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HomeMy WebLinkAbout01 - Minutes 10-25-99 Study Session & Regular MeetingCITY OF NEWPORT BEACH City Council Minutes DRAFT Study Session October 25, 1999 - 4:00 p.m. INDEX Present: Adams, Glover, Ridgeway, Noyes, Mayor O'Neil Absent: Debay & Thomson (excused) 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Council Member Glover asked for clarification on Item 3, Santiago Drive Speed Limit. She noted the list of key actions in the Expanded Santiago Drive Implementation Plan, which included the development of a comprehensive traffic calming program to be used throughout the City. Council Member Glover stated that such a program would take four to five years to develop and she did not remember it being a part of the Council's action at the previous meeting. Public Works Director Webb stated that the • concept of the program was to put together a list of the items that could be used for traffic calming, including the criteria that would be used to evaluate various neighborhoods, if the need arose. He clarified that this would provide Citywide criteria and would not include actual studies of individual neighborhoods. City Manager Bludau read from Volume 53, Page 19 of the September 27, 1999, minutes, and stated that the motion does include direction to proceed with the Santiago Drive Implementation Plan. Council Member Glover confirmed with City Manager Bludau that the Citywide program would not interfere with the Santiago process. Council Member Adams stated his intent in making the motion was to develop a comprehensive list of traffic calming measures, including when and where they are appropriate. He stated that this would provide criteria for when other parts of the City are looking for traffic calming measures. He added that the most important part of the motion was to enact measures in the Santiago Drive area that would be appropriate for other similar streets in the City, and not give the area special treatment. Referring to Item 10, Agreement for Construction of Improvements at 3619 Ocean Boulevard, Council Member Ridgeway asked why only 50% of the estimated cost of the improvements is being set -aside in sureties. Public Works Director Webb stated that the improvements are not entirely offeite, and that the retaining wall is being built in order to allow the structure to be occupied. City Clerk Harkless clarified for the City Council that for Item 15, Appointments to the Harbor Quality Citizens Advisory Committee, the • District 1 appointment is Nancy Gardner, not Susan Gardner as indicated on Volume 53 - Page 33 City of Newport Beach Study Session Minutes October 25, 1999 INDEX the agenda. 2. MARINAPARK HOTEL PROPOSAL. Marinapark Hotel Proposal City Manager Bludau stated that the item is before the City Council because (73) the City received a development proposal from Sutherland Talla Hospitality, and he felt that a Study Session would be the appropriate way to introduce it. City Manager Bludau stated that his intent is for the City Council to focus on the policy issues and the process for looking at the proposal, rather than the details of the proposal itself. He stated that, for this reason, the staff report includes information on the background and use of the property, as well as the status of the current leases. City Manager Bludau referred to the information in the staff report about the mobile home park, the American Legion, City Council Policy F -7 (Income Property), the Marinapark Revenue Study, and the history of the prior Council authorizations and action by the City regarding the property site. He also noted the six possible alternatives listed in the staff report that the Council might want to consider. Stephen Sutherland, Principal Partner, Sutherland Talla Hospitality, stated that he has spent ten months looking at options for resort development on the Marinapark site. He stated that the proposal submitted to the City describes a redevelopment of the property into a 156 -room five star resort to be operated by Regent International Hotels. Mr. Sutherland stated that he was available to answer any questions. Tom Hyans, Central Newport Beach Community Association ( CNBCA), stated that he spoke with Mr. Sutherland regarding the proposal in July. He stated that the CNBCA has, for years, supported the long -term renewal of the American Legion and mobile home park leases. He stated that the CNBCA has reviewed and discussed the conversion of the property to public use for recreation, such as described in the Marinapark Planning Study dated June 20, 1972, but has never adopted a policy to support the conversion of the property to full recreational use. The CNBCA also opposes the increase of hotel capacities and new hotel construction within its boundaries or near the beach or other recreational areas of the Peninsula. Mr. Hyans added that the CNBCA also opposes any change in use in the City -owned area between 15th and 191h Streets, on the bayside of Balboa Boulevard. He stated that he personally remembers that Sections D and E in the mobile home park leases, as mentioned in the staff report, were included only to circumvent liability for compensation to the lessees. He concluded by stating that he feels that the proposed project location would upset the fragile balance of the residential and public neighborhoods in a negative way. Paul Curtis, Commander, American Legion Newport Harbor Post 291, stated that many years ago, the American Legion traded a piece of property with the City for the lease they currently have. He stated that, although he recognizes that the current City Council may not be legally bound by the terms and conditions of the original transaction, he wanted to present the American Legion's position. Mr. Curtis stated that Post 291 has 2,000 Volume 53 - Page 84 • • City of Newport Beach Study Session Minutes October 25, 1999 members, a ladies auxiliary with 503 members, the Sons of the American Legion with 350 members, and the American Legion Yacht Club with 766 members. He stated that the Post attracts quality members and is the second largest post in the State of California. He stated that the Post was recently honored as being the most generous Post in giving to the needs of disabled veterans, and that they strive to be a good neighbor in a number of ways. Mr. Curtis mentioned the fundraisers held at the facility, the sharing of the use of the facility, the hosting of disabled veterans who are otherwise bedridden, the Old Glory Character Boat Parade, the law and order program, and the sailing program for the visually impaired. Mr. Curtis asked that the City Council commence negotiations for the long -term renewal of the American Legion lease at the current location. He concluded by stating that Post 291 is ready to work with the City in creating a more desirable community. Val Skoro, 1601 Bayadere Terrace, Vice Chairman, Parks, Beaches & Recreation Commission (PB &R Commission), stated that in October of 1997, the PB &R Commission voted to recommend to the City Council that the area, including Marinapark but excluding the American Legion, be used for recreational purposes at the expiration of the leases on the site. He said he understands that the City needs to generate revenue, but he wanted to point out that the PB &R Commission has provided its recommendation on the matter. • Peter Tarr, P. O. Box 2231, Newport Beach, stated that the Peninsula and the West Newport areas are already crowded areas and difficult to access. He stated that the upcoming lease expirations provide the City with the opportunity to provide additional public access to the bay and the recreational facilities. He stated that he believes that the Girl Scout House and the American Legion should be left at the site. He added that he does not feel that a hotel is an appropriate use of the site due to the present traffic situation, and could be placed elsewhere on the Peninsula. Mr. Tarr concluded by stating that eliminating public access to the area would be a poor decision. Cary Lowe, Attorney, Jenkens & Gilchrist, 12100 Wilshire Blvd., representing the Marinapark Homeowners Association, stated that the Association recognizes that the City will consider other uses for the site. He stated, however, that he's surprised with the process that is taking place. Mr. Lowe stated that until there is a resolution of the possible tidelands status, its questionable about what uses will be permitted. He said that the policies