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Waterfront department reports $21M in FY25 revenues, flags dredging funding loss and Stearns Wharf insurance increase
Summary
Staff told the Harbor Commission the Waterfront Department closed FY25 with nearly $21 million in revenues, slightly above budget, but flagged an outstanding tenant rent of roughly $630,000, possible future dredging shortfalls of $4 million annually, and a jump in Stearns Wharf insurance deductible to $3 million.
The Waterfront Department told the Harbor Commission on Sept. 18 that department revenues for fiscal year 2025 finished near $21 million, about 1.9% ($~383,000) above the adopted budget and about $981,000 higher than FY24, but staff warned of outstanding rent and looming liabilities that could erode that surplus.
Cesar Barrios, Waterfront business manager, presented the year-end summary and detailed program-level results: property-management revenue showed gains but included approximately $630,000 in rent yet to be collected from a key food-service tenant; parking revenue rose after a 50¢-per-hour increase that took effect July 1, 2024; and marina-management revenue fell roughly 2.1% below budget, driven by lower transfer, visitor and live-aboard fees.
Barrios said the department’s reserves exceed current policy requirements by about $6 million but that rising liabilities — including a recent increase in the Stearns Wharf insurance deductible to about $3 million and the potential loss of federal dredging funding that would require covering approximately $4 million annually — create fiscal pressure. “We don’t feel this is enough given the current and increasing cost of liabilities,” Barrios said, calling for stronger reserves and continued pursuit of revenue and expenditure reductions.
Commissioners asked whether reserves could be used to cover dredging if federal funding is lost; Barrios said reserves could be tapped but doing so would likely put reserves below policy and would require City Council approval and a plan to rebuild them. Commissioners also discussed options including bonds for specific capital projects (for example, sea-level-rise or major marina replacement), the city’s current debt service needs, and insurance strategies. Barrios said the waterfront will work with the City Administrator and Finance Department on an updated reserve policy and will present proposed budget adjustments in the next budget cycle.
Barrios also noted a one-time transfer into the waterfront operating fund from a regional BEACON fund and unspent grant funds for the Commercial Fishermen of Santa Barbara that have since been processed. He said the department will begin budget preparations in October for the FY27 cycle and expects budget presentations to Council in April 2026 and final adoption in June 2026.
