HomeMy WebLinkAbout01/26/2016 - Study Session / Regular MeetingCITY OF NEWPORT BEACH
City Council Minutes
Study Session and Regular Meeting
January 26, 2016
I. ROLL CALL -5:00 p.m.
Present: Council Member Peotter, Council Member Duffield, Council Member Belich, Council
Member Curry, Council Member Petros, Mayor Pro Tern Muldoon, Mayor Dixon
II. CURRENT BUSINESS
SSl. Clarification ofltems on the Consent Calendar-None
SS2. Short Term Rental (STLPs, Airbnb, VRBO) -Update and Summary of Uses in
Newport Beach [100-2016]
Community Development Director Brandt provided a PowerPoint presentation which included
an overview of short-term lodging and how it is permitted in the City, a brief history of the
matter, benefits, City regulations, short-term rentals in the R-1 Zone, properties
grandfathered in, where short-term lodging is permitted, the permit process, permit revenue,
location of active short-term lodging permits, percentage of short-term rentals to total housing
units, revenue trends, concerns and challenges, adverse impacts and professional management
of short-term rentals. She listed online companies getting into the short-term rental business,
concerns with the internet effect, home-sharing, the importance of enforcement, practices by
other Orange County coastal cities, and next steps.
Council Member Belich commented on the concept of house-swapping and asked how the City
would handle same. Business License Supervisor Navarrete indicated that, at this time, since
the concept does not involve changing money and the City Code does not address it, it is not
being regulated.
Craig Batley, Burr White Realty, provided a PowerPoint presentation on rental business on
the Peninsula. He addressed existing conditions, short-term permits in R-1 Zones, Balboa
Island zoning, and provided a history of short-term lodging in the City.
Gary Sherwin, President of Newport Beach & Company, commented on the increase in the
short-term lodging industry, specifically Airbnb. He noted the need to create a sense of
fairness among all lodging providers and believed that the City needs to take a close look at
this matter, as the City is foregoing a significant amount of revenue.
Jim Mosher asked about the permit application process and whether it is included on the
City's website. Additionally, he wondered how it can be determined that a person offering
short-term lodging has a valid permit.
Denys Oberman, Central Newport Beach Community Association, asked that Council not
draw any conclusions at this time, but direct staff to gather additional information. She noted
that the Association acknowledges the City's need for Transient Occupancy Tax (TOT) revenue
but requested that it not be at the expense of the quality of life for residents. She encouraged
Council to find a balanced solution between vacation rentals and the sustainable community.
She stated that there is a high concentration of short-term lodging permits on the Peninsula
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that puts a burden on the community, as well as on the City. She asked that Council not allow
any more units onto the Balboa Peninsula.
Todd Prince shared his experience with short-term lodging, thanked City staff, stated that the
issue involves bad operators, and hoped that Council can develop regulations to penalize them
while encouraging good operators.
Don Abrams, Abrams Coastal Properties, thanked staff for the thorough report and stated that
the vacation-rental model works well on Balboa Island. He reported that his tenants are
provided with a list of rules and regulations to follow and that they typically comply and take
good care of the properties. He expressed concerns with Airbnb and offered to serve on a
committee to study the matter.
In response to Council questions, Mr. Abrams provided an example of his rules and
regulations. He also reported on how he advertises for his properties. Regarding impacts to
his business, he indicated that he is unable to quantify those at this time.
Community Development Director Brandt noted that the City tracks TOT payments for those
who have permits. Mr. Abrams reported that the problem is with people who do not have a
permit.
Business License Supervisor Navarrete reported that, if a homeowner chooses to hire an agent
and do their own advertising, the agent is responsible to remit the TOT on a quarterly basis
and the owner receives a reporting form once a year.
George Schroeder expressed concerns with Airbnb, encouraged Council to consider how it can
receive TOT, and commented on problems with short-term rentals.
Connie Adnoff, Beachview Realty, offered to work with the City to study this matter further.
She observed there are increased problems with long-term rentals, noting that, if there are
problems with short-term guests, they can be kicked out immediately. She referenced a list of
her rules provided to renters and reiterated issues with long-term renters.
Art White, White Sail Realty, agreed with Mr. Batley's and Ms. Adnoffs comments and
recommended that Council review Mr. Batley's presentation. He stated that people that go
around the system are undercutting the City's revenue and legitimate business owners. He
referenced a luncheon hosted by Airbnb where they expressed their intention of cooperating
with the various cities, as well as working closely with vacation rental managers.
Additionally, he suggested ways in which enforcement could be facilitated.
Council Member Petros noted that he was impressed by the question of fairness and equity in
the discussion and commented on leveling the playing field for all hospitality and vacation
rentals throughout the City. He hoped that Council will tap into the professionals in the City
and consider forming a committee, comprised of vacation rental associations and other
professionals to obtain good, localized knowledge regarding the matter.
Council Member Peotter asked staff to explain what Airbnb is being required to do by the City
of San Francisco. City Manager Kiff reported that Airbnb was able to reach an agreement
with San Francisco to collect the TOT for their rentals.
City Attorney Harp added they are collecting a 14% tax for San Francisco. They have shown
willingness to collect the tax, on behalf of cities, in return for cities expanding operating areas.
