Privatization and Government Reform News: Rethinking K-12 transportation, water needs, and more
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Privatization and Government Reform Newsletter

Privatization and Government Reform News: Rethinking K-12 transportation, water needs, and more

Plus: Paying for highways and bridges, housing costs and regulations, and more.


Innovators in Action: Rethinking K-12 Transportation

Whether K-12 transportation is handled in-house or outsourced to private companies, it typically uses large school buses that can often hold 50 or more students. In rural areas especially, traditional school buses can be unnecessarily costly as larger, often-unfilled, and less fuel-efficient vehicles struggle to handle routes where students live further apart. In Arizona, a state grant program aimed at improving K-12 school transportation had many rural families concerned about their lack of flexibility and options. State Senator Sine Kerr, a dairy farmer who represents a rural district, saw an opportunity to help fix the problem by allowing the use of smaller passenger vans—those carrying 15 or fewer passengers—to transport students. In June, her efforts resulted in the legislature passing and Gov. Doug Ducey signing Senate Bill 1630, which allows K-12 students to be transported in passenger vans. In addition to being more fuel efficient, easier to maintain, and less costly, the vans do not require a commercial driver’s license (CDL) to operate. In a recent Innovators in Action interview with Reason Foundation’s Christian Barnard and Ari DeWolf, State Sen. Kerr discusses the new law, how it addresses concerns with safety and gives schools and families more efficient options, and how urban and suburban school districts plan to utilize the legislation’s flexibility.  

States Need Forward-Thinking Approaches to Meet Water Demands

With Arizona’s recent passage of a water infrastructure financing law, Senate Bill 1740, the state is helping ensure Arizonans have access to adequate drinking water and sanitary sewer conditions going forward. As the Bureau of Reclamation demands additional cuts in water allotments to states that rely on the Colorado River, it is important that states give local governments the tools and funding they need to pursue agreements and projects with private and public entities to secure water rights, as well as building resiliency and diversifying sources to prepare for changing climate conditions and increased demand from growing populations. In a new commentary, Austill Stuart highlights Arizona’s legislation as an example that other states should take into consideration as securing water rights becomes more difficult and projects become more expansive.

Changing the Conversation on New Highway Tolls

Due to a combination of the improved fuel efficiency of cars and public and political resistance to tolling and gas tax increases, policymakers and transportation agencies face increased difficulty in financing the needed reconstruction and expansion of highway systems, especially ones with bridges, tunnels, and other expensive assets. Many highways and bridges are nearing the end of their original useful lives and operating capacities. In this column, Reason’s Robert Poole explores these road funding debates, examines multiple recent examples of opponents stopping potential toll-financed projects, and outlines why tolling and mileage-based user fees are likely to provide a more stable, sustainable means of building and maintaining highways going forward.

Housing Regulations Increase Prices, Hurt Young Homebuyers

Homeownership was already becoming historically difficult for younger Americans before inflation rose to levels not seen in decades, prompting the Federal Reserve to raise interest rates, which makes it more difficult for homebuyers. State and local governments have long contributed to the housing problem in two key, related ways: excessive regulatory costs and restricting new housing supply. In a new post, Reason’s Vittorio Nastasi details recent research and trends in housing affordability and reforms that local governments can implement to reduce barriers to homeownership.



NYC Seeks New Ferry Operator After Audit Report Reveals Massive Expense Underreporting: The comptroller for New York City released an audit report in July revealing that the New York City Economic Development Corporation (NYCEDC) underreported expenses for operating ferry routes. Between July 2015 and the end of 2021, the comptroller’s office found NYCEDC should have reported $758 million in ferry-related expenses but only reported $534 million, an undercounting of over 40%. NYCEDC also dramatically understated its taxpayer subsidies per trip over the six-and-a-half-year period, including $8.59 per trip instead of $12.88 last year. In response to the comptroller’s findings, NYCEDC has agreed to issue a request for proposals (RFP) to find a new ferry operator. NYCEDC also noted in its response that it feels it “accurately and properly enforces” its ferry operating contract agreement, but would look to address other reporting issues in its next contract.

NYC Announces New Homelessness P3: In July, New York City Mayor Eric Adams announced the creation of the Homeless Assistance Fund, an $8 million public-private partnership (P3) between the city and over 60 local businesses and nonprofits. The effort seeks to offer support networks to homeless people with an emphasis on outreach and location. The public-private partnership represents an extension and expansion of the “Connect to Care” initiative created by local nonprofit Breaking Ground.

