As Funding Dwindles, So May Public Disclosure

Oct 15, 2012

As state and local governments deal with bigger deficits and less appetite for big spending, they’re asking the private sector to get more involved in construction projects. But as WNPR’s Neena Satija reports, that could mean a less open process.

They’re called P3s, or public-private partnerships. In a P3, a public agency gets help with financing and design from private companies. They’ve been used in states like Virginia, Florida, and Texas for many years, and Connecticut is just starting to dabble in them. But concerns about protecting trade secrets and competitiveness have made some people nervous about the trend. Connecticut’s plan to use a P3 at Stamford’s train station is one example. 

“This is a very different problem and a very different solution," says Jim Redeker, commissioner of the state's Department of Transportation, which owns and operates the station.

The DOT wants to replace an aging parking garage and build more parking spaces at the station. Instead of designing the new parking deck itself, the agency asked for private developers to do it, and to suggest a possible mix of residential, office, and retail space nearby. But the names of the developers and the proposals they submit will be secret until the state picks a winner. The reason, Redeker says, is because developers are coming up with expensive and labor-intensive plans, and they’re afraid of losing their competitive advantage.

That doesn’t sit well with many commuters, state legislators, and even Stamford officials, who feel left out of the loop. But the state tried to do this in a public process a few years ago, Redeker said.

Here’s what happened, he says: “Nobody participated.”

That’s a familiar line to Frosty Landon, former editor of the Roanoke Times and founder of the non-profit Virginia Council on Open Government. While Connecticut passed some of its first legislation officially allowing P3s just last year, Virginia’s had P3s on the books for more than a decade. Landon and his colleagues had trouble getting information about contracts for big school or transportation construction projects until after they were awarded.

“It was a hurdle that we could never really get past, because those who argued for the partnerships insisted that there could only be confidentiality in the earlier stages, or there wouldn’t be bidders," Landon recalls.

On the other hand, Landon says, there wasn’t as much controversy over these projects as he expected. And maybe that’s telling, given the growing popularity of P3s. Five years ago, 21 states allowed P3s for transportation projects. Today that number is 34 and it’s growing.

“We may be somewhat at the tip of the iceberg in this area," says Colleen Murphy, executive director of Connecticut’s Freedom of Information commission. Murphy says that the concerns over confidentiality for private companies came to a height for some Connecticut lawmakers in 2007, when the legislature allowed a new exemption to the state’s freedom of information law. The bill basically allows most records relating to a contract award process to be kept a secret until a winner has been picked.

State senator Gary LeBeau co-sponsored that bill. Now, he says, that exemption might need to be modified.

“We have a right to see what is going on, and to be at least informed of those negotiations and to perhaps influence them directly or indirectly," LeBeau says.

If government can use that exemption for any P3 project, LeBeau said, that’s a problem. And he remembers it was a problem back in 2010. Then-governor Jodi Rell announced that the state had signed a contract with a private company to renovate and manage 23 highway rest stops in Fairfield County. LeBeau remembers that the state told legislators next to nothing about the 35-year contract before signing it and announcing it.

“It was a done deal," he rememers. "And I was sitting there, totally frustrated. I thought that the state got shafted in that deal.”

LeBeau thinks the public, or at least the legislature, should have say in some of these longer-term, expensive contracts. But Redeker and heads of other state agencies say that means badly-needed infrastructure projects could get put off for years. William Tong, a state representative from Stamford, can see where they’re coming from.

“The public process, particularly in this state, is almost tortured," Tong explains. "It’s very slow, there are a lot of layers to it, there are a lot of checks, there are a lot of balances, there’s a lot of lingo, there’s a lot of process.”

The Virginia Council for Open Government’s Frosty Landon says the public wants to see results. Public-private partnerships may be a necessary evil.

“You need these partnerships in order to get things done," Landon says. "Whether it’s a toll road, or whether it’s a schoolhouse.”

And of course, after the contracts are awarded, all the documents will become public – and that’s when the scrutiny can begin.

Read more in the Connecticut Mirror at ctmirror.org.