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HomeMy WebLinkAbout01 - 5-24-99June 14, 1999 Agenda Item No. • CITY OF NEWPORT BEACH City Council Minutes D�/"►� Study Session May 24, 1999 - 4:00 p.m INDEX ROLL CALL Present: Adams, Glover, Thomson, Debay, Ridgeway, Noyes, Mayor O'Neil Absent: None CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. Regarding Agenda Item 22, Addition of Two Leased Electric Vehicles, Mayor Pro Tem Thomson noted that the vehicles are Toyotas, not Hondas. City Manager Bludau informed Council that Agenda Items 6 and 7, Adoption of the Fire and Building Codes, will be pulled during the regular meeting. 2. REVIEW OF AUTOMOBILE SALES TAX INCENTIVE PROGRAM AND REQUESTS FOR ASSISTANCE FROM JAGUAR (SOUTH COAST MOTORCARS) AND STERLING BMW. • Mayor O'Neil announced that he has a conflict of interest since his firm represents Mr. Belanger of Sterling BMW and Ford Motorland on another matter. He excused himself from the Chambers and requested that Mayor Pro Tem Thomson conduct this portion of the meeting. Assistant City Manager Wood reported that the City received a request for assistance from Sterling Motors in 1996, after they obtained a franchise for a Land Rover dealership, planned to move the existing BMW dealership onto the current Coast Highway site, and planned to expand the site. Due to the expense of the project and the projected benefit for the City, Sterling Motors requested that the City reimburse 50% of their incremental sales tax back to them. She indicated that Resolution No. 96 -88, establishing the Automobile Sales Tax Incentive Program, was then adopted. Ms. Wood indicated that she believed that the reasons the City did the program and why it is an important part of the economic development program are because new car sales are a significant generator of sales tax revenue. She noted that many of the individual dealerships are one of the City's top 10 sales tax generators. Additionally, feasibility studies have shown that these dealerships cannot establish feasibly in the City without some kind of public assistance because of the price of land. Ms. Wood stated that the current program is fairly general and allows each case to be analyzed on its own merits. She noted that the resolution provides that the City can grant assistance in the economic feasibility of a project; provides that the assistance be provided only from incremental sales tax that the City would receive from the business; and requires a long -term commitment to the community from the business. Volume 52 - Page 476 Automotive Sales Tax Incentive Program/Request for Assistance from Jaguar (South Coast Motorcars)/ Sterling BMW (40) City of Newport Beach City Council Minutes May 24, 1999 INDEX Ms. Wood reported that, after the program was established, the City • conducted many discussions with Sterling Motors and almost brought an agreement to Council. However, in 1998, Sterling Motors sold Land Rover, so each dealership needed to reapply on its own. Using the provisions of the resolution, staff did not see that those findings could be made and the agreements were not brought forward. Ms. Wood reported that the City has a new request from Jaguar and that Sterling BMW reinitiated their request. She stated that Sterling BMW is making the same request to receive 50% of the incremental sales tax for a period of 5 years for the expansion. She indicated that Jaguar is starting a new concept for selling cars by establishing a satellite dealership in Corona del Mar. In addition to receiving 50% of the incremental sales tax for a period of 5 years, Jaguar is also requesting $600,000 in cash up front. Ms. Wood stated that staff believes that, should Council indicate a willingness to provide assistance to either or both of the dealerships, Land Rover would return to the City and reinitiate their request. Council Member Glover stated that her recollection of this when she was on the Economic Development Committee (EDC) was that this was put together because a program was done with Fletcher Jones; and that it was felt that it was unfair to not provide this to the other dealerships. She indicated that Lee West of Jaguar was unable to continue with his business and it went back to a bank that was out of country. It took 2% to 3 years of trying to put together a deal with the bank to put a dealership back in that location. She stated that Jaguar would not put another dealership in a place that had failed, so EDC wanted to get Land Rover back since it was a part of the Jaguar dealership and since their sales were doing well. Council Member Glover stated that the Jaguar building, although nice, was almost overbuilt and had heavy overhead costs. She expressed the opinion that EDC encouraged Sterling BMW; that she believed some promises were made to Sterling BMW; and that EDC tried to work with Sterling BMW to move into the former Jaguar building and get Land Rover back into the City. Council Member Glover believed that this is characterized as being driven by Sterling BMW when it was really driven by the Fletcher Jones deal and the idea at the time that, due to revenue problems, they wanted to keep certain dealerships in the City. Council Member Glover stated that she and Ms. Wood met with the owner of Sterling BMW on two occasions and that she and the Mayor also met with him. She indicated that he stated that his base for fiscal year 1995 -96 was $187,000 and is asking to receive 50% of the incremental sales tax over that base. Council Member Glover pointed out that, at one time, the City was talking about helping him on some of the conversions he needed in his maintenance department. She expressed the opinion that, considering past conversations, this is probably a fairly reasonable request and that the better his business does, the better the City does too. Council Member Glover emphasized that the City needs to put constant pressure on any of the dealerships the City works with to move all of their leasing point of sales back into Newport Beach, otherwise the City is losing revenue. She expressed the opinion that the program should be rescinded Volume 52 - Page 477 City of Newport Beach City Council Minutes May 24, 1999 after Council deals with the current requests. Council Member Debay agreed with Council Member Glover's comment on the point of sales for leases. She expressed concern with providing cash up front and stated that she does not agree with doing that. She questioned if the earnings are a projection and asked what would happen if these dealerships start making profits immediately after development. Council Member Debay stated that it is important to keep the dealerships in the City; however, emphasized that specific criteria need to be made so that the dealerships do not go to different Council members to try to lobby support. Council Member Glover took issue with the statement and noted that Sterling BMW is in her district. Council Member Debay clarified that all Council members receive calls on different issues. Council Member Debay asked what promises were made and wanted to know if Council may be going against what a previous Council assured. Ms. Wood indicated that she was not with the City for the earlier history described, but was aware that EDC worked hard to bring Land Rover back into the City. Further, she is not personally aware of any promises but indicated to Mr. Balenger at a meeting that it was her opinion that Council would provide some level of assistance but was unsure of how much. Council Member Ridgeway stated that, under Section LEA of Resolution No. 96 -88, it appears that this addresses a capital improvement cost only in the case in which assistance is needed to make it feasible. He expressed . concern there is no definition for "project feasibility" and that this seems to be a way of having the City subsidize a landowner for overpricing property. In response to Council Member Adams' questions, Ms. Wood indicated that the dealerships' tax increment amounts for fiscal year 1998 -99 are confidential to the public but provided Council Member Adams with the information. Ms. Wood stated that she has never seen any documentation indicating the promises that were made to Sterling BMW. In response to Mayor Pro Tem Thomson's question regarding Jaguar's $600,000 request, Ms. Wood stated that this is their request with very little staff analysis and no negotiation. Dan Rogers, 245 Magnolia, No. 5, stated that he represents the Ford Leasing Development Company who is the real estate arm of Ford Motor Company, owners of Jaguar. He discussed their search for a new location and indicated that they finally found a location at the old Union Station site to hopefully be able to put in a "satellite boutique" dealership. Ford Leasing Development Company made a tentative deal with an option to purchase the property in the future. They initially believed they could fund the entire project out of the Jaguar budget. However, the budget was $600,000 short and the alternative left was to come to the City for assistance. He stated