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HomeMy WebLinkAbout01 - 09-25-2001October 9, 2001 Agenda Item No. CITY OF NEWPORT BEACH City Council Minutes Study Session ®���� September 25, 2001- 4:10 p.m. INDEX ROLL CALL Present: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Absent: None CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR. In response to Mayor Adams' questions regarding Item 4 (West Newport Sewer Main Replacement Project — C- 3453), Public Works Director Badum reported that this project deals with a rare case in which a sealed pipe in a segment of a clay pipe is leaking due to corrosion. He indicated that conducting the work at night was looked at, but with the proximity of residents it was determined that the work could be done during the day since there are many points in which traffic volumes are low. Regarding Item 6 (Newport Coast Advisory Committee), Mayor Adams asked how Council makes its appointments. Assistant City Manager Mff stated that the intent is to have the City Clerk have a call for applicants; have the applications reviewed by Council; and, with Council's concurrence, the Mayor would make the appointments. He noted that this procedure is outlined in Exhibit A. Mr. Kiff confirmed for Mayor Pro Tem Ridgeway that members have to live in Newport Coast and must submit an application. Regarding Item 8 (Buck Gully Pump Station Rehabilitation — C- 3368), Mayor Adams noted that this appears to be a 100% increase in professional services and that a lot of agencies prohibit this out of fairness to the engineering community. City Manager Bludau reported that the City does not have a threshold policy. Mayor Adams indicated that the City may want to consider this type of policy and maybe go out to bid for this, noting that the original contract was for $36,000 and now it is being proposed to be increased by $39,000. Public Works Director Badum explained that the two projects that were added were relatively minor in nature, yet similar in many ways, and doing it in this manner would expedite the CIP process. He indicated that they are not opposed to taking the two pump stations out of the contract, but do want to make some modifications to the additional work on the Buck Gully Pump Station because they feel they have a better design plan. He noted that the cost of this modification is about $9,242. He stated that, if this were to go out to bid, they are requesting that at least this amount remain. Mayor Adams indicated that he is alright with this if there were extenuating circumstances, but he believed that the City should be careful in these situations. He added that Council may want to entertain a policy to place a percent cap on extending current contracts. Mayor Pro Tem Volume 54 - Page 465 City of Newport Beach Study Session Minutes September 25, 2001 Ridgeway suggested that Council discuss this during the regular meeting since this goes beyond clarifying an item on the Consent Calendar. Regarding Item 10 (Main Beach Sewer Force Main Replacement — C- 3296), Mayor Adams applauded staff for being creative, coming up with an alternate bid item, dealing with the homeowners association, and saving $40,000. Mayor Adams noted that Item 14 (Water Quality Testing in Storm Drains and Tributaries to Newport Bay) is a sole source contract with the University of California for $36,000 and believed that staff provided good justification for it. Regarding the 50% charge on overhead, Assistant City Manager Kiff explained that it is .5 times direct labor and materials costs ($12,000 on the $24,000 cost of labor and materials). He added that the University Regents also applied a 50% overhead to the original charge for administration. In response to Council Member Proctor's questions, Mr. Kiff stated that there will be a lot to tackle once the City gets answers from the tests and finds out the exact problem, the source of the bacteria, and whether there are viruses present. Regarding doing more, he indicated that he is always open to suggestions. He added that the City received another $400,000 in State money to complete a variety of tests that have not been considered yet. This item will be brought before Council at the next meeting. Council Member Glover stated that the City needs to set goals regarding beach closures, how many the City will tolerate, and how to alleviate the closures. She indicated that the perception in the City is that the water is not clean and that Council needs to turn this perception around. Mr. Kiff agreed and stated that this is important to address. In response to Mayor Adams' question regarding Item 15 (Newport Center First Station No. 3 Mechanical Upgrade and Restroom Addition — C- 3385), City Manager Bludau stated that it was his understanding that this was in the budget. Public Works Director Badum indicated that the additional funding includes $23,000 and noted that this is a CIP project. In response to Council Member Proctor's questions regarding the protest that was filed, Mr. Badum explained that the second low bidder was protesting that the low bidder did not list subcontractors that were specialized in several areas. However, under the B- License of building, the contractor can employ people with those types of skills and do the work himself. He pointed out that the second bidder indicated that contract law states that, if you do more than one percent of the work, you have to list the subcontractors in the contract. He stated that the City will be ensuring that he is doing the work himself. He reported that, since there is nothing that prohibits the contractor from hiring specialists, they had to reject the protest. Council Member Proctor asked if everyone is comfortable that there is no basis in fact or law for this issue to be reexamined. Mr. Badum stated that the Project Manager, Lloyd Dalton, consulted with the City Attorney's office and believed that everyone is satisfied. 2. COUNCIL REVIEW OF STAFF'S PRELIMINARY ASSESSMENT OF CITY ACQUISITION OF DUNES LEASEHOLD. Volume 54 - Page 466 INDEX GPA 97 -3(F) Dunes Leasehold City of Newport Beach Study Session Minutes September 25, 2001 Mayor Adams reported that he received a call from Nancy Skinner prior to September 11, 2001, asking that the discussion be less formal and provide for more flexible debate and discussion from the public. He indicated that he will try to accommodate this since this issue is something the public has expressed a great interest in. He reported that, with Council permission, Council will receive the presentation by staff, open Council discussion, and then the public will be invited to speak for three minutes individually. However, after all the public has had the chance to speak for three minutes, he will invite people back to speak again for an additional three minutes so there will be a chance to have discussion or comment. Council Member Glover indicated that she is not particularly comfortable with the proposed procedure. Mayor Adams noted that the difference from normal policy is that people are given three minutes instead of five minute and they also will be allowed to speak more than once. City Manager Bludau stated that, after the Closed Session agenda went out, he received word that the window to accept bids closes on October 15, 2001. He indicated that, based on the closing date, he will be requesting that Council add this item to the Closed Session agenda at the end of the study session since it came up after the agenda was printed. Mr. Bludau stated that Council Member Bromberg requested that staff take a preliminary look at the Newport Dunes leasehold and report back to Council so a determination can be made on whether it is interested and possibly propose to purchase the leasehold. He reported that the current leasehold is held by the Newport Dunes Partnership; is 100 acres, which includes the water; is leased from the County of Orange; is tidelands, except for about 5% of the leasehold which is uplands; and is presently operating as a recreational vehicle (RV) park and marina. He noted that the use of the tidelands is governed by Chapter 526 of the California Statutes. Mr. Bludau utilized a PowerPoint presentation and reported that, prior to 1955, the area was nothing more than a saltwater marsh. However, in 1955, the County began a dredging project that took two years. In 1958, the lease was entered into with Newport Dunes, Incorporated. Beginning in 1976, the County and Newport Dunes started planning for the enlargement and improvement of existing facilities and the construction of new facilities. He stated that included in this was the construction of a family inn with 350 rooms and meeting rooms with the capacity to seat 400 people. He reported that an Environmental Impact Report (EIR) was generated and the City challenged the EIR in 1981, which resulted in a settlement agreement in 1983 that gave the City land use authority over the property and identified what the improvements could be and its scope. He reported that the City regulates the site through a Newport Dunes Planned Community (PC) District Plan and utilized a map to show the five different planned uses (RV resort area; Bay, beach, and lagoon area; boat launch and storage area; marina area; and the proposed resort). Regarding the map, he indicated that it simply shows the areas in the PC District Plan and its authorized uses, and was not meant to show the entitled plan for the proposed resort. Mr. Bludau utilized a slide which highlights how the different land uses compare with the settlement agreement. He reported that the entitled 275- Volume 54 - Page 467 INDEX (45) City of Newport Beach Study Session Minutes September 25, 2001 INDEX room family inn that could be up to 500,000 square feet, and the 27,500 square foot restaurant are not built yet. He also stated that there is a difference between what was required by the settlement agreement and what is available, pointing out that, instead of having 450 slips, there are 430 slips and 20 temporary slips. Mr. Bludau reported that the Newport Dunes Partnership leases the property from the County