Audit: $395,000 lost due to faulty Sea-Tac parking machines

By Emily Heffter, December 10, 2012, Seattle Times

Two honest drivers called the Seattle-Tacoma International Airport this summer to check on their credit-card charges. They thought they paid to park in the airport garage, but mysteriously were never charged.

Sea-Tac staff investigated and found they were two of 10,500 drivers this year who swiped their credit cards as they exited the garage, but the charge never went through.

Faulty credit-card machines have cost the Port of Seattle at least $395,000 in parking revenue in the last two years, and the airport hasn’t yet been able to fix the problem or even get to the bottom of it.

A state audit released Monday said the airport may have lost even more in parking revenue over the last several years. And in some cases, customers were charged too much for using the garage, the audit says.

The same audit also found the Port violated the state constitution with a clean-fuel program for cargo ships. The Port believes the program, which is designed to encourage ships to burn cleaner fuel while docked in Seattle, is legal, but the state auditors say the $2.5 million that the Port spent was essentially a gift of public funds.

In response to the audit, the Port has put its fuel-incentive program on hold and at the same time is manually reconciling Sea-Tac parking receipts — every day. It also hired a forensic expert — at a cost of no more than $75,000 — to figure out how the Port can guard against missed credit-card transactions and reclaim its lost funds.

During an initial investigation, the Port blamed the problem on one receipt-spitting card reader at the garage exit. The investigation turned up 864 additional failed transactions in 2011.

The airport may be able to get reimbursed by the equipment vendor, said spokesman Perry Cooper. Additionally, the airport may go after individual parkers who thought they paid but didn’t.

“Essentially those parkers have parked for free at this point,” Cooper said.

The lost revenue is less than 1 percent of the nearly $50 million in parking revenue the airport collects every year.

Money collected for parking is the airport’s No. 1 non-aeronautical source of revenue. About 75 percent of it comes in through debit and credit-card charges.

It’s also possible, auditors wrote, that without a better bookkeeping system the airport garage could have failed to collect on credit-card charges for years, and the Port would never have known it.

“We found the Port did not identify the full amount of the loss,” auditors wrote in their report.

The Port hasn’t identified the cause of the problem and didn’t test new parking-garage equipment to ensure that it’s not still happening, auditors said.

“Further,” auditors wrote, “we note the new system still is not accurately processing all credit-card transactions or does not process them at all, does not always operate and overbills customers.”

Cooper said the Port has looked at records back to 2006 and doesn’t believe there were any additional losses.

Reimbursed cargo ships

Auditors also found an environmental program the Port put in place in 2009 to cut down on air pollution to be illegal.

The Port has been reimbursing cargo ships for the difference in cost if they use more expensive, but cleaner, fuel while parked at the Port.

The program, called At-Berth Clean, or ABC Fuels, has kept about 900 metric tons of pollution out of the air, said Port spokesman Peter McGraw.

But auditors said Port directors broke state law when they did it, by essentially giving away public funds.

Each ship that uses low-sulfur fuel can apply for a reimbursement, usually about $2,000, said McGraw.

The Port has paid $2.5 million for the program since 2009.

In 2009, the Port lawyers reported that the public agency didn’t have the authority to create the incentive program, so the Port made a deal with the Puget Sound Clean Air Agency: the Port would pay for it, and the agency would administer it.

Auditors wrote: “The Port may not pay another party to perform the activities it is not authorized to do.”

The Port has suspended its ABC program until it can find a way to pass legal muster with state auditors.

Port officials still think the program is legal, McGraw said, and want to find a way to make it work.

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