Don't raise taxes Norfolk. Consider this option first

Please, the children first

Consider the ten year old Public-Private Education Facilities and Infrastructure Act of 2002 to finance school construction and renovation before you bump real estate taxes and other fees, Norfolk City Council. 

The intent of the PPEA was to stimulate more investment in school construction at a quicker, more efficient pace and at a lower cost.

It could be fear or it could be that the PPEA requires more oversight and work by public school systems.

The PPEA allows local governments, including school system, to partner with the private sector to design, construct, finance and operate almost any public facility.

Projects that qualify under the PPEA: school buildings, stadiums, facilities operated by public school system, higher education facilities; fire station, police station, library, and so forth.

Bi-Polar on the Bay

Six counties and three cities, primarily in Northern Virginia, have chosen the PPEA route for the construction of public facilities.

“You have to do a lot of work up front,” a Bedford county official was quoted in a 2010 Power Point Presentation presented by Maguire Woods Consulting. The project was finished early and on budget.

Two high schools in Fredericksburg and the surrounding area were built under the PPEA guidelines. Both were finished on time and within budget.

Excerpts from an article I wrote for Dolan’s Virginia Business Observer July, 2002, sheds some light on the PPEA.

The article was written prior to a seminar hosted by the law firm of Kaufman & Canoles at the Norfolk Airport Hilton.

Walter Stosch, R-District 12, was the chief patron of the bill to create the PPEA in Virginia.

The legislation gives local and state officials the ability to have wastewater treatment plants, courthouses and other government facilities built faster and cheaper, Stosch said in an interview.

John M. Lawson, president of Newport News-based W.M. Jordan & Co., said in the 2002 article that a company would have to overcome three hurdles.

First, the company would have to pay taxes on the real estate and income.

Second, the company would have to make a profit.

Third, a school system or locality could borrow money at a lower interest rate than a private company could.

The only way a private company could get less onerous financing would be to get a long-term lease from the school system, Lawson said.

"Those are still valid concerns," he said. But "the private sector can do it much cheaper than the public sector."

But he questioned, however, whether there is enough efficiency to offset the added burden.

"It's not just the design and build of the school; it's the operation and maintenance," Lawson said.

Much depends upon whether employees are public employees or hired by the company, in which case the risk factor is higher and more issues are at stake.

"This could be a situation in which you are in it for the long-haul," he said. But "whenever you have change, you have opportunity."

More information can be found at the following sites.

PPEA Working Group

http://dls.state.va.us/PPEA.HTM

2009 Model Guidelines
PPEA Checklist
Suggested Public Private Partnership Commission Procedures