The Problem with City Revenue

 

 

 

 

"As  @UrbanThree has shown time and time again, cities everywhere have one thing in common: compact, mixed-use neighborhoods raise the most tax revenue, while their auto-oriented suburban counterparts cost more than they raise. Suburbia is subsidized."  -StrongTowns

 

Parking Rates at Eleven Parking Structures I

The 10 January 2023 Agenda Report prepared by the LB Parking Master Plan Subcommittee calls for embellishing eighteen parking lots and constructing eleven new parking structures . Table-2 of this report gives a summary of the parking structures labeled Projects H-R, their street locations in Laguna Beach, the number of parking spaces added and the capital cost of construction. Assuming 30-year financing and 40-year life the chart shows the minimum hourly parking rate necessary to breakeven with the amortized costs over the 40-year structure life.   

The analysis considers costs of construction, debt service, demolition, salvage, in-lieu parking fees, maintenance and other costs in the amortization over the structure lifetime. Not included: parking enforcement,  opportunity costs, environment factors (quakes, floods), depreciation, inflation and taxes (if applicable). These results are preliminary and may be updated as project information is made available. In the chart the Presbyterian Church parking structure is labeled Project M: 355 Third St.  

-LS

Parking Structure Economics 101

Automobile parking structures are very expensive to build and operate, particularly near the beach. The 10 January 2023 Agenda Report prepared by the LB Parking Master Plan Subcommittee calls for embellishing eighteen parking lots and constructing eleven new parking structures with no amortized cost information given. An analysis shows what happens when a typical structure is erected near the beach, paid for by debt financing, operated for 40-years and demolished for salvage value after its useful life in the year 2065. When all the costs for such a structure are accounted for the true cost of these structures becomes clear. 

The cost to build parking structures is subsidized in city finances that the motorist does not pay for. The chart shows the  hourly parking fee for a single parking stall if the parking fees alone paid for the structure, this is the amount just to break-even on cost with no revenue left-over for other purposes. From the chart at 4% interest the parking fee is over $10 per hour. If the parking rate is set at $5/hour, who pays for the remaining $5?  The answer is everybody but the motorist. 

This study considered a parking structure to support 95 cars, construction costs of $20-million, 30-year financing, 40-year lifespan, operation and maintenance costs. NOT INCLUDED: parking enforcement,  opportunity costs, environment factors (quakes, floods), EIR response, depreciation and inflation.

To bound the problem two approaches were taken, the first determines the cost per parking space added to the existing land footprint, it considers construction costs without consideration for land values. The second approach considers all parking spaces developed including land value and in-lieu parking fees.

This study shows the structure costs are most sensitive to the type of construction; above ground or below and the number of parking spaces delivered to the project. Given the cost of these structures and the subsidy borne by the city and residents, the Master Plan Subcommittee is urged to check their Math. 

-LS

LB City Net-Revenue by Modeshare

For 2023 Laguna Beach will have a City Budget of $125 Million, how is that money spent on our mobility system? Past budgets show money is spent on car parking and transit but insignificant amounts  spent for cycling and pedestrian mobility.

The chart shows the net amount spent, city revenue minus expenses from our budgets in 2007 to 2021 for each transportation mode: driving, transit, cycling and walking. 

Results from each mode show:

Driving: only automobiles show a net positive revenue mostly from parking meters and vehicle fines, but paying for eleven expensive parking structures to park visitors cars will eliminate that revenue (see JT analysis).

Transit: looses money for every year it operates, it must be subsidized from other funds to continue.

Cycling: No investments were made in bicycle infrastructure, no revenues were generated, no expenses recorded.

Walking: No investments were made for pedestrian infrastructure, no revenues generated, no expenses recorded.

Conclusions:  With no investment in all four mobility modes, expect the trend in these charts to continue. Building 18-parking lots will increase visitor car traffic, net revenue will fall, traffic will increase, parking occupancy will increase.

Footnotes:  There are indirect revenues and expenses not accounted for here, like parking enforcement for cycling. In 2012 The Village Entrance book cost was $12.8 Million shown here distributed across all four modes equally. For comparison purposes the amount from Net Business Improvements are compared with the four modes. Net Business Improvements are Retail Sales minus Tourist Marketing minus Community Support funds.

-LS

LB City Expenses by Modeshare

 A review of the budget for Laguna Beach shows the City generates more city revenue from automobiles and parking than any other transportation mode and in some years the amount exceeds revenue from total retail sales and OCC Hotel Taxes.  In a study of the LB City budget for 2007 to 2021 the first chart shows the Expenses to sustain the operation of four mobility modes. 

