Eleven Noteworthy 5 December 2017 City Council Regular Meeting Agenda Items

ABSTRACT: Eleven Noteworthy 5 December 2017 City Council Regular Meeting Agenda Items, including CLOSED SESSION, PUBLIC APPEARANCES, ANNOUNCEMENTS,

Monthly Reports for October 2017: City Administrator Contract Log, Community Planning and Building Department Reports, Fire, Ambulance, Beach Reports, Public Records Act Requests, and Forester Reports, Consideration of a resolution amending the Fiscal Year 2017-2018 Capital Improvement Plan and Adopted Budget to Incorporate a List of Projects Funded by SB 1: The Road Repair and Accountability Act, Consideration of a Mills Act Contract for an existing historic residence located in the Single-Family Residential (R-1) Zoning District., Consideration of a grant deed exchange between the City of Carmel-by-the-Sea and the Roman Catholic Bishop of Monterey, 1) Consideration of a Resolution adopting a Memorandum of Understanding (MOU) between the City of Carmel-by-the-Sea and Carmel Fire Ambulance Association for the period January 1, 2017 through June 30, 2019 and authorize the City Administrator to execute the Memorandum of Understanding 2) Adopt a resolution authorizing and approving the City of Carmel-by-the-Sea current pay rates and ranges (salary schedule) for Carmel Fire Ambulance Association classifications as of January 1, 2017, City Council review of a Use Permit (UP 17-80) application approved by the Planning Commission to convert an existing restaurant (Carmel Coffee and Cocoa Bar) located in the Central Commercial (CC) Zoning District from a specialty restaurant to a full-line restaurant, Consideration of an Ordinance (Second Reading) amending Municipal Code Sections 17.08 (Residential Zoning District) and 17.68 (Use Classifications) pertaining to accessory dwelling units in response to recently adopted state legislation and Receive a presentation regarding possible options for the use of the Flanders mansion and provide direction to staff.  The CITY OF CARMEL-BY-THE-SEA CITY COUNCIL AGENDA REGULAR MEETING Tuesday, December 5, 2017 and Staff Report document copies are embedded. 

Agenda Regular Meeting 12-05-17 by L. A. Paterson on Scribd

CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL AGENDA
REGULAR MEETING
Tuesday, December 5, 2017
TOUR OF INSPECTION 2:30 PM
CLOSED SESSION 3:00 PM
OPEN SESSION 4:30 PM

CALL TO ORDER AND ROLL CALL

TOUR OF INSPECTION

A. The Council will meet in the Council Chamber and proceed to an on-site tour of inspection of all properties listed on the Agenda. Members of the public are welcome to participate in the tour. Markowski Property - Northwest Corner of Santa Rita Street and Ocean Avenue

CLOSED SESSION

A. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION

Pursuant to Government Code Section 54956.9(D)(1)

Name of Case: Jacqueline Simonelli, Antonio C. Simonelli, Petitioners/Plaintiffs v. City of Carmel-by-the-Sea, California, Christopher Tescher, Dennis Levett, Pot D'Oro, LLC, and Doe 1 through Doe 100, inclusive, Respondents/Defendants Monterey County Superior Court Case No. M123079

B. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION

Pursuant to Government Code Section 54956.9(D)(1)

Name of Case: Stacy Lininger v. Ronald Pfleger, City of Carmel-by-the-Sea, et. al.

United States District Court, Northern District of California Court Case No. C17-3385SVK

C. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION

Pursuant to Government Code Section 54956.9(D)(1)

Name of Case: Gerit Sand; Cobblestone Bakery, a sole proprietorship, Plaintiff v. City of Carmel- by-the-Sea, Defendant - Monterey County Superior Court Case No. M130393

D. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION

Pursuant to Government Code Section 54956.9(D)(1)

Name of Case: City of Carmel-by-the-Sea, California, a municipal corporation, Plaintiff v. Pacific Harvest Seafoods, Inc. and Does 1 through 20, Defendants, Santa Clara County Case No. 16CV296492

E. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION

Pursuant to Government Code Section 54956.9(D)(1)

Administrative Hearing: CalPERS Joint Powers Authority retirement contribution dispute.

F. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to subdivision (b) of Government Code Section 54956.9(d)(2): 3 cases

OPEN SESSION

PUBLIC APPEARANCES
Members of the public are entitled to speak on matters of municipal concern not on the agenda during Public Appearances. Each person's comments shall be limited to 3 minutes, or as otherwise established by the City Council, Board or Commission. Matters not appearing on the City Council, Board or Commission's agenda will not receive action at this meeting but may be referred to staff for a future meeting. Persons are not required to give their names, but it is helpful for speakers to state their names so that they may be identified in the minutes of the meeting.

ANNOUNCEMENTS

A. Announcements from Closed Session

B. Announcements from Councilmembers

C. Announcements from the City Administrator

D. Announcements from the City Attorney

CONSENT AGENDA
Items on the consent agenda are routine in nature and do not require discussion or independent action. Members of the Council, Board or Commission or the public may ask that any items be considered individually for purposes of Council, Board or Commission discussion and/ or for public comment. Unless that is done, one motion may be used to adopt all recommended actions

1. Monthly Reports: City Administrator Contract Log, Community Planning and Building Department Reports, Fire, Ambulance, Beach Reports, Public Records Act Requests, and Forester Reports
Monthly Reports October 2017 12-05-17 by L. A. Paterson on Scribd

Monthly Reports: City Administrator Contract Log, Community Planning and Building Department Reports, Fire, Ambulance, Beach Reports, Public Records Act Requests, and Forester Reports

3. Consideration of a resolution amending the Fiscal Year 2017-2018 Capital Improvement Plan and Adopted Budget to Incorporate a List of Projects Funded by SB 1: The Road Repair and Accountability Act
Amending FY 2017-18 CIP & Adopted Budget 12-05-17 by L. A. Paterson on Scribd

Consideration of a resolution amending the Fiscal Year 2017-2018 Capital Improvement Plan and Adopted Budget to Incorporate a List of Projects Funded by SB 1: The Road Repair and Accountability Act

5. Consideration of a Mills Act Contract for an existing historic residence located in the Single-Family Residential (R-1) Zoning District.
Mills Act Contract 12-05-17 by L. A. Paterson on Scribd

Consideration of a Mills Act Contract for an existing historic residence located in the Single-Family Residential (R-1) Zoning District.

9. Consideration of a grant deed exchange between the City of Carmel-by-the-Sea and the Roman Catholic Bishop of Monterey.
Grant Deed Exchange Between City & Roman Catholic Bishop Monterey 12-05-17 by L. A. Paterson on Scribd

Consideration of a grant deed exchange between the City of Carmel-by-the-Sea and the Roman Catholic Bishop of Monterey.

11. 1) Consideration of a Resolution adopting a Memorandum of Understanding (MOU) between the City of Carmel-by-the-Sea and Carmel Fire Ambulance Association for the period January 1, 2017 through June 30, 2019 and authorize the City Administrator to execute the Memorandum of Understanding.
2) Adopt a resolution authorizing and approving the City of Carmel-by-the-Sea current pay rates and ranges (salary schedule) for Carmel Fire Ambulance Association classifications as of January 1, 2017.
MOU Between City & Carmel Fire Ambulance Assoc. 12-05-17 by L. A. Paterson on Scribd

1) Consideration of a Resolution adopting a Memorandum of Understanding (MOU) between the City of Carmel-by-the-Sea and Carmel Fire Ambulance Association for the period January 1, 2017 through June 30, 2019 and authorize the City Administrator to execute the Memorandum of Understanding.
2) Adopt a resolution authorizing and approving the City of Carmel-by-the-Sea current pay rates and ranges (salary schedule) for Carmel Fire Ambulance Association classifications as of January 1, 2017.

PUBLIC HEARINGS

13. City Council review of a Use Permit (UP 17-80) application approved by the Planning Commission to convert an existing restaurant (Carmel Coffee and Cocoa Bar) located in the Central Commercial (CC) Zoning District from a specialty restaurant to a full-line restaurant.
Review of Use Permit (UP 17-80) Application 12-05-17 by L. A. Paterson on Scribd

City Council review of a Use Permit (UP 17-80) application approved by the Planning Commission to convert an existing restaurant (Carmel Coffee and Cocoa Bar) located in the Central Commercial (CC) Zoning District from a specialty restaurant to a full-line restaurant.

