Planning Commission Blindsides Breans.

commission meetingI am still dumbfounded. With Chairman McGrade at the helm, carefully steering the Planning Commission towards an all too obvious destination, there was no hint of addressing the larger issues.

As people gathered for last night’s meeting, Director of Community Development David Crabtree was asked how he expected things would go. He smiled and responded, “It’s in the Commission’s hands now.”

Where did that confidence come from? What might he have known that the rest of us, on pins and needles, failed to understand?

My opinion? He knew the Commission had been prepped that process issues were not their responsibility, but Council’s. I think Commissioners realized that if they challenged process issues the City Attorney would have interjected and shut them down.

Consequently, there wasn’t a whisper about document destruction, the Records Retention schedule, arbitrary limitation of what the Commission was allowed to see or using an addendum to restrict public input.

Also my opinion, Chairman McGrade began his path to orchestrating the flow of discussion last night in January 2016, when he interjected himself into the selection process for Vice Chair.

Coincidently, this occurred at the exact same time that Planning Staff was rejecting the ICF proposal, deleting it from public record and moving forward with the addendum to the 2003 General Plan EIR.

Back to the meeting.

Dejected but still hopeful, a half dozen folks addressed the Commission during Matters from the Audience. They restated their concerns over density, building mass, traffic and parking — the big four.

The standout comments came from Dwight Manley. He shared a legal opinion from an environmental attorney clearly pointing out the gross error in using a General Plan EIR, which is a program level document, to assess a specific project… 14 years after the fact.

Right as rain, Dwight’s comments fell on deaf ears and Chairman McGrade moved on, without comment, and opened deliberation.

First to speak, Chairman McGrade set the tone by establishing his support for the project and his belief that everything was above board and legal.

Next up, Commissioner Schlotterbeck who went to great lengths to share the impressive extent of her due diligence. She reviewed thousands upon thousands of pages of highly technical and legal documents.

She also remarked that the public, whom she cared deeply about, had only a very limited understanding of CEQA. She cited specifics from the California Public Resource Code that proved there was nothing in the Hines project that violated law.

She also suggested that the project only complied with about 80% of the General Plan but failed to offer how to mitigate that shortfall. That’s like a transplant surgeon telling you that your new heart will work really well 80% of the time.

There are two solutions. Amend the General plan to accommodate the project so it is 100% in compliance or alter the project. Neither was done or even suggested last night.

Commissioner Schlotterbeck also raised the possibility that building “B” on the north lot might best be changed to condo/townhome product to lower density and add a very needed type of housing to Brea’s inventory. Other than weak applause from a few residents, the idea went nowhere. Why?

I’m wondering if changing from apartments to single family homes would trigger the need to change the zoning from Mixed Use to Residential. Such being the case, a new EIR would be automatically required. Not what Staff or Hines wanted.

Commission hits an impasse.

Chairman McGrade suggested a short break for Hines to discuss what options they were comfortable with moving forward. With Building “A” and the Hotel apparently in the bag, all that remained was to fix the density complaint for Building “B”.

Interjection: There is no way in hell Building “A” and the Hotel should have been given a free ride at this point! Everything should have remained on the table 

The likelihood that a creative solution could be instantly designed when it took the better part of a year and a half to get to this point was nonsense.

During the break I asked one Commissioner, if none of them cared about the breakdown in process and the look I received in return said it all. There was clearly the presence of a sad inevitability in their eyes. Their shoulders shrugged and they plodded, dejectedly, back to their seat.

For weeks, if not months… Hines, their attorneys, architects, engineers and consultant, John Koos, hunkered down in a conference room playing “what if” with every scenario Koos might imagine.

Over the break, all they did was find the right page in their playbook.

They didn’t even mention the condo/townhome option but jumped straight to a mashup of 3 and 4 stories reducing the density from 285 units to 228 units, leaving the total number of project units at 690.

This reduced the “B” building by this mystical magic number of 20% but something markedly less is true for the entire project. Neither the massive Building “A” on the corner or the Hotel across the street has been touched.

Back to deliberations.

As they did earlier, Vice Chair Willis and Commissioners Fox and Grosse added little to the discussion… all echoing concerns for density, building mass, traffic and parking — reaffirming their lack of support for the project as proposed.

Armed with this get-out-of-jail-free card, all that remained was to morph Brea Place into something different than what was currently proposed. The Commission moved on with a single minded determination.

I was reminded of the used car salesman eye-to-eye with the first prospect of the day… “What will it take for me to put you in this little jewel today?”

