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HomeMy WebLinkAboutSS3 - Tidelands AdministrationStudy Session - 3/8/98 Agenda Item No. 3 Newport Beach City Council STUDY SESSION ITEM March 8, 1999 TO: MAYOR AND CITY COUNCIL FROM: TIM RILEY, FIRE AND MARINE CHIEF TONY MELUM, DEPUTY FIRE AND MARINE CHIEF DAVE KIFF, ASSISTANT TO THE CITY MANAGER SUBJECT: TIDELANDS ADMINISTRATION RECOMMENDED ACTIONS: a) Direct staff to draft new Council Policy H -1. The Policy shall include: 1) Policy to use a permit for water -only uses and to use a lease for land and water uses; 2) New commercial permit fees based upon most recent appraisal; 3) Guidelines /basic terms and conditions for issuance of permits or leases; 4) Annual inspections of permits and leases. b) Commission an appraisal to determine fair rental value of commercial permits for City tidelands based upon nature of use. c) Direct staff to make any adjustment to non - commercial fees consistent with City Council's direction on tidelands user equity. d) Delay inclusion of future expenses until expenses are more specific, but develop leases and permits so that a factor for future costs may be added later. e) Direct staff to prepare an implementation plan, effective 111/2000 for the approved policies. BACKGROUND: At the City Council's Goal Setting session on January 30, 1999, the Council heard a presentation by City staff relating to the City's administration of its tidelands properties. As a reminder to the public, "tidelands" refers to land owned by the State of California but administered by the City pursuant to various legislative grants. About 1,168 acres of the City's 10,700 acres are tidelands (roughly 10 %). The State of California became the owner of tidelands on admission to the union in 1850. Tidelands are those lands that, on the date of admission, were below the line of mean high tide, subject to changes due to natural processes. Tidelands are subject to a public trust for navigation, commerce and fishing. Beginning in 1919, the State granted certain tidelands to the City (tideland grants). The tideland grants covered only tidelands within our corporate limits so City tidelands are, with few exceptions, limited to Lower Newport Bay. The tideland boundaries in Lower Newport Bay were, for the most part, established by judgments issued in a number of Superior Court lawsuits filed in the late 1920s and early 1930s. Newport Beach City Council Tidelands Administration Paae 2 Tidelands may be used for any purposes consistent with the trust. In some cases, such as portions of Beacon Bay and the Balboa Bay Club property, the Legislature has removed trust restrictions subject to certain conditions including a requirement that revenue generated by the property be used for tideland purposes. Some of the permitted uses are described in the most comprehensive legislative grant commonly known as "the Beacon Bay Bill." On January 30, 1999, staffs presentation asked Council members to offer direction on the following issues relating to tidelands administration: 0 Administration — is the City's use of the tidelands grant consistent with the "general statewide interest" of the trust? (I Equity — has the City set up a payment system that is equitable for specific classes of tidelands users, like mooring permittees, those entities on full tidelands leases, and commercial and residential harbor permittees? © Monitoring — does the City appropriately monitor its tidelands permits and leases to ensure that permittees and lessees are complying with the permit and lease requirements? O Current Cost Recapture — is the City appropriately recapturing its costs relating to current tidelands activities? 0 Future Cost Recapture — what future costs should the City recapture through permits and leases? At the same meeting, council members offered their own requests for additional information prior to taking any action relating to tidelands administration. These "special assignments" included: • SPOT DREDGING — An analysis of the costs of "spot dredging" the lower harbor and the possible purchase by the City of a dredge for ongoing use (DEBAY); • HARBOR PATROL — The pros and cons of the City asking the County to allow the City to begin administering Harbor Patrol operations in Newport Bay (DEBAY); • FEDERAL CHANNEL — A description of the federal navigational channel (DEBAY); • SOURCE CONTROLS — A summary of the County's and City's activities relating to tracking non - point sources of Bay contamination (DEBAY); • FLOW PIPE — A brief analysis of the costs associated with establishing a "flow pipe" to the ocean that may improve water flows in areas like the Rhine Channel and Newport Island (RIDGEWAY); • WHAT OTHERS DO —A summary of the tidelands and harbor operations of the Port of Long Beach, especially as they may relate to areas within community redevelopment areas (GLOVER); • MARINAPARK — A review of the City's options regarding the designation (tidelands or uplands) of the Marinapark area (RIDGEWAY); • PIER RIGHTS — Information about residents' rights to "pier out" into tidelands (O'NEIL); • RENTAL RATES —A summary of other agencies' rental rates for marina operations (NOYES); • FUTURE COSTS —A summary of anticipated future costs of Bay water quality control efforts that today are in the planning stages (NOYES); and • PATTERSON MAP —A small version of the City's Patterson Map (THOMSON, O'NEIL) The attachments attempt to address each of the issues identified above. ATTACHMENTS AND EXHIBITS: Attachment 1 — Proper Uses of Tidelands (page 3) Attachment 2 — Tidelands Fee Comparisons (page 4) Attachment 3 — Current Tidelands Costs (page 8) Attachment 4 — Future Tidelands Costs (page 10) Attachment 5 — Terms /Conditions for Basic Lease (page 13) Attachment 6 — Monitoring Tidelands Activities (page 14) Attachment 7 — Commercial Permit vs. Tidelands Lease (page 15) Attachment 8 -- Special Assignments (page 16) Exhibit A — Commercial Permits (p19) Exhibit B — Tidelands Leases (p23) Exhibit C — Patterson Map (p25) Tidelands Administration Page 3 Attachment 1 Proper Uses of Tidelands Tidelands are subject to variety of restrictions and controls. The State of California owns the tidelands subject to a public trust and the right of the federal government to make improvements to maintain navigation and commerce. The public trust traditionally limited the use of tidelands to commerce, fishing and navigation. More recently, the range of uses protected by the public trust has been expanded to include hunting, swimming, recreational boating and the preservation of lands in their natural state for purposes of habitat or scientific study. The Beacon Bay Bill (Chapter 74 of the Statutes of 1978) is the most comprehensive grant of tidelands to the City. The Beacon Bay Bill grants tidelands to the City on condition they are used "for purposes in which there is a general statewide interest." Permitted uses include "the establishment, improvement and conduct of a public harbor", public marinas, recreational facilities open to the public, and the "preservation and enhancement of the lands in their natural state." Subsequent legislation confirms our right to use tideland revenue to protect and enhance Upper Newport Bay. As noted above, the City administers tidelands on behalf of the State of California. The State agency that oversees our administration is the State Lands Commission. The three - member Commission consists of: --- Membership of the State Lands Commission --- • Lt. Governor Cruz M. Bustamante (D) • State Controller Kathleen Connell (D) • Tim Gage, Director of Finance in the Davis Administration The City of Newport Beach has a good relationship with staff of the State Lands Commission and they have previously indicated that we are administering tidelands in a manner consistent with the public trust and relevant legislative grants. WFIROR Tidelands Administration Paoe 4 Attachment 2 Tidelands Fee Comparisons A comparison of tidelands fees in Newport Harbor and in other regions What are the classes of permits in the City? The City of Newport Beach uses four separate categories of permit fees — they include: ➢ Commercial Permits (66) - Fees for current fair rental value based upon appraisal done in 1989 which set the rate at $0.21 per square foot per year. Fee has since been adjusted based upon CPI fluctuation, currently at $0.28 per square foot per year. Council Policy H -1 requires that permit fee be recalculated every 10 years after an appraisal. 9 Non - commercial Permits (1,200) — Permit fee is an administrative charge for maintaining records, conducting periodic inspections and code enforcement. Tidelands rental or use fees shall not be charged for residential piers by Council Policy (currently charge $75.00 per year). ➢ Mooring Permits (1,198) - Fees based upon charges for tidelands use for mooring permits of similar nature in other locations (fair market value for use of tidelands). Currently onshore moorings are $10 /foot per year and offshore moorings are $20 /foot per year. Fee was originally established in 1975. Current rate reflects CPI increases since that date. ➢ Tideland Leases (23) - Rental equals base rent plus % of gross in 11 cases. Fair market value analysis by staff in 7 cases. Nominal or no rent based upon community services in 5 cases. Leases Mp0.Ny P.." S S a F 1bnCammer P." Cormreroal Pe Newport Beach Tidelands Classes 1198 19W NO eee Bee 800 IWO 12W I" a." Tidelands Administration Paoe 5 How do the fees compare within the Harbor? Using a 30' vessel as an example, the following data shows how much a permittee would pay annually for storing a boat in and around Newport Harbor: Type of Permit/Use Fee per Year • Commercial permit: $224.00 • Non - commercial pier: $75.00 • Offshore mooring: $600.00 • Leases ✓ Bahia Corinthian Yacht Club: $437.50 ✓ American Legion: $1,980.00 Storin0 a 50' Vessel In Newport Harbor 53.000 I 51.980 51.500 I SI,WO Sa00 U37 50 M4 $]5 SD Commertlal1'. NoM.bnwart Pem M.0, Permit Leue -8CYC Leave -Leebe �5�T53sT ..a[..:_r .is _..