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HomeMy WebLinkAbout04/23/2002 - Regular MeetingCITY OF NEWPORT BEACH City Council Minutes Regular Meeting April 23, 2002 - 7:00 p.m. — 4:10 p.m. CLOSED SESSION — 6:00 p.m. * * * * * * * ** * * * * * * * * ** A. RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING B. ROLL CALL Present: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Absent: None C. CLOSED SESSION REPORT — None. D. PLEDGE OF ALLEGIANCE — Council Member O'Neil. E. INVOCATION — Chief Chaplain George B. Vogel, VA Medical Center of Long Beach. F. Dog Partners Presentation. Lyn Sheedy, Executive Director of Dog Partners, stated that Dog Partners is a non -profit charitable organization in Orange County. She introduced "Robert", a specially bred service dog who knows nearly 80 commands, and asked Mayor Ridgeway to assist in the presentation. After Mayor Ridgeway took his place in a wheelchair, Ms. Sheedy demonstrated the many ways that a service dog can assist a handicapped person. Ms. Sheedy stated that a service dog can reduce the need for an aide in the home and noted that there are 10,000 wheelchair - bound people in Orange County. She further noted that Dog Partners is the only organization in Orange County that is training and placing service dogs, and that it takes nearly two years and $20,000 to get a service dog to placement. She asked for the City's assistance with their program. Mayor Ridgeway suggested that Ms. Sheedy provide the City with additional information. Mariners Joint Use Library — Fundraising Committee Presentation. Harry Hamilton, Board of Library Trustees member, introduced Karen Clark, another member of the Board of Library Trustees, and thanked the City Council for supporting the Mariners Joint Use Library project. Mr. Hamilton stated that the City has the opportunity to receive grant funds from the State to build a new facility that will serve the children of Mariners School and the public. He introduced Theresa Chase and Chris Wilkinson, co- chairs of the Volume 55 - Page 125 INDEX Dog Partners Presentation (33) Mariners Joint Use Library (50) City of Newport Beach City Council Minutes April 23, 2002 Build a Mariners Library Fund Committee, who are spearheading the effort to raise $1 million by the first of June, 2002. Ms. Chase stated that the committee is pleased to have Marian Bergeson as Honorary Chair, and additionally acknowledged Community Services Director Mentz and her staff. Ms. Chase stated that the campaign got off to a good start with a $100,000 joint contribution from the Board of Library Trustees and the Newport Beach Public Library Foundation. She noted the many efforts that have taken place since. She stated that they are trying to get the word out in anyway they can and are finding tremendous support throughout the community for the project. Ms. Chase stated that $250,000 has been raised to date. She stated that the efforts will continue, and she encouraged others to participate and make a donation. Ms. Chase noted that the City's library system is highly regarded and something everyone can be proud of. She reported that the application to receive the grant from the State is due in Sacramento on June 14, 2002. Mayor Ridgeway stated that the City must show verifiable funds in the amount of $1 million in order for the State to provide a matching grant in the amount of $2 million. Ms. Chase provided a brief PowerPoint presentation showing the highlights of the project. Mayor Ridgeway complimented the efforts of the committee. Relay For Life Presentation by Peggy Fort. Peggy Fort, volunteer on the Newport Beach Relay for Life Committee, encouraged community participation in the first annual Newport Beach Relay for Life on behalf of the American Cancer Society. She stated that the event will take place on May 17 and 18, 2002, at Newport Harbor High School, and is a 24 -hour team walking event to raise funds and awareness on behalf of cancer. Ms. Fort stated that teams of 5 to 25 people will have someone continually walking around the stadium during the event. She added that there will be a party atmosphere, and that the courageous spirit of those battling cancer will also be honored. Ms. Fort stated that the 3,000 annual Relay for Life events comprise the largest not - for - profit fundraising event in the world, and that there are twelve relays in Orange County alone. Ms. Fort stated that the ways individuals can become involved include forming a team, joining a team, purchasing a luminary, or becoming a sponsor or a volunteer. She reported that Relay for Life events raised $11 million in California in 2001 and over $200 million, worldwide. She acknowledged City Manager Bludau and Pat Smith as the Newport Beach event co- chairs, and Paul Salata, Mayor Pro Tern Bromberg and Judy Franco as Honorary Cancer Survivors. Cable Focus Group Announcement. Mayor Ridgeway announced that a series of seven focus group workshops dealing with cable communication systems would be taking place during the week of May 20, 2002. He stated that the sessions are designed to provide the public with a better understanding of how the community can use cable communication systems for coverage of local events. The cable franchise agreements with Cox and Adelphia are up for renewal and the City is seizing the opportunity to ask for the enhanced services. Volume 55 - Page 126 INDEX Relay for Life Presentation (33) City of Newport Beach City Council Minutes April 23, 2002 Additionally, Mayor Ridgeway stated that it's a difficult time, but Relay for Life and Mariners Library are both worthy charitable events. Newport Beach Tourism