The San Mateo County Harbor District is currently paying off a consolidated loan of approximately $18 million. While some perceive this as a massive debt signaling fiscal problems for the district, General Manager Peter Grenell compares the loan to a home mortgage.
The Pillar Point Harbor and Oyster Point Marina and Park were developed in the '70s and '80s by loans from the Department of Boating and Waterways.
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In a conscientious move to pay off the loans in a more rigorous and scheduled manner, the harbor district acted on the state agency's recommendation to consolidate its series of loans into one large loan.
It also developed a business plan to run the course of the loan payments, which should be paid off by 2018.
"We are scheduled to completely retire that debt by 2018 and the harbor district is committed to doing that," Grenell said.
When the county's civil grand jury evaluated the harbor district a couple of years ago it concluded two years in a row that the district was in "sound fiscal condition," Grenell said.
"We are not in financial difficulty, we have plenty of cash reserves. We have money in the bank. We've been able to upgrade and repair facilities at both harbors," Grenell said, adding that most upgrades are primarily being paid for with district funds.
At Pillar Point Harbor, the district has completed the first phase of repaving all the parking lots, replaced the small boat launch site and is actively repairing the main pier. The district is also looking to purchase a new patrol boat to replace the 32-year-old one it's now using, but that could still be a few years off.
At Oyster Point Marina and Park some capital improvements such as repaving the parking lots, installing new lighting and maintenance dredging of the western basin may be postponed for a year, but that decision will ultimately be made by the harbor commission.
All these capital improvements are being pursued on the advice of outside engineers that surveyed both harbors to determine the life cycle of all the facilities. The business plan was finalized three years ago with the inclusion of those expected improvements, repairs and maintenance. It also takes into account preventative measures, Grenell said.
"What we have there is a detailed basis for periodically going back and assessing our facilities," Grenell said. The district plans to reassess all its facilities on a 3-to-4 year cycle.
"If you pay attention sooner, you spend less money later," Grenell said, briefly referring to the cash-poor days of the district in the past.
"The district has gone through years of fiscal plenty and the opposite," he said. Since the district is constantly making these improvements when it has the ability to do so, Grenell hopes the district can avoid major improvements in the future.
The harbor district adopted its budget for 2004-2005 on June 16. It is estimating revenue of $6.67 million and $5.7 million in expenses - 10 percent of which goes to loan payments.
The consolidated loan of approximately $18 million calls for the district to make interest-only payments until 2006 at the amount of $883,000 a year. Following 2006 when the interest is paid off, the loan payments will be $2.4 million a year.
The harbor district also has large sums of cash sitting in various reserve-fund accounts in the county treasury. The district's total reserves sitting in the county treasury is approximately $9 million.
Of those reserves, $1.5 million sits in a debt-service account, $600,000 sits in an emergency reserve and $2.3 million is set aside for future capital-improvement projects - $1.68 million of which is specified for Oyster Point Marina and Park and $600,000 for Pillar Point Harbor. It also has approximately $150,000 in Local Agency Investment funds.
"The bulk of those reserves are in fact in restricted reserves and not available for discretionary expenditures," Grenell said.
"We have to be looking ahead. We're committed to retiring this debt."
Bottom line: he said the district is in the black at the close of each fiscal year.
"As the grand jury found, we are in sound fiscal condition," he said.
"The harbor district has al-ways chosen prudence. We're always looking at the business plan."
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