One of the primary driving forces behind privatizations is the desire to provide cost-effective and less intrusive governmental services. In some cases, removing special tax advantages of municipally-owned utilities and cooperatives can increase state and local tax revenues significantly.
Successful government reforms focus on defining the core missions of government and developing methods to perform those missions. Successful reform plans seek to eliminate or privatize functions that are not essential. Such actions allow municipalities to better balance budgets, undertake large infrastructure development programs, and increase staffing for critical functions like fire and police protection. The advantages the private sector provides can include financing, transfer of risks, efficiency savings, specialized services not available in the public sector, higher quality services, faster and more efficient construction, and shorter implementation periods.
Numerous impediments exist which, if not adequately and objectively addressed, can make privatization initiatives disadvantageous.
- Regulatory or Statutory Changes
- Development of New Procurement Policies
- Performance – Based Sales Evaluation
- Institutional Resistance to Change
- Future Cost Recovery
- Loss of Control
- Quality Control of Ownership
- IRS Compliance
- Transfer of Risk to New Owner
- Policy Implementation
ERG personnel have the comprehensive capability in assisting municipal entities regarding the financing, procurement and management of asset privatizations. We provide the assistance necessary to define the right goals; select the assets to be privatized; develop procurement documents; develop public policy; design program statutory requirements; identify the best contractors; implement the privatization; and monitor performance.