Position Paper on Harbor District Finances "Show me the Money"

By James "Jim" Tucker

Much has been said about the status of the Harbor District debt and finances. The following is an accurate factual, documented statement of the Harbor District accounts.I hope it proves to be beneficial.

When I was appointed to the San Mateo County Harbor District in March of 1998 the District had loan debt in the amount of approximately $17,500,000. These were loans that previous Commissions had secured from the State Department of Boating and Waterways for improvements made at Pillar Point Harbor and Oyster Point Marina. (This State agency oversees State authorized harbors and marinas, for various improvements). At that time, there was no structured business plan in place to repay the loans except to make annual payments of principle and interest. Through the offices of former State Senator Quentin L. Kopp, the District was able to receive a moratorium on payment to the State for three years. This gave the Harbor District the opportunity to save money by investing it properly and amassing a significant cash reserve. Additionally, a committee of two Commissioners, Pietro Parravano and myself, along with the general manager and legal counsel were given the task of working with the Department of Boating and Waterways to restructure our debt. After several local meetings and two trips to Sacramento and the completion of a detailed business plan for the District, (paid for in part by the State), our restucturing plan will now appear on the September agenda of the State Commission for its approval. Having received the support and endorsement of the Harbor District and Boating and Waterways staff we are confident that our new plan will be approved.

The result of our efforts is plain to see. The June 2002 summary of our balance sheet shows a fund surplus of approximately $9,000,000 invested both locally, with the County and with a State fund. Our business plan calls for the final payment on our debt service to occur during the year 2018. We have also secured an additional five years of "interest only" payments that will further enhance our financial position. Still the final payment to the State on our existing loan debt will be 2018. We now have clearly defined direction and purpose within the District.

If we were to compare the Districts' debt to that of a home owner in San Mateo County who owes $400,000 on their home mortgage they would have to hold $200,000 in cash in the bank to have the same funds to debt ratio that the Harbor District enjoys today, and the District pays only 4.5% on its loans.

Lastly, there is one more aspect of our indebtedness to consider. As I mentioned above, in the past the District has borrowed money from the State. California does not fund its Ports, Harbors and Marinas to the extent that other States fund theirs. The money borrowed from the State is your tax dollars coming back to the community that originally paid them for services that you are entitled to receive. My job as your Harbor Commissioner is to provide the residents of San Mateo County and others who use our facilities with the best commercial and recreational boating facilities that can be obtained. Further these services must be provided at the least cost to the public, who, after all are entitled to them as taxpayers.

QUARTERLY INVESTMENT REPORT
ENDING JUNE 30,2002

INVESTMENTS:

Local Agency Investment Fund: $1,956,745.01 San Mateo County Investment Pool: 4,943,497.13 San Mateo County Investment Pool: 2,198,123.97 Borel Bank and Trust(CD): 105,774.73 Cash held in local banks: 176,221.03

TOTAL: $9,380,361.87 as of June 30, 2002

A copy of this public report is available by calling: 650-726-4723.

NEWS FLASH NEWS FLASH NEWS FLASH NEWS FLASH NEWS FLASH NEWS UPDATE UPDATE UPDATE UPDATE UPDATE UPDATE UPDATE UPDATE

On Thursday, Seprember 19, 2002 the above mentioned State Commission on Boating and Waterways voted unanimously to support the Districts restructuring plan. Congratulations to all who participated on this difficult task, well done. Please look for the press release coming out next week.