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HomeMy WebLinkAbout03 - Adoption of Sewer Rate Adjustment (2nd Reading) - Written CommentsFebruary 9, 2016, Council Agenda Comment The following comments on an item on the Newport Beach City Council agenda is submitted by: Jim Mosher ( jimmosher@yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item XXI. MOTION FOR RECONSIDERATION Although motions to reconsider are extremely rare, for the reasons listed below I urge the Council to voluntarily vote to reconsider the motion it passed at the January 26, 2016, meeting adopting Resolution 2016-20 and thereby committing the City to distributing approximately $1.7 million of the City’s General Fund to select City sewer system users. Not Properly Noticed The agenda announcement and the staff report for Item 19 at the January 26, 2016, meeting indicated it would be the constitutionally required Proposition 218 hearing to accept or reject a previously published schedule of sewer rate increases. Such a hearing would normally be of interest to, and attended by, only those affected by the rate increase. Nothing in the mailed Proposition 218 notice, the Council agenda notice or the staff report prepared anyone, and especially the public unaffected by the proposed sewer rate increase, for the possibility that as part of the Proposition 218 hearing the Council might be considering, let alone taking final action on, allocation of a purported surplus in the City’s unrelated general fund. Indeed, those following the link in the staff report to the City’s website would have encountered staff’s FAQs-Proposed Sewer Rate Increase page explaining in detail why general fund monies are completely separate from sewer “enterprise” funds and almost never used to fund municipal sewer operations (aside, on assumes, from paying for a city’s own share of the use of the sewer system by municipal facilities). Only those who by chance attended the meeting learned of this proposal, and even then only in a three minute speech delivered by the Mayor immediately prior to her invitation for public comment from sewer rate payers. This gave no one an opportunity to think about or thoughtfully comment on the unexpected proposal. The fact that the “rebate” item was not properly noticed is underscored by the City Attorney and City Manager’s tortured efforts (captured starting at 03:00:03 in the video) to correlate the Council’s votes with the agenda. The conclusion seemed to be there would be one vote on a resolution not on the agenda and a separate vote on two agenda items plus a second resolution not announced on the agenda. As a result of not informing the public, a poorly written resolution was adopted without adequate public discussion of the following points. Received After Agenda Printed February 9, 2016 Written Comments - Reconsideration February 9, 2016, Council Agenda Comment - Jim Mosher Page 2 of 4 Difficult or Impossible to Execute I believe it is either unprecedented, or nearly unprecedented, for the Newport Beach City Council to adopt a resolution without the possibility it would be voting to adopt it being noticed on the agenda. To the best of my knowledge, copies of Resolution 2016-20 (the questionably adopted “rebate” resolution) were placed in the Council Chambers lobby just minutes before the hearing, and few, if any members of the public, would have been aware of this until the City Manager made reference to it after public comment had been closed. As a result, the text received no public review of which I’m aware, and as the Mayor and City Manager seemed to concede, details of what it directs staff to do were still being studied at the time of its adoption. A reasonable reading of Section 2 is that the rebate is going only to Newport Beach residential water customers with Newport Beach sewer service, and that City staff is being asked to determine in advance how much water each such individual customer will use from March 1, 2016, through December 31, 2018, and credit their account with the dollar amount of increased sewer fees that their future water use would generate. Anticipating how much future water each ratepayer will use is both impossible and incredibly burdensome on staff, not to mention costly. In addition, it does not serve the Mayor’s stated purpose of assisting those on small fixed incomes, who presumably have small water use and will, therefore, receive the smallest relief. If for no other reason, the Council should vote to reconsider its adoption of this resolution so that it can substitute a more workable rebate scheme (such as a fixed dollar amount independent of future water use). Inequitable The resolution text as adopted appears to offer no relief to the City’s residents who do not purchase water from the City, but who will still be paying an increased sewer use charge because they are connected to the City’s sewer system. Such areas seem to be primarily in the West Newport Mesa area (for the Council’s education, they may wish to review the maps showing the odd mix of who provides sewer and water service to various parts of the City contained as Figures 5.12-1 and 5.12-2 in Chapter 5.12 (“Utilities and Service Systems”) of the 2014 General Plan Land Use Element