Its getting a bit Hairy out there


Its getting a bit Hairy out there

To summarize. The city of San Francisco, my major whipping boy in the parking industry, is trying to do something right. They are attempting to track the income in parking garages so they can collect the appropriate taxes.  First they tried to write a specification for equipment that could be audited (like gas pumps, for instance). Of course that was yelled down by operators and manufacturers.

Then they said "OK, here is the requirements we have, we’ll let the operators certify that their equipment meets these requirements. The operators quickly "certified" and all was right with the world.  But whoops — now the operators are being required to give the city certain information with their tax returns, information that would be readily available if they ran their garages the same way they did 15 years ago (by hand) or if they simply hit a couple of buttons on their "certified" equipment.

Of course, now they are whining that the information required is excessive.

Here’s a comment I received from a friend knowledgeable about the operators "plight." 

The operators and rightfully so do not want to have to
continue spending their money in reporting to the city and they should not have
to. Think about it, there are 600 locations in the city of SF so the report
would be 600 forms full of information that is meaningless to a jr city clerk
until they spend the time to analyze it, even then to most city clerks it will
still be meaningless, so 600 locations X 12 months =7,200 reports doing
nothing.  Instead of making the operators report it every month the city
should just make sure that the operators know that it is something they should
have available it they are audited.  The good operators will all have that
information because it is standard stuff.  The bad operators may not have
it and if they have it, it will not be correct but the jr auditors will feel
good that they successfully completed an audit.

Actually, they report every 3 months so there are only 1800 reports.  Its a one page sheet. It has information that is typical of the reports coming from every garage in the country. Number of tickets issued, number returned, amount of money collected.  Why shouldn’t the city know these numbers, since the amount of tax is based on them.

I might add, that the city is going to charge the operators for "lost tickets".  And there’s the rub. Operators know that their lost ticket count is out of control.  That if they report the number of tickets collected and the "junior clerk" simply goes to the operator and asks for the tickets to count them, they will be screwed since the don’t want anyone to know just how many tickets are ‘lost’ during an average month. 

He goes on:

Out of the thousands of taxes there are in this country,
none, not one, requires that level of reporting by the operators or businesses.

I’m not sure I have the numbers right but probably not far
off.  Fifty percent of the operations in town are managed by legitimate
companies that pay their taxes and try to comply with the cities constant demands.
While the other 50% of parking companies and businesses that have parking do
not comply, do not spend the time and money to comply and also intentionally
underreport on their taxes.  So the other 50% or more likely 30% do not
comply, are not spending the money to comply, are underreporting their parking
taxes, payroll taxes, business taxes, and any other taxes that everyone else
has to pay giving them a very large competitive advantage over the legitimate
operators.  So the legitimate operators spend more money trying to comply
while they get the pants beat off of them by the people who are cheating.
We all know they do not do a great job in accounting but it’s not the cities
job to try to micro manage 600 parking locations.

There are not one percent of the locations in the country
that uses the electronic data to produce their financial reporting.
Remember what Federal told me, they only believe that 7% of Scan is used by the
operators.  The equipment, installation, training, and ongoing maintenance
is not good enough to get consistently accurate reporting therefore the
operators are afraid to use it, or are not willing to spend the time to make
sure they can get the equipment up to a useable level of accuracy. So here
comes the city asking them to report using equipment that (at least in the
operators mind does not work) and the operators feel they can not use.
This would mean they run the risk of reporting to the city data that is not
supported by their accounting if they were ever audited.  This could make
it look like they were intentionally underreporting when really it is just
crappy accounting on the part of the operators accounting staff and the
equipment that is not reliable.   

All of this to say that; to say this is all because the
operators are trying to hid something is a great oversimplification of the
problem.  What you are seeing is SF goes to the core of the issues of our

  • No one has procedures so we continue to reinvent the wheel
    with each new hire.
  • The equipment does not work with any degree of accuracy
  • The management accounts don’t give the operators enough
    budget to try to make everything work.
  • The management accounts (like the city of


    and many others never required the
    operators to produce accurate reporting so the operators never felt the
    pressure to perform.

  • The industry is full of people who are never going to report
    accurately or spend the money to run professional operations and owners will
    continue to hire them.  Makes it hard for professionalism to be a real
  • We have a number of companies that are paying high rents to
    get properties and are using the operations for money laundering.

All of the above makes it difficult to attract
great new people to our industry so we continue to have less than stellar

Sorry, I just don’t buy it. Everything you say is true, but I can’t believe that the operators can’t fill out a one page form with ticket counts. If they don’t know the ticket counts, how can they run their garages. Isn’t this information that’s reported every day up and down the reporting chain of the operators?  What’s so hard about copying the numbers onto the city’s forms.

Oh, yes — I don’t know about your tax returns, but I pay a guy a lot of money to prepare mine, and they run hundreds of pages.  This reporting requirements is lightweight.

I"m meeting with my parking friends next week in Temecula.  This topic will be on the top of our list for discussion. Just how much can or should be required of an operator?



John Van Horn

John Van Horn

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