Government officials, nonprofits and businesses are combining forces to tackle the problem of decreased funding for human services projects. Due to budget cuts at all levels of the government, innovative financing options are being heavily explored by the social services industry.

Social impact bonds are gaining traction. The relatively new financing tool uses an incentive structure to promote the success of a project. Here's how it all works: 

• Investors are willing to provide capital to governments for a particular social project.

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Officials hope for proposals for central administration building as mixed-use property

John Strybos

Alamo Colleges in San Antonio needs a new central administration office, doesn't want to expend its own funds to build it and wants the facility to be more than simply offices for administrators and staff.

After only recently increasing taxes and increasing tuition, board members have made it quite clear that they want no investment on the part of the college other than the land on which it would be built.

In 2008, the district bought a more than 12.6-acre tract of land for $4.13 million. It is on that property that college officials are hoping to attract a developer for a public-private partnership to build a facility to house their 450 district employees in a central location. At a recent board retreat, trustees approved preparation of a minute order to issue a request for qualifications to develop the site. A minute order has to go before the Building, Grounds and Sites Selection Committee on Dec. 4 and the regular board for its approval at its Dec. 18 meeting.

John Strybos, associate vice chancellor for finance operations and construction management, described the RFQ as not committing the colleges to anything, but rather "throwing a net out" fishing to see what kinds of responses result.

Strybos said officials are looking at the possibility of a mixed-use facility that could also perhaps include residential and retail space. He indicated that the property might well include the office building, an entry plaza, green space and walking trails, surface parking, a 1,000-space parking garage and more. The mixed-use part of the partnership could also mean job opportunities for students, said Strybos.

College employees are currently scattered "all over the county," according to Strybos, at three locations. Alamo Colleges Chancellor Bruce Leslie said with employees in three locations, working efficiently is difficult. He also said that because workers have minimal space in which to operate, working conditions are "minimal at best."

Printing, some mail service, Web sites, Web services could go to private sector

Last year, Washington State created its new Department of Enterprise Services (DES), which is charged with reviewing one to six state services every two years to determine if those services could be provided more efficiently and less expensively by the private sector. The legislature also said the first of those services to be subjected to scrutiny should be the state's print shop.

The state's budget office also chose to examine the state mail delivery outside Thurston County, now performed by a mail service program in DES. The second service being examined is the design and maintenance of state agency Web sites, including online transactions and management of the state's Web portal, which links to other state sites.

Decisions on whether those two services can be handed over to the private sector should be coming soon. But, the print shop project is not expected to go out for bids until early December. Decisions on all three services must be made by June 30.

Officials noted that only five bids were received on the privatization of the state's Web services and only two were received regarding mail service. The Web site maintenance is valued at about $1.5 million and some $700,000 worth of mail pickup and delivery is at stake in that solicitation. Officials, however, expect more interest from bidders for the print bids. Already close to $7 million in printing work is handled by the private sector. The newest proposal calls for the outsourcing of more than $8 million for bulk printing of large orders, storage and delivery.

Flat fee being considered to help government address increasing caseload

USC to build new facility after contribution to School of Dance

A generous contribution by Los Angeles philanthropist Glorya Kaufman, who already has contributed millions to the University of Southern California, is the latest in a number of donations to the USC Glorya Kaufman School of Dance. As a result, the university is planning construction of a new building to house the school. Plans call for the new facility to be under construction in 2014, with the first class of dance majors to enter the school in fall 2015. The undisclosed amount is said to be Kaufman's largest gift to date. She previously donated $20 million to the Dance at The Music Center in Los Angeles.

Three construction, renovation projects approved for University of Mississippi

The Oxford campus of the University of Mississippi is in line for three construction and renovation projects following recent action of the College Board. The Music Hall, built in 1929, will get new HVAC systems and a pitched room as part of the plans. The $3.4 million project is expected to take 12-18 months. Another $5.5 million project entails renovation on the east end of the Johnson Commons. The building will get a new, water-resistant set of foundation and exterior walls, slab and roof and corrected drainage, interior renovation and new HVAC, electrical and plumbing systems. Construction is expected to begin in July of next year and completed by August 2014. The final project will be construction of a 350-car parking lot and the widening and extension of a road on the east side of the football stadium.

