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HomeMy WebLinkAbout01 - 03-12-2002City Council Meeting March 26, 2002 Agenda Item No. 1 CITY OF NEWPORT BEACH City Council Minutes 11���� Study Session D March 12, 2002 - 4:00 p.m. INDEX ROLL CALL Present: Heffernan, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Absent: O'Neil (excused) CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR In regards to Item No. 5, Amendment to Agreement with Sutherland Talla Hospitality LLP, Council Member Heffernan requested that, prior to the evening meeting, staff inform him of what has been granted with regards to the extension of the agreement. 2. WATER QUALITY REPORT ON PUBLIC HEALTH GOALS - COPPER LEVELS. Utilities Director Davidson stated that the report on copper levels was being submitted to the City Council in accordance with Federal and State water regulations, and is required whenever tests indicate that a chemical is above the Public Health Goal (PHG). He explained that some chemicals in the water are monitored according to Maximum Contaminant Levels (MCL's), which are regulated standards used for enforcing water quality. Utilities Director Davidson noted that other chemicals are not regulated and do not have established MCL's. He explained that these chemicals are, instead, expressed by Action Levels (AL's) and PHG's, which are idealistic goals for water quality. Utilities Director Davidson stated that the City does hundreds of chemical tests annually. He reported that copper was the only chemical to exceed the PHG in the City's water system, but that it did not exceed the AL. He additionally noted that copper tests are required to be taken in the homes, which takes the internal corrosion of the plumbing into consideration. He pointed out that the PHG's that are set are not based on comprehensive health assessment analysis, so exceeding them does not require any remedial action by the City. Utilities Director Davidson further explained that PHG's are set at a much greater conservative level for no risk and AL's for no significant risk. He stated that PHG's and AL's are set when no MCL has been established, and that complying with all MCL's assures the consumer that the water is safe to drink. MCL's are set after extensive health studies have been conducted and evaluation of treatment technologies and benefit costs have been completed. He noted that the City is in full compliance with MCL's. Per Mayor Ridgeway's question, Utilities Director Davidson stated that the City's waterlines are made of steel, cast iron, ductile iron and PVC. He added that the service lines from the main lines to the customers' lines are Volume 55 - Page 35 Water Quality Report (89) City of Newport Beach Study Session Minutes March 12, 2002 3. made of copper, and that home is the customer's Utilities Director Davids '/. -inch to 2 -inch. the plumbing from the meter box to the customer's responsibility. Per Mayor Ridgeway's question, in stated that the service lines vary in size from Council Member Glover asked for an explanation of the white spots she's noticed in her teakettle. Utilities Operations Manager Antista explained that they are mineral deposits from residue in the water. City Manager Bludau asked if any tests had been done on the type of residue that comes from plastic PVC lines in homes. Utilities Operations Manager Antista stated that studies are being done, but determinations have not been made yet. Utilities Director Davidson added that water is considered a universal solvent so some leaching occurs with anything it comes into contact with. UPDATE ON DREDGING: UPPER NEWPORT BAY ECOSYSTEM RESTORATION PROJECT, LOWER HARBOR NAVIGATIONAL CHANNELS, AND PRIVATE DOCKS. Using a PowerPoint presentation, Assistant City Manager Kiff stated that the Upper Newport Bay Project is an ecosystem restoration project to restore the bay to its optimal ecosystem and that the United States Army Corps is the City's major federal partner in the project. He stated that the Army Corps is paying 65% of the project total, which is $33 million, and that the other 35% is being paid for by local partners and the State through the passage of Proposition 12. Assistant City Manager Kiff stated that the dredging will remove over two million cubic yards of sediment. He added that the project will take approximately 22 months to complete, is currently in the plans and specifications stage and still needs congressional authorization. He noted that once completed, it is estimated that another dredging project wouldn't be needed for 21 years. Assistant City Manager Kiff displayed two slides, one showing what the bay would look like if there were no dredging for a 50 -year period and another showing the significant and diverse dredging impact that the proposed project is expected to accomplish. Harbor Resources Director Melum displayed an aerial photo showing the main navigational and adjacent channels in the lower harbor. He noted that the Army Corps is responsible for dredging these areas, but that only three projects have been done since the initial project in 1930. Harbor Resources Director Melum added that the Army Corps does perform annual surveys, and that these have indicated that some of the depth is being lost below the Coast Highway bridge. He displayed a map showing this area of shoaling. He further explained that the project would cost between $4 and $5 million, and that the Army Corps has been unsuccessful in receiving the funding. Harbor Resources Director Melum stated that Newport Harbor is considered a low- maintenance harbor, but that the area does need to be addressed. Council Member Glover asked how long the project would take to complete. Harbor Resources Director Melum stated that it should take less than one year, but that the major obstacle would be the design and environmental work that needs to be done. He added that the goal of the project would be Volume 55 - Page 36 INDEX Dredging Update (51) City of Newport Beach Study Session Minutes March 12, 2002 ZIN�• to return that area of the harbor to design depth so that boats would not bottom out. He additionally noted that the dredging project discussed for the upper bay would help the lower bay since less sediment would come into the lower bay and settle. Council Member Glover suggested that user fees possibly be considered for funding the lower bay project. Council Member Heffernan stated that increasing the pier permit fees could also be considered. Mayor Ridgeway stated that the City has a resolution that prohibits private pier owners from renting to others. He noted that the violations in Newport Harbor are very minimal. Mayor Ridgeway stated that the issue has been discussed by the Harbor Committee and is expected to be addressed by the new Harbor Commission. Council Member Heffernan suggested that an assessment be done to determine how many violations are actually occurring. He stated that the work that needs to be done in the harbor needs to be funded. Harbor Resources Director Melum stated that City Council Policy H -1, the Harbor Permit Policy, requires that private dock permittees do the dredging under their docks. He noted that the City did get involved by getting a maintenance permit in 1979, which expedited the dredging permit process for the permittee. He noted that the maintenance permit was renewed in 1989 and again in 2000. Harbor Resources Director Melum displayed an aerial photo showing the areas that were included in the latest permit. He noted that some areas were excluded in the permit due to high levels of contaminants and a requirement for some additional testing. He stated that the tests were done and only one area was found to have unacceptable levels of contaminants. Harbor Resources Director Melum confirmed that all areas, except the one, are now included in the permit. He additionally noted that the Coastal Commission changed a ruling and is also allowing dredging to take place year- round. Council Member Proctor asked for the cause of the contaminants in the one remaining area that is excluded from the permit. Harbor Resources Director Melum explained that up until World War II boat construction occurred in the area, which resulted in some leaching of contaminants. He noted that the contaminant level is low but doesn't meet the strict requirements of the Environmental Protection Agency (EPA). City Manager Bludau asked if the Upper Bay dredging project would occur over a continuous 22 -month period or if there would be restrictions due to endangered species breeding seasons. Harbor Resources Director Melum explained that he wasn't aware of the restrictions for the project, but that private dock dredging can occur year - round. Moving to another issue, Harbor Resources Director Melum stated that eelgrass is listed as significant habitat for protected species, and that several years ago resource agencies developed the Southern California Eelgrass Mitigation Plan. He stated that this requires any project impacting eelgrass to include replacement of the eelgrass on a scale of 1.2 to 1, and guarantee its viability for up to five years. He stated that due to the cost of the Volume 55 - Page 37 City of Newport Beach Study Session Minutes March 12, 2002 INDEX requirement, private dock owners are not dredging or they're dredging around the eelgrass. Harbor Resources Director Melum stated that in an attempt to assist the dock owners, the resource agencies have developed a restoration plan that authorizes the City to plant eelgrass at various sites using federal funds. He stated that once found to be viable, the sites would be available for mitigation and banking purposes. He stated that planting could begin by late spring. Mayor Pro Tem Bromberg stated that the eelgrass on The Grand Canal is making it difficult to navigate through the area and asked if the restoration plan would apply to this area. Harbor Resources Director Melum stated that the eelgrass is in the middle of the channel and, therefore, an issue for the City and not the private dock owners. He stated that several years ago the City did a mitigation project so that dredging could be done in the channel. He added that eelgrass is a problem for all harbors in the State, and the Mitigation Plan has been found to be the best way to deal with the issue. Council Member Glover asked for more information on the requirement to guarantee that the newly planted eelgrass be viable for up to five years. Harbor Resources Director Melum stated that it means that the transplanted eelgrass has to remain alive for five years and if it doesn't, eelgrass must be replanted so that the replacement scale is achieved. Council Member Glover asked who would assure that the mitigation was successful. Harbor Resources Director Melum stated that several biological consultants are getting into the field, but that it's a very low -tech field. Per City Manager Bludau's