About The Office

Why did you decide to put a PBI Office into place – Can’t we just rely on public funding per our usual practices?

• Denver is among the fastest-growing large cities in the U.S. This creates opportunities and challenges for critical City infrastructure that is necessary for the viability, sustainability and quality of life for all Denver residents.
• To remain an attractive, affordable place to live, while maintaining the City’s high bond ratings and prudent fiscal management, Denver is committed to exploring alternate ways to meet the need for new public infrastructure and for improvement or expansion of existing facilities.
• That’s why the City and County of Denver developed a Performance-Based Infrastructure (PBI) Office that will manage a neutral, standardized and transparent process to evaluate and execute potential partnerships with the private sector to deliver public infrastructure to the City.

What is the goal of the PBI Office?

• The goal of the PBI Office is to improve the lives of Denver residents by leveraging private-sector financing and expertise to build, operate and maintain City-owned projects when that approach would deliver the best value. This also means that the City can tap into the private sector’s innovation capacity and transfer certain risks related to infrastructure development in cases when the private sector may be in a better position to manage such risks.
• A PBI Office also helps establish shared responsibilities and governance structure as project development and delivery are divided among multiple agencies. This is a best practice and has proven to be very valuable for states and local governments to create a dedicated, centralized PBI office.

When will the PBI Office open and the program go into effect?

• The PBI Office that oversees the program launched January 2019.

Who will manage the PBI Office?

• The PBI Office will be led by a permanent executive director appointed by the Mayor with oversight by a Performance Infrastructure Committee (PIC), comprised of the Mayor’s Chief Projects Officer, City Attorney, Chief Financial Officer, and Executive Director of Public Works. The interim executive director is Emily Hauber.

How will it be determined if a potential project is suitable for performance-based delivery and is placed in Denver’s PBI program pipeline?

• Agencies with projects for consideration will consult with the PBI Office and the Capital Projects Planning Division in the City’s Department of Finance.
• Projects that may be appropriate for performance-based delivery enter the screening stage, during which the PBI Office will work with the agency to evaluate whether a project is a suitable candidate for PBI delivery. The objective of the screening stage is to evaluate projects efficiently and to efficiently spend resources on projects that appear suitable for a PBI delivery and not on those that do not meet a minimum set of characteristics.
• At the end of the screening stage, the Performance Infrastructure Committee will approve projects recommended by the PBI Office for addition to the City’s PBI pipeline. (Projects not approved for performance-based delivery can be re-submitted through the City’s normal Capital Improvement Program process.)

What is the PBI Office’s role after projects are in the PBI pipeline? 

• The PBI Office will manage projects in the PBI pipeline after the screening stage through subsequent phases of the PBI program. The PBI Office will provide resources and expertise to evaluate and execute the best delivery method.
• For projects in which PBI procurement is deemed the best option, the PBI office will provide expertise to structure projects, manage the procurement process and oversee implementation in coordination with City departments.
• As projects move forward, the PBI Office and project team will brief City Council on aspects of the projects and decision points.
• In the spirit of transparency, feedback will be incorporated from the community to protect and underscore the qualities that make Denver a great place for residents and visitors as outlined in the Stakeholder Guidelines document of the PBI program.

What are the potential benefits of the PBI concept for the public? For private partners? What are the potential drawbacks for both partners? 

• For the public, PBI projects provide an alternate way to meet the need for new public infrastructure and for improvement or expansion of existing facilities.
• When properly structured, PBI projects leverage the private sector’s innovation capacity and transfer risk from the public to private-sector partners in cases where they are better placed to manage those risks. Therefore, to avoid any potential issues or drawbacks for both the public or private partners, the City will take a thoughtful, transparent approach to determining if and when it makes sense to work with private-sector partners, and how to structure and manage those partnerships.
• The City believes the PBI program will deliver significant, lasting benefits to Denver residents and will ensure any partnership it enters into incorporates Denver’s core values of inclusion, equity, and economic opportunities.

Has the PBI Office and program been endorsed by the Mayor and/or other elected officials? 

• Yes, and the PBI Office is one of the necessary tools in the project delivery toolbox. We must leverage available resources to meet the needs and demands of our growing city. The PBI program and centralized office aligns well with the City and Mayor’s core values of transparency, inclusivity, equity and opportunities for all.

