EPA
GENERAL PROCEEDINGS AND
ACTION AGENDAS FROM THE
U.S. ENVIRONMENTAL PROTECTION AGENCY'S
NATIONAL LEADERSHIP CONFERENCE
BUILDING PUBLIC-PRIVATE
PARTNERSHIPS
WEDNESDAY, OCTOBER 26,1988
THE MAYFLOWER HOTEL
1127 CONNECTICUT AVENUE, N.W.
WASHINGTON, DC 20036
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vvEPA
GENERAL PROCEEDINGS AND
ACTION AGENDAS FROM THE
U.S. ENVIRONMENTAL PROTECTION AGENCY'S
NATIONAL LEADERSHIP CONFERENCE
BUILDING PUBLIC-PRIVATE
PARTNERSHIPS
WEDNESDAY, OCTOBER 26,1988
THE MAYFLOWER HOTEL
1127 CONNECTICUT AVENUE, N.W.
WASHINGTON, DC 20036
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Preface Conference Proceedings and Materials
These are the edited proceedings from our National Conference on
Building Public-Private Partnerships that was held at the Mayflower
Hotel in Washington, DC on October 26, 1988. Also included are the
action agenda produced by the conference panels, the final conference
action plan, and relevant appended documents. I ask that conference
attendees review the materials and provide us with your views and
comments. It is my hope that you will find the materials both useful and
interesting.
Charles L. Grizzle
Assistant Administrator for Administration
and Resources Management
U.S. Environmental Protection Agency
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Proceedings Table of Contents
Page Title
1 Executive Summary
3 Conference Agenda
Opening Session
9 Welcoming Remarks and Strategy
Charles L. Grizzle
Assistant Administrator
Office of Administration and Resources Management
U.S. Environmental Protection Agency
11 The Challenges Ahead
Lee M. Thomas
Administrator
U.S. Environmental Protection Agency
13 The Benefits of Public-Private Partnerships
Ronald D. Utt
Associate Director for Privatization
Office of Management and Budget
15 Morning Panel Sessions
17 Barriers and Incentives to Investment
21 Elements of Successful Partnerships
27 Community Priorities
33 Luncheon Session
35 Financing Public-Private Partnerships
Roger Feldman
Partner
Project Finance and Development Group
Nixon, Hargrave, Devans, and Doyle
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37 Institutionalizing Public-Private Partnerships
John Sandy
Director
Resource Management Division
U.S. Environmental Protection Agency
39 Afternoon Panel Sessions
41 Drinking Water
45 Wastewater Treatment
51 Solid Waste Disposal
55 Closing Session
57 Where Do We Go From Here?
Charles L. Grizzle
Assistant Administrator
Office of Administration and Resources Management
U.S. Environmental Protection Agency
59 Action Plan: Major Conference Recommendations
61 Appendices
63 Official Conference Attendance List
73 EPA Contacts List
75 Bibliography of Documents
79 Conference Evaluation Results
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National Leadership
Conference on Building
Public-Private Partnerships
Executive Summary
Background
Overall Goal
Two concurrent trends challenge our ability to maintain and improve our
standard of environmental quality. First, needs and expectations for
environmental protection are growing. The environmental legislation
reauthorized by Congress in recent years (RCRA, CWA, SDWA, and
SARA) has placed significant new requirements on states and communi-
ties. Pending legislation for clean air, incinerators, removing asbestos
from public buildings, and controlling radon and acid rain would place
additional costs and requirements on them.
Meanwhile, continuing Federal budget deficits, tax reduction initiatives,
such as the Tax Reform Act of 1986, and the growing overall demands
being placed on state resources have constrained traditional public
sources of environmental funding. The result has been an increased
shortfall between needs for environmental dollars and the resources
available to meet those needs.
With these issues in mind, EPA has formed an Agency-wide Steering
Committee and Task Force on Public-Private Partnerships. The Admin-
istrator has asked Charles L. Grizzle, Assistant Administrator for Admini-
stration and Resources Management, to serve as Chairperson of the
Steering Committee and David P. Ryan, the Agency's Comptroller, to
head the Task Force. The Task Force and a full-time staff within the Office
of the Comptroller are supporting the Steering Committee in planning and
carrying out this important initiative.
The overall goal of this initiative is to increase the private sector's
role in helping to meet environmental needs. Special attention will be
given to developing partnerships in three critical program areas:
drinking water, wastewater treatment, and solid waste disposal.
The Purpose of the
Leadership Conference
and Its Approach
The National Leadership Conference is the Agency's first step towards
establishing a dialogue with interested parties on building public-private
partnerships. The Conference, primarily a working conference rather than
an informational one, centered on six panels that addressed barriers and
incentives to investment, elements of successful partnerships, commu-
nity priorities, wastewater treatment, drinking water, and solid waste
disposal. Each panel produced a concrete action plan that reflected the
panel's consensus on how EPA, state and local governments, and the
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private sector can encourage public-private partnerships. The consoli-
dated action plan will serve as the basis for the Agency's partnership
initiative. It is located at the end of the proceedings.
Major Conference
Recommendations
Conference Participants
The panel sessions and open discussions yielded important recommenda-
tions on the roles of each participant in public-private partnership initia-
tives. In sum, the Conference called for:
Strong leadership by EPA and the States
Open communication and information sharing
Flexible laws and regulations to encourage partnerships
Realistic pricing of services
Education on partnerships to support the needs of communities
Greater local planning and participation
A full listing of Conference recommendations is available in the panel
summaries and the Conference Action Plan.
It has been the intent of the Environmental Protection Agency to bring
together leading experts from the public and private sectors to explore the
problems and opportunities involved in using public-private arrange-
ments to finance environmental activities. Participants in the Leadership
Conference included strong representation from Federal, state, and local
government, the business, industry, banking and financial professions,
associations, academia, foundations, and environmental groups. The
deliberations of these officials form the basis of the Agency's partnership
initiative.
Conference Proceedings
The proceedings summarize the major activities and conclusions of the
Leadership Conference. Included are abstracts of the speeches presented
in the opening, luncheon, and closing sessions, summaries of the delibera-
tions and action plans from each panel, and supplementary materials that
might be of use to recipients of the proceedings. A videotape of the
Conference is available for interested organizations or individuals. For
further information on the proceedings, the Conference video, or other
public-private partnership initiatives and materials, contact David Oster-
man, Chief of the Resource Planning and Analysis Branch of the Re-
source Management Division at (202) 475-8227.
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AGENDA U.S. EPA CONFERENCE ON BUILDING PUBLIC-
PRIVATE PARTNERSHIPS
WEDNESDAY, OCTOBER 26,1988
MAYFLOWER HOTEL, WASHINGTON, DC
Theme:
8:00 - 9:00 a.m.
9:00 - 9:15 a.m.
State Room
State Room
9:15 - 9:30 a.m. State Room
9:30 -10:00 a.m. State Room
Increasing the private sector's role in meeting environ-
mental needs by building public-private partnerships,
especially in the areas of drinking water, wastewater
treatment, and solid waste disposal.
Registration and Coffee
Welcoming Remarks and Strategy
Charles L. Grizzle, Assistant Administrator, U.S. EPA
The Challenges Ahead
Lee M. Thomas, Administrator, U.S. EPA
The Benefits of Public-Private Partnerships
Ronald D. Utt, Associate Director for Privatization
Office of Management and Budget
10:00-11:00 a.m.
Breakout Sessions on Crosscutting Issues
Three concurrent panels on issues relevant to building public- private
partnerships: barriers and incentives to investment, elements of
successful partnerships, and community priorities. Each panel will
discuss the nature of the problems, explore the options, and develop a
presentation reflecting the consensus of that group.
State Room Panel on Barriers and Incentives
Panel Leader
frank Blake, Swidler and Berlin
Panel Members
Peter Imhoff, Dillon Read and Co., Inc.
Nicholas Kepple, First Selectman, Stonington, Connecticut
C. Morgan Kinghorn, U.S. EPA Office of Administration and
Resources Management
George McCann, New Jersey Department of Environmental
Protection
Joseph McGough, Parsons, Brinkerhoff, Quade & Douglas
Larry Scully, Scully Capital Services
Ronald Utt, Office of Management and Budget
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Massachusetts Panel on Elements of Successful Partnerships
Room
Panel Leader
Richard Dewling, M & E Technologies, Inc.
Panel Members
Galen Heckman, Township Supervisor, Peters Township,
Mercerburg, Pennsylvania
R. Jerrard King, Environmental Management Corporation
Jeffrey Klein, Kidder, Peabody and Co., Inc.
Rolland W. Lewis, Mayor, Mt. Vernon, Illinois
John Murphy, The Privatization Council
Craig Potter, York Services, Inc.
David Seader, DnC America Banking Corporation
New Hampshire Panel on Community Priorities
Room
Panel Leader
Robert Way I and, U.S. EPA Office of Policy, Planning, &
Evaluation
Panel Members
Waylon Lacey, City Administrator, Blakely, Georgia
Myron Olstein, Peat Marwick Main
Paul Shinn, Government Finance Research Center
Jack Sullivan, American Water Works Association
Roy Torkelson, New York Department of Environmental
Conservation
Roderick Wood, Assistant City Manager, Escondido, California
11:00 -11:20 a.m. State Room
11:20 -12:20 p.m. State Room
12:20 -1:45 p.m. Chinese Room
1:45-2:00 p.m. Chinese Room
2:00-3:15 p.m.
Morning Break
Presentations from Panels
A spokesperson from each panel will present the consensus of opinion
for the topic discussed.
Luncheon and Speaker
Financing Public-Private Partnerships
Roger Feldman, Partner, Nixon, Hargrave, Devans & Doyle
Institutionalizing Public-Private Partnerships
John J. Sandy, Director, Resource Management Division,
US. EPA
Breakout Sessions on Specific Issues
Three concurrent sessions on issues determined by media: drinking
water, wastewater treatment, and solid waste disposal. Each panel will
discuss the nature of the problems, explore options for financing, and
suggest solutions for the future.
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State
Room
Massachusetts
Room
Panel on Wastewater Treatment
Panel Leader
Michael Quigley, U.S. EPA, Office of Municipal Pollution
Control
Panel Members
Kathy Fletcher, Puget Sound Water Quality Authority
Galen Heckman, Township Supervisor,Peters Township,
Mercerburg, Pennsylvania
Bill James, Prudential-Bache Capital Funding
Stephen Moore, The Heritage Foundation
Bob Perry, Water Pollution Control Federation
Linda Eichmiller, Association of State and Interstate Water
Pollution Control Administrators
Jane Schaut z,Rensselaerville Institute
Tom Sheridan, Legg, Mason, Wood, Walker, Inc.
Panel on Drinking Water
Panel Leader
Michael Cook, U.S. EPA, Office of Drinking Water
Panel Members
James Barr, American Water Works Service
Ann Cole, National Association of Towns and Townships
Nicholas Kepple, First Selectman, Stonington, Connecticut
Fred Mam>cco,Pennsylvania Department of Environmental
Resources
Wade M«7kr,Association of State Drinking Water
Administrators
Thomas E. Stephens, Nevada Public Service Commission
Beth Ytell, Rural Community Assistance Corporation
New Hampshire Panel on Solid Waste Disposal
Room
Panel Leader
Jeffrey Denit, U.S. EPA, Office of Solid Waste
Panel Members
William Brown, Waste Management Incorporated
Carol Kocheisen, National League of Cities
Waylon Lacey, City Administrator, Blakely, Georgia
Jim Pose, Delaware Solid Waste Authority
Ronald Potesta, West Virginia Natural Resources Department
Robert Wasserstrom, National Solid Waste Management
Association
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3:15 - 3:35 p.m. State Room
3:35-4:35 p.m. State Room
4:35-5:00 p.m. State Room
Afternoon Break
Presentations from Panels
A representative from each panel will present findings on options for
the future from the breakout sessions.