question on the depth needed to plant eelgrass, Harbor Resources Director Melum stated that eelgrass is light sensitive and generally needs to be planted in relatively shallow water. He added that the eelgrass also does well in higher quality water, which means that the City's efforts to increase the harbor's water quality is resulting in more eelgrass. Per Mayor Ridgeway's question, Harbor Resources Director Melum stated that design depth is measured from zero tide. He further explained that zero tide is artificial datum established by the federal government at 2.73 feet below mean sea level and is universally accepted on the coast. Mayor Ridgeway asked if the Army Corps considers the Upper Newport Bay Project to be an existing project. Assistant City Manager Kiff stated that the Army Corps considers it to be a new project because of the focus on restoring the ecosystem. He stated that the City hopes to work with Congress to have the project approved and not be considered as one of the "new start" projects, which are currently being held up. 4. HOW TO NOT BE #1: ENDING SANITARY SEWER OVERFLOWS (SSOs) IN NEWPORT BEACH. Assistant City Manager Kiff stated that there are several things occurring with beach closures. Using a PowerPoint presentation, he displayed the warning sign that is posted when bacterial levels exceed State standards due to urban runoff and the keep out sign that is posted when a sewage spill has occurred. Assistant City Manager Kiff introduced Monica Mazur of the Orange County Health Care Agency. Assistant City Manager Mff displayed an illustration of how a sewer system Volume 55 - Page 38 City of Newport Beach Study Session Minutes March 12, 2002 INDEX works. He pointed out that a home or business's private sewer lateral becomes the City's property at the property line. He stated that the sewer laterals connect with the local main sewer line, then to the regional trunk line which, for Newport Beach, is the Orange County Sanitation District's line, and then to the wastewater treatment plant. Assistant City Manager Kiff stated that the City's 1996 Sewer Master Plan prioritizes the replacement of older sewer lines, as well as the replacement and upgrade of the City's pump stations. He stated that nine of the 20 pump stations are left to be upgraded with new equipment, including pumping mechanisms and notification equipment. Assistant City Manager Kiff stated that the master plan also prioritizes the use of alarm systems to warn of spills and the use of cameras to see problem areas. He displayed a photo taken from inside a line with a root blockage. Assistant City Manager Kiff displayed a list of the wastewater capital projects for the current fiscal year, which totaled over $1.5 million. Per Council Member Glover's question, City Manager Bludau stated that the cost to replace the deteriorated sewer lines is factored into the sewer rate, and that more replacements could -be done if the rate was increased. Council Member Glover asked if more replacements could be done if funds being used to improve water quality were used. Assistant City Manager Kiff agreed that it would be appropriate to spend the money in that way, since decreasing sewage spills would improve water quality. Council Member Glover stated that the funds being set aside for punitive reasons won't change people's personal habits and could possibly be better spent. Mayor Ridgeway stated that if the Orange County Sanitation District is required to go to full secondary treatment, they will double their sewer fees. City Manager Bludau stated that there are lots of components that contribute to sewer spills, with deteriorated sewer lines being only one. Mayor Ridgeway noted that even a new system can break. Assistant City Manager Kiff stated that the City's wastewater division has been awarded with having exemplary maintenance standards. He displayed a list of the lines that are cleaned monthly and those that are cleaned on a quarterly basis. He stated that the revenue received from sewer use fees and base connection fees total approximately $2.8 million per year, and approximately $3.1 million is expected to be spent in the current fiscal year. Assistant City Manager Kiff stated that beach closures are caused by known or suspected sewage spills. He noted that 61% of sewage spills in the area are caused by line blockages, which are usually caused by grease or roots. He stated that another 12% are caused by plumbing failures of pump -a- heads. Assistant City Manager Kiff displayed a pie chart, which showed the causes of ocean and bay water closures Countywide for the two -year period 1999 -2001. He also displayed closure information for County beaches for the period 1987 -2001. He pointed out that the number of closures has increased but that it's due, in part, to new regulations. Assistant City Manager Kiff displayed an aerial photo showing where the sewage spills have been in the City during the current year. He noted that one of them occurred earlier in the day of the current meeting and was caused by a line blockage. Per City Volume 55 - Page 39 City of Newport Beach Study Session Minutes March 12, 2002 INDEX Manager Bludau's question, Assistant City Manager Kiff confirmed that spills that occur in surrounding communities contribute to the City's beach closure count. Regarding the pump -a -head problem, Assistant City Manager Kiff stated that a County task force was put together to establish new plumbing standards. He stated that when the new standards are established, upgrades will be made and older models will be replaced, and the signage for reporting leaks and inoperable pump -a -heads will be improved. Regarding the root problem, Assistant City Manager Kiff stated that sewer line televising will be increased and property owners will be informed about having their private lines cleaned more often. He also listed root foaming and line upgrades as possible solutions. Assistant City Manager Kiff stated that the City had a study done on the grease interceptors at 305 food preparation facilities, and it was found that 91 of the facilities need interceptors but don't have them and another 32 have the wrong type or size. Assistant City Manager Kiff indicated that the solutions for limiting grease in the sewer lines include continuing an education program on keeping grease out of the lines and maintaining effectively operating grease control devices. He stated that the City can also start working more closely with the restaurants on grease control and consider mandatory interceptors. Mayor Ridgeway noted that the City has allowed incremental improvements prior to mandatory interceptors. Council Member Glover suggested that all restaurants be required to go through an education program with the City. Assistant City Manager Kiff noted that the Restaurant Business Improvement District (BID) has been supportive of some type of training. Mayor Ridgeway stated that he couldn't support it being mandatory, but he does think the restaurants will be cooperative since they'll be fined if they don't comply with the requirements. Assistant City Manager Kiff announced that sewage spills should be immediately reported to the City's police dispatch at 644 -3717, who will dispatch General Services, Utilities and Fire Haz -Mat crews. He noted that Utilities has an emergency response vehicle ready to berm the spill areas with sandbags and sheet off the storm drain entrances. The spill is then removed by the use of vactor trucks before it reaches the storm drain system. Assistant City Manager Kiff stated that in the case of a spill on private property that is not in danger of reaching the storm drain, water on the property should not be used, the area should be bermed and a plumber should be called. Assistant City Manager Kiff stated that the California Regional Water Quality Control Board is considering new waste discharge requirements for sewer collection agencies, which includes the City. He stated that the new requirements are intended to ensure there is adequate capacity and effective management, that sewage spills are specifically prohibited and that all feasible steps have been taken to avoid spills. He further explained that the Volume 55 - Page 40 City of Newport Beach Study Session Minutes March 12, 2002 INDEX waste discharge requirements include a sewer system management plan and a monitoring and reporting plan. He noted that the City already does many of the proposed requirements, so it shouldn't have a problem meeting the new regulations. Assistant City Manager Kiff stated that the City's tasks include continuing to adhere to the Sewer Master Plan, educating the public, requiring waste discharge permits for food preparation facilities, replacing old pump -a -head plumbing, complying with the Regional Board's waste discharge requirements and following Orange County Health Care Agency's response guidelines. Council Member Glover noted the earlier comment about spills in surrounding communities. Assistant City Manager Kiff explained that the waste discharge requirements are important because they require everyone on the watershed to meet the same requirements. Mayor Ridgeway requested that the concept of a waste discharge permit be agendized for the upcoming Coastal/Bay Water Quality Citizens Advisory Committee meeting. City Manager Bludau asked if grease interceptors would eventually be required of the food preparation facilities in the City that need them or need a different type or size, or if the problems can be taken care of with monthly maintenance. Assistant City Manager Kiff stated that it will be a challenge to get compliance from those facilities that can't install a grease interceptor. Mayor Ridgeway stated that all new restaurants are required to install a grease interceptor or comparable unit. He stated that the problem exists with retrofitting the older restaurants. He agreed with the educational and best management practices approach, and noted that the issue is being studied by the Orange County Sanitation District. Council Member Heffernan asked if consideration had been given to placing devices at each restaurant to trace where spills originated. Assistant City Manager Kiff stated that the City should get to the point where it can show when a specific restaurant isn't complying. Mayor Ridgeway asked how it could be done. Assistant City Manager Kiff stated that cameras could possibly be utilized. Mayor Ridgeway asked if the City owned any of the cameras. Utilities Operations Manager Burt stated that Utilities does have a small camera, but has asked for a new camera in the upcoming budget. He estimated that the City is spending $17,000 to $20,000 annually for individual shots when a blockage is found. He stated that a new camera will allow the City to take its own shots, which will save the City from paying for the service and will often result in the shots being taken sooner. Mayor