and has a 50 -year lease that was entered into on February 16, 1989. He noted that the lease has had about four major amendments and the purpose of the property, as sited in the lease, is for the County to enter into the lease in order to promote the redevelopment of the Newport Dunes and to make tenant - provided recreational facilities and services available for the benefit of the public. He reported that there is an annual minimum rent with a provision for adjustments by the County every five years. He explained that the percentage of rent against the gross, which is subject to periodic adjustments by the County, is generated from specific uses and pointed out that the percentages are outlined in the staff report. Further, the tenant must establish a capital replacement fund for replacing furniture, fixtures, marina facilities, and capital repairs and improvements; and the lease requires specific mandatory demolitions that have already taken place. Mr. Bludau reported that the tenant is solely responsible for the site maintenance, with the exception of dredging which is established and funded by the County when it is needed. Further, lifeguards are required at the swimming area when it is open to the public, plus there are insurance requirements. He reported that the lease transfer does require County approval and the County also has the right of first refusal to match any bona fide purchase offer within 45 days. Lastly, the County must agree to the boat launch and marina fee changes. Mr. Bludau stated that there is no minimum bid. He reiterated that the cutoff date for accepting purchase offers is October 15, 2001; the entire leasehold is for sale; the seller is not interested in purchase payments over time; the County has 45 days to match any purchase offer; and leasehold revenues have increased on the average of 6% to 8% annually. He reported that, from the latest audit, the combined revenues for the last audit year were a little more than $11 million; the gross operating profit was $4.6 million; the lease payment to the County is almost $1.8 million; property taxes, insurance, and other expenditures were in excess of $580,000; the net income is $2.2 million; and the property and equipment value is almost $29 million, but has been depreciated and amortized down to $16 million. Mr. Bludau indicated that he was most interested in the $2.2 million net income and what the City could bond off of Council Member O'Neil asked what types of financing methods are available to the City if it wanted to buy the lease. Mr. Bludau indicated that the first question to answer is whether the City would be able to borrow the money and, if it sells bonds, will the bonds be tax free because that would reduce the interest rate. He stated that, in providing information to Council, he made the assumption that the revenues generated will need to pay for the borrowing of the money since the City probably would not want the General Fund to support this purchase. He estimated the property to be worth $25 million to $50 million for the 39 year leasehold. He recommended that a Volume 54 - Page 468 City of Newport Beach Study Session Minutes September 25, 2001 INDEX consultant be brought on board, if Council were interested, to take a look at the financials and determine a price that the City may be interested in offering. Council Member Glover believed that Council needs to know what this would cost per parcel for each household because, if the City buys this, it would have to be paid for by the citizens and would need to become a ballot issue. She stated that her district is surrounded on three sides by commercial area and, if the Dunes were turned into a park, inlanders would be driving off of Newport Boulevard through Cliff Haven, Mariners, and Newport Heights to get to the Dunes. She expressed the opinion that this would be a disaster for her district. She stated that this does not make any sense unless the City is willing to gate her district, which should also be paid for by the taxpayers who want a park at the Dunes. Mr. Bludau added that the $2.2 million shows what the net profit is right now. He stated that there is probably about $2 million that can be bonded indebtedness. However, with anything over $30 million, the City would need more money and, if the community was really interested in doing this, one way of doing this would be to make up the differential between the profit that comes off of the site and what the cost of the bond payment would be each year. This would necessitate having a property tax override which requires a 2/3 vote. Mr. Bludau stated that the City would not be able to determine what the amount to each resident would be until it determines what it believed to be a fair purchase price. Council Member Heffernan expressed concern about the City going into businesses that they should not necessarily be in. He suggested that, if the City purchased the property, it sell off the other pieces (RV park, slips, boat dock, etc.) to people who are in these types of businesses. The City should end up with the hotel site, and downgrade it to open space for a park. Mayor Pro Tem Ridgeway agreed that the City should only be focused on the 30 acres. He asked if the City has conducted a needs assessment and defined what that space is going to be. He asked, if the space is going to be a park, will it be an active park or a passive park, noting that the City's parks are extremely underutilized. Mayor Pro Tem Ridgeway indicated that citizens of his district would not be amiable to paying for open space on this side of the Bay to the exclusion of the district. Regarding the other parcels, the City needs to bifurcate ownership and stay interested in the undeveloped parcel since the City has no right as a governmental entity to be in these types of private businesses. He stated, however, that it would be a steal to get the entire parcel for $50 million since there is about $23 million for the operational component. He pointed out that the undeveloped 30 acres that is entitled has a value, noting that land along Coast Highway is in excess of $100 /foot. Additionally, this calculates to about $4 million/acre which makes the 30 acres worth $120 million. He clarified that he does not believe the land is worth this, but just wanted to give people the comparables that are out there. Mayor Pro Tem Ridgeway stated that this gets more complicated because a proposal needs to be in by October 15; the City would need to buy the entire parcel; find a buyer for the remainder parcels; and put some type of public financing on this. He also asked if someone has talked with the Volume 54 - Page 469 City of Newport Beach Study Session Minutes September 25, 2001 INDEX Uounty to determine it they are prepared to lose the income on that piece of property. He pointed out that the City has an expectation for a certain amount of tax dollars from that property (revenue and transient occupancy tax) and now this will be lost. He asked if this was included in the formula. He indicated that he is willing to put this to a vote, but believed the citizens are not prepared to approve the purchase by a 2/3 vote. Council Member Bromberg stated that, if there is the slightest glimmer that this Council might be interested in acquiring this property or bid on this property, Council should consider the studies that Mayor Pro Tem Ridgeway mentioned. However, if October 15 is the date to close bids, the City would never be able to make a bid or offer on a project like this. He added that doing a study would still take a few months. Mayor Pro Tem Ridgeway noted that the City had a willing and cooperative seller for Upper Castaways which was previously voted on by the citizens, but that still took months to posture. He emphasized that this is not the case with the Dunes as the seller is desirous to close. Further, the Upper Castaways election occurred when the 2/3 vote rule did not exist. Council Member Proctor believed that the City needs to approach this, not withstanding the October 15 date, with a feasibility study and a needs assessment. Further, costs, how to finance this, and whether the voters will be willing to accept the financial responsibilities also need to be determined. Mayor Adams asked if the County has discretion over the lease transfer and suggested that the City work through the County to possibly extend the October 15 date. Further, he asked if the County can tell the Dunes that they cannot transfer ownership. Mr. Bludau stated that the County would have to have a good reason not to approve the transfer. Council Member Heffernan stated that people should understand that, even though the hotel is entitled, it does not mean this is the end of City review. Mayor Adams clarified that this is incorrect and reported that the developer pretty much has a green light and the City would have very little discretion on how and where it gets built, and its characteristics on the site. He reiterated that there is an entitlement for a hotel on the property and noted that there was recently a proposal to change the characteristics of the hotel by adding a meeting space and slightly increasing the square footage. City Attorney Burnham pointed out that permitting timeshares was never in the settlement agreement. Bob Caustin stated that he is in attendance on behalf of his wife, Susan Skinner Caustin of Stop the Dunes Hotel. Noting that he lives in Council Member Glover's district, he indicated that he does not believe people will be driving through their streets to get to the Dunes. He stated that he does take his child to the park and that it is important to make them available to everyone. Regarding bond financing, he indicated that the current tax free rates are about 4.5% which means about $30 million can be floated on that existing income stream. He noted that the seller's EIR states that the hotel site could not make money under its current approved plan and, if the City bought the land, it could probably negotiate something. He agreed with a Volume 54 - Page 470 City of Newport Beach Study Session Minutes