City Council Regular Meeting


Print

Return to the Search Page Return to the Agenda
  11.A.       
Meeting Date: 08/18/2021  
From: Dave Laredo

RECOMMENDATION
Introduce and hold first reading of an ordinance to amend Pacific Grove Municipal Code section 11.68 related to water distribution regulations to enable promissory notes associated with payment of entitlement water sales, and direct publication of the ordinance will be satisfied by publication of a summary as approved by the City Attorney.
DISCUSSION
At the regular council meeting of July 21, 2021, the City Council began to consider a draft ordinance to modify the Pacific Grove Municipal Code and enable promissory payment for select purchases of entitlement water. (Agenda Item 11B).  Council opened the public hearing on first reading of the draft ordinance, received testimony and began council deliberation.  Several motions were made at this meeting, as follows:
  • A main motion (made by Mayor Pro Tem Smith, 2nd by Councilmember Poduri) was made to approve first reading of the ordinance as recommended by staff;
     
  • A motion to amend, denominated as a “substitute motion”[Note: The League of Cities offers the following comment regarding use of “substitute motions,” “Robert's [Rules of Order] does not make a distinction between motions to amend and substitute motions. However, motions to amend must be considered prior to a main motion.”] (made by Councilmember Coletti, 2nd by Councilmember McAdams) was made to approve first reading with three modifications: 1) to require 25% down payment for any sale of entitlement water; 2) not allow transfer of the entitlement or promissory instrument prior to full payment, and (3) to require Council approval of any promissory note.
     
  • A motion to further amend (made by Councilmember Tomlinson, 2nd by Mayor Peake) was made to approve first reading with two modifications: 1) to limit promissory notes for sale of entitlement water to only commercial projects; 2) not allow transfer of the entitlement or promissory instrument prior to full payment, and (3) to require Council approval of any promissory note.
Before a vote was taken as to any of the motions referenced above, an incidental motion was made by Mayor Peake and seconded by Mayor Pro Tem Smith to table (denominated a “motion to continue the item”) all action on this item to the council meeting of August 18, 2021.  This motion was carried 7-0 on a roll call vote. 

Procedurally the three motions referenced above remain tabled before the Council.  If no other action is taken, rules of parliamentary procedure require the three motions be taken in the following order, a) motion to further amend, b) motion to amend, c) the main motion.

The draft ordinance attached to this agenda report differs from the draft attached to the July 21, 2021 City Council agenda.  If approved, this draft implements the motion to further amend made by Councilmember Tomlinson, 2nd by Mayor Peake. If this motion passes, it is not necessary to consider any other motion because this motion substitutes for all other motions.

Substantive changes include
  • Promissory payments shall be allowed only for projects that require sale of 2.0 acre feet of entitlement water or more.  
     
  • No transfer or assignment of a promissory agreement or entitlement shall be allowed without consent of the City.
     
  • City Council approval shall be required to issue any promissory note.
 Non-substantive changes have also been made to the revised draft ordinance to clarify other concepts expressed during the Council discussion:
a) Each water entitlement subject to a promissory agreement shall be subject to revocation, shall not vest and shall not run with the land until the promissory obligation has first been paid in full to the City;
 
b) Any failure to pay on a promissory note constitutes default of the promissory agreement;
 
c) Any failure to pay on the promissory note allows the City to revoke the water entitlement;
 
d) Any failure to pay on the promissory note allows the City to withhold all final occupancy permits.
 
If the motion to further amend is not approved by a majority of council, a vote should then be taken on the motion to amend made by Councilmember Coletti, 2nd by Councilmember McAdams.  Approval of this motion to amend would approve the attached draft ordinance with the following changes:

Section 11.68.040 (b) would be modified to delete the following language from the draft:
 
If warranted by circumstances related to the sale of 2.0 acre feet of water or more for a specific project, the City in its sole discretion may elect to enter into a promissory agreement with the property owner(s) to effect sale of entitlement water. 
 
and in its place substituting Section 11.68.040 section (b) to read as follows: 
 
If warranted by circumstances related to a specific project, the City in its sole discretion may elect to enter into a promissory agreement with the property owner(s) to effect sale of entitlement water provided the property owner shall first pay to the City at least 25% of the full cost of the entitlement water. The principal amount of the promissory note shall not exceed 75% of the cost of the entitlement water. 
 
In considering this motion, staff recommends adding language to clarify whether the 25% deposit is non-refundable or refundable upon default.  This would assure that the deposit is handled appropriately for accounting, financial, and audit purposes.  If this motion to amend passes, it is not necessary to consider the remaining motion because this motion substitutes for the remaining motion.

If both a) the motion to amend and b) the motion to further amend are not approved by a majority of council, a vote should then be taken on the main motion made by Mayor Pro Tem Smith, 2nd by Councilmember Poduri.  Approval of the main motion would implement the draft ordinance attached to Agenda Item 11B for the Council Meeting of July 21, 2021.  The City Attorney nonetheless recommends that the main motion clarify that the non-substantive modifications referenced above (shown on the attached draft) be incorporated into the main motion to clarify:
a) each water entitlement subject to a promissory agreement shall be subject to revocation, shall not vest and shall not run with the land until the promissory obligation is paid in full to the City;
 
b) Any failure to pay on a promissory note constitutes default of the promissory agreement;
 
c) Any failure to pay on the promissory note allows the City to revoke the water entitlement;
 
d) Any failure to pay on the promissory note allows the City to withhold all final occupancy permits.
 
If none of the three pending motions is approved by a majority of council, a further motion addressing this matter would then be in order.

CEQA:  The PG Local Water Project EIR was certified on 11/19/2014 (SCH#2014021058). Adoption of an Ordinance to Amend PGMC Chapter 11.68 is an organizational and administrative act that does not constitute a “Project” under California Environmental Quality Act (CEQA) Guidelines Section 15378.b.5.
OPTIONS
  1. Take no action.
  2. Provide alternate direction.
FINANCIAL IMPACT:
There is no financial impact in adopting an ordinance enabling promissory payments for entitlement water as the note would require payment of costs and fees. Should payment not be made, the City is to withhold final occupancy permits until the default has been cured by full payment of all amounts owed; the City is also authorized to revoke the water entitlement and make that water available for other use.
  
GOAL ALIGNMENT: Help Local Businesses Thrive: Develop a strategic plan to serve existing businesses while attracting new commerce and revitalize commercial corridors.
Attachments
Draft Ordinance
Background


    

Level double AA conformance,
                W3C WAI Web Content Accessibility Guidelines 2.0

AgendaQuick ©2005 - 2022 Destiny Software Inc. All Rights Reserved.