Balancing the Post-pandemic Budget

Blog finance fundsBy Pamela Corbin, CAPP

There is little doubt that the COVID-19 pandemic has had a huge effect on the budgets of parking systems throughout the country. Operating budgets are one of the most important work products in municipalities. They give the authority to incur obligations and pay expenses, allocate resources, and control how departments/programs/cost centers spend.

Governmental parking systems typically fall into one of two categories:

  • General Fund: comes from tax levies and is required by statute to have a lawful appropriation.
  • Enterprise Funds: used to account for operations that operate like a business enterprise with budgeted revenues and expenses in balance.

The City of Orlando is an Enterprise Fund with the requirement for our revenues to cover expenses; in the event they don’t cover, funds are pulled from retained earnings (reserves). During the economic downturn of 2007-2009, referred to by many as the Great Recession, the city parking system was out of balance. This resulted in the requirement to pull down from our retained earnings, and it was clear they could quickly get depleted. As a result, the parking system went through an extensive parking study and raised rates. This enabled us to balance our fund and as the economy recovered, we were able to continue with much-needed maintenance projects.

This pandemic has had the same effect on most of our systems, with impacts on some systems being greater than others. Whether you are an enterprise fund or get your funding through tax dollars, there will be challenging roads ahead as we move to ensure we have adequate funding to run our parking systems.

I have heard the topic of raising rates mentioned by various cities, but given the circumstances, this may present a great deal of public outcry. There is no doubt we will need to go deep into the think tanks to come up with new and innovative ways to balance our budgets through reducing our expenses.

 

Pamela Corbin, CAPP, is parking administration and planning manager with the City of Orlando, Fla.