Lessons Learned: Eno P3 Technical Assistance Awards to South Florida and DC
April 13, 2016|Emily Han
Public private partnerships (P3s) are increasingly becoming an option for infrastructure delivery in the U.S. To help states and localities tackle complex P3s, Eno’s Transportation Finance Working Group (formerly the P3 Working Group) has been carrying out P3 Technical Assistance Awards to localities across the country. Last summer, three winners were selected to receive a one-day P3 summit and an in-person course session about the P3 development process: Broward County government in Florida, the Office for P3s in the District of Columbia, and the Metropolitan Transportation Commission in the San Francisco Bay Area.
Eno’s Technical Assistance Awards are intended for state and local governments that have the interest and regulatory environment needed to pursue P3s, but may not have extensive experience within transportation agencies. To date, P3 summits have taken place in Broward County and D.C., with the summit proceedings now available on our P3 reference page. Our final winner, the Metropolitan Transportation Commission, will have their summit and course session in May.
Eno has produced written proceedings of the DC and Broward summits in order to provide lessons learned for other state and local governments interested in pursuing P3s but are uncertain about the next steps or particular processes to incorporate. While these summits focused on transportation P3s, many of the fundamental principles apply to other project types.
During the technical assistance sessions, two common themes emerged: developing internal processes and protecting the public interest.
Developing Internal Processes
For both DC and Broward County, developing the internal processes to successfully implement P3s was a key theme – albeit for different reasons. DC has recently formed its own Office of P3s and thus is in a position to establish not only new policies and processes, but also to build new interagency relationships. The success of these processes depends on having both skilled staff and qualified consultants, establishing standards to ensure projects are handled successfully, and understanding the market interests and stakeholder concerns in the DC region. Creating appropriate processes and interagency relationships also entails creating a paradigm shift; government agencies may be acclimated to the traditional procurement process but lack equally extensive knowledge about P3s.
For Broward County local governments, the success of any future P3s will depend on developing the appropriate internal processes, such as standards for evaluating proposals and negotiating contracts. This entails hiring staff and/or consultants who understand the complexities of P3s, as well as helping public agencies understand the differences between traditional procurement and P3s. Developing these processes may also benefit from implementing a key recommendation from Eno’s Partnership Financing report: creating a centralized office at the executive level, which can work across modes, rather than remain limited to modal silos.
The next steps for agencies to develop the needed internal processes for a new P3 initiative is to hire qualified staff and establish interagency relationships. While the effort put towards them is time and energy intensive, one summit panelist described this as “an upfront investment.”
Protecting the Public interest
As the P3 market continues to mature and interest in P3s grow among state and local governments, public support is key towards the success of P3s.
Florida has executed several successful P3s in the state, so Broward County local governments have the ability to learn from nearby projects such as the I-595 P3, which used extensive public outreach methods to ensure public support. Part of the reason that the I-595 project was able to achieve public success is due to support from the regional leadership at the Florida Department of Transportation. This leadership support was crucial for maintaining long-term support, in part because it lasts beyond the term limits of elected officials.
In addition, the I-595 P3 is a recent example of a project incorporating contract performance standards and metrics as part of linking compensation to the private company with project performance. These metrics can encapsulate a range, depending on the project type, be it linking the toll rates to the Consumer Price Index or establishing the minimum level of street lighting. All of this relates to the larger issue of whether the project is capable of meeting the public need through a P3; if a public agency doubts that a P3 asset would return in fair condition at the end of the lease, then it would be a question of whether that project is worth delivering as a P3.
In DC, its largely urban environment differs from other states that actively use P3s, such as Texas or Virginia. The discussion at the summit revolved around ensuring that any P3 project in the dense setting would require extensive public outreach and contractual performance measures to ensure private sector accountability. Contractual performance metrics can help quantify important factors that capture the neighborhood concerns as well as other project standards. However, it was acknowledged that there are challenges that come with data collection for complex factors, which will need to be overcome to make sure that the public interested is protected.
DC and Broward County are very different in terms of geography, jurisdictional dynamics, and local issues. However, their respective P3 summits have some common themes valuable for other state and local jurisdictions interested in P3s but lack the institutional knowledge. As the final P3 Technical Assistance Award concludes in San Francisco, Eno hopes to continue a dialogue that helps state and local governments thoughtfully navigate the complex world of P3s.
For additional information about the past work of the P3 Working Group, please contact Emily Han at email@example.com.
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