Staff: free resident oceanfront parking would drain parking enterprise fund; alternatives suggested

City staff briefed the Virginia Beach City Council on a parking enterprise fund analysis and warned that offering unlimited free resident parking at the oceanfront would significantly strain the fund unless the city identifies alternate funding sources.

The presentation, led by a city parking official, explained that the oceanfront parking program operates as an enterprise fund and must cover operating costs, capital maintenance and any debt service from parking fees. Staff said post‑pandemic annual revenue averaged about $6.3 million (fiscal years 2022–24) while operating expenses averaged about $5.5 million; those figures do not include capital maintenance or large repairs. The consultant recommended a capital maintenance set‑aside budget of roughly $75 per space per year, yielding about $440,000 annually for repairs and replacement.

Staff walked council through the impacts of Atlantic Park construction that removed roughly 900 parking spaces during construction and will return approximately 1,455 spots when the new Atlantic Park garages open (anticipated in about three months). The consultant’s ramping projections assume Atlantic Park revenues will grow over two to three years as patrons change behavior and learn to use the new facility.

On resident discounts and behavior, staff said current after‑5 rates allow residents to pay $3 per stay in lots and garages; validating residency today often requires staff review of a driver's license or a phone call to staff. Employee pass data showed 90 percent of validated program users are Virginia Beach residents; staff said if residents were offered free parking there would be no incentive to pay, producing greater long‑term occupancy and reduced turnover. Sample usage data (limited sample, July) showed average stays of 2.45 hours for transient paying guests, 7–8 hours for employees and roughly 16 hours for trackable residents.

“Loss of revenue would, in fact, adversely impact the current financial model,” a parking official told council, noting that the enterprise fund would then require either higher visitor fees or transfers from other city funding sources (the presentation suggested potential sources such as the general fund or a tourism improvement program but emphasized these were possibilities, not decisions).

Council members discussed alternatives: a modest all‑day resident rate (for example a $5 resident day pass), targeted resident validation programs (including staffed validation in garages versus gateless automation), a Special Service District (SSD) paid by property owners and businesses, sponsored validation or private agreements with oceanfront businesses, and selectively metering Atlantic Avenue. Staff noted technical challenges to validating residents in gate‑free, app‑based systems and recommended that any free or deeply discounted resident program be designed to preserve turnaround for paying customers.

Parking administrator Rob Fries and staff also presented benchmark rates: Virginia Beach’s oceanfront parking rates are generally lower than comparator beach communities on the Eastern Seaboard. Staff said adding on‑street meter capacity on Atlantic Avenue could generate additional revenue (2024 data showed ~680 metered spaces produced about $1.6 million, roughly $2,400 per space annually), but staff cautioned that street meters alone would not offset the losses from a broad free‑parking policy in garages.

Ending: Staff said it would return to council with refined options and financial scenarios after receiving direction; council asked staff to explore targeted resident rates (a $5 all‑day option was mentioned) and SSD and validation approaches rather than immediate universal free parking.