Sometime in the not-too-distant future, a visitor to downtown Palo Alto could be asked to pay for a scarce and coveted resource that for decades has been offered for free: a parking spot.

In the heart of downtown, around University and Hamilton avenues, parking meters would be installed next to every parking spot. In the more peripheral areas, along Lytton and Forest avenues, pay stations at both ends of each block would receive visitors' parking fees.

Parkers would pay with credit cards or via their phones; parking enforcers would cruise around with license plate readers; pricing incentives would replace time restrictions at downtown garages; and no one will talk about the "lime" and "coral" zones anymore.

That's the vision being offered by the city's newly released Downtown Parking Management Study, a long-awaited document that could spell a dramatic shift in downtown's parking policies. The City Council will review the document on Tuesday.

If the new vision is adopted, the city's existing parking system by which downtown is divided into four color zones, with three-hour parking limits in each zone, would be abolished. Instead, the area would be split into tiers, with parking in the more central area costing more than along the more distant blocks.

The recommendation to adopt paid parking is hardly surprising. In recent years, City Manager James Keene and planning staff have often talked about the need to charge for parking. Last December, during a council discussion of a new downtown garage, Keene alluded to the impending downtown parking study and said he is "absolutely certain the recommendation we'll be making is a shift to paid parking."

The new report from the Department of Planning and Community Environment, which commissioned consultant Dixon Resources Unlimited to conduct the study, reaffirms this position. Given the council's approval, within a few years, paid parking is expected to start generating net revenues, which the city could use to support the fledgling Palo Alto Transportation Management Association, a nonprofit charged with reducing the percentage of downtown employees who drive to work alone.

The nonprofit, city staff wrote, has been "implementing pilot programs testing incentives that could encourage commuters to leave their cars at home." A stable funding stream could allow the group to "scale the successful pilot programs to reach more people," the report states.

"Staff believes paid parking holds great promise as a more up-to-date approach to parking management for a vibrant commercial district than the current 'coral zone' time-restriction system and would provide a potential funding source for transportation-demand-management solutions to address the root cause of parking problems and traffic congestion," the report states.

The three-tiered system would create different rates for on-street meters. Prices would vary between $1.50 and $2.50 per hour, with the highest rates reserved for those meters in the core of downtown, a region labeled as Tier 1. The goal of the varied parking rates, the study states, is to ensure sufficient turnover, such that areas are generally 80 to 85 percent full, an industry ideal.

"This will make parking a more convenient experience for downtown visitors and may also reduce congestion from drivers circling for a parking space," the study states.

The study also recommends that the city actively monitor downtown's parking levels over time, possibly with the help of parking-space sensors, and adjust both on- and off-street parking rates accordingly. If an area that is now 80 percent parked up sees an increase, prices could be increased by 25 cents per hour to encourage turnover. Conversely, if parking spaces are now more than 80 percent filled, and then that level falls, prices could be reduced by 25 cents to encourage more parking. If the city were to use time limits for different areas, parking limits could be adjusted up or down by 30 minutes as an incentive.

For those looking to stay longer, the city's garages or parking lots may prove to be a cheaper option. Unlike today, parking would neither be free nor limited to two or three hours. Instead, visitors would be able to park for four hours at a rate of $1 per hour. After that, the rate would shoot up to $2 for every 15 minutes, a pricing strategy meant to encourage vehicle turnover and discourage long-term parking for those without permits.

Dixon's recommendations were informed by extensive parking-occupancy surveys, conducted during three different periods (May, September and October) and during four times of the day (morning, afternoon, mid-afternoon and evening). The data was used to determine which blocks had the highest occupancy and, as such, warranted the highest rates. The study area was bounded by Lytton Avenue to the north, Webster Avenue to the east, Forest Avenue to the south and Alma Street to the west; it does not include downtown's residential neighborhoods, which are governed by the recently implemented Residential Preferential Parking program.

The surveys indicated, among other things, that the vast majority of drivers follow downtown's color-zone rules, and a relatively small proportion of them (between 6 and 8 percent) jump between multiple color zones to extend their stay downtown.

"While the number may not seem significant, there are still a few hundred vehicles hopping between color zones throughout the day, causing further congestion and impacting parking availability," the study states.

Though city staff may be bullish about paid parking, not all of downtown's denizens are. As part of Dixon's outreach, it found that some business owners have "expressed their concern that paid parking may discourage people from visiting downtown because there are other nearby shopping destinations with free parking."

"While this may be true for some consumers, there is a segment of the population that may be more likely to go downtown and pay for parking if it means that parking is easier and quicker to find," the study states. "It is important to recognize that parking is a limited and expensive resource, especially in a vibrant downtown like Palo Alto, and paid parking can help maximize this resource through strategic rate structure and technology enhancements."

This isn't the first time concerns over competition have clashed with parking policy. The city previously installed parking meters downtown in 1947 to raise revenue, but it took down all 880 of them in 1974 in response to growing competition from Stanford Shopping Center, according to Ward Winslow's book "Palo Alto: A Centennial History."