Arizona school district planning to build two new schools

Denise Birdwell

Higley Unified School District in Arizona is planning to build two new middle schools, with a projected opening date of August 2013. With no money from the state school facilities fund and the deadline passed for sale of now-expired, voter-approved bonds, the district had to be creative in finding funds for the buildings. The district chose to go to the voters, who approved an initiative to allow the school district to enter leases for longer than five years. Thus, the district will build the facilities with a lease/leaseback agreement. The district becomes the first in the state to use a lease option to build schools, although cities, towns and even the University of Arizona have used the lease practice. Calling passage of the initiative a "great opportunity," Superintendent Denise Birdwell noted, "We have the ability to build two new schools with no new taxes. This is the only way we can build schools." A development firm was hired to assist the school in working with a nonprofit foundation that will obtain financing to build the schools on land owned by the school district, and then lease it back to the district. The district will retain ownership of the land while the nonprofit will own the building. Once the 40-year lease is up, the school district will take ownership of the buildings.

Minnesota school district planning $7 million in renovations

Four schools previously closed in the St. Paul, Minnesota, school district will be reopened in fall 2013 after $7 million in renovations. The Ames Elementary will see a $1.3 million floor replacement, main office relocation and safety upgrades, to name a few of the projects. The Prosperity Heights Elementary will get $1.5 million for new flooring, ceilings, lighting, office renovation and more. Sheridan Elementary is due a variety of improvements valued at $656,000 and Roosevelt Elementary will spend $3.4 million for new classrooms, technology upgrades, energy efficiency projects, security projects and wheelchair accessibility improvements. 
  

Record bond approved in Portland Public Schools to rebuild, upgrade facilities

Carole Smith

A record $482 million bond issue was recently approved by voters in the Portland (Oregon) Public Schools. The bond proceeds will be used to rebuild and upgrade numerous of the district's buildings. The bonds will result in renovations at the Franklin, Grant and Roosevelt high schools and the Faubion K-8 school will be rebuilt. Additional support of the school district came when voters also approved an income tax aimed at putting arts in the schools and creation of a permanent library taxing district in Multnomah County. Portland Superintendent Carole Smith attributed passage of the bond vote to ensuring that the district understood why voters rejected a previous bond vote. She said the district was both "engaged," and "willing to figure out what was the right package and the right dollar amount."

Wake County voters say yes to bonds to expand Wake Tech Community College

Stephen Scott

Wake Technical Community College in North Carolina is making plans for spending the $200 million in bonding authority voters in Wake County recently approved for projects to help the college meet the needs of its growing student population. "I am ecstatic," said Wake Tech President Stephen Scott of the bond passage. The college is dealing with growing needs and the $200 million will allow the college to meet a 50 percent increase in growth. The bond proceeds will be used to add buildings on the Northern Wake campus and to build a new Research Triangle Park branch in Morrisville. Repairs are on tap for facilities at the campus south of Raleigh and additional funds will be used to complete construction of the Public Safety Education campus. Plans are for the funds to be spent over a four-year period, beginning next year. Some 500,000 square feet of new space will be built, along with 4,500 additional parking spaces. The Research Triangle Park campus would get three new buildings, a parking lot, roads and other infrastructure.

 

Massachusetts prison system seeks phone system bids

With the current contract expiring in March, Massachusetts state prisons department officials are putting their inmate calling service contract up for bids. Not only are officials looking for a bidders, but they are also looking for improved service. Many families and friends of inmates have decried the fact that the service is expensive and have even called it a "tax" on inmate families. They are hoping the state's Department of Telecommunications and Cable will enter the fray and regulate prices being charged.

Perdue seeks to convert hospital campus into major urban park

Bev Perdue

If North Carolina Gov. Bev Perdue has her way, the old Dorothea Dix Hospital campus will be converted into a major urban park. Although Perdue will soon be leaving office, she is still hopeful to convince city of Raleigh officials to vacate the property and draft a long-term lease. Although no price for the lease has been determined, a decision on the proposal is expected at a Dec. 4 meeting of the Council of State. State officials say the best option for the project is to preserve the land and partner with the city to develop a regional park. Perdue is seeking to build a new campus for the State Department of Health and Human Services that will consolidate offices with more than 20 other state health offices in the area onto the 300-acre property. The state already is negotiating with a private sector firm for possibly construction of a new campus with up to 1 million square feet of office space. Although a price tag has not been put on the proposal, officials say the consolidation would increase efficiencies that could result in a savings of about $90 million. If the decision is made not to build a new DHHS campus, the state would remain in the current Dix offices until it decides how to move forward.

