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City rolls out revised parking-meter deal

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The city of Indianapolis has revised a controversial plan to lease its parking meters to a private operator, but its efforts to make the plan more favorable haven’t appeased critics.

Under the revised terms, made public Wednesday, the term of the contract would remain 50 years, but the city would have a right to terminate the deal with a fee.

The city also would reap a smaller upfront payment for the lease in exchange for a larger revenue share over time to spend on roads and sidewalks in areas near the meters.

To provide the city more planning flexibility, Indianapolis would get to remove up to 200 spaces without paying a penalty to Dallas-based Affiliated Computer Services Inc. And the city would get to keep all revenue from advertising on the meters if the ads were initiated by the city.

Those changes were designed to address some of the key concerns voiced since the city unveiled details of the 50-year lease to ACS  in August. City leaders said they’ve met with concerned parties over the last few weeks.

“We listened to the public and listened to councilors and businesses,” said Michael Huber, the city’s deputy mayor for economic development. “We think we took a good deal and made it a better deal.”

But to those rankled by the idea of a long-term lease, the revisions are not enough to make the proposal appealing. Their principal concerns – that the city would limit its flexibility and that the terms are overly favorable to ACS – remain.

“There are some modest improvements, but certainly nothing that would make me think this is a great deal for the city to be undertaking,” said Aaron Renn, an urban policy observer and blogger who has studied the city’s original proposal in-depth. “I think (meters are) a bad candidate for leasing long-term in any case. There’s no reason you should do a 50-year deal. You shouldn’t tie the hands of future.”

Huber, however, said the city had provided itself with more flexibility by creating a provision for 200 spaces to be removed without charge. After the 200 cap is hit, the city would have to pay a fee based on a complex formula for meters removed.

Huber added that the city determined a 50-year lease was most advantageous to taxpayers because meters begin generating more revenue later in the lease as rates increase and more meters are installed.

The revised terms would allow the city to end the contract every 10 years, starting 10 years after its inception. There would be financial penalties for termination starting at $19.8 million after the first ten years and decreasing to $8 million after 40 years.

The city also would reap a smaller payment upfront – $20 million instead of $35 million – but its revenue over the 50-year lease would grow from $268 million to $515 million, according to city estimates.

According to city calculations, that means the city would take away $73 million between the upfront payment and the ongoing revenue in present-day value, compared with $67 million under the original deal.

The growth is based on a change in the formula that determines how much revenue the city reaps. Indianapolis initially would have gotten 20 percent of meter revenue to ACS’s 80 percent up to $8.4 million, and 55 percent to ACS’s 45 percent for revenues above that threshold.

Under the new terms, Indianapolis would get 30 percent of revenue up to $7 million and 60 percent of revenues after that.

Jackie Nytes, a City-County Council Democrat who has questioned the proposal, said vendor ACS still stands to benefit handsomely from the arrangement.

Based on the original proposal, an IBJ analysis estimated the deal could generate as much as $1.2 billion in revenue for the vendor, but the city’s financial advisers estimated ACS might earn between $177 million–$265 million in profit over the life of the contract.

The city’s calculations, based on the new revenue share, project ACS would reap between $700,000 and $1 million per year in profit in the initial years of the deal, Huber said. The city had not yet calculated how much ACS would receive over the 50 years under the revised provisions, but Huber said it would be a minimal decrease.

Nytes advocated for the city to handle the meter upgrade as a government function instead of outsourcing it.  But city leaders have balked at that notion.

“The object is to improve parking and grow revenues, not bureaucracy,” said Robert Vane, Mayor Greg Ballard’s communications director and deputy chief of staff.

The council will review the proposal in coming weeks. To move forward, the proposal must get the council’s approval.

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  • used cars for sale
    If Wall Street types are that hungry for this parking meter deal, who do you think wins in the end? The motivation is pure greed -- if it was truly better parking, the city can easily do that on its own. You are a city that closes libraries yet hands tens of millions in cold, hard cash to billionaire sports team owners. And you don't even get to see their books! Indy has come a long way the past 35 years -- please don't become the laughingstock of the nation because of your fiscal shenanigans. The privatized parking deal is just plain dumb.
  • A beginning to the downfall of the downtown economy...
    The cityâ??s parking spaces are services to the residents of Indianapolis, and their loss alienates the citizens and workers of our great city. Likewise, these changes will be detrimental to the economy of Indianapolis as those individuals who live outside of the downtown area will be less likely to visit, shop, or dine downtown. Less potential home buyers will consider living in the vast selection of condominiums and homes downtown given such parking constraints. Ultimately, businesses will be less likely to chose downtown as their home, and the downtown area will suffer.

