Category Archives: Public/Private.Partnerships

Congress OKs Trump bid to widen private care at besieged VA

Source: Hope Yen, Associated Press, May 23, 2018
 
Congress delivered a victory to President Donald Trump by expanding private care for veterans as an alternative to the troubled Veterans Affairs health system. The Senate cleared the bill on a 92-5 vote Wednesday, also averting a disastrous shutdown of its Choice private-sector program. The program is slated to run out of money as early as next week, causing disruptions in care. The sweeping measure would allow veterans to see private doctors when they do not receive the treatment they expected, with the approval of a Department of Veterans Affairs health provider. Veterans could access private care when they have endured lengthy wait times or VA medical centers do not offer the services they need. …

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House Passes Sweeping Bill to Overhaul VA-Funded Private Care, Shutter Facilities
Source: Eric Katz, Government Executive, May 16, 2018
 
The House on Wednesday passed 347-70 a major overhaul to veterans health care, voting to expand their access to private sector care on the government’s dime and to bring the Veterans Affairs Department through a process that would close some of its federally run facilities. The Veterans Affairs Maintaining Internal Systems and Strengthening Integrated Outside Networks (MISSION) Act won widespread support in the lower chamber and will now head to the Senate, where it already has bipartisan backing.

Ronny Jackson Withdraws As VA Nominee
Source: Jessica Taylor, NPR 26, 2018

Rear Adm. Ronny Jackson, President Trump’s embattled nominee to lead the Department of Veterans Affairs, has withdrawn from consideration for the post amid allegations he had fostered a hostile work environment and behaved improperly while serving as the top doctor leading the White House medical unit. …

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Puerto Rico governor presents zero debt payment budget under cloud of uncertainty

Source: Robert Slavin, Bond Buyer, May 23, 2018 (Subscription required)
 
Puerto Rico Oversight Board director Natalie Jaresko said Gov. Ricardo Rosselló’s budget will have to be revised and may be rejected if the local government doesn’t follow through on a labor reform agreement. The governor released the $8.73 billion general fund budget on Friday and promoted it in a speech to Puerto Rico’s legislature Tuesday night. On Sunday night the governor and the board announced an agreement on a compromise on reforming labor practices as well as agreeing to other changes in the board-certified fiscal plan. In exchange for the board waiving its demands for the abolition of the Christmas bonus and reduction of the island’s mandatory 27 days of vacation and sick leave, the governor agreed to bring at-will employment to the island by repealing Law 80 from 1976. Jaresko, in a teleconference with reporters Wednesday, described this agreement as an “accommodation.” …

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Puerto Rico Oversight Board, Gov. Rosselló reach partial compromise
Source: Robert Slavin, Bond Buyer, May 21, 2018 (Subscription required)
 
The Puerto Rico Oversight Board and Gov. Ricardo Rosselló reached a partial compromise in their policy struggle over the fiscal plan for the debt-laden territory. The board said the proposed revisions are “a result of the commitment by the governor and legislature to approve labor reform before the end of this fiscal year, thus considerably reducing implementation risks of the fiscal plan and avoiding costly litigation.” Gov. Rosselló said the new fiscal plan “is not perfect, but it offers concrete results in benefits for our people, and allows us to enter the next phase with more certainty and less conflict. I am convinced that this is the way forward.” …

Puerto Rico’s rocky recovery is distracting from its pre-existing struggles, residents say
Source: E.A. Crunden, ThinkProgress, May 21, 2018
 
When Hurricane Maria slammed into Puerto Rico last September, the island was already struggling. Cash-strapped and massively in debt, the U.S. territory has faced budget deficits for years. Before the hurricane, Puerto Rico already owed $74 billion in debt, with more than $53 billion outstanding in unfunded pensions. Fifty percent of Puerto Ricans live below the poverty line and the island never recovered from the Great Recession the way the mainland did; more than 20 percent of Puerto Rican jobs have dried up since 2007. Mainland sympathy was always hard to come by. In 2006, Congress did away with tax breaks that helped Puerto Rico, while continuing legislation like the Jones Act. That World War I-era law mandates that only U.S. ships may transport U.S. goods domestically between ports, hurting islands like Puerto Rico in the process. According to a 2012 report, between 1990 and 2010, the Jones Act alone cost Puerto Rico $17 billion. Amid a struggling economy and little relief, more than 10 percent of the island’s population had left over the course of the last decade before Maria even made landfall. …

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Privatized student housing – Four key trends will differentiate older and newer P3 projects next year

Source: Moody’s Investors Service, May 1, 2018 (Subscription Required)

