Office of the City Manager
ACTION CALENDAR May 6, 2008
To: Honorable Mayor and Members of the City Council From: Phil Kamlarz, City Manager
Submitted by: Claudette Ford, Director, Public Works
Subject: Minimum Parking Time At Pay-And-Display Parking Stations to Accommodate the Use Of Credit Cards
RECOMMENDATION
Conduct a public hearing and upon conclusion, adopt the first reading of an Ordinance amending Berkeley Municipal Code (BMC), Section 14.52.120, Parking Meter and Pay-and-Display Station Fees, to establish a longer minimum parking time at pay-and-display stations, effective June 30, 2008 to Accommodate the use of credit cards.
FISCAL IMPACTS OF RECOMMENDATION
The Department of Public Works is proposing to establish a minimum parking time purchase of 12 minutes, at the current rate of 25¢ for each 12-minute segment of parking time purchased, at parking meters that accept both coin and credit or debit card transactions for payment. The rate per minute of parking time is not changing, and there is no appreciable change in revenue projected. However the minimum parking time that can be purchased at pay-and-display (P&D) stations, those accepting both coin and credit or debit card payments, is being increased from 2 minutes to 12 minutes. If the P&D stations continued to offer the shorter minimum parking time for all payment transactions, the City would be charged more in bank fees for credit/debit card transactions than the 5¢ or 10¢ paid for parking time less than 12 minutes.
Implementation has a one-time expense of about $6,000, including staff time, new decals, and public notification. Funds to cover these expenses are available in the FY 2008 Parking Meter Fund (840-4972-431-1101 and -7041).
CURRENT SITUATION AND ITS EFFECTS
In a letter dated March 31, 2008 Wells Fargo Merchant Services (WFMS) notified the City that it’s in violation of Visa Operating Regulations that prohibit a minimum Visa payment. The violation stems from the City establishing a minimum transaction as a condition of customer use of a Visa1 card for payments at our P&D multi-space parking
Minimum Parking Time at Pay-and-Display Parking Stations ACTION CALENDAR May 6, 2008
Page 2
meter stations. Currently, in order to use a credit/debit card, most of the City’s P&D stations are set for a minimum payment transaction of $1.25 for parking time of 1-hour2, whereas a payment with coins starts at 2 minutes for 5¢. (Single-space meters do not accept credit/debit card payments, and the least amount of time that can be purchased at a meter is also 2 minutes for 5¢.)
These tables show basic data for January 2 – April 14, 2008 for coin transactions at P&D stations. Transactions for periods of less than the current 12 minutes (or previous 15 minutes3) for payments of 25¢ have been 1.97% – 3.64% of all coin payments.
March 31 – April 14, 2008: first 2 weeks at current rates for metered parking # of Transactions % of Total Transactions $Amount % of $Amount
Total Coin Transactions at P&D stations 46,104 $61,474
Coin Transactions for Time <12 minutes 907 1.97% $125 0.20%
January 2 – March 29, 2008: In the 3 months at previous rates for metered parking # of Transactions % of Total Transactions $Amount % of $Amount
Total Coin Transactions at P&D stations 167,716 $133,827
Coin Transactions for Time <15 minutes 6,102 3.64% $838 0.63%
To comply with Visa regulations, a credit/debit card payment must be an option for any purchase offered at a P&D station that accepts credit/debit cards. However, the fee the City would pay for a credit/debit card purchase of 5¢ or 10¢ at a P&D station would exceed the 5¢ or 10¢ the City receives from the sale. Therefore, the recommendation is to raise the minimum time purchased at a P&D station to 12 minutes for a payment of 25¢ by either coin or credit/debit card. If the City does not comply with the regulation, Visa may assess a $5,000 fine for a first violation, with subsequent fines of $10,000, $25,000 and $50,000, if not corrected promptly. Minimum parking time at coin-only meters will remain at 2 minutes for 5¢.
