Assessing the effectiveness of the P3 model for storm water management
In its 2013 Report Card for America’s Infrastructure, the American Society of Civil Engineers gave U.S. water infrastructure a barely passing “D” grade. The report concluded that America’s water infrastructure systems were an average of 50 to 100 years old and would take at least $1 trillion to update or replace.
One critical component of the nation’s water infrastructure is storm water management, which impacts water quality and local flooding. While water quality has increased markedly as a result of the U.S. Environmental Protection Agency’s (EPA) Clean Water Act, one area of growing concern is pollution and flooding from storm water runoff. In order to address this issue, the EPA currently mandates that urban municipalities develop storm water programs to address storm water runoff through the National Pollutant Discharge Elimination System permit program. Effectively upgraded and maintained storm water systems are designed to capture the first inch of rainfall or snowmelt, which has the highest pollution content, and filter it before it winds up in sewer systems and waterways. In addition to reducing pollution, proper storm water management also reduces local flooding, which saves residents and businesses millions of dollars per year in repairs and lost revenue. While there is a genuine desire by local governments to address their storm water challenges and implement more effective green infrastructure practices, state and federal financing is limited and municipalities are further hindered by traditional procurement and implementation practices that add costs and months to project timelines.
Facing dwindling public resources and the high cost of public implementation, local governments across the nation are searching for alternative, more affordable approaches that reduce the overall cost, expedite the rate of implementation, create local economic benefits and provide access to alternative funding sources. They seek solutions that not only can upgrade or replace their aging water infrastructure systems with efficient storm water devices in the short term, but also ensure the long-term operation and maintenance of those upgrades for the full lifecycle of the storm water infrastructure. One solution is the EPA’s Community-Based Public-Private Partnership (CBP3) approach, which was developed based on the model successfully used for more than a decade in on-post military communities across the country.
A Proven Alternative
This advancement of the public-private partnership (P3) for storm water was born out of the Military Housing Privatization Initiative (MHPI). In 1996, MHPI was enacted, allowing an innovative and highly effective P3 model to develop, maintain and manage 67 communities through long-term relationships. The military turned to the private sector to solve its 20-year, $16 billion backlog—where more than 50% of the housing inventory was rated as substandard. The partnership model cleared the backlog 20 times faster and improved the quality of on-post living for service members and their families.
The management of these communities includes the development and adherence of storm water management plans. It was through discussions with state and federal environmental agencies that a next-generation P3 model was developed.
Prince George’s County, Md., estimates that the cost to retrofit the 15,000 impervious acres required by its regulatory permit is $1.2 billion. Seeking a solution that could reduce costs, meet regulatory timelines and be implemented in a manner that could create a local economic benefit, the county adopted the CBP3 model. Designed to meet the urban regulatory requirements for storm water management in the U.S., the county has committed to investing $100 million for an initial pilot. This funding enables the retrofit of 2,000 acres over a three-year period, as well as the long-term maintenance of those assets over the life of the 30-year agreement.
Unlike traditional procurement, where each of the thousands of individual storm water projects must go through a time-consuming and fragmented design, bid and build process, this approach aggregates the storm water projects into an integrated program that streamlines the planning, engineering, design, construction and maintenance activities to improve both the affordability and speed of implementation. The partnership is designed to ensure county leadership retains oversight and approvals of project prioritization. In addition, surety of execution is assured in part by the compensation structure. Private sector efficiencies result in more retrofitted acres in a shorter time for less money—all while supporting the county’s Jobs First initiative for job creation by working with local businesses to implement and maintain retrofits.
Prince George’s County is an example of turning a storm water mandate into an opportunity. The benefits for Prince George’s County are applicable to many local governments:
- Partnerships are structured so that decisions are based on aligned goals and outcomes between both the public and private sector.
- Full life cycle asset management and maintenance ensures resilient facilities and infrastructure.
- An aggregated solution addresses the entire challenge at scale, resulting in reduced
- implementation costs.
- The private partner is accountable for ensuring project success, while the public partner retains oversight and governance.
- Performance-based fees ensure transparency and commitment to long-term project success.
As a country, we are making progress in understanding the importance of addressing our burgeoning storm water challenges, but a call to action for more “actual implementation of work” versus “analysis” needs to be done, and the national P3 model for storm water management offers a viable and efficient solution for communities to get more work started and completed faster.