TRANSPORTATION and PARKING:
Penn Transportation and Parking:
New Services, New Parking Rates, and Tax Relief Options
The Penn Transportation and Parking programs are vital auxiliary services provided for the entire Penn community. They are essentially self-funding operations maintained by a professional staff managed by Director Bob Furniss.
As many members of the University are aware, over the last decade Penn's transportation and parking systems have undergone significant change. Penn's parking system is comprised of 43 parking facilities (35 surface lots and 8 garages). Eighty percent of our available spaces are reserved for faculty, staff, and student parking and 20% are for public access to campus. Greater demand for parking within proximity of the University's core comes not only from our student and employee population of over 50,000, but also from the substantial number of daily campus and Health System visitors. The University-related daytime population competes with the neighboring community for the use of local streets and parking spaces. We expect demand for parking to grow as we expand programs and attractions that draw audiences to the Penn campus.
In addition to the space availability problem, the need to monitor and control traffic congestion, access to campus, pedestrian safety, and the use of programmatically valuable land makes future decisions regarding campus parking even more complicated. Our campus development plans and amenities have been the main sources of diminished parking capacity. Many surface parking lots have been used for new academic, research, and retail entities, for example, Sansom Common; the Blauhaus; Murphy Field; the Schattner Dental School building; and Hamilton Square. The closing of the Civic Center reduced parking supply by 1,200 spaces, which sharply diminished parking availability for nearly 1,000 Health System employees. Those individuals had to be immediately accommodated under the constraint of a limited number of options. There has been an overall loss of over 1,340 spaces from 1995's total of 7,141. We will lose approximately 400 more in 1999.
There are currently almost 1,400 people on the parking waitlist. They have no permanent University parking option at this time. At these levels, the time on the waitlist is expected to exceed three years. In fact, approximately 75%-80% of the transient spaces are now being used for all-day parking by Penn faculty, staff and students who do not now have permits.
Transportation Services has experienced similar challenges to those of the parking program. Originally driven by the desire to provide safe transit to and from campus locations and student residences, the expansion of the transit program has significantly reduced the number of people who traverse the campus on foot--one of the key factors in creating a safe campus.
For fiscal year 1999, we project over 445,000 rides will be taken on our network of buses, shuttles, escort vans, and handivans. Ridership on all Penn shuttles has grown more than 600% over the last 10 years. Most importantly, Penn has not charged fees to individual riders, but does receive an annual subsidy of $300,000 from the Student General Fee pool. The parking program subsidizes the remainder of the expense, which is approximately $1.3 million.
After extensive deliberation, in order to address its wide-ranging needs,
Penn has determined that building a limited number of new, multipurpose
garages presents the most efficient, cost-effective solution. The goal is
to provide convenient, competitively priced parking for the University community
and its visitors in ways that do not detract from the image or quality of
the campus environment. Depending upon market conditions and a further analysis
of our near-term and longer term needs, we are projecting new construction
plans as follows:
The administration has been intensively studying the most viable ways to add parking availability, provide sound financing plans for new garages, fund maintenance and renovations, and examine enhancements to the transportation system. Parking is being included in the ongoing campus master planning process. Within the next fiscal year, Business Services will undertake a consultative effort to develop a comprehensive Transportation Policy. The policy will include a traffic pattern analysis, an examination of capital requirements for future parking needs, and our public transportation options.
There have been preliminary discussions with the debt rating agencies on mechanisms to fund and operate new garages while minimizing the effect of additional debt on our balance sheet. At this time, traditional debt financing offers us the most feasible and economical way to fund new construction. We will continue to look at available alternatives as we progress in our planning.
At present, Penn's parking rates are well below market in the City of Philadelphia. Unless they are increased, our parking and transportation system will fall farther behind, because we will lack the revenue needed to maintain our current garages, to build new garages to relieve the parking waitlist, to establish a capital improvement fund for future needs, and to fund our transportation system.
Fortunately, as described below in more detail, new federal tax legislation has provided a way to substantially offset increases in parking rates. For the vast majority of Penn parkers and transit pass purchasers, application of the new law will completely or largely eliminate the effect of rate increases in FY 2000. Another source of help will come from the new SEPTA Circulator (or "LUCY") and the proposed PennPass that are also described below.
New rates have been established for fiscal year 2000. Thereafter, parking rate increases will be determined based upon the need to fund parking improvements or construction, increases in operating costs for parking and transportation, and contributions to a capital improvement program for existing and new facilities. The Department of Transportation and Parking will continue to operate in the most cost effective manner possible consistent with excellent service and the desire to keep parking rates at reasonable levels.
Additionally, effective in the new fiscal year, we will begin consolidating the number of parking rate classes from 11 to 4. This step is being taken in order to streamline our administrative operations and reflects the changes in the types and locations of parking venues over the last few years. To be sure, there are fewer distinctions between core, peripheral and remote parkers due to the campus' expansion. We plan to have only 4 classes in place by FY2002.
The table below presents the new permit classes as well as the new parking rates for FY2000. Please note that the average per diem permit-parking rate is substantially below the transient rate.
