Aaron Renn to Discuss ACS-Parking-Indy Deal on Amos Brown Today!

Tune into Amos Brown today at 1pm. Brown will have Aaron Renn to discuss the ACS-Indy parking deal. This is likely due to Renn's excellent blog post discussing the parking deal, and the comparisons to the infamous Chicago parking deal.

Amos Brown's show is broadcast on 1310 AM on your radio dial. There is a live streaming feed over at their website, Praise Indy.

More on Parking Privatization Article Roundup

Apparently, Urbanophile's excellent post has made the rounds and a number of pundits have weighed in, including Paul Ogden, Pat Andrews of Had Enough Indy?, and Gary Welsh of Advance Indiana.
Marci Oddi of the Indiana Law Blog also weighs in. Her post contains a link to the several entries her blog has done over the years concerning the Chicago parking privatization.

Finally, "Bart" from Bart Lies! posts his thoughts. His entry also contains a side-by-side comparison (in PDF format) of Chicago's parking contract and Indy's proposed contract. He brings up an excellent point in that those of us who went to school have had it hammered into our head that plagarism of any sorts is ethically bad and you'll at least get an F on a project, and might even get tossed out of school. But that's not quite how it works in the real world. More on that in a separate entry.

Again, I encourage you to read the entire original blog post here. Posting the highlights just doesn't do it justice.

Parking Forum Tonight!

As I mentioned in yesterday's post, there is a public forum on the future of publicly owned parking spaces and garages tonight. I'll be live-Tweeting from my Twitter account, and will summarize the events in a future post.

Parking Forum August 3, 6pm at 401 East Michigan Street

A post over at Indy Democrat by Jon Easter reminded me of a page on the Indy Gov website that I've been meaning to keep an eye on. The Ballard administration has asked for a Request of Qualification for management of the city's publicly owned parking meters and parking garages. The several requests that were filed are posted here.

Interesting note: The site says that it is looking for a "long-term concession arrangement and management contract" for the publicly owned parking meters and garages. This is different from the water and sewage utility deal, where it is a permanent sale.

WTHR also has a story on how the privatized parking worked out in Chicago, and talks about what has happened so far in Indianapolis concerning parking. What caught my attention was that the meeting I mention in the title of the post will be one of two! And the Ballard administration wants it to be finished by the fall.

I encourage you to come to this meeting and voice your concerns.

Here are my thoughts when I first heard about this deal from a previous blog post:

Over at Indy's Painfully Objective Political Analysis comments' section, I shared my thoughts on privatization of public parking meters and lots in Indianapolis. You can read about what the current city plan over at this WTHR story. I'd like to expand on what I posted over at IPOPA, and my thoughts on privatization as a whole.

First is to identify the goal of privatization of government services. The goal is to instill market value levels of cost in the service. The government doesn't have that incentive since most services are paid by taxes. Handing the service over to private companies, who have the goal of making a profit, have a built-in incentive to keep costs down. And the way you instill market values in a service is by competition. So not only does privatization mean private companies take over government services, but the government gets out of the service and opens up a level field for all interested in providing said service.

The last part is most important. When a government service is handed to a private contractor and they get a 10 year, 20 year, or 75 year contract, that is NOT privatizing the service, because it fails at both goals. With an extended decade plus long contract, the company has no incentive to keep it's costs low. They can raise rates regardless of market value because they have little to no fear of losing the government contract. Finally, government is still involved in the service, because all they're doing is handing their control of a service over to a private company, thus giving the company a government approved monopoly of said service. This shuts out any other company for the length of the contract who might be able to provide it at a cheaper price.

One really has to think hard before attempting to privatize something like the Family and Social Services Administration, because not a lot of private companies are in the business of providing welfare, probably because a lot of government services aren't meant to make a profit. And you have to wonder, when a private company is running a welfare service or running a jail and making a profit, are they doing it on the backs of the people they're supposed to serve?

So, working on my theory that many government services can't be privatized because there's just no profit to be made, there are a few left where a private company could make a profit. Trash pickup, road maintenance, and in the example I'll be talking about, public parking meters and parking lots.

