BOROUGH OF POOLE
TRANSPORTATION ADVISORY GROUP – THURSDAY 8 NOVEMBER 2007
JOINT REPORT OF HEAD OF TRANSPORTATION SERVICES AND HEAD OF
FINANCIAL SERVICES
REPLACEMENT OF CAR PARK PAY MACHINES
1.Purpose of Report and Policy Context
1.1To consider a proposal for replacement of pay machines within the Council’s car parks funded from the existing Parking Services revenue budget.
1.2The scheme be developed for inclusion in the Transportation Capital Programme from 2008/09 and the Council’s wider Corporate Asset Management Plan.
2.Recommendations
2.1It is recommended that the Portfolio Holder approve:
(a)The replacement programme for pay machines and the associated funding plan.
(b)Recommendation to Full Council the use of Prudential Borrowing to fund the purchase of these ticket machines in accordance with the Council’s Financial regulations.
3.Background
3.1The Council operates the following chargeable parking spaces throughout the Borough for:
- 7 multi storey car parks – 3,004 spaces
- 41 surface car parks – 4,587 spaces
- on-street parking – 796 spaces
Net income from parking charges after running costs equated to £1.78m for the entire service in 2006/07.
3.2Car parks are essential to support the economic vitality of the town centre, district shopping centres and beaches. The summer 2006 Poole Opinion Panel indicated that 79% of the Panel Members use the Borough’s car parks at least once per month, with 49% using them at least weekly.
3.3Car parks often present the first and last image of the Town to visitors, and the service they offer is therefore critical. Reputational damage resulting from their failure is significant, as demonstrated by the Castle Point problems during Christmas 2006.
3.4The condition of the current car parking equipment, namely:
- 24 No. pay on foot machines Multi storey car parks
- 28 No. entry/exit barriers
- 124 No. pay and display machines – surface car parks and on-street parking
is a cause of concern due to the average age of the machines compared with their expected lifespan.
Of the MSCP pay on foot machines all are past their lifespan of 10 years, with 70% being some 16 years old.
For the pay and display machines on street and in surface car parks, 36% are currently past their lifespan of 10 years, rising to the majority within 3 years.
3.5The net result of this is twofold – problems with maintaining current service and loss of the potential for future improvement to customer service.
(a)Current Service
(i)Maintenance costs of equipment is increasing over time as the equipment itself has become increasingly unreliable.
(ii)Parts have become increasingly difficult to source as manufacturers no longer support older models.
(iii)Loss of revenue due to damaged tickets and more frequent occasions of having to raise the barrier due to faulty equipment.
(iv)Reduction in quality of customer service as a result of equipment failure.
(v)Loss of income due to power cuts ( where machines are being replaced by solar powered type )
(vi)Lack of DDA compliance
(b)Potential Service Improvement
(i)More modern and user friendly design
(ii)Lack of payment options such as credit cards, increasingly relevant due to level of charges (£10 per day at peak season in beach car parks). Ability to pay by credit card may encourage longer stays.
(iii)Note readers that can be Euro enabled if required.
(iv)Wireless networking provides the opportunity for flexible and responsive charging to be implemented, e.g. event nights, special offers both upwards and downwards for the benefit of both the Council and the service user.
(v)Improved management information, remote auditing, and more efficiency in dealing with future ticket appeals.
(vi)Solar powered operation for on street machines, helping to reduce the Council’s Carbon Footprint.
3.6The Council have an obligation as a service provider under Part III of the Disability Discrimination Act 1991 to take reasonable and practicable measures to improve the accessibility of its services to disabled people.
Progressing with the proposed replacement would provide an opportunity to consider how the Council may better meet the needs of disabled users. The meters need to be usable not only for people fit enough to drive but also those accompanying disabled passengers paying on their behalf.
