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HomeMy WebLinkAbout11/26/2013 - Study SessionCity Council Minutes Study Session November 26, 2013 4:00 p.m. I. ROLL CALL II. Present: Council Member Gardner, Council Member Petros, Mayor Pro Tom Hill, Mayor Curry, Council Member Selich, Council Member Henn Excused: Council Member Daigle 1, CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. In response to Council Members question regarding root pruning pertaining to Item 16 (2013 -2014 Annual Sidewalk, Curb and Gutter Replacement Project), Public Works Director Webb reported that staff works with the City's forester and arborists to look at each tree, review the root pruning and address any tree needing to be replaced. He indicated that the project involves small areas but that, relative to Lido Island, a larger area of curbs and gutters will be replaced. Regarding Council Member Gardner's question regarding Item 18 (Amendment No. 1 to Professional Services Agreement with AndersonPenna Partners, Inc. for Staff Support Services), Public Works Director Webb indicated that they are assisting with a position that was eliminated but is being held, to determine whether the position is needed. .He noted that inspections are currently being conducted by contractors. In response to Council Member Gardner's question relative to Item 20 (Amendment to the Professional Services Agreement with Hinderliter, de Llamas & Associates (HdL) for Sales and Use Tax Analysis and Appeals), Finance Director Matusiewicz reported that due to HdL's review of the City's sales tax revenue the City did not get a significant amount of money this time around but are hopeful. He added that the amount of the contract does not reflect what is expected to be paid each year but provides for 15% in the event that there is a big finding. In response to Council Member Petros' question regarding Item 15 (Lifeguard Headquarters Rehabilitation Project), Public Works Director Webb reported that staff received a bid protest from the third lowest bidder, but staff reviewed the matter and agree with the recommendation. 2. TCA PLANNED REMOVAL OF CASH TOLL COLLECTION FROM THE TOLL ROADS. [100 -20131 Neil Peterson, CEO of the Orange County Transportation Corridor Agencies (TCA), provided a PowerPoint presentation and discussed a change that will be effective January 1, 2014, where cash collection at toll booths will be phased out to an electronic system. He addressed toll roads, introduction of a 'transponder, number of toll road users, users from outside Orange County, value proposition, how customers pay, introduction of an express account, increased payment choices, and tourists and infrequent users. He commented on the historical importance of transportation. Volume 61 - Page 365 City of Newport Beach City Council Study Session November 26, 2013 Council Member Henn suggested automatically transferring everyone on FasTrak to ExpressAccount, and eliminating the old transponder technology. Mr. Peterson clarified that the ExpressAccount users will pay the same toll as existing cash users, but toll fees are reduced with the use of the FasTrak transponder. Mayor Pro Tem Hill thanked Mr. Peterson for his presentation and noted that the TCA is the entrepreneurial answer to a State that has been unable to plan for mobility. He encouraged Mr. Peterson to keep spreading the word about the new technology. Council Member Henn suggested automatically transferring everyone on FasTrack to ExpressAccount, and eliminating the old transponder technology. Mr. Peterson clarified that the ExpressAccount users will pay the same toll as existing cash users, but toll fees are reduced with the use of the FasTrack transponder. Mayor Pro Tem Hill thanked Mr. Peterson for his presentation and noted that the TCA is the entrepreneurial answer to a State that has been unable to plan for mobility. He encouraged Mr. Peterson to keep spreading the word about the new technology. 3. ECONOMIC DEVELOPMENT STUDY FOR THE USE OF CITY-OWNED BUILDING AT THE END OF THE NEWPORT PIER. [100 -20131 Building Manager /Chief Building Official Jurjis provided a PowerPoint presentation to discuss the structure at the end of the Newport Pier, anticipated repair costs, problems with the existing building, an economic study, the economic study scope, pier uses, retail study, comparable piers, summary of retail categories, per capita retail sales, and the economic evaluation. Brief discussion ensued regarding sales generated by the former restaurant. Building Manager /Chief Building Official Jurjis addressed possible next steps to remodel the existing structure, estimated financials relative to a joint venture for remodeling, costs and benefits related to the option of replacing the existing building, and costs and benefits related to removing the existing building. Council Member Selich indicated that he would be in favor of remodeling the structure since it would eliminate the need for Coastal Commission review and he believed there is a market for a new user. Mayor Pro Tem Hill expressed concern with making decisions based on Coastal Commission involvement. He discussed remodeling and received clarification from Building Manager /Chief Building Official Jurjis that remodeling