Empowering the Public-Private Partnership. George V. Voinovich

I really did not feel challenged, and making money alone was not my reason for being in business. So when this opportunity just hit me in the face, I said ‘Yes’ without thinking. It was a good decision because one can really make a difference in city government, and I felt I was doing that.”³

      As Ed’s words convey, there are still people in America who believe in Abraham Lincoln’s definition of government: “The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities. In all that the people can individually do as well for themselves, government ought not to interfere.”⁴ And I would add this: the community should not wait for the government but instead should join with it to achieve those goals. The government is just one thread in the fabric of the community, and I believe that a leader’s highest calling is to empower people and channel their energy and resources to help solve problems, meet challenges, and seize opportunities.

      I also believe that it is a leader’s role to reach deep into every individual, draw out the goodness that’s inside, and inspire them to use it to help their families, their neighbors, and their communities.

      So I have decided that with the time I have left, I want to do all I can to promote P3s, which, as this handbook will show, are among the most practical, efficient, and effective ways to improve the quality of life for our citizens, whether they live in large cities, suburban enclaves, or small towns.

      When local governments have a new executive or new council members, it’s a good time to revisit city operations, just as a company would review its corporate operations under new leadership to determine whether it is doing its efficient best for its shareholders.

      So how do you start? A successful P3 begins with the recognition of a need by both public and private sectors. Businesses, nonprofits, and foundations must be ready to respond to a call for help from the public sector, or they may take the initiative and express their willingness to help by providing human capital and, possibly, financial resources. Similarly, when need arises, public officials must reach out for help or respond positively when an offer from the private sector presents itself. I have observed that too often, public leaders do not understand what a fantastic resource they have in the private sector, and that on the private side, businesses can be reluctant to get involved in the politics of city governance. Citizens may believe that corporate action is about only corporate interests, as opposed to the public interest. These potential causes of misunderstanding underscore the need for openness and transparency from both public and private actors.

       The Genesis of the Cleveland Public-Private Partnerships

      Let’s recall what Cleveland was like in 1979. The comedian Rich Little made Cleveland the butt of jokes in his stand-up routine. Johnny Carson, host of The Tonight Show, took a poke at our city by saying, “Will the last person leaving Cleveland please turn off the lights?” That was when Cleveland was known as the town where the river burned and the mayor’s hair caught fire.

      But joking aside, Cleveland did have severe problems. In 1978, Cleveland became the first city since the Great Depression to go into fiscal default after declaring that it could not pay off $15 million in short-term notes held by local banks.⁵ Later, the State of Ohio declared that the city’s finances were unauditable.

      How did it come to that?

      As is usually the case, it wasn’t any one thing but a combination of many that had created this dire situation. Years of financial mismanagement were followed by the use of one-time revenues, such as the proceeds from the sale of the sewer system to the regional sewer district for $32 million in 1972 and the sale of the municipal transit system to a regional transit authority for $8.9 million two years later. A paper contracted through the Brookings Institution concluded that Cleveland was a virtual ward of the federal government because it received $100 million annually, almost as much as the city collected in property and income taxes.⁶

      The city’s infrastructure had deteriorated, as roads, bridges, sewers, and water lines buckled and crumbled. Some suburbs were suing to take control of the city’s water system and incorporate it into a regional system. Unemployment was high, and litter lay strewn about the streets.