A private company has been chosen to take over Rotorua's parking services with the council saying there's an "urgent need to upgrade our parking infrastructure".

Rotorua Lakes Council has confirmed it is working with a preferred partner to "improve parking" services in Rotorua.

"The aim is to provide effective, modern and cost-effective services to the community," operations group manager Henry Weston said in a statement.

"A request for proposals last year – to see what options were available – was prompted by the need to consider future parking demands, modernise parking equipment like meters and pay-and-display machines in the central city and address increased operating costs against declining revenue.

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"That provided an opportunity to explore how else parking services could be provided.

"Obsolete equipment and low enforcement rates due to old technology, which many councils face, and the manual nature of enforcement, have all contributed and there is now an urgent need to upgrade our parking infrastructure, systems and update the way the service is managed," Weston said.

"We anticipate a number of benefits including the upgrade of equipment, the cost of which would be covered by the contractor. There will also be more payment options for people, more effective and efficient enforcement, and will enable us to position the service for current and future growth and demand."

Three staff will be affected by the change and options including redeployment, are being worked through with the staff and their union representatives.

Responsibility for parking services had moved to the operations group from the council's transport division which undertook the earlier work on the requests for proposals. The operations group was now working through finalising contract details and would oversee implementation.

The council flagged last September that a "request for proposals" had been issued to explore options for a potential partnership to improve delivery of parking services. Six proposals were received, and in December the council approved progressing with negotiations with a preferred provider.

"We can't provide all details at this time as we are still working with the preferred contractor. There are obviously commercial sensitivities involved," Weston said.

"An announcement with full details will be made at the appropriate time and that's expected to be quite soon. Changes will be phased in over a period of time, alongside public education on the new technology.

"This would be a partnership agreement whereby we pay someone to provide these services for us but council would continue to set the parking policy, receive the revenue and set the parking fees. Because these aspects will remain the same, wider public consultation isn't required."

There are more than 3550 parks in total in the central city including more than 500 metered and pay-and-display parks. Revenue has declined annually in the past five years to about $2 million per year, down from just over $3m in 2012/13.

Rotorua Chamber of Commerce chief executive Allison Lawton said any business, including the council, should always be looking at its business model.

"If it makes commercial sense for them to do this, then it's a good thing.

"All businesses know they need to be reviewing and updating their services and I hope all of that has come into effect."

Lawton said on a recent trip to Auckland she had seen "fabulous" examples of the technology that could be implemented in parking meters.

"I think if we see some of that, then that's a success for the users."

Local woman Toni Brown said having an upgrade to the parking meters would make sense.

"There are times I don't pay for my parking, I just risk it because I don't have any coins on me and there isn't as much free parking around anymore.

"I think it is scary that council have less control over who's monitoring our parking."

Chantelle Crabtree said since parking sensors were put in she hadn't seen any upgrades to parking in Rotorua.

"An upgrade is probably a good thing, and probably overdue.

"I just hope we won't see any prices going up."