- '+ice :.: ". �. � `'a`G. -•i°9 rifsiY�`mi'.v� ... i. -. >>- ,� ._� Tidelands Administration Paae 6 How do the fees compare with those charged by other agencies? Again using a 30' vessel as an example (except for mooring fees), the following charts show how much a permittee would pay annually for storing a boat with another jurisdiction. Note that commercial permits are not compared below because the City is not aware of where they are used elsewhere. as Non Commercial Permits C B Orange County Long Beam as Mooring Fees S1.400 $1.200 51.eA sago 3 c Se00 3400 $200 L NoIM1COmmerclal Permit Fees $911 So 550 Sim WO 3300 $250 5200 3950 Annual Fie Mooring Fees (60' Vessel) in Region AQUan C s Won'snY Mo say CCMewpon He. RIYPoinI Ped 3N LUN See 01W e Leases (typical rent rate): Agency Rate set by... • LA County Appraisal • Oceanside Appraisal • OC /Newport Economic Analysis Harbor (in house) • Redondo Appraisal Beach • San Diego Economic Analysis (in house) 35% W% 25% m 'c 20% 'm 0 t7 x c 15% 10% 5% 0% Tidelands Administration Page 7 Rent (as a % of Gross Revenues) 20128% 30% 25 -30% 27% 20 -25% Lease Rates in Region Area Leased Water and land Water and land Water only (2), land and water (1) Water and land Water and land 30% 30% 28% v% 25% 25% 20% 20% LA MN.PM HarW Oceanside Redondo Beadn Son Diego Staff Recommendation: Because of Newport's unique nature, comparing our rates with other areas is very difficult (as evidenced above). To ensure equity and fairness and to comply with the terms of the tidelands grant, the City should do the following: 1) Commercial permits - Commission an appraisal to determine fair rental value of commercial tidelands parcels based upon the nature of the use. 2) Non - commercial (residential) - Adjust permit fee to reflect: a) Increased administrative costs and/or: b) Fair market rental 3) Moorings - Base future increases on CPI and review base fee in 5 years. 4) Leases - Establish lease fee as provided by council policies. Tidelands Administration Page 8 Attachment 3 Current Tidelands Expenses What does the City include in its calculations of Tidelands costs? What does the City not include that could be a Tidelands cost? INCOME > $6 MILLION $12 MILLION EXPENSES Tidelands Revenues. The City's tidelands generate about $6 million for the City each year. These tidelands revenues include lease payments, concessions, and permits for moorings. The City's budget ( "City of Newport Beach Fiscal Year 1998 -99 Bud Detail," pages 9 -10) specifically describes the sources of this revenue. State law specifically describes how the City must account for this revenue when received. To comply with State law, the City deposits: • 10% of the revenue generated from specific leases on Beacon Bay ( "Beacon Bay lease revenue ") in the Land Bank Fund within the State Treasury (roughly $53,000 in FY 1998- 99); • 5% of the Balboa Bay Club lease revenue in the Land Bank Fund within the State Treasury ($69,000 in FY 1998 -99); • 10% of the Beacon Bay lease revenue in the Upper Newport Bay Restoration Fund in the City Treasury (roughly $53,000 in FY 1998 -99); • The remainder of the tidelands revenue ($5.878 million in FY 1998 -99) in two separate City funds. The Beacon Bay Bill allows the City to determine the internal distribution between each fund listed here: ► Tidelands Operations and Maintenance Fund; and ► Tidelands Capital Fund. Tidelands Expenses. Tidelands expenses — in the range of $11 -12 million annually -- are not isolated in the City's budget. The City's past practice has been to assume, with significant data support, that the City's tidelands expenses far exceed tidelands revenues. Tidelands expenses include all of the Marine Division's operational costs, portions of the Police Department's expenses, and more. Initially, the City's Administrative Services Department pays each of these departments' expenses with revenues from the City's General Fund, with few exceptions. To reimburse the General Fund for tidelands - related expenses, the City takes the revenue remaining in the Tidelands Operations and Maintenance Fund and completes a fund transfer to the General Fund at the