&EPA
United States
Environmental Protection
Agency
Office of
The Comptroller
(PM-225)
September 1989
Public-Private Partnerships
For Environmental Services
Region 3
Conference Proceedings
Printed on Recycled Paper
-------
Preface Conference Proceedings and Action Agenda
These edited proceedings are from the U.S. Environmental Protection
Agency Region 3 conference, "Public-Private Partnerships for Envi-
ronmental Services: Solid Waste, Drinking Water, Wastewater," held
in Philadelphia, Pennsylvania on June 14,1989. Included is an Action
Agenda, developed during the Conference, which outlines roles for
key players in the Public Private Partnerships Initiative. We ask that
you provide us with your views and comments on the ideas and
suggestions presented during the conference. As you pursue the
public-private partnerships option, we hope you find the materials
useful and informative.
Charles L. Grizzle
Assistant Administrator
Office of Administration and Resources Management
U.S. Environmental Protection Agency
Edwin B. Erickson
Regional Administrator
U.S. Environmental Protection Agency
Region 3
-------
Proceedings Table of Contents
Page Title
i Preface
Opening Remarks
Stanley Laskowski
Deputy Administrator
U.S. Environmental Protection Agency
Region 3
3 Keynote Address
Financing Environmental Protection:
A National Challenge
Charles L. Grizzle
Assistant Administrator
Office of Administration and Resources Management
U.S. Environmental Protection Agency
7 What are Public-Private Partnerships?
David Osterman
Chief, Resource Planning and Analysis Branch
U.S. Environmental Protection Agency
11 First Session: Panel on Successful Partnerships
12 Case Study #1: Wastewater Treatment
Upper Merion Township,
Pennsylvania
13 Case Study #2: Drinking Water
Wastewater Treatment
Indiana County, Pennsylvania
15 Case Study #3: Resource Recovery
State of Delaware
Delaware Solid Waste Authority
16 Case Study #4: Resource Recovery
Fairfax County, Virginia
18 Case Study #5: Recycling
Conemaugh Township, Pennsylvania
-------
Page Title
21 Luncheon Speech
Edwin B. Erickson
Regional Administrator
U.S. Environmental Protection Agency
Regions
23 Second Session:
Cross Media and Interjurisdictional Concerns
Barbara Paley
National Association of Counties
24 Tax Implications for Public-Private Partnerships
Roger Feldman
Privatization Council
27 Third Session: State Perspective on Partnerships
33 Fourth Session: Private Sector Perspective
on Partnerships
37 Closing Session: Where Do We Go from Here?
William Wisniewski
Assistant Regional Administrator
U.S. Environmental Protection Agency
RegionS
John Sandy
Director
Resource Management Division
U.S. Environmental Protection Agency
41 Action Agenda: Key Roles
45 P3 Conference Attendees
52 Office of the Comptroller
P3 Staff Listing
52 P3 Regional Coordinators
-------
Region 3 Opening Remarks
EPA and States need help
from the Private Sector, the
international community,
and individual citizens to
reduce risk to public health
and the environment
Public-Private Parnerships
establish a support system
from which to respond to
environmental problems
Stanley Laskowski
Deputy Regional Administrator
U.S. Environmental Protection Agency
Region 3
Our nation's management of its natural resources has evolved over
the years as we have sought to respond to new, more complex, and
serious challenges to protecting and restoring the environment. The
problems we are currently confronting include high levels of radon
affecting homes around the country, global warming, and the oil
spills off Alaska and on the East Coast. Environmental incidents are in
the news every day.
Public demand for a clean and safe environment has also increased
enormously in the last 19 years. The public now demands that EPA
and State environmental agencies enforce compliance with existing
environmental laws and investigate the need to develop more stan-
dards where regulations do not currently exist or exist at insufficient
levels. Given the scope and complexity of our problems, it is time for
EPA and the States to realize we can not do it alone. We need help
from the private sector, from the international community, and from
individual citizens to significantly reduce risks to public health and
the environment.
As I mentioned at the outset, the challenges we face as we seek to
restore and protect the environment have changed visibly and perva-
sively over the last several decades. In the 1960's the pollution prob-
lems were very visible: rivers were on fire; fish kills due to pollution
incidents were great; and air pollution was painfully obvious in our
most heavily populated and industrialized cities. During the 1970's,
many of the nation's environmental laws and regulations focused on
corrective action of these basic water and air pollution problems.
These solutions were obvious to the eye and involved such techniques
as basic limits and controls on effluent discharges from pipes and
smoke stacks. Now, in the 1980's, more complex, more toxic, and
potentially more difficult environmental problems to solve demand
our immediate attention. With these challenges comes the need to
change our attitude and approach about how best to solve environ-
mental problems.
-------
This is evident in our efforts to finance environmental protection.
Public resources are just not keeping up with the cost to restore and
protect our environment. If we can be more creative in our solutions,
emphasizing pollution prevention, and not just corrective action, we
can prudently spend what limited resources we do have available.
Federal and State governments need and should seek assistance from
other sources of funding beyond the taxpayers' dollars to improve the
environment. EPA's Public-Private Partnerships Initiative can be an
important source for financial and technical assistance. These partner-
ships establish a support system of all levels of government, the pri-
vate sector, the international community, academia, environmental
and citizens groups, and other non-profit organizations. The P3 Initia-
tive provides a common basis from which to respond to environ-
mental problems. Everyone contributes to pollution. Everyone should
expend their financial, institutional, and intellectual capital to work on
solutions.
-------
Keynote Address Financing Environmental Protection:
A National Challenge
Speaker Charles L. Grizzle
Assistant Administrator
Office of Administration and Resources Management
U.S. Environmental Protection Agency
New legislation
requires higher capital
spending on environmental
infrastructure
This is the second in a series of Regional conferences on building
public-private partnerships. These conferences represent a major step
forward for EPA in promoting the partnership concept as one of
several innovative approaches to financing environmental protection.
I would like to talk to you today about what we have learned about
the magnitude of our national infrastructure financing problems and
where EPA's Public-Private Partnerships Initiative is headed.
Almost daily, we are reminded of the increasing complexity associ-
ated with our environmental protection mandate. The problems
facing us are greater, the solutions more demanding than in the past.
President Bush and EPA Administrator William Reilly have set high
expectations for environmental protection. Americans have expressed
unprecedented support for a cleaner environment. Congress, re-
sponding to these demands, has authorized significant new require-
ments which we, as a nation, must meet together. The new legislation
directly represents a major trend toward higher capital spending on
the environmental infrastructure necessary to meet needs and expec-
tations. In fact, a recent EPA study estimates that the differences
between what we now spend and what the public sector will need to
spend by the year 2000 for environmental protection is approximately
$20 billion annually.
But a second trend has been operating in tandem. Recurrent Federal
budget deficits, changes in our tax laws, and resultant increasing
demands on States and localities in all service areas have sharply
limited traditional funding sources. Inevitably, environmental and
fiscal trends have collided. And the resulting gridlock jeopardizes
environmental protection. The problem that we face at EPA is a recipe
for massive non-compliance as we continue to promulgate regula-
tions that States and localities don't have the financial wherewithal to
meet.
-------
This growing cost,
coupled with competing
demands, calls for bold
approaches at all
levels of government
It is clear that State and local governments are being called upon to
take on more implementation responsibilities, while EPA moves to
support role. This process is never easy. The growing cost of environ-
mental protection requires a re-examination of how the nation fi-
nances and pays for such investments. The gap between current and
future needs and spending calls for bold and innovative approaches at
all levels of governmentFederal, State, and local. And it is local
governments who are on the front line of this problem. Local govern-
ments and their citizens have to plan for their future, plan for environ-
mental programs, and plan how to fund them.
Public-Private
Partnerships encourage
localities to think
innovatively in meeting
their environmental
obligations
So what are we at EPA doing about this situation? We have realized
that we need to alter the way we do business at EPA. Searching for
solutions, we became aware of a few examples where forward-think-
ing communities had managed to bring private sector resources and
ingenuity into play. We decided to launch the Public-Private Partner-
ships Initiative to encourage local governments to consider partner-
ships and other alternative financing mechanisms to meet their envi-
ronmental obligation.
Our goal is simpleincrease private sector participation in advanc-
ing environmental protection to the level the citizens of this country
demand. Let me illustrate the extent of our commitment to this goal.
