HomeMy WebLinkAbout04/20/1993, 6 - PARKING METER RATE INCREASE II�M���III�IIIIIIIf II�IIIIIII / o T' MEETING DATE:
City y san Luis OBI SPO - o- 171
COUNCIL AGENDA REPORT ITEM NUMBER:,04
FROM: Mike McCluskey, Public Works Direct r LTA
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Prepared by: Keith Opalewski, Parking anager
SUBJECT: Parking Meter Rate Increase
CAO RECOMMENDATION:
Introduce an ordinance to print amending section 10-52-010 (Parking Meter Zone Rates),of the
Municipal Code to change all parking meters and change the effective date of rate changes to
40 and 60 cents per hour on July 1, 1994 and 50 and 70 cents per hour on January 1, 1998.
DISCUSSION:
In 1987 Council approved an ordinance to increase parking meter rates from 20 to 30 cents per
hour effective January 1, 1988, with subsequent rate increases at 5 year intervals (35 cents in
1993, 45 cents in 1998 and 60 cents in 2003). In 1991 Council approved an ordinance change
to establish a variable meter rate system which increased 450 core meters from 30 to 50 cents
per hour. This increase was part of an approved financial program that included higher fines
and penalties for parking citations along with increased parking structure rates. The additional
revenues were needed to offset a negative cash flow within the parking fund.
Last October staff began the process to solicit bids for the planned January 1, 1993 nickel
increase, but due to the economic environment it was decided to postpone the process until after
the first of the year. In January the issue of moving forward with the planned increase was
discussed with the BIA Parking Committee. At their recommendation, staff looked into the
possibility of delaying the increase until 1994 or 1995 but at a higher rate than the planned 5
cent increase. After considering several different scenarios for delayed rate increases, the BIA
Parking Committee approved a recommendation for a new rate structure and a revised timetable
for meter rate increases. The new rate structure would be 40 cents per hour for non-core meters
and 60 cents per hour for core meters. Both rates would be effective on July 1, 1994. The
planned increases for 1998 and 2003 were also discussed and the BIA made a commitment to
support the future rate change of an additional 5 cents per hour above the current rate change
planned for January 1, 1998. This results in a more even progression of two 10 cent increases
over the next 10 years. However, as we found with the current pre-approved 5 cent rate
increase, realistically the 1998 and 2003 rates will also be reviewed for their fiscal impact before
they would be acted upon.
Staff concurs with the BIA recommendation of deleting the 5 cent 1993 increase and
implementing a 10 cent increase in 1994 (40 and 60 cents per hour) and an additional 5 cents
more than the current increase that was planned for in 1998 (revised rates of 50 and 70 cents
per hour). One of the driving factors for recommending a higher rate was the cost to implement
a meter rate overhaul. Since it will cost the same to increase the rate by a dime as opposed to
a nickel, opting for a higher rate at a later date offers a quicker recovery time to recoup capital
�''�P�tIiiIVIIIII��IIIIIIj� city of San Luis OBispo
COUNCIL AGENDA REPORT
Council Agenda Report
Page Two
costs and results in meters generating revenues at an increased level. The revised rates also
present a more "user friendly" coin configuration of 40, 50, 60 and 70 cents as opposed to the
previously planned 35, 45, 55 and 65 cents. In addition, given the current calendar, the
amended timetable provides for a better implementation date of having all the new mechanisms
ready for field installation by July 1, 1994. Since it takes 4-6 months to complete the entire
overhaul of all meters, the bid process to solicit a vendor to supply the rebuilt-exchange 1
mechanisms at the adjusted rate can begin in January, thus avoiding any negative public relations
during the critical holiday shopping months of November and December. The field conversion
to the new rate mechanisms will begin on July 1, 1994, with all of the new mechanisms in place
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by mid-July.
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Another consideration in delaying the meter rate increase is that it will allow the opportunity for
the economic picture to brighten and thus make the increase more palatable. Overall, the 10
cent adjustment in 1994 is a winning proposition for both the City and the business community.
FISCAL IMPACT:
A major factor in considering a higher meter rate was the conversion cost. The current
estimate, based on January 1, 1993 preliminary quotes by the two major meter manufacturers,
is $90,000 to overhaul and convert the 1550 meters. This cost includes a completely
remanufactured mechanism that is guaranteed against defect for two years. The conversion cost
is the same whether the increase was 5, 10, or 25 cents per hour. Therefore, the consensus of
the BIA and staff is that the City gets a better return for its investment by implementing the
higher rate at a later date. Further deferral of rate changes may not save money since the meters
should be periodically reconditioned and based upon experience and current time in service this
should occur no later than 1994.
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In terms of lost revenue due to the delay, the City will not realize the previously anticipated
increase in cash flow of$90,000 per year. The eighteen month delay will represent a $135,000 j
loss in new meter revenues. However, when these figures are compared to the amount of
revenue generated for the first eighteen months of the 10 cent increase in July 1994, the City
will basically break even by January 1, 1996. Current overhaul funds that are earmarked for
I this year's increase ($63,000 in contract services) will not be expended during the current fiscal
year and be reallocated toward the revised rate increase, augmented by an additional $27,000
in contract services for the 1993-94 fiscal year. The parking fund reserves (projected at a range
of $300-$350,000 by June 30, 1993) can maintain ongoing operations and minor CIP projects
and supplement the 1993-95 parking budget with the necessary funds to complete the meter
overhaul without jeopardizing the solvency of the parking program.