The City delivered a letter to WFMS on April 10, 2008 in response to the violation notice. While this was the deadline set forth in the original letter to correct the issue, staff informed WFMS that our procedures require a formal recommendation to Council, including a public hearing, to amend the BMC in a manner that will comply with the Visa regulations. The objective is to meet these requirements while retaining parking options. It’s important to note this recommendation does not increase parking rates. Council conducted a public hearing and approved a rate change related to funding the Public
2 Some parking zones allow up to 4-hours of parking, and these P&D stations require a 2-hour minimum for parking time.
3 The amount of parking time that 25¢ buys changed from 15 minutes to 12 minutes, and went into effect
Commons for Everyone Initiative in January 2008 (Ordinance 7,018 went into effect on March 31, 2008). This current recommendation uses the same basis of parking time and parking fees, which remain unchanged as they apply to meters that accept only coin payments. The difference here is to set a minimum parking time for spaces at P&D stations, whether payment transactions are made by coin or credit/debit card.
BACKGROUND
The City has offered customers the option of paying for parking with either coin or credit/debit card transactions at multi-space meters since April 2005. There are now 68 P&D stations installed on the street and in 2 of the City’s off-street surface lots, controlling a total of 670 spaces. Each P&D station has 3 “value buttons” that are pre-programmed to select an amount of parking time for a corresponding payment by credit/debit card, and they accept Visa and MasterCard (MC) only. One of the value buttons can be programmed to accept payment corresponding to a new minimum parking time (12 minutes for 25¢), leaving the other 2 value buttons at 1-hour and the maximum time for its location. The shortest time now set for a coin transaction at both P&D multi-space stations and single-space meters is 2 minutes of parking for 5¢, while the current minimum time for payment by credit/debit card is 1 hour for $1.25.
Visa and MC charge varying interchange fees, based on the category types of credit cards (individual accounts, business accounts, mileage programs) used for each pay station transaction. Additionally, Wells Fargo charges a processing service fee of 0.27% of gross Visa and MC sales each month. For recent P&D credit/debit card transactions the overall processing fees cost the City almost 10% of the total transaction revenues. Other cities identified in violation of the same Visa regulation are: Portland, Oregon; Seattle, Washington; Manchester, New Hampshire; and Boston, Massachusetts. These cities have successfully implemented P&D station programming changes to comply with the Visa Regulation. Portland reports experiencing no negative impact on their revenues after converting to a minimum parking time for the rate of 25¢.
RATIONALE FOR RECOMMENDATION
In order to be in compliance with Visa regulations, the City is eliminating the shorter minimum parking times at P&D stations, but leaving the current rates unchanged.
ALTERNATIVE ACTIONS CONSIDERED
The City could retain the minimum parking time of 2 minutes for 5¢ at P&D stations, however staff does not recommend this, as bank fees for credit/debit card transactions would be more than the revenue for purchasing the smallest amounts of time.
CONTACT PERSON
Minimum Parking Time at Pay-and-Display Parking Stations ACTION CALENDAR May 6, 2008
Page 4 Attachments:
1: Ordinance
ORDINANCE NO. -N.S.
AMEND BERKELEY MUNICIPAL CODE SECTION 14.52.120, PARKING METER AND PAY-AND-DISPLAY STATION FEES, TO ESTABLISH A MINIMUM PARKING TIME AT PARKING METERS THAT ACCEPT BOTH COIN AND CREDIT &/OR DEBIT CARD PAYMENTS
BE IT ORDAINED by the Council of the City of Berkeley as follows:
Section 1. That Berkeley Municipal Code Section 14.52.120 is amended to read as follows:
Section 14.52.120 Parking meter and pay-and-display station fees
Parking meter and pay-and-display station fees for the parking meter zones hereinabove set forth shall be as follows:
A. At parking meters and pay-and-displays stations, the The parking fee shall be 25 cents for each 12 12-minutes segment of parking time or any fraction thereofpurchased.
B. At parking meters only, the The parking fee shall be 10 cents for each 5 5-minutes segment of parking time or any fraction thereofpurchased.
