June 2014.




Newport water taxis are a million-dollar idea – at least


2014-06-25 13:19:52

With a proposal to model Newport Beach’s water taxi system after the Marina del Rey’s WaterBus system, Harbor Commissioner Doug West told City Council members at their Tuesday study session to expect similar costs if they want something comparable.

Over the past three months, West and fellow Harbor Commissioners Joe Stapleton and David Girling have been looking at what it would take to get a water taxi service in Newport Beach. They’re doing it at the request of Newport Beach Mayor Rush Hill, who tasked the commission back in March to look at the feasibility of water taxis and a floating dock system in the harbor.

What they’ve come up with looks a lot like what’s running in Marina del Rey – a water bus-type system operating multiple vessels that would run on a loop, stopping at about eight locations in the harbor. And with a cost of $150,000 per vessel, $25 per hour boat captain fees, $20 deckhand fees and dock infrastructure costs, West said the price to get it up and running could be in the millions. West said the price to get it up and running could be in the millions.

Also similar to Marina del Rey’s system – which receives more than $400,000 annually from Los Angeles County in subsidies – Newport Beach’s system would need some help.

But whether city officials are willing to give that help has yet to be determined.

Councilwoman Nancy Gardner wondered if funds for water-borne transportation might be better spent on a tram operating along the Balboa Peninsula or Mariner’s Mile along the Pacific Coast Highway.

“If we are going to subsidize something, which we seem to be getting into the business of more and more, we ought to subsidize the right thing for the city,” Gardner said.

West and his fellow commissioners suggested the City Council look at hiring an outside consultant to determine more accurately the demand and cost for a water taxi system and draft a Request for Proposals that would attract potential businesses interested in running the system for the city.

“Newport Beach is one of the very few places in Orange County that really could provide a water taxi environment,” Mayor Hill said. “I don’t think we need to over analyze this thing. I think we need to try a pilot program.”

With the cost of hiring an outside consultant under debate, council members determined to keep the consulting in-house, directing city staff to iron out more details on the feasibility of the water taxi system, and bring a report back to the council at a later meeting.

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An Assembly bill that aims to protect fire rings in Southern California has passed out of a legislative committee.

The Senate Committee on Natural Resources unanimously approved Assembly Bill 1102 on Tuesday. It will go to the Senate Appropriations Committee in late summer.

The bill initially set out to block the South Coast Air Quality Management District’s Rule 444, which mandates that the rings in Southern California be at least 700 feet from homes and at least 100 feet apart.

As amended, AB 1102 would instead require a public agency, like a city, to obtain a coastal development permit from the California Coastal Commission if it chooses to remove or otherwise restrict access to the rings. The bill was co-authored by Assemblyman Travis Allen (R-Huntington Beach) and Assemblywoman Sharon Quirk-Silva (D-Fullerton).

The fire ring issue has caused a firestorm of debate in neighboring coastal cities Newport Beach and Huntington Beach, with some people arguing that the smoke from the bonfires is a health hazard and defenders pointing to the long-standing Southern California tradition of sitting around a fire at night on the sand.

The Senate committee proposed a few amendments to the bill, including one noting that Newport Beach is not prohibited from handing out charcoal free of charge for use in rings within 700 feet of residences.

Newport has enforced a charcoal-only rule since the end of March.

Newport City Councilman and 74th Assembly District candidate Keith Curry has voiced opposition to the bill, saying it would give more power to the Coastal Commission. He has said he would rather see individual cities determine the fate of their fire pits.

Huntington Beach Mayor Matthew Harper, who is also running for the 74th District seat, has supported keeping the rings, citing their appeal for residents and tourists.

Grand Jury reports Newport’s per capita unfunded pension liability is the highest in OC at $3,100.  Read the Grand Jury report here

While Irvine tightens its belt and pays off their long-term pension liability ten years early, Newport adds $228 million in Taj Mahal debt piled on top of our $265 million in unfunded pension liability. 



As other cities struggle to pay off their pensions and rate hikes loom, Irvine will use existing funds to pay off almost all the city’s $91.1 million in unfunded pension liability a decade earlier than expected.

The city will save about $33 million by gradually paying off its liability with available cash reserves. Based on projections, the city’s pension liability should be 98.7 percent funded by 2024 and entirely paid off by 2027.

“This plan is like paying off your house early,” said Mayor Steven Choi at Tuesday night’s City Council meeting. He and Councilwoman Christina Shea had directed city staff to look for strategies to tackle the issue.

Unfunded liability is the difference between what local governments have promised to pay workers when they retire and what they have saved to pay that bill. Each year, the California Public Employees’ Retirement System – CalPERS – collects a percentage of that debt from local governments.

Irvine pays 7.5 percent each year on its unfunded liability. The smaller that amount, the less the city has to pay each year. Cities run into trouble when they don’t keep up with their payments each year.