No interest in whether the heap of junk was even close to meeting the prospect’s needs, let alone their dream of a new car. No concern that the rattling valves and acrid smoke coming from the tailpipe were clear signs of a car on it’s last legs. Unworried that the greater expense of maintenance would likely crush the prospect later.

It was all about closing the sale.

The people of Brea got steamrolled last night. Staff knows it. The Commission knows it. Hines, their consultant, attorney, architect, traffic engineer… they know it.

The last to realize the unthinkable had occurred were the folks with the red buttons and the high hopes.

Will there be an appeal when, inevitably, the project with it’s crushing density, easily foreseeable flood of traffic and long list of overlooked negative impacts is approved?

Maybe, maybe not.

“Leadership is disappointing your constituents in increments they can absorb.”

This O’Donnellism, this longstanding municipal mantra, once again proved prophetic. I’m not fond at all of the fatalist’ mentality, but this feels a lot like, “Game over.” 

I’m unwilling to give up. How about you? Are you ready to roll over or will you take some time out of your busy day to become part of the solution?

Markman & Flower

Tiered Water Rates – Part 2.

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I sat through round two of Council’s review of tiered water rate recommendations from staff and Raftelis Financial Consultants. I saw the room full of glazed eyes and quizzical expressions. The only thing that seems abundantly clear was that nothing was clear at all.

Well, not exactly true. A couple of those residents bold enough to address Council during Matters From The Audience spoke in ways I could understand and brought up questions I’ve seen mirrored on NextDoor and in other social media.

For the average resident, there is way too much convoluted math, reliance on unsubstantiated industry standards and rocket science to ever understand this whole tiered water rates issue. So, rather than paint myself into a corner I asked one of Tuesday night’s more obviously bright speakers to write up his take on the meeting.

Thankfully, he agreed.

Brea Tiered Water Rates Follow-up

By: Jason Kraft

Jason KraftThe discussion about new tiered water rates at the October 6 Brea City Council meeting provided some interesting insights into the decision-making process. First of all, it’s important to note that no decision was made at this meeting regarding what the new water rates should be. It’s likely that no decision will be made for at least a month or two, since direction was given to city staff to provide alternative rate structure options.

Impact of Prop 218.

Once a decision is made and a new rate structure is selected, the new rates can only go into effect after information is mailed to each property owner and a public hearing is held 45 days after the mailing.

These requirements were put in place by Proposition 218, passed in 1996, which constrains local government’s ability to raise general taxes, assessments and certain property-related fees. Prop 218 also says that cities can’t charge fees for certain services that are higher than the cost of providing those services.

The text of Prop 218 is not clear on whether or not water rates are included in the scope of the law. Recent court cases about tiered water rates, including a high profile case in San Juan Capistrano, have found that Prop 218 does apply.

This means that tiered water rates are only legal if you can justify the tiers based on the cost of supplying the water, and you can’t base the tiers on incentivizing conservation (Editorial note: applying a punitive component to the rate as a means of social engineering).

I had heard that the state water board was trying to fight this decision, but it looks like it will stand for now. As a result there are restrictions on how water rates can be set up, and explaining rates based on cost alone will be critical to avoiding legal issues down the road.

Fixing fixed revenues.

Raftelis Financial Consultants, Inc. was commissioned to put together a water rate study. One of the early insights was the disparity between the fixed costs of maintaining water infrastructure (63% of all costs) and fixed revenues based on meter charges (14% of revenue). Since so much of the revenue is variable instead of fixed, we lost a lot of revenue when conservation reduced water usage.

Of course, the obvious solution is to increase fixed rates. Cut to the next slide, which proposes a 6% total reduction in fixed rates.

The proposed new fixed rates are a 12% hike for residential customers and a cut of up to 38% for customers with larger meters. Oddly enough, the 6% total reduction figure was never mentioned in the presentation, I had to calculate that myself. You’d think that would be an important piece of information.

The proposed fixed rates represent industry-standard fees consisting of both a flat service charge and an additional cost component based on the size and maximum flow rate of each meter size. The current fixed rates were apparently pulled out of thin air, as no one seemed to know what they were based upon.

I was surprised by the consultant’s inability to address this; someone who specializes in presenting water rate studies should have realized the implication of these changes.

Brea’s fixed charges are among the lowest in Orange County – the charge for a standard 1” residential meter is $9.66/month (increase to $10.81 proposed), while Fullerton charges $12.94/month, and Yorba Linda recently increased their 1” fixed meter charge from $16.77 to $41.57.

