Long Beach voters on Tuesday passed a city charter amendment that will shift an estimated 20 percent of the Port of Long Beach's annual profits to the control of City Hall.
Measure D passed by a 55.6 percent to 44.4 percent margin. Authored by Long Beach Mayor Bob Foster and Councilmember Gary DeLong, the measure alters the formula for calculating an annual port-to-city transfer from 10 percent of port net income to 5 percent of port net and turns control of all port oil property over to City Hall.
While no analysis was conducted by City Hall before placing the measure on the ballot, an estimate by port financial staff concluded that the measure would transfer an additional $133 million to City Hall over the next five years, or about 20 percent of the port's annual net income.
Under Measure D, the city will receive an added $6.6 million per year due to the transfer formula change – in addition to the estimated $12.4 million the port will already transfer. The port will also see an estimated $20 million a year in port oil revenue head to the City Hall-controlled Tidelands Fund. The port paid roughly $55 million for the mineral rights to the oil property in question back in 1994 and will not be compensated for the loss.
The measure was opposed by nearly the entire Southern California shipping and trade industry. The California State Lands Commission – the state watchdogs overseeing port authorities – was also highly critical of the way the measure was crafted and placed on the ballot with no economic impact study.
“While we are disappointed with the election results this morning, we are pleased that such a large percentage of the voters of Long Beach agreed that Measure D is an ill-fated attempt to further burden the Port and is the wrong way to address City Hall’s budget challenges," said John McLaurin, president of the Pacific Merchant Shipping Association, in a post-election statement. "Thousands of voters joined with the chorus of voices that view Measure D as a deceptive measure that was rushed on to the ballot literally in the dark of night in order to pass.”
The actual ballot tally was 39,135 votes for Measure D and 31,492 opposed. Voter turnout was just over 32 percent.
Measure author Councilmember Gary DeLong told LBReport.com that voters were sending two messages with the passage of Measure D.
"First, while Long Beach residents value the many contributions the Port makes to our local economy, residents also are willing to invest in improving our beaches and coastal area," said DeLong. "Secondly, don’t mess with the City Auditor."
City Auditor Laura Doud, while never conducting an economic impact study of Measure D on the port, concluded that the transfer formula would only result in an additional $1 million to $1.5 million in port revenue heading to the city each year.
The PMSA's McLaurin said his organization and others in the shipping and trade industry would "hold the City to this estimate and fight any transfers of property or money as a consequence of Measure D over and above the amounts that were the basis on which this measure was sold to the voters.”