Detroit pays $32 to process a $30 parking
violation and hasn't adjusted rates since 2001. (Clarence Tabb Jr. /
The Detroit News)
Detroit — For the first time in more than a decade, the
city may increase its parking fines and come down harder on repeat
offenders who don’t pay up.
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 ratesChicago: $6.50
New
York: $5
Seattle: $4
Dallas: $2
Phoenix: $1.50
Detroit:
$1
St. Louis: $0.75
Source: SFPark.org