of the State Lands Commission and the Coastal Commission would disallow an exclusive luxury hotel on the site with beach access limited to guests of the hotel, if any of the site is determined to be tidelands. Mr. Lowe stated that, in the meantime, it does not justify consideration of the current proposal, which is only showing pretty pictures and no backup regarding financial commitment. He added that the City's own policy provides for a competitive open bid process when looking at a proposal for leasing City property. He stated that he also foresees strong environmental opposition to the hotel proposal. He said that it is critical to decide what to do with the current tenants, regardless of what use of the site is decided upon. He Volume 58 - Page 35 City of Newport Beach Study Session Minutes October 25, 1999 INDEX suggested extending the leases for the current users of the property. Mr. Lowe concluded by stating that the City can certainly continue looking at alternatives for the site, but it should table any particular focus on the hotel proposal. Council Member Ridgeway confirmed that the City cannot take any definite action for the site until the determination is made by the State Lands Commission, but he asked Mr. Lowe why the City wouldn't want to request proposals from all of the current lessees. Mr. Lowe responded that a broader evaluation of future uses for the site is not a waste of time, but it must be recognized that it all depends upon what the State Lands Commission decides. He additionally disagreed with the staff report's reference to residential use not being allowed at the site if it is determined to be tidelands, and said there are other locations in the state that have mobile home parks on similar trust properties. He said the issue is how the public access is maximized on these lease trust lands. Council Member Ridgeway stated that he had hoped the current meeting would only consist of a presentation on the historical and current status of the property. He confirmed with Mr. Lowe that he feels the City should look at proposals from the current lessees. Council Member Ridgeway said that considering proposals while the State Lands Commission is making its determination helps to reduce the uncertainty of what will happen to the property in the future. Mr. Lowe agreed and suggested that the current leases be extended for that reason. He said that the Association will want to participate in the broader look at uses for the site. Joanne Walker, 307 Balboa Island, stated her concern for any project that would bring more people from outside the City onto the Peninsula when it is already so overcrowded. She stated that Newport Beach is a beautiful place and should be more residential - friendly. She said that she would be willing to pay higher taxes to save her privacy and to keep the streets and beaches from being overcrowded. Ms. Walker stated that the current uses at the site should remain and increased revenues should be looked for elsewhere. John McDaniel, 1770 W. Balboa Blvd., stated his opposition to a hotel being built on the American Legion site. He said there is a lot of history at the American Legion and it honors the people who served our country in war. He said the location includes a memorial listing all the members who have been given the Congressional Medal of Honor. He said the site also includes the American Legion Yacht Club, which is the only one in the world and has been recognized by the Southern California Yachting Association as the Yacht Club of the Year, four of the last five years. He said the American Legion has been a good neighbor and prior City Councils have recognized its importance. He said it is unacceptable to move the American Legion from its current site. Martha Durkee, Balboa, stated that if the proposed hotel is constructed, it will be at a cost to the Newport Beach taxpayers and residents. She stated that the playground, the tennis courts and the bay beach would become unavailable to the public. She said that the mobile home park tenants have Volume 63 - Page 36 • 0 Ll City of Newport Beach Study Session Minutes October 25, 1999 INDEX offered to pay higher rent, while keeping the area clean, welcoming the public's use of the beach, having a low crime rate and adding few car trips to the area's roadways. She said that the American Legion has offered their site for public meetings and has been a good member of the community. Ms. Durkee expressed her frustration with the traffic complaints in the City and the need to welcome the visitor to the City, while forgetting the residents. She concluded by saying that facilities that serve the citizens should be considered as being the best use of the site. She said that a hotel won't honor our veterans or provide any service to the residents. Stewart Berkshire, 1770 W. Balboa Blvd., stated that he has been involved with the issue since 1992 or 1993, when the renewal of the mobile home park lease was discussed. He said that the lease negotiated in 1985 was at fair market value, with provisions for increases each year in connection with the cost of living. He stated that, two years ago, the residents offered to enter into a new lease with the City. And, the residents, at their own expense, conducted an analysis of rental properties of mobile home parks around the bay and determined fair market value. He said that nothing has been done since, pending the decision of the State Lands Commission. He said that the Keyser Marston study concluded that a hotel would produce the most revenue to the City for the site, per square foot. Mr. Berkshire stated that using square feet is misleading and a statistical lie. He concluded by stating that the income to the City from the mobile home park lease is guaranteed, and not dependent on the economic success of an individual enterprise. Council Member Noyes asked about the rate increase offered by the mobile home park residents. Mr. Berkshire explained that he personally offered the City $5,000 in August or September of 1997, if the City would start negotiations. He said that the fair market study done by the residents concluded that $5,000 was the additional rent the City would realize per year if the mobile home park rents were brought up to fair market value. He further confirmed that the rent offered by the residents at the time would've brought the City $1 million per year. Mildred Litke, Harbor Island Drive, stated that she sees several problems with a hotel being built at the site. She said that the number one issue is traffic and parking, which would be made worse by a hotel. She said that a hotel is not a viable economic option, and cited the four properties that she'd contacted earlier in the day and their high rate of vacancies, including some which were half empty. She said that the mobile home park revenue is guaranteed. Ms. Litke stated that there is also the philosophical issue in deciding if the City wants to cater to its residents or become a commercial entity. She said that she would like to continue enjoying the bay beach. Mr. Sutherland responded to several of the statements made by the speakers. He stated that he also contacted several hotels in the area, and said that the Four Seasons, with room rates beginning at $390 per night, was 100% occupied for the upcoming weekend. He stated that the Ritz Carlton, which he considers would be the proposed hotel's main competition and charges $650 per night for a standard room with ocean view, is also . 