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HomeMy WebLinkAboutEx 3 BPC 11 21 2019 Res 2019 02 Permit RatesExhibit 3: Bozeman Parking Commission , LL/21/2OL9DBOZEMAN PARKI NG COM M ISSIONRESOLUTTON 2019-02A RESOLUTION OF THE PARKING COMMISSION OF THE CITY OF BOZEMAN, MONTANA, INCREASINGTHE COST OF PARKING LEASES AT THE BRIDGER DOWNTOWN PARKING GARAGE AND BLACK, ROUSE, N.WIII.SON, AND S. WILI-SON SURFACE LOTS.WHEREAS, pursuant to Bozeman City Commission Resolution #3803, the Bozeman Parking Commissionhas jurisdiction over the B-3 zoning district, and any residential parking permit districts created by the BozemanCity Commission; and,WHEREAS, Section 7-t4-45OL (3) of the Montana Code Annotated authorizes the Bozeman ParkingCommission to charge for use of parking facilities; and,WHEREAS, the 2016 Strategic Parking Management Plan recommended that the Bozeman ParkingCommission adopt a policy for annually reviewing and setting rates for parking services; and,WHEREAS, the Bozeman Parking Commission adopted Policy 2OL7-OL, on 3/9/L7; and,WHEREAS, the Bozeman Parking Commission finds that the demand for parking leases in all of its parkingfacilities is consistently in excess of current availability;NOW, THEREFORE, BE tT RESOTVED that the Bozeman Parking Commission adopts the following parkinglease rates for the 2020 calendar year in the Bridger Park Downtown Garage and the Black, Rouse, N. Willson,and S. Willson surface Lots:L. Main Garage = S952. Basement Garage = 51103. Surface ¡e15 = $75PASSED AND ADOPTED by the Parking Commission of the City of Bozeman, Montana, at a session heldon the 21th day of November 20L9. This resolution shall become effective immediately.Jim Ness, ChairBozema n Parking CommissionATTEST:Ed Meece, Parking Program ManagerCity of Bozeman Exhibit 3: Bozeman Parking Commission , LL/2L/2O79MEMORANDUMPage 1 of 7ì¡Meeting Date:To:From:November 2t,2Ot9Bozeman Parking CommissionEd Meece, Parking Program ManagerDavid Fine, Urban Renewal Program ManagerBrit Fontenot, Economic Development DirectorSubject:Parking Garagel Lot Permit Pricing for 2O2OOverviewCurrent pricing of the City of Bozeman's parking assets is not aligned with the Guiding Principlesof the Downtown Strategic Parking Management Plan (the "Parking Plan") adopted by the Bozeman CityCommission in 2016. The Parking Plan guides the Parking Commission to manage and price parking forthe benefit of Downtown customers and visitors, while parking for employees and new developmentshould take a secondary position. The City's current price of $1 per hour, with no maximum, chargescustomers and visitors more than double price for employee and new development parking. Parkingpricing should be aligned with the Guiding Principles of the Parking Plan. ln addition, current prices areexceptionally low and distort the market for parking. The cost of debt service, excluding operational andmaintenance cost, for a new parking space exceeds SZfS per monthl. To create new parking supply, theParking Commission should test price elasticity of demand by applying higher rates. We suggest a pricingstrategy that iteratively tests the Bozeman market's capacity for paying rates that approach the actualcost of providing new structured parking. While we expect a gap in the midterm between market capacityand actual cost, staff recommends an approach that moves the market price of parking towards itsunsubsidized actual cost over the long term.AnalysisAlign Parking Pricing with the Parking PlanThe Downtown Strategic Parking Management Plan (the " Parking Plan") promotes thedevelopment of parking management policies based on several guiding principles. Guiding Principal 1.a)of the Parking Plan states the City's role in parking is to serve customers and visitors to downtown.:Accommodate customers and visitors downtown and resídenús and guests inneighborhoods. Employee parking should be led by the private sector andl Assumes 534,000 per stall, for a 2O-year term, at 4.5%Íor a revenue bond Exhibit 3: Bozeman Parking Commission , t7/21/2O79Page 2 of 7through pañnerships where the City can reasonably pañicipate (financially orprogrammatically).The Parking Plan suggests that the City should manage downtown parking to prioritize hourlyparkers: the customers of downtown retail, restaurant, and business establishments. Current pricinginverts this relationship and prioritizes downtown employees, employers, and developers over downtownvisitors and customers. UDC Lease holders, for example, pay far less for parking per hour than hourlycustomers, despite the management inflexibility