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HomeMy WebLinkAbout14 - Grand Jury Response to Newport Harbor MooringsCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 14 July 24, 2007 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Robin Clauson, City Attorney, 949 - 644 -3131 rclausonCa.city. newport- beach.ca.us Dave Kiff, Assistant City Manager, 949 -644 -3002 dkiff(a )city. newport- beach.ca.us SUBJECT: Grand Jury Response to the Report "Newport Harbor Moorings: Are They Held in the Public Trust or for Private Profit ?" ISSUE: The Orange County Grand Jury conducted an investigation of mooring management in Newport Harbor and produced a report with a series of findings and recommendations that require a response from three County Departments and the City of Newport Beach. Should the Newport Beach City Council authorize the Mayor to transmit the attached response to the Grand Jury report? RECOMMENDATION: Authorize the Mayor to transmit the attached response to the Grand Jury findings and recommendations regarding a Newport Harbor mooring investigation to the Presiding Judge of the Grand Jury and the Grand Jury Foreman. DISCUSSION: Background. Harbor Resources prepared a CIP budget request item in FY 2004/2005 that was approved by City Council which recognized that there were issues with the mooring layout and mooring administration that need to be resolved. A consultant scope of work was prepared and presented to the Harbor Commission for advisement. The Harbor Commission recommended that it could form a subcommittee and complete the much needed analyses at no cost to the City. The Mooring Masterplan Subcommittee was formulated and for approximately two years has performed an excellent job of developing evaluation criteria and evaluating the layout and effective operation of each individual mooring area. The subcommittee performed outreach with all of the Lower Newport Bay user groups and potentially affected local residents. The subcommittee has recommended revisions to the mooring Grand Jury Response to the Report "Newport Harbor Moorings. Are They Held in the Public Trust or for Private Profit ?" July 24, 2007 Page 2 areas which have been approved by the Harbor Commission and will be presented to the City Council and appropriate federal agencies for consideration in a separate action. The subcommittee has also begun review of the administration of the moorings and has worked on the administration of shore moorings and tackled the very difficult topic of mooring transferability. The subcommittee will continue to review and recommend revisions to the Municipal Code, County Ordinances, and informal procedures. When a complete package of recommended Municipal Code revisions is complete, Harbor Resources will present the recommendations of the Subcommittee to the Harbor Commission and the City Council for consideration. The Grand Jury Investigation During this mooring review effort, the 2006 -2007 Orange County Grand Jury became interested and produced the attached report entitled "Newport Harbor Moorings: Are They Held in the Public Trust or for Private Profit ?" In the summary of the report, the Grand Jury states that "The process of transferring public moorings permits has been usurped... Now is the time to end this situation and reinstate proper regulations and procedures." Revision of the regulations and procedures was the Mooring Masterplan Subcommittee's goal prior to the Grand Jury report and is a continuing effort. The Grand Jury report provides a series of findings and recommendations, many of which, according to California Penal Code 933 and 933.05, require the response from the Mayor of the City of Newport Beach. Attached is a recommended response document. For informational purposes to the Harbor Commission and City Council, also attached, is a document, in a similar format, which provides background information that describes the issues and why the Harbor Commission and its subcommittee recommend the responses in the required document. A Required Response Response to the Presiding Judge of the Superior Court is required by August 8, 2007. The Harbor Commission reviewed the draft response at the June 13 and July 11 meetings and recommended transmittal of the attached draft to the City Council for consideration. Environmental Review: All tasks fall under the information gathering class of projects and are therefore categorically exempt pursuant to CEQA Guidelines, Article 19, Section 15306. Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). Grand Jury Response to the Report "Newport Harbor Moorings., Are They Held in the Public Trust or for Private Profit ?" July 24, 2007 Page 3 Funding Availability: NIA Alternatives: Request time extension from the Presiding Judge and revise response. Prepared by: Submitted by: Robin Clauson, City Attorney Dave Kiff, Assistanl City Manager Attachments: Grand Jury Report Grand Jury Response Transmittal Cover Letter Background Response Supplemental Information - ;k 2006 -2007 ORANGE COUNTY GRAND JURY NEWPORT HARBOR MOORINGS:-ARE THEY HELD IN THE PUBLIC TRUST OR FOR PRIVATE PROFIT? SUMMARY Thousands of private dollars are involved in the transfer of boat mooring permits in Newport Harbor, although they are located on publicly owned California State Tidelands. The Harbor Patrol manages a waiting Est for people seeking mooring permits, but rarely do any become available. Moorings are at a premium and most of those on the Est have been waiting for years, if not decades, and the Est is not updated on a regular basis. The mooring "permittee" and the vessel on that mooring must be registered to the same individual. Selling a mooring is illegal, but a loophole exists whereby a mooring permit holder may sell the boat on that mooring, and the vessel's new owner is then able to transfer the mooring permit into his or her own name. Over the years this has developed into a fine art, with small and /or derelict boats selling at vastly inflated prices. Brokers may be involved, although they are not fisted anywhere in the paperwork. "Moorings for sale" listings may be found on the intemet or in newspapers. The new vessel purchaser pays an "advisor" (broker) with cash or check to be walked through the process of vessel purchase and mooring transfer in the Harbor Patrol Office. A different vessel, as long as it is registered to the same new owner, may then be moved onto the mooring. The process of transferring public moorings permits has been usurped. Fortunately, both city and county ordinances and state statutes contain powerful tools to be used against diluting these assets. Nov is the time to end this situation and reinstate proper regulations and procedures. REASON FOR INVESTIGATION The purpose of this report is to research and review the policies and procedures involved in the transfer of the public moorings located in Newport Harbor and to investigate whether private profits are being made from these transactions. METHOD OF INVESTIGATION Research the moorings in Newport Harbor to ascertain: • what they are and who owns them; • their perceived and actual value; • the procedures for their transfer; • whether these procedures are being properly followed; and • the roles of the agencies involved in this process. Analyze and report on the results of the information gathered through interviews, material references, and internet websites. BACKGROUND AND FACTS Tidelands: When California became a state on September 9, 1850, it acquired the nearly four million acres of land underlying its waterways. Known as "Sovereign Lands," these are held in public trust under the principle that navigable waters are preserved for the public use and that the state is responsible for protecting the public's right to that use. In 1919 the State granted the City of Newport Beach the management of the trust of Newport Bay including LL 2006 -2007 ORANGE COUNTY GRAND JURY the tidelands and submerged lands located within its municipality; this grant was approved and renewed most recently in 1987. At the same time (1919), the State also granted the County of Orange a trust to manage "that portion of tidelands and submerged lands bordering upon and under Newport Bay outside the corporate limits of the city of Newport Beach;" this grant was most recently renewed in 1975. Thus, both the City of Newport Beach and the County of Orange assumed the duties of the State. The City works with the County through (1) the Harbor Patrol and (2) the Department of Harbors, Beaches, and Parks. Newoort Bav Tidelands Man i s - YldfdllN3Y$Yrvly. WX ;:.,.. PACIFIC OCEAN Newport Harbor: Newport Harbor is a jewel in the crown of Orange County. Covering 800 acres, or 1.25 square miles, it includes seven islands and is considered