Commentary

Setting the Record Straight on Chicago Parking Meter Privatization

I’ve written extensively on this blog on the $1.15 billion lease of Chicago’s parking meter system, and my new column offers a perspective on the issue that seems to be missing from the bulk of the media reporting.

As I discuss, early operational challenges and citizen frustration over parking rate increases coalesced to politicize the deal and invite tremendous media scrutiny and no lack of detractors, but the zeal to demonize the deal seems to have distracted focus from not only the overall benefits of the deal to the city, but also from the tremendous operational improvements and system investment we’ve seen in recent months as the still-young, six month old initiative moves forward.

The operational improvements and significant capital investmentâ??as one example, the concessionaire is on track to complete the entire meter system replacement this year, two years ahead of scheduleâ??are highlighted in my article.

I also add some perspective regarding a controversial June report issued by the city’s Inspector General claiming that the city could have gotten a higher bid value. As I blogged here, the IG’s analysis seemed inconsistent with the asset valuation approaches we routinely see in the marketplace and ignored a number of critical factors that gave the illusion that the system was worth more than the $1.15 billion the city received.

In the new article, I include further discussion of this topic by highlighting a report from William Blair & Company, the city’s financial advisor, that offers what I found to be a robust and thorough critique of the IG report, and an excellent explication of how the city went about ensuring that it would receive the best and highest bid. I would strongly suggest that anyone interested in parking meter privatization read this valuable analysis, which is available on the city’s website here.

In additional news on the Chicago parking meter front, the city has also posted a retraction from a local bicycle and pedestrian advocacy group, the Active Transportation Alliance, that had issued a critical report earlier this year on the parking meter lease. According to the letter from ATA executive director Rob Sadowsky, “I would like to simply state that we should not have published this report. I am embarrassed that it not only contains factual errors, but that it also paints an incorrect interpretation of the lease’s overall goals.” For more details, see the full letter here, and for more of the city’s information resources, see this Chicago Department of Revenue parking meter resource page.

For more on parking meter privatization, see here, here, here, here, here, here and here.

Reason Foundation’s Annual Privatization Report 2009
Reason Foundation’s Privatization Research and Commentary

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

The project aims to promote solvent, sustainable retirement systems that provide retirement security for government workers while reducing taxpayer and pension system exposure to financial risk and reducing long-term costs for employers/taxpayers and employees. The project team provides education, reform policy options, and actuarial analysis for policymakers and stakeholders to help them design reform proposals that are practical and viable.

In 2016 and 2017, Reason's Pension Integrity Project helped design, negotiate and draft pension reforms for the state of Arizona's Public Safety Personnel Retirement System and Corrections Officer Retirement Plan, which both passed with overwhelming bipartisan support in the state legislature and were signed into law by Gov. Doug Ducey.

Gilroy is also the Director of Government Reform at Reason Foundation, researching privatization, public-private partnerships, infrastructure and urban policy issues.

Gilroy has a diversified background in policy research and implementation, with particular emphases on competition, government efficiency, transparency, accountability, and government performance. Gilroy has worked closely with legislators and elected officials in Texas, Arizona, Louisiana, New Jersey, Utah, Virginia, California and several other states and local governments in efforts to design and implement market-based policy approaches, improve government performance, enhance accountability in government programs, and reduce government spending.

In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie.

Gilroy is the editor of the widely-read Annual Privatization Report, which examines trends and chronicles the experiences of local, state, and federal governments in bringing competition to public services. Gilroy also edits Reason's Innovators in Action interview series, which profiles public sector innovators in their own words, including former U.S. Transportation Secretary Mary Peters, former Florida Gov. Jeb Bush, former Indiana Gov. Mitch Daniels, former New York City Mayor Rudy Guiliani and more.

Gilroy's articles have been featured in such leading publications as The Wall Street Journal, Los Angeles Times, New York Post, The Weekly Standard, Washington Times, Houston Chronicle, Atlanta Journal-Constitution, Arizona Republic, San Francisco Examiner, San Diego Union-Tribune, Philadelphia Inquirer, Sacramento Bee and The Salt Lake Tribune. He has also appeared on CNN, Fox News Channel, Fox Business, CNBC, National Public Radio and other media outlets.

Prior to joining Reason, Gilroy was a senior planner at a Louisiana-based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.