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Home My WebLink About03 - Indemnification from CEQAAGEUDA NO. CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 18 (November 28, 2006) TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Robin Clauson, City Attorney ( 949) 644-3131,rclauson@cjty.newport-beach.ca.us Aaron Harp, Assistant City Attorney (949) 644 -3131, aharp@city.newport-beach.ca.us SUBJECT: INDEMNIFICATION FROM THIRD PARTY CALIFORNIA ENVIRONMENTAL QUALITY ACT AND OTHER.DISCRETIONARY APPROVALS CHALLENGES TO DETERMINATIONS- ISSUE: Should the City require persons requesting California Environmental Quality Act determinations and discretionary approvals, indemnify, defend and hold harmless the City and its representatives from third party judicial challenges to these determinations and approvals? RECOMMENDATION: Introduce Ordinance No. 2006 -_ and pass to second reading. DISCUSSION: Backaround: Currently, the City does not require an applicant who is seeking California Environmental Quality Act ( "CEQA ") determinations and discretionary approvals to indemnify, defend and hold the City harmless from third party judicial challenges to these determinations and approvals. Defending against these challenges is costly and time consuming. In addition, project opponents often seek an award of attorneys' fees in such challenges. As applicants are the primary beneficiaries of such approvals, many cities in California have adopted ordinances.that impose a condition that requires the applicants to reimburse the city its costs of defending against any such judicial challenge, and bear the responsibility for any costs, attorneys' fees, and damages which may be awarded to a successful challenger. r. [ INDEMNIFICATION FROM THIRD PARTY CHALLENGES TO CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATIONS AND OTHER DISCRETIONARY APPROVALS November 28, 2006 Page 2 Authority to Reaulate' Whether the City can require a project applicant to indemnify and defend the City from CEQA determinations is not specifically addressed by the applicable CEQA statues and regulations. The California Attorney General, however, has opined that a public agency has the power to require a project applicant to indemnify, defend and hold the public agency harmless from third party challenges to discretionary approvals. (See, 85 Op. Cal. Atty. Gen. 21, (2002):) Environmental Review: No environmental review is required. Public Notice: Public notice was'provided iii accordance with all applicable laws. Prepared by: SIGNATURE Aaron C. Harp, Assistant City Attorney FAuserslcatl shared% CCstaffReportsVO .971andUseApprovals.doc ORDINANCE NO. 2006= AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADDING CHAPTER, 1.07 TO TITLE I OF THE NEWPORT BEACH MUNICIPAL CODE PROVIDING FOR THE INDEMNIFICATION OF THE CITY OF NEWPORT BEACH FOR THIRD PARTY CHALLENGES TO DISCRETIONARY APPROVALS NOW THEREFORE, the City Council of the City of Newport Beach, California; - HEREBY ORDAINS as follows: SECTION . 1: Chapter 11.07 entitled "Indemnification of the City for. Third Party Challenges,",of-the Newport Beach Municipal Code is hereby added to.ritleA and shall read as follows: Chapter 1.07 INDEMNIFICATION OF THE CITY FOR THIRD PARTY CHALLENGES Sections: I.07.0110 Purpose and Findings. 1.07.020 Definiffqps. 1.07.030 Indemnification Required. 1.07.040 Conditions 1.07.050 Indemnification -Payment on Demand. 1.07.010 Purpose and.Findings. A. The City Council finds that projects for which discretionary City approvals are necessary and for which project proponents make application to:llle, City may, in addition to other legal requirements, require environmental review by the City pursuant to ,the Califbmia.EnvirqnMental Quality Act, ("CEQA").. Substantial City time and,effort are expended in complying with CEQA!s requirements and other legal requirements necessary. before granting such approvali.:. B. Judicial challenges to City's CEQA determinations for projects --requiring discretionary, approvals are costly and time oor.isvrning. In addition,, project opponents often seek. an award of attomeys',-fees In such challenges. As project applicants. are. the primary beneficiaries of such approvals, it is appropriate that such applicants should bear the expense of defending against any such judicial challenge, and bear the i? responsibility for any costs; attorneys' fees; and damages which may be awarded to a successful challenger. 1.07.020 Definitions. In this Chapter the following words or phrases shall have the following meanings: "Application" shall mean an initial written request required by the City which commences the City's processing of the project that requires a discretionary approval and approval of a CEQA document. "CEQA" means the 'Califomia Environmental Quality Control Act' (Public Resources Code section 21000 at seq.) and any action taken pursuanUthereto including, but not limited to, an environmental impact report, subsequent environmental impact report, supplemental environmental impact report, mitigated negative declaration, negative declaration, addendum to an environmental impact report or negative declaration, categorical exemption, or a determination that no CEQA document is required. "City" shall mean the City of .Newport Beach, its City Council, boards and commissions, officials, officers, attorneys, employees, agents, and zoning administrator. "Project" shall mean any amendment, modification permit, use. permit, variance or other City issued permit that requires discretionary approval in accordance with this code. 1.07.030 Indemnification Required. Any applicant for a discretionary permit under any provision of this code which also requires a determination under CEQA- shall be provided notice of the provisions of this Chapter. Any project approval may, in the discretion of the approving body, be conditioned to indemnify the City according to the provisions of this Chapter, as follows: A. Defend, indemnify, release and hold harmless the City from and against any and all claims, demands; : obligations, damages, action's, causes of. action, suits, losses, judgments, fines, penaities; liabfiiiies,` costs and expenses (including without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner refate (directly or'indirectly) to the project, the project's approval based on the Citys CEQA determination and/or the City's failure to comply with the requirements, of any federal, state. or local laws, including, but not limited to, CEQA, general plan and zoning requirements. 2 This indemnification shall include, but not be limited to, damages awarded against the City, if any, costs of suit, attorneys' fees, and other expenses incurred in connection with such claim, action, or proceeding whether incurred by applicant, City, and /or the parties initiating or bringing such proceeding, 1.07.040 Conditions. Any indemnification required under the provisions of this Chapter shall be subject to the following: 1. The City shall promptly notify applicant of any claim, action, or proceeding brought to attack, set aside, void or annul a discretionary Project approval, or approval of a related CEQA document; 2. The City shall retain the right to participate in the defense of the claim_ , action or proceeding including selection of defense counsel; and 3. The applicant shall not be required to pay or perform any settlement unless the settlement is approved by the applicant; and 5. The applicant shall indemnify the City for all of City's costs, fees, and Odamages which City incurs in enforcing the indemnification agreement. 1.07.050 Indemnification - Payment on Demand. The applicant shall pay to the City upon demand any amount owed to the City pursuant to the indemnification requirements prescribed in this chapter. SECTION 2: If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. SECTION 3: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the same to be published once in the official newspaper of the City within fifteen (15) days after its adoption, and the ordinance shall be effective thirty (30) days after its adoption. SECTION 4: This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the _ day of . 2006, ® and adopted on the _ day of , 2006, by the following vote, to wit: .K7 AYES, COUNCILMEMBERS NOES, COUNCILMEMBERS ABSENT COUNCILMEMBERS 4 i .: