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HomeMy WebLinkAbout01 - Minutes - 6-8-04June 22, 2004 Agenda Item No. 1 CITY OF NEWPORT BEACH City Council Minutes Study Session June 8, 2004 - 4:00 p.m ROLL CALL Present: Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Absent: Heffernan (excused) CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Council Member Rosansky noted that there was language change to Item 5 (Public Right -of -Way Ordinance). City Manager Bludau reported that the change was placed before Council. 2. BUDGET — DEPARTMENT PRESENTATIONS. City Manager Bludau stated that this is the third budget review. He reported that the first study session occurred the day the deal was announced between the League of California Cities and Governor Schwarzenegger regarding shifting Educational Revenue Augmentation Funds (ERAF). He utilized a PowerPoint presentation, stating that the budget is developed over several months amidst changing dynamics. He noted that it is difficult to predict all the scenarios. He indicated that, as presented, the preliminary budget is based on conservative, yet realistic revenue estimates, which is a practice that has served the City well. He added that this. budget is actually less conservative than in the past few years. He stated that the budget is also based on a status quo expenditure plan with few program changes. He reported that they always hold back funds for Council to use at their discretion to enhance programs, fulfill funding requests, and add capital improvement projects. He stated that these funds are included in the final budget via the budget checklist. City Manager Bludau indicated that, throughout the budget process, they assumed that the State would take an additional $1.3 million from the City. However, they have been informed that the State is increasing the amount they will be taking from local governments through a shift of property tax, sales tax, and the Vehicle License Fee (VLF), which increases the City's loss to $2.1 million. He reported that this leaves the City with a budget shortfall of $761,000. He -indicated that a way to deal with this was to utilize some of the Council's $675,000 discretionary fund. City Manager Bludau reported that, based on updated information regarding property taxes, they believe they can increase the revenue estimate by $300,000 which is a 2.12% increase over fiscal year 2003 -2004. He indicated that this increase exceeds past practices but does not appear to be unreasonable. Administrative Services Director Danner reported that when the Governor's budget was put out in December or January they were not sure where the loss was going to come from, so they took it all from property tax ($1,351,000). He stated that, when that number is added to Volume 56 - Page 958 INDEX (100 -2004) City of Newport .Beach Study Session Minutes June 8, 2004 INDEX what the property tax will be this current year and the $300,000 they think they can increase the estimate by, it is actually a 5.82% increase over the current year. Mayor Pro Tem Adams asked what the increase was in secured property tax last year over the previous fiscal year. Mr. Danner believed it was about 8 %. City Manager Bludau reported that this changes the shortfall figures and decreases the Council's discretionary fund to $213,430. He noted that the City has already received funding requests from community groups in the amount of $140,000. City Manager Bludau reported that other options to get more money include using the reserves, reviewing capital improvement projects to identify general fund funded projects that could be delayed, or implementing a reduction in department maintenance and operation (M &0) accounts. Assistant City Manager Kiff referenced the Budget Detail and stated that there are no changes in staffing in the City Manager's Department. He indicated that the 8080 account (professional and technical services) includes a number of special projects that are difficult to predict, like the G -1 environmental document, Marinapark relocation impact report, and appraisals of income properties. He stated that the 80804 account (fuel modifications) will reimburse the Newport Coast sub - associations for fuel modifications. Mr. Kiff stated that there are no changes to the Public Information Officer budget. He noted that the Code and Water Quality Enforcement Division was moved into the City Manager's Department lastyear and there are no changes to the division this year. He stated that the subdivisions in Harbor Resources consist of Parking Operations, Balboa Yacht Basin, and General Operations that reviews harbor permits, administers permits; conducts inspections, and checks plans for new docks. He indicated that there are no significant changes to the Harbor Resources budget. He noted that there is a proposed parking lot fee increase on tonight's agenda. He stated that there are also no changes on the expenditure side. City Manager Bludau reported that the Balboa Business Improvement District has recommended to Council that the Balboa Pier parking lot fee not be increased. Mr. Kiff added that this increase is not assumed in the budget. Regarding the 8080 account, he explained that there is a significant increase from the prior year's budget because the TetraTech consultant was moved from the City Manager's budget to the Harbor Resources budget. He noted that there is also money available to pay Harbor Patrol to administer all the moorings. Human Resources Director Axley stated that their budget includes the Risk Management and Personnel Divisions. She reported that the only personnel change is that they transferred a Human Resource Specialist from Personnel to Risk Management since benefits are now functioning under Risk Management. She utilized a PowerPoint presentation, noting that the workers compensation claims administration fees and reserves are not in the Risk Management budget, but are in the Insurance Reserve Fund. She reported that the only increase is for $8,000 in the 8080 account due to COBRA administrative fees and Section 125 flex benefits. She stated that the majority of their expenses support employee tiring functions and explained that the 80 recruitments they do a year are mostly for temporary summer help along with replacement hires, but no new positions. She added that the rest of the expenditures are mostly for training Volume 56 - Page 959 City of Newport Beach Study Session Minutes June 8, 2004 INDEX and tuition reimbursement. City Manager Bludau noted that the only new hire next fiscal year is in the Utilities Department for the reservoir cover maintenance person. City Attorney Burnham reported that there is really no change in the proposed City Attorney Department budget except for the retirement of the City Attorney which will occur in August 2004. He indicated that there is a budget item for replacement of the office furniture since it is about 26 years old. Mayor Ridgeway asked if the budget takes into consideration the hiring of a new City Attorney. Mr. Burnham indicated that the budget has a position for a City Attorney. Mr. Bludau added that the budget also includes money if the City wanted to hire Mr. Burnham under contract. Mr. Danner utilized a PowerPoint presentation and read the mission statement for the Administrative Services Department. He reported that the proposed increase from the amended current year budget to the proposed budget for the new year is about $600,000, adding that they are not proposing any new fulltime employees. He noted that they are proposing an additional .26 fulltime equivalent (FTE) employee for temporary help in the Revenue Division, but that only equals about $1,200 a year. He reported that the department consists of five divisions and utilized slides to highlight each of their functions, the number of employees, and their budgets. He clarified that the $600,000 increase is due to the PERS employer increase ($160,000), the PC replacement and software license program ($250,000), the cost to cover the salary of the Contract Administrator for the entire year ($44,000), the part -time staff ($1,200), outsourcing the printing ($98,000), and the rest is distributed throughout the budget. He noted that the Fiscal Services Division began :a program this fiscal year in which they take on the responsibility of maintaining copiers on a Citywide basis (account 8031) since they found this to be a big cost savings. Regarding MIS, Mr. Danner stated that account 8030 (maintenance and repair — equipment) is the division's largest expenditure and is for the lease of the City's hardware and ..software. Further, account 8112 (utilities — telephone) represents charges for the entire City, not just the department's. He noted that account 9005 (PC replacement program) and account 9006 (software licenses) are the programs he mentioned previously and reported that the money will eventually be distributed Citywide. Regarding Revenue Division account 8080, he stated that about $100,000 represents the bill outsourcing program that began this year. Mr. Danner displayed a slide of the City's debt services, excluding assessment districts. Mayor Pro Tem Adams asked if the City has looked at. any debt restructuring. Mr. Danner indicated that they continually analyze this and the interest rate is about 5 %. He concluded by showing slides of the significant.revenues that the department bills for; the amount of property tax, sales tax, transient occupancy tax, and business license tax the department is responsible for; and the major charges and fines the City levies and collects. Mr. Bludau believed that the debt service slide is significant since the outstanding debt is $35 million, but $15 million is for Newport Coast. He indicated that this information would be good to share with them since they sometimes feel that the City is not spending very much money on them. Mayor Ridgeway suggested having Mr. Danner share this with Council Member Heffernan. Volume 56 - Page 960 City of Newport Beach Study Session Minutes June 8, 2004 INDEX Chief McDonell utilized a PowerPoint presentation to show that the Police Department's proposed budget is $34.7 million compared to $32.7 million for fiscal year 2003 -2004. He displayed a pie chart to show that over 85% of their budget goes toward personnel related costs, and only .4% is for capital outlay. He stated that the budget had an overall 6.2% change, noting that salaries and benefits accounted for 96.5% of that increase due to MOU increases, PERS rate increases, and other personnel related increases. He explained that the PERS safety rate went from 17.6% to 26.1 %; and the PERS miscellaneous rate went from 0% to 4.3 %. Further, there is an additional 5% cost increase due to salary step increases. He stated that the $251,000 increase in the M &O represents 12.5% of their total budget increase. He reported that there are areas in the building that have never been remodeled in over 30 years, the City Manager approved some new supplemental equipment, the vehicle fuel cost has increased, the ABLE cost increased by $50,000 due to fuel increases and normal swings in maintenance since they are out of warranty, vehicle replacement costs increased by $28,000, and there are ongoing contract increases. He added that there is a $182,000 decrease due to the mobile video project which will be on the next agenda for an award of bid. Chief McDonell displayed slides of the budget and personnel by division. He reported that there are 237 full-time employees, of which, 37% are non -sworn personnel. He noted that there are no new positions or programs. He also utilized slices to show each division's organizational chart and lists each of their responsibilities. In response: to Mayor Pro Tem Adams' questions about the alarm monitoring program, Chief McDonell reported that they went live about a month ago. He stated that they have about 6,500 alarm.accounts; however, they only have about 400 homes directly monitored by them. He stated that they only had a small amotait of directly- monitored homes because they really didn't encourage it since they didn't have the equipment that they do now. He confirmed that, if the house is not directly monitored, the Police Department receives a call from a central station. Chief McDonell reported that the total estimated revenue is about $4.9 million and displayed a list of the significant revenue sources. He noted that the Orange County Public Safety Augmentation revenue is shared with the Fire Department. He reported that they will receive over $219,000 in grants next fiscal year through a variety of State and Federal sources. He displayed a list of the grants. In response to Mayor Ridgeway's questions regarding PERS, Mr. Danner stated that they are anticipating PERS safety rates to go up in fiscal year 2005 -2006 another 4% or 5 %. He indicated that PERS is finally seeing some decent rates of return and exceeding what they are estimating. He reported that, at their April board meeting, PERS lowered their target for the rate of inflation, salary increases, and the investment rate of return. He stated that they hope to see the PERS rates level out by fiscal year 2005 -2006 or fiscal year 2006 -2007. Fire Department Support Services Manager Ulaszewski reported that Fire Chief Riley is in Lviv, Ukraine this week as the ambassador for the Federal Emergency Management Agency (FEMA) and the United States Fire Chief Volume 56 - Page 961 City of Newport Beach Study Session Minutes June 8, 2004 ►1 Association. Uity Manager bludau noted that the trip was not budgeted, but is being paid for by FEMA. Mr. Ulaszewski utilized a PowerPoint presentation and displayed the Fire Department's mission statement. He reported that their budget will be $25.7 million which is a 6.8% increase. He noted that the budget is generally flat with the exception of the $1.6 million increase due to MOU and PERS adjustments; the $54,000 increase in the M &O due to adjustments in contracts; and a $40,000 decrease due to increasing the budget a year ago to buy the 12 lead cardio monitors. He displayed the divisional budget detail, reporting that they have 136 sworn positions, 12 miscellaneous positions, and 30.28 full -time equivalent positions which are mostly seasonal lifeguards. He stated that 85% of their budget goes toward salaries