HomeMy WebLinkAboutPC2024-001 - DENYING THE APPEAL AND MODIFYING THE HEARING OFFICER’S DETERMINATION FOR A REASONABLE ACCOMMODATION TO ALLOW CHICKENS AT A SINGLE-UNIT RESIDENTIAL PROPERTY LOCATED AT 1691 ORCHARD DRIVE (PA2022-098)RESOLUTION NO. PC2024-001
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, DENYING THE APPEAL
AND MODIFYING THE HEARING OFFICER’S DETERMINATION
FOR A REASONABLE ACCOMMODATION TO ALLOW
CHICKENS AT A SINGLE-UNIT RESIDENTIAL PROPERTY
LOCATED AT 1691 ORCHARD DRIVE (PA2022-098)
THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS
FOLLOWS:
SECTION 1. STATEMENT OF FACTS.
1. A request for a reasonable accommodation was filed by Mary Alice Campbell (“Applicant”),
to provide relief from Newport Beach Municipal Code (“NBMC”) Section 7.12.010 (Keeping
of Livestock) to allow 10 chickens on a single-unit residential property within a single-unit
residential neighborhood for an individual with a disability.
2. The subject property is located at 1691 Orchard Drive, and legally described as Lot 4 of
Tract No. 4146 (“Property”). The Property is designated Single Unit Residential Detached
(RS-D) by the General Plan Land Use Element and is located within the Residential Single
Family (RSF) area of the Santa Ana Heights Specific Plan (SP-7) Zoning District within a
single-unit residential neighborhood. The Property is not located within the coastal zone.
3. A closed hearing before the Hearing Officer was held on July 13, 2023, in the Corona del
Mar Conference Room (Bay 1E) located at 100 Civic Center Drive, Newport Beach,
California. Evidence, both written and oral, was presented to, and considered by, the
Hearing Officer at this hearing.
4. The Hearing Officer adopted Hearing Officer Decision No. HO2023-001 approving the
keeping of three chickens as a reasonable accommodation for the Applicant. The Hearing
Officer’s decision was published on August 11, 2023.
5. On August 25, 2023, the Applicant filed an appeal of the Hearing Officer’s decision. The
appeal indicated that the ruling failed to accurately understand the nature of the service
that the chickens provide, and incomplete information caused an inaccurate assessment
of the risk of nuisance to neighbors.
6. A public hearing was held by the Planning Commission on January 4, 2024, in the City
Council Chambers at 100 Civic Center Drive, Newport Beach, California. A notice of time,
place and purpose of the public hearing was given in accordance with California
Government Code Section 54950 et seq. ("Ralph M. Brown Act”) and Chapter 20.62
(Public Hearings) of the NBMC. Evidence, both written and oral, was presented to, and
considered by, the Planning Commission at this public hearing.
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Planning Commission Resolution No. PC2024-001
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SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION.
A project which a public agency rejects or disapproves is statutorily exempt and not subject to
review under the California Environmental Quality Act (“CEQA”) pursuant to Article 18, Section
15270 (Projects Which Are Disapproved) of the CEQA Guidelines, California Code of
Regulations, Title 14, Division 6, Chapter 3.
SECTION 3. REQUIRED FINDINGS.
Pursuant to Section 7.12.010 (Keeping of Livestock) of the NBMC, the keeping of chickens is
prohibited within the City except where specifically permitted under the provisions of Title 20
(Planning and Zoning) or, as requested here, upon approval of a reasonable accommodation.
1. The argument was made that the City cannot apply additional NBMC requirements to
Santa Ana Heights pursuant to the Pre-Annexation Agreement. However, the Pre-
Annexation Agreement was not intended to permanently freeze the land use
requirements for Santa Ana Heights but rather to ensure the City/County were meeting
the requirements to receive tax increment as a redevelopment project area under
California Health and Safety Code Section 33000 et seq. (“Community Redevelopment
Law”). The Pre-Annexation Agreement should not be interpreted as prohibiting the City
from applying other NBMC provisions intended to prevent public nuisances that protect
the public health, safety and welfare of the community nor should Section
20.90.080(D)(7) (Residential Single-Family District: SP-7 (RSF) of the NBMC be
interpreted as allowing the keeping of chickens as explained below.
2. Prior to Santa Ana Heights annexation into Newport Beach, the County of Orange
(“County”) adopted a redevelopment plan for Santa Heights as a redevelopment project
area, pursuant to the Community Redevelopment Law which reallocated a portion of
property taxes to redevelopment agencies to promote the redevelopment of blighted
areas.
3. Santa Ana Heights was annexed into Newport Beach pursuant to the Pre-Annexation
Agreement entered on September 10, 2002, between the County, the Orange County
Development Agency, and the City of Newport Beach.
4. The Pre-Annexation Agreement included the County’s Santa Ana Heights Specific Plan
land use and zoning regulations to “encourage development of the Project Area that will
generate sufficient tax increment revenues to repay the redevelopment bonds issued by
the AGENCY to finance capital projects in the Santa Ana Heights Project Area, and
meet the AGENCY’s obligations to contribute to the repayment of the COUNTY’s
bankruptcy recovery bonds in accordance with the provisions of Health and Safety Code
Section 336770.9 and 33670.95.
5. In accordance with this objective of ensuring the City apply land use regulations in
furtherance of the Community Redevelopment Law, the Pre-Annexation Agreement
provides that the land use and zoning regulations of the Specific Plan would not be
amended by the City without the prior written consent of the County and the Orange
County Development Agency.
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6. However, in 2011, the California Supreme Court delivered its decision in California
Redevelopment Association v. Matosantos, (2011) 53 Cal. 4th 231 upholding the
dissolution of the Community Redevelopment Law. As a result, redevelopment agencies
and their redevelopment project areas, including the Santa Ana Heights Project, were
dissolved throughout the State. Therefore, it stands to reason whether the Pre-
Annexation Agreement’s land use and zoning limitations intended to “encourage
redevelopment of the Project Area” was not dissolved by operation of law consistent
with the Matosantos decision.”
7. Additionally, even assuming the Pre-Annexation Agreement’s land use and zoning
limitations remain in place, the Pre-Annexation Agreement itself does not exclude
application of other provisions of the NBMC to Santa Ana Heights. The well-established
rules of statutory construction require statutes to be constructed with reference to the
whole system of law of which it is a party, so that all may be harmonized and have effect.
Moore v. Parish, (1982) 32 Cal. 3d 535, 541.
8. The only provision within the Pre-Annexation Agreement governing interpretation of
conflicting provisions states that in the event of any conflict between the Redevelopment
Plan and the City’s General Plan or Specific Plan with regard to land uses or other
zoning or land use regulation, the Redevelopment Plan, which is now dissolved, shall
prevail. See Section 2.1 of the Pre-Annexation Agreement (Exhibit A).
9. In harmonizing Section 20.90.080(D)(7) with other provisions of the NBMC related to
the keeping of animals, the keeping of chickens is not permitted, thus, requiring a
reasonable accommodation.
10. Section 20.90.080(D)(7) (Residential Single-Family District: SP-7 (RSF) – Accessory
Uses Permitted) of the NBMC allows the noncommercial keeping of pets and animals
weighing less than 300 pounds. This section does not specify the types of pets and
animals that would be allowed, nor does it obviate other provisions of the NBMC related
to the keeping of animals.
11. Section 7.12.010 (Keeping of Livestock) of the NBMC indicates that no person shall
keep any cow, pig, goat, horse, mule, poultry or any other animal commonly considered
livestock within the City except where specifically permitted under the provisions of Title
20 (Planning and Zoning).
