BETTER MANAGEMENT OF CITYS PARKS CONCESSIONS WOULD NET MILLIONS 

  City Comptroller John C. Liu today announced that an audit of the Department of Parks and Recreation’s controls over recreational, dining, and retail concessions found that better management could have yielded $8.8 million more in badly needed revenue for the City.

Most notably, by allowing the Tavern on the Green restaurant to close without contracting for a new operator, the Parks Department has lost concession revenue of nearly $2.2 million, the audit states. In addition to the lost revenue calculations, the City and State have forfeited nearly $3.7 million in sales taxes with Tavern’s demise, and 500 jobs disappeared, the audit estimates. The storied Central Park restaurant closed nearly two years ago and has not reopened.

“Parks are not just about concessions, but concession contracts should be better managed so that revenue flows to the City without unnecessary interruption,” Comptroller Liu said.

The audit concluded that other concessions could also have been better managed – to the tune of $6.6 million. These include the pushcart licenses in Battery Park, the Central Park tennis courts, the ice skating rink at Flushing Meadows Corona Park, and the snack bar at Orchard Beach in Pelham Bay Park.

Specifically, the Parks Department should have started key contract solicitations earlier and ensured more competition, auditors said. Parks also failed to maintain key documentation supporting contract decisions and preventing conflicts of interest.

The Parks Department, as custodian of over 29,000 acres of City parkland, is responsible for soliciting and awarding concessions for various attractions. Typically, the concession operators pay a fee or a percentage of their total receipts – money that is used to support programs and services.

In Fiscal Years 2008, 2009, and 2010, Parks reported concession revenues of $52.6 million, $46.1 million, and $39.8 million, respectively.

The Parks Department has disagreed with many of the audit’s findings, maintaining that delays in implementing license agreements resulted from discussions made in the best interests of the City. It added that it cannot pursue concession revenue above all other considerations, such as legal obligations and long-term capital investments. The audit stated that Parks could have nonetheless avoided many delays with better planning and without compromising other aims.

The audit made 22 recommendations. Among the findings, Parks should:
•       Track the solicitation and award process to ensure that it progresses in a timely matter;
•       Retain written explanations of rejected proposals that detail why an award is not in the City’s best interest;
•       Examine why it receives a small number of responses to solicitations and initiate corrective action. The scope of the audit was July 1, 2008, through June 30, 2010.

Comptroller Liu credited Deputy Comptroller for Audit Tina Kim and the Audit Bureau for presenting the findings. The full report is available at: http://comptroller.nyc.gov/audits