Category Archives: Public/Private.Partnerships

Public Private Partnerships (P3s) in Transportation

Source: William J. Mallett, Congressional Research Service, November 2, 2017

Public private partnerships (P3s) in transportation are contractual relationships typically between a state or local government, who are the owners of most transportation infrastructure, and a private company. P3s provide a mechanism for greater private-sector participation in all phases of the development, operation, and financing of transportation projects. Although there are many different forms P3s can take, this report focuses on the two types of agreements that generate the most interest and discussion: (1) design-build-finance-operate-maintain (DBFOM); and (2) longterm lease. …

Read full report.

Trump boosts disaster aid for Puerto Rico rebuild

Source: Roberta Rampton, Reuters, November 2, 2017
 
U.S. President Donald Trump on Thursday agreed to expand the use of disaster aid to help rebuild Puerto Rico’s power grid and other infrastructure wrecked by Hurricane Maria, the White House said. In a unique agreement recognizing both the massive devastation on the island and its dire financial problems, aid from the Federal Emergency Management Agency (FEMA) for infrastructure projects will be released in a faster, more flexible way than is typical after disasters, a senior White House official told Reuters.  The plan, agreed to with Puerto Rico Governor Ricardo Rossello, will also provide for third-party advisers to estimate how much money is requires for big-ticket projects, and how it is spent – a provision aimed at protecting taxpayer dollars in what is expected to be a massive, long-term effort to rebuild the island. …

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Puerto Rico Lays Out Energy Future With Tesla, Privatization
Source: Jonathan Levin, Bloomberg, October 22, 2017

A Puerto Rican official who has been in talks with Tesla Inc. said the island is serious about transforming its energy infrastructure after it was leveled by Category 4 Hurricane Maria, despite questions about how such an overhaul would be funded.  Speaking in a telephone interview Sunday, Department of Economic Development and Commerce Secretary Manuel Laboy said Puerto Rico’s government understands its skeptics: The island’s finances are shot and its electricity system is in tatters. But he said the U.S. territory has a historic opportunity to use federal funds to modernize an aging and weak power grid.  At the core of the argument is the government’s belief that funding related to the Federal Emergency Management Agency, or FEMA, can be used to build a new system, not just repair the old one, so that it won’t be susceptible to collapse when the next storm hits. Laboy said Governor Ricardo Rossello’s government is prepared to make its case. …

Puerto Rico taps public private partnerships to boost economy
Source: Robert Slavin, Bond Buyer, October 19 2017

…The island government said Monday that it’s working on six public private partnership projects that would lead to $300 million to $400 million of investment in projects ranging from a hydroelectric dam to student housing.  Puerto Rico will seek requests for qualifications for three of the projects and it is already working with companies on the other three. If the projects go forward, they would boost an economy that has been struggling with long-term economic decline compounded by the impacts of two major hurricanes in the last two months….

Elon Musk Is Not the Hero Puerto Rico Needs
Source: Kate Aronoff, In These Times, October 11, 2017

… According to a tweet from the governor late last week, the two are now in talks about bringing renewable energy from Musk’s Tesla and SolarCity operations to the island, whose long-embattled public utility—the Puerto Rico Electric Power Authority (PREPA)—was decimated by Hurricane Maria. … On the one hand, the talks can be seen as a positive development: More than 80 percent of the island remains without power, and the storm could be a once-in-a-lifetime opportunity for Puerto Rico to get back online and become a leader in the transition away from fossil fuels. But the budding friendship between Rossello and Musk is also taking place in the context of a massive attempt to privatize Puerto Rico’s electric utility. Musk’s companies could deliver tangible improvements to Puerto Rico’s grid, but they could also prime the pump for a corporate takeover of the United States’ largest public power provider, putting decisions like who gets power and how much it costs into the hands of corporate shareholders. …

Puerto Rico Faces Restart on Financial Plan After Maria
Source: Heather Gillers and Andrew Scurria, Wall Street Journal, September 26, 2017

It took months to put together a financial overhaul plan for Puerto Rico. Now officials may have to start over following Hurricane Maria. The federal board supervising Puerto Rico’s bankruptcy plans to meet Friday and is likely to discuss possible changes to a commonwealth fiscal plan it approved in March, according to a person familiar with the matter. The conversations could affect the severity of write downs on Puerto Rico’s $73 billion in debt.

