Boyd A. Loving
What are the differences between Parking Authorities and Parking Utilities in the State of NJ, and why does Ridgewood choose to retain a Parking Utility?
The Legislature of the State of New Jersey in 1948 adopted N.J.S.A. 40:11A et seq., commonly known as the “Parking Authority Law,” which authorized municipal governments to create an independent parking authority. A parking authority has the same geographic boundaries as the city that created it but is “a public body corporate and politic and a political subdivision of the State (of New Jersey).” ANew Jersey parking authority has five commissioners who are appointed by the governing body of the municipality (city council or city commissioners) for staggered five-year terms, or seven commissioners with two mayoral appointments and five governing body appointments. A parking authority may employ an executive director, attorney, engineer, accountant, and any other professionals and staff necessary to manage and deliver parking services to the city’s residents and the general public.
As noted elsewhere in this report, New Jersey parking authorities have extraordinary statutory authority. N.J.S.A. 40:11A-6 grants parking authorities the powers necessary to carry out and effectuate essential government purposes. Furthermore, parking authorities may buy, sell and/or lease property as a lessee or lessor; construct multiuse projects and parking facilities; borrow money; issue bonds; mortgage or otherwise encumber its assets; enter into contracts; and retain earnings.
Because parking authorities fund their operations from revenue derived from parking user fees rather than through real estate taxation, and board members traditionally are appointed from the business community, parking authorities tend to be operated like a business. Parking authorities are conscious of the fact that annual expenses should not exceed parking revenue. Surplus annual revenue is retained to pay for renewal and replacement repairs at existing parking facilities and to purchase real estate or build new facilities.
The strength of a parking authority is its independence. The parking authority’s commissioners are appointed, not elected, public officials. Consequently, a parking authority board of commissioners can make difficult planning decisions such as raising parking rates, installing parking meters, increasing parking enforcement, acquiring property by eminent domain, or selecting a location to construct a parking facility without regard to its immediate political consequence. A parking authority provides elected officials with a measure of political cover in that the authority’s decisions are the result of the actions of the authority’s board rather than the city’s governing council/commission.
Among the other advantages of a parking authority:
• Its debt is outside the municipalities bonding limit (Cap)
• Its sole purpose and function is to construct, maintain, and operate public parking
• It can retain earnings and accumulate surplus revenue for capital projects
• It can develop income-producing mixed-use projects exempt from real estate taxes, which are intended to subsidize the cost of providing public parking.
The negatives of a parking authority are the reverse side of its strengths. Parking authorities are independent and, on occasion, choose to raise parking fees or pursue goals, objectives, or projects that are not supported by a majority of the municipal governing body. Parking authorities are not directly controlled by the local governing body, which has the power only to appoint or reappoint one authority commissioner per year to the authority’s member board. Parking authorities traditionally have generated revenue surpluses at year end or have accumulated significant financial reserves through retained earnings that local municipal governments prefer be utilized for taxpayer relief or be transferred to the municipality’s general fund to offset the city’s operating budget expenses.
Based upon a review of Who’s Who in Parking 2005, published by the International Parking Institute (IPI), there are seven states—Alabama, Connecticut, Delaware, Florida, New Jersey, Ohio, and Pennsylvania—that have parking authorities. However, it should be noted that Miami is the only parking authority in the state of Florida that was created by a special act of the legislature. The state of New Jersey has approximately thirty parking authorities, more than any other state in the nation.
A municipality, as an alternative to a parking authority, may create a parking utility. A parking utility has a number of the strengths of a parking authority: executive director; operating budget and debt service separate from the municipality; ability to generate annual surplus revenue and retain earnings; ability to set its own rates and fees; and a function strictly limited to providing public parking.
Among the negatives associated with a parking utility: limited independence; the executive director usually reports through the city administrator/manager or CFO; the local governing body retains jurisdiction over rates, fees, capital projects, operating budget, and personnel; and parking revenues in excess of annual operating expenses generally are turned over to the city’s general fund.
The good news/bad news aspects of a parking utility are that the municipal governing body maintains virtual control of the parking entity. However, the hands-on control exercised by the municipal governing body places parking planning and decision making within the political process.
In municipal environments where control of the mayor’s office and governing body are continually contested, parking can become a political rather than a planning issue, which may affect a parking utility’s ability to aggressively pursue public parking improvements and objectives.
There are at least four parking utilities within the state of New Jersey: East Brunswick, Hoboken, Princeton, and Trenton.
Parking Utility revenues in excess of annual operating expenses are moved over to the Village’s general fund. If Ridgewood had a Parking Authority all these years, all revenues collected (and not stolen) would have been used exclusively to maintain and/or improve parking. There would be no parking problem now, because there would have been plenty of money to resolve it.
Proving once again ladies and gentlemen that you can’t have your cake and eat it too!
(Special thanks go to James Ten Hoeve, who revealed the answer publicly several years ago.)