Community Based Public-Private Partnerships (CBP3s) and Alternative Market-Based Tools for Integrated Green Stormwater Infrastructure

This report, developed by the United States Environmental Protection Agency (EPA), presents a guide for successfully implementing a Community-Based Public Private Partnership (CBP3) model for addressing stormwater pollution in communities in the Chesapeake Bay watershed.  CBP3s are partnerships between a government and a private entity designed to leverage additional capacity and financing for delivery of infrastructure projects, while also increasing stakeholder engagement in project delivery. This report is designed to help users implement CBP3 approaches to improve  stormwater management, comply with updated stormwater regulations, and capitalize on market forces to drive down costs associated with stormwater retrofit projects, using examples from the Chesapeake Bay.  A unique aspect of CBP3s (as opposed to traditional P3 approaches) is stakeholder involvement in decisionmaking. The report highlights the benefits of a CBP3, explains how a CBP3 differs from traditional Public-Private Partnerships (P3), identifies alternative options for funding and financing green stormwater infrastructure, and helps users determine if a CBP3 is a suitable approach for stimulating private investment in stormwater management.

In section 1, the report discusses the history of stormwater management, weaknesses in current stormwater infrastructure, and the need for stormwater-focused P3s.  It introduces the P3 model, and explains why the P3 model provides a comprehensive and efficient solution to help municipalities in the Chesapeake Bay watershed comply with state regulations and legislation.

Section 2 identifies examples of communities that have successfully implemented a P3 model in the U.S. Examples include communities in California, New York, New Jersey, and Illinois and examples of P3s in different sectors: transportation, drinking water, wastewater, and energy.  The document emphasizes that successful P3 projects have contract structures that provide co-benefits for both local governments and their private partners.

Section 3 discusses how CBP3s relate to traditional P3s. A traditional P3 is a contract between the public sector and the private sector regarding the design, construction, finance, and long-term operations and maintenance of a public infrastructure project.  Many of the features of a P3 are included in a CBP3, but a CBP3 provides additional stakeholder engagement aimed at ensuring community input in project implementation. The report argues that a CBP3 model is provides unique benefirts for implementing green infrastructure approaches because of the broad array of co-benefits delivered by GSI projects, including potential job opportunities, public health benefits, increased property values. The CBP3 model is also designed to better promote investment in Green Infrastructure (GI) solutions that generate local economic and social improvement (for further comparison of CBP3 to P3, refer to pages 22-24).

This report is intended for municipal officials; program managers; procurement officials; environmental, legal, and financing experts; and decision-makers responsible for implementing stormwater retrofit projects. Important aspects of the CBP3 model pertaining in particular to municipal leaders and financing officials are included in section 4 and section 5 respectively.

Section 6 aids users in determining if a CBP3 is an appropriate tool for addressing their community’s needs and goals. While a CBP3 can provide benefits to local governments and communities, certain logistical and structural factors must be present in order for CBP3s to succeed. A list of questions and hypothetical scenarios are included to help decision makers determine whether a CBP3 is viable approach for their community.

The final sections provide in-depth guidelines for implementing a CBP3 stormwater retrofit program. Section 7 identifies certain challenges that decisionmakers may encounter when developing a CBP3 and strategies for working through these challenges. Section 8 documents the necessary logistical steps needed to develop a CBP3. These steps are referred to as “key activities”, and are actions that must be accomplished in order to maintain an effective public-private partnership. Sections 9 through 12 provide potential business structures, case studies of P3 projects in the Mid-Atlantic (including Prince George’s County Clean Water Partnership, Maryland’s 30 year P3 Partnership), available funding and financing options for green infrastructure investments, and possible financing scenarios of CBP3 stormwater retrofit projects in EPA Region 3 states (i.e. Pennsylvania, Maryland, District of Columbia, Delaware, Virginia, and West Virginia).

Publication Date: April, 2015

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