The city's General Fund is going to take a multimillion-dollar hit in the next five years because of slumping revenues in the city's parking empire.
The city has become dependent on the parking fund to help pay for basic police, fire and public works services --$10.8 million worth in 2003. The poor economy and high Downtown office vacancy rates means the parking fund has less money to give, a June 8 Finance Department/Public Works memo said.
How bad is it?
The parking fund is supposed to have a reserve equal to three months' operating expenses, or approximately $10 million, the memo said. Instead, the fund had a $6.4 million deficit at the end of 2003, which is projected to grow to $69 million by 2010 if the city takes no action.
The City Council voted 8-3 June 18 to approve a workout plan. Gary Schiff (9th Ward), Dan Niziolek (10 Ward) and Barret Lane (13th Ward) voted no. The plan includes cutting transfers to the General Fund by more than 50 percent over the next five years, refinancing ramp debt, possible ramp sales, and other administrative and marketing improvements.
According to the analysis:
The city owns 22 ramps, eight surface parking lots, 6,200 parking meters and the impound lot. Low ramp occupancy, high construction debt and excess parking fund transfers to the General Fund built the shortfall.
From 2000 to 2003, the number of cars parking in city-owned ramps built prior to 1999 dropped from 4 million to 3.2 million. Revenue dropped from $25.3 million to $21.6 million.
Further, the parking fund transferred $12.4 million to the General Fund and the Target Center debt in 2003. The transfer was based on what the General Fund needed instead of what the parking fund could afford.
Under the new plan, the parking fund would reduce General Fund transfers by $1 million each year from 2005 to 2008, and another $800,000 in 2009, when the annual contribution would total $5 million.
This "fix" doesn't solve the parking fund problem unless the economy improves -- there would still be a negative cash balance of $19 million in 2010, requiring further cuts to General Fund payments or other savings. The plan uses conservative estimates, assuming the economy stays depressed and office vacancy rates remain high.
Other options include tapping Convention Center sales tax money or reducing payments to the Target Center debt, which would require money from some other source.