Back in 2011, Indianapolis (under then-Mayor Ballard) entered into a fifty-year agreement with a consortium called Park Indy to upgrade and manage the city’s parking meters. At the time, I was among those who argued strenuously against that agreement.
I had two major objections and two never-answered questions.
The first objection was to the fifty-year length of the contract. Even if the deal had been less one-sided fiscally, decisions about where to place meters, how to price them, what lengths of time to allow and so on have an enormous impact on local businesses and residential neighborhoods. As I said at the time, these are decisions requiring flexibility in the face of changing circumstances; they are most definitely not decisions that should be held hostage to contracting provisions aimed at protecting a vendor’s profits.
My second objection was that, under the terms of the contract, downtown developments and civic events would become more costly. More often than not, new construction interrupts adjacent parking. If the city is managing its own meters, it can choose to ignore that loss of parking revenue, or decide to charge the developer, based upon the City’s best interests. Street festivals and other civic celebrations also require that meters be bagged, and usually there are good reasons not to charge the not-for-profit or civic organization running the event. The ParkIndy contract required the City to pay ACS whenever interruptions require bagging the meters and disrupting projected revenues from those meters.
No one could have foreseen a pandemic, of course. That’s the point. When you contract away your flexibility, your authority to make decisions that are responsive to unforeseen events, you end up owing a lot of money to the private vendor. Indianapolis closed certain streets to traffic, in order to allow restaurants to serve customers outdoors, a move that probably kept some of them afloat during a very difficult time. That required bagging the meters on those streets. WISH reports that the city has already had to pay Park Indy 450,000 under the contract–at a time when the pandemic is wreaking havoc with city and state finances.
File that payment under “adding insult to injury,” since, according to periodic reports, the city has never come close to receiving the income it projected when this ill-conceived privatization agreement was negotiated. In May of 2016, the Indianapolis Star reported that the city was reaping only about a quarter of the dollars ParkIndy projected when it paid $20 million for the right to operate the meters until 2061.
Then there are my two questions.
As I wrote at the time, why privatize at all? Parking isn’t rocket science. There was never a satisfactory response to the obvious question “why can’t we do this ourselves, and keep all the money?” Why couldn’t Indianapolis retain control of its infrastructure, and issue revenue bonds to cover the costs of the necessary improvements? Interest rates were at a historic low at the time, making it even more advantageous to do so. If the Ballard administration was too inept to manage parking, it could have created a Municipal Parking Authority, as Councilor Jackie Nytes suggested at the time.
What was the compelling reason to enrich private contractors and reduce (desperately needed) City revenues.
And finally, why ACS –the company that is the primary partner of ParkIndy. There had already been extensive publicity about ACS’ performance problems in Chicago; there was also troubling information about the company’s track record in Washington, D.C., where an audit documented mismanagement, overcharging, over-counting of meters, and the issuance of bogus tickets (ACS got all the revenue for tickets). The audit found that Washington had lost $8,823,447 in revenue and experienced a twenty-fold increase in complaints from the public.
The only answer I could come up with was that the Ballard Administration got an up-front infusion of cash which helped it hold the line on taxes while Ballard was in office–and who cares about the future?
This was actually something of a modus operandi for Ballard. An academic paper I co-authored with a colleague shared the results of our investigation into the convoluted structure of the city’s sale of its water and sewer utilities. The highly sophisticated financing scheme for the sale had the effect of shifting costs to utility rate-payers that should properly have been assumed by taxpayers.
There’s a saying among politicians: to elected officials, “long-term” means “until the next election.”
And I used to think that “fiscally responsible” meant “pay as you go.” I was so naive…
Yes – Mr Ballard. The guy that brought an expensive Cricket Stadium to Indy – at public expense. Quite a guy. Hows that Cricket income for Indy so far? Cricket?
patmcc; I have no idea where the Cricket Stadium is located (or why it is anywhere in this city) but what is the parking situation for the massive crowds of Cricket fans. I do know that there are shuttle buses for Colts’ games so evidently there isn’t adequate parking at the stadium or is limited and too costly.
Adequate, convenient, reasonable cost for downtown parking has always been a problem; especially for those who work downtown.
Can we find any Dots to follow regarding Ballard and ParkIndy connecting money made privately on that deal in addition to any up-front money paid to the administration? There always seems to be a private cash payoff when Republicans make deals with private businesses and cities and states…and this country…usually lose money in the long run. Call it privatization or outsourcing if you want; I prefer the term “graft”. Sheila’s question “…why privatize at all…” regarding ParkIndy SHOULD have been asked prior to most of these deals which became the norm under Goldsmith. Those electric cars caused a street parking problem for residents in some areas; public transportation is now getting worse with IndyGo ending numerous pickup stops to move their buses faster. Rather than long walks to remaining bus stops, will this increase the parking problems downtown?
