| Newport Study Recommends Mooring and Dock Fee Increases |
| By: Ambrosia Sarabia | Wednesday, December 24, 2008 12:00:00 AM |
| Last updated: Thursday, January 15, 2009 4:45:00 PM |
Moorings, transfers, commercial-use tideland and private dock permit fees may all rise significantly.
NEWPORT BEACH – Boaters, waterfront homeowners and businesses that use tidelands for boat moorings, docks, piers or commercial uses were alerted that they may be hit with major fee increases if city officials adopt new appraisal recommendations presented at a Newport Beach City Council Finance Committee meeting Dec. 16.
Increases are proposed for mooring transfer fees, annual mooring fees and permit fees associated with residential piers and commercial piers.
“Do we have a sense of the magnitude here of what the totality of these appraisal-based changes might be?” asked Councilman Michael Henn, when the recommended increases were presented to the committee.
For those residing and operating a business on state tidelands, the possibility of increasing fees is thought to have a major, unwanted impact.
“You are talking about raising money again where there is not going to be any more work, if there is (legally protected) eelgrass there,” said Pete Swift, a resident and business owner in the harbor, who said he spent more than $70,000 in 2007 to obtain permits from the city. “This is one more slap in the face.”
The new report, “Financing Improvements to Tidelands and Services in the City of Newport Beach,” was based on an Economic Analysis Report by DeShazo and Hanemann, an appraisal report by Netzer and Associates, and a Cost of Service Report by MAXIMUS Inc. The report was created with the intention of providing needed reforms in the city’s current tideland revenue collection procedures.
One of those procedures, the city’s long-allowed process for transferring harbor moorings from one boater to another, has been the subject of local criticism, since it seemingly allows a boat seller to “sell” a coveted city-owned mooring spot at a high price, when it is transferred along with the boat.
The report stated that the planned improvements in tideland services considered during the 2007 joint session of the Newport Beach City Council and Harbor Commission will not be possible under the city’s current revenue-gathering strategies for these tidelands.
Planned improvements to the existing tideland services include: efforts to maintain and improve navigability in the harbor, changes to mooring fields, expansion of public docks, adding storage areas for smaller vessels, providing more short-term moorings and adding visitor guest docks. Council members and commissioners also agreed that a rehabilitation plan for Upper Newport Bay is also needed.
Other fiscal challenges that the city faces for its tidelands include the planned dredging project in Lower Newport Bay, expected to cost $12 million to $15 million; completion of the Upper Newport Bay dredging project, for which the city is short $16 million; issues related to protecting environmentally sensitive eelgrass in the harbor; maintaining the city’s Regional General Permit and toxic pollutant Total Maximum Daily Loads (TMDL) requirements; and the possibility that the costs of harbor patrol services could be shifted from the county to the city in the year ahead.
In order to generate the revenue needed to fund harbor improvements, significant changes in tideland fees and rental policies will need to be put in place, the report concluded. The report recommended that the city increase its tidelands fees to cover indirect and direct costs of providing services to residents and businesses on the tidelands, and that the city seek an increased portion of the “privately captured public benefits” that are generated by its management of the tidelands.
During the 2006-2007 study, researchers determined that the city spends more than $21 million annually providing services, and it receives in more than $8 million in tideland-related fees over $8 million a year. To cover the current tideland costs, the city requires $13 million a year from the general fund, since the present tidelands fees do not cover the tideland costs.
The state tideland grant requires that revenues, directly or indirectly attributable to the tidelands, return to management of the tidelands. Many speakers at the meeting argued that the revenue was not being correctly allocated to the tidelands.
Mark Sites, a business owner in the city, discussed his experiences in the harbor committee 10 years ago, and his investigation into how the tideland funds were being allocated. Through his review, Sites said, he discovered that revenues were misallocated.
“Our concern is that all Newport tidelands users are going to be overcharged by the city in the name of recovering costs, when in reality they’re pulling money out of the tidelands for general fund expenses,” Sites said. “That’s not supposed to happen under the city’s tidelands grant.”
City council members Leslie Daigle, Keith Curry and Henn agreed that the fees should be tied to harbor improvements.
“I think it should be somehow contractually or legally tied to spending for improvements, so that people have comfort of knowing the next city council couldn’t capriciously decide to spend that (revenue) on something else,” Henn said.
Several residents who spoke at the meeting told council members that the harbor cost of services study findings were incorrect, since the study had been based on an outdated Cost Allocation Plan. They called the study report was “unprofessional” and “adversarial” in tone.
Bill Moses, a resident and member of Tideland Users Group (TUG) addressed concerns that the study did not attribute other direct and indirect revenues linked to the tidelands -- including unsecured property tax, sales tax and bed tax revenue.
Benefits to the general public were also not quantified, in comparison to the associated costs, Moses added.
For example, the study recommends requiring private pier owners who rent to third parties to pay 20 percent of the gross -- and those not renting their private piers would be asked to pay $18 per lineal foot per year. Those who own property on the water and have control of the uplands should be charged 27 percent of gross, or 22 percent of gross if the owner does not have control of the uplands, the report said.
Currently, the city charges a commercial operation linked to the uplands 35 cents per square foot annually.
“We need to be careful how we differentiate commercial uses, and how we look at that,” Curry said.
The study valued moorings at $7.25 per lineal foot of the boat attached to it, per month; and established the rate for a mooring transfer at $475 or $1,000 per lineal foot. The cost differences depend on whether the mooring is inshore or offshore.
Current fees for an offshore mooring stand at $20 per lineal foot, per year. If the appraisal recommendations are adopted, the cost would jump to $87 per lineal foot, per year.
Additionally, the study discussed implementation of a “beneficiary pays principal” plan, in which those who benefit from public amenities and services should pay the bulk of the cost.
“I have a great deal of difficulty with that,” Henn said. “This essence of this city is based upon the harbor and upper bay and the beach … Virtually all property owners in this city benefit from the natural amenities and the maintenance of those amenities, to a greater and lesser extent.”
City staff agreed to look into the concerns voiced by the public, the council and committee members. They will return to the committee after meeting with the Harbor Commission to determine a “priority list” for the harbor and a funding plan for the proposed fee adjustments.
This article first appeared in the December 2008 issue of The Log Newspaper. All or parts of the information contained in this article might be outdated. |
