Tag Archives: TPP-2012-06-


TPP-2012-06-lluminatingBy Pete Barth

When a Baltimore County, Md. garage was about six weeks into its high-tech lighting makeover, Wayne Mixdorf, CAPP, director of parking for the Baltimore County Revenue Authority (BCRA) received a phone call from the local power company.

“They thought something was wrong with the electric meter,” recalls Mixdorf, of the Baltimore Ave. garage. “They came out and inspected it. Those gentlemen didn’t find anything wrong, but they still felt it necessary to have an electrician come out. He came out, did a full test of the meter and confirmed that it didn’t need to be replaced. The meter just clearly told us we were drawing about 50 percent of the energy we had been drawing the month before. We found the whole thing amusing.”

Amusing and satisfying: Mixdorf, along with Manitowoc, Wis., company Orion Energy Systems and its partner, Maryland-based Pritchett Controls, had recently completed an energy-efficient lighting retrofit for the BCRA’s four parking garages that cut their power use in half.

The system combined new high-efficiency white fluorescent lighting with dynamic motion sensor control, ambient light sensors, and 40 independent lighting zones in each garage that can be controlled with a laptop, iPad, or smart phone.

“This solution, to the degree we carried it out, was the first of its kind, we believe, in the country,” says Brian Wolff, senior account executive at Pritchett. “It’s very cool to be a part of something like this.”

It was also environmentally friendly and fiscally smart. According to the Baltimore Sun, the project’s cost of $875,000 was supported by a $150,000 U.S. Department of Energy grant and more than $150,000 in rebates from utility provider Baltimore Gas and Electric (BGE). Return on investment should take place between three and four years, and with an energy reduction of between 60 and 75 percent, BCRA can expect to save an estimated $235,729 per year.

Additionally, because of the reduction in energy consumption, carbon dioxide emissions will be reduced by 1,225 tons annually, according to the Environmental Protection Agency.

How it Works
Each of the BCRA’s four garages has between 825 and 950 parking spaces, for a total of 3,462. There are 160 total lighting zones (40 at each site), all of which can be controlled independently in ways and to degrees Mixdorf didn’t expect.

“When I first envisioned the project, I thought I could control the lights in each garage from my desktop at my office (in the basement of the one of the garages),” he says. “I thought I might be able to have a setup where I could get an IP address and do it from my laptop at home. But I never envisioned the ability to do it with a smart phone or iPad. This just gives me such a tremendous amount of flexibility and far more control than I anticipated.”

When Mixdorf started as director of parking for BCRA in 2008, he was stunned to discover that all of the lights at the four garages were turned off at different times during the night (depending on the use of each garage), and not turned on again until 6 a.m.

“They were either all on or all off,” he says. “We had garages that, late at night, were completely dark. Those were terribly unsafe conditions. The first thing I did was turn the lights back on and leave them on all the time. That wasn’t great either but those were our only choices at the time.”

Mixdorf’s lights-on approach led to a steady stream of complaints from neighbors, who had lights shining into their apartments or condos deep into the night. With a new, 20-floor apartment building under construction across the street, Mixdorf knew something had to change.

“We want to be good neighbors,” he says. “What we have now and what we’ll have moving forward is lighting that, first, will not be on 100 percent of the time (because of the motion sensors) and second, will be dimmed to 60 percent at times and be much less intrusive. Wolff adds, “If Wayne gets a complaint, he can either dim or shut down specific zones without shutting off the whole lighting system.”

Mixdorf’s voice rises with excitement when he talks about the benefits of this project. Some of the rewards—reduced energy costs and cleaner-looking lighting—he expected when the first fixture was installed in July 2011. But the fringe benefits have continued to pleasantly surprise him.

Beyond the Obvious
“I never anticipated the ability to monitor the power consumption on an hourly basis,” he says. “I can work with the local power company much more closely in what they call their peak rewards program, to dial back power usage at its heaviest times.”

With this advanced technology at his fingertips, Mixdorf can make better-informed security guard shift decisions based on motion sensor readings that indicate car and human traffic in the garages.

Another benefit involves much easier replacement of the traffic signs that guide customers through the garages. Before, special signs that reflected yellow light correctly had to be purchased.

“Now we can use any sign, because all signs look good with white light.”

“This is a project that can be replicated in any parking garage,” Mixdorf says.

“Most parking garages have been built with either metal halide lighting or high-pressure sodium lighting, both of which are high-energy draws. For a relatively small amount of money, you can change from a situation that cost, in our case, $300,000 a year, to cutting that cost in half.”

Nate Pritchett, project manager for the BCRA garage retrofit, says it’s “an exciting time to be in the energy business.”

“Jobs like this one have such a tangible reward for all of us, from dollars saved to reduction of (environmental) impact,” he adds. “It’s very rewarding. I wish more people would think the way the Revenue Authority does. Half the battle is having a forward-thinking client who is willing to look at current practices and say, ‘You know what, I think we can do better.’ That’s what happened in this case. It was a blast.”

Pete Barth is senior writer with Orion Energy Systems. He can be reached at pbarth@oesx.com or 920.482.5915


Its Not My Fault

TPP-2012-06-Its Not My Fault

Spend any time in parking enforcement and it’s not long before you’ll hear an excuse for a violation that’ll make you shake your head (or burst out laughing). It’s kind of like the dog eating the homework, only for grown-ups who are caught in the act of parking illegally. You might think it’d be easier to just pay the fine than come up with the stories, but people do it every day.

