HomeMy WebLinkAbout06/01/2010, B3 - PARKING ENTERPRISE FUND REVIEW 2010 council D�
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CITY OF SAN LUIS OBISPO
FROM: Jay D. Walter, Director of Public Works
Prepared By: Robert Horch,Parking Services Manager
SUBJECT: PARKING ENTERPRISE FUND REVIEW 2010
RECOMMENDATION
1) Review and accept the 2010-11 Parking Enterprise Fund Review.
2) Conceptually approve the Parking Enterprise Fund budget of 2010-11, with final action
on June 15,2010 with the adoption of the 2010-11 Budget.
DISCUSSION
Report In Brief
Overall the Parking Fund is healthy and can afford its current and anticipated expenses, capital
projects, and debt service obligations. The fund has been impacted by the present economy but
should be able to weather this downturn if'scheduled revenue increases take place. The current
fund analysis indicates that the Parking Fund can afford the Palin Nipomo parking structure, which
has begun architectural design and environmental review this year. The construction is forecast to
begin at the earliest in 2014-15,estimated to cost$20 million with bonding for$15 million and a$5
million contribution from working capital. During the same fiscal year, the debt service for 842
Palm Structure and the original Marsh Street Structure will end. A later construction start (for
Palm-Nipomo) than currently forecast will only improve the overall health of the fund,
The Garden Street Terraces project was analyzed under the Council approved 2006 MOU
agreement. Since the City Council will review the Final EIR for this project during the same June
1'` meeting, staff could not forecast these new terms and the impact on the Parking Fund. The
detailed assumptions from the 2006 MOU are found in Attachment 1. However, should Council
approve the new terms currently recommended, it will only improve the financial outlook for the
Parking Fund.
Planned increases to parking structure rates and 10-hour meter rates were delayed last year. These
increases have been forecast in this fund review as well as periodic increases of 10% every three
years. If we do not move forward with smaller, more frequent rate increases it creates a situation
where the City faces a more difficult time implementing larger increases for rate payers. Rate
increases are always controversial, but are necessary to keep pace with increased costs and to be
able to afford the Palm Nipomo parking structure on a certain schedule.
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Parking Enterprise Fund Review 2010 Page 2
2009-10 Parking Accomplishments
Although this report concerns financial and budgetary information, it is important to look back at
the accomplishments that have occurred during this past fiscal year. Council's approval of the
Parking Fund budget allows the City to provide improved services and support. The following is a
list of highlights that Parking Services have been able to accomplish in the 2009-10 fiscal year.
1. Downtown beautification of parking lot landscape planters.
2. Downtown Champion work by Parking Services Manager.
3. Replacement of 130 residential parking permit signs in two districts.
4. Palm Nipomo Parking Structure design and environmental RFP process.
5. Reapplication of non-slip stairway edging on the 919 Palm stairways.
6. Implementation of computerized citation writers for the SNAP program.
7. Negotiations and leasing of two of four commercial spaces at the Marsh Structure.
8. Analysis and calculation of Police-issued parking fines for the General Fund.
9. Hiring and training of one Administrative Assistant and three booth attendants.
10. Completion of a staff training center(IT equipment)in Parking Service Office.
The Effect of the Current Economy
The economic downturn continues to affect Parking fund revenues. Some revenue sources are
projected to be lower than the year before, while others are about the same or have increased
slightly because of the meter rate increase in the core occurring last year. There are fewer vehicles
parking in the Downtown, however, parking on-street remains the highest demand parking area,
followed by parking lots and then parking structures. The parking revenues in 2009-10 reflect this
trend.
2008-09 2009-10
Revenues Actual Projected +or- %
Metered Lots 362,800 394,600 31,800 9%
Meters on Street 1,036,000 1,152,100 116,100 11%
Structures 743,000 706,100 -36,900 -5%
Long Term parking 376,900 254,500 -122,400 -32%
Leases 216,400 197,800 -18,600 -9%
Parking In-Lieu 15,100 13,200 -1,900 -13%
Parking Fines 770,500 697,000 -73,500 -10%
Investments 442,100 197,300 -244,800 -55%
Totals 3,962,800 3,612,600 -350,200 -9%
Overall revenues are down 9%, or $350,200, based on projections for 2009-10. Meter revenue for
both parking lots and on-street has increased by 20%. Parking structure revenues are down by 5%
as fewer people utilize the structures. Long-term parking revenues are down by 32% because the
City has sold fewer 10-hour meter permits and proxcards for the parking structures. Lease revenues
are down by 9% because of two remaining vacant commercial spaces at the Marsh structure. Staff
has had a difficult time attracting tenants to these spaces, despite offering below market rates. Staff
was optimistic that all lease spaces would have been occupied; however that is not the case.
