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HomeMy WebLinkAboutHarbor Commission Agenda - March 8, 2017CITY OF NEWPORT BEACH HARBOR COMMISSION AGENDA Council Chambers - 100 Civic Center Drive Wednesday, March 8, 2017 - 6:30 PM Harbor Commission Members: Paul Blank, Chair (Vacant), Vice Chair Bill Kenney, Secretary Dave Girling, Commissioner Duncan McIntosh, Commissioner Doug West, Commissioner (Vacant), Commissioner Staff Members: Chris Miller, Harbor Resources Manager Shannon Levin, Harbor Resources Supervisor City Council Liaison: Mayor Pro Tem Duffy Duffield The Harbor Commission meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that the Harbor Commission agenda be posted at least seventy-two (72) hours in advance of each regular meeting and that the public be allowed to comment on agenda items before the Commission and items not on the agenda but are within the subject matter jurisdiction of the Harbor Commission. The Chair may limit public comments to a reasonable amount of time, generally three (3) minutes per person. The City of Newport Beach’s goal is to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a participant at this meeting, you will need special assistance beyond what is normally provided, we will attempt to accommodate you in every reasonable manner. Please contact Chris Miller, Harbor Resources Manager, at least forty-eight (48) hours prior to the meeting to inform us of your particular needs and to determine if accommodation is feasible at (949) 644-3034 or cmiller@newportbeachca.gov. NOTICE REGARDING PRESENTATIONS REQUIRING USE OF CITY EQUIPMENT Any presentation requiring the use of the City of Newport Beach’s equipment must be submitted to the Harbor Resources Division 24 hours prior to the scheduled meeting. 1)CALL MEETING TO ORDER 2)ROLL CALL 3)PLEDGE OF ALLEGIANCE 4)PUBLIC COMMENTS Public comments are invited on agenda and non-agenda items generally considered to be within the subject matter jurisdiction of the Commission. Speakers must limit comments to three (3) minutes. Before speaking, we invite, but do not require, you to state your name for the record. The Commission has the discretion to extend or shorten the speakers’ time limit on agenda or non-agenda items, provided the time limit adjustment is applied equally to all speakers. As a courtesy, please turn cell phones off or set them in the silent mode. 5)APPROVAL OF MINUTES February 8, 2017 Draft Minutes 17-02-08 Harbor Commission Minutes March 8, 2017 Page 2 Harbor Commission Meeting 6)CURRENT BUSINESS Vice-Chair Nomination1. The Harbor Commission will nominate a new Vice Chair. Recommendation 1) Nominate a Vice Chair to the Harbor Commission. 6.1 17-03-08 Nomination of Vice Chair - HC Staff Report Ocean Defenders Alliance2. The Ocean Defenders Alliance, based in Huntington Beach, California, will give a presentation on their efforts to eliminate man-made debris from ocean wildlife and habitats. Recommendation 1) Receive and file 6.2 17-03-08 Ocean Defenders Alliance - HC Staff Report Tidelands Capital Plan3. Finance Director, Dan Matusiewicz, will update the Harbor Commission on the Tidelands Capital Plan which includes Capital and maintenance project funding. Recommendation 1) Provide input to staff. Receive and file. 6.3 17-03-08 Tidelands 101 - HC Staff Report 6.3.a Attachment A - CNB Tide and Submerged Land Annual Financial Report FY 2015-16 6.3.A Council Approved Trial Anchorage Location Harbor Patrol Update4. Lieutenant Alsobrook will provide an update on mooring and harbor activity Recommendation 1) Receive and file. 6.4 17-03-08 Harbor Patrol Update - HC Staff Report March 8, 2017 Page 3 Harbor Commission Meeting Anchorage Discussion5. The Anchorage Subcommittee will discuss establishing the West Anchorage for Summer 2017 and possibly permanently after the summer. Recommendation 1) Approve the installation of a temporary anchorage in the Turning Basin, and recommend that staff forward to the City Council for approval; and 2) Review day use moorings outside of Corona Del Mar ocean beach, and direct the ad hoc committee to return at a later date with a recommendation. 6.5 17-03-08 Summer 2017 Anchorage - HC Staff Report 7)COMMISSIONER ANNOUNCEMENTS (NON-DISCUSSION ITEM) 8)QUESTIONS AND ANSWERS WITH COUNCIL LIAISON ON HARBOR RELATED ISSUES 9)QUESTIONS AND ANSWERS WITH HARBOR RESOURCES MANAGER ON HARBOR RELATED ISSUES 10)PUBLIC COMMENTS ON SUBCOMMITTEE REPORTS OR QUESTIONS AND ANSWERS WITH COUNCIL LIAISON OR HARBOR RESOURCES MANAGER 11)MATTERS WHICH COMMISSIONERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) 12)DATE AND TIME FOR NEXT MEETING: Wednesday, April 12, 2017 13)ADJOURNMENT NEWPORT BEACH HARBOR COMMISSION SPECIAL MEETING MINUTES Marina Park - Collins Island Banquet Room – 1600 W. Balboa Blvd. Wednesday, February 8, 2017 7:00 PM 1) CALL MEETING TO ORDER The meeting was called to order at 7:00 p.m. 2) ROLL CALL Commissioners: Paul Blank, Chair Dave Girling Bill Kenney Duncan McIntosh Joe Stapleton Doug West Staff Members: Chris Miller, Harbor Manager Shannon Levin, Harbor Supervisor City Council Liaison: Mayor Pro Tem Duffield (absent) 3) PLEDGE OF ALLEGIANCE – Commissioner McIntosh 4) PUBLIC COMMENTS Richard Dorn commented that some boaters are keeping boats long term at the public docks and he would like to see increased enforcement of time limits. George Hylkema added that the Fernando Street public dock has a lot of boats abusing the time limits. 5) APPROVAL OF MINUTES – January 11, 2017 6) CURRENT BUSINESS 1. Waterfront Project Guidelines and Standards – Harbor Design Criteria, Commercial & Residential Facilities: Approval The Waterfront Project Guidelines and Standards – Harbor Design Criteria, Commercial & Residential Facilities (“Harbor Design Criteria”) have been updated to correct various errors as well as to make overall improvements to the current 2008 version. Upon the Harbor Commission’s recommendation, the City Council will adopt these standards at an upcoming meeting. Recommendation: 1) Review and approve the Harbor Design Standards, and recommend that they be forwarded to the City Council for final approval. Chris Miller presented the Waterfront Guidelines and Design Criteria. The proposed changes were determined by input by city staff, contracted engineering experts and local marine contractors. Significant changes to the criteria include raising the seawall heights from +9MLLW to +10MLLW, flexibility in materials, and design alternatives in parts of the harbor according to site specific conditions. Public comment from Jim Mosher included questions regarding language referring to Building and Fire Board of Appeals, pile height reduction and seawall height increases. Pete Swift, Swift Slip, added that the proposed changes are fair and he was pleased to be a part of the revisions. Paul Gerst, Permadock, appreciated being involved in changing the criteria especially allowing for technological and safety improvements. The Commission voted to approve the Waterfront Project Guidelines and Standards and forward to City Council for approval. 2 2. Mooring Permits and Other Provisions: Final Harbor Commission Review to Title 17 Revisions At a special meeting on June 16, 2015, the City Council directed staff to return with a Resolution setting the fair market value rent for onshore and offshore moorings (completed in January 2016), and also return with various Municipal Code amendments and administrative changes as recommended by the Harbor Commission. Staff has completed these administrative changes for final Harbor Commission review before they are forwarded to the City Council for final approval. Recommendation: 1) Review the administrative changes to the Municipal Code as previously directed by the City Council and Harbor Commission, and recommend they be forwarded to the City Council for adoption. Because of conflicts of interest Commissioners Blank, Kenney, Girling and West recused themselves. In order to establish a quorum cards were drawn to establish those commissioners who would remain and vote on the topic. Commissioners West and Kenney pulled the two red cards to remain in the voting body. Chris Miller presented a summary of the regulations up for consideration. 1. Annual Mooring Permit Rent. Finalized by City Council January 2015. 2. Mooring Transfers. Allow Transfers between private parties. Unlimited transfers allowed within a maximum of one transfer per year. 3. Mooring Transfer Fee. The current fee is 50% of the annual mooring permit rent. Discussion ensued over charging a percentage of the sale price, which could be ambiguous, or a percentage of the fixed rent. The Commission moved to charge 75% of the annual mooring permit rent. 4. Up to Two Names on a Mooring Permit. Maintain the current practice of requiring one name per mooring permit. 5. Centralized Location for Posting Sold Moorings. On a City-maintained site, either through the City or possibly the Newport Mooring Association (“NMA”) sale dates and prices of individual moorings will be recorded and made available to the public. 6. Mooring Transfer Between Family or Trust. No change to the current practice of allowing transfers within families, trusts, etc. with no transfer fee. 7. Maximum Number of Mooring Permits Allowed. Any individual may have two mooring permits, and those that currently hold more can keep those until they are divested. 8. City Practice of Renting Moorings. No change to the practice of the City renting vacant moorings and returning all revenue to the tidelands to be used toward harbor operations or projects. 