HomeMy WebLinkAbout06/04/2002, 8 - PARKING FUND REVIEW 2002-03 co un a l M.efi,Dac
04-02
acjcnba RepoRt Item Numhr+
8
CITY O F SAN LUIS O B I S P O
FROM: Michael D. McCluskey, Public Works Director�r
Prepared By: David Elliott, Administrative Analyst
SUBJECT: Parking Fund Review 2002-03
CAO RECOMMENDATION
1. Review and discuss the worksheet"Changes in Working Capital - Parking Fund"
2. Approve a CIP project request for the Palm-Morro Parking/Office Building ($8,481,400
cost for the Parking Fund in 2002-03)
3. Adopt a resolution that adjusts two parking fines to be consistent with the county-wide bail
schedule
4. Direct staff to:
a. analyze the desirability and effects of maintaining the linkage between garage fees
and meter rates
b. meet with the stakeholders who would be affected by possible garage fee increases
C. return to the Council in fall 2002 with recommendations for possible garage fee
increases that would take effect at the same time as scheduled meter rate increases
DISCUSSION
Worksheet Assumptions
The attached worksheet, "Changes in Working Capital - Parking Fund", projects sources of
revenue and uses of revenue for the parking fund over the five-year period from 2002-03 to
2006-07. Worksheet projections are based on the following assumptions:
1. Revenue from parking meters, garage fees, passcard sales, meter permits, and fines will
increase by one percent each year due to increased parking demand.
2. Parking meter rates will increase by 10 cents per hour in January 2003 as called for in
Municipal Code Section 10.52.010..
3. Annual fine and forfeiture revenue will decline by $43,300 after the Court Street parking
lot is sold and development on the site begins.
4. Annual parking meter revenue will decline by $146,000 after the Court Street parking lot is
sold and development on the site begins.
5. Annual parking garage revenue will increase by $242,000 after completion of the Marsh
Street Garage Expansion in September 2002.
6. Annual parking garage revenue will increase by $130,800 after completion of the Palm-
Morro Parking/Office Building in September 2003.
7. Annual parking garage revenue will increase by $512,000 after completion of the North
Area Regional Facility(NARF) in 2006.
8-1
Council Agenda Report—Parking Fund Review 2001-02
Page 2
8. Annual building lease revenues will increase by $34,700 after completion of the Marsh
Street Garage Expansion in September 2002.
9. The Court Street development project will pay parking in-lieu fees in the amount of
$512,000 in 2002-03.
10. Ongoing operations appropriations will increase by three percent each year.
11. Annual operating costs will increase by $18,200 after completion of the Marsh Street
Garage Expansion in September 2002.
12. Annual operating costs will increase by $84,200 after completion of the Palm-Morro
Parking/Office Building in September 2003.
13. Capital project appropriations from fund balance will include:
a. North Area Regional Facility - Parking @ $140,000 for environmental review in
2002-03
b. Marsh Street Garage Repainting @$70,000 in 2002-03
C. Palm Street Garage Lighting Replacement @ $90,000 in 2002-03
d. Parking Lot Resealing @ $125,000 in 2002-03
e. Parking Lot Lighting Replacement @ $40,000 in 2003-04
f. Marsh Street Garage Lighting Replacement @$85,000 in 2004-05
14. Annual debt service for the Marsh Street Garage Expansion will cost about $547,500.
15. Annual debt service for the Palm-Morro Parking/Office Building will cost $472,100.
16. Annual debt service for the entire $28.9 million cost of the NARF project will be
$1,078,900 starting in 2005-06. Debt service on $1.3 million of this cost needed for land
acquisition and design will be $98,100 in 2004-05.
17. The Parking Fund share of proceeds from the sale of the Court Street parking lot will
amount to $1,471,500 in 2002-03.
18. The Parking Fund share of proceeds from a bond issue in the amount of$6,497,900 will
finance appropriations for acquisition of the Palm-Morro Office Building in 2002-03.
19. Proceeds from a bond issue in the amount of$24.9 million will finance appropriations for
land acquisition, design, and construction of the NARF.