end of the fiscal year. The City funds capital improvement - related expenses from the Tidelands Capital Fund. ' State laws include Chapter 74 of the Statutes of 1978, Assembly Bill 3139 (Pringle/Bergeson, 1994), and Senate Bill 573 (Johnson, 1997). Tidelands Administration Page 9 Here are some of the assumptions made by the City in FY 1998 -99 when making this apportionment: DEPARTMENT • Administrative Overhead (10% of total) Council, City Atty, City Manager, Clerk, Admin Services Dept • Fire /Marine Marine Division (100% of total) Fire /EMS Operations (10% of total) Fire Administration (33% of total) • Law Enforcement Services (20% of total) • Public Works Services (10% of total) • General Services Beach Maintenance (100% of total) Graffiti Removal (75% of total) Restroom Maintenance (75% of total) Litter Control (30% of total) Storm Drain Operations (100% of total) Administration (5 %) • Capital Improvements (actual budgeted) TOTAL WPM TIDELANDS COST $ 700,000 2,023,000 1,262,000 238,000 4,800,000 385,000 680,000 56,000 159,000 100,000 356,000 22,000 $ 833,000 11 614 000 Tidelands Administration Page 10 Attachment 4 Future Tidelands Costs What are the anticipated costs of the programs and projects planned for the next several years? What percentage of these costs should be recovered from Tidelands users? What are the anticipated costs of the programs and projects planned for the next several years? There are several pending efforts that may significantly impact the City's resources in the coming months and years. These projects include: I. LOCAL SHARE OF CORPS PROJECTS. Generally, the US Army Corps of Engineers participates in projects by first conducting a reconnaissance study (to determine if there is a federal interest in a particular improvement area) and then, if the "recon" study confirms a federal interest, the Corps embarks on a feasibility study. This latter study often proposes a series of improvement projects that the Corps helps fund and build. The feasibility study itself is "cost- shared," with 50% paid by the Corps and 50% by local participants. The projects that come from the feasibility study are also cost- shared, with 65% paid by the Corps and 35% by local participants. Here are the Corps projects in which the City is a local partner — where a City share is listed, please note that the dollar amount reflects the City's share of the local share: A -- Upper Newport Bay Feasibility Study — the UNB Study is a plan to restore the Upper Bay to its "optimal ecosystem". The Study will include dredging and other ongoing projects to keep the Bay at this optimal state once restoration is complete. TOTAL COSTS (estimated) CITY SHARE Feasibility Study $1,400,000 Feasibility Study: $68,000 Projects suggested by Study $12,000,000 Projects suggested by Study: $700,000 B -- Newport Bay Watershed Feasibility Study— the NB Watershed Study is a plan to establish control measures in the large watershed that empties into Upper Newport Bay (including the cities of Irvine, Tustin, Costa Mesa, Santa Ana, Orange, Lake Forest, and Newport Beach). The Study is likely to include retarding basins, additional wetland development, and "best management practices" to limit sediment, nutrient, and toxic inflows into the Bay. TOTAL COSTS (estimated) Feasibility Study $1,450,000 Projects suggested by Study $12,000,000 CITY SHARE Feasibility Study: $80,000 Projects suggested by Study: $700,000 C -- Eelgrass Restoration Plan -- Eelgrass (zostera manna) is an underwater plant that grows in salt water at depths of between —1' and —8' below sea level. When it exists in a waterway, biologists believe that it both indicates a healthy ecosystem and contributes to the diverse biology. For example, the small foraging fish that live in the eelgrass serve as a food source for the California Least Tern and the California Brown Pelican. The US Army Corps of Engineers has prepared an Eelgrass Restoration Plan for the Bay. The Plan (now in draft form) proposes to transplant "bundles" of eelgrass from existing sites to about 5 to 15 acres in the Harbor. USACE expects implementation of the Plan by June of 2000. TOTAL COSTS (estimated) CITY SHARE Eelgrass Restoration $902,000 Eelgrass Restoration (shared with County) $315,700 Annual Maintenance $20,000 Annual Maintenance $20,000 TOTAL ONE -TIME CORPS - RELATED COSTS: $1,863,700 TOTAL ANNUAL CORPS - RELATED COSTS: $20,000 Tidelands Administration Pace 11 II. REGIONAL BOARD DIRECTIVES. The California Regional Water Quality Control Board, Santa Ana Region ( "Regional Board "), enforces aspects of the federal Clean Water Act on behalf of the State of California. The Regional Board also implements the directives of the State Water Resources Control