Auditor: Aspen’s actual parking loss was $230K | AspenTimes.com

Auditor: Aspen’s actual parking loss was $230K

Karl Herchenroeder
The Aspen Times
Cale America workers Dan Culliton and Steve Rochon install one of Aspen's new parking meters at the corner of Original Street and East Hyman last winter. The City spent about $600,000 on the new meter system following roughly $800,000 in revenue losses due to a glitch with the previous system. On Monday, city council discussed raising parking rates during peak seasons as one way to reduce traffic.
The Aspen Times file photo |

Despite the city’s estimate that Aspen’s parking-meter scam totaled $692,000 in declined transactions between 2010 and 2014, a third-party audit of the city’s financial systems claims the actual loss was about $230,000.

This is among the details City Manager Steve Barwick and Finance Director Don Taylor relayed in a memorandum to the Aspen City Council, which will discuss the $48,000 audit Tuesday during a work session. According to the memo, the auditor, Colorado Independent Consultants Network, found the city’s internal controls to be sufficient “with the exception of a few processes that needed to be tightened up.”

The report includes a detailed timeline of how the city handled the parking-meter scam as well as 12 recommendations for improving cash-handling procedures associated with the city’s Finance, Parking, Clerk, Golf and Parks offices. City officials could not be reached for comment after the 67-page report was made public around 4 p.m. Friday. The report can be found at bit.ly/1wMTYXf.

Colorado Independent Consultants Network used four models in determining revenue-loss estimations, with calculations ranging from $348,000 to $0 and averaging $183,000. In addition to the average amount of loss, the firm believes the city suffered $50,000 in processing fees associated with the scam, bringing the total to $233,000. The report notes that the estimations for lost revenue “are more subjective and error prone” than the processing-fee calculation.

In determining revenue loss, the firm studied compound-growth rates, projections based on parking-rate increases, projections based on hotel occupancy rates and projections based on traffic counts. The report finds that scam activity was “likely committed by local workers,” as visitors were less likely to have knowledge of the scam and fraudulent transactions were not as affected by the season as legal transactions.

As recommended by the auditor, the city has filed an insurance claim in attempt to recoup some of the funds associated with lost revenue, processing fees and costs in calculating the loss. However, Taylor states in the report that “there is low probability” the city will receive payment.

In a detailed timeline, the firm believes the parking scam began in January 2012, though the city was aware that it could upgrade its software to end the scam as early as 2009. According to the timeline, in July 2011, a meeting between the Parking Department and City Manager’s Office determined that the $360,000 upgrade was not worth eliminating approximately $30,000 a year in declined transactions.

The report states that Aug. 22, 2014, the Parking Department falsely informed the Finance Department that declined cards were blacklisted based on information from meter vendor Precise Parklink. In early October 2014, the Parking Department found that the Veras “pay by phone” app was not processing payments in real time. This was mitigated by the fact that the app requires a license plate number entry. Parking has sent out 25 collection notices regarding the issue.

By November 2014, Aspen’s parking-meter system had been replaced via council approval, and Parking Director Tim Ware no longer held his position, as he had been reassigned in October.

herk@aspentimes.com


Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.