LAKE DON PEDRO -- Houseboat mooring fees will stay as they are, at least for now, leaders agreed Friday after a third meeting filled with owners passionately protesting steep rate hikes.
A three-person Board of Control formally rejected increases ranging from 72 percent to 85 percent over three years as proposed by Forever Resorts, which runs the lake's two marinas. Cheers erupted in a packed visitors center with large windows overlooking the lake 40 miles east of Modesto.
The issue is likely to resurface, however, because the company must recover $2.2 million already spent on improvements and to keep pace with rising costs, spokesmen said.
Matt Harvey, a company executive, said he had no authority to negotiate a lower increase and warned that Forever Resorts could opt to pursue arbitration by a third-party referee.
"I hear you loud and clear. Your message is without a doubt crystal clear to me," Harvey told audience members near the end of three hours of objections. But not increasing the fees isn't acceptable, he said.
The Arizona-based firm operates resort properties around the world. Forever Resorts has a better track record than a previous contract holder, said Michael Frantz, representing the Turlock Irrigation District on the Don Pedro Recreation Agency's Board of Control.
Several houseboat owners disputed that, and even more said the company has shown no evidence that it's losing money or that owners of the lake's 257 houseboats would receive a benefit from paying hundreds of dollars more every month.
"What am I getting for the increase?" asked Phyllis Farenkamm, who relocated from the Bay Area to La Grange for love of the reservoir.
Jeff Ashton, who owns a Dublin business, estimated that Forever Resorts clears profits of more than $1 million each year, though he can't be sure because the company has not opened its books. "That's a pretty substantial return on their investment," he said.
Others said rental spaces for smaller boats resemble a ghost town since the company raised fees. Many owners of fishing and skiing boats simply left an option not attractive for houseboats, which cost many thousands of dollars and special permits to move.
"You guys are a captured audience," agreed Mike Williams, representing San Francisco on the Board of Control.
Steve Vilas, a former TID director and 35-year fan of the lake, noted the difference between public utilities that must link rates to true service costs, in most cases, and private companies such as Forever Resorts, which can siphon one revenue stream when another runs dry.
"I believe they are losing money, but not by the houseboaters," Vilas said to applause and whistling.
Larry Combs of Modesto remembers when monthly mooring fees were $45 dec-ades ago, compared with $400 now at the southern marina, which would inflate to $700 under the proposal. It's Forever Resorts' problem if it can't make enough money after taking over the contract, he said.
Joe Digiovanni of Los Altos Hills said boaters should consider forming an ownership cooperative to "do it ourselves and be divorced from Forever Resorts. (Its proposal) seems to be quite insane."
Jim Smith, who manages the marinas, said the company compared rates with other marinas based on square footage because Don Pedro's houseboat slips are unusually wide and accommodate larger boats than most other lakes. Owners object because the industry standard for comparing is linear feet.
Bart Bartlett of San Jose said houseboat owners might not object to an increase of 2 percent or 3 percent, but 85 percent is obscene. "Government says, 'Oh, we need more money; let's take it from the little people,' " he said. "You guys have got us by the (privates)."
Marcia Eblen said that, by her calculations, the proposal would raise Don Pedro's fees 62 percent over those charged at nearby Lake McClure, whose facilities provide the best comparison among marinas surveyed up and down California. She said Don Pedro's docks are better than McClure's but not 62 percent better.
"Where does it end? We can't keep going with no ceiling," Eblen said.
Board members agreed that future increases should be tied to some type of index, which should help avoid hot debates in the future.
As a gesture of good faith, Walt Ward, a Board of Control member from the Modesto Irrigation District, suggested approving a 5 percent increase while the parties work to develop a rate formula fair to both sides. At another point, Frantz suggested a compromise lower than requested by the company. Both ideas failed to gain traction.
Ward filled in for MID board member Larry Byrd, who would not vote in order to avoid a conflict of interest because he owns a houseboat at the reservoir.
With no consensus, the board was ready to let the issue die. But people in the crowd urged them to reject the marinas' request outright, and Ward and Williams went along with Frantz in voting "no."
Bee staff writer Garth Stapley can be reached at firstname.lastname@example.org or (209) 578-2390.