Brought to you by VANTIQ
Episode 22
Don’t Be Mr. Future!
Smart City initiatives are the local government version of enterprise Digital Transformation projects. Tony Batalla, the head of IT at Silicon Valley city San Leandro, discusses why incremental innovation is the key to driving significant outcomes with technology for cities.
Blaine
Mathieu
Chief Marketing +

Product Officer, VANTIQ
Tony
Batalla
Head of IT for the City of San Leandro

Blaine: I’m excited today to continue our series of discussions on smart cities. In case you missed it, you might want to check out our recent interview with smart cities consultant, Daniel Obodovski to help dive even deeper into that topic. Joining me today is Tony Batalla. Tony is currently head of IT at the City of San Leandro in the San Francisco Bay Area. Prior to joining the City of San Leandro in 2014, Tony had a long career in IT management and consulting as a bachelor in Information Systems and also an MBA from the UCLA Anderson School of Management.

Thanks for the time, Tony. Let’s have a good chat today.

Tony: Yeah looking forward to it! Thanks Blaine.

Blaine: Absolutely. I really get the feeling we’re in a smart city environment right now. Your white board’s full of complex notation and papers everywhere. You’re really running the city here. I could tell.

Tony: Well, the problem is if you don’t look at it every day, you forget what you’re trying to tell yourself and after a while, you can’t make any sense.

Blaine: I’m with you, man. I’m with you.

So tell me, Tony, what is your target date for when San Leandro will be a smart city?

Tony: The answer will probably disappoint you, but I don’t think there’s any switch that you just turn and then suddenly now you’re a smart city. I think it’s much more of an over-time building process. It’s kind of an evolution of cities, if you will. Once upon a time, cities put [up] stop signs and traffic signals and that just evolved to how they managed traffic. Soon, it will be adaptive; smart traffic signaling everywhere and it will just be a natural progression.

Blaine: I had a feeling that was going to be your answer.

Tony: Tomorrow!

Blaine: Tomorrow you’re going to be smart?

Tony: Yeah!

Blaine: Yes. That’s a great opener though.

Riff a little more on what the term “smart city” means to you. When you use the term or when one of your colleagues talks about smart cities and smart city initiatives, what does that symbolize to you or what does it mean?

Tony: Unfortunately, it’s one of those things where the hype cycle has far surpassed the actual real world. Part of the problem with that is that people kind of burn out on the term. Now, when I talk to colleagues that are in public works or they’re in a police department or some other city function and say, “Here’s our smart city road map.”, they kind of roll their eyes like, “Here we go with the smart city stuff.” because it’s almost abstract. It’s up here, smart city abstract stuff they get thrown at.

There’s a ton of hype, tons of attention on it, but not a lot of outcomes. I try to cut through that. I think the term still has meaning. But, in order to cut through the hype, you’ve got to go down to what really matters for their jobs and the outcomes they’re trying to achieve.

Blaine: By the way, what you just said strikes me as the mirror of what’s going on with the term digital transformation” on the business side. Everybody talks about digital transformation so much that nobody even knows what it means anymore, fundamentally. It could mean anything you want it to mean or nothing. So, a lot of eye rolling at that term as well.

Tony: I think there is a very similar [aspect]: “Smart cities are everything. They can do whatever you want.” But, we’ve done a lot of work in San Leandro to make it tangible.

Blaine: Tell us about that. If you can, give us some real-world examples of what you’ve done in San Leandro.

Tony: Sure. We just completed a fiber optic masterplan and a smart city strategy which was a years’-long strategic planning process. It’s like a consulting engagement. We worked with consultants to do it. The objective was to define for ourselves what a smart city means. It’s connected back to the city council’s goals. We start with the things the city council wants to achieve: better public safety, better partnerships with local community-based organizations and schools, better transportation, fixing roads. If you do surveys and you ask people what they care about, they care about potholes and roads, meats and potatoes of cities. So, you’ve got to connect that back to smart cities and come up with a plan that addresses that.

