Announcing the six new members of the OGP Steering Committee

Emerging Technology, Government Business

Article | October 7, 2022

The pandemic has blown up entrepreneurs and start-up ecosystems, so government support for start-ups has become critical. The majority of them faced cash shortages and a lack of venture capital. For start-ups, cash is the most pressing issue. Furthermore, start-ups experienced a slow fundraising process accompanied by investor indifference. Furthermore, the global workforce was not left untouched by the spillover. Start-ups began to lay off employees and reduce pay. According to StartupGenome research, three out of every four employees were letting their employer down. While 39% of them laid off 20% or more of their workforce, two-thirds admitted to laying off 60% or more of their full-time employees. In the United States, the economy experienced the sharpest decline in employment, with 20.5 million people losing their jobs. Following that, in order to address this and reduce the pandemic's impact on start-ups, the governments of many countries have stepped in to save their country's start-up ecosystem. We've listed a few of the government's initiatives to help start-ups during the current cash crunch. Direct grants and zero-interest loans: Right now, cash is the most important concern for new businesses. Grants are regarded as the most beneficial policy instrument (29%), followed by loans (12%). Access to venture capital investment: If history is any guide, venture capital activity will likely decline in 2020 as well. This creates a quandary for the 18% of start-ups that require access to financing tools to increase investment. Employment support schemes: COVID-19 has had an impact on workforces all over the world. The US lost a record 20.5 million jobs in April, the fastest and sharpest drop since the government began tracking the data. Given these circumstances, it's no surprise that 17 percent of start-ups rank immediate employee protection as one of their top priorities.

Government Business

Article | March 11, 2022

We’re starting to get the first independent analysis of the impact of the measures the U.S. Congress has passed to provide relief will have on the U.S. government’s fiscal situation. The Committee for a Responsible Federal Budget is first out of the gate with its preliminary findings, here is their main takeaway: Our latest projections find that under current law, budget deficits will total more than $3.8 trillion (18.7 percent of GDP) this year and $2.1 trillion (9.7 percent of GDP) in 2021. We project debt held by the public will exceed the size of the economy by the end of Fiscal Year 2020 and eclipse the prior record set after World War II by 2023. Keep in mind that prior to the coronavirus pandemic, the U.S. government was planning to spend $4.8 trillion in its 2020 fiscal year, borrowing $1.1 trillion. With the CRFB’s estimate of $3.8 trillion, the U.S. government will be borrowing more than the $3.7 trillion it had hoped to collect in taxes for the year.

Article | May 27, 2021

On April 8, 2020, the Federal Trade Commission (FTC) – a United States government agency that is the nation’s primary privacy and data security enforcer – issued guidance to businesses on the use of Artificial Intelligence (AI) for machine learning technology and automated decision making with regard to federal laws that included the Fair Credit Reporting Act (FCRA) that regulates background checks for employment purposes.

Article | September 18, 2020

Taxpayers, citizens, and industry leaders may not be totally familiar with Public Facility Corporations (PFCs), but that should change, especially now since public funding for critical projects is at an all-time low. PFCs are becoming somewhat common in many regions of the country. If the legal entity (PFC) is not familiar, here’s a bit of background. A PFC is a nonprofit corporation created by a sponsoring governmental entity — a city, county, school district, housing authority, or special district. PFCs have broad powers over public facilities, including financing, acquisition, construction, rehabilitation, renovation and repair. A PFC, once created, has the authority to issue bonds on behalf of its sponsoring public entity and once the bonds are funded, the money can be used in numerous ways. This type of legal entity has gained attention because public officials with critical projects are being forced to seek alternative funding sources. In Texas, public facility corporations are allowed the broadest possible powers to finance or provide for the acquisition, construction and rehabilitation of public facilities at the lowest possible borrowing cost. A sponsor — such as a municipality, county, school district or housing authority — may create one or more of nonprofit public facility corporations. Then, the PFC can issue bonds for the construction of public facilities or finance public facilities or even loan the proceeds of the revenue to other entities for specific purposes. A report that was released by The University of Texas School of Law found that a house bill approved during the 2015 legislative session “expands the authority of public facility corporations and allows the corporation to exercise any power that a nonprofit corporation might exercise and/or grant a leasehold or other possessory interest in a public facility owned by the PFC.” Here’s a bit more background of what is happening in Texas and there are numerous similar examples throughout the country. The El Paso Independent School District (EPISD) several years ago created the EPISD Public Facility Corporation to fund construction of central offices through non-voter approved bonds. The corporation issued more than $29 million in bonds. The plan called for the EPISD to repay the bonds with general fund dollars from the district's general fund. The 2019 Texas Legislative Session ended with a $4 million rider added to the state appropriations budget. The money was provided to the city of Port Aransas to build a $36 million apartment complex for affordable housing. Plans call for the 200-unit complex to be operated by the Port Aransas Public Facility Corporation. The corporation will work in partnership with a private company to develop and manage the property. An investment of approximately $14 million came from the private sector partner, and the Texas Department of Housing and Community Affairs provided an additional $18 million in funding. Site work on the project began in July 2020. Many school districts have created public facility corporations for construction projects for schools, and many municipalities have also used PFCs. The revenue from these types of bonds is sometimes called lease-revenue bonds. They do not require voter approval. Public facility corporations do not have the authority to raise tax rates, but it is possible for a school board to approve a property tax increase to make payments on the bonds sold by a PFC. The city of Tioga, located in the Sherman/Dennison region of Texas, constructed a new high school with funding from a public facility corporation. A collaborative initiative was launched with a lease-purchase agreement which allowed the PFC to hold title to the land and facility until the investment was repaid. At that time, the agreement calls for everything to transfer back to the district. Because the current campus was reaching its maximum capacity, a new high school campus had been a priority for the district and this was the funding mechanism selected. The city of Fate in Rockwell County recently embarked on a public-private partnership to develop an affordable seniors housing community. The projected cost is approximately $30 million. To fund the project, the city created a PFC. Plans are for the city to handle the design, construction, and management of the project in collaboration with the PFC. City leaders will appoint board members to the funding corporation which will then operate the development as a nonprofit. The project is anticipated for completion in January 2022. There are similar types of alternative types of funding options in other parts of the U.S. In Utah, for instance, the Park City Board of Education approved a PFC which will allow the district to secure revenue for a number of master plan projects. The projects have a combined projected cost of $122 million. The school district had considered the funding option of general obligation bonds, which would require voter approval, but elected to create a Local Building Authority (LBA). This funding option will allow them to fund an expansion of a high school facility to accommodate ninth-graders and expand another campus to allow for eighth-grade students. Public officials, legislators, government contractors, and taxpayers all should have an interest in watching PFCs as well as other alternative funding sources. Until traditional public funding becomes more available for critical public projects, there will be a need for various types of funding solutions. Mary Scott Nabers is president and CEO of Strategic Partnerships Inc., a business development company specializing in government contracting and procurement consulting throughout the U.S. Her recently released book, Inside the Infrastructure Revolution: A Roadmap for Building America, is a handbook for contractors, investors and the public at large seeking to explore how public-private partnerships or joint ventures can help finance their infrastructure projects.