Parking fines are down by 23%, which could be attributed to higher fines from the addition of State
and County surcharges (making parkers more vigilant about avoiding citations), the transfer of the
Police Department parking fines to the General Fund, and fewer parking citations being issued.
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Parking Enterprise Fund Review 2010 Page 3
Investments are 55% lower from the prior year; however this is better than originally anticipated at
$141,200, due to higher investable balances than projected. All of the revenue fluctuations listed
above have resulted in an overall decline in revenues by 9%. If investment revenues were removed
from the Parking fund analysis,revenues would only be down by 3%.
Operating Budget Reductions
Similar to other operating budgets, the Parking Enterprise Fund continues to look for opportunities
to reduce costs, increase revenues and become more efficient. Last year the Parking Fund reduced
operating costs by$50,000. A constant challenge for the Parking Fund is finding a proper balance
between service reductions and projected revenues. Should the Parking Fund reduce services too
much, it could adversely affect projected revenues. For example, if guard service were cut in the
parking structures the public could be less inclined to park in a structure and structure revenues
could decline. In order to strike a balance between the service reductions and minimize the effect
on revenues, staff recommends the following, areas for reductions. These reductions provide a
$12,100 operating budget savings in the 2009-10 fiscal year and$35,500 in 2010-11.
Reduction Reduction
Reduction Service Impact 2009-10 2010-11
Electricity Rata Reduction No impact (900) (10,970)
Advertising Reduced advertising of parking programs (1,600) (3,400)
Printing Reduced brochures,maps,ticket stock,etc. (8,000) (7,530)
Contract Services(Elevator) Non-contract repairs will require special approval (6,000)
Education&Training Reduced staff training (1,600) (1600)
Trips&Meetings Reduced staff attendance at off-site meetings (2,000)
Operating Contingencies Reduction in unallocated materials and supplies (4,000)
Totals (12,100) (35,500)
Pending Rate Increases
Last year Council delayed implementation of increases to parking structure rates and 10-hour
meters located outside of the downtown core. Council approved and passed a resolution and an
ordinance to increase both rates on July 1, 2010 from$0.75 an hour to $1 an hour. The purpose for
these increases was to provide an additional funding source for the planning and debt service of the
Palm Nipomo parking structure. The increases were small adjustments spread over several years to
lessen the impact on the rate payers. This is the.last of a series of incremental increases that date
back to 2006. These increases have been programmed into this fund analysis.
Palm Nipomo Parking Structure Project
In late 2009 City Council approved the request for proposal (RFP) for the architectural design and
environmental review for the Palm Nipomo parking structure and authorized the City Manager to
award the contract if within the project budget. During the past year staff went through a very
competitive RFP process. Currently staff is working on the final contract terms with the preferred
contractor and hopes to have an agreement in place in June 2010. Staff recommends moving
forward with this capital project even though space is currently available in each of the parking
structures. Once the Chinatown and Garden Street Terraces projects begin, the Downtown will
require additional public parking as these projects include the removal of existing parking lost
thereby increasing parking demand. Knowing that this is a large capital project, staff does not
advise waiting for parking structures to reach full capacity before moving forward with design.
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Parking Enterprise Fund Review 2010 Page 4
From a financial standpoint,this may be the best opportunity to move forward on the Palm Nipomo
parking structure project due to the favorable bidding climate for parking consultants,architects and
their subcontractors. As such, the City may have the opportunity to obtain these services at a
competitive cost. Since the City does not anticipate construction on the project until 2014-15 at the
earliest,it would be preferable to keep this project moving forward to perform architectural design,
environmental review and obtain project entitlements.
Council Request Follow up
During the 2009 Parking Fund Review, Council asked staff to provide analysis on:.
1. Implementing even greater hourly differentials between the core meter rates and the non-core
meter rates as a way of possibly encouraging more drivers to park in the areas with less parking
demand.
2. Charging for parking on Sundays as a way of further strengthening revenues in helping pay for
the Palin-Nipomo parking structure.
Originally Council asked staff to bring analysis of these issues in March 2010. Staff asked to
postpone the analysis due to the unfavorable economy and the expanded work load of the Parking
Manager as the Downtown Champion. Staff has not performed the analysis because of the afore-
mentioned reasons and staff continues to believe that the economy has not stabilized sufficiently to
consider more increases to parking fees or the addition of Sunday parking services. Both
considerations would increase staffing(because Sunday enforcement and booth attendants would be
required) and necessitate the investment into new payment systems requiring more parking capital.
