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New York City Launches Parking Meter Privatization Initiative

Posted on May 24, 2012, 7:00am | Leonard Gilroy

Last week, the Bloomberg administration in New York City announced plans to issue a request for qualifications from private bidders interested in a potential lease of the city's parking meter system, following in the footsteps of Indianapolis and Chicago, which have inked similar deals in recent years. This is a sensible move for NYC, as privatization can not only unlock value trapped in parking assets, but it can also provide a powerful means of deploying new, cutting-edge parking technology at a time when fiscal conditions prevent the city from making such investments on its own.

As Ted Mann wrote in The Wall Street Journal last week:

Officials said they are motivated in part by a belief that a private company could help alleviate some of the well-known frustrations of parking in New York: circling block after block in a search for an empty spot or dashing out in the middle of dinner to feed a meter.

Although other cities have embraced more driver-friendly technologies, New York has been slow to catch up.

The city's 7,800 muni-meters represent only a slightly more modern approach—they accept credit and debit cards—than the 31,000 single-space meters that gobble coins in boroughs outside Manhattan.

With enough incentive, officials believe, an outside party could come up with innovations for the Internet age, such as a system to pay with a smartphone or a mobile app that would direct drivers to vacant spaces detected through sensors in the pavement.

In the Bronx, the city Department of Transportation is running a pilot program to test pavement sensors, including whether they will work in New York's climate. But that is a small test, and broadening that program, or one like it, to the entire city could be risky and expensive.

"The odds are higher that [private companies] will move with greater alacrity," Deputy Mayor Robert Steel said.

A deal also could offer potential savings for the city on labor costs, but officials said it is too soon to say what a contract might look like.

[…] New York City officials said they aren't looking for an upfront balloon payment and wouldn't strike a deal that relinquished control over the setting of parking-meter rates—a key source of friction in Chicago.

New York's meters brought in $149 million in revenue in the last fiscal year, a spokesman for the city DOT said. Parking tickets are handled separately from meter operations, and neither enforcement nor parking-ticket revenue would be included in any privatization deal, a city spokeswoman said.

"We're not looking to sell out the system, which some people have done and which I don't understand at all," Mr. Steel said. "Our process has been to consider locking in the current performance, and, if it makes sense, transferring the risk to a third party."

[…] If the city's request for qualifications reveals suitable bidders, a request for proposals would follow, likely several months from now.

More here from Noah Kazis at Streetsblog, as well as this follow-up article from Mann.

Notably, the Bloomberg administration has been emphatic that if a deal is ultimately reached, the city will retain controls over parking rates and parking violation enforcement. Some journalists have misconstrued this to imply that similar deals in Indianapolis and Chicago lacked those controls, but that is not the case.

For example, Chicago officials authorized a set schedule of rate increases for the first five years of the 75-year lease term, and then rates are allowed to adjust annually beyond that with a maximum cap (capped by inflation). However, city council approval is required for any rate increase after the first five years. So the private concessionaire cannot just change whatever rates it wants; rates are controlled either in the contract (first five years) or must be approved by the city council (remainder of lease term). The Indianapolis privatization has similar rate controls.

Earlier this week, my colleague Harris Kenny posted his parking asset privatization update extracted from Reason Foundation's recently released Annual Privatization Report 2011 (APR2011). The article offers an update on last year's news from the Chicago and Indianapolis parking leases, and it also provides an overview of other governments' efforts in 2011 to explore similar parking transactions, including Los Angeles, Sacramento, New Jersey Transit and Pittsburgh.

Momentum appears to be continuing in 2012. In addition to New York CIty, some of the more notable developments thus far in 2012 include:

Ohio State University: As Harris noted in APR2011, last year Ohio State University officials released a request for qualifications—and approved seven potential bidders for—a potential long-term lease of its parking system, which would be a first-of-its-kind asset monetization by a public university. Last last month, OSU took the next step, issuing a request for proposals seeking at least $375 million in an upfront payment from a private operator in return for a 30-50 year concession. If a deal is finalized, then the school would put the entire upfront payment into its long-term investment pool to support the university's long term academic mission. Bids are due by the end of this month. More details are available on the university's parking proposal homepage. Predictably, students and professors don't like it.

Sacramento, CA: As Harris and I wrote back in March, officials in Sacramento had been pursuing a lease of its downtown parking meters and garages in order to help finance a brand new downtown NBA arena to try to keep the Sacramento Kings from leaving town. As we wrote, parking privatization makes sense on its own, but doing so in order to subsidize a boondoggle arena and its wealthy patrons does not. Luckily for Sacramento taxpayers, this arena deal crashed and burned last month, when the city and the Kings' owners reached an irreconcilable impasse in their larger negotiations to finance the arena. More details here. Interestingly, one media outlet reported recently that city staff have left open the possibility of a standalone parking asset lease to generate revenues for other capital assets.

Harrisburg, PA: The state receiver charged with paying down Harrisburg's staggering debt and closing structural budget deficits is pursuing several potential sales and long-term leases of city assets as part of the city's fiscal recovery plan, including a long-term lease to operate the city's system of parking garages, meters and surface lots. Back in March, the city's receiver shortlisted 12 of 18 potential bidders for a long-term lease of the city's parking assets, and last month nine of those bidders submitted responses to a request for qualifications. The receiver is expected to make a final selection by June. The state's Commonwealth Court must approve any final deal, and officials expect that the Court could make its determinations as early as late June.

Wilkes Barre, PA: Last Friday, the Wilkes-Barre City Parking Authority released a request for qualifications for a 30-year or 50-year lease of its 2,273 garage and surface lot spaces and 800 parking meters. It has also hired a parking consultant to help assess the potential value of its parking assets and prepare the RFQ. City officials are seeking an upfront payment of at least $20 million, and responses are due back by June 8, 2012. The RFQ is available here.

Reason Foundation has a lot of research available in its archive on the privatization of parking assets. For more, see here.

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Private Sector's Increasing Role in Infrastructure Investment

Posted on May 17, 2012, 9:16pm | Harris Kenny

Today my colleague Leonard Gilroy and I published a piece on Real Clear Markets entitled, "States and Cities Going Private With Infrastructure Investment," which explains "...that new infrastructure financing models and sources of capital will be the only viable option to support and sustain growth." The challenge is simple: while governments at all levels are strapped for cash and continue to feel the effects of the Great Recession, they face pressing infrastructure needs.

Enter the private sector, where investors are demonstrating a willingness and capability to partner with governments to modernize and expand infrastructure, according to Reason Foundation's recent Annual Privatization Report 2011. The report finds that the amount of capital available in private infrastructure equity investment funds reached a new all-time high last year. And since 2006, the 30 largest global infrastructure investment funds have raised a total of $183.1 billion dedicated to financing infrastructure projects; the bulk coming from U.S., Australian and Canadian inventors. In fact, eight major privately financed transportation projects were under construction in the U.S. in 2011 totaling over $13 billion.

Historically, U.S. policymaker interest in public-private partnerships has been in surface transportation, however 2012 ushered in a wave of new social infrastructure considerations (along the lines of what is already seen across in the developed world.)

For a preview of the future, just look to Puerto Rico, where innovative infrastructure financing has been a priority of Governor Luis Fortuño's administration. Prior to his tenure, massive budget deficits and weak credit ratings left the territory with a limited ability to finance infrastructure. In fact, public infrastructure investment (as a share of GDP) had been on a steep decline in Puerto Rico since 2000.

Put simply, if Puerto Rico was going to maintain-much less expand and modernize-its infrastructure, it was going to need outside help. Policymakers proactively adopted a 2009 law authorizing government agencies to partner with private firms for the design, construction, financing, maintenance and/or operation of public facilities across a wide spectrum that includes transportation, ports, schools and other asset classes. The law also established a Public Private Partnership Authority (PPPA), a new unit of the Government Development Bank, to conduct due diligence on these infrastructure partnerships and take worthy projects to market in competitive procurements.

The piece goes on to highlight promising new efforts in Chicago, Texas, Connecticut and elsewhere, continuing:

Puerto Rico isn't alone though. For example, Chicago Mayor and former Obama chief of staff Rahm Emanuel stood with former President Bill Clinton last month to propose an ambitious $7.2 billion infrastructure program that will rely heavily on public-private partnerships and private financing for a broad spectrum of projects including roads, water, transit and more. To implement this program, city policymakers recently created a new Chicago Infrastructure Trust, a nonprofit infrastructure bank that can package deals and blend public and private financing to advance projects. Early pledges of up to $1 billion in private capital from several financial institutions, including Citibank, Macquarie and JPMorgan suggest the model may be viable.

Elsewhere, both Texas and Connecticut enacted broad-ranging laws to authorize private sector financing for state and local assets in 2011. In New York, The Yonkers Public Schools recently hired a team of financial, legal and technical consultants to evaluate the potential to tap private financing to help deliver a $2 billion K-12 school modernization program. Like Puerto Rico, Yonkers has a number of aging facilities over 70 years old that need reconstruction, yet lacks the ability to undertake large-scale renovation through traditional taxes and bonds given current fiscal and financial constraints.

We ultimately conclude that, "Infrastructure represents the arteries and capillaries of our economy, and if we let those deteriorate, the heart itself will soon follow." Read the full piece available online here. For more on this policy area, read my colleague Leonard Gilroy's previous post on Puerto Rico here.

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Osceola County, Florida Library Partnership "Paying Dividends"

Posted on May 1, 2012, 8:48pm | Harris Kenny

In a recent Around Osceola op-ed, Osceola County, Florida Commission chairman John Quiñones writes, "A bold, ground-breaking partnership with a private company to operate the Osceola Library System passed its 100-day mark Sunday (April 15) and is already leading to reduced costs, a flow of new books and more access for all residents."