Will the PBI program be used for projects that will be developed outside of the Denver City and County limits?

• The PBI program is based on national and international best practices. All of the program guidelines and policies are available on the PBI website. Other jurisdictions of public entities may choose to use the PBI program, if appropriate, for meeting their project delivery goals and for providing the best value to their taxpayers.

What projects currently are being considered as potential PBI project? Why is PBI a good option for these projects?

• Projects currently being considered for inclusion in the pipeline by the PBI Office include The Triangle Project at the National Western Center and a Landfill Gas to Energy project at Denver Arapahoe Disposal Site (DAD). We believe the PBI program will help evaluate the best value and risk allocation between the public and private entities.

Why wasn’t the program in place before previous PBI projects were undertaken (e.g. Denver Union Station, DIA Great Hall, etc.)?

• The City of Denver saw a need and took the time to research and develop a PBI program and office as the city continues to grow. The program is customized to meet Denver’s unique needs, values and vision. We look forward to having this neutral, standardized and transparent process to evaluate and execute potential partnerships with the private sector to deliver public infrastructure to the City of Denver and residents that benefit from these projects.

High-profile PBI projects in the region, such as U.S. Highway 36 and the RTD A Line, have been controversial. How will Denver’s PBI program keep City projects from running into similar problems?

• Denver’s PBI Office is based on national and international experience and is designed to provide a robust, neutral and systematic review of projects.
• Transparency measures built into the program include a significant stakeholder engagement process during project development.

PBI projects also are criticized for providing incentives for private-sector partners to do things on the cheap, as with the RTD A Line and its highly-publicized operational problems. Will Denver’s PBI program prevent these kinds of problems?

• The PBI Office will enable a thorough review and structuring of projects, including performance indicators that the private sector must comply with (or otherwise incur financial penalties) when developing, operating and maintaining projects. The PBI Office will provide tools for public officials to ensure that PBI projects and contracts are structured such that they create the right incentives and deliver the best value for taxpayers, at the most efficient cost.

Does the PBI program address unsolicited proposals? If so, how?

• The PBI Office will accept unsolicited proposals.
• Information on the PBI program’s unsolicited proposal process can be found on the PBI website.

In general, what is meant by a performance-based or public-private partnership project?

• A PBI project meets four criteria:
  1. The project should be totally or partially financed by the private sector, and public payments are subject to the private party meeting contractually-defined performance requirements during construction, operation, and maintenance;
  2. Risk is shared between the public owner and the private sector. Examples include design and construction (including on-time completion) risk, operations and maintenance of the facility, and performance risk;
  3. The project should provide value for money to taxpayers, meaning a PBI project delivers greater value to the taxpayer over the life of the asset than a traditional procurement method; and
  4. The project provides public infrastructure/essential public services, and long-term ownership of the asset is retained by the public sector.
     

What is the PBI Program in Denver?

• The PBI program consists of five stages:
  • Planning (stage 1): During this first stage, projects are developed per traditional project development process by a Sponsoring Agency. Examples of Sponsoring Agencies are Public Works, Arts and Venues, Parks and Recreation, or Mayor’s Office of National Western Center.
  • Screening (stage 2): During the screening stage, Sponsoring Agencies submit projects that they want to be considered for PBI procurement. The objective of the screening stage is to efficiently evaluate projects against a set of established criteria included in the PBI program and determine which projects may be suitable for PBI procurement without spending too many resources upfront. Projects that appear to be suitable for PBI procurement must be approved by the Performance Infrastructure Committee and Mayor and move to stage 3. City Council is briefed, and the project is placed into the PBI pipeline and posted on the PBI website.
  • Structuring (stage 3): This phase involves defining a project’s components and procurement strategy at a high level the development of a project’s full technical feasibility, financial model and identification of project risks. This phase also includes a business case evaluation. The outcome of this evaluation determines whether a PBI procurement project delivers better value than traditional procurement to taxpayers and can proceed to the next stage. If there is “Value for Money” as determined by the business case, the Performance Infrastructure Committee and Mayor approve the findings and move to stage 4. City Council is briefed.
  • Procurement (stage 4): During this phase, the PBI Office and Sponsoring Agency develop procurement and contractual documentation and solicit for, negotiate with bidders and select a preferred bidder. At the end of this stage, contract approval is sought from City Council. Approval is necessary for a project to move to the implementation phase.
  • Implementation (stage 5): This final stage involves contract execution and the construction and operation of the project.
    

