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The revenue control ordinance in San Francisco

One City's Solution to Revenue Control

Dave Frieders


The San Francisco parking ordinance ultimately came into existence because customers were not being provided receipts, paid fees were being pilfered, unnecessary fines were assessed, cars were being towed unfairly and tax revenue due to the City & County of San Francisco was reported inaccurately. Usually public agency regulation comes to an industry as a result of such abuses.
Before the parking ordinance in San Francisco, few parking customers received receipts. Usually customers were left only with "verbal proof" they had paid and parked their towed car in a location. Some towing companies and parking operators allegedly shared interest in the $250 to $350 towing charges from their sites. According to San Francisco Department of Consumer Assurance (DCA) Director Dave Frieders, "the program helps consumers by ensuring they get what they pay for when parking in San Francisco. I've seen too many cases of people's cars being towed even though they paid for the parking space."
The San Francisco parking revenue control ordinance also came into existence in response to the fact the City & County of San Francisco was not receiving due tax revenues from parking garages and lots. Consequently the ordinance was initiated by the District Attorney's office and passed unanimously by the Board of Supervisors. According to Frieders, "parking revenue control equipment is helping San Francisco collect millions of dollars in previously lost tax revenue. I think it is one of the most important new programs our city has seen in years." Prior to the ordinance, parking revenue collection for the city largely was dependent on parking industry reporting. Actual site audits revealed discrepancies between revenue reporting and parking revenue collections.
A more complete auditing process utilizing on site RCE reports informs both the operator and city auditors if an attendant is bypassing reporting procedures. Monthly or contractual parking is also site verifiable in comparison with transient parking in the same facility. RCE on-site audits and reported collections in comparison with business office records for the same periods closes a broad revenue gap previously unsecured. Additional on-demand RCE reports immediately track daily trends for preceding parking periods.
The Department of Consumer Assurance is aware of operators and attendants bypassing on site RCE data input and collecting unreported revenue. Clearly on-site auditing is required. DCA believes approved, sealed RCE data is reasonably secure, though not exempt from alteration and hacking. RCE does not prevent an attendant or operator from bypassing data input on site or inaccurate internal monthly reporting, but it does provide verifiable data for comparative audits and tracking.
According to Assistant Director Sid Baker, "If tampering of the systems takes place, we have an aggressive audit and inspection program to troubleshoot problems. We believe that the systems that are currently being certified meet the security requirements and standards to help the City & County of San Francisco collect previously lost revenue."
Revenue control equipment clearly does provide electronic auditing for data file entrance and tracking report trends. Recently an employee of a San Francisco RCE supplier was indicted for allegedly embezzling public funds from another agency. The individual was tracked electronically by his key card and electronic auditing. The DCA believes as electronic tracking and auditing capabilities for third party security increase, public revenues due for municipality collection will continue to increase.
Revenue control equipment offered to the parking industry in the market place today lacks implementation of third-party secure revenue data collection, retention and reporting. Since most parking equipment is designed internally by and for the parking industry interest, there is an increasing need for the industry to look beyond itself. As one of the largest cash businesses in the world, growing public revenue demands will continue to direct scrutiny to the largely untapped reservoir of cash flowing through its hands on an hourly basis.
The ordinance designated the Department of Consumer Assurance as the city agency required to seal and approve parking revenue control equipment (RCE) mandated for both public and private parking facilities in the city. In order to fulfill the required data reporting and data security features of the ordinance, DCA defined RCE system operation requirements. RCE systems' requirements were written into regulations specifying RCE system features to function assuring accurate, third-party secure data collection and audit reporting.
The DCA has an implicit interest in how the marketing of parking revenue control equipment will impact the industry. Parking industry operators and equipment suppliers determine how they will market their products. It is in the interest of municipality regulatory agencies, the public and the parking industry that marketed products comply with regulatory requirements in a user-friendly secure data collection manner.
San Francisco is unique in its parking operations. Secure revenue reporting has not been required previously and problems occurred. Largely unregulated, the parking industry has evolved over decades into myriad operations. These operations range across small private flat lots, large and small garages, retail lot facilities, state right-of-way land lease lots, hotel and pier parking, as well as city-owned privately operated facilities. As a result of the ordinance, secure reporting technology has become available and adaptable at reasonable costs for each of these operations. "San Francisco is an innovative city. This program is helping us streamline the collection of tax revenue and increase consumer protection. I hope to see other cities follow in our footsteps," said Frieders.

This article was provided by the Department of Consumer Affairs of the City of San Francisco. Dave Frieders can be reached at dave.frieders@sfgov.org

Article Abstract from January, 2003




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