Ballard Administration – Sheila Kennedy

Pandemics And Parking Meters

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…

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I Told You So

There’s nothing more annoying than people who say “I told you so”–especially when they told you so.

But, dammit, I told you so. Not that I was the only naysayer–not even close–but I posted several arguments against the privatization of Indianapolis’ parking meters.

So I’m going to be obnoxious, and share the lede of a recent report from the Indianapolis Star

In the five years since Indianapolis leased its parking meter operations to a private company, rates have skyrocketed, hours have expanded and the number of paid spaces has increased.

But the city is reaping only about a quarter of the dollars ParkIndy projected when it paid $20 million to the city to operate the meters until 2061.

Those of us who opposed this “deal” (a word that is beginning to take on Trumpian implications for me) raised several issues:

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. They 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.

Added costs to downtown development and civic events. 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 requires the City to pay ACS whenever such interruptions disrupt its projected revenue from those meters.

Why privatize at all? This 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.

There really was no compelling reason to enrich private contractors and reduce (desperately needed) City revenues.

Why ACS? ACS is the primary partner of ParkIndy. There was 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). Washington lost $8,823,447 in revenue and experienced a twenty-fold increase in complaints from the public.

As I noted at the time, one of the problems with privatization in general is that it leads to speculation about cronyism and political back-scratching. In this case, the Mayor’s “personal advisor” was a registered lobbyist for ACS through the same law firm that employed the then-President of the City-County Council (who did not recuse himself, and whose affirmative vote was what allowed the contract to be approved by a narrow 15-14 margin.)

All of these criticisms were brushed aside as mean-spirited and uninformed. We were told that ACS/ParkIndy’s “expertise” would generate more revenue than would be realized under city management.

So, according to the Star, how’s that working out?

ParkIndy has collected $40.5 million in parking fees and fines since converting the first meter March 3, 2011. Projected over 50 years that amounts to about $426 million. The city’s take in a profit-sharing agreement has been $15 million, which would total about $158 million in 50 years.

ParkIndy estimated the city would earn $620 million over the 50-year life of the contract. To achieve that, ParkIndy would need receipts of about $1.5 billion, or more than three times its current pace.

Told you so.

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Shenanigans and the Proposed Justice Center

The Ballard Administration’s proposal to build a new Justice Center complex across the river from downtown just hasn’t smelled right for a whole host of reasons.

No one seriously doubts the need for such a facility, but critics have raised a host of legitimate concerns about this particular proposal. The excessive secrecy with which bids were solicited and evaluated raised red flags. The decision to use private financing via a lease/purchase when a public bond issue would be significantly cheaper makes no sense. The Council’s fiscal analyst has challenged the accuracy of claims that cost savings would cover lease payments without a need to raise taxes.

It isn’t just fiscal concerns, important as those are. Prior administrations have spent millions of dollars and much political capital building a robust downtown; what will happen to that downtown market if lawyers and other justice system enterprises (from bondsmen to court reporters) no longer work, shop and eat in the center city?

Architects and city planners have panned the design, and criminal justice reform groups have warned that going ahead as currently planned will foreclose needed changes to a dysfunctional system.

The Administration has ignored the critics, shrugged off the concerns and intensified pressure on the Council for a quick approval. That insistence on the need for haste has been unseemly, considering the huge amounts of money involved and the important issues raised, and Councilors on both sides of the aisle have expressed a desire to engage in a far more thorough and public review.

Unseemly, however, wasn’t the word that came to mind when I read the following in the Indiana Lawyer.

Indianapolis City-County Council Chief Financial Officer Bart Brown said councilors have told him they’ve been offered up to $50 million in projects spread among five districts if they vote to approve the proposed $1.6 billion criminal justice complex.

The Administration has dismissed these allegations as “rumor,” and I certainly have no independent evidence one way or the other. It seems highly unlikely, however, that five City-County Council members would invent such a story out of whole cloth.

As I wrote last month,

a deal this complex and expensive, intended to span this long a time-frame, needs to be done right. That means it needs to be thoroughly vetted by all stakeholders. I get suspicious when we’re given a short window within which to commit vast amounts of public money, and when the purported need for speed is based upon dark warnings that we need to move quickly in order to “lock in” benefits we aren’t even sure are there.

I get a lot more suspicious when those lobbying for speed are offering a quid pro quo.

I suspect that someone stands to make a lot of money, and I’m pretty sure it isn’t us taxpayers.

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Mayor Ballard–TMI!

For a Mayor whose administration has been uncommonly secretive about information his constituents have a right to know, Mayor Ballard seems totally unaware of the damage that can come from TMI–too much information.