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Business License Supervisor Navarrete added that, at this time, Airbnb does not release
property addresses unless there is litigation. She reported that the State of New York sued
Airbnb for their property listing and they were granted the addresses for a minimal amount of
time.
Community Development Director Brandt added that the City does not have an estimate of
what its lost revenues might be from the online services.
City Manager Riff asked regarding the time period represented by the $220,000 in TOTs
collected and Business License Supervisor Navarrete reported that it is for a one-year period.
Council Member Peotter estimated that uncollected TOT may be up to $1 million. In response
to his question, Business License Supervisor Navarrete reported that the permit is a $150 one-
time fee. Council Member Peotter indicated that, while he does not want to give up
information or expand on the areas permitted for short-term lodging, he would like to have a
level playing field.
In response to Council Member Belich's question regarding Airbnb's willingness to respect the
City's existing ordnances, City Manager Kiff emphasized that they have a willingness to
collect TOT, but only if the City opens up more of the controlled areas for short-term lodging.
Finance Director Matusiewicz added that Airbnb will agree to collect the TOT, but will not
validate that the rental is in a valid zone. They will not enforce the TOT, but will enter into a
voluntary collection for the City.
City Attorney Harp emphasized and reiterated that Airbnb is not willing to collect the TOT
unless the City is willing to loosen regulations.
Assistant City Attorney Torres added that negotiation with Airbnb is a difficult proposition as
they contend it is the City's responsibility to enforce its own laws.
City Attorney Harp added that some jurisdictions have been successful at getting information,
but only by initiating litigation.
Council Member Selich commented on the City of Santa Monica and believed that Council
should consider whether it would be worth the effort, as some cities are spending more in
trying to collect the TOT than the actual amount of TOT they are collecting.
Mayor Pro Tern Muldoon referenced next steps and noted his response to each step in the
presentation.
Council Member Curry stated that the City needs to be part of the solution and suggested
working with local property management professionals to work collaboratively with Airbnb
and others to find a solution to minimize impacts on neighborhoods while maximizing property
values and individual property rights. He stated the need to move forward with the matter,
including home-sharing.
In response to Council Member Duffield's question, City Manager Kiff indicated that the
disparity between charges by property management firms and by property owners is at least
10%. It was also noted that online sites charge annual subscription fees.
Council Member Peotter stated that he would be in favor of negotiating a deal with Airbnb for
them to collect the TOT.
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Mayor Dixon understood that Airbnb is under no obligation to turn over TOT to the City.
Assistant City Attorney Torres noted the City has a broad definition of an "operator" and
reported that Airbnb is unique in that they facilitate the exchange. Under the City's
definition, Airbnb is an operator and are required to collect the TOT.
City Attorney Harp reported that the City will continue negotiating with Airbnb.
Council Member Petros noted the importance of the TOT, but stated that it is only one issue.
He encouraged Council to take advantage of the expertise in the community, find out what
defines a "level playing field," and return with recommendations for Council's consideration.
Council Member Selich asked Council Member Peotter to clarify his suggestion. Council
Member Peotter reported that for anyone that does an Airbnb deal in the City, Airbnb would
collect the TOT without concern as to whether they are legally permitted or not and without
exchange of information.
Mayor Dixon suggested that staff conduct a workshop with the community to study the matter
further and develop recommendations for Council's consideration.
City Manager Kiff suggested returning to Council with recommendations in approximately six
months. He added that a critical discussion will include whether or not to open new areas for
short-term lodging.
Council Member Peotter believed that opening up new areas should be off the table, but that
consideration should be given to possible inconsistencies.
Mayor Dixon noted consensus to not expand permitted areas and cap the number of short-term
vacation rentals.
Council Member Curry added the need for fairness.
Council Member Peotter reported that there are some inconsistencies where there are R-1 and
R-2 Zones that are adjacent and that expanding the R-1 Zone should be considered.
Council Member Selich expressed his support.
III. PUBLIC COMMENTS
Jim Mosher commented on Closed Session Item A, noting that the Brown Act does not require Council
to do performance evaluations in Closed Session. He stated that the Costa Mesa Sanitary District
reviews its General Manager's annual goals in an open, public meeting and expressed the opinion that
the City should do the same. Additionally, he noted they are public employees and believed that
Council should consider the public's opinion as to the performance of these employees.
City Attorney Harp announced that the City Council will adjourn to Closed Session to
discuss the items as listed in the Closed Session agenda and read the titles.
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IV. CLOSED SESSION-6:36 p.m.
A. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
(Government Code§ 54957 (b)(1))
Title: Dave Kiff, City Manager
Aaron C. Harp, City Attorney
Leilani Brown, City Clerk
B. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION
(Government Code§ 54956.9(a), (d)(1)): 1 matter
Deem, Paul v. State of California, City of Newport Beach, et al.
Orange County Superior Court Case No. 30-2014-00745361
V. RECESS
VI. RECONVENED AT 7:00P.M. FOR REGULAR MEETING
VII. ROLL CALL
Present: Council Member Peotter, Council Member Duffield, Council Member Selich, Council
Member Curry, Council Member Petros, Mayor Pro Tern Muldoon, Mayor Dixon
VIII. CLOSED SESSION REPORT
City Attorney Harp announced that, regarding Item IV.B, Mayor Pro Tern Muldoon and Council
Member Petros recused themselves due to a potential conflict of interest related to their sources of
income.