100% occupied for the upcoming weekend. He said that the Hyatt Regency Volume 58 - Page 37 City of Newport Beach Study Session Minutes October 25, 1999 INDEX was also nearly full the weekend prior. Mr. Sutherland stated that he has met with representatives of the American Legion and is very understanding of their situation. He has offered to negotiate with them in moving them to a different location, which would provide a structure, either existing or new, of at least the same size as the current structure and would also be located on the waterfront. Mr. Sutherland stated that the mobile home park has only fifteen Newport Beach residents that live there fulltime. He said that the property has the ability to generate at least $2.8 million, annually. He said a hotel could provide funds that could be used to enhance the services offered by the City. Mr. Sutherland also clarified that the proposed project would rebuild the tennis courts, double their number and that they would remain available for free use to all residents of Newport Beach. He said that the existing playground would be moved to a site adjacent to the Girl Scout House, and it also would be improved, enlarged and remain open to the public. He concluded that the proposal does benefit the residents of Newport Beach, it maintains access to the property and provides revenue to the City. He asked that the City Council approve Option #2 in the staff report, analyzing and considering the Sutherland Tells proposal. Virginia Herberts, Balboa Peninsula Point Association, stated that the Association's board supports the continuation of the current leases and uses . of the property. She stated that they are opposed to the use of the property for a hotel. Council Member Ridgeway clarified with City Manager Bludau that the City Council is only being asked to provide direction at the current meeting, and not take formal action. City Manager Bludau stated that the City Council could decide to take more definite action, if it desired. Council Member Ridgeway expressed his concern regarding prior City Council discussions and the decision to not take action at study sessions. Council Member Adams stated that he did not see any problem with the City Council providing staff with guidance, but that he would be concerned with making policy decisions at study sessions. He added that he was uncomfortable considering the current proposal on its own, and that the State Lands Commission ruling needs to comes first. Council Member Adams said that the issue is one of land use, not just of revenue. He stated that he thinks the City should first decide what land use would be appropriate for the site and then solicit proposals for that type of use. He said the process should include the Planning Commission, and hearing its recommendation for the land use, or uses, on the site. Council Member Noyes stated that everything will still be held up until the State Lands Commission makes its ruling. He suggested that maybe the City should focus on receiving that ruling first. Council Member Ridgeway disagreed with Council Member Adams that the 1 • Volume 53 - Page 88 • City of Newport Beach Study Session Minutes October 25, 1999 INDEX issue is one of land use. He stated that he sees it as a policy decision issue, and disagrees that the Planning Commission should make the land use recommendation. Council Member Ridgeway stated that he has been attempting to clean up the Peninsula while, at the same time, rejuvenating it. He said that he doesn't feel that a hotel in that location would generate the kind of income suggested in the proposal. Council Member Ridgeway thinks that proposals from all lessees should be requested and more than revenue should be considered, although he also understands that the City needs to look at ways to create income. He said the City Council will eventually have to make the tough decision of what to do with the property, and he has had several people ask that the City Council do what's best for the Peninsula. He added that since there is resistance to two -story mobile home parks, the residents of Marinapark should make their proposal on the basis of a single story mobile home park. He said that all of the various land use options need to be looked at, and the people who will be affected by the decision need to be considered. He concluded by stating that it is a very complicated issue. Council Member Glover agreed with Council Member Ridgeway's comments about putting the issue into local context and how it affects the residents on the Peninsula. She stated that the Coast Highway/Newport Boulevard intersection is the heaviest traveled intersection in the County and in her district. She stated that for this reason, her interest in the Peninsula and the type of traffic that it attracts has increased. Council Member Glover said • that everyone always complains about too much traffic and not enough parking, but that she won't know what impact a hotel would have until all of the facts are presented. She said that the City Council must consider revenue when making these types of decisions. She suggested that the City Council direct staff to proceed with Options 2, 3, 4 and 5 in the staff report. She said this will give everyone the right to bring forward a proposal, and give the City an opportunity to see what the effects of the various options would be. She said that she's not certain that the decision by the State Lands Commission will greatly affect what is decided for the property and that the Coastal Commission is concerned about public access to the beaches, which a hotel property could provide. Mayor O'Neil stated his support for Options 2, 3, 4 and 5; which would direct staff to analyze and consider the Sutherland Talla proposal, request proposals from other lessees, request proposals from other potential developers, and consider them all together. Mayor O'Neil also agreed that the State Lands Commission issue should possibly be agendized, but pointed out that the City has already gone on record to support the uplands interpretation. He agreed further that residential uses have been allowed on tidelands and could be done. Mayor O'Neil concluded by stating that there is a lot of flexibility in what can be done and the City should look at all the various options, and then make the decision based on what is best for the community and what is beat for the City in the future. He said it may be determined that what is currently at the site may remain, but the City won't know if that's the best choice until all of the possible uses have been looked at. He said that if the State Lands Commission determines that the site is . tidelands, it may end up in court. He said the issue is very confusing and he Volume 53 - Page 39 City of Newport Beach Study Session Minutes October 25, 1999 INDEX is totally open minded about what happens at the site, whether it is public open space or providing more revenue to the City. Mayor O'Neil stated that while the various proposals are being looked at, he feels that the mobile home park lease should be extended for one year as is being proposed for the American Legion at the evening meeting (Item 13). He knows the final decision on the property will be a tough one, as it always is when trying to balance economic interests with quality of life. City Manager Bludau confirmed with Mayor O'Neil that the Sutherland Tells proposal would be analyzed and considered with all of the other proposals, after they come in. He continued by stating that staff will request proposals from other lessees, as well as other potential developers. S. BALBOA PIER PARKING LOT REDESIGN. C- 3209(A) Balboa Pier Parking Public Works Director Webb introduced Tony Brine, Senior Civil Engineer, Lot Redesign to give the presentation on the process that the City has gone through in (38) looking at the Balboa Pier parking lot area. Mr. Brine stated that he would provide a summary of the report that was prepared by Austin -Foust Associates. He stated that the goals of the study were to look at the existing parking lot and determine if a redesign could be done to improve vehicle circulation and pedestrian access. He stated that the goals also included determining if the number of parking spaces could be increased, if a bus layover area could be provided, and if the landscaping could be improved. • Mr. Brine stated that the process incorporated three public workshops to solicit input from residents and business owners in the Balboa area. He stated that seven alternative plane were developed and reviewed, and that he would go through each of the alternatives. Mr. Brine provided an overhead illustration of the existing parking lot plan, and pointed out the inefficient use of space. He then showed Alternative 1, which was recommended as a result of a study done in 1991. He said there is a net gain of 84 parking spaces with Alternative 1. Council Member Glover confirmed with Mr. Brine that one of the goals of the study was to look at potential ways to increase the number of parking spaces in the lot. It was further confirmed that the parking spaces, both inside and outside the lot, would be available to visitors of both the beach and the village area. Council Member Ridgeway stated that he has read the staff report, that the matter has been reviewed by PROP (Ad Hoc Committee to Promote the Revitalization of the Balboa Peninsula) and that he favors looking more closely at Alternatives 1 and 6A. He stated that