HomeMy WebLinkAboutPublic Hearing - Approve Responses to Questions Asked by the WITY OF HUNTINGTON BEA
MEETING DATE: February 22, 1999 DEPARTMENT ID NUMBER: CD99-16
Council/Agency Meeting Held:
Deferred/Continued to:
6i Approved ❑ Conditionally Approved ❑ Denied batrN y lerk's Signature
Council Meeting Date: February 22, 1999 Department ID Number: CD99-16
I
CITY OF HUNTINGTON BEACH
REQUEST FOR ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: RAY SILVER, City Administrator
PREPARED BY: MELANIE S. FALLON, Assistant City Administrator .
ROBERT F. BEARDSLEY, Dire for of Public Work
GAIL HUTTON, City Attorne
HOWARD 4ELEFSKY, Director of Planning, :. -e
SUBJECT: RESPONSES TO QUESTIONS ASKED BY THE
PUBLIC UTILITIES COMMISSION (PUC)
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue:
Transmitted for your consideration is a request to approve responses prepared by staff
which address four questions asked of the City of Huntington Beach by the Public Utilities
Commission in relation to water and sewer service for the Bolsa Chica Planned Community.
Funding Source: Not applicable.
Recommended Action:
A. STAFF RECOMMENDATION:
Motion to:
1. "Approve the responses prepared by staff to the four questions asked by the Public
Utilities Commission (PUC) in the February 2, 1999, Assigned Commissioner's Ruling
Noticing Prehearing Conference."
Dzb
I
REQUEST FOR ACTION*
MEETING DATE: February 22, 1999 DEPARTMENT ID NUMBER: CD99-16
Alternative Action:
The City Council may make the following alternative motion:
1. "Direct the City Attorney to submit alternative responses."
Analysis:
A. BACKGROUND
The Southern California Water Company (SCWC) submitted an application to the Public
Utilities Commission (PUC) for a certificate of Public Convenience and Necessity to extend
its West Orange County System from the City of Cypress to the unincorporated Bolsa Chica
area. SCWC proposes to construct a 6.75-mile water transmission pipeline from its supply
source in the City of Cypress to the Bolsa Chica Mesa. The pipeline would be constructed in
the public rights-of-way in the cities of Huntington Beach, Westminster, Seal Beach, Garden
Grove, and Cypress.
SCWC has also submitted an application to the PUC requesting a certificate of Public
Convenience and Necessity to operate and maintain a wastewater system that will provide
wastewater collection and pumping service to the residents of the Bolsa Chica Planned
Community.
The City filed a protest on December 4, 1998, to the application for water service and
requested an evidentiary hearing be conducted by the PUC. The City also filed a protest on
December 18, 1998 to the application for wastewater service, and once again requested that
an evidentiary hearing be conducted by the PUC.
The purpose of the protest to both applications was to provide the City with "interested party"
status to ensure the opportunity to meet with PUC staff at a "prehearing conference." Both
protests were based on the fact that the City is currently involved in a public process
(commencing in January 1998) to study issues related to annexation of the Bolsa Chica
area. If the City were to annex that area, it would be both the water and sewer service
provider.
B. STAFF ANALYSIS AND RECOMMENDATION:
As an "interested party" in the PUC process, the City has received an "Assigned
Commissioner's Ruling Noticing Prehearing Conference" dated February 2, 1999
(Attachment 1). This document was prepared by PUC Commissioner Henry M. Duque, who
is the PUC Commissioner assigned to SCWC's applications. (The document notes that the
two SCWC applications have been consolidated for purposes of hearing and decision.)
CD99-16 2 February 19, 1999 7:35 AM
REQUEST FOR ACTION
MEETING DATE: February 22, 1999 DEPARTMENT ID NUMBER: CD99-16
Commissioner Duque is one of the five Commissioners appointed to the PUC by the
Governor. One PUC Commissioner and one Administrative Law Judge preside over the
prehearing conference. The Administrative Law Judge assigned to SCWC's applications is
John B. Weiss.
As stated in the notice document (Attachment 1), the prehearing conference "has the
purpose of clarifying the issues in the proceedings, of dealing with procedural matters, to
identify witnesses, and to set dates for evidentiary hearings." To become a party in the
proceedings, the City needs to "file an appearance" at the prehearing conference set for
February 25.
The notice document prepared by Commissioner Duque invites the City to file a "Prehearing
Conference Statement" on or before February 19, 1999. According to the PUC's Rules of
Practice and Procedure (Rule 6.2), a "Prehearing Conference Statement" should address the
schedule, issues to be considered and "other matters specified" in the Commissioner's notice
document. In this case, the Commissioner specifically requested that the City prepare
responses to four questions relating to water and sewer service issues and annexation.
The City's Prehearing Conference Statement was filed with the PUC on February 19, 1999
(Attachment 2). However, the document filed with the PUC only addresses scheduling (by
requesting a 60-day continuance based on the City's pending annexation study) and raises
additional issues to be considered by the PUC should the matter proceed to an evidentiary
hearing. The document does not provide answers to the four questions.
It is important for the City to be prepared with responses to the four questions at the
February 25 prehearing conference. Staff has prepared the following responses for City
Council consideration and approval.
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Question 1. Does the City presently desire to itself provide water service_-&r Ower
service to the Planned Community?
Response:
n-n
The City eeAsidere is the most direct supplier of potable water to the Bolsa ChicajreT-
P��
other water purveyor has facilities in as close proximity as the City of Huntingtp EWach.
Only through the City's system can the project area be provided a reliable, looped service
distribution network. By comparison, the proposed SCWC water system relies on a water
supply source over six.miles distant, with redundancy planned by use of wells in a zone of
the water basin known to produce water of marginal quality. In addition, this dead-end
system would require construction of a reservoir with four to seven days capacity to insure
adequate supplies are available in the case of temporary cessation of service from the
Cypress pipeline.