Blaine: How does a fiber optic master plan relate to potholes in roads and some of the other things you were talking about?

Tony: The way we framed it was we have this municipal fiber network in San Leandro that connects all of our city facilities. It connects 70 percent of our traffic signals and we’re increasingly putting more and more technology on it like public Wi-Fi, street lights that are now in the street-like network. We’ll expect even more as we look at IoT and smart parking.

The fiber network is the building block of the smart city. It’s the physical infrastructure that the smart city is layered on top of. You start with that and you start with: we’ve got this asset, but how do we manage it? Who’s in control of it? What are the procedures and processes we have to expand it, to fund it, invest in it, maintain it? Where are the areas that we see that we need to expand, where we need to continue, go after grant opportunities or finding opportunities or fund through general fund, capital improvements.

That was really the genesis for building this fiber optic masterplan. This is the core network on which all of these smart city applications will be layered. I feel like without starting with that fundamental building block, you’re just in the hype world. You’re just talking about the cool stuff and the sexy stuff, but you’re not going to be able to really drive the results because it’s not a cohesive umbrella like a unified master plan. That was the approach that I took with building it.

Blaine: That’s really interesting and makes a lot of sense. I would have thought that the fiber optic network would have had to have been built and operated by the AT&Ts or Verizons of the world. Maybe you connected into their network to run smart city operations or initiatives, but are you saying that San Leandro has built their own fiber network? Describe this in a little bit more detail.

Tony: Sure. We have a municipal network, municipal fiber networks: 21 miles of conduit and fiber optics that the city owns, operates, and maintains. We have connected, as I said, all of our facilities. We partnered with the school districts and connected all of the schools. We have public Wi-Fi expanding throughout the community, something like 2 to 3 terabytes of data are being transmitted on that free system every month now with 13,000 unique devices connecting. In a city of 90,000 people, that’s a lot of connections.

The point is yeah, we do have our own network, but it had been driven by transportation and then some broadband planning that happened in 2012. The idea with the master plan was let’s take this up a level and build this unified plan that stitches all these different functions together and looks at it through the lens of what it means to be a smart city.

I’m a huge proponent of cities defining for themselves what it means to be smart because the problems in San Leandro are going to be different than the problems in Jaipur, India, for instance. They’re going to look different so you can’t just apply one label [or think about it as] a threshold and if you go over that, you’re smart. What it means to be smart in Jaipur is different and that takes local planning.

Blaine: Yeah. That makes perfect sense.

Give us some examples of other initiatives that you are now hanging off the fiber optic network. What are some other things that are currently in place and then maybe talk about some of the upcoming ones?

Tony: After public Wi-Fi, the most recent one was a smart streetlight network. The idea was convert all the street lights – we have about 5,500 street lights in San Leandro that the city owns. Half of those are on metal poles that the city owns the pole and the other half are on wood poles which are owned by the utility company in Northern California, PG&E. The streetlights themselves, they might be off the wooden pole or we have a big metal pole that we own. Combined, it’s 5,500 lights. That’s a lot of energy it takes to run those lights.

In a traditional network, every light is just a series of lights. There’s no central control or they just have a sensor on them and they turn off and they turn on. It’s a binary system. A smart streetlight network ties all those together, as you can imagine just like a home network where all your street lights now are in a wireless mesh network and they all talk to each other and you can set policies to say, “When I come home, turn on the living room lights. When it’s dinner time, turn on the dining room lights. When it’s nighttime, turn all the lights off except my night light outside.

Now, we have that same control. Think of that citywide. You can you can dim lights in a certain section. You can have lights be bright down certain arterials or corridors. What drove that was an LED conversion that will save some 8 million dollars in energy costs over the next 15 years. That savings funded the smart street light network. In order for those street lights to work, they’re essentially an IoT network wirelessly, but then they back haul on the city fiber to a server here in City Hall. The fiber network, again, is the fundamental building block for that.

