City, DDA to develop parking agreement

After working under an informal arrangement for more than 20 years, the city of Bemidji and the Downtown Development Authority are currently in the process of hammering out a formal agreement regarding the management of downtown parking.

After working under an informal arrangement for more than 20 years, the city of Bemidji and the Downtown Development Authority are currently in the process of hammering out a formal agreement regarding the management of downtown parking.

Two members of the DDA met with the Bemidji City Council at a work session Monday to discuss the final draft of the agreement. Though most of the wording was worked out in previous meetings, Pat Donnay and Jim Eckstrand of the DDA said their organization is concerned about a provision in the draft that could change the way revenue generated from parking permit sales is spent.

Since the early 1980s, the city has entrusted the DDA to manage public parking downtown. The DDA has been in charge of issuing parking permits and collecting payments for them at no additional cost to the city. All the money raised through permit sales - an estimated $35,000 to $50,000 a year - has been retained by the DDA to be used for purchasing land for new lots or making major capital improvements on existing ones.

However, the city's informal relationship with the DDA was highlighted last spring during meetings between the two entities. At the meetings, the City Council expressed an interest in defining the DDA's role in parking management through a formal agreement.

"As time goes on (downtown parking) is becoming a larger and larger issue," City Manager David Minke said at Monday's work session.


"It's time to get that agreement formalized."

Over the past few months, DDA leaders have been meeting with city staff and members of the Public Works Committee - a subcommittee of the City Council that oversees parking issues - to develop a written agreement.

Monday's work session was geared at working out the few remaining kinks before the agreement is finalized.

"There's been a lot of ambiguity that has been clarified," Donnay said, referring to the previous meetings and current draft of the agreement. "Now we're at the point where we need to clarify how the fees will be allocated."

Under the new agreement, the DDA will continue to manage downtown parking, but the city will establish and control a self-perpetuating "parking fund" that will use parking permit revenue to pay for parking lot expenditures. The agreement also includes a provision that allocates 10 percent of the permit revenue to the DDA to cover administrative costs.

However, the DDA has voiced opposition to a provision in the new agreement that would allow money from the parking fund to be used for the operation and maintenance of the lots. According to City Finance Director Ron Eischens, the city currently spends between $50,000 and $75,000 a year on parking lot maintenance. The city pays for the maintenance out of its yearly street budget; no parking permit revenue is used.

"The DDA's position is we'd like to see (the parking fund) as a capital account," Eckstrand said. "The money we've made from parking permits should go back to improving parking lots."

He continued, "If these dollars go toward maintenance, there won't be any dollars left for improvement. We want those funds to go for buying more lots, improving lots, things like that."


Donnay added that the main reason the DDA has agreed to manage the city-owned parking lots for more than two decades is because it gives downtown business owners some authority in the parking issue.

"It gives us the chance to see what we're generating and what we can do with that money," he said. "What role does the DDA play if we lose that kind of authority?

"One of the main missions of the DDA is parking and it's kind of ripping at the heart of the DDA to take that fund and put it over at City Hall."

City Attorney Al Felix said he understood the DDA's concerns. "If the money is gone and it's simply managing the permits, they ask themselves - the DDA - if it's worth it for them to be involved."

Councilor Ron Johnson said the provision to allow parking permit revenue to be spent on maintenance should stay. He noted that if a parking ramp is constructed in the future, the city may have to look for additional ways to pay for the high-cost of maintaining a multi-level ramp.

"Maintenance is pretty important," he said. "It seems to me that some of that parking sticker money should go for that."

Donnay suggested that the formal agreement limit the amount of revenue that can be spent on operation and maintenance to 20 percent. However, he admitted that he did not necessarily speak for the DDA as a whole when he made the suggestion.

The council jumped at the chance to compromise on the issue. They voted 7-0 to include a provision in the agreement that states that 20 percent of the parking permit revenue will be used for operation and maintenance, 10 percent will go to the DDA for administrative costs and the remaining 70 percent will be dedicated for capital improvements.


City staff will add the new language to the proposed agreement and present it to the DDA before the City Council takes a final vote on it at a future meeting.

As part of the agreement, the city also plans to establish a subcommittee consisting of councilors and DDA members to look into future parking issues. Members of the DDA and City Council agreed that the subcommittee will help maintain a strong partnership between the two entities.

"We should be looking at the future planning for a parking lot," Councilor Nancy Erickson said. "With this subcommittee, we will be paying closer attention to those needs."

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