that the company believes they can sell enough cars to pay the City back its $600,000 in 3 to 4 years. He explained that the money needs to be up front because they were told by the Jaguar franchise that they will not have a project unless Ford provides them with $600,000 up front. Volume 52 - Page 478 INI97o/:1 City of Newport Beach City Council Minutes May 24, 1999 INDEX Council Member Ridgeway asked if "up front" means he wants an agreement • prior to proceeding with the conditional use permit. Mr. Rogers believed that Jaguar is saying they want $600,000 in order to pay for the construction of the facility. He stated that a larger request was made to Mission Viejo and they agreed to give them the money, plus a larger sum over the years once the $600,000 is paid back. He stated that Jaguar used this as the model for this request. Council Member Ridgeway stated that he is struggling with the City providing up front money and with getting a cash reimbursement over a period of time. Noting that this is to be a satellite boutique dealership out of Newport Beach, Council Member Debay asked how the City could be assured that the City's sales tax revenue will not go back to the main dealership. Mr. Rogers stated that the people running the dealership told him that the sales tax revenue will absolutely be awarded at point of origin. He emphasized that Jaguar is trying to downgrade leasing and promote the sale of vehicles. Council Member Ridgeway asked what it would take to have Jaguar go back to the table and negotiate a fair and reasonable lease, believing that the owner is basically asking the City to subsidize the values. Mr. Rogers stated that they would be back at "square one" if the City denies the request and that the option on the property expires June 4. In response to Council Member Glovers questions, Mr. Rogers stated that the facility is only 6,000 square feet and that the main warehouse would be in Mission Viejo. Further, he believed that inventory would be based on a • combination of the inventory in Newport Beach and the inventory at the warehouse. He stated that he was told that each inventory would be allocated separately but would be considered one dealership (South Coast Motor Cars) and that all sales that are generated in the City will be credited to the City. Regarding Jaguar sales in the 1980'x, Mr. Rogers believed that the new dealership would sell about $200 million annually and that, since Ford bought Jaguar, many of the previous inventory problems are gone. Regarding Sterling BMW, Council Member Adams indicated that he is not supportive of looking at the request retroactively. He stated that the program is an incentive program and noted that Council Member Ridgeway pointed out that they need to show a need. Council Member Adams believed that, since they have an established dealership, this is evidence that they do not have a need. Further, in looking at the figures, he expressed the opinion that the request is almost ridiculous compared to their cash flow. Regarding Jaguar, Council Member Adams stated he would not be in favor of providing money up front under any condition. He believed there should be investors in Newport Beach that can provide the $600,000 since the City is not in the business of loaning money to businesses despite the fact that it would be an attractive land use, has an interesting concept, and can be positive for the City. He expressed the opinion that this is out of the City's scope. He believed they have shown need under the Council policy for a reduction of sales tax and stated that he would be willing to consider a request from them about that. Council Member Adams stated that they . should establish their dealership in Mission Viejo and come back to the City after they have funding and cash flow. Volume 52 - Page 479 0 City of Newport Beach City Council Minutes May 24, 1999 Mayor Pro Tem Thomson stated that the City does want to encourage business, but agreed with Council Member Adams that this seems a bit excessive. He expressed concern with the concept that the project cannot work unless they have $600,000. Further, receiving the reimbursement of sales tax ahead of time is a situation that can be dealt with in the future. Council Member Glover believed that there will be no support for her motion to help Sterling BMW and expressed the opinion that the resolution is ill- defined. In response to Council Member Glover's question, Council Member Adams clarified that the request is a relatively small amount compared to the moneys used to operate the dealership. In response to Council questions, City Attorney Burnham stated that Resolution No. 96 -88 can be rescinded by adopting a resolution that rescinds it. This can be done at the next meeting. Noting that the resolution has merit, Council Member Rideewav moved to send the resolution back to EDC, EQAC, and any other committee for review and bring back a report to Council. Council Member Adams asked Council Member Ridgeway if his motion included not approving both Land Rover and BMW; and up to the 50% of the incremental sales tax for Jaguar. Council Member Ridgeway stated that he would be happy to amend his motion to that effect since the program was meant to be an incentive program. He noted that there may be a circumstance in which the City may want to do some type of tax -free based program to a car dealer. Prior to that, the dealers have to come to the table with a negotiated transaction and a lack of feasibility based on a fair market value of the property. He commended Ford and Mr. Rogers for being forthright with their numbers. Council Member Adams stated that he supports reviewing the policy; is not supportive of doing anything retroactively for BMW or Land Rover; and is supportive of doing anything possible for Jaguar that comes within the framework of the current policy. Council Member Ridgeway stated that he agrees, but would rather first send this to the committees who have a better ability to review it. Mayor Pro Tem Thomson expressed the opinion that one way of reaching the goal would be to rescind the resolution and start from scratch through the committee system. Council Member Debay stated that the basics for the program are in the resolution. However, staff needs to be involved with EDC and the subcommittees and refine the points that Council is concerned with so that there is consistency. She indicated that the City may be able to waive the development permit fee for Jaguar. Council Member Noyes expressed the opinion that a resolution that favors automobile dealerships over common retailers is not fair or productive. He stated that many cities are getting away from doing this and believed that the resolution should be rescinded since this has only been used for Fletcher Jones. He stated that he would be in favor of rescinding the resolution and Volume 52 - Page 480 INDEX City of Newport Beach City Council Minutes May 24, 1999 INDEX possibly vote on the two specific cases. Council Member Adams stated that . Fletcher Jones is a different case since they had an established business in the City that was generating a lot of sales tax revenue and threatened to leave the City. He noted that the City was prepared to assist BMW but they apparently did not need the assistance. Regarding Jaguar, Council Member Adams questioned how the City could save a business that left a long time ago. Council Member Glover stated that she will not support the motion because the policy itself and the resolution is bad. Further, she believed that the City will not be able to be fair if it keeps the resolution. Motion by Council Member Ridgeway to deny the request from Sterling BMW. The motion carried by the following vote: Ayes: Adams, Thomson, Debay, Ridgeway, Noyes Noes: Glover Absent: None Abstain: O'Neil Regarding Jaguar, Mayor Pro Tem Thomson believed that the request is mute since they are requesting up front money, Council is not willing to provide up front money, and Jaguar indicates that the whole project would not work without that money. • The motion to send the resolution back to EDC, EQAC, and any other committee for review and bring back a report to Council carried by the following vote: Ayes: Adams, Thomson, Debay, Ridgeway Noes: Glover and Noyes Absent: None Abstain: O'Neil 3. REVIEW OF 1999 -2000 BUDGET. 