and benefits, 13% is for M &O, andless than 1% is for capital outlay. He displayed a list of the revenue sources. noting that the Junior Lifeguard Program fees are used entirely for the program Mr. Ulaszewski displayed a list of their significant program issues and reported that 62% of personnel have less than three years experience in their current positions and there are major changes with the management team. He stated that they had major upgrades in their Emergency Medical Services (EMS) program, including initiating a Countywide multi - casualty incident plan to improve coordination and response; implementing the 12 lead cardiac monitoring program to do diagnostic work in the field so Hoag Hospital could make decisions about patient care before the patient arrives at the hospital; starting the Aculert Medical History Program; adding larger ambulances so necessary medical procedures can be performed enroute; and having five paramedics this year and three next year,going through the training program. Mr. Ulaszewski reported that there is continued emphasis for emergency disaster preparedness and this is still one of the top goals of their management team. He noted that they received $94,000 in grants which paid for weapons of mass destruction response kits, two more thermal imagers, a safety ladder training program, the CERT program, and the disaster preparedness program. In response to Mayor Pro Tem Adams' question, Mr. Ulaszewski s noted that they will not be adding any new positions or monies into new programs. Building Director Elbettar reported that the Building Department budget does not contain any new programs, but there are pay adjustments and PERS adjustments. He displayed a breakdown by division of their $3 million budget and highlighted the number of employees in each division. He utilized a table to show their revenue sources since fiscal year 2001 -2002, noting that they estimate their revenue total for this year to be about $4.2 million and $3.6 million next year. He stated that about 80% of the construction activity is residential construction due to the increased activity in Santa Ana Heights. He highlighted the March 2004 Revenue Report, noting that the number of inspections has increased from 37,000 to 39,000 due to heavier activity. He displayed the March 2004 Construction Activity Report and pointed out the increase in the number of total valuations, number of permits issued, and number of plans submitted. Regarding the construction valuation, Mr. Elbettar displayed a bar chart and reported that they have been averaging $200 million for the last seven years. He noted that the drop was due to September 11. He stated that the 8080 account reflects the two new positions and is also used for Volume 56 - Page 962 City of Newport Beach Study Session Minutes June 8, 2004 INDEX outside consultants. He reported that they would like to explore ways to provide cashier services at the permit counter for permits, plan checks, and fee collections; combine the issuance of building, electrical, plumbing, and mechanical permits into one combination permit which will save on paperwork; and increase counter plan review and permit issuance services once both positions are filled. Planning Director Temple utilized a PowerPoint presentation, reporting that the Planning Department's budget is about $800,000 less than last year's budget due to budgeting for the entire General Plan Update process the prior budget year. She stated that there are three divisions in the Planning Department and highlighted their functions, budgets, and staffing. She noted that no positions have been added; however, they reclassified one Associate Planner to a Senior Planner and one Assistant Planner to a GIS Analyst. She stated that the Planning and Building Departments' activity and workload levels are attached to each other, reporting that they have had an unusual amount of large discretionary cases this year (St. Andrew's Church, Marinapark, and St. Mark's Church) and indicated that they do not see this trend stopping next year. She added that plan checks have increased 20 %, which was 20% more than the year before. She noted that Council allowed them to hire two people two years ago because of .:he increase. Ms. Temple reported that they have also seen increased numbers of appeals and calls for review, and increased code amendments. She displayed a, slide which discusses their revenue and pointed out that they have met and exceeded the revenue projections that were given to Council when they increased their fee schedule. She noted their significant special projects and reported that they included $100,000 in the M &O budget for professional services to help support the certification of the LCP. Further, they still have $35,000 in this year's budget to put out two Citywide newsletters about the General Plan Update, and the $140,000 in the Economic Development budget represents the City's matching funds for the business improvement districts. In response: to Council Member Rosansky's question, Ms. Temple explained that the salary increase from $1.4 million to $1.6 million is due to reclassifications, salary range restructuring of the Senior Planner position, and PERS increases. General Services Director Niederhaus introduced Deputy General Services Director Pisani who put together their budget. He reported that General Services is the third largest department in the City. He utilized a PowerPoint presentation and displayed their allocation plan for the past three years. He noted that there is a steady increase in all the areas except capital outlay. He reported that, after five years, they were able to shift the capital improvement program (CIP) monies to M &O so these functions are now paid for with general fund money. He noted that they manage the internal service fund for equipment maintenance and replacement. He displayed a breakdown of the budget and the budget increases by division, and highlighted the increases due to Newport. Coast. Mr. Niederhaus discussed the revenue estimates and grants slide, clarifying that the supplemental tree trimming amount should be much higher than $1,000. Regarding the significant expenditures slide, he reported that it is no longer free to dump the recycled concrete at the Ewles Materials facility. He noted that the large expenditure in the Refuse Division is the fee the City pays to CRT; however, half the amount is recoverable due to the recycling surcharge. He reported that the price of diesel has escalated 80% since Volume 56 - Page 963 City of Newport Beach Study Session Minutes June 8, 2004 INDEX last summer and the price of gasoline is up 60% since the first of the year. He clarified that there are 11 additional vehicles not 10, as shown in the internal service fund slide. He reported that the General Motors - sponsored lifeguard trucks have been replaced to meet the new service demands, there was money set aside to replace the electric vehicles, and the additional vehicle is for an Oasis Senior Center bus that will be brought to Council for consideration. Council Member Webb noted that storm drain cleaning is being contracted out and asked if this leaves General Services with extra vactor trucks that could be shared with or turned over to the Utilities Department to help them with their cleaning programs. Mr. Niederhaus indicated that they already .hare vactors with Utilities. Mr. Niederhaus referenced the vehicle and equipment purchases slide, reporting that they are proposing to replace 59 vehicles next year versus 26 vehicles this year. He noted that some of the vehicles are electric vehicles thai are going out of service and will be replaced with a gasoline model. He explained that the electric vehicles are being recalled by Toyota, but reported that they have been very cost effective since electricity is cheaper than gas. He noted that the program has been fully funded with Air Quality Management District (AQMD) grant money. He pointed out that there are no grant monies for hybrid vehicles. Mr. Niederhaus reported that they are not buying or have bought any heavy duty diesel vehicles for two years. He reported that the AQMD regulations for public and private fleets, street sweepers, and trash vehicles were challenged by the engine manufacturers and the private trash haulers. The decision by the Supreme Court about 45 days ago exempted private fleets, but kept public fleets under Rules 1186, 1193, and 1196 which state that public entities could not buy any diesel vehicles weighing over 14,500 pounds. He stated that, if the District Courts do not allow relief from this, it would cost the City $2 million, not counting the expense to have a natural gas fueling facility ($500,000 to $700,000). He reported that the City bought extra diesel several years ago and the budget includes replacing the bodies on sweepers and trash vehicles to keep the diesel chassis running until the Supreme Court or one of the legal entities finds them exempt- He stated that, once they are exempt, they intend to come back to Council to ask to purchase the deferred diesel vehicles. Mr. Niederhaus reported that the California Air Resources Board (CARS) detected what public entities were doing, i.e. rebuilding the diesel equipment, and are requiring them to retrofit all old diesel vehicles with $5,000 to $10,000 particulate filters and maintain them every six months. He noted that the City does not have any smoking vehicles and that, every time there is preventative maintenance, they put a meter on the exhaust pipe by State law to ensure that the vehicles burn clean. In response to Council Member Nichols' question, Mr. Niederhaus explained how the particulate filters work. Library Services Director Katsouleas reported that their budget for this year is $4,901,440 which is only $2,601 more than last year. She utilized a PowerPoint presentation to highlight the seven divisions in Library Services. She noted that most of the expenses are in Administration since it covers all of the system services for the four branches and the Central Library which services about 85,000 patrons a week and is open 71 hours. She displayed the personnel slide and clarified that they have not added an employee. She explained that the Volume 56 - Page 964 City of Newport Beach Study Session Minutes June 8, 2004 INDEX people who left the library were at Step 8, their replacements are at lower steps, and this ended up saving the department enough money for a part -time position. She indicated that this money will be taken out of their budget. She displayed the library revenue slide and reported that fees for services will decrease because they now send out alert emails to notify people when their books are going to be overdue. She noted that they are being very conservative regarding intergovernmental reimbursements because, last year, the State initially cut out public library funding and reimbursement for non - resident users, but put it back in after the budget was passed. Regarding miscellaneous revenues, she stated that they are not doing as many facility rentals. Regarding the expenditures slide, Ms. Katsouleas noted that their primary expenditure is for materials and reported that the donations they receive from the Friends of the Library is mostly used for library materials. She reported that utility costs are high because the four branches are open 236 hours a week. She stated. that equipment and computer maintenance seems high for a department of their size, but the public expects to be able to utilize computers and staff needs them in order to assist the public Ms. Katsouleas reported that their goal is to focus on providing better access and services to their customers by using internal staff to improve website access and procedures to make customers more comfortable with their services. Additionally, their goal is to consolidate the collections and services at Mariners Library with the school. Ms. Katsot leas reported that City grants go back to community organizations, the Sister Cities' funding is used to support their cultural activities on an international level, and the money for special department supplies are used to preserve the City's art. In response to Council Member Webb's questions about the new Mariners Library which will open in August/September 2005, Ms. Katsouleas reported that over the year they have been gradually purchasing materials at the Mariners Library and deselecting old and outdated material. She stated that they expect no major outlay before the consolidation of the two collections. She indicated that, if they have special needs, the Friends of the Library have agreed to help therm. She added that they have set aside the Ackerman Interest to pay for computers. She stated that the rest will hopefully be absorbed through fundraising; they will be doing over the next year. In response to Council Member Nichols's questions, Ms. Katsouleas reported that there are about 80,000 visitors to the Central Library, 6,000 to the Balboa Library, 4,000 to the Corona del Mar Library, and about 20,000 to the Mariners Library. She indicated that the smaller branches tend to cost more because they require the staffing for the hours they're open, use of the facility, etc. She indicated that the Corona del Mar Library is an older branch that has had less renovation and tends to be a little bit more expensive in terms of infrastructure and maintenance. Regarding what branch costs more than another, she stated that the size of the branch, hours of operation, use of the collection, and type of collection have to be taken into consideration. Volume 56 - Page 965 - City of Newport Beach Study Session Minutes June 8, 2004 INDEX Kecreation and ,error ,ervices Director Knight reported that their budget is just over $3.5 million which is an 8% increase over last year. She noted that 40% of that increase represents salaries and increases in pay, 31% is to transition a transportation program at the Oasis Senior Center, and the rest covers increased programs and services which are offset by increased revenues. She reported that salaries make up 55% of the total budget. She noted that $1.3 million of the $1.7 million M &O is in the 8080 account. She stated that half of that amount covers the contract classes, instructors, and officials, and the other half