Conclusions
From the worksheet Public Works has drawn the following conclusions:
1. Current parking rates plus scheduled future increases plus accumulated working capital
balances could cover all planned operating expenses, capital outlays, and debt service
obligations from 2002-03 through 2006-07, although debt service on the NARF project
would drastically reduce working capital balances in the last two years.
2. After building the NARF, increases in debt service would cause annual expenditures to
exceed annual revenues by $1.6 million in 2005-06 and $1.2 million in 2006-07.
Continuing to operate with these annual deficits would exhaust the working capital of the
Parking Fund and make the fund technically insolvent by 2008-09.
3. To avoid eventual insolvency, financing the NARF project would require additional
Parking Fund revenue, probably in the form of modest increases to link parking garage fees
to parking meter rates. Public Works is recommending direction from the Council to:
8-2
Council Agenda Report—Parking Fund Review 2001-02
Page 3
a. Analyze effects of maintaining the link between garage fees and meter rates. Ever
since the current garage fee structure was developed in 1991, garage fees and meter
rates have remained linked to each other. For example, non-core meter rates are
currently 50 cents per hour, which is also the hourly parking garage fee. ("Core"
meter rates are 70 cents per hour.) As noted in the assumptions listed above, effective
January 1, 2003 parking meter rates are already scheduled to increase by 10 cents per
hour, to 60 cents per hour for "non-core" meters and 80 cents for 'bore" meters.
However, no similar increase for parking garage fees has been adopted, although the
desirability of such an increase has been previously discussed with the Council. The
need to continue the past linking of garage fees and meter rates is underscored by two
factors: 1) as demonstrated in the conclusions stated above, revenue enhancements
will be required in order to finance future parking improvements such as NARF and
2) as the City converts surface lots to parking garages, such conversions must be
"revenue neutral'. They will be disadvantageous, rather than neutral, if there is a
significant difference between garage fees and meter rates.
b. Meet with the stakeholders who would be affected by possible garage fee increases in
maintaining this linkage with meter rates.
C. Return to the Council in fall 2002 with recommendations for possible garage
increases that would take effect at the same time as scheduled meter rate increases.
CIP Project Request
Attached is a CIP project request for the Palm-Morro Parking/Office Building. Approval of this
project request will provide the means for implementing the recommendations of another item on
the June 4, 2002 Council agenda regarding designation of the City as the tenant of the Palm-
Morro Parking/Office Building.
Purchasing and equipping the Palm-Morro Parking/Office Building upon its completion along
with related reconfiguration and life-cycle maintenance at City Hall will cost $13,097,200 in
2002-03. $8,481,400 of this cost will be borne by the Parking Fund and $4,615,800 will be
borne by the General Fund. Beginning in 2003-04, ongoing annual net costs will be $603,300 in
the Parking Fund and $237,400 in the General Fund.
Parking Fine Adjustments
The current fine for parking in a fire lane is $75, and the current fine for parking next to a fire
hydrant is $20. Public Works is recommending that these fines be raised to $103 and $50
respectively so that they are consistent with the county-wide bail schedule for similar fines in
other jurisdictions. No significant revenue increases would result.
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Council Agenda Report—Parking Fund Review 2001-02
Page 4
ATTACHMENTS:
1. Changes in Working Capital -Parking Fund
2. CIP Project Request–Palm-Morro Parking/Office Building
3. Resolution
BCouncil Agenda ReportsTarking Fund Review 02-03 v2
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ATTACHMENT I
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2001-03 Financial Pid. supplement: 2002-03 Budg, ATTACHMENT 2
CAPITAL IMPROVEMENT PLAN
PROGRAM: Parking
REQUEST TITLE: Palm-Morro Parking/Office Building
Project Summary
Purchasing and equipping the Palm-Morro Parking/Office Building upon its completion along with related recon-
figuration and life-cycle maintenance at City Hall will cost$13,097,200 in 2002-03: $8,481,400 in the Parking
Fund and$4,615,800 in the General Fund. Beginning in 2003-04,ongoing annual net costs will be$603,300 in
the Parking Fund and$237,400 in the General Fund.
