The City of Red Deer is still repaying two loans for the Sorensen Station parkade, which are contributing to a deficit in the parking revenue fund. (Advocate staff)

The City of Red Deer is still repaying two loans for the Sorensen Station parkade, which are contributing to a deficit in the parking revenue fund. (Advocate staff)

Red Deer taxpayers to help cover future parking costs in the city

Refinancing the Sorensen Station parkade would not pay-off, council was told

Only half of Red Deer’s downtown parking spots are in regular use, so money collected from meters and fines cannot fully cover parking costs, city councillors heard on Tuesday.

Costs include repaying a loan for the Sorensen station parkade and maintaining parking lots.

As the city’s parking program is not sustainable from user fees alone — either in 2021 or in the foreseeable future — city council opted to roll the balance of parking operations into the tax-supported side of future operating budgets.

Mayor Tara Veer and Coun. Vesna Higham voted against the majority of councillors on this. Veer felt the real problem is the cost of repaying the parkade loan, while Higham also believed parking costs could become more sustainable once the loan was paid off.

City staff studied the benefits of paying off the city parkade’s mortgage early, but did not recommend going this route.

The total penalty the city would pay for refinancing both parkade debentures was calculated to be $774,750. This would outweigh the savings of $331,702 that would result, said the city’s chief financial officer Dean Krejci.

Veer and Higham still favoured paying off both debentures early and then refinancing the outstanding loan balance over a 30-year term at a lower interest rate.

They felt the pandemic was a cause of falling parking revenues, and these would grow again once the COVID-19 era was over.

But city council heard that parking costs are not completely covered by user fees in most mid-sized cities in Alberta.

Most councillors supported going the tax-supported route after Krejci could not foresee a time when parking operations would become sustainable.

Red Deer City Council

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