Report: MIA overpaid $500k to garage firm

Oct. 17--The parking garage operator at Miami International Airport overcharged Miami-Dade County about $500,000 over three years by passing along inflated payroll costs and insurance fees, according to a new report.

An affiliate of Central Parking System, the national parking operator based in Nashville, runs MIA's garages for a $6,000 monthly management fee. But MIA also shoulders the garage staff's salaries and other expenses incurred by the affiliate, Airport Parking Associates.

The county Inspector General claims Central Parking passed on costs that were too high. The biggest: liability insurance provided by Central Parking at roughly double what the report estimated the airport could get from an outside insurer -- a spread that cost MIA about $100,000 a year.

But a lobbyist for Airport Parking Associates dismissed the report as naive and uninformed. Miguel De Grandy, a Coral Gables lawyer who represents the firm in talks with MIA, noted airport officials approved the disputed fees and were free to seek their own insurance policy.

"Respectfully, this unenlightened level of analysis is not what the public would expect of the OIG," De Grandy wrote in response to a draft version of the report. The letter criticized investigators for not conducting a market analysis before criticizing the company's fees.

The report said MIA paid about $200,000 more for retirement contributions and workers compensation insurance than the firm's actual costs. As the IG began raising concerns this year, MIA reworked its deal with Airport Parking to address the alleged shortcomings.

The airport now will pay closer to the actual retirement expenses for employees, a provision De Grandy said will cost MIA more as additional employees join the company's 401(k) program.

MIA also dropped Central Parking as its insurance provider, a move that cut premiums in half.

De Grandy said outside insurers typically "low-ball" customers in the first year to secure new business, then boost prices once they're forced to pay claims. He said that tactic probably accounts for the discount MIA received with the outside insurer.

The report comes five days after the IG's office accused an MIA security contractor for holding back more than $200,000 in a revenue-sharing agreement.

Christopher Mazzella, the inspector general, said MIA displayed a "lack of oversight" with the Airport Parking Associates contract and should have pressed the company to justify its fees.

In the report, investigators questioned whether Central Parking System offered MIA a low $6,000 monthly management fee in order to reap bigger profits by passing on inflated expenses.

Airport Parking's "profit should be driven by its monthly management fee, not by its insurance premiums," the IG's office wrote.


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