Blaine: Very interesting. Can you give us another example of a smart city initiative you’re driving?That was that was a cool one.

Tony: This one is actually a little more in the application space than in the services space. The one that I think is really key and the one that is near to my heart is around digital inclusion. This is this concept that we’re building all these new services. We’re building online services. This is our digital transformation, Blaine. The city is trying to make as many of their forms and everything accessible online so you don’t have to come to city hall and stand in a line with some paper-based thing that you printed out. We’re trying to get away from that and digitize as much of this as possible.

If you don’t have a computer at home or you don’t have Internet service because it’s too expensive or you can’t afford it, you risk getting shut out. Digital inclusion is the idea that we’re going to somehow make these services available for those that otherwise wouldn’t be served.

What we’ve done there is partner with some community-based organizations to develop: 1. A surplus computer donation. Every time we replace computers now, we donate them to a community organization that refurbishes them and then gives them away to members of the community. The other is working with some low-income housing developers and things like that, property managers to even bring in free Wi-Fi into those areas which again, will connect to our fiber network and utilize. We have gigabit internet connection. We have lots of bandwidth to give away. It’s a supply chain. Where do people need the bandwidth and how can I get it from City Hall to there? Wi-Fi and the infrastructure underneath is the way to do it, building that supply chain to give away bandwidth where you need it and working with low income housing developers is a natural way to do that.

Blaine: Really, really interesting.

I know you talk to a lot of other city CIOs and heads of IT. Would you say San Leandro is ahead of many other cities that you speak to or where are you in this transformation which never ends toward becoming a smart city, relative to maybe some of your colleagues and comparables?

Tony: I can’t say where we are. We won some awards. We’ve been recognized. We certainly are on the map. I think that’s a testament to some of the stuff we’re doing, outside people recognizing that something is happening in San Leandro. For me, I just spend a little bit more time thinking about this, the philosophical question, “what is a smart city”. I’ve spent a lot of time thinking about it trying to come up with it. I think it’s that thought about it that leads to these outcomes.

I want to give a lot of credit, because it’s not me. It’s the fact that our public works director, Debbie Pollart, is so forward thinking and so innovative. Our community development director, Tom Liao, is so collaborative and wants to bring everyone together. Our police department is super tech savvy. They’re got all kinds of technological aspirations whether it’s AI, robotics and drones, and lots of stuff like that. It’s this kind of environment that maybe we have a secret ingredient here in San Leandro, but I think it’s a willingness to be very collaborative that drives it. It can’t just be me. Ultimately, it’s got to be the city functions that have to adopt this.

Blaine: I notice you didn’t list in that list of people you are collaborating with it any politicians. What are the roles of politicians in driving or being involved in smart city initiatives? Or, are these primarily staff initiatives? In general, how do you describe the role of how politicians fit into these initiatives?

Tony: You’re going to get me in trouble, Blaine!

Blaine: Oh no! It’s just an interesting reflection of obviously, the folks you listed, you’re the doers. You’re the people that are building these systems, implementing them, and running them. But then, at the same time, there’s the political side of it, the political leadership. Explain to what degree they’re involved in these things.

Tony: Yeah and it is a shift. I did work in the private sector. I worked for a global biotech company. I had a lot of exposure to an innovative company that had massive growth. From the time they started, they had a couple hundred employees in their South San Francisco headquarters to twenty five hundred in just a couple of years, explosive growth as their drug became a blockbuster. So, I know those pressures. The public sector is different.

What I’m getting at is this idea of the political body and then the administrative staff that execute everything. Learning those roles is important and learning how to balance those. I’ll say that technology, of course, is something that politicians are very interested in. They recognize the power of it. They recognize the power both politically but also from a policy standpoint of what technology can do to drive things forward. We have some pretty tech-savvy politicians in San Leandro.

