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HomeMy WebLinkAbout12/11/2012 - Special MeetingCity Council Minutes Special Meeting December 11, 201.2 — 4:00 p.m. I. ROLL CALL - 3:30 p.m. Present: Council Member Hill, Council Member Rosansky, Mayor Pro Tem Curry, Mayor Gardner, Council Member Selich, Council Member Henn, Council Member Daigle 11. NOTICE TO THE PUBLIC III. PUBLIC COMMENTS - None IV. CLOSED SESSION - 3:30 p.m. A. CONFERENCE WITH LABOR NEGOTIATORS (Government Code § 54957.6) Agency Designated Representatives: Dave Kiff, City Manager and Terri Cassidy, Deputy City Manager /Eluman Resources Director; Negotiators. Employee Organizations: All Labor Associations: Association of Newport Beach Ocean Lifeguards (ANBOL); Newport Beach City Employees Association (NBCEA); Newport Beach Employees League (LABEL); Newport Beach Firefighters Association (NBFA); Newport Reach Fire Management Association (NBFMA); Lifeguard Management Association (NBLMA); Newport Beach Part Time Unit (UPEC, Local 777); Newport Beach Police Association (NBPA); Newport Beach Police Management Association (NBPMA); Newport Beach Professional and Technical Association (NBPTEA) V. RECESS VI. RECONVENED AT 4:00 P.M. FOR SPECIAL MEETING VII. ROLL CALL Present: Council Member Hill; Council Member Rosansky; Mayor Pro Tern Curry; Mayor Gardner; Council Member Selich; Council Member Henn; Council Member Daigle VIII. CLOSED SESSION REPORT - City Attorney Harp reported that there were no reportable actions taken UL CURRENT BUSINESS L RESIDENTIAL PIERS. f100-20121 Council Member Selich reported that because he owns a residential pier, the City Volume 60 - Page 669 City of Newport Beach City Council Special Meeting Minutes December 11, 2012 Attorney has advised him to recuse himself from hearing this item. Council Member Selich, therefore, recused himself and left the dais. City Manager Kiff provided a PowerPoint presentation to summarize the issues and highlight changes made since the last meeting. He stated that adjustments are occurring throughout the State and confirmed that the revenue will be for tidelands uses only. He presented revised recommendations and addressed the phasing period for the proposed increases. He addressed an appeals process, requirement for insurance without an indemnification clause for the City, and actions taken by Council that will result in lowering the rents. He presented examples of residential piers and incorporated the revised recommendations and addressed unique properties and situations. He presented decision points for consideration by Council and addressed implementation issues. In response to Council Member Henn's questions regarding insurance, Human Resources /Risk Management Administrator Farley reported that there are two available markets and that the available coverage would be only for the City, not individual dock owners. She confirmed that there is no product currently available to protect both the City and the dock owners and believed that this is not feasible at this time. Council Member Henn suggested proceeding with the recommendation to require liability insurance coverage and not require a minimum amount. Council Member Daigle expressed concerns that if a dock owner does not comply with the insurance requirement that their permit could be revoked. Staff noted there is an established process in Title 17 on dock revocation and indicated that they will work with the dock owners if situations arise. In response to Council Member Daigle's inquiry regarding additional administrative costs for the City, City Manager Kiff reported that, if needed, the City could hire temporary staff to help but believed that the City's CIS team has been determining square footage. Council Member Daigle addressed comments that previous Council has been negligent in raising the fees and indicated that she spoke with past Council Members that indicated that at the time, the tidelands did not allow for rent or a tax, and the best the City could do was to assess an inspection fee. City Attorney Harp clarified that the Beacon Bay Bill has always allowed for the ability to charge rent. In response to Council Member Daigle's question, City Manager Kiff reported that the original Harbor Charges Committee consisted of Council Members Henn, Rosansky and Selich, and discussed their responsibilities. He noted that the committee sunsetted and a working group has been looking at the issues as individual Council Members, but it is not a formal committee and not subject to the Brown Act. Bill Kinney indicated that he reviewed the staff report, but did not have an opportunity to review City Manager Kiff 's remarks. He referenced Resolution No. 2012.120 regarding exclusion of waterways and improvements owned by the permitee, and asked if the waterways at Promontory Bay are City -owned or City - administered. Regarding private waterways, he suggested changing the resolution from "excluding private waterways and improvements owned by the permitee or tidelands subject to recorded easements for pier and slip purposes" to "privately -owned lands or submerged lands subject to a recorded easement". He thanked City Manager Kiff for attending the Promontory Bay Community Association meeting. City