Week Proclamation. Mayor Ridgeway presented a proclamation recognizing Newport Beach Tourism Week May 4 -12, 2002, to John Cassady, Executive Director of the Conference & Visitors Bureau. Mr. Cassady stated that it was an honor and a pleasure to accept the proclamation on behalf of the hospitality and retail stakeholders involved with tourism. He additionally thanked the visitors who contribute to the economic fabric of the City. He pledged the bureau's commitment to continue to strive for excellence in marketing Newport Beach as a destination. G. NOTICE TO THE PUBLIC H. CITY COUNCIL ANNOUNCEMENTS OR MATTERS WHICH COUNCIL MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION. ACTION OR REPORT (NON- DISCUSSION ITEM): • Council Member Heffernan complimented the City Clerk for obtaining a new land use designation map for display in the Council Chambers. • Mayor Pro Tem Bromberg announced that the Balboa Island Art Walk would be taking place on May 11, 2002, at 9:00 a.m. He stated that over 100 artists would be participating and that the event would be taking place on South Bay Front. Mayor Ridgeway stated that members of the public are being encouraged to provide their e-mail addresses to the City. He explained that this would allow the City to provide more information while, at the same time, reducing the use of paper. He stated that the addresses can either be mailed to the City on postcards that have been created or they can be e- mailed to mviackson(i citv.newnort- beach.ca.us. I. CONSENT CALENDAR READING OF MINUTES/ORDINANCES AND RESOLUTIONS 1. Item removed from the Consent Calendar by a member of the audience. 2. READING OF ORDINANCES AND RESOLUTIONS. Waive reading in full of all ordinances and resolutions under consideration, and direct City Clerk to read by title only. ORDINANCE FOR ADOPTION 3. PROPOSED AMENDMENTS TO MUNICIPAL CODE ORDINANCE 2.20: EMERGENCY SERVICES ORDINANCE. Adopt Ordinance No. 2002 -8. Volume 55 - Page 127 INDEX Tourism Week Presentation (33) Ord 2002 -8 Emergency Services (41) City of Newport Beach City Council Minutes April 23, 2002 RESOLUTION FOR ADOPTION 4. RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO PERS CONTRACT TO PROVIDE FOURTH LEVEL OF' 1959 SURVIVOR BENEFITS TO MISCELLANEOUS EMPLOYEES. 1) Adopt Resolution No. 2002 -32, a Resolution of Intention to approve an Amendment to Contract Between the Board of Administration, California Public Employees' Retirement System and the City Council of the City of Newport Beach; 2) introduce Ordinance No. 2002 -9, an Ordinance of the City Council authorizing an Amendment to the Contract Between the City Council of the City of Newport Beach and the Board of Administration of the California Public Employees' Retirement System, and pass to second reading on May 14, 2002; and 3) approve initial payment method that preserves the City's assets in the program. CONTRACTS AND AGREEMENTS 5. COOPERATIVE AGREEMENT BETWEEN THE CITY OF IRVINE AND THE CITY OF NEWPORT BEACH FOR THE INSTALLATION OF MEDIAN LANDSCAPING ON JAMBOREE ROAD BETWEEN CAMPUS DRIVE AND BRISTOL STREET (contd. from 4/9/02). Continue to May 14, 2002. 6. BALBOA LIBRARY ELECTRICAL MODIFICATIONS AND AIR CONDITIONING (C -3337) — COMPLETION AND ACCEPTANCE. 1) Accept the work; 2) authorize the City Clerk to file a Notice of Completion; 3) authorize the City Clerk to release the Labor and Materials bond 35 days after the Notice of Completion has been recorded in accordance with applicable portions of the Civil Code; and 4) release the Faithful Performance Bond one (1) year after Council acceptance. 7. UNDERGROUND UTILITIES IN WEST NEWPORT (PROPOSED UNDERGROUND ASSESSMENT DISTRICT NO. 69). 1) Approve a Professional Services Agreement in an amount not to exceed $48,200 for Assessment District No. 69 with the firm of Harris and Associates of Irvine to provide assessment engineering services for proposed Assessment District No. 69 and authorize the Mayor and the City Clerk to execute the Agreement; and 2) authorize a budget amendment (BA -039) in the amount of $25,113 to Account No. 7401- C5100212 from unappropriated balance of General Fund Reserves. 8. ENCROACHMENT AGREEMENT FOR CONSTRUCTION AND MAINTENANCE OF PRIVATE IMPROVEMENTS WITHIN THE OCEAN BOULEVARD PUBLIC RIGHT -OF -WAY ADJACENT TO 3631 OCEAN BOULEVARD, CORONA DEL MAR (N2002- 0034). Approve the application subject to: 1) execution of an Encroachment Agreement for non - standard improvements; a) authorize the Mayor and the City Clerk to execute the Agreement; b) authorize the direct the City Clerk to have the Agreement recorded with the Orange County Recorder; 2) an Encroachment Permit issued by the Public Works Department, and 3) a Building Permit issued by the Building Volume 55 - Page 128 .D�• Res 2002 -32 Ord 2002 -9 PERS Fourth Level Survivor Benefits (C -563) (38) [No report] C -3337 Balboa Library Electrical Modifications & Air Conditioning (38) BA -039 C -3526 Assessment District No. 69 West Newport Engineering Services (38/40/89) EPN2002 -034 Encroachment Agreement 3631 Ocean Blvd (65) City of Newport Beach City Council Minutes April 23, 2002 Department. MISCELLANEOUS ACTIONS 9. DEPARTMENT OF CONSERVATION GRANT FUNDING REQUEST. Approve the submittal of a grant request to the Department of Conservation Recycling Division in the amount of $40,840 and reconfirm the designation of the General Services Director as the City representative. 