In a damning 45-page report issued this afternoon, city inspector general David Hoffman said the Daley administration's "hasty" consummation of the parking meter privatization deal--as well as the absence of deliberation in the City Council--cost taxpayers at least $1 billion.
"The City was paid, conservatively, $997 million less for this 75-year lease than the City would have received from 75 years of parking-meter revenue had it retained the parking-meter system under the same terms that the City agreed to in the lease," states the report, the result of a five-month investigation. The city received about $1.16 billion in its deal with Chicago Parking Meters LLC.
"Because the deal was presented to the City Council with very limited information and because the Council scheduled its vote a very short time later, there was no meaningful public review of the decision to lease the parking-meter system," the report says. "What is standard in the PPP [public-private partnership] 'best practices' model--informed deliberation, transparency, and full analysis of the public interest considerations--was not present here.
"In addition, the driving force behind the decision to lease the parking meters was the City’s short-term budgetary need. While we do not question the seriousness of the City’s budget problem that was presented in Fall 2008 because of the recession, the hasty, 'crisis' nature of the decision-making process meant that the short-term budget problems and the large upfront payment the City was receiving overshadowed all other legitimate, long-term, public-interest issues."
Read the full report here [PDF]. More updates later.
UPDATE: Paul Volpe, Daley's chief of staff and formerly his chief financial officer, disputed Hoffman's report in a quickly called press conference this afternoon. He said Hoffman had overestimated the long-term value of the meters and underestimated the risk in investing in them now. Volpe also denied that the deal had been hurried along or kept from the public. "The city conducted a robust, open, transparent, and competitive bid process," he said. Read his full statement here [PDF].