HomeMy WebLinkAboutCity Council - 2003-57 RESOLUTION NO. 2003-57
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH DENYING THE APPLICATION OF
SOUTHERN CALIFORNIA WATER COMPANY
FOR A WATER PIPELINE FRANCHISE
WHEREAS, Hearthside Homes owns the property located in the County of Orange known
as the Bolsa Chica Mesa; and
In March 1997, Southern California Water Company ("SCWC") and Signal Bolsa
(Hearthside's predecessor) entered into a "System Operation and Maintenance Agreement," to
provide that SCWC would offer water and sewer service to Signal Bolsa's Bolsa Chica Mesa
residential development;
Section 1.6 of the Agreement provided that, upon the request of Hearthside, "SCWC will
exercise the power of eminent domain to acquire any right of way reasonably relate to and required
for the Pipeline;" and
In November 1998, SCWC applied to the California Public Utilities Commission ("CPUC")
for a Certificate of Public Convenience and Necessity ("CPCN") that would permit SCWC to
provide water and sewer service to a 1,235 unit residential development on the upper and lower
portions of Bolsa Chica Mesa. In October 2000, the CPUC granted the CPCN; and
In November 2000, the California Coastal Commission rejected Hearthside's land use plan
for a 1,235 unit residential development; and
After it had obtained CPUC approval, SCWC waited a year and a half, until February 1,
2002, to apply to the City for a franchise pursuant to the 1937 Franchise Act to install a pipeline
under the City's streets to serve the Bolsa Chica Mesa; and
On July 23, 2002, Orange County recommended that the Coastal Commission approve a
Hearthside's new proposal for the Bolsa Chica Mesa, known as the Brightwater development,
comprising 378 single-family units on the upper bench of the Mesa. To date, that application
remains pending before the Coastal Commission; and
The City Council held a lengthy study session on October 21, 2002 to consider SCWC's
franchise application. At the study session, SCWC's general manager acknowledged that SCWC
could condemn a right of way; and
The City Council formally considered SCWC's franchise application at its next meeting on
November 6, 2002. At that meeting, the City's Mayor Pro Tern moved to "delay and take no action
relative to working out a franchise agreement at this time"; and
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Resolution No. 2003-57
On January 23, 2003, SCWC filed the action entitled Southern California Water Company
v. City of Huntington Beach, Orange County Superior Court Case No.03CCO2021; and
On June 13, 2003,the Superior Court granted a Writ of Mandate, ordering the City to
review SCWC's franchise application and make a determination either granting or denying the
franchise in a manner not in conflict or inconsistent with the determination Of CPUC granting of a
CPCN by August 6, 2003; and
The CPUC in granting the CPCN, made the following findings:
"6. While the City is "able" to provide water and sewer services to
Hearthside's development, being contiguous to Bolsa Chica on three sides,
despite offers of very substantial benefits involving millions of dollars
from Developers to do so, the City repeatedly has demonstrated that it is
not "ready and willing" to do so, except possibly upon its terms which
include annexation.
9. Following years of unfruitful efforts to obtain water and sewer services
from the City, except upon the City's terms, which in view of the City's
past hostility the Developer with reason believes could jeopardize its
entitlement and with virtual certainty spur further lengthy delay legal
challenges, Hearthside contracted with SCWC for the latter to incorporate
the Mesa development project into SCWC's West Orange County District;
construct a 7.5 mile, 18 inch interconnecting water transmission pipeline
to the Mesa project, and provide sewer services to the Mesa project.
13. City service, if presently available, would be an environmentally
superior alternative to SCWC service.
