ESCONDIDO -- City officials said they plan to dramatically loosen parking restrictions in downtown Escondido this fall to attract more customers during the recession and to appease merchants frustrated with permit rules in downtown's seven public parking lots.

The changes, which the City Council is slated to approve next month, would also increase the cost of a monthly permit from $14 to $25 in order to eliminate a roughly $34,000 annual shortfall between permit revenue and the city's maintenance costs.

"These changes are long overdue," said Jo Ann Case, the city's economic development manager.

To make merchants happier, the number of permits issued for the city's seven lots would increase from 360 to 500 and people with permits would be eligible to park in any of the seven lots instead of having their permit be lot-specific.

The permits are prized possessions because they allow employees to park for free in the lots all day, while vehicles without permits must be moved every three hours.

To make customers happier, the new policies would make two rows of the popular lot at Maple Street and Valley Parkway reserved for customers and off-limits to people with permits.

Another new policy geared for customers is $10 all-day permits that would be sold at City Hall and the headquarters of the Downtown Business Association near Broadway and Grand Avenue.

Case said the changes had been delayed by the need to get city officials and merchants to cooperate and have the "fortitude" to make bold changes.

Councilwoman Olga Diaz, who helped craft the changes with Councilman Sam Abed and some downtown merchants, said she has been lobbying for some of the new policies for three years. Diaz has only been on the council since December, but she opened Blue Mug Coffee & Tea on Kalmia Street more than six years ago.

She predicted the new policies would be popular with both merchants and customers. She said another highlight was that the city should begin to recover the full cost of maintaining the downtown lots, something that has become a much higher priority since city revenue began to plummet when the economic downtown began a few years ago.

Abed said "cost recovery" was the main reason he supports the new policies.

"We need to start collecting enough revenue to cover expenses," said Abed. "The city should not be in the business of subsidizing parking."

Abed said he also hoped that merchants would go beyond the new policies to clear convenient spots for customers.

"Business owners and employees need to park farther away to leave spaces for customers," he said.

A 2006 study of downtown parking by a city consultant concluded that there is an adequate supply, but that the city must manage the spots better to reduce congestion.

There are about 500 total spots, but the two lots west of Broadway often get congested because their closer proximity to the heart of downtown makes them more appealing to most shoppers and many employees. Because the permits have been lot-specific, employees assigned to those lots often struggle just as hard as shoppers to find parking there.

Diaz said city officials considered parking meters and charging more for permits in lots that are more convenient, but that those ideas were eventually discarded. She said they also considered replacing the parallel parking spots on Grand Avenue with diagonal slots, but Fire Department officials complained that narrowing the road would restrict their ability to fight fires in the area.

Case said she hopes to present the policy changes to the council in August and have them take effect when fourth quarter parking permits are sold in September.

Call staff writer David Garrick at 760-740-5468.