We asked IPI’s municipal members for their favorite
“not my fault” stories, and got some doozies. You won’t believe what people will say and do to avoid a ticket.

TPP-2012-06-Its Not My Fault

Planning to Ride Smart

TPP-2012-06-Planning to Ride SmartBy Mike Harris

Over the last few years, Mississippi State University has experienced historic growth. This increase is a national trend, from the numbers I have seen in academia. Factors behind our institution’s recent growth include the economic climate that has slowed job creation and the realization that the world has changed and one must commit to lifelong learning just to keep up.

The unprecedented growth is causing parking professionals to ask whether we should continue to build more parking or invest in transit to ease the strain. The answer is never as clear as one would hope, and there is no perfect answer that fits every campus environment.

Mississippi State decided to proceed using a combination of the two—build more parking and expand transit. We will construct strategically placed parking areas on campus and, at the same time, expand the current transit system into the city—which doesn’t now have public transportation—to balance the added demand.

Currently, the university operates an on-campus transit service that began in 1996 with four shuttles and two routes. It, like our university, has continued to grow, and now consists of 20 shuttles and five routes. We operate 11 of the 20 shuttles on daily routes. Currently all routes are operated on campus only.

The university does not require a transit fee from students as some universities do to fund the system. Instead, funding comes from departmental and organizational rentals of the shuttles, and is supplemented by the parking operations department. That translates to a major funding challenge when it came to expanding shuttle service. How would we be able to add shuttles, routes, and stops under the current funding mechanism?

Finding a Way
To provide a solution, we looked at federal funding to leverage our resources and serve a real need in our community. We began the project by creating a transit group with membership from the university, Starkville, and community leadership. Our first business was creating a timeline that would walk us through the year-long process. To meet grant submission deadlines, many things had to come together, so we set monthly goals to stay on task. As with most transportation projects, the basic questions that needed to be answered were: who will we serve, what type of system will it be, where will it go, and how much will it cost?

The goals were clearly defined:
Reduce traffic congestion.
Reduce the need to build more campus parking.
Reduce the area’s carbon footprint.
Connect the city and campus.
Improve the overall quality of life by connecting healthcare, banking, public housing, retail, and recreational areas.

Working Together
Another item that had to be addressed was a comprehensive InterLocal agreement between the university and the city. This agreement needed to spell out our partnership and what each organization will contribute to the overall project, including in-kind contributions and easements for shuttle shelters.

A mass transit study was completed to identify our target areas and begin the process of mapping the proposed routes and shuttle stops. We wanted a system that was efficient, economical, dependable, safe, and environmentally friendly; in other words, a SMART system. The chosen acronym stands for Starkville-MSU Area Rapid Transit.

The SMART proposal includes the five current campus routes and suggests three additional city routes. The first additional route will be the city-campus connector, which will operate from our historic downtown district to the heart of campus. The route also will pass through the Cotton District residential area along the way. This area consists of several city blocks of residential housing, restaurants, and various other hot spots. The route will use this scenic corridor for easy access and a much-needed connector between our campus and downtown district.

The second of the three routes will be a city circular route that will create a loop around Starkville, connecting a variety of retail outlets, medical and pharmacy establishments, and public housing areas.

The third and final route will connect our campus with the city recreational areas, consisting of parks, athletic fields, and indoor recreational facilities. It will also make stops at several residential housing areas that have large student populations.

The combination of these city and campus routes will create a transit network with eight separate routes, operating 17 shuttles every day.

Exploring Solutions
Establishing routes based on the transit study and much deliberation was the first step; the next was to determine the stop locations. Our group, along with additional community and university leaders, went for a ride on one of the shuttles to determine the best place to create stops. Many factors went in to this decision, including sidewalk access and safety issues. We also considered whether we should construct a shelter at each stop or use existing resources. For example, our hospital has an overhang that allows one to get out of the weather; using it allowed us to save on the expense of a shelter at that location.

We completed our study of the stops and shelter locations, and then moved on to the type of shelters. To some, this may not seem an important step. To create a sense of permanence and stability, however, the construction of shelters is a key component.

The shelters will each have an LED ETA sign along with a scrolling bar that will communicate emergency and updated information in real time. We currently use a real-time GPS tracking system with our campus transit system, and this will simply be an extension of that service. The most frequent patron question is, “When will the bus come?” The real-time GPS system answers this question and will be instrumental in the success of the system.

Much progress had been made concerning goals, routes, stops, shelters, and communications. It was now time to decide on operational times. This took considerable thought. Should we operate seven days a week, 12 hours a day? What should be the appropriate operational schedule?

After much deliberation, we made the decision to operate a 12-month schedule that runs from 7 a.m. to 6 p.m. Monday through Saturday on the city routes. The schedule will allow those beginning work or class to be there by the most frequent beginning time—8 a.m.—and return after 5 p.m., which is when most end their work day.

The campus routes will be a little different. They will also begin at 7 a.m. and operate until 6 p.m., but only run Monday to Friday. They will also operate only nine months of the year, based on the availability of additional parking during the summer months. The adjusted hours and times helped tremendously from a funding standpoint.

All of these plans are contingent on the success of our grant application, the 5311 Public Transit Grant. Submitted March 1, the application is currently pending. Receiving the grant will be a game-changer for our campus and surrounding community. It will help the university provide transportation to and from campus at no cost, as well as eliminate vehicles and create a more pedestrian-friendly campus with better parking options.

The expanded service into the city will provide a valuable service to our citizens who may not otherwise have transportation or are feeling the additional burden of higher transportation costs.

