Officials to Track Use of Funds for Harbor

County officials will examine whether some proceeds from several state loans, obtained to construct the docks, piers and other portions of Channel Islands Harbor over the last three decades, may have been improperly used to support the county parks system.

“I don’t think it’s any big deal,” County Counsel James L. McBride said Wednesday, “but we’re going to take a look at it.”

The probe follows a vote by county supervisors on Tuesday that cut the board’s 18-year-old subsidy plan that saw $1 million in annual harbor profits used to sustain the county park system.

Each of six state loans carries restrictions that require a small percentage of the proceeds to be tucked away to cover annual debt service, McBride said. The concern among some supervisors is that the surplus may have instead been used to cover the parks subsidy, he said.

Supervisor Frank Schillo said he is worried because he has been unable to obtain details of the harbor’s finances.

When the Board of Supervisors ordered a gradual phaseout of the subsidy in 1996, Schillo said, he was assured there was enough money to cover continued payments. In recent months, however, county officials realized that a diminished business climate at the harbor had cut profits and would force harbor officials to borrow more money to pay the parks subsidy.

Schillo said he wants to know what happened to the money the board was told existed last year. He said he has been unable to get a solid answer, leading him to consider the possibility that some of the state loan proceeds were transferred to the parks system.

“I’m not insinuating that anyone has done anything wrong,” he said.

McBride said he does not expect to discover any financial impropriety since the county has never missed a payment on any of the state loans and that some of the loan terms contain waivers that allow the surplus to be spent under certain circumstances.

An official at the state Department of Boating and Waterways, the harbor’s largest creditor, said Wednesday that the agency will keep an eye toward an audit of harbor finances planned by the county.