IX. PLEDGE OF ALLEGIANCE-Mayor Pro Tern Muldoon
X. INVOCATION-Dr. Jim Turrell, Center for Spiritual Living Newport Mesa
XI. NOTICE TO THE PUBLIC
XII. CITY COUNCIL ANNOUNCEMENTS (NON-DISCUSSION ITEMS)
Council Member Curry reported that coyote issues will be considered in the near future and stated the
need for the City to have a robust strategy with plenty of opportunity for community input.
Mayor Pro Tern Muldoon reported attending the U.S. Conference of Mayors where he learned about
best practices for cities.
Mayor Dixon announced that Item No. 20 (Setting the Fair Market Value Rent for Moorings Located
upon Tidelands in Newport Harbor) will be heard immediately after the Consent Calendar. She
requested that staff prepare a report for the next meeting on the OCTA proposal to revise bus routes
in Newport Beach and prepare the necessary communication to the OCTA prior to their February
meeting. Additionally, she asked that staff add to the next agenda, consideration of televising
Planning Commission meetings. Mayor Dixon announced a community forum on February 25, 2016
for Women in Newport Networking (WINN) from 5:30p.m. to 7:30p.m. in the Civic Center
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Community Room. She commented on the recent 2016 Planning Session at Marina Park last
Saturday and thanked residents and staff for their participation and support.
XIII. PUBLIC COMMENTS ON CONSENT CALENDAR
Jim Mosher commented on Item No. 8 (Corona del Mar Entry Improvements) and noted that the
referenced drawings and specifications are not in the staff report nor available to the public. Public
Works Director Webb reported that they are typically available at the Public Works counter and that
projects are publicly bid and advertised.
XIV. CONSENT CALENDAR
READING OF MINUTES AND ORDINANCES
1. Minutes for the January 12, 2016 Study Session and Regular Meeting [100-2016]
Waive reading of subject minutes, approve as amended, and order filed.
Mayor Pro Tem Muldoon abstained on this Item.
2. Reading of Ordinances
Waive reading in full of all ordinances under consideration, and direct the City Clerk to read by
title only.
ORDINANCE FOR ADOPTION
3. Water Efficient Landscape Ordinance-Second Reading [100-2016]
Conduct second reading and adopt Ordinance No. 2015-34, An Ordinance of the City Council of the
City of Newport Beach, California, Amending Chapter 14.17 of Title 14 of the Newport Beach
Municipal Code in its Entirety Pertaining to Regulations Required for Water-Efficient Landscaping
(PA2015-169).
RESOLUTIONS FOR ADOPTION
4. Resolution Establishing Surfing Regulations to Protect Users of Designated Surfing
Areas and Designating Surfing Areas [100-2016]
Adopt Resolution No. 2016-10, A Resolution of the City Council of the City of Newport Beach,
California, Establishing Surfing Regulations to Protect Users of Designated Surfing Areas,
Designating Surfing Areas, and Rescinding Resolution No. 95-116.
7. Authorize Submittal of Orange County Transportation Authority Grant Application for
the Balboa Peninsula Shuttle Program [100-2016]
a) Adopt Resolution No. 2016-15, A Resolution of the City Council of the City of Newport Beach,
California, Authorizing the Submittal of Balboa Peninsula Shuttle Program to the Orange
County Transportation Authority for Funding Under Project V Community Based
Transit I Circulators; and
b) Authorize the City Manager, or his designee, to sign grant documents.
CONTRACTS AND AGREEMENTS
8. Corona del Mar Entry Improvements -Award of Contract No. 6382 (Project 15L12)
[38/100-2016]
a) Approve the project drawings and specifications;
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b) Award Contract No. 6382 to All American Asphalt, for the Total Bid Price of $497,497.00, and
authorize the Mayor and the City Clerk to execute the contract;
c) Encumber a contingency allocation of $50,000.00 (10%) to cover the cost of unforeseen work
not included in the original contract; and
d) Approve Budget Amendment No. 16BA-028 appropriating $175,000.00 from the General Fund
unappropriated balance to Account No. 01001927-980000-15L12 for Corona del Mar Entry
Improvements.
9. Authorize the City Manager to Approve Term Extensions for On-call Professional
Service Agreements (Albert Grover & Associates -C-5809, DMS Consultants -C-5750,
Civiltec-C-5749, Walden & Associates-C-5801, VA Consulting/Stantec-C-5757, Harris &
Associates -C-5840, Penco -C-5820, American Geotechnical -C-5655, Harrington
Geotechnical-C-5658, GMU Geotechnical-C-5659, lnterwest Consulting-C-5701, Guida
Surveying -C-5679, Coast Surveying -C-5702, Willdan Engineering -C-5768,
Transportation Studies-C-5771, TCLA Inc. -C-5691) [381100-2016]
Authorize the City Manager to execute agreement amendments to extend the term by up to six (6)
months on various on-call professional service agreements as approved to form by the City
Attorney.
