Abandoned vehicles were a frequent problem in many Indianapolis neighborhoods. Broken down (and sometimes stolen) cars were often abandoned on private property, parking lots, alleys, streets and even back yards. Over time, these vehicles became eyesores, and they contributed to blighted conditions in neighborhoods. In many cases, these vehicles became health, safety and environmental concerns. State statutes and City ordinances had established clear standards for the removal and management of abandoned vehicles, but the problems persisted. The City’s Department of Public Works (DPW), which was responsible for the collection, transportation and disposal of abandoned vehicles, struggled to keep up with citizen complaints.
Faegre Baker Daniels Consulting principal consultant Skip Stitt, then an official in City government, helped create a public private partnership to substantially reduce abandoned vehicles in the City. He was instrumental in program design, the development of the City’s Request for Proposals (RFP), the contractor due diligence process, and in developing the terms and structure of the final public private partnership agreement.
Using a competitive RFP process, the City solicited proposals from the private sector to help it solve its abandoned vehicles problems. Interested parties included tow truck firms, tow lot operators and managers, automobile auction houses, and other businesses. Key project-related strategies included:
- The City consolidated the management oversight of the abandoned vehicles operation into a single entity, and integrated the efforts of the private partner, the DPW and the Police Department
- The existing contracts for vehicle towing and vehicle scrap removal were competitively re-bid at the same time using new performance standards
- The City updated the operating standards associated with the abandoned vehicle operation, and required its private partner to meet strict performance measures
- The City and its private partner developed a revenue sharing model where each party shared in the financial improvements at the operation to ensure that the parties remained goal-congruent with respect to policy and operating strategies
The City of Indianapolis made significant and rapid strides in improving its abandoned vehicle operation. Over a three-year period, the abandoned vehicles operation transitioned from losing $180,000 per year under City management, to earning $571,000 as a public private partnership. The cumulative financial benefit over the initial three-year period was $1,656,000. Over that same time frame, the average price for each vehicle sold increased by 28%. This was due in part to increased competition for scrap removal, and in part to the private partner taking steps to increase the value of vehicles. In addition, the overall number of abandoned vehicles towed from neighborhoods grew from under 4,000 vehicles per year to over 7,000 vehicles per year. Local leaders praised the project’s benefits to their neighborhoods.