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HomeMy WebLinkAbout08 - Harbor Capital Fund for Marina Park(1) TO: 14 1 Mel 9 NEWPORT BEACH City Council Staff Report Agenda Item No. 8 November 26, 2013 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Finance Department Dan Matusiewicz, Finance Director 949 - 644 -3123, dmatusiewicz @newportbeachca.gov PREPARED BY: Evelyn Tseng, Revenue Manager APPROVED: A TITLE: General Fund Loan to Newport Harbor Capital Fund for Marina Park, Marina Dredging & Dock Construction ABSTRACT: Staff recommends the City Council adopt a resolution to memorialize the existing loan of $9,676,658.50 from the General Fund to the Newport Harbor Capital Fund ( "Harbor Fund ") for dredging Newport Harbor, Linda Isle, and the Rhine Channel from 2011 to 2014. Staff also recommends the City Council adopt a resolution to formalize the City's intent to loan $6,132,900.00 from the General Fund to the Harbor Fund for the development of the marina portion of Marina Park. RECOMMENDATIONS: 1. Adopt Resolution No. 2013 - 84 to memorialize the existing loan of $9,676,658.50 from the General Fund to the Harbor Fund for the dredging of Newport Harbor, Linda Isle and the Rhine Channel from 2011 to 2014. 2. Adopt Resolution No. 2013 - 85 to formalize the City of Newport Beach's ( "City ") intent to loan $6,132,900.00 from the General Fund to the Harbor Fund for the development of the marina portion of Marina Park. 3. Direct staff to request State Lands Commission ( "SLC ") approval for the loan to the Harbor Fund for the development of the marina portion of Marina Park. General Fund Advance to Newport Harbor Capital Fund for Marina Park, Marina Dredging & Dock Construction November 26, 2013 Page 2 FUNDING REQUIREMENTS: There is no additional expenditure of funds related to this item. Please see the body of the staff report for more information. DISCUSSION: The City adopted new permit and lease templates and adjusted commercial and noncommercial tidelands rent to fair market value in December 2012. Pursuant to Chapter 74, Statutes of 1978, as amended, the City requested SLC approval for the establishment of a Harbor Fund to collect the net incremental increase in revenue generated from the adjusted rental rates as well as any additional trust funds, at the City Council's discretion. The SLC approved the establishment of the Harbor Fund on June 21, 2013. The Harbor Fund may be used by the City to: (1) reimburse the General Fund for monies loaned to the tidelands funds for Newport Harbor improvements and maintenance activities, if the loan request was formalized in advance of any expenditures from the General Fund; and (2) fund the improvements and maintenance activities provided in the Five -Year Tidelands Capital Plan for Newport Harbor, which was approved by the City Council on November 27, 2012. As a condition of its approval, the SLC requested the City notify the SLC of any additional or future loans, occurring after June 21, 2013, to the Harbor Fund, and provide supporting documents, including a City resolution, to confirm the loan to the Harbor Fund is formalized in advance of any expenditure from the General Fund. And, if the loan to the Harbor Fund exceeds $1,000,000, the City must obtain SLC approval prior to the procurement of the loan. Dredging Dredging is included within the City's Five -Year Tidelands Capital Plan, and therefore, may be appropriately funded from the Harbor Fund. Dredging of the Harbor, Lower Harbor, Rhine Channel and Linda Isle from 2011 to 2014 will cost approximately $11,214,658.50. Subtracting the Orange County contribution, the loan amount totals $9,676,658.50. This dredging loan occurred prior to SLC's condition that all loans to the Harbor Fund greater than $1,000,000 be pre- approved by the SLC. Thus, the City is not required to provide notice of the dredging loan to the SLC or seek the pre - approval of the dredging loan from the SLC. Instead, staff is recommending the City Council adopt the attached resolution to memorialize the loan for our internal records and to provide a courtesy copy to the SLC. 2 General Fund Advance to Newport Harbor Capital Fund for Marina Park, Marina Dredging & Dock Construction November 26, 2013 Page 3 Harbor Dredging 2011 -12 Project 222.00 Lower Harbor 2011 -12 Dredging 