1. Virginia’s PPEA and Water and Wastewater Partnerships
The Future of Water Partnerships in Virginia
NCPPP Water Institute
Preston Bryant Christopher D. Lloyd June 9, 2010

2. Presentation Overview
Legislative History of Public Private Partnerships
How the PPEA Works
Implementation of the PPEA
Recent Project Examples
Lessons Learned and Opportunities

3. PPEA Overview What is it?
- An alternative procurement tool that allows public entities to more efficiently develop infrastructure and achieve better value for the taxpayer
- Vehicle to use design-build practices
What it is NOT?
- A panacea that resolves all procurement issues
- A way to get something for nothing
- Privatization

4. Why Use PPP Alternative Procurement?
Faster, better, cheaper (sometimes) through achieving benefits of design-build procurement
Single point of responsibility
Shift of risk away from public sector
Distances rate making/price setting decisions from the politics
Lack of faith in the public sector
Easier framework for inter-governmental and multi-jurisdictional collaboration
Ability to assemble “dream team”

5. PPEA: Process Governing body adopts PPEA guidelines
Public entity solicits for proposals or accepts unsolicited proposals
Minimum of 45 day open competition period for unsolicited proposals
FOIA protections for confidential information are negotiated
Conceptual proposal outlines team qualifications, proposed cost, proposed scope and public benefits
Public entity may levy a proposal review fee on both solicited (rare) and unsolicited proposals (always) to cover project review costs

6. PPEA: Process
All competing proposals are reviewed, followed by a downselect
Detailed proposals are requested – often relies on recommendations of outside/inside advisors
Detailed proposals start to lock in project scope, costs, schedule
Leads to an interim or comprehensive agreement with one firm
Significant requirements for public notification and hearings

7. Evolution of Virginia’s PPEA
Creation of interim agreement concept
Increased public input and transparency
Development of “best practices criteria”
Creation of legislative oversight panel
Expansion to technology projects and services

8. PPEA Implementation Over 100 projects statewide
Over 50 jurisdictions have adopted PPEA guidelines
Project sizes from $800,000 to $1.5 billion
Ideal project size no less than $5 million
More frequent use in small-to-mid-sized communities
Growing interest in water and wastewater projects

9. PPEA for Water and Wastewater
Growing interest is the result of several factors:
Increased regulation
Technological advances
Diversity of projects
Growing acceptance among major water and wastewater authorities
Growing acceptance among regulatory and funding agencies

10. PPEA: Project Examples - Utilities
Bedford County Public Service Authority (completed)
Prince William Service Authority (under construction)
City of Fredericksburg WWTP (completed)
Southampton County WWTP (under construction)
Augusta County WWTP – Stuart’s Draft (under construction)
Virginia Beach pump stations (rejected)
Northampton County/Cape Charles (rejected as PPEA)
Prince Edward County (pending)
Petersburg pump stations (pending)
Hampton Roads Sanitation District (under review)
Caroline County (pending)

11. PPEA: Pros Many of the same benefits as design-build
PPEA has a some “cachet” with state regulatory and funding bodies
No state approvals of procurement process necessary
Public entity retains right to reject, modify, expand, or contract proposals at any time
Project review costs can be covered by proposers
Staff augmentation and single point responsibility

12. PPEA: Cons
Project scope and cost may not be defined until late in the negotiation process
Learning curve for public officials and public
Suspicions about “competitive negotiations”
Did I get the best possible price?
Negotiations can be lengthy and complex
Potential issues with USDA funding

13. Lessons Learned PPEA should not be used as a “fishing expedition”
PPEA should not proceed unless there is both board and staff buy in
Public and other stakeholders must be included in the process
Promises of “free money” never materialize
PPEA is not right for every project

14. Opportunities Use of PPEA for O&M management services contracts
Development of new capacity to address economic development needs or population growth
Greater penetration into authority market
Leveraging of private capital

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