Ridgeway noted that the current camera can't go into lines that are smaller than 8 inches in diameter, and that most private service laterals are 4 inches in diameter. Utilities Operations Manager Burt stated that the sewer lateral cleanout installation program that went into effect in 1991 has been beneficial because it lets the City know if a spill originates on the homeowner's side or the City's side of the sewer line. Mayor Ridgeway asked if the same program would work for restaurants. Utilities Operations Manager Burt stated that it could, but the problem is that some restaurants don't have room for an interceptor and Utilities crews Volume 55 - Page 41 City of Newport Beach Study Session Minutes March 12, 2002 are spending time cleaning out their lines when the crews could be elsewhere in the City. Per City Manager Bludau's question, Utilities Operations Manager Burt stated that the City owns between 210 and 220 miles of sewer lines. He added that it's the steel pipes that are being replaced in the Sewer Master Plan. Council Member Heffernan asked if the City is being compensated for the sewer cleanouts that Utilities performs at the restaurants. Assistant City Manager Kiff stated that permit and inspection fees are being considered. City Manager Bludau added that according to the City's Municipal Code, a restaurant has the option of paying an in lieu fee instead of having an interceptor installed. Utilities Operations Manager Burt noted that this is for new restaurants only and that older restaurants are not paying. Mayor Ridgeway requested that a report be provided within the next couple of months on the completion of the wells and the injections. Monica Mazur, Orange County Health Care Agency, noted that Newport Beach is on the receiving end of many of the beach closures. She specifically stated that of the nine beach or ocean and bay closures in the current year, four have been in Newport Beach and a City line caused only one of those four. She stated that the issue does involve everyone and is a concern to all those who utilize the ocean and bay waters. Ms. Mazur stated that the best thing is to have no sewage spills and the next best thing is to contain the spill, control the spill, call the County when a spill occurs, calculate the amount of the spill and cleanup the spill. PUBLIC COMMENTS — None. ADJOURNMENT — 5:32 p.m. The agenda for the Study Session was posted on March 6, 2002, at 1:40 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 55 - Page 42 INDEX CITY OF NEWPORT BEACH City Council Minutes Regular Meeting p� March 12, 2002 - 7:00 p.m. D R — 4:00 p.m. — 5:30 p.m. A. RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING B. ROLL CALL Present: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Absent: None C. CLOSED SESSION REPORT — None. D. PLEDGE OF ALLEGIANCE — Council Member Glover. E. INVOCATION - Paul Sansevieri, Chairman, State of California for the Christian Coalition F. PRESENTATION General Plan Update Neighborhood Workshops Announcement. G. NOTICE TO THE PUBLIC H. CITY COUNCIL ANNOUNCEMENTS OR MATTERS WHICH COUNCIL MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON- DISCUSSION ITEM1: Council Member Heffernan stated that the Big Canyon Reservoir has recently had a midge fly problem. He reported that it has been a longtime goal to have the reservoir covered with a floating lid which will cost about $5 million. He stated that Congressman Cox is assisting with this and that the City is trying to appropriate more than half the cost of the cover from the Federal government. Further, he reported that the intrusion alarm system at the reservoir is almost complete. Mayor Pro Tern Bromberg announced that District 5's General Plan Update Neighborhood Workshop will be held on March 18 at 7:00 p.m. at the Central Library. Mayor Pro Tem Bromberg stated that the American Cancer Society has chosen Newport Beach as one of the cities to host the 24 -hour Relay for Volume 55 - Page 43 INDEX City of Newport Beach City Council Minutes March 12, 2002 Life. He announced that the event will be held at the Newport Harbor High School track and that people can call the City Manager's office at 644.3000 for more information. Mayor Ridgeway reported that, in addition to writing to Congressman Cox, the City has also written to U.S. Senators Feinstein and Boxer for assistance with the Big Canyon Reservoir issue. Council Member Heffernan announced that the Friends of the Library need books, noting that they contributed $142,000 back to the library last year. He added that they will even pick up the books and that books can also be dropped off at any branch library. He stated that the Friends of the Library's telephone number is 759 -9667. City Manager Bludau stated that last Sunday was a wonderful day in the City with the Spirit Run and the Toshiba Senior Classic. Mayor Ridgeway added that the City also received worldwide coverage on this picture - perfect day. He commended the Chamber of Commerce and the Spirit Run organizers. I. CONSENT CALENDAR READING OF MINUTESIORDINANCES AND RESOLUTIONS 1. Removed at the request of an audience member. 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. BALBOA VILLAGE BUSINESS IMPROVEMENT DISTRICT, ANNUAL REPORT FOR 2001 -2002 FISCAL YEAR, DISTRICT RENEWAL, AND ADOPTION OF RESOLUTION OF INTENTION TO LEVY FOR 2002 -2003 FISCAL YEAR. 1) Approve the Balboa Village Business Improvement District 2001 -2002 Annual Report; and 2) adopt Resolution of Intention No. 2002 -21 to levy and set public hearing for March 26, 2002. CONTRACTS AND AGREEMENTS 4. Removed at the request of an audience member. 5. AMENDMENT TO AGREEMENT WITH SUTHERLAND TALLA HOSPITALITY LLP. Approve and authorize the Mayor to execute First Amendment to Agreement. 6. AGREEMENT WITH THE COUNTY OF ORANGE TO DECLARE A PORTION OF IRVINE AVENUE AS A COUNTY HIGHWAY DURING THE IRVINE AVENUE REALIGNMENT CONSTRUCTION PROJECT (C- 3411). 1) Approve an agreement with Volume 55 - Page 44 INDEX Res 2002 -21 Balboa Village Business Improvement District (27) C -3389 Sutherland Tallal Marinapark (38) C -3411 Res 2002 -22 Irvine Avenue Realignment City of Newport Beach City Council Minutes March 12, 2002 the County of Orange for responsibilities and cost sharing for the Irvine Avenue (University Drive to Bristol Street) Realignment Project — including the intersection of Mesa Drive, and City water transmission main; and 2) adopt Resolution No. 2002 -22 declaring a portion of Irvine Avenue owned by the City to be a County Highway during construction of the project. MESA DRIVE WIDENING PROJECT — APPROVAL OF PROFESSIONAL SERVICES AGREEMENT WITH METROPOINTE ENGINEERS. 1) Approve a professional services agreement with MetroPointe Engineers of Costa Mesa for design of widening Mesa Drive at the intersection of Irvine Avenue at a contract price of $87,060 and authorize the Mayor and City Clerk to execute the Agreement; and 2) authorize a budget amendment (BA -033) in the amount of $87,060 from the unappropriated balance of the Circulation & Transportation Fund to Account No. 7261- C5200665. 8. STREETLIGHT REPLACEMENT PROJECT — APPROVAL OF PROFESSIONAL SERVICES AGREEMENT WITH TETRA TECH, INC. Approve a professional services agreement with Tetra Tech, Inc. of Irvine for the preparation of plans and specifications of the Streetlight Replacement Project, Lido Sands, Shorecliffs, Cameo Shores and Highlands, at a contract price of $33,227 and authorize the Mayor and the City Clerk to execute the agreement. MISCELLANEOUS ACTIONS 9. RE- RECORDATION OF LOT LINE ADJUSTMENT NO. 82 -2A. 1) Authorize the Mayor to execute Lot Line Adjustment No. 82.2A; and 2) authorize the Mayor to execute a quitclaim deed to Patricia Penewell - Thomas. 514. AGREEMENT WITH ORANGE COUNTY FIRE AUTHORITY AND THE COUNTY OF ORANGE: PROPERTY TAX PAYMENT. Authorize the Mayor to execute the agreement. 515. Removed at the request of an audience member. Motion by Mayor Pro Tern Bromberg to approve the Consent Calendar, except for those items removed (1, 4 and S15). The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None J. ITEMS REMOVED FROM THE CONSENT CALENDAR 1. MINUTES OF THE ADJOURNED REGULAR AND REGULAR Volume 55 - Page 45 INDEX Construction/ County Highway (38) C -3518 BA -033 Mesa Drive Widening (38/40) C -3519 Streetlight Replacement (38) Lot Line Adjustment 82.2A/ Quitclaim Deed (74) C -3520 Property Tax Payment (38) City of Newport Beach City Council Minutes March 12, 2002 INDEX MEETING OF FEBRUARY 26, 2002. Jim Hildreth, 120 The Grand Canal, referenced volume 55, page 21 and believed that more of his comments should have been included in the minutes. He requested that the tape be reviewed. Motion by Mayor Pro Tem Brombere 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, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None 4. CITYWIDE WAYFINDING & DIRECTIONAL SIGNAGE C -3495 PROGRAM: APPROVAL OF PROFESSIONAL SERVICES BA -034 AGREEMENT AND BUDGET AMENDMENT. Citywide Wayfinding and Directional Dolores Otting expressed her appreciation to Council Member Adams for Signage Program making sure that Council did not vote on this issue during the (38140) February 26 study session. She stated that having it on the regular agenda allows people the opportunity to review the staff report. In response to Council Member O'Neil's question, City Attorney Burnham reported that Council can vote on items at the study session if it is properly agendized. He noted that Council has a policy that generally states that study sessions are reserved for items that are discussion in nature. Motion by Mayor Pro Tern Brombere to 1) approve the agreement for professional services with Hunt Design Associates not to exceed $80,500; approve a reproducibles budget not to exceed $2,000; and 2) approve a budget amendment (BA -034) transferring $36,085 from unappropriated reserve to capital account for public signage program. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None S15. GENERAL PLAN UPDATE FISCAL & ECONOMIC STUDIES: C -3521 AUTHORIZATION TO PROCEED AND APPROVAL OF General Plan PROFESSIONAL SERVICES AGREEMENT. Update Fiscal & Economic Studies Tom Hyans stated that it was his understanding that the economic data (38) was going to be made available so that the General Plan Advisory Volume 55 - Page 46 City of Newport Beach City Council Minutes March 12, 2002 INDEX Committee (GPAC) could use the information to assist in determining whether things they are considering are feasible. He noted that this will not happen with the current schedule. He stated that a lot of people are spending a great deal of time on this and that having the information not available is unacceptable. Assistant City Manager Wood stated that it was the General Plan Update Committee's (GPUC) and staffs intention to have the economic information and traffic study early in the process so it would be available to GPAC. However, in both cases, it took longer to develop the scope of services and to select the consultant for the economic analysis. She confirmed that the information will not be available as GPAC is going through the visioning process; however, if Council desires to have GPAC continue as the General Plan Update is being worked on, GPAC will be able to use the information for comparative purposes during the development of alternative land use scenarios. In response to Council Member Adams' question, Ms. Wood confirmed that Council can receive progress reports from the traffic and economic consultants at Council meetings. Mayor Ridgeway stated that a status report is important. He emphasized that, if it appears that anything in the reports is inconsistent with the work product that has been created by the advisory committees, Council can reconvene the committees to discuss the economic and traffic analysis. He reported that an additional problem is that the Local Coastal Program (LCP) will drive some of the issues in the General Plan Update. He indicated that the LCP Committee is meeting every two weeks to accelerate the process so no conflicts will exist between that document and the citizens' input. Council Member Adams added that the consultants will reach some conclusions early, provide progress reports, and provide interim information that should be presented to the committees. Council Member Adams emphasized that this is the visioning stage and agreed that ideally the studies should have been completed upfront. City Manager Bludau stated that this may not be happening as soon as the City would like, but it will happen in time for GPAC to act on the information and assist with translating the data from the community into a policy. Motion by Council Member O'Neil to approve the agreement for professional services with Applied Development Economics (ADE) for economic and fiscal analysis, studies and plan support services in the amount of $115,240; and approve a reproducibles budget not to exceed $500; for a grand total recommended budget of $115,740. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None Volume 55 - Page 47 City of Newport Beach City Council Minutes March 12, 2002 K. Robert Hanley, 1601 Indus Street, Santa Ana Heights, stated that the results of the recent election impacts his community more than any other. He indicated that he has addressed various north county cities and that all the rhetoric has never mentioned the real victims of the airport situation, specifically West Santa Ana Heights. He noted that any increase at John Wayne Airport (JWA) impacts them immediately and that, in five to ten years, the airport will inevitably expand. He believed that their only hope is a united front. Barbara Lichman, Airport Working Group Counsel, expressed AWG's appreciation to Council and the Newport Beach citizens for their overwhelming votes against Measure W. She stated that AWG believes that the only guarantee from a JWA expansion is to have an airport at El Toro. She reported that every city north of Irvine voted against Measure W. She requested that the City remain on course with respect to El Toro at least until litigation is done. She reported that they will be filing a State court lawsuit within the week and a Federal court lawsuit shortly thereafter. She believed that, if precedence is any lesson, they will once again prevail. Shirley Congor, P.O. Box 111, Corona del Mar, congratulated the City on its voting decision to reject Measure W by an 85% majority. Further, all North Orange County cities, except Tustin, voted 60% against Measure W. She stated that, even though the area lacked the large funds needed for an expensive political campaign, they conducted a vigorous grassroots effort that paid off. She believed that it behooves the City to continue the fight for an El Toro airport since there was a solid rejection of Measure W from 18 north county cities. She pointed out that the Navy announced that they will sell the Marine base to the highest bidder (valued at $11 billion). She stated that this will result in a developer building another city the size of Santa Ana with more gridlock, pollution and urban congestion. She emphasized that the Navy was going to give the County the site for free if it was used as an airport. Ms. Congor reported that the media has been announcing that there will be no airport at El Toro, but clarified that this has not been settled since there will be a Measure W court challenge. She reported that other airports, particularly JWA, will have to absorb the air traffic that El Toro would have taken. She noted that the JWA Settlement Agreement which limits the number of passenger flights and imposes a curfew expires December 31, 2005. She believed that, due to the threat of expansion at JWA and the almost unanimous support from North County cities, they should go ahead with court actions. She requested that the City allow AWG to use its allocated funds to proceed with a lawsuit against Measure W. Jim Hildreth, 120 The Grand Canal, presented a letter and requested that it be placed into record. He proceeded to read the letter which states that he cannot see a reason why the letter, which indicates that the requested records have been destroyed, cannot be signed by City officials and returned to him at the next meeting. He requested that, along with the signed letter, evidence be provided to the Hildreth Family that the Volume 55 - Page 48 INDEX City of Newport Beach City Council Minutes March 12, 2002 INDEX documents were destroyed. Mr. Hildreth presented a second letter regarding an unsigned letter dated February 26, 2002, that he received from Harbor Resources Director Melum. He proceeded to read a letter dated March 12, 2002, which states, 'Dear City Council Members: Mr. David Harschbarger, former City employee and former supervisor of Mr. Melum, knew (as should Mr. Melum now know) that the dock sites on The Grand Canal are shown on the City records as moorings which are allowed access through the use of two structures: Standard Drawings 602 and 603. I previously presented pictures of these structures and their adjacent moorings to the City Council to illustrate their conformation. For a long time now, I have been trying to show the City Council that there is a difference between a shore mooring and a mooring in The Grand Canal. For example, the fees and regulations for shore moorings obtained from the Sheriffs Marine Department indicate that the initial per foot charge for a shore mooring is only 60¢ for the first year. The City then collects, at the present time, $10 /foot per year according to building records. This $9.40 /foot surcharge is being used by the City to maintain the sand level for shore mooring access." Ken Hite stated that he represents CHG Safety Technologies which deals with Global Positioning Satellite (GPS) security systems that can support the City's law enforcement officers in enhancing their response and dispatch times, determining officer and vehicle locations, and protecting officers in the event of an emergency. He reported that their system is unique because, if an analog signal cannot be picked up, it reverts to two - way communication using their government satellite. He indicated that they already have frequencies assigned to them by the Defense Department. He presented a brochure to Council and reported that they are currently working with the Newport Beach Fire Department to incorporate the system into the firefighters' helmets in the event of a similar September 11 situation to assist in locating officers. Robby Conn, 1940 Teresita Lane, stated that he grew up under the flight path and expressed concern that the newspapers make it sound like the ballgame is over regarding El Toro. He believed that Measure W was deceitful and that the City needs to look out for the interests of the residents and strive for what is right. He stated that he appreciates Council's efforts in trying to secure a JWA Settlement Agreement extension, but noted that this is a different issue. Charles Griffin stated that, while visiting Novato, he noticed the location of the former Hamilton Air Force Base in relation to Novato. He indicated that it is similar to Newport Beach and JWA, and that the base is densely developed with large homes on small lots. He also reported that over 1,000 airplanes are parked in the Mojave Desert that have gone into early retirement. He stated that he looks at this as a memorial to September 11 and believed that it represents lost jobs. He reported that four retired airline captains filed a new initiative with the Registrar of Voters to rescind Measure W. He requested Council's support in the form of litigation. Volume 55 - Page 49 City of Newport Beach City Council Minutes March 12, 2002 Erica Hill, representing CHG Safety Technologies and its owner Charles Gabbard, stated that they want the opportunity to participate in the Police Department's evaluation of a GPS system and in the competitive bid process for that system. Russell Niewiarowski, 20102 Mine Drive, Santa Ana Heights, stated that he is the President of TNMG Incorporated, advocates for an airport at El Toro. He stated that, at the last meeting, he was told that he should be ashamed of himself. He admitted that he is guilty of not researching all the information for every subject but does his best, and that he is probably guilty of being passionate. He believed that the greatest apology he should give is to Donald Bren, owner of The Irvine Company, and proceeded to thank him for dedicating 11,000 acres of open space. He indicated that everyone knew that a Great Park at E1 Toro was never going to happen, and yet people came out in droves to vote for a facade. He agreed that the fight is not over and stated that he is confident in the attorney. He encouraged Council to stand behind her. Mr. Niewiarowski reported that membership in TNMG has almost doubled because people realize that there is a reasonable alternative. He believed that it is right for everyone to carry their fair responsibilities and not expect one community to carry it all. He encouraged everyone who does not believe this is over to call them or other airport groups and stand behind them. L. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES Council Member Heffernan reported that public comments will begin relative to the assessments of the Adelphia and Cox Cable contracts on March 14 at 4:30 p.m. in the Council Chambers. He indicated that this is the opportunity to tell the City how the cable companies are doing. He clarified that the City does not have full discretion to change anything, but noted that this is part of the needs assessment process. Council Member Glover reported that the City is in the 90 day period for working on Scenario One of the John Wayne Airport Settlement Agreement. She stated that they will keep the public informed. Council Member Adams reported that he chairs the General Plan Update Committee and that the neighborhood workshops will be coming up. He encouraged Council to only listen during the workshops since this is a time for public input. Council Member Proctor announced that District 2's workshop will be held on March 20 in the Council Chambers. M. PLANNING COMMISSION AGENDA AND ORAL STATUS REPORT 10. PLANNING COMMISSION AGENDA FOR MARCH 7, 2002. Planning Director Temple reported that the 1324 West Balboa Boulevard project (Item 3) was continued. She indicated that the Camco Pacific item (Item 1) was previously considered by Council and is a corrective action to an error made in the original ordinance. Regarding the Pacific Volume 55 - Page 50 INDEX Planning (68) City of Newport Beach City Council Minutes March 12, 2002 Republic Capital item (Item 2), Ms. Temple reported that they are requesting a new office building and that it includes a General Plan Amendment and Zoning Amendment. She indicated that the two items will be coming before Council. Motion by Council Member O'Neil to receive and file the report. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None N. PUBLIC HEARING 11. CANNERY LOFTS (PA2001 -128) — 501 -507 & 500 -512 30TH STREET, 2908 -2912 LAFAYETTE AVENUE — REQUEST FOR A SITE PLAN REVIEW, USE PERMIT, TENTATIVE TRACT MAP, COASTAL RESIDENTIAL DEVELOPMENT PERMIT AND TRAFFIC STUDY FOR THE CONSTRUCTION OF 22 COMMERCIAIJRESIDENTIAL BUILDINGS ON 16 LOTS THAT ENCOMPASS APPROXIMATELY 1.44 ACRES IN THE CANNERY VILLAGE AREA. Mayor Ridgeway stated that the staff report was one of the most complete reports he has ever read on any project, adding that he has never seen a project so well discussed, debated, and voted on. Council Member Heffernan announced that he has a conflict of interest as his law firm represented the applicant on the acquisition of the land. In response to Council Member Proctor's questions, City Attorney Burnham stated that Council is hearing this matter de novo and that, to make the approvals, Council needs to make the findings in the same manner and with the same factual basis as the Planning Commission. Planning Director Temple reported that this project involves several applications and that two of them were of concern to area residents and property owners. She reported that all 22 lots require a use permit to exceed the basic height limit of 26 feet to a secondary permitted height limit of 35 feet. She pointed out that the typical roof height for each building is about 31 feet with parapets and mechanical equipment being as high as 34 feet. She stated that, in order to approve the use permits, the following findings must be made: 1) the increased height results in more public visual open space and views than required within the basic height limit, giving attention to location, site coverage, and the treatment of setbacks; 2) the height will result in a more desirable treatment of the building; 3) the height will not create undesirable or abrupt scale relationships with existing developments, giving attention to total building bulk, including horizontal and vertical dimensions; and 4) the structure is no larger by way of floor area than otherwise permitted by Volume 55 - Page 51 INDEX PA2001.128 Cannery Lofts/ 501 -507 and 500.512 30th Street/ 2908 -2912 Lafayette (68) City of Newport Beach City Council Minutes March 12, 2002 INDEX the zoning regulations. Ms. Temple stated that the Commission believed that the project setbacks, open terraces, open balconies, and less than permitted building bulk counterbalance the portions of the building that are over the basic height limit. Further, many Commissioners believed that the project represented a superior design, particularly in light of the design guidelines contained in the specific plan. She clarified that the specific plan contains advisory design guidelines and are not mandatory; however, in this case, a majority of the Commission felt that the project was very consistent with the advisory guidelines and that this was an important part of their ability to make the third finding. Regarding the four bayfront lots, Ms. Temple reported that there are 12 criteria which projects requiring a site plan review must be evaluated by. She stated that the criteria that appeared most relevant to this project was that the project is sensitive to the natural terrain, is compatible with the neighborhood, protects public views, protects sensitive areas, and is compatible to the site. She indicated that the Commission believed that the project was consistent with the nature of the Cannery Village, provided public access, maintained public access to the view of the Rhine Channel, and was consistent with the technical criteria of the site plan review provisions. Additionally, while not specifically within the jurisdiction of the Commission, the non - standard public improvements proposed in association with the project were viewed as contributing to the overall aesthetic quality of the development. She stated that approval of such improvements are in Council's jurisdiction and will return for Council consideration. Mayor Ridgeway opened the public hearing. Philip Bettencourt, 110 Newport Center Drive, stated that he is the entitlement representative for CWI Development. He noted that the staff report is 326 pages which includes 12 exhibits. He stated that they stand by the staff drafted/Commission endorsed conditions and propose no changes. He reported that three public hearings were held before the Commission and there was an almost unanimous recommendation for approval. Further, they appeared before the Environmental Quality Advisory Committee (EQAC), Newport Beach Chamber of Commerce, and West Newport Beach Improvement Association. He noted that the project has been determined to be consistent with the City's General Plan, Cannery Village Specific Plan, Traffic Phasing Ordinance, and Local Land Use Plan. He stated that the proper environmental determination has been posted and that the City's independent environmental advisor, Keeton Kreitzer, is in the audience. He noted that they have a discretionary height waiver on each of the buildings. He believed that the project provides an opportunity to master plan a one block segment of the Village and provide new shop space and housing, as well as new infrastructure (modern storm drain system, public sidewalks and streets, enriched paving, underground utilities, new street trees, public gathering space, and public promenade along the bayfront). Kevin Weeda, Developer/Project Applicant, 429 West 30th Street, stated that they have worked closely with the Commission and staff to meet all Volume 55 - Page 52 City of Newport Beach City Council Minutes March 12, 2002 INDEX the requirements under the specific plan, and noted that the Commission voted for the project's approval by a 6 -1 vote. He reaffirmed their commitment in developing a project that will be something they are proud of and the City will embrace. He stated that their commitment is evidenced by the distinction of having prepared the most detailed application for a project in Cannery Village history. He indicated that their master plan is an example of how an underutilized location can be intelligently planned to create a better and logical redevelopment that accommodates current lifestyle needs. He stated that their focus was not to maximize square footage or build to the highest profit return, but to design a well thought out mixed use development in the Cannery Village. In doing so, he stated that they hired a skilled team of architects, designers, and engineers who started with the specific plan in mind. He reported that they went through many design changes, exploring the best possible solutions to challenging issues like parking, water quality management, building functionality, and architectural integrity. Mr. Weeds stated that some of his group attended the City's Vision Festival in which many citizens and businesses were asking for more live /work spaces, as well as revitalization and beautification of commercial areas. He indicated that their goal is to develop an exciting new concept of live /work lofts with the opportunity for ownership in the City. He pointed out that this would reduce congestion, parking and traffic problems, and create a cohesive village within a village. He expressed hope that their small development will help reenergize Cannery Village. He stated that they made a significant investment because they believe in it and because the City is one of the best places to live and work in Orange County. He asked Council to make its judgment based on the current facts and rules, and not on subjective arguments. Mr. Weeds stated that they played by the rules and have met all the requirements, which also include 49 conditions of approval. He asked Council to approve the project and share their vision for what will be an award winning project and an example of a City working towards the future, as well as maintaining some elements of the past. He stated that he and David Hecht, project architect, are available for questions. Council Member Glover stated that she would like to know how well Cannery Village's zoning and planning worked with regard to trying to put a project together. Mr. Weeds reported that they previously developed other buildings on individual or double lots, and it worked well in that environment. However, as they tried to develop a larger project, it became a little more difficult. He pointed out that they spent 12 months working through all the rules and regulations. Council Member Proctor asked what types of businesses they thought would occupy the lofts. Mr. Weeds stated that they have a long and growing interest list since it is a "for sale" project and not rentals. He indicated that they envision people will be operating businesses that are consistent with what is in the neighborhood now; however, there may be different and interesting businesses. Mayor Ridgeway announced for the record that he has met with Mr. Weeds on a couple of occasions, has met with the project opponents Volume 55 - Page 53 City of Newport Beach City Council Minutes March 12, 2002 on more than one occasion, and visited the site numerous times. Mr. Weeda utilized a PowerPoint presentation which showed an architectural rendering of the site; vicinity and location maps; aerial photo of the site; a building he developed on 30th Street; examples of livetwork lofts in San Francisco and San Diego that are similar to their project; examples of mixed use buildings in the area, the site plan with enhanced paving, mini - park/gathering area, and promenade; the drainage system; project model and what it would look like in the site; the height of their project compared to the Cannery Restaurant and the building he currently uses; the light as it passes through some of the breezeways; the material board, and