When you have to rush out of a meeting or dinner to feed a parking meter in downtown Sacramento, maybe this will make you feel just a little better:
Because of all those coins, it’s far more likely the city’s financing plan for the new Golden 1 Center will hold up. And it’s less likely the city will have to even consider what nobody wants – dipping into the general fund, which pays for police, fire and other basic services.
The city is generating more money from street meters partly because it raised rates by 50 cents an hour in December 2015, extended meter hours into the night and installed 4,000 new smart meters that accept credit cards and allow motorists to stay beyond the time limit, for a premium price.
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All those quarters add up. Monthly meter revenue rose from $567,736 in December 2015 to $768,764 in December 2016 and peaked at $887,390 last October when the arena opened, according to city figures.
Based on actual receipts, City Hall is now counting on $5.2 million in total new parking revenue in 2017-18 from city-owned garages and arena events, as well as meters. The updated estimate is $5.3 million a year in new parking receipts for the following four years, through 2021-22. That’s slightly ahead of the projections used in the financing model for the city’s $578 million total debt on the arena.
“We’re in pretty good shape,” says Assistant City Manager John Dangberg, the lead official on the arena.
The further out the parking projections go, however, the fuzzier they get.
New policies and initiatives could cut into parking money. For instance, Regional Transit is trying to get more people to ride light rail and buses into downtown. Some officials and developers are envisioning a downtown where a new generation of residents won’t even own cars but will walk, ride bicycles, hail an Uber or perhaps even use autonomous vehicles that never park. Changes in the market – the city controls only about 20 percent of all parking spaces in the central city – could also slow growth in parking revenues.
On the other side of the ledger, more parking demand than expected could be generated by retail and commercial development downtown, some of it related to the arena. Construction could replace private surface parking lots, increasing the use of metered spaces and city garages. New residential buildings will come with less parking because the city lowered the requirement from one space per unit to one for every two units. Also, city parking receipts could increase if the Legislature approves a bill that would allow cities to require disabled permit holders to pay at meters.
There are so many variables, Dangberg says, it’s very difficult to predict long term.
That potential for wide swings in parking revenue was one reason the city opted for a less risky arena deal in 2014. The big change was going from profit sharing on arena operations with the Kings to a guaranteed lease payment from the team, starting from at least $6.5 million a year and eventually rising to $16.7 million a year.
The lease payments are slated to bring in at least $354 million, or 61 percent of the total debt payments over 30 years, while new parking revenue is supposed to produce $62 million, or about 11 percent.
That takes into account the additional take from meters, but it gets a little complicated. While state law requires that meter revenue be spent on traffic and pedestrian safety, every dollar of new meter money frees up a dollar from the general fund now used on those programs to help pay arena debt.
The city says its parking modernization plan is designed to increase revenue through the higher rates, longer hours and easier payments – not through enforcement and tickets. Indeed, citywide citations dropped from 212,625 in 2015 to 189,729 last year, and tickets for expired meters decreased from 79,594 to 75,882.
That probably doesn’t make you any happier if you’re one of those who was ticketed. Paying to park can be annoying, and no one likes being nickel-and-dimed at every turn.
But let’s not forget it could have been much worse.
Initial versions of the financing plan depended far more on parking revenue, including $9 million a year that goes into the general fund. An early proposal even called for auctioning off city parking operations to a private company. Fortunately, that idea was nipped in the bud, partly because of horror stories in other cities. In Chicago in 2008, officials leased city parking for 75 years to plug a huge hole in the budget. But the private firm jacked up rates and the city’s inspector general concluded that the $1.15 billion deal was too low.
In Sacramento, we can argue until we’re blue in the face about whether the city invested too much taxpayer money in the arena, whether the city low-balled the amount or whether there should have been a public vote on the subsidy. Then there’s the entire philosophical debate of professional sports leagues strong-arming public money for stadiums and arenas, for instance the Oakland Raiders moving to Las Vegas.
But look at the bottom line. We have a new arena that is attracting big-name concerts and winning design awards. Even if its anchor tenant is mediocre, at least the Kings paid the $81 million in additional construction costs because the deal capped the city’s contribution. And thanks in part to the take from parking meters, the city’s financing plan looks sturdy so far.
Compared to a lot of other cities, that’s not too shabby.
Total parking meter revenue, by month:
Source: City of Sacramento