HomeMy WebLinkAboutCC_2020_11_24_Amended AgendaPacket CITY OF ATASCADERO CITY COUNCIL AMENDED AGENDA
* COVID-19 NOTICE *
Consistent with Executive Orders N-25-20 and No. N-29-20 from the
Executive Department of the State of California and the San Luis Obispo
County Health Official’s March 18, 2020 Shelter at Home Order, the City
Council Meeting will not be physically open to the public and City Council
Members will be teleconferencing into the meeting.
HOW TO OBSERVE THE MEETING:
To maximize public safety while still maintaining transparency and public access,
the meeting will be live-streamed on SLO-SPAN.org, on Spectrum cable
Channel 20 in Atascadero, and on KPRL Radio 1230AM. The video
recording of the meeting will repeat daily on Channel 20 at 1:00 am, 9:00 am, and
6:00 pm and will be available through the City’s website or by visiting
https://attendee.gotowebinar.com/rt/8539114475191636236.
HOW TO SUBMIT PUBLIC COMMENT:
Members of the public are highly encouraged to call 805-538-2888 to listen and
provide public comment via phone, or submit written public comments to
cityclerk@atascadero.org by 5:00 pm on the day of the meeting. Such email
comments must identify the Agenda Item Number in the subject line of the
email. The comments will be read into the record, with a maximum allowance of 3
minutes per individual comment, subject to the Mayor’s discretion. All comments
should be a maximum of 500 words, which corresponds to approximately 3 minutes
of speaking time. If a comment is received after the agenda item is heard but before
the close of the meeting, the comment will still be included as a part of the record of
the meeting but will not be read into the record.
AMERICAN DISABILITY ACT ACCOMMODATIONS:
Any member of the public who needs accommodations should contact the City
Clerk’s Office at cityclerk@atascadero.org or by calling 805-470-3400 at least 48
hours prior to the meeting or time when services are needed. The City will use their
best efforts to provide reasonable accommodations to afford as much accessibility
as possible while also maintaining public safety in accordance with the City procedure
for resolving reasonable accommodation requests.
City Council agendas and minutes may be viewed on the City's website:
www.atascadero.org.
Copies of the staff reports or other documentation relating to each item of business referred to on
the Agenda are on file in the office of the City Clerk and are available for public inspection on our
website, www.atascadero.org. Contracts, Resolutions and Ordinances will be allocated a number
once they are approved by the City Council. The Minutes of this meeting will reflect these numbers.
All documents submitted by the public during Council meetings that are either read into the record
or referred to in their statement will be noted in the Minutes and available for review by contacting
the City Clerk's office. All documents will be available for public inspection during City Hall business
hours once City Hall is open to the public following the termination of the Shelter at Home Order.
Page 1 of 103
CITY OF ATASCADERO
CITY COUNCIL
AMENDED AGENDA
Tuesday, November 24, 2020
City Hall Council Chambers, 4th floor
6500 Palma Avenue, Atascadero, California
REGULAR SESSION – CALL TO ORDER: 6:00 P.M.
PLEDGE OF ALLEGIANCE: Council Member Fonzi
ROLL CALL: Mayor Moreno
Mayor Pro Tem Bourbeau
Council Member Fonzi
Council Member Funk
Council Member Newsom
APPROVAL OF AGENDA: Roll Call
Recommendation: Council:
1. Approve this agenda; and
2. Waive the reading in full of all ordinances appearing on this agenda, and the titles
of the ordinances will be read aloud by the City Clerk at the first reading, after the
motion and before the City Council votes.
PRESENTATIONS: None.
A. CONSENT CALENDAR: (All items on the consent calendar are considered to be routine
and non-controversial by City staff and will be approved by one motion if no member of
the Council or public wishes to comment or ask questions. If comment or discussion is
desired by anyone, the item will be removed from the Consent Calendar and will be
considered in the listed sequence with an opportunity for any member of the public to
address the Council concerning the item before action is taken.)
1. City Council Draft Action Minutes – November 10, 2020
Recommendation: Council approve the November 10, 2020 Draft City Council
Regular Meeting Minutes. [City Clerk]
City Council Regular Session: 6:00 P.M.
Page 2 of 103
2. October 2020 Accounts Payable and Payroll
Fiscal Impact: $2,764,004.52
Recommendation: Council approve certified City accounts payable, payroll
and payroll vendor checks for October 2020. [Administrative Services]
3. Conflict of Interest Code - Biennial Review
Fiscal Impact: None.
Recommendation: Council adopt Draft Resolution, updating and amending the
Conflict of Interest Code for the City of Atascadero. [City Clerk]
UPDATES FROM THE CITY MANAGER: (The City Manager will give an oral report on any
current issues of concern to the City Council.)
COMMUNITY FORUM: (This portion of the meeting is reserved for persons wanting to
address the Council on any matter not on this agenda and over which the Council has
jurisdiction. Speakers are limited to three minutes. Please state your name for the record
before making your presentation. Comments made during Community Forum will not be a
subject of discussion. A maximum of 30 minutes will be allowed for Community Forum,
unless changed by the Council. Any members of the public who have questions or need
information may contact the City Clerk’s Office, between the hours of 8:30 a.m. and 5:00
p.m. at (805) 470-3400, or cityclerk@atascadero.org.)
B. PUBLIC HEARINGS: None.
C. MANAGEMENT REPORTS:
1. Discussion of Proposed Pickleball Courts at Colony Park
Fiscal Impact: None.
Recommendation: Council provide feedback and staff direction regarding the
proposed Pickleball Courts at Colony Park. [Public Works]
2. Cannabis Regulations Update Discussion (CPP 2020 -0011)
Fiscal Impact: None.
Recommendation: Council direct staff to conduct further analyses on commercial
cannabis uses and/or draft ordinance language to amend Title 9-Chapter 15 of
the Zoning Regulations to allow for limited commercial cannabis uses.
[Community Development]
Page 3 of 103
4. Amendment to the San Luis Obispo Regional Transit Authority Joint Powers
Agreement
Fiscal Impact: None.
Recommendation: Council approve Draft Resolution authorizing execution of
the amended and restated Joint Powers Agreement for the San Luis Obispo
Regional Transit Authority allowing consolidation of South County Transit
into the San Luis Obispo Regional Transit Authority. [City Manager]
D. DISCUSSION ITEM: Discussion of COVID 19 issues including oral updates by Mayor
Moreno and City Manager Rickard, questions by City Council, public comment and
comments by City Council.
1. Coronavirus (COVID-19) update – Mayor Moreno
2. Coronavirus (COVID-19) update – City Manager Rickard
E. COUN CIL ANNOUNCEMENTS AND COMMITTEE REPORTS: (On their own
initiative, Council Members may make a brief announcement or a brief report on their own
activities. The following represent standing committees. Informative status reports will
be given, as felt necessary):
Mayor Moreno
1. City Selection Committee
2. County Mayors Round Table
3. Economic Vitality Corporation, Board of Directors (EVC)
4. SLO Council of Governments (SLOCOG)
5. SLO Regional Transit Authority (RTA)
Mayor Pro Tem Bourbeau
1. City / Schools Committee
2. City of Atascadero Finance Committee
3. Integrated Waste Management Authority (IWMA)
4. SLO County Water Resources Advisory Committee (WRAC)
Council Member Fonzi
1. Air Pollution Control District
2. Atascadero Basin Ground Water Sustainability Agency (GSA)
3. City of Atascadero Design Review Committee
4. SLO Local Agency Formation Commission (LAFCo)
Council Member Funk
1. City of Atascadero Finance Committee
2. Homeless Services Oversight Council
3. League of California Cities – Council Liaison
Page 4 of 103
3.CDBG Traffic Way Sidewalk Accessibility and Pedestrian Ramp Project
Construction Award
Fiscal Impact:$386,296.00
Recommendations:Council:
1.Reject the bid protest of JJ Fisher Construction, Inc. and award the contract
for the construction of the CDBG Traffic Way Sidewalk Accessibility and
Pedestrian Ramp Project to G. Sosa Construction, Inc.
2.Authorize the City Manager to execute a contract with G. Sosa
Construction, Inc.for $286,385 to construct the CDBG Traffic Way
Sidewalk Accessibility and Pedestrian Ramp Project.[Public Works]
ADJOURN
Please note: Should anyone challenge any proposed development entitlement listed on this Agenda in court, that person
may be limited to raising those issues addressed at the public hearing described in this notice, or in written correspondence
delivered to the City Council at or prior to this public hearing. Correspondence submitted at this public hearing will be
distributed to the Council and available for review in the City Clerk's office.