Downtown businesses may perceive this as too large of an increase to costs and parking rates at this
time. Unlike the quarter(25 cent) increase this year, staff recommends postponing consideration of
these issues until the economy stabilizes and to allow more time for analysis. The 25-cent increase
is small and is not anticipated to be a significant an increase on the public.
Downtown Association Concerns
The Downtown Association Board of Directors is recommending that Council postpone for at least
one year the proposed increase in parking fees scheduled on July 1, 2010. The Downtown
Association does not concur with the approved and scheduled rate increases of$0.75 to $1 an hour
for the structures and 10-hour,non-core meters. The Downtown Association is concerned about the
effect that fine rates increased to $30 less than a year ago have had on parking and that many
downtown businesses are still struggling in the present economy.
ALTERNATIVES
1. Direct staff to wait until July 2011 to increase structure and low-rate meter rates as
the Downtown Association is recommending.
Some economists are predicting that the economic downturn will begin to level out, with a slow
and gradual recovery. In line with the economic forecast,the City could expect to be faced with the
same rate increase decision a year from now. All increases to parking rates are difficult even in
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Parking Enterprise Fund Review 2010 Page 5
good economic times. Last year the increase to the high rate of core parking meters did not result in
any complaints or lower parking demand on the street. If Council postpones all increases, the
Parking fund will not be able to provide funding to construct the Palm Nipomo parking structure
when it is needed. Some limited increases are necessary to keep up with higher expenses. Staff
does not recommend this alternative because it defers an increase of approximately $365,000 in
annual revenues.
2. Direct staff to complete the analysis regarding charging for parking on Sundays and
to implement a higher differential between the structure rates and the core meter
rates.
This substantial increase may not be viewed favorably by the public or local businesses, and as
noted previously in the report, the Downtown Association is concerned with the scheduled increase
of$.25 an hour. When Sunday enforcement was considered in the past it was met with opposition
by many downtown church groups, but supported by business. Staff expects a similar reaction,
which would lead Council to a very difficult decision. Council could raise the core meter rates to
have a greater differential between structure rates and non-core meters, but it would require a
capital investment to replace the current core meter equipment because they could not accept
enough change. Both of these options need to be analyzed, and additional expenses to the Parking
Fund weighed against potential revenues. Staff does not recommend this alternative at this time.
ATTACHMENTS
1. 2010 Parking Fund Analysis
2. Downtown Association Memorandum of May 3,2010
T:\Council Agenda Reports\Public Works CAR\20I0\Parking\Enterprise Fund Rvw 2010\CAR 2010 Pkg Fund Review v3.DOC
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ATTACHMENT 1
2010 Parking Fund Analysis
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June 1 , 2010
Prepared by the
Public Works Department
city Of san lues OBI SPO
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Page 2
City of San Luis Obispo
2010 Parking Fund
TABLE OF CONTENTS
I. OVERVIEW
II. 2009-11 FINANCIAL PLAN
A. Summary of Operating Programs
B. Significant Operating Program Change Requests
C. Capital Improvement Plan Requests
D. Debt Service Payments
M. ASSUMPTIONS
IV. EXHIBIT A —2010 FINANCIAL SCHEDULE
Attachment 1
Page 3
city of
san IDIS OBISpo
2010 Parking Fund Report
I. OVERVIEW
This report presents the financial condition of the Parking Fund, based on the revised 2009-11
Financial Plan: 2010-11 operating program budgets, and recommended program and capital
requests to address the identified needs in the Parking and Access Plan, capital improvement
projects, and adopted city financial and infrastructure maintenance policies. The Chinatown and
Garden Street Terraces projects have been programmed into the 2010-11 Fiscal Year, however
these projects may or may not occur in the time frames projected or may change during the
approval process and environmental review stages. The next parking structure at Palm and
Nipomo Streets has also been programmed into the 2009-11 Financial Plan as well.