Parking Fund
1. Purchasing a proportionate share of the land for a new parking and office building at 919 Palm Street will
cost$843,000..
2. Purchasing parking spaces in a new building at 919 Palm Street will cost $6,990,100 (net after acquisition of
4 dedicated spaces by the General Fund in the-amount of$145,000).
3. Overseeing construction of the new building at 919 Palm Street to ensure that it meets the requirements of
the City as the future property owner will cost$213,500.
4. Allowing for potential mitigation of a) impacts on archeological and historical resources and b) hazardous
waste for the Court Street development project will cost$78,000.
5. Allowing for project contingencies will cost$356,800.
188 above-grade spaces for general use,2 below-grade for public recharging of battery-powered vehicles,and 3 below-grade for library
parking
Total Parking Fund Cost: $8,481;400 ($6,497,900 to be debt financed at a cost of$472,100 per year; net annual
costs after accounting for net revenue increases,operation and maintenance and debt service will be$603,300.)
General Fund
1. Purchasing a proportionate share of the land for a new parking and office building at 919 Palm Street will
cost$329,500.
2. Purchasing 16,100 square feet of office space in anew building at 919 Palm Street will cost$2,782,700.
3. Acquiring 4 dedicated parking spaces in the new building at 919 Palm Street (after swapping 41 spaces at
other locations to the Parking Fund for 41 spaces in the new building) will cost$145,000.
4. Overseeing construction of the new building at 919 Palm Street to ensure that it meets the requirements of
the City as the future property owner will cost$83,500.
5. Installing furnishings, electrical cabling, communication cabling, computer network cabling, and other-inte-
rior improvements for the new office space at 919 Palm Street will cost$760,000.
6. Reconfiguring workspaces at 990 Palm to consolidate departments that are now divided at separate locations
will cost$350,000.
7. Allowing for potential mitigation of a) impacts on archeological and historical resources and b) hazardous
waste for the Court Street development project will cost$26,000.
8. Allowing for project contingencies will cost$139,100.
Total General Fund Cost: $4,615,800 ($4,125,300 to be debt financed at a cost of$299,700 per year;net cost af-
ter accounting for off-setting lease revenues and maintenance costs will be$237,400.
8-6
ATTACHMENT
Palm-Morro Parking/Office Building Page 2 of 7
Project Objectives
1. Provide public parking for the Court Street development project
2. Provide office space for City Hall operations over the next 20 years
3. Consolidate development review activities at one location
4. Reunite the inspectors with the engineers in the CIP Project Engineering Program
5. Provide flexibility to sell the 955 Morro Street property at some time in the future to facilitate development
of the Chinatown project
Existing Situation
As part of plans for retail development of the City-owned property at 999 Monterey Street(the Court Street park-
ing lot), the City and Court Street Partners LLC (the Copelands)have entered into a memorandum of understand-
ing that calls for the Copelands to construct a new building on Copeland-owned property at 919 Palm Street.
This building will include one below-grade level with 50 parking spaces, one at-grade level with 16,100 square
feet of office space, and four above-grade levels with 188 parking spaces. Upon completion, the City will pur-
chase the 919 Palm Street property and use the below-grade building level for non-revenue parking(including 45
dedicated City spaces, 2 spaces for public recharging of battery-powered vehicles, and 3 spaces for library staff
parking), the at-grade level for City offices, and the above-grade levels for public parking. A guaranteed maxi-
mum price for this property is included in the memorandum of understanding.
Goal and Policy Links
1. City General Plan, including Circulation Element
2. Conceptual Physical Plan for the City's Center(eliminating surface parking lots and building parking ga-
rages)
3. Parking Management Plan (supporting the Conceptual Physical Plan for the City's Center,providing parking
for visitors and employees, favoring parking garages as the best way to provide more parking spaces)
4. Major City Goal#13 in the 2001-03 Financial Plan(need for Civic Offices)
5. Memorandum of Understanding between the City of San Luis Obispo and Court Street Partners LLC,as
amended
Project Work Completed
1. The architect for the Copelands has prepared a conceptual design for the project.
2. The City has hired a construction management firm to oversee construction of the new building at 919 Palm
Street and ensure that it meets the requirements of the City as the future property owner.
