HomeMy WebLinkAbout1 - Minutes - 2-24-2004Agenda Item 1
March 9, 2004
0 CITY OF NEWPORT BEACH
City Council Minutes
Study Session
February 24, 2004 - 4:00 p.m
ROLL CALL
Present: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor Ridgeway
Absent: Adams (excused)
CURRENT BUSINESS
1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR — None
2. CONTINUED DISCUSSION OF GROUP HOME ISSUES.
Mayor Ridgeway reported that this item was continued from the February 10th
Study Session at which time the Council finished a partial analysis of state law,
however federal law issues had not been addressed.
City Attorney Burnham noted that the primary reason for the second study
session was to allow the Council to hear as much testimony as possible from
members of the community who are interested in this topic. After reviewing the
minutes from the previous study session, he indicated that he and Mr. Goldfarb
believe that the Council is generally interested in considering amendments to
the code that would preserve the residential character of the various
neighborhoods in the city in a manner that would be consistent with the federal
and state laws that regulate the City's ability to in turn regulate group homes.
In response to concerns raised by Council Member Nichols about the City not
following their own laws on use permits, Mr. Burnham explained that the use
permit requirement for "residential care, general" was first adopted during the
zoning code re -write in 1997. The City is currently conducting an analysis of
those facilities presently in the city to determine which, if any, of them were
initiated after the use permit requirement was implemented. If the City
determines that there is a use that falls under that category that was initiated
after 1997, it would be the City's intention to ask them to apply for a use permit.
Mr. Goldfarb reported that the specific legislation in California relating to
licensed California treatment facilities was adopted in 1984. Mr. Burnham
confirmed for Council Member Webb that if a facility was lawfully in existence
prior to the date on which the City adopted the use permit requirement, then
the facilities would be grandfathered in. He also noted that there are generally
no non- conforming rights relative to compliance with building or fire codes.
Mr. Goldfarb reported that generally speaking federal law prohibits treating
group homes that serve handicapped people differently than similarly situated
residential units. If challenged, the City would be tested on whether the
regulations treat handicapped residents differently than non- handicapped
residents. Mr. Goldfarb reviewed the description of handicapped, which is
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defined by federal law as any individual whose major life functions are limited
in a particular way or is perceived by the public as being limited in a particular
way. As a result, case law has established that individuals who are abstinent
but recovering alcoholics or persons who have been addicted to drugs are
handicapped under the federal definition and under the FHAA, as well as the
ADA. He noted that if a person is currently using alcohol or drugs they are not
considered handicapped under the FHAA. He explained that the
recommendations in the report provide minor revisions to the zoning ordinance
in order to make sure that a challenge to the way the City regulates group
housing would be upheld. With regard to the single family zone the
recommendation is that all group homes, whether for handicapped or non -
handicapped, be prohibited from the R1 unless they are serving six or fewer.
Under state law alcohol treatment facilities and other residential facilities that
are serving six or fewer are exempt provided they have a state license. He noted
that the state has the ability to impose regulations on state licenses; however
that is handled as the licenses come forward and there are also regulations that
have been adopted by the department that regulates alcohol treatment facilities.
In response to imposing regulations such as limiting driving, etc. on a treatment
facility that are not imposed on other types of group living environments, the
treatment facility could make an initial case that they have been discriminated
against. The City would then have to put forward evidence to demonstrate
either that it is basically necessary, given the type of facility, to preserve the
public safety and that there is no other less restrictive means of achieving that
interest. The City would also have to demonstrate that it was not adopted for
discriminatory purposes, but for absolute legitimate governmental purposes. If
it is a 24 -hour residential facility that provides rehabilitative services than they
are required to have a state license. He also noted that there are group living
arrangements where no services are provided and the system functions where
all the individuals living in the facility facilitate each others recovery by
providing mutual support — it is not a services facility as much as it is a group
living environment. Those types of facilities don't have state licenses and can't
get licenses because there is no mechanism under state law to license them;
however they are protected by the FHAA and case law. The FHAA says they
have to be treated in the same way as any other group living environment. If
the City required them to have a service provider or head of household at the
facility, at least an initial claim of discrimination could be made and supported.
Mr. Goldfarb noted that the City would have the same mechanism for these
homes as they would for any other group living environment, such as regular
code enforcement rules, state laws, etc. and they would be subject to punishment
under the law. Based on the zoning code that is created the City would have the
right to verify the number of residents living in the facility. He said that what
they have proposed with regard to the single family zone is if there is a
requirement that allows six people living in a home and by definition living
together as a single housekeeping unit, and they have more people than that
then they would be in violation of that requirement and that could be
enforceable. There is a question on a case by case basis of whether you would
have to allow additional people into the house as a reasonable accommodation.
In response to questions raised by Council Member Rosansky, Mr. Goldfarb said
he does not believe the City can impose any type of testing requirements because
it could be viewed as being discriminatory. Mr. Burnham also indicated that this
may cause 4th Amendment problems. Mr. Burnham explained that it would be
helpful to focus on the land use issues that relate to group homes rather than
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the regulatory or licensing issues. The focus should be on the zoning code and
what factors would go into a decision by the Council to permit group homes with
seven or more in specific residential areas or other areas and what is the
character of those residential areas that the City Council would want to take
into consideration in making those zoning decisions. As far as nuisance
lawsuits, Mr. Goldfarb explained that any group environment would be subject
to the same nuisance laws that apply to any other group living environment and
if there are health and safety issues the City is not pre - empted from taking
actions to remedy that.
Robert Hanley reported that he recently acquired a half -way house next door
and related an incident that occurred to him and stated that he takes issue with
the fact that they are referred to as handicapped. He noted concern with the
definition since these people are doing this to themselves voluntarily and he
questioned how handicapped people are to be identified. He said his concerns
are that the house is a business and he would like to know how the funding is
arranged and whether they are denying funds for the true handicapped. He said
there are elements that are taking advantage of and making use of the laws and
the laws can be addressed by the 501 amendment. He read an article from
Assemblyman Kirkendall who was trying to pass a bill (AB756) in 1997. The
presence of multiple group homes, especially those dealing with disruptive youth
and recovering drug addicts, has a distinctive psychological impact on residents.
Based on the number of speakers, the Council set the time limit for each speaker
to three minutes. Mayor Ridgeway reported that today's edition of The Los
Angeles Times had an article about Malibu and recovery homes which indicated
that Malibu's hands were tied. They formed an organization to try to lobby the
state government to change the law, however noted that at this time the City's
hands are pretty well tied by pre - emption as well.
Nancy Clark stated that she's been working in drug and alcohol recovery for 30
years and operates residential recovery living homes and sober living homes in
Costa Mesa and an outpatient education center in Newport Beach. She voiced
concern with the tone of most Council meetings in regard to rehab programs and
said she's heard a lot of negativity and people trying to find ways to get rid of
them. In reality she said if there wasn't such a need for these places they
wouldn't be proliferating all over the place. She explained that the people that
populate these facilities come from the community. She stated that she feels the
City should take a different approach and suggested that the homes be visited to
find out the differences between them and meet the operators in order to get a
better understanding of them. She reported on her facilities and explained that
hundreds of people showed up when she got her use permit to protest it,
however they knew nothing about them and they had been there for years
without them even knowing it. Research on everyone's part to find out more
about the face of recovery would make everyone better human beings. She
explained that her 40 bed facility is a 19 -unit apartment complex and the 60 bed
facility is 12 town homes with 3 bedrooms in each one (36 bedrooms total). The
19 -unit apartment has between 30 -38 bedrooms with 40 people in the facility.
Denise Oberman inquired about whether a conflict check was run before the
City sought legal opinions. All of the FHAA legislation is to address permanent
or long -term housing and not special facilities. She said she spoke to a
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representative of the FHA and the intent is to prevent discrimination for people
on an individual basis and it doesn't have to do with entities engaged in the
commercial enterprise of a temporary or a special use hospital or facility. She
said it was his opinion that local government is properly responsible and should
manage and regulate business activity in the community as well as the land
uses within its jurisdiction. She said they also spoke with a land use attorney
concerning local government rights and responsibilities. He confirmed that the
City has the right and the responsibility to regulate commercial activity both for
profit and not - for -profit which deals with the issue of business licenses. He
emphasized that it is the City's right and responsibility to regulate its land uses
so that the uses are compatible with one another and the integrity of the various
areas is protected. She said she doesn't think anyone is saying there shouldn't
be any facilities; however they're saying there shouldn't be a proliferation of
facilities that create an adverse impact to others in the community. She said
those adverse impacts have been demonstrated and a material portion of the
people in drug rehab facilities are there as a condition of parole.
Mr. Burnham stated that the City would be happy to consider any kind of legal
analysis that have been performed by the speakers attorney, whether it was
performed on a voluntary basis or not.
Mayor Ridgeway said the City is trying to understand these recovery facilities
and how they interplay in the community. He noted that the facilities are
locating in the higher -rent districts and pointed out that there is one recovery
home per capita for every 58,000 people in Los Angeles County, however in
Malibu there is one recovery home for every 810 people. He noted that the
facilities are clearly operating within the FHAA and the state regulations.
Barbara Roy referred to a letter she wrote to the Council about the impact in her
neighborhood. She addressed concerns about the parking situation, the alley
and the congestion. She noted that the building at 1810 has 12 bedrooms and
there is a three -car carport for the building, however it is used for staff and
visitor parking, She noted that all the activity is funneled through one walkway
and one alley which is a fire lane. She noted that the scope of this operation
cannot be supported on a 30 x 100 foot lot with a 30 foot setback.
Allan Beek noted that the federal law says that we can't discriminate against
these people and he doesn't want to, however the problem is the same whether
it's a landlord packing the house full of teenagers or whether it's a business
enterprise trying to pack the house full of addicts. In either case it's a matter of
packing too many people in too small a space. The two court cases which struck
down the attempts to limit a so -called "family' by the number of people in it
made it very clear that you can limit the number of occupants in a place if that is
how you want to control the zoning just so you don't pretend you're limiting the
size of a family. He suggested that the City should look at restricting the
number of occupants plus employees at the same time in the property, such as
one per every 225 square feet in the building (not counting the garage) and place
an additional limit of not more than 1 -1/2 licensed drivers in the facility at any
one time for each parking space that is available on -site. These types of limits
would prevent the overcrowding of buildings, would meet legitimate public
purposes and would not be discriminating against anyone. Mayor Ridgeway
responded and said he felt that if this could be done, the City would do it,
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nowever oasea on the Malibu experience they are protected by the law whet
they have 6.9 people come to the home. Mr. Goldfarb explained that ii
California the Court of Appeal determined that the City is pre - empted b;
establishing residency limits that are different than the Uniform Housing Cod,
(UHC). Section 503 of the UHC states that for a house that houses two people
you have to have at least one room that is equal to or larger than 120 square fee
and every other habitable room must be at least 50 square feet, but then yoi
only need to add 50 additional square feet for each additional person. The Cit3
can't adopt a law that is different than that. Santa Ana attempted to do that
and it was struck down. Mayor Ridgeway noted that this issue is probabl3
better addressed at the state level and to the extent that it can be done there, he
suggested that the City try that approach.
Dolores Otting presented a copy of the initial licensing booklet from the
California Human Health Agencies, Department of Alcohol and Drug Programs,
and reported on the occupancy requirements for fire clearance purposes as
approved by the fire inspector. She noted that it includes the residents receiving
recovery, treatment or detoxification services, children of the residents and staff.
