Rates for most city parking meters will increase to $1 an hour in the coming months as a result of Mayor Richard Daley's deal to lease the spots for $1.1 billion to a private firm.
Two-third of the city's meters now cost 25 cents an hour, but once the paperwork is finalized, any metered spot costing less than $1 per hour will increase to $1 next year, city officials said today. And by 2013, those same metered spots will cost $2 an hour, according to City Hall.
The most expensive meters, which are found in the Loop, cost $3 an hour now. They will increase to $3.50 an hour next year and $6.50 by 2013.
City Hall officials said that after the first five years of the 75-year parking meter lease, rate hikes will be subject to approval by alderman and are expected to be at the rate of inflation.
The $1.1 billion to city coffers will come from Chicago Parking Meter LLC, which is made up of two Morgan Stanley infrastructure funds.
The Daley administration said $400 million will go into a long-term reserve, $325 million will be spent in city budgets through 2012 and $100 million is earmarked for programs helping low-income people. An additional $324 million is headed toward a fund city officials said "may be used to help bridge the period until the nation's economy begins to grow again."
Daley said the meter money does not preclude further spending cuts, including layoffs, in the coming months and years. That depends on how bad the economy gets, he said.
Even with this new money, the city projects deficits of about $200 million a year for several years to come, Daley said.
"That could grow. That could get much bigger," he warned.
Paul Volpe, the city's chief financial officer, said revenues are down even worse than expected. Real estate tranfer tax revenue for November was $4.3 million --- the city's worst month in more than 10 years.
According to the city’s request for bidders to come forward, the lease would cover 36,161 parking spots.
The city has markedly expanded the parking meter system in recent years, and revenues from the meters have increased, too.
There were 30,559 metered spots in 2004, generating net income of $13.6 million. By 2007, net income had risen to $18.9 million, according to city documents.