The Village of Croton-on-Hudson Financial Sustainability Committee Fee Analysis. Winter 2018

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1 The Village of Croton-on-Hudson Fee Analysis Winter

2 Croton The Village of Croton was formed in June Members of the Committee volunteered and were selected and voted on by the Village Trustees based on their experience and willingness to serve the Village. Committee members: Scott Buckhout, Aron Honig, Dan Osborne, Karen Zevin, Cristin Jacoby and Richard Zumbach. The Mission Statement of the Committee: To examine the financial health of the Village and provide periodic recommendations to the Mayor and Trustees with the objective of promoting the Village s long-term financial sustainability. 2

3 FSC Key Messages to the Village Board This analysis will show parking and water fees (the two largest revenue generating fees for Croton services) are high relative to peer groups. As prior reported, debt levels are high (FSC report on Debt, December 2016). As prior reported, expenses are growing faster than revenue (FSC report on Long Term Projections, September 2017). These three reports from the FSC suggest the Village s long-term financial sustainability is in question. FSC recommends the Village Board look for ways to reduce operating & capital expenditures. We also recommend the Village Board adhere to the debt and reserve policies. 3

4 The mayor requested the FSC review the master fee schedule Fee Analysis: Scope of Work The FSC selected the largest 2 non-property tax items which made up ~30% of total revenue in FY2017 Parking lot revenues ($3.6M/16%) Water Revenues ($2.9M, 13%) 4

5 Executive Summary Observations Recommendations Parking - Resident Permits Croton has the highest resident rates in its peer group Quarterly Rates were $166 in 2013, $191 in 2014/2015, $197 in 2016/2017, and are now $198 in Cortlandt is a reasonable competitor and costs almost half the price. North White Plains is ~10% cheaper and in a cheaper train zone. The FSC recommends a price FREEZE. Bi-annual pricing review to stay competitive The FSC believes the already high property taxes in the village, coupled with a low cost of operation is reason enough to halt price increases and shift the attention to cost reductions in other areas. Parking - Non-Resident Permits Croton is within 3% of the zone 5 average for Non-Resident pricing The FSC considers Cortlandt and North White Plains as its largest competitors for Metro-North parking revenue. Yorktown (36%), Cortlandt/Non Village Croton residents (37%), Ossining (13%) make up most of the non-resident pass memberships. Per Village Manager, the waiting list has a low conversion rate ( 20% or less ). Price freeze for 2018 & 2019 Wait for the 150+ new spots from the DPW move to monetize this parking type Parking - Daily Parking Continued transaction volume increases even with price increases suggests some elasticity of demand. Daily Rate is equal to North White Plains but significantly more than Cortlandt Manor. Daily rate price freeze to stay in-line with White Plains Raise the hourly rate to $1.25 from $1 to drive more full day purchases. Water Rates Croton has the 3rd highest price in the peer group, likely to pay down the debt to improve old infrastructure Only Ossining and Briarcliff have higher water rates Other municipalities charge higher rates for commercial entities or for high volume users Consider lower price for the average user 5

6 Parking Lot - Major Profit Center Parking Income Direct Expenses Debt Payment Profit FY17 $3.5M $0.4M $0.1M $3.0M Things to consider: There are very few towns/villages that are able to generate this much profit from their parking lots. With the purchase of a new public works building, approximately 150 new spaces will be added to the lot, allowing for more revenues and potential profits to be generated. These profits are being used to fund other operations of the village. 6

7 Parking Review of Parking Permits & Daily Parking 7

8 Observations Pricing Croton has the highest monthly resident rate of the peer group Croton is within 3% of the zone 5 average for Non-Resident pricing The considers Cortlandt and North White Plains as its largest competitors for Metro-North parking revenue. Yorktown Residents make up 36% of non-resident passes (North White is the other reasonable alternative) Cortlandt & Non-Village Croton residents make up 37% of non-resident passes (Cortlandt is the other reasonable alternative). Ossining makes up 13% of non-resident passes (likely waiting list Ossining residents). Per Village Manager, the waiting list has a low success rate ( 20% or less ) when contacted for a parking permit (411 on the list). Yorktown makes up 37%, Cortlandt/Non Village Croton make up 26%, Ossining 12%. 8

