Inspector General: We Got Ripped Off on Meter Deal

By Prescott Carlson in News on Jun 2, 2009 9:52PM

A couple of weeks after Chicago Reader's Ben Joravsky and Mick Dumke published a story estimating that the city was grossly underpaid in the parking meter privatization deal, City Inspector General David Hoffman has released his own report on the lease with LAZ Parking and he agrees -- he estimates that the city should have been paid over $2 billion dollars instead of the $1.15 billion it received.

The 45 page document is the product of 5 months worth of work, and states that if the city had kept the meters and implemented the same rate hikes being proposed by LAZ, the city would have collected $974 million more than what it made in the deal -- something that seems like Aldermen could have worked out in a few minutes with a calculator before they voted. Hoffman says he isn't against the idea of privatization, as long as it's a good deal:

"The bottom line is, there was no outside, independent consideration of whether it was a good idea to do this," Hoffman said Tuesday, arguing that the City Council is "at fault for this as well."

"We're not saying they shouldn't have sold the meters. If you're getting a low-ball offer, maybe you still sell because you need the money. But, they didn't even figure out what the comparative number was. . . . They should have chosen those alternatives that would have been better for the city."

Thanks for your input, Dave, but it's a little late, no? To try and prevent a similar debacle going forward, Hoffman recommends a "60-day City Council review period" regarding future leases of city assets, 45 days longer than the currently proposed ordinance mandating a 15 day review on any sale/lease of city assets worth over $100 million -- that ordinance will be voted on tomorrow. Which is all fine and good, but do we even have anything left to sell?

The Reader has posted the full report (PDF). [S-T, Reader]

UPDATE: The city has released a response which you can read here.