The Parry Sound Parking Solution
19 Tuesday Aug 2014
Written by parry034 in Parry Sound, Suggestions
One word: Privatize!
If that’s a very practical solution what follows is a summary of the ‘problem’ and an explanation of why a privatization solution makes sense.
The last couple of years has seen concern and controversy surrounding Parry Sound’s parking policies. It’s as close as I have ever seen the community turning up at a Council meeting with torches and pitchforks.
It started a couple of years ago with Staff suggesting that the Town increase parking meter rates to account for inflation and to generate additional revenue to cover costs. This was picked up by Council and quickly opposed by the Downtown Business Association (DBA) who suggested it would hurt business and countered with a proposal that all parking in the downtown should be free, at all times. This ended with Council eventually raising parking rates and parking ticket prices, but not as much as originally proposed. I offered my take on the situation at that time in a post that is linked here.
Earlier this year Council was presented with a by-law to install parking meters on Bay Street down towards the Stockey Centre. This was met with considerable opposition by businesses on that portion of Bay Street. What was free they contended should remain free or it would hurt business and reflect poorly on Parry Sound as a tourist destination. The result was that Council beat a hasty retreat and claimed that metering on Bay Street was only being considered even though they had previously budgeted for meter installation. To make amends Council said that not only would there be no meters but they would review the possibility of removing all paid parking in Parry Sound later in the year.
There is much academic and practical experience that suggests paid parking is not only a source of revenue to cover costs related to creating and providing the parking; surface maintenance, plowing, etc., but that it actually increases business and human traffic in a downtown. It’s too easy to avoid shopping downtown if it’s likely that there won’t be any parking available. A better argument though might be to turn to free market economics to address the challenge of parking in Parry Sound, and that suggests privatization as a reasonable solution.
Privatization offers a couple of obvious benefits. The first is that it helps ensure prices match demand. If parking prices are too high people will stop parking and there will be less revenue and profit. The operator of the parking service should, in a ‘rational’ world, reduce prices to gain more parking business and optimize revenue and profit. Without the need to have prices discussed and reviewed at Council meetings a fine balance can be practically implemented aligning the interests of the local merchants (more shopping traffic) and the parking operator (maximal revenue through optimal pricing and maximal parking).
The second benefit is that it relieves Council of having to deal with difficult situations that may reflect poorly on their popularity. How many parents with teenage children have had to balance popularity with doing the right thing? At least parents don’t need to run for re-election, although in some cases that might not be a bad idea. But I digress.
The Town recently experienced the liberation of privatizing what was essentially a Town service, the Town Dock and Big Sound Marina. For the last couple of decades the Chamber of Commerce managed this facility; pretty much as a breakeven operation. With the Chamber’s decision to forgo management of the facility this year the Town contracted the operation to a private company that has to date done a good job as far as I can tell. But the effective privatization of the Town Dock and Big Sound Marina has come with some changes; seasonal dockage is being offered and there is a charge for day usage, two sources of income that were not available to the Chamber of Commerce.
When I asked Staff about the impact of these changes on local businesses they simply shrugged and suggested that it was up to the operator to make these decisions even though it may well negatively impact local business by reducing day boating traffic (similar to the argument against parking meters on Bay Street) and competing with local businesses (subsidized seasonal dockage).
That led to the Bingo moment. Let’s privatize the Town’s parking business! Privatization would permit the market to decide the right price for parking and avoid tough decisions for Council.
What about the mechanics you ask. Well here are some early thoughts:
- The right to receive revenue from public parking in Parry Sound would be offered on a Request for Proposal (RFP) basis for an initial five-year period. Thereafter the Town would open the RFP for a further five years.
- The winning bidder (WB) would need to guarantee the Town a certain fixed amount of annual income plus an upside for any new parking spaces installed.
- The WB would have the sole right to adjust prices as they felt was appropriate.