would be based on interior improvements. He added that, in terms of the remodel option, bidders would need to know what they will be starting with and that the City would have to define what it would be responsible for in the process. Council Member Gardner stated this provides the City with an opportunity to do something different. She added that the Newport Pier is a different kind of pier, and expressed a preference for removing the structure. She believed that the Coastal. Commission could be convinced that it is a worthwhile project. Council Member Petros believed that the space should provide the public with flexibility. He commented on possible uses for the end of the pier, expressed support for removing the structure, and discussed programming the area for the widest possible uses that would be the greatest benefit for the community. Council Member Henn suggested that, if Council decides to remodel the structure, the City retain Volume 61 - Page 366 City of Newport Beach City Council Study Session November 26, 2013 flexibility to reconfigure the space in a way that maximizes a potential bidder's use of the property. Council Member Selich commented on the idea of removing the structure and possible other uses. He stated that, if Council decides to remove the structure, it is opening itself to allowing another agency's interpretation of what visitor- serving uses of the pier are and will open the possibility for additional requirements, Mayor Curry agreed with Council Member Selich's concerns, but noted that unlike the Balboa Pier, there is a lot more parking at the Balboa Pier and offers other activities. He indicated preference for spending a minimum amount of money if the structure is to be removed and ensure that whatever takes its place will be something that serves the community. Council Member Petros commented on a recent visit to San Francisco where there were open . wharfs providing different uses. He acknowledged the possible involvement of the Coastal Commission, but believed that they will be less prescriptive with flexibility of uses. In response to Mayor Pro Tem Hill's questions, Building Manager /Chief Building Official Jurjis stated the Newport Pier has an existing railing and there would not be a requirement to upgrade it at this time. He added that the Building Code does not apply to the pier. Mayor Pro Tom Hill agreed that the Coastal Commission could dictate exactly what the City could or could not do, and expressed a preference to minimize their involvement. Council Member Gardner commented on the plan for Big Canyon to deal with the selenium 'issue, but an agency started making demands so the City stepped back. She stated that the City could do the same if the Coastal Commission started making unreasonable demands. She added that, if the City were to base its decisions on what other agencies may or may not do, it eliminates a lot of creativity. Council Member Henn requested and received confirmation from Building Manager /Chief Building Official Jurjis that demolishing the building would involve the Coastal Commission. Community Development Director Brandt added that, if the City were to go forward with a demolition permit from the Coastal Commission, she would recommend including what the City's proposed use of the pier would be so the Coastal Commission could review the entire package. There would, probably be conditions attached to the ultimate Coastal Development Permit (CDP). Council Member Henn noted that San Francisco is not subject to Coastal Commission jurisdiction. He indicated that he would like to see if the City can develop a better understanding of how the Coastal Commission could restrict programming on the pier. Community Development Director Brandt pointed out that the structure could be remodeled without a CDP. She added that, if Council is interested in looking at a demolition option with creating a flex space opportunity, staff could discuss it with Coastal Commission staff to get initial feedback from them and return to Council with additional information. Council Member Henn suggested looking at recent examples where the Coastal Commission has weighed in on programming uses. Mayor Curry commented on the possibility of an interim use. Jim Mosher stated that there was no written staff report on the matter and addressed financial information provided. He commented on returns and reliance on sales tax revenue. Council Member Henn stated that be would like to better understand demolishing opportunities, Volume 61 - Page 367 City of Newport Beach City Council Study Session November 26, 2013 possible programming, and whether the City can get any reasonable guidance regarding programming restrictions for an empty pier. He also requested information regarding recent actions by the Coastal Commission on similar decisions. City Manager Kiff commented on Coastal Commission concerns regarding providing access to disadvantaged communities in terms of their ability to fish. He confirmed that staff can follow up and return to Council with additional information. 