Transitional Benefit Corporation A New Model for State and Local Governments with Reduced Tax Revenue Steve Sorett, Esq., ...
Transitional Benefit Corporation Structure  Funds Grants CRADAS Contracts Universities Non-Profits Private Sector Private ...
Transitional Benefit Corporation (TBC) <ul><li>New, Innovative Method Of Transferring Government Employees To The Private ...
How This Is Different <ul><li>Privatization, Public-Private Partnerships, ESOPS, Outsourcing, Managed Competition, And Lea...
Problems Facing State and Local Governments  <ul><li>Increasing Debt and Loss of Revenue </li></ul><ul><li>Need to Reduce ...
Assets Involved with TBC <ul><li>Real Estate – The Land </li></ul><ul><li>Buildings </li></ul><ul><li>Equipment </li></ul>...
People Are Your Most Perishable Asset <ul><li>The “Best” People Will Leave First. </li></ul><ul><li>Need To Have An Immedi...
TBC Objectives  <ul><li>Reduce Overhead while Maintaining Core Capability And Surge Capacity </li></ul><ul><li>Preserve Ex...
Objectives <ul><li>Transition Public Sector Workforce Into Maintaining Core Government Functions while Concurrently focusi...
Implementing the TBC Strategy <ul><li>Build A Not-for-profit Umbrella Organization  </li></ul><ul><li>Establish A Board Of...
Details Of The Structure <ul><li>Three Enclaves:  </li></ul><ul><ul><ul><li>Public Sector, Private Sector, Incubator R&D <...
Details Of The Umbrella Concept <ul><li>Established Under State Law (Or Multiple States) As A Public Benefit Corporation. ...
Details Of the Umbrella Concept <ul><li>Can Receive Grants And Cooperative Agreements. </li></ul><ul><li>Can Contract With...
TBC Benefits <ul><li>Enables New Economic Development In The Community </li></ul><ul><li>Presents Savings To Government By...
Getting Started <ul><li>Conduct Marketplace Assessment Comparable To A Business Case Analysis,asks:  Is This A Bankable De...
Identify Partners <ul><li>Employees Move To TBC. </li></ul><ul><li>TBC Enters Into Agreements With Business Partner (s). <...
TBC Personnel Actions <ul><li>Voluntary Transfer Of Personnel From Public To Private. </li></ul><ul><ul><li>Continue To Ac...
TBC Steps <ul><li>Job Offer ( Negotiable - At Current Salary With  Benefits) To Every Employee. </li></ul><ul><ul><li>Thos...
TBC Considerations <ul><li>Reimburse Public Sector Retirement Accounts </li></ul><ul><li>Employee View Of Need For Change ...
TBC Stakeholder Benefits  <ul><li>Public Employees </li></ul><ul><ul><li>Enhances Prospects For Long-term Job Security But...
TBC Stakeholder Benefits  <ul><li>Local Communities </li></ul><ul><ul><li>Provides Stable/Stronger Organizations. </li></u...
TBC Stakeholder Benefits <ul><li>Retains Core Mission And Surge Capability For Mission Responsiveness. </li></ul><ul><li>A...
Transitional Benefit Corporation Structure  Funds Grants CRADAS Contracts Universities Non-Profits Private Sector Private ...
Upcoming SlideShare
Loading in …5
×

TBC Presentation

1,017 views

Published on

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

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,017
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

TBC Presentation

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

×