Problems with parking funding have resulted in an upcoming proposal to increase downtown parking rates, a local official said.

"Our budget is no longer breaking even," State College Borough Assistant Manager Tom Kurtz said. "We need a combination of more customers and more revenue from the customers."

Kurtz said he is set to deliver a proposal to members of the State College Borough Council within the next three weeks that will include recommendations for increased rates around town. He would not, however, elaborate on exactly how much the rates could be increased.

The borough's most recent parking expense -- constructing the $11 million Beaver Avenue garage -- has led to a "mortgage" that the garage has failed to pay off with parking fees.

"We have to run it as a business model -- the money has to come from somewhere," Kurtz said.

Kurtz said factors that must still be analyzed are whether to raise rates for both garages and street meters, whether the garage increases should affect students with monthly passes and whether there should be additional overnight rates.

Hourly parking rates in garages were last raised in 2003 from 60 cents to 75 cents, he said. For meters on the street, the rate was increased from 75 cents to $1 per hour in early 2005.

"A reason for raising the rate would be if you're not raising the money necessary to pay back the bonds on the parking garage. That's the issue here," State College Mayor Bill Welch said.

In past years, borough parking has been self-sufficient, over time resulting in a $1 million reserve for taking care of maintenance issues, Kurtz said.

However, the borough has budgeted this year to take in about $2.2 million while paying out about $3 million, he said.

"If you have an $800,000 deficit each year, you sure can't survive on $200,000 for 2008," Kurtz said, referring to the $1 million reserve. He added that the burden for the system should not fall on taxpayers.

Kurtz said a dip over the last two years in parking patrons at the three downtown borough parking garages -- located at Fraser Street, Beaver Avenue and Pugh Street -- has only recently leveled off. The borough is just beginning to recover from that two-year decline, he said.

While Kurtz was not working for the borough when the decision was made to build the Beaver Avenue garage, he said he thinks the forecast indicated that there would be a higher demand for parking there.

"If it were used more, then there wouldn't be a problem," Borough Council member Elizabeth Goreham said, adding that she wouldn't want to see rates increased without considering other alternatives.

Kurtz said one of the reasons the borough's expectations for the garage haven't been fulfilled may be the move of many classes to west campus, such as in the Information Sciences and Technology building, which makes the garages less convenient for students.

Borough Council President Cathy Dauler said the potential for the garage has not been fully realized because an accompanying "way-finding system" for cars entering downtown has yet to be implemented.

Dauler said when the board voted to build the Beaver Avenue garage in fall 2005, a "way-finding system" was also approved that would place electronic signs at each end of town, providing real-time statistics about the number of open spots at each of the three garages.

Borough parking managers Art Caccavale and Ed Holmes are set to meet with Penn State officials this week to obtain permission to place the signs on university property along College Avenue and Beaver Avenue. Caccavale declined to comment. Holmes could not be reached for comment by press time last night.