Volume 7, Issue 38 - January 6, 2016
Water technology launches public-private collaborations
Mary Scott Nabers, President/CEO, Strategic Partnerships, Inc.
Drought and hot weather have caused critical water shortages in many states. Leakage, poor distribution infrastructure and theft have exacerbated the problem. But, there is some good news mixed in with the gloom. Water utilities are beginning to use smart meter technology to address these challenges, and results are promising. In fact, smart water technology has the potential of saving $27.5 billion per year globally.

Earlier this month, the White House released a report called "Water Resource Challenges and Opportunities for Water Technology Innovation."

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Downtown San Diego booming with new development
Amid $6.4 billion of construction, downtown seeing public, private investment
Photo of Horton Plaza Park by bcgrote licensed under CC BY 2.0.
Downtown San Diego is positively jumping with new investment and development. More than 60 projects are currently under construction or soon could be. Included in all of this tumult are new residential towers that brought almost 1,250 new apartment units to the city in 2015, with more than 8,000 further units in the offing.

The private development may be leading the way in the $6.4 billion worth of construction and development in the city's downtown area, but public entities aren't lagging too far behind. Nearing completion are both the $555.5 million, 22-story San Diego Central Courthouse and the $17.7 million rehabilitation of Horton Plaza Park. As well, a no-longer-in-use city library that is more than 60 years old is being prepared for renovation and repurposing. A request for proposals seeking developers is imminent.

The new state courthouse has been years in the making, and the 704,000-square-foot high-rise with its 71 courtrooms is scheduled to be completed by the end of this year and open for service early in 2017. It will replace San Diego's county courthouse, built in 1961, which was deemed too deteriorated for renovation. It is the largest project in California's $3 billion effort to replace or upgrade 25 judicial facilities, funded by an increase in court filing fees. The state, which took over county court operations in 2002, oversees 20 million square feet in more than 500 buildings.

The renovation of Horton Plaza Park is the result of a public-private partnership (P3) involving the city of San Diego, its nonprofit development arm called Civic San Diego and the owner of the adjacent shopping mall. The park's rehabilitation was scheduled for completion in September 2015, but inclement weather and other issues have pushed that back to March.

The project involves restoring the park and its central fountain to their original 1910 look, adding an amphitheater and building three pavilions that will host retail and restaurant offerings. The developer that owns the shopping mall also will manage and operate the renovated park once it opens. The shopping center, too, is due for a reboot, which could range from cosmetic renovations to a complete tear-down and redevelopment. Those plans will be announced later this year.

In Alaska's Railbelt, six utilities to become one
More than $900 million in infrastructure upgrades needed to bring utility up to par
Alaska's Railbelt stretches more than 500 miles from the Kenai Penisula in the south up to Fairbanks. The region gets its name from the fact that it contains the areas of the state accessible by the railroad. It is home to about 70 percent of Alaska's population.

Despite that fact, the region uses less electricity than many small municipal utilities in the rest of the country. That electricity, though, is delivered by six separate utilities, due to the sheer geographic size of the region. Those utilities decided in 2011 to form one entity, the Alaska Railbelt Cooperative Transmission and Energy Company (ARCTEC). The combination is designed to bring together the region's aging transmission infrastructure and the disparate management of the utilities. As well, the new company and upgraded infrastructure could spur investment and development and improve the reliability of electricity transmission.

Just before Christmas, ARCTEC delivered to state regulators a draft plan outlining how the combined utility will handle the more than $900 million worth of infrastructure upgrades needed to serve the combined population. The report suggested the utilities could submit a certificate of public convenience and necessity application (the utility's business license) to the Regulatory Commission of Alaska (RCA) by the fall of 2016. The combined utility could then be in operation by the spring of the following year. The expected costs of the infrastructure upgrades were determined by a 2013 report by the Alaska Energy Authority (AEA), which currently is updating that study as well.

Those improvement projects have been delayed because the region's size and small customer base make it difficult to justify financially for smaller utilities. The hope is that a merged entity will have the customer base and financial backing to make those repairs. The AEA study estimated that a unified utility could produce savings of between $80 million and $240 million annually.

