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RPVCCA_CC_SR_2012_09_04_I_Budget_Appropriation_Open_Space_AcquisitionCITY OF MEMORANDUM RANCHO PALOS VERDES TO: DATE: FROM: HONORABLE MAYOR &CITY COUNCIL MEMBERS JOEL ROJAS,COMMUNI~~PMENT DIRECTOR SEPTEMBER 4,2012 .-~-[7---- SUBJECT:BUDGET APPROPRIATION IN CONJUNCTION WITH THE PROPOSED ACQUISITION OF OPEN SPACE REVIEWED:CAROLYN LEHR,CITY MANAGER ~ RECOMMENDATION 1)Direct Staff to continue to work,in conjunction with the Palos Verdes Peninsula Land Conservancy (PVPLC),with the U.S.Fish and Wildlife Service and State Wildlife Conservation Board on the possible acquisition of open space in Malaga Canyon and Windport Canyon for preservation purposes;and 2)Adopt Resolution No.2012-_ approving a budget appropriation to add $38,000 to the Community Development Department's budget to fund certain due diligence tasks in association with the proposed acquisition. BACKGROUND In August 2004,the City Council adopted the Rancho Palos Verdes Natural Communities Conservation Plan (NCCP)which proposed the establishment of a habitat preserve by the City in exchange for allowing 50 years worth of City projects (and certain private projects)to impact protected habitat on an as needed basis.Since that time,through the dedication of 'existing City and PVPLC owned open space properties along with major open space land acquisitions in 2005 and 2009,the creation of a 1400- acre NCCP Preserve was completed.'With completion of the NCCP Preserve,focus shifted back to updating and completing the final NCCP.The updated draft NCCP is currently undergoing its final review by the California Department of Fish and Game (CDFG)and the U.S.Fish and Wildlife Service (USFWS).Staff anticipates completion of the Final NCCP sometime in late 2012 or early 2013. Last year,the USFWS notified the City and PVPLC about the availability of unspent federal (section 6)grant monies for the acquisition of open space that were eligible to be spent on the Palos Verdes Peninsula because of the City's NCCP.The USFWS noted their desire to use said funds before they expire to preserve additional habitat on the Palos Verdes Peninsula to augment the completed NCCP Preserve. Thus,working I-1 with the USFWS and the State Wildlife Conservation Board (WCB),City and PVPLC staff identified a number of privately owned open space properties in the City that contain protected habitat for possible acquisition.After following up with the owners of all the identified properties,two willing sellers have emerged. As a result,the USFWS and WCB intend to pursue the allocation of a $1.5 million federal grant for the purchase of open space from these two willing sellers at a fair market value established by a State approved appraisal.No City or PVPLC funds are needed to pay for said acquisition.If the City is going to retain ownership of these properties,Staff and the City Attorney recommend that certain due diligence tasks should be performed in advance of the potential acquisition and that there will be a need to use certain professional consultants already under contract with the City to assist with the preparation of future purchase agreement documents.Therefore,Staff is seeking a budget adjustment at this time to cover the cost of these anticipated consultant costs. DISCUSSION Provided below is a brief description of the two open space acquisitions that are being pursued along with the anticipated consultant costs associated with each. Malaga Canyon Malaga Canyon consists of undeveloped open space in the northern part:of the·City within the Grandview neighborhood.The canyon runs primarily in a North-South 'direction,crossing under Montemalaga Drive and flowing into the City of Palos Verdes Estates.An entity known as Angeles,LLC owns approximately 48 acres of the canyon. consisting of five separate tax parcels that are grouped if)to three non-contiguous areas (see attached aerial).The 48 acres owned by Angeles LLC consists of approximately 35 acres of land zoned Open Space Hazard with approximately 13 acres of Residential zoning (RS-a-5). Angeles LLC has expressed its desire to sell 41 acres of its holdings to the City, excluding an approximate 7-acre area that fronts on Montemalaga Drive (see attached Exhibit Map).In addition to providing protection to existing habitat,acquisition of this open space would provide access to a drainage facility at the top of a small tributary of the canyon near the terminus of Grayslake Drive that may require future maintenance by the City as well as facilitate the implementation of the Grayslake Trail and Cityview Segment of the Malaga Canyon Trail identified in the City's Conceptual Trails Plan. The following funding amounts are needed to cover the cost of some necessary tasks associated with this potential acquisition (some of which have already been