 

Oregon governor frees up funding for infrastructure capital improvements

Oregon Gov. John Kitzhaber has signed an executive order that will free up bonding capacity to provide $1.1 billion every two years for infrastructure capital improvements over the next decade. Funding will be used for educational facilities, state building and information systems and support for business and industrial development. According to the directive, counties will have funding available for projects from roof repair to reconstruction of some facilities. County courthouse projects would get priority over other projects.

 

Federal funding will help Florida area replace aging Howey bridge

Thanks to federal funding, Howey-in-the-Hills will now be able to replace the aging Howie bridge. The facility got some much-needed upgrades a couple of years ago, but thanks to available federal funding, the more than 60-year-old, two-lane bridge will see a $46 million rebuild. Construction on the project could begin in about four years for the structure that carries 10,000 vehicles daily. The project would take approximately two years to complete.

 

New York school building fitness center for students, community availability

Rich Calkins

Bonds valued at $4.8 million will be issued by New York's Alfred-Almond school district to help finance a $5.5 million capital improvement project approved by voters last year. An additional $700,000 from the district's capital reserve fund also will be used for the project. Chief among the projects is the construction of a physical education room-community fitness center. School officials are trying to stay ahead of aging equipment maintenance to avoid future large expenditures for repairs. Superintendent Rich Calkins said the physical fitness center is one way the district can support the community that has long supported the school system. "The physical fitness center is part of our commitment to help everybody possible in the community," he said. The district will pay its portion of the funds up-front while the $4.8 million in state aid will end up being financed as old debt, or debt for previous capital projects

 

Massachusetts city awarded $1.28 million grant for infrastructure projects

The city of Taunton, Massachusetts, has been awarded a state grant of $1.28 million for infrastructure projects. The funds are part of $38 million recently released by Gov. Deval Patrick for more than 25 new MassWorks Infrastructure Program grants. The funds are to be used for roads, streetscapes, water and sewer projects statewide. The $1.28 million Taunton grant will be used for the city's Downtown Infrastructure Improvement Project. The city has been identified as a State Priority Development Area in the South Coast Rail Line Use and Economic Development Area. That project would bring a commuter rail from Boston to Taunton and other cities. That project would require two train stations in Taunton.

 

Illinois county looking at possible main courthouse expansion

Officials in Lake County, Illinois, are planning a multi-million-dollar expansion of their courthouse. To fund the project, the county would borrow up to $90 million that would be used for new courtrooms, renovation of existing courtrooms and numerous other improvements. Part of the plan includes a new nine-story tower on the south side of the facility. Seventeen new courtrooms are part of the proposal and room will exist for more in the future. The project also calls for remodeling of existing courtrooms as well as facilities in the county jail building, while a tunnel would be built underground for transporting inmates between buildings. Another part of the project is planned expansion by 35,000 square feet of the county juvenile justice center. 

 

Connecticut city planning water infrastructure improvement project

New London, Connecticut, is planning a $6.5 million upgrade to its public water infrastructure. The project will help the communities it serves be better prepared for drought conditions. Bonds will be issued to provide an intake pump station at Lake Konomoc that will provide access to 366 million gallons of water at the reservoir. This improved access should mean a higher safe yield level and reduction in frequency of drought advisories. The project will be funded by $300,000 in loan forgiveness from the Drinking Water State Revolving Fund and a loan with a low-interest payback over 20 years. The city council was required to approve a $6.5 million bond to be eligible for the loan. Included in the project is $6 million in construction costs and $500,000 in professional services costs.

 

Free listings offered for RFPs to public sector entities, nonprofits

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Florida county plans to turn over air ambulance service to private company

Lee Kiker

Medstar, an air ambulance program of Lee County (Florida), will be turned over to a private sector firm. Officials say the action is likely to save the county as much as $2 million per year. In addition, the county is likely to make money off the deal since its two county helicopter will be sold and the hangar leased to a private company. The county will continue to supervise its own ground transportation. The county is considering four private sector firms interested in taking over the air ambulance service. Commissioner Lee Kiker called the deal "an all-around win." Kiker noted that the county will get money from the sale of the helicopters, reduce the budget by $2 million and "can ensure the program stays in place." As part of the public-private partnership, Medstar's insurance and certifications would be controlled by a private company. There were problems previously because the service was billing patients and did not have all of its federal safety certifications in place. The county expects to face fines of millions of dollars for the violations, but with a P3 in place, some of the fees could either be dropped or reduced significantly. 