4.Proposals
4.1It is proposed to let a contract for the replacement of car park pay machines to one single supplier for implementation over the period 2008/09 to 2010/11, at an estimated total cost of £1,013,588. A detailed cost estimate is shown as Appendix A.
4.2Car park equipment in the multi-storey car parks is oldest and creates the greatest problems with regards to both maintenance and risk to the Councils income stream,- and it is therefore planned to replace all of this first. Replacement would have to include all of the control equipment at the Kingland Road office, help points and associated communication. As it would not be possible to run two systems in parallel, this would have to be undertaken in one operation .
The installation costs ( excluding borrowing ) would be as follows:
2008/09
Dolphin Shopping Centre£243,000
High Street Shoppers£ 74,000
Quay Visitors£ 95,000
Shoppers 1 and 2£155,000
Seldown/Arts Centre£109,000
£676,000
4.3Officers are fully aware of the potential redevelopment of the Dolphin Shopping Centre. Given the current equipment problems replacement is urgently needed to reduce the loss in parking income and secure improved quality of service to users. With such a replacement the asset value would increase and the Council would then be in a stronger financial position in any negotiations with third parties.
4.4Pay and Display machines for on-street parking and surface car parks would be replaced over 2009/10 and 2010/11, phased on the basis of the age and condition of the current equipment. In order to stay within budgetary constraints and given that not all machines are life expired, it is proposed to replace only 71 of the current 124 machines. The remainder being of relatively newer age can continue to be operated with potential for use of spare parts from those machines being scrapped.
The programme would be:
2009/1045 No. = £210,000
2010/1126 No. = £127,000
From the above the total expenditure for the project is as follows:
2008/09£676,000
2009/10£210,000
2010/11£127,000
Total £1,013,000
5.Finance
5.1The following procurement options are available:
(a)Transportation Capital Programme
The programme for the current year is £4.35m. This comprises of:
(i)£3.97m (90%) from the Government for both integrated transport and maintenance schemes, provided to support the aims and objectives contained within the Local Transport Plan.
(ii)£400k (10%) is provided by the Borough of Poole to undertake more work within the structural maintenance area.
The funds for the Capital Programme have been fully allocated to other projects. It is considered that given the considerable pressure for works of this nature it would be inappropriate to use this source of funding.
(b)Prudential Borrowing
The Council can borrow under the prudential code as long as the
investment plans are justifiable in terms of being:
- Affordable, having considered the impact on Council Tax levels.
- Prudential and sustainable over the agreed period of commitment.
(c)Leasing Option
Based on informal discussions with suppliers in a soft market testing exercise, repayment costs associated with leasing equipment are shown in Appendix A. For comparison purposes the cost of the equivalent borrowing option (7 year leases are the norm in this area) is also shown
5.2While the figures in Appendix A would indicate that on the basis of ‘soft’
market testing, prudential borrowing would be more favourable, it would be
inappropriate to discount the leasing option completely. It is therefore proposed to seek tenders for both outright purchase and leasing so that best value can be secured. However a further consideration is that within the Prudential Borrowing option there would be a residual value of the equipment at the end of the period. This, plus any residual life in machines would be of added benefit for the long term.
5.3The repayment under Prudential Borrowing to cover the expenditure on the project are as follows:
10 annual payments 2008/09 to 2018/19 at £129,577 Total payment due £1,295,765
5.4In order to fund the proposal it is necessary to establish headroom within the existing parking services revenue budget to ensure the prudential borrowing (or leasing) costs will be covered. This can be achieved by:
(a)Increasing Car Park Income
The Medium Term Financial Plan assumes that income from car parking fees will need to increase by a level similar to inflation, nominally 2% which equates to some £101,000 per annum.
Parking charges have a significant influence on a number of Council strategies, including supporting the vibrancy of the Town Centre and Districts, together with the Tourism strategy. Given the current sensitivity of these areas it is suggested that significant ‘above inflation’ parking charge increases are not sustainable at this time, although there may well be an opportunity to review this position over the life of the repayment period.