1999 -2000 Budget (40) Administrative Services Director Danner distributed a pie -chart that shows City revenues (page 14 of the budget). He reported that property taxes make up 20 %; sales and other taxes make up 24 %; licenses and permits make up 3 %; intergovernmental revenue make up 14 %; charges for services make up 7 %; fines, forfeitures, and penalties make up 2 %; use of money and property make up 9 %; other revenues make up 1 %; internal service fund revenues make up 9 %; and enterprise fund revenues make up 16 %. Further, there are 231 revenue accounts in the General Fund and 350 revenue accounts Citywide. Mr. Danner noted license and permit information comes from the departments; intergovernmental revenue information is supplied by other agencies; charges from current services come from the departments; use of money and property information is primarily compiled by the Administrative Services Department with help from the Fire and Marine Department for • tideland properties; and other revenue information generally comes from historical trends. Volume 52 - Page 481 • City of Newport Beach City Council Minutes May 24, 1999 INDEX Mr. Danner used information provided by the Policy Institute of California to compare how supplied revenues to cities by outside sources were used in 1978 versus 1995: 1978 1995 supplied by Federal Government 22.5°% 22.3% supplied by State 41.6°% 54.9°% supplied by County 8.3% 5% supplied by own city 11°% 9.2% Mr. Danner stated that there has been a push to make local government revenues dependable (not subject to State take -away) and to reverse all or a portion of the shift. Mr. Danner noted that he previously reviewed the City's major revenue sources (property taxes, sales taxes, and transient occupancy taxes) and reported that the following revenue sources generate over $1 million annually: franchise fees generate $1.3 million; business license fees generate over $2 million; motor vehicle license fees generate $2.8 million; COPS more grant generates about $1.5 million; administrative services /water service fees generate $3.3 million; parking fines generate $1.8 million; interest income generates $1.9 million; parking revenue generates $1.2 million; State gas tax revenue generates $1.3 million; Beacon Bay lease generates almost $1.1 million; tideland permits generate almost $1.2 million; Balboa Yacht basin generates $1.3 million; Balboa Bay Club generates $1.9 million; Balboa parking lot generates $1.1 million; contributions to fund refunds and rebates generate $1.2 million; Measure M funds generate about $1.5 million; water fees generate over $15 million; wastewater fees generate $2.5 million; internal service fund fees for insurance reserve generate $6.4 million; and internal service fund fees for equipment maintenance and replacement generate $3.6 million. Mr. Danner quoted a study by the Policy Institute of California which generally states that cities need to protect the revenue that they have control over. Regarding the City Council budget (Division 0110), City Manager Bludau stated that the proposed budget of $36,300 in Account 8010 (advertising and public relations) includes enough money to put out four newsletters and $9,100 for Michael Media's request to assist with the funding of the Newport Today television program since he says he is providing a public service to residents by interviewing local officials and staff. Regarding Account 8060 (publications and dues), he reported that the $23,622 includes dues for SCAG and the League of California Cities. Regarding Account 8254 (human services), he stated that the $25,000 provides grants to organizations. Mr. Bludau stated that the City Council budget grand total is $235,739. Regarding the Airport Management budget (Division 0120), Mr. Bludau reported that the Deputy City Manager's salary will be covered in the City Manager's budget, but the Deputy City Manager responsibilities will be moved to this division for the next fiscal year, noting that it was included in the City Attorney budget last year. He pointed out that the greatest expenses are in Account 8080 (professional and technical services) at . $664,665 and Account 8250 (special departmental expense) at $200,000 which were used for consultant services. He indicated that the total budget of $898,665 was recommended by the Airport Council subcommittee. Volume 52 - Page 482 City of Newport Beach City Council Minutes May 24, 1999 INDEX Council Member Adams suggested putting a portion of the Deputy City Manager's full-time equivalent into the Airport Management budget. He stated that he would like to have the amount of this category reflect as much of the total airport expenditures, rather than spreading them throughout the budget. Mayor O'Neil noted that this would also involve part of the City Attorney's salary. Council Member Adams stated that this could possibly be done in a separate account. Further, he stated that, on a policy standpoint, the City should know how much is being spent on this issue and that staff time will probably be a significant amount. In response to Council Member Noyes' questions, Mr. Danner stated that the figures in the budget were first put together in December and that updated numbers for the Airport Management budget were provided to the subcommittee. He reported that the budget is now in the red by $20,000. Regarding the City Clerk budget (Division 0210), Mr. Bludau reported that the budget reflects the same 3 full-time positions, there are no additions or deletions, and there are no significant changes. Noting that he is new to the process, Council Member Adams asked where the burden of the salaries are reflected in the budget. Mr. Danner explained that all the department budgets are broken down and that the burden begins at Account 7210. He stated that the burden is about 30% of direct labor for miscellaneous departments. Mayor Pro Tem Thomson questioned the inconsistencies in the Airport Management budget but stated that he will discuss them with the City Manager at another time. Regarding the City Manager budget (Division 0310), Mr. Bludau reiterated that a portion of the Deputy City Manager's salary and benefits will go into the Airport Management budget. He pointed out that the amount in Account 8080 (professional and technical services) includes the costs for the legal advocates (Kenneth Emanuels and advocates in Sacramento). Regarding the City Attorney budget (Division 0510), City Attorney Burnham stated that there is no change in staffing. However, there is a significant increase in professional and technical services (Account 8080) due to airport related litigation. Referring to Council Member Adams' previous comments, Mayor O'Neil noted that a clearer total needs to be indicated in the Airport Management budget. Mr. Burnham stated that the increase in Account 8080 totals $150,000 but that he is unsure of how much of his time is spent on airport related issues. Discussion ensued relative to whether or not it is important to keep all airport related issues in the same account. Mr. Bludau indicated that the $150,000 in City Attorney Account 8080 will be transferred to Airport Management Account 8080. Regarding the Administrative Services budget (Division 0610), Mr. Danner distributed an organizational chart and noted that there are 5 divisions within the Administrative Services Department. He further reported the number of budgeted full-time employees and the full-time equivalent Volume 52 - Page 483 0 City of Newport Beach City Council Minutes May 24, 1999 amounts for each division. He indicated that they do not have any new positions planned although the number of part -time employees that work nearly 40 hours a week is a significant issue because of the benefits. In response to Council Member Adams' question, Mr. Danner stated that the part -time employees are in the City's retirement system because of the amount of hours they work, but that the primary difference is that part -time employees do not receive health insurance which is about $5,000 a year. In response to Council Member Glover's questions, Mr. Danner explained that, pursuant to Federal law, part -time employees that work under 1,000 hours in a fiscal year receive PARS (Public Agency Retirement System) which is equivalent to a defined contribution plan. He indicated that 3%% of their salary is put into a defined benefit plan by the employee and 3Yz% by the employer. If the employee works over 1,000 hours, they are enrolled in PERS, pursuant to State regulation. Council Member Glover stated that working part -time is a personal decision. Council Member Ridgeway asked what percentage is paid to PERS vs. PARS. Mr. Danner stated that the employer's rate to PERS is 0% and for PARS is 3%% just for this year. He explained that this is the first time in 9 years that the employer's rate has gone to 0% and that this is a factor of the funding in the account in Sacramento. Mr. Danner stated that they are over - funded for miscellaneous employees this year. Council Member Ridgeway asked if the City would be better off asking the part -time employees to become full -time employees. Mr. Danner indicated that, in his department, about 100% of the part -time employees are in PERS. Mr. Danner reported that there are no new employees planned in Administrative Services, however, his staff asked him to convert the part - time employees to full-time. He explained that, as Acting City Manager, he received 4 requests but did not feel he was in the position to approve any of them. Mr. Bludau indicated that he will be looking at those requests. Mr. Danner reported that part -time hours are up; health/dental/vision insurance are up $30,000 due to negotiated MOUs; workers compensation charges are up $22,000 due to revised