FAQ: What’s a P3 Agreement, and How Does It Create Value for Municipalities?

Municipalities across the country are dealing with aging water and waste infrastructure, in addition to rising disposal costs. But typical public approaches to infrastructure upgrades, like design-bid-build, place all capital and operations risk directly on the municipality – an investment many can’t afford. 

However, the most well-known solution – privatization of municipal waste or water infrastructure – comes with significant drawbacks. When utilities are sold outright to private companies, the short-term cash infusion is often canceled out by long-term rate hikes, along with reduced accountability to residents.

That’s why many of our municipal projects are structured as P3 (Public/Private Partnership) agreements, also known as BOO (Build/Own/Operate). These agreements require no upfront capital from the municipality and transfer project risk off public balance sheets, allowing cities and towns to improve wastewater recovery without taking on unsustainable financial burdens. But unlike full privatization, municipalities keep control of their assets, while we assume the financing, operational, and compliance risk.

These 20+ year agreements allow projects to be delivered off municipal balance sheets, with no added costs for ratepayers, while remaining accountable to those ratepayers instead of private shareholders. The result is infrastructure delivered efficiently (often 20–30% cheaper than public builds) and managed in compliance for the life of the project.

Here are some common questions about P3s/BOOs from our municipal clients, and how we approach creating value for cities: 

What Do Cities Receive in a P3 or BOO Agreement?

Large-scale waste and wastewater recycling projects are major investments. A P3 or BOO arrangement reduces project risk for cities and municipalities while creating long-term, reliable revenue streams for both parties. 

With Burnham’s model, municipalities receive compensation from revenue generated by the project, at no cost or risk to the public. Depending on local needs, this can include:

• Wastewater treatment and reuse facilities: Financing, building, and operating advanced treatment plants that produce Class A reuse water, helping communities address water scarcity without new municipal debt.

• RNG upgrades: Adding pipeline-quality RNG equipment to existing digesters, with Burnham assuming full project risk under a long-term agreement.

• RNG + trucked-in waste: Increasing gas yields and tip fees by accepting outside waste, delivering potential royalty payments and regional investment.

• Nutrient recovery: Capturing nitrogen and phosphorus from wastewater or biosolids to create fertilizers that can be returned to agricultural markets.

• Biosolids management: Developing, owning, and operating solutions that lower biosolids disposal costs.

We also manage and maintain all Burnham equipment for the lifetime of the project. 

How do Cities Benefit from a P3 Agreement? 

Partnering with us develops additional revenue streams and royalty payments for municipalities, allowing them to:

• Upgrade and monetize resources: Convert AD-produced biogas into pipeline-quality RNG or use it for onsite energy generation.

  
  

• Recover nutrients: Capture nitrogen and phosphorus for agricultural and industrial use, turning waste into marketable products.

  
  

• Expand water supply resilience: Develop advanced water reuse facilities that provide Class A water without requiring new municipal debt or rate increases.

  
  

• Mitigate regulatory and operational risk: Transfer compliance obligations and long-term operational performance to Burnham under guaranteed agreements.

  
  

• Reduce landfill and disposal costs: Replace costly disposal with sustainable recovery and reuse solutions.

  
  

• Upgrade or replace aging facilities: Build new wastewater treatment capacity or revitalize existing infrastructure through fully financed, off–balance sheet agreements.

  
  

This model is built for long-term success. With 20–30 year contracts, Burnham assumes capital, compliance, and operational risk, while municipalities retain oversight and accountability to residents. 

What Do Cities Provide in a P3 Agreement?

In return for the services and benefits Burnham delivers, the city or municipality:

• Collaborates on permitting and approvals to ensure projects meet local and state requirements.

  
  

• Provides access to existing waste streams such as biogas from digesters, wastewater flows, or biosolids that Burnham can process into new value streams.

  
  

• Continues to operate and maintain the rest of the municipal plant, with Burnham assuming responsibility for the facilities we build, own, and operate.

Because Burnham fully finances, builds, owns, and operates its facilities, municipalities are not asked to take on debt, guarantee revenues, or carry operational risk. Their role remains focused on running their utility, while Burnham delivers, maintains, and guarantees the performance of its proprietary infrastructure. 

How Will My City’s Project Be Financed?

Every project is fully financed by Burnham. Municipalities do not need to issue debt, raise sewer rates, or use their own credit to fund infrastructure.

Unlike many developers, we have no financing contingencies: municipalities don’t have to wait for us to secure outside capital or go through a lengthy funding process. We arrive with financing in place and can move projects forward quickly.

To further mitigate risk, Burnham maintains $100M of bonding capacity and can provide a letter of surety upon request. These assurances give municipalities confidence that projects will be delivered on time, fully funded, and backed by enforceable guarantees.

