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Home My WebLink AboutSS2 - Harbor IssuesAgenda Item No. SS2 January 10, 2006 HarborIssues: E Charter Boats, Commercial Harbor Activities Permits, Harbor Fees, and more Newport Beach City Council January 101h,2006 Study Session What well cover Charter Boats — Good things about the Charter Industry — Charters are permitted two ways: Commercial Harbor Activities Permits and Marine Charter Permits — Revenue from Charter Operations — Charter Issues Noise, Size, Endeavor accident, more — Harbor Commission's Ideas — Lots of work on this issue by HC Harbor Fee Issues — Looking at Harbor Fees from 3 perspectives: Economist, FMV Appraisal, Cost of Services Study Questions /Follow -up Action Items Economic Value of The Charter Industry Charter Industry provides economic value to the City in many areas including the following: 1. Hotel revenue and TOT from guests aboard yachts `'2. Use of local marine services (fuel, bottom cleaning, maintenance, etc.) �3. Use of other non - marine services for daily operation: g Caterers & Bakeries, Florists, Photography, Printing, Transportation 4. Restaurant & bar revenue from guests aboard yachts 5. Retail purchases from guests aboard yachts 6. Office & slip rent by charter operators 7. Employment for Newport Beach residents 8. Support of Non - Profit, Chamber and Other Charitable Organizations through donation of certificates, discounted cruises or free cruises 9. Partner with Conference & Visitor's Bureau in promoting overall area to meeting planners, destination management companies and others Two Types of Permits Commercial Harbor Activities Permits (CHAPs) — For fixed base operations — Chapter 17.41 of the NBMC — Issued by Harbor Resources Marine Charter Permits — For one -time events and entities without fixed bases — Chapter 5.18 of the NBMC — Issued by Administrative Services/ Revenue Commercial Harbor Activities Permits (CHAPS) Fixed -base operation Permanent berthing and loading location 14 businesses hold CHAPs — 4 provide charter services authorized by the CHAP with 14 vessels • Requires applicant to identify and maintain permanent parking • Provides for a maximum vessel capacity although number of passengers may vary per event • Permit = $481.00 one -time expense • Permit is valid indefinitely unless terminated or revoked gb do M , nij f • • • 1 • ,. �rm Commercial Harbor Activities Permit Holders Charter Memories Just Dreamin' Dream On Dream Maker Endless Dreams Fun Zone _ - Belle Queen Tiki Phoenix Vessel Length 91 ft 85 ft 80 ft 117 ft Boat Company 43 ft 48 ft 54 ft 102 ft Hornblower Dining Entertainer Wild Goose Mojo Cabaret Hornblower Hornblower Yachts 113 ft 127 ft 82 ft 46 ft 52 ft Vessel Capacity 73 capacity 259 capacity 159 capacity 500 capacity 64 capacity 98 capacity 149 capacity 188 capacity 578 capacity 150 capacity 149 capacity 80 capacity 49 capacity Commercial Harbor Activities Permit Holders Davey's Locker Western Pride Freelance Seahawk ` Calibur Catalina Flyer Newport Paddy Vessel Length / Balboa Pavilion Newport Landing Nautilus 59 ft Patriot 65 ft Amigo 62 ft Aggressor Charter Yachts of Newport Beach Icon 105 ft 75 ft 71 ft 62 ft 60 ft 115 ft 36 ft 57 ft * Fishing vessels except during Christmas Boat Parade Vessel Capacity 122 capacity 148 capacity 46 capacity 46 capacity 600 capacity 80 capacity 72 capacity 76 capacity 33 capacity 48 capacity 150 capacity Commercial Harbor Activities Permit Holders Others Marina Sports (boat rentals) Balboa Boat Rentals Pavilion Skiff Rentals Duffy Electric Boat Rentals Newport Sailing Club (boat rentals) Gondola Co. (harbor tours) Newport Jetsports Newport Bait Barge (bait sales) w �- If Marine Charter Permits — Chapter 5.18 Adopted in 1985 to regulate ba reboats Agents dominated the industry Permits administered by Revenue Division Application required for each charter Requirements met for duration of charter Marine Charter Permits - Stats 85 Coast Guard certified and City inspected vessels 35 Companies apply for MCP's -Y- - 12 City approved boarding locations 16 Approved parking locations Application fee $23 to $82 per charter event 1,924 Marine charter permits 135,674 Passengers Direct Charter Revenue - 2005 $481 CHAP application fees (1 permit) $64,300 Charter permit application fees z $138,400 Charter passenger tax Other Tidelands Charges $610K — 666 Offshore moorings '= $67K - 441 Onshore moorings $198K — 2177 Residential piers =- = $375K — 52 Commercial piers $170K — 243 Oceanfront encroachments $1.4 million- Balboa Yacht Basin slips, apartments &garages What are some of the concerns? It's about growth -- in 1908, there were six rowboat rentals. In 2005, we had about 100 vessels putting about one half million passengers on the Harbor. Growth leads to other concerns like: - Parkin - Are all permittees parking their passengers according to their permits? - Tidelands v. Uplands Uses - Sometimes the tidelands use has nothing to do with the uplands use. - Safe - We need to ensure passengers (boarding, etc) are safe. - Enforcement - Today we handle enforcement on a complaint basis. Parking... Chapter 17.41 Based on maximum passenger count, a limitation delineated in the CHAP, or the maximum parking available. Parking must be identified prior to permit