1995-08-30ENCINITAS G.H.A.D.
Geologic Hazard Abatement District No. 1
SPECIAL MEETING MINUTES
WEDNESDAY, August 30, 1995 -7:00 P.M.
Encinitas City Hall
505 South Vulcan Avenue
CITY COUNCIL CHAMBERS
Chairman Oakley called the meeting to order at 7:01 p.m.
BOARD MEMBERS PRESENT
Lou Favero, Robert Frickman, David Oakley, Don Pierce, Gwenn Truax
ALSO PRESENT
GHAD Attorneys Harold Coleman and Robert Gaglione, Mayor Chuck
DuVivier, Asst. City Manager Jim Benson, Risk Manager Jace Schwarm,
Sr. Civil Engineer Hans Jensen, Sr. Vice President Berryman &
Henigar, Jeff Cooper Assessment Engineer, Recording Secretary Jo
Ann Pine.
ORAL COMMUNICATIONS None
Chairman Oakley stated that the Board would address all four items
listed in the August 23rd letter to property owners prior to taking
speakers from the audience. He described the method for handling
speakers and forms to be completed and delivered to the Recording
Secretary.
Chairman Oakley gave a brief history of the GHAD - how it came
about and activities to date. Chairman Oakley read from the
California Public Resources Code, Division 17, Geologic Hazard
Abatement District, Definition 26507 "Geologic Hazard ". "Geologic
hazard" means an actual or threatened landslide, land subsidence,
soil erosion, earthquake, or any other natural or unnatural
movement of land or earth.
In December 1991 there was an initial bluff failure in the 600
Block of Neptune Avenue. There were additional Neptune Avenue
bluff failures in January, February and May of 1992 and another in
February of 1993. In October 1992 Earth Systems recommended rip -
rap as a five year solution. That suggestion was rejected by Save
Our Steps (SOS) and City Council.
One group of property owners began filing applications with the
California Coastal Commission in May of 1992, for permits to build
seawalls. That group waited 20 months, finally receiving the OK in
November 1993. A second group had started earlier in February of
1992, finally getting their OK in April of 1994. There was a two
year lapse in time with construction and permit problems.
The original twelve property owners in the GHAD could not protect
their homes and properties without joining a GHAD. These property
owners petitioned the City of Encinitas to create a GHAD. The City
approved creation of the GHAD and elected the five board members.
It is the Board's hope that they can work with the City on a Local
Coastal Plan to develop bluff regulations that are the most
favorable to the City and property owners. The City has just hired
a consultant to go into the issue of bluff regulations.
The California Coastal Commission would not issue lower wall
building permits until the City created a GHAD. The City created
the GHAD in November 1994 and elected the current Board of
Directors with the proviso that the City cannot issue seawall
permits until a Local Coastal Plan is adopted and approved by the
California Coastal Commission. There are 12 base lower seawalls
being constructed at this time. The City can only issue emergency
permits with proof of an eminent failure. The City's proposed
Local Coastal Plan should be completed and approved between
December 1995 and March 1996. Delays have been caused by the
California Coastal Commission.
GHAD is the vehicle to help get the process through quicker and
cheaper when the need occurs. Getting some local control helps.
Only those five property owners, or those who needed upper walls
were granted emergency permits. This all started back in December
1991 and continues to date. (See Exhibit A & B attached)
AGENDA
1. Presentation of Information regarding the Direction and Costs
of the Encinitas GRAD.
a. Costs of GHAD Administration and Possible Costs to GHAD
Members for Construction and Maintenance of Seawalls.
GHAD Treasurer Pierce
screening of the August
GHAD Insurance Options.
opened the informational portion with the
30, 1995 GHAD Financial Status Report and
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Director Pierce stated that with the creation of the GRAD, there
was a need for money to function. Money was needed for attorneys,
mailings, public notices, etc. The GHAD Board went to the City
with a request for a loan of $23, 867.00 for operating costs for
the year 1995. Now in August, 8 months down the road, we see some
shortfall in cost projections and we need to go to the City again
and request an approximately $9259.00 for additional insurance
coverage and on -going attorney fees.
Director Pierce went on to say that an assessment district needs to
be established for the overall function of the GHAD and to
determine if a assessment district will work, a feasibility study
must be done. The cost of a feasibility study, proposed by
Berryman and Henigar, will be $14,700.00, and if begun now, would
be completed early in 1996.
