Butkovitz Releases Report on Parking Authority’s Operations

Audit Date: September 16, 2009
Audit Categories
  • Performance
Controller: Alan Butkovitz

Executive Summary

For Immediate Release:
Sept. 16, 2009

Contact: Harvey Rice

Butkovitz Releases Report on Parking Authority’s Operations
Controller finds ineffective performance measures
& incomplete lists for contracts & parking passes


PHILADELPHIA – City Controller Alan Butkovitz today released the Report on Operational Effectiveness of the Philadelphia Parking Authority (PPA) that found ineffective performance measures and limited documentation for vendor contracts and airport parking badges.

Ineffective performance measures to monitor operations allowed administrative costs to increase faster than revenue and potential profit. From 2006 to 2008, administrative costs exceeded the PPA’s budget by an average of 13.8 percent a year.

“Without controlling the balance between costs and profits, the Parking Authority has failed to generate excess revenue for the city,” said Butkovitz. “The PPA could have been more profitable if costs were controlled appropriately.

The report indicated that the PPA’s heavy reliance on revenue bonds significantly diminished its profitability. Interest on debt was 43.4 percent of total expenses, on average, for FY 2006-08. The industry average is 28.2 percent.

“The PPA needs to meet goals relative to the industry’s standards if it wants to reduce its payments for interest on debt,” said Butkovitz.

PPA management could not provide a comprehensive list of contracts. In one instance, a $795,000 contract for engineering, design and construction management was not put out for competitive bid, as required by state law.

“This law is to ensure that the Parking Authority is getting its best price from qualified vendors,” said Butkovitz. “In addition, we recommend that the Parking Authority adopt a policy, similar to the city, that all professional service contracts over $30,000 be competitively bid.”

Along with inadequate administrative procedures, it was found that the PPA did not utilize performance measures to properly monitor airport parking operations. Red badges, which allow for free parking at the airport, were issued to PPA personnel without proper protocol.

“An incomplete listing of those who received red badges completely disregards government transparency,” said Butkovitz. “Providing free parking for certain PPA employees or board members creates a potential loss of revenue from payments not being made to the airport parking garages.

Other findings reported in the audit include the following:
-For fiscal years 2006-08 profitability for Center City garages was reduced by total
revenue bond debt service costs of $2.6 million.
-The ratio of total management and executives to total staff averaged 1:5.9. –
Management to staffing ratio for administration was the highest at 1:2.4.
-On-street parking operations revealed that the PPA did not pay $1.5 million to the
City of Philadelphia as required by Act 9.
-Management does not prepare revenue and expense projections beyond one year.