Thomas MacMIllan Photo
As the budget office prepares a deal that would sell off 25 years of future parking meter revenue, Downtown Alderwoman Bitsie Clark asked had a question: What if nobody’s parking in 2035?
Clark said she wasn’t expecting an answer right away.
That worked out for city budget chief Larry Rusconi (pictured), who later confessed that he had no idea how to respond to the query.
Clark’s question was one of several addressed to Rusconi as he briefed the Board of Aldermen’s Finance Committee Monday night on the proposed 2010 – 2011 city budget.
Central to that budget — and to several in the following years — is a plan to “monetize” parking meters. Under the plan, a private company called Gates Capital Partners would give the city $50 million over the next several years in return for several times that amount in parking meter revenue over the next 25 years. Background here. (The final amount is still being negotiated. One earlier estimate: The city would pay Gates around $120 million over 25 years.)
Clark was one of several at the meeting who voiced concerns about unforeseen consequences of the plan down the road.
New Haven needs to do something to prepare for the lean years that are coming, Rusconi told the committee. The parking meter monetization plan is key, he said.
“This may be the greatest idea in the world,” Clark said. “But not if we’re left holding the bag.”
If you had said to people in 1985 that 25 years later, newspapers would be dying out, they would never have believed you, Clark said. If you had told those same peoplethat the Soviet Union would no longer exist, they’d have said, “You’ve gotta be nuts!” Clark said. Her point: We don’t know what could happen by the year 2035. Will people still be using cars? “What if we end up holding the bag?”
Clark said she didn’t want an answer yet. She said she wanted to keep talking about unforeseen consequences as aldermen continue to consider the budget ahead of the final vote in May.
East Rock Alderman Justin Elicker wanted more details about the proposal.
Rusconi explained that the details are still being negotiated. But a plan exists to steadily increase parking meter revenue, to ensure that the city continues to take in money even as it pays it out to Gates Capital Partners, he said. Part of that plan is a 25-cent increase of the city’s per-hour parking fee every four years. The city will hire a part-time meter enforcer to ensure that cars are ticketed after 4 or 5 p.m.
The city will also gradually replace meters with pay-kiosks. That will prevent freeloaders from benefiting from extra time on the meter. Rusconi said ticket kiosks are expected to double parking revenue.
Westville Alderman Greg Dildine, speaking from the audience, asked, “Is it more than just a hope that annual revenue covers the annual repayment?”
Rusconi said the plan is that revenue will exceed repayment for all 25 years. In response to another question from Dildine, Rusconi said repayment to Gates can come from other parts of the budget, not simply from meter revenue.
After the meeting Rusconi said the parking meter monetization plan is like taking out a fixed-rate loan at about 7 percent interest. The actual interest rate is still being negotiated, he said. With negotiations ongoing, Rusconi would not confirm the total repayment figure of $120 million.
Rusconi said an option to pay off the loan early, in ten years, is also part of negotiations. But coming up with the money in just a decade is “unlikely to happen,” he added.
The parking pay stations (kiosks that serve a bunch of spaces on a block) will be phased in over the next several years, starting with 10 percent of meters being replaced next year. All the meters will be replaced at the end of four years, increasing the money the city takes in for parking
With all the plans to increase parking meter revenue, why not just put that money towards future budget shortfalls?
Because the increases just aren’t enough on their own, Rusconi said. “It’s not going to bring in $50 million over the next couple of years to address this crisis.”
Why not just borrow the money from Yale or some rich New Haven lover? It'd be simpler, and a lot less murky.
And how did the City arrive at the $50 million valuation for 25 years worth of meter revenue? That's a very round number, and you have to wonder if there was any math or science involved.