ITEM 6

Part A

MINUTE OF THE DECISION REACHED BY THE RIVER HAMBLE HABOUR BOARD ON 21 OCTOBER 2005 - ALTERNATIVES TO THE SUPERVISION CHARGE

The Board considered the report of the Director of Environment (item 6 in the Minute Book) setting out two proposed alternatives to Supervision Charges. Both options had been widely consulted upon, although the responses had been conflicting. Mr Moody and Dr Tomson declared interests in this item as a member of the River Hamble Boatyard Marine Operators Association and a mid stream mooring holder respectively.

An overview of the legal status regarding the charging of Harbour Dues and Charges was received, including the provisions of Section 26 (2) of the Harbour Act 1964 and Section 1.6.1 of the Port Marine Safety Code. Specific attention was paid to the right of appeal to the Secretary of State in the case of Harbour Dues, the exact nature and cost of which therefore needed to be clearly defined.

It was reported that the River Hamble Harbour Management Committee had been of the view that the situation regarding Supervision Charges should remain unaltered. The board however highlighted the following concerns regarding the status quo being maintained;

a) There was very strong feeling among many river users that the Supervision Charge was not justified and none payment of the Charge was an increasing possibility.

b) It was unreasonable to keep the Charge without defining what it was used for (this view was supported by the Management Committee). However it may not be possible to produce such a definition as services provided by the Charge were inextricably linked to other duties carried out by the Harbour Master under the Port Marine Safety Code. For example, the Code required the Harbour Authority to undertake routine patrols of the River, it was during these patrols that much of the supervision was undertaken and the appropriate actions taken where necessary.

c) If the Charge was to be defined then the Harbour Authority would have to ensure that those services were available, otherwise it would be open to legal challenge.

d) The Harbour Authority provided services of a supervisory nature, for example towing stranded vessels, to all river users not just mid stream mooring holders.

e) Questions were raised as to whether the £98,000 received through the Supervision Charge was exclusively used for `supervision', if not then it would be difficult to justify.

In addition to the two alternatives outlined in the report two further options were identified. The first would be to abolish the Charge, leaving the Harbour Authority with a £98,000 deficit per year. This money could be found from increasing Harbour Dues and from anticipated additional funding streams. However it was agreed that this would result in a depletion of reserves meaning that long term replacement/maintenance schemes could not be implemented. This option was therefore felt to be impractical. The second additional option was to levy the Supervision Charge against the mooring owners (i.e. the Crown Estate), as was the case at a number of other harbours. Officers had previously investigated this option but it had been rejected by the Crown Estate.

There was a general consensus that change was necessary and that the Supervision Charge should be subsumed into the current Harbour Dues. A financial discount, in the region of 46 percent, would then be made available to marina berth holders in light of the fewer services provided to them and the lower administrative costs which they incur. Under this scheme each user would be paying the same as under the current arrangements. The key concern however, was that it would create two levels of Harbour Due and the approximate differential of 46 percent was considered excessive for the additional services provided. The Board therefore agreed to ask the River Hamble Harbour Management Committee to consider whether the differential was acceptable, and if not what steps the Board should take to alter it.

RESOLVED:

a) That, as of January 2007, Supervision Charges be subsumed into Harbour Dues, with marina berth holders receiving approximately a 46 percent discount on their dues (as described in paragraph 6.0 (i) of the report).

b) That the River Hamble Harbour Management Committee be requested to consider the levels of discount offered to Marina Berth Holders under a two tier system of Harbour Dues, and make recommendations back to the board.

Part B

MINUTE OF THE RIVER HAMBLE HARBOUR MANAGEMENT COMMITTEE ON 10 OCTOBER RELATING TO ALTERNATIVES TO THE SUPERVISION CHARGE

The Committee considered the report of the Director of Environment (item 6 in the Minute Book) setting out two proposed alternatives to supervision charges. Both options had been widely consulted upon, although the responses had been conflicting. Mr Alexander, Councillor Mrs Bailey and Councillor Woodward, as mooring holders and Mr Saint, as a marine operator on the river, declared an interest in this item.

There was a general consensus that there should be no change to the status quo, and that Supervision Charges should continue to be collected in their present form. However it was highlighted that for this to happen mid stream mooring holders should be informed of exactly what the charge was for. Officers reported that it may not be possible to produce this information as services provided by the charge were inextricably linked to other duties carried out by the Harbour Master under the Port Marine Safety Code. For example, the Code required the Harbour Authority to undertake routine patrols of the River, it was during these patrols that much of the supervision was undertaken and the appropriate actions taken where necessary. It was feared that should either of the proposed alternatives be implemented then it would lead to marina berth-holders contributing to the costs of services provided exclusively for the benefit of mid stream moorings.

RESOLVED:

That the River Hamble Harbour Board be recommended to maintain supervision charges in their present format.