Is Denver’s PBI program similar to PBI policies in other cities? Have those policies been successful? How do we know?

• The Denver PBI Office is among the first of its kind in the U.S. It’s second only to the Washington D.C. Office of Public-Private Partnership (OP3) office. It was created based on a public-private partnership model and informed by national and global best practices.
• To create the PBI Office and program framework, the City and County of Denver worked with Arup, a public infrastructure development expert, who examined best practices from around the world. The City selected Arup via a competitive RFP process.
• Arup has represented governments and the public sector on public-private partnership projects around the world, including the Long Beach Civic Center in California and the Champlain Bridge in Ontario, Canada.
• Additionally, the City of Denver examined PBI projects and related public-private partnership programs across the country and determined the model for assessing and managing PBI projects to be effective.
• A PBI Office also helps establish shared responsibilities and governance structure as project development and delivery are divided among multiple agencies. This is a best practice and has proven to be very valuable for states and local governments to create a dedicated, centralized PBI office.

How will the general public know that the City has its best interest at heart? Will there be an opportunity for community members to have a say in which projects move ahead?

• Public engagement and communication with stakeholders is very important to the PBI process. The City is committed to maximizing transparency throughout the process. The PBI Office follows a set of national and Denver-specific best practices for community engagement and input, outlined in the PBI Program Stakeholder and Communications Guidelines.
• To provide the public with a meaningful opportunity for input on a proposed PBI project, the PBI Office in coordination with the Sponsoring Agency and City Council will hold a minimum of three public meetings on any Public Private Partnership under consideration, including one town hall. The meetings will provide the public and stakeholders with sufficient detail to understand the proposed PBI project and proposed long-term obligations of the financing arrangement under consideration. These meetings will be held at an appropriate location close to the communities that will benefit and be affected by the project, and will allow for comment, input and questions from the public. Public meetings will be posted on the PBI Office website at least one (1) week in advance.
  
  

How will the general public be kept aware of updates following these meetings?

• The PBI Office will provide notice to the public and to City Council members of significant milestones in the consideration of PBI projects via the PBI Office website, notifications to City Council members, and by email and mail notices to Registered Neighborhood Organizations for the areas where the project will be located.

How will the PBI program impact job creation?

• It is vital that local residents, particularly those in economically disadvantaged areas and populations, are able to work on local projects, build careers and support their families right here in Denver. Delivering a project through the PBI program is intended to provide significant, lasting benefits to Denver residents, including economic and workforce development opportunities, job creation and improved quality of life.

The 2019 budget request is significant, why so expensive? What value does the City receive from the investment?

• We believe the City will receive great value from its investment in the PBI Office and approach.
• By investing this budget upfront and using a neutral and standardized process, the City reduces the risks of entering into projects that, if not properly evaluated, may end up costing many times more than the initial money thought to be “saved” by not having a program like this.
• The PBI Office budget takes into account the capacity necessary for screening, structuring and procuring a PBI project.
• In addition, the City’s infrastructure projects need resources regardless of how the project is procured/delivered. The PBI Office and program systemically build efficiency and transparency into project development.

What are the project delivery and funding alternatives to PBIs? In what cases are the alternatives better? In what cases are they worse?

• PBIs are an alternative delivery method to the traditional Design-Bid-Build delivery method commonly used by public agencies. When evaluating an alternative delivery method, the private partner will be responsible for some or all of the design, construction, financing, operation and maintenance of the project or asset. Tools such as “Value for Money” analysis and careful screening and structuring of projects are meant to inform when PBI is a better alternative for taxpayers’ money.

Isn’t a PBI just a way to privatize a public asset?

• A PBI project is a long-term agreement between the public sector, the City and a private-sector partner to share in the cost, risks and rewards of delivering a public project.
• The City retains ownership of the public assets in question at all times – therefore, this is not privatizing public assets.