Parking – Red Herrings, Real Issues, and your money

First of all – happy new year.  How on earth did it get to be 2014 already.

Lots of talk about the City’s parking budget recently.  Just before Christmas, Council approved the first rate increase for downtown parking since 2006, an additional $0.25 per hour.  This was in part just to keep up with inflation in costs, since some costs, such as electricity, have gone up dramatically over that period.  But the bigger issue is that even with this increase the City’s parking budget has about a $600,000 deficit, which if it is not covered by additional revenues, has to be covered by the taxpayer.  This is driving City staff and Council, rightly, to look for a solution.

However, look a little deeper into those numbers.  In 2011, the City’s parking fund generated about $1.3M in revenue, and had $1.2M in costs.  In fact, on an operational level, the City’s parking operations are self-sustaining.  With the rate increase, it will actually be net positive on an operational basis.

The fiscal problem is that the are debt costs for the downtown parkade are also sitting in the parking budget, to the tune of $964,000.   That’s what is causing the parking fund to run at a considerable deficit.

The debt for the Collier Parking garage is 15 year debt, which will be paid off completely in 2024.   At that time, the Parking budget will of course dramatically improve.   So the issue is plugging this hole over the next ten years.  It’s therefore a bit of a red herring to say that the fund is “unsustainable” – the current practice is unsustainable, but the real problem here is a cash flow issue for the next ten years, caused by a single large annual debt payment.   By and large, all other elements of the parking budget are in good shape.

With a daytime rate increase having already been approved, there are some who see the only option for Council to be to extend parking hours into the evening.  There are good reasons for that particular move – for example, why should only daytime customers of downtown businesses have to pay to park, and evening customers get a free ride?  Shouldn’t restaurant or bar patrons be charged just the same as patrons of retail stores or daytime offices?

The counter argument to that one goes like this – there are also a LOT of evening parking users who are coming to the downtown for special events, charitable organizations, et cetera.   Seems harsh to ask a volunteer from Out of the Cold to pay for parking, particularly if it’s for an 8-hour shift.   Also, very few other municipalities charge until 11 at night – Councillor Ward calls it “uncharted territory” and he’s not wrong.  Most charge until 6pm, a few until 8pm.  All of this said, I do agree with Councillor Brassard’s views on this, there is a basic inequity between daytime customers and evening customers right now that makes little sense.   Side note – John is doing great work in the background on this issue, he is meeting with the downtown merchants (BIA) tomorrow, and will chair the Transportation Committee meeting on Tuesday next week where we address this issue.

Anyway – I think there are also some other options for Council and I continue to beat the drum about #1 below!

1.  Charge Visitors for Waterfront Parking – the 2012 study estimated that by giving all Barrie residents a pass for free parking on the waterfront, and just charging out of town visitors, would generate a net of approximately $400,000 in revenue.  I have been in favour of this for some years.  While I would like to see our residents continue to park for free at the waterfront parks that were built with their tax dollars, I think we have hundreds of thousands of visitors per year who would reasonably expect to pay to park, especially given virtually all other municipalities charge for this (Innisfil, Oro, Wasaga Beach, and others).  With all our special events, this is a good opportunity to raise revenue.

2.  Sell parking lots for redevelopment, if it replaces the parking – Parking lots downtown are a great redevelopment opportunity and can raise revenue through sale of land, development charges, and tax revenues.   Developers can be asked to replace all the lost public parking as part of their redevelopment, as is happening with Mady’s Collier Centre project across from City Hall.  I blogged about that previously, click here if you want to read more. This could generate considerable revenue, but it’s hard to count on it because the timing of land sales is difficult to forecast.  It would not be unreasonable, however, to assume this could generate $2-3M over the next 10 years, even with a relatively slow pace of redevelopment.  This would take the 10 year shortfall of about $6m due to the debt and reduce it to $3-4M.

3.  Make some smaller, money-losing lots, seasonal use only.  While overall the parking operation breaks even net of debt, there are some lots that don’t see enough activity to cover the costs of maintaining them.  This may seem an oddity, but think of the snowploughing and lighting costs alone associated with a parking lot.   Some lots could be closed in the winter, especially the smaller ones near the waterfront.  There are probably $50,000 and maybe $100,000 annually in savings from this that are possible without hugely reducing the parking supply.

4.  Get a little more inventive about parking pass sales.  Annual parking revenues from pass sales are about $350,000 per year.  Even a 20% increase in pass sales would bring in another $70,000 per year, although there could be an offsetting loss to some extent as people who pay cash convert to passes.  One approach could be to market parking passes to property owners who do not have enough off-street parking at their downtown properties.

5.  Deal with this for what it is – a cash flow issue.  This may sound strange, but the fact is that the parking fund is sustainable and perhaps this is being made out to be a little bit more of a problem than it is.  Hypothetically, for example, if Council was to take a few of these steps to putting us on a sustainable fiscal path, with land sales making the difference between a small deficit and a small reserve contribution every year until 2024, there public would continue to see good service and we would not need to dramatically drive up rates, paid hours, or expanding paid parking.

At a minimum, however, Council probably needs to take one more major step – either paid waterfront parking for visitors, or evening parking charges, to get us over the cash flow crunch of the next 10 years, and prevent homeowners around the city from having to subsidize downtown parking.

Comments as always are welcome.