LAZ Parking, MBTA, parking revenue

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THE MBTA’S OVERSIGHT BOARD voted to approve a potential 15-year contract with one of the country’s biggest parking management companies, ending a troubled relationship with its longtime lot operator that resulted in missing revenues that went into the millions.

Top T officials recommended that the Fiscal and Management Control Board approve a performance-based contract with Republic Parking System of Tennessee that will pay the firm $360,000 per year in management fees, down dramatically from the current $9.4 million paid to LAZ Parking, while reimbursing Republic on a monthly basis for staffing, maintenance, and other operating expenses.

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“We’ll reimburse for actual verified expenses,” Evan Rowe, the T’s director of revenue, told CommonWealth. “We’ll be their largest client.”

The T will now give a 30-day notice to LAZ and officials expect Republic to take over the contract beginning April 1. CommonWealth has reported LAZ is under fire for discrepancies in cash collection at several of the lots it operates for the MBTA, including North Quincy on the Red Line and the Lechmere garage in Cambridge.

While officials say they had been exploring a change in vendors since last spring, before the cash shortfalls were discovered, the end of the contract will not halt the T from going after what they believe is a significant amount of money owed the agency from faulty collections.

“We believe LAZ undercollected a significant amount,” said John Englander, the T’s general counsel. “We intend to be made whole under terms of our contract. We believe those losses are well into seven figures.”

MBTA Acting General Manager Brian Shortsleeve downplayed the role of the cash discrepancies and said the recommendation to change vendors is a matter of improving service and efficiency at the T’s 10 garages and 90 surface lots.

“Parking is the largest component of our own-source revenue,” said Shortsleeve, noting gross parking revenues, which are used to pay down the authority’s $80 million operating deficit, are about $50 million annually.

The current contract with LAZ, which also submitted a bid for the new contract, pays the Rhode Island firm $9.4 million to manage the lots as well as another $1.2 million in enforcement and parking fees. Under the new contract, Republic will receive $360,000 for management, an estimated $4.7 million for staffing, $4.3 million in verified reimbursements and about $400,000 in parking fees.

Rowe said the savings are not readily seen but changes in efficiencies will increase revenues without resorting to higher parking fees in the switchover.

Meet the Author Jack Sullivan Senior Investigative Reporter , CommonWealth About Jack Sullivan Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe. He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment. Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members. At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce. About Jack Sullivan Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe. He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment. Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members. At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

In addition to the change in vendors, the new contract will alter the way parking fees are collected and payment is enforced. Under the current system, about $11 million of the parking revenues are collected in cash but with the new contract, updated technology is expected to reduce that to $2.8 million, with the difference being paid through credit cards, mobile apps, or other payment methods.

Rowe said the contract, which will be for five years with two five-year extension options for the T, includes a rigid auditing component as well as a severe penalty for cash discrepancy, as high as three times the amount of verified shortfalls. The new contract will also include performance-based incentives for everything from revenue collection to maintenance, something Rowe said was not part of the LAZ contract. Rowe also said the current contract put the onus on the T to find and enforce noncompliance. But, Rowe said, the incentives for Republic are built in to encourage proactive efforts.

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“This is not solely price-based,” he said.