Attorney Harp indicated that those changes would be acceptable. Joanne Harrold agreed that Council must follow the law in terms of the procedures it must follow, but that the law does not provide how the square footage is to be determined. She disagreed with how that determination is being calculated and noted that there are many docks that have no boats on the floats. Volume 60 - Page 670 City of Newport Beach City Council Special Meeting Minutes December 11, 2612 Danny Sullivan believed that there needs to be additional discussion on this matter and suggested that the City hold another public workshop since there is no need to rush the project. He referenced SB 152 and noted that the Senator's office who authored the bill informed him that it is not applicable to the City of Newport Beach. He requested that all pier owners be notified regarding the workshop and provide individual pier owners of their estimated charges. He believed that Council Member Rosansky should not vote on the issue given that he will no longer be on Council. He addressed the property tax situation, fair market value, and other options for possible consideration. He asked for a fair and simplified system, and reiterated his request for an additional workshop. Kristine Thagard, representing Stop the Dock Tax, focused on the property rights of owners and requested additional time to review the proposals and make recommendations to arrive at a mutually, agreeable consensus. She noted the group's intention to boycott the Boat Parade and noted that they are peacefully protesting the process and simply request additional time to explore the issues at hand. She asked that the City recognize their vested rights, addressed consequences for non - compliance, and stated that she believed that this is a taking which goes against the State Constitution. She stated that SB 152 is not applicable to Newport Beach and noted that it is a vested right of a homeowner to have the pier and be able to pass it along to the next homeowner. She addressed added property values of docks and lost equity by the passing of the subject resolution. She reiterated the request to allow more time to consider the proposals and review alternatives, and referenced a proposal generated by Stop the Dock Tax. She added that she believes that the new fee is in violation of Proposition 26 in terms of requiring approval by a two - thirds vote. She addressed CEQA, Brown Act, and Constitutional issues and believed that it is not in the City's best interest to rush this. Steve Baric, representing the Newport Beach Dock Owners Association, expressed concerns over potential violations of the Brown Act and the rights of the public to be informed and heard on actions such as this. He referenced the committee's recommendations and addressed the levels of proposed increases. He asserted that the committee became a standing committee and believed that it is subject to the Brown Act. He expressed the opinion that since the committee, consisting of the same members as the sunsetted committee continued to meet, it was subject to the Brown Act. He addressed the importance of the public being aware of all the deliberative processes that went into forming the current recommendations and requested that Council consider this item upon further review and input from the public, and allow for additional input and provide information of all the processes that were followed. Pete Pallette requested that Council consider postponing its vote on this topic until reasonable solutions can be reached. He took issue with the magnitude of the proposed fees. He expressed opposition to the matter and requested continued review. He offered suggestions for Council to consider in developing a solution, encouraged everyone to work together, and requested that Council consider reconciliation and developing solutions. John Hedlund expressed opposition to the proposed boycott of the Boat Parade, adding that it does not accomplish anything. He spoke in opposition to the proposed fees and addressed improvements he has made to his dock and noted additional property taxes paid because the valuation of his property included his dock. He suggested that Council seek a less discriminating method of raising additional revenue. Gary Sherwin, President of Visit Newport Beach, Inc. (VNB), commented on how the Christmas Boat Parade brings everyone together and stated that it does not make sense to penalize people who have not had a role in this issue by boycotting it. He addressed participation commitments received and listed actions taken by VNB to promote the Boat Parade. Volume 60 - Page 671 City of Newport Beach City Council Special Meeting Minutes December 11, 2012 Frank Singer, representing approximately 4,000 homeowners in Huntington Harbor who are facing a similar situation, presented testimony on his participation in the City of Huntington Beach process and noted that the fees they pay go into the General Fund. He addressed SB 152 and believed that this is a tax and should have required a two - thirds majority vote. He stated that insurance should not be an issue. Andrew Mozeleski, District Representative with Senator Mimi Walters' Office, read a letter from Senator Walters into