Car Parking: Fees and Charges: 2018 Increase

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A decision made 23 March 2018:

Decision Reference: MD-TR-2018-0038
Decision Summary Title:	Department for Infrastructure: Jersey Car Parking - 2018 Increases to Fees and Charges		Date of Decision Summary:	22nd March 2018
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title:	Department for Infrastructure: Jersey Car Parking - 2018 Increases to Fees and Charges		Date of Written Report:	22nd March 2018
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: The increase to the fees and charges for Jersey Car Parking for 2018 as proposed by the Department for Infrastructure.
Decision(s): The Minister approved an increase in fees and charges for Jersey Car Parking for 2018 as detailed in the attached report.
Reason(s) for Decision: Financial Direction 4.1 (paragraph 5.2) states that increases in States fees and charges should be limited to 2.5% per annum with compelling cases to be subject to the prior approval of the Minister for Treasury and Resources. A decision (MD-T-2018-0016) was signed by the Minister for Infrastructure on 13th March 2018.
Resource Implications: The additional income over and above the normal RPI(Y) increases is not shown in the Medium Term Financial Plan and will be used to offset the cost of the States of Jersey paying Parish rates, which was also not budgeted in the MTFP. There will be costs associated with advertising the increases to Jersey Car Parking fees and charges.
Action required: The Head of Decision Support to inform the Finance Director - Department for Infrastructure once this decision has been approved.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Car Parking: Fees and Charges: 2018 Increase

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Treasury and Resources

Ministerial Decision Report

Department for Infrastructure: Jersey Car Parking - 2018 Increases to Fees and Charges

Purpose of Report

To enable the Minister to approve an increase to the fees and charges for Jersey Car Parking for 2018 as proposed by the Department for Infrastructure.

Background

The use of RPI(Y) as the proxy rate to increase parking charges was a recommendation highlighted in the original report issued by PricewaterhouseCoopers and subsequently updated by BDO Alto Limited to allow Jersey Car Parking to maintain the standard of car parks over a 25 year period. The September 2017 RPI(Y) figure was 3.3%.

In addition, the impact of the States adopting the amendment to the 2018 budget proposed by the Connétable of St Helier (as amended by the Comité des Connétables) for the States to pay Parish and Island Wide Rates on States buildings has increased the annual cost base of Jersey Car Parking by an estimated £200,000. This represents approximately 3.1% of the retained income from PayCard and Season Tickets. Some parking income is remitted to the Parish of St Helier in respect of on-street and surface car parking and they will also see a benefit from this increase as it would be complex and confusing to the public to have separate rates for different streets.

In light of the above, it is proposed to restrict the RPI(Y) increase in charges this year to 2.5%, making the overall impact of the increases to unit rate charges approximately 5.1% (due to rounding down) from 3 April 2018. The usual date for increases is the first working day of February, however, the work undertaken to establish the impact of the rates charges and needing to provide sufficient lead-in time for retailers and providers to adjust charges means that additional time will be needed to implement the change in prices this year.

The new unit rate will be 78.10p (+GST of 3.9p) and the retail price will therefore be 82p per unit. It is proposed that the unit rate for an eco-permit holder will be 39.05p per unit, producing a retail price of 41p per unit once GST is added. The unit rates have been rounded down to the nearest penny after calculating the increases.

The proposed fees and charges are shown:

Charges Per Unit			Eco Permits			Standard Permits
			Unit value	GST	Sale Price	Unit value	GST	Sale Price
			pence	pence	pence	pence	pence	pence
	PayCards
		1 unit	39.05	1.95	41.00	78.10	3.91	82.00
		2 units	78.10	3.91	82.00	156.20	7.81	164.00
		4 units	156.20	7.81	164.00	312.40	15.62	328.00

	UniTickets
		5 units	195.25	9.76	205.00	390.50	19.53	410.00
		10 units	390.50	19.53	410.00	781.00	39.05	820.00

Season tickets are also proposed to be increased by a similar amount, with the retail price per month recommended to increase to £132.40 (an increase of 5.25%) for a standard permit. This represents a saving of 15% compared to parking 5 days a week for 9 hours and paying by the unit.

