Category Archives: Public/Private.Partnerships

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. …

Opinion: Trump’s infrastructure order falls far short of his campaign promises

Source: David A. Super, The Hill, September 9, 2017

… With congressional Republicans allergic to finding new resources from anywhere except cutting programs for the poor and his own political influence flagging, the president has effectively abandoned his infrastructure plan without a fight. Indeed, his proposed budget would further starve already underfunded domestic programs — necessitating still more deferred maintenance — to fund a defense build-up and a ludicrously expensive border wall. Among the big losers would be wastewater treatment programs, the highway trust fund, and maintenance in our national parks.

Rather than press Congress for the infrastructure funding he has admitted we need, President Trump has shifted to blaming environmental regulations such as the Establishing a Federal Flood Risk Management Standard that limits building in areas likely to become flooded. Wildly exaggerating the role environmental reviews play in delaying critical infrastructure projects, his executive order would short-circuit environmental reviews of projects that could leave communities excessively vulnerable to natural disasters, destroy cherished recreational opportunities, or expose children in nearby communities to toxic chemicals. …

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Trump Wants States and Cities to Pay More for Infrastructure
Source: Daniel C. Vock, Governing, August 31, 2017

The White House envisions that a long-promised infrastructure package would streamline the federal approval process for major projects and also require states and localities to shoulder more of the financial burden for building them. It’s a shift in focus from the Obama administration, which had pledged to increase infrastructure funding but never came up with a long-term solution. … Mulvaney not only said they wanted to reduce Washington’s role in state and local projects but also offer new “incentives” to help them complete projects. “We’re trying to figure out how to use a little bit of [federal] money to generate a lot of money, to give state and locals the incentives to do stuff you might not otherwise do,” he said. …

Rebuilding Our Country Should Boost Good Jobs, Not Privatization Schemes
Source: Roxana Tynan, HuffPost, August 23, 2017
 
We’ve seen a decline in infrastructure spending the last several years, and The New York Times reports that “In 34 states, spending on government construction projects was lower last year than in 2007, adjusting for inflation. The trend has continued this year. Public construction spending in June was 9.5 percent lower than during the same month last year.”  As state budgets are cut, projects are halted. So where will this outpouring of money come from? Private investors will step in, with the promise of big tax incentives.  Companies will undoubtedly focus on projects that are the most profitable, keeping labor and supply costs down in the process, rather than on building the infrastructure that is most needed. …

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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. …

Pennsylvania municipalities and utilities benefit from privatization, says Moody’s

Source: Paul Burton, Bond Buyer, August 15, 2017 (subscription required)
 
Pennsylvania municipalities and regulated investor-owned utilities will benefit from legislation removing hurdles for local governments to sell water and wastewater systems, Moody’s Investors Service said.  Moody’s in a report Tuesday projected more privatizations. Municipalities within the commonwealth Pennsylvania see utility sales as a way to cope with financial distress and sidestep maintenance and compliance costs.  The report examined the $195 million sale of the Scranton wastewater system and the pending $162 million sale of the McKeesport wastewater system outside Pittsburgh to the Pennsylvania-American Water Company. Regulators must still approve the latter. …

More funding, accountability for VA Choice program proposed, now what?

Source: Steff Thomas, Federal News Radio, August 7, 2017

Veterans Affairs Secretary David Shulkin received his wish last week as the House passed a bill that will add an additional $2.1 billion for the Veterans Choice Program. The bill, also known as the Choice Act, was introduced just weeks before the current Choice program funding was set to expire, and passed as a last-minute decision before Congress left for the August recess. One question that still lingers is, if passed into law, how will that money be spent? In an interview on the Federal Drive with Tom Temin, Shulkin outlined in detail some of the ways the Veteran Affairs Department would use the extra funds in a system of modernization projects, construction of new facilities and comprehensive public-private sector partnerships.

… These private-public partnerships would allow veterans to get best-in-class care at VA facilities and, when they needed to, take advantage of the services from community providers. It would alleviate some waiting times and give veterans more options for health care. Shulkin strongly urged that this idea was not an attempt to privatize VA operations, but to create a stronger and more modern system. He said even President Donald Trump’s budget proposal was supportive of improving more services within the VA, and not at all representative of someone supporting privatization. …

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How VA Reform Turned Into a Fight Over Privatization
Source: Russell Berman, The Atlantic, July 17, 2017

In 2014, the Department of Veterans Affairs was mired in a scandal. An inspector general’s report had found “systemic” manipulation by government officials to hide lengthy and growing wait times at its medical centers. … Spurred to action, Congress created a program aimed at temporarily alleviating the strain on the VA: Veterans who lived more than 40 miles from a health-care facility or who had to wait more than 30 days for an appointment could take their benefits outside the system and seek treatment from private doctors. …The Choice Program, as it was called, would allow veterans to get the care they needed while giving policy-makers time to make broader fixes at the Department of Veterans Affairs, which suffered from mismanagement and insufficient resources. Three years later, attempts by Republicans in Congress and the Trump administration to extend and significantly expand the Choice Program have given these groups and leading Democrats a new worry: a creeping privatization of the VA. …

Senate Easily Confirms Trump Pick of Shulkin as VA Secretary
Source: Hope Yen, Associated Press, February 13, 2017

The Senate on Monday easily confirmed physician David Shulkin to be secretary of Veterans Affairs, charged with delivering on President Donald Trump’s campaign promises to fix long-standing problems at the department.  Senators voted 100-0 to approve the former Obama administration official, who was the VA’s top health official since 2015, in a rare show of bipartisanship amid partisan rancor over Trump’s other nominees. Shulkin secured the backing of Senate Democrats after pledging at his confirmation hearing to always protect veterans’ interests, even if it meant disagreeing at times with Trump. … The 57-year old physician has ruled out fully privatizing the agency and says wide-scale firings of VA employees are unnecessary, describing the VA workforce as “the best in health care.” … The immediate challenge includes revamping scheduling and access for VA medical appointments following a 2014 wait-time scandal. Shulkin is urging a more integrated VA network where veterans could seek outside private care only in coordination with the VA. He has not sketched out full details. “We’ve yet to hear from him how he’ll pursue President Trump’s vision for a public-private partnership at the VA,” said Dan Caldwell, policy director for the conservative group Concerned Veterans for America. …

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The Untapped Wealth of American Cities

Source: Bruce Katz and Jeremy Nowak, CityLab, August 6, 2017
 
Americans who travel abroad sometimes wonder why many of our airports are lacking in comparison to the best international airports. Or they want to know why other nations seem to do a better job with public transportation and the management of other public assets, from ports to parks. The answers we are tempted to give are that we do not invest as heavily in public infrastructure as many other nations and that a market-oriented American ethos with an entrepreneurial culture prefers private solutions (cars versus trains) to public ones. … But there’s another answer: Compared to many other nations, in the United States government has more direct control of public assets such as airports, convention centers, and transport, water and sewer systems (just to name a few). And the government does not, for the most part, manage them well, failing to leverage the market potential and value of the assets they own. Far from being broke, many cities and counties have enormous untapped wealth, which could be used to finance not only infrastructure but investments in children and other critical needs. …

There is a better way, teased out in detail and with great authority in The Public Wealth of Cities, a new book co-authored by Dag Detter and Stefan Folster, two Swedish experts in public finance. The pair have studied public asset management and are promoting a third alternative to political management or full privatization—public ownership that relies on professional, private-sector management.… The authors’ core argument is a disruptive idea in public policy that links management systems, public asset value, intelligent financing, and the proper role of politicians in a democracy. …

Infrastructure Borrowing Drops as U.S. States Await Trump Plan Details

Source: Reuters, August 6, 2017

President Donald Trump arrived in office having promised a bold $1 trillion infrastructure investment plan over 10 years for roads, bridges, airports and transit systems crumbling by the day across the United States. But nearly seven months later the administration has produced few details on the future of federal infrastructure funding, one reason why state and municipal governments have issued fewer bonds to improve roads, water systems and other projects so far in 2017. … Through July, new municipal deals to fund transportation, utilities and power projects totaled $50.7 billion, down 19.4 percent from the same period last year, according to an analysis of Thomson Reuters data. That decline outpaces a broader drop in the U.S. municipal bond market overall, with total issuance down 13.1 percent thus far in 2017 to $201.7 billion. New deals have lagged since November’s post-election selloff, when state and local governments quickly issued bonds fearing potential policy changes and rate increases by the Federal Reserve.

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Lacking White House plan, Senate focuses on infrastructure
Source: Melanie Zanona, The Hill, August 4, 2017

Amid growing frustrating that President Trump’s infrastructure package keeps getting pushed to the back burner, some members of Congress are taking matters into their own hands. A bipartisan coalition from the Senate Commerce, Science and Transportation Committee has been discussing pushing its own bill if the administration doesn’t release something by the fall. The Senate Environment and Public Works (EPW) Committee has also been gathering input with an eye on drafting an infrastructure plan this summer. And several Republicans met at the White House last week to try to get the ball rolling there on the issue.

White House: Infrastructure bill remains Trump priority
Melanie Zanona, The Hill, July 31, 2017

President Trump remains committed to working with Congress on a massive infrastructure bill, White House press secretary Sarah Huckabee Sanders said Monday. The reassurance from the White House comes as GOP leaders have signaled that the timeline for Trump’s $1 trillion infrastructure package — which has yet to be unveiled — will likely slip to next year. “The president’s been very outspoken on the need for a massive overhaul to the country’s infrastructure, and that certainly is still a priority, both legislative and in any capacity that he has the ability to carry that out,” Sanders told reporters at the daily briefing.

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