We’re in a unique position of having the potential to provide a public transportation option in a city that does not currently have that option. Because Mississippi State has a transit system in place, it already has the infrastructure, administration, and experience to expand the benefits to our community. As we continue down the road of expansion and eventually witness the transition from SOVs to public transit, the future can only be summed up in one word: SMART.

Mike Harris is director of parking operations for Mississippi State University. He can be reached at gmh22@msstate.edu or 662.325.1827

TPP-2012-06-Planning to Ride Smart

The Modern Toolbox

TPP-2012-06-The Modern ToolboxBy Brett Wood and Adria Koller, AICP

Remember middle school? Remember being concerned about everyone talking behind your back? Wasn’t much fun, was it?

Do you know what your stakeholders are saying about you now? Because more than your image is on the line; the success of your parking program could ride on it.

Far too often, decisions about our parking systems are made in a vacuum. Numerous communities have tried to pass rate changes without involving the public, only to have the issue die during public comment. The real problem? The parking organizations did not include their stakeholders from the beginning of the process, engaging their opinions and building consensus throughout the development of the policy.

The outreach process is critical to building a strong program and ensuring that changes to the system are met with understanding and acceptance. It’s true that you won’t please everyone, but if you can help educate the community (and in turn, let the community educate you), you stand a better chance of finding long-lasting solutions that fit. Author Meg Wheatley once stated, “There is no power for change greater than a community discovering what it cares about.” That’s an accurate summary of the power of stakeholder engagement.

By bringing your stakeholders to the table from the beginning, you will build a parking program that is for the community and by the community. The agenda becomes less “us vs. them,” and more about working together for the common good. Public outreach is typically successful because it provides a forum to communicate, even if the final solution doesn’t exactly match the public consensus. Given the opportunity to be heard, your stakeholders will engage in the process and are more likely to provide support and become champions for your cause.

Connecting with the Community
The first critical step in reaching out to your stakeholders is finding the appropriate method to connect with them. Planners have used a variety of methods over the years, with the more traditional approach being workshops or public meetings that are typically advertised through press releases in local newspapers. With the arrival of new technology each passing year, planners have more powerful tools at their disposal that can be used to interact with stakeholders.

The most commonly used ways to engage stakeholders are media and workshops. Using the media can be effective for informing the public of important information, but it can also be used as a broader educational tool. The local media can be used as a partner in the process, following the progress of the project or plan, and becoming an advocate for the project. The media can also be used to explain complicated and contentious topics, alleviating many of the public’s concerns. Workshops are useful in that they allow stakeholders and planners to engage in free-flowing conversation where questions can be immediately asked, answered, and expounded upon. The drawback to workshops and meetings is that they are time-consuming and expensive for planners, and they can be inconvenient for stakeholders who must take time out of their busy lives to attend. Depending on the project or plan, meetings can last one to four hours. As a result, turnout at workshops can be low, and the opinions shared may not necessarily represent the majority.

Websites are another useful tool for engaging stakeholders. Planners can post project and meeting information, documents, graphics, maps, and links to other pertinent websites and social media. Over the last decade, websites have become an integral part of stakeholder outreach programs because they often act as the front line of information and the face of a project or plan. Websites traditionally have not been used to obtain feedback, but new technology allows for direct interaction, surveys, voting, and scenario analysis, all through a site’s existing framework.

With new technology, planners have other options for reaching the broader community. Social media such as Facebook, Twitter, and foursquare are being used to post information, videos, and photographs. Social media also provides a convenient platform for stakeholders to voice their opinions. Communication with social media is ongoing and less intimidating than speaking at a workshop. Furthermore, setting up accounts requires little effort and is typically free. IPI has several resources on its website (www.parking.org) to help you leverage social media, including the Social Media Marketing Guide for Parking Professionals.

Getting the Right Information
Connecting with stakeholders is not just about providing them with information; it’s also about obtaining local knowledge, which is critical to making a plan or project successful. There are a number of ways to engage stakeholders that blend seamlessly with the methods described above. Surveys—commonly used to obtain stakeholder input—are usually handed out at meetings or mailed. However, the latest practice is to post surveys on the Internet. Web-based surveys are easy to set up and distribute, and easy for stakeholders to complete and submit, resulting in higher response rates.

A less formal method of obtaining stakeholder input is through social media. As discussed previously, stakeholders can post their opinions and questions on social media sites. Unlike surveys, social media is open-ended, free-flowing, and continuous. Planners are able to collect responses as they are submitted and use that information to gauge how a plan is being perceived by the public.

The newest technology that likely will be integrated into community outreach is the use of smartphone applications. Currently, smartphones can link stakeholders with websites, web-based surveys, and social media. As applications become more advanced, public involvement applications likely will be developed and integrated into the outreach processes.

These tools for obtaining stakeholder input can be—and often are—used in conjunction with each other. Deciding which tools to use depends on the stakeholders and knowing what methods they will be likely to use. However, even with the right tools, poor communication can result if information is presented poorly or questions are phrased incorrectly. It is important to know how to phrase your wording to obtain the desired feedback. For instance, if a survey is trying to determine if people will accept higher rates for on-street parking, the question should not directly ask stakeholders if they prefer higher rates. The answer to that question is always no; everyone wants to park for free. Instead, the question should be phrased so that respondents have to choose between aspects of the parking system that are most important or desirable to them. Ask them to choose between lower rates, availability of spaces close to their destinations, and the ability to find available spaces quickly. Forcing stakeholders to choose between these types of options will provide a better indication of true preferences.

