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Gary Reasoner Letter to City Council on Mooring Fees

From: Gary Reasoner

Date: Sat, 6 Nov 2010 22:33:25 -0700

To: Steve Rosansky (; Ed Selich (; Michael Henn (; Nancy Gardner (; Leslie Daigle (; Don Webb (; Dave Kiff (; Keith Curry (

Subject: Follow up comments on last mooring meeting

To all concerned;

I have a few comments on our last meeting, I apologize in advance for the length, but would appreciate you taking the time to read.

In general I find the city's current approach to this issue to be of concern. To find out that no one in the current city administration has taken the time to review the mooring plan draft document, which was generated with city personnel input over three years ago was a surprise. The proposed changes do little to help solve the basic problem the city faces in harbor funding, which is the given reason for initiating the changes in the plan in the first place. I also find it disturbing that there has been no effort to contact mooring permit holders to let them know this is on the city agenda. This should not be the job of any outside organization, it is a transparency issue that the city should take seriously.

On the fee increase;

Dave Kiff spent a lot of time explaining why an increase was needed to help cover the harbor expenses. While I understand the City's need to find more funding to cover the expenses the harbor necessitates, I believe the current approach is ass backwards. The first step should be to define a reasonable description of use of the harbor and try to allocate the burden fairly across the whole user base. Mooring holders might be lowest hanging fruit but using us as the starting point it is incredibly unfair. Every boat in the harbor sits on public land, and should be taken into account for harbor funding. Promises of some sort of reduction if mooring rates are found to be too expensive at some vague point in the future is not real world, fees never come down we all know that to be true. Just by the timing of the increase mooring users will end up paying a larger and disproportionate amount of the burden.

I believe there is somewhere around 10,000 -12,000 boats in Newport Harbor, maybe more if you include dry storage. Mooring holders do not use the harbor any more than any other private boat, and less than the commercial boats plying the harbor daily, ie dinner cruise, harbor cruise, fishing party boats, whale watch cruises etc. rental boats, kayaks, and paddleboards. It would be more equitable to come up with a plan that each boat using Newport as a home port, pays a yearly fee, with commercial users/boats/renters paying a higher fee. For example, if you figure the average boat is 30 feet in length, at only $2.00 per foot per boat, per year, such a program could garner around $700,000 - $1,000,000 per year. The city should develop a plan for all boaters to equally share the burden and not piecemeal this process at the expense of the low end of the scale. Fee adjustments for private docks and moorings and city owned slips should be made at the same time.

I believe everyone agrees that a increase in mooring fees is a fair request at this time however, the increase as proposed at 150% is unreasonable and arbitrary. The 14% of current slip fees as a calculation is a number just pulled out of the air. I would argue that 5% is a more realistic number. We get no consideration from the city for dingy storage, no water, no electricity, no parking, and pay for all the maintenance. Especially in this era of a new economic reality, a rate jump of 150% will have a net effect of removing active boaters and ultimately business from the harbor. More boats off the harbor will just make the funding issues that much worse in the long run.

Any mooring fee change calculation should take into consideration other user factors, like Newport Beach residents who already pay property tax here in the city, the retired and veterans. Several veterans are on liveaboard status in the harbor. A lot mooring holders are retired individuals with limited incomes, who invested in a mooring as a low cost alternative will be forced out of the harbor.

Another complicating factor is the value of the boat, a 40' boat could be worth $200,000 or $15,000. The more expensive boat pays a lot more in unsecured property tax for the same space. How is that going to be factored into the equation?

Slip fees are typically set by the length of the boat. Are the mooring fees going to be set by the mooring length or the length of the boat on the mooring? If the former can the permit holder reduce the size of the mooring to fit the boat?

On transfer issue;

The branding of mooring holders as villains, indeed almost criminals with terms like black market, speculators etc. has no place in this discussion. When I wanted a mooring 25 years ago I went to the harbor department, asked to be put on a list and was told by city personnel that the only practical way to get a mooring was to buy a boat from current permit holder. It wasn't like this was mystery to the City, it has been and still is accepted practice, now for over 50 years. I would guess the majority of holders received permits in that manner. To at this late date completely change program is unnecessary and unfair. The current proposal to eliminate transfers after 5 years will cause great harm to all mooring holders and ultimately every citizen of Newport Beach.

The current proposal would take total combined assets of about $35,000,000, depending on how you set the value and reduce them to essentially nothing over night. The asset in question is the right to use the public space to moor a boat, that right to use has a value. I have heard the argument that this is public property and no profit should be made but, pardon the pun, that ship sailed a long time ago, with the cities blessing. For the City to suddenly come to the conclusion that this is somehow illegal or immoral at this point in time is a very disingenuous. The increase value of a mooring is a natural function of the market demand and inflation over the years.

The precedent has long been established for "the right to use public land" being transferred for a fee or sold. Is not the land under the moorings in Avalon public land? Is not the land under the thousands of cabins in the Sierra's on public land? The "right to use the land" has a value which is an asset to the holder. For the city to arbitrarily decide to eliminate transfers with no regard for the current mooring holders initial investment is nothing more than asset destruction on a huge scale. Since the city embraced and encouraged this practice they have an implied obligation to protect the value of that asset.

What the city should be concerned about is eliminating the possession and sale of moorings purely for speculation. Their are parties, ( I have been told that one entity holds now 20+ moorings), that buy moorings either to rent or hold with junk boats just for speculation. Both the Avalon mooring plan and the draft plan given to the city almost three years ago would eliminate this type of speculation. Simply put, one mooring per family, all boats must be seaworthy, do this and the market price for moorings would drop overnight without horribly damaging current mooring holders investment.

Instead of destroying the value of the moorings the city would be much better off setting a percentage of sale for a transfer fee or a set transfer fee generating a revenue stream to cover harbor expenses. Trying to legislate mooring value will increase management cost and reduce revenue. If the city is really serious about using the moorings to help cover harbor expenses put the five moorings the city has been holding in inventory for who knows how long (That was a stunning surprise, I would be very upset if I was from one to five on the waiting list!) on eBay. That will give the city some needed revenue immediately and set a fair market value.

My request to look at the Avalon mooring plan as a model, (which was flippantly blown off as not a fit because Avalon is a transient destination?), would be well worth the effort. While it might not be the perfect fit certainly there is much to be learned from their nearly 100 years of experience with mooring management. Avalon is a boaters destination, something which Newport Harbor should aspire to and could be as well. Newport has reputation as a unfriendly harbor with little to offer in the way boating amenities. If the city cultivated boaters with things like shore boats, more dock access at restaurants, visitor showers etc. the short term rental revenue from vacant moorings could be substantial, and help with harbor expenses.

Avalon embraced mooring transfers as a source of revenue for the harbor department and has a win/win relationship with mooring fee holders. The city of Avalon gets 5% of each transfer transaction, the County gets tax revenue for the mooring as non secured property, the mooring fees are low, under $200 a year. My point is not that Newport should copy the Avalon plan but could use aspects of such to develop a plan that would garner more revenue for the city while protecting current mooring holders vested interest, which is also in the best long term interest of the city.

If the city eliminates the ability for a family to pass on a mooring to the next generation of boaters it will break a long standing tradition and will be a complete disservice to the long term residents of this city.

Thanks for your consideration

Gary Reasoner

(Street address removed)

Newport Beach