9. Rental Fees. No change to the rental fees which can be determined at a later date. 10. Frequency of Billing Annual Mooring Permits. Staff will develop a procedure to increase billing frequency in lieu of a lump sum payment. Commissioners added discussion about late fees for failure to pay. 11. Wait List. Abolish the wait list that has never proven to work successfully. 12. Mooring Revocation. If a mooring permit is revoked for non-payment or other reasons, then the City may public auction the mooring. 13. Insurance Required. Permittees are required to provide insurance for any vessel on a mooring, whether a rental or permanent vessel. Small craft such as row boats or kayaks will not be required to provide insurance. Public comment commenced with Dan Gribble saying that having a central list of sold moorings is excessive and the transfer fee should be based on a fixed number. Mark Sites added that a transfer fee based on the percentage of a sale price is unclear. Patricia Newton commented that 10% of a sale price is unprecedented and she supports the transfer fee based on a percentage of the annual permit. Bill Moses, NMA board member, supported the transfer fee based on a percentage of the annual permit. Chuck South commented that sale prices will change and it will be difficult to keep up on the percentage of sales. A speaker added that it will cost the City to run the web site to track the transfers and it is a waste of money. Jim Mosher commented on clarifying some language and opposes the private transfer of public property. 3 Scott Karlin commented that the fair market value language limits future “fair market” prices. Carter Ford added that posting provides transparency and the transfer fee should be based on a percentage of the annual permit rent. Transfer Fee. Commissioner Stapleton proposed charging 100% of the annual permit fee. Commissioners Kenney and West agreed that the transfer fee should be based on a percentage of the annual permit fee but were undecided between 50% and 100%. Commissioner McIntosh suggested a fee less than 100%. Commissioner West moved the transfer fee be set at 75% of the annual permit fee. All the other topics for consideration were moved as proposed. Motion carried with 3 ayes and Commissioner Stapleton registering a “no” vote. 3. Proposed Tidelands Capital Plan and Capital Improvement Program (FY 2017-18): Review Staff will review the proposed Tidelands Capital Plan and the Capital Improvement Program (FY 2017-18) as it relates to harbor projects. Recommendation: 1) Receive and file. Chair Blank questioned whether review of the Tidelands Capital Plan and Improvement Program could be continued to the March meeting. A Commissioner noted preparation of the annual budget was underway. Chair Blank opened discussion of the item so that projects could be included in the budget. Harbor Manager Miller reported the Tidelands Management Committee developed most of the Tidelands Capital Plan (Plan). The Harbor Commission would focus on harbor-related Capital Improvement Program (CIP) projects. The Plan covered long-range planning for major infrastructure projects and would dictate the amount of funds to be saved and allocated to various projects. Public Works Director Webb advised that Items 4, 6, 15, 16, 18, and 20 were included in the current year's capital program. Of the shaded projects shown on page 2, some were complete and some would be carried over. Projects below the shaded area were proposed new projects for the 2017-2018 fiscal year. In reply to Commissioner Girling's questions, Public Works Director Webb indicated the $500,000 amount for Grand Canal dredging was an addition to the budgeted amount of approximately $361,000. No federal money was available currently, but staff would attempt to get the Corps of Engineers to develop a project. Designing and permitting a project would be covered by the $500,000 amount. In response to Chair Blank's inquiry, Public Works Director Webb concurred with including a placeholder for developing a “Port Plan” and its funding. A Commissioner noted the project estimate column contained project costs in current year dollars and a separate column contained project costs estimated in dollars for the anticipated year of implementation. Jim Mosher referred to the staff report, which stated Tidelands Capital Plan, but Attachment A stated Harbor Capital Project Plan. He questioned which body was reviewing projects for tidelands located outside the Harbor. Chair Blank understood the Harbor Commission took on items related to the Harbor and the Council retained all other aspects of the Plan. In reply to Commissioner West's question, Chair Blank advised that the Harbor Commission was asked to acknowledge its responsibility for review of and advisement on the projects as priorities. The Harbor Commission would provide its feedback on these and other projects in the future. In response to Commissioner West's inquiry, Senior Accountant Trevor Power reported funding for the proposed projects came from incremental tidelands revenue and from a $5 million transfer from the General 4 Fund to help cover some of the costs. The City had speculative financing for four years for projects. He agreed to provide revenue information at a later time. In reply to Commissioner West's questions, Public Works Director Webb indicated the projects shown in the shaded portion of the list were funded in the budget. Staff recommended the Harbor Commission recommend adding the projects to the coming year CIP. The recommendation would be given to the Finance Committee, who would solve the funding question. In order to provide project information for CIP planning in December, the Harbor Commission could discuss projects and costs over the summer. In response to Commissioner West's inquiries, Public Works Director Webb explained that staff had not developed a plan for harbor-wide dredging. Item 20 was a Lower Bay dredging placeholder in the amount of $4.5 million. Depending on the number of yards calculated for removal, the amount could be $10 million, so the Plan would need adjusting. The Finance Committee would determine funding. Harbor Manager Miller added that dredging was a broad category that could be used for other activities related to dredging and permitting. The Harbor Commission could discuss on a broader scale what the Harbor needed and how to achieve it. Staff was discussing dredging the entire lower harbor down to the federal design limit. Chair Blank noted the Commission did not need to take action on the item and questioned whether Commissioners felt comfortable with acknowledging the Commission's responsibility for review and analysis of harbor-related tidelands projects. He reiterated the Commission's input regarding a Port Plan. 4. United States Coast Guard Marker Buoy Repair/Replacement The U.S. Coast Guard maintains six pile markers in Newport Harbor. However, several of the markers are dilapidated and have become navigational and safety hazards to boaters. In October 2016 City staff toured the harbor with USCG representatives to inspect the existing pile markers and to discuss repair or replacement options that could either be administered by the City, the USCG, or as part of a joint program. Harbor staff solicited bids to implement the program and conduct routine maintenance. In an effort to improve safety and navigation, staff requests the Harbor Commission’s input and recommendation on the following: 1) Review the proposed repair/improvement options; and 2) Evaluate funding and maintenance programs to manage the replacement/repair and long-term maintenance of the pile markers. Recommendation: 1) Provide input to staff. Receive and file. Harbor Supervisor Levin reported boaters and sailing clubs had expressed interest in having navigational markers rather than pilings. The Coast Guard's repair of markers had been slow. After a boating mishap, the City paid to have Marker 11 removed, which turned into a lengthy undertaking. Staff met with the Coast Guard and discussed placement of pile markers and the concept of the City transitioning markers to buoys. Generally, the Coast Guard was receptive to transitioning some markers to buoys and suggested the City take responsibility for navigational markers, partner to replace them with buoys, and assume maintenance. Markers 8 and 11 had been transitioned to buoys. Staff recommended transitioning markers 12, 5, and 10 to buoys and marker 6 to a pile because of its location near the entrance channel. Staff wished to proceed with a proposal to the Coast Guard to transition those markers and assume responsibility for them. The markers would remain federal navigation markers, but the City would assume all responsibility for maintenance. In response to a Commissioner's question, Harbor Supervisor Levin advised that the cost for removal of pilings and installation of buoys for the proposed markers would be approximately $35,000 with the maintenance cost in the range of a couple of thousand dollars annually. In reply to Commissioner Girling's inquiries, Harbor Supervisor Levin indicated staff would have buoys marked with GPS location and maintain them. Buoys would be easier to maintain than pilings. Staff was not proposing the City pay all upfront costs; they wanted to approach the Coast Guard with cost sharing. In response to Commissioner West's question, Chair Blank stated the markers mentioned, not race markers, were the only markers for which the City would assume responsibility. 