We have formed a senior-level Steering Committee of Assistant and
Regional Administrators who provide Agency-wide leadership for
this effort. It is my privilege to chair this committee. We have also
staffed a special unit within my office to serve as the focal point for
encouraging innovative financing and public-private partnerships in
the environmental arena. This initiative is augmented by a network of
Regional Coordinators who will support State and local government
efforts to form public-private partnerships. We have focused our
attention on the critical program areas of drinking water, wastewater
treatment, and solid waste disposal.
Societal dynamics dictate
that the public and private
sectors must work together
EPA has begun a national effort to enlist the forces of the marketplace
and the ingenuity and resources of the private sector in meeting envi-
ronmental protection goals. Public resources alone can no longer foot
the bill for conventional pollution control. The dynamics of our society
dictate that the two of us must work together in a true partnership.
Properly structured, a public-private partnership has the potential to
help meet growing needs by reducing costs, speeding up project
completions, and improving performance. At the same time, the effect
will be to free up public resources for other community services.
We will also work to identify and remove legislative and regulatory
barriers to public-private partnerships at all levels of government We
are certainly hampered by the Tax Reform Act of 1986. We intend to
-------
explore options to undo some of the consequences of that Act. We
have begun to screen Federal environmental legislation, case law, and
EPA regulations to find and remove, where possible, impediments to
cost-effective compliance. Likewise, we will take a hard look at the
Regulatory Flexibility Act of 1980. This Act forces Federal regulators
to consider the effect that proposed rules have on small entities and to
seek ways to alleviate the burden.
Many State laws and local ordinances, as well as a lack of grass roots
Many States have already support, can also restrict public-private partnerships. The good news
passed legislation to is that 20 States have legislation that promotes public-private partner-
encourave public-private sniPs> including Maryland, Delaware, and West Virginia right here in
vartnershivs Re8^on 3- We will strongly encourage other States to adopt this type of
V ,. " legislation as a mechanism to foster partnerships.
Over the next three years, EPA will sponsor several demonstration
projects to show how successful partnerships can work. Our intention
is to provide a few communities with the legal, financial, and other
expertise needed to form successful partnerships. The success of these
public-private partnerships will encourage other communities to
initiate their own arrangements.
To round out our national effort, we are creating an Environmental
EPA is creating an Financial Advisory Board to augment EPA's efforts in addressing the
Environmental Financial myriad of complex financial issues we are facing. The Board will be
Advisory Board and comprised of senior executives drawn from all levels of government,
sponsoring demonstration including elected officials, from environmental groups, academia, and
nirrts tn nrnmnfp tne ^nance anc^ banking communities. The members will provide
" ' " ,. feedback on our strategies, suggest new and innovative financial
partnerships approaches, and provide counsel on legislative options that would
encourage new financing mechanisms.
Public-private partnerships bring the forces of creative dynamics to
the problems of our society. There is a role for each of us to play, both
public and private, in ensuring the quality of life that the citizens of
this country demand.
We face enormous challenges as we get ready to enter the 1990's. It is
a time when new money will be hard to find. The problem of infra-
structure financing will only be solved by actions taken in every
community across the country. Together we can work out our ideas of
public-private partnerships in the complexity and chaos of the real
world. Please take this opportunity to make a difference.
-------
-------
Speech What Are Public-Private Partnerships?
Speaker David Osterman
Chief
Resource Planning and Analysis Branch
Resource Management Division
U.S. Environmental Protection Agency
A contractual relationship A public-private partnership is a contractual relationship between a
public and private party that commits both to providing an environ-
mental service.
Partnership Definitions At least five types of public-private partnerships exist. They involve
varying amounts of private involvement. The key features of each
type of partnership are as follows:
Contract Services In this type of partnership, the private sector is contracted to provide
a specific municipal service, such as garbage collection or mainte-
nance and operation of a facility such as a waste treatment facility.
The facilities are owned by the public sector. Found most commonly
in the solid waste area, the primary advantage of contract services is
lower costs, although the municipality loses some control over opera-
tions.
Turnkey Projects In this type of arrangement the private sector designs, constructs, and
operates an environmental facility. The facility is still owned by the
public sector. The private sector assumes more risk, and cost savings
may result by working with only one contractor for design, construc-
tion and operation rather than two or three. These partnerships are
pursued frequently in waste-to-energy and recycling facilities.
Developer Financing In this type of arrangement, the private sector (usually private devel-
opers) finances the construction or expansion of an environmental
facility in return for the right to build residential or commercial facili-
ties. This type of partnership works best in growing communities
since those responsible for growth pay for the expansion at the facil-
ity.
Privatization In this type of public-private partnership, the private sector owns, as
well as builds and operates the facility. The private sector also par-
tially or totally finances the facility. Private investment reduces public
need for capital, but the municipality has reduced control over policy
objectives.
-------
Merchant Facilities In this type of arrangement, the private sector makes a business deci-
sion to provide an environmental service to a community with the
expectation that they will profit from the services provided. Not only
does the private sector own and operate the facility as in privatization
deals, it but it also makes the decision to provide an environmental
service to a community. Facilities are usually completely financed
with private sector funds. Merchant Facilities will not work for all
types of environmental services.
A division of responsibilities for potential activities for the public and
private partner generally exist along the following lines for each type
of partnership:
Activity
Decision to
Provide Services
Financing
Design
Construction
Ownership
Opera tion&
Maintenance
Contract
Services
Public
Public
Public
Public
Public
Private
Turnkey
Facility
Public
Public
Private
Private
Public
Private
Developer
Financing
Public
Private
Either
Either
Either
Either
Privat-
ization
Public
Private
Private
Private
Private
Private
Merchant
Facility
Private
Private
Private
Private
Private
Private
To find the most
appropriate partnership,
communities must make
tradeoffs involving balance
of private investment, risk,
and control
As private involvement increases, two things happen:
The private sector invests more of its funds.
The private sector assumes more of the risk for the effective opera-
tion of the facility.
On the other hand, the greater the private involvement the less control
the municipality has over the delivery and cost of the service. In
deciding what kind of partnership is most appropriate, communities
have to make tradeoffs between these three factors: private invest-
ment, risk, and control. Partnerships have to be tailored to the needs
of communities. Certain types of partnerships will work more effec-
tively than others, depending on the requirements and needs of the
community.
-------
Summary | There are four considerations to keep in mind:
There are currently many partnerships that exist;
A partnership must be tailored to meet the needs of the commu-
nity;
To expand the market, there must be changes to tax laws and
regulations; and
Advantages to public-private partnerships include lower costs,
greater expertise, improved performance, and faster completion.
-------
10
-------
First Session Panel: Successful Partnerships
Moderator Gerald Johnson
Auburn University
Introduction This session reviews success stories that have resulted from a change
in the way citizens, governments, and private industry do business in
order to protect the environment. These new relationships respond to
Many partnerships are me increasing costs of environmental protection and accompanying
successful despite the societal demands for a dean environment and a willingness to pay for
absence of national or State it. The partnerships cited here - and many others as well - have
policies encouraging them evo^ve^ an£^are successful despite the absence of national or State
policies encouraging their development and use. These case studies
show that when they are organized and carried out well, public-
private partnerships can offer long term and comprehensive means of
providing, producing, and delivering public services through other
than just the public sector.
Auburn University became involved with public-private partnerships
in 1982 when the City of Auburn needed to add two sewage treat-
ment facilities to its wastewater treatment system. Auburn's citizens
were concerned about the implications of constructing these facilities
for their community's environment and, at the same time, wanted to
ensure that the new facilities could manage Auburn's growing de-
mands for wastewater treatment. City managers and citizens joined
together to look at options and concluded that the privatization ap-
proach would be the least costly, yet result in the most timely comple-
tion of facilities to address Auburn's wastewater treatment needs.
Since 1982, many communities have initiated public-private partner-
ships to meet the growing needs for environmental services. The
following five case studies provide examples of successful partner-
ships in Region 3.
The following five case studies are examples of successful partner-
ships in Region 3.
