The Dock Tax: Why The Newport Beach Boat Parade Is Being Boycotted

Next week is the 104th Newport Beach Christmas Boat Parade, an amazing and fun tradition in my city that until now has only failed to run during World War I and World War II. Now it’s under threat from a different war, one some residential dock owners are waging against the Newport Beach City Council, over proposed dock rent increases of 500% to 3000%.

I’m going to be writing what’s popularly become known as “The Dock Tax” by residents opposed to the City Council change over the coming few days, exploring different issues of it. In this piece, I’ll give an overview of the issue and how the boat parade came to be involved.

Let me also make clear that that the Newport Boat Parade hasn’t been canceled. It’ll still continue, and for the many visitors who come for it, the boycott might not be that noticeable. It really depends on how many residential dock owners decide to “go dark” during the event.

Private Docks, Public Waters

At issues are about 1,000 private docks in front of residential homes in Newport Beach. The docks are built over public land, state tidelands, to be specific. The city manages these waters on behalf of the state and collects a usage fee. Currently, that fee is $100 per dock, regardless of size or number of boats moored.

Good luck if you want to learn more about the current permit process at the city web site, by the way. The city’s main “Harbor Resources” page has a link to a page supposedly to answer questions about non-commercial pier permits, but that’s actually all about commercial piers. It has a page about how to transfer your pier licence to a new homeowner, but it offers nothing about what’s in the current agreement with residents and so on.

Good luck if you call the city, also. I tried twice, on two different days, last week, to get a copy of my own agreement. I’m still waiting for any city employee to get back to me.

Still, the public knows that the current fee is $100 because of all the attention on what the city wants to increase it to be, which is, well, it’s complicated — and very rushed.

City Seeks “Fair Market” Rates

You see, the city has been reviewing how much it charges for all types of facilities in the harbor, to ensure it’s keeping in line with state law that requires it charges a fair market value for public land use. The city especially uses some fear that it could get accused of making a gift of public funds if it doesn’t increase fees despite the state not apparently making any threats or demands that it’s not already charging enough.

That’s why last month, commercial rates went up from around 36 cents per square foot to $1.68, a 450% jump. Now it’s time for residential dock owners to be similarly aligned.

The city held a workshop on November 19, just a few days before Thanksgiving, to discuss the proposal to raise what it calls a rent and what many opponents call a tax. The presentation can be found here. It suggested that residential owners should be charged $0.525 per year based on the size of their dock, waters within an internal slip and 10 feet of “usable waters” around a dock.

Despite knowing what was proposed, the city sent no estimated bills to any of the dock owners. It was left to owners, who received small postcards information them of a “rent change,” to figure out that this all meant they’d be paying $500 to $3000. Or maybe nothing, if they could figure out if their docks were over private waters.

The City Council Meets

I didn’t make that workshop. I didn’t even know it was happening, perhaps because I just moved into a new house with a dock, so maybe the postcard came before we arrived. I did make it to the city council meeting last week, however, which was packed with people upset about the change.

There were many concerns, ranging from whether residents would have to maintain costly and perhaps impossible-to-obtain insurance to indemnify to city to whether the fair marke value of the docks was fairly assessed. You can read more about it in this Daily Pilot article.

I’d say the biggest concern over all of those was that no one wanted the city to rush ahead with making a decision. While no one wants to pay more for something than they have to, I wouldn’t say there was mass opposition to a fee increase. Rather, there was mass opposition to the city pushing ahead with something that many there felt hadn’t been explored enough.

The Council Pushes Ahead

To its credit, the city council didn’t vote to approve a change then and there. Largely, there were so many unanswered questions that it couldn’t. But it also didn’t vote to hold further workshops or discussions. Instead, it voted to take the matter up again on December 11.

Ironically, this will be the first council meeting held in Newport Beach’s new, expensive city hall, a construction of some controversy in the city and one that will be scrutinized even more when the council debates whether it needs to extract more money from its citizens despite having a huge budget surplus.

Postscript (Dec. 4): The city has decided the meeting will now remain in the old council chambers, as it’s not certain if the overflow area in the new chambers will be ready.

The Boycott Goes Ahead

If the council had voted to explore the issue more, the threatened boycott of the parade probably wouldn’t have faded away. Instead, pushing ahead has caused the Stop The Dock Tax group to move forward with a boycott. That image above is an example of door hangers that were distributed over the weekend.

As said, the parade will no doubt continue. Perhaps some private dock owners might not put a few boats in it or pull out from planned participation. More likely, many homes throughout the harbor will switch off their lights.

I don’t actually agree with the boycott, but I certainly can understand why many dock owners feel powerless and as if this is the only thing they can do.

Again, I’ll explore some of the issues more in the coming days. Personally, I’m:

  • Not opposed to a reasonable fee hike (I want to support public lands)
  • Question the “fair market value” of docks the city probably wouldn’t rent if they didn’t exist
  • Question the choice of not charging for boats actually moored
  • Have concerns about how the fees might escalate over the years

It’s also easy to write the issue off as something that a bunch of rich people are complaining about. That overlooks the fact that some already pay extremely high amounts of property tax already, in part based on the value of having a dock.

More than anything, however, I was struck by the large number of senior citizens at the meeting, who purchased homes back before when Newport Beach real estate was so expensive and question how they’re going to afford the new rates.

At the very least, the city could take its time to explore this all more in a series of workshops. That doesn’t seem unreasonable to ask for.

I’ll update this post with links to future posts that I do. In the meantime, some resources if you want to learn more:

Postscript: See my follow-up posts: