NEW YORK—As the city seeks a private company or companies to manage New York City’s 89,500 parking spots, the recent mistakes and successes of other cities making the same conversion are revealing.
The proposal is also drawing heat from unionized city workers and elected officials.
“There is no reason to turn over the off-street parking system to a private company whose only concern is making money,” said Michael DeMarco, president of NYC Traffic Employees Local 1455, at a protest on City Hall steps Monday. The union has been operating the system since the late ‘80s, when they took it over from a corrupt private company.
Chicago’s decision several years ago to implement a parking privatization scheme was also criticized at Monday’s protest. The city’s government made what many called a poor decision of turning over its 36,000 parking meters for 75 years to a private company for an upfront payment of $1.16 billion.
Yet other cities have moved toward similar deals, while learning from the mistakes—such as a quick increase in parking rates—made in Chicago.
Public Profits
Indianapolis has increased revenue and modernized its system. A privatization proposal was approved there in late 2010, with much less focus on upfront benefits—it received only $20 million upfront—and more on recurring revenue, shared with the private companies. The city was reaping $87,000 from its parking system before the agreement, according to mayoral Communications Director Marc Lotter. In its first year, the deal netted the city almost $1.4 million.
Indianapolis is plowing the money back into the parking system and adjoining areas, such as better sidewalks and a new parking garage. ParkIndy, a partnership of private companies, has installed the latest parking technology, including sensors that were recently embedded into 550 parking spots.
“We’ve gotten millions of dollars in improved technology that are greatly to the benefit of the people who park at the meters,” said Lotter. A smartphone app enables drivers to find any empty nearby spaces, and see prices and time limits.
Indianapolis’s parking system is much smaller than New York City’s. But it provides an example of improvements in technology and revenue that Mayor Michael Bloomberg’s office and the Department of Transportation are seeking.
The city is “looking at a private manager to come in, guarantee them a revenue stream, make business efficient, and partner in on deploying new technology,” said Leonard Gilroy, director of government reform at Reason Foundation, a nonprofit free market think tank.
City Keeps Control
The city would maintain control of rates and the system, according to the Request for Qualifications (RFQ) put out last month, and proposing companies must guarantee a minimum of $100 million annual parking revenue for the city. A qualified company also must have at least 100,000 parking spaces under management elsewhere.
“Some of the fears that are being stoked out there among opponents are baseless,” Gilroy added, dismissing comparisons between Chicago’s problematic system and New York City’s potential system.
Both the mayor’s office and Gilroy criticized Comptroller John Liu, who connected the Chicago blunder with the city’s proposal, despite marked differences.
“It’s unfortunate that the comptroller sees things differently and doesn’t understand the facts about this project—including that we are at an early stage and have not yet decided whether or not to pursue a partnership with a private operator,” said Julie Wood, a mayoral spokesperson, via email.
The deadline for the RFQ was pushed back to Aug. 22 because many questions were received from potential bidders. The RFQ doesn’t guarantee a new system; Los Angeles took no action after closing its proposal process in July 2010 for a similar, but smaller, proposal for parking garages.
Union members and elected officials at Monday’s protest at City Hall said the current system is good enough, and working better and better, pointing to a revenue increase from $147 million in fiscal year 2010 to $192 million in fiscal year 2012.
A couple dozen parking system employees have been let go through attrition over the last few years, as a conversion from single parking meters to muni-meters (boxes positioned in the middle of a block to serve multiple parking spots) has been completed in Manhattan, and will be finished citywide by 2013.
Richard Soto, a 24-year veteran of Local 1455, said he remembers when the city privatized the parking system in the ‘80s. A corruption scandal, in which the employees of the private company stole $1 million, ended with control of the system being handed back to the city.
“Private agencies are not safe,” said Soto. “What they want to do is get rid of people, have more money coming in, and have less people do more work at the same pay,” Soto added. “And that’s atrocious.”
Soto works in a unit separating coins from “slugs,” or coin-shaped pieces of metal that people drop into meters, while he wears a mask and earplugs. He used to be a meter maid. Of the 110 members of Local 1455, Soto said 47 had received letters from the city telling them “pink slips may be coming.”
The city has 466 parking system employees in the fiscal year 2013 budget. Respondents to the RFQ “will be asked to provide with their response an explanation of plans concerning the utilization of these city employees,” states the RFQ.
Wood, said in the email, “The mayor has said many times that city government does not exist to employ as many workers as possible—it exists to serve New Yorkers effectively and efficiently, and we are working to ensure that our parking system does that.”
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