covers building maintenance for all of the City's park facilities. She noted that the budget has 20 full -time employees but they are proposing adding two more employees. Ms. Knight displayed an organizational chart of the three divisions and their responsibilities. She reported that the City has the largest adult sports league and one of the largest contract class programs in the County. She reported that a majority of their revenue comes from fee based classes. She noted that they try to recover 85% of the cost for all special activities, but some fees are only at a 50% cost recovery. Regarding the Park Patrol program, she stated that the expenses if it was a full year was projected to be $49,000, but noted that the three fees used for the program total $53,000. Regarding the Oasis Senior Center, Ms. Knight reported that they provided 13,000 transportation trips, served 19,000 congregate and home delivered meals, and had over 67,000 seniors participate in classes last year. She stated that their estimated revenue is about $95,000, emphasizing that a majority of what they offer is free. She displayed a slide of additional funding sources that total $429,000 which brings the services at Oasis to about a $1.2 million operation. Council Member Webb stated that he believed that the Friends of Oasis provided more support than $85,000. Ms. Knight stated that their expenses were about $350,000; however, a great deal of that is administrative overhead. Further, some of that is expenses to raise money. She reported that they conducted an audit and if you look at what was considered a donation or program support to Oasis, it was $85,000 and about $70,000 paid for two transportation drivers. Council Member Webb believed that the Friends have a very large base that could contribute more toward the operation, but are presently electing not to. In response to Council Member Nichols's questions, Ms. Knight reported that the City's funding for transportation is about $140,000, but there is additional transportation funding from Hoag Hospital ($86,000), the Orange County Transportation Authority (OCTA) ($76,000), and the Friends of Oasis ($70,000). Ms. Knight indicated that the significant budget change is not to increase the transportation program at Oasis, but consolidate it. She reported that currently there are four vans and drivers that service Oasis. She indicated that one van and driver is a contract service through Western Transit, using OCTA funds. She stated that the City owns the other three vehicles; however, the City only employs one of the three drivers while the Friends employ the other two drivers. She reported that they are proposing to consolidate the service under the City's control because there is liability and risk with having non - employees drive City - owned vans, and there are employees doing the same job at the same facility but operating under different employment rules and benefits. She recommended that the City relinquish the contract service and use those funds to employ the Volume 56 - Page 966 City of Newport :Beach Study Session Minutes June 8, 2004 two drivers. She emphasized that this is not an increase in funding or cost to the City, Eut gives the City control of the program to be more efficient. She stated that they will study this over the next months and, if they see a need to increase services, they will discuss this with the Friends who have shown an interest in potentially funding additional services. Ms. Knight explained that the only reason Hoag was going through the Friends to employ the drivers was because the City did not have the ability to accept the donation, but it does now. Ms. Knight concluded by highlighting the slide listing their goals. City Manager Bludau stated that supplemental budget items should be provided tonight at the public hearing. He asked if Council was satisfied with the presentaticn format. Mayor Ridgeway indicated that he likes the budget presentaticn format, but does not like the small print of some of the PowerPoint slides. Council Member Webb stated that what the Finance Committee indicated they wanted to see was essentially what staff presented. PUBLIC COMMENTS - None. ADJOURNMENT - at 6:11 p.m + + + + + + + + + + + + + + + + + + + + + + + + + + + + + ++ The agenda for the Study Session was posted on June 2, 2004, at 3:55 p.m on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 56 - Page 967 INDEX CITY OF NEWPORT BEACH City Council Minutes DRAFT Regular Meeting June 8, 2004 - 7:00 p.m. INDEX — 4:00 p.m CLOSED SESSION — 6:15 p.m + + + + + + + + + + + + + + + + + ++ A- RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING B. ROLL CALL Present: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Absent: None C. CLOSED SESSION REPORT — No report D. PLEDGE OF ALLEGIANCE —Mayor Pro Tem Adams E. INVOCATION — Council Member Webb F. Elks Lodge Announcement of Flag Day Celebration. Mikal White, Exalted Ruler and President of Newport Harbor Elks Lodge No. 1767, introduced Rick Blake, his Leading Knight, and stated that the Elks Lodge would like to hold a Flag Day ceremony at 6:00 p.m. on June 14, 2004, at City Hall. He provided the program and stated that the American Legion, the Harbor Area Boy Scouts, Girl Scouts and Sea Scouts, and the Newport Harbor band would be involved. He asked the City Council's permission for the ceremony to become an annual community event. Mayor Ridgeway requested that the City Manager provide the assistance necessary to accommodate the ceremony. Mr. White stated that the groups involved will take care of everything, and the public is just invited to attend and honor the American Flag. Mayor Ridgeway thanked the group for their effort. Presentation by Christine Pieton, Chair of the Corona del Mar High School `Every 15 Minutes" Program Christine Pieton, Corona del Mar High School senior, stated that she organized the `Every 15 Minutes" program for her senior project and that it was conducted on May 25 and 26, 2004. Ms. Pieton explained that every fifteen minutes, someone in the country dies or is seriously injured in an alcohol - related traffic collision, and that the program educates teens on the harsh realities of drinking and driving. She explained how the program was conducted and that it was a reenactment of an alcohol - related traffic collision and its consequences. Ms. Pieton felt that her project was a Volume 56 - Page 968 City of Newport.Beach Regular Meeting June 8, 2004 INDEX success and made a difference. She thanked those in the City who helped make it possible. Mayor Ridgeway stated that he witnessed the mock accident, and that it was very powerful and made a significant impact on many individuals. He thanked Ms. Pieton and stated that the City was proud to be involved. Ms. Pieton stated that there is an effort to implement a program called CAC, which represents the initials of a recently killed student and stands for Call A Cab. She asked if it was possible to receive City funding for the program. Mayor Ridgeway suggested that Ms. Pieton follow through on the request with his secretary. 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 Heffernan announced that the Corona del Mar High School baseball team won the California Interscholastic Federation (CIF) Division IV championship on June 5, 2004. • Council Member Heffernan requested that at a future meeting, a new Council policy be submitted to the City Council for consideration confirming the City Council's commitment to the highest standards of ethics and honesty. He specifically requested that the policy require semi - annual study sessions to review the Political Reform Act (PRA), Fair Political Practices Commission (FPPC) guidelines, and other relevant laws, decisions and regulations to help the City Council and others understand the City Council's legal obligations. Council Member Heffernan also requested that the policy require all members of the City Council and boards and commissions to carefully review each agenda and determine in advance if any of the items could impact their source of income or their property. He also requested that the policy require members of the City Council, its appointees and staff to report to the City Attorney any conversation or course of conduct that creates the appearance of a conflict of interest. And, lastly, that the City Attorney be required to investigate each report. • Council Member Bromberg announced that the 111h annual Balboa Island Parade on June 6, 2004, was a huge success with about 5,000 people in attendance. He listed and thanked those that contributed their time, effort and money. • Mayor Ridgeway announced that there are a number of ways to receive information about City meetings and agendas. He stated that the agendas and public hearing notices are posted on the City Hall bulletin board and can also be received in some cases by e-mail, distribution through the mail or in the Daily Pilot. Mayor Ridgeway stated that an adc.itional source has been added. Members of the public who wish to view public notices and simplified City Council agendas can do so regularly on Fridays and Mondays, from 7:30 p.m. to 8:00 p.m., on Adelphia Channel 3 and Cox Channel 30. The information will repeat Volume 56 - Page 969 City of Newport Beach Regular Meeting June 8, 2004 itself throughout the half hour. I. CONSENT CALENDAR READING OF MINUTESIORDINANCES AND RESOLUTIONS 1. MINUTES OF THE ADJOURNED REGULAR AND REGULAR MEETING OF MAY 25, 2004. Waive reading of subject minutes, approve as written and order filed. (Mayor Pro Tem Adams abstained on this item). 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. ORDINANCES FOR INTRODUCTION 3. Item removed from the Consent Calendar by a member of the audience. ORDINANCES FOR ADOPTION 4. CODE AMENDMENT NO. 2004 -003 (PA2004 -066) - REQUEST TO AMEND DISTRICTING MAP NO. 25 TO ESTABLISH A 10 -FOOT SETBACK ON ORANGE AVENUE FOR A PROPERTY LOCATED AT 3315 CLAY STREET (PA2004 -066). Adopt Ordinance No. 2004.10. 5. Item removed from the Consent Calendar by a member of the audience. 6. Item removed from the Consent Calendar by Council Member Nichols. RESOLUTIONS FOR ADOPTION 7. AD HOC TELECOMMUNICATIONS COMMITTEE: EXTENSION OF TERM. Adopt Resolution No. 2004 -42 extending the term of the Ad Hoc Telecommunications Committee to June 30, 2005. S. Item removed from the Consent Calendar by Council Member Nichols. CONTRACTS AND AGREEMENTS 9. REQUEST FOR FUNDING FOR PROPOSED UNDERGROUND ASSESSMENT DISTRICT NO. 101 (AREA BOUNDED BY EAST EDGEWATER AVENUE/EDGEWATER PLACE, ISLAND AVENUE, EAST BALBOA BOULEVARD, AND ADAMS STREET AND BUENA VISTA BOULEVARD, LINDO AVENUE, AND WEST BAY AVENUE) (contd. from 5/25/04). 1) Authorize an advance (04BA -061) from the General Fund in the amount of $102,745 to Assessment District No. 101 and appropriate $40,000 to 74101 -9810 for electric design, Volume 56 - Page 970 11 N (100 -2004) (100 -2004) Underground Assessment District No. 101 (89/100 -2004) City of Newport Beach Regular Meeting June 8, 2004 INDEX Volume 56 - Page 971 $40,000 to 74101 -9811 for phone design, and $22,745 to 74101 -9812 for assessment engineering services; and 2) authorize the City Manager to execute a Professional Services Agreement with MuniFinancial in the not to exceed amount of $22,745 for assessment engineering services. 10. Item removed from the Consent Calendar by Council Member Nichols. 11. CLEAN BEACHES - STORM DRAIN DIVERSION SUPPORT C- 3485(A) SERVICES - APPROVAL OF PROFESSIONAL SERVICES Clean Beaches AGREEMENT WITH EVEREST INTERNATIONAL (38/100 -2004) CONSULTANTS, INC. (contd. from 5/25/04). Approve a Professional Services Agreement with Everest International Consultants, Inc. of Long Beach for Storm Drain Diversion Support Services at a contract price of $5 ",613 an authorize the Mayor and the City Clerk to execute the agreement. 12. Item removed from the Consent Calendar by Council Member Nichols. 13. 32r'D STREET TIDE VALVE REPLACEMENT - AWARD OF C -3667 CONTRACT (C- 3667). 1) Approve the plans and specifications; 32 ^d Street Tide 2) ;award the contract (C -3667) to GCI Construction, Inc. for the total bid Valve price of $77,970 and authorize the Mayor and the City Clerk to execute Replacement the contract; 3) establish an amount of $7,000 to cover the cost of (38/100 -2004) unforeseen work; and 4) approve a budget amendment (04BA -067) in the amount of $10,635 from the Tide and Submerged Land fund balance, 230- 3605, to Tide and Submerged Land, Tidal Valve Replacement Program, 7251- C3170722. 14. APPROVAL FOR SUBDIVISION IMPROVEMENT AGREEMENT (100 -2004) FOR TRACT NO. 16468. 1) Approve a Subdivision Improvement Agreement guaranteeing the completion of the public improvements required by Tract Map No. 16468; and 2) authorize the Mayor and the City Clerk to execute the Agreement. 15. OCEAN FRONT WALKWAYS - MCFADDEN SQUARE - C -3660 COMPLETION AND ACCEPTANCE OF CONTRACT (C- 3660). Ocean Front 1) Accept the work; 2) authorize the City Clerk to file a Notice of Walkways Completion; 3) authorize the City Clerk to release the Labor and (38/100 -2004) 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. MISCELLANEOUS ACTIONS 16. TRANSFER OF TRAFFIC CONGESTION RELIEF FUNDS TO C -3649 MEET STATE GUIDELINES. Approve a budget amendment (04BA- Traffic 068) transferring $50,492.63 of the appropriation for the Newport Congestion Boulevard 26th Northerly Project (C -3649) from the Gas Tax Fund, 7181- Relief Funds C5100729 to the Traffic Congestion Relief Fund, 7191- C5100729, and (38/100 -2004) transfer $34,000 from 7191- C5100714, Jamboree Road Rehabilitation, Volume 56 - Page 971 City of Newport Beach Regular Meeting June 8, 2004 Ford to Bison, to 7191- C5100729, Newport Boulevard 2&h Northerly. 17. Item removed from the Consent Calendar by Council Member Nichols. 18. BUDGET AMENDMENT TO INCREASE REVENUE ESTIMATES WITH AN UNANTICIPATED REVENUE OF DIRECT LOAN REIMBURSEMENT FROM THE STATE OF CALIFORNIA AND TO APPROPRIATE SPECIFIED FUNDS TO A REVENUE ACCOUNT AND A CAPITAL IMPROVEMENTS ACCOUNT. Approve a budget amendment (04BA -070) to increase revenue estimates in 4010 -4834 by $93,199.18, the amount of an additional CSLA Direct Loan payment to the Newport Beach Public Library, and to appropriate $79,200 to Capital Improvements account 7017- C4009617 for upgrading Library CPU's, with the remaining $13,999.18 to be added to the unappropriated fund balance in the Mariners Library Building fund, 450 -3605. 