Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
CC_2020-01-31_&_02-01_WorkshopMinutes
NOTICE OF SPECIAL MEETING ATASCADERO CITY COUNCIL Friday, January 31, 2020, 6:00 P.M. Saturday, February 1, 2020, 9:00 A.M. City Hall — Council Chambers 6500 Palma Avenue, Atascadero (Enter on Lewis Avenue) Workshop - Mid -Cycle Update MINUTES FRIDAY, JANUARY 31, 2020, 6:00 P.M. Mayor Moreno called the meeting to order at 6:00 p.m. ROLL CALL: Present: Council Members Fonzi, Funk, Newsom, Mayor Pro Tem Bourbeau and Mayor Moreno Absent: None Staff Present: City Manager Rachelle Rickard, Administrative Services Director Jeri Rangel, Community Development Director Phil Dunsmore, Public Works Director Nick DeBar, Police Chief Jerel Haley, Fire Chief Casey Bryson, Deputy City Manager/City Clerk Lara Christensen and Deputy City Manager Terrie Banish COMMUNITY FORUM: The following persons spoke during public comment: None. Mayor Moreno closed the COMMUNITY FORUM period. COUNCIL WORKSHOP — Mid -Cycle Update 1. Welcome and Introductions After brief introductions of those in the room, City Manager Rickard outlined the goals of the workshop and noted that the agenda would be rearranged slightly to allow a conference call Atascadero City Council Special Meeting January 31, 2020 & February 1, 2020 Page 1 of 5 with Tim McLarney, True North Research, to discuss the topline results of the ballot measure feasibility survey as part of Item #3, Action Plan Review, and he was only available from 6:15 p.m. to 6:45 p.m. 2. 2019 Strategic Planning Process Overview and discussion of 2019 Strategic Planning process Chief Haley led the Council through an exercise to remind everyone of the identity and culture of Atascadero first identified in the 10 -year vision in 2014 (Exhibits A and B) and went through a brief overview of the 2019 Strategic Planning process. 3. Action Plan Review Review and discuss the 2019-2021 Action Plan City Manager Rickard noted that one of the three Strategic Priorities identified by the City Council was to Foster Financial Sustainability. She then briefed the Council on the ballot measure feasibility survey, noting that the consultant would be presenting in-depth to the Council at the March 24 Meeting. Via conference call, Tim McLarney of True North Research reviewed the topline results of the survey (Exhibit C) and answered questions from the Council. 2. 2019 Strategic Planning Process (Cont.) Overview and discussion of 2019 Strategic Planning process Following review of the ballot measure feasibility survey topline results, the Council, led by Chief Haley, resumed discussion on the 2019 Strategic Planning process. COMMUNITY FORUM: The following persons spoke during public comment: Victoria Carranza, Zoe Zappas, Tori Keen and Greg Cobarr. Mayor Moreno closed the COMMUNITY FORUM period. Mayor Moreno recessed the meeting at 8:07 p.m. Mayor Moreno reconvened the meeting with all present at 8:21 p.m. 3. Action Plan Review (Cont.) Review and discuss the 2019-2021 Action Plan City Manager Rickard and the Department Heads presented the 2019-2021 Action Plan Update and answered questions from the City Council. ADJOURNMENT: Mayor Moreno adjourned the meeting at 9:21 p.m. to Saturday, February 1, 2020, at 9:00 a.m. to continue the Mid -Cycle Update Workshop. 7 Atascadero City Council Special Meeting January 31, 2020 & February 1, 2020 Page 2 of 5 SATURDAY. FEBRUARY 1, 2020,9:00 A.M. n Mayor Moreno called the meeting to order at 9:04 a.m. ROLL CALL: Present: Council Members Fonzi, Funk, Newsom, Mayor Pro Tem Bourbeau and Mayor Moreno Absent: None Staff Present: City Manager Rachelle Rickard, Administrative Services Director Jeri Rangel, Community Development Director Phil Dunsmore, Public Works Director Nick DeBar, Police Chief Jerel Haley, Fire Chief Casey Bryson, Deputy City Manager/City Clerk Lara Christensen and Deputy City Manager Terrie Banish COMMUNITY FORUM: The following persons spoke during public comment: None Mayor Moreno closed the COMMUNITY FORUM period. n COUNCIL WORKSHOP — Mid -Cycle Update 1. Decision Criteria Review and discussion of the decision-making criteria adopted as part of the 2019-2021 Action Plan Chief Haley led the Council through an exercise on perspective and consensus. He then reminded City Council of the Decision Criteria and Strategic Priorities adopted as part of the 2019-2021 Action Plan. 2. Council Topics Broad discussion and general Council direction to staff on the topics listed below to potentially bring forward to Council for future discussion: a. Chamber of Commerce contract The City Council, along with staff and Chamber of Commerce President & CEO Emily Reneau, discussed the scope of work, term and compensation of the Chamber contract. Mayor Moreno recessed the meeting at 10:33 a.m. Mayor Moreno reconvened the meeting with all present at 10:42 a.m. n b. Role/function of the Design Review Committee The City Council discussed the role and function of the DRC, reviewing the intent and purpose of the DRC and how the Committee can be more effective. Atascadero City Council Special Meeting January 31, 2020 & February 1, 2020 Page 3 of 5 c. Blighted Properties The City Council discussed ways to address blighted, vacant, and non -conforming n commercial properties in key development areas in the City beginning with addressing l l these types of properties in the downtown area. Mayor Moreno recessed the meeting at 12:10 p.m. Mayor Moreno reconvened the meeting with all present at 12:23 p.m. d. Downtown Infrastructure Enhancement Plan The City Council reviewed updated plans. Public Works Director DeBar reported that the plans would go out for additional public review and input over the next couple of months. e. Disposition of East Mall properties City Manager Rickard gave a brief update on the properties and received direction from Council to address potential use and/or disposition of these properties. f. Shopping Cart Ordinance Chief Haley briefed the City Council on a potential ordinance to bring back to the City Council at a future date. g. Community Facilities District 2005-1 n City Manager Rickard removed this item from the agenda and noted that staff would bring l this back to Council for review and discussion at a later date. h. Cannabis City Manager Rickard provided Cannabis staff reports from 2017 (Exhibit D) gave a brief review on the City Council's 2017 decision regarding allowable commercial cannabis uses in the City and received direction from the City Council on what type of information to bring back to the City Council for further discussion at a future Council Meeting. i. Vaping The City Council discussed the new Federal laws impacting the use and sale of vaping/ e -cigarette products by youth in the community and how those new regulations partner with the City's Smoking Ordinance. 3. Other Council Topics After discussion, City Manager Rickard inquired as to whether there were other topics to be identified, related to the Strategic Priorities, and no additional topics were brought forward by the City Council. 7 In closing, Mayor Moreno thanked everyone for attending. Il JI Atascadero City Council Special Meeting January 31, 2020 & February 1, 2020 Page 4 of 5 ADJOURNMENT: Mayor Moreno adjourned the meeting at 2:21 p.m. to the next Regular Session on Tuesday, February 11, 2020. MI RA v /ASC' -.. City Manager -1 City Clerk The following exhibits are available for review in the City Clerk's office: • Exhibit A— 2014 ATascadero City Council Long -Term Goals • Exhibit 8 —Word Cloud sheet for Atascadero • Exhibit C — Revenue Measure Feasibility Survey Topline Results • Exhibit D — Cannabis staff reports from 2017 APPROVED: February 11, 2020 Atascadero City Council Special Meeting January 31, 2020 & February 1, 2020 Page 5of5 City Council Minutes Exhibit A Date:_'L;ir..� i ,c iii —r— Atascadero City Council Long -Term Goals • We will have thriving and healthy economic activity ■ We will have tourists but are not a tourist town • We will have plentiful local shopping opportunities • We will embrace and value our history • We will keep our community charm • We will have vibrant recreational opportunities for citizens and tourists alike • We will have sound and reliable infrastructure in place • We are and will remain an attractive place to live (eclectic is attractive) • We are and will remain proud to be Atascadero • We will maintain our open space and rural character • We will have a strong, common, driving vision for the future • We will always embrace our natural beauty • We will have adequate water ■ We are and always will be a safe community • We will retain our small town friendliness and feel • We will have an attractive and professional commercial corridor ■ We will have popular annual events that are important to our sense of community and economic health City Council Minutes Exhibit B Date:: L.. tow.get nfriends 4-5 natural space 'D environment Q; �S Close ❑ �..� .x 0 c ieelingarea Choi S Central r ��ve afee - trails Lake: cr park ci Y quiet co�� lake Famil MESS hills trees !arige �ev .+ W know �* ents. warr7a `� cu neighbors t 'df4; 'r a tri - r ..Cik H: wr friend 7� mmCU unit Beautiful +...0 0 � = al ,{�: �... _ openu�et �.ifea�l�'r c ocean :. scenery CflaSt °`-- L � � _ et[ P kid � �ot5 small kids �tiir•i�es _.r: � (� �llksng rc,+ . �� 3, u VWW5 U yes closet 2 downtown M qpm Location 0) eo eP Or pew �TRUENORTH � k E 5 E A R C H City Council Minutes Exhibit C Date: a City of Atascadero Revenue Measure Feasibility Survey Final Toplines (n=787) January 24, 2020 Hi, may I please speak to ------ My name is _____ and I'm calling from TNR, an independent public opinion research firm. We're conducting a survey of voters about important issues in the City of Atascadero (Uh-TASK-uh-❑AIR-0h) and I'd like to get your opinions. If needed: This is a survey about important issues in your community. I'm NOT trying to sell anything and I won't ask for a donation. If needed. The survey should take about 12 minutes to complete. If needed: If now is not a convenient time, can you let me know a better time so I can call back? if needed: Your answers will be confidential. The City will be provided with a summary of all survey responses, not individual responses. If the person asks why you need to speak to the listed person or if they ask to participate instead, explain. For statistical purposes, at this time the survey must only be completed by this particular individual. If the person says they are an elected official or is somehow associated with the survey, politely explain that this survey is designed to measure the opinions of those not closely associated with the study, thank them for their time, and terminate the interview. Section 2.- Quality of Life & City Services I'd like to begin by asking you a few questions about what it is like to live in Atascadero. Q1 How long have you lived in the City of Atascadero? 1 Less than 1 year 2% 2 T to 4 years 17% 3 5 to 9 years 18% 4 10 to 14 years 13% 5 15 years or longer 509 99 Prefer not to answer 0% Q2 How would you rate the overall quality of life in Atascadero? Would you say it is excellent, good, fair, poor or very poor? 1 Excellent 17% 2 Good 64% 3 Fair 16% 4 Poor 1% 5 Very Poor 1% 98 Not sure 0% 99 Prefer not to answer 0% True North Research, Inc. p 2020 Page I City of Atascadero Survey January 2020 Q3 If the city government could change one thing to make Atascadero a better place to live now and in the future, what change would you like to see? Verbatim responses recorded and later grouped into categories shown below. Address homeless issue 21% improve, maintain infrastructure, streets, roads 19% improve shopping, dining opportunities 17% Not sure, cannot think of anything 9% lmprove public safety, reduce crime, drugs, provide more police presence 8% Improve economy, jobs 8% Improve downtown area 7% Provide affordable housing 6% Improve parks, recreation areas 6% Add bike, walking paths 6% Provide more community events, activities for all ages 5% Reduce taxes, fees 3% Reduce traffic 2% Beautify city, landscaping 2% Improve environmental efforts 2% Reduce, limit growth 2% Enforce City codes 2% Improve government, more transparency 2% No changes needed / Everything is fine 2% Q4 Generally speaking, are you satisfied or dissatisfied with the job the City of Atascadero is doing to provide city services? Get answer, then ask: Would that be very (satisfied/dissatisfied) or somewhat (satisfied/dissatisfied)? 1 Very satisfied 19% 2 Somewhat satisfied 579 3 Somewhat dissatisfied 12% 4 Very dissatisfied 6% 98 Not sure 5% 99 Prefer not to answer T% True North Research, rnc. © 2020 Page 2 City of Atascadero Survey January 2020 BallotSection 3. Initial Later this year, voters in Atascadero may be asked to vote on a local ballot measure. Let me read you a summary of the measure. To provide funding for general city services in the City of Atascadero, such as: • Police and crime prevention • Fire protection, paramedics, and 9-1-1 emergency response • Maintenance of parks, public facilities and infrastructure • And recreation, community services, and other city services Q5 shall an ordinance establishing a one -cent sales tax be adopted, providing approximately 5 million dollars annually for city services until ended by voters, with annual independent audits and all money locally controlled? If the election were held today, would you vote yes or no on this measure? Get answer, then ask: Would that be definite) (es/no) or robabl (yes/no)? 1 Definitely yes 31% Skip to Q7 2 Probably yes 35% Skip to Q7 3 Probably no 12% Ask Q6 4 Definitely no 14% Ask Q6 98 Not sure 7% Ask Q6 99 Prefer not to answer 0% Skip to Q7 Is there a particular reason why you do not support or are unsure about the measure I Q6 just described? If yes, ask: Please briefly describe your reason? Verbatim responses recorded and later grouped into categories shown below. Taxes already too high 36% Money is misspent, mismanaged 24% Need more information 22% Other higher priorities in community 13% Do not trust City, government 10% City has enough money 8% It will drive people away from purchasing in 4% Cit Other ways to be funded 3% Measure too expensive 2% Mentioned past measure 2% True North Research, Inc. t 2020 ?age 3 City of Atascadero Survey January 2020 Section 4: Services been discussing. The measure we've been discussing will provide funding for a variety of services in Supporters of the measure say: Do you think this is a very convincing, somewhat your community. Q7 If the measure passes, would you favor or oppose using some of the money to: ------ or do you not have an opinion? Get answer, if favor or oppose, thea ask: Would that be –In U strongly (favor/oppose) or somewhat (favor/o ose)? .. 