16. Consideration of an Ordinance (Second Reading) amending Municipal Code Sections 17.08 (Residential Zoning District) and 17.68 (Use Classifications) pertaining to accessory dwelling units in response to recently adopted state legislation
Ordinance (Second Reading) Amending MC Sections 17.08 & 17.68 12-05-17 by L. A. Paterson on Scribd

Consideration of an Ordinance (Second Reading) amending Municipal Code Sections 17.08 (Residential Zoning District) and 17.68 (Use Classifications) pertaining to accessory dwelling units in response to recently adopted state legislation

ORDERS OF BUSINESS
Orders of Business are agenda items that require City Council, Board or Commission discussion, debate, direction to staff, and/or action.

19. Receive a presentation regarding possible options for the use of the Flanders mansion and provide direction to staff
Flanders Mansion Use Options 12-05-17 by L. A. Paterson on Scribd

Receive a presentation regarding possible options for the use of the Flanders mansion and provide direction to staff

ADJOURNMENT

Two Noteworthy 4 May 2010 City Council Agenda Items

ABSTRACT: Two noteworthy 4 May 2010 City Council Agenda Items, namely Receive presentation on the Carmel Beach canine education and enforcement program and an Ordinance amending the Mills Act program found in the Historic Preservation Ordinance and, are presented. Selected excerpts from the Agenda Item Summary and Staff Report are presented, as well as information submitted by historic residential property owner David D. Hutchings, including Hutchings’ Executive Summary.

AGENDA PACKET
Regular Meeting
Tuesday, May 4, 2010
4:30 p.m., Open Session
City Hall
East side of Monte Verde Street between Ocean and Seventh Avenues

Live and archived video streaming available

V. Announcements from Closed Session, from City Council Members and the City Administrator

D. Announcements from City Administrator
1. Receive presentation on the Carmel Beach canine education and enforcement program.

IX. Ordinances
A. Consideration of an Ordinance amending the Mills Act program found in the Historic Preservation Ordinance (First reading).

Description: This proposal would amend the application requirements of the Mills Act to eliminate some of the existing standards, place an emphasis on rehabilitation, and allow properties in any zoning district to apply.

Staff Recommendation: Approve the Ordinance (1st Reading).

Important Considerations: The Mills Act was enacted by the State of California in 1972 as a way to encourage partnerships between local governments and property owners of historic resources. Local governments are not required to participate in the Mills Act.

For those governments that do participate, a Mills Act contract may be offered to any property that contains an historic resource. The contract must be for at least 10 years and the property owner typically agrees to specific rehabilitation/restoration efforts. In turn, the property owner receives a reduced property tax assessment. The jurisdiction benefits by having historic resources maintained and enhanced; the property owner benefits by having a reduced tax burden.

Decision Record: The Council continued this item on 6 April 2010 with a request for additional financial analysis on the program.

STAFF REPORT
Exhibit “A” (attached) includes proposed changes to the existing ordinance to: 1) place an emphasis on rehabilitation; 2) revise the required findings; 3) open the program to commercial properties; and 4) allow the Council to establish by Resolution a limit on the number of contracts that could be approved.

Residential: There are approximately 210 residential properties listed on the City’s Historic Inventory. Properties that could potentially qualify for a Mills Act contract would be limited by the following considerations:

• Additions: The City’s ordinance does not allow contracts for properties with increased floor area by 15% or more from the original historic size. Without an analysis of every property on the inventory, it is impossible to know how many properties this requirement may disqualify. Staff estimates somewhere between 30% to 40%.

• Proposition 13: California’s Proposition 13 limits the maximum amount of
property taxes that can be assessed and prohibits reassessing a property’s value unless there is a change of ownership or new construction. Therefore, many owners of historic properties already enjoy low property tax rates and would not benefit by a Mills Act contract.

• Rehabilitation: If the Council adopts the proposed amendments, the number of potential candidates for Mills Act contracts will be further reduced based on the emphasis on rehabilitation.

Commercial: There are approximately 50 commercial properties listed on the City’s Historic Inventory. The City’s current Mills Act program does not include commercial properties, unless they provide affordable housing. The Council has expressed an interest in extending the program, particularly for historic motels.

The following motels are currently listed on the City’s Historic Inventory:
• Pine Inn (CC District)
• Cypress Inn (RC District)
• L’Auberge (RC District)
• Normandy Inn (RC District)
• La Playa (R-4 District)
• Sea View Inn (R-1 District)
• Colonial Terrace (R-1 District)
• Edgemere (R-1 District)

In general, Mills Act assessments are based on the Income Approach to Value rather than the standard Market Approach to Value. A key factor to this approach is what a property can produce in rent. Since rental rates are generally higher per square foot for commercial property, and particularly for motels, compared to residential property, commercial properties are generally not likely to see as significant property tax reductions from the Mills Act as would residential properties. Property tax reductions, however, could still be significant.

Economic Impact: Staff has assumed that the average market value of properties receiving a contract would be $1.5 million dollars. This would result in a net loss to the City of approximately $1,020 per contract (see Exhibit “B”). Staff also assumed that each 10-year contract would be renewed for an additional 10 years, as provided for in the Mills Act. Based on these assumptions, the following table demonstrates what the City could potentially lose in tax revenue (not including inflation) if two contracts were approved each year.

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10
$2040 $4080 $6120 $8160 $10,200 $12,240 $14280 $16,320 $18,360 $20,400

Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16 Yr 17 Yr 18 Yr 19 Yr 20
$22,440 $24,480 $26,520 $28,560 $30,600 $32,640 $34,680 $36720 $38760 $40,800

By Year 10 the City could experience a $20,400 reduction in property tax revenue in that year and have lost approximately $112,200 over a 10-year span. Staff points out, however, that based on the budget for fiscal year 2009/10, $20,400 would only be approximately .1% of the total budget.

Problematic Criteria: CMC 17.32.100 establishes findings that must be made in order to approve a Mills Act contract. Several of these findings make qualifying for a contract very difficult.

Summary: In summary, the Council should answer the following questions:

1) Should Mills Act contracts be offered primarily to properties with significant rehabilitation needs or should they be offered to all historic properties regardless of their current condition?

2) Should the existing problematic findings be amended as recommended?

3) Should the ordinance be amended to include historic commercial properties in the program?

4) Should the ordinance establish a cap on the number of contracts that can be approved during any given year? If a cap is established, should it exclude motels applications?

RECOMMENDATION
Approve the Ordinance amending the Mills Act requirements on first reading.

Exhibit “D”
Submitted by Historic Residential Property Owner David Hutchings
Note: Bold Print highlighted by Hutchings

California Government Code, Article 12, Sections 50280 – 50290

50281. Required contract provision.
Any contract entered into under this article shall contain the following provisions:

(b) Where applicable, the contract shall provide the following:

(1) For the preservation of the qualified historical property and, when necessary, to restore and rehabilitate the property to conform to the rules and regulations of the Office of Historic Preservation of the Department of Parks and Recreation, the United States Secretary of the Interior's Standards for Rehabilitation, a nd the State Historical Building Code.

GUIDELINES FOR THE ASSESSMENT OF
ENFORCEABLY RESTRICTED HISTORICAL PROPERTY

HISTORY
Effective March 7, 1973, Chapter 1442 of the Statutes of 1972 (also known as the Mills Act) added sections 50280 through 50289 to the Government Code to allow an owner of qualified historical property to enter into a preservation contract with local government. When property is placed under such a contract, the owner agrees to restore the property if necessary, maintain its historic character, and use it in a manner compatible with its historic characteristics.

ENFORCEABLY RESTRICTED HISTORICAL PROPERTY
Under section 439, historical property is "enforceably restricted" if it meets the definition of a "qualified historical property" as defined in Government Code section 50280.1 and is subject to a historical property contract executed pursuant to Government Code section 50280 and following. A qualified historical property includes qualified historical improvements and the land on which the improvements are situated, as specified in the historical property contract. If the contract does not specify the land to be included, the qualified historical property includes only a land area of reasonable size to situate the improvements.