19. BUDGET AMENDMENT TO ACCEPT A CHECK FROM MARCIVE AND APPROPRIATE FUNDS TO MAINTENANCE & OPERATIONS BUDGET ACCOUNT FOR FY 2003 -04. Approve a budget amendment (04BA -071) in the amount of $6,820. 20. BOARD AND COMMISSION SCHEDULED VACANCIES — CONFIRMATION OF NOMINEES. Confirm the nominees as listed in the staff report. 21. TELECOMMUNICATIONS FACILITY PERMIT NO. 2003 -003 (PA2003 -255) (contd. from 5/11/04). Continue to July 137 2004 Motion by Mayor Pro Tem Adams to approve the Consent Calendar, except for those items removed (3, 5, 6, 8, 10, 12 and 17); and noting the abstention by Mayor Pro Tem Adams on Item No. 1. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None J. PUBLIC HEARINGS 22. FISCAL YEAR 2004 -05 PROPOSED BUDGET HEARING. City Manager Bludau stated that now is the time for the public to provide their input on the proposed budget, which the City Council has been considering at their last three study sessions. He stated that it is also the time for the council members to request items for the supplemental checklist. Mayor Pro Tem Adams confirmed with the City Manager that the public Volume 56 - Page 972 INDEX (100 -2004) (100 -2004) (100.2004) (100 -2004) (100 -2004) City of Newport .Beach Regular Meeting June 8, 2004 will also have the opportunity to provide input at the City Council meeting of June 22, 2004, when the budget will be adopted. Mayor Ridgeway opened the public hearing. Jim Hildreth stated that the access structure that he has been asking for should be included in the budget. Hearing no further testimony, Mayor Ridgeway closed the public hearing. Council Member Nichols stated that he'd be submitting his requests to staff. Council Member Webb requested that the construction of a section of sidewalk that's missing on Irvine Avenue, between Private Road and Santiago Drive, be included. He stated that the expected cost is between $60,000 and $100,000. Mayor Ridgeway agreed with the request of Council Member Webb. Council Member Bromberg requested that an additional $5,000 be added to the $10,000 grant for the Balboa Museum & Historical Society, $6,540 to the Balboa Island Improvement Association for holiday lighting ass:,stance, $2,500 to the Irvine Terrace Association for holiday lighting ass:.stance, $35,000 to refinish 160 light poles on Balboa Island, $60,000 for replacement globes for 193 light standards, $32,500 for median landscaping on Park Avenue, and $27,000 for a budget differential for Marine Avenue street tree replacement covers. He stated that Balboa Island is one of the most significant tourist destinations in Newport Beach, and also requires high maintenance. He noted that his requests total $168,000. Council Member Rosansky requested that money be included in the budget for development of Sunset Ridge Park. He stated that this would probably total approximately $60,000. Additionally, he requested that money be allocated towards a study to look at upgrading Coast Highway from the entrance of the City to the Arches Bridge. Council Member Heffernan requested that funds be budgeted to light the crosswalk on Port Seabourne between the two greenbelt patches, adjacent to Anderson School, and also for speed bumps on a trial basis on Port Provence Place. Additionally, he requested that $25,000 be budgeted for the design of monuments to the entrance of Newport Coast, adjacent to Sage Hill School. Council Member Heffernan also requested funds to provide actual improvements to Newport Hills Drive East at the natare park. Mayor Ridgeway requested that $50,000 be allocated to Phase III of the Balboa Village project. He specifically stated that this would be for the des'.gn of the roadway and sidewalk work. 23. 2004 -05 APPROPRIATION LIMIT HEARING. Volume 56 - Page 973 INDEX (100 -2004) City of Newport Beach Regular Meeting June 8, 2004 Administrative Services Director Danner stated that Proposition 4, which is also known as the Gann Initiative, limits the growth of governmental expenditures to a combination of the Consumer Price Index (CPI) and a population inflator. He stated that all cities are required to adopt an appropriations limit annually, which is a limit on appropriations or expenditures that are financed by taxes. Mayor Ridgeway opened the public hearing. Hearing no testimony, Mayor Ridgeway closed the public hearing. Motion by Council Member Webb to adopt Resolution No. 2004 -44 approving the City's Appropriation (Gann) Limit for the 2004 -05 fiscal year in the amount of $112,315,605. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None 24. CORPORATE PLAZA PLANNED COMMUNITY AMENDMENT — PLANNED COMMUNITY DEVELOPMENT PLAN AMENDMENT NO. 2004 -002 (PA2004 -073). Council Member Heffernan recused himself from the item because his office is located at Corporate Plaza. Mayor Ridgeway stated that he has an office across the street from Corporate Plaza and asked if he should also recuse himself. In response to City Attorney Burnham's question, Mayor Ridgeway stated that it's a month -to -month lease and that he expects to be out within 27 days. City Attorney Burnham stated that he should not have a conflict, under the circumstances. Council Member Bromberg stated that he is two blocks away and on a long -term lease. City Attorney Burnham stated that it would be a conflict of interest if the office is within 500 feet, unless it could be established that there would be no financial impact. Council Member Bromberg stated that his office is not within 500 feet. Senior Planner Campbell stated that the amendment would reallocate some of the medical office use square footage from sites 8, 9, 11 and 22 to sites 2, 3 and 17. He referred to a typographical error in the staff report and noted that the square footage for sites 8, 9, 11 and 22 should read 63,447, not 63,087. Senior Planner Campbell stated that the amendment would allow for medical office use on the first floor at 17 Corporate Plaza and also allow sites 2 and 3 to develop small medical office uses. Volume 56 - Page 974 INDEX (100 -2004) City of Newport Beach Regular Meeting June 8, 2004 INDEX In response to Mayor Ridgeway's question, Senior Planner Campbell stated that staff has worked closely with The Irvine Company and the building owners, and the reallocation is acceptable to them. Council Member Nichols asked if site 17 is a new site. Senior Planner Campbell stated that the first floor is already developed as medical office use, and that sites 2 and 3 currently have plan checks pending with the Bu:.lding Department. He explained that the proposed amendment will fix an error in the Corporate Plaza Planned Community document, and legally allow the existing and requested developments. Council Member Nichols asked if The Irvine Company is in agreement with the proposed amendment. Assistant City Manager Wood stated that she has spoken with The Irvine Company and that they do agree with what is being proposed. Mayor Ridgeway opened the public hearing. BiL. Lange, property manager and representative of the owner at 17 Corporate Plaza, stated that the proposed action will change their development from nonconforming to conforming. He stated that this would be beneficial, but asked that the entire 22,500 square -foot building be zoned as medical. Mr. Lange provided a brief history of the building, and explained that it was believed that medical was a permitted use on the first floor and that extensive improvements were made based on this belief. Mr. Lange stated that if the second floor cannot be zoned for medical, the owner will lose the higher medical rent and, more importantly, it has already adversely affected the desire of the current renters to renew their lease. Hearing no further testimony, Mayor Ridgeway closed the public hearing. Mayor Ridgeway asked if the City has jurisdiction over the requested reallocation. Senior Planner Campbell stated that The Irvine Company would most likely want to retain as much of the medical office use as possible for their sites, but that the City does control the document and could change the allocation. He added that the required noticing was done, but that the notice did not include specific square footages. Mayor Ridgeway expressed his concern for considering the additional reallocation being requested by Mr. Lange at the current meeting. Council Member Webb confirmed that approving the request would take away square footage from the other buildings. Council Member Nichols stated that the City Council shouldn't have the right to approve such a request. Assistant City Manager Wood suggested that staffs recommendation could be considered at the current meeting and any additional requests could be agendized for a future meeting. Mayor Ridgeway asked if the City has jurisdiction to do an additional reallocation of the medical square footage held by The Irvine Company on Volume 56 - Page 975 City of Newport Beach Regular Meeting June 8, 2004 sites 8, 9, 11 and 22 at the current meeting. City Attorney Burnham responded in the negative and explained that the agenda does not reflect such action. Mayor Ridgeway stated that the owner of the building at site 3 has invested in medical equipment and is ready to open his business, but can't do so until the proposed amendment is made. Motion by Council Member Brombere to introduce Ordinance No. 2004 -13 approving Planned Community Development Plan Amendment No. 2004 -002; and pass to second reading on June 22, 2004. Council Member Nichols asked if written permission from The Irvine Company should be obtained first. Council Member Bromberg confirmed with Assistant City Manager Wood that they have already verbally stated their support for the recommended action. City Attorney Burnham added that their permission is not required. In response to Mayor Pro Tem Adams' question, Council Member Bromberg agreed that the request of Mr. Lange should be looked at by staff and agendized for a future meeting. Mr. Lange was advised to contact staff and The Irvine Company in regard to his request. The motion carried by the following roll call vote: Ayes: Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: Heffernan Absent: None 25. REVISIONS TO APPEAL AND CALL FOR REVIEW PROCEDURES — CODE AMENDMENT NO. 2004 -002 (PA2004 -028). Senior Planner Alford stated that the amendment has three basic components, which include the deletion of the calls for review procedures. He explained that all reviews by the City Council or the Planning Commission would be regarded as appeals. Secondly, Senior Planner Alford stated that the amendment would require two members of the City Council to initiate the appeal process. Lastly, he reported that the procedures for reporting actions have been standardized and clarified. Council Member Nichols confirmed that the intent of requiring the reporting of actions within five days of the decisions is to make sure that there's time to meet the 14 -day appeal period limit. Mayor Pro Tem Adams disagreed with extending the appeal period to 21 days, as suggested in the staff report. He felt that the objective of looking at the appeal procedures was to require two council members to appeal an item so that time would not be wasted on an appeal that would most likely not result in a decision being overturned. Additionally, he thought that there were some concerns about violating the Brown Act if a council member needed to contact several council members to find one that Volume 56 - Page 976 INDEX (100 -2004) City of Newport .Beach Regular Meeting June 8, 2004 INDEX would support the appeal. Senior Planner Alford stated that the L1 -day period was suggested if an appeal was required to be made at a public meeting. Later, it was decided that an appeal could be made through the City Clerk's office and the 14 -day appeal period maintained. In response to a question by Mayor Pro Tom Adams, Senior Planner Alford added that in the past, a vote of the City Council was required to call an item up. He stated that it was changed because the appeal period was shortened to 14 days. Mayor Ridgeway asked if there's a Brown Act violation if a council member decides to call an item up and calls around to the other council members to solicit support for his appeal. City Attorney Burnham responded in the affirmative. Council Member Bromberg stated that he requested that the item be agendized and that it resulted from too many items being called up that shouldn't have been called up. He stated that the expense to the applicants needs to be considered. Mayor Pro Tem Adams stated that if the City Council desires to approve the option in the staff report that requires the appeal be done at a public meeting and extends the appeal period to 21 days, that it might be better to require a majority vote at a public meeting, as was done in the past. Council Member Bromberg stated that his primary concern is that call ups currently only require one council member. Assistant City Manager Wood stated that the Planning Commission's recommendation is to require two members of the City Council to appeal a decision, but that it not be required at a public meeting. This would allow the 14 -day appeal period to be kept. Council Member Bromberg asked how many council members could be contacted to find support for an appeal before it would be considered a violation of the Brown Act. City Attorney Burnham stated that there'd only be the potential for a violation, but that it would be easier to possibly violate the Brown Act by engaging in a course of communication with a quorum outside of a public meeting. Assistant City Manager Wood stated that the Planning Commission's recommendation wouldn't necessarily require two -way conversations amongst the council members. She suggested, for example, that the City Clerk could advise the other council members by e-mail when an appeal by a council member is received. City Attorney Burnham stated that the suggestion could present other problems. Council Member Rosansky asked how many call-ups there have been over the past couple of years. Senior Planner Alford stated that he didn't have the information available at the current meeting. Council Member Heffernan stated that the number of call ups doesn't warrant the major change to the procedure that is being recommended. He also felt that