Where Do We Go From Here?
Charles L. Grizzle
5:00 - 6:00 p.m. Cabinet Room Reception/Cash Bar
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Abstracts from Opening Session
Comments: Welcoming Remarks and Strategy
Charles L. Grizzle
Assistant Administrator
Office of Administration and Resources Management
U.S Environmental Protection Agency
The Challenges Ahead
Lee M. Thomas
Administrator
U.S. Environmental Protection Agency
The Benefits of Public-Private Partnerships
Ronald D. Utt
Associate Director for Privatization
Office of Management and Budget
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Excerpts from Welcoming Remarks and Strategy
Speaker Charles L. Grizzle,
Assistant Administrator
Office of Administration & Resources Management
U.S. Environmental Protection Agency
The President's
Executive Order
FY1989 EPA
Partnership Goals
Welcome to the EPA National Leadership Conference on Building
Public-Private Partnerships. This conference will be the first in a series
of meetings to be held around the country.
This initiative began in response to the President's December 1987
executive order which requires government agencies to rely on the private
sector for commercial activities. Administrator Lee Thomas and EPA are
going beyond the traditional approach of contracting with the private
sector for support activities. EPA looks at privatization as one way to help
meet critical environmental financing needs and environmental require-
ments. The Administrator created a Steering Committee, composed of
Assistant and Regional Administrators, and a Task Force of Office and
Division Directors to provide Agency-wide leadership for examining the
viability of public-private partnerships. There is also a staff within the
Office of the Comptroller to support this initiative.
EPA's strategy in FY 1989 is to explore and promote the use of public-
private partnerships in the areas of drinking water supply, wastewater
treatment, and solid waste disposal. EPA has set four goals in accordance
with this strategy:
To document successful and unsuccessful public-private partner-
ships and detail the criteria for success.
To determine the types of viable private financing alternatives
available to states and communities.
To identify the impediments to these arrangements and the incen-
tives that can be offered.
To share information about public-private partnerships with com-
munities and to provide them with assistance in determining an ap-
propriate course of action and in managing for the best results.
EPA has organized this conference because we need your expert recom-
mendations and views on our strategy. We also need your opinion on what
roles EPA, state and local governments, and the private sector should
play. Your input is vital in helping us develop a final agenda for
addressing the environmental financing challenges that communities
face.
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Excerpts from The Challenges Ahead
Speaker Lee M. Thomas
Administrator
U.S. Environmental Protection Agency
The Challenge of
Environmental Financing
The challenge ahead is to bring together public and private interests to
meet the demands of the future for environmental protection. We must
provide those environmental services and we must confront the problem
of financing those services in a way differently than before, since federal
and state funds are not available in the amounts they once were. The
challenge of environmental financing will test our ability to prove that
the benefits of environmental protection exceed the costs of providing
those benefits.
Progress Has Been Made
but Much Work Remains
To Be Done
Systematic Approach
to Pollution Control
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The country has made progress on environmental improvement. This
progress and the costs to achieve it can be measured in a number of areas.
For example, wastewater treatment has been improved and expanded to
respond to thousands of community treatment needs. Public and private
agencies alike have made this happen. Much work remains to be done,
however, particularly in the case of small communities. In addition, there
is the need to upgrade existing facilities and go beyond secondary
treatment to improve water quality where threats to public health and the
environment remain. Preserving coastal waters and their fragile ecosys-
tems will also place greater demands on dischargers of effluent. To assure
these improvements in water quality, the costs will be substantial.
In conjunction with the Congress, the Agency has established policies to
move forward on improvements to drinking water. Additional progress
needs to take place in the air quality program. Costs of compliance in both
cases will be high.
We have had some success in controlling solid and hazardous waste, but
there is much to do in order to face the extent and nature of the solid and
hazardous waste problems in society today.
In order to respond to these and other environmental challenges, there are
choices to make concerning major economic factors and investment
questions. Government must weigh the economic impacts of pollution
control in relation to the cost effective benefits that ensue from environ-
mental protection. We will have to work smarter and in new ways. The
potential of public-private partnerships is one of the more promising new
ways we can in fact work smarter for the environmental good.
Fundamental to the new approaches to meet our current and impending
challenges in environmental protection is a systematic approach toward
pollution control. The cost of water pollution control, for instance, does
not only involve the removal of pollutants from the waterways or prevent-
ing them from entering. We also must deal with the sludge and other by-
products that result from our treatment process. New technologies and
incentives will be developed, diffused, and promoted. We have created
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an Advisory Group to counsel the Agency on how to encourage this. Key
to this will be to:
Keys to Promoting New
Technologies and
Incentives
Improve methods of developing new technology;
Examine the potential of public-private partnerships and the innova-
tions they might encourage with respect to technology and environ-
mental financing; and
Move forward with these solutions in the field.
Needfor
New Collaborative
Approaches
Just as technology and its systematic use is a critical component of our
strategy to meet the challenges of environmental protection, it is also
important to understand fully the economic impacts that communities
face as they attempt to comply with environmental regulations. All three
of the areas we are discussing today drinking water, wastewater
treatment, and solid waste disposal will require capital funding and
operation and maintenance expenditures far beyond the current capabili-
ties to provide for them. This is one of several conclusions of a recent EPA
study on the economic impact of EPA regulations on communities,
business, and agriculture.
There is great potential for developing new approaches to finance the
construction, operation, and maintenance of new facilities. To assure this
potential is realized, the public and private sectors need to establish more
collaborative approaches if we hope to improve the quality of the
environment. I hope that one of the outcomes of this conference is
developments in this area.
We need improvements in the existing approaches we use toward solid
waste disposal. Landfills need to be relieved by recycling. It may well
be that we should provide incentives to encourage the degree of recycling
necessary to that will take the pressure off our landfill problem. Integral
to any efforts to solve our landfill problem is a large degree of coopera-
tion and communication among business, government, and the commu-
nities.
As a country, we can be proud of our progress in environmental protec-
tion. Our efforts to control chemicals and pesticides have involved
creative, successful strategies in the handling of these and other pollution
problems that affect human health and the environment. These successes
are the foundation upon which we can build to meet the challenges of the
future. In particular, local communities throughout America will be
challenged to provide more and more environmental services, particu-
larly in the three areas we are addressing today.
The Partnership Action I wish Xou well *n vour deliberations today in the three selected areas.
. , I trust mey will include discussion about the technologies and financial
Agenda implications I have mentioned By the end of the day, we need a sense
of an action agenda to give direction to our initiative. This agenda will
be well served by discussion on die partnerships and the roles each of us
has in the environmental tasks before us, meeting the environmental
challenges we face. Good luck.
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Excerpts from Benefits of Public-Private Partnerships
Speaker Ronald D. Utt,
Associate Director for Privatization
Office of Management and Budget
Privatization traditionally has been identified as the selling of govern-
ment assets rather than the provision of services by the private sector. The
British experience of privatization under Thatcher is an example of the
selling off of nationalized or publicly run industries to the private sector,
gaining funds for the public purse while at the same time transferring the
operation of these functions to private hands.
Private Sector Provision In the United States, public-private partnerships represent more the
of Services not*on of involving the private sector in providing services, rather than
J wholesale sell-offs. EPA deserves credit for being more supportive of
this concept than many other Agencies in the Federal government.
State/Private
Partnerships
Several considerations create a climate for partnerships in these times.
The FY 1989 budget is projected to have a $145-$ 146 billion deficit.
Since Gramm-Rudman sets a $ 100 billion ceiling on the FY 1990 deficit,
a $45 billion cut in spending will have to occur.
First, the public sector must turn to the private sector to maintain or im-
plement programs hit by the cuts.
Second, the Federal budget involves a substantial commitment to infra-
Structure spending, close to $50 billion this year. This commitment means
many opportunities for partnerships as these services are planned and
provided.
Third, the private sector is eager to involve itself in public works projects
in all stages: planning, financing, development, and ownership. Both the
interest in the work and the financial commitment to make it happen are
present.
Although the Federal government's track record in public-private part-
nerships is limited, a number of states deserve credit for being way ahead
in the use of these initiatives. Several examples of state/private joint
efforts include:
Illinois is working on a major $2.5 billion highway which will be
financed by the private sector and paid for by tolls.
Florida is planning a high-speed $2.0 billion rail system for which
several serious offers for financing have been received from the
private sector.
Minnesota is planning to build a privately-financed airport.
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Untapped Opportunities *n summary, the private sector is willing to participate in these initiatives
to support the nation's traditional public works investment. There are
many opportunities out there, but die connections have yet to be made
in numbers that will contribute fiscally and in terms of improved quality
of services to the extent that is believed possible.
The Challenge to the This is the challenge for the Federal government:. To remove the ob-
stacks blocking the establishment of partnerships so that the Federal
govemment's withdrawal into the activities that it logically should
continue to provide will go smoothly and successfully.
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Panel Summaries Morning Sessions
Panels on: Barriers and Incentives to Investment
Elements of Successful Partnerships
Community Priorities
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16
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Panel on Barriers and Incentives to
Investments
Introduction
Goals
Adequate investment is central to the success of public-private partner-
ships. The current environment for investment has been influenced
adversely by provisions of the Tax Reform Act of 1986. Additionally,
environmental regulations, rate structures, statutory limitations and inter-
pretations of statutes have often affected the authority of public and
private entities to enter into partnerships.
This panel sought to (1) identify the financial, statutory, regulatory,
institutional, and informational issues which create barriers and block
incentives to investment and (2) suggest methods to overcome barriers
and to establish incentives.
Key Points by Panelists
(in order of presentation)
Statutory barriers
need to be assessed
Morgan Kinghorn
U.S. Environmental Protection Agency:
The state financial and environmental communities need to come
together to define relative roles and responsibilities. At the Federal
level, EPA and the Treasury must establish an effective relationship.
Statutory barriers at the State level exist and need to be assessed in
light of the needs for environmental financing.
Regulations involving State revolving funds, if not structured prop-
erly, are potential barriers to effective partnerships.
Joseph McGough
Parsons, Brinkerhoff, Quade, and Douglas
In going forward, workable definitions for privatization and institu-
tional roles must be developed.
Likewise, thought must be given to the ways in which participants will
be able to or be permitted to benefit from the operation of partnerships.
Success requires an
understanding of
partner's roles
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Peter Imhoff
Dillon Read and Co., Inc.
Partnerships succeed when no illusions about participants' roles or
expectations exist. On the one hand, government is looking for ways
to provide environmental services cheaply and effectively. On the
other hand, the introduction of private sector involvement means the
addition of tax and profit components that add further costs to the
capital, operations, and maintenance angle. Decision-makers must
acknowledge and confront these countervailing elements.
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Larry Scully
Scully Capital Services
Assigning tasks and risks in these ventures is difficult; however,
government must clearly specify public and private duties and assign
risks.
No universal blueprint
for partnerships exist
George McCann
New Jersey Department of Environmental Protection
Partnerships have great potential, but no one plan or approach is
universal. The applicability of each option must be examined in each
specific context. For instance, New Jersey is exploring the potential
for the consolidation of services and the freer movement and provi-
sion of services and facilities between the public and private sectors.
Galen Heckman
National Association of Towns and Townships
31,000 of 40,000 communities in the United States have a population
of less than 5,000 people. Government regulators must be sensitive
to the burdens placed on these small communities. In many cases,
small communities lack the resources and expertise to deal with the
environmental demands placed on them.
Comments from
the Audience
The number and complexity
of entities hinders
partnership development
Education is critical
to success
Marketing applications and
services is also critical
Lease/purchase options and their potential for creating incentives for
investment have yet to be creatively examined, particularly with
respect to the State/Federal grants angle.
If the financial community is expected to participate in partnerships,
how to depreciate a federally-funded asset must be made clear.
At the core of the barriers debate, the outstanding problem is the sheer
number of organizations and laws that are involved, both across and
within levels of government. Such volume and complexity hinders
the potential for effective partnerships and improved services.