performed): Phase 1 Environmental Study Geological Assessment Surveying/Exhibit Preparation Appraisal Addendum Total $5,000 $1,000 $10,000 $6,000 $22,000 I-2 An appraisal of the total 48 acres owned by Angeles LLC was previously prepared at the State's cost.However,because the seller desires to exclude 7 acres from the sale, an appraisal addendum must be prepared which the State will not fund.Therefore,the cost of the $6,000 appraisal addendum will be funded by the City.However,the seller has noted that he would be willing to pay for half of the appraisal addendum cost.Thus, with approval of the requested budget adjustment,a State selected Appraiser will be tasked with completing an appraisal of the 41 acres of open space which Angeles LLC is willing to sell and a geological assessment of the property will be performed by the City's Geologist.Once the appraisal is complete,and the terms of the sale are agreeable to the seller and the City Council,a purchase agreement will be drafted by the City Attorney for the City Council's subsequent review and approval.The approved purchase agreement and appraisal will then be submitted to the State for its approval.If approved,escrow will be opened and the transaction will close when the federal funds are disbursed into escrow by the State. Wind port Canyon Windport Canyon consists of undeveloped open space in the western part of the City near Hesse Park.The canyon runs primarily in an East-West direction from Hawthorne Blvd.to where it connects to Agua Amarga canyon between the residences along Locklenna Drive and the Seagate Villas condominiums.Windport Canyon is divided into two separate ownerships with the southern side of the canyon area (approximately 5 acres)owned by the City of Rancho Palos Verdes (acquired through a tax default sale in 2010)and the northern side of the canyon ,area (approximately 8 acres)owned by Friends of Chabad Lubavitch (see attached aerial).Approximately 2/3 of the 8 acres owned by Friends of Chabad Lubavitch is zoned Open Space Hazard with the. remainder zoned Residential (RS-a-5). A representative of the Friends of Chabad Lubavitch has expressed the desire to sell their entire 8-acre portion of the canyon.In addition to providing protection to existing habitat,acquisition of this open space would provide access to the canyon if any future drainage improvements are needed,as well as facilitate the possible implementation of the Agua Amarga Canyon Trail identified in the City's Conceptual Trails Plan. The following funding amounts are needed to cover the cost of some necessary tasks associated with this potential acquisition (none of which have already been performed): Phase 1 Environmental Study Geological Assessment Surveying/Exhibit Preparation Total $5,000 $1,000 $10,000 $16,000 At this time,Staff is working with the State WCB to have this property appraised by WCB's appraiser.Once the appraisal is complete,and the sale price is agreeable to the seller,Staff will authorize that a Phase 1 Environmental Study and Geological Assessment of the property be performed.Once the terms of the acquisition are satisfactory to the seller and the City Council,a purchase agreement will be drafted by I-3 the City Attorney for the City Council's review and approval.The approved purchase agreement will then be submitted to the State for its approval.If approved,escrow will be opened and the transaction will close when the federal funds are disbursed to the City by the State. FISCAL IMPACT If there is a successful acquisition of the properties described above,the full cost of the acquisition will be funded by a $1.5 million federal grant.However,Staff intends to contribute its remaining $5,000 balance of Measure A funds received from the County for the 2005 and 2009 open space acquisitions towards the potential acquisition.Using said funds towards the acquisitions will allow the City to use its annual allocation of Measure A maintenance funds received from the County towards any maintenance costs should the City become owner of said properties. Future maintenance costs of owning the properties would primarily involve costs of· performing annual brush clearance on the properties which is estimated at $5,000 per year for the Malaga Canyon property and $3,000 per year for the Windport Canyon property.This estimate is derived from conversations with both of the willing sellers and a comparison of current Public Works costs for.performing brush clearance on open space properties of comparable size. With regards to the immediate consultant costs,the Community Development Department's budget in the General Fund contains an NCCP program.However,said program does not contain any budgeted amount for professional/technical services related to potential acquisitions.Thus,Staff is recommending that the City Council approve a budget adjustment