The historical property contract must have a minimum term of ten years, and, as applicable, must contain certain other elements, including the following:
• A provision relating to the preservation of the qualified historical property and, when necessary, the restoration and rehabilitation of the property in conformance with state historic preservation guidelines;

SUMMARY
The key points contained in these guidelines can be summarized as follows:
1. An owner of qualified historical property may enter into a preservation contract with local government. When property is placed under such a contract, the owner agrees to restore the property if necessary, maintain its historic character, and use it in a manner compatible with its historic characteristics. Such property receives the special valuation treatment prescribed under Revenue and Taxation Code sections 439 through 439.4.

Mills Act Property Tax Abatement Program
Technical Assistance Bulletin #12
CALIFORNIA OFFICE OF HISTORIC PRESERVATION
Department of Parks & Recreation

Benefits to Owners
Owners of historic buildings may qualify for property tax relief if they pledge to rehabilitate and maintain the historical and architectural character of their properties for at least a ten-year period. The Mills Act program is especially beneficial for recent buyers of historic properties and for current owners of historic buildings who have made major improvements to their properties.

Executive Summary
Supplement to Documents Previously Provided By David D. Hutchings
For April 6, 2010 Carmel City Council Meeting Pertaining to the Mills Act

Disagreement with Proposed Exhibit A

My disagreement with Exhibit A centers around the language stated as the “Primary Purpose” for offering the Mills Act”. It is my belief that the current proposed language is not in compliance with the California Code, the California Guidelines, and the Ca. OHP Tech. Bulletin #12.

Staff recommends that Exhibit A should read:

“The primary purpose for offering Mills Act contracts in the City of Carmel-by-the-Sea is to assist in the rehabilitation and long term-maintenance of historic resources”.

It is my belief that Exhibit A to be in compliance should read:

“The primary purpose for offering Mills Act contracts in the City of Carmel-by-the- Sea is to assist in the rehabilitation and / or long term maintenance of historic resources”.

Point / Authorities and Brief Discussion for My Belief:

1. Ca. Code 50281(b) (1) clearly states “For the preservation of the qualified historic property and when necessary to restore and rehabilitate the property”. Mandating rehabilitation rewrites the “when necessary” provision of the law. The Code only mandates long-term preservation / maintenance, not rehabilitation.

2. Ca. Guidelines state “When property is placed under such a contract, the owner agrees to restore the property if necessary, maintain its historic character, and use it in a manner compatible with its historic characteristics”. Ca. Guidelines requires restoration only if necessary, but mandates maintenance of the historic character of the property.

3. The Ca. OHP Mills Act Property Tax Abatement Program Technical Assistance Bulletin #12 states “The Mills Act program is especially beneficial for recent buyers of historic properties and for current owners of historic buildings who have made major improvements to their properties”. The Ca. OHP Bulletin #12 does not say “who will make major improvements to their properties but rather says who have made major improvements to their properties.

4. The City of Monterey (the nearest major city) in their criteria clearly state that “The Mills Act Contract will serve to offset the costs of rehabilitation and/or maintaining the cultural resource”.

City’s Discretion to Determine Approved Mills Act Contracts Would Not Change

Because approval of the Mills Act by the City is discretionary, the City’s discretion to determine which properties are approved if my proposed language was implemented would not change. The City could still only approve Mills Act contracts for historic properties requiring just
rehabilitation but would not exclude for consideration historic properties already fully restored requiring long term-maintenance to preserve historic character.

ADDENDUM:
Mills Act Property Tax Abatement Program
Technical Assistance Bulletin #12
CALIFORNIA OFFICE OF HISTORIC PRESERVATION
Department of Parks & Recreation
1416 9th Street Room 1442-7
Sacramento, CA 95814
PO Box 942896
Sacramento, CA 94296
916-653-6624
calshpo@ohp.parks.ca.gov
www.ohp.parks.ca.gov

California’s four largest cities (Los Angeles, San Diego, San Francisco, and San Jose) as well as more than 75 other city and county governments have instituted Mills Act programs.

Mills Act Contact List

Mills Act Staff Contact
Shannon Lauchner
Mills Act/CLG Coordinator
State Historian II
916-653-5649
slauchner@parks.ca.gov

‘MINUTES’ for Five Noteworthy 6 April 2010 City Council Agenda Items

“MINUTES”
CITY COUNCIL MEETING
CITY OF CARMEL-BY-THE-SEA
Tuesday, April 6, 2010
City Hall
East side of Monte Verde Street between Ocean and Seventh Avenues

V. Announcements from Closed Session, from City Council Members and the City Administrator

C. Announcements from City Administrator

3. Receive update on San Antonio Walkway.

City Administrator Rich Guillen presented the update.

The San Antonio Walkway project will be constructed from the Pebble Beach/Carmel Gate to 4th Avenue, along the 4th Avenue pathway over the dunes and stairway to the Carmel Beach. The California Coastal Commission approved the coastal permit on March 11, 2010; the Commission required a boardwalk across the sand dunes despite the City's objections. The modified plans need to be updated by the Pebble Beach Company and once the revised plans are completed, the permit will be transmitted to City. It is anticipated that pathway construction between the Gate and 4th Avenue will be completed prior to the U.S. Open (completed by the end of May 2010).

Note: CENTRAL COAST DISTRICT
Application No. 3-10-003 (Pebble Beach Co., Monterey Co.) Application of Pebble Beach Co. to construct new pedestrian trail segment and improve existing trails to connect Del Monte Forest trail system to Carmel Beach as part of the California Coastal Trail (includes trail and new stairway improvements in the Forest, and decomposed granite walkway along North San Antonio Ave., new boardwalk, and new stairway access in City of Carmel) near the Carmel gate into the Del Monte Forest, Carmel, Monterey County. (KM-SC) [APPROVED WITH CONDITIONS]
(Source: California Coastal Commission, March 2010 Agenda)

VII. Consent Calendar
These matters include routine financial and administrative actions, which are usually approved by a single majority vote. Individual items may be removed from Consent by a member of the Council or the public for discussion and action.

G. Consideration of a Resolution expressing opposition to the Villas de Carmelo project proposed at 24945 Valley Way in the City’s Sphere of Influence.

H. Consideration of a Resolution authorizing repairs to the Forest Theater stage floor by KNA Construction in an amount not to exceed $12,400.

K. Consideration of a Resolution to lend two Mary DeNeale Morgan paintings to Hearst Art Gallery, Saint Mary’s College of California, from July 15 through September 30, 2010.

A Widewaters representative read a letter from Kevin Kane, the development manager of the Widewaters Group, requesting the City Council postpone any formal action on the proposed Villas de Carmelo project until after the revised Draft EIR is completed in April 2010.

Mayor McCloud opened the meeting to public comment.

Carmel-by-the-Sea resident Monte Miller expressed support for item G, namely a Resolution expressing opposition to the proposed Villas de Carmelo project. He asked if the Resolution will be forwarded to the Board of Supervisors and/or County Planning Commission. City Administrator Rich Guillen stated it would be sent to the Board of Supervisors.

Carmel resident Mark Bayne expressed support for item G and against postponing a vote on the Resolution because the fundamental nature of the project is unchanged and only minor administrative changes to the revised DEIR are expected.

Mayor McCloud closed the meeting to public comment.

Council Member TALMAGE moved to approve Consent Agenda Items A-K, seconded by Council Member HAZDOVAC and carried by the following roll call vote:

AYES: COUNCIL MEMBERS: HAZDOVAC; ROSE; SHARP; TALMAGE & McCLOUD
NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
ABSTAIN: COUNCIL MEMBERS: NONE

IX. Ordinances
B. Consideration of an Ordinance amending the Mills Act program found in the Historic Preservation Ordinance (First reading).

Planning and Building Services Manager Sean Conroy presented a powerpoint presentation of slides on The Mills Act, Flexibility (Act allows each city to customize program to suit local needs), State Requirements, City Ordinance (part of LCP) and HRB & Planning Commission Review. The Historic Resources Board (HRB) and Planning Commission were unanimous in that Mills Act Contracts “should be prioritized for properties with substantial rehabilitation need.” Mills Act Contracts are offered for qualified residential properties and only commercial properties with affordable housing.