The new plan starts with a one-time $3 million payment from the city’s year-end balance this year. For the next 10 years, the city will take $5 million each year from its Asset Management Plan funds, a $61 million endowment currently used for infrastructure and rehabilitation.

The city will prepay the employers’ annual retirement amount for fiscal year 2013-2014 instead of paying it throughout the year, saving about $550,000.

The city also is looking into requiring its public safety employees to contribute to their pensions, a topic under discussion in labor negotiations now, Shea said.

“It is fairly uncommon for agencies to accelerate their pension funding toward their unfunded liability, and it’s a fairly significant decision,” said Amy Norris, a CalPERS spokeswoman.

Irvine has the resources available to do so after weathering the economic recession relatively well by leaning on reserves. And with large housing developments ahead, and more visitors coming to town, revenues from sales and hotel taxes are on the upswing.

Earlier this month, Laguna Hills City Council approved a lump sum payment of $577,805 from their reserves to pay off part of its unfunded pension liability eight years early. The move will slash the city’s $1.2 million liability in half.

But the average California city doesn’t have those kinds of resources to jumpstart or increase payments needed to reduce its liability, said Karol Denniston, a partner at Schiff Hardin LLP, a national general practice law firm. Many are still trying to figure out which factors to use to calculate exactly much they owe, she said.

More and more local governments are borrowing money through pension obligation bonds, which allow governments to take out loans from private investors hoping that the investment returns outweigh the interest they have to pay. But these bonds bring their own liabilities, and with bankruptcies in Stockton and San Bernardino, the market may not be as willing to buy bonds as readily, Denniston said.

But most cities have tried to make smaller changes such as laying off workers, scaling back retirement benefits for new employees and asking workers to chip in more for pension and health benefits to help pay off the city’s debt.

Those burdens will only increase when CalPERS rates jump 35 to 40 percent in 2015. In April, CalPERS decided to switch from a 30-year rolling payment plan – in which local governments never really paid off their debt entirely – to a fixed plan, which forces them to eliminate their debt within 30 years.

The payment rate will ramp up in the first five years and slow down in the last five. Orange County cities have been reluctant to estimate how much their yearly payment might rise when the new rates go into effect.

Revisionist history in the making.  Rush Hill chaired the citizens committee that determined the scope and size of the city hall project.  He bragged about it in his 2010 campaign video and assured voters that he was in charge.  You can see it here.  Now Hill says that “he expressed a goal to bring it in under $90 million during a campaign speech in 2010. When he arrived in office, he argues, it was too late to bring down the costs because the project’s scope had changed.”




Some boat owners holding tight to their moorings

Group of ‘salty dogs’ tell City Council that they don’t like the idea of switching to docks.

By Emily Foxhall

7:23 PM PDT, June 13, 2014

Newport Beach Mayor Rush Hill has pushed to replace some of these moorings, as they are called, with floating docks. Rather than scatter boats throughout the harbor’s center, two boats could be parked on either side of a dock, significantly consolidating the harbor space taken up by idled boats.

It would be easier to tie up vessels, and one day water and power could be provided to them, Hill says. Plus, most important from his perspective, it would create more open space for the public.

But the can-and-line mooring method is tried and true, not to mention low-cost, and a group of “salty dogs,” as one referred to them, doesn’t see any reason to change it.

They are the “average joes” — another member-given nickname — of the harbor, the ones who can’t necessarily afford a harbor-front home with a dock but who can pay the annual fee for a mooring. They love to sail and they love to be on the water — some to the point of choosing to live on their boats year-round.

Not all mooring holders feel so attached to this particular way of parking their boats. In fact some have already volunteered to make the switch to docks when possible. But some who do feeling strongly about their moorings, as members of the Newport Mooring Assn., showed up at the City Council study session Tuesday to offer comments about the floating dock idea. The group had taken an informal survey, and the results were presented at the meeting: of 61 respondents, 85% said they didn’t like the idea of floating docks.

“It kind of seems to me to be a government solution to a problem that really doesn’t exist,” said association board member Bill Moses.

The Harbor Commission committee that reviewed the idea was looking for a way to bring more value to permit holders, but to this nautical bunch, the open space around the boats that moorings allow for is critical. It creates the feeling of privacy, as if the ocean water were a moat around a floating castle, they said.

“Moorings are the last frontier for boating,” Councilwoman Leslie Daigle noted Tuesday, concerned about the “independent spirit” that might be lost if they disappeared.

“I used to have a mooring and I enjoyed that, what you’re talking about, just having space around you, which in this town is hard to find,” agreed Harbor Commissioner Brad Avery, who presented a subcommittee’s recommendations for a floating dock pilot project. “But the mooring permit doesn’t give them the right to have that. It’s just the mooring. The water belongs to everybody.”