September 25, 2001 INDEX previous comment that there may not be a reason to continue to discuss this at this point if the October 15 date is absolute. However, he expressed hope that negotiations continue and the City explores what the individual pieces of land are worth, believing that buyers may be able to come to the table and jointly buy the property with the City. He requested that, since many people could not attend tonight's meeting, this be rescheduled. Council Member Glover asked what Mr. Caustin thought about the citizens buying the property, assessing parcels, and voting on this issue. Mr. Caustin believed that this should be brought to a vote of the people, but they need to know what the property is going to be and what it is worth, especially since the City only wants the vacant lot. Council Member Glover expressed the opinion that this could only be done if the citizens are willing to pay for it because the City cannot indebt itself this way. She noted that the City is not a realtor and does not buy and sell off pieces of property. Mayor Adams noted that the map is inaccurate since the RV park stems into the vacant lot, making the acreage smaller than what is shown. Further, the boat ramp operation also encroaches more to the south. Ray Carpenter indicated that he emailed Council and the Daily Pilot regarding the Pilot's question relative to whether the hotel should be built. He stated that he was under the opinion that this was still up for a vote. Mayor Adams explained that no vote is necessary for the entitled 275 room hotel and that a leaseholder can build that with virtually no input from the City. He noted that this has not happened for over ten years since the owners elected not to build it, but reported that they came to the City last year to change the entitlement. Mr. Carpenter believed that the growth in the City since 1962 has been helpful for the City; however, another hotel is nothing more than private people wanting to put up another hotel. He asked if the City really needs this and asked about the traffic congestion. He also noted that the Balboa Bay Club is already adding over 200 rooms to its property. He reported that the room occupancy in the hotels has decreased, and asked how many hotels the City is going to allow. Further, he wanted to know if the needs of the current hotel owners have been considered. Mr. Carpenter stated that long time residents keep seeing growth and it always comes from people who just want to make a profit and do not care how the citizens feel. Mayor Adams clarified that all of the City's traffic models and forecasts have the rooms at the Balboa Bay Club and the 275 rooms at the Dunes built into its long range planning. He stated that the entitlement is outside the City's jurisdiction since the County is the custodian of the land, but noted that the property is public land. He stated that the leaseholder went to the County 18 years ago requesting a master plan which included a large hotel; however, the City voiced its concerns and a compromise was reached through a settlement agreement. Mayor Adams reported that Council has received a lot of letters on this subject and people feel that, if the City intervenes and took over the lease, this could be the City's chance to make the hotel entitlement disappear. He emphasized that this is why Council is discussing this. Volume 54 - Page 471 City of Newport Beach Study Session Minutes September 25, 2001 INDEX Mr. Carpenter asked if the traffic generated from the additional apartments along MacArthur Boulevard were taken into consideration. Mayor Adams confirmed that all the development that occurs, which is entitled by the property owners, has been factored into the City's General Plan. He stated that the City has a roadway system that is theoretically built to accommodate development. Mayor Pro Tem Ridgeway reported that the settlement agreement does give the City jurisdiction over the property. Elaine Linhoff, 1760 E. Ocean Boulevard, believed that, if a bond election was held 1.5 years ago to buy the Dunes property, it probably would have passed by 67% just like Greenlight because the Dunes was what people thought about when they were thinking about Greenlight. She added that, if the vacant lot is kept as a park, she cannot see how it is going to be causing much more traffic than the City has now. Council Member Glover asked Ms. Linhoff if she would be in favor of placing this issue on the ballot. Ms. Linhoff believed that she would be in favor of this but does not want to commit herself. She stated that, in order to purchase the land, the City would need to do some creative financing to keep the price down because people may not want to assess themselves for an astronomical amount. She expressed the opinion that the City wastes money in other places, but when it is time to buy open space, the people have to pay for it. In response to Mayor Pro Tem Ridgeway's previous statement, Ms. Linhoff indicated that, when she was petitioning for Greenlight, the Peninsula residents were upset about the Dunes. Mayor Pro Tem Ridgeway clarified that he feels everyone on the Peninsula cares about the quality of life in the City; however, he is not sure if they are prepared to pay for the next 15 years to allow a bond issue for a passive park or an open space area on the other side of the Bay. He emphasized that his position as an elected official is to look at the City at- large, not just his district. Robert Gleason, Newport Dunes, reported that they began the public process of selling this around the end of July, first part of August. He indicated that it was never true that there was no cutoff date, but it was only true that they did not establish a specific cutoff date. Regarding net income on the property, he reported that the numbers that were used were from financial statements prepared previously with adjustments for corporate charges, non - project overhead, and other non -cash adjustments, and noted that the net cash flow is actually about $2.9 million. Mr. Gleason stated that the PC District Plan that has been shown tonight was the plan that was developed during the application process for the hotel. He noted that, in the end, it was not adopted in that form and the current hotel parcel is actually about 15 acres, not 30 acres. He added that the County approval for a lease transaction would be governed under the terms of the lease. Council Member Bromberg asked Mr. Gleason if he was aware of what the City would need to go through to even consider becoming a bidder and questioned the October 15 cutoff date. Mr. Gleason explained that the date Volume 54 - Page 472 City of Newport Beach Study Session Minutes September 25, 2001 INDEX was set due to the current marketing efforts that have happened over the last 60 days and the amount of interest generated in the property. Steve McKenzie, East Hill Realty in Century City, stated that they were engaged by the Evans family to bring this property out to the market and expose it to whatever complement of investors there may be that would be ready, willing, and capable of purchasing the property under the terms, conditions, and timeframes that were favorable to them as a seller of an asset in the free market. He indicated that they did this and that it is their judgment that, based on the large number of inquiries they have received and the number of people who have reviewed detailed offering materials that were also made available to the City, they would be in a position by mid - October to receive initial bids. He indicated that, once the bids are received, they will be reviewing them with their client and deciding which bids merit further consideration. He noted that this is a typical process. He emphasized that they did not start this process with any anticipation that the best use for the site would be the conversion to a municipal park. He stated that they welcome any offer and will discuss them with their client. Mr. McKenzie clarified that the County considers Newport Dunes as one leasehold premises and is not something that is subdivided, pointing out that the lease's definition of "premises" is a single premise. However, he noted that, with good lawyers, time, and money, a subdivision may be possible. Council Member Glover noted that, even if this goes before a vote of the people, it could not take place until November 2002 because the City probably will not have sufficient information to put this on the ballot in March 2002. She asked if this is viable or if they would not know until October 15. Mr. McKenzie indicated that this is a decision the client would have to make; however, their advice would be that the election would be a passage of time that inherently carries risks that their client will not be well advised to undertake without compensation. Council Member Glover asked if it could take several years to get a viable offer on something of this nature with multiple uses. Mr. McKenzie indicated that they anticipate that it would only take until the first week of November for them and their client to determine who the most attractive bidder is and then present that party to the County of Orange for approval. He stated that the County has 45 days to process the approval and believed that a qualified party can line up financing during that 45 day period and be capable of closing sometime in the first quarter of 2002. He indicated that a wide variety of investors are looking at this due to the present mixed use of the site. In response to Council Member Proctor's question, Mr. McKenzie indicated that they did not set a minimum bid amount and are working on a sealed bid process. Council Member Bromberg stated that he feels a bit guilty asking for a study session on this item because Council's time might have been wasted. He indicated that the City could do nothing or agendize this for the next meeting to determine whether Council wants to form a committee to conduct a feasibility study. He suggested that the City do nothing at this point and wait until shortly after October 15 to contact the Dunes to determine