Instead of fishing around for loose change, downtown drivers soon may have the option of paying for street parking with
their credit card or cell phone.
One thing is certain: The spaces won’t be getting any cheaper.
City officials are considering several modernization proposals designed to wrestle more revenue out of the city’s roughly 4,000 parking meters. They’re considering a range of proposals, including the possibility of a long-term lease to a private firm, a move that netted Chicago more than $1 billion last year.
One estimate pegs the value of a long-term lease of Indianapolis’ meters at more than $100 million. The meters already add more than $3 million per year to city coffers, but proposals from private firms responding to a city request for information say that number should be much higher.
For starters, they say the city’s hourly rate of 75 cents is well below the national average and should be raised. Multi-space meters that accept credit-card payments and a variable rate structure also would add to the bottom line.
Chicago put the windfall from a 75-year lease of its 36,000 meters mainly toward a budget deficit, but Indianapolis would use any proceeds to make badly needed sewer and road improvements, said Michael Huber, director of enterprise development in the Mayor’s Office.
He said the city hopes to make a final decision on the meters in the next few months. An Infrastructure Advisory Commission formed in March would set priorities for spending any new revenue.
The city also is seeking ideas for raising more money from city-owned parking garages and surface lots. The city and Capital Improvement Board control more than 10,000 off-street spaces. In 2006, Chicago hauled in more than $500 million for the long-term lease of several municipal parking garages.
Whatever route city officials choose for downtown parking, they should know the public still will view the service as a government responsibility, said Frank Del Monaco, general manager for municipal services at Connecticut-based LAZ Parking, which operates the privatized meters in Chicago for Morgan Stanley.
Parking customers in Chicago have given the arrangement a harsh reception, in part because the deal wasn’t structured as an ongoing relationship between the lease-holder and the city, Del Monaco said. The big upfront payment relied on major rate increases, taking some neighborhoods from 25 cents per hour up to $1. But while the city approved the increases, the private company took the heat when customers complained.
“Regardless of how a deal is structured, both parties are responsible in the court of public opinion,” Del Monaco said. “You can’t just wring your hands of it, and now it’s ABC Company’s problem.”
Any new approach to parking also should be holistic—taking into consideration maintenance, payment collection and enforcement, he said. In the case of Chicago, the city still is responsible for writing parking tickets and collecting fines.
Indianapolis also has a hybrid model, in which locally based Denison Parking handles meter enforcement, while city employees handle meter maintenance and the collection of coins.
The city pays Denison about $330,000 per year to provide at least five enforcement officers during regular business hours. In 2008, the city collected $2.2 million in parking revenue and $2.7 million from citations and spent $1.1 million on expenses (in addition to the Denison fee), leaving $3.5 million in income.
Denison, one of eight firms to respond to the city’s request, has proposed a long-term lease deal under which it would guarantee the city revenue of $3.3 million a year and 75 percent of all revenue in excess of $4.7 million. As part of the deal, the company would pay to install a $1.9 million automated multi-space parking system that accepts credit cards. The equipment, which the city tested in 2006, would become public property at the end of the term.
Denison would then partner with locally based Walker Parking Consultants to relieve the city of any role in on-street parking. The proposal does not give a length for such a deal or a proposed rate structure.
In another proposal, Bethesda, Md.-based IMG Capital said the city could double or even triple its annual earnings from parking meters, or generate a lump sum of more than $100 million with a long-term lease.
The firm suggests doubling the hourly meter rate to $1.50, extending enforcement times to 10 p.m. (from 6 p.m.), and using technology that adjusts pricing based on demand. It even raises the possibility of selling advertising on meters or on the spaces themselves.
A proposal from Dallas-based Affiliated Computer Services Inc. suggests pricing that escalates every hour to discourage all-day parking and keep more meters available during high-traffic hours. The firm says the city should find a private firm willing to install new meter equipment in exchange for a percentage of revenue collected over a period of time, rather than seeking a giant upfront payment as in Chicago.
ACS, which is under fire from state officials for its role in a $1.2 billion privatization deal for the Indiana Family and Social Services Administration, has operated the parking meter system in Washington, D.C., since 1997.
Chicago got a “ridiculously good deal” in terms of the bottom line, but the best approach for Indianapolis would be to look at any privatization deal as a partnership, said Mike Simmons, CEO of locally based T2 Systems, which makes software to manage the enforcement and collection of parking violations, including in Indianapolis.
He said the main advantage of naming a private vendor would be to modernize the meters and accept credit card payments without an upfront investment from the city. Of course, the city also wants to generate additional revenue.
Vancouver-based Verrus Mobile Technologies Inc. says the city could reduce parking meter costs more than 20 percent and raise revenue up to 50 percent by hiring the firm to collect parking payments by cell phone.
With the system, already in use in Dallas and Miami, customers call an 800 number to enter a parking space number, a credit card number and minutes requested. When the allotted time is almost up, the customer receives a text-message alert with an option to buy more time.
The system wouldn’t require an upfront cost to the city and also wouldn’t require investment in new meters. Instead, customers would pay a 35-cent fee per transaction. It also would enable the city to begin charging for street parking in areas not currently served by meters.
Another mobile parking provider, New York-based MobileNow, points out that phone-based systems generate additional revenue since customers would not get “free time” left over after another customer drives away.
Other proposals came from London-based KPMG, Michigan-based Carl Walker Parking and Vectren subsidiary Energy Systems Group.