P3 Funding for Green Infrastructure and How to Limit Risk

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September 27, 2021 | Ryan Brown

Public-Private Partnerships (P3) have been a popular funding mechanism for public works projects around the world since the late 1980s1. More recently, P3 programs have been initiated to help address water quality concerns related to stormwater by providing funding for stormwater retrofits and the development of green infrastructure throughout a municipality, and has become a promoted method for funding these projects by the USEPA2.   

In 2015, Prince Georges County, MD entered into the first of its kind in the US, a Community Based P3 program known as the Clean Water Partnership in order to meet the requirements of the Chesapeake Bay’s TMDL and MS4 permit3. This community based P3 set the stage for other communities around the country to follow in their footsteps. 

 

How do P3s work? 

P3s relationships work by forming a relationship between a public entity, usually a municipality, and a private entity, usually a private developer3. The private entity is responsible for the upfront capital to fund the project and is normally also involved with the development and construction of the infrastructure. The private entity is then paid back over the course of the contract (typically 25-30 years).   

The public entity is tasked with defining compliance and ensuring that the design and construction meets those requirements, and furthermore the overall goal of the project. There are significant advantages to this model by improving the speed that these projects are developed by providing incentives to the private entity to ensure that the project is delivered on time and within budget4. 

 

How does this model reduce risk for municipalities? 

A key component to this financing model is the re-allocation of risk.  Normally, the risk is shifted from the public entity to the private one. To put it simply, this means that the extra costs that can creep into the project due to project delays, construction which exceeds estimates, and designs that don’t meet regulatory or other quality standards are paid by the private entity4.   

In the development of design plans for the constructions of green infrastructure and stormwater retrofits, this risk can be significantly reduced by using a robust drainage design software intended to quickly layout designs, ensure capacity is met within the system, validate the model against regulatory standards, and easily transfer that data to a set of plans. 

 

How can drainage design software support risk reduction? 

Unfortunately, most drainage design software on the market today doesn’t offer that level of functionality and exposes a lot of engineering firms involved with P3 projects to unnecessary amounts of risk.  However, with the right software you can mitigate risk. When selecting a drainage design package there are a couple of things to consider to ensure your risk is low:  

  • It’s tailored to optimizing design 
  • Has data auditing and validation capabilities to help meet compliance regulations 
  • It streamlines plan development 

As a result of these advantages, engineering firms can limit the risk associated with higher-than-expected construction costs by optimizing the designreducing delays in plan development due to overlooked regulatory requirements, and reducing delays or errors associated with transferring necessary information from the modeling package to a set of plans.   

By reducing this risk, firms can position themselves to have a more competitive bid and be more profitable when engaging in these types of projects. This is all accomplished by using a drainage design software that will produce optimally-sized designs that clearly and transparently meet regulatory requirements. Firms that leverage this kind of technology and adapt to new software on the market are likely the ones that will significantly benefit. As P3 programs become the norm for funding green infrastructure in the US, efficient drainage design software will be crucial in securing and profiting from these projects. 

 

  1. “Public-Private Partnership.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/topic/public-private-partnership.  
  2. “Financing Green Infrastructure - Is a Community-Based Public-Private Partnerships (CBP3) Right for You?” EPA, Environmental Protection Agency, www.epa.gov/G3/financing-green-infrastructure-community-based-public-private-partnerships-cbp3-right-you.  
  3. “Prince George's County Maryland Clean Water Partnership.” EPA, Environmental Protection Agency, www.epa.gov/G3/prince-georges-county-maryland-clean-water-partnership.  
  4. Team, The Investopedia. “Public-PrivatePartnerships.” Investopedia, Investopedia, 9 June 2021, www.investopedia.com/terms/p/public-private-partnerships.asp.  

Tags: drainage systems, green infrastructure, sustainability

About the Authors

Ryan Brown

Ryan Brown

Systems Engineer – Southeastern US

 

Ryan is a Systems Engineer with Innovyze with over 8 years of experience in consulting where he primarily focused on stormwater and riverine analysis, planning, and design using a variety of different software packages. His experience also extends to FEMA floodplain compliance and transportation hydraulics design.