FALSE SENSE OF FINANCIAL SECURITY

By Sally Campbell

THE STATEMENT THAT "THE DISTRICT IS IN THE BEST FININCAL SHAPE EVER," IS MISLEADING AND FALSE.

SALLY CAMPBELL + Candidate for San Mateo County Harbor District Board of

Trustees + Nov 2, 2004 General Election

The San Mateo County Harbor District majority claims that the Harbor District is in sound fiscal shape. I feel those statements are exaggerated and misleading.

On the surface, the books look good with a $9-million cash reserve. What is not so obvious is the reason for this "surplus." The reason is that for five years the District was exempted from making principle and interest payments on its loan debt of approximately $19-million to its principle creditor, the California Department of Boating and Waterways (DBAW). This temporary reprieve was followed by another grace period, in which the District has been allowed to make interest-only payments, which still amount to nearly $1-million per year.

In 2006, DBAW payments + including principal and interest + are scheduled to resume and continue uninterrupted until the loan is retired in 2018. During the years of zero or partial payments, the interest on the debt kept accruing and it is estimated that with accumulated interest factored in, the $19-million debt is actually closer to $24-million.

Those Board members who contend that SMCHD is in the best financial condition ever, that recently the Board President (during budgetary meetings) was openly exploring the idea of defaulting on the DBAW loan as one possible solution to the District's financial problems. If Boating and Waterways had not agreed to a recollateralization of the District's debt, the SMCHD would be in serious financial trouble, right now.

For several years, I have contended that one of the best ways to guard against financial shortfalls is to bring a major hotel to Oyster Point Marina. Without the income generated from a new, major franchise hotel, the District will have severe difficulty meeting its increased obligations. The District will probably be forced into the position of appearing before DBAW's Board of Directors and asking for yet another loan extension or reprieve.

As your commissioner, I will continue to work double-time to bring a first rate, five-star revenue generating hotel to Oyster Point Marina/Park, and do everything I can to slow-down and stop the wasteful spending.

Sally Campbell