the record highlighting that since the docks in Newport Beach are privately owned, they are private property and that placing additional assessment burdens on homeowners will make it more difficult for them to sell their homes and would depress property values further. The letter addressed unintended consequences, like boycotting the Boat Parade, and stated that she will direct her staff to introduce legislation in order to clarify the rights of property owners with residential piers. She requested that Council table the issue until January to allow for more public input and forge a reasonable solution. Hugh Randolph commented on exemptions to Harbor Island and Linda Isle while none has been granted to Newport Island, which has less access and is smaller. He commented on the calculation of square footage and believed that charges should be for the dock itself. Chet Needleman noted that many people have docks, but do not have boats. He spoke in favor of allowing dock owners to rent out their docks; however, questioned how the City could rent property and then charge a permit fee on the rented property. He requested to view a budget line item to reveal how much money is raised from this process and footnote the statement to break out the income and expense so that dock owners can see where their money is going. He requested that Council postpone the item_ Bobby w1cCracker, Student Council President at Ensign Intermediate School, spoke in opposition to the proposed fees and expressed concerns over the effects on residents, local businesses and tourism, and the Ha -bor. He stated that the City is in a good fiscal position and wondered why the additional fees are needed. Tom Larkin spoke in opposition to the proposed, fee increases and noted that many of the area residents are on fixed incomes. He also indicated that it was likely that litigation over this matter would ensue. Curt English, President of the Newport Beach Republican Assembly, addressed the current political environment and suggested that the City consider cutting spending rather than raise fees. He offered to help the City in its attempts at cutting spending. He thanked the residents who decorate their houses and boats during the holiday season. Douglas Wood expressed disappointment with Council and believed that there are many issues that are left unanswered. He asked that Council allow additional time for consideration of those issues. He. listed items that are yet to be determined, including insurance, the appraisal process, and consideration of what other cities are doing. He encouraged Council to develop solutions in conjunction with residents. Bud Reveley addressed inequities in the plan as it relates to Newport Island and requested additional time for developing reasonable alternatives. He suggested forming a working committee to generate ideas and solutions. Dan Mariscol believed that the proposed pier rental rates are unfair for small docks when compared with small marina piers. He noted that many dock owners allow their friends to use their docks at no charge and wondered how that situation would be addressed. He added that the size of the dock is not the best reflection for the fee since some docks have been made smaller in order to allow for Volume 60 - Page 672 City of Newport Beach City Council Special Meeting Minutes December 11, 2012 the docking of larger boats. He suggested considering a flat rate for all of the piers. Roger McGregor spoke in opposition to the project because of the effect it will have on his yacht manufacturing business. He believed there is almost no evidence that the State is pushing the City to raise fees on residential piers. He noted the power of the people and addressed the Boat Parade boycott. Walter Albercourse urged Council to continue the item and indicated support for the Stop the Dock Tax group. Jamie Woodworth provided information regarding his docks and multiple moorings, and addressed payments of property taxes and other taxes being assessed. He spoke in opposition to the proposed fee increases, indicated support for the Parade, and asked that Council take its time in considering this item. Dennis Lecio believed that raising taxes is not mandated by SB 152 and addressed the purpose and provisions of the bill. He spoke in opposition to the proposed assessment and encouraged Council to work in conjunction with residents. Unidentified Speaker asked Council to make its decision transparent, consider public input, and make the decision based on the Golden Rule. She asked that Council take its time in considering the matter. Jim Miller believed that Council is making a mistake on this issue and expressed concerns regarding the various dock sizes and conditions since they are not all equal. He spoke in support of the Boat Parade boycott. Mike Brant- Zawadski encouraged Council to take its time to carefully consider the matter to develop an amicable process that includes stakeholders. Brian Harrington reported that he rents his house that includes a dock and spoke in opposition to the proposed assessments. He asked that Council take its time in considering the issue as it relates to renters. City Attorney Harp agreed that SB 152 is not applicable to the City, but