CC 2016-11-22 Supplemental No 1 Item 10b � n
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MEMORANDUM
TO: CITY COUNCIL
FROM: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT: SUPPLEMENTAL INFORMATION
AGENDA ITEM 10.b. — NOVEMBER 22, 2016 CITY COUNCIL MEETING
CONSIDERATION OF A RESOLUTION TO AMEND THE STAGE 1
WATER SHORTAGE EMERGENCY PROVISIONS TO IMPLEMENT
ADDITIONAL RESTRICTIONS INCLUDING THE PROHIBITION OF NEW
WATER CONNECTIONS WHEN SPECIFIED WATER CONDITIONS ARE
DETERMINED TO EXIST
DATE: NOVEMBER 21, 2016
Attached is correspondence received today regarding the above referenced agenda
item.
CC' City Manager
City Attorney
City Clerk
Public Review Binder
RECEIVED
NOV 212016
ARROYO GRANDE
Arroyo Grande City Council CITY CLERK
Re: Resolution to amend Stage 1 water shortage emergency provisions /water connection
moratorium
Proposed Water Connection Moratorium is Not Fair to Infill Lot Owners
We respectfully request that the Council give exemption consideration to existing infill
lot owners wishing to build single family homes for personal occupancy.
We feel the hook-up moratorium should exempt infill lots for the following reasons:
1)Infill lots produce permit fees like subdivisions, but with little environmental impact.
2)Infill development does not require new City infrastructure such as water, sewer,
storm drains, streets, sidewalks, all of which are expensive for the City to maintain.
3) Infill use does not destroy farmland, open space or impact existing;view-sheds.
4) Infill use increases property tax revenue to the City, just like subdivisions.
5) Exempting the remaining infill lots within the City would have a negligible impact
upon our water sources versus new subdivisions.
Owners of infill lots have paid taxes on them,in some cases for many years. These taxes
have gone to support many City services. Consideration should be given to owners who
have paid taxes on their infill lots.
Consideration should be made to exempt the moratorium for those individuals intending
to occupy their new single-family residences on infill lots, versus those developing for
speculative purposes.
For example,we pay nearly $400.00 a month in taxes for our vacant lot. We need a home
for our family; a water hook-up is a necessity,not a means for profit-making. We cannot
afford to buy another house if we are unable to build on our own parcel. Nor can we
afford to pay$2,500 a month to rent a home for an indeterminate amount of time.
Exempting existing infill lots allows some new home construction to continue without the
additional heavy impact on our water sources which is created by new subdivisions.
Thank you for your considerat'
Respectfully
Gary& Suzanne Wells
151 Ridgeview Way
Arroyo Grande, Ca 93420 '
(805) 929-5966; gswells2@gmail.com
BELLE MER DEVELOPMENTS, LLC
998 Huston Street, Suite C R.8C12IVR1)
Grover Beach, CA 93433
NOV 212076
AR2CO YC G E
CLERK
November 21, 2016
City of Arroyo Grande
City Clerk
300 E. Branch Street
Arroyo Grande, CA 93420
RE: City Council Hearing November 22, 2016; Building Moratorium Pending
Resolution and; Request to have letter to be placed on the record.
Dear Mayor, Council Members and Staff;
This letter supplements the letter submitted to City Council on October 25, 2016, oral
comments made at previous hearings and in opposition to the November 22, 2016
proposed Stage 1 B Building Moratorium Resolution. We request this letter be given to
all Council Members and staff prior to the November 22nd Council Hearing and to be
included on the record. We further request that this matter be continued so you can
consider the comments contained herein and oral presentation made at the hearing.
Belle Mer Developments, LLC is the property owner and developer of Tract 3054, a
small infill residential project, located on Ash Street in Arroyo Grande. Belle Mer
purchased the property and entitlements for 7 residential lots from the prior developer
closing on July 1,2016 after the final map was recorded on June 6, 2016. The
Improvement Agreement for the final map was assigned to Belle Mer by Council and
Belle Mer posted the required security to construct public and private infrastructure, such
as road, utilities and streetscape improvements and to abandon a water well on the
property. The Bureau of Real Estate issued a Final Subdivision Public Report for the
project on June 10, 2016.
Belle Mer requests that the Stage 1B Emergency Resolution and Building Moratorium
be based on facts and considerations such as.advanced stage of entitlement or
development, investment, a direct nexus of the impact and the development mitigation
measures posed and other reasons as stated below.