- The WB would also be able to change the hours of paid parking. Free after 5:30, weekends and all December? Well that might not really be optimal, so perhaps that would be tweaked to have free parking only on Sundays and after 9:00 PM.
- The WB would also be able to create additional paid parking sites in Town, but at their cost. I could well imagine there might be profit in charging for parking at the Stockey Centre, Waubuno Beach, and the Bobby Orr Community Centre. Bay Street seems pretty darn obvious as well. How about boat trailer parking fees at the Champaigne Street dock?
- The WB would be responsible for keeping these properties clear of snow and for any damage to the parking areas. I expect the Town would still be responsible for general maintenance of the properties, most notably the paving of the areas.
- I’m not so sure about ticketing. Perhaps the WB could have their own personnel monitor compliance and ticket as required, or contract with the Town for these services.
Pretty simple isn’t it. It’s all about letting the market decide when, where and how much parking should cost.
Is this a real business and would anyone be interested?
I suspect that there would be significant interest by private businesses. It might even appeal to the Downtown Business Association; they would be able to manage the parking rates directly so as to optimize their business. They could even choose to make parking free everywhere, at all times. And the Town would have no issue because they would continue to receive the same income they might have expected by operating the parking business themselves without the headaches regarding the parking rates.
The winning bidder for the parking RFP could certainly make money. Revenue could be increased by about 10% through elimination of the December free parking. Saturdays could add an additional 15%. Metering Bay Street and the Stockey Centre could increase revenue by another 10-20%.
It could be a virtual goldmine for the Town and a private operator. It might even have the benefit of getting people close to the downtown walking to events at the Town Dock, the Stockey Centre and the Bobby Orr Community Centre.
But most importantly it would relieve Parry Sound Town Council and Staff from the need to make necessary but unpopular decisions, or taking responsibility for these decisions. It’s as simple as the decision to in effect ‘privatize’ the Town Dock and Big Sound Marina. Don’t blame us; it’s a business decision that’s out of our hands.
So, am I serious? Or am I pulling your leg? The short answer is yes. The long answer will follow in a second post.
To be continued……
Worth Privatizing? (Parry Sound in Black & White)
No comments
August 22, 2014 at 11:18 am
I give you full credit for actually coming up with a proposed solution, as opposed to just complaining, but I can’t give the same credit to the solution itself. The magic wand of privatization does not work in every circumstance.
In this case, you seem to be pointing to two chief benefits: 1) it would liberate town council from having to make unpopular decisions; 2) it would allow the free market to develop the most efficient parking solutions.
As for 1), this council has repeatedly shown that they have no hesitancy to jump feet first into enormously unpopular or boneheaded decisions, so I’m not sure you’re addressing a felt need there. Either way, I don’t think this council needs any assistance – from private enterprise or otherwise – in the duck-and-cover department.
As for 2), it suffers from most of the same critique that can be given any free-market proposal that depends upon the magic invisible hand to create ideal and efficient conditions. I assume you’re familiar with those critiques (and, evidently, not accepted them) and so my rehearsing of them here would be either redundant or fruitless. But to make a few comments, the invisible hand of the market is assuming a number of elements which either cannot be assumed or have lately been proven false, for example: the rationality or consistent self-interest of the actors (i.e. that the business managers involved will always and consistently do only those things which are in the best interests of the business, the absence of foreign influencing factors (i.e. in our society a “free market” is rarely ever totally free, but almost always involves some degree of regulation or government intervention, which therefore cannot help but affect the outcome and nullify the controls of the free market experiment), that the self-interest of the business alone is a sufficient governing factor (i.e. the “brilliant mind” theory, that individual self-interests, even when summed together, are insufficient to guide a whole community to an ideal state – rather, community self-interest must also be a -sometimes deciding – factor along with individual interests) and so on.
