5 FACTS ABOUT PUBLIC-PRIVATE PARTNERSHIPS
1. Public-private partnerships are more common than you may think.
Public-private partnerships have been in use in the United States for over 200 years. This contractual arrangement between government entities and private companies for the delivery of services or facilities is used for water/wastewater, transportation, urban development, and delivery of social services, to name only a few areas of application. Today, the average American city works with private partners to perform 23 out of 65 basic municipal services. The use of partnerships is increasing because it provides an effective tool in meeting public needs, improving the quality of services, and is more cost effective.
2. They are an essential tool in challenging economic times.
Even in the best of times, governments at all levels are challenged to keep pace with the demands of their constituencies. During periods of slow growth, government revenues are frequently not sufficient to meet spending demands, necessitating painful spending cuts or tax increases. Public-private partnerships can provide a continued or improved level of service, at reduced costs. And equally important, they can also provide the capital needed for construction of major facilities. By developing partnerships with private sector entities, governments can maintain quality services despite budget limitations.
3. Drivers appreciate public-private partnerships.
These are not easy times for America's roads and highways. Increasing numbers of vehicles mean more roadway wear and tear and increasing traffic congestion. In states like California, Virginia and Washington, private sector companies are working with governments to build toll roads, making it possible to finance construction and upkeep without having to impose general tax increases. In jurisdictions nationwide, governments and private contractors are working to build new roads and expand existing ones to ease traffic congestion.
4. Clean, safe water through public-private partnerships.
The stringent health and environmental standards of the Safe Drinking Water Act and Clean Water Act have caused problems for some local governments without the budget flexibility to make major capital improvements in water and wastewater facilities. Public-private partnerships have enabled the construction of state-of-the-art water management facilities, while using efficient operations to hold down costs to ratepayers and provide a way of meeting those "un-funded mandates" from the federal government.
5. Governments themselves are the biggest supporters of public-private partnerships.
While there can be substantial misperceptions about the value of partnerships, a look at who endorses them should clarify the picture. Federal agencies like the Environmental Protection Agency, the Department of Defense, and the Veterans Administration all use partnerships. And the number of state and local governments using this tool is even greater. For example, the U.S. Conference of Mayors is enthusiastically working with private sector providers to discuss ways to make partnerships more effective. Numerous surveys indicate why governments traditionally realize cost savings of 20 to 50 percent when the private sector is involved in providing services.