3 O1 0 bN o y v 7• V 4J O W C 3 Randomize ` b ,y m b O ,y a p O ` a O u0 L td d m15 N V1 N N d ±✓ Provide police services, including crime a There will be a clear system of accountability A revention and investigations 49% 31% 7% 7% 3% 3% B Provide quick responses to 9-1-1 emergencies 60% 26% 5% 3% 4916 2% 12% Provide fire protection and paramedic 2% money is spent properly. C 58% 28% 5% 4% 3% 2% services Retrofit the City's 70 -year-old fire station so D that it is earthquake safe and can operate in 45% 36% 8% 6% 4% 2% an emergency Repair and maintain public facilities and E infrastructure 56% 29% 5% 4% 3% 2% F Keep public areas clean and free of graffiti 48% 35% 7% 5% 3% 2% Maintain parks and recreation facilities C including courts, fields, and playgrounds 47% 36% 8% 4% 3% 2% Provide recreation programs and community H 38% 36% 11% 7% 6% 2% services I Maintain and enhance zoo exhibits 23% 37% 15% 15% 8% 2% Attracting more retail stores, restaurants and entertainment options to our city 47% 28% 11 %8% L 5% 1 2% Section 3: Positive Arguments What I'd like to do now is tell you what some people are saying about the measure we've —1 been discussing. Supporters of the measure say: Do you think this is a very convincing, somewhat Q8 _____. convincing, or not at all convincing reason to SUPPORT the measure? Vt –In U _ In ¢V .. 3 o a`m Randomize. Split sample J1/J2d ¢ 7 u N 0 z 0 d m15 a b a There will be a clear system of accountability including independent audits and annual A reports to the community to ensure that the 34% 31% 17% 12% 3% 2% money is spent properly. True North Research, fnc. 0 2020 Page 4 City of Atascadero Survey January 2020 True North Research, Inc. 0 2020 Page 5 All money raised by the measure will be used B to fund essential services and facilities here in Atascadero. By law, it can't be taken away 37% 31% 16% 10% 3% 3% by the State. Fast emergency response times for 9-1-1 calls are critical for saving lives. This measure will C ensure that we have enough police officers, 42% 33% 14% 6% 3% 3% firefighters, dispatchers, and paramedics to respond quickly to 9-1-1 emergencies. This measure will cost just 1 dollar for every D 100 dollars purchased - and food, medicine and many other essential items are excluded 31% 31 22% 9% 4% 3% from the tax. The funding raised by this measure will allow the City to keep up with basic repairs and E maintenance to public facilities and infrastructure. If we don't take care of it now, 3795 35% 1 `�% 7% 2% 3% it will be a lot more expensive to repair in the future. By keeping our city safe, clean and well - F maintained, this measure will help protect our 30% 389 1 9% 8% 2% 3/ property values and keep Atascadero a special place to live. The City has done a good job keeping costs down. Over the past 10 years it has deferred maintenance projects, reduced staff, and cut G back on basic services. There is no more 29% 34% 20% 11% 4% 3% room to cut if we want to keep our community a safe, clean place to live. We need to support this measure. Wildland fires are getting larger, faster, and deadlier. We need to make sure we have the resources and staff to respond quickly to 43% 30% 15% 7% 3% 3% wildfire emergencies when they happen. This measure will provide the funding needed to avoid deep cuts in all service areas, including police, fire protection, 9-1-1 I emergency response times, the maintenance 34% 31% 19% 1 1 % 3% 3% of parks and public facilities, as well as programs for youth. We have fewer police officers today than we did 10 years ago - meanwhile our population J1 and the number of 9-1-1 emergency calls 36% 39% 13% 8% 2% 295 continues to grow. We need more police officers to keep our community safe. The City of Atascadero has just three police officers on duty at a time, which is less than J2 half the number of police officers that 44% 30% 1 1% 11% 2% 2% experts agree is needed to keep a community of our size safe. This measure will improve our public safety. True North Research, Inc. 0 2020 Page 5 City of Atascadero Survey January 2020 Section 6. Interim Ballot Test Sometimes people change their mind about a measure once they have more information about it. Now that you have heard a bit more about the measure, let me read you a summary of it again. Q1 a To provide funding for general city services in the City of Atascadero, such as: • Police and crime prevention M ■ Fire protection, paramedics, and 9-1-1 emergency response _az • Maintenance of parks, public facilities and infrastructure IR And recreation, community services, and other city services Q9 Randomize > > shall an ordinance establishing a one -cent sales tax be adopted, providing a >-@ approximately 5 million dollars annually for city services until ended by voters, with ° annual independent audits and all money locally controlled? If the election were held today, would you vote yes or no on this measure? Get answer, 0= then ask: Would that be definite) {yes/no) or probabl (yes/no)? o= 1 definitely yes 36% 2 Probably yes 32% U 3 Probably no 12% 4 Definitely no 12% 98 Not sure 7% A 99 Prefer not to answer 1 % NegativeSection 7: Next, let me tell you what opponents of the measure are saying. Opponents of the measure say: Do you think this is a very convincing, somewhat Q1 a ------ convincing, or not at all convincing reason to OPPOSE the measure? M -0a s ._ _az > S a 3 Randomize > > > a >-@ ° 0= o= a m Z R U V) U U a` Taxes are already too high - we can't afford A another tax increase. This is especially true 33% 30% 23% 9% 30/1) 2% for seniors and others on fixed incomes. City employees are making too much money in salary, pensions and benefits - that's the 6 problem. The City needs to tighten its belt 18% 25% 27% 19% 8% 3% before asking residents to pay more taxes. We can't trust the City with our tax dollars. C They will mismanage the money. 18% 27% 28% 19% 6% 3% There are no guarantees on how funds will be D spent, which means the City can divert the 32% 35% 17% 9% 6% 2% money to pet projects. True North Research, Inc. ® 2020 Page 6 City of Atascadero Survey January 2020 Only odd clusters receive item E. Now that you have heard a bit more about the measure, let me read you a summary of it one This tax will last forever. There is no To provide funding for general city services in the City of Atascadero, such as: • Police and crime prevention E expiration date. 30% 24%30% 9% 6% 1 BallotSection 8: Final Now that you have heard a bit more about the measure, let me read you a summary of it one more time. To provide funding for general city services in the City of Atascadero, such as: • Police and crime prevention • Fire protection, paramedics, and 9-1-1 emergency response • Maintenance of parks, public facilities and infrastructure • And recreation, community services, and other city services Q11 shall an ordinance establishing a one -cent sales tax be adopted, providing approximately S million dollars annually for city services until ended by voters, with annual independent audits and all money locally controlled? If the election were held today, would you vote yes or no on this measure? Get answer, thea ask: Would that be definite) (es/no) or robabl (es/no)? 1 Definitely yes 33% Skip to Q13 2 Probably yes 32% Skip to Q13 3 Probably no 13% Ask Q12 4 Definitely no 12% Ask Q12 98 Not sure 8% Ask Q12 99 Prefer not to answer 1% Skip to Q73 What if the measure I just described raised the sales tax by a lower amount: one-half Q12 cent? Would you vote yes or no on the measure? Get answer, then ask: Would that be definitely (yes/no) or probably (yes/no)? Def, prob yes @ one -cent (Q11) 65% 1 Definitely yes 1 % 2 Probably yes 5% 3 Probably no 10% 4 Definitely no 9% 98 Not sure 9% 99 Prefer not to answer 1 % True North Research, Inc. © 2020 Page 7 City of Atascadero Survey January 2020 Section 9: Background i Demographics Thank you so much for your participation. I have just few background questions far statistical purposes. Q13 The City of Atascadero operates the Charles Paddock zoo, which is the Central Coast's only accredited zoo. In a typical year, the City spends about 500 thousand dollars of its general fund budget to operate and maintain the zoo. In your opinion, should the City keep the zoo open or should the zoo be closed to save money? 1 Keep the zoo open 68% 2 Close the zoo to save money 20% 99 Prefer not to answer 11% Q14 In your opinion, has the City of Atascadero done an excellent, good, fair, poor or very poor job of managing its financial resources? I Excellent 4% 2 Good 31% 3 Fair 25% 4 Poor 9% 5 Very poor 4% 98 Not Sure 24% 99 Prefer not to answer 2% Q15 ❑o you have children under the age of 18 living in your household? 1 Yes 29% 2 No 68% 99 Prefer not to answer 3% Those are all of the questions that I have for you. Thanks so much for participating in this important survey. Post -interview 51 Gender 1 Male 44% 2 Female 49% 3 Prefer not to answer 7% True North Research, Inc. C 2020 Page 8 City of Atascadero Survey January 2020 S2 Party 1 Democrat 33% 2 Republican 40% 3 Other 8% 4 DTS 20% S3 Age on Voter File 1 18 to 29 12% 2 30 to 39 17% 3 40 to 49 14% 4 50 to 64 26% 5 65 or older 32% S4 Registration Date 1 Since Nov 2016 13% 2 Jun 2010 to before Nov 2016 17% 3 Jun 2004 to before Jun 2010 18% 4 Before June 2004 52% S5 Household Party Type 1 Single Dem 16% 2 Dual Dem 10% 3 Single Rep 13% 4 Dual Rep 16% 5 Single Other 13% 6 Dual Other 6% 7 Dem & Rep 5% 8 Dem & Other 8% 9 Rep & Other 11% 0 Mixed (Dem + Rep + Other) 2% S6 Homeowner on Voter File 1 Yes 64% 2 No 36% True North Research, Inc. @ 2020 Page 9 City of Atascadero Survey January 2020 57 Likely to Vote by Mail I Yes 81% 2 No 19% 58 Likely March 2020 Voter 1 Yes 83% 2 No 17% 59 Likely November 2020 Voter 1 Yes, natural 95% 2 Yes, GOTV 5% True North Research, Inc. ® 2020 Page 10 City Council Minute Exhibit o Date: Atascadero City Council Staff Report - Community Development Department Results of the Proposition 64 Community Outreach RECOMMENDATION: Council provide direction to staff towards next steps in the process to update Title 0, Planning and Zoning, and any additional ordinances in response to Proposition 64. REPORT -IN -BRIEF: Proposition 64, passed by voters on November 8, 2016, allows for the State to issue licenses for commercial non-medical and medical marijuana related industries including retail sales, commercial cultivation, testing and manufacturing. It also allows for the personal cultivation and use of marijuana for adults 21 years of age or older. In addition to licensing, the State will collect taxes including excise taxes, and sales taxes. Municipalities may elect to collect additional taxes on both medical and non-medical marijuana in addition to the State excise taxes. Excise taxes collected by municipalities may go to specific accounts or the general fund. Any new taxes proposed will need to be approved by voters residing in the City. To gather public input, City Staff held three (3) open house sessions in February and March 2017 to discuss cannabis and the concerns with crafting ordinances in response to Proposition 64, also known as the Adult Use of Marijuana Act (AUMA). Over 550 responds filled out the community questionnaire either in person or through our online source. The process was an excellent learning opportunity for both staff and community members. The City currently has three (3) ordinances in place that deal with public smoking and medical marijuana. Although the feedback heard at the City's outreach events was generally in favor of allowing cannabis based business, staff also heard concerns regarding Community image, crime, increased access to minors, and issues associated with driving under the influence and public use. Based on the feedback, existing laws, and the AUMA, City Council will need to provide City Staff direction on how to best proceed with municipal code amendments. ITEM NUMBER: C-1 DATE: 04!75117 DISCUSSION: Background: In 1996, California voters approved the Compassionate Use Act, de -criminalizing the cultivation, possession, and use of marijuana for medical purposes for both qualified patients and their primary caregivers. At the regular March 22, 2016 City Council hearing, the Council voted to adopt an ordinance that responded to State AB 243 (Medical Marijuana Regulation and Safety Act 1 MMRSA), continuing the City's prohibition on all medical marijuana facilities, including dispensaries and deliveries however allowing for the personal cultivation of marijuana, for qualified patients. Qualified patients are allowed up to six (6) mature and twelve (12) immature plants per residence or up to nine (9) mature or fifteen (15) immature plants per property if there are multiple licensed patients. Since this action, the voters of the State of California approved Proposition 64, the Adult Use of Marijuana Act (AVMA) on November 8, 2016. Within the City of Atascadero, Proposition 64 garnered 55.6% in favor of legalization of recreational marijuana (Cannabis) while 44.3% opposed the proposition. Proposition 64 legalized the use of non-medical, recreational cannabis for those persons 21 years of age or older and established a new State Agency (Bureau of Marijuana Control) that will regulate and license the marijuana industry, including the existing medical marijuana industry. The State's licensing bureau is now known as CalCannabis Cultivation licensing. They are a state licensing agency under the California Department of Food and Agriculture. In the absence of a local ordinance either banning or regulating specific non-medical recreational marijuana activity, the State may issue a license to businesses that meet standards established for commercial retail operations, cultivation, and testing facilities, etc. The agency intends to be able to issue these licenses beginning January 1, 2018 Reliance on land use definitions, use tables, and the existing medical marijuana ordinance is no longer sufficient to regulate business associated with cannabis. Prior to January 1, 2018, the City must have amendments in place in the Atascadero Municipal Code (AMC) to respond to Proposition 64. City Staff has formulated a process to inform residents and the Council over several phases to allow a logical and thoughtful process to build local consensus towards a local ordinance on this topic. • Phase 1 -- Gathering public feedback and information for City dissemination. This portion of the phase has been complete. • Phase 2 — Direction from the City Council on the formulation of local ordinances. Phase 2 of this process will culminate with this Study Session. ■ Phase 3 — Based on direction from the Council, an additional study session, potentially with the Planning Commission, to review proposed ITEM NUMBER: C-1 DATE: 04/25117 ordinances and solicit feedback