H. 2009-11 FINANCIAL PLAN
A. Summary of Operating Programs
2009-10 2010-11
BUDGET BUDGET
Staffing 960,700 985,500
Contract Services 534,000 536,400
Other Operating Expenditures 172,300 179,500
Operating.Cost Reductions -12,100 -35,500
Minor Capital 0 0
Total Parking Services $1,654,900 $1,665,900
83 ��
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B. Capital Improvement Projects
2009-10 2010-11 201142 2012-13 2013-14 2014-15
BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET
Completed Projects 62,900
Carryover CIPS to Completed Projects 61,000
Palm Nipomo Design&Environmental 1,547,000
Traffic Signal Broad&Pacific 21,300
Garage Renovation& Repair 15,800
Garage Artifacts Archeology 21,200
PD Dispatch Center&Radios 96,400
FoxPro Replacement 34,500
Parking Structure Equipment Upgrade 113,000
Parking Lot Reseal and Resurfacing 122,000
Purchase of 610 Monterey 650,000
Fleet Addition for back up Utility Cart 36,600
Fleet Replacement-Sedan and Utility Carts 96,880
Technology Infrastructure 3,800 12,000
IT Disaster Recovery Plan 1,100
IT Strategic Plan 7,700
Sharepoint Electronic Content Mgmt. 1,700
Office Software Replacement 6,500
Garden Street Advance per MOU 2,400,000
Palm Nipomo Construction 20,000,000
FRA Projection-Adjustment* 113,320 233,100 250;400 260,400
2,745,100 40,400 231,500 240,800 2,650,400 20,260,400
C. Debt Service Payments
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
BUDGET BUDGET BUDGET BUDGET BUDGET_ BUDGET
842 Palm&Marsh until Jun 2014 507,300 510,300 509;700 507,500 510,100
Marsh Expansion until Aug 2031 425,200 424,500 423,700 423,000 422,200 421,400
919 Pahn until Jun 2036 539,600 538,000 539,300 540,000 540,400 537,800
Dispatch Center Upgrade until✓un 2039 5,800 5,800 5,700 5,600 5,600 5,600
Police Radios until Jun 2019 4,100 4,400 4,300 4,300 4,300 4,300
1,482,000 1,483,000 1,482,700 1,480,400 1,482,600 969,100
III. ASSUMPTIONS
The following assumptions have been programmed into the long term forecast of the Parking
Fund. The Chinatown and Garden Street Terraces projects impact three of the City's parking
lots. The dates of when these projects occur are staff's estimate of the soonest they could occur.
If the projects occur later than projected it will allow for additional revenues to accumulate for
the Parking fund.
General Assumptions
1. Minimum working capital (reserve) should equal at least 20% of the Operating Program
expenditures according the City's fiscal policy and Standard and Poor's rating criteria.
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Page 5
Parking Lots
1. Assumes a conservative 1% growth in parking demand.
2. San Luis Obispo Ordinance No.1532 (2009) assumes a meter rate increase of $0.75 to
$1.00 for the low rate meters (primarily 10 hour meters) in 2010-11.
3. 10% rate increases are assumed for 2012-13,2015-16, and 2018-19 (every three years).
4. Section 2.4a of the MOU between the City of San Luis Obispo and Garden Street SLO
Partners, L.P. dated July 18, 2006, states that 0% of the parking spots for Lot 2 will be
available during the two year period of Garden Street Terraces Project construction..
However, due to the recent Planning Commission recommendation to remove the public
parking in this project all parking in Lot 2 will be eliminated (assumed to occur in 2012-
13).
5. It is assumed that some of the drivers who would have parked in Lots 2, 3, and 11 will
instead park in structures due to the loss of parking spaces for the Garden Street Terraces
and the Chinatown project. Due to the first 60 minutes free policy in the structures, it is
anticipated that only 50% of the revenues formally tied to Lots 2, 3, and 11 will be
retained through structure parking fees.
6. Parking revenues from Lot 3 and 11 will cease due to the Chinatown project construction
(assumed to begin during 2011-12)
7. Parking revenues from Lot 14 will cease due to the construction of the Palm Nipomo
parking structure (assumed to begin in 2014-15).
8. It is anticipated that the drivers who park in Lot 14 will shift to buying 10 hour meter
permits when Palm-Nipomo construction begin on the site of Lot 14 (assumed to begin in
2014-15).
Street Parking
1. Assumes a conservative 1% growth in parking demand.
2. San Luis Obispo Ordinance No. 1532 (2009) assumes a meter rate increase of $0.75 to
$1.00 for the low rate meters (primarily 10 hour meters) in 2010-11.
Parking Structures
1. Assumes a conservative 1% growth in parking demand.
2. San Luis Obispo Resolution No. 10102 (2009) assumes a structure hourly rate increase of
$0.75 to $1.00 an hour in 2010-11. The first 60 minutes free is retained. Subsequent
10% rate increases are assumed for 2012-13,.2015-16, and 2018-19 (every 3 years).
3. It is anticipated that some of the drivers who would have parked in Lots 2, 3, and 11 will
instead park in structures due to the loss of lot parking spaces. Due to the first 60 minute
free policy in the structures, it is anticipated that 50% of the revenues formally tied to
Lots 2, 3, and 11 will be retained through structure parking fees.
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Page 6
Long Term Parking
1. Assumes a conservative 1% growth in parking demand.
2. 10% rate increases are assumed for 2012-13,.2015-16, and 2018-19 (every three years).