issuance. Chapter 5.18 Identified on a Charter -by- Charter basis. Parking problems caused by: Issuance of marina or slip permits and subsequent change of slip use; No verification that parking is provided. Safety... When we authorize charters, we evaluate safety issues like: Loading, unloading and queuing of passengers Vehicle and pedestrian traffic Docks, gangways, landings, and bulkhead railing Main Channel and Fairway vessel navigation and maneuverability } Ability to meet water quality standards We are currently in the process of reviewing and updating standards like: Harbor Permit Policy Dock Construction Design Standards Layout and Design Guidelines of the State Department of Boating and Waterways were recently revised Enforcement... Historically, Harbor Resources has determined permit condition compliance on a complaint basis. Would the City and industry be better served by a more intense management approach? And More: Charter Vessel Accident Report W W -Details of the Endeavor Charter Vessel accident d nr • On 11/19 at approximately 19:00 the vessel Endeavor (91 ft in length) lost all power due to an electrical system malfunction. • It struck vessels and docks while eastbound in the main channel in the vicinity of the 800 Block of - - Via Lido Nord with a wedding reception party T The Vessel Endeavor r: aboard. • A 43' Grand Banks "AQUA" was struck and sustained minor to moderate damage to the - - -- • Harbor Patrol responded to a "Mayday" call; attached a line to the starboard stern; stopped the Endeavor; and towed it to a safe location where the Endeavor dropped anchor. Two other Harbor Patrol The Vessel Skylark boats assisted on the call. . 0 o • The City Council's H -1 Policy allows a vessel to extend beyond the end of the dock by the width of the beam of the vessel. • Many cases of recreational and commercial violations of this policy exist in the Harbor. • Harbor Resources responds on a complaint basis to resolve the problems. • Harbor Resources is attempting to abate this issue with the assistance of the Revenue Division and the City Attorney's Office.. -- And More: Charter Noise Survey Sound meter stationed on the Clean Sweep (City vessel) while traversing the main channel — Un- Scientific study Ambient noise (wind, water, varying engine noise levels, other) Moving target — distance to meter varied at — 5U — Saturday nights, 7:30— 10:00 PM — 6 nights / 69 observations Loud vessels 12(17%) ? 65 dB Quiet vessels 54(78%) <_ 64 dB Borderline 3(4%) 65 dB = 10.26.25 specifies allowable exterior noise level for commercial Loud = Passengers on deck talking loudly, shouting, music audible, generally a loud party Quiet = Passengers inside, no music, windows shut, generally a quiet party Some Balboa Island residents are disturbed by the noise level regardless of the findings of this noise study. .commercial e"ri. -tial portions of mixed -use properties IV Industrial or manufacturing Possible Council Questions zterior Exteri f the ambient noise level exceeds the resulting standard, the ambient shall Noise Nois be the standard. Level Level quivale (Equiv t Noise nt Nois B. It is unlawful for any person at any location within the incorporated area Level, Level, of the City to create any noise, or to allow the creation of any noise on Leq) Leq) property owned, leased, occupied or otherwise controlled by such person, a.m. to 10 P.M. ' which causes the noise level when measured on any other property, to o P.M. a.m. exceed either of the following: DBA 50 DBA 1. The noise standard for the applicable zone for any fifteen - minute period; 2. A maximum instantaneous noise level equal to the value of the noise standard plus twenty (20) DBA for any period of time (measured using A- r weighted slow response). 65 DBA 60 DBA C. In the event the ambient noise level exceeds the noise standard, the 60 DBA 50 DBA maximum allowable noise level under said category shall be increased to reflect the maximum ambient noise level. 70 DBA 70 DBA D. The Noise Zone III standard shall apply to that portion of residential property falling within one hundred (100) feet of a commercial property, if the intruding noise originates from that commercial property. E. If the measurement location is on boundary between two different noise zones, the lower noise level standard applicable to the noise zone shall apply. (Ord. 95 -53 § 1, 1995; Ord. 95 -38 § 11 (part), 1995) Harbor Commission's Perspective • Better staff follow -up to ensure that the permittees comply with all permit conditions; • Revise the commercial dock construction standards to } ensure they are adequate to address safe charter - operations — completed at staff level and may come to City Council for approval next month; Consider consolidating charter regulations to a single ordinance to improve consistency — approved by the Harbor Commission and is the basis for the proposed 17.10 Ordinance. Harbor Commission's Perspective • Consider long term leases for charter facilities to ensure the City is receiving the fair market value for the use of State Tidelands and /or to cover the cost of enforcement et al —This may be presented to permittees under the proposed 17.10 Ordinance; ~_ • Review parking requirements. Develop City review team to include Revenue & Planning to ensure upland