The piece continues:

Osceola County was the first in the state to enter into a relationship with a private company (Library Systems and Services Inc.) to manage the system. For this reason, I believe that funding and the future of the operation of our libraries are secure because of the Board of County Commissioners’ action. Residents need to know that there is plenty of good news about the Osceola Library System.

First, it’s about the books. Orders for materials have been going out regularly for the last eight weeks and shelves are filling up with bestsellers and new releases. More than 4,200 new items have arrived and more than 8,500 books have been ordered. 

Next, it’s about the people. The “Hot off the Press” program expands the availability of new books and bestsellers to library patrons, while maintaining the popular hold system.

Denise Galarraga, the new director, has already held meet-and-greets at each library branch. Library amnesty week included a “Fees for Food” program in partnership with the Green Bag Project that helped the community’s children in need.

What about the employees? I’m pleased to say that all of the Osceola Library System employees were offered positions with the new company and the majority accepted those offers. And all of the employees were hired at the same salary they had with the county.

The piece ultimately concludes, "Overall, I am confident that the Osceola Library System will continue its role of serving residents in a progressive and inclusive manner."

John Quiñones' op-ed is a must-read for anyone interested in understanding why public-private partnerships are a useful tool for local governments. Not only can they help cash strapped governments keep libraries open, they have proven to be an effective tool for improving the quality of library services too. For more on this issue, see my recent Innovators in Action interview with Osceola County commissioner Frank Attkisson here; and this excerpted section on library partnerships in California from Reason Foundation's Annual Privatization Report 2011.

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Chicago, Los Angeles, Tulsa and Jacksonville and Other Local Governments Turning to Privatization

Posted on April 30, 2012, 7:20pm | Harris Kenny

In case you missed it, the rollout of Reason Foundation's Annual Privatization Report continued last week with the release of the local government privatization section. This section details the latest trends and government reforms being implemented in cities across the United States.

For example, Chicago Mayor Rahm Emanuel recently announced a plan to raise $7 billion—largely through private financing—to rebuild the city’s critical infrastructure. Emanuel, former White House chief of staff to President Barack Obama, has followed the path blazed by former Mayor Richard Daley, who privatized dozens of city services, including long-term leases of Chicago’s parking meters and the Chicago Skyway toll road, during his tenure. Emanual also implemented a new competitive bidding program in recycling that has lowered costs by over $2 million in the six months since private companies started competing with city crews.

Last year in Los Angeles, Mayor Antonio Villaraigosa worked to advance public-private partnerships for city-owned parking garages, the Los Angeles Zoo, animal shelters and public art facilities. While Los Angeles hasn’t moved ahead on zoo reforms yet, Tulsa Mayor Dewey Bartlett successfully partnered with a nonprofit to privatize management of the Tulsa Zoo. Mayor Bartlett is pursuing an ambitious reform agenda with initiatives such as identifying underutilized city assets that could be closed (maintenance garages) and sold (over 500 city vehicles).

Similarly, new Jacksonville Mayor Alvin Brown is looking to partner with the private sector. Shortly after taking office in 2011, Mayor Brown created a new Office of Public Private Partnerships that’s currently exploring ways to reduce costs on city services and optimize public assets.

This section of the Annual Privatization Report identifies the privatization of parking garage and meter operation as an emerging local privatization trend of the past year, led by newcomer Indianapolis. New York, Sacramento, Pittsburgh, Memphis and Harrisburg are some of the cities that have also investigated parking privatization.

You can find the complete local government section of Reason Foundation’s Annual Privatization Report available online here.

» Annual Privatization Report 2011: Local Government Privatization

» Complete Annual Privatization Report 2011 homepage

 

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Denver's RTD Abandons Tax Hike for FasTracks

Posted on April 25, 2012, 12:56pm | Harris Kenny

Monte Whaley of The Denver Post reports:

A FasTracks proposal to link commuters in the northwest Denver metro area to downtown is stalled after the Regional Transportation District (RTD) board of directors decided Tuesday night not to pursue a tax increase in November that would fund the idea.

All 12 members of the RTD board said the timing is wrong for any kind of tax hike—which would have gone for to all unfunded and partially funded corridors—and there still remains too many questions about the plan.

This vote shelves an ongoing conversation about solving surface transportation needs in the Denver metropolitan area. In this piece I highlight two motivating factors behind their decision, and offer three takeaways for what to expect moving forward.

First, for those unfamiliar, I outlined the context of this vote in a reason.org commentary last month:

In 2004 voters in Denver’s Northwest Corridor approved raising a regional 0.4 percent sales tax, generating $894.6 million to build a Commuter Rail Transit (CRT) line known as the Northwest Rail Line by 2017. The proposed 41-mile diesel, 7-station diesel-powered (non-electric light rail) CRT would start at Denver’s Union Station and would have stations in Westminster, Walnut Creek, Broomfield, Louisville, Boulder, Gunbarrel and Longmont. The Northwest Rail Line is one piece of a larger regional transit program known as FasTracks...

Overall FasTracks is a multi-billion dollar transit expansion program that aims to ultimately comprise of 122 miles of CRT and light rail, 18 miles of bus rapid transit (BRT) and 21,000 new complementary parking spaces across eight counties. When voters approved FasTracks it was projected to cost $4.7 billion - these estimates have proven to be totally inaccurate.

Fast forward to spring 2012: FasTracks costs ballooned from $4.7 up to $7.4 billion and the system is not expected to be complete until 2042. Last year alone FasTracks' system-wide capital costs increased by $968.3 million and eighty five percent of that increase came from the Northwest Rail Line. The RTD Board of Directors weighed four options for the Northwest Rail Line that all hinged on ballot placement, and voter approval, doubling the initial FasTracks regional sales tax from 0.4 percent up to 0.8 percent. They pursued—and ultimately abandoned—a hybrid option prepared by the RTD staff that would have provided supplemental BRT from Westminster to Longmont until CRT was complete.

The RTD Board of Directors essentially punted on making a decision by abandoning the tax hike for the hybrid option, and they were primarily motivated by two factors.

  1. It's uncertain whether or not voters would approve a tax increase this fall. For example, last fall voters rejected Proposition 103, which would have collected an estimated $3 billion in tax revenue for education, by nearly 40 points. Gov. John Hickenlooper famously described the state of the electorate last fall saying, "There's no appetite for taxes anywhere, all over the state." In addition to their analysis and public outreach, RTD reportedly conducted telephone polling to gauge voter willingness to support a tax increase and they likely weren't encouraged by the results.
  2. Several board members expressed concern over the ambiguity of the proposed hybrid option. Board member John Tayer was quoted in The Denver Post saying, "I will not support going forward... until we have a specific plan and a specific time frame."

This vote is only a temporary setback, as the Board explains in a press release:

RTD will continue to work aggressively to seek alternative funding sources for the program including grants, public-private partnerships and unsolicited proposals. The Board will continue to explore pursuing a sales and use tax election in the future when the time is right for the region.

There are three takeaways from this vote by the RTD Board of Directors.

  1. It's only a matter of time before another revenue raising ballot measure is discussed for the Northwest Rail Line. Stakeholders along the corridor have expressed continued dismay over the fact that full service won't be provided until 2042 at the earliest.
  2. This may open the door for more innovative alternatives. Initial cost and completion projections have been totally inaccurate throughout FasTracks with the exception of one aspect: the Eagle P3 Project. The Eagle P3 project is a 34-year design-build-finance-operate-maintain (DBFOM) public-private partnership signed with Denver Transit Partners in July 2010. As mentioned above, RTD has signaled willingness to pursue similar public-private partnerships in their efforts to complete the line. RTD currently evaluating an unsolicited proposal for rail along I-225. 
  3. Finally, with more time, it's likely that officials will be convinced of the merits of BRT. A recently launched global database on BRT systems demonstrates their efficacy in 134 cities around the world carrying over 22.4 million passengers daily. U.S. BRT leaders include New York City, Pittsburgh and Boston. The Board considered BRT prior to choosing the hybrid option. Compared to the CRT option, the BRT option would have offered: an earlier competion date, more frequent on-peak and off-peak service and more frequent stops; while offering comparable travel times, costing half as much in the short run and requiring lower annual operation and maintenance costs in the long run.

This project is one to watch in the coming months and years ahead because RTD has signaled interest in the types of innovative alternatives that would meaningfully address the Denver metropolitan area's surface transportation needs—before 2042 and beyond.

For more on the Northwest Rail Line and FasTracks, see my previous posts here and here.