10. CANARY ISLAND DATE PALM STREET TREES LOCATED ON MARGUERITE AVENUE. Approve replacing trees that succumb to the palm disease with 36" box King Palms at a cost of $900 per tree. 11. Item removed from the Consent Calendar by Council Member Heffernan. S16. APPOINTMENT TO GENERAL PLAN ADVISORY COMMITTEE. Appoint Don Krotee to at -large vacancy. Motion by Mayor Pro Tem. Bromberg to approve the Consent Calendar, except for those items removed (1 and 11). The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None J. ITEMS REMOVED FROM THE CONSENT CALENDAR 1. MINUTES OF THE ADJOURNED REGULAR AND REGULAR MEETING OF APRIL 9, 2002. Jim Hildreth, Newport Beach, referred to volume 55, page 111 of the April 9, 2002, regular meeting minutes, and stated that there are some discrepancies between what he said at the meeting and what was recorded in the minutes. He requested that the audiotape of the meeting be reviewed. Mr. Hildreth stated that the ladder was never intended to be used by the Hildreth family. Additionally, he referred to volume 55, page 112 and stated that since the City's liability insurance does not include his use of the ladder, the ladder couldn't have been designed for him. The minutes need to correctly state what he said at the meeting. Motion by Council Member O'Neil to waive reading of subject minutes, approve as written and order filed. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Volume 55 - Page 129 INDEX Department of Conservation Recycling Division Grant Request (44) Street Trees Marguerite Avenue (62) General Plan Advisory Comm. (24) City of Newport Beach City Council Minutes April 23, 2002 Ridgeway Noes: None Abstain: None Absent: None Mayor Ridgeway added that the City Council is very respectful of due process and freedom of speech, and that he has received some complaints about the previous speaker, but noted that the City Council has to endure the situation. 11. TASKS AND INITIAL PROJECTS FOR THE NEWPORT BEACH HARBOR COMMISSION. Russell Niewiarowski, President of The New Millennium Group, proposed that the Harbor Commission be directed to consider a vision for Costa Mesa Beach. He stated that this would create a project that would benefit the cities of Costa Mesa and Newport Beach. He explained that it would allow Costa Mesa to have access to coastal waters and would bring more tourism to the area. He stated that it would also benefit the annexation issue because it would allow Costa Mesa to exchange property in the Santa Ana Heights area for the beachfront property. He asked the City Council to consider the project. Council Member Heffernan stated that the issue regarding pier permit fees, which was brought up at previous City Council meetings, would be referred to the Harbor Commission. He stated that there is the potential for a conflict of interest, but that this issue will be dealt with at the new commission's first meeting. Motion by Council Member Glover to direct the Harbor Commission to attend to the tasks identified in the staff report; and to direct staff to add South Coast Shipyard to the list of issues and to include wording in an ordinance for consideration that clarifies the appeal process. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None K. PUBLIC COMMENTS Jim Hildreth stated that he received a letter from State Senator Ross Johnson, which addresses the issue of government agencies that refuse to provide public documents. He stated that he also received a letter from Mr. McCaffrey, which discusses the City's revenue enhancement and attacks on what a person has a right to have on their docks. Mr. Hildreth stated that the City has lied, but has never retracted their statements. He presented letters to City Manager Bludau and Fire Chief Riley regarding the reinstatement of RP801- 00011. He stated Volume 55 - Page 130 ON-13-DON Harbor Commission Tasks & Projects (24) City of Newport Beach City Council Minutes April 23, 2002 INDEX that if the documents he has requested cannot be found, then actions are unfounded. Russell Niewiarowski, President of The New Millennium Group, stated that The New Millennium Group is the sponsor of the Reasonable Airport Park and Nature Preserve initiative for securing an airport at El Toro. He stated that momentum and supporters have increased and they are hopeful that the initiative will be on the ballot in November 2002. He encouraged the City Council and the residents of Newport Beach to support the initiative. Mr. Niewiarowski stated that securing a reasonable airport at El Toro is still possible. He noted that the complete initiative text can be viewed at www.ocxeltoro.com. Cordell Fisher, 95 Old Course Drive, stated that he appeared before the City Council nine months ago regarding the use of poplar wood outdoors, which decays in coastal environments. He stated that the use of poplar wood outdoors is now a code violation and that the Newport Beach Building Department required Pacific Bay Homes to retrofit numerous homes at One Ford Road. Mr. Fisher stated that he has learned that that the cedar sidings used at One Ford Road have been painted with a transparent oil stain, which is food for mold to grow, according to the United Stated Department of Agriculture. Mr. Fisher presented several photos showing various homes that have been affected by the mold. He requested that the City investigate the use of the oil stain and urged the development of a new code. In conclusion, Mr. Fisher read from a letter received earlier in the day by the Building Department. David Wesdell, One Ford Road, stated that his past experience with One Ford Road and Pacific Bay Homes has been positive, but that the destructive mold that is growing on his home is an issue that has not been resolved. He stated that approximately 80 homes in the neighborhood are affected, and he presented several photos illustrating the problem. Mr. Wesdell