HomeMy WebLinkAbout11/28/2012 - Special MeetingWIIM03 W t WA Ell A 8
City Council Minutes
Special Meeting
November. 28, 2012 — 6:00 p.m.
L ROLL CALL - 6:00 p.m.
Present: Council Member Hill, Council Member Rosansky, Mayor Pro Tern Curry, Mayor Gardner,
Council Member Henn, Council Member Selicb , Council Member Daigle
H. PLEDGE OF ALLEGIANCE - Council Member Henn
Ill. NOTICE TO THE PUBLIC
IV. PUBLIC COMMENTS -None
V. CURRENT BUSINESS
I. RESIDENTIAL PIERS. [100 -2012}
Council Member Selich reported that because he owns a residential pier, the City
Attorney has advised him to recuse himself from hearing this item. Council Member
Selich, therefore, recused himself and left the dais.
City Manager Kiff provided a PowerPoint presentation which summarized the topics to be covered,
and discussed the definition of tidelands, ownership by the State, responsibility of the City to
maintain and manage the tidelands, tidelands in Lower Newport Bay, County tidelands, State,
County and City administration areas and private waterways, the process for overseeing compliance
with the Beacon Bay Bill, the need to charge fair market value, details about SB152, and California
State Auditor Report No. 2010 -125 by the State Lands Commission,
City Manager Kiff addressed Council efforts to date, including the previous appraisal and adoption
of mooring rates, and the most recent approval of the commercial marinas process. He presented
information regarding how rents are set and related regulations, appraisals obtained and
conclusions, a recent workshop, recommendations and applicability of the recommendations, and
revised recommendations subsequent to the workshop. He addressed the proposed rent, phasing
period, audits, and the requirement for a new appraisal every five years. In addition, he addressed
the current permit fees, allowing the ability to rent, residential piers but at a rate that is
commensurate with small commercial marina rates, terms included in the written permit,
transferability, and examples through full phase -in.
City Manager Kiff addressed the lease area recommended by the appraisers and examples of single
and shared docks at various locations within the City. He presented details of the phase -in plan,
excluded areas, and use of the Tidelands Management Fund pursuant to the Beacon :Bay Bill. He
noted that all related documents are available on the City's website.
Mayor Gardner noted changes made to the recommendations subsequent to the workshop and
reported that the Committee communicates daily with staff and continues to receive and consider
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public input. She stated that additional changes will be recommended as the meeting proceeds.
Council Member Henn stated that one of the issues of concern is the insurance requirement in
conjunction with the indemnity, which may make the requirement expensive or unfeasible, He
indicated that Council will need to consider that issue to possibly develop other feasible solutions
such as a City - organized insurance plan that would cover both the City and dock owners. He
suggested postponing the insurance requirement issue until Council has had the opportunity to
study it carefully with the possibility of giving up the hold harmless provision with the alternative
solution that is identified.
Council Member Henn also clarified that substantive changes have been made from the original
proposal and Council intends to continue receiving public comments and consider the impacts of the
proposal. He suggested that, after receipt of public input, Council consider adjourning the meeting
to 4:00 p.m. on December 11, 2012 to continue Council discussion with the benefit of additional time
to consider the suggestions being made. He suggested not making a final decision until that time.
Council Member Rosansky agreed, but suggested scheduling a Special Meeting on December 10,
rather than addressing the item during the Regular Meeting of December 11.
Discussion followed regarding the availability of Council on December 10. It was concluded that
Council should wait until after public comments are received before deciding on a date and time to
schedule the continuance.
Mayor Pro Tern Curry agreed with holding the meeting at 4:00 p.m. on December 11. He expressed
concerns regarding the insurance provisions and expressed his interest in hearing public input on
the matter.
Mayor Gardner stated that one of her proposals is to leave the rent issue as it is. She highlighted
the evening's public comment process and noted that, since public comments will be received at this
time, it will not be taken that night at the Adjourned Special Meeting. She encouraged residents to
comment at this time and communicate through phone or email going forward.
Council Member Henn noted that if the meeting is adjourned to 4:00 p.m, on December 11., the
meeting location will be at the new Council Chambers at 100 Civic Center Drive,
Chet Needleman noted that most people have one or two boats and that it does not seem right to
charge for a 10 -foot area on all four sides of the dock. He expressed support for the owners' ability to
rent out the docks and stated that he would be willing to pay a higher rent to do so. Council
Member Henn reported that the City does not intend to charge for the back side of the dock.
