Albemarle County threw out a plan to privatize trash and recycling disposal last week in the wake of fierce opposition from residents, revving up the argument over who should handle solid waste in the region—the county or private contractors.
Source: Jim Watts, Bond Buyer, January 13, 2014
More public-private partnerships for transportation projects are on the horizon for 2014 due to declines and uncertainties in state and federal funding streams for highways and bridges, Fitch said in a recently released report. Availability payments, which provide annual state subsidies to the private partner rather relying on fee revenues to support debt issued for P3 projects, will probably be considered as state-supported debt, the rating agency said. … Kentucky doesn’t have P3 enabling legislation, but the governor supports the idea, Kim said. A state P3 bill under development in the Kentucky legislature is expected to be considered in the current session that begins this week and end in mid-April. …
U.S. P3 Funding Activity Likely to Rise
Source: Fitch Wire, January 10, 2014
Fitch Ratings-New York-10 January 2014: U.S. states are likely to pursue public-private partnerships (P3) more frequently in the coming year, Fitch Ratings says. Last week, Kentucky and Ohio submitted a financing plan for the Brent Spence Bridge Project to the Federal Highway Administration that includes a P3 model. This will be Kentucky’s first P3 project, if it is procured. Nevada is also considering a P3 project for the first time with Project Neon. Other states with active P3 programs include Florida, Indiana, Maryland, and Virginia among others….
Metro will begin testing an open payment system this year, giving commuters the option of using their credit cards, federal government IDs, or smartphones to speedily pay fares — tap and go — when boarding buses, passing through fare gates at rail stations, and to pay for parking, the transit authority announced on Wednesday.
Metro awarded a $184 million contract to the consulting and technology firm Accenture to rollout an open payment pilot program at ten Metrorail stations, 50 bus routes, and two parking lots. Two-thousand Metro riders will be chosen to take part in the pilot, although the method of picking commuters has not been determined yet. Accenture is required to complete the pilot program within 18 months, and open payments are expected to expand to Metro’s entire transit system in three to five years, according to transit authority officials….
A private ambulance service that transported more than a half-million patients a year in six states abruptly shut down without explanation, leaving dozens of cities and towns scrambling for medical transportation options this week without a word of warning.
First Med EMS, based in Wilmington, N.C., served hospitals and other medical facilities in more than 70 municipalities in Kentucky, North Carolina, Ohio, South Carolina, Virginia and West Virginia. It operated under the names TransMed, Life Ambulance and MedCorp, boasting in publicity materials: “We take pride in our performance and the safety of our patients. We refuse to compromise on this.”
First Med’s website was inaccessible Tuesday, and calls to corporate offices either reached disconnected lines or weren’t answered. Company workers said in Facebook posts and tweets that they were told the corporation had declared bankruptcy, but no bankruptcy documents were yet on file in U.S. Bankruptcy Court for the Eastern District of North Carolina.
First Med was the largest EMS service in Ohio, where at least 1,500 paramedics and other medical workers were left jobless in Cleveland, Columbus, Dayton, Toledo, Cincinnati, Youngstown and numerous smaller towns.
First Med also provided services in Richmond, Norfolk and Newport News in Virginia, as well as Wilmington, N.C.
Much of First Med’s business was “non-emergent” transportation — such as taking dialysis patients to their weekly treatments and shuttling nursing home patients to doctors’ appointments — and officials in some cities said there should be little impact on patient treatment. …
Source: Katie Bess, Maeghan Gilmore, Jen Horton, Yael Lazarus, Kathy Nothstine, Rob Pressly, Kathy Rowings, Emmanuelle St. Jean, National Association of Counties (NACo), December 2013
From the summary:
Spotlight on Large Urban Counties: Leadership in Action highlights noteworthy initiatives of 23 of America’s large urban counties. Covering such topics as economic development, health, justice, resilience, technology, and transportation and infrastructure, the case studies featured here showcase how county officials have seized opportunities to not only meet critical needs, but to strengthen local communities and improve the outlook for growth.
Viewing these examples collectively, several themes emerge:
– Multi-Sector Partnerships. Counties are partnering with public agencies at all levels of government and collaborating with the private sector more than ever. Miami-Dade County helped to arrange a public-private partnership to develop the $904 million Port of Miami Tunnel, expected to ease congestion downtown and promote growth in port activity. Los Angeles County agencies teamed with the local transportation authority and area businesses to address child sex trafficking and provide specialized treatment for hundreds of young victims.
– Investments to Drive Economic Growth. Counties are placing a premium on catalytic public investments that will offer economic and community benefits for years to come. Hennepin County (Minn.) brokered a public-private partnership to develop a major mixed-use transit hub that will spur investments and change the landscape of downtown Minneapolis. Shelby County (Tenn.) is working with local governments, industry leaders and a host of other stakeholders to develop a long-term regional plan to guide infrastructure development and economic growth.
