Monday, August 29, 2011

Public/Private Partnerships

We believe strongly in the efficient governing of public lands and waters, as expressed in this editorial in the Sacramento Bee; but rather than defaulting to government solutions, efficient governing can also be obtained by partnering with business, as we are seeing with the new partnership between Sacramento County and Gibson Ranch Park LLC, which we noted previously.

Perhaps the public lands lease program can be contracted out more efficiently than managed in-house.

An excerpt from the Bee editorial.

“The people of California own the waters and beds of the state's rivers, streams, lakes, bays and estuaries. They own the waters and tidelands along the 1,100-mile coastline, out to three miles offshore. And they own lands granted by the federal government in 1853 to benefit public education.

“The State Lands Commission – composed of the current lieutenant governor (Gavin Newsom), controller (John Chiang) and finance director (Ana Matosantos) – manages these public lands.

“Some lands bring in considerable revenue from leases – $426.5 million last year. But, as a recent Bureau of State Audits report shows, they could bring in even more.

“Though California halted new offshore drilling leases after the 1969 Santa Barbara oil spill, existing leases continue to be the big revenue-generator for State Lands – $402 million in 2010-11. Most of the rest comes from marine terminals, industrial wharves, commercial marinas and pipelines.

“Yet the time lag between expiration of old leases and finalization of new leases means outdated rents can go on for years, a loss to the state.

“California's aggressive safety program – better than Texas and Louisiana – causes some of the lag; the state doesn't renew a lease without comprehensive environmental analysis. But, as the state auditor points out, expiring leases should have provisions for rent updates, so that delays in the lease renewal process don't cost the state revenue.

“For example, at the Tesoro Amorco and Avon marine oil terminals at Martinez, which have complicated issues, rent reviews have been approved and rent is up to date, though new leases aren't yet in place. Do this consistently.”