TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Bruce Moe, Finance Director
SUBJECT:Title
Consideration of Increasing the Duration of Free Parking During the Holiday Season From Three Weeks to Four Weeks (Finance Director Moe).
DISCUSS AND PROVIDE DIRECTION
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council discuss and provide direction regarding increasing by one week the existing City Council policy of providing three weeks of free parking (bagging the parking meters) during the holiday season. Staff further recommends that the time period be reviewed annually during the budget process to evaluate the Parking Fund status and ability to absorb the costs.
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FISCAL IMPLICATIONS:
The approximate weekly cost of bagging the parking meters is $43,000 (accounted for in the Parking Fund). Thus, the existing policy of three weeks of bagging meters costs the City $129,000; four weeks would cost $172,000. The FY 2017-2018 budget includes an allowance for the existing policy of bagging for three weeks. Increasing the holiday bagging by one week will likely result in the Parking Fund underperforming revenue estimates for the full year due to the loss of the additional estimated $43,000. Since 2011 (including the planned bagging for 2017), the City has subsidized parking through the holiday bagging program by an estimated $946,000.
The Parking Fund is the funding mechanism for City parking operations. Revenues, mainly derived from parking meter collections, generate enough to cover operations and debt service on the Metlox structure and town square. However, the revenues are insufficient for any significant maintenance or capital improvement projects.
The unfunded CIP list includes $13.35 million in projects such as $100,000 for development of a downtown parking facility capital investment plan, $250,000 for parking technology occupancy systems for downtown parking lots, and $13 million for parking structure rehabilitation projects in accordance with a structural analysis. Also, the fund currently is projected to have only approximately $45,000 in reserves by year-end, well below the City Council reserve policy of four months of operating expenses ($611,200).
Finally, as a reminder, fifty cents of the $1.25 per hour on-street parking meter rate is dedicated to capital improvements. This source is expected to generate revenue of $700,000 this fiscal year that is deposited in the Capital Improvements Project (CIP) Fund. Those funds, when combined with other dedicated CIP Fund resources, are needed for the myriad CIP projects, as well as $25.1 million of unfunded projects.
Regardless of the decision on duration of the holiday meter bagging, the City will need to consider increasing parking meter rates to accommodate future parking capital projects, technological customer service enhancements and major maintenance efforts. A recent survey of other cities’ parking rates indicates that increasing hourly rates to $2/hour or more would be in-line with other coastal communities, with each $.25/hour generating approximately $695,000 annually (the City’s current rates are $.75/hour in City lots and $1.25/hour on-street).
BACKGROUND:
Providing free parking during the holiday season (bagging the meters) has been a long-standing tradition in the City. The duration of the bagging has varied over time, and has typically been determined by City Council on a year-by-year basis. For example, the practice was not followed in 2009 and 2010 for financial reasons during the Great Recession, but did resume in 2011 as follows:
2011 - 2 weeks
2012 - 4 weeks
2013 - 3 weeks
2014 - 4 weeks
2015 - 3 weeks
2016 - 3 weeks
2017 - 3 weeks (budgeted)
In 2015, City Council set a policy of three weeks of meter bagging going forward. This eliminated annual City Council approval, and allows local businesses to include this information in marketing and promotional materials well in advance of the holidays.
DISCUSSION:
At the October 17, 2017, meeting the City Council requested a review of the current policy of providing free parking by bagging City parking meters for three weeks during the holidays.
During the waiver period, parking is permitted at meters for up to the maximum posted hours (for example, downtown street parking has a 2-hour maximum). While parking is free for that duration, those exceeding the posted maximum are subject to citation. Further, citations for other violations will continue to be issued as warranted (wheel curbing, street sweeping, etc.). Please note that bagging applies only at all City parking meters, and excludes the shared State Pier and El Porto (L.A. County) beach parking lots.
Staff recommends that the City Council discuss and provide direction regarding increasing by one week the existing City Council policy of providing three weeks of free parking (bagging the parking meters) during the holiday season. Staff further recommends that the time period be reviewed annually during the budget process to evaluate the Parking Fund status and ability to absorb the costs.
POLICY ALTERNATIVES:
ALTERNATIVE #1:
Increase parking meter bagging from three weeks to four weeks for 2017
PROS:
Provides local businesses with an economic tool to encourage shopping and dining during the holiday season.
CONS:
Reduces parking meter revenues by an additional estimated $43,000, further straining the fiscal position of the Parking Fund.
ALTERNATIVE #2:
Do not adjust the existing meter bagging waiver period of three weeks.
PROS:
Avoids further fiscal strain on the Parking Fund.
CONS:
Does not provide additional economic incentive to shop and dine in Manhattan Beach.
With either alternative, staff recommends that the waiver duration be reviewed annually during the budget process to evaluate the Parking Fund status and ability to absorb the costs of the holiday bagging program.
ENVIRONMENTAL REVIEW
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.