Despite making the case to local fishermen that a tax initiative is necessary to keep the port afloat, Crescent City Harbor commissioners held off on selecting a consultant who could determine if a larger segment of the community would support a new tax.
The decision wasn’t unanimous. The Crescent City Harbor District board voted 3-2 on Friday in favor of tabling the issue until its Jan. 16 meeting. Commissioners Brian Stone and James Ramsey dissented.
“It’s just a matter of we need to know where to go and what to look at and what the public will do,” Ramsey said just before the vote. “It doesn’t really do us any good to continue to wait and wait and wait and send out a little bit here and a little bit here. I would personally like to get this thing on the road so we know where and how and what we’re doing.”
The harbor district received proposals from five firms ranging in price from $6,000 to $35,000. According to Commissioner Wes White, each consultant would poll 250 to 300 registered voters in Del Norte County, compile the information they receive as well as break it down by voting precinct and other demographics and present it to the harbor board.
The least expensive proposal came from Crescent City-based Lifestyles Research Company, while the most expensive came from SCI Consultants, of Fairfield. San Francisco-based Tulchin Research submitted a $16,000 proposal; Fairbank, Maslin, Maullin, Metz and Associates, of Los Angeles submitted proposals of $20,760 and $22,000; and Probolski Research, of San Francisco submitted proposals of $11,280 and $26,000, according to White.
Although Stone and White presented the proposals at the harbor district’s Dec. 19 meeting, the issue was tabled to give commissioners a chance to review them.
On Friday, Phillips said he wasn’t in favor of spending more than $1,000 to hire a consultant until the harbor board has a better understanding of what Del Norte County voters would support.
“I don’t think we need to go out and survey 500 people or 300 people because we can do it for a little less,” Phillips said.
White, who suggested tabling the issue, said the harbor board should “get a general feel of where the public is at” without determining whether voters would support a specific tax.
“I think we need to understand where we’re at with the public as a whole and then if we need to go back out and educate and then come back and do another very inexpensive poll,” he said.
Harbor commissioners have been discussing ways to increase revenue and pay down the port’s $5.3 million debt since early last year. According to Stone, the harbor is running a $500,000 deficit and with only $1.8 million in reserves could be out of cash in about two to three years.
Commissioners hope to place either a sales tax initiative or a property tax assessment on the November 2018 ballot, but have yet to decide what that initiative would look like.
“This election cycle, if we’re going to do something to correct the problem, is the only one we’re going to have available to us to do something,” Stone said, adding that the next election cycle occurs during the 2019-2020 fiscal year. “We as a harbor district can go and either ask for a sales tax or a special assessment or something else and in doing that we could call for a special election, but that would cost us money. We’d prefer to put it up against a regular election cycle and that way we save anywhere from $30,000 to $60,000 out of our budget.”
Stone said he and White also surveyed harbor users to determine what the impact on the community would be if the port had to declare bankruptcy and close. He estimated that 563 individuals would lose jobs associated with the commercial and recreational fishing fleets, while 804 jobs would be lost as a result of the restaurants, Fashion Blacksmith and other businesses at the harbor closing.
Stone also estimated that a further 50 to 150 jobs could be lost as a result of a “ripple effect” the harbor’s closure would have on the hotels near the port.
“All these hotels around 101 here are here because of the sphere of influence this harbor provides,” he said. “The ambiance and the view, whatever. We’re looking at a major hit to the economy.”
The harbor is also in need of extensive repairs as well as money to maintain the new $54 million inner boat basin installed following the 2006 and 2011 tsunamis, Stone said. He noted a crumbling sea wall would cost $4-5 million to repair and more than 150 pilings need to be replaced at Citizens Dock, he said.
White said the port has to decide what methodology it wants to use to get a tax initiative passed. This includes a citizen’s initiative, which would require a 50 percent-plus one vote to pass, but could be held up in litigation since it’s a new process. A second methodology would be to get the Del Norte County Board of Supervisors to approve placing either a sales tax initiative or a property tax assessment on the November 2018 ballot, White said. He said that he would prefer a sales tax initiative over a proposed property tax assessment.
A tax initiative could also take the form of a two-part vote on the ballot, White said. Voters would be asked to approve the tax and then to recommend how that revenue would be spent, he said.
Another decision the harbor board must make is how much that tax initiative would request from the public, White said. At previous meetings, the board has discussed a quarter cent sales tax increase, a $15 annual property tax assessment and a $36 annual property tax assessment.
White said the harbor has also approached the U.S. Department of Agriculture, which granted the loan that helped pay for the inner boat basin, about forgiving the debt but have been unsuccessful. He said he would prefer debt forgiveness over asking the voters to decide on a tax initiative.
The harbor currently pays about $270,000 annually in loan repayments.
While they were supportive of getting the harbor out of its financial hole, the idea of a tax initiative drew a mixed response from fishermen. Some were in favor of a sales tax increase over a property tax assessment, pointing out a lot of people from out of the area visit and use the harbor while some property owners never use the harbor. Others questioned the need to pay a consultant to conduct a survey.
One fisherman suggested the harbor make plain to the public the reason it’s in a financial crisis is due to the 2006 and 2011 tsunamis.
“Trying to sell a tax or a fee to the public in general would be easier if you had a good reason or story behind it,” he said. “I think using the tsunami, the reason why there is the debt, would be a wonderful angle instead of just trying to cover all costs with the tax.”
Harbor tenant Tom Sander pointed out debt forgiveness could solve much of the port’s problems and pointed out members of the public could put pressure on elected officials at the state and federal level to make that happen.
Doug Plack, flotilla commander for the Coast Guard Auxiliary, said information the harbor commission presented was “what the public needs to hear.” He suggested the commission use its Friends of the Harbor nonprofit to try to gage whether the public would be responsive to a tax initiative.
“You have to sell why you’re in this spot to begin with to have people be sympathetic towards your need,” he said.
Plack responded to an earlier statement that Phillips made about being worried that only 30 percent of people surveyed would support a tax initiative for the harbor.
“Right now do you know it’s at 30 percent?” Plack asked. “No you don’t know, but at least you’ll have an answer...”
In other matters, the Crescent City Harbor District selected its officers for 2018. Pat Bailey will serve as president and Jim Ramsey will be the board secretary.
Reach Jessica Cejnar at email@example.com.