This document discusses public-private partnerships (PPPs or 3Ps) and provides examples of how they can work for Alaska communities. A PPP involves a contractual agreement between public and private sectors to work together on a project, with the private sector taking on substantial financial, technical and operational risks. The document outlines the structure and types of potential partners in a PPP. It provides examples of existing PPP projects in Alaska and opportunities for new ones. It also discusses benefits like cost savings and access to private capital. The document makes the case for two specific PPP examples - a rural commercial lease facility and a rural school district maintenance facility. It discusses factors to consider like income, expenses, ownership and sustainability to make such projects financially

1. What is 3P and how this approach can work for you….
Jay Hermanson
Harold Borbridge

2. Public Private Partnership: Important and
Growing Approach for Alaska Communities….
Public: Pole & Backboard
Private: Hoop, Net & Basketball
Quasi Public: Platform
Public: Transportation Needs…
Private: Technical & Financing

3. A public-private partnership is a contractual agreement
formed between public and private sector
partners, at the INITIAL STAGES of a Project…
Allows more private sector participation than is
traditional….
A public–private partnership (PPP or 3P or P3) is:
…. a government service of government and one
or more private sector companies.
PPP involves a contract between a public sector
authority and a private party…
The private party provides a public service or
project and assumes substantial financial,
technical and operational risk in the project.
Definition: A public-private partnership exists when public sector agencies (federal, state, or local) join with
private sector entities (companies, foundations, academic institutions or citizens) and enter into a business
relationship to attain a commonly shared goal that also achieves objectives of the individual partners.
What are Public – Private Partnerships?

4. The Structure of the Partnership are
Unlimited
• Prospective Partners:
Public: City, Tribal Council/Governments, State of Alaska, Federal
Government, School Districts…
Quasi Public Sector: Health Corporations, Regional Non-Profits, University
System, Utility Cooperatives. Tribal Enterprises
Private Sector: Corporations; (Donlin Gold, Teck, ConocoPhillips, BP);
Village Corporations, Regional Corporations. ANICA, Crowley, Lynden
Transport, Airlines. Stores

5. Public Private Partnerships Examples
Denaina Center DMTS Road- Red Dog Mine

6. Public Private Partnerships- (cont.)
Fire Island Wind Farm
Kobuk Biomass Project

7. Example: 3P Rural Energy Projects
Chaninik Wind Group Manakotak Power Plant Upgrade

8. Opportunities are Increasing….for 3P
GCI- Terra Southwest Quintillion Networks: High Speed Broadband

9. 3P is only bound by the imagination….
A 3P partnership can be formed to:
1. Renovate
2. Construct
3. Operate
4. Maintain
5. Manage a facility or system…

10. Why Now? (Harold)
• Increase demand for services
• Funding sources are not keeping pace
with infrastructure needs
• Time value of Money
• Rising Interest Rates
• P3 can assist Tribes & City help
governments meet demands for the
development of modern and efficient
facilities, infrastructure and services while
providing value for taxpayers

11. Benefits
Expedited project completion
Project cost savings
Improved quality
Use of private resources
Access to new sources of
private capital

12. Four Basic Dimensions of P3
Four Basic Characteristics
Shared goals
Shared resources (time,
money, expertise,
people)
Shared risks
Shared benefits

13. Typical Funding
Sources
Tolls
Tax Increment Finance
Fees
Grants
Loans
Bonds
Other Revenue Streams

14. Rural Alaska Commercial Lease Facility:
Making the Case
(3P) Public-Private Partnership Example 1.

15. Sustainability is the Key: Making it Pay
•Multi-use Facility and the Fiscal Environment:
Why has there been a Reluctance to Fund Rural Facilities?
- Creating a Long term Cost v. Long Term Income
- Ownership: Who will own and operate the Facility?
- No Return to the Community…. Who will pay the Bills?
- No Defined Use; Results – No Community Return

16. Basic Elements of a Commercial Lease
1. Income & Expenses
2. Net Operating Income
3. Cash Flow
4. Cash on Cash Return
5. Capitalization Rate

17. Rural Facility Space: Market Demand
Local City Governments
Local Tribal Governments
ANCSA Village and Regional Corporations
Regional Tribal Nonprofits
University of Alaska: Distance Learning Programs
Other University Programs
Health Corporations
Private Companies…..

18. Benefits of a Community Lease Facility
• Adequate Space for Workers
• Facility Configuration – Local Control
• Added Community Space
• Detailed Planning to Lower Costs
• Increase the Resource Flow INTO the Community…..
• Others….
A Lease Facility will be a long term Cash Flow Positive Community Asset!

19. Rural School District School Maintenance Facility:
Making the Case
(3P) Public-Private Partnership Example 2.

20. Sustainability is Always the Key….
• The State of Alaska and the Fiscal Environment Crisis:
Rural School Districts will either Lead the Effort or Be Led…..
- Lowering State Expenditures while Increasing Scores…..
- Ownership: Who will own and operate the Facility?
- 100% Return to the Region….State pays the Bills?...
- Locally Defined Use; – Substantial Community Return

21. Basic Elements Remain the Same
1. Income & Expenses
2. Net Operating Income
3. Cash Flow
4. Cash on Cash Return
5. Capitalization Rate

22. Major Advantages; Local Maintenance
Dove Tail School District CTE programs ….
Greater Community involvement in the Schools….
Learn from successful student programs: ANSEP…
Skilled Labor is a Commodity; Expect Private interest
1. Expect Competition for your trained Students….
Local & Regional Organizations will benefit…
State, Federal and Private support....

23. Benefits: School District & Local Private Sector
• Control Remains with the School Board
• Closer to Home Training programs
• Added Community Technical Resource…
• Detailed Planning to Lower Costs
• Increase the Resource Flow INTO the Community…..
• Others….
….Over time: School Maintenance Facility will become a
--- Cash Flow Positive School District Asset!

24. Why Now?....
Rates are at an Historic Low….

25. Economic Factors….
•Dollar Value….
…..Energy Market – Supply and Demand….
- Federal Reserve and World Central Banks….
- Ownership: Who will own and operate the Facility?
- The Result:…. Increasing Interest Rates = Increased Cost..?
- Private Sector is Efficient; Funding will go to Greatest Return

26. Common Barriers….
1. Political….
2. Lack of ownership of, and support for PPP
3. Lack of awareness/ poor understanding about PPPs by politicians/ decision makers
4. Lack of capacity in public (and private) sector (at the working level) concerning project
development and implementation
5. Absence/ inadequate coverage of PPP legal regime/ institutional framework
6. PPP process not clearly defined
7. Non-availability of model concession agreements…. And the list goes on…..

27. Rural Facility Space: Market Demand
Local City Governments
Local Tribal Governments
ANCSA Village and Regional Corporations
Regional Tribal Nonprofits
University of Alaska: Distance Learning Programs
Other University Programs
Health Corporations
Private Companies…..

28. Benefits of a Community Lease Facility
• Adequate Space for Workers
• Facility Configuration – Local Control
• Added Community Space
• Detailed Planning to Lower Costs
• Increase the Resource Flow INTO the Community…..
• Others….
A Lease Facility will be a long term Cash Flow Positive Community Asset!

29. Plan and Test
• Final project definition
• What is the best way to complete the project?
• Has the plan been thoroughly tested to assess
market demand, public and stakeholder feedback
and economics?

30. Plan and Test
• Master Schedule/Budget
• Political Climate
• Any potential “fatal flaws” that could derail the
project?