Torbay District Council has lost £250,000 a year after it took over parking enforcement from the police.
Nick Bye said the council was losing money
The area's mayor, Nick Bye, said the move has been a "financial disaster" and may lead to a rise in council tax.
From next year, police will no longer provide traffic wardens across the county meaning Devon County Council will be responsible.
Supt Steve Swani said the money the force will save will go towards tackling other areas of crime.
Torbay took over the enforcement from police two years ago.
Mr Bye said: "I'd certainly say to Devon county to be very, very careful.
"We are stuck between a rock and a hard place. We thought in the first year we'd lose money so the alarm bells only really started ringing in the second year when we understood it would break even and it simply hasn't started to do that.
"We're certainly still losing money now."