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5 Introduction 1.1 Purpose of the Guidebook Public transit agencies across the United States are laying the tracks of innovation by forming partnerships with the private sector to improve existing services and more efficiently deliver new services and facilities. This guidebook aims to broaden the literature on small- and medium- sized public-private partnerships (P3s) by profiling successful initiatives across the country, documenting lessons learned, and building best practices for other agencies. Transit agencies and the transportation industry are generally familiar with large-scale P3 capital projects that have been executed across the country due to the publicity and existing research and literature reviews. However, there are numerous small- and medium-sized P3 initiatives being imple- mented by transit agencies of all sizes. This guidebook and accompanying checklist are designed to illustrate the benefits of small- and medium-sized P3 initiatives. Throughout this guidebook, examples demonstrate how public transit agencies can benefit from small- to medium-sized P3s, ranging from complex partnerships to more simple arrange- ments. Examples also highlight the benefits as reported directly by transit agencies themselvesâ including cost savings, accelerated delivery, community relationships, system enhancements, and customer satisfactionâas well as the challenges encountered and lessons learned. The findings of the research have been applied to produce a checklist that can be used as a tool for identifying, evaluating, and screening opportunities for small- and medium-sized P3 initia- tives. The checklist applies the lessons learned by public transit agencies to best prepare other agencies to pursue P3s. This guidebook compiles existing research with findings from a case study review into a single resource for transit agencies on planning and executing P3s. This research is intended to better equip transit agencies to evaluate whether a P3 is the right approach for the tran- sit agency to deliver a particular project, and if so, to develop a plan to deliver that project through a P3. 1.1.1 Benefits to the Transit Agency In an environment of limited resources and expanding needs, transit agencies are seeking innovative ways to do more with less, and as successful P3s are implemented across the country, the benefits to the transit agency are becoming more evident. With the support of private sector partners, transit agencies may benefit from: ⢠An accelerated delivery process, ⢠Up-front private investment to finance projects, ⢠Construction cost savings, ⢠Efficiencies in alternative project delivery and project management strategies, C h a p t e r 1
6 public transportation Guidebook for Small- and Medium-Sized public-private partnerships (p3s) ⢠On-time or accelerated project completion, ⢠O&M cost savings, ⢠Lifecycle cost savings from improved asset management, ⢠Operational improvements from introduction of innovative technology, and ⢠Enhanced revenue generation form leasing and management of real property. Overall, private sector involvement in small- and medium-sized projects can be advantageous to transit agencies by providing the agencies with enhanced ability to deliver and operate proj- ects more efficiently, at lower cost, and with reduced risk. 1.1.2 Understanding the Guidebook This guidebook defines a P3 as a contractual agreement formed between a public transit agency and a private sector entity that provides a service to the transit agency and transfers some level of risk associated with the activities of the transit agency to the private sector. This definition takes into account both the scope of services and degree of risk transferred to a private sector partner. The guidebook provides a comprehensive summary of P3 options available to transit agencies and introduces an evaluation framework for identifying small- and medium-sized P3 opportu- nities. The guidebook summarizes existing research and documents case study examples, best practices, common barriers to implementation, and mitigating strategies to overcome these barriers. The accompanying checklist is a supplemental tool for transit agencies to use when identifying and screening P3 options. 1.2 P3 Project Screening Checklist 1.2.1 Purpose The P3 Project Screening Checklist is an interactive, dynamic Excel tool designed to sup- port transit agencies in assessing the appropriateness of delivering a transportation project as a P3. The tool provides a preliminary, qualitative screening process that highlights key criteria relevant to assessing the viability of delivering the project through a P3. The checklist includes a series of evaluation questions to define and evaluate the potential P3 project, with follow-up questions to document the details of the proposed project/partnership. 1.2.2 Uses The checklist is intended to be used at various points during project development in order to keep project sponsors aware of how the project dynamics have evolved. The checklist is not designed to produce an overall conclusion on whether to pursue a project as a P3. Rather, it provides users with an overall evaluation of the P3 initiative based on the objectives of public transportation. Transit agencies can then use the checklist to determine whether a potential P3 project will provide value. 1.3 Research Methodology The research design included a comprehensive literature review and case studies of eight small- and medium-sized P3 initiatives. 1.3.1 Literature Review The literature review compiles existing research on small- and medium-sized P3s into a single resource for transit agencies. This review covers a broad range of publication types and sources,
Introduction 7 including national reports from the TRB, APTA, and FTA, as well as academic papers, news articles, transit agency reports on P3s, and practitionersâ expertise. 1.3.2 Case Studies The case studies, as well as two vignettes, capture the current state-of-the-practice in the public transportation industry by reviewing eight ongoing or recently completed small- and medium-sized P3s. Examples represent a broad cross section of P3s undertaken by transit agen- cies and reflect many sizes and geographies, shown in Figure 1. Findings from the literature review and the case studies are documented in this guidebook for transit agencies to use when considering, identifying, screening, planning, implementing, and managing small- and medium-sized P3 initiatives. 1.4 Organization of the Guidebook The remaining chapters of this guidebook address the following topics. Chapter 2 defines P3s and presents a comprehensive list of the five primary categories of small- and medium- sized P3 options available to transit agencies. Each P3 category includes subset categories Figure 1. Case study examples by size and location of transit agency.
8 public transportation Guidebook for Small- and Medium-Sized public-private partnerships (p3s) that detail the P3 option, with examples from across the country. The five primary catego- ries are: ⢠Capital improvements, ⢠O&M, ⢠Real estate, ⢠Marketing agreements, and ⢠Innovative technology. Additionally, Chapter 2 introduces an evaluation framework for transit agencies to identify small- and medium-sized P3s. Chapter 3 profiles eight case studies plus two additional vignettes of ongoing or recently completed small- and medium-sized P3 initiatives. Chapter 4 addresses common barriers and mitigation strategies for small- and medium-sized P3s, which can be addressed through use of the checklist to evaluate and execute a P3. Chapter 5 presents best practices for transit agencies on how to identify, screen, plan, implement, and manage small- and medium-sized P3 initiatives. The best practices have been derived from interviews with both public and private partners during case study interviews. In addition to best practices, the chap- ter also covers lessons learned and mitigation strategies for future projects. Chapter 6 provides research conclusions and further suggestions. The P3 Project Screening Checklist applies the findings of the guidebook to provide a tool to prepare other transit agencies to pursue P3s. The checklist is in Microsoft Excel format, allowing the user to interactively approach the execution of a P3.