She noted that staff includes individuals who work for the applicant in exchange
for either monetary or in -kind compensation (room & board). She further read
from the booklet and noted that in addition to complying with the Health and
Safety Code and regulations in the alcohol and/or other drug certifications
standards concerning licensing certification and fire safety, there is an
understanding that there is also an obligation to meet other state, federal and/or
local codes and regulations such as zoning. She noted that they also have to
comply with building, sanitation, labor, non- discrimination, confidentiality, and
the Americans with Disabilities Act. She indicated that based on her research
online she found that in Newport Beach there are six facilities and Malibu only
listed four. She pointed out that Prop 36 now allows non - violent drug offenders
to seek treatment instead of jail, so these are sentence alternative facilities. She
suggested that the City utilize the organizations they are involved in to help the
residents with this issue.
Stephen Sutherland said it's his opinion that the Council and staff will do
everything they can to properly and legally resolve this issue. He said he has
nothing but compassion and best hopes for the residents of these facilities to
complete successful recovery; however he pointed out that the choice is given by
the judge to some of the residents to either go to prison or go live next door to a
family in Newport Beach. He noted that he has a two -year old daughter and if a
facility opened next door to him, he would sell his home and relocate. He
suggested that one way to work towards the future in Central Balboa would be
for residents to get together and start making strides working with the City to
convert Central and West Newport into an owner - occupied area.
Gil Ferguson reported that he represented this district for ten years in the
legislature and served as a vice chairman of the Housing and Community
Development Committee. As such, he said he held three hearings on care
facilities with cities who wanted to know what the facts were. He said that
when he heard from Council Member Nichols that these residents have been
complaining for years without any response at all, he told Mr. Nichols that he'd
be happy to advise the Council on how to proceed. He explained that the way to
proceed is to ask Congressman Cox, Assemblyman Campbell and Senator
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Johnson to bring in the experts to work with the City on this issue. He noted
that since he held his hearings the laws changed and they primarily dealt with
six or fewer because they were "ghettoizing" Aliso Viejo and Mission Viejo. He
noted that there are many things that can be done to control and allow these
houses at the same time without being discriminatory. He stated that there
have been all kinds of attempts to change the law. In response to Council
Member Nichols, he reported that the law is or was clear that there should be so
many feet in between the property lines of community care facilities. Mr.
Goldfarb reported that the 300 foot limitation that applies to residential
facilities does not apply to drug abuse and treatment facilities as specified in an
Attorney General opinion. He noted that there are also a number of cases that
interpret the FHAA to prohibit distance limitations between facilities and only
one case out of St. Paul supports that.
Gerry Marshall, President of Narcanon Southern California, reported that he
has listened to the citizens opinions and feels the Council has done a good job
dealing with the regulation of group homes. He said he felt they were
discriminated against and the tactics used to incite people make it hard to get to
the truth. He said their program really believes in people solving their problems
and they try to teach their residents to come up with solutions to a problem that
just doesn't create another problem. He suggested holding a meeting with the
parties to come up with solutions that not only helps the neighbors but helps the
group home. Council Member Bromberg suggested that Narcanon isn't being
"neighborly" when they have a facility that is designed to house a 6 -12 member
family, and they have 27 people housed there. He further suggested that when
Mr. Marshall meets with the neighbors perhaps the solution should be to cut the
number of residents housed in half. Mr. Marshall indicated that one of the
solutions they are looking at is finding a facility that they can move to in order
to alleviate that problem. He indicated that they've had approximately 27
people in residence for several years.
Larry Trayhem, Executive Director for 1810 and Narcanon San Diego, said he
believes they are doing everything in their power to not only abide by the laws
that have been set but also to do everything possible to work out problems with
the current neighbors. He explained that letters were sent to the neighbors. In
regard to the petitions signed and sent to the Council, he said there were people
more than a block away that signed duplicate petitions, which proves beyond a
reasonable doubt that there is discrimination in this situation, as well as a
NIMBY (not in my back yard) situation. He said he can prove that there is a lot
more of this type of reaction than there is truthful data. Referring to comments
from the audience he indicated that he feels that prejudice echoes in the room.
Council Member Nichols noted that Narcanon has asked that the Council only
consider formal evidence that contains the name, date, place, pictures, who's
involved, and then the people that are taking these pictures are being
threatened with lawsuits. Mayor Ridgeway explained that there is a letter from
an attorney from Narcanon that threatened a citizen with slander and libel for
their activities in and around their building. Mr. Trayhem stated that this
person was violating their rights as U.S. citizens and explained that this person
was shooting pictures of a 2 -year old five feet from the car in their driveway and
was digging through the garbage. He reiterated that they are trying to be good
neighbors to work out this situation and they will continue to work towards that
end.
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Al Irwin reported that he and his wife had a good meeting with this group and
the neighbors and some of the problems were solved. He noted that the problem
the peninsula has and will continue to have is the fact that the homes are six
feet apart.
Melody Seas said that they had the same issue in the Warner Springs area when
Narcanon San Diego was moving into the area. She said the residents were
fighting against the facility because of the fear of what people would do and
having drug addicts and alcoholics in the neighborhood. Since the facility has
opened, Narcanon has done nothing but contribute to the resource center to help
with the schools, volunteer fire department, etc. She referred to comments
made earlier about putting these facilities in the rural area, and noted that most
of the problems come from the cities, and the cities want to send the problems to
the rural areas.
Bill Covely stated that he has Narcanon beside and behind them. He distributed
photos and explained what it is like to be a neighbor of Narcanon from a
personal level. The pictures showed the proximity of the two residences and the
entrances to the properties. He said from time to time there have been 40 -50
people using the common sidewalk for the office, classes or meals or to go to
their rooms. He noted that the office, kitchen and primary entrance are
adjacent to their tenant's bedroom windows and front door. The staircase is one
of their sitting and smoking areas. He explained that the previous tenant had to
put up six -inch insulation over the windows for privacy and to partially stop the
noise. Another picture depicted how the previous and current tenant had to exit
and enter the property through a dining room window since using the front door
requires a constant confrontation with the parade of people. He asked the
Council whether they believe his property values have increased or decreased
since Narcanon has moved in and he indicated that he believes it has decreased.
In response to Council Member Heffernan, Mr. Burnham indicated that his
personal opinion is that under the residential sale rules, the seller of a property
would have to disclose that there is such a facility next door.
Jane Hamlin said that for 20 years she has lived next door to the facility at 1810
W. Oceanfront and that two drug facilities occupied the premise prior to
Narcanon. She reported that she tried the good neighbor approach with the
residents and the manager. She explained her relationship and how her
concerns would be addressed after making the concerns known to the manager.
She voiced concerns with the early morning gatherings, loud conversations,
smoke and profanity.
Council Member Rosansky said that he doesn't believe the problem is with the
facilities per se and he perceives a need for recovery and rehabilitation facilities
in communities, but he believes the problems as pointed out are neighborly
things. He noted that in life there are things that are legal, moral and ethical
and just because you're legal doesn't mean you're being moral and ethical or
being a good neighbor. He said for the most part many of the facilities in the
city fly under the radar because they are doing a good job, not abusing their
privilege to be in the community and are being neighborly. He thanked those
facilities that are doing a good job and for those that are not, he suggested that
they clean up their act. He said he feels Council should authorize staff to come
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back at a later meeting with a resolution that would encourage the state and
federal representatives to re- examine the problem in light of the history to see
what else can be done to tighten up the regulations.
Council Member Bromberg suggested to Narcanon that if they really want to get
along with their neighbors that they listen to the last speakers testimony. He
also encouraged staff to look at this to see if there is anything that can be done
within the law without discriminating.
Council Member Nichols said he feels the approach of looking at multi- family as
a place where these may occur is totally wrong. Multi- family in Newport Beach
would be large apartments and if the facilities have the density that they have of
three of these in a row they would totally wipe out the community. He said he
thinks the facilities that are licensed, the bigger facilities, should be in
commercial areas. He said when there is too high of a density and there are
places with a high turnover, you have to sort of limit the amount per area, which
is what is done with fraternities and sororities. He said the City should do
something like that and has the right to do so. He indicated that he gets the
opinion that these facilities should be treated the same as day schools and he
doesn't think that is correct.
Mayor Ridgeway said that to the extent that the City can regulate and not
discriminate, he said he would encourage that. He spoke in support of Council
Member Rosansky's suggestion to bring back a resolution or a letter to Senator
Johnson, Assemblyman Campbell, and Representatives Cox and Rohrabacher,
requesting that they address the issues through legislation. He indicated that
he received a note from someone who did not speak asking if the City can
regulate property owners from renting their dwellings, however he said he
suspected it would be a restraint on alienation.
3. DISCUSSION OF MODIFICATIONS TO MEASURE S GUIDELINES
City Attorney Burnham explained that Measure S requires voter approval of
certain amendments to the General Plan (GP) — amendments that increase peak
hour trips by 100, amendments that increase the floor area by more than 40,000
square feet, or amendments that increase dwelling units by more than 100.
Measure S also encouraged the Council to adopt guidelines to interpret its
various provisions, which the Council did approximately three years ago. Since
then staff has had the opportunity to work with Measure S in some limited
respect and thought this may be the time to address some possible
modifications. He noted that there are seven topics outlined in the staff report;
however some of the topics really involve just reducing the number of words and
reducing the complexity of the procedures because experience indicates that
many of the procedures are unnecessary. He indicated that the property owners
that have submitted requests for amendments are very well aware of the
requirements of Measure S, therefore the initial report is unnecessary. There is
also a relatively complex procedure in the guidelines that occurs after the
Council takes action on an amendment that staff thinks is unnecessary. He
indicated that those two items are really procedural and technical in nature
The guidelines have a prefatory statement that allows the City Council tc
deviate from a strict application of the guidelines if necessary to avoid a result
that is inconsistent with Measure S. He said he feels that gives people the
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wrong impression and it is really unnecessary since the Council can amend the
guidelines with six votes. He indicated that staff is looking for direction relative
to the provision in the guidelines that was raised by the Greenlight Steering
Committee having to do with the manner in which the City would evaluate a
General Plan Amendment (GPA) that would entitle a hotel. The guidelines
currently specify that a GPA that would entitle a hotel would be evaluated
solely in terms of the rooms that the hotel might encompass. The reason for
that is the City has for 30 years entitled hotels in terms of rooms since that is
the measurement used in the ITE Manual to calculate the traffic impacts of a
hotel. However, he said there is an argument that can be made that Measure S
changed the equation to some extent. Even though Measure S did not require
the City to change the way it entitles hotels, an argument could be made that it
might be information the public may want to consider in evaluating whether an
amendment is appropriate or not. Responding to Mayor Ridgeway, Mr.
Burnham explained that based on the way the City has entitled hotels in the
past, the evaluation as to whether a hotel amendment would require voter
approval would be based solely upon whether the amendment generated more
than 100 peak hour trips. He further indicated that by changing the way the
City entitles hotels and including floor area in addition to the rooms a hotel is
entitled to build, the public would be provided with additional information that
will let them know what the size of the structure will be. It will also avoid
possible arguments over whether something should or should not go on the
ballot as opposed to focusing the voters attention on whether it is a good land
use or not.
.
Council Member Nichols noted that Measure S has four criteria — 100 dwelling
units, 40,000 square feet, and two others. He questioned whether the City was
in violation if each of those is not independently looked at. Mr. Burnham
responded that he does not believe the City is in violation of Measure S based on
the way the guidelines are currently written. He said that the City currently
does not look at dwelling units in terms of both the number of units and floor
area. Historically the uses have been entitled in the GP by reference to rooms
and seats since that is what is used in the ITE Manual and by traffic engineers
to evaluate the traffic impacts of the land use. One of the key purposes of
specifying density and intensity in a land use element is so the land use element
can be correlated with the circulation element. Council Member Nichols said he
thought Measure S provided the four criteria that had to be met and if any one
of the four criteria were met it went to a vote. Mr. Burnham explained the three
criteria which are over and above allowed uses: 1) intensity, which is 40,000 sf of
floor area; 2) 100 peak hour trips; and 3) more than 100 dwelling units.
