Financing SDIs: Lessons Learned from the PAMAP Experience

February 2, 2007 By: Todd S. Bacastow, Tina Cary, Theodore R. Alter

The question of how to fund spatial data infrastructure (SDI) arises at all scales: global, national, state, tribal, and local. It is also a concern for all sectors -- public, private, academia, NGO, and nonprofit -- as leaders and policymakers contemplate the benefits and costs of SDI, now and in the future. The funding question arises first with regard to the initial investment in the infrastructure, and then again and again over time for the costs of recurring maintenance and operations, upgrades, and reinvestment.

In this article, we build on our experiences with The Pennsylvania Map (PAMAP)since its inception in 2001 to detail some of the important issues raised and lessons learned regarding the design of a sustainable, long-running funding strategy for SDI. In addition, we outline a set of questions that provide an economic framework to help policymakers understand the elements of an SDI funding strategy.

The Pennsylvania Map
PAMAP is a collaborative effort among local, state, and federal governments to serve the users of spatial data and is a designated pilot of The National Map, an initiative of the U.S. Geological Survey (USGS) (Bacastow and Cary, 2006). The National Map is conceived as the seamless digital successor to the topographic map series historically produced by USGS in collaboration with the states.

PAMAP is a statewide SDI that includes the following key data layers: buildings, elevation contours, hydrography, geodetic monuments, geographic names, orthoimagery, tax parcels, political boundaries, road centerlines, and other transportation-related data, such as airports and railroad centerlines. Both The National Map and PAMAP have the goal of building a base of geographic information that serves the needs and strengthens the decision-making capabilities of all levels of government. The intent in both cases is to make data available to the public free of charge via the Internet.

In Pennsylvania, PAMAP is viewed by many as a strategic investment in the economic, environmental, and social well-being of people and communities across the state. The expected near- and long-term benefits for citizens, entrepreneurs, planners, recreationists, scientists, businesses, governments, universities, and others are many, including the following (Bacastow and Cary, 2006; Advanced Technology Solutions, 2005; and PAGIC and PAMAGIC, 2002):

Establishment of a standardized, statewide, seamless map capable of supporting micro and macro scales of analysis for planning, assessment, and response within and across multiple sectors and issues.
Better decision making for infrastructure protection, homeland security, economic development efforts, asset management, and environmental protection.
New academic and private-sector market opportunities, such as location-based services based on accurate, standardized, and regularly maintained data.
Improved regional planning, assessment, and management of transportation, land use, watersheds, and emergency response.
Elimination of redundancy and enhanced information exchange among government agencies without sacrificing program goals and autonomy.
Lower and more stable data acquisition, mapping, maintenance, and analysis costs over time for county and state governments, due to data standardization and regular and timely updates of core data.

PAMAP is a fusion of existing efforts intended to achieve a better SDI for all participants. Counties are already building their spatial infrastructure of parcels, roads, buildings, and other layers. State and federal agencies are also building their own SDIs, with considerable overlap among the efforts. The idea of PAMAP is to coordinate these efforts and foster collaboration; the challenge is that sustainable and equitable funding is required to support the participants and provide value to all.

The return on investment (ROI) for PAMAP is expected to be substantial. One estimate puts the ROI, conservatively, at $250 million over a 10-year period, once PAMAP is operational (PAGIC and PAMAGIC). This return stems from increased governmental cost savings and efficiency, improved environmental protection and infrastructure development, better planning, and economic development that will bring new jobs and increases in personal income. Under this scenario, the initial investment to develop and implement PAMAP will be recovered within two to three years.

Sharing the Costs
Thus far, approximately $11 million has been expended in the development and operation of this multi-participant project. The Pennsylvania Department of Conservation and Natural Resources has provided the major part of the funding through a Growing Greener Grant, with additional amounts being provided by other state agencies such as the Department of Transportation, and federal agencies such as USGS and the Federal Emergency Management Agency.

