Meter maker slams plan

SmartMeters company joins cities questioning Portland lease-back plan

By Nick Budnick

The Portland Tribune, Jun 12, 2008, Updated Oct 30, 2009 (20 Reader comments)

L.E. BASKOW / TRIBUNE PHOTO

Meter technician Ben Capps services the solar cells that power the parking meters along Northwest Naito Parkway. The city’s Office of Transportation has proposed to sell the meters to a Canadian company and then lease them back for a five-year period.

Portland already has caused a round of head-scratching in other cities over its plan to sell the bulk of its parking SmartMeters, and then lease them back. But the proposal now has sparked a significant new entry to the ranks of those questioning the city’s arguments: the manufacturer of the machines in question.

Under a first-of-its kind agreement, the Portland Office of Transportation is preparing to sell the bulk of its green electronic pay stations, manufactured by a company called Parkeon, to a Canadian firm for about $9.5 million.

The city then would lease the 1,150 machines back for $2.2 million a year for five years, while continuing to receive the revenue from the machines.

Under the deal, the city also would pay more than $500,000 a year to a second Canadian firm for what amounts to an extended warranty for service and parts.

The proposal is expected to be voted on by the City Council next month, after City Auditor Gary Blackmer has a chance to study whether the arguments for the move make sense.

Two of those arguments have to do with the French firm Parkeon, the largest manufacturer of electronic pay stations in the world.

Ellis McCoy, head of Portland’s parking program and the main proponent of the plan, says the deal would protect the city in case Parkeon stops supporting the machines with parts and technology upgrades.

But David Palmer, Parkeon’s North American marketing manager, depicted the argument as ludicrous.

“Why would we do that?” he said. “Are you aware of Parkeon’s reputation? … We’re still servicing our (earlier-model) machines that we put in the ground 15 years ago. If Portland (had) service contracts with Parkeon, then we’d honor them for as long as we have a contract.”

McCoy also argues that there have been unexpected maintenance and technical support problems with the Parkeon machines. With the five-year warranty running out, the proposed extended service deal, with a Toronto firm called Precise Parklink, would help keep the aging machines from breaking his unit’s budget with unexpected price hikes for parts.

“There have been issues,” McCoy said. “There are a lot of people I could (direct) you to that have horror stories with Parkeon.”

But Palmer defended his machines’ reliability, saying that if they are having problems, then perhaps the city should look elsewhere than Parkeon to lay blame.

“They’re responsible for maintenance,” he said of Portland. “If they have not been taking care of the machines, they will become problematic.”

Under the terms of Portland’s deal, at the end of five years the city could buy the machines back at a fraction of their cost, or have their owner, a Toronto-based firm called Fovere Capital Management, remove them. Or it could renew the lease as well as its service agreement with Precise Parklink.

Of these options, buying the machines back in five years seems unlikely. McCoy says one goal of the deal is to give the city flexibility to buy new technology. The city already is testing in-car meters that use sensors to automatically charge for parking.

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