructure policy changes.
There is ongoing debate over potential amendments to the Inflation Reduction Act and the Bipartisan Infrastructure Law. Despite political discussions, most experts agree that key funding mechanisms, particularly the investment tax credits available for solar, wind, and energy storage projects, will likely remain in place. Any substantive changes to the Inflation Reduction Act would need approval by Congress. This will be challenging due to the popularity of the investments and jobs created in both red and blue states.
For federal funding, the old advice is still somewhat true: Stay knowledgeable on available funding opportunities and strategically plan infrastructure investments to maximize financial support for your city’s energy and sustainability initiatives. But, as you prepare your federal grant applications and reports, avoid using language like ”climate change” and “equity.”
Tip #3: Curb runaway utility rate increases by investing in clean energy.
Statewide utility rates have increased significantly over the past decade due to rising generation costs, increased system maintenance costs, wildfire mitigation efforts, and the addition of new renewable energy sources to meet electricity demand. In the past five years alone, electricity prices have increased by 41.6% in San Diego Gas & Electric’s territory, 73.1% in Southern California Edison’s region, and 71.3% in Pacific Gas and Electric Company’s territory.
In fact, California’s electrical rates have been running at two to three times the rate of core inflation. This may well continue into the foreseeable future. Given that utility expenses are a significant part of municipal budgets, energy efficiency upgrades, onsite renewable generation, and energy storage can offer long-term budget predictability and cost savings.
Cities should consider investing in energy-efficient infrastructure and explore renewable energy options to reduce dependency on volatile utility rates. Implementing energy efficiency and clean energy programs, leveraging low-cost funding options, and securing grants and tax credits can help mitigate utility rate increases and other budgetary pressures.
Tip #4: Hedge against continued construction inflation by expediting today.
Due to this year’s wildfires and supply chain constraints, construction inflation in California is rising. The increased demand for materials and labor will continue to drive up costs for municipal infrastructure projects. If you haven’t expedited city infrastructure projects, now is the time to do so. Requesting proposals and securing agreements early can help lock in lower prices and prevent delays caused by high demand for construction resources.
Cities in California, like San Leandro, Ontario, Clayton, Santa Clarita, Fountain Valley, and many others, have shown leadership by investing smartly in their energy infrastructure. This has significantly blunted the negative budgetary effects of spiraling utility costs. Take the opportunity to discuss these topics with your colleagues and find out how they have addressed these difficult challenges and achieved a big win for their city and the environment.