Outreach in Action
Many communities understand these concepts and are involving stakeholders the correct way. Below are three examples of parking programs that used the community to inform their decision-making process.

Phoenix, Ariz. For the recently completed City of Phoenix on-street parking study, citizen and business owner surveys were developed to gauge preferences on new parking technology. Because business owners have a different perspective of on street parking, a separate survey was created with questions that would reveal business preferences. Both surveys were launched using SurveyMonkey, a web-based survey tool. The link to the survey was embedded in a QR code, which was distributed on information cards. The QR codes could be scanned with smartphones, instantly linking the public with the online survey. The survey had more than 500 respondents in a three-week period, which is exceptional for a survey of that duration and type.

Tacoma, Wash. When Tacoma tried to implement paid parking, it encountered strong public opposition (see p. 42 of the February 2012 issue of The Parking Professional). In response, the city created a parking advisory task force made up of citizens representing various organizations and businesses in the community, charged with making decisions regarding paid parking in the downtown area. The city worked with the task force to define the goals of both the downtown and the parking system, and then sought to educate the public about the benefits of paid parking to the businesses and community. To keep the public informed, the city dedicated a page on its website to the task force to provide information about the group’s proceedings. The city reports that creating a task force comprising citizens and community representatives has been instrumental in promoting the new paid parking system as well as educating the public about why the changes should occur and what benefits the system will bring to the community. After years of fighting the public about paid parking, the city now has new parking meter technology on the streets and charges for parking six days a week.

Anchorage, Alaska. The City of Anchorage recently underwent a complete rebranding of its parking management system. The city wanted to do more than just create new signage; staff wanted to build a new, positive relationship with the public. Facebook, Twitter, and foursquare accounts were used to collect feedback from the public as well as post information and news, pictures, links to newspaper articles, and videos. To reduce the negative image of parking enforcement officers, the city allowed the media to shadow a parking enforcement officer who was issuing citations. The pictures and story were posted online. Engaging citizens through social media had immediate and extremely successful results. The city has received positive feedback, and the parking system as a whole is no longer stigmatized by a negative reputation.

As demonstrated by the efforts taken in these three cities, there are many ways to successfully engage stakeholders. With new technology, you have more options available to engage the wide range of stakeholders in your community. In return, your stakeholders will become more involved and may feel a sense of ownership for the project or plan. Your stakeholders are an invaluable resource with unique perspectives and a depth of knowledge that is often overlooked. If you take the time to think about an appropriate engagement strategy, the wealth of information could be surprising, and will result in better projects and plans that represent the community’s desires.

Adria Koller, AICP, is a parking planner with Kimley-Horn and Associates, Inc. She can be reached at Adria.Koller@kimley-horn.com or 520.352.8655.

Brett Wood, P.E., is associate parking and transportation consultant with Kimley-Horn and Associates, Inc. He can be reached at brett.wood@kimley-horn.com or 602.906.1144.

TPP-2012-06-The Modern Toolbox

Getting Your P’s in a Row

TPP-2012-06-Getting Your Ps in a RowBy Michael D. Martindill

Man, it’s tough out there. Cities, states, counties, and academic institutions continue to experience shrinking budgets and reduced revenues. The public financing markets are still erratic and unpredictable. Taxable and non-taxable debt continues to be about the same, which has not happened in decades. All the while, public demand continues for infrastructure improvements to meet growing enrollments, drive economic development, and support various institutions.

The result is that more and more owners are seeking alternatives for funding and delivering parking garages. In particular, they are looking for solutions offered by third parties, including real estate professionals and developers. Institutions, specifically colleges and universities, are having great difficulty generating the capital needed to finance infrastructure projects such as parking structures. Other reasons for involving a third party include preserving the credit rating and debt position of an institution and, maybe more importantly, preserving the capacity of the institution to dedicate debt toward core-related projects such as academic buildings, medical office buildings and buildings that enhance their purpose.

Benefits and Drawbacks
The pressure has never been greater to seek a third party for assistance in delivering parking garages, or work in a public-private partnership (P3). There are many benefits to implementing a P3 agreement, including transferring certain risks onto the private sector by making it a partner in the deal, and reduced financing and construction costs that are common within the private development community. Also of note is the ability to accelerate the overall project delivery, from financing to final completion.

So far, P3 has a solid track record for achieving on-time, under budget delivery on many projects, especially those that are well-defined and delivered using a qualifications-based process; in other words, only allowing firms that can demonstrate a proven record of delivering the type of project (parking structure) an owner is seeking. This may be a free-standing garage or one that includes a variety of other uses such as ground floor retail, a residential component, or a transit station.

P3, however, does have its pitfalls and blemishes like any other form of project delivery. Potential drawbacks of P3 include an extraordinarily long lease term, unacceptable or unattractive buyout provisions, and increased parking rates or fees required for the lease. These and other drawbacks can be mitigated by engaging a professional (such as a parking consultant in the case of a parking structure P3) to serve as an owner’s agent throughout the entire process. A consultant experienced in the area of P3 can help craft RFQ and RFP language that can protect the owner’s interests and serve as a translator throughout the entire process. This will help make sure the responses and proposals received are in line with best interests of the institution, reducing the owner’s risk.

A variety of market sectors have begun implementing P3 agreements, including transit agencies, universities, schools, cities, counties, and states. P3 has been around for years, but its popularity is growing due to the economic woes that many institutions continue to face today.

