Nearly three hours into the latest hearing on the parking meter lease agreement, 42nd Ward alderman Brendan Reilly got right to the point: “Certainly I think everyone would have liked to have had this dialogue, this open discussion, prior to the execution of this deal.”

No one disagreed. In fact, judging from the mood of the aldermen present, it seems likely that the deal would have been constructed far differently—if not scotched altogether—if the City Council had actually vetted it first.

Seven months after the council approved it, four months after it went into effect, Chicago’s meter privatization has gone so badly and outraged so many residents that aldermen are now promising to do better next time. They’re even threatening to act like a real legislative branch as Mayor Daley pushes his latest plans to balance the city budget and fund the Olympics.

The hearing was called at the behest of 49th Ward alderman Joe Moore and several allies, most of whom had voted for the deal in December but now, as an act of “repentance,” wanted a public airing of details about how it was forged, why the hand-off had gone so poorly, and what the city and its private operators could do about it. But they weren’t the only unhappy campers today: Daley loyalists like 44th Ward alderman Tom Tunney wondered whether the city got a fair price for the meter system and groused about how it’s ended up hurting local businesses.

“So how do we get out of this?” Tunney asked the city lawyers and budget officials there to testify.

Their answer: we don’t.

As city attorney Jim McDonald explained, the agreement doesn’t specify any process for “unilateral termination.” “We’d have to negotiate it,” he said. Which means that the tab for tearing the deal up would would almost certainly exceed the $1.157 billion the city got to outsource the meters.

Right off the bat finance committee chairman Ed Burke signaled that the aldermen probably wouldn’t get all of their questions answered. Paul Volpe, Mayor Daley’s chief of staff, formerly the city’s chief financial officer, and leading broker on the deal, wasn’t there to take them, though Moore had specifically asked that he attend. “Mr. Volpe had a conflict today,” Burke said. He said he didn’t know what Volpe’s “conflict” was.

But Burke himself was ready to participate, jumping in repeatedly to help administration officials and financial advisers answer questions. Many of the answers prompted still more questions.

“Whose idea was this in the first place?” Moore asked at one point.

“The idea to do the parking meter transaction was something the city had discussed extensively,” said Gene Saffold, the city’s chief financial officer. “And as we looked at other opportunities to look at, from a policy perspective, other types of assets, and discussions, there have been a wide variety of assets we’ve considered—” 

“And if I could butt in, I would say the idea germinated as far back as Walter Knorr,” Burke said. “It was really Walter Knorr who had the idea to sell the Skyway and then look at other assets.”

Moore nodded and asked Saffold again who had come up with the ideas to lease the meters.

“The city Department of Finance,” Saffold said.

“Who in the city Department of Finance?”

“A wide variety of individuals there. As the chairman has indicated, going back—”

“But ultimately there’s one person who had the ‘germination,’” Moore said.

Burke chimed in again. “Perhaps Mr. Lanctot can comment on that,” he said, referring to Tom Lanctot, a top official with William Blair and Company, which got a no-bid contract to help the city put the deal together. “He was involved in the process from the very beginning.”

Lanctot, sitting next to Burke, leaned toward his mike. “Alderman, maybe I can provide a little historical perspective,” he said to Moore. “We certainly brought this idea to the city’s attention.” He said the conversations had begun “in 2006 or 2007.”

“Mr. Lanctot, is it also safe to say that this is a type of transaction that has been examined by municipalities all over the United States?” Burke asked.

“There are a number of cities in the United States that want to copy the success of Chicago,” Lanctot said.

Saffold and Lanctot trashed claims from inspector general David Hoffman and others that the meters had been sold off cheap. “Many critics from the outside have used academic exercises in an attempt to determine the quote-unquote value,” Saffold said. “But there’s a wide gap between academic theory and the actual marketplace.”

Lanctot concurred. While Hoffman and his staff had performed an analysis that used information “from the Internet,” Lanctot said, William Blair had relied on “widely accepted valuation methods” that more accurately assessed the long-term worth of the meter system. He added, just in case everyone had missed the point before: “There is a big difference between academic theory and the marketplace.”

Alderman Scott Waguespack asked if William Blair had examined the specific terms of similar lease deals overseas.

No, said Lanctot. “We had limited access to them.”

“Was it available on the Internet, maybe?” Waguespack said.

Tunney and 46th Ward alderman Helen Shiller told city officials that the deal had become an economic problem in Chicago’s neighborhoods. “The businesses are crying because now no one’s stopping at the meters,” Shiller said. She asked city lawyers and revenue officials to report back with details on whether aldermen could have more flexibility in changing meter rates and hours. They said they would.

Hours later, little else had been resolved. Alderman Ed Smith, a 26-year council veteran, walked out shaking his head. “This is the worst deal I’ve ever seen,” he said. “But never again—it’s taught us something.”

One can only hope.