‘Cities love meters – they are a “captive” income source. … unless you know someone or are a “public figure”, the city will tow your car if you have too many tickets. A tow in Portland will cost a person at least $250.00 to get their car back. Thus they are using extortion and fear to ensure you meter when you park and if you fail to do that if you do not pay a parking ticket they will tow your vehicle’ (http:/ /www. taphilo.com/ tom/ parkingmeters.shtml).
Since the Georgetown City Council has so far refused to provide information about the contract they signed with National Parking Systems (NPS)/Smart City Solutions to acquire, maintain, and manage parking meters on the grounds that its openness has caused the city to lose good projects before, I thought it useful to find out a bit more about parking meters in general and also to try to understand what there can be about the provision of parking meters that needs to be kept secret.
Let me say at the outset that I appreciate that there may be cases when someone comes up with a novel idea to substantially increase the value of some material or condition and that it would be unfair to put their idea out to open tender. But the case for such an exception needs to be properly made, and so far as I am aware, outside of simply stating their position that secrecy is necessary, no such case has been made by the mayor and/or her cohorts. Introducing parking interferes substantially with the lives of residents and their family and friends, the disabled, commerce, etc. for it to be implemented by stealth. In some places it has led to referendums and today modern meter administration uses technology not only to manage the system but to engage public opinion in real time.
To preempt the discussion that follows and given the dearth of information, the only things I could find that I would have wanted to keep secret about the proposed deal is its tentative and unfair nature, the dislocation it is likely to cause and the huge illusion, theoretic profit upon which it is based!
Here I make some rudimentary calculations and extrapolations from a case presentation of the provision of parking meters for the city of Portland, Oregon, USA. The figures are liberally rounded off and are in US dollars except where stated and the rate of exchange used is 210:1.
The state of Oregon has an average income of $48,100 and a two-hour meter in Portland costs $.75 per hour. That is, the average worker could purchase 64,133 parking hours or 8,016 days at 8 hours a day and this is not atypical of the USA. From what is being proposed in Guyana, with average income generously placed by me at $100,000 per month or $1,200,000 per annum and a suggested hourly parking rate of $500 per hour, the average worker could only buy 2,400 parking hours or 300 8 hour days of parking. What this means is that the relatively well paid average earner caught in the web of the city council, would have to either forgo using the car he worked and saved so hard to purchase for his family’s convenience or spend her/his entire annual income on parking!
More than that, while the average Oregon worker will expend about 3.6% of annual income on parking what the analysis below shows is that even at the mere cost of production of G$75 per metered hour, the average Guyanese worker could only purchase 16,000 metered hours but would have to spend some 12% of his annual income on parking! This is truly amazing and certainly raises the question of whether Guyanese can afford parking meters or should the city council be perusing other methods of raising resources?
The case
In a typical 8 a.m. to 6 p.m. day in Portland, a meter can generate $7.50 a day under ideal conditions. The estimate in this study is based on 9,200 meters making a total of $69,000 per day, $414,000 per 6 day week and $21,528,000 per year.
Purchase, installation and amortization
In 2014, a new modern parking meter, complete with computerized metering, blinking lights and ability to accept credit cards cost about $600; with $150 to install each meter, the total cost was about $750 per meter. Parking meters have a life span of about 20 years. The total cost of the 9,200 meters in Portland at 750 per meter is $6,900,000 and amortized over 20 years results in $345,000 per year.
Operational costs
It was estimated that operating the Portland system required about 60 persons with an average income of about $35,000 per annum. ‘The basic business rule is that whatever the salary of a person is you double it to get the true costs of having that person on board – health benefits, retirement benefits, office space and other overhead costs needed to support that person’ (Ibid). Thus, the overall annual personnel cost was given as approximately $3,960,000 or about $430 per meter per year.
Electricity to operate the 2,640 electrical meters in Portland was about $1,320 per day, $68,640 per year or about $19 per meter per year. We would have expected the electricity cost to be much higher in Guyana but we are told that the meters to be installed here will be solar powered, so if they are, there will be little electricity cost. Then there is the transportation cost. Specialized parking meter vehicles had to be purchased for Portland at about $4,000 each. It was estimated that a system the size of Portland would require 43 such vehicles which cost about $172,000. Associated fuel, insurance, maintenance, spare parts and other costs is not known but is amply accounted for below.
Profit and loss
The total cost to run the 9,200 meter programme in Portland, Oregon was placed at $4,545,000 per year or $494 per meter per year. Of course this bare-bone cost does not account for transportation fuel, maintenance, etc, ‘wastage’ from low occupancy, times when meter personnel are not on time to give out tickets, meters are not fed time, etc, the 11 public holidays in Portland and so on. It appears then that another $5m ($4.9m) has been set aside to account for these concerns putting the final cost for running the system at about $9.5m or $1033 per meter per year. This has been extrapolated from the fact that the Portland city budget document is said to have placed net income from meters at $12m a year. That is the operation cost and profits are respectively 44% and 56% of the potential income of $21,000,000.
The Guyana case
Let’s make this as simple as possible and be as liberal as possible not bothering with the different wage levels, etc. of Guyana and Portland but applying the latter figures to Guyana. Assuming a 1,000 ‘new modern meter system’ the acquisition and installation cost will be $750,000 (1,000 x $750) and the annual operational cost will be $1,033,000 ($1033 x 1,000). Total investment would be $1,783,000.
The potential income from 1,000 meters at $2.50 per hour for 10 hours a day 6 days a week is $7,800,000 a year. Of which 44% or $3,432,000 is operational cost and $4,368,000 (some 2.4 times the total investment) will be profit. If the 20% the city is to receive is from gross profits it will receive $873,600 (G$183,456,000) but the NPS will receive the remainder $3,494,400 (G$733,824,000).
Of course, even if these numbers are close to the truth, they are chimerical outcomes for as indicated above, even at much lower levels they are unaffordable. Business will move out of the city’s range, people will move and purchase at the very attractive malls and rural markets and use public transport, taxi mini-buses, for the few times they must come to town. Maybe in the few initial years some people might make a financial killing but Georgetown will gradually become a ghost town. If the PPP had made this proposal the conspiracy theorist would have had a field day!