The Model
The most common structure used by institutions is the lease-leaseback model, which is one where a private party (an LLC, for example) enters into a ground lease for a term longer than the lease. For example, a typical ground lease term for a parking garage is 35 to 40 years, while the typical term of the lease is 25 to 30 years. The private party designs, builds, and finances 100 percent of the project. The private party then leases the building—in our case, a parking structure—back to the public entity. The public entity pays rent over the term of the lease. At the end of the lease, assuming all debt obligations have been met, the asset then reverts back to the institution for a very small fee, which is typically $1.

Applying It to Campuses
Student housing is a great example of how universities have sought the help of private parties to deliver much-needed buildings. Student housing deals, however, are typically able to stand alone and meet their debt and operational expenses through market-based rental rates. A parking garage is much more difficult to pro forma as a stand alone structure, because very few university patrons can afford to pay $85 to $100 per month per space. So the institution must implement other revenue-generating strategies to provide the revenue stream necessary to meet the debt and operational costs.

In the case of a university, parking and transportation fees may need to be assessed and/or increased for students, faculty, and staff to generate the needed income to cover the debt and the required debt service coverage ratio. In addition, other revenues from the parking system, including citations, visitor parking, special event parking, and parking permits may have to be pledged towards the debt so that the deal can be financed.

Many universities currently follow this model, either through their own real estate foundations or through private entities. Cities, counties, and others may use tax allocation districts or similar mechanisms to provide the revenue stream that, when coupled with daily, monthly, and special event parking fees, generates the needed revenue for offsetting the debt and the operational expenses associated with a parking structure. In addition, when occupied space is included, institutions may use the rent as an additional form of revenue for making the deal work.

They Did It
Many universities in Georgia, including Kennesaw State University, Valdosta State University, and the University of Georgia have recently delivered parking structure projects through a public/private approach involving their real estate foundations. All of these universities, while varied in size, were able to use parking fees to fund the development and delivery of their respective garages.

Other universities, including the University of Southern Mississippi, have used a similar approach in which they solicited the help of a third party (other than their real estate foundation) to deliver the garage. Because cash flow existed, a private firm was able to deliver a garage using the lease-leaseback model.

What is most important is that the university does not give up control of the project to the third party. In the case of the University of Mississippi, the university is very involved in the design of the garage, from the functional design to the selection of the structural system. Throughout the process, the institution has a seat at the table and is maintaining control over the delivery of an asset they will eventually own, helping ensure that they get what they feel is best for their institution from the outset. If the university is in a position to manage the asset, great. They know what kind of experience they want to provide for their users and, because many are in the parking business, absorbing the new garage into their existing system is typically very cost effective; the cost of managing and maintaining the garage is folded into their overall operating budget.

A parking facility may need to be expanded or even demolished at some point to provide for the long-term development needs and plans of the institution. Here again, a lease/leaseback structure is often the most logical agreement between a university and a private entity.

At a time when public institutions are struggling to secure any sort of funding to support much-needed infrastructure projects, P3 initiatives are an exciting and long-awaited opportunity. Public institutions today are seeking creative, financially responsible options to pay for the continued improvement and expansion of their environment, place of business, or campus. Public-private partnerships help unlock existing equity in the university’s assets to pay for new development. Continued development through public-private partnerships will not only help public institutions tap into funding that would not normally be accessible, but will also provide the infrastructure needed to grow and enhance their campuses so that they can thrive in the very competitive environment in which we live, work, and play.

Michael D. Martindill is vice president with Timothy Haahs & Associates, Inc. He can be reached at mmartindill@timhaahs.com.

TPP-2012-06-Getting Your Ps in a Row

Changing Debit Card Rules

TPP-2012-06-Changing Debit Card RulesBy Michael Mintz

New rules went into effect on October 1, 2011 that lower the debit card interchange fees Visa™, MasterCard®, and Discover® charge as the pure cost to process a debit card.

These changes resulted from the Durbin Amendment that was passed as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act. They have sparked considerable controversy and debate.

Credit and debit card processing costs are often a merchant’s second highest expense after labor, so lower swipe fees for debit cards should be a welcome development, particularly as debit cards have grown in popularity with consumers and surpassed both checks and credit cards. Debit card transactions in the U.S. totaled $25 billion in 2006; by 2009, the number grew to $38 billion.

Issuing banks stand to lose billions of dollars because of this reduction in debit interchange fees, and merchants are hopeful that these lower costs will be passed through to them, resulting in a financial benefit to them and their customers.

To make up for the anticipated loss in revenue from the lower swipe fees, many issuing banks have begun tacking on new checking account fees, raising minimum balance requirements, and sometimes threatening to cap the dollar amount for debit transactions and end debit card rewards programs. At the same time, banks are trying to renew customer interest in more profitable credit cards and prepaid debit cards with offers of low interest and rewards bonuses.

What This Means
Prior to the implementation of the Durbin Amendment, the total interchange fee for an average debit card transaction (approximately $50) was $.44 per transaction. Under the Durbin Amendment, the Federal Reserve has set a cap of $.21 per transaction, which means that it costs the acquiring bank on average $.23 less to conduct that same debit card transaction. For certain acquiring banks, the cap will be $.22 per transaction if certain fraud prevention levels are met.

It is important to note that the new rules apply only to Visa™, MasterCard®, and Discover® debit cards, (not credit cards) and only to issuing banks with more than $10 billion in assets.

So, what’s the bottom line for parking facilities that accept debit cards? It depends on one simple thing: how is your merchant account priced?

If you are on a fixed rate or three-tier pricing program, the reduced cost to process a debit card will likely go right into the acquirer/processor/ISO/bank’s pocket. In fact, there are many merchant services providers that have used this change to debit card interchange fees as a reason to increase their clients’ overall fee structures.