3. Merchant validation increases from $45 a month to $60 a month based on increase to
structure rates in 2010-11.
Parking Leases
1. Assumes a conservative 1% growth in parking demand.
2. Trash lease revenues of approximate $2,000 annually for parking lot 2 will cease
beginning in 2012-13.
3. Section 3.1 of the MOU between the City of San Luis Obispo and Garden Street SLO
Partners, L.P. dated July 18, 2006 states $2.4 Million Parking Fund advance will be made
to the developer of the Garden Street Terraces Project to finance a new parking facility in
2013-14. In 2013-14 the developer will begin repayment to the City Parking Fund by
reimbursing $105,000 per,year for 30 years. The calculation of the $105,000 per year is
as follows: the amortization payment of$165,000 plus the supplemental parking,revenue
replacement payment of $28,000 reduced by the net realized increase in property tax of
$88,000:
Parking In Lieu
1. Garden Street in lieu fees are a result of lost parking spots due to the Garden Street
Terraces Project. Section 2.4a of the MOU between the City of San Luis Obispo and
Garden Street SLO Partners, L.P. dated July 18, 2006 states that the parking in lieu fees
will be $660,000 (22 parking spaces x $30,000/parking space) for the spaces lost due to
the Garden Street Terraces Project assumed to occur 2012-13.
2. Chinatown in lieu fees area a result of lost parking spaces due to the Chinatown Project.
According to the Second Modification to Option to Purchase Real Property, dated July 1,
2008, the EIR mitigation measure for loss of the parking spaces is approximately
$2,600,000 estimated to occur in 2011-12.
3. San Luis Obispo Resolution No. 9960, Section 4 states that the parking in-lieu fee will be
adjusted on July 1 of each year by the annual percentage change in the U.S. Bureau of
Labor Statistics consumer price index for all urban consumers for the prior calendar year.
2010-11 is assumed to increase by 1%. For 2011-12 onward a 4% CPI increase per year
is assumed, based on a 20 year historic CPI average of 3% (according to the Bureau of
Labor Statistics) plus 1% conservative growth estimate. The one-time Garden Street
Terraces Project and the Chinatown Project parking in-lieu fees are not adjusted by the
CPI.
4. Beginning in FY 2011-12, parking in lieu fee revenues reflect the anticipation that 3
parking spaces are being paid annually.
- Attachment
Page 7
Investment Earnings
1. Assumes projected interest earnings of 2% in 2010-11 and 3% in 2011-13 onward.
Parking Fines
1. Assumes a conservative 1% growth in parking demand annually.
2. Transfer of parking fines to the Police Department is approximately $60,000 annually
beginning in 2010-11.
3. 10% rate increases are assumed for 2012-13, 2015-16, and 2018-19 (every 3 years).
4. State and County surcharges of $10 per paid parking citation is added then deducted
each year for a zero net gain.
5. 9% decrease in fine revenues due to the loss of parking Lot 2 resulting from the
construction of the Garden Street Terraces Project assumed to begin in 2012-13.
6. 11% decrease in fine revenues due to the loss of parking lots 3 and 11 resulting in the
construction of the Chinatown Project assumed to begin in 201.1-12.
New Demand & Residential
1. Based on proposed new projects in downtown San Luis Obispo as provided by the
Planning Department, land uses are run through a demand model and are reduced by
parking available on site.
2. The average rate for the prior 3 years of roughly $1.00 per vehicle in structures, assumed
new demand will either compress existing demand or go directly to the structures.
3. The rate scheduled rate increase in 2010-11 and the subsequent increases of 10% every
three years are assumed in the new demand.
4. It is estimated that there is a base number of 500 parkers in the residential areas
surrounding the downtown, assumes 5% capture in the City's facilities, times 12 months
(500*0.05*12=300).
5. Assumes that monthly parking will be moved into the structures at a rate of $75 per
month with rate increases of 10% every 3 years starting in 2012-13.
6. Due to the downturn in the economy the new demand and residential calculations have
been moved out to 2011-12.
Transportation & General Government Expenses
1. Initial decrease of $7,600 in transportation expenses due to the loss of Lot 2 resulting in
the construction of the Garden Street Terraces Project assumed in 2012-13.
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Page 8
2. Initial decrease of $13,200 in transportation expenses due to the loss of Lots 3 and 11
resulting from the construction of the Chinatown Project assumed in 2011-12.
3. Initial $5,000 decrease in transportation expenses due to the closing of Lot 14 resulting in
the construction of the Palm Nipomo parking structure assumed to begin in 2014-15.
