Newport Mooring Association Report to City Council 2015-06-16

NMA Report to City Council

June 16, 2015

Presented to Newport Beach City Council

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Harbor Commission Recommendations: Fair, Reasonable and FACT based

Major Recommendations:

Set annual permit fee at $25 per linear foot – Based on 3 fair value methods

– Eliminate Marina Index – it is “apples to oranges”

2. Preserve market driven process– Allow mooring permit transfers

– Speculation is limited by transparency, frequency & number

3. Set Transfer fee at 100% of proposed annual fee– Increases revenue for the Tidelands

– Guarantees fee when mooring is transferred with the sale of vessel

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3 Measures for Annual Fees (Follows State Land Commission Guidance for Setting Fees)

Tidelands Valuation

($21 - $25)

Consumer Price Comparable Mooring Index San Diego

($21 - $31) ($25)

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$25

Fair Value Analysis(Section 1 (d) Beacon Bay Bill – no discrimination in rates)

• CPI Approach– CPI is an accepted method for adjusting fees that have been set

appropriately– Depending on the base year chosen, the rate has a range of $21 - $31,

given the other methods below, $25 is a reasonable basis

• Comparable Moorings– Current rate of $55 LF is nearly THREE times the average rate charged

in 2015 in other Southern California harbors --- most with mooring amenities superior to Newport Harbor

– A reasonable comparison is San Diego adjusted to make a fair comparison given amenities – 40’ mooring = $25

• Tidelands Valuation– Based on Rasmuson appraisal effective June 28, 2012 – relied on by

City for Residential docks & similar use – boat storage– 50 cent rate applied to area occupied by mooring and vessel on an

“exclusive use” basis results in annual fee of $21.38 – $25.434

Tidelands Valuation Example Satellite Picture of J field moorings

2034 sq.ft. for 40’ mooring @ $.50 sq. ft. per Rasmuson is $25.43 per foot

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Permit Transfers

• A market driven process serves the boating public better than a wait list

– In 5 years only one person has come forward from the waitlist to claim a mooring of the 5 available

• Transferability must be maintained to allow permit holders to recover acquisition costs paid under current transfer laws

• Concerns about profiteering have never been quantified. Harbor Commission proposal eliminates this concern.

• Mooring Transfers are not illegal … but value must be given back to the public

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Public Benefit

Mooring Permittees give back to the public in several ways:

– Annual fees paid into the Tidelands Fund are the highest of any user group for boat storage

– Vacant moorings are used by visiting boaters and the fees paid go to the Tidelands Fund

– Permittees maintain the mooring tackle to ensure the harbor is a safe haven and safe for navigation for all

– Yacht clubs sponsor races & regattas, education, youth programs and community fund raising activities

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ImpactHarbor Commission Recommendation

• Moorings remains the top contributor to the Tidelands Operating and Capital Fund compared to Commercial and Residential Piers

• Tidelands Total Contributions:– Moorings $973,329– Residential Piers $176,549– Commercial Piers $700,715

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Accounting for Tidelands Raises Questions

• Approved: $6,132,900 for the Marina portion of Marina Park is in a loan to be repaid over 14 years

– Question: In 2014 another $2.9 million was apparently expensed for Marina Park. Is there an explanation of cost? It appears that only the Marina portion was approved Feb.12, 2013.

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Budget Consistency

• “Over-market” mooring fees are not an appropriate solution for harbor budget concerns.

• NMA respectfully urges the City to avoid budget adjustments in the harbor that reflect City wide budget adjustments

Examples: – 2014 - 2015 report “Capital Improvements Program By The

Numbers” CIP Funding History– Performance Plan adjustments especially 2011 - 2013 for “all

other CIP”

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CIP Funding History 2001 - 2015(graph prepared by Public Works Dept.)

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NMA Recommendations:

• Adopt Harbor Commission recommendations for Moorings including setting the annual fee at $25 LF and allow permit transfers as proposed

• Cap CPI increases at 2% (same CPI cap as Residential Pier fees)

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