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City Hall: Parking-meter firm off by more than $22 million

Chicago Parking Meters LLC has collected $200 millifirst three years its meter-privatizatideal. | Andrew A. Nelles~Sun-Times Media

Chicago Parking Meters LLC has collected $200 million in the first three years of its meter-privatization deal. | Andrew A. Nelles~Sun-Times Media

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Updated: April 29, 2013 8:11PM

The private company in charge of Chicago’s parking-meter system is demanding more money from the city, saying revenue it’s lost from City Hall taking meters out of service and for having to provide free disability parking now comes to $61 million.

But Mayor Rahm Emanuel’s administration says the company’s math is way off. City officials claim to have found more than $22 million in errors, according to documents obtained by the Chicago Sun-Times.

It’s the latest in a series of disputes over reimbursements that Chicago Parking Meters LLC has sought under provisions of the 521-page meter-privatization deal.

Independent arbitrators are meeting with both sides behind closed doors to determine how much the city must pay.

The meter company has reported collecting $200 million so far under the 2008 deal, in which former Mayor Richard M. Daley agreed to give up all metered-parking revenue for 75 years in exchange for $1.15 billion upfront.

City Hall turned over control of 36,000 metered spaces and agreed to let Chicago Parking Meters raise the cost of parking.

The next increase is set to hit in January, when the cost to park at a metered spot in the Loop will rise to $6.50 an hour from the current $5.75. That’s more than double what people paid to park at meters in the Loop in 2008.

Beginning in 2014, meter increases citywide will be tied to the rate of inflation.

The deal requires taxpayers to reimburse Chicago Parking Meters any time the city takes a metered spot out of service — because of, for instance, construction or street festivals or to keep traffic flowing during rush hour.

The company also is supposed to be reimbursed whenever a driver uses a disabled-parking placard or license plate to park for free.

The bill for those lost revenues now stands at $61 million, according to the meter company.

That’s up more than $11 million from the last time city officials disclosed how much Chicago Parking Meters was demanding.

Until this year, City Hall allowed the meter company to do the calculations on how much it should be reimbursed. But Emanuel says the city always had a right to make those calculations itself, and when the bills began to soar, he ordered aides to check the math.

Over the summer, City Hall spent more than $300,000 to develop software that allows it to crunch the meter company’s numbers and compare them with the city’s records regarding out-of-service meters. Since then, city officials have begun studying more than 100 million parking transactions that Chicago Parking Meters turned over in April.

According to the city’s analysis, the company overstated the percentage of time that meters were out of service — in some cases by as much as 15 percent. As a result, the company has been putting in for far higher reimbursements than it should get, the analysis found.

The company claims the city owes it about $25.5 million for out-of-service meters.

The city’s analysis says that figure should be only about $3 million.

“After months of trying to obtain the data from the meter company, we finally have it and were able to determine what we suspected all along: that the parking-meter company bills are off 85 cents on the dollar — or $22 million more than they billed” for out-of-service meters, says Emanuel.

A Chicago Parking Meters spokeswoman declined to comment.

City officials say they’re continuing to analyze transactions involving $35.5 million the company is seeking for two years’ worth of free parking that it provided to people with disability license plates or placards. Like the dispute over out-of-service meters, that also is in arbitration.

Regardless of how those cases turn out, the meter company’s disability-parking bills are expected to decline drastically starting in 2014. That’s when a new state law takes effect aimed at limiting abuses of free disability parking.

A Sun-Times investigation last year found dozens of able-bodied drivers using relatives’ placards, fake placards and stolen placards to park for free in metered spots in Chicago. That prompted the change in state law, under which, as of Jan. 1, 2014, only people who have special “meter-exempt” disability placards will be allowed to park free. To get those placards, people will have to prove they are physically unable to access or operate parking meters.

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