Trustees vote against outsourced parking

IU will not outsource its parking operations, the Board of Trustees decided Thursday.

In a four-to-one vote, the Board’s Finance and Audit and Strategic Planning Committee approved a recommendation to maintain internal control of parking assets.

IU Vice President and Chief Financial Officer MaryFrances McCourt presented the recommendation on behalf of President Michael McRobbie and will work on an internal parking operations business plan that the Board will revisit in February.

McCourt’s operating committees spent a year analyzing the potential value of a privatized parking
operation.

While an external market model assumes higher values for both IU Bloomington and IUPUI campuses, the increased value is not enough to give up the control and flexibility, McCourt said.

The committee calculated an assumed 7.5 percent discount rate if IU were to monetize parking.

According to a financial analysis by outside consultants, the University could expect to receive $275 million.

After paying off existing debt associated with parking facilities, monetizing parking could leave the University with about $210 million to invest in endowments, according to the analysis.

“When you’re coming to these very small changes in assumptions, it’s very difficult to say ‘let’s go pursue monetization,’” McCourt said. “The data is only one piece of that. The subjective piece is also very important.”

Efforts to more effectively operate parking will depend on disciplined implementation, McCourt said.

“Our plan is to take these best practices and implement them system-wide,” McCourt said.

As parking fees continue to increase, McCourt’s business plan will aim to create a market-based, campus-specific parking fee structure.

The University could use the business plan as a design for a more self-funded institution, Trustee Derica Rice said. 

“We know right now that our infrastructure does not have the capital to sustain it for the next few years,” Rice said. “This is a fundamental topic for the Board across the enterprise of the University, not just parking.”

Trustee Pat Shoulders voted “no” to Trustee Randall Tobias’ motion. The motion was to approve McCourt’s recommendation, allow for the creation of a strategic business plan, continue conversation and revisit the issue in February.

“It’s like when we went into Iraq for weapons of mass destruction. No, really, we went there to find terrorism,” Shoulders said.

“We’ve identified this asset as one purpose, and now we’ve transferred it to another. I want to continue this discussion.”

Given the diversity of Board members, a diversity of positions was expected, McCourt said.

“We have to look at all of our operations for efficiencies,” McCourt said. “This is just one of them. It will be a recurring theme.”

Follow reporter Hannah Alani on Twitter @hannahalani.