when an item is called up that the council member should be required to give the reason for doing so. He stated that this would save the applicant and staff, time and money, and focus the attention on the issue under question. Volume 56 - Page 977 City of Newport Beach Regular Meeting June 8, 2004 INDEX Mayor Pro Tem Adams agreed and felt that the call-ups should occur at a public meeting to avoid the potential for Brown Act violations. He also expressed his concern for extending the appeal period to 21 days, and stated that it would have far reaching impacts on applicants and their ability to get the approvals needed to move forward with their projects. Council Member Nichols asked if the period could be 14 days or at the next City Council meeting, whichever occurs later. City Attorney Burnham stated that the report that went to the Planning Commission did have that suggestion included. Motion by Council Member Bromber�r to require two council members for an appeal, to require that it be done at a City Council meeting and that a reason for the appeal be given. Mayor Ridgeway opened the public hearing. Jim Hildreth referred to the report that went to the Planning Commission and stated that members of the general public should be allowed the same appeal period as the Planning Commission and the City Council. Hearing no further testimony, Mayor Ridgeway closed the public hearing. At the request of Council Member Heffernan, City Attorney Burnham stated that the motion would mean that two council members must call up an item at a City Council meeting, that one of the council members must state the reason for the call up and that the effective date of the lower body's decision would depend upon the next opportunity for the call up. He added that in the case of the items before the Planning Commission at their meeting on June 3, 2004, the current meeting would be the opportunity for the call up. Council Member Bromberg clarified that his motion is not referring to call ups by the general public. Planning Director Temple stated that the Planning Department provides the City Council with a report of the actions taken by the Planning Commission with the supplemental agenda packet. Council Member Heffernan stated that the minutes of the meeting aren't available in time to meet the call up deadline, however. He stated that it's important to him to know what the various planning commissioners stated at their meeting. Mayor Ridgeway stated that this problem exists already with the current call up procedures. Council Member Rosansky asked for a clarification of the current procedure. Assistant City Manager Wood stated that a council member has the entire 14 -day period to call an item up for review and that it Volume 56 - Page 978 City of Newport .Beach Regular Meeting June 8, 2004 doesn't have to happen at a public meeting. Council Member Rosansky confirmed that by requiring two council members to call up an item, the requirement for a call up to occur at a public meeting is recommended because of the potential for violating the Brown Act. Mayor Pro Tem Adams stated that the two issues are the frivolous call- ups and if there is a call-up that the applicant understands the reason for the call-up. Council Member Rosansky agreed that if there is a call-up that the reason, or reasons, should be articulated. He stated that he'd still like to know how many call-ups there have been and noted that there's only been two since October 2003. He stated that he didn't see the need for the amendments. Council Member Nichols stated that it would be important to have call- ups conducted at a public meeting, but that it's difficult to know what happened at a Planning Commission or Modifications Committee meeting without having either attended the meeting or read the minutes. Mayor Ridgeway stated that all modifications are published, and that the problem is delaying the applicant while he waits for the appeal period to lapse. Mayor Ridgeway agreed that it would beneficial to have the minutes and also felt that the reason for a call -up should be given. City Attorney Burnham noted that even if only one council member is required for a call-up, it could still be required that the reason for the call -up be given. Council Member Bromberg asked if there would be a problem with allowing a council member 14 days for a call-up. Assistant City Manager Wood noted that the draft minutes would be available in that time period. Amended motion_ by Council Member Brombere to require two council members for an appeal, to require that it be done within 14 days and that a reason for the appeal be given. Mayor Pro Tem Adams stated that an amendment to the process needs to be Thought out carefully and suggested that staff rewrite the amendment to take into consideration the concerns expressed at the current meeting. Council Member Bromberg withdrew his motion. Motion by Council Member BromberE to continue the item to June 22, 2004. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None Volume 56 - Page 979 INDEX City of Newport Beach Regular Meeting June S, 2004 K. PUBLIC COMMENTS 18013 DA/ • Jim Hildreth thanked the City for allowing him to be in the public parade, but stated that his release was not read by the master of ceremonies. Referring to the fourth paragraph in the City's website on Jim Hildreth and displaying a photo, he stated that there's reference to both a pier and a dock. He stated that it's contradictory and doesn't represent to the public that the structure is for access. He stated that he'll get a more recent photo. • Robert Walchli stated that for three years he's been asking the City to take action to recover the public bluff property along Ocean Boulevard in Corona del Mar. He requested that he be informed of what action the City has taken to remedy the situation in a timely manner, and noted that he's only seen one bush trimmed. Mr. Walchli additionally noted that the Coastal Act mandates the recovery of public lands and ocean views when feasible. He stated that the City may be in violation of this and that he may have to resort to filing a complaint with the Coastal Commission and the Attorney General. He suggested that public hearings be held on the issue. Secondly, Mr. Walchli stated that at 202 Fernleaf Avenue, there is a barbecue that's higher than the roofhne. He requested the City to take action to bring the property into compliance. L. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES Status report — Ad Hoc General Plan Update Conunittee (GPUC). Mayor Pro Tem Adams stated that there was no report. Status report — Local Coastal Program Certification Committee. Mayor Ridgeway reported that the City Council certified the Local Coastal Plan (LCP) at the meeting held on May 25, 2004, and that the it's been sent to the Coastal Commission. Status report — Newport Coast Advisory Committee (NCAC). Council Member Heffernan stated that the NCAC met on June 7, 2004, and that the primary topic was the proposed school loop road. He displayed a drawing of the proposed road and stated that the issue is controversial. Public hearings will be held in the future. He listed the other issues discussed, which included the entrance monument, landscaping on Newport Coast Drive and assessment debt relief. Status report — Mariners Joint Use Library Ad Hoc Steering Conunittee. Council Member Webb announced that a groundbreaking ceremony will take place on June 10, 2004, at 1:00 p.m. He invited the public to attend. Status report — Transportation Corridor Agencies. Mayor Pro Tem Adams stated that he provided each of the council members with a summary of the Foothill-South draft Environmental Impact Statement (EIS)/Environmental Impact Report (EIR). He announced that there's a San Joaquin Hills board meeting on June 10, 2004, and that toll increases will be considered. He stated that unfortunately these will be greater than they would have been if the Volume 56 - Page 980 City of Newport Beach Regular Meeting June 8, 2004 consolidation of the agencies would have taken place. Mayor Ridgeway noted that the rating agencies recently reduced the bond on the San Joaquin Hills corridor to "junk' status. He stated that it was unfortunate that the Orange County Transportation Authority (OCTA) didn't approve the refinancing. Mayor Pro Tem Adams stated that the bonds are at risk of going into default, which means that the insurer takes over and could make decisions that won't take Newport Beach into consideration. He added that several alignments are being considered and that they can be found on the Transportation Corridor Agencies website. Status report — Santa Ana River Flood Protection Agency. Council Member Nichols announced that there is a competition for federal funds between the Prado Dam completion and Back Bay dredging. He announced that President Bush has recommended that Prado Dam be funded, with no recommendation for Back Bay dredging financing. Mayor Ridgeway stated that he also met with Senator Feinstein regarding the items and that she supported both of them. He stated that there are plans to lobby for the funds. Status report — General Plan Advisory Committee (GPAC). Council Member Rosansky thanked the owners of the Banning Ranch for hosting a tour of the ranch. M. PLANNING COMMISSION AGENDA AND ORAL STATUS REPORT 26. PLANNING COMMISSION AGENDA FOR JUNE 3, 2004. Planning Director Temple stated that two items on the Planning Commission agenda were continued without discussion, and included the request for an amendment to the use permit for LaFogata Restaurant and the St. Andrews Presbyterian Church expansion. Planning Director Temple reported that the Planning Commission received a detailed presentation from the applicant for the Marinapark Resort. The Planning Commission directed staff to provide more information at the meeting of July 8, 2004. Specifically, they requested more detailed information on the traffic assumptions made to justify the findings of the Environmental Impact Report (EIR), more justification of the determination related to the alternatives analysis in the EIR and a more detailed analysis of the project's consistency with the various general plan policies and elements. She noted that the Marinapark Resort and Community Plan will also be discussed later at the current meeting during Item No. 33. N. CONTINUED BUSINESS 27. PROPOSED AMENDMENTS OF THE MEASURE S GUIDELINES (contd.from 4/27/04). Volume 56 - Page 981 INDEX (100 -2004) (100 -2004) City of Newport Beach Regular Meeting June 8, 2004 INDEX City Attorney Burnham stated that the key changes that are being proposed include adding definitions for "approval" and "entitlement ", and adding a section to deal with the manner in which the City must calculate increases in intensity. City Attorney Burnham stated that there have also been discussions on how to determine the baseline for evaluating increases in intensity for parcels entitled for hotel or theater uses. He stated that hotels are currently entitled by rooms and theaters are entitled by seats. For hotels, it is proposed to assume that the floor area would be 1,000 square feet per room and for theaters, 15 square feet per seat. City Attorney Burnham stated that the proposal also addresses other uses that are not entitled in terms of floor area and that it should cover the myriad of possible situations that could occur when amendments propose increases in intensity for nonresidential uses. In response to Mayor Pro Tem Adams' question, City Attorney Burnham stated that the proposal does not differentiate between the different hotel classifications. He added that the general plan doesn't either and that traffic generation will be calculated in the Institute of Transportation Engineers (ITE) rates or trip tables. Mayor Pro Tem Adams asked if it was fair to use 1,000 square feet per room for every hotel type. City Attorney Burnham responded in the affirmative. City Attorney Burnham stated that another key change being proposed is a modification to the procedures that must occur prior to City Council approval of an amendment and the procedures that must occur prior to the submittal of an amendment to the voters. The guidelines have also been amended so that the staff reports that are presented to the City Council would contain the information that would be helpful to the City Council and the voters in making a decision on an amendment. Council Member Heffernan stated that it was his understanding that all City approvals would be given prior to the vote of the people. City Attorney Burnham stated that he didn't feel that it was an accurate characterization of Greenlight and an issue that he would need to defer to the Greenlight Steering Committee. Lastly, City Attorney Burnham stated that it is being proposed to use the procedures outlined in the guidelines and Measure S as the exclusive means by which amendments that require voter approval are submitted to the electorate. Additionally, City Attorney Burnham brought three minor changes to the City Council's attention. City Attorney Burnham stated that the Greenlight Steering Committee is suggesting two additional amendments. The first would be to preclude the City Council from submitting an amendment to the voters until the City Council has completed all actions necessary to proceed with the project. He stated that he disagrees with the recommendation and doesn't feel it's consistent with Greenlight, and that he would suggest that wording be added that would require the City Council to take action on related land use approvals when submitted with an amendment. He felt that this was consistent with the intent of the request by the Volume 56 - Page 982 City of Newport.Beach Regular Meeting June 8, 2004 INDEX Greenlight Steering Committee and would provide the voters with the information necessary to understand the full implication of their vote. City Attorney Burnham stated that the second suggestion by the Greenlight Steering Committee was to add a guideline provision that requires rebuttals in the event that arguments are authorized. City Attorney Burnham stated that the Elections Code establishes procedures for the filing of arguments and rebuttals, and that the City would address the issue through an ordinance or a Charter provision. He suggested, however, that wording could be added to the guidelines