Effective in fiscal year 2000, Penn will be offering the Penn Commuter Choice program. Penn Commuter Choice allows eligible commuters the advantage of tax relief on a portion of the amounts they pay for their commuting expenses. Penn Commuter Choice will be a Flexible Spending Plan (FSP) like our Health Care and Dependent Care accounts, but it will be administered separately from the other FSPs. This program has been developed as a result of the "TEA 21" legislation of 1998 (Transportation Equity Act of the 21st century) that amended previous federal tax laws and allows employers greater flexibility in providing financial assistance for commuters. Listed below are the qualifications for eligibility:
There are limits to the amount of tax relief as established by the law. An eligible commuter will have the annual public transit or parking costs deducted from his/her pay and placed in the Penn Commuter Choice pre-tax expense account up to the allowable legal limit. This means that the commuter will not pay taxes on a significant portion of the full cost of those passes or permits. Two key examples are presented here:
Public Transit or VanPool: If you regularly purchase passes for public transportation or registered vanpools / subscription buses through the payroll deduction program, your maximum tax relief will be up to $65 per month or a total of $780 per year. This component would cover:
For example, SEPTA ComPass holders with City Passes would receive the tax benefit for the full $57.60 monthly cost because the program limit is $65 per month. Those commuters who hold passes for Zones 2 though 5 will receive tax benefit on only $65 of the cost; the remaining cost must be paid from their after-tax dollars.
Parking Permits: If you hold a Penn parking permit purchased through the payroll deduction system, up to $175 per month, or $2,100 per year will be deducted on a pre-tax basis, and you will not pay federal or FICA taxes on that amount.
There are other components of Penn Commuter Choice that will be disseminated in full during the summer months and in advance of the parking registration period. Please look for this important information that will be mailed to all parking permit registrants. The parking fiscal year runs from September to August; thus, the "new parking year" begins September 1 and new rates will be effective on September 1. All ComPass program participants and those parking permit holders who currently pay through payroll deduction will automatically receive the pre-tax benefit.
The program allows eligible commuters to offset their commutation expenses depending upon their federal and FICA tax brackets. Please note that state taxes have not been included: neither the Commonwealth of Pennsylvania nor many other states have exempted commuters from paying after-tax dollars on commutation.
Using the new academic year's rates as an example, a Class 1 parking permit will cost $1,221 per year. For someone in the 15% Federal tax bracket, the tax savings would amount to approximately $276.56 per year or 22.65% (15% federal tax plus the 7.65% FICA tax). A Class 3 permit holder in the same tax bracket would see savings of $200.45 on his/her annual permit cost of $885.
For a City Pass holder, annual transit costs total $691.20. Savings with the pre-tax benefit for an individual in the 15% tax bracket will be approximately $156.56 per year.
Within our peer group or regional area the following schools have adopted the TEA 21 pre-tax parking accounts structure: Yale (in calendar year 1998); Johns Hopkins (1998 including offsite parking and mass transit in 1999); Cornell (1999); MIT (1999); Dartmouth (beginning January 2000); and NYU (beginning January 2000). At this writing, Stanford, Brown, and the University of Chicago have not yet elected to take advantage of the legislation. We expect that other universities and colleges will adopt TEA 21 as have several corporations and organizations.
In conjunction with various West Philadelphia enhancement efforts, the new University Circulator (or "LUCY" for Loop around University City) is scheduled to start service in July or August 1999. A partnership among several West Philadelphia institutions, the Circulator will offer transit service from 30th Street Station to various locations around Penn's campus and University City. The service will be free to University students, staff, and faculty, and to employees of other area institutions. The rate for the general public has been set at 50 cents.
While LUCY stops have not yet been determined, the service will provide a safe, convenient way to get around Penn's campus, as well as an easy trip for commuters shuttling back and forth between the University and 30th Street Station. Buses will operate from 6:30 a.m. to 8 p.m. Monday through Friday, except major holidays. These buses will run in two directions along the same route through University City, with a five to seven minute wait between buses.
The system will be operated by SEPTA through a contract with the University City District. Local institutions that have partnered in the LUCY project include Penn, Drexel, the VA Hospital, and the Children's Hospital of Philadelphia.
SEPTA has proposed a unique program, called PennPass, which would give students unlimited transit usage in the City of Philadelphia and the first suburban transit zone for a fixed price. SEPTA is interested in attracting greater ridership and in expanding its service to the University City population. We are in the midst of discussions about PennPass, and should hopefully be able to unveil the program later in the calendar year.
The Division of Business Services and the Department of Transportation and Parking are dedicated to offering the highest level of service possible to the Penn community. We believe that we can enhance the quality of campus life through the aforementioned programs and future plans.
We understand that our new permit structure, garage construction, and programs will require adjustment by our constituents. Please look for further information on the changes to the transportation and parking programs and contact us if you have questions, comments, or suggestions at (215) 898-IDEA (4332).
John A. Fry, Executive Vice President,
Leroy D. Nunery, Vice President for Business Services,
and Robert Furniss, Director of Tranportation and Mail
Almanac, Vol. 45, No. 33, May 18/25, 1999