CS&B AGENDA
                                                FEBRUARY 20, 1997  

                             ADMINISTRATIVE REPORT

                                           Date: February 24, 1997

                                           File No. 2102-9

   TO:       Standing Committee on City Services and Budgets

   FROM:     General Manager of Engineering Services

   SUBJECT:  City Owned Off-Street Parking Facilities


        THAT the General Manager of Engineering Services and the Director
        of Legal Services finalize the new operating agreement with the

        Parking Corporation of Vancouver (VPC) as per the Council action of
        July 11, 1995, and on terms outlined in the report on Operation of
        City-Owned Off-Street Parking Facilities, dated June 7, 1995.  A
        summary of the terms for the operating agreement is provided in
        Appendix A.


        There is no specific policy related to this matter.  However, past
        practice has been for City Council to make decision on pricing and
        operation of off-street parking facilities or delegate decisions

        specifically to City staff.


   The purpose of this report is to provide background information for
   Council on the specific points of a proposed motion.


   The motion under discussion on February 4, 1997 is as follows:

        "THAT Council confirm that the Parking Corporation of Vancouver
        shall operate, maintain and fix rates for all "City-owned"
        off-street parking facilities."

   Historically, the City involvement in off-street parking goes back 50
   years in terms of commercial operations.  In addition, policies on
   parking in parks and at community centres has been the responsibility of
   the Park Board.

   The major operator of the commercial City off-street facilities is the
   Parking Corporation of Vancouver (VPC).  Most of these parking

   facilities are owned by the City (with the exception of the
   joint-venture facilities), and all profits are returned to the City. 
   The VPC also operates a few private parking facilities (i.e. Pacific
   Centre North and BCIT), and it is our understanding that they are
   operated on a cost recovery basis.

   In July 1995, City Council debated the issues related to the VPC and
   confirmed the terms of the master operating agreement.

   On July 11, 1995, Council resolved:

        THAT Council authorize the General Manager of Engineering Services
        and the Director of Legal Services to enter into an updated

        operating agreement for the City's off-street parking facilities
        consolidating, where possible, those facilities now operated by the
        Parking Corporation of Vancouver.

        THAT Vancouver Parking Corporation (VPC) budgets continues to be
        co-ordinated with Engineering Services and Corporate Services for
        eventual approval.

        THAT Engineering Services continue to advise, assist and monitor
        VPC operations, enforcement and administration.

        THAT Corporate Services continue to advise, assist and monitor VPC

        accounting, financial reporting, risk management and annual audit.

   In the late 1940's, the Downtown business community became concerned
   with the development of major suburban shopping malls such as Park Royal
   which were to include unlimited free parking.  In order to maintain a
   viable business environment in the Downtown, the businesses formed the
   Downtown Business Association (DBA).  In 1947, Council established the
   Downtown Parking Committee which was followed by a local improvement
   by-law to finance the purchase of land and construction of parking lots. 
   In 1948, the Downtown Parking Corporation (DPC) was incorporated to
   effect this by-law.      
   In 1949 under the new by-law, Council borrowed one million dollars which
   was used to finance the purchase of 8 properties for parking.  These

   sites were developed and operated for parking by the DPC, and Council
   established the Vancouver Parking Commission to manage, control and
   improve parking areas.

   In 1966 Council decided that a Parking Authority was not appropriate. 
   In 1974, the DPC entered into a lease agreement to run the downtown
   parking sites. 

   Today, the City is still very active with the businesses and merchants
   in the Downtown, and liaises with the Downtown Vancouver Business
   Improvement Association (DVBIA).  The Downtown Parking Corporation is
   still the City's major parking operator (under new name of Parking

   Corporation of Vancouver (VPC)).  The VPC operates the majority of the
   City's off-street parking facilities, some under contract, some under
   letter agreement and others without written agreements, but on terms
   similar to existing agreements.  