4. VISIT NEWPORT BEACH, INC. (VNB) AND NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT (TBID). [100 -20131 Public Information Manager Finnigan provided a PowerPoint presentation to discuss background, capacities under which VNB serves the City, composition of the NBTBID, use of money generated, the Transient Occupancy Tax (TOT) Agreement, details of the NBTBID proposal, and TBID members. In response to Council. Member Gardner's questions, Public Information Manager Finnigan stated that the TBID cannot be renewed until it has expired. She noted that, because there is interest in joining the TBID by a new member, member hotels would like to move the expiration timeline up in order to begin the renewal process immediately. Council Member Petros reported that the City has elected to share TOT revenues with VNB at 18% and wondered if other cities also share the TOT. Gary Sherwin, CEO of VNB, reported that this practice is different in every city. He reported that the City of Anaheim created a TBID and joined forces with the City of Garden. Grove, and explained that their TOT would be allocated to infrastructure, specifically the Anaheim Convention Center. He added that the national average is 21 %. Mr. Sherwin introduced members of the Executive Committee and provided a presentation to discuss the background and provide an update on the TBID. He also discussed the TBID Return on Investment (ROI), prior year comparisons, TBID renewal, .request .for extending the term of the TBID Agreement, request for an additional increase in assessment and arts and culture in the City. In response to a question from Council Member Selich regarding ROI, Mr. Sherwin reported that the organization was able to double its sales force, expand its sales reach, and offer more sales missions to rapidly increase sales efforts. He added that the TBID focuses on group sales. John Lambeth, Civitas Advisors, Inc., noted that not all TBIDs include all the hotels, there are different rates for large and small hotels, and some TBIDs involve zones. Debbie Snavely, Chairperson for Newport Beach and Company and General Manager of the Newport Beach Marriott Hotel and Spa, presented details of the request and noted. that this is a voluntary assessment program which will be used to help further the growth of the meetings and conference industry in the City. She noted that the TBID gave them the resources to compote with the City of Los Angeles for the Bowl Championship Series business. She stated that the TBID is critical to their success and brings a higher quality business into the City. She added that if the hotel community believes that it is not receiving an ROI with the TBID, it will be disbanded. Daniel Kuperschmid, General Manager of the Hyatt Regency in Newport Beach, urged Council to support their proposal. He addressed a recent renovation of their hotel and believed that VNB can help them through the TBID. He commented on the fierce competition being faced by the industry and stated that the voluntary assessment will help in finding new business. Volume 61 - Page 368 City of Newport Beach City Council Study Session November 26, 2013 Andy Theodorou, Vice President and General Manager of the Newport Dunes Waterfront Resort, urged Council to support the proposals and noted that he works with meeting groups to develop off-site events. He commented on opportunities offered by the TBID, noting that it does not cost the City anything. In response to Council Member Gardner's question, Mr. Sherwin explained the various elements of the groups associated with VNB and their respective governance, responsibilities and tasks. Additionally, he explained the rationale for requesting renewal of the NBTBID for a 10 -year term. Council Member Selich commented on the assessment and TOT for other cities, and asked about increasing the assessment while still staying competitive in the marketplace. Mr. Sherwin explained that the City would remain competitive at 14 %. City Manager Kiff stated that the City is in good financial shape but brought the issue up as a concern in looking ahead. Council Member Gardner expressed concerns with renewing the term for 10 -years as it would be tying the hands of future Councils. Additionally, she expressed hesitations about making a decision this evening, Jim Mosher expressed opposition to extending the TBID contract more than five years at a time as future Councils may wish to revisit this or consider other alternatives. Additionally, he expressed support for not increasing the assessment by 1% for TBID activity as future Councils may choose to increase the tax to defray costs of providing City activities to support visitors. He referenced the Coastal Access Guide to Newport Beach and noted that VNB did not produce it. Be stated that the TBID is 100% dedicated to selling rooms and meeting space. He suggested appointing a Council Member as a full voting member on the governing board that oversees VNB and the TBID. He added that it has been many months since the TBID has held a public meeting. Mayor Pro Tom Hill reported that TOT makes up a significant amount in the General Fund and that this is done because it makes money for the City and community. He stated that the group would not risk being competitive and that their task is to fill the City's hotel rooms. He agreed with the proposal to increase the assessment by 1% and noted that planning is on a longer horizon. He