Public Private Partnerships (PPPs) is a term that we’ve heard a lot more often over the past decade, and it’s essentially exactly what it sounds like – a partnership between a public entity like a state, county, or city, and a private company to provide a service that is typically provided by the public sector.
In a lot of places this means road projects, or other infrastructure, and is generally seen as a way to fight government budget bloat by turning these public works over to private businesses that are more concerned with the bottom line, and turning a profit, and therefore help keep costs low.
In theory it’s a great way to get projects done on time, and under budget, with a minimum of tax-payer investment. In theory.
But what it often ends up being, according to critics, is a government give away to private business. That is when it isn’t a straight up grift from the company offering the service.
One example of this is the 360 toll road project in Austin, TX. That project used tax dollars to help build a multilane limited access highway which was then run by a private, for-profit company who collected the tolls. Not only did this private company not clearly mark the final free exits on the roadway, they used traffic cameras and state data-bases to send toll bills to people who failed to exit before that last free exit. The complaint from Texas drivers wasn’t necessarily that they were being charged a toll to use the road. It was that they paid for the road twice – once with tax dollars to construct it and again with tolls paid to a private company once it was complete.
A different type of PPP was used to construct the new Portsmouth bypass in Scioto County, Ohio. On that project there are no tolls collected. What the state has done is pay for a portion of the initial construction costs, and then contracted out continued maintenance of the roadway to the company, who receives fund that would otherwise be utilized by state road crews. Proponents of the plan say it allows private industry to do what they are best at – cutting costs and maximizing return on investment – for the benefit of public works. Critics say it encourages contractors to cut corners and take shortcuts to trim precious pennies from the bottom line, resulting in an inferior product in the long run.
The truth is, it could go either way. It absolutely depends on the company and the due diligence of the government working with them. But any Public Private Partnership deserves close scrutiny, to make sure the taxpayers are getting their money’s worth, and aren’t being taken advantage of by the company, and our local governments are no exception.
Grayson’s PPP style agreement with Windstream’s Kinetic, to utilize public funds to help the private company provide superior internet options within city limits, has upset some in the county who are not receiving the same level of service (see Letter to the Editor in this issue) but that doesn’t necessarily mean it was a bad use of Grayson’s funds. Kinetic delivered on their promises, completing their work ahead of schedule, and if they continue to maintain lines and provide a superior service it will be money well spent for the people the city serves.
Over on the other end of the county there are some Olive Hill council members who are skeptical of their energy savings program that utilized leveraged the city’s needs to secure funding for a private company to overhaul the city’s street lights and water treatment facility. Some of the city representatives have grown nervous about their relationship as the water project has dragged out and the city has continued to approve payments on work that is progressing at a snail’s pace.
While there is no evidence that Trane (formerly Harshaw Trane) will leave without completing the project once the city releases their final payment, that is a concern of some council members, and they are right that it doesn’t hurt to be wary.
And though they’ve had success with such projects so far, we’d urge Grayson to take that skeptical track with their new electric vehicle charging opportunity.
We aren’t in any way opposed to an electrical vehicle (EV) charging station. We think it’s a great idea that could do the city, and county, a lot of good.
What we are concerned about, though, is paying a company more than $14K to prepare a grant, for grant funds they will then be paid if the grant is awarded. While it may be standard procedure to charge a city for grant preparation, it seems this should be a risk the company is willing to take on in order to receive the grant funds for the completion of the project. At the very least it should be something they are open to discussing with city council. If they aren’t, this just feels like it could be another give away of tax dollars to a for-profit business, for a grant and a project the city may or may not receive. And with a budget as tight as Grayson’s is right now, we’re not sure that’s a risk the city can afford to take.
The city’s had success so far because of their diligence and oversight on these projects. We pray they maintain that diligence as they move forward on this EV project.