one of the finest small boat harbors in the world. Although primarily residential, the Harbor contains extensive commercial and charter activity, waterfront businesses, public anchorage and public launching facilities, and approximately 9,900 permanent vessels. These are located at 1,230 piers, 2,330 slips, and approximately 1,235 moorings. There are residential and private docks, public docks, and a public marina. Maintaining a vessel on a mooring has traditionally been less expensive than in a marina or dry storage. Moorings: There are 11 specially designated offshore mooring areas, which must be reached by boat, distributed throughout the bay above specified sovereign tidelands /submerged lands. Within these areas are approximately 800 offshore moorings, each consisting of a single or double floating buoy that is secured to the Harbor bottom by an anchor system, which is not carried aboard the vessel when underway, but rather remains in the mooring C 2006 -2007 ORANGE COUNTY GRAND JURY area. The buoy is attached through a chain to ground tackle, which is the equipment used to anchor the entire system securely to the seafloor. Additionally, there are approximately, 400 onshore moorings, located along the waterfront. Onshore moorings are for small boats of up to 18 feet and are located in the near shore perimeter of the Harbor and its islands, perpendicular to the shoreline. One end of the mooring line is attached to a point on or adjacent to the bulkhead, a retaining wall that separates dry land areas and water areas, and the other end is attached to a mooring buoy located in the water. Yacht Club Moorings: Current City ordinances specify that only individuals may hold mooring permits; however, two private yacht clubs in the Harbor hold mooring permits: the fast currently maintains 100 offshore moorings and the second maintains 75.. There are several theories as to how this came about, none of which are documented. Originally there was not much demand for offshore moorings, they had no value, and the areas designated for them were open water. At some point residents simply asked the Harbor Master for permission to place moorings near their homes. Once a mooring permit was acquired, buoys were installed and the areas began to develop. Along this same line, sometime between the 1920's and 1940's, the areas in front of the two yacht clubs were given over to them for rental to their members or others. Thus, they also acquired and installed moorings. Some club members also acquired individual permits in these areas; however, over time the clubs absorbed them through permit transfers. There are still a few permits in individual member's names. Offshore Mooring Equipment and Boundaries: The mooring equipment (weights, tackle, and chain) is owned by the permittee; all of it must be "checked" (pulled up and weighed) every two years. The value of the equipment is $1,000 to $1,500 and the cost of this type of inspection is $400 to $600 each time it occurs. Several private mooring contractor companies handle this process with the vessel owner. Expansion of the mooring area boundaries has occurred over the years during these procedures as the equipment is pulled up for review and then set down. The mooring areas now extend beyond the lines originally established by the Army Corps of Engineers and the City of Newport Beach through a letter of agreement in 1941. At this time, there is a review underway by the City to either reestablish the original lines or legitimize and codify their expansion by adjusting the new mooring boundaries to the current expanded settings. r.. �(, 1 Gr �.� 2006 -2007 ORANGE COUNTY GRAND JURY Slips: A slip is a berth where the boat has a finger, or thin pier, on one side and either another finger or adjacent boat on the other side. A side tie is a berth where the dock is alongside only one side of the boat. The cost of residential slips is hard to pinpoint because they are owned privately, are located in front of homes, and are not supposed to rent to the public. Marina sizes in the Harbor vary from ten to approximately 400 slips. Shp charges vary from $18 per linear foot per month at public marinas (e.g., the Balboa Yacht Basin) to $42 per linear foot per month charged at commercial slips (e.g., the Irvine Company). The Irvine Company charges more per foot for large boats and raises their fees until they achieve a 5% vacancy rate, which is one way of establishing a fair market value and could also be used by the public sector. In the public marina the vessel owner has a slip lease as opposed to a permit, the trigger for the turnover of a slip is the sale of its vessel, the slip cannot transfer, and new owners have a maximum of six months but then must vacate the vessel from the slip; the waiting Est is followed in order. Currently, slips are difficult to get and there is a domino effect on the price of a mooring pemvt. The supply and demand of finding a place to put a boat runs in cycles. A mooring permit did not have value two decades ago and the moorings were considered a graveyard. However, supply and demand has been more of a problem in the last seven to eight years. At this time, slips can have a two to three year waiting Est. The demand for moorings follows the curve of the slips because they are more difficult to reach and maintain. As locating a vessel anywhere in the Harbor becomes more of a premium, it is changing the perception that the class of boat kept in each location is different; those on moorings were considered second class citizens, but the prestige of locating a boat on a mooring has increased along with its perceived value. City of Newport Beach: The elective officers of the City consist of a City Council of seven members nominated from each of seven districts and elected from each district by the voters of the City at large for alternate and successive four -year terms. They meet twice each month to review, direct, and legislate on matters of land use, finance, and general governance. Council members also serve on committees, including some with other community members, to review specialized areas and make recommendations to the full City Council. The Harbor Commission was established in January of 2002 as a citizen advisory body to the City Council in all matters pertaining to the Harbor, the Committee then formed a Mooring Master Plan subcommittee in January of 2005. The City Council sets the policy and code for moorings and has a cooperative agreement with the County, which has its own set of ordinances covering their 25 revenue generating moorings which are located in county tidelands. The County funds the Harbor Patrol, which manages all of the moorings in the Harbor, according to City policy. At this time, the Harbor Commission and City are reviewing Title (or Chapter) 17 of the City Municipal Code, which covers Harbor Regulations, because the code is not consistent with the procedures currently in use. This makes the enforcement of mooring regulations difficult for the City and the Harbor Patrol. In an effort to change this situation, a rewrite of this section is currently underway and will be presented to the City Council for their vote. The City Managers Office carries out all City policies. Harbor Resources is the division of the City Managers Office that manages Newport Beach city issues concerning Newport Harbor. They give staff support to the Harbor Commission and one of their functions includes advisement on tidelands administration. 