There’s only good thing about Chicago’s parking meter deal: no other city will ever again lease its parking concession to a private company.
Writing in the Pittsburgh Post-Gazette, Pittsburgh city controller Michael E. Lamb described how his city learned from our city’s financial blunder. Pittsburgh had a $1 billion pension liability, and needed $200 million to avoid a takeover of its pension system by the state of Pennsylvania. A parking lease would have brought in a quick $450 million. Pittsburgh was tempted -- but they’d seen how Chicago had gotten hustled, and realized their meters were worth $2.4 billion over 50 years.
Lamb wrote that the lease
would also have brought many of the same problems now plaguing Chicago, including drastically higher rates and payments to the private operator for lost revenue from meters taken out of service for events.
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In Pittsburgh, however, common sense prevailed. If private financiers could make money off of our parking system while generating significant returns for their investors, why couldn't we? Instead of directing revenue to Wall Street, we directed it to our pension fund creating, for the first time, a dedicated source of revenue for our retirees.
By dedicating revenue to the pension fund irrevocably for a term of years, we were able to calculate a present value for that future revenue and include that present value as an asset to the fund, thereby avoiding a costly state takeover.
My guess is that Chicago’s parking meter deal has not only poisoned the well for future parking leases, but for privatization of civic assets, period. At least we’re saving someone money.
