Ann Arbor city council work session (Nov. 9, 2009): At its work session on Monday, the council heard two presentations: (i) the financial impact of raising parking violation fines, and (ii) the use of social media by city staff in parks and recreation.
The parking presentation was given by Matthew Horning, the city’s treasurer. It included comparative data from other cities, and an analysis of the impact on total revenues that would result from raising fines. His presentation also looked at the impact of providing incentives for early payment across the 34 different categories of violations. For the expired meter fine, which accounts for 65% of all tickets issues, Horning’s analysis assumed a recommended increase from $15 to $20. The schedule of fines presented by Horning is projected to increase annual revenues by $875,287.
The social media presentation was given by Kim Mortson, who works in public relations for community services at the city. She described how she’d used social media like Twitter and Facebook to complement more traditional approaches to promote parks and recreation programs.
In our report, we focus exclusively on the parking violation fines.
Parking Violation Fines
We begin with a bit of historical context, then describe Horning’s presentation, summarize the council’s commentary, and set a possible context for the future discussion – which includes the city’s relationship with the Downtown Development Authority.
When and Why Were Parking Fines Last Raised?
The parking violation fine structure was last changed in Ann Arbor about five years ago. At its June 21, 2004 meeting, the Ann Arbor city council approved that systematic increase. Six years before that, in 1998, fines had also been increased.
At the June 2004 meeting, the resolution to increase parking violation fines included “Whereas” clauses that provided the rationale for the increase [emphasis added]:
Whereas, Safety Services has reviewed the parking violation fines as part of the FY 2004-2005 budget submittal;
Whereas, The City last increased parking violation fines in April 1998;
Whereas, The current parking violation fines were found to be inadequate to cover the costs of service and promote long-term parking at meters rather at the designated long-term parking areas;
City’s Presentation on Parking Fines
City treasurer Matthew Horning’s presentation to the council described the current analysis as stemming from a periodic review of the fine structure, which began nearly a year ago, in December 2008. It was based on the benchmarking of fine structures in communities with similar population densities with universities: Milwaukee, New Haven, Seattle, Austin, Boulder, Madison, Lansing, East Lansing, and Grand Rapids.
To illustrate the benchmarking, here’s just one of the categories – Expired Meter – that Horning presented, showing the dollar amounts for fines in the benchmarked cities. [.PDF file: All Benchmarked Categories in Parking Fine Presentation]:
Exp Meter Mil NH Sea Aus Bou Mad Lan ELan GR A2 A2 Prop Early Discntd 15 5 10 10 10 Fine Amount 20 20 35 30 15 20 15 15 20 15 20 After 14 D 40 60 30 30 25 25 40 30 40 After 30 D 60 40 35 60 Default 50 60 40 70
The final two columns show Ann Arbor’s current fine structure and proposed fine structure. The first row displays the fine that is assessed if it’s paid by the next business day. Under the proposal that the city is recommending, then, an expired meter fine would remain the same $10 as it is now – if paid within one business day.
Currently, the parking fine structure provides a early-payment discount only for expired meters. The recommended fine structure change would include an early-payment discount across all violation categories. The discount would be uniform across all those categories: $10 would be subtracted from the fine amount.
Other features of the staff recommendation on parking violation fines include an increase in Minor and Near Hazard fines from $25 to $35, as well as standardization of all Hazard fines at $50.
The recommendation also extends the payment schedule across all categories, to include a 30-day point before default.
The projected revenue increase is based on the following distribution of how quickly patrons would pay fines, which is based on actual 2008 fine payment data:
Next Bus. 42% 1-14D 32% 14-30D 7% 30+D 10% Default 9% Total Rev. $3,427,994 Rev. Increase $ 875,287
So the projections see almost three-quarters of the newly-structured fines being paid at the standard fine or the discounted rate. And overall, there would be a 34% increase in revenues.
That 34% overall increase in revenues tracks with the 33% increase in fine for expired meters – from $15 to $20.
Expired Meters account for 65% of all parking tickets. If Over Legal Limit and No Parking Anytime tickets are added to Expired Meter tickets, 83% of all parking tickets are accounted for.
