There’s nothing more annoying than people who say “I told you so”–especially when they told you so.
But, dammit, I told you so. Not that I was the only naysayer–not even close–but I posted several arguments against the privatization of Indianapolis’ parking meters.
So I’m going to be obnoxious, and share the lede of a recent report from the Indianapolis Star
In the five years since Indianapolis leased its parking meter operations to a private company, rates have skyrocketed, hours have expanded and the number of paid spaces has increased.
But the city is reaping only about a quarter of the dollars ParkIndy projected when it paid $20 million to the city to operate the meters until 2061.
Those of us who opposed this “deal” (a word that is beginning to take on Trumpian implications for me) raised several issues:
The fifty-year length of the contract. Even if the deal had been less one-sided fiscally, decisions about where to place meters, how to price them, what lengths of time to allow and so on have an enormous impact on local businesses and residential neighborhoods. They are decisions requiring flexibility in the face of changing circumstances; they are most definitely not decisions that should be held hostage to contracting provisions aimed at protecting a vendor’s profits.
Added costs to downtown development and civic events. More often than not, new construction interrupts adjacent parking. If the city is managing its own meters, it can choose to ignore that loss of parking revenue, or decide to charge the developer, based upon the City’s best interests. Street festivals and other civic celebrations also require that meters be bagged, and usually there are good reasons not to charge the not-for-profit or civic organization running the event. The ParkIndy contract requires the City to pay ACS whenever such interruptions disrupt its projected revenue from those meters.
Why privatize at all? This isn’t rocket science. There was never a satisfactory response to the obvious question “why can’t we do this ourselves, and keep all the money?” Why couldn’t Indianapolis retain control of its infrastructure, and issue revenue bonds to cover the costs of the necessary improvements? Interest rates were at a historic low at the time, making it even more advantageous to do so. If the Ballard administration was too inept to manage parking, it could have created a Municipal Parking Authority, as Councilor Jackie Nytes suggested at the time.
There really was no compelling reason to enrich private contractors and reduce (desperately needed) City revenues.
Why ACS? ACS is the primary partner of ParkIndy. There was extensive publicity about ACS’ performance problems in Chicago; there was also troubling information about the company’s track record in Washington, D.C., where an audit documented mismanagement, overcharging, over-counting of meters, and the issuance of bogus tickets (ACS got all the revenue for tickets). Washington lost $8,823,447 in revenue and experienced a twenty-fold increase in complaints from the public.
As I noted at the time, one of the problems with privatization in general is that it leads to speculation about cronyism and political back-scratching. In this case, the Mayor’s “personal advisor” was a registered lobbyist for ACS through the same law firm that employed the then-President of the City-County Council (who did not recuse himself, and whose affirmative vote was what allowed the contract to be approved by a narrow 15-14 margin.)
All of these criticisms were brushed aside as mean-spirited and uninformed. We were told that ACS/ParkIndy’s “expertise” would generate more revenue than would be realized under city management.
So, according to the Star, how’s that working out?
ParkIndy has collected $40.5 million in parking fees and fines since converting the first meter March 3, 2011. Projected over 50 years that amounts to about $426 million. The city’s take in a profit-sharing agreement has been $15 million, which would total about $158 million in 50 years.
ParkIndy estimated the city would earn $620 million over the 50-year life of the contract. To achieve that, ParkIndy would need receipts of about $1.5 billion, or more than three times its current pace.
Told you so.