How Is Burnham’s Model Different from Privatization?

Privatization typically means selling a municipal utility to a private company. While this may provide cities with a lump sum of cash up front, it also transfers ownership and accountability away from the municipality and community. In many cases, private owners prioritize shareholder returns, leading to unnecessary investments and higher rates once introductory freezes expire.

Burnham’s approach is fundamentally different. Under a BOO/P3 agreement:

• Municipalities retain ownership of their assets and remain accountable to residents.

  
  

• Burnham provides the capital, builds the infrastructure, and assumes compliance and operational risk.

  
  

• Partnership replaces divestment: instead of giving up control, municipalities gain modern infrastructure and new revenue streams without adding debt or raising rates.

This structure ensures communities benefit from private-sector efficiency and financing while preserving public ownership and accountability. 

How Does Burnham Guarantee That My City’s Project Will Reach Commercial Operations?

Burnham takes on schedule risks associated with the timely completion of the construction and commissioning of our projects. We are prepared to pay liquidated damages (LDs) if we don’t achieve schedule milestones by mutually agreed Longstop Dates. 

Our agreements include:

• Schedule guarantees: We commit to mutually agreed project milestones and are prepared to pay liquidated damages (LDs) if we fail to meet those deadlines.

  
  

• Compliance guarantees: If a facility ever falls out of environmental compliance, Burnham—not the municipality—is responsible for remediation, penalties, and corrective action. We work directly with regulators (state agencies, EPA) to resolve issues at our cost.

  
  

• Operational responsibility: We hire and manage plant operators for the infrastructure we build, removing that burden from municipalities.

  
  

• Risk transfer: Municipalities avoid the financial and regulatory risks they would otherwise bear under traditional delivery.

  
  

The only standard exceptions to these LDs are for delays caused by the municipality, utility, or government agencies. While those three causes are outside of our control, we ensure timely completion of all project aspects within our control.

How Does Burnham’s Model Compare to ESCO Agreements?

Some municipalities are familiar with Energy Service Company (ESCO) agreements, which focus on efficiency upgrades and performance contracting. While ESCOs can be a useful tool for small retrofits, they differ from Burnham’s BOO/P3 model in several important ways:

• Financing: ESCOs typically require the municipality to finance the project itself, while Burnham provides 100% of the capital.

  
  

• Risk transfer: ESCOs guarantee a portion of energy savings but leave compliance, operations, and financing risks with the municipality. Burnham assumes those risks directly under long-term contracts.

  
  

• Revenue generation: ESCO agreements focus on cost savings; Burnham’s model creates new revenue streams from RNG, nutrient recovery, water reuse, and other infrastructure solutions.

  
  

• Long-term accountability: ESCOs usually cover shorter project timelines and limited scopes. Burnham structures 20–30 year partnerships, with ongoing performance and compliance guarantees.

In short, ESCOs help municipalities improve efficiency with their own funds for smaller retrofit projects. Burnham delivers new infrastructure off-balance sheet: financed, operated, and guaranteed by us.

What Happens To My Project At The End Of The P3 Term?

Given the significant capital investment, P3s function best as long-term partnerships ranging from 20-30 years. At that point, municipalities can choose from several flexible end-of-term options including: 

• Purchasing the project at fair market value

  
  

• De-commissioning the project at Burnham's expense

  
  

• Extending the agreement, with new pricing and/or terms agreeable to both parties

  
  

To further derisk the project, we can also post a decommissioning bond.

Why Choose a BOO or P3 Model?

Cities often tell us they value Burnham’s approach because it balances private-sector efficiency with public-sector accountability. Our model avoids the pitfalls of privatization or limited-scope contracts by ensuring:

• Local control remains in place. Municipalities retain ownership and oversight of their assets, while Burnham manages the infrastructure we build.

  
  

• No debt burden for communities. Projects are delivered off the municipal balance sheet, with Burnham providing 100% of the financing (without long fundraising delays).

  
  

• Transparency and accountability. Long-term contracts include clear performance guarantees, so communities know risks are covered.

  
  

• Flexibility for the future. Agreements are designed for 20–30 years, but with options to extend, purchase, or decommission—ensuring municipalities can adapt to changing needs.

  
  

• Efficient project delivery. By leveraging private-sector procurement and management, we typically deliver projects 20–30% more cost-effectively than traditional methods.

Interested in Creating Value from Your Municipality’s Wastewater? 

At Burnham, we see P3s as more than a financing mechanism. For us, they’re a partnership built for our clients' long-term success. 

If you’re considering how P3 could be a better investment for your wastewater project, connect with our team of experts today to learn more: 

Contact | Burnham RNG