If you are on interchange or cost PLUS pricing, these savings will be directly passed through to your business. However, there is a catch for merchants that process very small dollar amount transactions (see below).

Merchants that accept a large number of debit cards and have an average ticket of $20 or more should see a significant cost reduction as a result of the new debit card interchange fees.

The Catch
Unfortunately, certain sectors of the parking industry will not see a reduction in their debit fee costs even if they are priced on interchange or cost PLUS pricing. With the passing of the Durbin Amendment and the implementation of a new debit interchange fee structure, the card associations also did away with the small ticket debit interchange category. This small ticket debit interchange category had provided a favorable cost structure for transactions of less than $15. While the discount rate for debit transactions is now only 0.05 percent (down from 1.55 percent), the “per item” interchange fee went from $0.04 to $0.21.

A city or municipality that sees typical transactions in the $2 to $10 range will not see lower rates to offset the higher “per item” fee and, therefore, will likely experience a higher cost for accepting debit cards from their customers.

As you can see from the above chart, small ticket debit transactions now cost the acquirer/processor significantly more than they did prior to the changes in debit interchange costs. For merchants on interchange or cost PLUS pricing, these additional costs are being passed through.

Merchant service providers have used this debit cost change to implement overall fee increases to their clients who are doing a lot of small ticket debit transactions not on interchange or cost PLUS pricing. Unfortunately, these increases are not only being assessed to small ticket debit transactions, but to all credit and debit card transactions. This has become another way for merchant service providers to make more money from their clients.

Michael Mintz is president of MCM Sales and Consulting, LLC and parking industry consultant to AMG Payment Solutions.He can be reached at mmintz@amgpay.com or 973.821.4041.

TPP-2012-06-Changing Debit Card Rules

Parking Garage Fires

TPP-2012-06-PARKING GARAGE FiresBy Mark Wright

When Katie Stanciel answered her home phone early in the morning of Sunday, May 1, 2005, she knew her day would not go as planned. Stanciel, aviation parking manager at Hartsfield-Jackson Atlanta International Airport, was alerted to a multiple-vehicle fire burning on the third level of the airport’s four-level south parking garage.

“When I got there, it was bad,” she recalls. “The fire department couldn’t get any of its big trucks into the garage because of the clearance, so they had to use smaller trucks and pull hoses to reach the fire. The burning cars were near the front of our deck, so at least that was a blessing. It took awhile to get it put out.”

Fortunately, no one was injured, but the aftermath was a mess. In addition to at least 14 affected vehicles, there was extensive smoke damage to the parking structure. Security cameras and lighting in the area of the fire were destroyed. A contractor was brought in to clean it all up.

Sorting through liability and insurance claims was complicated. Losses included the cost of extra security, lost revenue, cleaning of the garage with special handling of the waste water, equipment replacement, and repainting. After the fire source was identified as one vehicle, claims were directed to that car owner’s insurance company.

When that insurer denied the claims—more than seven months later—the path to resolution got very convoluted, involving threats of legal action against the car manufacturer, dual but not overlapping coverage issues, and confusion as to who should be making a claim.

“It was not a good experience,” says Stanciel.

The Big Picture
There’s good news and bad news about parking garage fires. The good news: they’re pretty uncommon. (And multi-vehicle events like the one Stanciel faced are even rarer.) The bad news: you never know when fire will strike.

According to the U.S. Fire Administration (USFA), there were an estimated 650
parking garage fires in the U.S. in 2006 (the latest year for which government stats are available). Those incidents resulted in $7.6 million in property damage and 15 injuries. (The USFA says insufficient data exists to compute fatality estimates.)

“I’ve been designing garages for a living since 1988, and fire incidents have been few and far between,” says Jason Stuart Rupp, an associate with Orange, California-based Architects Orange who represents the International Parking Institute on the National Fire Protection Association’s (NFPA) 88A standard committee.

Not only are garage fires uncommon, they’re likely to be limited to a single vehicle. Dale Denda, research director at The Parking Market Research Co., says that only about 8 percent of incidents affect an area beyond the footprint of the vehicle where the fire started. In other words, the vast majority of fires are limited in scope to a single vehicle.

Statistically, fires involving eight or more vehicles, such as in Atlanta, only happen roughly once every three years in the U.S., says Denda. When they do, they tend to make headlines. On March 8, 2012, a Ferrari reportedly caught fire in the underground garage of the historic Place Vendome in Paris, France. Soon, flames engulfed 40 luxury vehicles, many belonging to glitterati in town for an annual fashion event.

Since most garage fires involve a burning vehicle, it’s interesting to note that, according to Denda, “virtually all” of the vehicles found to be the source of a blaze were at least seven or eight years old. He says that’s not only true not just for parked cars, but also those that ignite on the highway. (He hastens to add that we should not conclude that all older vehicles pose fire risks—simply that the vehicles that do catch fire are nearly always at least seven years old.)

Sometimes, the risk might not come from the vehicle itself, but from what’s inside it. Denda points out that work trucks often carry a wide variety of combustible substances—flooring adhesive, paint, welding tanks, etc.

“If you’re parking non-passenger vehicles, you just dramatically raised the probability of a larger event if it happens,” he says. “If there is a fire while you have 10 work trucks in the garage, you have a bigger fire.”

“Parking garages are extremely resilient,” Rupp notes. That’s because they’re designed to meet building code requirements (which are based on the International Building Code, to which some local U.S. jurisdictions apply even more stringent specifications) and the NFPA 88A standard for parking structures. That building code-mandated resilience is “the first line of defense,” explains Rupp.