from the Council, and residents on any potential changes that need to be completed. ■ Phase 4 would culminate with the required public hearings, including Planning Commission, and City Council. To gather a better understanding of local concerns and provide information for the City Council, City Staff held a series of public outreach meetings in February and March , in conjunction with an online questionnaire, to solicit input and feedback on the issue of recreational cannabis retail sales, personal cultivation, commercial cultivation, and public smoking of both marijuana and tobacco products. Analysis: The first section of the report focuses on the existing City Ordinances and the basic rules of the AUMA (Prop 64). The second section focuses public outreach that was completed and a summary of those efforts. The 3rd section will discuss what options that City has to adopt "local ordinances" pertaining to both personal and commercial operations. Section 1— Existina Citv Ordinances & the Nuts and Bolts of the AUMA This section of focuses on existing City Ordinances pertaining to medical marijuana and public smoking. It will also break down the Adult Use of Marijuana (AUMA) to better understand options the City Council has to move forward based on the extent of the law and public feedback. The City has codified two (2) ordinances in relation to medical marijuana and public smoking. Those ordinances are included as Attachment 2 and Attachment 3. The City's medical marijuana allows the following: • All cultivation for medical marijuana is for personal use only. • The ordinance prohibits all retail/dispensary sales, commercial cultivation, wholesale distribution, testing facilities, manufacturing of medical marijuana. • All plants must be grown indoors unless completely screened from view of other properties, and the public. • Any electrical work, construction, or conversion of living space for cultivation will require a construction permit. ■ Any structure or site utilized for marijuana cultivation shall be consistent with the City of Atascadero Municipal code (i.e. you may not build or use an unpermitted structure for the purpose of cultivation). • Up to six (6) mature or twelve (12) immature plants per person. ■ Up to nine (9) mature or fifteen (15) immature plants per property if there are multiple licensed patients. ■ Medical marijuana deliveries or transport to a qualified patient or person with an identification card, as those terms are defined in Health and Safety Code Section 11362.7, for whom he or she is the primary caregiver within the meaning of Health and Safety Code Sections 11362.5 and 11362.7(d) is allowed. ITEM NUMBER: C-1 DATE: 04/25117 Additionally, the City currently has two (2) smoking ordinances codified. The first deals with prohibiting smoking in certain public places and the second was codified in and updated in 2013 to prohibit smoking in Public Parks and the Sunken Gardens. Current City ordinances are less restrictive than the State of California and these ordinances should be updated as part of the Proposition 64 process. The chart below compares City and State smoking prohibitions. AUMA — Personal Use On November 8, 2016, the voters of California passed the Adult Use of Marijuana Act (AMUA). Certain portions of the voter initiative went into effect immediately including the following for personal consumption: • the ability to use non-medical marijuana for person 21 years of age or older; • the ability to possess, process, transport, purchase, obtain, or give away 28.5 grams (g) of non - concentrated, non-medical marijuana or 8 grams (g) of concentrated marijuana products (i.e. wax, oil, hash, dabs); AMUA Definitions: What does the State consider a residence in the AUMA? A residence is defined as a single family home, manufactured or mobile home, an apartment unit, or any other dwelling type structure. ■ the ability to smoke, ingest, etc. marijuana or marijuana products; • the ability to possess, plant, cultivate, harvest, dry or process up to six (6) plants per residence for personal use. These personal use regulations went into effect as of November 9, 2016. At this point, the ability to legally purchase marijuana from a state licensed facility does not exist. Additionally, the AUMA has set up additional restrictions that have also gone into effect as of November 9, 2016. These restrictions include the following: ■ No smoking or consuming marijuana products in public places; ■ No smoking where smoking tobacco is prohibited; Smoking Prohibited Smoking Prohibited—T-- by The City of by State Atascadero All Enclosed indoor X Work Places Within 20 -feet of a x "public building" (i.e. City hall, Skate Park Within All Public X X Buildings Within All Public Parks x Outdoor Recreation x Areas Sidewalks contiguous x to Parks / Zoo and 100 - feet of Sunken Gardens AUMA — Personal Use On November 8, 2016, the voters of California passed the Adult Use of Marijuana Act (AMUA). Certain portions of the voter initiative went into effect immediately including the following for personal consumption: • the ability to use non-medical marijuana for person 21 years of age or older; • the ability to possess, process, transport, purchase, obtain, or give away 28.5 grams (g) of non - concentrated, non-medical marijuana or 8 grams (g) of concentrated marijuana products (i.e. wax, oil, hash, dabs); AMUA Definitions: What does the State consider a residence in the AUMA? A residence is defined as a single family home, manufactured or mobile home, an apartment unit, or any other dwelling type structure. ■ the ability to smoke, ingest, etc. marijuana or marijuana products; • the ability to possess, plant, cultivate, harvest, dry or process up to six (6) plants per residence for personal use. These personal use regulations went into effect as of November 9, 2016. At this point, the ability to legally purchase marijuana from a state licensed facility does not exist. Additionally, the AUMA has set up additional restrictions that have also gone into effect as of November 9, 2016. These restrictions include the following: ■ No smoking or consuming marijuana products in public places; ■ No smoking where smoking tobacco is prohibited; ITEM NUMBER: C-1 DATE: 04/25117 ■ No smoking within 1,000 feet of a school, day care center (including large/small family care facilities), or youth center unless it is within a private residence; • No smoking or ingestion in facilities that serve or sell alcohol, tobacco or the combination of the two; ■ No open possession of marijuana or marijuana products in an automobile; • No smoking in motor vehicles or boats (i.e. cars, bikes, and motorboats), • Property owners have the ability to restrict personal grows on their private property through rental agreements. AUMA - Commercial Activities As a part of the AUMA, the State is preparing the framework to establish 19 different types of commercial non-medical marijuana related licenses. The license types break down as follows: ■ 13 of these license deal with the commercial cultivation all dependent on the size of the operation, whether the operation is located indoors, outdoors, or with mixed operations; • 2 manufacturing licenses pertaining to non-volatile 1 volatile solvents used for processing; ■ 1 license for testing; • 1 license retail sales; ■ 1 license for wholesale distribution; • 1 license for what is considered a "microbusiness" (small retail and cultivation not exceeding 10,000 sf in size). All medical and non-medical marijuana businesses must have a State license in order to operate. The State anticipates issuing these licenses starting January 2018. These licenses are valid for one (1) year and may be renewed annually. A separate license is required for each business location. The State cannot issue licenses to applicants whose operations violate the provisions of any local ordinances or regulations. The AUMA includes a list of minimum requirements in order to issue licenses to businesses: • A license will not be issued to a business licensed as a retailer of alcoholic beverages or tobacco shop (i.e. smoke shops, headshops, liquor stores, etc.); ■ A license will not be issued to a business that is within 600 -feet of a school, daycare, center, or youth center (a municipality may adopt a larger radius); • A license will not be issued if the business violates any local ordinance or regulations in effect prior at the time or prior to license issuance; • Business does not meet minimum requirements to obtain a license issued by various state agencies. Additionally, AUMA allows for municipalities to outlaw delivery services to deliver to residents residing in a municipality. However, the AUMA is explicit that a municipality cannot ban delivery services from utilizing roads within a municipality to make a delivery to another jurisdiction (i.e. a delivery service based out of California Valley cannot be denied access to City roads to a client residing in Cayucos). ITEM NUMBER: C-1 DATE: 04/25/17 Taxation of Marijuana The AUMA lumps both medical and non-medical marijuana for the purposes of taxation and local excise taxes. To get a better understanding of taxation, the AUMA authorizes the State of California to collect the following excise taxes on medical and non-medical marijuana, • 15% excise tax on gross retail receipts for medical dispensaries and non-medical retail outlets; • $9.25 per dry weight ounce on marijuana flower excise tax for medical and non- medical cultivation; • $2.75 per dry weight ounce on marijuana leaves excise tax for medical and non- medical cultivation; • Sales tax to be collected on all non-medical retail sales. Personal cultivation of both medical and non-medical marijuana is exempt from cultivation taxes imposed by the State. The AVMA authorizes a local municipality the ability to impose additional excise taxes in addition to the State excises taxes. Those include.- • New Business licenses taxes for cultivation, dispensaries, retail sales, manufacturing, and delivery services; • Business regulatory fees to recover cost of implementing both medical and non- medical commercial operations. These additional taxes would require voter approval and would need 213 voter approval if the tax is utilized for a specific reason (i.e. law enforcement services 1 roads) versus a general tax that goes into the General Fund. Allocation of State Taxes The State Legislative Analysis estimates that additional tax revenue from the legalization of non-medical marijuana will range from the high hundreds of millions of dollars to over $1 billion dollars annually. The AUMA has allocated where those monies are to be expended. Any City or County that completely bans cultivation, including Percentage Allocation Law Enforcement Youth programs, Health Impacts substance abuse, 200 education etc 50% Enviornmental Clean Up & Remediation 20% ITEM NUMBER: C-1 DATE: 04/25/17 outdoor personal cultivation, retail sales, dispensary sales, etc. may not be eligible for the grant monies derived from ALIMA state excise tax collection. At this time the State is crafting final language on the allocation of granting funding and specific details are not available. Section 2 — AUMA Outreach City Staff hosted three (3) open houses to discuss AVMA regulations and listen to their concerns and thoughts. These open house sessions included City Staff listening to residents thoughts about the AVMA laws, and asking questions from a questionnaire in a one-on-one format. No formal presentation was given at any of the open houses sessions. The three open houses were well attended with approximately 25 people at each event. !n addition to the City's Open House sessions, City Staff elicited feedback from an online questionnaire. The questionnaire consisted of the same questions that were asked of participants at the open houses. The online survey was limited so that participants could only fill out a survey once, based on their computer or mobile device's IP (internet protocol) address. The questions included the following: I . ❑o you live in the City of Atascadero? 2. How do you feel about outdoor marijuana commercial cultivation for personal use on private property? 3. What are your thoughts on commercial cultivation/production for wholesale distribution? 4. How do you feel about the regulated retail sales of marijuana and marijuana products within the City? 5. What is your comfort level allowing marijuana testing facilities that test for pesticides, fertilizers, and drug levels of marijuana with no retail or wholesale public sales? 6. What do you think about allowing a manufacturing facility associated with marijuana products within the City? 7. What is your comfort level with deliveries of marijuana or related products to adults within the City? 8. What are your thoughts on smoking either tobacco or marijuana related products in public places? The City received over 556 responses, with over 84 percent of the respondents claiming to reside in the City. While this was not a statistically valid survey, a lot of good information, thoughts and concerns were shared with City staff. Those who attended the meetings where appreciative of the effort the City was making in addressing this topic overall. City Staff also received numerous comments from its social media pages on giving the ability to fill out the questionnaire online and providing an additional forum to voice comments, concerns, in an open, inviting format. ITEM NUMBER: C-1 DATE: 04/25117 In summary, those that supported commercial cannabis in the City were in favor of all forms of commercial activities, while those that did not support were generally opposed to all forms of commercial activity. Wordcloud on comments received from commercial cultivation }le ra brnc f i, s Cit itotivi#y provide = a iowad ,llc industrial make might C Support drugnelieva II" benefit need reason gravers � uLms """"'I water van rOWn business I� Zk idea Slln:i -i 9 revenue idea ■ smell plant � ir:,. $$ 9nin9 RN secure regulated think `� eoonom 1110 ^° H Y recreafienai � a .. clHea cNntfeal Mse G a re asEn mars uana �n>< .�.