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Privatization and Public-Private Partnership Trends in Local Government in 2011

Posted on April 25, 2012, 12:00am | Harris Kenny

The rollout of Reason Foundation's Annual Privatization Report 2011 continues today with the local government section, which provides an overview of the latest on privatization and public-private partnerships at the local level. Highlights include:

  • 57 percent of city finance officers report their cities were less able to meet their financial needs in 2011 than in 2010 while general city revenues declined for the fifth straight year, according to the National League of Cities. This “new normal” fiscal condition is hitting local governments across the U.S. that continue to feel the squeeze of the prolonged economic downturn.
  • Chicago Mayor Rahm Emanuel, and former White House Chief of Staff to President Obama, hit the ground running during his first year in office. He implemented managed competition for the city’s Blue Cart recycling program allowing private companies to compete with the public sector, the move is projected to provide Chicagoans cost-savings exceeding 50 percent. The city began outsourcing the water bill call center in summer 2011 and is considering outsourcing the collection of city ambulance fees to improve collection rates.
  • Parking assets remain the hot item in local government privatization. Chicago and Indianapolis are realizing substantial gains from their reforms and were joined in 2011 by a host of cities (such as New York, Pittsburgh, Sacramento, Memphis and Harrisburg) that are considering similar efforts.
  • San Diego, California is finally implementing the managed competition mandate approved by voters in 2006. City employees won bids for the Publishing Services Department and Fleet Services Division, with new contracts expected to save y 30 percent ($5.2 million) and 13 percent ($22 million) respectively over the separate five-year contracts. Officials are also exploring street sweeping services, utilities call centers, street and sidewalk maintenance and landfill operations.
  • Toronto Mayor Rob Ford championed efforts to privatize trash collection in District 2 could save residents anywhere from $35-$92 million over the course of the seven-year contract. Half the city’s trash collection is now provided by the private sector, allowing for cost and service comparison before further privatization.
  • New mayors in Tulsa and Jacksonville have quickly moved to apply competitive forces to public service delivery. In Tulsa, Mayor Dewey Bartlett is implementing 1,134 strategic opportunities compiled by KPMG to realize cost savings, enhance revenue collection and improve efficiency. In Jacksonville, Mayor Alvin Brown appointed a new public-private partnership commissioner who will oversee a wide range of streamlining initiatives.
  • Contract cities in Georgia continue evolve, with the latest improvement coming in the form split service contracts that saved taxpayers almost 30 percent, or over $7 million, in Sandy Springs for example.
  • A 2011 survey conducted by American University found that 93 percent of city officials support government contracting with the private sector, and 63 believe that most public agencies do a good job at contract management.
  • Jefferson County, Alabama filed the largest government bankruptcy in American history. The county held approximately $4.23 billion in debt owed to more than 5,000 creditors that traced back to a 1996 federal judge ruling that obligated the county to rebuild its sewer system.

» Annual Privatization Report 2011: Local Government [pdf, 1.7 MB]

» Complete Annual Privatization Report 2011 homepage

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Innovators in Action: Osceola County, Florida Commissioner Frank Attkisson

Posted on April 13, 2012, 9:00am | Harris Kenny

In the latest installment of Reason Foundation's Innovators in Action series, I interview Osceola County, Florida Commissioner Frank Attkisson.

Osceola County policymakers faced few choices when, admist ongoing county-wide budget woes, the library system alone faced a $3 million budget deficit. In response, the Commission voted to approve the first-ever public-private partnership for libraries in Florida. They ultimately signed a five year contract that netted $6 million in savings with Maryland-based Library Systems & Services Incorporated (LSSI).

While the public-private partnership model is proven in states like California and Texas, this is a major move for Florida and one that is likely to be replicated by other local governments across the state. Here's an excerpt from the interview:

Kenny: The first concern that many people have when it comes to libraries is access. How did the commission address this concern and how might other policymakers address it?

Attkisson: If another commission wants to do this, the boogey man is going to come out and people will try to scare them. Elected officials control these contracts and the public trusts us to deliver value for their money. We (the commission) control the hours and set the standards. We know what it costs and want the private sector to help us realize our vision for our libraries.

The vendor has an option to set up ancillary businesses to provide additional services to users, like a coffee shop. Think about how much has changed in ten years. We didn’t have computers or Internet. Now it’s a given that you’ll have those resources. That’s totally different from the libraries of ten years ago. We were able to leverage procurement to achieve substantive goals.

You have to have the backbone to say it will take 3-6 months to transition. But I’m comfortable that once we do, nobody will want to go back because we’ll have more capability than ever before.

Read the full interview available online here. For more, see Reason Foundation's Innovators in Action 2012 series available online here.

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Innovators in Action: Carrollton, Texas City Manager Leonard Martin and Director of Competition Tom Guilfoy

Posted on April 5, 2012, 7:00am | Leonard Gilroy

In the latest installment of Reason Foundation's Innovators in Action series, I interview the Dynamic Duo of Carrollton, Texas: city manager Leonard Martin and director of competition Tom Guilfoy. Trust me—you don't want to miss this. There's a reason I call them the Dynamic Duo.

Ten years ago, Carrollton's city leaders charted a new direction for how the city would operate, directing administrators to transform the bureaucracy from a government culture to a competitive, business-like culture. Officials hired Martin to lead this change, and he created a new Director of Competition—the first both for the city and nation—whose sole purpose was to drive the city's culture to become competitive, either using in-house or external service providers to provide services to residents "cheaper, faster, better, and friendlier."

Martin and Guilfoy developed a robust managed competition program where all government service costs are fully burdened with overhead costs just like private businesses, and government compares their fully loaded cost of service delivery against private sector costs to seek the best provider. In some cases, this has led to re-engineering of city services, and in others, like solid waste collection and vehicle fleet maintenance, the city has turned to private service providers.

Overall, Martin and Guilfoy estimate that managed competition has saved the city $30 million over the last decade (and they add that it's a conservative estimate). Moreover, despite an increase of over 40,000 residents, the city still operates with about the same number of employees on the payroll in 1990, a testament to both the results of competition and the city's fiscal stewardship.

In the interview—available here—Martin and Guilfoy discuss the first decade of managed competition in Carrollton, the process used, and what it takes to create a culture of competition in city government. Here's a small excerpt:

Martin: [...] Government has been taught that there are only two options: raise taxes or cut services. You hear it in Washington. You hear it in the states and cities. No, there's another option: run it like a business and make it efficient. We don’t try to be everything to all people.

[...] Our exercise wasn’t really fancy. We took legal pads, put a line down the middle, and on the left side put essential services and on the right, non-essential. We listed out every service we did. The things we learned that we were doing were things we didn’t previously have a clue on, like the movies. We don’t need to go out and undercut businesses, so we just stopped doing some things. Another example is karate, where you can’t drive down the street and not see a school on every other corner. Yet city government was offering karate classes. And you’re out there with your black belt, paying your lease, paying taxes on your business that I get to keep to undercut you at the rec center.

I had an employee that defended it to me once, saying that there were people that couldn’t afford to go take karate. So I told him that was an excellent point that I hadn’t thought of. At the time George Bush was president, and I said, “I’m quite sure that President Bush had to know karate under the Constitution in order to run for president.” Because obviously if you’re going to be President then you have to know karate. I wanted to be an astronaut, and my town didn’t provide me astronaut training. It’s amazing I was able to become a city manager since my town let me down on astronaut training.

So that guy quit. I respect that person because they lived up to their principles. And I assure you that there were lots of places in government he could go that had that same philosophy: that anyone who wants something gets it. Not here. The council has stayed firm to our policies. We’ve known other places where the staff want to do managed competition, but the council doesn’t want to push on employees because the employees are viewed as a strong voting base. You see that especially at the state levels, where politicians cater to that state bureaucracy.

Our councils have not gotten into that, and they’ve stayed on firm ground and done what’s right for the taxpayer. You got people on the council that have been there for years and understand the culture and are proud of it. All of that takes some courage.

Read the rest of the article here. All I can say is that it's a must-read for anyone interested in what cutting edge city management looks like. One of the more interesting takeaways from the interview is that implementing tools like managed competition is necessary but not sufficient. To really streamline government and keep it lean, you need to change the culture of the bureaucracy. Martin and Guilfoy's insights on that subject alone are fascinating and, frankly, should be internalized by every public administrator (and politician) in the country.

With policymakers at all levels of government seeking ways to reduce spending and improve services delivered to taxpayers, Reason Foundation's Innovators in Action series highlights good government efforts that are delivering real results and value for taxpayers. It is our hope that that the examples and experiences offered by innovators like Martin and Guilfoy will inspire reform-minded mayors and administrators elsewhere to provide better, leaner and cheaper government to taxpayers.

[Note to readers: In previous years, we have published Innovators in Action in an annual report format, the last edition having been released in early 2010. The publication has been on a temporary hiatus since then, but we have resumed publication in a slightly different format. In order to deliver timely content to our readers on a more frequent schedule, we're publishing one Innovators article per month on reason.org. Other articles featured in the Innovators in Action 2012 series are available here.]

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Teachable Moment: Yonkers Evaluating Private Finance for $1.7 Billion K-12 School Modernization Program

Posted on April 3, 2012, 3:30pm | Leonard Gilroy

Call me crazy, but for years I've been scratching my head wondering why K-12 public school systems still rely on an antiquated 20th century model to build and maintain school facilities—one based on a combo of debt, taxes and inefficient contracting processes—when there are other options out there, like public-private partnerships (PPPs) that dial up the private sector's role in financing, delivering and maintaining assets. The transportation sector realized decades ago that PPPs offer a innovative way to deliver public infrastructure assets as needs grow and citizens' willingness to absorb new taxes and debt plummets.

It's taken some time, but it seems that K-12 schools are slowly starting to wake up to the emerging PPP opportunity as well. The most recent evidence comes from Yonkers, NY, where school district officials announced today that they've selected a team of financial, legal and technical advisors to evaluate the potential for using PPPs to deliver a whopping $1.7 billion in school construction and address a $460 million backlog in facility repairs. Today's press release offers more details, and a February Construction News article offered a good summary:

For a city chock full of hopes and dreams, Yonkers has enjoyed many groundbreakings over the years. There just may be another one on its horizon: the use of a public-private partnership, or P3, which its public school system is exploring as a means to finance some $1.7 billion in school construction.

If it happens, the Yonkers School District would be the first in the nation to engage in the much-discussed (and debated) P3 financing methodology for financing a public school project.

