Owners, city officials at odds over Tidelands Fund

Newport Beach city officials recently rejected a request from a group of commercial marina owners who wish to audit the city’s Tidelands Fund.

Marina owners contend that the tidelands finances are mixed up with those of general city services, and they shouldn’t pay higher rent until the fund is inspected.

City officials have sought to wring more money out of mooring holders, businesses and other harbor stakeholders in recent years, as the city invests millions in dredging and other harbor projects.

The marina owners are protesting a large potential rent increase from the city, which charges waterfront businesses that use public tidelands.

The owners offered to pay for half of a forensic audit, but City Manager Dave Kiff says that the fund is already inspected.

“We don’t see the need to have the city’s taxpayers fund another audit (or half of another audit) of a major fund that already receives an annual public audit,” he wrote in an email.

Lawyers from an organization called Stop the Dock Tax sent the city a letter last week that claimed the city was “improperly allocating certain expenses.”

Because the tidelands are technically owned by the state, the city is required to reinvest any funds that come from the harbor back into the harbor.

“We believe there is significant waste in the Tidelands Fund that is driving the City Council to impose a residential and commercial dock tax,” the group writes on its website.

The association’s tactics are similar to those of mooring holders who in 2010 lost their battle to prevent higher rent.

City officials say they need the additional income, and that the city is obligated to charge fair market rent for the land. The Tidelands Management Committee is finalizing a list of future projects that total about $100 million.

In the 2010-11 fiscal year, the city general fund paid $17.4 million in subsidies to the Tidelands Fund, according to its annual financial report.

Twitter: @mreicher