parking, offsite parking or shuttle service is appropriate for each permit issued. — This is incorporated into the proposed 17.10 ordinance. • Consider a citywide limit on passenger capacity (i.e. is there a certain charter passenger count maximum that is appropriate for the Harbor ?). Proposed New Title 17.10 Consolidates 5.18 & 17.10 Creates annual permit review Reduces the exemptions for maintenance, repair _ &construction businesses operating >1 vessel Deems existing permit holders compliant Creates exemptions for City lessees &franchised businesses Identifies businesses operating in Harbor 17.10 Issues Expands regulation Existing permit holders won't qualify Exorbitant application /renewal fees Protracted process 17.10 &Tidelands Leases /Franchises Businesses franchised or leasing from City exempt from permit _ - 13 Tidelands -based businesses with lease or franchise $3 Million annual lease revenue 17.10 Consensus Building Charter Boat Subcommittee formed August '03 5 Subcommittee meetings 6 Chamber of Commerce Marine Committee ~= meetings 3 Harbor Commission meetings How Does the City Determine Which Permit Is Issued? Fee - $481, one time fee (17.41.040) _ Boarding Location _ �•' 1. Application (5.18.030) ermanent) 2. Fee $$28.50 - $83.80 �.•' (Each Charter) —_ sel(s) Permanent 3. Boarding Location (Variable) 4. Vessel(s) ID (Variable) - I 5. Parking (Variable) 5. Passenger Parking (Permanent) 6. Permit Issued (Subject to Standard Conditions and �. ' Special Conditions. Valid for Duration of Charter A LA 6. Permit Issued (Subject to Standard and Special Conditions. Valid unless Revoked or Terminated COMMERCIAL CHARTER VESSEL OPERATIONS PERMITTING PROCEDURES (Six Passengers or More) Charter Revenue in 2002 • CHAP Permit Revenue = $0 (no $400 one -time permits issued in 2002) • Marine Charter Permit Revenue = $57,026 Marine Charter Tax = $152,800 in 2002. That's $70,500 from 217,600 CHAP passengers plus $82,300 from 98,500 Charter Permit passengers. Charter Passenger Tax (with some exceptions) is based on: Tax Ticket Price $0.00 less than $26 $0.50 $26 to $50 $1.25 over $50 Charter Industry — Good things, too Charters and Sailing Programs Annual pre- summer meeting with charter companies and sailing club instructors. yen forum discussion on how the two parties can co -exist in the harbor during asses / races and charter events, i.e. conducting races in the main channels while her vessels (both commercial and recreational) are navigating. Discuss approved utes of travel for charters — main navigational channel only. ;aCommunication is the best to avoid conflicts. Hailing protocol developed. Regular Meetings with Industry With our recent Fire Code Compliance program throughout the harbor, we've had a chance to meet with all of the property owners and charter operators. Our focus was on fire safety (hose cabinets, fire extinguishers, electrical outlets...) but we also noted dock / gangway / float conditions with respect to passenger loading. For the past 3 years, we've also met with the industry in many subcommittee meetings (17.10) as well as in smaller settings with the property owners to discuss creative ways to overcome various issues (parking) and to reinforce the City's berthing requirements. Harbor Fee Issues Harbor fees are likely out of whack — Comprehensive appraisal in 2001 not implemented — Some harbor facilities are on year -to -year permits and r pay permit fees, others are on long -term leases and pay percentages of gross, net, etc. — System generally has developed over time property - by- property and may not make sense today. — Some activities — esp moorings, commercial permit fees, and residential pier fees — are likely NOT at Fair Market Value. Why is a good analysis of Harbor Fees important? Tidelands Trust & Council Policy (F -7): — City has to operate Trust properties in a manner that provides for extensive benefits to the People of the State (conduct of a harbor, etc); — All City income properties should be analyzed routinely (CP F -7) - -- " Whenever a lease, management contract, concession, sale or similar action regarding income property is considered by the City, an analysis shall be conducted to determine the maximum or open market value of the property. " — Council may choose to select a non - market rate (but must establish findings to that effect), but only after determining the market rate. Evaluating Harbor Fees Proposal is as follows: — A three - tiered evaluation: How an economist would look at the Harbor — just like the _ American Trader and a $13 day at the beach. A fair market value appraisal of the harbor (tough to find qualified, non - conflicted appraisers) What does it cost to administer the Harbor? Include TMDLs, water quality enforcement, Harbor Resources, RGP applications, dredging, more. — Report back to Finance Committee and City Council — Proposal should come back to you in the next few weeks. Next Steps... r Bring new Chapter 17.10 to you for introduction. Initiate the 3- tiered approach to evaluating the Harbor's fees — the cost of harbor services - study, Tidelands appraisal & economic study Develop a template tidelands lease, start moving commercial activities away from the annual permit system. Incorporate Harbor Permit Policy into NB Municipal Code