-°' Es y prnlzf 'MS wc-ass Within create r- oP "b"ityno►v (a 0 aweCU tax allow...owcommercial=l;�,,!", � o e m sm�ok�e+ ea l _ r3 likfimcm YYantkeep ■ different■ znne5 ^, Q Dollars l e" great CUltivationsolo '�'' crime 9� = good 09lllelel'CfHi i 3:money 9 u lurJL' limits communiyjnhs'a local r"Lri, ,::•I' :,i;,,::: ii 11 ,r1,11J1ny ' growing L Cc area rural] rcriJale rhildrery nett aIsa C Schools co CU ■Fri et Based on both the online and the open house questionnaires completed by attendees, almost 314 of the respondents were comfortable or in support of allowing the following within the City Limits: • Outdoor cultivation for personal use; • Commercial cultivation for wholesale distribution; • Testing facilities; • Manufacturing facilities; • Retail sales; • Deliveries. Respondents whom were generally not in favor of legalizing cannabis related commerce included the following comments- • Marijuana remains an illegal class I substance; • Generally a public safety risk; ■ Potential access issues with minors will be exacerbated; • Concerned that edible products will be marketed to youth ■ Smell and other appearance issues. • Concerned about overall impact on perception of Atascadero ITEM NUMBER: G-1 DATE: 04125197 • Changes to social status and availability of cannabis may induce greater use/abuse • Not legal federally • May induce crime due to cash and product storage Attachment 1 includes generalized responses tabulated for Council review, both in support and against responses. Section 3 — City Council Options To give the City Council an idea of the type of authority to allow or prohibit certain activities related to non-medical marijuana uses the following is a list of items the City cannot ban: • Persons 21 years of age older may possess, process, transport, purchase, obtain, or give away 28.5 grams (g) of non -concentrated, non-medical marijuana or 8 grams (g) of concentrated marijuana products; • Persons 21 years of age or older may smoke or ingest marijuana or marijuana related products in their residence; • The City may not prevent transportation of marijuana or marijuana related products on public roads in the City (includes all roads whether public or privately maintained, but have a dedicated right-of-way); • The City cannot prohibit the indoor cultivation of six (5) plants or less for personal use per residence (not per resident). A residence is defined as a single family home, second unit, apartment dwelling, or other similar dwelling unit. Currently the City has a medical marijuana ordinance that prohibits all commercial medical marijuana activities, but includes regulations for personal cultivation that does not match the AUMA's 8 plants. Additionally the City has a public smoking ban but does not define things such as "outdoor recreation" which may be too broad of a definition to regulate and includes ban on smoking in some public places that has not been updated since the State of California further restricted indoor smoking in the late 1990's and early 2000's. The AUMA is flexible to allow certain activities within the City. The City Council is encouraged to have an open discussion on directing Staff on how to proceed. The following is a summary of items that the City has an authority to allow, prohibit or regulate: ■ The City can choose to allow or bars deliveries to individuals or properties in the City for both medical and non-medical marijuana; • The City Council may define what is considered a "public place" in regards to smoking and consuming marijuana products. Is this visible from the street? Does this include private parking lots? Any ordinance crafted should define this. • The City can reasonably regulate indoor cultivations (i.e. requiring use permits or other approvals for indoor cultivation for personal use in multi -family zones,); • The City can allow, ban, or adopt reasonable regulations such as setbacks, screening requirements, etc. for outdoor cultivation for personal use on private property, ITEM NUMBER: C-1 DATE: 04/25117 ■ The City can allow with regulations or ban commercial cultivation of medical or non-medical marijuana; • The City can allow with regulations or ban retail sales and/or dispensaries of medical and non-medical marijuana; ■ The can allow with regulations, or ban testing facilities for marijuana; • The City can allow with regulations, or ban manufacturing facilities of either Type 1 or Type 2 marijuana or marijuana related products, • The City can allow, with regulation, or ban microbusiness related to medical and non-medical marijuana; • The City can amend its current tobacco regulations to further specify banning of smoking or ingesting of marijuana and marijuana related products and tobacco products in public places such as other City Parks or other areas as deemed appropriate. The following is a general summary of each of the topics that need direction to City staff, These items need to be addressed through new or amended ordinances. Staff has included a box list of tools that can be used to regulate these areas of the AUMA to address the concerns voiced in the public outreach, as well as, address supporters that wish the City implement the AUMA. These tools can be used in combination or stand alone. 1. Personal Cultivation — Indoors While personal cultivation cannot be banned, it can be reasonably regulated. The City may wish to regulate personal indoor cultivation to ensure the following- • Lighting, ventilation, and other building modifications that potentially support indoor personal grows are completed consistent with the California Building Code, ■ Ensure indoor grows are not concentrated in zones with higher residential populations (i.e. RMF -20 zones), where landlords may lack the vision to revise rental contracts explicitly prohibiting indoor cultivation, ■ Assist our police department with a data base of personal grows. Potential Tools Maintain ❑ Allow personal indoor cultivation in all residential zones for both medical and Status Quo non-medical cannabis. ❑ Ensure ordinance address modifications to residences that require building permits. ❑ Let property owners decide whether to prohibit personal indoor cultivation on rental properties. ❑ Review the number of plants permitted to match medical and non-medical cannabis for ease of enforcement. Reasonable ❑ Initial permitting process for consistency with the California Building Code. Regulations ❑ Allow personal indoor cultivation for a limited number of plants (more than 6) ❑ Regulations regarding definitions of "residence" in multi -family zones. (ie - not in a sleeping area, require each residence to have a resident.) ❑ Establish penalties for violations that should be used as a deterrent to breaking the maximum amount of plants allowed. ITEM NUMBER: C-1 DATE: 04/25/17 2. Outdoor marijuana cultivation for personal use on private property. Currently, the City allows outdoor personal cultivation of medical cannabis within City Limits, however the ordinance is written in a manner that does not provide any setbacks, location on the property, and only requires screening if a property contains multiple dwellings. Based on feedback from residents, the Council should take into consideration the following: ■ Some residents are concerned about the potential element for crime because of outdoor cannabis grows, even for personal use; • Ensure that some regulations are in place such as screening, location on a property etc.; • Potentially assist our police department in regulated outdoor personal grows with registration system. ■ Ensuring some level of property rights are maintained since this voter initiative has passed. Potential Tools Maintain ❑ Allow outdoor personal cultivation in all residential zones, and screened Status Quo only in the multi -family zones for both medical and non-medical cannabis. ❑ Ensure ordinance address modifications to residences that require building permits. ❑ Let property owners decide whether to prohibit personal outdoor cultivation on rental properties. ❑ Review the number of plants permitted to match medical and non-medical cannabis for ease of enforcement. Prohibit ❑ Prohibit all outdoor personal cultivation in all residential zones. Codification should be explicit and include residential uses in non-residential zones or non -conforming residential uses. Allow with ❑ Establish setbacks from property lines. Standards ❑ Ability for outdoor personal grows with a minimum lot size. ❑ Establish a distance that the outdoor personal grow can be located from a residence. The City's existing animal ordinance can be used as an example. This may include nearby residences. ❑ Have screening requirements. Regulate the types of fencing that may be utilized to ensure neighborhood compatibility. ❑ Establish a fee, through a study, requiring all personal outdoor grows register their grow with the City. These would be inspected for consistency with the ordinance and ensure consistency with the California Building Code - 13 Require an Administrative Use Permit with a reasonable fee, for all residences. 3. Commercial cultivation. Currently, the City prohibits all commercial cultivation for medical cannabis in all zones throughout the City. The existing ordinance does not address recreational cannabis cultivation. An ordinance would need to be in place prior to January 1, 2018 addressing commercial cultivation of non-medical cannabis. ITEM !NUMBER: C-1 DATE: 04/25117 Based on feedback received, as well as, Staff analysis, the Council should take into consideration the following: • The location of Commercial cultivation, if allowed, should be taken into consideration. This includes potentially allowing a commercial cultivation on larger residential lots, ag zones, industrial zones, certain commercial zones, etc. • Limiting the type of commercial cultivation, if allowed based on license types issued by the State. • Security of the commercial cultivation and how this may affect neighborhood compatibility. • Local taxation of commercial cultivation and the process to set up new fees, taxes, etc. and potential increase in City revenues. ■ Policing issues that may arise from commercial cultivation. • The potential for a new economic development tool. Potential Tools Maintain G7 Prohibit all commercial cultivation for both non-medical and medical Status Quo cannabis. Allow with ❑ Allow commercial cultivation, with a Major Conditional Use Permit (CUP) in Standards certain non-residential zones for indoor grows only. This would limit the types of cultivation to license holders to indoor or mixed light. The maximum size of an indoor grow is 22,000 sf. ❑ Allow commercial cultivation in certain non-residential zones for a mix of outdoor, with a Major CUP for a mix of both indoor and outdoor. ❑ Allow commercial cultivation in certain residential zones, based on size, for a mix of indoor 1 outdoor grows. This may also be limited to Certain sizes such as a maximum of 5,000 sf or utilizing the "microbusiness" license. A major CUP would be required. This may also be utilized for indoor cultivation in non-commercial zones. ❑ Establish a distance from schools, parks, youth centers beyond the 600 - foot radius. ❑ Establish a distance from another commercial cultivation operation. ❑ Establish setbacks for commercial cultivation. ❑ Establish minimum parcel sizes for commercial cultivation. ❑ Establish standards for parking. ❑ Establish fencing, lighting, and landscaping standards for ease of neighborhood policing. ❑ Establish appearance review standards and air filtration devices for buildings if indoor cultivation is permitted. ❑ Authorize a local excise taxes I fees for commercial cultivation. 4. Retail Sales of Cannabis 1 Medical Dispensaries Currently, the City prohibits all medical cannabis dispensaries (sales) in all zones throughout the City. The existing ordinance does not address recreational cannabis retail sales (brick and mortar locations). An ordinance would need to be in place prior to January 1, 2018 addressing the retail sales of non-medical cannabis. ITEM NUMBER: C-1 DATE: 04/25117 Based on feedback received, as well as, Staff analysis, the Council should take into consideration the following: + The location of retail sales, if allowed, should be taken into consideration. ■ Security of the retail sales and how this may affect neighborhood compatibility. ■ Local taxation of retail sales and the process to set up new fees, taxes, etc. and potential increase in City revenues. • Policing issues that may arise from retail sales. • The potential for a new economic development tool. Potential 'Tools Maintain ❑ Prohibit all commercial retail sales of non-medical cannabis and Status Quo dispensaries for medical cannabis. Allow with 0 Allow retail sales / dispensaries with a Major Conditional Use Permit (CUP) Standards in certain non-residential zones. ❑ Allow dispensaries, but not retail sales of non-medical cannabis with a Major Conditional Use Permit (CUP) in certain non-residential zones. ❑ Establish a distance from schools, parks, youth centers beyond the 600 - foot radius established by the State. ❑ Establish a distance from another retail sales operation. ❑ Establish setbacks for sales. ❑ Establish standards for parking. ❑ Establish fencing, lighting, and landscaping standards for ease of neighborhood policing. ❑ Establish appearance review standards for buildings. ❑ Authorize a local excise taxes 1 fees for retail sales or dispensaries. 