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Blogs / Center for Management Strategies / Innovation in Public - Private Partnerships

Innovation in Public - Private Partnerships

American City and County recently published a new article entitled "Public-Private Partnerships: The New Breed."   This article reflects the increasing trend in local governments turning to the private sector as a viable partner in providing quality services to their citizens and stakeholders.

American City and County states, As state and local governments face challenges to operate more efficiently and cost-effectively, public-private partnerships (PPP's) are a promising tool to enhance essential public services, operations and facilities - without having to increase taxes.

PPP's, also known as P3S, have existed for centuries. In 1652, the Water Works Company of Boston was the first private firm in America to provide drinking water to citizens, according to the National Council for Public Private Partnerships (NCPPP).

"We're just now catching up with the rest of the world,"says Richard Norment, NCPPP executive

director. He explains that state and local governments in the past may have been hesitant to form partnerships with the private sector after hearing stories about bad deals. "Money was pretty fast and loose prior to 2008: a lot of investments were made prior to that where they didn't do the proper due diligence on contracts." Consequently, "in the past four to five years, private sector investors are performing closer analyses on 'Why would we want to invest in this project the way it's structured?' Projects are also providing closer quality control measures to help both the public and provide sector make sure they're getting into sound deals in terms of how effective PPP's are and how well they perform."

There is so much truth to this. Whether it comes through partnerships between multiple public agencies (public-public partnerships), partnerships with the private sector (public-private), consolidation, or even (in the right situation) letting one partner take over a service entirely while ensuring that the right outcome is achieved (alternative service delivery, or in/out-sourcing), there are immense opportunities to tap. (We previously wrote on this blog about the incredible small business incubator project Rocky Mountain Innosphere in the City of Fort Collins, CO – very much a public-private partnership).

To Share, or Not to Share

But where do you look to find these partnership opportunities? What type of criteria would help you figure out where a partnership could exist?

Among the success stories you can read about from ICMA and Alliance for Innovation case studies, you’ll find out about SAFEbuilt and the way they’ve revolutionized the entire approach to a Building Department through shared services; or you can turn to CH2MHill and discover public-private partnerships at their best in terms of running city/county services. For some services, there are proven successes that can provide a ready made blue-print for how to implement them in your community.

In our work in Priority Based Budgeting, one of the greatest outcomes of the work is the ability to shed light on where to find opportunities for shared services. What if a program was of the highest priority for your citizens, and you found out you were one of several providers of this service in your community? Perhaps a partnership would be an incredible opportunity to produce efficiency in the provision of that program. On the other hand, what if you found a lower priority program for which there were other service providers? Maybe the best approach there would be to consolidate services or even allow the other service provider to take on the program entirely.


In the City of Cincinnati, Ohio, City Council identified opportunities for partnership using PBB as a policy priority. In Douglas County, Nevada, the Board of County Commissioners did the same. In our story from the City of Fort Collins, CO, about the Rocky Mountain Innosphere (RMI), the City’s share of funding to support RMI scored well in the PBB process – it was a high priority. However, using the filters of the PBB Model, it was clear that this was a program that others could offer and were offering in the form of business support (in other words, the City need not be the only player in providing this service), that the City wasn’t mandated to do, and was unlikely to pay for itself.  

Through the lens of PBB, this points precisely in the direction of a partnership. The role of government, even in a high-priority program, is not always to be the direct service provider; it can be a key partner!

Priority Based Budgeting and Shared Services

Central to PBB is the idea that all local government organizations can determine the role they're suited to serve best within a community, and amongst all potential service providers within a region - identifying the overlap, the potential for partnerships, consolidated services, and spinning off of services between city, county, school district, non-profit and private sector organizations. The end goal is nothing short of the most efficient use of a community's resources as a whole, to achieve the results of a region – it’s "bang for the buck" for the provision of public services.
 
In Priority Based Budgeting we’re attempting to provide a comprehensive review of the entire organization, identifying every program offered, identifying the costs of every program offered, evaluating the relevance of every program offered on the basis of the community's priorities, and ultimately guiding elected and appointed officials to the policy questions they can answer with the information gained from the Priority Based Budgeting process, such as:

       What is the local government uniquely qualified to provide, offering the maximum benefit to citizens for the tax dollars they pay?
       What programs are most appropriate to fund by establishing or increasing user-fees?
       What programs are most appropriate for establishing partnerships with other community service providers?
       What services might the local government consider "getting out of the business" of providing?
       Where are there apparent overlaps and redundancies in a community because several entities are providing similar services?
       Where is the local government potentially competing against private businesses within its own community? 

To ultimately see a new way of determining which services our local government is best suited to provide—services that have the greatest impact for the resources within the community’s means.

Untapped Potential

According to the State Department, approximately 1.5 million non-governmental organizations (NGO’s) operate in the United States. There are 87,453 units of local government as recognized by the US Census. Local government no longer needs to be everything to everybody. We heard Bill Clinton give a speech recently where he said the single thing he’d love to “do-over” from his Presidency would be to understand all of the NGO’s and non-profits out there, what they’re doing, and how government could partner better. It’s more efficient, there’s less duplication, and we must find the best providers of services who have the greatest chance of achieving great outcomes. We feel the same thing about local government. Some of the best things taking place in a community are coming about from partnerships, where local government is the leader, the facilitator and often times a key partner, but not always necessarily the only possible service provider.

To read the full American City and County article click here.

To read the follow-up PPP article from Cheryl Hilvert, ICMA Center for Management Strategies Director, click here

Keep an eye on the CPBB blog for further updates. Sign-up for our social media pages so you stay connected with TEAM CPBB!

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If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.
 


"DATA VISUALIZATION" for Local Government