– Streamlined Services for Dependent Populations. Counties are working to better serve dependent populations who frequently cycle through county jails and health care facilities at high costs to the public. King County (Wash.) created a set of strategies to serve people living with mental illness and substance abuse, aimed at reducing unnecessary involvement in justice and emergency medical systems. Travis County (Texas) partnered with a nonprofit to serve inmates with addictions, reducing likelihood of recidivism and promoting long-term recovery.
– Youth Engagement. Counties are investing in young people to train a skilled workforce and engage youth in the community. For example, Multnomah County (Ore.) established an internship program to provide low-income and disadvantaged youth with quality employment opportunities. Douglas County (Neb.) developed a collaborative public art project that engages young artists and juvenile offenders.
From the Columbia River Crossing bridge project in the Pacific Northwest to the Illiana Expressway project in the nation’s midsection to Maryland’s Purple Line light rail project, a number of transportation projects that involve public-private partnerships (P3s) and/or tolling have been in the news of late. Meanwhile, a state Supreme Court decision in Virginia appears likely to pave the way for more tolls and P3s in that state. I also have updates on projects in a number of other states as well as links to recent related reports and articles.
From the abstract:
Eager for quick cash, state and local governments across America have for decades handed over control of critical public services and assets to corporations that promise to handle them better, faster and cheaper. Unfortunately for taxpayers, not only has outsourcing these services failed to keep this promise, but too often it undermines transparency, accountability, shared prosperity and competition – the underpinnings of democracy itself. As state legislatures soon reconvene, policy makers likely will consider more outsourcing proposals. Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations serves as a cautionary tale for lawmakers and taxpayers alike.
Companies that build private toll roads are pressing states to assume more financial risk of traffic not meeting expectations, a change that benefits the operators while threatening to increase taxpayer costs. Illinois and Indiana are among states offering set payments instead of the right to keep toll revenue, the standard financing method in the past. A similar approach is being used in Florida to expand highways in Fort Lauderdale and Orlando, and by the Port Authority of New York and New Jersey for a bridge to Staten Island. The new financing arrangement decreases the risk for operators, which include Madrid-based Ferrovial SA and Sydney-based Macquarie Atlas Roads Group, after at least 11 private U.S. toll projects since 1995 have struggled financially due to traffic not meeting projections….
…States are agreeing to make regular payments, often on a monthly or annual basis, provided toll-road operators build and maintain projects according to the contracts they negotiated. Under the arrangements, states receive toll revenue and have to augment it with money from their operating budgets should traffic fail to generate enough to cover costs. The terms typically call for the states to take over the roads after several decades….
Source: Ryan Dezember and Emily Glazer, Wall Street Journal, November 20, 2013
…The Beach Express bridge, in Orange Beach, Ala., served 2.3 million vehicles last year. Its owner, American Roads LLC, couldn’t meet debt obligations and filed for Chapter 11 bankruptcy protection this July…. Global investment firms such as Australia’s Macquarie Group Ltd. and Spain’s Ferrovial SA assembled toll-road deals, often financing them with heavy debt based on assumptions that rising toll receipts would cover payments. But the financial crisis and recession defied assumptions. U.S. driving peaked at 3 trillion miles in 2007, then started on its largest decline since World War II, federal data show. The housing bust crimped development plans along new roads, helping render traffic forecasts inaccurate. In the Beach Express’s case, a consulting firm hired by Macquarie projected traffic would hit 11 million vehicles this year on the bridge, which Macquarie packaged with the Detroit-Windsor Tunnel’s operator and three Alabama toll roads to create what would become American Roads. …
…A company that has had a deal to operate toll roads around Austin, Texas, since 2007, SH 130 Concession Co., recently consulted restructuring lawyers as it contends with a roughly $1.1 billion debt load and low cash, say people familiar with the company. In 2006, Indiana granted a 75-year lease of the Indiana Toll Road to a firm created by units of Macquarie and Ferrovial, whose joint bid of $3.85 billion was twice the value that state-paid consultants had calculated for the lease, state records show…
Still strapped for cash in the aftermath of the recession, states increasingly are partnering with private companies to build and maintain highways, prisons, water facilities, tunnels and even hospitals and schools. Since these partnerships began two decades ago, their popularity has increased to the point where today, two-thirds of the states have laws authorizing so-called “P3s,” and 24 states recently have considered legislation related to the partnerships, according to the National Conference of State Legislatures. ….. The biggest skeptics of the state public-private partnerships have in many cases been public labor unions, who see jobs going away, particularly as the result of private companies owning and operating public facilities.