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HomeMy WebLinkAbout2026-05-14; Carlsbad Cable Hub & Honomoana Cable System and Vero Marley Broadband Project Update (District 2); Murphy, JeffTo the members of the: CITY COUNCIL Date 15IH•lZL CA V CC ✓ CM _7ACM_A M VDCM(3)~ May 14, 2026 Council Memorandum To: From: Honorable Mayor Blackburn and Members of the City Council Jeff Murphy, Deputy City Manager, Community Services Via: Mike Strong, Community Development Director Sheila Cobian, Assistant City Manager ~ {city of Carlsbad Memo ID# 2026026 Re: Carlsbad Cable Hub & Honomoana Cable System and Vero Marley Broadband Project Update (District 2) This memorandum provides an update to the Council Memorandum dated February 19, 2026 (Attachment A}, on the Carlsbad Cable Hub & Honomoana Cable System and Vero Marley Broadband Project. Background The Planning Division is currently processing land use development applications for two related fiber optic/broadband infrastructure projects ---a trans-Pacific subsea fiberoptic data cable system/landing site (Honomoana Cable System) and 4.3-miles of private underground conduit with fiber optic cable (Vero Marley Broadband). Review and permitting of these two-related projects involve federal, state and local government agencies including the California Public Utilities Commission, California State Lands Commission, and California Coastal Commission . The State Lands Commission, who is the overall project lead, is currently preparing an environmental document for the Honomoana Cable System portion of the project in compliance with the National Environmental Policy Act (NEPA} and California Environmental Quality Act (CEQA}. The City of Carlsbad has limited authority or influence on the overall project scope but does have a small and important permitting role in authorizing the proposal. A Coastal Development Permit is required for most types of development activities within the Coastal Zone, including utility projects. The city will likely need to rely on any environmental document prepared by other agencies to approve permits that fall under Carlsbad's jurisdiction. Discussion The State Lands Commission is acting as a "Lead Agency," which is a term that has specific meaning as it is used in CEQA. The Lead Agency will decide whether a project is subject to CEQA and whether an Environmental Impact Report (EIR}, Mitigated Negative Declaration (MND), Negative Declaration (ND}, or exemption would be required for the project(s). Along with other agencies, the city will likely utilize the environmental analyses and documentation prepared by the Lead Agency in its decision- making process. To ensure adequacy of these documents under CEQA, city staff has attempted to affect the scope and contents of the analysis by providing comments to State Lands Commission Community Services Branch Community Development Department 1635 Faraday Avenue I Carlsbad, CA 92008 I 442-339-2600 t Council Memo -Carlsbad Cable Hub & Honomoana Cable System and Vero Marley Broadband Project May 14, 2026 Page 2 before their draft environmental document is released to the public. Community Development Department staff met virtually with State Lands Commission representatives on March 18, 2026, and again on April 21, 2026, to discuss the two related projects. During those two meetings, State Lands Commission staff indicated that they intend on analyzing the environmental effects of the Honomoana Cable System project only, rather than the two related projects together. At those meetings, city staff indicated that by limiting its consideration only to the Honomoana Cable System portion of the project, the State Lands Commission will fail to analyze the cumulative environmental effects from the entire project. A follow-up letter was sent by the Community Development Department to the State Lands Commission on May 8, 2026, to request that the Honomoana Cable System and Vero Marley Broadband projects be analyzed as a single project and not segmented to avoid full environmental review (Attachment B). The following is a summary of the letter's key concerns: • The Vero Marley Broadband project proposes to install fiber optic cable starting at Carlsbad Boulevard, adjacent to the Honomoana Cable System project, which is sponsored by a subsidiary of Google, extend 4.3 miles to the east and end on Corte De La Pina and Cosmos Court. The project is designed to interconnect with the Honomoana Project and appears to ultimately connect to 2293 Cosmos Court, owned by Elkhorn Services, LLC, which according to a Federal Communications Commission Public Notice is a subsidiary of Google. • The scale and configuration of the proposed Vero Marley fiber facilities further demonstrate that the system is functionally dependent on, and designed to serve, the Honomoana Cable System. The proposed installation includes a conduit system consisting of four 6-inch conduits and two 1.25-inch conduits, along with large in-street manhole structures approximately 4 by 7 feet and 8 by 10 feet in size. This fiberoptic cable design far exceeds what is traditionally constructed in the city's right-of-way. Community Development Department staff maintain that the aspects of both projects are integrally related and constitute the whole of the action or the entire activity for which