28 29 PUBLIC-PRIVATE PARTNERSHIPS: A VIABLE FINANCING TOOL FOR LOCAL GOVERNMENTS INTERNATIONAL CITY/COUNTY MANAGEMENT ASSOCIATION INTERNATIONAL CITY/COUNTY MANAGEMENT ASSOCIATION BY MARC A. OTT, EXECUTIVE DIRECTOR, ICMA O ne of the biggest challenges facing governments throughout the world is financing infrastructure and other critical investments.This is particularly true in the U.S.,where many important projects have lan- guished since the Great Recession of 2008. One option for governments is to turn to pub- lic-private partnerships (P3s) to underwrite the cost of infrastructure, economic development, and other projects. P3s, as described in ICMA’s Infrastructure Financing: AGuide for Local Government Managers, are contractual arrangements in which govern- ments form partnerships with the private sector to design, finance, build, operate, and maintain infra- structure and other projects. THE PROJECTED OUTLOOK FOR U.S. INFRASTRUCTURE In a forthcoming ICMA publication titled “Pub- lic-Private Partnerships (P3s): What Local Govern- ment Managers Need to Know,”Dr. Lawrence Martin of the University of Central Florida,Orlando, cites the American Society of Civil Engineers (ASCE), which rates the current overall GPA of U.S. infra- structure as a D+. The ASCE estimates that it would cost $4 tril- lion or more to bring U.S. systems up to the minimally acceptable standards.The Environmental Protection Agency estimates that an annual payment of $170 billion is needed to improve U.S. bridges, roads, and transit, and that an additional $400 billion is needed over the next two decades to maintain the U.S. drinking water infrastructure. The bottom line is that U.S. cities and regions are now primar- ily on their own, and that states and the federal government will make smaller and smaller contributions to local and regional government budgets.“State and Local Fiscal Facts: 2017” reports that while the fiscal conditions of state and local governments have stabilized since the 2008 recession, improvements have been MARC A. OTT EXECUTIVE DIRECTOR