Tofino is tweaking its downtown pay parking program after it not only failed to meet its revenue targets, but actually lost the district money last year as a staff accounting error led to significantly higher expenses than expected.
The downtown pay parking program made its debut in 2023 and was expected to generate $440,000 and cost $210,000 to run, leading to an anticipated net profit of $230,000, but reality saw it finish its first year in the negative with the district losing about $30,000.
The district’s 2023 budget allocated a $296,000 contract for Victoria-based company Robbins Parking to manage Tofino’s beach and downtown pay parking programs, but the town’s municipal council recently learned the contract paid Robbins $448,900 as well as an additional incentive fee of 5.5 per cent of revenue collected.
That canyon-sized gap between expectation and reality was caused by an error in budget planning that district staff are assuring won’t happen again.
The district introduced parking fees at its beaches in 2021 and expanded those fees into downtown in 2023. Residents of Tofino, Ahousaht, Opitsaht, Esowista, Hesquiaht and Ty-Histanis are exempt from the fees.
During their April 9 regular meeting, the town’s municipal council voted in favour of increasing its downtown parking fees, expanding the seasonal program by about two weeks and adding new spots.
The downtown program’s failure to hit its profit targets were first highlighted during a Dec. 5 special council meeting where the district’s Director of Infrastructure and Public Works Aaron Rodgers explained a formula error skewed the numbers.
“The beach parking program was successful again. We had fewer people parking at the beach but, because our rates were higher, we basically met our goals,” Rodgers said. “Downtown parking was a different story. Our revenues did not meet our expectations and our expenses were higher than we expected.”
He said both programs generated about $700,000 combined with about $455,000 in expenses leading to roughly $250,000 in revenue.
He added the downtown parking revenue was hurt by fewer parking spaces available due to construction projects, less tourists than expected due to the wildfire-caused road closures at Cameron Bluffs and what he described as “a fairly low introductory rate” for fees.
He suggested the downtown program also faced high expenses due to a one-year contract and frontloaded costs to pay for kiosks and other equipment.
Mayor Dan Law questioned how such a broad difference in the contract costs with Robbins Parking between what was expected and what was actually paid could occur.
“I looked at this budget and I looked at the previous budget projections and I noted the parking contract fees went from $128,000 projected through the next bunch of years to $280,000 for the beaches and $69,000 for downtown to $168,000. That’s an increase of well over 100 per cent; $250,000. What happened there?” he asked.
Rodgers responded “there were errors in the financial plan” which makes comparing the two budgets like “apples and oranges.”
“Basically we underestimated about 37 per cent because we were using a formula from a previous financial plan that didn’t account for a number of kiosks or how we apportioned which kiosks were there. There was definitely an issue with the formula,” Rodgers said.
He added the beach parking contract was extended over a three-year program, which made the expenses for that program look lower.
“The main issue, when I dig down to the numbers, is that we’re paying a fairly high rate for a one-year contract,” he said. “For the downtown parking, we paid heavily for getting it up and running for a one-year contract. That will support us in the end because we’re going to be entering into a longer-term contract, so we’re going to have absorbed a lot of those expenses.”
Law pressed further on why just the contract fees with Robbins specifically were so underestimated.
“This is just the parking contract fees. That was an error by a quarter-million-dollars and now it’s being corrected. Is that what’s happened?” Law asked. “Robbins parking actually did not get paid $200,000, they got paid $450,000. Is that what I’m hearing?”
Rodgers responded it was about $400,000 and reiterated that there was an error in the previous budget.
“We underestimated the expenses by about 37 per cent due to the errors in the formula for the downtown parking,” Rodgers said. “I can stand here and say that’s staffs’ error…I’m confident that we’ll be able to get downtown parking back in the black.”
He added that despite missing its revenue target, the downtown pay parking program did meet its goal of freeing up parking spots by increasing turnover.
Staff then returned to council for another special meeting on Feb. 15 to hammer down harder on how exactly the downtown situation unfolded.
“There was a calculation error in the 2023 budget and it generated a lot of questions at the Dec. 5 meeting, so staff thought we’d bring it back for a bit of a comprehensive view,” said Lisa Landry, who’s working with the district on a temporary capacity during budget season.
Landry’s presentation suggested that the mistake was caused not by a formula error, but rather district staff failing to account for the additional downtown contract.
She explained that Tofino paid a $296,000 contract to Robbins in 2022 for the beach pay parking program. In 2023, downtown fees were in the development stages, but staff took the previous year’s budget amount of $296,000 and carried it over as the expected contract cost.
“At that point, staff took that original contract and parsed it into two, part to go to beaches and part to go to downtown. This is where the error occurred,” Landry said.
She said the beach program contract cost $296,064, but the downtown contract that had not been accounted for in the budget, cost an additional $152,898, totalling a combined $448,962.
She added that, in addition to the contract costs with Robbins to provide service and staffing, Robbins also receives a 5.5 per cent incentive fee on revenues.
She said staff have looked into what happened in 2023 and are introducing measures to prevent the same mistake from happening again, including having one consolidated contract in 2024 to “reduce that confusion of dealing with two contracts.”
The beach pay parking program brought in a total of $667,637 in revenue with $370,255 in expenses for a net profit of $297,381 in 2023.
The downtown parking program brought in $133,879 of revenue, but the district lost money on it due to $161,680 in expenses for a net loss of $27,801.
“I don’t think I need to remind anybody that 2023 was not a normal year. We had an unprecedented event with the Cameron Bluffs wildfire and Hwy. 4 being closed. It had a huge impact on visitation and also on this program,” Landry said. “Downtown was even more heavily impacted by the closure. Downtown was just starting at that time. The equipment was bought, costs were underway, but the revenue stream had not been set up by the time the road closures happened.”
She added the downtown spots brought in essentially zero revenue between May - July in 2023.
“I want to really emphasize it’s misleading to draw conclusions on these numbers. Knowing what we know, we can’t just take these numbers at face value,” she said.
She estimated the district could expect a net profit of roughly $44,000 from the downtown program with no road closures.
Coun. Tom Stere suggested the contract amount with Robbins seemed high, noting the company also receives a 5.5 per cent incentive fee on revenue, and encouraged staff to find ways to reduce either the contract fee or revenue percentage.
During their April 9 meeting, council approved increasing parking fees by 25 per cent, pushing the seasonal downtown program’s end to Oct. 31 and adding new Mackenzie Beach parking spaces to the fee collection basket.
Council approved the changes with no discussion with Coun. Ali Sawyer the only vote in opposition.
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