requires the State Lands Commission to charge fair market value for residential piers on State tidelands. He pointed out that what is relevant is that the State is expressing the same concept of charging fair market value to rented land upon which residential piers are located and SB 152 is being considered in that context. He stated that the proposal being considered is not a tax, but rather rent for the use of tidelands that are not owned by adjacent property owners. He indicated that a littoral right is a legal theory which protects property owners from having access to the water impaired by an adjacent property owner. He referenced a previous case, noting that it does not apply to tidelands, but to other adjacent property owners. City Attorney Harp addressed the idea of vested rights and noted that it is not the case because the docks are situated on tidelands so there are no vested rights in that area. Regarding Brown Act issues, he reported that the Ad Hoe Committee on Harbor Charges was comprised of Council Members Henn, Selich and Rosansky via Resolution 2010.95 to review commercial piers and moorings and had no charge to review residential piers. He reported that the committee sunsetted on March 31, 2011. The working group was not subject to the Brown Act and does not have the same membership since it included Mayor Gardner and Council Members Henn and Rosansky. it was formed organically, not through official action of Council, it was composed of less than a quorum of Council, is not a standing committee, does not have subject matter jurisdiction, and its meeting schedule is not fixed by Charter Ordinance. Therefore, it does not meet any of the rules for the definition of a Brown Act committee. Volume 60 - Page 673 City of Newport Beach City Council Special Meeting Minutes December 11, 2012 Regarding condemnation and takings, City Attorney Harp stated that there is no right to use the land and that the institution of rent for the use of the land is not a taking. Regarding CEQA, he added that the adoption of a permit and setting of rent is not a project under CEQA and nothing new is being proposed. He addressed authorization for dock owners to rent their docks while charging the same rate as smaller marinas in the City and that sub - letting is allowed in the Municipal Code. Regarding Harbor Island, City Manager Kiff noted that it is surrounded by County tidelands. He addressed the valuation relative to Newport Island and reported that both appraisers indicated that the square foot value should be the same as Harbor Island. He defined the back side of the dock and addressed, suggestions for cutting spending and listed actions taken by the City to do so. Regarding appeals fee costs, he noted that it needs to be set at low enough amounts so that it is not a detriment to the appellant but at a high enough amount that it covers the cost of the appeal. In response to Mayor Gardner's inquiry regarding long -term leases, City Attorney Harp stated that there is no issue in entering into a long -term lease if that is Council's pleasure. Mayor Gardner clarified that there is no intent to charge a permit fee and rent at the same time. She indicated that there is consideration of removing properties on County land entirely and addressed usable land relative to tide levels. Harbor Resources Manager Miller reported that the City will not charge for the back end of the pier because generally the sides and front are usable by almost everyone in the Harbor. He further addressed the "pre- appeal" process, Mayor Gardner brought up the idea of a user fee for kayakers and paddle boarders. She noted that comments in support of the issue are being received from many City residents and that the issue is not one- sided. She indicated that Council Members' minds have not been made up, but she has been put in an extremely difficult position since some members of the public have brought up the threat of litigation and boycotting the Christmas Boat Parade. Mayor Pro Tern Curry noted that this item has been discussed extensively and that there has been a lot of negotiation and change from what was originally proposed. He addressed reductions as a result of the negotiations and indicated that he would not support any insurance or indemnity requirements. He emphasized that this is a fee, not a tax. He addressed inclusion of language that provides definition regarding private water for places that are exempt, spending the money for improvements in the Harbor, and adjustment of fees during the course of the negotiations. He stated that the legislature has said that it is public water and believed that the fees are modest compared to the value provided. Council Member Daigle questioned the applicability of SB 152 to the City. City Attorney Harp addressed the requirements of the Beacon Bay Bill to manage tidelands consistent with property and that SB 152 will also look into charging for residential piers for the use of State lands. Council Member Daigle reiterated conversations with previous Council Members and expressed appreciation for representation from Senator Walters' Office. Council Member Hill noted this is the leasing of land for private use and that misinformation is being distributed. He