… Reconstructing Puerto Rico’s power grid may prove particularly costly because of financial difficulties at its struggling electric utility. … Congress is starting to debate how best to rebuild Prepa. Setting up a reliable power system will require expensive modernization using federal dollars. Prepa is a flashpoint in Puerto Rico’s financial crisis because power rates are a drag on family incomes and company budgets. The oversight board has said it wants to privatize power generation to lower costs and transition Prepa to a regulated utility model. Creditors are skeptical of privatization, concerned that by selling off assets Prepa would lose the revenue streams backing its debt. But raising power rates to repay creditors is politically toxic in Puerto Rico, where the cost of importing fuel from oil tankers has driven power prices higher than in any U.S. state but Hawaii. …

Puerto Rico’s bondholders worried after Hurricane Maria turns out lights
Source: Francine McKenna, MarketWatch, September 21, 2017

If Puerto Rico is without power for months after Hurricane Maria, as authorities now warn, many investors in the $9 billion of Puerto Rico’s outstanding electric utility bonds risk never seeing their money. … The plight of Prepa bondholders—Prepa is Puerto Rico’s main supplier of electricity—was grim even before Irma. … Prepa’s bonds, $9 billion worth, are revenue bonds whose funding stream is based on collecting customer fees. Even before Hurricane Maria knocked power out for good, bondholders were worried that Prepa would deliberately force some plants offline, jeopardizing the collateral, creating justification for a privatization plan that could leave current bondholders high and dry. Proponents argue that a brand new electric authority, free of debt, would be a huge boon to the Puerto Rican economy. …

Hurricane Irma Unleashes the Forces of Privatization in Puerto Rico
Source: Kate Aronoff, Angel Manuel Soto, and Averie Timm, The Intercept, September 12, 2017

For struggling governments around the world, privatizing utilities has come to be seen as a kind of get-rich-quick scheme, offering an upfront infusion of cash to underfunded municipalities. Given Prepa’s size and that of its debt — $9 billion — it has been a long-standing target for privatizers, even before Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act last year to help rein in Puerto Rico’s mounting debt crisis. The blackout following Irma just added fuel to the fire. Days before Irma hit, Rosselló emphasized that privatization is firmly on the table, telling the New York Times that Irma “can become an opportunity or another liability.” …

Irma Grazes Puerto Rico but Lays Bare an Infrastructure Problem
Source: Luis Ferré-Sadurní, New York Times, September 10, 2017

As government workers cleared roads obstructed by uprooted trees and repaired toppled electricity lines, residents of Puerto Rico felt some relief that the eye wall of Hurricane Irma had skirted the island on its recent rampage through the Caribbean.  But while the commonwealth had largely been spared the 185-mile-an-hour gusts that had flattened its smaller island neighbors, hundreds of residents still lost their homes, at least three people died and almost 70 percent of households were plunged into darkness. The storm knocked out Puerto Rico’s fragile power grid, exposing the island’s decrepit infrastructure and raising questions about its future viability amid a worsening economic crisis.

… How a commonwealth going through a decade-long recession will be able to pay for much-needed upgrades is the key question. One option is to turn to the private sector, local economists say. Private investments, Mr. Rosselló said, could be accelerated under a provision of a contentious new law called Promesa, which placed the island’s finances under the oversight of a federal board. The provision could expedite and facilitate the process for private investment in electric, highway and water projects. … But the idea of privatizing public utilities is a divisive one on the island. The electrical workers’ union fears that the government purposely let Prepa deteriorate over time to justify privatizing it. …

Puerto Rico wasn’t ready for Hurricane Irma. We couldn’t possibly be.
Source: Carla Minet, Washington Post, September 7, 2017

On the surface, Puerto Rico was as ready as it could be for Hurricane Irma. Government agencies and Gov. Ricardo Rosselló have been taking a proactive, hands-on approach. President Trump has declared a state of emergency, which will generate emergency funds from the federal government. Refugees from the northeastern corner of the island, where Irma’s Category 5 winds already reached Wednesday afternoon, were arriving in shelters. … But Irma — a storm the likes of which we haven’t seen here in decades — is heading for an island whose resources to truly prepare for an emergency are already in grave doubt. … Now Irma may be used as a new rationale for the strategy of privatizing the public service by the Fiscal Control Board, whose members have publicly declared support for selling off the utility. The agency announced that 44 percent of the population — 692,350 clients — were already without electricity service by Wednesday afternoon. …

