The line between public works and private projects continues to blur. Innovative contracting methods and partnering arrangements allow public money to subsidize for-profit projects, while representing those public-purpose projects as private. Sometimes this is driven by financial imperative; sometimes by political considerations.
The most recent example comes from the Pennsylvania Supreme Court. A pre-development lease to a publicly funded charter school was treated as a private project even though: (1) the building’s interior was custom designed for the school; (2) the school paid a $1.6 million “security deposit” to the developer to pay for the interior fit-out, using public funds; and (3) the school could purchase the building after only five years.
The distinction between public and private manifests itself in many contexts: project funding, competitive bidding requirements, payment and performance bonds, prevailing wage laws, and claims administration and remedies, to name a few. Yet the dividing line is becoming more and more difficult to discern.
What is your opinion? Is the process being abused to avoid or subvert safeguards applicable to the expenditure of taxpayer dollars? Or is this merely an innovative response to constrained public budgets, an inevitable wave of the future? I welcome your comments.
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