Page 5 of 103
F. INDIVIDUAL DETERMINATION AND / OR ACTION: (Council Members may ask a
question for clarification, make a referral to staff or take action to have staff place a matter of
business on a future agenda. The Council may take action on items listed on the Agenda.)
1. City Council
2. City Clerk
3. City Treasurer
4. City Attorney
5. City Manager
Council Member Newsom
1. California Joint Powers Insurance Authority (CJPIA) Board
2. City / Schools Committee
3. City of Atascadero Design Review Committee
4. Visit SLO CAL Advisory Committee
ITEM NUMBER: A-1
DATE: 11/24/20
Atascadero City Council
November 10, 2020
Page 1 of 5
CITY OF ATASCADERO
CITY COUNCIL
DRAFT MINUTES
Tuesday, November 10, 2020
City Hall Council Chambers, 4th floor
6500 Palma Avenue, Atascadero, California
REGULAR SESSION – CALL TO ORDER: 6:00 P.M.
Mayor Moreno called the meeting to order at 6:00 p.m. and Council Member Funk led the
Pledge of Allegiance.
Council Member Fonzi, Funk, and Newsom, Mayor Pro Tem Bourbeau, Treasurer Sibbach,
and Staff wished Mayor Moreno a Happy Birthday.
ROLL CALL:
Present: By Teleconference - Council Members Fonzi, Funk, and Newsom,
Mayor Pro Tem Bourbeau, and Mayor Moreno
Absent: None
Others Present: City Treasurer Gere Sibbach
Staff Present: By Teleconference – City Manager Rachelle Rickard, Interim Police
Chief Robert Molle, Fire Chief Casey Bryson, Administrative Services
Director Jeri Rangel, Public Works Director Nick DeBar, Community
Development Director Phil Dunsmore, City Attorney Brian Pierik,
Deputy City Manager/City Clerk Lara Christensen, and IT Manager
Luke Knight
APPROVAL OF AGENDA:
MOTION: By Council Member Newsom and seconded by Council Member
Fonzi to:
1. Approve this agenda; and,
City Council Regular Session: 6:00 P.M.
Page 6 of 103
ITEM NUMBER: A-1
DATE: 11/24/20
Atascadero City Council
November 10, 2020
Page 2 of 5
2. Waive the reading in full of all ordinances appearing on this
agenda, and the titles of the ordinances will be read aloud by
the City Clerk at the first reading, after the motion and before
the City Council votes.
Motion passed 5:0 by a roll-call vote.
PRESENTATIONS: None.
A. CONSENT CALENDAR:
1. City Council Draft Action Minutes – October 27, 2020
Recommendation: Council approve the October 27, 2020 Draft City Council
Regular Meeting Minutes. [City Clerk]
2. September 2020 Investment Report
Fiscal Impact: None
Recommendation: Council receive and file the City Treasurer’s report for
quarter ending September 30, 2020. [City Treasurer]
3. Community Facilities District 2005-1 Annexation Nos. 21 & 22
Fiscal Impact: None. Assessments for the Curbaril annexation are estimated
to be between $2,800 - $3,000 annually beginning in fiscal year 2021-2022,
and adjusted each year for inflation. Assessments for the Grand Oaks Paseo
annexation are estimated to be between $19,000 - $20,000 annually beginning
in fiscal year 2021-2022, and adjusted each year for inflation. Deed restricted
affordable units are exempt from the special tax.
Recommendations: Council:
1. Adopt on second reading, by title only, Draft Ordinance A, authorizing the
levy of special taxes in Community Facilities District 2005-1 for certain
annexation territory identified as Annexation No. 21.
2. Adopt on second reading, by title only, Draft Ordinance B, authorizing the
levy of special taxes in Community Facilities District 2005-1 for certain
annexation territory identified as Annexation No. 22. [Community
Development]
4. Regional Early Action Planning (REAP) Grant Program
Fiscal Impact: Adoption of the Draft Resolution will allow the City to receive up
to $104,053 in jurisdictional REAP grant funds for City planning activities and
allows the City to act as the lead agency for regional REAP grant funds in the
amount of $181,000 to develop ADU stock plans.
Recommendation: Council approve Draft Resolution authorizing application
for and entering into agreements for the Regional Early Action Planning
(REAP) Grant program funds with the San Luis Obispo Council of
Governments (SLOCOG) and Association of Monterey Bay Area
Governments (AMBAG). [Community Development]
MOTION: By Council Member Funk and seconded by Mayor Pro Tem Bourbeau
to approve the Consent Calendar. (#A-3: Ordinance Nos. 642 and
643) (#A-4: Resolution No. 2020-078)
Motion passed 5:0 by a roll-call vote.
Page 7 of 103
ITEM NUMBER: A-1
DATE: 11/24/20
Atascadero City Council
November 10, 2020
Page 3 of 5
UPDATES FROM THE CITY MANAGER:
City Manager Rachelle Rickard gave an update on projects and issues within the City.
COMMUNITY FORUM:
The following citizens spoke by telephone during Community Forum: Brenda Mack
B. PUBLIC HEARINGS:
1. 2021-2028 Housing Element Final Draft Plan (CPP19-0067)
Fiscal Impact: None. While review of potential Housing Element policies does
not have a direct fiscal impact, changes in land-use policies will generally
produce an overall positive or negative fiscal impact for the City depending on
the policy.
Recommendation: Council adopt Draft Resolution, adopting the 2021-2028
Housing Element and submit the element to the State for certification, based on
findings. [Community Development]
Ex Parte Communications
Though no recent communications have occurred on this item, Mayor Moreno and Mayor
Pro Tem Bourbeau reported speaking with Max Zappas previously. All other Council
Members reported having no communications on this item.
Community Development Director Dunsmore gave the presentation and answered questions
from the Council. Genevieve Sharrow, MIG, also gave a presentation and answered
questions from the Council.
PUBLIC COMMENT:
The following citizens spoke by telephone on this item: None
Mayor Moreno closed the Public Comment period.
MOTION: By Mayor Pro Tem Bourbeau and seconded by Council Member Funk
to adopt Resolution No. 2020-079, adopting the 2021-2028 Housing
Element and submit the element to the State for certification, based on
findings.
Motion passed 5:0 by a roll-call vote.
C. MANAGEMENT REPORTS:
1. Atascadero Mall Plaza Construction Award
Fiscal Impact: $1,091,700.00
Recommendations: Council:
1. Council discuss and direct staff on desired design revisions for the
Atascadero Mall Plaza Project.
Page 8 of 103
ITEM NUMBER: A-1
DATE: 11/24/20
Atascadero City Council
November 10, 2020
Page 4 of 5
2. Authorize the City Manager to execute a contract with Kirk Construction in
an amount not to exceed $819,344.50 for the constructi on of the
Atascadero Mall Plaza Project subject to project design revisions as
identified by Council
3. Authorize the Director of Administrative Services to appropriate up to an
additional $616,700 in Public Facilities Fees Fund balance for FY20/21
toward the Atascadero Mall Plaza project subject to project design
revisions as identified by Council. [Public Works]
Public Works Director DeBar and Community Development Director Dunsmore gave the
presentation and answered questions from the Council.
Mayor Moreno recessed the meeting at 8:17 p.m.
Mayor Moreno reconvened the meeting with everyone present at 8:25 p.m.
PUBLIC COMMENT:
The following citizens spoke by telephone on this item: None
Mayor Moreno closed the Public Comment period.
MOTION: By Council Member Newsom and seconded by Council Member
Fonzi to:
1. Council noted that the desired design revisions for the
Atascadero Mall Plaza Project are to replace concrete seat walls
and eliminate decorative fencing and replace with bollards
(potential design revision options 3 and 5, respectively, as
presented at the meeting).
2. Authorize the City Manager to execute Contract No. 2020-013 with
Kirk Construction in an amount not to exceed $819,344.50 for the
construction of the Atascadero Mall Plaza Project subject to
project design revisions as identified by Council.
3. Authorize the Director of Administrative Services to appropriate
up to an additional $616,700 in Parkland Impact Fees Fund
balance for FY20/21 toward the Atascadero Mall Plaza project
subject to project design revisions as identified by Council.
Motion passed 5:0 by a roll-call vote.
