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TBC Presentation

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A briefing on a P3 method called "TBC" that will help state and local governments during hard times

A briefing on a P3 method called "TBC" that will help state and local governments during hard times

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  • 1. Transitional Benefit Corporation A New Model for State and Local Governments with Reduced Tax Revenue Steve Sorett, Esq., McKenna Long & Aldridge LLP To Learn More Contact: Robert Knauer CPCM at 703-919-4617 1 December, 2010
  • 2. Transitional Benefit Corporation Structure Funds Grants CRADAS Contracts Universities Non-Profits Private Sector Private Activity Bonds Assets Machinery People Benefits (Pensions/Medical) Business Relationship Surge Capacity Structure Board of Directors Officers Operations Transitional Benefit Corporation [501(c)3] Government Organization Private Company New Private Sector Businesses
  • 3. Transitional Benefit Corporation (TBC)
    • New, Innovative Method Of Transferring Government Employees To The Private Sector While Achieving Savings For the Public Sector
    • Retain and Accrue Retirement & Medical Benefits.
    • Create Environment To Produce New Work, New Clients (outside of government)
    • A Form Of Privatization In Place: Government only Buys What It Needs
  • 4. How This Is Different
    • Privatization, Public-Private Partnerships, ESOPS, Outsourcing, Managed Competition, And Leasing Initiatives Solve Some Of The Challenges Facing Government Activities, But Not All.
    • The TBC Approach Builds on these approaches but adds an additional dimension – growth potential for the employees and savings to the government.
  • 5. Problems Facing State and Local Governments
    • Increasing Debt and Loss of Revenue
    • Need to Reduce Overhead and Staff
    • Loss of Human Capital Skills
    • Need to Find New Sources of Revenue By Building Private Sector Possibilities
  • 6. Assets Involved with TBC
    • Real Estate – The Land
    • Buildings
    • Equipment
    • People – The Most Perishable Asset
  • 7. People Are Your Most Perishable Asset
    • The “Best” People Will Leave First.
    • Need To Have An Immediate Plan In Place To Keep The Best People And Attract Capital.
    • Forward Thinking Communities And Businesses Will Endorse A Plan That Reduces Overhead and Staff While Looking Preserve and Grow Human Capital.
  • 8. TBC Objectives
    • Reduce Overhead while Maintaining Core Capability And Surge Capacity
    • Preserve Expertise Of Key Personnel.
    • Find “Soft Landing” For Underutilized Or Entrepreneurial Workers.
    • Create Business Environment for New Growth in Private Sector
  • 9. Objectives
    • Transition Public Sector Workforce Into Maintaining Core Government Functions while Concurrently focusing on finding jobs for former public employees in the Commercial Sector.
    • Obtain Financing From Grants, Contracts, Tax-exempt Bonds, And Third Party Investments.
    • All are REAL possibilities to grow .
  • 10. Implementing the TBC Strategy
    • Build A Not-for-profit Umbrella Organization
    • Establish A Board Of Directors And Advisors Of Stakeholders, E.G., Community, State and Local Governments, Universities, Etc.
    • Board Appoints Officers And A General Manager/COO.
    • Include All Existing Employees Under The Umbrella Who Wish To Participate.
    • Include The Private Sector.
  • 11. Details Of The Structure
    • Three Enclaves:
        • Public Sector, Private Sector, Incubator R&D
    • Public Employees Under Umbrella Can Move To The Other Enclaves Without Losing Pension Benefits (Analogous To An IPA).
    • Private Sector Members Are Selected Competitively Using Public Contract Principles.
    • Incubator Receives R&D Funding And Tax Favored Treatment.
  • 12. Details Of The Umbrella Concept
    • Established Under State Law (Or Multiple States) As A Public Benefit Corporation.
    • Treated As A Nonprofit Industrial Development Corporation That Can Issue Tax-exempt Bonds Under Pertinent IRS Rulings.
    • Public Sector Enclave Can Use All Existing Authorities Of U.S. Code.
    • Can Issue Tax Exempt Bonds And Raise Capital.
  • 13. Details Of the Umbrella Concept
    • Can Receive Grants And Cooperative Agreements.
    • Can Contract With The Private Sector.
    • Can Partner With Other Governmental, Private Sector, Educational, Or Not-for-profit Entities.
    • These Monies And Partnerships Form The Basis For Accelerating Economic Growth.
  • 14. TBC Benefits
    • Enables New Economic Development In The Community
    • Presents Savings To Government By Reducing Overhead And Payroll Commitments (Buy A “Sip At A Time” Rather Than Carrying People And Assets Unnecessarily)
    • Maintains Core Capability For Mission Responsiveness And Surge Capacity – Buy Back The People And Assets On An As Needed Basis.
    • Soft Landing For Former Government Employees
    • Avoids RIF Costs
  • 15. Getting Started
    • Conduct Marketplace Assessment Comparable To A Business Case Analysis,asks: Is This A Bankable Deal?
      • People : Do They Have The Talent, Skills, And Ability To Be Competitive.
      • Market Analysis : Is There Sufficient Workload In Existing And New Markets To Create A Revenue Stream Sufficient To Cover Costs?
      • Competitors : Who Are The Competitors? Can You Win Your Fair Share? Are Their Possible Teaming Or Acquisition Candidates?
  • 16. Identify Partners
    • Employees Move To TBC.
    • TBC Enters Into Agreements With Business Partner (s).
    • TBC Works With Economic Development Organizations And Community Based Entities To Find New Work.
  • 17. TBC Personnel Actions
    • Voluntary Transfer Of Personnel From Public To Private.
      • Continue To Accrue Federal Retirement And Medical Benefits.
      • Guarantee Of Employment For Specified Period (Negotiable e.g. one year).
  • 18. TBC Steps
    • Job Offer ( Negotiable - At Current Salary With Benefits) To Every Employee.
      • Those Who Accept Resign From Public Service And Receive Negotiated Employment Guarantee.
      • Those Who Do Not Accept Remain Public Sector Employees Subject To RIF With No Guarantee Of Employment.
  • 19. TBC Considerations
    • Reimburse Public Sector Retirement Accounts
    • Employee View Of Need For Change
    • Union View
    • Continuity of Mission
  • 20. TBC Stakeholder Benefits
    • Public Employees
      • Enhances Prospects For Long-term Job Security But In A Different Employment Platform.
      • Provides Private Employment While Retaining Federal Benefits.
      • Offers Entrepreneurial Opportunities.
      • Can do much better financially in some cases.
  • 21. TBC Stakeholder Benefits
    • Local Communities
      • Provides Stable/Stronger Organizations.
      • Offers Potential For Entrepreneurial Growth.
      • Retains Prestige Of Premiere Facilities Remaining In Local Area.
      • New Tax Base
  • 22. TBC Stakeholder Benefits
    • Retains Core Mission And Surge Capability For Mission Responsiveness.
    • Allows For Rapid Disposition Of People And Assets Without Causing Undue Hardship.
    • Enables Adaptability And Flexibility To Budget And Other Constraints.
    • Only Buy What Government Needs.
  • 23. Transitional Benefit Corporation Structure Funds Grants CRADAS Contracts Universities Non-Profits Private Sector Private Activity Bonds Assets Machinery People Benefits (Pensions/Medical) Business Relationship Surge Capacity Structure Board of Directors Officers Operations Transitional Benefit Corporation [501(c)3] Government Organization Private Company New Private Sector Businesses