Why we should put CFOs in the infrastructure driver's seat: as stewards of public spending, chief financial officers are best positioned to help us invest effectively.

• Author: Carol, Dan
• Position: Commentary

We all know the story, or at least we think we do: The U.S. infrastructure machine is sputtering, and politicians are failing to fill up the tank with funding. But look under the hood and you will see that America's infrastructure engine needs more than just gas. It needs a total engine overhaul and a new chief mechanic: Governments chief financial officers (CFOs) need to be put in charge.

For years, we have let individual government agencies--separate departments of highways, water resources, energy and so on--drive independently while advocating for their favorite infrastructure projects. Procurement systems have favored low-cost capital bids, ignoring the long-term maintenance requirements of assets meant to last a longer lifetime. Most politicians have done little to address the unsexy challenge of deferred maintenance. Why repair a leak or two underground when one can get more press for cutting ribbon on a new project?

Sadly, this kind of thinking--where prevention is undervalued--is why we have public health disasters like Flint's water problem, a broken-down Washington, D.C., regional subway system, and our current $3 trillion-plus deferred maintenance bill.

Yet the news is not all bad. There are new efforts emerging nationally and internationally led by CFOs, state treasurers, and ministers of finance. The key concept is "performance-based infrastructure," which encourages governments to consider life-cycle asset performance rather than simply taking the low-cost bids and ignoring maintenance costs of assets that are meant to last 30 to 50 years.

This shift in thinking has been led by Canada and New Zealand, where individual agencies sponsoring infrastructure projects must first undertake an "independent infrastructure project assessment." This requires agencies to consider more efficient ways to design, finance, procure, and maintain the asset and to determine how best to manage important project risks such as the effects of climate change.

Results are encouraging. There has been a $110 billion infrastructure-project explosion in Canada in the last decade. This has led to more on-time and on-budget performance and created a new pipeline of financially viable public-private partnerships. [See GFOA's Public-Private Partnerships advisory on the dangers of P3s at www.gfoa.org.]

How would this work in the United States?

First, put local and state CFOs in charge of how we can better spend $500 billion annually, especially since 75...