internal charges; advertising is up $20,000 primarily for recruitment publications; maintenance /repair of equipment is up $97,000 mostly for network and document imaging maintenance; professional and technical services are up $27,000 in Human Resources; Citywide training is up $27,000; tuition reimbursement is up $12,000 due to negotiated changes in the MOUs; office equipment is up $18,000 ($17,000 is in the MIS area for replacement of computers and related equipment); and the total overall department budget increased 2.37 %. He added that the disability insurance charges are down $23,000. Mr. Danner reported that, at the end of the year, the City will have $2.6 million to $2.7 million projected as the cash balance. Pursuant to Council Policy F -2, the City is required to have cash reserves of 50% of the future costs for liability and workers compensation and 25% for compensated absences. He believed that the goal of $4.7 million will be reached in 2 years. Volume 52 - Page 484 Will s1:1 City of Newport Beach City Council Minutes May 24, 1999 1111]01:/ In response to Council Member Noyes' question regarding the document imaging system, Mr. Danner explained that the $87,000 is for software licensing, as well as maintenance and payment/leasing of the equipment. Regarding the Police Department budget, Chief McDonell stated that the budget is 1% less than the 1998 -99 budget due primarily to the reduction of the PERS rates. He reported that the budget contains one additional Sergeant position that is fully funded by the revenue allocated by the Orange County Auto Theft Task Force; the budget includes 136 sworn and 81 non- sworn full-time employees which reflects 83% of the Police Department budget. He indicated that 3 of the 81 non -sworn employees are the helicopter mechanics that were approved in last year's budget and pointed out that 750A of their costs are reimbursed by Costa Mesa and the County of Orange. He stated that they hope to gain approval through PERS to allow ABLE (Air Born Law Enforcement) to be a part of the retirement system. If this happens, the Police Department may recommend to the Joint Powers Authority and the 2 city councils that the City employ them. 'He indicated that the only other modifications to the Police Department budget include a reallocation of part -time moneys for a part -time crime prevention employee; the increase of maintenance and operating accounts by about 3 %; and the decrease of the capital accounts by about 8'/ °A. In response to Council Member Ridgeway's question, Chief McDonell stated that the Police Department does not anticipate expanding the DARE Program to the high school level; however, he indicated that he received a report today regarding this and that he hopes to come back to Council with something for consideration. Regarding the Fire and Marine Department budget, Chief Riley stated that the budget is up 1.4% ($228,000). He reported that the increase is due to the addition of the Disaster Preparedness Coordinator; the addition of $32,000 for the increased fire sprinkler and alarm plan checking and inspection services for the Bonita Canyon activities; the $112,000 increase in workers compensation rates; and the increase in the overtime budget for fire suppression and emergency medical services. Chief Riley stated that the department took advantage of the decrease in PERS rates to fully fund the overtime budget which has not been done since 1993. He reported that the department is no longer realizing a $97,000 savings because of the age of the department and the amount of vacation accrued. Additionally, because of the age, the department is recognizing a significant increase in the amount of sick leave and industrial accidents. Chief Riley stated that overtime control is based on the obligations in the MOU and the need to maintain 24 -hour staffing at all the fire stations. In response to Council Member Ridgeway's questions, Chief Riley stated that the turnover due to age is expected to be about 60% in the next 5 years. However, there is legislation pending that would increase PERS' maximum allowable public safety employee from 75% to 90 %. He indicated that he is unsure what impact this would have on the projected future retirements, how far it will go through the Legislature; or when the City may elect to review this with the safety organizations. He stated that the controls that have been included in the MOU for newly -hired employees will definitely decrease the overtime burden. He reported that, for every new employee Volume 52 - Page 485 is 11 0 City of Newport Beach City Council Minutes May 24, 1999 • hired and every employee that retires, there is about a $12,000 overtime savings for each new employee. Chief Riley stated that there are 121 full- time employees in his department, with a significant number of seasonal and part -time employees. He confirmed that it is reasonable to presume that the budget will decrease on a cyclic basis due to retirements. Mr. Bludau pointed out that the remainder of the budget and the Capital Improvement Projects need to be reviewed prior to the June 14 public hearing but believed that this could be done in less than 3 hours. Mr. Danner indicated that there will be a public hearing for the budget and the appropriations limit at the next meeting; that Council typically prepares the budget checklist at the next meeting; and that the budget is scheduled for adoption on June 28. Mr. Bludau indicated that Council will also be able to conduct a study session on June 28. Following discussion, it was the consensus of Council to schedule the next Study Session at 3 p.m. on June 14, 1999, in order to review the remainder of the budget and the Capital Improvement Projects. PUBLIC COMMENTS Basing her statement on previous comments, Council Member Glover emphasized that she does not know the owner of Land Rover, has never spoken to him/her, has never met with him/her, and has not been lobbied by him/her. Further, that her meetings with the owner of Sterling BMW were at the request of Ms. Wood, not the • owner, and that she has never communicated with the owner on the telephone. ADJOURNMENT — 6 p.m. to a Study Session at 3 p.m. on June 14, 1999. The agenda for the Study Session was posted on May 19, 1999, at 3:30 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 52 -Page 486 INDEX CITY OF NEWPORT BEACH City Council Minutes DRAFT Regular Meeting May 24, 1999 - 7:00 p.m. INDEX STUDY SESSION — 4:00 p.m. [Refer to separate minutes] CLOSED SESSION - 6:00 p.m. CLOSED SESSION REPORT PRESENTED — None RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING ROLL CALL Present: Adams, Glover, Thomson, Debay, Ridgeway, Noyes, Mayor O'Neil Absent: None Pledge of Allegiance -Mayor O'Neil. Invocation by Pastor Warren Olson, Mariners Church. Presentation by Mayor O'Neil to Jerry Stewart, wife of the late T. Duncan Stewart, a poet laureate for the City of Newport Beach in the 1970's. Mayor O'Neil presented Ms. Stewart with a framed copy of The Happy Clapper, a poem written by her late husband and one that Ms. Stewart did not have a copy of Presentation by Karen Evarts, President of the Newport Beach Sister City Association. Ms. Evarts stated that the goal of the Sister City program is to create greater international understanding through close communication and direct contact. She stated that, in April, twenty -seven association members visited Okasaki, Japan to celebrate the 15th Anniversary of their Sister City affiliation and the 35th Anniversary of the Okasaki South Rotary Club. Ms. Evarts introduced Wendell Fish, the founder of the Sister City Association in Newport Beach, and Scott Paulsen, who provided a slide show highlighting the Association's recent trip to Okasaki. MATTERS WHICH COUNCIL MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION- ACTION OR REPORT (NON - DISCUSSION ITEM): • Council Member Glover stated that she is receiving correspondence and phone calls regarding the cutting down of two trees at Broad & Westminster. She announced that these trees were on private property so the City can take no action on their removal. • Council Member Glover invited the public to attend the New Arches Interchange Grand Opening Celebration, to be held on May 31, 1999, at 10:00 a.m. Volume 52 - Page 487 City of Newport Beach City Council Minutes May 24, 1999 • • Mayor Pro Tem Thomson announced the celebration of Phase I of the Harbor INDEX View Homes that was held over the weekend. He said the project was facilitated by a small land swap between the City and the Association, and was made possible through money raised from within the community. • Council Member Debay requested that the City Manager possibly assign someone from staff to attend an upcoming seminar regarding engineers and disaster preparedness training for regions affected by liquefaction, to be held June 17, 1999. She provided the City Manager with the flyer. • Council Member Ridgeway requested that a future agenda item provide the City Council with a resolution to support the fair competition and taxpayers savings tax being promoted by the Taxpayers for Fair Competition. • Council Member Noyes announced the community pride parade to be held on Balboa Island on June 6, 1999. He added that City Manager Bludau will be the Grand Marshall. • Mayor O'Neil announced the 18th annual Corona del Mar Scenic 5K race to be held on June 5, 1999. CONSENT CALENDAR READING OF MINUTES /ORDINANCES AND RESOLUTIONS 1. MINUTES OF THE ADJOURNED REGULAR (STUDY SESSION) AND . REGULAR MEETING OF MAY 10, 1999. Waive reading of subject minutes, approve as written and order filed. 