Understanding how the P3 model works and the issues you may face.

In the past, states and local governments have relied in large part on low-cost tax-exempt financing to meet their infrastructure needs. While there is a growing consensus that our nation's present infrastructure needs are great, many states and local governments are finding it more difficult to continue to borrow to address such needs due to a number of factors, including constitutional and statutory debt limitations, mounting pension liabilities and flat and/or declining revenues. As a result, a number of states and local governments have turned to public-private partnerships ("P3s") to address infrastructure needs. By definition, a P3 involves an agreement between a governmental entity and a private entity with respect to the development of a project, whereby the private developer agrees to bear some of the risk (and take some of the reward) with respect to the development, financing, operations and/or maintenance of a project. Sectors where P3s have been used include transportation, energy, telecommunications, water and wastewater and governmental buildings. This topic will provide an overview of how P3s work, various forms P3s can take and some of the legal, financial, operational and political issues that P3s invariably face.