The article also quotes Fred Laughlin, a vice president with the not-for-profit Indianapolis Downtown Inc. As to be expected IDI, which receives millions in subsidies from the City, acts as a shill for the administration. Laughlin defends the contract and makes the incredible comment that the competitive bidding process ensures the city got a fair deal.
A private company pays to install hundreds of electronic parking meters. Customers pay a higher rate for the first time in 35 years but now can pay with credit cards. The city collects $400 million over 50 years to repair crumbling streets and sidewalks.
Everyone wins, right?
The pitch from Mayor Greg Ballard’s administration is compelling. But a proposed deal to sell the city’s parking meters to Dallas-based Affiliated Computer Services Inc. has the city giving up more in the long run than is immediately apparent in the talking points.
The private contractor likely will collect at least $724 million in revenue over the life of the proposed deal, based on an IBJ calculation using city revenue projections that are more conservative than those used by ACS. Under the more optimistic scenario, the company could collect as much as $1.2 billion.
Less clear is how much of the revenue would be pure profit for ACS, the Xerox-subsidiary company the mayor picked this month from among several bidders seeking to help the city unlock hidden value in its parking assets.
The deal, which still requires City-County Council approval, calls for the city to cede control of about 3,650 metered parking spaces in exchange for a $35 million upfront payment for new streets and sidewalks, upgrades to the city’s meter system valued at $41 million, and a minority share of future meter revenue.
The city would get 20 percent of revenue up to $8.4 million annually, and 55 percent above that threshold. ...
ACS declined to disclose its revenue or expense projections—including how much it plans to invest in new electronic meters or how much it will pay to manage the collection of parking fees and fines from violators. "
What "competitive bidding process?" The City considered proposals and picked what was felt was the "best" proposal. There was no "bidding process." It was a no bid contract.
Also in the article, Schouten reports that Morgan Stanley's fees on the deal are estimated at $1.5 million. According to Michael Huber, Deputy Mayor for Economic Development, even if the Council doesn't approve the plan, the City is on the hook for "deal interactive fees" for Morgan Stanley as well as up to $50,000 in expenses. I'm not sure what "deal interactive fees" (a google search produced zero hits) but I wouldn't be surprised that is a clever way to avoid referring to Morgan Stanley's $1.5 million bill.
That $1.5 million comes on the heels of a $451,568 bill submitted by Ice Miller, which according to the City we taxpayers will be on the hook for 75% of.
Did our city leaders just put Indianapolis taxpayers on the hook for nearly $2 million on a deal that may never pass the Council?
For the rest of the article click here.