architectural renderings of the project from Villa Way toward Lafayette. In response to Council questions, Mr. Weeda confirmed that the commercial ground floor is inclusive of office use. Ms. Temple indicated that the commercial area cannot be converted into residential space. Stan Sewell, 351 N. Newport Boulevard, stated that he is speaking on behalf of Lucille Kring who is unable to attend tonight and the Owners/Residents Against Cannery Lofts Expansion. Mayor Ridgeway noted that Council has received their letter as part of the packet and separately. Mr. Sewell indicated that the business owners and residents are very supportive of improvements in the Cannery Village; however, this project proposes too much height, massing, and uniformity. He stated that there are unresolved issues, concerns about the architecture, confusion about how the specific operations of the mixed uses will be managed, and questions about the impacts to the existing businesses and residents of the area. He believed that the project is not keeping with the goals of the Cannery Village Specific Plan or the community's desires at the Vision Festival. He stated that they are asking that the project not move forward until the public has a better opportunity to see more complete project details. He indicated that the final project, which will incorporate Commission conditions and revisions, should come in a more complete form before Council. He added that this will also give the public an opportunity to comment on the complete and actual project. He believed that, if significant changes are made that address concerns voiced at the Commission meetings or before Council, the mitigated negative, declaration should be recirculated for public review and comment. He requested that Council consider the Cannery Village residents and business owners, and what they expect from the road map provided in the Cannery Village Specific Plan. He believed that the Visioning Festival summary confirms that residents are concerned with overbuilding and the erosion of the historic character of areas like Cannery Village. INDEX Mayor Pro Tem Bromberg asked Mr. Sewell to list their specific concerns about the project height since it is lower than most of the buildings around the area. Mr. Sewell stated that Ms. Kring would have been able to do that and indicated that it would be acceptable to continue this item until she came back. Volume 55 - Page 54 City of Newport Beach City Council Minutes March 12, 2002 :0 Richard Luerhs, President of the Newport Beach Chamber of Commerce, stated that they presented a letter to Council which indicates that the Board of Directors unanimously supports the project. He encouraged Council to continue abstaining from involving itself with design review issues. He stated that they feel the project represents a terrific boost to the Cannery Village and encouraged Council to support the project. Brett Delvalle, stated that he lives at 1201 Estelle Lane and works at 409 30th Street. He indicated that he enjoys living and working in the City, and has seen the area change over the last 35 years. He stated that he is looking forward to this project and hopes that Council approves it. He noted that the people who oppose the project are not in attendance and hired a group from Anaheim to represent them. Hearing no further testimony, Mayor Ridgeway closed the public hearing. Motion by Mayor Pro Tem Brombere to affirm the decision of the Planning Commission in approving the Cannery Lofts project. Council Member Proctor thanked the Planning Commission for their review of the project since it was helpful in getting a background on how everyone felt about the project. He stated that it is clear that this is a good project and is supportive of it since it will be a substantial improvement to the neighborhood. The motion carried by the following roll call vote: Ayes: O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: Heffernan Absent: None 12. APPOINTMENT OF CHAIR AND VICE CHAIR TO THE GENERAL PLAN ADVISORY COMMITTEE (contd. from 2/26/02). Motion by Mayor Pro Tern Bromberg to confirm Mayor Ridgeway's appointment of Robert Shelton as Chair and Phillip Lugar as Vice Chair to the General Plan Advisory Committee. Mayor Ridgeway stated that it is gracious of Mr. Shelton and Mr. Lugar to agree to be Chair and Vice Chair of GPAC and indicated that they are very qualified and have been involved in these types of efforts before. He stated that their goal is to bring together all the visions that are brought to the table and be consensus builders. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Volume 55 - Page 55 INDEX General Plan Advisory Committee (24) City of Newport Beach City Council Minutes March 12, 2002 Abstain: None Absent: None 13. 2ND AMENDMENT & LEASE EXTENSION - MARINAPARK RESIDENCES (contd. from 2/26/02). Council Member Adams noted that, at the last meeting, there were differences of opinion about the history of the rent increases and the in lieu reduction for moving expenses. He stated that he hopes this will be thoroughly discussed. Assistant City Manager Kiff utilized a PowerPoint presentation to show that the proposed lease is for one year with two one -year options; that the lease recognizes the value of moderated rent between 1985 and 2002, and includes a waiver of relocation benefits due to the moderated rent; that the lease would raise the rent to near market value effective July 1, 2002, and then raise it again July 1, 2003, based on the Consumer Price Index (CPI); that the lease authorizes the City Manager to offer a rent credit for economic hardships; and that the City would accept and remove any coaches at any time upon the written request of its owner. He reported that, based on the moderated rent and compared to the Lido Peninsula Resort and DeAnza Bayside Village, the City did not receive $18,350 to $128,400 for each of the 58 lots. He added that there is no effective comparison for Marinapark's C, D, and E lots. Assuming residents invested this rent savings at 10% between 1985 and 2002, Lots A and B would have $661,000; and Lots C, D, and E would have $61,000. Mr. Mf£ emphasized that the City never reduced rents since the 1985 lease stated that the City would only increase the rents at CPI. He added that this significantly underestimated the increase in housing costs in the area. He noted that the rent was a little higher than market value in 1985, but the residents received a $207 /month benefit in 1990, $675 /month benefit in 1995, and $1,571 /month benefit in 2000. Mr. Kiff reported that the 1985 lease said that among "the most significant rights obtained by lessee, and given up by the City..." are lessee's payment of "moderate rent... and the advantage of limited rental increases in the future, while City gives up the right to charge higher rents initially and the right to impose future rental increases in excess of the cost -of- living index..." He reviewed past minutes which showed the residents' willingness to start paying increased rents as soon as an agreement was reached. Mr. Kiff reiterated that the City Manager will use an independent third party, like Manufactured Housing Educational Trust (1=), to establish criteria for an economic hardship rent credit. He reported that factors include that Marinapark is the primary residence for the lessee, noting that, in 2000, only 16 of the 58 coaches were rented by a full -time lessee; 6 of 58 were full timers not on the lease; and 36 coaches were part time residences. He added that the lease requires them to live their full time. He stated that another factor for hardship is the limited value of owned assets and living on a fixed income below a certain level. Mr. Mf£ concluded by showing an aerial of the site which has no obstructed bay Volume 55 - Page 56 INDEX C -1784 Marinapark Leases (38) City of Newport Beach City Council Minutes March 12, 2002 views. • MIU17o►:1 Council Member Heffernan asked whether, in 1985, using the CPI was a form of rent break or a conscious market decision that was commonly made with leases of this time, and also asked if there was a reference in the lease to what the property was expected to convert into. Mr. Kiff believed that it was a conscious attempt to offer a rent break with the expectation that it would close 15 years later in 2000. City Attorney Burnham reported that the 1985 lease said that the City was charging a moderate rent and giving up the right to initially charge higher rents in excess of the CPI. He believed that the City understood that rental rates were starting to increase at a much faster rate than the CPI. He added that, pursuant to conditions in the 1985 lease, it was a conscious decision to give up the right to increase rents to a market level during the 15 year term. He stated that the City intended to convert the site to a public recreation area upon the expiration of the 1985 lease. Beverley Shonholtz, 1770 West Balboa Boulevard, # 5A, indicated that she would like to believe that everything spoken by City officials and written in the newspapers is the truth; however, there is a lot of misinformation being spread about the past, current, and proposed uses for Marinapark. She believed that Mr. Sutherland has had unlimited time to sell his proposal before Council and was even given a full page Daily Pilot interview. She asked if Mr. Sutherland will be able to do all the things he proposes even in an economic downfall, and asked if the City wants a bankrupt project in the middle of the Peninsula. She stated that a lot of confusion has been created about the value of the leases and emphasized that the lease did not cut their rents in half. She indicated that their staff came up with data which showed that the residents were paying more in 1985 than those at the DeAnza and Lido Peninsula Mobile Home Parks. She stated that discrepancies occurred because their annual increases were tied to the CPI and believed it is not their fault that the CPI did not keep up with the rise in City property values. Betty Berkshire, 1770 West Balboa Boulevard, # 7A, believed that the City's basis for determining market value is flawed since it was prepared by their park manager who is not a professional appraiser. She stated that their survey does not agree with his numbers. Further, she believed that the City cannot compare the value of a one -year lease with a long term lease, and that the City's data does not take the term into consideration. Regarding fulltime residents at Marinapark, she indicated that this percentage is about the same as on the Peninsula. She stated that a majority of the Marinapark residents would favor becoming fulltime residents if they had a long term lease. She stated that it has also been said that they waived relocation benefits in the 1985 lease; however, this waiver was predicated upon the City converting the property to a public park. She