11. Request to Retain Existing Private Improvements within the Public Right-of-Way at
1200 Dolphin Terrace (C-6435) [38/100-2016]
a) Waive City Council Policy L-6, Private Encroachments in the Public Rights-of-Way, to retain a
4-foot retaining wall to encroach into the Dolphin Terrace right-of-way, contingent upon all
conditions of the Encroachment Permit process being met; and
b) Direct staff to enter into an Encroachment Agreement with Owners and authorize the City
Manager and City Clerk to execute the Encroachment Agreement within one (1) calendar year
upon receipt of approval.
MISCELLANEOUS
12. Planning Commission Agenda for the January 21, 2016 Meeting [100-2016]
Receive and file.
13. Funding for Marina Management at Marina Park [100-2016]
Approve Budget Amendment No. 16BA-027 unappropriating $45,000 in General Funds from
Public Works Administration Account No. 01080005-811008 and returning it to the fund balance;
and appropriating $122,400 in Tidelands Funds to Public Works Harbor Resources Account
No. 10080802-811044 for marina management at Marina Park.
14. Dover Drive and Westcliff Drive Street Rehabilitation Increased Contingency Authority
and Budget Amendment (15R15) [100-2016]
a) Establish an amount up to $566,525 (17%) to cover the cost of unforeseen work not included in
the original contract;
b) Approve Budget Amendment No. 16BA-030, unappropriating $58,000 back to the
Contributions Fund balance from Account 13501-980000-15R15 (Dover Drive and Westcliff
Drive Street Rehabilitation Project Contributions Fund) and appropriating $81,035 from the
General Fund balance to Account No. 01001927-980000-15R15 (Dover Drive and Westcliff
Drive Street Rehabilitation Project General Fund) for a General Fund net increase of $23,035
to this project; and
c) Revenue receipted in 13501-431075 from the Orange County Sanitation District in the amount
of $58,000 will be transferred to 01080801-521380 (City Staff Service Fee General Fund).
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15. Appointment of a New Balboa Village Advisory Committee Member to Represent
ExplorOcean [100-2016]
Appoint ExplorOcean's CEO Linda Mayer to BVAC to fill the unexpired balance of Tom Pollack's
term, which expires on December 31, 2016.
16. Update on Water Use and Conservation Efforts December 2015 [100-2016]
Receive and file.
17. Summary Vacation of Existing Easement for Roadway Purposes at 20392, 20402, and
20412 Birch Street and Subsequent Approval of Parcel Map Number 2014-171
a) Adopt Resolution No. 2016-19, A Resolution of the City Council of the City of Newport Beach,
California, Ordering the Summary Vacation of an Existing 60-Foot Wide Easement for
Roadway Purposes at 20392, 20402, and 20412 Birch Street (Lots 125 and Portions of Lots 99
and 126), Directing the City Clerk to Record the Same with the County Recorder's Office and
Approve Parcel Map Number 2014-171;
b) Approve the summary vacation of easement for roadway purposes at 20392, 20402, and 20412
Birch Street and subsequently approve Parcel Map Number 2014-171; and
c) Direct staff to process Parcel Map Number 2014-171 in order for the owner to record the map
with the Orange County Recorder.
Motion by Mayor Pro Tern Muldoon, seconded by Council Member Selich, to approve the
Consent Calendar, except for the items removed (5, 6 and 10); to include Resolution No. 2016-19 (Item
No. 17), and noting the abstention on Item No. 1 by Mayor Pro Tern Muldoon.
The motion carried by the following roll call vote:
Ayes: Council Member Peotter, Council Member Duffield, Council Member Selich, Council Member
Curry, Council Member Petros, Mayor Pro Tern Muldoon, Mayor Dixon
XV. ITEMS REMOVED FROM THE CONSENT CALENDAR
Items 5, 6 and 10 were discussed and voted under one action.
5. Memorandum of Understanding with the Newport Beach Firefighter's Association
(C-2060) [38/100-2016]
a) Adopt Resolution No. 2016-11, A Resolution of the City Council of the City of Newport Beach,
California, Adopting a Memorandum of Understanding between the City of Newport Beach and
the Newport Beach Firefighters Association, for the period January 1, 2015 through
December 31, 2018;
b) Adopt Resolution No. 2016-12, A Resolution of the City Council of the City of Newport Beach,
California, to Modify the Paying and Reporting of the Value of the Employer Paid Member
Contribution to the California Public Employees Retirement System (CALPERS) for Certain
Miscellaneous Employees Represented by the Newport Beach Firefighters Association, from
2.42% to 0% for non-safety Miscellaneous members; and
c) Adopt Budget Amendment No. 16BA-025 in the amount of $669,752 from the General Fund
unappropriated surplus fund balance.
6. Approval of the Key and Management Compensation Plan and Adoption of the
Memorandum of Understanding with the Newport Beach Fire Management Association
(C-2946) [381100-2016]
a) Adopt Resolution No. 2016-13, A Resolution of the City Council of the City of Newport Beach,
California, Adopting the Key and Management Compensation Plan, for the period July 1, 2015
through December 31, 2018;
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b) Adopt Resolution No. 2016-14, A Resolution of the City Council of the City of Newport Beach,
California, Adopting a Memorandum of Understanding between the City of Newport Beach and
the Newport Beach Fire Management Association, for the period July 1, 2014 through June 30,
2018;and
c) Approve Budget Amendment No. 16BA-026 in the amount of $376,920 from the General Fund
unappropriated surplus fund balance.