Board when the Legislature places mandates on the State Board. The Regional Board's actions often require specific actions by the City — these include: A -- TMDL Planning — Section 303 (d) of the federal Clean Water Act requires states (via the Regional Board) to identify and prioritize impaired water bodies which do not meet certain water quality objectives. To achieve these objectives, the Regional Board must set standards and goals (called Total Maximum Daily Loads or "TMDLs ") as "ceilings" to limit the inflow of water - transported materials (like nutrients, sediment, pathogens, and toxics). The first step in TMDL implementation is to develop a series of plans that describe later actions or projects that will help the City meet the TMDL. Here are the four TMDL components and the City's likely planning obligations: Name of TMDL What will it Limit? What will Plans Include? Likely Cost to City Sediment Upstream earth • Wetlands Delineation $ (enacted 1998) • Sediment removal plans $45.000/year • Upstream erosion control plans $ Nutrients Inorganic Nitrogen • Nursery discharge controls $ (enacted 1998) • Revised NPDES Permits $ • Wetlands Water Supply Project $ Pathogens Fecal Cofform bacteria • Health Risk Assessment $ (to be enacted March 1999) • Evaluation of Vessel Discharge S20,000 • Program to improve Dunes $ • More frequent WQ Testing NIA • Beneficial Use Assessments $ Toxics Metals: Cadmium. Selenium, • Bay location identification $$ (to be enacted by Jan 2002) Mercury, Zinc, Lead. more. • Removal alternatives $ Organics: Chlordane, Endosul- • Disposal alternatives $ fan. DDT. PCBs, more. • Ways to control inputs $$ - Number of dollar signs Indicates approximate magnitude of an as yet unknown expense B -- TMDL Implementation — The second step in TMDL implementation is to actually fund and construct the projects described in the plans identified above. Here are the four TMDL components and the City's likely project costs: Name of TMDL What will it Limit? Project Descriation Likely Cost to City' Sediment Upstream earth • Basin dredging Local share to Corps effort (enacted April 1998) (see above) may suffice Nutrients Inorganic Nitrogen • Wetlands Water Supply Project City's contribution has been (enacted _ 1998) about $50,000ryear Pathogens Fecal Coliform bacteria • Local Education Program $$ (to be enacted March 1999) • Storm Drain to Sewer System $$$$ Diversions • "Vactor -ing' of Storm Drains $$$ • Additional WQ Testing $ • Vessel Waste Enforcement $$ Toxics Meta /s: Cadmium, Selenium, • Removal of existing material $$$ (to be enacted by Jan 2002) Mercury. Zinc. Lead, more. • Disposal of existing material $$$$$ Organics: Chlordane, Endosul- • Residential /business BMPs - NIA - fan. DDT, PCBs. more. • City (General Services) BMPS $$ • Monitoring $ ' Number of dollar signs indicates approximate matindwe of an as yet unknown expense C -- Toxic Hot Spot Clean -Up — Established in 1989, the State's Bay Protection and Toxic Clean -up Program directs regional boards to develop "Regional Hot Spot Toxic Clean -Up Plans." The Program defines toxic hot spots as areas where the sediment and /or the marine life contain high contamination of toxic substances like mercury, arsenic, copper, lead, zinc, PCBs, and pesticides. In the Regional Board's draft Plan, it has identified two areas of Lower Newport Bay — the Rhine Channel and west Newport Island — as "toxic hot spots" The draft Plan suggests Tidelands Administration Page 12 extensive remediation to the Rhine Channel given the Board's identification of the Rhine as the Board's "high" priority for repair. The Board estimates that cleanup for the Rhine will require contractors to dredge about 23,000 cubic yards of sediment and dispose of it inland at an appropriate waste facility. The Board also notes that only about 10% of the toxic material may be traced to a billable for - profit entity. TOTAL COSTS (estimated) CITY SHARE Rhine Channel Cleanup up to $10,500,000 Rhine Channel Cleanup Uncertain Newport Island Cleanup up to $10,500,000 Newport Island Cleanup Uncertain TOTAL ONE -TIME REGIONAL BOARD- RELATED COSTS: $500,000 - $10,000,000 (est) TOTAL ANNUAL REGIONAL BOARD - RELATED COSTS: $500,000 (est) III — SAND REPLENISHMENT. Sand replenishment remains a costly activity for both the City and its residents. The City spends approximately $35,000 /year for beach replenishment on bay beaches and street ends. This goes to replace lost sand on beaches — particularly on Balboa Island — that typically see natural removal of sand. The City's source of renewable sand is limited, so it replenishes areas with existing material found bayward of the public beaches. City staff believes that the City should be doing two to