Items placed on the Tucson City Council consent agenda are typically
routine matters lumped together and adopted simultaneously without
discussio
Therefore, it was somewhat unusual when on May 5, an issue
concerning ParkWise, the city’s financially troubled parking-management
program, was pulled off the consent agenda and postponed for two
weeks.
The delayed item involves a proposed agreement between ParkWise and
the Downtown Tucson Partnership, the group promoting downtown while
providing security and maintenance services.
Under the agreement, the partnership was slated to receive $458,540
to supply staffing for city parking facilities. Another $66,450 was to
be devoted to marketing and management-consulting services.
Chris Leighton leads ParkWise and observes of the consultant portion
of the agreement: “We now pay $65,000 for outside marketing, so we’ll
get more services for the same amount.”
If the agreement is approved, Downtown Tucson Partnership CEO Glenn
Lyons would be paid $125 per hour for about three hours a week of
consulting services. One topic he’ll work on, Lyons says, is how “to
sustain negative cash flow until it turns positive” in planned city
parking garages.
“We’d be hired to provide strategic marketing and advertising, which
would be an opportunity to operate ParkWise more like a business,”
Lyons continues.
When ParkWise was instituted in 1997, city officials intended for it
to be run like a business: ParkWise would use revenues from parking
meters downtown and around the UA, as well as money from neighborhood
parking-permit program fees, to operate in the black. But ParkWise soon
ran into stark financial and political realities.
One reality hit when the Pennington Street parking garage opened
several years ago.
“It’s around 75 percent occupied now,” Leighton says of the garage,
“and we’d like it to be 85 percent.”
The debt service on the facility has been a financial drag on the
ParkWise budget.
“We built the garage based on 30-year financing,” Leighton recalls,
with estimated annual construction payments of $800,000. But when the
city sold certificates of participation to pay for the structure along
with several other projects in 2004, they were set up as 20-year notes.
That raised the annual ParkWise debt service to more than $1
million.
“We knew there was no way we could make (those payments),” Leighton
explains, “but were told (by city finance staff members) not to worry
about it.”
On top of that, Leighton says, the city has provided 250 free
parking spaces within a few blocks of the Pennington facility to
satisfy other downtown demands. “That sort of undercuts the garage
business,” he observes.
Another money-loser for ParkWise was TICET, a free downtown shuttle;
the financial foundation for the service was shaky from the start.
Monetary assistance for TICET was promised by other governmental
agencies, although most of that money never materialized. Nonetheless,
the service was expanded, and its losses quickly grew.
“TICET started as a parking circulator,” Leighton remembers, “but it
turned into a transit service.”
By last year, TICET was losing close to $800,000 annually.
That loss, combined with the red ink from the parking garage, helped
drive ParkWise’s overall budget into deficit territory two years ago.
In response, the agency was moved out of the Transportation Department
in 2008 and placed under the direct responsibility of the City
Manager’s Office.
According to a financial analysis prepared last September, ParkWise
lost more than $1.2 million in the previous fiscal year. It borrowed
$1.1 million from the city’s general fund to offset that loss, an
amount which is being repaid with interest.
A lack of parking enforcement has also harmed ParkWise’s bottom
line. ParkWise officials recommended adding more staff to generate
additional revenue—a suggestion apparently not heeded in the city
budget proposed for the coming fiscal year.
To reduce the growing ParkWise deficit, the TICET service was
eliminated last November. Leighton also hopes to refinance the debt on
the Pennington Street garage next year, but admits that due to
financial conditions, that may not be possible.
Looking back over the last few troubled years, Leighton concludes:
“Our financial problems weren’t caused by decisions we made, but by
decisions others made for us.”
Leighton also points out that despite its budgetary difficulties,
ParkWise pumps more than $800,000 annually into city coffers. Because
of the way parking-meter collections are structured, some of that money
goes directly into the general fund and not to ParkWise.
Leighton says ParkWise has “done restructuring and belt-tightening.”
He hopes that as of July 1, the agency will be a separate city
department.
“I think that will help,” he says of this proposed change. “The
mayor and council will have a more direct view” of what’s going on.
Leighton adds that he wants ParkWise to be in the black in no more
than three years.
“I’m hoping to beat that,” he says. “But I don’t want to over
promise.”
City Manager Mike Letcher has told the council in writing that he
expects the ParkWise debt to be eliminated by the middle of 2010.
Meanwhile, the agreements between ParkWise and the Downtown Tucson
Partnership are now scheduled to be discussed in a study session on May
19.
This article appears in May 14-20, 2009.
One of the sources of debt that ParkWise incurs on an ongoing basis is the court costs that they have to pay to the City Court for all of the frivolous citations that the rapacious staff write while undoing most all downtown PR or excuse me “messaging”, on a daily basis.
Why in the world we need to pay an insider trading fee to Lyons to create an income stream is beyong comprehension. Any number of retired commercial property managers or SCORE members would do the same on a pro-bono basis. But then Lyons prefers to rid the downtown of all good will volunteers so as to create a confabulated need for his elementary advise. And we believe him!
Furthermore, the corporate cultures of the Tucson Downtown Partnership and ParkWise are a train wreck in the making.
Where are those “consensus building” Southern Arizona Leadership folk these days?
Two and a half years later, it appears SunshineSuperman was onto something with the “train wreck in the making” comment.