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HomeMy WebLinkAbout1981-04-07; City Council; 6133-4; Boat Insurance RequirementCITY OF CARLSBAD y ^. Initial: AGENDA BILL NO. C0 / 3 3 ~ •"'• rtMt A-trA-rtf" Y Dept. Head DATE: APril 7, 1981 *° City AttY- \L '• City Mgr. DEPARTMENT: . Parks and Recreation ' Subject: Boat. Insurance Requirement, for Agua Hedionda-Lagoon Statement of the Matter In June, 1980 the City Council adopted an ordinance requiring boat users at Agua Hedionda Lagoon to have a $300,000- liability insurance policy ..._. before a boat permit would be issued. The Department of Boating and ^ Waterways has determined that this requirement is beyond the City's power to regulate and has requested the City to -repeal this section of the or- dinance prior to April.15, 1981. The attached staff report discusses four options: (1) ' Retain insurance ' requirement; (2) Repeal insurance requirement; (3) Close lagoon to power boats; (4) City obtain blanket policy. It is recommended that the City repeal the insurance requirement and require a hold-harmless agree- ment as part of the boat permit application. In essence, boat owners would still be required to have insurance coverage because it is required by Bristol Cove and Snug Harbor. There is no significant fiscal impact. Exhibits . . 1. Memorandum to City Manager dated March 23, 1981 2. City Attorney letter_dated September 22, 1980. 3. Sample hold-harmless agreement. 4. Letter dated March 16, 1981 from Department of Boating and Waterways. 5. Letter from State Attorney General office dated September 11, 1980. Recommendation That City Council direct staff to prepare the necessary documents to remove the $300,000 liability insurance requirement from the City Code and add a hold-harmless agreement. Council Action; 4-7-81 Council returned the matter to staff for further report at the next regular meeting. MEMORANDUM TO : Frank Aleshire, City Manager FROM : David Bradstreet, Parks and Recreation Director DATE : March 23, 1981 SUBJECT: Boat Insurance BACKGROUND In June, 1980 the City Council adopted an ordinance requiring boat users at Agua Hedionda Lagoon to have a $300,000 liability insurance policy before a boat permit would be issued. The Department of Boating and Waterways has determined that this requirement is beyond the City's power to regulate and has requested the City to repeal this section of the ordinance prior to April 15, 1981. RECOMMENDATION It is recommended the City comply with the State request and repeal the $300,000 insurance requirement and add as a condition of obtaining a boat permit the requirement to sign a hold-harmless agreement . FISCAL IMPACT There is no significant fiscal impact. DISCUSSION Option 1 - Retain Insurance Requirement The City Attorney has disagreed with the State determination saying the City does have the authority to require insurance. The Attorney believes the lagoon is a special use area and since the City has the authority to close the lagoon, it also has the right to impose conditions (see Exhibit 2). The Chief of Operations for the Department of Boating and Waterways has stated verbally that the State will take the matter to liti- gation if the City chooses not to comply with the request to repeal the $300,000 insurance requirement. A major disadvantage to this option is the expense and time required if the matter does in fact go the litigation. Option 2 - Repeal Insurance Requirement The City insurance requirement is essentially backed up by the two private launching facility owners. Bristol Cove required $300,000 insurance before the City made it a requirement and the Snug Harbor - 1 - Attachment Marina owner also requires a $300,000 policy which is so stated in his agreement with the City. Dr. Daljit Sarkaria, who owns Snug Harbor Marina, has stated he will not operate without such a re- quirement and has named the City as additionally insured in his own $1,000,000 liability insurance policy. Therefore, if the City were to repeal the insurance requirement, boat owners would still need the insurance protection before operating on the lagoon. Snug Harbor waii'l'd still require that the City be named as additionally insured because this is in the agreement between the City and marina owner. For further protection, the City could require a hold-harmless agreement with each boat permit holder by which the boat owner would agree to indemnify the City from liability. This alternative would satisfy the State requirement, protect the City and allow the City to