1. NMA Report to City Council June 16, 2015 Presented to Newport Beach City Council 1

2. Harbor Commission Recommendations: Fair, Reasonable and FACT based Major Recommendations : Set annual permit fee at $25 per linear foot –Based on 3 fair value methods –Eliminate Marina Index – it is “apples to oranges” 2. Preserve market driven process –Allow mooring permit transfers –Speculation is limited by transparency, frequency & number 3. Set Transfer fee at 100% of proposed annual fee –Increases revenue for the Tidelands –Guarantees fee when mooring is transferred with the sale of vessel 2

3. 3 Measures for Annual Fees (Follows State Land Commission Guidance for Setting Fees) Tidelands Valuation ($21 - $25) Consumer Price Comparable Mooring Index San Diego ($21 - $31) ($25) 3

4. Fair Value Analysis (Section 1 (d) Beacon Bay Bill – no discrimination in rates) CPI Approach –CPI is an accepted method for adjusting fees that have been set appropriately –Depending on the base year chosen, the rate has a range of $21 - $31, given the other methods below, $25 is a reasonable basis Comparable Moorings –Current rate of $55 LF is nearly THREE times the average rate charged in 2015 in other Southern California harbors --- most with mooring amenities superior to Newport Harbor –A reasonable comparison is San Diego adjusted to make a fair comparison given amenities – 40’ mooring = $25 Tidelands Valuation –Based on Rasmuson appraisal effective June 28, 2012 – relied on by City for Residential docks & similar use – boat storage –50 cent rate applied to area occupied by mooring and vessel on an “exclusive use” basis results in annual fee of $21.38 – $25.43 4

5. Tidelands Valuation Example Satellite Picture of J field moorings 2034 sq.ft. for 40’ mooring @ $.50 sq. ft. per Rasmuson is $25.43 per foot 5

6. Permit Transfers A market driven process serves the boating public better than a wait list –In 5 years only one person has come forward from the waitlist to claim a mooring of the 5 available Transferability must be maintained to allow permit holders to recover acquisition costs paid under current transfer laws Concerns about profiteering have never been quantified. Harbor Commission proposal eliminates this concern. Mooring Transfers are not illegal … but value must be given back to the public 6

7. Public Benefit Mooring Permittees give back to the public in several ways: –Annual fees paid into the Tidelands Fund are the highest of any user group for boat storage –Vacant moorings are used by visiting boaters and the fees paid go to the Tidelands Fund –Permittees maintain the mooring tackle to ensure the harbor is a safe haven and safe for navigation for all –Yacht clubs sponsor races & regattas, education, youth programs and community fund raising activities 7

8. Impact Harbor Commission Recommendation Moorings remains the top contributor to the Tidelands Operating and Capital Fund compared to Commercial and Residential Piers Tidelands Total Contributions: –Moorings $973,329 –Residential Piers$176,549 –Commercial Piers$700,715 8

9. Accounting for Tidelands Raises Questions Approved: $6,132,900 for the Marina portion of Marina Park is in a loan to be repaid over 14 years –Question: In 2014 another $2.9 million was apparently expensed for Marina Park. Is there an explanation of cost? It appears that only the Marina portion was approved Feb.12, 2013. 9

10. Budget Consistency “Over-market” mooring fees are not an appropriate solution for harbor budget concerns. NMA respectfully urges the City to avoid budget adjustments in the harbor that reflect City wide budget adjustments Examples: –2014 - 2015 report “Capital Improvements Program By The Numbers” CIP Funding History –Performance Plan adjustments especially 2011 - 2013 for “all other CIP” 10

11. CIP Funding History 2001 - 2015 (graph prepared by Public Works Dept.) 11

12. NMA Recommendations: Adopt Harbor Commission recommendations for Moorings including setting the annual fee at $25 LF and allow permit transfers as proposed Cap CPI increases at 2% (same CPI cap as Residential Pier fees) 12