stated that Pacific Bay Homes has refused to take any corrective action, blaming the problem on lack of homeowner maintenance. He stated that every professional he has talked to has assured him that the condition of the homes is not normal, and his research has indicated that the problem is the result of the use of a linseed oil based stain. Mr. Wesdell added that the shingle manufacturer strongly recommends the use of a semi - transparent acrylic stain. Mr. Wesdell concluded by stating that he doesn't know what the health ramifications might be. Council Member Proctor stated that the normal remedy for such a situation would be a construction defect lawsuit and asked why this wasn't being pursued. Mr. Wesdell stated that it is being looked at as an option, but that Pacific Bay Homes has not been helpful on this issue and he's just looking for help. Council Member Proctor stated that this is what the courts are for. Mayor Pro Tem Bromberg stated that no one has all the answers at this point regarding the issue, but feels that a determination will ultimately need to be made. He suggested that the Building Department respond Volume 55 - Page 131 City of Newport Beach City Council Minutes April 23, 2002 to the complaints. Mayor Ridgeway stated that this isn't a Building Department issue and the residents could still do several things. He specifically suggested that they hire a scientist and a lawyer. L. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES Council Member Heffernan reported that the Ad Hoc Telecommunications Committee held a joint session with the City Council earlier in the day at the Study Session to review the work on public right -of -way issues and cell sites. He stated that due to the third generation of phones that are expected to be available by the end of the calendar year, the City is trying to develop a policy. Council Member Heffernan stated that this is an area of federal preemption, meaning that there is a limited degree of local oversight that is permitted. He noted that the City can be involved in issues related to cell phone interference in regard to fire and police communications. Council Member Glover stated that the John Wayne Airport (JWA) Settlement Extension Ad Hoc Committee is moving forward and expects to have the agreement signed by the end of June. She acknowledged the other two committee members, Council Members O'Neil and Proctor, City Attorney Burnham and City Manager Bludau for their efforts. She noted that a special signing is being planned for June 28, 2002, at 4:00 p.m., at City Hall. Council Member Adams announced that the General Plan Update Committee did not meet during the current week, but is expected to meet on May 13, 2002. Council Member Proctor stated that the Navy announced, earlier in the day, that they would be meeting with the City of Irvine regarding the sale of the land at the El Toro site. He stated that this makes the extension of the settlement agreement even more important. M. PLANNING COMMISSION AGENDA AND ORAL STATUS REPORT 12. PLANNING COMMISSION AGENDA FOR APRIL 18, 2002. Planning Director Temple stated that the Planning Commission had three items on their agenda of April 18, 2002. She noted that the item regarding the Newport Harbor Shipyard was continued to May 9, 2002. Planning Director Temple stated that the Planning Commission did review an item regarding a staff referral of a determination of substantial compliance for a variance approved by the Commission earlier in the year. She reported that subsequent to the approval of the variance, the adjoining property owner decided that she had no interest in recording the easement which necessitated a redesign of the garage area for the proposed duplex. Planning Director Temple stated that the redesign was found not to be in substantial compliance with the approved plan. She stated that the owner could either try to solicit the cooperation of his neighbor or he could file for an amended variance. Volume 55 - Page 132 INDEX Planning Commission (68) City of Newport Beach City Council Minutes April 23, 2002 INDEX N. Planning Director Temple stated that the other item under consideration by the Planning Commission involved the Hyatt Newporter and their request to have their annual jazz series become a part of their use permit. She stated that the Planning Commission approved the request. 13. BALBOA THEATER REHABILITATION PROJECT. Assistant City Manager Wood stated that the City Council considered this item at their Study Session on February 26, 2002. She stated that the issue is whether the City should participate further in the Balboa Theater Project by acquiring the building next door, 111 Main Street. She stated that at that meeting, the City Council requested an updated and a more complete business plan from the Theater Foundation, as well as answers to some of their questions. Assistant City Manager Wood stated that the foundation has provided a business plan and responded to the questions of the City Council. She noted that a good part of the business plan covers the City's investment in the project and the remaining value of the buildings if the theater is not a success, which is approximately $2 million and $2.8 million, respectively. Assistant City Manager Wood stated that this would be a major investment for the City to make, but a difficult decision since it's an important project to Balboa Village. Council Member Heffernan asked what staffs recommendation is and Assistant City Manager Wood stated that staffs position is neutral regarding the issue. Council Member Adams stated that the largest issue for him is the fact that the report