Reading’s new agreement with the Reading Parking Authority aims to lower the authority’s long-term debt while maintaining a steady revenue stream for the city, officials said.
The agreement adopted by City Council at its regular meeting Monday replaces a 2021 contract that required the parking authority to make an annual payment of about $1.7 million to the city.
Under the newly adopted terms, that payment is reduced to roughly $1.25 million, with $511,000 each year redirected toward paying down the authority’s existing bond debt.
Authority solicitor Mahlon Boyer told council during a recent committee-of-the-whole meeting that the change is designed to shorten the lifespan of the authority’s debt and reduce interest costs, freeing up resources for reinvestment in parking infrastructure and operations.
The authority is carrying two outstanding bond balances, totaling more than $20 million.
One bond was issued to pay for improvements and upgrades to the authority’s parking garages. The second bond refinanced earlier debt associated with construction of the DoubleTree by Reading hotel parking facility, authority officials said.
As part of the agreement, the authority will continue paying its required principal and interest on the bonds, with the additional $511,000 applied to the principal. Authority Finance Director Josue Vega said that strategy would accelerate debt reduction rather than extending repayment timelines.
Vega and Rafael Batista, authority executive director, said the organization has worked to stabilize its finances in recent years through expense controls and operational changes, measures that helped reduce spending and grow revenues despite financial pressures.
“Our expenses have been controlled by 7%,” Vega said, noting that negotiations with vendors and service providers helped lower costs without cutting staff.
He also highlighted revenue growth of about 3.8% over the same period and pointed to parking ticket amnesty programs that they said saved residents money while still bringing in funds.
The measures resulted in savings of more than $320,000 for residents with outstanding tickets, he noted.
The new agreement with the city comes after several years of financial strain for the authority.
Officials noted some parking fines were lowered in 2023, reducing revenue, while a lawsuit involving UGI halted payments the utility had been making for “no parking” signage.
Despite those setbacks, authority leaders said they ended the most recent fiscal year in a positive position.
Vega told council that means you’re spending less than you’re receiving.
“We don’t want to make the same mistakes of the past,” he said.
City Auditor Maria Rodriguez asked how the redirected funds would affect the city’s budget, noting that parking authority payments are part of the general fund.
Authority officials acknowledged the city will receive less direct revenue but framed the change as a long-term investment.
Council members largely expressed support for the approach, though some asked detailed questions about the debt timeline.
Authority officials said that based on current amortization schedules the remaining debt could otherwise extend to about 2036. Applying the additional $511,000 annually in monthly installments could significantly shorten that timeframe, they said.
Applying the funds toward principal could cut roughly 10 remaining years of debt down to about six, Vega explained.
City Managing Director Jack Gombach said city administrators see the matter as an investment that will stabilize the financial position of the authority and ultimately benefit the city.
“Our view is by redirecting the payment into those debt payments, that’s more of a long-term strategic play for our financial health, instead of the short term,” he said, noting the authority is an entity of the city. “So whatever happens with the parking authority eventually happens with the city.”
The agreement also drew discussion about broader parking operations, including garage occupancy, revenue strategies and community relations.
Authority officials said they are working to increase use of underutilized garages by expanding monthly permit options and partnering with downtown employers. They also said they are open to holding community meetings to improve communication and reduce tension over parking enforcement.
City Council President Donna Reed raised questions about the difficulty of collecting unpaid parking tickets and whether changes to enforcement policies might help.
Authority officials acknowledged challenges under the current system and said enforcement changes and public education could improve compliance.
Officials said the agreement will be revisited in the future as part of ongoing financial oversight and budget discussions.