whether they are interested in extending that time period, adding that the Volume 54 - Page 473 City of Newport Beach Study Session Minutes September 25, 2001 BI City should not have to pay for them to extend the date for about six months. Mayor Adams added that, if a grassroots group came to Council with an initiative, the City could put it up for a special election. Council Member Bromberg pointed out that they probably could not do it in three weeks. Mayor Pro Tem Ridgeway believed that there is not going to be a groundswell for an initiative and, even if there was, the City cannot interfere with contractual rights. He stated that he will not support anything that may interfere with these rights. Council Member Proctor expressed the opinion that this should be agendized and taken to the next level which includes a feasibility and cost study so that Council has hard data in front of them. He stated that Council owes that to the citizens, especially since there is a lot of misinformation. He emphasized that this is a settlement agreement based on a lawsuit from 18 years ago. Regarding the 15 acre site, Mr. Caustin reiterated that the EIR indicated that the property was not financially viable and that they needed timeshares in order to get financing. He believed that the land is currently zoned open space and that they would need to do a General Plan Amendment in order to build the hotel. Mr. Bludau believed that there is still value in Council having a discussion about this during Closed Session. Mr. Burnham clarified that Council cannot decide in Closed Session to hear the matter at the next Council meeting, but any member of Council can ask that the matter be brought back on a regular agenda. Mr. Bludau reported that, after the Closed Session agenda was posted, he was informed by representatives of the Newport Dunes that they would only accept offers for the leasehold interests that were submitted on or before October 15, 2001. He stated that, assuming that Council is interested in submitting a bid, the City would need to commence negotiations with the Newport Dunes representatives well before the next Council Meeting. Accordingly, he believe that there is a need to discuss the possible acquisition of the Newport Dunes lease in Closed Session. He reported that, according to the City Attorney, the proper procedure is for a member of Council to move that the acquisition of the Newport Dunes lease be added to the Closed Session agenda. This motion should be accompanied by a finding that there is a need to take immediate action in Closed Session and that the need arose after the agenda was posted. Motion by Mavor Pro Tern Ridgeway to move that the acquisition of the Newport Dunes lease be added to the Closed Session agenda. Further, he stated that there is a need to take immediate action in Closed Session and that the need arose after the agenda was posted. The motion carried without objection. BALBOA VILLAGE IMPROVEMENT PROJECT FUNDING OPTIONS. In response to City Manager Bludau's question, Administrative Services Director Danner stated that it is not imperative that this item be discussed Volume 54 - Page 474 INDEX C -3333 Balboa Village Improvement Project Funding City of Newport Beach Study Session Minutes September 25, 2001 today. Mayor Adams suggested taking this up at the next study session. PUBLIC COMMENTS — None. ADJOURNMENT— 5:45 p.m. The agenda for the Study Session was posted on September 19, 2001, at 3:00 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 54 - Page 475 INDEX [M] CITY OF NEWPORT BEACH City Council Minutes h Regular Meeting D September 25, 2001 - 7:00 p.m. Ascr INDEX STUDY SESSION — 4:10 p.m. CLOSED SESSION — 6:00 p.m. A. RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING B. ROLL CALL Present: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Absent: None C. CLOSED SESSION REPORT — Mayor Adams reported that the City Council discussed the Dunes lease in Closed Session, as well as earlier in the day at the Study Session. He announced that the City Council has decided to wait until October 15, 2001, before evaluating the City's options. D. PLEDGE OF ALLEGIANCE — Council Member Bromberg. PERFORMANCE OF "THE STAR SPANGLED BANNER" BY THE BALBOA BACHELORS E. INVOCATION — Pastor Joey Rozek, Calvary Chapel of Costa Mesa. F. PRESENTATION Presentation by Mayor Adams of Proclamation to Fire Chief Riley proclaiming October 7 — 13, 2001, as Fire Prevention Week and Sunday, October 7, 2001, as Day of Remembrance and Reflection for the firefighters who perished in the World Trade Center attack. Fire Chief Riley thanked the citizens of Newport Beach for their support. He stated that the Fire Department is accepting donations for the New York City Firefighters 911 Disaster Relief Fund. He announced that Public Safety Day will take place on October 7, 2001, from 10:00 a.m. to 3:00 p.m., at the Fire Station next to the Police Department. Mayor Pro Tern Ridgeway urged everyone to attend the event. Presentation by Mayor Adams of Plaques of Appreciation to outgoing Board and Commission members (contd. from 9/11/01). Plaques were announced for Don Gregory who served on the City Arts Commission from July 1, 1999 to July 10, 2001; presented to Lila Crespin who served on the City Arts Commission from November 22, 1999 to July 10, 2001; and announced for Donald Pfaff who served on the Parks, Beaches & Recreation Commission from Volume 54 - Page 476 City of Newport Beach City Council Minutes September 25, 2001 July 1, 1997 to July 10, 2001. G. NOTICE TO THE PUBLIC INDEX H. CITY COUNCIL ANNOUNCEMENTS OR MATTERS WHICH COUNCIL MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT -MON- DISCUSSION ITEM): Mayor Adams stated that following the City Council meeting of August 28, 2001, his behavior regarding the motion for reconsideration on the appointment to the Board of Library Trustees was questioned by a citizen. Mayor Adams explained that nothing improper happened and City Council members do have the ability to change their vote. He stated that a City Council Ad Hoc Appointments Committee reviewed the applications for the vacancy, conducted interviews and narrowed the list down to two candidates for City Council consideration. Mayor Adams stated that the votes of the Committee members at the City Council meeting affected his decision. Mayor Adams requested that the Study Session of November 13, 2001, include a report and discussion on contracting for City services. He stated that his request is prompted by a letter from Phil Arst, questioning if the City is being run as efficiently as possible. Council Member Proctor announced that the Assembly passed SB124, Senator Johnson's Bill, which allows the City to purchase the CalTrans West property at the same price that it was sold for, 35 years ago. He stated that the next step is to gain the Governor's support. Council Member Proctor stated that, as a part of the Environmental Impact Report (EIR), the County is mandated to present the facts regarding the E1 Toro Airport project. He explained that kiosks have been created and City staff was directed to investigate locations for the kiosks, including Fashion Island. City Manager Bludau reported that he spoke with a staff member with The Irvine Company and was told that The Irvine Company would not allow a kiosk on its property due to the controversy surrounding the E1 Toro Airport project. Council Member Proctor directed staff to find other locations. Council Member Heffernan suggested that the Central Library be looked at as a potential location. Council Member Bromberg requested that the City's disaster plan be presented to the City Council at either a future Study Session or as a staff report. He stated that the City Council members should be clear on their role in the event of a significant disaster in the City. Council Member Bromberg stated that he participated in the Race for the Cure held on Sunday, September 23, 2001, on a team put together by the City to celebrate the life of Rosalind Williams. Council Member Bromberg requested that a proposed Council policy be developed regarding fundraising and that it should consider the donation of City Volume 54 - Page 477 City of Newport Beach City Council Minutes September 25, 2001 I. services for such events. Council Member Glover recalled that the City Council did approve the donation of City services to facilitate the Race for the Cure. Council Member Glover requested that Senator Ross Johnson be honored at a future City Council meeting. She stated that the City should show its appreciation for all he has done for the City and as a Senator. Council Member Heffernan requested that, in view of the events that have occurred recently and the possibility for contamination of water supplies, an update be provided to the City Council regarding the covering of the San Joaquin Hills reservoir. City Manager Bludau stated that it is a request at the highest level with Congressman Cox. Additionally, he stated that staff has taken steps to improve the security of the reservoir. CONSENT CALENDAR READING OF MINUTES /ORDINANCES AND RESOLUTIONS 1. Item removed from the Consent Calendar by a member of the audience. 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. RESOLUTION FOR ADOPTION 3. RESOLUTION NO. 2001 -78 TO RESCIND CURRENT RESOLUTION NO. 91 -100, PARKING RESTRICTIONS ON BAY AVENUE (contd. from 9111101). Adopt Resolution No. 2001 -78 to rescind Resolution No. 91 -100, which established a No Parking /Tow- Away Zone on the northerly side of Bay Avenue between Palm and Adams Streets on Fridays and Saturdays between the hours of 6:00 p.m. and midnight. 4. WEST NEWPORT SEWER MAIN REPLACEMENT PROJECT — AWARD OF CONTRACT (C -3453) (contd. from 9111101). 