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Chicago meter money keeps flowing to private investors

Mayor Emanuel says he's saved drivers money, but evidence is lacking.

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On March 5, Mayor Rahm Emanuel issued a press release boasting that motorists in Chicago had saved millions of dollars in parking meter fees thanks to the deal he renegotiated last year with the company that owns the meters.

"By delivering on free Sunday parking in the neighborhoods," Emanuel said in a statement, "we're able to make a bad deal better."

It sounded great—who doesn't want to send less of our money to the wealthy investors who control the meters?

But a report attached to the press release—prepared by Navigant, a consultant to the city—doesn't prove anything of the sort. It's the latest example of Emanuel claiming he improved the unpopular deal—though he actually may have made it worse.

In case you've tried to forget, it was December 2008 when the City Council, at the urging of former mayor Richard M. Daley, voted to lease the city's 36,000 parking meters to Chicago Parking Meters Inc., a consortium of investors led by Morgan Stanley.

The best way to think of the deal is as a loan. The consortium agreed to lend the city, struggling with unpaid bills, about $1.2 billion. In exchange the city agreed to pay back the consortium with 75 years of revenues from those meters.

Not surprisingly, the deal was unpopular with the public, if for no other reason than that the council also gave CPM permission to jack up the parking rates from 25 cents an hour to $2 an hour in most of the city, and to as much as $6.50 an hour downtown.

Clearly, it was a boon for CPM. In 2008 the city collected $23.8 million from the meters. Four years later CPM raked in $139.5 million, according to audited reports filed with the city. The company's analysts expect revenues to increase yearly to almost $162 million by 2020.

It adds up to a double whammy for Chicagoans. Not only are drivers paying more to park, they're forking it over to CPM instead of providing the money for basic city services—like filling potholes. (The city spent most of the proceeds of the meter sell-off to plug budget holes during Daley's last couple years in office.)

Shortly after being elected, Emanuel said he was looking into retooling the parking meter deal or scrapping it. Once in office, he continued to rail against the deal and blame it on Daley. But at the same time he instructed city lawyers to defend it in court against a lawsuit challenging its legality. His move effectively killed the effort by attorney Clint Krislov and the IVI-IPO, a public-interest group, to have the deal nullified on constitutional grounds.

"The city's allowing the parking meter company to keep the meters going longer and increase the fees we pay. But they're saying we'd be paying less to the meters? I don't buy it."— Alderman Scott Waguespack

Instead, the mayor negotiated a slightly revised deal with CPM that ensured the meters would stay in private hands for seven more decades. Under the new terms the company agreed to drop some of its preexisting demands for so-called "true-ups"—payments the city is required to make every time a meter is taken out of commission for street work, a fair or festival, or a change in traffic regulations. But the city will still be on the hook for such payments in the future, potentially to the tune of hundreds of millions of dollars.

Emanuel also agreed to allow CPM to increase the hours the meters stay running, extending them from 9 to 10 PM through most of the city, and until midnight in the Gold Coast and the Loop. In exchange, CPM agreed to turn off the meters on Sunday in neighborhoods outside of downtown.

To sell this swap to the public, Emanuel contended that he was playing hardball with the meter company. He also declared that motorists would end up paying less into the meters overall, thanks to free Sundays.

After several aldermen questioned the savings, the mayor awarded a no-bid $250,000 contract to Navigant to study the matter.

In the spring of 2013, just before the new deal came to the council for a vote, Emanuel aides produced a Navigant report that said that the mayor was right: motorists would indeed feed less money into the system thanks to the renegotiated deal.

Alderman Scott Waguespack (32nd) remained unconvinced. "It makes no sense," he says. "The city's allowing the parking meter company to keep the meters going longer and increase the fees we pay. But they're saying we'd be paying less to the meters? I don't buy it."

Waguespack says he pressed Stephen Patton, the city's corporation counsel, to substantiate the claim with data, such as usage and revenue figures down to the level of individual meters. "Patton said that information is protected by attorney-client privilege. I said, 'I represent the people.' Patton said, 'I represent the mayor. If you want to see that data, go get an attorney.'"

In other words, if aldermen wanted information needed to make an educated vote on the reworked deal, they'd have to sue the mayor to review it, according to Waguespack.

On June 5, the City Council voted 39 to 11 to reratify the deal.

"These changes will provide much needed relief from this horrible deal," Emanuel said at the time. He went on to thank the council for making "a little lemonade out of this lemon."

Not all Chicagoans see it that way. For one thing, many local businesses and chambers of commerce are unhappy with free Sunday parking. They claim it cuts into their profits by enabling motorists to take up valuable spaces that would otherwise be available to Sunday shoppers.

In his March 5 press release heralding the good news in Navigant's latest report, Emanuel said that Navigant had analyzed metered parking from July 1 to December 31 and found "a net savings to motorists of at least $2.1 million."

The promising development was reported by a number of news outlets, though it wasn't exactly true. Navigant didn't actually compare what Chicago motorists paid into the meters in the second half of 2012 with what they paid under the new deal in 2013—at least not citywide. Instead, the new report measured "the actual results" against Navigant's original estimates last year.

"The savings to parkers and the net benefit to the City . . . have been greater than those we estimated," David Moes, Navigant's managing director, wrote Patton in the introduction to the report.

Basically, the chief finding of Navigant's latest report is that its original report was off target.

It's not clear how Navigant reached its conclusions. The new report didn't explain its methodology. It didn't provide or cite any data. It didn't reveal the totals of how much drivers across the city fed into the meters—either in the affected areas or in areas where no hours were changed.

And it didn't explain where its "actual results" came from. In past years, CPM didn't release revenue or usage data until the end of April, after the figures had been audited.

We called and e-mailed Moes to ask, among other things, how he came up with his results. He didn't respond. A spokeswoman for the mayor's office wasn't able to supply specific data either. She said she couldn't immediately provide the total amounts paid into the meter systems before and after the revised deal.

Aldermen weren't given a chance to see or ask questions about the report before Emanuel began touting it. Waguespack contends the report is "bogus" and was drummed up to counter complaints from businesses about free Sunday parking.

Other aldermen agree. "It's really just a memo that says, 'I told you so,' and there's no data to back it up," says Alderman Brendan Reilly (42nd). "Their homework is missing."

Meanwhile, local businesses are pressuring their aldermen about the free Sunday parking. Waguespack and Reilly say Emanuel and his aides have so far ignored them.

But the renegotiated deal has put the mayor in a proverbial parking pay box. He can't go back on his agreement to extend meter hours, so if he's eventually pressured to give up free Sunday parking, CPM will get even more money from motorists.

Then the mayor will have to come up with another consultants' report that explains why that's a good thing for anyone but the people who own the meter system.

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