Inspector General Rips Parking Meter Deal In Report: City Could Have Gotten Nearly $1 Billion More

The City of Chicago leased its parking meters for nearly $1 billion less than they were worth and the office in charge of valuing the meters didn't even run the numbers, according to a scathing report released Tuesday by the city's inspector general.

The "dubious" deal, reached hastily in December, to lease the city's 36,000 parking meters to a private company for 75 years for $1.157 billion earned the city about $997 million less than they were worth, a difference of nearly 45 percent, according to the report. And the city's chief financial officer, whose office oversaw the deal, failed to calculate how much the parking meter system would be worth to the city over 75 years if it retained the system rather than leasing it, the report found.

The report also criticizes the City Council for its lightning fast approval of the deal. Under pressure from Mayor Daley, the Council voted 40-5 in favor the plan only two days after Daley unveiled it.

"There was no meaningful public review of the decision," Inpsector General David Hoffman wrote in the report.

Read the full report:

Chicago Inspector General's Report On Parking Meter Deal -

Comments

[Cogs]

Ald. Ed Burke is blasting the Inspector General's report. Has anyone reaped more from the corruption at City Hall than this slickster?

[mergina]

Dat's Entertainm­ent....Chi­kahgo style.

[Ladyrantsalot]

If this deal isn't yanked, I think the entire Chicagoland area should take a vow never to pay a parking ticket. We should also boycott Morgan Stanley and any business that does business with Morgan Stanley and its subsidiaries. As far as I'm concerned, this is war.

[avocado]

I love your username

[Lakeview Greg]

How lovely. Take a billion NOW and kiss off 2 to 3 billion over time because we have to pay for potholes that don't get fixed, cops that assault people, city services that are only adequate and not good, and on and on and on.

Bilandic went to Florida while Chicago froze and got stuck in the snow. Daley fills his wallet now at the expense of every single Chicagoan later. Daley is either the Ken Lay of mayors or his "stupid" act is better than Roland Burris'.

Oy.

[thundermummy]

I love this city, the history, the people, the neighborhoods but I am not from here. Meigs Field was disgusting on principle but so much corruption takes place on more ordinary levels every day. I have been hit with special assessment taxes in my neighborhood based on alderman in a back room. The building I live in was never inspected by the city, the blueprints aren't even at City Hall and it's only five years old. Why? Payoffs. My street has potholes so big that an orange cone was sitting in one and only the top five inches stuck out above street level. I could go on and on. But I won't. Eventually, the b.s. of the city government will outweigh the good things of this city, and since I don't have family here, I will move. I doubt I will be the only one.

[avocado]

my wife and i are totally with you; we will absolutely CELEBRATE the day (2 years from now) when we drive out of this city--and state! Land of Lincoln indeed!!! This here is a house of cards...

[meade]

This issue was covered in much more depth over at the Chicago Reader. They put the difference between what Daley got and what the contract is worth over 75 years as more than $3Billion. And that's before figuring all the increases in meter fees that we're now seeing.

If someone doesn't step up to stop this crap (hello Patrick Fitzgerald), the taxpayers of Chicago will find themselves packaged and sold off to cover some imaginary budget shortfall. Not so far-fetched, Daley thinks he owns the city and everything in it. Yes, this includes you too!

[LeftRight]

It was said in the Sun Times before the deal took place that the city made $20 million per year at the previous rate. Multiply that times 75 years and you get $1.5 billion.

I'm still trying to understand the logic here. Double the cost of the meters, which is STILL better than what we are paying now, and the city would have made $3 billion over that 75 years, assuming no further increases in costs!! HOW is this a winning deal for the city?????????

[mjb5406]

Because instead of having to wait 75 years to make $1.5 billion, Daley got it NOW NOW NOW o he can plug the budget holes created by his own patronage system, where people get paid to not work.

[LeftRight]

I know that Daley wanted to use it to buy the Olympics (side note, that's the WORST thing that could happen to this city!!! I'm taking a vacation that summer if it's happening....) but that STILL doesn't make it good for the city!! At LEAST he should have tried to get the amount the city would have made!!

[Cogs]

Bring on the Olympics! The billion lost on the meter deal will be chump change compared to the graft Daley, Madigan and their cronies will pocket after they get their hands on the contracts to build the facilities for the Games.

[mjb5406]

...which will dig the city's financial hole even deeer.

[47th]

Amen! This is really all about funding Daley's Olympic nightmare!

[avocado]

the essence of this report, that there was no due diligence or deliberation and that the city did this in order to scape goat the meter raise on some other entity (Daley: "we didn't raise meter rates, that bad company did it"); this essence was immediately grasped by ordinary taxpayers like my wife and me.
this city is a dictatorship, plain and simple; the people of chicago apparently like it like that as they keep voting the same corrupt mob into power.

[mjb5406]

It's always easier to blame someone else... kind of like "the dog ate my homework". I'm surprised Daley didn't have some scapegoat for installing meters at the lakefront, where parking had been free... oh wait, he did... the mean old Chicago Park District is to blame!

[atlantajoe]

And we want these people to run healthcare ?

[LeftRight]

Nope, we want the feds to....

[atlantajoe]

same animal, differant level.

[Tinsdale]

"A billion here, a billion there, pretty soon it adds up to real money."- Senator Everett Dirksen

[KansasWrangler]

I'm not sure I see what the fuss is about. Why would anyone lease the meters if they weren't going to make a profit? Also that billion dollar profit in today's money isn't anywhere near what it would be devalued to in 75 years.

[mjb5406]

Huh? Did you even read what you said before posting it? This has nothing to do with the profit for the company leasing the meters; it has to do with the billion dollars plus the city lost out on. You really need to read an article before commenting. There is nothing about profit; it's about the lump sum the city got for the deal. They lost out on another billion because Daley and his buddies rushed the deal through, maybe because they felt it wouldn't hold up to closer scrutiny,

[LeftRight]

The city would have made $1.5 billion at the previous rate over that 75 year time frame had it kept the meters. They sold them for less than that, and then the company raised the rates anywhere from twice to 8 times the previous rate!!

[BushBites]

It could have been worse.

Daley tried to sell the meters for a handful of magic beans.

[Tinsdale]

Too funny.

[LeftRight]

Nah, that was what he wanted for Midway!!

[47th]

This meter thing could be Daley's Waterloo. Let us hope so!

[mjb5406]

The Chicago Machine is omnipotent. Daley speaks, his aldermen say "yes sir". He's selling the city out from under its residents to fund shortfalls caused by... City Hall itself. He shoukd be stopped from selling taxpayer-funded property.