by German Lopez
Posted In: News
at 10:52 AM | Permalink
Previously unreleased memo spurs renewed calls to reject parking lease
The city administration today disputed the findings of a June 20 memo that suggested the city is getting a bad deal from its parking lease agreement with the Greater Cincinnati Port Authority, but it has not said why the memo wasn't passed along to City Council members and Port Authority during the three-plus weeks since the administration received the memo. In its own memo released today, the city claims that the June 20 memo, which was first reported by WCPO yesterday, is outdated and makes a few technical errors.The June 20 memo from Walker Parking Cosultants, a parking consultant hired by the city, found it will be 257 percent more expensive for the new private parking operator to run the city’s
on-street parking services in comparison to what the city currently spends. It also
concludes the city isn’t getting as much revenue as other cities got
under their own parking leases.
“The on-street operating expenses shown in the model are
projected to grow at a faster rate than operating revenues,” the June 20 memo
claims. “The city should expect a private operator to run the parking
system more cost effectively than the current operation, not less
effectively. Therefore, revenues should be expected to increase at a
rate faster than expenses, not slower.”
The memo’s numbers come through estimates provided by
ParkCincy, the operating team set to take over the city’s parking meters, lots and garages
following a decades-long lease agreement between the city and the Port
In particular, the memo highlights what it claims are
extraordinary payments requested by Xerox under the deal: The private
parking operator is asking for a $627,063 fee in 2013, putting about
14.6 percent of projected net operating income to management fees.
That’s far higher than the typical 2.1 percent to 2.3 percent found in
similar parking deals in other cities, according to the memo.
The city disputed the findings in its own memo this morning.
“The information that Walker used was from an early point
in time; the deal was subsequently negotiated from that point to improve
the deal,” wrote City Manager Milton Dohoney in his own memo. “For
example, the profit margin used was based on different parking deals in
other cities that are not the same as ours. As we know, the Cincinnati
model is unique in many ways.”One such trait: Cincinnati’s parking deal includes modernizing the city’s parking meters to accept credit cards and mobile payment.
The city cited a letter from the Port Authority sent to
City Solicitor John Curp during an email exchange on July 12, the same day the Port Authority was given the June 20 memo. The letter contradicted what Port Authority CEO Laura Brunner claims are inaccuracies.
“In its memo, Walker Consulting bases its comparisons on
price, yet doesn’t qualify the information with what level of service
capabilities are included in the price,” the Port Authority’s letter
reads. “The Port Authority is basing its purchasing decisions on price,
but also level of enhancement to the on-street system that mirrors the
City’s desire to modernize these vital assets and position them to
enhance economic development opportunities downtown and in City
Besides this “‘apples to oranges’ comparison,” the Port
Authority’s letter disputes many of the technical details behind
the June 20 memo, particularly questioning some of the measurements
used and comparisons that don’t account for differences between Cincinnati’s parking lease and other cities’ agreements. It also emphasizes that contracts with Xerox and other companies
are not finalized yet.
Much of the focus is now on why the June 20 memo
was kept from City Council, the Port Authority and the public for nearly a month, given the
memo’s controversial findings about a controversial deal.
“The city administration misled the public for months on
the need for the deal, saying it was needed to avoid laying off cops and
firefighters and then they don’t do it. Now it’s keeping vital
information from the public and council. It’s a violation of the public
trust of the highest order,” Democratic mayoral candidate John Cranley said in a statement. “I am urging the
Port to reject this deal that is bad for the City.”
Cranley and other city officials, including several City
Council candidates and council members P.G. Sittenfeld, Christopher
Smitherman and Charlie Winburn, signed a letter to the Port Authority
asking the city-funded agency to reject its agreement with Xerox.
The city manager’s office couldn’t be immediately reached for comment. This story will be updated if further comments
The parking lease was finally signed by the city and Port
Authority in June after months of political and court battles. The
deal was signed even though a majority of City Council now opposes the
lease after the city managed to balance its budget without the parking
deal and without laying off cops and firefighters.City Council approved the parking lease on March 6, more than three months before the June 20 memo was given to the city administration.
In return for the lease, Cincinnati is getting a $92
million lump sum and at least $3 million in annual payments, according
to city estimates. The city plans to use that money to pay down future
budget gaps and fund development projects, including the I-71/MLK
Interchange.Update: Clarified Port Authority didn’t receive the memo until July 12.