City has worked out bugs in meter lease

In his recent story, "Chicago parking snafu a cautionary tale for the suburbs," Ted Cox could have provided a more balanced and accurate review of the concession agreement of Chicago's parking meters system and the concessionaire's performance to date.

The city did not delegate the ability to set rates for parking meters, as Mr. Cox wrongly asserts. The parking meter concession agreement and the city's Municipal Code are clear: the setting of meter rates is a reserve power of the city. That power cannot be assigned to the concessionaire. Chicago Parking Meters' activities are limited to the operation, management, rehabilitation, and collection of the parking meter system.

In the early months of the transition to a private operator, admittedly, there were serious operational issues. Mayor Richard M. Daley noted that, in hindsight, the transition should have been longer to better identify and address operating challenges resulting from the transfer. These challenges have been addressed.

Also, the city disagrees with the Inspector General's notion that Chicago could have received more than the $1.2 billion for the system. His analysis of the system's value failed to account for the appropriate level of risk associated with the long-term concession and to factor in future annual operating costs and capital investment needs.

And as Mr. Cox notes, a portion of the proceeds is being used to stabilize the current City budgets during the worst national recession in decades. But much has been placed in long-term reserves, bolstering a good financial deal that protects Chicagoans in the long run from higher taxes and cuts in critical services.

The city has used these funds to build the city's long-term reserves, which in turn has strengthened our credit rating, paid off huge amounts of debt, supported people in need, created a rainy-day fund, and helped balance this year's budget and budgets through 2012.

Gene Saffold

Chief Financial Officer

City of Chicago