   A new master operating agreement is currently being completed between
   the City and the VPC to consolidate these parking facilities into one


   Currently, the City off-street parking involvement is:

   1.   Commercial Lots                     8,800 spaces
   2.   Community Collective Parking          630 spaces
   3.   Parks                               4,400 spaces
   4.   Queen Elizabeth Theatre               250 spaces
   5.   Small Holding Properties              250 spaces

        TOTAL                              14,330 SPACES

   The general terms of the new agreement with the VPC as approved by
   Council in 1995 are attached as Appendix A.

   The past practice of Council has been to have VPC manage lots purchased
   with Parking Sites Reserve funds.  We will be recommending to Council
   shortly that the Woodwards Parkade (recently purchased) and the West End
   Community Centre parkade be operated by VPC.  Because of contractual
   agreements with some of our joint venture partners, some lot operations
   must still go to tender, and the VPC may not be selected (i.e. Bentall
   and Library Square).

   The community collective parking lots are free of charge and were
   developed as local improvements for specific business areas. 
   Maintenance costs for these lots are charged to the property owners. 
   Any consideration of charging for parking in these lots would need to be
   reviewed with the impacted business community.

   Parking in Parks and at Community Centres is the responsibility of the
   Park Board who set operating policy, rates, and award operating
   contracts.  Presently, the majority are operated by U-Park.

   The Queen Elizabeth Theatre was originally developed with Parking Sites
   Reserve funds but after the loan was repaid, the operation was turned
   over to the Theatre Board to manage, and benefit from the revenues to
   support their programs.

   The balance of approximately 250 spaces on short term PEF holding sites

   are operated on month-to-month leases with other parking operators,
   which at present is mostly Impark.

   Over the last five years, staff have purchased or developed 7 additional
   parking sites representing over 4,000 additional parking stalls, of
   which 550 are operated by the City on behalf of our joint venture
   partners.  As a result, staff are now managing 28 parking sites, which
   generates annual net revenues of approximately $4,200,000.  These funds
   go to the Parking Sites Reserve to finance other developments and
   capital improvements as approved by City Council.  In addition to this
   net revenue figure, approximately $1,600,000 is paid by the parking
   operations in property tax for the parking sites, which contributes to
   the overall tax base.    

   In summary, City Council is and has been involved in the specific
   decisions on parking development and operating contract awards, except
   for small holding sites, which are on month to month contracts.

   Parking Rates

   The City's present parking policy provides Engineering Services with the
   authority to establish rates for both transient and contract parking for
   all VPC parking facilities, with the approval of City Council.  As the
   City controls a significant portion of the parking resource in the
   downtown core and can exert some influence on the parking rate

   structure, rate setting becomes an important tool to achieve traffic and
   transportation objectives.  In conjunction with setting rates for
   on-street parking, the City has some ability to discourage commuter
   vehicle trips, while providing affordable short-term parking in support
   of retail and businesses.  This helps to ensure an economically viable
   and active downtown.

   The VPC assists in gathering information and makes suggestions to staff,
   who include this information in a report to Council as necessary. 
   Generally rates are set by comparing rates with other private operations
   in an area or in accordance with Council policy.  This policy is:

        Parking rates set by the City (on-street and off-street) should

        generally reflect the market demand, except where variation from
        market rates is appropriate to achieve any of the following:

        -    influence the duration of parking usage (e.g., encouraging
             short-term and discouraging long-term commuter parking).
        -    support specific land use patterns (e.g., maintain shopping
        -    minimize traffic circulation by maintaining competitive
             on-street parking rates.

   Staff last reported to Council on the issue of rate changes in 1995.  In
   that report, City Council approved the following:

        -    THAT Council approve the parking rates as outlined in Appendix
             1, effective as soon as possible after April 1, 1995.

        -    THAT Council authorize the General Manager of Engineering
             Services to continue to make interim parking rate changes.

   Staff conducted a semi-annual rate review in late 1995, in consultation
   with the VPC, and made some minor adjustments, as authorized by Council. 
   In 1996, another rate review was conducted by staff and the VPC,
   resulting in further minor changes.  Staff will be reporting to Council
   in 1997 on the results of the 1997 rate review.

   Staff conduct rate reviews to ensure that the public is provided with
   affordable parking, and to ensure that the parking facilities and the
   Downtown retail remain economically viable.  City Council have been
   involved in setting rates, with small modifications delegated to the
   General Manager of Engineering Services.  