I think small cities tend to have pretty consistent politics meaning that we don’t have a lot of friction. We’re a small city and everyone tends to more or less agree on where to go. There are some issues that can be a little more controversial, but otherwise, everyone supports technology and that helps me. They all want technology solutions. They all will support them.

But, we don’t have an environment like in San Francisco where technology has almost become a bad word politically because of the housing things. I don’t know if you’re familiar with the Google buses and all that where riders are out there trying to turn over the Google bus because these guys and their eight dollar cups of coffee and all this stuff. There’s a lot of controversy. It’s almost gotten to a point where, like I said, a politician doesn’t want to talk about technology.

While here, we’re still very much pro tech, meaning that tech is still a good thing and we’re still looking to reap the benefits of the Silicon Valley economy. That support certainly helps me drive the results that I’m going after. There’s very much the political waters and then there’s the administrative staff and we try not to ever drink those waters.

Blaine: [Laughter] Makes sense. Makes Sense. So that’s the collaboration between the political side and the administrative side. What about collaboration with businesses or enterprises, so-called public private partnerships? To what degree did those play a role in smart city initiatives?

I think some of them can be invaluable when you find the right partner. There’s transactional relationships that are more traditional. You may go above and beyond the service that you deliver to me and you may be willing to really work with me on that to deliver because you have a vested interest in the outcome too. But, there’s still transactional in nature.

What makes it rise, at least in my opinion, to the level of a public private partnership is there is some form of tradeoff. So, the city is giving up something, some asset in exchange for the partner who’s going to try to monetize it. That creates a real public private partnership.

In our case, going back to our fiber network, in 2011, the city formed a public private partnership with a company called Lit San Leandro to sell broadband service and compete with AT&T. The way the city did it was, “OK you can have access to our conduit. We will not charge you a rental fee on that conduit until you become profitable.” In exchange, the selling service to businesses as an economic development tool. That’s kind of a structure of a public private partnership, in my opinion.

Now that’s another one of those terms where everybody calls their deal a public private partnership. The way I look at it is there is some sort of an exchange that happens for it to really become that. I think there are a lot of examples of public private partnerships where they’re driving the smart city solutions. I think cities can invite partners through our prostheses or through some natural exchange. I know San Jose, for instance, waives their insurance fees if you do a demonstration. If you come in, and you do a pilot they will waive their insurance requirements to make it easier for you to come work in a city.

There are ways to create those partnerships. The STiR program startup in residences is another great example of that. That was started in San Francisco and they spun that off into a nonprofit called City Innovate. We participated in it in 2016-17. But now, it’s nationwide. They have something like 35 or 40 cities participating this year. The idea is startups come in, cities develop a challenge, invite startups to come in, they get matched, they engage for 16 weeks to develop a solution and there’s no financial transaction. There’s no risk to the city. It’s only at the end after the solution is developed that the cities say, “OK yes. We want to go into a contract or we don’t.” They negotiate that individually.

The idea is incentivize the private sector to come in because you’ve got this huge market. You’ve probably seen the forecast, smart cities could be trillion just in the United States alone. Between the federal government, state government, and local government, we spend almost 200 billion dollars on IT every year. That’s a huge market to crack into. You can use that to incentivize the private sector to come in and kind of shift some of the risk.

Ultimately, we don’t want to take taxpayer money and invest it in a lot of “innovation” that may or may not deliver results. That could blow up in your face. The last thing you want to be is on the front page of the newspaper with your multibillion, multimillion dollar innovation program that didn’t do anything. One of the things that cities can do is to shift that risk to their private sector partners. I think that raises to the level of public private partnership. When the private sector is willing to accept some of the risk in exchange for either cracking into the market, developing a new service that they can then turn around and sell to all the nearby cities, or perhaps monetize an asset that the city itself is not in a position to, I think they can be extremely powerful, but they’re not all the same. It takes creating a really good partnership.

