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Who should run L.A.'s parking meters?

Meter2 In a bid to potentially raise hundreds of millions of dollars or more for ailing city coffers, Mayor Antonio Villaraigosa is exploring whether to lease the city’s parking structures and meters to a private party to operate.

The mayor in recent weeks has quietly begun building a team of financial experts and attorneys who could advise him in structuring a deal. In December, Chicago Mayor Richard Daley -- whose city is also grappling with a big budget hole --  signed a deal that gave his city $1.15 billion in up-front cash in exchange for leasing the city’s roughly 36,000 meters for 75 years to infrastructure funds overseen by Morgan Stanley. (Here's a link to Daley's news release on the deal, and here's a link to a Chicago City Council agenda from December with more details of the deal).

How does the deal work? Morgan Stanley gets to keep all revenue from the meters for the 75 years. That's a nice stream of cash that currently amounts to about $20 million annually but will probably be more after significant rate hikes that were part of the deal go into effect.

And what's in it for Chicago's citizens? First and foremost, a big shot of cash that the city otherwise wouldn't have. More than $600 million is going into balancing the city's budget through 2012, and another $400 million is being set aside to generate interest to replace the meter revenue lost.

But it is the deal's fine print that raised eyebrows. As part of the deal, the city significantly raised meter rates for the first time in years, in some cases quadrupling them. The city also required Morgan Stanley to install better meters and retained the right to both write parking tickets and keep parking ticket revenue. However, Morgan Stanley won the right to do "supplemental enforcement" -- meaning the parking concessionaire they hire can also write tickets to help teach people what happens if they forget to plug meters.

"The mayor intends to move forward with a parking structure deal that makes the most sense for the long-term fiscal health of the city," said Matt Szabo, a Villaraigosa press secretary. "We are also aggressively exploring the possibility of a private partnership for the operation of the city's parking meters.

"While it's cliche to say the devil is in the details, in this case it really is," he added. "The final proposals will be fully vetted before the council, and will receive a thorough hearing before the public.  But the mayor is confident that, even in this tough economy, we can implement a much smarter, more efficient way to provide parking services in this city while generating the revenue to preserve other critical city services at the same time."

The city of Los Angeles has managed about 43,000 parking meters for decades, and the results are there for everyone to see: Until a recent meter replacement project got underway, about 10% to 15% of the meters were broken at any given time, either because of vandalism or mechanical failure. Unlucky motorists who legally park at failed meters have also found they have a habit of resetting to healthy mode, often resulting in a ticket when a meter officer wandered past.

The obvious policy question is this: Are the city's meters better off in the hands of the public or private sector? Another question: Would such a deal prevent the L.A. City Council from sometimes funneling excess parking meter revenue to their pet projects?

The other significant aspect of the deal is what it says about the economy. With stock markets tumbling and world markets in chaos, it's clear that some investors see the curbside parking meter as their safest bet.

I'll have more about such deals in tomorrow's online and print editions.

-- Steve Hymon

 
Comments () | Archives (14)

Ridiculous. Another short-term gimmick.

NO NO NO NO NO!!!!!!!

Selling off the parking meter concession would be just giving away a public resource for a FRACTION of its value. (The City is LOSING the meter collections for decades.) I live in Chicago, and the consensus here is that not only did Daley get cheated by Morgan Stanley, but he sold off a potentially invaluable source of revenue just so the City could get a shot of ready cash which they will probably blow just like they did when they sold the Skyway.

Mayor Villaraigosa is just as much of an idiot as Daley is if he sells off LA's parking meters.

Absolutely NOT.

Parking meters should be a city responsibility. A private company will raise and raise and raise the rates.

And what is this about their ability to write tickets? Do those tickets hold up in court? Do we now have a private mercenary army of parking patrol?

Unbelievable. What's next? Corporate branding of meters (which, if you haven't noticed, have been extended until 8 PM in many regions-- WITHOUT THE STREET SIGNS BEING CHANGED)? "Your ticket provided to you by Arby's!" Does no one at City Hall have long-term fiscal strategies? Apparently not.

Already read this story in the LA Business Journal - Way to be original...
BTW privatizing meters, bad idea.

I was in Chicago just after the deal took effect. The people hate this arrangement. The deal allowed Morgan Stanley to unilaterally change all meters to 24 hours of operation. That ends up being a fee for local neighborhood residents, who were having guests use the off-hour spots.

NO, NO, NO.... This plan is horrible!!

Part of the problem is what happens to the monies collected? Allocation of funds raised via the meters is the problem. Unlike Pasadena, which reinvests the money collected from meters to the area where the meters are located, Los Angeles plows all monies earned into the general fund and puts a very small % back into the area which generated the fund. So instead of an Old Town Pasadena of clean sidewalks, trees, pedestrian friendly lighting we get, in my neighbor, neglected or broken meters, dirty sidewalks, missing trees, horrible lighting etc... LA should ween away from the general fund mentality and aim for reinvesting meter money into those better streets, which in-turn attracts better merchants, which in-tern increases the city tax base.

LA has already raised the meter rates through the roof recently and has expanded hours of enforcement several hours. In a city where cars are a necessity the city has chosen to penalize it's citizens for having to park them. This city administration is getting ridiculous. It's about time to vote them all out of office They're not here to help us, that's for sure.

In addition, the Chicago deal took away all "down" time. The meters have to be fed 24/7/365.2422. Glad I rarely, if ever, drive into the city.

I live on the east side and I hate the new "meters". They don't work very well, are expensive, and in general, drive everyone insane. I rarely go to eat at Sunset Junction b/c the meters are so annoying---why can't they install meters that work?

Also--way to mess up the tone of our part of town. Not everyone can afford to pay for parking over here.

Duh - short term gain, HUGE long term loss.

I don't mind paying "market rates" for parking ... Westwood, for example: the rates are TOO LOW-hence there is never open parking meters. The city should charge close to what private lots charge. Expensive? Sure. But it beats me (and everyone else) driving around for 15 minutes trying to find "cheap" parking courtsey of the city.

But selling off the meters to a private company is a really bad idea.

No Sale! Parking meters in private hands is a terrible idea. But more importantly, can the mayor hand over the meters without voter approval? This article mentions a 'thorough public hearing' - I'm sorry, a what?? I want to vote on this. We all should.

One 1,000 times NO. I'D LIKE TO SEE THE MONEY GO TO SCHOOLS.

Has privatization ever improved anything? Public functions should remain in the hands of the government.


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