September 2012.

Wu: How to make a bad situation worse

wuBy Jack Wu
10:54 AM PDT, September 16, 2012
Marshall “Duffy” Duffield has lived in Newport Beach his entire life. He started building boats here in 1970. And he spent 10 years on the Harbor Commission.
The Duffy Electric Boat Co. chief recently received his plaque of appreciation regarding his commission service, which ended this year. The day after, the Newport Beach City Council rewarded him by voting to potentially tax him out of business — at least over time.
Here’s how. At a council meeting last month, lame duck Councilman Steve Rosansky tried to empathize with the freeloading, gift-receiving commercial dock owners by telling them that “a new paradigm has been developed for Newport Beach. Some business may go away, some will change their operations,” and that his “own business (a Togo’s in Orange) had dropped by 30%; it’s just the way it is sometimes.”
At a special council meeting Sept. 12, he, along with Councilmen Ed Selich, Mike Henn and Rush Hill, voted to charge commercial marina operators up to 20% of their gross income as rent (a tax).


On a split 4-3 vote at last night’s city council meeting, a 20% tax on gross income was assessed on commercial marina operators.  A stream of small business owners testified to the city council majority to stop the money grab, or face the reality of marine serving businesses going bankrupt.

The council agreed to spend the next two weeks working with marina owners to work out the specifics of the tax implementation.

Fellow residential dock owners …  we are next!  They’ve already assessed a 300% tax increase on moorings, now a 20% tax on commercial marinas.

The net effect of the 300% mooring tax is a mass exodus of boats from Newport Harbor.  That hurts the city and our marine serving businesses.

It is clear to me that the council majority is driven to collect as much tax money as possible for the funding of the bloated city bureaucracy.  They mask this money grab behind the feel-good concepts of Harbor and beach maintenance projects.  In my opinion, as they sit on $100 million in budget reserves and one of the highest employee to resident ratios in the state, they don’t have a money problem.  This city has a bloated government problem.


Wednesday evening we expect the City Council to impose a new tax of 20% on the gross sales of commercial marina owners.  Of course, this tax will get passed on to the public that rents slips.

Why should you attend this meeting?  Because residential dock owners are next! 

The City wants to raise over $100 million in new taxes to fund Harbor improvement projects.  We dispute the need for some of these projects.  Specifically, city staff feels Global Warming requires that the Balboa Island seawall should be raised.  Staff believes over $100 million should come from new taxes on three sources; mooring holders, marina owners, and residential dock owners.   They have already increased mooring taxes by 300%.

We hope our elected officials will reject the staff recommendation and adopt a more reasonable approach.

Three weeks ago our legal counsel, Kristine Thagard, requested the City and Stop the Dock Tax enter into a jointly funded forensic audit of the Tidelands Fund.  This is the budgetary fund charged with Harbor and beach maintenance, improvements, and operations.  It cannot be used other city expenses that are unrelated to the Harbor and beaches. We have heard rumors of mismanagement of the Fund and felt it was prudent to have a detailed audit.  Our request was rejected.  Lifeguard salaries and benefits compromise part of the Fund’s expenses.

An example of our concern can be found in last week’s Inside Edition television show segment about two Newport Beach lifeguards (see video clip below).  The segment includes a discussion of lifeguards possibly cheating taxpayers by getting paid for not working.  In one example, Inside Edition follows a N.B. lifeguard to San Francisco where he watches his daughter’s water polo game – while he was on the clock being paid by Newport taxpayers.


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