03/30/1995 - MinutesPUBLIC WORKS DEPARTMENT
30 March 1995
TO: Street Committee
FM: City Engineer,-_i
RE: Committee Ninutes
The Street Committee met for a breakfast meeting at Myhre's
Restaurant on 30 March 1995. Members present were Don Morrison, Bob
Geiger and Chuck Childress. Also present was Larry Curles.
The Committee discussed the proposed landscaping of parking lot #2.
There were three designs under consideration, which are enclosed.
Two committee members preferred Option A which changes the parking
configuration. One member preferred to minimize any impact on the
number of parking stalls and selected Option B. Option C was the
second choice of two members.
During the discussions, the Committee realized that the parking lot
should not be changed or landscaped until the DNR lease issue is
resolved. The DNR staff implied that the rent would be reduced for
landscaping, but not for parking lot islands. Therefore, the DNR
can influence the size and shape of any landscaping project. The
Committee does not want to commit to a design and then discover, at
a later date, the DNR would not credit this against the lease rate.
The Committee discussed the DNR lease negotiations and the lack of
progress in them. (A review of the files indicates that the DNR
staff is awaiting a City response.The DNR letter is enclosed.)
Until the DNR issue is resolved, the Committee cannot make a
decision on landscaping.
cc Council
Clerk
City Attorney
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WASHINGTON STATE DEPARTMENT OF
Natural Re1c�.-*: es
February 9, 1995
The Honorable Leslie J. Weatherill
Mayor of the City of Port Orchard
216 Prospect
Port Orchard, WA 98366
Subject: City of Port Orchard Lease No. 22-002582
Dear Mayor Weatherill:
JENNIFER M, BELCHER
Commissioner of Public Lands
KALEEN COi;;,i HAM
Supervisor
The Department of Natural Resources (DNR) received your letter outlining the City of Port
Orchard's follow-up request for the revaluation of rent fees for Harbor Area Lease
No. 22-002582 on May 31, 1994. Thank you for identifying the city's specific concerns for
DNR to consider in this revaluation process. I have listed the key issues in your May 27,
1994 letter and provide the Department's response and position on each one.
1. You requested DNR to consider your May 27, 1994 letter as the city's request to
begin the procedure pursuant to Chapter 70.94 RCW and WAC 332-30-108 to adjust
the inner harbor line. Your reason for the proposed chance in designation is to allow
the aquatic lands currently leased to the city to be sold to the city by the state as first
class tideland, as the state does not have the statutory authority to sell or exchange
state-owned harbor area. The state does, however, have authority to exchange with
or sell tidelands to public entities. Any sale or exchange would have to be based on
the full fair market value of the property. Should you wish to pursue the Harbor
Area Relocation process, 1 can provide you with the proper application materials.
Please let me know if you want the information. Adjusting the harbor area would
change the designation of the parking lot lease area from harbor. area to first class
tideland. The city's proposal has been reviewed by staff and me. At this time, the
Department cannot support diminishing our aquatic land base and believes that -it's not
in the best interest of the people in the state of Washington to sell any tidelands at this
location.
2. Your letter referred to an agreement between the City of Port Orchard and the Port of
Bremerton that allows the port to use the city's lease area to maintain and operate a
small boat harbor including piers, bank stabilization, utilities, walkways, fencing,
marina restrooms, a maintenance shop, office, and marina parking. The Department
Ill1 %A1Acu1K1r'"rnJ11 Cr r[ ■ -- ter.,, a,,.,....-.,. - ,...... ---
The Honorable Leslie J. Weatherill
Page 2
February 9, 1995
has not approved this sublease agrettzmenE, as required in your lease. The agreement
you have mentioned has no bearing on the city's rent due for its exclusive use of the
harbor area. DNR has no contractual agreement with; the port for the area covered by
Lease No. 22-002582. The city could assign a portion of this harbor area Lease
(No. 22-002582) to the port and allow the port to control some or all of the lease
area. To transfer lease interest to the port or include it in the current Port
Management Agreement with the Port of Bremerton, the city and the port would need
to request amendment to the current Port Management Agreement and the city's lease
with DNR.
Currently, the city leases water -dependent and non water -dependent aquatic lands that
could be managed by the port directly with DNR instead of a sub -agreement or
sublease as appears is currently the case. There is no area currently being leased to
the city that is also a part of a Port Management Agreement with the Port of
Bremerton.
3. I understand the city is mandated to reduce vehicular traffic under the Commute Trip
Reduction Act. You believe that the parking areas used by "foot ferry" commuters
on the city's lease area should be exempt from DNR rent because the ferry reduces
vehicle traffic in the area. My staff has asked Jim Sells, City of Port Orchard
attorney, to elaborate on this point and specifically explain the reasoning that would
allow DNR to provide reduced or free rent as a result of the Act. DNR has been
unable to find an exemption in state laws that allows DNR to charge anything less
than fair market rent for the parking area regardless of the type of vehicle parking. l
believe the city is requesting that DNR assume the cost of providing free parking for
ferry commuters as a result of a law that requires local jurisdictions to reduce traffic
on local roads. The burden to identify the city's reasoning behind the request cannot
be placed on my staff. The Department is still waiting for Mr. Sells' response. If
the Department is able to provide a reduction in rent as a result of the parking area
for commuter ferry, we will need to know what Iaws allow us to provide the rent
reduction..