[pause] Close, but not quite right. Puerto Rico's "Schools for the 21st Century" project, currently underway, beat them to it. And that's just in the U.S. and its territories. Earlier this year, New Zealand announced a winning bidder for its pilot schools PPP project. Last summer, the U.K. launched its privately financed Priority School Building Programme. Earlier that year, the Netherlands-based Amarantis launched a PPP procurement for several schools. Those are just a few recent efforts; suffice to say that PPP schools are nothing new under the sun from a global perspective. Continuing on with the Construction News excerpt:

Yonkers Schools Superintendent Bernard Pierorazio and Joseph Bracchitta, chief administrative officer for the Yonkers Public Schools in a telephone interview with CONSTRUCTION NEWS, discussed the progress of the P3 initiative and the need for creative financing for the school district’s sizable capital project needs.

As initiatives are underway from the Governor’s office and others to propose and pass legislation that would allow public-private partnerships on construction projects in the state, the Yonkers City School District has the ability to “engage the private sector” through its Educational Construction Fund statute. To actually undertake a P3 for school construction work will most likely require some legislative authority from the state, Superintendent Pierorazio said.

[…] The need for creative financing is caused by the age of the schools in the City of Yonkers. The average age of a Yonkers school is 73. Its oldest building is 117-years-old and nine of its school buildings are over the age of 95. In 2009, the school district released a long range Educational Facilities Plan that identified at least $1.7 billion in construction needs (either school renovations or new construction), along with $460 million in emergency repairs.

School Superintendent Pierorazio said that studies show that the school district is short 5,000 seats for students and will be short by another 3,000 students by 2018- 2019. As part of the master plan, the Yonkers City School District has, for the last three years, been exploring the possibility of using public equity and public-private partnerships to fund its capital construction program. The only school districts to successfully complete projects via a P3 arrangement are in the United Kingdom and Canada.

“We felt at this point in time it would be the only way for us to do a massive refurbish and rebuilding of the district,” he said.

In November the school district issued an RFP for a consulting team to further explore P3s as a possible funding mechanism for the first phase of the capital construction project, estimated at about $700 million. A total of eight project teams responded to the RFP. The city expects to make a selection sometime in March.

[…] The P3 arrangement the school district is looking to structure is a “Design-Build and Maintain” with the private sector. The school district, which would retain ownership of the buildings and the properties, believes that by utilizing the P3 method it will be able to finance the capital program and achieve significant savings on the maintenance costs of the school properties.

Check out the District's original RFP here for more details.

Yonkers School District officials deserve kudos for taking a serious look at the PPP opportunity, and others should follow their lead because the long-term viability of the 20th century school finance model is questionable at best. And it's not just about dollars and cents. Puerto Rico PPP Authority executive director David Alvarez notes the real value play with the PPP model:

So at the end of the day, with this school program we're tackling infrastructure challenges, but the ultimate goal for us is to improve academic performance of students. We're trying to go in an indirect way towards academic performance by providing and delivering better infrastructure, with the goal for students to perform better at school—to keep more people in school and to get better results. That's the ultimate goal of the program, really.

Hopefully other school systems adopt the same forward thinking approach as Puerto Rico and Yonkers.

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Politics & Garbage Privatization in Norwalk, CT

Posted on March 21, 2012, 12:18pm | Leonard Gilroy

The public works director in Norwalk, Connecticut is making a case for privatization of waste collection, estimating savings of over $1.2 million in the first two years. Per The Daily Norwalk:

The city would save $360,000 in fiscal year 2012-13 if it were to outsource garbage collection, says Hal Alvord, director of the Department of Public Works. That figure would jump to $950,000 the following year.

If the plan is not approved, the council would need to add $800,000 to its 2012-13 budget, or the price of four garbage trucks. "Our newest truck is 12 years old," Alvord said. "If the truck is broken down by the side of the road or you can't get it out of the garage, the garbage isn't going to get picked up."

The cost of pickup by city workers would be $126 per household in 2012-13, Alvord said. This compares to $30 a household for recycling pickup, which is contracted to City Carting. Rowayton, which has contracted out garbage collection for decades, will pay $76 a household.

Eight public works employees are assigned to refuse. The city's garbage truck drivers get $30.64 an hour, and the laborers get $22.86 to $29.18 an hour. Private sector drivers get $20 to $23 an hour, and laborers earn $12 to $15 an hour.

The hourly rate does not include benefit costs, according to Jim Haselkamp, the city's personnel director. Alvord said benefits are equal to about 51 percent of a city worker's salary and 30 percent of a private contractor's salary.

"You can see right there, that's the basis for a big chunk of the savings," Alvord said. "Another big part of the savings that we get in Norwalk is from workers' comp from injuries."

Sanitation workers made up 10 percent of the public works staff from 2005 to 2010, but 42 percent of the workers' comp complaints came from the sanitation department. The regular sanitation claims totaled $538,000. Catastrophic claims – from employees whose injuries prevent them from returning to work – resulted in settlements of $1,206,115 to three people. A total of 1,400 work days were lost to sanitation claims.

[…] If the plan goes through, the eight workers would be reassigned as truck drivers and would be paid less. The city has agreed to give them a one-time lump sum payment of $7,000 as compensation, the amount of money they would lose over a year.

"We took this position on outsourcing solid waste because we had a way of continuing to provide that service to residents, to do it in a manner that provides significant savings of money and protects the jobs and health of our employees because nobody would get laid off," Alvord said.

Absent any other information, one might think that at the very least this might be compelling enough for city electeds to authorize a procurement. Remember that going to procurement means nothing more than just the government testing the market to see what kind of bids it gets back. They're not obligated to actually privatize anything if the bids don't pencil out or make fiscal sense. In fact, governments should be doing way more of this sort of bid process for public services, because at the very least—even if you end up not going to contract—you've still gotten a third-party, independent validation of your budget for that particular service, a comparative benchmark of sorts.

But so far, at least based on media reports, that kind of thinking doesn't yet seem to be at play with some of the electeds in Norwalk, who seem antsy amid current union bargaining. Cutting to the chase, from today's Daily Norwalk:

Alvord said last week that many council members had not heard the numbers in the case to outsource. He presented that case in an executive session.

"Clearly they don't understand," he said. "I don't know how anybody can sit here and say, 'I don't see any cost savings.' But, you know, some of these positions were set in concrete long before this."

In other words, pro-labor pols will argue the sky is red if that's the way to avoid privatization. When policymakers get so cozy with unions that even mentioning alternative management regimes that could benefit taxpayers is verboten/scary/heresy, then it's time for taxpayers to reassess the fortitude of their leaders. The unions aren't the root problem; it's electing sycophantic politicians that offer reflexive deference to labor interests over taxpayers.

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No Such Thing as a Free Parking Space

Posted on March 16, 2012, 4:12pm | Harris Kenny

While the benefits of market pricing are readily accepted for items like consumer electronics, it’s difficult for people to accept the value of pricing on things they think should be free to the user (i.e. parking, road use, etc.). To adapt Milton Friedman’s famous maxim: there’s so such thing as a free parking space. There are in fact a myriad of problems associated with underpriced and zero-priced goods. 

In the case of parking, Donald Shoup (parking guru and professor of urban planning at the University of California at Los Angeles) calculates that in some cases up to one-third of urban congestion is caused by drivers circling city streets to find a parking space. The lower rate of parking space turnover inhibits mobility making it more difficult to get from A to B. There’s also a lost opportunity to generate revenue that could be re-invested in infrastructure, like more parking.

Cities around the world are working to fix the problems associated with underpriced and zero-priced government-owned/operated parking assets. One approach being explored in San Francisco is variable market-based parking pricing. The program is known as SFpark and is being implemented by the San Francisco Municipal Transportation Agency (SFMTA). The premise is simple: use technology to allow variable pricing in urban parking. 

SFpark is accomplishing this goal by installing 8,300 wireless parking sensors for metered and unmetered parking spaces in eight pilot areas across San Francisco. Meters were also installed at the entrance and exist of several public parking garages, and separate control neighborhoods. Then, SFpark installed a data feed responsible for maintaining parking space sensors and meter data. Finally, the city replaced existing meters with new ones that accept joins, major credit/debit cards and SFMTA parking cards that operate for extending time limits. For more on the program, read my April 2011 reason.org commentary entitled “San Francisco’s Experimental Market-Based Parking Pricing Program” available online here.

It’s a logistically complex program highlighted by Michael Cooper and Jo Craven McGinty yesterday in The New York Times, they write:

It is too early to tell whether the program is working over all, but an analysis of city parking data by The New York Times found signs that the new rates are having the desired effect in some areas. While only a third of the blocks in the program have hit their targeted occupancy rates in any given month since the program began, the analysis found, three-quarters of the blocks either hit their targets or moved closer to the goal. The program has been a bit more successful on weekdays.

Of course, price is only one factor that influences behavior. About a fifth of the time prices rose but more spaces filled up, or prices fell but fewer people parked. And the full effects of the phased-in price changes have yet to be felt, because the most expensive spots cannot hit the $6-an-hour maximum until next year at the earliest.

So far so good. However some my critiques of the program from nearly a year ago still apply. As I wrote last April, By only using eight pilot areas, SFMTA is taking a gradual approach that excludes most destinations within the city, meaning many drivers’ behavior will not be impacted. It is also difficult to know what impact private parking garages may have in reducing the program’s efficacy, since private parking garage prices do not seem to be included in SFpark’s data feed. And lastly, SFMTA has severely restricted its ability to raise or lower prices in a dynamic way, meaning it will take a significant amount of time to equilibrate parking prices with demand.