One can only hope that, a) the contract with ACS has a force majeure clause, and b) that clause specifically includes epidemics or pandemics.
No discussion of mismanaged privatization disasters can exclude Mitch Daniels’ 75-year lease of the Indiana Toll Road. Despite toll increases in the hundreds % the quality of the roads remain abysmal compared to IL, OH, and PA. The brand new travel plazas were ill-designed and undersized to serve current needs much less future growth. But the good Repub IN Senators & Reps of the powerful donut counties around Indy knew what’s best, as usual, for the Northern counties and gleefully took the $3.8 billion and ran, spending much of it on an extension of the NAFTA Highway to further facilitate the exportation of our manufacturing capacity to Mexico. IN has and will spend nearly $10B on I69, and will undoubtedly be of SOME economic benefit to those communities it connects, but not nearly enough to justify starving the rest of the state of critically needed road and bridge repairs. We need sane and competent people at ALL levels of government.
This is what you get when you elect people who believe that we should run our government like a business.
So much for privatization and the conservatives belief that small government is better than big government. Oh, let me guess,
they believed that having the government manage parking meters was socialist.
Milton Friedman economics that wet too far. Reagan marked the decline of Keynesian Economics. What is next?
And don’t forget Daniel’s outsourcing welfare services and the deterioration of service and lawsuits which ensued.
As I mentioned yesterday, this is part of Neoliberalism started with Reagan/Thatcher in the West. Someone above tipped their hat to Friedman for the issue…YES…it was the Chicago School of Economics.
Remember the fraud, Arthur Laffer, and his “curve,” which developed into “trickle-down economic?”
Laffer was shunned from the economic profession but later was hired by the Koch brothers at ALEC. Roger Ailes went on to Fox News.
You would have thought that the DNC would have crushed Neoliberalism in its tracks, but they embraced it as well. Clinton and Obama were used by architects of Neoliberalism to continue this practice of outsourcing and trickle-down economics. If we make things great for the Oligarchs, they will lift everyone’s lot in life.
The results are plain to see everywhere. The rich got richer, and the poor got poorer as expected. Forty years of evidence, and still neither party seeks change to reverse the damages.
The only reason people are piling on Trump is he is so unlikable, but his modus operandi is still Neoliberalism. Whether it’s Biden or Trump, the Oligarchs are already indicating that financial cuts are necessary due to all the government bailouts. I guarantee there will be no tax increases without loopholes. All the cuts will be on the people.
I wonder what it will take for the majority to stand up and start walking in the streets.
There may have been a strategy to allowing the city parking to be so mismanaged for so long. It was pretty bad before ACS came along. There were so many “permits” issued that effectively parking never turned over in most of the downtown core. There was little enforcement because unless it was a public safety issue police had better things to do, than issue parking tickets. For about two, maybe three years after ACS, things were better because there were no exceptions to paying the meter, and parking turned over more regularly and it did become easier to find street parking in downtown indianapolis.
Then the glaring problems started to pop up. Like the long term cost for loss of meters for the now defunct BlueIndy (I am sure BlueIndy could be another blog post all by itself) charging stations. This seemed like an innovative solution, but the ACS agreement lacked even a little flexibility.
As time as gone on it has become obvious that ACS only enforces parking rules for metered spots, and as I have noticed I no longer see ACS parking enforcement at all, and if I have noticed the lack of enforcement, than I am sure other people have seen it, and I think that for short stops, you just ignore the meter. I am sure that will cause revenue to drop off.
Here is another short sighted project. I just read about Indiana State Department of Transportation (INDOT) is going to upgrade some 500 traffic signals in the city Indy to help with traffic flow because they are getting ready to blow up major portions of the downtown Interstate for major maintenance and a rebuild. I will have to mention that the Interstate project was almost rammed down the throats of Indy residents with almost no review or planning, and the city is just now recovering from the damage done by punching limited access highways through the middle of urban areas some 50 years ago. A coalition was formed called Rethink 65/70 to propose some significant changes, the outcry also slowed down the project by more than two years. It proposed some pretty dramatic and expensive changes, but if you looks at the project from an economic development prospective for the city, it was almost cost neutral. It had grassroots backing from many city dwellers, and even major businesses. But INDOT was in charge of the project and their job is to build roads and so the slightly revised plan, while better than the original proposal, is just basically more of the same and it fit into the budget INDOT had.
