City Revamps Slip Fee Formula

By Carla M. Collado
Staff Writer

A proposed policy that aims to correct a long-standing inequity in boat slip pricing would create a standard square-foot rate for all slips in Long Beach’s marinas starting this fall.

The city’s Marine Advisory Commission (MAC) discussed the new policy last week and is scheduled to vote on it next month.

The new policy is part of the Marina Slip Pricing Policy adopted by MAC in 2006 — a cost-recovery policy where the marinas look at what operating costs will be for the next year and develop slip rates to cover those costs. As part of that policy, all slips of the same size in the marinas would be priced the same, regardless of the condition or location of the slip, and a standard square-foot rate would be applied to all slips.

Last October, the city’s Marine Bureau implemented the first part of that policy, increasing rates in the Shoreline and Rainbow marinas (up to as much as 31% for larger slips) to match the rates in the Alamitos Bay Marina, explained Marine Bureau Manager Mark Sandoval. Now, the bureau is proposing to implement the rest of the Marina Slip Pricing Policy for fiscal year 2009 (starting Oct. 1, 2008).

A MAC ad hoc committee worked for the past several months to develop the square-foot pricing system. The formula involves estimating the total costs that will need to be recovered through slip revenues ($17,831,000 for FY 2009) and dividing that by the total number of rentable square feet of slip in the marinas (1,626,636), Sandoval said. That amount is then divided by 12 months, equaling 0.91, or 91¢ per square foot.

Under the new system, boaters no longer would be charged for overhang. In other words, a 24-foot boat and a 20-foot boat would be charged the same because they are both in a 20-foot slip.

Monthly slip rates would be calculated by simply multiplying the 91¢ square-foot rate by the total square-footage of each slip, rounded up to the nearest nickel. That will result in monthly slip rates of: $164.45 for a 20-foot slip; $370 for a 30-foot slip; $584.65 for a 40-foot slip; $787.90 for a 50-foot slip; and so forth.

“In every category, we’re still going to be below market,” Sandoval said, citing a March 2007 survey the Marine Bureau did of nearby marinas’ rates.

While slip rate changes for FY 2009 would vary from a 42.4% decrease (for a 25-foot boat in a 20-foot slip) to a 48% increase (for a 100-foot boat in a 100-foot slip), slip rates — and thus slip revenues — on average will increase about 3.6%, according to Sandoval.

“Despite the impact of your personal slip, as a whole, the revenue is going to be increasing by 3.6%,” he said. “So you may be paying a larger percentage, but somebody else is counterbalancing that by getting a larger break … so this year is the adjustment year, and there’s only going to be one of them.”

Sandoval explained that from 1991 to 2002, slip fees in Long Beach for the most part remained the same, due to a recession and a struggle to maintain slip occupancy.

In 2002, the Marine Bureau adopted a market-based slip pricing strategy, and in 2003, it implemented a consumer price index adjustment (adopted by the City Council in 2002). The CPI adjustment has been implemented every year since.

Historically, small boats have paid more per square foot than larger boats in Long Beach marinas, and currently, all individual boats are charged different amounts, Sandoval said.

“I think it’s definitely a (more) fair way to manage the marina and manage the revenues — obtain the revenues — than what’s been done in the past,” MAC Chair Brad Whyte said.

If MAC votes in favor of the new slip pricing policy next month, the proposal then heads to the City Council for approval (as part of the Tidelands budget).