approvals are being sought. City staff will continue to work with the State Lands Commission on the environmental document before it is released for public review. Next Steps The Lead Agency is responsible for preparing the appropriate CEQA document. In accordance with both the specific requirements and the intent of CEQA, the environmental review process for the proposed project(s) will include opportunities for public and agency review. As of this writing, it is not known when the public review period will begin, but when it does it is anticipated that the city may make further comment on the proposed completeness of the project description, as well as the completeness, inconsistencies and/or correctness of the environmental analysis and technical appendices. Council Memo -Carlsbad Cable Hub & Honomoana Cable System and Vero Marley Broadband Project May 14, 2026 Page 3 In terms of the city's permitting role in authorizing the proposal, the Coastal Development Permit for the project(s) will require approval at public hearings, with the Planning Commission as the decision- making body, unless it is appealed to the City Council. As part of the decision-making process, it is anticipated that the city will be asked to consider the environmental document prepared by the Lead Agency and reach its own conclusions on whether and how to approve the project(s). It is anticipated that the Planning Commission would take action on both projects by the end of 2026. Staff will continue to monitor any additional guidance provided from other regulatory agencies and to provide updates as appropriate. Attachments: A. City Council Memorandum dated February 19, 2026 B. City letter to State Lands Commission dated May 8, 2026 cc: Geoff Patnoe, City Manager Cindie McMahon, City Attorney Dalton Sorich, Assistant City Attorney Jason Haber, Intergovernmental Affairs Director Eric Lardy, Assistant Director of Community Development To the members of the: CITY COUNCIL Date~l2~~ CC V CM_ CM DCM (3)~ February 19, 2026 Council Memorandum Attachment A {city of Carlsbad Memo ID# 2026006 To: From: Honorable Mayor Blackburn and Members of the City Council Jeff Murphy, Deputy City Manager, Community Services Via: Re: Mike Strong, Community Development Director Sheila Cobian, Assistant City Manager.:-~~ Carlsbad Cable Hub & Honomoana Cable System and Vero Marley Broadband Project (District -2) This memorandum provides information on two related fiber optic/broadband infrastructure projects currently in process ---a trans-Pacific subsea fiberoptic data cable system/landing site and an extended private underground fiber optic cable. Review and permitting of these projects involve federal, state and local government agencies including the California Public Utilities Commission, California State Lands Commission, and California Coastal Commission --- perhaps others since it involves federal and international waters. The City of Carlsbad has limited authority or influence on the overall project scope but does have a small and important permitting role in authorizing the proposal, which is discussed below. Background The two projects being considered can generally be described as follows. Carlsbad Cable Hub & Honomoana Cable System (CDP2025-0028 / HMP2025-0005) Starfish Infrastructure, Inc., and Elkhorn Services, LLC, are processing an application with multiple federal, state and local government agencies to install four trans-Pacific subsea fiberoptic data cables located roughly 3,000 feet offshore in the Pacific Ocean. These four data cables, which carry high speed telecommunications data, will connect to a larger subsea cable that will specifically serve the countries of New Zealand and Australia. In Carlsbad, the four data cables will attach to a landing site ---a <100 square-foot underground Community Services Branch Community Development Department 1635 Faraday Avenue I Carlsbad, CA 92008 I 442-339-5088 t Council Memo -Carlsbad Cable Hub & Honomoana Cable System/ Vero Marley Broadband February 19, 2026 Page 2 vault ---located on the east side of Carlsbad Boulevard, immediately north of Palomar Airport Road on land owned by California State Parks. This cable system proposed by Starfish Infrastructure, Inc., and Elkhorn Services, LLC, is only one system among other similar subsea cable systems being developed in parallel by different tech companies in different cities up the coast. These other subsea cable networks would serve different Asian Pacific destinations including Japan, Singapore and Guam. Vero Marley Broadband Project (CDP2025-0037 / PUB 2025-0006) Vero Networks is proposing to install 4.3 miles of fiber optic cable starting at Carlsbad Boulevard, near the Honomoana Project. According to their website, Vero Networks is a fiber-optic infrastructure and high-speed internet service provider. The entire project would be located within the city's public right-of-way where the conduits would be installed underground much like all other utilities. From west to ~ east, the project alignment . ._LUUJB,l;a\=~ _ , extends southwest along Carlsbad Boulevard to Palomar Airport Road where it extends 3.25 miles to Yarrow Drive. The line then snakes southeasterly to its ultimate terminus at Corte De La Pina and Cosmos Court. The project is designed to interconnect with the