1. Resolution is Not Consistent with Surrounding Cities
The staff report prepared for the City Council hearing on October 11th recommended
adopting Building Restrictions (Moratorium). At page 10 of the report the first
recommendation was to allow"Existing planning permit applications deemed complete
as of the date of a Resolution imposing the building moratorium would be processed and
building permits issued for those projects." We understood this to mean that
development projects wherein the applications were deemed complete could proceed
through to the issuance of building permits. Under this recommendation, Tract 3054
would be allowed to proceed to completion.
In drafting their recommendation above staff referred to Pismo Beach and San Luis
Obispo's recent adoption of Stage One Building restrictions and likened their
recommendation on those.
However, at the October 11th hearing the Council deviated substantially and arbitrarily
from the recommendations of staff and policies of neighboring Cities with regard to a
building moratorium by proposing a resolution which only allowed those with a"Vested
Tentative Map"to proceed. This is not a limitation contained in neighboring cities Stage
One Building restrictions.
The difference between the recommendation of being allowed to continue to completion
as being when the "application is deemed complete" and as opposed to what was
approved"vested tentative map"removes all consideration for those small projects that
were approved several years ago with a recorded final map and substantial investments
made.
The,staff memorandum report for the November 22nd hearing again does not address
those projects with a final map. In fact attachment 2 of the report does not list Tract 3054
as a project with a final map. The only reference are the 3 lots in Architectural Review.
How can a true water demand or project assessment be made without such crucial facts?
The map application for Tract 3054 was submitted and staff deemed it complete over two
years ago,the Planning Commission approved the tentative map and conditions over a
year and a half ago and the final map was approved by Council and recorded over three
months ago. The property owner entered into an Improvement Agreement with the City
in July of 2016 and posted security for the completion of the public improvements which
it is obligated to complete in one year. Improvement plans have been prepared and
approved, substantial fees have been paid, subdivided property tax increases are in effect,
significant costs for building plans, reports and studies have been incurred and loans for
construction are in place accruing interest each day. As of this writing the property
owner has invested over one and a half million dollars, significantly more time and
investment than an approved vesting tentative map of equal density and size.
2. All Projects Should Be Treated Equally
The City Attorney states the City is adopting the building moratorium and other
restrictions pursuant to California Water Code Chapter Three entitled"Water Shortage
Emergencies" (350-359) not under its police powers under the Subdivision Map Act or
its own Municipal Code. -By the Water Codes very language this code states a health and
safety emergency certainly giving the City authority to impair vested rights that are
acquired by vesting tentative maps (See Government Code section 65858). As such if the
City declares a Stage 1 B water shortage emergency no preference should be given to
those tentative maps with the word vested stamped on them. A more equitable approach
would be to assess those projects that have advanced through the process to a point that
the development has received final approval and developer has invested substantial time
and money. To do otherwise as proposed in the resolution would be unequitable and
selective. And certainly cause great hardship to a property owner in a late stage of
development.
3. Property Owner has a Common Law Vested Right to Proceed
In California vested rights may be obtained under the common law if the parry performed
substantial work and incurred substantial liabilities in good faith reliance on the
government approval or action. Belle Mer has a reasonable good-faith belief that the
development would continue,they have performed work and incurred substantial
liabilities in reliance on completing the seven lot residential-project to include building
permits. Belle Mer is obligated to complete the offsite improvements for the project by
- July of 20'17 and is liable for the substantial construction lending in place which is due on
:. or before August of 2017. If Belle Mer is stopped from completing the project through
construction of the seven homes it will breach the aforementioned agreements and likely
lose the investments made in the project.
The Council should also consider Gov. Code section 65961 which does provide
protections to a final map for 5 years after the recordation of a final map. Case law has
compared this language with that in Gov. Code conferring vested rights on a tentative
map.
Belle Mer acted in good faith on the City actions in approving the final map for this tract
and the principals of equitable estoppel should apply in this circumstance.
4. No Nexus to the Imposition of Building Moratorium or Alternative Measures on
Projects with a Final Map.
Staff in its October 11th findings determined that the projects currently approved would
not have an impact on the current supply of water. These projects would account for less
than 2% of the current water use and with a 1:1 offset of water mitigation the impact is
neutral.- This is a factual basis and analysis.
However,as directed by Council the November 22"d report and proposed resolution by
staff not only included a complete building restriction but also included an alternative'to
the restriction on new water connections. Any project that participates in the City's offset
program by providing'water savings of a ratio of 1 to 1.5 (150%) can receive a building
permit(new water connection). The report states that this can be achieved by a fee
combined with either the purchase of a permanent water supply through an approved
contract, an unfeasible option, or the retrofit of offsite facilities as determined by Public
Works or a Third Party consultant. Neither of these options stated provide any certainty
as to how to accomplish these measures or the cost to do so. The report cites that this
more robust offset measure of 1:1.5 would eliminate potential of underestimation, wear
and tear, or other water savings devices from being removed. However these are vague
and ambiguous conclusions not supported by any findings or evidence. The City cannot
require an offset that is more than the imposed impact if the basis is imprecise and
speculative.
