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HomeMy WebLinkAbout01 - MinutesOctober 14, 2014 Agenda Item No. 1 CITY OF NEWPORT BEACH City Council Minutes Study Session and Regular Meeting September 23, 2014 I. ROLL CALL - 5:00 p.m. Present: Council Member Gardner, Council Member Petros, Council Member Curry, Council Member Henn, Council Member Daigle (arrived at 5:31 p.m.), Mayor Pro Tern Selich, Mayor Hill II. CURRENT BUSINESS SS1. Clarification of Items on the Consent Calendar Council Member Petros referenced Item 5 (Newport Coast Community Center Stage Remodel Project — Completion and Acceptance of Contract No. 5540) and wanted to ensure that resolution with the contractor is wrapping up and that all the remedies are being undertaken. Public Works Director Webb noted that staff has assessed liquidated damages, addressed challenges with the contractor, and the matter has been concluded. Mayor Hill noted that Item 6 (San Miguel Park Restroom Building and Picnic Structure Replacement Project — Completion and Acceptance of Contract No. 5541) was completed under budget and ahead of schedule. SS2. Update on Major Park Projects — Marina Park and Sunset Ridge Park Public Works Director Webb provided a PowerPoint presentation to update Council on the two major park projects. Regarding Marina Park, he discussed the project's background, the site plan, details about the phases and milestones, and LEED Certification. Council Member Gardner reported that the Green Building Guideline Committee believed that limiting the building to a LEED certification was not necessarily the goal, but rather the important thing was to meet the standards. Public Works Director Webb addressed the phases and milestones, the Girl Scout Leadership Center, highlights of the project schedule, and the budget. Regarding Sunset Ridge Park, Public Works Director Webb addressed park amenities, before and after grading, storm drain and various utilities, restrooms and the children's play area, passive park features, the fields, view along Superior Avenue, the project schedule, and project cost. Council Member Henn noted that the cost does not include the money spent for acquiring the land. Brief discussion followed regarding the percentage of the contingency construction funds that were spent. Council Member Petros noted that all this information is on the City's website on a real time basis and commented positively on the City's ability to deliver on very significant projects. Council Member Henn commented on the strong financial position of the City, which enables the investment in public value and in the improvement of quality of life in the City. He commented on the benefits of using funds to pay for these projects rather than pre - paying the City's debt. Volume 62 - Page 56 City of Newport Beach Study Session and Regular Meeting September 23, 2014 Council Member Curry agreed with Council Member Henn and commented positively on the City's financial status. SS3. Pension Progress, Debt Service, Bond Ratings Finance Director Matusiewicz provide a PowerPoint presentation, addressing how City funds facilities projects would not be possible without issuing debt, reasonable debt as part of the City's history, how rating agencies view the City, and debt affordability. Council Member Petros commented on the City's increased revenues and requested clarification regarding how revenue is generated in the City. City Manager Kiff affirmed that revenue has increased and that it is not due to specific actions of the City in terms of a tax levy and listed projects that have served to increase revenue in the City. Council Member Petros noted that the economic health of the community and vitality of businesses have helped in increasing revenue for the City. Finance Director Matusiewicz reported that continued investment in the community has increased property values and that assessed property value is the number one source of revenue for the City. s �' Council Member Henn added that the City charges fees for services it provides, including fees for user - demand services, which are net neutral, and fees for services such as building plan checks, which are cost- based. He reported that, when fees increase, they are generally related to more activity. - Council Member Curry noted that, when the City adjusts fees, it is based on an analysis of costs and that, if fees are not adjusted periodically, all City taxpayers end up subsidizing some of the taxpayers in the City. Mayor Hill added that the City is on a rolling schedule to look at fees every three years. Finance Director Matusiewicz further addressed reasons for not retiring the Civic Center debt now. Council Member Curry noted that some residents are suggesting that the City sell assets to pay off debt. Finance Director Matusiewicz reported that financial advisors do not recommend paying debt off early. Council Member Curry noted that the City would sacrifice approximately $44 million if it were to do so. Finance Director Matusiewicz reported that the Civic Center project cost $126 million. Council Member Curry affirmed that the entire Civic Center cost was $126 million and that the City Hall building was $67 million. He indicated that the other costs were due to the Library extension, the parking garage, the Civic Green, grading, the Park, the training /emergency center, and the Community Room. He commented on the vision of certain Council