Blaine: It’s more than a vendor giving the city a discount on the services. It’s really about maybe potentially creating a new model for how they could work together.

Tony: Yes. Absolutely. And then the city being willing to go beyond the traditional transaction as well. Put staff in there that will test it and beta test it and provide feedback, stuff like that. That’s where you start to see this raising to the level of a true partnership. The market is so nascent. It’s so new that those opportunities are there and we have the next probably three, four, or five years where partners between cities and private sector can create new markets through these types of innovative relationships and then spawn those and take a big slice of the pie.

Blaine: Really, really interesting. Cities are probably known as being the most agile level of government compared to state and then federal governments where people talk incessantly about how they’re not the most efficient or agile.

Having said that, I’m sure there are some ways for even cities to increase their agility, their ability to keep up with all these technology changes, these evolving models. Any thoughts on how cities can stay or become more agile?

Tony: By nature, people will point to procurement and say, “Procurement is really hard.” They have a mandate. People in procurement are there to protect public funding from corruption, profligate spending, and all the other stuff. So, they have all these rules in place in order to try to achieve that. It’s important to understand that before you just bag on procurement. You need to understand why they have those procedures in the first place.

Once you understand it, once you know why they are doing what they’re doing, then you can start to maybe innovate a little bit. Do we need to have the same level insurance requirements on all of our projects, whether it’s a 5 million dollar road improvement project or it’s a 5000 dollar IT software? Do we need to apply the same level of scrutiny on the insurance? Maybe not. Can we have a streamlined process for things that are under a certain threshold like an auto approval? You first have to understand why they have those rules in place in order to do that.

I think cities are able to get there a little faster because we tend to be a little smaller. You have several big cities, most cities, 80 percent of cities, are less than 200,000 people. As a result, it’s easier to just go across the hall and talk to whoever is in finance and maybe work out with them something and build that internal trust. It takes somebody saying, “This is important to me. This is a priority for me. I’m going to build these relationships and trust and have the goodwill of all my colleagues in order to have them work with me on this.”

Part of the role of IT is we’re more and more doing this external stuff, smart city stuff, but our core is still internal service. If we’re not delivering, if we’re not fixing your computer when it is broken, not making sure that e-mail is always up and your network connection is fast, you feel secure you can log in to your computer and it doesn’t take an hour for you to get in because of all of our scripts that are running in the background… If all that’s taken care of and you’ve got a high satisfaction level, then you build the credibility with your partners because they know you deliver.

When you go home and say, “Hey, can we look at the procurement process. I’ve got some ideas.” They say, “Oh yeah! Sure. What’s on your mind”. In my experience, it can happen in a small organization easier than when you get to a place where you’ve got a lot of inertia. I couldn’t imagine trying to go into a county, for instance, which is a large bureaucracy, and try to do it as quickly as we did here. That’s not to say you couldn’t. I know John Walton and several county leaders that are doing it, but I think it’s a more intense process.

Blaine: Yep makes a lot of sense. Thank you. I think that’s really insightful.

So this is sort of my favorite part of the conversation where I ask the guest if there is an area of conventional wisdom where you’d like to call bullshit on what people are thinking; you think most folks are thinking X and you actually think Y, any area where you buck conventional wisdom in smart cities, technology, or any of those areas.

Tony: I think the one – and I’ve written about this and I certainly am an advocate for – is that incremental innovation is OK. Everyone chases breakthrough innovation and talks about these transformations and how everything is going to change and it’s going to be all these – What they are talking about is the promise of technology, but not necessarily the technology and the nuts and bolts itself. They are talking about the promise of it.

I try not to get into that area because, again, it goes back to this abstract layer where we’re now, you’re just Mr. future. You’re just Mr. Hype. That’s a dangerous place to be if you want to actually get things done. The bullshit I would call is this idea that the only innovation that matters is breakthrough innovation or that it’s not really innovation if it’s not somehow transformative.