2. READING OF ORDINANCES AND RESOLUTIONS. Waive reading in full of all ordinances and resolutions under consideration, and direct City Clerk to read by title only. RESOLUTIONS FOR ADOPTION 3. REVISED PARKING LOT FEES FOR BALBOA PIER AND CORONA DEL MAR PARKING LOTS (contd. from 4/26/99). Continue to June 14, 1999. 4. RESOLUTION AUTHORIZING SUPPLEMENTARY SALARY AND Res 99 -35 BENEFIT PAYMENTS TO CITY EMPLOYEES CALLED TO ACTIVE Military Duty MILITARY DUTY. Adopt Resolution No. 99 -35. (66) 5. RESOLUTION AUTHORIZING THE TEMPORARY CLOSURE OF Res 99 -36 SEASHORE DRIVE, NEWPORT BOULEVARD AND BALBOA Fourth of July BOULEVARD AND SELECTED FEEDER STREETS DURING THE Street Closure FOURTH OF JULY HOLIDAY PERIOD. Adopt Resolution No. 99 -36. (85) ORDINANCES FOR ADOPTION 6. ADOPTION OF THE FIRE CODE AND FINDING OF FACTS. Fire Code Continued to June 14, 1999. (41/53) Volume 52 - Page 488 City of Newport Beach City Council Minutes May 24, 1999 INDEX Building Code 7. ADOPTION OF THE BUILDING CODES AND RESOLUTION NO. 99 -_ SETTING FORTH FINDINGS BASED ON LOCAL (26/53) CONDITIONS WITHIN THE CITY OF NEWPORT BEACH WHICH MAKE CERTAIN MODIFICATIONS AND CHANGES TO THE CALIFORNIA BUILDING CODE, THE CALIFORNIA PLUMBING CODE AND THE CALIFORNIA RESIDENTIAL CODE REASONABLY NECESSARY. Continued to June 14, 1999. 8. ORDINANCE NO. 99 -15 AMENDING SECTION 1.08.055 OF CHAPTER Ord 99 -15 1.08 OF THE NBMC PERTAINING TO APPOINTMENT OF HEARING Hearing Officer OFFICER. Adopt ordinance. Amendment (53) 9. Item removed from the Consent Calendar by Council Member Glover. CONTRACTS AND AGREEMENTS 10. 1997 -98 ALTERATIONS AND REFURBISHING POLICE FACILITY C -3217 (C -3217) — COMPLETION AND ACCEPTANCE. Accept the work; 1997 -98 Alterations authorize the City Clerk to file a Notice of Completion; and authorize the and Refurbishing of City Clerk to release the bonds 35 days after the Notice of Completion has Police Facility been recorded in accordance with applicable sections of the Civil Code. (38) 11. GRAND CANAL DREDGING, EELGRASS TRANSPLANT AND ROCK C -3154 BUTTRESSES (C -3154) — COMPLETION AND ACCEPTANCE. Accept Grand Canal • the work; authorize the City Clerk to file a Notice of Completion; and Dredging authorize the City Clerk to release the bonds 35 days after the Notice of (38) Completion has been recorded in accordance with applicable sections of the Civil Code. 12. CORONA DEL MAR WATER MAIN AND ALLEY REPLACEMENTS C -3191 (C -3191) — COMPLETION AND ACCEPTANCE. Accept the work; Corona del Mar authorize the City Clerk to file a Notice of Completion; and authorize the Water and Alley City Clerk to release the bonds 35 days after the Notice of Completion has Replacements been recorded in accordance with applicable sections of the Civil Code. (38) 13. BONITA CANYON PARK (C -3270) — APPROVAL OF PROFESSIONAL C- 3270 -A SERVICES AGREEMENT WITH EPT LANDSCAPE ARCHITECTS. Bonita Canyon Authorize the Mayor and City Clerk to execute a Professional Services Park Improvements Agreement with EPT Landscape Architects to prepare plans and (38) specifications for the Bonita Canyon Park Improvements for a fee of $332,067. 14. JAMBOREE ROAD/EASTBLUFF DRIVE INTERSECTION C- 3202 -B IMPROVEMENTS — AWARD OF CONTRACT (C- 3202 -B). Approve the BA -071 plans and specifications; award C- 3202 -B to Peterson -Chase General Jamboree Road/ Engineering Construction, Inc. for the total bid price of $1,013,906 and Eastbluff Drive authorize the Mayor and the City Clerk to execute the contract; establish an Intersection amount of $101,000 to cover the cost of unforeseen work; approve a budget Improvements amendment (BA -071) appropriating $614,906 to Account No. 7261- C5200473 (38/40) from the unappropriated Circulation and Transportation Fund Reserves and . Volume 52 - Page 489 City of Newport Beach City Council Minutes May 24, 1999 INDEX appropriating $50,000 to the Contributions Fund, Account No. 7251 - 05200473. 15. NEWPORT DUNES HOTEL AND TIMESHARE RESORT C -3235 ENVIRONMENTAL IMPACT REPORT. Approve the amendment to the Newport Dunes professional services agreement with LSA Associates for the preparation of Hotel & Time -Share an environmental impact report for the Newport Dunes Hotel and Time- Resort EIR Share Resort project. (38) 16. GEOGRAPHIC INFORMATION SYSTEM (GIS) PROJECT. Authorize C -3287 the Mayor and the City Clerk to execute a Professional Services Agreement BA -068 with PSOMAS and Associates to convert the City's water facilities atlas GIS Project drawings into an electronic digital atlas mapping system; approve the (38/40) conversion of the GIS system from Genasys to Environmental Systems Research Institute (ESRI); and approve Budget Amendment (BA -068) to transfer appropriations in the amount of $77,862 from various accounts and increase appropriations in the amount of $49,715 to accomplish the above named conversions. 17. LEGAL PUBLICATIONS FOR ONE -YEAR CONTRACT COVERING C -3286 FISCAL YEAR JULY 1, 1999 TO JUNE 30, 2000. Authorize the City Legal Publications/ Clerk to publish a notice advertising for bids to be received on or before the One -Year Contract hour of 4:00 p.m., on Friday, June 11, 1999, for a one -year contract covering for FY 1999 -2000 the publishing and printing of legal notices, or other material required to be (32/38) published and circulated in the City of Newport Beach. . MISCELLANEOUS ACTIONS 18. PLANNING COMMISSION AGENDA FOR MAY 20, 1999. Receive and Planning file. (68) 19. RATIFICATION OF MAYOR'S APPOINTMENTS TO AD -HOC Ad Hoc APPOINTMENTS COMMITTEE. Ratify the appointment of Mayor Pro Appointments Tern Thomson (Chairman), and Council Members Glover and Ridgeway to Committee serve on the ad -hoc appointments committee to review applications and (24) make recommendations to the full Council for the Board and Commission vacancies scheduled to occur on June 30, 1999. 20. BUDGET AMENDMENT (BA -067) TO APPROPRIATE A DONATION BA -067 IN THE AMOUNT OF $3,480 FROM THE NEWPORT BEACH PUBLIC Newport Beach LIBRARY FOUNDATION TO PURCHASE OFFICE SUPPLIES. Public Library Approve BA -067. Foundation (40/50) 21. BUDGET AMENDMENT (BA -069) TO INCREASE REVENUE BA -069 ESTIMATES AND EXPENDITURE APPROPRIATIONS BY $2,800 Jail Management FOR THE PURCHASE OF A JAIL MANAGEMENT COMPUTER Computer System SYSTEM TO BE REIMBURSED BY THE CALIFORNIA BOARD OF (40/70) CORRECTIONS. Approve BA -069. 22. ADDITION OF TWO LEASED ELECTRIC VEHICLES. Approve the C -3185 leasing of two 1999 Toyota RAV -4 electric vehicles for a three year period at BA -070 a total cost of $35,320; approve the purchase and installation of two electric • Electric Vehicles Volume 52 -Page 490 City of Newport Beach City Council Minutes May 24, 1999 vehicle charger stations for a total cost of $9,000; and approve a budget amendment (BA -070) in the amount of $44,320 to appropriate AQMD matching grant funds (AB2766 non - discretionary funds) to lease the two electric vehicles and purchase the two charger stations. 23. UNDERGROUND UTILITIES IN WEST NEWPORT (PROPOSED UNDERGROUND ASSESSMENT DISTRICT NO. 69). Authorize an advance to Underground Assessment District No. 69 in the amount of $247,800 to provide for the design of the project by Southern California Edison and Pacific Bell; and approve a budget amendment (BA -072) to appropriate $47,800 from the General Fund unappropriated surplus to the Assessment District Capital Project Fund for proposed Assessment District No. 69, Account No. 7401- C5100212. 