Chicago parking snafu a cautionary tale for suburbs

Suburban drivers are really no different from city drivers when it comes to Chicago's parking-meter fiasco. When they drive downtown, they find themselves paying more for what seems an ever-dwindling number of metered spaces.

Yet public-policy analysts say there's much suburban politicians can learn from the mistakes their Chicago counterparts made in privatizing the city's parking meters - or else they risk making the same sort of mistakes themselves.

Chicago Mayor Richard Daley scrambled this week to apologize for the way the parking-meter privatization was done - without admitting to the considerable drawbacks in the deal itself.

Northern Illinois University's Dr. Kurt Thurmaier said it should serve as a cautionary tale to all politicians in the metropolitan area.

"If people who are in suburban city councils look at this parking-meter privatization, they can see two things," said the director of NIU's Division of Public Administration. "One is, well, you get quick money. But, two, I think the lesson ought to be the voters are supreme, and the voters are hopping mad."

Citing a budget shortfall, Daley ramrodded the deal through the city council last December in a matter of days to lease the parking-meter system to a firm led by Morgan Stanley for $1.15 billion for 75 years. Chicago Parking Meters LLC instantly jacked up rates (an independent review issued in June by Chicago Inspector General David Hoffman estimated the actual value of the city's meters at more than $2 billion over the course of the deal) and in the process the city surrendered critical oversight of parking policy. Not coincidentally, city voters were irate at the fee increase.

Thurmaier compared the deal to a mortgage - getting money upfront in exchange for a long-term return - except that the voters weren't actually seeing the money go into city coffers, only that they were paying for it in the end.

Daley and the city council don't face re-election until 2011, but all could confront a tough battle with an unruly electorate on the issue that won't die down, especially if Daley doesn't get the Olympics to potentially distract voters when the 2016 Summer Games are finally awarded in October.

Hoffman's June report determined: "The hasty, 'crisis' nature of the decision-making process meant that the short-term budget problems and the large upfront payment the city would receive overshadowed all other legitimate, long-term public-interest issues."

Hoffman, by the way, resigned Tuesday to enter the field in February's Democratic Primary in the race to replace U.S. Sen. Roland Burris. The former U.S. attorney, appointed four years ago to address the city's so-called hired-truck scandal, was a persistent Daley critic, but he was by no means alone when it came to the parking-meter privatization.

DePaul University Associate Professor H. Woods Bowman has argued that the city also lost the ability to adapt public policy in the deal. For instance, if aldermen try to roll back rates in business districts, they face stiff penalties.

Bowman said suburban elected officials may not confront the same exact dilemmas, but they face the same sorts of issues as they try to address budget deficits in a tough economy.

"I don't know how lucrative suburban contracts could be for privatization," Bowman said. "However, I can assure you that this experience with the mayor is going to make suburbs thinking about it think twice. ... I don't think they're going to rush into it."

Thurmaier said such deals are really just a way for politicians to pass the buck on necessary fee increases. "The alternative to parking-meter privatization or tollway privatization or any of these long-term privatization plans is for the elected officials to raise the rates or raise the taxes that will yield the same return to taxpayers," he said. "You have to stand up, take the vote and defend it."