unless any of the council members disagree, he did not need to hear the history of Alternatives 2, 3, 4 or 5 at the current meeting. Council Member Noyes agreed and stated that it has been a thorough two- 1 • Volume 53 - Page 40 • City of Newport Beach Study Session Minutes October 25, 1999 year process in INDEX Assistant City Manager Wood stated that the BPPAC (Balboa Peninsula Planning Advisory Committee) study resulted in recommendations to increase the parking spaces in the Balboa lot to offset the spaces that may be lost in other nearby locations to accommodate landscaping improvements. She said this would assist the City in its presentations to the Coastal Commission. Council Member Glover stated that nothing is accomplished by merely increasing parking spaces on the Peninsula, but can understand the Coastal Commission reason. Council Member Noyes confirmed that PROP has been sensitive to just increasing parking on the Peninsula. Mr. Brine stated that an issue that did come out of the public workshops was if landscaping opportunities in the Balboa lot should be replaced with additional parking spaces. He said that the Parking Summary information in the Alternative 1 diagram shows a net gain of 49 parking spaces but an additional 35 could be obtained, for a total of 84 as mentioned earlier, if the landscaping opportunities were not chosen. Mr. Brine said that the consensus in the public workshops was to include the landscaping opportunities. He said that Alternative 1 was one of the alternatives favored • in the workshops. He said it provides for bus layover, which would include space for tour buses as well as OCTA (Orange County Transportation Authority) buses. He said the space would be outside of the pay lot and large enough for four to six buses. Mr. Brine then displayed Alternative 6A and stated that it was another alternative favored in the public workshops. He said it was developed as part of a concept submitted by the Theatre Arts Center and increases the metered parking lot area to provide for more parking outside of the pay lot, which would service the village more. He said the alternative also provides a bus layover area. Mr. Brine stated that the cost of Alternative 6A would be $663,000. He said that existing funding in the budget for the project is $430,000, and that additional funds may be available in the offstreet parking fund. He added that the net gain in parking spaces with the alternative is 40 spaces, if the landscaping opportunities were not chosen. Council Member Noyes asked what the timeframe would be for completing the project if Alternative 6A is chosen. Public Works Director Webb stated that the design process and Coastal permit process would have to be done first. He said that construction could begin in the Fall of 2000, with completion prior to the following summer. Council Member Noyes stated his concurrence with Council Member Ridgeway's choice of Alternative 6A. Council Member Adams confirmed with Mr. Brine the location of the pay booth in the lot. Mr. Brine stated that Alternative 6A currently provides for Volume 58 - Page 41 City of Newport Beach Study Session Minutes October 25, 1999 a single exit lane, but that a traffic queuing study was not done. He said that there is room to add a second exit lane, if desired. Council Member Adams suggested that two exit lanes be provided. Council Member Adams inquired about the absence of a stop light at Washington Street and the reason for having a stop light at Palm Street. Transportation/Development Services Manager Rich Edmonston explained that the signal at Palm Street was put in because of the high rate of pedestrian accidents in the area. He added that the stop light at Main Street was put in due to the high pedestrian traffic, which had previously limited vehicle movement. Council Member Adams asked if the buses in the bus layover area would be allowed to idle. Mr. Brine stated that the intent would be to disallow idling, and is one of the reasons for adding the bus layover area. Council Member Adams asked if the City could prohibit the idling. He cited examples of how obnoxious the noise and smell can be, and said he could not support the plan if it allowed the buses to idle. City Manager Bludau said that he knows of other cities that do cite for idling buses. Mr. Brine stated that the residents favored adding the bus layover area because it may stop the buses from parking in front of their homes. Council Member Noyes added that the idling is currently done because the buses are parked illegally. Mr. Brine said the buses also idle to keep the air conditioning going. Mayor O'Neil summarized by stating that the direction from the City Council is for staff to proceed with Alternative 6A. City Manager Bludau confirmed that the City Council was recommending that the alternative be with the additional 40 spaces option. Council Member Ridgeway pointed out for Council Member Adams that all of the alternatives include a bus layover area. Virginia Herberts, Balboa Peninsula Point Association, stated that the Association favored Alternative 6A because it provided more parking closer to the village and it moved the buses away from the condominiums and storefronts. Council Member Noyes requested that staff also include some type of action in the plan to deter the buses from idling. Mayor O'Neil confirmed with the members of the City Council that there was concurrence in directing staff to proceed with the preparation of plans, specifications and engineers final estimate for redesigning the Balboa Pier parking lot in general conformance with Alternative 6A. ]PUBLIC COMMENTS — None — 6:00 p.m. Volume 58 - Page 42 INDEX • • City of Newport Beach Study Session Minutes October 25, 1999 E The agenda for the Study Session was posted on October 20, 1999, at 3:10 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk L Recording Secretary Mayor i Volume 53 - Page 43 INDEX CITY OF NEWPORT BEACH 0 City Council Minutes Regular Meeting DRAFT CLOSED SESSION- 6:00 p.m. CLOSED SESSION REPORT PRESENTED - None. RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING ROLL CALL Present: Adams, Glover, Ridgeway, Noyes, and Mayor O'Neil Absent: Thomson and Debay (excused) Pledge of Allegiance - Mayor O'Neil. Invocation by Pastor Warren Olson, Mariners Church. Recognition of Edward Karagozian as the recipient of the 1999 Jeffrey Stern Community Preparedness Award. Presentation of the Certificate of Achievement for Excellence in Financial Reporting for the City's 1997 -98 Comprehensive Annual Financial Report to the City of Newport Beach and an Award of Financial Reporting Achievement from the Government Finance Officers Association (GFOA) of the United States and Canada to Dick Kurth, Deputy Administrative Services Director. Council Member Ridgeway presented Mayor O'Neil with a T -shirt and an award from the Balboa Performing Arts Theater Foundation for his assistance during the 6K run that was held last Saturday. 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 Ridgeway requested that the Master Plan for Balboa Village be discussed at a future study session. • Mayor O'Neil announced that the Friends of the Library needs used books to resell. The books can be deposited at any library branch and donations are tax deductible. CONSENT CALENDAR READING OF MINUTES /ORDINANCES AND RESOLUTIONS 1. Removed at the request of Council Member Noyes. 2. READING OF ORDINANCES AND RESOLUTIONS. Waive reading in • full of all ordinances and resolutions under consideration, and direct City Volume 53 - Page 44 • • City of Newport Beach City Council Minutes October 25, 1999 to read by title only. 3. SANTIAGO DRIVE SPEED LIMIT (contd. from 9/13/99). Adopt Ordinance No. 99 -25 amending Chapter 12.24 (Special Speed Zones) of the NBMC to establish a speed limit of 30 mph on Santiago Drive between Irvine Avenue and Tustin Avenue; and direct staff to proceed with the expanded Santiago Drive implementation plan. 4. AMENDMENTS TO THE ZONING CODE (AMENDMENT 892) THAT RELATE TO THE DEFINITION OF TERMS, TERMS AND CROSS - REFERENCES IN THE LAND USE REGULATIONS SCHEDULES, ESTABLISHING WATERFRONT REAR YARD SETBACKS, REGULATIONS ON BAY AND GREENHOUSE WINDOWS, THE PARKING OF VEHICLES IN REQUIRED YARDS, SIGNS IN RESIDENTIAL DISTRICTS, AND THE AUTHORITY OF THE PLANNING DIRECTOR TO APPROVE OFF -SALE ALCOHOLIC BEVERAGE OUTLETS AND MASSAGE ESTABLISHMENTS. Adopt Ordinance No. 99 -26. CONTRACTS AND AGREEMENTS 5. Removed at the request of Council Member Ridgeway. 