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Indianapolis gearing up for bus rapid transit system
The Indianapolis City-County Council is preparing the ground for the city's new bus rapid transit system ... literally. The council took action last month to restrict parking along parts of a main downtown thoroughfare, a move that will pave the way for a new bus system called the Red Line. Its first phase will construct a 13-mile route, cost $100 million to build and run from 66th Street in the Broad Ripple district to the University of Indianapolis at Hanna Avenue. The city's public transportation agency, IndyGo, applied for a $75 million federal "Small Starts" grant in September 2015 and will learn whether it receives the grant this spring. If the grant is approved, construction could begin in the spring of 2017, and that first phase of the Red Line would open in 2018. The full plan is called Indy Connect and calls for five bus lines throughout the city, of which the Red Line is just one. The $1 billion plan has not been funded in full, and so its timetable remains uncertain. The eventual system will include all-electric buses that will stop at platforms every half mile and run at 10-minute intervals during peak times. They will travel in lanes reserved exclusively for buses.
Historic railroad trestle to be converted to walkway
Once-heavy train traffic through Anderson, Ind., has dwindled to nothing over the years, and the city's landmark iron rail bridge has deteriorated ever since. The span over the White River is now set to undergo a renovation and restoration project to connect the city's trail system on either side of the river. The Indiana Department of Transportation will conduct the design work to convert the railroad trestle to a pedestrian bridge at a cost of $148,000. The city will pay 20 percent of those costs, with the federal government covering the remainder. No timetable has been determined for the construction of the project, but the design phase should be completed by the end of 2016. This will be the third pedestrian bridge the city has built over the White River in the past 10 years. The city will incorporate the trail system with the other bridges as well.
New West Baltimore rail tunnel could be on its way
The Federal Railroad Administration is working with the Maryland Department of Transportation on an environmental impact study for a potential new rail tunnel under West Baltimore. The project would replace a 142-year-old, two-track, 1.4-mile-long tunnel that is one of the oldest along Amtrak's busy Northeast Corridor. More than 21,000 passengers travel it daily on 85 Amtrak trains and 57 local commuter trains. Two freight trains also access the tunnel every day. The U.S. government has dedicated $60 million for preliminary design and the environmental review, but the construction is expected to cost between $3.7 billion and $4.2 billion. Currently, that funding has not yet been approved, according to a Federal Rail Administration spokesman. State and federal officials are accepting public comment on the project before finalizing the environmental study. Two open hearings will be held Jan. 23 and 28, and written comments may be submitted until Feb. 5.
Estes Park community center construction on track
The residents of Estes Park, Colo., will soon be able to enjoy a new rec center after voting in November to approve two bond packages that will provide most of the funding to build and operate the proposed community recreation center. The first will provide the center's annual operational funding, while the second bond measure allocated up to $19.83 million for construction of the facility, which is estimated to cost about $22 million to build, furnish and equip. The facility will include space for child care and youth sports, year-round active recreation, fitness and wellness services, a library, an indoor community garden, an indoor walking/running track and meeting and performing arts spaces. It will be built on the site of a former elementary school that has been torn down. An adjacent aquatics center will be renovated in conjunction with the construction of the community center.
Reading to reopen bidding for $30M treatment plant
Reading, Penn., Managing Director Carole B. Snyder (pictured) last month rejected a second round of proposals to rebuild the city's sewage treatment plant. Each of the bids came in too high for the city's budget, and so Snyder said that the city would rebid the project early in 2016. This will be the third set of bids the city will have requested for the plant's construction. Consultants hired by the city had set $109 million as the maximum costs for the project, but the proposals in the second round totaled $143 million. Just one firm bid for the construction portion of the project, however. Snyder has said the new bid request will be designed to engender more bidders and cheaper prices. The rebidding process has its costs, as the city is operating under a federal consent decree to rebuild the plant by February 2018. And so time is of the essence, said Snyder.
West Fargo yet to determine location of new schools
