An additional 150 parking spaces may be added to Rapid City's downtown parking ramp later this year by building a third level, according to Mayor Alan Hanks.

At tonight's city council meeting, the council will talk about seeking proposals from financial advisers or underwriters to help the city with a $2 million bond sale to pay for the structure, which is south of the railroad tracks between Fifth and Sixth streets.

"I see the need for additional parking no matter what happens with the revitalizing downtown effort," Hanks said. "This is the least expensive and the quickest way to get 150 additional spots."

Hanks said the goal is to get it built sometime this fall. But first, the city must wrangle with the financing.

The city still has about $1.25 million in principal left to pay on the bonds used to build the 323-space parking ramp in 1998.

The bond for the project was initially $1.9 million, but the city refinanced in 2003 to get a better interest rate, increasing the cost to about $2.08 million.

Bond payments are scheduled through 2018. The city has a parking-lot fund generated from parking fines, meters and space rental that is used for monthly bond payments, to operate the parking enforcement system and to maintain all the city's parking lots downtown.

The city now has enough money in the parking fund - about $1.34 million at the end of 2007 - to pay off the original bond. However, the city can't call those bonds in until 2012 at the earliest.

As a result, the city is considering putting money from the parking fund into an escrow account dedicated to paying the original bonds while also bonding for the proposed new level and using new parking-space-rental income to make payments on the new bonds.

"It's set aside, and as soon as the bonds are callable, the escrow will pay the bonds off," Hanks said. "We'll issue new bonds to build the third floor. It's sort of convoluted how we get there, but investors have an expectation of return on their investment, and we understand that."

Hanks said that the city can't use the money currently in the parking fund to pay for the third level of the ramp because it is obligated to use the money for the original bond.

When the ramp was built 10 years ago, it was designed to accommodate adding a third level in the future, when there was a public demand for more parking.

That time is now, according to Hanks.

"For a couple of years after the ramp was built, there was actually occupancy. There were actually available spaces in the ramp. That hasn't been the case the last couple years," he said. "We have waiting lists for every single lot the city has."

The city requires a permit to park at the ramp. It costs $31.80 a month to park in an uncovered area and $42.40 in the covered area.

Contact Scott Aust at 394-8415 or scott.aust@rapidcityjournal.com