Harbor midyear report: revenues down modestly as insurance and reserve questions rise; dredge and wharf work underway

Waterfront staff on Jan. 16 presented the fiscal year 2025 midyear budget, facilities and harbor operations reports to the Santa Barbara Harbor Commission, saying midyear revenues through November were down just under 3% compared with the prior year while several cost pressures—including insurance and reserve requirements—continue to rise.

Waterfront business manager Cesar Barrios said the department’s midyear revenue snapshot (July–November) showed a primary decline in property management revenue, which was 9.3% lower than the same period the previous year. Barrios attributed the downturn principally to weaker food‑service and commercial‑lease receipts and to unusually cool summer weather that depressed visitor volumes. He reported small changes elsewhere: parking services were roughly flat (up 0.5%), Meridian (slip) management revenue was up 0.7% and slip transfer fees were down about 28.4 ("just under $200,000"), with 43 slip transfers processed through November versus 61 the prior year.

On expenditures, Barrios said midyear actual outlays (through Nov. 30) were below midyear expectations on several controllable items; salary savings reflect vacancies. "We are on track at midyear," he said, while cautioning the department could finish the year below budgeted revenues if renovation‑related rent deferments and weak visitor trends continue.

Commissioners focused discussion on the waterfront’s financial levers and reserves. Director Mike Wilshire told the commission that allocated costs the department cannot directly control—insurance, IT, fleet and overhead—are increasing, and that the department’s insurance bill has risen from about $400,000 to roughly $1.5 million during his tenure. Commissioners discussed whether the department should consider functional cuts or different reserve targets rather than automatic fee increases; Wilshire noted reserve policy is set by City Council and said the administration and Harbor staff will bring more detailed proposals during the FY26–27 budget process.

Facilities manager Brian Adaire presented Stearns Wharf maintenance details. He said the annual wharf maintenance budget is $1,850,000, of which roughly $1.2 million supports full‑time maintenance staff and operations and $650,000 is earmarked for routine capital (heavy timber) projects. Adaire said divers inspect and clean piles regularly and the department schedules targeted replacement of deck boards and piles to maintain safety. He confirmed a mobilization by Pacific Dredge to begin dredging was expected the week of Jan. 16, weather permitting, and said heavy‑timber and pile work is ongoing. Adaire noted the department also responded to a recent vehicle crash that damaged wheel stops and railing; repairs are being inventoried.

Harbor operations manager Nathan Aldridge reviewed the department’s operability and vessel‑impound procedures and cited Santa Barbara Municipal Code Title 14, Section 6550.5(E) as articulating harbor authority to inspect, terminate or remove unseaworthy vessels. Aldridge said officers generally attempt to contact owners before impounding a vessel, but that in safety‑critical situations (e.g., a vessel abandoned in a federal channel) they will act without delay. He described the operability check used by staff: a vessel must be able to maneuver safely under its own power from the harbor to open Pacific waters and back; owners can schedule a short (about 15‑minute) operability demonstration at the courtesy dock with harbor patrol officers.

Public commenter and long‑time harbor resident Charles Lara said the operability standard, as implemented, can feel ambiguous to berth holders; staff and commissioners discussed outreach, the wording of notices and the high rate at which operability issues are resolved after notice is issued.

Commissioners asked for additional line‑item year‑over‑year comparisons in future midyear reports and urged staff to bring options addressing rising insurance and reserve costs into the FY26–27 budget process. Staff said they will include a variance column by expense category in future reports and will continue to evaluate staffing, capital and program priorities as part of the upcoming budget cycle.