did not address when and how the capital would be raised for building the project. He stated that he'd also like to hear what the plans are for raising the initial $1.7 million and the $2.85 million for the next phase of construction. He stated that the City remains exposed until the building can be sold as a viable commercial building. Council Member Adams stated that the City needs to take a very careful look at the investment from a financial point of view. He stated that this makes the timing issue important. Council Member Adams added that the plan indicated that there are three phases, with the retrofit of 111 Main Street to divide it into two units as a part of the third phase. He stated that he'd rather the division took place during the first phase, so that the City would have the opportunity to sell it and reduce the amount of money tied up in the project sooner. Council Member Adams also asked that milestones be established for the first and second phases, and that a reevaluation of the project be done by the City Council if any of the milestones are not met. Council Member Glover stated that she felt that she would be Volume 55 - Page 133 C -3248 Balboa Theater Rehabilitation Project (38) City of Newport Beach City Council Minutes April 23, 2002 � 3. supportive of the investment because she understood that the City had $900,000 available. She had heard differently earlier in the day. She asked where the money would come from to make the purchase. City Manager Bludau stated that there is approximately $2 million in the reserve fund in excess of what is required by Council policy. Council Member Glover asked what else might make demands of the fund. City Manager Bludau stated that there are three park sites that have been discussed, some potential capital improvement projects and water quality issues that may also need to be funded. Council Member Heffernan recalled that the issue of the reserves being too low was discussed at a retreat of the City Council. He asked if a reversal had occurred. City Manager Bludau stated that he was only speaking of one reserve. He stated that many of the other reserve accounts are not fully funded. Council Member Heffernan asked how much the City is self- insured for. City Manager Bludau stated that it's either $500,000 or $1 million. Dayna Pettit, President of the Balboa Performing Arts Theater Foundation, stated that they are proud of their effort to create a comprehensive business plan for the theater. She stated that they are asking the City Council to approve the purchase of the building at 111 Main Street. She stated that this site will supplement the theater and replace the planned basement at a savings of over $1 million. She announced that they currently have $1.2 million in their bank account. She stated that they've been off course for over 1 -% years, but that they're renewing their energy levels and are planning to raise $1 million in the next six months to one year. Ms. Pettit named many of the people that would be speaking at the current meeting and acknowledged the efforts of everyone involved. She stated that many of the people involved have histories of long working partnerships with the City and have dedicated themselves to making the theater happen. She stated that the City Council has their commitment to get the theater in proper form as a commodity for the community that can offer live theater and movies, and be a great community resource. She stated that it could be the catalyst that brings success to the Balboa area. Ron Baers, a founding board member, thanked the City Council for their support in revitalizing Balboa Village. He stated that saving the theater started as a simple idea, but it was soon realized that the goal and their vision must embrace the desires and needs of all of Balboa Village. He stated that they expect the theater to be an anchor tenant, along with the Balboa Pavilion, the Balboa Inn and Peninsula Park, and essential for revitalization of the area. He stated that it will form an arts and entertainment area that will be a showcase for Newport Beach. Jill Forbath, Marketing & Operations Manager for the theater, stated that she was excited to be a part of the project and is amazed at the commitment, time and money that has been spent on the effort. Ms. Forbath listed many of the things that she is trying to do, which includes fund raising, adding members to the board and conducting Volume 55 - Page 134 City of Newport Beach City Council Minutes April 23, 2002 INDEX special events. She stated that the people involved are dedicated and understand what they're trying to do. She invited the City Council to a Sampler Series event to be held May 1, 2002, at the Newport Hyatt at 7:30 p.m. Andy Lundquist, Newport Beach, stated that he was asked to get involved with the theater project as a construction manager. He stated that the cost of the basement was really driving the construction costs up and that's when the building at 111 Main Street was looked at as an option for the space that was needed. Mr. Lundquist stated that the business plan includes steps for turning the site into a building that has value. He stated that he believes that the theater can be completed in a timely basis. Council Member Heffernan stated that old foundations and old buildings usually result in unforeseen costs. He asked Mr. Lundquist if he was confident that the cost estimates were accurate. Council Member Heffernan noted that the City is counting on two - thirds of 111 Main Street being available for resale. Mr. Lundquist stated that the plan is to construct three new walls in the theater and he