Honomoana Project and appears to ultimately connect to 2293 Cosmos Court, owned by Elkhorn Services, LLC, which according to a Federal Communications Commission public notice is a subsidiary of Google. The property includes an existing one-story 47,272 square foot (SF} structure. The building is currently vacant, however, in September 2025 the Building Division approved tenant improvement plans showing office (11,267 SF} and warehouse (36,005 SF} space, interior electrical equipment racks and outdoor generators, which are all uses that are allowed by right under the city's Zoning Ordinance. There is no active or proposed business license at this location. Discussion Given the city's jurisdictional authority, the project will require approval of a right-of-way permit, which is a ministerial, by-right permit. However, city staff have taken the position that a local Coastal Development Permit (CDP} is also required for work in the right-of-way, which would be subject to public notice, environmental review, and public hearing. City applications for the Honomoana Project were submitted on September 4, 2025, while the permits for the Council Memo -Carlsbad Cable Hub & Honomoana Cable System/ Vero Marley Broadband February 19, 2026 Page 3 Vero Marley Broadband Project were submitted on October 20, 2025. City staff are internally coordinating the review of each project to ensure city code compliance. As previously mentioned, there are multiple agencies that require review and approval of the Honomoana Project. The State Lands Commission, who is the overall project lead, is preparing the environmental document for the entire project in compliance with the National Environmental Policy Act (NEPA) and California Environmental Quality Act (CEQA). Along with other agencies, the city will need to rely on the environmental document to approve permits that fall under our jurisdiction, namely the CDP. As an affected agency, city staff are working with the State Lands Commission to obtain the draft environmental document before it is released to the public to ensure that the analysis addresses local concerns and issues. If the State Lands Commission does not provide the city with a draft, the city will review and comment on the document once it is released to the public. Next Steps Staff will continue to work with the State Lands Commission on the environmental document. The CDP for the projects will require approval at public hearings, with the Planning Commission as the decision-making body (unless appealed to the City Council). It is anticipated that the Planning Commission would take action on both projects by the end of 2026. Staff will continue to monitor any additional guidance provided from other regulatory agencies and to provide updates as appropriate. cc: Geoff Patnoe, City Manager Cindie McMahon, City Attorney Dalton Sorich, Assistant City Attorney Jason Haber, Intergovernmental Affairs Director Eric Lardy, Assistant Community Development Director May 8, 2026 DELIVERED BY ELECTRONIC MEANS TO ALEXANDRA.BORACK@SLC.CA.GOV ALEXANDRA BORACK, ASSISTANT CHIEF CALIFORNIA STATE LANDS COMMISSION 100 HOWE AVENUE, SUITE 100 SOUTH SACRAMENTO, CA 95825-8202 Ms. Barack: Attachment B C city of Carlsbad The City of Carlsbad is currently processing land use development applications for two related fiber optic/broadband infrastructure projects. One project consists of a trans-Pacific subsea fiberoptic data cable system/landing site, called the Honomoana Cable System. The other project includes an extended private underground fiber optic cable (Vero Marley Broadband). The Honomoana Cable System project would install four trans-Pacific subsea fiberoptic data cables located roughly 3,000 feet offshore in the Pacific Ocean. These four data cables, which carry high speed telecommunications data, will connect to serve the countries of New Zealand and Australia. In Carlsbad, the four data cables will attach to a landing site -two <100 square-foot underground vaults located on the east side of Carlsbad Boulevard, immediately north of Palomar Airport Road on land owned by California State Parks. The Vero Marley Broadband project proposes to install fiber optic cable starting at Carlsbad Boulevard, adjacent to the Honomoana Cable System project, which is sponsored by a subsidiary of Google, extend 4.3 miles to the east and end on Corte De La Pina and Cosmos Court. The project is designed to interconnect with the Honomoana Project and appears to ultimately connect to 2293 Cosmos Court, owned by Elkhorn Services, LLC, which according to a Federal Communications Commission public notice is a subsidiary of Google. Both land use development applications were submitted within the same general time period in 2025 and the applications are pending concurrently. Review and permitting of these projects involve federal, state and local government agencies including the California Public Utilities Commission, California State Lands Commission, California Coastal Commission, and likely others since it involves federal and international waters. The State Lands Commission, who is the overall project lead, is preparing the environmental document for the Honomoana Cable System project in compliance with the National Environmental Policy Act (NEPA) and California Environmental Quality Act (CEQA). Since the City of Carlsbad will be acting as a Responsible Agency as defined by CEQA (§21069; CEQA Guidelines §15096), it is anticipated that the city will need to coordinate environmental review for these two projects and rely on any environmental document prepared by other agencies to approve permits that fall under Carlsbad's jurisdiction. As an affected agency, city staff are working with the State Lands Commission to obtain the draft environmental document before it is released to the public to ensure that the analysis addresses local concerns and issues. City of Carlsbad staff met virtually with State Lands Commission representatives on March 18, 2026, and April 21, 2026, to discuss the two projects. During those two meetings, State Lands Commission staff Community Development Department I 1635 Faraday Avenue I Carlsbad, CA 92008 I 760-602-4600 I 760-602-8560 fax indicated that they intend on analyzing the environmental effects of the Honomoana Cable System project only and identifying certain mitigation measures that are necessary to keep the environmental impacts of the Honomoana Cable System at a level that was less than significant. At those meetings, City staff indicated that by limiting its consideration only to the Honomoana Cable System project, the State Lands Commission will fail to analyze the cumulative environmental effects from the entire project, which must include the Vero Marley Broadband project or other reasonably foreseeable use and operation. The scale and configuration of the proposed Vero Marley fiber facilities further demonstrate that the system is functionally dependent on, and designed to serve, the Honomoana Cable System. The proposed installation includes a conduit system consisting of four 6-inch conduits and two 1.25-inch conduits, along with large in-street manhole structures approximately 4 by 7 feet and 8 by 10 feet in size. These dimensions and capacities substantially exceed those associated with standard fiber distribution infrastructure within the city. By comparison, typical locally serving fiber networks utilize significantly smaller facilities, such as 10 by 15-inch hand holes, 3 by 5-foot distribution vaults and 2 by 3- foot access vaults (generally not located within the public street), with fiber typically installed via microtrenching in 1.5-to 2-inch conduits. The magnitude and configuration of Vero Marley's proposed infrastructure are more appropriate with serving the needs of a high-capacity international cable landing and transmission system, not a conventional local-serving network. The subject of dividing a project into smaller components has been challenged in various court cases, leading to recent and significant legal developments. Courts have generally upheld the need for a complete Environmental Impact Report (EIR) for a project, emphasizing that piecemeal reviews do not provide a complete picture of relevant environmental considerations. We hope that the following five case studies on the "whole of an action" and "reasonably foreseeable" activities helps underscore the importance of having a more comprehensive impact assessment for Honomoana Cable System project, ensuring that all potential environmental impacts are considered and adequately addressed. Here, the Vero Marley component is part of the whole of the action and must be evaluated together with the Honomoana Cable System. The Vero Marley facilities do not have independent utility at the scale proposed and are instead designed to implement and support the capacity, function, and purpose of the Honomoana Cable System project. 1. Laurel Heights Improvement Assn. v. Regents of the University of California (1988) Cal. 3d 376 In this case, the Laurel Heights Improvement Association challenged the University of California's EIR related to the relocation of its biomedical research facility-raising concerns about the anticipated future activities at the new location. The California Supreme Court held that the EIR was inadequate because it failed to discuss future uses of the facility and their environmental effects of those. In it's opinion, the court quoted CEQA Guidelines §15144 where environmental analysis involves an agency's best efforts in forecasting the foreseeable preparation of an EIR, to find out and disclose all that it reasonably can. Why it is relevant: The record before the city reflects that the construction of the Vero Marley Broadband project was, from the very beginning, within the contemplation of the Honomoana Cable System project applicant. The aspects of both projects are integrally related and constitute the whole of the action or the entire activity for which approvals are being sought. This ruling clarifies that lead agencies must not limit their review and ignore potentially significant impacts from reasonably foreseeable connections and/or operations. 