More reasons why Fairfax County shouldn't be using a public-private partnership for TCN

Reston 20/20 has long opposed the use of public-private partnerships (PPP) for development of public infrastructure.  We publicly opposed the PPP between Fairfax County and Comstock that gave Comstock substantial financial benefits and extra density at Wiehle station all for the rat maize-like, traffic-clogged, dangerous parking garage Metro riders must use.  We now worry that the PPP between the County and some as yet unpicked developer for Town Center North will have nothing to do with Reston's planning principles or the specific needs of the community there for, among other things, a sizable regional library, a significantly larger homeless shelter, a regional recreation center, and any public park space beyond the "town green" (more like a dog park) in its midst.  

Our opposition is based on the well-established curtain of secrecy that hangs over these deals.  Indeed, that secrecy is written into Virginia law to protect the guilty in both government and the private sector.  Right now, we view as dim the Reston community's chances of seeing either the draft concept plan or the final plan for community comment and amendment as needed to meet community needs before the County moves forward issuing the RFP and selecting a developer.  The three public meetings held so far on TCN's future have seen little added specification on the County's development intent and virtually no change in any specifics despite significant community input that has been met by the usual soothing words from County staff and Supervisor Hudgins.  Despite the appearance of responsiveness to community needs, the County appears determined to proceed on its own way.

And, of course, the County and RA are working their own side deal that is unlikely to have anything to do with Restonians.  And this deal is being worked in secret--the only way the RA Board seems to know how to act.  In fact, so far as we could observe, no RA Board members even bothered to attend the last community meeting on TCN, probably because none of them  care about either County plans or Reston community concerns.  

So what's a possible RA side deal all about?  It seems that RA and, more specifically, its Design Review Board (DRB) have a covenant going back to the 1960s on some of the land in TCN that would preclude or at least delay any re-development of some of the County's portion of TCN.  So the County needs RA to vacate that covenant before it can proceed, an action the RA Board can take on its own (no referendum required).  We know that there have been secret meetings between RA leaders and Supervisor Hudgins as well as attorneys for both sides, and we can think of no other reason for those meetings to occur.  

Based on recent experience, we suspect that RA is seeking to include all new residential properties built in TCN in Reston Association, generating an ever larger stream of revenues to spend.  Given the absence of Board members from the latest community meeting on TCN, we very seriously doubt they are pursuing the goals of the community which have to do with the quality of the public facilities--the new Reston Regional Library, a new Embry Rucker Homeless Shelter, a promised FCPA Regional Recreation Center, and a real, maybe even "signature," community park worth talking about--that are planned for the area, including the Reston Master Plan.  As usual, we expect RA to look out for itself, not for our community in these negotiations. 

More broadly, PPPs have demonstrably created huge holes in public budgets despite their supposed intent to eliminate additional public costs.  The latest example of this comes from Tidewater Virginia and is reported by the Washington Post.  Here is the lede:

 NORFOLK — The private proposal to build a new underwater tunnel in this congested port city was originally billed as a way for Virginia to get a crucial piece of infrastructure without having to put in a single dollar of state money.

Instead, Virginia officials have agreed to spend slightly more than $580 million on the project, more than twice the investment from the companies behind the deal. With no competition, the companies won the right to collect billions of dollars in tolls over 58 years.

The state also agreed that the companies — Swedish construction giant Skanska and Sydney-based finance group Macquarie — are entitled to large government payouts if Virginia builds or expands other bridges or tunnels nearby, making fixing other traffic woes more costly for generations to come.

Click here for the rest of this story of a massive public giveaway with a huge public expense--all in the name of a public-private partnership.  

While larger than what is planned for TCN, we expect that the results here will be similar in impact, if different in scale.  We could easily see less than satisfactory public facilities as well as higher County taxes and RA dues in our future from this PPP.  