DNR also needs to know exactly where the parking will be located, how much it will
cost the public (if any), how many stalls are allocated to ferry commuters, how many
square feet the parking occupies, and how it will be reserved for the ferry commuters.
DNR's position is that there is no state law that allows us to provide the city a rent
reduction for this purpose.
The Honorable Leslie J. WeatherilI
Page 3
February 9, 1995
4. You indicated the city intends to.redesigp,the parking lot lease area by landscaping
(and other methods) which will substantially allow increased public access to the area.
Any rent adjustments as provided in WAC 332-30-131(4), as a result of the
reconfiguration would be a function of how much area in the present parking lot is
reconfigured to accommodate reasonable public access to aquatic lands. The
requirements for public use and access (no fee access agreements) are outlined in
WAC 332-30-131(4). The Department considers the waterfront where the public can
enjoy the aquatic environment. Improvements associated with parking, such as
vehicle parking stalls, small landscaped islands in the parking lot, and driveways will
not be considered access to the aquatic land. Only the land and improvements that
provide a tangible use by the public of aquatic lands are acceptable for a no or
reduced fee access agreement.
The Department has already applied no fee public access rental for the walkway and
observation deck as indicated in the last DNR offer contained in Mr. Pruitt's
March 10, 1994 letter. As the .city provides the additional proposed access faci.'ities
to aquatic lands, rent may be adjusted accordingly, as authorized by
WAC 332-30-131(5).
5. The last issue raised by your letter addressed the Department's determination of rent
using a non water -dependent extension appraisal method found in WAC 332-30-125,
to value the lease area used for marina parking. You believe that because
approximately 20 % of the parking stalls in the parking area are used exclusively by
marina users, and the spaces provide access to the water, the marina parking area
should be considered water -dependent. The Department does not consider vehicle
parking a water -dependent use. With this correspondence, I have provided a copy of
a letter to Mr. Terry J. McClusky from Brad Pruitt dated March 10, 1994. In that
letter, Mr. Pruitt correctly expressed DNB's position regarding the classification of
the filled harbor area marina parking lot as a non water -dependent use. Use of the
non water -dependent extension appraisal method by DNR to calculate rent for marina
parking on a filled harbor area is appropriate.
Thank you for providing your concerns. I believe that this correspondence helps you
understand DNB's position on these issues. Rent due for the 3 year period June 3, 1992 to
June 2, 1995 is $118,403.24. Payments may be received in increments during the course of
one (1) year.
The Honorable Leslie J. Weatherill
Page 4
February 9, 1995
1993 Wai(..-dependent Rent
Water -dependent rent formula can be found in RCW 79.90.480 and WAC 332-30-123_ The
Legislative formula for calculating rent is:
A/B x 0.30 x C x 0.07 = annual water -dependent rent where:
A = Assessed upland tax parcel bareland
B = Upland tax parcel area in acres
C = Water -dependent lease area in acres
0.07 = Real rate of return
Tax parcel 4053-013-001-0000
A = 1992 assessed value $13 , 000.00
B = Parcel size 0.04 acres
C = Lease area size 1.06 acres
$13,000/0.04 x 0.30 x 1.06 x 0.07 = $7,234.50 annual water -dependent rent.
1992 - 1993 Non water -dependent Rent
Non water -dependent rent method can be found in RCW 79.90.500 and WAC 332-30-125.
Appraisal method used to determine the fair market value is based on the "extension method"
found in WAC 332-30-125(3)(c).
A/B x C x .10 = annual non water -dependent - dependent rent.
Tax parcel 4053-013-007-0103
A = 1992 assessed value $108,000.00
B = Parcel size 0.57 acre
C = Lease area size 1.70 acres
0.10 use rate percentage
$108,000/.57 x 1.70 x 0.10 = $32,210.53 annual non water -dependent rent
The total June 3, 1992 to June 2, 1993 rent is:
$7,234.50 + $32,210.53 = $39,445.03
The Honorable Leslie J. Weatherill
Page 5
February 9, 1995
1993 - 1994 Water -de endent Rent
$7,234.50 x 1.00170 Producer Price Index (PPI) = $7,246.80
1993 - 1994 Non Water -dependent Rent
$32,210.53 Note: There is no PPI adjustment for non water -dependent rents.
The total June 3, 1993 to June 2, 1994 rent is:
$7,246.80 + $32,210.53 = $39,457.33
1994 = 1995 Water -dependent Rent
$7,246.80 x 1.00601 Producer Price Index = $7,290.35
1994 - 1995,Non water -dependent Rent
$32,210.53 Note: There is no PPI adjustment for non water -dependent rent.
The total June 3, 1994 to June 2, 1995 rent is:
$7,290.35 + $32,210.53 = $39,500.88
The total rent due for the 3 year period June 3, 1992 to June 2, 1995 is:
$39,445.03 + $39,457.33 + $39,500.88
= $118,403.24.
The Honorable Leslie J. Weatherill
Page 6
February 9, 1995
If you have any questions please contact Neal Cox at (360) 9G2 i084.
Sinc ly,
Craig E. P 'dge, Division Manager
Aquatic Re ounces Division
PO Box 47027
Olympia, WA 98504-7027
Enclosures
c: Stan Biles
Joel Greene
Dan Barth
Brad Pruitt
Neal Cox
Patricia Parks
James K. Sells
Cindy Wood
Reference Code: 22.002582
ww9l22002582.Itr