agreed with extending the term to 10 -years and supported adding an additional hotel. Council Member Henn noted that the action item at this time is to begin a process and requested information about the next steps. Public Information Manager Finnigan noted that the action item on the evening agenda is to end the TBID's term in January 2014 so that it can be renewed as of February 1., 2014. If Council decides to move forward, staff would bring the item back at the next meeting to begin the renewal process. City Attorney Harp noted that staff needs Council's direction so that it can begin the process. Discussion followed regarding extending the term to 10- years, but it was noted that the VNB contract can be cancelled with a one-year notice. Council Member Henn indicated that he is in favor of moving forward with the matter and addressed benefits to the public, noting that the City will benefit by getting more TOT. He addressed the $160,000 contribution to the City's arts and culture program, and noted that it is an investment in the City to improve arts and cultural programming and facilities which will be beneficial to all. He indicated that he will support the proposal. Mayor Curry commented on the importance of TOT revenues to the budget and the services that the citizens of the City enjoy and is essential to the City's success. He stated that he supports the proposals. Volume 61 - Page 369 City of Newport Beach City Council Study Session November 26, 2013 Council Member Gardner stated that she had wanted a fuller discussion, and due to this discussion will not be pulling the item. Council Member Selicb agreed with the need to market in order to fill hotel rooms, but expressed concerns regarding increasing the assessment and its effect on competition. Council Member Petros expressed support, noting that there is a multiplier effect to each dollar spent and the revenue that comes back. He added that it is not a question of occupying the field over 1 %, but rather it relates to getting the best revenue stream out of the hospitality group. By virtue of encouraging group sales, he believed that the City will see a higher revenue stream. He further addressed the term and the offer of $150,000 towards the City's arts and cultural programs. Mayor Curry believed that the City can live within the revenues that it has. Council Member Henn commented that the City should want to have a TBID since most of the hotels are governed by large corporate organizations generally headquartered somewhere else and who often make decisions that could have impacts on a local level. He stated that he likes the idea of a TBID to reposition decision- making to the local level. III. PUBLIC COMMENTS INCLUDING PUBLIC COMMENTS ABOUT ITEMS ON THE CLOSED SESSION AGENDA City Manager Mff reported that tonight's meeting will be Municipal Operations Director Harmon's last week with the City, expressed, his appreciation for his service, and wished him the best in his retirement. Mayor Curry commented positively on Municipal Operations Director Harmon's service, his efficiency in running his department, and thanked him for all the work he has done. Council Member Selich commented positively on Municipal Operations Director Harmon's service and responsiveness, and wished him well in his retirement. Council Member Gardner expressed her appreciation to Municipal Operations Director Harmon, Mayor Pro Tern Hill commented on Municipal Operations Director Harmon's service and thanked him for his attention and care for staff. Council Member Henn agreed with the previous comments and believed that the City is fortunate to have its staff. He expressed appreciation to Municipal Operations Director Harmon for his service, decisions and management of outsourcing, as well as a high level of responsiveness. Council Member Petros expressed hie appreciation to Municipal Operations Director Harmon, noting that the qualities of a manager are reflected in the staff. He commented positively on his staff, noting it is a direct reflection on him. fie thanked him for his service. Municipal Operations Director Harmon thanked Council for its support, help and advice. Jim Mosher commented on claims made regarding governmental involvement in business and on travelers flying into John Wayne Airport (JWA) from Mexico. He stated that he finds it hard to believe that JWA had to add 990 full -time new personnel to manage four additional flights. Mayor Curry commented on the creation of jobs that bring people into the community Volume 61 - Page 370 City of Newport Beach City Council Study Session November 26, 2013 City Attorney Harp reported that Council will recess into Closed Session and read the items to be discussed during Closed Session as listed on the Closed Session agenda. 1V. ADJOURNMENT -Adjourned to Closed Session at 6:07 pan. The agenda for the Study Session was posted on November 21, 2013, at 4:00 pan, on the City's website; on November 21, 2013, at 4:20 p.m. on the City Hall Electronic Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive; and on November 21, 2013, at 4:10 p.m. in the Meeting Agenda Binder located in the entrance of the City Council Chambers at 100 Civic Center Drive. - t rw&� Recording Secretary Volume 61 - Page 371