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Home My WebLink AboutItem 1 - HC Mooring Review - HC Staff Report aEWPORr CITY OF ms NEWPORT BEACH Harbor Commission Staff Report Agenda Item No. 1 February 11, 2015 TO: HARBOR COMMISSION FROM: Public Works Department Chris Miller, Harbor Resources Manager 949-644-3043, cmiller@newportbeachca.gov TITLE: Mooring Review—Ad Hoc Committee Formation ABSTRACT: At the January 27, 2015 City Council Study Session, staff presented a recap of the recent changes to the City's administration of the moorings, as well as the residential and commercial piers in the harbor. As a result, the City Council directed the Harbor Commission to study the moorings, and to return to the City Council with a recommended path forward. RECOMMENDATION: 1. Establish a Mooring Ad Hoc Committee to evaluate the City's current administration of the moorings, and to make recommendations to the Harbor Commission who would then forward those recommendations to the Council for consideration. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION Please see the attached PowerPoint as presented to the City Council on January 27, detailing the City's responsibilities as they relate to tidelands, as well as a summary of moorings and their administration. ENVIRONMENTAL REVIEW: Staff recommends the Harbor Commission find this action is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Mooring Review—Ad Hoc Committee Formation February 11, 2015 Page 2 NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the Harbor Commission considers the item). Submitted,by: Chris Miller Attachments: A. Mooring PowerPoint Summary i ■ Moorings in Newport Harbor Overview and Alternatives Harbor Commission February 11 , 2015 ■ Quick Background : What Are Tidelands? Tidelands (aka "Tide and Submerged Lands") are Public Trust Lands (including land under water) that are : Owned by the people of California Have oversight & management assigned (granted) to the City via specific legislation ("Beacon Bay Bill") Chapter 74 of the Statutes of 1978, as amended Trust may be revoked if not managed appropriately and fairly in the public interest We have added lands to the Trust in the past (1998-99) Also managed with respect to: CA Constitution Public Trust Doctrine City Charter and Municipal Code M1 Some Distinctions Not all waterways are Public Trust Lands, like: Some areas around Newport Island Linda Isle lagoon Dover Shores waterways Promontory Point waterways Upper Newport Bay (CA Fish and Wildlife owns) Corona del Mar State Beach, Little Corona (CA State Parks owns) More. . . Some are County-administered Public Trust Lands Harbor Patrol dock East end of Bayside Drive. . . Bayshores area, Harbor Island Sea Scout Base Almost all of the ocean beaches are Public Trust Lands Dry land can be Public Trust Land (Marina Park, parts of Beacon Bay, Balboa Bay Resort, Big Canyon Nature Park, more) i 0 1 How Tidelands Are Managed • People of California • The owners of Public Trust Lands • California State Legislature • Assigns management and operation of Public Trust Lands to City • via Beacon Bay Bill • State Lands Commission (SLC) • Oversees our compliance with Beacon Bay Bill • • SLC also manages some Public Trust Lands directly • City of Newport Beach • Manages Public Trust Lands per Beacon Bay Bill, Public Trust Doctrine, CA Constitution and Newport Beach Municipal Code City's obligation is to . . . Comply with Beacon Bay Bill , Public Trust Doctrine, and CA Constitution and NBMC, including : Where private and semi-private uses are permitted, charge Fair Market Value (FMV) for use of Public Trust Lands Not charging FMV could be considered a gift of public funds, prohibited by the California Constitution (Article XVI, Section 6): The Legislature shall have no power to. . .make any gift or authorize the making of any gift, of any public money or thing of value to any individual, municipal or other corporation whatever. Reinvest funds generated by the use of Tidelands back into the improvement, management, and upkeep of Tidelands. Tidelands Example — Peninsula r •, 2074 nenas y r •,�// .° Tidelands Pierhead Line '+ " "Private Waterways" (not Tidelands) Bulkhead Line Property Lines � � (white) I Tidelands Example — Balboa Island Boardwalk (green) • ` I_ Bulkhead Line (orange) 4 �r _ r Tidelands include boardwalk and everything bayward - ow�- .