As such the nexus between the impact and mitigation of a full moratorium on building
permits or a water offset of 1:1.5 for those projects with final discretionary approval has
not been met.
4. Building Moratorium Constitutes a Regulatory Taking of Property
Council is proposing a Stage IB Building Moratorium Resolution that restricts the
issuance of a building permit on new residential development if one or more of the three
triggering events happen. Such action is an extreme restriction on private property and
constitutes,a regulatory taking of property. Such action must be undertaken thoroughly
and objectively with intense scrutiny.
Even a temporary regulation is not different in kind from a permanent. If the owner is
deprived from-the use of his property then the owner is entitled to compensation for the
taking. Here there is an indefinite period that will prohibit Belle Mer from building the
homes. Even if they have possession the land will not retain competitive market value
and any future use is speculative.
One of the triggering events is that Lopez Lake has 10,000 acre feet of water or less. The
only definitive stated triggering event to eliminate the Stage I B moratorium is when
Lopez Lake is has 15,000 acre feet of water. No estimates as to when that might occur or
under what rainfall conditions. It could be six years or never.
Here, if the proposed Building Moratorium includes Tract 3504,the property owner's
rights with the regard to the property's use and value are significantly impacted and the
City's actions will'impose serious liability concerns for the property owner. The action
would simply render the property useless and worthless.
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5. City Does Not Have Authority to Impose Building Moratorium on Final Maps if
Project is Water Neutral.
The City's statutory authority to adopt a building moratorium is set forth in Water Code
section 350 et seq. and Government Code 65858. Both statutes have strict procedural
steps and time lines that must be followed and findings must be based on substantial
evidence.
Water Code section 350 allows a governing body of a distributor of a public water supply
to declare a water shortage emergency condition only if it finds that ordinary demands
and requirements of water cannot be satisfied without depleting the water supply of the
distributor to the extent that there would be insufficient water for human consumption,
sanitation and fire protection. The City does not currently have any specific thresholds in
place that clearly define triggers. It is clear from the October 11th hearing that Council,
staff and the community are at odds as to what those triggering thresholds should include.
Government Code 65858 addresses interim measures to protect the public safety, health
and welfare. This code limits the time and extensions that'may be imposed through the
measure. Most importantly,this Code section require that record be supported by
substantial evidence that there is no feasible alternative to satisfactorily mitigate or avoid
the impact identified as well or as better with a less burdensome or restrictive effect.
A requirement that new construction have zero impact to the water supply by requiring
100% or more water offset mitigation is a feasible alternative to avoid all impact that new
construction would have to the water supply.
Based on the October 11th staff report the review and analysis of the facts and data did
not justifiably warrant a building moratorium on the current projects wherein the
: application had been deemed complete. In fact the report and findings concluded there
are sufficient water resources to meet the anticipated buildout demand. These findings do
not support the proposed building moratorium resolution before the Council.
Conclusion
Belle Mer understands that Council and members of the community are concerned with
the City's water supply. However,to impose a building moratorium or 150%water
mitigation will have devastating outcomes for those who have invested and committed so
much time, effort and money with no regard to their position in the development process
at all, is not fair and will have devastating outcomes. Belle Mer's small infill project on
Ash Street will provide much needed housing, abandon an agriculture well that used
substantial water in the past,repair roads, cutters and complete sidewalks, underground
overhead lines and create jobs. All desirable attributes for an older neighborhood.
We ask the City to defer to staffs October 11th recommendations which are supported by
facts and data, a necessary element under both the Water Code and Government Code.
And further we ask the Council to act within their discretion and allow advanced entitled
projects other than those with a vesting tentative map to continue to completion and full
build out. If it does not, Belle Mer will suffer extreme undue hardship. It is our position
that if the City does not give the same consideration to these projects it will be acting
arbitrarily and in a discriminating and selective manner with regard which projects go
forward. More reasonable options such as continuing to require new development to
offset the water usage 100%, allowing those with final discretionary approval such as
final maps to continue to completion of the entire project and stop taking new parcel or
tentative map applications is a more feasible alternative and will not rise to the level of
rendering property useless and worthless.
We request you take the above in consideration prior to approving a resolution. If you
have any questions please contact me through counsel at 805-994-1841.
Bell Mer Developments, LLC
Gary Axelsen, Member
Cc: Pamela Denney, Esq.