City staff recommend parking rate changes to close $8M shortfall; council asks for narrower options

Caitlyn Parker, Raleigh epartment parking manager, told the City Council at a pre-budget work session that the Parking Enterprise projects FY27 revenue of about $16.1 million against expenses of roughly $24.1 million, leaving an approximate $8 million shortfall.

"There is a path to enterprise independence," Parker said, outlining tools staff says could close most of the gap: raising monthly off-street pass rates, extending hours in some garages, increasing hourly meter rates and altering the two-hour-free program at five high-capacity garages. Staff estimated the package of changes in its preferred Option 1 would add roughly $7.2 million in additional revenue.

Why it matters: council members and downtown business representatives said any change that reduces free curb time risks hurt to restaurants and small storefront businesses that rely on short customer visits. Bill King of the Downtown Raleigh Alliance urged preserving the small-business pass program or finding a modest fee; he said the program keeps working-class employees close to jobs and that most pass holders would not convert to full monthly rates.

Parker told council the city currently has about 7,900 off-street spaces, of which 55% are contracted to private parties (she cited 550 contracted Red Hat spaces that can expand to 1,200, and a roughly 200-space Marriott contract). She also noted two notable lease expirations: the Cabarrus garage lease runs out in 2030 and a Blunt Street lease in 2035, which affect long-term investment decisions.

Staff reviewed three revenue options. Option 1 would, among other changes, move five high-use garages to 24/7 operation, reduce the two-hour-free program to one hour in those garages and raise monthly passes (staff previously discussed a $140 target in earlier planning), with an estimated revenue gain of about $7.21 million. Option 2 keeps the two-hour-free program but otherwise raises rates (projected roughly $7.1 million). Option 3 keeps two-hour-free in place in some garages while moving others to 24/7 (projected about $7.3 million).

Council members pressed hard on the equity and economic impacts of reducing two-hour free curb access to one hour. "For someone going out to dinner, one hour is not enough," a council member said, asking Parker for the rationale. Parker said staff chose the one-hour option as a midpoint between keeping the two-hour benefit and producing the turnover and revenue needed to preserve garage maintenance and safety.

Council also asked whether private nearby garages have occupancy data to compare effects. Parker said private operators generally do not share full occupancy data, though North Hills and other nearby private facilities that moved to paid parking reported continued usage. Parker said city garages remain priced below many adjacent private lots (she cited private daily maxima near $24–$42 in examples).

Budget context and next steps: staff said capital needs identified in a 2021 assessment now total roughly $13.5 million in deferred capital repairs (up from $10.4 million in the earlier study) and that the Parking Enterprise carries roughly $36 million in debt service tied to three garages. To inform a final decision, staff proposed issuing an RFI on city-owned garages and contracting a comprehensive parking study (RFP) to provide occupancy, rate elasticity and contract-capacity analysis. Parker recommended implementing any approved changes in January 2027 and returning to council in 12–18 months with updated data.

Council direction and unresolved questions: members signaled conditional support for staff irection to pursue Option 1but asked staff to return with refinements: a lower-cost small-business fee (council asked for scenarios at $20 and $25 versus the proposed $60), standardized deck-rate options, and more granular modeling on weekend and event impacts. Downtown representatives warned that the small-business pass is a targeted subsidy for working employees and that converting those users to full monthly passes would likely yield low revenue gains and high hardship.

The council did not vote on a rate package at the session; members provided direction for staff to price alternate scenarios and to include the refined options in the FY27 budget materials.