The lack of expertise at the local level will continue to be a barrier to
the formation of partnerships. EPA is in a position to be a focus for
major elements of this developmental task.
Education of the participants about their own and each other's roles
is critical to successful public-private partnerships.
Leadership is key. Decision-makers must know the needs and poten-
tial contributions of otherparticipants in partnerships so that the needs
can be met and available skills can be utilized.
Marketing potential applications and services is critical. For instance,
communities can share their experiences and the potential options for
providing services with other communities that have common prob-
lems and characteristics.
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Action Agenda Produced The panel identified eight areas in which barriers to successful implem-
by Barriers and entation of public-private partnerships exist.
Incentives Panel
Money Educate the public sector to accept tax savings and profits as a
necessary incentive for investors.
Acknowledge that each party participates in a public-private part-
nership for diverse reasons.
Small Communities
Conduct EPA-sponsored demonstration projects in small communi-
ties.
Aim information and education efforts at small communities.
Environmental and
Financial Communities
Establish more and better communication between the environ-
mental and financial communities so that roles and responsibilities
can be assigned.
Begin EPA-initiated dialogue with the Treasury Department.
Assess the macroeconomic impacts of a variety of tax incentives on
revenue.
Develop a universal accounting base.
Taxes and Regulations
Examine and modify "useful life" and "pass back" definitions so that
public and private monies will be used most effectively.
Provide private sector access to public sector funds in cases where
such provisions will clearly lead to environmental improvements.
Review and update OMB Circulars concerning public-private part-
nerships.
Procurement
Modify laws concerning the design, building, and operation of en-
vironmental service or protection facilities to encourage private
sector participation and investment
Advertise changes in stole revolving fund regulations (when final-
ized) that encourage private sector participation.
Time Clarify and simplify Federal, Stole, and local requirements and re-
views to shorten project completion times and reduce costs.
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Education Convince Congress, State legislatures, and the general public that
public-private partnerships are not a selling of public assets.
Stress that partnerships may involve construction, design, opera-
tion, and maintenance, not just ownership.
Advertise successful public-private partnerships.
Establish expert peer transport groups.
Provide peer transport groups with travel costs so that they can share
solutions and expertise with particular communities.
Technology Develop effective soft technology transfer programs which stress
financing techniques and structuring of public-private partnership
contracts.
Develop effective hard technology transfer programs which stress
techniques on how to build better facilities.
Develop technical resource groups.
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Panel on Elements of Successful
Partnerships
Introduction
Goals
Key Points by Panelists
(in order of presentation)
States must create
a favor able
legislative climate
There exist a number of ways cooperative ventures between public and
private entities can be established. These include total private provision
of the environmental service, contracted private operation and mainte-
nance, voluntary developer and municipal partnerships, involuntary
developer financing, and full privatization. Regardless of the type of
venture, successful public-private partnerships offer benefits to all par-
ticipants. They provide competitive economic returns to the private
partners while delivering high-quality environmental services at reason-
able costs to users. Successful partnerships are particularly valuable
when they attain rapid project completion, guarantee performance, and
achieve reduced costs.
This panel sought to identify key elements of successful partnerships. The
experiences gained from partnerships to provide drinking water, waste-
water treatment, and solid waste disposal served as the basis for the panel's
deliberations.
John Murphy
The Privatization Council
For public-private partnerships to begin and flourish, States must
create a favorable legislative climate. Likewise, the Federal Govern-
ment must create a better tax environment. (The Tax Reform Act of
1986 eliminated many of the incentives to develop public-private
partnerships.)
The private partner should have a successful record on environmental
projects, the ability to bring together competent legal, technical, and
financial advisors, stability, flexibility, and access to capital.
Federal, State, and local public officials must support the partnership
and engage in educating the public as to its importance.
Both the public and private partners must work together to resolve any
labor issues associated with a project.
Jeffrey Klein
Kidder, Peabody and Co., Inc.
A partnership must have clear objectives and goals. Similarly, both
partners must have clear duties and responsibilities.
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Clear roles and
repsonsibilities are
important
The decision-makers within the partnership must be clearly identi-
fied.
Both partners must agree on how to measure progress.
Environmental services will require more money in the future due to
increasing costs and decreasing availability of Federal grants and
loans. Even the establishment of private-public partnerships and
other financing techniques cannot prevent higher rates and fees. It is
important that the public realize this.
The issue facing the local community is whether to consider public-
private partnerships as a means of providing services most efficiently.
Innovative research
is key to progress
Profit is an acceptable
reward for risk
taking
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Lack of funding forces
local governments into
partnerships
J. Craig Potter
York Environmental Services, Inc.:
It is necessary to remove institutional biases against public-private
partnerships.
Research fuels the development of new, innovative alternatives.
Thus, actively seeking better research is a key factor in producing real
environmental solutions.
David Seader
DnC America Banking Corporation:
The public must understand that partnerships involve profit for the
private partner. Profit is the necessary incentive and reward for risk-
taking.
The services contract should state clearly the project's goals, specify
performance requirements, assign responsibilities for the risks in-
volved, and remain flexible enough to incorporate future changes.
It would be helpful if EPA were to develop a model services contract.
Certainty is crucial. Bankers need to be certain that their monies will
be repaid. Likewise, the community needs to be certain that opera-
tions will continue.
Holland Lewis
Mayor, Mt. Vernon, Illinois:
Governments enter into public-private partnerships because the lack
of funding forces them to do so. Private firms enter into partnerships
because they seek clear, concise, and reasonable profits.
-------
Trust is essential
Technology transfer
need not be expensive
To sustain motivation and high-quality service, profit should be
spread over a long period (20 to 30 years). The community should not
pay large sums of money up front.
Retaining a single service source is desirable. The trust developed
between partners will lead to greater project viability and to collater-
alization of finances.
If a project is viable, financing exists.
R. Jerrard King
Environmental Management Corporation:
Service contracts should provide the private partner with long-term
profit.
Capital and operating responsibilities should reside with the service
source.
Trust between public and private partners is essential. It would be in
everyone's best interest to institutionalize trust or to build a structure
that reduces the need for trust.
Nicholas Kepple
First Selectman, Stonington, Connecticut:
Small communities of 5,000 or fewer people should be made aware
of the technological advantages available to help them. The private
sector should take the initiative in providing such information.
Technology transfer does not have to be fancy or expensive. For
example, Stonington' s use of a trash compactor, purchased for $ 130,000
will extend the life of our landfill by an additional one-third.
Comments from
the Audience
Communities turn to the private sector because they receive insuffi-
cient or no grant money, are under a compliance order, or are too small
to provide services with their own resources.
Communities with poor bond ratings can rely on the credit rating of
their private partner or request funds from their state revolving fund.
It is difficult for public-private partnerships to participate in the
regionalization of environmental services. Communities' different
bond ratings and sizes also make it difficult.
The possibility of selling a private contract can help ensure high-
quality performance.
23
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Partnership options offer Before using Federal or State grant funds, local communities should
alternatives to traditional research self-help approaches and see what monies are available
grant funding ^^ partnership options.
A dispute resolution mechanism should be built into a service contract
so that changes in technology, regulations, and private ownership can
be accommodated.
The development of a model services contract is a good idea.
If state governments were willing to enhance small communities'
credit, then more small private firms would participate in partner-
ships.
24
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Action Agenda Produced
by Elements of Successful
Partnerships Panel
The panel's action agenda addressed four major areas: planning, com-
munication/ education, service contracts, and enforcement. The panel-
ists placed particular emphasis on the need for (1) public acceptance of
profit and (2) clarity of service contracts.
Planning Aim for sole source responsibility in financing, engineering, and
assessment.
Minimize rate shock through public/private cooperation and col-
laboration.
Communication/
Education
Promote the idea that profit is vital to establishing and maintaining
a public-private partnership.
Stress the fact that providing environmental services in the future
will be more expensive.
Communicate the fact that grant monies were cheaper than any
presently available combination of public and private financing
resources.
Service Contracts
Enforcement
Identify the decision-makers.
State clearly the project's objectives.
Include long-term financial incentives and performance-based meas-
ures in the contracts.
Specify clearly the methods for measuring performance.
Keep the contract flexible so that regulatory changes can be incor-
porated.
Maintain a strong enforcement presence to ensure improved envi-
ronmental quality.
25
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26
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Panel on Community Priorities
Introduction
Goals
Key Points by Panelists
(in order of presentation)
New environmental
requirements raise funding
problems for localities
27
Recent environmental legislation has expanded regulatory requirements,
especially in the areas of drinking water supply, wastewater manage-
ment, and solid waste management. Many of these requirements call for
state and local implementation and funding. The scarcity of public dollars
has forced state and local officials to prioritize the many demands for
public assistance. Since environmental demands comprise only one set
of communities' demands, they must compete with other interests for
governmental support.
This panel sought to address (1) the crucial need to attain high priority
status for environmental goods and services and (2) the involvement of
private groups in achieving high priority status for environmental con-
cerns.
Myron Olstein
Peat Marwick Main
Environmental financing mechanisms have been established. For
example, Peat Marwick just completed a financing package for
infrastructure needs (parks, roads, and schools) in Northern Virginia.
Small communities use enterprise funds as much as large communi-
ties do.
Roy Torkelson
New York Department of Environmental Conservation
In New York, local authorities often exercise control over environ-
mental services; however, no tradition of covering construction or
operating costs through self-financing systems (water, wastewater)
exists.
Although some local officials are aware of new environmental re-
quirements which will necessitate additional spending (e.g., new
MCLs), many of them consciously wait until the requirements be-
come effective and then ask the State for funding. Likewise, other
local officials who are unaware of new requirements ask for State
money when the requirements hit.
Awareness of new regulations varies by program. Lack of informa-
tion is greatest in the drinking water program and least in the solid
waste program.
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Capital planning can enable
communities to better
finance environmental
services
Communities do not know
about new legislation
and requirements
28
It is essential that environmental services operate on a pay-for-service
basis.
Paul Shinn
Government Finance Research Center
When local government managers embark on capital planning, they
often ignore municipal facilities, assuming that the facilities' funding
will come from user-fees. This may be advantageous in that utilities
can avoid the political process. Furthermore, utility managers are left
free to do their own long-term planning and fee analysis.
The sophisticated approach to capital planning which many large
utility systems employ enables them to obtain needed resources.
Smaller systems can achieve the same success through similar plan-
ning if their personnel receive adequate training.
Waylon Lacey
City Administrator, Blakely, Georgia
In Blakely, Georgia, all utility services are provided by the city. The
city buys electricity and gas and then sells to the citizens. The county
pays for half the cost of solid waste disposal. The landfill used has
only one year of capacity left, and the city does not have an alternative
disposal site or plan.
The electric system is the biggest income generator, while the water
and sewer systems break even. The utilities' revenues provide
operating funds for the city. Most capital and development needs are
obtained through loans.
Jack Sullivan
American Water Works Association
In the environmental area, the absence of long range planning and of
involvement in legislative initiatives results from lack of information,
not low priority status. Environmental concerns face an education
problem, not a prioritization problem. Communities simply do not
know about new legislation and requirements. Drinking water and
surface water programs cannot be executed without public motivation
which, in turn, cannot be achieved without public education.
Roderick Wood
Assistant City Manager, Escondido, California
Both small and large cities face problems in meeting environmental
requirements and providing services. Traditional financing tax
and rate increases are not reliable because the public's ability and
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Public officials should
take risks and be rewarded
for risk taking
Better information and
education are keys to
success
We must encourage
self-help
willingness to pay are finite. (In California, an increase in taxes must
have two-thirds of the voters' approval.)
New solutions for financing services must be found. Public officials
should be aware of the risks attendant on new approaches, should be
willing and encouraged to take these risks, and should be rewarded for
doing so.