   The operators of parking lots are usually responsible for enforcement of
   regulations, and this includes the VPC.  Currently, the City policy for
   parking fines in VPC lots is to charge the daily maximum rate of the
   lot, which on average is approximately $2.50.  VPC issues 11,800 tickets

   annually, with approximately 7,400 payments received back, representing
   a return rate of 63% and revenues of $17,800.  Private operators
   currently impose fines of $40.00 and often tow.  

   VPC has suggested that revenues could be increased in this area.  There
   is a potential to increase revenues, by increasing fines or increasing
   enforcement.  However, there are many issues to consider, which warrant
   further study by staff.  These include:

   -    Currently, the majority of the VPC lots (65% or 5000 stalls)  are
        attendant operated, where customers pay for the time used, and
        fines are not applicable.  Additional fine revenues can only be

        generated from the remaining unattended Pay-and-Display lots (35%
        or 2700 stalls).  The majority of these unattended lots are outside
        the downtown area, serving local residential and commercial needs
        which includes the south False Creek lots.  Aggressive ticketing or
        high fines need to be discussed with area residents.

   -    There are 2 aspects to increased enforcement - increased fines and
        increased towing. With increased fines, the legal authority to
        impose penalties in commercial lots is currently a civil matter,
        where the contractual agreement between the operator and the
        customer governs.  With towing, City By-laws regulate the process
        upon which the towing of vehicles are allowed.  The City may not

        want to institute an increased towing policy, except for safety
        reasons or gross repeat offenders.  This is the same policy for
        on-street towing.  The legal ability to collect these fines and the
        towing policy needs to be reviewed.

   -    Past City policy has been to charge a lesser fine for off-street
        parking than for on-street parking to encourage more off-street
        parking for longer term patrons.  If off-street parking fines rise
        to meet on-street fines, the effect would be to drive longer term
        parkers onto the street, where short-term, high turnover spaces are

   -    Higher fines will result in a lower compliance with the payment of

        the fines.  Voluntary remittance of private sector fines is at
        about 45%.  If the fines are raised to $10.00, the 11,800 tickets
        issued would result in revenues of $53,000.

   Staff recommend that further study be performed, in conjunction with the
   VPC, and that staff report back to Council on City policy for fines and
   enforcement in the off-street City lots.  


   This report provides City Council with some background and policies for

   the operation of the City owned off-street parking facilities, and the
   relationship between the City and the VPC.  It is recommended that staff
   be directed to conclude the negotiations to enter into the new master
   operating agreement with the VPC, with the terms previously approved by

                              *   *   *   *   *    
                                 APPENDIX 'A'


   Adopted by City Council July 11, 1995

   THAT Council authorize the General Manager of Engineering Services and
   the Director of Legal Services to enter into an updated operating
   agreement for the City s off-street parking facilities consolidating,   where possible, those facilities now operated by the Parking Corporation
   of Vancouver.

   Highlights of the revised agreement are:

   -    existing agreements are consolidated into one document which will
        standardize and clarify operating conditions;

   -    the term of the revised agreement is 20 years expiring in 2015 with

        automatic renewal if not cancelled;

   -    the agreement contains provisions for cancellation of both the
        entire agreement and individual lots;

   -    all net profits from all sources are paid by VPC to the City;

   -    budgeting and reporting are consolidated under the General Manager
        of Engineering Services in consultation with the General Manager of
        Corporate Services.  This will clarify roles and ensure parking
        operator accountability as requested by our current operator;

   -    establishment of contract parking provisions and hours of operation

        are the responsibility of the General Manager of Engineering

   -    establishment of parking rates are the responsibility of the
        General Manager of Engineering Services and are reported to Council
        as necessary;

   -    the parking operator is responsible for all maintenance and
        financial accounting;

   -    the parking operator is responsible for budget requested capital
        improvements up to $10,000;

   -    the City is responsible for payment of property taxes or payment in
        lieu of taxes; and

   -    flexibility is provided in the agreement for the addition or
        deletion of sites;