Environmental Review
1. The Copelands will be responsible for environmental review and mitigation of environmental impacts on the
919 Palm Street property.
2. The City will be responsible for the costs of mitigating environmental impacts on the 999 Monterey Street
property.
87
ATTACHMENT 2
Palm-Morro Parking/Office Building Page 3 of
Project Phasing and Funding Sources—Parking Fund
Project Costs by Type—Parking Fund
Project Costs
To-Date 2002-03 2003-04 2004-05 Total
Environmental review 78,000 78,000
Land acquisition 843,000 843,000
Building acquisition 7,135,100 7,135,100
Reimbursement from General Fund for 4 spaces* (145,000) (145,000)
Construction management 213,500 213,500
Contingencies at 5 percent of building acquisition 356,800 356,800
Total 8,481,400 8,481,400
* The General Fund will acquire 45 below-grade parking spaces in the new building from the Parking Fund. The General Fund will
buy outright 4 spaces at a cost of$36,245 per space. The General Fund will swap a credit for 24 spaces in the old Kozak Garage for
24 spaces in the new building. The General Fund will also swap 9 spaces at the Old Library and 8 spaces at 955 Morro Street for 17
spaces in the new building. Two below-grade spaces will remain in possession of the Parking Fund and be used as public recharging
stations for batterypowered vehicles. Three below-grade spaces will remain in possession of the Parking Fund and be used as dedi-
cated parking for the City/County Library staff.
Project Funding by Source—Parking Fund
Project Funding Sources
To-Date 2002-03 2003-04 2004-05 Total
Parking In-lieu Fees from Court Street Project 512,000 512,000
Proceeds from Sale of Court Street Property 1,471,500 1,471,500
Proceeds from Sale of Bonds 6,497,900 6,497,900
Total 8,481,400 8,481,400
Project Phasing and Funding Sources—General Fund
Project Costs by Type—General Fund
Project Costs
To-Date 2002-03 2003-04 2004-05 Total
Environmental review 26,000 26,000
Land acquisition 329,500 329,500
Building acquisition(offices) 2,782,700 2,782,700
Parking space acquisition 145,000 145,000
Construction management 83,500 83;500
Furnishings&telephone/computer cabling:919 Palm 760,000 760,000
Reconfiguration&life-tyle maintenance: 990 Palm 350,000 350,000
Contingencies @ 5 percent of building acquisition 139,100 139,100
Total 4,615,800 4,615,800
Project Funding by Source—General Fund
Project Funding Sources
To-Date 2002-03 2003-04 2004-05 Total
Proceeds from Sale of Court Street Property 490,500 490,500
Proceeds from Sale of Bonds 4,125,300 4,125,300
Total 4,615,800 m 15,800
ATTACHMENT 2
Palm-Morro Parking/Office Building Page 4 of 7
Implementation
Task Date
Open escrow for property transfers 8/02
Execute construction and development agreements with the Copelands 9/02
Complete development and environmental review for 919 Palm 9/02
Issue building permits for 919 Palm 9/02
Execute the guaranteed maximum purchase price contract with the Copelands 9/02
Close escrow and transfer title to Court Street and the Palm-Morro area 9/02
Begin construction by Copelands at 919 Palm 10/02
Begin construction oversight and management at 919 Palm 10/02
Complete design of office tenant improvements at 919 Palm 12/02
Begin construction related office tenant improvements at 919 Palm 8/03
Complete construction at 919 Palm 10/03
Purchase the 919 Palm building pursuant to the terns of the Guaranteed Maximum Price Contract 10/03
Begin non-construction related office tenant improvements at 919 Palm 10/03
Complete non-construction related office tenant improvements at 919 Palm 12/03
Move Public Works and Community Development into 919 Palm 12/03
Begin the office reconfiguration at 990 Palm 01/04
Complete the office reconfiguration at 990 Palm 04/04
Department Coordinator and Project Support
Department Coordinator: Administration
Project Support: Public Works,Community Development,Finance
Alternative
Although most project costs have been fixed by previous decisions, there is still one area that offers an opportu-
nity to reduce project costs: minimizing the reconfiguration of workspaces at 990 Palm Street. After Community
Development moves out of City Hall, several departments plan to use the vacated space as a chance to consoli-
date staff members who are currently divided at separate locations within City Hall and at the Old Library. This
consolidation will include reconfiguring workstations,recabling voice and data connections, and modifying elec-
trical and HVAC systems at an estimated cost of$350,000. A temporary alternative to such a reconfiguration
would be to simply move operations into new spaces with only minor changes to existing workspaces. This al-
ternative would cost about $80,000 and would reduce one-time General Fund project costs by $270,000. It
would also reduce ongoing General Fund debt service by$19,600 per year.