12. Table 4-1 (Animal-Keeping Standards) of Section 20.48.040 (Animal-Keeping) of the
NBMC categorizes poultry as a domestic farm animal where a maximum of two adult
chickens are only allowed in the Residential-Agricultural (RA) Zoning District.
13. The provisions of Section 20.90.080(D)(7) have not been amended and are still upheld
as indicated in the Pre-Annexation Agreement. However, the keeping of animals must
also comply with Title 7 (Animals) and other sections of Title 20 (Planning and Zoning)
of the NBMC. In this instance, the noncommercial keeping of pets and animals weighing
less than 300 pounds may be kept on the Property if such animal is not prohibited
elsewhere in the NBMC.
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Pursuant to NBMC Sections 20.64.020(C) and 20.64.030(C)(3)(a), a decision of the Hearing
Officer is appealable to the Planning Commission and the review is de novo. Pursuant to
Section 20.52.070(D)(2) (Reasonable Accommodation – Findings and Decision) of the NBMC,
the review authority’s decision shall be based on consideration of the following findings, all of
which are required for an approval:
Finding:
i. That the requested accommodation is requested by or on behalf of one or more individuals
with a disability protected under the Fair Housing Laws.
ii. That the requested accommodation is necessary to provide one or more individuals with a
disability an equal opportunity to use and enjoy a dwelling.
iii. That the requested accommodation will not impose an undue financial or administrative
burden on the City as "undue financial or administrative burden" is defined in Fair Housing
Laws and interpretive case law.
iv. That the requested accommodation will not result in a fundamental alteration in the nature
of the City's zoning program, as “fundamental alteration" is defined in Fair Housing Laws
and interpretive case law.
v. That the requested accommodation will not, under specific facts of the case, result in a
direct threat to the health or safety of other individuals or substantial physical damage to
the property of others.
Factors for Consideration:
In making the above findings, specifically whether the requested accommodation is the
minimum necessary to provide one or more individuals with a disability an equal opportunity to
use and enjoy a dwelling and whether the requested accommodation would require a
fundamental alteration in the nature of a City program, the Planning Commission may consider,
but is not limited to, the following factors (set forth in NBMC Section 20.52.070(D)(3)-(4)
(Reasonable Accommodations – Factors for Consideration)):
i. Whether the requested accommodation will affirmatively enhance the quality of life of one
or more individuals with a disability.
ii. Whether the individual(s) with a disability will be denied an equal opportunity to enjoy the
housing type of their choice absent the accommodation.
iii. Whether the requested accommodation would fundamentally alter the character of the
neighborhood.
iv. Whether the accommodation would result in a substantial increase in traffic or insufficient
parking.
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v. Whether granting the requested accommodation would substantially undermine any
express purpose of either the City’s General Plan or an applicable specific plan.
The Planning Commission is unable to make all the required findings to approve the requested
reasonable accommodation, in particular because the requested accommodation would (a)
impose an undue financial or administrative burden on the City, (b) result in a fundamental
alteration in the nature of the City’s zoning program, and (c) would result in a direct threat to
the health or safety of other individuals or substantial physical damage to the property of others.
Facts in Support:
The Planning Commission’s decision is based on the following facts:
14. The letters from Drs. Fertal and Safer and the Applicant’s representations do not support
why 10 chickens are necessary for emotional and physical support. Moreover, it is
unclear if Drs. Fertal and Safer were aware of the existing nuisance conditions over the
past two years associated with the 10 chickens as detailed below.
15. Neighboring property owners have provided written correspondence and photographs
that have shown the condition of the Applicant’s property and the effects on their own
property from residing in proximity to the Applicant which include an increase in noise,
odor, and vermin. Photographs provided depict the conditions of the yard and the
presence of vermin on neighboring yards.
16. The evidence of these nuisance conditions is further supported by testimony and written
and photographic evidence provided by City of Newport Beach Animal Control Officer
Ott.
17. The keeping of 10 chickens on a residential property that is not zoned for the keeping
of livestock would constitute an undue financial or administrative burden under the
California Code of Regulations (“CCR”), Title 2, section 12179. Pursuant to 2 CCR
section 12179(d), the following factors are to be considered when evaluating whether a
reasonable accommodation would impose an undue financial or administrative burden:
a. The cost of the requested accommodation or the cost of a requested modification
if the person considering the request is paying for the modification pursuant to 2
CCR section 12181(h);
b. The financial resources of the person or persons who have a duty under the
California Fair Employment and Housing Act (Government Code section 12900
et seq.) to provide the accommodation or the financial resources of that person
or persons if they are the persons obligated to pay for the modification pursuant
to 2 CCR section 12181(h);
c. The benefits that a proposed alternative accommodation or modification would
provide to the individual with a disability;
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d. The availability of alternative accommodations or modifications that would
effectively meet the disability-related needs of the individual with a disability;
e. Where the entity being asked to make the accommodation or the entity being
asked to pay for the modification under 2 CCR section 12181(h) is part of a larger
entity, the structure and overall resources of the larger organization, as well as
the financial and administrative relationship of the entity to the larger
organization. In general, a larger entity with greater resources would be expected
to make accommodations and modifications requiring greater effort or expense
than would be required of a smaller entity with fewer resources; and
f. Whether the need for the accommodation or modification arises from the owner's
failure to develop, maintain or repair the property as required by law or contract,
or to otherwise comply with related legal obligations such as circumstances
covered by California building codes or state or federal accessibility design and
construction standards, in which case the defenses of fundamental alteration and
undue financial and administrative burden do not apply.
18. With the 10 chickens currently at the Property, the Newport Beach Police Department’s
(“NBPD”) Animal Control Unit has responded to 20 complaints and responded to
approximately 10 resident complaints associated with the existing conditions at the
Property in addition to several follow-ups and welfare checks to the Property within the
past two years alone. The complaints received pertained to vermin, noise and odors
from the Property.
19. The 10 chickens currently present at the Property have generated a considerable
number of complaints and nuisance conditions as described in written correspondence
from neighboring property owners. Written statements describe the increase in vermin,
such as rats, entering the neighboring properties and photographs provided show the
conditions of the Applicant’s yard. The odor, noise, and vermin have made it increasingly
difficult for the neighboring properties to use and enjoy their yards.
20. Pursuant to Section 7.20.050 (Maintaining Sanitary Conditions) of the NBMC, the
chicken coop must be kept clean and sanitary and any animal waste, uneaten feed, or
other matter that emits an offensive odor or encourages the breeding of flies or other
insects shall be collected daily and not allowed to accumulate. Photographs and written
statements from the neighboring property owners as well as investigations by Animal
Control Officer Ott have shown that this condition of the NBMC is unable to be met.
21. The Property has a history of code enforcement violations. In 2016, Code Enforcement
addressed nuisance conditions at the Property related to flooding and maintenance
issues with the interior and exterior of the Property. Additional code enforcement
violations were issued in 2022 related to maintenance of the exterior of the Property.
The history of code enforcement cases on the Property indicates continuing
maintenance issues.
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22. The keeping of 10 or even three chickens on the Property requires an additional level of
care and clean-up in order to ensure that the chickens are kept in a safe, humane, and
clean environment. Applicant’s inability to keep chickens in a manner required by NBMC
section 7.20.050 has resulted in nuisance conditions. If the Applicant were allowed to
keep any chickens, continuous welfare checks from the Animal Control Unit would likely
be required.
23. The physical support that the chickens allegedly provide the Applicant in terms of helping
maintain her yard, including disposal of fallen fruit and limiting shrubbery and hedge
overgrowth, can be achieved through other allowed means and services that would not
create or contribute to nuisance conditions of vermin, noise, and odors.