continue the boating program. Option 3 - Close Lagoon to Power Boats This option has been mentioned by the City Council in the past, but does not appear to be a viable solution. From a liability standpoint, this alternative would be the best for the City. The boating program is approximately fifty percent self-supporting and to date, $12,000 in boating permit fees and operator launching fees have been collected. Approximately 1,200 boats have been launched at Snug Harbor since July, 1980 and approximately one-third of these were by Carlsbad residents. Option 4 - City Obtain Blanket Policy The City could obtain a blanket insurance policy to cover all boat users at the lagoon for a cost of between $5,000 and $10,000. This option is not recommended for the following reasons: 1. Boat permit fees would have to be increased nearly 100% (a State representative has pointed out that Carlsbad fees are among the highest in the State). 2. Most responsible boat owners already have the insurance. (Bristol Cove and Snug Harbor requires coverage). 3. Administrative costs would increase. 4-. The State may disallow this option as it may be seen as a guise for continuing to require insurance. DLB:MDL:kap CITY OF CARLSBAD 1200 ELM AVENUE CARLSBAD, CALIFORNIA 92008 (714) 438-5531 September 22, 1980 Rodney Lilyquist, Jr., Esq. Deputy Attorney General Department of Justice • • •3580 Wilshire Blvd. Los Angeles, CA 90010 RE: Opinion No. 80-901 Dear Mr. Lilyquist: This is in response to your letter of September 11, 1980, asking for our comments on the above-referenced opinion request. We will skip the standard municipal home rule constitutional police power versus preemption arguments. I .am sure we both have a standard set of points and authorities on such questions. Suffice it to say it is ray opinion that the City Council's Ordinance is a reasonable and appropriate response to a local problem and a legitimate exercise of the city's police power. Let me offer some background in addition to the facts contained in Mr. Frazee's opinion request of August 15, 1980. Agua Hedionda Lagoon consists of three parts. The City has no interest or control over the outer lagoon. The middle lagoon is subleased to the YMCA and use is limited to sailboats and swimming activities. The ordinance in question applies only to the inner lagoon, which is a relatively small body of water, bounded by the 1-5 freeway, and some of the city's better residential areas. The inner lagoon has no access to either the outer lagoon or the ocean and is not considered to be navigable waters. The Coast Guard Commandant in Long Beach was made aware of our ordinance and has no objections. The results- of the boating program this summer under the new ordinance have been excellent. With one or two possible exceptions, there have been no protests or objections to our requirements from the boating public. The private marina owner and operator is in full agreement with the city's program. To my knowledge, the boating activity on the .lagoon this summer has been trouble-free and we have had a much safer lagoon than at any time in the past. As you may know, the Department of Boating and Waterways objects to our designation of the inner lagoon as 'a special use area, limited among other things to those motorboats which are insured. The Depart- ment did not and cannot cite any statutory or case authority for the -3- Exhibit 2 Rodney Lilyquist, Jr., Esq. -2- September 22, 1980 proposition that the city is precluded from imposing such a requirement. In my opinion, the City Council's determination, that the enclosed nature of our lagoon—its small size and sandbars—requires responsible drivers and that it is irresponsible not to be insured, is reasonable. It is at least arguable that the kind of person who would operate an uninsured boat in our situation is also more likely to be unaware of or disinclined to follow the city's safety regulations. The city wants responsible drivers and insurance is one way to get responsible drivers. We think the applicable legal authorities make absolutely clear and the Department agrees, thet given the circumstances of our lagoon, the city would be fully justified in banning powerboats altogether or in imposing a five mile per hour speed limit which would, in effect, eliminate the water skiing which is the primary lagoon activity. It is well-settled that the right to ban something entirely includes the right to allow it conditionally, and that is what the city has done. The Department's insistence on pursuing