The Memorial Union Parking Ramp has seen a steady rise in annual revenue in recent years.
In fiscal year 2024, the MU made more than $794,000 from its parking ramp, an increase from 2023, when the amount was more than $788,000.
Despite the increase in revenue, the MU has raised permit prices over the past three years. The most significant increase occurred from FY 2023 to FY 2024, where permit fees were increased by an average of 7%.
Permit fees over the past two years saw an increase of 3%. Actual revenue totals for FY 2025 have not yet been made public, but total revenue is estimated to be $834,000.
In addition to permits, the MU makes revenue by providing hourly ramp parking to non-permit holders.
Hourly rates have remained unchanged since FY 2022. The last time hourly rates were increased, they were raised by more than 16%.
Brad Hill, associate director for operations of the MU, said that despite steady price increases, the MU’s permit costs are competitive with other institutions.
“Even with recent increases, our rates remain competitive,” Hill said. “A 24-hour reserve space on campus costs $1,180 annually, while the Memorial Union ramp permit is $700.”
To ensure fairness, Hill said that the MU will compare parking rates with other universities and cities when determining pricing.
“We benchmark rates against peer institutions with similar student populations and parking structures, as well as against parking rates in cities such as Des Moines, Iowa City, Madison and Minneapolis,” Hill said.
In addition to competitiveness, permit pricing at the MU is influenced by demand, staffing and maintenance requirements.
“The parking ramp, built in the 1960s, requires ongoing upkeep and modernization,” Hill said. “For example, the ramp’s driving surface requires a special coating that costs $500,000 to replace. While this is not an annual expense, we must allocate funds for such major projects.”
Large capital projects like coating the ramp’s driving surface are funded by the MU’s reserve accounts.
Reserve funds are obtained through net income, which is calculated after the MU’s total revenue is subtracted from the amount of expenses that fund staff wages and equipment.
Hill said that a portion of the net income is allocated towards the reserve fund, which will be used to replenish and eventually replace the existing parking structure.
“A portion of the revenue is allocated to reserves dedicated to the maintenance, improvement and eventual replacement of the parking ramp structure,” Hill said. “A share of this revenue supports the ongoing operations, enhancements and life cycle needs of the entire Memorial Union of which the parking ramp is an integral component.”
After all expenses were accounted for in FY 2024, the ramp made a net income of more than $656,000.
During FY 2024, the MU spent $20,000 on funding improvements from reserves. The funding from reserves is set to spike in the next two years. An estimated $300,000 will be spent on capital projects in FY 2025, and an estimated figure of more than $200,000 is projected for FY 2026.
According to the Iowa Board of Regents, increased reserve spending and additional revenue from permit increases will be used to fund maintenance requests and projects, future capital renewals and complete a 5-year Parking Ramp Condition Assessment.
Hill said that the MU’s lucrative reserve fund allows it to keep parking costs at a competitive rate and prevents them from increasing prices even more.
“These funds ensure that we can maintain and modernize the facility without sudden, significant rate changes,” Hill said.
Despite steady revenue gains and a well-funded reserve account, parking rate holders have seen significant price increases over the past three years.
Hill said that the increases are necessary for long-term maintenance, but future price changes will be dependent on the stability of the ramp’s aging structure.