these long-term leases cause for parking garagemanagement. Rather than paying more for the inflex¡ble and consumptive use of parking resources,current pricing provides a hefty discount.We created the "daytime equalized rate" as an analysis tool in an effort to fairly compare hourly,monthly, and long-term UDC rates. Since peak parking utilization occurs on weekdays between noon and2pm and permit utilization is low in the evenings, we propose comparing pricing as if all permits wereused during weekdays. We assume a 20-day work month and an 8am -5pm weekday in which 2 hours ofparking are currently free. The cost of parking hourly for a 9-hour weekday is 57. Similarly, a $70 permitused only on 20 weekdays a month produces a rate of 53.50 per day for parking. While monthly permitsand UDC leases allow 24/7 parking, this is not how these permits are commonly used. Thus the daytimeequalized rate, despite its assumptions, allows for a more fair comparison of parking rates across differentpermit types.The chart below shows, via the daytime equalized rate, the current price of parking in thegarage for monthly and hourly parkers. The chart shows that customers and visitors pay significantlymore for parking during the daytime than employees and developers usíng longer-term products.Current PricingDaytimeEqualizedRate2ActualCustomers & Visitors(Transient Parkers)Employees/Employers(Monthly Parkers)Developers(UDC Parkers)5t5g.sos3.soThe current pricing system is misaligned with the values of the adopted Bozeman Strategic ParkingManagement Plan. Moreover, the low prices for monthly and long-term permit holders means that theusers most consumptive of public parking assets pay the least for parking. As the Parking Commissionexplores setting future monthly and hourly rates, they should consider the values of the adopted ParkingPlan alongside the desire to fund the construction of new parking downtown.2 Assumes 8 am - 5pm workday (9 hours), 20 workweek days per month, at cost of 51 per hour with 2 hours of freeparking. Exhibit 3: Bozeman Parking Commission , LL/2L/2OI9Page 3 of 7Market Supply and Demand and the 85% RuleThe Parking Plan and the Parking Commission are committed to actively managing parking basedon the 85% rule. This rule provides that parking should be managed and priced to promote enoughvacancy for parking to occur with minimal searching for a space. Prior to the issuance of 40 new monthlypermits, the parking calculator showed average peak occupancy of 76%. As we approachS5% averagepeak occupancy, it is appropriate, from a market perspective, to use pricing to manage demand andmaintain vacancy for customers, vîsitors, and other transient parkers.Parking industry best practices suggest a relationship between the size of the wait list and priceelasticity of demand. Staff maintains that considering the wait list is a logical way to manage monthlypermits in the long term once the garage has reached equilibrium with the total number of monthlypermits available remaining static for a period of time. We have not reached that level of equilibrium.lmplementation of the 50% rule3 for management over the past year has significantly increased the supplyof monthly parking permits. ln 2019, the Parking Commission authorized a net of 50 new monthly permitsbased on current utilization. Demand has been organic with no marketing efforts to encourage new permitpurchases. This absorption suggests strong demand for new permits. This demand, combined with adesire to maintain capacity for hourly parkers, suggests that now is a good time to increase the price ofmonthly permits and UDC leases to align this pricing with the Parking Plan.Reduce the Price of Daily Parking - Pilot a Daily and Nightly Rate for 2020The Parking Plan encourages making downtown parking accommodating for customers andvisitors. Our experience with license plate recognition (LPR) enforcement is yielding increased quantitiesof overtime citations within the parking garage. Parking tickets are not part of a good downtownexperience. Staff recommends piloting daily and nightly rates for the garage. These proposed rates wouldbe lower than paying the hourly cost for a full day or full evening, but high enough to capture someoffsetting revenue. Staff suggests a daily rate available from 6am - 6pm of 55 and a nightly rate availablefrom 5pm - 8am of 53. We suggest a Z4-hour maximum rate of Sg. these rates would allow patrons topay a daily or nightly rate and avoid the hassle of overtime citations in most situations. These rates arestill higher than current prices for long-term and