Critics of parking proposal question $500,000 penalty

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Critics of the city’s controversial proposal to privatize parking-meter operations are questioning language in the contract they say would obligate the city to pay Affiliated Computer Services Inc. $500,000 if the agreement is not approved.

A section of the 154-page document stipulates that the city would compensate Dallas-based ACS for the amount if the contract is terminated.

City leaders, however, say the penalty would be paid only if the city or ACS breaks the 50-year agreement after the City-County Council signs off on the deal, not if the contract fails to win approval. An ACS spokesman said the company agreed with the city's position.

"The city would only be obligated to reimburse costs if, and only if, after the agreement was approved and signed, the transaction did not close as a result of a city action or breach," said Michael Huber, deputy mayor for economic development. "Please understand that the agreement will not be signed by the city or ACS until after all approvals have been obtained."

Democrat Jackie Nytes, a City-County councilor, is unconvinced, however. She said she and other councilors have read the section of the contract, and they interpret it to mean the city is responsible for the fee if the City-County Council indeed fails to give its blessing.

“Some councilors who may have cold feet about the deal, with a $500,000 penalty kicking in, might approve the damn thing because they don’t want to squander the $500,000,” Nytes said. “That’s political blackmail.”

Nytes said she favors the installation of new meters, but contends the city is capable of managing meter operations itself.

City leaders plan to appear before the Rules and Public Policy Committee Tuesday at 5:30 p.m. to answer questions and present additional information about the proposal. The committee needs to approve the contract before the City-County Council can consider it.

The city last month proposed the long-term contract with ACS as a way to modernize meters and raise capital for infrastructure improvements. ACS would pay the city $35 million upfront and give the city a cut of revenue that could total as much as $400 million for road and sidewalk improvements in areas near the meters.

Critics have said the deal would restrict the city’s flexibility when it comes to urban planning while raking in lots of revenue for ACS—perhaps as much as $1.2 billion, according to an IBJ estimate.

Democrat members of the committee have invited a guest to speak at the meeting—Aaron Renn, author of urban-planning blog Urbanophile.

The Chicago resident and Indiana native has made clear his opposition to the proposal in many online pieces he has written about the subject.

Renn told IBJ he generally favors privatization efforts and supported the city’s water company transfer, as well as the state’s  leasing of the Indiana Toll Road.

But the parking proposal is different, Renn insisted, because meters are profitable, unlike the Toll Road, which “never earned the state a nickel.”

“Even though the city is getting some value downstream, it’s giving away future value to get $35 million now,” he said. “That really doesn’t pass the smell test to me.”

Huber said the city welcomes the debate.

“On a proposal this complex, it’s fair the public raises questions,” he said. “They want to know the city is getting a good deal, so we’ll take whatever time they need to answer those questions.”

The Rules and Public Policy Committee will meet in Room 260 of the City-County Building.


  • Affiliated Computer Services Disgraceful
    Joe Loftus is the cityâ??s chief statehouse lobbyist and a counselor to Mayor Greg Ballard. The cityâ??s lobbyist registration shows Joe Loftus as registered to lobby for ACS, the company Ballard chose to award the potentially billion dollar parking meter privatization to.
    Mitch Roob former vice president with ACS Inc. Roob was picked by Gov. Mitch Daniels to head Indianaâ??s largest state agency, the Family and Social Services Administration where Roob was the former Secretary of FSSA â?? better known as the Welfare Slum.
    State Rep. Eric Turner and his son Paul Ezekiel Turnerâ??s company, was in negotiations to buy the former Jones Middle School from Marion Community Schools. The school board voted to sell the building for $350,000 to Mainstreet Capital Partners LLC, a joint venture between â??Zekeâ?? Turner and his father. after receiving nearly $200,000 a year from ACS, the property has been assessed in excess of $7 million.
    A guy named of â??Skipâ?? Stitt. I wonder what Skip is doing these days? Oh, you hadnâ??t heard? An officer with ACS.
    Well, that explains why ACS gave its maximum allowable corporate donation of $5,000 to Daniels in 2008, and why Stitt gave $2,500 out of his own pocket. Campaign finance records also show $2,000 from Maryland native and ACSâ?? Chief Operating Officer Tom Burlin. Why would a guy from Maryland give to an Indiana Governor?
    Then again, ACS wrote Governor Daniels a check for $5,000 in January of 2009. ACS also gave $2,000 each to the (R) Senate Majority Campaign Committee and the House Republican campaign committee, as well as $1,000 to the Indiana House Democratic Caucus.
    This is just to mention a few.
    We still have a list of names and conflicts of interest with Affiliated Computer Services call center CEO's in Indianapolis which most articles fail to mention.

    â??Now the new numbers have emerged with regard to the failed IBM deal, showing that the state spent $500 million on the failed deal, $442 million of which has gone directly to IBM as of the end of August. Guess where another $59 million has gone? Thatâ??s right. To ACS.â?? (nuvo)

    If you want interesting insight into how ACS and FSSA have failed, google Carl Moldtham a few of the articles written of how Roob and his InBed Buddies treated a man trying to do the right thing.