candidates relative to the Civic Center project. Finance Director Matusiewicz continued with the presentation, noting that some people have added all future debt payments and have lumped that to equate to a debt of $232 million. He stated that this is more political than fact -based as it ignores the time value of money. He provided an example in terms of the disparity between future value and present value of money. Volume 62 - Page 57 City of Newport Beach Study Session and Regular Meeting September 23, 2014 City Manager Kiff discussed the City's focus on pensions, addressing the impact of investment losses, the unfunded pension liability trend, pension progress and costs and employee contributions then and now. In response to a question by Mayor Hill, Finance Director Matusiewicz reported that the $7.4 million of employee contributions is not included in the City's revenue base. In response to Council Member Daigle's question, Finance Director Matusiewicz explained why past employees did not pay into their pensions. City Manager Kiff continued detailing pension progress. He provided historical perspective regarding unfunded liabilities and the City's award from the Orange County Taxpayers Association for pension reform. Council Member Henn noted that amortization periods are well below the maximum allowable amortization periods. City Manager Kiff addressed other steps that can be taken by the City. Council Member Henn commented on the City's efforts at thoughtful outsourcing and commented on the City's obligations regarding retired City employees. City Manager Kiff added that employees are paying a share of the retired employees' obligations, which is making it challenging to obtain top employees. Council Member Curry noted that it is being suggested that the City sell revenue - producing assets and use those proceeds to pay off its debt, including pension obligation debt. He pointed out that this carries the risk of market performance causing the debt to reappear. In response to Council Member Gardner's question, City Manager Kiff addressed impractical and illegal issues regarding pensions and options for new hires. Council Member Daigle expressed concerns with PERS being an unreliable financial partner and asked about long -term strategies. City Manager Kiff reported that the City is not in anyone else's financial pool and that the City keeps informed as to its investment approach and who it is hiring as investors and actuaries. He addressed a discretionary payments option and stated that staff believes there is great value in keeping the community looking great which, in turn, helps keep community property values high. In response to Mayor Hill's request, Finance Director Matusiewicz addressed the makeup of the Finance Department and the quality of consultants. He added that the Finance Committee helps the City in developing higher level policies that guide actions moving forward. City Manager Mff added that Council has adopted a series of financial Policies that help the City in its actions moving forward. Council Member Henn commented on his experience in Finance and believed that anyone who claims that the spending in Newport Beach is out of control is wrong. He stressed that the City is in very sound financial condition and is very carefully managed in order to maintain its standing. Council Member Daigle emphasized that the City reinvests back into the community Volume 62 - Page 58 City of Newport Beach Study Session and Regular Meeting September 23, 2014 Mayor Hill pointed out that the City's property values increase without the need to raise taxes and noted that relieving City building fees for residential rehabilitation has generated $15 million in renovations within the City, which has employed individuals and created an increase in property and sales taxes. Jim Mosher referenced City Council Policy A -6, relative to placing items on agendas and on voting to allocate staff resources. He commented on the upcoming election and candidates questioning the City's financial condition. He believed that discussing this matter at this time is a campaign stunt and questioned whether this is a proper use of public funds. III. PUBLIC COMMENTS Jim Mosher commented positively on the archived Council Meeting videos on the internet. He also discussed Measure Y, the Irvine Company's entitlements at Newport Coast, and on the lack of a report regarding its status. He added that he is assuming that Measure Y is a lie and indicated he will vote against it. 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. IV. CLOSED SESSION — 6:14 p.m. A. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION (Government Code § 54956.9(d)(1)): 2 matters W lox Crystal Morales o. City of Newport Beach, et al. Orange County Superior Court Case No. 30- 2012 - 00606450 -CU -PO -CJC City of Newport Beach o. Lido Partners, et al. Orange County Superior Court Case No. 30- 2014 - 00715029 -CU -OR -CJC Council Member Henn recused himself from this item since he has a business relationship with a business in Via Lido Plaza. B. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Government Code § 54956.9(d)(2) and (e)(1)): 1 matter Mayor Hill recused himself from this item due to a business interest. C. CONFERENCE WITH LABOR NEGOTIATORS (Government Code § 54957.6) Agency Designated Representatives: Dave Kiff, City Manager and Terri Cassidy, Deputy City Manager; Negotiators Employee Organizations: All Labor Associations: Association of Newport Beach Ocean Lifeguards (ANBOL); Newport Beach City Employees Association (NBCEA); Newport Beach Employees League (NBEL); Newport Beach Firefighters Association (NBFA); Newport Beach Fire Management Association (NBFMA); Newport Beach Lifeguard Management Association (NBLMA); Newport Beach Police Association (NBPA); Newport Beach Police Management Association (NBPMA); Volume 62 - Page 59 City of Newport Beach Study Session and Regular Meeting September 23, 2014 Newport Beach Professional and Technical Association (NBPTEA); and Part -Time Employees Association of Newport Beach (PTEANB). V. RECESS VI. RECONVENED AT 7:00 P.M. FOR REGULAR MEETING VII. ROLL CALL Present: Council Member Gardner, Council Member Petros, Council Member Curry, Council Member Henn, Council Member Daigle, Mayor Pro Tern Selich, Mayor Hill VIII. CLOSED SESSION REPORT — Assistant City Attorney Torres reported that Mayor Hill recused himself from the second item under Item IV.A due to a business interest. IX. PLEDGE OF ALLEGIANCE — Council Member Curry X. INVOCATION — Melinda Blackman, Harbor Christian Church XI. PRESENTATIONS Presentation Regarding Surfboards on Parade Jeff Snow, Board Member of the Rotary Club of Huntington Beach and Founder of Surfboards on Parade, commented on the organization and provided a brief history of surfboarding in California. He introduced the Surfboards on Parade team and thanked the City for its goodwill, community spirit and support. Scott Smith provided information regarding the concept of Surfboards on Parade and the collaboration of art and surfing. Jodi McKay announced artist Michele Leal, the artist who designed the displayed surfboard. Additionally, she announced the upcoming "Night of a Million Waves Gala" on October 11, 2014, at the Waterfront Hilton Resort, where many surfboards will be auctioned as fundraising for Skin Cancer awareness. She encouraged residents to visit www.surfboardsonuarade.ore for additional information. Speaker with the Hoag Hospital Foundation reported that all proceeds from the event will benefit the Hoag Cancer Institute's new melanoma program. Roger's Gardens "2014 California Friendly Garden" Contest Winner Ron Vanderhoff, Vice President of Roger's Gardens, provided a PowerPoint presentation regarding the 2014 California Friendly Garden contest winner, Mia Alexis. He provided information regarding the contest, noting that the City is a stakeholder in it and addressed its goals. He presented photos of the Alexis Family's garden, commented on features that make the garden self - sustainable, and introduced the family. Mia Alexis commented on the inspiration for their garden, noting that they have created a mini eco- system. Newport Beach Public Library Foundation Check Presentation Library Services Director Hetherton introduced Toby Larson from the Newport Beach Public Library Foundation Board who presented a check to Mr. Hetherton for $224,000. Volume 62 - Page 60 City of Newport Beach Study Session and Regular Meeting September 23, 2014 Mayor Hill thanked the Foundation and acknowledged the work that it does in support of the Library XII. NOTICE TO THE PUBLIC 2UH. CITY COUNCIL ANNOUNCEMENTS OR MATTERS WHICH COUNCIL MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA (NON- DISCUSSION ITEM) Council Member Daigle displayed photos and reported on activity occurring along the Back Bay and Ford Road to make bicycling and walking safer for everyone. She also discussed the completed construction of a buffered bike lane, reported that others will be added, and addressed benefits, including separation of cyclists, walkers, and motorists. Additionally, she reported that a sign program will he considered for the area, as well as the possibility of installing a surface that will be comfortable for walkers and runners. She thanked Council Member Petros and staff for their work on this project. Council Member Henn reported positively on the 1st Annual Newport Beach Wine & Food Festival and commended the organizers for their work. He reported attending a meeting for Assessment Districts 111 and 116, and explained an innovative proposal by staff to move forward with an expanded assessment district that will result in the take -down of almost all of the utility poles on the Balboa Peninsula. Additionally, he reported attending the Civic Center Art in the Park Grand Opening, the Lido House Hotel lease signing, and the Central Newport Candidate Forum. He announced a meeting of the Balboa Village Advisory Committee (BVAC) on October 8, 2014, at ExplorOcean and invited residents to attend and express their views on the revitalization project. Council Member Curry reported attending the exhibition for the Art in the Park, as well as the 1st Annual Newport Beach Wine & Food Festival held at the Civic Center. He commented positively on the event and highlighted how the Civic Green has been used as a gathering place for the community and congratulated the organizers of the event. He commented positively on the Costa Mesa "Feet to the Fire" debate and invited the community to attend the Newport Beach "Feet to the Fire" debate on October 1, 2014, at the OASIS Senior Center. Council Member Gardner announced a meeting of the Environmental Quality Affairs Committee (EQAC) on September 30, 2014, at 6:30 p.m. in the Community Room where they will finalize their goals