Government labor strife is latest test for fractured Puerto Rico
Source: Nick Brown, Reuters, August 30, 2017

Puerto Rico’s already frail economy faces a fresh test this week, as the bankrupt U.S. territory’s financial overseers try to force a defiant governor to furlough public workers, the single biggest block of employees on the island. An escalating power struggle between the democratically elected Governor Ricardo Rossello and the federally appointed oversight panel culminated on Monday when the board sued Rossello, saying he had no authority to reject pension cuts and furloughs ordered by the board. The measures are set to begin Sept 1. A competing lawsuit from the American Federation of State, County and Municipal Employees (AFSCME), which represents 12,000 Puerto Rican workers, argues the exact opposite – that the measures violate the U.S. Constitution, and should be halted. At least six unions are staging protests on Wednesday to oppose the austerity, featuring a midday march to the board’s San Juan offices. … Noting a Rossello initiative to privatize some public assets, Eiler said “the unions’ cooperation is imperative” for public-private partnerships. …

Hedge Fund Sues to Have Puerto Rico’s Bankruptcy Case Thrown Out
Source: Mary Williams Walsh, New York Times, August 7, 2017

A hedge fund sued on Monday to have Puerto Rico’s bankruptcy case thrown out, arguing that the federal oversight board guiding the island’s financial affairs was unconstitutionally established.  In a lawsuit filed in United States District Court in San Juan, the hedge fund, Aurelius Capital, cited the “appointments clause” of the United States Constitution, which calls for all principal officers of the federal government to be appointed by the president, and then confirmed by the Senate.  That did not happen when the seven members of the Financial Oversight and Management Board for Puerto Rico were selected, Aurelius said in its motion to dismiss the bankruptcy-like proceedings. …

Puerto Rico Teachers’ Union-AFT Join Forces Amid Debt Woes
Source: Jaclyn Diaz, Daily Labor Report, August 4, 2017 (subscription required)

The economic devastation in Puerto Rico has pushed the American Federation of Teachers to lend a hand to the island’s educators. Asociación de Maestros de Puerto Rico will continue to represent the 40,000 plus Puerto Rican educators. It signed a three-year affiliation agreement with the 1.6 million-member AFT to help it combat the island’s economic challenges, the two unions announced Aug. 3. … AFT and AMPR will work together to fight austerity measures and privatization on the island, Randi Weingarten, AFT president, told Bloomberg BNA Aug. 4. AFT will lend resources to help AMPR train teachers for the future and to bring in legal assistance to fight the fiscal plan adopted by the Puerto Rican government, she said. …

Is Congress’ plan to save Puerto Rico working?
Source: Edwin Melendez, San Francisco Chronicle, July 31, 2017

A year ago, Congress cobbled together a plan to try to save Puerto Rico from its US$123 billion debt and pension crisis without costing American taxpayers a penny.  The law, signed by former President Barack Obama on June 30, 2016, effectively steered Puerto Rico into bankruptcy-like proceedings in federal court to prevent a massive default, while saddling the commmonwealth with an oversight board to ensure it put its fiscal house in order.  Though the vote was bipartisan, critics called it a “Band-Aid” that would do little to solve Puerto Rico’s core problems: unsustainable debt that has kept the country mired in recession for almost a dozen years. …

For Sale: Puerto Rico
Source: Heather Gillers, Wall Street Journal, June 26, 2017

Puerto Rico has no cash and can’t borrow money anymore. So it is looking to sell itself off in parts. The troubled U.S. territory is preparing to seek bids in coming months from private companies willing to operate or improve seaports, regional airports, water meters, student housing, traffic-fine collections, parking spaces and a passenger ferry, according to a government presentation reviewed by The Wall Street Journal.

