1. FY08 PARKING PERMIT FEE PROPOSAL November 20, 2006

2. 2222 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

3. 3333 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

4. 4444 HOW DO WE COMPARE TO OTHER UNIVERSITIES?

5. 5555 HOW DO WE COMPARE TO OTHER BIG 12 SCHOOLS?

6. 6666 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

7. 7777 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

8. 8888 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

9. 9999 PROPOSED STRATEGY  The alternatives left to address the current financial requirements are to: a) increase revenues, b) decrease services, or c) 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

10. 10 PROPOSED FY08-FY11 RATES COMPARED TO FY06 AND FY07 RATES

11. 11 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

12. 12 FINANCIAL IMPACT OF THE INCREASE FY08 Required Reserves: Operating Reserve $2.1M Debt Service 7.3M Total Reserve Requirement $9.4M

13. 13 FINANCIAL IMPACT OF THE INCREASE (CON’T)

14. 14 ISSUES RAISED BY GROUPS FACULTY 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

15. 15 TAX IMPACT ON PRE-TAX PARKING FEE Increase 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

16. 16 PARKING PERMIT PRICING HISTORY

17. 17 PROPOSED PROJECT COSTS FY08 THROUGH FY11