4 2006 -2007 ORANGE COUNTY GRAND JURY County of Orange: The following is an excerpt from the 2004 -2005 Orange County Grand Jury report, Harbors, Beaches, and Parks: Riches to Rags ?: In the mid- 1930's, Orange County voters approved the redevelopment of Newport Harbor as a small craft harbor. The Orange County Harbor District (OCHD) was created, and the Orange County Board of Supervisors was its governing board. The special district was established under and is governed by the California State Harbors and Navigation (H&N) Code, which provides for formation, governance, management, and financing powers of such districts. From time to time over the years, the H&N code was amended to enable changes in the structure of the original OCHD and to expand services for which district funds could be expended. County Code Sec. 2 -2 -90 regarding Mooring and Buoy Permits states, " Any permit issued hereunder constitutes a privilege to use part of a limited water area for mooring purposes only and is not transferable." In Orange County, the Harbors, Beaches and Parks division (HBP) of the Resources and Development Management Department (RDMD) manages the regional park system. In 1989, following the recommendation of the RDMD -HBP, the Board of Supervisors entered into a Joint Powers Agreement with the City of Newport Beach to define the method of administration of the moorings in Newport Harbor. Under its continuing terms, the City establishes the mooring permit rates, collects the money for all moorings in the harbor, and remits to the County the money collected on their 25 moorings. The County then provides the Sheriffs Harbor Patrol to manage a full range of services to Newport Harbor that the City funds, including the administration and above water inspection services of all moorings. In 2006 the amount that the City paid to the County for these Harbor Patrol services was $97,091. The original agreement has been extended by amendment four times, most recently on January 23, 2007, with the current two-year extension running until December 31, 2008. Harbor Patrol: The Harbor Patrol Division (HP) of the Orange County Sheriff - Coroner Department (OCSD) shares the mission and goals set forth by County's RDMD -HBP to (1) provide opportunities for people to safely learn, relax, recreate and interact and (2) preserve and protect Orange County natural areas and open space habitats. They do this in Newport Harbor by maintaining relationships with the County, the City of Newport Beach, and the public. In addition to their mooring duties, the Harbor Patrol are first responders to all safety issues on the water involving law enforcement, fire fighting, environmental protection, and rescue services. 40 deputy sheriffs cover 24 hour operations 365 days a year at all three Orange County Harbors: Newport, Sunset /Huntington, and Dana Point. They maintain a total of six fireboats and seven patrol boats, two of which are in Newport Harbor, located at an Administration and Management Office along with the RDMD -HBP Coastal Operations, and have the ability to immediately respond to any problems. Mooring Fees and Regulations: Mooring permit fees were last set by a resolution of the Newport Beach City Council in 1995 as "equivalent to the fair market value for the use of said tidelands" and are due on February first of each year. The City Council has the right to change the annual fee at any time; however, annual charges currently remain at the 1995 rates with offshore permit fees of $20 per linear foot per year and onshore permit fees of N n 2006 -2007 ORANGE COUNTY GRAND JURY $10 per linear foot per year. At this time, the Master Fee Schedule is being reviewed by the City's Revenue Department. This appraisal covers fees involving all commercial property doing business on the waterfront and is in the last of three phases studying the costs of services. An economist is reviewing what fees are appropriate and a final report will be presented to the City Council. The County requires independent appraisals to update fee schedules and 10 to 20 years ago attempted to significantly raise their mooring permit fees; however, after public outcry, the Board of Supervisors elected to defer to City terms. Mooring regulations are set by the City, managed by the Harbor Patrol, and include but are not limited to: • telephone numbers and addresses of all mooring permittees, which must be up -to- date at all times through the Harbor Patrol Office; • vessels on moorings, which must be registered to the permit holder and assigned to the mooring permit through the Harbor Patrol; and • vacant moorings, which may not occur for a period longer than 90 days. Instructions for Mooring Permit Transfer: Whenever a person wishes to cancel his or her mooring permit for re- issuance to another person, it is permissible to do so within the following parameters: • the mooring equipment and vessel currently assigned to that mooring must be sold to the same person; • the mooring permit can be held in the name of one (1) person only, the permit cannot be placed in a corporate name; and • anyone wishing to transfer a mooring permit must contact the Sheriff's Harbor Patrol Mooring Department to set an appointment. Derelict or Abandoned Vessels: In addition to being an eyesore, derelict or abandoned vessels impede navigation, leak pollutants, and destroy natural habitats. The state commissioned a task force to review the abandoned vessel problem and recommend ways to reduce them. AB 716, which went into effect on January 1, 2006, includes these codified findings: • reduce from 90 to 60 days the maximum waiting period prior to the sale of an unclaimed wrecked vessel; • authorize authorities to remove a vessel found or operated upon a waterway with a registration expiration date in excess of one year; and • require that any abandoned or wrecked vessel must have an appraised value of less than $2,000 (that value was previously $1,500) before being sold or disposed of by a public agency. Tax Implications: In California, transfers of tangible personal property, such as a vessel, for consideration (sales and purchases) are subject to sales tax or use tax. Generally, in Orange County, only boats valued over $100,000 are considered real property and receive a Vessel Property Statement. The true and /or perceived value of an annual mooring permit is another matter. The California constitution allows the State and local governments to levy a 7 2006 -2007 ORANGE COUNTY GRAND JURY tax on a private individual or company that has possession ( "occupies" and "controls') or exclusive use of government -owned tax - exempt public property. This is called a possessory interest tax and is well established in California law. In Orange County, the Orange County Assessor Department (OCAD) is authorized to make official valuations for the purposes of taxation and to determine the rate or amount to charge or levy. This involves defining (1) what is to be taxed, (2) who is the owner, owners, or permit user (their names and addresses), and (3) what is the value of the item, or its fair market price in a free market. The State and /or local municipality determines the tax rate within its own area, which in Newport Beach is currently 1.25% to 1.33 %. OCAD has a stated policy on taxes on moorings, boat slips and tie downs (which includes pilots who rent hangars and tiedown spaces for their aircraft from publicly owned airports). The private use of public property is taxable under certain conditions. According to OCAD, they perform annual on -site inspections of all marinas and moorings in the county and "If a resident rents or leases a mooring, boat slip or tie down from a city or the county, they may receive a property tax assessment if: • the facility is owned by a government agency; • the right to use government -owned property is independent, durable and exclusive; and • the user is not a government agency." While there is a possessory interest tax assessed on some private and commercial slips and marinas, others instead receive a higher assessed valuation of their property tax because of their waterfront location. This is further complicated because some of the property fines include docks and some include bulkheads. Currently, there is no possessory interest tax assessed on the use of moorings in Orange County with the exception of the Yacht Clubs, which control multiple moorings. The Assessor Department last reviewed the moorings approximately 15 years ago and at that time the value of the moorings fell below the Orange County Minimum Value Ordinance of $1,350. For these and other low value items tax bills are not issued. Since the annual permit fee of an offshore mooring for a 30 -foot vessel has not changed in nine and a half years, it maintains an assessed value of approximately $600; presently this mooring permit would continue to fall under the minimum value ordinance and a tax bill would not be issued. Moorin_e Permit Procedures in Other Areas San Diego: The Port of San Diego had a derelict vessel problem and decided to outsource their contract management. The San Diego Mooring Company is a private company that rents and maintains the 437 moorings located throughout San Diego Bay. There are four different mooring areas with rates ranging from $123 to $152 per month, depending on location in the Harbor. Currently, moorings are non - transferable and there is a waiting fist. Catalina: Within the harbor at Avalon, the City of Avalon Harbor Department manages the moorings; outside moorings are managed by Two Harbors Enterprises (THE), a subsidiary of the Santa Catalina Island Company, and the Harbor Patrol. The Catalina Island Conservancy approached the State Lands Commission to help control mooring transfers 2006 -2007 ORANGE COUNTY GRAND JURY outside the Harbor. They established a value for these permits by permitting a policy of one more private transfer by each current owner. The next transfer would go to the Conservancy, after which the mooring would then