4. Percentage expense increases per year are based on the historical annual percentage
change in the Bureau of Labor Statistics Consumer Price Index. For 2010-11 is
estimated at 2%. For 2012-13 onward, a very conservative 4% expense increase per year
is assumed (based on 20 year historical average of the Consumer Price Index of 3%, as
reported by the Bureau of Labor Statistics, plus an annual cushion of 1%).
5. Cost adjustments reflect projected annual CPI increases.
6. 2009-10 transportation expenses were decreased due to operating budget reductions of
$50,000 with additional reductions of $12,100 programmed in the last quarter of the of
2010. 2011-12 transportation expenses were decreased as a one time budget reduction of
$35,000.
Capital Improvement Plan (CIP) Expenses
1. The CIP is based on specific project requests for the 2009-11 budget as set forth in
Appendix B. For the "out years" some projects are detailed for 2011-13, the overall cost
is based on the forecast presented to Council.on March 2009 ($200,000 per year adjusted
for inflation).
2. Section 3.1 of the MOU between the City of San Luis Obispo and Garden Street SLO
Partners, L.P. states that a $2.4 Million Parking Fund advance will be made to the
developer of the Garden Street Terraces Project to finance a new parking facility within
30 days following the first date on which the 40 public parking spaces in the new parking
facility are available for use by the public. It is assumed that the advance will occur in
2013-14. Although this MOU will be modified it is assumed that this advance will still
occur for this budget.
3. 2014-15 includes a $5,000,000 contribution from working capital for the construction of
the Palm Nipomo parking structure and $15,000,000 in net proceeds from the Palm
Nipomo bond issuance.
4. Percentage expense increases per year are based on the historical annual percentage
change in the Bureau of Labor Statistics Consumer Price Index. For 2010-11 is estimated
at 2%. For 2012-13 onward, a very conservative 4% expense increase per year is
assumed (based on 20 year historical average of the Consumer Price Index of 3%, as
reported by the Bureau of Labor Statistics, plus an annual cushion of 1%).
Debt Service
i
Attachment 1
Page 9
1. Assumes a 30 year level debt service at 7%, no capitalized interest, net proceeds of
$10,000,000 and bond issuance on November 1, 2014. First interest payment will be
due June 1, 2015 and the first principal payment due December 1, 2015.
Attachment 1
Page 10
EXHIBIT A
2010 PARKING FUND
FINANCIAL SCHEDULES
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0511712010 14:31 SW DOWNTO{ . .SOCIATION (FAU 812647 P.0011001
ATTACHMENT
3May S 2010
To: Mayor Romero and City Council Members
San Luis Obispo
Downtown F orate Cash,Executive Director
ASSOCiation SLO Downtown Association
PO.Bar 1402
S,ri&obispa Re: Proposed Parkdng Fee Increase
ragromia93406 The Downtown Asweiation Parking and Access Committee recommended to the
Pham 805-MI-0236 Board of Directors—and the Board of Directors subsequently approved a motion
Fax ao5-7s1-2647 recommending—that Council postpone for at least one year the proposed:incresse
www.downbmvralo.com in parking fees that will be discussed at the June 1,2010 Council meeting.
It has been less than a year since the last major(non City)hilm was imposed.
People are still reeling from that one and while the Downtown Association joined
ranks with the City to publicly explain the basis for the increase,the rationale
mattered little when it came time for offenders'to pay the$30 fine. Yet another
buce at this time will not be well received and may ultimately have a negative
impact on downtown sales.
Downtown Association members,too,me likely to view the increase as non-
business friendly particularly when many are trying to remain afloat dealing with
not only the economy but construction,surrounding vacancies,.increased 1=ansient
and decreased tourism jssues.
The Board believes the City runs an efficient and well-managed parldug program;
the increase appears to be justified,though not at this time. Please consider
delaying the fee increase until July,2011. Meanwhile,the Downtown
Association Parking and Access Committee is committed to working with the,
Parking Department in any way to keep costs down and revenues sufficient to
continue its operation.
cc_ SLO Downtown Association Board of Directors
Robert Horcb,City Parking Manager
SLO Downtown Association Parking and Access Committee
03 - 1
council mcmoizanbum
RECEIVED 02
June 1,2010
JUN 0 3 2010 83 X02
TO: City Council 611110 � / T6
SLO CITY CLERK
FROM: Jay D. Walter, Public Works Director L+C ! Cou uCc L
c°(T" fka2
VIA: Katie Lichtig, City Manager Ase- cc" Ata 2
SUBJECT: Second Response to Council Questions on the Parking Fund Review
Several questions and observations were posed by City Councilmember John Ashbaugh today
concerning the Parking Fund Review. Below are staff's responses to those questions and
observations.
