Parking Meter Company Dings City For Another $14 Million

The Chicago Sun-Times reports today that Chicago Parking Meters, LLC has sent the City of Chicago another bill for $14 million.

This time it’s for True-Up Revenue, a term used to describe the revenue the meter company loses when metered spaces can’t be used due to road construction or repairs, utility work, street festivals, etc.

This provision is tucked within the universally hated parking meter lease contract, which essentially sold off Chicago’s parking meter system for $1.16 billion back in 2008.

This provision allows CPM to invoice the city for lost parking revenue anytime on street metered parking spaces cannot be used.

True-Up Revenue was a paltry $6,829 back in 2009, but rose to $2.1 million for 2010 as The Expired Meter reported back in December.

According to the Sun-Times, the Emanuel administration is disputing the $14 million bill, along with an invoice for $13.5 million that was billed for lost revenue from an overabundance of drivers using handicap license plates and disabled parking placards to park in metered spaces for free.

However, there is a big difference between how the two types of revenue are documented.

While the bill for disabled parking is solely based on the reporting of CPM itself, True-Up revenue from meter closures is documented using photos, measuring wheels and independently corroborated by the city’s own databases.

Here’s the Sun-Times full story, “Chicago parking meter company wants more money; mayor balks.”

23 Responses to Parking Meter Company Dings City For Another $14 Million

  1. Joe says:

    Geek, do you know how the true-up revenue is calculated? Do they assume if a spot is out of commission due to construction or whatever that it would have been occupied by a paying car the full time it was un-usable? If so that is rather unfair as spots sit empty frequently.

    I think what will end up happening is the city will allow them to add more parking spots to make up for the difference and not let the city get stuck with a bill, but who knows.

  2. BXK says:

    Is this the worst legislation ever in Chicago history? What a mess.

    75years right? so only 71 to go….

    Why on earth did they agree to such a long term?? what was wrong with 5, 10, 15 yrs? this cannot be corrected for a lifetime.

  3. Capt M-Plate says:

    This can be corrected with a Simple Document from the Office of Finance/Comptrollers Office…

    A LARGE CHECK to buy out the remaining time of the Contract that CPM Et al has Paid for already in advance.

    I Ticket CPM vehicles and LAZ Vehicles out of Shear Malice.

  4. Joe says:

    I don’t think it would be that easy to buy-out the lease. They were expecting to make money on their investment, so simply paying back the original investment wouldn’t be enough.

  5. Capt M-Plate says:

    Legally that is all that is required by law. No interest. Nothing beyond the 1.115 Billion that CPM et al paid the city for the privilege to manage/maintain and collect the revenue from the parking meters/pay boxes.

    It is actually written into the Lease that the city has the Right to Cancel the Contract with a Repayment Option at ANY TIME with no Notice required.

    And that the Concessionaire has no recourse except to Accept the Repayment and then shuffle off with their mouths closed (yes…I READ the whole damn lease.).

  6. .Q says:

    Did anyone else notice that with annual repayments averaging $15.3333M over the life of the lease, that the City will have repaid the ENTIRE advance payment?

  7. Joe says:

    Good to know Capt M-Plate, that is surprising that there are no tricks with the repayment considering how many tricks there are in the lease. At least there is an out then. They should just bond out whatever they need to repay, and then operate it themselves again. They would make enough to repay the bonds and generate revenue. They could lower rates too probably.

    The Suntimes updated their article with the Mayor’s response, and it noted that the city has to pay the highest parking rate for spots that are made unavailable. That is just awful and shows you how awful this deal is. It is to CPM’s advantage for the city to have to use spaces that are outside the loop rate because they get more money.

  8. Saucexx says:

    Oops posted this in the wrong place….

    The city was taking in $25 million when they sold the meters before the hourly increases and extra days and time. With all the proceeds essentially gone, the budget now has a $25 million dollar hole in it. CPM/LAZ on the other hand is indicating that by 2020 they’ll be collecting $162 million from the meters. That 1.2 billion will be paid off pretty quick, possibly as little as 15 years. The rest is all gravy, maybe as much as $8 billion in gravy.

    The city can end the lease and use the proceeds from the higher rates to pay off CPM. Somebaody should ask why the city isn’t exploring this scenario.

    I wonder how Dick “It’s only fineprint” Mell fells about this now? Can we send him the bill?

    If we got screwed this bad on the parking meters, what’s Rahm’s “Trust” going to do to us?

  9. ejhickey says:

    I think it is really hilarious that former Mayor Daley has an Of Counsel position with the the law firm that drafted the Parking Meter Deal (from hell) and that Daley gets a $183,000 per year pension from the City. The final twist of the knife is that Daley is a Democrat.

