There is a big lesson to learn from a couple of small ski hills in North York.
These are recreational facilities owned and operated by the city. In wintertime they offer skiing and snowboarding. Residents can rent equipment and purchase refreshments. Unfortunately they operate at a loss. With huge financial pressures everywhere in the recreation and parks portfolio, council approved the idea to seek a private operator. City staff advertised the opportunity, then especially invited seven operators. Three bid packages were purchased. But in the end no one came forward.Elsewhere in the City of Toronto, the attempt to establish public private partnerships have had a checkered history. One of Canada's largest engineering companies has walked away from the downtown rail link to Pearson airport. It has been taken over by Metrolinx. In Scarborough, the publicly owned Guild Inn went through three failed requests for proposal, only to finally get a commitment from Centennial College.Yet on a smaller scale, there is success. For example, boards throughout the city operate tennis courts, arenas and even a curling club.But such small ventures are not the key examples touted by advocates and mayoral candidates alike. Public private partnerships are touted to reduce costs and relieve the city of debt, while providing excellent service. Examples are drawn from around the globe and, for a retainer, consultants will be happy to show the benefits of privatizing almost any operation.The difficulty is in reconciling Toronto's experience with the promises. Without a doubt there are successes elsewhere. Repeating them in our city will be a challenge.To start, one must look at basic differences in goals. Reviewing the terms of the request for proposals for the ski hills is instructive. Proponents were told what services to offer, which they could not, and how to offer them. They were subject to municipal regulation on a huge range of matters. Capital requirements and maintenance issues became complicated. Performance would be guaranteed by letter of credit. While there might be a good public policy reason for every restriction, each had a cost. On the other side, the only goal of a profit seeking enterprise is its economic viability. If a business cannot achieve a return in one endeavour, it will find another. Over time it will develop skills in delivering its product or service competitively.There is nothing wrong with achieving public policy goals at competitive cost. The trick is to recognize that the public and private perspectives are different. Public policy is often expensive. On the other hand, private delivery cares little for social impact. As the ski hills and airport link show, finding enough commonality so that both sides work together is difficult.But it can be done. Successful examples do exist for recreational facilities, transit systems and even waste removal. They require recognition that each side has legitimate goals, and that both must succeed for a viable partnership. In Toronto's case, that means taxpayers will probably still need to subsidize public policy goals, while giving operators the scope to be entrepreneurial. In some areas, such as the city's low cost of capital, there is no point in getting outside assistance. On the other hand there may be considerable benefit in areas where there is the need to be customer driven, such as in transit operations.Achieving partnerships between the public and private sectors takes much more than simply issuing a request for proposals. Instead, it takes acknowledgement of the goals, benefits and risks of each side. No one said it was going to be easy.