FY08 Parking Permit Fee Proposal

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FY08 Parking Permit Fee Proposal
2
Agenda

• Background
• Current Financial Pressures
• Parking Permit Strategy

3
Parking Permit Pricing History

• Over the last 16 years, there have been 7 price
  increases FY91, FY96, FY00, FY03, FY04, FY05,
  and FY06.
• Over that same period, demand for services and
  new parking facilities increased.
• Historically, there has been no real strategy to
  guide parking fees.

4
How Do We Compare to Other Universities?
5
How Do We Compare to Other Big 12 Schools?
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Debt Service Challenges

• Addition of West Campus Garage (WCG) and
  Pedestrian Passageway in FY05 added significant
  debt service and negatively impacted reserve
  balances
• Approximately 3M annual debt service for these
  two projects.
• Planned gradual rate increases were proposed that
  would cover the additional debt service costs.
• Instead a 6 across the board increase was
  approved for three years (FY03 FY05).
• These increases are not generating enough revenue
  to cover the additional debt service.
• Additional surface lots were built and expanded
  during WCG construction, which added the capacity
  to compete with WCG.

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Cost Savings/Reductions

• In August 2005, the department experienced a
  reduction in force and reorganization
• 33 positions were eliminated.
• Cost savings were approximately 1M.
• Despite this reduction, the same level of service
  has been maintained by introducing technology
  (e.g, paying and appealing on line and pay by
  space machines in pay lots rather than cashiers)
  and consolidation of duties and functions.

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Current Financial Requirements

• Reserve requirements
• TAMU Rule 23.02.02.M1, dated April 24,2006,
  requires that all university auxiliary
  departments maintain a three month operating
  reserve
• In addition, the rule requires the auxiliary to
  maintain 115 of the succeeding years annual
  debt service payment as funds not allocated or
  budgeted for any other purpose
• Deferred maintenance/capital renewal
• Estimates suggest that 2M/year is needed to
  address deferred maintenance
• In addition, 1M/year is needed going forward for
  capital renewal
• New budget assessments for FY07
• Auxiliary assessments in the amount of 461K
• Group Insurance Premium assessment in the amount
  of 74K
• Increased utility costs
• Utility costs for parking are expected to
  increase from 394K in FY05 to 662k in 2006 to
  972K in FY07.
• The savings from the reduction in force and
  reorganization have been offset by the new
  assessments and increased utility costs.

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Proposed Strategy

• The alternatives left to address the current
  financial requirements are to a) increase
  revenues, b) decrease services or c) a
  combination of the two.
• The recommended strategy is to increase parking
  permit fees in FY08 as detailed in the next
  slide. Subsequent rate increases in FY09 through
  FY11 will allow us to
• Eliminate free parking and services (e.g.
  retirees, business permits, university vehicles,
  traffic control services, special events incl.
  football)
• Begin to address the deferred maintenance/capital
  renewal needs.
• Meet reserve requirements as required by TAMU
  rules.
• Maintain current service levels.
• More closely align fee structure with service
  levels.
• Achieve long term financial sustainability.

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Proposed FY08 Rates Compared to FY06 and FY07
Rates
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Rationale for Specific Increases

• Reserved numbered spaces
• Higher level of service
• Higher cost of enforcement
• Lower utilization of spaces
• Reduced WCG rate
• Replaces overnight parking in PA 100, which is a
  problem for special events.
• Increase usage of WCG
• Staff surface lot
• Adjusts the price differential between student
  and staff parking
• University business overlays
• Currently offered at no cost, consequently cost
  is born by other permit holders.
• Reduces utilization of visitor and permit parking
  areas.

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Financial Impact of the Increase
FY08 Required Reserves Operating Reserve
2.1M Debt Service 7.3M Total
Reserve Requirement 9.4M
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Financial Impact of the Increase
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Parking Permit Pricing History
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FY00-FY05 Proposed vs Actual Rates (In
Anticipation of WCG Completion)
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Rate Proposal Beyond FY 08