San Francisco isn’t the only city exploring alternative approaches to urban parking. Another noteworthy approach is implementing long-term concession public-private partnership (PPP) agreements whereby the city transfers operation of city-owned parking assets to a private operator. These types of PPP agreements are being successfully leveraged in cities like Chicago and Indianapolis.

For more urban parking, see my previous reason.org commentary here, and reason.tv’s interview with Donald Shoup (below):

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Trenton, New Jersey Nearly Wiped Out by Fiscal Woes

Posted on March 15, 2012, 7:43pm | Harris Kenny

Earlier this week Alex Zdan of The Times of Trenton reported that in Trenton, New Jersey toilet paper and paper towel stocks dwindled as the city council butted heads with Mayor Tony Mack over the city’s paper products supply contract. The council voted twice to reject a $42,000 contract for paper products. They were able to reach a compromise however, Dave Warner of Reuters reports:

The great toilet paper crisis in New Jersey's capital city is over.

Police, firefighters and other Trenton city workers down to their last sheets as the result of a City Council budget battle were rescued late Tuesday by animal rights advocates who offered six months of free rolls printed with a message about filthy slaughterhouses and the resulting fecal matter found in meat.

New rolls of paper were expected to begin arriving in city offices and facilities on Wednesday, thanks to the donation from People for the Ethical Treatment of Animals and an emergency appropriation of $16,000 by the City Council.

All city facilities would have run out of toilet paper by week's end without the stop-gap measure, said city spokeswoman Lauren Ira.

Already, the men's rooms at police headquarters were bare and fire stations, senior centers, recreation facilities and City Hall itself were down to almost nothing after spending for new toilet paper was stalled in debate three times since it came up for a vote in November.

PETA's offer of a free six-month supply came with the condition that each sheet would read, "Slaughterhouses are so filthy that more than half of all meat is contaminated with fecal bacteria."

Mayor Tony Mack was happy with the offer, calling the toilet paper crisis a "fundamental issue in our community."

Stories like this read as if they’re on the front page of The Onion (a satirical newspaper); but all jokes aside, this flash crisis reflects how close some U.S. municipalities are to passing a fiscal tipping point. Trenton was recently featured in an episode of This American Life entitled “459: What Kind of Country” that focuses on how state and local governments across the country are struggling to pay their bills. The episode highlights that Trenton’s budget woes ultimately led policymakers to lay off one third of the city’s police force.

Trenton is not alone. Several nearby state capital cities (Harrisburg, Pennsylvania and Providence, Rhode Island) are suffering similar budget woes. All these cities demonstrate that irresponsible governance has serious consequences. For a chilling vision of what it looks like when policymakers can no longer kick the can down the road, see “Is Harrisburg’s Nightmare America’s Future?” (below) by reason.tv producer Jim Epstein:

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Sacramento City Council Proceeding with Arena Deal

Posted on March 8, 2012, 11:49am | Harris Kenny

The Sacramento Bee reports:

In a historic vote, the Sacramento City Council approved the financing plan Tuesday night for a $391 million sports arena in the downtown railyard.

By a 7-2 vote, the council accepted a nonbinding "term sheet" agreed to by city officials, the Sacramento Kings, arena operator AEG and the development firm slated to build the project.

Under the current term sheet taxpayers will be on the hook to give $255.5 million towards the arena project that’s projected to be complete by the 2015-6 NBA season. Most of that money is expected to come from parking revenue, while officials are considering additional opportunities for asset divestiture to make up the difference. Additionally the Kings will spend $73.25 million and the Anschutz Entertainment Group (that will operate the arena) will spend $58.75 million. Pre-development and revenue sharing agreements are still being written.

Until recently, privatization of parking assets has been widely discussed as the way to generate revenue for the arena deal. This policy tool has been proven in cities like Chicago and Indianapolis, and soon Sacramento is expected to issue a formal request for proposals (RFP) from eleven interested firms.

However officials are also considering instead creating a municipal finance authority that would retain public operation of parking assets. The municipal finance authority would then issue bonds to fund the arena project and rely on future parking revenue to pay the bonds. Negligible formal analysis has been conducted on how this alternative scenario might play out.

Comments made by Councilmembers that voted for the deal are basically indistinguishable, but comments made by the two Councilmembers that voted against the deal provide insight into legitimate concerns with the project. 

Councilmember Sandy Sheedy voted no saying:

What we have in front of us is an incomplete plan… that is going to scoop up every spare nickel and dime. I don’t think an arena is worth putting the city general fund at risk. I am not interested in pursuing the same path that has put Stockton on the verge of a bankruptcy.

Councilmember Kevin McCarty voted no saying:

At this moment, I don’t think this is a good enough deal for the city of Sacramento… What would happen if there are bad attendance numbers? A number of these deals around the country are based on rosy revenue projections. Our lingering city priorities, we can’t ignore them. They exist. At this time, I think the risk is too great, and the rewards I don’t think are there at this current date.

Councilmembers Sheedy and McCarty echoed concerns that my colleague Len Gilroy and I outlined in a March 2, 2012 op-ed in The Sacramento Bee entitled, “Privatize Parking, But Not for the Kings.” We wrote at the time, “Despite arena boosters' rosy claims, research shows subsidizing new professional sports arenas is bad business for taxpayers.” We go on to explain that instead:

Sacramento could invest the parking lease revenue to build infrastructure and transportation projects, pay down city debt or even shore up underfunded public employee pensions. Any of these steps would put the city on significantly better fiscal footing and deliver greater long-term benefits to taxpayers than the arena.

For more, read the full piece available online here or here.

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[Op-Ed] Privatize Parking, But Not for the Kings

Posted on March 3, 2012, 3:38pm | Harris Kenny and Leonard Gilroy

Sacramento is on the verge of becoming the third U.S. city to privatize its parking assets. As my colleague Leonard Gilroy and I explain in our recent op-ed in The Sacramento Bee entitled "Privatize Parking, But Not for the Kings":

Sacramento's burning desire to keep the Kings in town has the city considering privatizing its parking meters and garages. By itself, the plan to bring the private sector in to modernize and operate the city's parking assets would be a good one. But taking the proceeds from a privatization deal to help build an arena and subsidize an NBA team is not.

The City Council recently voted unanimously to see which companies might be interested in operating the nearly 13,000 city-owned metered parking and garage spaces. Privatizing city parking assets makes a lot of sense. Cash-strapped governments do a poor job of maintaining and modernizing parking meters and facilities. And urban parking rates are rarely what they should be because few politicians want to be blamed for raising parking costs.

The piece goes on to detail successful public-private partnerships for surface transportation projects, such as parking assets in Indianapolis and the Indiana Toll Road. Next we debunk arguments for using parking proceeds to finance the arena:

First, taxpayer subsidies to the arena are likely to be higher than advertised. In a 2005 study of major U.S. professional sports stadiums and arenas, Harvard University's Judith Grant Long found each NBA arena costs taxpayers $53 million more than advertised due to unexpected operating costs, capital improvements, municipal services and forgone property taxes that weren't accounted for in initial projections. Grant Long found that, across all major professional sports, taxpayers end up paying an average of 40 percent over initial facility cost projections.

Perhaps worse than the hidden costs, a large body of academic research suggests that sports arenas are economic losers for cities. A study by researchers from Vanderbilt University and Smith College found "there is no correlation between sports facility construction and economic development." Arenas tend to simply reallocate what's already there, as opposed to drawing new jobs and money into the local economy.

Finally, we conclude:

Sacramento could invest the parking lease revenue to build infrastructure and transportation projects, pay down city debt or even shore up underfunded public employee pensions. Any of these steps would put the city on significantly better fiscal footing and deliver greater long-term benefits to taxpayers than the arena.

Government should focus on what is essential. It shouldn't be in the business of building NBA arenas. And it shouldn't run parking meters and garages, either. The current arena plan to do both is a steal for the Kings and an air ball for taxpayers.

Read the full piece available online here. For more on leveraging parking assets through public-private partnerships, see here, here and here.

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Innovators in ActionReforming Local Government in Colorado Springs

Posted on February 14, 2012, 5:00pm | Harris Kenny

As is often documented here on Reason Foundation's Out of Control Policy blog, the Great Recession gut checked federal, state and local government budgets across the United States. Overspending finally caught up to state capitols and many policymakers realized how vulnerable their budgets were (and still are) to economic uncertainty. However, policymakers weren’t the only ones who noticed. In Colorado Springs, concerned citizen and president of The Broadmoor Hotel, Steve Bartolin, wrote a letter to then Mayor Lionel Rivera criticizing the city’s unsustainable fiscal policy and lack of transparency.

At the time, Colorado Springs faced two major long-term issues: First, unsustainable fiscal policy exacerbated by a lack of transparency; and second, burgeoning civil employee pension liabilities that are outside the control of local government [civil servants are part of the state’s Public Employee Retirement Association (PERA)]. These concerns, combined with citizen dissatisfaction, created a distrustful environment blocking meaningful government reform.

Letter writing was a respectable start, but that's not where Bartolin's efforts ended. Bartolin’s letter ultimately rallied community, business, and political leaders (like former City Councilman Sean Paige), who partnered to create The City Committee in 2010. The City Committee is a nonprofit, nonpartisan civic organization focused on applying best business practices to improve the operators of Colorado Springs' city government and its enterprises.

I recently sat down with Chuck Fowler, CEO and Chairman of The City Committee, where he discusses the formation of the organization, the changing structure of city government in Colorado Springs, and future government reform efforts in store for The City Committee. Here's an excerpt:

Kenny: Do you have any recommendations for concerned citizens who might be interested in starting something like The City Committee in their community?