believes that, structurally, it is the proper way to perform the construction. He stated that although a complete evaluation of 111 Main Street has not been done, he felt confident there wouldn't be any surprise situations underground and that the cost estimates, with the contingency program, are complete. Mayor Ridgeway suggested that Council Member Heffernan visit the site with him, noting that the foundation and the walls are exposed. Council Member Adams stated that several of the line item cost estimates have zero dollars associated with them. He asked where those elements were accounted for in the budget. Mr. Lundquist stated that some of the items weren't included because the designs hadn't been done yet. Council Member Adams asked if Mr. Lundquist was comfortable with a 6.5% contingency given that the cost of all items is not included and that there could be unexpected expenses. Mr. Lundquist stated that the estimates have been gone over many times. Council Member Adams asked if escalating costs had been considered, given the timeframe of the project. Mr. Lundquist stated that he felt that the cost estimates would still be good in a couple of years if the economy and interest rates remain as they are. Council Member Adams suggested that a 3% per year escalation be factored into the costs, and asked about the timing of dividing the site at 111 Main Street. Mr. Lundquist stated that dividing it sooner would result in a cost impact on getting the construction of the theater started. Council Member Adams stated that it might make more sense for the foundation's $200,000 contribution towards the purchase of the site to be used for the division of the site instead, so that the City owns a sellable asset sooner. Assistant City Manager Wood stated that the plan's budget shows the money for the modification of 111 Main Street as being included in the first phase. Council Member Adams stated that the first phase may not start for another year. Volume 55 - Page 135 City of Newport Beach City Council Minutes April 23, 2002 MID)�• Mayor Ridgeway stated that the issue could be discussed further by the City Council, but he understood that there would be an income stream from the building and that We a matter of cash flow, and that possibly the modifications could be done earlier. In response to Council Member Glover's question, Mr. Lundquist stated that he'd been on the foundation board for two months. Council Member Glover stated that there was a break in the efforts to rehabilitate the theater so that a reevaluation could be done. She complimented Mr. Lundquist for his practicality and stated that it is needed on the board. Mr. Lundquist stated that he's sat on several boards and does feel that he's practical and speaks his mind. He stated that his specific duty on the board is to provide facts involving the construction. Council Member Glover stated that she wanted to make sure that costs and budgeting would be looked at very closely. Bill Wren, 1118 E. Balboa Blvd., Vice President of the Balboa Performing Arts Theater Foundation, stated that the money needed for the first phase is between $1 million and $1.2 million. Council Member Adams noted that the business plan indicates that an additional $1.7 million is needed before construction could begin. Mr. Wren stated that the goal to have $2 million in the bank before construction would begin covers the cost of the shell, modifications to 111 Main Street and operating expenses. He stated that the $3.4 million needed to complete the building covers construction costs, operating expenses, the first year's deficit in operations and a contingency. Mr. Wren pointed out that the modifications to 111 Main Street could be done at any time. Council Member Adams stated that the milestones identified in the business plan seem to contain an error. He specifically noted the theater opening 3.5 months after the $1.7 million has been raised. He asked if this shouldn't be 3.5 years. Mr. Wren stated that it should be years. In response to Council Member Proctor's question, Mr. Wren stated that the foundation has a total of $1.2 million in the bank, and that only an additional $1 million to $1.2 million is needed to begin construction. Mr. Wren stated that once the initial $2 million is raised and construction begins, the foundation will have nineteen months to raise the additional $3.5 million. In response to Council Member Proctor's question, Mr. Wren stated that its taken since 1996 to raise $2 million. Council Member Proctor stated that it has been indicated that the value of the buildings, once the modifications to 111 Main Street are done, would be $1.8 million. He noted that this equals $1.3 million for the theater and $500,000 for the balance of 111 Main Street. Council Member Proctor asked where the totals were derived from. Mr. Wren stated that the figures came from Mr. Lundquist. Sue Canon, Orange County Public Relations, stated that she studied other theaters, and performing and presenting institutions in Orange County to give the City Council a history of what has happened with Volume 55 - Page 136 City of Newport Beach City Council Minutes April 23, 2002 INDEX other facilities. Ms. Canon stated that she looked at the Laguna Playhouse, which was founded in 1924 and that it was important to note that the City of Laguna Beach assisted twice with the project over the years. Ms. Canon stated that the South Coast Repertory was founded in 1964 with a plan for a four -step project. She stated that their history shows that the artistic directors were off by about ten years in obtaining their goal. Ms. Canon stated that the Orange