Public-private partnerships are a contractual arrangement whereby the resources, risks and rewards of both the public agency and private company are combined to provide greater efficiency, better access to capital, and improved compliance with a range of government regulations regarding the environment and workplace. The public's interests are fully assured through provisions in the contracts that provide for on-going monitoring and oversight of the operation of a service or development of a facility. In this way, everyone wins -- the government entity, the private company and the general public.

Public-Private Partnerships have been in use in the United States for over 200 years. This contractual arrangement between government entities and private companies for the delivery of services or facilities is used for water/wastewater, transportation, urban development, and delivery of social services, to name only a few areas of application. Today, the average American city works with private partners to perform 23 out of 65 basic municipal services. The use of partnerships is increasing because it provides an effective tool in meeting public needs, improving the quality of services, and more cost effective.

Even in the best of times, governments at all levels are challenged to keep pace with the demands of their constituencies. During periods of slow growth, government revenues are frequently not sufficient to meet spending demands, necessitating painful spending cuts or tax increases. Partnerships can provide a continued or improved level of service, at reduced costs. And equally important, partnerships can also provide the capital needed for construction of major facilities. By developing partnerships with private-sector entities, governments can maintain quality services despite budget limitations.

In many partnerships created today, public employees are retained and usually at equal or improved benefits. One of the greatest areas of improvement for employees is with opportunities for career growth -- private companies spend two to three times more on training and personnel development than their public-sector counterparts, as a way of gaining the maximum efficiency out of every person, and the maximum amount of job satisfaction.

From Los Angeles to the District of Columbia, local governments have formed creative partnerships with private companies to enhance the safety of its streets and its citizens. By turning over the operation of parking meters or the processing of crime reports to private-sector partners, police officers can spend more time on the streets doing the jobs for which they are trained. This is particularly important as Home Land Security has risen as a concern for many.

In Washington, D.C., a public-private partnership was instrumental in building the first new school building in the District of Columbia in over 20 years. By working with a private real estate development company, the D.C. school system was able to build a state-of-the-art facility with a modern computer lab, gym and library. Today, school districts in several states are forming partnerships with private entities to build new schools. This is essential at a time when, according to the National Clearinghouse for Educational Facilities, more than 2,400 new schools will need to be built by 2003 to accommodate school population increases.

These are not easy times for America's roads and highways. Increasing numbers of vehicles means more roadway wear and tear and increasing traffic congestion. In states like California, Virginia and Washington, private-sector companies are working with governments to build toll roads, making it possible to finance construction and upkeep without having to impose general tax increases. In jurisdictions nationwide, governments and private contractors are working to build new roads and expand existing ones to ease traffic congestion.

The stringent health and environmental standards of the Safe Drinking Water Act and Clean Water Act have caused problems for some local governments without the budget flexibility to make major capital improvements in water and wastewater facilities. Public-private partnerships have enabled the construction of state-of-the-art water management facilities, while using efficient operations to hold down costs to ratepayers and provide a way of meeting those "un-funded mandates" from the federal government.

This is the age of information technologies, but there can be a hefty cost of getting a system operating. Through public-private partnerships, many governments are now able to fully participate in "E-government" with their constituents, or effectively coordinate government activities and budgets. Better service, improved tools and saving money are exactly what public-private partnerships are all about.

While there can be substantial misperceptions about the value of partnerships, a look at who endorses them should clarify the picture. Federal agencies like the Environmental Protection Agency, the Department of Defense, and the Veterans Administration all use partnerships. And the number of state and local governments using this tool is even greater. For example, the U.S. Conference of Mayors is enthusiastically working with private-sector providers to discuss ways to make partnerships more effective. Numerous surveys indicate why -- governments traditionally realize cost savings of 20 to 50 percent when the private-sector is involved in providing services.