Friday, November 12, 2010

Letter to Borough Council Re Parking

November 12, 2010

Phoenixville Borough Council

Re: Downtown Parking

Dear Council Members:

I write with some further thoughts on this subject, following the demise of the Parking Authority and the Borough’s resumption of responsibility for parking both on-street and in the Borough’s parking lots.

A. Real Numbers

I have a copy of the ‘Parking Authority – Initial Overview” presented by the Manager. I was not at the meeting and the document contains no explanatory narrative, so that I have had to interpret it on my own.

1. Revenues

The Overview shows annual meter income of $48,000, permit income of $14,400, and violation income of $36,000, for an annual total of $98,400. By contrast, the total revenue estimates presented in last year’s Harman study were of the order of $302K–330K (see Harman report, pp. 25–26). The difference is nontrivial, so I think it pays to look closely at the data underlying each estimate. Please note that the Overview and the Harman study use different rates. The Overview I believe uses $1 per hour for meters and $10 per month for permits. Harman used $0.50 per hour and $20 per month, respectively. The Overview does not state the days and times of enforcement; Harman assumed 60 and 66 hours per week, respectively. The current lot signage says 9AM–9PM, Monday through Saturday, which is 72 hours per week. Harman assumed 50 weeks a year.

I would not be surprised if the Overview were closer to reality than Harman, especially having seen what the lots look like most days. I assume that the Overview figures are based on what we now know of the actual receipts of the Authority (though I don’t know that for a fact).

Based on the Overview’s projected revenues, I think it’s helpful to calculate what they imply in terms of parking lot utilization.

According to the Borough’s website, the lots have capacities as follows:

Lot -----------------------------------------------Capacity
Mill Street (metered)----------------------------------78
Main & Bridge (metered)-----------------------------37
Taylor Alley (mixed permit/metered)--------------97
Prospect Street (mixed permit/metered)--------- 91
North Main (employee permit)---------------------175

Metered only-----------------------------------------115
Mixed permit/metered-----------------------------188
Permit only-------------------------------------------175
TOTAL PARKING SPACES-------------------------478

For the purpose of occupancy analysis, I have assumed (since I don’t have the breakdown) that half of the mixed-lot spaces are metered, the other half permits. That would result in a parking complement of 209 metered and 269 permit spaces.

Metered space occupancy based on the above data is then as follows:

Total available : 209 spaces ✕ 12 hr/day ✕ 6 day/wk ✕ 52 wk/year =
782,496 space-hr/year

At 100% occupancy at $1/hr, the gross annual meter revenue would be $782,496. The assumed meter revenue of $48,000 implies an occupancy of $48,000/$782,496 = 6.13%. Put differently, it means that the lots are presumably 93.87% vacant. If that’s what we really think, then exactly what is the purpose of metering the lots? Turnover of spaces?

The above calculation is of course sensitive to the assumption I made about the split between metered and permit spaces for the two mixed lots. The metered spaces must, however, be between 115 (i.e., the mixed lots are really all permits) and 303 (all the mixed-lot spaces are metered). The calculated occupancy rates based on these two other capacity figures are then 11.15% (88.85% vacant) and 4.23% (95.77% vacant).

Permit space occupancy is calculated as follows:

Total available: 269 spaces ✕ 12 months/yr = 3,228 space-months/year

At $10 per space per month, full occupancy revenue would be $32,280. The $14,400 estimate in the Overview implies an occupancy of $14,400/$32,280 = 44.6%. Again, if you vary the assumed total number of permit spaces, the calculated occupancy rate changes. It’s between 68.57% and 33.06%.

In short, what’s the parking issue that we are trying to manage and do we have a workable approach?

2. Costs

The Overview projects recurring annual costs at $98K; Harman shows $132K. One of the major cost differences is that the Overview does not include any supervisory costs, while Harman assumed a three-quarter time administrator at $31K. If administration is simply added to the responsibilities of a present staff member, there is no marginal cost, though there is a cost in ‘grey’ dollars. Since we allocate management costs elsewhere in the Borough, I think the parking function ought to be allocated its share of those costs.

The only other comment I have about costs concerns the credit card transaction fees, which are estimated at $20,400 per year. I assume this relates primarily to the use of credit cards at the meters. The estimated total meter revenue is $48,000. Since some of that is in cash, credit card meter payments must be less. Paying $20,400 in fees on less than $48,000 in revenue is not reasonable, in my view.

B. Past Bad Practices and Their Continued Consequences

As I am sure you must be aware, during the time that the PPA was collecting meter revenue and issuing violation notices (roughly May through October 2010), there was no Borough ordinance in effect establishing metered parking in the Borough’s lots. Since there was no meter ordinance, it was also impossible to commit a metered parking violation. Section 7 of Ordinance No. 2153, enacted January 15, 2010, eliminated the entire part of the code on off-street metered parking (copy of Ordinance No 2153 attached).

I suggest that the PPA’s actions in demanding and receiving meter revenue (via the signage and the parking meters) in the absence of an appropriate Borough ordinance constitutes the crime of theft by deception. To the extent that credit payments were obtained, I think there may indeed be violation of the Federal mail and wire-fraud statutes, since the credit card data for the fraudulent charges was undoubtedly transmitted to the credit card issuers by interstate wire and since many of the customer’s ultimate credit-card payments were foreseeably made by mail or wire. (If you think that mail and wire fraud are a stretch, read the United States Supreme Court’s decision in (no kidding) Schmuck v. United States, 489 U.S. 705, 109 S.Ct. 1443, 103 L.Ed.2d 734, 57 USLW 4362 (1989) (copy attached)).