County Performing Arts Center, although not really comparable to the Balboa Theater, is another example of a project with a mission to raise community awareness and funds to open. She noted that nineteen sites over a period of six years were researched for the Performing Arts Center and all were rejected. She stated that the Segerstrom family donated five acres and $1 million. Ms. Canon stated that the Balboa Theater went into full gear in 1998 after the City purchased the old theater, and that they have been busy conducting a community survey, raising community awareness, developing a diligent public relations plan and building the foundation board. In conclusion, Ms. Canon pointed out that the efforts for the Balboa Theater have put the project on track compared to other projects. Peggy Whitehead, 332 L Street, Vice President and Director of Casting for the Divas of the Balboa Theater, the support guild for the theater, stated that the Divas have 132 members and have raised over $175,000 during the last three years. She announced that they will be hosting their annual membership reception on May 15, 2002, at the home of Mayor Ridgeway. She presented invitations to the event to each of the council members. Ms. Whitehead urged the City Council to vote in favor of purchasing the property at 111 Main Street. Ray Pourmussa, The Balboa Inn, stated that The Balboa Inn strongly supports the purchase of 111 Main Street and annexing it to the existing theater. He stated that it is a good project for the City, and noted that the Balboa Inn is moving forward with its expansion and renovation. Per Mayor Ridgeway's question, Mr. Pourmussa added that construction for his project could begin prior to the end of the calendar year, and that they are currently in the planning process. Gay Wassall - Kelly, 409 E. Edgewater, President of Balboa Merchant & Owners Association (BMOA), stated that the BMOA is in favor of the City purchasing the property at 111 Main Street. She stated that it's a vital factor in the restoration of the historic theater and reduces a major expenditure. She stated that the theater has been closed too long and belongs to the visitors to the City. Peggy Fort, marketing consultant for the Balboa Village Business Improvement District (BID) and the BMOA, stated that she was present to speak on behalf of Bob Black, who could not attend the meeting. Ms. Fort stated that Mr. Black, owner of the Catalina Passenger Service and the Balboa Pavilion and Treasurer of the BID and BMOA, is in favor of the City purchasing 111 Main Street. She read from Mr. Black's written statement, which stated that opening the Volume 55 - Page 137 City of Newport Beach City Council Minutes April 23, 2002 1 0 1 0►'/ theater would benefit the area businesses. Ms. Fort stated her personal support for the purchase also. Council Member Glover stated that the only reason she is supporting the purchase of 111 Main Street is because she has faith in the people behind the project. Motion by Council Member Glover to direct staff to enter into negotiations for City acquisition of 111 Main Street; and direct staff to amend the Lease Agreement with the Balboa Performing Arts Theater Foundation as follows: add the western third of 111 Main Street; require the Foundation to contribute $200,000 towards the purchase of 111 Main Street; require the Foundation to separate 111 Main Street into two shell buildings meeting Building Department requirements; and add fundraising and construction milestones. Mayor Pro Tem Bromberg stated that he was one of the five founders and original board members. He stated that he resigned from his position on the board of directors when he was elected as a council member, per the advice of the City Attorney. He stated that there was no legal conflict of interest, but there could have been the perception of one. Mayor Pro Tem Bromberg stated that the theater project is backed by a committed group of people. Regarding fundraising, he stated that all of the efforts to date have been grassroots and that a capital campaign will now begin. He stated that the Balboa business district has died, but the theater will revitalize it and become a viable part of the community. He noted that it has worked for every place that has tried something like this. He stated that the improvements currently taking place in the area won't bring in business, but the theater will. Council Member Adams stated that the agreement with the foundation needs to protect the City's interest and investment. As it is written now, it leaves the City exposed. Mayor Ridgeway stated that the existing lease with the foundation needs to be modified in order to incorporate the new building. He suggested that most of Council Member Adams' concerns could be addressed at that time, and felt that they should. In addition to the comments made earlier by Council Member Adams, he added that quarterly reporting by the foundation should also be considered. He stated that insurance is another concern of his and the City should be indemnified for all activities. Mayor Pro Tem Bromberg stated that the original lease does have an indemnification clause and the City is well covered. Assistant City Manager Wood additionally pointed out that the motion does include certain things that need to be added to the amendment of the lease. Council Member Adams asked if the City would own all of the improvements made by the foundation on the site. Volume 55 - Page 138 City of Newport Beach City Council Minutes April 23, 2002 INDEX Mayor Pro Tem Bromberg stated that there is a provision in the lease that everything belongs to the City. He