Catalina Island

City Adopts Ordinance to Raise Cruise Ship Wharfage Fees

City - Wharfage fee CruiseShip_IMG_1870

Wharfage fee for cruise ships will increase to $5.50 per passenger over a five year span. Photo by Barbara Crow
Wharfage fee for cruise ships will increase to $5.50 per passenger over a five year span. Photo by Barbara Crow

 

Catalina Island, February 9, 2017 – The City Council passed an ordinance to raise the wharfage fees for cruise ships at its February 7, 2017, meeting. The current wharfage fee, $2.50 and is imposed on 80 percent of the total passengers. This wharfage fee was formulated about 25 years ago. The new wharfage fee will charge the cruise ship for 100 percent of its passengers and will increase the wharfage fee to $5.50 per passenger over a five-year time span.

Effective in 30 days: The City will collect the wharfage fee for 100 percent of the passengers (minus any crew), instead of the current 80 percent, at the current rate of $2.50; and the City will continue, as a marketing incentive, to offer an amount equal to 50 percent of wharfage fees collected from a second ship from the same cruise line who calls upon Avalon 50 times or more a year. This annual marketing incentive will be paid quarterly, in arrears.

The City continues the marketing incentive of discounting the wharfage fees of crusie lines that bring a second ship as it is directly beneficial to the City. Since 2012, cruise ship wharfage fees have almost doubled from $240,000 to $440,000 and during this time Carnival Cruise Lines has been bringing two cruise ships a week to Avalon. However, Carnival Crusie Lines worked with the City and receives a flat fee of $125,000 per year discount, paid quarterly in arrears. Additionally, the increased tourism for local businesses indirectly increases admissions tax and harbor use tax. The incentive is paid in arears to protect the City against cancelations after the incentive is paid.

For the calender year 2014, Carnival Cruise Lines brough 238,835 passengers to Avalon; in 2015 Carnival brought 247,290 passengers to Avalon and in 2016 Carnival brought 243,208 passengers to Avalon.

The wharfage fee will increase for cruise ships, and they will continue to charge for 100 percent of the passengers onboard (minus the crew) as follows: a rate $3.00 per passenger as of July 1, 2017; a rate $3.50 per passenger as of July 1, 2018; a rate $4.00 per passenger as of July 1, 2019; a rate $4.50 per passenger as of July 1, 2020; and a rate $5.50 per passenger as of July 1, 2021.

During the past 12 months the City staff reached out to Carnival Cruises several times for feedback, but received no response. There was a dialog in the past between City Manager Ben Harvey and Interim City Manager Denise Radde, Carnival Cruise’s Leon Sutcliffe, Interim Finance Director Chris Woidzik, Finance Director Robert Mescher, Chamber of Commerce cruise ship liaison David Creigh and Harbor Master Brian Bray beginning as early as April 2015 regarding increasing the wharfage fee charged to all cruise ships visiting Avalon.

The other two ports in California that use tenders to shuttle their cruise ship passengers are Santa Barbara and Monterey. All other ports have a docking facility for the ships to pull alongside to load/unload their passengers, which render comparison less relevant to the City’s ultimate determination. As a result, Santa Barbara and Monterey appeared to be best points of comparison. Santa Barbara charges $5.00 landing fee per person based on the total number of occupants on the visiting ship, including passengers and crew. Besides the Landing fee the cruise ship must pay the lease holder of the dock space where the tenders unload $10,000 each day. Monterey charges $7.00 landing fee per passenger.

Furthermore, the Avalon City Council has identified repairing and rebuilding the Cabrillo Mole, both the under structure and above structure, as an important City Council Goal, and the City plans to begin this above-structure design and work early this year. The Harbor Fund does not have sufficient revenues to pay for normal operation costs and the anticipated harbor facilities upgrades that need to be undertaken to replace, repair and improve harbor facilities. These projects include seawall repairs, pier and float improvements, beach repairs and the mole superstructure rehabilitation. With the increase in revenue from the augmented wharfage fee, the City will be able to begin to off-set the increased costs of Harbor operations that have occurred over the many years since the wharfage rate was last changed. Further, the City will be able to undertake much needed repairs and improvements to the Harbor which will enhance the visitor experience.

The wharfage fee charged to passengers on all cross-channel boats, Catalina Express and Catalina Passenger Service (Flyer), is $2.50 per person each way, arriving and departing Avalon.