I suspect you will find there's a bylaw prohibiting parking anywhere in the CBD that's not an 'approved' parking place, if not something that specifically mentions parking on the footpath is prohibited.
What I'm talking about is rather than try and fight this by protesting, throwing a tantrum, or by pursuing 'legal avenues' (which will fail if there's an applicable bylaw) is to reason with them. Summat along these lines:
"There are ever-increasing numbers of bikes being ridden due to high petrol prices. Why not show that you are environmentally aware and encourage people to come into the CBD on bikes rather than cars, by providing more free parking for them? Furthermore, bikes parked in unconventional places where they are not obstructive have been previously overlooked; isn't it counter-productive to start penalising them now?"
As support for this, there are examples of 'progressive' cities such as Melbourne, Sydney, London (bikes exempt from congestion charges) etc.
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