PT the Auditor
Justifying Pay on Foot, $1MM Loss, Unions
My mind has been all over the shop this past month with a number of parking issues being brought to light during my heavy audit schedule. They all may not bear directly on your operation, but some might pique your interest.
I am in the midst of a large conversion from pay-on-exit to pay-on-foot. There are all the normal issues, but some might be of special interest.
When we opened walls to install the POF equipment, we found that, in a number of cases, it was impossible to put the equipment through the wall. There simply wasn’t enough room. Also, when cables needed to be pulled, poured reinforced concrete isn’t exactly the easiest wall to drill.
We found that in the particular government jurisdiction, we needed a permit to install a variable message sign. Not just for the electrical hookup – we figured that – but we also needed a permit for the sign itself, because it could be seen from the street. Drawings, permits, design specs. Wow! More than 10K just for the installation of one sign.
When you need to justify a switch to pay-on-foot and the resulting removal of some cashiers, you need to deal not only with the difficult task of letting them go, but you also may run against the union, some of which have contracts that do not allow the removal of staff if you are changing technology.
Often you justify simply by figuring the reduction in staffing levels. However, experience has shown that even in the most well-run garages, revenue increases of 3% can be seen after the switch. Think how much the revenue may increase in a garage that doesn’t have all the proper controls?
I’m also working at a new venue that is owned and will be managed by European interests. They are looking to have parking equipment that meets the cultural standards of the typical EU operations. They need pay-by-cell, pay-and-display, and various very flexible communication systems so that they can market to parkers when they pay, as well as while they are in the venue. More about all this as I learn about it.
The Boss has a note in his column this month about a parking operation at a federal facility where the staff stole more than $1million before it was noticed – by a customer. The operator didn’t see anything wrong. It took the FBI to become involved to capture the culprits.
They did an audit. They sat outside the facility and counted the cars that went in – it was a fixed-rate location. They multiplied the number of cars by the rate and knew exactly how much money should have been collected. They then checked the bank records, and lo and behold, they found a huge discrepancy.
They probably did the audit a couple more times to be sure it wasn’t an outlier, then they could have simply marked some money, used it to pay for parking, get a warrant and, well …
You can do the same kind of audit yourself. Even if you have variable rates, you can log in each car with an entry time and an exit time and compute the rates. It takes a few hours, but you can know exactly how much money should have been collected. If you are close, so be it. If not, call me. I’ll get the goods on them.
One last thing – monthlies. Ask the manager how many active contract parkers he or she has on file. Should be a number that can be easily had. Then run a card list and count the cards that are active.
There shouldn’t be any difference. If there is, find out why.
Could be that the local police have a card so they can drive through the lot, and then there’s the one you gave your wife. But there should be a good explanation for every card that is “on” and not on the active card list.
If not, you can assume that each card that is “on” and not paid is costing you the full monthly rate. And that ain’t hay.
The numbers don’t have to be exact, but they should be close. If they aren’t, call me.
Article Abstract from April, 2013