The recommended new rate structure for those three categories, plus a category that city councilmember Tony Derezinski (Ward 2) whimsically suggested at the work session could be eliminated entirely [Derezinski is a Harley enthusiast.]:
Disc Stnd 14D 30D Deflt 1 Expired Meter Current 10 15 30 40 Proposed 10 20 40 60 70 2 Over Legal Current 25 35 45 Proposed 25 35 55 75 85 4 No Park Any Current 25 35 45 Proposed 25 35 55 75 85 32 Motorcycles Current 25 35 45 Proposed 25 35 55 75 85 -
Council Comments and Questions On Parking Fines
There was some concern expressed about the benchmarking communities.
Margie Teall (Ward 4) wanted to know how fresh the data from the other comparable cities was, and Horning confirmed that it was current. Sabra Briere (Ward 1) asked for further clarification on how the cities were selected for comparison. Horning said that it was population density, and the technology available in those cities. [Ann Arbor has recently rolled out a wireless E-Park kiosk payment system to replace parking meters.] In addition, the benchmarking communities were selected based on their inclusion of a university.
Mayor John Hieftje said it might be possible to make the comparison to Grand Rapids because Grand Rapids was one of the other areas of the state where, like Ann Arbor, the economy was not performing as poorly as the rest of the state. But he expressed concern at the way the fines accelerated after the 14-day window. Is there any way to seek relief, he wondered, where ticketed motorists who found themselves in a tight financial spot could say, “I want to pay, but I can’t do it”? Horning allowed that it was a good question, something that could be checked out.
Sabra Briere (Ward 1) was interested in seeing comparisons to cities smaller than Milwaukee and Seattle. Stephen Rapundalo (Ward 2) asked for comparative data from Kalamazoo, but Horning said that he’d been unsuccessful in getting their data – he’d give it another try, though. Rapundalo also suggested getting data from one of the Detroit suburbs, like Royal Oak or Livonia.
Rapundalo got clarification that there are currently 12 full-time employees whose responsibility is to issue parking ticktets – the same employees also enforce community standards ordinances.
Rapundalo indicated that in his trips up to East Lansing, enforcement was “quite vigorous,” and noted that the enforcement officers used electric vehicles. He said that Ann Arbor’s strategy of using officers on foot was healthy, but he wondered if the number of tickets issued might be increased. Hieftje reported having been given a parking ticket in Boulder within two minutes of his meter expiring, and Rapundalo one-upped that with a report that within one minute of meter expiration, he’d received a ticket in East Lansing. But, Rapundalo also indicated that they’d been quite generous when they overcharged him, providing a rebate good for … his next violation.
Rapundalo also drew out the relationship between the University of Michigan and the city of Ann Arbor with respect to parking enforcement. Horning explained that the city accepts the payment of fines from UM-issued tickets. As part of the arrangement, UM pays for one of the two full-time parking referees, who handle appeals, plus overhead to handle the collection and adjudication process.
Sandi Smith (Ward 1) expressed surprise that there were enough contested tickets to require two full-time employees. After the meeting, Horning emailed The Chronicle with complete 2008 data on contested cases: In 2008 there were 10,365 appeals heard for UM and city tickets combined; of those, 2,265 had the fine reduced and 4,657 were voided. That amounts to almost a 70% chance of some kind of success when a ticket is appealed to a parking referee.
Mike Anglin (Ward 5) got clarification that the revenues under discussion were different from revenues that stemmed from the residential permit parking program. He asked for a report on revenues from those programs in neighborhoods near the downtown. Smith said that she’d already asked for a report that might include what he wanted, and that it might be best to wait for that before working on a separate report.
Related to the issue of parking in neighborhoods near downtown is the planned installation of parking meters in some of these neighborhoods as a part of the adopted FY 2010 budget. At the work session, Tom Crawford, the city’s CFO, clarified for The Chronicle that the projected revenue increases for the parking fines assumed only the existing meters, without installation of those additional meters in neighborhoods.
The issue of installing those extra meters is one that Smith has adopted as somewhat of a project. She has persuaded her council colleagues to delay installation of them while ways to replace the revenue they would generate can be found. The FY 2010 budget assumed around $300,000 in revenue from additional parking meters to be installed in neighborhoods near downtown. [The section "Moratorium on Parking Meter Installation" in The Chronicle's coverage of council's Oct. 6 meeting contains additional background.]
Asked by email after the meeting if she saw the increased revenues from the parking fine increases as a possible way to eliminate the need for additional parking meters, Smith replied that she did, but that she had not yet floated the idea to her council colleagues.
