Thursday, March 8, 2012

Is Anyone Really Surprised? Parking Meter Deal Nets Less Than Expected

Its not like the Ballard Admininstration truely sold the residents of Indianapolis on the desirability of leasing our parking meters to an ACS group for 50 years.  Its more like they forced it through simply because the Republicans held the majority on the Council and they could.

Still, they made representations.  Turns out, those representations didn't hold water, even for the very first year.  Is anyone really surprised?

Jon Murray did an excellent job of running through all the numbers he could get his hands on in this morning's IndyStar ("Indy parking revenues fall short of projections") - the ACS group, ParkIndy, will not open their books so that the public, or even Mayor Ballard himself, can review the numbers for accuracy.

Murray reports:
The first year of Indianapolis' 50-year parking meter lease brought doubled rates in some areas as a tradeoff for a wholesale upgrade of equipment and the convenience of paying by credit card or smartphone.
Was it worth it?

New financial data provided by the city shows its share of revenue from the vendor in 2011 -- nearly $1.4 million, or 30 percent -- fell well short of the city's own projection of $2.1 million.

And the city didn't end up seeing the full amount: After the vendor subtracted $286,000 in charges to compensate for the city closing metered spaces, often for RebuildIndy road construction work, the city pocketed $1.1 million.
The budget for last year relied upon revenues of $2.4 million from 'charges for services' and $1.8 million from 'fines and penalties' for a total of $3.2 million - a far cry from $1.1 million.  That budgeted amount was not just a gravy account, as $3.8 million was being used to help fund IMPD that year.  (2011 budget - Prop 2010, 234 -- p 22 and 59 of pdf)

The budget for 2012 reflects the drop in revenue the Ballard administration fully expected from the parking meter contract.  Instead of the roughly $3.2 million revenue budgeted year before year earlier, the 2012 budget only anticipated $1.25 million from 'charges for services' and $0.5 million from 'fines and penalties' plus a bit more for a total of $1.8 million.  (2012 budget - Prop 2011, 241 -- p 25 and 62 of pdf)

Mayor Ballard, however, tries to low ball the profit to the City prior to the sale of the parking meters :
Ballard cites an $87,000 profit for 2010 -- the last year before ParkIndy's contract began -- but that figure overstates the tightness of the margin. It reflects the spending of some proceeds on street improvements.

Looking only at that year's operating costs -- $3.2 million -- the city pocketed a modest $600,000 profit, according to Darrell Fishel, an assistant public works administrator for the city.
Murray mentions the street improvements, for which $327,200 was appropriated that year, but his report does not bring up the $1.75 million that went to IMPD that year and what actual police ticketing costs were.  (2010 budget - Prop 2009, 321 -- p 22 and 56 of the pdf)

ACS/ParkIndy made out well from what numbers Murray could get:
The vendor, ParkIndy -- a trio of local and national companies led by Dallas-based ACS, a Xerox company -- kept more than $3.5 million.
 Mayor Ballard also cites the $20 million up front payment made by ACS/ParkIndy as part of the deal.  Murray has new information about that money, as well.  In a side panel in the paper version, Murray shows the following expenses paid from the $20 million (my wording):
$6.4 m - Broad Ripple Parking Garage
$5.9 m - road and infrastructure repairs downtown
$3.5 m - transition and advisor costs covering the parking meter deal itself
$3.8 m - to IMPD
The transition costs included $2.9 million to pay the high priced lawyers who cut and pasted the Chicago deal and those who were hired to be proponents of the sale and market the sale to the public (unsuccessfully, I might add).  The last charge, to IMPD, may sound familiar.  Above I noted that the 2011 budget called for $3.8 million to go to IMPD from the parking meter fund.  With the budget under pressure, the parking meter fund doubled what it usually sent to IMPD.  But the Ballard administration is now spinning it to be "reimbursement to IMPD for assisting with parking meter enforcement going back several years".   Shameless.

So folks, of the $20 million up front fee, all you really got was the Broad Ripple Parking Garage boondoggle.  Oh well.  Easy come, easy go.

Murray's article quotes City-County Council Vice President, Brian Mahern:
Mahern was among vocal critics who noted many large cities have modernized their meters by borrowing or striking shorter-term contracts. 
"We should have just worked with a vendor to provide us the service for a fee," he said, "rather than granting somebody an equity stake for what is a basic service."
Absolutely right.


Anonymous said...

Ballard has some explaining to do considering he now projects a $50 - $70 million budget hole.

Guess all his poorly negotiated sales of public assets like parking meters and the water company are coming back to bite him.

This is why you don't put children and corrupt politicians/lawyers in charge of the nations 12th largest city.

Had Enough Indy? said...

Don't forget the north of south/city way boondoggle. That's $40 million of real taxpayer's money spent along with a $98 million bond to give the developer a loan.

The forces of the recession have had a lower impact than the spendthrift ways of this Mayor.

What do you want to bet that the Pacers get an even better deal with the City, probably this year, even though we will be told severe service cuts are needed?

Anonymous said...

That and the FOP will be gunning for raises too.

guy77money said...

Off the subject just a touch:

Why we would be better off giving money to local Movie Theater Owners then the Pacers or the Colts:

1. One movie theater complex draws in over 5 thousand people a week to see a movie and is open 365 days a year.

2. People will drive over 30 miles or more to one of these complexes to see a movie.

3. Free Parking.

4. The restaurants do booming business before and after people see a movie.

5. All ages see movies.

6. The shopping areas around the movie theaters benefit from people who stop to shop before and after the movie. Not to mention the parents and people who will drop someone off and go shopping while they see a movie.

People who are staying at local hotels and motels will spend a couple of hours seeing a movie.

Local stores sell movie related items, especially toys.

The local owners must pay the distributors of the movie, who in turn pay large fees to actors and the company's that make the movies.

The parallels are amazing when you think about them. Now can someone give me a good reason to subsidize pro sports?

The money the local theaters generate for the economy dwarfs both the Paces and the Colts in cash floor to the Marion and the surrounding counties.

guy77money said...

oppss cash flow not floor

Jon said...

Surprise may not be the right word, how about disgusted. Per today's paper some of the 20 million the city received for the meter deal; 6.4 million for the BR garage(isn't that losing twice?) and 3.5 for fees to build the deal. What a bunch of bull hockey!

Anonymous said...

Let me get this straight. The city is putting up millions for the Broad Ripple garage,but the IMPD does not have enough money to buy toilet paper for toilets at South West Dirtrict headquarters.When cops have to buy their own toilet paper,things are bad.

But hey, we will have a great garage,that we won't own.

Anonymous said...

This is screaming for a grand jury.

Anonymous said...

Things are bad for IMPD because the FOP has inflated the officers salaries to a point of where a 25 year old officer with 3 years experience has a take home pay of $63,000 with cheaper health benefits than anyone else (except state legislators), plus free take home car, plus all the free city paid gas he can use, plus all the overtime he can make (at $50 an hour)using that city car and city gas. I dont think its too much to ask them to buy $1 worth of toilet paper a month, or otherwise they can forfiet some of their salary.

indianapolis buy here pay here lots said...

Guess all his poorly negotiated sales of public assets like parking meters and the water company are coming back to bite him.

Anonymous said...

Don't travel downtown Indy ....they rip you off on parking and the good parking spots are permit only...Why bother? the restaurants are just as good in the suburbs and no parking fees.