As we noted earlier, Inspector General David Hoffman issued a scathing report
this afternoon estimating that the Chicago was shorted upwards of $1
billion by Mayor Daley's 75-year lease of the city's parking meters.
Hoffman repeatedly criticizes the city for "fail[ing...
As we noted earlier, Inspector General David Hoffman issued a scathing report this afternoon estimating that the Chicago was shorted upwards of $1 billion by Mayor Daley's 75-year lease of the city's parking meters. Hoffman repeatedly criticizes the city for "fail[ing] 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." It's clear that Daley's folks tried their darndest to dissuade the inspector general that such an analysis wasn't necessary:
The City has also argued that it would make no sense to calculate the value of the parking-meter system to the City under the terms of the lease, because the City could never operate the parking meters under the same terms as a private company. Specifically, the City has argued that (a) it would have been impossible for the City to have both kept the parking-meter system and raised the rates to the same extent as the lease, because there was not sufficient political will to do so (the “impossibility argument”); and (b) any private company would be able to operate the parking-meter system more effectively and efficiently than the City could (the “government inferiority argument”).
Not only was Hoffman not buying these excuses, he rebuts them directly.
The City's "Impossibility" Argument
In response to the claim that the city couldn't withstand the political blowback that would accompany an effort to raise parking rates, Hoffman cites Los Angeles and Phoenix as counterexamples. Both of these cities recently raised their meter rates (by 300 percent and 150 percent, respectively) for the first time in decades. Another example not included in the report is Philadelphia, which doubled its downtown parking meter rates in January. Have there been "revolts" in any of these cities? There's no evidence to that effect. In fact, it is Chicago's transition to higher rates that seems to have caused the greatest uproar against city government. Hoffman alludes to this irony:
[M]uch of the recent anger over the increase in parking meter rates has been directed at City government which indicates that the parking meter lease has done little to insulate the City’s elected officials from the political implications of raising meter rates.
It's important to remember that most of that anger was a result of the short-sighted implementation, not the higher rates themselves. Indeed, if the city or the new managers had installed credit-card-friendly payboxes before hiking the rates -- rather than suddenly requiring parkers to produce dozens of quarters -- the transition would have surely gone smoother. Which brings us to ...
The City's "Government Inferiority" Argument
That Daley administration officials would put the private sector on a pedestal is no surprise. Back in February, the mayor responded to questions about his privatization spree by denigrating city workers and concluding that government "can’t compete with the private sector" when it comes to providing services. You can hear echoes of this adoration in the administration's explanations to Hoffman:
As to capital improvements that would make the parking-meter system more efficient, the administration believes that “the implementation of improvements in meter equipment and technology that the private operator will provide to positively impact system utilization could not likely be made by the city.” This is because the City has “more pressing capital needs” and “because government is not motivated like business to increase profitability, government does not (and often cannot) make the substantial investments needed to improve revenues and customer service over the long-term.”
It doesn't take much to knock down this argument:
However, over the last several years, the City has shown its ability to implement capital improvements (and its “motivation” to “improve customer service”) by adopting innovative technologies such as solar-powered pay-and-display meters and in-car payment devices.
Furthermore, the meters' new managers have not exactly wowed us with their private sector prowess:
[A]fter Chicago Parking Meters, LLC took control of the system, it was so ill-equipped to handle the maintenance of the meters that City personnel had to step in and address mechanical failures.
Once again, Hoffman uses the city's own experience with the parking meter lease to debunk their excuses for why the deal had to go through. That's gotta hurt.