Doing major construction work for schools can be a costly endeavor, replete with issuing bonds and dealing with possible delays. But what if there was a way to bypass the conventional process?
On Thursday, experts and politicians gathered at the Mount Kisco Public Library to discuss a radical change for schools construction, one that involves public/private partnerships.
The roundtable, co-hosted by state Sen. Greg Ball (R-Patterson) and the Business Council of Westchester, was the third of three gatherings held since late August. The second one, held in late September, touched on how such partnership - they're dubbed P3 - could be applied to transportation work such as the new Tappan Zee Bridge.
While there is proposed state legislation for P3, it was noted at the roundtable that it focuses on transportation, rather than "social" infrastructure such as school buildings.
Under a P3, local governments and school districts could shift key aspects of creating their buildings, such as design, finance, construction and maintenance, over to private entities. Instead of dealing with bond repayments and maintenance costs, public entities would make availability payments to their private partners for a period of time.
Supporters of legalizing P3 for social uses argue that it can speed up the process of creating infrastructe - change orders payment speed to contractors were cited as problems - along with creating new jobs and shifting risk to the private parties.
“What we’re giving up are the things that we don’t do very well, which is huge construction projects," said Joseph Bracchitta, chief administrive officer for the Yonkers school district.
Bracchitta is particularly interested in seeing P3 legalized for schools because his district is facing a daunting challenge over the next decade of dealing with 36 buildings deemd to need improvement and addressing a space shortage for students. The school district has an estimated total cost of $1.7 billion, with multiple phases over the coming years.
Bracchitta also said that the district would benefit can it can still control the buildings.
“We control the buildings, we control the instructional program. What we get rid of is risk."
Additionally, Bracchitta would like to see a change to state law that would allow for state building aid to be added to the availability payments.
A bill, sponsored by state Sen. Charles Fuschillo (R-Long Island), is pending, although there was discussion at the talk about how current thinking for P3 focuses more on transportation. Panelist Frank Rapoport, an attorney at McKenna Long & Aldridge LLP who specializes in P3, told Ball that he could introduce legisialtion focusing on social infrastructure. Ball responded with an open mind to the scenario, and at the end of the meeting said he would like to hold a hearing on the topic in Westchester County with Fuschillo.
Richard Norment, who is executive director for the National Council for Public-Private Partnerships, noted that the availability payments can be tied to performance and quality.
“So there’s a very strong incentive to meet the performance contract level," he said.
While the possible benefits were weighed, risks were brought up as well, including whether existing public-sector employees could be displaced and what financial risk there would be.
“We don’t want to put existing people out of work," said Bracchitta, who noted that contractual terms can be agreed to for having existing public employees get priority for consideration.
Bracchitta was asked by one attendee about what would happen if Yonkers were to declare bankruptcy. Responding, he talked in general about how the private partners take on risk and reiterated that control of buildings would be retained by the public entities. Norment added his thoughts and explained that the market takes into account risk differently depending on the city. Following up, Bracchitta noted that the risk would drive the cost.
Asked by Patch what would happen if the private company involved were to go out of business, Norment replied that another company could be selected to take its place.