For those boaters who missed our first report and also to provide additional background information we've now confirmed with fellow boaters and others, let's discuss specifics of two separate problems.  The picture is now pretty clear.

1. The Catalina Express parking concession has been a very serious problem for Dana Point recreational boaters for as many years as this service has operated out of our Harbor.   DPBA has been working hard for the past four years to get this problem fixed and as a result, boaters have seen significant progress. 

Beyond the comprehensive holiday parking management plan (a chronological task list covering seven pages) rolled out last year, and which really did make a positive difference, many Dana Point boaters this year were pleased to discover that Catalina Express parking was no longer part of the plan for the West Basin Cove or Island, East Basin Cove or Embarcadero.  It follows directly that West Basin and Embarcadero boaters have reported no notable problems over the 4th of July weekend this year, at least so far.  (If you did see problems then please let us know.)  To be frank, we are very proud of that.  This doesn't mean that dedicated boater parking is not still being misused for the benefit of Catalina Flyer customers.  It simply means that an extremely serious problem, with disastrous consequences for many boaters, was limited to the East Basin. 

Based upon many recent conversations we believe a complete solution for the East Basin is in the works.  But let's carefully review the facts here rather than just blaming others and blowing smoke.  Over the 4th of July weekend the Catalina Express parking concession was budgeted for 84 back row automobile parking spaces in the East Basin Island "dedicated" boater parking lot.  (Quotes are being used here because we do want to explain, and thereby hopefully preclude the possibility that our intentions will again be misrepresented out of context.  To be clear, we believe this parking should be dedicated; we want it dedicated and are working to this end.  While we believe it serves no useful purpose to rant about this (and frankly would damage our cause were this how we typically behaved), we are as frustrated as any boater that it is not dedicated, especially during peak recreational boating periods.)   

Now back to facts.  These 84 spaces were supposed to be used only as overflow following the 77 spaces in the (vacant) Beach House Restaurant parking lot being completely filled.  In other words, the overflow lot was supposed to service only shorter duration Catalina Express parking events, for that customer arriving later in the weekend.  This part of the plan was important because many Catalina visitors leave for Avalon on Friday's before a holiday and stay for 3 or 4 days.  Often Fridays are the busiest Catalina Express parking days.  The big problem here was that this year the parking lot attendants didn't follow instructions and they also had the two parking lot signs mixed up.  So those 84 supposedly overflow spaces (the same number as last year when there weren't any boater East Basin Island parking problems noted) were quickly filled on Friday and of course they stayed filled.  The attendants even let about in about 20 more cars they they should have park before order was restored Saturday morning.  Yes, you've probably heard exaggerations elsewhere, but that's the real number based on estimates we've received from dozens of boaters.  That's about 20 more Catalina Express customers than last year, in a parking lot with hundreds of spaces.  Of course on Saturday the damage had already been done.  It turned out that the last of the Catalina Express customer cars didn't actually leave the East Basin Island dedicated boater parking lot until sometime Tuesday afternoon.

2. A second problem turned out to be even more significant.  As many boaters already now, a new night club known as The Island Bar was opened to the general public earlier this year upstairs at the Aventura Sailing Association.  This location is inside the East Basin Island dedicated boater parking lot and the only parking spaces available nearby for the general public are those few spaces along the Dana Drive jetty.  During peak periods these spaces are usually occupied by picnickers and others.  To get around this limit to their business, the operators of the night club concession has been using gate attendants to let potential customers in as well as publishing East Basin gate code on their Facebook page.  An aside, this gate code was provided to Aventura some time ago as the convenience for its members who would otherwise have to buy cards as slip renters do.

The club has recently been featuring well-known local live bands on weekend nights and afternoons. Good live entertainment which is well promoted is a big draw and as a consequence the night club's business as increased dramatically.  Over the 4th of July holiday weekend, starting Friday afternoon and continuing through Sunday, the very large number of Island Bar customers (and countless members of the general public who were swept along) who gained access to the East Basin Island parking lot almost completely consumed all available boater East Basin island parking spaces.  There was a domino effect too, which also seriously impacted East Basin Cove parking.

What has happened since the holiday to make sure this disaster never happens again:

As discussed within our previous boater blast, three DPBA leaders met with Brad Gross, OC DPH Director three days after the holiday weekend and spent about two hours discussing what went wrong.  Beyond the disappointment and frustration expressed by DPBA representatives during the long meeting at the OC DPH offices, all present were in agreement on these three basic points.  

1. While the parking management plan that had we had worked so hard on the year before was a good plan and had been quite successful last year, it could have produced even better results this year since all merchant employee parking in the harbor was completely eliminated for the entire weekend from Friday on.  

2. Instead the plan was improperly executed this year within the East Basin.  Instead of any improvement, the result was that there was a needless hassle during the most important boating weekend of the year as well as  avoidable loss of recreational boater access to their boats.  

