Monday, April 21, 2014

Why is Ballard Administation Agreeing to Pay ACS for Lost Parking Revenue Due to Installation of Electric Car Charging Stations?

The Indianapolis Business Journal reports:
Mayor Greg Ballard’s hope of making Indianapolis the first U.S. city with an all-electric car-sharing service hinges on regulators’ approval of a rate hike to cover $16 million in installation and other costs to Indianapolis Power and Light.

The impact on IPL’s typical residential customers would be 44 cents a month, starting in January 2018, according to a petition IPL filed April 11 with the Indiana Utility Regulatory Commission.

The city filed testimony by Ballard and other officials to support IPL’s case, which is key to the utility’s agreement with the city to install as many as 1,000 charging stations at 200 locations to support BlueIndy LLC, the local subsidiary of Bollore Group, a French conglomerate that wants to launch a car-sharing service here.
The Ballard administration supporting higher fees on consumers?  Well certainly no surprise there.  What I did find surprising is the biggest cost of the deal:
The biggest cost to the city will be removing downtown parking meters, according to the testimony of Director of Enterprise Development David Rosenberg. Under a 50-year lease the city signed in 2010, the city must reimburse the meter operator, ParkIndy, for revenue it loses to meters taken out of service for special events or other city needs.
Actually that's not true. While there is a section in the contract requiring compensation for meters closed temporarily for events, there is another section that allows up to 200 spaces to permanently be removed without the City having to pay any compensation whatsoever.  According to Section 7.4:
During the Term, the City may remove up to Two Hundred (200) metered spaces ("Meter Removal Basket") without the occurrence of a Compensation Event....
Later in Section 7.4 there is language that permits the City to waive compensation by providing written notice that it does not wish the space removal to count toward the 200 non-compensated removals.  The obvious question though is why the City would opt to pay ACS, rather than count the parking spaces closed for the electric car charging station spaces toward the 200 allowable space removals that do not require compensation.

If the section allowing permanent removal of spaces without compensation is not used, then it would appear that the default is to pay the Temporary Closure Fee.   The compensation for that fee is $20 per meter in the two most popular downtown zones while $15 a day in the remaining two zones.  Doing the math, if a downtown meter has 100% occupancy at $1.50 an hour from 8 am to 9 pm, the meter will taken in $19.50.  Of course it's unlikely that the meters would have 100% occupancy so by getting the Temporary Closure Fee the parking vendor actually makes out better than if the meters were in operation.

Heads or tails, the taxpayers lose while ACS continues to win.

6 comments:

Had Enough Indy? said...

Do they have to take out 1000 spaces? Are all spots at meters? Maybe they intend on claiming the 200 free eliminations and still have 800 to go.

Paul K. Ogden said...
This comment has been removed by the author.
Paul K. Ogden said...

It sounded like from the article it would take up less than 200 spaces. (1000 would be one heck of a reduction in parking spaces.)
If you look at the picture of the recharging stations they looks like they're about the size of a parking space.

Flogger said...

I worked for several large Multi-National Corporations over the years. We had vendors to supply services and office supplies. The vendors would come and go over the years. I never have heard of 50 year deal.

There should be an award for Crony-Capitalism. Ballard would be a very strong contender for a life time achievement in this category. Electric Cars for downtown is just one of many other Crony-Capitalism deals this city is infamous for.

Every time I see Ballard stuffed into his suit reading his scripted announcements the word Buffoon comes to mind.

Jon said...

So if the city pays a penalty that it doesn't have to pay is it malfeasance or stupidity.

Downtown Indy said...

Two spaces would be more than sufficient to handle the demand for electric car plug ins for many years to come.