To questions from Council Member Paula Hazdovac, Planning and Building Manager Sean Conroy stated that there are approximately 290 properties on the Carmel Historic Inventory, of which 40-50 are commercial properties, and 15 properties (all residential) are currently on the Carmel Register. The decrease in tax revenue to the City is estimated at $1,000-$3,000 per property per year. ($1,000 based on $800,000 assessed value)

Mayor McCloud opened the meeting to public comment.

Carmel-by-the-Sea resident Monte Miller recommended approval of the Ordinance.

Erik Dyar, HRB Chair and architect, expressed support for the Ordinance and the HBR’s unanimous support for the contract for properties with substantial rehabilitation needs.

Mayor McCloud closed the meeting to public comment.

Council Member Talmage expressed a need for a financial analysis of properties. He expressed a concern of a potential loss of revenue to the City of more than $1 million based on 20 year contracts and 75 properties with Mills Act Contracts. He expressed interest in a Mills Act Contract for commercial properties and possibly include hotels based on increased TOT revenues from remodeled hotels.

Council Member Rose also expressed support for a financial analysis, Mills Act Contracts for historic buildings and hotels and the development of a mechanism for selecting the mix of properties to be given Mills Act Contracts.

Erl Lagerholm, Erik Dyar and Mark Bayne addressed the Council.

Planning and Building Services Manager Sean Conroy stated that the City of Monterey has less than 10 Mills Act Contracts offered to both residential and commercial property owners. It is an “underutilized tool” in most communities offering Mills Act Contracts.

Council Member TALMAGE moved to continue an Ordinance amending the Mills Act program found in the Historic Preservation Ordinance for the purpose of receiving financial information and ramifications for a mix of residential, commercial and hotel properties with a report next month, seconded by Council Member ROSE, and carried by the following roll call:

AYES: COUNCIL MEMBERS: ROSE; SHARP; TALMAGE & McCLOUD
NOES: COUNCIL MEMBERS: HAZDOVAC
ABSENT: COUNCIL MEMBERS: NONE

PART IV (of IV): Reconsideration of a Mills Act Contract...and adoption of Findings?

Carmel-by-the-Sea City Council
SPECIAL CITY COUNCIL MEETING
Tuesday, December 19, 2006 at 4:30 p.m.

IV. Orders of Business

B. Reconsideration of a Mills Act Contract and a Maintenance and Management Plan and adoption of Findings for an existing historic residence located on the west side of Lincoln Street between 8th and 9th Avenues. The property owners are David & Debbie Hutchings. (De novo Hearing).

On Wednesday, 20 December 2006, a Carmelite emailed the following to Senior Planner Sean Conroy, the Planner who prepared the Staff Report for the Special City Council Meeting, 19 December 2006.

Subject: MILLS ACT CONTRACT AGENDA ITEM SUMMARY
Sean Conroy, Senior Planner:

RE: Reconsideration of a Mills Act Contract and a Maintenance and Management Plan and adoption of Findings for an existing historic residence located on the west side of Lincoln Street between 8th and 9th Avenues. The property owners are David & Debbie Hutchings. (De novo Hearing).

In your 19 December 2006 Agenda Item Summary, you wrote, “At the request of the applicant, the City Council reconsidered the application on 19 December 2006 and reached the same decision.” Given that the Agenda Item Summary was prepared prior to the 19 December 2006 City Council meeting, how is it that you articulated the outcome (“and reached the same decision”) when the public hearing had not yet occurred? And how is it that the item was to be a De Novo Hearing, a consideration “as if it had not been previously heard nor decided,” yet the Name states “Reconsideration…and adoption of Findings?”

On Thursday, Senior Planner Sean Conroy responded, as follows:

The City Attorney clarified this matter during the hearing. If you have any questions, please contact Don Freeman at 624-5339. Thank you and happy holidays!

Sean Conroy, Senior Planner City of Carmel-by-the-Sea Community Planning & Building
(831) 620-2010

COMMENTS:
Contrary to Senior Planner Sean Conroy’s assertion that the City Attorney clarified this matter during the hearing, City Attorney Don Freeman failed to address the questions raised in the email to Sean Conroy. Specifically, Conroy was asked about his Agenda Item Summary statement, “At the request of the applicant, the City Council reconsidered the application on 19 December 2006 and reached the same decision.” Note: This question is a planning question, not a legal question.

Thus, not only was the agenda item incorrectly written, the Agenda Item Summary contained the statement that the City Council “reached the same decision.” Despite City Attorney Don Freeman’s admonition to “disregard those Findings” in each City Council Member’s packets, the agenda item and the Agenda Item Summary signify prejudice against Mr. & Mrs. Hutchings. As a result, Mr. & Mrs. Hutchings did not receive a fair and impartial De Novo Hearing on their proposed Mills Act contract and Maintenance and Management Plan.

Note: On 8 August 2006, Senior Planner Sean Conroy prepared a Staff Report on Mr. & Mrs. Hutchings Mills Act Contract and Maintenance and Management Plan for their historic residence. The RECOMMENDED MOTION, as follows: “Approve the Mills Act Contract and adopt the Maintenance and Management Plan.”

PART III (of IV): Reconsideration of a Mills Act Contract...and adoption of Findings?

Carmel-by-the-Sea City Council
SPECIAL CITY COUNCIL MEETING
Tuesday, December 19, 2006 at 4:30 p.m.

IV. Orders of Business

B. Reconsideration of a Mills Act Contract and a Maintenance and Management Plan and adoption of Findings for an existing historic residence located on the west side of Lincoln Street between 8th and 9th Avenues. The property owners are David & Debbie Hutchings. (De novo Hearing).

Public Hearing
Kent Seavey: The Elizabeth F. Armstrong House is historically significant, designed by noted California architect C. J. Ryland. Peer reviewed and evaluated by 5 entities for historical significance, all concurred house qualifies as an historic resource.

Meeting Closed to Public Comment
City Councilman Michael Cunningham:
Cited Finding #3: Alternations to the historic resource have been in the past, and will continue to be in the future, limited to interior work and to exterior rehabilitation and alterations that: (F) Meet all zoning standards applicable to the location of the property.

Changes to property in 2002 were approved as an exception by the Planning Commission, different from the property conforms to a zoning ordinance.

Hutchings Representative: Existing non-conformities…excess height, encroachments that are essential to maintain the integrity of the resource…treat it as conforming. In 2002 “you conditioned this property to conform with your then current zoning…”

Sean Conroy, Senior Planner:
Clarification of non-conformity issue;
Definition: Non-conformities associated with the historic resource, part of the historic fabric of the property, are considered conforming, but new non-conformities are not considered conforming as historic conformities are.

Council Member CUNNINGHAM moved denial of a Mills Act contract based on the property’s failure to meet all zoning standards applicable to the location of the property, seconded by Council Member ROSE and carried by the following vote:

AYES: CUNNINGHAM, HAZDOVAC, ROSE & McCLOUD
NOES: NONE

COMMENTS:

Carmel-by-the-Sea Municipal Code
Chapter 17.32HISTORIC PRESERVATION
17.32.100 Benefits Available to Historic Resources on the Register.
The Board is authorized to develop and implement preservation incentive programs that are consistent with this chapter. The following preservation incentives are available to owners of resources listed in the Carmel Register:

B. Mills Act Historical Property Contracts.
1. Purpose. A Mills Act contract under State law is an agreement between the City of Carmel and a property owner of an historic building listed on the Carmel Register. The property owner benefits from a reduction in property taxes, and the City is assured that the historic building is rehabilitated, maintained and preserved. All Mills Act contracts shall be established, processed and approved in conformance with California law.

Since potentially all historic resources are nonconforming properties, the City Council cannot have it both ways; that is, City Council Members recognize that historic resources in Carmel-by-the-Sea are nonconforming with regard to the city’s zoning code, and therefore ineligible for Mills Act contracts, and yet include in the City’s Local Coastal Program the promotion and implementation of preservation incentive programs, such as the Mills Act Contract.