The Bankers Behind Puerto Rico’s Debt Crisis
Source: Michelle Chen, The Nation, June 8, 2017

Puerto Rico’s economic crisis has now washed the burden of its colonial legacy onto Washington’s doorstep. Congress has been trying to contain the island’s ballooning debt under the hardline austerity program of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). But since the program is governed by a control board run by the same financiers responsible for driving the debt crisis in the first place, the island continues to sink into poverty while its creditors feast on the spoils.  To underscore how Puerto Rico’s revolving door of big finance and politics is underwriting the debt crisis, a report by the AFL-CIO and the community-labor coalition Committee for Better Banks (CBB) traces the career of the head of PROMESA, Carlos M. García, from his role as a head banker of Santander to his current political post overseeing the privatization and pillage of Puerto Rico’s anemic public assets.

Puerto Rico strikes second restructuring deal with bondholders
Source: Hazel Bradford, Pensions & Investments, May 15, 2017

Puerto Rico reached a restructuring agreement with bondholders invested in the commonwealth’s Government Development Bank, officials announced Monday in San Juan. … Puerto Rico’s Federal Affairs Administration said in that statement that GDB creditors “have agreed to substantial discounts to the principal,” but did not provide further details on the agreement, which calls for bondholders to exchange claims for one of three tranches of bonds issued by a new municipal entity. The new bonds will have varying principal amounts, interest rates, collateral priority, and other payment terms.  It is the second agreement reached with bondholders and Gov. Ricardo Rosello, following one announced April 6 with holders of bonds issued by the Puerto Rico Electric Power Authority. The PREPA agreement restructures $9 billion in debt by offering them 85 cents on the dollar, and giving PREPA more time to begin making payments. …

Puerto Rico board extends budget deadline by two weeks
Source: Robert Slavin, Bond Buyer, May 9, 2017 (Subscription Required)

The Puerto Rico Oversight Board extended the deadline for Puerto Rico Gov. Ricardo Rosselló to submit a fiscal year 2018 budget by two weeks.  Board chairman José Carrión III told Rosselló that the board had originally set May 8 as the deadline for either the board approving the governor’s budget or notifying the governor of violations and providing a description of corrective actions. “We have received a working draft of the proposed budget and are reviewing the submission and its completeness,” Carrión wrote Monday. “The board will provide the governor an additional 14 days to amend and improve the submission before it approves it or identifies violations.” …

Puerto Rico unveils energy PPPs amid economic turmoil
Source: David Casallas, BNamericas, May 5, 2017

Puerto Rico’s embattled government released a list of priority project proposals for this year, among them energy sector initiatives that would be carried out through public-private partnerships (PPP). The projects envision natural gas use at power utility AEE’s residual fuel oil fired-plants Costa Sur (990MW) and Palo Seco (602MW) which would cost US$150mn-265mn and US$200mn-360mn, respectively. Information from the Puerto Rico Public-Private Partnerships Authority also reveals that AEE seeks partners to develop renewable energy projects, including photovoltaic and wind, for between US$100mn and US$700mn. …

Puerto Rico Declares a Form of Bankruptcy
Source: Mary Williams Walsh, New York Times, May 3, 2017

With its creditors at its heels and its coffers depleted, Puerto Rico sought what is essentially bankruptcy relief in federal court on Wednesday, the first time in history that an American state or territory had taken the extraordinary measure.  The action sent Puerto Rico, whose approximately $123 billion in debt and pension obligations far exceeds the $18 billion bankruptcy filed by Detroit in 2013, to uncharted ground.  While the court proceedings could eventually make the island solvent for the first time in decades, the more immediate repercussions will likely be grim: Government workers will forgo pension money, public health and infrastructure projects will go wanting, and the “brain drain” the island has been suffering as professionals move to the mainland could intensify. …

Puerto Rico faces bank closure, privatizations
Source: Danica Coto, Associated Press, April 28, 2017

Puerto Ricans will be facing a water rate increase, privatization of government operations and the closure of a bank that once oversaw the island’s debt transactions, officials said Friday as they worked on measures to offset an economic crisis.  Some of the changes were outlined in new fiscal plans presented to a federal control board overseeing the island’s finances. The plans for four heavily indebted Puerto Rico agencies will be amended in upcoming weeks, although officials noted that the water rate increase will start in January and that the Government Development Bank will be liquidated within a decade.  The board recently approved an overall fiscal plan for the central government that contains several austerity measures. …

Puerto Rico pushes to privatize operation of public services
Source: Danica Coto, Associated Press, April 20, 2017

Puerto Rico is ready to sign dozens of new deals to privatize the operation of public services as government funds dwindle amid a decade-long recession, the island’s governor told some 800 investors attending a two-day financial summit Thursday.  Gov. Ricardo Rossello said public-private partnerships could create up to 100,000 new jobs and generate some $5 billion in the next three years for a U.S. territory mired in economic crisis and its government facing a $70 billion public debt load that it is struggling to restructure.

