I am sure many of you know that the University is recommending to the Board of Trustees that we accept the offer put forward by QIC Global Infrastructure and its operating partner LAZ Parking. The Board will meet later this month.
In advance of that decision, we held several informational meetings with faculty, staff and students and heard a number of good questions. I wanted to address two key ones here and on our FAQs page.
First, we've often been asked whether we guaranteed that the parking firm would get a certain level of revenue. The answer is no. The contract did not set or assure revenues for the potential operator. The University would keep the full up-front payment of $483 million from the operator – regardless of how much revenue the firm receives over the life of the contract.
This may seem like a risk for the potential operator, but the robust bids we received illustrate that in today’s economy, investors are looking for stable, long-term sources of income. Our parking operations represent that kind of stability – making this a worthwhile investment.
A second question centered on the perceived disparity between parking permit price increases and salary increases. I’ve answered this question for many of you individually, but I thought this point was worth reiterating.
A two percent salary increase means significantly more than a 5.5 percent increase in a parking permit fee because the base numbers are much different. Using the parking rates for the upcoming permit year, that translates into a rate increase of about:
- $40 over the current rate for an A permit
- $20 for a B permit
- $14 for a C permit
For a $30,000 salary, a two percent salary increase would mean $600. For a $45,000 salary, a two percent increase equates to an additional $900 and for a $60,000 salary, it would be $1,200.
I will continue to share any new information I receive, but I do not expect to have updates quite as frequently between now and the Board of Trustees meeting. Feel free to continue to send any questions you might have to the Parking Advisory Group mailbox.