3. More significant even in its negative impact, the unauthorized use of boater parking for night club customers and the general public doomed any plan to certain failure.

As a result of our meeting, OC DPH agreed to address both of the two fundamental issues above and also to make other changes to the holiday parking plan based on what had been learned.  (In candor, it became apparent as the meeting wore on that some work was already underway.)

Following the Harbor Association monthly meeting last Thursday morning (DPBA is an invited guest attendant each month, there representing recreational boater interests), we received a OC DPH status update and learned that progress was being made.  One example, the East Basin Island gate code had been changed and would be changed in the future as appropriate.  While we won't (can't) speak for OC DPH, we anticipate that they will make announcements at the proper time, certainly before the next holiday weekend.

Also last Thursday, DPBA President Rodger Beard met for about an hour with the owners of Aventura Sailing Association, Mark Sanger and Dave Loesch at their facilities.  Just another reminder, DPBA doesn't just throw hand grenades and run.  We strive to work with all harbor stakeholders on behalf of our fellow boaters, to come up with solutions that work for everyone.  This meeting was candid and productive.  We were frankly surprised to learn that Mark and Dave were unhappy with the financial results of the night club operations (operated by bar employee concessionaires).  But they weren't just unhappy about that.  They reported that the negative impact upon boater parking over past weekends also extended to their sailing members as well (some 700 strong) who treat their club as their social hub and a place that they typically need to visit at least briefly before and after they charter a boat.

Above said, it also became apparent that that there was something else bothering Mark and Dave.  As Mark explained with a bit of emotion in his voice, Aventura has been in the Harbor for over 30 years and their core business as always served the best interests of recreational boating.   (As many boaters probably know, Aventura's recreational boating services are pretty extensive as well as affordable.)  We understood Mark to being saying that he was proud that until recently, Aventura has always been viewed as a good citizen of our Harbor and had always maintained high standing within the boating community.  We would be remiss here were we not to emphasize that we completely agree.  No question, Aventura has been a significant long-time contributor to affordable recreational boating opportunities.  This is a key part of DPBA's mission as well.  Indeed many of our members and fellow boaters started out as Aventura members and many still are members.  

Anyway, in the end, "push apparently came to shove".  Mark and Dave reported that they had already decided that they would end the night club operation, effective immediately.  More specifically, what we heard was the following:

1. Aventura will continue to hold member social events and occasional catered functions.  They are of course fully entitled to do this by the terms of their lease as well as guidelines within the current Local Coastal Program (LCP).
  

2. Aventura will hire bands occasionally, but only within the context above. There is to be no night club style operations.   (This should end a complaint from boaters near The Islands Bar who return from overnight fishing trips to find empty bottles and debris in the back of their trucks.)  

3. Like in other Harbor venues adjacent to the water, sound carrying over the water will end by 10:00 PM.  (Another major boater complaint during the past several months.)

4. They will no longer provide parking to the general public.

In the spirit of "trust but verify" DPBA representatives had dinner at Aventura Friday night after racing (it was good too!), and we stayed to enjoy the recorded music.  The music was pretty loud after dinner, as it usually does where there is dancing.  But sure enough, at 9:55 PM the music was turned way down.  We left and could hardly hear anything from outside except folks upstairs talking and having a good time.  

Unfortunately, the story doesn't end here however.  Later this weekend we were quite disappointed to learn that the commitment to the elimination of public parking has not yet been met.

East Basin Island Parking Gate

  As you can see from this picture taken by a DPBA volunteer late on Saturday afternoon, the same parking attendants who have been at the East Basin Island dedicated boater parking gate during most weekends lately, including the disastrous 4th of July weekend, were still there.  We do not know yet whether this was a mistake (we are hopeful) or a misrepresentation during our meeting last Thursday.

What happens next?

Given progress in the offing at OC DPH, as well as our belief that Aventura will eventually (hopefully very soon) live up to every one of their commitments, your DPBA leadership is optimistic that boaters may have seen the last of the problems we've experienced in the East Basin on busy weekends so far this summer, most especially over the 4th of July holiday weekend.  

We'll keep you updated as we continue to work with other harbor stakeholders and continue to monitor for forward progress.  The upcoming Labor Day weekend holiday (not the 4th of July, but still a very busy holiday) will be a good test.  The next 4th of July weekend will the final test. 

DANA POINT BOATER TAXES

Possessory Interest Tax

As many DPBA members will recall from direct personal experience, DPBA led the fight in a very determined effort to overturn what we strongly believe to be a double tax (more on that later on below), namely the Possessory Interest Tax (PIT) during four separate tax years ending in the 2010.  

