Rotorua's controversial i-Park parking system cost the district council just over $1.7 million last year, consuming almost 84 percent of its just over $2 million parking revenue.
Paddi Hodgkiss is among those fuming over the cost of the i-Park parking contract in Rotorua. Photo: LDR / Rotorua Daily Post
Despite this, i-Park's drain on parking revenues was not mentioned in Rotorua Lakes Council's 2019/2020 Annual Report.
The council and mayor Steve Chadwick said lower revenues were due to Covid-19, and an i-Park spokesperson said there had been a significant increase in parking compliance since the system was put in place.
The i-Park system was introduced mid-2018 and in February this year, the council waived 2400 disputed parking fines after acknowledging "issues" with the system.
In May, emails released to Local Democracy Reporting under an official information request revealed "absolute and utter frustration" with the parking system, and that the council at one point received about 100 calls a week from people with problems paying for parking.
The i-Park contract price tag more than doubled between 2018/19 and 2019/20, from just over $793,000 to more than $1.7m.
The council released the figures after a second Local Democracy Reporting official information request.
Rotorua Resident and Ratepayers secretary Paddi Hodgkiss said she was "absolutely appalled" about the cost of the i-Park contract and its impact on parking revenue.
She called for the council to apologise for what she believed was the unworkability of the system and its cost to ratepayers.
"You've stuffed up ... it was a wrong move," she said, expressing her opinion.
"I'm gobsmacked. That's a hell of a lot of money."
Former inner-city focus group spokesman and CBD businessman Mike Steiner said he could not see the validity of using the i-Park system given its effect on net parking revenue.
In his view, it was "nonsensical ... just ridiculous".
He believed the system had a "detrimental effect" on the inner city as people were now less likely to shop in town because of it.
"It's punitive and it puts people off," he said.
"We've had a lot of bad comments from the general public about the parking regime, so much so that you almost want to give up."
He said he believed councils were "a law unto themselves" and would implement changes whether the public supported them or not.
Call for council to axe contract
Honey Comb hair salon owner Sarah Pearson said the cost of the i-Park system was, in her view, "nuts", a "waste of money" and the council should end its contract.
"That's ludicrous. All everybody talks about is how difficult the parking system is."
She believed issues with the parking system - as well as inner-city safety - stopped people coming into town and it "definitely" affected her business.
Pearson said she feared what cuts the council would introduce to make up for lost revenue due to the i-Park contract, and said businesses would not appreciate rates rises.
"I just don't think [the i-Park system] worked as well as it could have because it has cost so much money. Let's try something else."
Honey Comb hair salon owner Sarah Pearson wants a new parking system. Photo: LDR / Rotorua Daily Post
The council's contract with i-Park ends on 30 June, 2026.
Reg Hennessy, of Hennessy's Irish Bar, said his reaction was one of "shock and horror" and in his view it was "just disgusting".
The CBD was "badly in need of life support" and business ratepayers as well as residential ratepayers would likely "have to pick up the tab".
"Someone has got to answer why [the i-Park] fees have doubled ... it's crazy."
The contract's cost is disgusting, says Reg Hennessy, of Hennessy's Irish Bar. Photo: LDR / Rotorua Daily Post
Covid partly to blame
Comments from business owners and Paddi Hodgkiss were put to the council and mayor Chadwick for right of reply.
Asked why i-Park's contract appeared to have more than doubled between the two years, council operations manager Jocelyn Mikaere said i-Park progressively took over the operation of parking services in October 2018 and so the 2018/19 costs did not represent a full year.
She added i-Park had "continued to make adjustments to parking services as required by [the] council", such as the introduction of the half-price Pink Zones and the parking app PrestoPark.
Mikaere said the i-Park contract consumed almost 84 percent of parking revenue "due to reduced revenue as a result of the Covid-19 response" and the 2019/20 costs reflecting a full financial year.
Council data showed a significant drop in parking revenue during April and May 2020, resulting in a loss of about $180,383 when compared to the same period in the previous year.
That meant the impact of the Covid-19 lockdown on Rotorua's parking revenue was about 8.7 percent.
Parking revenue also bounced back in June, with a total revenue of $171,293 - just over $3000 more than June 2019, and the revenue for 2019/2020 was higher than in the previous financial year.
Asked if the cost of the i-Park contract was acceptable to the council, Mikaere said it was "not surprising given the impact of Covid-19".
Asked if the "drag" on parking revenue discussed in the Annual Report was in part due to the i-Park contract, Mikaere said it was not and Covid-19 was "the main factor".
Chadwick said the primary purpose of parking services was not to make a profit.
"It is about contributing to a vibrant CBD by appropriately managing turnover and ensuring fair access for all to support businesses.
"The old system was outdated and inefficient and there will always be teething problems when you introduce change, but systems like ours are now pretty universal and staff have continued to monitor and make adjustments for improvement."
Chadwick said cheaper rates for CBD workers, extra free weekday parking in Kuirau Park, and Covid-19 each impacted on revenue this year.
The annual reports were a "snapshot", she said.
"As is reported in the 2019/20 report, the parking and other revenue challenges were mitigated by higher-than-budgeted rates revenues, cost savings due to lockdown, and other efficiencies implemented before lockdown."
Mayor Steve Chadwick said profit is not the main aim of parking services. Photo: Supplied
A council spokeswoman said the previous parking system used obsolete coin-operated meters that were expensive to operate and maintain, as well as being labour-intensive to monitor, which contributed to lost revenue.
The cost of the replacement of meters was spread over the term of the contract, the spokeswoman said, and meant it avoided the council having to pay about $2m upfront for the upgrades.
Regarding the increase in the contract's cost, an i-Park spokesman said the parking solution and services were "progressively rolled out over a period of time".
"Since the i-Park solution has been in place, there has been a significant increase in parking compliance. This year has had some unforeseen events for which the council has responded in a way that has reduced its revenue for the benefit of the community.
"Through its contract with i-Park, Rotorua Lakes Council has a complete user-pays approach with an entire solution provided by i-Park to the council's specification and requirements."
Parking revenue and cost
2018/19
- Gross parking revenue: $1,786,411
- i-Park contract: $793,378.19
- Net revenue: $993,032.81
- Cost of i-Park contract: 44.4 percent of gross revenue
*2018/19 i-Park contract costs partial year Oct 18 - June 19
2019/2020
- Gross parking revenue: $2,072,955
- i-Park contract: $1,739,001.55
- Net revenue: $333,953.45
- Cost of i-Park contract: 83.9 percent of gross revenue
Source: Rotorua Lakes Council
Local Democracy Reporting is a public interest news service supported by RNZ, the News Publishers' Association and NZ on Air.
