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Home My WebLink About07 - Commercial Regulation on Newport HarborCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 7 February 14, 2006 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Glen Everroad, Revenue Manager, 644 -3144 Everroad (aa)city.newport- beach.ca.us SUBJECT: Commercial Activity Regulation on Newport Harbor— Municipal Code Chapters 5.18 & 17.41 ISSUE: Should the two Newport Beach Municipal Code chapters regulating commercial activities in Newport Harbor (5.18 and 17.41) be repealed and a new ordinance regulating commercial activities be introduced? RECOMMENDATION: It is recommended that the City Council adopt Chapter 17.10 regulating commercial activities on Newport Harbor and adopt the attached resolution updating the Master Fee Schedule to include the application fees for the new ordinance. DISCUSSION: Background: Newport Beach Municipal Code Chapters 5.18 and 17.41 regulate commercial activities on Newport Harbor. Since 1970, Chapter 17.41 has required a permit for commercial activities except those specifically exempted, while Chapter 5.18 has required a permit for those charter activities not permitted under Chapter 17.41 since 1988. On February 12, 2003, the Harbor Resources Manager provided the Harbor Commission a report on Newport Beach Municipal Code Chapters 17.41 and 5.18. The report provided background on the regulation of commercial activities, the revenues realized by the City from commercial operators, the number of passengers served by charter vessel operations, safety issues related to commercial operations and a variety Regulation of Commercial Activities February 14, 2006 Page 2 of other information relating to commercial operators in Newport Harbor. The Harbor Commission directed staff to form an interdepartmental committee to investigate the feasibility of implementing one or more of the following seven alternatives: 1. Increase staff follow -up to ensure that the permittees are in compliance with all permit conditions. 2. Review the commercial dock construction standards to ensure they are adequate to address safe charter operations, and if not, suggest improved standards. 3. Consider a citywide limit on passenger capacity. 4. Consider the consolidation of charter regulations to a single ordinance, establishing consistent standards and practices for all charter activities. 5. Consider adding to the commercial harbor permit a long term lease, for those facilities that allow charter operations, to ensure the City is receiving the appropriate revenue for the use of State Tidelands, to cover the cost of increased enforcement and to enhance permit condition enforcement options. 6. Review the Harbor Permit Policy's parking requirements. Develop interdivisional review to include Revenue and Planning to ensure upland parking, offsite parking or shuttle service is appropriate for each permit issued to include charter permits as well as dock construction permits. 7. Moratorium on Charter Permit issuance. The Harbor Commission also established a Charter Boat Subcommittee consisting of three Harbor Commission members to work with the industry and staff in the development of a new consolidated regulatory ordinance. For nearly three years staff has worked with the industry, City Attorney's Office, the Charter Boat Subcommittee, and Harbor Commission in the development of a new ordinance regulating commercial activities on the Harbor. The proposed new ordinance would make the following substantive changes: • Establish a single regulatory authority within the City for commercial operations on Newport Harbor • Centralize regulation of commercial operations with the Harbor Resources Division • Create a uniform application, review and annual renewal process for commercial operations on Newport Harbor • Provide for a waiver or reduction of fees for commercial harbor operations when the vessels are owned and operated by non - profit entities • Recover the costs of processing applications and renewals for commercial harbor activities permits • Establish an exemption for vessels operated pursuant to a franchise or lease with the City of Newport Beach Regulation of Commercial Activities February 14, 2006 Page 3 During the past three years many issues were raised regarding the proposed new ordinance including: • Expanded regulation of businesses operating in the Harbor • Existing permit holders would not qualify under the new regulations • Permit fees would be onerous • Protracted permit process The proposed new ordinance has been reviewed by the Harbor Commission three times during the past three years, most recently in October of 2005. Staff has conducted more than a dozen meetings with the industry through the Charter Boat Subcommittee and the Chamber of Commerce Marine Division to work through the issues, and believe the industry's concerns have been addressed. Staff has estimated the costs of processing applications and renewals under the proposed new ordinance and is recommending tiered fees based on the estimated staff time spent to process applications. Staff proposes a three tier fee structure for applications based on the scope of the business operation (e.g. number of vessels, boarding locations, parking facilities) with a range of $130 for applications requiring less than an hour to $750 for those requiring more than ten hours to investigate. The attached proposed resolution will update the Master Fee Schedule to reflect the proposed new fees for processing permits under the new ordinance. As necessary these proposed fees may be subsequently adjusted to reflect actual costs once we have gained more experience in processing applications under the new proposed ordinance. The City Attorney has reviewed and approved the proposed new ordinance On January 24, 2006 the City Council introduced and unanimously passed to second reading and adoption the attached proposed ordinance. Environmental Review: Adoption of the proposed ordinance qualifies for an exemption from environmental review under Section 15308 of the CEQA Guidelines, actions by regulatory agencies for protection of the environment where construction activities and relaxation of standards allowing environmental degradation are not included. Public Notice: Notice of this meeting was posted at least 72 hours prior to this meeting. Alternatives: Council may elect to not introduce the proposed new municipal code chapter. Prepared by: Glen Everroad, Revenue Manager Regulation of Commercial Activities February 14, 2006 Page 4 Submitted by: Dennis Danner, Administrative Services Director Attachments: Proposed Ordinance 17.10 Resolution Updating Master Fee Schedule RESOLUTION NO. 2006- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AMENDING THE CITY'S MASTER SCHEDULE OF FEES TO BE CHARGED FOR USER SERVICES WHEREAS, in 1996 the City of Newport Beach retained KPMG Peat Marwick LLP (KPMG) to conduct a cost of services study for City services requested and initiated by residents, businesses and others who are most benefited by the service; and WHEREAS, the KPMG study determined the actual cost of providing the services including direct labor costs, administration or "overhead" costs and the cost of materials and supplies based on 1994 -1995 actual costs for the majority of City fees for service; and WHEREAS, on February 10, 1997 the City Council of the City of Newport Beach adopted Ordinance 97 -8 establishing Chapter 3.36 (COST RECOVERY FOR USER SERVICES) of the Municipal Code; and WHEREAS, Chapter 3.36 of the Municipal Code contains cost recovery percentages for specific services contained in the 1996 study; and WHEREAS, the City Council of the City of Newport Beach adopted Resolution 2006 -4 on January 10, 2006 establishing a Master Fee Schedule for municipal services based on the 1996 study and Chapter 3.36 of the Municipal Code; and WHEREAS, the City Council has introduced and adopted a new Municipal Code Chapter 17.10 providing for fees to be established by resolution of the City Council and the City Council desires to update the Master Fee Schedule to include said fees. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The Master Fee Schedule is amended to add fees relating to Municipal Code Chapter 17.10, and to delete fees relating to Municipal Code Chapters 5.18 and 17.4 1, according to EXHIBIT "A" attached. Passed and adopted by the City Council of the City of Newport Beach at the regular meeting held on the 14 "' day of February, 2006. Mayor ATTEST: CITY CLERK Q f 00 2 X W c v r E q C d fA �' w Q O W 6 7 v d zz o� �w 0 0