Privatized student housing projects are vulnerable to negative pressures in the higher education sector, but will hold steady because of solid real estate fundamentals and marginally improving financial performance. … Examining how trends differ between older projects that have been operating for four years or more (seasoned) and new construction that opened in 2015 or later (recent) underscores how a project’s early years carry the most risk, seasoned projects’ upside potential is limited and no project is immune from an unfavorable operating environment. … Rent growth trend diverges for seasoned projects. … Sector maintains solid occupancy despite disappointing initial lease up at some new projects. … Financial performance strengthens overall, but year-to-year fluctuations at individual projects are the norm. … Unfavorable operating conditions contributed to five downgrades last year. …

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U.S. public universities turning to private sector to meet campus needs
Source: Stephanie Kelly, Reuters, August 26, 2016

U.S. public universities are increasingly turning to public-private partnerships to develop student housing and other campus projects, sometimes using the structure to transfer borrowing and liability risks to the private sector. Over the last five years, there has been an “uptick” in universities and colleges leveraging the private sector to deliver housing needs, said Kevin Wayer, an international director and co-president of the Public Institutions group at commercial real estate firm Jones Lang LaSalle. … Use of P3s can contribute to reduced debt on universities’ balance sheets, said Todd Duncan, assistant vice president of housing, food and retail services at the University of Cincinnati’s main campus. While still only a “fraction” of the U.S. municipal infrastructure market, the P3 market is building, Moody’s Investors Service said in a report issued in March. … Universities might engage in P3s for a number of different reasons, including the efficiency that developers can bring to projects, Duncan said. Increased operating costs for institutions and decreased state contributions have led to a financing gap, said Kurt Ehlers, managing director at Corvias Campus Living, a development group. From fiscal 2008 to fiscal year 2016, state spending per student at public two- and four-year colleges decreased 18 percent, according to Michael Mitchell, a senior policy analyst at the Washington, D.C.-based Center on Budget and Policy Priorities. The National Council for Public-Private Partnerships, a non-profit that advocates for P3s, lists 18 types of P3 partnership structures on its website. The council did not have a national figure for how much money is being spent on higher education P3 projects. …

Opinion: Rebuilding Schools, Bridges—and Lives

Source: Richard Trumka and Boston Mayor Marty Walsh, Wall Street Journal, May 14, 2018

As unions, businesses, engineers and policy makers celebrate Infrastructure Week from May 14-21, we’re reflecting on the investments that add value to America. For every dollar a country spends on public infrastructure, it gets back nearly $3, according to a 2014 study from the International Monetary Fund. Keep this in mind when you hear that the American Society of Civil Engineers, or ASCE, has called for $2 trillion to repair, renovate or replace water lines, public schools, bridges and mass transit systems. On top of that, another $2 trillion could make America the global leader in the infrastructure technologies of the future, such as high-speed rail and smart utilities. … When you see that the ASCE’s infrastructure report card gives the nation overall a D+, don’t hang your head. The U.S. can get that grade up. But it won’t happen with a plan like President Trump’s , which would cut Washington’s contribution to infrastructure projects from 80% to 20%, quadrupling the burden on cash-strapped cities and states. The true way forward is to do the opposite: Put the federal government back in the business of building America’s future. …

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States That Raise Tolls and Taxes Will Have an Edge in Getting DOT Funds 
Source: Ted Mann, Wall Street Journal, April 27, 2018

States and cities that raise taxes and tolls will have a better chance at winning federal money for roads and bridges, part of a Trump administration strategy to have states carry a bigger portion of infrastructure spending. The move is a result of a Transportation Department overhaul to a popular infrastructure grant program, giving it a new name and tweaking the criteria that will determine which project applications will win federal funding. Under the overhaul, which was launched last week, applicants for grants this year will be judged in part on whether they can show that they have generated “new, non-Federal revenue” to help cover project costs, according to a DOT document. That will mean local agencies that raise taxes or tolls to pay for bridges, transit lines or road improvements will be more likely to win some of the $1.5 billion pool of funding authorized for the program this year. …

Trump infrastructure policy adviser to leave White House
Source: Mallory Shelbourne, The Hill, April 3, 2018
 
DJ Gribbin, President Trump’s infrastructure policy adviser, is departing the White House as the administration’s rebuilding plan appears to have hit a wall in Congress. Gribbin, who led the Trump administration’s push for an infrastructure proposal that was released in February, is “moving on to new opportunities,” according to a White House official. …

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Putting the Public First in Public-Private Partnerships