5 In reply to a Commissioner's question, Chair Blank remarked that buoys would have to be hit hard and fast to tip them over and expose the chain to a boat prop. Chair Blank noted the marker structures indicated at the ends of the two jetties were reversed. He also noted general Commission support for proceeding with the program and approaching the Coast Guard for cooperation. In reply to Len Bose's question, Harbor Supervisor Levin explained that Marker 6 needed to be higher because of the line of sight coming into the Harbor. It was a noticeable marker exiting the Harbor. Mr. Bose, as a boater, preferred removal of all big posts and suggested removing that marker if the Coast Guard would allow it. Billy Whitford indicated a range marker was located on the roof of the garage or the roof of the Harbor Patrol building, but it was not illuminated. 5. Prohibition of Water Propelled Vessels Above the Water Surface in Newport Harbor Water-propelled vessel activity in Newport Beach (City) peaked in 2014 with multiple commercial operators in Newport Harbor. Only one operator was officially permitted, Jetpack America, which operated from 2009 through 2016. In 2016, Jetpack America closed its Newport Beach business. Now that there are no commercial or private recreational operators in Newport Harbor, staff and the Harbor Commission recommend prohibiting all water-propelled vessels that operate above the water surface in Newport Harbor. Recommendation: 1) Recommend City Council approve ordinance prohibiting water-propelled vessels in Newport Harbor. Commissioner Stapleton recused himself from the item. Harbor Supervisor Levin advised that currently there was no operator of water-propelled vessels in Newport Harbor. Staff proposed submitting the Harbor Commission's previous recommendation to prohibit all water- propelled vessels in Newport Harbor, both recreational and commercial, to the City Council. In reply to Commissioner Girling's inquiry, Chair Blank explained that the Commission was recommending a change to the ordinance. The City Council would have to ratify modification of the ordinance. Harbor Supervisor Levin added that the item was scheduled before the Council on February 14th. If the Harbor Commission chose not to make the recommendation, staff would pull it from the Council agenda. Commissioner Kenney commented that the Harbor Commission previously recommended complete prohibition of water-propelled vessels off the surface of the water. The Council elected to prohibit privately operated craft and to allow one commercial operator. Commissioner Kenney moved to recommend to the City Council to prohibit water-propelled vessels from Newport Harbor. Commissioner Girling seconded the motion. Jim Mosher questioned the staff report's reference to the Harbor Commission's disappointment with the ordinance in 2016. Other than the current meeting, he did not recall the issue having formally been on an agenda. Commissioner West clarified that the Harbor Commission's several discussions of the temporary anchorage at the turning basin included the Commission's opinion that jetpack operations in that area were incompatible. Chair Blank concurred. In reply to a question from a Commissioner, Commissioner Kenney remarked that the City Council allowed water-propelled vessels because it felt they would be a tourist attraction and draw people to the City. The motion carried with 5 ayes, 0 no and 0 abstaining votes. 6 6. Marina Park Update Staff will provide an update on Marina Park. Recommendation: 1) Receive and file. Harbor Supervisor Levin shared the many amenities offered at Marina Park. Over the last 12 months, peak occupancy occurred in July, August, and September with high occupancy in December. A significant drop in occupancy occurred in January because of storms. Marina Park made over $100,000 in its first year. She expected Marina Park to be extremely busy in the summer and generate possibly 50 percent higher revenue over the previous summer. In the summer of 2016, occupancy was 50 percent or higher and 100 percent on holiday weekends. Rates were the same year-round. She did not know if seasonal rates would affect occupancy. Staff had sent brochures to yacht clubs on the west coast, had advertised in boating magazines, and was attempting to be placed on the program for Baja Ha-Ha. Priorities for year 2 were maintaining high customer service, marketing to cruising clubs, getting articles in papers and magazines, improving online exposure, and sending a customer survey. Chair Blank advised that he had had some difficulty making an online reservation for a slip and suggested reviewing the online reservation system and possibly obtaining a better provider. In response to Commissioner Girling's inquiry, Harbor Supervisor Levin indicated the $100,000 amount was comprised solely of rental sales. Carter Ford wanted use of the facility to continue to grow. He suggested allowing slips to be used for light maintenance or for dinghies. He hoped the Commission would consider exploring other opportunities to double the occupancy. Chair Blank referred to off-season rates of buy 2 nights get 7 nights. Harbor Supervisor Levin did not believe the new and state-of-the-art facility was appropriate for maintenance. Jim Mosher noted the chart contained monthly averages and inquired about the number of nights at 100 percent occupancy. 7. Stand Up Paddle Boarding Update Stand up paddling is a popular activity in Newport Harbor. Many companies offer rentals to the public, and the sport is equally as popular as a personal watersport. The growing population of paddlers on the water has garnered concern for safety. Recommendation: 1) Receive and file. Commissioner Kenney reported the subcommittee identified companies renting stand-up paddleboards (SUP) and other human-powered vessels in the Harbor; interviewed the operators to determine what safety instruction they provided; collected anecdotal information with respect to whether restrictions were being observed; and obtained expert opinions on SUP safety. The Harbor Commission studied SUP safety in 2013 and created a pamphlet. The subcommittee contacted the American Canoe Association, which appeared to be the best association representing the interests of paddle boarders and those who operate other human-powered vessels, and industry experts Rob Casey and Ken Williams to obtain their views on SUP safety. The subcommittee conducted an interested parties meeting the prior week. Findings from the survey of rental operators were: most operators did not provide basic instruction for first-time renters; most offered only basic operational and safety tips; and only one presented renters with a single sheet of written safety tips. The American Canoe Association published a pamphlet that contained basic information for vessel operators. Only one operator had this pamphlet available; however, it was not required reading. One operator had an instruction and safety program that all prospective renters must complete, including a 7 video and an on-water proficiency test. Rental company operators were not doing an adequate job of instructing prospective renters on basic operation and safety of SUP and other human-powered vessels. The subcommittee proposed updating, printing, and distributing the safety pamphlet prepared by the Harbor Commission in 2013; making that pamphlet available on the City of Newport Beach website and social media platforms; preparing an SUP safety video and making it available to rental company operators and on the City's website and social media platforms; preparing a safety operations sticker that could be affixed to SUPs and making them available to rental company operators and the general public; obtaining on-land SUP simulators and having them available at Marina Park; creating and conducting on a regular basis an SUP safety class at Marina Park; creating a safety certification program that could be recognized by rental operators; and hosting an annual meeting for rental company operators only at the beginning of each season to discuss safety tips and issues. There was a suggestion to draft, train, and deploy a population of volunteers to act as harbor (inaudible) at points of congestion on busy days. Commissioner Stapleton concurred with convening rental operators to assess what did and did not work. He was hesitant to spend City money to create a video until they knew it would be viewed. Billy Whitford felt the presentation implied rental operators were not doing a good job of safety. He asked if there was any record of incidents involving SUPs. It could be a small vessel operator problem. He was present to learn what action might be taken and offered to help in any way. Skye Carlson liked the proposals; however, some customers thoroughly read written information; some viewed videos; and some were not interested in any information. She and her coworkers verbally provided customers with safety information and tips. One fix would not apply to all customers. Commissioner Girling stated the Harbor Commission had a responsibility to do something when safety concerns were brought to its attention. Also, the Harbor Commission wanted to understand what operators were doing to educate and provide safety guidelines. He agreed that one solution would not fit everyone. The Harbor Commission was attempting to provide methods to improve safety in the Harbor. There was a perception by some people that there could be better education. Another Commissioner remarked that the Harbor Commission was suggesting some ways that it might assist rental operators. The burden would be more on the City to provide classes and pamphlets and such. A certification process might go part of the way to increasing safety in the Harbor. In reply to Chair Blank's question, Commissioner Girling did not favor a major directive to staff. He preferred the dialog continue to determine whether operators improved with use of the subcommittee's recommendations. He suggested disseminating information to and receiving feedback from all operators. Harbor Supervisor Levin suggested the Chamber of Commerce Marine Committee could reach out to businesses and help staff make contact. After discussion of hosting a meeting of rental company operators, Commissioner Kenney agreed to provide his presentation with recommendations to the Chamber of Commerce Marine Committee as the next step. Commissioner West suggested the Harbor Commission retain ownership of the issue and attempt to engage the Marine Committee in helping implement some of the ideas. Commissioner Girling recommended an agenda item in six months for further assessment. 