Monday, May 18, 2009

Aldermen order city lawyers to explore canceling the parking meter deal

Posted By on 05.18.09 at 05:53 PM

The still unfolding story of Chicago’s parking meter privatization debacle keeps getting more surreal.

This morning, five and a half months after the City Council signed off on the deal, angry aldermen accused the private firms that now run the meter system of cheating Chicago drivers, and some even demanded that city lawyers determine whether the contract can be terminated. They vowed to take the matter up again once they have more information—including copies of the contract itself, which incredibly they still haven’t seen.

We have, thanks to a freedom of information request. Aldermen, you need wait no longer: just click here and here for the PDFs.

At the end of last week it sounded like a pair of council hearings on the meters scheduled for Monday had been put on hold. Turns out that was only true for one, which was to examine how the deal was forged. Another went on as planned—Leslie Hairston’s demand for a look at whether the private operators knowingly collected money from meters that were mislabeled or not properly functioning.

The hearing gave aldermen a much-needed two and a half hours to take out their meter frustrations on top officials for three entities: Morgan Stanley, the primary investor in the deal; Chicago Parking Meters, the company created by Morgan Stanley to carry it out; and LAZ Parking, the firm contracted to oversee day to day operations of the meter system. Residents across the city have railed against a deal that’s creating hassles and costing them money, and it’s increasingly clear that aldermen are looking for ways to step up and fight--or at least vent--that they didn’t pursue before.

“As the chair of the committee on license and consumer protection, I don’t know who was responsible—I guess there’s plenty of blame to go around—but in all the years I’ve been in the City Council, I have never, ever seen such a rushed deal go through the City Council,” said Eugene Schulter, an alderman since 1975 who voted with 39 others to approve the deal last December.

“And obviously we’ve learned a lot over the last three to four months, but the city, as great as we are, and all the brilliant people who work for us, not to have a plan of action that was well thought out was absolutely disgusting as far as I’m concerned. And people in our city are very upset.”

Aldermen interrogated the company officials about why people had been ticketed for trying to feed meters that couldn’t take all the quarters fed into them, why labels on the meters didn’t match their actual rates, and what the firms had done to learn about the system before jacking the rates up.

Company officials chalked up most of the problems to the number, age, and design of the meters, saying they weren’t prepared for all the maintenance and logistical problems that they encountered—essentially what they’d “admitted” before.

When aldermen asked them what, exactly, they’d done to prepare for running the system in the months before they took it over, they offered vague answers about “due diligence” and their “ongoing relationship” with the city’s Department of Revenue, which controlled the meters before the handoff. Company officials frequently offered to provide aldermen with more information in private meetings "outside of this venue," as one put it.

Aldermanic frustration turned to furor when Dennis Pedrelli, CEO of Chicago Parking Meters, and Alan Lazowski, chairman and CEO of LAZ Parking, admitted that some meters had only given people seven minutes for a quarter instead of the seven and a half minutes advertised--then dismissed the issue as no big deal.

“Clearly there is adequate testimony here that would lead someone to believe that the city may not have received its end of the bargain,” alderman Manny Flores said. “Even if you want to look at those 30 seconds, we were deprived of 30 seconds for each meter for each quarter"--which, he emphasized, adds up fast when you're talking about 36,000 meters.

Flores, Hairston, and Helen Shiller demanded that before the next hearings the companies provide them with documentation of all communication between their staffs and city officials. They also said they wanted copies of the contract provided to them by the city, and they instructed the law department to study whether it could be canceled altogether.

Jack Guthman, an attorney for Chicago Parking Meters, said pleasantly that he thought that was a bunch of bullshit. “First of all, we will cooperate entirely with the corporation counsel,” he said. On the other hand, “I dispute entirely the suggestion that there have been any deceptive practices. I don’t want to debate this now, and we will cooperate entirely. But I don’t want this hearing to end with accusations that have been made that are really—”

“I will retract any implication that there were deceptive practices,” Flores said. “However, I want to make it very clear for the record that it is, based on the information provided in testimony here today, that Chicagoans have been shortchanged. We have been shortchanged, and you were aware that we were being shortchanged. You undertook your own method of remediation without informing the city of Chicago as per required by the contract.”

But Hairston, who once worked in the consumer affairs division of the state attorney general's office, jumped in to un-retract what Flores had just retracted. “What that information was on the meter was not actually what was happening was a deceptive business practice, whether you agree or not,” she told Guthman. “I think the testimony we have seen here today is extremely troubling, not just for me but for thousands of other citizens, I’m sure, and unless there is more information forthcoming I would like to know what our options are in terms of termination.”

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