Fowler: First, the common thread is the recognition there's a problem. Second, that it's time to do business differently. Every community is different and the variables that have shaped communities over time are what make them different. Recognition of the problem and willingness to find the courage to make changes is what will bind communities together. Communities need to find their collective courage, tear down their silos, to look at the issues they’re confronting in a realistic way, which I think if one trusts the current economic forecasts its going to be a while before governments have the type of revenue that they enjoyed the past few decades—something’s got to give. 

Growing the revenue to government enterprises is less likely of an outcome than a reduction of public services by the government. The only way to pay for a level of service that some have come to expect from government is to question: is this something government should do? And if it is, maybe their role is to oversee procurement to give the private sector the privilege to provide these services competitively. This practice is widely known as managed competition.

Economic cycles come and go. Financial tides rise and fall. At this moment in our country’s unique economic and political history, all citizens—whether individuals, businesses or public servants—can and should participate in redefining appropriate solutions for more effective and efficient government. American ingenuity has always led to innovative solutions. That’s foundational to the mission of the City Committee. 

Read the full interview available online here. For more, see Reason Foundation's full Innovators in Action 2012 series available online here.

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NYC Parking Under Bloomberg: Bright Potential, Blighted Past

Posted on February 3, 2012, 7:41pm | Harris Kenny

This morning Juan Gonzalez of the New York Daily News writes:

The firm that built and manages the new Yankee Stadium parking garages can’t repay $237 million in tax-exempt bonds the Bloomberg administration arranged for it four years ago, new financial records show.

Bronx Parking Development Company LLC is running perilously low on cash reserves and faces a looming default by the end of the year, according to a report filed Friday by a trustee for the firm’s bondholders.

Time is running out, in other words, to avoid one of the biggest failures in decades of bonds issued by a New York City agency.

The simple fact is that Bloomberg and his aides made a costly mistake when they succumbed back in 2005 to the Yankees’ demand for a 9,000-space garage system. It was all part of the deal for the team to build a new stadium in the Bronx.

But Yankees fans have shunned the garages, where gameday self-parking rates soared last year to $35 — up from $23 previously and more than double the original $14 charge. Valet parking now goes for $48.

Gonzalez also notes that Mayor Bloomberg's aides say any losses will have to be borne by the bondholders, and deny pledging to back the bonds through the Mayor's office or through the city's Industrial Development Agency. This tune rings all too familiar. Economic development deals that seem "too good to be true" often are. However, there is a kernel of optimism in that the Mayor's office is considering leveraging additional city parking assets that actually would create value for residents and motorists.

This past spring, the New York Economic Development Corporation issued a request for expressions of interest asking for ideas on how “to develop new sources of revenue (and restrain costs).”  Marc LaVorgna, a spokesman for the Mayor, explains, “We’re seeking a partner to help us reduce the costs or bring in revenue and one area is parking meters.” Bloomberg News Service also found that last year the city earned over $140 million in revenue from its 49,989 parking meters and 48,854 ticket issuing muni-meters, while collecting $575 million in parking violation fines.

Bloomberg clarified his interest in privatization during a February appearance on WOR 710 AM saying “We’re not going to turn over the right to set parking rates or set the fines or that sort of thing, but installing and maintaining equipment, there’s nothing magical about that.” The city is also considering privatizing six city-owned vacant lots.

The botched sweetheart deal for parking lots by Yankees Stadium was a mistake, and indeed it serves as a cautionary tale. However, Bloomberg's new approach to managing parking assets has been done effectively around the world and should not be lumped in with the Yankees Stadium deal.

Take Vancouver, whose officials are effectively leveraging both dynamic pricing and public-private partnerships to improve parking infrastructure. Donald Shoup, parking guru and professor of urban planning at the University of California at Los Angeles, recently described Vancouver's parking to Jeff Lee of The Vancouver Sun saying:

"The reason for getting the right price is that the wrong price does so much harm. Nothing is so poorly managed as parking. Vancouver and Canadian parking companies are at the forefront of [accurate pricing for parking]."

Lee also interviewed Neil Podmore, vice-presdient of business development for Vancouver-based PayByPhone, Podmore described Vancouver's parking saying:

"I think Vancouver has actually been ahead of San Francisco and L.A. for a long time. They realized that on-street parking was a valuable commodity, that it ought to be broadly market-based and they haven't thrown a lot of money into technology..."

"There is a big question in the industry as to whether you need to invest $10,000 per parking space in order to get near-real-time-based parking. Vancouver hasn't gone that way so they've been efficient with the money they spend for the money they get."

While policymakers in cities like Vancouver, San Francisco, Chicago, and Indianapolis are implementing innovative improvements to their parking infrastructure, policymakers in New York City and elsewhere would be wise to catch up before it's too late.

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Innovators in Action (Jan 2012 edition): Tulsa, Oklahoma Mayor Dewey Bartlett, Jr.

Posted on January 13, 2012, 12:02pm | Leonard Gilroy

In the latest installment of Reason Foundation's Innovators in Action series, Tulsa, Oklahoma Mayor Dewey Bartlett, Jr. offers his reflections on tackling the city's fiscal challenges by embracing innovation, competition and market-based policies. In the article—available here—Mayor Bartlett details the bleak fiscal situation his administration walked into two years ago, his proactive approach to developing solutions and a number of the administration's implementation successes to date. In short, Mayor Bartlett is applying the tools of competition—such as competitive sourcing and public-private partnerships—to deliver better value to taxpayers and right the city's fiscal course.

An excerpt from Mayor Bartlett's article:

My first day in office was December 7, 2009. My finance director greeted me with the sober news that, after ten consecutive months of declining sales tax revenues, all previous measures to balance the city budget had failed to stop the real threat of deficit spending. Even though the previous administration had cut $10 million dollars in spending and had used almost $11 million of the reserve fund, my management team and I had 45 days to cut an additional $10 million from the operating budget. In total, this amounted to between 10% and 15% or $24 million of the operating budget.

Reductions by the previous mayor had included discontinuing public safety academies, turning off highway lights, grounding the police helicopters, and suspending the removal of graffiti and the mowing of public property. Even with city employees being furloughed eight days and the previous administration having spent 80% of the city's reserve fund after just five months of the fiscal year, more and bigger pain was on the immediate horizon. Defaulting on obligations was more real than at any time in Tulsa’s history.

We quickly discerned that the city government had not prepared for times such as these. City government had grown too big, it cost too much, it was doing too much, and it had made commitments and promises to our government employee unions that could not be kept.

[…]

With the help and guidance of my chief of staff and management team we have accomplished major changes after only two years. Over that time Tulsa has resumed both police and fire academies, the police helicopters are flying again, the highway lights are back on and the efforts toward mowing public property and removing graffiti have doubled. All of the employee furlough days have been eliminated, and for the first time in several years, the employees received a stipend increase in June. The reserve fund balance has been restored to almost $13 million and we continue to control our overhead cost by maintaining a 3% vacancy rate across all city departments. And, for the first time in memory, the city has reached collective bargaining agreements with all five of its bargaining units at the beginning of the fiscal year.

The secret of our success really is no secret. It takes applying conservative business and financial principles to government, the courage and political will to tackle the toughest of challenges, willingness to embrace innovation, competition and private market ideas.

Read the rest of the article here for Mayor Bartlett's detailed description of how his administration has gotten from there to here. He describes over a dozen different administration initiatives that span a broad range—from competitive service delivery to public-private partnerships to asset divestiture to implementation of internal efficiency initiatives. It's an impressive and ambitious agenda illustrative of the kind of thinking that will be critical to future public sector management. If you're not familiar with Mayor Bartlett or his reform agenda, you definitely should be.

With policymakers at all levels of government seeking ways to reduce spending and improve services delivered to taxpayers, Reason Foundation's Innovators in Action series highlights good government efforts that are delivering real results and value for taxpayers. It is our hope that that the examples and experiences offered by innovators like Mayor Bartlett will inspire reform-minded mayors and administrators elsewhere to provide better, leaner and cheaper government to taxpayers.

[Note to readers: In previous years, we have published Innovators in Action in an annual report format, the last edition having been released in early 2010. The publication has been on a temporary hiatus since then, but we are resuming publication in a slightly different format. In order to deliver timely content to our readers on a more frequent schedule, henceforth we plan to publish one Innovators article per month on reason.org, which will subsequently be compiled into a report format later in the calendar year.

Mayor Bartlett's article is the second in the 2012 Innovators in Action series. The first—my interview with Puerto Rico Public-Private Partnerships Authority executive director David Alvarez last fall—is available here.]

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University of Kentucky Smart to Explore Private Sector for New Campus Housing

Posted on December 15, 2011, 10:50am | Harris Kenny and Leonard Gilroy

As my colleague Leonard Gilroy and I explain today in our Reason.org commentary, University of Kentucky Smart to Explore Private Sector for New Campus Housing, ongoing state budget deficits and challenges are putting pressure on state university systems and prompting them to explore ways to cut costs. Higher education officials are desperately seeking ways to keep services, maintain facilities and find less costly and more efficient ways to build and modernize the dorms, academic buildings and other capital intensive facilities needed.

To do this, some are turning to public-private partnerships (PPPs), arrangements in which public entities contract with private sector firms for the financing, design, construction, operation and/or maintenance of public assets. The University of Kentucky (UK) may become the latest university to embrace public-private partnerships. Yesterday, the university announced that UK President Eli Capilouto told its board of trustees the school would begin negotiations with a Memphis-based company to potentially upgrade and expand over 9,000 residence hall beds over the next decade.

Other noteworthy universities that have explored this approach to student housing include:

  • Florida Atlantic University;
  • University of California Davis;
  • University of Arizona; and
  • Montclair State University.