Meeting Concerning the Future of Reston Regional Library, September 19, 2015, 9AM, RCC-Lake Anne

The following posting is a re-posting of an item on the Fairfax County Library Advocates blog.  We would highlight the fact that this will be the ONLY scheduled opportunity for public input, in large part because the Town Center North redevelopment is a public-private partnership that allows virtually no public input or transparency to decisions made by the County and the developer.  Your attendance and participation will be vital to the future of our library.

The following message was included in Supervisor Cathy Hudgins' September Newsletter.  What is not mentioned in this article is that the Reston Regional Library is one of the "key services" being considered for redevelopment and/or relocation.   As this is the only county meeting scheduled to allow public input for the redevelopment of Town Center North, please attend.  Numerous questions arise about Reston Regional:  How many square feet will be included in the new library, how many print and ebooks will be accommodated, and will there be adequate dedicated parking for library patrons.
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Reston Town Center North Redevelopment and Human Services Delivery:  Join the Dialogue
On Saturday, September 19, 2015, Supervisor Hudgins will host a Community Dialogue meeting to discuss evolving needs in Reston and the North County area, including regional delivery of human services and the redevelopment of Reston Town Center North (RTNC).
Fairfax County Deputy County Executive Patricia Harrison and staff will highlight the proposed health, housing and human services community input process.  Fairfax County Deputy Executive Rob Stalzer and Project Coordinator, Public-Public Private Partnership Branch, Andrew Miller, will discuss the County and Inova's efforts to fulfill the Comprehension Plan vision for the Town Center North-Mixed Use area, including the most recent Request for Proposal (RFP) process and potential development scenarios that may be considered for RTCN.  The goal is to have the community identify key services, and vision for delivery of services in the region and within the RTCN footprint.
The meeting will be held from 9 am to 1 pm at the Reston Community Center at Lake Anne - Rose Gallery Room, 1609-A Washington Plaza, Reston.  To RSVP, please send us a message to huntermillRSVP@fairfaxcounty.gov

A "model" scheme, Thinking Highways, August 26, 2014

This article, which might be better titled "Take the money and run", highlights how state toll road public-private partnerships (P3s) are structured to leave the taxpayer paying the bill when they routinely default.  It focuses on Virginia's P3s under the last administration, but the lessons apply more broadly.

Here is an excerpt:

Virginia’s 1995 Public-Private Transportation Act is held up as the “model” by contractors and financiers, especially as it was implemented at break-neck speed during Governor Bob McDonnell’s administration.  In four years, the number of Virginia P3s skyrocketed to 22 and with the Commonwealth signing over US$6 billion in P3s during 2012 alone, Infrastructure Investor magazine named McDonnell “man of the year” and called the state’s legal consultant, Allen and Overy, the world’s best law firm twice. Does any magazine for investors venerate hard bargainers for taxpayers?

“A great deal of the media praising public private partnerships in transportation projects comes from sources that have a self-interest in promoting them,” says Jack Trammell, now a candidate for Virginia’ 7th Congressional District.  “A major factor motivating me to run for office is what I think should be a national concern about this trend away from transparency and toward greater taxpayer risk in such projects.”

In the past, even Virginia’s Commonwealth Transportation Board (CTB) never saw P3 contracts, only being allowed up-down votes on the total taxpayer bill, which consistently put 95+ per cent of all costs on state and federal taxpayers. The privates put up tiny bits of equity, though they imply more because they borrow dollars from Uncle Sam that they likely will not pay back and they sell bonds that Uncle Sam guarantees and which will cost taxpayers when the P3 goes bankrupt – as they almost inevitably do – about 15 years down the road.

It is a “win-win-win” for private money and contractors but for unaware taxpayers it could be the biggest scheme ever in Virginia – and potentially US – history.  Is getting a highway or other transportation infrastructure, which may or may not be needed, returned to we taxpayers just when it’s beginning to need maintenance worth the fact that we’ve left virtually all construction costs, all risk, all financing costs and 10-15 years of tolls to the next generation of taxpayers?

Click here to read extensive details on the way these deals are fashioned so companies win and you lose.  

The double-edged sword of private donations for public parks.