Robert Wayland
Panel Leader
U.S. EPA Office of Policy, Planning, and Evaluation
In summary, the panel has discussed seven themes which community
prioritization and privatization raise.
There exists a strong need for long range planning.
Education and information on environmental issues, legislation,
regulation, and requirements are essential. Through education, it is
possible to motivate compliance by convincing ordinary people that
risks are real and that improvements are necessary.
EPA and the States, allowing a good lead time, need to inform locals
about essential requirements. Government at all levels must set
realistic goals and deadlines.
Information on costs and benefits is also essential.
An enterprise basis for environmental services offers another finan-
cial resource.
It is necessary to encourage self-help.
Keep rules practical: site and need specific.
The capabilities of operators must be raised. Operations and mainte-
nance is the key to better efficiency and effectiveness.
Comments from
the Audience
29
Longer contracts
are preferable
Firmness in enforcing regulations is essential.
To retain accountability, private interests should take their profit out
over the life of the project rather than up front.
A mandate for spreading profit over the life of the project or for
attaching a reopener clause to the service contract should exist.
The longer the service contract is, the better. Information on negoti-
ating long-term contracts is needed.
-------
The financial risk to the private sector is far more significant than it
is to the public sector.
The Tax Reform Act of 1986 hurt the development of public-private
partnerships. It is necessary to communicate to Congress the impor-
tance of creating incentives for the private sector to invest in such
partnerships.
EPA and government assistance in analyzing the economics of
infrastructure financing is needed.
Communities need to know the value of environmental services so
they will not balk at the cost.
It is important to analyze macroeconomic effects of public-private
partnershipsjob spin-offs, attraction of new industry as well as
the simple provision of environmental services.
30
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Action Agenda Produced
by Community Priorities
Panel
The presenter, Roderick Wood, outlined three major areas with which
the panel concerned itself: planning, communication/education, and
local involvement. In each area, EPA and state requirements will exert
a strong influence over any actions proposed and taken.
Planning Base community priorities on regulatory requirements.
Consider facility capacity and future community and industrial
growth to ensure cost-effectiveness.
Solicit engineering input to achieve a technically efficient project.
Study carefully financial considerations capital, operational and
maintenance costs before construction begins.
Communication/
Education
Local Involvement
Communicate the cost, health benefits, and political implications of
environmental programs to policy-makers, citizens, and regulators.
Publicize utility enterprises to raise public awareness of them.
Publicize success stories from around the country to foster more
public-private partnerships.
Begin EPA certification of these successes.
Orient technical people in the field towards the successes.
Improve local requirements and rules so as to meet local needs and
allow flexibility.
Involve local governments in the regulatory development process.
Encourage local governments to help themselves and to initiate
public-private partnerships.
Encourage and reward risk-taking, even if unsuccessful.
Regionalize services where practical.
Encourage independent, self-funding utility enterprises.
Train utility operators so that violations of regulations will decrease.
31
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32
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Abstracts from Luncheon Session
Speeches: Financing Public-Private Partnerships
Roger Feldman
Partner
Project Finance and Development Group
Nixon, Hargrave, Devans, and Doyle
Institutionalizing Public-Private Partnerships
John Sandy
Director
Resource Management Division
U.S. Environmental Protection Agency
33
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34
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Excerpts from Financing Public-Private Partnerships
Speaker Roger D. Feldman
Managing Partner
Project Finance and Development Group
Nixon, Hargrave, Devans and Doyle
Adequacy of return and insulation from risk are the two major con-
straints which prevent private equity capital from entering the environ-
mental field. The following four basic elements of private involvement
in a public-private partnership reflect these constraints:
Basic Elements of
Private Involvement
The stream of payments for services must be consistent and firm
enough to assure the private partner's lenders that the debt incurred
will be repaid.
Developmental and operational risks must be sufficiently defined
and controllable so as not to impede project development.
Project equity must have a reasonable prospect of earning a return
similar to that of projects with comparable risk, whether through tax
savings or cash flow.
Incentives for private performance above minimum expectation
should be present.
While considering these four elements, note that firms can face risks
from liability, protracted delays in project development and changes in
the law which create a non-financeable project. Therefore, insurance,
guarantees, and explicit risk absorption through indemnification may be
more valuable to a developer than tax credits. At least five innovative,
publicly-generated approaches exist which address the above four ele-
ments and the private sector concept of risk:
Innovative Approaches
to Address Risk of
Private Involvement
35
Implement system user charges, tax assessments, and impact fees to
assure revenue streams.
Use revolving funds, public contracts, and secondary markets to
establish and expand revenue stream leverage.
Employ tax exempt debt, investment tax credits, and existing financ-
ing techniques such as lease purchase financing to reduce financing
costs.
Introduce equity attractions, risk management, and insurance facili-
tation to minimize project risk and increase private sector participa-
tion.
Establish performance contracting to stimulate innovative private
packaging of tasks performed and risks assumed.
-------
Active Government Active government involvement in establishing viable partnerships is
Tnvnlvpmmt J* NPCP c wrv imperative- M»ny °f Ae ab°ve approaches will be governed by State and
mvoivemem is necessary local lawg and can ^ implemented through technical and regulatory
fixes at the administrative level. Governments at all levels must identify
the technical incentives for private involvement which they can provide.
Congress should consider establishing tax exempt environmental infra-
structure bonds, as introduced in legislation sponsored by Senator
Domenici. Moreover, Congress should not underestimate the ability of
credit restoration to tap into private developers' capital.
Finally, the idea of public-private partnerships must achieve a greater
level of public acceptance. This requires education on how partnerships
furnish the capital necessary to provide services on a cost-effective
basis, consistent with governmental control and personnel policies.
36
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Excerpts from
Speaker
Institutionalizing Public-Private
Partnerships
John J. Sandy
Office of the Comptroller
U.S. Environmental Protection Agency
EPA Creation of a
Public-private
Partnerships Bulletin
To institutionalize public-private partnerships, the first step has been to
convince EPA officials that financing infrastructure needs related to the
environment has become a crisis area. To educate Agency officials, we
have created the EPA Public-Private Partnerships Bulletin. Through the
bulletin, we have come a long way in communicating communities'
needs; our people are beginning to understand the financial challenge
posed by environmental infrastructure needs and to consider the solution
offered by public-private partnerships.
EPA's effort to institutionalize partnerships extends beyond the Agency.
We will generate specific products designed to encourage and improve
public-private partnerships. The products will identify concrete short-
and long-term actions and strategies for Federal, state, local, and private
officials to undertake. Among these products are:
EPA Products
Promoting Partnerships
Anatomy of Public-Private Partnerships: This report assesses the
viability of different types of partnerships in different situations. It
includes an analysis of incentives and impediments for each sce-
nario.
Legislative/Regulatory Options Strategy: This paper outlines the
legislative and regulatory strategies that EPA and others should
pursue to promote the building of partnerships.
Self-Help Guides: These guides show local officials responsible for
funding and for providing environmental services how to choose the
partnership option that best suits their specific needs. They also
provide step-by-step information on how to implement a successful
deal.
Other products will further document incentives, impediments, success
stories, and options available to communities.
EPA will also concentrate on identifying and developing concrete
options specifically for small communities, those with fewer than 500
people. Demonstration projects are also in the works.
37
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38
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Panel Summaries Afternoon Sessions
Panels on: Drinking Water
Wastewater Treatment
Solid Waste Disposal
39
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40
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Panel on Drinking Water
Introduction
Community water systems around the country are generally small, private
systems. These small systems incur higher unit costs and have fewer
resources than larger, publicly-owned systems. The Safe Drinking Water
Act Amendments require all systems to comply with 83 new drinking
water regulations over the next several years. To achieve compliance, the
majority of the small systems will have to install technology for which
they do not have adequate local expertise nor adequate funding.
Goals This panel sought to address financing options for partnerships, region-
alization, technology transfer and assistance, public education, and water
rate structure overhaul, especially as related to small systems.
Key Points by Panelists
(in order of presentation)
Small systems assess high
rates and are often in
noncompliance
Water rates should reflect
the price of service
Mike Cook, Panel Leader
U.S. EPA Office of Drinking Water:
Drinking water already has a large number of public-private partner-
ships. Eighty percent of drinking water systems are privately-owned.
Two-thirds of all systems serve communities of fewer than 500 people
(two percent of the total population). Eighty-five percent of all
systems serve only nine percent of the population.
These systems have a high share of noncompliance and must assess
rates well above those of larger systems.
James Barr
American Water Works Service:
As a practical water supplier, I see the primary issue as funding. It
takes money to achieve results.
The price of water should reflect the entire price of service, including
the costs of complying with Federal regulations. Currently, the price
of water is low, relative to its cost of provision.
To enhance accountability and discipline, rate regulations should be
imposed.
Grants and subsidies must be removed since they may reward poor
performance.
Regionalization should be encouraged.
41
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Wade Miller
Association of State Drinking Water Administrators:
We are witnessing renewed emphasis on the Safe Drinking Water Act,
through the 1986 amendments and a greater resource commitment by
EPA and the States. But the private sector needs assurances that it will
be a full partner in continuing to provide safe drinking water.
States are better able to improve compliance.
Rate increases are
difficult to implement
Thomas E. Stephens
Nevada Public Service Commission:
Rate increases are hard to implement. The ability of users to pay is
questionable.
Regionalization is not practical in the West.
Private systems lack
information about
new requirements
Elizabeth Ytell
Rural Community Assistance Corporation:
An information gap exists. Privately-owned systems don't know or
don't care about new requirements.
It is necessary to improve communication between the regulators and
the regulated.
Fred Marrpcco
Pennsylvania Department of Environmental Resources:
A task force to help these small systems has been established. The task
force makes them aware of services available from private sources
and has formed a buyer center.
By exposing small systems operators to available services and creat-
ing cooperatives to negotiate rules for service, we promote partner-
ships.
Small systems lack
resources
Ann Cole
National Association of Towns and Townships:
Small systems often lack information about available technology. A
technical assistance program would be helpful.
The biggest problem small systems have is their lack of resources.
42
We should promote
greater trust and
communication
Nicholas Kepple, First Selectman, Stonington, Connecticut:
The first priority should be to promote greater trust and communica-
tion between the government and the private sector. Without this
change in attitude, even the availability of more capital will not help
create successful partnerships.
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More money for training should be made available.
The least-utilized human resources should be mobilized (e.g., stu-
dent interns).
Comments from
the Audience
The major focus on a project is the problem, not the source of money.
EPA needs to involve itself in the field, beyond the regions.
The private sector can help communicate new regulation, legisla-
tion, etc. to facilities.
Tax credits should be restored.
43
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Action Agenda Produced The Drinking Water Panel concluded that five major problems affect
Wnfpr sma11 systems: the information gap, a need for education, affordability,
dici
i^k of cost-effective technology. The action agenda which
Panel the panel developed addresses these problems in three categories: finan-
cial, EPA involvement, and communication.
Financial Base water rates on true costs.
Provide incentives for the private sector to work with small drinking
water purveyors.
Package services to attain greater cost-effectiveness (for example,
include operations and maintenance in the service contract).
EPA Involvement
Set standards, and provide regulations.
Develop incentives for partnerships (possibly incentive grants).
Conduct demonstration and technical assistance efforts in the field
to build local capacity for operating systems.
Publicize successful public-private partnerships, especially those
that achieve cost savings.
Communication
Establish state communications networks to coordinate information
dissemination efforts.
Encourage primacy agencies to work with public utility commis-
sions.
The panel did not agree on (1) the importance of funding as compared
to other factors, (2) the feasibility of regionalization, and (3) the
existence of "hopeless" communities which cannot achieve compliance
or cost-effectiveness.
