Avalon City Council authorizes amending code to extend cross channel wharfage increase

City staff will come back to the council with an amended code extending the $1 increase in roundtrip wharfage until council members deem it appropriate to terminate.

AVALON—The Avalon City Council, at their Sept. 15 meeting, authorized city staff to amend the Avalon Municipal Code to extend the sunset date on a $1 roundtrip increase on wharfage.

Once amended, the code will need to come back to the City Council for approval.

The $1 roundup (50-cents one-way) increase in wharfage was approved by the City Council in 2018 to increase revenue and offset capital improvements planned in Avalon Harbor for Fiscal Year 2018-2019. Those improvements included phases 1 and 2 of the Cabrillo Mole Ferry Terminal project, a pump-out station project, emergency repairs to the seawall, the harbor wave and sand sediment study, Green Pier repairs, Casino Way restroom improvements, storm damage repairs, Fuel Dock tenant improvements and various additional projects.

Approximately S2.8 million of the funding needed for these projects was to be derived from grants, while the city was obligated to provide $1.2 million in matching funds for the projects. The proposed $1 roundtrip increase was anticipated to generate $650,000 in revenue annually and offset the city’s obligation for the various grant matches.

The ordinance took effect on March 1, 2019 and has a sunset date of Feb. 28, 2021. The recommended amendment would extend the sunset date of the wharfage increase until deemed appropriate by City Council to terminate.

Through the first year of the increase (March 1, 2019 to Feb. 29, 2020), the city collected about $646,814 in additional wharfage. According to a staff report, the wharfage increase accounted for an additional $88,014 in revenue from March 1 through July 31 – 28.5 percent of collections over the same period last year.

The staff report said the sharp decrease was due to the economic results of the Covid-19 pandemic and the statewide restriction on all non-essential/leisure travel.

City staff projected extending the sunset date may account for an additional $475,000 in revenue, assuming cross channel traffic increases to 70 percent of pre-Covid levels throughout a one-year period.

“This would help offset the over $1 million estimated in lost cross-channel wharfage revenue dedicated to Harbor capital activities,” the staff report stated.

According to the staff report, the extension date will have no impact on Measure H — the measure proposed by the Catalina Island Medical Center to increase wharfage to fund a future hospital facility. If Measure H is approved by Catalina Island voters on Nov. 3, that wharfage increase would take effect on April 1, 2022.

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