2. Nelson v. County of Kern (2010) 190 Cal.App.4th 252 Carlton Global Resources proposed a surface mining operation, including the previously mined quarry, to extract calcite marble. The County of Kern reviewed only the reclamation plan, leaving environmental review of the mining operation to other agencies. Petitioners, including Renee Nelson and Clean Water and Air Matters, argued that the County violated CEQA by failing to review the environmental impacts of the entire project, not just the reclamation plan. The court held that the approval of the mining project had to be set aside, and the County was required to comply with CEQA by undertaking environmental review of the entire project, the reclamation plan and the mining operations, with the preparation and certification of a legally sufficient EIR regarding the entire project. The court's rationale was that both aspects were integrally related and constituted the whole of the action and activity. When the county focused only on the reclamation plan it committed a "fallacy of division" whereby a larger project was improperly divided into components for piecemeal consideration. In doing so, the county committed prejudicial error, depriving the decision makers and the public from essential information and environmental analysis that are required by CEQA. Why it is relevant: State Lands Commission staff intend on analyzing the environmental effects of the Honomoana Cable System project only, rather than the Vero Marley Broadband project, because the Honomoana Cable System project is within their jurisdiction. However, CEQA imposes an independent duty on agencies to review the full environmental impact of the whole of the projects. This ruling clarifies that lead agencies under CEQA cannot defer full environmental review solely because only part of the project occurs within their jurisdiction. 3. Banning Ranch Conservancy v. City of Newport Beach (2012), 211 Cal.App.4th 1209 The case Banning Ranch Conservancy v. Newport Beach involved a dispute over the EIR for a project. This case involved allegations of piecemealing. The court noted the Laurel Heights case, discussed above, wherein the California Supreme Court set forth the test for piecemealing: analysis of environmental effects of future expansion or other action if (1) it is a reasonably foreseeable consequence of the initial project, and (2) the future expansion or action will be significant in that it will likely change the scope or nature of the initial project or its environment effects. The court noted that the project description is the starting point for a piecemealing challenge, not the finish line. Notably, the court states that there may be improper piecemealing when the purpose of the reviewed project is to be the first step toward future development or when the project legally compels or practically presumes completion of another action. The court points out that there is no piecemealing when the projects have different proponents, serve different purposes, or can be implemented independently. Why it is relevant: There may be improper piecemealing when the purpose of Honomoana Cable System project is to be the first step toward future development {Vero Marley Broadband). Despite being filed as separate applications with different points of contact, the aspects of both projects serve the same project proponent, Google. This project compels and presumes completion of the Vero Marley Broadband project because the Honomoana Cable System does nothing if it merely ends at the landing site. Instead, the cables must continue to an ultimate location where the data being transmitted through the cables and are sent/received or retransmitted for their intended purpose. The Honomoana and Vero projects cannot reasonably be viewed as independent of each other. 4. Tuolumne County Citizens v. City of Sonora (2007) 155 Cal.App.4th 1214 In this case, the court held that a proposed Lowe's home improvement center and a planned realignment of a road were improperly segmented as two separate projects in light of the dis positive fact that the road realignment was included by the City of Sonora as a condition of approval for the Lowe's project. This is because these acts are part of a coordinated endeavor, integral to each other. When one activity is an integral part of another activity, the combined activities are within the scope of the same CEQA project. Therefore, this was one project, not two, because their independence was brought to an end when the road realignment was added as a condition to the approval of the home improvement center project. Why it is relevant: The court analysis was that the Lowe's project could not be completed and opened legally without completion of a road realignment. Similarly, the Honomoana Cable System project, which proposes to install trans-Pacific subsea fiberoptic data cables needs to deliver high speed telecommunications internationally. And this digital information needs to come from somewhere -a physical place that houses and stores computing infrastructure and networking components (servers, data storage drives, and network equipment) to process and move digital information to the proposed Honomoana Cable System landing site. 5. Arviv Enterprises, Inc. v. South Valley Area Planning Com. (2002) 101 Cal. App. 4th 1333 In this case, a housing developer (Arviv Enterprises, Inc.) managed to obtain and secure permits to build houses, all within a specific planning area of Los Angeles. Some of the permits received CEQA clearances through a categorical environmental exemption, others were covered by a mitigated negative declaration. Prompted by nearby residents' and homeowner associations' complaints, the City of Los Angeles came to realize the