AGENDA #2
BUDGET WORKING PAPER
TO: W. Calvin Horton, Town Manager
FROM: Kay Johnson, Finance Director
SUBJECT: Fee Changes for Town Operated Parking Lots in the Downtown Service District
DATE: June 7, 2006
This Budget Working Paper reviews existing parking fees and policies in the downtown, changes to fees and policies requested by the Chapel Hill Downtown Partnership and other parking options. While we do recommend some specific changes to current parking practices, in most instances we recommend referring the requests to the recently formed Parking Committee for further examination.
DISCUSSION
In response to the Manager’s 2006-07 Recommended Budget, the Partnership has proposed revisions to parking policies in the downtown area. The Partnership believes a number of changes would attract more visitors to downtown and generate more business in the downtown area. The following includes a summary of the on-street and off-street parking facilities in the Downtown Service District operated by the Town of Chapel Hill Parking Services Division and the operating hours and fees. We have also reviewed the changes requested by the Partnership and present our preliminary findings.
On –Street parking meters
The Town currently has 172 on-street metered spaces and will add 39 additional spaces with the installation of meters on Cameron Avenue no later than this fall. Operating hours for all meters are from 8:00 a.m. to 6:00 p.m. Monday through Saturday. The cost for metered parking is $1.00 per hour. Currently, all meters have a two-hour maximum time limit; however, there is one meter with a 15 minute time limit at the corner of Henderson and E. Franklin Street. The Cameron Avenue meter zone will have a four-hour time limit.
The first Partnership request is for the Town to offer two-hour, free, on-street parking on Saturdays. The estimated parking meter collections on Saturday are about $40,000. Current Town policy allows for a maximum of two hour parking at an on-street meter. Consequently, allowing for two hours free parking at meters effectively would result in a loss of revenue for the entire day. These revenues would be recouped through the increased Downtown Service District Tax. The Partnership supports an increase in the Downtown Service District Tax of 2.6 cents, which would yield sufficient revenue to offset the unrealized meter revenues.
As we have reevaluated the request for free Saturday metered parking, we have determined that allowing for free two-hour parking in metered spaces would require a greater level of enforcement. Currently, Parking Services staff only need to read a meter to determine if a vehicle is parked legally. Under the proposal put forth by the Partnership, Parking Services staff would need to check vehicles parked in metered spaces to ensure compliance with the two-hour limit so that spaces would not be occupied for excessively long periods. We estimate that this higher level of enforcement would take twice as long as visually checking meters.
We estimate that Saturday parking ticket fine receipts could be reduced by half, resulting in unrealized revenues of $24,500. We recommend that this unrealized revenue be recovered by increasing the District Tax by 1.65 cents. (This would be in addition to the 2.6 cents already recommended.)
The Wallace Deck and Parking Lot 2 are both staffed lots. The Wallace Deck has 309 spaces and Lot 2 has 104. Operating hours for both locations are from 7:30 a.m. to 1:15 a.m. Monday through Thursday, 7:30 a.m. to 3:15 a.m. Friday, 9:30 a.m. to 3:15 a.m. Saturday, and 2:00 p.m. to 9:45 p.m. Sunday. The closing times vary based upon operational needs. The cost for parking is $1.30 per hour up to six hours; $1.80 per hour for six hours or more.
The maximum daily fee at these facilities is $27.60. In addition, a surcharged of $2.00 is charged to anyone who enters the lot on weekdays before 10:00 a.m. and exits after 2:00 p.m.
A senior rate is offered to parking patrons age 60 and older. The senior rate enables eligible citizens to park in the Wallace Deck or Lot 2 for up to four hours at a reduced rate. For example, the standard rate for one hour is $1.30 and the senior rate is 65 cents and the standard rate for four hours is $5.20 while the senior rate is $2.60.
A change to the operations at the Wallace Deck for Friday and Saturday nights will be implemented in the coming months. The proposed change calls for placing a booth at the entrance to the parking deck. The booth would be staffed from 9:00 p.m. onwards on Friday and Saturday evening, and patrons entering the Wallace Deck and Lot 2 would pay a $5 fee to park for the remainder of the evening. The proposed change would ensure that fees are collected from all those parking in the deck on weekend evenings and reduce the interaction between Parking Services staff and any late night parking patrons who may be demanding and discourteous.
Parking Lots 3 and 5 operate using Automatic Pay Stations. Lot 3 has 65 spaces and Lot 5 has 169. Operating hours for both locations are from 8:00 a.m. to 8:00 p.m. Monday through Saturday. The cost for parking is $1.00 per hour, with a four hour maximum time limit.
With the installation of the Automatic Pay Stations at Lot 3 and Lot 5, we extended the hours of operation from 8:00 a.m. to 8:00 p.m.; previously, operations ceased at 6:00 p.m. The extended hours result in increased revenues and allow for more efficient use of the Pay Station operation.
