Parking fund pressure prompts Keene to consider $2 garage spaces

City officials say the proposal is meant to help offset revenue losses tied to downtown construction.

Keene may soon add as many as 50 hourly parking spaces in the Wells Garage off Railroad Street after the City Council advanced an ordinance Thursday aimed at easing strain on the parking fund. The change would allow some permit-only spots on the first level to be sold for $2 an hour while keeping access for existing permit holders.

City officials say the proposal is meant to help offset revenue losses tied to downtown construction and the city’s temporary free-parking policy in Central Square and on Main Street. Deputy City Manager Rebecca Landry said the added hourly spaces would not cover the full shortfall, but would still help.

The idea now moves to the City Council’s Finance, Organization and Personnel Committee, which is scheduled to meet Thursday and will take public comment. Landry said the city regularly reviews parking demand, though permit spaces have not been converted to hourly use very often in recent years.

Parking Manager Chelsea North said the garage’s lower level contains 97 spaces, with 45 currently permitted. She estimated the extra hourly parking could generate about $127,000 a year, depending on how often the spaces are occupied.

The parking fund is already facing a decline. A spreadsheet shows the department expects to lose nearly $99,000 from September through December because of downtown construction and free parking. If free parking is extended again during the 2027 April through November construction period, the projected loss rises to about $195,000 when construction effects are included. Construction alone was estimated to cut revenue by about $21,000 between September and December.

The parking operation relies on meter income, permits, tickets and fines rather than property taxes, and that money is used to maintain city-owned lots and garages. The fund has been operating in the red and has drawn on its reserve balance, while lower income and higher maintenance costs have added to the pressure.

Last month, council members approved free parking in Central Square and on Main Street through Dec. 31 to encourage downtown dining and shopping during the infrastructure project. Business owners had reported slower sales since work began over the summer.

Landry said the department will study the effect of the free-parking change and bring an update to the council early next year. She also noted that earlier budget discussions included the possibility of broader parking rate increases to protect the fund’s remaining balance.