CD99-16 3 _ February 22, 1999 2:04 PM
REQUEST FOR ACTION•
MEETING DATE: February 22, 1999 DEPARTMENT ID NUMBER: CD99-16
Commissioner Duque is one of the five Commissioners appointed to the C by the
Governor. One PUC Commissioner and one Administrative Law Judge p side over the
prehearing conference. The Administrative Law Judge assigned to SC W s applications is
John B. Weiss.
As stated in the notice document (Attachment 1), the preheari g conference "has the
purpose of clarifying the issues in the proceedings, of dealing th procedural matters, to
identify witnesses, and to set dates for evidentiary hearings." To become a party in the
proceedings, the City needs to "file an appearance" at the rehearing conference set for
February 25.
The notice document prepared by Commissioner Duque ' vites the City to file a "Prehearing
Conference Statement" on or before February 19, 19 According to the PUC's Rules of
Practice and Procedure (Rule 6.2), a "Prehearing Co erence Statement" should address the
schedule, issues to be considered and "other matte specified" in the Commissioner's notice
document. In this case, the Commissioner sp cifically requested that the City prepare
responses to four questions relating to water an sewer service issues and annexation.
The City's Prehearing Conference Stateme was filed with the PUC on February 19, 1999
(Attachment 2). However, the document ed with the PUC only addresses scheduling (by
requesting a 60-day continuance based n the City's pending annexation study) and raises
additional issues to be considered by a PUC should the matter proceed to an evidentiary
hearing. The document does not pro de answers to the four questions.
It is important for the City to b prepared with responses to the four questions at the
February 25 prehearing confer nce. Staff has prepared the following responses for City
Council consideration and app oval.
Question 1. Does the ty presently desire to itself provide water service or sewer
service to the Planned ommunity?
Response:
The City considers s the most direct supplier of potable water to the Bolsa Chica area. No
other water pury or has facilities in as close proximity as the City of Huntington Beach.
Only through th City's system can the project area be provided a reliable, looped service
distribution ne ork. By comparison, the proposed SCWC water system relies on a water
supply sourc over six miles distant, with redundancy planned by use of wells in a zone of
the water asin known to produce water of marginal quality. In addition, this dead-end
system uld require construction of a reservoir with four to seven days capacity to insure
adequate supplies are available in the case of temporary cessation of service from the
Cypress pipeline.
CD99-16 3 February 19, 1999 7:35 AM
• REQUEST FOR ACTION•
MEETING DATE: February 22, 1999 DEPARTMENT ID NUMBER: CD99-16
Because Huntington Beach is a City incorporated under California law, any extension of City
services, either through contract or by annexation, is regulated by the Cortese-Knox Act and
the Orange County Local Agency Formation Commission (LAFCO). The City may not
provide water or sewer services outside its jurisdictional boundaries, nor may it annex new
territory into its jurisdictional boundaries, without the approval of LAFCO. The City and/or a
property owner must therefore work within the defined procedures established by the
Cortese-Knox Act and the Orange County LAFCO in order to extend or receive municipal
services.
A request for annexation may be made to LAFCO by either the property owner or the
City. In fact, a City may be compelled to annex and provide services to a property if a
landowner requests annexation and it is approved by LAFCO. Bolsa Chica is within the
LAFCO-adopted "Sphere of Influence" for the City of Huntington Beach. LAFCO Spheres of
Influence are developed by the Commission to determine future service areas for each
jurisdiction and, thus, where LAFCO expects that annexations will occur.
Despite the ability to do so, Hearthside Homes has not submitted any application to
LAFCO to annex the Bolsa Chica. The developer has indicated that it does not wish to
initiate annexation without a pre-annexation agreement with the City. Such an agreement
would set forth the terms and conditions of annexation and clarify the responsibilities and
rights of annexation for both parties, including development rights, development standards,
and infrastructure requirements. Understanding this, on January 20, 1998, the Huntington
Beach City Council authorized its staff to prepare a detailed study concerning the
implications of annexation of Bolsa Chica.
The City obtained the services of specialized consultants and prepared the 56-page report
previously submitted to the PUC on February 19, 1999. This report reviews for the City of
Huntington Beach the pertinent LAFCO procedures and the potential fiscal impacts
associated with the annexation of Bolsa Chica. The first draft of this report was completed in
June, 1998, and presented to the City Council Bolsa Chica Subcommittee (a formal Council
Committee comprised of three Council members) and the public at a noticed, public meeting
on July 29, 1998. Due to considerable public response, subsequent noticed, public meetings
of the Bolsa Chica Subcommittee were held on September 24, 1998 and November 30,
1998. As a result of the public input, including comments on the report from Hearthside
Homes, the original draft report was refined and a final draft issued for Subcommittee review
and consideration on January 7, 1999.
At the January 7, 1999 Bolsa Chica Subcommittee meeting, the Council Subcommittee
members took action to recommend that the full City Council direct the City Administrator to
develop parameters for negotiation of a pre-annexation agreement with Hearthside Homes,
and that staff design a strategy for annexing Bolsa Chica into the City boundaries. This
CD99-16 4 February 19, 1999 7:35 AM
• REQUEST FOR ACTION•
MEETING DATE: February 22, 1999 DEPARTMENT ID NUMBER: CD99-16
recommendation is scheduled to be discussed by the full City Council on February 22, 1999.
( The staff report prepared for the February 22 hearing is attached.)
Question 2. Does the City presently have surplus water or immediate access to
water supplies sufficient to meet the stated requirements of the Planned Community?