Fort Lauderdale Cancels Shared Government Center With Broward County: In July, the city of Ft. Lauderdale canceled its pursuit of a project to build a government complex to be shared with Broward County, according to an email from Fort Lauderdale City Manager Chris Lagerbloom sent to Infralogic. After planning on a joint project with the county for several years to replace the existing city hall and Broward County Government Center East, Ft. Lauderdale plans instead to pursue a standalone city hall building through a separate procurement.

Wichita Creates New Golf Course Oversight After Privatization Rejection: In July, the Wichita City Council approved an ordinance to create a board of governors that would replace the current advisory committee in overseeing the city’s four municipal golf courses. The change was recommended after the city council voted 5–2 to reject the privatization of the four courses earlier this year. Unlike the advisory committee, which reported to the Wichita Board of Park Commissioners (that recommended privatization), the board of governors would report directly to the city council.

Monterey Water Utility Releases Microgrid RFP: Monterey, California, public water utilities Monterey One Water and the Monterey Regional Waste Management District released a request for qualifications/proposals (RFPQ) looking for qualified firms to provide consulting services concerning the feasibility of potential microgrid and renewable energy projects. The two agencies seek three major objectives from the projects: to find the best use of waste products derived from agency activities (such as waste-to-energy, composting materials, or fertilizer), to enable an energy microgrid that includes “islanding” capabilities—where smaller energy generation and storage sources (referred to as “distributed generators”) feed the larger grid in the event of power plant outages—and to assess the integration of renewable generation sources and energy sources. Responses to the RFPQ were due at the beginning of August, and the agencies hope to announce contracts next month that will be implemented in October.

Louisiana Parish May Pursue P3 for New Jail: At the encouragement of Lafayette Mayor-President Josh Guillory, the Lafayette Parish Council voted 4–1 to approve a resolution that allows the parish to potentially partner with a private firm to build, finance, and maintain a new jail. The parish sheriff’s office would operate the jail. The parish plans on releasing an RFQ for the potentially 25-to-40-year project later this month and selecting a development partner in October.

Florida County Cancels Broadband Contract: Last month, Jackson County, Florida, canceled a contract with private firm P3 Group to build out broadband capability in a “middle mile” project. The cancelation occurred in response to plans by P3 Group to change major provisions of the contract, including using wireless instead of installing a fiber network and applying for grant funding instead of 100% private financing. The county plans to solicit bids in the near future.

Indiana City Finalizes Broadband Contract: In July, the city of Boonville and AT&T reached financial close on a project to install a fiber network with over 4,000 access points around the city. AT&T expects the $4.4 million project to be completed by Jan. 2024.


Connecticut Launches $75 Million P3 for Small Business Development: In July, Connecticut Governor Ned Lamont announced a $150 million small business P3 that will provide low-interest loans of $5,000 to $500,000 to small businesses and nonprofits in the state. Dubbed the Connecticut Small Business Boost Fund, recipient firms will be required to employ no more than 100 people and have less than $8 million in annual revenues. The state will provide half of the funding ($75 million) initially, hoping to increase the program’s size through additional private investments to reach the $150 million total.  

Alaska University Issues RFQ for Utilities Systems: Earlier this month, the University of Alaska–Fairbanks issued a request for qualifications to find a partner to operate, maintain, and invest in its energy and utility systems in a 50-year agreement. The school hopes to receive an up-front payment as well as transfer the risks of maintaining safe and reliable systems, which include energy generation and distribution, water, sewer, compressed air, and steam.


“Walt Whitman waxed poetic about New York City’s ferries, but EDC’s [Economic Development Corporation’s] responsibility is to provide adequate oversight and report accurately. For a successful 21st-century ferry system, we need more transparent reporting, better cost controls, and a new RFP to operate the system.”  

–New York City Comptroller Brad Lander in a press release on NYC Economic Development Corporation underreporting ferry expenditures

“The P3 Group presented a change in the proposal from potential fiber to wireless, as well as alternative funding avenues. The P3 Group’s original proposal was to bring 100 percent financing to the project. At the July 26, 2022 Board meeting, the P3 Group proposed a completely new strategy for broadband by way of a wireless solution rather than fiber optic cable. They also proposed to go after grant funding rather than 100 percent financing.”

–A Jackson County press release cited in the Dothan Eagle on ending a municipal broadband contract