Indianapolis’ decision to lease its parking meters to a private company so far appears to be financial boost for the
city.
An agreement reached in November called for Dallas-based Affiliated Computer Services to give the city $20 million upfront
and an estimated $363 million to $620 million in meter revenue over the life of the 50-year deal.
ACS in March began spending up to $10 million to replace the city’s coin-operated meters with
newer versions that accept credit cards. Hourly parking rates since have risen from 75 cents to $1 in Broad Ripple and in
some busy downtown areas, and ultimately will rise to $1.50.
More than 100 electronic pay boxes have been installed downtown, with others slated for Broad
Ripple within a few weeks. (IBJ Photo/Scott Olson)
Total revenue from meter operations grew to $1.7 million in the quarter ended June 30 from $1.3 million in the same time
frame a year ago.
The city’s share of that revenue totaled $498,273, compared with $108,265 it made from meter operations from March
through June a year ago—a whopping 360-percent increase.
Marc Lotter, communications director for Mayor Greg Ballard, attributed the increase to higher parking rates coupled with
fewer expenses. Under the contract with ACS, the city no longer is responsible for maintaining and upgrading meters.
The additional revenue the city earns from the agreement is earmarked for street, sidewalk and alley repairs in metered areas.
“It’s not only the [extra] revenue but the convenience of the new meters,” Lotter said.
The city chose ACS to handle meter operations last August, then revised the terms of the agreement two months later after
public opposition mounted to the original plan. Changes gave Indianapolis greater flexibility in removing parking meters and
the option of terminating the contract every 10 years.
Opponents had complained the initial deal was short-sighted and riddled with hidden costs.
Fruit of the agreement can be seen throughout downtown. Scores of meters, including those fitted earlier this year with new
heads to accept credit cards, have been removed in favor of small numbered signs and pay boxes.
Downtown motorists punch their space number into a pay box and use either credit cards or coins to select how much time they
will occupy the parking space.
The boxes have been installed on streets that have at least five meters clustered together. The boxes give streets a cleaner
look, ACS spokesman Chris Gilligan said.
“Pay boxes clear up the streetscape,” he said. “They’re embarrassingly simplistic [to use.]”
The electronic boxes alert operators when they need to be emptied of cash or serviced.
More than 100 pay boxes have been installed downtown, and about 60 are operational. The rest are in testing phases to ensure
they operate correctly, Gilligan said.
The latest pay boxes to become operational are on Pennsylvania Street between Washington and Market streets, on Alabama Street
between Market and New York streets, and on North Hudson Street between Ohio and New York streets.
Installation of pay boxes in Broad Ripple will begin in the next few weeks.
Most meter work should be finished by the end of the year, Gilligan said. The exception is on Massachusetts Avenue, where
roads are being resurfaced and sidewalks and curbs replaced. Work is expected to be finished next fall.
Paying to park should get even more technologically advanced, however. A smart phone app that allows users to feed a meter
without even stepping outside should be available within the next few weeks, Gilligan said.
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Please tell me what part of the 300% increas in revenue was attributable to anything unique to ACS or the lease of the parking meters. Raising rates, extending meter hours, adding meters to new areas, and increasing enforcement are all things the city could do on its own WITHOUT the involvement of ACS. I should hope the city's revenues increased after doing all the above.
Again, the question I and others have posed is valid, what is ACS bringing to the equation that the city could not do all on its own, or with the help of contractors? Why was this lease required and what is the ADDED VALUE of the lease to the city?
Many cities have successfully increased parking revenue by raising rates, extending hours, installing new meters, and ramping up parking enforcement without leasing out their parking systems.
If I have time, I will figure out (or find if available) their current operating expenses, because that would be interesting to see considering the claim made in this article.
Facts are facts. Numbers don't lie, and I was pointing out the obvious (and not comparing apples to oranges like this article does).
I hope the author of this article follows up with Marc Lotter and asks the right questions. You don't have to be an accuntant to question their optimistic presentation.
Now, the subject of the article is the city's lease of its parking system. So far, neither you or Gil have stated any facts or even well-educated guesses as to why the lease may be either a good idea or a bad idea.
If you have something worthwhile to contribute, then please post and be prepared to discuss and debate accordingly. However, if you just want to make silly and childish comments, then find another message board forum to play on.
Most people, including myself, do not object to paying for street parking, or even to having parking meter rates increased after 35 years of paying the same rate. What we do object to is the city cutting a sweetheart deal with a private company to turn over control of the parking system to do something the city had the financing authority to do on its own, without giving up either control or the bulk of the parking meter revenue.
To date, ACS has spent about $4.1 million installing new parking meters and related infrastructure, not the promised $10 million. They now lease the parking system and oversee its operation, and for this they get the lion's share of the parking meter revenue generated.
There is nothing that would have prevented the city from using its bonding authority to raise funds to replace the parking meters, and raising the parking rates was something that involved no cost and did not necessitate leasing out the parking system. If the city had kept ownership of the parking system, then the city could have kept ALL the net revenue from the parking meters, rather than splitting it with ACS.
The city could have still contracted out certain aspects of maintaining the parking system without giving up control or a big chunk of the net revenue.
There is nothing that ACS brought to the deal that the city could not have either done on its own, or down with the help of outside contractors, all for a lower overall cost and without giving up control of the parking system.
I disputed and was denied. I paid the extra $20. ($40 total) and informed them they lost a customer for life. I will pay more in a garage or private lot before I will ever give them a dime of my money. I also vowed to tell everyone I know to do the same. So thank you for letting me do this here!
So along with the Back of the napkin guy, 9am-7pm is $14. in revenue, a parking ticket is $20 and they can get up to $60 if you don't return within an allotted time after the first ticket, which is not posted either. I think everyone should get into the parking meter business, it is easy money! Too bad the city wasn't smart enough to use a back of a napkin before contracting.
Private companies ALWAYS do better doing the work that government should not be doing. The city did not "give away hundreds of millions", they transferred the responsibility. ACS must be compensated for this responsibility.
We pay for bottled water, which is free from the tap. If we don't like doing that, we don't buy the water. If you don't want to pay where it was free, don't park there. If that is unreasonable for you, complain to the city; they are the ones who established the policy. You have a voice in this, use it by calling the mayor.
Here are my simple assumptions:
a) increase in total revene is $0.4M (primarily attributable to increase in rates, extended hours)
b) city's cost would increase sligtly due to extended hours (let's be super conservative and assume $50K of additional expense per quarter)
Again, this is a back of the napkin calculation, so the rough estimate is that the City would net rougly $350K vs. $400K without doing any investment. However, I don't know what else is in the prior year number. They could have one-timers (aka normalizing items), and seeing how the current administration works, I would tripple check any number they provide.
1)what would the city net if it invested ZERO dollars in the new meters, but extended hours and raised the rates
2)if it invested $10 mil (plenty of sources for that money -- e.g. citizen gas deal), raised rates, extended hours, and kept similar cost structure (just to build in some conservatism, since government is "always" inefficient).
Under these circumstances, comparing what the city netted in prior year (any normalizing items?) with current year is foolish. Even more foolish is making a claim that city is coming ahead based on very little analysis, and a reputable paper like IBJ should know better.