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Tampa parking division faces huge debts for lot building

TAMPA — Taxpayers could be on the hook for millions of dollars because the city Parking Division is about to lose money.

Lots of money.

The division is supposed to be self-sustaining, with revenues covering expenses. But with debt payments set to balloon on parking garages built in Ybor City and downtown, the division faces the possibility of a shortfall of $6-million in 2011.

Mayor Pam Iorio says that cost would have to be covered by the city's general fund.

The forecast comes at a time when the city already is strapped financially. Declines in property and sales tax revenues have forced layoffs and a painful $17-million trim to this year's budget, which included a $300,000 supplement for the parking division.

"It's a problem," Iorio said. "Our parking fund is not financially viable, and we've got to find a way to get it in better shape."

How did the division end up so far in the red?

Much of the problem is a $60-million outstanding debt on parking garages built across from the Marriott Waterside Hotel in 1995 and in Ybor City in 2000 and 2001.

That debt was costing the city about $5-million each year.

Then in 2005, with the blessing of the City Council, Iorio sold a city parking garage on Davis Islands to Tampa General Hospital for $29-million.

The money was used to temporarily reduce the parking garage construction debt to about $2-million. But that ends in 2011, when payments go back up to $6.5-million.

Meanwhile, the city lost a moneymaker. The Davis Islands garage, adjacent to the hospital, pulled in more revenue than any other parking facility, earning $4.8-million in 2004, with most of that money coming from monthly permits.

Iorio said she doesn't regret the decision to sell the garage.

"I'd do that over again any day of the week," she said. "I did not believe it was right for the city of Tampa to charge people to visit friends and loved ones in the hospital."

Iorio also attributes the problem to what she calls "economic development" activities that dip into parking revenues.

For example:

• A contract negotiated by former Mayor Sandy Freedman that requires the city to give the Tampa Bay Lightning $1.2-million a year in parking revenues.

• A cap on fees in the Centro Ybor garage, a deal struck by former Tampa Mayor Dick Greco, that puts the rate at $1 for the first three hours of parking, compared to $1.60 an hour at other garages.

"The average length of stay is between two and three hours," said parking division manager Jim Corbett. "We're essentially getting $1 for 80 percent of the cars that are parked in that garage."

• A deal that allows Hillsborough Community College to use most of the spaces in the garage on Palm Avenue in Ybor City for free. HCC contributed land and a state grant for the facility.

Iorio said the Ybor garages were set up for failure, with the cost to build them far greater than their revenue.

"I wouldn't call it a good business model," she said. "This is what we've been given to work with."

• Iorio's decision to remove parking meters from streets in Ybor City earlier this year to improve business in the historic district. That will take $200,000 a year from the parking fund, not including money no longer collected through parking tickets.

"That didn't help our bottom line," Iorio said. "But it served a larger purpose."

And in May, the city renegotiated a contract to manage 11 parking lots owned by the Tampa-Hillsborough Expressway Authority. Under the old contract, the city collected $700,000 at the lots. The new, revenue-sharing deal brings only $300,000 to the city.

Iorio is working feverishly with her executive staff to solve the parking fund dilemma.

The Parking Division's staff suggested raising rates at some downtown parking meters, which they project could draw an additional $1.4-million.

But Iorio, who raised parking rates in 2003, said she doesn't want to go that route again.

The city has already started an automated payment system in garages and lots to cut personnel costs.

Corbett said the division has reduced its staff from 188 positions to 124 since 2005.

So far, one of the best bets to at least alleviate the problem is a plan to refinance the parking garage construction debt, which would potentially reduce payments by about $2.5-million.

In the midst of the global financial meltdown, the municipal bond market looks just about as bleak as the rest of the financing world. Even so, Lee Huffstutler, the city's chief accountant, says regular conference calls with bankers indicate that may change.

"We haven't actually gone to the market to try to borrow money. So I can't say whether the city of Tampa would have difficulty," he said. "We've talked to bankers and we've decided to wait until 2009, which isn't that far off."

Even with the refinancing, though, the city is still looking at a $3.3-million shortfall in 2011.

Said Iorio: "It's just going to be one more burden on the general fund."

Janet Zink can be reached at jzink@sptimes.com or (813) 226-3401.

Parking by the numbers

$16-million

Parking Division

budget

$1.7-million

Construction debt in 2009

$6.5-million

Construction debt in 2011 without refinancing

$4-million

Construction debt in

2011 with refinancing

$1.2-million

Amount the city pays the Tampa Bay Lightning hockey team annually from parking revenues

Tampa parking division faces huge debts for lot building 12/02/08 [Last modified: Thursday, December 4, 2008 1:10pm]

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