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Annual Privatization Report 2013

Yonkers, New York Pursuing Innovative School Partnership Approach

Subsection of Annual Privatization Report 2013: Local Government Privatization

Harris Kenny
May 6, 2013

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Yonkers, New York Pursuing Innovative School Partnership Approach

Yonkers, a school district in New York State, hired public-private partnership (PPP) advisors to help determine whether private capital can be used to reconstruct and maintain its schools. The advisors concluded in March 2013 that a PPP is the only foreseeable way to address the district’s over $1.5 billion in needed renovations for 40 schools. Joseph Bracchitta, Yonkers’ chief administrative officer, responded to the report saying, “We now have a pretty clear idea that this is doable… We have to go out and get support.”1 Under the PPP model a consortium of private operators would design, build (or renovate) and operate city-owned schools in exchange for a set monthly fee paid with state and city dollars.

The district’s infrastructure is on average 73 years old and the buildings are in dire disrepair, with over 95 percent of them deemed "unsatisfactory" by the state. Meanwhile, the over 25,000-student district is 4,000 seats short and is expected to grow by an additional 3,000 students within the next 10 years, leaving a 7,000 seat shortfall.2 According to Paresh Patel, Yonkers School District board of education president:

The (PPP) model is a viable solution to the ongoing financial constraints that have limited our ability to provide our students with the modern, well-maintained learning environments they deserve.3

The PPP team includes KPMG, Allen & Overy Bruckhaus Deringer and URS Corporation.4 Phase one of the three-phase Educational Facilities Plan (EFP) will cost $683 million and cover reconstruction and maintenance of 40 schools in the district and a new build of Gorton High School.5

Proponents argue PPPs are a proven way to deliver infrastructure, from roads and bridges to water and wastewater treatment facilities. Policymakers are increasingly looking to new areas for this policy tool, such as school and education-related infrastructure. Yonkers is not alone. Policymakers in Puerto Rico recently initiated a similar approach through its “Schools for the 21st Century” project.6 The appeal is simple: tapping private sector capital to build schools—whether traditional or alternative—and other education-related infrastructure presents an opportunity to leave more public dollars for the instructional needs of children.

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Endnotes

1 Gary Stern and Colin Gustafson, “Yonkers report: Public-private schools partnership 'doable',” The Journal News, March 8, 2013. http://www.lohud.com/article/20130308/NEWS/303080067/Yonkers-report-Public-private-schools-partnership-doable

2 John Jordan, “Yonkers studies public private partnerships to advance $1.7B in schools construction,” Construction News, February 1, 2012. http://cicnysb.firstdaystory.com/atf.php?sid=2162¤t_edition=2012-02-01

3 Harris Kenny and Leonard Gilroy, “21st century schools require 21st century finance,” Real Clear Markets, September 20, 2012. http://www.realclearmarkets.com/articles/2012/09/20/21st_century_schools_require_21st_century_finance_99894.html

4 “Yonkers hoping for legislation to enable first US schools P3,” Infrastructure Investor (email newsletter), March 2013.

5 Michael West, “P3 advisers on board for NY schools,” Inspiratia, April 4, 2012. http://www.inspiratia.com/social-infrastructure/News/read/P3-advisers-on-board-for-NY-schools/

6 Leonard Gilroy, “Building a world-class infrastructure PPP program in Puerto Rico,” Innovators in Action (Los Angeles, CA: Reason Foundation) September 8, 2011. http://reason.org/news/show/puerto-rico-ppp-infrastructure


Harris Kenny is Policy Analyst


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