MEMO TO:
FROM: Frank
A. Rush, Jr., Town Manager
SUBJECT: Discussion – Implementation of Beach Access Parking Fee
I have scheduled time on the Board’s December 14 meeting agenda to discuss the potential implementation of a beach access parking fee at the Eastern Ocean Regional Access and Western Ocean Regional Access in 2011. With continuing budget challenges in general, and increasing demand for services at the Town’s two regional beach accesses, it may now be prudent for the Town to begin charging a fee for beach access parking at these locations.
Background /
Increasing Service Demands
The regional beach access facilities have been provided free of charge to the general public since opening in the mid and late 1990s, and the Town’s taxpayers have funded the vast majority of the expenses associated with the acquisition, development, and operation of these facilities. Total land acquisition and development costs are estimated at approximately $2 million, with the Town funding approximately $1.5 million of this cost and supplemented by approximately $500,000 from various CAMA grants over the years. The Town’s estimated annual operating expenses for these two facilities are approximately $74,000 (personnel, operating, and capital costs), and this cost is funded by general tax revenues. (The Board should note that this $74,000 annual cost does not include Beach Patrol services, beach strand trash collection services, or indirect costs associated with these facilities.)
The public demand for services continues to increase at these facilities, and the Town continues to seek ways to meet these service demands in a cost-effective manner. The Town has always relied on seasonal help to keep the bathroom facilities at these locations clean, along with other routine maintenance tasks. In 2008, due to concerns about cleanliness and general order, the Town began utilizing a full-time park attendant during the summer season at the Western Ocean Regional Access. There has also been more staff time devoted to the Eastern Ocean Regional Access over the years. In 2010, in response to concerns about inappropriate behavior, the Town began assigning a full-time Police Officer at the Western Ocean Regional Access during the summer season. I believe this additional staffing in recent years has greatly improved the beach visitor experience at the Western Ocean Regional Access, and these improvements have been well-received by the public. These improvements come at a cost, however, and make up a significant portion of the $74,000 annual operating expense noted above.
The Western Ocean Regional Access has always been heavily visited, and visitation at the Eastern Ocean Regional Access has continued to increase in recent years. There has been greater interest in recent years for more dedicated staffing at the Eastern Ocean Regional Access, either in the form of a full-time park attendant and/or a dedicated Police Officer. Additionally, there remains a question as to whether or not the Town should invest in fixed lifeguards at one or both of the regional beach accesses. As you may recall, the Town has periodically stationed a member of the mobile Beach Patrol in a fixed location at the Western Ocean Regional Access on a temporary basis.
The implementation of a beach access parking fee at the two regional beach access facilities could potentially generate sufficient revenue to cover the Town’s current annual operating expenses (that are currently funded by general tax revenues) and also provide funding for additional staffing at the two facilities in the future.
Revenue Scenarios
I have prepared 6 revenue scenarios for the Board’s review, and they are included on the attached spreadsheet. Of these, 3 scenarios are based on a daily parking fee of $5 per vehicle, and 3 are based on a daily parking fee of $10 per vehicle. A high, medium, and low occupancy rate is assumed for the different scenarios. As you will see, the different scenarios would generate the following “net profits” that could potentially be utilized for current annual operating expenses and any additional staffing provided in the future:
The revenue estimates assume that the Town would charge a
daily fee every day from April 1 to September 30. As you will see, there are different
occupancy rates projected for different months and for weekdays and
weekends. Fees would be charged between
The expense estimate assumes that the Town would simply station a parking lot attendant at each facility, every day between April 1 and September 30. The attendant would have an umbrella and chair, and would collect the fees each day. I also envision accepting credit cards (or perhaps credit cards only?) and providing the attendant with a hand-held wireless credit card machine. This low overhead approach to collect the parking fees would cost the Town approximately $42,580 annually, regardless of the revenue scenario. The biggest challenge associated with this approach is likely to be recruiting honest and trustworthy parking lot attendants, and devising the appropriate internal controls to prevent theft and fraud. I envision having a Police Officer making frequent visits to the parking lot attendant, periodic audits, and perhaps the installation of surveillance cameras, among other ideas.
As is obvious, there is a wide variation in the net profit estimates, because we have never tracked the number of cars in the parking lots in the past. It is obvious that the Western Ocean Regional Access is routinely at 100% capacity on many weekends, however, we simply don’t have reliable data. The attached revenue scenarios include various occupancy rates, and these occupancy rates are based on a “gut feeling” based on personal observations by me and Town staff. These estimates may need to be further refined as we work through this process.