24. Approving the Applicant’s requested accommodation would result in a fundamental
alteration in the nature of the City’s zoning program. Comprehensive zoning regulations
lie within the police power of local governments wherein uses are established consistent
with general plan land-use designations and are often separated by an intermediate
district as a buffer. Regulations specify the intensity or density of use, with an emphasis
on what is not allowed. Village of Euclid v. Ambler Realty Co., 272 US 365 (1926).
25. Whether a requested accommodation would fundamentally alter the nature of a zoning
program will be analyzed on a case-by-case basis. In Kulin v. Deschutes County, 872
F. Supp. 2d 1093 (2012), the plaintiff constructed a warehouse on his property to run
his home business, which was in violation of the county’s Home Occupation Code. The
Home Occupation Code prohibited the use of more than 35% of the floor area of one’s
dwelling (which included one accessory structure) for a home occupation and the
employment of more than two employees. Id. At 1097. Plaintiff, who was legally blind
and suffered from osteoarthritis, sought an accommodation to the limitations pursuant
to the ADA. Id. At 1096.
With respect to the plaintiff’s requested reasonable accommodation to the floor area
restriction, the Kulin court upheld the plaintiff’s use of the warehouse for storage space,
finding that the accommodation would not be unduly burdensome and would not create
a fundamental alteration to the Home Occupation Program. The court found that costs
to the County were not clearly disproportionate to the benefits produced since the
County would incur no costs whereas the plaintiff had spent $120,000 to construct the
warehouse after obtaining the required permits. The court further found that the impact
from the warehouse on the surrounding agricultural land use was inconsequential given
the nature and frequency of the package delivery schedule.
In contrast to the situation in Kulin, Applicant’s requested accommodation would result
in a fundamental alteration in the nature of the City's zoning program. With respect to
the cost/benefit analysis, the City has incurred and would continue to incur significant
costs, in terms of the code enforcement costs and the harms to the neighbors stemming
from vermin, noise, and odor nuisance conditions due to the chickens. As evidenced in
the Staff Report and public correspondence, the City has allocated a significant amount
of time and resources addressing nuisance issues associated with the 10 chickens at
the Property. The Property is a residentially zoned property and is surrounding by other
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residentially zoned properties. Livestock is prohibited altogether in this zone so as to
maintain the residential character of the surrounding area. Whereas Kulin obtained a
permit to construct the warehouse and spent $120,000 to do so, the City never approved
Applicant’s keeping of chickens.
26. Requiring a municipality to waive a zoning rule would ordinarily cause a “fundamental
alteration of its zoning scheme if the proposed use was incompatible with surrounding
land uses.” Schwarz v. City of Treasure Island, 544 F.3d 1201, 1220 (2008). The
keeping of chickens on the Property is incompatible with the character and use of the
residential neighborhood. Allowing Applicant to keep chickens would be a fundamental
alteration of the City’s zoning scheme.
27. Title 2 of the California Code of Regulations Section 12179(b)(4) provides that if a
support animal, as defined in subsection 12005(d)(1), is requested as a reasonable
accommodation, the request may be denied if it would constitute a direct threat to the
health or safety of others or would cause substantial physical damage to the property of
others under subsection 12185(d)(9).
28. The keeping of chickens at the subject property would constitute a direct threat to the
safety of others. The keeping of chickens has the potential to attract coyotes to the
neighborhood as the chickens would be a food source, which creates a safety risk for
the neighborhood. The neighborhood is adjacent to two golf courses (Newport Beach
Golf Course and Santa Ana Country Club) and an ecological reserve. In Animal Control
Officer Ott’s experience, open spaces such as these tend to attract coyotes and the
neighborhood is susceptible to coyote activity.
29. The keeping of chickens also constitutes a direct threat to the health and safety of
Applicant’s neighbors, as shown by their written correspondence and photographs that
show the overgrown, unkempt condition of the Applicant’s property and the increasing
presence of vermin such as rats. Based on photographs and site investigations
conducted by staff, there are old cages and crates as well as other debris in the rear
yard. Other photographs show several chickens in cages that do not meet the City’s
requirements for animal keeping and lack all weather enclosures for protection from the
sun and rain. Based on photographic evidence collected from 2021-2023, the existing
chickens are not currently kept or maintained in an acceptable condition and if 10
chickens are permitted to remain onsite, additional nuisances may arise that create
health or safety concerns for nearby residents and the Applicant.
30. Based upon the nuisance conditions caused by the vermin, noise and odor from
Applicant’s chickens and the resulting impact to her neighbors and the residential
community, as described above, approving Applicant’s requested accommodation to let
her keep chickens on her Property would constitute an undue financial or administrative
burden on the City, a fundamental alteration in the nature of the City’s zoning program,
and result in a direct threat to the health or safety of others.
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SECTION 4. DECISION.
NOW, THEREFORE, BE IT RESOLVED:
1. The Planning Commission of the City of Newport Beach hereby finds this project is
statutorily exempt from the California Environmental Quality Act under Article 18, Section
15270 (Projects Which Are Disapproved) of the CEQA Guidelines, California Code of
Regulations, Title 14, Division 6, Chapter 3.
2. The Planning Commission of the City of Newport Beach hereby denies the appeal and
modifies and reverses the action of the Hearing Officer, thereby denying Applicant’s
request for a reasonable accommodation (PA2022-098).
3. This action shall become final and effective 14 days following the date this Resolution
was adopted unless within such time an appeal is filed with City Clerk by the provisions
of Title 20 Planning and Zoning, of the Newport Beach Municipal Code.
PASSED, APPROVED, AND ADOPTED THIS 22ND DAY OF FEBRUARY, 2024.
AYES: Barto, Langford, Rosene, and Salene
NOES: None
ABSTAIN: None
ABSENT: Ellmore, Harris, and Lowrey
BY:_________________________
Mark Rosene, Vice Chair
BY:_________________________
Seimone Jurjis, Ex-Officio Secretary
Attachment: Exhibit A – Pre-Annexation Agreement
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EXHIBIT “A”
PRE-ANNEXATION AGREEMENT
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,· .-. •
1 PRE-ANNEXATION AGREE:MENT
2
3 nns AGREEMENT. is entered into the /0.,..day of, ~.l2;,,b:tl . 2002 by and
4 between the COUNTY OF ORANGE. a political subdivision of the State of California. hereinafter
5 referred to as "COUNTY", the ORANGE COUNTY DEVELOPMENT AGENCY. a pubJic body
6 corporate and politic, hereinafter referred to as the "AGENCY", and the CITY OF NEWPORT BEACH,
7 a charter city, hereinafter referred to as "CITY".
8 RECITALS:
9 WHEREAS. the Board of Supervisors of the COUNTY acting pursuant to the Community ·
1 O Redevelopment Law ("CRL") has adopted a redevelopment plan (the "Redevelopment Plan") for a
11
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portion of the unincorporated territory of the COUNTY known as Santa Ana Heights ( the
unincorporated temtory governed by the Redevelopment Plan is referred to in this Agreement as the
"Project Area"); and
. .
