State Bar P3 seminar.PPTX
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Transcript of State Bar P3 seminar.PPTX
![Page 1: State Bar P3 seminar.PPTX](https://reader035.fdocuments.us/reader035/viewer/2022062412/58edd9c81a28ab75688b469b/html5/thumbnails/1.jpg)
PUBLIC/PRIVATE PARTNERSHIPS (P3S) IN 30
MINUTES OR LESS
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WHAT ARE WE GOING TO DISCUSS?
• Some history of P3s in Arizona• Current shifting landscape• Potential future of P3s in Arizona
P3s
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A BRIEF HISTORICAL LOOK• Although the 202 Connect
project has garnered a lot of attention, it is not the first Public/Private Partnership in Arizona
• A project may be a P3 even if it is not formally titled a “P3” or even doesn’t require private financing
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WHAT IS A P3? • A Public-Private Partnership is a
contractual agreement between a public agency (federal, state or local) and a private sector entity.
• 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.
• In addition to the sharing of resources, each party shares in the potential risks and rewards in the delivery of the service and/or facility. o Source: www.ncppp.org
Public Sector
Private Sector
Partnership
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RANGE OF DELIVERY MODELSThe Scale of Public-Private Partnerships:
Risk Transfer & Private Sector Involvement
Privatization
Deg
ree
of P
riva
te S
ecto
r R
isk
Design-Build-Finance-Maintain-Operate (Full Concession)
Design-Build-Finance-Maintain-Operate (Availability Payment)
Design-Build-Finance-Maintain
Design-Build-Operate-Maintain
Design-Build-Finance
PDA
PPP
Mod
els
Design Build
Design-Build
Degree of Private Sector Involvement
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CENTRAL ARIZONA PROJECT• In 1946, the Central Arizona Project Association was
formed to educate Arizonans about the need for CAP and to lobby Congress.
• It took approximately 22 years to accomplish this, when in 1968 President Johnson approved construction of the CAP.
• The Central Arizona Water Conservation District was created to manage the CAP and as a means to repay the reimbursable costs of construction.
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GM DESERT PROVING GROUNDo Structured as an enhanced use
leaseo Joint venture with the US Army
and GMo GM provided the facilitieso Army provided the lando Win/win as now both have a
2,400 acre hot weather test complex that neither could have built on their own
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CRESCENT MOON• Crescent Moon/Red Rock
Crossing Recreation Area in Sedona, AZ o RRM has operated this area since
1994 under a private maintenance and operations agreement with the US Forest Service
o Study conducted in 2011 compared RRM’s operations of the Recreation Area with nearby Arizona State Park
o Crescent Moon returns $45,000 a year to the US Forest Service while state park costs Arizona $234,000 a year
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LAKE PLEASANT WATER TREATMENT PLANT
• Water Treatment Facility – Built with a capacity of 80 million gallons per day (mgd), but expandable up to 320 mgd
• Built as a Design-Build-Operate• At the time was the largest Design-Build-Operate in North
America• Project began two months ahead of schedule, saving the City
of Phoenix approximately $30 million • Project was completed with zero lost-time accidents
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CURRENT SHIFTING LANDSCAPE IN ARIZONA
• Although P3s have been used in Arizona over the years, they have not been capitalized on here as much as they have in other states or globally.
• Why is that?:o A lack of clear enabling legislation?o A lack of understanding on the public/private sector side?o Access to affordable financing options?o A lack of need for this delivery method?
• It is unclear why, but it is clear that there is a growing interest in Arizona.
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LEGISLATION• Significant changes in public procurement laws in
the 2000 session have allowed for government agencies to utilize alternative project delivery methods.
• The passage of clear enabling legislation in 2009 for ADOT to use P3s has resulted in ADOT exploring them for a number of opportunities.
• Depending on the size of potential P3, additional P3 legislation is required to encourage P3 use in Arizona.
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UNDERSTANDING• Until the past couple of years, there have been pockets of
discussion on P3s, but no clear groundswell.• Recently a P3 Stakeholder group was formed with members
of the public and private sector to discuss potential projects to use P3s, enabling legislation and other P3 issues
• In the past four months, there have been two meetings hosted by the Arizona Commerce Authority, in conjunction with leaders from Canada to discuss growth and use of P3s in Arizona. o These meetings have drawn out between 70 and 100 attendees each meetingo Leaders from contracting companies and governmental leaders at all levels
• Personal experience – an increased level of consults
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NEED• To utilize a P3, there needs to be an
infrastructure need.• Estimated costs of Arizona infrastructure
needs in the areas of transportation, telecommunications water and wastewater, and energy are at least $417 billion over the next 25 years.
• Arizona’s political landscape makes it very unlikely for the government to raise that money on its own.
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POTENTIAL P3S IN ARIZONA• ADOT related:
o Freeway lighting upgrade• Replace all high pressure sodium lights in Phoenix Maintenance
District including lights in the Deck Park Tunnel• Plan, design, supply, operate and maintain
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POTENTIAL P3S IN ARIZONA• ADOT related:
o I-11 corridor• The concept of an access controlled, high-capacity
transportation facility connecting Phoenix and Las Vegas
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CONCLUSIONS • P3s are not simply about financing,
but rather providing a performance guaranty to public sector partners
• Staying aware of the growing interest in P3s may result in you being competitive in some fantastic business opportunities.