The Board should note that these revenue scenarios do not make allowances for bad weather days, and the hope is that the occupancy rates are overly conservative and will balance out the bad weather days. Additionally, the revenue estimates also don’t take into account potential free or discounted permits for Emerald Isle taxpayers and/or handicapped individuals.
Eligible Expenses for
Parking Fee Revenues
Because a significant amount of the acquisition and development cost of the two regional beach access facilities was funded with CAMA grant funding, we have sought guidance from the NC Division of Coastal Management on what expenses could be covered with parking fee revenues. A copy of a letter from me to John Thayer, Planning & Public Access Manager at the NC Division of Coastal Management, is attached.
One potential response is that parking fee revenues may only be used for non-personnel expenses at the two facilities. The Town’s estimated annual non-personnel expenses at these two facilities are approximately $30,000 per year, not including major capital improvements (which could also likely be funded by parking fee revenues). If the Town is limited to using parking fee revenues only non-personnel expenses only, the implementation of a new parking fee could reduce the Town’s general tax burden by this same $30,000. If this is the case, the Town may wish to consider a fee lower than $5 per day.
I remain hopeful that the response from the NC Division of Coastal Management will be that personnel expenses associated with the two facilities will be considered an eligible expense. If that’s the case, my recommendation is to fund our current annual operating expenses (estimated at $74,000+ per year) with parking fee revenues, and utilize any excess revenues for additional personnel to meet the increasing public demands at these facilities. These excess revenues could be used to fund a park attendant and/or Police Officer at the Eastern Ocean Regional Access, or perhaps lifeguards or fixed mobile Beach Patrol personnel at these facilities.
If the Town implements a new parking fee, I recommend the establishment of a segregated fund to budget and account for these revenue and expenditures.
I expect to receive a decision from the NC Division of Coastal Management within the next month. If the Town decides to implement a parking fee, we will need time to recruit employees and devise the appropriate internal controls.
$5 Per Day? $10 Per Day?
Something Else?
The amount of the fee is obviously the most critical factor in how much parking fee revenue the Town might generate. In addition to the revenue scenarios, the Board may wish to consider the following:
· The amount of the fee should ideally be an amount generally considered to be of little consequence in affecting a person’s decision to visit the beach.
· Charging a beach parking fee may result in even higher service expectations at the regional beach access facilities.
·
Bogue Inlet Pier and the vacant lot on the corner
of
·
The Town of Atlantic Beach appears to be leaning
toward contracting with Lanier Parking Systems, a parking contractor, to manage
their parking system. They are leaning
toward a fee of $1.25 per hour, and will rely heavily on automated pay stations
and aggressive enforcement activities.
Assuming a 4 hour beach visit, this equates to $5 per day. Assuming an 8 hour beach visit, this equates
to $10 per day.
·
There will likely continue to be free beach
access parking facilities available in
· The attached revenue scenarios assume that parking fees will be charged 7 days per week for 6 months of the year. A decision to charge on weekends only, or for a period less than 6 months will impact the revenue estimates.
Other Important
Considerations
The Board should consider establishing a free or reduced fee permit for Emerald Isle taxpayers who have already contributed significantly to the cost of these facilities in the past. As noted above, the attached revenue scenarios do not include an allowance for a free or reduced fee permit for Emerald Isle taxpayers, and we also don’t have any good data on what percentage of the users of the regional beach access facilities are Emerald Isle taxpayers. Conventional wisdom is that the vast majority of users are not Emerald Isle taxpayers, but we don’t know for sure. The Board could consider a program whereby Emerald Isle taxpayers could purchase a windshield sticker for $20 or $30 per year, for example. We will need to also consider how to administer such a program for taxpayers who have more than one vehicle. An alternative approach would be to issue some sort of taxpayer ID card and charge taxpayers $1 per day to park instead of $5 or $10. There are likely administrative issues to consider with this approach also.
The Board should also consider whether or not handicapped individuals should be eligible for a free or reduced fee permit. Handicapped individuals could be treated in a manner similar to Emerald Isle taxpayers described above.
I look forward to discussing this issue with the Board at the December 14 meeting. Please note that I am not seeking a final Board decision on this issue at this time, and still need to further refine the revenue scenarios and cost estimates. Rather, I am seeking to introduce this issue to the Board and the public and gain helpful feedback. If the Board wishes to pursue this, I recommend that a final decision be made no later than the February 8 meeting so that staff has ample time to plan for the implementation of the new fee and the recruitment of seasonal personnel. This decision may also impact our staffing levels for other summer beach personnel (Police Officers, park attendants, beach patrol, lifeguards), and we’ll need ample time to recruit those personnel.