Seymour Beek addressed the existing permitting process and spoke in opposition to the item. He
stated that in some places in the Harbor, piers were built above sand and water, but the public has
access to them, He referenced the rental issue and noted that there is a parking problem that will
be exacerbated by the rental of piers.
Lawrence Leifer stated that he reviewed the appraisals performed by City contractors and
questioned whether the current condition is a lease. He believed that since the appraisers did not
have access to the permit information, they had no way of comparing their results to leases of other
tideland areas and do not comply with standards.
Danny Sullivan expressed disappointment that Council Member Selich cannot participate since he
would act in the interest of people who own docks. He expressed concern regarding basing the fees
on the size of the docks versus the number of boats using the dock. He suggested charging for the
actual water space used noting that the market does not charge people for space they do not use. He
addressed the absence of a long -term lease option, and questioned the calculation for the proposed
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assessments and the process for abandoning docks. He encouraged Council to spend more time
considering the issue and to simplify the formulas used on calculating the rental fees.
Bill Kinney addressed the existence of a perpetual easement for pier and slip purposes. He
disagreed with the statement in the staff report indicating that the easements may preclude rent,
and noted that the easements were granted when the Promontory Bay was private property.
Hugh Randolph indicated that he is representing various properties and voiced his opposition to the
proposed assessments. He believed that Council must carefully consider the issue, especially related
to parking problems that will increase by allowing private dock owners to rent out their docks.
Chris Vatson stated that if the assessment is approved, she will be inclined to tear down her dock
and noted that she has several friends and family members that will be doing the same.
Devin Kelly expressed appreciation to Council for its efforts and continued to read the letter from a
previous speaker, Mr. Liefer, regarding problems with the appraisals. She concluded by stating that
she believes that the issue needs additional time to consider all the impacts.
Andres McCoramco stated that his canal is an open sewer caused by rotted sewer lines and that his
property often floods with hazardous waste. He addressed his requirements as a landlord to provide
a safe environment and believed that, if the City approves this project, it will become the landlord
and will need to comply with the same standards.
=Jill Lindsey was advised that if private property extends to the waterways, the owner will not be
charged. She expressed opposition to the matter.
Walter Albercourse III spoke in opposition, believing that property values will decrease and spoke in
support of allowing people to rent their docks. He believed that no one will underwrite the
insurance and addressed the high costs involved. He took issue with including the 10 -feet around
the docks in the calculations and urged Council not to rush the issue. He stated that you cannot
charge for space in front of the docks and noted that CPI can get very expensive over time.
Gale Rosenstein expressed disappointment that Council is considering allowing private dock owners
to rent dock space.
Roger Petrels spoke in opposition to the item.
Bud Readly presented a picture of his neighbor's dock and noted that he would not have the ability
to rent out his dock in its present condition. He stated that the City would be impacting his
property if it included a hold harmless clause insurance requirement, and addressed possible
litigation since cost -of- living increases should be made reasonable. He asked. Council to make the
issue fair and logical.
Mike Brewer spoke on behalf of his parents who have a larger dock and are living on a fixed income.
He spoke in opposition to the matter and believed that many people will remove their docks.
Regarding Council Member Selich's recusal, City Attorney Harp explained that if there is any item
under consideration that could cause a financial impact on any member of Council, the Council
Member cannot participate in any deliberation or decision regarding the item. He clarified that
these rules are established by the State of California.
James Gardner asked if the public will be able to speak at the proposed December 11 meeting
because of the need for additional information regarding insurance. He expressed concerns with the
methodology used in the appraisals and requested additional information on the process.
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Don Abrams thanked Council for its efforts, reported that he owns two docks, and expressed
concerns with the City's deteriorating infrastructure. He hoped that Council will be reasonable in
its decision.
Bob Coop questioned how enforcement will occur and addressed related increased expenses. He
expressed concerns regarding decreased property values, impacts to residents, and the costs and
availability of insurance to indemnify the City.
Sara Abraham spoke in opposition to the rate calculations relative to the 10 -foot waterway around
docks and also questioned how enforcement will occur.
James Westlane objected to the 10 -foot boundary around docks in calculating the proposed rates.
He indicated he would be willing to pay the extra fees if the City would dredge the area around the
docks and asked that Council consider the square footage of the dock and ramp and 10 -feet out oil
the side as a basis for calculating the proposed fees.