AFSCME Pres. Lee Saunders on Puerto Rico Fiscal Plan
Source: AFSCME Press Release, March 13, 2017

AFSCME Pres. Lee Saunders issued the following statement on the oversight board’s approval of a fiscal plan for Puerto Rico:  “The plan approved by the Oversight Board will have devastating consequences for the people of Puerto Rico, especially its most vulnerable citizens. The plan adopts an austerity approach that will slash services, cut pensions and create yet more economic hardship for Puerto Ricans. The winners are wealthy investors who stand to gain from the mass privatization of the services that remain. These actions are the foreseeable result of an anti-democratic law adopted by the last Congress. The people of Puerto Rico have been forgotten; we call on the federal government to act quickly to restore services and pensions.”

Board to Puerto Rico: Cut Pension System, Impose Furloughs
Source: Danica Coto, Associated Press, March 13, 2017

A federal control board on Monday said Puerto Rico’s government needs to cut its public pension system by 10 percent, furlough tens of thousands of its workers and eliminate Christmas bonuses if it cannot generate other types of savings amid a nearly decade-long recession. The seven-member board created by Congress last year to oversee the U.S. territory’s finances voted unanimously to add those measures to a 10-year fiscal plan presented by the island’s governor that the panel approved Monday. The measures will be implemented if the government fails to find other ways to cut spending and increase revenue. Board members said the spending cuts will be necessary so the government will have enough funds to pay for essential services such as education, health and public safety. … The plan drafted by the government and approved by the board also will cap some Medicaid benefits, effectively raise property taxes and scrap some infrastructure projects while possibly turning ferries, ports and parking lots over to private companies. It will freeze salaries until 2020, seeks to privatize the generation of power and increase motor vehicle license fees by 10 percent. …

Puerto Rico governor wants fewer austerity measures
Source: Danica Coto, Associated Press, March 1, 2017

Puerto Rico’s governor submitted an austerity plan made public on Wednesday that would cut deeply into the U.S. territory’s budget while avoiding some of the most painful measures recommended by a federal control board that is overseeing the island’s effort to confront a debt crisis that has led to repeated defaults. Gov. Ricardo Rossello’s plan would cap some Medicaid benefits, effectively raise property taxes and collect a tax on internet purchases. It would also scrap some infrastructure projects and could turn ferries, ports and parking lots over to private companies. But it would fall short of the board’s recommendation of a 30 percent cut in payroll costs and 10 percent reduction in the government pension system, which is on track to run out of money next year. …

White House says it’s considering increasing the federal gas tax for infrastructure

Source: Ashley Halsey III, Washington Post, October 26, 2017
 
The White House is revisiting an increase in the federal gas tax to pay for infrastructure improvements President Trump promised to deliver on the campaign trail.  That news was conveyed to House members Wednesday in a meeting by Trump’s chief economic adviser, Gary Cohn. … After campaigning on a promise he would lure private capital to invest in infrastructure, Trump in late April said he would be open to bumping up the federal gas tax, which has not seen an increase since 1993.  Some Democrats, notable among them Rep. Peter A. DeFazio (Ore.), ranking Democrat of the House Transportation Committee, have fought an upstream battle to increase the tax. …

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White House eyes 7-cent gas tax hike for infrastructure plan
Source: Melanie Zanona, The Hill, October 25, 2017
 
The White House may back the first hike in the federal gasoline tax in decades in order to pay for President Trump’s $1 trillion infrastructure package.    Trump’s economic adviser Gary Cohn told moderate House lawmakers at a private meeting on Wednesday that they’ll get a chance to vote on a gas tax hike early next year as part of an infrastructure bill, according to two lawmakers who were present. The discussion over the fuel tax during the meeting was first reported by Politico Playbook.  “Cohn seemed receptive to it,” one meeting participant told The Hill.  Separately, an industry source tells The Hill that the White House intends to back a 7-cent gas tax increase to pay for U.S. roads, bridges, highways and other public works, though it’s unclear if the proposal would be included in initial infrastructure legislation or if the administration will push to have it added at the committee level. …

