HomeMy WebLinkAbout5/14/2024 Item 4a, Horn and King - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 14, 2024
TO: Mayor and Council
FROM: Matt Horn, Public Works Director
Donna King, Parking Program Manager
VIA: Whitney McDonald, Interim City Manager
SUBJECT: ITEM 4A - PARKING RATE STUDY REVIEW AND CONSIDERATION OF
POTENTIAL RATE ADJUSTMENTS
Staff received the following questions about Item 4.a which recommends the Council
review the draft Parking Rate Study and consider potential rate adjustments. The
questions are below with staff’s response shown in italics:
1) What is the amount of General Fund money currently allocated to the
Cultural Arts District Parking Structure construction project?
Per the current 2023-25 Financial Plan, there is $1,990,000 of General Fund
money allocated for the construction of the Cultural Arts District Parking Structure.
This funding is intended to support the frontage improvements specifically related
to the areas in front of the SLO Repertory Theatre. It should be noted that
regardless of whether the SLO Repertory Theatre project had been included on
the site or whether the theatre project moves forward, these frontage
improvements and costs would have been required for the parking structure
project, as it is typically required for the entire property frontage for all large
development projects in the City.
2) What is the estimated costs of the Cultural Arts District Parking Structure
viewing deck and can that be paid from the General Fund?
See memo attached to this agenda correspondence, dated February 4, 2024,
which documents the costs of the viewing deck as approximately $570,000.
Ongoing costs associated with the loss of 4 parking spaces to accommodate ADA
upgrades for the viewing deck are included in this cost. This was based on current
rates at $3/hour. Regardless of how the viewing deck is funded, the total debt for
the structure will remain unchanged. Debt financing funds can only be used for the
Cultural Arts District Parking Structure construction, and these funds are non-
refundable.
Item 4.a Parking Rate Study Review and Consideration of Potential Rate Adjustments Page 2
3) What are the implications of using the General Fund or other funding
sources to supplement the Parking Enterprise Fund?
Using General Fund sources to supplement the Parking Enterprise Fund is
discussed on packet page 20 of the Council Agenda Report. In addition, a report
providing background regarding the City’s Parking Fund Financial Policies is
attached to the agenda report on packet page 107. It is a General Plan policy that
the City’s parking program be self-supporting. Any proposed changes to Parking’s
status as a designated enterprise fund would require General Plan amendments
and likely other policy document amendments.
4) Please explain the rationale behind the recommendation to keep the 10-hour-
meter-passes at $60, but reduce the structure passes to $45/month
(contradictory to the Dixon recommendation on this topic)? Why not make
these two pass types the same cost?
Dixon’s recommendation for the costs of parking permits includes a higher cost for
the structure permit than the 10-hr on street parking permit. This is consistent with
the current structure of the permit costs and aligns with the operational and
maintenance costs of the two facilities – the cost of operating and maintaining the
structures are higher than on-street parking. Staff’s recommendation at this time is
to align the cost of the permits with best practices in curbside management to
encourage the use of structure parking for longer parking sessions, with street
parking being appropriate for short term, higher turnover parking.
5) The financial forecasts in Option B and C were made with different pass rates
than what staff is now recommending. How do we think this will impact the
calculations/forecasts made? How will this reduce the change in financial
position in Table 4?
With any of the three options, staff is recommending the costs of parking permits
to be $60 for the monthly 10-hr permit and $45 for the parking structure permit.
Staff anticipates this change would be revenue neutral in that a reduced parking
structure parking permit cost would incentivize an increase in the total number of
parking structure permits purchased. Staff will continue to monitor permit
purchases, revenue, and usage and report revenue received during the City’s
quarterly financial reports.
6) When does staff anticipate the technology plan to be ready for release and
will it evaluate costs of implementing the new technology proposed?
Staff anticipates presenting the technology implementation plan to Council with
costs and budget plans for implementation in Winter 2024.
Item 4.a Parking Rate Study Review and Consideration of Potential Rate Adjustments Page 3
7) In table 4, we generally see increased changes in our financial position
projected until 28-29. Then, things decrease pretty significantly. What is the
cause of this?
The variances in Change in Financial Position for all options are due to capital
projects budgeted for FY 2024-25 through FY 2028-29. At the November 7, 2023,
Council meeting, staff presented a Parking Fund Forecast which included
reductions in Parking Structure Asset Maintenance project funding in order to
provide more funding for parking rate relief. The Parking Rate Study options
include the same reduced capital project budgets as part of the Expenditures
shown in Table 4 on page 24 of the agenda packet.
8) Currently, there is an overnight rate that is different than the daily rate. In the
proposed resolutions for Option B and C, this is eliminated for the structures
and only the $8 daily rate applies. How will this change enforcement of
people staying overnight in the structures, logistically?
Parkers will be able to park vehicles overnight and pay the max daily rate of $8 per
day under the new rate structure. Parking staff will monitor the overnight parking
usage. If necessary, a follow-up resolution or ordinance will be presented to
establish regulations for overnight parking if storage of vehicles in parking
structures becomes an issue. Additional rate changes are not anticipated.
9) It looks like the occupancy rate of downtown parking has been reduced from
62% to 50% or 58% to 51% for the time periods measured. Is this correct?