D. DISCUSSION ITEM: Discussion of COVID 19 issues including oral updates by Mayor
Moreno and City Manager Rickard, questions by City Council, public comment and
comments by City Council.
1. Coronavirus (COVID-19) update – Mayor Moreno
2. Coronavirus (COVID-19) update – City Manager Rickard
Mayor Moreno provided updates on Coronavirus (COVID-19) and answered questions from
the Council.
Page 9 of 103
ITEM NUMBER: A-1
DATE: 11/24/20
Atascadero City Council
November 10, 2020
Page 5 of 5
PUBLIC COMMENT:
The following citizens spoke on this item: None.
Mayor Moreno closed the Public Comment period.
E. COUNCIL ANNOUNCEMENTS AND COMMITTEE REPORTS:
The following Council Members made brief announcements and gave brief update reports
on their committees since their last Council meeting:
Mayor Moreno
1. Economic Vitality Corporation, Board of Directors (EVC)
2. SLO Council of Governments (SLOCOG)
3. SLO Regional Transit Authority (RTA)
Mayor Pro Tem Bourbeau
1. Integrated Waste Management Authority (IWMA)
Council Member Fonzi
1. City of Atascadero Design Review Committee
2. SLO Local Agency Formation Commission (LAFCo)
Council Member Funk
1. Homeless Services Oversight Council
Council Member Newsom
1. City of Atascadero Design Review Committee
F. INDIVIDUAL DETERMINATION AND / OR ACTION: None
G. ADJOURN
Mayor Moreno adjourned the meeting at 8:51 p.m.
MINUTES PREPARED BY:
______________________________________
Lara K. Christensen
Deputy City Manager/City Clerk
APPROVED:
Page 10 of 103
ITEM NUMBER: A-2DATE: 11/24/20Page 11 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
3822 10/01/2020 ANTHEM BLUE CROSS HSA 7,725.06Payroll Vendor Payment
165588 10/01/2020 ATASCADERO MID MGRS ORG UNION 60.00Payroll Vendor Payment
165589 10/01/2020 ATASCADERO POLICE OFFICERS 1,916.25Payroll Vendor Payment
165590 10/01/2020 ATASCADERO PROF. FIREFIGHTERS 1,176.50Payroll Vendor Payment
165591 10/01/2020 MASS MUTUAL WORKPLACE SOLUTION 6,963.88Payroll Vendor Payment
165592 10/01/2020 NATIONWIDE RETIREMENT SOLUTION 344.38Payroll Vendor Payment
165593 10/01/2020 NAVIA BENEFIT SOLUTIONS 1,600.88Payroll Vendor Payment
165594 10/01/2020 SEIU LOCAL 620 806.49Payroll Vendor Payment
165595 10/01/2020 VANTAGEPOINT TRNSFR AGT 106099 357.85Payroll Vendor Payment
165596 10/01/2020 VANTAGEPOINT TRNSFR AGT 304633 4,228.47Payroll Vendor Payment
165597 10/01/2020 VANTAGEPOINT TRNSFR AGT 706276 296.00Payroll Vendor Payment
165598 10/01/2020 ANTHEM BLUE CROSS HEALTH 183,397.33Payroll Vendor Payment
165599 10/01/2020 LINCOLN NATIONAL LIFE INS CO 1,647.36Payroll Vendor Payment
165600 10/01/2020 MEDICAL EYE SERVICES 1,698.17Payroll Vendor Payment
165601 10/01/2020 PREFERRED BENEFITS INSURANCE 8,544.80Payroll Vendor Payment
3823 10/02/2020 STATE DISBURSEMENT UNIT 209.54Payroll Vendor Payment
3824 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 22,884.14Payroll Vendor Payment
3825 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 35,184.36Payroll Vendor Payment
3826 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 1,831.93Payroll Vendor Payment
3827 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 1,759.31Payroll Vendor Payment
3828 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 3,178.07Payroll Vendor Payment
3829 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 7,000.47Payroll Vendor Payment
3830 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 8,203.43Payroll Vendor Payment
3831 10/02/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 12,055.27Payroll Vendor Payment
3832 10/06/2020 RABOBANK, N.A.81,066.12Payroll Vendor Payment
3833 10/06/2020 EMPLOYMENT DEV DEPARTMENT 26,088.02Payroll Vendor Payment
3834 10/06/2020 EMPLOYMENT DEV. DEPARTMENT 2,154.49Payroll Vendor Payment
165602 10/09/2020 13 STARS MEDIA 359.36Accounts Payable Check
165603 10/09/2020 ALTHOUSE & MEADE, INC.1,018.75Accounts Payable Check
165604 10/09/2020 AMERICAN WEST TIRE & AUTO INC 776.72Accounts Payable Check
165605 10/09/2020 SHANNON C. ASHBY 13.30Accounts Payable Check
165606 10/09/2020 AT&T 66.39Accounts Payable Check
165607 10/09/2020 AT&T 763.16Accounts Payable Check
165608 10/09/2020 ATASCADERO CHAMBER OF COMMERCE 249.00Accounts Payable Check
165609 10/09/2020 ATASCADERO HAY & FEED 1,044.39Accounts Payable Check
165611 10/09/2020 ATASCADERO MUTUAL WATER CO.27,243.90Accounts Payable Check
165612 10/09/2020 AURORA WORLD, INC.269.41Accounts Payable Check
165613 10/09/2020 TERRIE BANISH 319.70Accounts Payable Check
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 12 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
165614 10/09/2020 BASSETT'S CRICKET RANCH,INC.667.57Accounts Payable Check
165615 10/09/2020 BAY AREA DRIVING SCHOOL, INC.15.37Accounts Payable Check
165616 10/09/2020 JOSE R. BENITEZ 120.00Accounts Payable Check
165617 10/09/2020 KEITH R. BERGHER 56.25Accounts Payable Check
165618 10/09/2020 BERRY MAN, INC.1,021.05Accounts Payable Check
165619 10/09/2020 TESSA BETZ 25.00Accounts Payable Check
165620 10/09/2020 BIG RED MARKETING, INC.4,395.00Accounts Payable Check
165621 10/09/2020 BRADS OVERHEAD DOORS, INC.150.00Accounts Payable Check
165622 10/09/2020 BRANCH SMITH PROPERTIES 350.00Accounts Payable Check
165623 10/09/2020 BURKE,WILLIAMS, & SORENSON LLP 64,938.39Accounts Payable Check
165624 10/09/2020 BURT INDUSTRIAL SUPPLY 2,562.12Accounts Payable Check
165625 10/09/2020 CA ASSC OF ZOOS & AQUARIUMS 1,300.00Accounts Payable Check
165626 10/09/2020 CALPORTLAND COMPANY 333.73Accounts Payable Check
165627 10/09/2020 CARQUEST OF ATASCADERO 129.59Accounts Payable Check
165628 10/09/2020 CHARTER COMMUNICATIONS 8,691.89Accounts Payable Check
165629 10/09/2020 CITY OF LOS ANGELES TREAS 1.10Accounts Payable Check
165630 10/09/2020 CLEVER CONCEPTS, INC.47.95Accounts Payable Check
165631 10/09/2020 COASTAL REPROGRAPHIC SERVICES 150.00Accounts Payable Check
165632 10/09/2020 CRYSTAL CLEAN A-1 WINDOW SVCS 1,700.00Accounts Payable Check
165633 10/09/2020 CRYSTAL CREAMERY, INC.182.86Accounts Payable Check
165634 10/09/2020 CRYSTAL SPRINGS WATER 20.00Accounts Payable Check
165635 10/09/2020 CULLIGAN/CENTRAL COAST WTR TRT 70.00Accounts Payable Check
165636 10/09/2020 NICHOLAS DEBAR 300.00Accounts Payable Check
165637 10/09/2020 DIVISION OF STATE ARCHITECT 42.00Accounts Payable Check
165638 10/09/2020 DRIVE CUSTOMS 891.46Accounts Payable Check
165639 10/09/2020 PHILIP DUNSMORE 300.00Accounts Payable Check
165640 10/09/2020 EIKHOF DESIGN GROUP, INC.24,356.80Accounts Payable Check
165641 10/09/2020 ELECTRICRAFT, INC.1,538.25Accounts Payable Check
165642 10/09/2020 JENNIFER FANNING 69.35Accounts Payable Check
165643 10/09/2020 FASTENAL COMPANY 1,629.61Accounts Payable Check
165644 10/09/2020 FENCE FACTORY ATASCADERO 427.05Accounts Payable Check
165645 10/09/2020 FERRAVANTI GRADING & PAVING 217,756.62Accounts Payable Check
165646 10/09/2020 FGL ENVIRONMENTAL 114.00Accounts Payable Check
165647 10/09/2020 FIESTA MAHAR MANUFACTURNG CORP 775.56Accounts Payable Check
165648 10/09/2020 FIGUEROA MOUNTAIN BREWING, LLC 245.13Accounts Payable Check
165649 10/09/2020 FRANCHISE TAX BOARD 179.00Accounts Payable Check