6. AIRBORNE LAW ENFORCEMENT (ABLE) JOINT POWERS AGREEMENT REVISION (C- 3011). Approve the revised Joint Powers Agreement (JPA) between the Cities of Newport Beach and Costa Mesa continuing the existing ABLE program. 7. Removed at the request of Council Member Glover. 8. GRANT HOWALD AND LINCOLN ATHLETIC CENTER BALLFIELD LIGHTING (C -3283) — 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 bonds 35 days after the Notice of Completion has been recorded in accordance with applicable portions of the Code; 4) authorize staff to retain the contractor to change additional lights for Lincoln Athletic Center Field No. 1; and 5) authorize a budget amendment (BA -021) to transfer Park -In -Lieu funds in the amount of $30,000 from Account No. 7021- C5100372 to Account No. 7021- C4120431. 9. JAMBOREE ROAD/EASTBLUFF DRIVE INTERSECTION IMPROVEMENTS — PROFESSIONAL SERVICES AGREEMENT WITH DIAZ- YOURMAN AND ASSOCIATES (GEOTECHNICAL) AND AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT WITH TETRA TECH, INC. (C- 8202). 1) Approve Professional Services Agreement with Diaz- Yourman and Associates Geotechnical Services for geotechnical testing; 2) approve Amendment No. 1 to Professional Services Agreement with Tetra Tech, Inc. for additional design services; and 3) approve a budget amendment (BA -020) appropriating $9,100 to Account No. 7181- C5200421, Jamboree/Eastbluff Improvements from Account No. 7181- C5100070, EIR/Preliminary Plans. Volume 58 - Page 45 N Ord 99 -25 Santiago Drive Speed Limit (85) Ord 99 -26 Amendment 892 Zoning Code (94) C -3011 Airborne Law Enforcement (ABLE) (38) C -3283 BA -021 Grant Howald and Lincoln Athletic Center Bal field Lighting (38/40) C -3202 BA -020 Jamboree Road/ Eastbluff Drive Intersection Improvements (38/40) City of Newport Beach City Council Minutes October 25, 1999 INDEX 10. AGREEMENT FOR CONSTRUCTION OF IMPROVEMENTS AT 3619 EP 99 -257 OCEAN BOULEVARD (ENCROACHMENT PERMIT NO. 99 -257). Encroachment Approve an agreement guaranteeing completion of the public improvements Agreement required with Variance No. 1223 and authorize the Mayor and the City 3619 Ocean Blvd. Clerk to execute the agreement. (65) 11. APPROVAL OF CONSULTANT AGREEMENTS FOR TRAFFIC C -3314 ENGINEERING SERVICES IN CONJUNCTION WITH THE Newport Center NEWPORT CENTER PROJECT. 1) Approve a Professional Services Project Agreement with Austin -Foust Associates, Inc. for updating the traffic model (38) and preparing the traffic study for inclusion in the Newport Center General Plan Update EIR; and 2) approve a Professional Services Agreement with RKJK & Associates, Inc. for project management and traffic engineering services. 12. BALBOA PIER CONCESSION AGREEMENT — RUBY'S C -2326 RESTAURANT GROUP (C- 2326). Continue to the November 8, 1999, City Balboa Pier Council meeting. Concession (38) 13. EXTENSION OF LEASE AGREEMENT WITH AMERICAN LEGION C -1772 POST 291 (C- 1772). Authorize the Mayor to enter into a lat Lease Lease Agreement Amendment that extends the current operating lease with the American American Legion Legion Post 291 for the marina and clubhouse at 215 15th Street for one year Post 291 beginning in March 2000. (38) MISCELLANEOUS ACTIONS • 14. PLANNING COMMISSION AGENDA FOR OCTOBER 21, 1999. Planning Receive and file. (68) 15. APPOINTMENTS TO THE HARBOR QUALITY CITIZENS ADVISORY Harbor Quality COMMITTEE. Confirm Council Member Ridgeway s appointment of Nancy Citizens Advisory Gardner (District 1) and Council Member Debay's appointment of Committee Rob Thomas (District 2). (24) 16. APPOINTMENT TO THE ENVIRONMENTAL QUALITY CITIZENS Environmental Quality ADVISORY COMMITTEE. Confirm Council Member Adams' appointment Citizens Advisory of Richard Rivett as the at -large member (District 4). Committee (24) 17. REPEAL OF CITY COUNCIL POLICY L-18. Repeal City Council Policy Policy 1-18 L-18, Administrative Procedures for Implementing the Traffic Phasing (69) Ordinance. 18. BUDGET AMENDMENT (BA -018) — LIBRARY SERVICES & BA -018 TECHNOLOGY GRANT AWARD OF $84,666. Approve BA -018 to Library Services & appropriate the library grant to various accounts to support the TeenR.ead Technology Grant outreach program. (40/50) 19. BUDGET AMENDMENT (BA -019) FOR CORONA DEL MAR BA -019 REFORESTATION (PHASE III). Approve BA -019 in the amount of CdM Reforestation $57,000 to fund the City portion of Phase III of the reforestation of 40 City (40/44) parkway trees located on the north side of East Coast Highway in Corona del Mar. Volume 53 - Page 46 City of Newport Beach City Council Minutes October 25, 1999 0 20. Receive and file. lyl��1�71�1ti.7 21. HUMAN SERVICES GRANTS FOR 1999 -2000. Authorize the distribution of grants totaling $25,000 from fund #010 -20- 0100 -8254 to various Human Services organizations that serve the Newport Beach community. 22. STAFFING ISSUES. Approve conversion of four part -time positions in Administrative Services to full-time status. Motion by Mayor O'Neil to approve the Consent Calendar, except for those items removed (1, 5, and 7), and noting the correction to Item No. 15 and continuation of Item No. 12. The motion carried by the following roll call vote: Ayes: Adams, Glover, Ridgeway, Noyes, Mayor O'Neil Noes: None Abstain: None Absent: Thomson, Debay ITEMS REMOVED FROM THE CONSENT CALENDAR • 1. MINUTES OF THE SPECIAL MEETING OF SEPTEMBER 18, 1999, ADJOURNED REGULAR AND REGULAR MEETING OF SEPTEMBER 27, 1999 AND THE SPECIAL MEETING OF OCTOBER 4,1999. Council Member Noyes announced that he will be abstaining on the approval of the September 27 minutes because he was absent during those meetings. Motion by Council Member Noves to waive reading of subject minutes, approve as written, and order filed. The motion carried by the following roll call vote: Ayes: Adams, Glover, Ridgeway, Noyes (abstained from the approval of the September 27, 1999, minutes), Mayor O'Neil Noes: None Abstain: None Absent: Thomson, Debay 5. MULTI -YEAR MEMORANDUM OF UNDERSTANDING (MOU) WITH THE NEWPORT BEACH FIRE MANAGEMENT ASSOCIATION (FMA). In response to Council Member Ridgeway's question regarding the compensation adjustments (Item 1), City Manager Bludau clarified that the 12.5 percent is based on the Fire Battalion Chief being the base position and • that this classification would receive a 2.5 percent pay increase pursuant to the Memorandum of Understanding (MOU). Volume 58 - Page 47 III N'. C- 3098/McFadden Farmer Market (38) Human Services Grants (40) Personnel (66) C -2946 Fire Management MOU (38) City of Newport Beach City Council Minutes October 25, 1999 INDEX Motion by Council Member Rideewav to approve the Memorandum of Understanding with the Newport Beach Fire Management Association. The motion carried by the following roll call vote: Ayes: Adams, Glover, Ridgeway, Noyes, Mayor O'Neil Noes: None Abstain: None Absent: Thomson, Debay 7. NEWPORT BOULEVARD (SR55)/PACIFIC COAST HIGHWAY (SRI) C -2886 "ARCHES" INTERCHANGE IMPROVEMENTS (C -2886) — Arches Interchange COMPLETION AND ACCEPTANCE. Improvements (38) Council Member Glover commended Public Works Director Webb and staff for their work on this project. Council Member Ridgeway added that the Arches Interchange project was the largest public works project the City has undertaken and that it was done very smoothly. Motion by Council Member Glover to 1) accept the work and approve the As -Built plans and specifications; 2) authorize the City Clerk to file a Notice of Completion; and 3) authorize the City Clerk to release the bonds 35 days after the Notice of Completion has been recorded in accordance with applicable sections of the Civil Code. The motion carried by the following roll call vote: • Ayes: Adams, Glover, Ridgeway, Noyes, Mayor O'Neil Noes: None Abstain: None Absent: Thomson, Debay PUBLIC COMMENTS Charles E. Griffin, 732 Bison Avenue, showed a video of a flight over the open space areas surrounding El Toro. He indicated that he is promoting the realignment of the runways because they are situated too close together and slope excessively. He suggested realigning the runways along the broad expanse of open space. Russ Niewiarowski, 20102 Kline Drive, stated that he is Mr. Griffin's partner. He indicated that the video is a climax of their efforts to demonstrate the feasibility of an alternative El Toro airport. He noted that no houses in the corridor would be disturbed by this alternative and that this makes a safer and quieter plan. Dolores Otting noted that October has become Breast Cancer Awareness Month