10. Tentative Agreement with the Newport Beach Employees League (C-2065) [38/100-2016]
Receive and consider the Tentative Agreement between the City of Newport Beach and the
Newport Beach Employees League.
Council Member Peotter reported that the City has done a good job with personnel and union
agreements, and noted that employees are paying a large percentage of their own pension. He
reported that, for that reason, he is in support of the agreements. He stated that the City still has an
approximately $253 million unfunded liability on pensions. CalPERS did not realize the expected ROI
for the year ending 2015 and, therefore, that will net to the City an additional $30 million to $50
million of unfunded pension liabilities. He added that the City is doing what it can, under the law, but
has a long way to go. He commended the various groups and Council, but noted that more solutions
need to be generated.
Motion by Council Member Peotter, seconded by Council Member Curry, to approve Item
Nos. 5, 6 and 10.
The motion carried by the following roll call vote:
Ayes: Council Member Peotter, Council Member Duffield, Council Member Selich, Council Member
Curry, Council Member Petros, Mayor Pro Tern Muldoon, Mayor Dixon
XVI. PUBLIC COMMENTS ON NON-AGENDA ITEMS-None
XVII. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES-None
XIX. CURRENT BUSINESS
Item No. 20 was taken out of order and heard at this time.
20. Setting the Fair Market Value Rent for Moorings Located upon Tidelands in Newport
Harbor [100-2016]
Harbor Resources Manager Miller addressed background, responses and recommendations
received from the State Lands Commission, hiring consultant Jim Netzer to update an appraisal
done 10-years ago, additional responses from the State Lands Commission, and distribution of a
letter from Mr. Netzer addressing those responses.
Jim Netzer, Netzer and Associates, summarized the points he listed in his letter to Council. He
commented on his experience in and out of the City and addressed adjustments for dinghy storage.
Harbor Resources Manager Miller reported that Mr. Netzer found that for an on-shore mooring,
the range for a fair market value would be between $32 and $38 per linear foot of off-shore
mooring and on-shore moorings would be half that rate.
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In response to Mayor Pro Tern Muldoon's question, Mr. Netzer reported that adjustments for
dinghy storage does not change his analysis for the moorings. He addressed other comparable
areas and explained dinghy storage would be a component taken into consideration. Additionally,
he listed other jurisdictions that he considered in the analysis.
In response to Council Member Peotter's question, Mr. Netzer stated that the State Lands
Commission has never commented on his appraisals before.
Council Member Duffield pointed out that dinghy storage is not available for a majority of the
moormgs.
Carter Ford, Newport Mooring Association Board, addressed the composition of the Board and
thanked the City for its work on this matter. On behalf of the Board, he requested that Council
move forward at this time and expressed support of the proposed rates.
Michael Lawler agreed with Mr. Ford and urged Council to move this matter forward tonight. He
noted that the Harbor Commission's recommendations were $25 per linear foot, not $35 per linear
foot, and urged Council to consider the lower rate.
Ross McElfresh asked for confirmation that only the structure of the dock was to be rented, not the
used space, as the water is public space. Harbor Resources Manager Miller responded
affirmatively.
Don Potenza, spoke in support of a lower rate, but urged Council to make a decision tonight.
Patricia Newton, representing the Newport Mooring Association, reported that the current fees
are not an appropriate solution for Harbor budget concerns. She urged Council to lower the fees to
a more-reasonable level and asked that Council adopt the Resolution as recommended by staff.
Paul Bahan, Newport Mooring Association, agreed with the previously proposed rate of $25.43 per
linear foot because it is consistent with alternative methods of valuation and was based on a
footprint that is favorable to the tidelands. However, he agreed that, while the proposed $35 per
linear foot is at the high end, it is a fair resolution.
Catherine Wolcott, Newport Mooring Association, asked Council to approve the Resolution. She
commented on the recommendations of the State Lands Commission and urged Council to act on
this matter tonight.
Brian Ouzounian referenced his communications with Council and with the State Lands
Commission. He reported that he pays 50¢ per linear foot for his dock and $10 per linear foot for
his mooring, and emphasized the disparity. He proposed that Council waive the 2016 mooring bill
and investigate this matter further.
Scott Karlin, Newport Mooring Association, reported that he authored the comparable report
provided to Council last year. He thanked Mr. Netzer for his work and spoke in support of his
report.
Mark Sites commented on the previous process of determining a rate of $57 per linear foot and the
various studies and appraisals.
Gary Hill thanked Council and the Harbor Commission for its work.
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Motion by Council Member Petros, seconded by Mayor Pro Tern Muldoon, to adopt
Resolution No. 2016-17, A Resolution of the City Council of the City of Newport Beach, California,
Setting the Fair Market Value Rent for Moorings Located upon Tidelands in Newport Harbor,
effective for the mooring permits issued in 2016.
Council Members Selich and Curry spoke in support of respecting the request of State Lands
Commission and not take action until they have reviewed the appraisal.
Substitute motion by Council Member Selich, seconded by Council Member Curry, to
continue the item to allow the State Lands Commission time to review the appraisal.
