Public Private Environmental

Partnerships

Jeff Hughes

(919) 843-4956

jhughes@sog.unc.edu

www.efc.sog.unc.edu

2

Helping communities provide environmental programs and services in fair, effective, and financially sustainable ways through:

• Applied Research

• Teaching and Outreach

• Program Design and Evaluation

How you pay for it matters

www.efc.sog.unc.edu

Introductions

• Name, Organization

• Example and 3 sentence description of

a “Notable” Environmental Finance

Partnership you have been involved in (or

want to be involved in) with a

Governmental and Non-Governmental

Entity

Workshop Objectives

• Share experiences concerning public

private partnerships

• Identify appropriate financing tools for

crafting environmental public private

partnerships

• Identify challenges and strategies for

promoting public private partnerships.

Agenda

1) Overview of financing tools for creating partnerships 1) Stormwater

2) Solid Waste

3) Water and wastewater infrastructure

4) Energy

2) New Belgium Brewery 1) Stormwater

2) Greenways

3) ReVenture 1) Brownfields

2) Land conversion

3) Clean energy

4) Procurement and legal options 1) New construction

5) Additional Resources

FINANCING TOOLS FOR

CRAFTING ENVIRONMENTAL

PUBLIC PRIVATE PARTNERSHIPS

What is an Environmental Public-

Private Financial Partnership

Definition for the workshop:

• Governmental unit and non-

governmental/private sector entity working

together with each bringing their own set

of assets and abilities to achieve a

community environmental goal.

Public Private Partnerships:

Narrower Definitions

• Statutory procurement method

• Private sector acquisition or ownership

of an asset related to service that had

been previously provided by government

sector:

– Toll Roads

– Water Systems

Tapping into Strategic Advantages

• Sticky Note: A private company is able to

____________ better/easier than a

governmental entity.

• Sticky Note: A governmental entity is able

to ____________ better/easier than a

private company.

Governing Legal Framework

Parking Lot Questions

• Are we allowed to?

• What steps do we need to follow to ____?

• Where in the statutes does it say we can

_____?

Financing Tools for Creating

Environmental Partnerships

1. Fee for service models

2. Fee relief for service

3. Franchise agreements

4. Tax incentives

5. Assessments

6. Project development finance/Tax Increment Finance

7. Synthetic TIFs

8. Property leasing and potential sales

9. Asset leasing

10. Guaranteed Energy Savings Agreements

11. Fee for construction/asset

12. Qualified Energy Conservation Bonds

13. …..

14. ……..

Environmental Public Private Finance Tools

Tool What it does

Franchise Agreements Allow city or county to direct how services are provided in their jurisdiction. (Recycling, Landfill)

Assessments Allows city or county to attach the cost of an environmental improvement to a private property

owner.

Tax increment

finance/project development

finance

Allows a city or county to tap into increased property tax arising from development to help pay for

environmental improvements

Land Lease with Purchase

Right

Allows local government to use property for an environmental project and facilitate eventual

ownership of environmental asset (energy projects)

Leasing Allows local government to benefit from environmental project without having to invest in initial

capital

Energy Savings Contract Allows local government to use a “guaranteed” savings stream from specially procured water or

energy projects to pay off the debt for those projects.

Public Private Partnership

Construction

Allows a local government to share financing and construction responsibility with a private entity.

Brownfields Agreement Allows government to transfer key elements of liability risk from contaminated property allowing

developers to have better access to capital and improve property

Developer incentives Provides financial incentives to a developer in order to incentive the addition of environmental

assets.

Qualified Energy

Conservation Bonds

Financing mechanism to allow allocation of a public tax incentive to a private entity.

Fee for Service

• For services local governments are

authorized to provide

• Construction (This afternoon)

• Service

– Water

– Wastewater

– Trash Collection

– Consumer education

P3 in the News

Public Private Partnership in the

News

• Prince Georges County Stormwater

Prince Georges County

• Improve Chesapeake Water Quality

• Meet regulatory requirements

• Begin work on public property with

eventual work on private property

• Incentives for performance targets

• Streamlined work coordination by private

sector “Manager”

• Funded by payments from County

Maplewood Mall Project

• 35 acres of parking lot

impervious 70 acres

including building

• 55 Rain gardens

• 375 Trees in Trenches

• 5700 Gallon Cistern

• Sand Filters

• Pervious Pavers

• Educational Signage

Slide Source: Cliff Aichinger,

RWMWD

Maplewood Mall Project

Slide Source: Cliff Aichinger, RWMWD

District Levy 31%

PFA SRF Loan 18% BWSR Clean

Water Fund Grant 18%

MPCA 319 Grant 8%

PFA Clean Water Revolving

Fund Grant 6%

PFA TMDL Implementation

Grant 19%

http://efc.sog.unc.edu

Durham

Slide Source: Laura Webb-Smith, City

of Durham

Slide Source: Laura Webb-Smith, City

of Durham

Slide Source: Laura Webb-Smith, City

of Durham

Environmental Revolving Loans?

• Energy efficiency

• Housing

• Economic development

Fee Relief for Service?

• Reduced stormwater fees

• Reduced water bills

• Reduced energy bills

Special Assessments

• Water or wastewater service

• Stormwater/watershed improvement

projects

• No petition required (public hearings

required)

• 10 years, 8%

• For more information:

– http://canons.sog.unc.edu/?p=7917

Newer Special Assessments

(Expire June 30, 2015) • Expanded purposes

• Can be used to back debt

• Requires petition

• 30 years

• For more information: – http://sogpubs.unc.edu/electronicversions/pdfs/lfb40.pdf

– http://canons.sog.unc.edu/?p=7288

– http://canons.sog.unc.edu/?p=7392

• For an example (the only use as of December 2014) – http://ced.sog.unc.edu/town-of-hillsborough-special-

assessments-part-iii/

Synthetic Tax Increment Financing

• Debt legally backed by asset, revenue stream, or general obligation pledge

• Intention to generate enough money from increased taxes linked to increased valuation of improved properties

• For more information: http://ced.sog.unc.edu/what-is-a-synthetic-project-development-financing-aka-synthetic-tif/

Municipal Service District

Combined with Private Contract

• Durham BID

Additional SOG Resources

• Norma Houston

• Kara Millonzi

• Tyler Mulligan

• Adam Lovelady

• Development Finance Initiative

• Environmental Finance Center