Measure S says that CPAs that change allowed uses in one of those categories
requires voter approval, however it doesn't tell you to phrase the GPA in terms
of floor area. Without Measure S the City would continue to entitle hotels in
terms of rooms since that is how traffic is measured and is the key reason why
you put a density /intensity limit on property. He said he doesn't believe the
guidelines are inconsistent with Measure S since it did not require the City to
change the way it entitles property. He explained that the ITE manual is the
reference that the City is required to use to evaluate peak hour trips and the
ITE manual contains three different ways of evaluating the traffic generated by
hotels. The primary unit of measurement is rooms, however they also use
occupied rooms and employees, however using the rooms for hotels in the most
commonly accepted way of determining how much traffic a hotel will generate.
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Council Member Bromberg said his recollection of the guideline adoption
process was that it went very smooth and wasn't contentious at all, however it is
now developing and he believes it is because there is a potential hotel on the
horizon. Mr. Burnham stated that the traffic engineers have determined that
the actual floor area of a hotel is not a very good indicator of the traffic that the
hotel will generate, however the number of rooms or occupied rooms is the right
way to assess traffic. He further explained that two letters were received from
Greenlight saying that they believe the guidelines violate Measure S, and while
he disagrees with the committee in terms of their conclusions about the
violation, the Measure does have three criteria and it seems appropriate that
the Council may want to consider changing prospectively the way hotels are
entitled partly to eliminate an argument. By entitling hotels and rooms in
terms of floor area and rooms, an argument would be eliminated that could
confuse the voters and it would also provide the voters or the reader of a land
use element with additional information that may be helpful. Mr. Burnham
indicated that when the guidelines were being discussed this topic did come up
and Mr. Arst suggested that hotel rooms should be treated as dwelling units
rather than floor area or rooms. Council Member Webb indicated that he
understood that Measure S was passed as a method to make sure that the
various different GPAs didn't increase the traffic above and beyond what the
circulation system could handle and that the criteria and guidelines were
related to the trips generated during peak hours. He said he's having a hard
time understanding why a hotel's square footage has any connection at all to the
generation of trips during peak hours.
Mr. Burnham explained that Measure S uses the term "approval" in two
respects, however it doesn't define it. When staff looked at what the impact of a
Council approval of an amendment that would require voter approval under
Measure S would be, it was determined that Council approval is really nothing
more than placing the matter in front of the voters. Measure S indicates that
the amendments are not effective unless and until approved by the voters, so
the act of the Council approving an amendment does nothing more than take it
from the Council dais to the electorate. The project is really not approved by
Council and the only thing their action does is submit it to the electorate. In
March of 2003 the City Council approved an agreement with Sutherland Talla
Hospitality (STH) that specified that the Marinapark Resort project was going
to be submitted to the electorate in November of 2004. When he started looking
at the guidelines in the context of that agreement, he felt it might be
appropriate to clarify the guidelines so that the term "approval" meant or
included approval for purposes of putting the measure on the ballot or any
action the City Council took which took the amendment from the Council and
presented it to the voters. In response to Council Member Heffernan, Mr.
Burnham explained that the only thing the voters approve and the only thing
the Council is submitting to them is the GPA. The approval of a GPA doesn't
necessarily allow the individual to pull building permits, etc. He explained that
the discretion that is left for the Planning Commission or Council depends on
what other land use approvals have accompanied the GPA. He pointed out that
the Koll project had zoning, a site plan review and a development agreement
attached to it. It was clear in the development agreement that if the voters
rejected the GPA than the agreement was null and void and the same would be
true of a zoning action since zoning has to be consistent with the GP. The
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Council can approve other discretionary actions at the time the action is taken
on the GPA, but the action to approve a GPA that requires voter approval
pursuant to Measure S, does nothing more than submit it to the electorate. In
terms of what the electorate sees, that will be decided by the Council when the
election is called and the Council selects the ballot language. He further
indicated that it is the obligation of his office to prepare an impartial analysis to
try to explain what a "yes" or "no" vote means in practical terms, To clarify Mr.
Burnham indicated that he is not suggesting that by interpreting and defining
approval that the process be changed. He said that in order to avoid any legal
issue associated with the action that the Council takes on a GPA, the term
approval should be given broad meaning to mean anything which gets the
particular amendment from the Council to the voters. Council Member
Heffernan questioned whether this is a way for the City Council members to
avoid having to put their necks on the line for approving the project during an
election year.
Council Member Webb indicated that it is his understanding that the GPA sets
the parameters for something to be built within the GP. He questioned whether
the applicant then needs to come back to the City Council to get specific
approval and can conditions be placed on the project at that time. Mr. Burnham
indicated that in the normal case when the City is not the owner of the property,
the City typically concurrently processes GPAs and any zoning approvals that
are required, as well as any environmental documents. If the City isn't the
owner of the property however wants a particular type of development, an
• envelope has been established within which and below which a property owner
can construct, The property owner cannot build more than is authorized and
the conditions of approval would be attached to the zoning ordinance or to the
GPA. Using the Marinapark Resort as an example, Mr. Burnham stated that
the City Council is going to be presented with a Planned Community
Development text, which would be expected to be approved. In terms of
whether the voters understand the position of each individual Council Member
if the GPA and the zoning approvals are concurrently processed, then it is being
approved still recognizing that it is never going to be effective unless the
electorate approves the GPA.
John Battal said he would be addressing two issues — the entitlement by square
footage and the timing of the election. He said he believes the guidelines and
Section 423 are inconsistent in those regards. Section 423 doesn't require the
City to adopt any guidelines, however if you do the guidelines "shall be
consistent with the amendment and its purposes and findings ". He said he
believes the Council needs to be faithful to the express language and express
requirements of that section, On its face, Section 423 applies to every GPA that
purposes to increase allowable commercial floor area or intensity by more than
40,000 sf. He provided an equation as an example and asked why the City
wouldn't convert it up front from hotel rooms to floor area. The intensity
criteria are separate and distinct from an increase in peak hour trips. Any
project which adds more than 40,000 sf to what is allowed under the GP
requires voter approval, regardless of whether the ITE manual says it doesn't
add 100 peak hour trips. With respect to the timing of the election Section 423
makes it clear that the election required by this section is to be held after the
Council approves the amendment, not before the Council votes and not
concurrent with the Council vote, not an advisory vote, and not to substitute for
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INDEX
the Council's responsibility to approve or reject an amendment. The language is
mandatory, so if there is no approval then there is no election. Mr. Battal
indicated that he's met with the Greenlight representatives and Mr. Burnham
and received a copy of Mr. Burnham's letter to Greenlight's attorney, Doug
Carstens, in which he stated that he intended to submit to the City Council
modifications to the guidelines that would require all GPAs for commercial
property to be stated in terms of floor area. He submitted a letter for Council
and Mr. Burnham's review.
Phillip Arst thanked Mr. Battal for his pro bono work to protect the right of the
voters to have a final say on GPAs. He said the committee supports all of the
recommendations contained in his letter. He said that Mr. Burnham's proposal
is for the clean -up of small issues and procedures except for a few key items. He
stated that some key portions of the guidelines are illegal in the opinion of their
attorney because they are not in conformance with the law as expressed in
Section 423 of the City Charter. He said they strongly oppose the staffs
recommendation on the approval section that suggests bypassing the legally
required GPA approval vote by the City Council before submitting it to the
voters. He noted that 631/6 of the voters said that after Council approves a GPA,
they want a chance to vote to approve or disapprove the Council's action. He
stated that three criteria were used — dwelling units, peak hour traffic and
intensity. He said that by law the Council needs to add an intensity factor to
hotels and theaters. Using the proposed Dunes Hotel project as an example,
just room numbers would not have caused it to go to a vote. He said they also
oppose the staff recommendation to permit the transfer of entitlements from one
area of the city to another since it is against one of the main purposes of
Measure S. Measure S specifically used the City's division of statistical areas
and tried to balance traffic in all those areas by saying there could be no
increases beyond using it as a criteria for increases that were less than 40,000 sf
or 100 peak hour trips to accumulate those within a statistical area. He said
that is a clear indication that they were concerned about that. Transferring of
entitlements will permit a multi -story office building to be built on the bay shore
if entitlement were transferred from a part of the city that hadn't been fully
developed. He said their attorney will further research this, however they feel it
goes against the intent of Measure S. As for effective dates of the action, they
oppose grandfathering the Marinapark Hotel, since it would be favored
treatment. In response to Council Member Webb's question about whether
objections were raised to the hotel issue, Mr. Arst stated that he was troubled by
it but as a compromise they said it should maybe be counted as dwelling units.
He said he was told that Council said they must follow the letter of the law, so
they shut up and trusted Council's opinion, however subsequently they now
realize that they missed something. Mr. Webb read from the guidelines which
states "in the event the entitlement of a non - residential use is designated in
terms other than floor area (such as hotel rooms and boat slips) the
determination as to whether the amendment requires voter approval shall be
based solely on the differential in peak hours ". He said that his understanding
was that Measure S was all about additional trips and making sure that you
could drive down the street. He said at the time the signs posted all over town
said "stop traffic & growth" and all the election brochures said that this was a
traffic control measure. He said he doesn't recall any significant discussions
that related to the intensity of parcels on any of the various different sites. Mr.
Arst stated that while traffic is a universal measure of intensity, it was used to
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help control intensity, but it can't control it in all cases.
Tom Billings spoke in support of the clarification of what the law states and
what is mandated. He noted that he is still a member of the Greenlight Steering
Committee.
Allan Beek stated that traffic is one of the criteria but if traffic is all they were
after that is all they would have put in Section 423. He said they also put in
density and intensity in order to hit the main things that go to determine the
character of a community. He said they would have probably settled for square
feet and dwelling units, however they put in the trip generation as a catch -all
for fear of something sneaking by. If they had been diligent they would have
realized that hotel rooms are also another measure that should have been used.
He said they were thinking in terms of the size of the project and hotels are
always accompanied by convention centers, ballrooms, and often by offices, so
when you speak of the size of a building you think in terms of the square feet.
He said they neglected to realize that the GP at present doesn't put any limit on
the number of square feet in a hotel development. Therefore you might say that
the present is infinite so no matter what you grant in the future you haven't
granted any increase, which would not be a reasonable interpretation of the
intent of Section 423. He asked the Council to interpret it by requiring those
developments to have either a limitation by square feet or two separate
limitations — one by number of rooms and one by square feet of other facilities
besides the number of rooms.
Carol Hoffman stated that her firm represents a variety of development
interests in Newport Beach and at the time Measure S was approved her firm
did not support the measure. Since then, however, her firm has spent a great
deal of time making sure that their clients comply with the provisions as
articulated in the guidelines. She said they felt that the three triggers were
very clear and the voters demonstrated a concern about peak hour trips as the
most important measure of the way to control traffic. One of the keys to both
hotels and theaters is they are not peak hour impacts and that has been shown
many times throughout the nation. She noted that one of the benefits of a hotel
is that they are not peak hour traffic generators. With the focus on traffic issues
and the focus on peak hour trips, there is considerable reason to leave the
regulations as they are currently written. Her clients wanted their views
articulated today so the Council heard from both sides of the issue. She noted
that as an industry they participated in the dialogue that occurred when the
guidelines were approved. In addition to the Council hearings that were held on
this issue, there were hours and hours of meetings where the language of the
guidelines was discussed at great length. She emphasized the clarity that has
been suggested by the City Attorney, except with regard to the issue of square
footage and rooms. She said there is a very direct relationship between all
rooms and rooms — you can't have a big ballroom unless you have rooms because
they support one another and are part of the overall project. You can't fill the
rooms without having some facilities there to bring the users of the hotel rooms
to the site and they really do not separately impact traffic during the peak
hours. She suggested that typically her clients, if they have to have a GPA,
prefer to have concurrent processing. She indicated that the citizens also want
concurrent processing so they know more about the specific project itself. She
noted that concurrent processing is what is typically done in this city and in
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INDEX
most cities so everyone has a full picture of the application and then the Council
would make it all subject to the finalization by the voters. In response to
Council Member Nichols, Ms. Hoffman explained that her point is that there is a
symbiotic relationship between ballrooms and convention facilities, however a
sports facility may have different characteristics and may be called out
differently both as far as zoning and the way it would be interpreted by
Greenlight.