Despite the vision and leadership that have nurtured PAMAP since its beginning, some participants retain a healthy skepticism about its value to their own organizations. This perspective is especially common among counties, which are being asked to freely provide data in trade for orthophotography and LIDAR (light detection and ranging) data. Achieving the goals of PAMAP depends greatly on an equitable model for financing collaborative efforts. A fundamental premise of PAMAP is that local units of government can most effectively carry out their responsibilities by sharing data and developing collaborative solutions.

Funding Challenges and Choices
In working with PAMAP over the past several years, a number of funding issues and lessons have surfaced. First, capturing the full public and private return to society from PAMAP requires a long-run funding strategy that keeps the infrastructure intact. This must encompass not only the initial investment but also the requisite reinvestment to update the core technological integrity and functioning of the infrastructure, as well as maintenance and operations costs. Without these investments, the infrastructure may not be completed, or it may deteriorate and become technologically obsolete. At the extreme, with no long-term funding strategy and no long-term funding, any initial infrastructure investment will be wasted, and benefits will not be realized.

A second factor important for financing SDIs on the scale of PAMAP is the relationship between the nature and timing of the work to be accomplished to collect data and establish the SDI, and the length of the public budgetary cycle. For example, there are optimal times of year for "flying" the state to ensure the best orthoimagery; aircraft must be scheduled and contracts let so as to accomplish this work at these optimal times. Funds must be available to support these processes, or the lead operational entity will be exposed to considerable financial risk. Public budgetary cycles, however, are typically annual, and will most likely be out of sync with the work cycle associated with SDI development. One solution is to budget for SDI development on a multi-year basis to ensure sufficient levels of funding to accomplish planned work over the long run. However, even this solution does not obviate the need to ensure budgetary and funding continuity across the multi-year funding cycles. The optimal multi-year funding cycle may be one that coincides with the total time period necessary to fully develop and establish the SDI.

Public budgeting and finance ultimately reflect political judgments about what citizens value. SDIs like PAMAP are new tools with benefits that have yet to be demonstrated, despite the enthusiasm of some scientists, planners, and government officials. The investment costs of developing and establishing SDIs are high and visible from the start, while the benefits to private individuals and to society tend to be diffuse and distributed over time. Some policymakers see SDIs as an incremental addition to ongoing work, whereas a more accurate vision is that an SDI is a unique, large, and significant public investment with potentially non-incremental impacts on economic, environmental, and social well-being.

These characteristics of SDI investment create difficulty when it comes to establishing and maintaining political support during the public budgetary process. The lesson here is the critical importance of conceptualizing and detailing a rich, comprehensive, long-run view of the public and private benefits of SDIs and to work continuously to ensure public and political support for investment in this infrastructure. There are many claimants on scarce public funds, and working to ensure that SDIs are high on the political agenda over time is central to securing funding support and realizing their societal benefits.

A fourth area of concern is the relationship between public SDI investment and private investment. An initial guiding principle of The National Map and PAMAP was to make data available to citizens free of charge. Many hold to this principle. Others suggest that SDI data will be used to create new innovations and value-added products that will be sold at a profit in the private marketplace, and that this surplus should be tapped as a source of revenue to finance SDI investment, maintenance, and operations costs. Still others point out that the opportunities for private investment and the economic and financial impacts of such investment over time have not been a serious consideration in the discussion of SDI impact and financing. In some ways, the SDI is the final product itself, while at the same time it's also an intermediate product that generates other yet-to-be-conceived final products in both the public and private sectors. Both the private and the public long-run benefits of an SDI must be considered to gain a full picture of its societal importance and potential financing options.

Finding the Financing
The challenges of financing SDIs are considerable and are both political and technical. Several recent studies (Giff and Coleman, 2002, 2002, and 2003; Groot; Rhind, 2000; Silva; and de Vries and Beerenshave addressed the economics and financing of SDIs. One of the most prominent and comprehensive is Bruce Cahan's analysis of issues, strategies, and mechanisms for financing the National Spatial Data Infrastructure (Urban Logic). This study focuses on how public and private capital can be raised, leveraged, managed, and best invested in building and sustaining SDIs and associated spatial information services or decision-support tools.

