Not Enough Money

June 22, 2007
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GRAND RAPIDS — Parking Services Director Pam Ritsema said she has met with more developers in the past month or so than she has in years.

And they all want one thing from her: parking for their potential downtown projects.

Ritsema said all those projects on the drawing board would create a demand for 1,800 new parking spaces in the district. But her department only has enough funds put away to build a bit more than 1,200 spaces over the next five years, or just two-thirds of what the private sector might need if all the projects presented to her actually get built.

One reason why Parking Services will be a little more tapped out than usual in the years to come is that the Parking Commission consented to transfer the net revenue the department collects from fines to the city's general operating fund, if city commissioners want the money to help offset the account's deficit.

That net revenue is expected to range from nearly $290,000 in FY08, which starts on Sunday, to $205,000 in FY12. Ritsema said the transfer amount would remain stable for the first two years and then drop the next three years, because expenses will rise while revenue will remain steady. She said the only way to increase revenue and maintain a higher transfer amount would be to raise the fines.

Fees for standard parking violations were recently increased from $10 to $12, which is expected to add $95,000 per year to the fine revenue and help raise the overall gross income from violations to $1.26 million in FY08 and to $1.29 million in FY12.

But Parking Commissioner Kevin Denhof suggested that fines for violations that hamper public safety, such as parking in front of a driveway or too close to a fire hydrant, also be raised.

"Fines have to be expanded past the simple parking things. Those rates seem very low for a city of our size," he said.

Even with the revenue transfer, Ritsema said she can continue to operate the department, maintain the facilities, and have a "modest" expansion fund. The department's net income has been projected to be $2.7 million in FY08 but drop to $1.5 million in FY12. Expanding the downtown system is a major reason why net income will decline.

Ritsema has four projects on tap. One is a new DASH surface lot with 500 spaces. The other three are ramps with 120, 157 and 460 spaces. The four would add 1,237 spaces to the downtown system, which currently has about 6,700 spaces. About 400 of those are currently available for monthly parking.

All four projects are scheduled to be built in FY09 and FY10 at a total estimated cost of $28 million. Almost $9 million of that amount would come from the Parking Services' expansion fund with another $16 million coming from bonds. The Downtown Development Authority would be asked to contribute $3.4 million to the DASH lot.

Two other potential projects — a DASH lot with 1,000 spaces and a ramp with 500 — were not included on the department's latest expansion list.

Work on a new ramp on

Commerce Avenue SW
in the Cherry Street Landing district is wrapping up.

Commissioners also briefly discussed raising parking rates to collect more revenue to fund expansion projects.

"We can do whatever private companies can do to raise money. But I don't think that's our purpose," said Commission Chairman Jack Hoffman

"(Parking Services) should be run on a break-even basis," said City CFO Scott Buhrer.

Besides agreeing to the transfer, parking commissioners recommended that the City Commission not sell two-thirds of the downtown system to Third Coast Development Partners. ThirdCoast has offered from $35 million to $45 million for 10 lots and four ramps and was also willing to negotiate another price and discuss entering into a long-term lease with the city for the properties. But Hoffman said they were open to offers on individual ramps and lots.

Parking commissioners will make their decision official in two weeks when they vote on a resolution opposing the sale to ThirdCoast

City commissioners will have the final say on the sale.     

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