believed that the proposed fees are not that significant. He asserted reasons why previous Councils may not have wanted to address the matter and commented on the phasing - in period. He believed that this has to be done and is the right thing to do, adding that the ratio of opposition to support has been running 1 -to -1. Council Member Hill questioned how West Newport Beach could be treated the same as the rest of Volume 60 - Page 674 City of Newport Beach City Council Special Meeting Minutes December 11, 2012 the Harbor due to its limited boat access and unequal location and functionality. He addressed the matter of escalation and distinguished between rent rates being raised for commercial piers by use of a CPI versus use of a CPI adjuster for residential piers. He addressed Proposition 13 and the need to model after it. He believed that the City has a fair market value responsibility and noted that there would not be an escalation of that number but rather moving towards that number during the phasing -in period. Ile supported establishing a fair market value, moving to that value in five years, and mirroring Proposition 13 at a CPl not to exceed 2% from that point forward with no additional appraisal unless the property is sold. Council Member Henn indicated that he has received a great deal of emails on the issue and stated that he has read and considered each one. He acknowledged the comments received and noted that he has also considered all of the comments. He reported that it has been at least 23 years since this issue has been considered and that there have been huge changes in property values over that period of time. He addressed benefits to the property owner due to the inaction and stated that this is a valid public input process. He noted the positive changes made after the original proposal was considered and addressed the calculation of the fees and the need to operate on the basis of rational and objective input through the process of obtaining independent appraisals. He emphasized that Council has thoroughly studied this issue over the last two years. He noted that other residents who do not live on the water pay taxes and that the General Fund subsidizes improvements to the Harbor. He noted the need to maintain a balance and reiterated that the money raised by this assessment will be spent on Harbor improvements. He addressed open items remaining, including the appeals process. Council Member Hill addressed CPI adjustments during the phase -in period to fair market value and the need to determine adjustments at a future time. Council Member Henn believed that this is not a fair approach relative to commercial marinas and that residential piers should not be exempted. Council Member Rosansky indicated that he is willing to accept doing away with the 2% while the new fee is phased -in. He noted that Proposition 13 is a tax and that the proposed fee is a mandate by the State to charge a fair market, rent. He stated the need for a mechanism to reassess the fees on a regular basis after the five -year phase -in period. Mayor Pro Tem Curry suggested adding that, beginning in 2017, the fees will be adjusted by no more than 2% unless Council decides to go through an appraisal process at that time. Council Member Hill agreed that this is not a tax, but rather the leasing of land, and that the goal of Proposition 13 was not to levy a tax but to protect people who are on fixed incomes so that, as their property is reassessed, they would not be hit with exorbitant taxes. He spoke in support of a 2% or CPI increase, whichever is less, every year after the five -year phase -in period and adjustment at time of sale. Discussion followed regarding the ability by future Councils to reconsider the issue and not having to consider the item every five years. Mayor Pro Tem Curry believed that it is impractical to think there will be a process that creates an automatic increase in 2017 beyond a 2% threshold limit without there being a significant community response. He stated that this approach allows the fees to rise by 2% after the five -year phase -in, as property values are assessed pursuant to the Proposition 13 formula, and there is nothing to prevent future Councils from directing further appraisals to be conducted. Discussion followed regarding not assessing the 2% adjustment during phase -in and subsequently assessing the 2% or CPI, whichever is lower, unless Council at that time decides to go through an appraisal process. A straw vote resulted in a 4 -2 (Council Members Henn and Daigle - no) support of the aforementioned matter. Volume 60 - Page 675 City of Newport Beach City Council Special Meeting Minutes December 11, 2012 City Manager Riff reported that commercial marinas are set for re- appraisals in 2018 Council Member Henn indicated that he would support a requirement that residential piers be included in that appraisal process at that time. Mayor Pro Tern Curry wondered whether mandating another Council to act is valid. Council Member Henn stated that he is suggesting that residential piers go through the appraisal process again in 2018 when commercial marinas go through it. He noted that future Councils have the option of taking different