(b)Savings and Efficiencies within the Current Parking Services budget
Whole life costings for maintaining car parks over the ten year period are shown as Appendix B. From this it can be seen that the machine repayment costs can be met without impacting on the other maintenance requirements. The main elements of these ongoing savings to be achieved are:
(i)Completion of current maintenance works such as lift refurbishments ( currently £90,000 per annum ), installation of fire doors and new emergency lighting could release this amount.
(ii)Energy saving features in MSCPs installed during 2007/08 which will achieve potential energy savings of approximately £24,000 per annum.
(iii)Reduced equipment maintenance costs due to newer equipment of approximately £25,000 per annum.
(iv)Additional income of approximately £18,000 per annum as a result of the improved efficiency of new equipment.
5.5In addition to these savings there would be the potential to reduce the technical staffing requirement, best achieved via natural wastage.
5.6Parking Services forms only one part of the total Transportation Services
revenue budget which itself is currently subject to financial pressures. These include the areas of Supported Bus Services, National Concessionary Fares Scheme and the medium term financial plan requirement of £171,000 savings in 2008/09. While these pressures are still to be resolved it is not anticipated that savings in car parks would be used for this purpose.
6.The Next Steps
6.1As this project exceeds expenditure of £250,000 then approval is classified as a key decision, and therefore would require a Cabinet decision which would need to be referred to Full Council.
6.2Procurement rules state that this project would need to be advertised in Europe following the requirements the OJEU legislation.
6.3Appropriate Project Management controls will be in place throughout delivery of this project. Reporting and monitoring will take place within the current Transportation Capital Programme arrangements.
Julian McLaughlin
Head of Transportation Services
Bob Jackson
Head of Financial Services
Appendix A-Comparison of Funding Options
Appendix B - Whole Life (10yr ) Car Park Maintenance
Appendix C - Pay Machine Replacement – Cost Estimate
Name and Telephone Number of Officer Contact:
Steve Tite (01202) 262020
TAG081107T3A
APPENDIX A
COMPARISON OF FUNDING OPTIONS
Note: Equipment leasing is normally considered over a 7 year period. To provide
a ‘like for like’ comparison the Prudential Borrowing illustration is shown over
this period also.
£1,013,588 paid back over 7 years:
(A) Prudential Borrowing
Based on following capital spend:-2008-09 / 675,838
2009-10 / 210,399
2010-11 / 127,351
1,013,588
£1,013,588 over 7 years
Year / Balance b/fwd / cap financing % / interest / Notional Payment / Total repayment / Balance c/fwd
£ / £ / £ / £ / £
1 / 675,838 / 5.20% / 35,144 / 137,348 / 172,492 / 538,490
2 / 748,889 / 5.20% / 38,942 / 133,550 / 172,492 / 615,339
3 / 742,690 / 5.20% / 38,620 / 133,872 / 172,492 / 608,818
4 / 608,818 / 5.20% / 31,659 / 140,833 / 172,492 / 467,985
5 / 467,985 / 5.20% / 24,335 / 148,157 / 172,492 / 319,828
6 / 319,828 / 5.20% / 16,631 / 155,861 / 172,492 / 163,967
7 / 163,967 / 5.20% / 8,526 / 163,967 / 172,493 / 0
193,857 / 1,013,588 / 1,207,445
(B) Leasing
Annual Cost
MSCP equipment / 110391 / Based on Zeag quote inc. install & commissionBased on pro-rata costs for replacement of 71
Pay and Display equipment / 50,832 / 71 no. Pay and display machines costing £301,000 based on pro rata Prudential Borrowing cost
Misc. Costs / 23,643 / Based on Prudential Borrowing of £140,000
TOTAL / £184,866 / Per annum
From the above it can be seen that Prudential Borrowing is the most cost effective
means (£172.5k per annum against £185k for leasing) of financing this project.
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