be added to a controlled fist. This is politically appealing because all parties know what is going to happen; the current owner can step down the price and the future owner knows that his or her next transfer will lose value. Santa Barbara: Santa Barbara Harbor had a problem with abandoned vessels and in April of 2006, the City Council cleared out their mooring field through Ordinance No. 5386 and Resolution No. 06 -027, and established a lottery for mooring permits. There is a $250 annual city permit fee, all permits have been filled, and new permit holders are in the process of bringing in their own mooring equipment. Mooring permits are non - transferable and currently there is no waiting fist. CONCLUSION The protection of public funds, privileges, and rights is the number one rule of the public servant. Vigilance must be maintained not to grant these away. Fortunately, laws and codes contain powerful tools to be used against diluting these assets. In 1974, the Orange County Grand Jury reported on the extent of private encroachments onto public lands. Following this report, the Board of Supervisors, through the County Executive Officer, examined county real estate and found, among other areas, the private use of public lands in Sunset Beach and tidelands encroachment on Harbor Island. The problem was addressed through both an encroachment abatement program and /or revocable encroachment permits. The gift of public funds should involve full and fair compensation. Tangible, real property assets are generally transferable. What is on the books? What is not? The County requires independent appraisals to update fee schedules. Fair market rent should be charged. In the case of mooring permit fees and their transfers, the money collected from the tidelands can only be spent on the tidelands. The money collected belongs to the public to make the quality of fife better and more effective. In this case it could go, among other things, toward dredging in the Harbor or water clean up. Additionally, equitable public access to a reinvigorated mooring waiting fist could and should be achieved through the reinstatement of proper protocol and procedures on behalf of the people of Orange County. In accordance with California Penal Code sections 933 and 933.05, each finding will be responded to by the government entity to which it is addressed. The responses are to be submitted to the Presiding Judge of the Superior Court. The 2006 -2007 Orange County Grand Jury has arrived at the following findings: F -1. Private profits are being made from the current procedures used in transferring the mooring permits located on the public tidelands in Newport Harbor. Because the mooring equipment and the vessel currently assigned to that mooring must be sold to the same person, when a vessel on a mooring is sold, the new owner transfers that mooring permit into his or her name, rather than vacating the mooring and allowing the waiting fist to proceed in order. 2006 -2007 ORANGE COUNTY GRAND JURY F -2. The offshore mooring areas now extend beyond the lines originally established by the United States Army Corps of Engineers in 1941. F -3. Certain procedures adopted by the Newport Beach City Council regarding mooring permits are not enforceable because they are not included in the City's Municipal Code. F -4. The last assessment of the fair market value of mooring permit fees took place almost ten years ago. F -5. Although a mooring permit can be held in the name of one (1) person only and the permit cannot be placed in a company name, exceptions have been made for certain private yacht clubs. Additionally, vessels and moorings are now registered in family trusts. After a principal's death, the intent of a trust is to follow the vessel; however, there is an unjustified perception that this also includes the mooring permit. F -6. The County (1) follows State statutes and regulations concerning mooring and buoy permits and (2) along with the City of Newport Beach shares financial responsibility for funding the Harbor Patrol to provide management services; however, the County performs no oversight of the City's regulations and procedures on a regular basis. F -7. The Harbor Patrol follows the regulations and procedures set down by the City; however, they have begun re- enforcing certain, but not all, regulations, e.g., the derelict boat rule is being enforced but abandoned moorings are allowed. The result of this is that the harbor now seems cleaner; however, permittees are allowed to maintain moorings without vessels. F -8. The mooring waiting list has not been reviewed or updated for years. F -9. The majority of the current mooring permit fees fall below the Orange County Minimum Value Ordinance. Responses to Findings F -1, F -2, F -3, F -4, F -5, F -7, and F -8 are required from the Mayor of the City of Newport Beach. Responses to Findings F -1 and F -6 are requited from the Orange County Board of Supervisors. Responses to Findings F -7 and F -8 are requited from the Orange County Sheriff - Coronet and Harbor Patrol. A Response to Finding F -9 is required from the Orange County Assessor. RECOMMENDATIONS In accordance with California Penal Code sections 933 and 933.05, each recommendation will be responded to by the government entity to which it is addressed. The responses are to 10 2006 -2007 ORANGE COUNTY GRAND JURY be submitted to the Presiding Judge of the Superior Court Based on the findings of this report, the 2006 -2007 Orange County Grand Jury makes the following recommendations: R -1. Tighten the regulations and procedures involved with Newport Harbor mooring permits and their transfers to ensure that all monies received which rightly belong to the public, stay within the public arena. R -2. Consider public access to available moorings through adopting a more effective waiting Est R -3. Reestablish the original mooring boundaries. R -4. Independently analyze and reestablish the City's Municipal Code concerning the Harbor Regulations on moorings; have new procedures match corrected regulations rather than codifying, without review, what has become embedded as established practice. R -5. Review the Municipal Code on a regular basis to be sure that it incorporates the revised ordinances and procedures to allow uniform enforcement R -6. Establish a regularly scheduled independent appraisal for the fair market value of mooring permit fees, e.g., based on a percentage of the cost of a slip. R -7. Review the inclusion of yacht clubs and trusts as mooring permittees. R -8. The City of Newport Beach and the County of Orange should review their ordinances to make sure that they are consistent with each other. R -9. Review and update the mooring waiting Est. R -10. The Assessor Department should coordinate with the city to review the value of mooring permit fees on a regular basis to see if they rise above the Orange County Minimum Value Ordinance. Responses to Recommendations R -1 through R -9 are required from the Mayor of the City of Newport Beach. Responses to Recommendations R -1, R -2, R -6, R -8, and R -9 are required from the Orange County Board of Supervisors. Responses to Recommendations R -5 and R -9 are required from the Orange County Sheriff - Coroner Harbor Patrol. A Response to Recommendation R -10 is required from the Orange County Assessor. 2006 -2007 ORANGE COUNTY GRAND JURY REOUIRED RESPONSES: The California Penal Code specifies the required permissible responses to the findings and recommendations contained in this report. The specific sections are quoted below: §933.05(a) For purposes of subdivision (b) of Section 933, as to each grand jury finding, the responding person or entity shall indicate one of the following: (1) The respondent agrees with the finding. (2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefor. (b) For purposes of subdivision (b) of Section 933, as to each grand jury recommendation, the responding person or entity shall report one of the following actions: (1) The recommendation has been implemented, with a summary regarding the implemented action. (2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. (3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefor. GLOSSARY OF TERMS: From the City of Newport Beach Harbor Code Regulations Bulkhead Or seawall is the retaining wall that separates dry land areas and water areas. Ground Tackle: All equipment used for mooring or anchoring a vessel securely to the seafloor. Minimum Value Ordinance: Low value items for which tax bills are not issued, which in Orange County is $1,350. Mooring: A device consisting of a floating buoy or other object that is secured to the Harbor bottom by an anchor system for purposes of securing a vessel. A mooring is an appliance used to