Response:
If Bolsa Chica were annexed into the City, the City would have a statutory obligation to
provide water service to the area. The City relies on two basic sources for its water supply: It
produces local groundwater from the basin managed by the Orange County Water District
(OCWD) and it obtains imported water from the Municipal Water District of Orange County
(MWDOC). The Bolsa Chica has already been annexed into the service areas of OCWD
and MWDOC.
Details of the actual requirements for water and related supporting infrastructure, including
delivery pipelines, storage reservoir(s) and booster station(s), are expected to be refined
during pre-annexation negotiations with the developer.
Question 3. If the City prefers annexation, is it able to immediately proceed with the
annexation formalities to annex the Planned Community?
Response:
If the City Council approves the Subcommittee recommendation on February 22, 1999, the
City will immediately begin discussions with Hearthside Homes on a pre-annexation
agreement. Once a pre-annexation agreement is completed and approved by the City
Council, annexation may be initiated and application made to LAFCO. (Alternatively, if the
property-owner wishes to do so, Hearthside Homes may initiate an application with LAFCO
at any time). It should be noted that the LAFCO process requires prezoning of the property in
question, and necessarily involves full public disclosure, including noticed hearings at the
City Planning Commission, City Council, and at LAFCO.
Question 4. If the City is unwilling or unable to annex at this time, but is now willing
and able to provide water and/or sewer services to the Planned Community, and
desires to do so, is the City willing to expeditiously negotiate and execute a binding
service contract or contracts for provision of water and/or sewer services to the
Planned Community?
Response:
CD99-16 5 February 19, 1999 7:35 AM
REQUEST FOR ACTION•
MEETING DATE: February 22, 1999 DEPARTMENT ID NUMBER: CD99-16
In March, 1997, Hearthside Homes' predecessor, Koll properties, proposed a contract to
provide extra-territorial water service to Bolsa Chica. While the City Council rejected the
specific terms and conditions of that proposal, the City at no time has taken the position that
it would never enter into such a contract under any circumstances. Any contract to provide
such services outside of the City boundaries would require review and approval by LAFCO.
Based on the recent action by the Bolsa Chica Council Subcommittee, the Council is not at
this time considering a contract-service approach, but is instead moving toward a strategy for
annexation that would be beneficial to both the City and the developer.
C. SUMMARY
Representatives of the City must appear at the February 25, 1999 prehearing conference
with the PUC and should be prepared to provide the PUC with answers to the four questions.
These answers must reflect current City Council policy.
Environmental Status: Not applicable. This action does not constitute a project under the
California Environmental Quality Act. ,
Attachment(s):
City Clerk's
Page Number No. Description
1 Assigned Commissioner's Ruling Noticing Prehearing Conference
2 Pre-hearing conference statement dated February 18, 1999
RCA Author: wn
CD99-16 6- February 19, 1999 7:35 AM
ATTACHMENT 1 11
HMD/JBW/tcg 2/�- 9
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of Southern
California Water Company (U 133 W) for a
Certificate of Public Convenience and Necessity Application 98-11-003
pursuant to California Public Utilities Code (Filed November 5, 1998)
Section 1001 to Extend its West Orange County
System to the Bolsa Chico Planned Community
In the Matter of the Application of Southern
California Water Company (U 133 W) for a
Certificate of Public Convenience and Necessity
pursuant to California Public Utilities Code Application 98-11-015
Section 1001 to Operate and Maintain a (Filed November 10, 1998)
Wastewater System to Provide Service to the
Bolsa Chico Planned Community
ASSIGNED COMMISSIONER'S RULING
NOTICING PREHEARING CONFERENCE
As relevant to applications filed on or after January 1, 1998, Rule 6.1 of the
Commission's Rules of Practice and Procedure requires the Commission
preliminarily to determine the category of the applications and whether or not a
hearing is indicated By Resolutions ALJ 176-3003 adopted November 19, 1998,
and ALJ 176-3004 adopted December 3, 1998, respectively, the Commission
preliminarily designated the captioned applications as "ratesetting" with
hearings indicated
Where proceedings seem likely to go to hearing, Rule 6 2 requires the
assigned Commissioner to set a prehearing conference as soon as practicable.
Therefore,pursuant to Rule 6 2, NOTICE IS HEREBY GIVEN that
Administrative Law Judge John B Weiss and I will hold a prehearing conference
37494 - 1 -
A.98-11-003, A.98-1A HMD/JBW/tcg
-in--the above entitled matters- or'-hursday'afternoon;February 2 ;1999;-at-- - --
100 pm in the Commissions Hearing Room;505'Van.Ness=Avenues San
Francisco, California.
A preheating conference has the purpose of clarifying the issues in the
proceedings, of dealing with procedural matters, to identify witnesses, and to set
dates for evidentiary hearings. All persons or entities seeking to become parties
in these proceedings shall attend the prehearing conference and file an
appearance. Those who demonstrate a plan to actively participate in the
proceedings will be granted party status. Any others filing appearances shall be
granted Information Only or other appropriate status. Pending the taking of
appearances at the prehearing conference, the temporary service list attached to
this ruling shall be used for this proceeding.
The two applications have been consolidated for purposes of hearing and
decision.
The 1996 Recirculated Draft Environmental Impact Report for the Bolsa
Chico Local Coastal Program (County of Orange Project No. 551) included the
environmental assessment as required by CEQA of the Bolsa Chico Planned
Community. This Program Environmental Impact Report was certified in June
1996 by the County (the Lead Agency for the Project), and following Appellate
Court review,became final. Thus, the Planned Community Project has received
the go-ahead of the responsible governmental organ, the County.
The involvement of this Commission therefore is not with development of
the Bolsa Chico Planned Community,but rather with the applications filed by
Southern California Water Company (SCWC) with regard to obtaining
Certificates of Public Convenience and Necessity (CPC&N) for provision of water
and sewer services to the Planned Community.