-------
Case Study #1 Upper Merion Township, Pennsylvania
Wastewater Treatment
Ronald Wagenmann
Township Manager
Nature of Public-Private Upper Merion Township was faced with the need to construct addi-
Partnership tional sewage treatment capacity to accommodate its rapidly growing
Developer Financing population. To fund the additional capacity, the Board of Supervisors
1 would have had to quadruple utility rates or increase taxes. As an
alternative, the Township's elected Board of Supervisors empowered
the Municipal Utility Authority (an independent, executive agency es-
tablished to provide water services) to create the Upper Merion Mu-
nicipal Utility Authority Access Rights Program. This program,
through the sale of capacity for future uses, is designed to provide the
necessary additional capacity for new customers, while at the same
time minimizing the cost of the new services for existing customers.
Need for Public-Private Upper Merion Township required the construction of additional
Partnership sewage treatment capacity as well as an upgrade to one of its facilities
to meet EPA standards. Since the Township was not eligible for Fed-
eral funds and lacked the resources necessary to upgrade the facilities,
the Access Rights Program was formed to generate sufficient revenue
to fund the additional sewage capacity through the sale of sewer
access rights.
Financing Under this program, increased capacity for new customers will be
financed in part through a prepurchasing and capacity reservation
system in which payment of predetermined fees guarantees access to
future sewer system services.
Any property owner wishing to develop or expand existing facilities
may apply to the Authority for guaranteed sewer access rights for a
particular parcel. The fee paid for sewer access rights is a function of
the capacity that is to be set aside and of the costs anticipated for new
capacity.
Benefits I
I
'
Growth and development in Upper Merion Township can con-
tinue while tax rates on current residents are held relatively con-
stant.
Reserve capacity and assessments are based on anticipated de-
mand.
-------
Public-Private Partnership The Township, through the Municipal Authority, owns and operates
Status ^e sewag6 works, while the Board of Supervisors holds the Authority
accountable for its operations and new construction. The Authority
has retained an engineering firm to design the new facilities and
upgrades necessary to implement the project.
Lessons Learned The key lesson learned from this partnership is:
A program in which new customers pay a fee, and in so doing,
acquire a right to a given amount of sewer treatment capacity for
development, appears to have provided a degree of certainty and
equity for both provider and user of the wastewater treatment
services.
Case Study #2 Indiana County, Pennsylvania
Drinking Water and Wastewater Treatment
Michael Duffalo
Executive Director
Municipal Services Authority
Nature of Public-Private Indiana County is a rural county with a population of approximately
Partnership) 92,000, which is broken into small communities. The Municipal Serv-
Develover Financing ices Authority was created 16 vears ag° under a cooperative agree-
" * ment among five townships and four municipalities. The Authority
facilitates public facility projects, primarily small plants to provide
wastewater and drinking water services to communities.
The Municipal Services Authority works closely with developers to
renovate water treatment facilities and to provide small wastewater
treatment package plants for mobile home parks, malls, and single
family housing developments. Once built, developers transfer the
facilities to the Municipal Services Authority so that the Authority can
assume ownership and take on operating responsibilities.
Need for Public-Private The County turned to a public-private partnership because it:
Partnership
Lacked resources and expertise to develop and construct the water
and wastewater treatment capacity its population required; and
Identified opportunities for cost-effective services resulting from
operating several facilities.
Financing Indiana County's Municipal Services Authority, by virtue of the
limited public resources available, has contracted with private compa-
nies to provide capital to renovate water treatment facilities and build
13
-------
Benefits
new plants or expand existing wastewater treatment capacity for the
County. Such contractual arrangements require fewer resources from
the County than if it were to design, construct, or renovate the facili-
ties itself, while at the same time providing a reasonable rate of return
to developers in their provision of these services.
in the partnership arrangement include:
Developers receive the sewer treatment services their sites require;
Private developers need not make further investment in the opera-
tion and maintenance of the facility after the facility is completed
and meets the specifications of the Authority;
The Authority gains additional capacity with no capital invest-
ment; and
The Authority is able to take advantage of economies of scale since
it already possesses the resources and expertise to own and oper-
ate several facilities.
Public-Private Partnership Several discussions are currently underway for future contractual
Status relationships between private developers and the Authority, specifi-
cally in the area of mobile home parks.
Lessons Learned Two considerations a community should take into account when
forming this kind of partnership are that:
It is important that the community require and approve engineer-
ing specifications before the facility is built; and
During the construction process, its engineers inspect the facility to
ensure that the plant will meet the demands calling for its con-
struction, in order to eliminate the need for future modifications to
the facility.
14
-------
Case Study #3 State of Delaware
Solid Waste
N.C Vasuki
General Manager
Delaware Solid Waste Authority
Nature of Public-Private The Governor of Delaware initiated a State-wide Solid Waste Author-
Partnerhsiv itv in 1975 to address the State's waste disposal problem. Solid waste
Contract Services and disP°sal under me prog designed by the State of Delaware re-
_ , quires material recovery, organic stabilization, energy recovery, and
turnkey long term storage/ -QI Of wnich requires a great degree of planning and
expertise to carry out effectively.
The Delaware Solid Waste Authority is involved in a number of pub-
lic-private partnerships at their facilities around the State under both
contract services and turnkey arrangements. For instance, at the Dela-
ware Reclamation Project, one company designed, constructed, and
now operates a 1,000 ton per day (TPD) resource recovery facility
owned by the Solid Waste Authority.
The Authority has three major mandates:
Plan for long term disposal requirements;
Maximize involvement by the private sector; and
Use resource recovery to maximize landfill capacity.
Need for Public-Private Delaware's landfill use policy was likely to result in insufficient capac-
Partnership *ty m tne near future. Until 1975, each of Delaware's three counties
operated landfills separately. By creating the Delaware Solid Waste
Authority which emphasizes materials recovery, the State was able to
take advantage of economies of scale resulting from a consolidation of
the solid waste management program previously run separately by
each county. Because the State lacked some of the necessary resources
and expertise to manage and operate a solid waste disposal program,
it turned to private industry for assistance.
Financing The State of Delaware financed the construction and development of
the reclamation facility using revenue bonds. The energy facility was
privately funded using non-tax exempt bonds.
-------
Benefits
te Authority was given broad powers to enter into contracts with
private companies for periods between 1-30 years in order to meet all
solid waste disposal activities. Benefits of the public-private partner-
ship include:
Creation of 220-250 employment positions in the private sector;
Waste collection can be maintained at a low cost (without recycling
or separation);
Improved quality of the landfills;
Landfill capacity saving is enormous;
Public ownership; and
Private expertise.
Public-Private Partnership The partnership is an ongoing operation. Plants have been in success-
Status ^ operation for three years, while the reclamation facility has been in
operation for six years.
Lessons Learned
The formation of the public-private partnership allowed for im-
provements in the use and maintenance of the State's landfill.
By utilizing the Delaware Reclamation Plant - a large recovery
plant - landfill space can be maximized and energy can be recov-
ered.
The Authority's ability to enter into long term contracts provides
stable financing and operating conditions.
Case Study #4 Fairfax County, Virginia
Resource Recovery
Andrew Quigley
Project Manager
Nature of Public-Private In 1988, Fairfax County signed an agreement with Ogden-Martin
Partnership -- Systems, Inc., to share energy revenues gained from the operation of
Privatization the County/s resource recovery facility. Once operational in 1990,
Ogden-Martin will own and manage the facility, while the County
will maintain ownership of the grounds and control over the waste
products generated and their disposal. The contractor must ensure
76
-------
compliance with environmental regulations in its operation of the
facility.
The allocation of risk among the partners splits responsibilities in the
following way.
The County is responsible for supplying adequate wastes to make
the facility viable, and for the disposal of wastes generated by the
facility.
The contractor is responsible for maintaining an economic value of
the energy to be sold from burning the wastes and for overall
system performance.
The County is responsible for environmental monitoring and for
compensating the contractor for any change in laws or regulations
that might adversely affect the partnership.
Need for Public-Private The County saw a need for a partnership for several reasons:
Partnership
The County had never operated a resource recovery facility;
The County needed to obtain technical expertise from an outside
source; and
Tax advantages existed at the time the partnership was formed.
Financing Industrial Development Bonds (both tax-exempt and taxable) were
used for funding. Funds collected as disposal fees were allocated
towards a cost analysis for building a resource recovery facility.
Benefits
The existence of several bidders gave the County a choice of ven-
dors, so that it could select the company most likely to fit the
requirements of the contract.