2,779,649.01 Rhine Channel 2011 -12 Dredging 4,069,10211 - 2011 -12 Linda Isle Dredging 30,730.00 - Demolition and Tree Location Lower Harbor 2012 -13 Dredging 3,876,245.46 25,026.84 Community Center and Park Rhine Channel 2012 -13 Dredging 124,531.25 9,151.83 FF &E Lower Harbor 2013 -14 Dredging 300,000.00 10,880,475.89 334,178.67 11,214,658.50 Less: Orange County Contribution (1,538,000.00) Total Advance 9,676,658.50 Marina Park In June 2012, the California Coastal Commission approved the development of Marina Park. In addition to a community center, park with basketball half - courts, playground and walking paths, Marina Park will include a 23 slip visiting vessel marina, visitor side tie dock, and floating docks to support youth and adult sailing programs. The Marina Park development is comprised of 5 packages: Package 1: Demolition and Tree Location Package 2: Marina Basin Construction Package 3: Community Center and Park Package 4: Docks Package 5: FF &E The marina portion, which is within Newport Harbor, is comprised of Packages 2 and 4, for a total approximate cost of $6,132,900.00 ($3,855,300 for Package 2 and $2,277,600 for Package 4). The construction of the Sailing Center, in Package 3, might also be included in the loan, however staff will come back at a later date with a resolution for a Sailing Center loan if the City Council so directs. 3 General Fund Advance to Newport Harbor Capital Fund for Marina Park, Marina Dredging & Dock Construction November 26, 2013 Page 4 Because the marina portion of Marina Park is considered an improvement within Newport Harbor, staff recommends the City Council adopt Resolution 2013 - — to formalize the loan of $6,132,900 from the General Fund to the Harbor Fund for the construction of Packages 2 and 4 of Marina Park, and to direct staff to obtain SLC approval of the loan. If actual construction will differ for the proposed loan amounts, the amount of the loan may be amended at a later date. The loan from the General Fund, to be repaid by the Harbor Capital Fund (a component of the Tidelands Fund) will require the Marina Park project to be bid as a "prevailing wage" project. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: Dan Matusiewicz, Finance Attachments: A. Exhibit "A" – Resolution No. 2013 - 84 , memorializing the existing loan of $9,676,658.50 from the General Fund to the Newport Harbor Capital Fund for the dredging of Newport Harbor, Linda Isle and the Rhine Channel from 2011 to 2014. B. Exhibit "B" – Resolution No. 2013 - 85 , formalizing the City's intent to loan $6,132,900.00 from the General Fund to the Harbor Fund for the development of the marina portion of Marina Park. 4 Exhibit "A" — Resolution No. 2013 - 84 , memorializing the existing loan of $9,676,658.50 from the General Fund to the Newport Harbor Capital Fund for the dredging of Newport Harbor, Linda Isle and the Rhine Channel from 2011 to 2014 s RESOLUTION NO. 2013- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH MEMORIALIZING THE EXISTING LOAN OF $9,676,658.50 FROM THE GENERAL FUND TO THE HARBOR FUND FOR THE DREDGING OF NEWPORT HARBOR, LINDA ISLE AND THE RHINE CHANNEL FROM 2011 TO 2014 WHEREAS, the City Council of the City of Newport Beach ( "City ") approved the Five -Year Tidelands Capital Plan for Newport Harbor on November 27, 2012: and WHEREAS, the dredging of the Rhine Channel and Lower Bay was included as part of the Five -Year Tidelands Capital Plan; and WHEREAS, the City adjusted commercial and noncommercial tidelands rent for piers, moorings, marinas, and tidelands leases to fair market value in December 2012; and WHEREAS, the State Lands Commission ( "SLC ") approved the establishment of a Newport Harbor Capital Fund to collect the net incremental increase in revenue generated from the adjusted rental rates as well as any additional trust funds, at the City Council's discretion, in order to (1) reimburse the General Fund for monies loaned to the tidelands funds for Newport Harbor improvements and maintenance activities, if the loan request was formalized in advance of any expenditures from the General Fund and (2) fund the improvements and maintenance activities provided in the Five Year Tidelands Capital Plan for Newport Harbor; and WHEREAS, the SLC approved the establishment of the Newport Harbor Capital Fund on