Council Member Curry commented on the length of time the City went without adjusting mooring
rates and noted that it should not wait as long in the future. He expressed concerns that the
reduced rates represent a $500,000 revenue cut to the City at a time when the Tidelands Fund
needs money for seawall improvements and other important improvements in the Harbor. He
addressed the State Lands Commission response time and spoke in support of Council Member
Belich's substitute motion.
Mayor Pro Tern Muldoon spoke in support of the proposed rate of $35 per linear foot and in
opposition to the substitute motion.
Council Member Duffield noted that amenities are lacking in connection to moorings. He believed
that only when those types of amenities are offered can the City justify raising mooring rates.
Council Member Curry noted that, as previously considered, the rates maintained people's rights
to sell their moorings, adding that was the most important thing to many.
In response to Council Member Peotter's question, Assistant City Attorney Torres commented on
the State Lands Commission's role in this matter and addressed the process if the City were to be
found in violation. He noted that they do not object to the City's proposed rates but raised
questions regarding the appraisal.
The substitute motion failed by the following roll call vote:
Ayes:
Nays:
Council Member Selich, Council Member Curry
Council Member Peotter, Council Member Duffield, Council Member Petros, Mayor Pro
Tern Muldoon, Mayor Dixon
Council Member Peotter offered an amendment to eliminate the CPI adjustment and replace it
with a Council review. As the maker of the original motion, Council Member Petros stated that he
would not accept the amendment.
Substitute motion by Council Member Peotter to eliminate the CPI adjustment and replace
it with a Council review.
The substitute motion failed due to a lack of a second_
The motion carried by the following roll call vote:
Ayes: Council Member Peotter, Council Member Duffield, Council Member Petros, Mayor Pro
Tern Muldoon, Mayor Dixon
Nays: Council Member Selich, Council Member Curry
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XVIII. PUBLIC HEARINGS
The meeting continued as per the agenda at this time.
18. Issuance of Multi-Family Housing Revenue Bonds for the Uptown Newport Project by
the California Statewide Communities Development Authority to TPG/TSG Venture I
Acquisition, LLC [100-2016}
Finance Director Dan Matusiewicz provided the staff report.
Mayor Dixon opened the public hearing.
Jim Mosher wondered why the public needs to be involved at all. He expressed concerns that the
people will have to pay more taxes when certain people do not pay their fair share. He alleged
that the City is being asked to be complicit in a tax-evasion scheme.
Hearing no further testimony, Mayor Dixon closed the public hearing.
Motion by Council Member Curry, seconded by Council Member Selich, to adopt
Resolution No. 2016-16, A Resolution of the City Council of the City of Newport Beach, California,
Approving the Issuance by the California Statewide Communities Development Authority of
Multifamily Housing Revenue Bonds for the Uptown Newport I Apartments and Uptown Newport
II Apartments.
The motion carried by the following roll call vote:
Ayes: Council Member Peotter, Council Member Duffield, Council Member Selich, Council
Member Curry, Council Member Petros, Mayor Pro Tern Muldoon, Mayor Dixon
19. Adoption of Sewer Rate Adjustment [100-2016}
Municipal Operations Director Murdoch provided a brief background, discussed the consultant
conducting the study, prior consideration by Council, sewer rates, the Sewer Master Plan,
outsourcing specific services, consideration by the Finance Committee, and recommendations. He
commented on the Proposition 218 notice and reported on the components of the proposed sewer
rate, including a variable and fixed fee, and noted the availability of details on the rates.
Mayor Dixon stated that she understands the angst of many relative to the proposed increase in
sewer rates, but noted the importance of keeping the enterprise fund that supports the City's
water-waste system solvent. She stated her intention to want to give some of the General Fund
surplus back to the people if there is not a majority rate protest, and to reduce any hardship that
the rate increase may bring to some people. She indicated that this would be done by off-setting
three years of the sewer rate increase with a one-time credit to reduce the overall Municipal
Service bill for one specific month. This would be approximately $55 to $60 per home.
Mayor Dixon opened the public hearing.
Bob McCaffrey, Balboa Island resident, took issue that prior Councils did not address this issue,
believed that the City was not taking care of it infrastructure, and took issue with proposing a new
West Newport Community Center, which will be used by Costa Mesa residents. He agreed with
Mayor Dixon in terms of the City spending no more than needed, suggested that the City not build
the proposed Community Center, and that the City go back to basics.
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Study Session and Regular Meeting
January 26, 2016
George Schroeder believed residents understand that there are costs related to maintaining the
City's infrastructure, expressed support of the item, noted that many are not in support of building
a new Community Center on Superior, and offered an alternate location across from Banning
Ranch.
Jim Mosher reported that the sewers in his area are part of the Costa Mesa Sanitary District and
commented on their Proposition 218 exercise several years ago, noting that their rates are lower
than what the City is proposing for a system that is almost the same size. He questioned the
current process.
Barbara Stoveken expressed concern that the sewer rates will double in four years.
Hearing no further testimony, Mayor Dixon closed the public hearing.
City Clerk Brown reported that 27 protests were received in opposition to the proposed sewer rate
adjustment, of which, 26 were from property owners and one was from a non-property owner.
Motion by Mayor Dixon, seconded by Council Member Petros, to adopt Resolution
No. 2016-20, A Resolution of the City Council of the City of Newport Beach, California, authorizing
a One-Time Rebate to Residential Customers for a Portion of the Monthly Sewer Service and Use
Charges Authorized by Newport Beach Municipal Code Section 1.24.065 upon the Effective Date of
Ordinance No. 2016-1.
