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Parking meter settlement: Free Sundays, extended night hours

Innovation boosts city's parking meter deal — and maybe even Rahm
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Updated: June 1, 2013 6:19AM



Mayor Rahm Emanuel said Monday he’s trying to make “a little lemonade out of a big lemon” by settling disputed reimbursement claims from the company leasing Chicago parking meters in a way he claims would save taxpayers well over $1 billion over the next 71 years.

But, aldermen who must approve the changes say Emanuel may have made a lemon of a deal even more sour — by swapping three extra hours of paid parking in River North and one extra hour elsewhere for free neighborhood parking on Sundays.

The trade-off is part of a broader agreement that calls for the city to pay Chicago Parking Meters LLC $63.8 million to settle years of disputed claims stemming from parking spaces taken out of service because of construction, special events and parking changes and an arbitrator’s ruling on compensation tied to free parking provided to motorists with disabled placards.

“Sundays you see people parking for church in some of our areas, but the volume of traffic comes during the week” when parking hours will be extended, said Ald. Scott Waguespack (32nd), one of five aldermen to vote against the original parking meter deal.

“We have a horrible contract, and that contract needs to be broken. The city should be fighting [it] in court vs. chipping away at little things here and there.”

Downtown Ald. Brendan Reilly (42nd) called the extended parking hours “inherently unfair” to downtown residents, “especially the younger professionals who want to live in River North near work” like he does.

“I’m also surprised the administration does not consider River North a neighborhood, considering it’s currrently one of the fastest-growing urban residential populations in the entire country,” Reilly said.

Ald. Bob Fioretti (2nd) agreed that Emanuel should have intervened in the taxpayers’ lawsuit instead of throwing in the towel. Never mind that former Mayor Richard M. Daley spent all $1.15 billion of the money to balance his last few budgets without raising taxes.

“This is just more window dressing to let a bad deal continue ... and make everybody feel good for the day,” Fioretti said of the mayor’s changes.

Emanuel only heightened City Council skepticism by reading a statement, but refusing to answer questions about the changes he made to improve a “badly negotiated” deal he called a “straightjacket on the city” that allowed meter rates to go up “too much, too quickly” with no cap on the company’s profits or reimbursements.

The agreement includes a pay-by-cell phone option starting next year in exchange for a 35-cent fee.

“I’m trying to make a little lemonade out of a big lemon. We can’t make this bad deal go away or make it into a good one. But, we did make it a little less bad for the next seven decades while adding some breaks and convenience for Chicagoans along the way,” Emanuel said.

“The most important thing is that we can save taxpayers more than $1 billion today — money that can be used to hold down taxes.”

In a follow-up conference call with the Chicago Sun-Times, Corporation Counsel Stephen Patton and World Business Chicago vice-chair Michael Sacks explained how the mayor calculated the projected savings.

They argued that the company’s reimbursements claims of $50 million over the last two years for metered parking spaces taken out of service because of policing actions have been settled for $8.9 million.

Since similar claims would have been made in each of the next 71 years — and won’t be now that the company has agreed to accept the city’s reimbursement formula going forward — the savings over the life of the contract will top $1 billion, they said.

“When you have this past exercise of police powers, it’s not just that you owe that money for a particular year. That diminution of value in the system is baked into a formula. It’s not just $25 million this year, but every year for the remaining 71 years,” Patton said.

Sacks added, “It literally is not possible to have done better … than the city did. Our version of the math was accepted and the value difference was over $1 billion. The company accepted the city’s view and the reason they did was the mayor made it clear that he would fight forever and empowered his technology team to put the city on equal footing.”

Patton and Sacks said an analysis to be released at a later date determined that providing free neighborhood parking on Sundays would cost Chicago Parking Meters LLC $8 million-a-year.

The company will likely recoup just $7 million through the longer parking day, but that’s not an exact science, they acknowledged.

The three-hour extension of the parking day in River North is expected to impact 3,606 of the 35,000 metered spaces citywide. The area is bounded by Division on the north, the Chicago River on the south and west and Lake Michigan on the east.

“We know what’s been collected at pay boxes on Sunday in neighborhoods. That’s fact. How much will be collected from 9 p.m. to 10 p.m. and until midnight in River North is not something anyone knows for certain,” Sacks said.

“The city felt pretty good about coming anywhere near even, and we think we did better than even. It’s likely to be less, and the risk is on the meter company. You’d have to have more people parking from 9 to 10 p.m. [and until midnight in River North] than parked from 8 to 9 p.m. Utilization would have to go up during hours of the day when utilization is normally going down.”

Civic Federation President Laurence Msall called it a “reasonable trade-off” to extend the parking meter day in the entertainment district and other “higher-use” areas in exchange for free neighborhood parking on Sundays.

“The city was in a horrible position. It’s being forced to pay for changes for which it doesn’t have any money. This will allow the city to get out from under significant claims,” he said.

It’s a significant improvement to a bad situation that’s a direct result of the failure of the City Council and the previous administration not taking the time to protect taxpayers in contract language. There turned out to be a lot of unintended consequences.”

For two years as mayor — and even before that as a candidate — Emanuel has scored political points by playing the tough guy protecting taxpayers when it comes to the wildly unpopular parking meter deal.

He has accused Chicago Parking Meters LLC of failing to document compensation requests. He has sounded a bit like Clint Eastwood playing Harry Callahan as he explained his refusal to pay the $61 million in bills that landed in arbitration.

“Just because you send a bill, I’m not gonna ask taxpayers to pay it. There’s a new day here. I don’t know who they think they’re dealing with,” the mayor said with bravado last year.

Now, instead of just talking tough, Emanuel is taking action. The only question is whether aldermen — and the people they represent — will like the resolution or whether the political fall-out that Daley has absorbed pretty much alone will be shared with his successor.



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