Five aldermen voted against the parking meter lease deal [PDF] Thursday, and one of them, the 32nd Ward’s Scott Waguespack, sent constituents an e-mail message this morning blasting the agreement as a big money loser for the city despite the $1.2 billion cash infusion it provides. Here’s the message in its entirety:
On Thursday, the City of Chicago signed a 75 year lease of our citywide parking meters with Morgan Stanley/Chicago Parking Meters LLC for $1.15 billion.
I voted against the sale of this public asset because it was a bad deal for Chicago.
On Monday, we received word from the Mayor’s Office that a deal was to be signed with Morgan Stanley. While I did receive the draft ordinance, no financial analysis was forthcoming, so my staff and I put together our own financial analysis to determine if the $1.15 Billion was a good deal or not.
According to our analysis, the city would receive about $1.5 Billion if we sold as is.
If we quadruple the prices of some meters, as Morgan Stanley will do on January 1, 2009, and increase again by 2013, our analysis shows that the actual value over 75 years is closer to $4 Billion.
During the Finance Committee meeting on Tuesday, I argued that the city was not getting a good deal, and that at a minimum the Council should see the City’s numbers. They instead argued our numbers were wrong (without having seen them). I was then told I could see some numbers, but not before the vote. That refusal to provide financial data sealed my NO vote.
Morgan Stanley and LAZ Operators will raise meters from $3/hr to $3.50 Jan.1, and to $6.50/hr by 2013. Neighborhood parking rates that are typically $.25/hr increase to $1/hr on Jan. 1 and increase to $2 by 2013. After 2013, the City must raise rates by a yearly inflation rate to meet contract requirements. The City still receives the increased revenue from enforcement, but the parking meter revenue stream is lost for 75 years.
While the City receives a quick shot in the arm of $1.15 Billion, I believe the alternative; a long term revenue stream from well managed City owned meters would have been a better deal for parking meter users and taxpayers. Selling a major asset that is designed as an urban planning traffic tool while providing a positive revenue stream is simply wrongheaded.
Furthermore, the fact that we fail to maintain a decent cash reserve for a city our size is awful, and I argued during budget hearings that the FY 2009 $1.5 Million reserve (one point five million) was further indication of the need for major structural reforms in the city finances. (This week’s snowfall cleanup cost us about $500,000 for one day, and it is not yet 2009.)