C. At parking meters only, the The parking fee shall be 5 cents for each 2 2-minutes segment of parking time or any fraction thereofpurchased.
Section 2. Copies of this Ordinance shall be posted for two days prior to adoption in the display case located near the walkway in front of Council Chambers, 2134 Martin Luther King Jr. Way. Within 15 days of adoption, copies of this Ordinance shall be filed at each branch of the Berkeley Public Library and the title shall be published in a newspaper of general circulation.
ORDINANCE NO. -N.S.
AMEND BERKELEY MUNICIPAL CODE SECTION 14.52.120, PARKING METER AND PAY-AND-DISPLAY STATION FEES, TO ESTABLISH A MINIMUM PARKING TIME AT PARKING METERS THAT ACCEPT BOTH COIN AND CREDIT &/OR DEBIT CARD PAYMENTS
BE IT ORDAINED by the Council of the City of Berkeley as follows:
Section 1. That Berkeley Municipal Code Section 14.52.120 is amended to read as follows:
Section 14.52.120 Parking meter and pay-and-display station fees
Parking meter and pay-and-display station fees for the parking meter zones hereinabove set forth shall be as follows:
A. At parking meters and pay-and-displays stations, the parking fee shall be 25 cents for each 12-minute segment of parking time purchased.
B. At parking meters only, the parking fee shall be 10 cents for each 5-minute segment of parking time purchased.
C. At parking meters only, the parking fee shall be 5 cents for each 2-minute segment of parking time purchased.
Section 2. Copies of this Ordinance shall be posted for two days prior to adoption in the display case located near the walkway in front of Council Chambers, 2134 Martin Luther King Jr. Way. Within 15 days of adoption, copies of this Ordinance shall be filed at each branch of the Berkeley Public Library and the title shall be published in a newspaper of general circulation.
ESTABLISH A MINIMUM PARKING TIME AT PARKING METERS THAT
ACCEPT BOTH COIN AND CREDIT &/OR DEBIT CARD PAYMENTS
The Department of Public Works is proposing to establish a minimum parking time purchase of 12 minutes, at the current rate of 25¢ for each 12-minute segment of parking time purchased, at parking meters that accept both coin and credit or debit card transactions for payment. The rate per minute of parking time is not changing, however the minimum parking time that can be purchased at pay-and-display (P&D) stations, those accepting both coin and credit or debit card payments, is being increased from 2 minutes to 12 minutes. These changes are necessary for the City to comply with Visa Operating Regulations that prohibit setting a minimum transaction amount for use of a credit or debit card. P&D stations currently require a minimum credit/debit card payment of $1.25, which provides parking time of 1 hour. Setting parking time options for less than 12 minutes results in the possibility of credit/debit card transactions of as little as 5¢ – 10¢ (for 2 – 5 minutes of parking time), which will cost as much or more in bank transaction fees to the City as the amount of payment using a credit/debit card.
The hearing will be held on, May 6, 2008 at 7:00 p.m. in the City Council Chambers, 2134 Martin Luther King, jr. Way.
A copy of the agenda material for this hearing will be available on the City’s website at www.ci.berkeley.ca.us as of May 1, 2008.
Written comments should be mailed or delivered directly to the City Clerk, 2180 Milvia Street, Berkeley, CA 94704, in order to ensure delivery to all Councilmembers and inclusion in the agenda packet. Comments received no later than Monday, April 29, 2008 will be included in Council agenda packets. Comments received thereafter will be submitted to Council as supplemental communications at the meeting. For further information, contact Deanna Despain, Deputy City Clerk, 6900. FAX: (510) 981-6901. TDD: (510) 981-6903.
For further information, please contact Danette Perry, Senior Transportation Supervisor, Public Works at 981-6472 or A.Robin Orden, Senior Management Analyst, Public Works at 981-6304
Published: [Publication Date in Newspaper]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I hereby certify that the Notice for this Public Hearing of the Berkeley City Council was posted at the display case located near the walkway in front of Council Chambers, 2134 Martin Luther King Jr. Way, as well as on the City’s website, on [Enter Date].
