Friday, November 5, 2010

More on the ACS Parking Scam or Be Wary of the Dollar Sign

I attended the forum last night hosted by City-County Councillor Ed Coleman (LP-At Large) on the revised Affiliated Computer Services-City Of Indianapolis parking deal. Michael Huber, the deputy mayor who is heading this project, was the main presenter. He was supported by one representative each from the following groups: Indianapolis Downtown Inc, Evens Time, and ACS. In attendance also were several members of the Libertarian Party, including Timothy Maguire, Chairman of the Libertarian Party of Marion County. Pat Andrews was there, as were about a dozen other people.

The presentation was pretty dull and didn't consist of a lot of information that I hadn't already seen before. You can view it for yourself here. One slide did stand out, and led to my first question once Huber started taking questions from the audience.

I noticed that the projections that the city would get were approximately $300 million under the old deal and $600 million under the new deal. Knowing that the financial advisers to the city, Morgan Stanley, estimated much lower, and knowing that these amounts were ACS' estimate, I asked what the differences were and how Huber arrived at these numbers. He offered to send me the exact numbers and I've since e-mailed him and am awaiting his response.

I then expressed my concern that, over the course of the next 50 years, public transportation could change within central Indiana. Indy Connect has several events planned within this month, and if their goals are ever accomplished, this long term lease could cause us problems that the donut counties don't have. Huber bought up the 200 meters that are allowed to be removed from the system without penalty, and said that Indy Connect was working with them at some point to put that into the contract.

I also asked how the long term lease would affect T2 Systems and their parking "court". The "court" would still be working directly for the city and not ACS.

The 200 jobs were also a topic of a few questions, and Huber and the ACS representative made no secret that the 200 jobs were in a separate contract and weren't necessarily related to the management of parking. There's nothing in that separate contract that specifies what these jobs are, how much they pay, and so on.

One of the more emotional testimonies was given by a resident who lives within downtown but outside of the central area where all the businesses are located. His neighborhood has several parking meters all along the sidewalks of his and his neighbor's homes. Even though he says that no businesses are even near his home, they are still ticketed as if they were. He's made peace with the fact that, unless he wants to feed the meter outside of his own home, he has to be out the door by 7am and home no earlier than 6pm. But it puts an inconvenience when he has days off, or friends and family come over. He told of one story where on the day after Thanksgiving, he wakes up to find a ticket on his vehicle left at 7:01am. He called the city to complain, but the city wasn't open for business that day. But Denison Parking and it's meter maids certainly were.

With the extended time of the meters to 9pm and Saturdays, it seems like this gentlemen will essentially be kicked out of his home for several hours more than he already is. Even though he has met with Huber and ACS previously, it doesn't seem anything was changed to address his neighborhood's concerns.

When Coleman asked what the audience thought, I told him my story of the utility sale to Citizen's Energy Group, which Coleman supported. I, along with several bloggers and representatives of the Libertarian Party, met with Citizens Energy Group's lawyers in a meeting hosted by Councillor Christine Scales (R-4th District). Gary Welsh and I both questioned how Citizens would attain the savings they could,and Welsh specifically pointed to the Veolia contract that has been criticized as a one-sided deal. Citizens' representatives told us that Veolia and United Water's contracts will have to be bought in as the vendors at least for the remainder of their contract. And a week or two ago, we learned that Veolia was going to get a huge buy out because apparently, Citizens can't work efficiently with them.

My concern to this deal was similar. That there is something down the road that we aren't looking at now, and we'll be forced to spend a whole lot of money to get out of this deal or improve it at a later date.

I talked with several people after the meeting, and I suspect I ran into the stereotypical libertarian mindset of "privatize everything" and "sell everything that isn't nailed down". Some had made the assumption that the government doesn't do anything well, so why shouldn't we sell off this asset? What I say to them is that the day-to-day management isn't even going to be done by ACS. It'll be performed by Denison Parking, the same people doing it now. And personally, I think they're doing a fine job. Why add two more layers of bureaucracy?

I think some people are getting fooled by the huge dollar amounts shown. What is lost upon them is that the purpose of parking meters isn't to raise a huge amount of money, but to encourage turnover and make efficient use of curbside space. The minimal amount of money raised by them is just supplemental to whatever taxes are normally imposed for the maintenance of roads and sidewalks.

This deal is rotten to the core, there's no other way to put it. This introduces no free market principals to the mix, and is just a 50 year government approved monopoly on parking. At the very least, we should start this process over again, like other cities have when they rejected the initial parking proposals.

Additional views:

Advance Indiana: here and here.
Pat Andrews: here and here.


  1. 'The 200 jobs were also a topic of a few questions, and Huber and the ACS representative made no secret that the 200 jobs were in a separate contract and weren't necessarily related to the management of parking. There's nothing in that separate contract that specifies what these jobs are, how much they pay, and so on."

    NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!!! That jobs letter is NOT a contract as any first year law student will tell you. There is no consideration for it, which is a requirement for a contract. If they want to make it legally enforceable, all they need to do is to put it in the contract. They are not doing that for a reason...they don't want it enforced. They can most certainly include it in the contract, even if the jobs don't relate to parking...again another fact that a first year law student could tell you.

    The 200 job thing is yet another example of why this whole thing smells bad.

  2. The stench of this deal is still lingering through out the city. The conflicts of interest are apparent and it surfaces the special interests involved.
    Seriously folks let's get real. Public officials are supposed to be trustees of the commonweal, not political buccaneers seeking their own private gain. But sometimes, in what economists call a principal-agent problem, those trustees forsake that obligation and misuse the power delegated to them in ways that advance their personal interests rather than those of the public.
    Corruption distorts the allocation of resources toward projects that
    can generate illicit payoffs. Besides the undesirable efficiency consequences arising
    from this distortion, the effect is likely to aggravate social inequalities, because the poor and powerless suffer, by definition, a comparative disadvantage in securing special favors.
    As far as the 200 jobs ACS proposed to bring to the city for seven years that is a manipulation of the people to get this deal passed. Here’s some food for thought about ACS.
    Salaries of ACS fall below the average. Their wages actually fall with in the poverty level. ACS employee's are also on a salary freeze and have not received a raise in over three years. They have posted management positions for starting wages of $9.50 hourly.
    ACS has a 2.2 company rating nation wide by their employee’s. This is a strong indicator that ACS is not the kind of company the city of Indianapolis and the people of Indianapolis need. Indianapolis needs good, strong, ethical companies like Google, SAS, Qualcomm, and Genentech. Each of those companies has a program that enables employees to voice their ideas, enhances the innovative culture, and ultimately develops ideas that will benefit the business, communities, and employees. Each company supports innovation. They offer stress free environments and offer their employee's livable wages with exceptional perks. AND their annual earnings and profits are less than that of ACS (Affiliated Computer Services).
    So, for ACS to "say" they are going to bring 200 jobs with this deal is insulting.
    Their current employees’s throughout Indiana live off pennies, food stamps, and are regular patrons of local food pantries. Unless you work for ACS, people have no idea what ACS employee’s endure.


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