. 8l:i 14 WHEREAS, under the CRL, the AGENCY is responsible for implementing and administering
~~ 15 og the Redevelopment Plan; and
i 16
17
18
WHEREAS, the COUNTY has adopted the Santa Ana Heights Specific Plan to regulate land use
and zoning within the Project Area (the ''Specific Plan"); and
WHEREAS. the Redevelopment Plan specifies that the land uses· permitted in the Project Area
19 will be those set out in the Specific Plan; and
20 WHEREAS. in August 2000 the CITY amended its General Plan to include the Specific Plan;
21 and
22 WHEREAS, the AOENCY and COUNTY desire that the Jand use and zoning regulations of the
23 Specific Plan continue in effect in order to encourage development in the Project Area that wm generate ·
24 sufficient tax increment revenues to repay the redevelopment bonds issued by the AGENCY to finance
25 capital projects in the Santa Ana Heights Project Area, and meet the AGENCY's obligation to contribute
26 to the repayment of the COUNTY'S bankruptcy recovery bonds in accordance with the provisions of
27 Health and Safety Code Sections 33670;9 and 33670.95; and
28
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WHEREAS, the CITY is proposing to annex and/or reorganize currently unincorporated
territories adjacent to or within the CITY'S western and northern sphere of influence. including a
portion of the Project Area (the portion of the Project Area proposed to be annexed to the CITY is
referred to in this Agreement as the "Annex Area"); and
WHEREAS, if the Annex. Area is annexed to the CITY. the COUNTY and the AGENCY desire
assurances from the CITY that the land use regulation applicable to the Annex Area will remain as
specified in the Specific Plan and that the CITY will not amend the Specific Plan or its General Plan as
they pertain to the Annex Area without the COUNTY and AGENCY"S prior written consent; and
WHEREAS, after annexation, the CITY desires that the AGENCY cooperate with the crrY in
acquiring land for and constructing .a fire station in the Project Area; and
WHEREAS. the COUNTY and the CITY intend that, upon the effective date of the annexation
of the Annex Area to the CITY, and the CITY providing local municipal services to the Annex Area,
the property tax sharing between the COUNTY and the CITY shall be 70% of the current COUNTY
General Fund share of the 1 % basic property tax levy to the CITY. and 30% to the COUNTY during
the time the AGENCY continues to receive tax increment from the Annexed Area pursuant to Health
and Safety Code Section 33670. and, once the AGENCY is no longer receiving tax increment from the
Project Area, the COUNTY and CITY shall thereafter share the property tax that the COUNTY would ·
have received if the annexation had not occurred, based on the allocation set out in the Master
Property Tax Agreement between the CITY and the COUNTY, to wit: 51.9378% to the CITY and
48.0622% to the COUNTY. In addition to the above, the CITY shall receive 100% of the property tax
revenues from the Annexed Area that, absent annexation, would have been apportioned to the Orange
County Library District and the Orange County Fire Authority; and
WHEREAS, AGENCY is desirous of purchasing a parcel of improved real property in the
Project Area, for purposes of a.community center. which property wiJI be turned over to the CITY upon
the completion of the ~nexation of the Annex Area by the CITY; and
758\08\160800.4
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1 WHEREAS, CITY agrees to accept title to the property that AGENCY acquires for a community
2 center, and thereafter use and maintain the property as a community center, and, upon CITY's
3 acceptance of title. CITY shall pay all use and mainten.ance costs connected therewith.
4
5 NOW THEREFORE. in consideration of the above recitals and of the mutual covenants and for
6 other good and vaJuable consideration, the receipt and sufficiency of which is acknowledged, the
"7 COUNTY. AGENCY and CITY agree as follows:
8
9 1.
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OBJECTIVES AND INTENT.
1.1. Objectives. The objectives of this Agreement are:
6J 12 "' z
1.1.1 Ensure that after the annexation of the Annex Area by the City, the land use and
zoning regulations of the Specific Plan are.not be amended by the CITY without
the prior written .consent of the COUNI'Y and the AGENCY.
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1.1.2. Preserve the AGENCY'S tax increment revenues from the Annex Area after its
annexation by the CITY in order to repay the AGENCY'S redevelopment bonds
issued to finance Project Area capital projects and contribute to the repayment of
the COUNTY'S bankruptcy recovery bonds.
1.1.3 Provide AGENCY cooperation and contribute AGENCY funding for the
acquisition of land, (or provide AGENCY land, if suitable). for, and construction
of, a ·fire station in the_ Annex Area after its annexation to the CITY.
1.1.4 To provide the Santa Ana-Heights and Newport Beach res~dents with·a suitable
community. center to use for community activities and programs. .
1.2. Intent. The COUNTY, AGENCY and CITY. through this Agreement. intend to
24 establish the rights, obligations and. duties of each of them after the CITY'S annexation of the Annex
25 Area in order to accomplishment the objectives of this Agreement.
26
27 2.
28
AMENDMENT OF THE SPEcmc PLAN WITHOUT WRITTEN CONSENT OF
COUNTY AND AGENCY.·
758\08\ 160800.4
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2.1. After the CITY's annexation of the Annex Area. the CITY shall not amend its General
Plan as it pertains to the Annex Area or the Specific Plan without the prior written consent of the
COUNTY and the AGENCY. The CITY also agrees that in the event of any conflict between the
Redevelopment Plan and the CITY's General Plan or Specific Plan with regard to land uses or other
zoning or land use regulation. the Redevelopment Plan shall prevail. Determinations as to whether such
c.onflicts exist and their resolution shall be made by the AGENCY. COUNTY and AGENCY recognize
that CITY' s current effort to revise CITY' s General Plan ("Update .. ) for entirety of Newport Beach may
include the Annex Area. CITY agrees that CITY' s Update, where it applies to the Annex. ~ shall be
submitted to COUNTY and AGENCY for review and approval.
3. VARIATION FROM MASTER PROPERTY TAX AGREEMENT.
3.1. The provisions of the Master Property Tax Agreement between the COUNTY and the
CITY notwithstanding:
.
(a) The COUNTY and the CITY agree that. upon the effective date of the annexation
of the Annex Area to the CITY, and the CITY providing local municipal services to the Annex Area,
the property tax sharing between the COUNTY and the CITY shall be 70% of the cmrent
(preannexation) COUNTY General Fund share of the 1 % basic property tax levy to the CffY. and
30% to the COUNTY during the time the AGENCY continues to receive tax increment from the
Annexed Area pursuant to Health and Safety Code Section 33670; provided, however. in the event the
CITY, in violation of Section 2 above, amends its General Plan or Specific Plan without the prior
written consent of the AGENCY and the COUNTY, then the property tax sharing between the
COUNTY and the CITY shall be 30% of the current (preannexation)COUNTY General Fund share of
the I% basic property tax levy to the CITY, and 70% to the COUNTY.
(b) Once the AGENCY is no longer receiving tax increment from the Project Area, the
COUNTY and CITY shall thereafter share the property tax that the COUNTY would have received if
the annexation had not occurred, based on the allocation set out in the Master Property Tax Agreement
between the CITY and the COUNI'Y, to wit: 51.9378% te the CITY and 48.0622% to·the COUNTY.
provided. however, in the event the CITY, in violation of Section 2 above. amends its General Plan or
758\08\160800.4
DocuSign Envelope ID: 1CBF1A98-5D5C-4234-BB16-1F1AC2D9369E
1 Specific Plan without the prior written consent of the AGENCY and the COUNTY, then the property
2 tax sharing between the COUNTY and the CITY shall be 30% of the current
3 (preannexation)COUNTY General Fund share of the I% basic property tax levy to the CITY, and 70%
4 to the COUNTY.
5 (c) In addition to the above, the CITY shall receive 100% of the property tax
6 revenues from the Annexed Area that, absent annexation, would have been-apportioned to the Orange
7 County Library District and the Orange County Fire Authority.
8 (d) COUNTY and AGENCY agree, from the effective date of this Agreement
9 forward, AGENCY shall not issue redevelopment bonds backed by tax increment revenue from
10 territory that includes the Annex Area unless the bonds terminate before 2036.
