Tuesday, December 04, 2012

Tab For Chicago's Dispute With Parking Meter Vendor Tops $60 Milllion

The financial albatross former Chicago Mayor Richard Daley hung around the necks of his successors for 75 years after entering into a one-sided privatization agreement for the city's parking meter assets has worsened. Chicago Parking Meters, LLC is now seeking payments totalling $61 million from the City for parking revenues it claims it lost due to street closings for street repairs and festivals and free parking provided to disabled drivers. In 2008, Chicago received a one-time payment of $1.15 billion in consideration for a 75-year lease that gives the parking meter vendor control of the city's 35,000 metered spaces and all revenues derived therefrom. The bills for out-of-use parking spaces didn't kick in until Daley left office in 2011 after the entire $1.15 billion payment had been spent for current obligations. Daley now works for the law firm which represented the private vendor in the one-sided agreement. Based on the size of the bills submitted to date by the private vendor, it would have been necessary for the City to set aside the entire upfront payment received from the private vendor in an interest-bearing investment in order to have sufficient revenues to cover payments for out-of-use parking spaces.

Indianapolis entered into a 50-year lease agreement with a private consortium headed up by ACS that provided only a $20 million upfront payment to the City, although the City receives a small percentage of the revenues the private vendor collects from parking fees that have more than doubled and expanded hours of operations for spaces subject to metered rates since the privatization deal became effective. Ballard gave nearly one-third, or $6.5 million, to Ersal Ozdemir, one of his largest campaign contributors, to build a new parking garage in Broad Ripple that allows him to retain all of the revenues. To date, the City has been less than transparent in providing financial data on the parking meter deal with the private vendor, including how much the City is paying to the private vendor for parking meter spaces that are out of use due to street construction or special events. Numerous news reports have documented complaints from motorists, who claim they are being fraudulently handed out $20 parking fines by the private vendor for expired meters despite still having time on the meter. Mayor Greg Ballard recently vetoed a proposed ordinance that would have barred the private vendor from handing out more than one parking ticket to a motorist for an expired meter on the same day after motorists complained about receiving three to four $20 fines for the same expired parking meter offense.

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