New City Revenue from Familiar Sources

July, 2020

It’s no surprise that thousands of U.S. cities are anticipating significant budget cuts this year. The widespread financial chaos isn’t sparing any sector, and communities large and small are hurting. Sharp declines in tax revenues due to closing businesses are already causing cities to slash expenditures and, barring new developments, we can soon expect reductions in local public safety agencies, police department staff, public works, and more. It makes sense then, that investigating ways to rapidly inject revenue into cities has taken on a new urgency.

Higher turnover directly correlates to more business, and correspondingly, more tax revenue for cities.

The federal government has stepped in and offered relief packages designed to save cities from trimming services, raising taxes, or succumbing to financial ruin. 

As part of the $2 trillion package that the president signed into law last month, lawmakers authorized some $150 billion to be used to help sustain states and large cities. Yet even these measures come with restrictions that many cities will find prohibitive, and the amounts offered on a city-by-city basis may well be insufficient to stave off collapse.

In this fevered search for money, a look at upgrading and contemporizing existing city assets using Federal relief dollars is a smart place to begin. Untapped revenue and impressive ROI can be found in a city’s approach to parking, as recently seen in San Francisco’s SF Park program. Federally funded through the Department of Transportation’s Urban Partnership Program, SF Park used innovative technology to optimize their parking infrastructure by placing a parking sensor in every space. This allowed them to collect and utilize real-time data to identify parking availability and implement demand-based pricing. 

Historically, San Francisco had used parking management methods that emphasized flat meter rates and short time limits. These “one size fits all” methods were not only outdated, but ineffective, and by failing to be responsive to actual parking conditions, valuable revenue was left on the table. Prior to their use of parking sensors, San Francisco couldn’t accurately track utilization, and had no basis upon which to price accordingly. In the end, by embracing innovation, San Francisco’s overall city parking revenue went from $66M annually to $99M within three years.  

Many cities currently don’t charge for parking in the first place. This doesn’t mean that utilizing parking sensors can’t make them money, however. In those cases, using sensors to help enforce time limits on free parking by measuring actual usage allows them to better utilize their existing free parking inventory. Variable time limits can be applied based on sensor data to allow for more parking turnover where it’s needed most. In areas where shorter parking sessions abound — in front of banks or post offices, for example — capping parking duration at one hour is often more appropriate than allowing multi-hour or even all-day parking. Higher turnover directly correlates to more business, and correspondingly, more tax revenue for cities.

A look at city lighting reveals no shortage of wasted energy (and money) and most city streetlighting is ripe for a cost-cutting upgrade. Many streetlights are illuminated all night long, and some even remain lit during daylight hours, serving no practical purpose. By installing smart sensors and an integrated lighting network, streetlights can be dimmed at times during which they are not needed, and can remain fully illuminated when they’re needed most. This simple measure can rapidly and severely reduce energy expenditures, and pass the savings directly into the city’s coffers. 

While extreme times often call for extreme measures, our nation’s cities needn’t look toward the most rash and radical budgetary solutions first. Instead, by working with the assets they already have, seizing upon “low hanging fruit” like parking, and embracing innovation, they can smartly uncover new ways to make, and save, money at a time when it’s needed most. 

Matt Willenbrink - Executive Vice President - Sales & Marketing Fybr. He can be reached at mwillenbrink@fybr.com