Parking Meter Company Sends City New Bill For $22 Million
Stunning.
According to Chicago Parking Meters, LLC, a lot of disabled drivers are parking for free at metered parking spaces around the city. Millions of dollars worth.
CPM says it’s cost them $22 million in revenue in 2011 according to a story in today’s Chicago Tribune.
Per the parking meter lease agreement, approved by the vast majority of the Chicago City Council and signed by Mayor Daley in December of 2008, the meter company can bill the city when the number of drivers utilizing handicap license plates or disability parking placards exceeds a set percentage.
A week ago, CPM submitted their bill to the city for $22 million to compensate the company for disabled parkers just for 2011. The company invoiced the city $13 million for the same item in 2010.
The weakness with this aspect of the meter lease contract is that it allows for the meter company to provide documentation and the invoicing for the disabled drivers parking at no cost.
It is a perfect example of the proverbial fox guarding the hen house.
When potentially contentious contractual situations between two parties present themselves, often an impartial third part would be tapped to be an objective arbiter.
It’s why Major League Baseball does drug testing, they use an outside testing firm agreed to by the player’s union and MLB. It’s why during the acquisition or merger of two companies that an independent auditing firm is brought in to provide an unbiased opinion.
But Chicago’s meter lease deal does not provide for this and specifically makes the meter company (fox) responsible for documenting handicap parking (hen house) occurring in the city.
An expensive recipe for disaster.
Mayor Rahm Emanuel says he won’t pay any of these invoices, but binding arbitration outlined in the contract may force him to sign a few multi-million dollar checks.
And while legislation in Springfield to eliminate free meter parking for the vast majority of drivers with handicap plates and disability placards has passed the Illinois State House and is expected to pass the Illinois Senate, it would probably not go into effect until 2013.
This means the City of Chicago would see at least one more multi-million dollar bill for disabled parkers for 2012.
Here’s the Trib’s full story, “City Hall fights parking tickets: Tab now up to $50 million.”
Get out of the deal already.
@Mike – if only it were that simple. The deal may well have some outs, or the city could try to break it in court, but in either case, that’d require a payback of a prorate of the money paid up front. Money the city already spent.
We could pay back the company using meter funds and at some point in the future, that’d be our revenue again. They could do it but Daley and the aldermen that voted would look stupid but that’s their problem.
Come on all you haters of city workers who think the private sector can do a better job at cheaper rates!! Careful what you ask for, you might get it. What else do you union busting taxpayers out there want to sell off and privitize next?
Whenever something is sold to a private company, the price is jacked ie the skyway, the meters, parking garage rates, etc.
Glg wrote:
@Mike – if only it were that simple. The deal may well have some outs, or the city could try to break it in court, but in either case, that’d require a payback of a prorate of the money paid up front. Money the city already spent.
My comment: The solution is simple. Let them keep the contract. Let them be the one’s that want to break it. Three simple changes enable this to happen:
1. New Parking Ticket for Meter Violation Law: Ticket is $1.00 and revenue goes to the city. In other words, pay the meter box more than $1.00 (to Laz) or pay City $1.00.
2. Ban any Government money from being used for the enforcement of parking meters. Make Laz use the processes required for all other businesses. Take away the “threat” of tickets and watch compliance melt.
3. Require any company that operates more than, say, 3,000 parking spaces, to provide a live attendant within 500 yards of every space that they operate during the hours that the spaces are in use. If they fail to do so, they must be a “fine” or $2.00 per day per space.
I don’t see how any of these could violate the contract, and within weeks Laz would be begging to get out of the contract.
David…
Regarding :
1. New Parking Ticket for Meter Violation Law: Ticket is $1.00 and revenue goes to the city. In other words, pay the meter box more than $1.00 (to Laz) or pay City $1.00.
As I recall, thanks to the Language of the Lease….the City only retains the right to Increase Meter Rates and Increase the Expired Meter Fines. They don’t, I believe; retain the right to lower the Fine.
Okay. That still leaves the other options.
Actually, there is a tie in to the fine amount.
The fine for an expired meter cannot be less than a certain multiplier of the hourly rate.
Off the top of my head, I don’t remember what the amount is.
But, let’s say it’s 10X the hourly rate.
If the hourly rate is $1.75 per hour, the expired meter fine could not be less than $11.75 under that scenario.
But, my main point is, there is language in the meter lease contract that restricts how low it can be.
Not having term limits has worked wonders for Chicago, right David? I think not.
So think about this – if CPM bills Chicago annually an average of $20 million, over 75 years that will be $1.5 billion.
So the city will pay back a good portion of what it was paid originally over the life on the lease.
Just another indication that the city didn’t seem to give much thought to the contract…
Actually Greg it is Proof that the Alderman and women that voted for it didn’t read it in the 72 hours that Daley gave them to suck on it.
If politicians made a habit of voting against bills that were given to them with an insufficient amount of time to read and understand them, the world would be a much better place.
Amen Pete!!!
None of the comments addresses the issue to disabled drivers. I am one of those folks that am grateful for not having to worry about meters. I would find it a great added stress to the day to have needed energy to keep feeding meters while living with a disability.