Strangely through this whole thing, the city government was almost completely silent on the project. This was a once in a lifetime opportunity to do something transformative for Indianapolis. Also, the city has had major Interstate shutdowns in the downtown area before and INDOT did a little to help with the resulting traffic flow, but nothing major. It occurred to me that it is possible the nearly system wide traffic signal upgrade project might have been the payoff to the city administration to not oppose the INDOT plans. The new traffic signal system is going to be great for the city, but after seeing the Rethink 65/70 vision, the city as a whole, got the short end of the stick.
Republicans sell off the future that Democrats see the desperate need fo prepare for and invest in because the GOP believes that the future is only unregulated capitalism everywhere. Their logic is impeccable: that’s the best way to maximize wealth redistribution up, from workers to wealth builders, and recreate at least economic slavery to replace people as livestock that they lost in the Civil War.
And we let them. Both those who don’t mind slavery and those who honor freedom for all do.
And now it’s come to this: Trump vs the Constitution. A puppet Senate. The destruction of our future all around. A demolition derby of incompetence and corruption.
We have to take a stand now because there’s simply no place to further retreat to.
Pete,
“We have to take a stand now because there’s simply no place to further retreat to.”
Exactly right. And simply stated: “You would have to be politically blind not to see it.”
Not all privatization is a bad idea. Having private companies pick up residents’ trash instead of city employees has worked well. But in other areas, such as prison/jail privatization and toll roads, privatization has flopped. Some services are just not well suited for privatization.
The parking meter privatization under Ballard is one of the worst privatization ideas ever imagined. For providing the meters upfront, ACS dba ParkIndy, would get something like 60% of the revenue and the City 40%.. If revenue reached a certain level that would fall to 40% (working off memory on the numbers) and the City’s share would rise to 60%, but b/c of the way it was set up with inflation factored in, that level would never be reached. In doing so, the city lost control of the asset for some 50 years. So if the contractor wasn’t performing, there was little we could do about it b/c of the long-term contract.
(I should stop there and point out that using a short term contract to hire a private company to collect money from meters and write tickets makes sense. It doesn’t make any sense to take a city asset – like parking meters – and privatize that.)
The contract had other gems. For example, the contract had buy-out option every 10 years that would allow the City to pay ACS to get out of the contract. But there was a provision in there that prohibited the city from borrowing the money to pay the buy-out provision. So the City couldn’t float a bond, paid for with parking revenue, to pay ACS off.
Sheila hits on another gem, that gets too often ignored. When parking spaces are taken out of use, temporarily or permanently, we have to pay ACS as if those parking spaces had 100% occupancy during hours it would have been in operation. All those Blue Indy spaces and spaces removed for construction…we taxpayers are paying ACS for them.
Sheila also hits on another point. You don’t know 50 years in advance what’s going to happen. So you’re giving up much needed flexibility. Transportation options are changing dramatically. The assumption that people are going to regularly drive a private vehicle downtown (or other urban area) and park it for the next 50 years, is starting to look like a foolish assumption. Since the parking meter contract was entered into, we have Uber/Lyft start up, bus service has changed, a smaller percent of people have private vehicles, and the pandemic has many more people working from home and not needing to drive, a trend that will likely continue to some degree after the pandemic is over. Then maybe 10 years down the road, we have self-driving cars coming. Transportation and parking options are changing dramatically.
There needs to be some sort of legislation against municipalities entering into long-term contracts in which a present administration gets an infusion of cash from a private vendor and the financial burden and risk of the contract falls on future administrations.
Finally, some people are making this into a Republican/Democrat thing. Please. When it comes to corporate welfare and boneheaded privatization schemes, Indianapolis Republican and Democratic politicians have been singing from the same hymn book for some time. Ballard had plenty of Democratic support for his plethora of privatization schemes over the years. Even when Ballard had a Democratic-controlled Council, he had no problem getting them approved.
And when you file a grievance there is no one to really call. I got a ticket on one of the side streets on Mass. Avenue on a meter I had time still left on it. I took a picture of the meter, my car, the ticket and went down town to file a complaint and I got a 1-800# with no human. If I did not pay the ticket in 7 days I would owe double. Literally no recourse for my complaint and that was about the same time the Star posted some issues about this company.
I was furious when I was at the BR Bazbeaux’s and got a ticket and I went to the ticketer and said–look, I paid there is still time. He informed me on that street the meters were all off by one and the meter I was supposed to put my coins in was to the right of the passenger seat and not the meter on the driver’s side.
It made me so mad and felt like I was getting scammed that I just stopped going downtown. I would go to Sahm’s where they had a free parking lot.
