Parramatta Council might need to repay nearly $2 million in parking fines because inspectors have been marking tyres with crayon instead of chalk, potentially rendering masses of tickets invalid.
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The council sought legal advice over the possibly costly bungle that affected fines handed out after September 2017.
It stemmed from a parking policy loophole, which the council is trying to close.
Parking inspectors in the western Sydney area use industrial crayon, rather than chalk, to scrawl on vehicle tyres for timing-related parking offences.
That is allowed under NSW requirements, which say parking inspectors can use crayon, chalk or a "similar substance" to mark the tyres.
But the council's parking enforcement policy refers only to chalk, raising the question of whether the inspectors using crayon "acted beyond power".
The dilemma, detailed in business papers for Monday's council meeting, was discussed in a closed session at a meeting in June before councillors sought in-house legal advice.
A report said councillors had later "discussed extensively" why crayon was the "preferred substance" for marking tyres.
"Operationally, City of Parramatta Council uses crayon as do most other enforcement agencies across NSW, including the NSW Police who have been using crayon for over 30 years for timed parking enforcement," the council report said.
Legal advice, contained in the report, said the council's parking policy was only a guide. It was unlikely a court would find fines that relied on crayon markings were void, the advice said.
A Parramatta Council spokeswoman said: "Based on the legal advice received, using crayon as a marker rather than chalk does not lead to the conclusion that the council officers have acted unlawfully [beyond power] or that the consequent infringement notices are invalid."
However, the report recommended the council tweak its parking enforcement policy in line with the legislation to prevent confusion.
The report said the council would need to fork out $1.9 million in refunds if it considered the fines handed out using crayon were unlawful.
It noted the logistics for processing the refunds "would need to be assessed" given the fines were given to vehicles and not people, and tracking down the owners would be resource-intensive.
"These issues would need to be considered and addressed before any refunds could be made," the report said.
The matter will be discussed at Monday's council meeting.