In response to Council Member Peotter's question, Municipal Operations Director Murdoch
addressed the connection fee and the analysis of actual costs under the fixed portion of the fees.
Additionally, he clarified the proposed rebate. City Manager Kiff added that the rebate concept
would be to apply the rebate to the General Fund surplus all in one month.
Council Member Curry expressed his surprise at the Mayor's proposal since, at the recent goal
setting session, Mayor Dixon stated that her first objective was fiscal restraint and responsibility.
He indicated that the proposal would take $1.7 million out of the General Fund and give it away.
He added that, at the same goal setting session, the Mayor spoke about having the Finance
Committee as a tool to vet the various proposals; however, they have not vetted the idea of a
rebate. Additionally, he referenced her comments regarding General Fund policies and believed
that the proposal to spend the surplus is not fiscally responsible.
In response to Council Member Curry's question, City Manager Kiff reported that the rebate will
go only to people who pay sewer fees. Council Member Curry expressed concerns that Council is
giving away money over time to various special interests and stated that the budget deficit will
impact General Services, Public Safety, and City facilities. He addressed the creation of structural
deficits. He noted the need to be responsible stewards and stated he will not support the Mayor's
motion for a rebate.
Mayor Pro Tern Muldoon expressed his support to give money back to the people, noting it is not
the City's money. He indicated that he will not support a rate increase, but will support the
rebate.
Council Member Selich concurred with Council Member Curry's comments, believing that the
rebate is an irresponsible idea and that the City should not comingle General Fund money with
Enterprise Fund money. He indicated that he cannot support the motion.
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Study Session and Regular Meeting
January 26, 2016
Council Member Peotter commented on prior Building Permit rebates and spending in connection
with fire rings, .the bunny structures, and the Civic Center.
City Attorney Harp reported that there is nothing illegal about using the General Fund for the
rebates and added that this is more of a policy decision.
The motion carried by the following roll call vote:
Ayes: Council Member Peotter, Council Member Duffield, Council Member Petros, Mayor Pro
Tern Muldoon, Mayor Dixon
Nays: Council Member Curry, Council Member Selich
Motion by Council Member Curry, seconded by Council Member Petros , to a) introduce
Ordinance No. 2016-1, An Ordinance of the City Council of the City of Newport Beach, California,
Amending Section 14.24.065 of Title 14 of the Newport Beach Municipal Code Pertaining to Sewer
Use Charge, and pass to second reading on February 9, 2016 and b) adopt Resolution No. 2016-21,
A Resolution of the City Council of the City of Newport Beach, California, Adopting New Sewer
Service and Use and Consumption Rates Pursuant to Newport Beach Municipal Code Section
14.24.065.
Council Member Curry noted that the most irresponsible vote would be for someone to vote for the
rebate and not vote for the proposed rate increase.
Mayor Pro Tern Muldoon commented in opposition to the motion.
The motion carried by the following roll call vote:
Ayes: Council Member Selich, Council Member Curry, Council Member Petros, Mayor Dixon
Nays: Council Member Peotter, Council Member Duffield, Mayor Pro Tern Muldoon
XIX. CURRENT BUSINESS
21. Newport Boulevard Widening from 30th Street to Via Lido-Award of Contract No. 4881
(Project 15R17) {38/100-2016]
Jim Mosher noted that the project plans and specifications were not available in the staff report
and that there is no information that these documents are available at the Public Works counter.
Additionally, he questioned the validity of the previous action since it was not listed on the
agenda.
Motion by Council Member Petros, seconded by Council Member Curry, to a) approve the
project plans and specifications; b) award Contract No. 4881 to GMC Engineering, Inc. for the
total bid amount of $3,967,186.45 and authorize the Mayor and City Clerk to execute the contract;
c) encumber a contingency allocation of $400,000.00 (approximately 10% of Total Bid) to cover the
cost of unforeseen quantities and work not included in the original contract; and d) approve
Budget Amendment No. 16BA-29 appropriating $880,000 from the General Fund unappropriated
fund balance to Newport Boulevard Widening Project, Account No. 01001927-980000-15R17, to
augment funding budgeted for this work.
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Study Session and Regular Meeting
January 26, 2016
The motion carried by the following roll call vote:
Ayes: Council Member Peotter, Council Member Duffield, Council Member Selich, Council
Member Curry, Council Member Petros, Mayor Pro Tern Muldoon, Mayor Dixon
22. Amendment of Newport Beach Municipal Code Chapter 5.15, Approval and Award of
Official Police Tow Contracts (G&W Towing -C-3203, MetroPro Towing -C-3189), and
Approval of Revised Tow Rates Schedule [381100-2016]
City Manager Kiff reported that Council considered this matter two weeks ago at a Study Session
and addressed recommendations.
City Attorney Harp reported that staff distributed a revised Ordinance this evening which leaves
the term of the agreement up to Council's determination. He added that if Council wants to
change the terms, the contract would need to be amended.
Roger McGregor, McGregor Yacht Corporation, reported that he has about five acres of property
that surrounds Southside Towing and believed that they are a well-managed, secured operation.
