Uptown Transportation Study CHAPTER 7: PARKING - OKI

Uptown Transportation StudyPart A: Uptown Transportation PlanDebt Service Coverage RatiosSolvency ratios, such as the Debt-Service Coverage Ratio (DCR), typically limit the amount thatmay be financed for a capital improvement project. Such ratios are typically used to determine theproject’s degree of debt financing and are partial indicators of the parking structure or system’sability to meet its debt obligations. These ratios reserve an amount that is available to absorb anyoperating losses.Pro forma analysis usually includes a calculation of the annual debt coverage ratio for each year ofoperation. Although most underwriters require project specific debt coverage ratios that differdepending, in part, on the perceived risk, it is common for a minimum coverage of 1.20 to 1.25 tobe required of most universities. However, this may vary by the credit worthiness of theinstitution. The required DCR varies in practice from a low of 1.10 to as high as 1.45.Higher solvency ratios indicate that an operation has a greater ability to weather changes in themarket or any other unforeseeable financial obstacles. DCRs below market expectations tend toindicate a greater degree of risk to the market. This typically results in higher interest rates for thebond issue, or may reduce the bond’s marketability.New parking improvements may be financed through increases in parking permit fees, generalstudent fees, debt, gifts, or other means. The housing bond authority has already pledged existingparking permit and fee income to bonds. Citation and fines are not pledged. A percentageincrease in parking fees or other revenue to be pledged to the project must be crafted to achieve thetarget solvency ratio. Insufficient new parking revenue will limit borrowing capacity, requiringfinancing of less than 100 percent of the project, assuming financial feasibility can bedemonstrated.7.4.5 Summary of Parking RecommendationsThe following actions are recommended to improve parking in the Uptown area:• Establish the Uptown Transportation Management Association (TMA) to help manageand market transportation and parking services in Uptown.• Implement a Travel Demand Management (TDM) program to reduce parking demandby encouraging commuting by alternative modes or by discouraging single occupantvehicle (SOV) commuting.• Consider an Uptown neighborhood parking permit program. Increasing parkingdemand in the Uptown area may necessitate more intense management of on-streetparking and make neighborhood permit parking more desirable to residents.Uptown Transportation Study 7-58 URS CorporationNovember 2006