After years of aggressive ticketing practices, a lack of funding provided to the School District of Philadelphia (SDP), and workplace culture problems, including excessive pay and benefits to top officials, as well as patronage hires of family members, friends, and political connections, many Philadelphians have come to feel frustrated by and dissatisfied with the Philadelphia Parking Authority (PPA). Over the years, many of these issues have been explored by the press, and in 2017 the Pennsylvania Auditor General’s Office released audits of the PPA’s employment practices as well as certain financial and procurement matters.
The Office of the City Controller (Controller’s Office) conducted a performance audit of the PPA with two goals. The first goal was to assess the validity of the PPA’s on-street parking expenses for fiscal years 2016 through 2018 to determine if better management of the PPA’s On-Street Parking (OSP) Unit’s operating expenses could increase funding provided to the SDP. The second goal was to determine if the PPA had implemented certain recommendations made by the Auditor General in his 2017 audit reports. The analysis included examining 2019 data, as needed, to evaluate conditions that were updated during the audit period.
Given that payroll costs have the greatest impact on OSP operations, the Controller’s Office evaluated if the PPA’s staffing levels and costs were reasonable. With the help of an expert in parking operations, the Controller’s Office compared the PPA’s staff size to other publicly managed parking organizations across the country. The comparison showed that the PPA’s workforce and personnel costs are inflated compared to on-street parking operations in many other cities. The audit found that the PPA had a higher number of employees per metered space and a higher employee cost per metered space than most of the cities considered. The PPA’s OSP Unit has 15,406 spaces and 651 employees. In contrast, Portland, for example, has 14,000 metered spaces and only 111 employees. Portland generates only $1 million less in metered revenue than the PPA ($36 million versus $37 million).
The outside expert also determined that several of the management positions within the PPA are paid more than their counterparts in other public parking organizations across the country. Analysis of the data indicated that when adjusted for the cost of living, between 83% and 88% of selected comparable positions in Boston, Portland, and Pittsburgh are paid less than the PPA. This analysis further revealed that the PPA’s executive director is the highest paid executive compared to other cities surveyed. The PPA’s executive director receives an annual salary of $210,000. This exceeds the salary of Portland’s Transportation Director by more than $16,000 and Boston’s Commissioner of Transportation and Parking by nearly $91,000. Even more significantly, while the PPA’s executive director is paid at the highest salary among comparable parking organizations, the PPA pays its parking enforcement officers (PEOs) at the lowest rate. Our analysis found that the PPA paid its executive director 4.8 times the annual salary of its PEOs. For comparison, Boston’s executive director is paid at a rate only 2.6 times more than its PEOs.
Auditors also followed up on the Auditor General’s finding that salary increases were given imprudently. Since the Auditor General’s report, the PPA hired an outside consulting firm to review job descriptions and salary levels for non-represented employees. However, the firm recommended new pay scales for non-represented employees that were not comparable with other public sector entities such as the City of Philadelphia, the Commonwealth of Pennsylvania and the federal government. While the new pay scales recommended no salary increases for the two lowest pay grades, the consultant proposed new pay scales that recommended maintaining or increasing salary levels for higher pay grade positions. Despite the Auditor General’s recommendations for the PPA to evaluate its policies and limit salary increases, the PPA adopted the new pay scales in September 2019. In addition to the new pay scales, the PPA also granted a three percent cost of living adjustment (COLA) for most higher-level non-represented employees in 2019.
Additionally, many Philadelphians have long believed that the PPA’s employees are hired due to patronage. Auditors used a random sample of 107 employees who work in the on-street parking and support units to determine how prevalent political patronage was in the units. Of the 107 employees sampled, we found that 25 employees, or 23 percent, either held political positions themselves or resided with someone who did. Specifically, 21 employees were or lived with a committeeperson, two were ward leaders, and two were both committeepersons and ward leaders. Our review did not extend to employees who might otherwise have an influential political connection, such as close friends or extended family members. While the review does not address how or why so many politically connected people work at the PPA or whether there were additional familial or personal connections, it does appear that political connections have a positive correlation to employment at the authority.
In response to the Auditor General’s findings related to the PPA’s “closed” hiring process, our audit found that the PPA has worked toward implementing fairer hiring practices. This includes posting available positions on its website in many instances. However, our audit found that these fairer hiring practices were not utilized during the hiring of the current executive director or the chief financial officer. While the PPA did publicly advertise for the executive director position, the person who was ultimately selected for the job did not meet the primary criteria outlined in the job description. Additionally, the PPA did not publicly post either of the positions held by the current chief financial officer. Instead, the PPA retained the services of a financial consultant, who was a former associate of the newly hired executive director, to initially serve as the chief investment officer. At the request of the executive director, the Board of Directors eventually named the consultant to the chief financial officer position.
As the PPA does not seek funding from either the Commonwealth or the City, it is not required to obtain budget approval from governmental entities at either level and is, therefore, not subject to the oversight, transparency, or accountability that either budgetary process would provide. Consequently, no government body questions the PPA’s hiring practices, the large size of its workforce, or the organization’s salary structure. These responsibilities fall to the PPA’s Board of Directors, which is the only entity in a position to offer such oversight to the PPA. However, our audit found that the Board’s oversight responsibilities are not clearly defined in its bylaws.
Our analysis also looked at the PPA’s operations from the perspective of best practices in the parking industry. During the period of our audit, the PPA still relied heavily on visual enforcement. While the PPA has begun to use License Plate Recognition (LPR), an industry best practice, the technology employed is handheld and still requires parking enforcement officers to enforce the regulations on foot. Reducing the use of manual parking enforcement and increasing the use of mobile LPR technology could result in reduced labor costs and improved ticketing practices. The PPA also utilizes multiple types of parking meters, which can result in costly maintenance. Streamlining the types of meters used would increase the PPA’s efficiency, as well as potential compliance with parking regulations.
We believe that these conditions diminish the PPA’s ability to contribute to the sustained economic well-being of the SDP. Our recommendations to the PPA’s officials for improved management of expenses, and thereby increased allocated funding to the SDP, include:
- Refraining from automatically granting salary increases and COLAs to management employees;
- Creating a leaner, more efficient workforce through workforce attrition and closely evaluating the need for each position;
- Publicly advertising open positions and filling them using a merit-based system that considers the candidates’ qualifications and experience; and
- Engaging in robust public discourse of the annual budget to increase transparency and scrutiny of expenses.
Additional recommendations are included in the body of this report.