Friday, August 20, 2010

Mayor Ballard Awards 50 Year Parking Contract to Politically-Connected ACS; Deal Mortgages Future For Upfront Cash Before Campaign

I predicted that Mayor Ballard would enter into a long-term privatization contract for parking that mortgaged future revenue future administrations would receive for upfront cash he could spend before the election. He did that ... and worse. Mary Milz of Channel 13 reports:

The mayor's office has agreed to lease its parking operations to Maryland-based ACS for 50 years. The city gets $35 million up front and a share of the revenue that will increase over time from 20 percent to 50 percent.

"The reason they get a larger share is they're giving us a lot of money up front and financing $7-$10 million in upgrades," said Deputy Mayor Michael Huber.

ACS will spend up to $10 million to replace the city's current coin meters with electronic ones similar to those in Chicago, which take credit cards. ACS' David Cummins is quick to say that's where the similarities end.
Under the plan, most rates in Indianapolis will go up, but gradually - from the current 75 cents an hour to $1.50 in 2012 with increases after that tied to inflation.

"We thought that was responsible since rates haven't changed in 35 years," Huber said.

Another thing changing is the hours of operation. Downtown, you'll have to plug the meter until 8:00 pm, and until 11:00 pm in Broad Ripple. You'll also have to pay on Saturdays.

Huber said merchants, especially in Broad Ripple, want more turnover.

"We have free parking at some of the busiest times of the day," he said.

As for enforcement, ACS will continue using Dennison Global, insisting that unlike Chicago, you won't see a big crackdown.

"The city isn't giving up the keys to parking to a private operator so we can go out there and run around and write a bunch of tickets," he said. "That's not allowed in our agreement."

Huber said the city will put the $35 million in a capital improvement fund to pay for infrastructure needs, such as street and sidewalk repairs. Under the deal, he estimated the city would ultimately generate about $1.5 million a year, compared to the $750,000 it takes in now. He said that money would also go into the capital improvement fund.
The Indianapolis Business Journal and Advance Indiana also has excellent reports on the subject.

I chose to use the Channel 13 report because it picked up on a point that IBJ didn't - parking rates will double in 2012 (conveniently after the 2011 municipal election) and then will increase along with inflation thereafter. How high are these rates going to climb? Does it make sense to tie parking rates to inflation rates?

Second, it cannot be emphasized enough that the City is entering into a 50 year contract. That is not privatization. Privatization is about government leveraging the marketplace to create competition in the delivery of services. Handing a company a 50 year contract is providing a government monopoly over the provision of public services. There will be no market competition holding down rates. There will be no backing out of the contract if city officials are not happy with ACS.

Third, the purpose of the long-term contract is to mortgage the future to receive up front cash. The Ballard administration is entering into a 50 year deal to receive $35 million dollars that they will use for street and sidewalk repairs. Those repairs financed by the 50 year deal are going to last maybe 10 years. The deal is simply designed simply to generate pre-election cash for a Mayor struggling with his own well-deserved unpopularity.

Huber also suggests that the deal doesn't allow parking tickets to be written on people who don't feed the meter. That is so disingenuous. He undoubtedly knows that another private company handles enforcement at the parking meters, not the city. Thus that issue would not be dealt with by the City-ACS contract.

Speaking of ACS, here we have a company that along with IBM horribly bungled the FSSA privatization, to the tune of billions of dollars. Why in the world would the Ballard administration enter into a contract with ACS to do parking privatization when the company's failures are the subject of a multi-million dollar lawsuit involving the state?

Wait...I know the answer. ACS has made contributions to the right politicians and hired Barnes & Thornburg, the law firm that's run the city since Ballard was inaugurated on January 2008. Joe Loftus, partner at B&T lobbies the City on behalf of ACS. Loftus is also on the City's payroll. It's more of the same old pay-to-play BS from the Ballard administration.

When will this embarrassment to my Republican Party known as the Ballard administration come to an end? November 9, 2011, after election, I would call on Republican leaders to gather and purge the Marion County GOP of those who, rather than help the party regain a majority in the county following the suprise election victory in 2007, instead used a very naive Mayor Ballard to line their own pockets. The selfish act of those people set back the future of the Marion County GOP by at least a generation.


JeffW said...

Paul: you missed an important point, "ACS will spend up to $10 million..."

Up to? Really?

I will spend up to $1 million to buy a Snickers bar.

M Theory said...

Wow! It really pays off for the unscrupulous and greedy to hire Barnes & Thornburg as their lawyers.

Not that they care, but I'll probably go out of my way not to visit places downtown that require me to pay to park.

And doncha love how the CIB gets paid?

Had Enough Indy? said...

Does the Council get a say?

Had Enough Indy? said...

Prop 229 gets introduced Monday night. It is the Council review of this deal. Its being sent to the Rules committee, which is shown as meeting on August 30 at 5:30 pm.

Gary R. Welsh said...

It's a rubber stamp council, Pat. That's why I wouldn't vote to re-elect a single Republican councilor and I don't say that lightly as a life-long Republican and elected precinct committeeperson. I'm embarrassed and ashamed at the low caliber of people my party has put on the council. The only way to change it is to work for the defeat of all of them and hope the corrupt people running the party go away since they won't be making money off these elected officials and allow for people who are truly committed to the principles of the Republican Party to rebuild it.

Paul K. Ogden said...

AI, is right that the Republican majority is a rubber stamp for the Mayor. There occasionally might be one or two who show an independent thought or two, but they end up being ostracized by the administration and other Republicans who have their hands in the till.

Even if one or two R's get peeled off on a vote, the D's are smart enough to throw the R's a vote or two to ensure that any tax/fee increase prposed by Ballard will pass. After all, the D's have a vested interest in seeing the Ballard administration continue on his suicidal path of more tax increases and bigger government.

Gary R. Welsh said...

Janice McHenry and Barb Malone, both attended the press conference to make the announcement so it's obvious they can't wait to vote for another tax increase. Paul, Have you looked at Barb Malone's ethics statement? She lists her business address as Ammeen & Associates, a law firm that does work under contract for the city, but she lists the State of Indiana as her employer.

Shane said...

Michael Huber is the Mayor's Deputy Mayor for Economic Development formerly Director of Enterprise Development. Mr. Huber, who is in charge of this mess; told me personally in August of 2009 that he had worked with Skip Stitt. Mr. Stitt, former Goldsmith Deputy Mayor, has served as Chief Administrative Officer and Chief Operating Officer for ACS’ Government Solutions Group. Before joining ACS, Stitt served as President and founder with Steve Goldsmith and E. Mitchell Roob Jr. of Competitive Government Strategies, LLC which went bankrupt. The revolving door in the City-County Building just keeps spinning.

Shane said...

Also, Mayor Ballard’s former Chief Deputy Mayor Paul Okeson is now an executive at Keystone Construction, a city construction contractor and campaign contributor to Ballard. Have you noticed Ballard’s answer to everything is more new construction.

Gary R. Welsh said...

I was working for an IT company when that trio started up their new IT company. They raised several million dollars from some local big shot Republicans. There were several articles in the IBJ boasting about the company's prospects for landing e-government solutions for the cities of Chicago, New York and LA. They failed to get any of those contracts and only landed some small deals. The Town of Fishers was the only Indiana government they could convince to buy their solution despite all of their political connections. As Shane notes, the company went bankrupt. Mssrs. Goldsmith, Roob and Stitt then took the intellectual property their bankrupt company developed and took it with them to another company that eventually was taken over by ACS.

Marycatherine Barton said...

Mayor Ballard was not and is not naive.