David Hoppe

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:: The parking meter gambit

Raising rates, or is it taxes?

By David Hoppe

It's rare for a blogger to beg. Bloggers tend to be an assertive, confident bunch. But beg is what Aaron Renn, better known as The Urbanophile, did on his blog (www.urbanophile.com) regarding the city's proposal to lease its parking meters to a private firm in Dallas for the next half-century.

"I beg the city to reconsider and not do this deal," wrote Renn. "Fifty years is an awful long time to have your hands tied."

Renn's blog about what makes cities tick is influential. His initial, detailed criticism of the parking meter proposal inspired a thoroughgoing response from Deputy Mayor Michael Huber, the deal's architect. Renn's criticism and Huber's response can both be found at The Urbanophile blog site.

Now if you're like me, you'll probably find that wading through the fine print of this proposal makes your eyelids feel about as limber as the powdery old window shades in a skid row flophouse. That's what makes something like the parking meter deal so dodgy - few of us are likely to see its problems, because there's very little in its formulaic language and projections to excite the imagination. But as consideration of this deal proceeds, its potential unintended consequences are on the sidelines, jumping up and down to get our attention.

Like many of us, Renn agrees that it's time the city's approach to metered parking was brought up to date. He congratulates Mayor Ballard for wanting to modernize the meters, bring the cost of parking in line with market rates in other towns and invest in infrastructure.

He's thrown, though, by the 50-year length of the contract and by the fact it can't be terminated unless the vendor defaults - a virtual impossibility.

The city would get $35 million upfront from Xerox, the parent company of parking firm ACS, for doing this deal, with a share of profits over the life of the agreement.

Renn, who is not opposed to all privatization efforts, fears in this case the city could be signing away "use of a precious public resource." He says the deal amounts to the city taking out a $35 million loan, with the profits from the transaction - which he estimates could be as much as $1 billion over 50 years - representing the interest that Xerox will pocket.

Why would the city want to walk away from such a potentially lucrative source of revenue, particularly when it is facing a budget shortfall? It can't be the cost of replacing our antiquated parking meters. The price tag for that job appears to be about $10 million, a sum not beyond the city's means. After all, we're paying the Pacers that much per year to keep dribbling in Conseco Fieldhouse.

I fear it may have more to do with the lengths the Ballard administration will go to disassociate itself from anything that might be called a tax increase.

Raising meter rates to $1.50 per hour by 2012 and extending the hours during which motorists pay to park downtown or in Broad Ripple is a modest proposal that makes sense, particularly when caps on property taxes and reduced personal income have strapped the city budget.

But these are also tax increases of a kind. By privatizing the city's parking services, the Ballard administration puts the increased cost of parking at arm's length while, at the same time, claiming to enhance the budget for infrastructure improvements. But given the city's $4 billion in looming bills for water and sewer improvements over the next 15 years, that $35 million looks more like a drop in the bucket.

The city government's urge to avoid a political conversation about the cost of governing in order to reap a quick payday -- even though that payday may compromise longterm municipal earning power -- reminds me of America's long-running infatuation with credit cards. Americans have passively put up with stagnant wages and salaries since 1980 in exchange for the illusion of affluence created by the availability of easy credit. Now that credit's not so easy to come by, we are faced with the stark reality that we haven't got enough cash to pay our bills.

The same thing applies to governments. Earlier this month, the Indiana Fiscal Policy Institute released a report with a double dose of sour medicine: Indiana will have to cut spending, increase taxes or both in order to pay for basic government functions. The Daniels administration rejected the idea that tax increases would be necessary and presumably went back to looking for another government service to peddle.

But it's not just the financial premise of the parking meter deal that appears flawed. As Renn points out, a lot can change in 50 years. Locking the city into an agreement that inhibits how it might design its streetscape could adversely affect our ability to make civic improvements. Would the city approve a project like the Cultural Trail if it had to pay a private company for lost parking revenue?

Fixing Indianapolis parking meters is a worthy goal. The Ballard administration has yet to tell us why it thinks city government isn't up to the task.