The County was able to obtain the technical expertise it needed to
operate the resource recovery facility.
Public-Private Partnership The partnership is currently in the demonstration phase. Operations
Status are exPected to begin as scheduled in 1990.
Lessons Learned The agreement should be mutually beneficial for both parties.
To the maximum extent possible, the goals of each party need to be
respected. In this case, Ogden-Martin will expect to earn a profit,
17
-------
while the County expects to gain a reliable, long-term solution for
its solid waste disposal.
Case Study #5 Conemaugh Township, Pennsylvania
Resource Recovery
Rudy Galayda, Jr.
Township Supervisor
Nature of Public-Private Conemaugh Township formed a partnership with a recycling firm to
Partnership handle its solid waste disposal. Collection, separation, and manage-
Contract Services ment °f recycled materials are contracted to the recycling firm. Public
refuse collection trucks retrieve the community's non-recyclable waste
and are followed by the contractor's collection trucks picking up
recycled waste. Residents need only leave one container for all re-
cycled materials at the curbside where they are picked up and carried
to the contractor's site for separation. The program began with five
recyclable materials and has expanded to twelve materials.
Need for Public-Private Because tipping fees were increasing, Conemaugh Township was
Partnership searching for options to reduce annual solid waste disposal costs for
its citizens. Two solid waste disposal alternatives were presented to
the citizens:
Financing Recycling - with an annual cost of $45 per household; or
Non-recycling - with an annual cost of $90 per household.
The recycling firm does not charge for curbside collection of recyclable
waste. In return, the firm earns all profits from sale of the recyclable
materials.
Benefits \
Conemaugh receives a payment from the recycling firm to under-
take recycling in the community and saves money from fewer
tipping fees because it has less waste to dispose of at the landfill;
Rates charged to citizens for refuse collection have not had to rise
in order to pay for additional landfill use or the increasing costs of
refuse collection; and
Recycled materials do not take up landfill space.
-------
Public-Private Partnership The partnership is operating successfully. The Township has recently
Status purchased a compactor for the landfill and has begun to accept waste
from other municipalities for a profit.
Lessons Learned From Conemaugh Township's perspective, effective public education
is the most important lesson for communities to learn when undertak-
ing a recycling program. This includes:
Beginning educational programs for curbside pick-up prior to
initiating the actual pick-ups. The children of each household were
instrumental for the level of participation by the adults in the com-
munity;
Educating the people in the community about the significance of
recycling;
Informing the people in the community about the importance of
recycling and what materials are recyclable, through town meet-
ings and education through schools; and
Phasing in the recycling program helps citizens adjust to the collec-
tion system.
19
-------
20
-------
Luncheon Speech The Flexibility of Public-Private
Parternships
Speaker Edwin B. Erickson
Regional Administrator
U.S. Environmental Protection Agency
Region 3
We are in a time when demands for a clean environment are as great,
if not greater than, the late 1960's and early 1970's and the inception
of EPA . Not only are public demands for environmental protection
high, so too is environmental protection a high priority for President
Bush. Likewise, cooperation among government agencies at all levels,
the private sector, and community and environmental groups to
achieve a common goal is an important priority with the current Ad-
ministration.
Partnerships can leverage
limited resources
Partnerships can vary
according to the ends of the
project
The Nation has fared well economically in recent times, yet public
resources are not available in sufficient quantities to solve entirely its
environmental problems. The Federal budget simply cannot fund so-
lutions to all of the social and environmental problems we are faced
with today. We must employ public-private partnerships to work for
us in leveraging limited resources in what are otherwise economically
good times. The advantage that results is not only the additional
financial resources that can be allocated toward environmental serv-
ices, but also the expertise and flexibility that these arrangements
contribute to the projects they are designed for.
The characteristics of public-private partnerships vary according to
the ends of the project. Partnerships can be of flexible length; they can
be shaped by specific needs and market conditions; or they can serve
single purpose or multiple aims. Three partnership approaches I have
been exposed to are:
Three types of partnerships
Delaware County utilized a resource recovery facility to assist them
in disposing of greater quantities of waste than it had originally
planned for by turning trash into steam. The facility required
several key elements: Delaware County, Pennsylvania provided
the waste stream, the city of Chester the site, Westinghouse Corpo
ration the operational know-how, and local investment bankers
the funding support. The County succeeded in bringing its vision
to fruition and the partnership works effectively, at a profit, to this
21
-------
An economic development project to support the site-selection and
financing of private enterprise in areas targeted for development
relied on the expertise of all levels of government, academia, the
private sector, and non-profit groups to ensure successful busines
development. The mixture of such a diverse group provided a
wide range of knowledge and insight on solutions to the problem
of economic development.
A human services project grouped together a number of organiza-
tions to overcome the duplication of effort in the funding and
provision of human services. The project ensured that multiple
service organizations could work as a team to apply for large
grants in support of their efforts to provide a wide range of serv-
ices. This group effort has cut down on the cost of administration
for each organization and reduced competition for the grants
among the same organizations.
I
The cases I have mentioned here, as well as the ones we are discussing
in our sessions today, provide us good examples of how we can apply
special skills and available resources to respond successfully to the in-
creasing demands of environmental protection. As we continue to
respond to these demands, we will do well to build in these successes.
22
-------
Second Session Cross Media, Interjurisdictional Concerns
Panelist Barbara Paley
National Association of Counties
Local governments should and do play an integral role in public-
private partnerships. After all, it is at the local level where the
provision of public services, particularly environmental services like
sewage treatment and water supply, take place. Counties have been
engaging in public-private partnerships for a long time. Their in-
volvement is not so much out of ideology, but rather for pragmatic
dps work.
Local governments Local authorities recognize the value that the private sector can bring
welcome private to me provision of environmental services. For instance, once one
narticivation moves away from landfills the traditional domain of Counties to
resource recovery and recycling efforts, there is more opportunity for
private involvement. Counties and local governments welcome pri-
vate participation in these areas, thanks to the financial and technical
resources private firms can bring to bear.
The 1986 Tax Bill has had very serious implications for private activ-
ity. In some cases, the problems are in the law and cannot be changed
easily. In other cases, however, there is room for the Treasury Depart-
ment to develop and issue favorable regulations to support greater
private involvement in local government's provision of services.
Local government encourages EPA to be a vigorous activist with the
Treasury Department, and on the Hill with the House Ways and
Means Committee, and with the Senate Finance Committee to provide
more favorable tax conditions.
Local Governments seek to With respect to the Agency's State Revolving Fund program, it is still
work with States and EPA unclear how EPA's funding of the SRF program will fare in the bond
to provide environmental market-EPA needs to be an activist for its position on this issue.
services
"""" ""*""* Local governments have a successful track record for working with
the Federal government. They welcome the Public-Private Partner-
ship Initiative by the EPA as a sign that EPA is willing to assist locali-
ties to overcome tax laws, interpret tax laws, and meet Federal expec-
tations.
23
-------
Tax Implications for Public-Private Partnerships
Panelist Roger Feldman
Privatization Council
Implications of the Tax Privatization no longer equates with tax benefit grabbing. Likewise,
Reform Act of 1986 public-private partnerships are not basically tax driven any more. A
great deal of leeway exists for legitimate tax exempt finance with
private participation.
As a result of the Tax Reform Act of 1986 the feasibility of project
development keyed off of private ownership tax benefits has dimin-
ished. Interest in public-private partnerships today is substantially a
revenue and cost savings-driven approach to dealing with the budget
crunches faced by governments at all levels.
Debt and equity The Act tightened up the circumstances in which a municipal bond
availability would be deemed issued for "public purposes." Previously, the per-
centage of bond proceeds which could be used for the benefit of pri-
vate parties could be up to 25 percent. Since the Act, a municipally
issued bond is deemed to be a "private activity" bond if any of the
following tests is met:
More than ten percent of the proceeds is used for any private
business use, and more than 10 percent of principal and interest on
the bond is derived from a private business use or secured by
property used in private business; or
Over 5 percent of the bond proceeds are used to finance private
use unrelated to the public use or are loaned to private parties.
