Mayoral Candidates Take Aim At Parking Meter Deal
Updated 11/10/10 - 6:38 p.m.
CHICAGO (CBS) -- The billion dollar windfall from the city's 75-year lease of parking meters to a private firm is nearly gone, but the outrage over the deal is still palpable and two mayoral candidates are trying to use that outrage to their advantage.
Mayoral hopeful Gery Chico accused his old boss, Mayor Richard M. Daley, and the City Council of risking a "complete fiscal fiasco" by raiding the reserve fund established by the parking meter deal and the lease of the Chicago Skyway as "short-term budget fixes."
As the City Council prepares to take a final vote on the Daley administration's new budget, Chico was at City Hall Wednesday to offer a "citizens ordinance" to protect the remaining cash from those deals and replenish the $400 million reserve the parking meter deal was supposed to fund.
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"This is wrong. We were told $400 million would be put in a reserve account. It's not there today, because it's easy money to get," Chico said at a City Hall press conference to outline his plan to protect those reserve funds. "Today we can barely put a finger on anything that's left in that account. The money went short-term budget fixes in far-greater numbers than we were ever told."
And, as CBS 2 Chief Correspondent Jay Levine reports, former U.S. Sen. Carol Moseley Braun said she wants to go a step further. She is joining an effort to cancel the parking meter contract and lease the meters for what she believes they're really worth: as much as five times the $1.15 billion Chicago got from the deal.
"If the deal is unfair and ... was created under false circumstances, then it absolutely can be undone," Braun said. "These people came in and gave the city bad information, bad advice. The aldermen didn't even know many of that, most of that; didn't even know what the real numbers were."
Two lawsuits already have been filed, seeking to void the contract that became widely unpopular after parking meter prices went up and meters were plagued by malfunctions shortly after the private vendor took control.
The city's $6 billion 2011 budget, which is expected to pass next week, relies on using revenue from city reserves, including monies from the $1.1 billion deal to lease the city's parking meters and the $1.8 billion deal to lease the Chicago Skyway. As a result of repeatedly dipping into those reserves the past few years, only $500 million remains of the Skyway reserves and only $76 million remains of the parking meter reserves.
Chico calls the decision to raid those reserves a "complete fiscal fiasco." He said those reserves need to be protected in a trust fund, with only interest earned on that money used for operating expenses.
He accused Daley and the City Council of using the reserve funds as a source of "easy money" to provide short-term fixes to a long-term budget problem.
Chico introduced an ordinance to place the remaining money in the parking meter and Skyway reserves into "irrevocable trusts" overseen by a board appointed by the mayor and the City Council.
"This ordinance represents the difference between what was a bad choice on the meters in the first place and a complete fiscal fiasco," Chico said. "The fact we were told $400 million would be there and today there's $76 million dollars, there's something wrong with that."
One trust would contain the remaining $500 million in long-term reserve funds generated by the 99-year lease of the Chicago Skyway. The other would contain the remaining $76 million from the 75-year lease of Chicago's parking meters.
Interest generated by the Skyway trust would be used to pay city operating expenses, while interest from the parking meter trust would be used to replenish those long-term reserve funds until they reach a $400 million benchmark.
To reach that $400 million benchmark, the city would be required to set aside at least $16 million each budget year for the next 20 years, or until the $400 million benchmark is reached.
"I will act responsibly, we will be accountable. We will not kick the can down the field, which is what's being done here," Chico said.
Daley defended using the reserve funds, rather than impose more taxes on residents, saying the city already plans to repay the money borrowed from the reserves.
Asked how he would pay for that $16 million annual cost of his plan, Chico declined to provide specifics, but said there is no way to simply cut the budget to eliminate deficits.
"You are going to have to generate new money,'' he said, adding that he had new ideas to bring "substantial revenue'' to the city.
Chico has been a longtime aide and problem-solver for Daley, having served as his chief of staff, school board president, park board president and, most recently, as the City Colleges board chairman. He resigned his City Colleges post to focus on his bid for mayor.
Some aldermen have considered canceling the parking meter lease. Daley administration lawyers say the deal is solid, but Braun said the lease could be voided because it's illegal and unfair. She said Daley had no authority to sign such a long lease.
"There was no truth. There was no good information, there was no sharing, there was no transparency and we got scammed and snookered and held up by people with ball point pens," Braun said Wednesday.
Two lawsuits are already in court seeking to void the contract so unpopular that even those who weren't raising the issue themselves couldn't resist jumping in.
"The money was not used for its original set of purposes, which was to invest in key infrastructure investments to make that city a more productive city economically so you can grow jobs," mayoral hopeful Rahm Emanuel said when we asked him about it. "It was used to for filling operating holes, budget holes."
