The ghosts of a plan to sell off the city’s parking meter revenue for a short-term budget fix were stirring in the Board of Aldermen chamber Wednesday night.
At a meeting of the Finance Committee, two executives from Cleveland-based Gates Capital Partners spoke to aldermen about a proposed contract under which the company pays the city $50 million in return for the rights to parking meter revenue over the next 25 years. The so-called “parking meter monetization” plan met stiff resistance by aldermen who thought it was fiscally unwise, and even its original proponent, Mayor John DeStefano Jr., has backed off from it since he proposed it last spring.
“The more we looked at it, the more we didn’t feel it was the right solution,” said City Hall spokesman Adam Joseph. “We’re smarter now than we were a year ago.”
But despite a fall resolution by 18 aldermen to strike the proposal from budget discussions, monetization is not dead.
Managing directors of Gates Capital James Redd and Graham White sold the monetization plan to alderman as similar to a state bond. Contrary to some rumors, the city would retain “full operational control” of its parking meters, Redd said, and the city would be able to exit the agreement after 10 years for a fee.
The city could use the $50 million cash infusion as a budgetary stopgap against layoffs and service cuts, said Ward 24 Alderman Marcus Paca. While the deal, which is expected to cost the city up over $100 million over 25 years, is not an ideal arrangement, the city has few attractive options, he said.
“Who wants to lay off cops, who wants to layoff teachers, who wants to lay off custodians?” Paca asked.
Also to the deal’s merit, parking meter revenue largely comes from people who drive into New Haven from other towns, added Ward 30 Alderman Darnell Goldson. Out-of-towners would be paying the city’s bills, Goldson said.
But there is a reason the state and federal law discourages bond financing to cover operating expenses, said Ward 29 Alderman and Board President Carl Goldfield.
“We would be doing something we couldn’t do directly and skirting a well-reasoned law,” Goldfield said.
One of monetization’s most strident critics, Ward 10 Alderman Justin Elicker FES ’10 SOM ’10, likened the deal to a $500,000 mortgage on someone else’s house.
“Would you do that with someone else’s money?” Elicker asked Redd and White.
That question is a matter of policymaking for Elicker and his colleagues to decide, Redd responded.
The Finance Committee meeting, intended to examine the city’s revenue options, ended without consensus on monetization. Whether the plan will be seriously considered in the city’s budgeting remains still unclear.