In the November 2015 election, voters in West Fargo, N.D., approved a $98.1 million bond referendum that included money for two new elementary schools, one south of Interstate 94 and one north. West Fargo School District leaders now say that it is possible that the northside school could end up south of the interstate. The district already has purchased land for the southside elementary school, and construction will start in the spring. It will now need to identify the land on which to build the second school, as well as for a two-sheet ice hockey facility and a transportation building that also were included in the bond package. The district does own two pieces of land that could be used, but officials are uncertain that the properties could contain the transportation facility, hockey arena and elementary school. "It's a little like a jigsaw puzzle. We have negotiations and explorations going on all three of those fronts," Superintendent David Flowers said. "We have to be discussing them all at once, because we have just so much money to spend."
MSBA to consider 2016 school construction projects
The Massachusetts School Building Authority (MSBA) will consider whether or not to approve funding for more than two dozen school construction projects at its meeting Jan. 27. Almost 100 schools applied for 2016 MSBA funding, and MSBA staff recommended 26 of the projects that were deemed the most "needy and urgent" to the agency's Board of Directors. The board members will announce their decisions at the end of the month. Among the candidates are the $60 million Maria Hastings Elementary School project, a 30-classroom elementary school in Lexington. That project has two deadlines. If it were to receive MSBA funding, it would open in 2019. If not, the project could be completed in 2018. Another project under consideration by the MSBA is the rebuilding of Arlington High School. In both of these projects, MSBA funding would not cover the full costs but, rather, defray some of the costs to the cities and school districts. If approved, the projects would then enter into a 270-day "Eligibility Period," during which town officials would need to refine the construction projects.
Leesburg moves forward with plans to build $2M ramp
The Leesburg International Airport in Lake County, Fla., will be home to a new $2.1 million seaplane ramp that reaches into Lake Harris. The Leesburg City Commission is moving forward with plans to construct the ramp by March 2017. The project would fulfill the city's obligations according to the terms of an agreement city officials reached with a private company that opened a location in the Central Florida city in 2013. The company agreed to open the Leesburg location if the city could build the ramp, and now the city council is acting on that. The city's budget will provide just over $1 million in airport funds for the project, and the Florida Department of Transportation (FDOT) has committed to cover at least half of the project's costs and potentially as much as 80 percent. But the state can only pay for the parts of the ramp on the airport's property, not the portion that extends into the lake, nor for the wetland mitigation and dredging that are also part of the project.
Chubbuck seeks approval for $8.5 million project
Members of the Chubbuck, Idaho, City Council last month approved a move to request judicial confirmation for an $8.5 million bond issue for a major water project. The project would drill a new city well, improve existing wells and install a new 1.5 million gallon underground storage tank. The judicial confirmation process entails a request to a district court to authorize cities to issue bonds rather than scheduling a bond election to seek approval from voters. The court can only approve water and sewer projects deemed as "ordinary and necessary expenses." Chubbuck Mayor Kevin England (pictured) said the city obtains about 45 percent of its water supply from one well, which he said was inadvisable. "This is to make sure we can produce the water we need now," England said of the proposed $8.5 million water project. Public Works Director Rodney Burch said the city has identified a location for the new well that would produce an additional 2,200 gallons per minute of water. A test well will be drilled shortly, and if judicial confirmation is secured, the new well and storage tank could be finished by 2017.
15 Iowa water projects receive state funding
The Iowa Finance Authority and the Iowa Department of Natural Resources have announced $20.7 million in funding through the State Revolving Fund. The funding will come in the form of low-cost loans and enable 15 water quality projects. The city of Spencer will receive the largest portion of the money. Spencer Municipal Utilities will oversee an improvement project at the city's water treatment plant. The drinking water project received $14.1 million in loans and is scheduled to be completed in early 2017. Of the other projects, just one received funding in excess of $1 million. The city of Fort Madison is improving its sewer treatment facility and received $1.98 million toward that project's costs.