11 The CITY recognizes and acknowledges that so long as the AGENCY receives tax increment
m 12 !2
pursuant to Health and Safety Code Section 33670, the forgoing allocation of property taxes between
::, ~ I 13 · the COUNTY and CITY applies only to those property taxes allocable to the COUNTY and CITY
§ ~ 14 pursuant to subsecti~n (a) of Health and Safety Code-Section 33670 and that the balance of the · uO
~~ 15 ts§
I.I.I
property taxes form the Annex Area will be allocated to the AGENCY as tax increment pursuant to
~ 16 subsection (b) of Health and Safety Code Section 33670.
0
17 4. AGENCY COOPERATION TO ACQUIRE AND CONSTRUCT A FIRE STATION IN
18 SANTA ANA HEIGHTS.
19 4.1. After the annexation of the Annex Area by the City~ the AGENCY shall cooperate with
20 and assist the CITY in locating and financing the acquisition of suitab1e land for a fire station to serve
21 Santa Ana Heights, adjacent unincorporated areas (via mutual and automatic aid), and John Wayne
22 Airport.
23 4.2. After annexation of the Annex Area by the CITY, the AGENCY shall cooperate and
i
24 assist the CITY in financing the construction of a fire station to serve Santa Ana Heights, adjacent
25 unincorporated areas (via mutual and automatic aid), and John Wayne Airport .. After its construction,
26 the CITY, at its sole cost, will equip and operate the fire station.
27 4.3. The parties understand and agree that the AGENCY's financing of_ the costs of the land
28 for and construction o_f the fire station is subject to and will require public hearings and the making of
758\08\ 160800.4
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1 findings pursuant to Health and Safety Code Sections 3~5 and 33679 and that they will cooperate to
2 hold the requisite hearings and make the findings before the Board of Supervisors of the COUNTY and
3 City Council of the CITY so as to satisfy the requirements of HeaJth and Safety Code Section 33445 and
4 33679. ·
5 s. AGENCY COOPERATION TO PROVIDE LAND FOR COMMUNITY CENTER.
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5.1. After the annexation Qf the Annex Area by the CITY, the AGENCY shall cooperate with
and assist the CITY in locating and financing the acquisition of suitable land for a community center to
serve the Annex Area as well as the balance of the Project Area.
5.2. Once the property for the community center property has been identified, acquired by the
AGENCY and conveyed to the CITY. the CITY will. at the CITY's so)e cost. make aJ) improvements to
that property necessary for its use as a community center and shall operate the property as a community
center. The AGENCY deed of the property to the CITY shall contain a right of reverter giving the
AGENCY the right to revest title to the property in the AGENCY in the event the CITY fails to operate
-
the property as a community center for a period of at least six consecutive months.
5.3. The parties understand and agree that the AGENCY's financing of the costs of the )and
for the community center is subject to and will require the making of findings pursuant to HeaJth and
Safety Code Section 33445 and that they wrn cooperate to facilitate the making of the requisite findings
before the Board of Supervisors of the COUNTY and City Council of the CITY so as to satisfy the
requirements of Health and Safety Code Section 33445.
6. MISCELLANEOUS PR.OVlSIONS
6.1. Entire Agreement.
This Agreement constitutes the entire Agreement between the parties with respect to the
atters stated herein. All previous proposals, offers. discussions. preliminary understandings, and other
ommunications relative to this Agree~ent, oral or written, are hereby superseded, except to the extent
. at they have incorporated into this Agreement. No exceptions, alternatives or substitutes of any of the
enns, conditions and/or provisions of this Agreement shall be considered valid ~less specifically agreed
28 o in writing by both parties.
758\08\ 160800.4
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ril "' s~ ~z ~~ oia. uo !~ ~::, oo wU
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l· 6.2. Amendments.
2 No alteration or :variation of the terms of this Agreement shall be valid ~less made in
3 writing and signed by the parties; no oral understanding or agreement not incorporated herein shall be
. 4 binding on either of the parties.
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6.3. Consent To Breach Not Waiver.
No term or provision of this Agreement shall be deemed waived ·and no breach excused,
unless such waiver or consent shall be in writing and signed by the party claimed to have-waived or
consented.
Any consent by any party to, or waiver of. a breach by the other, whether express or
implied. shall not constitute consent to, waiver of, or excuse for any other different or subsequent
breach.
6.4. Specific Performance.
The parties acknowledge that monetary damages would be inadequate to remedy any
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breach of this Agreement by either party. Accordingly, the parties agree that any breach of this
Agreement shall entitle the non-breaching party to file an action for specific performance in a court of
competent jurisdiction. In no event shall either party be liable for monetary ~ges in the event of a
17 breach of this Agreement.
18 6.5. Counterparts.
19 This Agreement may be executed by the parties in countetparts, which counte:rp·arts shall
20 be construed together and have the same affect as if all of the parties had executed the same instrument.
21
22
6.o. Further Actions and Instruments.
Each of the parties shall cooperate with and provide reasonable assistance to the other to
23 the extent contemplated by this Agreement to achieve the objectives of this Agreement. Upon the
24 request of either party at any time, the other party shall promptly execute, with acknowledgement or
25 affidavit if reasonably required, and file or record instruments and writing. The parties shall also take
26 any action as may be reasonably necessary under the terms of this Agreement to carry out the intent and
27 to achieve the objectives of this Agreement.
28 6. 7. Indemnification.
758\08\ 160800.4
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CITY shall defend, indemnify, and hold harmless the COUNTY. the AGENCY, and its
officers, employees and agents with respect to any claim, damage, loss, cause of action, lawsuit or
proceeding that arises out of or is in any way related to any act or omission by CITY or its officers,
employees or agents in the perfonnance or non-performance of any duty or obligation pursuant to this
Agreement. COUNTY and AGENCY shall defend, indemnify, and hold harmless the CITY and its
officers, employees and agents with respect to any claim, damage, loss, cause of action, lawsuit or
proceeding that arises out ofor is in any way related to any act or omission by COUNTY, AGENCY or
its officers, employees, or agents in the performance or non-performance of any duty or obligation
pursuant to this Agreement.
6.8. General Law and Venue.
This AGREEMENT has been negotiated and executed in the state of California and shall
be governed by and construed under the laws of the state of Califomi~ In the event of any legal action
to enforce or interpret this AGREEMENT. the sole and exclusive venue shall be a court of co~petent
jurisdiction located in Orange County, California, and the parties hereto agree to and do hereby submit
to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. Furthermore,
parties specifically agree to waive any and all rights to request that an action be transferred for trial to .
another county.
6.9. Waiver or Jury.
Each party acknowledges that it is aware of and has·had the opportunity to seek advice of
counsel of its choice with respect to its rights to trial by jury, and each party, for itself and its successors,
creditors, and assigns, does hereby expressly and knowingly waive and reJease all such rights to trial by
\
jury in any action, proceeding or counterclaim brought by any party hereto against -the other (and/or
against its officers, directors, employees, agents, or subsidiary or affiliated entities) on or with regard to
any matters whatsoever arising out of or in any .. way connected with this Agreement and/or any other
claim of injury or damage.
6.10. Heading/Severability.
758\08\ 160800.4
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The various headings and numbers herein. the grouping of provisions of this Agreement
into separate clauses and paragraphs, and the organization hereof are for the purpose of convenience •
only and shall not limit or otherwise affect the meaning hereof.
If any term, covenant. condition or provision of this Agreement is held by a court of
competent jurisdiction to be invali~ void or unenforceable. the remainder of the provisions hereof shall
remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.
6.11. Interpretation.
This Agreement has been negotiated at arm's length and between persons sophisticated
and knowledgeable in the matters dealt with in this Agreement. In addition, each party bad been
represented by experienced and knowledgeable independent legal counsel of their own choosing or has
knowingly declined to seek such counsel despite being encouraged and given the opportunity to do so.