which will be presented to the City Council. Council Member Petros thanked Council Member Daigle for her leadership in the Back Bay issue. He reported attending the 2nd Annual Hootenanny in the Heights and commented positively on the event. He noted that residents of the Heights are very interested in pursuing an assessment district for undergrounding utilities in the area. Mayor Pro Tern Selich reported attending the Art in the Park Grand Opening hosted by the City Arts Commission and provided slides of some of the sculptures. He noted that this is a milestone for the arts in the City and commented positively on the event. Mayor Hill commented on his floating dock initiative which was turned over to the Harbor Commission for their evaluation. He noted that the Harbor Commission conducted a thorough evaluation of alternatives and issued a survey to the public, which came in that ten -to -one were opposed to trying a pilot project. He announced that the matter will be pulled from staff's agenda and no more time will be spent on it. He commented on the Civic Center Art Grand Opening and noted that the art is on loan to the City for free. Mayor Hill reported attending the OASIS Senior Resources Expo, the Taste of OASIS, and the OASIS Concert in the Courtyard. Additionally, he commented on the lease signing for the Lido House Hotel and noted that the entitlement process is not yet done as the matter must be considered by the Coastal Commission, which will be the last step. He encouraged public support so that the Coastal Commission knows how much residents are looking forward to the hotel. Volume 62 - Page 61 City of Newport Beach Study Session and Regular Meeting September 23, 2014 XIV. PUBLIC COMMENTS ON CONSENT CALENDAR Council Member Curry noted the completion of the Newport Coast Community Center stage remodeling and the San Miguel Park restroom. XV. CONSENT CALENDAR A. READING OF MINUTES AND ORDINANCES 1. Minutes for the September 9, 2014 Study Session and Regular Meeting [100 -20141 Waive reading of subject minutes, approve as amended, and order filed. 2. Reading of Ordinances Waive reading in full of all ordinances under consideration, and direct the City Clerk to read by title only. B. ORDINANCES FOR ADOPTION 3. Adoption of Ordinance No. 2014 -15 Relating to Prevailing Wage Law for Locally - Funded Public Works Projects [100 -20141 Conduct second reading and adopt Ordinance No. 2014 -15, An Ordinance of the City Council of the City of Newport Beach, California, Repealing Resolution No. 2013 -6 and Expressing Intent to Comply with California Senate Bill No. 7 Relating to Prevailing Wage Law for Locally - Funded Public Works Projects. 4. Adoption of Ordinance No. 2014 -16 Approving Zoning Code Amendment No. CA 2014- 003 for the Former City Hall Site and Lido House Hotel [731100-20141 Conduct second reading and adopt Ordinance No. 2014 -16, An Ordinance of the City Council of the City of Newport Beach Approving Zoning Code Amendment No. CA2012 -003 for the Former City Hall Complex Land Use and Zoning Amendments Located at 3300 Newport Boulevard and 473 32nd Street (PA2012 -031). Council Member Henn recused himself from this item due to a business interest with an adjoining property owner. C. CONTRACTS AND AGREEMENTS 5. Newport Coast Community Center Stage Remodel Project - Completion and Acceptance of Contract No. 5540 (CAP14 -0002) [381100 -20141 a) Accept the completed work and authorize the City Clerk to file a Notice of Completion for the project; b) Authorize the City Clerk to release the Labor and Materials Bond 65 days after the Notice of Completion has been recorded in accordance with applicable portions of the Civil Code; and c) Release the Faithful Performance Bond one year after this Council acceptance. 6. San Miguel Park Restroom Building and Picnic Structure Replacement Project - Completion and Acceptance of Contract No. 5541 (CAP14 -0005) [381100 -20141 a) Accept the completed work and authorize the City Clerk to file a Notice of Completion for the project; b) Authorize the City Clerk to release the Labor and Materials Bond 65 days after the Notice of Completion has been recorded in accordance with applicable portions of the Civil Code; and c) Release the Faithful Performance Bond one year after this Council acceptance. Volume 62 - Page 62 City of Newport Beach Study Session and Regular Meeting September 23, 2014 2014 -2015 Annual Sidewalk Curb & Gutter Replacement Project — Award of Contract No. 5884 (CAP15 -0012) [381100 -20141 a) Approve the project drawings and specifications; b) Award Contract No. 5884 to Grigolla & Sons Construction Company, Inc. for the Total Bid Price of $647,300.00, and authorize the Mayor and the City Clerk to execute the contract; c) Establish an amount of $65,000.00 (10 %) to cover the cost of unforeseen work not included in the original contract; and d) Approve Budget Amendment No. 14BA -015 appropriating $218,300.00 from unappropriated Gas Tax balance to Account No. 7181- C2001009 (Sidewalk, Curb and Gutter Replacement). Council Member Gardner recused herself from this item because she may live within 500 -feet of where the project may be making improvements. 