Category Archives: Public/Private.Partnerships

Release of Trump infrastructure plan may slip past January

Source: Brianna Gurciullo and Lauren Gardner, Politico, January 9, 2018
 
The White House may be pushing back the release of its long-awaited infrastructure package yet again, just a month after saying it would come out by the end of January.  A White House official said Tuesday that there have been “no decisions yet on timing” for the release. Sen. Ben Cardin (D-Md.) separately told POLITICO — after a meeting with Transportation Secretary Elaine Chao and other officials — that administration officials are still deciding whether to publish legislative principles for the plan before or after the president’s State of the Union address Jan. 30. …

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Mixed signals on infrastructure plan emerge from Trump retreat
Source: Josh Dawsey, Washington Post, January 7, 2018
 
President Trump expressed misgivings about his administration’s infrastructure plan Friday at Camp David, telling Republican leaders that building projects through public-private partnerships is unlikely to work — and that it may be better for the government to pursue a different path.  Then on Saturday morning, Gary Cohn, the president’s chief economic adviser, delivered a detailed proposal on infrastructure and public-private partnerships that seemed to contradict the president. He said the administration hoped $200 billion in new federal government spending would trigger almost $1 trillion in private spending and local and state spending, according to people familiar with his comments. Cohn seemed to present the plan as the administration’s approach, although the president had suggested such an approach might not work. …

Why Trump’s Infrastructure Push Might Stall Again
Source: Mark Niquette, Bloomberg Businessweek, January 5, 2018
 
The first year of Donald Trump’s presidency began with hopes for a unified effort to fix U.S. highways, bridges and airports. His second year begins much the same way. There was talk in 2017 about advancing a sustained infrastructure-improvement program, but there was little progress — a reflection of the president’s priorities and the differences between Republicans and Democrats on how to pay for and carry out such an effort. That hasn’t kept Trump from predicting bipartisan agreement on the issue in 2018. …

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Video: Deal of the Year 2017 – Small Issuer: City of Missoula, Mont.

Source: Bond Buyer, December 6, 2017

The city of Missoula, Montana waged a six-year legal battle to wrest control of its water system from a private company. The water system in the town of 70,000 was privately-owned by Mountain Water – a company that refused to make needed repairs to the system or sell it to the city. … Obtaining traditional financing with no disclosure from Mountain Water — and water assets nearly beyond repair — was unattainable given the risks. The city also had to provide payment before the court could rule it owned the water system. The solution: the direct sale to Barclays of nearly $140 million in A-rated bond anticipation notes. The financing plan uniquely provided the necessary mechanics to allow the city to purchase the water system. Prior to the acquisition, water bills were 17% higher than elsewhere in the state, but dropped to 49% below average after the deal.

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City Of Missoula Takes Ownership Of Mountain Water Company
Source: Beau Baker, MTPR, June 22, 2017

The city of Missoula has taken ownership of the water utility that serves its residents after a three-year court battle. The city bought Mountain Water Company for $84 million and paid another $6.8 million to developers who had a claim against the company. A separate bundle of transition costs, the bulk of which are attorneys’ fees, amounts to $7.5 million.
Mayor John Engen said city attorneys originally estimated the legal costs would be $400,000. Missoula won the right to buy the utility in an eminent domain case. It now joins all 128 cities and towns in Montana in controlling and owning its own water and distribution system. … Merriam says there are no immediate plans to change the rates. …

One for the history books: Missoula will buy its water system
Source: Sherry Devlin, Missoula Current, February 22, 2017

In an historic vote Monday night, the Missoula City Council unanimously approved the purchase of Mountain Water Co., forever ensuring the city’s “access to clean, affordable and reliable water.” … Throughout the recent effort, and decades of unsuccessful attempts by previous mayors and councils, the goal has been to place Missoula’s drinking water system into public ownership. … That now could happen by the end of March. With Monday’s vote, the local water system will be free from an increasingly distant and disaffected roster of corporate owners, most recently The Carlyle Group, a global investment fund, and the Canadian utility Algonquin Liberty. … Missoula’s water has always been in private ownership; all other Montana cities own their water system. … In fact, Bender said, Mountain Water Co.’s purchase by an international hedge fund – The Carlyle Group – imperiled every future generation.
The city’s purchase of its drinking water system will benefit those future generations the most, Bender said. …

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Why Virginia Drivers Are Paying a $35 Toll to Drive Into Washington, D.C.

Source: Henry Grabar, Slate, December 7, 2017

Starting Monday, if you want to drive peak-direction on I-66 inside the Beltway, you have two choices: Find a passenger or pay a toll that has soared as high as $40 this week. It is a peek at the future of driving (and more), in which dynamic pricing will offer access to scarce resources. And it made people very, very angry. … It’s one instance in a wave of new dynamic-toll experiments in Virginia and elsewhere. Reluctant Republicans had made a deal with Gov. Terry McAuliffe to allow I-66 tolling in exchange for widening the highway. Now, they say the rates are “unacceptable” and the timing (after the gubernatorial election) suspicious, and they have called on governor-elect Ralph Northam to clean up the mess. But without a paradigm shift in infrastructure spending, a big, thriving city cannot maintain the delicate balance between moving traffic, well-maintained roads, and cheap commuting for solo drivers. … Toll roads have long been a popular choice for public-private partnerships (and with mixed results). But they’ve crept onto interstates too, thanks to congressional carve-outs that allow tolling to add capacity or make bridge repairs. Trump’s infrastructure white paper called for legalizing the tolling of interstates across the board. … This is good news insofar as it hastens the demise of our wasteful, expensive, and environmentally damaging transportation model. … But this trend also poses thorny questions as the culture of the long commute changes. Once the burden of wealthy suburbanites who had fled the city, long car commutes—especially in high-cost metro areas with lots of traffic congestion—are now just as likely to be associated with service workers exiled from central housing markets or others chasing far-flung employment centers. In most cases, that also means they’ve been denied access to mass transit commutes. …