Those points, which sound theoretical, have already manifested quite concretely in our community. The invisible hand of the market is why we no longer have a Wendys. Granted, we have plenty of other places to get a cheesburger, but the baconator is forever gone to us! The invisible hand is why we no longer have an office supply store. The staples juggernaut helped send trantors into oblivion, and then – in an act decided more by boardroom theory than local circumstances – the staples itself was pulled out, leaving us with no place to buy office supplies other than one aisle at the Walmart – over run with “hello kitty” notepads. The invisible hand is also why we no longer have a sex toy shop in town, having lost two of them — and not in response to market demand (unless, of course, the old Hoot really did become a chaste town after the the Kip burned down) but due to other foreign factors. I’m not necessarily saying, of course, that the government should have intervened in any of those cases (insert joke here about the sex shop and mayor mcgarvey’s stimulus package), just that the creative destruction which is the inevitable side effect of the invisible hand is a lot more palatable in the safe theory of an economics classroom than it is when you’re schlepping around in the cold searching in vain for office supplies.
As for the specifics in regard to parking, it’s a myth that the private sector is always more efficient that the public. Right now the price of parking is made up of C (the cost to maintain the parking system, i.e. collections officers, etc) + R (desired revenue. In your proposal, the town would receive R directly from the private parking company. C would likely stay the same, but to the formula the private company would necessarily add P, for profit. C+R will always be cheaper than C+R+P. The latter will inevitably be more expensive, and that extra money (the “goldmine” as you called it) will come from no other place but the already empty wallets and purses of Parry Sounders. Of course, the freemarket boosters will claim that the private enterprise – being better motivated – will be able to find cost efficiencies which will reduce C and thereby offset P, so that the total price is the same. Hogwash. They may very well be able to find some inefficiencies, but the amount they find would never be sufficient to satisfy their desire for profit. It is simply wishful thinking to suggest that you can invite more people to dinner – and still feed everyone a full meal – without increasing the amount of food you need, but in this case its parry sounders looking to park their car that pay for the increase.
August 23, 2014 at 7:34 am
Thanks for taking the time to offer your well considered thoughts. The market is often less than efficient but at least it’s motives are more obvious and it tends to respond more quickly with necessary changes. I would suggest that with the exception of the Baconator everything that has been lost is available online, usually with next day or 2-day delivery the standard at no extra cost (and no parking meter fees).
August 23, 2014 at 10:38 am
Thanks for your reply, I’ve enjoyed discussing your post. Later, if I have time, I’ll post my constructive proposal for why (and how) all parking should be free. Till then, I will give one quick riposte.
I do not agree that you can solve the local market detriments with online commerce. The internet cannot fix all the problems that an under-regulated free market has brought to our community.
Sure, online buying is great. I average 7-10 purchases online per month, everything from books and music to tools to exercise equipment: if it isn’t available locally, I’ll order online.
But online has at least two drawbacks which prevent it from being the community market cure-all you imply it might be – and not just for lack of baconators.
First, the free shipping you speak of is not quite that easy. I haven’t found a site yet that does not atleast had a minimum purchase threshold – $25-$99 is common. So if I need a $5.99 refill for my pen, I will likely be looking at an additional $5 or so of shipping – that’s almost double the cost! Before, I could simply pop into trantors and get my $5.99 refill for $5.99.
Bonus drawback: there’s the time issue. Free shipping is always the 1-2 week canada post option. Even if I spring for expedited (now paying $12 shipping for my $5.99 refil), the best I will get is overnight. That might be fine if you can know enough in advance when you need something to get your order in on time, but life is often not like that. Back at Trantors I could get my refil the same hour I found out I needed it.
Second, not everything – many things in fact – cannot be bought online. And not just cheesburgers. Notable for here, parking spots can also not be bought online. But that’s just the tip of the iceberg. How about the scaled back Ontario Northland service? That’s an example of how the underregulated free market will negatively affect a small community like hours, and there’s nothing I can buy on the internet that will get me a replacement bus or train in this town. And that’s getting to the rub: we have a long history in canada of realising that the free market has one goal, and it’s not always harmonious with the needs of a sparse population in a big country. It’s simply not profitable to adequately serve many of a small town’s needs. That’s why we have a long heritage of regulating required service for any number of identified community needs, e.g. postal service, phone service, radio service. Turning our back on that established wisdom – even for small things like parking – is inviting a foolish fall.