Rural America looks to Trump to help with crumbling infrastructure
Source: Josh Siegel, Washington Examiner, October 16, 2017

Lawmakers and policy experts say the White House cannot forget rural America as it prepares to release the outlines of its infrastructure spending package. … The emphasis on partnerships worried proponents of rural infrastructure investment. Partnerships with private investors face tougher obstacles in rural areas, because it’s difficult for companies in places with smaller populations to generate the revenue needed to sustain the project. …

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Consultant: BRF lacks cash, experience to adequately manage hospitals

Source: KTBS, October 10, 2017
 
Biomedical Research Foundation’s lack of cash could cause the state to lose funding for free and low-cost health care at the former public hospitals the foundation operates in Shreveport and Monroe.  Documents obtained by KTBS through an open records request show state officials are concerned the hospitals could lose Medicaid funding. That federal money helps cover the cost of treating poor people without insurance at the hospitals BRF operates as University Health through a wholly-owned subsidiary.  In September, state officials put BRF on notice it had breached its contract to operate the hospitals, in part because BRF has failed to pay doctors at LSU Medical School in Shreveport for treating patients. BRF also owes the state for a lease on the hospital property. …

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$135M boost going to LSU hospital managers under new deals
Source: Melinda Deslatte, Associated Press, October 27, 2016

The private operators of LSU’s charity hospitals and clinics are in line for a $135 million boost in their payments as part of new deals struck by Gov. John Bel Edwards’ administration, and the university’s medical schools will benefit from some of the new money. State lawmakers are being asked Friday to increase financing for the privatization deals to nearly $1.3 billion in the current budget year, only four months after lawmakers were told the previous level of funding was sufficient. … The money for the hospital and clinic operators is part of a larger budget adjustment requested by the Louisiana Department of Health at Friday’s meeting of the joint House and Senate budget committee. Jeff Reynolds, chief financial officer for the health department, said $135 million is a financing increase for the private managers that have taken over LSU’s hospitals, clinics and patient services. He said the additional payments are part of the renegotiated deals recently worked out by the Edwards administration. … The renegotiated privatization deals crafted by the Edwards administration included provisions in which some of the hospitals will be paying more money for the services of LSU’s doctors who work at the hospitals. … Henry said he wanted to know why the dollars weren’t available when lawmakers were crafting the budget in June, when they were told the previous level of agreed-upon financing was sufficient for the privatization agreements. …

Negotiating over, Edwards makes offers on LSU hospital deals
Source: Melinda Deslatte, Associated Press, September 7, 2016

Gov. John Bel Edwards’ administration will make its offer Thursday to the operator of LSU’s hospitals in Shreveport and Monroe for a renegotiated contract with the state, as the governor pushes to rewrite all the LSU hospital privatization deals. Edwards’ lead negotiator on the contracts, Commissioner of Administration Jay Dardenne, said Thursday’s presentation to the Biomedical Research Foundation of Northwest Louisiana is the last offer to be made. … Dardenne wouldn’t provide details about what changes are being sought in the north Louisiana hospitals’ deal — or any others. But he said negotiations are over and hospital operators can either take or leave the reworked arrangements offered. … Former Gov. Bobby Jindal privatized nine LSU-run hospitals and their clinics through no-bid contracts, with the earliest deal starting in April 2013. In most instances, the management company of a nearby hospital took over operations. Three contracts closed an LSU hospital — in Baton Rouge, Lake Charles and Pineville — and shifted its services to private hospitals. The Edwards administration says the deals were too hastily slapped together, with terms that aren’t favorable to the state. … LSU System President F. King Alexander described the arrangement to have the foundation, known as BRF, run the Monroe and Shreveport hospitals as dysfunctional from its start in October 2013. Alexander said the research foundation, which runs the two hospitals as the University Health System, doesn’t have the resources or experience, isn’t paying bills on time and isn’t providing enough support to the LSU medical school in Shreveport. BRF and University Health leaders say Alexander’s accusations are untrue and LSU’s Shreveport medical school has financial problems of its own making. They say the research foundation’s hospital management has improved health care. …