“Section 406 (in the ICC International Building Code) contains most of the specialized requirements for parking garages,” explains Gary L. Nelson, P.E., senior staff engineer at the International Code Council, Inc. “All of the requirements and limitations in the family of ICC Codes abate the fire and life safety risks associated with parking garages down to acceptable levels.”

Denda says parking garages are actually “over-designed with code-mandated systems like sprinklers or detection systems that are not designed for an open air environment and that have to be serviced every 24 to 36 months. There have been all kinds of bells and whistles built in that are quite expensive.”

He adds that a sprinkler system is only relevant if it’s functional. “The number of systems out there that don’t work is enormous,” he says.

The risk goes beyond vehicles and their contents. Dumpsters or construction materials and equipment can become fire sources inside garages.
“Keep the garage clear of anything but cars,” says Denda. “Garages can’t be allowed to become storage areas.” He says about 20 percent of garage fires are attributable to secondary uses.

Surveillance provides another layer of protection. “Monitoring the environment of what’s going on in your facility is paramount,” says Denda.
Surveillance practices vary tremendously, though, observes Brian Shaw, director of business services at the University of Pennsylvania. He dealt with an arson fire at a former institution. Some garage camera systems are used more as passive recorders, while others might be proactively monitored, depending on available human and budgetary resources.

“It’s better to have pay stations, with personnel functioning in a customer service and security capacity,” he says. “Someone patrolling the garage is in a better position to see things than if they’re stuck in a booth.”

As unlikely as a fire might be, being prepared for the worst is vital. Experts advise facilities without fire plans to try this four-pronged CARE approach as a start:

Communication: Determine what procedures need to be followed at your site to ensure quick and clear communication during a crisis. Is each team member empowered to dial 911? Who should notify key stakeholders? Who, exactly, are those stakeholders?

Anticipation: Understand how people are likely to behave during an emergency. Will customers panic or exit calmly? As Shaw says, “People tend to do stupid things,” such as try to get to their cars on a deck above or below the burning vehicle.

Responsibilities: What roles should each staff member play during a fire emergency? Who’s responsible for helping to evacuate a smoke-filled garage? What should each team member do to ensure that a fire event is managed in as safe and sane a manner as possible?

Equipment: Should all of your team members have two-way radios or similar devices? Should your garage have security phones on each deck? While local regulations determine whether or not a garage must be equipped with fire extinguishers, simply having them around is no guarantee that anyone knows how or when to use them.

A debate exists over whether or not extinguishers should even be present. “One school of thought says take them all out so people don’t try to fight (the fire) on their own,” says Denda. “But I’ve found that people will try to fight it anyway, to get their valuables out of their car or whatever. I’m a big proponent of having them available.”

Questions and “what-ifs” need to be addressed and answered in coordination with your institutional and local first responders. And while fire drills are not usually required for parking garages, you might seek guidance from your emergency services about whether such events would be beneficial for your facility.

Whatever approach you take, preparedness means thinking and planning in advance. When a fire starts, it’s too late—there’s only time to react. And you want those reactions to be as smart as possible.

Speed is key when you encounter a fire, Shaw explains. “You want to detect the fire and respond as quickly as possible, so it doesn’t spread.”

Do not, however, try to be your own first responder, advises John Price, battalion chief for the Fairfax County (Va.) Fire and Rescue Department. Dial 911 right away.

Keep emergency lanes clear so first responders have full access. In addition, advises The Atlanta Fire Rescue Airport Section, a parking operations representative should, if possible, “be positioned on the roadway to guide the responding units to the emergency area. Often times, a dispatcher will send the fire response unit to a general location and they have to search for the actual vehicle/vehicles involved. [The parking operator] should also establish that fire hydrants are not blocked and that no unreported construction projects are taking place that can rob the fire hydrant of the necessary water pressure.”

“The biggest concern is smoke, because it will quickly overcome anyone in the vicinity,” says Price. “Visibility gets down to nothing. We want people to get out.”

That could pose a challenge, though, because people will instinctively want to protect their automobiles. “You have to protect them from their urge to do that,” Shaw says. “It’s safest to say you can’t drive in, drive out, or remain in the garage until the situation is controlled and safe.”

Once the fire department has extinguished the blaze, investigation and clean-up activity could take many hours. Coordinate with the on-scene commander to determine when or if the facility will be cleared for vehicle owners to re-enter and get access to their car.

Lessons Learned
Reviewing an incident after the fact can help you improve your operations. Since its 2005 fire, for example, Hartsfield-Jackson Atlanta International Airport “has invested in three fire mini-pumpers (smaller than standard engines), with reduced profiles, to respond specifically to vehicle fires in the parking garages,” reports The Atlanta Fire Rescue Airport Section.

Mark Wright is contributing editor to The Parking Professional. He can be reached at mark@wrightscontent.com


Legal Immunity and Part-Time Employees

TPP-2012-06-Legal Immunity and Part-Time EmployeesBy Leonard T. Bier, JD, CAPP

The United States Supreme Court in Filarsky v Delia recently considered the issue of whether someone who was hired by the government as a part-time special counsel for an employment matter was entitled to the personal limited liability or immunity granted a full-time employee. The facts of the case are interesting and applicable to many of the internal investigations and hearings conducted by public and government members of IPI.