The second Partnership request is for the Town to offer two hours of free parking on Saturdays in Lot 3 and Lot 5. The estimated pay station revenue for Lot 5 in 2005-06 is $180,000 with nearly $85,000 collected from those parking for two hours or less. Data collected from the Lot 5 pay stations indicate that approximately 74 percent of the patrons using Lot 5 park for less than two hours. Based on this information, we estimate that providing two hours of free parking in Lot 5 on Saturdays would result in unrealized annual revenue of $16,000.
In Lot 3 the parking meters have recently been removed and pay stations similar to those in Lot 5 have been installed. Also, the operating hours at Lot 3 have changed. Lot 3 now operates on the same schedule as Lot 5. These recent changes make estimating the precise impact of the requested changes difficult. However, based on trends at Town operated lots and our experience with the types of changes recently implemented at Lot 3, we anticipate that allowing two hours of free parking on Saturdays in Lot 3 would result in unrealized revenue of about $4,000 annually. Therefore, the estimated unrealized revenue for granting two hours free parking on Saturdays at Lot 3 and Lot 5 would be approximately $20,000. The Partnership has offered to offset the anticipated unrealized revenue with a $10,000 contribution. If the Council wishes to consider this change, we would recommend full recovery of unrealized revenue by raising the District Tax. This would require an increase in the tax of 1.35 cents.
The pay stations at Lot 3 and Lot 5 could be reprogrammed to allow for two hours of free parking on Saturdays, with minimal cost. If we were to offer two-hour free parking on Saturdays, we recommend changing from a pay by space operation to a pay and display arrangement. This arrangement would require patrons to display receipts on their dashboards. Sign changes would be required to inform patrons of the new policies.
A change in procedures would present additional challenges. The pay station system has only been in place at Lot 5 for two years and the pay stations at Lot 3 were only installed last month. Therefore, to effectively implement the pay and display arrangement, customer education and training would be required and we would expect lost ticket revenue caused by a lack of understanding of the new system. Our experience with the pay stations has shown that there is a period of adjustment in which patrons must learn the new system. We recommend that this proposal be considered by the Parking Committee where it can be examined in greater detail.
The third Partnership request is for the hours of operation at Lot 3 to revert to 8:00 a.m. to 6:00 p.m. When the pay station was installed at Lot 3 last month, hours of operation were extended from 6:00 p.m. to 8:00 p.m. This change marked the first time that patrons have been required to pay for parking in this lot after 6:00 p.m. The lack of data makes it difficult to ascertain the amount of revenue that would be unrealized if the hours of operation were to revert to 8:00 a.m. to 6:00 p.m. However, the proximity of Lot 3 to the many restaurants in the West End and observations by staff suggest that the usage of Lot 3 in the 6:00 p.m. to 8:00 p.m. time period could account for as much as half of the revenue generated by the lot. Therefore, a return to operational hours that cease at 6:00 p.m. could result in unrealized revenue estimated to be about $8,000. However, if the proposal to grant parking patrons in Lot 3 two hours free parking on Saturdays were implemented, a significant portion of this revenue would not have been collected in the first place. Consequently, the amount of unrealized annual revenue related to patrons parking more than two hours is estimated to be $3,000.
We would recommend that Lot 3 and Lot 5 continue using the same operating hours. All businesses and patrons should be able to expect consistent policies and procedures for similar parking facilities. The pay stations at Lot 3 and Lot 5 could be reprogrammed to reflect new operational hours. By changing the operating hours at Lot 5 to 8:00 a.m. to 6:00 p.m., the amount of unrealized revenue for Lot 5 is estimated to be $25,000. If the proposal to offer parking patrons in Lot 5 two free hours on Saturday were put in place, the unrealized revenue related to patrons parking more than two hours is estimated to be about $12,000.
If the Council chooses to change the operating hours at Lot 3 and Lot 5 to 8:00 a.m. to 6:00 p.m., we recommend that the unrealized revenue be recovered through an increase in the District Tax of one cent, if the two free hour policy on Saturdays is also established.
The use of tokens for metered spaces
We have investigated the possible use of tokens for metered parking spaces. The meters used by the Town can accept tokens, but the coin slots on the Town’s meters would need to be replaced. We plan to make the change to the meters and the automated pay stations over the summer, so that tokens could be used at all Town parking facilities.
RECOMMENDATION
We recommend that the Council proceed with the proposal for free metered parking on Saturdays. The tax rate equivalent for the Downtown Service District would be 4.25 cents (2.6 cents for unrealized parking meter revenue and 1.65 cents for unrealized ticket fine revenue) to recover the cost of making this change.
We plan to make the changes to meters and the automated pay stations so that tokens could be used at all Town parking facilities. For all other proposals, we recommend that the Council make no changes at this time and refer these matters and any other parking issues to the recently formed Parking Committee. This will allow for greater dialogue on these important issues and the formulations of recommendations that would be of greatest benefit to the entire community. It is our further recommendation that unrealized revenue resulting from any changes be recovered by increasing the District Tax accordingly.
ATTACHMENTS