Thursday, August 5, 2010

Will City Mortgage Future Generations Through Long-Term Parking Privatization Contract?

I have often joked that the Ballard administration will sell anything the city owns that's not nailed down. I was wrong. The administration will also sell the things that are nailed down. This time it appears to be the city's parking meters and garages that are going up for sale.

In Chicago, city officials entered into a 75 year privatization parking contract. In return, Chicago received a billion dollar up front payment that went into the city's operating fund. Most has been spent already. With the new vendor, parking rates have skyrocketed in the Windy City.

The Ballard administration indicates that it too intends to enter into a long term agreement with a private company to lease the city's parking meters and garages. In return the City will get an infusion of upfront cash.

WRTV reports assurances by the administration that the Chicago mistake won't be repeated here:

Michael Huber, the mayor's point man on parking, says while rates would likely go up, "It certainly wouldn't be anything near what Chicago and other cities have done. Any proposed or recommended increases to the [City-County] Council will be much more modest and it would be based on demand."

And unlike Chicago, which put the billion dollars toward their operating budget - much of which has already been spent - Indianapolis would put it into capital improvements to pay for things like streets and sidewalks.

"By law, the proceeds from the parking meters are required to be invested in infrastructure in the vicinity of those parking meters," said Huber.
Wait a second. How long are those streets and sidewalks that you fix up with the money obtained from a 75 year parking meter money contract going to last? Ten years maybe? What happens the other 65 years of the 75 year contract?

I bet you anything too that the decades long privatization contract will include a provision that the new company not raise rates for a few years - enough to get beyond the 2011 elections.

There is no question that the parking situation needs modernization and consolidation. The City though appears to be using this need as a way of mortgaging our children's future by trading a contract that will bind them for an upfront infusion of cash that our children will never see the benefit of.

This is a situation that cries out for the General Assembly to act. There will always be a natural tendency of municipal governments to want to get their hands on huge stashes of cash. They should, however, not be able to do that by binding future generations with long-term privatization contracts at the cost of taking revenues from those future generations.

9 comments:

Had Enough Indy? said...

You are absolutely right ! This is yet another generational ponzi scheme.

Downtown Indy said...

It's so-o-o easy for politicians to let a mean old private contract raise 'taxes' instead. The contractor just shrugs and says they need it to cover costs. The politician just shrugs and says don't blame them, they didn't do it.

Paul K. Ogden said...

DI,

You forgot that the politician is getting campaign contributions from the contractor They're not going to bite the hand that feeds them by going after the contractor for not following the contract.

Cato said...

Very well said, Paul.

I can't improve on it, a bit, except to wag the finger at the Mitchies for their similarly disastrous plan.

Hoosier in the Heartland said...

Well, heck! Nobody needs to drive downtown and park on the street anyway. We've got all those spaces reserved for politicians, and the conventioneers don't have cars!

Add the gross insult of increased parking fees to the street shootings, and...can anybody say: kill downtown commerce?

dcrutch said...

Agreed- but when do we reduce our clamoring for government services, which necessitates looking for more funding in the first place? I agree there's probably efficiencies and dollars to be found with a comprehensive audit. It appears we've gravitated to routinely rotating our corrupt parties out of office, as India used to. But, we've not yet made it emphatic that single parenting as a lifestyle choice, taming the Middle East, and subsidizing all manner of sports teams and their stadiums are among our unaffordable luxuries.

We could once afford all these things. We were once the lone economic titan. But for now, we just print money like one.

Greece is out of the fiscal news because they realize they can't afford people retiring in their mid-50's. England is decentralizing sacrosanct national health care to save money. Russia, after six weeks of fires, thinks there could be a global environmental problem.

What flavor of coffee has to be brewed before WE can smell it?

Unless we pay for it, parking meters or otherwise, we'll continue getting this stuff foisted on us until we stop spending money we don't have on delusions we can't afford.

Hoosier in the Heartland said...

The problem, dcrutch, is that "we" the people don't benefit from increased parking meter revenue.

The private company to which we've outsourced it does.

If Indy wanted more revenue from its parking meters, it would just raise the cost of parking instead of selling the franchise!

dcrutch said...

As 'Downtown' points out, whether increased "rates" (like water rates) or "fees", they replace the mean old taxes and avoid reducing the collective behemoth of government.

Take the money from the front pocket or the rear one, school district or D.C., income, property, or sales- but you're still taking from me. Unlike goverment spending, each taxpayer does have fiscal limits.

Citizen Kane said...

To answer your question; of course they will!

Under the Goldsmith paradigm that he is working under, the City will continue to increase the amount of funds dedicated to debt service until the budget implodes.