With so many state and local governments today in crisis due to dried up credit markets and lowered tax revenues, it is no wonder local governments are broke. Now is the time to look at new and creative Public-Private Partnerships (P3) or Transitional Benefit Corporations (TBC) processes to enable government to do for them, what it cannot alone. Counties and municipalities around the country could actually divest themselves of their IT infrastructure (government run departments which are very heavy on the budget bottom line of governments) by turning over ownership of all assets, software licenses and personnel through a IT purchase agreement process, in which a third-party developer would own, run, improve, and maintains IT infrastructure for city or county school systems, or public health hospitals, if granted a very long-term 10-15 year contract. The P3 partner would be able to provide more capital improvements and investment, to upgrade skill sets, and certifications through established contract payments coming from “several” revenue streams. The 1st revenue stream would be directly from the government body, (the base contract) with a set annual firm fixed priced amount for services rendered, and would include maintenance. The 2nd stream coming from any long-term bonds that could be floated by government or a 501 c3 organization, with a third and forth set of revenue coming from commercial sources of business that the P3 partner or the Transitional Benefits Corporation* would acquire through marketing and obtaining commercial contracts for IT support with banks, insurance firms, etc to help grown revenue. With secured financing and long-term contracts, the P3 contractor would be able to make the continued investment in IT infrastructure that governments cannot on their own, especially at this time. So how does California and local governments dig their way out of the graveyard they are headed towards? Easily, by being and thinking strategically and creatively about what they MUST do, not just what they should do for the moment. What are you do when those aging “servers” in your data centers crap out on you? Haven’t thought about that huh? You need to soon. For those with concerns about relinquishing IT control and quality, the contract agreement would be a well-thought out, reasoned vehicle that would mutually benefit both sides (government and industry). Government would still maintain an oversight role for the life of the P3 or TBC contract, and all future terms, as with any other contract, but with much less staff. The current staff would have been pushed to industry. Further, with the TBC process, all former government employees would NOT lose their retirement or health benefits if they were evolved into a TBC arrangement. In fact, if a TBC took place and was well-planned those former government employees could end up millionaires much earlier than if they remained working in IT for the government at a set or even better yet, declining salary. *TBC is a patented process created by Steve Sorett, Esq., McKenna Long & Aldridge LLP. Interested? Call me today for more information at 703-919-4617. Robert Knauer, CPCM CPPO and I will be happy to discuss with you, and your government agency the TBC or P3 process.