to require the City Council to allow rebuttal arguments when the election is called unless there is a provision in the Charter or Newport Beach Municipal Code (NBMC) that prohibits this. Phil Arst, Greenlight spokesperson, stated that he only has a few remaining concerns with the proposed amendments to the Measure S guidelines. He stated that he wants to insure that the public is fully informed and that their right to vote is protected. He agreed that Section 423 of the Charter does not specifically require the project to be described when being considered along with a general plan amendment, but that it has been the practice of the City in the past to complete a project and its accompanying general plan amendment as a package. He stated that it was assumed that current City practices would be maintained except where specifically changed by Measure S. Mr. Arst stated that the voters should not have to consider a general plan amendment without having the full description and commitment of its usage. Regarding the rebuttal issue, Mr. Arst agreed that the issue isn't addressed in Section 423, but felt that rebuttals should be authorized for both sides. In closing, he expressed his appreciation to the City for working with him and that he wilt. continue to be available to address the remaining issues. City Attorney Burnham stated that including a provision in the guidelines for impartial analysis is something that he has already discussed with Mr. Arst and that it was in response to wanting to provide the voters with information. He expressed his frustration with the amount of work that has been spent on the guidelines and the fact that it appears that there will never be full satisfaction by the Greenlight Steering Committee. In response to the comment by Mr. Arst about the City maintaining its current practices, he stated that the City has typically processed various land use approvals concurrently and that he didn't know what additional information would have resulted in the past practice that isn't encompassed in the proposed amendments to the guidelines. Lastly, City Attorney Burnham stated that a general plan amendment is a project and that there is specific information that must be provided. He felt that the voters would be fully informed of the implications and impacts of the land use decision. Mayor Ridgeway agreed with the City Attorney that all of the information necessary to make an informed decision is being provided and is required by the proposed amendments. He asked Mr. Arst what is missing. Mr. Arst stated that he's looking for as much specificity as possible. Mayor Ridgeway stated that the document, as presented, is excellent. He acknowledged the efforts of everyone involved. Volume 56 - Page 983 City of Newport Beach Regular Meeting June 8, 2004 Council Member Bromberg asked if Mr. Arst felt that the voters would have adequate information to make an intelligent decision. Mr. Arst stated that he's willing to work with the City and agreed that progress has been made. Council Member Bromberg stated that the proposed amendments provide the voters with the environmental review and analysis that Measure S didn't address. Council Member Bromberg additionally confirmed with Mr. Arst that the recommendations for the approval and rebuttal procedures are appropriate. Council Member Nichols asked how a hotel with a large meeting room would be handled. City Attorney Burnham stated that the proposal is to entitle a hotel in terms of both rooms and floor area, and that the peak hour trip generation would be governed by the trip rate table. Council Member Nichols asked how a theater would be handled. City Attorney Burnham stated a theater is limited to .5 times the gross land area, and the Measure S calculation would be the differential in traffic between what is currently allowed and what is being proposed. Cora Lee Newman, Government Solutions, stated that her company represents a number of business interests in Newport Beach and that they are supportive of the proposed amendments. She stated that it's a complex issue and that it's important for everyone to understand exactly what is being approved. At the request of Mayor Ridgeway, City Attorney Burnham clarified that Exhibit A would be added to the guidelines in the Mandatory Procedures section and Exhibit B would be added to the Calling an Election section. Motion by Council Member Heffernan to approve the amendments as presented by staff. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None O. CURRENT BUSINESS 28. SALES TAX SHARING AGREEMENT WITH NEWPORT BEACH LEXU S. Mayor Ridgeway recused himself from the item. He stated that he was doing so because he owns property in the Newport Place Planned Community, which is approximately 2,000 feet from the property subject to the agreement. He explained that the Fair Political Practices Commission (FPPC) guidelines establish a 500 -foot radius, but he was doing so to avoid any appearance of a conflict of interest. Volume 56 - Page 984 INDEX C -3709 Sales Tax Sharing Agreement with Newport Beach Lexus (38/100 -2004) City of Newport Beach Regular Meeting June 8, 2004 INDEX Council Member Bromberg confirmed with the City Attorney that he is not required to recuse himself, noting that he recently purchased a veldcle from a Lexus dealership. Assistant City Manager Wood stated that David Wilson, the owner of the Tustin Lexus, recently received approval to open a new dealership in Newport Beach. The site selected for the dealership is on the western corner of MacArthur Boulevard and Jamboree Road. Due to the high cost of the land and construction, Mr. Wilson has asked the City to enter into an agreement to share the sales tax for a period of time to make the dealership economically feasible. She stated that there would be no obLigation for the City to makes payments until the land use permits are approved, which the City has discretion on whether to grant or not. Assistant City Manager Wood stated that the covenant attached to the agreement requires Mr. Wilson to acquire the site, develop a Lexus dealership within specified time frames, continue to operate the Lexus dealership on the site, designate the site as the point of sale for all sales transactions, and attempt to designate the site as the site for lease tra::usactions. She stated that the City's obligation would be to pay 50% of the sales tax that's generated at the site, up to a maximum of $9.5 million at interest of 5% per year. Assistant City Manager Wood reported that the economic consulting firm of Keyser Marston Associates was retained to analyze the proposal. Their conclusion was that the assistance that was requested of the City was reasonable and necessary for the dealership to sustain operations at the proposed site. Assistant City Manager Wood stated that it is projected that the City's payments would end. after 11 to 14 years, and that staff considers the agreement to be of low risk to the City and an investment that would be returned to the City in the future. Council Member Nichols confirmed that the payments made by the City are from a portion of the sales tax received. He stated that it needs to be clear that the percentage shall be from the City's portion of the sales tax. Cit;p Manager Bludau stated that the City is covered in the agreement and City Attorney Burnham stated that it's specifically covered under the definition of "sales tax" and in the subvention clause. City Manager Bludau referred to a letter received from the City of Tustin earlier in the day that makes the City aware that there is a State prohibition against a jurisdiction providing financial assistance to a dealership to enable it to relocate from another jurisdiction. He stated that this is not occurring in this situation. Mayor Pro Tem Adams requested that the City respond to the letter from the City of Tustin. Council Member Heffernan asked if requiring Mr. Wilson to maintain his existing dealership in Tustin should be a part of his agreement with the City. City Attorney Burnham stated that the agreement already addresses this issue. Council Member Heffernan referred to the covenant, which would be recorded after Mr. Wilson receives all of his apyrovals, and the interest rate that starts after he acquires title of the Volume 56 - Page 985 City of Newport Beach Regular Meeting June 8, 2004 INDEX property. Council Member Heffernan asked why the covenant wouldn't go on record once the property is acquired also. City Manager Bludau stated that this is what was negotiated. Council Member Heffernan stated that normally a covenant is recorded after the grant deed and before a deed of trust. City Attorney Burnham stated that it is assumed that Mr. Wilson will have received all discretionary approvals at the time that the covenant is recorded. He added that the City won't owe him anything unless the dealership is established and operated. Council Member Heffernan asked if minimum improvements would be required. City Manager Bludau stated that it hasn't been a concern and that he is convinced that Mr. Wilson intends to put in a very high end facility. Assistant City Manager Wood added that the covenant requires that it be a Lexus dealership and that Lexus Corporate will require a certain level of improvements, as all of the luxury auto dealerships do. Council Member Heffernan asked what was received by the City from Fletcher Jones in sales tax revenue. Assistant City Manager Wood stated that the City has received $11.8 million. City Manager Bludau added that it was approximately $2.4 million during the past year. Council Member Heffernan asked if the City had done similar agreements, like the agreement with Mr. Wilson, in the past. Assistant City Manager Wood responded in the negative. Council Member Heffernan asked if a precedent was being set. City Manager Bludau stated that a 50/50 sales tax split is common in the industry, but that the City would have to consider any future proposals separately. He added that the City will be well served with the agreement. Council Member Nichols recalled that there was a problem with receiving sales tax from Fletcher Jones and asked if there was a provision in the agreement with Mr. Wilson to guard against this. Assistant City Manager Wood stated that she believed that Council Member Nichols was referring to the use tax, which is the tax paid when someone leases a vehicle. She confirmed that the City learned from that experience, that State law has also changed to make it easier for cities to receive the tax and that the issue was addressed in the agreement with Mr. Wilson. Council Member Bromberg agreed that the City has learned from the Fletcher Jones experience and noted that the City has made nearly $12 million in a relatively short period of time. He stated that the agreement with Mr. Wilson should also provide revenue to the City with virtually no risk. Motion by Council Member Bromberg to adopt Resolution No. 2004- 51; and approve and authorize the Mayor to execute the agreement. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols Noes: None Abstain: Mayor Ridgeway Absent: None Mayor Pro Tem Adams recessed the meeting at 9:57 p.m Volume 56 - Page 986 City of Newport ;Beach Regular Meeting June 8, 2004 Mayor Ridgeway reconvened the meeting at 10:06 p.m with all members present, except Council Member Heffernan. 29. APPROVAL OF THE MEMORANDUM OF UNDERSTANDING (MOU) AND REIMBURSEMENT AGREEMENT WITH THE NEWPORT -MESA SCHOOL DISTRICT FOR THE NEWPORT COAST ELEMENTARY SCHOOL LOOP ROAD (C- 3684). 30. NEWPORT COAST ELEMENTARY SCHOOL LOOP ROAD — AWARD OF CONTRACT (C- 3684). Motion by Mayor Ridgeway to continue Item Nos. 29 and 30 to Jur..e 22, 2004. The motion carried by the following roll call vote: Ayes: Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: Heffernan 31. PROPOSED ASSESSMENT DISTRICT NO. 68 (NEWPORT SHORES) FOR UNDERGROUNDING UTILITIES AND DESIGNATION AS AN UNDERGROUND UTILITY DISTRICT. Council Member Rosansky recused himself from this item, as well as Item No. 32. He explained that he owns property within District No. 68 and within 500 feet of District No. 69. Public Works Director Badum pointed out that the Engineer's Report was revised and distributed prior to the meeting. Jim Hildreth referred to the staff report where it states that the proposed improvements will improve safety and service reliability. He stated that this is not true and that underground utilities are neither safer or more reliable than aboveground utilities. Additionally, he referred to the information about the bonds and stated that it's a lot of money. He suggested that the property owners be provided with the guidelines for financial assistance. Mr. Hildreth also referred to the information about those failing to convert their individual service connections on private property and that it could lead to a disconnection of service. He suggested that the City be nicer in such situations. He also felt that a notation should be included in the documentation about how the vaults will be maintained. Motion by Mayor Pro Tern Adams to 1) adopt the following Resolutions for proposed Assessment District No. 68: a) Resolution No. 2004 -45 making find on a petition for, adopting a map showing the proposed boundaries of, and making appointments for proposed Assessment District No. 68; b) Resolution No. 2004 -46 declaring intention to order the construction of certain improvements in proposed Volume 56 - Page 987 INDEX C -3684 Newport Coast Loop Road (38/100 -2004) C -3684 Newport Coast Elementary School Loop Road (38/100 -2004) Underground Assessment District No. 68 (89/100 -2004) City of Newport Beach Regular Meeting June 8, 2004 Assessment District No. 68; declaring the improvements to be of special benefit; describing the district to be assessed to pay the costs and expenses thereof; providing for the issuance of bonds; and designating the area an underground utilities district; c) Resolution No. 2004 -47 giving preliminary approval to the report of the assessment engineer, setting the time and place for a public hearing as July 27, 2004; and ordering the intention of assessment ballot procedure for Assessment District No. 68; and 2) approve the Bond Counsel Agreement with Robert Hessell. Council Member Webb stated that several people could be in attendance for the item when it returns to the City Council and suggested that it be placed as close to the beginning of the agenda as possible. The motion carried by the following roll call vote: Ayes: Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: Rosansky Absent: Heffernan Council Member Heffernan returned to the Council Chambers. 