cumulative effects from what was in reality a development project for 21 hillside houses required an environmental review of the project as a whole. Arviv contended that there was a vested right to proceed with the development without having to complete an EIR based on permits already issued, and environmental clearances already obtained. The court found that while there was no single piece of evidence standing alone requiring preparation of an EIR, when the record as a whole was studied, the collective weight of the evidence supporting the need for an EIR was substantial. The court also ruled that the overall record contained evidence that a fair argument could be made that the final phases of the development will have significant environmental effects. This was the result of inadequate or misleading project descriptions, there the cumulative environmental impacts were disguised or minimized by the filing of numerous serial applications. The developer never intended to build a two-house project, rather he envisioned a 21-house development and city staff was unable to link the projects together until they received complaints from the public. Why it is relevant: State Lands Commission staff intends on analyzing the environmental effects of the Honomoana Cable System project only, because the Vero Marley Broadband project may already be categorically exempted by the Public Utilities Commission. CEQA imposes an independent duty on agencies to review the full environmental impact of projects, even the cumulative environmental impacts, that may be disguised or minimized by filing numerous serial applications or may have been otherwise exempted from environmental review. Here, the city was able to clearly link these projects together and urges the State Lands Commission to not commit the error in the project description as noted by the court. CEQA defines a "[p]roject" as "an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and ... that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies." (Public resources Code §21065.) The CEQA Guidelines augment the statutory definition by specifying that a "[p]roject" means "the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment" and which is undertaken, supported or approved by a public agency. (CEQA Guidelines §15378(a).) In this context, the term "project" does not mean each separate governmental approval. This type of approach to defining the project to be studied under CEQA (i.e., including "the whole of an action") prevents a public agency from avoiding CEQA requirements by dividing a project into smaller components which, when considered separately, may not have a significant environmental effect. (Tuolumne County Citizens {2007) 155 Cal.App.4th 1214, 1222; San Joaquin Raptor/Wildlife Rescue Center v. County of Stanislaus (1994) 27 Cal.App.4th 713, 730.) Generally, an agency will prepare an initial threshold study to gather information necessary to determine whether to prepare an EIR or a negative declaration. As you know, an initial study must include a description of the project. An accurate and complete project description is necessary to fully evaluate the project's potential environmental effects under CEQA, as identified in the precedent cited in this letter. This will include all phases of project planning, implementation, and operation. Under the Laurel Heights test, the facts will determine whether to prepare an EIR or adopt a negative declaration and to what extent the environmental document must analyze future expansion or other action. It is important to note that where an agency fails to provide an accurate project description or fails to gather information and undertake an adequate environmental analysis in its initial study, a negative declaration is inappropriate (El Dorado County Taxpayers v. County of El Dorado (2004) 122 Cal.App.4th 1591). With respect to the subject issue raised by this letter, the two projects may properly undergo separate environmental reviews when the projects have different proponents, serve different purposes, or can be implemented independently. As is readily apparent from the above definitions, the concurrent series of permit applications to the city and overlapping reviews over a short period of time, and the details of the request (the proposed location, function, utility, etc.), the scope of any environmental review prepared by State Lands Commission for the Honomoana Cable System project must include the entire project, including the Vero Marley facilities, not merely a segment or the first step in a series of actions. Based on the foregoing, plus the previous city comment letters and responses to the Honomoana Cable System project applicant and the Vero Marley Broadband project applicant, place both applicants fully on notice that the "whole of an action" is a key issue for the city. Under CEQA, projects that are "connected actions" or exhibit functional interdependence must be analyzed as a single project and may not be segmented to avoid full environmental review. fn/()5 Mike Strong, Director of Community Development City of Carlsbad CC: C. Dalton Sorich, Assistant City Attorney Jason Haber, Intergovernmental Affairs Director Eric Lardy, Assistant Community Development Director Robert Efird, Principal Planner Scott Donnell, Senior Planner