Source: Gabrielle Gurley, The American Prospect, April 26, 2018
 
… More than a decade later, the Port of Miami Tunnel is the marquee example of a public-private transportation infrastructure partnership. … But the tunnel’s success is deceptive, since the unique factors that converged in South Florida cannot be replicated everywhere. For every Port of Miami Tunnel, scores of ill-conceived projects dot the American landscape. The United States lags behind not only in basic maintenance of existing assets at the end of their life cycles but in building the next generation of roads, bridges, rail, tunnels, and aviation projects. With public funds scarce in a climate of tax-cutting and budgetary austerity, the risk is that the contactor/partner pays the up-front costs but sticks future generations of taxpayers and rate-payers with exorbitant charges. … But states and municipalities can learn to appreciate the differences between partnerships that put the public first and the rip-offs that erode public confidence in government and drain public coffers.

… The Trump administration’s version of an infrastructure initiative relies heavily on private financing, which may or may not materialize. … But the Trump framework is only an exaggeration of recent trends. At best, new fiscal pressures can lead public officials to get creative, seeking private partners who may bring superior engineering, financing, and legal expertise, and better attention to maintenance and operations. But private-sector involvement does not automatically mean a better outcome. Citizens and public officials often forget that the private sector’s prime motive is profit, not philanthropy. If a firm cannot clear a good return on an investment, either the deal will not materialize or the terms will be onerous to the public. Public debates can be marred by false expectations, and confusion or obfuscation of what distinguishes a good partnership from a rip-off. …

Citizen Attitudes Towards Public–Private Partnerships

Source: Eric J. Boyer and David M. Van Slyke, The American Review of Public Administration, April 12, 2018

Abstract
This study examines the factors that influence public attitudes toward public–private partnerships (PPPs) through an analysis of public opinion data collected in 2014. Although previous literature has examined public attitudes toward government contracting and asset privatization, there is little understanding of how the public feels about more collaborative forms of public–private interaction. Counter to previous studies that suggest that support for free enterprise and a disdain for government increases support for private involvement in public services, we find that attitudes toward PPPs are nuanced: Respondents favor them not only when they have positive feelings toward the business sector but also when they also report trust in government. PPPs are thus perceived not as a replacement to public administration, but as a delivery model that demands competence and trust of both public and private partners. The results also explain a previously unstudied relationship between respondent familiarity with PPPs and their attitudes toward them. Counter to expectations, we find that the more familiarity that respondents have with PPPs, the more likely they are to view them favorably. We also identify factors that predict public opinions of PPPs which can inform public outreach and public involvement programs involved with PPPs.

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New Jersey bill seeks P3 expansion

Source: Andrew Coen, Bond Buyer, April 13, 2018 (Subscription Required)
 
New Jersey lawmakers are pushing again for an increase in the use of public-private partnerships to jump-start infrastructure improvements in the cash-strapped state. Two and a half years after former Gov. Chris Christie conditionally vetoed an expansion of New Jersey’s P3 program, a state senate committee advanced legislation on April 5 that if enacted would permit localities to enter into P3 agreements for building and highway infrastructure projects. The measure would make local governments, school districts, public authorities and state colleges eligible to enter into P3s where the private entity would assume full or partial financial and administrative responsibility for capital projects. …

Opinion: P3 schools fail to make the grade

Source: Tom Graham, Regina Leader-Post, March 31, 2018

If we could build five schools for the cost of four, any responsible government would do it. That is exactly what the Manitoba government decided in its 2018 budget, which rejected the public-private partnership (P3) model to build schools. Manitoba reviewed the evidence and found that for the price of $100 million, it could build five schools the traditional way, instead of four P3 schools. It makes one wonder why our financially challenged Saskatchewan Party government chose the more expensive P3 model to build and maintain 18 schools and other P3 projects. Our government keeps saying that P3 schools save money, but where is the evidence? … What we do know is that we are paying a hefty premium for maintenance contracts for brand-new schools which, if built properly, should not need that much maintenance or repair. Let’s hope the private maintenance companies do not charge $409 to replace a soap dispenser as happened at a P3 hospital in Montreal. There are a few other costs specific to P3 schools that we should mention: the higher interest payments for the private financing of the school construction, the higher consultant costs for reports, and the $500,000 given to each of the companies that bid but did not get the contract. …

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CUPE members in Manitoba celebrate major victory against P3s
Source: CUPE, March 13, 2018

The Manitoba Government has cancelled all plans to involve public-private partnerships (P3s) in the education system, and instead is committing to build five new publicly-funded schools in Winnipeg and Brandon. The government initially planned to build four schools under the P3 model, but after a cost-benefit analysis the savings were found to be enough to build an entire fifth school. …

