City of Flagstaff staff and downtown business leaders on Friday outlined a plan to increase on-street parking fees and redirect a portion of revenue to fund enhanced downtown maintenance and visitor services.

The proposal would amend the citys current parking revenue rules and create an intergovernmental agreement (IGA) with the Flagstaff Downtown Business Improvement and Revitalization District (FDBIRD) and the Flagstaff Downtown Business Association (DBA) to hire a third-party provider to deliver services such as enhanced restroom maintenance, graffiti removal, alley snow clearing, pressure washing, consistent trash collection and other beautification work.

The DBA has requested roughly $500,000 annually to secure a contractor that could provide the level of service downtown business owners say they want. David McIntyre, community investment director, said staff identified a combination of funding sources that could get the program started and that ParkFlag one-time funds of about $300,000 could be used to seed an initial contract while a park rate change is noticed and adopted.

Heidi Hansen, economic vitality director, said tourism revenue (BBB) is currently down in the first quarter and staff is not yet relying on that revenue as a stable source for the program. "We are down in occupancy by 3.6 percent, our average daily rate is down 2.3 percent, and revenue per available room is down 5.8 percent," Hansen said.

The staff analysis presented a range of parking-rate options and estimated what revenues would be available to the DBA for contract work. Under the staff assumptions using 2024 parking activity, a $0.50-per-hour increase would generate about $294,000 for the DBA; a $0.75-per-hour increase would generate about $440,000; and a variable schedule (50 cents Monday–Thursday, 75 cents Friday–Sunday) would produce about $380,000. The staff proposal suggested dedicating 75 percent of the net fee increase to the downtown enhancements contract and 25 percent to ParkFlag operations and rising operating costs.

Staff also noted technical and operational issues to resolve: current cash kiosks do not accept coins (so some smaller increment changes would require equipment adjustments), and credit-card transaction fees consume a large share of current parking receipts because most transactions are small. Dave McIntyre said average transactions were about $2.08 per hour and credit-card fees have been in the 8–11 percent range, which "chews up" revenue for low-dollar transactions.

Hunter Abare, director of the DBA, and John VanLandingham, chair of FDBIRD, told council they support the concept and believe the market can bear higher rates: "If the private market is charging $4 an hour three blocks away, why are we charging a quarter of that rate on Aspen Avenue?" VanLandingham said.

Several council members said they were supportive of bringing a more detailed rate analysis and an implementation plan back to the council. Councilor Garcia urged the city to consider a higher increase so the fee change would be more durable between adjustments, while other council members emphasized the importance of showing enhanced services in place before increasing fees to build public and business support.

McIntyre said the next steps would be: 1) a detailed rate analysis by finance, 2) a 60-day public-notice period required for a fee increase, and 3) negotiation of the IGA and contract terms with FDBIRD/DBA, including payment and reporting requirements and contingency language addressing downturns in parking revenue or economic recessions.

Councilors and staff repeatedly emphasized that the business communitys backing will be critical if a rate increase is pursued. "We cannot do this without business support," Mayor and council speakers said during the discussion.

Ending: Staff will return with a detailed rate analysis and an IGA draft. Council members asked staff to pursue further outreach and public messaging to build community understanding of how the fee change would create visible downtown improvements before a final vote.