32. PROPOSED ASSESSMENT DISTRICT NO. 69 — WEST NEWPORT (AREA BETWEEN SEASHORE DRIVE AND W. OCEAN FRONT, FROM SUMMIT ST. TO 33RD STREET; BETWEEN RIVER AVENUE AND SEASHORE DRIVE FROM 56TH STREET TO 47TH STREET AND OCEAN FRONT ALLEY, FROM 33RD STREET TO ALLEY EAST OF 30TH STREET) FOR UNDERGROUNDING UTILITIES AND DESIGNATION AS AN UNDERGROUND UTILITIES DISTRICT. Jim Hildreth referred to the staff report and the scope of services. He stated that information on the aid that can be provided for people that can't afford the cost should be given. He stated that information on street closures and parking during construction is also missing. He asked that the statements he made during Item No. 31 also be considered during this item. Elliott Leonard, West Newport Beach Association, stated that the district is large and that it has been worked on for over ten years. He stated that it's a large project and that over 600 property owners are involved. He expressed his support for the effort. Mayor Ridgeway hoped that the district would be approved and stated that it would be a beneficial project for the entire community. Motion by Mayor Pro Tern Adams to 1) adopt the following Resolutions for proposed Assessment District No. 69: a) Resolution No. 2004 -48 making find on a petition for, adopting a map showing the proposed boundaries of, and making appointments for proposed Assessment District No. 69; b) Resolution No. 2004 -49 declaring intention to order the construction of certain improvements in proposed Volume 56 - Page 988 INDEX Underground Assessment District No. 69 (89/100 -2004) City of Newport :Beach Regular Meeting June 8, 2004 Assessment District No. 69; declaring the improvements to be of special benefit; describing the district to be assessed to pay the costs and expenses thereof; providing for the issuance of bonds; and designating the area an underground utilities district; c)Resolution No. 2004 -50 giving preliminary approval to the report of the assessment engineer, setting the time and place for a public hearing as July 27, 2004; and ordering the intention of assessment ballot procedure for Assessment District No. 69; 2) approve the Bond Counsel Agreement with Robert Hessell; and 3) approve a Professional Services Agreement Amendment with Harris and Associates for an additional fee of $38,600. The motion carried by the following roll call vote: Ayes: Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: Heffernan, Rosansky Absent: None 33. MA.RINAPARK RESORT AND COMMUNITY PLAN AND DRAFT ENVIRONMENTAL IMPACT REPORT. Senior Planner Campbell reported that the comment period ends June 9, 2004, for the Environmental Impact Report (EIR) for the proposed Marinapark Resort. He announced that in addition to the presentation at the current meeting, public hearings would be held before the Planning Commission on July 8, 2004, and the City Council on July 13 and 27, 2004. Senior Planner Campbell introduced David Lepo, the project manager, and Mike Houlihan of Michael Brandman & Associates, who prepared the EIR. Council Member Heffernan asked what hearings would be held before the project is submitted to the voters, in addition to the hearings already announced. He specifically asked when the voters would learn about the ground lease terms and other issues. City Attorney Burnham stated that the City Council would consider the ground lease, the fiscal impact report and certification of the EIR at the meeting of July 27, 2004. In addition, the election would be called by resolution. He stated that the City Council could hold additional public meetings if the City Council determines that more information should be provided. City Attorney Burnham stated that there is also the potential to adopt the Planned Community (PC) text. Council Member Heffernan asked if there would be a vote by the City Council on the project prior to it being presented to the voters. City Attorney stated that the lease and the fiscal impact report would be considered and discussed by the City Council, and that the lease could be approved subject to the other permits and land use approvals being issued. Council Member Heffernan asked if the voters in the City would know who on the City Council is supportive of the project and who is not. City Attorney Burnham stated that it would be up to the City Council, but that most likely opinions would be expressed during the process. City Attorney Burnham noted that the agreement between the City and Marinapark LLC approved an exception to the normal practice. Council Member Heffernan asked if the site plan, layout and other detail Volume 56 - Page 989 INDEX C -3389 Marinapark Resort and Community Plan (38/100 -2004) City of Newport Beach Regular Meeting June 8, 2004 INDEX would be approved prior to the project being submitted to the voters. City Attorney Burnham responded in the affirmative, but stated that the City Council could include a requirement for final approval of the site plan in the terms and conditions of the lease, which would be approved on July 27, 2004. Council Member Heffernan asked what the voters would be approving if they haver ft approved the site plan. City Attorney Burnham stated that they would be approving a general plan amendment to allow for the construction of a 110 -room resort consisting of approximately 110,000 square feet. He added that they would be approving the concept, understanding that if all other permits are obtained by the project proponent, the lease would guide the development and operation of the property. Mayor Ridgeway asked if the PC text had been submitted for the project. Senior Planner Campbell stated that the draft PC text is available and subject to review and amendment. He stated that the timing of when the PC text will be presented to the City Council is up to the City Council. Council Member Webb asked when the first copy of the lease and the fiscal impact report would be available. City Attorney Burnham stated that the terms and conditions of the lease should be available within the next thirty days. Council Member Webb noted that the lease won't be available until approximately two weeks before the City Council will need to make the final decisions and approvals. Mayor Ridgeway stated that the lease will also be available in summary form. Council Member Webb asked when the fiscal impact report would be available. Assistant City Manager Wood stated that it should be available within the next couple of weeks. Council Member Webb again noted that both the lease and the fiscal impact report won't be available until approximately two weeks before the City Council will need to make the final decisions and approvals. Council Member Nichols asked how much the project could change before the EIR would be inapplicable. City Attorney Burnham stated that the project reviewed in the EIR would be the project that would be developed, if all approvals are received. Council Member Webb stated that the approval from the Coastal Commission could require some substantial changes. City Attorney Burnham stated that unless the approvals increase the size of the project, the approvals would be within the scope of the analysis in the EIR. If the approvals would cause the project to have impacts that weren't evaluated or increase the severity of the impacts, the EIR would have to be revised. Mayor Pro Tem Adams noted that it's only dealing with the general plan amendment, and not necessarily with the specifics of the project. Council Member Heffernan asked how voter approval would be affected if the Coastal Commission, for example, reduces the size of the project, Volume 56 - Page 990 City of Newport :Beach Regular Meeting June 8, 2004 INDEX making the project less economically feasible City Attorney Burnham stated that voter approval is for the general plan amendment, which authorizes the development of a project up to a certain size. He added that the City Council will approve the lease before the matter is submitted to the voters, which will indicate to the voters what the City intends to do if the project is approved. He stated that the lease is an administrative function, which cannot be delegated to the voters. The voters are only approving a general plan amendment, which is a conceptual approval of the project. In response to Mayor Ridgeway's question, Senior Planner Campbell stated that the purpose of the presentation at the current meeting is to provide information on the project, and receive feedback from the City Council on the adequacy of the EIR and issues that should possibly be addressed prior to the upcoming public hearing meetings. City Attorney Burnham added that the presentation is also intended to provide information to the voters. Steve Sutherland, applicant and partner of the Marinapark Resort and Community Plan, stated that the project has been before the City for a number of years. Using a PowerPoint presentation, Mr. Sutherland displayed the location of the project on the Balboa Peninsula, as well as the site plan. He reviewed the various aspects of the site plan, and stated that the plan is for a 110 -guest room luxury destination resort. He stated that the 110 rooms will be located in 16 villa -style buildings, all designed in :residential scale, and lower in height and density than many of the neighboring homes. Mr. Sutherland stated that the project will help to beautify the surrounding area and the traffic generated by the project will be below the Measure S thresholds. He stated that the current use at the site includes a mobile home park with 56 tenants. He displayed several before and after view simulations. Mr. Sutherland stated that the community improvements of the proposed project include beautification of the area, commitment to fund a minimum of $500,000 to remodel the existing American Legion facility, rebuilding the public tennis courts, and construction of a new Girl Scout House and community center. He stated that the City currently operates tennis and sailing programs at the site and that this will continue. He additionally noted that the public will have access to the resort's specialty restaurant and grounds, and that public beach access will be improved and new view corridors and walkways will be provided. Mr. Sutherland reported that the total annual revenue to the City is anticipated to be close to $3 million, and would include Transient Occupancy Tax (TOT), sales tax and property tax. He stated that it is also expected that property owners will benefit from increased land values, and that the project will help with the revitalization of the area. Council Member Webb stated that there appears to be no room for landscaping to camouflage the wall around the tennis courts. Mr. Sutherland stated that there is a 3 -foot setback that can be layered with different types of groundcover, trees and foliage, and that he also is concerned about how the project will look, to both the residents and the guests of the property. Council Member Webb stated that the wrought Volume 56 - Page 991 City of Newport Beach Regular Meeting June 8, 2004 INDEX iron fence that is proposed at the view corridors would substantially block the views. Mr. Sutherland stated that the view corridor is 30 to 35 feet on each side. Council Member Webb stated that he's anxious to see the fiscal impact report to see how the $3 million revenue figure is justified. Council Member Nichols stated that it appears that the project does not have adequate parking. Mr. Sutherland stated that there are no other Five Star resorts in Orange County to base a comparison on and that the proposed project will not need the number of employees needed at the larger resorts. In response to Council Member Nichols' question, Mr. Sutherland stated that the resort's employee pool is expected to be approximately 150, but the number on the site at any given time would be approximately 50. He emphasized that the project is for a small luxury resort. Referring to the staff report, Council Member Heffernan asked how the issues raised by the Environmental Quality Advisory Committee (EQAC) regarding the EIR would be addressed. Assistant City Manager Wood stated that those comments along with all other comments received will have written responses, and that the consultants at Michael Brandman & Associates are already working on those. The comments should be available well before the July 8, 2004, Planning Commission meeting. In response to Council Member Heffernan's question, Assistant City Manager Wood noted that the concerns of the Planning Commission included additional backing for the conclusions on traffic and parking, more information in the analysis of consistency with the general plan, and more facts and analysis regarding the alternatives. She stated that the comment period for the EIR is 45 days and ends on June 9, 2004. Council Member Nichols stated that EQAC wanted an additional chance to review the EIR after their initial questions were answered. Assistant City Manager Wood stated that their comments will be responded to, which is a requirement of the California Environmental Quality Act (CEQA) guidelines. The City Council has the authority to approve the final EIR. EQAC does not make the decision on whether an EIR should be recirculated, or found to be adequate and certified. Assistant City Manager Wood additionally noted that there is a lack of clarity on whether EQAC actually recommended that the EIR be recirculated. Council Member Heffernan asked if EQAC will provide responses to the responses by the consultant. Assistant City Manager Wood stated that the City's procedure does not include a provision for the EIR to go back to EQAC for a second review. City Attorney Burnham added that the City's procedures also do not include a provision for EQAC to comment on the responses. The adequacy of the EIR and the adequacy of the responses to all of the comments received on the EIR are decisions made by the City Council, which has the full discretion to determine if the document is in compliance with CEQA. In response to