Two Years In, A Look At Pittsfield's Parking Meter Finances
PITTSFIELD, Mass. — As the debate over the installation of meters in the newly constructed Summer Street surface lot has begun in earnest, many are calling for a full-scale review of the parking program.
The City Council has called for an analysis, Downtown Pittsfield Inc. has called for one, Berkshire Nautilus, whose owner opposes the parking meters, has called for one. And many in the public have called for an accounting as well.
Three questions particularly look to be answered:
Are the meters effectively doing what they were intended to do?
Are the meters making financial sense?
Are the meters harming downtown businesses and driving customers away?
iBerkshires can't answer the final question because that's subjective and a business decision includes more than just parking so we'd be shooting in the dark to quantify that impact. However, we did take a look at the monetary figures with Director of Finance Matthew Kerwood and a usage report with City Engineer Ricardo Morales to shed some light on the other two questions.
The parking meters were $99,355.29 in the positive for the year at the close of fiscal 2019 on Friday. The meters brought in $244,151.17 in revenue against expenses of $144,795.88.
The breakdown of the expenses includes the following:
► $28,500 for contractual services. This is for the computer systems that run the meters. It also provides a back-end system for city officials to know how much coin is in each one, when one is malfunctioning, and when one is out of tape. It also provides usage data as to how long vehicles are paying for, or if they are just taking the free time — information we'll touch on later in this article.
► $18,604.61 on maintenance for the McKay Street Parking Garage. These expenses have not been for capital repairs but could be soon. The maintenance costs for the garage had previously been in the city's budget and are now being paid from meter revenues. Capital repairs could be made from that source. Kerwood said the elevator at McKay needs replacement and that may be paid for through the meter revenue instead of borrowing, which the city would have done in the past.
► $19,888.53 for supplies. This includes such items as coin bags to collect from the meters and receipt tape. But, this year it also included the replacement of the SIM cards and upgrading from 3G technology to 4G to help the system run smoother and quicker.
► $24,051.74 for bank service fees. When implementing the program, city officials opted to "eat the fees" charged with credit card transactions. The city also takes on a portion of the credit card charges on the Passport app. On the app, the city pays 15 cents per transaction and the customer pays 20 percents per transaction.
► $37,765 on equipment. This past fiscal year, the city purchased a replacement vehicle for the parking clerks as well as new license plate readers.
► The final piece is $15,986 in debt service. That is not paid for through the meter revenue but is an expense associated with the meters so iBerkshires has included it.
The city has two bonds on the purchase of the meters — one for $81,100 and another for $334,800. The city is paying interest up front to the tune of $12,942 and $3,044, respectively. The bonds expire 2032 and 2031, respectively, but payments begin to ramp up over the next few years — with the most expensive payment year being 2024 with a total cost of $54,750 — before falling.
The meters went into effect halfway through the fiscal 2017. The city now has 2 1/2 years of data.
In fiscal 2017, the city spent $12,825 on contractual services, $4,782.96 on bank service charges, and $14,742.64 in debt service. In that half year, the meters took in $62,576.59. In 2017, the net gain was $30,225.99.
In fiscal 2018, the city spent $34,536.50 on contractual services, $3,178.18 on supplies, $19,750.21 on bank service charges, $80,642.27 on equipment (this includes the purchase of the new meters for the First Street lot and a replacement vehicle for the parking clerks) and $15,986 for debt service. In that year, the meters took in $205,157.37. The city was left with a net gain of $85,600.71.
Each year the city has not only recouped enough money to pay for the meters' operations but has also been able to pay for some other items such as replacement vehicles and garage maintenance from that revenue instead of from the city budget.
This analysis doesn't include salaries and benefits for the parking clerks, which many say should be included. iBerkshires cautions that those expenses existed before the meters and would if they were removed because, presumably, the city would go back to timed parking and there would still be a need for enforcement, and the parking lots and garages would still need maintenance.
But we have been asked, so we asked. What if the city went to a free-for-all parking system, no enforcement, no time limits, no meters?
Overlooked in this situation is parking permits. The city sold $530,517 worth of parking permits in fiscal 2019. That is unrelated to the parking meters and flows directly into the city's general fund (the same place the debt service for the meters is paid from). The city also took in $173,269 in tickets this fiscal year. A completely free parking system would immediately take out $703,786 from the city's local receipts.
