While most agree that the economy is bouncing back, many organizations continue to operate with reduced budgets. Our national, state, and local governments are no exception. To complete necessary construction and maintenance projects, many public agencies are turning to more creative forms of financing, including the formation of public-private partnerships.
Public-private partnerships come in many different forms, but essentially one is created when a public entity enters into a contract with a private organization in order to address a specific need. Though not widely publicized, these partnerships are actually more common than you think. According to The National Council for Public-Private Partnerships, there are thousands in existence today, providing effective solutions to meeting public needs with quality services.
Public-private partnerships also allow public agencies to leverage limited resources and access the funds needed to complete high-cost, yet critical projects. Recently, Miron Construction established such a partnership with the City of Marion, IA to complete the construction of a new police station. The city’s current police station no longer provided the space needed for operations and evidence storage. Through a creative lease-purchase agreement, Miron was responsible for securing construction financing in exchange for ownership of the project site while the new station is being built. Once the project is complete and approved by the City, Miron will sell the property to the City’s trustee for the agreed-on contract price.
In addition to providing the upfront capital needed to complete construction of the station, the lease-purchase agreement also gave the City of Marion more control during the contractor selection process. But better access to capital and maintaining a high level of public control are just two advantages of a public-private partnership. Other benefits include: greater efficiency, improved compliance with environmental and workplace regulations, improved quality of service, and, in some cases, more cost-effective solutions.
Interested in learning more about public-private partnerships? The National Council for Public-Private Partnerships is a great place to start.