Even city lawyers are now conceding that Chicago’s parking meter deal amounted to a sale of public property.
In the nearly 18 months since Mayor Richard M. Daley‘s administration handed off day-to-day management of the meters—and the millions of dollars in revenues they produce every month—city officials have stressed that the public still owns the street parking system. They’ve said that the city merely forged a “public-private partnership” with Chicago Parking Meters LLC by entering into a “concession agreement” for the next 75 years.
“The concession agreement is an agreement to operate the meter system over 75 years,” Gene Saffold, the city’s chief financial officer, said last year. “It is neither a sale nor a lease.”
But in a recent court filing city attorneys describe CPM as the owner of the meters, even as they characterize the deal as a boon to local taxpayers.
“The fact that the Concessionaire now owns the parking meters and receives the meter fees does not eliminate the public benefits,” attorneys write in a motion to dismiss a lawsuit challenging the legality of the deal.
The city received about $1.15 billion up front in return for granting Chicago Parking Meters the right to run the system and collect all the money from it through 2084. As the Chicago News Cooperative reported last week, the company is on pace to bring in more than $70 million from the system this year, largely from raising meter rates across the city. The Chicago Department of Revenue was bringing in about $20 million a year when it controlled the meter system.
The lawsuit challenging the concession agreement was filed last summer by attorney Clint Krislov on behalf of the Independent Voters of Illinois-Independent Precinct Organization. The suit claims the agreement is illegal because it requires that taxpayer money be used to help bolster the fortunes of a private company and illegally grants the company policing power.
Under terms of the agreement, the city retains the right to determine meter placement, rates, and hours, but it has to compensate Chicago Parking Meters every time a meter is removed or shut down for any period of time. After just the first three months of the agreement, CPM sent the city a bill for $106,440, records show. The company is still talking with city officials about what it’s owed for meter closures since last June, according to city spokesman Peter Scales.
The concession agreement also gives CPM the right to conduct its own parking meter enforcement. Since June the company has employed 10 ticket writers and plans to add five more before the end of 2010, said city revenue spokesman Ed Walsh. The city gets to keep the money from fines, but CPM is counting on stepped-up meter compliance to increase its revenues over the coming years, according to independent financial analysts who recently reviewed the company’s prospects.
In asking a Cook County judge to toss the lawsuit, city lawyers argue that the agreement is a winner for city residents, who are benefiting from the upfront cash payment because it helped stave off tax hikes during difficult economic times. And “even if the City did perform any enforcement functions that it would not have otherwise performed, this would still serve a valid public purpose,” the lawyers wrote in their motion to dismiss. “When the City enforces its traffic regulations, by writing tickets or otherwise, the public benefits in the form of, among other things, safer streets, less traffic congestion, appropriate parking turnover, available handicap spaces, street cleaning and maintenance, and clear pedestrian crosswalks.”
In his counter-argument, filed last week, Krislov notes that the agreement requires that the city keep its current ticketing policies in place. The city has to pay financial penalties if it doesn’t keep fines for meter violations at a level at least ten times the average hourly meter rate or if it eases its policy of booting cars that accumulate three or more unpaid tickets.
“As a result of these obligations, the City confers upon the Concessionaire an overwhelming private benefit that cannot be defined as a public purpose or merely incidental,” Krislov argued. “The Agreement plainly bars the City from exercising or varying its police power over the streets and public ways unless it pays money to the Concessionaire.”