44
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Panel on Waste water Treatment
Introduction
Wastewater treatment has received longstanding government attention
and resources. But as EPA phases out the Construction Grants program
and water quality regulations become more restrictive, local commmuni-
ties are faced with significant funding and operational dilemmas. In
substantiation, a 1988 Report by the National Council on Public Works
Improvement indicated: compliance at secondary treatment facilities is
declining, operating costs are exceeding revenues at many treatment
facilities, and despite Federal investment in extensive funding since 1972,
the nation's water quality has not improved appreciably.
Goals This panel sought to address (1) the problems and prospects of partner-
ships in the wastewater treatment area and (2) the potential roles for the
several participants in these partnerships.
Key Points by Panelists
(in order of presentation)
Stephen Moore
The Heritage Foundation
In some instances, local communities pursue partnerships to avoid the
controls placed on them when they use Federal dollars.
Partnership opportunities
need to be identified
locally
Jane Schautz
The Rensselaerville Institute
There is a fundamental lack of knowledge at the State level that
partnership opportunities are available. States are sensitive to these
new approaches since the old ones don't work.
Robert Perry
Water Pollution Control Federation
To assure success in wastewater treatment, there needs to be educa-
tion and a strong state leadership.
Education and
communication
are necessary
Linda Eichmiller
Association of State, and Interstate Water Pollution Control
Administrators
Not only education is necessary, but also communication among par-
ticipants in order to establish a common language and a common
interest in problem solving.
45
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Problem solving by
localities should respond
to environmental services
in an encompassing, not
fragmented, way
Kathy Fletcher
Puget Sound Water Quality Control Authority
Communities should look ahead to where they need to be in the years
to come and approach problems in an encompassing way across all
environmental protection services, rather than incrementally.
Problem solving, not marketing should be the essence of government
and private sector efforts to help communities through the acquired
knowledge of successful partnerships.
William James
Prudential Bache Capital Funding
New approaches must merge tax issues and their solutions with
program issues and their resolution.
Pennsylvania's PennVest
program supports
small communities
Comments from
the Audience
SRF funds should be
available to both public
and private entities
States should play a strong
role in assuring the success
46 of partnerships
Tom Sheridan
Legg Mason Wood and Walker, Inc.
With a State investment program like Pennsylvania's PennVest, the
needs of small communities that have little or no expertise technically
and financially can be met with funding designed to support a
locality's efforts to identify and solve its treatment needs.
Federal laws should preempt State restrictions which prohibit private
participation in the development of turnkey systems. Frequently State
laws prohibit one company from designing, building, and operating
a facility.
Some panelists believe that a privatization feasibility study should be
mandatory before communities receive funding from the state revolv-
ing loan fund, although other believe such studies may create a
backlash among the states.
Dollars from the state revolving loan fund should be made available
to either public or private entities who wish to build wastewater
facilities.
The Federal Government needs to broaden or expand its definition of
privatization. Some consider the definition of privatization an art
form rather than a clear definition. Congress is also not clear on the
definition of privatization.
Communities need to be aware of the privatization option available to
provide environmental services to their communities.
There is a need for education about the opportunities in public-private
partnerships.
If public-private partnerships are to succeed, we need a strong State
role. States could serve as the operator of last resort, taking over the
operation of wastewater treatment facilities from smaller communi-
ties who can no longer shoulder the burden.
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Community outreach
efforts will be central
to the development of
partnerships
EPA should create teams
of experts to promote
partnerships
Wastewater treatment must be viewed within its larger environ-
mental context. Its not just a problem with the construction of new
facilities. There are other issues which have an impact on wastewater
treatment, such as industrial pre-treatment programs and problems
with combined sewer overflows. We must look at the whole treatment
process, not just wastewater treatment plant construction.
Public-private partnerships should be marketed as community prob-
lem solving alternatives. They should not be marketed as public-
private partnerships per se.
Many state laws preclude the design and building of a plant by the
same company. This inhibits the development of public-private
partnerships.
We need a broad marketing and community awareness campaign of
the potentials of public-private partnerships.
Privatization must be sold to the localities, and there are some
questions about risk. A community's service agreement with their
private partner can be renegotiated periodically to ensure a reasonable
rate of return to the private partner and to protect the community from
price gouging.
Negotiations in public-private partnerships should be very public. A
strong enforcement effort is needed to force the communities to get
the job done.
EPA should create a SWAT team (Sewer and Water Action Team) to
promote privatization. This team would identify a community requir-
ing assistance and in one year solve their problem using a demonstra-
tion project approach.
47
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48
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Action Agenda Produced
by Wastewater
Treatment Panel
The Panel on Wastewater Treatment met prior to the Conference in
order to prepare a series of findings for general discussion during its
panel session. The findings reached through consensus in the three areas
chosen for discussion are listed below.
A. Conditions Conducive to Public-Private Partnerships
Decline in Federal assistance/increase in regulations.
Time constraints requiring accelerated construction schedules.
A lack of expertise at the municipal level.
Costs prohibitive to small communities.
Lack of knowledge about partnership opportunities.
Desire to avoid Federal red tape.
B. Barriers Which Inhibit Public-Private Partnerships
Federal Laws/State Revolving Fund requirements.
State laws that inhibit competitive bidding, procurement, and pri-
vate ownership.
Ignorance of privatization options.
Municipal worker resistance.
Small profit margins.
Lack of expertise of communities to establish partnerships.
Lack of appreciation for the value of private involvement.
The Federal Role
C. The Roles of Federal, State, and Local Governments and the
private and non-profit sectors in Public-Private Partnerships
Reduce or eliminate Federal regulatory requirements.
Provide information assistance.
Provide a clearinghouse for technical information.
Provide guidance.
Act as a broker or catalyst among participants.
Promote conferences and workshops for facility operation and
maintenance, and technology transfer.
Promote and reward successful public-private partnerships.
The State Role
Streamline state requirements.
Provide for small community outreach efforts.
Provide project level assistance to communities.
Incorporate the use of nonprofit organizations.
49
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The State Role
(continued)
The Local Government Role
Act as a catalyst to bring together engineering firms, financial firms,
banks, and communities.
Stimulate the development of private sector participation.
Remove barriers to use of innovative/alternative technology.
Network with other localities with successful experiences.
Develop cost-effective solutions with the State agency.
Increase citizen participation and city management involvement in
wastewater treatment financing.
Provide strong leadership.
Plan ahead for local needs.
The Private Sector Role
Expand its role in public-private partnerships.
Provide increased support from private sector recipients of services.
The Nonprofit Sector Role
Become a partner in outreach activities to smaller communities.
Define its role in relation to State/local government.
Involve associations, universities, and resource groups.
50
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Panel on Solid Waste Disposal
Introduction
The nation generates nearly half a million tons of waste daily, 95% of
which finds its way to landfills that are rapidly filling up. The cost to
address these problems is great. Among the problems that exist are the
following. Existing landfills for municipal solid waste may be poorly
designed and operated, thus causing potential releases into the environ-
ment. Managers of potentially toxic municipal waste combustion ash
could raise concerns about safe disposal. Landfill capacity for municipal
solid waste, particularly in the Northeast, is running out. Recycling, a
popular waste management technique, is successful only when participa-
tion in separation and collection is high and market prices for secondary
materials are favorable.
Furthermore, many small communities lack the resource base and person-
nel to manage solid waste effectively and safely. Landfills for industrial
solid waste may be accepting unregulated hazardous wastes. Questions
about the proper handling of and reasonable safeguards in place to assure
correct disposal of infectious waste exist. The resolution of these and
other problems served as the focal point for the Panel on Solid Waste
Disposal.
Goals This panel sought to address these problems and to identify key factors
affecting the success of public-private partnerships in the solid waste
disposal area.
Key Points by Panelists
(in order of presentation)
Private involvement is
already substantial
in this area
51
Jim Pase
Delaware Solid Waste Authority
A thorough, state-wide planning effort can help to resolve success-
fully a disposal problem. In a little more than 10 years, Delaware went
from 40 landfills to three, attaining a sound financial basis through the
use of revenue bonds and user fees.
Ronald Potesta
West Virginia Natural Resources Department
The absence of federal money i n solid waste disposal has led to greater
private involvement in this area, more so than in wastewater treat-
ment. However, the rising costs of disposal due to the increasing
demands for regulation, complicate the nature and extent of private
involvement. Roles must be clarified as the potential for partnerships
is fully explored.
Robert Wasserstrom
National Solid Waste Management Association
In order to deal effectively with the problems resulting from the solid
waste explosion, decision-makers must address the residential versus
commercial waste issue and prov ide a mechanism that responds to the
siting of new facilities.
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William Brown
Waste Management, Inc.
Recycling must remain an important component of any solution to
local waste disposal problems. Greater flexibility regarding the
transport of wastes and the regulation of costs is critical if private
firms are expected to participate in partnerships.
Citizen understanding
and participation
is important
Carol Kocheisen
National League of Cities
Citizen understanding and participation is an important factor in the
workings of public-private partnerships. To the extent that citizens
know what is expected or possible for them and their communities,
partnerships can contribute to improved services.
Another important consideration is the need to address the full fabric
of challenges facing communities. For example, communities are
required to collect wastes, but are also limited in and held liable for
their method of disposal. Communities must not only be controlled,
but they must also be supported by creative measures that help them
carry out their responsibilities.
Site selection is problematic
for communities
Comments from
the Audience
Liability remains a concern
Waylon Lacey
City Administrator, Blakely, Georgia
Site selection is a real life problem for local communities and must be
confronted before other issues can be resolved.
The panel leader, Jeffrey Denit, requested contributions from the session
that would help identify the steps that EPA and partnership participants
should take to address these issues.
Recycling and integrated waste management should be fundamental
components to waste disposal partnerships.
Nonetheless, recycling is not the total answer, it can deal with, at most,
one third of the waste flow.
Realism is key. No one answer can solve all the problems.
Liability for recipients and providers of services, communities, and
companies alike is a growing concern. Who is able and willing to take
responsibility for waste management and disposal must be decided.
Communities should be permitted to negotiate contractual protection
and the sharing of liability.
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Action Agenda Produced
by Solid Waste Disposal
Panel
The panel presented a series of considerations responding to the ques-
tions posed in the panel session: what factors affect public-private part-
nerships in solid waste, and what should the participants in the process
do next?
Factors Affecting
Partnerships
What Next?
For partnerships to succeed, both partners and the community should:
Realize that the private role has traditionally been greater in solid
waste than in other areas of environmental services, partly due to the
absence of public funding for solid waste management and disposal.
Concentrate on liability and accountability issues since they influ-
ence the outcome of solid waste management.
Recognize that siting is a major consideration in the choice and
direction of involvement in the management and disposal of solid
waste.
Recognize that the cost of managing solid waste will increase as the
complexity and magnitude of solid waste regulation develop.
Acknowledge that the charges for solid waste management and dis-
posal services does not always reflect their true costs.
Educate the partnership participants and consumers about the op-
portunities and implications of new initiatives.
Integrate planning and citizen participation.
Develop a more flexible regulatory environment.
Consider regionalization as a potential means of dealing with the
costs and complexities of local solid waste problems.
Eliminate State restrictions on the degree to which the private sector
can own or participate in solid waste management and disposal
efforts.
53
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54
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Abstracts from Closing Session
Comments: Where Do We Go from Here?
Charles L. Grizzle
Assistant Administrator
U.S. Environmental Protection Agency
Conference Action Plan
55
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56
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Excerpts from Where Do We Go From Here?
Speaker
Charles L. Grizzle
Assistant Administrator
Office of Administration and Resources Management
U.S. Environmental Protection Agency
A Videotape Will
Be Available
Follow-up Regional
Conferences Will
Be Held
We have received a lot of valuable feedback from you, both in the panel
discussions and the action plans.
You will receive a paper on the conference proceedings in the near future.
Videotapes of the conference will also be available in the near future.
Once we have analyzed your input, we will send you, for your review, an
updated strategy that incorporates your views and recommendations.