Public purpose debt Public purpose debt remains available for environmental infrastruc-
ture, but the Tax Reform Act imposed new requirements in this regard
as well. Management contracts entered into by municipalities with
private parties for environmental services are limited to a five year
maximum term, with a three year cancellation provision, and are pre-
cluded from having any type of profit sharing based on effectiveness.
The difficulties in utilizing these public purpose debt contract guide-
lines as a component of long term public-private partnerships are that:
Operationally, they may require too much commitment for too
little return; and
Financially, they may not have an adequate term to provide credit
support.
24
-------
With respect to equity, the Act eliminated the investment tax credit for
private asset ownership, and drastically changed the depreciation
lives for privately owned facilities. The impact of the Act in the areas
of wastewater treatment, water supply, municipal solid waste, and
hazardous waste is addressed below.
1986 Tax Reform Act
impact on public-private
partnerships for:
Wastewater Treatment Construction and operating savings can be realized in scenarios utiliz-
ing public purpose tax exempt debt, when communities engage firms
to bring existing facilities into compliance on a turnkey basis. While
the term of operating contracts is limited by the Act in this section,
arrangements for rehabilitation and construction are not.
Water Supply Varieties of public-private partnerships combining turnkey contract-
ing with private sector impact fees can be found in high growth areas.
Public-private partnerships are a means to capture private capital.
Municipal Solid Waste A special provision of the Act provides that government-owned solid
waste disposal facilities are not subject to the unified volume ceiling
for exempt facility bonds. It is possible for a jurisdiction to enter into a
long term (up to 20 years) service agreement with a private party and
still issue private activity bonds without receiving an allocation from
the exempt facility pool.
Hazardous Waste The Tax Reform Act permitted issuance of private activity bonds for
facilities that are used for waste incineration or burial; so long as they
serve the general public; and are owned and operated by a person
other than the hazardous waste producer.
Conclusions
Public-private partnerships need not await tax changes. Enterprise
funds, merchant plants, combined disposal and supply options
none are barred by the tax laws. With a little ingenuity, public-private
partnerships can help to deal with many pressing environmental
problems.
25
-------
26
-------
Third Session Panel: State Perspective on Partnerships
Panelist Robert Perciasepe
Deputy Secretary
Maryland Department of the Environment
State of Maryland
Maryland is very interested in and offers its support to EPA's Public-
Private Partnerships initiative. Maryland has been actively pursuing
and participating in public-private partnerships for years to support
its own efforts and those of local governments in providing environ-
mental and other services. Although the State recognizes that partner-
ships are not a panacea, Maryland is pleased to see EPA taking a
leadership role at the regional level with public-private partnerships
and believes that the concept has great potential and should be fully
explored to reap its benefits.
Maryland's partnerships I In Maryland, several additional types of partnerships exist, beyond
for providing
environmental services
those that have already been mentioned. One of these additional
types of public-private partnerships might best be referred to as a
"symbiotic" relationship. This relationship exists when two events
occur, without actual agreement or planning between parties, which
[ are mutually beneficial to the participants.
Symbiotic partnerships: For example, the Back River Sewage Treatment plant in Baltimore is
Sewage treatment required to remove phosphorus from waste water before the wastewa-
ter empties into the Chesapeake Bay. Under normal circumstances, a
wastewater treatment facility would add chemicals to precipitate the
phosphorus out of wastewater. Meanwhile, Bethlehem Steel, a local
steel company, needs water for cooling in its steelmaking process. For
their operations, Bethlehem Steel has arranged for the use of waste-
water to handle the cooling. The Company receives wastewater
which, because of local conditions, is loaded with phosphorus. Once
used for its cooling purposes, the Company returns the wastewater to
the sewage treatment plant. But the wastewater now contains a
chemical by-product added during the cooling process that actually
precipitates and removes the phosphorus in the wastewater. This
carries out what the Back River plant is otherwise required to do
before the wastewater effluent can be returned to the environment.
Waste-to-energy Another opportunity exists when a utility seeks to build a new fur-
nace to provide energy for a community. If the community generates
sufficient quantities of solid waste, the utility's power plant can be
designed to use the community's solid waste for refuse-derived fuel
(RFD) to generate energy.
27
-------
The Role of the Maryland In support of this and related concepts, the State General Assembly
Northeast Disposal CTeated Maryland's largest public-private partnership, the Northeast
Authority Maryland Disposal Authority, a financing authority with members
" from localities and the State. To date, the Authority has provided
financial and technical assistance to small communities for solid waste
facilities and recycling programs and has aided in the development of
a mass-burn facility.
fwo other perspectives of public-private partnerships can be foi
laryland:
Voluntary initiatives. Many developers voluntarily install proper
sediment and storm water management facilities at their develop
ment sites. Maryland management regulations support these
efforts with guidelines for local governments and the State to
follow when working with developers to provide the facilities. Tl
most common arrangements involve the developer financing and
building the facility and either operating it or turning it over to tf
locality. Or it may entail some form of joint financing and opera-
tion between the developer and the locality.
Impact fees. Impact fees are a growing phenomenon. Most devel-
oping counties add a fee onto the sale of property as a means of
raising money to provide services to accommodate the increasing
5n and business in the area.
level
Maryland looks forward to continuing its partnerships with local and
private entities, and welcomes EPA into the venture as well.
Panelist Robert MacPherson
Manager
Delaware Department of Natural Resources and Environmental
Control
State of Delaware
Deleware 's Public-Private Delaware is the seventh most densely populated State in the United
Partnerships provide States. It operates many small water systems rather than a few large
technical expertise to ones' Economic development has accelerated population growth and
. v *' , is creating stresses in the State's infrastructure of public services.
assure environmental Extensive tourism exacerbates the population problem. Many of the
compliance existing water supply systems are old and are scattered over the State.
For Delaware, the value of public-private partnerships has been real-
ized because of its ability to provide technical expertise in order that
existing systems can comply with current drinking water standards,
meet future standards, and serve the needs of their growing commu-
nities.
28
-------
Three Elements to
encourage Public-Private
Partnerships
Panelist
Factors contributing to
non-compliance
As part of Delaware's efforts to coordinate population growth, eco-
nomic development, and environmental protection, Governor Castle
created the Delaware Environmental Legacy program in 1987. It was
designed to look ahead into the next century and anticipate and plan
for a better environment. More than two hundred citizens participated
with the industrial sector to put a program together. Delaware recog-
nizes that environmental management will become more costly in the
future, and certain current environmental problems will still exist in
20 years. This effort created a greater sense of involvement from the
private sector for resolution of environmental problems.
The State is taking several steps to encourage and enhance public-pri-
vate partnerships.
It developed legislation to create a water and wastewater authority
patterned after the existing Solid Waste Authority, with provisions
in the bill to allow development of a State-wide Water and Waste-
water Facilities and Services Plan.
The private sector will be asked to contribute during the planning
process, and assume roles commensurate with their responsibili-
ties and interests in the initiative.
Private industry may also wish to match Federal grants with their
own investment money in support of projects that may come out
of the Plan.
Steven Schmidt
Chief, Program Development and Evaluation
Pennsylvania Division of Water Supplies
Commonwealth of Pennsylvania
Small water systems operate under a number of suboptimal condi-
tions, all of which contribute to less than efficient, effective service,
and can lead to system noncompliance with drinking water standards.
Among these obstacles to good system operations are: the presence of
few customers; high cost per gallon of water provided and break even
rates; little or no reserves; and poor operation and maintenance. These
obstacles require good management to overcome, but 80% of Pennsyl-
vania's small systems are violators.
'--'' '
A number of deficiencies contribute to the problem of non-compli-
ance. In terms of the existing facilities of many small systems and the
conditions they must respond to:
Small systems often use unfiltered surface water, have inadequate
storage of treated water, have leaking distribution systems, and
suffer from dramatic flow variations.
29
-------
administrative problems also affect small system performance. In
\any cases:
Funding is likely to be limited;
Water rates probably don't reflect the actual cost of service;
Other local services compete for staff and funds; and
The extent and complexity of standards overwhelm the limited
expertise and capacity of small system staffs to respond.