August 23, 2014 at 5:34 pm
Having lived south of the border in the suburbs of several larger cities, with access to remarkable shopping resources a few minutes away, I am yet to feel disadvantaged living in Parry Sound. My opinion might be quite different living in the one of the surrounding municipalities, mostly because of the drive to get anything and the absence of reliable, reasonably priced internet service.
I end up getting to Barrie or Bracebridge perhaps once a month and pick up those consumable items that aren’t available in town, or are unreasonable to order online for reasons you have mentioned. So if I don’t have a pen refill in stock I pick up another and try to remember to drop by Staples in either of those two towns.
The issue of transportation services is a challenge faced by most non-urban centres in North America. The good news is that we have a lower population density that permits individuals to own rather large properties at reasonable (by European standards) prices. The downside is that there is too little density to support the type of travel infrastructure that the Europeans, or the North American urban dweller, enjoy. It’s like internet service locally, you can have a lakeside property with reasonable taxes but be reliant upon expensive cellular or satellite services, or live in Parry Sound, arguably pay more for property, have trains running by day and night, and pay proportionately higher taxes. It’s a tradeoff. I am not in support of having the government, that’s us of course, paying to subsidize transportation services for people who choose to live in the ‘country’, or to subsidize their internet services because no company can make money with three subscribers on a kilometre of wire/cable.
We are fortunate in that we have choices, and yes I’d like to have boat access to Georgian Bay, or a lake, from my backyard, but I need reliable telecommunication access to make a living. And I’m quite happy living in Parry Sound, except perhaps for the noise and the threat of the trains, and as necessary I’m happy to make the extra effort to walk, cycle, paddle and/or drive to enjoy the public wilderness.
Regarding shopping – I typically order from Amazon. I have their Prime service and it’s here in two days or less. It limits my choices to those products that have Prime service, but it’s usually not an issue finding an acceptable product. Or I just wait to head south and pick up those items when I’m in a larger centre.
I’m interested in understanding why free parking makes sense for anyone besides people living in a surrounding municipality and working in Parry Sound. Parking in Parry Sound is basically free now if you are willing to walk an extra five minutes.
August 27, 2014 at 9:14 am
Free Parking
To start, I think there’s a necessary distinction to be made between what, for lack of a better phrase, I’ll call “proper revenue” and “improper revenue.” We’ve gotten used to thinking of any revenue – any cash that comes in – as being as good or as acceptable as the next, but I do not think that is so. There is such a thing as improper revenue. We probably most bump into the idea when – to use an unrelated example – we talk about speeding ticket fines and all those little blink-and-you-miss-it towns on a main rural highway that will arbitrarily lower the speed limit by 40 clicks and then have their local cop hide out by the town line, and thereby make up to 80% of their municipal budget funding (Virden, MB, I’m looking at you!) We’re always a bit torn when we hear about that, and not just because it’s a sneaky thing to do: on the one hand, yes, sure, speeders should be penalised, so we don’t object to the fines, but something in us chaffs at the notion of a town intentionally depending on those fines for revenue; it just seems wrong and improper to count on benefiting from someone else’s wrong doing. We’re supposed to be striving to decrease crime, not profit from it, right? There’s something then that is simply morally improper about deliberately budgeting for speeding fines revenue. It’s not a proper revenue source.
