A plan to grandfather mooring permits and rates in Newport Harbor for current boaters is on hold until the end of the year.
A new letter from the California State Lands Commission asks the Newport Beach City Council to hold off on its plan, which was to be implemented next month. The commission also wants the California Coastal Commission to weigh in on leasing opportunities for moorings and how those fall under regulations of the Coastal Act.
“The city will be working diligently with State Lands to find a mutual resolution quickly,” Assistant City Manager Seimone Jurgis said.
The topic of mooring rates has been contentious as the city’s Harbor Commission and now the City Council considered increases.
Last month, councilmembers dismissed a recommendation from the Harbor Commission that rates be increased by almost 400% to cover the cost of maintaining the public harbor and bring them closer to market rates. Instead, the council went with a staff-suggested alternative that would maintain current rates (with a 2% cost of living increase in the future) and give boaters a one-time opportunity to transfer their permits to another party by 2028 and also add an heir.
The city’s goal is that moorings in the future be owned, managed and maintained through the city license program, for which higher rates have already been set. Mooring permits have long been a commodity privately traded and sold for often large amounts of money.
Voting to finalize the plan was on the City Council’s July 23 agenda, but was continued until city staff could speak with the State Lands Commission.
In its July 22 letter, the commission asked that the city “postpone” its decision so that the commission can review the city’s management of the mooring permits and residential pier leases on granted state lands to “ensure the city is fulfilling its responsibilities as the state’s fiduciary.”
The State Lands Commission oversees these areas of submerged land known as tidelands.
Since 2015, the city’s Harbor Commission has been reviewing the mooring rates and had recommended phasing in the significant increase, drawing ire from the boaters who now dock their boats at the harbor’s many mooring fields.
In its letter, the State Lands Commission said “the recent decision to grandfather existing rates, coupled with the failure to reassess residential pier rates, underscores the need for a comprehensive evaluation to ensure that all rates reflect fair market value without discrimination in how rates are applied to specific users.”
The letter specifically points out that “the residential pier lease rates appear to be substantially below fair market value.”
Further, the commission questions the “methodology used to establish those rates” and said that “it may constitute an unconstitutional gift of public funds and certainly appears to raise issues of discrimination in rates between residential pier leases and mooring permits inconsistent with the law.”
Addressing both pier lease rates and mooring rates, at the same time, would guarantee that all rates are fair, reflecting a balanced consideration of the uses and impacts across Newport Bay, the commission’s letter said.
The commission wrote in support of the city’s goal of ending “private profiteering of the mooring permits,” which have often been sold privately for large amounts of money.
A previous Orange County Grand Jury Report found there is a loophole allowing a private mooring transfer after a boat sale, allowing private parties to commodify public assets in direct violation of the core tenants of the Public Trust Doctrine, the commission’s letter said.
The California Coastal Commission also sent a letter to the city ahead of the July decision, asking the city to delay its decision on mooring rates until the disparity between the mooring fields and private dock users was addressed.
The staff pointed out that rental rates are currently set at $1.67 per lineal foot per month for onshore moorings and $3.34 per lineal foot per month for the harder-to-reach offshore moorings.
Many of the boaters who use the moorings spoke out at the council’s July meeting against what they dubbed a “half-baked plan” city staff came up with. They also pointed out the inequity in the rates for mooring use and the rates private dockholders got.
In a statement from the Newport Mooring Association, its president, Anne Stenton, said the group is “grateful that the city has decided to put the alternative plan on hold.”
“The alternative plan would have added city overhead costs to moorings,” she said. “We believe maintaining the existing low-cost mooring permit program is beneficial.”
“The current program, where permittees pay for and maintain their own tackle, has successfully served Newport Harbor for nearly a century,” she added. “We hope the city, State Lands Commission, and stakeholders can collaborate to ensure equity in tidelands use, rates, and access to the harbor for current boaters as well as future generations.”
