Indy Leases Meters to Private Sector
By Matthew Darst
Challenged with significant expenses to support an aging infrastructure, low parking turnover, and flat rates for 30 years, the city of Indianapolis was in need of new parking meters and next-generation technology to meet its needs and parking demands.
A public-private partnership between the city and ACS, A Xerox Co., proved the solution, helping manage scarce curbside parking, promoting turnover, providing convenient payment options and supporting economic development.
City officials and ACS representatives will discuss the transaction in greater detail at the PT-sponsored Parking Industry Exhibition (PIE), at 8 a.m. on March 20, providing greater insight into the challenges and benefits of implementing a parking meter concession.
In August 2010, Indianapolis Mayor Greg Ballard announced the winning bidder for a 50-year lease of nearly 3,700 city parking meters in the city’s downtown and Broad Ripple areas.
Under the lease, a team comprising Xerox-subsidiary Affiliated Computer Services (ACS) and local partners took over responsibility for meter system operations, maintenance and capital investment. In exchange, ACS paid the city $20 million upfront and a share of ongoing revenue, estimated to reap $600 million for the city over term.
Under the agreement, the ACS-led team manages all aspects of parking, including meter collections, coin counting, deposits, meter installation and ongoing maintenance, public relations, meter closures, residential permitting, and parking enforcement.
The concession shifted costly financial risks, as well as implementation and budgetary risks, to ACS. The company, and not the city, bears all expenses going forward, saving Indianapolis approximately $3 million annually in operating costs. By providing an ongoing, annual revenue stream, the revenue-share structure aligns objectives for service, turnover and revenue return over the term of the agreement.
The city maintains flexibility and control in key areas of economic development, public policy and rate setting. The agreement can be terminated for convenience every 10 years if the city ever determines the arrangement is no longer in its best interests.
The meter modernization was implemented in a phased approach to minimize disruption and provide an adjustment period for motorists and businesses. A mix of technology, including pay boxes and credit card accepting single-space meters, was installed. The entire system of more than 3,700 parking spaces was upgraded, offering conveniences and efficiencies never before realized.
ACS and Indianapolis implemented a robust public information campaign. All details regarding the transaction and the implementation were put before the public for comment, guaranteeing unprecedented transparency.
In addition, ACS met and continues to meet with dozens of community organizations; issues updates using social media, including Facebook and Twitter, and a newsletter; and provides public demonstrations of new technologies.
In August 2011, the Indianapolis Business Journal (IBJ) reported that “Indianapolis’ decision to lease its parking meters to a private company so far appears to be a financial boost for the city.”
Under private operation, “total revenue from meter operations grew to $1.7 million for the quarter ended June 30 ,” compared with $1.3 million during the March-June 2010 period under public operation. The IBJ also said the city’s share of that revenue totaled $498,273, up from $108,625 it made during the same period under public operation – “a whopping 360% increase.”
Economic benefits, however, are often divorced from the customer experience. In addition to revenues and efficiencies, a properly managed parking system must also provide the benefit of convenience to motorists.
Toward that end, every parking meter in Indianapolis can now be paid by phone in addition to coin or credit card. Further, to reduce the time spent parking, ACS is installing more than 2,000 sensors in Indianapolis, allowing motorists to find available parking spaces downtown and in Broad Ripple using a free app.
“The additional revenue the city earns from the agreement is earmarked for street, sidewalk and alley repairs in metered areas,” the Indianapolis Business Journal reported.
Matthew Darst, Director of Operations for ACS, A Xerox Co., can be reached at email@example.com.
Article Abstract from February, 2012