Wednesday, March 28, 2007

Public Private Partnerships

This is the type of partnership we would like to see the local governments adjacent to the Parkway, through the formation of a Joint Powers Authority (JPA) enter into with a nonprofit organization to manage the Parkway.

This is the arrangement already showing great success with our own Sacramento Zoo and in New York with the Central Park Conservancy.

In this months report from Senator Dave Cox, the partnership concept is discussed, and though it is in relation to transportation, it is a good look at the viability and success of such arrangements.

Public/Private Partnerships In Transportation

Last November, the voters of California passed the largest infrastructure bond package in the history of the United States. The passage of almost $20 billion for transportation alone was a tacit acknowledgement of the failure of traditional planning methods to keep pace with infrastructure demand. Although California spends roughly $11 billion a year in state and federal dollars to fund transportation programs, we have failed to meet the demands of our current population, let alone the five to seven million additional citizens the state will add over the next decade.

While vehicle miles traveled continues to grow exponentially, the amount of revenue collected by traditional funding mechanisms is failing to keep pace. The result has been a growing deficit in which $20 billion will barely put a dent. The result is that California, like many other states, is faced with a choice between finding innovative methods for building infrastructure, or allowing its transportation system to continue to decay.

One innovative method of developing infrastructure being discussed is public-private partnerships (PPP). PPP is a general term to describe financial arrangements in which private enterprises partner with governmental entities to provide a service typically provided by government.

PPP are far from a new concept. In fact, in the development of transportation facilities and public utilities, PPP was the standard practice until the 1930s. Prior to that period of government expansion, investment in massive public works facilities was accomplished through joint public-private ventures, such as the first intercontinental railroad.

There have been a number of successful PPP transportation facilities constructed that have provided state-of-the-art facilities at a fraction of the price to the public. The Route 91 Express Lanes in Orange County was the first public/private partnership completed in modern times in California. This toll road project is still profitable today, although it is now publicly owned.