5. Testing facilities for Cannabis Currently, the City prohibits all testing facilities, as this is considered a "commercial cannabis activity". Testing facilities include medical research of cannabis, as well as labs the test for pesticides, TCH, the active chemical compound that determines potency of cannabis and other types of test. No retail or wholesale to the public would be involved. Some issues that should be taken into consideration for testing facilities include the following: ■ The location of testing labs, if allowed, should be taken into consideration. This includes potentially allowing a labs in certain non-residential zones. ■ Policing issues that may arise from such labs. The potential for a new economic development tool. ITEM NUMBER: C-9 DATE: 04125/97 Potential Tools Maintain 13 Prohibit all testing facilities for non-medical cannabis and dispensaries for Status Quo medical cannabis. Allow with ❑ Allow testing facilities with a Major Conditional Use Permit (CUP) in certain Standards non-residential zones or an Administrative Use Permit (AUP). An AUP may be utilized if this is the type of use that is an appropriate zone such as the CPK or Industrial zone. ❑ Establish a distance from schools, parks, youth centers beyond the 600 - foot radius established by the State. ❑ Establish fencing, lighting, and landscaping standards for ease of neighborhood policing. E. Manufacturing facilities 1 Distribution Centers Similar to testing facilities, manufacturing facilities and distribution centers are currently prohibited within the City. Unlike testing facilities, manufacturing facilities may be taxed. There are two types of manufacturing facilities. A type 1 and Type 2. Type 1 facilities do not use hazardous solvents such as butane, which can be used to process cannabis into other product types. Type 2 manufacturing uses flammable solvents and other more intensive manufacturing processes similar to the City's existing "Manufacturing and Processing High Intensity". Distribution centers should also be considered for ordinance inclusion. Similar to manufacturing facilities, distribution centers would not have any on-site retail sales. The Council should consider: The location of manufacturing facilities, if allowed, should be taken into consideration. This includes potentially allowing a facilities and distribution centers in certain non-residential zones. Ensure any buildings utilized are compatible with the neighborhood. The potential for a new economic development tool. Potential Tools Maintain ❑ Prohibit all manufacturing facilities or distribution centers for non-medical Status Quo cannabis or medical cannabis. Allow with ❑ Allow Type 1 manufacturing facilities with a Major Conditional Use Permit Standards (CUP) in certain non-residential zones or an Administrative Use Permit (AUP). An AUP may be utilized if this is the type of use that is an appropriate for the Industrial zone or CPK zone. ❑ Allow Type 1 and Type 2 manufacturing facilities with a Major Conditional Use Permit (CUP) in certain non-residential zones or an Administrative Use Permit (AUP). An AUP may be utilized if this is the type of use that is an appropriate for the Industrial zone or CPK zone. ❑ Establish a distance from schools, parks, youth centers beyond the 600 - foot radius established by the State. ❑ Establish appearance review standards for buildings. ❑ Establish fencing, lighting, and landscaping standards for ease of neighborhood policing. ❑ Authorize a local excise taxes 1 fees for manufacturing facilities or warehouses. ITEM NUMBER: C-1 DATE: 04/25117 7. Delivery services for both medical and non-medical marijuana Currently the City allows for delivery services by a qualified care giver. The AUMA also allows for non-medical cannabis to be delivered. The City does have the ability to ban the use of City roads, either maintained or non -maintained, as these are public right-of-ways. The Council should take into consideration the following: • Potential policing issues differentiating between medical versus non-medical marijuana. ■ The City not gaining any financial returns from delivery services outside of the City Limits. Potential 'fools Maintain [] Prohibit deliveries with the exception of qualified patients and qualified Status Quo care givers for medical cannabis. Allow with 0 Allow deliveries for non-medical cannabis. Standards 0 Allow for the establishment of delivery services in non-residential zones for either medical, non-medical or both for cannabis. ❑ Limit time of deliveries, (lam to 10 pm etc.). Prohibit with ❑ Prohibit advertising of cannabis or cannabis products on delivery vehicles Standards or drones, etc. 0 Amend business license tax to increase fees for any marijuana delivery services. 8. Smoking of marijuana or tobacco. The City currently prohibits smoking tobacco in public parks and other locations, however the current ordinances are in two separate places. Based on feedback from residents, the overwhelming majority wanted cannabis smoking prohibited. The State allows for the prohibition of cannabis smoking, ingestion, etc. where tobacco is currently banned. This can be viewed as a public health issue. The City Council should weigh the tools below and direct staff to make changes to the public ordinances as it sees fit. Additionally, the City Council, should discuss providing Staff direction on defining "public spaces". Potential Tools Maintain ❑ Prohibition of smoking at Charles Paddock Zoo, outdoor recreation areas, Status Quo public parks and any sidewalks contiguous to these locations, and within one hundred (10 0) feet of Sunken Gardens. ❑ Prohibition of smoking as contained in certain public places in AMC Title 6, Chapter 6 of the Atascadero Municipal Code to be cleaned up for consistency with State Law. Prohibit with 0 Define what is a "public space" to clearly prohibit smoking in those Standards places.Extend prohibition to all City Sponsored Special events such as Cruise Night, Winter Wonderland, Holiday Lighting Ceremony, Tamale Festival, etc that extend beyond the already prohibited area to maintain a family friendly atmosphere. 0 Define "outdoor recreation areas" to include trails, horse trails, and city and non -city maintained open space areas. ❑ Any additional locations that can be reasonably regulated an enforced by City Staff 1 Atascadero Police ❑e artment. ITEM NUMBER: G-1 DATE: 04/25/17 Conclusion: This report provides the basis for direction. If the Council elects to take "no action" and keep current ordinances in place, the AUMA will kick into gear starting January 1, 2018 with no local control in place. Any new ordinances to regulate marijuana need to be place by Fall 2017 to maintain local control. It is expected that based on City Council direction, City Staff would return this item for additional feedback on potential draft ordinances in July. Based on any changes requested the item would run through the Planning Commission July/August, with a goal to make the September City Council meeting with 2n6 reading no later than October of this year. CEQA Determination: The action within this Staff Report and City Council direction is not a project within the meaning of the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.) Section 15378 and is therefore exempt from CEQA. It will not result in any direct or indirect physical change in the environment because the administrative activities of the City of Atascadero (government) will not result in direct or indirect physical changes in the environment. FISCAL IMPACT: Any proposed ordinance amendment may impact staff resources. ATTACHMENTS: 1. Results from Community Questionnaire 2. Medical Marijuana Ordinance (Ordinance 597) 3. Public Smoking Ordinance (Ordinance 235/Ordinance 573) ITEM DUMBER: 1 DATE: 08129/17 Atascadero City Council Staff Report - Community Development Department Atascadero Cannabis Regulations Proposed Zoning Amendments RECOMMENDATION: Council and Planning Commission discuss, and Council provide direction, pertaining to amending Title 9, Planning and Zoning, of the Atascadero Municipal Code in response to Proposition 64 and Senate Bill 94, adult and medical use of cannabis. REPORT-IN-BRIEF.- At EPORT-IN-BRIEF: At the April 25, 2017 City Council Meeting, the City Council evaluated community input and discussed options towards a zoning code amendment to address Proposition 64, also known as the Adult Use of Marijuana Act ("AUMA" ). The City Council directed staff to return with additional information towards the formulation of code revisions. Since the City Council hearing, staff has continued to gather information from other agencies, seminars, roundtable discussions and community input. The state has also established a new website known as the California Cannabis Portal (https:Hcannabis.ca.gov). The new website provides detailed information on the state's effort to regulate the cannabis industry. This website will continue to be updated to provide information on each of the cannabis licenses that will be issued, starting in 2018, in addition to links to a wide variety of important resources for consumers. The state has also released a draft Environmental Impact Report that addresses the new licensing process. On June 27th, the Governor signed Senate Bili 94 (SB 94), repealing the 2015 Medical Cannabis Regulation and Safety Act ("MCRSA") but including certain provisions from MCRSA, regarding medical marijuana, that can be found in Proposition 64. SB 94 renamed the AUMA as the Medicinal and Adult -Use Cannabis Regulation and Safety Act ("MAUCRSA"). In addition to consolidating state laws regarding medical marijuana and adult -use marijuana, SB 94 introduced more uniform terminology. SB 94 revised references in existing law to refer to "marijuana" or "medical marijuana" as "cannabis" or "medicinal cannabis", and revised references of "nonmedical" to "adult -use." Business ITEM NUMBER: 1 DATE: 08129/17 and Professions Code section 26200, which is part of MAUCRSA, expressly recognizes the ability of cities to completely prohibit all adult -use (recreational) cannabis businesses or to regulate such businesses. Preparation of a zoning code that responds to new state regulations starts by formulating a set of new land use definitions that describe each of the local activities to be licensed by the state (Attachment 1). In order to determine what activities will ultimately be allowed in the City, each item must be defined, so that it is clear what will be allowed, conditionally allowed, or prohibited in the City's Zoning Code. The state's licensing process will treat medical cannabis no differently than adult use cannabis. Designing the City's amended Zoning Code regulations, to respond to the new state licensing process while also responding to local needs, will help avoid confusion and overlap. The City's Zoning Code should also be formulated this way to avoid confusion and overlap. Staff has researched state licensing, and the draft codes of other communities, to formulate draft regulations and options for each of the categories detailed below. Following Council discussion, Zoning Code amendments will require Planning Commission review followed by City Council review and adoption. DISCUSSION: Background: At the April 25, 2017 City Council Meeting, the Council reviewed each of the land use areas to address in response to Proposition 64. The City Council gave staff broad direction on cannabis land uses activities that could occur in the City and asked staff to return following research into these specific topic areas. The additional information gathered and included in this report is designed to help Council formulate amendments to the Zoning Code (Title 9, Planning and Zoning, of the Atascadero Municipal Code). This report examines the state's licensing process, and further explores suggested Zoning Code amendments that would allow certain commercial uses such as cannabis testing facilities, manufacturing, deliveries and other non -retail land uses. The suggested Zoning Code amendment options would also refine the City's regulations on private cuftivation. Zoning Code Amendment Process: The development of these important Zoning Code amendments is a gradual process that relies on continuous community involvement. Four phases of the process, listed below, were identified and presented to Council: • Phase 1 — Gather public feedback through a series of public workshops and informational discussions. This phase is complete. • Phase 2 — Direction from the City Council on the formulation of local Ordinances. This phase is complete. • Phase 3 — Provide refined information to the City Council based on specific feedback. Introduce land use definitions and information towards Zoning Code development while hearing additional input. ITEM NUMBER: 1 DATE: 08/29117 • Phase 4 - Hold required public hearings of the Planning Commission and City Council to review final amended Zoning Code language, introduction of ordinance on first reading and finally, adoption of ordinance on second reading. Anal Section 1— State Licensin State Licensing Process - Commercial Activities The primary governing authority for the regulation of cannabis is known as the Bureau of Cannabis Control. Responsibility for licensing is given to: A. Bureau of Cannabis Control (Testing, Retail, Distribution) S. Department of Public Health (Manufacturing) C. Department of Food and Agriculture (Cultivation) The state authority known as "CalCannabis"(http://calcannabis.cdfa.ca,govl) has prepared the framework to establish 19 different types of commercial cannabis Ilcenses. Attachment 2 includes a FAQ from CalCannabis that describes each of the license types. The types of licenses are as follows.- 0 ollows: • 13 different types of commercial cultivation ■ 2 manufacturing licenses pertaining to non-volatile 1 volatile solvents used for processing • 1 license for testing • 1 license retail sales • 1 license for wholesale distribution • 1 license for what is considered a "microbusiness" (small retail and cultivation not exceeding 10,000 sf in size) Similar to alcohol licensing by ABC, the state licensing process for cannabis will provide regulations that help to ensure public safety and neighborhood compatibility. The state cannot issue licenses to applicants whose operations violate the provisions of any local ordinances or regulations. The minimum requirements to obtain a state license for a commercial operation include: • Originally, under Proposition 64, a license would not be issued to a business licensed as a retailer of alcoholic beverages; however, SB 94 changes that and will allow a license to be issued to an alcohol retailer. • A license will not be Issued to a business that is within 600 -feet of a school, daycare, center, or youth center (a municipality may adopt a larger radius). • A license will not be issued if the business violates any local ordinance or state regulations in effect prior at the time or prior to license issuance. ITEM NUMBER: 1 DATE: 08129117 Section 2 -- Land Use Definitions The City should have definitions that accommodate the categories of state licenses to describe each potential land use. A detailed draft description of the below proposed definitions are included in Attachment 1. • Cannabis • Cannabis Canopy • Commercial Cannabis Cultivation ■ Personal Cannabis Cultivation • Cannabis Delivery ■ Cannabis Dispensary • Mobile Delivery • Mobile Dispensary ■ Cannabis Distribution ■ Cannabis Edible Product ■ Cannabis Hoop Structure • Cannabis Greenhouse • Cannabis Manufacturing Volatile • Cannabis Manufacturing Non -Volatile • Cannabis Nursery • Cannabis Testing Facility • Cannabis Transport • Industrial Hemp Section 3 — Draft Regulations Staff has developed a set of Zoning Code amendment options for each of the categories identified by City Council. Attachment 3 includes a map of commercial districts that fall outside of the 600 -foot buffer zone required by state licensing. The Downtown Commercial Zone and the Retail Commercial Zone have been removed from the map as these zones may not be appropriate for manufacturing, testing labs, or distribution centers. 