noted that the wording was changed in 2000 to "public use" which makes way for a hotel on the property. She believed that tenants had no choice on renegotiating the lease and signed it under duress because they faced the loss of their homes or large monthly rental increases if they did not sign. Volume 55 - Page 57 City of Newport Beach City Council Minutes March 12, 2002 loop] + Joe Rybus, 1770 West Balboa Boulevard, # 6C, stated that he purchased his unit in May 2000. He indicated that a hotel is considered by the City to be public use, but a hotel of the five star caliber will only be accessible to an elite fraction of the public. He believed that a five star guest may not be willing to share the public beach and tennis court. He stated that a public park would provide the only true public use of the land as proposed under the 1985 lease, adding that the main objection is that it would generate no income for the City and possibly create policing problems which is an additional expense to the City. He believed that the current use as a mobile home park is the only practical use that does not increase traffic on the Peninsula. Further, it maintains the beach and tennis court for public enjoyment, does not disturb the existing migratory and residential bird habitat, and provides a substantial and reliable income without added expense to the City. He stated that, as'before, they welcome a long term lease that justifies rent increases to market value. This would make it possible for the older residents who choose not to pay the higher rent to have something to sell. Additionally, a long term lease would give them the security to invest in improvements that reflect the upscale image that many desire for Newport Beach. Council Member Glover took issue with the inferences that Council has been making misleading statements. She stated that she has been on Council for almost eight years and the only comment she has ever made about Marinapark is when she told Adele Mann that she would not support the Sutherland project. Seamus McKeever stated that he lives in San Gabriel Valley and is a realtor who is working pro bono for a resident at Marinapark. He asked why Council would impose an increase if the objective is to move the residents out. He indicated that the residents have the right to assume that their equity is going to increase because of the location; however, he believed that Council has essentially taken the equity away and decimated them. He stated that his clients tell him that their rent will go from $1,200 to $2,500 which basically prevents them from selling the equity. He believed that Council should reconsider this and asked what compensation is being proposed for the residents' equity. Mr. Kiff reminded everyone that the current lease, which is for a two - year extension to a 15 year lease, expires in two days. Herbert Williams, 1770 West Balboa Boulevard, # 7B, stated that he and his wife moved to the park 43 years ago and have lived there full time for 16 years. He indicated that the 15 year lease was drawn up by outside appraisers and that they conformed to market value at that time. At this time, discussion arose about having a public park and low cost housing on the site. He stated that the lease considerations were that the expiration of the lease would coincide with the expiration of the American Legion lease; that they would give up their relocation for a public park, now referred to as "public use "; and that the site would be designated for low cost housing. He believed that the deal was fair then and that they still support their position. He reported that, from 1985 to the 1990s, the rents were keeping up with the market; however, property values Volume 55 - Page 58 City of Newport Beach City Council Minutes March 12, 2002 INDEX increased after that and their base rental was falling behind. He stated that 10 years into the lease, they reopened discussions with the City to move up to market value for an extended lease, but this did not move forward. Mr. Williams noted that residents are members of the community and wish to remain members of the community. He requested a fair review of their continued residency. Bob Seymour, 1770 West Balboa Boulevard, stated that most Marinapark residents would like a fair review of the increase. He indicated that they all agree it should be increased; however, noted that the proposed increase was done by Bendetti's on -site manager, Joe Albano. He stated that William R. Hansen, Master Appraiser, wrote them a letter which basically states that, although he has not reviewed the lease extension document or survey, the single most significant factor with the lease is the term. He stated that, comparing the space leases to other mobile home parks, the one year lease will likely result in inequitable rents for the tenants. He added that the Marinapark lease extension would commonly be described as an existing tenant holdover from the prior agreement and that short term holdovers typically extend the terms and conditions of the unexpired agreement. Further, most holdover revisions provide that the rent be based on rent paid during the last year of the lease term. He continued by writing that some holdover provisions provide the rental increase based on a fixed percentage of the prior rent, typically within the 10% to 25% range. Mr. Hansen concluded by emphasizing that rent for the one -year Marinapark lease cannot be fairly compared to those of newer tenant leases at other mobile home parks. John McDaniel, 1770 West Balboa Boulevard, #3A, stated that he is a senior citizen, veteran, and member of the American Legion who lives at Marinapark. He indicated that he does not mind a rent increase, but does mind a rent increase without a lease of significant time. He noted that the City gave the Balboa Bay Club and Beacon Bay 25 year leases. He believed that, without a lease, they have nothing but an eviction notice because some people cannot afford to stay. He emphasized that they are residents and not big corporations, and that they do many things for the City that no one hears about. Mr. McDaniel took issue that the City said that, if they move, the City will tear their houses down for free. He hoped that Council considers a long term lease. Tom Hyans, President of the Central Newport Beach Community Association, stated that he lives about a block west of Marinapark. He indicated that he has listened to the lease negotiation discussions and has copies of the leases at home. He agreed that the things that have happened in the newspapers and that people hear tend to portray the Marinapark homeowners as people who are taking advantage of the system. He further took issue with the numbers in the PowerPoint presentation. He stated that the Community Association is in favor of the City renewing the leases long term for the tenants, as well as for the American Legion. He noted that the Marinapark mobile home site is about 1/3 of a project site that is comprised of a beach, the American Legion, Las Arenas Park, basketball courts, and tennis courts, and that they are willing to pay what is perceived as market value. Mr. Hyans Volume 55 - Page 59 City of Newport Beach City Council Minutes March 12, 2002 INDEX expressed the opinion that the property should be used for marine recreational use and noted that all his documents, until two years ago, projected the property to be developed for this use. He believed that the tenants deserve at least a three year lease. Council Member Glover pointed out that she has not supported the Sutherland project and did not support the change from a park to a recreational use because she feels it should become a park. She indicated that untrue comments bother her and that she has never made those types of comments. Mr. Hyans stated that the things Ms. Shonholtz and others perceive are what is said by staff and consultants, not Council. He added that he supports the site becoming a park and that, historically, this has been the intent and the reason for the 15 year lease. Dolores Otting stated that it is too bad the City has term limits because things would be different if Council Members O'Neil and Glover could run again. She stated that it is sad to watch people beg for their homes. She indicated that she talked to her father -in -law about this who told her that the site was supposed to turn into a park, never a hotel. She reported that Lots A and B are paying $1,225.08, but will go up to $2,300; Lots C and D are paying $924.83, but will go up to $1,850; and Lot E is paying $864.80, but will go up to $1,700. She stated that the City needs to call this a senior park and asked what the Balboa Bay Club paid prior to and after the construction. She also asked what will be on the site if the tenants leave and the hotel does not go through. Noting that the traffic the other morning on MacArthur was backed up, Ms. Otting stated that the City should be happy that half the community is over 65 years old and does not have to get out of the City in the morning. She believed that the tenants should be able to stay. In response to Mr. Hyans' previous statement about staff, City Manager Bludau stated that he does not apologize for what was presented. He believed that staff should be criticized if they do not provide all of the information that could shed light on the subject. He indicated that he has heard that the City should be run more like a business; however, if this was a business decision, noting that it is not because people are involved, the information would be key to how the issue is decided. Council Member Heffernan stated that he asked the finance department to compare what the rent is supposed to be versus the oil wells, Beacon Bay ground leases, Balboa Bay Club, Balboa Yacht Basin, and piers and moorings. He reported that Marinapark's projected rents will go up to $1,325,000; the oil wells produced $965,000; Beacon Bay produced $1,265,000; Balboa Bay Club produced $1,850,000; Balboa Yacht Basin produced $1,550,000; and the piers and moorings produced $1,125,000. He believed that the best comparison is with Beacon Bay since people built million dollar homes on top of City property which produced less income. Mr. Bludau pointed out that Beacon Bay homes provide a lot of property tax to the City and that the whole revenue picture does not just look at lease revenue. Volume 55 - Page 60 City of Newport Beach City Council Minutes March 12, 2002 INDEX Stewart Berkshire, 1770 West Balboa Boulevard, #7A, pointed out that they pay property tax to the County, unlike the other mobile home parks in the City. He stated that they reviewed the figures used by the City to compare rents with other similar properties and were surprised to see that the study neglected factors normally used by appraisers. He noted that rent amounts are comparable, but this does not mean that theirs would be at fair market