Council looks at parking and Parks and Rec fees as it prepares for vote on FY 2017 budget next week

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Thursday, May 19, 2016, 7:40 am
Chris Root

Photo: East Lansing Aquatic Center, Courtesy City of East Lansing

The City Council must adopt the budget for Fiscal Year 2017 at its next meeting on May 24 to meet the annual State deadline, so Tuesday night’s 5:00 p.m. meeting was the last of the Council’s special budget work sessions to prepare the details of its budget resolution.

Council devoted much of the meeting to discussing possible fee increases, focusing on parking, and Parks and Rec programs. The Council sought informal consensus about possible changes so that staff could revise the fee schedule in the budget resolution that the Council will work with at its May 24 meeting.

All five members of Council were open to increasing at least two types of parking fee income. The first change is to extend the hours of parking meters in the downtown from 6:00 p.m. to 3:00 a.m. A staff memo informed Council members that a “utilization study estimated the revenue for extending the meter enforcement from 6 pm to 3am was around $200,000.”

There seemed to be consensus to make this change concurrently with installing smart parking meters that enable drivers to use a smart phone to put more money in the meter without having to return to the meter. (Linking the extended hours to installation of new meters could delay getting increased revenues in some areas and thus lower the total financial impact in the first year.)

Another possible change in parking fees is an increase in the daily maximum rate at public surface lots and garages on MSU home game days, when there is very high demand that is probably fairly inelastic (i.e., a rise in price does not result in a decrease in people’s willingness to pay for the service or product). The current maximum Special Event daily rate is $15, and Council members discussed raising it to $20 in garages and to anywhere from $25 to $40 on surface lots, although the total increase might not be implemented all at once.

The Council also discussed possible increases in either resident or non-resident rates for Parks and Rec programs, noting that the fees for some programs have a significant differential between resident and non-resident rates (the Aquatic Center, in particular), while other programs have no differential at all (such as programs for school-aged participants during the school year and full-day camp during the summer).

Staff members were asked what factors go into setting rates for these programs. Tim Dempsey answered that the City generally tries to cover variable expenses of these programs (excluding capital costs) and also considers the fees of similar programs in nearby communities. Wendy Wilmers-Longpre of Parks and Rec added that demand and participation data are also taken into account.

Councilmember Shanna Draheim noted that the City of Lansing sets its program fees quite low and apparently does not attempt to cover its costs, whereas some other neighboring communities have fees that are more comparable with East Lansing. Mayor Mark Meadows said he did not want to adjust fees in a way that would reduce participation, and Mayor Pro Tem Ruth Beier supported continuing the pattern of subsidizing rates for residents by virtue of not attempting to cover capital costs. Meadows and Councilmember Erik Altmann both spoke in favor of considering charging differential rates to non-residents for more programs.

Councilmembers acknowledged that setting fees is complicated, and that there could be reasons for not having the same percentage differential between residents and non-residents for all programs. For that reason, the Mayor asked Parks and Rec staff to provide data about participation in various programs and to make recommendations for programs for which the non-resident rate might be increased.

Since possible rate increases would not affect programs this summer, and a thoughtful review of rates cannot be completed before the Council votes on the budget next week, Council considered the possibility of amending the budget later with some additional program fee increases.

Looking for additional revenue sources has been a topic of conversation among Council members at the budget meetings since the first meeting at which City Manager George Lahanas explained that City departments had made $1 million in cuts to projected expenditures in order to close the gap between income and expenditures in the draft budget.

The Council also is very aware of the City’s debt, which Finance Director Mary Haskell has called “staggering.” The biggest component of this debt is the almost $71 million unfunded liability of East Lansing public employees’ pension funds. At the same time that the City must address the major shortfall in funding its pension funds, it also faces high costs of road, water, and sewer maintenance needed by a city of the age of East Lansing.

The Financial Health Team appointed by the Council in February will make recommendations by the end of July about the unfunded pension liabilities and by December 15 about other revenue and expenditure issues. This means Council must adopt the budget for FY 2017, which begins on July 1, 2016, before receiving any input from the Financial Health Team. © 2013-2020 East Lansing Info