165650 10/09/2020 NANCY GLOYE 29.00Accounts Payable Check
165651 10/09/2020 HART IMPRESSIONS PRINTING 790.94Accounts Payable Check
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 13 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
165652 10/09/2020 HINDERLITER, DE LLAMAS 1,976.31Accounts Payable Check
165653 10/09/2020 JOHN HOLDER 167.49Accounts Payable Check
165654 10/09/2020 HOME DEPOT CREDIT SERVICES 2,123.28Accounts Payable Check
165655 10/09/2020 IRON MOUNTAIN RECORDS MGMNT 113.45Accounts Payable Check
165656 10/09/2020 JOE A. GONSALVES & SON 3,000.00Accounts Payable Check
165657 10/09/2020 K & M INTERNATIONAL 1,022.54Accounts Payable Check
165658 10/09/2020 K.B. INDUSTRIES, INC.1,076.40Accounts Payable Check
165659 10/09/2020 KPRL 1230 AM 875.00Accounts Payable Check
165660 10/09/2020 KRITZ EXCAVATING & TRUCKNG INC 660.33Accounts Payable Check
165661 10/09/2020 L.A. CO SHERIFF'S DEPARTMENT 485.00Accounts Payable Check
165662 10/09/2020 LAYNE LABORATORIES, INC.2,208.88Accounts Payable Check
165663 10/09/2020 COLETTE LAYTON 1,037.15Accounts Payable Check
165664 10/09/2020 LEE WILSON ELECTRIC CO. INC 1,797.55Accounts Payable Check
165665 10/09/2020 LIFE ASSIST, INC.1,611.89Accounts Payable Check
165666 10/09/2020 LONE MADRONE 936.00Accounts Payable Check
165667 10/09/2020 MADRONE LANDSCAPES, INC.1,682.00Accounts Payable Check
165668 10/09/2020 MARBORG INDUSTRIES 62.28Accounts Payable Check
165669 10/09/2020 MICHAEL K. NUNLEY & ASSC, INC.4,719.69Accounts Payable Check
165670 10/09/2020 MID-COAST MOWER & SAW, INC.81.88Accounts Payable Check
165671 10/09/2020 MINER'S ACE HARDWARE 244.50Accounts Payable Check
165672 10/09/2020 MISSION UNIFORM SERVICE 300.45Accounts Payable Check
165673 10/09/2020 MNS ENGINEERS, INC.3,103.75Accounts Payable Check
165674 10/09/2020 JULIAN A. MORA 850.00Accounts Payable Check
165675 10/09/2020 MV TRANSPORTATION, INC.6,757.64Accounts Payable Check
165676 10/09/2020 NASSAU-SOSNICK DISTRIBUTION CO 267.68Accounts Payable Check
165677 10/09/2020 NBS 6,964.53Accounts Payable Check
165678 10/09/2020 ANDRES J. NUNO 5,495.00Accounts Payable Check
165679 10/09/2020 OFFICE DEPOT INC.208.41Accounts Payable Check
165680 10/09/2020 TARA ORLICK 27.60Accounts Payable Check
165683 10/09/2020 PACIFIC GAS AND ELECTRIC 58,910.76Accounts Payable Check
165684 10/09/2020 PEAKWIFI, LLC 650.00Accounts Payable Check
165685 10/09/2020 PROCARE JANITORIAL SUPPLY,INC.998.48Accounts Payable Check
165686 10/09/2020 PRP COMPANIES 1,539.23Accounts Payable Check
165687 10/09/2020 QUINCY ENGINEERING, INC.11,286.35Accounts Payable Check
165688 10/09/2020 SHIRLEY L. RADCLIFF-BRUTON 37.80Accounts Payable Check
165689 10/09/2020 RAINSCAPE, A LANDSCAPE SVC CO.7,460.36Accounts Payable Check
165690 10/09/2020 JERI RANGEL 300.00Accounts Payable Check
165691 10/09/2020 RACHELLE RICKARD 500.00Accounts Payable Check
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 14 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
165692 10/09/2020 SAN LUIS POWERHOUSE, INC.2,454.94Accounts Payable Check
165693 10/09/2020 SANTA MARIA TIRE, INC.2,574.34Accounts Payable Check
165694 10/09/2020 SLO BREWING CO., LLC 300.00Accounts Payable Check
165695 10/09/2020 SLO COUNTY SHERIFF'S OFFICE 4,600.00Accounts Payable Check
165696 10/09/2020 SMART AND FINAL 106.26Accounts Payable Check
165697 10/09/2020 SOFTWAREONE, INC.36,871.69Accounts Payable Check
165698 10/09/2020 SOUTHERN COMPUTER WAREHOUSE 420.99Accounts Payable Check
165699 10/09/2020 SPEAKWRITE, LLC.703.26Accounts Payable Check
165700 10/09/2020 SPECIALIZED EQUIPMENT REPAIR 750.26Accounts Payable Check
165701 10/09/2020 STANLEY CONVERGENT SECURITY 355.50Accounts Payable Check
165702 10/09/2020 SUNLIGHT JANITORIAL, INC.2,661.00Accounts Payable Check
165703 10/09/2020 SUNSET SERVICE CENTER 150.86Accounts Payable Check
165704 10/09/2020 TARANTULA HILL BREWING CO. LLC 300.00Accounts Payable Check
165705 10/09/2020 THOMSON REUTERS - WEST 170.00Accounts Payable Check
165710 10/09/2020 U.S. BANK 28,941.71Accounts Payable Check
165711 10/09/2020 ULTREX LEASING 260.76Accounts Payable Check
165712 10/09/2020 UNITED STAFFING ASSC., INC.4,847.04Accounts Payable Check
165713 10/09/2020 VERDIN 5,646.69Accounts Payable Check
165714 10/09/2020 VERIZON WIRELESS 3,507.02Accounts Payable Check
165715 10/09/2020 VISITOR TELEVISION LLC 595.00Accounts Payable Check
165716 10/09/2020 JOSEPH WANN 64.30Accounts Payable Check
165717 10/09/2020 WARM FUZZY TOYS 374.56Accounts Payable Check
165718 10/09/2020 WCJ PROPERTY SERVICES 537.00Accounts Payable Check
165719 10/09/2020 WEX BANK - 76 UNIVERSL 11,787.68Accounts Payable Check
165720 10/09/2020 WEX BANK - WEX FLEET UNIVERSAL 6,209.89Accounts Payable Check
165721 10/09/2020 WILD FIELDS BREWHOUSE 3,208.27Accounts Payable Check
165722 10/09/2020 WILKINS ACTION GRAPHICS 126.71Accounts Payable Check
165723 10/09/2020 WISHPETS CO.201.67Accounts Payable Check
165724 10/09/2020 ZOOM IMAGING SOLUTIONS, INC.1,142.35Accounts Payable Check
3835 10/15/2020 ANTHEM BLUE CROSS HSA 7,725.06Payroll Vendor Payment
165725 10/15/2020 ATASCADERO MID MGRS ORG UNION 60.00Payroll Vendor Payment
165726 10/15/2020 ATASCADERO POLICE OFFICERS 1,916.25Payroll Vendor Payment
165727 10/15/2020 ATASCADERO PROF. FIREFIGHTERS 1,176.50Payroll Vendor Payment
165728 10/15/2020 MASS MUTUAL WORKPLACE SOLUTION 6,978.89Payroll Vendor Payment
165729 10/15/2020 NATIONWIDE RETIREMENT SOLUTION 233.14Payroll Vendor Payment
165730 10/15/2020 NAVIA BENEFIT SOLUTIONS 1,600.88Payroll Vendor Payment
165731 10/15/2020 SEIU LOCAL 620 816.58Payroll Vendor Payment
165732 10/15/2020 VANTAGEPOINT TRNSFR AGT 106099 357.85Payroll Vendor Payment
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 15 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
165733 10/15/2020 VANTAGEPOINT TRNSFR AGT 304633 3,642.33Payroll Vendor Payment
165734 10/15/2020 VANTAGEPOINT TRNSFR AGT 706276 296.00Payroll Vendor Payment
3836 10/16/2020 STATE DISBURSEMENT UNIT 209.54Payroll Vendor Payment
3837 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 23,778.30Payroll Vendor Payment
3838 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 35,315.59Payroll Vendor Payment
3839 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 1,788.14Payroll Vendor Payment
3840 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 1,974.67Payroll Vendor Payment
3841 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 3,160.07Payroll Vendor Payment
3842 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 7,131.53Payroll Vendor Payment
3843 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 7,862.93Payroll Vendor Payment
3844 10/19/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 12,929.65Payroll Vendor Payment
3845 10/20/2020 RABOBANK, N.A.78,188.97Payroll Vendor Payment
3846 10/20/2020 EMPLOYMENT DEV DEPARTMENT 24,941.56Payroll Vendor Payment
3847 10/20/2020 EMPLOYMENT DEV. DEPARTMENT 2,272.11Payroll Vendor Payment
165735 10/23/2020 13 STARS MEDIA 597.40Accounts Payable Check
165736 10/23/2020 A.P.S. AUTOMOTIVE 283.10Accounts Payable Check
165737 10/23/2020 ADAMSKI,MOROSKI,MADDEN,512.50Accounts Payable Check