Council Member Heffernan's question, City Attorney Burnham stated that the City Council will need to weigh the comments made and review the responses to determine if they adequately address those comments. Council Member Heffernan stated that it would be more efficient for the individual that made the Volume 56 - Page 992 City of Newport ]Beach Regular Meeting June 8, 2004 INDEX comment to review the response. City Attorney Burnham emphasized that the decision on the adequacy of the document is strictly that of the City Council. The Planning Commission will make a recommendation, but they will not make the determination. Council Member Bromberg noted that EQAC is a diverse group of individuals and they all realize that they are not the decision makers or the policymakers. Council Member Nichols noted that the City Council does have the option of recirculating the document, which would include recirculation to EQAC. Assistant City Manager Wood encouraged the council members and the public to provide comments on the EIR at the current meeting. Robert Walchli stated that he's a proponent of public use of public property and is generally against conversion to private control. He stated that he's not opposed to a compromise, noting that a hotel with increased public access could be feasible. He asked what the revenue from the proposed hotel would be used for and what the analysis of leaving the property as open space is. He suggested that there be provisions to restrict the use of the boat slips by charter boats and to provide increased public access. Mr. Walchli stated that the people should be able to vote on what they want the site to used for. He, additionally, asked what would happen if the project goes bankrupt and if the community center would be free. Lastly, he stated that there doesn't seem to be any guarantee that what the voters approve is what will be developed. Jinx. Hildreth stated that he was glad to see that boats would be allowed. He felt, however, that parking dinghy's at the site should also be considered. Laura Dietz, EQAC member, stated that when EQAC formed the subcommittee to review the Marinapark draft EIR, she felt that one of the members might have a conflict of interest because of their vocal opposition to the project. She learned that this matter is not relevant for EQAC, which is an advisory committee. Ms. Dietz stated that she missed the meeting when EQAC compiled their recommendations and that she disagrees with a number of them. She stated that the EQAC members still need to learn more about EIR's and the CEQA process. In response to Council Member Heffernan's question, City Attorney Burnham stated that vocal opposition to a project is meaningless when looking at the legal definition of conflict of interest by a member of an advisory committee. He stated, however, that opposition to a particular project on the part of a decision maker could potentially constitute a denial of due process. Council Member Nichols stated that he was at the EQAC meeting when the project was reviewed. He stated that a concern was expressed for the possibility of the charter boats being able to utilize the piers at the site. Volume 56 - Page 993 City of Newport Beach Regular Meeting June 8, 2004 Mayor Ridgeway stated that the largest dock that is being designed is 28 feet. Council Member Nichols stated that the plan is not to berth the boats, but to pick up charter passengers. Assistant City Manager Wood stated that it is not a part of the project description. Council Member Nichols stated that EQAC also questioned using the underground parking lot for temporary water storage in the case of a major rain storm and how well it would work. Assistant City Manager Wood stated that all of EQAC's concerns will receive a response and that these will be provided to the Planning Commission and the City Council. Council Member Webb stated that two of the project objectives will eliminate the recreation public use alternatives from being considered or feasible, because they do not generate revenue. He specifically cited the two objectives, which were to reduce the current and anticipated future deficit between tidelands revenue and expenditures, and to provide additional general fund revenues that will help the City maintain high levels of public safety and municipal services. He stated that he has previously requested that an alternative be shown in the document for a "no project" alternative that followed the recreation and open space element without a mobile home park. He stated that the "no project" alternative included in the document includes the mobile home park and the other existing uses. City Attorney Burnham explained that the City is obligated to evaluate the impacts of "no project ", or no development, pursuant to CEQA, which is why the current use at the site is included in the document. Council Member Webb stated that a fourth alternative could still have been included, and that the public use alternative in the document is for marine - related use and not park use. In response to Council Member Heffernan's question, City Attorney Burnham stated that the lease revenue would be tidelands revenue and would be required to be used for tidelands purposes. The TOT revenue would go into the general fund. Motion by Mayor Pro Tern Adams to continue through the agenda until midnight, if necessary. The motion carried by acclamation. P. ITEMS REMOVED FROM THE CONSENT CALENDAR 3. ORDINANCE AMENDING SECTIONS 12.24.065 AND 12.24.080 OF THE NBMC REGARDING REDUCING THE PRIMA FACIE SPEED LIMIT OF RIDGE PARK ROAD FROM SAN JOAQUIN HILLS ROAD TO NEWPORT COAST DRIVE. Jim Hildreth stated that he hoped the speed limits weren't being changed just to generate revenue. He asked how notification would be made and stated that signs are often not adequate. He suggested that the speed limits be placed on the roadways themselves. Motion by Mayor Pro Tern Adams to introduce Ordinance No. 2004 -12 Volume 56 - Page 994 INDEX (100 -2004) City of Newport Beach Regular Meeting' June 8, 2004 amending Chapter 12.24 (Special Speed Zones), Sections 12.24.065 and 12.24.080 of the NBMC reducing the prima facie speed limit on Ridge Park Road from San Joaquin Hills Road to Newport Coast Drive from 40 mph to 30 mph. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None PUBLIC RIGHT -OF -WAY ORDINANCE. Jim Hildreth stated that the public should be notified when the work for the undergrounding of utilities takes place. Additionally, he stated that the work should be checked to make sure that it's done properly and does not result in a public nuisance. Motion by Mayor Pro Tem Adams to adopt Ordinance No. 2004 -9 pertaining to use of the public right -of -way. Council Member Heffernan confirmed that the change discussed at the City Council meeting of May 25, 2004, was included in the document that is being approved. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None 6. DISCHARGE OF WEAPONS ORDINANCE. Council Member Nichols stated that he doesn't understand why the proposed ordinance is necessary. He explained that he is not in favor of discharging weapons for unreasonable means, but is in favor of the right to self- defense. Motion by Council Member Webb to adopt Ordinance No. 2004 -11. Jim Hildreth stated that the reason for the ordinance is so that the City doesn't have little pellets dropped all over the place from the little guns, but that the Police Department has cited safety as the reason. Mr. Hildreth stated that it doesn't make sense that a person can carry a replica of a real weapon, but not discharge it. He stated that he doesn't see anything in the ordinance dealing with the safety issues. He also hoped that the City would include notification to all of the schools, so that the children would know what is allowed. Volume 56 - Page 995 INDEX (100 -2004) (100 -2004) City of Newport Beach Regular Meeting June 8, 2004 The motion carried by the following roll call vote Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Mayor Ridgeway Noes: Nichols Abstain: None Absent: None Motion by Mavor Ridgeway to limit public comments on Items Removed from the Consent Calendar to two minutes. The motion carried by the following roll call vote Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None 8. REVISED PARKING LOT FEES FOR BALBOA PIER AND CORONA DEL MAR PARKING LOTS. Mayor Ridgeway stated that the Balboa Business Improvement District (BID) submitted a letter requesting that the fee increase at the Balboa Pier parking lot be held until the construction for the undergrounding of the utilities is completed. Mayor Ridgeway expressed his support for the request. City Manager Bludau noted that the fee increase applies to long term parking only, and not the first five hours. Mayor Ridgeway stated that he did mention this to Mr. Black. Council Member Rosansky referred to the estimate for an additional $250,000 in revenue at the Balboa Pier that would result from the increase, and stated that it seems unreasonably high. Conversely, he felt that the estimate of $220,000 for Corona del Mar seemed low. Council Member Nichols stated that during the weekdays in Corona del Mar, there is ample parking. He suggested that the fees not be increased during this time and explained that it could attract usage in the parking lot, which would result in less of an impact to the residential community. Robert Walchli stated that the fee increase in Crystal Cove could draw people to Corona del Mar, however it may not since those that go to Crystal Cove may be willing to pay the additional $4 since they go there because it's less crowded. He stated that raising the fees at Corona del Mar will result in more people parking on the residential streets. He requested that traffic control be provided on the holidays and weekends, and that the issue of gridlock be addressed. He stated that the traffic control could be funded by the revenue generated from the increase in fees. City Manager Bludau stated that the fee increase is an opportunity to increase City revenues. Volume 56 - Page 996 INDEX (100 -2004) City of Newport :beach Regular Meeting June 8, 2004 Council Member Heffernan asked if the parking permits were also being ina-eased. City Manager Bludau responded in the negative and explained that the parking permits are valid throughout the City. Motion by Mayor Pro Tem Adams to rescind Resolution No. 92 -105 and, adopt Resolution No. 2004 -43 amending the City Fee Schedule for parking fees at the Balboa Pier and Corona del Mar parking lots. Council Member Nichols stated that the beach is not full midweek and again explained that not increasing the fees would encourage higher usage, provide more revenue to the City and result in less of an impact to the surrounding neighborhood. Mayor Pro Tem Adams asked if staff looked at a two - tiered fee structure. City Manager Bludau responded in the negative and explained that it would be confusing. After a brief discussion, it was determined that the proposal is for a two - tiered fee structure in Corona del Mar, one for weekends and holidays and one for midweek. Council Member Webb noted that Newport Beach is below other cities in fees and is missing a substantial source of revenue. He didn't feel that changing the fees by the amounts proposed would reduce usage. The motion carried by the following roll call vote Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Abstain: None Absent: None 10. MARINER'S MILE WATERFRONT WALKWAY PIERHEAD LINE EXTENSION: APPROVAL OF AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT WITH CASH & ASSOCIATES (contd. from 5/25/04). Council Member Nichols stated that moving the walkway out to the bulkhead line would not achieve a smooth walkway and would eliminate the view from the restaurants. He disagreed with spending money to study the matter. Motion by Council Member Webb to 1) approve Amendment No. 1 to Professional Services Agreement with Cash & Associates and authorize the Mayor and the City Clerk to execute the amendment; and 2) approve a budget amendment (04BA -063) in the amount of $15,000 from the Tide and Submerged Land fund balance, 230 -3605, to Tidelands Capital, 7231 - 05100314. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Mayor Volume 56 - Page 997 INDEX C -3548 Mariner's Mile Waterfront Walkway (38/100 -2004) City of Newport Beach Regular Meeting June 8, 2004 Ridgeway Noes: Nichols Abstain: None Absent: None 12. JAMBOREE ROAD STREET REHABILITATION — FORD ROAD TO BISON AVENUE — AWARD OF CONTRACT (C- 3625). Council Member Nichols stated that there doesn't seem to be a problem with the pavement and asked for an explanation as to why it needs to be rehabilitated. Public Works Director Badum stated that based upon inspections by the General Services Department and the engineers, it was determined that it did need paving. Motion by Council Member Brombere to 1) approve the plans and specifications; 2) award the contract (C -3625) to All American Asphalt, Inc. for the total bid price of $733,733 and authorize the Mayor and the City Clerk to execute the contract; and 3) establish an amount of $73,000 to cover the cost of unforeseen work. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Mayor Ridgeway Noes: None Abstain: Nichols Absent: None 17. BUDGET AMENDMENT — CALIFORNIA SEAT BELT COMPLIANCE CAMPAIGN PROGRAM — FISCAL YEAR 2004 -2005. Council Member Nichols stated that the City should not be enforcing the use of seat belts in such a manner and that it should be the responsibility of the individual. Motion by Council Member Webb to approve a budget amendment (04BA -066) to an existing grant in the amount of $15,940 for the Police Department budget in fiscal year 2003 -2004, to fund additional seat belt enforcement, as a part of the California Seat Belt Compliance Program. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Mayor Ridgeway Noes: Nichols Abstain: None Absent: None Q. MOTION FOR RECONSIDERATION - None Volume 56 - Page 998 INDEX C -3625 Jamboree Road Street Rehabilitation (38/100 -2004) (100 -2004) City of Newport Beach Regular Meeting; June 8, 2004 13 ADJOURNMENT at 11:55 p.m in memory of Jim Frost and Former President; of the United States Ronald Reagan. The agenda for the Regular Meeting was posted on June 2, 2004, at 3:55 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 56 - Page 999 INDEX