“If the new ordinance proves that we don’t have a great shortfall between the amount of money we are collecting and some phantom amount we “should’ be collecting, then I’m fine with that.” Thus San Francisco Tax Administrator George Putris summed up the city law that went into effect in November.
The ordinance replaces a much more detailed and complicated law passed two years ago by the board of supervisors. The previous ordinance, according to Policy and Legislative Manager David Augustine, had become unwieldy and difficult to understand and administer.
“It was felt the law was too specific in its requirements – in the types of equipment, how the equipment was to be approved by the city, and how it was to be audited. The new ordinance is simple, has some of the original requirements, and is enforced by a single agency, rather than a group of city departments.”
According to Putris, the new ordinance is based on functionality, rather than a specific specification for equipment. Equipment required by the new ordinance is readily available on the market from a number of manufacturers, rather than a few sources that had to be vetted by the city prior to purchase. “Most operators can meet the requirements of the ordinance with existing equipment,” he added.
The primary thrust of the ordinance is consumer protection. The original ordinance had its beginnings in complaints from consumers that they were being abused by some parking operators in the city. The new ordinance deals with this by requiring that a receipt (ticket) with entry time, date, location and contact information be presented to every parker when they enter the garage. Then upon exit, another receipt with entry and exit information and money collected must be presented to the parker.
In addition, an audit trail with sequence numbers, either printed on tape or held on electronic media not available for alteration by the operator, is required. This audit trail must contain information about each transaction, including entry and exit times, money collected, tax information, the sequence number and the ID of the employee who processed the transaction.
“There is little question that properly functioning revenue control equipment will help operators as well as the city,” Putris said.
The ordinance sets a 1.5 percent loss number on tickets. If a location loses more than that, it can trigger an audit. There is no penalty for and up to 1.5 percent of the lost tickets, but the audit may uncover a larger problem.
According to Tim Leonoudakis, president of City Park in San Francisco, the operators welcomed the new ordinance. “It was impossible to meet the requirements of the previous ordinance. It was difficult to get equipment approved. It was a mess. The city went to outside consultants and came up with a system that we can live with, but also sets standards and a structure for better reporting. It is good for everyone.”
“There are a couple of issues, as there is with anything,” Leonoudakis said. “First is auditing. I know that the city has funding for additional auditors; however, they need to be schooled in parking. Auditing a garage is different from auditing a store. There are many ways money can slip through the cracks. Auditors need to be aware of these problems.
“In addition, there are issues with placing equipment in locations where no streets, sidewalks or driveways exist. Like a dirt lot. We see many of these in stadium event parking. We need to work with the city to find a way to provide proper information in these locations.
“A valet operation is a good example,” he said. “Over 60 percent of the locations in the city are valet or valet assist. You have to know how to audit those types of facilities. A regular city auditor would be lost in a valet operation.”
The ordinance went into effect in November, but will not be fully enforced until after the amnesty period ends in February. In the meantime, the city is surveying all parking locations to get demographic information, including rates, type of equipment, operator names and so forth. “We understand that we don’t have all the lots in the city listed,” said Linda Trevina, who manages the Tax Administrator’s office. “But our survey will bring our records more in line with what is on the street.”
“I have had an opportunity to read the ordinance,” said California Parking’s Ron Britz, “but I have noted that it requires locations to accept credit cards or other types of electronic payment. That can be a burden on some operations where the rates don’t justify a credit card operation. We take cards on many places, but there are others where the owner has elected not to do so.”
According to Putris the goal of the city is not to set up fines as a profit center.
“We simply want to get the operators and owners to comply with the ordinance. If the equipment is adequate for the operators, it is probably OK with the city. The ordinance was originally for consumer protection, and that’s its focus. Taxes we receive due to it is a bonus.”
As for certification, the operator must certify, in writing and under penalty of perjury, that their equipment and procedures meet the requirements of the ordinance and the unaccounted for ticket ratio. All these certifications and reports are subject to audit.