Wynn Fuller said the problem is in applying the normal peak hour traffic
measurement to hotels. He asked what constitutes "normal" peak traffic hours.
Mr. Burnham reported that the definition of peak hour trips is found in the
guidelines. Full service successful hotels generate high levels of traffic at many
different times of the day and night. He provided examples of times when
guests and staff would arrive and depart the hotels, and especially the proposed
Marinapark Hotel and the traffic on the peninsula. Measure S as it applies to
hotels should be changed to reflect a peak hour traffic measure that is consistent
with the hotel uses as he mentioned.
Dr. Jennifer Frutig, former Greenlight Steering Committee member, pointed out
that one of the primary purposes of Measure S was to give the residents an
oversight function over large development projects that were in the pipeline to
potentially be approved. She said that with the present process the Planning
Commission approves a large project and then the City Council approves it. If a
project is submitted to the voters before Council approves it that would be
eliminating the final oversight function of Measure S.
Council Member Bromberg noted that Council is revisiting issues that were
dealt with when the guidelines were approved and stated that the reason is
because of the hotel that is on the horizon. He noted that there were a number
of references to the fact that 63% of the voters approved this, which isn't true —
it was approved by 63% of the people who voted at a special election that had a
small turn -out, which is corroborated by the fact that the Greenlight candidates
weren't successful at the last election. Most significantly though, is that the real
issue is what this is all about and contrary to what the representatives of the
Greenlight organization want to say, this issue initially was solely about traffic.
He reminded everybody that under the initiative law in California, initiatives
are limited to one issue. Intensity and density were topics, however they all
focused around traffic and everything referenced traffic. If you look at simple
logic a hotel room of 300 -500 sf will not create the type of traffic that you would
have in a similar size office because of the number of people. When you have a
theater you have someone in a seat which is not one car per person. He said it is
flat out anti- growth and it shouldn't be because Greenlight has always said it is
not anti - growth, but slow - growth and reasonable - growth. He questioned what
would be unreasonable about having a hotel where you measure by rooms
because there are fewer people and much less traffic and why would you go after
a theater with the same issue. He said he believes some of the modifications
regarding procedural issues need to be cleaned up, however he said he is
comfortable with the guidelines since the City is following the law.
Council Member Heffernan said he believes Greenlight was passed during a
general election and he was "swept" into office at the same time the measure
was passed. He said that it did deal with intensity, which is why there is the
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40,000 sf threshold. He said the reason he thinks Sutherland's project will come
before the voters is because there is a lot of focus on the project because of it's
size, which is what Greenlight is all about. He stated that Greenlight is not
well -liked on the dais and the rest of the Council wants to do away with it.
Measure S takes away from the Council the final say on a project and gives it
back to the voters when it deals with certain thresholds which are very specific
(100 dwelling units, 100 trips and 40,0000 sf). If the residents don't like it and
think the Council is doing the wrong job, they will have a chance to vote against
it. He noted that he voted against the Marinapark project going to the voters
because he doesn't think the voters will get what they would have gotten under
a Greenlight vote. The purpose of Greenlight was to make people accountable.
He stated that the changes proposed by the City Attorney regarding theaters
and hotels are appropriate if they deal with a certain square footage. He stated
that Corona del Mar and the peninsula will be different when the Port Theater
is re- opened and if the hotel project moves forward and the voters have the right
to vote on it. He noted that it takes six Council Members to approve changes to
the guidelines.
Council Member Bromberg corrected his previous statements and noted that he
was actually referring to the vote on the Boll project.
Mayor Ridgeway noted that the report from the City Attorney is not directive,
but suggestive, and it presents what he thinks is an even- handed presentation
on what the policymakers should do. He stated that he has made it clear that
zoning and general plan changes are inappropriate ballot box issues, however he
respects that this is a backstop for the final approval. He said he understood
that Greenlight was passed as a traffic initiative and noted that this is the first
time he's heard that there was something else other than traffic being looked at.
He said he tends to agree with Mr. Buttolph's letter and said he would like to
have this brought back to a regular meeting for debate. He said he feels the
guidelines are good and they were all agreed to at the time. He said he is
worried that ultimately a good project will get approved but because of some
fear or precedence or trying to get an interpretation of what Greenlight said,
there will be a lawsuit, which won't do anyone any good. He said if there is a
way to stop the lawsuit and do something which he thinks is minimal in the
overall scheme of things that is what he'll do.
PUBLIC COMMENTS
Louise Fundenburg, President of the Central Newport Beach Community Association,
said she's had calls from neighbors in the area questioning why the Study Sessions
aren't televised live. She also noted that the presentations are difficult to see on
television because of the camera angles.
ADJOURNMENT — at 6:47 p.m.
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INDEX
City of Newport Beach
Study Session Minutes
February 24, 2004
ttttttttttttr : : : : : :rktrttr,t+x ::
The agenda for the Study Session was posted on February 18, 2004, at 3:15 p.m.
on the City Hall Bulletin Board located outside of the City of Newport Beach
Administration Building.
City Clerk
Recording Secretary
Mayor
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INDEX
I
L
CITY OF NEWPORT BEACH
City Council Minutes I) RArr
Regular Meeting 1�
February 24, 2004 - 7.00 p.m. INDEX
STUDY SESSION — 4:00 p.m
CLOSED SESSION — None
* * * * * * * * * * * * * * * * * **
A. RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING
B. ROLL CALL
Present: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor Ridgeway
(left at 10:20 p.m.)
Absent: Adams (excused; arrived at 9:25 p.m.)
C. CLOSED SESSION REPORT - None
D. PLEDGE OF ALLEGIANCE — Council Member Rosansky
E. INVOCATION — Reverend Peter D. Haynes, Saint Michael and All Angels
Episcopal Parish Church
F.
Presentation on the 2004 Tommy Bahama Newport to Ensenada Race
by Peter Bretschger of the Newport Ocean Sailing Association (NOSA).
Mr. Bretschger announced that this year's race would take place at 12:00 noon on
April 23, 2004. He stated that this is the 571h year that the race has been held,
and that over 500 boats and 3500 crew members are expected to participate.
Using a PowerPoint presentation, Mr. Bretschger provided some history and
facts on the race, listed the sponsors, and noted some of the impacts on the
community, as well as highlights of the race. Mr. Bretschger thanked the City
for its support.
G. NOTICE TO THE PUBLIC
H. CITY COUNCIL ANNOUNCEMENTS OR MATTERS WHICH COUNCIL
MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR
DISCUSSION, ACTION OR REPORT (NON- DISCUSSION ITEM):
• Council Member Bromberg announced that this year's Relay for Life
event will be taking place on May 14 and 15, 2004, beginning at 6:00 p.m.
and continuing over a 24 -hour period. The fundraising and awareness
event is put on by the American Cancer Society. More information can be
obtained by contacting Stephanie Taylor at 949 - 567 -0611.
Volume 56 - Page 706
City of Newport Beach
Regular Meeting
February 24, 2004
Council Member Rosansky announced that a second meeting regarding
the Newport Heights traffic calming study will take place on February
26, 2004, at 7:00 p.m. at Ensign School.
• Council Member Heffernan stated that he has received a list of the
projects in the City being handled by Mr. Goetz. Council Member
Heffernan asked why Mr. Goetz is still conducting business in the City
and what can be done about it.
• Council Member Heffernan announced that he is appealing the
modification permit that was approved for 1507 Port Tiffin Place.
Council Member Heffernan announced that the application deadline for
the City Attorney's position is March 15, 2004.
• Council Member Heffernan stated that he has been provided with more
information regarding the Port Street traffic study since the City Council
meeting of February 10, 2004, and is now in support of the study.
• Mayor Ridgeway announced that members of the community are invited
to apply for openings on the General Plan Advisory Committee (GPAC).
• Council Member Nichols asked if a date has been set for the hearing on
the relinquishment of Coast Highway in Corona del Mar. City Manager
Bludau stated that it has tentatively been set for the City Council
meeting on March 23, 2004.
I. CONSENT CALENDAR
READING OF MINUTESIORDINANCES AND RESOLUTIONS
1. Item removed from the Consent Calendar by a member of the
audience.
2. READING OF ORDINANCES AND RESOLUTIONS. Waive reading
in full of all ordinances and resolutions under consideration, and direct
City Clerk to read by title only.
ORDINANCE FOR ADOPTION
3. Item removed from the Consent Calendar by a member of the
audience.
RESOLUTIONS FOR ADOPTION
4. PRE -TAX PAYROLL DEDUCTION PLAN FOR CALPERS
SERVICE CREDIT PURCHASES. Adopt Resolution No. 2004 -15 that
will allow employees to make PERS redeposits and service credit
purchases on a pre-tax basis.
5.
INDEX
(100 -2004)
CORRECTION TO RESOLUTION REVISING THE ECONOMIC 1(100-2004)
DEVELOPMENT COMMITTEE MEMBERSHIP STRUCTURE.
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City of Newport Beach
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February 24, 2004
Adopt Resolution No. 2004 -16 which revises the EDC membership
structure and rescinds Resolution Nos. 93 -3, 95 -27, 98 -17; Attachment `B'
of Resolution No. 2001 -80; Resolution No. 2004.14; and any other prior
resolutions related to the EDC.
CONTRACTS AND AGREEMENTS
6. FIRST AMENDMENT TO AGREEMENT FOR IMPLEMENTA-
TIONS OF THE UNIFIED PROGRAM ELEMENT REQUIRE-
MENTS BETWEEN COUNTY OF ORANGE AND CITY OF
NEWPORT BEACH. Approve the First Amendment to Agreement for
Implementation for Unified Program Element Requirements between the
City of Newport Beach and the County of Orange and authorize the
Mayor to execute the amendment.
JANITORIAL SERVICES CONTRACT APPROVAL OF
PROFESSIONAL SERVICES AGREEMENT WITH GRACE
BUILDING MAINTENANCE. Approve a Professional Services
Agreement with Grace Building Maintenance of Las Angeles for janitorial
services at a contract price of $4,643 per month and authorize the Mayor
and City Clerk to execute the agreement.
S. BAYSHORES WATER MAIN REPLACEMENT — COMPLETION
AND ACCEPTANCE OF CONTRACT (C- 3512). 1) Accept the work;
2) authorize the City Clerk to file a Notice of Completion; 3) authorize the
City Clerk to release the Labor and Materials bond 35 days after the
Notice of Completion has been recorded in accordance with applicable
portions of the Civil Code; and 4) release the Faithful Performance Bond
one (1) year after Council acceptance
9. SAN MIGUEL /SPYGLASS HILL ROAD -EAST GATE DRIVE
TRAFFIC SIGNAL INSTALLATION AND MISCELLANEOUS
UPGRADES — AWARD OF CONTRACT (C- 3678). 1) Approve the
plans and specifications; 2) award the contract (C -3678) to Steiny and
Company, Inc. for the total bid price of $235,649 and authorize the Mayor
and the City Clerk to execute the contract; and 3) establish an amount of
$23,565 to cover the cost of unforeseen work.
10. MEMORANDUM OF UNDERSTANDING (MOU) WITH
BAYSHORES COMMUNITY, SOUTHERN CALIFORNIA EDISON,
AND SBC REGARDING ALLEY PAVING. Approve a MOU with
Bayshores Community Association Regarding Alley Paving.
MISCELLANEOUS ACTIONS
11. BUDGET AMENDMENT — TENNIS RESERVE ACCOUNT. Approve
a budget amendment (BA -033) in the amount of $14,917 from the Tennis
Reserve account into various funds to enhance the City's recreational
programs.