Each party further acknowledges that they have not been influenced to any extent whatsoever in
executing this Agreement by any other party hereto or by any person representing them, .or both.
Accordingly. any rule or law (inclucting California Civil Code Section 1654) or legal decision that woul
require interpretation of any ambiguities in this Agreement against the party that has drafted it is not
applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner
to effect the purpose of the parties and this Agreement.
6.12. Authority.
The parties to this Agreement represent and warrant ~t this Agreement has been duly
authorized and executed and constitutes the legally binding obligation of their respective organization or
entity, enforceable in accordance with its terms.
II
23 II
24 II
25 II
26 //
27 II
28 II
758\08\ 160800.4
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1 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
2 year dated below.
3 DATED: Se~ /0 ,2002
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SIGNED AND CERTIFIED THAT A COPY OF
THIS DOCUMENT HAS BEEN DELNERED
TO THE CHAIR OF THE BOARD AND THE
16 CHAIR OF THE BOARD ACTING AS THE
ORANGE COUNTY DEVELOPMENT AGENCY
Clerk of the Bo
17
18
19 County of Orange, California
20 APPROVED AS TO FORM:
21 "· . ,
COUNTY COUNSt·
By ~ -• ~h--::
22 Robert: Austin, Deputy
23 DATED: q_ \ s , 2002
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26 DATED: l, D/;"c;. l 7
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758\08\160800.4
,2002
COUNTY OF ORANGE, a political
subdivision of the State of California
By~£~ hairofltsBoard o upervisors
"COUNTY"
and
g~~o ,2002
DEVELOPMENT AGENCY, a public body
corporate and politic
By=/?~
ChairofitsBoard of Supervisors, Acting
as the chair of the Board of the Orange County
Development Agency
"AGENCY"
DocuSign Envelope ID: 1CBF1A98-5D5C-4234-BB16-1F1AC2D9369E
1 Mayor of the City of Newport Beach
2 ASTOFORM:
3
4 City Attorney for the City of
5
Newport Beatl ,2002 DATED: l~ ,b
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758\08\160800.4
DocuSign Envelope ID: 1CBF1A98-5D5C-4234-BB16-1F1AC2D9369E
TO:
FROM:
SUBJECT:
Members of the Newport Beach City Council
Dave Kif£, Assistant City Manager
Resolution 2002-_ and Memorandum of Understanding (M
Relating to Santa Ana Heights, Bay Knolls, and Emerson/i
Annexations ·
8Y1MECIIY CIIYOF NEWPORJIIACII
) AUG 1 3 2002
'v--'UJ o-C O i -S S'
===:=======================o..o====~
RECOMMENDED
ACTIONS:
BACKGROUND:
(l} Adopt Resolution 2002-_ relating a property tax exchange agreement for the
City's pending annexation of three wtincorporated areas between Newport
Beach and Costa Mesa.
(2) Authorize the City Manager to enter into a Memorandum of Understanding
(MOU) substantially similar to the attached draft MOU relating to the Santa
Ana Heights Specific Plan and the City's operation of a fire station in Santa
Ana Heights.
State law (the Cortese-Knox-Hertzberg Local Government Reorganization Act of
2000 -Government Code §56000 et seq.) governs the way cities, counties, and
special districts address boundary issues like incorporations, annexations,
detachments, changes in "spheres of influence", mergers and consolidations, and
combinations of these actions called "reorganizations." Readers can access the
Act at www.leginfo.ca.gov.
The Act describes the membership and role of the Local Agency Formation
Commission (LAFCO) in each county. Orange County LAFCO, a seven-member
body that meets monthly in Santa Ana, addresses boundary changes for our
region (www.odafco.ca.gov).
On September 26, 2000, the City Council adopted Resolution 2000-81 directing
City staff to process Ill'! annexation application for the Newport Coast, Santa Ana
Heights, and the Bay Knolls community. The City filed its application to annex
these territories on March 19, 2001. The Newport Coast portion of the City's
annexation effort became effective January 1, 2002. The City Council added
another neighborhood (about nine homes in the Emerson/Oturchill tract) to its
pending application on May 28, 2002, when it adopted Resolution 2002-36.
The east Santa Ana Heights and Bay Knolls/Emerson annexations are
anticipated to become effective July 1, 2003 following a LAFCO hearing in
September 2002.
Part I: Proposed Resolution -Property Tax Exchange Agreement. One of the last
steps before LAFCO can hear the City's application for any annexation is the
adoption by the City Council and the Orange County Board of Supervisors of
DocuSign Envelope ID: 1CBF1A98-5D5C-4234-BB16-1F1AC2D9369E
. -··-····· ... --· ., ................. ··-.. ·~ -· .. ... ~=::;1t11..~!J r~~:::-.;!~!! =i!:
l : ..... 14.~-~~ T~~i~~T'!t.:"!•; ::;~. \' ··:·:
• • P11ge 2
nearly-identical resolutions directing the transfer and allocation after annexation
of the 1 % Basic Levy that all property owners pay. In most of Newport Beach,
the city government itseH receives about 17% of the 1 % Basic Levy paid by
Newport Beach property owners, with the remaining 83% going to schools,
community colleges, the County of Orange, and special districts.
On October 28, 1980, the City and the County of Orange entered into a Master
Property Tax Transfer Agreement (MPIT A) governing the exchange of the 1 %
Basic Levy in future annexations. The MPIT A determines how the City and the
County split that portion of the Levy that goes today to the County General
Fund. The Agreement directs that the City and the County always follow the
following ratio for any annexation:
0.51937804992 to the City and
0.48062195008 to the County.
In most circumstances, the :MP'IT A would be appropriate to use for east Santa
Ana Heights and Bay Knolls/Emerson. But the County and the City -in an
attempt to assist the County in" getting out of the municipal service business" -
have discussed providing a small incentive for Newport Beach to also annex
smaller unincorporated islands between Newport Beach and Costa Mesa that
remain administered by the County's redevelopment agency ("RDA") and thus
have a significant portion of their total property tax apportionments restricted
(see the next section for more information about how redevelopment works).
As such, the attached resolution proposes a split different from the MPITA for
the three annexation areas, but only for the property tax base that does not go to
redevelopment and only for that share of the properly tax base that today goes to
the County General Fund. The City and the County propose that, following
annexation, the non--RDA property tax share that currently goes to the County
General Fund be split in the following manner:
0.70 to the City and
0.30 to the County.
Because the County Board of Supervisors is directed by State Law to act on
behalf of special districts to apportion property taxes from special purpose
districts in an annexation, the proposed resolution directs the Board to also
apportion 100% of the non-RDA 1 % Basic Levy now received by the Orange
County Fire Authority the Orange County Library Disbict to the Oty upon the
annexation's effective date.
And a Link to the Recent Past. In 2001, the City and the County adopted joint
resolutions for the Oty's proposed Newport Coast annexation that directed the
County to, if the City was successful in annexing Bay Knolls at a later date,
provide that the property tax apportionment of the County General Fund
amounts from the Newport Coast would increase to:
0.5i937804992 to the City and
0.42062195008 to the County.
