Auditor’s comments on parking

Someone had asked me to clarify some tweets from last night’s City Council meeting.

City Auditor James DelSignore was in attendance, and Councilor Lukes asked him some questions about parking (both in the context of the Hilton Garden Inn/Major Taylor situation and the parking study from last week.)

His discussion begins around 17 minutes into the meeting.

Councilor Lukes asked him whether he decides which departments get audited.  He confirmed that he “essentially use[s] the outside audit firm as my internal auditor.”

DelSignore: “The last time the police and the garages were looked at was in 2007.  There were some comments then, and there were some problems, and a lot of those problems were resolved. …Now there are some new ones.  There is still a delay in processing receipts for the garages, though.  That problem still exists.”

Councilor Lukes asked DelSignore whether the situation of the Hilton Garden Inn owing the city money for the Major Taylor Parking Garage had been included in last week’s report from DPW.  He said it had not.

DelSignore: “I’m not sure who those people spoke to.  It could have been seen if they looked at the accounts receivable provided by the garage administrator and by the city.  So it would have been noted if it was looked at.  … Apparently, they looked at the ledger and the report was all on a cash basis.  It didn’t give light on the period of benefit of the receipts, or the fact that revenue has been generated but hasn’t been collected yet, which is what you’d get in an accrual basis financial statement.”

“The Pharmacy school, for instance, that big receipt that was collected in 2011, the period of benefit for that was five years.  So that big receipt that they accounted as a profit in that one year.  So it was $400,000, it should have been $80,000 a year over the period of benefit.”

“Federal Plaza Garage – I know there’s an arrangement with the Hanover Theater where they get the parking revenue.  It was a way to entice them and to keep them solvent.”

“With the Major Taylor Garage, the Pharmacy School gets some spaces there at no cost over a 30 year period.  So to evaluate the garage and say that it’s not operating optimally should take some of those things into consideration.  Whether they were told, whether they were asked, I don’t know.”

Del Signore was asked about other aspects of the report.  He said that accounting for it as an enterprise account is not a bad idea, and that he had done the same about twenty years ago when there were proposals to sell the garages.

“The Pearl-Elm Garage has always done well historically.  At the end of the year, it has $2.2 million surplus, $1.4 million receipts during the year, and that’s gone on for years.  It does well during the day, not so well at night.”

The City Manager promised some sort of follow-up explanation on the differences between what DelSignore feels should be accounted for, and what the study originally showed.  It may be discussed at next week’s City Council meeting.

I certainly hope at least one City Councilor asks why the Hanover Theater gets to keep parking garage receipts for nights when they have a show, how long that agreement has been in place, and how much that contributes to Federal Plaza Garage’s deficit.

And I hope another one asks how many spots MCPHS gets in the Major Taylor Garage for the next thirty years.

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