9 Summary From , the number of transactions have increased at a CAGR of 4% (134k - 186k) while revenue per transaction has increased at a 2% CAGR ($ $9.39). With the # of transactions outpacing pricing, we believe there is less pricing sensitivity with this type of parking class. Of note, 2012 and 2013 included major parking events, Hurricane Sandy (2012) and the CSX and Spuyten Duyvil Train Derailments (2013) did not seem to be affected volume growth was muted, offset by pricing increases. Cortlandt Daily Rate - $6.75, North White Plains $10 Recommendation: Follow North White Plains Pricing given the high % of people coming from Yorktown/Cortlandt. Potential to raise the hourly parking rate to $1.25 from $1.00 to optimize revenue. Daily Parking Volume vs Rev per Transaction Source: Parkmobile data 9

10 Summary With the exception of 2013, transaction volume continues to increase at least 2% per year Revenue continues to increase due to price increases and volume growth Croton - $10, Tarrytown $12, Cortlandt $6.75, North White Plains $10, Ossining $7.50 Daily Parking Annual Growth by Metric Source: Parkmobile data 10

11 Resident Parking Average Local $40.13 Average Express $45.30 North White Plains $59.68 High $64.00 Croton Low $30 Peekskill Overall Average $42.29 Zone 5 Average $

12 Resident Parking Continued Croton has the highest monthly permit price for residents in its peer group at $64 per month. Largest competitors (non-resident rates) North White Plains - $59.58 Cortlandt - $34.27 The FSC recommends a price FREEZE, and bi-annual review to allow for pricing to be in-line with at least North White Plains. The FSC believes the already high property taxes in the village, coupled with a low cost of operation is reason enough to halt price increases. 12

13 Non Resident Parking Average Local $72.67 Average Express $87.58 Zone 5 Average $99.82 High $ Chappaqua Low $34.27 Cortlandt North White Plains $59.58 Overall Average $80.13 Croton $97.00 Tarrytown $

14 Non-Resident Parking Estimated Annualized Revenue Based on % Price Increase Estimated Non-Resident Passes based on % Price Increases With 150 spots coming online soon, not sure why you would want to raise rates when the waiting list conversion rate is so low (>20%) 14

15 Non-Resident Parking - Analysis/Classifications Assignment of competition ratings High - Cortlandt, Croton, Peekskill Medium - Ossining, Putnam Valley, Cornwall Low - Yorktown Mahopac Assignment of renewal rates on the non-resident permits based on competition rating and price sensitivity Assignment of Wait List conversion to permit owner based on: Low probability of conversion based on 20% or less comment from Village Manager Based on competition location rating 15

16 Assumptions on Estimates for Non-Resident Parking Existing Non-Resident Permits Chance of Renewal Price Inc -> 2.0% 5.0% 7.5% 10.0% Waitlist Chance of Obtaining a Permit Price Inc -> 2.0% 5.0% 7.5% 10.0% High Competition 90% 80% 70% 60% High Competition 3% 2% 1% 0% Medium Competition 95% 90% 85% 80% Medium Competition 5% 4% 3% 2% Low Competition 100% 98% 96% 94% Low Competition 10% 9% 8% 7% 16

17 Water Rates Review of Water Rates 17

18 Observations Key Points Croton has 3rd highest water rate in the sample size Only Ossining and Briarcliff have higher water rates Other municipalities charge higher rates for commercial entities or for high volume users Water Rates per 100 CF Financial Sustainability Committee 18

19 Water Rates per 100 CF Benchmark Village Average $6.08 Ossining $8.26 Low $2.46 White Plains Overall Average $5.19 Croton $7.68 High Briarcliff $

20 Water Data - Low to High Town Town Type Rate per 100 CF White Plains City $2.46 Scarsdale Village $2.85 Sleepy Hollow Village $3.25 Mt. Vernon City $3.30 Mount Pleasant Town $3.65 Yonkers City $3.79 New York City City $3.81 Greenburgh Town $4.27 Harrison Town $4.45 Yorktown Town $4.68 Mamaroneck Village $4.83 Rye City $4.83 New Rochelle Town $5.01 New Castle Town $5.20 Mamaroneck Town $5.45 Tarrytown Town $6.25 Pleasantville Village $6.47 Irvington Town $6.61 Larchmont Village $6.79 Mt. Kisco Town $7.04 Croton Village $7.68 Ossining Village $8.26 Briarcliff Village $