Follow the money–somebody must have had stock w/ ACS
I would add a personal note. When I was actively practicing law, I tried to get local politicians to take a look at what was going on at privately run (by CCA) Marion County Jail #2. We had a long list of egregious problems at the jail, which jeopardized the health and safety of inmates and workers. Sheriff Frank Anderson, a Democrat who had entered into the privatization contract with CCA, refused to hold CCA accountable for contract violation. He refused to even investigate problems at the jail. Zero supervision of CCA contract performance by Sheriff Anderson.
Because Anderson wouldn’t do anything, we reached out to the Indianapolis City-County Council. We thought in particular Democrats, motivated by philosophical objections to privatization, would have an interest in whether CCA was living up to its contract. Nope. None of the Democratic council members we contacted would look into what was going on in Jail #2. Outside of one or two Republican council members, no local politicians were interested in the issue.
Maybe I should mention here that CCA was a big contributor to Democratic and Republican local politicians?
So when I hear people try to make a partisan distinction between support for privatization, I have to roll my eyes. When it comes to Indianapolis’ politics that is so not true. Indianapolis politics has only one party, the Green (as in money) Party.
Elaine,
Like CCA, ACS was a big contributor to local politicians. Like, CCA ACS also hired a politically-connected law firm (ACS hired Barnes & Thornburg) and hands out jobs to well-connected local politicians. Of course, making it hard to challenge a ticket means most people give up and pay the ticket, which is exactly what they want. Some local politicians have tried to intervene in the area of enforcement but there is little to do because ACS was given a 50 year contract and the city had no leverage in getting the company to institute changes.
Paul @ 12:16,
“So when I hear people try to make a partisan distinction between support for privatization, I have to roll my eyes. When it comes to Indianapolis’ politics that is so not true. Indianapolis politics has only one party, the Green (as in money) Party.”
I have said this for years, we have a Republicrat Party here in Indianapolis.
As Eugene Debs said, “The Republican and Democratic parties, or, to be more exact, the Republican-Democratic party, represent the capitalist class in the class struggle. They are the political wings of the capitalist system and such differences as arise between them relate to spoils and not to principles.”
The biggest Privatization on-going scheme is the Tax Supported Professional Sports venues and teams here in Indianapolis. Crony-Capitalism brought to You by the local Republicrat Party.
Well, I see I have a lot of company in my dislike of the term Neoliberalism.
The “Handbook of Neoliberalism” itself suggests the term is meaningless, or at least deliberately disengenuous. I say Friedrick Hayek, Michel Foucault, and even Bill Clinton disliked the term, because each of them described Neoliberalism’s manifestations (policies) as everything but LIBERAL. It appears to me that all of them, the theorists, the economists, the politicians, settled on the liberal half of the term as a fine camouflage for the “permissivness” they meant to endow upon Capitalism.
So, what is new? We’ve always confused permissiveness with liberalism, and some of that was a deliberate attempt to take the respect out of liberal. Worse, the permissives among liberals–those who would permit every imaginable deviation from norms, no matter how perverted or self-defeating–confuse all the observers, even the pros. Which is why those who are compelled to unload their spleen on liberals resort to calling us permissives or describing our policies as being permissive to the lowest of pervert standards.
Liberal and permissive are not the same, no matter how many academics care NOT to notice.
What the hell is everyone’s first language? Obviously, it is not English.
As to the term itself (Neoliberalism), I prefer Neopermissiveness. All’s fair in the accumulation of wealth.
Our society can’t handle the disaster that is “right outside our door.” Unfortunately, in no time, there will be no remedy. I’m reminded of the last paragraph of our essay, written almost 30 years ago, at http://www.Democracide.info which quotes Hermann Rauschning, who was at the top of Hitler’s “inner circle” but left early on. I’ll never forget his warning, maybe many of you shouldn’t either:
“History shows that “freedom can be preserved in the face of a continuing process only up to a certain point. Beyond that point one inevitably becomes the slave of events. The logic of the process takes charge, upsetting all independent plans and calculations.”
Cognitive dissonance refers to a situation involving conflicting attitudes, beliefs or behaviors. This produces a feeling of mental discomfort leading to an alteration in one of the attitudes, beliefs or behaviors to reduce the discomfort and restore balances.
An Achilles’ heel or Achilles heel is a weakness in spite of overall strength, which can lead to downfall. While the mythological origin refers to a physical vulnerability, idiomatic references to other attributes or qualities that can lead to downfall are common.
Wikipedia.org
There has and always will be a balance in well run government. Giving someone a contract for more than a five year period reduces the democracy of those retaining office in the near future. Privatization should only be Used where solutions can’t be obtained otherwise.