City Extra: New York City lesson on how not to manage performance.

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I know it is often said that figures can lie, but lies cannot figure. Or can they?

The trouble is suspended disbelief conditioning starts when we are small with fairytale stories.

This week I got a report from NYC Parking Ticket with the full set of New York City accounts for 2010 attached .

As I read them it seemed no wonder they are losing money.  I you want to know how not to do a set of accounts take a look art theirs .

When I checked on fairytale definitions I found the phrase refers to either; an interesting but highly implausible story, often and excuse; Or a story about fairies, told to amuse children. Either way the selective use or all-time favorite character, being money in the NYC report makes a good fairy story.

I also wrote back to my friend Larry Berizen, who with his partner Dan Giacomarro runs a legal practice in New York that focuses solely on helping customers resolve their parking issues in an aggressive money hungry monopoly worth over 600 million smakaroos to the New York City. In his unique practice he publishes a regular blog with tips and advice on how to handle what he refers to as the NYC parking warriors and the legal system that supports them. He finds their often cowboy style antics are frequently suspect when it comes to getting their their quota of scalps. (They call them KPI’s) This seems clear something is not right when the success rate on defending parking violations notices exceed a massage 30% of all issues.

Here is an edited copy of my note that I shared on his blog reply section.

Hi Larry,

I took a look under the covers at the NYC report for 2010. I spotted a few things as I did come counting.

The first was this set of confusing financial reports has a lot of numbers with very little that is easy to really understand; save the bottom line that says the city had lost a lot more money. The significantly large document of 377 pages to many may seem impressive, especially when you find sets of 10 year trends. But I could find no sensible performance based segmental or consolidation at all and it seemed to have repetitive and what seemed to be unrelated data with little or no performance context.

There is a great deal of detail on revenue by, what I would call products and services, but no service delivery costs are associated. Hence you cannot determine the service activity performance. Parking Meter Revenues of 147 million in the Transport Category plus $604 million in Fines in the Finance revenue together with scatted other agency parking contributed significantly to the 2010 total of 62 Billion

When I added up all the parking related revenues in all the agencies it was pushing 1 billion. Excluded grants and taxes this number that make up the majority of the total $62,813,314,759 to be exact. the parking business fell into the top 10% highest single contributors.

Interesting that such a large business has no bottom line e.g a gross contribution as all costs are lumped together under separated general activity headings with outgoings for all NYC programs .

On the subject of parking my count saw it featured 25 times in the report As such a cash cow and one of the top 10 numbers having a discrete set of incomes and direct costs would let us see how is it performing as a business. I bet they don’t know themselves so it is no wonder that are losing money if they don’t know how to account for their business. Anti-pellucidity is a word that springs to mind for most. Mushroom accounting is another.

Another related set of numbers I looked at were performance ratio across a 10 year span showing the % ratio of working meters. The health of the assets can be a good indicator of how well a business is running. (Would you get on a bus with bald tires? )

Here is the 10 history from their report and especially the last 5 reflects the total malaise.

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Incidentally the Aussies have an an approach that has worked in the Gold Coast for 50 years. image

There Business savvy traders understand the idea is of giving customers a good experience to keep them happy and keep them coming back.

But I wondered how NYC can run a legitimate parking business to make $146,784,983 in parking meter fees without enough working meters, let alone be entrepreneurial to provide such a value added service.

Jacking up prices is one way to achieve the 15% year on year lift in revenue to make budget so why bother incurring costs to fix the kit. Obviously the 100% revenue loss on 6% of the meters that went our of service in 2010 meant they somehow had to get the unit price up by over 25% or more Why not I say. recession or not, that seems fare doesn’t it, especially when they have a monopoly.

On the other had clearly service was not the budgetary aim as Fines were budgeted to increase 15% as well. But the rouge warrior strategy for that was clearly thwarted by theimage “Who Ya Gonna Call” warrior busters team of NYC Parking Ticket fame who kept it to $604,050,097. Obviously the extra speed Cameras noted in the statistical pages of the report, weren’t enough to boost the city coffers to expectations.

Another interesting chestnut that showed up was, of 24,369 City and State Disability parking permits issued during fiscal year 2008, an inventory check of seals on hand showed at least 22,000 were unaccounted for. Since anyone can create fraudulent permits using these seals it would seem an astute recipient who saw them fall of the back of the armored truck now has a license to print money? The audit report did not say someone’s head in the Department of Transport will roll, But before they do that I suggest NYC send out a ferret to check the parking places around town to find all the new Ferraris and Lamborghini’s. I bet they will find a few new ones parked by people who previously rode push bikes. Find them and the city could have its money back 10 fold from the black market traders.

Another proud boast on page XV of the cover letter to the People of New York said that improving both manual and automated City systems saw NYC collect outstanding parking tickets from claimants who received settlements from the City. Go get ‘em" team… It seems anyone who is lucky enough to get a settlement sure won’t be keeping it long with the NYC agency now commissioning ferrets to go out on the job to get their money back. Maybe they should do over the homeless as their next KPI

So, on balance it seems there is no balance in NYC books. To fix it needs some clearer and more transparent accounting and public servants who can balance business acumen to deliver on the city needs. Only then can they reverse the continued hemorrhaging that saw 2010 add another 10 million to make 108 million greenbacks down the tubes.

imageI know every fairy tale we read to our kids teaches them lessons we want them to learn. I love reading your stories Larry if not only for that reason. But the NYC city accounts looked like an implausible excuse. Getting to understand their cash cow parking business could actually be being managed as financial fiasco, could just the tip of the iceberg.

That’s Grimm for sure.

Cheers Gordon

Sherwood Group Consulting

 

Who You Gonna Call – Performance Busters !!!

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One thought on “City Extra: New York City lesson on how not to manage performance.

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