Item - 2023.PA3.8

The Board of Directors of Toronto Parking Authority:

1. Authorized payment of $2,056,961.25 (excluding Harmonized Sales Tax) for the purchase of 225 Pay by Plate parking machines from Precise Parklink Inc., which will be made pursuant to the terms and conditions of the Master Services Agreement between the Toronto Parking Authority and Precise Parklink Inc. dated July 1, 2016.

A key priority of Management’s approved 2023 Annual Operating and Capital Plan is to initiate the modernization of its' parking payment equipment.  As a critical first step in our multi-year journey, Management is seeking authorization from the Board of Directors, Toronto Parking Authority, to purchase 225 pay-by-plate on-street payment machines valued at $2,056,961.25. The current pay and display machines, which have been in the market since 1998, are approaching their end-of-serviceable-life and require replacement.

As background, The Toronto Parking Authority's current on-street parking portfolio includes approximately 21,500 parking spots and accepts payment via 2,728 pay-and-display parking machines, 180 single-space parking meters, and our Green P App.  In 2022, Toronto Parking Authority’s on-street paid parking program generated $44.7 million in revenues with 30 percent generated directly through the pay and display equipment.

Toronto Parking Authority’s current equipment is rapidly approaching obsolescence. While providing rudimentary payment options, the existing pay and display machines are severely limited in their capacity to support both current and emerging payment technologies:

• Critically, 20+ year old pay and display equipment does not accept Debit card payments, which represents 28 percent of all retail payments in Canada. In addition, the equipment does not support any other form of contactless payments including tap, Apple Pay, Google Pay, Samsung Pay, etc.

• There is a risk that the pay and display machines will not be “chip and pin” compliant.

• Pay and display equipment requires a physical ticket to be placed on the vehicle dashboard as proof of payment. Not only is this process archaic from a customer perspective, it is unproductive from an enforcement standpoint, driving incremental costs

• Toronto Parking Authority’s legacy pay and display equipment operates exclusively on 3G networks, which will not be supported post 2025.

In 2023, as a first step in addressing these operational limitations, Management will deploy 225 of the new pay-by-plate machines in high velocity zones to maximize customer reach while de-risking our exposure identified above. The new pay-by-plate equipment, which is currently in markets across Canada and the United States, will provide a myriad of payment solutions for our customers including Debit card, Credit card, Apple, Google and Samsung Pay, as well as cash payments.  Proof of payment will be virtual, obviating the requirement to display proof of payment in the vehicle. Lastly, the new equipment will operate over a 4G compliant network and will be fully integrated with Toronto Parking Authority/Toronto Police services' digital enforcement platforms.

In conjunction with the deployment plan described above, Management will be developing a longer-term customer payment strategy that will elevate the use of technology and digitization to provide a more seamless, integrated solution to our customers across our entire portfolio including on and off-street parking, Bike Share and Electric Vehicle Charging. This work will help to inform Management of the required pace and scale of our equipment upgrades over the next three (3) years.

Toronto Parking Authority will leverage its Master Services Agreement with Precise Parklink Inc, to purchase the equipment. The total cost of this purchase is included in Toronto Parking Authority's approved 2023 – 2025 Capital Budget.