Improper revenue is more problematic, however, then merely being morally offensive. It is also subtly undermines democratic government. No, really. Consider this: in an ideal model, a transparent government tables a budget that lists all of the expenses necessary to run the town, and the revenue necessary to fund that. Such funding is primarily derived from taxation. The taxpayers see the numbers in the budget, of course, but the real sense of how much running the town is costing them is not felt until they have to pay their taxes. If they feel over burdened by their taxes, then they object and use various means of protest – and ultimately the ballot box – to force the government to lower those taxes. The government, of course, can only do that by lowering their expenses and making sure that they are managing revenue efficiently. In this way, the democratic process can naturally ensure accountability and efficiency. Politicians would be unable to squander money (by, for example, selling town land at far below market price…) or implement unnecessary or unwanted programs because when it came time to pay for those excesses, they would have to look to tax revenue and the tax payers would object. That’s the ideal model. But one of the things that undermines that ideal is improper revenue: back door funding above and beyond tax revenue. This allows an alternate stream of revenue which the politicians are able to rely upon to fund their excessive spending and/or mismanagement without having to burden the taxpayers and thereby trigger the natural electoral accountability that would come from hosing the people paying the bill. It further undermines the transparency of government, since the citizen is given a false impression of how much it really costs to run the town, which then leads to false expectations and community conflict, i.e. citizens demanding this or that without realising that the community can’t really afford it. These are just some of the issues and concerns that come from improper revenue.
With that established, look back to parking. What was the point of originally charging for parking? Was it to create a revenue stream? Classically, across North America, no, that was not the case. Parking fees were generally not instituted to be a revenue stream, but to be a parking management tool. See, aside from the initial cost of creating the parking lot (which is either included in the road construction, or otherwise quickly recouped) there is hardly any ongoing cost to parking. It’s not like other fee-for-service ventures where the service actually costs the town something to offer it which they wouldn’t otherwise have to pay. Parking, from a cost perspective, is already free. The fees were instituted then not to cover actual costs, but to help manage the sharing of a limited resource. Simply put, most urban centres have more people wanting to park than there are parking spaces, and so sharing those spaces could get sticky, and so parking fees were one way to help make everybody share and play nice. A person is less likely to hog a parking spot all day when they are paying by the minute for it. And this, of course, dovetails with the most commonly heard complaint about downtown parking in Parry Sound: employees of downtown stores arriving early and taking a prime parking spot and sitting in it all day while they work their shift. Parking fees are a management tool to make that financially disadvantageous for them.
As a management tool, parking fees have worked well. My argument, however, is that as times and circumstances have changed, the use of parking fees as a management tool has come to present more problems than it solves, and is therefore an idea whose time is passed.
The problems with using fees as a management tool are as follows:
1) They have morphed into a form a improper revenue. The town has raised fees (always “to keep up with neighboring municipalities,” of course) and come to depend on them as a source of revenue. The problems with this are clear, hopefully, from my discussion above on improper revenue.
2) In the new economic situation, they have become a form of negative government intervention. We often debate whether or not a government should intervene positively, i.e. offering a stimulus package to save the sex shop, but I think we can assume that governments should never intervene negatively, i.e. to create a distinct disadvantage for one business versus its competitor. Years ago when most vendors were small to medium sized businesses located in the downtown core, parking fees were a neutral force that affected all businesses equally. Today the economic situation is much different, thanks largely to Walmart. The other small vendors have a hard enough time competing with Walmart thanks to its size and buying power. We can debate whether or not government should intervene positively to assist those other small businesses, but surely we can agree that the government should not be doing anything that disadvantages them, right?! But by keeping parking fees, we are doing just that. Parking fees effectively become a surcharge on the item I intend to buy and thereby make the small downtown vendors even less competitive with Walmart and its ability to offer free parking. Sure, yes, there are other advantages besides free parking which also influence a person’s decision to go shop at walmart instead of downtown (variety of stock in one location, for example), but anyone who thinks that “well, if I go there, I’ll also have to pay for parking…” isn’t part of that decision is simply fooling themselves.
