FY08 PARKING PERMIT FEE PROPOSAL

November 20, 2006

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I. PARKING PERMIT FEE PROPOSAL Parking Permit Pricing History How Do We Compare to Other Universities? How Do We Compare to Other Big 12 Schools? Debt Service Challenges Cost Savings/Reductions Current Financial Requirements Proposed Strategy Proposed FY08-FY11 Rates Compared to FY06 and FY07 Rationale for Specific Increases Financial Impact of the Increase Appendix

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PARKING PERMIT PRICING HISTORY

Over the last 16 years, there have been 7 price increases: FY91, FY96, FY00, FY03, FY04, FY05, and FY06

Over that same period, demand for services and new parking facilities increased

Historically, there has been no real strategy to guide parking fees

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HOW DO WE COMPARE TO OTHER UNIVERSITIES?

Total % Total Surveyed Survey Not Offering

Permit or Service Hi Lo Average TAMU Service

Commuter Student 1,019$ 54$ 349$ 210$ 11%

Resident Student 1,405$ 44$ 400$ 210$ 8%

Faculty/Staff Surface Unreserved 1,476$ 54$ 493$ 175$ 0%

Faculty/Staff Surface RNS 2,268$ 240$ 984$ 351$ 52%

Faculty/Staff Garage Unreserved 1,476$ 200$ 647$ 374$ 48%

Faculty/Staff Garage RNS 2,268$ 336$ 1,152$ 459$ 71%

Game day Visitor Surface 25$ 5$ 12$ $5 to $10 N/A

Texas A&M Transportation Services Zoomerang Survey of Parking and Gameday PricingSurvey Conducted September 2006 (Big XII & Top 20)

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HOW DO WE COMPARE TO OTHER BIG 12 SCHOOLS?

Big XII % Big XII Survey Not Offering

Permit or Service Hi Lo Average TAMU Service

Commuter Student 396$ 54$ 168$ 210$ 0%

Resident Student 418$ 44$ 190$ 210$ 8%

Faculty/Staff Surface Unreserved 489$ 54$ 247$ 175$ 0%

Faculty/Staff Surface RNS 1,200$ 300$ 705$ 351$ 33%

Faculty/Staff Garage Unreserved 889$ 216$ 433$ 374$ 33%

Faculty/Staff Garage RNS 898$ 336$ 598$ 459$ 67%

Game day Visitor Surface 20$ 5$ 10$ $5 to $10 N/A

Texas A&M Transportation Services Zoomerang Survey of Parking and Gameday PricingSurvey Conducted September 2006 (Big XII Results)

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DEBT SERVICE CHALLENGES Addition of West Campus Garage (WCG) and Pedestrian Passageway

in FY05 added significant debt service and negatively impacted reserve balances:

– Approximately $3MM annual debt service for these two projects

– Planned gradual rate increases were proposed that would cover the additional debt service costs

Instead a 6% across the board increase was approved for three years (FY03 – FY05)

These increases are not generating enough revenue to cover the additional debt service

– Additional surface lots were built and expanded during WCG construction, which added the capacity to compete with WCG

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COST SAVINGS/REDUCTIONS In August 2005, the department experienced a

reduction in force and reorganization:– 33 positions were eliminated– Cost savings were approximately $1M

Despite this reduction, the same level of service has been maintained by introducing technology (e.g., paying and appealing on line and pay by space machines in pay lots rather than cashiers) and consolidation of duties and functions

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CURRENT FINANCIAL REQUIREMENTS Reserve requirements

– TAMU Rule 23.02.02.M1, dated April 24,2006, requires that all university auxiliary departments maintain a three month operating reserve

– In addition, the rule requires the auxiliary to maintain 115% of the succeeding year’s annual debt service payment as funds not allocated or budgeted for any other purpose

Deferred maintenance/capital renewal– Estimates suggest that $2M/year is needed to address deferred maintenance– In addition, $1M/year is needed going forward for capital renewal

New budget assessments for FY07– Auxiliary assessments in the amount of $387K– Group Insurance Premium assessment in the amount of $74K

Increased utility costs– Utility costs for parking are expected to increase from $394K in FY05 to $662k in 2006 to

$972K in FY07.

