Tuesday 18 November 2008

I might actually be a source of serious news

I was reading this story on parking meters in the SMH yesterday and I thought, "That's interesting - that's a bit like my experience from last week". My interest was really piqued when I noticed that Shayne Mallard got a mention.

So I looked up the phone number for the SMH and asked to be put through to the reporter, Sunanda Creagh. I was telling her about the problem I had when she said, "Are you Boy on a Bike? Shayne mentioned you to me."

I just about fell out of my chair.

Anyway, I thought I would run some numbers to demonstrate a point.

Let's say that in First St, you have 20 parking spots and 2 parking meters.

From 10am to 4pm, they charge $2 per hour.

From 6pm to 7am, they charge $1 per hour.

Now, if you get 100% occupancy, and no residents taking up a spot, then you get this maths (I hope it is correct):

  • Daytime - 6 hours x 20 spots x $2 per hour = $240
  • Night - 13 hours x 20 spots x $1 per hour = $260
  • Total for 24 hours = $500
I doubt you'd ever get anywhere near that much per day. Not every spot will be filled as soon as it is vacated. Some spots will be empty for hours. Some drivers will park and not pay, hoping to avoid a Ranger. Others will pay for half an hour, but sit there for an hour.

You'll also get some overpaying, with people paying for an hour, but leaving after half an hour, but let's assume that with wastage, resident parking and so on that the actual amount you can collect during the day is 80% of the theoretical maximum - 80% x $240 = $192. You might find in reality that the actual figure is 40% or 25% - I don't know. I don't work for a Council.

During the nighttime period, you might find that the figure drops to 60%, as demand for spots falls off after midnight, and residents return to takeover the spots. That gives a theoretical maximum for the nighttime period of 60% x $260 = $156.

Using those calculations, you'd expect to never get more than $348 from those two meters per day. That comes to $174 per day per meter.

The actual percentage figures must be much lower, because Council took in $27 million from 1320 meters last year, which comes to $20,500 per meter per year, or around $56 per day per meter. That's just an average. Some meters might be coining it, whilst others are barely making any money.

Anyway, back to my theoretical calculations. We have assumed that based on certain "conversion rates" of 80% and 60%, the meters in First St should never take in more than $174 each per day, or $348 for the two of them.

However, back in the Town Hall, a vigilant accountant is running reports and finds that these meters are in fact bringing in $504 per day. Remember that back at the start, we ran the numbers and found that with a perfect conversion rate of 100%, the maximum these meters could make per day is $500. How can they suddenly be collecting $504?

Easy. Charge $2 at night, instead of the advertised rate of $1.

Here's the maths:

  • Daytime - 6 hours x 20 spots x $2 per hour x 80% occupancy = $192
  • Night - 13 hours x 20 spots x $2 per hour x 60% occupancy = $312
  • Total for 24 hours = $504

What I am getting at here is that if meters are charging double what they are supposed to for night time parking, then an anomaly should show up in the reports. If Council is using some business intelligence software like Brio or Cognos, these anomalies should show up quite quickly.

Now, if it is just one parking meter that is wrongly set, you might not spot the anomaly. But if all 1320 are bung, it would show up pretty quickly. You see, the accountants would have run their numbers when setting out the budget, and they would have estimated how much the meters would take, given certain assumptions and variables. Income from parking meters went up 13% last year. Why is that so?

What could drive a jump like that?

  • Higher hourly charges would do it
  • Greater usage of parking spots would do it
  • Installing more parking meters would do it
  • Extending the number of hours where you have to pay to park would do it
  • Fewer resident parking stickers would do it
  • A large number of incorrectly programmed parking meters would do it
Every accountant that I have ever met would be all over an anomalous result like a dog on a bone. Accountants live for outlying numbers - they are the only things that provide some colour in an otherwise grey and boring day. Did anyone bother trying to find out why parking income shot up 13%, or was it just treated as manna from heaven, with the assumption being that lots more people were parking for longer?

I hope Shayne can get to the bottom of this.

1 comment:

kae said...

Were you a journo in the lame stream media surely your story would have been acknowledged by the journo?

Just askin'.