-2-
A.98-11-003, A.98-1*5 HMD/JBW/tcg
;....�.4;•-The Water Service: . -.,,.. .... ..-._....._... ...
The authorization-sought would be to construct a non-corttigUo
6.75 mile, 16-inch water transmission pipeline to the Planned Community from
SCWC's supply source in the City of Cypress, and after completion, to supply
water services to the Planned Community at rates and charges approved by this
Commission.
As the County's Program EIR analyzed the on-site facilities in the
Planned Community, certifying that no significant short or long-term impacts
had been identified, the Commission's responsibilities for these facilities would
be essentially ratesetting rather than environmental should the CPC&N be
granted.
However, as the County's Program EIR did not address the off-site
proposed SCWC water transmission pipeline,if the CPC&N is to be granted,the
Commission would have the responsibility of proceeding as the Lead Agency.
under CEQA for the pipeline project.
2. The Sewer Service
The County's Program EIR analyzed both the proposed on-site
i
wastewater facilities to be furnished by the applicant developer, and the off-site
connector facilities that the Orange County Sanitation District 11 would provide
to include flows from the Planned Community. That County Program EIR
certified that no significant short-term or long-term impacts had been identified.
There appears to be no significant changes in the Plan of Work Report. Should
there be, and as each project activity comes before the County Lead Agency, a
determination will be made by that Lead Agency as to whether their Program
EIR has provided the analysis necessary to comply with CEQA's requirements,
or whether additional environmental documentation documents must be
prepared. Thus,the wastewater system is within the purview of the County as
-3-
A.98-11-003, A.98-1*15 HMD/JBW/tcg •
the Lead Agency-for environmental assessment;-not within the purview-of this,.-,
-Commission:- The Commission's consideration will be addressed to-whether
SCWC has the necessary ability to operate and maintain the proposed,
wastewater system, the appropriate rates to be charged, and whether the
proposed system meets applicable design and construction standards so that a
CPC&N may be issued.
The City of Huntington Beach Project
As the Planned Community will be built, the issues presented to the
Commission by these applications regarding requested water and sewer services
will be resolved without delay. Accordingly, at the prehearing conference the
City will be expected to respond to these questions:
1. Does the City presently desire to itself provide water
service or sewer service to the Planned Community?
2. Does the City presently have surplus water or immediate
access to water supplies sufficient to meet the stated
requirements of the Planned Community?
3. If the City prefers annexation, is it able to immediately
proceed with the annexation formalities to annex the
Planned Community?
4. If the City is unwilling or unable to annex at this time,but
is now willing and able to provide water and/or sewer
services to the Planned Community, and desires to do so, is
the City willing to expeditiously negotiate and execute a
binding service contract or contracts for provision of water
and/or sewer services to the Planned Community?
Should parties desire to file and serve a prehearing conference statement
addressing scheduling, issues to be considered, or other procedural matters, such
filings and servings shall be made no later than February 19, 1999.
-4-
A.98-11-003,-A.98-1*5 HMD/JBW/tcg
:�.�•�:,••._.n: .•.�, Parties desiring•expedited..or daily transcripts should advise the Chief-
Hearing Reporter.by telephone--at(415) 703r1881 .no -later than three days prior to
the prehearing conference.-
Dated February 2. 1999, at San Francisco, California.
• a
IhIpy
M. Duque
Assigned Commissioner
-5 -
l A,98-11-003, A.98-105 HMD/JBW/tcg •
CERTIFICATE OF SERVICE
I certify that I have by mail this day served a true copy of the original
attached Assigned Commissioner's Ruling Noticing Prehearing Conference on all
parties of record in this proceeding or their attorneys of record.
Dated February 2, 1999, at San Francisco, California.
..,_✓l.e•a.;�T� �� J�its-ul�►
Teresita C. Gallardo
N O T I C E
Parties should notify the Process Office, Public Utilities
Commission, 505 Van Ness Avenue, Room 2000,
San Francisco, CA 94102, of any change of address to
insure that they continue to receive documents. You
must indicate the proceeding number on the service list
on which your name appears.
The Commission's policy is to schedule hearings
(meetings,workshops, etc.) in locations that are
accessible to people with disabilities. To verify that a
particular location is accessible,call: Calendar Clerk
(415) 703-1203.
If specialized accommodations for the disabled are
needed, e.g., sign language interpreters, those making
the arrangements must call the Public Advisor at
(415) 703-2074 or TDD# (415) 703-2032 five working
days in.advance of the event.
ATTACHMENT 2
FEB-16-SS 16 = 35 FROM=MCNAMARA VAN BLARCOM ID= 714 639 7212 PAGE 2/7
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of the
Southern California Water Company Application No.
(U 133 W) for a Certificate of Public 9811015
Convenience and Necessity Pursuant to
California Public Utilities Code Section
1001 to Extend its West Orange County
System to the Bolsa Chica Planned
Community.
In the Matter of the Application of the
Southern California Water Company
(U 133 W) for a Certificate of Public Application No.
Convenience and Necessity Pursuant to 9811003
California Public Utilities Code Section
1001 to Operate and Maintain a
Wastewater System to Provide Service to
the Bolsa Chica Planned Community.
PREHEARING CONFERENCE STATEMENT
I
City of Huntington Beach Protestant's Attorney:
Attn: Gail Hutton, City Attorney
2000 Main Street Gail Hutton, City Attorney
Huntington Beach, CA 92648 Scott F. Field, Deputy City Attorney
Telephone: (714) 536-5555 Ronald A. Van Blarcom
Facsimile: (714) 374-1590 McNamara, Van Blarcom,
McClendon & Leibold, P.C.
