A new way of doing P3s in Illinois.

• Author: Nichols, Chrissy Mancini

The State of Illinois, and particularly the Chicago region, is facing mounting modernization needs. In 2013, the American Society of Civil Engineers gave infrastructure in Illinois a grade of C- and estimated the total cost of urgently needed repairs at $100 billion--five times the state's total fiscal 2015 capital budget. Dramatic examples such as buckling floors at the Joliet Courthouse and a crumbling overpass at Belmont and Western avenues in Chicago underscore the consequences of allowing infrastructure investment to lapse.

Investing in infrastructure is critical, not only to maintain safe and reliable roads, public transit, water mains, and sewer lines, but also to expand the economy. Growth depends on the pipes under the streets not leaking as they carry clean water. Downtown areas need to be revitalized to attract and retain new businesses and reduce traffic and commute times. Repairs and new capital investments are not an either/or proposition--pursuing both aggressively and transparently is the ticket to economic growth.

EXPLORING NEW OPTIONS

From city and state transportation agencies to municipalities, governments across the country are working to identify better and faster ways to serve residents by delivering infrastructure projects. The playing field is far from level. While some governments have the expertise to wade into new and complex financial transactions, many others are fiscally stressed and/or are still getting up to speed.

In 2014, the Metropolitan Planning Council (MPC) co-hosted a forum with the Metropolitan Mayors Caucus called "Breaking New Ground: Innovative Financing Strategies for Municipal Projects." Designed to provide information about financing municipal infrastructure with private investment, the forum brought together municipal leaders and investment experts to explore an important pathway to funding: collaboration.

THE P3 PATH

MPC introduced municipalities to the public-private partnership (P3) option, soliciting community projects before the event to use as potential case studies during the forum. Most of the submissions were for public buildings or water and sewer infrastructure--projects with price tags between $350,000 and $5 million. MPC's financial experts felt that larger projects, more on the scale of the $3 billion Elgin O'Hare Western Bypass or the privatization of Midway Airport, make more sense for P3s.

The forum pinpointed a communication gap between the private and public sectors and the opportunity for communities to aggregate common needs that may otherwise be too small to implement via nontraditional delivery. Communities that wish to pursue a P3 should be aware that differences in communication and expertise are key barriers to tapping private investment at the local level, creating an increased risk of transaction failures. Collaborative thinking and communication is best accomplished through coordination at a regional scale. To facilitate this municipal...