· Carmel-by-the-Sea Municipal Code
17.32.100 Benefits Available to Historic Resources on the Register.

B. Mills Act Historical Property Contracts.

D. Nonconformities. Existing structural nonconformities associated with a historic resource listed on the register (e.g., setback encroachments, excess height or insufficient parking, etc.) that are essential to maintaining the integrity of the resource shall be treated as conforming for the purposes of applying CMC 17.36.030 and 17.36.040, in the review of maintenance, repair, alterations and additions. Design nonconformities shall be expanded or created only when this is found necessary to achieve consistency with the Secretary’s Standards.

As Mr. & Mrs. Hutchings representative stated, prior to the Planning Commission approving the requested changes in 2002, the Commission Members found the property in conformity with R-1 zoning standards. Ergo, for purposes of a Mills Act contract, the property does meet Finding (F) Meet all zoning standards applicable to the location of the property.

Reference:
17.32.100 Benefits Available to Historic Resources on the Register.
The Board is authorized to develop and implement preservation incentive programs that are consistent with this chapter. The following preservation incentives are available to owners of resources listed in the Carmel Register:

B. Mills Act Historical Property Contracts.

6. Review Process.

c. To grant approval of a Mills Act contract, the Board and City Council shall make all of the following findings:
i. The building is designated as an historic resource by the City and is listed on the Carmel Register.
ii. The proposed maintenance plan is appropriate in scope and sufficient in detail to guide long-term maintenance.
iii. Alterations to the historic resource have been in the past, and will continue to be in the future, limited to interior work and to exterior rehabilitation and alterations that:
(A) Comply with the Secretary’s Standards, and do not affect the basic form and design of the original historic resource, and
(B) Do not affect any primary elevation, and
(C) Do not alter, damage or diminish any character-defining feature, and
(D) Do not increase floor area on the property by more than 15 percent beyond the amount established in the documented original or historic design of the resource, and
(E) Do not result in any second-story addition to a single-story historic resource, and
(F) Meet all zoning standards applicable to the location of the property.

PART II (of IV): Reconsideration of a Mills Act Contract...and adoption of Findings?

Carmel-by-the-Sea City Council
SPECIAL CITY COUNCIL MEETING
Tuesday, December 19, 2006 at 4:30 p.m.

IV. Orders of Business

B. Reconsideration of a Mills Act Contract and a Maintenance and Management Plan and adoption of Findings for an existing historic residence located on the west side of Lincoln Street between 8th and 9th Avenues. The property owners are David & Debbie Hutchings. (De novo Hearing).

In representing Mr. & Mrs. Hutchings, their representation presented a Power Point Presentation, as follows:

CURRENT LAW

MILLS ACT
(GOVERNMENT CODE 50281)

CARMEL LAND USE PLAN

CMC 17.32.100


Purposes of Mills Act
“The Mills Act program is especially beneficial for recent buyers of historic properties and for current owners who have made major improvements to their properties, Technical Assistance Bulletin #12.”

“The Mills Act program allows the property owner to utilize the tax savings per year to be used in future years for repair, maintenance and rehabilitation of historic properties.”
Dennis Webber, State of California Department of Parks

CMC 17.32.100
The following preservation incentives are available to owners of resources listed in the Carmel Register.
B. Mills Act Historic Property Contracts. All Mills Act contracts shall be established, processed and approved in conformance with California law.


EXISTING HISTORIC CONTEXT STATEMENT
Developed in 1997
Currently in effect
First Inventory, then Register


Historical Consultants
Hutchings’ property has been evaluated by at least 3 historic consultants:
Kent Seavey, April 9, 2002
“The Elizabeth F. Armstrong House is significant under California Register criteria 3, in the area of architecture as an excellent and unaltered example of the English Arts and Crafts style of architecture, articulated in a sophisticated, individualistic design by noted California architect C. J. Ryland.”

William Salmon, May 13, 2002
“THE ORIGINAL HOUSE HAS RETAINED A HIGH DEGREE OF PHYSICAL AND ARCHITECTURAL INTEGRITY TO THE ORIGINAL DESIGN AND CONSTRUCTION…”

Sheila McElroy, October 10, 2005.
“The Elizabeth Armstrong House is an intact example of an English Arts and Crafts style, as an example of residential architectural design (Ryland) and craftsmanship (Bain) and maintains a high level of integrity.”


Historic Elements of House
Original Carmel Stone Chimney, 1935.
Original Garage with wood doors,…
Casement Windows, original panes
Naturalistic Landscaping


Zoning Issues
Plans Approved
2002
In compliance with Current Zoning Code
Changes to an existing non-conformity, no change in historicity.


Exception to Zoning Code Standards
2002 Staff Report
Plate Height and Continuation of the three stories on lower level addition, existing non-conformities
Neither change visible from the front of the house

In conformance with R-1 Zoning Standards; a condition of approval in 2002 of Planning Commission.


CMC 17.32.100
D. Existing structural nonconformities associated with a historic resource listed on the register…excess height or insufficient parking, etc…shall be treated as conforming.


Financial Impacts
Cost to City: $2,000.00/year
(Figure derived from consultation with Monterey County Assessor’s Office)


Maintenance Plan
Created by City consultant
Designed in accord with Secretary of Interior Standards
Designed to be renewable, modifiable and flexible
Plan need to be updated, as Plan was prepared 2 years ago.


Updated Exhibit B
Updated Expenses
10/1/04 through 11/30/06
$231,000 now, $216,000 originally


Elements of the Maintenance Plan
Deferred maintenance premium
Correct stucco finish
Ongoing maintenance
Erosion and drainage control
Paint, stucco and caulk house garage
Repainting windows
Improvement of less than “E” items. (“E” means excellent)


Updated Maintenance Plan


Secretary of Interior Standards
Specific standards for:
Protect and Maintain
Repair
Replace
“Not a normal maintenance program.”


EFFECT ON CONTEXT STATEMENT
Only 8 historical properties on Register and as demonstrated not all will seek contracts.

City can rely upon extensive historical review of this property built in 1935.

No Effect. City reserves its right in non-renewal, no financial impact to City if include Fee for Contract language.

PART I (of IV): Reconsideration of a Mills Act Contract...and adoption of Findings?

Carmel-by-the-Sea City Council
SPECIAL CITY COUNCIL MEETING
Tuesday, December 19, 2006 at 4:30 p.m.

IV. Orders of Business

B. Reconsideration of a Mills Act Contract and a Maintenance and Management Plan and adoption of Findings for an existing historic residence located on the west side of Lincoln Street between 8th and 9th Avenues. The property owners are David & Debbie Hutchings. (De novo Hearing).

After Mayor Sue McCloud’s recitation of the item, excluding “adoption of Findings,” City Attorney Don Freeman remarked, as follows:

De Novo Hearing; “brand new hearing”

"Inadvertently, there are a set of Findings that were distributed in the packet, you should disregard those Findings, again this is a De Novo hearing, and regardless of what the decision is today, we will bring back findings at the January meeting for your approval…”

While City Attorney Don Freeman instructed the City Council to disregard the Findings For Decision in the City Council Members’ packets, Freeman failed to mention the inaccurate noticing of the agenda item; that is, the agenda item should have read “Reconsideration of a Mills Act Contract and a Maintenance and Management Plan,” not “Reconsideration…and adoption of Findings.” Note: Mayor Sue McCloud, Mayor Pro Tem Paula Hazdovac and City Administrator Rich Guillen are responsible for the agenda. Interestingly, all three were silent during the deliberations.

The Findings For Decision in the City Council Members packets included Findings 1 and 2, as follows:

FINDINGS FOR DECISION:
1. While the property is listed on the City’s Historic Register, the Council questioned the validity of the historic designation of the property.

2. The minimal maintenance needed for the residence, as identified in the Maintenance and Management Plan, did not meet the intent of the Mills Act. The maintenance items were typical of normal care of a residence. Since there was no serious damage and no need for extensive rehabilitation, the significant monetary value of the tax reduction was not needed or warranted.