stated that there is also a buyout provision for the theater. He confirmed that the safeguards in the lease are good. Council Member Adams stated that he would be more comfortable if the structures at 111 Main Street were divided sooner, so that the City would have the option to sell the remaining portion. He stated that he'd like it to be a part of phase one if the agreement included a reasonable timeline for the implementation of the first phase. Mayor Ridgeway stated that they know that they need to begin construction soon. Council Member Adams additionally suggested that the construction cost estimates be redone. He stated that escalation has to be included and the missing line items need to be added. Council Member Glover confirmed with Assistant City Manager Wood that the fundraising and construction milestones included in her motion would be coming back to the City Council for discussion and action. Assistant City Manager Wood added that the existing lease agreement would be amended, and those issues would be added at that time. Council Member Glover amended her motion to include the concerns of Council Member Adams. Council Member Heffernan stated that the purchase of the property by the City is ill timed and it is not an essential City service. He stated that the Mariners Library also needs the money. Council Member Heffernan added that the City has underfunded reserves. He stated that the theater is a wonderful project, but it doesn't stand on its own, opens up exposure to the City and contains loose timelines. Council Member O'Neil agreed that it's not the best business deal, but it is worth the risk in order to support arts and culture in the City. He additionally noted that the people involved are dedicated and committed, and he believes in their project. Mayor Pro Tem Bromberg stated that a study on the economic impact of the non -profit arts in Orange County indicates that when the arts come into an area, the area and local government thrive. Council Member Adams stated that the purchase of the property can be looked at as a reserve, and if the foundation's goals are met in a relatively short period of time, the City's risk will be eliminated. He stated that in addition to possibly being a long -term investment, it also supports arts in the community and benefits the local commercial area. The amended motion carried by the following roll call vote: Ayes: O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Volume 55 - Page 139 City of Newport Beach City Council Minutes April 23, 2002 Noes: None Abstain: None Absent: Heffernan Mayor Ridgeway reminded the foundation that their work had only just begun. Mayor Ridgeway recessed the meeting at 9:45 pm. and reconvened it at 9:55 p.m. 14. COUNCIL POLICY MANUAL UPDATE FOR 2002 AND PUBLIC MEETING TO CONSIDER CITY'S STATEMENT OF INVESTMENT POLICY (POLICY F -1). Motion by Mayor Pro Tem Bromberg to approve the proposed revisions or additions to the Council Policy Manual: Revisions to A -2, D -1, E -1, F -1, F -2, F -3, F -8, F -11, G -1, I -1, I -5, I -25, K -7 and L -21; and additions of F -17, K -11, L -18 and L -22. Jim Hildreth stated that the changes being made to the Public Records Act Policy, Council Policy E -1, are not following the guidelines set by Government Code. He stated that the recourse of an individual who hasn't received requested documents is to obtain a court order to have the records released. Mr. Hildreth stated that the City Attorney's involvement should be advisory only and the City Manager's office should be in charge of the records for the City. He noted that Council Policy E -1 doesn't need to be changed since the Government Code wasn't changed and there are no new regulations. Mr. Hildreth stated that the City has acted in bad faith in regards to his requests for public documents and the new policy doesn't do anything to assure that this won't continue. In conclusion, Mr. Hildreth stated that the State guidelines should be followed and disagreed with the proposed changes. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None 15. APPOINTMENT BY MAYOR OF AD-HOC APPOINTMENTS COMMITTEE TO REVIEW APPLICATIONS AND MAKE RECOMMENDATIONS TO THE FULL COUNCIL FOR THE BOARD AND COMMISSION VACANCIES SCHEDULED TO OCCUR ON JUNE 30, 2002. Mayor Ridgeway appointed Council Members O'Neil and Proctor, and Mayor Ridgeway to serve on the ad -hoc appointment committee. Motion by Council Member O'Neil to confirm the Mayor's Volume 55 - Page 140 INDEX Council Policy Manual Update (69) Ad -Hoc Appointments Committee (24) City of Newport Beach City Council Minutes April 23, 2002 appointment of Council Members O'Neil and Proctor, and Mayor Ridgeway to serve on the ad-hoc appointments committee to review applications and make recommendations to the full Council for the Board and Commission vacancies scheduled to occur on June 30, 2002. The motion carried by the following roll call vote Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None P. MOTION FOR RECONSIDERATION - None. Council Member Heffernan announced that there will be an open seat in District 7 in November, 2002. He stated that he's neglected his family for too long and he has come to that decision. He stated that the details could be worked out later. Q. ADJOURNMENT -10:00 p.m. in the memory of Wendell Fish. The agenda for the Regular Meeting was posted on April 17, 2002, at 12:15 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. The supplemental agenda for the Regular Meeting was posted on April 19, 2002, at 2:00 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. o mw,z City Clerk t`�-P-C Recording Secretary Volume 55 - Page 141