A post by Tate Williams entitled "The New Golden Age of Urban Parks Philanthropy (And Its Controversies)" on the "Inside Philanthropy" blog highlights the growth in private giving to build, enhance, and sustain public parks and the issues that creates.  Here are some excerpts from the post, but you may want to read the whole thing:

Private funding is pouring into parks lately, and not everyone is happy about it. Regardless, cities are putting together creative projects with massive backing from wealthy donors, and it’s not all happening where you might expect. 

Every city, it seems, wants to launch the next High Line. The abandoned-railway-turned-park in Manhattan is the poster child for private funding developing urban green space, and giving a shot of vitality to surrounding neighborhoods. Projects like that one are sprouting up all over the country, whether by nonprofit conservancy or public-private partnership.

Parks philanthropy seems to be surging at the intersection of a few trends. For one thing, you’ve got the overall concentration of wealth and concomitant rise in philanthropy nationally. Then there’s the fact that many city and state budgets have suffered following the economic crash, and parks aren't a top priority. But there’s also what one urbanist has termed the Great Inversion, in which the middle- and upper-classes are flocking to city centers, who miss those nice parks left behind in the ‘burbs. As for urban areas still struggling to lure people back, parks and bike paths are seen as the kinds of amenities that attract educated professionals to put down stakes. . .

. . .  But many view the trend as a threat to the public good.

For example, Reuters columnist Felix Salmon blasted gifts like John Paulson’s $100 million to Central Park, pointing out that he’s essentially getting a huge tax benefit by putting funds into the wealthy neighborhood in which he lives.

There’s also the issue of equitable access. Most of these large grants go toward one park, often in affluent or gentrifying neighborhoods, and not the entire park system, which would benefit rich and poor neighborhoods alike. Margaret Walls of Resources for the Future points out in her research a number of downsides to outsized philanthropy in parks, including the fact that when private funding steps in, public funding tends to shrink. And that private funding is very rarely enough to ensure sustainable, year-to-year operations and upkeep. . . .

The Privatization Backlash, The Atlantic, April 23, 2014

This article by Molly Ball highlights the growing outrage over many facets of outsourcing government services by contract to the private sector.  Not explicitly addressed are public-private partnerships (PPPs) in which government and the private sector work together on a single project, but it displays many of the same phenomena. 

Both outsourcing and PPPs have become quite common in Virginia and, closer to home, Fairfax County.  Whether it's the costly giveaway deal with Comstock to develop the Wiehle station area with 2,300 Metrorail parking spaces, the Fairfax Connector, MWAA's management of the Dulles Toll Road, etc., taxpayers run a major risk of unknowingly taking on a significant added tax or other financial burden--and often with poorer performance. 

From personal experience in overseeing large federal contracts, I am very confident of the truth of the central proposition of this article:  There is no real cost saving in outsourcing government services and often the costs are exorbitant.  On the other hand, a government agency can gain access to unusual needed expertise in relatively quick order rather than taking the time to develop the needed expertise internally.  The downside then becomes continuing dependency on outside expertise at great taxpayer expense.

It is not a simple problem.  A Chicago alderman has offered a solution that calls for greater transparency and cost-benefit analysis following Chicago's parking meter debacle.  In Virginia, transparency on PPPs is actually forbidden and truly independent cost-benefit analyses are rarely done.  For example, Supervisor Hudgins was well along in negotiating an affordable housing development PPP to be located at the Reston South Metro parking lot before an outraged public put an end to it.  Obviously, no cost-benefit analysis was done for this proposal nor for the Comstock Wiehle station development scheme. 

Here are some excerpts from the article:

For decades, city and state governments have seen contracting as a cost-saving panacea. But past experience has left some of today's policymakers more skeptical.

A few years ago, Chicago residents accustomed to parking on the street got a rude shock. Parking-meter rates had suddenly gone up as much as fourfold. Some meters jammed and overflowed when they couldn't hold enough change for the new prices. In other areas, new electronic meters had been installed, but many of them didn't give receipts or failed to work entirely. And free parking on Sundays was a thing of the past.