Our work will not end with this conference. If anything, the conference
is just the beginning of this initiative. We will hold some follow-up
regional meetings for which more information will be provided in future
issues of our Pub lie-Private Partnerships Bulletin. We invite your
comments as to what these conferences should aim at accomplishing.
I assure you that EPA is in this for the long haul. Both presidential
candidates have said that they see the need for public-private partnerships.
Senior EPA executives have said that this is a concept whose time has
come.
Thank you for your participation and help.
57
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58
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Action Plan Major Conference Recommendations
EPA Should Take
the Lead to:
The panel sessions and open discussion at the Conference emphasized a
number of roles that partners in public-private environmental services
initiatives should play to assure their success. These recommendations on
the roles that participants in partnerships should play serve as the basis for
the Environmental Protection Agency's effort to encourage public-
private partnerships. They are:
Provide education and build awareness regarding the value of
public-private partnerships
Foster communications and network-building at all levels
Promote a beneficial regulatory climate
Document costs of environmental protection
Sponsor environmental demonstration projects
States Should Take
the Lead to:
Enhance the flexibility of laws and environmental regulations to
foster greater partnership opportunities
Encourage realistic pricing of services
Identify the fundamental environmental services that all communi-
ties must have to assure the protection of public health and the
environment at a level to which all are entitled
Develop local capabilities to participate in partnerships
Improve community outreach to facilitate priority setting, interac-
tion, and accountability
Encourage greater private sector involvement in the provision of
environmental services
Local Government
Should Take the Lead to:
Provide leadership for the community in its efforts to offer its
citizens the most cost-effective environmental protection they need
Plan for the community's environmental service needs, integrating
discussions about future needs, their costs, and relative priority
within the local decision-making process
Involve all members of the community in deliberations and choices
about environmental services: citizens, business, and civic groups
among them
59
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The Private Sector Acquire knowledge of potential undertakings where partnerships
Should Take would serve in the best interests of the community
Identify, expand, and market its available skills to meet the needs of
the Lead to: ^^ communities in the provision of environmental services
Examine, in particular, the needs of very small communities and
how best the private sector can meet their needs
The Non-Profit Sector Offer its expertise to communities in assessing and choosing alter-
Should Take native methods of providing environmental services
the Lead to' B Join PartnershiPs alongside government and the private sector in
order to help bridge interests and represent affected concerns
60
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Appendices
Official Conference Attendance List
EPA Contacts List:
Steering Committee
Task Force
Office of the Comptroller Staff
Bibliography of Documents
Conference Evaluation Results
61
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62
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U.S. EPA National Leadership Conference
on Building Public-Private Partnerships
Official Conference Attendance List
October 26,1988
P = Panel Member
S = Speaker
Jens C. Appel
Planner
Southeast Rural Community
Assistance Project
P.O. Box 2868
702 Shenandoah Avenue
Roanoke,VA 24001
Dr. Donald Axelrod
Executive Director
Public Enterprise Project
Rockefeller Inst. of Government
Wharton Research Center
411 State Street
Albany, NY 12203
B
Bruce T. Barkley
Director
Office of Management Systems and Evaluation
EPA-OPPE PM-222
401 M Street, SW
Washington, D.C. 20460
J. James Barr (P)
Vice President/Treasurer
American Water Works Company, Inc.
P.O. Box 1770
1025 Laurel Oak Rd.
Voorhees, NJ 08043
Herbert Barrack
Assistant Regional Administrator
EPA-Region II
26 Federal Plaza
New York, NY 10278
David L. Barrett
Investment Officer
Ford Motor Credit Corporation
P.O. Box 1729
Dearborn, MI 48121
Allen C. Basala
Section Chief
Economic Analysis Section
EPA MD-12
Research Triangle Park, NC 27711
J. Richard Bashar
Associate Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
David R. Berg
Program Manager
Technology Transfer Staff
EPA-OA A-101F6
401 M Street, SW
Washington, D.C. 20460
Margaret S. Binney
Program Analyst
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
63
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Frank Blake (P)
Partner
Swidler and Berlin
3000 K Street, NW Suite 300
Washington, D.C. 20007
Paul A. Brands
Executive Vice President
American Management Systems, Inc.
1777 N. Kent Street
Arlington, VA 22209
Karen V. Brown
Small Business Ombudsman
Office of Small and Disadvantaged
Business
EPA-OA A-149C
401 M Street, SW
Washington, D.C. 20460
William Y. Brown (P)
Director
Waste Management, Inc.
1155 Connecticut Ave., NW Suite 800
Washington, D.C. 20036
Richard Brozen
Deputy Director, Budget Division
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
Douglas Campt
Director
Office of Pesticide Programs
EPA-OPTS TS-766C
401 M Street, S.W.
Washington, D.C. 20460
Malcolm M. Clemens
Director, Environmental Marketing
Calgon Carbon Corporation
P.O. Box 717
Pittsburgh, PA 15230
Kerrigan G. Clough
Assistant Regional Administrator
EPA-Region VIE
999 18th Street Suite 500
Denver, CO 80202
Ann Cole (P)
Director of Federal Affairs
National Association of Towns and Townships
1522 K Street, NW Suite 250
Washington, D.C. 20005
Michael B. Cook (P)
Director
Office of Drinking Water
EPA-OW WH-550
401 M Street, SW
Washington, D.C. 20460
Tom Curtis
Director
National Resources Group
National Governors' Association
444 North Capitol Street, NW
Suite 250
Washington, D.C. 20001
D
David A. DeMarco
Comptroller
NE Ohio Regional Sewer District
3826 Euclid Avenue
Cleveland, OH 44115
Jeffrey Denit (P)
Deputy Director
Office of Solid Waste
EPA-OSWER WH-562
401 M Street, SW
Washington, D.C. 20460
Craig DeRemer
Chief of Staff
Office of the Administrator
EPA-OA A-100
401 M Street, SW
Washington, D.C. 20460
Amy Dewey
Director, Issues Management
Office of Air and Radiation
EPA-OA&R ANR-445
401 M Street, SW
Washington, D.C. 20460
Richard Dewling (P)
Chairman
M & E Technologies, Inc.
P.O. Box 1500
Somerville, NJ 08876
64
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E
Linda Eichmiller (P)
Association of States and Interstate Water Pollution
Control Administrators
444 N. Capitol Street
Washington, D.C. 20002
Robert A. English
Chief
Agency Management Analysis Branch
Office of Administration
EPA-OARM PM-213
401 M Street, S.W.
Washington, D.C. 20460
Dr, Miriam Ershkowitz
Director
Office of Management & Productivity
City of Philadelphia
1500 Locust Street Suite 2611
Philadelphia, PA 19102
J, Andrea Estus
Director of Finance
New York State Environmental Facilities Corpora-
tion
50 Wolf Road Room 527
Albany, NY 12205
James W. Fagan
Principal
JWF Associates
8235 Toll House Road Suite 201
Annandale.VA 22003
Ellen M. Fahey
Program Analyst
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
Roger Feldman (S)
Partner
Nixon, Hargrave, Devans, and Doyle
One Thomas Circle Suite 800
Washington, D.C. 20005
Katherine Fletcher (P)
Chair
Puget Sound Water Quality Authority
217 Pine Street Suite 1100
Seattle, WA 98101
65
John S. Fleeter
Assistant Regional Administrator
EPA-Region VI
1445 Ross Avenue Suite 1200
Dallas, TX 75202
Joseph R. Franzmathes
Assistant Regional Administrator
Policy and Management
EPA-Region IV
345 Courtland Street, NE
Atlanta, GA 30365
James E. Freeh
Office of Federal Services
Arthur Andersen & Co.
1666 K Street, NW
Washington, D.C. 20006
G
Sharon Gascon
Deputy Executive Director
National Association of Water Companies
1725 K Street, NW Suite 1212
Washington, D.C. 20006
Charles Grizzle (S)
Assistant Administrator
Office of Administration and Resources Manage-
ment
EPA-OARM PM-208
401 M Street, SW
Washington, D.C. 20460
James Groff
Executive Director
National Association of Water Companies
1725 K Street, NW
Washington, D.C. 20006
Charles E. (Ed) Gross
Chief
Wastewater Facilities Mgmt. Branch
Office of Municipal Pollution Control
EPA-OW WH-595
401 M Street, SW
Washington, D.C. 20460
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H
William M. Haney, in
President
William Haney Associates
427 Newberry Street
Boston, MA 02108
Galen K. Heckman (P)
Supervisor
Peters Township Supervisors
P.O. Box 88
5000 Steele Avenue
Lemasters,PA 17231
Mario Hegewald
Special Assistant
Office of the Administrator
EPA-OA A-100
401 M Street, SW
Washington, D.C. 20460
Keith E. Hinds
Program Analyst
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
Donald L. Hoven
Assistant to the President
Hackensack Water Company
New York, NY 10022
J-K
Bill James (P)
Associate Director
Public Finance Department
Prudential-Bache Capital Funding
100 Gold Street
New York, NY 10292
Gary Katz
Director
Financial Management Division
Office of the Comptroller
EPA-OARM/OC PM-226
401 M Street, SW
Washington, D.C. 20460
Morris Kay
Regional Administrator
EPA-Region VII
726 Minnesota Avenue
Kansas City, KS 66101
66
Paul Keough
Deputy Regional Administrator
EPA-Region I
John F. Kennedy Federal Building
Boston, MA 02203-2211
Nicholas Kepple (P)
First Selectman
Town of Stonington
P.O. Box 352
Stonington, CT 06378
R. Jerrard King (P)
President
Environmental Management Corporation
689 Craig Road
St. Louis, MO 63105
C. Morgan Kinghorn (P)
Deputy Assistant Administrator
Office of Administration and Resources
Management
EPA-OARM PM-208
401 M Street, SW
Washington, D.C. 20460
Jeffrey Klein (P)
Managing Dir., Equities Research
Kidder, Peabody, & Company, Inc.
10 Hanover Square
New York, NY 10005
Peggy Knight
Director
Office of Community and Intergovernmental
Relations
EPA-OEA A-108
401 M Street, SW
Washington, D.C. 20460
Carol Kocheisen (P)
Legal Counsel
National League of Cities
1301 Pennsylvania Ave., NW
6th Floor
Washington, D.C. 20004
Phyllis Kozub
Office of Information Resources Management
EPA-OARM PM-218
401 M Street, S.W.
Washington, DC 20460
Paul E. Kroger
District Manager
Boone County Water Districk
P.O. Box 18
Burlington, KY 41005
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Waylon Lacey (P)
City Administrator
City of Blakely
P.O. Box 350
Blakely, GA 31723
Robert E. Layton, Jr.
Regional Administrator
EPA-Region VI
1445 Ross Avenue Suite 1200
Dallas, TX 75202-2733
Mark Lemyre
Arthur Young International
3000 K Street, NW Suite 400
Washington, D.C. 20007
Frank Letkiewicz
Vice President
Wade Miller Associates
1911 N. Ft. Myer Drive Suite 400
Arlington, VA 22209
Rolland W. Lewis (P)
Mayor
City of Mount Vernon
City Hall, 1100 Main
Mount Vernon, IL 62864
David Loveland
Director, Natural Resources
League of Women Voters
1730 M Street, NW
Washington, D.C. 20036
Ralph Luken
Chief
Economic Studies Branch
Office of Policy, Planning, and Evaluation
EPA-OPPE PM-221
Washington, D.C. 20460
M
David Mackenzie
Vice President
R-C Capital
60 East 42nd Street
New York, NY 10017
William J. Marrazzo
Division Vice Presiden
Roy F. Weston, Inc.
Weston Way
West Chester, PA 19107-2994
Frederick Marrocco (P)
Chief, Division of Water Supply
Dept. of Environmental Resources
State of Pennsylvania
P.O. Box 2357
Harrisburg, PA 17120
George C.McCann (P)
Director, Div. of Water Resources
Dept. of Environmental Protection
State of New Jersey CN-209
Trenton, NJ 08625
James McFarland
Economist
Wade Miller Associates
1911 N. Ft. Myer Drive Suite 400
Arlington, VA 22209
Joseph T. McGough (P)
Vice President
Parsons, Brinckerhoff, Quade, and Douglas, Inc.