Pen nsylvan ia 's Public- In Pennsylvania, public-private partnerships in support of drinking
Private Partnerships bring water supply efforts have helped to combine the knowledge and
knowledge and effects from efforts from regulatory experts, financial experts, citizens, and govern-
... mental agencies to reach drinking water quality levels and program
many sectors to meet ,g ^ participants ^ ^e process benefit from the public-private
environmental program partnership, because it:
goals
Increases the private sector role in the provision of environmental
services;
Generates new ideas and solutions;
Sets new and more appropriate program priorities;
Avoids staff layoffs; and
Increases the quality of products.
To respond to the problems of small water systems, the Pennsylvania
Department of Environmental Resources developed the Technical
Assistance Program for Small water Systems (TAPSS). TAPSS seeks to:
Improve drinking water quality and compliance with standards;
Provide technical assistance and training on-site, on a one-to-one
basis;
Focus on filtration, disinfection, and corrosion control; and
Utilizes third-party contracts to offer directed, results-oriented
support.
TAPSS, the State's public-private partnership initiative in the area of
water supply, has provided a series of key services to small systems
-------
with the result that services have improved and drinking water qual-
ity enhanced. Pennsylvania intends to continue its use of the program
and will expand its use in this and other areas.
31
-------
32
-------
Fourth Session Panel: Private Sector Perspective on
Partnerships
Panelist David Seader
Vice President,
DnC America Banking Corporation
Partnerships should be One way to look at public-private partnerships is to see them in terms
based on several elements °f *heir representing a set of contractual agreements between govern-
ment organizations and some combination of private firms. As in the
development of any contractual agreement, the initial phases of
forming a partnership should include the parties to the agreement
addressing the following elements:
Comprehension of the partnership goals;
Clarity of the roles and responsibilities of participants; and
Certainty in the outcome of the partnership.
Comprehension All parties should comprehend and understand fully the needs, goals,
and constraints of the partnership. Comprehension of the expecta-
tions and roles for each participant is critical for the partnership's
success.
Clarity The planning stages should yield a clear perspective for all participat-
ing groups in the partnership of each one's roles and responsibilities.
The organizers of the agreement must delineate who is responsible
for what services and in what manner these services are to be deliv-
ered. The risk associated with providing the services must be shared
equitably among the groups. Since it is impossible to foresee all future
financial impacts, laws, and uncontrollable circumstances that may
adversely affect the working arrangements of the partnership, the
parties to the agreement should decide early on how disputes will be
solved when problems arise.
Certainty Each party to the agreement enters the partnership with the intent to
benefit in some way. Public and private sector organizations are both
more likely to enter a partnership if some degree of certainty can be
demonstrated that it will benefit continuously from the partnership
during its lifetime.
33
-------
agreement with one another if they can reach comprehensible, clear,
\d certain positions relative to one another's performance to reach
>roject goals. The provision of incentives and elimination of impedi-
ments to partnerships can help make certain that the agreements
reached in negotiation will benefit all parties by providing acceptable
rates of return and establishing channels to resolve conflict and elir
ite barriers to constructive interaction.
Tax advantages are not the
motivating force behind
the creation of
, . * ' ff , , /
partnersHips - affordable
services are
Panelist Larry Scully
President,
Scully Capital Services, Inc.
Some comments are in order about the implications of taxation on the
formation of partnerships and then, in terms of some comparatively
recent changes in financing and taxation considerations, the applica-
bility of State revolving funds to support partnerships. These observa-
tions ^ useful tQ make in the context of today's overall discussions
on me potential for and success to date of public-private partnerships
to provide environmental services.
First, it is important to begin by saying that although they are an
important factor in how the specific components of a partnership are
framed, tax implications and advantages are not the motivating force
behind the creation of public-private partnerships. First and foremost,
the public and private sector come together to form partnerships in
order to provide affordable services to citizens in a timely and cost-
effective way. This holds true in the provision of environmental serv-
ices such as wastewater treatment, water supply, and solid waste
management and disposal.
Once the parties to a potential agreement to provide environmental
services come together, they will, as a matter of course, explore the tax
issues that will affect their partnership. Although the Tax Reform Act
of 1986 has not offered the incentives for partnerships that many
would prefer, nonetheless it, along with other features of the tax
landscape, establishes a number of considerations that must be ad-
dressed.
Tax exempt financing Communities who use tax exempt financing may wish to explore the
viability of a five year service contract, the implications of a 10%
private use test, bank bondholder interest deductions, and arbitrage
limitations on financing.
Tax issues
in partnerships
34
-------
Private activity bonds Communities who use private activity bonds must determine which
projects are eligible (sewage works are in most cases, but water supply
facilities are probably not), whether the State has a volume cap in
place, and if so, what it is.
One element of some of the relatively new financing options open to
partnerships is the availability of state revolving funds (SRF). Local
governments will wish to investigate the value of SRFs to finance their
environmental services. State revolving funds have become the new
wave of financing. State monies, augmented by Federal grants provide
resources to local communities to support construction and aid in
operation costs.
An effective combination
of funding sources is a
critical advantage of
partnerships
State revolving funds may not cover all costs. Municipalities will
probably have to bring in financing from other sources. Here is where
the value of public-private partnerships becomes especially signifi-
cant. The effective combination of funding sources is one of the critical
advantages of public-private partnerships. Partnerships not only
provide the forum for diverse interests to contribute skills in support
of environmental services, they can bring together financing from
government grants, SRFs, and the bond market (including general
obligation bonds, revenue bonds, municipality bonds, and private
activity bonds) to assure that adequate funds are available to plan,
design, build, and operate key pollution abatement, control, and
prevention projects in support of the nation's environmental mission.
Panelist William Callazzo
Vice President,
Roy F. Weston, Inc.
Factors encouraging local There are a number of important factors that encourage local govern-
government interest in ment interest in forming public-private partnerships.
partnerships
Local governments face constraints on how much tax revenue they
can generate to fund services;
Competition to win grants to fund services is fierce;
The public is demanding more environmental protection than has
traditionally been provided;
The cost of providing environmental protection has increased; and
The public sector can benefit from the expertise and financial
resources that the private sector can employ.
35
-------
essful partnerships depend on all parties working together eff
lively as a team. At the core of all effective partnerships are honest,
.^encumbered, cooperative relationships.
Much has been said about the requirements of the public sector in
entering and maintaining agreements to provide environmental serv-
The perspective and ices. But the perspective and expectations of private firms likewise is
expectations of the private irnP°rtant to address if partnerships are to work. In order for the
vartner need to be Pr^vate sector to make accurate and legitimate promises, it requires
* ,, f , time to review the legal, financial, and regulatory issues that affect the
partnership. Private companies would like to be involved during the
initial planning stages in order to identify and overcome obstacles that
may exist. Creative involvement by the private sector can contribute
much to the shaping and eventual success of the partnership.
36
-------
Closing Session Where Do We Go From Here?
Speaker William Wisniewski
Assistant Regional Administrator
U.S. Environmental Protection Agency
Region 3
Region 3 's plan of action EPA's Region 3 is working to make the Public-Private Partnership
Initiative a successful one. Among the key elements in its plan of
action, the Region will:
Conduct ongoing sessions with the States through each State's
own public-private partnership program and coordinator;
Develop a State and local public-private partnerships network and
clearinghouse;
Encourage State-level public-private partnerships conferences;
Work closely with the media to share information and ideas about
the potential for and documented success of partnerships in the
Region; and
Facilitate a demonstration project in the Region with the support
of EPA Headquarters.
These national and regional conferences are the first step in EPA's
initiative to encourage the development of public-private partner-
ships. We look forward to working with all of you to make it happen.
Speaker John J. Sandy
Director
Resource Management Division
U.S. Environmental Protection Agency
EPA's goal in its Public-Private Partnership (P3) initiative is to bring
together public and private interests to meet future demands for
environmental protection.
The shortfall in resources There is a growing shortfall between the cost of environmental serv-
ices and the public resources available to provide them. This suggests
that the traditional means of financing environmental services is no
longer sufficient to meet public needs.
37
-------
The success of the initiative will not be measured by the accomplish-
ments at the Federal level. Rather, it will be measured by the ability of
local governments to provide environmental services at a reasonable
cost.
Likewise, associations and community groups like the National Asso-
ciations of Towns and Townships and Counties, the International City
Managers Association, and the National League of Cities can be effec-
tive in outreach activities.
EPA products
to foster partnerships
Several EPA-sponsored products may aid in determining whether
partnerships will work to improve or expand environmental services
in communities.