3) It has become irritating and repressive. This point is a two-fer. We all know the middle class has shrunk, their buying power is a fraction of what it used to be, etc. Those stats are easily google-able. Parking fees have, however, gone up. The town is nickel and dimming its citizens to death at a time when many of them can least afford it. This is probably not you – you can probably manage the 75 cents easily. But don’t let that prevent you from sympathising with those for whom it is a financial hardship. It’s one thing 50 years ago to take a nickel from a well-paid working man who has many nickels, but today they are taking a quarter or a loonie from an underemployed person who doesn’t have enough of them to start with. In this way, parking fees are repressive. For those who are lucky enough not to feel that repression, they are often annoying. We are becoming an increasingly cashless society, the majority of transactions today are by card or some form of tap. People simply do not carry coins any more. Most urban areas that still charge for parking have therefore upgraded their parking equipment to take these cashless forms of payment. Unless Parry Sound is prepared to do the same, then the parking fees are becoming increasingly impractical and unreasonable in their application.
These three reasons are, I think, sufficient grounds to consider eliminating parking fees. But, you say, parking fees are still performing a valuable function as a management tool, right? Yes, of course they are. And you might be able to argue that the value of that function surpasses the detriment of the attendant problems, i.e. “yes, we’re screwing everyone, but it’s worth it to effectively manage the spots”. That argument might work, if it wasn’t for the fact that parking fees are not the only way to effectively accomplish parking spot management. Many other towns have long used a different tool to manage parking spots, one that does not involve the levying of fees: time limited parking enforced through the simple tool of tire chalking. Areas around town are zoned – with highly desirable areas limited to short durations, and vice versa. Parking on James street, for example, might be limited to 1 hour. A parking attendant – whom we already employ to collect the fees – uses nothing more expensive than a piece of chalk and walks down the street making a little mark on the tire at the hour position, i.e. if it is 1:00PM, she make a mark at the 1:00 position on the tire. At 2:00PM she takes another walk, and any car still parked with a 1:00 mark is given a ticket. It’s that simple. It’s time tested, it’s proven, and it works.
That is how and why Parry Sound should make all parking free. They could implement the time-limited-chalking method to continue to manage parking spots while the elimination of fees would fix the three main problems currently caused by parking fees.
August 27, 2014 at 7:54 pm
Well written and argued, I would find disagree with your argument that the middle class has shrunk, or on average we are less wealthy than we were 20, 30, 40, 50 or 60 years ago.
I am consistently surprised by the wealth of Canadian society, even at the low end. As a youth in a rural community there was not that much wealth. We were somewhat better off because my parents operated a restaurant in Ottawa, it was modestly successful. But my father worked no less than 80 hours a week (10-14 hours, 7 days a week), 52 weeks a year. He earned his keep. My mother worked an additional 20 to 30 hours per week. The neighbours across the street didn’t have running water, and certainly no car. They were required to walk 4 miles each way to get groceries in the small town if the neighbours couldn’t drive them. And this was not an unusually poor area, but there certainly wasn’t much of a social safety net. You lived on what you earned, plain and simple. The farmers in the area had enough and not much more. And this was just outside Ottawa, a pretty stable if not affluent part of the country even in the 60’s.
Compare that to today with people regularly flying south for vacations, 2 or 3 cars, lots of fancy electronics, cable TV and internet. The busiest stores in this town are the beer and liquor stores. Even the unfortunate have some social support that permits them simple luxuries that couldn’t be imagined a few decades ago.
No, I think 50 cents for parking is not unreasonable, not when I see people stop by Timmies for a cuppa, or Macs for smokes, or people let their vehicles idle when they go into a store to pick something up, and a cell phone is not a luxury, it is now a right. For mom, dad and the kids. Buying power at this point is as great as it has ever been. Gas was about 40 cents a gallon when I started driving and now at $5.50 a gallon I see more people with more cars driving more miles than ever.
There may be reasons why charging for parking does and doesn’t make sense, but cost to the shopper is not one of them. Too expensive? Park at the BOCC and walk. Unless of course we privatize and it makes sense to charge for even that 😉