12. Item removed from the Consent Calendar by a member of the
audience.
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INDEX
C -2531
Unified Program
Element
Requirements/
CUPA
(38/100.2004)
C -3687
Janitorial
Services/
Libraries
(38/100 -2004)
C -3512
Bayshores Water
Main
Replacement
(38/100 -2004)
C -3678
Traffic Signal
Installation &
Upgrades
(38/100 -2004)
C -3688
Bayshores Alley
Paving
(38/100 -2004)
(100 -2004)
City of Newport Beach
Regular Meeting
February 24, 2004
J.
13. APPOINTMENT TO THE ENVIRONMENTAL QUALITY AFFAIRS
CITIZENS ADVISORY COMMITTEE. Confirm Mayor Ridgeway's
appointment of Kenneth Drellishak as the District 1 at -large
representative to the Environmental Quality Affairs Citizens Advisory
Committee (EQAC).
14. PROPERTY INSURANCE RENEWAL. Approve the property
insurance coverage for a twelve month policy period beginning 3/1/04 to
3/1/05 for a premium of approximately $586,674.
15. Item removed from the Consent Calendar by Mayor Ridgeway.
16. REQUEST FOR BUDGET AMENDMENT TO COVER EXPENSES
ASSOCIATED WITH HIGH WORK DEMAND IN THE BUILDING
DEPARTMENT. Approve a budget amendment (BA -034) to appropriate
$193,000 from unanticipated General Fund revenue to the Building
Department's Professional and Technical expenditure account #2930-
8080.
S24. COMMENTS ON REVISED DRAFT EIR FOR SAN DIEGO CREEK
WATERSHED NATURAL TREATMENT SYSTEM. Approve and
authorize Mayor to sign comment letter.
Motion by Council Member Bromberg to approve the Consent Calendar,
except for those items removed (1, 3, 12 and15).
The motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor Ridgeway
Noes: None
Abstain: None
Absent: Adams
PUBLIC HEARINGS
17. UNDERGROUNDING UTILITIES IN PROPOSED ASSESSMENT
DISTRICT NO. 81 - RIVER AVENUE AND CHANNEL PLACE AND
DESIGNATION OF THIS AREA AS AN UNDERGROUND
UTILITIES DISTRICT.
Mayor Ridgeway announced that this public hearing is being held to hear
protests or objections to the Resolution of Intention, Assessment
Engineer's Report, proposed assessments and all other matters relating
to Assessment District No. 81, and for designation of the area as an
underground utilities district. He noted that all written protests and
ballots must be received by the City Clerk prior to the close of the public
hearing.
Mayor Ridgeway opened the public hearing.
City Clerk Harkless announced that the notice of public hearing was
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INDEX
(100 -2004)
(100 -2004)
(100 -2004)
(100 -2004)
Assessment
District No. 81/
River Avenue
and Channel
Place
(89/100 -2004)
0
City of Newport Beach
Regular Meeting
February 24, 2004
given in the manner and form as required by law.
John Friedrich, Assessment Engineer, announced that a modified front
footage was used for the method of spread.
Council Member Webb confirmed with Mr. Friedrich that the largest
parcel in the district is owned by the City, indicating the City's financial
contribution to the district.
Council Member Rosansky asked why the assessment for this district is
so high. Mr. Friedrich explained that the area is what is known as a
"single loaded street ", which means that only the homes on one side of
the street face the street and are, therefore, being assessed. Public
Works Director Badum added that districts are typically formed by
resident requests and that the residents are also involved in determining
its boundaries.
Jim Hildreth reminded the residences in the proposed assessment district
that the undergrounding of the utilities is not being done to their benefit
and that the City will not be held liable. He stated that the residents
should have some type of assurance that the work will be done properly.
City Manager Bludau noted that there is no financial benefit to the City
from the formation of the proposed assessment district.
Geneva Ryan stated that the assessment cost is outrageous and that it
won't result in that great of a benefit to the residents in the area.
Rose Perez Justin stated that when the petition for the district was
circulated, the residents were told that the assessment would be
approximately $6,000 to $8,000, but that it's ended up being closer to
$30,000. She stated that it's an unfair assessment since only one side of
the street is being assessed, and the other side will realize benefits too.
Ms. Justin suggested that the district be expanded to include other
streets in the area.
Council Member Heffernan asked what the City has spent, to date, on the
formation of the district.
Council Member Webb referred to the staff report, which indicated that
the City Council appropriated $47,775 in 1998 to facilitate the
undergrounding of the utilities. He further noted that 78.5% of the
residents signed a petition in support of forming the district.
Mayor Ridgeway stated that the assessment estimate was approximately
$10,000 per household, and that it's ended up being $25,000.
Rocco Tarantella stated that it isn't worth it to him to spend $25,000 to
get rid of a pole in front of his home.
Bob Jessen stated that he signed the petition with the understanding
that the assessment would be between $3,000 and $6,000. Mr. Jessen
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City of Newport Beach
Regular Meeting
February 24, 2004
INDEX
stated that it has ended up being $32,000. He briefly mentioned some
problems at Channel Place Park, specifically the telephone poles in the
middle of the sidewalks and the elimination of some of the park's
benefits. He expressed his opposition to the assessment district.
Gary Fuller stated that he was originally in favor of undergrounding the
utilities when the assessment estimate was approximately $10,000, but
at $25,000 to $30,000, it's not worth it. He suggested that the City's
investment in the district could be recovered by encompassing other
streets in the area. He expressed his opposition to the cost of the
assessment.
Mayor Ridgeway asked why the assessments ended up being so
expensive. Mr. Friedrich stated that it is a result of the boundaries that
were set and the higher costs charged by the utility companies. Public
Works Director Badum added that the boundaries were chosen by the
original proponents and that the district has been around since the early,
or mid, 1990's when costs were less. He further noted that the street is
concrete which is more expensive to replace. Mayor Ridgeway asked why
saw cutting couldn't be used. Public Works Director Badum stated that
the City has adopted new standards in pavement management and won't
do small sliver cuts in the streets anymore. He noted, however, that if
the district fails, it might be possible to look at expanding it. Mayor
Ridgeway agreed that adding homes might make the district more
acceptable.
Council Member Rosansky asked how much the cost per parcel might be
reduced by adding homes, noting that he realizes that some costs are
fixed costs. Public Works Director Badum stated that it wouldn't be
known until the design of the system is done, but that the cost would
certainly spread out a bit. Council Member Rosansky asked if there was
any assessment district activity in the surrounding areas. Public Works
Director Badum stated that Assessment District No. 69, across Balboa
Boulevard, is already well underway. He stressed that it's the
proponents that select the district boundaries and that the formation of
the district is dependent on the interest of the residents in the area.
Council Member Bromberg noted that the undergrounding of utilities on
Little Balboa Island is similar to the proposed district because both
districts were started a long time ago and both have streets that are
concrete. He stated, however, that the assessment costs for Little Balboa
Island didn't increase like they did for the proposed district. He asked if
it's possible that there's an 'error in the computations. Public Works
Director Badum stated that the costs are quoted by Southern California
Edison (SCE) and that they are not present at the current meeting. He
stated, however, that one explanation could be that there's a major
distribution line in the proposed district.
Mayor Ridgeway stated that the proposed assessment is pursuant to Rule
20B, and explained that Rule 20A is when SCE would pay for the major
line component. He suggested that the item be continued for sixty days
to allow SCE to review their quoted costs.
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Council Member Webb explained that Rule 20A funds are given to the
City and the City chooses the priorities of where they are spent. They are
supposed to be spent in areas where the aesthetics of major arterials are
being improved.
Council Member Rosansky asked if the ballots would be returned if the
item is continued. City Clerk Harkless stated that the ballots are sealed
and that return addresses are not provided on the envelopes. Bob
Hessell, Bond Counsel, stated that the hearing could be continued, but
the ballots still need to be counted at the current meeting. He stated that
it would be best to begin the ballot proceedings again if the assessment is
going to be changed.
Hearing no further testimony, Mayor Ridgeway closed the public hearing.
Mayor Ridgeway stated that he's still confused by the amount of the
assessments. City Manager Bludau suggested that a meeting could be
scheduled with the utility companies to have them justify the cost.
Council Member Heffernan stated that it would seem to be more
appropriate to continue the item to verify the assessment amounts, and
then count the ballots. He expressed his concern for the ballot total
supporting the assessment and then there not being the opportunity for
the verification. Mr. Hessell stated that lowering the assessment
wouldn't invalidate the ballots. City Attorney Burnham confirmed with
Mr. Hessell that the City Council would still have the discretion to cancel
the formation of the district even if the protests are not more than 50 %.
City Clerk Harkless submitted the ballots to Associate Engineer
Arciniega for counting.
18. VACATION AND ABANDONMENT OF A PORTION OF ORANGE
AVENUE, LOCATED IN THE NEWPORT HEIGHTS AREA.
Motion by Council Member Bromberg to continue the hearing to
March 23, 2004.
The motion carried by the following roll call vote
Ayes: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor
Ridgeway
Noes: None
Abstain: None
Absent: Adams
19. CODE AMENDMENT NO. 2003 -010 (PA2003 -289) — PROPOSED
AMENDMENT TO SECTION 20.65.070 OF THE NBMC TO ALLOW
ELEVATOR SHAFTS IN EXCESS OF 25 SQUARE FEET IN AREA
TO EXCEED APPLICABLE HEIGHT LIMITS, BY NO MORE THAN
5 FEET, WHEN MANDATED BY THE BUILDING CODE AND
FIRE DEPARTMENT.
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INDEX
(100 -2004)
(100 -2004)
City of Newport Beach
Regular Meeting
February 24, 2004
K.
INDEX
Mayor Ridgeway opened the public hearing.
lqw
Jim Hildreth stated that an elevator shaft is not a mandatory element in
a residential structure. He stated that if it's for a business, he can
understand it. Mr. Hildreth stated that height limitations have already
been established in the City and he asked if this was a way to circumvent
them. He stated that the reasoning for the proposal should be more fully
explained.
Hearing no further testimony, Mayor Ridgeway closed the public hearing.
Motion by Council Member Bromberg to introduce Ordinance
No. 2004 -3 approving Code Amendment No. 2003 -020; and pass to second
reading on March 9, 2004.
The motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor
Ridgeway
Noes: None
Abstain: None
Absent: Adams
ITEMS REMOVED FROM THE CONSENT CALENDAR
Mayor Ridgeway asked for a clarification on the order of business on the agenda.
City Clerk Harkless explained that the City Council's recent action moved the
Public Hearings section to before the discussion of the items removed from the
Consent Calendar. Mayor Ridgeway expressed his understanding that all
sections of the agenda were to be moved to before the discussion of the items
removed from the Consent Calendar. After a brief discussion, Mayor Ridgeway
requested that a change to the policy be agendized for a future City Council
meeting.
1. MINUTES OF THE ADJOURNED REGULAR AND REGULAR
MEETING OF FEBRUARY 10, 2004.
Jim Hildreth stated that the periodicals of the articles he spoke of during
Public Comments at the regular meeting of February 10, 2004, weren't
mentioned in the minutes, and that a clarification of his comments needs
to be made.
Motion by Council Member Bromberg to waive reading of subject
minutes, approve as written and order filed.
The motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Bromberg, Nichols, Mayor Ridgeway
Noes: None
Abstain: None
Absent: Adams, Webb
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INDEX
AMENDMENTS TO THE NEWPORT BEACH MUNICIPAL CODE (100 -2004)
REQUIRING USE OF FRANCHISED SOLID WASTE HAULERS
FOR DEMOLITION ACTIVITIES.