actions. Council Member Hill stated that he would not have a problem with conducting an appraisal that would be applied to both commercial marinas and residential piers if the property is sold. A straw vote resulted in a 3 -3 (Council Members Rosansky, Henn and Daigle - no) show of support to remove the appraisal language. Discussion followed regarding the insurance requirement with no set amount and no indemnification of the City, and the matter of finalizing the appeals process. Council Member Rosansky stated that he would not object to acting on the matter prior to determining the appeals process. City Manager Kiff indicated that staff will work on the appeals process after the first of the year. Discussion followed regarding the issue of allowing rental of docks. Mayor Pro Tern Oarry believed that people should be allowed to rent their docks at the small marina index rate and tape City should evaluate unique situations. Council Member Rosansky and Council Member Henn supported Mayor Pro Tem Curry's suggestions. Council Member Hill expressed concern, egarding renting docks and related parking issues. Discussion followed regarding charges for the Newport Island docks. Council Member Hill believed that access and functionality are not the same on Newport Island as other islands and should not be treated the same. Council Member Rosansky noted the appraisers comdered the issue and found no significant differences in the rental rates. Assi,wtant City Attorney Torres indicated that, from the discussions today, the motion would also incl =.rde a change to the permit to exclude easements from the definition of premises; the adjustment by CPI or 2% would be removed during the phase -in period; beginning in 2018, future adjustments would be limited by 2% or CPI, whichever is less; and the renting of piers will be allowed at the small commercial marina rate of $1.26 as phased -in. Council Member Henn indicated that he will make the motion with the understanding that the motion also includes a market -wide appraisal every five years on residential piers to be used as a reference point for the market value adjustment upon the sale of the property. Motion by Council Member Henn, seconded by Council Member Rosansky to a) adopt amended Resolution No. 2012 -119 approving a model permit template for residential piers and excluding easements from the definition of premises; b) adopt amended Resolution No. 2012 -120 setting fair market value rent for residential piers, removing the adjustment by CPI or 2% during the phase -in period, future adjustments beginning in 2018 would be limited by 2% or CPI, whichever is less, and the renting of piers will be allowed at the small commercial marina rate of $1.26 as phased -in; and c) direct staff to prepare an ordinance amending the Newport Beach Municipal Code ( "NBMC'� to allow for the charging of fair market value rent as well as to remove the current prohibition against rentals of residential piers. Volume 60 - Page 676 City of Newport Beach City Council Special Meeting Minutes December 11, 2012 Discussion followed regarding the possibility of including an appraisal upon sale of the property that would be used to adjust the pier rent at time of sale of the upland property, similar to Proposition 13. City Manager Kiff stated that staff is struggling with establishing that process. Mayor Gardner suggested amending the motion to indicate that if there is a residential appraisal, that it be part of an overall Harbor appraisal and be used at the time of a property sale to adjust rent to market, Council Members Henn and Rosansky agreed to the amendment. Amended motion by Council Member Henn, seconded by Council Member Rosansky to a) adopt amended Resolution No. 2012-119 approving a model permit template for residential piers and excluding easements from the definition of premises; b) adopt amended Resolution No. 2012 -120 setting fair market value rent for residential piers; removing the adjustment by CPI or 2% during the phase -in period; limiting future adjustments beginning in 2018 by 2% or CPT, whichever is less, except that upon sale of the adjacent upland property, the pier rent would be adjusted to market using the most recent Harbor -wide appraisal as a reference; the renting of piers will be allowed at the small commercial marina rate of $1,26 as phased -in; and that a residential pier appraisal be included in any overall Harbor appraisal; and c) direct staff to prepare an ordinance amending the Newport Beach Municipal Code ( "NBMC ") to allow for the charging of fair market value rent as well as to remove the current prohibition against rentals of residential piers. The amended motion carried by the fallowing roll call vote: Ayes: Council Member Hill, Council Member Rosansky, Mayor Pro Tom Curry, Mayor Gardner, Council Member Selich, Council Member Henn Noes: Council Member Daigle X- ADJOURNMENT - 6:32 p.m. Mayor Gardner announced that the Regular Meeting at the new City Hall located at 100 Civic Center Drive will begin at 7:00 p.m. The agenda for the Special Meeting was posted on November 21, 2012, at 3:48 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. �'ejo �*W Recording Secretary Mayor +n n t City Clerk Volume 60 - Page 677