Musings and sniffles

I have a cold and not really up for blogging today, however I feel like I have to comment on the parking world so here goes, sniffles and all.

PPP and Public Policy

I have been following the Pittsburgh and Chicago privatizations and am moving rapidly to the position that these procedures, while in some forms may be good, are in general bad for public policy. Someone who is close to the Pittsburgh project sent me the following comment:

I don't understand why they structure these concession agreements so they are a lose/lose proposition in the long run, instead of a win/win.  But then I'm only a lowly consultant out in the parking fields. Bad public policy -- that's about the only kind we have these days -- in any field.

Politicians want a big payday. They see a billion or so sitting there and want to get their hands on it. Naturally, the bidder wants the best deal they can get…and off we go.

My consultant friends is right – why not a 'win-win?' It just doesn't happen.

 Pessimistic about San Francisco

Why am I so pessimistic about parking programs in San Francisco? I love the city. It's beautiful and a great place to visit. I always look forward to the time I spend there. However, ever since I have been even peripherally involved in their parking plans, (more than 20 years) it seems they just can't get their act together.

When I think about parking policy I think about it from the ground up. First you have to be able to control the lots, collect all the money, provide good service to your customers. Then you need to ensure that enforcement is consistent and even, that fines are collected, and that groups of people aren't taking advantage of parking rules (can you say disabled cheaters).

San Francisco over the years has done a poor job of collecting even the tax due the city. If there is no clear understanding of how parking operates and how to ensure that you can collect the parking tax, how can you run city garages, how can you develop a policy to ensure parking is available (in, for instance, a Shoupista mode) if you bottom line activity doesn't cut it. They are moving to an extremely high level of technology and were having difficulty dealing with virtually no technology. Replacing a pencil and paper with a computer doesn't help if you don't know what should be on the paper.

Someone just texted me to drink lots of fluids and take vitamin C. I'm going home to do that. C U tomorrow

JVH

Comments

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For the most part it was "bad public policy" in the first place that put these city's in the position where they need to sell off parking operations and other assets. Are they leaving money on the table? The investors certainly hope so, but there is also the chance that they could be getting double what the deal is actually worth.

Who's to say what might happen if gas went up to $5 or $6 gallon next year, or what the results would be if other expenses escalated to the point where people cut back on their driving? There is tremendous risk in deals this large, and in exchange for assumming that risk it is reasonable that they would also want to reap the larger share of any potential reward.

That being said, these deals should not be entered into without serious consideration of the long term consequences for both sides. The problem is that some of these cities are "on the brink", and this is the only life line available to them. It may not be the ideal solution, but for some it may be the only "realistic" or "doable" solution. In those situations they are not negotiating from a position of strength, but rather from one of desperation. The drowning man doesn't negotiate for a lifesaver and it's too late for swimming lessons.

My general take on these deals is that the City's have known about the pending budget problems for years, but kept putting it off. They were effectively paying off a maxed out credit card with the minimum monthly payment, and all the while were maxing out their other cards as well. At some point it catches up to you, and the economic meltdown of the last couple years has exposed those bad policy decisions from years past.