The recent economic downturn, coupled with a decline in the availability of public funding for capital projects, has resulted in a focus on public-private partnerships (also referred to as “PPPs” or “P3s”). P3s are contractual agreements formed between public and private entities that allow for greater private-sector participation in the financing and delivery of public building and infrastructure projects. See USDOT, Innovative Program Delivery website.
Florida recently adopted a bill, chapter 2013-223, Laws of Florida, to broaden the ability to use P3s in the state because “there is a public need for timely cost effective acquisition, design, construction, improvements, renovation, expansion, equipping, maintenance, operation, implementation, or installation of project serving a public purpose” and “a public-private partnership has demonstrated it can meet the needs by improving the schedule for delivery, lowering the cost, and providing other benefits to the public.” The Florida Department of Transportation (FDOT) already operates a P3 program pursuant to Section 334.30, Florida Statutes. For example, the FDOT is currently in the process of taking proposals for the $2.1 billion I-4 Ultimate Project, which is being procured as a 40-year design, build, finance, operate, and maintain concession agreement.
The bill broadens the ability to use P3s in Florida in an effort to further encourage growth. Among other things, the bill amends Section 255.60, Florida Statutes, to authorize P3s to contract for public-service work with not-for-profit organizations or charitable youth organizations, and it created Section 287.05712 to govern the procurement process for P3s in Florida. Section 287.05712 expansively defines a “private entity” as “any natural person, corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public-benefit corporation, non-profit entity or other private business entity.” Subsections 287.05712(4), (5), and (6) provide procurement procedures for both solicited and unsolicited proposals for qualifying projects, project approval requirements, and project qualification processes. Perhaps most importantly, Subsection 287.05712(11) sets forth financing options for P3s that include private-source financing secured by the private entity, the loan of funds from the responsible public entity to the private entity, and the use of “innovative finance techniques” by the responsible public entity, including federal loans, commercial bank loans, and hedges against inflation from commercial banks or other private sources.
The bill also creates a task force responsible for recommending guidelines to the Florida Legislature for establishing a uniform P3 selection and review process. The task force must submit a final report of its recommendations to the governor and others by July 1.
What does this all mean for Florida? Some believe growth is on the horizon as a large increase in private funding to construct, operate, and maintain public projects becomes available. For example, the Seminole State College is planning to leverage the new legislation to build up its new Altamonte Springs campus, with the first floor of the building probably consisting entirely of retail and commercial with classrooms above ― arguably the kind of innovation promoted by P3s.