307 East Chapman Avenue
Orange, CA 92866
Telephone: (714) 639-6700
Facsimile: (714) 639-7212
FEB-18-1999 16:35 7146397212
FEB-16-99 16: 36 FROM:MCNAMARA VAN BLARCOM ID: 714 639 7212 PAGE 3/7
L INTRODUCTION
The City of Huntington Beach(the"City") has protested Southern California Water
Company's ("SCWC") applications to provide water and waste water service to the Bolsa Chica
Planned Community because the filing of those applications unreasonably interferes with the local
decision making process that is already underway with respect to the issue of how to best provide
municipal services to an unincorporated area that lies wholly within the City's approved sphere of
influence.
SCWC's applications also raise certain technical issues as to whether SCWC can safely
provide water service to the Bolsa Chica and whether SCWC has the necessary expertise and
resources to provide wastewater service—a service that SCWC does not currently provide to
any other customers in their Orange County District service area.
EL ISSUES TO BE CONSIDERED
Issues liaised by the Commission
The Commission has posed four questions to the City in the prehearing conference notice.
The City's answers to those questions will be forthcoming and filed as a supplement to this
Prehearing Conference Statement. On February 22, 1999, the City Council will convene to
consider authorizing commencement of negotiations with the Bolsa Chica developer for a pre-
annexation agreement. It will also consider approval of responses to the four questions.
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The City understands that the issue underlying each of those questions—how should
municipal services like water and sewer service best be provided to the Bolsa Chica area—is an
important issue for the PUC. Likewise, the PUC must understand that this issue is very important
to the local community in Huntington Beach and the surrounding area. This issue has been
publicly debated in the local area for some time. It is a complex issue that is best resolved-by the
local community that will have to live with the decision that is made.
The February 22nd City Council meeting represents the next logical step in a public
decision making process that the City formally began over one year ago. On January 20, 1998,
the City Council authorized City staff to prepare a detailed study concerning the implications of
annexation of the Bolsa Chica area into the City and to report back to a special City Council
Subcommittee formed to consider Bolsa Chica annexation issues. The City obtained the services
of several skilled annexation consultants and a draft fiscal study was released to the City Council
Subcommittee in June 1998. Public workshops were held by the Subcommittee on July 29, 1998,
September 24, 1998 and November 30, 1998.
On January 7, 1999, the City Council Subcommittee took two important actions. The
Subcommittee approved the 56-page annexation report that was reviewed and revised over the
course of the three public workshops. It also recommended that the full City Council direct the
City Administrator to propose a strategy for annexing the Bolsa Chica and develop the parameters
for negotiating a pre-annexation agreement. Even a cursory review of the annexation report that
was approved by the Subcommittee demonstrates the focused and sincere effort by the City to
analyze the implications of annexing the Bolsa Chica area. (The annexation report, exclusive of
attachments, is attached as Exhibit"A.")
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While consideration of the Subcommittee's recommendations was originally scheduled for
the February 8, 1999 City Council meeting, the action was delayed due to the absence of certain
members of the City Council. Given that the annexation issue is one of the most critical local
issues facing the City, consideration by the full Council is imperative.
After the February 22nd Council meeting, the City's representatives will be able to provide
responses to the Commissioner's four questions. The City will provide a supplement to this
Prehearing Conference Statement prior to the Prehearing Conference.
Additional Issues to he Considered
In addition to the Commissioner's questions to the City regarding annexation, water and
sewer service, the City submits that there are several other questions to be answered related to
annexation and SCWC's ability to provide the proposed services. The following questions go to
the issue of whether SCWC's proposal is in the best interest of the public.
1. Does SCWC presently have surplus water or immediate access to water sufficient to meet
the stated requirements of the Planned Community?
2. What steps will SCWC take to acquire the necessary expertise and resources to operate
and maintain a wastewater system?
3. In that SCWC has proposed a"dead end"water system as opposed to a"looped" system,
what contingency plans will SCWC implement in order to be prepared for routine
maintenance, shutdowns, or any emergency interruption to the pipeline?
4. Has SCWC sufficiently addressed the impact of increased groundwater pumping on areas
surrounding the Bolsa Chica?
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5. Is the Developer prepared to immediately proceed with the annexation formalities to
annex the Planned Community into the City of Huntington Beach? What steps, if any, has
the Developer taken to seek annexation to the City?
6. Would approval of the applications by the PUC impair the Orange County LAFCO's
statutory duty to preside over orderly urban development through annexation such that the
applications before the PUC are not justified by the public convenience and necessity until
such time as the Developer demonstrates that annexation is not a viable alternative?
7. Would approval of the applications by the PUC be consistent with Orange County
LAFCO's policy of discouraging County"service islands" in developed areas next to
existing cities?
8. Has all of the litigation regarding the development of the Planned Community been
completed, and have aA required land use approvals been obtained?
III. SCHEDULING
The City recognizes that the Developer's need to resolve the water and wastewater
service issues is time sensitive. However, local resolution of the annexation questions facing the
community could directly resolve water and wastewater service issues without involving the PUC.
The City proposes that the Commission continue this prehearing conference for 60 days at which
time the City will be prepared to report on the progress of the annexation negotiations. If, 60
days from now, the Commission or the Developer is dissatisfied with the progress of those
negotiations, the Commission could then set the matter for hearing.
-4-
FEB-18-1999 16:37 7146397212
FEE-16-99 16: 37 FROM:MCNAMARA VAN BLARCOM ID: 714 639 7212 FACE 7/7
The City continues to maintain, consistent with its Protests, that an evidentiary hearing
will be necessary if this matter proceeds before the PUC. However, in light of the actions that
may be taken by the City Council on February 22, 1999 and the possibility that the City and the
Developer may be able to negotiate a solution that is better for the public than the extension of
services proposed in SCWC's applications, the City submits that issues related to an evidentiary
hearing (e.g., witnesses, expert testimony, documents, etc.) would be better addressed at a
subsequent prehearing conference or by way of a joint prehearing statement following the
February 25'k Prehearing Conference.
