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Trends education on how a community water system operates LLC, in a collaborative effort to meet both the construction and what can actually change under a P3 is critical to and capital requirements of the project. Through Santa gaining public trust of the model. By better educating Clara Water, PERC and Alinda were able to guarantee consumers on the checks P3s are subject to, such as water quality, meet all compliance deadlines, fund 100 environmental regulations, PUC approvals, and other percent of the project using private capital, ensure 30 contractual safeguards like fixed pricing terms, consumers years of contractually exacted water costs, and generate can gain comfort that private involvement in water recycled water for Santa Paula to reuse. In May of 2010, only two years after winning the award for the project, the won't gouge their wallets or compromise their safety. Santa Clara facility was complete — seven months early. Additionally, providing independent and transparent Despite their noted successes, oversight of P3s, once operating, P3s are seldom implemented is key to avoiding issues such as without some attendant those experienced in Indianapolis. complications. Political obstacles Pricing: For both public and are some of the most prevalent private water systems to operate issues that must be overcome efficiently in the long run, when attempting to cultivate a P3. consumers must understand the Oftentimes, public works directors true cost to produce water and be have close connections to the made to bear its full economic cost. consulting and engineering firms As long as water is subsidized, tasked with building and upgrading it depends on revenue derived facilities under the traditional from sources which don't receive Design-Bid-Build model and are its benefit, thus perpetuating hesitant to allow new entrants the capital tug-of-war that has with different operating models left our infrastructure in a state into the fold. Additionally, the of disarray. Once consumers term "privatization" is perceived negatively by many politicians and For municipalities adrift without funding, public-private pay water's full economic cost partnerships (P3s) may be a viable solution. in return for its full economic members of the public who fear a benefits, market equilibrium will private entity will deliver service unreliably or monopolistically, leading to higher costs ensure its adequate provision over time. and substandard service. Such fears are not completely baseless, as some P3s While easier said than done, achieving greater have yielded less than stellar results. Veolia's O&M; transparency around the POP of community water will arrangement with Indianapolis Water is an example of a help break down the political barriers and cultural myths P3 that failed to live up to its original billing. While both that have perpetuated our unsustainable municipal water sides would certainly debate the extent to which Veolia model, ultimately enabling private capital to help solve did or did not meet its commitments, what is clear is that our massive water infrastructure problem. a myriad of lawsuits and consumer complaints ultimately 1. The National Council for Public-Private Partnerships, American Society of Civil led the city to terminate the arrangement 12 years early Engineers: Failure to Act – The Economic Impact of Current Investment Trends in Water at a cost of $29 million and sell the operation to the nonand Wastewater Treatment Infrastructure profit Citizens Energy Group. Keys To Successful Implementation In the end, the key to overcoming these obstacles and perpetuating more P3 success stories is to promote much greater transparency across the planning, operations, and pricing (POP) of community water: Planning: Fostering greater transparency as to how capital and investments decisions are planned for at community water systems will help eliminate conflicts of interest and ensure all options, both public and private, are given a fair chance to deliver what is best for the customer. Operations: Providing greater transparency around and 26 Guide Name Here ■ urlhere.com Frank A. McGrew IV, managing director in the Raymond James General Industrials Group, has represented numerous public, private, and closely-held firms in both an advisory and principal role on such issues as strategic management, corporate growth, financing, restructuring, and overall capitalization . During his nearly 20-year career, he has raised more than $4 billion in capital and advised on nearly $5 billion of strategic transactions for numerous private and public entities throughout the world and recently completed the sale of Ashbrook Simon-Hartley to Alfa Laval AB. Jay Gorman, VP in the Raymond James General Industrials Group, has more than 10 years of corporate finance experience having worked on a myriad of successful acquisitions, divestitures, joint ventures, partnerships, and other strategic initiatives for diversified industrial and basic manufacturing companies.