    The lease of our cityâ??s parking operations equates to a loss of control of our city for a generation. Our citizens would be at the mercy of a profit seeking corporation for our parking needs. Approving this proposal in any form would be a mistake that the citizens of Indianapolis would not soon forget.

    To all councilors: PLEASE OPPOSE PROPOSITION 229!
  • 200 Jobs In Indy but Xerox Cuts Jobs
    Interesting article I found:
    Xerox profit doubles, but company to cut 2,500 jobs
    Published Thursday October 21st, 2010
  • Bend Over Indy
    City-County Council, Ballard, Daniels, Hubard, Roob, Vaughn, Barnes & Thornburg, and the other 20 or so I didn't mention need to READ Title 18, Chapter 11, Section 211 of the United States Code.
    Memorize the definition of RECUSE is "Those with a conflict of interest are expected to recuse themselves from (i.e., abstain from) decisions where such a conflict exists."
    REMEMBER Sworn in for the People, Elected by the People, to Serve the People. Oath? What Oath? 'I think the Real Housewives of Orange County was on during my swearing in ceremony.'
    Obama promised to â??tell the corporate lobbyists that their days of setting the agenda are over.â?? Someone needs to tell Obama that ACS buys up companies, chops them up in little pieces, lays off a bunch of people, and sells off the body parts for profit. How's that for being "over?"
  • wrong logic
    Some said that we should have a deal, because politicans would never have the guts to raise the parking rates (which is needed to generate more revenue and make capital improvements). So, it's better to have this bad deal. That's backward logic. How about voting people in the office who will be willing to make some unpopular decisions. And I don't even think raising parking rates, or indexing them to inflation would be that unpopular.
  • I'll Take "Jobs at ACS" for $200k, Alex
    Greg Ballard..."I haven't decided to run for reelection."

    Sure you have. Or at least you are being told by your puppet masters at B&T. Why else would you be rolling out the cosmetic "Building Better Neighborhoods," er, "Rebuild Indy," offering up "innovative" privatization deals like the ACS parking meter scam, providing a sweet-heart deal to Lilly for the No So project and offering Clarian a great deal on a project that most likely will not generate property taxes? Because you love the perks of your job and want to be reelected. It's a nice gig that allows you and Winnie to travel.

    You haven't done anything for three years and now, wham, you have to do something to influence the voters for the next year.

    Most of us were hoping you would finish your four, floundering years and not cause any damage. You are the City's worst nightmare come true. Selling the city for generations to come. You're a nice guy, but not the brightest tool in the shed.
  • Still a Rip Off
    With a name like Ballard and a pary named GOP it has to be rotten to the core for the people. Sell all our assets, cut all our services to libraries and schools, and we will have total nothing. It would be fitting for a name like Indina-no-place. Those who have thought up and entertained such an idea should be ran out off office, the sooner the better.
  • Indyman, Huh?
    Indyman, your basic argument is that because the City-County Council hasn't done its job and shown the political will to raise parking meter rates to better reflect the true cost to the city of providing "free parking," it should instead approve a sweetheart 50-year lease of a public asset to a politically connected company, one which has already screwed over the state in the failed FSAA privatization deal, simply because parking meter increases will be mandated under the lease agreement? It is an understatement to note that your logic is lacking. What the City-Council needs to do is issue bonds backed by parking meter revenues, raise parking meter rates, extend the hours, modernize the parking meters, and then keep all the revenue generated, rather than give up a huge chunk of the parking meter revenue to a private middle-man who will bring no added value to the city. There is absolutely nothing ACS is proposing to do that will make the parking system more efficient or more profitable, aside from raising the rates, extending the hours, and installing new electronic meters--all things the city can do on its own without contracting with ACS.
  • Vain
    The spokesmens name says it all;)
  • Fleecing of Indy
    Bottom line this city needs ALLLLL the revenue. Follow Pittsburgs lead who just said NO to sell out a revenue source to others.
  • What Vane Should Have Said
    â??The object is to improve parking and grow revenues, not bureaucracy,â?? said Robert Vane, Mayor Greg Ballardâ??s communications director and deputy chief of staff."

