Magazine

Attention Operators: 10 Steps to Contract Renewal

Bill Bortfeld


(Former commercial operator -- Ampco and Central -- ops manager Bill Bortfeld is now on the other side of the fence. One of his jobs as parking coordinator for the City of Santa Monica, CA, is to hire and supervise the commercial operators that run many of his 34 parking locations. He wrote this article in response to the PT survey a couple of months ago where operators told the world that they thought that all property owners care about is low fees. Bill begs to differ. Editor)

Parking Operators think that Property Owners care about low fees only when it comes to management agreements. That may be true during the bidding process, but once a contract is awarded, other factors determine whether it is renewed or canceled. These factors are basic business issues:
Responsiveness to Client's Needs.
Familiarity With and Knowledge of the Parking Operation.
Proactive Management.
Quality Control.
Revenue Control.
Initiative and Responsibility.
What it all comes down to is how much attention the parking operator pays to the client's operation and how committed they are to serving the client and creating a successful parking operation.
That means providing excellent customer service, maximizing revenue, maintaining a clean and safe parking facility, managing the occupancy and traffic flow properly, operating within budget, and taking the initiative to implement new programs and procedures that will enhance the operation. Wouldn't all these factors qualify as being proactive?
Conversely, a Parking Operator can be reactive, irresponsible and unresponsive to his client's needs and expectations. How and why? Let's look at some real-life scenarios.
Accounts Receivable
The operator fails to collect monthly parking fees on time and lets receivables accumulate. Keycards are not blocked, and customers end up falling 30, 60, even 90 days behind. Solution: Block all unpaid accounts by the 10th of the month.
Parking Taxes
The operator fails to charge a customer the city parking tax because the customer claims they're a nonprofit organization. Not all nonprofits are exempt from city parking taxes. Solution: Each case should be reviewed and all exemptions documented by a Certificate of Exemption issued by the appropriate government agency. If in doubt, the parking operator should check with the city they operate in.
Parking Fees
The Parking Operator fails to implement a rate change and the client discovers the mistake. The client notifies the operator of the mistake and the resulting lost revenue. The operator denies responsibility and tells the client that revenue cannot be guaranteed. Solution: All parking rates should be reviewed annually for accuracy and market conditions. If parking rates fluctuate by season and day of the week, the Parking Operator should review the rates more often and make appropriate changes to signs, advertising and revenue control software.
Cash Shortages
The Property Owner notices frequent cash shortages and insists that the Parking Operator pay for the shortages. The operator claims the shortages are relatively nominal and within "industry average." Solution: While some laws prohibit the operator from forcing the attendant to pay for shortages, the operator can still take progressive disciplinary action for inaccurate deposits. The operator is usually responsible for all parking revenues collected until they are deposited in the client's account or remitted with the monthly statement.
Financial Reporting
Many Parking Operators brag about their auditing program during the RFP process, but once they get the contract, their financial records and revenue control system turn out to be mediocre. They perform internal audits, but fail to share the results. Or the Property Owner has a third-party audit conducted, but the audit is inconclusive due to inadequate records. Solution: The client and operator should review and discuss all financial reports and agree on an acceptable format.
Disclosure
Does the Parking Operator offer complimentary parking promotions to customers without the client's knowledge? If passes or cards offering free parking are issued as a marketing tool, is it at the expense of the facility honoring these passes? Solution: The operator should obtain the client's approval before offering any privileges that affect the client's parking revenue.
Operating Expenses
Does the Parking Operator charge the client for unbudgeted items or charges for off-site supervision or a customer service representative, but fails to demonstrate any value for these costs? Does the Parking Operator use the equipment, supplies or other resources of one Property Owner for other facilities without reimbursing or notifying the first owner? Solution: The operator should strive to manage operating expenses and charge the client only for legitimate operating costs. Does the Parking Operator wait until year-end to make excuses for exceeding the budget? Solution: Communication and monitoring are key. The operator should monitor expenses on a monthly basis and forecast year-end results by midyear. Potential problems should be identified and analyzed. Then the operator and the client should discuss solutions.
Personnel Management
When the client insists that unsatisfactory employees be removed from his facility, does the Parking Operator use union relations or unemployment claims as an excuse to not remove the employee immediately? Where is the customer service? Solution: As long as the client is paying for the labor, the operator should make any personnel changes requested in a timely manner.
Revenue Control Equipment
Does the Parking Operator take responsibility for the equipment? Are repair expenses high due to vandalism, misuse or deferred maintenance? Are unnecessary service calls made by untrained personnel? Does the operator have inadequate knowledge of the equipment and fail to use it effectively to maximize profits and generate useful data? Solution: The operator should become thoroughly knowledgeable about the equipment and maintain it as if he owned it.
Aesthetics
Maintaining a clean and safe parking facility is fundamental to any parking operation. Does the operator's staff conduct periodic inspections to identify hazards and deficiencies? Do they report problems to the appropriate parties and follow up on corrections? Do they notify customers with signs, barricades or other warning devices? Solution: The Parking Operator should ensure that personnel are trained in inspecting, reporting and maintenance procedures and should maintain detailed records to minimize liability and accidents.
How should Parking Operators avoid making these mistakes? By paying attention to their operation. If the on-site facility manager is operationally weak, upper management needs to provide more support and supervision. This may include periodic property inspections and audits, and surveying customers for feedback.
Fundamental responsibilities need to be fulfilled. Are the proper rates being charged? Are the monthly parkers being billed correctly? Is the revenue control equipment operating properly? Being proactive means looking for, detecting and correcting problems before the client does.
Parking Operators should maintain communication with their Property Owners. When the owner informs them of problems, they should respond with solutions, not excuses. The operator can use their clients' complaints as an opportunity to improve, succeed and maintain a contract or to resist, neglect and lose a contract.
In municipalities, the contract administrator is ultimately accountable to the public. In corporations, the contract administrator is accountable to shareholders.
Either way, the client is responsible for safeguarding assets, and so is his Parking Operator. It is a lot of work for a manager/owner to change operators. The transition brings challenges, mistakes and learning curves. It is not a decision that is made lightly.
If a Parking Operator makes a commitment to excellence and strives for a long-term relationship, his client won't have to consider change. Parking Operators should consider the long-term impacts of their actions and value client retention over short-term profits.

Bill Bortfeld is Parking Coordinator for the City of Santa Monica, CA. He has 11 years of parking industry experience, including seven years in operations for Ampco System Parking and Central Parking. He can be reached at Bill.Bortfeld@smgov.net


Sidebar:

10 places a Parking Operator can lose an account:
Accounts Receivable
Parking Taxes
Parking Fees
Cash Shortages
Financial Reporting
Disclosure
Operating Expenses
Personnel Management
Revenue Control Equipment
Aesthetics

Article Abstract from May, 2005




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