Friday, May 04, 2012

Chicago Parking Meter Woes Worsen

As a reminder that no city in America should ever privatize its parking meter assets, Chicago's Mayor Rahm Emanuel continues to battle over big dollars with the unpopular parking meter vendor he inherited from his predecessor, Mayor Richard Daley, who auctioned off the city's valuable parking meter assets for a one-time $1 billion payment. Daley now works as a partner at the Chicago law firm that represented the city's interest in the 75-year lease deal while he draws his comfortable $185,000 a year government pension. The Sun-Times reports that Chicago Parking Meters, LLC is demanding $14 million for revenues it says it lost last year when the city took meters out of use to make street repairs, and to hold street fairs and parades. This latest claim is on top of the $13.5 million the vendor claims the city owes it from people who avoid paying parking meter fares because their autos display handicap placards or license plates. The Sun-Times explains why Mayor Emanuel is disputing this latest bill:

Since the meter deal took effect, city officials have paid the parking meter company more than $2 million in what they call “true-up adjustments” to make up for parking spaces taken out of service.
The amount billed for those adjustments skyrocketed in the first nine months of the 2011 budget year, to $14 million — a sum Emanuel is refusing to pay. The company hasn’t submitted its claim for the last three months of the year yet.
In an April 5 letter to Chicago Parking Meters chief executive officer Dennis Pedrelli, Emanuel’s chief financial officer, Lois Scott, blasted the way the company calculated those adjustments for last year, calling its invoices “legally and factually erroneous.”
Scott said that, under the parking meter deal, City Hall should be determining how much money Chicago Parking Meters is owed for those out-of-service meters — something the Daley administration had allowed the company to do.
According to the Sun-Times, Chicago's parking meter vendor's revenues have shot up in the years since its take-over of the valuable city asset. Its revenues increased from $45 to $70 million in the second year of operation. By 2020, it expects to make at least $160 million a year. Morgan Stanley owns a majority stake in the private vendor with the balance of the ownership in foreign hands, including the emir of Abu Dhabi.

I suspect it's only a matter of time before similar disputes arise in Indianapolis with the ACS-run consortium that has a 50-year lease on Indianapolis' parking meter assets. It likely won't happen until Mayor Greg Ballard is out of office though since his administration is run by a law firm that represents ACS' interests first and the city's interests second. Mayor Ballard's new chief of staff, former City-County Council President Ryan Vaughn, represented ACS as a lobbyist.

No comments: