HomeMy WebLinkAbout2014-07-29 e-packetSPECIAL MEETING
CITY COUNCIL
OF THE
c�LIFOR� CITY OF SOUTH SAN FRANCISCO
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
Meeting to be held at:
CITY HALL CONFERENCE ROOM
400 GRAND AVENUE
SOUTH SAN FRANCISCO, CA
TUESDAY, JULY 29, 2014
6:00 P.M.
Purpose of the meeting:
1. Call to Order.
2. Roll Call.
3. Public Comments — comments are limited to items on the Special Meeting
Agenda.
4. Agenda Review
5. Closed Session:
Public Employee Performance Evaluation
(Pursuant to Government Code Section 54957)
Title: City Manager and City Attorney
Open session to start at 6:30 p.m.
6. Study Session: Discussion related to Grand Jury report on San Mateo County
Harbor District and services provided by the District to the City.
7. Study Session: Discussion of new City website.
8. Adjournment.
•
Deputy City Clerk
DATE: July 29, 2014
TO: Mayor and City Council
FROM: Kathy Mount, Assistant City Manager
SUBJECT: OVERVIEW OF SAN MATEO COUNTY HARBOR DISTRICT
OPERATIONS AND RELATIONSHIP WITH THE CITY OF SOUTH SAN
FRANCISCO
RECOMMENDATION
It is recommended that the City Council review and discuss the information presented in
this Staff Report, and provide City staff with direction regarding the San Mateo County
Harbor District.
BACKGROUND/DIS CUS SION
The San Mateo County Harbor District ( "District ") was formed, and currently operates, according
to California State Harbors and Navigation Code Sections 6000 et seq. Included in its authority
are the following responsibilities: (1) control and operate all harbor works and facilities within its
boundaries, (2) supervise pilotage of seagoing vessels within the harbor and the docking of
vessels, (3) pass all necessary ordinances for the protection and safety of persons or property using
District facilities and waters subject to the jurisdiction of the District. In 1977, the City of South
San Francisco ( "City ") and the District entered into a Joint Powers Agreement ( "JPA ") in order to
jointly develop and construct facilities at the Oyster Point Marina/Park ( "Marina Property").
Pursuant to this JPA, the District leases and operates the Marina Property owned by the City.
Recently, the San Mateo County Civil Grand Jury ( "Grand Jury ") issued a report regarding the
District's operations which was previously provided to Council. This staff report provides some
background information regarding the District, its finances and operations, as well as its
relationship with the City.
District Revenues and Expenses
The operating revenues and operating expenses for the District's two harbors are shown in the
table below for the last two fiscal years. This data was obtained directly from the District's audited
financial statements. Note that this is not the complete financial presentation of the District, but is
intended to show the relative net operational revenues and expenses of both its harbors. Most of
the District's revenues are from county -wide property taxes`, not from the harbors' operations.
Staff Report
Subject: OVERVIEW OF SAN MATEO COUNTY HARBOR DISTRICT
OPERATIONS AND RELATIONSHIP WITH THE CITY OF SOUTH SAN
FRANCISCO
Page 2 of 3
This financial display is intended to answer the question as to whether the Oyster Point Harbor's
operating revenues pay for its expenses. It is worth noting that countywide property taxes provide
more of a subsidy to the Oyster Point harbor than to the Pillar Point harbor.
Oyster Point Pillar Point Total
2011 -12 2012 -13 2011 -12 2012 -13 2011 -12 2012 -13
Actuals Actuals Actuals Actuals Actuals Actuals
Property Tax Revenues * 4,460,104 5,080,105
Operating Revenues 1,502,205 1,361,209
(Berth Rentals, Luanch Fees
Rents and Concessions, etc.)
Operating Expenses, Before 1,569,916 1,689,314
Capital Improvements and Debt Service (1)
Net Operations
(67,711) (328,105)
2,021,913 2,067,555 3,524,118 3,428,764
2,087,549
2,291,655
3,657,465
3,980,969
(65,636)
(224,100)
(133,347)
(552,205)
* The District is a countywide taxing entity. As such, it receives a share
of all jurisdictions' property taxes in the County. Propert taxes are used to support
net operations at the two harbors, as well as District Administration, the Harbor Commission, and all
capital improvements at both Pillar Point and Oyster Point.
(1) Note, operating expenses here exclude depreciation.
As indicated in the table above, the Oyster Point and Pillar Point operating revenues do not cover
all of the District's operating expenses; however the District does not operate at a deficit as a
whole. As a county -wide taxing entity, the District uses property taxes to cover the operating
expenses of the two public harbors not otherwise funded by harbor revenues. (Property taxes also
fund capital expenditures, debt service payments, and District administrative expenses). Without
property taxes, the District would not be able to operate either of the two harbors.
The audited financial statements show that the District has not drawn down on Reserves for the
fiscal years ending .Tune 30, 2011, 2012, and 2013. (The 2014 audited financial statements are not
yet available). A copy of a key financial summary page from the 2013 audited financial statements
page is attached to this Staff Report, and shows that for the last two years financial reserves have
grown.