24. APPOINTMENT TO THE ENVIRONMENTAL QUALITY AFFAIRS CITIZENS ADVISORY COMMITTEE (EQAC). Confirm Mayor Pro Tem Thomson's appointment of Philip Luger to EQAC (District 7 at -large member). Motion by Mayor Pro Tern Thomson to approve the Consent Calendar, except for those items removed (9), and those items continued (6 and 7). Without objection, the motion carried by acclamation. ITEMS REMOVED FROM THE CONSENT CALENDAR 9. AMENDMENT TO CHAPTERS 20.80 (SERVICE STATIONS), 20.03 (DEFINITIONS), AND 20.67 (SIGNS) OF TITLE 20 OF THE NBMC TO UPDATE LAND USE AND PROPERTY DEVELOPMENT REGULATIONS FOR SERVICE STATIONS AND ADOPTION OF RESOLUTION APPROVING DESIGN GUIDELINES FOR SERVICE STATIONS. [AMENDMENT 8851. Council Member Glover expressed her concerns about the availability of alcoholic beverages at service stations and the number of children that drive through the City. She added that she understands the amendment to the municipal code, if approved, will include this provision. City Attorney Burnham confirmed that if the amendments to the service station ordinance are adopted, the City loses its grandfathered right to prohibit the sale of alcohol at service stations. He added that the City Council could still prohibit the sale if appropriate findings are made through the City's alcoholic beverage outlet ordinance. Council Member Glover stated that the requests to sell alcohol will go before the Planning Commission and not the City Council. She expressed her concern that the Planning Commission deals strictly with land use, whereas the City Council looks more at the overall picture. City Attorney Burnham added that the City Council does have the right to call up any decision of the Planning Commission. Council Member Glover again stated her concern that this ordinance will increase the availability of alcohol to drivers and children. Council Member Debay referred to page 5 of the staff report where it stated that, "if sound findings can be made that the sale of alcoholic beverages Volume 52 - Page 491 INDEX (38/40) i C -3288 BA -072 Underground Assessment District 69 (38/40/89) EQAC Appointment (24) Ord 99 -16 Res 99 -37 PCA 885/ Service Station Regulations/ Design Guidelines (53/94) • 0 City of Newport Beach City Council Minutes May 24, 1999 • would be detrimental to the community, then the Planning Commission would have the authority to place conditions on the sale of alcoholic beverages or prohibit their sale entirely ". She stated this statement was enough for her to vote in support of the ordinance at the last meeting. Council Member Debay asked about the availability of alcohol to children and City Attorney Burnham confirmed that appropriate identification would be required to purchase alcohol at service stations, the same as any other establishment. City Attorney Burnham listed the five considerations the Planning Commission, or Planning Director, must consider when approving a use permit for an alcoholic beverage outlet. He referred to Municipal Code Section 20.89.030 (B). He stated that many potential service station alcohol outlets would probably be subject to denial based on one or more of the findings. Council Member Glover stated that she has heard of adults buying alcohol for minors at these types of outlets. She is concerned that this ordinance brings a change to Newport Beach that is not desirable. Motion by Council Member Rideewav to adopt Ordinance No. 99 -16 and Resolution No. 99 -37 adopting design guidelines for service stations. Council Member Ridgeway stated that he feels the ordinance is responsible and new, and that the issue of adults buying alcohol for minors will be addressed by the appropriate law enforcement personnel. He added that he feels it will be very difficult for the Planning Commission to approve the sale of alcohol at any service station. Council Member Adams stated that he is in opposition to the ordinance because he doesn't feel that a new land use needs to be introduced into the City to allow convenience store development at service stations. Additionally, he added that he has seen no documented evidence that allowing service stations to have the opportunity to add convenience stores at their locations will affect gas prices. He stated that he supports the inability to even consider convenience stores at gas stations. He said that he is well versed on the issue and he is not anti - business, but sees no reason to change the existing ordinance. Council Member Glover referred to handwritten page 28 of the staff report and the Additional Design Guidelines for Special Development Types. She asked if Council Member Ridgeway would amend his motion to include another guideline. Council Member Ridgeway asked for staffs opinion on the amendment. Planning Director Temple, who wrote the additional language referred to by Council Member Glover, stated that the proposal included a set of design guidelines that the Planning Commission would use to judge the quality of the design of the new service station constructed under the new ordinance. Planning Director Temple stated that the language would add to the design criteria any supplemental design guidelines the City Council might adopt in Volume 52 - Page 492 INDEX City of Newport Beach City Council Minutes May 24, 1999 INDEX the future. . Council Member Ridgeway amended his motion to include the following language in the first paragraph of the design guidelines, as requested by Council Member Glover, "In addition to the design guidelines contained herein, the service station design shall be consistent with any design criteria or guidelines adopted by the City Council for the commercial district within which the service station is located, if any." Mayor Pro Tem Thomson stated his opposition to the motion because he sees no compelling reason to allow the sale of alcohol from gas stations. He stated that it will only make access to alcohol more convenient, and he has seen no evidence that the gas stations need this alternate to survive. He feels that the gas stations in the City are doing very well. He stated that bad things come with alcohol sales at service station convenience stores, and he cited information he heard from the Police Chief about minors being able to easily obtain alcohol from these types of outlets. He stated that he sees no reason to change the existing ordinance. Mansoor Vakili, 19021 Glenmont Terrace, stated that the current ordinance is thirty years old and has not changed to accommodate the change, over that period, in gas stations. He stated that Newport Beach used to have 44 gas stations, and now has 17. He stated that more gas stations will go out of business if this new ordinance is not approved. He said there are already other places selling alcohol, that ABC laws will still have to be adhered to and that the ordinance provides enough restrictions to disallow any application. He said that he currently makes more money in 40 square feet of retail space than in the mechanic shop, which takes up much more space. Rick Yost, 1300 S. Beach Blvd., La Habra, property development specialist for Chevron, stated that he agrees with the comments of Mr. Vakili. He stated that the new ordinance allows the Planning Commission to deny any application, and it improves the existing and new stations. Referring to a previous question, he stated that market research has shown that customers prefer one -stop shopping, which includes convenience stores at gas stations. He added that this provision would in no way affect the price of gasoline. Council Member Glover stated that she was told that gas prices are established based on the per capita income of the City in which the gas station is located. Mr. Yost stated that gasoline prices are only established by market competition, supply and demand. Mayor Pro Tern Thomson requested that Police Chief McDonell address the issue, and referred to the fact that over half of the City's budget goes to public safety. He asked that the Police Chief discuss how new mini- market alcohol outlets will affect the community and how they will be policed. Police Chief McDonell stated that it would be difficult to quantify, but that he can provide current statistics. He stated that year -to -date, as of May 10, there have been 508 alcohol - related arrests made. Of these, 348 were for drunk in public or 160 were for drunk driving. He stated that of the 508, 26% were Newport Beach residents and the remaining were from out -of -town. He said the impact of any new alcohol outlets would be difficult to describe, but it is Volume 52 - Page 493 City of Newport Beach City Council Minutes May 24, 1999 known by law enforcement to be a place where minors prefer to try to make alcohol purchases. He said the Police Department would handle complaints in the same manner that complaints regarding any alcoholic beverage outlet are handled. Council Member Debay stated that many of the service stations contain work bays for maintenance activities on cars, but that she understands this type of work has almost disappeared. She confirmed with Mr. Yost that the service station owners would prefer to have convenience stores in place of the work bays. Mr. Yost added that car maintenance business has dwindled enough, that the owners can't afford to continue to operate and maintain the work bays. Council Member Adams stated that the number of gas stations in the City has remained fairly stable over the last ten years, adding that he thinks there are plenty currently in place. He also stated that he feels that the service bays do provide a valuable service and that they must be doing enough business, since they are still in business. Jean Impey, 416 Hazel, stated her support for the current ordinance. She stated that groceries can be bought at grocery stores. She added that she has used the service stations for vehicle maintenance, and thinks that service should remain. Kevin Yoches, 1972 Rosemary Place, Costa Mesa, stated that he could confirm that his classmates and friends do get adults to buy alcohol for them by standing outside of service station convenience stores. He stated that he's seen his friends get into