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Councilman Doug Linkhart would like to solve the city’s $120 million budget shortfall with quarters.

But instead of fixing the deficit one quarter at a time — about $9 million in revenue from parking meters per year — the councilman would like to sell the city’s parking meter revenue stream to a private firm for one lump sum — as much as $430 million — and then use some of the money to close the budget gap.

“It’s got some potential,” Linkhart told the Denver Daily News on Friday. “It sounds like a good idea … by no means is it perfect, and by no means is it exactly what I would do … but the concept is certainly worth looking into.”

The plan would be based on one finalized in Chicago in February. But if there’s anything to learn from Chicago, it’s that Linkhart and supporters will have their share of anger and confusion over the proposal.

Having sold their meter revenue stream for $1.2 billion to Chicago Parking Meters, LLC — an interest of Morgan Stanley — Chicago immediately started to get hit from all sides by outraged citizens over the 75-year contract. For one thing, CPM raised the hourly rates on meters in Chicago; rates are expected to double by 2013, according to reports out of the Windy City. 

Citizens complained that there was a limited public process, with the proposal fast-tracked through City Council; taxpayers believe they’re getting short-changed on the deal, arguing that the contract should have been for $2 billion; and broken meters and confusion over outdated labels has led to an exorbitant amount of parking tickets.

Some Chicago residents are boycotting meters by parking on side streets or not driving at all — there’s even been incidents of vandalism.

A watchdog group in Chicago has filed a lawsuit challenging the lease agreement. The suit challenges the use of public funds for the “enforcement of parking meter rules and violations,” according to the Courthouse News Service. 

Linkhart would do things differently

But Linkhart says he would do things differently in Denver. For one thing, the contract would be for a much smaller sum of money, considering Denver’s 5,200 meters is about 40 percent that of Chicago’s.

The city would also maintain control over rates and over the meters themselves. In Chicago, there was a switch to parking kiosks in some areas, such as the ones in Cherry Creek North and in Larimer Square. But Denverites are not thrilled with parking kiosks — in Cherry Creek there has been outrage over the kiosks, some businesses reported that frustration over the system led to a decrease in business.

Linkhart points out that Denver is also currently in the process of switching its meters to accept credit cards, which is very popular among citizens.
The councilman also promises that no jobs would be lost over the proposal — he said city employees currently collecting quarters from meters would be reassigned. 

There would also be no changes to the parking ticketing system — the contract would be solely for the meter revenue stream.

“I don’t have all the answers, but I think it’s just a matter of, here’s a good concept that would save us from cutting employees and cutting services like we’re going to have to do,” said Linkhart. “There’s no way we can cut $120 million without cutting employees or services.”

Based on the Chicago deal, Linkhart believes the city can receive as much as $430 million for the revenue stream. But he acknowledges that provisions such as maintaining control over rates and hardware would likely devalue the lease — perhaps to around $300 million.

“I’m pretty optimistic that we would get bids,” said Linkhart, pointing out that Chicago received 10 bidders and other cities are currently examining the idea. “This is something that is real.”

The councilman says if the city does go through with the proposal, it should not invest all of the money into the budget shortfall. He said some of the money should be invested into banks to collect interest. 

As for not collecting the full $9 million per year from meter revenue, Linkhart looks at it like paying interest on revenue or general obligation bonds. He adds that the meter revenue stream is a tiny part of the city’s general fund revenue — about 1 percent.

Mayor’s office looking into it

Mayor John Hickenlooper’s office is currently considering the proposal, but has expressed concern over a private firm being able to raise rates. Hickenlooper made parking meter rates a cornerstone of his first campaign, promising to lower downtown rates — and he did.

Denver Public Works has also expressed concern.

“This might be penny-wise but pound-foolish,” said Ann Williams, spokeswoman for Denver Public Works. “While it might sound like a good deal to manage our short-term budgeting problems, it might be a substantial loss over the long-term, which is not something that we want to incur.”

Linkhart said the proposal is simply an idea at this point, he wants to put together a City Council study group to do more research.

“This is not something that you can do hastily,” he said.

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