I’m more of an advocate of incremental innovation and improvements; making a small change, making lots and lots of small changes everywhere you can, every opportunity you can. Bring everyone in and listen to all these ideas and make all these little small changes. My belief is that over time, that adds up to a breakthrough. Suddenly, we’re a pretty innovative, agile city. Well, it took years of all these little small improvements and everybody feeling like, “Hey man, I could tweak my process just a little bit and make it a little better and it worked and they listened to me.” Over time, you become an innovative organization. My belief is incremental innovation is just as important if not more for the outcomes than chasing after the breakthrough innovation.

Blaine: Very, very interesting. That’s a great thought.

Any smart city related predictions for 2019? What do you think is going to develop in 2019?

Tony: I think we’ll see more adoption. That’s kind of where the gap is you don’t have a lot of adoption right now. There’s a lot of technology out there. There’s a lot of solutions. There’s a lot of vendors that have things they’re ready to sell, [laughter] but there are not a lot of adoption of those. I think in 2019, we’ll start to see more adoption because it’s only a matter of time before the cream starts to rise to the top.

By that, I mean all this stuff is happening. all These cities that are experimenting with ideas. Some of them are going to hit. They’re going to take off. They’re going to get writeups. People are going to take notice of them. They’re going to say, “Oh did you hear about what X Y Z city did to fill potholes now? They’ve got a robot to fill their potholes. We need it we need to get on that.” Then, you’ll start to see that adoption. I just think it’s a slower process maybe than people expected, but it will happen. I think it is just a matter of time.

In 2019, I think you’ll see more adoption. You’ll see more solutions start to really resonate. By 2020, you’ll start to really see that shift happening.

Blaine: That’s the inflection point.

Tony: I think we’re coming up on it. We’re cities. We’re still slow. We’re not that fast. But, I do think that there are very viable solutions out there that will start to rise to the top.

Blaine: Yep. Very cool. Well, you’ve talked about some of them in the last ten minutes, but any final thoughts on key takeaways or tips for a city leader that’s trying to drive the transformation of their city toward becoming a smart city?

Tony: My main things are to focus on outcomes. Look for partnerships across all sectors so other cities, counties, special districts, academics as well as the private sector. Try to learn from each other and collaborate. One of the things I haven’t touched on but I think is going to be so much more important in smart city planning is regional collaboration: working across jurisdictions to look at problems regionally.

One of the things cities, at least I have not seen, is they’re not very good about recognizing their collective buying power. So, city X goes off and buys a finance system. City Y goes off and buys a financial system. They might all end up with the same one, but they all go through their own procurement process and pay their own prices and have their own installations and implementations. When you look at that, you’ll say the immediate thing is, “Why don’t you guys all pool together and do one big procurement and use your buying power, shift some of the power to your end?”

As we start to see more smart city solutions emerge, I think there will be a lot more regionality in those solutions than there is currently. Right now, my city is a silo and the city next to it has their own IT. I think you’ll start to see a flattening of cities working together. Look for regional solutions, look for partnerships, and focus on outcomes. Forget about the hype and just think about the [incremental improvements]. It may not sound sexy to fix potholes, but if you figure that out, you’ll take off.

Blaine: I like the robot fixing potholes that you mentioned. We’ve got to get that thing spun up.

Tony: [Laughter] I just made that one up. Let’s go get a patent.

Blaine: Let’s go do it! Well, that was great. Tony, I think that wraps it up for us. Thanks so much for joining us today, a really insightful conversation.

Tony: Thanks for the opportunity Blaine! I really appreciate it. I’m glad to contribute whatever I can.

Blaine: Absolutely. Those interested in hearing more of Tony’s thoughts can follow him on LinkedIn and also on Twitter @_tbatalla. And of course, you can reach out to me anytime at [email protected]

Tony: Thanks, Blaine!

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