A national strategy document outlines the major activities and
responsibilities of all key players.
A Case Studies Workbook profiles efforts to establish public-
private partnerships and highlights issues that should be ad-
dressed to avoid pitfalls.
A Self-Help Guide identifies decisions local governments may
face when looking at options for a partnership.
EPA will sponsor In addition, EPA will sponsor a series of demonstration projects over
demonstration projects me next three years to illustrate how private sector participation can
improve environmental services. The first demonstration project is in
Berks County, Pennsylvania. It will create a cooperative arrangement
among mobile home park owners. A private engineering firm will be
contracted to provide expert operation and maintenance services for
the small drinking water systems in the mobile home park.
It is the Agency's intention to provide technical resources and exper-
tise to local officials to ensure that local government has the financial
and technical ability to develop and maintain successful partnerships.
Environmental protection continues to be a public good that all ele-
ments of society demand and benefit from. It only makes sense that
everyone participate in providing the protection from which we all
benefit.
38
-------
Action Agenda Key Roles
This section highlights important points brought out in this and other
EPA-sponsored Public-Private Partnerships conferences. It identifies
key roles for EPA, State government, local government, and the
private sector to assist in the successful development of public-private
partnerships.
Federal - EPA Clarify national policies at the Regional, State and local levels to
promote the development of public-private partnerships.
Use public relations to increase public cooperation concerning the
potential role of the private sector in solving environmental prob-
lems.
Communicate with local governments throughout the Region who
may have a clearer understanding of their own communities'
needs, before implementing regulations.
Serve as a source for financial and technical assistance.
Encourage local governments throughout the Region to consider
partnerships and other alternative financing mechanisms to meet
their environmental obligation.
Enlist the forces of the marketplace and the ingenuity and re-
sources of the private sector in meeting environmental protection
goals.
Work to identify and remove legislative and regulatory barriers to
public-private partnerships at all levels of government.
Encourage States throughout the Region to adopt legislation that
promotes public-private partnerships.
Sponsor demonstration projects regionally over the next three
years to show how successful partnerships can work.
Create an Environmental Financial Advisory Board to augment
EPA's efforts in addressing the financial issues we are facing.
Encourage the U.S. Treasury Department to develop and issue
favorable regulations to support greater private involvement in
local government s provision of services. 39
-------
Establish relationships with members of the House Ways and
Means Committee, the Senate Finance Committee, and their staffs
and request them to consider legislation providing more favorable
tax conditions.
Sponsor products that may aid in determining whether partner-
ships will work to improve or expand environmental services in
communities throughout the Region.
State Remove barriers to privatization by allowing local authorities to
issue bonds, procure services, avoid competitive bidding, grant
loans, and enter into contracts.
Use public relations to increase public cooperation concerning the
potential role of the private sector in solving the environmental
management problem.
Seek assistance from other sources of funding beyond the taxpay-
ers' dollars to improve the environment.
Develop legislation to make public-private partnerships attractive.
Local Review all financial options and their implications and feasibility,
such as new taxes, user fees, bonds, and public-private partner-
ships.
Actively campaign for State legislation that will give local govern-
ment the authority to form partnerships.
Select the type of partnership mat meet the particular needs of the
community.
Retain competent legal council during service contract negotiations
to clearly define the responsibilities of the private and public
partners.
Keep up to date on changing Federal regulations that may have
profound effects on public-private partnership development.
Provide public education as a key ingredient for ensuring the
success of a community based partnership.
Seek accountability from the private partners while reassuring the
partners that they will not back out of the partnership.
40
-------
Ensure that the service agreement defines who is responsible for
what, the risks involved, and how disputes will be solved when
problems arise.
Private Sector Explore potential undertakings where partnerships would serve in
the best interest of the community.
Market available expertise to communities to help solve environ-
mental management problems.
Work closely with local communities and examine how the private
sector can meet their needs.
Share success stories with communities.
Become involved in and contribute to the planning process.
Seek to provide accountability to partners while seeking guaran-
tees that the public partners will not back out of the partnership.
Obtain adequate time to review the legal, financial, and regulatory
issues that affect the partnership.
41
-------
42
-------
P3 Conference Attendees
Philadelphia, PA
June 14,1989
(*) = Conference Speaker
A-B
Jack Adams
University of Pittsburgh
NETAC
615 William Pitt Way
Pittsburgh, PA 15260
Sam Bass
AAI Corporation
P.O. Box 126
Hunt Valley, MD 21030
Michael Baum
Connell Finance
45 Cardinal Drive
Westfield,NJ 07092
Leonard M. Bechtel
Resource Planning and Analysis Branch
Resource Management Division
Environmental Protection Agency
401 M Street, SW (PM-225)
Washington, DC 20460
Peg Binney
Resource Planning and Analysis Branch
Resource Management Division
Environmental Protection Agency
401 M Street, SW (PM-225)
Washington, DC 20460
Julie Calhoun
Pennsylvania State Township
Supervisors Association
3001 Gettysburg Road
Camp Hill, PA 17011-7206
William Callazzo (*)
Vice President
Roy F. Weston, Inc.
West Chester, PA 19380
Justin Carisio
DuPont Company
BAD
M7330
Wilmington, DE 19898
Frederick Carpentier
STV/Sanders and Thomas
11 Robinson Street
Pottstown, PA 19464
Tony Ciofalo
National Solid Wastes Management Association
1730 Rhode Island Avenue, NW
Washington, DC 20036
Marian Cody
Grants Administration Division
Environmental Protection Agency
401 M Street, SW (PM 216F)
Washington, DC 20460
43
-------
AlanCohn
Pennsylvania Chamber of Commerce
222 N. 3rd Street
Harrisburg, PA 17101
Durwood Curling
Southeast Public Service Authority
P.O. Box 1346
Chesapeake, VA 23320
D
John Dedyo
STV/SSVK
225 Park Avenue South
New York, NY 10003
Michael Duffalo (*)
Executive Director
Indiana County Municipal
Services Authority
821 Water Street
Indiana, PA 15701
Giles Dumm
Barr Township
P.O. Box 45
Nicktown, PA
E-F
Edwin B. Erickson (*)
Regional Administrator
Environmental Protection Agency - Region 3
841 Chestnut Building (3RAOO)
Philadelphia, PA 19107
Miriam Ershkowitz
City of Philadelphia
1020 Municipal Services Building
Philadelphia, PA 19102
Ellen Fahey
Resource Planning and Analysis Branch
Resource Management Division
Environmental Protection Agency
401 M Street, SW (PM-225)
Washington, DC 20460
Roger Feldman (*)
Privatization Council
McDermott, Will and Emery
1850 K Street NW, Suite 500
Washington, DC 20006
Joan Fredette
Philadelphia Water Department
1101 Market Street
Philadelphia, PA 19107
Rudy Galayda, Jr. (*)
Township Supervisor
Conemaugh Township
104 Janie Court
Johnstown, PA 15904
Thomas B. Gray
Virginia Department of Health
109 Governor Street
Richmond, VA 23219
Harry Gregory, Jr.
Virginia Department of Waste Management
101 North Fourteenth Street
llth Floor
Richmond, VA 23219
Charles L. Grizzle (*)
Assistant Administrator
Office of Administration and
Resources Management
Environmental Protection Agency
401 M Street, SW (PM-208)
Washington, DC 20460
44
-------
H
George Hartley
Frohling and Hartley
Gateway I
Newark, NJ 07102
Robert Hardaker
Office of Cooperative
Environmental Management
Environmental Protection Agency
401 M Street, SW (WH-546)
Washington, DC 20460
Gene Helmich
Westinghouse Resource Energy System
2400 Ardmore Boulevard
Pittsburgh, PA 15221
Jim Himel
City of Baltimore
250 City Hall
Baltimore, MD 21202
Alex Hogge
Fairfax County
P.O. Box 268
Lorton,VA 22079
Mary Holland
Region 1
Environmental Protection Agency
John F. Kennedy Federal Building
Boston, MA 02203
J-K
Gerald Johnson, Ph.D. (*)
Auburn University
7080 Haley Center
Auburn, AL 36849
John Kaston
Grand Central Sanitation
1960 Pen Argyl
PenArgyl,PA 18072
Cynthia Kelly
International City Managers Association
1120 G Street, NW
Washington, DC 20005
Kenneth Laden
D.C. Department of Public Works
2000 14th Street
Washington, DC 20009
Stanely Laskowski (*)
Deputy Regional Administrator
Environmental Protection Agency - Region 3
841 Chestnut Building (3DAOO)
Philadelphia, PA 19107
Valerie Lemmie
Department of Consumer and
Regulatory Affairs
614 H Street, NW
Washington, DC 20001
Harold Loigman
Site Engineers
Day and Zimmerman
1818 Market Street
Philadelphia, PA 19103
Gilbert Longwell
Pennsylvania State Township
Supervisors Association
3001 Gettysburg Road
Camp Hill, PA 17011-7206
45
-------
M
N
Robert MacPherson (*)
Manager
Delaware Department of Natural
Resources and Environmental Control
P.O. Box 1401
89 Kings Highway
Dover, DE 19903
Catherine Mastropieri
Public-Private Partnership Coordinator
Environmental Protection Agency - Region 3
841 Chestnut Building (3PM70)
Philadelphia, PA 19107
Steven Merrill
Maryland Department of the Environment
2500 Broening Avenue
Baltimore, MD 21224
Megan Milford
Waste Management, Inc.
