Advertisement

"To meet these higher operating expenses and maintain net revenue neutrality, City staff proposes a rate increase for the City's on-street single space meters. This would bring hourly rates to $1.50 in the Downtown Core, $1.00 in the Downtown periphery, and $0.75 in Belmont Shore. City staff recommends that The Pike, which would also receive new meters, remain at $2.00 per hour...For each area, the rate increase is the minimum estimated rate required to pay for the new meters, both in terms of operating and capital cost. Even with the rate increase, the City expects to be at or below the rates other cities charge for parking," says city staff's agendizing memo.

The city management proposed parking meter increases are paired with a hearing item that would authorize city management to enter a contract to purchase and install the "smart meters" (costs detailed in memo below.)

By describing the proposed parking meter rate increases as providing net revenue neutrality, city management effectively implies that if the Council were to approve purchasing/installing "smart meters" without approving its recommended meter rate increases, the Council would create a net taxpayer cost that would have to be paid from some currently unspecified source(s).

[City staff memo text to Councilmembers]

Net Revenue Neutrality, Operating Costs, and Rate Increase

City staff recommends that any upgrade to single-space smart parking meters should maintain the current net revenues (revenues minus any costs), inclusive of impact on enforcement costs, citation revenue and operating costs. In addition to the initial purchase costs, single-space smart meters are expected to be significantly more costly to operate than traditional meters. These higher operating costs reflect credit card gateway and bank fees, battery and equipment replacement, and wireless communication fees. The City's current operating costs are approximately $158 per meter annually; staff analysis suggests that this cost could increase up to $446 per meter.

Credit card fees, which are transaction costs imposed by credit card companies, are a highly variable cost, due to both the amount of the fee charged per transaction, and the volume of transactions driven by customer use. In Long Beach, credit card fees average $0.24 per transaction for parking in the Downtown pilot area on Broadway and Third Street, which has parking machines that accept credit cards. The City pays for each transaction as the cost of doing business, as do other cities that have implemented smart parking meters. Underestimating credit card use has negative fiscal consequences. One city initially projected that 35 percent of users would utilize credit cards. However, credit card use accounted for 60 percent of parking transactions, resulting in an unexpected $1.4 million expense due to credit card transaction fees. This experience demonstrates the need to accurately plan for the increased costs. The City's Parking Meter Study revealed that it is prudent to expect a high demand for credit card utilization and ensure that the cost can be covered by meter revenue if use increases up to 70 percent.

To meet these higher operating expenses and maintain net revenue neutrality, City staff proposes a rate increase for the City's on-street single space meters. This would bring hourly rates to $1.50 in the Downtown Core, $1.00 in the Downtown periphery, and $0.75 in Belmont Shore. City staff recommends that The Pike, which would also receive new meters, remain at $2.00 per hour. Attachment B details the revenue projections with the proposed meter rates. For each area, the rate increase is the minimum estimated rate required to pay for the new meters, both in terms of operating and capital cost. Even with the rate increase, the City expects to be at or below the rates other cities charge for parking (Attachment A).

Advertisement

Advertisement

City staff's memo describes the "smart meters" as follows:

[City staff memo to Councilmembers] A new class of single-space meters has emerged in recent years that accept both credit cards and coins. These meters rely on solar energy in combination with a battery. In addition to credit cards and coins, these meters have the option of accepting near field communication (NFC) payment and a pay-by-phone app. The new single-space meters enhance the user experience by accepting credit cards, providing a large, brightly lit screen for viewing, delivering key messages to inform the user of potential changes in regular parking hours (e.g. free parking on holidays, no parking for special event), and providing valuable data to phone apps that identify open parking spaces and distraction-free, voice navigation to the available space. Many cities in California use these new smart meters to manage their parking assets, including Los Angeles, San Francisco, Santa Monica, Venice Beach, Manhattan Beach, and Huntington Beach.

Smart parking meters also provide the capability of sensing the presence of a vehicle in the space with the installation of a sensor, known also as a puck. The sensors provide valuable information to inform future parking decisions, including the availability of a space, the occupancy rate of the space, the length of time per occupant, and the turnover rate. The data from sensors will provide additional information for the City to determine if the enforcement hours reflect the actual use of the space, and if a meter's placement should be reassessed. The City's existing parking meters do not collect this data.

LBREPORT.com provides the full memo text below:

Long Beach Mgm.t Memo re Smart Parking Meters (contract hearing, proposed rate increases)