Dated: February 18, 1999 av)&
Protestant's Attolwey
Ronald A. Van Blarcom
McNamara, Van Blarcom,
McClendon & Leibold, P.C.
307 East Chapman Avenue
Orange CA 92866
Telephone: (714) 639-6700
Facsimile: (714) 639-7212
-5-
FEB-19-1999 16:37 7146397212
* 0
(6) 02/22/99—Council/Agency Agenda— Page 6
6. Provide the City Council with a status report at a subsequent date addressing
additional issues which are not related to the property owned by Hearthside
Homes.
[Recommendations 1, 2, 3 (as amended) Approved 7-0)J
[Recommendations 4, 5, 6 Approved 5-2 (Harman, Sullivan: no)]
D-213. (City Council) Approve Responses To Questions Asked By The Public
Utilities Commission (PUC) In Relation To Water & Sewer Service For The
Bolsa Chica Planned Community
Communication from the Assistant City Administrator, Director of Public Works,
City Attorney and Director of Planning transmitting for Council consideration a
request to approve responses prepared by staff which address four questions
asked of the City of Huntington Beach by the Public Utilities Commission in
relation to water and sewer service for the Bolsa Chica Planned Community.
Recommended Action: Motion to:
Approve the responses prepared by staff to the four questions asked by the
Public Utilities Commission (PUC) in the February 2, 1999, Assigned
Commissioner's Ruling Noticing Prehearing Conference.
[Approved 7-0)J
i
I
H• CITY OF HUNTINGTON BEACH
1 INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
To: Mayor and City Council Members
Via: Ray Silver, City Administrator
From: Melanie Fallon, Assistant City Administrat�� �G,-,-
Date: February 22, 1999
Subject: Late Communications for RCA CD99-11 and CD-16
The following attached items are submitted to the City Council as late communication for RCA
CD99-16 and CD 99-11:
A. Staff would like to correct a typographical error located on page three of RCA CD99-16(D-.1 b
B. Staff also is submitting copies of the PowerPoint presentations for RCA CD 99-11
and CD 99-16.
Attachments
z
r�
(U Y
(fs D
V '
BOLSA CHICA ANNEXATION
STUDY
CITY OF HUNTINGTON BEACH
FEBRUARY 22,1999
STUDY PURPOSE
The purpose of this report is to
review major costs and/or
benefits that could occur if the
ORIMMI'porated area of Bolsa
Chica were to be annexed into
the City of Huntington Beach
PRESENTERS
ANNEXATION PROCEDURES AND STUDY ASSUMPTIONS C
Laurie McKinley,SenbiParbler/NNA Consulting
FISCAL STUDY FINDINGS -r S
Dan M11kr,Princ/pal/RSOAssodates 1 J
1 � 1
l
ANNEXATION POSSIBILITIES
■ BEFORE,DURING,OR AFTER DEVELOPMENT
■COMPREHENSIVE(ALL AT ONCE),OR PHASED
■WHOLE OR PART
4
ANNEXATION PROCESS
■INITIATION
■LAFCO HEARING
■CONDUCTING AUTHORITY HEARING
(PROTEST PROVISIONS)
s
TYPES OF ANNEXATIONS
■UNINHABITED
■INHABITED
•
UNINHABITED ANNEXATION
■INITIATION
—AFFECTED AGENCY RESOLUTION
—PROPERTY OWNER PETITION(5%)
■lAFCO HEARING
■CONDUCTING AUTHORITY PROTEST
HEARING
—LANDOWNER PROTEST(50%)
INHABITED ANNEXATION
■ INITIATION
—AFFECTED AGENCY RESOLUTION
—PROPERTY OWNER PETITION(5%)
—REGISTERED VOTER PETITION(5%)
■ LAFCO HEARING
w CONDUCTING AUTHORITY PROTEST HEARING
—LANDOWNER PROTEST
.25%+...election
—REGISTERED VOTER PROTEST
.25%...election
-50%...termination °
DEVELOPMENT ASSUMPTIONS
I
■OCTOBER 1997 COUNTY FISCAL STUDY
■ 1,203 RESIDENTIAL UNITS
— 1,023 SINGLE FAMILY
— 180 MULTI-FAMILY
■ FOUR-YEAR BUILDOUT
■ BUILDOUT POPULATION: 2,887
■ASSESSED VALUES
—CURRENT: $21.3 million
—PROJECTED: $512.3 million
9
•
SCENARIO A:
ANNEXATION PRIOR TO DEVELOPMENT
KEYASSUMP77ONS
DCPENDrWRES
■ GENERAL GOVERNMENT
—ADMINISTRATION
—ANIMAL CONTROL
—COUNTY PROPERTY TAX COLLECTION CHARGES
■ COMMUNITY DEVELOPMENT
■ PUBLIC SAFETY
—POLICE DEPARTMENT
—FIRE PROTECTION
■ LIBRARY SERVICES
■ COMMUNITY SERVICES
to
SCENARIO A:
ANNEXATION PRIOR TO DEVELOPMENT
KEYASSUMP77ONS
EXPENDRURES
■ PUBLIC WORKS
—WATER AND WASTEWATER SERVICES
— PARK&LANDSCAPE MAINTENANCE SERVICES
—TIDAL INLET
■ CONTINGENCY
■ ROAD MAINTENANCE
—STREET MAINTENANCE
—BIKE TRAIL MAINTENANCE
u
SCENARIO A:
ANNEXATION PRIOR TO DEVELOPMENT
KEYASSUMP77ONS
REVENUES
■ TAXES ■ FRANCHISE FEES
—PROPERTY TAX ■ DEVELOPMENT RELATED
—PROPERTY TRANSFER TAX FEES
—UTILITY USERS TAX —LIBRARY COMMUNITY
—SALES TAXES ENRICHMENT&
—TRANSIENT OCCUPANCY DEVELOPMENT FEES
TAX —LAND USE PLANNING,
■ STATE SUBVENTIONS REGULATION&INSPECTION
• — MOTOR VEHICLE FEE - FEES
— DEVELOPMENT IMPACT FEES
12
SCENARIO A:
ANNEXATION PRIOR TO DEVELOPMENT
KEY ASSUMP770NS
REVENUES
■ OTHER REVENUES
- PARAMEDIC&AMBULANCE TRANSPORT FEES
- FINES&FORFEITURES
- OIL EXTRACTION TAX
- MISCELLANEOUS REVENUES
■ INTEREST
■ ROAD FUND
1]
PROPERTY TAX DISTRIBUTION
BASIC 1%TAX LEVY
Cw eey
The City also105
receives a 4.93% city
tax override $0.156 �
beyond the _ -
$0.156 from the _ -
base 1%Property _ py;,i_�,y. .,,,;.