1. For purposes of enhancing the appeal of our ground-floor retail locations in the Marsh
Street garage,have we ever considered offering them to a car rental agency, providing
also some surplus space at the top of the garage for a small part of their rental fleet?
These lease spaces are within the "Office" zone which does not allow for auto vehicle sales and
rental under City zoning ordinances. So we could not be able to consider this use at our lease
spaces at the Marsh Street Structure unfortunately.
2. How long ago did we go to the $0.75/hour rate (after the first 60") in the garages? Wasn't
it $0.60 to begin with? Is there any specific rationale for going to $1, rather than a lower
figure like $0.85 or 0.90?
We increased the structure rate from 60 cents to 75 cents an hour in 2004. The rationale for the
quarter increase was based on several factors. One was the objective that we had to increase our
revenue base to afford the design, construction, debt service, and the operations for the next
parking structure. The task force that made this recommendation looked at many different
amounts and options to get the amount of revenue needed to sustain that structure.
Another factor was that operationally we had service problems keeping enough change on hand
in our booths with rates not based on a quarter. These rates caused longer exit lines, unhappy
customers, and took more staff time. Booth attendants frequently ran out of change with our
non-quarter rate. Support parking staff was called on to get more nickels and dimes with rates
that were not divisible by a quarter. If they could not make change we lost revenue because we
had to let the customer pay less in order to exit. Often the person getting change was the extra
attendant at Marsh on the weekends which increased our lines to get out when the extra lane was
closed. All of this created a service problem and added to the reasons why people told us they
would not park in a structure. So the quarter increase was also based on our operational
problems. Staff recommends future increases based on fractions of$0.25 or 25 cents.
We could have a smaller increase but it may not provide sufficient revenues and would create
service problems.
Second Response to Council Questions on the Parking Fund Review Page 2
3. If we were to implement a lower rate increase such .85 or .90 in the garages, OR
alternatively delay the planned increase further— say, at least six months until after the
holidays, or even a year as suggested by the Downtown Association—what in general
would be the impact on the timing of the Palm-Nipomo Parking Structure? Would we be
able to retain the timetable we have now? Or if we did so, would it merely mean that we
have to borrow that much more when we're ready to break ground?
The impact is forecast at $368,000 in annual revenues in the parking fund if we postpone the
scheduled increases. If Council decides on another amount the revenues will be less than that
amount. The impact on the Palm-Nipomo Parking Structure in the short term is not that
significant because we currently have funding for the design and environmental review for the
structure. However the longer we wait to make incremental increases, will mean that a future
Council will have the difficult task of increasing rates at a higher amount in order to construct
and operate the Palm-Nipomo structure. The longer we wait will also mean that the Parking
Fund would not be able to use working capital to buy down construction costs as we are
forecasting now. This means higher annual debt service for 25-30 years after construction.
4. "Overall revenues are down 99yo, or$. 50,200, based on projections for 2009-10. Meter
revenue for both parking lots and on-street has increased by 20% . "Am I correct in
noting that metered lot revenues are up by 9% and street meters up by I I% -but adding
those two only gets us to an increase of 10.6% for both metered lots and street meters
(rather than 20%)
You are correct, thank you for clarifying this calculation.
5. Another possible typo: Last paragraph in the report,p. B3-5, discussing Alternative 2,41i'
sentence: "Council could raise the core meter rates to have a greater differential
between structure rates and non-core meters, but it would require a capital investment to
replace the current core meter equipment because they could not accept enough
change. "The subhead above this refers to possible direction to "implement a higher
differential between the structure rates and the core meter rates." I assume you mean core
meters,rather than non-core (as in that 4t'sentence). In response, I would support a
capital expenditure to replace the core meters,but I would not support such an action
merely so that they could accept more change; rather, we should consider"smart meters"
that take credit cards, and particularly meters that can be adjusted to charge more for
peak-hour demand periods. That is, I know, an entirely different conversation,but that's
my position at this time.
The parking structures and the non-core meter rates have generally been the same amount to
encourage long-term parking. Both the structure rates and the non-core meter rates are currently
$.75 an hour, scheduled to increase to $1 an hour. Staff assumed that increasing the differential
between the core meter rates and the structures would mirror that general principal of keeping
the non-core and structure rates the same. So staff assumed that the structure and non-core meter
rates would be "x" and the core meters would be "y." The rates can be different and in fact one
consideration was having a third tiered rate on the streets and parking lots downtown.