three times more sand replenishment activities within the Harbor. TOTAL ANNUAL REPLENISHMENT - RELATED COSTS: $35,000 - $140,000 -- Future Cost Summary -- CORPS PROJECT COSTS One Time $1,863,700 Annual $20,000 REGIONAL BOARD COSTS One Time to $10,000,000 Annual $500,000 SAND REPLENISHMENT Annual to $140,000 TOTAL COSTS (ONE -TIME) to $11.863.700 TOTAL COSTS (ANNUAL) to What percentage of these costs should be recovered from Tidelands users? The issue of whether to recover any or all of these costs through tidelands leases or permits is a critical one for the Council to consider. Arguably, the primary users of the tidelands should be responsible for the City's tidelands restoration and maintenance obligations. Alternatively, however, many visitors and residents who enjoy tidelands access without leases or permits (swimmers, beachgoers, others) would not make a contribution equivalent to their use under this scenario. Here are the advantages and disadvantages of cost - recovery on lessees and permittees: Advantages • Lessees and permittees are primary users who receive primary benefit or Tidelands. • Lessens impact to the General Fund. • Consistent with the City's obligations under the Tidelands trust. Disadvantages • Above -noted costs are speculative at best right now. • Swimmers, beachgoers, others who enjoy tidelands access won't pay equivalent to use rate. • May result in significant cost increases to lessees and permittees. Staff Recommendation: > Do not incorporate future costs into leases and permits until City better understands likely costs. Allow flexibility in permit and lease rate structure to include a potential rate increase if City Council so determines at a later date when expenses are clearer. Tidelands Administration Pape !3 Attachment 5 Suggested Terms /Conditions for Basic Tidelands Lease Aspects of a "boilerplate" lease for future Tidelands leases and lease renewals Issue Description I. Premises > City reserves oil /mineral rights. > Public access must be assured /maintained throughout lease term. II. Term > 25 years maximum. > Council can increase to 50 years with findings set forth. III. Rent > of gross for land and water leases. _% > _% of gross for water only leases. IV. Rent Adjustment > Rental rates increased upward or downward every _ years based on comparable marinas. Comps are Bayside Marina, Villa Cove Marina, Balboa Yacht Basin, Bayshores Marina. > Flexibility to apply a factor for future tidelands costs (when incurred). V. Alterations > Must be approved by City and conform to permit policies. VI. Marina Maintenance > Lessee to keep facilities in first class order, condition, and repair. > Lessee responsible for maintenance dredging to pierhead line. VII. Utilities > Payment for services and utility line maintenance are lessee's responsibility. VIII. Indemnification > Lessee must hold City harmless against any and all claims. IX. Insurance > General Liability not less than $2 million combined single limit for bodily injury and property damage. > Property Insurance /Construction — insurance against "all risk" required. > Property Insurance — continuous insurance against "all risk' required. > City to be named as additional insured. X. Casualty > Lessee must promptly repair /restore damaged or destroyed marina improvements. XI. Abatement of Rent > No rent abatement. XII. Assignment of Lease > Not permitted without written consent of City. XIII. Default > Default occurs if: > Failure to pay rent w /in 30 days of written notice from City. > Failure to perform lease obligations. > Lessee's insolvency. > Vacancy for 15 consecutive days after written notice from City. > Appointment of a Trustee for more than 30 days. Staff Recommendation: > Adopt terms and conditions suggested above as basic guidelines for future tidelands leases — incorporate into new Council Policy. P-:. 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U U co z N U c t o � a L 3 U) O j N O_ V ~ N C CL N O O O C T f0 al M N3N O U C C O a O_ U C � � C C .O N U O C: C N > C � _ C 7 C .z, N U t_ w �3 r C � N T 7 f0 cu N L O in w � m= O N N ♦+ C C 1p M— O C � n N OI (n C c X = � N d) � n C ` C O SUN N A U C 0 V v t R m 0 3 d Z am � n C ` C O SUN N A U C 0 V v t R m 0 3 d Z am Tidelands Administration Pape 15 Attachment 7 Commercial Permit or Tidelands Lease? Advantages and Disadvantages As noted previously, the City has 66 commercial tidelands permits and 23 tidelands leases (see Exhibits A and B). Of the 23 leases, 4 are for water only and 3 of those were entered into fairly recently to accommodate either an unusual situation or particular need of the upland owner. Of the balance, 19 are for land or land and water in combination. The 66 commercial permits are for water only adjacent to privately owned uplands. The advantages and disadvantages of using permits versus using leases are as follows: Commercial Permits Advantages 1) Use continuity - Permits have been the method of water only tidelands use for at least 40 years. 