Dade Looking For Expert Advisers In Preparation For More Privatesector Partnerships
Written by Risa Polansky on March 12, 2009
By Risa Polansky
Anticipating teaming with the private sector to complete county projects as budgets grow tighter, Miami-Dade County is corralling expert advisers now.
Commissioners voted last week to establish a pool of firms with financial expertise in structuring public-private partnerships to create easy access to advisers as such projects get rolling locally.
The newly approved legislation allows the administration $2.5 million toward hiring the experts over the next three years — "if and when we ever need it," County Manager George Burgess said at the commission meeting last week.
"We may never. But I suspect that as time goes on, we’re going to look at this kind of an approach as an alternative way to design, to build and to finance different kinds of capital projects," he said. "It’s a different way to access equity in partnering with the private sector."
Access to equity is becoming more crucial as the economy weakens.
Miami-Dade officials expect to have to cut at least another $200 million from the county budget after doing the same the past two years.
Resources are also becoming scarcer at the state and federal levels — historically major contributors to local projects.
As a partial solution, US Rep. John Mica of Central Florida, ranking member of the House Transportation and Infrastructure Committee, encouraged public-private partnerships in discussing local transit plans with commissioners this month.
To prepare for partnerships, firms in the county pool could be contracted to help structure deals, prepare financial models, assist the county in soliciting and selecting private partners and provide other related services, documents say.
Commissioners initially were wary of the program’s dollar amount — $2.5 million — and some questioned whether the county needs extensive outside help in structuring partnerships with private companies.
"The wheel has been invented," José "Pepe" Diaz said, encouraging administrators to model contracts here after partnerships in other communities.
Mr. Burgess stressed the need for experts to help analyze often-complicated deals.
An example: "Boy, I hate to use the "t-word’," he said, but a planned $1 billion-plus tunnel to the Port of Miami is structured now as a public-private partnership involving several private companies.
Trouble with the selected equity partner caused the state to shelve the project — a sore subject with local officials — though there’s a chance now the tunnel could be revived.
Regardless, Mr. Burgess said calling the project complex is an "understatement," and predicted similarly complicated endeavors may require outside expertise.
Commissioner Katy Sorenson agreed, urging colleagues to OK the expert pool so the county is ready for the economic stimulus dollars coming down the pike.
Potential contenders for public-private partnerships on the books now include a planned Krome Detention Center, as well as transit and water and sewer projects, Mr. Burgess said.
"There are a number of different projects for which we believe this could be a good approach to at least explore to see if the interest is there, the economies are there, attractive ways to secure financing are there," he said.
He stressed that the first step is creating access to experts.
Commissioner Rebeca Sosa took issue with the four firms selected as the initial members of the pool.
Only one — HDR Engineering — is a local vendor.
Of the others, Infrastructure Management Group is Maryland-based, Scott Balice Strategies is based in Illinois and Morgan Stanley & Co. is a New York company.
"We need to include now more than ever the small business enterprise selection factor into the contracts that we have, and we need to look into the local preference in a different fashion than we are," Ms. Sosa said. If not, "we are failing our community" in allowing tax dollars to leave the county.
Mr. Burgess assured he plans to increase the pool "so we maximize the competition among experts."
Procurement Management Director Miriam Singer noted that the county’s local preference factor kicks in when issuing actual work orders. The call for companies to join the pool is considered a pre-qualification.
Should the county choose to dip into the pool, it would competitively bid a contract.
The original legislation gave the administration freedom to hire the companies for up to $1 million without commission approval.
Several protested, wanting to keep an eye on consultant spending.
At Carlos Gimenez’s suggestion, the commission amended the item to ensure the administration reports in to share who it hired for which projects and for how much money.
That way, Mr. Gimenez said, if the pool is "abused in the future, we can always rescind this… I think this is a reasonable thing as long as it’s not over abused."
Mr. Burgess assured commissioners that officials have no plans to spend exorbitantly on outside help.
"The reason we are pursuing the public-private partnerships in the first place is because we think this might be a creative alternative to more affordably access capital and get projects done."