At their August Board Meeting, the GHAD Board of Directors voted to
purchase General Liability and Errors and Omissions Insurance to
carry them for the time being, however, Board Members feel strongly
that the amount purchased for liability is insufficient and asked
the broker to give us a quote on an additional 1 million dollars
and 5 million dollars liability. All figures quoted are good for
one year.
Director Pierce stated that the projected total operating funds
needed to complete the 1995 year is $64,397.00 He suggested that
these figures will increase in the future with the exception of the
$14,700.00 for the feasibility study which is a one time expense.
Director Pierce stated that presently the GHAD has 31 bonified
members. If the membership were assessed today, the individual
cost per member would be $2,077.00.
In the long range planning, if the feasibility study shows that the
GHAD should move forward with the formation of an assessment
district, the estimated cost to form the district would be
approximately $15,000.00 plus legal fees that are unknown at this
time. There might also be additional funds needed to float bonds.
In addition, the walls being built now and future walls will
require maintenance. That maintenance cost falls to the GHAD and
depending on the extent of the maintenance, could cost each
homeowner approximately $300.00 per home, per wall, per year - and
these figures may be low. Director Pierce also included a
projected cost for office space and equipment of $4800.00. The
Asst. City Manager stated that at this point the City does not
anticipate having to take our office or equipment privileges.
There is room for us for some time to come.
Director Pierce went on to point out that one more fund must be
established for the $5000.00 deductible annually for our insurance.
He stated that costs (Insurance) can be affected by which Option we
choose. We have Option 1 in place at this time at a cost of
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$1543.00. Option 2, addition of an additional 1 million dollars to
the Liability coverage would cost $193.00. To consider Option 3,
taking 5 million dollars liability, the cost jumps to $2,077.00.
Director Pierce closed by pointing out that the assessment per
homeowner decreases with each new membership the GHAD acquires and
of course, we're always looking for new voluntary membership.
There is a need for an additional $4000'.00 for legal fees and
$6812.00 for General Liability and Errors and Omissions Insurance
for the Board of Directors - for a total of $10,812.00. A request
had been made earlier to the City for the $14, 700.00 to complete an
assessment district feasibility study. (Note: City Council
approved funding for the feasibility study at their August 16th
meeting.)
Chairman Oakley interjected that there have been five (5)
properties annexed and shortly there might be three (3) more. The
Board hopes for 100 members by the end of the 1995 calendar year.
Director Truax does not feel this is a realistic number.
b. Advantages of being a GHAD Member
Chairman Oakley addressed the advantages of being a GHAD member.
When bluff property owners want or need to build seawalls there
will be less paperwork and costs will be reduced. Property owners
would apply only through the GHAD and City Building Department;
there would be no Coastal Commission application or fees - after
the Local Coastal Plan is adopted. The City will only charge for
time and materials. (Average cost might be $700.00 plus or minus.)
Specific cost reductions were described. Mr. Cooper of Berryman and
Henigar clarified that Bonds and Assessment Districts are separate
issues and their feasibility study will study both. Mr. Oakley
suggested property owners plan to combine efforts in building walls
to save monies. Mr. Cooper explained that Maintenance Fees would
be assessed based on each property owners benefit and again, their
study will show this.
Chairman Oakley stated that the GHAD is like any other assessment
district - once you join, voluntarily or involuntarily, you cannot
withdraw unless the GHAD is dissolved. State Law permits the GHAD
to take in properties involuntarily. Another way of joining GHAD
is by building a house addition requiring a major use permit. To
obtain the permit you must join GHAD. The California Coastal
Commission told the City they must require bluff property owners to
join the GHAD when applying for a major use permit. Then and only
then will permits be granted. The Board would like bluff property
owners to volunteer to join. They do not want to force membership.
The State Law regarding GHAD involuntary membership is designed to
fill the gaps in walls to avoid erosion. GHAD may help with
financing seawalls after the assessment district is formed.
Chairman Oakley invited Mayor DuVivier to make comments. Mayor
DuVivier explained that this all has been a very difficult process
08/30/95 G.H.A.D. MTG Page 4 Mtg #95 -11
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and taken a lot of time. The City started a comprehensive plan to
try to put some mechanism in place when the California Coastal
Commission declared a moratorium stating nothing could be built on
the bluffs anymore unless you form a GRAD. The City responded by
forming the GRAD. Mayor DuVivier stated the Council is behind the
GHAD and wants the GHAD to be successful. He closed by stating the
Coastal Commission wants a comprehensive plan for the entire coast.
Sr. Civil Engineer Hans Jensen set out a map of the original 30
lots making up the GHAD District. (312 -560 Neptune Ave.). Since
this map was produced properties both north and south of the
original boundaries have joined expanding the district. (Note:
The City is a property owner and has constructed a lower (base)
seawall.)
