In 1992, the United Kingdom
passed the Private Finance Initiative, which provided legal authority for
government to pursue the use of Public-Private Partnerships ("PPPs" or "P3s")
in the funding and delivery of much needed social infrastructure.  Since then, 450 schools, 130 hospitals, numerous
prisons, transportation systems, office buildings, museums, prisons, and
courthouses have been constructed in the UK through P3s.  The UK National Audit Office recently
released an audit showing that these projects are three times more likely to be
delivered within budget and on schedule when compared to the traditional
governmental delivery process, and with so many successes they have sparked a
wave of P3 development across the globe. 

In 2009 a survey of state and
local government officials conducted here in the U.S. by McGraw-Hill
Construction revealed that 92% of government decision-makers experienced with
P3 projects had a positive outlook on P3s and would embrace an opportunity for
utilizing them again.  Yet despite the
success history of P3s the U.S. lags the rest of the world in their embrace.    Those
that persevered in the UK’s 1992 groundbreaking P3 initiative now have a sense
of déjà vu as they watch the U.S. and particularly California as we fight the
same battles they conquered almost two decades ago.  They certainly understand the economic crises
of an under-funded government facing ever increasing needs for infrastructure
while organized labor vehemently fights to kill any usage of P3s. 

As Chairman of the P3 Committee
for the Western Council of Construction Consumers and owner of Brookhurst
Development, a firm that has done a number of successful P3 projects, I was
recently asked by the office of Senator Wright to give testimony at the State
Capitol in support of Senate Bill 475, a bill that would clarify and improve
existing P3 laws.   The bill made
imminent sense.   The legislation would only
apply to local government projects, not state projects.  Therefore, how could state legislators deny
local governments an established, proven means to meet their desperately needed
infrastructure programs, particularly since the state has withdrawn funding from
many of these programs while concurrently embarking on a mission to kill
alternative local funding sources such as redevelopment agencies and enterprise
zones?   Wouldn’t the legislators see
that such P3 projects could deliver these needed facilities without tapping into
the dwindling funds of either local or state government thus preserving their
credit ratings and debt capacity? 
Wouldn’t a non-appropriations bill that was authored through a bi-partisan
effort between Senator R. Wright (Dem) and Senator W. Emmerson (Rep) bridge the
chasm of debilitating polarization we are witnessing at all levels of politics?  And most importantly, wouldn’t the many
critically needed jobs that would be created when these unfunded projects were
allowed to move forward be a good thing, especially given the rhetoric these
same politicians espouse during campaign speeches about the need to create California
jobs?  I eventually learned just how naive
these questions were.

During testimony to both the
Senate Committee on Governance and Finance and the Assembly Committee on Local
Government, I watched an impassioned Senator Wright talk about the aged Gerald
Desmond Bridge in his district, and how neither local nor state funding was
available to repair the bridge thus allowing chunks of concrete to fall and
endanger motorists.   He pleaded that the
bill was not a mandate for local governments, but simply gave them an option
that would provide them greater ability to use P3 funding as a last resort when
all other funding was unavailable. 
Opposing the bill were vociferous public employee union representatives
that provided sketchy anecdotes and unsupported claims about how P3 projects
robbed the coffers of local government with their well-known yet unstated
agenda being to maintain their monopolistic control over all public works jobs at
all levels of government.  It should be
noted that many private construction trade
unions have joined support for such P3 legislation as they view it as an
opportunity to create jobs when halted projects are finally allowed to proceed.

The bill passed the Senate floor
by a landslide 26-4 vote.   However, the
Assembly Committee quashed the bill, where it has been granted a future
reconsideration.  There is little
question that the underlying resistance of elected officials towards the bill’s
passage was a direct result of the control public employee unions have over
these legislators.  And until these same politicians
put the need for job creation and improved infrastructure above campaign
contributions, we may have to accept the long road ahead in climbing out of the
massive financial and economic morass in which this state currently finds