165738 10/23/2020 ADVANCED INFRASTRUCTURE TECHN 1,058.20Accounts Payable Check
165739 10/23/2020 AGM CALIFORNIA, INC.1,641.00Accounts Payable Check
165740 10/23/2020 AGP VIDEO, INC.6,467.50Accounts Payable Check
165741 10/23/2020 ALTHOUSE & MEADE, INC.5,393.00Accounts Payable Check
165742 10/23/2020 AMERICAN WEST TIRE & AUTO INC 2,859.48Accounts Payable Check
165743 10/23/2020 KELLY AREBALO 1,108.90Accounts Payable Check
165744 10/23/2020 DAVID ARNESEN 6,835.66Accounts Payable Check
165745 10/23/2020 SHANNON C. ASHBY 26.60Accounts Payable Check
165746 10/23/2020 ASSOCIATED TRAFFIC SAFETY, INC 372.49Accounts Payable Check
165748 10/23/2020 AT&T 1,364.44Accounts Payable Check
165749 10/23/2020 AT&T 374.43Accounts Payable Check
165750 10/23/2020 AT&T 250.00Accounts Payable Check
165751 10/23/2020 ATASCADERO HAY & FEED 1,045.00Accounts Payable Check
165752 10/23/2020 BANK OF NEW YORK MELLON 1,925.00Accounts Payable Check
165753 10/23/2020 DEMI BARTOLOMEO 161.00Accounts Payable Check
165754 10/23/2020 BASSETT'S CRICKET RANCH,INC.539.73Accounts Payable Check
165755 10/23/2020 BEAR MARKET RIOT, LLC 300.00Accounts Payable Check
165756 10/23/2020 BERRY MAN, INC.687.05Accounts Payable Check
165757 10/23/2020 BRANCH SMITH PROPERTIES 350.00Accounts Payable Check
165758 10/23/2020 BUREAU VERITAS NORTH AMERICA 1,365.00Accounts Payable Check
165759 10/23/2020 CA BUILDING STANDARDS COMM.261.90Accounts Payable Check
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 16 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
165760 10/23/2020 CA DEPT OF TAX AND FEE ADMIN.3,451.00Accounts Payable Check
165761 10/23/2020 CAL-COAST IRRIGATION, INC 554.80Accounts Payable Check
165762 10/23/2020 CALPORTLAND COMPANY 631.74Accounts Payable Check
165763 10/23/2020 KEVIN CAMPION 2,200.00Accounts Payable Check
165764 10/23/2020 CCI OFFICE TECHNOLOGIES 64.29Accounts Payable Check
165765 10/23/2020 CENTRAL COAST BREWING, INC.795.60Accounts Payable Check
165766 10/23/2020 CHARTER COMMUNICATIONS 2,543.19Accounts Payable Check
165767 10/23/2020 CLAY'S SEPTIC & JETTING, INC.5,186.96Accounts Payable Check
165768 10/23/2020 COUNTY OF SAN LUIS OBISPO 5,000.00Accounts Payable Check
165769 10/23/2020 CREWSENSE, LLC 286.71Accounts Payable Check
165770 10/23/2020 DARRYL'S LOCK AND SAFE 181.00Accounts Payable Check
165771 10/23/2020 DEPARTMENT OF CONSERVATION 974.60Accounts Payable Check
165772 10/23/2020 DRIVE CUSTOMS 5,211.04Accounts Payable Check
165773 10/23/2020 EARTH SYSTEMS PACIFIC 2,682.00Accounts Payable Check
165774 10/23/2020 ELECTRICRAFT, INC.6,578.24Accounts Payable Check
165775 10/23/2020 FARM SUPPLY COMPANY 675.55Accounts Payable Check
165776 10/23/2020 FASTENAL COMPANY 738.91Accounts Payable Check
165777 10/23/2020 FERRELL'S AUTO REPAIR 87.73Accounts Payable Check
165778 10/23/2020 FGL ENVIRONMENTAL 1,243.00Accounts Payable Check
165779 10/23/2020 FUNFLICKS CENTRAL COAST 555.45Accounts Payable Check
165780 10/23/2020 GAS COMPANY 284.81Accounts Payable Check
165781 10/23/2020 GMV SYNCROMATICS 9,500.00Accounts Payable Check
165782 10/23/2020 HAMNER, JEWELL & ASSOCIATES 17,658.82Accounts Payable Check
165783 10/23/2020 ROCHELLE O. HANSON-TORRES 86.25Accounts Payable Check
165784 10/23/2020 HART IMPRESSIONS PRINTING 413.28Accounts Payable Check
165785 10/23/2020 HINDERLITER, DE LLAMAS 300.00Accounts Payable Check
165786 10/23/2020 IMPACT ABSORBENTS, INC.2,111.89Accounts Payable Check
165787 10/23/2020 JIFFY LUBE 120.73Accounts Payable Check
165788 10/23/2020 JK'S UNLIMITED, INC.6,504.02Accounts Payable Check
165789 10/23/2020 KPRL 1230 AM 1,195.00Accounts Payable Check
165790 10/23/2020 LEE WILSON ELECTRIC CO. INC 1,638.80Accounts Payable Check
165791 10/23/2020 LIFE ASSIST, INC.2,896.09Accounts Payable Check
165792 10/23/2020 M SPECIAL BREWING, LLC 364.00Accounts Payable Check
165793 10/23/2020 MATTHEW MADRIGAL 1,071.00Accounts Payable Check
165794 10/23/2020 TRISTAN MARSEILLES 2,371.00Accounts Payable Check
165795 10/23/2020 BECKY MAXWELL 38.30Accounts Payable Check
165796 10/23/2020 MCCROMETER, INC.5,461.07Accounts Payable Check
165797 10/23/2020 MID-COAST MOWER & SAW, INC.82.47Accounts Payable Check
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 17 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
165798 10/23/2020 MINER'S ACE HARDWARE 520.89Accounts Payable Check
165799 10/23/2020 MINNESOTA ZOO 170.00Accounts Payable Check
165800 10/23/2020 MISSION UNIFORM SERVICE 505.22Accounts Payable Check
165801 10/23/2020 JULIAN A. MORA 520.00Accounts Payable Check
165802 10/23/2020 KYLE NAKAZAWA 1,071.00Accounts Payable Check
165803 10/23/2020 NATIONAL AUTO FLEET GROUP 29,048.25Accounts Payable Check
165804 10/23/2020 NEW TIMES 782.00Accounts Payable Check
165805 10/23/2020 NORTH COAST ENGINEERING INC.294.00Accounts Payable Check
165806 10/23/2020 ROCIO OCHOA 1,188.00Accounts Payable Check
165807 10/23/2020 OFFICE DEPOT INC.96.34Accounts Payable Check
165808 10/23/2020 O'REILLY AUTOMOTIVE, INC.82.29Accounts Payable Check
165809 10/23/2020 PASO ROBLES SAFE & LOCK, INC.150.00Accounts Payable Check
165810 10/23/2020 PERRY'S PARCEL & GIFT 7.43Accounts Payable Check
165811 10/23/2020 PRAXAIR DISTRIBUTION, INC.468.20Accounts Payable Check
165812 10/23/2020 PROCARE JANITORIAL SUPPLY,INC.673.08Accounts Payable Check
165813 10/23/2020 PROFORCE LAW ENFORCEMENT 1,404.09Accounts Payable Check
165814 10/23/2020 QUADIENT, INC.692.55Accounts Payable Check
165815 10/23/2020 SHIRLEY L. RADCLIFF-BRUTON 86.39Accounts Payable Check
165816 10/23/2020 RAMINHA CONSTRUCTION, INC.12,150.00Accounts Payable Check
165817 10/23/2020 READYREFRESH BY NESTLE 166.42Accounts Payable Check
165818 10/23/2020 RECOGNITION WORKS 80.81Accounts Payable Check
165819 10/23/2020 CHRISTOPHER R. ROBINSON 1,071.00Accounts Payable Check
165820 10/23/2020 ERIN RUSSELL 200.00Accounts Payable Check
165821 10/23/2020 SAN LUIS OBISPO CO ARTS COUNCL 5,000.00Accounts Payable Check
165822 10/23/2020 SAN LUIS POWERHOUSE, INC.270.00Accounts Payable Check
165823 10/23/2020 SERVICE SYSTEMS ASSC, INC.2,500.00Accounts Payable Check
165824 10/23/2020 SLO CO AUDITOR CONTROLLER 36.00Accounts Payable Check
165825 10/23/2020 SLO COUNTY HEALTH AGENCY 81,104.50Accounts Payable Check
165826 10/23/2020 SOUTH COAST EMERGENCY VEH SVC 13.62Accounts Payable Check
165827 10/23/2020 STATE WATER RES CONTROL BOARD 2,709.00Accounts Payable Check
165828 10/23/2020 SUNSET SERVICE CENTER 122.82Accounts Payable Check
165829 10/23/2020 TERRA VERDE ENVIRONMENTAL CONS 347.50Accounts Payable Check
165830 10/23/2020 ULTREX BUSINESS PRODUCTS 80.93Accounts Payable Check
165831 10/23/2020 UNITED RENTALS (NORTH AM), INC 9,311.50Accounts Payable Check
165832 10/23/2020 UNITED STAFFING ASSC., INC.1,211.76Accounts Payable Check
165833 10/23/2020 BRIAN VAZQUEZ 1,071.00Accounts Payable Check
165834 10/23/2020 VERDIN 991.10Accounts Payable Check
165835 10/23/2020 VERIZON WIRELESS 248.29Accounts Payable Check
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 18 of 103
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of October 2020
165836 10/23/2020 WALLACE GROUP 10,097.50Accounts Payable Check