1. Personal Cultivation — Indoors The City Council asked staff to provide information on options for regulating personal cultivation. The following are components that may be regulated: • Number of plants and size/location of planting area ■ Type of structure ■ Ensure a construction permit is obtained for new electrical, or other construction ■ Ensure that sleeping rooms are not converted for cultivation use • Consider establishing a database of personal cultivation sites Staff has considered the establishment of a database system for personal cultivation sites. Although the idea has merit, it could be somewhat problematic because it may create a potential security risk for those who wish to remain discreet and it is likely to create an additional burden on staff. Staff would need to maintain, update and monitor the list. At this time, there are no additional staff resources available to maintain nor enforce such a list. Instead, it is recommended that performance standards, along with firm code enforcement options (increased penalties, confiscation of plants), be considered for those who violate personal cultivation allowances. Given the evolution of state laws, it is important to treat personal medical cultivation and personal adult cultivation the same. if not, the implementation and enforcement of personal cultivation may be confusing and challenging for both the public and City staff to understand. The proposed Zoning Code language below would cover both medical and adult personal use cultivation. ITEM NUMBER: 1 DATE: 08/29/17 Suggested Zo ing Code for Personal Indoor Cultivation Suggested ❑ No more than six plants per residence may be allowed for both medical code options and/or adult personal use whether indoors or outdoors. ❑ No more than 120 square feet of indoor residential space, per residence, may be utilized for personal cultivation. ❑ More than six plants, up to a maximum of 15 plants per residence for personal use may be allowed with approval of an administrative use permit and site registration. ❑ Cultivation may not be allowed within a room designed for sleeping. ❑ Cultivation site shall not be visible to the public or from adjacent residences. ❑ A construction permit shall be required for new electrical, plumbing, or other construction that would otherwise be subject to a construction permit. ❑ Hoop structures, transparent greenhouses, and similar transparent or partial structures are considered outdoor cultivation. ❑ Landlord approval required for personal cultivation on rental properties. ❑ Violation of the personal cultivation standards shall be subject to a municipal code violation. 2. Personal Cultivation- Outdoors The City Council asked staff to bring back a reasonable regulation with protections and conservative limits; ■ Set maximum number of plants for medical or adult use ■ Ensure screening, setbacks, protection from access ■ Consider registration system or database for personal cultivation • Ensuring neighborhood compatibility, minimize odor Draft Regulations for Personal Outdoor Cultivation Suggested ❑ 15 -foot setback from property line required for personal outdoor code cultivation site. Shall be located 25 feet from nearest adjacent residence, options ❑ 120 square foot maximum plant canopy coverage unless a greater coverage is approved with an administrative use permit. ❑ Landlord approval required for rental properties. ❑ Six plants maximum per residence at any time ❑ More than six plants (maximum of 15) may be allowed with approval of an administrative use permit and site registration/approval. ❑ Screening to consist of six foot tall solid wood fence or similar. ❑ Plants shall not be visible to public or from adjacent residences. ❑ Fencing shalt not exceed six feet in height unless a fence height exception is obtained ❑ Prohibited on attached residential units within decks, balconies or rooftops unless within a private yard area subject to screening and setbacks. 3. Commercial Cultivation The City Council asked that all commercial cultivation activities be prohibited at this time. There will be 13 different types of licenses issued by the state for commercial cultivation. The City is not required to allow commercial cultivation at this time and this option may be explored at a later date as the industry matures. Draft Regulations for Commercial Cultivation Suggested 0 Prohibit afl commercial cultivation types, both indoor, outdoor and code options t nursery stock. ITEM HUMBER: 1 DATE: 08/29117 4. Retail Sales of Cannabis 1 Medical Dispensaries 1 Distribution Center The City Council asked staff to return with additional information on a retail use that is delivery based only with no on-site retail sales. Delivery services currently operate in other places within the County for medical use. Starting January 1, 2418, the state will begin to offer licenses for delivery to adults (non-medical). Delivery services could be based in the City or outside of the City. Those based in the City would keep potential tax revenue in the City. A delivery service could be based out of a distribution center, which is a small commercial office with no retail storefront. Any cultivation associated with a delivery service would need to occur outside of the City. Delivery services would offer retail sales of cannabis products that would be delivered to a home in an unmarked vehicle. Ordering would occur through the internet or by phone. Delivery services may not use mail service since that is currently prohibited by Federal law. Some of the items that need to be considered include: ■ Provide specific zoning locations for distribution centers ■ Provide aesthetic and sign limitations for a distribution center to discourage an attractive nuisance ■ Consider hours of operation ■ Consider safety and security for delivery vehicles ■ Provide information on local taxation of retail sales and the process to set up new fees, taxes, etc. and potential increase in City revenues Draft Regulations for Cannabis Distribution Center Suggested ❑ A Cannabis distribution center with no on-site sales may be allowed with code a Major Conditional Use Permit (CUP) in CPK, CS and Manufacturing options zones. ❑ Use shall be at least 600 feet from schools, parks, and youth centers. ❑ Use shall be at least 300 feet from another distribution center. ❑ Building signs, and exterior treatment shall be subject to appearance review standards for buildings. ❑ Mobile dispensaries shall be prohibited. ❑ All delivery sales shall originate from a state licensed facility that is operating with a current business license. ❑ Use shall be subject to local excise taxes / fees for retail sales or dispensaries. ❑ Distribution centers shall be sub ect to annual compliance review. 5. Testing Facilities for Cannabis Testing facilities include medical research of cannabis, as well as labs that test for pesticides, contaminants, TCH, CBD, the active chemical compound that determines potency of cannabis and other types of tests. No retail or wholesale sales to the public would be involved. Under the recent passage of SB 94, no storage of cannabis would be allowed at a testing lab; cannabis distributors or cultivators will be required to store their cannabis on site during testing. Testing lab employees would obtain small ITEM NUMBER: 1 DATE: 08/29/17 samples of cannabis from a distributor or cultivator and transport those samples to the testing lab. A testing lab can typically fit into a small office building or small warehouse site. Several employees, some of which would be qualified chemists, would operate a lab. Some of the things to consider include: • Zoning location • Hours of operation ■ Appearance standards Draft Regulations for Testing Labs Suggested ❑ Allow testing facilities with an Administrative Use Permit (CUP) in CPK, code CS, and Manufacturing zones. Allow in CR zone with Minor Conditional options Use Permit. ❑ Shall be prohibited within 660 -feet of schools, parks, and youth centers. ❑ Design Review Committee review required for building signs, security, and appearance. ❑ No cannabis related advertising or association with cannabis shall be allowed on exterior of building. 6. Manufacturing Facilities Over the past couple of years, the cannabis manufacturing industry has become mainstream and is playing an active role in the national financial market. A recent article by Investopedia highlighted several major companies that are getting involved in the manufacturing market. They specialize in items such as pharmaceuticals that help chemotherapy patients, sclerosis and epilepsy. There are also many industries that create topical lotions, edible products and even veterinary products. However, industrial uses in this category are fairly new and there are no known local examples to learn from. There are two types of non -retail manufacturing facilities that are recognized by the State Licensing Authority. The state utilizes the term Type 1 for non-volatile manufacturing and Type 2 for volatile manufacturing. A Type 1 facility is a facility that does not use hazardous or volatile solvents. Type 1 would typically consist of food products, edible items and finish products for topical use that do not include the use of solvents or heavy manufacturing. A Type 2 manufacturing process uses flammable solvents and other more intensive manufacturing processes similar to the City's existing "Manufacturing and Processing High Intensity". Type 2 manufacturing is employed to create other product types including extracts, oils, tinctures and topical applications. Currently, there are many examples of these manufacturing operations that are operating in the pacific northwest in the states of Oregon and Washington. These manufacturing uses can operate in a small warehouse space or even a bakery type space depending on level of intensity and storageloperation needs. ITEM NUMBER: 1 DATE: 08129117 A cannabis manufacturing facility is a facility that could be locally taxed based on floor area or based on sales. It may be premature to create and allow this land use prior to establishing an appropriate tax that will assist the City in accommodating any necessary planning, building, or law enforcement staffing that will be needed to help regulate such businesses. Things to consider: • Tax structure • Zoning ■ Distance separation • No -retail sales, no storefront • Appearance and security • Neighborhood compatibility and protection from odors Draft Regula ions for Manufacturing Uses Suggested ❑ Type 1 manufacturing facilities allowed with a Conditional Use Permit code (CUP) in CPK, CS and Manufacturing Zone. options ❑ Type 2 manufacturing facilities allowed with a Conditional Use Permit in ❑ Delivery services shall be provided by unmarked vehicles. the CPK, CS and Manufacturing zone. ❑ Out of town vendors and local vendors shall be subject to a City business ❑ Manufacturing facilities shall be prohibited within 600 feet from schools, license. Business licenses shall be reviewed/renewed annually. parks, and youth centers. ❑ Mobile dispensaries shall be prohibited. ❑ Manufacturing facilities shall not include retail sales in the City unless by ❑ All delivery sales shall originate from a state licensed facility that is delivery service. operating with a current business license. ❑ Manufacturing facilities shall be subject to an annual compliance review. iD City could require deliveries to be from a brick and mortar 0 Design Review Committee review shall be required for all facilities. distribution site that is located within the City or County. ❑ All manufacturing facilities shall be subject to local excise taxes 1 fees. 7. Cannabis Delivery Services Delivery services consist of a personal delivery vehicle that distributes retail deliveries to adults in a discreet manner. Delivery services allow for the delivery of cannabis for medical or adult use. Delivery services could have a distribution center within Atascadero or come from a nearby community. In order to avoid mobile sales such as from an "ice cream" truck, the Zoning Code option suggests that all deliveries shall originate from a state licensed facility and that mobile deliveries shall be prohibited. The state will require specific licensing for a delivery service. A delivery service with its origin in the City can have its sales taxed by the City. Draft Regulations for Delivery Services Suggested ❑ Deliveries to retail customers shall be prohibited between the hours of code 11 PM and 7AM. options ❑ Delivery services shall be provided by unmarked vehicles. ❑ Out of town vendors and local vendors shall be subject to a City business license. Business licenses shall be reviewed/renewed annually. ❑ Mobile dispensaries shall be prohibited. ❑ All delivery sales shall originate from a state licensed facility that is operating with a current business license. iD City could require deliveries to be from a brick and mortar distribution site that is located within the City or County. ITEM NUMBER: 1 DATE: 08/29/17 8. Smoking and Consumption Proposition 54 prohibits public consumption of cannabis. However, the state does not provide a definition of "public" therefore it is up to the courts, or each local jurisdiction, to define what is considered a public place. Based on alcohol consumption, the courts have generally ruled that any place freely accessible by your mail carrier or friendly neighborhood solicitor, is public. Therefore, a public sidewalk, street, a front porch, driveway, or other space directly exposed to the public right of way may be considered "public" for the purposes of cannabis consumption. Based on feedback from residents, the overwhelming majority wanted cannabis smoking in public prohibited. The City's Zoning Code should provide for a prohibition on public cannabis consumption, including vaping, smoking and consumption of edible products even through the state already prohibits such consumption. New definitions have been crafted to carefully describe public spaces where smoking, vaping, and ingesting of both tobacco and cannabis products shall be prohibited. Draft Smoking Regulations Suggested ❑ Smoking, vaping, and ingesting of tobacco and cannabis products shall Code be prohibited in public places. Options 0 Public spaces includes the following: Any public or private park that may be utilized by the public, including but not limited to Atascadero Lake Park, Sunken Gardens, Centennial Bridge and Plaza, Paloma Park, Colony Park, and at any City sponsored public event, including but not limited to Hot EI Camino Nights, Dancing In the Streets, Colony Days, Winter Wonderland, and the Holiday Lighting Ceremony. ❑ Public Spaces include "outdoor recreation areas" to include public trails, and City and Non -City maintained open space areas - 13 Public spaces shall include public sidewalks and public spaces at or within 100 feet of schools, parks, and youth centers. 