As we explain in the piece, there is a growing body of research that demonstrates the public-private partnership model makes sense. A 2007 Reason Foundation study, Privatizing University Housing, outlines the long-term land lease approach that is commonly used. Meanwhile a June 2010 white paper Bay Area Council Economic Institute found that PPPs can deliver 15-30 percent life-cycle cost savings for operations and maintenance.

For more, read the full piece available online here.

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Baltimore Continues Pursuit of Private Partnerships for City Rec Centers

Posted on December 5, 2011, 6:25pm | Harris Kenny

This summer Baltimore, Maryland Mayor Stephanie Rawlings-Blake’s Recreation Center Task Force focused on saving the city’s 55-facility recreation (rec) center network by identifying $300,000-$400,000 in annual cost savings through public-private partnerships (PPPs). If implemented, the Recreation Center Task Force Report published August 19, 2011, would have ensured:

  • All City recreation centers would have remained open with current operating hours through summer/fall 2011. No recreation centers are planned to close this year;
  • There would have been no layoffs of existing recreation center staff;
  • Recreation center staffing and hours would have been increased at most City centers;
  • Baltimore City Recreation and Parks would have appropriateed over $14 million within the next two years to build new community centers and extensively renovated certain existing centers; and
  • The Department would have implemented charter center, collaboration, and partnership programs at up to 25 existing centers.

The full Recreation Center Task Force Report is available online here.

Mayor Rawlings-Blake applied the Task Force’s recommendations and issued a Request for Proposals (RFP) (posted online here) for three-year contracts to “stabilize recreation facilities and move them towards safer, more encompassing community centers with expanded services available through partnership based on financial reality.” Only five bids were accepted as meeting minimum city requirements; however even if they were all accepted, 18 rec centers would still have to be closed.

Mark Reutter of The Baltimore Brew reported today that a second RFP was issued Friday December 2 identifying 18 specific rec centers for private operation. This second RFP represents a modest scaling back of Rawlings-Blake’s pursuit of PPPs for city rec centers. According to The Baltimore Brew, the most concentrated number of parks identified in the second RFP are located in northeast Baltimore. Further, two previously closed parks (the ex-Police Athletic League Center in West Baltimore and the Bocek Rec Center in far East Baltimore) could be reopened through PPPs.

If a PPP agreement can’t be reached, the city will only have enough funding for 25 recreation centers on January 1, 2012 when funding would be reduced by a final total of nearly $520,000.

Baltimore is not alone in exploring this innovative approach. Local government policymakers across the country have implemented PPPs to keep parks open during economic downturns. For several PPP success stories, including New York City’s famous Central Park and Bryant Park, see my previous posts here and here.

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"The Folly of City-Owned Parking Garages"

Posted on October 18, 2011, 5:15pm | Harris Kenny

Parking privatization has found an unlikely ally in Matthew Yglesias, fellow at the Center for American Progress Action Fund. Yesterday Yglesias posted a piece entitled "The Folly of City-Owned Parking Garages" that includes arguments for parking privatization that should sound familiar to regular readers of Reason Foundation's Out of Control Policy Blog, he writes:

Clearly, the ability to park one’s car is valuable. But that’s precisely why there are privately owned garages around to create competition. This is a service that can be provided at market prices for a profit. Alternatively, office developers or retail businesses may construct garages for their own use to encourage customers to show up. The availability of garages does create positive externalities for area businesses, but these can (and often are) re-internalized through deals to provide free or discount parking to people with validation from a nearby retailer. Parking is great—great enough to pay for.

There are parts of Yglesias' piece that miss the mark, but overall it is encouraging to see broadened support for privatizing services that are clearly not a core function of government.

Reason.tv recently sat down with Donald Shoup, economist at the University of California: Los Angeles (UCLA), to discuss this very subject:

For more of Reason Foundation's work on parking privatization, see my colleague Leonard Gilroy's writing here, here and here."

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Harrisburg, PA Declares Bankruptcy - Who's Next?

Posted on October 12, 2011, 2:54pm | Harris Kenny

November 11, 2011 Update: For an update on this topic, see "Jefferson County, AL Declares Bankruptcy - Muni Bankrupty Wave Coming?"

Mark Scolforo of the Associated Press reports:

Pennsylvania's financially distressed capital city is seeking Chapter 9 bankruptcy, citing overwhelming debt, but Harrisburg's mayor and top city lawyer said the filing signed by a City Council member was not legal.

The petition docketed by U.S. Middle District bankruptcy court Wednesday listed about $458 million in creditors and claims, and said the city faced "imminent jeopardy" from six pending legal actions by creditors related to a debt-saddled trash incinerator.

"The city does not have the ability to pay those money judgments or any significant portion thereof and still provide health and safety services to its citizens and other essential government services," wrote attorney Mark D. Schwartz, who did not immediately return messages seeking comment...

A spokesman for Mayor Linda Thompson said Wednesday the council lacks the legal authority to seek bankruptcy.

"There are procedural matters the solicitor objects to, as far as how the resolution was handled, and the quote-unquote hiring of counsel," said Robert Philbin, Thompson's communications director. "The solicitor also says only the mayor, in conjunction with the solicitor, can file for bankruptcy on behalf of the City of Harrisburg."

Harrisburg's bankruptcy filing will likely be decided in the courts and regardless of the outcome the process itself will be revealing. As I wrote last month, Harrisburg's political leaders have been unable to reach a compromise - over the last few months the City Council rejected Mayor Thompson's fiscal rescue package twice.

Harrisburg is not the only municipality suffering fiscal woes. Recent analysis by Charles Stockdale of 24/7WallSt highlights nine municipalities, "with the worst credit ratings assigned by Moody's, not including school systems, rated Ba2 and lower." Interestingly Harrisburg was not included, but one of these municipalities may be the next to declare bankruptcy:

  1. Central Falls, Rhode Island
    • Credit Rating: Caa1
    • 2009 Revenues: $17,601,000
    • 2009 Debt: $18,753,000
    • Median Household Income: $33,520
  2. Pontiac, Michigan
    • Credit Rating: Caa1
    • 2009 Revenues: $46,183,000
    • 2009 Debt: $99,115,000
    • Median Household Income: $32,199
  3. Jefferson County, Alabama
    • Credit Rating: Caa1
    • 2009 Revenues: $309,440,000
    • 2009 Debt: $1,337,233,000
    • Median Household Income: $44,718
  4. Harrison, New Jersey
    • Credit Rating: Ba3
    • 2009 Revenues: $32,763,000
    • 2009 Debt: $92,613,000
    • Median Household Income: $49,596
  5. Detroit, Michigan
    • Credit Rating: Ba3
    • 2009 Revenues: $1,280,791,000
    • 2009 Debt: $2,449,480,000
    • Median Household Income: $29,447
  6. Salem, New Jersey
    • Credit Rating: Ba3
    • 2009 Revenues: $7,059,000
    • 2009 Debt: $10,098,000
    • Median Household Income: $28,397
  7. Riverdale, Illinois
    • Credit Rating: Ba2
    • 2009 Revenues: $8,358,000
    • 2009 Debt: $9,350,000
    • Median Household Income: $40,659
  8. Strafford County, New Hampshire
    • Credit Rating: Ba2
    • 2009 Revenues: $36,204,000
    • 2009 Debt: $23,866,000
    • Median Household Income: $58,363
  9. Camden, New Jersey
    • Credit Rating: Ba2
    • 2009 Revenues: $181,257,000
    • 2009 Debt: $103,284,000
    • Median Household Income: $25,418
See Stockdale's full analysis here. For more on Harrisburg's fiscal woes, see my previous post here.
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Gov. Brown Signs Controversial AB 438, Imposing Restrictions on Local Gov'ts

Posted on October 10, 2011, 11:24am | Harris Kenny

This weekend California Governor Jerry Brown signed 33 bills into law and vetoed 15 bills, included among the signed bills is the controversial Assembly Bill 438. As I wrote in a September Orange County Register op-ed, AB 438 will prevent cities from making choices about what is best for their own libraries. The bill imposes a litany of regulations that will make it more difficult for cities to find ways to reduce operating expenses and keep libraries open by partnering with the private sector.

Gov. Brown’s decision to sign this bill comes as a surprise since the chorus of opposition to AB 438 grew louder over the past few weeks. Noteworthy opponents include the League of California Cities, Santa Clarita Mayor Marsha McLean, State Senator Bob Huff (R-Diamond Bar), The Oakland Tribune editorial board, and others.

This decision reveals a bizarre dichotomy in Gov. Brown’s treatment of local governments. Earlier this year the governor responded to the Supreme Court’s Brown v. Plata decision by signing AB 109 into law, which enables tens of thousands of inmates kept in state facilities to be transferred to county facilities. Local governments are being forced to care for inmates that Sacramento can’t handle, but in the same breath those same state lawmakers declare that local governments can’t apply a form of privatization to their own local libraries?

Thanks to AB 438, counties and cities are now more likely to close libraries than keep them open by partnering with the private sector. Instead, they will be pouring resources into caring for inmates that are incarcerated under misguided state criminal sentencing law.

For more on AB 438 see my full op-ed entitled “Democrats dump on private libraries” here, and my previous blog post here. For more on AB 109 see my previous blog posts here and here.

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[Op-Ed] Democrats Dump on Private Libraries (with California AB 438)

Posted on September 15, 2011, 3:09pm | Harris Kenny

California Assembly Bill 438 is expected to land on Governor Jerry Brown’s desk later this week. The bill, sponsored by Assemblyman Das Williams (D-Santa Barbara), would prevent cities from making choices about what is best for their own libraries. The bill includes a litany of regulations that would make it more difficult for cities to find ways to reduce operating expenses and keep libraries open by partnering with the private sector.