Ohio Department of Transportation seeks partnership for bypass

The Ohio Department of Transportation (ODOT) has announced it is seeking a public-private partnership to assist with construction of the Portsmouth Bypass. Such a relationship will allow ODOT to find an innovative way for developing, financing, maintaining and operating a transportation facility. Officials expect no decision on a P3 relationship until probably the end of the year. ODOT officials say there has been interest in the project from contractors throughout the country. The project includes three phases. Phase one would include $83 million in construction from Shumway Hollow Road to Lucasville-Minford Road and would take three years. Phase two is a $242 million project with a five-year completion date that includes construction beginning at Lucasville-Minford Road to U.S. 23. The third phase, with a cost of $281 million, includes a 2017 start date for construction for Shumway Hollow Road to U.S. 52. The construction costs are set at $405 million, with the total project cost at more than $650 million. ODOT officials say that even if a P3 relationship is not established, the first phase of the project will likely proceed with a traditional bidding process. That phase could start sometime next year.

 

City of Dallas enters into public-private partnership for construction of boathouse

Sheffie Kadane

The City of Dallas is joining forces with Dallas United Crew, a coed high school rowing team, that will lead to construction of a $4 million floating boathouse on White Rock Lake. Council member Sheffie Kadane said the project will be an asset both to the lake and to the city. The partnership was recently approved by the Dallas Park and Recreation Board. Under the terms of the partnership, Dallas United Crew will raise funds to build the boathouse on the northeast side of the lake. The city's contribution will not be in funding, but the city will own the building and earn 10 percent of the rowing club's revenue. That amount is estimated to be about $150,000 over the life of a 20-year contract. After 10 years, there would be an option to renew the lease. The boathouse, which will house some 40 boats, will be open to the public with a launch dock. Students pay approximately $3,000 per year right now. Dallas United Crew has also committed to beginning a rowing program open to persons with disabilities. 

 

Oregon county looking to P3 as way to rebuild, renovate its courthouse

Officials in Multnomah County, Oregon, are considering a public-private partnership as an innovative method for rebuilding or renovating its courthouse. County officials are looking north - to British Columbia, Canada - to a company to help finance the upgrades of the historic courthouse. A resolution is expected to be approved as early as next month that will support moving forward with a P3 to give the more than 100-year-old courthouse a facelift. While some other Oregon counties are depending on state bonding capacity for remodeling and refurbishing their own historic courthouses, Multnomah County officials have been working for the last two years on a public-private partnership approach. County officials statewide are hopeful that the legislature will address courthouse problems statewide and release funding to address some of the estimated $750 million in courthouse needs. Multnomah County could seek some of that funding necessary to seek a public partner.  The Oregon officials point to a successful project in California by which a 545,000-square-foot courthouse is being built with a public-private partnership. Once the building is completed, it will be owned by the state even though the private company designed and built the structure and will operate and maintain it. The state will then make payments on it for 35 years to cover operational costs.

 

New York State

• The New York State Board of Elections is seeking bids for independent testing authority services for voting system examination and certification testing, to provide testing and certification of voting systems for use in NYS elections.
• The State of New York is seeking bids for maintenance, repair and operational supplies statewide, to include commodities only, and supplies include materials and equipment used to keep a facility in such condition that it may be continuously utilized at its original or designed capacity and efficiency for its intended purpose.  

Kansas

• Emporia State University is seeking bids from qualified vendors to provide ATM services for the ESU Memorial Union.
• Kansas State University is seeking bidders to operate and maintain the current bookstore facility at the KState Student Union at KState in Manhattan, Kansas, and the bookstore facility on KState Salina campus in Salina, Kansas.