7) COMMISSIONER ANNOUNCEMENTS (NON-DISCUSSION ITEM) Commissioner Stapleton advised an article reported sewage was spilled in the Harbor. Harbor Supervisor Levin would obtain information and provide it to the Commission. Chair Blank attended the third Mariners' Mile revitalization effort where he learned they would concentrate on the Harbor front element in revitalization efforts. At the Coastal Commission meeting, he planned to provide public comment in support of a Coastal Development Permit for Balboa Marina. The Harbor 8 Commission's presentation to the Planning Commission on marine-related businesses had been rescheduled to February 23, 2017. 8) QUESTIONS AND ANSWERS WITH COUNCIL LIAISON ON HARBOR RELATED ISSUES None. 9) QUESTIONS AND ANSWERS WITH HARBOR MANAGER ON HARBOR RELATED ISSUES None. 10) PUBLIC COMMENTS ON SUBCOMMITTEE REPORTS OR QUESTIONS AND ANSWERS WITH COUNCIL LIAISON OR HARBOR MANAGER Billy Whitford advised that 20 tons of debris was sitting on the beach. 11) MATTERS WHICH COMMISSIONERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) Chair Blank noted stand-up paddleboard safety would be agendized in six months. Commissioner West requested an agenda item regarding the Tidelands Capital Plan in March and a future item for a presentation by the Ocean Defenders Alliance. 12) DATE AND TIME FOR NEXT MEETING: Wednesday, March 8, 2017 13) ADJOURNMENT There being no further business to come before the Harbor Commission, the meeting was adjourned in memory of Chip Donnelly and Ralph Rodheim. NEWPORT BEACH Harbor Commission Staff Report COUNCIL STAFF REPORT CITY OF March 8, 2017 Agenda Item No. _1_ TO: HARBOR COMMISSION FROM: Shannon Levin, Harbor Analyst- 949-644-3041 shannon@newportbeachca.gov TITLE: Harbor Commission Vice Chair Nomination ______________________________________________________________________ ABSTRACT: Harbor Commission will nominate a Vice Chair. RECOMMENDATION: 1. Nominate a Vice Chair of the Harbor Commission. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: With a vacancy in the Harbor Commission the position of Vice Chair is now open. The Commission will nominate a new Vice Chair. 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. 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). NEWPORT BEACH Harbor Commission Staff Report COUNCIL STAFF REPORT CITY OF March 8, 2017 Agenda Item No. _2_ TO: HARBOR COMMISSION FROM: Shannon Levin, Harbor Analyst- 949-644-3041 shannon@newportbeachca.gov TITLE: Presentation from Ocean Defenders Alliance ______________________________________________________________________ ABSTRACT: The Harbor Commission will see a presentation from the Ocean Defenders Alliance. RECOMMENDATION: 1. Receive and file. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: The Ocean Defenders Alliance will present to the Harbor Commission on their efforts to eliminate man-made debris from ocean wildlife and habitats. 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. 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). NEWPORT BEACH Harbor Commission Staff Report COUNCIL STAFF REPORT CITY OF March 8, 2017 Agenda Item No. _3_ TO: HARBOR COMMISSION FROM: Shannon Levin, Harbor Analyst- 949-644-3041, shannon@newportbeachca.gov TITLE: Tidelands Revenues and Expenses ______________________________________________________________________ ABSTRACT: Staff will review the tidelands accounting for expenditures and revenues. RECOMMENDATION: 1. Receive and File. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. The funding for the individual projects will be evaluated separately by the City Council at later dates. 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. 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). ATTACHMENTS: Attachment A – 2016 Tide & Submerged Lands Annual Financial Report           TIDE & SUBMERGED LANDS   ANNUAL FINANCIAL REPORT  For the Fiscal Year Ended June 30, 2016     CITY OF NEWPORT BEACH Tide & Submerged Lands Annual Financial Report Year Ended June 30, 2016 TABLE OF CONTENTS Introduction Table of Contents .................................................................................................................... 1 Letter of Transmittal ................................................................................................................ 2 Overview of Tide & Submerged Lands ................................................................................... 3 Guiding Legislation.................................................................................................................. 4 Accounting for Tidelands Revenues and Expenditures .......................................................... 4 Advances and the General Fund Subsidy ............................................................................... 5 Revenues Discussion .............................................................................................................. 6 Expenditures Discussion ......................................................................................................... 8 Conclusion .............................................................................................................................. 9 Financial Statements Balance Sheet ....................................................................................................................... 10 Statement of Revenues, Expenditures, and Changes in Fund Balance ............................... 11 Notes to the Financial Statements ........................................................................................ 13 1 Finance Department  CITY OF NEWPORT BEACH  100 Civic Center Drive  Newport Beach, California 92660  949 644‐3127  |  949 644‐3339 FAX  newportbeachca.gov/finance December 23, 2016 Honorable Mayor, Members of the City Council, Residents of the City of Newport Beach, and Citizens of the State of California, I am pleased to present the City of Newport Beach – Tide and Submerged Lands (Tidelands) fiscal year 2015-16 annual financial report. The Tidelands Report is a report for the residents of California, and provides a concise, easy to read document that enables us to highlight information on the City’s administration of the Tidelands pursuant to grants from the State of California. This report reflects Tidelands fund balances, that when aggregated agree to amounts presented in the audited, fiscal year 2015-16 Comprehensive Annual Financial Report (CAFR) for the City of Newport Beach, CA which includes the Tidelands – Operating Fund and Tidelands – Harbor Capital Fund as major fund types, subject to audit. This report only presents information on the financial condition of the Tidelands funds, and does not address the financial condition of the City of Newport Beach, CA as a whole. For more information on the financial condition of the City of Newport Beach, CA, lease see the City’s CAFR, which can be viewed on our website, at: www.NewportBeachCa.gov/CAFR. ____________________________ Dan Matusiewicz Finance Director 2 CITY OF NEWPORT BEACH Tide and Submerged Lands Annual Financial Report for the Year Ending June 30, 2016 Overview The City of Newport Beach manages and administers the Tidelands on behalf of all of the people of California and subject to specific legislative grants. The Tidelands within the city’s boundaries are owned by the State of California and overseen by the California State Lands Commission (SLC). Some of the lands are administered by the County of Orange, but still are owned by the State. The City, as a trustee, is required to submit an annual financial report to the SLC. This report enables us to highlight information on the City’s financial administration of the Tidelands in more detail than the City City’s Comprehensive Annual Financial Report (CAFR). This report only presents information on the financial position of the Tide and Submerged Land funds, and does not address the financial position of the City of Newport Beach, CA as a whole. The City’s audited CAFR, can be obtained at: www.newportbeachca.gov/cafr. The City’s granted Tidelands consist primarily of the land bayward of the bulkhead, and portions of the bay beaches in the Lower Bay (Coastward of the Upper Bay Bridge). Newport Beach Tidelands also include large portions of our ocean beaches and land covered by the Pacific Ocean from the shoreline to three (3) miles out to sea. Additionally, some areas within the Tidelands were filled in and developed long ago, and these are known as filled Tidelands. The portion of State Tidelands administered by the City is illustrated on the map below: 3 Guiding Legislation The granted Tidelands must be used for purposes consistent with the public trust. Legislation known as the Beacon Bay Bill, adopted in 1978 and subsequently amended multiple times, is the guiding document that outlines how the City is to use and manage Tidelands, as well as how the City accounts for revenues and expenditures generated within Tidelands. According to the Bill, Tidelands can only be used for purposes in which there is a general statewide interest. These purposes are generally as follows:  Establishing, improving, and operating a public harbor.  