News about public-private partnerships (P3s)

Maryland narrows candidate pool for Purple Line
The state of Maryland may be getting closer to deciding who will build the Purple Line, should it go forward with the light-rail line. Four teams bidding on the concession submitted their proposals last month, and the state could make its choice of a partner by February. But Maryland Secretary of Transportation Pete Rahn has said that it is still possible none of the bids will meet the state's criteria to be selected. "We are hoping that is not the case. We won't know that until a very thorough evaluation of these proposals," said Rahn. The project is to build a 16-mile, 21-station rail line from Bethesda to New Carrollton. If a partner is selected, the chosen firm would obtain financing through low-interest federal loans to cover its contribution to the project, which is thought to be as much as $700 million. If the public-private partnership (P3) financing mechanism is indeed chosen, the state will pay the private operator for 35 years to cover the costs of operations and long-term debt. Construction on the project could begin in 2016 and is scheduled to take about five years.
Castle Rock pursuing P3 to build artificial snow park
People travel from all over the country to go skiing in Colorado, but the city of Castle Rock isn't content with its limited time frame for tourism business. Toward the end of 2015, the town signed a memorandum of understanding (MOU) with a private firm that specializes in public-private partnerships (P3) that may lead to year-round skiing. The snow park would feature an artificial surface made of an engineered polymer surface called Snowflex and be situated on 9.5 acres within a municipal park. The private partner would pay the entirety of the $28 million costs, with the city contributing a $2.7 million loan to cover the costs of additional parking lots, utility extensions and additional lighting that would benefit the rest of the park as well. In exchange, the city would lease the facility to the private company for up to 25 years with two 10-year renewal options. The MOU is not an agreement to build the park, but rather an affirmation that the two sides are serious about pursuing such an agreement.
Administrator recommends P3 for convention center
The Los Angeles City Council is considering possibilities for financing an expansion of the city's convention center. Until recently, it was expected to be procured in the traditional manner, but City Administrative Officer Miguel Santana (pictured) has issued a report recommending the city pursue a public-private partnership (P3) to finance the project's construction. If the city were to decide to take that route, the private partner would design, build, finance, operate and maintain the convention center, in addition to other businesses and even residential homes on the city land. "Under this model, what it allows the city to do is really share the risk of building a convention center with a third party," Santana said. The city council is likely to decide the procurement method it intends to pursue early in 2016.
Arizona's South Mountain Freeway has its developer
The Arizona Department of Transportation (ADOT) has announced that officials have chosen a developer to construct the state's largest-ever highway project as a public-private partnership (P3). The selected firm will design, build and - for 30 years - maintain the highway. The Loop 202/South Mountain Freeway project is a 22-mile highway that will serve as the final portion of the Loop 202 and Loop 101 system. It will be a direct link between the West Valley and East Valley and allow traffic to bypass downtown Phoenix. The $1.75 billion project dates back to 2013, when ADOT received an unsolicited proposal for the project and subsequently began to seek competing proposals. Construction is set to begin in the summer of 2016, and the highway is expected to open by early 2020. It will include four lanes - including one high-occupancy vehicle (HOV) lane - in each direction. No toll lanes are expected to be included in the project. ADOT officials have said this is the first highway project for which the state has used a P3 and that they expect to save up to $300 million due to the procurement agreement.
Developer to build solar arrays on military bases
A group of private firms has agreed with the United States Air Force and the United States Navy to develop renewable energy facilities at three military bases along the Gulf Coast of Florida. A 37-year agreement allows the consortium to design, build, operate and maintain a large-scale photovoltaic solar array on 240 acres of Eglin Air Force Base. It also will upgrade the base's energy infrastructure and make payments to Eglin in exchange for use of the land. It will store more than 60,000 megawatt hours of electricity annually off-site and sell it to retail customers. In a separate agreement, the consortium also will build two other arrays on property owned by the U.S. Navy, at the Pensacola and Whiting Field naval air stations. The three projects will be the largest solar arrays in the state and are expected to provide power to a total of 18,000 residential customers. They are planned to be in service by December 2016.
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