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6/25/2014
Illinois Appeals Court Backs Chicago Parking Meter Lease
Appellate court rejects taxpayer challenge to 75-year Chicago, Illinois parking meter lease.

Parking meter photo by Seth Anderson/FlickrTaxpayers upset by rising parking meter rates in Chicago, Illinois failed Friday in their bid to overturn the 2008 deal that leased the city's parking meters to Chicago Parking Meters (CPM), a company run by Morgan Stanley, until the year 2083. The state Appellate Court held that the Independent Voters of Illinois Independent Precinct Organization made a good case that the deal was bad for the public, but that it is not the court's job to overturn questionable policy decisions.

Back in 2008, then-Mayor Richard M. Daley came up with the idea of giving Morgan Stanley the right to operate the city's 36,000 parking meters, set much higher rates and keep all the revenue for 75 years in return for a one-time payment of $1.2 billion. By the time Mayor Rahm Emanuel succeeded Daley a few years later, nearly all of that money had been spent.

The city council approved Daley's deal in a 40 to 5 vote on December 4, 2008. The city's outside legal counsel insisted that doing so was within Chicago's home rule authority, but the Independent Voters of Illinois Independent Precinct Organization argued that the deal violated the state constitution by requiring public funds to be spent for non-public purposes, namely for the benefit of a private company.

Chicago must spend taxpayer dollars enforcing privately issued parking tickets, and it must also pay Morgan Stanley "compensation" if it opens up any free parking lot or unmetered space anywhere within a mile of a parking meter, or if the handicapped use more than six percent of the available space. The fee to use a parking garage must be at least triple the cost of parking at a meter, or else the city must pay up. The city may not lower parking fines or ease up on booting cars without paying the investment bankers. The city must also pay whenever a street is closed for repair or utility work.

The appellate panel dismissed the taxpayer argument, saying the $1.2 billion payment was of public benefit, and so is heavy parking enforcement and ticketing. The panel also saw the shifting of risk of a reduction in parking meter revenue to Morgan Stanley as a boon to the city.

"Given all these public benefits arising from the concession agreement, plaintiffs have failed to show that the legislative findings that the concession agreement is in the best interests of the residents of the city and desirable for the welfare of its government and affairs are evasive and that the concession agreement directly benefits CPM without a corresponding public benefit," Judge Mary K. Rochford wrote.

Even though Chicago residents will pay more than $1.2 billion in parking fees over 75 years, the panel said the benefits could outweigh the monetary shortcomings of the deal.

"That said, we certainly understand the argument made by plaintiffs that the concession agreement transferring the city's control of the metered parking system to CPM for 75 years should not have been so hastily entered into and that the accompanying metered parking system ordinance should not have been enacted," Judge Rochford wrote. "However, arguments about why the concession was a bad deal for the city do not provide a basis for invalidating the concession agreement and the adopting ordinance."

A copy of the decision is available in a PDF file at the source link below.

Source: PDF File Independent Voters of Illinois v. Ahmad (Illinois Appellate Court, 6/20/2014)

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