12:20pm | A Department of Public Works report on the condition of the canals in Naples may be setting the stage for a future showdown between the City Council and the Port of Long Beach over tapping port funds for needed city projects.
Presented to City Council during a special meeting on Tuesday, the report shows that the 11,000 feet of concrete walls that line the Naples canals and waterfront are deteriorating at a rapid pace and need to be repaired soon to avoid a collapse of the walls. Public Works Director Michael Conway told the City Council during the presentation that in some places the walls are in such bad shape that they may spontaneously fail. Other areas, Conway warned, are also seriously weakened and while they could potentially last another five years, might collapse in the case of a natural disaster such as an earthquake.
Conway said that a short term fix to the most severely damaged portion of the Naples canals–a 900-foot stretch in the back canal–is estimated to cost $2 million, but might not buy more than five years of life for the walls. A longer term project would essentially reline the existing walls with new walls, cost $9 million, and have a lifespan closer to 75 years.
And while the council uniformly agreed that the canal walls needed to be fixed and that the long-term fix, while more costly, made more sense, the real issue of discussion Tuesday quickly turned to how to fund any repair project given the city’s economic situation.
The Council agreed that the city’s tapped-out General Fund was not a viable source of funding for a repair project.
One suggestion for a source of funding was bonds raised against potential revenue from boat docking fees in the canal.
People that live in Naples along the canals have long had the option to construct a dock in the canal adjacent to their property, and over the years most of the owners have done so.
The city collects $9.50 per boat foot per year in docking permit fees for the roughly 80 boats tied up along the area of the canals considered most at risk. Most of these boats appear to be between 15 and 25 feet in length. This means that the owner of an average 20-foot-long boat pays the city about $190 a year for a docking permit. This also means that the city collects between about $15,000 a year from the docking permits for this area (based on the average boat length of 20 feet).
As mentioned before, the repairs for the most critical canal areas will cost about $9 million, but right off the bat, it is clear by looking at the meager amount of dollars collected on docking fees that the city could never use these revenues to back up a bond sale. At the most, the revenue from the docking fees in the most seriously damaged portion of the canals would raise $150,000 over ten years–just under 1.7 percent of what will be needed to repair just the most critical areas.
Raising the Naples-area docking fees to cover the repairs is also unlikely.
If you calculate the cost of the repairs out over the 80 boats and across ten years, this means the city would have to raise the docking fee from $9.50 per foot per year to just under $570 per foot per year to pay for the repairs in just the most critical section. That’s $11,400 a year to dock a 20-foot-long boat in the canal.
Also, the city estimates that to replace all of the canal walls and those on the outer part of the island facing the entrance to Alamitos Bay would cost $58 million. That means that the 300 or so boats docked throughout the canals and bay-facing properties would have to cough up something in the neighborhood of $970 per boat foot per year–or $19,400 a year for a 20-foot-long boat.
Even if the cost was spread out among the 3,800 marina slip managed by City Hall throughout the city, it would require a $1,525 a year increase to each slip holder.
So, it is obvious that there is no way the city can rely on the docking fees for the cost of repairing the canal walls.
What about a parcel tax on the Naples residents?
Roughly 240 homes sit on the canal wall. A per parcel tax for the full $58 million project cost spread out over ten years would run each canal and bay-facing property homeowner just over $24,000 a year.
Again, even if it was legally possible, it ain’t gonna happen.
So where else can City Hall turn for the money?
The federal government’s Army Corps of Engineers, which often helps local governments fund projects in waterways and harbors, has already said it can not help, since the canal walls belong to the city and never utilized federal funding during their construction.
The federal government’s recent funding of various stimulus projects throughout the country were also brought up as a possible source of funding for the repair of the canal walls. However, the feds have already issued two rounds of funding for stimulus projects and even the city has conceded that it is unlikely that Congress will approve further stimulus funding.
Another source brought up during the Council meeting was the Tidelands Fund. This fund is separate from the General Fund and is mainly fed by two sources: the annual transfer of 10 percent of the Port of Long Beach’s previous year’s profits as stipulated in the City Charter and rents and leases of various city waterfront properties such as the Convention Center, the Queen Mary and the Aquarium. These funds are restricted in use by state law to a very limited number of city projects and facilities and only within the traditional tidelands area along the coast.
Things normally funded by the Tidelands Fund include such things as police and fire services within the tidelands area, development projects within the tidelands area, and certain beach maintenance projects.
According to City Hall estimates, though, the Tidelands Fund is pretty much tapped out at the moment and will have not be in the red again until 2012. Even then its balance will fall well short of being able to support any canal wall project.
The final suggestion will most likely wind up being the actual funding source–namely, the Port of Long Beach. Not through its Tidelands Fund deposits, but directly from the port coffers.
However, this may be a sticky wicket for City Hall.
In the past, the semi-autonomous Harbor Department, which operates the port, has pushed back strongly against any further grab of port monies beyond the 10 percent transfer to the Tidelands Fund.
And the port has a few bills of its own. It is in the early stages of more than $1 billion worth of environmental, infrastructure and facility development projects that port officials claim are essential to the future competitiveness of the port.
Unfortunately, there are few other places City Hall can turn to for the canal repair funds. The bottom line is that the port makes money and the canal repairs do appear to fall within the limits of what state law permits port-generate money to be spent on.
The real test will be whether the City Council, tacitly the boss of the Harbor Department, has the political will to take on the port officials and simply demand the money.
So, some day in the near future, if the Council decides to turn to the port for the canal repair funding, you can expect to see a very lively public Council meeting. In one corner will be the cash-strapped City Council backed up by numerous Naples residents (which by the way consist of many of the city’s movers and shakers) and in the other corner will be the port officials backed up by members of the shipping and transportation industry that depend on the port.
Who will stand victorious once the dust has settled? This time around I have a feeling the port may want to bring their checkbook to Council chambers.