Long Beach Seeks Harbor Revenue for Tidelands Fund

Long Beach Seeks Harbor Revenue for Tidelands Fund

The Long Beach City Council, brushing off strong opposition from shipping lines and terminal operators, voted to ask the Board of Harbor Commissioners to transfer $16.9 million of harbor revenue to the city’s tidelands operating fund.

With the added funds, the nation’s second busiest port will end up transferring about $100 million of revenues to the tidelands fund over a two-year period, said Michele Grubbs, vice president of the Pacific Merchant Shipping Association.

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The city council’s latest funds transfer request, approved late Tuesday, results from passage last November of a ballot initiative known as Measure D that changed the formula by which the Port of Long Beach transfers money to the city’s tidelands fund each year.

During the past 15 years, the funds transfer was based upon a formula that stated that the harbor commission could be asked to transfer a maximum of 10 percent of the port’s profit to the tidelands account. Measure D, which was approved by the voters, changed the formula to a maximum transfer of 5 percent of the port’s grow operating revenue.

Industry groups at the time accused the mayor and city council of proposing the formula change at the deadline for submitting voter initiatives, with no opportunity for public discussion and no budget analysis of the implications. Since then, relations between Mayor Bob Foster and the port have been strained.

The city said the change in the formula would result in a shift of an additional funds transfer of only about $1.5 million a year. The city’s request this week is actually for $16,920.700.

Measure D also changed the formula under which oil revenue from Port of Long Beach property is transferred to the city’s tidelands fund. That transfer appears to be about $40 million per year, Grubbs said.

If the harbor commission grants the city’s request, the port could end up transferring about $100 million of harbor-generated revenue over a two-year period to the city’s tidelands fund to be used for expenses such as lifeguards, marine safety and beach cleanup.

Grubbs noted the Port of Long Beach is engaged in a massive capital expansion program and needs that money for marine terminals, on-dock rail facilities and a new bridge. The port plans to spend about $4 billion on capital projects over the coming decade.

-- Contact Bill Mongelluzzo at bmongelluzzo@joc.com. Follow him on Twitter @billmongelluzzo.