Court of Appeals hears challenge to DNR rent formula for Boyer Towing mooring lease

At a Division 2 oral argument, attorneys for Boyer Towing asked the Washington Court of Appeals to overturn the Department of Natural Resources’ 2022 rent revaluation for a mooring-buoy lease in Port Madison Bay, arguing the agency used the wrong upland tax parcel and an improper measure of lease area.

Scott Collins, counsel for Boyer Towing, told the panel the contested statute (RCW 79.105.240) requires DNR first to determine an upland value and then to multiply that value by the area of the leased aquatic land. Collins argued the agency selected an upland tax parcel that is assessed and used primarily for residential purposes and therefore is ‘‘inconsistent’’ with the commercial mooring lease; he also said the implementing regulation for mooring buoys limits rent calculations to the area ‘‘occupied by a vessel at any given point in time’’ rather than the full swing circle around a buoy. ‘‘The regulation plainly states that for mooring buoy leases, only that area occupied by a vessel at any given point in time is to be used for calculating rent,’’ Collins said during argument.

The state, represented by Chris Forstrom of the Washington State Department of Natural Resources, urged the court to uphold DNR’s approach. Forstrom said the plain language of RCW 79.105.240 directs use of the full lease area and that Boyer’s proposal would let the lessee pay rent on only 1.64 acres of an 11.54-acre exclusive leasehold. Forstrom argued that result would run afoul of the constitutional prohibition on gifts of public funds and would produce impractical administrative consequences: ‘‘If Boyer were to be allowed to pay rent for only 1.64 acres of that leasehold, it would be a violation of the constitutional prohibition on the gift of public funds,’’ he said.

Forstrom also defended DNR’s selection of the upland parcel used to determine upland value, saying the parcel is waterfront, has upland characteristics and is used ‘‘in conjunction with the leased area’’ (materials are transported via a dock). He challenged Boyer’s proposed alternative parcel as not waterfront and largely protected wetland, and he noted the parcel’s assessed value rose from about $740,000 at lease inception to roughly $1,180,000 in the agency’s 2022 revaluation.

The panel pressed counsel on the administrative record and the scope of the court’s review. One judge asked whether Boyer had raised the inconsistent-assessment issue in agency proceedings; Collins said prior counsel had raised the point in letters to agency decision-makers and that he would supply citations in rebuttal. Counsel debated with the bench how administrative and de novo review principles apply when an issue appears in the administrative record but was not pressed in agency argument.

Collins used reserved rebuttal time to ask the court to reverse DNR’s choice of upland parcel, to affirm the superior court’s reading of the implementing regulation that limits rent to the area a vessel occupies at a given time, and to reverse the superior court on other findings regarding inconsistency and rule validation.

The court did not announce a decision and moved on to the next case. The parties argued questions about statutory interpretation (RCW 79.105.240), the agency’s implementing rules, the selection of an upland parcel for computing aquatic-land rent, and the appropriate remedy if the court finds a conflict between statute and rule.