Most of us who were here remember something about March 11, 2011. Anyone who does not remember should search YouTube for “Crescent City 2011 tsunami.” You will see the tremendous power of moving water sinking boats, tearing up docks, destroying livelihoods. Measure C is about paying our share of the cost of rebuilding the harbor after the tsunami.
What problem does Measure C address and what will it do? The repairs to the harbor cost about $55 million. The Federal Emergency Management Agency and the California Department of Emergency Services paid about $50 million. The $5 million balance, which was required in order to get the $50 million grant, was obtained as a loan from the (U.S.) Department of Agriculture. The bond payment is $262,000 per year. Right now the payment is draining the reserves and the harbor will be out of money in two or three years.
Measure C raises the transient occupancy tax (TOT) or “bed tax” on rooms in the unincorporated areas of Del Norte County. It is now 8 percent and will go to 10 percent. The city TOT is already 10 percent and would not change. The increase would amount to $2 on a $100 room. Measure C also establishes a 2 percent tax on RV spaces in the unincorporated areas for stays of less than 30 days. The money is dedicated to the payment of the note and for repairs.
Why did we choose a bed tax or TOT? We discussed a variety of options. What we wanted was a revenue stream sufficient to pay the note but with minimal impact on local taxpayers. Any of us who have traveled and rented lodging have paid the local TOT. For the most part, travelers don’t notice it; it’s just part of the expense of traveling. Of the available options, the TOT seemed to be the best.
Why is the harbor in financial distress? The harbor income in 1978 was $415,000. In constant dollars, the 2018 harbor income was $325,000. In constant dollars. Who among us could make ends meet if we started getting paid in 1978 dollars?
Measure C is not designed to solve all the fiscal issues with the harbor. It addresses the debt service, which resulted from the 2006 and 2011 tsunamis.
Is the problem mismanagement at the harbor? Again, watch the YouTube video. I see Mother Nature. I don’t see mismanagement. Measure C is designed to pay the note for the repairs.
Why did the harbor have to spend so much on the repairs? The harbor was rebuilt with a hardened design. To quote from a recent report: “Based on historical tsunami recurrence rates the previous design of the boat basin would be destroyed about every 15 years. The dramatically strengthened new design will survive up to a 50-year tsunami event. Had the old design been used it would need to be rebuilt an average three separate times to last the life of the new design.” (Natural Disaster Fiscal Impact by Dr. Richard Young 1/28/2018).
Why not seek loan forgiveness? In 2011, a bill passed the legislature approving debt forgiveness but was vetoed by Gov. (Jerry) Brown, who observed that the state could not afford it and that if it were approved, other communities which suffered similar disasters would come to rely on the state as a first resort.
Why can’t the harbor sell some land to raise the money? As part of the charter, the commission is tasked with managing the harbor and associated lands for the citizens of the State of California. There are slightly north of 4,000 acres under management. The commission is required to maintain a greenbelt and cannot develop or sell that land or the areas which are wetlands. The few parcels which could be sold total about 18 acres and would not raise anywhere near enough to make the payment. In fact, several generate income for the harbor and would be foolish to sell.
Bankruptcy. The note for the bond payment is tied to tax revenues and would not be discharged through bankruptcy. The money would continue to come out of the harbor district tax revenues, further draining operating funds. Paying the debt is an obligation.
Is Measure C an indirect tax on local residents? I am sure there are exceptions, but almost by definition people coming through town and using local lodging have some level of discretionary income and are not likely to even notice the few dollars added to the TOT. I doubt they will spend less because they are paying the TOT.
Why doesn’t Measure C sunset after the debt is paid? The bond payments run 38 years. After the note is paid, 38 years from now, citizens could choose to eliminate the tax. Wind and water being what they are, however, I am sure there will be plenty of need for money for repairs and maintenance.
Is it really 850 jobs at risk? The 850 number is based on a survey conducted to justify the loan. The survey took the number of boats, the number of crew per boat, and counted up the direct employment in the harbor.
Jobs in basic industries (like fishing or manufacturing) support jobs in the surrounding community. When cities and states compete to have industries locate in their area, this multiplier effect is what they are counting on. With the harbor, we have the industry already here. Our job is to invest in and support the infrastructure that supports that industry, which in turn supports our community.
What would happen if Measure C does not pass? Within a short period, the harbor could run out of money to operate. There is considerable uncertainty about how things would play out after that happens. That uncertainty means risk to our fellow citizen’s livelihoods. We need to maintain local control and local responsibility, and Measure C helps to do that.
Most of the objections I’ve heard seem to come from a place of objection to all taxes, anytime, anywhere, and to any government above a bare-bones operation. In my opinion, government is us; it is how we do together what none of us can do as well individually.
Measure C is a modest effort to address a serious problem. The harbor needs our help. Join me in supporting this local resource and vote yes on Measure C. Thank you.
Donald McArthur is one of the leaders behind the Measure C ballot initiative. He lives in Crescent City.