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Policymakers have long understood the job creation opportunities that public infrastructure projects provide. To enhance these jobs' economic and social impact and lift families out of poverty, many cities and states have incorporated job quality and equity policies into public infrastructure projects. Such policies ensure that these projects don't simply create jobs, but instead provide good jobs in the local communities that need them. These projects can create quality jobs that provide valuable pathways out of poverty and into a sustained career, while building much-needed infrastructure. Some cash-strapped municipalities have turned to public-private partnerships (P3s), which use private capital to finance public infrastructure projects, as a strategy for accomplishing infrastructure renewal and development. The P3 approach demands the same focus on jobs that traditional infrastructure projects have, and the successful strategies used for traditional projects may be used on P3 projects with little or no modification.
Public-private partnerships (P3s) to build infrastructure, are increasingly structured around “availability payments,” which advocates argue are a better alternative than more traditional revenue-risk contracts. However, availability payments are long-term financial commitments that can lead local governments to take on unsustainable amounts of debt. Availability payments are made by the governmental entity to the private group once the piece of infrastructure is available or completed. These recurring payments are generally much less risky for the private groups since the risk is placed onto the governmental entity. For the availability payment to be considered, it is important to understand the long-term financial implications of the plan and for policymakers to ask questions of both the private group and the process itself. These recommended questions include: Are there any anticipated or even somewhat likely events that could cause challenges to the governmental entity making the availability payments at any point in the long-term contract period? Has the governmental entity identified contingent liabilities associated with a proposed availability payment P3?.
While public-private partnerships, or P3’s, have primarily been used in the U.S. for transportation and water projects, the model has recently been used to address infrastructure needs to repair, replace, or build public buildings where government operations take place. Problems with the P3 model include the loss of public control over policy and planning decisions, increased costs to public budgets, and reduced labor standards. On top of these, the P3 model oftentimes results in the loss of transparency and public input. The recommendations from this guide to resolve these issues come in the form of questions to ask. These questions aim to help advocates, policymakers, and other stakeholders better understand and analyze public building P3 proposals, contracts, and related legislation to bolster their decision-making ability. Some questions include: How does the public building, if there is one, currently meet community needs? Is it able to provide the space to successfully provide the public service or program? Has an analysis been done to understand capital needs for the rehabilitation or construction of the public building?