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Parking deal netting city more meter money

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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.

Parking meter 15colMore 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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  • Parking Contract 10 Year Out Was Spin
    Exactly JoeP, the 10 year out provision inserted into the 50 year contract was just about political spin. You read the details and it is clear it could never be used. It's just yet more evidence of the dishonesty of this administration. He threw the conservatives who supported him in 2007 under the bus and now Ballard is trying to spend his way to a second term. Fortunately it's unlikely to happen.
  • Definitely not a ten year contract
    To break the contract after ten years also requires something like a $20 million payment, basically everything the City got upfront. If I were Melina Kennedy, I would be pledging to set aside $20 million to opt out after ten years so the City can get all the revenue from the meters and violations.
  • I meant
    I meant to say, it's hard to tell about the Broad Ripple garage contract (since the details are not public yet). Parking contract is available, and I would urge everyone to read it. I would also urge everyone to find prior year(s) financials for the parking entity, and then you will better understand the amount of spin that these guys have been using. Is it privately owned or government owned, I don't care. All I care about it that it's in the best interest of our city. And when you dig down deeper, you have to question their motivation.
  • 10 year
    10-year clause was just for spin. I would compare it to the most recent weird Broad Ripple garage contract clause ($1 sale), which will probably never get exercised. However, because of the total lack of transparency (which is a trademark of this administration), it's hard to tell.
    • It is a 50 Year Contract
      Greg, you've obviously not read the contract. They included terms to make it impossible for the 10 year out provisions in the contract to ever be used. One provision actually requires the new vendor to be limited to whatever ACS made on the contract in 2010. (Of course it went into effect in 2011.) Even then, what vendor in 2030 is going to agree to take what ACS made in 2011, assuming that is the operable year. And that is only one term they included to make sure the 10 year out provision would never be used. The inclusion of the ten year out provision is nothing but a farce. It's a 50 year contract, make no doubt about it.
    • Upfront Costs Were Not A Problem!
      Gary, that simply is not correct. It would have cost just $8 to $10 million to buy new meters. We gave the Pacers $33.5 million. The Mayor spent $10 million on bike lanes. This administration put taxpayers on the hook for $100 million for a development on the near southside that no lender would supprt. We're paying $6 million to build the Broad Ripple Parking Garage then giving away the building and the revenue to a private company...which of course is one of Ballard's biggest supporters. So don't give me the nonsense that we can't spend $8 to $10 million to buy new meters when we will make all that money back as opposed to the other things I mentioned.
    • Upfront Costs Were Not a Problem!
      Gary, it would have taken just $8 to $10 million to install new meters. Ballard spent $10 million on bike lanes alone. Ballard gave the Pacers $33.5 million. He had $100 million to back up a development on the near southside that no lender would finance. This was all about bringing in a politicall connected company that had contributed to the Mayor and who employs as a lobbyist the Mayor's top adviser.
    • a 50 year contract?
      It is a 50 year contract that can be cancelled by the City every 10 years. Essentially it is a 10 year contract, renewable every 10 years at the option of the City.
    • What about citation revenue
      Does "total revenue from meter operations" include the revenue from citations? I recall that the ACS contract allows them to keep all citation revenue whether the tickets are written by ACS or by the City (IMPD). If that money is not included in the numbers in this article, it should be. I'd be curious to know how that revenue compares to the actual money paid at the meters.
    • Tim, They Raised the Rates and Installed New Meter
      Tim, you are not thinking. The city raised rates by 133%, extended the metered hours, installed meters in new areas where there were not meters, and also increased enforcement.

      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.