District Relationship with the City
The City and the District entered into the JPA in 1977, and subsequently amended it in 1979,1985
and 2005, respectively. The JPA governs the development, operations, and maintenance of the
Marina Property. The JPA has a forty -nine (49) year term, terminating in 2026, or "until modified
or terminated by an agreement in writing by the parties." (JPA, section 19, p, 18.) Accordingly, in
order to make any modifications to the JPA, mutual consent from the City and the District is
necessary.
Staff Report
Subject: OVERVIEW OF SAN MATEO COUNTY HARBOR DISTRICT
OPERATIONS AND RELATIONSHIP WITH THE CITY OF SOUTH SAN
FRANCISCO
Page 3 of 3
Upon termination of the JPA, responsibilities for management, operation and maintenance of the
Marina Property will revert to the City and the District will be relieved of all of its responsibilities
for operation of the Marina Property. (JPA, section 20, p. 18.) Further, upon termination, all
District employees will retain their position with the City for twelve (12) months following
termination at the same salary and benefits provided by the District. (JPA, section 20, p. 18.) After
12 months, the City and the former District employees can mutually agree to continue the
employment relationship.
ster Point Ventures Development Project
The Oyster Point Development Project contains provisions that impact the JPA or any
contemplated termination. Oyster Point Ventures, LLC ( "Developer ") entered into a Development
Agreement and a Disposition and Development Agreement with the City and the former
Redevelopment Agency for development of an office /R &D life sciences campus, commercial
development, and public amenities located on property adjacent to the Marina Property and on a
portion of the Marina Property ( "Oyster Point Project "). Prior to the Oyster Point Project, the
District entered into long -term leases with King Ventures for certain portions of the Marina
Property ( "King Leases "). The District uses rent revenue from the King Leases to pay debt service
on loans from the California Department of Boating and Waterways ( "DBW "). As part of the
Oyster Point Project, Developer also acquired King Ventures' interests in the King Leases. In
order to facilitate the Oyster Point Project, the City, the former Redevelopment Agency and the
District entered into an Memorandum of Understanding ( "MOU ") which provides, among other
provisions, that if the King Leases are terminated before the District satisfies its debt obligations
to the DBW, the Successor Agency will provide the District with an annual amount not to exceed
the amount of minimum rent in the King Leases (including inflation adjustments) until the DBW
debt service is retired, or the termination of the JPA in 2026, whichever occurs first. In addition
to providing the District with amounts to pay the DBW debt service, the MOU provides that upon
conveyance of Marina Property to Developer, the City will lease to District up to 3,600 square feet
of temporary office space, at a rate of one dollar per year, until permanent office space is available
at the Marina Property, or termination of the JPA, whichever occurs first.
CONCLUSION
Provide City staff with direction regarding Oyster Point and the San Mateo County Harbor
District.
B 9 �J
Y� Approved:
Kathy Mount Mike Futr
Assistant City Manager City Ma ager
By: C)Ibe�
Jim S le
Director of Finance
Attachment: Audited San Mateo County Harbor District 2013 Financial Statements' Summary Page
2306431.1
San Mateo County Harbor District
Statement of Revenues, Expenses, and Changes in Net Position
For the year ended June 30, 2013
(with comparative totals For the year ended June 30, 2012)
OPERATING REVENUES:
Berth rental
Dock box fees
Launching fees
Mooring fees
Recreational vehicles
Rents and concessions
Transient berths and dockage
Other operating revenues
Total operating revenues
OPERATING EXPENSES:
Harbor Commissioners
Administration
Pillar Point Harbor
Oyster Point Marina
Depreciation and amortization
Total operating expenses
Operating income (loss)
NONOPERATING REVENUES (EXPENSES):
Capital grants
Investment earnings
Reimbursements
Insurance settlements
Property taxes
County administrative fees
Gain (loss) on disposition of capital assets
"Termination benefits
Interest expense
Total nonoperating revenues (expenses)
Income (loss) before contributions
Capital contributions:
Capital asset valuation adjustment
Total capital contributions
Net income
CHANGE IN NET POSITION:
Beginning of year
End of year
2013
$ 2,454,496
7,354
87,555
45,938
42,600
580,471
102,970
107,380
3,428,764
529,589
1,160,628
2,291,655
1,689,314
1,456,965
7,128,151
(3,699,387)
640,000
94,969
1 1, 779
5,110,609
(30,504)
29,674
503,689
(404,926)
5,955,290
2,255,903
2,255,903
39,126,210
$ 41,382,113
The accompanying notes are an integral part of these basic financial statements.
13
-1-
2012
$ 2,414,734
8,953
105,893
44,097
37,505
630,614
113,548
168,774
3,524,118
127,153
1,086,589
2,087,549
1,569,916
1 ,448,344
6,319,551
(2,795,433)
28,359
123,219
(1,596)
789
4,486,449
(26,345)
(15,954)
(1,050,627)
(446,543)
3,097,751
302,318
20,259,805
20,259,805
20,562,123
18,564,087
$ 39,126,210