SUPPORTS ITEM NO. 6
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
RECOMMENDATION
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.
COUNCIL POLICY
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.
PURPOSE
The purpose of this report is to provide background information for
Council on the specific points of a proposed motion.
BACKGROUND
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
document.
DISCUSSION
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
streets).
- 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.
Fines
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
desired.
- 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.
CONCLUSION
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
Council.
* * * * *
APPENDIX 'A'
TERMS FOR NEW OPERATING AGREEMENT WITH VPC
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
Services;
- 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;