8. Balboa Village Fine Arts Center Conceptual Design (Balboa Village Theatre) — Approval of Professional Services Agreement with Robert R. Coffee Architects + Associates (C -5937) [381100 -20141 a) Find that the transition of the Balboa Theater to a Balboa Village Fine Arts Center reflects the wishes of the Council at least to the extent that further design work, a program pro forma and cost estimation should be completed; and b) Approve a Professional Services Agreement (PSA) with Robert R. Coffee Architects + Associates of Newport Beach, California, for the Balboa Village Fine Arts Center Conceptual Design at a not -to- exceed price of $8,500, and authorize the Public Works Director to execute the Agreement. D. MISCELLANEOUS i .m 9. Planning Commission Agenda for the September 18, 2014 Meeting [100 -20141 Receive and file. 10. Budget Amendment to Accept a Check from the Newport Beach Public Library Foundation and Appropriate Funds to the Library's Fiscal Year 2014/2015 Maintenance and Operation Budget 1100 -20141 Approve Budget Amendment No 15BA -012 to increase revenue estimates by $224,000 in Account 4090 -5893 (Library Foundation) and to increase expenditure estimates by the same amount in Division 4090 (Library Foundation) and Division 4060 (Literacy Services). 11. Budget Amendment to Accept a Check from California State Library for Literacy Services (CLLS) in the Amount of $15,000 and Appropriate Funds to the Library's Fiscal Year 2014/2015 Maintenance and Operation Budget [100 -20141 Approve Budget Amendment No. 15BA -013 to increase revenue estimates by $15,000 in account 4010 -4832 (California Literacy Campaign) and to increase expenditure estimates by the same amount in Division 4060 (Literacy Services). 12. Film Permit Fees Suspension for Six Months [100-20141 Replace this item with "Film Permit Fees Suspension" at the October 14, 2014, City Council meeting. 13. Acceptance and Recommended Placement of Shogun Statue from City of Okazaki [100- 20141 The City Arts Commission recommends that the City Council accept a statue as a gift from Newport Beach Sister City Okazaki Japan, including its interim placement in the Bamboo Terrace at the Central Library and permanent installation at Irvine Terrace Park. Volume 62 - Page 63 City of Newport Beach Study Session and Regular Meeting September 23, 2014 14. Direction to Staff on Program /Facility Naming for NB Lifeguard Ben Carlson, Review of Laws Relating to 30 -Day or Less Vacation Stays (100 -2014] Direct staff to: a) Ask Mr. Ben Carlson's family, the Ben Carlson Foundation, and the Newport Beach Fire Department to review and recommend opportunities to name a program or facility in honor of Mr. Carlson; and b) Ask the City Manager's office and City Attorney's office to review laws and regulations relating to vacation stays that are more than seven but less than 30 days in duration. Motion by Mayor Pro Tern Selich, seconded by Council Member Curry, to approve the Consent Calendar; noting the recusal by Council Member Henn on Item 4 and the recusal by Council Member Gardner on Item 7. The motion carried by the following roll call vote: Ayes: Council Member Gardner, Council Member Petros, Council Member Curry, Council Member Henn, Council Member Daigle, Mayor Pro Tem Selich, Mayor Hill XVI. ITEMS REMOVED FROM THE CONSENT CALENDAR - None XVII. PUBLIC COMMENTS ON NON- AGENDA ITEMS Charles Griffin commented on his experience in the aviation industry, GPS, and flight paths from John Wayne Airport (JWA). He suggested flight patterns where bird sanctuaries and homes in the area will not be disturbed. He provided a handout illustrating his suggestion. Following Council Member Gardner's comment relative to the sharp turn required by aircrafts to take off, Mr. Griffin explained how the turn can be accomplished. Steve Rosansky, President of the Newport Beach Chamber of Commerce, read a letter regarding a matter that was considered at a recent Chamber Board meeting regarding Proposition 13. The letter indicated that the Board discussed efforts by various State officials to amend or repeal provisions of Proposition 13 and create a split -tax role in the State. The Board passed a resolution urging the Newport Beach City Council to oppose any changes to Proposition 13 that would allow for the treatment of commercial properties different from residential properties. He announced several upcoming events including the Fire and Lifeguard Appreciation BBQ at Newport Dunes on September 24, 2014, the Corona del Mar Sandcastle contest on October 5, 2014, and the Chamber's 2015 Economic Forecast on October 22, 2014, at the Marriott Hotel. Council Member Curry noted that the split -roll would result in the loss of 340,000 jobs and would be devastating to California businesses. He noted that Council took action to support the current status quo in January and that Newport Beach is on record as opposing the change. Jim Mosher commented on trust, integrity, and Measure Y. He believed that there is misinformation regarding Measure Y and commented on The Irvine Company's report that it had no intention of building any additional hotel rooms in Newport Coast. He commented on the removal of homes in Newport Ridge and future car trips. He noted that there is no mention of this in the ballot measure. He reported on recent interaction regarding Measure Y with the City Attorney and expressed concerns with the refusal of City government to answer his question about the content of its own work. City Attorney Harp noted that the materials had previously been provided to Mr. Mosher by the City Clerk's Office, but he was repeatedly requesting the same material. Justin