Three ways Birmingham Chose to be Bold
August 08, 2017
Failing building systems, unsafe conditions and exorbitant energy repairs were a wake-up call for the city of Birmingham, Alabama. In our previous blog post, we detailed the innovative solution the city of Birmingham developed with Trane® to upgrade its buildings. The $61.3 million project is expected to cut annual energy and operational costs by more than 30 percent.
But what we didn’t tell you, was that the city of Birmingham wanted to do more than just make energy upgrades in 125 city buildings — it also wanted to empower local and minority-owned businesses and avoid raising taxes. Now that’s a tall order.
The city of Birmingham knew that a project as expansive and far-reaching as the one it developed with Trane would touch many of its residents’ lives. But they wanted to impact those residents in more ways than just improving the public libraries, schools and community centers they used on a daily basis.
To avoid flying in companies from out of town to complete the project, the city looked locally to the small businesses that populate its own streets. As a minority-majority city, Birmingham was uniquely positioned to empower local minority-owned businesses by hiring them to help execute the energy upgrades outlined by Trane. They set a goal to have 30 percent of the locally hired contractors to be minority-owned.
Three ways to 30
The city developed a three-prong approach to meet its goal. First, it worked with Birmingham Construction Institute Authority to identify minority enterprises that could help with the project. Then, the city implemented a workforce development program to help grow new minority-owned enterprises. And finally, it used the ambitious project as an incubator to get local youth interested in business, creating internships with the Birmingham City Public Schools.
Those three initiatives worked. The city hit its 30 percent minority-owned goal, invigorating local businesses around the metro.
Bypassing tax dollars
With a decreasing metro population due to suburban flight, Birmingham officials knew that burdening residents with more taxes to fund this project would be counteractive to their goals. As they reviewed the projected energy savings provided by Trane, the administration realized that the 30 percent savings in annual energy and operational costs over the next 20 years could actually fund the project. By leveraging the savings from the energy upgrades through a performance contract, the city can use those future savings to finance the repairs.
The shining example on the hill
A forward-thinking, energy-saving development project. Sub-contracting 30 percent of work to minority-owned enterprises. Leaving tax dollars on the table. All these things position Birmingham as a leading city in terms of infrastructure revitalization, particularly for other minority-majority cities around the nation. And if you asked city officials how they achieved those goals, they’d tell you: they chose to be bold.
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