As side note on the ticketing revenue, that figure went up when the meters were first installed but is now trending downward whereas the meter revenue is continuing upward. That's a sign that people are more aware of and using the metering system more frequently.
The city has four people associated with parking. Two parking clerks make a combined $68,057 in the next budget, a garage manager makes $56,370, and a custodian $32,480 for a total parking salary of $156,907.
Because of privacy rights, the actual health insurance benefits for those employees can only be estimated. If it is assumed that each employee takes the most expensive family PPO health insurance plan, the cost is $26,186.28 per employee, for a total of $104,745.12. On the low end, the city would be spending $31,926.24, if the employees all chose the least expensive plan.
On the low end of insurance and wages, the city would be paying $188,833.24 in total for personnel. On the high end, it would be $261,652.12. The true personnel cost likely falls somewhere in the middle. Wherever it falls, the personnel cost to manage the system is far less than the permits and ticket revenues.
A few additional notes: The city has a total of four vehicles dedicated to the system, two that were recently purchased. Two of those the parking vehicles are electric and, at this point, require little maintenance and were purchased from the parking revenue. The city also uses other equipment such as message boards, street sweepers, and lawnmowers to maintain the parking lots and garages but that is equipment existing in the Department of Public Services and used for other things outside of parking management.
To summarize: When the city's parking system was based on timed parking, the permits and tickets outpaced the personnel and equipment cost by a little more than double, adding revenues to the city's budget to be used elsewhere. With the meters, all included, that revenue grows even further with items now being paid for from that extra meter ticket revenue.
With a completely free system, the city would no longer receive a ticket, permit, or meter revenue, but would still have to maintain the parking structures, and operating budget would either have to be cut or taxpayers would have to make up for that loss.
Conclusion: the meters are a net positive revenue generator for the city.
A question for future planning: what happens when the meters need to be replaced? Will the city take on another capital borrowing or have enough to replace meters with the revenue generated from them?
The second question is are these meters doing what they are supposed to be doing? Morales says they are to some degree. The idea behind the parking plan was to place a premium on the spots in most demand to encourage employees or those who spend a long time downtown to park in areas not in demand — usually farther from North Street.
The Department of Public Services tracked the transactions made in the various locations. The side streets and surface lots off North Street have shown a greater number of paid transactions, meaning people were staying for more than 30 minutes whereas North Street spots showed a greater number of transactions that were just for the free 30 minutes. Thus, the on-street spots are being turned over more frequently.
Upper North, in general, saw 78 percent of the transactions for just the free 30 minutes. In the section of Bradford to Linden streets, 57 percent were free and from Columbus to Summer it was 55 percent. Those are the only three spots in which free transactions are more regular than paid ones.
On South Street, 45 percent were free; on lower North 44 percent; near Berkshire Medical Center 40 percent; at Park Square 37 percent; Wendell Avenue 33 percent; the First Street lot 29 percent, and McKay Street 29 percent.
People who tend to stay longer park in the McKay or First Street lots whereas people who are just running in and out of a store park on North Street.
That data will help determine where meters could be moved or pricing changed. Lower North Street receives an average of 187 daily transactions — the busiest area on a daily basis — whereas upper North, where there are multiple businesses with their own private parking lots, sees only 10 transactions daily.
The average transactions per parking meter cluster is as followed: 140 for McKay Street, 99 for the First Street Lot, 84 on Wendell Avenue, 70 on Park Square, 47 from Bradford to Linden, 43 from Columbus to Bradford, 33 on South Street, and 31 near Berkshire Medical Center.
Conclusion: the parking meters have changed parking behavior and the spots on North Street are turning over more frequently. But opponents would question whether behavior needed to change and whether there has been a decrease in the number of people and vehicles overall.
This provides some analysis as the city continues to debate the issue. But it doesn't answer the question of whether or not the meters are deterring people from going downtown, or whether businesses are suffering because of it, or where the meters could be more effectively placed or whether the city should revert back to timed parking.
But it does answer particular questions that have been asked of us.
Tags: parking meters,