15. There is a present need for water and sewer services to the
Developer's Mesa project and SCWC is "ready, willing, and able" to
provide the services requested; and
The CPUC's order granting a CPCN states as follows:
"A Certificate of Public Convenience and Necessity is granted to Southern
California Water Company (SCWC) to effect a non-contiguous extension
of its West Orange County District to include the Bolsa Chica Mesa
Planned Community on the Bolsa Chica being developed by Hearthside
Homes, Inc. (Hearthside); to provide public utility water distribution and
wastewater collection services within the Bolsa Chica Mesa Planned
Community; and to construct a 6.75-mile water transmission pipeline to
interconnect the SCWC West Orange County System with the planned on-
site water distribution system at the Bolsa Chica Mesa Planned
Community,"
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Resolution No. 2003-57
The CPUC granted the CPCN as an alternative to City water service. By granting this
alternative, despite City service being environmentally preferable, there is no reason to conclude
that the CPUC contemplated that SCWC would apply to the City for further discretionary
approvals, such as a pipeline franchise. To the contrary, the CPUC was well aware SCWC could
condemn a pipeline easement instead of obtaining a franchise because water corporations are
specifically authorized to employ eminent domain pursuant to Public Utilities Code § 620. Further,
the CPUC was aware of the provision in the SCWCIHearthside agreement authorizing use of
eminent domain; and
The Council has carefully reviewed the CPCN the CPUC granted and found nothing within
it inconsistent with a City decision to deny SCWC's franchise application; and
In November 2002, California voters passed Proposition 50, which provided funds for
acquisition of the Bolsa Chica Mesa for park and habitat preservation. (Water Code § 79500, et
seq.) Water Code § 79572 (b) specifically authorized the Wildlife Conservation Board to use a
portion of the $250,000,000 in unreserved funds for the acquisition, protection and restoration of
coastal wetlands, uplands and watersheds to give priority to the acquisition of not less than 100
acres consisting of upland mesa areas, including wetlands therein, adjacent to the state ecological
reserve in the Bolsa Chica wetlands in Orange County; and
Pursuant to Water Code § 79573 (b), all real property acquired pursuant to Proposition 50
shall be acquired from willing sellers; and
Pursuant to this statutory authority, on March 26, 2003, the Wildlife Conservation Board
contracted with James Donahue for an appraisal of Hearthside's Bolsa Chica Mesa property.
Hearthside Homes provided input to the selection of the appraiser; and
If the Bolsa Chica Mesa is acquired, there would no longer be any need for the water
pipeline; and
Consistent with Proposition 50,the City Council finds that acquisition of the Bolsa Chica
Mesa is in the best interest of the community. The City further finds that granting a franchise at
this time may cause the appraised value of the Mesa to increase, making it less likely that the State
will acquire it; and
Because there is no approved development for the Bolsa Chica Mesa, there is no reason for
the City to issue a franchise at this time; and
Because there is a reasonable probability that the State will acquire the Bolsa Chica Mesa,
there is no reason for the City to issue a franchise at this time; and
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Resolution No. 2003-57
NOW, THEREFORE, it is hereby resolved by the City Council of the City of Huntington
Beach that:
1. The franchise application by SCWC is denied.
2. The Recitals set forth above are adopted as findings of fact.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular
meeting thereof held on the 4th day of August 2003.
Mayor
ATTEST: APPROVED AS TO FORM:
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City Clerk _ _ (JiC�ity Attorney �rj 3
REVIEWED AND APPROVED:
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City Administrator
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Res. No. 2003-57
STATE OF CALIFORNIA
COUNTY OF ORANGE } ss:
CITY OF HUNTINGTON BEACH }
I, CONNIE BROCKWAY, the duly elected, qualified City Clerk
of the City of Huntington Beach, and ex-officio Clerk of the City Council of
said City, do hereby certify that the whole number of members of the City
Council of the City of Huntington Beach is seven; that the foregoing resolution
was passed and adopted by the affirmative vote of at least a majority of all the
members of said City Council at an regular meeting thereof held on the 4t"
day of August, 2003 by the following vote:
AYES: Sullivan, Coerper, Boardman, Cook, Houchen, Hardy
NOES: Green
ABSENT: None
ABSTAIN: None
City Clerk and ex-officio C erk of the
City Council of the City of
Huntington Beach, California