Second Response to Council Questions on the Parking Fund Review Page 3
Staff agrees that considering a capital expenditure for payment devices that accept credit cards
do benefit our customers and need to be explored. There are several options staff has begun
research on and none of them allow of more change. They all include credit card acceptance and
some include bill acceptance. However, we have to afford the costs of the device itself and
cover the costs of communication and the bank charges involved with credit card acceptance..
T:\Council Agenda Reports\Public Works CAR\2010\Parking\Entetprise Fund Rvw 2010\Red File 2.doc
x
council memoRAnbum
May 28, 2010 2"COUNCIL GrCDD DIR
L'reA18C7r*MC-4 dFIN DIR
CrACA6At*t Aza rFIRE CHIEF
TO: City Council 13030TTORNEY 2`0W DIR
CLERK/ORIG IYPOLICE CHF
11 DEPT HEADS ['REC DIR
FROM: Jay D. Walter, Public Works Director *' ems_ 2-UTIL DIR
_r'-fAk&A9- 2-HR DIR
VIA: Katie Lichtig, City Manager
SUBJECT: Response to Council Questions on th Parking Fund Review crc
Several questions were posed by City Council members concerning the Parking Fund Review.
Vice-Mayor Carter asked if staff could provide tables of prior parking meter and structure rate
increases and provide the timing for Chinatown and Garden Street Terraces. Councilwoman
Marx asked staff to provide financial numbers should the City decide to charge for parking on
Sundays afternoons after church services.
Prior Parking Rate Increases
The following charts provide the known parking rate increases for the parking meters and
parking structures provided by the City.
Low-rate meters outside of downtown core(typically 10 hour time limits)
Hourly Hourly %
Year Rate From Rate To Increase
1947 $0.00 $0.05
1982 $0.05 $0.10 100% RED FILE
1988 $0.20 $0.30 50% --- MEETING AGENDA
1994 $0.30 $0.40 33% PA 1. //b ITEM #
1998 $0.40 $0.50 25%
2003 $0.50 $0.60 20%
2006 $0.60 $0.75 25%
•2010 $0.75 $1.00 33%
pending increase
High-rate meters in the downtown core (typically 2 hour time limits)
Hourly Hourly %
Year Rate From Rate To Increase
1947 $0.00 $0.05
1977 $0.05 $0.10 100%
1982 $0.10 $0.20 100%
1988 $0.20 $0.30 50%
1991 $0.30 $0.50 67%
1994 $0.50 $0.60 20%
1998 $0.60 $0.70 17%
2003 $0.70 $0.80 14%
2006 $0.80 $1.00 25%
A C '
1
Response to Council Questions on the Parking Fund Review Page 2
Parking Structure rates
Hourly Hourly Free Time %
Year Rate From Rate To Minutes Increase
1987 $0.00 $0.25 0
1991 $0.25 $0.40 90 60%
1992 $OAO $0.50 90 25%
2003 $0.50 $0.60 60 20%
2004 $0.60 $0.75 60 25%
"2010 $0.75 $1.00 60 33%
pending increase
Timing of Chinatown and Garden Street Terraces Projects
For the purposes of the Parking Fund Review, staff report forecast the "soonest" fiscal year that
these projects would occur and not when they are likely to occur. So if these projects occur in a
later fiscal year than is forecast, it will only benefit the Parking Fund with increased revenues for
the parking lots that are taken for these projects. Determining the likely construction dates of
these projects is very difficult to determine due to a host of factors, one being the uncertain
financial markets for financing.
Chinatown has completed its entitlements in December 2009. The Option Agreement for
acquisition of the City parking lots has a timeline of July 2014 before building permits must be
issued for this project. To meet the terms of this agreement construction permits would have to
be filed by July 2013, at the latest, to allow for sufficient review by the City. There have been
discussions of a phased construction that may mean the parking lots under construction will not
be taken when the construction permit are issued. One lot may be taken immediately, leaving
one for public parking, or both could be taken at the same time.
Garden Street Terraces expects to complete its entitlements in June 2010 followed by a redesign
of the project, taking approximately a year. The Economic Development Manager expects the
hearings for the redesign to be concluded by the summer of 2011 and issuance of construction
permits a year later in 2012.
Financial Numbers for Charging on Sunday Afternoons
A quick estimate of charging on Sunday afternoons from 12 pm to 6 pm using 2009-10 revenues
and costs is provided below. This is not a detailed analysis because that would take a bit more
time for us to determine.
Revenues 320,000
Staffing Costs (31,200)
Contract Services Costs (16,000)
Printing Costs (4,000)
Utilities (3,000)
Operating Materials (4,000)
Estimated Net Revenue 261,800
T:1Council Agenda ReportsTublic Works CAR12010\Parking\Enterprise Fund Rvw 2010\Rcd File Pkg Fund.doc