HomeMy WebLinkAbout10 - Newport Coast Reimbursement of Maintenance CostsCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. io
March 14, 2006
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, Assistant City Manager
9491644 -3002 or dkiff @city.newport- beach.ca.us
SUBJECT: Budget Amendment- Newport Coast Community Association
Reimbursement of Maintenance Costs for Properties along Public Streets
ISSUE:
Should the City of Newport Beach appropriate and expend $195,000.00 to compensate
the Newport Coast Community Association (NCCA) for properties the City intended to
maintain following the January 1, 2002 annexation of the Newport Coast community?
RECOMMENDATION:
Adopt Budget Amendment #J in the amount of $195,000.00 to the City Manager's
Professional and Technical Services account (0310- 80804) from unappropriated
General Fund reserves.
2. Direct the City Manager to disperse funds in the amount of $195,000.00 to the
Newport Coast Community Association (NCCA).
DISCUSSION:
The 7,700 -acre Newport Coast community at the eastern edge of the City is a
combination of two planned communities (the San Joaquin Hills Planned Community
[now known as Newport Ridge] and the Newport Coast Local Coastal Program). In the
1980s and 1990s as the communities were developed, the major landowner (The Irvine
Company) and the planning jurisdiction (the County of Orange) established a somewhat
complex program of private ownership of lands like street medians, parkways, and
slopes along public streets. In other regions, these same lands are more commonly
held and maintained by public agencies.
Assessment and Mello -Roos districts funded construction of the Newport Coast's major
infrastructure -- like parks, the Newport Coast Fire Station, Newport Coast Elementary
School, sewers, water mains, streets, streetlights, stoplights, and the installation of the
Budget Amendment -- Newport Coast
March 14, 2006
Page 2
community's street landscaping. The assessment districts were not set up to fund
ongoing maintenance activities of these public facilities or properties. Instead, the
Newport Coast development was structured such that homeowners' and community
associations (HOAs /COAs) picked up both ownership and maintenance costs of certain
properties, specifically the landscaping along and adjacent to streets.
Annexation Discussions
As part of Newport Beach's January 1, 2002 annexation of the Newport Coast, the City
Council's negotiating team agreed to maintain the landscaping of certain properties
along and adjacent to public streets to the quality standards in place at the time of
annexation. These properties include medians (center of the street), parkways (area
between the street and sidewalk), and some slopes. This offer by the City was accepted
by a coalition of Newport Coast residents known as the Newport Coast Committee of
2000 (NCC2K), included within a Pre - Annexation Agreement (PAA), and later adopted
by the City Council.
Due to annexation, today many of the public streets in the Newport Coast are controlled
by the City via easement or fee ownership, but adjacent property (medians, parkways,
and slopes) is owned by community associations. These streets include:
• Newport Coast Drive
• Newport Ridge Drive
• San Joaquin Hills Road
• Vista Ridge Road
• Ridge Park Road
• Pelican Hill Road
A Community of Associations
Today, the Newport Coast contains six major community associations:
• Newport Ridge Community Association;
• Newport Ridge North Community Association;
• Newport Coast Community Association;
• Ziani Community Association;
• Pelican Point Community Association; and
• Crystal Cove Community Association.
Community associations are charged with various activities, including operating private
parks (like Newport Ridge Park) and maintaining landscaping along medians, parkways
and slopes. The community associations operate concurrently with about 24 smaller
homeowners associations (HOAs) that manage different properties and facilities like
streetscapes behind gates, fuel modification zones, and gate guards to their specific
neighborhoods.
For information about where these HOAs and COAs are located, look at the City's web
site (www. city. newport- bea ch. ca. us) and click on our mapping applications.
Budget Amendment -- Newport Coast
March 14, 2006
Page 3
The Property Maintenance Agreement
After City Council adopted the PAA, several months passed before the City could take
over landscape maintenance duties because the agreed upon properties were privately
owned. In Fall 2003, a Property Maintenance Agreement (PMA) was completed to allow
the City to begin maintenance of these areas. In late October 2003, both Newport Coast
and Newport Ridge agreed to the terms and format of the PMA.
The PMA describes certain eligible properties that the City or its landscape maintenance
contractor will maintain, including:
• Medians and parkways along public streets where the City owns and maintains
the streets;
• California native and evergreen slopes along public streets where the City owns
and maintains the streets;
Some areas are excluded from eligibility via the PAA -- these include landscaped areas
that are:
• Within gated communities and therefore not public;
• Adjacent to or within parks that are not public;
• Adjacent to schools, commercial areas, hotels /timeshares, or developer -owned
property, and
• Enhanced entryways or decorative corner statements.
Approximately 54 acres of land owned by the NCCA are eligible for City maintenance.
In October 2002, the NCCA allowed the City's contractor, Park West Landscape
Maintenance, to maintain about 5.80 acres of the 54 acres of NCCA - controlled land
(specifically the medians and parkways along portions of Newport Coast Drive and
Pelican Hill Road) without an executed agreement. In 2004, City staff completed an on-
site audit of all acreage that is the City's maintenance responsibility but is owned by
NCCA. This audit included detailed inspection of several parcels to determine if they
met the criteria of an eligible property, as identified in the PAA. Using this audit, staff
has been able to design a detailed map showing the NCCA properties and identifying
eligible properties for the City to maintain (Attachment A).
Initially, City staff and the Newport Coast Advisory Committee (NCAC) agreed that the
City would begin maintaining eligible landscaped areas in July 2004. Due to the
complexity of parcels (some have characteristics which meet the eligible and ineligible
designation), both the Newport Coast Advisory Committee (NCAC) and City staff agreed
that the development of the PMA took longer than expected to complete. Consequently,
both have agreed that the NCCA should be reimbursed for maintenance costs it
incurred from July 2004 through March 2005. Using the NCCA property map, staff has
determined that there are approximately 48.08 additional acres that have been
maintained by NCCA.
