Parking Revenue Missing, City Says

Los Angeles officials want an accounting for as much as $530,000 in tickets missing from a city-owned parking garage that serves the Hollywood theater that is home of the Academy Awards, according to an audit released Wednesday.

City transportation officials say the private contractor operating the garage at Hollywood Boulevard and Highland Avenue believes there is an explanation for many of the tens of thousands of missing tickets issued to motorists who entered the garage, but the city has begun withholding part of its monthly payments to Five Star Parking pending resolution of the matter.

“There are missing tickets,” said Wayne Moore, assistant general manager of the Department of Transportation. “We want to make sure we are not out any money.”

In addition, evidence that some parking attendants may have defrauded the city has been referred to the Los Angeles Police Department, officials said.

On Tuesday -- a day before the audit was released -- the Los Angeles City Council decided Tuesday to extend the firm’s contracts to operate the parking lots at Los Angeles International and Van Nuys airports for up to a year, increasing the company’s share of revenue by $3 million to $17.7 million.

Council members said Wednesday they were unaware of the audit of operations at the 3,018-space garage when they voted on the airport contracts.

“I’m very disappointed,” said Councilman Tom LaBonge, whose district includes part of Hollywood. “It’s a very important public facility, and those involved should be held accountable.”

The department had kept its preliminary findings on the largest city-owned garage under wraps during the last six months while attempting to resolve the issue with the operator.

The audit, and an earlier examination of Five Star’s operations, “indicated some fraudulent activities perpetrated by their employees,” the final report said.

A source familiar with the operations said there was evidence that some parking attendants were taking $10 tickets, validating them after the motorists left so that only $2 was due, and then pocketing the remaining $8.

The audit claims that the contractor owes the $530,755 for missing tickets plus $76,474 in interest.

Joseph Lumer, chief executive of Five Star Parking, disputed the city’s figures.

“That is an absurd number,” Lumer said. “We are challenging that fundamentally.”

He said the audit was flawed in several ways, including its methodology. He also said the city’s revenue-control system had malfunctioned.

The audit, begun in 2004, looked at ticket activity for two days and found that 892 tickets were missing one day and about 649 were missing the second day. It then multiplied those findings for a 2 1/2-year period.

In addition, the control system was not counting tickets validated by an adjacent hotel, Lumer said.

Lumer predicted that when the audit figures are reviewed, the city will find that less than $20,000 may be unaccounted for.

The parking company executive said he has disciplined some employees for misconduct.

The city shares responsibility with the garage operator to maintain equipment that counts and controls the issuing of tickets showing that motorists paid for parking.

However, Senior Auditor Nelson Vinson wrote in an April 13 letter to Lumer that the company had failed to explain the missing tickets.

“We have repeatedly requested that Five Star provide a satisfactory answer to the voluminous numbers of missing tickets, which we believe is not solely due to the inadequacies of the parking revenue-control equipment,” Vinson wrote.

Lumer, his family and their businesses and employees have contributed $135,000 to city candidates in the last seven years, including Mayor Antonio Villaraigosa and 13 members of the 15 City Council members.