I suggest further that the issuance of a notice of violation in the off-street lots constitutes a threat of prosecution under a (nonexistant) ordinance and that the obtaining of funds in that manner constitutes the crime of theft by extortion. This could also be a civil rights violation, since the PPA is a governmental entity and was in any event acting under color of law.

If the receipt of the underlying funds (parking and violation revenues) were thefts, the receipt by the Borough of such funds from the PPA, knowing or believing that the funds were stolen, is, of course, the crime of theft by receiving stolen property (unless the Borough is holding those funds in order to return them to their true owners).

All the technicalities aside, what happened is that the PPA took in money to which it was not entitled. The PPA, however misbegotten, was a creature of the Borough. I suggest that Council now needs to make things right. In the case of credit card payments, the Borough should have the information needed to credit those payments back to the customers. In the case of paid violation notices, the Borough should have at least the vehicle plate number, which will allow you to determine the owner’s identity and address, to which a refund can be directed.

That leaves the matter of what should be done about those (the PPA and its Executive Director) who created this situation. Thanking them for their service is not what I’d have in mind.

I hope that you will take this seriously and act accordingly.

Yours very truly,

Richard A. Breuer


JW said...

and what of the $100k loan that was made to the Parking Authority that, according to Handwerk's recap of last week's meeting, is now being paid off by the borough?

The Chicken Cacciatore Project said...

The $100K loan was guaranteed by the Borough from the beginning and thus has to be repaid by the Borough, no matter what the Borough chooses to do about parking.

Let us not forget how emphatically Mr. Cassidy and the Authority stated that they could easily repay the loan from their parking revenues. We now see how that turned out.

The only people in this whole affair with any brains were the bankers, who insisted on the Borough's guarantee. They didn't intend to lose money on the loan.

Thanks to the PPA and the Council, the six-figure loss falls squarely on the taxpayers.

A Phoenixville Taxpayer said...

Thanks for the run-down, Richard. (Too bad you're not on Council anymore).

$100,000 + to be found somewhere. Where? The same place the Phoenixville Area School District will find there $30+ million dollars. - The taxpayers of Phoenixville.

We taxpayers knew that the Parking Authority and pay to park would not work. It didn't work in the past and it ain't gonna work in the future. Unless a multi-level parking garage is built.

What now? Taxpayers go back and see who was on Council when the Parking Authority was created. See who voted for and against it. Then, if any of those who voted for it are still on Council, remember their names for the next election.

Ed Naratil said...

Way to go Richard. Now I guess we'll have to refund all the parking fines that had been collected placing us further in the red.

And, to top that off, perhaps individual or how about just one big class action law-suit.

Just when I thought things couldn't get any worse..............

The Chicken Cacciatore Project said...

Reply to "A Phoenixville Taxpayer" at 2:29 PM.

Thank you for your comment. I really do, however, disagree with you about building a multi-level parking structure. The costs of such a thing are, I believe, $20K+ per space. Just look at the present mostly empty parking lots. At least we didn't spend a fortune buying them. A garage, on the other hand, would have been a financial disaster on the order of an atomic bomb. (And no, 'duck and cover' would not save you.)

Ed Naratil said...

Copy of letter to Editors of The Phoenix & The Mercury - also sent to Borough Council & The Mayor:

"For the first time since the lots were metered I had occasion to use one of them on Saturday night for a show at the Colonial Theater.

Amazing - all downtown lots were almost full. Finally found one of two open spots behind the Dollar Store.

No signs directing me to the device that accepts payment.

I saw a crowd of about 15 people huddled around the end of the traffic island on Taylor Alley.

What's going on? A bunch of rowdies? Someone hurt?

No, just a lineup of people trying to figure out how to operate this pay box in the dark.

Finally a gentleman with a flashlight helped out.

Now, I left home with two nice new, crisp, dollar bills to pay for two hours worth of parking even though I only needed 1½ hours worth.

When I finally arrived at the metering device (I was the last one in this line), the gentleman holding the flashlight informed me that the device would not take dollar bills. Only nickles, dimes, and quarters. Sorry, I don't carry $2.00 or more in change in my pocket. I weigh enough already.

He then informed me that it will take credit cards. Yep, except for the one in my wallet. The sign signifies that Discover Card is acceptable, but each time I tried it the machine said "Denied". The gentleman said: "That's normal - even though the sign says Discover Cards will work, they don't."

So after spending ten minutes in line and trying to get the machine to work on the credit card I finally parked in the District Justice Building lot. FREE!

Just how could the Borough install metering that will not accept dollar bills, dollar or half-dollar coins? And no lighting? Perhaps the parking should be free from sundown to sunup? The Parking Authority must have gotten a good deal on these devices. Must be that the company that manufactured them couldn't find any other place dumb enough to install meters with such limitations."

A Phoenixville Taxpayer said...

Has any official of the Borough responded to your letter?

The Chicken Cacciatore Project said...

I received an email from one council member acknowledging my letter.