The Town of West Hartford will add the new mandated state tax to parking rates as of Feb. 1, and will also begin to charge a convenience fee for credit card transactions.
By Ronni Newton
The Town of West Hartford will be adjusting parking kiosks and signage, and as of Feb. 1, 2020, will begin a new fee structure that incorporates a newly-mandated 6.35% state tax that now applies to parking services, including self-service metered parking facilities.
Town Manager Matt Hart said parking will now cost $1.60 rather than $1.50 per hour, but the additional 10 cents will just be a pass-through to the state.
The addition of 10 cents per hour has been determined as “the most efficient way to collect this tax,” Hart said. The 6.35% tax calculates out to 9.525 cents per hour, but needs to be an even number for the kiosk and app systems.
Hart said he anticipates that the town will pay the state roughly $137,000 in additional parking taxes for FY2020 due to the new mandated tax. “We are already collecting $34,000 in permit-related parking taxes,” he said, noting that tax has been applied to parking permits for several years.
One additional change will also be made to parking costs as of Feb. 1: the charging of a 25-cent convenience fee per transaction for the use of a credit card to pay for parking. The convenience fee will apply to on-street, municipal lot, and garage parking, including the Town Hall parking lot which is not yet using a kiosk system.
The cost for the first hour, when a credit card is used directly at the kiosk, will be $1.85 ($1.60 per hour plus the 25-cent convenience fee), and then $1.60 per additional hour if more than one hour is chosen in the initial transaction. When time is added at the kiosk as a separate transaction, an 25-cent convenience fee will be charged. [Editor’s note: this has been clarified and corrected from an earlier version of this article.]
The cost of using the PassportParking app will be $2.10 for the first hour as of Feb. 1, incorporating the 10-cent tax, the 25-cent credit card convenience fee, and the existing 25-cent app fee. Parking for each additional hour will be $1.60 through the app as well.
The convenience fee will not be charged for those who pay cash. Kiosks throughout West Hartford all accept coin dollars, quarters, dimes, and nickels for street, garage, and municipal lot parking.
”When paying with coins, consumers have the flexibility of choosing a minimum of 15 minutes for on-street for 40 cents, and a 30-minute minimum in the municipal lots and garages for 80 cents,” Brook Nelson, operations manager for West Hartford Municipal Parking, said in a statement. ”Consumers can buy parking time in increments of 15-minute intervals up to two hours for on-street parking,” she continued.
Hart stressed that neither the pass-through charge of the tax nor the convenience fee for use of a credit card is a change in the parking rates – which he said have not been increased for many years.
“It’s increasingly becoming more challenging to maintain the bottom line while absorbing that fee,” Hart said of the credit card charges.
Bank fees continue to escalate, and in FY2019 the Municipal Parking Division paid $298,000 in bank fees, said Hart. Many consumers prefer using credit cards for their convenience, and those costs are expected to rise.
“Bank fees comprise the highest annual expense payable to a single vendor,” Nelson said.
West Hartford’s parking revenues go into a separate fund to cover parking-related operating costs and are not part of the town’s general fund, Hart said, something that not all residents realize. “We do need to cover our costs,” he said, and don’t want to have to rely on the general fund to cover parking-related expenditures.
Breaking out the convenience fee as a separate charge will allow the parking fund to remain viable, Hart said.
The West Hartford Center Special Services District Board and the Town Council’s Finance & Budget Committee have been discussing how to deal with the credit card charges for at least the past year. If the rates themselves were to have been increased, a vote of the Town Council and Special Services District would be required, but a consensus of both bodies was to leave the rates themselves unchanged, said Hart.
Hart said if bank fees were passed through to consumers as a change in the hourly rate, then those who pay cash would be subsidizing those who use credit cards. This way those who opt for convenience are the only ones paying the charge.
According to the town, monthly permit holders will now pay $117.24; a $110.00 base rate plus $6.99 sales tax and 25-cents for the convenience fee.
New signage will be in place by Feb. 1, Hart said.
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