in America and passed out an excerpt from a book about breast cancer. She expressed disappointment that only Council Members Thomson and Glover voted against adding recycled wastewater to the water basin. She stated that, even though people do not drink the tap water, people are still bathing in it. She read from the handout that chlorinated shower water releases chloroform, a toxic gas created when chlorine from the chlorination process interacts with the natural organic matter in tap water. Further, that 50 percent of the pollution from water is absorbed through the skin • and that the body absorbs more chlorine from a 15 minute shower in chlorinated water than it does from drinking eight glasses of the same water. Ms. Otting Volume 53 - Page 48 City of Newport Beach City Council Minutes October 25, 1999 reported that many women wit found in shower water. cancer cannot have estrogen, but it is also Ms. Otting noted that Council Member Debay may have a conflict of interest because of her association with the Sanitation District, noting that she receives money for attending meetings and that she voted for the addition of more reclaimed sewage water into the drinking basin. She also expressed concern about term limits and whether council members have the City's best interests at heart since they cannot run for office again. Tom Wall, Orange County Airport Alliance, 2900 Park Newport, Suite 229, reported that the County will release the second of the two environmental impact reports on November 19; they will have 60 days to comment on the document; and then it will go back to the Board of Supervisors for a final vote in May. He emphasized the importance of coordinating the activities of the various airport groups, and expressed his thanks to Council and the public for their support. He stated that the Airport Alliance (along with the Airport Working Group, the Orange County Regional Airport Authority, and County staff and planning agency) have put together a comprehensive and aggressive program for moving the project forward so that the conversion of the El Toro Marine Corp Air Station to a commercial air facility will be completed by 2005. Mr. Wall stated that their plan for the next few months is to continue with the public presentations (10 to 15 a month); seek the membership of businesses, community groups, minority groups, and others who want to build a community- friendly airport at El Toro; maintain a database of supporters; maintain a web site; distribute a monthly newsletter and brochures which provide factual information; and begin the production and distribution of a series of 30- minute cable shows. Mr. Wall indicated that he just came from an El Toro Reuse Planning Authority ( ETRPA) meeting in which Capistrano, Saddleback Valley, and Irvine Unified School Districts are now members. He stated that he found it disheartening that the reason the school districts joined ETRPA was because they perceived there would be a detriment to the learning ability and hearing of the students. However, he pointed out that the Irvine Unified School District operated the marine base's elementary school for 27 years without one concern that there would be a detriment to the learning ability or hearing of any of those students. Mr. Wall stated that the community - friendly airport will produce 70 percent less noise than the marine base produced, and found it hypocritical that a school district would try to convince people that there is a detriment when there is no evidence. PUBLIC HEARINGS 23. 22 CORPORATE PLAZA — A REQUEST FOR PC TEXT AMENDMENTS TO INCREASE THE PERMITTED SQUARE FOOTAGE ENTITLEMENT IN THE CORPORATE PLAZA PLANNED COMMUNITY BY TRANSFERRING APPROXIMATELY 45,000 SQUARE FEET OF EXISTING ENTITLEMENT FROM FASHION ISLAND AND BLOCK 600 OF NEWPORT CENTER IN CONJUNCTION WITH THE CONSTRUCTION OF A NEW OFFICE • BUILDING. Mayor O'Neil opened the public hearing. Volume 53 - Page 49 INDEX Ord 99 -27 Res 99 -70 22 Corporate Plaza/ Amendment 889 (94) City of Newport Beach City Council Minutes October 26, 1999 INDEX Planning Director Temple reported that this application would allow for the construction of one additional office building in Corporate Plaza in the Newport Center. Because there is currently insufficient entitlement in Corporate Plaza to sustain the development, she indicated that The Irvine Company requested the ability to transfer square footage from other parts of Newport Center in order to allow for the construction of the office building. She stated that the transferred square footage is a combination of over 6,000 square feet which currently is assigned to Block 600 of Newport Center, with the balance coming from Fashion Island. She pointed out that the Land Use Element allows for these types of transfers within Newport Center. She indicated that, following a review of the traffic study by the City's Transportation and Development Services Manager, it was determined that the transfer would not create a net detriment to the traffic and circulation system (Primary Finding). The Planning Commission subsequently recommended approval of the transfer and the associated planned community amendments. In response to Council Member Glover's questions, Ms. Temple explained that the square footage being transferred comes from the 6,000 square feet that occupied the Twin Palms restaurant, noting that they transferred retail entitlement from Fashion Island into Block 600 to enable that restaurant to be constructed. Further, about 44,637 square feet will be utilized from Fashion Island so that the same traffic count exists for the office building, based on peak hour traffic generation. Council Member Glover stated that the transfer will create an office building with traffic; however, if it stayed within Fashion Island, there will be retail sales with traffic. This would create a financial offset for the traffic. Council Member Ridgeway asked what unused base in Fashion Island the 44,637 square feet came from. Ms. Temple clarified that it came from approximately 286,000 square feet of unused property from an entitlement that occurred about four years ago. She added that a traffic study, pursuant to the traffic phasing ordinance, and a General Plan traffic analysis were prepared when the entitlement was conducted. Carol Hoffman, Vice President of The Irvine Company, expressed appreciation for the work staff put into the analysis and noted the unanimous recommendation for approval by the Planning Commission. She stated that the request is indicative of the kind of provisions that have been built into the Newport Center zoning regulations and one that they would like to utilize in response to increasing demands for office space. Ms. Hoffman noted that the office building is in close proximity to the retail center and provides employees the opportunity to make purchases at Fashion Island. She stated that their traffic engineer and a representative from the architectural firm are present to answer any questions. She also expressed appreciation for the opportunity to work with the Harbor View Hills Community Association to ensure that there were no lighting impacts. She added that they will continue to work with them during the implementation stage. Council Member Glover emphasized that the new traffic phasing ordinance • gives Council the ability to study each project and make better decisions. In response to Council Member Glover's question, Ms. Temple confirmed that all of the entitlements have been vested through the traffic phasing Volume 53 - Page 50 City of Newport Beach City Council Minutes October 26, 1999 • ordinance. Council Member Glover stated that she is reticent to take square footage from Fashion Island, emphasizing the City's need to provide a continuous revenue stream. She indicated that her inclination is to protect the retail space. There being no further testimony, Mayor O'Neil closed the public hearing. Motion by Council Member Glover to overturn the action of the Planning Commission by denying the request to transfer 44,637 square feet of regional retail square footage from Fashion Island to Corporate Plaza, but approving the request to transfer 6,520 square feet from Block 600 to Corporate Plaza with the supporting documentation related to the Amendment, subject to the Findings and Mitigation Measures as modified by the Planning Commission. Council Member Glover added that the motion is made with the finding that the amendment to transfer development