Even in light of these studies, thinking and analysis about the economics of SDIs, strategies for funding them, and particular financing mechanisms are relatively underdeveloped. In the spirit of stimulating further thinking and inviting additional discussion and commentary about the economics and financing of SDIs, we conclude with the following questions:

What are the likely societal benefits and costs associated with SDIs? Who benefits and who bears the costs?
Given the societal benefits and costs associated with SDIs, who should fund them and how should they be financed?
What is the public-sector, or government, role in funding SDIs? Is there a private-sector role? If so, what is it?
Assuming there are public- and private-sector roles in funding SDIs, will the relative importance of these roles change over time?
Assuming a public-sector role in funding, are there different roles for federal, state, and local governments? Do all levels of government have a role, or is the funding of SDIs the responsibility of a particular level(s) of government?
In the public sector, which branch of government should be primarily responsible and take precedence for making funding policy and decisions with respect to geospatial data and information systems?
What specific public- and private-sector funding strategies and financing mechanisms might be used to fund these systems over time?

References
Advanced Technology Solutions, Inc. 2005. A PAMAP Leadership Plan. 42 pp. Lancaster, PA. http://www.dcnr.state.pa.us/
topogeo/pamap/leaderfinal.pdf

Bacastow, T.S. and T. Cary. 2006. Pennsylvania Leads the Way to Making The National Map Possible. Geospatial Solutions. September 14, 2006. http://www.geospatial-solutions.com/geospatialsolutions/
article/articleDetail.jsp?id=371740

Giff, G. and D. Coleman. 2002. Funding Models for SDI Implementation: From Local to Global Proceedings of GSDI6 Conference on SDI, Budapest, Hungary Sept. 2002. http://geoinfo.uneca.org/sdiafrica/Reference/
Ref7/giff_funding%20models_gsdi6.pdf

Giff, G. and D. Coleman. 2002. Spatial Data Infrastructure Funding Models: A necessity for the success of SDIs in Emerging Countries. Proceedings of FIG XXII International Congress, Washington D.C., USA, 19-26 April 2002. http://www.fig.net/events/fig_2002/fig_2002_abs/
Ts3-4/TS3_4_giff_coleman_abs.pdf

Giff, G. and D. Coleman. 2003. Funding Models for SDIs: Are they Applicable in Emerging Nations? 9th EC GI & GIS Workshop, ESDI Serving the User, A Coruna, Spain, 25-27 June 2003. http://www.ec-gis.org/Workshops/
9ec-gis/papers/funding_giff.pdf

Groot, R. 2001. Economic Issues in the Evolution of National Geospatial Data Infrastructure. A Background Paper for the 2nd Meeting of the Committee on Development Information (CODI-2), 4-7 September 2001, Addias Ababa, Ethiopia. http://www.uneca.org/DISD/geoinfo/doc8EN(Economic%20issues%20
in%20the%20evolution%20of%20Geo-information).pdf

PAGIC and PAMAGIC. 2002. PAMAP: A Next-Generation GIS Basemap for the Commonwealth of Pennsylvania. 17 pp. Harrisburg, PA. http://www.oit.state.pa.us/
bgt/lib/bgt/pamap.pdf

Rhind, D. 2000. Funding a National Geospatial Data Infrastructure, In Geospatial Data Infrastructure Concepts, Cases and Good Practice. Pp 39-55. R. Groot and J. McLaughlin, Eds. New York: Oxford University Press.

Silva, E. 1998. Cost-Benefit Analysis for Geographic Information System: Implementation Justification (literature review) http://www.nysgis.state.ny.us/
coordinationprogram/reports/cost/index.cfm

Urban Logic, Inc. 2000. Financing the NDSI: National Spatial Data Infrastructure. 231 pp. New York. http://www.fgdc.gov/library/whitepapers-
reports/sponsored-reports/urbanlogic.pdf

deVries, W.T. and S.J.J. Beerers 2002. Economic, Financial and Capacity Aspects of National Geospatial Data Infrastructures. http://www.itc.nl/library/Papers/0006.pdf