Alex Mohamed, Southside Towing, reported that two weeks ago, he spoke regarding space being
an issue and that Southside towing has a drafted lease to lease 6,000 square feet of
Mr. McGregor's facility. He commented on the time he has worked on this matter, stated his desire
to compete for the contract, and asked that Council consider his company as a provider.
In response to Council Member Peotter's question, City Attorney Harp stated that there are many
issues that the City would need to review and that the City has not seen the lease agreement. He
emphasized that Southside Towing was determined not to be qualified based on the fact that they
did not have the required amount of space. He stated that, if Council chooses, the matter could be
continued to reopen and review the matter.
Steve Baric, General Counsel for Southside Towing, addressed the process and reported that it is
unique based on the fact that, prior to the Study Session, Southside Towing did not know that two
of its competitors would be working together to allow one of them to meet the requirements of the
City ordinance.
Had they been aware, they would have provided Council with the referenced lease. He noted that
now, they comply with the City ordinance, as well as all of the zoning requirements in order to
compete. He asked that Southside be allowed to compete for this contract.
Jim Mosher referenced the subject Ordinance relative to an escalator clause in terms of "not
seasonally adjusted" and language referring to the Los Angeles/Long Beach area CPI, and
suggested the need to clarify the language so that the first reading is done properly.
Sean Ostriker referenced a comment by Council Member Curry at the last Study Session relative
to being influenced by campaign contributions and noted that he accepted campaign contributions
from MetroPro during his run for State Assembly.
Jody Campbell, MetroPro Towing, noted that the Police Department took a lot of time to vet this
item and commented on their proposal and the identification of three locations for storage.
Additionally, he noted that before submitting an RFP, they ensure that they meet the minimum
requirements or they do not submit a proposal. He urged Council to approve staffs
recommendations.
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City of Newport Beach
Study Session and Regular Meeting
January 26, 2016
Wayne Miller, G&W Towing, urged Council to approve staffs recommendations. He thanked the
Police Department and staff and commented on the RFP process. He referenced the prior Study
Session and addressed their compliance with the minimum requirements in the RFP. He reported
that a minimum term of five years is very important to them.
Mayor Pro Tern Muldoon commented on the RFP process and his belief in competition. He asked
regarding the possibility of continuing this matter to the next Council meeting to see if Southside
Towing is able to qualify.
Council Member Curry commented on the RFP process and suggested accepting staffs
recommendations.
Motion by Council Member Curry. seconded by Council Member Selich, to a) introduce
Ordinance No. 2016-2, An Ordinance of the City Council of the City of Newport Beach, California,
Amending Newport Beach Municipal Code Chapter 5.15 Relating to Official Tow Services, and
pass to second reading on February 9, 2016; b) adopt Resolution No. 2016-18, A Resolution of the
City Council of the City of Newport Beach, California, Adding the Franchise Tow Fee to the City of
Newport Beach's Fee Schedule; c) authorize the Mayor and City Clerk to execute the contracts, in
substantially the same form, for G&W Towing and MetroPro Towing, which include a proposed
tow rate schedule; and d) approve the revised Towing Rate Schedule.
Council Member Peotter offered a substitute motion. Council Member Curry believed that this is
the grossest form of political manipulation to get buddies into the deal. Council Member Peotter
noted that he has received no money from any of the towing agencies.
Substitute motion by Council Member Peotter, seconded by Mayor Pro Tern Muldoon,
a) introduce Ordinance No. 2016-2, An Ordinance of the City Council of the City of Newport Beach,
California, Amending Newport Beach Municipal Code Chapter 5.15 Relating to Official Tow
Services, and pass to second reading on February 9, 2016; b) adopt Resolution No. 2016-18, A
Resolution of the City Council of the City of Newport Beach, California, Adding the Franchise Tow
Fee to the City of Newport Beach's Fee Schedule; c) authorize the Mayor and City Clerk to execute
the contracts, in substantially the same form, for G&W Towing (C-3203) and Southside Towing
(C-7008), which include a proposed tow rate schedule; and specifying that Southside Towing must
meet the 44,000 square foot minimum within 120-days or the contract reverts to MetroPro Towing,
and maintain the five-year term, and d) approve the revised Towing Rate Schedule.
City Attorney Harp reported that, in theory, Southside Towing should have had the additional
space available on the date of the RFP.
The substitute motion carried by the following roll call vote:
Ayes: Council Member Peotter, Council Member Duffield, Council Member Selich, Mayor Pro
Tern Muldoon
Nays: Council Member Curry, Council Member Petros, Mayor Dixon
XX. MOTION FOR RECONSIDERATION-None
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City of Newport Beach
Study Session and Regular Meeting
January 26, 2016
XXI. ADJOURNMENT-Adjourned at 9:07 p.m. in memory of David Lee Parks
The agenda was posted on the City's website and on the City Hall Electronic Bulletin Board
located in the entrance of the City Council Chambers at 100 Civic Center Drive on
January 21, 2016, at 4:00 p.m. The amended agenda was posted on the City's website and on
the City Hall Electronic Bulletin Board located in the entrance of the City Council
Chambers at 100 Civic Center Drive on January 22, 2016, at 12:00 p.m.
1 ,
Recording Secretary
Mayor
City Clerk
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