Restore Financial Stability to the District

By Lisa C. Fernandez

Increase revenue by developing Oyster Point, obtaining grant funding, and reducing expenses.

Some people say that we are in great financial shape because our cash balance is over $9 million. Think how much money would be in your account if you hadn't had to make mortgage payments for five years, and then began paying interest only.

As an accountant with the Harbor District for over 2 ½ years, I wrote every check that went out the door. I know how the money was spent, not spent, or in some cases misspent.

Let's have a look at the latest financial reports from the District for the fiscal year ending June 2002. Revenues were $6.5 million, Expenses for Personnel and Operations were $4.5 million. If you throw in the Debt Service Interest only payments of $800,000, you have $1.2 million left over to spend on capital projects.

This is why we have so much money in our bank account! In the budget for July 2001-June 2002, we had over $3 million allocated for Capital Projects. Less than half of that was actually spent. For the prior fiscal year, over $1.6 million was allocated for capital projects, and again, less than half was spent. Our total Property and Equipment has increased by only $1.1 million from 1999-2001.

So, to sum it up, we are allowing our facilities to deteriorate in order to save money, and for what reason? The new Business Plan calls for the Harbor to spend less than $480,000 over the next 6 years at Pillar Point Harbor, and $2.6 million at Oyster Point Marina (of that $1.6 million is for dredging). This is a combined figure of $3.1 million over 6 years for capital projects at both harbors. The budget for the 2002-2003 fiscal year is almost $4 million for this year alone!

After fiscal year 08-09, (when we are to begin paying back the principal also at $2.4 million per year), our projected capital expenditures jump up to over $12 million for the next 6 years or 3 times the amount spent for capital improvements over the prior six years.

Bottom line here, it will take a tremendous amount of revenue from speculative ventures to fund all of these future projects and make the debt payments. The record of the Harbor Commission has been dismal at best in bringing in new sources of revenue. We need to be realistic here.

What would I do if I were elected?

I would advocate all the Harbors in the State of California get together with the Dept. of Boating and Waterways to see if we can cut expenses that are common to all of us. One of the greatest and most common expenses is dredging. If DBAW purchased a dredge for all the harbors to use, it would be much cheaper than each individual harbor contracting it on their own. This would easily save hundreds of thousands of dollars for each harbor. Another expense we all share is dock replacement. DBAW would be able to get the docks for all of the harbors at a much cheaper cost than if we all went out individualy and contracted for them because they can purchase in volume. Other Harbors are in similar financial turmoil, with two already defaulting on their loans. By working with each other and the State, we can better serve our boaters and the general public.

We also need to share information between harbors and DBAW on products and vendors that we use. We often run into excess costs with "change orders" after a project has been started. If we worked as a Group, we could see why these cost over runs are happening, is it a particular vendor, are the project requests for proposals too vague, etc. As a Group, all the harbors and DBAW could work together to be more efficient with your tax dollars.

One source of revenue we need to get on line is the hotel at Oyster Point. Right now it is stalled. We, as a Commission, need to see what can be done to jump-start this project and get it moving. If this project cannot proceed, then we need to go to plan B to find other builders who would be interested in developing Oyster Point.

The High Speed Commuter Ferry Service departing from Oyster Point is an exciting concept, however, it is not known how long this will take to get up and running. Anything to make our commute shorter and less stressful would be welcomed.

We have to keep our facilities in good condition. There are no frills at either site. As a former employee, we all went out of our way to identify ways of cutting costs. We searched for the cheapest vendors. We fixed things instead of replacing them. We really analyzed every purchase. But there are some areas that have to be replaced. One of those is the restroom at Pillar Point. Another very important project is replacing the docks for our Commercial Fishermen.

One area where the Harbor is weak has to do with Grant funding. There are millions of dollars in Grants available and the District needs to be aggressively pursuing them. Grant revenue for 1999 was zero. In 2000 it rose to $87,000 but dipped down to $13,000 in fiscal year 2001. We can certainly do better than this.

Remember, it's your money. It's your vote. Please vote for Ken Lundie and Lisa Fernandez on November 5th. It will be our pleasure to serve you.