Plazi Miller, Shellmaker, Inc., stated that after the City Council meeting
of December 9, 2003, he submitted a letter expressing his concern that
the amendments will make it difficult for businesses, such as his, to
compete with the recyclers. He stated that he received a response from
the City Manager explaining the amendments and also spoke with
the General Services Director and Management Assistant Hammond.
Mr. Miller stated that he's receiving inconsistent information, but that it
appears that the code wouldnt apply since demolition permits aren't
needed for the work that he does. He concluded his comments by stating
that there are some flaws to the proposed ordinance.
Mayor Ridgeway stated that it's not possible for a franchised hauler to
remove the debris from the water, as is done by Shellmaker, Inc. Mayor
Ridgeway confirmed with Mr. Miller that a demolition permit is not
obtained for the type of work that he does. Mr. Miller explained that he
was later told by Management Assistant Hammond that everyone has to
abide by the code. Mr. Miller stated that he's a proponent of recycling,
but that the code makes it too expensive and fosters bootlegging. Mayor
Ridgeway stated that the concerns of Mr. Miller should be addressed.
General Services Director Niederhaus stated that in order for the City to
meet the State's recycling mandate, it was decided to address heavier
materials, which primarily come from full demolitions of single - family
dwellings and businesses. He stated that the proposed ordinance
addresses this Construction and Demolition (C &D) debris, and that the
demolition contractors and franchised haulers have cooperated and
agreed to assist the City with its recycling efforts. General Services
Director Niederhaus stated that the City has made sure that the proper
entities are working to help the City meet its goals. In regard to the
comments made by Mr. Miller, he stated that Shellmaker, Inc., and
another similar business in the City, demolish and rebuild docks. The
problem is that the debris is taken directly to a landfill without any
recycling occurring. General Services Director Niederhaus stated that
the City has attempted to work with both businesses, by providing them
with information on where the debris can be taken so that it can be
recycled. They have also been encouraged to utilize franchised haulers.
Council Member Heffernan asked what the difference is between the
debris from a home demolition and the debris from a dock demolition.
General Services Director Niederhaus stated that there's no reason why
the debris from the dock demolition shouldn't be hauled away by a
franchised hauler, as is done for a home demolition. He stated that the
16% franchise fee would be passed on to the customer.
In response to Mayor Ridgeway's question, General Services Director
Neiderhaus stated that the average weight of a home demolition is
approximately 250 tons. City Manager Bludau confirmed that about 70%
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City of Newport Beach
Regular Meeting
February 24, 2004
INDEX
of it is recyclable, and General Services Director Niederhaus added that
there are facilities, such as concrete grinding facilities, that allow the
City to receive 100% recycling credit.
Council Member Webb asked what happens when a franchised hauler
takes debris to a recycling facility, but the material is not recyclable.
General Services Director Niederhaus stated that it is considered a
contaminated load and ends up in the landfill. Council Member Webb
asked what happens to chemically treated wood that is often found in
docks. General Services Director Niederhaus stated that such wood is
being phased out, but that it does need to be declared when taken to a
facility. Council Member Webb suggested that possibly marine related
demolition and the feasibility of recycling should be looked at further.
Mayor Ridgeway stated that the proposed ordinance is only an
amendment requiring notification to the General Services Department
prior to commencement of demolition. City Manager Bludau referred to
the staff report and pointed out the changes to the ordinance that are
being proposed.
Council Member Webb asked if a demolition permit will be required for
marine related demolitions.
In response to Council Member Nichols' question, City Manager Bludau
stated that material that goes to the landfill would be counted against the
City's recycling efforts.
Motion by Council Member Bromberg to continue the item for one
month.
The motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor
Ridgeway
Noes: None
Abstain: None
Absent: Adams
17. UNDERGROUNDING UTILITIES IN PROPOSED ASSESSMENT
DISTRICT NO. 81— RIVER AVENUE AND CHANNEL PLACE AND
DESIGNATION OF THIS AREA AS AN UNDERGROUND
UTILITIES DISTRICT [continued from earlier in the meeting].
City Clerk Harkless announced that a total of 9 ballots were received in
favor of the proposed assessment, representing an assessment amount of
$270,089.85 or 45.4 %, and 12 ballots were received in opposition to the
proposed assessment, representing an assessment amount of $324,772.19
or 54.6%.
[Editor's Note: Due to two unsigned ballots, which invalidated them, the
following represents the correct tabulation of ballots received: a total of 8
ballots were received in favor of the proposed assessment, representing
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City of Newport Beach
Regular Meeting
February 24, 2004
an assessment amount of $191,643.69 or 39 %, and 11 ballots were
received in opposition to the proposed assessment, representing an
assessment amount of $299,219.70 or 610A.]
Mayor Ridgeway announced that the assessment district failed, and
requested that the Public Works Director schedule a meeting for him and
Council Member Rosansky to meet with SCE and the phone company.
He stated that in lieu of a meeting, it could be requested of both utility
companies to reevaluate their costs and provide the information to the
City.
12. UNDERGROUND ASSESSMENT DISTRICT NO. 75 (BALBOA
BUSINESS DISTRICT) — STATUS REPORT.
Jim Hildreth stated that this item is coming back too quickly. He asked
for an explanation.
Motion by Council Member Webb to proceed with placing Assessment
District No. 75 Balboa Business District on the Council agenda for
Resolution of Intention for March 9, 2004 meeting.
The motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Bromberg, Webb, Mayor Ridgeway
Noes: None
Abstain: Nichols
Absent: Adams
15. EXCESS GENERAL LIABILITY INSURANCE RENEWAL.
Mayor Ridgeway stated that the staff report provides two options
regarding the premiums for insurance and the amount of insurance. City
Manager Bludau reported that staff recommends Option 2, which would
be Self- Insured Retention (SIR) of $500,000, coverage limit of $26 million
with three layers of coverage and an annual premium of $797,895.
Option 1 has less coverage with two layers of coverage. City Manager
Bludau stated that the question is if an additional $70,000 is worth the
additional $5 million in insurance.
Council Member Rosansky stated that the extra money provides for a
significant increase in the amount of protection.
Council Member Heffernan stated that Option 2 is consistent with the
City's prior policy on insurance coverage amounts.
Motion by Council Member Brombere to approve the renewal of the
excess general liability insurance coverage for a twelve month policy with
a self - insured retention (SIR) of $500,000 and a $1 million SIR for
Employment Practices Liability Insurance — EPLI as follows: [SIR -
$500,000; Coverage limits - $26 million; Annual premium - $795,895 ($1
million for EPLI).
Volume 56 - Page 716
INDEX
Assessment
District No. 75/
Balboa Business
District
(89/38 -2004)
(100 -2004)
City of Newport Beach
Regular Meeting
February 24, 2004
The motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Bromberg, Webb, Nichols, Mayor
Ridgeway
Noes: None
Abstain: None
Absent: Adams
L. PUBLI-C COMMENTS
• Jim Hildreth stated that he'll be discussing the City's webpage on him in
future meetings. Additionally, he expressed his curiosity over the way
the streets and boardwalks were replaced on Little Balboa Island. He
stated that he spoke with some of the workers and expressed his support
for California.
M. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES
Status report — Ad Hoc General Plan Update Committee (GPUC). No
report.
Status report — Local Coastal Program Certification Committee. No
report.
Status report — Newport Coast Advisory Committee. Council Member
Heffernan reported that the NCAC issues would be discussed later at the current
meeting.
Status report — Mariners Joint Use Library Ad Hoc Steering Committee.
No report.
Status report — Other Committee Activities. Council Member Heffernan
reported that progress is being made on the cable franchise ordinance and the
right -of -way ordinance, which deals with both cable franchises and utility
companies.
In regard to the Finance Committee, Council Member Heffernan reported that
the department heads are in the process of meeting with the City Manager about
their 2004 -2005 budgets.
N. CURRENT BUSINESS
INDEX
20. THE PROPOSED NEWPORT COAST COMMUNITY CENTER. 1 (100 -2004)
Using a PowerPoint presentation, Assistant City Manager Kiff stated
that the pre - annexation agreement with Newport Coast required that the
City would set aside $7 million to either build a community center or
provide rebates for eligible residents for assessment district debt. He
stated that the community center was expected to be up to 22,000 square
feet, owned and staffed by the City, and preference given to Newport
Coast residents for reservations. The Newport Coast Advisory
Committee (NCAC) looked at sites for the community center and chose
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City of Newport Beach
Regular Meeting
February 24, 2004
the edge of Newport Ridge Park as the preferred site. Assistant City
Manager Kiff displayed some of the alternative sites and pointed out that
the preferred site is at the corner of San Joaquin Hills Road and Newport
Coast Drive. He also displayed preliminary designs of the community
center.
Assistant City Manager Kiff listed the outreach efforts by the NCAC to
work with the community in determining if there was support for a
community center. They found that there was and pointed to the support
of the two master associations in Newport Coast. Assistant City Manager
Kiff stated that petitions have been received by the City, both in favor
and in opposition to the community center, and that additional
information can be found in the staff report. Assistant City Manager Kiff
stated that if the $7 million is not spent on a community center, it would
be used for assessment district relief and would be spread out over a
period of three years.
Assistant City Manager Kiff stated that the options that could be
considered by the City Council include deeming the outreach appropriate
and moving forward with building the center, asking for more outreach,
requesting that the site be "story poled ", asking for a vote of the
residents, or any combination of these options. He stated that the staff
recommendation is to conduct a vote and "story pole" the site.
Al Willinger stated that between 1997 and 2001, the budget for the
community center was established, but that costs have risen since that
time. He stated that the NCAC has been conscientious in following the
provisions of the pre - annexation and annexation agreements, and in
conducting the public outreach program. He noted that during the
outreach, it was consistently reported that 80% to 90% of the residents
supported a community center. The NCAC unanimously voted in support
of proceeding with the project. Mr. Willinger asked the City Council to
support the work of the committee and to not delay the project.
Council Member Bromberg asked if Mr. Willinger had heard of any
opposition to the community center. Mr. Willinger stated that 10% to
15% of the residents are not in support of the project. He stated that
some of the homeowners feel that the views from their homes may be
impacted and others feel that there isn't enough green space in Newport
Coast.
Mayor Ridgeway read from page 8 of the staff report, and noted that the
majority of those in the survey opposed, or were leaning towards
opposition of, the center. Mr. Willinger stated that he was not aware of
the particular survey outlined in the staff report. He stated that Gerry
Ross detailed the responses from the Town Hall meeting and reported
that the majority who attended the meeting supported the project.
Assistant City Manager Kiff explained that the City provided some
feedback forms and cards at the Town Hall meeting and at Pavilions.
The results outlined in the staff report represent those forms and cards
received back. Mayor Ridgeway asked if an explanation of how the
project would be funded was included in the questionnaire. Assistant
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City of Newport Beach
Regular Meeting
February 24, 2004
INDEX
City Manager Kiff stated that the intent of the questionnaire was to get
immediate feedback after a presentation was made. Mr. Willinger stated
that he has the signatures of 83 individuals who are in support of the
community center. He noted again the two master associations who are
also in support of the community center, and stated that he's not aware of
any of the approximately twenty homeowners associations in Newport
Coast being opposed to the community center. City Manager Bludau
asked Mr. Willinger if residents were asked if they would prefer the
assessment relief over a community center. Mr. Willinger responded in
the negative, but stated that it was a part of some of the presentations.
Council Member Nichols asked Mr. Willinger why he would be opposed to
conducting a vote of the residents of Newport Coast. Mr. Willinger stated
that the NCAC has done its job and followed the provisions of the pre -
annexation agreement, which does not allude to a vote of the residents
being taken. Council Member Nichols confirmed with Mr. Willinger that
it was the NCAC that also negotiated the pre- annexation with the City.
Mr. Willinger added that four of the current members were on the
committee that negotiated the agreement, but that the steering
committee represented a larger group.
