University won't privatize on-campus parking spaces

By Matthew Jackonen, Daily Staff Reporter
Published January 23, 2014

To privatize, or not to privatize: that was the question.

After extensive consideration, the University has decided not to lease out its on-campus parking facilities in partnership with a private company.

Last April, the University hired consulting firm Greenhill & Co. to analyze the benefits of a partnership with a private company for the Ann Arbor campus and University Health System.

According to a press release, the University has cut nearly $265 million in recurring expenses from its general fund in the last nine years, and the closer look at a private partnership for University parking was part of a larger goal to cut $120 million more by 2017.

Timothy Slottow, the University’s executive vice president and chief financial officer, said in the release the University is capable of running parking without the use of a private firm.

Slottow said the University met with both external and internal advisers to make the decision before officially declining to move forward.

Steve Dolen, the University’s executive director of Parking and Transportation Services, said the goal of the assessment was to keep costs down, specifically for students.

“The big picture is trying to keep down costs, which helps to reduce impact without escalating tuition rates,” Dolen said. “The big picture is doing whatever we can do and thinking creatively about opportunities that we might have to mitigate cost increases to students, so that’s really what it was about.”

Dolen added that the decision to not seek a partnership with a private organization was made with the University's long-term interests in mind, as well as with an understanding that the parking system was already running at a high level of efficiency.

“We went through the exercise to see if it made sense in the long-term with the best intentions for students and reducing costs for the organization,” Dolen said. “When they benchmarked us, it showed that we operated very efficiently and incurred very little maintenance.”

However, the assessment provided the University with a fair amount of new knowledge regarding ways to further improve the processes involved in parking.

Dolen said one of the ways the process can be made more efficient is through the increased use of technology.

“There are probably opportunities to help improve service and find more efficiency through automation, mainly in our parking services operations in areas where there are employees at the Health System at a pay lane,” Dolen said.

He added that the University had already started the process of using more technologically advanced methods of optimization, but that the assessment process has been a catalyst in increasing the use of such technology.

“We started, but it provided some impetus to really speed that up and speed up some initiatives to add technology that would be beneficial to customer service,” Dolen said.