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City discusses public-private partnerships

November 23, 2011


At its meeting Tuesday, the Starkville Board of Aldermen heard a presentation from Taylor Adams on the benefits, disadvantages and challenges of using a public-private partnership to address inadequacies in the city’s municipal and police facilities.
The city held a vote on Sept. 27 for a bond issue which would have raised property taxes for an $8.45 million police facility, the first of two phases in a municipal facilities plan which would have included a later bond issue for new municipal facilities.
Starkville voters rejected the bond issue 55 percent to 45 percent, keeping it from the 60-percent-plus-one-vote majority needed for passage and forcing the city to restart its plans to address the issue.
Starkville Mayor Parker Wiseman said the city needed to look for lessons to be learned from the bond issue’s failure. One lesson he said he had learned was that even the bond issue’s most outspoken critics were willing to acknowledge the need to address the condition of Starkville’s municipal facilities.
“There were many reasons that people expressed opposition, but there were two overwhelming things that I picked up on,” Wiseman said. “(First,) many viewed the cost of the project that was presented as being too high. The second was that it carried with it a tax increase. Those are somewhat related but different points. If you take all of that together, I think it leaves us with a monumental challenge from here. We’ve got to strive to meet a need that is widely recognized as important to the future of the city, and we must look for ways to lower the cost of meeting that need and ultimately seek a way to finance such a project without having a tax increase.”
Wiseman said a chance encounter with Adams, Mississippi Association of Governmental Purchasing and Property Agents president, led to a discussion of public-private partnerships as a possible alternative to a bond issue for the city’s municipal facilities.
“The more we talked about it and the more he explained some of the opportunities of public private partnerships, the more interesting it got to me,” Wiseman said. “Public-private partnerships can offer a way not only to lower the cost of a government building project, but they can also offer potential economic development opportunities (and) private opportunities associated with the government building project. That seems to have a lot of upsides.”
Wiseman said Adams is not looking to be paid for any of his advice to the city. Adams said this is because Starkville’s purchasing staff are part of MAGPPA, which qualifies Starkville for free consulting services from the group.
Adams said the federal government recognizes nine types of public-private partnerships, and the type Wiseman discussed with him is allowed under Mississippi law. He said public-private partnerships have been used in transportation, water, wastewater, financial management and schools.
“A public-private partnership is a contractual agreement in any capacity between a public agency, federal state or local and a private sector entity,” Adams said. “Through this agreement, the skills and assets of each sector are shared in delivering a service or facility for the use of the general public. We hope by the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service or facility.”
Adams said public-private partnerships are good for reducing risk for developers, improving efficiency through private sector innovation and maximizing the strengths of both the public and private sectors. The key issue for the city, he said, was the potential for the partnership to reduce public capital on the front end because that would prevent the city from having to raise taxes.
Adams also discussed disadvantages of public-private partnerships. He said the contracts for these partnerships are usually more complicated than normal municipal contracts, and it becomes more difficult for the city to enforce performance. The major issue which leads some partnerships to fail, he said, is finding common ground between the government’s desire to maintain transparency and the private sector’s desire to make profits.
When Ward 2 Alderman Sandra Sistrunk asked Adams if public-private partnerships were gaining popularity elsewhere, he said they have become the preferred method of municipal development in Virginia. He said they have also been used in Gulfport and with Mississippi State University’s dining program. The Cotton Mill project, he said, could technically be considered a public-private partnership already present in Starkville.
The city also held a work session on the next step of the city’s capital improvement plan, teleconferencing with Demery Grubbs, a consultant with Government Consultants.
Grubbs said he had pared down the capital improvement projects the city had submitted from 139 projects to 79, but he wanted to further narrow it to 54 projects. He said he wanted the city to rate the 79 projects according to priority just as before, with an “A” for high-priority projects, a “B” for lower priorities and a “C” for the least important projects.
Grubbs said he would be looking for 27 A’s, 27 B’s, and 25 C’s. He said he wanted the board to submit its votes by Dec. 6 because that would allow the board to hold a special called meeting before the start of the year to work on a three- to four-year plan for the projects.
Sistrunk said some important projects had not been submitted to Grubbs for consideration, and she wants to find a way to blend them into the next list Grubbs looks at.
“There are four to five streets that remain unpaved. Some are in the county but are extensions of city streets,” Sistrunk said. “I think it’s incumbent on us to talk about providing services to those annexed territories even though they may not be on this list that we’re talking about tonight.”

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