Remember those mechanical sandbox toys kids used to play with? Fill the container with sand and turn the crank. The sand is fed into little buckets on a conveyor belt which carries it up a track and dumps it into hopper, which in turn fills up and tips over to refill the container at the bottom where it is scooped again into the little buckets and the process begins again. This can go on and on and on until nap time. Nothing gets accomplished but there is kind of a perpetual motion feel to it, and probably a subtle life-lesson, too. ‘Round and around and around.
I get a similar feeling when I watch the political circus in the Chicago area. In our twenty-one years of living here I don’t think there was ever a time when there was not a major investigation going on, a trial under way, and some grafter awaiting sentencing. It just goes on and on and on like that sandbox toy. Get rid of one, here comes another.
Well, we have a new scandal in Chicago. It's not big as these things go, but it will serve to illustrate issues on a larger scale.
Here’s the deal: On December 2, 2008 Mayor Daley proposed granting a 75 year lease on all 36,000 Chicago City parking meters to a private firm, Chicago Parking Meters LLC, for $1.2 billion dollars. Chicago, like cities everywhere, is broke and this deal seemed like a quick fix. The parking meter company would pay the City in one lump sum, essentially cash, $1.2 billion smackeroos right there on the Treasurer’s desk. The Mayor was anxious to conclude the deal quickly.
City Council studied the matter for a whole two days, skipping over most of the confusing fine print, and on December 4th, by a vote of 40-5 approved the sale. The money showed up like a nice Christmas present. This year’s budget hole was covered and there was plenty left over for other pet-projects. Everybody was happy.
A late US Senator from Illinois, the economically conservative Everett Dirksen, once took a poke at government spending by famously saying “A billion here, and a billion there and pretty soon you’re talking about real money.”
Senator Dirksen, how right you were.
Within weeks the new owners raised rates on their parking meters; $5-6 an hour in some locations. Complaints started pouring into City Hall. Before long bureaucrats and Aldermen started counting on their fingers and making pencil calculations on the back of envelopes. How much money could 36,000 parking meters generate, anyway? You can picture the beads of sweat on their foreheads when they started coming up with the answer: Lots.
Think of those parking meters as 36,000 sand-box toys that crank out cash, day after day. It turns out the $1.2 billion the City received was the short end of the deal. The “real money” is going elsewhere. Over the life of the lease those meters are worth an estimated 4-5 billion dollars. Likely more. And, it's easy money.
Chicago Parking Meters LLC is owned by Morgan Stanley in New York. Recently it was learned one of Mayor Daley’s nephews works there.
There have been calls to cancel the deal. Problem is the City of Chicago has already spent a lot of the money and can’t pay it back.
The Moral of the Story: This is what happens when legislators get in a hurry.