At a previous City Council meeting, Finding 1 was solely expressed by City Council Member Paula Hazdovac, while Finding 2 was solely expressed by Mayor Sue McCloud. Needless to say, Mr. & Mrs. Hutchings’ representative thoroughly discredited both Findings 1 and 2.

Rebutting Finding 1, the representative cited the evaluations and conclusions of three architectural historians, Kent Seavey, William Salmon and Sheila McElroy. All three architectural historians concluded that the Elizabeth F. Armstrong House qualified as an historic resource. Additionally, Kent Seavey stated that 5 entities had evaluated the Hutchings residence, and all concluded that the Elizabeth F. Armstrong House was an historic resource.

Rebutting Finding 2, the representative stated the proposed Maintenance and Management Plan was “not a normal maintenance plan.” It is not a normal maintenance plan, comparable to maintenance typical of the normal care of a residence because all maintenance, including repairs and replacements, require that the owner adhere to Secretary of Interior Standards.

PART V: David & Debbie Hutchings' MILLS ACT CONTRACT

  
Carmel-by-the-Sea Mayor Sue McCloud
8 August 2006 City Council Meeting

Mayor McCLOUD seconded Councilman CUNNINGHAM'S motion to DENY the Hutchings' Mills Act Contract; subsequently, McCLOUD, CUNNINGHAM & HAZDOVAC voted to DENY the Hutching's Mills Act Contract, BETHEL & ROSE dissented.

UPDATE: On 9 August 2006, the day after the City Council denied the Hutchings' Mills Act Contract, David Hutchings filed an "appeal" to the City Council for a reconsideration of its 8 August 2006 decision to deny a Mills Act Contract after the City conducts a Mills Act Workshop.

Regular Meeting
Tuesday, August 8, 2006
4:30 p.m., Open Session

VIII. Public Hearings

A. Consideration of a Mills Act Contract and a Maintenance and Management Plan for an existing historic residence located on the west side of Lincoln Street between 8th & 9th Avenues. The property owners are David & Debbie Hutchings.

Council Member CUNNINGHAM moved to deny the Hutchings’ Mills Act Contract and Maintenance and Management Plan for their historic residence, the Elizabeth F. Armstrong House #2, seconded by Council Member McCLOUD and carried by the
following roll call:

AYES: CUNNINGHAM, HAZDOVAC & McCLOUD
NOES: BETHEL, ROSE
ABSENT: NONE
ABSTAIN: NONE


Meeting Date: 8 August 2006
Prepared by: Sean Conroy, Senior Planner
City Council
Agenda Item Summary

Name: Consideration of a Mills Act Contract and a Maintenance and Management Plan for an existing historic residence located on the west side of Lincoln bet. 8th & 9th, in the Single-Family Residential (R-1) District (Blk 94, Lot 13 APN: 010-193-005). The property owners are David & Debbie Hutchings.

Description: The applicant is requesting approval of a Mills Act Contract that would be forwarded to the County Assessor’s Office and would result in a potential reduction of property taxes if approved by the City. The contract
would be good for a minimum of 10 years.

City Funds: Approval of the Contract will result in a decrease in property taxes for subject property. The actual reduction will be calculated by the County Assessor’s Office.

Staff Recommendation: Postpone the approval the Mills Act Contract and the Maintenance and Management Plan as submitted.

Important Considerations: CMC 17.32.100 identifies benefits available to historic properties listed on the City’s Register of Historic Resources. The most significant of these benefits is the granting of a Mills Act Contract. Goal 1-5 of the Land Use Element of the General Plan encourages providing incentives for property owners to preserve and rehabilitate historic resources.

Decision Record: On 17 October 2005 the Historic Resources Board recommended approval of a Mills Act Contract for the subject property to the City Council.


CITY OF CARMEL-BY-THE-SEA
STAFF REPORT

TO: MAYOR McCLOUD AND COUNCIL MEMBERS

FROM: RICH GUILLEN, CITY ADMINISTRATOR

DATE: AUGUST 2, 2006

SUBJECT: PROPOSED HUTCHINGS MILLS ACT CONTRACT
The City Council Agenda Packet contains a staff report prepared by Senior Planner, Sean Conroy. This staff report is basically the same one presented to the City Council on December 6, 2006. You will note that the planning staff recommendation is to approve entering into a Mills Act contract with the David & Debbie Hutchings (property owners).
Recalling the City Council’s deliberations and after reviewing the staff report once again, from my perspective the following items remain unanswered as noted below:

• A City Council workshop needs to be scheduled to educate the public on how the
Mills Act will be applied in our community;

• Staff needs to present to the City Council (at a regularly scheduled meeting) Mills Act criteria that meets the minimum intent of the State Law and is in-line with City Council policy direction;

• The City Attorney needs to review and recommend to the City Council a model
agreement that can be applied to any property that meets the Mills Act criteria; and

• Finally, staff needs to analyze the financial impact to the City’s Property Tax
revenues so that the City Council fully understands the financial impact of Mills
Act property approvals.

Until the above items are addressed, I feel that it is premature to approve (or deny) the Hutchings request to enter into a Mills Act contract.


CITY OF CARMEL-BY-THE-SEA
STAFF REPORT

TO: MAYOR McCLOUD AND COUNCIL MEMBERS

THROUGH: RICH GUILLEN, CITY ADMINISTRATOR

FROM: SEAN CONROY, SENIOR PLANNER

DATE: 8 AUGUST 2006

SUBJECT: CONSIDERATION OF A MILLS ACT CONTRACT AND A
MAINTENANCE AND MANAGEMENT PLAN FOR AN EXISTING HISTORIC RESIDENCE LOCATED IN THE SINGLE-FAMILY RESIDENTIAL (R-1) DISTRICT

RECOMMENDED MOTION
Approve the Mills Act Contract and adopt the Maintenance and Management Plan.

BACKGROUND & PROJECT DESCRIPTION

The subject residence is an English Arts and Crafts style residence with both one and two story elements. The residence is located on the west side of Lincoln Street between 8th and 9th Avenues and was constructed in 1935 by noted local architect C.J. Ryland. The residence and detached garage qualify as historic resources under California Criterion 3 (architecture). A DPR 523 form was filed with the City on 9 April 2002.

On 12 June 2002 with recommendations from the Historic Preservation Committee, the Planning Commission approved a small addition and minor alterations to the historic resource. The additions increase the floor area on the site by approximately 11%.

On 17 October 2005 the Historic Resources Board placed the residence on the City’s Register of Historic Resources and recommended approval of a Mills Act Contract to the City Council. The City Council continued this item on 6 December 2006 until an informational workshop was held educating the public on the Mills Act.

EVALUATION

Mills Act Contracts: Goal 1-5 of the Land Use Element of the General Plan encourages providing incentives, such as tax relief, to promote preservation and rehabilitation of historic resources. CMC 17.32.100 identifies potential benefits to properties that are included on the City’s Register of Historic Resources. The most significant benefit is the granting of a Mills Act Contract. The Mills Act was enacted by the State of California in 1972 and grants participating local governments authority to enter into contracts with owners of qualified historic properties. Owners are expected to actively participate in the restoration and maintenance of their historic properties while receiving property tax relief.

As part of the City’s Local Coastal Program, Mills Act Contracts are now being offered to qualifying properties. The purpose of granting a contract is to aid in offsetting the costs of maintenance and rehabilitation or to offset the potential loss of income that might otherwise be achieved on the property.

Terms of the Contract: Mills Act Contracts will have a 10-year term with one year being added annually to the term unless one of the parties has taken action to terminate the contract. Once a contract is approved by the City it is forwarded to the County Recorder’s Office and to the County Assessor’s Office. The assessor calculates the actual tax savings based on the Income Approach to Value method (see attached).

Maintenance & Management Plan: Approval of a Mills Act Contract includes the adoption of a Maintenance and Management plan, which guides maintenance efforts throughout the life of the contract. This plan must be updated at least every 10 years. The City’s Preservation Consultant prepared a thorough evaluation of the property’s character-defining features and made maintenance recommendations. Her review is attached.

Based on these recommendations, the applicant has prepared a maintenance schedule identifying the proposed long-term maintenance and the potential cost associated with each activity. Because this structure has been maintained in such excellent condition, the Maintenance and Management Plan is relatively limited.

