The term “zero sphere of influence” is a three-decades old label for the Harbor District and, according to Deputy County Counsel Mary Rafferty, is a colloquial definition for an agency that could be dissolved under tenets of the Land Agency Formation Commission.

Maintaining the label, however, doesn’t mean it will be or should be dissolved.

A report on the Harbor District which found the zero sphere and noted taxpayers might be better served by its absorption. The findings, with its negative connotation, caused an uproar among district board members and drew speakers yesterday on both sides of the issue despite a dissolution vote never being on the LAFCo agenda.

The term “zero influence” refers to the localized services provided but is “not a very positive phrase,” said LAFCo Executive Director Martha Poyatos.

The Harbor District operates two facilities, Pillar Point Harbor north of Half Moon Bay in Princeton and Oyster Point Marina/Park in the city of South San Francisco.

An initial LAFCo report found taxpayers would be better served by eliminating the debt-ridden district and letting the county take over its responsibilities.

LAFCo is a state-mandated independent agency overseeing special taxation districts, like the Harbor District, with jurisdiction over boundaries and annexation. The agency reviews proposals for new governments and organizations. State law requires LAFCo to update the sphere of influence of each district.

The sphere of influence refers to the physical boundaries or service areas of a city or district. LAFCo uses these spheres to discourage overlapping services and reducing costs.

The district carries substantial debt and spends $500,000 for its board elections, the report found. By eliminating the district, LAFCo believes property taxes can be used to fund operations at the marinas and harbors rather than paying down debt. As of June 2005, the district had more than $24 million in long-term debt including 19 outstanding loans for construction projects at Oyster Point and Pillar Point. The district also has $12 million in reserves.

An Oct. 8 reply by the district to LAFCo argues its report is unclear about what is best for taxpayers and why.

The district recently restructured its finances to increase revenue, control costs and reduce debt, General Manager Peter Grenell told LAFCo Executive Officer Martha Poyatos. These changes include budgeting an annual principal payment of $1.5 million plus interest annually until the entire $19.5 million loan owed to the State Department of Boating and Waterways is repaid.

Although the district’s fate was not specifically up for a vote, commission members and residents still seized the opportunity to address the possibility.

“The Harbor District is not and should not be a for-profit economic venture,” said Will Holsinger, a former district board candidate.

Half Moon Bay resident Charlie Hall, who said he’s lived across from the harbor for 14 years, suggested setting the sphere term aside and focusing the discussion on the district itself.

“I just think that’s an offensive term,” he said.

Fellow resident Pat Kelly cited the potential million-dollar annual savings as reason to at least look at potential dissolution and acceptance by the county.

District board President Pietro Paravano asked LAFCo to postpone a decision but agency Chair Nadia Holober countered the issue has already been shelved three times.

LAFCo member Sepi Richardson also raised the idea that maybe the district needs change after all, particularly because of its debt.

“In all honesty ... things are not going well,” Richardson said.

LAFCo is not considering dissolving or consolidating the district, said Executive Director Martha Poyatos.

Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102. What do you think of this story? Send a letter to the editor: letters@smdailyjournal.com.