0 Public spaces shall include all those spaces that may be directly visible or accessible to the pubiic even if those spaces are within private property i.e a front porch, front yard, driveway etc). Section 4 — Taxation The state has combined medical and adult use cannabis for the purposes of taxation and local excise taxes. To get a better understanding of taxation, Prop 54 authorizes the State of California to collect the following excise taxes on medical and non-medical cannabis: • 15% state excise tax on gross retail receipts for medical dispensaries and non- medical retail outlets • $9.25 per dry weight ounce on cannabis flower state excise tax for medical and non-medical cultivation • $2.75 per dry weight ounce on cannabis leaves state excise tax for medical and non-medical cultivation • Sales tax to be collected on all non-medical retail sales Personal cultivation of both medical and non-medical cannabis is exempt from cultivation taxes imposed by the state. ITEM NUMBER: 1 DATE: 0$129197 A local municipality has the ability to impose excise taxes in addition to state excise taxes which include: • New Business license taxes for cultivation, dispensaries, retail sales, manufacturing, and delivery services • Business regulatory fees to recover cost of implementing both medical and non- medical commercial operations These additional taxes would require voter approval and would need 2/3 voter approval if the tax is utilized for a specific reason (i.e. law enforcement services 1 roads) versus a general tax that goes into the General Fund. Local taxes will need to be maintained at lower level (less than 8%) to ensure that the industry is not driven to the black market. If the City proceeds with amendments to the Zoning Code towards some form of cannabis manufacturing distribution center(s) or delivery, a process to adopt appropriate taxes and business license fees will need to be brought back to Council for approval. The City may tax cannabis sales from a local distribution or manufacturing center. Additionally, the City may adopt a different fee structure for the permitting and licensing of cannabis facilities. Allocation of State Taxes The State Legislative Analysis estimates that retail sales of cannabis will exceed the wine industry at 44 billion dollars each year. Currently, the wine industry is reaching 33 billion dollars annually. The tax revenue from the legalization of non-medical cannabis will range from the high hundreds of millions of dollars to over $1 billion dollars annually. State law has allocated where those monies are to be expended. Percentage Allocation Law Enforcement Youth programs, Health Impacts substance abuse, 20% education etc. 60% Enviornmental Clean Up & Remediation 20% Section 5 - State Regulations All state -licensed commercial cannabis activities will be subject to state regulations that are being drafted by the various state licensing authorities. The Department of Food and Agriculture, Department of Public Health, and Department of Consumer Affairs circulated draft regulations pertaining to medicinal cannabis activities. With the passage of SB 94, these regulations will require revisions. It is anticipated that further draft regulations will be released this fall. ITEM NUMBER: 1 DATE: 08/29/17 Conclusion: This is a new industry with both local and federal legal complexities. With additional time, the industry will be refined, and state and federal law may get closer aligned. Currently, cannabis is still federally prohibited, therefore its long term future is unknown. However, the City has no choice but to respond to Proposition 64 and SB 94, as the voters of the state have chosen to allow adult use. Although the City does not have to allow all forms of the retail cannabis industry, defining it and regulating it in moderation will reduce the illegal market and will create the potential for a tax revenue that can assist enforcement and regulation. It is easier to start with stricter regulations, then later explore options as warranted, than it is to allow all forms of cannabis then attempt to roll back ordinances. Furthermore, since this industry is new, many of its land use implications and revenue vs cost implications are not known. Based on this fact, many local communities are choosing to wait until the industry matures before adopting codes to allow commercial business. It is the City's goal to adopt regulations prior to January 1, 2018. Since the Zoning Code is part of Title 9, it requires review and action by both the Planning Commission and City Council. To allow time for the second reading and the 30 day time period for code adoption, final action by the City Council will need to take place on or prior to the October 24, 2017 City Council meeting. There are five primary considerations that need to be taken into consideration prior to allowing commercial cannabis business in the City. At this time, staff continues to work on Stage 2 of this process: 1. Community Research and Outreach (Completed) 2. Land Use Regulations (Currently in process) 3. Full Cost Recovery (Application, use permit and regulatory fees) 4. Revenue (Taxation Ballot Measure) 5. Monitoring and Compliance (As defined by ordinance) Following the completion of land use regulations, which is the primary discussion of this report, the City will need to shift the discussion towards application fees and taxation (should commercial activities be allowed). The earliest that a tax measure could be placed on the ballot would be November 2018. Concurrences: Staff has reviewed the proposed code options with each of the City departments. Police Department staff are concerned about impacts to staffing levels and the need for additional law enforcement with the implementation of new land uses that include cannabis businesses. Since the industry is not legal federally, and utilizes cash for all of its transactions, the potential for criminal activity may be higher than that of other business types. Police staff are concerned that an increase in cannabis related business will directly result in an increase in criminal activity which will directly result in an increase in law enforcement that cannot be accommodated under current staffing. The unknown cost vs revenue of the industry along with the relatively poor perception of cannabis businesses may be reason to postpone implementation of land use policies that allow for anything other than testing labs or personal cultivation. ITEM NUMBER: 1 ❑ATE: 08129117 CEQA Determination: The action within this Staff Report and City Council direction is not a project within the meaning of the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.) Section 15378 and is therefore exempt from CEQA. It will not result in any direct or indirect physical change in the environment because the administrative activities of the City of Atascadero (government) will not result in direct or indirect physical changes in the environment. Currently, the State of California has drafted an Environmental Impact Report (EIR) that addresses the implementation of the new state licensing process. The EIR is designed to address the potential impacts of licensing all the way down to the local level. A copy of the draft EIR can be viewed on the state website at CalCannabis. FISCAL IMPACT: Any potential amendments to the Zoning Code, addressing adult and medical use of cannabis, may have impacts on staff resources. Code enforcement, law enforcement and planning application activities are likely to increase with the passage of Proposition 64 and SB 94, but not directly as a result of amendment to the Zoning Code. The passage of a revised Zoning Code is intended to reduce the illegal activities associated with cannabis, and therefore reduce law enforcement activities over time. However, there will be an increase in planning applications and code enforcement activities especially within the first year or two as the new regulations are put into place. It is anticipated that the increased funding from state revenue and the potential increased local tax revenue will offset local fiscal impacts. However, at this time, the balance between increased revenue and increased impacts to staff resources are unknown. A recent analysis completed by SCI consulting group (August 14, 2017) found that the average general fund revenue that will be generated by cannabis sales in a community that allows for both commercial cultivation and sales will be $15 per capita. In other words, for a community with a population of 100,000 the average revenue is 1.5 Million. In Atascadero, this calculator would project a revenue of approximately $450,040 annually, assuming commercial sales and cultivation. ATTACHMENTS: 1. Draft land use definitions 2. Q & A from Cal Cannabis state licensing 3. Buffer map identifying schools, youth centers etc. and allowable commercial Zones ITEM NUMBER: C-9 DATE: 10110/17 Atascadero City Council Staff Report - Community Development Department Adult and Medical Use Cannabis Regulations Municipal Code Amendments (PLN 2017-1633) RECOMMENDATION: Planning Commission recommends: Council introduce on first reading, by title only, the Draft Ordinance repealing Title 9, Chapter 6, Section 9-6.186, Medical Marijuana Facilities, of the Atascadero Municipal Code, and adding Chapter 17, Cannabis Activities and Regulations within Title 9, of the Atascadero Municipal Code - REPORT -IN -BRIEF: At its September 19, 2617 meeting, the Planning Commission recommended (6-9) to adopt a new ordinance regulating Cannabis activities. The Draft Ordinance repeals Title 9, Chapter 6, Section 9-6.186, Medical Marijuana Facilities, of the Atascadero Municipal Code, and replaces it with an entire new Chapter (Chapter 17), that would contain Cannabis Activities and Regulations. The following is a summary of proposed Municipai Code Amendments: • Establish definitions specific to cannabis activities • Establish personal cultivation standards that to allow up to six (6) cannabis plants for personal indoor or outdoor cultivation, consistent with State established personal exemptions ■ Allow for adult and medical cannabis deliveries, from distribution centers located outside the City Limits, to residents of the City, provided these businesses meet established regulations, obtain a state license and obtain a business license ■ Allow for State licensed testing facilities, within certain non-residential zones, with either a Major Conditional Use Permit, or an Administrative Use Permit ■ Include enforcement for personal and commercial cannabis activities to help deter Ordinance violations. ITEM NUMBER: C-1 DATE: 10/10/17 In response to a study session held on August 29, 2017, staff has provided some additional information on topics which are not currently part of the Draft Ordinance. The additional topics provide general information on: ■ Taxation for commercial cultivation, delivery services, manufacturing facilities, and cannabis distribution centers • Review of banking regulations related to cannabis related transactions DISCUSSION: Background: The study session held on August 29, 2017 was to review and provide direction on what should be included the City's new Cannabis Ordinance. With input from the public, both the City Council and the Planning Commission provided direction on a final Draft Ordinance. The development of Zoning Code amendments is a gradual process that relies on continuous community involvement. Four phases of the process, listed below, were identified and presented to Council. The City is now in the final phase of the process: • Phase 1 — Gather public feedback through a series of public workshops and informational discussions. This phase is complete. • Phase 2 — Direction from the City Council on the formulation of local Ordinances. This phase is complete. ■ Phase 3 — Provide refined information to the City Council based on specific feedback. introduce land use definitions and information towards Zoning Code development while hearing additional input. This phase is complete. • Phase 4 - Hold required public hearings of the Planning Commission and City Council, to review final amended Zoning Code language, introduction of Draft Ordinance on first reading, and, adoption of Ordinance on second reading. The proposed Ordinance provides new definitions, personal cultivation standards, and a review process to allow for testing facilities. All other commercial cannabis activities will be prohibited at this time, other than deliveries that originate outside of Atascadero. The City Council may elect to allow additional uses within zoning districts over time, and the Draft Ordinance is written in a fashion that will allow for such code updates in the future, as the industry matures and issues such as taxation and banking can be resolved. ITEM NUMBER: C-1 DATE: 10110/17 Land Use Definitions The list of land use definitions has been refined to reflect the uses that would be accommodated in the City. These definitions include the following: ■ Accessory Structure` Regulation Type ■ Cannabis . Indoor Cultivation • Cannabis Canopy • Outdoor Cultivation • Commercial Hoop Structure . Private Residence • Cannabis Green House . Retail Cannabis Delivery Center • Cannabis Testing Facility . School* • Cannabis Commercial Cannabis . State Cannabis Law Activity • Youth Center* ■ Cultivation • Day Care Center* tants • Full Enclosed Structure* 120 Square Feet *Denotes definition specifically for the purposes of this section Personal Cultivation At the August 29, 2017 study session, an exception process was contemplated that would allow more than 6 plants for a personal cultivation site with approval of a use permit. However, we have since learned that the personal cultivation of more than 6 plants would require a state license for commercial cultivation. State law (MAUCRSA) allows for a licensing exemption of six (6) plants or less. The City Council gave clear direction that commercial cultivation would be prohibited in the City at this time. Therefore, staff is recommending keeping a six (6) plant limit with no exceptions. Personal - Indoor Cultivation for Adult and Medical Cannabis Regulation Type Within A Residential Within A Fully Enclosed Unit Accessory Structure Maximum number of plants allowed 6 Plants 6 Plants Allowed in bedrooms no NIA Max space allowed to cultivate tants 120 Square Feet 120 Square Feet Property Owner Consent Required Required ITEM NUMBER: G-1 DATE: 10110117 While the Draft Ordinance the Planning Commission approved for recommendation to the City Council included a 246 maximum square foot space allowance for personal outdoor cultivation, the direction of Council at the study session was to restrict the maximum allowable space for outdoor cultivation to 126 square feet. The 246 square foot maximum was not discussed at the Planning Commission, but was inadvertently included in the staff recommendation to the Commission. The table below reflects the suggested 126 square foot maximum allowance for outdoor cultivation and this 120 maximum allowance is reflected in the Draft Ordinance. Personal - Outdoor Cultivation for Adult and Medical Cannabis Regulation Type