165837 10/23/2020 WELL SEEN SIGN CO., LLC 80.81Accounts Payable Check
165838 10/23/2020 WHITLOCK & WEINBERGER TRANS.1,140.00Accounts Payable Check
165839 10/23/2020 ZEE MEDICAL SERVICES CO.220.56Accounts Payable Check
3848 10/29/2020 ANTHEM BLUE CROSS HSA 8,505.06Payroll Vendor Payment
3849 10/30/2020 STATE DISBURSEMENT UNIT 209.54Payroll Vendor Payment
3850 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 22,129.73Payroll Vendor Payment
3851 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 34,655.35Payroll Vendor Payment
3852 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 1,906.29Payroll Vendor Payment
3853 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 2,009.57Payroll Vendor Payment
3854 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 3,160.07Payroll Vendor Payment
3855 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 7,176.53Payroll Vendor Payment
3856 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 8,203.43Payroll Vendor Payment
3857 10/30/2020 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 12,759.45Payroll Vendor Payment
$1,662,859.83
ITEM NUMBER: A-2
DATE: 11/24/20
ATTACHMENT: 1
Page 19 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
Atascadero City Council
Staff Report - City Clerk
Conflict of Interest Code - Biennial Review
RECOMMENDATION:
Council adopt Draft Resolution, updating and amending the Conflict of Interest Code for
the City of Atascadero.
DISCUSSION:
The Political Reform Act requires every local government agency to review its Conflict
of Interest Code biennially and Government Code Section 87306 requires an agency to
amend its Conflict of Interest Code when change is necessitated by changed
circumstances, including the creation of new positions/titles and the deletion of old
ones. The Political Reform Act requires that any amendments to the Conflict of Interest
Code be adopted no later than December 30, 2020.
The Conflict of Interest Code is a document that designates the positions within an
agency that make, or participate in making, governmental decisions that may
foreseeably have a material effect on any financial interest. The Code further sets out,
in paragraphs called disclosure categories, the specific types of investments, business
positions, interest in real property and sources of income that must be reported by the
designated positions.
Though reviewed biennially, the Conflict of Interest Code has not been updated since
2014. Over the past two years, the City Council has approved amendments to the
City’s Classification Plan. These approved amendments resulted in positions being
eliminated or re-named and new positions being added. Following review of the City’s
current Conflict of Interest Code, it was determined that amendments were nec essary to
reflect these changes. Furthermore, Fair Political Practices Commission (FPPC)
guidance for the review of a Conflict of Interest Code suggests reconsideration of
disclosure categories to ensure that disclosure category assignments adequately
differentiate between positions and should not be overly broad. Using the model
disclosure categories posted on the FPPC website, as well as examples provided by the
City Attorney, staff is recommending amending the Code to include more detailed
disclosure categories.
Page 20 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
This Conflict of Interest Code pertains only to the designated positions listed in Exhi bit A
to the Draft Resolution. The Council Members, City Treasurer, Planning
Commissioners, City Manager and City Attorney are exempt from this Code as they are
otherwise required to file disclosure statements pursuant to State Law under Govt.
Code 87200.
The City Clerk and the City Attorney have reviewed the current Code. The proposed
amendments to the Conflict of Interest Code incorporate the basic provisions required
by Government Code Section 87302 and comply with FPPC regulations. The revised
list contains a list of designated positions that make , or participate in making,
governmental decisions. Designated positions have been appropriately assigned to
suitable disclosure categories that reflect job duties and responsibilities. The
recommended changes reflect the current staffing of the City of Atascadero.
FISCAL IMPACT:
None.
ALTERNATIVES:
The Code must be updated. The Council is free to add positions to the Code or to
suggest any other changes, so long as the changes comply with the Political Reform
Act.
ATTACHMENT:
Draft Resolution
Page 21 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
ATTACHMENT: 1
DRAFT RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, ADOPTING AN AMENDED
CONFLICT OF INTEREST CODE
WHEREAS, the Political Reform Act requires every local government agency to review its
Conflict of Interest Code biennially (in even-numbered years) to determine if it is accurate and
up-to-date, or, alternatively, that the Code must be amended; and
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Atascadero as follows:
SECTION 1. Resolution No. 2014-063, adopted on September 23, 2014, is hereby
rescinded.
SECTION 2. That the Conflict of Interest Code attached to this Resolution as Exhibit A
be, and hereby is, adopted as the Conflict of Interest Code for the City of Atascadero.
PASSED AND ADOPTED at a regular meeting of the City Council held on the ___th day
of_______, 2020.
On motion by Council Member ___________ and seconded by Council Member
________, the foregoing Resolution is hereby adopted in its entirety on the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
CITY OF ATASCADERO
______________________________
Heather Moreno, Mayor
ATTEST:
______________________________________
Lara K. Christensen, City Clerk
APPROVED AS TO FORM:
______________________________________
Brian A. Pierik, City Attorney
Page 22 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
ATTACHMENT: 1A
CONFLICT OF INTEREST CODE
OF THE
CITY OF ATASCADERO
The Political Reform Act, Government Code Section 81000, et. seg., requires state and
local government agencies to adopt and promulgate conflict of interest codes. The Fair
Political Practices Commission has adopted a regulation, 2 Cal. Code of Regs. Section
18730, which contains the terms of a standard conflict of in terest code. It can be
incorporated by reference and may be amended by the Fair Political Practices
Commission after public notice and hearings to conform to amendments in the Political
Reform Act. Therefore, the terms of 2 Cal. Code of Regs. Section 187 30 and any
amendments to it duly adopted by the Fair Political Practices Commission are hereby
incorporated by reference and, along with the attached Appendix in which members and
employees are designated and disclosure categories are set forth, constitute the conflict
of interest code of the City of Atascadero.
Designated employees shall file their statements with the City of Atascadero who will
make the statements available for public inspection and reproduction (Gov. Code
Section 81008). Statements for all designated employees will be retained by the City of
Atascadero.
