Detroit pays $32 to process a $30 parking violation and hasn't adjusted rates since 2001. (Clarence Tabb Jr. / The Detroit News)
The recommendations, which would bump the current parking fines of $20, $30 and $100 per ticket to a two-tiered structure of $45 and $150, are among the revenue-generating strategies recommended by Detroit’s restructuring consultants.
The proposed reforms come as Emergency Manager Kevyn Orr awaits an analysis of the city’s parking assets and contemplates spinning off Municipal Parking, a department that generally breaks even or fails to bring in enough revenue to cover its expenses.
The city is paying $32 to issue and process a $30 parking violation, and it hasn’t adjusted rates since 2001. On top of that, about half of Detroit’s 3,404 parking meters are not operating properly at any given time, says Orr’s spokesman, Bill Nowling.
“It’s another example of the old, antiquated system and processes the city has that creates impediments for anyone trying to do their job,” Nowling said.
Detroit Chief Operating Officer Gary Brown is advocating for the changes, which he says would bring in an additional $6 million per year and $60 million over the 10-year plan of adjustment Orr is proposing for the bankrupt city.
“That’s real money,” Brown said. “If the asset is truly an asset and making money, no one is going to want to do anything with it.”
Brown said the ticket increases would not unduly burden Detroit residents, since 70 percent of the fines are written to nonresident offenders. The city also expects to offer a one-time amnesty program that’s commensurate with any increase.
Brown said it’s unclear how much is currently owed to the city in unpaid parking fines. Some fines are more than 10 years old, he said, surpassing the statute of limitations and “should be written off.”
License renewals prevented
Besides the ticket hike, the proposal seeks to prevent motorists with three or more unpaid fines from renewing their driver’s licenses.Brown said the actions can be implemented without additional expenditures, staffing or amendments to state or local laws, but they will need City Council approval.
At-large City Council member Saunteel Jenkins supports an increase, “especially since it’s costing the city more to write and process tickets than the actual parking fines themselves.”
The city and 36th District Court, however, should work with those who cannot afford to pay the tickets outright, she said.
“The fine structure here is one that continues to build,” Jenkins said. “For people already financially distressed, how much more of a burden will this place on them?”
Councilwoman Raquel Castaneda-Lopez noted the city’s current rates are below other comparable cities and an increase would not unfairly burden Detroiters.
“The proposed increases are just one piece of a comprehensive strategy to increase revenue within the Municipal Parking Department,” Castaneda-Lopez, who represents District 6, wrote in an email to The News.
Last year, the most expensive fine in the country for expired parking meters was $72 in downtown San Francisco; Detroit was among the lowest at $20, according to a survey by SFPark.org.
Chicago had the highest hourly on-street meter rate of $6.50. Detroit’s was on the lower end and among about a dozen cities that charged $1 per hour, the study found.
Detroit has considered outsourcing its parking system for years; a 2011 report showed the city could make $22 million to $65 million annually through the lease or sale of parking assets. Years prior, elected officials argued it could be worth even more.
Towing fee nearly tripled
The city has tried other methods to boost its parking coffers.In May, the City Council amended an ordinance that nearly tripled Detroit’s towing fee from $215 from $75. The rate does not cover storage.
In his debt-cutting plan filed in U.S. Bankruptcy Court last month, Orr noted that the department’s ability to raise revenue has been crippled by budget cuts, headcount reductions and unfavorable work rules. The challenges have led to reduced patrols and a drop in the issuance of tickets from 535,000 in the 2002 fiscal year to 323,000 in 2012.
The department has 90 full-time employees between its two divisions — the Auto Parking System and Parking Violations Bureau.
The parking system is responsible for the operation and maintenance of seven parking garages and certain on-street parking spaces. The projected revenue in the 2013 fiscal year for the parking fund, an enterprise fund that services the city’s parking bonds, was about $12.9 million. It’s expenses were expected to be about the same, according to a bankruptcy court disclosure statement.
The violations bureau enforces on-street parking ordinances and issues, processes and collects parking tickets. Its projected revenue for the current fiscal year is $11.4 million. After expenses, it will result in a $3.6 million surplus for the city’s general fund.
In fiscal year 2013, the city received payments of $11.1 million into the Automobile Parking Fund and it made payments totaling $11.2 million.
Consultants from Chicago-based Desman Associates have been evaluating the city’s parking assets for more than a month, as part of an up to $175,000, three-phase study, Nowling said.
The parking and transportation firm is expected to produce a 30-year financial model that lays out the department’s worth and cost of upkeep. Desman will also document the existing assets, gather industry trends and identify revenue enhancement options. Findings are anticipated by mid-April.
Data driving Orr's decision
In the final stage, Nowling said, Desman will provide the city with options for selling or leasing parking assets and, if needed, could prepare and facilitate the bidding process.“(Orr) is agnostic as to what the organizational structure is; only, it has to prove a net benefit to the city,” he said. “He’s going to let the data drive it.”
Orr first raised the possibility of leasing or selling off the parking department last summer.
The move is fairly new in the country, but could be a viable option for Detroit, said Leonard Gilroy, director of government reform at the California-based libertarian Reason Foundation.
“In a situation like this, where Detroit is with bankruptcy, you have to have your assets on the table,” said Gilroy, a privatization expert who has researched municipal leasing.
Other cities, including Chicago, have profited from spinning off parking.
Chicago received $1.2 billion upfront after entering into a 75-year lease of 36,000 parking meters in 2008. But the deal led to five years of rate hikes and reports the private company that took over the system will make 10 times the amount it paid the city.
Indianapolis entered into a 50-year lease deal for its meters.
Because parking is an enterprise and not a core government function, Gilroy said, off-loading it helps transfer a major risk.
“You are shedding risk, you are shedding costs and lots of responsibilities,” he said.
But Eric Foster, a governmental affairs consultant, has advocated against a lease or sale of Detroit’s parking assets, arguing the department’s debt load is minimal and it’s in a position to operate profitably.
“If structured in a good way, it will continue to be a revenue generator, pay for itself and contribute to the general fund,” said Foster, of West Bloomfield-based LB3 Management, LLC.
No matter the direction, Brown said the city is looking for funds that it will invest in replacing Detroit’s broken meters.
“We are not going to just let half the meters be down,” he said.
Expired meter fines
Fines in San Francisco’s downtown are the highest in the country, while Detroit, at $20, is near the bottom. Chicago has the highest hourly meter rates. Detroit is on the lower end and among about a dozen others that charge $1 for a top hourly meter rate.San Francisco (downtown): $72
Chicago: $65
Seattle: $44
Philadelphia: $36
Detroit: $20
Nashville: $11
St. Louis: $10
Hourly meter rates
Chicago: $6.50
New York: $5
Seattle: $4
Dallas: $2
Phoenix: $1.50
Detroit: $1
St. Louis: $0.75
Source: SFPark.org
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