Establishing, maintaining, and operating wharves, docks, piers, slips, quays, ways, and streets, or utilities, to promote commerce, fishing, or navigation.  Establishing, improving, and operating beaches, marinas, aquatic playgrounds, and similar recreational facilities open to the public.  Preserving, maintaining, and enhancing Tidelands in their natural state for use in scientific study, open space, and wildlife habitat. The City has the power to regulate the use of Tidelands through leases, permits, policies, and ordinances that are consistent with the trust and relevant legislation. Additionally, the Public Trust Doctrine and the California Constitution advise us. The Public Trust Doctrine says that: …the Legislature has the power to delegate the management responsibility of tidelands and submerged lands to local governments. When it does so, these lands are known as granted lands, and the grantees that manage them must ensure that they are used in ways that are consistent with the public trust and with any other conditions the Legislature imposes… The State Constitution (Article XVI, Section 6) says that: …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… Accounting for Tidelands Revenues and Expenditures Funds are used by the City as a means to track and control resources intended for specific purposes. The Tidelands funds are utilized to control and manage resources intended for purposes described in the Beacon Bay Bill. At this time, the City uses a two-fund approach to track and control resources intended for Tidelands accounting purposes. Operating Fund The Tidelands Operating fund is used to account for revenues related to the operation of the Tidelands under City jurisdiction, including beaches and marinas, and the related expenditures. Revenue from tideland operations includes, but is not limited to, rents from moorings, piers, and leases, as well as income from parking lots, meters, and the sale of oil. Funds intended for the Upper Bay Restoration are also accounted for in this fund in a separate reserve account. Harbor Capital Fund With the adoption of new permit and the adjustment of lease templates and adjusted commercial and noncommercial tidelands rent to fair market value in the decade of 2010, the City Council asked the State Lands Commission for permission to create a Harbor Capital Fund to sequester incremental increases from resulting tidelands rent adjustments solely finance critical in-Harbor capital improvements, like sea walls repair, dredging, piers, and important amenities. 4 The following illustration identifies the structure of the City’s Tidelands funds and the allocation of revenue between those funds. Additionally, the City has some discretion on the use of Tidelands revenues within the operating and capital funds. Additionally, the City Council formed the Tidelands Management Committee, a committee of three Council members plus seven citizen advisors that meets in public to make recommendations to the City Council on the prioritization and implementation of large infrastructure needs of the harbor through the publicly-available Tidelands Capital Plan. In 2016, the Council has discussed a more formal Tidelands Capital Plan that might be adopted and applied similar to several other “master plans” that the City follows. Advances and the General Fund Subsidy Beginning in FY 2008-09 the City had an opportunity to complete a long-awaited maintenance dredging project within Lower Newport Bay, and a similar opportunity arose to remove sediments not suitable for ocean disposal that sat at the bottom of the Rhine Channel. The timing was critical, as much of the sediment within the Harbor and the Rhine needed a special repository – and that repository was in fill areas at the Port of Long Beach as the Port embarked on a major terminal expansion. To take advantage of the Port’s space for sediment not suitable for ocean disposal (where the sediment would be buried and encased in a support structure and secured), the City Council advanced a loan from the General Fund to the Tidelands Harbor Capital Fund of $9.7 million. In addition, City Council approved another $6.1 million in loan advances to the Harbor Capital Fund to cover the cost of developing the 23-space visitor-serving marina at the Marina Park project on the Peninsula. These advances are non-interest bearing, and are to be paid back to the General Fund from incremental revenue increases generated from certain leases, mooring rents, and commercial and residential pier rents. The balance of advance due to the General Fund as of June 30, 2016 is $14.8 million. Please see the notes to the financial statement for the repayment schedule. Historically, the Tidelands Operating fund does not generate sufficient revenue to cover the full cost of operations – in large part because of the public safety costs (lifeguarding, EMS response, and police 5 services) associated with the ocean beaches. This is still the case in FY 2015-16. Due to the ongoing gap between revenues and expenditures, the City’s General fund transfers money to subsidize the operations of the Tidelands Operating fund, on an annual basis. As Tidelands revenues and expenditures fluctuate year to year, the General fund subsidy also fluctuates. For FY 2015-16 the general fund transferred $6.00 million to subsidize the Tidelands Operating fund. Revenues The Beacon Bay Bill requires the City to set up a separate Tidelands trust fund or funds, and mandates that the City deposit into these funds “all moneys received directly from, or indirectly attributable to…” the granted Tidelands in the City. Revenue from all sources total $13.3 million for FY 2015- 16. The allocation of revenue may be based on specific locations, or on a percentage located within the Tidelands. For instance, several leases are split between the General fund and the Tidelands Operating fund based on the location of specific rental units, or based on the percentage of units located within the Tidelands. Revenues attributable to the Tidelands are deposited and accounted for in the Tidelands funds, consistent with grant and trust requirements. As noted, the City has committed to using revenues generated by certain incremental increases in rental rates for leases, moorings, and piers over designated base years to support Harbor related capital improvements in the Harbor Capital Fund. This incremental increase consisted of $400,000 in increased revenues from Balboa Yacht Basin rentals of slips, apartments, and garages; $1.1 million from Balboa Bay Club; $788,000 from onshore, offshore, and County-managed guest moorings; and $72,000 from residential piers.   Why aren’t property taxes and other  taxes allocated to the Tidelands trust?   Very simply, the property owner or  trustee of the property is not the  intended recipient of the tax.  For  example, all revenue from property taxes  are intended for local governments, not  the propery owner or trustee of the  property.  Regardless of who owns or  operates the Tidelands property, the 1%  property tax is distributed to local  jurisdictions in accordance with Senate  Bill 154 passed in 1978 and amended  thereafter. This distribution formula  includes counties, cities, special districts  but does not include the property owner  or trustee of the property.  6 The table to the right shows the top eleven Tidelands fund revenue producers for FY 2015-16. Of the total $13.3 million in revenue attributable to both Tidelands funds, property income is the primary source. Combined Tidelands property income is $13.1 million, or 98% of FY 2015-16 revenues, and is made up of $7.1 million from leases, $3.1 million from parking lots, $738,000 from the sale of oil, and $2.0 million from rents for moorings, residential piers and commercial marina activities. Lease revenue of $7.1 million consists of the following: 1) $4.13 million from the Balboa Bay Club Lease. Per the amendment to the ground lease last year with the Balboa Bay Club and the State Lands statute, revenues from the Balboa Bay Club are split, 95% to Tidelands operating fund and 5% to the State Lands Commission’s Land Bank fund. After five years, they will be modified 90% to Tidelands operating fund and 10% to the State Lands Commission’s Land Bank fund. 2) $1.1 million from Balboa Yacht Basin leases for slips, apartments, garages, and electricity. Balboa Yacht Basin revenues are split 53% to the General fund and 47% to Tidelands based on the percentage of area in the Tidelands. 