When it comes to parking, the Falls is lost

Independent auditor tells officials city accounting practices are poor

By Denise Jewell Gee - NEWS NIAGARA BUREAU

August 25, 2008

NIAGARA FALLS — The Rainbow Centre parking ramp has been a drain on the city’s budget for years.

Charles Lewis/Buffalo News file photo

City officials also have expressed frustration with new parking meters and may decide soon whether to keep them.

Revenues consistently fail to cover expenses to run the ramp.

Now, auditors have flagged the city’s parking lots and ramp as areas vulnerable to theft or mismanagement after finding they could not adequately track revenue collected by attendants.

Department of Public Works Director David L. Kinney told The Buffalo News last week that his department has instituted new measures since the audit to keep better track of the number of vehicles that use the city’s ramp and surface lots.

But long-term solutions to problems plaguing city parking facilities are still under consideration.

City Council members late last year discussed privatizing the lots. Ten months later, no action has been taken to hire a private operator for the facilities despite the fact that several city leaders agree there needs to be a change.

Robert Kirkham/Buffalo News file photo
Prices, and even the ability for motorists to pay, shifts seasonally and hourly at the city-run Rainbow Centre parking ramp.

“They’re not up to date, the ramps and the lots,” Council Chairman Sam Fruscione said. “When you have an old-fashion system in place, it makes them a losing operation.”

Several City Council members said they are still interested in find-

ing private operators for the public facilities, but they don’t want to rush into an agreement for valuable downtown properties that could have other uses.

In the meantime, Kinney said, he is focused on researching long-term solutions to reduce the risk of theft and increase the efficiency of the ramp and parking lots.

The vulnerabilities at the ramp were highlighted by independent auditors in June after City Controller Maria Brown and Mayor Paul A. Dyster asked them to review how money was handled at the parking facilities.

Auditors from Freed Maxick & Battaglia noted in a report to the City Council that there was a “control deficiency” regarding parking ramp fund revenues. After reviewing a sample of ramp revenues, auditors found they were not able to recalculate the revenue tallies. Among the problems:

• Because ticket booths are open a limited number of hours, customers with tickets who leave after the booths close do not have to pay, and the city can’t account for their tickets.

• Local businesses and hotels that have parking agreements with the city use swipe cards to access the parking facilities, which make it difficult to account for those parkers.

• Records of leftover ticket rolls used in 2007 were not maintained.

Kinney said his department has instituted several changes in the way the ticket booths operate since the auditors found the problems. Additional cash registers have been placed in the facilities to better track the tickets, he said.

The problems were underscored last month when an anonymous letter was sent to city leaders alleging that $7,000 had been stolen from the parking ramp during the July 4 weekend. A Niagara Falls police detective investigated the claim but found no evidence that money had been taken, Kinney said.

Kinney said he is now researching ways to make the system more automated so that drivers can insert money directly into machines as they enter the ramp or a surface lot. That would also make it possible for the city to collect money from drivers who leave after attendants are done working.

“If we’re going to be in the parking business, that seems to be the most logical thing,” Kinney said. “When it’s time for a shift change, you take this vault out. Nobody actually touches the money.”

Several city leaders agree that Niagara Falls ultimately needs to stop running the parking lots and the ramp.

Last year, the city used $686,283.50 in tax dollars to subsidize the ramp’s operations when revenue fell short of expenses. Brown, the city controller, said the tax money supplement is expected to drop this year to $127,300 because debt payments on the building have been reduced.

Revenue from the city’s three surface parking lots do cover expenses at those locations.

Brown cautioned city leaders to carefully analyze any future plans for the ramp.

“I am totally in favor of getting out of the parking business,” said Councilman Christopher Robins. “It’s just like anything. A municipality really should not be in the business.”

Robins said the city has been slow to privatize its parking facilities because several of the properties are connected to other enterprises or could be valuable locations for development.

For example, the Rainbow Centre ramp is actually the shell of the closed Rainbow Centre mall, making it difficult to make permanent changes to the ramp without addressing a long-term lease with Cordish Co. to operate the mall.

Another lot at Third and Niagara streets — where the city paid $1 million to demolish a second city-owned ramp in 2004 — is a property on which city and state officials have tried for several years to drum up interest in developing a retail and commercial building.

Several other proposals to make the ramp more profitable have been discussed but have either failed to come to fruition or didn’t fully address the facility’s problems.

• Former City Administrator Daniel Bristol proposed creating a skateboard park at the top of the ramp, but the idea failed to gather support from Council members.

• The City Council voted to raise the all-day parking fee from $5 to $10 during the summer months in February 2006 in an attempt to boost revenue. Revenue still fell short of expectations last year, and the city has continued to use more than $600,000 from its general fund each year to supplement the operations at the ramp.

• USA Niagara Development Corp. and the city did not win a $5 million Restore New York grant that officials had hoped get in 2006 to build a smaller ramp at Third and Niagara streets that would have had street-level retail and commercial space.

• A trial run of digital parking meters installed on downtown streets last year to collect more parking revenue has been plagued with problems, and city officials are still deciding whether to keep the street parking system.

As city leaders continue to consider how to address the parking facilities, they have suffered in recent years from another parking problem: more competition.

The Seneca Niagara Casino & Hotel operates a free parking ramp and several surface lots for its customers.

Frank Parlato Jr., the manager of a building and paid parking lot across the street from the Rainbow Centre ramp, uses aggressive tactics to usher motorists into his private downtown lot at One Niagara. They include parking attendants who use flags to move drivers into the lot.

Fruscione called Parlato’s business model — which has irked city leaders when his employees have stood in the public right of way — a “highly effective system.”

“It works. If I was a businessman, thumbs up to Mr. Parlato,” Fruscione said. “The lot is continuously flowing. Its turning over.”

If only, Fruscione said, the city lots could attract so many parkers.

djgee@buffnews.com