2) Flexibility - Terms and conditions can be changed relatively quickly based upon changes in the Municipal Code or Council Policies. 3) Fees - Can be adjusted based upon Council discretion. 4) Enforcement - Can be handled by City Council through appropriate section of Municipal Code or Council Policies. 5) Permit duration - Open ended unless revoked. Does not necessarily encumber tidelands for fixed period of time. Disadvantages 1) Revenue and enforcement "certainty" is limited due to year -to -year nature of permit. 2) Upland financing - Nature of permit, with potential of limited duration or change in conditions effects upland owner's ability to obtain long term financing. Tidelands Leases Advantaaes 1) Lease can be structured to specific tidelands operation. 2) Rent based on appraisal and subject to prescribed adjustments in the lease. 3) Improves financing possibilities for upland owner which could positively affect value to City. Staff Recommendation Disadvantaaes 1) Enforcement usually requires legal action. 2) Tidelands encumbered for specific length of time (up to 50 years). 3) Terms and conditions fixed for specific length of time limits City's flexibility. 4) Use of lease as security for financing could affect City's rights in the short term. > Continue commercial use of water -only tidelands by permit unless the harbor facility is so unique that a permit is inappropriate. In all other circumstances (land and water), enter into a lease. If a lease is considered, follow basic lease terms /conditions set forth in council policies (see page 13). Newport Beach City Council Tidelands Administration Page 16 Attachment 8 Special Assignments Special projects and research items requested by the City Council at the January 30, 1999 Study Session Source Controls (Debay) Currently the City of Newport Beach monitors spills /discharges into storm drains through the Water Quality Monitoring program within the Division of Environmental Health in the Orange County Health Care Agency (OCHCA/EH). OCHCA/EH does bacteriological testing at various locations in the Bay. Some of the test locations are near existing storm drain outlets. Water samples taken from the Bay are tested to determine levels of an indicator to pathogens. This indicator is Fecal Coliform. If Fecal Coliform counts exceed State limits, further testing is done to try to pinpoint the source of the contamination. When an unidentified substance is discovered in the storm drain system, a call is made to the Fire and Marine Department's Hazardous Material ( HAZMAT) Team. The HAZMAT Team classifies the material and contains it for removal by the General Services Department. If the storm drain terminates in a structure with a tidal valve, the valve is closed until the material is analyzed. The material is removed from the storm drain with a "vactor." Then, the Fire and Marine Department tries to track the material back to its source. Both General Services and the Fire and Marine Department bill the offending party for clean -up of unauthorized materials. The Department of Public Works reports that only about 50% of all identified discharges are traced back to a specific source and billed to an offending party. Ed Wimmer, Department of Public Works Spot Dredging (Debay) Staff has scheduled a full Council update about this issue for the City Council's March 22 meeting. Harbor Patrol (Debay) Here are some of the advantages and disadvantages of having the City begin Harbor Patrol activities in Newport Bay: Advantages • City may be able to provide service more cost- effectively. • Continuity of City presence in Bay • Revenue saved could be returned to OC Harbors, Beaches, and Parks District for Bay improvements. • Activity reports to City Hall, not Santa Ana. • May be better able to coordinate with other City departments like FirelMadne, NBPD, and Public Works. • City force may be more willing to enforce Regional Water Board directives. Disadvantages • Would have to link service to new revenue stream — disadvantage could be removed if City receives "contract" from County of Orange to provide service for 5-10 years. • OCSD staff opposes. • Sheriff Carona may appose. • Some in harbor may oppose City staffing plans if City reduces use of swam officers on patrol boats. Federal Channel (Debay) The federal navigational channel is as follows: � I Tidelands Administration Page 17 Ocean Flow Pipe (Ridgeway) In past years, several individuals have proposed placing