Let's just work, with the theory, that government runs this service inefficiently and for too much money. I personally find that claim complete bull. 75 cents to park downtown for an hour with a two hour limit sounds reasonable to me (iPOPA says a lot of meters have changed to a one hour limit, but I'll save that for another time). The only problem with public parking is the lack of it, especially around government centers people might need to use.

Now, how to privatize parking in Indianapolis? As established, giving one company a 10, 20, or 75 year contract as happened in Chicago is just asking for the rates to be jacked up right away. Let's get that idea out of our heads.

First, we need to evaluate how much each parking meter or public lot is worth. Let's be honest: A parking meter right on Massachusetts Avenue or in the main strip of Broad Ripple is going to be worth more than a meter in the middle of Delaware, New York St, or Vermont St. Even more so if a big event is happening in Broad Ripple, Mass Ave, or places such as Conseco Fieldhouse or Lucas Oil Stadium.

So before any bid is even submitted, the city of Indianapolis needs to go out and evaluate how each meter (or really, neighborhood of meters) and public parking lots are worth. After that is done, we open up the bidding.

But instead of only letting Dennison Parking and it's competitors bid, let anyone who can afford it put in an offer. If a group of businesses that line Mass Ave want to manage some spots that are located in front of their businesses, and they make the best offer for that area, let them do that. If a church wants to use a lot near their church for their members, take them up on the offer. And if Dennson wants to get the city owned garage, then they get that. Any "neighborhood"/street of meters that don't get sold in the initial bidding can be retained by the city government. I would imagine these areas would probably be the meters that aren't right in the middle of downtown or in other areas of commerce in Marion County.

And then after these bids are put in, let them BUY (not lease, not rent, BUY) these meters and let them do what they want with them. This means no more law enforcement writing parking tickets, no more contracts for Dennison Parking, no more Parking "Court", and so on. If any area jacks up their rates beyond market value, then someone who is a block or two away can lower their prices.

There is a concern that various rates could be confusing, especially to tourists, but I don't think there's much to worry about. The several parking lots rented out in Broad Ripple all charge pretty much the same. They know that if they charge too much, they'll lose business.

If anyone from the City-County Council or the 25th floor wants to have a talk so this privatized parking can be a true form of privatization, and not just a government approved monopoly, I'm happy to sit down and have a chat.

Explaining the Privatization of Government Services

Over at Indy's Painfully Objective Political Analysis comments' section, I shared my thoughts on privatization of public parking meters and lots in Indianapolis. You can read about what the current city plan over at this WTHR story. I'd like to expand on what I posted over at IPOPA, and my thoughts on privatization as a whole.

First is to identify the goal of privatization of government services. The goal is to instill market value levels of cost in the service. The government doesn't have that incentive since most services are paid by taxes. Handing the service over to private companies, who have the goal of making a profit, have a built-in incentive to keep costs down. And the way you instill market values in a service is by competition. So not only does privatization mean private companies take over government services, but the government gets out of the service and opens up a level field for all interested in providing said service.

The last part is most important. When a government service is handed to a private contractor and they get a 10 year, 20 year, or 75 year contract, that is NOT privatizing the service, because it fails at both goals. With an extended decade plus long contract, the company has no incentive to keep it's costs low. They can raise rates regardless of market value because they have little to no fear of losing the government contract. Finally, government is still involved in the service, because all they're doing is handing their control of a service over to a private company, thus giving the company a government approved monopoly of said service. This shuts out any other company for the length of the contract who might be able to provide it at a cheaper price.

One really has to think hard before attempting to privatize something like the Family and Social Services Administration, because not a lot of private companies are in the business of providing welfare, probably because a lot of government services aren't meant to make a profit. And you have to wonder, when a private company is running a welfare service or running a jail and making a profit, are they doing it on the backs of the people they're supposed to serve?

So, working on my theory that many government services can't be privatized because there's just no profit to be made, there are a few left where a private company could make a profit. Trash pickup, road maintenance, and in the example I'll be talking about, public parking meters and parking lots.

Let's just work, with the theory, that government runs this service inefficiently and for too much money. I personally find that claim complete bull. 75 cents to park downtown for an hour with a two hour limit sounds reasonable to me (iPOPA says a lot of meters have changed to a one hour limit, but I'll save that for another time). The only problem with public parking is the lack of it, especially around government centers people might need to use.