its own bureaucratic interests in that matter is a classic example of "burning down the village to save it." The city's ordinance is an attempt to maximize lagoon use. The Department's position, if it prevails, will have the opposite effect. My research discloses only two authorities which bear on this question. The opinion of your office at 45 Ops.Cal.Atty.Gen. 122(1965} and the case of People Ex.Rel. Younger v. El Dorado County, 157 Cal.Rptr. 815 (1979). We think your opinion is essentially correct in its exposition of the applicable law and would clearly support our special use area designation. We would also cite the El Dorado case in support of our ordinance. The differences between our situation and that facing the court in El Dorado could 'not be more dramatic. El Dorado involved twenty miles of a major navigable river, which was one of the two best, if not the only, Whitewater rafting opportunities in the state of California, which was heavily used by the public. As the court cor- rectly points out, El Dorado's ordinance would have for all practical purposes totally prohibited any use of the river. Contrast our situation: a relatively small body of water; enclosed by an urbanized area; not navigable; privately, not publicly owned; of relatively minor importance; not involving through traffic or adversely affecting the use of any other body of water or a portion of a body of water; and most importantly, something which instead of banning use of the water, seeks to maximize the opportunity for such use. While expressing no opinion on the matter, the court in El Dorado impliedly upholds a regulation which would ban powerboats as opposed to other boats by distinguishing that from the sitution facing the court which banned all activity. Carlsbad is seeking to do a great deal less than the court was apparently prepared to approve an El Dorado. We are not eliminating powerboats and limiting lagoon use to sail craft but, rather, are seeking a way to accommodate the use of both sail craft and power- boats by insuring responsible drivers and protecting the public fisk. -4- Rodney Lilyquist, Jr., Esq. -3- September 22, 1980 We have great difficulty in understanding the position the Department is taking on this matter. Attempting to draw on analogies with a city's efforts to require financial responsibility for use of city streets simply does not bear analysis. A small lagoon is simply not the same as a city street for reasons that should be obvious. There is no problem here with establishing bad precedence since the facts as they apply to our lagoon are essentially unique. I'm aware of very few, if any, other localities which could establish a similar set of circumstances. Most importantly, our ordinance is really not burden- some on the boating public. Our experience this summer has indicated that almost all of the boaters already carry insurance and that they may obtain the necessary policy endorsement, naming the city as an also insured, at no additional cost. We have yet to encounter a boat operator who isn't willing to spend a few additional dollars in order to preserve the opportunity to use our lagoon as opposed to having the lagoon closed altogether. I would very much appreciate knowing if your research discloses any other authorities. Please let me know if you need any further in- formation , Very truly yours, VINCENT F. BIONDO, City Attorney VFB/mla -5- 1200 ELM AVENUE •§ \Z&/ •• TELEPHONE: CARLSBAD. CALIFORNIA 92008 M^/W JM (714)438-5621 Cttp of Cartetmb Hold-Harmless Agreement I, , agree to indemnify and save harmless the City of Carlsbad, its officers, and employees from and against any and all claims, demands, liabilities or loss of any kind or nature which the City, its officers, agents or employees may sustain or incur or which may be imposed upon them for injury to or death of persons or damage to property as a result of, arising out of the use of Agua Hedionda Lagoon. I further agree to pay any and all costs and expenses, including but not limited to court costs and reasonable attorney's fees, incurred by the City on account of any such claims, demands, or liabilities. Signature Date -6- Exhibit 3 STATE OF CALIFORNIA—RESOURCES AGENCY EDMUND G. BROWN JR., Governor DEPARTMENT OF BOATING AND WATERWAYS 1629 S STREET SACRAMENTO, CALIFORNIA 95814 (916) 445-6281 March 16, 1981 Mr. Frank Alshire, City Manager City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Dear Mr. Alshire: Thank you for your letter of March 5, 1981 concerning the insurance on Agua Hedionda Lagoon. We are unable to answer your question concerning the shifting of the insurance re- quirement to the owner or operator of the launching facility on the Lagoon. Before we can address this issue, there are several questions which must be answered about Snug Harbor's operations. 