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KC Council picks Edgemoor team for KCI terminal job

Source: Rob Roberts, Kansas City Business Journal, September 21, 2017

A joint meeting of two Kansas City Council committees voted Thursday in favor of selecting a team led by Edgemoor Infrastructure & Real Estate LLC to design, develop and arrange financing for a new airport terminal. … The committee’s decision comes after heavy lobbying and criticism by two other teams pursuing the roughly $1 billion project. … The airport ordinance calls for the city manager to begin negotiating a memorandum of understanding with Edgemoor. At the request of Councilman Jermaine Reed, it also spells out components of a community benefits agreement that must be part of the MOU, requires Edgemoor to institute a local hiring preference and requires negotiation of minority- and women-owned business and workforce participation goals that recognize “the transformative possibilities for disadvantaged businesses and workers that can result from a public infrastructure project of the magnitude of the proposed terminal modernization project.” …

Governing garbage: Advancing urban sustainability in the context of private service delivery

Source: Jacqueline Peterson and Sara Hughes, Cities, October 2017

Abstract:

City governments across North America are increasingly pursuing sustainability aims through novel policies and practices. Such efforts frequently involve changes to municipal services that are provided by the private sector. However, the implications of private service delivery for public sustainability aims are not well understood. We use the experience of Minnesota’s Twin Cities metropolitan area with organic waste recycling to examine how different types of public-private relationships in service delivery shape the ability of municipalities to pursue sustainability through organic waste recycling programs. We find that municipalities with contractual relationships with waste haulers – “organized” systems – have greater success in introducing organic waste recycling than municipalities with licensing relationships with waste haulers – “open” systems. These findings point to the importance of institutional variation in public-private relationships to the success of urban sustainability initiatives and the ability of decision makers to affect change.

Taking the P3 Route to Reinvent Downtown

Source: Charles Renner, Public Management, July 27, 2017

… The past decade has seen a steady increase in the use of P3 structures, and 2016 was something of a watershed year with multiple high-profile projects coming online that address a variety of public needs, including a $1 billion water infrastructure project servicing San Antonio, Texas, the site of ICMA’s 2017 Annual Conference. In each case, the public sector identified a future need aimed at supporting the attraction of mobile talent, evaluated the limits of going it alone, engaged a P3 partner, and found leadership to achieve results. …

A Sioux Falls Renaissance … A key part of the updated Downtown 2025 Plan is increasing the CBD’s available commercial and residential real estate. To help accomplish this, Sioux Falls opted for a P3 solution to design, build, operate, and maintain a mixed-use facility with retail, office, and residential uses that will ultimately increase the density of downtown. …

Nebraska Innovation Campus and P3 … Located adjacent to the University of Nebraska-Lincoln, NIC is a research campus designed to facilitate new partnerships between the university community and private businesses. …

San Antonio’s Vista Ridge … As a result, the San Antonio Water System (SAWS) crafted the vision of a 142-mile water pipeline project called Vista Ridge that will deliver enough water for some 162,000 new families by 2020, providing a 20 percent increase in water supply. … SAWS opted for a P3 undertaking in order to engage private equity and much needed development expertise in securing and constructing a resource delivery project that requires roughly $1 billion in investment, thousands of private water commitments, along with the 142 miles of built-to-last water pipeline. …

Construction of long-awaited Purple Line begins in Prince George’s

Source: Sara Gilgore, Washington Busines Journal, August 28, 2017
 
The latest investment in the 16.2-mile, $5.6 billion project is a $900 million infusion of federal dollars, including the $325 million already appropriated for the project — funding the Trump administration had proposed cutting but saved partly because the public-private partnership building the Purple Line could serve as a model for other U.S. transit systems. The Purple Line P3, to be funded by the federal, state and local governments and the private sector, is the largest in the country’s history.  The system’s construction alone will mean thousands of jobs for the state — more than 6,000 construction positions and more than 400 ongoing jobs — and is expected to generate millions of dollars in economic development. …

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MD: ARTBA: Purple Line legal woes seen as bad precedent for transportation P3s
Jim Watts, Bond Buyer, August 25, 2017 (subscription required)
 
