Loading...
HomeMy WebLinkAbout07/10/2001 - Study SessionCITY OF NEWPORT BEACH City Council Minutes Study Session July 10, 2001- 4:10 p.m. ROLL CALL Present: Proctor, Glover, Ridgeway, Bromberg, Mayor Adams Absent: Heffernan, O'Neil (excused) CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Mayor Pro Tern Ridgeway noted the large audience in attendance at the meeting for Item No. 3, Newport Harbor Policy Issues. He challenged the group to become as involved with the City's airport effort. 2. PROPERTY AND GENERAL LIABILITY INSURANCE RENEWALS. City Manager Bludau announced that Item Nos. 14 and 15 on the evening agenda, General Liability Excess Insurance Renewal and Property Insurance Renewal, recommend approval of the renewals, both at an increased cost. City Manager Bludau stated that he placed the item on the Study Session agenda to give the City Council the opportunity to ask questions of staff on what was done to try to get the best insurance coverage. Risk Manager Farley introduced the City's broker, Mark Zahoryin of Cal Surance. Mr. Zahoryin stated that the insurance market is currently very difficult, primarily due to reinsurance and capacity. He stated that the Insurance Company of the West (ICW), which has been the City's carrier for several years, has gotten out of the municipality insurance business. Mr. Zahoryin stated that Royal Indemnity is being recommended for the general liability excess insurance coverage because they provided the best rate. Mr. Zahoryin stated that the City has been with Zurich Insurance Company for property insurance for the past seven years. He stated that Zurich offered an 11% increase for the renewal, which was favorable in the current market. He added that Westchester Fire Insurance Company offered the best rate for the separate coverage of the City piers. With regards to the difference in conditions coverage, Mr. Zahoryin stated that seven carriers declined to bid, four carriers were not pursued due to high indications and six quotes were received. Mayor Adams confirmed with City Manager Bludau that the quotes received were used in the preparation of the budget. Mayor Pro Tem Ridgeway asked if the City had been self- insured in the past seven years for piers or other property. Mr. Zahoryin stated that the City Volume 54 - Page 350 INDEX [No report] City of Newport Beach Study Session Minutes July 10, 2001 INDEX self- insured the piers during that period and, seven years ago, added earthquake insurance. Mr. Zahoryin further explained that three separate policies are used to cover the City's two piers, and they include policies for all risk, earthquake and wave wash or flood."' At Mayor Pro Tom Ridgeway's request, Mr. Zahoryin provided some history on the City's coverage for all risk, not including the piers. In 1998, the total insured value was approximately $35.6 million and the premium was approximately $58,000. In 1999, the value increased to approximately $75.6 million and in 2000 to $79.9 million. Mr. Zahoryin added that the carrier that was covering the piers, Zurich, increased the pier premium in the current renewal by 40% because the piers are not sprinklered. Mayor Pro Tom Ridgeway asked if the piers would be sprinklered in the future. Public Works Director Webb stated that they would not, due to cost. Mayor Pro Tem Ridgeway observed that the City is only covered for $5 million. Mr. Zahoryin stated that the City actually has various layers of insurance, uses several insurance companies and is covered for $35 million. He added that the total premium for property and earthquake in the current renewal increased by 19.3 %. Mayor Pro Tem Ridgeway asked if the City had any earthquake claims since 1933. Mr. Zahoryin stated that the City had not had such claims, but that earthquake coverage is in consideration of a potential catastrophic loss. Council Member Glover confirmed with Mr. Zahoryin that the earthquake coverage is for the City's own property and buildings. Mayor Pro Tem Ridgeway stated that every public agency is dealing with the increase in insurance rates. He noted that the Sanitation District has discussed the problem, and has considered self- insurance. He felt that it was too large of an issue to discuss in such a short period of time. City Manager Bludau stated that he felt satisfied that staff and the broker had done everything possible to receive the lowest rates. Council Member Glover stated that she understood that insurance didn't pay on claims for earthquake damage unless a building was completely destroyed. Mr. Zahoryin stated that, based on the value of the building, the coverage does apply to the percentage of the building that is damaged. He recommended that the City not pay for earthquake insurance to cover minor damage, and to only cover the catastrophic losses. Council Member Proctor asked if the City should consider more self - insurance. City Manager Bludau stated that he didn't think so and felt that the increase in coverage was acceptable. Mayor Pro Tem Ridgeway stated that the property insurance seemed reasonable, but that the general liability excess insurance appeared to be skewed. Mr. Zahoryin stated that the City is self- insuring on earthquake coverage in an amount of approximately $5.7 million. Volume 54 - Page 351 City of Newport Beach Study Session Minutes July 10, 2001 Council Member Proctor noted the drop in the City's amount of self - insurance over