Rehoboth Beach officials are working with contractor Parkmobile to lower the amount the city pays in cell phone transaction fees associated with the pay-by-phone parking service.
At issue is the amount the city pays in cell phone transaction fees. When someone uses the Parkmobile system via a cell phone, a 50 cent fee is collected. That fee is counted as revenue for the city, budgeted for 2014-15 to at an estimated $600,000.
The flip side is the expense; the city pays $95,000 to collections agencies that get a cut of the parking revenue.
Mayor Sam Cooper said the concern for him is that 16 percent of the city’s projected parking revenue is going towards collection fees.
“We’re giving up 16 percent of our revenue just to collect it,” he said. “I thought it would be half of that. It’s a big negative towards the budget.”
It appeared, Cooper said, that the city’s expenditures would exceed revenues, making the budget unbalanced. The commissioners must have a balanced budget in place by Tuesday, April 1.
Cooper said the problem is not with Parkmobile per se, but with the collection agencies. He said the city pays 15 cents per transaction plus a percentage towards collection fees from cell phone transactions.
City Manager Sharon Lynn said the $17.3 million budget would be balanced by the commissioners’ Friday, March 21 meeting.
Cooper said he was not sure if the city could negotiate to lower the amount, but Lynn said the city managed to get the fees reduced last year and she has begun talks with Parkmobile about reducing it this year.
Cooper said fixes to the budget to get expenditures in line included adjusting salaries for part-time employees in the streets department. He said the department will have more full-time employees this year, but the budget still reflected a higher amount for part-time employees. He said the capital improvement budget was also reduced to save money.