.. DocuSign Envelope ID: 1CBF1A98-5D5C-4234-BB16-1F1AC2D9369E
I
Page 3
Part II: An MOU -City Compliance with the Santa Ana Heights Specific Plan &
the Operation of a new Fire Station. The County of Orange1s redevelopment
agency (called the Orange County Development Agency or OCDA) coordinates
specific public works projects in many of the unincorporated islands affected by
our annexation proposal. Like any redevelopment agency, OCDA funds capital
projects for a 11blighted11 area by selling bonds based on whaes called property tax
"increment"
Property tax increment is the amount of property taxes generated during and
after an area is redeveloped above a base amount State law directs that property
taxes at or below the base be apportioned to all of the entities that typically get
property taxes -schools, community colleges. special districts, and more. But
everything above the base (with a few exceptions for growth and for schools) can
be directed to a redevelopment agency. The agency then issues redevelopment
bonds that will construct the improvements based on the anticipated increment
How~ls Funded
$$00.COO..---------------------------
...,.__T....,fllt•Jl;llllc...-io
........ T•klllftlNM~iti;.e•~....-rl
........ ._ .. Nllfllllftll
~------------------,,,,-=----------~
! f31XJ,Qlll t--------------....,....__ _____ ..,,.,.:;__ __ --+-1
&
.... 000+-------------:,,"""-------~--------+-1 ~ Tu lnc,vment f ~-
$11111,GOO ----·----_.,:;.------c;;IF~----------·--·---------"--
$100.000
leo.llllO
2 3 4 5 8 1 8
A redevelopment agency bases its projections of increment upon an adopted
redevelopment plan. The redevelopment plan typically shows where
commercial, residential, or industrial properties will replace blighted areas. For
the eastern Santa Ana Heights community, the redevelopment plan's zoning and
land uses is reflected in the Santa Ana Heights Specific Plan. ·
Base Amount
In anticipation of annexation, on August 8, 2000, the Qty Council adopted
Resolution 2000-73 and thereby adopted the Santa Ana Heights Specific Plan as
the Gty's own plan for eastern Santa Ana Heights. However, to protect the
County's redevelopment bonds and the anticipated fl.ow of tax increment, the
County of Orange has asked the City to confirm that the City will not rezone or
red.esignate land uses within the Santa Ana Heights Specific Plan without the
permission and consent of the Orange County Development Agency (the Orange
DocuSign Envelope ID: 1CBF1A98-5D5C-4234-BB16-1F1AC2D9369E
THIS AGENDA
ITEM:
ATTACHMENTS:
County Board of Supervisors). The proposed MOU would make this
confirmation.
Page 4
Santa Ana Heights Fire Station. In March 2001, the City established a temporary
fire station on Zenith Street serving Santa Ana Heights and the airport area when
a nearby Orange County Fire Authority (OCFA) station closed in December
2000. Since that time, Chief Tim Riley and I have worked to find a site for a
permanent station should the City be successful in annexing eastern Santa Ana
Heights. One such location is on Birch Street in a commercially-zoned area.
The County's executive administration and the County's redevelopment agency
staff are amenable to funding all or a significant part of the construction of the
station provided that the City pledge to equip it, staff it, and provide traditional
mutual and automatic aid to the ~maining unincorporated regions around
eastern Santa Ana Heights. The proposed MOU would make this commitment
on the City's behalf.
This Agenda Item proposes the adoption of a resolution and authorization for
the City Manager to execute an MOU (in substantially similar form to the
attached draft MOU) relating to the City's proposed annexation of Santa Ana
Heights, Bay Knolls, and the Emerson/Churchill tract:
• The Resolution agrees upon a 70% (City) and 30% (County) property tax
split (but only of the base property taxes -not the increment) for each
territory. This same resolution re-affirms the City and the County's
intent to give the Oty a slightly higher percentage of the property tax
generated in the Newport Coast upon annexation of the Bay Knolls·
community; and
• The MOU affirms the Oty's intent to respect the Santa Ana Heights
Specific Plan following annexation and the City's intent to equip and
staff a permanent fire station in eastern Santa Ana Heights following
annexation should the County use redevelopment funds to acquire land
for and to construct the station.
County staff intends to place the MOU (in. substantially similar form) and the
Resolution on the Orange County Board of Supervisors' Agenda also in. August
or early September, 2002.
Attachment A -Resolution 2002-_
Attachment B --Draft MOU
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i Page 5
RESOLUTION 2002-_
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH
RELATING TO A PROPERTY TAX TRANSFER AGREEMENT WITH THE
COUNTY OF ORANGE ON BEHALF OF THE COUNTY,
THE ORANGE COUNTY FIRE AUTHORITY,
AND THE ORANGE COUNTY LIBRARY DISTRICT
RELATING TO THE ANNEXATIONS OF EAST SANT A ANA HEIGHTS,
BAY KNOLLS, AND THE EMERSON/CHURCHILL TRACT
WHEREAS, the City of Newport Beach has proposed the annexation and/ or
reorganization of territories adjacent to or within the City's western and northern sphere of
influence. These territories are known as eastern Santa Ana Heights ("Santa Ana Heights"), Bay
Knolls, and the Emerson/Churchill tract; and ·
WHEREAS, all or portions of these territories are within specific redevelopment project
areas administered by the Orange County Development Agency (OCDA) which direct most
property tax increment to the OCDA; and
. WHEREAS, in January 2002, the City of Newport Beach annexed the Newport Coast
community to Newport Beach; and
WHEREAS, in 1980, the City Council adopted a Master Property Tax Transfer
Agreement with the County of Orange that directs that 0.51937804992 of the County General
Fund share of the 1 % Basic Levy be transferred to the City and 0.48062195008 remain with the
County upon annexation of territory by the City; and
WHEREAS, on August 14 2001, the Board of Supervisors and the City Council agreed to
adjust the Master Property Tax Transfer Agreement for the Newport Coast property tax
apportionments upon a future annexation of the Bay Knolls area in order to assist the Gty of
Newport Beach in funding municipal services to the Bay Knolls area because that territory falls
within an OCDA project area; and
WHEREAS, because the City has its own library system and fire department, the City's
share of the 1 % Basic Levy from the Orange County Library System and the Structural Fire
Fund or Orange County Fire Authority share will equal 100% of these agencies' respective
shares; and
WHEREAS, the eastern Santa Ana Heights, Bay Knolls, and Emerson/Churchill
neighborhoods, being all or in part covered by redevelopment project areas, will produce less
property tax dollars for non-redevelopment public agencies than had the areas not been under
redevelopment; now, therefore be it
RESOLVED by the City Council of the City of Newport Beach that the City Council
hereby:
DocuSign Envelope ID: 1CBF1A98-5D5C-4234-BB16-1F1AC2D9369E
•
1. States that, upon the effective date of each specific annexation, the property tax
transfer between the City of Newport Beach and the County of Orange General
Fund will be as follows for the annexation areas known as eastern Santa Ana
Heights, Bay Knolls, and Emerson/ Churchill:
• 0.70 of the County General Fund share of the.non-redevelopment 1 % Basic
Levy be transferred to the City of Newport Beach; and
• 0.30 shall remain with the County.
Page 6
2. Accepts that, upon the effective date of the City1s annexation of the Bay Knolls
community, the property tax exchange for the previously-certified Newport Coast
Annexation will be as follows:
• 0.52937804992 of ~e County General Fund share of the 1 % Basic Levy
generated from the Newport Coast annexation area be transferred to the
City of Newport Beach; and
• 0.47062195008 shall remain with the County.
3. Requests that, upon the effective date of each specific annexation, 100% of the non-
redevelopment property tax revenues accrued from the reorganized or annexed
territory to the Orange County Library District shall be transferred to the City of
Newport Beach.
4. Requests that, upon the effective date of each specific annexation, 100% of the non-
redevelopment property tax revenues accrued from the reorganized or annexed
territory to the Orange County Fire Authority shall be transferred to the City of
Newport Beach.
ADOPTED this 13th day of August, 2002.