Tax rate. r So.m
14
CURRENT BOLSA CHICA
(UNINCORPORATED)
PROPERTY TAX DISTRIBUTION
The City
does not .� ceurtr
currentty .€ #oos»• /
recelve
/ q
d.e
Property �` u
Taxes from .Cd.►A�nr.L�..,- t,r
15
POTENTIAL BOLSA CHICA
PROPERTY TAX DISTRIBUTION
WITH ANNEXATION
The Citys Iler�n o„e
potential
Property Tax
rate In Bo1sa A—
l6a06i (cb)
Chita k$0.1637, �+�� saus
plus the tax `:
override for a
total of$0.213.
ex
The Prope
rty
t
Tax rate h the
rest of the
(including Ne tax `
OVPlride)6
$0.2053.
16
SCENARIO A:
ANNEXATION BEFORE DEVELOPMENT
SUMMARY FINDINGS
YEAR 1 YEAR 2 YEAR 3 YEAR 4
Revenues $1,128,914 .$2,615,516 $3,124,976 $2,157,793
Expenditures 1,603,856 2,431,521 2,608,561 971,175
Annual Surplus
(Shortfall) (474,941) 193,995 516,415 1,186,618
Total ($474,941) ($290,946) $225,468 $1,417,087
17
SCENARIO B:
NO ANNEXATION
KEYASSUMPTIONS
EXPENDITURES REVENUES
■ LAW ENFORCEMENT ■ LIBRARY AGREEMENT
■ LIBRARY SERVICES —TAXES: 70.5%
■ COMMUNITY SERVICES — FEES: $300/UNIT($100
■ FIRE COUNTY,$200 HEARTHSIDE
HOMES)
■ FIRE AGREEMENT
—TAXES: 801/c
— FEES: $1.2 MILLION
16
SCENARIO B:
NO ANNEXATION
SUMMARY FINDINGS
YEAR 1 YEAR 2 YEAR 3 YEAR 4
Revenues $416,686 $1,615,791 $621,256 $731,559
Expenditures 1,379,187 2,201,455 2,230,090 564,310
Annual Surplus
(Shortfall) (962,500) (585,664) (1,608,834) 167,249
Total ($962,600)(S1,548,164)($3,156,998) ($2,989,749)
19
SCENARIO C:
ANNEXATION AFTER DEVELOPMENT
KEYASSUMP77ONS
EXPENDITURES REVENUES
■ANNEXATION IN YEAR 5 ■"LOST REVENUES"
—CONTINUANCE OF —PROPERTY TAX
COSTS FROM FIRST TRANSFERS
FOUR YEARS OF —UTILITY USERS TAX
DEVELOPMENT W/OUT —CITY OVER-RIDE TAX
ANNEXATION,WITH —OIL EXTRACTION TAX
ADDED EXPENDITURES
FOR WASTEWATER
MAINTENANCE&
OTHER MISC COSTS
20
SCENARIO C:
ANNEXATION AFTER DEVELOPMENT
SUMMARY FINDINGS
YEAR 4 YEAR S YEAR 6 VIM 7 YEAR a
Revenues 5731,559 $1,272,435 $1,286,636 $1,314.874 $1,339,166
bpek&mes 564,310 1,111,044 1,021,228 1,075,341 1,132,633
Annual Surpbn
(shoRraq 167,249 161,391 265,408 239,534 206,533
Total ($2,989,749)($2,a28,358)($2,S6X951)($Z323,417)($2,116,884)
21
SCENARIO D:
ANNEXATION WITHOUT DEVELOPMENT
KEYASSUMP77ONS
■NO DEVELOPMENT
■REVENUES
—PROPERTY TAX REVENUE
—OIL EXTRATION TAX REVENUE
■EXPENDITURES.
—MINIMAL DEMAND FOR SERVICE-ALL
BUT FIRE INSPECTION ABSORBED IN
EXISTING BUDGETS
u
SCENARIO D:
ANNEXATION WITHOUT DEVELOPMENT
SUMMARY FINDINGS
YEAR 1 YEAR 2 YEAR 3 YEAR 4
Revenues $158,999 $151,980 $143,988 $136,720
Expenditures 144,606 118,146 124,895 131,410
Annual Surplus
(Shortfall) 14,393 33,834 19,094 5,310
Total $14,393 $48,227 $67,320 $72,630
23
STUDY CONCLUSION
IN EACH SCENARIO EXAMINED,
ANNEXATION CREATES A BENEFICAL
FISCAL IMPACT TO THE CITY;
HOWEVER, THE CITY OBTAINS THE
GREATEST. BENEFITS IF ANNEXATION
OCCURS PRIOR TO DEVELOPMENT.