Cox congratulated Council Members Daigle and Petros for their efforts along the Back Bay and bike paths. He commented on a recent Coastal Clean -up Day, distributed maps, and commented on Volume 62 - Page 64 City of Newport Beach Study Session and Regular Meeting September 23, 2014 support received from the community regarding the Upper Newport Bay area. He thanked City staff and also discussed efforts to restore that area. He commented on the Coastal Commission being a key player in those efforts and encouraged public and City support. Doug Swardstrom, Friends of the Fire Rings, urged Council to allow people to have the choice to burn wood or charcoal. He commented on a CDP submitted by staff, believing that it is lacking and referenced an upcoming hearing in October. He asked whether staff will have it completed in time for the Coastal Commission to consider. Additionally, he referenced a citizen survey inquiring about fire rings and wondered whether the results are open to the public and if so, when access will be available. Nancy Skinner offered testimony regarding recent discussions with residents regarding Measure Y, noting there seems to be confusion as to what a "yes" or "no" vote means. She added that it is not clear what citizens will be voting on, believing that a "yes" vote would result in a lot of new development in Fashion Island and Newport Center. Council Member Petros addressed comments that have been said about him recently relative to his views regarding Measure Y and reported that when he attempted to speak the truth about Measure Y, he was hissed at. He suggested that everyone take pause and stick to the issue. He invited the public to speak with him about the matter and continue the conversation about the issues rather than engage in personal attacks. Paul Blank, Harbor Commissioner, reported that the Commission has an objective relative to public outreach and, to support that objective, the Harbor Commission will be holding a Special Meeting on Saturday, November 15, 2014 at 8:30 a.m. to tour the Harbor. He indicated that they will be meeting at the Harbor Patrol Visitor Dock, and encouraged Council and the public to attend. Rita Goldberg indicated that voting "yes" on Measure Y would allocate a percentage of the development fees to fund the arts in Newport Beach. She reported that the City Arts Commission has been working with Arts OC to develop a blueprint for a master plan for arts in the City. She stated that she welcomes the opportunity to provide the type of housing being proposed at Newport Center. She added that she is not confused about Measure Y and believed that voting "yes" would bring enhancement to the City. XVIII. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES Council Member Daigle thanked Mr. Cox for his positive comments regarding the Upper Bay and Mr. Griffin for his creative ideas about the turning of aircrafts. She commended the commitment residents have in reducing concerns at John Wayne Airport (JWA). She reported that, on September 30, 2014, the Board of Supervisors will be considering an amended Settlement Agreement in which the curfew will remain in effect and consider certifying the Environmental Impact Report (EIR). Council Member Henn provided an update of recent meetings of the Balboa Village Advisory Committee (BVAC) and the Tidelands Management Committee, and reported on matters considered at each. Mayor Pro Tern Selich reported that the General Plan/Local Coastal Program Implementation Committee meeting for September has been cancelled and the next scheduled meeting will be held on October 29, 2014. XIX. PUBLIC HEARINGS 15. An Amendment to the Zoning Code Regulations Regarding A -Frame Signs [100 -20141 No action required. Volume 62 - Page 65 City of Newport Beach Study Session and Regular Meeting September 23, 2014 16. Appeal of Conditional Use Permit Regarding Alcohol Service at the Port Theater Located at 2905 East Coast Highway (PA2014 -019) [100 -2014] Community Development Director Brandt introduced the item, reported that the matter was initiated by Council Member Gardner, and deferred to her for further information. Council Member Gardner reported that there were two aspects of the application, including extending liquor service to the main floor. She indicated that her concern is relative to why a movie house would like to serve alcohol until 1:00 a.m., particularly in an area that is already impacted by traffic. Jessica Prause, representing the Port Theater, reported receiving a number of letters in support of the proposal from the community, which were forwarded to the City. She commented on the theater's continued commitment to the community and addressed the benefits of granting their application. Mayor Hill commented on the operator's license and, in response to his question, Community Development Director Brandt reported that the operator's license would need to be amended with whatever conditions or changes in operation Council adopts, if any. She clarified that the operator's license gives the Police Chief authority to amend the conditions of the operator's license as a result of any issues that may arise. In response to Council Member's Henn question, Community Development Director Brandt reported that the Police Department has recommended approval of the application in regards to the extended hours of operation for alcohol service and the mixed age groups where