alcohol - related accidents, he's lost friends due to alcohol and he's seen the damage alcohol can do. He would prefer to see Newport Beach not allow alcohol sales at gas stations. He thinks it would diminish the quality of the City and would make it more convenient for children to get alcohol. The amended motion carried by the following roll call vote: Ayes: Debay, Ridgeway, Noyes, Mayor O'Neil Noes: Glover, Adams, Thomson PUBLIC COMMENTS - None. PUBLIC HEARING 25. ROWE RESIDENCE — 2231 PACIFIC DRIVE — AN APPEAL OF THE DECISION OF THE PLANNING COMMISSION WHICH UPHELD THE DECISION OF THE MODIFICATIONS COMMITTEE, WHICH DENIED A REQUEST TO CHANGE CONDITION NO. 4 OF MODIFICATION NO. 4538 — THE CONDITION OF APPROVAL REQUIRES THAT USE OF AN ATTIC SPACE OVER A GARAGE BE LIMITED TO STORAGE ONLY, AND THAT THE STORAGE AREA IS NOT TO BE USED AS ADDITIONAL LIVING SPACE. THE APPLICANT IS REQUESTING THAT THE CONDITION OF APPROVAL BE CHANGED TO ALLOW THE AREA OVER THE Volume 52 - Page 494 INDEX Mod. Permit 4843 Appeal/ 2231 Pacific Drive Rowe Residence (94) City of Newport Beach City Council Minutes May 24, 1999 U -1 GARAGE TO BE CONVERTED TO LIVING AREA AND USED AS A HOME OFFICE (contd. from 5/10/99). City Manager Bludau stated that he was notified today that the appellant has requested that the item be continued to June 28, 1999. Mayor O'Neil requested that the item be taken off the agenda if it is not heard at that meeting. He stated that it is a burden on staff and the City Council to have the matter continually brought forward and then continued. City Attorney Burnham stated that an agreement has been reached on the matter, and that there is simply the need to prepare and record a convenant. Motion by Mayor O'Neil to continue the item to June 28, 1999. Without objection, the motion carried by acclamation. PARKING TIME LIMITS ON HAZEL DRIVE (contd. from 5/10/99). Public Works Director Webb stated that staff prepared a report per the City Council's request to allow residential permit parking on Hazel Drive. He stated that the resolution establishes the two -hour parking limit and the ordinance establishes a residential preferential zone. He said the ordinance is necessary in order to issue permits for that area. Paul Glowienke, 427 Hazel Drive, stated that he is in support of both the resolution and the ordinance. He handed out a Proposal for Residential Permitted Parking, put together by himself, and Walter & Jean Impey. Referring to this handout, Mr. Glowienke pointed out the Residential Parking Permit Survey in the report and noted that every City surveyed, with the exception of Dana Point, offers residential parking permits on a limited basis. He went on to discuss the uniqueness of Hazel Drive, as listed in the report. He also highlighted a map in the handout that showed the available parking spaces for the businesses as well as the available spaces for the residences. He went on to detail the available parking spaces, as illustrated in the report. He concluded that there is ample space for the employees to park at the businesses. Council Member Adams confirmed residences have on -site parking, three the remainder for one car only. with Mr. Glowienke that all the of the nine for possibly two cars and Council Member Glover stated that if all of the residents are using their on- site parking, then she could be in support of the resolution and the ordinance. Council Member Noyes stated that he has seen evidence that not all of the residents are using their garages. He added that no one in the City has the right to park in front of their own homes. Volume 52 - Page 495 INDEX Restricted Parking on Hazel Drive (85) City of Newport Beach City Council Minutes May 24, 1999 Mr. Glowienke added that he works out of his home and that the residents are not in support of the two -hour parking limit if the preferential permit is not also approved. Mr. Glowienke pointed out the parking spaces in his report, which are currently not being used by the businesses but could be. Mayor O'Neil asked about the effect of Crown Pointe, the assisted care living facility on Coast Highway. Mr. Glowienke answered that it's too early to tell what the effect will be since the facility is not fully occupied. Per Council Member Ridgeway's request, Mr. Glowienke listed the residents who work out of their homes. Mr. Glowienke continued with his presentation by pointing out the suggested notice that the Hazel Drive residents would like to use to assist in enforcing any new parking restrictions. Walter Impey, 416 Hazel Drive, stated that parking is a little lighter recently, but it's because there are a couple of vacant businesses. He went on to point out a letter in the report where the Hazel Drive residents are, at least, asking for a trial period. He stated that their purpose is to move the employees of the businesses, and not the customers. Mayor O'Neil stated that a concern of his is that if this request on Hazel Drive is permitted, many other streets will ask for preferential parking. He said it's a delicate balance between the residents and the businesses. He added that Hazel Drive may have unique topographical limitations. Mr. Impey stated that Hazel Drive is unique and should provide the City Council with the reasoning it needs. He expressed the difficulty his elderly parents have when visiting and their attempts to find parking close enough so that they don't have to walk too far on the steeply inclined street. Council Member Noyes stated that, all over the City, residents move cars to save spots. He said this is not a problem unique to the Hazel Drive residents. Mel Grandinette provided some history of Hazel Drive and the residents' attempts to work with the businesses. He listed some of the areas in the City that already have preferential parking, such as the high schools. He asked that the City Council approve the trial period. City Attorney Burnham responded to Mayor O'Neil's question about the findings and criteria needed to issue preferential parking permits by referring to Municipal Code Chapter 12.68. He stated that the findings that have to be made to approve preferential parking include that it protects the quality of life in the area, that it provides reasonably available and convenient parking for the benefit of the adjacent residents and that it alleviates traffic congestion and illegal parking. City Attorney Burnham went on to read the seven criteria that must be considered, as listed in Municipal Code Section 12.68.030 (A -G). Mayor O'Neil asked if the criteria were being met for preferential parking permit on Hazel Drive. City Attorney Burnham stated that there is some Volume 52 - Page 496 INDEX City of Newport Beach City Council Minutes May 24, 1999 INDEX question as to if this permit would just displace vehicles to another block. He added that he also questions if the current nonresidents parking is a source of unreasonable noise, traffic hazards, environmental pollution or devaluation. Council Member Debay stated that she was surprised that staff was recommending this, but that she feels that if it has been found to be reasonable, she can support it on a trial basis. She also pointed out that the permits would not be limited to residents. Council Member Ridgeway stated that on the peninsula, where he lives, it is common practice to move cars to save parking spaces. He added that he is bothered by the fact that some of the Hazel Drive residents work out of the their homes and may not be using their garages. He stated that he could maybe support the two -hour parking time limit but not the preferential parking permit. City Attorney Burnham stated that, in addition to the previous criteria mentioned, he also questions if Section 12.68.030 (G), which states that other alternative solutions have been found to be unfeasible or impractical, has been met. Council Member Noyes stated his understanding of the residents' request that they be given both the time limit and the permit, or neither. Mayor O'Neil stated that he understood it the same way. He agreed that • Hazel Drive has some unique characteristics. He stated that he's not too concerned about setting a precedent, because he feels that other areas in the City may warrant preferential parking also. Motion by Mayor O'Neil to approve a six -month trial for preferential parking on a two -hour basis on Hazel Drive from the alley north of Coast Highway to Second Avenue. The motion failed by the following roll call vote: Ayes: Debay, Glover, Mayor O'Neil Noes: Ridgeway, Noyes, Adams, Thomson Mayor O'Neil stated that the matter is difficult to resolve, but a solution needs to be found. Council Member Debay stated that she recently requested a report on what the costs are to increase enforcement of existing preferential parking restrictions. She stated that employees of businesses that park on nearby residential streets need to change their habits, when commercial space is available to them. 27. BEACH VOLLEYBALL COURT AT 2406 W. OCEANFRONT. Beach Volleyball Court at City Manager Bludau stated that the item