No, that’s not a typo.

Increasing the fixed cost component based on max flow rate would help share the burden among all customers, and the council provided direction to investigate alternative structures that have a higher share of revenue from fixed charges.

Which variable rates are which?

The presentation then continued to variable rates, which provide most of the revenue. There are two major decisions to make about these rates: whether to use a blended supply cost or a differentiated supply cost, and whether to have uniform rates versus three tiers or four tiers for single family residential customers.

Most of Brea’s water (70%) is imported from Cal Domestic, which is much cheaper per unit than the 30% of our water that comes from the Municipal Water District of Orange County (MWDOC). Using blended supply would charge the same supply cost per unit (an average of both water sources) to all tiers, while differentiated supply would increase the supply costs for higher tiers, essentially allocating the more expensive MWDOC water to those who consume more.

Note that supply cost is only one component of the total cost of water: you also have to factor in the cost of delivery as well as peaking costs, which account for ensuring maximum customer demand and fire prevention requirements can be met. Under a blended supply model (the staff-recommended option), the only difference between the tiers is the peaking cost. Differentiated supply rates are farther apart since both the supply cost and the peaking cost increase with each tier.

The uniform rate – where there are no tiers and all customers pay the same — seemed to be dismissed out of hand. A proposed three tier model would be differentiated by water source, but the four tier model used today was the option recommended by staff.

Flat rates for other customers.

Aside from single family residential customers, Brea also supplies other types of customers: multiple family residential, non-residential, green belt, customers outside Brea city limits (county parks and the landfill), Brea Creek Golf Course, and construction. The first three types of customers currently pay the same flat rate, but the proposal would cut the rate for multi family residential and increase the rate for green belt customers, leaving non-residential customers at about the same flat rate.

There were questions from the council about why multi family residential customers were at such a low rate ($2.94 flat, which is only slightly higher than tier 1 for single family residential). It was explained that multi family residential customers tend to have relatively low water needs for each individual household, putting them somewhere between tier 1 and tier 2 if they were separate SFR customers, which makes sense.

There was also direction from the council to investigate setting up tiers for green belt customers based on square footage. The other customer classes have large variances in usage so tiering them would be tough, but for green belt customers this makes a lot of sense. The city should already have square footage information — even in the case of HOAs as green belts are usually separate parcels – and irrigation usage scales similarly among green belt properties.

The “Outside Brea” customer class was another point of discussion. The council directed staff to look at making a separate class for the landfill (which has relatively constant water use due to air quality requirements) and moving the county parks to the green belt category, since they mostly use water for irrigation anyway.

Conservation rates.

The biggest impact on Brea water customers, by far, will be conservation rates. Due to the aforementioned reliance on variable revenue, reduced water usage has caused costs to exceed revenues. This shortfall needs to be covered by raising rates.

Tiered Water RatesUnder this proposal, variable rates would be 17% higher than base rates while Brea is under a 24% conservation mandate. If the mandate is dropped to 10%, variable rates would be 6% higher than base rates. I’ve consolidated the data and charted it as best as I can, view a full size PDF here: Brea Water Rates Chart

Efficiency & Sustainability.

Going into the council meeting, I was concerned about the efficiency of the water supply system in terms of maintenance and administrative overhead. Apparently Brea’s water department is one of the leanest in the county, and capital projects have been scaled down to only what is critical for maintenance. It would be great to see public reports confirming this to help justify why revenues need to go up, but costs can’t go down.

I was also concerned about sustainability, given Brea’s water usage drop of only 13.8% in August, short of the 24% target. However, the new September reduction numbers are over 30%, and the metrics the state uses to calculate total water use reduction (current usage vs. two years ago) don’t take into account new customers added to the water system. So it looks like we’re in pretty good shape here.

Transparency & Fairness.

I still think there is an easier way to do this than setting up tiers based on seemingly arbitrary usage levels – for the four tier system, the justification for each tier is average indoor use, average summer use, everything else up to 90%, and the top 10%.

I’m not sure if that’s good enough to survive a Prop 218 lawsuit.

I had originally proposed a uniform rate with an added high usage tier for incentivizing conservation. However, given the legal restrictions and the latest water use reduction numbers, I believe focusing on allocating the more expensive MWDOC water to customers with the highest usage is the best way forward. I’m not sure what the specifics of this model would look like yet, but I think reducing the number of tiers and using a differentiated supply model is a step in the right direction.