secure a vessel, other than to a pier, which is not carried aboard such vessel as regular equipment when underway. Mooring Area An area designated for a group of moorings. Offshore Mooring: A single or double buoy, weight and chain installed for the purpose of berthing a vessel. Pier. Any fixed or floating structure for securing vessels, loading or unloading persons or property, or providing access to the water. Pierhead Line: The harbor water area perimeter lines established in Newport Harbor by the federal government that define the permitted limit of fixed pier, floating dock and other in- water structures which may be constructed in the Harbor. The Pierhead line typically shall define the limit of pier and floating dock structures and defines the limit of construction. Vessels may extend channelward of the Pierhead line. 12 ,c 2006 -2007 ORANGE COUNTY GRAND JURY Public Trust Lands. All lands subject to the Common Law Public Trust for commerce, navigation, fisheries, recreation, and other public purposes — including tidelands, submerged lands, the beds of navigable lakes and rivers, and historic tidelands and submerged lands that are presently filled or reclaimed and which were subject to the Public Trust at any time. California Code of Regulations, Section 13577 (1978). Public Trust Lands. Can only be used for public purposes consistent with provisions of the Public Trust such as fishing, water dependent commerce and navigation, ecological preservation and scientific study. Shore Mooring: A mooring for small boats that are located in the nearshore perimeter of the Harbor and its islands, perpendicular to the shoreline. One end of the mooring line is attached to a point on or adjacent to the bulkhead, and the other end is attached to a mooring buoy located in the water, inside the Pierhead Line. Side Tie. A berth where the dock is alongside only one side of the boat. Slip: A slip is a berth where the boat has a finger on one side and either another finger or adjacent boat on the other side. Sovereign Lands: Land underlying the State's navigable and tidal waterways including the beds of (1) more than 120 rivers, streams and sloughs (2) nearly 40 non -tidal navigable lakes, such as lake Tahoe and Clear Lake, (3) the tidal navigable bays and lagoons, and (4) the tide and submerged lands adjacent to the entire coast and offshore islands of the State from the mean high tide fine to three nautical miles offshore — equal in size to Connecticut and Delaware combined, and managed by the Calfomia State lands Comrnission. Tidelands. Lands that are located between the fines of mean high tide and mean low tide (from California Code of Regulations, Section 13577). 1. California: defined by historical mean high tide from 1850 a. Above or uplands may be private b. Below are owned by public 2. Newport Beach and Orange County a. Defined in 1919 b. While operated by the harbor, these tidelands belong to all of the people, with exceptions granted through specific legislation Vessek Watercraft used or capable of being used as a means of transportation on water — except seaplane and mechanically fixed. Vessel owner. Owner of the vessel as shown on current registration with the Department of Motor Vehicles or the United States Coast Guard. 13 Grand Jury Report "Newport Harbor Moorings: Are They Held in the Public Trust or Private Profit ?,, RESPONSES TO FINDINGS F-1. Private profits are being made from the current procedures used in transferring the mooring permits located on the public tidelands in Newport Harbor. Because the mooring equipment and the vessel currently assigned to that mooring must be sold to the same person, when a vessel on a mooring is sold, the new owner transfers that mooring permit into his or her name, rather than vacating the mooring and allowing the waiting list to proceed in order. Response: Disagree Partially: The City recognizes that the availability of a mooring can enhance the sale price of a boat when the market demand for moorings is high; however, there has been no economic analysis to establish whether or not private profits are being made. There is no requirement that a boat must be sold along with its mooring equipment and its mooring permit. A waiting list for moorings is being reviewed in conjunction with proposed revisions to the municipal code. F-2. The offshore mooring areas now extend beyond the lines originally established by the United States Army Corps of Engineers in 1941. Response: Disagree Partially: The current mooring areas are necessarily different than those established by the Corps of Engineers 66 years ago. The recently proposed realignment of mooring areas is consistent with safe navigation, the maintenance of open waterways, and the public interest, as are the current mooring areas. 1, 2 F•3. Certain procedures adopted by the Newport Beach City Council regarding mooring permits are not enforceable because they are not included in the City's Municipal Code. Response: Disagree Partially: Regulations related to moorings are found in Chapter 17.22 of the Municipal Code and are enforceable. A review of City Council Policies and Municipal Code is currently underway and elements of the policies that require enforcement will be drafted into the code. F -4. The last assessment of the fair market value of mooring permit fees took place almost ten years ago. Response: Agree: A study of mooring permit fees is currently under way. F-5. Although a mooring permit can be held in the name of one (1) person only and the permit cannot be placed in a company name, exceptions have been made for certain private yacht clubs. Additionally, vessels and moorings are now registered in family trusts. After a principal's death, the intent of a trust is to follow the vessel, however, there is an unjustified perception that this also includes the mooring permit Response: Disagree Partially: The City has determined that the public benefits from the long- standing administration of certain mooring areas in Newport Harbor by the designated yacht clubs. These moorings and the clubs that administer them are a consistently reliable resource for visiting cruising vessels. While vessels may be owned or registered in the name of a family trust, the mooring permit will only be issued to a single individual who is also trustee of the family trust. As to vessels registered through family trusts, there is no requirement or authority for a mooring to be transferred with vessel pursuant to the terms of a trust. Further, a trust that purports to restrict a living permit holder's ability to transfer a mooring would be disregarded by the City. F -6. The County (1) follows State statutes and regulations concerning mooring and buoy permits and (2) along with the City of Newport Beach shares financial responsibility for funding the Harbor Patrol to provide management services; however, the County performs no oversight of the City's regulations and procedures on a regular basis. Response: No response required from the City. However, the City would offer some clarification of the finding. The City ownership of the Harbor is derived from State of California legislation granting tide and submerged lands to the City of Newport Beach. As such City has Jurisdiction to enact its own laws and policies for regulations and procedures concerning moorings and buoy permits on City Tidelands and has contracted with the County to provide mooring administration services for which the City contributes financial support. F -7. The Harbor Patrol follows the regulations and procedures set down by the City; however, they have begun re- enforcing certain, but not all, regulations, e.g., the derelict boat rule is being enforced but abandoned moorings are allowed. The result of this is that the harbor now seems cleaner, however, permittees are allowed to maintain moorings without vessels. Response: Disagree partially: The City strives for consistent enforcement of regulations and procedures. Progress in removing derelict boats has been significant, and will continue. Abandoned moorings are not allowed. Abandoned moorings revert to the City or to the County. Vacant but properly maintained moorings are allowed, and are available for rent to the public. F -8. The mooring waiting list has not been reviewed or updated for years. Response: Agree: Management of a mooring waiting list is being reviewed in conjunction with proposed revisions to the municipal code. R, rd F -9. The majority of the current mooring permit fees fall below the Orange County Minimum Value Ordinance. Response: No response from the City is required. RESPONSES TO RECOMMENDATIONS R -1. Tighten the regulations and procedures involved with Newport Harbor mooring permits and their transfers to ensure that