1 Pennsylvania Avenue 5th Floor
New York, NY 10119
Timothy P. McProuty
Program Analyst
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
Scott B. Mexic
Attorney
Office of Privatization
Office of Management and Budget
New Executive Office Building
Room 5217
Washington, D.C. 20503
Wade Miller (P)
Executive Director
Association of State Drinking Water
Administrators
1911 N. Ft. Myer Drive Suite 400
Arlington, VA 22209
67
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Elizabeth Miner
Program Mgr., State Funding Study
Office of Water
EPA-OW WH-546
401 M Street, SW
Washington, D.C. 20460
Stephen Moore (P)
Policy Analyst
The Heritage Foundation
214 Massachusetts Ave., NE
Washington, D.C. 20002
Marlin L. Mosby
Senior Managing Consultant
Public Financial Management, Inc.
4719 Spottswood Avenue
Memphis, TN 38117
John C. Murphy (P)
Executive Director
The Privatization Council
1101 Connecticut Avenue, NW
Washington, D.C. 20036
N-O
Thomas L. Nessmith
Chief, Policy, Planning and Evaluation Branch
EPA-Region IV
345 Courtland Street, NE
Atlanta, GA 30365
Rindy O'Brien
Director
Governmental Affairs
The Wilderness Society
1400 Eye Street, NW
Washington, D.C. 20005
James J. O'Leary
Director
Program Management and Support
Office of Solid Waste
EPA-OSWER WH-562
401 M Street, SW
Washington, D.C. 20460
Myron Olstein (P)
Principal
Peat Marwick Main & Company
2001 M Street, SW
Washington, D.C. 20007
William B. O'Neill
Economist
Office of Policy, Planning and
Evaluation
EPA-OPPE PM-221
401 M Street, SW
Washington, D.C. 20460
David Osterman
Chief, Resource Management Div.
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
R. Thomas Parker
Director, Agencywide Technology Transfer Staff
Office of the Administrator
EPA-OA A-101F6
401 M Street, SW
Washington, D.C. 20460
James L. Pase (P)
Chief Financial Officer
Delaware Solid Waste Authority
P.O. Box 455
Dover, DE 19903-0455
Robert R. Perry (P)
Deputy Director
Water Pollution Control Federation
601 Wythe Street
Alexandria, VA 22314-1994
Ronald Potesta (P)
Director
Department of Natural Resources
State of West Virginia
Room 669 Building 3
1800 Washington Street
Charleston, WV 25305
James Craig Potter (P)
Executive Vice President
York Services Corporation
1233 20th Street, NW Suite 400
Washington, D.C. 20036
68
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Q-R
Michael Quigley (P)
Director
Office of Municipal Pollution Control
EPA-OW WH-546
401 M Street, SW
Washington, D.C. 20460
Carl Reeverts
Deputy Director, State Programs Division
Office of Drinking Water
EPA-OW WH-550E
401 M Street, SW
Washington, D.C. 20460
Andrew Robart
Business & Assn. Affairs
Office of Community and Intergovernmental Affairs
EPA-OEA A-100EA
401 M Street, SW
Washington, D.C. 20460
Kenneth I. Rubin
Principal
Apogee Research, Inc.
4350 East West Highway Suite 1124
Bethesda, MD 20814
David P. Ryan
Director
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
Don Ryan
Staff
House Appropriations Committee
U.S. House of Representatives
H-143 Capitol Building
Washington, D.C. 20515
John J. Sandy (S)
Director
Resource Management Division
Office of the Comptroller
EPA-OARM/OC PM-225
401 M Street, SW
Washington, D.C. 20460
Cindy Sayers
Office of Information Resources Management
EPA-OARM PM-211
401 M Street, S.W.
Washington, DC 20460
Jane W. Schautz (P)
Senior Project Director
The Rensselaerville Institute
Rensselaerville, NY 12147
David Schnare
Chief
Economic and Policy Analysis Branch
Office of Drinking Water
EPA-OW WH-550B
401 M Street, SW
Washington, D.C. 20460
Samuel A. Schulhof
Associate Vice President for
Applied Research
University of Pittsburgh
911 William Pitt Union
Pittsburgh, PA 15260
Delia Gerace Scott
Office of Congressional Liaison
EPA-OEA A-103
401 M Street, SW
Washington, D.C. 20460
Larry J. Scully (P)
President
Scully Capital Services, Inc.
1135 15th Street, NW
Washington, D.C. 20005-2701
David Seader (P)
Vice President
Privatization Finance
DnC America Banking Corporation
600 Fifth Avenue
New York, NY 10020
James M. Seif
Regional Administrator
EPA-Region III
841 Chestnut Building
Philadelphia, PA 19107
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Elly Seng
Staff Assistant
Office of Administration and Resources
Management
EPA-OARM PM-225
401 M Street, SW
Washington, D.C. 20460
Thomas H. Sheridan (P)
Public Finance Department
Legg Mason Wood Walker, Inc.
Ill S. Calvert Street
P.O. Box 1476
Baltimore, MD 21202
Paul L. Shinn (P)
Government Finance Research Center
1750 K Street, NW Suite 200
Washington, D.C. 20006
John H. Skinner
Director
Office of Environmental Engineering
arid Technology Demonstration
EPA-ORD RD-681
401 M Street, SW
Washington, D.C. 20460
Gayle J. Smith
Director
Bureau of Drinking Water/Sanitation
Dept. of Health and Environmental Health
State of Utah
288 North 1460 West
Salt Lake City, UT 84116-0690
James N. Smith
Vice President
Chambers Associates, Inc.
1625 K Street, NW Suite 200
Washington, D.C. 20006
Jim Solyst
Program Director
Environment, Health and Safety
Natural Resources Policy Studies
National Governors' Association
444 North Capitol Street, NW
Suite 250
Washington, D.C. 20001
Stephen M. Sorett
Deputy General Counsel
AAI Corporation
P.O. Box 126
Hunt Valley, MD 21030-0126
John Stanton
Director
Technology Transfer Staff
Office of Research and Development
EPA-ORD RD-672
401 M Street, SW
Washington, D.C. 20460
Steven A. Steckler
Office of Government Services
Price Waterhouse
1801 K Street, NW
Washington, D.C. 20006
Wilbur A. Steger
President
CONSAD Research Corporation
121 North Highland Avenue
Pittsburgh, PA 15206
Thomas E. Stephens (P)
Commissioner
Nevada Public Service Commission
727 Fairview Drive
Carson City, NV 89710
Jack Sullivan (P)
Deputy Executive Director
American Water Works Association
6666 West Quincy Avenue
Denver, CO 80235
Ralph H. Sullivan
1004 Loxford Terrace
Silver Spring, MD 20901
Thomas M. Swoyer
President
Roy F. Weston, Inc.
Weston Way
West Chester, PA 19380
Robert C. Tallon
Director
Pollution Control Financing Staff
Small Business Administration
1441 L Street, NW Room 808
Washington, D.C. 20416
70
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Lee Thomas (S)
Administrator
Environmental Protection Agency
A-100
401 M Street, SW
Washington, D.C. 20460
Richard Torkelson (P)
Deputy Commissioner for Administration
Dept. of Environmental Conservation
State of New York
50 Wolf Road Room 604
Albany, NY 12233-1011
Beth Turner
Environmental Consultant
E.I. du Pont de Nemours & Co., Inc.
P.O. Box 80721
CRP - Maple Run
Wilmington, DE 19880-0721
u-w
Ronald Utt (S,P)
Director
Office of Privatization
Office of Management and Budget
Old Executive Building Room 350
Washington, D.C. 20530
Robert F. Wasserstrom (P)
Director of Public Affairs
National Solid Wastes Management
Association
1730 Rhode Island Avenue, NW
Suite 1000
Washington, D.C. 20036
Robert H. Wayland, IH (P)
Deputy Assistant Administrator
Office of Policy, Planning, and
Evaluation
EPA-OPPE PM-219
401 M Street, SW
Washington, D.C. 20460
Bruce Weddle
Acting Director
Muncipal Solid Waste Program
Office of Solid Waste
EPA-OSWER WH-563
401 M Street, SW
Washington, D.C. 20460
Philip Wisman
Office of Public Affairs
EPA-OEA A-107
401 M Street, SW
Washington, D.C. 20460
Robert C. Woehrle, Jr.
Manager
Energy and Environment
Bell Atlantic, Inc.
13100 Columbia Pike, D38
Silver Spring, MD 20904
Roderick J. Wood (P)
Assistant City Manager
City of Escondido
201 N. Broadway
Escondido, CA 92025-2798
G. Mead Wyman
General Partner
Hambrecht & Quist Venture Partners
Wellesley, MA
Elizabeth Ytell (P)
Director
Water/Wastewater Division
Rural Community Assistance Corporation
2125 19th Street #203
Sacramento, CA 95818
71
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72
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U.S. EPA National Leadership Conference
on Building Public-Private Partnerships
EPA Contacts List
Steering Committee
Robert S. Cahill
Associate Administrator
Office of Regional Operations
Don R. Clay
Acting Assistant Administrator
Office of Air and Radiation
Craig DeRemer
Special Assistant
Office of the Administrator
Linda Fisher
Assistant Administrator
Office of Policy, Planning,
and Evaluation
Charles L. Grizzle (Chair)
Assistant Administrator
Office of Administration and
Resources Management
Robert E. Layton, Jr.
Regional Administrator
Region VI
John A. Moore
Acting Deputy Administrator
EPA
Vaun Newill, M.D.
Assistant Administrator
Office of Research and Development
J. Winston Porter
Assistant Administrator
Office of Solid Waste and
Emergency Response
Greer Tidwell
Regional Administrator
Region IV
William Whittington
Acting Deputy Assistant
Administrator, Office of Water
Jennifer Joy Wilson
Assistant Administrator
Office of External Affairs
Task Force
Stephen Albee
Director, Planning and Analysis
Division
Office of Water
Bruce Barkley
Director, Office of Management
Systems and Evaluation
Office of Policy, Planning and Evaluation
Douglas D. Campt
Director, Office of Pesticide Programs
Office of Pesticides and Toxic
Substances
Michael B. Cook
Director, Office of Drinking Water
Office of Water
Thomas Devine
Director, Office of Program
Management and Technology
Office of Solid Waste and Emergency
Response
Charles Elkins
Director
Office of Toxic Substances
Office of Pesticides and
Toxic Substances
John S. Fleeter
Assistant Regional Administrator
Region VI
73
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Joseph Franzmathes
Assistant Regional Administrator
Office of Policy and Management
Region IV
Mario Hegewald
Special Assistant
Office of the Administrator
Gary Katz
Director, Financial Management
Division
Office of Administration and
Resources Management
Peggy H. Knight
Director, Office of Community and
Intergovernmental Relations
Office of External Affairs
Sylvia Lowrance
Director, Characterization and
Assessment Division
Office of Solid Waste and
Emergency Response
Stanley Meiburg
Director, Planning and Management
Staff
Office of Air Quality
Richard D. Morgenstern
Director, Office of Policy
Analysis
Office of Policy, Planning and
Evaluation
Thomas Parker
Director, Agency-wide Technology
Transfer Staff
Office of the Administrator
Al Pesachowitz
Director, Budget Division
Office of Administration and
Resources Management
Harvey Pippen
Director, Grants Administrative Division
Office of Administration and Resources
Management
David P. Ryan
Comptroller
Office of Administration and
Resources Management
John J. Sandy
Director, Resource Management
Division
Office of Administration and
Resources Management
John Skinner
Director, Office of Environmental
Engineering and Technology
Demonstration
Office of Research and Development
Jack Stanton
Director, Technology Transfer Staff
Office of Research and
Development
Gerald Yamada
Deputy General Counsel
Office of General Counsel
Office of the Comptroller
Public-Private Partnerships Initiative Staff
Environmental Financing Staff
Resources Management Division (PM-225)
Office of the Comptroller
Office of Administration and Resources
Management
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, DC 20460
David Osterman
Chief
Margaret Binney
Ellen Fahey
Keith Hinds
Timothy McProuty
Eugene Pontillo
Elly Seng
74
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Partnership Materials Bibliography
* Included in Conference Participants' Packets
Apogee Research, Inc., The Nation's Public Works: Report on Hazard-
ous Waste Management, National Council on Public Works Im-
provement, Washington, D.C., May 1987.