A year-long legal delay in Maryland’s $5.6 billion Purple Line light rail system being financed as a public-private partnership poses risks for the future of similar transportation P3 projects, the American Road & Transportation Builders Association said in a brief filed with a federal appeals court. In its friend-of-the-court brief, ARTBA contends that federal Judge Richard Leon of the District Court for the District of Columbia misapplied the National Environmental Policy Act (NEPA) when he revoked the project’s environmental permits, stopping work on the project.  “Unless reversed, this precedent will have adverse consequences for complex transportation and related infrastructure projects across the country.” ARTBA said. “The district court’s holding injects new delay and litigation risks, thereby stifling the growth of this key financing mechanism to leverage and combine governmental and private dollars and responsibilities to meet the nation’s exigent transportation needs.” …

Purple Line P3 back on track for $900 million federal transit grant
Source: Jim Watts, Bond Buyer, August 22, 2017 (subscription required)

Maryland and federal officials will sign a federal funding agreement next week for a promised $900 million federal grant to help fund the construction of the $5.6 billion Purple Line light rail system being financed as a public-private partnership. The Purple Line would connect with the Washington Area Mass Transit Authority’s Metrorail system and Amtrak at several points on its 16-mile route through the Maryland suburbs of Washington, D.C. A spokesman for Maryland Gov. Larry Hogan said late Monday that the Transportation Department agreed to move ahead on the grant following “very productive, high-level conversations” between Hogan and Transportation Secretary Elaine Chao. …

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Indiana bond sale to complete P3 takeover financing

Source: Nora Colomer, Bond Buyer, August 21, 2017 (subscription required)
 
The Indiana Finance Authority will price $180 million of highway revenue refunding bonds Wednesday to complete the financing piece of its takeover of a troubled public private partnership highway project.  The bonds will take out $210.7 million of bond anticipation notes issued by the IFA last week to redeem $246 million of private activity bonds as part of settlement agreements that terminate its contractual relationship with I-69 Development Partners LLC and put direct control of the I-69 Section 5 project under the Indiana Department of Transportation. …

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Indiana Highway Gives ‘Black Eye’ to Private Investment in Infrastructure 
Source: Cameron McWhirter, Wall Street Journal, August 9, 2017

At a time when Washington is promoting private investment in roads, bridges and other infrastructure, a 21-mile stretch of highway in Indiana provides what critics say is a cautionary tale.  The project, a partnership between the state and private investors, was signed by Vice President Mike Pence in 2014 when he was the state’s governor. It is two years behind schedule and only 60% built. The state is in the process of taking it over and will have to issue debt to finish it. …

If Pence Shapes Trump’s Infrastructure Plan, Who Would Profit? Who Would Pay?
Source: Lydia O’Neal and David Sirota, International Business Times, August 9, 2017
 
President Donald Trump’s $1 trillion plan to rebuild America’s infrastructure may be unprecedented in its size and ambition — but it promotes a controversial model championed by Vice President Mike Pence in his home state of Indiana. The Hoosier flavor is hardly surprising: After his gubernatorial experience with road privatization, Pence has been a public face of the White House initiative, and executives from financial firms that helped privatize Indiana’s roads are now the Trump administration officials sculpting the details of the national plan.  As that federal proposal now moves forward, Indiana’s experience with infrastructure privatization has become a political Rorschach test. Pence and his allies are extolling Indiana’s record selling control of major roads to private firms as an ideal model, arguing that such public-private partnerships prompted corporations to invest money in Indiana infrastructure that taxpayers would otherwise have had to sponsor. …

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With New P3, Delaware Partially Privatizes Economic Development

Source: Governing, August 16, 2017
 
Delaware’s economic development efforts are about to undergo a major transformation.  Gov. John Carney signed a bill Monday that replaces the Delaware Economic Development Office with a public-private partnership partially run by some of the state’s largest companies.  “This is a starting point,” Carney said. “The hard work starts now and that’s working together in partnership … to market our state more aggressively and think out of the box about how to develop our entrepreneurial economy.”  Tentatively called the Delaware Prosperity Partnership, the new nonprofit will be responsible for recruiting new employers to the state, supporting the state’s nascent startup community and investing in workforce development programs. …