Last December, in a welcome example of City Council independence, Ald. Scott Waguespack (32nd Ward) decided to crunch the numbers to find out if the mayor’s latest “outside the box” plan to lease the city’s parking meters for $1.2 billion over 75 years is actually a good ...
Last December, in a welcome example of City Council independence, Ald. Scott Waguespack (32nd Ward) decided to crunch the numbers to find out if the mayor’s latest “outside the box” plan to lease the city’s parking meters for $1.2 billion over 75 years is actually a good deal. What he found is that taxpayers will pay more -- to the tune of $2.8 billion -- while getting less in the form of government revenue. To make matters worse, taxpayers are also likely to get shortchanged on the other $4.8 billion worth of opaque privatization deals City Hall has orchestrated in recent years (on the Skyway, downtown parking garages, and Midway Airport).
So maybe Daley was experiencing a bit of lessor’s remorse yesterday when he resorted to blaming “clock watching” city employees for what the Sun-Times' Fran Spielman dubs the "great Chicago sell-off":
“They’re not customer-related. They’re gonna leave at 5 o’clock. They’re gonna leave at 4:30 or 4:00. I’m sorry. We’re on a time clock. They walk out. But, in the private sector, when you have a customer, you’re gonna stay there making sure they’re happy and satisfied,” Daley said.
“We can’t compete with the private sector. The private sector has a complete idea of who your customers are. Government doesn’t have customers. They only have citizens.”
In short: I’d rather hand off these services and assets for the next 75 years -- at a cost to the city -- than actually do the hard work of improving them.
Daley also lashed out at the 5th Congressional District candidates who criticized his privatization efforts during Sunday’s forum:
Today, Daley fired back. He noted that [State Rep. John] Fritchey voted for the 2006 bill that set the stage for the Midway and parking garage deals by granting blanket property tax exemptions to private investors who lease those city assets.
And Daley advised Fritchey and his rivals to “go back to business school” to learn the benefits of turning city assets into a cash windfall to keep building while other cities are cutting back.
Of course, taxpayers are still going to be “taxed” in these cases -- just by private companies instead of the government (keep an eye on those parking meter rates).
UPDATE (10:30 a.m.): Speaking of the parking meters, the Tribune reports today on a DePaul economist who is questioning the deal:
The complex agreement, the first of its kind in the United States, nets the city a one-time cash payment of nearly $1.2 billion when the deal is closed this month.
But the city could have earned $1.5 billion—in today's dollars—if it kept the meters and simply raised rates to the same levels it granted the winning bidder, according to H. Woods Bowman, a professor of public service at DePaul University. That's nearly $300 million more than Chicago Parking Meters, a limited liability corporation formed by Morgan Stanley to operate the meters, will pay upfront, Bowman said.
"There's nothing that would prevent the city from doing what the private sector is doing," Bowman said, noting aldermen already took heat for approving the rate increases in the deal.
UPDATE II (2:33 p.m.): Over at NBC 5, Steve Rhodes hits it out of the park:
[M]aybe Daley should go back to public policy school and learn the difference between a business and a city. One is for-profit, the other is non-profit. One is a hierarchy and the other is a democracy. One has customers who come and go; the other has citizens who pay the salaries of Daley and his workforce to make this a better place to live. And in one, the citizens own the assets the boss keeps selling - yet, somehow its the citizens who end up paying more for no longer owning them.
Read the whole thing.