1) Approve the plans and specifications; 2) adopt Resolution No. 2001 -79 affirming the emergency bidding process for the West Newport Sewer Main Replacement Project (C -3453) with a minimum of five affirmative votes approving the process per Section 1110 of the City Charter; 3) award the contract (C -3453) to A.D. General Engineering for the total bid price of $114,540 and authorize the City Manager to execute the contract; 4) establish an amount of $15,000 to cover the cost of unforeseen work; and 5) authorize a budget amendment (BA -010) transferring $150,000 from the unappropriated Wastewater Fund Balance to Account No. 7531- C5600292. Volume 54 - Page 478 INDEX Res 2001 -78 Parking Restrictions/ Bay Avenue (85) C -3453 BA -010 Res 2001 -79 West Newport Sewer Main Replacement (38/40) City of Newport Beach City Council Minutes September 25, 2001 5. AMENDMENT TO RESOLUTION ESTABLISHING ECONOMIC DEVELOPMENT COMMITTEE. Adopt Resolution No. 2001 -80 amending Resolution No. 98 -17 to clarify the purpose and responsibilities of the Economic Development Committee. 6. RESOLUTION ESTABLISHING THE NEWPORT COAST ADVISORY COMMITTEE (NCAC). 1) Adopt Resolution No. 2001 -81 creating the Newport Coast Advisory Committee; and 2) direct the City Clerk to put out a call for applicants for membership to the Committee. ORDINANCE FOR ADOPTION 7. NEW SUBDIVISION CODE: CODE AMENDMENT 2001 -002 (contd. from 9/11/01). Adopt Ordinance No. 2001 -18. CONTRACTS AND AGREEMENTS 8. Item removed from the Consent Calendar by Mayor Adams. 9. CONSTRUCTION MANAGEMENT SERVICES FOR BALBOA VILLAGE IMPROVEMENTS, PHASE 1 (C -3333) (contd. from 9/11/01). Approve a $361,100 Professional Services Agreement with Harris & Associates to provide construction management, inspection, and materials testing during Phase 1 construction, and authorize the Mayor and City Clerk to execute the agreement. 10. MAIN BEACH SEWER FORCE MAIN REPLACEMENT — AWARD OF CONTRACT (C -3296) ( contd. from 9111101). 1) Approve the plans and specifications; 2) award a contract (C -3296) to GCI Construction, Inc. for the total bid price of $328,690 and authorize the Mayor and the City Clerk to execute the contract; and 3) establish an amount of $30,000 to cover the cost of unforeseen work. 11. 2001 -2002 SIDEWALK, CURB AND GUTTER REPLACEMENT — AWARD OF CONTRACT (C -3427) ( contd. from 9111101). 1) Approve the plans and specifications; 2) award a contract (C -3427) to C.J. Construction, Inc. for the total bid price of $117,262.50, and authorize the Mayor and the City Clerk to execute the contract; and 3) establish an amount of $11,000 to cover the cost of testing and unforeseen work. 12. PACIFIC COAST HIGHWAY SIDEWALK FROM CAMEO SHORES ROAD TO CITY LIMIT (C -3148) — COMPLETION AND ACCEPTANCE ( contd. from 9111101). 1) Accept the work; 2) authorize the City Clerk to file a Notice of Completion; 3) authorize the City Clerk to release the Labor and Materials bond 35 days after the Notice of Completion has been recorded in accordance with applicable portions of the Civil Code; and 4) release the Faithful Performance Bond one (1) year after Council acceptance. I RIP 17D11 Res 2001 -80 Economic Development Committee (EDC) (24) Res 2001 -81 Newport Coast Advisory Committee (NCAC) (24) Ord 2001 -18 Subdivision Code (68) C -3333 Balboa Village Improvements/ Phase 1 (38) C -3296 Main Beach Sewer Force Main Replacement (38) C -3427 2001 -2002 Sidewalk, Curb and Gutter Replacement (38) C -3148 Pacific Coast Hwy Sidewalk (38) 13. APPLICATION TO RELOCATE A CURB OPENING AT 201 I EPN2001 -0297 APOLENA AVENUE ON BALBOA ISLAND (EPN2001 -0297) 201 Apolena Ave/ Volume 54 - Page 479 City of Newport Beach City Council Minutes September 25, 2001 INDEX Volume 54 - Page 480 (contd. from 9111101). Approve the application subject to an Curb Opening Encroachment Permit from the Public Works Department. (65) 14. CONTRACT WITH THE UNIVERSITY OF CALIFORNIA: C -3479 WATER QUALITY TESTING IN STORM DRAINS AND Water Quality TRIBUTARIES TO NEWPORT BAY (contd. from 9111101). Testing in Authorize the Mayor to execute a $36,179 sole- source contract with the Storm Drains and Regents of the University of California for the testing of storm drains Tributaries to and tributaries to Newport Bay for the presence of human viruses and Newport Bay bacteria. (38) 15. NEWPORT CENTER FIRE STATION NO. 3 MECHANICAL C -3385 UPGRADE AND RESTROOM ADDITION (C- 3385). 1) Approve the BA -009 plans and specifications; 2) dismiss the protest of Construct 1 One Newport Center Corp. as unsubstantiated; 3) award a contract (C -3385) to GK Fire Station No. 3 Construction, Inc. for the total bid price of $224,900 and authorize the (38140) Mayor and the City Clerk to execute the contract; 4) establish an amount of $20,100 to cover the cost of testing and unforeseen work; and 5) authorize a budget amendment (BA -009) appropriating $23,631 from General Fund reserves in Account No. 7271- C2320527. MISCELLANEOUS ACTIONS 16. RECOMMENDATION FROM GENERAL PLAN UPDATE General Plan COMMITTEE ON COMMUNITY OUTREACH VISION FESTIVAL Community (contd. from 9111101). Accept the recommendation of the General Outreach Plan Update Committee and set the General Plan Vision Festival for Vision Festival January 12, 2002. (68) 17. DONATION OF SURPLUS PROPERTY (contd. from 9111101). Donation of Approve the donation of the property to Share Our Selves Corporation Surplus Property and direct staff to arrange for the property to be made available for (73) pick -up at their convenience. 18. COUNCIL APPROVAL OF WEBLINK REGARDING BALBOA C- 3333/Weblink/ VILLAGE IMPROVEMENT PHASE I TO CITY'S MAIN WEB Balboa Village PAGE (contd. from 9111101). Approve the informational link to the Improvement City's web page. (38) 19. REQUEST TO INITIATE A GENERAL PLAN AMENDMENT TO GI 2001 -001 INCREASE THE DEVELOPMENT ALLOCATION WITHIN THE PA 2001 -157 AIRPORT AREA 2 -7 (STATISTICAL AREA L-4), NEWPORT Camco Pacific/ PLACE BLOCK G & H TO PERMIT A 1,500 SQUARE FOOT 1811 Quail Street ADDITION TO AN EXISTING OFFICE BUILDING LOCATED AT (45) 1811 QUAIL STREET [CAMCO PACIFIC (PA2001 -157)] (contd. from 9111101). Initiate the amendment to the General Plan, Land Use Element as recommended by the Planning Commission by approving GI 2001 -001. 20. SURETY REDUCTION FOR CONCRETE ALLEY EXTENSION Encroachment STRUCTURE ADJACENT TO 405 GOLDENROD AVENUE, Permit 2001.110 CORONA DEL MAR (N2001 -110). 1) Approve the improvement 405 Goldenrod Ave. Volume 54 - Page 480 City of Newport Beach City Council Minutes September 25, 2001 plans and specifications for the concrete alley extension constructed in conjunction with Encroachment Permit No. 2001 -110; 2) authorize the City Clerk to release the payment bond certificate guaranteeing faithful performance in the amount of $29,000 (Bond No. 0719033128) upon receipt of a reduced surety in the amount of $8,000; and 3) authorize the City Clerk to release the payment bond certificate guaranteeing payment of labor and materials (Bond No. 0719033136). 21. RELEASE OF FAITHFUL PERFORMANCE BOND FOR RESUBDIVISION NO. 866. Authorize the City Clerk to release the Faithful Performance Bond (Bond No. 3SM 709 229 00). 22. ADOPTION OF A PROGRAM FOR DISADVANTAGED BUSINESS ENTERPRISE (DBE) REQUIREMENTS FOR FEDERAL FISCAL YEAR 2001 -2002. 1) Approve the DBE Program for the City of Newport Beach for Federal Fiscal Year beginning October 1, 2001 and ending September 30, 2002; and 2) authorize the Public Works Director to submit the approved DBE Program to Caltrans staff. 23. Item removed from the Consent Calendar by a member of the audience. 24. APPROVE BUDGET AMENDMENT IN THE AMOUNT OF $149,645 TO TRANSFER FUNDS FROM THE LIBRARY LIABILITY ACCOUNT AND THE REIBER FUND TO PROVIDE LITERACY SERVICES, LIBRARY AND COLLECTION DEVELOPMENT, IMPROVEMENTS TO THE CENTRAL LIBRARY CHILDREN'S ROOM, AND MATERIALS FOR THE BALBOA BRANCH LIBRARY. Approve BA -007. 25. DISTRICT 7 APPOINTMENT TO ENVIRONMENTAL QUALITY AFFAIRS COMMITTEE. Confirm Councilmember Heffernan's appointment of Richard Oberreiter as the member for District 7, as amended from the Agenda which stated "at -large member ". Motion by Mayor Pro Tem Rid eway to approve the Consent Calendar, except for those items removed (1, 8 and 23), and noting the amendment to Item No. 25. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None J. ITEMS REMOVED FROM THE COL SENT CALENDAR MINUTES OF THE ADJOURNED REGULAR AND REGULAR MEETINGS OF AUGUST 28, 2001, ADJOURNED REGULAR AND Volume 54 - Page 481 INDEX (65) Resubdivision 866 (64) Disadvantaged Business Enterprise (DBE) Program (74) BA -007 Library Fund Transfer (40150) Environmental Quality Affairs Committee (EQAC) (24) City of Newport Beach City Council Minutes September 25, 2001 REGULAR MEETINGS OF SEPTEMBER 11, 2001 [CANCELLED MEETINGS]. Jim Hildreth, 120 The Grand Canal, thanked the City Clerk for the accuracy of the minutes. Motion by Council Member Glover to waive reading of subject minutes, approve as written and order filed. The motion carried by the following roll call vote Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None 8. BUCK GULLY PUMP STATION REHABILITATION (C -3368) — AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT WITH THE KEITH COMPANIES (contd. from 9/11/01). Mayor Adams stated that he had concerns about the City engaging a consultant to do design work on a single pump station for approximately $86,000, and then increasing that amount by $39,000. He stated that he thought it was customary for agencies to have thresholds for increases to contracts. Mayor Adams stated that he understood the justifications for the contract under discussion, but requested that staff look at developing a policy that addresses such significant increases in contracts. Motion by Mayor Pro Tern Ridgeway to approve Amendment No. 1 to The Keith Companies for additional design services for Buck Gully Pump Station Rehabilitation and upgrades to the Carnation and Linda Isle pump stations and to authorize the Mayor and City Clerk to execute the amendment for a fee of $39,220. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None 23. AFFORDABLE HOUSING TASK FORCE RECOMMENDATIONS ON PROPOSALS FOR SENIOR AFFORDABLE HOUSING. Paul Fruchbom, 1132 Ebbtide, stated that his company, KDF Communities, LLC, responded to the Request for Proposals (RFP) to provide senior affordable housing in the City. He stated that KDF's submittal included a proposal for a KDF "City Partners" Housing Volume 54 - Page 482 INDEX C -3368 Buck Gully Pump Station Rehabilitation/ Amendment 1 (38) Senior Affordable Housing (68/87) City of Newport Beach City Council Minutes September 25, 2001 INDEX Program where KDF would assist the City in developing common objectives and attempt to execute them. Mr. Fruchbom suggested that the City enter into a development agreement with KDF to look at the options that might be available. He asked that the Affordable Housing Task Force meet with his firm to see if something could be executed in the City. Motion by Mayor Pro Tem Ridgeway to decline all proposals; direct staff to continue exploring use of in -lieu fees to provide affordable housing; and refer the item to the Affordable Housing Task Force for a recommendation. Council Member Glover noted the units in the City that were built in the 1950's, 1960's and 1970's, and stated that they provide viable housing, but have the possibility of being torn down. She requested that staff provide an inventory of such apartments in the City and provide information on how they might be preserved and used for senior housing. Council Member Glover expressed her concern for the elderly people currently living in the City who may not be able to continue doing so. The motion carried by the following roll call vote Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None K. PUBLIC COMMENTS Robert Hanley, 1601 Indus Street, Santa Ana Heights, stated that he is working on a reunion for the 90 °h Bomb Group, known as the Jolly Rogers. He stated that the reunion is being scheduled for 2003 and he is looking to the City for some financial assistance. Mayor Adams suggested that Mr. Hanley also contact the Newport Beach Conference and Visitors Bureau. Mayor Pro Tem Ridgeway additionally suggested that Mr. Hanley work with the City Manager and the American Legion. Jim Hildreth, 120 The Grand Canal, stated that, "it is disturbing to note that the change in City Council Policy A -10, adopted on August 28, 2001, is regarded as retroactive. Equally disturbing is the current attitude of Mr. Bludau, the City Manager, and Mr. Burnham, the City Attorney, in their willful refusal to address any of my inquiries concerning the actions of Mr. Melum's office. This is evident in Mr. Burnham's letter dated September 12, 2001, in which he ignores the possibility of misdirected mail from Mr. Melum's office, which may have been done purposefully. Letters have been found in envelopes addressed to 120 Grand Channel. He ignores the safety aspect of the Volume 54 - Page 483 City of Newport Beach City Council Minutes September 25, 2001 INDEX lhty- installed ladder in The Grand Uanal, which is inadequate for boat access. Mr. Bludau has repeatedly stated that the City does not have possession of the documents I request. By this I must assume that an outside agency or, under contract, a private company or corporation has custody of them. I hope the proper procedure on how to obtain copies of these requested documents will be divulged to me. Note that my major concern for the residential pier /mooring location at the southwest end of The Grand Canal has been and always will be a matter of safety. Mr. Melum's office had a platform and steps structure, adequate for safe boat access and designed for use on The Grand Canal, removed and replaced with an inadequate City - installed vertical metal ladder. I am reminded that on February 2, 2001, Mr. Bludau informed me that coverage for my use for this City - installed ladder does not exist in the City's insurance policy. Am I the only person excluded from the insurance policy for the City? Could either general or strict liability insurance coverage exist for others who use this City - installed ladder? It seems that the City - installed ladder may lack any liability insurance coverage and members of the community should at least be aware of this and a `Use at Your Own Risk' sign should be installed and secured to the ladder." Mayor Adams stated that the City Council will not be directing staff to do anything differently than they already are. • Phil Arst, spokesperson for the Greenlight group, stated that the map that is being inserted in the ballot pamphlet for Measure G is unduly biased and favors the developer. He stated that the Elections Code does not authorize the insertion of such a map. He added that the City Attorney has recommended using a clause from a statewide election set of rules, but is not following the entire clause. Mr. Arst stated that if the map is to be included, a rebuttal should be allowed. Mr. Arst presented a map that would provide the information that the voter needs to make their decision, such as the intersections that will have long -term degradation and the distance of the project from residential areas. Mr. Arst urged the City Council to allow a fair election and remove the map from the pamphlet. Mayor Adams deferred the matter to the City Attorney and City Clerk's offices to respond to the comments made by Mr. Arst. City Attorney Burnham stated that the City Clerk is the elections official and is responsible for preparing and submitting the materials that are presented to the voters. He added that the City Council does not have the authority to intervene. Council Member Glover stated that she had no intention of undermining the City Clerk on her decision. She added that with the success of the Greenlight measure, she didn't see why they would have a problem gaining support to oppose the project. Per Council Member Heffernan's question, City Clerk Harkless explained that the map was provided by the Kell Company. She stated that when a map was discussed as being included in the ballot Volume 54 - Page 484 City of Newport Beach City Council Minutes September 25, 2001 INDEX pamphlet, she requested the map from the Koll Company since they were responsible for bearing the hard costs. Council Member Proctor confirmed with City Attorney Burnham that the City cannot legally address the issue and that it is the court that would take up such challenges. Council Member Bromberg asked if there was a standard for when information is included in the ballot pamphlet. City Attorney Burnham stated that he isn't aware of one, but that it is the court that has the authority to remove information. Council Member O'Neil pointed out that Mr. Arst can take his matter to court if he disagrees with the City Clerk's decision. Mr. Arst stated that he would prefer not to be adversarial, but thinks that Greenlight should have been consulted prior to the decision being made. Mayor Adams stated that the City is learning how to apply Greenlight. City Manager Bludau stated that the election responsibilities are vested with the City Clerk to prevent influence from the City Council or the public. Peggy Fort, 416 Via Lido Nord, representing the Balboa Village Business Improvement District (BID), stated that the BID is working in conjunction with City staff on a number of very exciting marketing projects for the Balboa Village area. She stated that an implementation poster should be completed this week and will be used in an outreach campaign. She additionally announced that a new website would be launched in October at www.BalboaNewnortBeach.com. • Gay Wassall - Kelly, 409 E. Edgewater, President of the Balboa Merchants Owners Association, invited everyone to the PT Cruiser Car Show to be held on September 29 and 30, 2001, in the Balboa Village. She presented t- shirts and coupon books to the City Council. • Manley Bland, PT Cruiser Club President, played a recording of the radio ad being heard on K -EARTH radio station for the event, California Kruisin' Days 2001. Mr. Bland stated that it had been a pleasure working with the Balboa Merchants Association and the City. Council Member Ridgeway stated that he was planning to attend the event and he wished them the very best. He added that work on the Balboa Village Improvement Plan would begin in mid - October, and this would be a precursor to that project. • Russell Niewiarowski, Santa Ana Heights, President of The New Millennium Group (TNMG), announced that TNMG would be giving its first public presentation in Newport Beach. He stated that if everyone stands united, an airport at E1 Toro can be secured. He stated that TNMG is being applauded for its efforts to bring a reasonable alternative airport to Orange County, one that is downsized and Volume 54 - Page 485 City of Newport Beach City Council Minutes September 25, 2001 L. 0 utilizes the V -Plan. He stated that he doesn't feel that the Just the Facts campaign presents the facts. He encouraged everyone to attend the TNMG presentation on September 27, 2001, at the Lido Island Yacht Club. Lastly, Mr. Niewiarowski presented the Reasonable Alternative Airport Initiative and announced their website at www.ocxeltoro.com. Patrick Merritt, 134 47th Street, stated that he was told by the Planning Department earlier in the day that his condominium is a duplex, and not a condominium. He stated that it went through the entire conversion process and is listed properly in the title as a condominium, but the City is requiring that he start the conversion process over. He asked if something else could be done. Mayor Adams suggested that Mr. Merritt meet with City Manager Bludau. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES Council Member Heffernan reported that the Telecommunications Committee met recently and has three objectives. He stated that in January 2002, the two existing cable franchises', Adelphia and Cox, contracts expire. He stated that the Committee will be doing a needs analysis in preparation for the expected ten -year extension of the contracts, to find out what the residents want. Secondly, Council Member Heffernan stated that the Committee is planning to look into a potential regulation for limiting utility and cable devices throughout the City. Lastly, he stated that the Committee is looking at regulations for right of way use. PLANNING COMMISSION AGENDA AND ORAL STATUS REPORT 26. PLANNING COMMISSION AGENDA FOR SEPTEMBER 6, 2001. [MEETING CANCELLED] (contd. from 9111101). Planning Director Temple stated that the Planning Commission meeting of September 6, 2001, was cancelled due to lack of agenda items. 