    Here's what Vane should have said if he wanted to tell people the truth.

    â??The object is to make a politically connected vendor who has contributed thousands of dollars to the Mayor's campaign wealthy, not do what is best for the taxpayers."
    • Recall Now!!
      How many times can one city be fleeced by its so-called leaders? Indy residents need to start a recall on all politicians who continue to push this legal criminal enterprise on its citizens. Let them know you've had enough! Is Chicago happy with their parking deal? NO, NO and NO (yeah, Indy will do it better).

      If Wall Street types are that hungry for this parking meter deal, who do you think wins in the end? The motivation is pure greed -- if it was truly better parking, the city can easily do that on its own. You are a city that closes libraries yet hands tens of millions in cold, hard cash to billionaire sports team owners. And you don't even get to see their books! Indy has come a long way the past 35 years -- please don't become the laughingstock of the nation because of your fiscal shenanigans. The privatized parking deal is just plain dumb.
    • May I suggest:
      1. Outsource negotiation of the parking problem to professionals with offices in Indianapolis most likely to feel the impact of any new arrangement.

      2. Negotiate with a competitor, preferably domestic, for alternatives to ACS proposals.

      3. Structure any arrangement as a short term lease with options. The 50-year term is a deal breaker.

      4. Forego the up front "payday loan" - it colors the public perception.
    • Dumb and Dumber
      Wow, just when you think Ballard's brain trust can't do anything worse, they top the $10 million gift to the Pacers with a plea of poverty for justification to give a parking monopoly to politically connected ACS in a terrible deal that can only be exceeded by their North South real estate taxpayer giveaway.
    • All Political
      I think the real question here is which politicians are in bed with ACS and how much do they and all their buddies stand to make off this deal? Wouldn't be surprised if Carl Bizzi is involved in all this!
    • How do you like it now?
      This is obviously a deal that will be done and never should have been negotiated with ACS. We already know they are crooks and incompetents (based on our own previous contracts with them as well as those of other cities). It is NEVER smart to do business with known cheats.
    • Compare
      Just came back from several days of meetings in Buffalo. Parking in downtown was $.50 per hour, two hours max. Meters were new kind, taking credit cards, etc., but don't know if they're city run or private. Of course, downtown Buffalo leaves much to be desired; sure is not downtown Indy but I still thought the comparison of meters was interesting. 50 years is ridiculous.
    • yeaaah
      The council still retains control over rate increase matters.
    • Priorities
      Why can't TIF funds be used to pay for upgraded parking meters instead of blowing $120 million on the Pacers and speculating on retail and another hotel development that private banks and investors wont touch?
    • Middleman With Nothing To Offer
      Why do we need ACS for anything?

      City should keep 100% of the profit and kick the politically connected ACS to the curb.
    • Here are two facts that explain why the city should do the lease. Indiana Toll Road was being subsidized by the State because the politicians did not have the politcal will to raise the tolls for more than 20 years.

      Indianapolis parking meters have not had a rate increase in 35 years(1975).

      Without the political will to raise rates, there is no way the City will ever make the money they could in the ACS deal if left to our own poltical will.

      If you put some sort of automatic rate increase mechanism tied to inflation or whatever, then the City may pull off doing it themselves. Of course if they go to buy new meters periodically because it will increase revenue, how many will scream that the money is better used for bus, library, schools, piano lessons or whatever?

      • City Likes the Deal
        1. Up front cash with taking on debt (wich would impact credit rating).
        2. No spend (either current funds or via new debt) to convert to new technology.
        3. City is not in unpopular position of raising rates every few years (which is reasonable).
      • No Need For Deal
        If the object is to improve parking and grow revenue, there is no need for this deal. Outsourcing the management of parking meters does not reduce bureaucracy, it shifts it to another organization. Who is getting theirs by receiving this deal? There is no need to give up any revenue on this "deal". The deal is a non starter.
      • Still sucks
        please expolain to me how we can fund the Pacers, Colts, Stadiums, Airports, Hotels for Lilly, etc etc but can't scrape up a plan to do this on our own? Nothing has really changed here other than the buy out plan, which makes ZERO sense.

        You can put lipstick on a pig, but its still a pig.

        Had Enough 2012.

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