a pipeline between the ocean and the bay to improve the water flow in certain impaired areas of the bay. These areas include the Rhine Channel and the western end of Newport Island. Don Webb, Public Works Director, did a brief review of what it might take to make a significant impact on water flows in these areas. Here is a summary of his comments: • A pipe would have to rely upon some differential in water height between the Bay and the ocean in order to cause significant water flow through the pipe. it is likely that such a differential does not exist in Newport Bay; • Such a pipeline would have to be constructed so that it is beyond the surf and tide lines in the ocean, always ensuring full submersion in the ocean and the Bay; • To create the rate of flow that would cause enough water movement around Newport Island to replace the existing water once each day, the City would have to install a pump with a 7000 gallon per minute capacity. In comparison, the Little Balboa Island sewer pump station, including a _ GPM pump, cost about $2.1 million. Don Webb, Director of Public Works What Others Do (Glover) Please see pages 4 -7 of this report. Tidelands Administration Page 18 Marinapark (Ridgeway) On February 22, 1999, the City Council directed the City Attorney to prepare a letter for the Mayor's signature that would state the City's recommendation that the Marinapark area be designated as uplands by the State Lands Commission. Pier Rights (O'Neil) Right to Pier Out. Subject to the paramount rights of the State and the City of Newport Beach, the owner of property abutting tidelands (littoral owner) has a right of access to the adjacent navigable water. This right of access includes the right to construct a pier for the private use of the property owner. The City has the right to establish reasonable rules and regulations relative to the construction of piers and has done so through provisions of the Municipal Code and Council Policy. Right to Charge a Fee. State law requires the State Lands Commission to conduct an appraisal and then establish rent when leasing public lands (Public Resources Code §6503). Following the adoption of that law, the Legislature added a statute that reads as follows: "Notwithstanding the provisions of §6503, no rent shall be charged for any private recreational pier constructed on state lands for the use of a littoral owner." Public Resources Code §6503.5 - The City Attorney's opinion is that §6503.5 applies only to the Commission and not to grantees. Further, the constitutionality of Section 6503.5 is questionable. In 1976, the Attorney General issued an opinion that "issuance of a rent -free permit to a littoral owner for construction of a private recreational pier on state land constitutes a gift of public property" (59 Ops. Atty. Gen. 521). Because Article XVI, §6 of the California Constitution prohibits any gifts of public moneys, PRC §6503.5 is likely to be unconstitutional if the Attorney General is correct in his 1976 opinion. Robert Burnham, City Attorney Rental Rates (Noyes) Please see pages 4 -7 of this report. Future Costs (Noyes) Please see pages 10 -12 of this report. Patterson Map (Thomson, O'Neil) As a reminder to the Council, the "Patterson Map" is considered helpful to, but not the final authority in, the ultimate determination of tidelands boundaries. Court decisions, legislation, and other mechanisms also make these determinations. Further, some of the lines in the Map are not reflective of the City's position on the appropriate tidelands boundaries. 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T, Semi - annual? Spot monitoring? Should we monitor leases more than permits? j Should cost of additional monitoring be included in lease? "We should consider I I Which costs should we consider? future costs" TMDLs I I Corps Studies Dredging I I Toxic Hot Spots What % -age of these costs should users pay foil 10 %? 20 %? 50 %? MONITORING ADMINISTRATION/EQUITY Use permits for... "We need a formal policy directing which commercial property should be on a lease & which should be Water only a era ff %n elude �'. Direct staff to on a permit" lease/permit decis'!on In Use leases for.. y� new Couneii P�olliy : A3Ej �$ Ltd Amenitiesn;(A1 Land & Water LJ Special Financing Upland Amenities LJ Special Access ADMINISTRATIONiEOUITY We don't monitor How much monitoring is enough? enough" Annual? T, Semi - annual? Spot monitoring? Should we monitor leases more than permits? j Should cost of additional monitoring be included in lease? "We should consider I I Which costs should we consider? future costs" TMDLs I I Corps Studies Dredging I I Toxic Hot Spots What % -age of these costs should users pay foil 10 %? 20 %? 50 %? MONITORING