County May Halt Harbor Subsidy to Parks

Committed to stemming a fiscal red tide, county supervisors today are expected to freeze an annual million-dollar subsidy from Channel Islands Harbor that has kept the county parks system afloat for nearly two decades.

Supervisor John K. Flynn, whose district includes the harbor, and Supervisor Frank Schillo have told their colleagues that the harbor is in financial trouble and cannot afford the remaining $231,000 of the annual subsidy it owes the parks system under a long-standing board policy.

To avoid further damage to the economic health of one of the county’s most significant recreational and business centers, the subsidy should be immediately halted, they say. The move is not expected to affect operation of the county’s 18 parks or community centers before the end of the fiscal year next June 30, officials said.

“We’re down to almost nothing as far as making our loan payments, we’re down to almost nothing as far as making improvements, we’re down to almost nothing as far as making maintenance corrections on riprap and so forth,” Flynn said Monday. “The harbor is in serious trouble.”

Located at the southern end of Harbor Boulevard, Channel Islands Harbor has more than 1 million visitors annually. The coastal attraction has 310 acres of harbor shops, restaurants and marine businesses, 2,800 boat slips, public launch ramps, commercial fishing marinas and two miles of beaches.

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Officials have blamed outdated business themes, a recession that made boating an unaffordable luxury, acres of new retail development along the Ventura Freeway and a lack of recreational opportunities at the harbor for a revenue decline that has ranged between 3% and 5% since 1990.

Compounding the problem is that since the passage of Proposition 13 in 1978, the harbor’s revenue has been siphoned off to make up about half of the park system’s annual budget.

Officials say the parks system has enough cash on hand to operate the parks system this fiscal year. But removing the subsidy creates a major policy decision for the board: how to support county-owned parks, campgrounds and picnic sites without help from the harbor.

The proposal by Schillo and Flynn to cut the subsidy already has drawn concern from Supervisor Susan Lacey, who considers the move too abrupt, according to an aide.

“She does think this is premature to take any action, and that the issue should be studied in much greater detail,” said Lacey’s top aide, Steve Offerman.

But confusion over the budgets of both the harbor and parks system is spurring Schillo to call for the subsidy’s end.

He said he was shocked to learn that the harbor was having financial troubles, considering that the Board of Supervisors was assured twice in the past two years that the harbor administration could continue to afford the subsidy.

The assurances came as the board created a major reorganization plan that called for harbor support for parks to be reduced from its usual $1.2-million level to $1 million in this fiscal year, with payments declining to nothing over the next five years.

But officials have since learned that the harbor would have to go into debt in order to cover the subsidy this year, Harbor Director Lyn Krieger said.

Krieger said the money is needed to reinvest in the harbor if it is to continue to generate more than $6 million in annual revenue.

Schillo said freezing the subsidy to get a better handle on harbor and park finances makes good sense.

“We need to put a stop to this and find out exactly what’s going on,” Schillo said. “It’s just unconscionable. You have to rely on certain information, you have to assume the staff is giving you accurate information, and then you find out it isn’t true at all. The repercussions of this are going to reverberate for a while.”

Supervisor Judy Mikels said she also is concerned over the lack of clear financial information. She will cast the needed third vote to freeze the subsidy, she said.

“It makes sense and probably would have made sense earlier to say, ‘Time out,’ ” Mikels said. “It is absolutely imperative that we get this cleared up and really address the problem. We should not allow the harbor--a potential cash cow--to be run into the ground.”

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Supervisors also are expected to instruct County Administrator Lin Koester, Auditor Tom Mahon and top officials in the harbor and parks agencies to spend the coming weeks solidifying funding strategies, costs and future revenue sources for both agencies.

A report is expected back to the Board of Supervisors during a mid-year budget review in January.

“The bottom line is that they both need to be evaluated,” Koester said Monday. “We have an opportunity to really take a close look at the options and come back with a real good financial analysis.”