Newport cuts residential dock fees by up to half

Residential dock fees in Newport Beach are being substantially reduced – some by as much as half – under a plan the City Council approved Tuesday night.

After heated debate among council members, they voted 4 to 1 to reduce annual fees for all residential dock owners by about 2.5 cents per square foot, effective immediately. The council also decided to add language to pier permits to protect piers from unlawful seizure, and to adjust the amount of dock space considered usable and therefore subject to fees.

Mayor Ed Selich and Councilman Marshall “Duffy” Duffield recused themselves from the discussion and vote. Councilman Keith Curry dissented, saying the council’s action would benefit a few property owners at the potential expense of the rest of the city.

In 2012, the council approved an ordinance that increased dock fees for residential piers, fuel docks and commercial marinas on state-owned, city-administered tidelands. The decision meant that pier owners would, by 2017, be paying 52.5 cents per square foot of usable dock space instead of the flat $100 a year they were paying.

Fees were eliminated for about 400 pier owners in 2012 after the council found that the piers were not on state-owned tidelands.

Fees for the remaining dock owners started at 12.9 cents per square foot in 2013 and have increased about 10 cents per square foot each year.

Homeowners also previously were charged for the U-space between residential piers, amounting to 313,506 square feet throughout the tidelands. This equated to annual rent of $400 to $2,000 for residential dock owners, according to city documents.

Now, the U-space charge is eliminated and residents this year will pay about 30 cents per square foot for their docks instead of 32.9. By 2017, they will pay 50 cents per square foot instead of 52.5.

The move provides significant savings to residents with large piers and a more modest reduction for those with smaller piers, according to city calculations.

Because the water in the U-space is considered public, and therefore usable by anyone, it isn’t fair to charge homeowners for that area, Councilman Kevin Muldoon said.

However, some residents argued that the area is available for public use only when a homeowner’s boat is away from the dock. Boats often are sitting in the U-space and it’s not available for the public, they said.

After recalculating the dock areas, city staff estimated that the fee changes will result in a revenue reduction for the city of $125,252 per year by 2017. Staff previously estimated the revenue loss at $179,107 per year in the same time frame.

Revenue from the U-space charge was placed in a fund for harbor improvements, city staff said.

The council in 2012 said the fee increases were necessary to meet state requirements that the city charge “fair market rents” on state-owned land.

However, opponents – many from a group called Stop the Dock Tax – said the fees were an unnecessary money grab.

“It lit a fire in the community that has been smoldering for years,” said Bob McCaffrey, head of Stop the Dock Tax.

Current council members Scott Peotter, Diane Dixon, Muldoon and Duffield, who campaigned in last year’s election on a slate known as “Team Newport,” vowed to review the dock fees if they were elected in November. They received aid from McCaffrey during their campaign.

Curry claimed that the fee reductions will benefit a few homeowners who “through campaign contributions believe they can dictate public policy.”

The larger worry, Curry said, is that the State Lands Commission, which entrusted the city as the tidelands’ steward, could assume control of the land if it believes the city is mismanaging it. That could result in higher fees – not subject to city control – on residential dock owners, he said.

According to a city staff report, State Lands Commission staff is not opposed to the 2.5-cent fee reduction. However, the agency’s staff indicated that its established practice is to include the U-space in the pier footprint, “as doing so reflects what they see as a private use of public property,” the report states.

Muldoon said it is unlikely the commission would reclaim the land, given the extensive legal process that would have to occur to do so.

“At the end of the day, you can’t charge someone for something that they don’t have exclusive right to,” he said.