As profits soar for the company running Chicago's metered parking spaces, so are the multimillion-dollar bills the outfit is asking taxpayers to foot under little-known provisions in its long-term deal, according to documents obtained by the Tribune.
The latest bill, sent May 17 by Chicago Parking Meters LLC, demands $22 million to cover a year's worth of free parking for vehicles that displayed disabled placards or license plates. The amount is part of a nearly $50 million tab that Mayor Rahm Emanuel so far has refused to pay.
"Just because there is a bill doesn't mean we automatically cut the checks," mayoral spokeswoman Sarah Hamilton said Wednesday in an email. "Since day one, it has been our top priority to fight on behalf of the taxpayers of Chicago and better manage the contract."
Emanuel intends to dispute the latest bill, as he has other CPM bills since taking over as mayor a year ago, City Hall sources said. But if the company does end up collecting in full, the money would only add to a growing bottom line.
Last year, CPM's gross revenue was $108.5 million, an increase of nearly $36 million from 2010, according to the company's financial statement submitted to the city. The total includes the disputed amounts for 2011.
After expenses including interest on the money it borrowed to launch the deal, the company made a profit of $27.4 million, according to the statement.
The Tribune sent the company a list of questions about the disputed bills. Spokeswoman Avis LaVelle declined comment, saying it is the company's "policy not to comment on ongoing disputes."
Emanuel is the first of many mayors who will have to live with the meter contract that then-Mayor Richard Daley put in place during his final term. In late 2008, Daley got aldermen to quickly approve a 75-year parking meter contract in return for a one-time payment of $1.15 billion.
A botched transition to the private company, increasing meter rates and analyses concluding the city was shortchanged soured the public on the deal and helped send Daley's approval rating to a new low before his retirement.
Daley and aldermen then spent nearly all of the money to keep the cash-strapped city afloat. By the time Emanuel took over last year, only $125 million of the lease payment remained.
The contract also includes clauses that allows the company to charge the city for revenue it did not receive because metered spaces generated less annual revenue than promised.
Last year, the company hit the city with a $13.6 million bill for money it says was lost to vehicles with disabled placards and license plates, by the company's calculations. That bill arrived during Daley's waning weeks in office, leaving Emanuel to reckon with it. The matter is in binding arbitration.
The company also has charged the city $14.2 million for spaces it says were out of service for various reasons. City Hall sources call that tab and the way it was calculated "invalid and unauthorized" and "grounded in a number of errors and inaccuracies." This bill also could end up in arbitration.
During the first three years of the deal, the city paid less than $2.2 million to the company for spaces out of service and nothing for money lost to spaces occupied by vehicles with disabled placards or plates, city records show. But as Daley and three of his top lieutenants were about to leave City Hall for jobs at one of the law firms that handled the parking meter lease, the bills began to mount.
Emanuel administration officials say they're at a loss to explain how the company estimated that the number of out-of-service spaces swelled from 5 percent or less in December 2010 to about 20 percent in March 2011 — one month after Emanuel won election.
Spaces can be out of service because the city eliminated them, changed hours of operation or temporarily closed streets. CPM argues the biggest loss of revenue resulted from the city increasing parking time limits for many spaces. In a letter to the company, city officials contended that increased time limits would "have either no effect ... or a positive effect" on revenue.
The city, meanwhile, continues to look for ways to lessen the potential for future bills for revenue lost to disabled parkers or metered spaces out of service.
Crackdowns on people falsely using disabled placards and licenses have been staged. New legislation awaiting Gov.Pat Quinn'ssignature would require payment by disabled people unless they are in wheelchairs or otherwise physically unable to feed the meters or pay boxes.
The city also is taking steps to minimize the number of meters out of service, in part by urging city work crews to lessen the time span of street closings. If meters are removed for construction, spots for new ones are considered.
And if a business wants a new loading or standing zone, the local alderman is given an estimate of resulting lost city revenue as part of the decision-making process.
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