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'I'HE HO~10p."A8LE CITY cotrNCIL
Palo Alto, CalifcLnia
Attention: Finance conut'littee
RESPONSES TO FINANCE CO~J_'t'L~_g ____ QUES'1'IONS REG7l.RDING .PARKING CITAT_~_.oN
PROCESSING PRoa~
Members of the CouPcil:
Report in Bri~:t
During the 1'.pril 27, 19':;1, Fi!'.a.nce CO!":',\:',itt.e.e r.e.-et.ing to revie'ill the
1993-94 inter 1m budget issues (CMR: 2 53: 93). Et3t f "''35 directed t.o
provide detailed information on the cast for the proposed in-house
parking citation processing program, "",i th a co:mpari s-on to .... hat the
cost 'Would be if the service_s -.... ere once asa in contracted out.
!.~_:-house Proce:ssi~st
Staff proposes that t",-o and one-half emplcyees be !l ired to continue
the handling and processing of parking citatior.s. Statf ""auld
assume permanent responsibi 1 i t~~ for over-the-cour.te:!" customer
inq'.lirie.s and payme.nts, t€',lepnone and mail inquiries, !1!ail payment
processing, data entry. scheduling of court datE-s, and responding
to customer complaints.
Approximately 55-r enO parking citations are processed 3.nnu~lly
(based on one-hQur parking}. To assist in managing the duties
d$scribed aboye staff entered in-:o a contractua 1 ~greement , ... i th the
City of Ingle',.:ood to maintain the citation d~tabase, retrieve
vehicle registratio;). information fron the Departrr\ent of Motor
Vehicles (DMVj. and delir:quent notices, The cstirr.a~ed an!",ual cost
of the contract with Inglewood is $38,500. The total cost for in
house processing is $168,237.
CMR:279:93
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""'""hen p~r)cir-,g citc!lltion ';!ru-:::e:ssing is c;:-ntracted to a f ..... l1-service
vendor, tho:l vendor maintains the citation database, processes over
the-~ounter payments, mails dellnquent notices, obtains vehicle
registratior. information fr0:r.l OMV j records adj udication nearing
infonlation and responds to customer cOr:lplai:"lts via r:,ail or
telephone.
At this time, th-ere is only one regi.onal full-service vendor
capable of ~.eetinq the City's total needs for processir,g parkjng
citations. Ho,,",ever, the cit}" is not cet'tain that the vendor 'Will
be interested in r-cspcndin:)" to the City's request for a price
quote~ Additionally, the vender's paJ'1!1ent office is located
outs ida of Pa 10 Alto" St:!ff surveyed other cities of cO!nparable
citation iss~ance volume, serviced by this regional vendor, to
obtain an estimated cost of contract citation precessing.
cost Comparlsc;m
staff {2. 5 positions~
Data process i Tlg
(City of Inglewood~1
Non-salary costs
Total in-house Cost
cost per cite
In-House
Cost
$119,737
38, ~,OO
10,000
$158,237
$3.06
pull-service
Ven~or Cost
$115,500
$2.10
Net
Difference
$ 52,737
In-house parki r'1g processir,g costs an addi tiona 1 $ 52.737 J compared
to a full-service verJdc.c. In C,"1?,:253:93, the additional amount ;"'as
noted as $94,077 (see ~"ttachn.ent A). The difference bet\oi"e~n the
tva net amounts is $41,340 and is comprised of these two adjust
ments: First, the revised vendor cost reflects an increase from
$85,410 {the projected amount of the Westco.rnputil contract pt'ior to
termination .:If the agreement) to $115,500. the est.imate given for
the remaining potential vendor, a difference of $30,090. Second,
the $11,250 Dataticket contract to collect on out-of-stat~ delin
quents ('Which is part of the $94 ~ 077 prior net difference) is
needed whether staff processes cltat~ons in-house or not. There
fore, this amount was reduced from the above in-house cost
calculation. The bottom :line number is an additiol"'.al cost to the
city of $0.96 cents per parking citations issued, at the 55,000
citation level, which is the level expected if one-hour parking is
kept ir,stead of the temporary t\llO-hOllr maxj",uro.
CMR:279:93 2
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Potential Revenue __ '2.tt's __ et
It is important to note that all of the per-citation costs are
based on the City/s curlent regulation for one-hour parKing in the
downto ...... n area. These regulations ha,,'e been extended since NC'vember
25, 1992 to allow for t ..... o-hour-parklr;g, pending a final decision by
the Cc·uncil on a bJo-ho:.lr do' .... r.tcW'rl parJr.l:1g proposal, scheduled for
July 12. 1993. Prelirnin~ry estimates indicate th~t the citation
velum"", could. decrease by up t.:l 25 pe-rcent if t-.... o-hour parking is
approved, vhich would increase the net cost per cit,'ltion according
ly.
Staff has ga ined bet tar control of parking ci tat ion operations
including delinquent notice rtlailings, DMV transmissior., and faster
inp ... t of information. Consequently, steff feels confident that
collections will be improved under in-house processing. It is
difficult to estimate accurately the dollar benef i t from increased
collections, because staff h~s been processing a large backlog of
delinquent citations in the past 12 months, ... 'hich distorts revenue
projections. HCI..'ever. t-asc-d Cl!1 the City Auditorls report of
Westcomputil's operations for about one year, failure to mail
delinquent notices and place DMV holds in a ti"rlely manner has cost
the City approximately $100,000 in revenue. The mailing of
delinquent notices in a ti:mf'.ly 1!',anner is critical i parking
citations like other receiVables respond to .:lggressive collections
efforts. Even though in-heuse processing is $0.96 cents higher,
the attained accountability of a~sets and the superior level of
c1.l.storeer service being provided allows for sta_ff to j'.lstify the
proposed $168,237 for in-house processing.
~~~~~!~.U:l;l~Y~SUbrnitted'
<=-~_~P.R'E.z
Final:cial Anal}o'st
'----"V' il r" k~/~lr~!
Director of FinanCE?:
Attachment
Related Staff Reports: CMR:253:9J
CMF:279:93 3
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o
"I
$3-94
$3-94
O!!JG1rv.o.t
/JIJOGET
PIfOPOSEI)
BUDGET $5,410
0
0
11,250
0
~S,SOO
0
l~r,737 ----------.-.
$115,410
$94,077
tl 1 S,4$}