Now, how to privatize parking in Indianapolis? As established, giving one company a 10, 20, or 75 year contract as happened in Chicago is just asking for the rates to be jacked up right away. Let's get that idea out of our heads.

First, we need to evaluate how much each parking meter or public lot is worth. Let's be honest: A parking meter right on Massachusetts Avenue or in the main strip of Broad Ripple is going to be worth more than a meter in the middle of Delaware, New York St, or Vermont St. Even more so if a big event is happening in Broad Ripple, Mass Ave, or places such as Conseco Fieldhouse or Lucas Oil Stadium.

So before any bid is even submitted, the city of Indianapolis needs to go out and evaluate how each meter (or really, neighborhood of meters) and public parking lots are worth. After that is done, we open up the bidding.

But instead of only letting Dennison Parking and it's competitors bid, let anyone who can afford it put in an offer. If a group of businesses that line Mass Ave want to manage some spots that are located in front of their businesses, and they make the best offer for that area, let them do that. If a church wants to use a lot near their church for their members, take them up on the offer. And if Dennson wants to get the city owned garage, then they get that. Any "neighborhood"/street of meters that don't get sold in the initial bidding can be retained by the city government. I would imagine these areas would probably be the meters that aren't right in the middle of downtown or in other areas of commerce in Marion County.

And then after these bids are put in, let them BUY (not lease, not rent, BUY) these meters and let them do what they want with them. This means no more law enforcement writing parking tickets, no more contracts for Dennison Parking, no more Parking "Court", and so on. If any area jacks up their rates beyond market value, then someone who is a block or two away can lower their prices.

There is a concern that various rates could be confusing, especially to tourists, but I don't think there's much to worry about. The several parking lots rented out in Broad Ripple all charge pretty much the same. They know that if they charge too much, they'll lose business.

If anyone from the City-County Council or the 25th floor wants to have a talk so this privatized parking can be a true form of privatization, and not just a government approved monopoly, I'm happy to sit down and have a chat.

"Privatization" of Chicago's parking attracts lawsuit

Something that has greatly interested me in recent months is the mismanagement of the "privatize it" talking point. That if the government lets private companies handle government functions, "market values" will be applied rather than government values, and implying that it'll be a better deal. Since the private company has the motivation of making a profit, they have an incentive of keeping costs low.

That usually doesn't happen.

Chicago recently privatized their public parking, giving a 75 year contract, and later showed that the city undersold by about $1 billion. Surprise surprise, the rates went up. Also, humoursly, the higher rates caused meters to fill up quite fast, making it impossible to pay for a spot.

Now, the city is being sued. Apparently, Chicago police are still writing tickets for fining vehicles at expired meters. The Independent Voters of Illinois-Independent Precinct Organization claim that police funded by tax dollars have no authority to enforce something operated by a private company and thus don't have to pay. Failure to pay the fine can cause the Secretary of State to revoke your license, which again they contest the secretary doesn't have the authority to do because it's done at a private meter.

So not only does this privatization result in higher rates for citizens and visitors, but public resources are STILL being used.

Now, one may ask why those in Indianapolis should be concerned about this. Because our city is thinking of doing the same. Rates were quoted to be going to $1.75, and possibly extending the time the meters run. The idea of meters that use credit cards or charge-by-phone was also floated in the Indianapolis Business Journal and Indianapolis Star articles on the subject.

Now, let's review recent privatization efforts, or "public-private partnerships" as the governments likes to call them:

IBM running FSSA has resulted in FSSA being run WORSE than it already was. They recently got over $1billion extra to fix the basics that they screwed up. And as previously reported, Daniels is never going to cancel the deal.

The Indiana Toll Road quickly raised rates after being privatized.

Indianapolis' residents might be seeing another increase after a recently approved 11% increase for their privately run water company.

Almost all of these have 10 years or longer in their contracts, and anyone who has ever taken a high school econ course knows that the economy can change quickly in much less time in 10 years. While citizens have some control over government agencies via their elected legislative representatives, they have little recourse if a private company screws up the work of the government. And it gets even worse when it's a government function that handles the work associated with the poor, sick, or imprisoned, because it's much more likely to be swept under the rug.

I think Indiana Republicans and Democrats need to learn what privatization actually is. Giving someone a decade+long contract with little chance of being fined/cancelled is a government deemed monopoly, not privatization