To begin our latest update, we thought it best to recap information we've provided in past years as a refresher for some and sort of a quick history lesson for others.  First regarding PIT, this tax is now assessed directly on all boaters who rent wet slips and dry storage spaces in Dana Point Harbor.  This is the only harbor within Orange County with marina facilities owned by the people of the State of California and operated in trust (The Dana Point Tidelands Trust).   In our case, the trustee is The County of Orange, who is legally (and arguably) allowed to collect the PIT tax directly from boaters based upon long term (greater than one year) dedicated and exclusive use of a rented portion of the trust facilities.  

Largely through the efforts of former DPBA Treasurer Kevin Hendra, in turn working with representatives of Supervisor Moorlach's office and others in Santa Ana, DPBA was able to get the Orange County Board of Supervisors attention back in 2006, the first year this tax was directly assessed upon boaters.  The County Board of Supervisors eventually authorized a one-time payment of PIT tax bills from the County General Fund ($868,000 for 2006) based largely on procedural grounds.  Sadly, the reasons stated at the time were not based on fairness, but instead upon a well-accepted legal interpretation that a tax cannot be levied after the fact.  Regardless, Dana Point boaters did get benefit in 2006, paying no PIT at all. 

Then the next year, financial representatives engaged by DPBA, the property Tax consulting firm DePasquale, Kelley & Company (D, K & Co) were able to produce results one again for boaters when the tax bills for several hundred individual DPBA appeal participants were significantly reduced.  The year after that, 2008, these benefits were extended to all Dana Point boaters who saw their PIT bills reduced by 30 percent.  Of course The County claimed they had voluntarily improved the way they were doing the assessment calculations (funny how tax departments never make a mistake isn't it?) but boaters benefited and we scored it as a victory for affordable recreational boating. (Albeit less of a long term victory than we'd hoped, as we'll explain further on below.)

PIT is a very complicated matter because the assessments are based on a (quite small) percentage of individual boater use of a large, high value and extremely difficult to value public property, the land and water within the Tidelands Trust.  Here we're referring to the portion of Dana Point Harbor employed exclusively for recreational boating uses.  The taxable uses in the County's interpretation includes the following:  wet slips, boat yard dry storage, docks, boater rest rooms and laundry facilities, pump outs, parking lots, boat hoists, fairways and even the water on which our boats float on.  It's fairly straightforward process to assess and appeal the value of individually owned assets such as our homes and our boats. As is we think is apparent, it's much, much more difficult to assess and appeal PIT.  Further, the stakes are also much higher with in a PIT assessment (any appeal of total assess value can affect all who receive a tax bill) which means government involvement greatly increases; further complicating the appeal process and making it even more expensive.

Anyway, let's move on.  After completion of their work on the 2009-2010 tax year appeals, D, K & Co recommended that DPBA suspend any further financial appeals since all remaining grounds had by then been denied at the local level (here we mean The County).  D, K & Co explained during a DPBA members-only general meeting that local denial of all arguments meant that the next steps would have to be pursued within the legal system, were the PIT appeal process to continue.  (These denied augments included a most obvious fact: the prior boater tenant agreements had been eliminated during a roll out that began in 2006.  Instead boaters now have "use licenses", for specific, limited, undedicated uses.)  We also learned that legal PIT challenges are notoriously expensive, even by most legal standards. This was due in part due to the expectation of a lack of success at the local level.  D, K & Co's experience has shown that a legal action would have to be heard locally and then appealed to at least the next higher level to receive serious consideration.  Last and certainly not least, we learned of a very significant potential downside: the possibility of being directed to pay opposition legal fees in the case judgments during first stages in the legal process.   No surprise at all really, the DPBA general membership voted in the summer of 2010 to suspend any further collective PIT appeal efforts.

So why is PIT a double tax on Dana Point Boaters?  

Beginning in 2006, the master leases for the three marinas in Dana Point Harbor, namely the east and west basins and the Embarcadero were replaced by operating agreements.  There were various implications to all parties involved including boaters.  We won't belabor here except to say that starting in 2006, boaters' slip and dry storage monthly bills stayed the same and in many cases increased while these boaters were also billed directly for PIT.    The legal minds in Santa Ana claimed the money couldn't be transferred from one County agency to another based upon a legal technicality which they did not deem appropriate to try and resolve.  The County also did not lower slip and dry storage rents in proportion to the PIT amount, despite DPBA pleas and urging during more meetings and conversations on this topic than we can recount.  

So the net here is that each year the marina operators and the County split the benefits of this maneuver, on a 20-80 basis (20% to the marina operators, 80% to the County General fund as we understand it).  Without question, Dana Point boaters (not Newport Harbor, not Huntington Harbor, only Dana Point) are paying PIT twice.  First we continue to pay to the County within our monthly slip and dry storage rents and then we pay a again time when approximately 3000 tax bills are sent directly to Dana Point Boaters each July.

