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 meters.
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 maintenance.
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.