Page 23 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
ATTACHMENT: 1A
DESIGNATED EMPLOYEES AND DISCLOSURE CATEGORIES
The following positions entail the making or participation in the making of decisions which
foreseeably may have a material effect on financial interests:
Designated Position1 Disclosure Category:
Administrative Services Director 1
City Clerk 1 2
Community Development Director 1
Community Services Director 1
Consultants (who make or participate in making of governmental decisions)2 1
Consultants (who perform the duties of a designated position)2 Same
category as the comparable
designated position
Deputy Administrative Services Director 1
Deputy City Manager 1
Deputy Community Development Director 1
Deputy Community Development Director/Chief Building
Official/Economic Development Director 1
Deputy Public Works Director 1
Exempt Officials3 1
Fire Chief 1
Fire Battalion Chief 1
Fire Marshal 1 3, 4, 6
Information Technology Manager 1 4, 6
New Positions4 1
Police Chief 1
Police Lieutenant 1
Public Works Director / City Engineer 1
Zoo Director 1 5, 6
Members of all permanent City Commissions, Boards 1 2
and Committees not otherwise required to file
Conflict of Interest Statements
Fire Captain (all specialist designations) 2 5, 6
Police Commander 2
Police Sergeant (all designations) 2 5, 6
1 In the event that State law or regulations regarding the filing of Conflict of Interest Statements should be amended, this
Exhibit shall be changed to include the designated position and category of each official as required by said amendment.
2 Consultants (see Definitions) who make or participate in making governmental decisions shall disclose pursuant to
the broadest disclosure category in the Code . However, the City Manager may determine in writing that a particular
consultant, although a “designated position,” is hired to perform a range of duties that is limited in scope and thus is
not required to fully comply with the disclosure requirements described in the section. Such written determination
shall include a description of the consultant’s duties and, based upon that description, a statement of the extent of
disclosure requirements. The City Manager's determination is a public record and shall be retained for public inspection
by the City Clerk in the same manner and location as this Conflict of Interest Code.
3 Exempt Officials include the Mayor, Members of the City Council, City Treasurer, Members of the Planning
Commission, City Manager, and City Attorney, who are all otherwise required to file disclosure statements pursuant
to State Law.
4. New positions that make or participate in making governmental decisions are required to file under the broadest
disclosure category in the City’s Conflict of Interest Code. If the new position performs limited duties, the City
Manager may tailor the disclosure requirements to the duties performed. If the City Manager provides tailored
disclosure, a written description of the position's duties and, based upon that description, a statement of the extent
of disclosure requirements must be completed as detailed for Consultants above.
Page 24 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
ATTACHMENT: 1A
CATEGORIES OF REPORTABLE ECONOMIC INTERESTS
Designated Persons in Category "1" Must Report:
All investments, interests in real property, income, and any business entity in which the
person is a director, officer, partner, trustee, employee, or holds any position of
management. These financial interests are reportable only if located within and subject to
the jurisdiction of the City, or if the business entity is doing business or planning to do
business in an area subject to the jurisdiction of the City, or has done business within an
area subject to the jurisdiction of the City at any time during the two years prior to the filing
of the statement.
Designated Persons in Category "2" Must Report:
(1) All interests in real property which is located in whole or in part within, or not more
than two (2) miles outside the jurisdiction of the City.
(2) Investments in any business entity that, within the last two years, has contracted or in
the future foreseeably may contract with the City.
(3) Income from any source that, within the last two years, has contracted or in the future
foreseeably may contract with the City.
(4) His or her status as a director, officer, partner, trustee, employee, or holder of a
position of management in any business entity that, within the last two years, has
contracted or in the future foreseeably may contract with the City.
Designated persons in Category “3” Must Report:
All investments and business positions in business entities, and sources of income,
including gifts, loans and travel payments, that a re engaged in development,
construction, appraisal, or the acquisition or sale of real property within the jurisdiction
of the City.
Designated persons in Category “4” Must Report:
All investments and business positions in business entities, and sources o f income,
including gifts, loans and travel payments, that provide services, supplies, materials,
machinery, vehicles or equipment of a type utilized by the City.
Designated persons in Category “5” Must Report:
All investments and business positions in bu siness entities, and sources of income,
including gifts, loans and travel payments, that provide services, supplies, materials,
machinery, vehicles or equipment of a type purchased or leased by the designated
position’s department, unit, or division.
Page 25 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
ATTACHMENT: 1A
Designated persons in Category “6” Must Report:
All investments and business positions in business entities, and sources of income,
including gifts, loans and travel payments, that are subject to the regulatory, permit, or
licensing authority of the designated position’s department, unit, or division.
DEFINITIONS
CONSULTANTS
(See Title 2 California Code of Regulations, section 18700.3)
Consultants means those individuals who, pursuant to a contract with the City make (not
just recommend) governmental decisions such as whether to approve a rate, rule or
regulation; to issue, deny suspend, or revoke any permit, license application, certificate or
similar authorization; adopt or grant City approval to a plan, design report, study or similar
item; adopt or grant City approval of policies, standards, or guidelines for the City or any
subdivision thereof; grant approval to a contract or the specifications thereof; or adopt or
enforce any law.
Consultants also means those who serve in a staff capacity with the City, and in that
capacity perform the same or substantially all the same duties for the City that would
otherwise be performed by an individual holding a designated position in the City’s Conflict
of Interest Code.
Consultants also means those who serve in a staff capacity and participate in the making
of a governmental decision by providing information, an opinion, or a recommendation to
any governmental decision-maker (including, but not limited to, the City Manager or any
other City staff with contracting authority) without significant intervening substantive
review.
INCOME
(See Government Code section 82030)
(A) "Income" means (except as provided in subdivision B):
A payment received, including but not limited to any salary, wage, advance,
dividend, interest, rent, proceeds from any sale, gift, including any gift of food or
beverage, loan, forgiveness or payment of indebtedness received by the flier,
reimbursement for expenses, per diem, or contribution to an insurance or pension
program paid by any person other than an employer, and including any community
property interest in the income of a spouse. Income also includes an outstanding
loan. Income of an individual also includes a pro rata share of any income of any
business entity or trust in which the individual or spouse owns, directly, indirectly or
beneficially, a 10 percent interest or greater. "Income," other than a gift, does not
include income received from any source outside the jurisdiction and not doing
business within the jurisdiction, not planning to do business within the having done
business within the jurisdiction during the two years prior to the time any statement
or other action is required under this title.
Page 26 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
ATTACHMENT: 1A
(B) "Income" does not include:
(1) Campaign contributions required to be reported under Chapter 4 (commencing
with Section 84100).
(2) Salary and reimbursement for expenses or per diem received from a state,
local, or federal government agency and reimbursement for travel expenses and per diem
received from a bona fide educational, academic, or charitable organization.
(3) Any devise or inheritance.
(4) Interest, dividends, or premiums on a time or demand deposit in a financial
institution, shares in a credit union or any insurance policy, payments received under any
insurance policy, or any bond or other debt instrument issued by any government or
government agency.
(5) Dividends, interest, or any other return on a security which is registered with the
Securities and Exchange Commission of the United States Government or a commodity
future registered with the Commodity Futures Trading Commission of the United States
Government, except proceeds from the sale of these securities and commodities futures.
(6) Redemption of a mutual fund.
(7) Alimony or child support payments.
(8) Any loan or loans from a commercial lending institution which are made in the
lender's regular course of business on terms available to members of the public without
regard to official status if:
(a) Used to purchase, refinance the purchase of, or for improvements to, the
principal residence of flier; or
(b) The balance owed does not exceed ten thousand dollars ($10,000).
(9) Any loan from an individual's spouse, child, parent, grandparent, grandchild,
brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, uncle, aunt, or
first cousin, or the spouse of any such person, provided that a loan from any such person
shall be considered income if the lender is acting as an agent or intermediary for any
person not covered by this paragraph.
(10) Any indebtedness created as part of a retail installment or credit card
transaction if made in the lender's regular course of business on terms available to
members of the public without regard to official status, so long as the balance owed to the
creditor does not exceed ten thousand dollars ($10,000).
(11) Payments received under a defined benefit pension plan qualified under
Internal Revenue Code Section 401(a).