Mayor Ridgeway asked what the lanquage in the agreement is regarding
the community's desire for a center, as indicated on page 4 of the staff
report. Assistant City Manager Kiff referred to attachment F of the staff
report, which includes the language of Section 7 of the pre- annexation •
agreement. He specifically noted Section 7(f), which states that the
NCAC will hold meetings to consider the residents' interest in a
community center, and if deemed desirable, will recommend to the City
Council an appropriate location. Assistant City Manager Kiff stated that
he and some others question if the full community has been reached.
Mayor Ridgeway asked how the vote would be conducted. Assistant City
Manager Kiff explained that a quick turnaround would be desired, so
something in the mail would probably be the most appropriate. Mayor
Ridgeway stated that if a vote is conducted, the NCAC should take part
in the drafting of the document. Regarding the "story poles', Mayor
Ridgeway stated that poles cannot be put up that represent a $10 million
facility, because the City will not contribute the $3 million needed above
the $7 million agreed upon. He stated that it's premature to put up
"story poles" when the project still needs to be scaled down. Additionally,
he stated that the placement of the buildings on the site should be
reconsidered.
[Mayor Pro Tem Adams arrived at the meeting.)
Gary Wright stated that the soccer association in the area has no place to
meet and the community center is a facility that could be utilized.
Additionally, he stated that the basketball court at the community center
is also needed, and that the additional parking will provide a safety
advantage. He stated that the residents are fully aware of the project
and there should not be any further delays. •
Neal Steinbrenner stated that those in opposition to the community
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City of Newport Beach
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center were opposed prior to learning that the assessment relief was not
as great as they had expected, the access to the community center
wouldn't be just off of Newport Ridge Drive East and that much of the
green space at the park would remain. Mr. Steinbrenner stated that
there are possible alternatives to the project's elevation and design.
Council Member Heffernan stated that in the pre - annexation agreement,
it states that the NCAC can recommend the site for the community
center, but that it is up to the City Council to implement the design.
Additionally, Council Member Heffernan stated that the NCAC is a
strong advocate for the center and he questioned if they could fairly
access the community's opinion. He further noted their opposition to
conducting a vote or "story poling ". Council Member Heffernan stated
that the NCAC is determined to have the community center built, and
that they know the risks of the money that is available and the opinions
of the residents.
Motion by Council Member Heffernan to approve the NCAC's
recommendation to move forward with the planning and construction of
the Newport Coast Community Center at the selected site and that it be
redesigned to stay within the $7 million budget.
Council Member Nichols stated that the community center is only a small
part of the pre - annexation agreement, which the City has already
undertaken.
Council Member Webb expressed his support for the placement of the
buildings on the site and the driveway on San Joaquin Hills Road, and
added that the parking lot will serve both the community center and the
athletic fields. He stated that the remaining issue is that the project will
need to be scaled down to keep it within $7 million. He felt that if a
community center is not built and the assessment relief alternative is
chosen, the residents will still want a community center at some time in
the future. He pointed out that any outreach program will never reach
everybody, but that there has been enough to realize that there isn't a
great deal of opposition to the project. Council Member Webb stated that
the City Council should move forward with the project, but keep it at $7
million.
Council Member Bromberg stated that the City does an outstanding job
of public outreach, even though some people will always be missed. He,
additionally, noted the importance of the support by the master and
homeowners associations.
Council Member Rosansky referred to page 8 of the staff report and the
reasons given by the opponents for why they opposed the project. He
stated that one of the reasons was that there isn't the need for a
community center because many of the homeowners associations have
their own gathering areas. Council Member Rosansky stated that most of
these gathering areas are within gated communities and it means to him
that the need for a central area is even more important because it
provides an area where the whole community can come together. He also
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City of Newport Beach
Regular Meeting
February 24, 2004
INDEX
referenced the disagreement over whether a library component should be
WF
included in the project and stated that a redesign of the project will be
necessary anyway, and the library component can be decided on at that
time. In response to the opposition stating that the community center
will take away turf and open space, which would adversely impact the
quality of life, Council Member Rosansky stated that he feels a
community center would improve the quality of life for the area. In
response to the traffic that the community center would generate,
Council Member Rosansky stated that he hopes the community center
and athletic fields are well used and that the nearby intersection
currently has little traffic. In regard to the alternate use of the $7 million
for assessment district relief, he stated that a community center is
needed and that it is a better use of the money. Finally, Council Member
Rosansky agreed with earlier comments that the outreach effort was
extensive. He felt that the City Council should take a leadership role and
make a decision on the community center, based on the information
provided. He did not feel that a vote of the residents should be taken.
Mayor Ridgeway confirmed that the motion included a redesign of the
community center to keep it within the $7 million.
Council Member Heffernan stated that it should be made clear that the
NCAC did their job and made a recommendation, and it should be
supported pursuant to the pre - annexation agreement.
Mayor Pro Tem Adams confirmed that staff will work with the architect
•
and come back to the City Council prior to going out for Requests for
Proposals (RFP) for the final design.
The motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor
Ridgeway
Noes: None
Abstain: None
Absent: None
21. CONFERENCE AND VISITOR'S BUREAU AGREEMENT.
C -2638
Conference &
Revenue Manager Everroad stated that the proposed changes to the
Visitor's Bureau
agreement include the term of the agreement and the funding
(38/100 -2004)
mechanism of the agreement. Historically, the Conference and Visitors
Bureau (CVB) has received all of the Visitor Service Fees (VSF), which is
1% of the 10% rate imposed by the hotels, and a portion of the Transient
Occupancy Tax (TOT). During the past five years, the CVB has received
between 13.5% and 17% of the total TOT/VSF collected. He stated that
staffs recommendation has simplified the funding mechanism.
Specifically, it recommends that 16.5% of the total collected and remitted
by hotels to the City be provided to the CVB. He stated that the CVB
proposal includes a formula of 17% for the first eighteen months of the
agreement, 18.5% for the next eighteen months and no less than 18.5 56
.
for the remaining two years. He noted that the staff report outlines both
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City of Newport Beach
Regular Meeting
February 24, 2004
proposals.
INDEX
Council Member Webb asked for a clarification on the length of thi
agreement. Revenue Manager Everroad stated that the curren
agreement expired in August of 2003, and was extended througi
February of 2004. The proposed agreement would commence March 1
2004, for a five -year period. He added that the proposed agreement
would require that the City and the CVB meet annually to discuss budget
situations and funding needs.
Council Member Rosansky confirmed with Revenue Manager Everroad
that the assumed annual growth is 1.3 %, which Revenue Manager
Everroad stated has been the average annual growth for the past five
years. Council Member Rosansky confirmed that there was a decline
after September 11, 2001, and that possibly a growth of more than 1.3%
could be seen in the future. Revenue Manager Everroad added that staff
performed projections based on no growth for the next five years, 1.3%
average annual growth and 5% growth. He stated that based on the staff
recommendation of 16.5 %, the CVB would receive approximately
$200,000 more in compensation at the 5% growth than at the 1.3%
growth. Council Member Rosansky confirmed that at the projected
growth of 1.3 %, the CVB would receive an additional $82,000 the first
year, over the current agreement, if the staffs recommended 16.5% level
is used.
Marta Hayden, Executive Director, CVB, stated that the CVB originally
asked for 18% the first year, 19% the second year and 20% the third year.
She asked for the City Council's support of this proposal. Ms. Hayden
stated that the CVB is currently spending $1.7 million annually. At the
16.5% level, assuming a 1.3% growth and an increase in spending of 3 %,
the CVB would fall short by approximately $258,000 the first year and
$549,000 the second year.
Mehdi Eftekari, General Manager, Four Seasons Hotel, stated that the
CVB wants to maintain funding levels adequate to represent
Newport Beach as a destination. He stated that the CVB has worked
very hard to increase tourism and promote Newport Beach, and is
competing with new hotels from Santa Barbara to San Diego. He noted
that the major hotels in Newport Beach have spent in excess of $90
million on renovations, while cutting costs in operations and increasing
sales efforts. Mr. Eftekari stated that the hotels are working with the
CVB to increase the revenues being brought into the City and helping the
businesses in the area.
Clayton Shurley, President of the Newport Beach Restaurant Association
and Chairman of the Board of the Newport Beach Chamber of Commerce,
stated that the CVB does a good job of helping Newport Beach to become
one of the strongest cities in the country. He asked the City Council to
support their efforts and approve their proposal.
• Tom Johnson, Board' of Directors, CVB, stated that the staff
recommendation includes a cap, which he disagrees with. He stated that,
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City of Newport Beach
Regular Meeting
February 24, 2004
INDEX
instead, the CVB should be encouraged to produce more revenue for the MW
hotels, which the City will also benefit from.
Steven Sutherland asked the City Council to support the CVB to the
fullest extent possible. He stated that they provide value to the City and
that TOT is the highest net revenue to the City. Mr. Sutherland
explained that the net revenue from the major hotels in the City, after
cost of services, is greater than the combined total of every restaurant
and every retail outlet, not including automotive and yacht sales. He
stated that the CVB should be supported in their efforts to keep the hotel
rooms in the City occupied.
Craig Batley stated that he is speaking on behalf of the vacation rental
industry and expressed his support of keeping the CVB budget at the
highest funding level possible. He stated that the CVB is the only official
sales effort in the City that promotes and attracts visitors, and that the
vacation rental industry generates nearly 13% of the TOT and, therefore,
13% of the CVB's budget. Mr. Batley stated that the CVB is considering
a new program to promote short -term rentals, but that it can't happen if
the City doesn't increase funding above the 16.5% level. He also noted
the sales tax generated by vacation and hotel visitors. He asked the City
Council to provide the necessary funding so that the CVB won't have to
cut its budget.
Brion Amendt, General Manager of Newport Channel Inn and CVB
Board of Director, stated that there has been fierce competition in the
hospitality industry in the past few years. He stated that the CVB can
fill hotel rooms and their marketing efforts can maximize revenue to the
City. Mr. Amendt stated that the increased percentage being asked for
by the CVB is necessary and will make a difference. Lastly, he stated
that a cap makes no economic sense.
Linda Mongno, Vice President and General Manager of Hornblower
Cruises & Events and Past Chair of the CVB, asked the City Council to
support the CVB's funding request. She stated that the competition is
fierce and Newport Beach's voice needs to be heard. Ms. Mongno stated
that visitors contribute a significant amount of revenue to the City. The
hospitality industry also employs thousands of workers that contribute
financially to the health of Newport Beach. She stated that the revenue
that goes to the CVB is reinvested to generate more revenue for the City.
She noted that the cost to market and sell a destination continues to go
up, and the CVB's current funding represents the lowest level in more
than six years and during its most competitive time. Ms. Mongno stated
that supporting the CVB's request is an investment in the financial
health of the community. In closing, she stated that the hospitality
industry is willing to do their share to generate revenues to the City and
is asking the City to do their share.
Mayor Ridgeway stated that the City Council has a greater responsibility
to the City's budget, which will be reduced for the upcoming fiscal year.
He stated that the hotels in the City have the ability to increase the TOT .
percentage, but they have refused. He noted that other cities are doing
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February 24, 2004
this and Newport Beach has one of the lower TOT's. He expressed his
support for the staff recommendation of the 16.5% level, but stated that
he would remove the cap.
[Mayor Ridgeway left the meeting.]
Richard Luehrs, President and Chief Executive, Newport Beach Chamber
of Commerce, stated that the CVB funding is also important to the
Chamber of Commerce, and that the Chamber of Commerce unanimously
supports the CVB's funding request and the removal of the cap.
Mr. Luehrs stated that the CVB funding not only assists the hotels, it
also impacts the small business owners in the City. He agreed with
earlier comments that the cost to do business is increasing. He stated
that Newport Beach is fortunate to have professional hotel operators in
the City and if they feel that the funding needs to be increased, they
should be listened to.