all monies received which rightly belong to the public, stay within the public arena. Response: The recommendation requires further analysis and a proposed implementation plan will be submitted to the City Council for consideration by November, 2007. Transfer fees will be adjusted, if necessary to appropriately protect the public interest, while at the same time maintaining the accessibility and affordability of moorings to all boaters. R -2. Consider public access to available moorings through adopting a more effective waiting list Response: The recommendation requires further analysis and a proposed plan to address public access to moorings will be submitted to the City Council for consideration by November, 2007. Management of a mooring waiting list is being reviewed in conjunction with proposed revisions to the municipal code, including longer term rentals of vacant moorings. m R -3. Reestablish the original mooring boundaries. Response: The recommendation will not be implemented. Mooring boundaries consistent with safe navigation and the public interest have been proposed for consideration by the appropriate federal agencies. "Original' mooring boundaries established 66 years ago are neither practical nor consistent with safe navigation. The current mooring areas and the proposed realigned mooring areas do not occupy a greater portion of the harbor than the "original' mooring areas. R -4. Independently analyze and reestablish the City's Municipal Code concerning the Harbor Regulations on moorings; have new procedures match corrected regulations rather than codifying, without review, what has become embedded as established practice. Response: The recommendation requires further analysis and a proposed implementation plan will be submitted to the City Council for consideration by November, 2007. Title 17 of the municipal code is currently under review by the City. The City of Newport Beach strives for consistency in the drafting, implementation and enforcement of all codes, ordinances, regulations and procedures. R -5. Review the Municipal Code on a regular basis to be sure that it incorporates the revised ordinances and procedures to allow uniform enforcement. Response: The recommendation has been implemented. The City continually reviews the Municipal Code on a regular basis, as needed. R -6. Establish a regularly scheduled independent appraisal for the fair market value of mooring permit fees, e.g., based on a percentage of the cost of a slip. Response: The recommendation will be implemented and a proposed revision will be presented to the City Council for consideration by November 2007. An analysis of mooring permit fees utilizing relevant methodologies is underway. R -7. Review the inclusion of yacht clubs and trusts as mooring permittees. Response: The recommendation will be implemented and a proposed revision will be presented to the City Council for consideration by November 2007. The inclusion of yacht clubs and trusts as permittees will be presented to the City Council for review. R -8. The City of Newport Beach and the County of Orange should review their ordinances to make sure that they are consistent with each other. Response: The recommendation has been implemented. The City and the County will continue to review their ordinances for consistency as necessary. R -9. Review and update the mooring waiting list. Response: The recommendation will be Implemented and a proposed revision will be presented to the City Council for consideration by November 2007. Management of a mooring waiting list is being reviewed in conjunction with proposed revisions to the municipal code. R -10. The Assessor Department should coordinate with the city to review the value of mooring permit fees on a regular basis to see if they rise above the Orange County Minimum Value Ordinance. Response: No response from the City is required. n� CITY OF NEWPORT BEACH OFFICE OF THE MAYOR Mayor July 24, 2007 Steven Rosansky Mayor Pro Tem Edward D. Selich Council Members Keith D. Curry Leslie J. Daigle Mike Penn, Foreman Nancy Gardner Orange County Grand Jury Michael F. Henn 700 Civic Center Drive West Don Webb Santa Ana, CA 92702 Subject: Response to Orange County Grand Jury Report, "Newport Harbor Moorings: Are They Held in the Public Trust or for Private Profit ?" May, 2007 Dear Mr. Penn: Per your request and in accordance with California Penal Code §933 and §933.05, enclosed please find my response to the FY 06 -07 Grand Jury Report. If you have any questions, please contact Assistant City Manager Dave Kiff at (949) 644 -3002 or City Attorney Robin Clauson at (949) 644- 3131. Respectfully, STEVEN ROSANSKY Mayor cc: Nancy Wieben Stock, Presiding Judge, OC Superior Court City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach California 92658 -8915 • www.city.newport- beach.ca.us (949) 644 -3004 CITY OF NEWPORT BEACH OFFICE OF THE MAYOR Mayor 'r July 24, 2007 Steven Rosansky Mayor Pro Tem Edward D. Selich Council Members Keith D. Curry Leslie J. Daigle Honorable Nancy Wieben Stock Nancy Gardner Presiding Judge of the Superior Court of California Michael F. Henn 700 Civic Center Drive West Don Webb Santa Ana, CA 92702 Subject: Response to Orange County Grand Jury Report, "Newport Harbor Moorings: Are They Held in the Public Trust or for Private Profit ?" May, 2007 Dear Judge Stock: Per your request and in accordance with California Penal Code §933 and §933.05, enclosed please find my response to the FY 06 -07 Grand Jury Report. If you have any questions, please contact Assistant City Manager Dave Kiff at (949) 644 -3002 or City Attorney Robin Clauson at (949) 644- 3131. Respectfully, STEVEN ROSANSKY Mayor cc: Mike Penn, Foreman Orange County Grand Jury City Hall • 3300 Newport Boulevard • Post Office Box 1768 Newport Beach Califomia 92658 -8915 • www.city.newport- beach.ca.us (949) 644 -3004 -� u Background Response Support Information Grand Jury Report "Newport Harbor Moorings: Are They Held in the Public Trust or Private Profit ?n 1-1. Private profits are being made from the current procedures used in transferring the mooring permits located on the public tidelands in Newport Harbor. Because the mooring equipment and the vessel currently assigned to that mooring must be sold to the same person, when a vessel on a mooring is sold, the new owner transfers that mooring permit into his or her name, rather than vacating the mooring and allowing the waiting list to proceed in order. Background: Over several decades, moorings have evolved from a no -value and no- demand way of berthing vessels in Newport Harbor to a critical means of providing vessel berthing at a reasonable cost. In April 1935, advertisements placed by the Chamber of Commerce ran in the publication Pacific Skipperto entice yacht owners to come to Newport Harbor. The advertisement stated "pay no rent to the City for mooring space if you maintain a private mooring." In fact, the recently adopted Local Coastal Program Land Use Plan states, as a policy, that the City of Newport Beach should "Continue to provide shore moorings and offshore moorings as an important source of low -cost public access to the water and harbor." When the Municipal Code related to moorings was formulated, several decades in the past, it was not foreseen that a mooring permit would evolve such that there was value associated with the possession of the mooring permit. An example cited in the Grand Jury Report documents that Catalina Island moorings also have a value associated with the mooring permit. In cooperation with the State Lands Commission, the Catalina Island Conservancy developed a method for transferring a mooring permit while maintaining the concept that a mooring permit has value and that the tidelands should derive a monetary benefit from the transfer of a mooring permit. In addition, Section 10 -2.210 of the City of Avalon Municipal Code states: "Unless otherwise provided in the permit, -, c transfers of revocable permits pursuant to which permittees are assigned and hold mooring spaces in Avalon Harbor, shall be permissible provided: (a) The purchaser pays to the City a transfer fee as set by resolution of the City Council." A subcommittee of the City of Newport Beach's Harbor Commission has investigated mooring administration practices locally and elsewhere in the State and has developed a proposed revision (see attached) to Section 17.22.080 of the Municipal Code. This proposed revision to the Municipal Code also recognizes that a mooring permit has evolved to have an associated value and proposes a means for the tidelands to benefit from the transfer of a mooring permit. Even in 1952, a mooring in the "C" field was reportedly transferred at a resulting net cost to the transferee of $85, which