The NLC Service Line Warranty Program: “Public-Private Partnerships”

By: Jim Hunt January 14, 2019

A growing trend in local government is an increasing reliance on Public-Private Partnerships to fill critical needs in our cities and towns. Citizens are demanding new or expanded services and are not willing to pay additional taxes or fees to get them.  The growth of the internet and online services has fueled some of this demand and some innovative companies are providing high tech solutions to our cities and towns without placing an additional tax burden on the citizens. Before you jump into a partnership with any business partner, it is a good idea to do your research and make sure the agreement is fair to the city or town and not just a way for a company to get quick publicity or receive rewards without helping the citizens.

Bike rental programs are good examples of public-private partnerships.Local government partnerships can be divided into one-time opportunities or long-term relationships, depending on the type of service or relationship desired. An example of a one-time relationship might be a company that is willing to sponsor a piece of public art or assist in building an art center or museum. The city may offer up a site to place the work of art or building on public property and a private business or individual would fund the installation and costs associated with the project. While this seems like a fairly simple transaction, it is necessary to enter into a written agreement that spells out the obligations of both parties and the ultimate ownership and control of the donated objects or materials. Without a legally binding agreement, the city could find itself in the middle of a lawsuit or other action if it was unclear who “owns” or “controls” the donated item.

A city or other local government entity can also enter into a long term partnership with a private business to provide a beneficial service to citizens more efficiently or cost effectively than the city could. These partnerships have detailed agreements that outline all aspects of the relationship and generally last a year or more. They can be as simple as an agreement to place vending machines in city facilities or a multi-million-dollar sports arena that requires in-depth study and planning over many years.

With the overwhelming need for infrastructure in our nation’s cities and towns, partnerships have become a necessary and effective way to meet some of this demand. Toll roads and bridges are being developed in many cities and metropolitan areas to improve access and relieve traffic congestion in heavily populated areas. Even public utilities like water and sewer services are being privatized and many small to medium sized cities are entering into agreements with private companies to run their utilities. These decisions are very difficult for many cities to make since citizens have become accustomed to relying on their local, elected leaders to control rates and address service complaints.

One popular partnership program available to cities is the National League of Cities Service Line Warranty Program. This program has partnered with over 500 cities and towns to provide warranty coverage for citizens to cover failed water and sewer service lines. While these service lines are the responsibility of the homeowner, many homeowners are not aware of this and call their local government officials when a failure occurs. In order to provide a cost-effective solution to this problem, the National League of Cities developed a program that partners with cities and towns to offer affordable plans to cover the cost of repairing and/or replacing these lines. The city allows the program to use its logo on an educational letter that is sent to inform local homeowners about their responsibility for their service lines and offer an optional repair plan. The program covers all costs of the educational program and other marketing activities, allowing the city to offer a solution at no cost to its taxpayers.

While not all cities and towns have adopted public-private partnerships, they are rapidly becoming a way of life in local government and new opportunities are coming online each month. A good rule of thumb for any partnership is to deal with a reliable company and make sure to have a well written, legal agreement between all parties that spells out all aspects of the partnership. With this in mind, keep your eyes open and you might find an Amazing partnership in your city’s future!

Jim Hunt is a former Mayor and Councilmember for over 27 years and served as President of the National League of Cities. He was selected as “Municipal Leader of the Year” by American City & County Magazine and is a member of the West Virginia Municipal League’s “Hall of Fame”. He writes extensively on city issues and is the author of “The Amazing City-7 Steps to Creating an Amazing City”. He currently serves as an Advisor to the National League of Cities Service Line Warranty Program.