Friday, November 5, 2010

What's Wrong With the ACS Parking Contract? How Much Time Do You Have?

Yesterday my Libertarian friends asked to provide "specific" criticism of the ACS parking contract for a town hall meeting on the parking proposal. I have read both the old and revised contract from cover to cover and have written one blog post after another detailing "specific" criticism. I have also listened to Deputy Mayor Mike Huber dog and pony show (yes it is a dog and pony show) with the scripted lines written by a PR person.

There are so many things wrong with the ACS parking deal, that it's hard to keep this brief.
  • The City has not come close to making the case that the City has to do this with a private vendor instead of letting the City do it and keep 100% of the profits. I have heard Huber's nonsense that it's too "risky" for the City. The meters are not going to disappear. People are not going to stop parking downtown. The costs and the income are all but fixed. It is probably the least risky investment the City could ever enter into. I would add that Huber is making this claim at the same time he's advocating the City to back up an $86 million loan for No-So, a development deemed too risky by every lender who has ever looked at. Unless the City proves we can't do this deal ourselves which would allow us to keep all the profits, then the vote has to be "no."
  • The vendor is ACS. ACS is the company that royally screwed up the Medicaid privatization. Why in the world would we consider doing a 50 year, no bid contract with a company that has already screwed up one privatization, resulting in a lawsuit in which the state is trying to recover a billion dollars from IBM, ACS's privatization partner? For this reason alone, the vote should be "no."
  • Did I mention the contract was for 50 years? That's not privatization. There is no market competition with a 50 year contract. ACS can provide crappy service and we're stuck. What right does today's council have to tie the hands of those who might be in office 20, 30, 40 years from now? There are things worse than government running is giving a multi-generational contract to a private company to provide a monopoly service. Oh, as far as the opportunities to get out, read the fine print. We are prohibited from cancelling the contract and going with someone else for two years. The City is also also prohibited from borrowing money to pay off ACS's termination fee. A 50 year contract shielding a vendor from market competition should always merit a "no" vote. End of story.
  • Conflicts of interest. The Mayor's chief legal advisor lobbies for ACS. Council president Ryan Vaughn was listed in state records as lobbying for ACS and works for a law firm that lobbies for ACS. It is quite possible that Mike Huber did consulting work for ACS and will end up leaving the administration to work for...ACS as Ballard's only term wraps up. How could anyone who cares about ethics simply ignore these facts and vote for the deal that earns ACS, according to IBJ, up to $1.2 billion?
  • The Contract prohibits the City from looking at ACS books to determine how much the City should be paid under the contract. We simply have to accept ACS's word about how much they made and how much the City is entitled to. The contract specifically says we have to rely on their calculations. Why in the world would a Councilor support a deal in which we do not even have the right to confirm the City is being paid the correct amount pursuant to the contract?
  • Those promised 200 jobs. ACS doesn't bother to mention in its letter making the jobs promise whether they are full-time or part-time jobs. ACS also doesn't mention any salaries for the positions. Most importantly, the revised contract still does NOT include the 200 job promise. By leaving it out the parking contract and including it instead in a separate letter, the job promise cannot be enforced as a matter of contract law. Why didn't the administration and ACS put the job promise in the contract? Exactly because they do not want the promise to ever be enforced. Why would a councilor even tolerate ACS making this phony 200 job promise to lure councilors into voting for it? The dishonesty of the tactic alone should be a reason to vote against the contract.
  • Failure of the City to ask for new RFPs. When the City decided to scrap the original contract, the thing to do was put it out for alternative proposals. Instead the City let only ACS modify its offer, shielding it from any competition that would allow the City to get a better deal from another company. Again, why would anyone on the Council tolerate this?
  • How many times does City officials have to lie before people, especially my Libertarian friends, learn not to trust them? We now learn that the Pacer $33.5 million deal included a secret agreement to indirectly fund the team with property tax money by shifting around the CIB ICVA expenditure. That was after CIB officials repeatedly lied about how much it would cost the Pacers to get out of the contract. We also recently learned that there was apparently a deal, not disclosed during the utilities debate, for the City to pay Veolia millions to get out of its contract.
  • Although politics might not be seen as a valid reason by some to oppose the contract, the fact is the parking proposal is extremely unpopular. The public has overwhelmingly said they do not want it. Why should people be saddled with a 50 year agreement they do clearly do not want? Anyone who wants to get re-elected in 2011 better think twice before voting for the ACS contract. It will be a political issues used against those who vote for it. You think not? Look to Chicago - the parking deal there was so unpopular it toppled a political institution, Mayor Richard Dailey, from power.
I'm sure there are many more - these are just eight off the top of my head. Any one of these reasons alone should mandate a "no" vote.


Blog Admin said...

My concern over the Libertarians is some that I've talked to (none in official capacity/leadership roles) seem to have an automatic hatred of government and border on the anarchy, the whole privatize-everything-sell-everything-that-isn't-nailed-down attitude.

"But parking sucks around here, the gubment is clearly not doing it right". They should look a bit closer and note the current manager of parking, Denison, will be doing it under ACS.

I really hope the Libertarians take your criticism of the deal, as well as Gary Welsh's and Aaron Renn's, into consideration before they throw their two cents in (if they decide to, they don't HAVE to). 95% of original criticism still applies because this is still the same deal, just with a few numbers changed around.

Downtown Indy said...

There's only one GOOD thing about this contract -- It hasn't yet been signed.

Had Enough Indy? said...

You nailed it all. Especially the 'too risky' garbage.

This deal is so bad for the true owners of the parking system - the citizens of Indianapolis, that NOT a ONE Councillor should vote for it.

Timothy Maguire said...

Paul, I agree some of these points are major problems, and for your issues #3 & 5 alone I'm not supportive of the current proposal. But I did want to pass along this article from, a libertarian think-tank, which puts this proposed deal in a surprisingly good light.