The City Council embarked today on the first of several days of hearings on an agreement that settles several longstanding disputes with Chicago Parking Meters (CPM), the company that leases the City’s parking meters. According to Mayor Emanuel, the settlement will save taxpayers an estimated $1 billion in additional charges over the life of the parking meter deal.
The Settlement Agreement
The settlement was reached after a two-year dispute over how much the City is required to pay the parking meter company for meters taken out of service for street repairs, loading zones, community festivals, and the like. The parking meter company claimed that the reimbursement formula of the contract entitled it to reimbursements of over $50 millionfor just the last two years alone.
Mayor Emanuel demanded changes to the reimbursement formula and the parking meter company finally relented. Had the same reimbursement formula been used going forward, the City and its taxpayers would have been liable for more than $1 billion in charges over the life of the contract.
The proposed agreement also includes a change to the underlying parking meter deal that will provide for free parking on Sunday in Chicago neighborhoods in exchange for an extra hour of metered parking Monday through Saturday and three extra hours in the River North area. The agreement also calls for the introduction of a “pay-by-cell” option that will provide convenience for those parkers choosing to use it.
Questions about the Settlement Agreement
Though widespread support exists in the City Council for the portion of the agreement that changes the reimbursement formula, many of my colleagues are concerned that the “free” Sunday parking in exchange for longer hours of operation citywide and the Pay-by-Cell arrangement could possibly lead to windfalls for CPM, and create additional risks down the road.
The Paul Douglas Alliance, a coalition of politically progressive alderman of which I am a member, yesterday submitted to the Emanuel Administration a six-page list of comments and questions about the transaction. The questions cover every aspect of the agreement, including the methods used for calculating the reimbursement costs incurred by the City, the potential costs or savings from eliminating Sunday parking charges and extending hours during the week, and the potential profits earned by the parking meter from the pay-by-cell option.
In order to ascertain whether the supposed savings we realize from settling the lawsuit are at least equal to the cost of the Pay-by-Cell deal, and the increased hours of operation of almost all the meters in the City. The deal may well be worth it, but we won’t know for sure until my colleagues and I have answers to our questions. The Emanuel Administration has promised to provide a prompt response.
Why Can’t the City Simply Back Out of the Deal?
The parking meter lease negotiated by Mayor Daley’s Administration four and a half years ago clearly was a raw deal for the City’s taxpayers and parkers. Many have asked why the City can’t simply void the contract and back out of the deal. Unfortunately, specific provisions in the original parking meter deal in which the City specifically pledged it would not challenge the deal in court, as well as principles of general contract law, prevent the City from doing so.
Even if the City somehow succeeded in voiding the contract, it would be required to give back the $1.15 billion it received from CPM when it entered into the lease agreement, plus reimburse CPM for the current value of the pay boxes. Sadly, the Daley Administration spent the vast majority of the proceeds from the lease to close holes in the City budget. The City simply doesn’t have $1.15 billion sitting around.
A lawsuit challenging the parking meter lease agreement as an unconstitutional delegation of police powers was filed last year by attorney Clinton Krislov on behalf of the Independent Voters of Illinois-Independent Precinct Organization. The trial court, however, dismissed the lawsuit in a lengthy opinion.
I Would Appreciate Your Thoughts on the Settlement Agreement
Though the Mayor and his attorneys say the negotiated deal is one unified package and that it is the absolute best deal that could have been achieved, given our less-than-commanding bargaining position. They say separating certain provisions from the agreement would require the City to return to the bargaining table, thus jeopardizing the entire deal, including the portion of the agreement that would allow the City to reap $1 billion in savings from changing the reimbursement formula.
Some of my colleagues are skeptical of that assertion and say that the City should return to CPM and ask if they would be willing to scrap the portion of the deal that provides for free Sunday parking in return for an extra hour of metered parking during the week.
What are your thoughts? Do you like the idea of free parking on Sunday even if it means that most metered parking in our ward would be extended by an hour from 9 p.m. to 10 p.m.? Even if you’re not in favor of the trade, do you think it’s worth returning to the bargaining table and potentially jeopardizing the rest of the deal?
Fortunately, we have given ourselves much more time to deliberate over this agreement than the three days we were given with the original deal. This will give my colleagues and me time to fully vet this agreement, solicit opinions from our constituents and make sure it is in the best interest of the City and its taxpayers.
I look forward to hearing your views.