the past seven years. He asked what precipitated the decrease. Mr. Zahoryin stated that the current amount of self- insurance is where the City has wanted to be, but couldn't in prior years due to a soft market. He added that in 1994/1995, the premium with a $1 million Self - Insured Retention (SIR) at $10 million in coverage was $343,000, and noted that the current limit is $25 million. Referring to the current premium of $331,000 for general liability excess insurance, Council Member Proctor asked for the history of what the expenses were in the previous year. Mr. Zahoryin stated that the City had no incidences over the $500,000 SIR. Mayor Pro Tem Ridgeway asked if this had been true in prior years also. Mr. Zahoryin stated that it had. Mayor Pro Tem Ridgeway asked why the City is continuing to pay over $300,000 per year when it has never had a claim. City Manager Bludau stated that the insurance is paid to cover a big event and it is unknown when one could occur. In response to Mayor Pro Tem Ridgeway pointing out that he is talking about general liability excess insurance, Mr. Zahoryin stated that the catastrophic potential for liability claims are just as significant. Council Member Proctor asked if an increase in the deductible should be considered. Mr. Zahoryin recommended not increasing the City's deductible because if the market continues to harden and the City decides to lower the deductible, the cost differential would be greater. He added that the reason the City received the lower quote from Royal Indemnity was because the underwriter used to be with ICW and was familiar with the City's account. Council Member Glover stated that it's natural to question having insurance when it's not being used. She additionally noted that the City used to have trouble getting insured and she's appreciative that the City is currently less vulnerable. 3. NEWPORT HARBOR POLICY ISSUES. City Manager Bludau stated that Council Member Bromberg requested that this item be discussed at a Study Session. Harbor Resources Manager Melum stated that the majority of the water area in Newport Harbor is State Tidelands, given to the City in a grant in the 1920's. He stated that the zoning code for the City stops at the U.S. Bulkhead Line. The property past the Bulkhead Line is controlled by the City's Harbor Permit Policy, Council Policy H -1. Harbor Resources Manager Melum displayed exhibits illustrating the Bulkhead Lines in the peninsula area. He pointed out the areas on the harbor that are excluded from being built on by City policy, which included Balboa Island and two locations on Lido Isle. He noted that the harbor is approximately 95% built out, so that the majority of the construction is for revisions and maintenance on existing structures. Harbor Resources Manager Melum stated that the City's harbor permit policies were originally drafted in 1964, have been in effect since that time Volume 54 - Page 352 PROO Harbor Permit Policy /Council Policy H -1 (51) City of Newport Beach Study Session Minutes July 10, 2001 INDEX and haven't been revised considerably. rie stated that the policies have worked well and staff is only recommending some housekeeping changes. He added that different kinds of construction are permitted on different locations in the harbor. He displayed exhibits of some of the types of construction and vessels that are permitted. Harbor Resources Manager Melum stated that the major issues being dealt with under the harbor permit policies are dock construction, dock revision and the berthing of vessels. He stated that a property's permit zone is determined by an extension of the side property line to the Bulkhead Line. He stated that in some locations where the channels are wide, permitted zones are increased past the Bulkhead Line. Mayor Adams asked if two vessels can be placed in a permitted zone. Harbor Resources Manager Melum stated that they could, as long as the boats stay within the bay ward extension of the side property lines. He continued to display exhibits of different boat and dock configurations in the harbor that followed setback and policy requirements. He added that the pierhead and project line restrictions apply to structures only, and not to vessels. Harbor Resources Manager Melum stated that the harbor policies are general and allow different types of structures throughout the harbor, which are determined by property size, and the pierhead or Bulkhead Line location. He stated that this has resulted in a diversity of structures throughout the harbor and has worked very well. Council Member Bromberg stated that he'd like specific information presented about Balboa Island. Harbor Resources Manager Melum confirmed that the Balboa Island section was included in the original policies adopted in 1964. He read the current policy. He stated that staff has interpreted the policy to mean that no new docks will be allowed to be constructed on Balboa Island. He added, however, that the City has allowed remodeling, if kept within the existing structures' square footage. And, additionally, has not given consideration to the size of the vessel the new structure might be able to accommodate. Council Member Glover asked if anyone had been deprived of having a boat under the harbor policies. Harbor Resources Manager Melum stated that the City has denied dock applications in the past. He added that a large number of properties on Balboa