By @Kristin Withrow, CSDA Communications Specialist
In the picturesque coastal town of Santa Cruz, where the cool Pacific waters meet the sun-soaked summer shores, the Santa Cruz Port District is facing a fiscal challenge. The cancellation of the commercial and recreational salmon fishing season has sent ripples through this vibrant community, impacting both its local economy and the harbor’s ability to generate crucial revenue. To tackle this issue head-on, the district has turned to California CLASS to help mitigate the financial blow.
Understanding the Salmon Season Closure
According to Harbormaster @Blake Anderson, the salmon season cancellation was primarily due to the prolonged drought in California. Salmon, a vital part of the local ecosystem and economy, rely on healthy river conditions to spawn their offspring. When water levels drop and temperatures rise, the survival rate of young salmon (called fry) diminishes. Drought conditions were particularly severe for several years, leading to lower salmon populations in the ocean and necessitating the closure of the fishing season.
“Salmon spawn high in the tributaries and travel to the ocean where they will stay several years before they are mature enough to return to spawn. These three- or fouryear- old salmon may survive the trip and lay eggs, but their offspring are exposed to predators and disease in the low, warm waters. They really need flowing, cold water to survive,” explained Anderson.
The closure of the salmon season has far-reaching implications for the local economy. Each year, the salmon season typically draws fishermen, tourists, and commercial fleets to the harbor. Recreational and commercial activities see a significant uptick during this period, attracting visitors from all over California and its neighboring states.
Impact on Harbor District’s Revenue
Port Director @Holland MacLaurie highlighted the financial impact of the salmon season closure on the district’s annual budget. “As an independent special district, we don’t receive tax revenues, we rely solely on user fees,” said MacLaurie. Revenue is generated from various activities such as vessel launches, parking fees, boat tie-ups, and the patronage of restaurants and fuel stations. When the salmon season is in full swing, these revenue streams flourish, contributing significantly to the harbor’s finances in the first several months of its fiscal year, which begins in April.
The cancellation of this year’s salmon season has significantly impacted district revenue. As of August, the district reported an operating income decrease of approximately $380,000 for the first five months of the fiscal year compared to the previous year. This translates to a monthly loss of approximately $75,000, a substantial blow to an independent district that receives no tax revenue.
Facing this financial challenge, the Santa Cruz Port District adopted a creative approach to safeguard its financial stability. One of the most significant moves was to explore alternative investment options in response to the changing investment market. California CLASS emerged as a standout choice, offering higher yields than the district’s existing investment options. “Having the support of CSDA and the California League of Cities helps bolster the program’s position and eliminate some of the questions,” said MacLaurie. “Knowing it is backed by reputable sources helped us feel good about making the move.”
California CLASS allows local agencies like the Santa Cruz Port District to explore investment options. With a seamless setup process and lower costs compared to some other investment options, CLASS quickly became an attractive choice for the district.
MacLaurie emphasized the remarkable benefits of this decision, stating that the district is recognizing an additional $50,000 per month in interest income due to CLASS. This additional income helps offset the revenue loss caused by the salmon season closure, making CLASS a valuable resource in mitigating the financial impact.
“Our board is financially savvy, and they understood what our needs were,” said MacLaurie. “When they recognized the potential revenue that could be generated, it was kind of a no brainer. And the setup process was easy, I think it took two days to initiate the account and move funds and start earning that higher interest.”
A Brighter Future for Santa Cruz Harbor
While the salmon season closure has posed significant challenges, the Santa Cruz Port District remains resilient. It is diversifying its portfolio, seeking opportunities in alternative fisheries like rockfish and bluefin tuna. These efforts are mitigating the salmon loss, attracting both recreational and commercial fishermen to the harbor.
The district is optimistic about the future, hopeful that the return of other fisheries will help bridge the financial gap left by the salmon season cancellation. With prudent financial management and innovative investment solutions like California CLASS, the Santa Cruz Port District is maintaining its course toward financial stability, ensuring it remains a vibrant and thriving coastal harbor for the community for years to come.