Amendment Supplemental EIR). Again, if excluding these residential sewer ratepayers from the rebate was not the Council’s intent, the vote to adopt Resolution 2016-20 needs to be reconsidered so the text can be corrected. There is a much more profound inequity in that the City’s General Fund contains revenue from a wide variety of sources, but not a penny from sewer service payments (the direction of sewer revenue into the General Fund being strictly prohibited by state law according to the staff report February 9, 2016, Council Agenda Comment - Jim Mosher Page 3 of 4 and online FAQ). In taking the January 26th vote, some members of the Council seemed to have had the mistaken belief that they were acting to return to sewer ratepayers a surplus resulting from overpayments they had made in the past. This is simply not the case. And the Resolution 2016-20 rebate will not benefit to the General Fund contributors in Newport Coast, Santa Ana Heights and other areas, who have paid other agencies for the full cost of maintaining the sewer infrastructure they use, not to mention the visitors, businesses and others who have contributed to the General Fund. Indeed, no rationale has been offered for making a gift of a portion the General Fund to select members of the Newport Beach public, without asking the recipients to provide, in return, some service of equal value to the public in general. No Public Benefit Identified Amplifying on the previous point, on January 26th parallels were drawn with a prior one-year waiver of residential planning fees in 2014. While I did not think that action was proper, either, at least it had a kind of pseudo public benefit rationale: that the subsidized private improvements would improve neighborhoods in general and thereby improve property values for all. While I’m sure making a cash gift to select City sewer ratepayers will be appreciated by the recipients, I have heard no explanation of the public benefit it provides. One might argue that it will stimulate the economy. But there is no guarantee the money will be spent in Newport Beach, or even spent anywhere. Alternatively, one might argue that the gift is intended to help the poor, but it is not tailored to accomplish that – and indeed, because of the way the rebate is structured, at a time of drought it will most benefit the largest, and possibly wealthiest, residential water users. Finally, one might argue that a safer sewer system is a benefit to all, but the Mayor specifically said the General Fund appropriation would not be going to supplement the sewer fund. No Need to Rush to Enact at January 26th Meeting Even if the substantive problems explained above didn’t exist, there was absolutely no need to rush the Resolution 2016-20 general fund rebate proposal through in such an unannounced and poorly vetted way. Although the Council adopted a companion Resolution 2016-21 approving the Proposition 218 noticed sewer rate increases, that resolution, like Resolution 2016-20, is of no force or effect unless Ordinance 2016-1 is adopted – something that cannot happen until the February 9, 2016, Council meeting at the earliest. On January 26th, Mayor could have, and should have, simply announced that both resolutions would be considered and debated if and when the Council actually voted to amend the Municipal Code, that is, on February 9th. February 9, 2016, Council Agenda Comment - Jim Mosher Page 4 of 4 Another Matter – Mesa Birch Right-of-Way Vacation On an unrelated matter, I would also urge the Council to reconsider its January 26, 2016, vote on Resolution 2016-19 in which it appears to have approved the transfer of a City-controlled or owned public right of way in the Santa Ana Heights area to a private entity, apparently without compensation. The history surrounding these properties, involving the City, the County and the County Redevelopment Agency, as well as adjacent private property owners, is extremely murky. At one time the western half the abandoned street right of way was expected to become part of Mesa Birch Park (see this February 14, 2006, staff report), but this understanding may have changed as the City’s “Spheres Agreement” with the County was negotiated (see this October 2006 draft), and seems to have been entirely left out of the final signed agreement. The January 26, 2016, staff report on this matter (Item 17) did not, in my view, provide adequate background on either the history or current status of the land ownership in this area. In my view, the Council should be very cautious about turning over to a private entity, without compensation, land that was once intended to be part of a public park. Finally, it might be noted that in this matter, in contrast to the one discussed on the preceding three pages, when City staff belatedly realized the need to have the Council adopt a resolution regarding the right of way vacation, the agenda for the January 26th meeting was revised to indicate a resolution was going to be voted upon, and the text of the proposed resolution was made available for public review on the Friday before the meeting. That is all the more reason why the adoption of the sewer rebate resolution (discussed above) was mishandled and should be reconsidered.