Kristine Thagard, referencing written comments submitted on behalf of the Newport Beach Dock
Owners' Association, expressed concerns with the process. She encouraged Council to take more
time to consider this issue in order to understand all the issues. She believed that many of the
issues can be addressed, noted that the matter of insurance is not workable, and presented a list of
insurance companies that will not provide the type of insurance proposed. She addressed costs
related to a general liability policy. She addressed SB 152, actions by neighboring cities, and the
amount of taxes being assessed by the City. She asked for an opportunity for owners to obtain
appraisals and. that Council continue the item until after the first of the year. She also believed
that, if residents and the City work together, important issues will be resolved, but indicated that 10
days is not enough time for due process.
Council Member Daigle explained the process on the SB 152 vote and noted that the City's legislator
opposed the matter.
Bob Levin asked Council to pay attention to the comments provided. He reported that his neighbors
have agreed to keep their lights off during the Chamber of Commerce Boat Parade in protest of the
item.
Jim Miller stated that he knows people who are on fixed incomes that could lose their homes
because of the proposed assessments. He expressed concerns with the appraisal process and
presented examples of various properties that would not be comparable in terms of the rents they
could charge. He suggested using the State Lands Commission's benchmark for establishing rates.
Domenica Crestacia discussed the condition of the area around her dock, addressed high property
taxes, and expressed hope that the additional monies can be used to improve the area. She
questioned the amount being paid for the new City Hall and whether that was put out for
competitive bidding. She spoke in opposition to the project.
Brian Harrington reported that he rents his residence and addressed the impacts of the proposed
assessment to renters and homeowners.
Jim Mosher commented on the fair market value requirement as it relates to gifts of public funds
and the formation of the Ad Hoc Committee an Harbor Charges, as well as its termination. He
stressed the importance of understanding the rules and about transparency, and referenced the
City's Quarterly Business Report where it 'indicates that the Ad Hoc Committee on Harbor Charges
is still an active committee. He wondered why the committee was never formally extended, who the
members are, how they were selected, and whether there are quorum issues.
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Tom Johnson referenced previous comments regarding a possible boycott of the Christmas Boat
Parade and noted that if residents boycott the parade, they will be hurting restaurant owners,
outlets that provide viewing points, catering companies, and tour boats on the Harbor, and not the
City.
Cathy Nesmon thanked those in the public who attended and expressed her concerns about the
rental rates.
Carol Seymour spoke in opposition to the matter and discussed her efforts to clean up the area. She
believed that this should be a City -wide issue because of the extensive public use of the area, and
not just the responsibility of a few residents.
Mayor Gardner addressed contributions toward the maintenance of the Harbor by every resident
through the use of the General Fund.
City Manager Kiff addressed the issue of charging on all four sides of the dock and confirmed that
the proposal should reflect rental rates of usable space which may change depending on the dock's
location in the Harbor. He noted that sand underneath the docks would not be included in the
permit area. He acknowledged receipt of Mr. Leifer's letter and reported that it, along with the
City's response, will be posted on the website. He clarified that the project is not a proposed lease
agreement, but rather an annual pier permit similar to the existing annual renewal process. He
acknowledged the need for further review regarding perpetual easements and other issues by
residences that are not related with the tidelands. City Manager Kiff reported that, if docks are
over private property, the City will not charge rent. It will do so only if the property is over City
tidelands. He addressed the issue of a cap on the CPI and suggested that this may be something
that Council should consider. He agreed that it will take a. lot of staff time to set everyone up in the
process but it will not involve new staffing, but rather refocusing of existing resources. He reported
that the new Civic Center project was competitively bid and listed the various projects that were
included in the overall cost.
City Attorney Harp indicated that the City Attorney's Office has not been provided with a copy of
the easement agreement and requested one for review. He addressed SB 152, noting that the fair
market requirements related to the bill are for State lands and does not apply to City lands.
Regarding the issue of gifts of public funds, he pointed out that the City is managing State tidelands
and that there is a requirement to receive fair market value for the rental of that property. He
noted that Council Member Selich has not participated in the committee meetings and has been
consistent in recusing himself. He emphasized that no Brown Act violations have occurred.
Council Member Henn believed that the appraisers should be asked about the issue regarding the
lack of availability of a form, permit or lease, and whether or not that invalidates the appraisal and
should be cause for reconsideration. He addressed the issue of charging for the space that is used
and stated that, since the pier and float provide use and access by the public to the tidelands, it
would not be appropriate to charge just for the space a boat uses. He noted that when you build
something over land owned by someone else, you run the risk of forfeiting the improvement if you
fail to keep it. He addressed the issue of changing responsibilities for the City in its capacity as a
landlord. City Attorney Harp confirmed that the City does not accrue additional responsibilities or
costs by increasing pier rents.