Required Findings: CMC 17.32.100.B requires that specific findings be made before a Mills Act Contract can be approved. The following is a list of the findings with a response from staff:

Finding #1: The building is designated as an historic resource by the City and is listed on the Carmel Register.

Response: The residence was placed on the City’s Register of Historic Resources on 17 October 2005 by the Historic Resources Board.

Finding #2: The proposed maintenance plan is appropriate in scope and sufficient in detail to guide long-term maintenance.

Response: The residence has been maintained in an excellent manner and has recently been renovated. The maintenance plan identifies maintenance that will be done on a year-to-year basis and also identifies on-going maintenance activities. The plan is sufficient to guide long-term maintenance and allows the City to re-evaluate the plan periodically.

Finding #3: Alterations to the historic resource have been in the past, and will continue to be in the future, limited to interior work and to exterior rehabilitation and alterations that:

(A) Comply with the Secretary’s Standards, and do not affect the basic form and design of the original historic resource, and

(B) Do not affect any primary elevation, and

(C) Do not alter, damage or diminish any character-defining feature, and

(D) Do not increase floor area on the property by more than 15 percent beyond the amount established in the documented original or historic design of the resource, and

(E) Do not result in any second-story addition to a single-story historic resource, and

(F) Meet all zoning standards applicable to the location of the property.

Response: An addition was approved on the rear to the historic residence in 2002 that increased the floor area on the site by approximately 11%. No addition or alteration has occurred that has affected the primary (east) elevation, with the exception of the in-kind replacement of the garage doors. The Historic Resources Board and the Planning Commission determined that the addition to the rear was consistent with the Secretary’s Standards. Any future proposal for alterations would be required to follow the City’s adopted procedures and be consistent with the Secretary’s Standards and the requirements of this contract.

As part of the addition and remodel in 2002, the Planning Commission granted two zoning exceptions, one for plate height (excess of 18’) and one for the number of stories. The Council should discuss if this violates required finding 3F, or if the finding can still be made since the exceptions were granted by the Planning Commission.

Finding #4: The Mills Act contract will aid in offsetting the costs of rehabilitating
and/or maintaining the historic resource and/or will offset potential losses of income that might otherwise be achieved on the property.

Response: The approval of this contract will assist in offsetting future costs of maintenance and will offset potential losses of income that might otherwise be achieved on the site had the residence not been identified as an historic resource.

Finding #5: Approval of the Mills Act contract will represent an equitable balance of public and private interests and will not result in substantial adverse financial impact on the City.

Response: Approval of the Mills Act Contract will be consistent with Goal 1-5 and Objective 1-16 of the Land Use Element of the General Plan which encourages providing incentives for property owners to preserve and rehabilitate historic resources. Although the adoption of all Mills Act Contracts will decrease the property taxes available to the City, this financial impact is minimal because:

1) only a limited number of properties can meet the requirements for a contract.

2) only a portion of the property tax from any single property will be lost and

3) the lost revenue to the City is offset by the value of preserving important historic resources. This contract represents an equitable balance of public and private interests.

RECOMMENDATION
Approve a Mills Act Contract.

PART IV: David & Debbie Hutchings' MILLS ACT CONTRACT

“De minimis:” Why the City Council Should Have Granted the Hutchings’ MILLS ACT CONTRACT

De minimis:
adj. (dee-minnie-miss) Latin for "of minimum importance" or "trifling." Essentially it refers to something or a difference that is so little, small, minuscule or tiny that the law does not refer to it and will not consider it. In a million dollar deal, a $10 mistake is de minimis.
(Source: http://www.thelawencyclopedia.com/term/de_minimis?gclid=CLSrwYjv54YCFTODCwodYBjGAg)


CITY OF CARMEL-BY-THE-SEA
STAFF REPORT

TO: MAYOR McCLOUD AND COUNCIL MEMBERS

THROUGH: RICH GUILLEN, CITY ADMINISTRATOR

FROM: SEAN CONROY, SENIOR PLANNER

DATE: 8 AUGUST 2006

SUBJECT: CONSIDERATION OF A MILLS ACT CONTRACT AND A
MAINTENANCE AND MANAGEMENT PLAN FOR AN EXISTING HISTORIC RESIDENCE LOCATED IN THE SINGLE-FAMILY RESIDENTIAL (R-1) DISTRICT

RECOMMENDED MOTION
Approve the Mills Act Contract and adopt the Maintenance and Management Plan.


Required Findings: CMC 17.32.100.B requires that specific findings be made before a Mills Act Contract can be approved. The following is a list of the findings with a response from staff:

(F) Meet all zoning standards applicable to the location of the property.

Response: An addition was approved on the rear to the historic residence in 2002 that increased the floor area on the site by approximately 11%. No addition or alteration has occurred that has affected the primary (east) elevation, with the exception of the in-kind replacement of the garage doors. The Historic Resources Board and the Planning Commission determined that the addition to the rear was consistent with the Secretary’s Standards. Any future proposal for alterations would be required to follow the City’s adopted procedures and be consistent with the Secretary’s Standards and the requirements of this contract.
As part of the addition and remodel in 2002, the Planning Commission granted two zoning exceptions, one for plate height (excess of 18’) and one for the number of stories

The Council should discuss if this violates required finding 3F, or if the finding can still be made since the exceptions were granted by the Planning Commission.




ISSUE: Whether the zoning exception, granted by the Planning Commission, for an increase in second story by 12” (according to Associate Planner Sean Conroy at the meeting) meets the requirements of 3 (F) Meet all zoning standards applicable to the location of the property.

Thus, at the 8 August 2006 City of Carmel-by-the-Sea Council meeting, the following verbal exchange occurred between Council Member Bethel and City Attorney Freeman regarding the Hutchings’ Mills Act Contract application:

City Councilman BETHEL: “My understanding of the word de minimis basically means that if this is ruled so insignificant, the 12” plate height, then my recollection of what the word means...is it would meet all the zoning standards applicable."

City Attorney FREEMAN: De minimis means...to give you an example. If you have a 10’ setback and if the setback is only 9’11”, it’s over by 1”, while it’s not technically 10’, the reality of it is it’s de minimis in nature, it doesn’t really affect anything and thus it’s not precedent setting. If somebody else actually came in with a 1” difference, we would grant that as well because it doesn’t really mean anything. So what you have to determine is this 12” plate height is that de minimis in nature. So that if somebody else came in with a similar problem, which could happen but may never happen, would you consider that de minimis too? And if the answer to that is yes, you would consider that de minimis and it would comply with all the rules as written.

Amazingly, after this exchange, Council Member CUNNINGHAM moved to deny the Hutchings’ Mills Act Contract for the property’s failure to meet criterion 3 (F), seconded by Mayor McCLOUD, and carried by the following roll call:

AYES: CUNNINGHAM, HAZDOVAC & McCLOUD
NOES: BETHEL, ROSE
ABSENT: NONE
ABSTAIN: NONE

After the vote, Council Member Cunningham had the chutzpah to shout out into the audience in the direction of David Hutchings, “Reapply David! Reapply! Reapply! Reapply!”

PART III: David & Debbie Hutchings' MILLS ACT CONTRACT

City Administrator & Council Members Comments on the HUTCHINGS’ Mills Act Contract Agenda Item: 8 August 2006 City Council Meeting


Verbal Exchange between City Administrator GUILLEN and Mills Act Contract Applicant DAVID HUTCHINGS:

City Administrator GUILLEN: “…I did place a cover memo on top of this particular report and there’s basically 4 bullets that I have listed that I think the Council needs to consider as part of their action tonight. We had talked about a workshop, I think the Council still needs to schedule that and maybe have more in-depth discussion at the Council level so that you are more familiar with the Act as well as the public…”

Mills Act Contract Applicant DAVID HUTCHINGS: “...You say here workshop for the benefit of the public. Actually at the City Council meeting, when you review the tapes, and again we talked about this…the workshop was for the City Council, period. That’s how it was presented."

City Administrator Rich Guillen: “Yeah. That’s fine. I don’t disagree.”