1. Who owns the real property and launching facilities at Snug Harbor? 2. Is Snug Harbor the sole launching facility on the Lagoon? 3. What fees does Snug Harbor collect for use of its facili- ties, and are there any contractual limitations on what may be done with these fees? 4. Does Snug Harbor currently have any liability insurance? 5. What protection does Snug Harbor feel it obtains by being named "additionally insured" in a boating liability policy? The issue at hand is whether or not the City chooses to repeal Or amend the current ordinance relative to the insurance require- ment. If the City Council chooses to act on this issue, we will address the changes in a routine procedural manner, as per Sec- tion 660 of the Harbors and Navigation Code. In fairness, we must say that we do not feel that shifting the insurance require- ment from the City to Snug Harbor is appropriate. Per our agreement, we hope to hear from you prior to the agreed date of April 15, 1981. Thank you for your time^ and considera- tion in this matter. Sin •TON D. MOORE, Chief Operations Division Phone: (916) 445-2427 -7-Exhibit f irnta at Ot (Eulifornta 3S8° WII.SHIRE BLVD. LOS ANGELES 9OOJO (213) 736-2304.\ (PRONOUNCED DUKE UAY-OIN) Attorney (§?neral September 11, 1980 Vincent Biondo City Attorney 1200 Elm Street Carlsbad, California 92008 Re: Opinion No. 80-901 Dear Mr. Biondo: We have received an opinion request, copy enclosed, concerning whether a city or county may enact an ordinance pursuant to Harbors and Navigation Code section 660, restricting the use of a body of water to boat owners who carry liability insurance. It is the policy of our office to solicit the views of all interested parties prior to issuing an opinion. Your comments regarding the question presented would be appreciated. If possible, a response by October 6, 1980, would be most helpful. Very truly yours, RODNEY LILYQOIST, JR. Deputy Attorney General RLJ:hc Encl. c (ftaltfcrma COMMITTEES STATE C»P;TOL . LEFiSi'•*-feji-- i LOCAL GOVERNMENT. SASHAWENTO 93814 - t<£.£ jf£i£L ' ~f VICE CHAIRMAN (9I») S43-Z390 \^.0*,z*- / TRANSPORTATION DISTRICT OFFICE Z\ ~^~ "' f f HOUSING AND COMMUNITYSUITE 14 L\ -ff «T rt Wf K»- I Vt DEVELOPMENT 2723 JEFFERSON STREET CARLSBAD. CA 92O08 (714) 434-1749 ROBERT C. FRAZEE ASSEMBLYMAN, SEVENTY-SIXTH DISTRICT August 15, 1980 The Honorable George Deukmejian, Attorney General, Department of Justice 555 Capitol Mall, Suite 350 Sacramento, California 95814 Dear George: I have been contacted by Dr. Ronald C. Packard, Mayor of the City of Carlsbad, regarding a dispute that currently exists between the City and the California Department of Boating and Waterways. As the result of two serious boating accidents on the Agua Hedionda Lagoon the City is now facing a $2 million liability exposure. This has prompted the City Council to adopt an ordinance requiring proof of lia- bility insurance prior to launching a boat on the Lagoon. The Department contends that the City has no authority to require proof of insurance and at this point, I under- stand, the Director is contemplating the filing of a legal action to force the City to rescind the ordinance. By way of background, the Agua Hedionda Lagoon is a body of water owned by the San Diego Gas & Electric Company. The Lagoon was dredged from marsh and dry land some 25 or 30 years ago for the purpose of providing cooling water for their Encina Power Generating Plant. For many years the City of Carlsbad has leased the surface rights to the Lagoon from SDG&E and has made the Lagoon available for boating, water skiing and other water oriented recreational activities. The Lease Agree- ment required the City to hold harmless SDG&E from any liability that may accrue as a result of the recreational use of the Lagoon. RECEIVED OP/N/GN UNIT ( The Honorable George Deukmejian Page Two. August 15, 1980 All access, including boat launching facilities, is across private property and is controlled by private operators. There is no public operated launching fac- ility. The Lagoon is very heavily used, primarily by high-speed boats and water skiers. The City does provide a police patrol boat on the Lagoon during peak use hours. It is the position of the City that: 1. The State