    • Conservatives
      JoeP, why do you think "conservatives" would support a 50 year monopoly contract? Trust me, they don't.
    • Monopoly
      I'm sorry, "Gil," but handing a private company a 50 year monopoly contract doesn't result in efficient services above what government can do. Not a single person on here has an answer for why we couldn't have done this ourselves and kept 100% of the revenu.
      • Duh
        Chris, the city had a 300+% increase in revenue. Had the city kept the status quo that would not have been achieved. As a taxpayer I appreciate the increased revenue thru non income based means. Your coulda woulda claims would not have happened under govt leadership.
        • just FYI
          Per RFQ, 2008 (latest year available per report) full year EBITDA was $3.4M, operating revenue $4.3M, operating expenses $0.9M.
          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 vs. fiction
          I noticed that conservative nitwits like fiction more than facts (I guess that's why they call you hobbits). This has nothing to do with government vs. private sector. Even before this deal, local government had contracted out to private companies certain elements of parking system maintenance. I have nothing against contracting out the whole thing if the terms are right.

          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.
        • Tim, The Ad Hominen Remarks Do Not Offer Anything Useful
          Tim, most of the posters to the IBJ's message board are neither "liberal" nor "nitwits," unless by "nitwit" you mean someone who disagrees with your point of view. However, as neither you nor Gil, seem capable of articulating a well-reasoned point of view, I think most posters here are quite fine with being labeled a "nitwit" by you.

          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.
        • great comment Gil
          Gil is exactly right. I find it funny how the IBJ comments section is filled with liberal nitwit comments. Obviously not made by anyone other liberal bloggers who don't run a business, and always chant big govt/union ideas
        • Your Opinions Need To Be Supported
          Gil, I am glad you THINK private companies always do a better job at providing services than government, but that is simply your unsupported opinion. Also, it is an unsupported opinion that misses the bigger point.

          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.
        • it is called kickbacks
          Yes, we got money upfront, because we did not have money but had money to buy a new electronic add board for Conseco Field House, pay the Simons and Ersay millions just for being themselves. And the GOP and Ballard got and will get hundreds of thousands of dollars for making it posible for Texans to get rich off of Hoosiers. Gov. Perry is right, he created more jobs in Texas by Hoosiers paying for the GOP giveaways to outsiders. Where was the public bids? Public discussions? Where was the brains. Of course we have the best government that can be sold to the highest bidder. All the while, the GOP will continue to tell us smucks that it will trickle down to us in minimum wage jobs-maybe, rob us of public safety, eductation for our children, and security for the future. Notice how the GOP wants to give away to the private sector anything that generates any revenue that would offset those things government is required to do? And with no taxes, they aim is to destroy American government at its heart. And the people will pay more because of the sweetheart deal for the private sector to earn minimum percentage growth in profits each year that is passed on to the rest of us, will not be a tax, just profiteering.
        • No more money from me
          I parked at a meter on a Friday, had to leave my car overnight and received 2 tickets for the same parking meter because I didn't return to my car within 4 hours of the first ticket. What!? Double Jepordy!?
          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.
        • What's Wrong With You People
          I am shocked that readers of the IBJ write like the ignorant readers of the IndyStar.

          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.
        • one more thing
          I obviously don't have all the facts, but even if I look at just the facts that were provided in this article, my back of the napkin calculation says that based on one quarter alone city is roughly breaking even, but lost all control.

          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.
        • Pay more for same service?
          How is this such a great thing? We now pay more to park a car in the same spot that was free after 6:00pm weekdays and on weekends. Pretty new "convenient" meters and meter boxes hardly seems worth the extra expense. Perhaps they will take a cue from the airlines and charge more based on the vehicle weight and size. Progress ???
        • lack of analysis
          They didn't just increase the rates, they also extended the pay hours and days (Saturday). The good piece of journalism would actually make a comparison of current results with the two other options:

          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.
        • Meters Save Me Money
          I used to eat, shop, and entertain at different places downtown the same evening and moved my car each time. With the new meters and more importantly the risk of a fine I no longer do that downtown and have saved a lot of money by spending my expendable income closer to home.
        • Upfront Costs are the problem
          Yes, the city may have netted more over time but it would have taken millions of dollars in upfront costs to make all of these changes. And with the current economic state, the taxpayers would have wanted someone's head on a platter for spending that money. And besides, this is government - they would have found some way to screw it up and not make as much of a profit.
        • Of Course
          Of course, we could have done this ourselves and kept 100% of the revenue. Instead we're giving away hundreds of millions to a private company for the next 50 years.

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