Downtown Parking Operations and Funding Model Study

The parking control system in the Downtown Parking Lots is at end-of-life and needs to be replaced.  Downtown Parking is using this as an opportunity to reassess how the parking lots operate.  Since the current system was installed in 2008, there have been many advancements in parking lot operations equipment.  To help the city determine the best system to fit the community's needs and preferences, please offer your input through the Parking Preferences Survey.  THE SURVEY CLOSED ON NOVEMBER 9, 2023.  THANK YOU FOR YOUR INPUT.   

The current funding model, which relies heavily on revenue generated from users of the Downtown Parking Lots, is no longer meeting the financial demands of the programs that it funds.  The approved FY24 and FY25 budgets both estimate the need to draw from reserves to allow Downtown Parking to continue to provide services at existing levels.  By providing your input through the Parking Preferences Survey, you can help The City identify priorities to build a sustainable funding model that fits the needs of the community.  THE SURVEY CLOSED ON NOVEMBER 9, 2023.  THANK YOU FOR YOUR INPUT.    

Subsidized-Period:  Downtown Parking offers a period of subsidized parking to all parkers of 75 minutes each day, after which, the hourly parking fees begin to accrue.  Customers with a disabled placard receive 2.5 hours of subsidized parking each day.  

Hourly Parking Fees:  Downtown Parking charges $3.00 per hour for parking in the downtown parking lots, with a daily maximum of $33.00.  Customers with a disabled placard pay a maximum of $12.00 in a 24-hour period.  

Current Operational Model:  The Downtown Parking lots use a gated entrance and exit system that allows for a credit card payment during automated self-service hours, and a cash or credit payment during staffed hours. The self-service column at the exit allows for credit card payment using Visa, Discover or Mastercard. This system also has the capability of accepting all types of touchless (NFC) payments such as Apple Pay, Google Pay and Samsung Pay. We also offer a pay by phone option (SWEB), which allows customers to pay parking fees prior to exit and eliminates the need to stop and pay at the gate. Our parking system also uses a license plate recognition (LPR ) system to read license plates at entry and exit to calculate parking fees.  LPR will automatically raise the exit gate if a customer has already paid through SWEB, owes no fees, or has a parking permit.  The current operational model does not include pay-on-foot self-service stations.    

The following terms and concepts will help you understand how the City funds parking and Downtown services:

• Downtown Parking Fund:  Downtown Parking is funded through revenue generated by the services we offer, primarily Downtown Parking Lots.  All activities necessary to provide parking services downtown are accounted for in this fund including, but not limited to, administration, operations, maintenance, capital programs, financing and related debt service, and billing and collection of fees.
• Enterprise Fund:  The Downtown Parking Fund is an Enterprise Fund.  An enterprise fund is a separate fund within a government organization that is used to manage specific activities that are expected to generate their own revenue and cover their own expenses. It's a way to keep the finances of these activities separate from other services and helps track their financial performance.  Enterprise funds do not receive funding from the General Fund.
• Parking and Business Improvement Area (PBIA):  Parking in the downtown lots is partially subsidized by the PBIA assessment which is paid by businesses in the downtown area.  Businesses are assessed based on the type of business conducted and the proximity to a public parking lot.  PBIA revenue is used to pay utilities for the parking lots, and a small portion of hourly staffing expenses.  PBIA accounted for approximately 10% of Downtown Parking's FY23 budget.  Revenues generated by the PBIA assessment subsidize approximately 11 minutes of the 75-minute subsidized parking period.  
• Fiscal Year:  A fiscal year is the financial calendar by which the city operates.  The city's fiscal year (FY) runs from July 1st through June 30th.  The city is currently operating in the Fiscal Year 24 (FY24) budget.  
• Reserves:  Reserves are like a savings account for an Enterprise Fund. Just like individuals or families save money for unexpected expenses or emergencies, Downtown Parking sets aside a portion of its money to balance the budget when expenses exceed revenues. This fund is meant to be a financial safety net.  It also allows us to fund large capital expenses necessary to keep the parking facilities in good condition.  Downtown Parking must maintain a reserves fund at a level established by City Council and may not submit a budget that depletes all reserves.  Downtown Parking's reserves are currently below the level required by Council policy.  As a part of the funding model project, the City will develop specific plans to rebuild the reserves.      

Because Downtown Parking is operated as an Enterprise Fund, it only receives funding from the General Fund in very limited circumstances, and that funding may only be used for specified programs, such as the Downtown Ambassador Program.   

• General Fund: The General Fund is the primary operating fund for the City and source for discretionary spending. The money in it is derived from property tax, sales and use tax, utility users tax, and transient occupancy tax. The General Fund pays for most of the core functions carried out by the City, including libraries, parks, public safety, and infrastructure.
• Transient Occupancy Tax:  The Transient Occupancy Tax (TOT) is a tax imposed on "Transient" guests for the privilege of staying in any hotel, inn, motel, or other commercial lodging establishment for lodging or sleeping purposes for a period of less than 30 days. These taxes are collected by the hotel/motel operator for the City and are forwarded to the City on a monthly basis.

Downtown Parking Lots: Downtown Parking operates ten parking lots and five parking structures with a total of over 3,600 parking stalls, serving over five million vehicles annually.  Click here for a map of the  Downtown Parking Lots. 

Downtown Plaza and State Street Promenade: Downtown Parking maintains the Downtown Plaza area encompassing the State Street Central Business District and the downtown paseo system, including management of the Temporary Outdoor Dining Facilities (parklets) Program.  

Permit Parking:  Downtown Parking operates parking permit programs that serve residents and commuters both on- and off-street.  The "Monthly" permit program allows residents and commuters to purchase permits to park in the Downtown Parking Lots at a discounted rate.  The Residential Permit Program helps manage on-street parking in mixed-use areas by providing residents with permits that exempt the them from parking restrictions.  The Oversized Vehicle Permit Program provides temporary permits to allow oversized vehicles to park on city streets.

On-Street Curb Management: Downtown Parking also manages on-street parking city-wide!  Downtown Parking evaluates and installs non-safety related curb markings including loading zones, timed parking, red curbs, and disabled parking spaces.

Operating Budget:  $12,492,550
      Major Sources of Existing Funding (Projected)
              PBIA:  $1,000,000
              Hourly Parking Fees:  $8,272,096
              Parking Permits:  $1,545,000
              General Fund (for specific programs):  $702,899

      Estimated use of reserves to meet expenditures:  $229,707

To learn more about the City of Santa Barbara's budget, please visit the city's Budget and Reporting page.