of California has no authority under cur- rent law to prohibit the City from requiring proof of insurance; 2. That State law allows the City to declare a special use area and that is what they have done in the case of the Inner Agua Hedionda Lagoon; 3. That the City is not attempting to impose a financial responsibility requirment. Evidence of insurance is simply a prerequisite to entrance into a special use area. If the Department's position is upheld, then for the sake of protecting their own liability, the City is left to consider several options, including restricting access and use of the Lagoon by cancelling the Lease and closing the Lagoon to boats altogether, restricting boat speeds to 5 miles per hour, and restricting the Lagoon to non-power boats. All of these options are clearly within their scope of authority. Unfortunately, these options would serve only to restrict boating opportunities quite contrary to the legislative charge to the Department in their enabling legislation. My question to you is: Does the State of California have the authority under present law to prevent a municipality from requiring proof of insurance as a prerequisite for the use of private property under lease to said municipality? Since ROBBKr C; FRAZEE, Assemblyman, 76th District MEMORANDUM TO : Frank Aleshire, City Manager FROM : David Bradstreet, Parks and Recreation Director DATE : March 16, 1981 SUBJECT: Budget for Lagoon Enforcement Program BACKGROUND Last year City Council approved $29,000 for the Agua Hedionda Lagoon program. Estimated expenditures for fiscal year 1980-81 are $32,800. The overrun is the result of salaries and over- time for providing police officers during heavy use times at the lagoon. Because the existing program is not self-supporting, staff has considered various alternatives to reduce costs. RECOMMENDATION It is recommended that the level of police service at the lagoon be reduced to eight hours per day, five days per week. This is reflected in the 1981-82 budget submission for Agua Hedionda Lagoon. The schedule to be from Wednesday through Sunday with Mondays and Tuesdays off except for holidays. FISCAL IMPACT If the level of service for police protection is reduced, the program will be self-supporting. The proposed budget will be $16,850 which is expected to be reimbursed entirely from income produced at the lagoon. 1980-81 $32,800 (actual expenditures) 1981-82 16,850 (proposed) ALTERNATIVES Alternatives discussed related to making the program self- supporting are: 1. Full police coverage (12 hours a day, seven days a week). 2. Partial police coverage (8 hours a day, five days a week). 3. Part-time/on call coverage using a beat officer to respond to calls as needed. 4. Increase boat permit fees to cover current program costs. - 1 - DISCUSSION Revenues, to date, from boat permits and launching fees are ap- proximately $12,000 and it is expected by June 30, 1981 that $17,000 will have been collected. Presently, the boating program is approximately 50% self-supporting. The Police Department has requested $21,000 for patrol salaries next year, however, our department has asked for some alternatives for enforcement hours. In an effort to make this program self-supporting, staff has considered raising the boat permit fees. This alternative is not recommended based on information from the Department of Boating and Waterways that our fees are among the highest in the state. We believe that any increase in fees will further reduce the number of boat users at the lagoon. Since two-thirds of the cost of the program is made up of patrol officer salaries, the Police Department was asked to provide some enforcement service alternatives (see attached). The Police Department's recommendation is that seven day, 12 hour coverage be provided from May 1, 1981 to October 1, 1981 at a cost of $21,000. The Parks and Recreation Department recommends that the police coverage be reduced to five days a week, eight hours a day for a cost of $11,000. The two days when lagoon patrol would not be provided would be during the middle of the week when lagoon use is not so heavy. Holidays and weekends would have police patrol. This reduced level of service would make this program self-supporting. The alternative to provide only part-time/on-call police coverage is not recommended because there are times when an on-site patrol officer is necessary. COMMENTS During heavy use times, between May and October, there may be as many as 80 boats at the lagoon on a weekend day or holiday. The