^' Pierhead Line (yellow) t ■ 1 i Overview of Recent Fee Changes Moorings (February to December 2010) Increased rental rate towards FMV, based on 14% of a market basket of marinas (2015 final year) Ended ability to sell/transfer by 2021 (can transfer 2x before that) Commercial Piers (February to November 2012) Increased rental rate towards FMV (5 years to go) Adopted a Lease Template Residential Piers (Fall 2012 to December 2013) Increased rental rate towards FMV (3 years to go — would be $0.525/SF) Defined a footprint in 2012, then reduced it in 2013 Set forth a paper permit Amended it in 2013 to allow long-term permit Made renting legal, but small marina rate charged (to 13 properties) Public Moorings �� •r a /Ilt _ Y : An<h ge NMYC e -` ` -6� BYC % X14 Public Moorings More affordable than marinas, but less convenient. Today, every mooring has a permittee assigned . Not all permittees have boats — a good thing (decreases derelicts). Off-Shore Public Moorings Quantity: 539 "Single" & "Double-Point" moorings "G" & "HP" fields are County moorings (approx. 22) On-Shore Public Moorings Quantity: 439 Vessels 18' and under Balboa Island, Lido Isle, Peninsula street ends Transfers Pre-2011 Permits bought/sold via private market Unlimited transfers Wait List never moved No transfer fee OC Grand Jury in 2007 criticized City's management of the moorings 2011 — Present Until 2021 : (2) transfers per public mooring After 2021 : No transfers allowed (except to immediate family) If permittee surrenders public mooring permit: Returns to City City reimburses mooring tackle value City offers to next person on wait list Transfer fee required (Note: Wait list hasn't moved yet, but could after 2021) Current Fees • 14% of average, moderate, Newport slip rates ("Basket") Ardell, Bayside Village, Harbor Marina, Lido Yacht Anchorage, Newport Dunes, Newport Marina, Port Calypso (published rates) Consistent with 2007 Grand Jury Report recommendation that: (mooring permits need to be) fair market value . . .e.g., based on a % of slip Off-Shore On-Shore % of Basket 1996-2010 $20/ft/yr $10/ft/yr N/A 2011 $26.52 $13.26 7. 1 % 2012 $30.71 $15.36 8.8% 2013 $38.73 $19.37 10.5% 2014 $47.64 $23.82 12.3% 2015 $55.43 $27.71 14.0% (Final Step) Example for 40' vessel: 2015 yearly offshore mooring rate = $2,217 per year (plus maintenance costs —$350) 2015 yearly marina slip rate (average basket) _ $15,835 per year ($32.99 per foot per month) i Short-Term Mooring Rentals The OC Harbor Patrol makes vacant moorings available to others/transient boats. Five guest slips available at HP Dock - $40/night Guest moorings: Rates are- $16/night November - April $26/night May — October Generates about $60K - $80K per year Funds raised go to Harbor Capital Fund (special fund created within the Tidelands fund to segregate 2010-2012 increased rates — for harbor improvements) The "Avalon Approach " Quantity: 362 moorings ( 14' to 100) Ownership: By individuals who annually maintain mooring . Fee: $8.76/LF/year (NB's is $55.43/LF/year [proposed 2015]) Nightly Rentals: $41 /night Demand : Very high . 70' moorings have sold for $1 million in the past. Transfers: Unlimited. City receives 5% of transfer price. 00121111111111111 The "Avalon Approach " ( pt 2 ) May trigger a possessory interest (P. I . tax) — unlike NB Moorings are destination moorings — unlike NB Generally not a boat storage location — unlike NB Lower $ rate in Avalon has some logic: Boats not stored on the moorings. Rental revenue is a supplemental City income stream. Rentals of vacant moorings in Avalon may make up or exceed rental revenue difference ($8/LF v $55/LF) from NB. In NB, mooring rate priced between the cost of dry storage and slip storage, as moorings more convenient than dry but less convenient than slip. If council would like us to look more at an Avalon-style transfer system, we should research the issue further. . .. FYI . . . o Mooring Master Plan Subcommittee & Harbor Commission recommended : 1 . Allow 1 mooring transfer per year, per individual (no other limit) Should Tidelands Fund get a share of the transfer value? 2. Maximum 2 moorings allowed per person (except marine contractors and current permittees with >2) 3. Surrendered moorings go to sealed-bid auction 4. Sunset Wait List after years ■ ■ Straw Votes - Moorings ( 1 ) Keep the current system or (2) consider a change? If consider a change . . . Change rate (up to _% of market basket of marinas) or Change rate method (besides tying to this market basket)? Change transfer procedures to allow regular transfers? Consider an Avalon-like system? Include a fee for transfers? Any change to the allocation of overnight rental revenue? i For More Information Chris Miller Harbor Manager cmiller(cnewportbeachca.gov Shannon Levin Harbor Analyst shannon((.newportbeachca .gov