In my latest op-ed entitled “Democrats dump on private companies,” published in today’s edition of The Orange County Register, I write:

(AB 438) represents a dramatic overreach by Sacramento into local communities. Via AB 438 the Legislature mandates that cities choosing to privatize are not allowed to reduce the size of their library staffs. Further, the bill mandates that every single current library employee must keep his or her job in any future public-private partnership agreement, which explains why powerful unions have been pushing the bill. Cities will also be forced to spend time and money preparing and submitting studies and reports to Sacramento in order to obtain the state’s permission to privatize.

The piece then highlights a broad coalition of opposition to AB 438. Dan Carrigg of the League of California Cities recently said, “We hope the governor will veto the bill, since he has talked a lot about the importance of retaining local authority.” Santa Clarita Mayor Marsha McLean recently wrote in a Pasadena Star-News op-ed, “In an era of diminishing funding for local government services and overextended budgets, contracting for library services is one way to improve libraries, while reducing the tax burden on our residents. … It is ironic that supporters of AB438 would take decision-making out of local communities and place it in the hands of state legislators and special interests.” California State Senator Bob Huff (R-Diamond Bar) has also come out against the bill saying it ties local governments’ hands.

The chorus against AB 438 gets louder by the day. Earlier this week The Oakland Tribune included AB 438 in their list of “Four bills that need Gov. Brown’s veto,” writing:

(AB 438 is) designed to prevent public libraries from privatizing any of their services. It would force private firms that provided library services to pay union rates and obey union rules. The reason some cities have sought to privatize some library operations is because they cannot afford the costly union rates in a time of economic hardship.

AB438 most likely would prevent cities and counties from expanding or even maintaining current library services as local government revenues shrink.

My piece concludes:

The Legislature has no business micromanaging local libraries. Gov. Brown one recent day vetoed 12 bills, 11 of which were sponsored by his own Democratic Party. Unless he wants to be the state’s librarian, the governor should veto this bill, too.

So how about it, Governor?

Read my full op-ed available online here. For more, see my previous blog posts on AB 438 here and here.

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WMATA Metro Officials Expected to Reach Out to Private Sector

Posted on September 7, 2011, 7:48pm | Harris Kenny

Dana Hedgpeth of the Washington Post reports:

[Washington Metropolitan Area Transit Authority (WMATA)] officials are expected to make a presentation on Thursday to Metro’s board of directors on their plan to hire an outside contractor to do preventative maintenance on 54 escalators and 20 elevators on the Orange Line from Rosslyn to Vienna…

(General Manager Richard Sarles) said the additional manpower will “supplement the existing staff” of roughly 200 in-house employees who now work in the escalator and elevator division.

“We need more people,” Sarles said. “Rather than attempting to hire more people who then have to go through a multi-year training effort to be brought up to full speed on doing repair and maintenance, we can go out to seek qualified contractors to do the work.”

Weary Metro riders are presumably encouraged by this news as the system has been plagued with performance issues for years. Hedgpeth cites a 1997 investigation that discovered falsified escalator maintenance records, which lead to a staff shakeup. Hedgpeth also identifies a 2010 study that found “Metro was failing to adhere to it’s own maintenance standards.”

If WMATA’s new approach is unsuccessful, Metro officials should expect a social media response. The agency’s oft-maligned management of Washington, D.C.’s Metro system has faced increased scrutiny over the past the year from Twitter and Facebook users. For example, Metro’s previous Twitter account  @metroopensdoors inspired a parody account @metroshutsdoors, which is operated by an anonymous writer sarcastically poking fun at the agency. WMATA has since switched it’s Twitter account to @wmata and is engaging in a concerted public relations campaign called Metro Forward to improve it’s public perception.

Conducting escalator maintenance is simply not a core governmental function. Sarles is smart to recognize this and provide leadership by reaching out to the private sector to address the agency’s new goal to buy new, rehabilitate or replace about 180 escalators and elevators.

For more on WMATA’s Metro system, see previous posts by my colleague Samuel Staley here, here and here.

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Friday Privatization News Highlights (9/2/2011 edition)

Posted on September 2, 2011, 5:48pm | Leonard Gilroy

News articles on some of the more interesting developments on the privatization and public-private partnership (PPP) front over the last two weeks include:

Federal Government

  • "Contract winner must hire predecessor's employees, new rule says" (Federal Times): If we're looking for onerous and counterproductive rules and regulations to eliminate at the federal level, this new Labor Department rule would be a good place to start. Under the rule, any company that wins a federal services contract previously held by another company has to hire the old company's employees. Not only does this represent an unwarranted intrusion into companies' ability to make their own personnel decisions, but it could also drive up costs for the public sector as well (if companies are forced to hire more employees than they need, or are forced to hire less productive employees than they otherwise would). This idea appears to have been taken straight from Bad Procurement Policy 101.

State Government

  • "Ohio becomes 1st in nation to sell state prison to private company; 4 others not sold" (Washington Post): Yesterday, Ohio corrections officials announced the results of a large-scale procurement that will see the state raise $72 million from the sale of one state prison to a private operator and two others turned over to private management, for an estimated $13 million in total, annualized cost savings. More details from Bloomberg here.
  • "VDOT announces public-private partnership to maintain rest areas" (Land Line): This week, Virginia transportation officials announced a new PPP that will upgrade the state's 42 rest areas and welcome centers. The state is partnering with a vendor that will expand vending and advertising at the facilities and will pay the state $2 million per year for the privilege. The deal is structured to also give the state a revenue share based on percentage of total sales. According to Virginia Gov. Bob McDonnell, "As part of this innovative program, we see great opportunity to offset rest stop costs now and into the future. […] Partnering with the private sector will enable us to expand and improve the services that we offer visitors while saving taxpayer dollars." More here and here.
  • "Bill Looks to Require Districts to Seek Bids on Support Services" (Michigan Capitol Confidential): Our friends over at Michigan's Mackinac Center weigh in on the proposed House Bill 4306, which would require all Michigan school districts to solicit bids for school support services (e.g., food, transportation, custodial) and compare them to in-house costs. The bill does not mandate any actual privatization; it just requires a bidding process. The idea builds on the rapid expansion of non-instructional school service outsourcing in the state in recent years. According to Mackinac's latest privatization survey, 295 of the state's 550 districts (53.6%) are outsourcing some of their non-instructional services, up from 31 percent in 2001. For more details on the Mackinac survey, see here and here.
  • "Illinois approves privatization for new roads" (Land Line): Illinois has become the latest state to adopt enabling legislation providing the state broad statutory authority to pursue PPPs for new transportation projects. Unfortunately, they've opted to require legislative approval of all PPP projects, injecting a degree of political risk into the process that could potentially make some bidders wary of pursuing projects in Illinois.
  • "Bill would allow private groups to run state parks" (The Union of Grass Valley): A bill (AB 42) approved by the state assembly and currently under consideration by the California State Senate would allow the state to enter into PPPs with nonprofits to take over operations of state parks threatened by closure. This would certainly be a step forward, though legislators would be smart to expand this authority to include for-profit recreation management firms as well. The U.S. Forest Service already uses for-profit concessionaires to operate dozens of recreation areas throughout California today, and about half of their recreation sites nationally, so it's a proven model that works.
  • "Firm proposes public-private partnership to improve I-70 mountain corridor" (Denver Post): The global engineering/construction firm Parsons has submitted an unsolicited proposal to Colorado officials proposing a new PPP to rebuild the Interstate 70 mountain corridor using private financing. This is a high-traffic corridor with billions in identified needs and little by way of state funds to address them.
  • "Tri Rail privatization studied as way to add FEC commuter service" (South Florida Business Journal): Transit officials in Florida are reportedly considering privatization as a means to add commuter rail service along the Florida East Coast Railway in South Florida.

Local Government

  • "Parking deal netting city more meter money" (Indianapolis Business Journal): So far, so good with Indianapolis' parking meter privatization. After signing a 50-year concession with ACS last year for the management of its downtown parking meters, the decision already appears to be paying off for the city. The article reports that total meter revenues increased to $1.7 million in March-June quarter, up from $1.3 million during that same quarter in 2010. The concessionaire is sharing those revenues with the city, and the city's take rose to $498,273, a dramatic increase over the $108,265 it collected from the meters over that same time period last year when the meters were still an in-house operation. What's even more exciting is what's to come: ACS will soon be rolling out a mobile phone app that will allow users to feed their meters electronically. I'd imagine it will have other features beyond that that will make life a lot easier for system users. I would be nice to hear a mea culpa from the Chicken Littles who predicted post-privatization doom and gloom amid the pre-concession debates last year, but I'm not holding my breath.
  • "StarTran audit to look at privatizing all or part of bus service" (Lincoln Journal Star): Transit officials in Lincoln, Nebraska have hired a consultant to evaluate potential options for privatizing the city's public bus service as part of a larger transit management review.
  • "Santa Paula Water Recycling Facility Receives Prestigious 2011 Public-Private Partnership Award For Innovation" (Water Online): The National Council of Public-Private Partnerships has given an innovation award to Santa Paula, California's new water recycling plant. The facility, the first 100% privately funded water recycling facility in the country, was built for the city by PERC Water and Alinda Capital under a 30-year contract.
  • "City of Flint postpones leasing out public golf courses" (The Flint Journal): Flint officials have had to slow down their ongoing golf course privatization process in order to hammer out details with the various bidders selected to take over operations, including a public employee union.

For more on privatization, see Reason Foundation's privatization research archive.

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