Parking meter deal is boon for city

September 25, 2010

Mayor Greg Ballard has pledged to find cost-effective ways to provide essential city services. The proposed parking transaction with ACS is another example of the mayor streamlining government, maximizing the value of existing assets, and securing millions of dollars for infrastructure improvements.

Indianapolis’ parking meters are underperforming—to the detriment of our city’s taxpayers. Mayor Ballard’s proposal nets tens of millions in upfront capital, while preserving a net annual revenue stream of roughly $5 million for the next 50 years.

Also, by law, the proceeds from this proposal can only be spent on the infrastructure where the meters are located. In 2008, the road resurfacing budget for the entire county was $11 million. The streets where the meters are located are but a small fraction of all the roads in the county, thus, this $5 million will have a tremendous impact.

Many thoughtful critics have asked about how this deal restricts urban planning in the coming decades—the answer is, it doesn’t.

Because of the revenue stream, future mayors will have ample monies to pay for infrastructure improvements, changes to existing streetscapes, moving of meters, and other contingencies. Mayor Ballard could have taken all the money upfront, but he didn’t for two reasons:

• We already have substantial, unprecedented funds from the transaction with Citizens Energy Group.

• He wanted to leave significant funds for use by subsequent administrations.

It is not cost-effective for the city to issue parking-revenue bonds to do this on our own. Revenue bonds are issued based on past performance—the performance of our meters has been substandard for decades.

Finally, the city is responsible for the debt service if bonds are issued and the utilization, parking revenue and growth assumptions are crucial to any financing. If the parking system doesn’t reach the assumed revenue or expense targets, other funds from the city will be needed to the pay for debt service.

We welcome input from councilors, stakeholders and the public.

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Michael Huber
Deputy mayor for economic development
 

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