 In 2012 The Village Entrance book cost was $12.8 Million, as shown here distributed across all four modes equally. For comparison purposes the amount from Business Incentives (tourist marketing costs) are compared with the four mobility modes. Business Incentives are Tourist Marketing expenses in the budgets.

 -LS

 

LB City Revenue by Modeshare

In a draft report prepared by the LB Parking Master Plan Subcommittee,  a recommendation is made to enhance eighteen parking lots, eleven of them are new parking structures located throughout Laguna Beach. In a town already obsessed with cars and traffic congestion why would this Subcommittee choose car intensification as a solution to a mobility problem caused by the automobile? The answer is parking money. 

A review of the budget for Laguna Beach shows the City generates more city revenue from automobiles and parking than any other transportation mode and in some years the amount exceeds revenue from total retail sales and OCC Hotel Taxes.  The first chart shows these results for the 2021-2022 Fiscal Year.

 

The next chart shows the contribution to city revenue from each of the transportation modes for fiscal years 2007 through 2021. In most years the city revenue contribution from parking automobiles is equal to total retail sales and hotel occupancy tax.

 

The last chart shows the proportion of revenues in the budget Major Funds (legend) to one another for fiscal years 2007 thru 2022. To appear consistent the same Major Funds are chosen each year but do not include every budget line-item. The Major Funds are gross revenue figures and do not include large expenditures for maintenance, servicing and law enforcement. When included the net revenue from say "Parking Authority" is greatly diminished from the gross revenue value.

 These results show the modeshare from automobiles produce the most city revenue to the exclusion of all the others. This financial incentive explains why the LB management plan is a parking-lot and the Subcommittee commitment to intensify traffic congestion will guarantee it.

-LS

Laguna's Roads and Stroads

High-speed Stroad through business district, Broadway LB

Once-upon-a-time Laguna Beach had horses cows and Model-T Fords, today they have Caltrans and cars. Laguna Beach used to be a Place, today it's a Destination. It used to be a place where locals enjoyed community events, arts, performing arts and a sense of community and prosperity. Today it's a destination drawing visitors to those same attractions but from everywhere far outside the Laguna geography.

To manage visitor and resident mobility, Laguna Beach adopted a car-centric urban plan to receive visitors, and to facilitate resident's vehicle trips to destinations outside Laguna Beach demanded by jobs and schools. Trips made by pedestrians, cyclists, and transit riders were neither counted nor valued in the mobility calculus.

Roads are for moving vehicles quickly, streets are for quiet family neighborhoods and businesses where community wealth is generated. Roads invite higher speeds reducing delay times but destroy the value of local space due to higher speeds. Streets beg slower speeds preserving a sense of place without destroying the value of place.

Roads are for moving vehicles quickly and should be kept free of businesses because every curb-cut stop-light and cross street increases delay-time and threatens safety. Streets are for moving slower modes of traffic that patronize businesses and serve residences, they should be kept free of car through-traffic. When roads are slowed by cross traffic and businesses they become Stroads, when streets are invaded by car through-traffic they also become Stroads.

Stroads no longer serve the purpose they were intended. A Stroad is like a cold futon; an uncomfortable bed for sleeping and a backless couch for sitting, they do neither well. They no longer comfortably serve the purpose of a bed or couch.

In "How to Fix the Most Dangerous Streets in America"  author Jeff Speck, Citylab|Transportation BLOOMBERG cites examples where cities have examined their mobility plans to repurpose Stroads. Hammond Indiana, Lancaster California, Landshut Germany, all have redesigned their Stroads to become roads and streets once more.

-LS

Introducing The Portland Bike-Bus

Anneliese Thurston and TOW Elementary Schools: don't miss out!

The Portland Bike-Bus

Ever see kids this excited to go to school? 

• Board the Bike-Bus
• Recover from  COVID lockdown
  
• Combat Climate Change
  

 -LS

Postcard or Post-Car Laguna Beach?

Paris France like Barcelona Spain is removing all cars and parking in car-free districts. Given popularity of the Promenade, Laguna could remove more cars and parking in downtown districts and satisfy Coastal Commission replacement parking rules given in-lieu exceptions .  Can Laguna be so bold as Paris or Barcelona?

-LS

Hollywood Christmas Parade

Tomorrow Sunday November 27, Hollywood will host the Hollywood Christmas Parade  filled with marching bands, celebrities and fun to support the Marine Toys for Tots.  

 

 

Tomorrow Sunday November 27, Laguna Beach will host the usual warm weather visitors and resident traffic.

 

 

 

 

 

 

-LS