Council Member Henn commented on the issue of insurance and noted that home liability insurance
coverage extends to the related dock. He noted that the difficulty is with the City's proposal for a
"hold harmless" clause in conjunction with the regular insurance. He agreed that the indemnity
issue is one of the issues that will need further consideration by the City. He stated that the issue
will disappear if the requirement is removed by the City. He addressed the issue of allowing
rentals, noting that business and marina owners in the Harbor have recently undergone the same
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process as tonight. He indicated that it is not fair for residential dock owners to be able to use a
public asset for little or no cost, rent it out, and not expect a homeowner to not pay a fair rate. He
addressed fairness to other Harbor users and the costs they incur.
City Manager Kiff noted that the recent Harbor dredging was partially funded by Federal money
and that the City has been aggressive in securing additional funds and grants to pay for necessary
projects.
Council Member Henn commented on the City's attempt at being fair and the importance of getting
the right perspective on everything that is occurring in the Harbor. He addressed the piers in the
Grand Canal and the need to research the matter further, and addressed efforts by the Tidelands
Management Committee to develop a structure that will secure increases in revenue to be spent in a
way that will assure they are spent on improvements in the Harbor. He commented on the
recommendations of the appraisers and the Committee's modification of the recommendations to
only include usable areas along the docks. He pointed out that this was a substantial downward
modification of costs from what was recommended by the appraisers.
Mayor Gardner believed that residential piers should not be rented and acknowledged the validity of
related parking issues. She expressed support of a CPI, not to exceed a predetermined amount.
City Manager Kiff suggested that Council conduct straw votes to include or not include
consideration of various issues.
Mayor Pro Tem Curry acknowledged the validity of comments regarding the insurance issue and the
impacts of indemnification provisions. He believed this should be separated from the matter and
that people should have the right to rent their docks to recoup some of the costs. He agreed with a
cap to the CPI. He addressed the 10 -foot issue and requested reconsideration of the definition so
that people pay for what they are using. He noted recent actions to improve the Harbor and noted
that revenue is generated from a lot of other people in support of the Harbor activities.
Council Member Daigle indicated that she can support certain issues, and addressed the rental
rates and SB 152. She discussed the differences in appraisal processes and believed that the burden
is on the State of California to disprove the City's numbers. She also questioned whether there were
other methods for setting fees.
Council Member Rosansky commented on the need to be fair; however, opposed placing a cap on CPI
since no caps were set for the other users. Council Member Henn indicated agreement with Council
Member Rosansky's comments.
City Attorney Harp noted that Council is free to set the fair market value based on the appraisal
and can consider other information.
Council Member Hill commented on his original intentions to vote on the item, but indicated that he
was persuaded by some of the public comments tonight. He believed that he would look at raising
the rates over a five -year period to the fair market value, but proposed a CFI cap no greater than
2 %, Council Member Daigle agreed to a cap of 2 %.
Council Member Henn addressed the issue of allowing rental of private docks and, if allowed,
suggested requiring that rental rates be based on those charged by small commercial marinas.
Council Member Rosansky noted that people are renting their docks anyway, indicated he would
favor considering the issue, and addressed possible scenarios for people who rent their residences.
City Manager Kiff noted that staff will propose that rental of private docks be allowed at the small
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commercial marina rate.
Council Member Henn recommended postponing the insurance issue until March 2013 in order to
have time to evaluate the issue and its feasibility. Council Member Hill addressed current charges
and wondered if the insurance issue has been a problem. City Manager Kiff noted that staff has
been making an effort to improve past practices which have not adequately protected the City and
its taxpayers. He stated the importance of addressing the requirement that the permittee have
insurance. Mayor Pro Tern Curry believed that the indemnification will not work and agreed with
Council Member Henn's suggestion to postpone the issue until no later than March 2013.
Regarding the issue of usable dock space, City Manager Kiff believed that, if there is the ability to
place a boat at the dock, the space should be included in the permit area. He clarified that staff
continues to propose calculating with the dock and the useable space around it.
Mayor Gardner suggested the possibility of getting an inspector on board to inspect existing docks.
Regarding the appeals process, it was concluded that staff will propose the proper process at a
future Council meeting.
Motion by Council Member Rosansky, seconded by Mayor Pro Tem Curry to adjourn the
Special Meeting to an Adjourned Special Meeting at 4:00 p.m. on December 11, 2012, in the new
Council Chambers located at 100 Civic Center Drive,
VI. ADJOURNMENT - 9.30 p.m.
The agenda for the Special Meeting was posted on November 21, 2012, at 3.45 p.m on the City
Hall Bulletin Board located outside of the City of Newport Beach Administration Building.
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