rights from Fashion Island to the Corporate Plaza Planned Community is not consistent with the standards for transfer contained in the General Plan since the potential commercial tax base would be reduced, thereby limiting the City's ability to implement traffic mitigation. She believed this is not in the best interest of the City. The motion died for lack of a second. Motion by Council Member Noves to adopt Resolution No. 99 -70 finding • the transfer of development rights is consistent with the standards for transfer contained in the General Plan; introduce Ordinance No. 99 -27, an amendment to the Corporate Plaza Planned Community, approving a transfer of development rights in Newport Center from Fashion Island and Block 600 (Amendment No. 889), and pass to second reading on November 8, 1999; and sustain the action of the Planning Commission and approve the supporting documentation related to the Amendment, subject to the Findings and Mitigation Measures as modified by the Planning Commission: a) the acceptance of a Negative Declaration; b) a traffic analysis; and c) a parking demand study. Council Member Noyes agreed with Council Member Glover, but indicated that this should be considered an exception and should be looked at much harder in the future. He believed that this General Plan Amendment stems from General Plan Amendment 94 -2(B) (Fashion Island expansion) which was adopted on November 14, 1994, by Council Members Hedges, Sansone, Watt, Hart, Cox, Debay, and Mayor Turner. Council Member Glover stated that one could say that she did not agree with what that Council allowed. The motion carried by the following roll call vote: Ayes: Adams, Ridgeway, Noyes, Mayor O'Neil Noes: Glover Abstain: None Absent: Thomson, Debay 24. PUBLIC HEARING TO CONSIDER THE RESOLUTION OF INTENT TO INITIATE PROCEEDINGS FOR THE REORGANIZATION OF TERRITORY. Volume 58 - Page 51 INDEX Res 99 -71 LAFCO Application/ Reorganization of Territory/ City of Newport Beach City Council Minutes October 25, 1999 INDEX • Mayor O'Neil opened the public hearing. Bay Knolls/ Santa Ana Heights/ Deputy City Manager Kiff stated that the adoption of the resolution starts a Newport Coast and long process that includes notices, mailings, public hearings, a protest Ridge measurement, and more. He reported that, if concluded by July 2000, this (21) would be the City's largest annexation and one of its last. He utilized overheads to review the three proposed annexation areas (Bay Knolls, Santa Ana Heights, and Newport Coast and Ridge). Mr. Kiff announced that the City Clerk created a page within the City's internet site consisting of annexation information/staff reports. He reported that Council Policy D -2 requires the City to review several items when considering potential annexations (Attachment A) and that Exhibit C of Attachment A (Fiscal Impact Analysis) shows the anticipated revenues and expenditures for the three areas. He emphasized that the Fiscal Impact Analysis utilized extensive assumptions and that, from a staff perspective, the annexation is in the City's best interest. Mr. Kiff reported that there are no Terms of Agreements (Attachment B) as yet because the Santa Ana Heights group and the Newport Coast group have asked for specific things. The terms still need addressing and will come before Council prior to the first hearing with LAFCO since they will not hear an incomplete application. He indicated that Rich Miller, the gentleman who will be helping the City process the annexation application, and someone from LAFCO are present to answer any questions. • In response to Mayor O'Neil's question, Mr. Kiff confirmed that a plan to take over the current Irvine Ranch Water District (IRWD) service area is included in the application. However, the application is flexible in the event the City decided not to serve water or provide sewer service and if an arrangement is worked out with IRWD. Russ Niewiarowski, 20102 Kline Drive, stated that 200 residents attended an annexation forum and indicated that he lives in west Santa Ana Heights. He requested Council permission to launch a campaign for the west side to detach from Costa Mesa and submit that request to LAFCO. He indicated that he understands that the annexation is only for east Santa Ana Heights, but that the west side would like to follow his neighbors to remain one united community. He stated that they formed the Santa Ana Heights Advisory Committee to pursue the detachment and believed that they could help to become a stronger voice in the stoppage of the John Wayne Airport (JWA) expansion. Mayor O'Neil stated that he is not sure if Council could indicate support for the detachment because west Santa Ana Heights is not in the City's sphere of influence. However, the City has the discretion to amend the boundaries to include additional areas. Council Member Glover noted that east Santa Ana Heights is surrounded on three sides by Newport Beach and the Bay, and is in the City's sphere of influence. She stated that Costa Mesa is a friendly city and does not want to entertain going into their sphere of influence. She reported that the City is considering annexing Bay Knolls only because the County said the City had to in order to annex the other areas. Volume 53 - Page 52 City of Newport Beach City Council Minutes October 25, 1999 Council Member Ridgeway reported that he owns property in west Santa Ana Heights and that he would need to remove himself from any discussion on west Santa Ana Heights in the future. He requested that the attention be confined to the matter before Council. Robert W. Ashin, 390 Seawind Drive, stated that there are a lot of people in this area that do not wish to be a part of Costa Mesa. He expressed the opinion that Costa Mesa may be a friendly city to Newport Beach, but is not being a friendly city to them now. Further, that many people believe they will be disenfranchised from their ability to oppose the airport expansion if they are included with Costa Mesa. He presented Mr. Kiff with letters indicating the residents' desire to be a part of Newport Beach and their concern that they will not have a voice in opposition to a JWA expansion. Derek Leason, 20342 Cypress Street, believed that Santa Ana Heights brings many assets to Newport Beach and that including them to fight the strong opposition to the El Toro Airport and support of the JWA expansion could only help them as a group. He expressed his support in the airport issues and thanked Council for their support. Robert B. Hanley, 1601 Indus Street, stated that he lives in west Santa Ana Heights. City Attorney Burnham emphasized that discussion to include west Santa Ana Heights within the annexation application is inappropriate since the area is not agendized. • James Blaylock, 20192 Bayview Avenue, stated that he strongly supports the annexation and believed that Santa Ana Heights will be a great addition to Newport Beach. He indicated that many people will do whatever they can to help further this process. David Wooders, 20442 Bayview Avenue, stated that he fully supports the annexation and appreciates Council's efforts. Jeff Hamilton, 20102 Cypress Street, stated that he supports the annexation of Santa Ana Heights into Newport Beach. He indicated that he wrote the letter regarding Santa Ana Heights' redevelopment fund and hoped that Council can offer a voice and guidance to ensure that the Santa Ana Heights community receives its maximum allocation. He reported that the redevelopment funds are in excess of $8 million for capital improvements. Charles E. Griffin, 732 Bison Avenue, stated that he helped develop the DC -8 and DC -9 in the late 50'slearly 60's, and that the Orange County Airport was specified to be a regional airport at that time. Shortly after the airport expanded, he became active in airport issues because he was awakened by a DC -9. He stated that he has worked with many Santa Ana Heights residents since 1963 to develop a take -off procedure that gives them some relief. He emphasized that it is very important that the City provide them with some representation so that they do not have a conflict of interest with an airport operator. Kelly Crean, 2211 Mesa Drive, expressed her thanks to Mayor Pro Tem Thomson for attending their neighborhood meeting and indicated that Santa Ana Heights is united in making both sides Newport Beach. She believed that about 98 percent of the 200 at the meeting expressed their desire to be Volume 53 - Page 53 INDEX City