    Where's Washington's FEDS and the FBI?
  • Ballard in Bed with ACS
    I agree Lenore Hanick.
    Public officials are supposed to be trustees of the commonweal, not political
    buccaneers seeking their own private gain. But sometimes, in what economists call a
    â??principal-agent problem,â?? those trustees forsake that obligation and misuse the power
    delegated to them in ways that advance their personal interests rather than those of the
    Corruption distorts the allocation of resources toward projects that
    can generate illicit payoffs. Besides the undesirable efficiency consequences arising
    from this distortion, the effect is likely to aggravate social inequalities, because the poor and powerless suffer, by definition, a comparative disadvantage in securing special favors.
    Ditch ACS and tell them to go back to TEXAS.
  • ACS Unethical
    If the $500,000 has to be paid if the City-County Council will not vote for the ACS deal. Pay ACS's political blackmail scheme and get them out of town. Like all the other commentaries together with articles I've been reading have showed, ACS is not the kind of corporation we want in our town. Political blackmail, special interests, conflict of interests, WHERES THE FBI? WHERES THE FEDS?
    Has anyone ever read ACS Ethical Standards they try to impose on their employees at the welfare office. Their employees aren't allowed to accept even a Christmas card. Yet the CEO's and Directors of this company have done just that.
    ACS is a shameful, unethical, disgraceful hypocrite, not to mention the so called "leaders" of Indianapolis for creating this mess.
    What an embarassment to our city.
  • Sick to my stomach
    Are these people for real? Why would the city council, Mayor, Huber even consider such a deal? So ridiculous!! And we voted these people into office? Seriously ACS needs to hop on out of Indiana and get back on the "greed train" and find another blackmail scheme in some other city. ACS better known as Affiliated Computer Services has made serious havoc out of the welfare office, one of the most IMPORTANT offices in our state. Now they want our city to fork over and trust them with a 50 year deal. WHERE'S THE SIMPLE COMMON SENSE IN THIS? I don't have a business degree but I can at least say I know this is a bad deal. Actually, my family and friends have discussed moving out of Indiana. Our leaders in Indiana seem to be getting worse.
    INDPLS citizens, DONT LET THIS HAPPEN - TAKE A STAND! ReFreakinDiculous!
  • Falling apart?
    Looks like their parking scheme has been called out for what it is - a beneficial deal to the Republican Party elite (Bob Grand, Steve Goldsmith, Joe Loftus) and now Ballard Boys are backpeddaling. All kids of media are hammering on this deal.

    Oh dear, can this get any worse for them?
  • Recall Now!
    If this parking meter fiasco is not withdrawn the good citizens of Indianapolis should start a recall campaign for the mayor and any council members in favor of it. I can smell this rotten deal all the way out here in California. When Oakland recently tried to jack up meter rates and keep them running into the evening, citizens revolted, organized council recalls and within a matter of weeks the nighttime enforcement was rolled back. Indy, you've done a lot to graduate from being Indiana-no-place -- don't sell out. It's truly unbelievable what was done to underwrite the billionaire sports team owners while you close your libraries for lack of funds. You were once a national model of municipal government -- now you're looking not just incompetent, but plain stupid and perhaps corrupt as well. Start the recall now!
  • Bag of BS they are selling
    What a load of BS, these Ballard Boys are off their rocker. As Clifford points out, STOP LYING. Millions for the PACERS and COLTS, but double up your parking rates? Shipping profits out of state? 50 year contracts? Ballard and his cronies are desparate. This is the worst move ever.

    ...but not surprising coming from this hapless group of misfits.
  • Not a Believer
    Last week Huber said the City did not have the capability of financing $7 million for new meters. This week, the city is financing/underwriting a hotel deal for $86 million. I think Huber is a liar. Don't believe a word of his spin.
  • One more reason
    The $500k penalty is just one of many glaring reasons why we shouldn't approve this contract. The others have been very well covered previously by IBJ (Loftus representing both sides; ACS failure in other state contracts; locked in without taking city's changing needs in next 50 years; and many others).
  • Billable Hours
    Can anyone in the city administration justify why there were 1.5-2.0 million in legal fees for this "cut and paste contract? The current administration spends entirely too much in tax dollars on outside legal fees.
  • take the penalty provision out
    Just take the penalty provision out of the contract. Why would Indianapolis sign a contract with a penalty provision at all? We didn't even draft the document, which is just a boilerplate cut and paste job of ACS's other city contracts. Any good transaction attorney will tell you the city of Indianapolis ought to be drafting the contract itself, provision by provision, rather than just signing off on the ACS generated document. Who's handling these contract negotiations for the city, anyway? Two dozen cities worldwide have recently modernized parking meter operations. All those contracts are obtainable. We ought to carefully draft a contract we intend to be bound by for 50 years. One provision at a time.

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  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............