Island do not have a dock. Per Mayor Adams' question, Harbor Resources Manager Melum stated that staff takes into consideration the impact of a remodeled structure on beach area or swimming activities. Per Council Member Bromberg's question, Harbor Resources Manager Melum stated that staff looks at the beach and the immediate water adjacent to it. Council Member Bromberg cited an example of a vessel whose bow is resting in the sand, although surrounded by water. Harbor Resources Manager Melum stated that staff would interpret the design and use of a structure that would result in a vessel being high and dry during low tide as impacting the beach. Council Member Bromberg commented on staff looking at the structure and not the vessel, as mentioned earlier. Harbor Resources Volume 54 - Page 353 City of Newport Beach Study Session Minutes July 10, 2001 INDEX Manager Melum stated that the interpretation of the policy is made by staff, and is not codified. He added, however, that prior to the mid -90's, all permits on Balboa Island required City Council approval. Council Member Bromberg asked what action the City would take if a vessel were found to be high and dry during low tide. Harbor Resources Manager Melum stated that per policy, the City's only opportunity to make a determination is when the request for the structure revision is made. Mayor Adams asked how a determination could be made by staff if the size of the vessel is not known. Harbor Resources Manager Melum stated that only a guess of the possibilities can be made. He added that in some cases, the applicant will inform the City of the vessel type and in other instances, the City will require vessel information. Mayor Adams suggested that U- shaped docks can limit how close a vessel can get to the beach. Per Council Member Bromberg's question, Harbor Resources Manager Melum stated that there are limitations to how far a property owner can dredge towards the bulkhead on Balboa Island, but generally not elsewhere in the harbor. He added that this is probably due to the old bulkhead that is around Balboa Island and also to maintain the sandy beach. Mayor Adams asked why the City is limited to dealing with the issues by Council policy versus having the policies codified. City Attorney Burnham stated that Chapter 17.24 of the Newport Beach Municipal Code deals with structures in the harbor and refers to the harbor policies, and that additional details could be added. Council Member Bromberg asked about a vessel docked above eelgrass. With regards to regulations, Harbor Resources Manager Melum stated that he is not aware of it being a problem. Additionally, Harbor Resources Manager Melum stated that eelgrass is only considered when looking at a revision to an existing structure. Mayor Pro Tem Ridgeway asked if sand replenishment is taken into consideration when reviewing permits for the south side of Balboa Island. Harbor Resources Manager Melum stated that all sand is required to remain or be returned to the beach. Mayor Pro Tem Ridgeway additionally asked if the changing of the beach during the year is taken into consideration. Harbor Resources Manager Melum stated that most boat owners do not want their boats to be beached, so they will ask the City for a dredging permit. He stated that this provides the City with an opportunity to consider sand replenishment. Mayor Pro Tem Ridgeway asked for staffs opinion on the issue of Mr. Cook's dock. Harbor Resources Manager Melum stated that Mr. Cook presented a proposal to the City to reconfigure his dock. Harbor Resources Manager Melum stated that it appeared that the reconfiguration would land lock two adjacent moorings, and confirmed this with the affected mooring owners. The City advised Mr. Cook that the permit would most likely not be approved for this reason. Mr. Cook reconfigured the dock, but the City denied the application due to the impact to the beach, the two mooring owners and the adjacent pier owner. Harbor Resources Manager Melum Volume 54 - Page 354 City of Newport Beach Study Session Minutes July 10, 2001 INDEX stated that Mr. Cook has since submitted another application and staff is in the process of reviewing it. Noting the location of the dock as 1106 and 1108 South Bay Front, Council Member Bromberg stated that the channel in that area is fairly narrow and asked how far a vessel can encroach into the channel. Harbor Resources Manager Melum stated that the general rule is that a vessel can extend beyond the structure by the width of the boat, if there is no hazard to navigation. Per Mayor Adams' question, Harbor Resources Manager Melum stated that the size of the vessel is only indirectly limited by the policies. He stated that the applicant is only required to disclose the size and number of vessels when engineering information is required by the Building Department. Dick Ashof£ displayed some photographs of Carole Diane, a vessel moored near Marine Avenue and Amethyst Avenue. He stated that the vessel is approximately twenty feet high and fifty feet Iong, and has a major impact on Balboa Island. Mr. Ashoff continued to display several photographs of the vessel, and its relationship to the beach and the channel. He noted that the vessel rests on the sand during low tides. Ben Schmid, 203 Pearl Avenue, stated that he and his family utilize both the south and north sides of the bay. He suggested that the City adopt a new ordinance