‘Stop spending our money’ say Marina tenants to Des Moines City Council

by Jack Mayne The Des Moines Marina fund has for several years been used to supplement money in the city’s general fund and now Marina tenants are pushing for this to stop before the facility is doomed before its time. Todd Powell, president of the Des Moines Marina Tenant Association, told the Council at last Thursday night’s meeting the “general feeling (of its members) is a grave concern for the marina infrastructure itself.” He said the Council should reduce the transfer of marina funds to the general fund “so it can re institute the saving program which is needed to fund the capital improvement plan which will give us an opportunity to extend the marina’s life beyond its current lifespan, which is about 10 more years, to about 40 or 50 years to benefit the whole community.” Bill Linscott, of the tenant group, said the marina is a valuable asset to the community, “and we are concerned about the funding” of it. “If you look at history, the marina has been a revenue producer” but now there is a deterioration of the facility due to the use of the marina fund on general city problems. Not a new problem Mayor Dave Kaplan said transfers are “not a new issue” and the draft of the city’s upcoming budget does reduce the transfer of funds from the marina fund to the city general fund by about $200,000 a year. “It is not down to the level we would hope to get it down to,” he said, but it is “an initial step” and hoped to get it down over the next couple of years. “The city as a whole is struggling financially in terms of being able to provide the services that everybody expects, in terms of police, parks and everything else, Kaplan said. “The other thing that is important is increasing revenues,” the mayor said. An issue that “kind of got sidetracked early on, is the discussion about paid parking. “The real issue isn’t paid parking, the real issue is about non-tenants in the marina helping to pay their share to support the marina. A lot of people are under the misperception, – a lot of our residents are under the misperception – that their tax money goes to support the marina and, in fact, that is not the case. You know and we know, that it is you, the marina tenant owners, who are the ones who pay to maintain and support the marina. “What we need to do is to be able to educate the residents of our town and the visitors” that they have to contribute something for the events at the marina, some of which are not near the water. “Maybe that is paid parking, maybe it is a tax increase, maybe it is some other way to come up with funds,” he said. There will have to be a way for the citizens who have not contributed to the marina to do so even as the marina people have contributed to the city’s general revenues, Kaplan said. Losses over the years Harbormaster Joe Dusenbury told the Council the Marina fund posted a loss for of about $115,000 per year for each of the past three years and an estimated $200,000 in 2014. “The impact of the losses on the Marina operating fund reserves has been predictable,” he said. “At the end of 2011, the fund balance was about $1.45 million, at the end of 2013, the fund balance was $1.41 million and it is expected to be about $950,000 at the end of 2014.” The “final component” of the fund balance is the “unrestricted funds” which are transferred to the Marina capital improvement fund. There were no unrestricted funds in 2013, nor in 2014 to transfer to the capital improvement fund, Dusenbury said, adding there will also be no unrestricted funds in 2015 either. “The biggest problem is our moorage revenues, the marina’s biggest source of income,” he said. Since 2009 they have been averaging about $2.3 million a year, Dusenbury said, and this year the revenues are expected to be a little below that, “at $2.23 million, down about $140,000 from the peak in 2009.” “Other factors that affect moorage revenues on an annual basis are fishing opportunities, weather, food prices and consumer confidence, in general. These other factors are contributing to our moorage revenues.” Other sources of money for the marina, he said, include guest moorage fees, sales of fuel, lease fees and parking fees, all of which are affected by the same factors as the moorage revenues. Mayor Kaplan asked about guest moorage income this year. “In 2014 we expect to meet our budgeted goal, and slightly over that,” Dusenbury said. Haven’t kept pace “On the expense side, one of the biggest issues is the debt service,” he said. “Debt service is the second largest one and it has increased the most since 2009. Current bond payments are about $820,000 a year … payments have increased about $200,000 since 2009.” Why has it gone up?, Kaplan asked. The city has already refinanced for a lower rate and that can only be done once, said City Manager Tony Piasecki, plus there is a waiting period. Dusenbury said one of the problems was in the 2007 master plan there was an assumption that moorage revenues would keep pace with the increasing debt service costs. “They obviously haven’t done that,” he said. “In general, our revenues haven’t been able to keep pace with our expenses. The situation has been made worse by the variability of the revenue stream, especially the permit moorage revenues. “Even though the marina is recovering from the recession, weather, fuel prices and the availability of fishing still affect our revenues,” Dusenbury said. The marina is not longer capable of maintaining the capital improvement plan set out in the 2007 master plan, he said. Marina to support general fund? Dusenbury said the Council needs to “make time to discuss the purpose of owning and operating the marina.” “If a budget is a plan that is supposed to reflect the Council’s priorities, the marina’s budget would suggest that the marina’s top priority is supporting the general fund,” he said. “If that is the case … when we talk about some of the things we’d like to do, (it) becomes what generates most revenue and or what decreases expenses the most.” The guest moorage program is a very visible program – “you have all been down there and seen the boats from all over Puget Sound,” Dusenbury said. The program was begun to raise awareness of and to bring visitors to Des Moines from other Puget Sound communities, helping downtown businesses and complements local events such as the Farmer’s Market. “But, it is not the most revenue we could get out of the guest moorage area,” he said. “We could actually increase our revenues and take some of the variability out of our revenues if we just turned our guest moorage area into permanent moorage,” Dusenbury said. He said he would keep a bit of guest moorage on the activity and north float. Dusenbury said that could increase revenues about $25,000 a year, and decrease costs of marketing the guest moorage and cut seasonal staff. He said while the uplands development of the area was a positive, rental and lease revenue, in the short term, was not going to help support the city’s general fund. Marina parking fee Councilmember Bob Sheckler asked about parking and Dusenbury said his recommendation was to implement paid parking immediately. He said the staff has been taking a license plate survey during the summer and discovered that 70 percent of the cars sampled were not from Des Moines, so imposing parking fees would help finance needed marina sea wall restoration and non-residents would pay the majority amount. Councilmember Jeanette Burrage said if parking fees were set on the marine, the fees would be needed downtown, “otherwise people will just park downtown and walk to the marina.” Sheckler asked if there has been a study to see if the guest marina had been analyzed and Dusenbury said he didn’t like the idea of cutting current success of the program. “We need some clarification on what the role of the marina is,” he said. “Are we supposed to go out there and be the face of the city and try to bring people in, are we supposed to help that downtown business core or are we just there to support the general fund. If that is the case, then yes, it makes a difference on the way we approach things.” Councilmember Victor Pennington said he could see there is “frustration and confusion” on the marina, “but in the terms of marketing, it needs to be a partner with the rest of the city … it needs to be a partner with your downtown group, it needs to be a part of the city as a whole because we need to more on target in marketing our city and making our city as a destination … Dusenbury said the percentage of the city’s residents who are boaters see the marina’s value, but the large majority of people who are not boaters need to see the value of the marina to the entire city.]]>