Parking Rate Hearing Done, January Vote

At its Dec. 7, 2011 meeting, the Ann Arbor Downtown Development Authority board continued a public hearing begun at its Nov. 2, 2011 meeting on proposed parking rate changes, and then formally closed the hearing. A vote on the rate changes won’t come until the board’s Jan. 4, 2012 meeting.

The details of proposed parking rate increases were announced in late October, most of which would be implemented starting in September 2012. Some increases would be implemented starting in February. [.pdf of DDA proposed parking rate changes]

The public hearing on parking rate increases came at the same meeting when the board voted to accept the audit from the previous fiscal year (2011), which included some concern expressed by the auditor that the parking fund was on the edge of a deficit. Last year, the parking system had around $9.5 million in annual operating and administrative expenses. It’s also encumbered by obligations to the city of Ann Arbor as well as all capital maintenance expenses for the parking system, making the parking fund’s expenses for last year almost $16 million against $15.2 million in revenue – the difference was made up by drawing on the fund balance reserve.

The February rate changes will have a relatively minor impact. Joe Morehouse, deputy director of the DDA, wrote to The Chronicle that he expects the February rate changes to generate a total of $133,000 in additional revenue annually. Increases and anticipated revenues are: raise meter bag rates by $5/day ($68,800); increase the premium parking rate by $5/month ($3,300); increase Ann & Ashley and Liberty Square structure evening/Saturday rates by $1/entry ($41,500); increase 415 W. Washington lot entry by $1 and increase permit rates by $5/month ($14,400); increase First and William lot permits by $10/month ($5,000).

Highlights of the more significant changes – to be enacted in September 2012 – include predominantly $.10/hour increases: hourly structure parking rates would increase from $1.10/hour to $1.20/hour; hourly parking lot rates would increase from $1.30 ($1.50 after 3 hours) to $1.40 ($1.60 after 3 hours); hourly parking meter rates would increase from $1.40/hour to $1.50/hour; monthly parking permit rates would increase from $140/month to $145/month.

Of the categories of parking, monthly permits will increase percentage-wise the least (3.57%), while hourly structure rates will increase the most (8.33%). Based on the roughly $15 million in revenue generated by the public parking system last year, the parking rate increases could be expected to increase annual gross revenues somewhere between $0.54 million and $1.25 million, assuming no change in demand or capacity. However, on completion of the new underground garage on South Fifth Avenue, around 650 new spaces will be added to the system, which currently has around 7,000 spaces.

Under terms of a new parking contract, under which the DDA manages the city’s parking system, the city of Ann Arbor would receive 17% of that increased gross revenue – or somewhere between $97,000 and $226,000 more than it currently receives under the contract. For the first quarter of FY 2012 (which started July 1, 2011), the 17%-of-gross calculation for the city’s share worked out to $662,471, which would project to $2.65 million annually without any change in rates, demand or capacity.

This brief was filed from the DDA offices at 150 S. Fifth Ave. A more detailed report will follow: [link]