3) $1 million from Beacon Bay residential leases. Tidelands-related Beacon Bay lease revenues are split 80% to the Tideland Operating fund, 10% restricted within the Tidelands Operating fund for Upper Newport Bay Restoration, and 10% deposited in the Land Bank fund held and administered by the State Lands Commission. Some of the Beacon Bay residences are actually on uplands, and lease revenue from these properties goes to the General Fund. 4) The remaining $831,000 is derived from a variety of smaller leases. Parking revenue of $3.1 million is made up of $1.8 million from the Balboa Parking Lot, $951,000 from the Ocean front Lot and $359,000 from a combination of smaller lots. The City received $737,952 in revenues from the sale of oil. During FY 2015-16, 23,605 barrels of oil were produced from 11 working wells located in West Newport. The City has set aside $560,000 in the Tideland’s Operating fund for future improvements to these oil wells, but as of the date of this report, no determination has been made to proceed with these improvements. Newport Beach is home to approximately 4,300 boats, 1,200 moorings, 882 residential piers and many commercial slips and ties, resulting in $2.1 million in revenue from rentals, including $1.5 million in revenue from off-shore, on-shore, and county managed guest moorings, $191,000 from residential piers, and $385,000 from commercial piers. Additional revenue sources include: 1) licenses and permits of $41,000, derived from pier transfer fees and live aboard permits, 2) $11,000 in charges for services from investigative fees, 3) $182,000 from interest income as well as 4) $6,000 from fines and forfeitures for administrative fines, and abandoned vessels. Top Tidelands Revenue  Producers Tide and  Submerged Land  Operating  Tide and  Submerged Land  Capital Tide and  Submerged Land  Total  Balboa Bay Resort 3,011,162$          1,114,377$         4,125,539$          Balboa Pier Parking Lot 1,787,944            ‐                       1,787,944            Beacon Bay Residences 1,033,975            ‐                       1,033,975            Oceanfront Parking Meters 950,777               ‐                       950,777               Petroleum Royalties 737,952               ‐                       737,952               Balboa Yacht Basin Slips 652,568               361,599              1,014,167            Offshore Moorings 623,171               541,602              1,164,773            Commercial Piers 380,933               ‐                       380,933               Residential Piers 117,800               72,274                190,074               Moorings Guest ‐                        183,210              183,210               Onshore Moorings 69,546                  63,158                132,703               Totals 10,848,681$       2,460,030$        13,308,712$      Top Tidelands Revenue Producers Note: "Total" includes other Tidelands revenue besides the top revenue producers. 7 Expenditures Generally, the Beacon Bay Bill permits the City to expend the revenues accruing from use of the Tidelands for the management, operation, and control of the lands and/or any improvements, betterments, or structures, as well as for any use that furthers the purposes of the trust. Total tidelands expenditures for FY 2015-16 totaled $18 million. The City’s expenditure approach is reviewed regularly between City staff and SLC staff. Direct Costs are those activities, programs, or functions whose primary purpose wholly or substantially benefit the Tidelands. These expenditures are charged directly to the activity, program, or function that benefits from them. There are currently three types of expenditures charged directly to the Tidelands funds; 1) Harbor Resources division operating costs of $2.2 million; 2) MOD-General Services operating costs of $667,000; and 3) capital projects directly benefiting, or located within the Tidelands of $3.4 million. Indirect Costs are those City-wide costs for services that support a variety of City activities, programs, and functions and are centrally budgeted, examples include but are not limited to; 1) Public safety services to Tidelands users, including Police, Fire, and Marine safety services of $9.2 million; 2) Public Works services that protect or otherwise support the Tidelands, such as water quality, stormwater protection, infrastructure maintenance and municipal operations of $2.0 million; 3) Community Services (such as parking operations) of $375,000; and 4) General government administrative services of $417,000 including City Council, City Clerk, City Attorney, City Manager, Finance, Human Resources, and building use which generally consists of the Tidelands’ share of this overhead. The City uses outside cost allocation experts, currently MGT of America Inc. (MGT), to develop the indirect cost allocation plan that identifies and distributes these indirect costs to all operating activities, programs, and functions within the City’s organizational structure. This allocation plan includes allocation of costs to the Tidelands Operating fund. The cost allocation plan takes a detailed approach to analyzing the costs attributable to Tidelands Operations. MGT interviewed staff in each department and analyzed data within each central activity to determine: 1) what services are provided; 2) which functions or departments receive benefits from these services; and 3) how to determine the amount of benefit received, or what is the best driver for allocating centrally budgeted services to programs or functions receiving the benefits. For example Public Works salaries and operating expenses may be allocated based on a time study of which programs or functions were worked on, Accounts Payable salaries and operating expenses may be allocated on the number of checks processed for a program or function, City Clerk salaries and operating expenses may be allocated based on the number of agenda items per program or function. There are many alternative drivers to choose from, and the City relies on MGTs expertise in selecting these drivers. The drivers are used to allocate General government activities among the City’s departments and divisions, then administrative costs within the departments and divisions are allocated to the various activities, programs, and functions of the City using similar methodologies. Indirect costs are added to direct costs, to determine the full cost of each activity, program, and function. Finally, a share of the full cost of activities, programs, and functions, that provide services to the Tidelands are allocated, using the best drivers and methodologies identified by MGT. For FY 2015-16 total expenditures of $18 million for both funds included indirect cost allocations to the Tidelands Operating fund totaling $12 million. 8 The City regularly reports its expenditure information, including the indirect cost allocation, to the State lands Commision for review and approval to ensure the City is meeting all the obligations of the Beacon Bay Bill; using Tidelands funds only for Tidelands purposes. Conclusion The City endeavors to manage and administer Tidelands in accordance with the appropriate legislation while working with the California State Lands Commission to ensure Newport Harbor continues to be a prosperous and effective harbor. It is always fair to re-evaluate both Tidelands revenue sources and expenditure purposes on a regular basis, and the City attempts to do so with the City Council, the community, and the State Lands Commission. Changes to the allocations, if consistent with the Trust and related legislation, should be viewed both on their merits and how they might impact City operations, services, and other funds. Comprehensive financial detail on City of Newport Beach Tidelands can be found in the financial statements that follow. 9 CITY OF NEWPORT BEACH Tide and Submerged Lands Balance Sheet June 30, 2016 Tide and Tide and Tide and Submerged Land Submerged Land Submerged Land Assets Operating Harbor Capital Total Funds Cash and investments 4,405,879$ 7,066,199$ 11,472,078$ Receivables: Accounts (net of allowance)861,966 491,567 1,353,533 Intergovernmental receivables - 60,541 60,541 Total assets 5,267,845$ 7,618,307$ 12,886,152$ Liabilities, Deferred inflows of resources and Fund Balances Liabilities: Accounts payable 651,863$ 145,946$ 797,809$ Accrued payroll 8,994 - 8,994 Deposits payable 152,478 - 152,478 Advance from other funds (note 2)- 14,809,559 14,809,559 Total liabilities 813,335$ 14,955,505$ 15,768,840$ Deferred Inflows of Resources: Unavailable revenue - 491,567 491,567 Total deferred inflows of resources -$ 491,567$ 491,567$ Fund balances (deficit): Restricted: Upper Newport Bay Restoration 659,077 - 659,077 Other 2,605,485 - 2,605,485 Encumbrance 629,948 - 629,948 Committed: Oil and Gas Liabilities 560,000 - 560,000 Unassigned:- (7,828,765) (7,828,765) Total fund balances (deficit)4,454,510 (7,828,765) (3,374,255) Total liabilities and deferred inflows of resources and fund balances 5,267,845$ 7,618,307$ 12,886,152$ See accompanying notes to basic financial statements 10 Tide and Tide and Tide and Submerged Land Submerged Land Submerged Land Revenues Operating Harbor Capital Total Funds Licenses and permits 40,673$ -$ 40,673$ Charges for services 10,798 - 10,798 Fines and forfeitures 5,620 - 5,620 Investment income 60,611 47,224 107,835 Net increase in fair value of investments 41,567 32,386 73,954 Income from the use of property and money Parking Balboa Lot 1,787,944 - 1,787,944 Other parking 1,309,378 - 1,309,378 Total Parking 3,097,322 - 3,097,322 Leases Balboa Yacht Basin Slips (net of increment)652,568 361,599 1,014,167 Balboa Yacht Basin Garages (net of increment)35,344 24,288 59,632 Balboa Yacht Basin Apartments (net of increment)30,456 14,361 44,817 Balboa Yacht Basin Electricity 20,090 - 20,090 Balboa Bay Club 3,011,162 1,114,377 4,125,539 Beacon Bay 1,033,975 - 1,033,975 Other Leases 825,696 5,552 831,248 Total Leases 5,609,291 1,520,176 7,129,467 Rent Moorings Off-Shore (net of increment)622,735 541,602 1,164,337 Moorings On-Shore (net of increment)69,546 63,158 132,703 Moorings Guest (net of increment)- 183,210 183,210 Residential Piers Rent (net of increment)117,800 72,274 190,074 Commercial Piers Rent (net of increment) Large Com Marina Rent 243,333 - 243,333 Small Com Marina Rent 45,656 - 45,656 Vessel Charter Bus Rent 23,985 - 23,985 Vessel Rental Facilty Rent 17,651 - 17,651 HOA <15,000 sqf Rent 3,873 3,873 Yacht Club Guest Slip Rent 12,658 - 12,658 Restaurant Rent 7,517 - 7,517 Shipyard Rent 12,574 - 12,574 Other Rent - City Tld (Harbor Marina)4,758 - 4,758 Other Rent - Bldg over Tld 4,619 - 4,619 Fuel Dock - Base/Plus Rent 4,209 - 4,209 Sport Fishing Charter Rent 3,973 - 3,973 Total Commercial Piers Rent 384,806 - 384,806 Total Rent 1,194,888 860,243 2,055,131 Sale of Oil 737,952 - 737,952 Total property income 10,639,453 2,380,420 13,019,873 Other 49,960 - 49,960 Total Revenues 10,848,681$ 2,460,030$ 13,308,712$ See accompanying notes to basic financial statements CITY OF NEWPORT BEACH Tide and Submerged Lands Statement of Revenues, Expenditures, and Changes in Fund Balance For the Fiscal Year Ended June 30, 2016 11 Tide and Tide and Tide and Submerged Land Submerged Land Submerged Land Expenditures Operating Harbor Capital Total Funds General government: City council - Indirect 7,159$ -$ 7,159$ City clerk - Indirect 23,557 - 23,557 City attorney - Indirect 72,920 - 72,920 City manager - Indirect 103,250 - 103,250 Finance - Indirect 80,857 - 80,857 Human resources - Indirect 9,472 - 9,472 Building Use - Indirect 120,000 - 120,000 Total General government 417,215 - 417,215 Public safety: Police - Indirect 2,772,250 - 2,772,250 Fire - Indirect 2,065,524 - 2,065,524 Marine safety - Indirect 4,358,828 - 4,358,828 Total Public safety 9,196,602 - 9,196,603 Public works: Public works - Indirect 458,834 - 458,834 MOD -General services - Direct 666,846 - 666,846 MOD- General services - Indirect 1,579,252 - 1,579,252 Total Public works 2,704,932 - 2,246,099 Community services: Harbor resources - Direct 2,247,798 - 2,247,798 Parking operations - Indirect 375,375 - 375,375 Total Community services 2,623,173 - 2,623,173 Capital improvement projects: - All are Direct Marina Park - 2,735,946 2,735,946 Grand Canal Emergency - 270,126                      270,126 Balboa Island Seawall - 87,513 87,513 Harbor Dredging - 33,573 33,573 Lower Castaways Park - 16,966 16,966 Semeniuk Slough Dredging 87,467 - 87,467 Seawall/Bulkhead Repair 59,120 - 59,120 Bay Beach Sand Management 59,090 - 59,090 Newport Pier Building Platform 49,517 - 49,517 Tidegate Retrofit 272 - 272 Total Capital improvement projects 255,466 3,144,123 3,399,589 Total Expenditures 15,197,390$ 3,144,123$ 17,882,679$ Other financing sources Transfers in 5,971,756 - 5,971,756 Total other financing sources 5,971,756 - 5,971,756 Net change in fund balance 1,623,048 (684,093) 938,955 Fund balance, beginning 2,831,462 (7,144,672) (4,313,210) Fund balance, ending 4,454,510$ (7,828,765)$ (3,374,255)$ CITY OF NEWPORT BEACH See accompanying notes to basic financial statements Tide and Submerged Lands Statement of Revenues, Expenditures, and Changes in Fund Balance For the Fiscal Year Ended June 30, 2016 Continued 12 NOTES 1. Basis of Accounting and Measurement Focus The basic financial statements of the Newport Beach, CA Tide and Submerged Lands are comprised of fund financial statements, and notes to the financial statements. The fund financial statements utilize the current financial resources measurement focus and thus have a short-term focus measuring inflows of current spendable assets. The resulting net difference between current financial assets, deferred outflows of resources, current financial liabilities and deferred inflows of rwourcesis otherwise known as fund balance. Fund balance is similar to net working capital in the private sector, a measure of the entity’s ability to finance activities in the near term. Tidelands are accounted for in two Special Revenue funds. These Special Revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for the Tide and Submerged Lands. Fund descriptions are: Tide and Submerged Land – Operating Fund is a Special Revenue fund used to account for revenues related to the operation of the City’s tidelands, including beaches and marinas, and the related expenditures. Revenue from tideland operations includes, but is not limited to, rents from moorings, piers, and leases, as well as income from parking lots, meters, and the sale of oil. Tide and Submerged Land – Harbor Capital Fund is used to account for incremental increases in revenue from certain property lease, pier, and mooring rentals that exceed Council designated base year revenue amounts, as well as other designated revenues and the related expenditures for capital projects, maintenance, and servicing of loan advances from the General fund. These funds are presented using the modified accrual basis of accounting. Their revenues are recognized when they become measureable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days for all revenues in the Tidelands fund. 2. Advances Advances from the General fund to the Tide and Submerged Land – Harbor Capital fund are primarily for the purpose of funding expenditures for dredging and other high impact projects within the City’s tidelands, specifically within, or benefitting the Newport Harbor. Advance From Advance To General Fund 14,809,559$ -$ Tide and Submerged Land - Harbor Capital Fund - 14,809,559 Total 14,809,559$ 14,809,559$ The advances will be paid back to the General fund from incremental revenue increases generated from certain leases, mooring rents, and commercial and residential pier rents. Below is the repayment schedule: 13 Fiscal Year Advance #1   Dredging  Projects  Repayment Advance #2  Marina Park  Project  Repayment Total  Repayment 2017 750,000       132,900       882,900$        2018 750,000       250,000       1,000,000$    2019 750,000       250,000       1,000,000$    2020 750,000       500,000       1,250,000$    2021 750,000       500,000       1,250,000$    2022 750,000       500,000       1,250,000$    2023 750,000       500,000       1,250,000$    2024 750,000       500,000       1,250,000$    2025 750,000       500,000       1,250,000$    2026 750,000       500,000       1,250,000$    2027 750,000       500,000       1,250,000$    2028 426,659       500,000       926,659$        2029 500,000       500,000$        2030 500,000       500,000$        Total 8,676,659$ 6,132,900$ 14,809,559$  Harbor Capital Fund Advance ‐ Proposed  Repayment Terms  (Zero Interest Advance) 3. Revenue In some instances, governmental accounting standards permit revenues in governmental funds to be reported net of certain costs. Accordingly, other leases revenue of $831,248 is reported net of $189 of estimated uncollectible customer accounts, and parking meter revenues are reported net of $144,485 of related credit card service costs. 14 City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 (949) 644-3123 www.newportbeachca.gov/tidelands 58 f t . A D C B Z Marker325 ft.300 ft.255 ft.250 f t . 4.85 acres I 0 200100 Feet Council ApprovedTrial Anchorage Location A: 33.6188, -117.9266 B: 33.6191, -117.9262 C: 33.6182, -117.9245 D: 33.6172, -117.9255 Z Marker, 33.6177, -117.9247 Final Recommendation TU R N IN G BA S IN An Overview of Tidelands Revenues and ExpendituresDan Matusiewicz, Finance DirectorCity of Newport Beach Purpose of This PresentationOverview of Tidelands AccountingWhile the accounting periodically is of interest to the public, Harbor Commission’s larger mandates include:1. Advising the City Council on proposed harbor-related improvements2. Advising the City Council on the implementation of assigned parts of the Tidelands/Harbor Capital Plan2 Governance1st• People of California• The owners of Public Trust Lands2nd• California State Legislature• Assigns management and operation of Public Trust Lands to City via Beacon Bay Bill3rd• State Lands Commission (SLC)• Oversees our compliance with Beacon Bay Bill• SLC also manages some Public Trust Lands directly4th• City of Newport Beach• Manages Public Trust Lands per Beacon Bay Bill, Public Trust Doctrine, CA Constitution and Newport Beach Municipal Code3 What Are City Tidelands?•Public Trust Lands granted to the City by the State that generally include:Lower Bay Coastward of the Upper Bay BridgeLarge portions of our ocean beaches and land covered by the Pacific Ocean from the shoreline to three miles out to seaLands that were previously submerged that were filled by developers years ago –Filled Tidelands4 5Complex Boundaries – Sample Map 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)6 Tidelands Overview7 Tidelands Revenues and Expenditures Sources of Tidelands Revenues9Actual% of TotalActual% of TotalActual% of Total2016 Revenue 2016 Revenue 2016 RevenueRevenues Licenses and permits 40,673$ 0.4% -$ 0.0% 40,673$ 0.3% Charges for services 10,798 0.1% - 0.0% 10,798 0.1% Fines and forfeitures 5,620 0.1% - 0.0% 5,620 0.0% Investment income 102,178 0.9% 79,610 3.2% 181,788 1.4% Property income 0.0% - 0.0% Parking 3,097,322 28.6% - 0.0% 3,097,322 23.3% Leases 0.0% - 0.0% Balboa Yacht Basin 738,458 6.8% 400,248 16.3% 1,138,706 8.6% Balboa Bay Club 3,011,162 27.8% 1,114,377 45.3% 4,125,539 31.0% Beacon Bay 1,033,975 9.5% - 0.0% 1,033,975 7.8% Other Leases 825,696 7.6% 5,552 0.2% 831,248 6.2% Rent 0.0% - 0.0% Moorings 692,281 6.4% 787,970 32.0% 1,480,251 11.1% Piers 502,606 4.6% 72,274 2.9% 574,880 4.3% Sale of Oil 737,952 6.8% - 0.0% 737,952 5.5% Other 49,960 0.5% - 0.0% 49,960 0.4% Total revenues 10,848,681$ 100% 2,460,031$ 100% 13,308,712$ 100%Operating Capital Combined Revenues Not Included•Taxes▫Sales Taxes Generated by Tidelands visitors▫Positive Influence on Property Taxes on upland properties▫Possessory Interest on Tidelands Leases▫Property Tax in Lieu of Vehicle License Fees ▫Unsecured Property Tax (Boats & Office Equipment)▫Transient Occupancy Tax (UTOT)▫Marine Charter Tax•Recreation Fees On Beaches▫These are cost recovery▫No