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Financing Green Infrastructure - Is a Community-Based Public-Private Partnerships (CBP3) Right for You?

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Throughout the United States, communities are struggling to meet the demands of stormwater management requirements.  EPA recognizes the need for new and innovative solutions to finance and manage stormwater runoff, especially in urban areas, to achieve and maintain the water quality goals of the Clean Water Act (CWA).  In order to protect and restore water quality while meeting the challenges of climate adaptation, communities should consider whether a Community-Based Public-Private Partnerships (CBP3) will help achieve their goals when evaluating stormwater financing and infrastructure needs.   

What is a Community-Based Public-Private Partnership (CBP3)?

In other infrastructure sectors, public-private partnerships (P3s) have been found to generally reduce costs, improve quality control, and expedite delivery of services. Local governments around the country are facing significant challenges in financing and constructing stormwater management infrastructure required by federal and state regulations.  P3 models may provide communities with an alternative for the finance, design, construction, and operation and maintenance of green stormwater infrastructure, such as green streets.  By incorporating community revitalization needs, with a focus on green infrastructure for stormwater management, a CBP3 model evolves the standard P3 contractual mechanism into a true partnership that focuses on improving water quality and a community's quality of life. 

A CBP3 is a partnership between a local government and a private entity.  The primary goal of a CBP3 is to provide high quality services in a cost effective way.  The partnership is designed to:

  • provide flexibility 
  • provide access to advanced technology 
  • address dynamic community development trends and goals
  • encourage long-term financial and regulatory commitments for integrating green infrastructure into stormwater management programs.

A CBP3 model is not a one-size fits all approach, but a variety of potential options.  The CBP3 structure selected depends on many factors, such as project complexity, public policy goals, private sector interest, and the potential CBP3’s “value for the money,” also known as a cost advantage.  The desire and ability to transfer various risks from the public sector to the private sector is also a key consideration for determining the most appropriate CBP3 structure. 

Community Based P3 ModelThis model displays the multi levels of stakeholders and involvement within a public and private partnership.  It involves the municipalities and private developers at the front of the relationship and their financing mechanisms to help drive local economies and increase capacities.  

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Why Consider a CBP3?

Communities of all sizes across the country have successfully been using the traditional P3 approach to design, build, and maintain their transportation, solid waste, energy, and drinking water/wastewater infrastructure needs.  A CBP3 includes many features of the traditional P3 model, however, it is geared toward helping communities meet the unique requirements of stormwater management systems.  The CBP3 model invests in green infrastructure approaches that provide for local economic growth and improved quality of life in urban and underserved communities.  CBP3s have the potential to help many communities optimize their limited resources through agreements with private parties to help build and maintain not only stormwater infrastructure needs, but other public infrastructure as well.  

The CBP3 model can leverage public investment with private equity at an estimated rate of 10:1 ($10 dollars of private equity per $1 public dollar) or higher.  The CBP3 model develops a strong, long-term partnership between the municipality and the private equity group, creating shared risk burden and greater accountability, by reinvesting cost savings and revenues to create a pool of funds for future projects.  

Partnerships between the public and private sectors have created a range of strategies to finance, plan, design, construct, operate and maintain public assets and/or deliver services. Partnering with the private sector has been identified as a viable alternative solution that will improve and sustain the ability of local governments to protect and restore our nation’s waters by:

  • creating economic feasibility for stormwater retrofits
  • helping to leverage local government resources
  • fostering the development of cutting edge low impact development (LID) and green infrastructure (GI) strategies and technologies
  • expediting project delivery

In March 2015, one of the first stormwater focused CBP3s (i.e., Clean Water Partnership) was implemented by Prince George's County, Maryland.  To learn more about the Prince George's County CBP3, please visit the Clean Water Partnership page.

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CBP3 Resources

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