Miami Beach loses $19 million in parking fees

September 24, 2014 | 0 Comments

Although the government sector was the only one among other sectors in South Florida to contract in 2013, suggesting strained budgets, the City of Miami Beach has failed to collect almost $19 million in revenue from parking fees dating twenty-five years back.

Miami Beach parking officials have misplaced an awful lot of cash. From Infrogmation.

City staff discovered the oversight during a review of Miami Beach’s “fee in lieu parking” program established in 1989. The program allows developers unable to provide sufficient parking for new businesses to instead pay a one-time fee for each parking spot they can’t offer. The fee is currently set at $35,000 per space.

Existing business that grow beyond their parking capacity—for instance, if a restaurant adds more tables, thus attracting more cars to its lot or nearby streets—are also charged an annual fee of $700, which they must pay each year that the additional parking is needed.

But in an effort spearheaded by assistant city manager Joe Jimenez and deputy planning director Carmen Sanchez nine months ago, public employees turned up problems with twenty-five accounts during a review of the program. That number only grew, reaching 180.

It wasn’t the first time that the missing funds had been flagged. Internal audits in 1997, 2003, and 2010 had also identified the issue, but the city did little to nothing to correct it. Administrative inaction allowed the uncollected fines to balloon to $18.9 million, an amount that could have paid for two 500-space parking garages in a town known for its parking deficit.

“Management responses for corrective action did not have completion dates and there is no evidence that significant and deliberate steps were taken by any of the departments involved to establish the appropriate checks and balances to prevent recurrence or initiate invoicing of recurring fees to prevent further loss,” staff wrote in a memo.

Official reported their findings to the city commission last week. Commissioners reacted by asking staff to devise a plan to first collect money inappropriately paid to escrow funds. Large bills—some totaling hundreds of thousands of dollars—would be targeted next.

The city could try to go after older fees, but the statute of limitations on unpaid debt is five years, said city attorney Raul Aguila.

Commissioner Jonah Wolfson raised concerns about small businesses that cannot react to unexpected budgetary burdens as easily as companies with larger profit margins.

“Let’s go after the low-hanging fruit first,” said commissioner Deede Weithorn. “And every single amount of money next.”

City staff will present a collection plan to the commission at its meeting next week. In the interim, thirty-four recurring accounts have been invoiced, with all active accounts to be invoiced when the next fiscal year begins on October 1. Permitting software that tracks the fines has been updated, and staff has been hired to oversee special revenue generators like the parking-impact fee program. Building permits and certificates of use will no longer be issued until the fee has been paid, either.