Loading...
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