to limit vessel length to forty feet between the Grand Canal and Garnet Avenue. Bill Pierpoint, 124 Apolena Avenue, stated that he and his wife have chosen to live on Balboa Island due to the unique lifestyle it provides his family. He stated that they enjoy the beach, swimming and boating. He stated that his family doesn't want to see the eroding of the character and charm of Balboa Island. He stated that its the only public island on the bay and special care must be taken to ensure that access to the beaches and water are maintained. He added that he understands private property owner rights, but feels that approving the mooring of Mr. Cook's vessel would set a dangerous precedent. Council Member Proctor asked if taking testimony from the audience on a pending application would cause a due process problem. City Attorney Burnham stated that it wouldn't since it was made clear earlier in the meeting that the agendized item is a general discussion of the harbor permit policies and the speakers' comments, so far, have been relevant to the issue. Council Member Proctor asked about the application and appeal process. City Attorney Burnham stated that the process begins with the Harbor Resources Manager, with appeals to the City Manager and then the City Council. Tom Houston, 206 Ruby Avenue, stated that he swims and kayaks in the bay, and is concerned about maintaining Balboa Island's unique nature and beaches, which are used by guests of the island. He expressed his frustration with the proposed location of Mr. Cook's vessel, stating that there are other locations in the harbor that would be better. Mr. Houston referred Volume 54 - Page 355 City of Newport Beach Study Session Minutes July 10, 2001 INDEX to the staff recommendation for changes to the Balboa Island section of the Harbor Permit Policy, and stated that he disagrees with removing the language about swimming in the bay and using the water and the beach. He stated that a lot of effort has gone into maintaining the water quality in the bay, so that people can swim. Blocking access to this swimming shouldn't be allowed and he requested that the City Council deny the application of Mr. Cook. Pete Swift, 1719 Skylark Lane, stated that he performs dock repairs and revisions in the harbor and has seen applications for Balboa Island denied, indicating to him that Balboa Island is special. He stated that there's already many restrictions and he's worried about more rules and regulations being added for the docks. He stated that the harbor is there to accommodate vessels. Pam Sigband, 1110 S. Bay Front, requested that the City Council evaluate the long -term impact that any pier approval would have on the future of Balboa Island. She stated that the island has been the City's number one tourist attraction for years, and the charm and the public's enjoyment of a special place needs to be preserved. She stated that oversized vessels will severely impact the safety of the island's beaches by obstructing navigational visibility and the viewing of bay activities. Ms. Sigband stated that a single person should not have the right to take away the public's enjoyment of the bay. Bob Wachtler, 314 Sapphire Avenue, stated that he is against large vessels on South Bay Front because they cause hazard issues to the waterway, safety issues for swimmers, and impede the public's use of the island's beaches. Mr. Wachtler stated that everyone should be proud of Balboa Island and share in the responsibility of protecting it. He stated that the qualities of the island need to be preserved for tourism and the City's economy. He suggested that tough, new regulations be put into effect. John Van Vlear, 495 Dove Street, stated that he is an attorney representing the Cooks. He commended the large turnout at the meeting and stated that the Cooks also understand the uniqueness of Balboa Island. Mr. Van Vlear stated that large vessels are not unique to Balboa Island, however, and he presented several photographs of vessels around the island. He stated that the harbor permit policy is workable, and allows management of the harbor and the interests of boat owners and property owners to coexist. Council Member Bromberg stated that many of the vessels in the photographs presented by Mr. Van Vlear are not as large as the Cook's vessel and many do not impact the beaches. Jim McClaren stated that a 58 -foot vessel has been moored near the Cook's property for several years, and two others are also on the island. He noted that they are motor yachts, not sailboats. He stated that the length of the vessel is less important than how far out it extends into the waterway. Mr. McClaren noted other large vessels and stated that the Cook's vessel is a pilot house yacht, which means it is lower than a sport fishing vessel. He concluded by stating that approval of the Cook's vessel would not set a Volume 54 - Page 356 City of Newport Beach Study Session Minutes July 10, 2001 precedent. IW11)a/.