June 21, 2013; and WHEREAS, the cost of dredging for Lower Harbor, the Rhine Channel and Linda Isle from 2011 through 2014 is $9,676,658.50 ($11,214,658.50, less the $1,538,000.00 Orange County contribution); and WHEREAS, the General Fund loaned $9,676,658.50 to the Newport Harbor Capital fund for such dredging; and WHEREAS, the dredging loan was included in the information provided to the SLC on November 27, 2012, and the SLC did not object to the dredging loan; and WHEREAS, this dredging loan occurred prior to SLC's condition that all loans to the Harbor Fund greater than $1,000,000 be pre- approved by the SLC; thus, the City is not required to provide notice of the dredging loan to the SLC or seek the pre - approval of the dredging loan from the SLC. 6 NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City shall reimburse the General Fund from the Newport Harbor Capital Fund for the cost of dredging Lower Harbor, the Rhine Channel and Linda Isle from 2011 through 2014. Section 2: The total cost of such dredging is $9,676,658.50 ($11,214,658.50, less the $1,538,000.00 Orange County contribution). Section 3: The City Council finds this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 4: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 26th day of November, 2013. Keith Curry, Mayor ATTEST: Leilani Brown, City Clerk Exhibit "B" — Resolution No. 2013 - 85 , formalizing the City's intent to loan $6,132,900.00 from the General Fund to the Harbor Fund for the development of the marina portion of Marina Park D RESOLUTION NO. 2013- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH FORMALIZING THE FORMALIZING THE CITY'S INTENT TO LOAN - $6,132,900.00 FROM THE GENERAL FUND TO THE HARBOR FUND FOR THE DEVELOPMENT OF THE MARINA PORTION OF MARINA PARK WHEREAS, the California Coastal Commission approved the development of Marina Park in June 2012; and WHEREAS, the development of the marina portion of Marina Park is an improvement within Newport Harbor; and WHEREAS, the City adjusted commercial and noncommercial tidelands rent for piers, moorings, marinas, and tidelands leases to fair market value in December 2012; and WHEREAS, the State Lands Commission ( "SLC ") approved the establishment of a Newport Harbor Capital Fund to collect the net incremental increase in revenue generated from the adjusted rental rates as well as any additional trust funds, at the City Council's discretion, in order to (1) reimburse the General Fund for monies loaned to the tidelands funds for Newport Harbor improvements and maintenance activities, if the loan request was formalized in advance of any expenditures from the General Fund and (2) fund the improvements and maintenance activities provided in the Five Year Tidelands Capital Plan for Newport Harbor; and WHEREAS, the SLC approved the establishment of the Newport Harbor Capital Fund upon the condition that the City must notify the SLC in advance of any additional or future loans, occurring after June 21, 2013, to the Harbor Fund that will be reimbursed to the General Fund and provide supporting documents, including a City resolution, confirming that the loan to the Harbor Fund had been formalized in advance of any expenditure from the General Fund; and if a loan to the Harbor Fund will exceed one million dollars, the City must obtain SLC approval prior to the procurement of the loan; and WHEREAS, the cost of developing the marina portion of Marina Park is $6,132,900.00; and WHEREAS, the City Council desires to formalize this loan from the General Fund to the Newport Harbor Capital fund in advance of any expenditure from the General Fund; and WHEREAS, the City Council desires the City to seek SLC approval of the loan of $6,132,900.00 from the General Fund to the Newport Harbor Capital fund. 9 NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: Upon SLC approval, the City shall reimburse the General Fund from the Newport Harbor Capital Fund for the cost of developing the marina portion of Marina Park. Section 2: The cost of such development (excluding the Sailing Center) is $6,132,900.00. Section 3: The City Council finds this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 4: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 26th day of November, 2013. Keith Curry, Mayor ATTEST: Leilani Brown, City Clerk 10