Broader Context for Parking Fine Increases: DDA and the City
At Monday’s work session, Sandi Smith (Ward 1) raised the point that the majority of the tickets written were in downtown Ann Arbor – in the Downtown Development Authority district. Smith serves on both the city council and the DDA board.
She expressed concern that the fine structure be implemented in a way that did not result in downtown Ann Arbor being perceived as an unfriendly place. Mike Angin (Ward 5) at one point floated the idea of a “freebie” system where a ticket could be forgiven. City administrator Roger Fraser cautioned that it was important to have a system that the enforcement officers could easily enforce.
Smith also pointed out that the DDA was already deploying a strategy of “demand management,” which entails adjusting parking rates (not fines) to encourage people to park where they otherwise would not and to require a premium for parking that was the most desirable. The new E-Park kiosks that have already replaced many individual parking meters are intended to facilitate that strategy. She wanted to make sure that the DDA’s strategy of demand management be integrated into the new fine structure.
In responding to a question from Carsten Hohnke (Ward 5) about the reason behind the change in parking violation fine structures, city administrator Roger Fraser said it was a mix of: (i) demand management, (ii) revenue generation, (iii) deterrent and (iv) competitiveness.
Fraser stressed that “turnover” was something that the fine structure was meant to promote. That’s why there are 30-minute, 1-hour, and 2-hour limits, depending on the specific turnover goals in a given area, he said.
Chronicle Analysis: DDA and the Mutually Beneficial Agreement
Looking more broadly than the need to make the parking violation fine structure mesh with the DDA’s efforts at demand management, the context of the conversation includes the difficult negotiations that lie ahead between the DDA and the city on their agreement under which the DDA administers the city’s parking program – which is not the same as the city’s parking fine enforcement.
In very broad strokes, that city-DDA agreement, struck in 2005, provided that the DDA would pay the city $1 million a year for 10 years, through 2015. According to the terms of the agreement, however, the city could ask for $2 million in any given year, so long as the total amount did not exceed $10 million over the 10-year period. The city asked for $2 million in each of the first five years of the contract, which means that the FY 2010 budget year is the last year that the DDA is obligated under that contract to pay the city.
However, in the FY 2011 budget plan, which was introduced by the city administration in January 2009, along with the FY 2010 budget recommendations, the city assumed an additional $2 million payment by the DDA. So the city council passed a resolution in early 2009 asking the DDA to renegotiate the city-DDA parking agreement.
The DDA responded by establishing a “mutually beneficial” committee to engage in that negotiation. The city took no action to form a committee of its own until Rene Greff’s term on the DDA board expired in July 2009. Jennifer S. Hall, then-chair of the DDA board, took herself off the DDA’s “mutually beneficial” committee around the same time. Mayor John Hieftje had revealed at a summer DDA retreat that the barrier to the city council appointing its own “mutually beneficial” committee was the membership of Hall and Greff on the DDA’s committee. [Chronicle coverage includes: "DDA: Who's on the Committee?"]
With Hall and Greff off the DDA committee, the city council appointed its own committee, which included Leigh Greden, who at the time represented Ward 3. With Greden’s defeat in the August 2009 Democratic primary, that spot now sits vacant on the city council’s committee.
The two committees have never met.
For the last few monthly DDA board meetings, Sandi Smith – who is a member of city council and the DDA board and a member of both the DDA’s “mutually beneficial” committees – has delivered a report of “nothing new to report.”
But at the DDA board’s April meeting, Greff had reported out the results of the first meeting (with itself) of the DDA’s “mutually beneficial” committee [emphasis added]:
Greff then ticked through what the committee had done. They had: (i) reviewed history of DDA parking agreements with the city, (ii) reviewed TIF (tax increment financing) capture, and (iii) reached a majority view – with dissent from [Roger] Hewitt – that they should not re-open the discussion of the existing parking agreement. It was not the role of the DDA, Greff said, to cover gaps in the city budget. The committee had given some consideration to taking over city tax-funded activities (e.g., snow removal), and had contemplated purchasing the right to meter enforcement in downtown. [Here's the Chronicle's complete DDA board meeting report for April 2009.]
It’s thus possible that the DDA will begin to insert itself into the conversation on parking violation fines, especially as the approaching FY 2011 budget discussion increases the pressure for the city and the DDA to have their respective “mutually beneficial” committees meet and come to an agreement.