Parking garage usage, revenues improving
CHAMPAIGN — After the garage at the corner of Hill and Randolph streets ran a deficit in its early years, the gap between revenues and operating expenses has narrowed — although the city is just beginning to pay off the $12.7 million principal balance of the loans it opened to build the garage.
City officials expect the numbers to continue to improve as downtown development proceeds. Traffic in the 600-space parking garage was minimal in the months after it opened in 2009 and into 2010, prompting city officials to lower parking rates in an attempt to attract more customers.
Parking income has improved, city records show, and the garage is operating near a break-even point.
In 2012, the city collected $222,095 in parking fees — a 3.7 percent increase over the prior year. It cost the city $231,919 to run the garage in 2012, public works spokesman Kris Koester said.
The expenses include about $29,000 per year the city spends on costs related to the parking garage, like bank fees and promotional materials, which are not necessarily related to the direct operation of the deck.
Koester expects the upward trend in parking income to continue.
"We're basing that off of continued development in the downtown area," Koester said. "The opening of the Eden (Supportive Living) project will bring us some additional business."
The Hyatt Place hotel at Neil and Main streets will follow soon, and Koester said the owner of the M2 building adjacent to the parking garage is starting to lease out some of its remaining open space.
Koester said the city is not looking at adjusting its parking rates in the garage for next year.
However, the city will spend the next 14 years paying off the remaining debt — nearly all of it — on the garage. The city had been making interest-only payments on its $12.7 million parking garage bonds until December 2012.
It will pay $1,149,275 this calendar year toward the $12,215,000 principal balance on its bond debt, according to a document furnished by the city's finance department. Payments will peak at $1,718,562.50 in 2017, before they start to taper off toward the projected payoff date in 2027.
In the end, with interest, the parking garage at Hill and Randolph streets will have cost the city just more than $19 million.
While the city only spent just more than $200,000 in costs directly related to the operation of the garage in 2012, officials had budgeted for $271,634 in expenses.
The city simply did not spend all of it. The expense budget is the same for 2013, but through October, it cost the city only about $196,022 to run the garage.
Koester said the city intentionally overbudgets as a contingency for unexpected problems or repairs. Actual spending has come in under budget for the past five years.
The private contractor that manages the garage, Heartland Parking, has proposed a $245,000 operating budget for the parking deck in 2014.
According to city documents, two full-time equivalent cashiers will be paid $9.50 per hour, and a 12-hour-per-week supervisor is paid $10.50 per hour — totaling $46,072. Maintenance workers who collectively work about 76 hours per week will make a total $40,248.
The city also will reimburse Heartland Parking for manager wages ($35,000 next year), utilities ($28,000), employee group insurance ($18,000), payroll taxes ($13,952), workers' compensation ($5,515), office supplies ($2,800), maintenance supplies ($4,600) and repairs ($23,700), among other items.
City switches managers for deck
CHAMPAIGN — One move keeping expenses down at the Hill Street parking garage is this week's city council decision to switch to a new private manager.
A five-year deal with Parking Solutions Inc., the Columbus, Ohio-based contractor that had been running the parking deck, will expire at the end of this year. Management fees are a smaller part of what it actually costs to run the parking deck, but Parking Solutions had asked to increase its fees 68 percent from this year to next, according to city documents.
The city had paid $76,983 in fees to Parking Solutions over the course of the past five years, including just under $20,000 it paid to the parking manager this year. Those management fees are in addition to the garage's operating costs — like maintenance and cashier wages — for which the city reimburses the manager.
Parking Solutions asked the city for $102,829 in management fees to be paid over the next three years to extend its management contract. It was the higher of two bids.
"It came down to, could we get the same service for a better price and be more frugal?" said Kris Koester, public works spokesman.
The low bidder, Peoria-based Heartland Parking Inc., will take over management of the parking garage for the next six years. The city will pay a total $51,780 in fees spread over the next three years and then increases based on the consumer price index for three years after that.