alcohol is being served only in conjunction with movie showings. In terms of other types of events, the original hours of operation and alcohol service would remain in place. Regarding concentration of alcohol- serving establishments in the Corona del Mar area, Assistant Planner Nova reported that other establishments were evaluated with the Police Departments recommendation. Newport Beach Police Department Detective Thalia confirmed that the area is over - concentrated with alcohol- serving establishments, but indicated that almost every reporting district is over - concentrated. He noted that there is one ABC license for every 229 residents in the district, but the Orange County average is one for every 420 residents and the State average is one for every 836 residents. He added that the Balboa Peninsula is one ABC license for every 43 residents. Detective Thalia reported meeting with Ms. Prause and they worked with them on their application and made recommendations to their proposal. Council Member Petros clarified that, when the theater is operating as a movie house, the extended hours would go into effect. If they had another type of event, this would not apply. Community Development Director Brandt added that the hours of operation are related to alcohol service. She addressed the types of ways the theater is used, adding that each is looked at differently with respect to hours of operation and the ability to serve alcoholic beverages. Council Member Petros noted that, in reviewing the theater's calendar, the last showing for movies is 8:00 p.m. and asked whether the theater plans on having showings after that. Ms. Prause responded affirmatively and added that, when new movies are released, the theater makes 60% of its revenue during the first week. In order to be competitive with Fashion Island theaters, it needs to offer later night showings. In response to Council Member Gardner's question, Community Development Director Brandt reported that alcohol service concludes when the last movie is over. Assistant Planner Nova reported this was discussed in the Planning Commission hearing where Condition No. 11 was added. Volume 62 - Page 66 City of Newport Beach Study Session and Regular Meeting September 23, 2014 Mayor Hill opened the public hearing. Richard Nichols expressed concern that the theater does not have much parking. He asserted that most bars are closed before 1:00 a.m. in Corona del Mar and suggested having the upstairs and downstairs operating at the same time under the current rules to see if this causes a problem, and then adjust the hours if needed. Gary Sauter thanked Council Member Gardner for appealing this item and noted that the difference with the Islands Theater is that it is not located near residential areas. He expressed his opposition to the item and believed that the area is heavily impacted already. Jim Mosher questioned the need for alcohol sales as part of the movie experience, commented on the applicant's position that alcohol sales are necessary in order for them to compete, noted that the Port Theater is directly adjacent to residential areas, indicated that the Islands Theater has an alcohol license restricted to beer and wine while the Port Theater wants to have a full liquor license and operate as a bar. He believed that this is an important distinction that Council needs to understand. Chris Beaufort commented on segments of the day when residents must deal with the daily operations of nearby businesses, but indicated that the hours between 11:00 p.m. and 7:00 a.m. should be for the residents. While he supports businesses, he indicated that he believes there needs to be give and take between businesses and residents., W Dawn Stone expressed concerns regarding noise, noting that it is directly related to alcohol later in the evening. She addressed the lack of parking in the area and asked that Council consider residents when making its decision. Carol Ann Rohr urged Council to keep the existing hours of operation for the Port Theater, adding that there is no reason to extend the hours and noting the lack of parking. She stated that there is no financial hardship, the owner has multiple businesses, and changing the hours of operation and alcohol service will not have an effect on his business recovery or financial situation. She added that the Port Theater is not family -owned or a small business and that selling alcohol until 1:00 a.m. will not help the community. Ali Hosseinzadeh, owner of the Port Restaurant, expressed support for the Port Theater, but believed that their request needs to be given careful consideration. He expressed concern with the lack of parking and believed that the Corona del Mar parking matter needs to be considered before granting this application. Hearing no further testimony, Mayor Hill closed the public hearing. Council Member Gardner believed that the 1:00 a.m. request is inappropriate. She noted that this is a residential area and not similar to the theaters in Newport Center. She added that, if the theater wants to have a 10:00 p.m. showing, they would still have an hour to serve alcohol and believed that consideration should be given to the residents in the area. Motion by Council Member Gardner, seconded by Council Member Petros, to adopt amended Resolution No. 2014 -85, A Resolution of the City Council of the City of Newport Beach Upholding the Planning Commission's Approval