monthly parking, and provide far more managementflexibility for the Parking Commission.Parking Prices in Montana CommunitiesEach Montana entity prices their parking based on their organizational values and parking goals.Other entities may price their parking for the benefit of employees and employers. Other organizations,like the Bozeman Airport, price their parking at a level that allows them to build more parking. Bozeman'sParking Plan guides us to manage parking for the benefit of customers and visitors - daily and hourlyusers. For context, it is worth considering how other entities price parking, but we should expect our3 The 50% rule is a management strategy rooted in the Parking Plan's value of managing for the benefit ofcustomers and visitors. The rule reserves 50% of the average vacancy at the designated peak for hourly transientparking, while allowing the other 50% to be sold as monthly permits. Exhibit 3: Bozeman Parking Commission ,77/2t/2O19Page 4 of7pricing strategy to match our values, reflected in our adopted plan, with lower pricing for daily and hourlyparking, and higher prices for monthly and long-term parking. Exhibit 3: Bozeman Parking Commission , LL/21/2O19Location Hourly DailyMSU Garage 52.50" SrrHelena 50.75 511.25Missoula Sf SSBillings 51 58Bozeman AirportPremium Covered S0 SfgPremium Uncovered S0 5L2Economy S¿ 5g*No monthly leases currently available."S4 First hourr 4 month pass cost divided by 4I The airport only has weekly rates. Monthly rates multiply the weekly rates by 4.Page 5 of 7MonthlySsg.tos5as585*s60.s05s¿o!SggolSzto!Align Monthly and Daily Rates for 2020Staff recommends moving our comparatively low monthly permit and UDC lease parking ratestowards greater alignment with the values of the adopted Parking Plan. For 2O2O, sfaf'f recommendsaligning the newly proposed daytime rate of 5S witfr the daytime equalized rate in pricing of monthly andUDC parking rates. Staff proposes a monthly rate for monthly and UDC parkers of 5100 per monthdiscounted slightly to S95 to encourage streamlined transactions for regular parkers. Staff believe thisrate is not significantly beyond the 20L9 rates charged in Billings and Missoula and is far more consistentwith the values of the adopted Parking Plan than current rates. Our hourly rates, with two hours free, arebelow the rates charged in Billings, Helena, and Missoula for the first two hours and equal to Helena andMissoula beyond the first two hours. Our proposed daytime daily maximum rates are significantly belowthe daily maximum in other Montana communities with parking programs. These rates serue our ParkingPlan's goal of prioritizing visitors and customers over employees and developers with our parking pricing. Exhibit 3: Bozeman Parking Commission , LU2L|2OL9Recom mendationBridger Park Garageng PlanDaytimeEqualizedRatea20t9Page 5 of 7Type2019 RateDaytimeEqualizedRates2020s7PrioritizationHourly RateCustomers &VisitorsDaytime Rate6am - 6pma Assumes 8 am - 5 pm workday (9 hours), 20 workweek days per month, at cost of 51 per hour with 2 hours offree parking.s Assumes 8 am - 5 pm workday (9 hours), 20 workweek days per month, at cost of 51 per hour with 2 hours offree parking.SVhours7EthaBasementUDC Leases(Non-Revocable)UDC Leases(Non-Revocable)Developers(UDC Parkers)Developers(UDC Parkers)MonthlyPermits(Revocable)Employees/EmployersCustomers &Visitors &Employeess4.00$s.soSg.soCustomers &Visitors &n/a5-8am24 Hour MaxVisitorsENighttimeRatenlaS80/monthS7o/month$70lmonthnla-nlanlaSs.sos4.7s54.7sSgSss3 Exhibit 3: Bozeman Parking Commission, LL/2L/2OI9PageT of7Surface LotsMonthly permit pricing in the surface lots should also increase to better align with thevalues of the Parking Plan. Additionally, revenue from surface parking lots can be part of therevenue system that supports the acquisition and development of additional structured parkingspaces. Since the projected cost of debt service for a structured parking space is S215/month andthere is community support for a new parking structure, the price of surface lot parking shouldbe raised commensurately with concurrent increases in the Bridger Park Garage.TypeHourly RateMonthlyPermitParking PlanPrioritizationCustomers &VisitorsEmployees/EmployersDaytimeEqualizedRate20\96Free20t9Rate2 HoursFreeSsoDaytimeEqualizedRateTn/a2 Hours Frees4.00RateRecommendation2020$zss2.s06 Assumes 8 am - 5pm workday (9 hours), 20 workweek days per month, at cost of 51 per hour with 2 hours of freeparking.7 Assumes 8 am - 5pm workday (9 hours), 20 workweek days per month, at cost of 51 per hour with 2 hours of freeparking.