Thumbnail photo by Gavin Van Alstine
Though the district’s loan payment negotiations with the U.S. Department of Agriculture are on hold due to the federal government shutdown, Crescent City Harbor commissioners directed staff on Wednesday to obtain quotes for insuring the inner boat basin.
The Harbor District Board’s new vice chair, John Evans, encouraged Harbormaster Mike Rademaker and Fiscal Officer Sandy Moreno to continue exploring “alternative ideas” with the federal agency.
Moreno said having the insurance quotes, and finding out whether the Harbor District can afford insuring the marina or not may help in its negotiations with the USDA, particularly if those quotes address tsunami coverage.
“It’s important to have that done and we have that on file to verify (if) we really can get tsunami insurance ‘cause at this point we’re being told we can’t,” she said. “To have that quote and find out whether we can will support our argument when we go to the USDA one way or the other.”
Moreno told commissioners that the Harbor District can make its annual $260,000 payment to the USDA, which loaned the district the funding it needed to rebuild the marina following tsunamis in 2006 and 2011.
However, she said, she and Rademaker still hope to convince the USDA to allow the Harbor District to make that payment in several installments, which would “give us some cash flow we might need.”
They also hope to convince USDA representatives that the Board’s decision in late June against insuring the marina against collision and fire was sound. Rademaker reminded commissioners that the policy had included a $181,500 premium and a $250,000 deductible and hadn’t covered tsunami, wave or wind damage.
“At this time, they’re evaluating the documents we had brought to their attention,” Rademaker said. “I would say that there’s a healthy skepticism on their part … but they didn’t rule it out.”
Rademaker said the benefits that property insurance plan would have brought the Harbor District was negligible.
The Board of Commissioners in June had decided against the policy after Moreno proposed taking the $181,500 premium, putting $50,000 of it toward maintenance and using the remainder to keep the agency solvent through the 2025-26 fiscal year.
It was Commissioner Annie Nehmer who urged the harbormaster to obtain insurance quotes, saying that the agent she communicated with indicated that the harbor could insure the marina against tsunami, wind and wave damage.
Nehmer said she and her colleagues had set a deadline “to get that in two weeks ago” and asked why that hadn’t been done.
Rademaker said he is “constantly chasing deadlines” with the California Office of Emergency Service regarding the damage the harbor took from the July 30 Kamchatka tsunami being one example of the issues he’s addressing.
Since the USDA is “obviously shut down,” Rademaker said he moved loan negotiations further down his list of priorities.
“There’s not much we can do with the USDA until the government reopens,” he said.
The Crescent City Harbor District makes its loan payment out of transiency occupancy tax revenue from voter-approved Measure C, which was on the ballot in 2018. Measure C funds are also slated for harbor maintenance.
Rademaker on Wednesday said he’s still hoping that the USDA will allow the Harbor District to make 10% payments on its loan, about $30,000, this year and next year and use the remaining funds for maintenance.
Evans said that obtaining the insurance quotes is important information have when the USDA resumes operation.
Commissioner Rick Shepherd agreed, though he wasn’t sure whether the Harbor District could afford tsunami insurance.
“I definitely think it’s important to get the quotes,” he said. “I would think that trigger should be pulled only when (the USDA) tells us we have to have it.”
Moreno also gave commissioners an update on the CCHD budget. According to her, the Harbor District has $300,000 in “cash on hand” currently. That was a decrease of about $68,000 with $55,000 going toward expenses associated with a long-time employee’s retirement.
According to Moreno, the Harbor District has a budgeted deficit of $373,039 for the 2025-26 fiscal year. The Harbor District has historically operated at a deficit, she told Redwood Voice Community News. It also pays $548,869 in settlement payments to Fashion Blacksmith.
On Wednesday, she concurred with Evans when he said that the Harbor District is generating revenue, that its operating costs are good, but it has a “debt problem.”
On Thursday, however, Moreno told Redwood Voice that despite its financial challenges, the Harbor District still expects to find a developer for its two RV parks. She also pointed out that construction on the sea wall and Citizens Dock, paid for through about $15 million in U.S. Maritime Administration Port Infrastructure Improvement Program grant dollars, will be starting construction this fiscal year.
“All the indicators show we are moving really well in a positive direction,” she said. “But the fact remains we are at a large deficit at the moment.”
Something as simple as splitting the USDA payment into two installments this year would help CCHD’s cash flow, Moreno said.