The savings from the reduction in force and reorganization have been offset by the new assessments and increased utility costs

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PROPOSED STRATEGY The alternatives left to address the current financial requirements are to:

a) increase revenues,b) decrease services, orc) a combination of the two

The recommended strategy is to increase parking permit fees in FY08 as detailed in the next slide. Subsequent rate increases in FY09 through FY11 will allow us to:

– Eliminate free parking and services (e.g. retirees, business permits, university vehicles, traffic control services, special events incl. football)

– Begin to address the deferred maintenance/capital renewal needs– Meet reserve requirements as required by TAMU rules– Maintain current service levels– More closely align fee structure with service levels– Achieve long term financial sustainability

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PROPOSED FY08-FY11 RATES COMPARED TO FY06 AND FY07 RATES

Permit Type FY06 FY07 FY08 FY09 FY10 FY11Garage: Priority Bay 504$ 504$ 600$ 660$ 720$ 720$ Reserved Numbered 459 459 516 576 612 612 Faculty/Staff Unreserved 374 374 420 432 444 444 Student Unreserved 374 374 420 432 444 444 West Campus Garage 374 374 240 264 280 280 Surface Lot: Student 210 210 240 264 280 280 Faculty/Staff 175 175 240 264 280 280 Reserved Numbered 351 351 420 504 612 612 Motorcycle 63 63 80 85 88 88 Night Parking 63 63 80 85 88 88 Gated 247 247 312 336 360 360 University Apartments 159 159 192 216 240 240 Other: Business Permits (New Fee) - - 150 150 174 174

Proposed

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RATIONALE FOR SPECIFIC INCREASES Reserved numbered spaces

– Higher level of service– Higher cost of enforcement– Lower utilization of spaces

Reduced WCG rate – Replaces overnight parking in PA 100, which is a problem for special

events– Increases usage of WCG– Moves students from Reed Arena (PA 100)– Gives access on football game days

Faculty/Staff surface lot – Adjusts the price differential between student and faculty/staff parking

University business overlays– Currently offered at no cost, consequently cost is born by other permit

holders– Reduces utilization of visitor and permit parking areas

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FINANCIAL IMPACT OF THE INCREASE

FY08 Required Reserves: Operating Reserve $2.1M Debt Service 7.3M

Total Reserve Requirement $9.4M

FY 07 Budget

Estimated FY08 Budget

Without Permit Increases

FY 2008 Proposed Increase

(Decrease)Estimated

FY08 Budget4,203,053$ 4,360,019$ -$ 4,360,019$

RevenuesFees 9,137,737 9,137,737 1,852,376 10,990,113 Fines/Visitor Parking/Other 6,244,251 6,016,343 - 6,016,343

Total Revenues 15,381,988 15,154,080 1,852,376 17,006,456

ExpensesSalaries & Wages 3,088,565 3,166,514 - 3,166,514 Fringe Benefits 703,555 724,662 - 724,662 Departmental Operations 1,866,140 1,888,882 - 1,888,882 Maintenance & Repair 801,050 814,061 - 814,061 Equipment 271,820 274,538 - 274,538 Utilities 972,263 1,001,430 - 1,001,430 Capital Purchases / Deferred Maintenance 520,000 2,000,000 - 2,000,000 IT Assessment 116,558 118,889 - 118,889 HR Assessment 59,530 61,316 61,316 VPFN Assessment 387,483 395,233 395,233 GIP Assessment 73,570 75,041 75,041 Debt Service 6,364,487 6,349,185 - 6,349,185

Total Expenses 15,225,021 16,869,751 - 16,869,751

156,967 (1,715,670) 1,852,376 136,706

4,360,019$ 2,644,349$ -$ 4,496,725$ Ending Fund Balance

Increase (Decrease) in Fund Balance Revenues less Expenses

Beginning Fund Balance

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FINANCIAL IMPACT OF THE INCREASE (CON’T)