PUBLIC COMMENT
Jerrold Schoebelen 678 Neptune Avenue
Mr. Schoebelen stated he has had an existing structural failure and
is experiencing difficulties working with the City, especially the
Planning Department.
Wanda Fulton 430 Neptune
Mrs. Fulton stated that she was an involuntary GHAD member and that
she was insulted by the August 23rd letter. She expressed concern
that if she wanted to sell her house now it would be very difficult
because of all the entanglements (GRAD).
Margaret Brandeberry 282 Neptune
Mrs. Brandeberry was unhappy with the GHAD letter. She feels the
City government should be responsible fore the bluffs. She is
considering writing her congressman regarding the legality of the
GHAD.
Jack Gazdik 502 -604 Neptune Ave. (30 year resident)
Mr. Gazdik already has a seawall, not having any problems and he
doesn't need the GRAD. He feels owners should band together and
fight the GHAD.
Paul Denver 164 Neptune Ave.
Mr. Denver stated he had applied for a permit this year and was
denied and he had just learned about his inability to withdraw from
CHAD. He feels this should have been stated on the application.
He suggested the way things are going, it might take him up to 3
years to get his permit.
Paul Harlow 492 Neptune Ave. (25 year resident)
Mr. Harlow stated he had been forced to join the GHAD. He
expressed concern about keeping the peace amongst neighbors. He
asked bluff home owners to work with the Board to find amicable
ways to proceed. He has a lower seawall under construction now and
hopes the rug won't be pulled out from under him!
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John Downing 790 Neptune Ave.
Mr. Downing wanted to know the total assessed valuation of'those
who voluntarily and involuntarily joined the GHAD. He inquired iT
other GHADS were building at this time and he asked Attorney
Coleman how he might learn about dissolution of the GHAD. Mr.
Coleman advised him that this was described in our By -Laws and
those could be made available to him.
Pete Freeman 2768 Clearwater St. Los Angeles
(speaking for 178 Neptune Ave.) ,
Mr. Freeman stated he thought the letter to property owners was
truthful and well written. However he felt GHAD has had a great
negative impact and people feel endangered. He feels the GHAD
should be challenged.
Dale McKay 321 West "I" St.
Mr. McKay, condo resident, wondered how the GHAD might affect his
property. Chairman Oakley stated that eventually some condos will
be a part of the GHAD. Mr. Cooper stated that the feasibility
study will explore the condo situation and cost will-be based on
individual benefit, size, type of property etc.
Gary Hooker 1030 Neptune Ave (17 year resident)
Mr. Hooker stated that he is in the process of remodeling his house
and that with the GRAD in place, it is the first time in 17 years
that he at least sees someone trying to do something for the
homeowner. He did however resent the insurance and attorney costs.
Luann Knotts 478 -480 Neptune Ave
Mrs. Knotts stated that she is one who was forced to join the GHAD.
She expressed her frustration with the Coastal Commission and
stated she has personally been fooling with the permit process for
3 1/2 years.
Someone from the audience at this point asked if "joint and
several" language was included in our By -Laws. GHAD attorneys
suggested it was not. The gentleman suggested it should be.
Gary Martin 576 Neptune. Ave
Mr. Martin stated that he had attended several GHAD Board Meetings
and he expressed concern for some of the insurance limitations. He
thinks if the GRAD is sued, all members can be as well.
Nancy Glienke 305 So. El Portal (corner of Stone Steps)
Mrs. Glienke stated that she had been brought into the GHAD kicking
and screaming. She bought to remodel and is willing to battle
having the bluffs quit - claimed to the property owners.
Asst. City Manager Benson stated that following their last meeting,
the City Engineering Dept is getting back with the City Attorney to
discuss further the quit- claiming issue. It is tentatively
scheduled for the Sept. 13th agenda but may have to be postponed.
Chairman Oakley called for a 10 minute recess.
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Chairman Oakley called the meeting back to order at 9:03 p.m.
This item taken out of order.
3. Review of General Liability and Errors & Omissions Insurance
Coverage for GHAD Board of Directors
Risk Manager Jace Schwarm described three'package options on the
overhead screen. Board Members Pierce, Truax and Favero didn't
feel prepared to accept any at this point of the discussion -
Director Frickman stated that the GHAD is a real agency at this
time and prone to litigation and he feels the need to increase the
current liability coverage. Director Favero did not feel Robert F.