Rialto, Calif., firefighter Delia became ill after responding to a property where there was a toxic spill. His doctor placed him on medical leave for three weeks to recover from his exposure to toxic fumes. At some point, the city hired a private investigator to conduct surveillance of his daily activities. Delia was observed going to a home improvement store and purchasing four rolls of fiberglass insulation. The city assumed he was making home repairs while on medical leave.

The city immediately convened an administrative hearing to determine if he was faking illness under cover of the doctor’s note. The fire chief and two other members of the department’s staff were appointed to a panel as administrative hearing officers.

The city hired Filarsky, a private attorney who specialized in employment matters; Delia’s attorney and union representative were present at the administrative hearing. Delia was asked if his home could be inspected for recently-installed insulation, and he refused under the fourth amendment. The fire chief then issued an order to produce, which directed Delia to carry out from his home, in the presence of the panel, the four rolls. Delia produced the rolls of insulation under protest, and no disciplinary action was taken.

Delia filed a federal Section 1983 lawsuit against city employees and Filarsky, and the Federal District Court and Court of Appeals determined that the city had violated Delia’s fourth amendment rights in conducting an unreasonable search by forcing him to produce the insulation. Both courts dismissed the suit against all the city employees except Filarsky, and he appealed to the Supreme Court to have immunity extended to him as a part-time city employee.

Full-time employees of government entities such as parking authorities enjoy various levels of personal immunity or limited liability from Section 1983 suits while in the performance of their duties “to allow (them) to serve the government without undue fear of personal exposure,” and, “to avoid the impossible burden that would fall upon all our agencies of government if those acting on behalf of government were unduly hampered and intimidated in the discharge of their duties by the fear of personal liability.” (Filarsky v Delia, US Supreme Court, 2012)

The Supreme Court in Filarsky v Delia decided that limited liability or immunity should be extended to part-time government employees, saying, “The government’s need to attract talented individuals is not limited to full-time public employees. Indeed it is often where there is a particular need for specialized knowledge or expertise that the government must look outside its permanent work force to secure the services of private individuals.”

The Supreme Court further stated, “The most talented candidates will decline public engagements if they do not receive the same immunity enjoyed by their public counterparts.”

Filarsy v Delia is an important case for IPI public and government sector members. It allows them to continue to hire outside legal counsel for sexual harassment, internal investigations, disciplinary matters, and other administrative hearings, as well as retain experts as independent contractors for short-term management, operations, and consulting positions without those individuals fearing or incurring personal liability. However, the public or government entity still remains liable for an aggrieved party’s actual violations of their constitutional rights.

Leonard T. Bier, JD, CAPP, is the principle of Bier Associates. He can be reached at lenbier@optonline.net or 732.828.8864

TPP-2012-06-Legal Immunity and Part-Time Employees

Financing the Sustainable Parking Facility

TPP-2012-06-Financing the Sustainable Parking FacilityBy Michael Cramer

Can incorporating sustainable elements in a parking facility affect the revenue models used for attracting capital? In only a short time, it’s likely that this could become an area of focus for investors in green facilities.

Posing the question creates challenges, because most garages are on a gross rate model and many are built to serve other structures. Rarely does a customer drive out of their way to park in a certain garage because of a particular garage element or because the garage is greener. So, will spending the money to build a sustainable garage have the sort of payback that attracts investors? As I researched this column, my answer swayed from yes to no to maybe.

As sustainability evolves, it’s likely that investment in green garages may become an area of focus. Only in the past couple of years have we seriously considered making garages more sustainable.

The value of a parking facility as an earning asset is affected by its net operating costs. Reducing these costs while maintaining or increasing revenues and customer service increases the value of the facility and reduces the owner’s investment risk. To the degree that sustainable technology reduces out-of-pocket costs in a gross-rate model, these net savings fall directly to the bottom line and add value to the investment. Return on investment is still related to risk. If sustainable properties and attributes make the facility more financially efficient, both the owner’s risk and the capitalization rate can be reduced.

Today, income for the owner and convenience for the customer are still the driving forces behind building a parking facility. Sustainable features are considered for other reasons.

A New Focus
Times are changing, though, as pointed out by Gary Holtzer, global sustainability officer at Hines. Like most real estate professionals, he’s hearing more about a focus on sustainability in new construction as well as in established developments.

Obvious options like LED lighting are well known and the cost for the fixtures is dropping considerably. Over time, LED lights cost less than traditional lighting systems to maintain. Well-designed garages make greater use of sunlight in their designs, too. Both of these ideas are already being incorporated in new garage designs and, where feasible, retrofitted into existing structures.

Holtzer offers up some ideas that could well affect future parking facilities. These make considerable economic sense and may change the dynamics for development and operations. By 2050, perhaps 70 percent of the world’s population will live in cities with 1 million people or more. At the same time, private vehicle ownership may well decline. Additionally, parking facilities may evolve into net energy producers that provide sustainable energy harvested from the kinetic energy stored in autos and from nanotech solar collectors stored in the facilities’ skin.

By 2020, it may be impossible to build a parking facility without a solid sustainability plan, just as it’s nearly impossible to build one today without a good financial model. Sustainability is not yet a driving force in the finances of a new facility. However, it is becoming an increasingly important factor that can reduce the costs of parking facility operations. I hope that in the not-too-distant future, we’ll need a follow-up article to this one that describes how sustainable financing is driving the design of a new generation of garages.

Michael Cramer, implementation manager, WINPARK, at Hines Interests and a member of IPI’s Sustainability Committee. He can be reached at mcramer@winpark.com or 713.237.5619.

TPP-2012-06-Financing the Sustainable Parking Facility