Letter to the Editor: Outsourcing Parking Enforcement

Letter to the Editor, 

On Sept. 11, the City Council will decide whether to put out a Request for Proposals (“RFP”) for private companies willing to administer the city’s parking enforcement program. The reasons for the proposal are twofold: (1) to reduce the city’s on-going salary and pension obligations, and (2) to increase revenue.  

Regarding salaries and pensions, you may have already heard some of our Community Service Officers (we used to call them “meter maids”) cost us more than $90,000 per year, and this is absolutely true. Over the lifetime of their employment with the city, the pension contributions and medical costs for these employees will cost us, on average, nearly $300,000 apiece. All of these employees can potentially retire with 80% of their highest year’s salary at age 60. How much do you think they currently contribute towards their pensions? If you said “Nothing,” you’d be right. Moving to a private partnership would remove these legacy costs from our books and drastically reduce the city’s on-going salary obligations. By the way, these savings don’t take Workers’ Compensation and liability claims against the city into consideration either.

Did you know we also currently assign a police lieutenant to manage the Community Services Division (i.e., parking enforcement program)? We do. In times like these when staffing and resources are tight, wouldn’t it make sense to move responsibility for this program to a private partner so we could free this experienced, well-trained officer to do more direct “police” activities?

Regarding revenue, the City of Newport Beach recently outsourced administration of its entire parking enforcement program and its experience is a useful example. Newport’s revenue from its parking meters hovered around $2.5M from 2006 through 2010. Hermosa’s revenue from meters is projected to be approximately $1.8M for 2011. In Newport, the private partner upgraded the city’s meters and infrastructure with a nearly a 30% increase in revenues in the first 10 months of the partnership. Given our current revenue projections, this would equate to more than a $500,000 revenue increase for Hermosa Beach. To put this number in context, we budgeted approximately $700,000 for repairing our streets this year, and if the Council chose to do it, we could use this new revenue to increase our street-paving budget by 80%.

Moreover, our newly-elected city treasurer recently identified myriad problems with the administration of our parking enforcement program (ER, “Parking Meters Declared Unreliable” May 10, 2012) that would be immediately addressed by conversion to a private partnership. The City would no longer be responsible for equipment maintenance, coin collection, or managing various accounts the treasurer identified as problematic.

Finally, some say this is about preserving “good” jobs at the city, but it isn’t, and it shouldn’t be. Part of our RFP will require the new private partner give first priority to current city employees, so no one who currently serves the city will lose their job.  

This should be about finding ways to use our city’s resources more efficiently, and limit our long-term legacy costs. Hopefully the City Council will take advantage of this opportunity to do both.

Kit Bobko
Hermosa Beach Mayor Pro Tem