police function is mainly prevention of potential safety problems Last season, three arrests were made (two drunks and one stolen car suspect). Seventeen citations were issued. Approximately half of the citations were for negligence and half for faulty or missing equipment. It is unknown how many warnings or boat inspections were actually given, but these are a large part of the patrol officer's duties. DLB:MDL:kap cc: Bill Baldwin Police Chief Attachment MEMORANDUM TO- David Bradstreet, Director TI 1 j-n j_ •Parks and Recreatzon FROM: Gene R. Kellogg, Captain Police Department SUBJECT: Lagoon Enforcement Program The police department is currently planning coverage for this years Lagoon Enforcement Program scheduled to begin May 1st. There are three basic levels of service that can be provided by the police department. Those levels of service are; 1. Full coverage from 0800 Hrs. to 2000 Hrs. seven days a week using two full time officers with overlaping shifts. 2. Partial coverage from 1200 Hrs. to 2200 Hrs. five days a week using one full time officer. 3. Coverage on a part time / on call basis using a beat officer to respond to calls as needed. It is the police departments recommendation that full coverage be provided seven days a week. While this coverage is the most costly of the three alternatives, it is also the most beneficial coverage in terms of safety and liability to both the citizens using the lagoon and the City of Carlsbad. Gene R. Kellogg, Captain STATE OF CALIFORNIA—RESOURCES AGENCY EDMUND G. BROWN JR., Governor DEPARTMENT OF BOATING AND WATERWAYS 1629 S STREET SACRAMENTO, CALIFORNIA 95814 (916) 445-6281 April 2, 1981 Mr. Frank Aleshire, City Manager City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Dear Mr. Aleshire: Thank you for responding to our questions concerning the Snug Harbor facility. We are somewhat confused concerning the contractual relationship between the City and Dr. Sarkaria. If the property at Snug Harbor is owned in fee title by Dr. Sarkaria, it would appear that he would not be bound to provide the City any revenues, unless, of course, he has a contractual obligation to do so. If Dr. Sarkaria has entered into agreement with the City (whereby a dollar from each launching fee is remitted), and as a precondition to a City permit (e.g. business or concession license) Dr. Sarkaria agrees to require proof of insurance, then it appears that the insurance require- ment is, indeed, imposed by the City. We are still unable to determine why Dr. Sarkaria would benefit from a boating liability policy that names the City — not Snug Harbor — as an additional insured. Our experience with private operators or concessionaires operating launch- ing facilities is quite extensive. We know of no other operators in the State who were either advised to require, or who were required by their underwriter, to enforce a proof of insurance for boating liability by patrons who use their facility. The following may provide clarification of our position: 1. The City may not adopt an ordinance requiring proof of insurance, etc.,as a precondition to the use of Agua Hedionda Lagoon. 2. If the sole launching facility available to the public is under contract with the City, the City may not require the owner or operator of the facility to invoke a proof of insurance require- ment on its patrons as a precondition to launching. Mr. Frank Aleshire -2- April 2, 1981 3. Under no circumstances may a peace officer, deputy, warden, public officer, safety officer, ranger, etc., empowered to enforce provi- sions of local ordinances, require proof of insurance when using the waters of the State, nor make an arrest or issue citations to persons using the waters not having insurance. As mentioned in our previous correspondence, the insurance requirement imposed by the launching facility operator is an extraneous issue. In the event the City repeals this requirement and Dr. Sarkaria continues to impose such a precondition, we will turn this issue over to the Depart- ment of Justice for investigation and/or litigation as appropriate. Per our agreement, we will wait until April 15, 1981 before taking any legal action in regard to the City ordinance. Please advise us of the decisions made at your April 7th meeting. We appreciate your consideration and attention to this ilnportant issue, Since MOOREJ Chief Operations Division Phone: (916) 445-2427 cc: Vince Biondo, City of Carlsbad Bill Cunningham, A. G.'s office Mr. Ledford, Assemblyman Frazee's office Dr. Sarkaria