Privatization.org Policy Issue - Local Services

1. Trends

Parking enforcement is a growing area in the field of privatization. Currently a number of cities in the United States contract out their parking enforcement services. Examples (and length of contract) are: Anaheim (approximately 10 years); West Hollywood (3 years since release of Los Angeles County Sheriffs Department); Montgomery County, Maryland (7 years); and Baltimore County, Maryland (2 months).

A 1994 study found the use of private contractors for meter maintenance and collection increased by 6 percent between 1982 and 1992.

Return to Top

2. Cost Savings Potential

As is demonstrated in Table 1, parking enforcement cost per hour is significantly lower in the three cities that contract for the service, compared to Los Angeles, which delivers the service with in-house units.

Contracting out parking enforcement also often leads to substantial increases in revenue. One key to the apparent success of private parking enforcement providers appears to be the private sector’s willingness to invest in technology. Municipal agencies often are reluctant to invest in capital equipment that would allow them to improve their productivity and efficiency.

Table 1. Parking Enforcement: Cost and Service Comparison in Four Municipalities
Municipality	Scope of Services	Cost per Hour
City of Anaheim (contract)	Citation issuance only	$15.20
City of West Hollywood (contract)	Citation issuance, abandoned vehicle removal, response to complaint calls, peak-hour towing, booting	$19.23
Montgomery County, MD (contract)	Citation issuance, abandoned vehicle removal, response to complaint calls, peak-hour towing, booting	$22.52
City of Los Angeles (in-house)	Citation issuance, abandoned vehicle removal, response to complaint calls, peak-hour towing, booting, special events	$35.94

Return to Top

3. Best Practices/Case Studies

Case Study: West Hollywood, CA — Competitive Contracting

The enforcement area of West Hollywood achieved a reduction of 28 percent in operating costs when it contracted with the private firm of JL Services. West Hollywood’s prior contract with the Los Angeles Sheriff was for $1.1 million; its contract with JL Services is for $800,000 annually. Parking enforcement revenues increased by more than $2.5 million after privatization, totaling $6.8 million in fiscal 1996.

The private contractor brought several advantages to the city, including additions of up to 110 parking officers, increased revenues, and overall reduction of operating costs in lieu of hiring personnel and overhead. According to city officials, private parking enforcement has brought consistency and savings to parking enforcement services in their areas.

Return to Top

4. How-to-Tips

Applicable Techniques
- Competitive Contracting
- Public-Private Competition
Opportunities for privatization include citation issuance and processing, vehicle removal, towing, and the overall management of the parking control officers.

City officials should bear in mind the trade-offs between increasing parking ticket revenues and the negative effects that increased enforcement may have on street-front businesses. Overly aggressive parking enforcement is likely to induce more shoppers to abandon street stores for shopping malls. Moreover, each additional dollar that is collected by the city through tougher parking enforcement is a dollar that could have been spent in the private economy.

Overzealous ticket writing, however, need not be an inevitable result of privatization. In fact, if structured properly, privatizing parking enforcement could be a win-win situation for city government and street-front stores. Strategies can be developed to make parking enforcement more business-friendly under a private contractor, such as the following:
- Instructing parking enforcement officers to occasionally go into stores and announce they are about to ticket the cars in front of the store. This would give the store’s customers the opportunity to move their cars or add money to the meter, and would engender tremendous goodwill from shoppers.
- Instructing the parking enforcement operators to place warnings on windshields rather than writing tickets for parking meter violations for a certain number of hours each week.
- Affixing color-coded decals denoting maximum meter time limits to city meters in order to minimize motorists’ confusion and frustration over parking tickets.
The positive effect that these and other strategies would have on motorists’ perceptions of the city as being attuned to their shopping needs would more than make up for any slightly lower parking revenues.

Return to Top

5. Contact Information

Practitioners	Kay Beechum Parking Manager Department of Transportation 8300 Santa Monica Blvd. West Hollywood, CA 90069 (213) 848-6374
	JL Services West Hollywood Contractor 22 Enterprise Highway, Suite 310 Hampton, VA 23666 (804) 838-8400

Return to Top