But later, City Administrator Rich Guillen: “...educate the public, but from my standpoint it was really more education of the public, than it was the council, because I think you generally understand the criteria, but I don’t know if the public really knows the criteria means...”

REBUTTAL: So, Guillen, which one of your stories reflects reality? At the December City Council meeting, you stated the Mills Act Workshop would be for the benefit of the City Council. Early on during the 8 August 2006 City Council meeting, you stated that the Workshop would be for the Council and the public. Then later on during the meeting, you stated that the Workshop was exclusively for the public because you believed the Council “generally understand the criteria.” For the benefit of the City Council OR the Council and the public OR the public? So many versions, so much incoherence, so much doublespeak!


City Administrator Rich Guillen: “Let me comment on that. Because the staff’s understanding and maybe I need to take the responsibility more than anybody else at this dais. But the staff’s understanding at that time is that you do not want to have that Mills Act Workshop until you really understood what the revised or amended Historic Context Statement said cause you had talked about having the best of the best houses considered historic. And we cannot do that until we revise the Historic Context Statement. We went to the prior person who drafted the Historic Context Statement and that person was not available. I’m getting off line here. But it’s not like we haven’t tried. I mean, literally, it’s not like we haven’t tried. And then secondly, you know, while I was trying to give the Council an out here in my cover memo. Just continue it. Because we still really have at least 3 more months, maybe 4 more months before this Act applies again. And within that timeframe I think you can accomplish these points that I listed in my memo.”

RETORT: “And we cannot do that until we revise the Historic Context Statement.” WHERE HAVE YOU BEEN! The City’s Inventory of Historic Resources, as originally submitted in 2004 to the California Coastal Commission, was supposed to represent the “best of the best” already. Apparently, none of the Council Members, nor the City Administrator, bothered to read and comprehend the contents of the Local Coastal Program with regard to historic resources prior to the City’s submission of the LCP to the California Coastal Commission. Gross incompetence doesn’t even begin to explain this mockery of city government!


City Administrator GUILLEN: “Finally, the most important one, we don’t really, totally, completely know what the financial impact will be to our property tax revenues, which is our second highest revenue source in this city. And even though there might only be one house put in the Mills Act, that obviously would not have any major implication. But we have 3 historic resources, 300 historic resources, or a little less than that and out of those even if a third were placed into the Mills Act requirements, I think we could have some substantial financial impacts to our revenue sources.”

RETORT: The Mills Act is an integral part of the Historic Preservation element of the City’s Local Coastal Program; as such, all of the ramifications, including the number of historic resources on the City’s Inventory of Historic Resources and the financial calculations and implications, should have been considered prior to the original submittal to the California Coastal Commission.

Moreover, as David Hutchings articulated on the financial impacts, “the differences between fair market value versus rental value and capitalizes it. And the range is somewhere between 40-60% tax savings to the individual applicant to help him use that funds to help with the maintenance program of his house.”


City Administrator GUILLEN: “…the crystal ball’s kind of foggy and it was really foggy in December and it’s a little clearer now, but it’s still foggy, and I think 3 more months it would be a little less foggy, if we do have the workshop and do some other things and it would make your decision a lot easier…”

RETORT: The only valid foggy “crystal ball” analogy is to Rich Guillen’s mental processes. As the city’s Administrator, Guillen should have initiated, scheduled and conducted a Mills Act Workshop soon after December 2005. Instead, his lack of initiative and incompetence has created this foggy crystal ball fiasco and denied the Hutchings a timely Mills Act Contract decision. (Note: The Hutchings’ applied for the Mills Act Contract in June 2005.)



City Councilman ROSE: “...I don’t see how the applicant is prejudiced if we postpone the decision until after our workshop. What I want to assure is that all property owners who are situated similarly to the applicant are treated equally and fairly…but I don’t think he should either get an advantage or a disadvantage because of it. As long as we hear his application by the end of the year…I think it’s better public policy to take a step back and make sure we have our ducks in order before we sign a contract.”


Verbal Exchange between ROSE and Mills Act Contract Applicant HUTCHINGS:

City Councilman ROSE: “We need to hold one.” (a workshop)

DAVID HUTCHINGS: “What assurances do I have from the City Council that it will be done this time. The last time I was here in December that this was continued…and the City Council at that time would not give a date certain…What assurance do I have?”

“There are things that I would be prejudiced by, as you know property taxes. The assessment to be done by January 1, with the county. However, there are tax planning issues involved individually. Now, I’ve waiting since June 2005…It cost me because of the result of the continuance, $25,000. If this goes past January 1, it’s going to cost me an another $25,000, $50,000. So I think I have been prejudiced by this.”


Later on during the hearing, City Councilman ROSE: “...You don’t make people wait a year for something like this. It’s our fault, not his fault, that we didn’t have a workshop. It’s our fault, not his, that we haven’t given him an answer. It’s our fault, not his, that we haven’t come up with standards.”

RETORT: While Rose voted to grant the Hutchings’ Mills Act Contract, to his credit, his contradictory comments regarding whether to hold a Mills Act Workshop prior to a vote on Hutchings’ Mills Act Contract or go ahead and vote on the Hutchings’ Contract prior to a Mills Act Workshop indicated a confused and disconnected stance on the matter.



Carmelite MONTE MILLER: “I agree totally with the applicant and I think it’s absolutely ridiculous that after, this was in December of last year. Monterey’s had this Act for years. And it would have been very simple for Carmel to go over and find out from Monterey how they are administering it. And it’s a very simple economic analysis to know whatever the percentage reduction is, you were pushing the benefits of historical for the last couple of years. You hired Kent Seavy to tell which ones were historical. So I think you have the responsibility to allow these people to get the benefits of a historical house. And this business of, last December you should have had a workshop scheduled of whoever doesn’t know enough about this Act, to do an economic analysis on the impacts. But I think this guy’s been treated really badly. And I think it behooves you to make justice to him be approving his application today.”

COMMENT: ABSOLUTELY! Monte Miller was the only member of the public to speak in support of granting the Hutchings’ Mills Act Contract. If any one of the five City Council Members was treated as Mr. Hutchings’ has been treated by the City Council and City Administrator, does anyone really think he/she would not be OUTRAGED by such treatment?



City Councilwoman HAZDOVAC: “We were given 300 structures that were designated historic. I don’t really take that as my responsibility and my fault. And the problem with this application is I don’t see this as an historic structure. So I would be voting no if you made a motion to go ahead and grant this Mills Act application. I don’t see this house as historic...”

RETORT: The day the California Coastal Commission certified the City’s Local Coastal Program submittal is the day YOU became RESPONSIBLE for its contents. Therefore, YOU and your colleagues are ALL AT FAULT! Moreover, once a property is placed on the City’s Inventory of Historic Resources, it is considered “historic,” until and unless substantive evidence is presented to contradict that designation. No such information was been presented to the City Council. Therefore, YOU are acting in an IRRESPONSIBLE manner; you are supposed to apply the historic element of the Local Coastal Program on a case-by-case basis, not base your decision on YOUR UNSUBSTANTIATED PERSONAL OPINION!!!



Mayor MCCLOUD: On the application today...”are the normal maintenance of sanding, painting, scraping, gutter cleaning, cleaning windows. I just don’t think that’s what the Mills Act was talking about. And I have a real problem with granting such a big tax break for things that are landscaping, adding soil, so forth.”

RETORT: While McCloud is rewriting the Mills Act, perhaps she can time travel to the 18th century and rewrite the Constitution of the United States of America. Only delusional arrogance would allow an individual to erroneously interpret the Mills Act, disregard the Historic Resources Board’s 17 October 2005 unanimous decision to recommend to the City Council a Mills Act Contract for the Hutchings’ Elizabeth F. Armstrong House # 2, dismiss the Planning Staff’s recommendation and substitute her own erroneous, irrelevant and extraneous opinion.

Suggested Reading:

U.S. Department of Interior, National Park Service. The Secretary of the Interior’s Standards for the Treatment of Historic Properties. Washington, D.C.: U.S Government Printing Office, 1995.

Mills Act Property Tax Abatement Program
Technical Assistance Bulletin #12
CALIFORNIA OFFICE OF HISTORIC PRESERVATION
Department of Parks & Recreation