Hill has promised that not every mooring holder would have to switch to a dock, but to them the mayor is not one to be trusted. They don’t care that he says the mooring holders would have a choice of whether or not to switch. They think they would have to help pay for the project regardless, and if it goes forward they think they might be forced dockside one day too.

After all, they say, when Hill was a councilman several years ago, he promised that the cost of building the Newport Beach Civic Center wouldn’t exceed $90 million. The facility came in at $144 million. (Hill says that he expressed a goal to bring it in under $90 million during a campaign speech in 2010. When he arrived in office, he argues, it was too late to bring down the costs because the project’s scope had changed.)

On Tuesday, the Harbor Commission suggested that the council put in some docks, perhaps six, as a pilot project to let a few boat owners try them out and others in the harbor to see them. The floats would measure 40 to 50 feet long and 6 feet wide.

The total cost for the pilot program would be about $248,000, according to the commission, based on an estimate of $35,000 per float, $20,000 for engineering and $3,000 for installation of sea lion deterrents. The commission suggested that electricity and water not be hooked up yet since that would be too complex for a trial run.

Hill was adamant that the cost to mooring permit holders should not rise, but noted in an interview later that the fees they already pay could cover the docks over a certain period of time.

But rather than move forward on the pilot program just yet, council members asked that city staff first survey all mooring holders and harbor-front homeowners, plus take input from anyone else who might want to chime in.




Daily Pilot

Muldoon touts fiscally conservative approach

By Emily Foxhall

6:47 PM PDT, June 5, 2014

Muldoon - Head Shot 2014Before the Newport Beach City Council election kicks into gear, candidate Kevin Muldoon wants to clear something up.

That beloved pub of the same name in Newport Center? Not his.

True, he is the general counsel for a company called 5 Bars Inside, but the firm deals in phone and Internet services rather than whiskey or beer.

It’s an understandable mix-up in a city that prizes its longtime establishments. Muldoon’s opened in 1974, and although the candidate’s grandfather was in attendance, that’s as far as the family ties to the establishment go.

The District 4 council candidate moved to Newport Beach about three years ago. He had joined Our Lady Queen of Angels Church years before and wanted to be closer to his church and his friends, he said.

Now an Eastbluff resident, Muldoon is running for a council seat because he believes the community needs an attorney and an advocate for property rights on the municipal body.

He is both. A 2006 graduate of the Chapman University School of Law, Muldoon has held legal positions with the Orange County district attorney’s office and the Irvine-based Westport Law Group and Baric & Associates.

Since 2004, he has also worked with the conservative Claremont Institute for Constitutional Jurisprudence and Chapman professor John Eastman on projects that included analysis of Newport Beach’s dock fees, which political consultant David Ellis praised as “fantastic legal work” in an email introducing Muldoon’s candidacy.

“Kevin brings a thoughtful legal mind, national political experience and fiscally conservative positions to the campaign,” wrote Ellis, who is not a consultant for Muldoon’s campaign.

Muldoon, who considers himself fiscally conservative, said his main priorities are reducing spending and protecting property rights in the city. He said Newport Beach is operated well but could be run more efficiently without incurring debt.

“I think the city has a lot of wealth,” he said. “Just because you have wealth doesn’t mean you should spend it.”

Muldoon will face Planning Commissioner Tim Brown and fight promoter Roy Englebrecht in the election. Councilwoman Leslie Daigle, who currently holds the seat, will be termed out.

Newport Independent



By Newport Indy Staff on May 30th, 2014

Local Lawyer Joins Council Race

Muldoon - Head Shot 2014A local lawyer announced plans to run for city council this week.

Eastbluff resident Kevin Muldoon will be vying for the District 4 seat on the Newport Beach City Council, according to a statement released May 23. “My goals as a city councilman will be to reign in excessive spending and get our long-term debt under control,” Muldoon said in a prepared statement. “I believe we have fallen into the trap of many wealthy cities that spend too much because they can. I saw it firsthand in Washington, D.C., where government has no fiscal self-control.”

He will face Planning Commissioner Tim Brown and Parks, Beaches and Recreation Commissioner Roy Englebrecht in the November election.

Muldoon was a White House intern in Office of Strategic Initiatives and worked in the Office of Strategic Initiatives under former Deputy Chief of Staff to the President, Karl Rove. He was a deputy district attorney in the Orange County District Attorney’s office and served as Orange County chairman of John McCain for President campaign.

He was also involved in the fight against the city’s increase in residential dock fees, the statement explains.

In 2010, Muldoon unsuccessfully ran against Assemblyman Don Wagner on the South Orange County Community College District in Area 2.

He currently works as general counsel for 5 Bars Inside in Irvine.

According to the press release, Muldoon has been endorsed by State Senator Mimi Walters, Orange County District Attorney Tony Rackauckas and Assemblyman Don Wagner.

The seat is currently occupied by Leslie Daigle, who has termed out.