Driver Co. had been completely responsive to his inquiries. He
would like to see a User Friendly GRAD, no force. Mr. Favero
recommended turning the directorship of the GRAD over to the City.
Risk Manager Schwarm stated she felt the 2 hour workshop provided
by Robert F. Driver Co. clearly explained the coverages and she
further stated that the broker can't quote absolutes until causes
of action are determined. She stated that the insurance policy
clearly defines the company's duty to defend the GRAD.
Asst. City Manager Benson explained that the City deals with these
types of things every week and that the duty to defend includes
defense for exclusions.
Chairman Oakley stated he felt the scope of the coverage in place
at this time covers the GHAD's present business.
Director Truax asked Mayor DuVivier if the City would entertain Mr.
Favero's idea of taking over the directorship of the GRAD.
Mayor DuVivier stated that the City is not in the business of
protecting private property. He further commented that the Council
will probably not become the CHAD. He also stated that the City
will not force quit- claims on property owners.
Mayor DuVivier commented that you can't anticipate everything. The
GHAD is an entity and insurance should be increased if members are
concerned. He suggested the Council would probably facilitate the
request for additional funds for the increased insurance. He said
the City is liable for property not covered by the GHAD.
Asst. City Manager Benson stated that the insurance industry won't
insure some things; however, the GHAD would have the same
protection as City Council. If the Board is acting within its' By-
Laws, the insurance will defend.
Steve Knight 220 - 5th Street
Mr. Knight, a businessman in town, suggested if the Board did not
act on the insurance proposals the quote would go away. He
suggested the Board Members consider putting their properties in
trusts.
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Chairman Oakley called for the question.
Resolution #95 -030
Oakley moved, Frickman seconded to accept Option #2 and increase
the liability coverage by another $1,000,000.00. Motion carried.
Discussion: Director Frickman pointed out that if the GHAD ever
reached its potential 400 membership, the annual cost per year per
home owner would be approximately $160.00 and that would be an
amount most would not argue about. He feels the need to look at
the feasibility study then the property owners can decide if we
proceed. He pointed out that GHAD monies spent to date are
unsecured loans and if we fail there will be no assessment district
and the City would have to take the ball and complete the jog. He
feels that this offer is our best so far - and it is reversible.
Ayes: Lou Favero, Robert Frickman, Dave Oakley. Nay: Don Pierce,
Gwenn Truax.
Chairman Oakley stated that with the passing of this resolution, he
will write a letter to the City requesting the difference in
monies.
2. Berryman and Henigar proposed Feasibility Study
Resolution #95 -031
Frickman moved, Oakley seconded to authorize Berryman and Henigar
to proceed with the Assessment District Feasibility Study dated
June 8, 1995 by Jeff Cooper. Motion carried. Ayes: Robert
Frickman, Dave Oakley, Gwenn Truax. Nays: Lou Favero Abstained:
Don Pierce
Chairman Oakley asked if the authority included his signing the
final contract with Berryman & Henigar. Consensus was Chairman
Oakley will sign contract. Chairman Oakley confirmed with Mr.
Cooper that the agreed date for completion would be the third
Friday in February 1996.
4. October Agenda Items
a) Update on Army Corps of Engineers Sand Replenishment
(Mr. Benson will confirm date with Dave Wigginton, City's
liaison with Army Corps of Engineers)
b) Mr. Favero's request to turn directorship of GHAD over to
City Council, etc.
c) Attorney Coleman to define "Majority Debt Limit"
d) Discuss some form of Newsletter to Bluff Property Owners
NOTE: The consensus of the Board was to postpone their next
meeting until October 20, 1995.
Resolution #95 -032
Oakley moved, Pierce seconded to request an additional $4000.00 for
attorney fees and $6812.00 for additional liability coverage for a
total of $10,812.00, for the balance of 1995 operations. Motion
08/30/95 G.H.A.D. MTG Page 8 Mtg #95 -11
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carried. Ayes: Lou Favero, Robert Frickman, Dave Oakley, Don
Pierce, Gwenn Traux. Nays: None
Resolution #95 -033
Pierce moved, Frickman seconded to approve paying the $14,700.00 to
Berryman & Henigar for the Assessment District Feasibility Study
contract. Motion carried. Ayes: Robert Frickman, Dave Oakley, Don
Pierce, Gwenn Truax. Nays: Lou Favero.
There being no further business,
meeting at 10: p.m.
David S. Oakley, Chai an
Chairman Oakley adjourned the
By,:" Jo Ann Pine, Rec . Sec.
L
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