CHICAGO — For the last three weeks, Chicago drivers have unknowingly been enjoying a reprieve from paying America’s highest parking meter rates.
That’s because none of the city’s more than 4,100 parking meter pay boxes have been changed to reflect the higher rate, which officially went into effect on Jan. 1.
That means city parkers, who still are paying the 2012 rate, have collectively saved close to $900,000, based on past monthly revenues generated by the meters.
According to the terms of Chicago’s parking meter lease deal the city signed in 2008 under former Mayor Richard Daley, city meter rates were supposed to rise for the fifth time in five years at the start of 2013.
The new downtown rates of $6.50 an hour rank the highest of any rate charged in North America. Metered spots just outside of downtown in the South Loop, Gold Coast, River North and West Loop went from $3.50 to $4 per hour, while parking meters in other neighborhoods across the city went from $1.75 to $2.00 — a rate that’s on par with the downtown rates of many of the largest cities in the country.
But according to city officials and a source within LAZ Parking, the company which handles street operations for Chicago Parking Meters LLC, the company won’t start changing over the pay boxes to the new rates until February or later.
“By contract, CPM has 60 days to implement the rate change,” said Chicago Finance Department Deputy Comptroller Holly Stutz. “Due to contract issues, they have decided to start the rate change the first week of February. They will begin in the Central Business District working their way outward to the neighborhoods.”
City officials would not elaborate on the specific contract issues that were delaying the rate changes. A mayoral spokeswoman later denied contract issues were involved in the delay.
A spokeswoman for Chicago Parking Meters was even more tight-lipped on the matter.
“We are still on track to complete the rate change on all meters by the end of February,” said spokeswoman Lena Parsons. “It's our policy to not discuss routes and timing as the increase rolls out.”
But the slow pace in hiking the pay box prices is in contrast to what the company did in the previous three years. In January of the last three years, LAZ crews increased the rates charged at the highest-priced meters downtown within the first days of the month. They then proceeded to quickly switch over the remaining pay boxes citywide in a few short weeks.
Most puzzling in this year's approach is the potential lost revenue for the company. The company’s average monthly revenue was $6.85 million last year. Based on the 13 percent rate increase this year, the lost month of higher rates will cost about $890,500.
“Wow, that’s a lot of money to give up for your shareholders,” said Ald. Scott Waguespack (32nd), a vocal critic of the original lease deal. “I would say, yes, that’s strange.”
One explanation for the delay might be tied to the ongoing billing dispute between Mayor Rahm Emanuel’s office and CPM. Under the terms of the contract, CPM has the right to bill for lost revenue when metered spaces are closed due to street repairs, utility work, street festivals and when too many drivers are parking for free in metered spaces using disability placards or handicap license plates.
CPM has pegged the lost revenue at more than $60 million — an amount Emmanuel has refused to pay. The two parties have been trying to work it out in arbitration, while the city has moved forward with an audit of the contract and CPM.
But one local expert in negotiations said while the rate hike delay could be tied to the billing fight, it's also possible the city is trying to renegotiate significant changes to the entire contract.
Simon Kennedy Rose, author of the book "How to Break (or renegotiate) ANY Contract" and head of Third Force Negotiation, points to Emanuel’s refusal to pay CPM’s bills and loud public denouncements of the deal.
“In any dispute you want to begin the negotiations by disputing the entire amount,” said Kennedy Rose, of Avondale. “This is just standard best practice.”
He said there’s a chance meter rates could be frozen at 2012 levels as a result of the ongoing discussions, because its difficult to go backward once the rates are raised.
“We can only speculate, but the odds are if they haven’t put this into effect already, they may be keeping this [lower rates] up their sleeve,” Kennedy Rose said. “Not raising the rates is a bargaining chip, and maybe Rahm can use [lowering the rates] to save face. It may be something they can bring to the bargaining table. Then Rahm can go back to the people and say ‘I did this.’ ”
Even Waguespack admitted a renegotiated meter lease contract is a remote possibility.
“Basically, I would say anything is possible with this meter deal — on either side,” he said.