Philadelphia, PA 19107
Albert Montague
Hazardous Waste Management Division
Environmental Protection Agency - Region 3
841 Chestnut Building (3HWOO)
Philadelphia, PA 19107
Jane Moore
Public-Private Partnership Coordinator
Environmental Protection Agency - Region 6
1445 Ross Avenue
12th Floor, Suite 1200
Dallas, TX 75202
Steven Moore
Heritage Foundation
214 Massachusetts Avenue, NE
Washington, DC 20002
Michael Nedbal
Philadelphia Suburban Water Company
765 Lancaster Avenue
BrynMawr,PA 19010
Wilbur Nelson
D.C. Department of Regulatory
and Consumer Affairs
614 H Street, NW
Washington, DC 20001
Robert Nies
Conemaugh Township
104 Janie Court
Johnstown, PA 15904
o
Marvin Odeskey
Chemical Industry Council of Maryland
5500 Chemical Road
Baltimore, MD 21226
Myron Olstein
Peat, Marwick, Main, and Company
2001 M Street, SW
Washington, DC 20007
David Osterman (*)
Chief, Resource Planning and Analysis Branch
Resource Management Division
Environmental Protection Agency
401 M Street, SW (PM-225)
Washington, DC 20460
Barbara Paley (*)
Legislative Representative
National Association of Counties
440 First Street, NW
Washington, DC 20001
46
-------
Richard Pecora
Assistant Secretary
Maryland Department of the Environment
2500 Broening Avenue
Baltimore, MD 21224
Robert Perciasepe (*)
Deputy Secretary
Maryland Department of the Environment
2500 Broening Avenue
Baltimore, MD 21224
Harvey Pippen (*)
Director
Grants Administration Division
Environmental Protection Agency
401 M Street, SW (PM-216F)
Washington, DC 20460
Bernie Podlucky
Conemaugh Township
104 Janie Court
Johnstown, PA 15904
David Pointo
i
National Solid Wastes Management
Association
1 Eves Drive
Suite 111
Marlton,NJ 08053
Gene Pontillo
Resource Planning and Analysis Branch
Resource Management Division
Environmental Protection Agency
401 M Street, SW (PM-225)
Washington, DC 20460
Andrew Quigley (*)
Project Manager
Fairfax County
3930 Fender Drive
Fairfax, VA 22030
R-S
Robert Reed
Comptroller
Environmental Protection Agency - Region 3
814 Chestnut Building (3PM30)
Philadelphia, PA 19107
John J. Sandy
Director
Resource Management Division
Environmental Protection Agency
401 M Street, SW (PM-225)
Washington, DC 20460
Bernie Sarnoski
Construction Grants Branch
Water Management Division
Environmental Protection Agency - Region 3
841 Chestnut Building (3WM23)
Philadelphia, PA 19107
J. Erik Schaeffer
Atwoods, Inc.
P.O. Box 478
Honeybrook, PA 19344
Steven Schmidt (*)
Chief, Program Planning and Evaluation
Pennsylvania Department of Environmental
Resources
P.O. Box 2063
Harrisburg, PA 17120
Ben Schranze
Hazox Corporation
P.O. Box 637
Chadds Ford, PA 19317
Joseph Schrock
West Virginia Department of Health
State Office Building #3
Charleston, WV 25305
47
-------
Larry Scully (*)
President
Scully Capital Services, Inc.
1133 15th Street, NW
Washington, DC 20005-2701
David Seader (*)
Vice President
DnC America Banking Corporation
600 Fifth Avenue
New York, NY 10020
James Seif, Esq.
Dechert, Price, and Rhoads
3400 Center Square West
1500 Market Street
Philadelphia, PA 19102
Thomas Slencamp
Environmental Protection Agency - Region 3
Environmental Services Division
841 Chestnut Building (3ES43)
Philadelphia, PA 19107
Daniel Snyder
Baskin, Flaherty, Elliott, & Mannilo, PC
1800 Three Mellon Bank Center
Philadelphia, PA 19102
Henry Sokolowski
Grants Management and Audit Branch
841 Chestnut Building (3PM70)
Philadelphia, PA 19107
Dorothy Spriglia
Delaware Development Office
P.O. Box 1401
99 Kings Highway
Dover, DE
Ralph Sullivan
Council of Infrastructure Financing Authorities
P.O. Box 39187
Washington, DC 20016
48
T-V-W
Lawrence Teller
Office of Congressional and
Intergovernmental Affairs
Environmental Protection Agency - Region 3
841 Chestnut Building (3CIOO)
Philadelphia, PA 19107
Richard Turner
City of Danville
P.O. Box 3300
Danville, PA 24541
N.C. Vasuki (*)
General Manager
Delaware Solid Waste Authority
P.O. Box 455
Dover, DE 19903
Ronald Wagenmann (*)
Township Manager
Upper Merion Municipal Utility Authority
175 West Valley Forge Road
King of Prussia, PA 19406
Frederick Warren
Office of the Comptroller
Environmental Protection Agency - Region 3
841 Chestnut Building (3PM32)
Philadelphia, PA 19107
John Weaver
Rohm and Haas Company
Independence Mall West
Philadelphia, PA 19105
Allison Wescott
International City Managers Association
1120 G Street, NW
Washington, DC 20005
William T. Wisniewski (*)
Assistant Regional Administrator
Environmental Protection Agency - Region 3
841 Chestnut Building (3PMOO)
Philadelphia, PA 19107
-------
George Wren
Southeast Rural Community Assistance Project
P.O. Box 2868
702 Shenandoah Avenue
Roanoke,VA 24001
Iraj Zandi
University of Pennsylvania
Department of Systems
Philadelphia, PA 19104
49
-------
Office of the Comptroller
Public-Private Partnerships Initiative Staff
John J. Sandy
Director
Resource Management Division
(202) 382-4425
David Osterman
Chief
Resource Planning and Analysis Branch
(202) 475-8227
Staff: Leonard Bechtel
Margaret Binney
Ellen Fahey
Keith Hinds
Kim Lewis
Joanne Lynch
Timothy McProuty
Eugene Pontillo
Public-Private Partnerships
Regional Coordinators
Region 1
Region 2
Region 3
Region 4
Region 5
Region6
Region 7
Region 8
Region 9
Region 10
Boston
New York
Philadelphia
Atlanta
Chicago
Dallas
Kansas City
Denver
San Francisco
Seattle
Deborah Harstedt
Helen Beggun
Cathy Mastropieri
Tom Nessmith
Richard Walker
Jane Moore
Gene Ramsey
Evelyn Daniels
Dennis Sohocki
Sharon Childs
Marsha Harris
Julie Hagensen
(617)
(212)
(215)
(404)
(312)
(214)
(913)
(303)
(415)
(206)
- 565-3395
- 264-9860
- 597-9358
- 347-7109
- 353-2024
- 655-6530
- 236-2825
- 293-1460
- 974-0960
- 442-4044
50
-------
For More Information:
U.S. Environmental Protection Agency
Resource Management Division (PM-225)
401 M Street, SW
Washington, DC 20460
(202)-475-7044
51
------- |