24
•
•
BOLSA CHICA SUB-COMMITTEE
ON JANUARY 7, 1999,THE COUNCIL SUBCOMMITTEE
MADE THE FOLLOWING MOTIONS TO THE CITY
COUNCIL:
MOTION 1:
Move that the Bolsa Chica Subcommittee recommend to
the City Council that they direct the City Administrator
i to develop a strategy that could result in annexing the
Bolsa Chica to the City of Huntington Beach prior to
development of homes in the Bolsa Chica.
s
BOLSA CHICA SUB-COMMITTEE
MOTION 2:
Also move that the Bolsa Chica Subcommittee
recommend to the City Council that they direct the City
Administrator to consult with the City Council to
establish those parameters which should be addressed
In any negotiation of a pre-annexation agreement for
the Bolsa Chca.
m
GOALS TO BE ACHIEVED IN A
PRE-ANNEXATION AGREEMENT
■FIRE
—FUNDING FOR CAPITAL IMPROVEMENTS
—RESPONSE TIME
—ACCESS TO DEVELOPMENT
■PUBLIC WORKS
—WATER SUPPLY&STORAGE CAPACITY
—WASTEWATER NEEDS
—TRAFFIC CIRCULATION/SAFETY&PARIGNG
v
GOALS TO BE ACHIEVED IN A
PRE-ANNEXATION AGREEMENT
■COMMUNITY SERVICES
-PARK DESIGN STANDARDS&FUNDING
FOR SERVICE/MAINTNENACE COSTS
■POLICE
-LEVEL OF SERVICE
-RESPONSE TIME
■LIBRARY
-LEVEL OF SERVICE
-PROPERTY TAX ALLOCATION 7°
GOALS TO BE ACHIEVED IN A
PRE-ANNEXATION AGREEMENT
■PLANNING
-COMPATIBILITY W/SURROUNDING USES
-DEVELOPMENT STANDARDS THAT ARE
ACCEPTABLE TO THE CITY
m
RECOMMENDED ACTIONS
SUBCOMMITTEE RECOMMENDATIONS
1. 'Receive and file the Bolsa Chica Annexation Study
dated January 7,1999'and
2. 'Direct the City Administrator to develop a strategy
that could result in annexing the Bolsa Chica to the City
of Huntington Beach prior to development of homes in
the Bolsa Chica'and
A
RECOMMENDED ACTIONS
ADDITIONAL STAFF RECOMMENDATIONS
3. 'Direct the City Administrator to consult with the City
Council to establish those parameters which should be
addressed in any negotiation of a pre-annexation
agreement for the Bolsa Chica'and
4. 'Authorize Staff to begin pre-annexation agreement
discussions with Hearthside Homes based on the
negotiation strategy presented on pages 4 - 6 of the
February 22,1999 RCA'and
n
RECOMMENDED ACTIONS
5. 'Authorize Staff to communicate with all property
owners within the Boisa Chica regarding the
possibility of annexation into the City of Huntington
Beach'and
6. 'Provide the City Council with a status report at a
subsequent date addressing additional issues which
are not related to the property owned by Hearthside
Homes.'
n
PUBLIC UTILITIES COMMISSION
PROCEEDINGS
APPLICATION OF
SOUTHERN CALIFORNIA
R COMPANY(SCWC)
TO PROVIDE SERVICES TO THE
BOLSA CHICA PLANNED COMMUNITY
]7
11
i
ROLE OF THE PUC
■REGULATE PRIVATE UTILITIES LIKE SCWC
■ DETERMINE SERVICE BOUNDARIES FOR
PRIVATE UTILITIES
-CONSIDER REQUESTS TO EXTEND SERVICE
TERRITORY
-PURPOSE IS SIMILAR TO LAFCO'S ROLE FOR
PUBLIC ENTITIES
-EVALUATE&DETERMINE PUBLIC CONVENIENCE
AND NECESSITY
H
THE SCWC APPLICATIONS
■WATER SERVICE
-EXTENSION OF SCWC'S WEST ORANGE
COUNTY SYSTEM
-6.75-MILE PIPELINE FROM CITY OF
CYPRESS
■WASTEWATER SERVICE
-COLLECTION AND PUMPING
3S
PROTEST OF THE APPLICATIONS
■CITY FILED PROTESTS WITH PUC IN
DECEMBER 1998
■CITY BECAME AN"INTERESTED
PARTY"
■CITY INVITED TO"PREHEARING
CONFERENCE"
12
PREHEARING CONFERENCE
in PURPOSE IS TO CLARIFY ISSUES AND DEAL
WITH PROCEDURAL MATTERS
—FEBRUARY 25,1999
—COMMISSIONER HENRY M.DUQUE
—ADMINISTRATIVE LAW JUDGE JOHN B.WEISS
■ INVITED CITY TO FILE A PREHEARING
CONFERENCE STATEMENT
■FOUR QUESTIONS ADDRESSED TO CITY
PREHEARING CONF. STATEMENT
■TO ADDRESS SCHEDULING AND IDENTIFY
ISSUES
■FILED CITY'S STATEMENT ON FEBRUARY 19,
1999
—INFORMED PUC OF ANNEXATION STUDY
—REQUESTED 60-DAY CONTINUANCE TO
NEGOTIATE PRE-ANNEXATION ISSUES
—IDENTIFIED ADDITIONAL ISSUES FOR PUC TO
CONSIDER
m
STAFF RECOMMENDATION
MOTION
Approve the responses prepared by Staff to the four
questions asked by the PUC in the February 2,1999
assigned commissioner's ruling noticing pre-hearing
conference.
39
13