Andrew: without taking a fine look at the books, I can say that you're probably slightly confused with your math (accounting) process.
While I think council is misguided by bringing back metered parking (certainly other gains could have been found -- is the same level of enforcement REALLY necessary when they're not having to check meters and empty the coins?), I think you're missing something by taking out the "bad debts".
The "cost" of bad debts (in most accounting procedures) accounts for money that was recorded as revenue, but will never be received.  While it may not be *this* year's revenue that is now a "bad debt", it was, at some point, recorded as money that had been earned (revenue), but will not be showing up in the bank account.
Therefore, in order for the books to balance, it must be "removed" from the system as an expense.