City Grappling with $1.4 Million Parking Shortfall

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Raleigh officials blame the poor economy for a possible $1.4 million parking shortfall next year. If the city can’t come up with a plan to increase revenue, future years could look just as bleak with a $13 million shortfall predicted for 2015.

Some of the main factors for the shortfall are less-than-anticipated on-street revenue of about $1.4 million, deck parking projections of $183,000 and a $1 million increase in debt service charges.

City Manager Russell Allen explained that the city’s parking program is considered an enterprise fund, meaning it is set up like a business.

City councilors will have to come up with a solution to the shortfall as they create a balanced budget before July.

“Hopefully it operates as a business that has revenue that offsets its expenses,” he said.

According to state law, money generated by the program stays within the program, much like the water and sewer fund.

“The economy has had a definite impact from about the fall of 2009 until now,” said Gordon Dash, the city’s parking administrator. “The biggest loss has been in the number of monthly accounts.”

During the past two years, the city lost 489 monthly deck-parking accounts, which at $100 a month per account amounts to about $1.2 million.

“For all of the new accounts that we’ve lost, we’ve seen virtually no new accounts that could be attributed to folks who used to park on the street, now going into the decks,” Dash said.

Last summer, the city implemented an on-street parking program that included the use of metered spaces to encourage turnover for the downtown businesses. Prior to the use of meters, Dash said that people working downtown would park on the street all day.

Dash said the city anticipated that these parkers would make use of the parking decks, even with the $100 per month price tag of a space rental.

“In fact, what our field agents have found is that the license plates that they used to see park downtown are the same plates they now see parking outside the periphery of the metered zones,” Dash said. “Now they’re occupying residential streets.”

 

The Fayetteville District is the most desired on-street parking zone in the downtown area.

 

In other words, rather than paying to park on the decks, downtown employees are parking where there are no meters and walking. Dash said that this resulted in parts of downtown where metered parking isn’t utilized at all.

Progress Energy’s recent downsizing and impending merger with Duke Energy could result in another 1,000 spaces lost.

Because the parking decks are under-utilized, they aren’t generating the revenue needed to pay off the $100 million plus interest it cost to build the new decks.

“We built a couple of major facilities that we had planned to have development associated with it,” said Allen. “And subsequent parkers that would take leases and provide revenues for those decks, but with this economy they have not been able to come out of the ground.”

Prior to the city taking the parking program in house, it was managed by a private firm, which kept no data as to which cars were owned by employees and which were owned by visitors. Projections of 52 percent occupancy were based on the proposal made by the parking consultant during the parking overhaul in 2008.

Now with the meters in place, officials were able to determine that the average occupancy rate for off-street parking is 40 percent. While Fayetteville, Moore Square and Hillsborough areas have an 85 percent occupancy rate, the other zones — Capitol, Glenwood South and Warehouse — are practically empty at 15 to 20 percent.

Allen and Dash proposed a series of revenue options to the Budget and Economic Development Committee on April 12.

The first — and highly unpopular – suggestion was to begin charging a flat rate for parking on nights and weekends.

“It’s too soon in the downtown renaissance,” said David Diaz of the Downtown Raleigh Alliance. “Other downtowns do charge, but I think they’re further along in their evolution than we are.”

The committee decided against the proposal.

The city council approved a proposal to change the city’s booting ordinance so that parking enforcement officers could boot a car that was parked legally. Previously, officers could not boot a car with excessive tickets unless it was in violation of a parking law. The city estimates about $62,000 in lost revenue due to missed booting opportunities.

To help recover a portion of the $2.5 million the city is owed in overdue parking fines, the council gave its approval for the department to work with the state to implement a tax intercept program and holds through the department of motor vehicles.

The tax intercept program would deduct fines from state tax refunds and anyone with excessive fines would be forced to pay up when registering their car or renewing their license.

One thought on “City Grappling with $1.4 Million Parking Shortfall

  1. It seems the measly 62k a year lost from missed booting opportunities would barely cover the cost of paying a whole squad of people to enforce this (estimates revenue not profit).

    I wonder if the possibility of people not wanting to pay a hundred dollars a month to park or their ability to find free or cheap alternatives was included in their consultant’s projections? They have to continue to give people who do not normally visit downtown a reason to go there, and during the week instead of trying to milk the people who work there.