Barbara Sloate, President of Whirl -A- Round, stated that as a small
business owner, she depends on the CVB to market Newport Beach as a
destination on a level that she can't afford to do on her own. Ms. Sloate
stated that the CVB needs increased revenue to promote Newport Beach,
or the businesses and the City will suffer.
Andrew Theodorou, General Manager, Newport Dunes Waterfront
Resort, stated that the TOT from the Dunes Recreational Vehicle UM
resort represents about $250,000 to $300,000 annually, and that they rely
on the CVB to support and promote them with their programs. He
requested that the City Council approve the 18% level with no cap.
Peggy Fort, consultant to the CVB, Restaurant Association and Corona
del Mar Business Improvement District, encouraged the City Council to
support the CVB to the best of its ability. She stated that many of the
small businesses and restaurants in Newport Beach will benefit even
more than the major hotels, because they often can't market themselves
effectively. Ms. Fort stated that the tourism industry is very competitive
and is experiencing some dynamic changes, and that Orange County is
growing. She stated that it is important that Newport Beach be a leader.
Debbie Fabbri, Southwest Airlines, CVB Board Member and Orange
County Tourism Association Board Member, expressed her support for
the CVB and asked the City Council to increase their financing, which
would be reinvested in the tourism market. She stated that Southwest
Airlines is the largest airline in Orange County, and she provided
information on the amount of money that is spent and invested in Orange
County. Ms. Fabbri stated that Southwest Airlines also helps to promote
Orange County and provided information on the amount of money spent
by tourists. She urged the City Council to remove the cap, which would
allow the CVB to earn more revenue for the City.
Bill Gunderson, General Manager, Marriott Hotel, complimented the
Revenue Manager and the City's staff, and stated that the CVB and the
City work together in a partnership. He noted that the CVB represents
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City of Newport Beach
Regular Meeting
February 24, 2004
INDEX
more than hotels and plays a major role in attracting business to the
community. He stated that competition is fierce, and sales and
marketing are essential. In response to Mayor Ridgeway's earlier
suggestion, Mr. Gunderson stated that increasing the TOT would only
put Newport Beach at a greater disadvantage.
Bruce Brainerd, General Manager of Hyatt Newporter, CVB Vice Chair
and Chamber of Commerce Board Member, stated that the CVB's current
annual funding is $1.3 million and that it has been as high as $1.9
million, which was in 200012001. He stated that the staff
recommendation to approve a 16.5% level would bring the CVB's funding
to $1.4 million, which is still not where it needs to be, and that the 18%
level being recommended by the CVB would still require the CVB to cut
its budget by $200,000 annually. Mr. Brainerd noted that the sales and
marketing efforts by the hotels has increased, and that the CVB
programs are needed to keep Newport Beach competitive. He encouraged
the City Council to invest in the City and consider the comments made at
the current meeting.
Ms. Hayden stated that the various segments of the visitor industry have
been represented at the current meeting, which shows the value that the
visitor industry has on the community. She stated that the CVB is
appreciative of staffs recommendation, but that it won't get the CVB to
the next level. She asked that the City Council consider the CVB's
request for 18 %, with a review after one year and an increase to 19 %, and
then an increase to 20 %.
Mayor Pro Tem Adams referenced the staff report and the CVB's
agreement the prior week to go to 17% and 18.5 %. Ms. Hayden explained
that after running the numbers, it was discovered that 17 0.6 would put the
CVB in jeopardy.
Council Member Bromberg stated that the City Council can acknowledge
its responsibility to the citizens by helping to bring money into the City,
and that he has confidence in the CVB and the businesses that make up
the CVB Board of Directors. He noted the community business leaders in
attendance at the current meeting, and stated that it truly is a
partnership with the City. Council Member Bromberg agreed that the
competition is fierce and that the CVB needs the funds to work with. He
expressed his support for going above the 16.5% and removing the cap.
Council Member Webb stated that the difference between 16.5% and
17.5 0.6 appears to be between $70,000 and $80,000, which won't make up
the difference that the CVB is looking for. Council Member Webb
confirmed with the Revenue Manager that other cities have increased
their TOT's.
Motion by Council Member Webb to approve a five -year agreement
with the Newport Beach Conference and Visitors Bureau, which includes
annual funding provisions at 17.5% of the total Transient Occupancy
Tax/Visitor Service Fee, no cap and a review after two years.
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Mayor Pro Tem
conditions, he'd be
years, at this point.
Adams stated that, given the current economic
more comfortable not committing to 17.5% for five
Council Member Bromberg stated that the motion allows the City to
review the CVB's performance and make an adjustment, if necessary. It
protects both sides.
Council Member Webb further explained that if the TOT increases go up
at the lower rate, or 1.3 %, the funding level would be increased to 15.5%
to provide the CVB with additional funding. If the TOT increases are
greater, both the City and the CVB would be getting more revenue, so the
level would remain at 17.5 %.
Council Member Heffernan stated that he's impressed with the CVB and
feels that they should get what they're requesting. He added, however,
that they should be held accountable. He stated that they need to report
to the City Council annually and show that they've produced, as they've
stated that they can with appropriate funding levels. Council Member
Heffernan stated that if they haven't produced, their funding levels
would be decreased.
Mayor Pro Tem Adams asked for the purpose of the cap in the staff
recommendation. Revenue Manager Everroad stated that the cap would
only be an issue in the third year of the CVB's original proposal and if
there's 5% growth.
City Manager Bludau stated that he would be negligent if he did not
bring to the City Council's attention that the City's budget is out of
balance by $1.5 million. He stated that it is hoped that the revenue that
comes in before the end of the fiscal year will improve the situation, but
the City Council needs to be aware that the expenditures approved at the
current meeting won't be available when discussing the upcoming budget.
Council Member Bromberg asked if the City Manager is concerned that
the CVB won't bring in additional revenue to the City. City Manager
Bludau stated that he doesn't feel that it'll be automatic. Council
Member Bromberg agreed that it's a risk, but the City does have a
partnership with the CVB. Both agreed that the CVB does a good job.
Ms. Hayden stated that the agreement and the CVB's performance will
be reviewed annually. City Manager Bludau asked when the return on a
promotional effort is usually expected. Ms. Hayden stated that they are
always working and its continual.
Council Member Rosansky asked if there's an objective way to measure
the CVB's success. Ms. Hayden stated that they have several
measurements that they use, and that they quantify everything that they
can. Council Member Rosansky asked how much other cities are
devoting to their CVB's. Revenue Manager Everroad stated that he
didn't have the figures with him at the current meeting. City Manager
Bludau stated that it ranges greatly. Council Member Rosansky stated
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City of Newport Beach
Regular Meeting
February 24, 2004
that he understands the effect of spending money to make money, but
that he also understands the concerns for the City budget. He expressed
his support for an annual adjustment and believes that the CVB should
receive what they're asking for.
Council Member Nichols asked how other cities compare to Newport
Beach with regard to their TOT rate. City Manager Bludau stated that
every city has a TOT, and that they generally run between 8% and 13 %.
He stated that in addition to the TOT, some cities, such as Newport
Beach, contribute to a visitor promotion effort. Council Member Nichols
confirmed that Newport Beach's TOT is 10 %. Ms. Hayden stated that
Los Angeles has a 14% TOT and Anaheim has a 15% TOT, but that the
majority of the cities in California are at 10 %. She noted that some of the
cities also have other means of funding, or a combination of funding.
Mayor Pro Tem Adams asked what the difference is between the 16.5%
and 17.5% at a 5% increase. Revenue Manager Everroad stated that he
didn't have that particular breakdown, but that the staff report indicates
the increase from the current agreement for both staffs recommendation
and the CVB's proposal. He added that the CVB's request at the current
meeting would mean an increase of $212,000 over the current agreement
in the first year, $302,000 in the second year and $394,000 in the third
year. Mayor Pro Tem Adams asked what the impact on the upcoming
City budget would be if the motion were approved. Revenue Manager
Everroad stated that it would be about $150,000 over the current funding
level. Mayor Pro Tem Adams asked how much leeway the annual review
provided. City Attorney Burnham stated that one reason for the cap is to
account for the additional TOT that would result from new hotel and
resort development. He suggested that the annual adjustment consider
this factor. Mayor Pro Tem Adams asked how the timing of the annual
adjustment would work.
Council Member Bromberg asked when the CVB sees the return on
money that is spent and if it would be seen within a year. Ms. Hayden
stated that the impact would begin within a year.
Council Member Nichols asked if it would be beneficial to the industry if
the hotels lowered the TOT.
Substitute motion by Mayor Prp Tem Adams to approve a five -year
agreement with the NBCVB, which includes annual funding provisions at
18.0% of the total TOT/VSF, with annual adjustment provisions based on
economic conditions and NBCVB performance and no cap.
The substitute motion carried by the following roll call vote:
Ayes: Heffernan, Rosansky, Adams, Bromberg, Nichols
Noes: Webb
Abstain: None
Absent: Mayor Ridgeway
22. STAFF PROPOSAL TO ADD TWO PLAN CHECKERS AND ONE
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PART -TIME PERMIT TECHNICIAN POSITIONS TO REDUCE
RELIANCE ON CONTRACT PLAN CHECKERS AND TO
IMPROVE CUSTOMER SERVICES IN THE BUILDING
DEPARTMENT.
Motion by Council Member Bromberg to approve a budget
amendment (BA -035) transferring $27,641 from account number 2930-
8080 and $4,359 from unappropriated general fund balance to various
salary and benefit accounts in division 2930 to cover the cost of employees
added in this fiscal year.
Council Member Webb asked if the motion included the remodeling
necessary to move the plan checkers to an area near the inspectors, and
the inspectors to a trailer.
Mayor Pro Tem Adams also asked if the staff recommendation included a
recommended alternative for space considerations. City Manager Bludau
stated that staff prefers the first alternative in the staff report, as
outlined by Council Member Webb.
Council Member Nichols asked if better service would possibly be seen
through the use of private industry. He stated that there's been problems
in the past.
• Mayor Pro Tem Adams stated that he's asked the same questions and is
satisfied that the new positions are needed and would provide better
se rvice.
Richard Luehrs, Building Code Board of Appeals, stated that the Board
discussed the issue and came to the same conclusions. He stated that the
complaints have been about the work done by the outside consultants and
that it is felt that a better job could be done by hiring the additional
employees.
The motion carried by the following roll call vote
Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols
Noes: None
Abstain: None
Absent: Mayor Ridgeway
23. PROPOSED MODIFICATIONS TO THE CITY MANAGER
EMPLOYMENT AGREEMENT.
Council Member Heffernan stated that he, Council Member Webb and
Mayor Ridgeway served on the City Council Ad Hoc Compensation
Committee. He stated that they compared the City Manager's salary and
compensation package with other city managers in Orange County,
evaluated City Manager Bludau's performance, and recommend a 4%
. salary increase to be effective on January 1, 2004, with no increase for
2005. He stated that this rewards the City Manager for a job well done,
and establishes a two -year contract.
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City of Newport Beach
Regular Meeting
February 24, 2004
Motion by Council Member Heffernan to adopt Resolution
No. 2004 -17 to enter into a two -year employment agreement with the
City Manager which includes a one time 4% salary increase for the period
from January 3, 2004 through January 3, 2006.
The motion carried by the following roll call vote
Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols
Noes: None
Abstain: None
Absent: Mayor Ridgeway
O. MOTION FOR RECONSIDERATION - None
P. ADJOURNMENT —at 11:25 p.m.
The agenda for the Regular Meeting was posted on February 18, 2004, at
3:15 p.m. on the City Hall Bulletin Board located outside of the City of Newport
Beach Administration Building. The supplemental agenda for the Regular
Meeting was posted on February 20, 2004, at 3:30 p.m. on the City Hall Bulletin
Board located outside of the City of Newport Beach Administration Building.
City Clerk
Recording Secretary
Mayor
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