Legislators seek to put off harbor fund

Two legislators have asked the California State Lands Commission to put off deciding whether to allow the city of Newport Beach to establish a special harbor fund.

The officials want the state to hold off until they can further investigate how that money may be used and a lawsuit filed in February against the city seeking to block the new dock fees is resolved.

In a letter addressed to Lt. Gov. Gavin Newsom, who sits on the commission, state Sen. Mimi Walters (R-Irvine) and Assemblyman Allan Mansoor (R-Costa Mesa) requested that the item on the commission’s April 26 meeting agenda be postponed.

“We want to give it 30 days — give everybody the opportunity to kind of flesh out these details,” said Mansoor’s spokesman, Chad Morgan.

Commission spokeswoman Sheri Pemberton said Wednesday that the item was on the consent calendar, meaning that staff expected the three-member commission to approve it without debate, but that could change.

“As staff, we will inform commissioners of the letter — in particular given that the letter expresses concerns,” she said. “We’ve reached out to the legislative offices to let them know that we’d like to be helpful.”

Bob McCaffrey, chairman of the Stop the Dock Tax Group and Newport Beach Dock Owners Assn., supported Walters and Mansoor’s request.

“We have complained since day one that a lot of money that is collected from the tidelands is used for things that should come out of the general fund,” he said.

But city officials have said that the harbor fund would be aimed at reassuring concerned residents that money raised by dock fee increases would be used exclusively for harbor infrastructure improvements — not for lifeguards at ocean beaches, which had been a concern.

“We thought it was important to the community to set it up as a separate fund in order to make good on that promise we made to use the money for improvements in capital — not salaries or benefits,” City Manager Dave Kiff said Wednesday.

He added that he expected to approve the creation of the fund “fairly easily.”

The City Council voted to move forward with the fund in February, pending the commission’s approval, after a long and contentious debate over the city’s increase of fees for the use of state-owned, city-administered tidelands.

This included large rent increases for residential pier owners, commercial marinas and fuel docks. While the city said it needed to bring rates in line with “fair market values,” many residents bitterly opposed the increases, saying they were too steep and unfairly set.

Mansoor and Walters wrote that they are “reviewing reports that the city’s management of the existing Newport Harbor tidelands fund may warrant review by the Joint Legislative Audit Committee.”

In order to find out if that review is necessary, however, the interested parties hope to first consult with the commission.

“We would like to review [residents’ concerns] prior to [the State Lands Commission] action and will not be able to do so prior to the April 26 meeting,” the letter says.

Pemberton said that depending on the terms of the statute that originally granted the care of state lands to the city, money generated from tidelands use fees can legally be used for a variety of purposes.

Maritime uses, commerce navigation, fishing, open space preservation, swimming, boating, as well as pay for staff who work to administer such activities, are all legal uses for the money, generally speaking, she said.

She said she couldn’t comment specifically on the uses of Newport’s tidelands fund.

The letter also cites a lawsuit the Newport Beach Dock Owners Assn. filed in February, which alleges that the city violated a state transparency law by discussing the fee increases outside the public eye.

“No fees will be collected until this litigation is resolved. Therefore, this item is unnecessary at this time,” the letter says.

However some of the fees have already been levied this year and no legal measures, such as an injunction, are in place that would halt their collection, officials said.

Furthermore, the lawsuit could be dismissed as early as May 16, said Assistant City Attorney Michael Torres.

The city filed a document Friday in response to the suit, which claims that even if everything in the complaint were true, the city’s actions still wouldn’t have violated the law, he said.

If at the May hearing “the city prevails,” he said, “they could kick out the entire complaint.”

Torres said he was surprised that the legislators objected to the creation of the fund.

“We did this in response to some of the questions we were getting about how the rent is going to be used,” he said. “We wanted to assure them that money that comes from the harbor goes back to the harbor.”