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Parking revenues down, reserves dwindling
By Ruthanne Johnson
rjohn180@mscd.edu

Photo by Heather A. Longway-Burke • longway@mscd.edu Parking hut attendant and Metro student Melissa Jones takes money from a student March 6 at the Parking and Transportation Center.

Reserve funds acquired from parking have dwindled from $9 million in 2003 to under $900,000 in 2006, a recent Auraria Board of Directors meeting revealed.

Parking profits were also down substantially from the previous year, generating concern that reserve funds could be depleted by 2010.

“Parking revenue initially goes toward the general operation, maintenance and repair, debt service and campus police … while additional revenues go into a reserve fund used as a cushion for emergencies and other campus projects,” said Mark Gallagher, director of parking and transportation services for the Auraria Higher Education Center. “At the current rate, we are concerned there will not be enough for those emergencies.”

Used for projects ranging from roof replacements and elevator repairs to media-ready classrooms and asphalt upgrades, the unrestricted reserves have also been used to cover Auraria’s operating loss of $3,921,209 for the past three years. This substantial deficit has greatly contributed to the rapid depletion of reserve funds.

“Auraria is about 48 percent debt financed,” the board report stated, adding that the interest alone mounted to about $4 million in 2006. “Operating revenues are not high enough to cover both operating expenses and the interest on the outstanding debt.”

To prevent the depletion of reserve funds generated from parking income, an auditor recently recommended that AHEC find other sources of revenue for general operating expenses and campus remodeling and repairs.

“Auraria parking is less expensive than other places,” Gallagher said. “But parking fees could potentially increase in order to offset these losses.”

In addition to covering Auraria’s operating losses and paying for campus improvement, contributing factors to Auraria’s diminishing reserve funds include increased use of light-rail lines, more online courses and the hard-hitting loss of revenue from fewer events at the Pepsi Center and the painfully absent Broncos and Avalanche playoffs.

“Parking revenue was down about $60,000 from the previous year,” Gallagher said. “We lost $15,000 because of the two Bronco games, and the Avalanche didn’t make playoffs for the first time in 10 years. This summer we won’t have the Grand Prix, which means an additional loss of about $45,000 in revenue, so we don’t project great growth this year.”

However, the Democratic Convention at the Pepsi Center could help offset the loss, Gallagher said.

Another factor affecting parking profits is the recent opening of more light-rail lines at Auraria.

“The outlying, lower-cost spitter machine lots are $17,000 less than last year,” the board report stated, adding that this particular drop in revenue could be related to increased student use of light rail.

Gallagher echoed the report’s findings.

“Auraria parking has 7,000 spaces supporting a base of 35,000 students,” he said. “We have 35,000 to 40,000 cars rolling in and out of our lots every week, but there has definitely been a drop since the opening of light rail.”

According to Gallagher, however, the numbers of students riding the light rail to and from Metro should not change drastically from this point forward.

“People who need to drive are driving. Their transportation decisions have already been made,” he said.

The board report also stated that decreased state funding has been a direct factor in many of the budgetary issues, which in turn forced the draw from reserve funds to cover operating losses.
The erosion in Auraria’s reserves could prove detrimental in an emergency.

“This year we used twice the funds over last year for snow removal, from $50,000 to $100,000,” Gallagher said. “We need a cushion for situations like this.” He added that although parking brings in between $7 million to $8 million annually, it is difficult to put aside reserves when money is needed for other projects.