value since paying the same amount for a one year agreement versus a 10 or 15 year term is not a rational economic act. He requested that a formal rent appraisal based on a 15 year term be undertaken by a neutral third party. Further, he requested that such a lease be offered to them to justify the rent amount as fair market value, yet not jeopardize any future developments since the lease can be terminated at any time by a six month notice. He believed that this lease would give tenants the opportunity to sell their coaches if they do not want to pay the increase and, if the hotel does not materialize, the City will still have a strong flow of revenue. He stated that the high rent and short leases bring about a hardship and degrades the value of their property. He believed that there is a wrong being done and that people should see it as that. John Nelson stated that a small special interest group is showing up to defeat reason with emotion. He indicated that Council should base its decision in a more rational manner. He pointed out that the Marinapark property is an asset that is owned by the City and, therefore, the City and all its citizens have an economic stake in it. He believed that the City should be free to develop the property to its highest and best use in order to maximize the financial return. He stated that Council needs to look at the potential economic benefit to the City and is directed by State law (Chapter 74, Statutes of 1978) to maximize revenues on all properties like this. He stated that failure to do so could leave the City open to a lawsuit. Mr. Nelson stated that, in weighing the interests of all the citizens versus the special interest group, the City must keep its options open. He believed that it is in the best interest of the City to limit the extension of the current leases to no more than one -year at a time, with two one -year extensions, to allow much more flexibility to determine and realize the highest and best use of the property. He pointed out that Council Member Adams stated that the City has already made considerable concessions to the tenants and has held the rents at an artificially low rate in order to offset their anticipated relocation cost. He noted that the residents agreed and accepted this previously, but now they want to disregard this after they have already benefited from the concessions. Mr. Nelson pointed out that the mobile homes are not worth much money and believed that the real value is in the lease itself. He believed that the tenants want the taxpayers of the City to subsidize their rent so they can realize the added value the time premium adds to the value of their mobile homes. He asked Council who should be the beneficiary of the value of the time premium. Council Member Adams expressed the opinion that a reasonable case has been made that the City's comparison did not take the duration of the lease into proper account. He stated that he would be supportive of a neutral third party assessment, as long as the duration of the lease term Volume 55 - Page 61 City of Newport Beach City Council Minutes March 12, 2002 remains the same. INDEX Council Member Heffernan asked for clarification relative to the tidelands status. City Attorney Burnham stated that, based on what he has seen from the State Lands Commission, a portion of the property is tidelands and a portion is probably uplands. He indicated that the precise boundary is unclear; however, Marinapark is tidelands. He reported that a hotel or park would be a permitted use, but a mobile home park or permanent residential use would not be permitted under the general tidelands trust document. Mayor Pro Tem Bromberg stated that he did not have a clear understanding of the leases after the last Council meeting. However, after listening to everything, he realized that the issue is not that people will be moving out of Marinapark since they knew a long time ago that this was going to happen, but when they will move. He believed that the terms are comparable, but does not have a problem with taking this to a third party. He pointed out that now people say the rents are high but would be okay if they had a three year lease. He stated that he does not believe that the coaches are going to be worth more money now regardless if they have a three or one -year lease. He noted that Council is being accused that they are going to put a hotel on the site. He emphasized that no one on Council has supported a hotel as of yet, clarifying that they supported the initiation of a General Plan Amendment. He stated that, in the 14 months he has been on Council, many people who scream for fairness are the first to try to stop someone when it is adverse to their interests. He pointed out that the residents live on the water and believed that the City has not been unfair. Mayor Ridgeway stated that the residents are good citizens, but this is not the issue before Council. He indicated that the issue is Council's fiduciary duty to the citizens. He reiterated that residential use is not an appropriate use on tidelands. He stated that he does not have a problem with Council Member Adams' suggestion. He warned everyone that appraisers could differ and that the rent values could even be higher, not lower. He stated that the general consensus is that the residents will get a three -year lease, but the question is how it will be formulated. Mr. Mff believed that an appraisal can be done relatively quickly, but reminded everyone that the rent increase being proposed would take affect July 1, 2002. He stated that the City has to provide a 90 -day rent increase notice, but believed that it does not have to specify the exact amount. Council Member Heffernan believed that the City has made a decision about the property, noting that Steve Sutherland's project was chosen from eight options to proceed with a hotel. He noted that, in 2000, the residents were given a two -year extension at a low rent rate because of this and now they are being offered three one -year lease extensions, but may still be out at anytime. He believed that the holdover rent situation is just as applicable today as it was two years ago. He explained that he voted two weeks ago for Sutherland to proceed with the Environmental Impact Report (EIR) because the City made its choice. Volume 55 - Page 62 City of Newport Beach City Council Minutes March 12, 2002 INDEX Motion by Council Member Heffernan to keep the Marinapark rents the same if the City elects to proceed with three one -year extensions. The motion died due to a lack of a second. Mayor Ridgeway expressed the opinion that Council Member Heffernan's comment that the City made a choice on a use is irresponsible since no hearings have been conducted. He emphasized that the City has not voted on the property's ultimate use and that all Council has done is move forward with the General Plan Amendment process, noting that no studies have been conducted and no Council vote has occurred. Council Member Heffernan took issue, reiterating that Council chose the Sutherland project from eight options and that it precluded Marinapark's option. He added that the City should evict the residents if residential use is not permitted on tidelands. Mayor Ridgeway noted that they were evicted 15 years ago and that all the residents made a decision when they signed the 1985 lease. He stated that they had the opportunity to live out their term and leave the premise, but they decided not to do that. He indicated that Council should not take the blame and that he would support a third party appraiser review which will take the term and any term premium into consideration. Council Member Adams agreed that it is Council's fiduciary responsibility to make sure that the holdover rent is a fair market rent. Motion by Council Member Adams to authorize that a third party appraiser review the rent amounts using the proposed lease terms and bring the facts back to Council. City Manager Bludau asked that Council also direct staff to provide notice to the residents that their rent will be increasing. Mayor Ridgeway noted that, under Landlord/Tenant Law, the notice would need to include a specific amount. Council Member Adams stated that the appraiser would need to be mutually agreed upon by the City and residents. Mayor Ridgeway indicated that the City should select the appraiser and try to get the residents' concurrence. Council Member Glover suggested sharing the cost of the appraiser with the residents. Mayor Pro Tem Bromberg stated that he was watching the meeting the night Mr. Sutherland was given the exclusive right to look at developing the property and that nothing came out of that meeting that suggested to him that the City was supporting a hotel. He added that there were a great deal of conditions placed on the project. Mr. Burnham stated that, as part of the motion, Council could direct staff to meet with the residents and try to develop an agreed upon fair market rent and come back to Council, or come back with a process if an agreement cannot be reached. He indicated that, if the City can use Mr. Hansen as an advisor instead of an appraiser, they may be able to come back to Council with numbers that everyone is comfortable with. Volume 55 - Page 63 City of Newport Beach City Council Minutes March 12, 2002 Council Member Adams believed that Council cannot be criticized for making a subjective decision on the rents if a neutral third party is used, and that he would feel more comfortable if this tact was taken. Council Member Heffernan asked, if Council wanted to proceed with a park on the site, whether the City would have any liability to Mr. Sutherland and Mr. Talla. Mr. Burnham stated that the City would have liability to Mr. Sutherland in some uncertain amount because Council has entered into an agreement that says, if they get all of the approvals needed to build a hotel on the site, Council is then committed to enter into discussions, in good faith, to try to come up with a long term lease that would enable Mr. Sutherland to develop the project. He clarified that Mr. Sutherland would need to get a General Plan Amendment, Greenlight approval, and a Coastal Development Permit. Assistant City Manager Wood believed that there may be a 30 -day cancellation provision in the agreement. Mr. Burnham stated that, assuming the City does not exercise this provision, Mr. Sutherland only has the right to negotiate with Council once he has secured all required land use approvals and permits. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None P. MOTION FOR RECONSIDERATION —None. Q. ADJOURNMENT — 10:00 p.m. The agenda for the Regular Meeting was posted on March 6, 2002, at 1:40 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. The supplemental agenda for the Regular Meeting was posted on March 8, 2002, at 2:15 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 55 - Page 64 INDEX