TITLE
Recommendation to adopt resolution requesting that the Board of Harbor Commissioners approve the FY 2011 transfer of $16,920,700 based on five percent of FY 2011 estimated gross operating revenue, with a true-up adjustment as necessary to reflect the final gross revenue amount upon issuance of the Harbor Department’s FY 2011 audited financial statements, from the Harbor Revenue Fund (HR) to the Tidelands Operating Fund (TF) as of October 1, 2011. (Citywide)
DISCUSSION
The passage of Measure D by voters in November 2010 amended City Charter Section 1209(c)(4) regarding the formula for calculation of the maximum annual transfer of harbor revenues to the Tidelands Operating Fund. The transfer calculation was changed from a maximum of ten percent of Harbor net income, to a maximum of five percent of Harbor gross operating revenue. The Charter provides that the City Council, by a 2/3 vote on a resolution, may request the transfer in order to “meet the lawful obligations of the Tidelands Operating Fund.” The provision requires a majority vote of the Harbor Board of Commissioners to enact the transfer, determining that the funds “will not be needed for Harbor Department operations.” The Harbor Department Budget (Attachment A), as approved by the Harbor Commission on June 20, 2011, does not provide for the Harbor Tidelands Transfer for the upcoming year.
Tidelands Fund Requirements
The Harbor Tidelands Transfer is one of three key revenue sources necessary to fund the operations of the Tidelands, as demonstrated in Attachment B. It is the most stable and predictable revenue source supporting Tidelands operations. Revenues generated in the Tidelands (fees, parking, service agreements, etc.) and Tidelands Oil up to $55 per barrel make up the remaining revenue sources for operations. Those two funding sources alone are insufficient to fund Tideland operations. Without the Harbor Tidelands Transfer, the Tidelands Operating Fund would have a structural defic...
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