Should individual Dana Point boaters file their own local  PIT appeal this year if DPBA no longer can take the lead?

Of course, you can do this.  But the following considerations may influence your decision:  

1. The PIT financial appeal process is long and surprisingly arduous; it can run up to three years to the conclusion, with many confusing, sometimes ominous sounding, even threatening notices to being delivered in the mail every few months.  Most notices really only inform those who appeal of the next steps in the process and remind boaters of opportunities to cancel their appeal.  However some notices are more than that - for example, appearance notices concerning a series of 3-6 hour public hearings which may or may not be necessary for the individual appealers to testify at.

2. The PIT tax, while entirely unfair, is still a relatively small amount, usually somewhere between 30 and 150 dollars a year, depending on the size of the slip or dry storage space your boat was located in as of January 1st of the upcoming tax year.  Indeed, PIT is typically only a fraction of what many boaters pay in personal property taxes discussed next.  (By the way, don't bother to try to compare PIT bills with your slip neighbor!  If this year is like past years, there seems to be very little correlation, even for the same size size.) 

Above said, it is extremely easy to file the initial PIT appeal paperwork and everything you need is provided on the DPBA website.  (Click here.)  Contact us if you need help.

Personal Property Tax

Dana Point boater tax bills, both PIT and personal property tax (PPT) arrive at the about same time each year, usually around mid-July if your current mailing address is correct.   The bills arrive in different envelopes.  Both tax bills for due by Mid-September and each must be paid separately.  It is hard for most of us to tell these two bills apart at first glance.  Look for the key words "personal property" and "possessory interest.  Again, the PPT bill is usually for a much larger amount than PIT. 

No matter what you decide about filing PPT and/or PIT appeals, you must pay the amount demanded or face severe financial penalties that grow rapidly over time! 

PPT assessments are much different from PI.  The PPT tax amount due is determined based upon 1 � percent of the assessed value of the boater's personal property, in other words, the current market value of their boat.  The County uses various sources including BUCK to determine what they think is an appropriate assessed value, but somehow they always seem to aim high (especially in these difficult times when used boats are selling at a fraction of what the market dictated even 2-3 years ago).  

Many boaters automatically pay their PPT tax, but the appeal process is just as easy as PIT to get started and much less arduous to complete.  Plus opportunity for the potential savings is usually greater, and it recurs each year thereafter a successful appeal.  The PPT appeal process is analogous to real estate and typically (but not always) can be handled over the phone in a 3-4 (perhaps lengthy) phone calls to Santa Ana, after compiling and organizing  comparable data from a sources such as Yacht World  and submitting it.  This data can be submitted along with the appeal forms are later.  A well written letter of explanation regarding the reduced assessment you are seeking is a good idea.

Your DPBA leadership team thinks for many boaters may find that it makes a lot of sense to file a PPT appeal.  As we've already mentioned, the process is relatively painless (we've personally done it twice with success) and it is fully explained on the DPBA website.  Anticipating a concern that some boaters have expressed in the past, to the best of our knowledge there is never been any sort of retribution for participating in this process.

Well, we think that's it for this year on taxes, except to remind you again to pay on time.  Please do contact us by email (click here) or call us and leave voice mail at (949) 485-5656 if you have questions or feedback.  We'll be happy to help where we can and promise to get back to you as soon as our "real jobs" permit.  Remember though, just as we've all heard/read many times in all those fine print legal notices, "DPBA is not your legal or financial representative and does not offer legal or tax advice, etc. etc., etc. ". 

WEBSITE AND BOOKKEEPING MATTERS

We hope that all of our members, as well as all other DPH community members are frequently looking to the DanaPointBoaters.org website as a source for current and up-to-date boating and harbor related information. There is literally a ton of information on a broad spectrum of topics available there, thanks in major part to the tireless efforts of long time DPBA Webmaster, Director and Secretary Steve Carpenter.

We have been holding off on membership renewals for some time this year, until a "behind the firewall" members-only area could be operational, but the website upgrade is quite complex and has been delayed by Steve's full-time+ work schedule lately. (Steve, like the rest of the DPBA officers, directors and advisors is a boater and very dedicated volunteer.) Because the website still isn't quite ready, we are now asking existing members as well as new members to go to the existing website and go ahead and renew their membership. Thereby you can update your contact information let us know what your interests and priorities are, as well providing updated contact information we will use to keep you informed. This will insure that you remain informed about the evolving issues within our harbor.

Again in 2011, there is no charge for DPBA membership. We have been very careful in our uses of our members' funds accumulated during the almost 5 years since we were incorporated as a not-for-profit organization. Rest assured that we will continue to represent Dana Point boater interests and work with the other stakeholders potentially impacting recreational boating interests, both inside and outside the harbor.