of Conditional Use Permit No. UP2014 -030 Superseding Minor Use Permit No. UP2012 -009 to Operate the Port Theater (A Landmark Theater) in Conjunction with a Type 47 (On -Sale General) Alcoholic License Located at 2905 East Coast Highway (PA2014- 019), finding the project exempt from the California Environmental Quality Act ( "CEQA ") pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines, and approving Conditional Use Permit No. UP2014 -030, subject to the conditions, but not change the hours of operation from 11:00 p.m. to 1:00 a.m. Volume 62 - Page 67 City of Newport Beach Study Session and Regular Meeting September 23, 2014 Substitute motion by Council Member Curry, seconded by Mayor Pro Tem Selich, to adopt Resolution No. 2014 -85, A Resolution of the City Council of the City of Newport Beach Upholding the Planning Commission's Approval of Conditional Use Permit No. UP2014 -030 Superseding Minor Use Permit No. UP2012 -009 to Operate the Port Theater (A Landmark Theater) in Conjunction with a Type 47 (On -Sale General) Alcoholic License Located at 2905 East Coast Highway (PA2014 -019), finding the project exempt from the California Environmental Quality Act ( "CEQA ") pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines, and approving Conditional Use Permit No. UP2014 -030, subject to the conditions. Council Member Curry commented on the property's prior conditions and how the new owner revitalized it into a community asset. He noted that the Theater has operated with minimal impact to the neighborhood and stated that, if the City is truly pro- business, business must be given the tools that they need to survive and thrive. He added that Council needs to recognize the improvement to the community due to the Port Theater and that the operator has proven himself. Council Member Gardner noted that the General Plan indicates that residents should come first and, while she supports businesses, it should not be at the expense of residents. Mayor Pro Tom Selich agreed with Council Member Curry's comments. He commented on the development of the landmark building Ordinance to preserve the Port Theater and believed that Council should make an exception because of the efforts made to restore it. He commented on the operator's license and the Conditions of Approval, and noted that the City has the ability to take corrective action in cases of non - compliance. Mayor Hill commented on the enforcement tool and safeguards provided by the operator's license. Council Member Petros addressed prior discussions regarding the Corona del Mar parking plan and noted that parking impacts around the subject area are unknown. He suggested that approving this application may be premature. He commented on the Conditions of Approval relative to service limitations and asked regarding the City's prior experience with operators' licenses where there has been a bad operator. Detective Thulin reported that the City has not had to take any action against an operator, but not every restaurant or bar has an operator's license since it is a new concept and many establishments have been grandfathered in. He indicated that they would be subject to an operator's license if the restaurant or bar would be making substantial changes. He added that benefits of an operator license is that it gives the Police Department discretion and some level of control for the operation of an establishment and a good working relationship between the Police Department and the operator. Council Member Daigle stated she will support the substitute motion since the Police Department has recommended approval. Council Member Henn noted that this is a difficult situation, but agreed that the parking problem in Corona del Mar needs to be resolved apart from this issue. He emphasized that he would be adamantly against this type of approval for other events at the Theater besides movie showings. He believed that the issue of drinking is a moderate issue in relation to a movie theater since it will have minimal impacts. Weighing that against revitalization benefits, he stated that he will be supporting the substitute motion. City Attorney Harp clarified the substitute motion Volume 62 - Page 68 City of Newport Beach Study Session and Regular Meeting September 23, 2014 Mf The substitute motion carried by the following roll call vote: Ayes: Council Member Petros, Council Member Curry, Council Member Henn, Council Member Daigle, Mayor Pro Tern Selich, Mayor Hill Noes: Council Member Gardner 17. Orange County Grand Jury Pension Report Responses [100-20141 City Manager Kiff briefly explained the request to submit a response to the Orange County Grand Jury report relative to pensions and pension transparency. Motion by Council Member Gardner, seconded by Mayor Pro Tem Selich, to authorize the City Manager's issuance of the response attached to the staff report to the Grand Jury regarding pensions and pension transparency. The motion carried by the following roll call vote: Ayes: Council Member Gardner, Council Member Petros, Council Member Curry, Council Member Henn, Council Member Daigle, Mayor Pro Tern Selich, Mayor Hill XXI. MOTION FOR RECONSIDERATION - None XXII. ADJOURNMENT - 9:01 p.m. The agenda for the Study Session, Closed Session, and Regular Meeting 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 September 18, 2014, at 4:00 p.m. City Clerk �'.. Recording Secretary Mayor Volume 62 - Page 69