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King Harbor Needs a New Structure

King Harbor generates somewhere in excess of $10,000,000 in annual revenue for Redondo Beach. The accuracy of that revenue figure may depend on how you count it or who you ask.

With that much money floating around, claims of mismanagement are about as certain as rising and falling tides. Looking for answers to questions about past errors may prove less productive than asking different questions. Chief among them, can the city of Redondo Beach find a better way to manage the harbor?

Every financial decision about the harbor is currently made by the city council. Hands-on management of the harbor enterprise is handled by the city’s Harbor & Economic Development (HED) department, which consists of a Director, Harbor Facilities Manager and an Executive Secretary. The city manager devotes time to harbor business but it is unclear exactly how much time.

The Harbor Commission consists of seven citizen volunteers who meet once a month. It has almost no decision-making power. A quick scan of past commission agenda will reveal most of its business appears on the consent calendar, which is little more than a list of harbor related business items that the council has already decided and voted on. The commission has no official role in the harbor budget, although in past years the city manager has asked the commission for input on budget issues.

Given that harbor fund reserves fluctuate between low and dangerously low, it’s fair to say most of the money that comes in gets spent on operations and maintenance. For the sake of this discussion, let’s call the annual harbor budget $10,000,000. The administration consists of five part time board level volunteers (the city council) and a professional, administrative staff of three employees. Only one of the three devotes his time exclusively to the harbor, according to their job titles.

It’s impossible to come up with a proper ratio of administrative personnel to annual revenue/expense for any enterprise. But five volunteer board members, a powerless, seven member commission, and an administrative staff consisting of two part-time employees and one full time employee seems a bit light by any applicable standard.

Ryan Clark is director of sales at the Veld Group, an L. A. based business brokerage. He cited examples of $10,000,000 businesses being administered by just a few people and others with directors and officers numbering in the dozens. When asked his opinion about whether an enterprise like King Harbor would be more efficiently run by city employees or some independent management group he said, “You’re kidding right? My ten year old knows the answer to that question.”

Rightly or wrongly, city governments have acquired the reputation of being out of touch with business and inefficient at managing anything. Recognizing those facts could be one reason our neighbor to the north, Ventura Harbor, seems to have much less substantial criticism leveled at the way it manages funds or its overall harbor operation.

The most obvious reason for Ventura’s success is that the city doesn’t run the harbor. The harbor enterprise is an Independent, Special District called the Ventura Port District (VPD). According to the California Special Districts Association, “Special districts are a form of local government created by a local community to meet a specific need.”

The VPD also gets a lot of the structure it uses for its operation from the California Harbor and Navigation Code. Those guidelines also govern some parts of King Harbor’s operations but Ventura appears to take more of its structure from the code.

Ventura has a more clearly defined and robust management team than King Harbor, in large part because of its incorporation as an Independent Special District. The Ventura city council appoints a five member Board of Port Commissioners, which makes all significant VPD decisions including control of an estimated $8 million annual budget.

A full-time, professional management team consists of a General Manager, Harbormaster, Accountant, Administrative Assistant/Clerk, Property Manager, Marina Manager and Marketing Director. General operation of Ventura Harbor is carried out by a full-time staff of 35 employees.

The city council and city staff, including the city manager, have no management authority over the harbor. “Relations with the city stop after the commissioners are appointed,” said VPD General Manager, Oscar Pena.

He added that the city has liaisons within the board and that two current commissioners are former council members. The Board of Port Commissioners makes a formal report to the Ventura City Council once every year.

Ventura has a smaller budget, a powerful board, a lot more management personnel and by all accounts, the whole thing runs much smoother than the South Bay’s only harbor. So why can’t we do the same thing in King Harbor? The simple answer is, we can. The unfortunate reality is, we probably won’t.

Human beings by their very nature do not give up power willingly. So asking the Redondo Beach City Council to give up control of King Harbor would have about the same effect as asking them to stop eating or breathing.

On the other hand, if you asked any current or past council member to imagine a world in which almost none of the council’s time would be spent on harbor related business, you’d probably get a pretty positive reaction. Can logic (or self-interest) triumph over human nature? Let’s hope we get a chance to find out.

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