Tuesday, September 16, 2003

Bid out contracts

New Kroger garage: Expected deficit

One piece of unfinished business that got parked during Cincinnati City Council's contentious 7-2 vote for a new Kroger parking garage was its expected yearly operating deficit of $485,000. The city's current plan for making up that annual shortfall is to raise parking rates at other city garages or cut city services.

Council Republicans Pat DeWine and Chris Monzel argued this is a "perfect time" to put city garage operations out for competitive bid, but their proposal, in a council election year, was crushed. DeWine rebuked his Democratic colleagues for postponing the budget Day of Reckoning until after elections. "We ought to tell people how we're going to pay for that yearly deficit now," he says.

DeWine is right. The cost of downtown parking has been a sore point for years. Kroger and its workers will pay $510,000 a year at the new garage at Vine and Central Parkway and it will generate another $225,000, but yearly operating costs, including debt service, will total $1.2 million. If managed competition can eliminate the shortfall, council should put city garage operations out for bid. Otherwise, raised rates at city-owned garages and lots could push parking fees higher throughout downtown. Under managed competition, city crews also can bid, but city unions usually oppose it for fear of losing guaranteed jobs.

Cincinnati owns eight garages and four lots downtown. City workers manage about 70 percent of city-owned parking spaces. The city did put the 7th and Broadway garage out for bid, and that contract was awarded to a private company that offers the service for 42.5 percent less than it would have cost the city.

DeWine says after control of the old stadium parking was shifted from the city to Hamilton County, Central Parking generated $1.4 million extra a year in revenue for the county. Monzel argues the city needs to operate its parking garages more efficiently. Both council Republicans say competitive bidding could wipe out the expected deficit at the new garage without raising rates at other city garages or scrambling to find other funding sources.

Council shouldn't just hope the new garage will generate more revenues. Put city garages out for bid, and let's find out if it will erase the deficit.

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