Keep it simple, easy to understand, fair, and legally defensible.

To dream the impossible dream.

I believe Jason is exactly right.

  • Keep it simple, so those footing the bill clearly understand what they’re paying for and why.
  • Easy to understand, presented in lay language with math that doesn’t require an HP calculator to confirm.
  • Fair, distributing cost recovery and reserve requirements equitably without slipping in hidden punitive charges as has been typical since Brea created tiered water rates.
  • And legally defensible, living up to both the letter and the spirit of the law.

From day one, Council was duped into believing tiered water rates were, without question, perfectly legal. They weren’t. They violated Prop 218. The City Attorney must have realized this, as did the consultant. According to a source above reproach, Prop 218 was never even whispered in the room.

Sure, there hadn’t been a legal challenge, as in San Juan Capistrano, but so what? The law is the law. Crossing your fingers and hoping you don’t get caught is hardly the way to run a city. Is that what you teach your kids?

Hopefully, this time, Council will have all the facts at hand, a clear understanding of the legal obligations and a desire to put first those who are saddled with paying back the $30 million in water bonds.

Council Tackles Parking Again.

Mini_Pano

As expected, Matters From The Audience was dominated by folks addressing Council about the downtown parking structure. Opinions varied. All but one speaker contributed civil, thoughtful, meaningful comments. Everyone seemed to agree a structure was needed, however opinions were divided on which design made the most sense to them.

The solo speaker who ignored the real subject, ranted to Council about his disdain for one Brea businessman citing an email exchange that he either misread completely or manufactured the most bitter inaccurate interpretation possible. Read about my take on this misguided antagonist here: He’s No Friend Of Brea.

What did the real Brean’s have to say?

Comments and email received by Council predominantly favored building a parking structure but were equally divided about how to best fund the project. Some had no problem using general fund money, others strongly objected. There were even a couple of compassionate comments pointing out other projects or services they felt were more important than parking.

Also, several comments expressed excitement about the proposed new Improv entertainment and dining complex, recognizing how it would greatly contribute to revitalizing downtown.

Frankly, between the presentation of the Mayor’s Student Achievement Awards and the overall quality and tone of those commenting last night, I came away with a renewed appreciation for the people of Brea.

I was additionally pleased to see several genuinely new, younger faces. Brea needs to recruit strong, youthful leadership, to fill future elected, appointed and voluntary positions within Brea’s municipal government. This New Guard is an essential component of tomorrow’s leadership and our best guarantee of a bright future for Brea.

Counsel’s deliberations.

Rather than trying to summarize the he said and she said of the lengthy Council debate, I asked one of the new young speakers to give us his take on the meeting. Thanks to Jason Kraft for the following…

“At the June 16th Brea City Council meeting, the council agreed that a parking structure with at least 300 new spaces is needed behind the Tower building to provide critical infrastructure for the expansion and redevelopment of businesses on that block. The open questions are how to fund it and whether to include housing and office space in the parking structure.

The council did not make any final decisions at the meeting, but they are proceeding with a request for bids to build a parking-only structure. The council also requested more detailed information from the developer of the “Parking Plus” plan, which includes office space on the top floor and 40 affordable housing apartments within the parking structure.”

The clock is ticking.

Staff indicated that the RFP process might take as much as 90 days, mostly driven by the complexity of the process for the “Parking Plus” option. Likely, figures could be available sooner than 90 days for the “Parking Only” option.

The Improv did say that synchronous opening of their complex and the structure isn’t necessary, but we all can guess that it needs to be reasonably close.

The “Parking Plus” option, it was pointed out, wouldn’t be able to apply for tax benefits until next March with a one year processing period being typical. Add another 2+ years to complete the project and the ribbon cutting wouldn’t likely happen until mid-2019.

I would be more than a little concerned that the total time required to complete any “Parking Plus” option would sufficiently conflict with the Improv’s timetable and cost Brea the project.

I trust staff and Council will weigh these and the soft cost issues carefully, that the immediacy of Brea’s ROI will be clearly understood and that we’ll finally reach closure on this prolonged matter.

Another resident speaks.

I’ll let these few words from Brea resident Tom Dunlap, whose position reflects the majority of communications reaching me, to provide the closing thoughts.

“As long as Brea is prudent with the spending and it does not dip too heavily into the General Fund reserves I am in full support of this project going through. We have a golden opportunity to create something very special downtown and I would hate to see this slip through the city’s fingers and end up with a deteriorating downtown.”