Public-private partnerships are being promoted by President Obama, written about by Forbes and the New York Times, and heralded by some as “a lifeline for cities” inundated with fiscal problems and as the way to build our nation’s future (they also attract their fair share of criticism). In P3s, as they’re commonly called, government agencies team with private companies to complete a project, whether it be infrastructure-related, like a highway, or service-based, like an electric utility or parking meter system.
Texas attorneys are paying attention to these increasingly common—and sometimes complex—arrangements, as seen with the recent CLE course “Hot Topics in Public-Private Partnerships,” which was offered at the State Bar of Texas Minority Counsel Program in Austin, Texas, from September 3-5, 2014. Leading the panel was Mary Colchin Johndroe, a partner with Cantey Hanger in Fort Worth, and Mario Menendez, vice president and general counsel to construction company Ferrovial Agroman in the Woodlands. Allen Estes III, of Gordon & Rees, moderated.
Taking an in-depth look at P3s, Johndroe, Menendez, and Estes covered a range of issues, including the trend toward more P3s (approximately $61 billion has gone toward P3 projects in the past 25 years—half of which was spent in just the past five years—and Texas has more P3s than any other state); the legislative history of P3s (33 states have laws authorizing P3s, up from 23 in 2006, and six are considering similar legislation); the differences among P3s and other partnership models; and more. Menendez further explained that projects between the public and private sectors are typically supported financially by the users—such as drivers on toll roads—not by all taxpayers, and that the project owners (typically the private companies) commonly assume 100 percent of the risk.
The panelists discussed additional legal matters concerning P3s, such as relevant Texas codes and regulations, the process of contracting with TxDOT on a P3 agreement, powers of eminent domain, submitting compliant designs, sales and use tax, bonding requirements, and liability limitations.
Cantey Hanger has made a PDF of the “Hot Topics in Public-Private Partnerships” presentation available here: http://www.canteyhanger.com/wp-content/uploads/2014/09/07_Johndroe-Menendez.pdf.