Chicago aldermen argue city got 'gypped' in privatization of parking meters
Five months after privatizing Chicago parking meters with only five dissenting votes, the City Council took the contractor to the woodshed today amid accusations that it botched the transition, concealed problems and "stole" money from motorists who parked at improperly calibrated downtown meters.
The outrage was so great about a 75-year deal tied to a steep schedule of rate hikes that several aldermen believe there may be grounds to cancel the $1.15 billion lease with Chicago Parking Meters LLC.
Never mind that a chunk of the money was used to balance the city's 2009 budget.
"You took my money, and you took the money of at least 5,800 Chicagoans. That's what you did. And when you knew the meters did not work, you continued to take our money. That is fraud. That is a deceptive business practice, sir," said Ald. Leslie Hairston (5th), urging "restitution" for motorists who were similarly "gypped."
Ald. Manny Flores (1st) urged the Law Department to investigate whether Chicago Parking Meters LLC violated the contract's severability clause by keeping the city in the dark about the downtown problem.
"Chicagoans have been shortchanged. You were aware they were shortchanged. You undertook your own method of remediation. ... The contract was not followed. ... They're supposed to be in constant communication with us. That clearly didn't happen," Flores said.
License Committee Chairman Eugene Schulter (47th) unleashed his anger at city officials charged with evaluating and overseeing the deal.
"I have never, ever seen such a rushed deal go through the City Council and ... hurt the taxpayers. ... Not to have a plan of action that was well thought-out was absolutely disgusting," Schulter said.
Dennis Pedrelli, CEO of Chicago Parking Meters LLC, said the problem with 5,820 single-space meters in the downtown area stemmed from the "calibration technology of old generation meters."
Once the company became aware of the problem April 13, decals were changed and a "programming solution" was implemented to credit four additional minutes-per-hour, Pedrelli said. And 477 pay-and-display boxes have already been installed to replace 3,200 of the 5,820 downtown meters.
As for the aldermanic demand to terminate the contract, the contractor's attorney Jack Guthman said, "There are no grounds for cancellation."
But, he said, "This is the largest contract of its kind ever undertaken and we have acknowledged that there have been some problems. We're working toward rectifying them."
Five months ago, the City Council approved the parking meter deal -- and a steep schedule of rate hikes tied to the 75-year lease -- by a vote of 40 to 5. Without the windfall, aldermen would have been forced to raise property taxes or lay off hundreds of city employees.
Soon after the Feb. 13 takeover, the parking meter deal turned into a public relations fiasco that sent aldermen running for cover.
The private contractor underestimated the resources required to re-program meters and make timely collections so they don't get jammed with quarters.
That resulted in a rash of broken, overstuffed and mismarked meters. Chicago motorists vented their anger with a spike in vandalism and a drop-off in on-street parking.