Ballard has been very defensive about his administration’s inability to reduce our horrendous crime rate (which is substantially higher than New York’s). That’s understandable. He has also insisted that the problem won’t be solved simply by adding more police, although he has conceded that IMPD is far, far below optimal staffing. A couple of days ago, he announced–with considerable fanfare–that the officers we do have will be deployed differently; that more police will be assigned to neighborhoods experiencing the most crime.

Okay. Maybe that helps, maybe not, but certainly reasonable.

The problem is, he identified those neighborhoods.

If you think about this for a minute–something I’m fairly confident no one in the Mayor’s office did–you can see the problem. Each area identified has neighborhood organizations, urban pioneers, nonprofits and others working hard to improve these communities and trying to encourage people to move in and become part of the area’s revitalization struggle. The administration has effectively undercut those efforts, labeling their neighborhoods as places people shouldn’t want to live.

The city might just as well have posted “Danger, Keep Out” signs.

As if that wasn’t bad enough, folks living in other neighborhoods–areas with problems that aren’t “the worst”–look at the Mayor’s deployment strategy and worry that the already thin police presence in our neighborhoods will decline, inviting a corresponding rise in crime. (If I were a burglar, I’d certainly consult that map–and confine my nighttime activities to non-targeted areas.)

The strategy of deploying resources to areas that most need those resources is fine. Announcing the specifics is bone-headed.

And this from an Administration that ignores legitimate Freedom of Information requests and refuses to share truly public information with the public.

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Needed: More Sunlight, Less Secrecy

I recently received an email from IndyCAN–the Indianapolis Congregation Action Network–a consortium of congregations working to build civic capacity in moderate and low-income communities. The mailing raised legitimate questions about the Justice Center project that the Administration seems to be “fast-tracking.” (I hate to be suspicious, but the goal appears to be creation of a “fait accompli” before Open Door law requests require disclosures of terms and partners, and before an election that might force a change in the “players.”)

I’ve previously posted my concerns over the contract process; IndyCAN raises other issues:

“IndyCAN members have been digging into the proposal to build a new criminal justice center and what we’re learning is troubling.

While the details have been kept secret, we believe that city officials are rushing ahead with a plan this fall that would cost as much as half a billion dollars and add 1,500 new jail beds.

This at a time when many cities are shifting away from policies that overcrowd jails with low-level nonviolent offenders and fuel racial inequality, choosing instead to invest in rehabilitation, and open up job opportunities that keep people out of prison.”

I don’t know whether these concerns are justified–and neither does anyone else, because the Ballard Administration has refused to disclose the bases upon which it made its decisions about the proposed facilities: documentation of need, size, cost, financing mechanism, method of choosing (“pre-qualifying”) bidders….all that has been kept secret, not just from the public, but also from members of the City-County Council.

An IBJ editorial in early September said it better than I can:

The city might be negotiating a sweet deal for Indianapolis taxpayers over the proposed $500 million justice center to be built across from the Indianapolis Zoo on the former site of General Motors’ stamping plant.

Or, taxpayers might be getting a bad deal.

There’s no way to know whether either is the case, because Mayor Ballard’s administration has kept secret details of its bidding process. That lack of transparency is bad government and violates the spirit of Indiana’s open-records law.

In April, the city issued a request for proposals for an all-inclusive project-management contract, in which a developer would design, build, finance, maintain and operate the new jail and courts facility. Of five companies that responded to the RFP, the city chose three finalists. Bids are due in October, and the City-County Council will likely vote on the arrangement early next year.

Ballard officials say such a package will provide a sparkling new building with improved city services—without a tax increase. They say the new contract—likely for a 35-year term—will cost the city no more than the annual $123 million it now spends to operate courts and corrections.

And they ask us to take their word for all of that. Everyone else is left to guess.

Putting terms of deals in the public realm while they’re still in the works isn’t just good government. It also can lead to better deals, as was the case in 2010 when public input led the Ballard administration to amend terms of its parking meter privatization.

The Mayor’s Office has cited no exception to state law that would explain why it has provided to justice center bidders but not to the public the maximum fee such a contract will require, why it refuses to release the RFP document, and why it won’t disclose calculations on what the project will cost taxpayers.

This is not the first, or even the second, time the Ballard administration has asked us to accept on trust that it is a wise steward of taxpayer funds. Examples include the development of the former Market Square Arena site, the Mass Ave fire station land swap, and the Broad Ripple parking garage and retail space at College Avenue and Westfield Boulevard….

Trust is not an entitlement; it is earned. Transparency and respect for the law are the surest ways for the Ballard administration to earn it.

Lack of transparency is an invitation to suspicion and cynicism. This Administration has repeatedly issued that invitation.

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