October 26th, 2012 By German Lopez | News | Posted In: News, Privatization, Budget

City Manager Suggests Privatizing Parking

Council member says approach seems shortsighted

milton dohoneyCity Manager Milton Dohoney Jr.

It’s nearly budget season in Cincinnati again. In a bit of a head start, City Manager Milton Dohoney has unveiled his plan to look into privatizing the city’s parking services.

In a memo to city employees, Dohoney claimed leasing could provide a few benefits to the city: “For example, a third party can invest in technology across the entire system more efficiently, can conduct enforcement and bill scofflaws, and can assume maintenance and facility upgrades to the system. ... Further, leasing the system could allow the City government to focus current staff on other services, and provide a pool of funding that could be paid immediately to support neighborhood investment among other priorities.”

Dohoney also wrote he had met with American Federation of State, County and Municipal Employees (AFSCME) workers that would be affected by the change.

He assured any new parking operator would have to interview AFSCME parking workers for jobs.

Councilman P.G. Sittenfeld responded to the proposal critically in a statement: “I’ll await more details, but it seems penny-wise and pound-foolish to forgo a steady revenue stream for a lump-sum payment. Cincinnati needs a structurally balanced budget, and can’t keep relying on one-time sources. Places like Chicago and Indianapolis have seen their parking rates more than double following privatization — that’s a bad deal for citizens, and something we don’t need while were experiencing an urban renaissance.”

Some have cited the experience in Chicago as a failure of privatization. When New York City moved to privatize its parking meters, Matt Taibbi of Rolling Stone criticized New York City Mayor Mike Bloomberg for his plan: “These deals involve a sitting executive selling off a valuable piece of city property at a steep discount to private financial interests (often, to friends or campaign contributors), in order to solve a current cash flow problem that, surprise, surprise, will still be there the year after you finish spending the proceeds of your sale.”

But New York City’s plan for privatized parking meters kept pricing in public hands. It’s possible Cincinnati could take a similar approach and keep meter rates at the same level.

City officials could not be reached to elaborate on the proposal. This story will be updated if more information becomes available.

The full budget proposal typically comes out in late November. Mayor Mark Mallory and City Council will have to approve the proposal.

10.30.2012 at 09:29 Reply

As a resident of the Chicago area, I would strongly encourage the city's leaders to carefully review any such proposal to make sure it is properly valued and provides long-term benefits. Chicago rushed this through a couple of years ago, parking rates have increased considerably while contractor performance has declined, and all of that up-front money is long gone.


10.30.2012 at 10:18 Reply

The program involves selling an income stream (the parking revenues) that the city has been receiving.  It is a capital transaction and it is exactly equal to borrowing.  The city is not generating new revenues by privatizing.  It is simply borrowing future revenues for present use.