Project Effect on the Operating Budget
Project Management
Administration Department: 200 hours
Public Works Department: 200 hours
Community Development Department: 100 hours 8-9
ATTACHMENT 2
Palm-Morro Parking/Office Building Page 5 of 7
Annual Ongoing Costs
ar tng Ueneral
Fund Fund Total
Additional Ongoing Costs and Revenue Losses(annual):
Parking garage operations and maintenance @ $436 per space 84,200 19,600 103,800
Office space maintenance for 919 Palm @ $5.08 per square foot 81,800 81,800
Debt service on bond proceeds @ 6% interest over 30 years 472,100 299,700 771,800
Loss of meter and fine revenue from the Court Street lot 200,400 200,400
$UbtotaI Additional Costs and Revenue Losses 756,700 401,1o0 1,157,806
Additional Ongoing Revenues and Cost Reductions(annual):
Parking garage revenue @ $617 per space per year for 212 spaces 130,800 130,800
Surface lot meter and fine revenue @ $1,070 per space for 17 spaces 17,200 17,200
Lease revenues from 955 Morro @ $22.20 per square foot 133,200 133,200
Reduction in office space maintenance @ 955 Morro 30,500 30,500
Court Street lot reduced operations and maintenance @ $50 per space 5,400 5,400
Subtotal Additional Revenues and Cost Reductions 153;400 163,700 317,1:00
Net Annual Cost - $ 603,300 $ 2371,400 $ 840,700
Location Map/Schematic Design
See Attached Pages
5-10
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ATTACHMENT
Palm-Morro Parking/Office Building Page 7 of 7
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ATTACHMENT 3
RESOLUTION NO. (2002 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
INCREASING THE PENALTIES FOR TWO PARKING VIOLATIONS
WHEREAS, State law provides, in Vehicle Code Section 40203.5, that cities establish the
amount of parking penalties, fees, and surcharges; and
WHEREAS, State law and the issuing agencies authorize the adoption of uniform fees,
penalties, collection, adjudication process, authority to issue parking citations for California Vehicle
Code and local regulations, and to establish a compliance program for parking citation processing; and
WHEREAS, the City desires that its penalties for parking violations be consistent as much as
possible with the county-wide bail schedule for similar penalties in other jurisdictions;
NOW THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as
follows:
SECTION 1. The penalty for violation of California Vehicle Code Section 22500.1
(Stopping/Standing/Parking: Fire Lane) previously approved in Resolution No. 9301 (2002) shall be
increased from $75 to $103.
SECTION 2. The penalty for violation of California Vehicle Code Section 22514 (Fire
Hydrants)previously approved in Resolution No. 9301 (2002) shall be increased from $20 to $50.
Upon motion of seconded by and
on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was passed and adopted this day of , 2002.
ATTEST Mayor Allen Settle
City Clerk
APPROVED
rfy,rG)org sen, ity Attorney
8-13