Apogee Research, Inc., Financing Marine and Estuarine Programs: A
Guide to Resources, U.S. Environmental Protection Agency,
Office of Marine and Estuarine Protection, Office of Policy
Planning and Evaluation, September 1988.
Apogee Research, Inc., Financing Infrastructure Innovations at the
Local Level, National League of Cities, December 1987.
* Apogee Research, Inc.,Public-Private Partnerships for Environmental
Services: Anatomy, Incentives, and Impediments, U.S. Environ-
mental Protection Agency, Office of the Comptroller, Resource
Management Division, Washington, D.C., October 1988.
* , Building Public-Private Partnerships (Agency Strat-
egy), U.S. Environmental Protection Agency, Washington, D.C.,
1988.
Clunie, Jeffrey F., The Nation's Public Works: Report on Solid Waste,
National Council on Public Works Improvement, Washington,
D.C., 1987.
* , Communication Strategy for Public-Private Partner-
ships, U.S. Environmental Protection Agency, Office of the
Comptroller, Environmental Financing Staff, Washington, D.C.,
1988.
* , Contract Operation and Maintenance, The Answer
for Your Town?, U.S. Environmental Protection Agency, Office
of Municipal Pollution Control, Planning and Analysis Division,
January 1987.
* Cook, Michael, Public-Private Partnerships, The Small Water System
Challenge, U.S. Environmental Protection Agency, Office of
Drinking Water, Washington, D.C., October 1988.
Edwards, Howard W., Successful Approach to Privatization, Center for
Privatization, Washington, D.C., July 1987.
Federal Water Quality Regulations: Current Issues Affecting State and
Local Governments, Conference Transcript, Morgan Stanley,
New York, New York, May 1988.
Financing for the Next Generation, Conference Proceedings, Govern-
ment Finance Research Center, Washington, D.C., November
75 1986.
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Finley Lawrence, "An Entrepreneurial Process for Privatizing at the
Local Level," The Privatization Review, The Privatization Coun-
cil, New York, New York, Winter 1987.
_? Fragile Foundations: A Report on America's Public
Works, National Council on Public Works Improvement, Wash-
ington, D.C., February 1988.
Groves, Sanford M. and Maureen Godsey Valente, Evaluating Financial
Condition, A Handbookfor Local Government, International City
Management Association, Washington, D.C., 1986.
, Hard Choices, A Report on the Increasing Gap
Between America's Infrastructure Needs and Our Ability to Pay
for Them, A Study Prepared for the Use of the Joint Economic
Committee Congress of the United States, U.S. Government
Printing Office, Washington, D.C., 1984.
Hatry, Harry P. et al., How Effective are Your Community Services?
' Procedures for Monitoring the Effectiveness of Municipal Serv-
ices, The Urban Institute, 1977.
Hayes, Edward C., "Contracting for Services, The Basic Steps," The
Privatization Review, The Privatization Council, New York, New
York, Winter 1986.
, Impact of the Tax Reform Act of 1986 on Privatiza-
tion, National Council on Public Works Improvement, Washing-
ton, D.C., June 1987.
, It's Your Choice, A Guidebook for Local Officials on
Small Community Wastewater Management Options, U.S. Envi-
ronmental Protection Agency, Office of Municipal Pollution
Control, Municipal Facilities Division, Washington, D.C., Sep-
tember 1987.
Johnson, Gerald W. and John G. Heilman, "Metapolicy Transition and
Policy Implementation: New Federalism and Privatization,"
Public Administration Review, American Society for Public
Administration, Washington, D.C., November/December 1987.
Linowes, David F. et al., Privatization, Toward More Effective Govern-
ment, President's Commission on Privatization, Washington,
D.C., March 1988.
Mason, Malcolm S., "Current Developments in Federal Grant Laws,"
Public ContractNewsletter, American Bar Association, Chicago,
Illinois, Summer 1988.
* Municipal Solid Waste Task Force, The Solid Waste Dilemma: An
Agenda for Action, U.S. Environmental Protection Agency, Of-
fice of Solid Waste, Washington, D.C., September 1988.
* , Municipalities, Small Business, and Agriculture, The
Challenge of Meeting Environmental Responsibilities, U.S. Envi-
ronmental Protection Agency, Office of Policy, Planning and
Evaluation, Washington, D.C., September 1988.
76
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Olinger, Lawrence, The Nation's Public Works: Report on Waste-water
Management, National Council on Public Works Improvement,
Washington, D.C., 1987.
Olstein, Myron, "Selecting a Privatizer," The Privatization Review, The
Privatization Council, New York, New York, Spring 1986.
* , Paying for Cleaner Water, The State Funding Study,
U.S. Environmental Protection Agency, Office of Water, Wash-
ington, D.C., 1988.
, Private Sector Initiatives: A Presidential Commit-
ment, The White House, Office of Private Sector Initiatives,
Washington, D.C., 1987.
, Privatization and Public Employees: The Impact of
City and County Contracting Out on Government Workers, Na-
tional Commission for Employment Policy, Washington, D.C.,
May 1988.
* , Public-Private Partnerships Bulletin, U.S. Environ-
mental Protection Agency, Office of the Comptroller, Resource
Management Division, Washington, D.C., October 1988.
, Reference Guide on State Financial Assistance Pro-
grams, U.S. Environmental Protection Agency, Office of Water,
Washington, D.C., February 1988.
Reinhardt, William G., "Public/Private Sewage Expansion, A Primer for
Post-Tax Act Deals," Public Works Financing, McGraw-Hill,
Inc., New York, New York, January 1988.
, Report of the Private Sector Advisory Panel on
Infrastructure Financing to the Committee on the Budget, United
States Senate, U.S. Government Printing Office, Washington,
D.C., August 1987.
Schilling, Kyle et al., The Nation's Public Works: Report on Water
Resources, National Council on Public Works Improvement,
Washington, D.C., May 1987.
Scully, Larry J. and Lisa A. Cole, "Privatization: Making the Decision,"
The Privatization Review, The Privatization Council, New York,
New York, Spring 1986.
. State Alternative Financing Programs for Wastewa-
terTreatment, 2nd edition, U.S. Environmental Protection Agency,
Office of Municipal Pollution Control, Washington, D.C., Janu-
ary 1986.
* , State Use of Alternative Financing Mechanisms in
Environmental Programs, U.S. Environmental Protection Agency,
Office of Management Systems and Evaluation, Program Evalu-
ation Division, Washington, D.C., June 1988.
Sullivan, Ned and Marietta Joseph, "New Strategies for a New Game:
Privatizing Water and Wastewater Treatment Plants," The Priva-
tization Review, The Privatization Council, New York, New
77 York, Summer 1987.
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, Touching All the Bases, A Financial Management
Handbook for Your Wastewater Treatment Project, U.S. Envi-
ronmental Protection Agency, Office of Municipal Pollution
Control, Washington, D.C., September 1986.
Valente, Maureen Godsey, "Local Government Capital Financing: Options
and Decisions," The Municipial Year Book, 1986, International
City Management Association, Washington, D.C., 1986.
Wade Miller Associates, Inc., The Nation's Public Works: Report on
Water Supply, National Council on Public Works Improvement,
Washington, D.C., 1987.
* , WastewaterTechnical Assistance, It Works inTennes-
see, U.S. Environmental Protection Agency, Office of Water,
Washington, D.C., August 1988.
78
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Results from Conference Evaluation Form
Introduction
Evaluation forms were made available to conference participants at the
final, plenary session at the end of the day. Conference staff collected 42
partially or fully completed evaluation forms, representing roughly one
third of the total conference participation. Summary information from the
forms follows:
Ratings for General Sessions
Evaluation Criteria
Ranking
poor
excellent
8
1. Overall Format of Conference
11
13
2. Conference Facilities
14
19
3. Relevance of Issues Discussed
12
11
14
4. Conference Kit Materials
10
10
Ratings for Panel Sessions
Evaluation Criteria ^
^^^-~^~~^^ Ranking
1. Coverage of Issues by Presenters
2. Time Allowed for Discussion
3. Opportunity for Interaction
Among Participants
4. Relevance of Issued Discussed
5. Emphasis on State and Local
Concerns.
poor excellent
1
-
3
2
-
-
2
-
1
3
1
1
3
2
10
4
1
1
4
1
3
4
5
4
5
7
6
8
2
6
6
7
7
3
3
2
7
15
7
8
9
11
8
8
5
6
14
13
9
1
1
3
9
3
79
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Which panel session did you attend?
The numbers represent estimates made during the panel sessions by
conference staff.
Morning Sessions
Elements of Successful Partnerships 35-40
Barriers and Incentives to Investment 45-50
Community Priorities 40-45
Afternoon Sessions
Drinking Water 40-45
Wastewater Treatment 45-50
Solid Waste Disposal 35-40
What additional information, relative to the topics discussed, would
you like to have seen presented?
The list below presents the several recurring suggestions made by those
who responded.
Establish and clearly define the initiative's goals.
Compile specific examples of successful initiatives and present
them with details about concrete steps, case studies, model perform-
ance agreements, roles, and costs to provide guidance to other
initiatives.
Assure Congressional participation and greater information about
the Tax Code and alternatives to modify it.
What is the single most important role EPA should undertake to
support public-private partnerships?
Respondents suggested a variety of roles EPA could play to support
partnerships. They are summarized by the following groupings.
EPA as Educator, providing information and creating awareness in
the community about the need for and potential of partnerships.
EPA as Facilitator and Catalyst, to promote and aid in the creation
and operation of partnerships.
EPA as Creator of Incentives, by making regulations more flexible,
80 advocating changes in the tax code, state laws, and liability.
-------
EPA as Active Participant through the provision of funds, or the
orchestrator of demonstration projects, to encourage the develop-
ment of partnerships.
Do you think there was adequate representation among Conference
attendees of the diverse groups interested in this topic? If not, what
interests do you feel were missing?
Many respondents believed the attendance reflected a good mix of
participation. Among the suggestions of others who should be involved
were:
Mobile Home Park Owners, very small system owner/operators,
Indian Tribes,
Consulting engineers,
Small business community,
National public interest groups representing State and local elected
officials,
State revolving fund program representatives,
Local and regional banking,
State legislators and Congressional tax committee staff, and
Small communities.
General Comments.
The general comments of the respondents were very positive and
constructive.
Typical of these comments were:
The Conference was a good first step in the development of an
environmentally-focused public-private partnership initiative.
The Conference has shown that once again that EPA is a leader.
The diversity of participation, both on the panels and in terms of
overall attendance was excellent.
The issues raised for study and resolution are a solid basis from
which to develop the program.
Among the more frequent comments and suggestions were:
Allow greater time for panels and audience participation, especially
in light of the cost of bringing together the diverse interests and the
potential benefits of a good exchange.
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Send out proceedings of the conference, the list of attendees, and
additional materials, as available, to inform affected interests.
Assure that the next stages of EPA's initiative bring specificity and a
discussion of viable alternatives into the debate.
Follow up the national conference with efforts in the regions, using
some of the same techniques along with more detailed information
about specific approaches to take to begin and maintain partner-
ships.
82
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