Public Private Environmental Partnerships Jeff Hughes (919) 843-4956 [email protected] www.efc.sog.unc.edu
Sep 13, 2020
Public Private Environmental
Partnerships
Jeff Hughes
(919) 843-4956
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