Part C

Contact: David Evans, tel 01489 576387 email: [email protected]

1. Summary

1.1 At present, all mid-stream mooring holders on the River Hamble pay a Supervision Charge, to cover the additional administrative and operational cost to the Harbour Authority of boats on mid-stream moorings. The Supervision Charge is contentious so this report sets out two alternative proposals for consideration by the River Hamble Harbour Board and Harbour Management Committee.

2. Corporate Strategy

2.1 This report supports Aim 5 of the Corporate Strategy (Improving Services) by proposing alternatives to a charge which is seen by many as inappropriate.

3. Introduction

3.1 The River Hamble Harbour Authority levies charges on all vessels moored in the River to cover the cost of providing navigation marks and lights, assuring compliance with the Port Marine Safety Code (by operating a safe and efficient port) and ensuring that its environmental responsibilities are met. These charges currently take the form of Harbour Dues and Supervision Charges. Whilst Harbour Dues are levied on all vessels kept afloat on the River, Supervision Charges are only levied on boats moored on mid-stream moorings. The rate of Supervision Charges for 2005 is £8.84 per metre, increasing to £9.20 per metre in 2006. It raises about £98,000 per annum for the Harbour Authority. Unfortunately, the Supervision Charge has been the subject of some confusion and criticism because it is not immediately apparent what it is for. In reality, the charge reflects the additional costs to the Harbour Authority of providing a more individual level of service and a significantly higher level of monitoring (of moorings, boats and pontoons) to occupants of mid-stream moorings than marina berth-holders. There is, nonetheless, pressure to abolish the Supervision Charge, despite the fact that the income which it generates is vital and must be replaced even if the charge is abolished.

4. Aim

4.1 The aim of this report is to set out some options for the replacement of the Supervision Charge, for the consideration of the Harbour Board and Harbour Management Committee.

5. Assumptions

5.1 It is assumed that:

(i) the income to the Harbour Authority provided by the Supervision Charge must be maintained;

(ii) the owners of all vessels moored on the River pay Harbour Dues because they make use of the facilities of the Harbour (navigational aids, patrols, jetties for pick-up and drop-off, scrubbing piles, safety measures, oil spill response, environmental protection, fresh water, sewage pump-out, etc) in equal measure; and

(iii) services such as towing vessels with emergencies (eg mechanical breakdown), assisting grounded vessels, providing berths for vessels with emergencies on Warsash and Hamble jetties, etc (all free of charge) will continue to be provided to all users of the River, regardless of where they are berthed.

6. Proposals

6.1 Two proposals for replacing the Supervision Charge are:

(i) The Supervision Charge should be subsumed into Harbour Dues with effect from January 2007, such that Harbour Dues would be payable with a discount in place to reflect the reduced costs of servicing those within marinas. The financial burden for mid-stream mooring holders and marina berth-holders would be unchanged from the current position This would be an interim solution, pending a comprehensive analysis of the costs associated with the provision of the various services of the Harbour Authority to come into force January 2008. As shown in the table below, this would mean that marina berth-holders would pay Harbour Dues at a 46% discount compared to mid-stream mooring holders (eg £118.58 for a typical 11 metre vessel in a marina berth, compared to £219.78 for the same size vessel on a mid-stream commercial mooring). This discount rises to 52% when compared with the same sized vessel on a Crown Estate mid-stream mooring. Analysis of the Harbour Authority costs might show that a discount of this size is inappropriate, in which case incremental changes can be made to more accurately apportion costs over a period of time.

(ii) The Supervision Charge should be subsumed into Harbour Dues, as above, whilst at the same time acknowledging that the scale of the discount to marina berth-holders, at 46% or more, would be excessive. Doing so would allow the first incremental step towards correcting the situation to be introduced earlier. It would be possible and affordable to increase the current rates of Harbour Dues by RPI + 5% across the board whilst applying a 20% reduction in the Supervision Charge element. This rate of change could be repeated annually until the correct differential is achieved (from the analysis of services described above). It is worthy of note that a 5% increase in Harbour Dues would amount to an additional 54p per metre for a typical marina berth holder each year. This would be the equivalent of a 0.1% rise in the average annual marina bill.

Table showing charges for a typical 11 metre vessel (based on 2006 charges)

(excluding VAT)

Notes

1. Fixed charge for vessels in a 9.8 metre to 12.2 metre band, based on a 12.2 metre boat.

2. These figures are for 2006. The 5% increase in Harbour Dues for marina berthholders does not include any RPI increase which will be applied to 2007 charges.

7. Consultation

7.1 The Marine Director has consulted informally with the Boatyard and Marina Operators' Association and the River Hamble Mooring Holders' Association on this issue. Wider and more formal consultation may be advisable before deciding on the most appropriate option.

8. Impact Assessments

8.1 At present, Supervision Charges are payable at the same rate per metre by everyone who moors a vessel on a mid-stream mooring in the River Hamble. There is no special provision for those on limited incomes. It is proposed that this arrangement should continue, regardless of which of the above alternatives in chosen.

Recommendation

That the River Hamble Harbour Board decide its preferred option, taking into account the views of the River Hamble Harbour Management Committee.

455A/DE