Friday’s City Council meeting provided an instructive glimpse at both the promise and peril of public-private partnerships. Most of the headlines that came out of that meeting focused on the debate over the value of a publicly owned Wi-Fi system, but another, more obscure, agenda item may have been even more important as citizens attempt to grasp how a city ought to be doing business.

The argument for publicly owned Wi-Fi was effectively scuttled by the fact that the city simply does not have the resources to invest the $20 million necessary to build the system--hence the decision to allow a private company to reap the rewards of that investment. Opponents of the public model also pointed to the “unsettled” legal and regulatory environment in which such a system would be operating. Those risks, they said, were simply too high to gamble on with taxpayers’ money.

And, yet, earlier in the meeting these same council members voted to approve--without debate--a $5 million line of credit to a private software company, iDSS, which is working with the Greater Minneapolis Convention and Visitors Association (GMCVA) to develop and market a Web-based application that will improve convention and visitor bureau services. Proponents have long claimed the partnership will generate huge profits for GMCVA and thus relieve the city from subsidizing the agency. The loan, the third granted in the brief history of the partnership, now puts iDSS $10 million in hock to the city. If iDSS fails to deliver the promised revenues and defaults on the loan--which it was dangerously close to doing before Friday’s vote, GMCVA would be liable to cover the debt. But GMCVA, of course, is heavily subsidized by the city and, in a worse-case scenario, would have to curtail its own services in order to pay off the debt.

All this leaves the city in a no-win situation with regard to iDSS and provides an ironic subtext to the council’s decision to forego the publicly owned model with regard to the Wi-Fi deal. Despite government’s recent penchant for embracing these sorts of partnerships as a way of stretching the public purse, they don’t always work out as expected.

We don’t disagree with the council’s decision to reject the public Wi-Fi model; given all the other demands on the city’s general fund, it’s exceedingly difficult to justify expending resources on a citywide wireless system--even if the city had the money to do it. But we would hope that the council and the mayor, who have been waxing poetic on the beauty of the public-private model in the past week, have learned enough from the iDSS debacle to prevent a similar disaster from occurring as a result of the Wi-Fi deal.