was back before the City Council 2406 W. Oceanfront at the current meeting because a resident claimed that he was not given (62) Volume 52 - Page 497 City of Newport Beach City Council Minutes May 24, 1999 • proper notification when the matter was before the City Council at its meeting of April 26, 1999. City Manager Bludau stated that the City Council could decide to leave the volleyball court in front of 2406 W. Oceanfront, move it to another location or eliminate it from the current location. Charles Hartwell, 2408 W. Oceanfront, stated that the volleyball court in question is under high use and is in a very crowded area. He stated that the regular volleyball players seem to own the court and it's not a public beach anymore. He stated that he believes the court should be removed. Stan Hatch, 1547 Orange Avenue, Costa Mesa, stated that he is a player on the court at 2406 W. Oceanfront and, responding to the previous speaker's comments, feels he and the other players respect the public's right to use the beach. He added that they often leave their personal net up for others to use. He stated his concern for just moving the court to another location because it doesn't address the situation. He stated that the players have worked with the City's Senior Recreation Manager and the only real improvement that was considered was for the players to warm up at the ends of the court instead of between the court and the boardwalk. Andy Reinking, 6001 Newport Shores Drive, a player at the 2406 W. Oceanfront court, stated that he collected 647 signatures on the opinions of the public and businesses in the area. He stated that 276 of the signatures were residents, 43 were businesses and 328 were non - residents. He stated that all enjoyed watching play and/or having access to the volleyball court. • Mr. Reinking added that the current location of the court is convenient for several reasons. He concluded by stating that they clean up after themselves and allow others to use the court. Council Member Debay stated that she has been to the site. She stated that although the court is the required distance from the boardwalk, it is near the start of the bike path at the west end of the parking lot. She stated her understanding of the fellowship that goes along with having a regular court to play at, but she expressed her concern for the number of people that gather to watch the regular players and the congestion that takes place at that location. She asked if Mr. Reinking and the other players could encourage the people that gather to continue moving along the boardwalk or move onto the beach. He stated that they could do so and that it was a good suggestion. Brad Dorfman, 2402 W. Oceanfront, stated that the players are not causing the problem, it's the location of the court that is the problem. He agreed with Council Member Debay that it's a very congested area to begin with. He added that it is not just the area contained within the volleyball court, but the area where the ball will often fly outside the court. He stated that he doesn't think that he, as a resident, should have to endure a flying volleyball that could cause property damage or personal injury. He added that the volleyball court used to be at 26th Street, where he feels there is more room. He said the regular players are good and lots of people enjoy watching them. . Moses Morezabi, 2406 W. Oceanfront, stated that he is in favor of moving the volleyball court from 24th Street to 26th Street because the people that gather Volume 52 - Page 498 INDEX City of Newport Beach City Council Minutes May 24, 1999 INDEX block his view. He thinks it makes sense to move it to 26th Street because that location would be at the end of an alley. Patrick Daw, 259 Lower Cliff Drive, Laguna Beach, stated that the Parks, Beaches and Recreation Commission voted 7 -0 in favor of keeping the volleyball court at its current location. He added that the Commission found the court to provide entertainment for the public. He stated that the same problems will occur at 26th Street. Council Member Ridgeway requested that staff provide more information on the subject. He understands that this issue has been ongoing for some time and he would like more background information on what has taken place to date. He also requested statistics on how many of the volleyball courts on the peninsula are within 50 feet of the sidewalk. He stated that the court in question is a problem because it is next to a public parking lot and in a congested area. City Manager Bludau stated that none of the beach volleyball courts are within 50 feet of a property line or sidewalk, per Resolution 92 -93. Council Member Ridgeway restated his request and asked for a report of the courts that are at the 50 -foot mark versus those that are farther out. Community Services Director Kienitz confirmed that no courts are within 50 feet, but that staff could gather the information that Council Member Ridgeway is requesting. Council Member Debay stated that the beach is narrow at the 24th Street location, and the court can't be moved closer to the water because the beach slopes at that point, Council Member Ridgeway stated that when the additional information is provided by staff, the City Council may decide that 50 feet isn't enough in congested areas such as the 24th Street location. Council Member Noyes confirmed with Council Member Debay that the slope disallows moving the 24th Street court any closer to the water. Council Member Noyes also agreed that all the information on the subject should be provided to the City Council. Council Member Ridgeway and Council Member Noyes both mentioned beach volleyball courts that are much farther than 50 feet from the boardwalk. Council Member Ridgeway expressed concern over the firmness of the sand in this location and the ability for the ball to bounce into the parking lot. Council Member Glover confirmed that the volleyball court in question is in District One, Council Member Ridgeway's district. Motion by Council Member Ridyewav to continue the item to June 28, 1999, to allow staff to provide the City Council with more backup information. Volume 52 - Page 499 is • • City of Newport Beach City Council Minutes May 24, 1999 Council Member Debay stated that probably another attraction of the current location for the players is the access of the nearby parking lot. Council Member Noyes again asked about moving the current court farther out. The players in attendance stated that it could maybe be moved out ten feet, but that there also has to be room left for the lifeguard vehicles on the water side of the court. Without objection, the motion carried by acclamation. Council Member Debay asked about the width of the beach at 25th Street, and was told that it was the same. CURRENT BUSINESS 28. BALBOA BOULEVARD REHABILITATION, MAIN STREET TO "G" STREET — AWARD OF CONTRACT (C -3176) AND APPROVAL OF BUDGET AMENDMENT (BA -066). Council Member Ridgeway stated that the Balboa Merchants Owners Association supports either option 2(A) or 2(C), but that they prefer 2(A). Motion by Council Member Ridgeway to approve the plans and specifications; award contract (C -3176) to Los Angeles Engineering and authorize the Mayor and the City Clerk to execute the contract for the total bid price of $574,564.10 for Alternate "A" (pavers in the roadway and sidewalk areas at the intersection of Balboa Boulevard and Main Street); establish an amount of $57,000 to cover the cost of unforeseen work in Alternate "A'; and authorize a budget amendment (BA -066) to transfer appropriations of $131,564.10, as described in the staff report. Without objection, the motion carried by acclamation (Council Member Thomson was absent during the vote). NEW BUSINESS 29. 30TH STREET STORM DRAIN ENVIRONMENTAL AND PROJECT COORDINATION. City Attorney Burnham announced that staff would like the City Council to consider an item that arose after the posting of the agenda. He summarized the staff report as it was handed out to the council members. Motion by Council Member Glover to approve consideration of the item at the current meeting, based on the fact that the need to take action arose after the posting of the agenda. Without objection, the motion carried by acclamation. • Motion by Council Member Ridgeway to approve professional services with J. H. Douglas & Associates for Environmental and Project Coordination Volume 52 - Page 500 INDEX C -3176 BA -066 Balboa Boulevard Rehabilitation (38/40) C -3289 30th Street Storm Drain Environmental and Project Coordination (38) City of Newport Beach City Council Minutes May 24, 1999 INDEX work in conjunction with the 30th Street Storm Drain. The approval • recognizes that this firm has a former City employee working for them. Without objection, the motion carried by acclamation. MOTION FOR RECONSIDERATION —None. ADJOURNMENT — 9:05 p.m. The agenda for the Regular Meeting was posted on May 19, 1999, at 3:30 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. Recording Secretary Mayor • City Clerk Volume 52 - Page 501