to appropriate $38,000 into the Community Development Department's NCCP ProfessionallTechnical Service budget (101-4005-441 :..32-00).If .the City Council adopts the attached resolution approving said budget adjustment,the revised estimated.General Fund Reserve at June 30,2012 will be $10,697,379 (see attached FY12-13 Statement of Estimated General Fund Reserves). ATTACHMENTS •Resolution No.2012- •Aerial of Potential Malaga Canyon Acquisition •Exhibit Map showing area excluded from Acquisition •Aerial of Potential Wind port Canyon Acquisition •Statement of Estimated General Fund Reserves I-4 RESOLUTION NO.2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES,AMENDING RESOLUTION 2012-43 THE BUDGET APPROPRIATION FOR FY12-13,TO FUND CERTAIN PROFESSIONAL SERVICES ASSOCIATED WITH THE PROPOSED ACQUISTION OF OPEN SPACE. WHEREAS,Section 3.32 of the Rancho Palos Verdes Municipal Code provides that all expenditures in excess of budgeted allocations must be by supplemental appropriation of the City Council; WHEREAS,on June 19,2012,the City Council of the City of Rancho Palos Verdes adopted Resolution 2012-43,approving a spending plan and authorizing a budget appropriation for FY12-13;. WHEREAS,a budget increase in the General Fund is necessary to fund professional services needed to perform certain due diligence tasks associated with the potential acquisition of open space for conservation purposes using federal grant monies. BE IT,THEREFORE,RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES:. Section One.The following increase is made to the General Fund FY12-13 budget: Community Development #101-4005-441 c32-00 $38,000 PASSED,ApPROVED,AND ADOPTED THE 4th DAY OF SEPTEMBER 2012. Mayor Attest: City Clerk State of California ) County of Los Angeles )ss City of Rancho Palos Verdes ) I,Carla Morreale,City Clerk of the City of Rancho Palos Verdes,hereby certify that the above Resolution No.2012-_was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on September 4,2012. City Clerk I-5 LegendoPotential Acquisition r----~l.J ParcelsoCityBoundary N A- i Feet 0 300 600 I-6 o EXHIBIT MAP of a Parcel Line Adjustment For City of Rancho Palos Verdes APN 7578-002-009,7578-003-001 Los Angeles County California Prepared 08/11/2012 by Michael McGee,PLS3945 McGee Surveying Consulting 15'Access Easement - to Parcel One 300'------- Traverse PC I-7 ArclMS HTML Viewer Ma '"7/1'"7'''''''11''\ I-8 FY12-13 Statement of Estimated General Fund Reserves Attachment A I I Beginning I ,' I Ending ;Action Date Reserves Revenues I Expenditures I Net Transfers I Reserves Budget Adoption (estimate)6/19/2012 10,686,839 24,089,934 (19,195,620\(4,845,774 10,735,379 -~-.._--~-------------------------~-----_.------~- Adjustmenls:-----..-.------------_._--~---.--- ------------------. OpenSpace Acquisition ~()~ts-- " 9/4/2012 (38,009l-------------~~-~~-_.---_._------------- ----------------------------- ---_.- : ------_.---:----------------- ---------------------_.-- ---- -----------.--- -------".-------------------------, ------------- --------------- -----.~---- , ------------------------------------- -------------~------------------ I 10;686,83-9'-24,089,934 1-10,69i;379'Revised Estimates (19,233,620'(4,845,774)' Variance to Original Budget I -i -(38,000):-I (38,000, :i I i I I Excess Budgeted Revenue Over/(Under)-Budgeted Expenditures &Net Transfers 10,540 I I I I I I Reserve Policy Level.(50%of BUdgetea General Fund Expenditures)9,616,810 Reserves Above/(Below)Policv T!;lreshold <'111%1,080,569 __·______~_____J____I I 1___--I IColumnHeadingDefinitionsI------.l ___I ------Action Date is the date City Council adopted the budget or approved an adjustment to the budget ___--Beginning Reserves are the budgeted 7/1/12 General fund reserves at the time of budget adoption.------ Revenues include the originally adopted revenue budget and subsequent adjustments.When staff becomes aware that revenues are expectedto- significantly deviate from the adopted budget,an adjustment is presented to the City Council for approv~!. Expenditures include the originally adopted expenditure budget and subsequent adjustments.When staff becomes aware that expenditures of a program _~~~~~cted to si~ificantly deviate from the adopted ~~dget-,-an ad'ustmen~presented ~~.9ity 9!?~,:,cJ!J9~_al?prov§!,-__ Net Transfers include both operating transfers from and to the General fund_Originally budgeted Net Transfers are adjusted when staff becomes aware that an additional ~a!i~g transfer is needed to satisfy an unanticipated shortfall within another fund;and that shortfall must be funded with General fund moni~~,- Ending Reserves are the estimated 6/30/13 General fund reserves at the time of budget adoption_Adjusted Ending Reserves is a calculation based on subsequent adiustments to BeQinninQ Reserves,Revenues,Expenditures and Net Transfers. I-9