The Dana Point Boaters Association is the champion of recreational boating and the jewel that is
Dana Point Harbor.
Dana Point Boaters Association eNewsletter
Wednesday, May 9, 2018
Breaking News: Annual Slip Rate Increase Announced
OC Parks has advised DPBA that Dana Point Harbor boaters will be notified of a 2.8% slip rate increase in their May billing; the new rates will take effect in July.

The operating agreement between the County of Orange and Dana Point Marina Company (east marina) permits the marina operator to perform annual slip rate adjustments based on the Consumer Price Index (CPI), and not to exceed 4%. Additionally, every four years DPMC is permitted an adjustment exceeding 4% if market forces support it. No such market-based increase was implemented this cycle. Dana West Marina's slip rates are adjusted concurrently to match the east marina.

We would like to use this now-annual ritual to restate our position on Dana Point Harbor slip rates, and here it is:  Total marina revenue should be commensurate with operating costs plus a reasonable margin to reserves for future capital improvements. And nothing more . Slip rates should be formulated proportionally across slip sizes to match this target, with subtle variations based on slip size supply and demand.

It's important to remember that Dana Point Harbor was constructed on a stretch of coast entrusted to the County of Orange by the State of California to build and operate a municipal recreational boat harbor, with strict rules governing its use and finances. We are among a very small handful of west coast marinas in this regard. There are protections around the affordability of our public harbor. Tidelands Fund 108 (the designation of our harbor's budget) operates independently; revenues generated in our harbor must remain in our harbor. After supporting operating expenses and serving reserves, any remaining balance must be diverted to the State. Yes, the County could effectively be penalized if our harbor generates too much revenue.

And herein lies our motivation as guardians of Tidelands Fund 108. Controlling excessive and unnecessary costs constrains the County's revenue potential from our harbor, and by extension limits slip rates. Each year we closely examine the County's Fund 108 budget, particularly operating margins and contributions to reserves. We strive to identify exorbitant expenses and explore opportunities to reduce them, without sacrificing quality. Hence, the recent focus on harbor patrol costs, which is by far the biggest routine expense from Fund 108, and growing rapidly. The more success we achieve at controlling costs, the less cause the County has to increase harbor revenue (i.e. slip rates).

This dynamic also factors into our close analysis of the Harbor Revitalization Plan. We believe our harbor is long overdue for renovation, and partnering with private industry is the most effective and efficient way to go about it. However, as we described in more detail in a recent newsletter, the contract negotiated between the County and Dana Point Harbor Partners must allow (and obligate) the developer to build a quality harbor that retains our charm and character, yet does not burden them with such excessive costs (rent) that they must radically increase revenue (slip rates) to recover their investment.

Finally, a few essential words about market-based slip rates... As described above, the County chose not to implement a market adjustment this cycle, which makes this argument largely academic, but it's important nonetheless. The challenge with a market study of slip rates is accurately identifying  our market . This is a publicly-owned municipal harbor that must operate effectively as a non-profit. We should not be compared to - for example - small for-profit private marinas in Newport Beach that charge two to three times (or more) for comparable slips. However, as you can see in our harbor's latest market study (performed by DPMC), we are compared to just about every marina from Santa Barbara to San Diego, including a few exclusive and very expensive for-profit private marinas. Further, the denominator used to calculate the average slip price is number of marinas, not total number of slips. That means Long Beach Harbor, with approximately 4500 slips (at lower cost than Dana Point) is weighted the same as Bayside Marina in Newport Beach with 101 slips, driving the "average " slip rate artificially high. A more accurate market study would identify the average  per slip rate of municipal Southern California marinas; this would demonstrate that Dana Point Harbor slip rates are about 11% higher than average (yes, we did the math). And it must be pointed out that this latest market study was performed by Dana Point Marina Company, which profits from higher slip rates; this disqualifies them as a neutral party.

If the County were to implement a market-based increase using this study, be assured that we would protest the validity of the data.

This has been a very long and complex way of announcing this year's slip rate increase. However, we want our community to be aware of the analysis and efforts underway behind the scenes to protect the unique character and affordability of Dana Point Harbor. That's why we are here.

My Home Port Bumper Sticker
My Home Port Hat
My Home Port Burgee
Dana Point Boaters Association is a non-profit boater advocacy organization that is 100% funded by your donations. Our volunteer leaders receive zero compensation for what we do, other than the satisfaction of the achievements made on behalf of our boaters. Every dollar we receive is directed to protecting and advancing the Dana Point Harbor boating community. What we do doesn't cost much, but it isn't free. Our community has proven dedicated and supportive over the years; now we offer a gift in return for your generosity.

All donations of $10 or more will receive a bumper sticker. Donations of $50 will receive a choice of a hat or burgee, plus a bumper sticker. Donations of $100 will receive a hat, burgee and two bumper stickers.  If you can spare $10, $25, $50 or $100 to the cause, it goes a long way to keeping us on track, please click here to donate!  Thank you.
From: James Lenthall, President | (949) 485-5656 | Email Us! | DPBA Website