The Enterprise of Public Parking

Many citizens may be surprised to learn that some City of Beverly Hills’ operations are run very much like a business. The revenue that the City takes in for parking structures, water and solid waste disposal go into separate enterprise funds, which cover most, if not all, of the cost of the providing those services.

This discussion will focus on the City’s parking enterprise, how it operates, its financial status and some of the other forces at work, including free parking and the recent . (Parking enforcement and the City’s residential parking permit program are operated by the same division but are not part of the City’s parking enterprise.)

The Beverly Hills Parking Authority owns 17 of the 19 public parking structures, including the Crescent Drive structure which will open next month. The City’s parking structures have been transferred to Parking Authority ownership over the years to allow them to account for the associated expenses and other costs as a true enterprise that is separate from the City’s General Fund. (The General Fund is the discretionary part of the City budget that covers costs such as police and fire services, the library and recreation programs.) The transfer of ownership does not in any way change the parking management or fee structure. The two parking structures that remain under City ownership will do so because of legal requirements of the bond financing. The Parking Authority will help the City’s parking enterprise achieve fiscal sustainability, which will provide resources to maintain current parking assets and expand facilities in underserved areas of the City.

The Parking Enterprise Fund’s annual revenues fluctuate with the economy, but for 2010 they were approximately $27 million. Currently, the revenues cover the day-to-day operations, including staff costs. However, the program does not bring in enough revenue to cover long-range costs such as upgrading aging structures, adding new technology or building new structures. Those expenditures, when they cannot be deferred, have been covered by the General Fund, which leaves less money for providing other services to the community. The City’s goal is to make the Parking Authority, like any business, completely self-sustaining.  

The City offers a generous free parking program to the public in order to encourage both residents and visitors to shop and dine in Beverly Hills. This program has been supported by successive City Councils since 1984—when the program began—and remains very popular. However, free parking contributes to the deficit in the Parking Enterprise Fund that, at the current time, must be made up with General Fund dollars.

That is why the City opposed Measure 2P, sponsored by G&L Realty, which appeared on the March 2011 ballot. If implemented, the measure would have mandated two hours of free parking at buildings where the City has historically offered one free hour, further straining the Parking Enterprise Fund. In addition, future City Councils would have been unable to adjust the parking rates during the first two hours, or for the monthly parking spaces that are offered to many local businesses to meet budgetary and parking needs.

The judge in the case recognized the City’s concerns and ruled the measure invalid. But, in the interest of avoiding further litigation costs, the City and G&L Realty settled last month. The settlement will increase free parking from one to two hours at a City parking structure at 461 N. Bedford Drive for the next six years. In addition, G&L Realty will contribute funds toward installing a license plate recognition system at the structure. The settlement will expand the City’s free parking to the Bedford garage and yet retains the City’s ability to control its parking program.

Discussion of the parking program has taken place at numerous City Council meetings over the years:

April 5, 2011 Study Session

Jan. 5, 2010 Formal Meeting

Sept. 2, 2008 Study Session

This blog is intended as a means of keeping the community informed about City government. The views expressed in this article are those of the author and do not reflect the views of Beverly Hills Patch.