Nebraska

• The State of Nebraska is seeking a qualified contractor to provide actuarial services, including pension fund actuarial valuations, pension consulting and actuarial experience studies to the Nebraska Public Employees Retirement Systems.
• The Nebraska Department of Education is seeking a qualified contractor to provide and operate a computerized information system to support the administration, record keeping and reporting for state student assessment.

South Carolina

• The South Carolina Information Technology Management Office (ITMO) is seeking bids for the College of Charleston to enter into a contract to provide and maintain Internet (ResNet) services. Optional Residence Hall Cable TV (video services) may also be considered.
• The State of South Carolina is seeking a qualified vendor to provide food service operations for the Hollings Cancer Center at the Medical University of South Carolina.

New Mexico

• The New Mexico Racing Commission is seeking bids from qualified vendors to provide equine drug testing services.
• The New Mexico Department of Transportation is requesting proposals from qualified lawyers and law firms for professional legal services, specifically in the role as rail counsel, in matters of complex rail, real property, environmental law, railroad joint use agreements, liability, intergovernmental agency agreements and related issues.

Dr. Claire Pomeroy (top left), dean of the University of California Davis School of Medicine, facing questioning by federal regulators and UCD administrators, is stepping down after seven years, effective June 30. Dr. Ann Stuart (top middle), chancellor and president of Texas Woman's University since 1999 and former president of Rensselaer Polytechnic Institute's Graduate School in Connecticut, has announced she is retiring, but will lead the university until a successor is found. Zakiya Smith (top right), a senior policy adviser at the White House's Domestic Policy Council who has helped shape President Obama's higher-education policies, has noted she will leave that position to become affiliated with the Center for American Progress, a think tank in Washington. South Carolina Department of Revenue Director Jim Etter has announced he is leaving that post, effective Dec. 31, and will be replaced by Public Employee Benefit Authority Executive Director Bill Blume. The state of Connecticut has appointed Guy Vallaro, director of the Massachusetts forensic laboratory, to run the Connecticut crime lab, beginning Dec. 28. The Institute for Community Engagement in New Mexico has hired Lucia Veronica Carmona of Las Cruces lead organizer for the Colonias Development Council in Dona Ana County since 2004, as its director of community engagement, effective Jan. 1. The Ardmore (Oklahoma) Development Authority Trustees is losing its president and CEO, Wes Stucky (middle right), who is retiring at the end of April of next year, after a 25-year career with the Authority. Michael Dimock (middle center), associate director for research at the Pew Research Center for the People and the Press, will succeed Andrew Kohut as director of the organization. The West Virginia Board of Education fired Schools Superintendent Jorea Marple (middle left) last week, but will have to meet again this week for a do-over after concerns that the open meetings law at which the firing was proposed was violated with Deputy Superintendent Charles Heinlein to replace Marple until a successor is named. Polly Hanson, a former Metro Transit Police chief with 27 years on the force, will take over Amtrak's police force next month, replacing John O'Connor, who retired in June. Sacramento police Chief Rick Braziel has announced he will retire at the end of this year after serving as chief since 2008 and having been with the department since 1979. Steve Reneker, chief innovation officer for the city of Riverside, California, who helped establish the city's wireless network and a digital inclusion project, is leaving that post. California Gov. Jerry Brown has tapped retired U.S. Marine Corps Major General Anthony L. Jackson (bottom left), a 36-year military veteran, to run the California Department of Parks and Recreation. Senior District Judge John J. Specia, Jr. (bottom center), a founding member and jurist in residence for the Texas Supreme Court Children's Commission who has extensive experience in policy issues involving children and families, has been named the next commissioner of the Texas Department of Family and Protective Services. Chuck Frederick (bottom right), who served as Denver's CIO and interim CIO for nearly two years and is a former deputy CIO and chief technology officer for Douglas County, Colorado, has left his public sector job to join a Denver-based private sector company. Lt. Robert Severance of the Grand Prairie (Texas) Police Department was named the new Cleburne Police Department chief, and is expected to step into his new role in late December. Sheila Burgess, Massachusetts' top safety officer since 2007 and who has been on medical leave since an August car accident, is being removed from her post because of her reported driving record of seven accidents and six moving vehicle violations and will be assigned to another post in the state's Office of Public Safety and Security. Sonoma, California, Assistant City Manager Carol Giovanatto, an 11-year veteran with the city, has been promoted to the city's top administrative post and will replace outgoing City Manager Linda Kelly.