The higher rate will continue to generate revenues at an accelerated rate from the previously
I
planned nickel increase. The projected net increase of 10 cents more per hour would produce
approximately $180,000 more than the nickel rate over the next 4 years. From a fiscal
iiliiui����II�IIIIIIIiII!I'll'! city of san Luis osIspo
ipllCOUNCIL AGENDA REPORT
Council Agenda Report
Page Three
standpoint, deferring the rate increase for now, will place the parking fund balance in a better
situation in the future. Furthermore, the recommended 1998 rate adjustment of 45 and 65 cents j
per hour increased to 50 and 70 cents per hour will produce additional revenues of$90,000 per
year. This too, will allow the parking program to meet ongoing costs as well as help offset
future bonded indebtedness for additional parking structures or help retire our current debt
service at an earlier date.
ALTERNATIVES:
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1. Direct staff to immediately implement the 1993 nickel increase as in the Muni Code.
2. Defer increase to a future date.
3. Recommend a different rate of 5, 15 cents or other rate change.
I
Although implementing the pre-approved 5 cent increase this year is still an option, the
arguments for not doing it at this time still hold true. Those being that we get a better return
for our investment, a potential for better acceptance by the public due to the delayed timetable I
and moderate increase, and additional revenues beyond previous projections will be generated
once it is fully implemented in the field.
The other option considered by staff and the BIA was the possibility of postponing the increase
even further, but at a still higher rate ( 25 cents per hour in July 1995). As with the other rate
-increases the conversion cost would be the same as the 10 cent increase. Although revenues
would be substantially higher with this option (approximately $240,000 per year higher than the j
dime), the substantial jump in rates (50-83% increase under our current 2-tier rate structure)
would not be readily accepted by the business community, and certainly not by the public. Based
on the high potential for a strong negative impact, this option was not recommended. The
recommended increase of 10 cents per hour in July 1994 represents the best course of action for
all concerned parties. The same holds true for increasing the rates in 1998 so current and future
rates are in increments of 10 cents each as opposed to larger one time adjustments.
I
Exhibit A Legislative Draft Meter Rates
Exhibit B Proposed Meter Rate Ordinance j
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LEGISLATIVE DRAFT
Chapter 10.52
PARKING METERS
Section:
10.52.010 Parking Meter Zone--Rates.
A. Within the area enclosed by a dashed line on the parking meter zone map (Exhibit
1), the parking of vehicles on streets or in municipal parking lots may be controlled and
regulated with the aid of parking meters.
B. The parking meter rate shall be thirty cents per hour effective January 1, 1988.
Parking meter rates shall be increased to the following amounts over the next 15 years:
Effective Date of Increase Rate
3a —1 943 July 1= i99 $-35 .40
January 1, 1998 $ 0
January 1, 2003 $.60
C. Within the area enclosed by diagonal lines on the parking meter zone map (Exhibit
1), the rate for parking meters on streets or in municipal parking lots shall be fifty cents per
hour effective June 1, 1991. Parking meter rates for this higher-rate zone shall be increased to
the following amounts over the next 15 years:
Effective Date of Increase Rate
uly:1 x
f�tiafY 1. 1993 J 1994
January 1, 1998 &6.5 $::.:.
January 1, 2003 $.80
EXHIBIT A
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Ordinance No. (4994 1';. Series)
Page Two
SECTION 2. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least 5 days prior to its final passage, in the
Telegram-Tribune, a newspaper published and circulated in this city. This ordinance shall go
into effect at the expiration of thirty (30) days after its final passage.
INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis
Obispo at a meeting held on the day of on motion of
seconded by ,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
MAYOR PEG PINARD
ATTEST:
CITY CLERK
APPROVED:
CITY ATTORNEY
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EXHIBIT 1
ORDINANCE NO. (1993 SERIES)
AN ORDINANCE OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AMENDING SECTIONS 10.52.010 (PARKING METER RATES)
CHAPTER 10.52 (PARKING METERS) OF THE
SAN LUIS OBISPO MUNICIPAL CODE
BE IT ORDAINED by the Council of the City of San Luis Obispo as follows:
SECTION 1. 10.52.010 of the San Luis Obispo Municipal Code is hereby amended to
read as follows, effective June 1, 1991:
10.52.010 Parking Meter Zone--Rates.
A. Within the area enclosed by a dashed line on the parking meter zone map (Exhibit
1), the parking of vehicles on streets or in municipal parking lots may be controlled and
regulated with the aid of parking meters.
B. The parking meter rate shall be thirty cents per hour effective January 1, 1988.
Parking meter rates shall be increased to the following amounts over the next 15 years:
Effective Date of Increase Rate
July 1, 1994 $.40
January 1, 1998 $.50
January 1, 2003 $.60
C. Within the area enclosed by diagonal lines on the parking meter zone map (Exhibit
1), the rate for parking meters on streets or in municipal parking lots shall be fifty cents per
hour effective June 1, 1991. Parking meter rates for this higher-rate zone shall be increased to
the following amounts over the next 15 years:
Effective Date of Increase Rate
July 1, 1994 $.60
January 1, 1998 $.70
January 1, 2003 $.80
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Ordinance No. (1993 Series)
C Page Two
SECTION 2. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least 5 days prior to its final passage, in the
Telegram-Tribune, a newspaper published and circulated in this city. This ordinance shall go
into effect at the expiration of thirty (30) days after its final passage.
INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis
Obispo at a meeting held on the day of on motion of
seconded by
and on the following roll call vote:
AYES:
NOES:
- ABSENT:
MAYOR PEG PINARD
ATTEST:
CITY CLERK
APPROVED:
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EXHIBIT 1