  10. Capt M-Plate says:

    Q…the majority of the moneies that CPM is billing the city for comes from HCP plate/placard vehicles parking for free all day on meters.

    And since Springfield passed the first step (the House as I recall passed it) in a Bill to Revoke Free Parking for HCP plates/placard displaying vehicles unless the Owner is Short a Limb/in a Wheel Chair)…the 15m per annum will drop to less than the allotted wiggle in the contract.

    There is a Set amount per year that the City isn’t Liable for…and the Overage is billable.

  11. The Parking Ticket Geek says:

    Joe,

    My understanding and the understanding of many other people who’ve read the agreement is this.

    If a metered spot is out of commission for more than 3 hours in a day or more than 6 hours over 3 days, the meter company can ask for compensation due to closure. They would have to be compensated for the entire day the meter is in operation as if the spot was filled for every minute of that period of time.

    As everyone knows, outside a few areas of the city, no metered spots are full 100% of the time. But the language of the contract allows the compensation to be setup this way.

    And here’s a little tidbit that proves what I’m saying.

    Have you ever noticed when there’s metered parking on side streets and street cleaning is scheduled?

    Notice the warning signs posted.

    Most street cleaning signs have the hours for no parking as 9 AM to 3 PM.

    By metered spots, the signs say 9 AM to 12 PM–exactly 3 hours.

    Why?

    Well, if the metered spots were closed for over 3 hours then a closure would be in effect and the city would have to pay back CPM.

  12. The Parking Ticket Geek says:

    Q!

    Shhhhhhhhhhh!!!!

    I’ve been interviewing people for a post on this for Monday!

    WTF?!? Do you have my phone bugged or what?!?

  13. The Parking Ticket Geek says:

    Hey ejhicky,

    Not sure what you’re implying by mentioning Daley is a Democrat.

    But, if you look at what political party has been in power and essentially controlling the ship of state here in Illinois and Chicago, it’s been Democrats.

    From a financial point of view, Chicago and Illinois are complete and utter failures under Democrat power.

    Personally, I don’t vote for failed politicians or failed policies no matter what their political affiliation may be. While each candidate is a unique individual and should be judged that way, in a very general sense, Democrat leaders have screwed us in a MAJOR way. I cannot understand when voters continue to vote for the very same people who have made such a mess of things. But that’s just me.

  14. Annonymous says:

    The Communist Nation of Chicago and its satellite protectorate of Illinois is a utter failure regardless of what political party is in control.

    The Last Quality Mayor this city had was Harold Washington. And the Job Killed him.

    No such luck with Daley or Rahm.

  15. Rinzler says:

    Everyone wants to eliminate the meter deal, I am pretty sure City Council and the Mayor get it. The problem is, you have a legal document in place that makes it almost impossible to get out of. The crux of the problem is simple $$$ the city doesn’t have it. 2012 budget was somewhere in the neighborhood of 600 million in the red, so where is the money going to come from. Even if they planned the 2013 budget with the repayment in place, how many jobs would be lossed? how many public work plans be scrapped? city services still remain? Hmmm, we have a “trust” fund now, I wonder if that is how they are gonna try to fund projects IF they try to cancel the lease.

  16. Rinzler says:

    Daley was never a Democrat. He was a Republican wrapped in Democrat’s clothing. The time is ripe for a 3rd party candidate to not only run, but win.

  17. DoR Employee says:

    Rinzler…Daley wasn’t even a real Republican.

    He was a Front man for the crooks.

  18. Pete says:

    Chicago could just choose to make no more of these payments. Let the assholes sue – what jury would rule in their favor?

  19. Send Daley the parking tabs, he’s got his own TARP funds…

  20. Greg says:

    I would have loved to be in the room when Rahm read this lease.

    I just imagine him saying “What. The. Hell. Have I inherited?”

    The way the empty meters are calculated is fascinating. They really do make more when they are out of commission then when they are usable. It’s like Mr Potter telling George Bailey “You’re worth more dead than alive.”

  21. Ticketmaster says:

    Pete, love the idea, but a legal agreement must be enforced. 9-1/2 knew exactly what he was getting into to. One thing for, if anyone can find a way to get out of it, 9-1/2 will.

  22. The Parking Ticket Geek says:

    Rinzler,

    Bingo, Bingo, BINGO!!!!

    You are absolutely spot on correct!

  23. Juvenal says:

    The Solution here is obvious. Katten Muchen Zavis probably billed the city a million or more bucks to review and “scrooten” that deal. Allowing it to go forward is LEGAL MALPRACTICE and, while the firm’s malpractice insurance probably only has $50 million or $100 million in coverage, the partners of that firm are personally liable and their net worths probably exceed $1.16 billion. `The easiest way for Rahm to get the money back is to sue Mara Georges, Richie Daley and their new law partners….

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