After years of sharing and leasing offices around the Peninsula, the San Mateo County Harbor District purchased a home for its administrative offices — and it’s the same building it’s rented in for the past five years.
In fact, it’s the same building Harbor Commissioners agreed to buy eight years ago before pulling out of the deal when an inspector’s report revealed nearly $200,000 in necessary repairs. At that time, the cost of the building was $1.8 million — 40 percent less than the price today.
On June 16, the Harbor Commission agreed to use working capital funds to pay $3 million for the office building at 504 Avenue Alhambra in El Granada. The district currently pays $8,800 a month, or $106,500 a year, to lease the building’s second floor. The district will now collect rent from two other tenants. It was not immediately clear how much it can expect from tenants to offset the expense.
Having its own administration building has long been a goal for the Harbor District. In 2016, the district relocated from South San Francisco to rent space in El Granada. In 2019, it purchased a parcel near Pillar Point Harbor for $1.3 million intending to build a headquarters. Then interim-General Manager John Moren said purchasing the lot at Obispo Street and Portola Avenue would save taxpayers money and expected work to begin within a year. But be-cause of rising construction costs related to the pandemic, commissioners view this week’s purchase as the best alternative.
“I think the purchasing of the building will save the district money in the long run over building our own building on the Coastside,” General Manager Jim Pruett said.
Though the district’s budget is stable now, the staff is estimating that the pandemic could lead to decreasing revenues. The district’s final budget for fiscal year 2021-22 forecasts $12.8 million in revenues and $9.8 million in operating expenditures. The resulting surplus of $3 million will be added to the working capital balance. The board also approved its five-year capital improvement program, which includes $9.161 million in expenditures removed from the total $17.2 million in working capital funds for the next fiscal year.
Commissioners approved the budget in a 3-1 vote. Commissioner Ed Larenas said he voted against the budget because it didn’t allocate any funds to improve Johnson Pier.
“We should have more emphasis on doing something with our pier,” Larenas said. “Looking for money could take forever and we should start by doing some major projects.”
Pruett said the district prioritized projects based on last fiscal year. The top five priorities include renovating public restrooms, an RV park restoration and greenspace improvements, surveying and replacing Oyster Point marina docks, and the Surfer’s Beach restoration/harbor dredge project.
The district’s wages and benefit expenditures are projected to increase by 6 percent, or $363,000, due largely to an estimated 5 percent salary hike. The district stated that operating revenues are expected to increase by 4.4 percent largely because of increased fees and rents that were offset by decreased revenues at Oyster Point Marina caused by a large adjacent development project. Non-operating revenues are budgeted to decrease by nearly 2 percent. The district received a one-time property tax distribution from San Mateo County of $531,000 from last fiscal year, but it’s not expected again for this fiscal year.
The district also approved a 5 percent increase in slip and berthing rates and for commercial activity permit fees. This is because a 3.3 percent inflationary increase from last fiscal year was postponed due to the anticipated economic downturn. Larenas abstained from voting on the question.
For example, a Commercial Activity Permit, a must for businesses serving the public, now costs $281, a $13 increase. A Commercial Services Activity Permit, required to service vessels or tenants such as with mobile sewage pumps, is raised to $57, a $3 increase. It also means a 12-cent increase per Passenger Service fee for commercial sport fishing and other charters. The decision comes as the district is examining a 2.5 percent fee on earnings charge for off-the-dock fish sales, which would go towards maintaining docks and other public utilities.
“I agree it’s not ideal, but we have to operate as well,” said President Virginia Chang Kiraly. “We’ve already waived these costs for a year, and now that we’re in recovering mode we’re trying to make sure things are getting back to normal.”