We the undersigned agree that the proposed 2% rate increase should be applied equally across all boat sizes, e.g. the current rate structure for 20 to 60' double berths is $5.05/foot/month. We propose that the increase be applied equally to all, resulting in a $5.15/foot/month fee. This has been the policy of the marina in the past and has been fair to all parties.
We do not believe it is justifiable to exempt the 20-26' boats from a rate increase primarily because the cost of providing facilities for 3 x 20 ft. boats exceeds the cost of providing facilities for 1 x 60 ft. boat and 3 x 20' boats cannot fit in 1 x 60' slip.
Comments by Paul Kamen
Berkeley Waterfront Commission
July 28, 1999
It appears that the petitioners may not be aware of the basic reason for the unequal rate increase: to smooth out the progressive rate structure across the full range of berth sizes.
The current berth rates are not constant for all sizes, as implied by the petition. For double-finger berths over 60 feet, the rate jumps from $5.10 to $5.70 per foot per month. This reflects a consensus that berth rates should be at least slightly progressive in nature, to reflect the higher demand for larger berths and the larger area of the marina that they occupy. The Marina's proposal does not increase the rate at either the high end (for double-finger berths) or for the low end, but "fills in the curve" in the mid-range, resulting in a more rational distribution of rates.
The petition also states that the cost of providing three 20' berths is greater than the cost of providing one 60' berth, and that three 20' boats cannot fit in one 60' slip.
Naturally it would be grossly inefficient to attempt to berth 20' boats in a facilities designed for 60' boats. Although, because the width to length ratio of marina slips is essentially constant, nine 20' boats of normal proportions can fit quite comfortably in a single 60' slip. And, if the berthing area is designed for 20' boats, then almost that number can be berthed in the same area with full access to all boats.
The point is that marina berths occupy water area, not length, and if the initial capitalization and continuing maintenance of the marina and supporting infrastructure is considered, the cost of providing a 60' berth is quite a bit more than the cost of providing three 20' berths.
It is certainly true that some operating expenses are fixed costs per berther account. Others vary by length of dock (arguing for a much greater difference than the current 1% between single and double finger). But capitalization, dredging, and a large class of maintenance expenses serve the finite berthing area, and should probably be assigned to each berth on the basis of how much area in the harbor each berth occupies.
We can only guess what results a rigorous cost analysis would yield - certainly it's very unlikely that it would follow any simple relationship to berth length. However, the most rational way to set rates for existing berths is to more-or-less disregard the theoretical cost analysis anyway, and set rates according to the market.
What the market indicates is that demand falls short of supply in the 20' size category, and this is where most of the current vacancies are found (not counting the new F and G docks, which have not had time to stabilize). Demand gradually increases with size, suggesting that a steeper progressive rate structure would be supported. Indeed, the only objective measure of "fair" rates is the vacancy percentage. In theory, the vacancy rates should be low but equal across all size categories and berth types.
There are, of course, certain classes of marina tenants that might deserve subsidy in the form of relief from the market rate. Good examples are non-profits, cooperatives, private clubs with strong public service components, educational organizations, and marine-related businesses that provide valuable services that add value to the marina.
There might also be arguments to be made for keeping the berth rates of other identifiable groups artificially below market rate. Long-term marina berthers, low-income live-aboards, owners of boats in certain size or type categories, or berthers with medical disabilities might qualify. However, there is no policy in place to subsidize any of these groups, and none should be instituted without an open process to determine if that's what the City really wants to do.
Drastic changes in the berth rates might also have demographic implications that should be considered. But In the absence of stated policy to subsidize any particular class of private berther, it is difficult to argue against a purely market-driven approach to setting the berth rates.
If the petitioners believe that a flat rate from 20' to 60' (with a sharp jump for larger sizes) will be more "fair to all parties" than a smooth progressive rate structure, then they need to present some data to justify this position.
The petitioners are invited to present their side of this issue in more detail. Any further explanation of their position is welcome and will be posted here.
For background, here are the current berth rates, and those proposed by the Marina in May 1999:
Berth rates per foot per month, docks A, B, C, J, K, L, M, N, and O, single finger size current proposed % increase 20-26 5.05 5.05 0% 28-32 5.05 5.10 1% 35-52 5.05 5.15 2% 60 5.05 5.25 4% 65-70 5.10 5.50 8% Berth rates per foot per month, docks A, B, C, J, K, L, M, N, and O, double finger size current proposed % increase 20-26 5.10 5.10 0% 28-32 5.10 5.15 1% 35-52 5.10 5.20 2% 60 5.10 5.30 4% 65-70 5.70 5.70 0% Berth rates per foot per month, docks F and G (new docks) Single Finder size proposed 20-26 5.05 28-31 5.10 35-52 5.05 (metered power) 60 5.10 (metered power) 65 and up 5.60 (metered power) Berth rates per foot per month, docks F and G (new docks) Double Finder size proposed 20-26 5.10 28-31 5.15 35-52 5.10 (metered power) 65-70 5.25 (metered power) 90-100 6.00 (metered power) Berth rates per foot per month, docks D, E, H, and I, single finger Size current proposed % increase 32 4.60 4.70 2% (metered power) 36-60 4.80 4.90 2% (metered power)