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Former Mayor Daley’s staff saw parking-meter problems brewing, records show

A parking meter 3100 block N. Broadway Ave. Chicago Ill. Wednesday December 26 2012. | Andrew A. Nelles~Sun-Times Media

A parking meter on the 3100 block of N. Broadway Ave. in Chicago, Ill., on Wednesday, December 26, 2012. | Andrew A. Nelles~Sun-Times Media

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Updated: June 24, 2013 2:16PM

Former Mayor Richard M. Daley’s staff was aware of major problems with the city’s parking-meter privatization deal in 2010 — a year and a half before the costly issues publicly surfaced, according to hundreds of pages of documents released Wednesday by Mayor Rahm Emanuel’s administration.

The documents detail behind-the-scenes sparring between City Hall — under Daley and Emanuel — and Chicago Parking Meters LLC before Emanuel struck a deal last month with the meter company.

If approved next month by the City Council, that deal will see the city pay Chicago Parking Meters $63.8 million to settle disputes over how much the city has to pay it for when the city took meters out of service and for when drivers with disability-parking placards and license plates parked free at meters. The settlement also would create free parking in most neighborhoods on Sundays but establish longer meter hours.

As early as May 2010, in the second year of the 75-year meter-privatization contract, Daley aides questioned Chicago Parking Meters’ disability-parking reimbursement claims, the newly released records show. Over the next three years, the company demanded nearly $56 million for the free disability parking — an amount fueled in part by able-bodied drivers using relatives’ placards, or fake or stolen ones, to avoid paying escalating meter costs.

The hit on taxpayers didn’t become known until December 2011, seven months after Daley left office, when the Chicago Sun-Times reported the extent of the disability-parking abuse and that taxpayers would have to pay for it.

But Daley aides saw a storm brewing long before then, sending several letters to Chicago Parking Meters asserting that people who fraudulently use placards shouldn’t be part of the company’s reimbursement claims.

“Vehicles with clearly expired or fraudulent placards or exempt plates have no right to avoid paying the required meter-parking fee,” Gene Saffold, Daley’s chief financial officer, wrote to the company on Dec. 3, 2010.

The head of the parking-meter company disagreed, citing the deal the mayor negotiated in 2008.

“There is no basis . . .for the city’s claim that vehicles displaying exempt placards or license plates that are expired or fraudulent should be excluded,” Dennis Pedrelli, the meter company’s chief executive officer, replied on March 15, 2011. “The definition of exempt persons expressly includes ‘persons claiming to be exempt persons,’ which is exactly what persons displaying expired or fraudulent placards are engaged in doing.”

After the Sun-Times’ reports, Illinois lawmakers passed a law ending free metered parking for most people with disabilities. The new law, which takes effect in 2014, is expected to dramatically reduce the amount that taxpayers will owe Chicago Parking Meters.

The law firm of Katten Muchin Rosenman, where Daley now is employed, worked for the city on drafting the parking-meter deal. A spokeswoman for Daley could not be reached Wednesday for comment.

The newly released documents also show the meter company paid former Daley press secretary Avis LaVelle’s public relations firm $518,246 between 2009 and 2012. Another subcontractor, Monterrey Security, owned by a former Chicago police officer, Juan Gaytan, has been paid $3.5 million.

The Emanuel administration declined to release documents, including email, that might shed light on its negotiations with Chicago Parking Meters that led to the settlement. An aide wrote the Sun-Times request for such records under the Illinois Freedom of Information Act “is unduly burdensome on the daily operations of the mayor’s office.”

The mayor’s law department released the documents the same day the Chicago Board of Education took a historic vote to close 50 schools. The Sun-Times had submitted the records request on April 29, the day the settlement was announced.

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