Parking Reserve Projection

0.0

5.0

10.0

15.0

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

$ M

illio

ns

Reserve Balance Required Reserves

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ISSUES RAISED BY GROUPSFACULTY SENATE (1 MEMBER RAISED CONCERN) Different rates in FY10 for Garage Reserved Number and

Surface Lot Reserved Number

TRANSPORTATION CONSTRUCTION COMMITTEE(1 MEMBER RAISED CONCERN) Reserved Number Surface Lot should level off slightly below

Garage Reserved Number spaces

BOTH GROUPS APPROVED PROPOSED RATES AS SUBMITTED

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TAX IMPACT ON PRE-TAX PARKING FEEIncrease from $175 to $240 (increase = $65) Net increase of $22.64 for lowest paid employee Net decrease of ($87.76) for highest paid employee

Increase from $374 to $420 (increase = $46) Net decrease of ($28.13) for lowest paid employee Net decrease of ($221.33) for highest paid employee

Approximate $140K benefit savings per year to TAMU

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PARKING PERMIT PRICING HISTORY

Permit Type FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98Commuter (9 Month) $55 " " " " $75 " "Resident Hall (9 Month) 75 " " " " " " "Summer Student 20 " " " " 55 " "Night 15 " " " " 35 " "Motorcycle 35 " " " " " " "Faculty/Staff Lot 100 " " " " " " "Gated Faculty/Staff Lot 100 " " " " " " "Reserved Space 135 " " " " 200 " "Zachry 225 " " " " 270 " "Garage Priority 225 " " " " 270 " "Garage Inside 200 " " " " 240 " "Garage Roof 150 " " " " 180 " "Garage (Not Reserved) N/A N/A N/A N/A N/A N/A N/A N/A

Permit Type FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06Commuter (9 Month) " $125 " " $133 $141 $210 $210Resident Hall (9 Month) " 125 " " 133 141Summer Student " 65 " " 69 73Night " 48 " " 54 57 60 63Motorcycle " 48 " " 54 57 60 63Faculty/Staff Lot " 132 " " 141 150 159 175Gated Faculty/Staff Lot " 198 " " 210 222 235 247Reserved Space " 264 " " 282 300 318 351Zachry " 396 " " 420 450 477 504Garage Priority " 396 " " 420 450 477 504Garage Inside " 348 " " 366 390 413 459Garage Roof " 348 " " 366Garage (Not Reserved) N/A 300 " " 318 336 356 374

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PROPOSED PROJECT COSTS FY08 THROUGH FY11

FY 2008 Improvements Est. Cost FY2009 Improvements Est. Cost FY 2010 Improvements Est. Cost FY 2010 Improvements Est. Cost

Resurface PA 6, 23, 30a - f, 77,36a - e & 38 - 1,033,147 sq ft of asphalt 1,549,720$

Resurface PA 61 & 51 -509,339 sq ft 768,008$

Resurface PA 64, 59, 100j, 100k - 382,799 sq ft 574,168$

Resurface PA 9, 10, 15,16,48,121 - 203,823 sq ft 305,734$

Seal coat 20% surface lots or1,581,284 sq ft 135,280

20% Seal coat or1,581,284 sq ft 155,631

20% Seal coat or1,581,284 sq ft 375,832 20% Seal coat 1,581,284 sq ft 553,449

North Side Garage Repairs 315,000 UCG Repairs 200,000 SSG Repairs 200,000 CCG Repairs 200,000

Other Repairs and Improvements as Needed - PA 51 Lighting 376,361 Other Renovations as needed 350,000 Other Renovations as needed 350,000

Additional Debt Service Projects - Additional Debt Service Projects - PA 40 Garage 2000 space 30m 2,401,436 PA 40 Garage 2000 space 30m 2,401,436

2,000,000$ 1,500,000$ 3,901,436$ 3,810,619$

Notes:

Projects to be Implemented with Approval of Parking Permit Plan

The Garage Estimate is just that. Many things could change the amount paid after completion including that date, final size determined

Funding will be budgeted for through capital projects and repair line items.

The capital plan is based on one derived through working with the Texas Transportation Institute. Estimates were based on PP rate persquare foot, TTI Estimates, and management assessments.

and interest rates obtained on final debt principal.