amount charged for use of the Tidelands property10 Tidelands FundsOperationsCapitalAll Tidelands RevenueBB and BBC represents Beacon Bay and Balboa Bay Club respectively.Upper Bay Restoration10% of BBLand Bank10% of BB & BBC to SLC11 Tidelands FundsOcean CapitalHarbor Capital OperationsIncremental rent revenues from piers, moorings, and yacht basinTidelands RevenueCapitalBaseAll Tidelands RevenueBB and BBC represents Beacon Bay and Balboa Bay Club respectively.Upper Bay Restoration10% of BBLand Bank10% of BB & BBC to SLC12 Parking Revenues13 Leases – Balboa Bay Club14 Leases – Balboa Bay Club15 Leases – Balboa Yacht Basin & Beacon Bay16 Summer Crowds on the Beach17 Summer Crowds resulting in increased Life Safety efforts18 Summer Crowds resulting in increased Police Enforcement Activities•19 Expenditures Regularly Exceed Revenues20 Operating Capital Combined Operating Capital Combined Operating Capital Combined Operating Capital CombinedRevenues Intergovernmental -$ -$ -$ -$ 516,133$ 516,133$ -$ -$ -$ -$ -$ -$ Licenses and permits 60,923 - 60,923 41,496 - 41,496 53,982 - 53,982 40,673 - 40,673 Charges for services 171,582 - 171,582 55,661 - 55,661 215,447 - 215,447 10,798 - 10,798 Fines and forfeitures 2,115 - 2,115 1,041 - 1,041 6,610 - 6,610 5,620 - 5,620 Investment income (11,945) - (11,945) 62,896 2,302 65,198 44,312 36,673 80,985 60,611 47,224 107,835 Net increase in fair value of investments - - - 11,990 5,413 17,403 14,990 7,790 22,780 41,567 32,386 73,953 Property income 11,308,379 924,508 12,232,887 11,524,465 2,857,827 14,382,292 10,860,087 2,583,703 13,443,790 10,689,412 2,380,420 13,069,832 Donations - - - - - - - - - - - - Other 131 643,081 643,212 263 601,413 601,676 1,033 - 1,033 - - - Total revenues 11,531,185 1,567,589 13,098,774 11,697,812 3,983,088 15,680,900 11,196,461 2,628,166 13,824,627 10,848,681 2,460,030 13,308,711 Expenditures Current: General government 394,762 - 394,762 396,840 - 396,840 753,787 - 753,787 792,590 - 792,590 Public safety 7,385,094 - 7,385,094 7,812,378 - 7,812,378 8,927,666 - 8,927,666 9,196,603 - 9,196,603 Public works 3,600,247 - 3,600,247 3,589,713 - 3,589,713 2,976,103 - 2,976,103 2,996,261 - 2,996,261 Community development - - - - - - - - - 13,249 - 13,249 Community services 2,301,235 - 2,301,235 2,206,094 - 2,206,094 1,886,066 - 1,886,066 1,943,220 - 1,943,220 Capital outlay 647,455 4,313,127 4,960,582 716,276 3,114,168 3,830,444 1,565,063 1,830,337 3,395,400 255,466 3,144,123 3,399,589 Debt service (note 6):- Principal - - - - - - - - - - - - Interest and fiscal charges - - - - - - - - - - - - Total expenditures 14,328,793 4,313,127 18,641,920 14,721,301 3,114,168 17,835,469 16,108,685 1,830,337 17,939,022 15,197,389 3,144,123 18,341,512 Excess (deficiency) of revenues over expenditures (2,797,608) (2,745,538) (5,543,146) (3,023,489) 868,920 (2,154,569) (4,912,224) 797,829 (4,114,395) (4,348,708) (684,093) (5,032,801) 20162013 2014 2015 Cost Allocation21General Fund Expenditures*Expenditures Allocated To Tidelands% Allocated To TidelandsGeneral Government 14,254,297$         417,215$              2.9%Public Safety   Police 52,877,199$         2,772,250$           5.2%   Fire 42,764,237           6,424,353             15.0%               Subtotal Public Safety95,641,436           9,196,603             Public Works    Public Works 7,534,566$           420,021$              5.6%   Municipal Operations 25,121,299           1,618,065             6.4%              Subtotal Public Works32,655,865$         2,038,086$           Community Development 10,783,781$          ‐$                     0.0%Community Services   Parking Operations 1,938,361$           375,375$              19.4%   Library Services 7,927,063              ‐                          Recereation and Senior Services 10,807,642            ‐                                     Subtotal Community Services20,673,066$         375,375$              1.8%                   Total Expenditures174,008,445$       12,027,279$         6.9%FISCAL YEAR 2016 COST ALLOCATION* General Fund Expenditures before allocation to Tidelands General Readiness to Serve – Filled Tideland as a ratio of total City area (2%)22 Primary Responders - Service Areas 1, 2 & 4 as a ratio of total City Area (14%)23 City’s New Detailed Tidelands Financial Statement24 More than Tidelands Accounting… What Harbor Improvements need to be completed and how shall they be prioritized? Lower Bay Dredging26 Seawall Condition•Seawall Age: 73 – 82 years•Overall Condition: Fair▫Widespread cracking, some concrete spalling and rebar corrosion.•Seismic concerns•Estimated useful life: 10 – 25 yearsDistresses in Seawalls27 Flooding – December 2010Waves splashing over the Balboa Island seawallStreet flooding overtopping curb28 Flooding – December 2010City personnel pumping flood water back into the bayOverhead picture29 Not Just A Short Term View30Estimated total cost to fund all projects in the Harbor Capital Plan over the next 30 Years:$139 MillionProjectFY Const Start YearFV Cost Est @2.5% GrowthNet Proposed CostBulkhead Cap (Balboa Island N & S): Extend 2017 $6,457,500 $6,457,500Bulkhead (Balboa Island, West End): Replace 2017 $5,063,500 $5,063,500Bulkhead (Balboa Island, N, S, E & GC): Boardwalk & Perimeter Drainage System only (Little Island not include ~42k SF)2017 $1,886,000 $1,886,000Dredging (Grand Canal): 2017 $370,025 $370,025Bulkhead Cap (American Legion): Repair 2017 $302,580 $302,580Public Pier (29th St): Gangway & Float 2017 $102,500 $102,500Dredging Equipment: Disposal Scow Purchase (Proposed?) 2018 $2,000,000 $2,000,000Dredging: Lower Bay (Channels - Ongoing Maintenance) 2019 $4,846,008 $4,846,008Lower Castaways: Bulkhead Only 2020 $1,111,540 $1,111,540Public Piers: Gangway & Float (multiple locations) 2020 $866,493 $866,493Navigation Markers: Convert Federal Stationary Markers to Floats 2020 $55,191 $55,191Lower Castaways: Park Only 2022 $4,638,774 $4,638,774Dredging: Newport Island Area (Channels) 2022 $869,770 $869,770Vessel Sewage Pumpout Facilities: Replace 2023 $178,303 $178,303Bulkhead (Balboa Island, N, S, E & GC): Replace Bulkhead 2025 $37,490,866 $37,490,866Balboa Yacht Basin Marina (Slips): Replace 2025 $7,518,155 $7,518,155Dredging (Balboa Yacht Basin): 2025 $1,598,545 $1,598,545Rhine Wharf Boardwalk: Major Repair 2029 $206,777 $206,777Dredging: Upper Bay (Channels & Catch Basins) 2030 $27,552,990 $27,552,990Public Beaches: Sand Nourishment (25k yards) 2031 $1,810,373 $1,810,373Public Piers (multiple locations) 2034 $1,154,147 $1,154,147Entrance Jetty: Maintenance 2036 $4,915,849 $4,915,849Bulkhead (American Legion): Replace 2037 $2,144,490 $2,144,490Public Piers (multiple locations) 2037 $478,681 $478,681Bulkhead (Rhine Channel): Replace 2040 $2,577,434 $2,577,434Bulkhead (West Newport): Replace 2041 $12,131,469 $12,131,469Bulkhead (Corona Del Mar): Replace 2045 $1,360,861 $1,360,861Bulkhead (Promontory Bay): Replace 2045 $9,005,011 $9,005,011Public Pier (Rhine Channel): Gangway only 2047 $129,000 $129,000$0$5,000,000$10,000,000$15,000,000$20,000,000$25,000,000$30,000,000201720192021202320252027202920312033203520372039204120432045Project Expenditures Questions?31 NEWPORT BEACH Harbor Commission Staff Report COUNCIL STAFF REPORT CITY OF March 8, 2017 Agenda Item No. _4_ TO: HARBOR COMMISSION FROM: Shannon Levin, Harbor Analyst- 949-644-3041 shannon@newportbeachca.gov TITLE: Harbor Patrol Update ______________________________________________________________________ ABSTRACT: Harbor Patrol provides a regular update on matters related to Newport Harbor and moorings. RECOMMENDATION: 1. Receive and File. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. The funding for the individual projects will be evaluated separately by the City Council at later dates. 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. 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). NEWPORT BEACH Harbor Commission Staff Report COUNCIL STAFF REPORT CITY OF March 8, 2017 Agenda Item No. _5_ TO: HARBOR COMMISSION FROM: Shannon Levin, Harbor Analyst- 949-644-3041 shannon@newportbeachca.gov TITLE: West Anchorage Summer 2017 and Recommended Path Forward ______________________________________________________________________ ABSTRACT: The Anchorage Subcommittee will lead a discussion on establishing a trial anchorage this summer. RECOMMENDATION: 1. Approve the installation of a temporary anchorage in the Turning Basin, and recommend that staff forward to the City Council for approval; and 2. Review day use moorings outside of Corona Del Mar ocean beach, and direct the ad hoc committee to return at a later date with a recommendation. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. The funding for the individual projects will be evaluated separately by the City Council at later dates. DISCUSSION: During the summer of 2016 a temporary anchorage was installed on a trial basis. Throughout the summer boaters frequented the anchorage with both day and night use. The Anchorage Subcommittee will discuss anchorage options for Summer 2017 including day-use moorings off of Corona del Mar. 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 West Anchorage Summer 2017 and Recommended Path Forward February 8, 2017 Page 2 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. 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). MARGUERITE AVELARKSPUR AVEMARIGOLD AVEORCHID AVEPOINSETTIA AVEJASMINE AVEIRIS AVEPOPPY AVENARCISSUS AVEOCEAN LN SEAVIEW AVE COAST HWY E OCE AN B L V D HAZELDROCEANBLVD GLENDR BREAKERSDR Area #6 Swimming_Areas_MuniCode_Area6.mxd City of Newport BeachGIS DivisionMarch 06, 2017 0 400200 FeetI (Per Municipal Code, Ch. 11.12) Swimming Area #6