Budget Amendment -- Newport Coast
March 14, 2006
Page 4
The Contractors
The General Services Department solicited competitive bids for eligible NCCA
properties in the fall of 2002. In October 2002, the City selected Park Landscaping
Maintenance (PLM) as the qualified bidder to maintain these properties. PLM was the
preferred contractor by both the Newport Coast Community Association and the City.
Since then, PLM has continued to perform landscape maintenance duties for eligible
NCCA properties but has changed its name to Park West Landscape Maintenance
(PWLM).
In July 2004, PWLM added the eligible properties identified in the PMA to its regular
landscape maintenance schedule. General Services Department staff will continue to
manage PWLM's contract and work to ensure that NCCA and the City's service
expectations are maintained.
At the end of the City's contract with PWLM, the City will explore re- bidding all eligible
Newport Coast properties as one landscape maintenance contract. When this occurs,
staff will solicit bids using the traditional Request for Proposals process and will
recommend a contractor to the City Council for formal approval of a new contract.
Funding
On December 9, 2003 the City Council approved the PMA and directed City staff to
begin work on the Newport Coast/Ridge's medians, slopes, and parkways. General
Services' staff began management of maintenance work on these properties
(approximately 9.83 acres) on February 1, 2004 in the Newport Ridge community. On
April 27, 2004 the City Council authorized a budget amendment to reimburse the
Newport Ridge Community Association for costs incurred during the changeover period.
At that time, staff wrote that later City Council action would be required to reimburse
costs incurred by the NCCA.
According to PWLM, the cost to maintain all eligible properties (approximately 54 acres)
within NCCA is just over $23,470 per month. During the 9 -month negotiation period
between the City and NCCA, the City maintained only parkways and medians
(approximately 6 acres) at a cost of $2,526 per month. Using these figures, City staff
has developed a cost analysis showing that the City owes NCCA a total of $195,000 for
the total 9 -month changeover period (Attachment B).
Staff is recommending that the City Council approve the budget amendment of
$195,000 and direct the city manager to disperse funds for reimbursement to the NCCA.
This amount represents a one -time payment for costs incurred from July 2004 through
March 2005. There will be a roughly $281,640 annual obligation within the General
Services' Department's budget for this work on an ongoing basis. This amount is
currently funded in the department operating budget.
Committee Action: The Newport Coast Advisory Committee has been kept apprised of
these discussions and this payment.
Budget Amendment -- Newport Coast
March 14, 2006
Page 5
Environmental Review: The City Council's approval of this Agenda Item does not
require environmental review.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act
(72 hours in advance of the public meeting at which the City Council considers the item).
Funding Availability: Funds are available in general fund reserves for this payment.
Submitted by:
` L�4)
Dave kift
Assistant City Manager
Submitted by: ,;" . ,
Mark Harmon ' I
General Services Director
Attachment:
Prepared by:
0,�— �� ". .
Chris Marcarello
Administrative Analyst
A. Newport Coast Maintenance Area Map
B. Newport Coast Community Association - Maintenance Cost Analysis
C. Budget Amendment 2006 -
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Newport Coast Community Association
Maintenance Cost Analysis
Total Maintenance Costs
(April 05' - December 05)
To ('Cost
April 05'
$23,470.13
May 05'
$23,470.13
June 05'
$23,470.13
July 05'
$23,470.13
August 05'
$23,470.13
September 05'
$23,470.13
October 05'
$23,470.13
November 05'
$23,470.13
December 05'
$23,470.13
Total $ 211,231.17
Average $ 23,470.13
Monthly Cost Differential
Avg. Monthly Cost of Total Maintenance
Avg. Monthly Cost of Limited Maintenance
Monthly Difference
Total Cost Differential
Total Difference (9 Months)
Total (Adjusted for Inflation)
Limited Maintenance Costs
(July 04 - March 05')
August 04'
23.470.13
2,526.48
$2,526.48
September 04'
$2,526.48
October 04'
$2,526.48
November 04'
$2,526.48
December 04'
$2,526.48
January 05'
$2,526.48
February 05'
$2,526.48
March 05'
$2,526.48
Total $
22,736.32
Average $
2,526.48
$
$
23.470.13
2,526.48
$
20,943.65
$ 188,492.85
$ 194,147.64
Attachment 8
City of Newport Beach NO. BA- 06BA -049
BUDGET AMENDMENT
2005 -06 AMOUNT: 5195,000.00
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates Increase in Budgetary Fund Balance
�X Increase Expenditure Appropriations AND X Decrease in Budgetary Fund Balance
Transfer Budget Appropriations No effect on Budgetary Fund Balance
SOURCE:
from existing budget appropriations
from additional estimated revenues
PX from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
To increase expenditure appropriations for a retroactive reimbursement payment to the Newport Coast Community
Association for property maintenance costs along public streets.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Account
010 3605
REVENUE ESTIMATES (3601)
Fund /Division Account
EXPENDITURE APPROPRIATIONS (3603)
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Description
General Fund - Fund Balance
Description
Description
0310 City Manager
80804 Services - Fuel Modification
Amount
Debit Credit
$195,000.00
Automatic System Enfry.
$195,000.00
Signed: %s 4L� 3- ;7-06
Finan 'al proval: Administrative Services Director Date
Signed: 3 7
Administrative Approval: ity Manager D e
Signed:
City CouncilApproval: City Clerk Date