27. PLANNING 2001. AGENDA FOR SEPTEMBER 20, Planning Director Temple stated that the Planning Commission meeting of September 20, 2001, contained four items and that two of the items were continued to the Planning Commission's meeting of October 4, 2001. She stated that the one of the items continued involved a use permit and the other an offsite parking agreement. Planning Director Temple stated that the Planning Commission did review an item regarding a variance to exceed the basic height limit on Ocean Boulevard, with the primary issue being that the structure's original design exceeded the curb height limit. The applicant Volume 54 - Page 486 I SLIP 11 D11 Planning (68) Planning (68) City of Newport Beach City Council Minutes September 25, 2001 redesigned the project to meet the curb height limit and the Planning Commission approved the variance. Planning Director Temple stated that the Planning Commission also took action on a use permit for a preschool on Ford Road to add an additional classroom. She reported that the Planning Commission approved the application. Council Member Heffernan asked what the reasoning was for reducing the front yard setback on the property on Ocean Boulevard. Planning Director Temple stated that in this part of Ocean Boulevard, nearly every home has been authorized to encroach into the ten -foot front yard setback due to a 40 -foot parkway that sets the property lines back from the curb lines. Council Member Glover asked about an item on the agenda regarding Kings Road that was approved by the Planning Commission and before the end of the meeting, but after the applicant had left, the decision was changed. Planning Director Temple stated that the change continued the item to the Planning Commission meeting of October 4, 2001. She added that the rules and procedures of the Planning Commission allow for motions for reconsideration. Council Member Glover stated that it is not good City policy to make a decision on a project and then revote on it after the applicant has left. She added that she understands that it is legal, but feels that it is inappropriate. Motion by Council Member O'Neil to receive and file the reports of the September 6, 2001, and September 20, 2001, meetings. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None N. CONTINUED BUSINESS 28. DESIGN STANDARDS FOR MANUFACTURED HOUSING (contd. from 9111101). City Manager Bludau stated that the item was on the agenda at the request of Council Member Glover. Planning Director Temple stated that she and Assistant City Attorney Clauson did a considerable amount of research on design standards for manufactured housing. It was found that the City cannot preclude the installation of manufactured housing in single - family residential neighborhoods, but does have the ability to impose certain restrictions on design requirements. Planning Director Temple stated that the restrictions allow the City to require a minimum quality of design and a Volume 54 - Page 487 INDEX Res 2001 -82 Manufactured Housing (68) City of Newport Beach City Council Minutes September 25, 2001 relatively recent manufacture. She added that she and the Assistant City Attorney would continue to monitor the situation and present modifications to the City Council as they're discovered. Council Member Glover expressed her appreciation for what staff was able to accomplish. She agreed that other communities' regulations should continue to be monitored and any suggested changes brought to the City Council's attention. Motion by Council Member Glover to adopt Resolution No. 2001 -82 initiating an amendment to the Newport Beach Municipal Code The motion carried by the following roll call vote Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None 29. RESOLUTION IN OPPOSITION TO THE DISCHARGE OF PRIMARY TREATED EFFLUENT OFF OF THE ORANGE COUNTY COASTLINE. Mayor Adams stated that Dr. Jan Vandersloot contacted him earlier in the day and suggested a change to the title of the resolution. Assistant City Manager Kiff stated that at the Study Session of July 24, 2001, the City Council discussed whether to support or oppose a possible request by the Orange County Sanitation District (OCSD) to reapply for a third consecutive waiver of the Federal Clean Water Act. He explained that all of the sewage from Newport Beach goes to the City's collection system and then to OCSD sewage treatment facilities, where half of it goes through a primary treatment process and the other half additionally goes through a secondary treatment process. The treated sewage is then piped out approximately 4 '/, miles out into the ocean. Not performing full secondary treatment of the sewage is allowed by the waiver. Assistant City Manager Kiff stated that in July, the City Council referred the item to the Harbor Quality Committee. At their meeting on September 13, 2001, the Harbor Quality Committee adopted a recommendation to forward the proposed resolution to the City Council. Assistant City Manager Kiff displayed an amended resolution, which incorporated the title change suggested by Dr. Vandersloot as well as some additional recommended changes. Council Member Glover asked for more information about who sits on the OCSD Board. Mayor Pro Tern Ridgeway stated that there are 25 voting members on the Board, and that he is one of them. Volume 54 - Page 488 INDEX Res 2001 -83 Discharge of Primary Treated Effluent (51) City of Newport Beach City Council Minutes September 25, 2001 INDEX Council Member Glover asked for Mayor Pro Tem Ridgeway's assessment of the possibility that the Board would oppose the application of the waiver. Mayor Pro Tem Ridgeway stated that the Ocean Outfall Group, which is a group that has been lobbying the cities in Orange County to oppose the application of the waiver, has made tremendous headway. Mayor Pro Tem Ridgeway stated that when the application for the waiver was voted on by the Board three years ago, there were only three votes in opposition. He felt that there would be eight, nine or ten this time, due to the higher level of conscience at the OCSD. Additionally, he felt that with the closure of Huntington Beach two years ago and the unknown results of the tests that are currently being done off the coast, the waiver may not be applied for. Motion by Mavor Pro Tem Ridgewav to adopt amended Resolution No. 2001 -83 opposing the discharge of primary treated effluent off of the Orange County coastline; and direct staff to transmit the resolution to the Orange County Sanitation District, the US Environmental Protection Agency (Region 9), and the California Regional Water Quality Control Board, Santa Ana Region. Council Member Bromberg stated that he has learned quite a bit as a member of the Harbor Quality Committee. He stated that it is interesting to learn what goes through the sanitation pipes, what goes out into the ocean and what can end up on the beaches. He stated that the adoption of the proposed resolution sends a message. He acknowledged those that attend the Harbor Quality Committee meetings. Council Member Heffernan noted that there are 15,000 sewer districts in the United States, only 36 have the waiver from the Environmental Protection Agency (EPA), and the OCSD is the largest district of the 36. In regards to the proposed resolution, Council Member Heffernan asked if the City could also advocate UV disinfection. Mayor Pro Tem Ridgeway stated that it could be made a part of the motion, but the greater message is already sent with the current motion. He stated that there are several methods to remove organic solubles, and added that full secondary treatment does not remove all of the organic solubles. He stated that the OCSD is working hard with the Ocean Outfall Group and the Board to look at alternate methods that may cost less money. Mayor Pro Tem Ridgeway stated that full secondary treatment will probably cost approximately $400 million, plus the operational costs. He stated that the ratepayer would probably see a doubling of their sanitation bill. He added that the OCSD in conjunction with the Orange County Water District voted in April 2001 to recapture approximately 100 million gallons of the effluent per day, perform treatment and inject it back into the groundwater basin. He stated that the inland cities already do full tertiary treatment on the effluent, which also reaches the Santa Ana River and the Orange Volume 54 - Page 489 City of Newport Beach City Council Minutes September 25, 2001 County aquifer. INDEX Doug Cordoff, Seal Beach, stated that Seal Beach has taken a position against the waiver and he expects that many of the inland cities will also. He stated that he doesn't agree that the ratepayer's bill will double with the new treatment, noting that the OCSD is sitting on reserves totaling $554 million. He stated that they've borrowed this money using tax -free bonds and are using the money not to treat sewage or to go to full secondary treatment, but instead they're loaning it out and making a profit. He stated that this is not proper use of the money, and that they have plenty to offset the costs of additional treatment. Dr. Jan Vandersloot, Newport Heights, Founder and Director of the Ocean Outfall Group, which was formed December 2000. He displayed several overhead transparencies showing the extent of the sewage plume and fecal coliform bacteria. He pointed out how closely the plume lies to Newport Beach. He showed transparencies, which represented a thirteen -year period at various depths of water. Dr. Vandersloot stated that the new study being done by the OCSD is unnecessary, since the data already exists. He stated that the Ocean Outfall Group is actually asking the EPA and Regional Water Quality Control Board to reopen the permit based on new information recently discovered from tests done in 1996. He asked for the City Council's support of the effort. Joey Racano, 613 Pecan Avenue, Huntington Beach, Ocean Outfall Group, stated that it is important to realize that the groundwater