Charges Per Month			Eco Permits			Standard Permits
			Unit value	GST	Sale Price	Unit value	GST	Sale Price
			£	£	£	£	£	£
	Season Tickets
		Half	31.52	1.58	33.10	63.05	3.15	66.20
		Full	63.05	3.15	66.20	126.095	6.30	132.40

Parish Rates

The impact of the proposal that the States should pay Rates on its land and buildings has a significant impact on the Jersey Car Parking trading operation. As a separate trading operation it is expected to meet the costs of pay awards, inflation and other increases from its operating budget. No funding for such items is provided by the States and additional costs such as rates must therefore be passed on to the users of the services provided.

Whilst many of the car parks under the trading operation are chargeable, there are a large number of surface car parks around the Island that are free, for some or all of the year. These will still attract a rates liability, however, and it is therefore necessary to recover these costs from those spaces that are chargeable.

The Parish of St Helier is likely to receive around £170,000 in rates from the Jersey Car Parking trading operation, St Brelade around £10,000 and the remainder of the parishes between £200 - £3,000 each.

Whilst some of this will be passed back to the States of Jersey as the Island-Wide Rate, this will be retained by the Treasury. The Island Wide Rate is set with reference to the overall demand, and therefore it is expected that increasing the number of quarters by including the car parks within the total Island rateable quarters will reduce the cost of the non-domestic Island Wide Rate for all, rather than increase the remittance to the Treasury, although ultimately this decision rests with the Treasury and Comité des Connétables.

PayByPhone and PayCard / Uniticket pricing

Following the request by the Minister for Infrastructure to examine the pricing strategy between PayByPhone and PayCards, discussions with the Law Draftsman and Law Officers were undertaken to establish the viability of differential pricing. Advice received was that there was a possible age discrimination issue where depending on the up-take of smartphone technology in the older age group, it could be seen that having a lower parking charge for those using PayByPhone could be challenged as discriminatory.

The last Jersey Annual Social Survery (JASS) contained questions on use of the internet on various devices and can be analysed by age group. The results showed that internet usage on smart-phones is significantly reduced in older age-groups, particularly the over 65’s.

It has not been possible to establish the proportion of adults, by age, who have a data plan or use data services on mobile devices, which is likely to be a smaller sub-set of the question “which way do you access the internet” as some people will be using a WiFi connection to access the internet on a smartphone and not have mobile data plans.

It is therefore not recommended to set differential pricing, at this time, for PayByPhone use. Take-up of PayByPhone has surpassed all expectations and therefore it would be difficult to promote differential pricing as a way of increasing usage of the app.

Short term promotional periods may be possible, although it is recommended to check the legality of reducing the price of a unit of parking when paid by PayByPhone when the price is set in the order. It may be technically ultra vires to reduce parking prices below that set by order.

It is proposed that the increases to the Jersey Car Parking fees and charges will be effective as of 3rd April 2018 as there is a requirement for a lead-in time to allow the necessary changes to the Road Traffic (Public Parking Places – Charges) (Jersey) Order 2010 to be made and for the PayByPhone app to be updated.

3. Recommendation

The Minister is recommended to approve recommended to approve an increase in fees and charges for Jersey Car Parking for 2018 as detailed:

New standard permit unit rate of 82p
New eco-permit unit rate of 41p
New Season ticket monthly charge of £132.40 (standard permit) and £66.20 (eco-permit)

4. Reason for Decision

Financial Direction 4.1 (paragraph 5.2) states that increases in States fees and charges should be limited to 2.5% per annum with compelling cases to be subject to the prior approval of the Minister for Treasury and Resources.

A decision (MD-T-2018-0016) was signed by the Minister for Infrastructure on 13th March 2018.

5. Resource Implications

The additional income over and above the normal RPI(Y) increases is not shown in the Medium Term Financial Plan and will be used to offset the cost of the States of Jersey paying Parish rates, which was also not budgeted in the MTFP.

There will be costs associated with advertising the increases to Jersey Car Parking fees and charges.

Report author : Head of Decision Support	Document date 22nd March 2018
Quality Assurance / Review : Director of Financial Planning and Performance	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2018-0038 - DfI Jersey Car Parking 2018 Increases to fees and charges
MD Sponsor: Treasurer of the States