Reading City Council considers parking budget amendment tied to Parking Authority costs

Reading City Council is considering a measure that would help the Reading Parking Authority reduce its annual debt service.

Council at its regular meeting Dec. 8 introduced a 2025 budget amendment to cover an increase in employee parking costs charged by the parking authority.

City official said the measure is tied to broader, ongoing financial negotiations between the two entities.

The amendment would increase the city’s parking expense line by $18,270 and offset the cost by reducing funding for city-wide employee training by the same amount, City Finance Director Jamar Kelly explained.

Kelly recommended approval of the amendment, citing higher payments required for employee parking.

The proposed budget adjustment comes as council continues to examine the city’s cooperative agreement with the parking authority, an arrangement that governs how parking revenues flow between the authority and the city.

During the meeting, Kelly briefed council on how the agreement was changed recently to address the authority’s long-term debt while maintaining revenue stability for the city.

The largest change to the agreement, he said, involves redirecting a portion of the authority’s annual payments to help reduce its debt service obligations.

Under the amended agreement, $511,000 would be applied annually toward the authority’s existing bond debt rather than being transferred directly to the city.

“It doesn’t change necessarily the amount of revenue being received,” Kelly said, “but rather where it’s being directed.”

The reallocation, he said, is intended to reduce financial strain on the authority while preserving its ability to maintain garages and plan future capital projects.

Council members questioned the size and history of the authority’s debt.

City administrators said they cannot be certain but put the total between $32 million and $33 million in long-term obligations, accumulated over multiple bond issuances.

Kelly emphasized that the parking authority is a separate legal entity and that specific operational questions would be better addressed by its executive director, Rafael Batista.

The amended agreement requires the authority to make the $511,000 payment beginning in 2026 and continuing each year thereafter, in addition to its required principal and interest payments.

Kelly read from the agreement, noting that the authority must provide annual proof that the additional payment was made.

“This would be in place until all scheduled principal and interest payments are fully met,” he said, adding that the approach reduces financial risk and helps the authority comply with banking covenants tied to its debt.

Council President Donna Reed raised questions about whether the city would be responsible if the authority were ever to default on its debt.

While no default is anticipated, administrators said the authority’s debt obligations would not legally fall to the city.

The term of the amended agreement also drew discussion.

City Solicitor Fred Lachat clarified that the agreement operates on three-year terms that automatically renew unless either party seeks changes.

“It’s a three-year term, but it continues to renew,” he said, explaining that any amendments at the end of a term would require council approval.

Several council members expressed concern that automatic renewals could reduce council oversight.

Lachat noted that the agreement does not automatically return to council unless one side initiates changes, prompting discussion about the need to track the renewal timeline more closely.

Kelly said the arrangement is reviewed annually as part of the city’s budget process.

“This is never lost,” he said, pointing to regular revenue reviews and audits.

The cooperative agreement was last approved by council in 2021, and the current action represents its first amendment.

Kelly said the revised structure would benefit both parties, noting that before the 2021 agreement the city often received significantly less revenue from the authority than anticipated.

Council is expected to hear a report from Batista, continue its review of parking-related finances and vote on the amendment at its next regular meeting Dec. 22.