HomeMy WebLinkAbout12-08-16, Exhibit 2 12-8-16 Rate Policy Memo
Bozeman Parking Commission
Rate Policy Memo
Prepared by BPC Executive Committee
BACKGROUND
The 2016 Downtown Strategic Parking Management Plan provides the following
recommendations:
STRATEGY 4: Establish a policy for adjusting rates
Implementation Timeline: Immediate to Near-Term (by December 2016)
Best practices indicate that parking rates be adjusted periodically to:
Cover normal increases in operating costs.
Reflect market demand.
Ensure efficient use of parking supply.
Provide for future growth as part of a comprehensive funding strategy (see Strategy 23). This
includes normal capital planning and projected growth in the system.
Consider rates in comparable cities.
Bozeman should establish formal systems within the municipal code that provide a basis for rate setting
in both the on and off-street systems. What is lacking in most jurisdictions is a routine commitment to
objectively evaluating rates at all levels (i.e., including enforcement fines and fees) based on a set
standard of performance metrics.
Overall, it is essential that rate adjustment be viewed as a standard operating procedure within the
overall parking management system; one that is data-based designed to support the fiscal health of the
parking system, and not politicized.
It is recommended that the City, through the Parking Division:
A. Immediately adjust current rates (garage leases, lot leases, citations and residential permits) to
address existing revenue short-falls. Actual rate changes can be calibrated to current estimated
revenue/expense deficits spread across all user categories.
NOTE: surface lot and garage lease rates were increased as of January 1, 2017. Still
need to discuss residential permit rate increases this spring to be effective in August
2017.
B. Adopt performance metrics for rate review and adjustments into a formal operations policy.
Best practices indicate two levels of analysis for determining adjustments. First:
1. The true cost of ideal operations, including supplies, operating fees, maintenance, and
support, as well as the reasonable cost of financing debt. Cost recovery would be the base
hourly rate plus annual/bi-annual adjustments to cover the costs of inflation within
operating cost expenses.
NOTE: PD and BPC needs to determine the “true costs of ideal operations”. Our current
financial reports do not provide the level of detail nor do they categorize expenses and
revenues specific to the operation of the garage versus surface lots versus residential
districts vs downtown district.
The spreadsheet pro-forma that RWC provided might be an appropriate to cost analysis
tool to refine and use on a regular basis.
The second level that would substantiate decisions to adjust rates would include:
2. Sustained occupancies in excess of 85%.
NOTE: This threshold/metric will be informed by the expanded parking study
recommended in Strategy 10 that will be conducted in 2017.
3. Consistency with comparable cities.
NOTE: As has been noted, we need to be cautious about this provision since there are
no comparable cities in Montana by virtue of the fact that Billings, Missoula, Great Falls,
and Helena charge for on-street parking which creates a much different fiscal reality.
C. Annually review and adjust rates for publicly owned off-street parking in accordance with
established performance metrics, with particular emphasis on ensuring consistency with
documented variations in normal operating costs. Rates could vary upward or downward based
on occupancy/demand differences.
D. Biannually review and adjust rates for publicly owned on-street parking in accordance with
adopted performance metrics.
E. Develop a set of comparable cities and routinely track their rate performance over time for on-
street, off-street and enforcement.
F. Integrate routine assessments of occupancy performance into both annual and biannual rate
evaluations (see Strategy 10).
INITIAL POLICY PROVISIONS
Definition of Rates
Rates to be considered as part of this policy:
Garage lease rates
Surface lot lease rate
Residential permit fees
Garage transient hourly rate
2-hour Overtime citation fee
Residential citation fee
Frequency of Rate Review
Annual
Garage lease rates
o review process to begin no later than September BPC meeting with any
action taken no later than November BPC meeting
Surface lot lease rate
o review in conjunction with garage rate review
Residential permit fees
o review process to begin no later than May BPC meeting with any action
taken no later than July BPC meeting
Biannual
Garage transient hourly rate
o review in conjunction with garage rate review every other year
Residential citation fee
o Review in conjunction with residential permit fee every other year
2-hour Overtime citation fee
o Review in conjunction with residential permit fee every other year
Criteria Considered
Including but not limited to:
Financial viability
o Comparison of expenses and revenues for a product or program
o Comparison of comprehensive Parking Division/Enterprise
Industry best practices
o Where applicable using rates and policies from comparable communities
(both in state and out of state)
85% Occupancy Rule
o When and where applicable consider the tenants of the 85% Rule to
determine how rate adjustments would impact use