� Council Member Bromberg asked if a pending permit application would be affected by a moratorium on permits. City Attorney Burnham stated that it could depend upon the terms and conditions set by the City Council on the moratorium. Council Member Bromberg stated that the concern of many of the speakers is legitimate. He stated that it is time to look at the harbor permit policies and possibly tighten them up. He noted that the Harbor Committee would be reviewing the Harbor Permit Policy, specifically as it relates to Balboa Island, at their meeting on July 24, 2001. Council Member Bromberg requested that staff prepare a report for the City Council meeting of August 14, 2001, with recommendations from the Harbor Committee and staff on the existing Harbor Policy, specifically as it relates to Balboa Island. He stated that the language in the policy that deals with Balboa Island and the impacts on the beach, swimming and land with respect to the use of pier permits for new piers, remodels or repairs should remain. He stated that public views should also be taken into consideration. Council Member Bromberg requested that the report include the impact of pier permits, docks and larger vessels on the beach, swimming, navigation and public views; dredging on and near bulkheads; vessel extension into the channels, specifically into the south channel; and vessel size, in certain locations such as South Bay Front. He additionally requested that staff prepare a report for the City Council meeting of July 24, 2001, with appropriate language for a moratorium on pier permits for new piers, remodels or repairs, for South Bay Front from Garnet Avenue to The Grand Canal. Mayor Pro Tem Ridgeway stated that the harbor permit policies have worked well for quite some time. He stated that he disagrees with creating any new legislation which would make it more difficult in the harbor, because of a single circumstance. He noted that the bigger issue is the charming character of South Bay Front and Balboa Island, and weighing this against the boating industry and the harbor in general. He announced that the July 24, 2001, meeting of the Harbor Committee would take place at 7:30 a.m. in the Council Chambers. Council Member Bromberg pointed out that a review of the harbor permit policies is not anything against boat owners, and only a quality of life issue. Council Member Glover requested that a list of the Harbor Committee members be provided to her. She stated that if the Committee is comprised primarily of Balboa Island residents, it wouldn't be representative of the overall water community. She added that she is hesitant to change anything that is working well. She stated that each request is unique and she is confident that the right decisions have been made. Council Member Glover stated that it appears that a moratorium is already in place for Balboa Island. Mayor Adams stated that those in the audience that did not have a chance to Volume 54 - Page 357 City of Newport Beach Study Session Minutes July 10, 2001 speak at the current meeting meetings mentioned earlier. 4. CITY HALL SPACE OPTIONS. have the opportunity at one of the future City Manager Bludau stated that the 2001 -2002 Capital Improvement Program budget allocates $345,000 for Phase I of the City Hall Space Expansion project. Public Works Director Webb stated that there is a deficiency of space in the City Hall complex. He displayed photographs of current conditions in some of the offices, hallways, work areas, public counters and storage areas. Public Works Director Webb stated that he attempted to come up with a plan that could be accomplished within one year. He presented a drawing of the current City Hall complex. Public Works Director Webb stated that some of the options for increasing the space at City Hall include installing mobile offices outside of the Professional/Technical building, expanding the lobby in the Professional/Technical building, demolishing the jail and installing mobile offices, expanding the engineering area and adding a second story above the Revenue Division. Public Works Director Webb displayed drawings of the various options and photographs of the existing sites. He stated that the total cost of Phase I, which would include all of the options except the addition of the second story, would be $348,000. He stated that the second story would cost approximately $250,000, and would be budgeted in the next fiscal year. Council Member Glover stated that City Hall used to be beautiful, and the addition of walls over the years has created an unwelcome atmosphere. She suggested that if extra space is needed, an architect needs to be hired. She stated that she opposed mobile offices. Mayor Adams stated that he is also concerned about the aesthetic impacts. He acknowledged that the space is needed and temporary units could be used for a short -term solution in a crisis situation, but that they should not be considered a long -term fix. He agreed that an architect should be consulted. Council Member Proctor stated his support for spending more money and time, and doing it right. Council Member Bromberg stated his support for hiring an architect. Mayor Adams stated that the only option he could support is the addition of the second story. City Manager Bludau stated that the greatest need for expansion is in the Professional/Technical building. Mayor Adams suggested that staff bring the item back for further discussion at the Study Session of July 24, 2001. PUBLIC COMMENTS — None. Volume 54 - Page 358 INDEX City Hall Space Options (35) City of Newport Beach Study Session Minutes July 10, 2001 ADJOURNMENT - 6:10 p.m. The agenda for the Study Session was posted on July 5, 2001, at 2 :50 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. O-so,�A e--d- Recording Secretary gW _ % City Clerk Mayor Volume 54 - Page 359 INDEX I