The new meter regime sparked mass outrage. People held protests and threatened to boycott. But there was little recourse: The city had leased its 36,000 meters to a private Morgan Stanley-led consortium in exchange for $1.2 billion in up-front revenue. The length of the lease: 75 years.

If the meter situation seemed like a bad deal for Chicago's parkers, it would soon become clear that it was an even worse one for the city's taxpayers. . .

How did this happen? The meter deal passed the city council just four days after then-Mayor Richard Daley—desperate to fill a recession-caused budget hole—presented it. There were no public hearings, and the aldermen never saw the bid documents. Afterward, some aldermen who voted for it said they wished they'd known more of the details, but it was too late. "We're stuck with it for the next 71 years," Alderman Roderick Sawyer told me recently.

Sawyer, a South Side Democrat who was not in office when the meter deal passed, is trying to ensure similar proposals will get more scrutiny in the future. He has introduced an ordinance that would require more transparency, including public hearings and a comprehensive economic analysis, for any proposed city partnership with a private entity.

"This is just about the process," Sawyer said. "We're not saying all privatization deals are bad. But if we're going to do this, let's be honest with the public and let them know what's going to occur: It's going to save this much money, it's going to cost this many jobs."

Sawyer is not alone. . .

Please read the rest of the article here.

RCA Reston 2020 Materials Used in Meeting with ILVP Vistors, February 15, 2013

This presentation was used by RCA Board Member Terry Maynard in a discussion of citizens' perception of public-private partnerships (PPPs) and its activities in the Reston Master Plan Task Force.

   Reston PPPs and Metro Land Use Presentation to International Visitors, Feb. 15, 2013 by   Terry Maynard

The following tables were used by RCA Board member Tammi Petrine in her discussion about the impact of rising Dulles Toll Road tolls and Restonians and other users. 

   Impacts of Dulles Toll Road Toll Increases--February 15, 2013 by   Terry Maynard

Editorial: Win-lose proposition, Fairfax Times, July 8, 2011

Injecting public-private partnerships into rail discussion a slippery slope

Those who have followed the Dulles rail project over the past decade probably didn’t bat an eye when “public-private partnership” and “defraying rail costs” were mentioned in the same breath by Fairfax County Board of Supervisors Chairwoman Sharon Bulova on June 28.

Bulova (D-At large), while briefing her fellow board members on the progress of negotiations between the rail project’s funding partners, said Fairfax County is being asked to consider soliciting public-private partnerships to help reduce the fast-rising costs of the Dulles Metrorail extension. The partnerships would help pay for all rail-related parking garages in Fairfax County and a couple of rail stations.

Bulova didn’t mention outfitting county staffers with tin cups or lemonade stand recipes, but summer isn’t even half over yet.

Joking aside, what’s become all too clear in recent months is that the Metropolitan Washington Airports Authority is out of both ideas and financial capacity. What’s also clear is that the project’s “funding” partners Fairfax taxpayers, Loudoun taxpayers, and anyone who uses the toll road between now and 2050 can expect to see their rail obligations grow tenfold (emphasis added). . . .

Click here for the rest of this Fairfax Times editorial.  

County seeks public-private partnerships to defray rail-related costs, Fairfax Times, June 28, 2011

Second phase of Dulles Metrorail extension to cost $3.5 billion

by Kali Schumitz, Staff Writer

Fairfax County is being asked to consider soliciting public-private partnerships to pay for parking garages and even station construction to help reduce the costs of the Dulles Metrorail extension. . .

Bulova was asked to get feedback from the (Board of Supervisors) regarding the possible use of public-private partnerships. . .

Some supervisors said they have concerns about allowing for the additional density at the rail stations, which would likely be needed to make a partnership attractive to the private developers.

"It isn’t free,” said Supervisor Michael Frey (R-Sully), noting that new development will require additional county services. "There is huge cost to that, and we’re the ones that have to bear that." . . .

 Click here for the rest of the story.