Outdoor Regulations Maximum number of plants allowed 6 Plants Max space allowed to cultivate plants 120 Square Feet Visible from Public Right -of -Way no Completely screened with neighborhood compatible fencing and/or landscaping Required Barbwire, razor wire fencing, chain-link fencing, plywood and unfinished materials allowed for fencing types Maximum fence height no T feet Setback from rear / side propert line 15 feet Setback from adjacent residences 25 feet Setback from public right-of-way 25 feet Allowed in the front yard setback no Property Owner Consent Required Additional regulations applicable to both indoor and outdoor personal cultivation of medical and adult cannabis include: ■ Any modification to structures or land require compliance with the City's adopted building codes (Currently the 2016 California Building Code) • The use of solvents such as gas products, butane, propane, natural gas is prohibited • Regulations for waste disposal have been included requiring that waste products for personal cultivation be rendered in what is considered an "unusable form" and must be contained in waste containers Testing_ Laboratory The Draft Ordinance allows cannabis testing facilities to be established through either an Administrative Use Permit (AUP) or Conditional Use Permit (CUP) in certain non- residential zones. Testing facilities would be prohibited in all Agriculture and Residential Zones, as well as all Public Zoning Districts. The proposed Draft Ordinance contains existing standards for testing facilities that include the following: • Prohibition of retail or wholesale sales to the public • Testing facilities prohibited within 600 -feet of schools, parks, and youth facilities ■ Exterior signage is limited to 15 square feet ITEM NUMBER: C-1 DATE: 10110/17 Medical or Adult Cannabis Delivery Medical and adult cannabis deliveries will be permitted from services located outside of the City Limits to individuals within the City. The Draft Ordinance includes the following regulations for delivery services: • Delivery service must be State licensed • Delivery service must obtain a business license within the City • No advertising is permitted on the vehicle utilized for cannabis deliveries • Delivery times limited to 7:00 am to 10:59 pm Enforcement After discussion with the City's legal staff, it was determined that the State licensing and enforcement process will be the primary enforcement tool. The City can use its current enforcement tools to issue administrative citations, on a daily basis, to be more proactive in enforcing the proposed new regulations. However, the City's enforcement policies on cannabis may not preempt State law. Violations to the new Draft Ordinance will be enforced with the administrative citation process include the following: • $100 fine for the 1st violation • $200 fine for the 2nl violation • $500 fine for all subsequent violations The fine structure shown above could be utilized on a daily basis to enforce cultivation limits, commercial cannabis activities, and any other activity that is inconsistent with City Ordinance and/or the State licensing process. instead of the current process, whereby a letter is issued with a 30 -day corrective notice, followed by additional time to abate the code violation, violations of this Ordinance could be enforced in much shorter time frames. For example, following issuance of a written notice, a citation could be issued the following day with subsequent citations issued each day until the violation is corrected, In the case of cultivation violations, such action may be necessary, as a typical abatement process would allow maturity and harvesting of cannabis crop and would make enforcement ineffective. Taxation of Commercial Cannabis The City Council requested information on taxation and the potential to revisit the proposed Draft Ordinance, if measures were implemented to tax commercial cannabis operations. Various cities throughout the State have placed ballot initiatives to tax commercial cannabis sales, as well as, recover costs associated with inspections, etc. These initiatives require voter approval to comply with Proposition 218. The following is a cursory survey of some of the 37 tax initiatives that were approved throughout the State in 2016: ITEM NUMBER: C-1 DATE: 10110117 Municipality Gross Receipts Per Sq. Ft Tax Carson 18% on all cannabis sales $25 for cultivators subject to CPI Dixon 15% on all cannabis sales N/A Grover Beach 5% on medical cannabis $25 up to 5,000 sf 10% on Adult Use $10 addition sf for cultivators Subject to CPI Gonzales 5% for the first 3 years Up to $15 for the first 3 years for Up to 15% after 3 years cultivators Up to $25 subject to CPI after 31d year. Greenfield 10% on all cannabis sales _ Up to $25 with CPI King City NIA $25.00 per square foot for the first 5,000 square feet $10.00 per square foot thereafter for cultivation; not to exceed $5.00 per square foot for nurseries; $30,000.00 each for manufacturing and testing facilities; and may be adjusted annually by CPI; Coalinga NIA $25 for the first 3,000 sf $10 for the remaining sf thereafter Santa Barbara Up to 20% on all sales, NIA manufacturing, cultivation, etc. Salinas 5% the first 3 years $15 per sf for canopy area for the 10% thereafter first three years $25 per sf of canopy area thereafter, adjusted for CPI for all cultivators There are many options for the direct taxation of the cannabis industry: • Tax the total amount of gross receipts for all industries, including testing labs. This would be on top of taxes collected by the State, and sales tax for adult use of cannabis. ■ Tax the total amount of gross receipts for dispensaries, retail outlets, and distribution centers. • Tax cultivation, manufacturing, nurseries, etc. on a square foot basis for the entire building, regardless of how many plants on the premise. • Tax cultivation based on "canopy" area, would be the area where cultivation occurs, and omits areas utilized for processing, bathrooms, breakrooms, offices, etc. Some municipalities have placed flexibility in their taxations, including the use of percentages that increase over time, have a cap, or are phased in. These approaches are based on economic decisions to gain market share on the cannabis industry with competing municipalities. ITEM NUMBER: C-1 DATE: 10110117 Below is the general timeline to place a ballot measure on the November 2018 general election ballot: ■ February 2018 - Authorize staff to craft a Draft Ordinance ■ May 2018 - Authorize placement of a ballot measure on the November 2018 general election ballot for consideration by Atascadero residents. ■ July 2018 - Impartial analysis, arguments for, against, proposed cannabis commercial tax are due. • July 2018 - Complete a public inspection period of the impartial analysis, and arguments for and against the Ordinance, and accept and/or draft rebuttal arguments. • August 11, 2018 - Submit to the Clerk -Recorder Office ballot initiatives, analysis, arguments for and against, and rebuttals • November 0, 2018 - Election to be held Banking and Cannabis Because the manufacturing, distribution, and dispensation of cannabis remains illegal, under the Federal Controlled Substance Act (CSA), banks and other financial institutions, providing services to cannabis -related businesses, risk violation of federal anti -money laundering statutes, the unlicensed money -remitter statute, and the Bank Secrecy Act (BSA). Financial institutions risk criminal liability for engaging in certain financial and monetary transactions with the proceeds of a "specified unlawful activity" and for failing to identify or report financial transactions that involve the proceeds of cannabis -related violations of the CSA. In 2014, the Financial Crimes Enforcement Network (FinCEN) issued guidance clarifying due diligence expectations and reporting requirements for financial institutions that wished to provide services to cannabis -related industries. The U.S. Department of Justice (DOJ) also issued a guidance memo clarifying the focus of its enforcement efforts. Neither of these issuances, however, provide financial institutions with any safe harbors or legal defenses from examination or regulatory or criminal enforcement actions brought by the DOJ, FinCEN, or other federal regulators. While the DOJ memo notes that prosecution may not be appropriate if a financial institution offers services to a cannabis -related business whose activities do not implicate any of the priority factors that it has identified, it nevertheless also clearly states that the guidance "does not alter in any way the Department's authority to enforce federal law" and does not provide a legal defense to any civil or criminal violation of federal law. The guidance issued by the DOJ and FinCEN does not have the force of law and is subject to change at any time, particularly since these guidelines were crafted under a previous administration and the current administration has signaled a potential shift to enforcement of current cannabis regulations. Because of the high risk associated with cannabis -related transactions, many financial institutions will not take on accounts associated with cannabis -related commercial activities. There are a few smaller banks that are taking the risk and following the guidance set up by the FinCEN and DOJ, however, these banks charge fees to recover ITEM NUMBER: C-1 DATE: 10/10/17 costs such as compliance with these regulations. This is the primary reason the cannabis industry remains primarily an "all cash" enterprise. With the amount of cash in and around the industry, finding ways to deposit, pay taxes, and transport cash becomes a potential for criminal activities. The State of California has recognized this as a major issue and obstacle to implement Adult and Medical cannabis use. The State Treasurer has convened a "Cannabis Banking Working Group" to formulate how to handle the taxation and the banking of billions of dollars of transactions that will take place in California. A potential solution that has been floated is the idea of a State run public bank. A similar bank, the Bank of North Dakota, is the only publicly owned bank in the country, and was initially set-up to aid farmers in the State in the early 1920s. Deposits are insured by the State itself, removing all federal oversight, thereby side-stepping federal banking rules and guidance. There are pro's and con's to such an idea, however, the State of California has not signaled whether it would embark on such a concept. Credit card companies follow the same set of regulations as financial intuitions. These companies generally refuse to process transactions with cannabis -related industries. Some businesses have established "work grounds" where cannabis patients may purchase products online via a website and are "re -directed" to a website for payments that are either a subsidiary or associated with the cannabis related businesses to process the credit card transactions. Additionally, some cannabis businesses have resorted to creating limited liability companies and other non -cannabis businesses to place cannabis related transactions within financial institutions. Currently, a company operating out of Colorado has created an application to accept debit or Automated Clearing House [ACH] secure transfer payments for electronic fund transfers from cannabis consumers to cannabis businesses with accounts at certain financial institutions, within the State of Colorado, whom have signed up to participate in a "closed loop" system. The creators of this application, wish to bring this system to California, however, banks would need to participate in the application, which is accessed from a mobile phone, and weigh the risks associated with federal rules and guidelines. Ultimately, only a change in federal law can fix the banking system when it comes to cannabis. At this point, cannabis businesses are finding other creative ways to deal with the influx of cash in the industry and only time will tell whether their activities are sustainable. Conclusion; The proposed Draft Ordinance has been crafted with input from the City Council, Planning Commission and the public. The Planning Commission recommends that the City Council adopt the proposed Draft Ordinance. The Council may also suggest changes that are in the spirit of suggestions made during the Study Session. As this is an evolving industry, it is likely the Ordinance will need to be revisited next year, as State licensing matures and there is a better understanding of enforcement, taxation, and other aspects, The Planning Commission, as a part of its recommendation, would like a report, on the implementation of the Draft Ordinance, by ITEM NUMBER: C-1 DATE: 10110/17 Fall of 2018. For now, it is important to have policies in place in advance of the January 1 I deadline. ENVIRONMENTAL DETERMINATION: This action is not a project within the meaning of the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.) Section 15061 (b)(3) that the activity only applies to projects which have a potential for causing significant effect on the environment and is therefore exempt from CEQA. Additionally, the proposed Ordinance has been analyzed by City staff, for consistency with Section 15378, and the proposed Ordinance has no potential for resulting in physical change in the environment, either directly or indirectly. The proposed Ordinance will not result in any direct or indirect physical change in the environment because it does not involve an irrevocable commitment of resources by the City of Atascadero to the activity, because it is considered a ministerial action. FISCAL IMPACT: Enforcement of cannabis regulations will incur additional staff time, as City staff will need to respond to code enforcement issues and provide guidance to individuals with personal cultivation questions. ALTERNATIVES: The City Council may make modifications to the proposed Draft Ordinance. 2. The Council may determine that more information is needed, on some aspect of the Ordinance, and may refer the item back to staff to develop the additional information. The Council should clearly state the type of information that is required. A motion, and approval of that motion, is required to continue the item to a future date. 3. The Council may deny the Ordinance. Should the City Council deny the Ordinance, they will have until December 31, 2017 to implement a local Ordinance regulating adult and medical use cannabis or risk ceding control of all commercial and non-commercial cannabis use to State Law defaults. ATTACHMENTS: 1. Draft Ordinance 2. Article — Cannabis Businesses and Cash 3. Article -- Should California Start Its Own Bank? 4. Notice of Exemption