More Money Needed To Monitor Santa Monica's Credit Card Parking Meters

Friday, 22 Mar 2013, 9:32:00 AM

Parimal M. Rohit

Santa Monica’s credit card-friendly parking meters are costly to operate. A five-year contract
for a company to provide processing services is now worth more than $6 million.
Photo by Mitch James
Santa Monica’s credit card-friendly parking meters are costly to operate. A five-year contract for a company to provide processing services is now worth more than $6 million.

Parking in Santa Monica can be both costly and difficult.

The same could be said of operating all of those credit card-friendly parking

meters across the City.

Council members approved at their Tuesday special meeting

two contract amendments that will cost City Hall an extra $3.6 million to

continue providing credit card processing services for single-space parking


One contract is for an additional $600,000 to

California-based IPS Group, Inc., bringing the total value of that agreement to

$1.2 million.

The second contract amendment is for an additional $3

million to Kansas-based TransFirst Health and Government Services, Inc. That

contract, which is for five years, is now worth $6.35 million.

According to City staff, due to the increased use of

parking meters with credit cards, City Hall’s operating costs of those meters

have also increased. Specifically, City Hall’s operating costs have shot up by

$1.4 million since 2011.

The amended contract will also include an additional

$150,000 to IPS Group to replenish battery meters and perform other routine


Ever since City Hall launched a trial program of credit

card parking meters, usage of such meters increased from about 30 percent in

2011 to 60 percent of all transactions today.

According to City staff, an average of 1 million

transactions per month occurs at single-space parking meters. Based upon City

Hall’s statistics, about 600,000 of those transactions involve credit cards.

With the increased usage of credit cards at parking

meters, City Hall has had to pay IPS Group an additional $450,000 per year and

another $1 million annual in credit card processing fees to TransFirst Health

and Government Services.

IPS Group is primarily in charge of maintaining the

meters. TransFirst Health and Government Services oversees each transaction and

collects a per-charge transaction fee. Under the original contract, the firm

collects about 35 percent of transactions involving credit cards.

 In 2011, City Hall converted all 5,967 on-street

parking meters to credit card enabled meters operated by IPS Group. The

technology of the meters included sensors providing real-time parking

information to drivers who had a mobile application on their cell phone. The

same info was also available on the City’s website.

IPS Group was selected in January 2011 to assist City

Hall in its trial program “to test new single-space on-street parking meters

with electronic payment options.”

According to City staff, IPS Group “was the only company

that could deliver a functional single-space product.” They also installed

single-space meters with credit card capability in Los Angeles, Beverly Hills,

and West Hollywood.

A third company – Parkmobile – had its agreement with

City Hall terminated, saving Santa Monica $250,000 annually. Parkmobile was in

charge of the pay-by-phone service option. However, City staff reported only

6,000 monthly users took advantage of the pay-by-phone option, which is only

about 0.6 percent of all monthly meter users in Santa Monica.

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