was significant at the time. What has been lacking for decades is a means in which the Newport Tidelands benefit monetarily from the transfer of a mooring permit. The City Council will soon consider this proposed revision to the Municipal Code which is intended to be fair and equitable to all of the parties involved and at the same time provide for adjusted tidelands use fees that will assist in funding harbor maintenance projects. Today, in Newport Harbor as well as elsewhere in the State, the intelligent order in which to become a boat owner is to find a berth or mooring first, and then buy the boat. The City is aware that boats sold with moorings have more value than those sold without a mooring or slip. A boat owner /permit holder is not required to transfer the mooring permit with the sale of a boat on the mooring; however, a majority of the people choose to follow this process. The City, through its Harbor Commission, Harbor Resources Department, and the citizenry is in the process of recommending to City Council an appropriate transfer fee for mooring permit and is reviewing the functionality and practicality of a wait list as it impacts low -cost public access to moorings in Newport Harbor. F -2. The offshore mooring areas now extend beyond the lines originally established by the United States Army Corps of Engineers in 1941. Background: Relatively new technology has provided the ability to overlay aerial photography and historical mooring area delineations to a high degree of accuracy (approximately 3 feet). As a result, the City of Newport Beach found that many moorings were not within the delineated areas. A Harbor Commission Subcommittee was formed to determine the most appropriate way to deal with the situation. a4, A study was proposed due to concerns of the Newport Beach Harbor Resources Department and City officials regarding the potential legal and safety issues related to the fact that many moorings in Newport Harbor are situated outside the boundaries as seen on navigational charts. Early investigation and analysis revealed that the majority of these fields have never been completely used as charted, but have evolved to reflect the way the harbor has historically functioned. It was found that if the moorings were placed within the charted boundaries, then the present use of the harbor would be disrupted for many of the boater and residential uses. The ability to re -state the charted boundaries was researched. Meetings with Gerry Wheaton, West Coast Regional Manager of NOAA, Office of Coast Survey, resulted in understanding that the boundaries are under the authority of The Code of Federal Regulations, and can indeed be re -drawn with the city going through proper procedures and receiving approval of the US Coast Guard. NOAA can then incorporate the new boundaries on all subsequent charts, and inform the boating public through notices to Mariners. The subcommittee established criteria for evaluating the current boundary conditions and has recommended changes that consider all of the various beneficial uses of the harbor. All the mooring fields and their collective role in the function of Newport Harbor were then assessed. Subsequently each field was separately studied in depth. Through extensive outreach, the needs and desires of stakeholders (boaters, Harbor Department, USCG, bay front residents and businesses, charter boat operators, mooring permit holders, Christmas Boat Parade organizers, yacht clubs, etc.) were considered. Evaluation of the ease and safety of navigation in varied conditions was studied with the aid of the Orange County Sheriffs Harbor Patrol. The subcommittee undertook a practical and theoretical study of the mechanics of mooring gear and its relation to boat size, tides, currents and wind to develop a system of mooring spacing. Aerial views of each field with pierhead and bulkhead measurements provided by the City GIS Dept. helped to improve the accuracy and sophistication of these studies. It was then possible to delineate new boundaries that provide an improvement over the present positioning and avoid the multiple serious problems that would occur with attempting to utilize the original boundaries (i.e. rendering piers on the Southwest end of Lido Isle unusable, encroaching on the navigation space of the Coast Guard Cutter, interfere with navigation in the area of the Island Ferry, force nti CI change in navigation patterns around the Harbor thus adversely affecting recreational boating and water activities). The Harbor Commission has approved the subcommittee's findings and recommended changes. The Subcommittee is currently working with the federal agencies noted above to implement the recommended changes. F -3. Certain procedures adopted by the Newport Beach City Council regarding mooring permits are not enforceable because they are not included in the City's Municipal Code. Background: The City of Newport Beach is currently reviewing the harbor related policies and Title 17 of the Municipal Code. The Harbor Commission established a subcommittee which reviewed the combined policy and code and submitted the revisions to the full Harbor Commission for approval. The Harbor Commission reviewed and approved the recommended changes. The City Attorney's Office is currently reviewing the recommended changes for appropriate wording and consistency with other titles of the Municipal Code. The new Title 17 is proposed for City Council consideration in November, 2007. F4. The last assessment of the fair market value of mooring permit fees took place almost ten years ago. Background: The current Municipal Code Section 17.22.050 requires fees to be set by resolution of the City Council. The City's elected officials typically set fees in accordance with an appraisal value or percentage thereof as they determine appropriate. The City has hired a consulting firm named Maximus to evaluate current fees that are based on the cost of services provided. The City has also hired Netzer and Associates to perform an appraisal of fair market rents for various uses of the submerged tidelands in Newport Bay. Two University of California economists will review the results of both studies and recommend tidelands use fees to the City Council for consideration in November, 2007. It is important to note that in 1952 the annual mooring permit fee was $0.20 per foot. Today the annual mooring fee is $20.00 per foot, or 100 times greater. The average consumer price index in 1952 was 26.5; the index for March 2007 was 216.7 or an increase of 8.2 times. So, although ,Q mooring fees have not directly increased in recent years, they have significantly increased more than the CPI in fifty years. In addition, in recent years, the method of calculating the mooring fee has changed from being based on the size of the boat registered to the mooring to the maximum size vessel the mooring would accept. This resulted in a fee increase for most permittees. Also, the cost of the annual residential dock permit fee and the marina slip rental fee are quite disparate and are both difficult to compare to the mooring permit fee. F -5. Although a mooring permit can be held in the name of one (1) person only and the permit cannot be placed in a company name, exceptions have been made for certain private yacht clubs. Additionally, vessels and moorings are now registered in family trusts. After a principal's death, the intent of a trust is to follow the vessel; however, there is an unjustified perception that this also includes the mooring permit Background: Yacht Club Issues The yacht clubs in Newport were instrumental in the early development of the City of Newport Beach. As noted above, there is documentation that the public was invited to install their own moorings in Newport Harbor, free of charge, if people would simply do so. Many did so, naturally choosing convenient locations, some close to clubs which in turn created fields that were close to the services a yacht club offers. The city fathers at the time must have felt that this activity was of long term benefit to the city and the tidelands since they provided in Section 17.22.030 of the Municipal Code that yacht clubs were an exception to the requirement that the vessel owner and mooring permittee were required to be the same individual. Section 17.22.030 (B -1) states that: "When a permit is issued to a yacht club in a single point mooring area, the club shall be permitted to assign the mooring to one of its members. The club shall keep a record of the person and the vessel to which the mooring has been assigned." The City has determined that the administration of certain mooring fields in Newport Harbor is appropriately done by the clubs and the City considers the custom and