For the Las Vegas RFP, the scope of services includes an analysis and identification of public-private partnership opportunities for the city's parking systems and assets to achieve one or more of the following objectives: retire/restructure debt, maximize revenues, reduce expenses, capitalize revenue streams, stabilize revenue and optimize operations.
On a related note, former Indianapolis mayor and Harvard professor Steven Goldsmith dissects Chicago's parking meter privatization in a Governing article last week that's well worth a read. Goldsmith points out what he sees as three mistakes‚??transition issues, a rate hike simultaneuous with privatization (a policy decision); the use of the proceeds (a policy decision);‚??but overall he concludes that Chicago's parking meter privatization has ultimately been successful, on balance.
I'd add two comments here:
- Though it seems understated in the piece, Goldsmith makes a crucial point in noting, with regard to the early transitional challenges of the privatization: "This hiccup endured for about four weeks of a 75-year deal, but the damage has been done." While you'd ideally have no transition issues whatsoever, major projects‚??both in government and in the private sector‚??tend to experience them. Given that, in the grand scheme of things most observers would likely agree that it's a mark of success to only have a few turbulent weeks early in a major, long-term project. Even more so when those issues get ironed out, and less than a year later the project is humming along well.
- I didn't see this in the Goldsmith piece, but it's important to reiterate the enormous scale of the privatization and related capital expenditures on behalf of the concessionaire. In less than a year‚??and a year ahead of schedule!‚??Chicago Parking Meters, LLC has nearly completed the overhaul of a whopping 36,000 meters (one of the largest systems in the US). And they're being replaced with a much smaller, more efficient system. By December 2009, CPM had already replaced 31,328 meters with 4,127 new pay-and-display meters. So the city now gets the same level of metered parking (actually more, since there aren't really true "spots" anymore with pay-and-display meters) with about one-seventh the meters. And those 4,000-odd new meters are typically needing replacement every seven to 10 years, so the concessionaire will have to replace this system many times over during the course of the concession term. By contrast, the city installed just 198 pay-and-display meters in a 5-year period prior to the lease. Night and day, and a powerful example of what you can achieve through this type of public-private partnership.
Last, the January 2010 issue of Parking Today features an article of mine on Chicago's parking meter privatization, available as a PDF here. For more, see my detailed overview of Chicago's transaction at Reason.org, as well as my recent interview with Chicago's CFO Gene Saffold.