Parking Debt, FY 2014 Style

Here is a quick take on FY 2014 deficits on debt service for East Lansing parking structures.

Profit margin across the parking system is slightly lower than last year: 42.5%. This is calculated by dividing net parking revenue of $1,475,375 by gross parking revenue of $3,472,265, subtracting $1,996,890 in operating, personnel, and administrative costs.

Debt service on Building Authority bonds is $2,035,490, but adding the portion of the 2011 repair bonds for the Division St. ("colorful") garage, debt service on the four parking structures (Division St./University Place, City Center/CVS) comes to about $2,100,000.
Net parking revenue for Division St./University Place garages comes to about $350,000 (including validations). Net parking revenue on Albert/Charles (City Center) and CVS garages comes to about $345,000 (including validations).

So net parking revenue on the Building Authority garages is running a deficit of about $1,405,000 on debt service.

Net lease revenue on the commercial space under the Division St. garage (Georgio's pizza) comes to $29,000 (although administrative cost is not accounted for). Since the other city commercial space under the garage is used for Scene/Metrospace, which runs a deficit as a parks and recreation activity of about the same amount, I would prefer to consider the net from the space under the garage as zero.

Tax increment financing from University Place, which goes for the Building Authority bonds, is down to $310,000, with the state cutting back on its portion.

So accounting for all sources that are supposed to provide self-financing for the bonds on these structures, the unfunded debt service comes to about $1,095,000 or $1,066,000, depending on whether we include the rent from Georgio's.

I don't have an exact breakdown this year for the two bond series for Albert Place (a little of which went to improve lot 11), but debt service is about the same as last year, ~$245,000. Net parking revenue from the Albert Place garage (lot 7) comes to about $53,000, but remember lot 7 had gross revenue of $58,000 in 2006 ($124,000). However, lot 11 did increase its revenue after the improvements, so let's call it more or less a wash, meaning net parking revenue for the Albert Place bonds comes to about $190,000. Albert Place TIF is projected to be $134,000 due to some more condo sales (I have not checked to see if this has happened), which would leave a deficit on debt service of about $55,000 for a parking structure whose primary purpose is to serve residents of Albert Place.

I want to point to this alarming note (p. 159) in the FY 2014 budget:

The Marriott garage was previously forecasted for repairs in FY2014, but the latest engineering studies have estimated that repair cost will exceed the available funds from the FY2011 bond issue. Repairs are being re-scheduled to FY2016 when the construction bonds will be paid off freeing up funds which can be used towards the necessary repairs.

I am determined, through ballot initiative if necessary, that before debt service on the University Place/Division St. garage bonds is completed in October 2016 (actually FY 2017) that the Parking System fund is demoted to being subsidiary to the general fund, so any of its expenditures must compete against other needs of the community. Repairs to garages, so poorly constructed they need extensive repairs before they pay off their debt, need to be weighed against repairs to deteriorating neighborhood infrastructure that likely depreciates property values and tax revenue. It is time all city revenues and expenditures, except those with separate millages (library, solid waste) and the water/sewer fund, which acts as a separate utility serving more than East Lansing, fall within a single accounting system, so all budget priorities are created equal.

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