ATTEST:
LAVONNE HARKLESS
City Clerk of Newport Beach
TOD W. RIDGEWAY
Mayor of Newport Beach
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MEMORANDUM OF UNDERSTANDING
BETWEEN THE CITY OF NEWPORT BEACH
AND THE COUNTY OF ORANGE
REGARDING SANTA ANA HEIGHTS
The City of Newport Beach ("City") and the County of Orange {"County"). collectively
known as the Parties, have hereby entered into this Memorandum of Understanding (MOU) on
___ ,, 2002 ("Effective Date") in regards to the following issues in eastern Santa Ana Heights
("SAH"):
1 . City has proposed the annexation and/or reorganization of territories adjacent to or
within the City's western and northern sphere of influence. These territories are known
as eastern SAH, Bay Knolls, and the Emerson/Churchill tract; and
2. County, operating as the Orange County Development Agency C'OCDA"}, has adopted
and confirmed a Redevelopment Plan ("Plan") for the SAH community; and
3. County has adopted the SAH Specific Plan ("Specific Plan") which describes the land
use and zoning associated with the eastern SAH community; and
4. In August 2000, City amended its General Plan to include the Specific Plan in City's
General Plan; and
5. The redevelopment plan relies upon the land uses and zoning described in the Specific
Plan to derive the property tax increment revenue needed to pay back redevelopment
bonds issued for capital projects in the SAH Project Area; and
6. County seeks City's assurance that it will respect the land use designations and zoning
within the Specific Plan so that the Plan can continue, to provide the tax increment
revenue upon which the redevelopment bonds rely; and
7. The Plan and State Law describe various capital improvements that can be constructed
with redevelopment funds; and
8. City has previously expressed its desire to have the OCDA acquire land for and
construct a fire station at a suitable site in Santa Ana Heights and that following OCDA
or private sector construction of such a facility and following City's annexation of the
territory, City would equip and operate the station on behalf of eastern Santa Ana
Heights, the Airport Area, and the remaining unincorporated areas (via existing mutual
and automatic aid agreements);
Now, therefore, the Parties agree as follows:
1. City wlll respect, protect. and not amend without the written consent of County, the land
use designations and zoning within the Specific Plan so that the Plan will continue to
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support adequate property tax generation used to pay principal and interest on
redevelopment bonds issued for the purposes of capital projects within the Project Area;
2. City and County will support OCOA's use of redevelopment funds for the acquisition of
land and the costs of construction of a permanent fire station in eastern Santa Ana
Heights;
3. City shall, following construction and following annexation, equip and staff the station in
a manner that serves the residents and businesses of eastern Santa Ana Heights, the
Airport Area, and nearby unincorporated areas pursuant to existing automatic aid and
mutual aid agreements.
IN WITNESS WHEREOF, County and City have caused this Memorandum of Understanding to be
exeruted the day and year first above written.
CllY OF NEWPORT BEACH
a municipal corporation.
Homer L. Bludau, City Manager
APPROVED AS TO FORM:
Robert L. Burnham, City Attorney
COUNTY OF ORANGE
Dr. Michael Schumacher, County Executive Officer
APPROVED AS TO FORM:
Benjamin DeMayo, County Counsel
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RESOLUTION 2002-.2L
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH
RELATING TO A PROPERTY TAX TRANSFER AGREEMENT WITH THE
COUNTY OF ORANGE ON BEHALF OF THE COUNTY,
THE ORANGE COUNTY FIRE AUTHORITY,
AND THE ORANGE COUNTY LIBRARY DISTRICT
RELATING TO THE ANNEXATIONS OF EAST SANTA ANA HEIGHTS,
BAY KNOLLS, AND THE EMERSON/CHURCHILL TRACT
WHEREAS, the City of Newport Beach has proposed the annexation and/ or
reorganization of territories adjacent to or within the City's western and northern sphere of
influence. These territories are known as eastern Santa Ana Heights ("Santa Ana Heigh.ts"), Bay
Knolls, and the Emerson/ Churchill tract; and
WHEREAS, all or portions of these territories are within specific redevelopment project
areas administered by the Orange County Development Agency (OCDA) which direct most
property tax increment to the OCDA; and
WHEREAS, in January 2002, the City of Newport Beach annexed the Newport Coast
community to Newport Beach; and
WHEREAS, in 1980, the City Council adopted a Master Property Tax Transfer
Agreement with the County of Orange that directs that 0.51937804992 of the County General
Fund share of the 1 % Basic Levy be transferred to the City and 0.48062195008 remam with the
County upon annexation of territory by the City; and
WHEREAS, on August 14 2001, the Board of Supervisors and the City Council agreed to
adjust the Master Property Tax Transfer Agreement for the Newport Coast property tax
apportionments upon a future annexation of the Bay Knolls area in order to assist the City of
Newport Beach in funding municipal services to the Bay Knolls area because that territory falls
within an OCDA project area; and
WHEREAS, because the City has its own library system and fire department, the CitY-s
share of the 1 % Basic Levy from the Orange County Library System and the Structural Fire
Fund or Orange County Fire Authority share will equal 100% of these agencies' respective
shares; and
WHEREAS, the eastern Santa Ana Heights, Bay Knolls, and Emerson/Churchill
neighborhoods, being all or in part covered by redevelopment project areas, will produce less
property tax dollars for non-redevelopment public agencies than had the areas not been under
redevelopment; now, therefore be it
RESOLVED by the Oty Council of the City of Newport Beach that the City Council
hereby:
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1. States that, upon the effective date of each specific annexation, the property tax
transfer between the City of Newport Beach and the County of Oran~ General
Fund will be as follows for the armexation areas known as eastern Santa Ana
Heights, Bay Knolls, and Emerson/ Churchill:
• 0.70 of the County General Fund share of the non4 redevelopment 1 % Basic
Levy be transferred to the City of Newport Beach; and
• 0.30 shall remain with the County.
• The property tax transfer will revert to the ratio specified in the Master
Property Tax Agreement at the time when the Orange County
Development Agency ceases to collect tax increment from the areas subject
to this annexation. Said ratio is as follows: 0.51937804992 of the County
General Fund share of the 1 % Basic Levy be transferred to the Oty and
0.48062195008 remain with the County.
2. Accepts that, upon the effective date of the Oty's annexation of the Bay Knolls
community, the property tax exchange for the previously4Certified Newport Coast
Annexation will be as follows:
• 0.52937804992 of the County General Fund share of the 1 % Basic Levy
generated from the Newport Coast annexation area be transferred to the
City of Newport Beach; and
• 0.47062195008 shall remain with the County.
3. Requests that, upon the effective date of each specific annexation, 100% of the non-
redevelopment property tax revenues accrued from the reorganized or annexed
territory to the Orange County Library District shall be transferred to the Oty of
Newport Beach.
4. Requests that, upon the effective date of each specific annexation, 100% of the non-
redevelopment property tax revenues accrued from the reorganized or annexed
territory to the Orange County Fire Authority shall be transferred to the City of
Newport Beach.
ADOPTED this 13th day of August, 2002
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ATIFST:
Mayor of Newport U
d[JU~m-~
LAVONNE HARKLESS
City Oerk of Newport Beach
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•
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF NEWPORT BEACH
ss.
I, LaVonne M. Harkless, City Clerk of the City of Newport Beach, California, do
hereby certify that the whole number of members of the City Council is seven; that the foregoing
resolution, being Resolution No. 2002-55 was duly and regularly introduced before and adopted by
the City Council of said City at a regular meeting of said Council, duly and regularly held on the
13th day of August, 2002, and that the same was so passed and adopted by the following vote, to wit:
Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway
Noes: None
Absent: None
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 14th day of August, 2002.
A~m,!I~
City Clerk .
Newport Beach, California
(Seal)
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