Detroit’s municipal parking department is under fire for mismanaging Park-Rite Detroit, the entity that operated the city’s lots and garages, for offenses including poor or lacking record-keeping, dubious expenses, and comingling of funds, according to CBS Detroit. The recent independent audit undertaken by the city’s inspector general has not yet been publicly released, but was obtained by local news outlet WWJ Newsradio.
The September 23 report examined the city’s parking department’s management of Park-Rite from July 2011 to April 2014. As a result of the audit, the city fired Park-Rite as well as 25 employees, including 14 union workers.
One of the major findings, as Steven Hicks, president of Teamsters Local 283, explained to WWJ, was a major mismanagement of salary funds: “One issue is that they paid one employee making $12.50 an hour for 6,400-some hours with no time cards.” That’s a lot of overtime: Most full-time employees clocked in around 2,000 hours yearly. The auditors said that they were unable to account for all expenses due to missing or incomplete records.
Additionally, Park-Rite mixed personal funds with department revenue, and overbilled the municipal parking department by almost $6,000 to cover bonuses given to Park-Rite employees. (Park-Rite later paid the city back for the bonuses.) Yet the parking department is also culpable: Detroit Auditor General Mark Lockridge noted that the department was not aware of the contract terms with Park-Rite; plus, the department did not document performance nor adequately oversee reimbursement payments.
Park-Rite, according to the company’s website, was founded in 1975 and most recently operated 60 locations throughout Detroit and downtown Detroit, as well as Ann Arbor, and Royal Oak, servicing more than five million cars annually. The company’s stated mission is “to operate a parking-management company dedicated to integrity, growth, professionalism and leadership. And above all, provide a quality service to both our customers and our clients.”
In response to the audit, Michael Aubrey, president of Park-Rite, released a statement: “While we take issue with the findings in the Auditor General’s report, we acknowledge our documentation could have been better. Despite those challenges, the report found no instances of theft or malice on Park-Rite’s part. We are proud of the fact that since being awarded the contract in 2011, Park-Rite doubled the parking department’s revenues and tripled its operating income.”
Meanwhile, parking department director, Norman White, wrote in response to the audit: “The majority of these contract violations occurred because a failure of oversight and responsibility for monitoring contract performance and because the [parking department] garage system relied on a low-tech, labor-intensive structure that invited human error, inefficiencies and deviations from contract requirements,” reported the Detroit Free Press. “Both of these issues have been addressed by the department through major reforms.”
The news comes on the heels of potential reforms to Detroit’s parking landscape. Earlier this summer, Detroit Emergency Manager Kevyn Orr set in the works plans to privatize the city’s municipal parking system. Currently, those plans are up in the air as Orr comes to the end of his 18-month term.
An automated system is currently being installed at the city’s parking garages.
Want to learn more? Read the full audit, available here.