Puerto Rico Still Waits for $4.9 Billion From U.S. Treasury

Source: Rebecca Spalding, Bloomberg, December 8, 2017
 
Over two months after Hurricane Maria devastated Puerto Rico, the island’s government still hasn’t received any of the $4.9 billion of short-term loans promised in the storm aid package Congress passed at the end of October.  Christian Sobrino, the governor’s representative on the island’s federal oversight board, confirmed Friday that no Puerto Rican entity has received any portion of the funds, which were requested for basic functions like making payroll. This week, the Puerto Rican government told the fiscal control board that the electric company, Prepa, and water utility, Prasa, would run out of money in December.  Sobrino said Friday that the island’s fiscal agency was in talks with the U.S. Treasury and Department of Homeland Security about the money and how it would be disbursed. …

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U.S. counters hedge fund’s attack on Puerto Rico oversight board (Abstract)
Source: Jim Christie, Reuters, December 7, 2017
 
The U.S. government defended on Wednesday the federal board overseeing Puerto Rico’s restructuring, countering a bid by a hedge fund that sought to get the U.S. territory’s bankruptcy-like case dismissed by attacking the board’s legality.  The restructuring is taking place under a special federal law known as the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) that provides for proceedings in U.S. District Court akin to those under Chapter 9 municipal bankruptcy. …

Bernie Sanders to unveil a $146 billion ‘Marshall Plan’ for Puerto Rico
Source: Jeff Stein, Washington Post, November 28, 2017

Hurricane Maria destroyed Puerto Rico’s decades-old electrical grid when it made landfall on Sept. 20, rendering millions of island inhabitants without power.  On Tuesday, Sen. Bernie Sanders (I-Vt.) will unveil an ambitious $146 billion Puerto Rico recovery plan he says will allow renewable power sources such as solar and wind to provide about 70 percent of the island’s energy needs within the decade.  The bill, which has the backing of San Juan Mayor Carmen Yulín Cruz, also calls on Congress to consider retiring Puerto Rico’s debt and would give the island billions in additional federal funding for transportation, health care and education in the hopes of stemming a feared mass exodus to the mainland. It would also allocate funds to the Virgin Islands, which were similarly devastated by Hurricane Maria. …

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HUD Secretary Carson launches centers to drive households to self-efficiency

Source: Kelsey Ramírez, Housing Wire, December 7, 2017

U.S. Department of Housing and Urban Development Secretary Ben Carson announced a new initiative to help HUD-assisted families achieve self-efficiency. Carson announced HUD will launch its new EnVision Centers, which will be located on or near public housing developments. HUD explained these centers will be hubs for what it calls the four key pillars of self-sufficiency: character and leadership, educational advancement, economic empowerment and health and wellness. The centers will form partnerships with federal agencies, state and local governments, non-profits, faith-based organizations, corporations, public housing authorities and housing finance agencies. EnVision Centers will utilize public-private resources to impact the community. … Carson previously explained his vision to HousingWire in an exclusive interview with Editor-In-Chief Jacob Gaffney, who wrote: One of Carson’s main initiatives is establishing “envision centers” of learning, especially for teenage mothers who, more often than not, end their educational trajectory once they give birth. New York City is seen as a potential spot for one of the first such centers where young, low-income parents can access day care while learning to code and “balance a checkbook or unclog a toilet,” the secretary told me. … HUD will start by launching ten pilot EnVision Centers across the U.S. …

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America’s public housing crisis may worsen with Trump budget
Source: Lawrence Vale, Associated Press, July 12, 2017
 
… As someone who has spent 25 years researching and writing about the travails of public housing in the U.S., I had this immediate thought: Could the same thing happen here?  Various commentators have pointed out that American regulations require sprinklers and do not permit the use of cladding materials with combustible plastic cores in high-rise structures.  Yet while the facades of American public housing may be less flammable, the system suffers from a toxic convergence of long-deferred maintenance, squeezed budgets and cost-cutting measures. Privatization policies, deeply rooted suspicions about the character of public housing residents and long-term inattention all threaten the capacity of stigmatized low-income families to remain in their homes. …

Ben Carson reckons with proposed HUD budget cuts
Source: Jonathan Easley, The Hill, June 30, 2017

… Now, as HUD secretary, Carson controls the $46 billion government agency that oversees housing for the poor. President Trump’s proposed 2018 budget would cut HUD spending by $6 billion. “We will use whatever resources we have very efficiently,” Carson said. “The other thing to keep in mind is that the traditional view of HUD and government is we ride in on a white horse with a bucket of money … and go off to the next thing,” he continued. “That particular model has led us to the point where we have three to four times as many people in need of affordable housing and it’s getting worse.” Carson, who had no experience in government before becoming HUD secretary, is grappling with decisions about which programs to keep, which to shutter, and how to improve the ones that remain. …

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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. …

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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. …