practice of allowing the yacht clubs to possess and manage multiple moorings within their assigned area appropriate for reasons discussed in following paragraphs. In addition, the yacht clubs pay the same mooring permit fee to the City Tidelands as other mooring permittees and it is recognized that they do charge their members a monthly use fee in excess of this base fee. The City of Newport Beach considers this additional charge to the end user ,n ll justifiable based on the added value that yacht clubs provide to the community as described below. The yacht clubs do most of the community's heavy lifting when it comes to creating organized sailing and boating opportunities. For instance, the First Team Regatta for the Hoag Cup is hosted by the Balboa Yacht Club and the Newport Harbor Yacht Club. This charitable event will raise considerable money to benefit the hospital, thereby benefiting the entire community, including the non- boaters. There are many other examples of the existing public /private partnership which benefit the entire community. Not every sailing event is a fund raiser for local charities. Most sailing events are held to promote sailing as a sport, from casual to national, world or Olympic caliber. One element of the newly adopted City General Plan is to enhance Newport Harbor's functionality as a preeminent small boat recreational harbor. Clubs host safe boating and regatta management seminars and from a community support perspective, the Newport Harbor High School sailing team trains out of the Newport Harbor Yacht Club, Balboa Yacht Club hosts the Sage Hill High School, Mater Dei High School and Corona Del Mar sailing teams and Bahia Corinthian Yacht Club hosts Corona Del Mar sailing team (alternate years). Sailors from throughout the community are welcome to participate in club races regardless of whether they are affiliated with a club. These events and achievements serve a public purpose; they include the community and they bring prestige to --and enhance recognition of —both Newport Harbor and the City of Newport Beach. Focusing on club mooring utilization, clubs are able to offer a value added service to their mooring users in the mooring field. Besides offering fellowship and camaraderie, clubs provide dock access, shore boat service, food service, off street parking, bathrooms, showers, water, trash collection, superior mooring maintenance, electricity, ice, and many other services. After business hours, clubs offer mooring tenants dinghies that they can use to access their moorings, eliminating the difficulty a typical private mooring holder experiences in car- topping and launching a dinghy to access his boat. Being able to offer these value added services enhances the clubs' ability to retain members and contributes to its ability to serve the community. The Newport Harbor Yacht Club was founded in 1916 and BYC was founded in 1922. Since the City's earliest days, private individuals, including club members and others, have worked hand in hand with City officials, and this partnership built the City. A hallmark achievement of this public/private partnership was winning federal government support for the harbor's dredging. Since then, clubs and their boats, as well as individual mooring permittees, have had a place to call home. Since the 1938 founding of the State Lands Commission, there have been a number of other examples where tidelands held in public trust have been leased or permitted to non - individual entities, when such use serves a public purpose. Clubs do their best to efficiently manage their moorings, regularly patrolling them, maintaining them, communicating with owners, coordinating with City and County officials, monitoring for potential environmental hazards, and seeing that their moorings are used in best practice fashion. While the Harbor Patrol has professionally responded to boaters harbor -wide at all hours of the day and night, clubs provide substantial private first response management of their moored boats in storm and wind events, thereby unloading much of this overhead from the publicly funded Harbor Patrol. The mooring fields managed by clubs, and the boats in them, are well maintained. These fields are not only derelict -free; they are home to some of the best maintained boats in the harbor. Clearly the club moorings complement the City's goals to continue its seventy year tradition as a preeminent small boat recreational harbor. In contrast, some private moorings, and the boats on them, generally speaking, are not well maintained, secure thankfully fewer and fewer derelicts and do less to further the City's goals to maintain a preeminent small boat recreational harbor. The Grand Jury report notes that the current ordinance encourages placement of derelict boats which sell at inflated prices for the purpose of mooring transfer. This activity simply does not happen on club moorings. Clubs promote active use of the tidelands: club mooring users must actively use their boats or risk losing the use of their mooring. The clubs' mooring fields allow the clubs to continue their mission to promote sailing and thereby serve the community. Maintaining a reasonably sized contiguous mooring field adjacent to its shore side facility allows clubs to defray the expenses of a boatyard staff and shore boat economically for the mooring tenants and minimizes environmental impact to the bay. When mooring users change, the clubs do not charge any transfer fees. In addition, yacht clubs provide reciprocal privileges including use of available moorings to transient visitors. -A i. Trust Issues The proposed revision to Section 17.22.080 of the Municipal Code (attached) recognizes that many families hold assets such as land, homes and vessels in trusts. It also recognizes that a mooring permit is not an asset that can be held by a family trust but a living person named in the trust must also be named in the mooring permit. F-6. The County (1) follows State statutes and regulations concerning mooring and buoy permits and (2) along with the City of Newport Beach shares financial responsibility for funding the Harbor Patrol to provide management services; however, the County performs no oversight of the City's regulations and procedures on a regular basis. No response required from the City. However, the City would offer some clarification of the finding. The City ownership of the Harbor is derived from State of California legislation granting tide and submerged lands to the City of Newport Beach. As such City has jurisdiction to enact its own laws and policies for regulations and procedures concerning moorings and buoy permits on City Tidelands and has contracted with the County to provide mooring administration services for which the City contributes financial support. F -7. The Harbor Patrol follows the regulations and procedures set down by the City; however, they have begun re- enforcing certain, but not all, regulations, e.g., the derelict boat rule is being enforced but abandoned moorings are allowed. The result of this is that the harbor now seems cleaner; however, permittees are allowed to maintain moorings without vessels. Background: The removal of derelict boats from the harbor is a high priority health and safety issue. The practice of using a "place holder" boat on a mooring contributes greatly to the derelict boat issue. Enforcement of the occupancy regulation would have exacerbated the derelict problem and with the concurrence of the Harbor Commission Mooring Subcommittee, the Sheriffs Harbor Patrol has allowed moorings to remain vacant for more than 90 days. The Title 17 Review Subcommittee, Harbor Commission and the City Attorney have recommended removal the occupancy clause from the proposed Title 17 revision document. In addition, the Harbor and Bay Element of the General Plan contains a goal that states the City should "Foster public access to moorings by enforcing and refining the derelict boat ordinance and regulating transfers by permit holders." W In the short-term, non - enforcement of this regulation has resulted in other immediate benefits such as reduction of the sea lion haul out locations and availability of moorings for short-term rental to transient and local vessels. In the rare case that a mooring is abandoned, it is returned to the city and assigned to the next person on the waiting list. The benefit of long -term rental has been studied and the recommended amendments to MC 17.22.080 propose a mechanism that may be instituted in the near future to enhance public access. F-& The mooring waiting list has not been reviewed or updated for years. Background: The proposed Section 17.22.080(E) of the Municipal Code provides a recommended method of updating a waiting list.