replenishment system intends to send the micro filter return out the outfall. He stated that it won't increase the amount of sewage, but it will increase the concentration of impurities. Tertiary treatment has been shown to work better on secondarily treated sewage. Mr. Racano asked the City Council to approve the recommended action and oppose the waiver. He stated that a clean ocean is possible and the Ocean Outfall Group will continue with its city -to -city campaign. Council Member Glover stated that it is very important that the Ocean Outfall Group do a city -to -city campaign to educate all of the cities. Dennis Baker, 706 % Begonia, Ocean Outfall Group, stated that Assistant City Manager Kiff's report is excellent and has been presented to other City Councils in the Group's city -to -city campaign. Mr. Baker stated that full secondary treatment is only a step towards full tertiary treatment. He added that he hopes to see total reclamation in his lifetime. He concluded by stating that there are hopes that the Board will oppose the application of the waiver due to the extensive coverage of the topic. Council Member Heffernan suggested that staff find out what level of treatment other oceanfront communities are performing. Mayor Pro Tem Ridgeway stated that Los Angeles County does full Volume 54 - Page 490 City of Newport Beach City Council Minutes September 25, 2001 III III D1Y secondary treatment and are not seeking the waiver. City Manager Bludau added that San Diego County does modified secondary treatment. Greg Jewell, 8622 Laramie Circle, Westminster, Surfrider Foundation member, stated that much of the prosperity of Newport Beach is due to the beach. He stated that the waiver has spawned a sewage plume of approximately 18 square miles and is remarkably close to the beaches. He stated that the OCSD offsets costs and generates revenue by not treating sewage to full secondary standards, while continuing to discharge it into the ocean. He requested that the City Council vote against the renewal of the waiver. Don McGee, 20701 Beach Boulevard, Huntington Beach, stated that some of the inland communities don't understand what the issue has to do with them. He added that the United Kingdom privatized their treatment facilities in 1989 and, although OCSD is not private, they act like they are. He stated that the United Kingdom used to meet only the minimum requirements of their 1976 clean water act, but the death of a child due to contact with fecal coliform contamination at the beach changed the situation. Mr. McGee stated that there are reasons why the OCSD is governed by the Federal Clean Water Act, which requires full secondary treatment, but noted that the OCSD continues to apply for a waiver to allow them to do less than the minimum. He concluded by stating that common decency dictates that the ocean cannot be used as a toilet. Vic Leipzig, Executive Director of Orange Coast Watch, explained that his environmental organization is different in that it is business based and shows the breadth of the issue. He stated that the organization was started about a year ago and recognizes the importance of beach recreation to the Orange County economy. Mr. Leipzig stated that the concern for clean water is not just a coastal issue, but is of concern to residents throughout the County. He stated that his organization will work with the Ocean Outfall Group. Larry Porter, Newport Beach resident, stated that the discharge includes not only bacteria, but also viruses, pharmaceuticals, hormones and endocrine disrupters. He stated that the OCSD needs to include this information in their arguments. He urged the City Council to vote for the recommended action. Jim Colson, OCSD Senior Regulatory Specialist, stated that there are technical and practical reasons why the OCSD requests that the City Council not adopt the proposed resolution. He stated that the OCSD has been monitoring the ocean environment along the shoreline for decades, identifying issues and tackling problems. He stated that the OCSD has an innate understanding and concern for wanting to protect the beaches for recreation, and added that that the data collected has not found that the plume is making its way into the areas where people are recreating. Mr. Colson stated that if it is found that the plume is impacting the shoreline, there are options for treatment. He explained Volume 54 - Page 491 City of Newport Beach City Council Minutes September 25, 2001 that secondary treatment is a biological treatment process and does an adequate job of removing soluble, biological material and some solids. He stated that the waiver only addresses biological oxygen demand and the total suspended solids, and does not alleviate the OCSD from any of its State obligations. He added that secondary treatment is not a form of disinfection and only removes 70% to 90% of the pathogens. Mr. Colson concluded by stating that the OCSD is going to review the data from the studies currently being performed, review the company's strategic planning process and determine what is the most effective way to address any concerns. He stated that not renewing the waiver puts the OCSD in a difficult situation in negotiating with the regulators. Dr. Jeff Armstrong, 1211 E. Culver Avenue, Orange, OCSD Ocean Monitoring Program Scientist, stated that there is no scientific evidence to justify full secondary treatment. He pointed out that requiring the OCSD to increase its treatment process will affect 2.4 million people and need up to $400 million of taxpayer funds. He added that the new treatment would affect more than the ocean environment. He explained that it would also affect the air, land and energy. Dr. Armstrong stated that the issue should be based on the facts and he didn't think that the City Council was getting all of the facts. In conclusion, he stated that the transparencies of the plume shown earlier were misleading. Claudia Owen, Vista Dorado, representing Stop Polluting Our Newport (SPON), stated that SPON is in favor of the resolution and opposed to the waiver. In response to comments made by the OCSD representatives, Council Member Bromberg stated that the City Council is an informed group and does understand the issue. Additionally, he stated that saying that the current treatment is adequate is not good enough. He stated that he wants the best he can get. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None O. CURRENT BUSINESS 30. RESOLUTION AUTHORIZING SUPPLEMENTARY SALARY PAYMENTS TO CITY EMPLOYEES CALLED TO ACTIVE MILITARY DUTY. Motion by Council Member O'Neil to adopt Resolution No. 2001 -84. The motion carried by the following roll call vote: Volume 54 - Page 492 INDEX Res 2001 -84 Supplementary Salary/ Active Military Duty (66) City of Newport Beach City Council Minutes September 25, 2001 Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None 31. OCEAN PIER REHABILITATION (C -3312) — AWARD OF CONTRACT City Manager Bludau stated that the item was not placed on the Consent Calendar due to the amount of the project. He stated that there was only one bid received for the project and it was above the engineer's estimate, but that the City can still make it work due to interest from the Oil Spill Fund. He added that timing is of the essence. Motion by Mavor Pro Tern Ridgewav to award contract (C -3312) to John S. Meek Company, Inc. for the total bid price of $2,699,440 and authorize the Mayor and the City Clerk to execute the contract; establish an amount of $200,560 to cover the cost of testing and unforeseen work; and authorize a budget amendment (BA -008) in the total amount of $823,000 for the following: appropriate Oil Spill Fund interest earnings in the amount of $324,000 to Account No. 7295- C5100565; appropriate $250,000 from the unappropriated balance of the Water Enterprise Fund to Account No. 7501- C5100565; and transfer $249,000 from Ocean Front Walkway Project Account No. 7295- C5100568 to Account No. 7295- C5100565. Council Member Glover asked if the deck on both of the piers would be replaced with concrete. Public Works Director Badum stated that the old concrete would be stripped, the substructure replaced and a smooth surface restored. She confirmed that concrete would be placed on top of the wooden deck. Council Member Glover suggested that cool concrete be used instead of warm concrete. Noting that the bid received was 26% higher than the estimate and only one contractor submitted a bid, Council Member Heffernan asked if the City is concerned about the qualifications of the contractor and their ability to stay on schedule. Public Works Director Badum stated that the John S. Meek Company has done most of the City's pier work over the years and has done good work. He stated that the high bid price was mainly due to changes made by staff during the design process, and added that the marine contractors are a specialized group, with many already working on larger projects in the ports. Mayor Adams asked if there were plans to address the condition of the lifeguard station at the Newport Pier. Public Works Director Badum stated that the lifeguard renovation is a separate project in the Oil Spill Fund. Mayor Adams stated that the area is a main focal point in the area for beachgoers and the current condition of the building is embarrassing. City Manager Bludau stated that it's in this year's Capital Improvement Program. Mayor Adams stated that it shouldn't Volume 54 - Page 493 INDEX C -3312 BA -008 Ocean Pier Rehabilitation (38/40) City of Newport Beach City Council Minutes September 25, 2001 have gotten as bad as Mayor Pro Tem Ridgeway suggested that the pedestrian area at the Newport Pier is also in need of rehabilitation. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Abstain: None Absent: None P. MOTION FOR RECONSIDERATION —None. Q. ADJOURNMENT — at 9:32 p.m. in the memory of our fellow citizens who died in the attack on New York and Washington D.C. The agenda for the Regular Meeting was posted on September 19, 2001, at 3:00 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 54 - Page 494 INDEX