Kaiser expands footprint on Maui

Source: Kristen Consillio, Honolulu Star Advertiser, April 4, 2018
 
Kaiser Permanente Hawaii has acquired 6.2 acres under its Wailuku Medical Office for $22 million. The state’s largest health maintenance organization — both a medical provider and health insurer with more than 255,000 members statewide — said the investment “allows for greater flexibility and certainty around future operational costs. … The HMO assumed control of three Maui County hospitals on July 1 in the largest privatization in state history. The HMO pledged to inject more resources into Maui Memorial Medical Center, Kula Hospital & Clinic and Lanai Community Hospital, the only acute-care facilities for about 200,000 residents and visitors in Maui County. …

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HGEA nurses disgruntled over Kaiser management
Source: Melissa Tanji, Maui News, February 22, 2018
 
The head of about 800 union workers at Maui Memorial Medical Center said Maui Health System officials need “to step up their game” and start fulfilling “the bill of goods” touted by the private entity to improve former public hospitals on Maui. Randy Perreira, executive director of the Hawaii Government Employees Association, said on Wednesday that in the past several weeks, union hospital workers have been reaching out to the union to express concern about inadequate staffing, mainly nurses, along with not having enough supplies or staff support at Maui’s only acute-care hospital. He reported that employees believe that the July 1 changeover of operations from the quasi-public Hawaii Health Systems Corp. to Kaiser-affiliated Maui Health System at Maui Memorial, Kula Hospital and Lanai Community Hospital has not been as rosy as painted recently in the media. …

The neurosurgeon is out
Source: Chris Sugidono, Maui News, February 11, 2018
 
Maui Health System is in labor negotiations with the Hawaii Government Employees Association and United Public Workers on the unions’ first contract with the new management. HGEA represents 775 nurses and other health care professionals, while UPW has roughly 500 members working in maintenance, food service and laundry.  HGEA Executive Director Randy Perreira said in an email that the union’s goal is to ensure the investments from taxpayers and Kaiser “results in the best patient care and services” for Maui County. He added that he would like Kaiser to retain its current employees and recruit highly qualified and experienced “long-term” health care professionals. …

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Largest Public-Housing System in the U.S. Is Crumbling

Source: Mara Gay and Laura Kusisto, Wall Street Journal, March 18, 2018
 
New York City’s public housing is literally falling apart. The sprawling network of 176,000 apartment units across the five boroughs needs an estimated $25 billion of repairs, up from $6 billion in 2005. Yet annual federal funding for the nation’s largest public-housing program hasn’t kept pace. Residents of decaying brick towers battle leaking roofs and moldy walls, broken elevators and aging infrastructure. This winter, the housing authority’s ancient boilers gave out, leaving more than 320,000 people without heat or hot water. … Mayor Bill de Blasio has blamed public-housing problems on decadeslong funding declines from Washington. The New York City Housing Authority is overseen by HUD. Housing authorities in other major cities, such as San Francisco, Chicago and Atlanta, now manage a vanishingly small share of their units. In some cases, cities have continued to own the land or buildings and they are run largely by private real-estate companies, while in other cases the original buildings are demolished completely. Tenants typically are given Section 8 rental-subsidy vouchers. Critics say New York was too slow to adopt this model. … Bringing in private partners to rehabilitate and manage public housing could generate millions of dollars of new investment but raises fears of privatization in the eyes of many tenants and advocates. Mayor de Blasio was initially resistant to that approach, embracing it only after appeals from Obama administration housing officials and NYCHA Chairwoman Shola Olatoye, according to people familiar with the matter. … So far, the city has transferred one traditional public-housing complex with some 1,400 units over to private management and has plans to complete the same process for 15,000 units over the next decade. …

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Federal Cuts Could Force N.Y.’s Creative Hand
Source: Paul Burton, Bond Buyer, March 24, 2017

The specter of massive cuts in federal domestic aid could force New York City officials to think outside the box about how to salvage programs now financed by the feds. … The New York City Housing Authority alone could lose up to $150 million in operating funds and up to $220 million in capital funding. … “The biggest issue for New York City is the housing program,” said Howard Cure, director of municipal bond research for Evercore Wealth Management. One creative option, according to Cure, is to convert some properties to the federal Rental Assistance Demonstration, or RAD, program, which the Department of Housing and Urban Development operates. It allows public housing agencies to fully own their public housing units and to renovate or redevelop the housing using private financing sources. The renovated or new housing receives rental support for the residents through a project-based Section 8 subsidy. … While Trump has called for more public-private partnerships, New York and other Empire State cities still need approval from state lawmakers to execute P3s. …