Correct. The occupancy study performed in March 2024 for the Parking Rate Study
shows a reduction in total average peak occupancy when compared to the
occupancy study performed in July and September 2022 for the Access and
Parking Management Plan. Parking demand is measured by percent of spaces
occupied at a given time and varies (?) from day to day, month to month, and even
seasonally. The data collected in 2022 is referenced since it is the most recent
data set but does not provide a true “apples to apples” comparison because of the
difference in the time of year of when the occupancy studies were performed.
10) Have you looked at the financials if the occupancy was back at 2022 levels
or even further back prior to the pandemic? For example, how much
additional revenue would be raised if on-street paid parking occupancy was
back at the 2022 numbers?
No, the financial model scenarios developed by Dixon Resources Unlimited for the
Parking Rate Study do not include alternatives whereby the occupancy levels used
for the models are those observed in July or September 2022 when the last
occupancy study was performed. The scenarios were based on data collection
from specific dates in February and March 2024. Analysis of historical occupancy
data was not part of the scope of the current parking rate study.
Item 4.a Parking Rate Study Review and Consideration of Potential Rate Adjustments Page 4
11) If the occupancy was back at the 2022 numbers, how would that affect the
recommended Option C hourly rates to keep the same financial position
result?
Parking occupancy for the Draft Parking Rate Study report was analyzed based
on data collection from specific dates in February and March 2024. The occupancy
data was used to produce block-by-block analysis to assist in the generation of the
financial forecasting in the rate study report. It would be logical to assume that
when parking occupancy rates increase, there would be a corresponding increase
in revenue; but that could also be a function of more customers using lower cost
parking permits or it could also be a function of shifting more higher revenue per
hour on-street customers to lower cost per hour parking structures.
12) Have sales tax revenues been considered? Does a reduced occupancy also
affect sales tax revenues such that the city is taking a loss there as well?
Impacts of parking rates on sales tax revenue was not included in the study’s scope
of work. The staff report does have a high-level discussion of sales tax revenue
beginning on packet page 20.
13) Is the financial model used to calculate the options available to the public so
that the public could create their own scenarios?
No. The consultant hired to prepare the Parking Rate Study report has a
proprietary financial modeling tool that is not available for public use. Dixon
Resources Unlimited provided 16 financial modeling scenarios based on the scope
of their contract to assist staff in determining the best options for Council
consideration.
14) Can an appendix with the results of the community survey be provided?
Please refer to Attachment A of the draft Parking Rate Study, beginning on packet
page 51, for the community survey results.
ATTACHMENT
A – Memo regarding Costs for Cultural Arts Parking District Structure Viewing Deck
City of San Luis Obispo, Council Memorandum
Sunday, February 04, 2024
TO: Derek Johnson, City Manager
FROM: Madeline Kacsinta, Capital Improvement Program Administrative Manager
SUBJECT: Costs for Cultural Arts District Parking Structure Viewing Deck
Dear Mr. Johnson,
As we progress with the construction of the Cultural Arts District Parking Structure, I want to provide you with
an update on the associated costs with the viewing deck, taking into consideration a decision made during the
design phase.
During the design phase, the City made a strategic decision to repurpose a portion of the top deck into an event
space, allowing individuals and organizations to rent the area for various events. While this innovative addition
aligns with the City's commitment to enhancing public spaces, it comes with certain short-term and long-term
financial implications. Costs below cover design, construction, and materials related to the enhancements
described.
Short-Term Costs:
1. Construction and Material Costs:
o The additional requirements for the viewing deck, including increased load capacity, stair
enclosure drainage, fire protection enhancements, roof extension for tower #3, and
modifications to stairs #2 and #3, necessitated an investment of approximately $420,000.
2. Design Costs:
o The incorporation of the viewing deck scope mid-contract increased the initial design cost from
$7,800 to a total of $27,300.
3. Fees:
o A fee of $5,000 for a Fire professional and $42,500 for A3 Occupancy were essential
components of the short-term costs.
4. Total Short-Term Costs:
o The cumulative short-term impact costs for the viewing deck amount to $464,800.
Long-Term Costs:
1. Loss of Parking Spaces:
o Due to necessary ADA upgrades, the construction will result in the loss of 4 parking stalls. This
loss will translate into ongoing revenue implications for the Parking Division.
o According to FY2023, the per structure space revenue is $2,765/year when adjusted for the
recent rate increase.
o Over a 30 year period, the 4 parking spaces removed would equate to a Net Present Value of
$104,262 based on an interest rate of 10%.
Costs for Cultural Arts District Parking Structure Viewing Deck Page 2
2. Reduction in Solar Power:
o The transition of parking spaces to habitable areas led to the removal of solar panels, causing a
16% reduction in Photovoltaic (PV) capacity. This is expected to result in increased electrical
costs for the city after the project is completed, compared to what it could have been prior to
including the viewing deck.
Please note that this memo is not intended to halt the ongoing construction but to apprise you of the financial
implications associated with the addition of the viewing deck. If you have any questions or require further
details, feel free to reach out.
Sincerely,
Madeline Kacsinta
Capital Improvement Program Administrative Manager
E MKacsint@slocity.org
T 805.781.7094