of Newport Beach City Council Minutes October 25, 1999 part of Newport Beach and that the City should be proud of this showing. She supports the annexation because the County has been buying property in the neighborhood and building vacant businesses. She stated that the residents have been led to believe that Newport Beach would stand behind them so they would have a voice, believing they have not had a voice with the County. Expressing her concern with JWA expanding and airplanes flying over many homes, Ms. Crean indicated that the El Toro issue is also an important issue to the Santa Ana Heights residents. Mr. Riff clarified that the only assurance the City can give Santa Ana Heights residents that life will remain the same is that the City adopted their Specific Plan as its own plan for the area. Council Member Glover stated that she likes the rural feel of Santa Ana Heights and would like to preserve that as much as possible; however, she wants to make sure that the residents understand what the City can and cannot do for them. Regarding Ms. Crean possibly wanting to stop a potential development that is in the redevelopment plan and appropriately zoned, Mr. Kiff indicated that he is unsure of the City's ability to stop development because it is something the County adopted and will continue to pursue until 2026. Barbara Venezia, 20301 SW Cypress Street, stated that she is one of the organizers of the Santa Ana Heights Advisory Committee. She indicated that her neighborhood is very united on this issue, wants to see the annexation happen, and is willing to do whatever it takes to do that. There being no further testimony, Mayor O'Neil closed the public hearing. Motion by Mayor O'Neil to adopt Resolution No. 99 -71 entitled "Resolution of Application by the City Council of the City of Newport Beach Requesting the Local Agency Formation Commission to Initiate Proceedings for the Reorganization of Territory". The motion carried by the following roll call vote: Ayes: Adams, Glover, Ridgeway, Noyes, Mayor O'Neil Noes: None Abstain: None Absent: Thomson, Debay CURRENT BUSINESS 25. FIVE YEAR PROJECTION OF GENERAL FUND REVENUES, EXPENDITURES AND INCREASES /(DECREASES) TO FUND BALANCE. City Manager Bludau stated that Council Member Glover previously requested that a revenue and expenditure projection be brought to Council for review. He recommended that this become an annual report so that the City is always updated and has a five -year projection. Administrative Services DirectoriTreasurer Danner reported that the forecast is a management tool designed to promote discussions on economic trends, service levels, and revenue and expenditure alternatives. He emphasized that the model has limitations and is only as accurate as the Volume 53 - Page 54 INDEX 5 -Year Projection/ Revenues/ Expenditures/ Fund Balance (40) 0 is City of Newport Beach City Council Minutes October 25, 1999 INDEX assumptions used to build it. He explained that assumptions were made relative to capital expenditures and airport expenditures. Further, assumption included that growth would decline as the City moves into a period of less economic growth and that operating expenditures would increase as inflation pressures increase. He stated that the projections did not include revenues or expenditures for any potential annexation. Mr. Danner reported that the forecast concluded that the City's fiscal posture will remain adequate to fund operations at the anticipated level over the five -year period; however, unless something is done, the City will begin to see a decline in the City s fund balance beginning in the fifth year. He stated that the forecast includes an executive summary, assumptions, forecasts, potential revenue enhancements, detailed revenue/expenditure projections, and pro -forma fund balance statements through the 2004 -2005 fiscal year. Additionally, 14 new or expanded revenue sources have been identified for Council to consider at future meetings. He reviewed the recommendations outlined in the staff report and added that Deputy Director Kurth and Revenue Manager Everroad also assisted in generating the staff report. Council Member Glover stated that she asked for this to be placed on the agenda because she has concerns about future revenue, provided the level of service the community is accustomed to. She indicated that figures can be generated to compare the City's level of service to other cities, and reported • that residents identified being a full- service city as very important to them. Council Member Glover noted that the City has 700 employees where cities with similar population have about 30 employees. Council Member Glover stated that paying the City's bills is one of Council's responsibilities and that it is up to Council to ensure that there is revenue. She pointed out that Council does not approve a project because it generates revenue, but that the City is going to have to deliberately approve some of these projects because of the revenue they can bring. She noted that 50 percent of the City is in the ocean and will not produce revenue; the City is not connected to a major freeway and will rarely be participating in activities that are contingent on revenue; and the City is not the destination city it used to be for restaurants, shopping, and theaters. She emphasized that every citizen should be concerned about this. She thanked staff for the report and invited the public to review the projections. Council Member Noyes thanked Council Member Glover for requesting this report. He expressed his amazement that there are only two members of the public in attendance for this discussion when there was previously a room full of people in attendance for their own issues. He also noted that the people who are criticizing Council on traffic issues are also not in attendance. He emphasized that the responsibility of having a positive fiscal budget rests heavily on Council's shoulders. Mayor O'Neil noted that two members of the media are also present and stated that they could possibly get the word out to the public. ® Mayor O'Neil also thanked Council Member Glover for requesting this report, stating that the City is going to be faced with some big decisions in the near future and that balancing the budget sometimes becomes a difficult decision to make if the high level of service is expected to continue. Volume 58 - Page 55 City of Newport Beach City Council Minutes October 25, 1999 Keith Garrison, 311 Island Avenue, requested and received a copy staff report. Mr. Bludau stated that, as City Manager who also bears the responsibility with Council to make sure the City has a government that functions well and provides services that the community wants, it gives him small comfort to see the numbers produced over the next five years. Council Member Noyes stated that the figures do not include any liability claims made against the City and pointed out that Council has been very courageous about fighting them. He estimated the savings in the last three years to be about $6 million. Regarding points of sales, Council Member Glover requested that the City pursue utilizing local banks or have a bank relocate to the City to process vehicle leases, noting that the City is not deriving any revenue from the leases that are handled outside the City. She also requested that Mr. Everroad look into boat sales that are being conducted in international waters because the City does not receive any revenue from these sales. Mr. Danner stated that there is recent legislation to help cities capture sales tax revenues from vehicle leases, but this is still very difficult to do. Council Member Glover stated that the City needs to pursue this and suggested using the City's lobbyist for this. Council Member Noyes stated that a big issue for all governments is the loss of sales tax revenue through internet sales and mail orders. He emphasized that it helps to shop in Newport Beach because the City derives one percent of every dollar that is spent. Additionally, he believed that the City should look into having a "City of Newport Beach" credit card because the organization gets a portion of every dollar that is spent no matter where the card is used. MOTION FOR RECONSIDERATION - None. ADJOURNMENT - 8:40 p.m. + + + + + + + + +++ +++ +++ + + + + + + + + + + + + ++ The agenda for the Regular Meeting was posted on October 20, 1999, at 3:10 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 53 - Page 56 11 o►' �J •