Page 27 of 103
ITEM NUMBER: A-3
DATE: 11/24/20
ATTACHMENT: 1A
(12) Proceeds from the sale of securities registered with the Securities and
Exchange Commission of the United States Government or from the sale of commodities
futures registered with the Commodity Futures Trading commission of the United States
Government if the flier sells the securities or the commodities futures on a stock or
commodities exchange and does not know or have reason to know the identity of the
purchaser.
Page 28 of 103
ITEM NUMBER: A-4
DATE: 11/24/20
Atascadero City Council
Staff Report - City Manager
Amendment to the San Luis Obispo Regional Transit Authority
Joint Powers Agreement
RECOMMENDATION:
Council approve Draft Resolution authorizing execution of the amended and restated
Joint Powers Agreement for the San Luis Obispo Regional Transit Authority allowing
consolidation of South County Transit into the San Luis Obispo Regional Transit
Authority.
DISCUSSION:
The City of Atascadero is a member of the San Luis Obispo Regional Transit Authority
(RTA) Joint Powers Authority (JPA). Other members of the RTA JPA include the cities of
Arroyo Grande, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and Atascadero
as well as the County of San Luis Obispo.
The RTA provides regional intercity fixed route transit services and regional Americans
with Disability Act complementary paratransit services. Route 9 transit services along El
Camino Real in Atascadero are provided b y the RTA. Costs for core operations of the
RTA are funded by fares, grants, dedicated funding sources and contributions from
County of SLO and the seven cities in the County. Required contributions from the
jurisdictions are set by formula as follows: County of SLO (49%), City of SLO (18%),
remaining 6 cities are allocated based on relative population. In fiscal year 2019/2020,
the City of Atascadero contributed just over $350,000 of Local Transportation Funds to
fund operations of the RTA.
Although the City is not a member of the South County Transit JPA, it is being asked to
execute amendments to the RTA Joint Powers Agreement that would allow consolidation
of South County Transit (Soco Transit) services into the RTA. The four South County
Transit JPA member agencies include the cities of Arroyo Grande, Grover Beach and
Pismo Beach, as well as the County of San Luis Obispo. Following significant analysis
by RTA and San Luis Obispo Council of Governments (SLOCOG) staff members over
the past several years, as well as recommendations by the Triennial Performance Auditor
and the three South County City Managers, the South County Transit Board of Directors
requested consolidation into the RTA at its January 9, 2018 meeting. At its March 7, 2018
meeting, the RTA Board of Directors conceptually agreed to the consolidation, pending
further input from each jurisdiction and planned April 4, 2018 actions by the SLOCOG
ITEM NUMBER: A-4
DATE: 11/24/20
Board of Directors (discussed below).
Of particular interest to the four SoCoTransit member jurisdictions is the issue of
continued local control over the local fixed -route services operated within the Five Cities
Area under consolidation. To that end, local fixed-route service levels (days, hours,
routes, etc.), marketing efforts, and operating/capital budgets for South County local
fixed-routes would be solely controlled through a new standing RTA South County Transit
Committee (SCTC). The SCTC would be comprised of the RTA Board members from the
cities of Grover Beach, Arroyo Grande and Pismo Beach, as well as one member from
the Board of Supervisors. As detailed in the attached amended and restated RTA Joint
Powers Agreement, the SCTC would meet at least annually to address public transit
issues of interest to the SCTC members and to consider t he following year’s budget for
local public transit services in the Five Cities Area. Funding of the services authorized by
the SCTC would be borne exclusively by the cities of Arroyo Grande, Grover Beach and
Pismo Beach, as well as the County on behalf of the communities of Oceano and Avila
Beach.
Consolidation of SoCo Transit local fixed-route services into the RTA has significant net
financial benefits for the SoCo Transit jurisdictions. In addition, SLOCOG agreed to a
concession at its April 4, 2018 m eeting on farebox recovery ratio requirements under
consolidation in the Arroyo Grande – Grover Beach Urbanized Area that will have long-
term financial benefits for the RTA and the SCTC member jurisdictions. The principal
benefit to the SCTC member jurisdictions is that consolidation would avoid a roughly
$70,000 annual penalty for failing to achieve the new/higher State of California 20%
farebox recovery ratio requirement that was triggered by the Federal designation of the
area as “urban” in the 2010 Census (it was 10% prior to the urban designation). In
summary, while some operating costs would increase under consolidation (principally as
it relates to provision of healthcare benefits to six current part -time SoCo Transit
employees who do not currently have health insurance), the on-going net benefit to the
SCTC member jurisdictions is anticipated to be on the order of $82,000 annually.
Each jurisdiction must approve amendments to the RTA joint powers agreement. The
attached resolution authorizes the City Manager to execute the proposed amendment to
the JPA Agreement. A red-lined version depicting changes to the amended and restated
Joint Powers Agreement is included as part of the resolution. The changes outlined in
amended Agreement are:
Establish and set forth the operations of the South County Transit Committee
(SCTC)
Establish that changes to public transportation operated solely within the Arroyo
Grande – Grover Beach Urbanized Area require approval of three board
members on the SCTC
Provide for the separation of SCTC services and core services
Add specific authority to the RTA to purchase insurance and to develop policies
and procedures necessary to comply with federal funding requirements.
In order to separate out financing for SCTC services and core services, Article III, Section
1 states “Core RTA services include intercity fixed-routes along the US-101 and SR-1
corridors, and regional Americans with Disabilities Act complementary paratransit
ITEM NUMBER: A-4
DATE: 11/24/20
services.” Because this definition is vague and does not seem to encompass all of the
services currently provided by RTA, staff has asked the RTA to consider better defining
what will and won’t be a core service that is covered under the fixed formula funding. RTA
and SLOCOG staff agreed to work on a more appropriate definition of core services over
the coming year. The RTA staff was also able to verify that Route 9 along El Camino
Real is, and will be, considered a core service for the foreseeable future.
The effective date for the transition would be on January 1, 2021. This date was chosen
because it corresponds with the annual start date of employees’ healthcare plans, and
thus would minimize disruptions for valued former SoCo Transit employees.
FISCAL IMPACT:
None.
ATTACHMENT:
Draft Resolution
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1
DRAFT RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, AUTHORIZING EXECUTION OF THE
AMENDED AND RESTATED JOINT POWERS AGREEMENT FOR THE
SAN LUIS OBISPO REGIONAL TRANSIT AUTHORITY
WHEREAS, South County Transit provides fixed-route public transportation services in the
cities of Arroyo Grande, Grover Beach and Pismo Beach, as well as the unincorporated area of
Oceano, as authorized under a Joint Powers Agreement originally enacted in 1978 and subsequently
amended in 2001 and 2016; and
WHEREAS, South County Transit has been provided professional administrative services,
vehicle maintenance and operations oversight under contract to the San Luis Obispo Regional Transit
Authority since 1997; and
WHEREAS, both South County Transit Board of Directors and the San Luis Obispo
Regional Transit Authority Board of Directors have extensively discussed the possibility of
consolidating South County Transit into the San Luis Obispo Regional Transit Authority to realize
cost efficiencies and to avoid farebox recovery ratio penalties in the South County Transit service
area; and
WHEREAS, the San Luis Obispo Regional Transit Authority Board of Directors will
consider an amended and restated Joint Powers Agreement that consolidates South County Transit
services into the agency at its December 2, 2020 meeting; and
WHEREAS, the amended and restated Joint Powers Agreement for the San Luis Obispo
Regional Transit Authority includes provisions that allow local control of service levels and budgetary
control for fixed-route services in the Arroyo Grande – Grover Beach Urbanized Area, which includes
the cities of Arroyo Grande, Grover Beach and Pismo Beach, as well as the unincorporated
communities of Avila Beach and Oceano; and
WHEREAS, the amended and restated Joint Powers Agreement for the San Luis Obispo
Regional Transit Authority becomes effective at 12:00 AM on January 1, 2021 upon ratification by
the County of San Luis Obispo Board of Supervisors and by each of the seven City Councils in the
county; and
WHEREAS, the existing South County Area Transit Joint Powers Agreement states that the
Agency may sell, lease or assign all of its real and personal property and may cease operations upon
such terms and conditions as the Board determines to be reasonable and upon affirmative vote by all
member agencies; and
WHEREAS, the existing South County Area Transit Joint Powers Agreement also states that
the Agreement shall continue in full force and effect until cancelled by affirmative vote of a majority
of the member agencies, and
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1
WHEREAS, the South County Transit Board of Directors resolved at its October 6, 2020
meeting to terminate the South County Area Transit Joint Powers agreement effective 11:59 PM on
December 31, 2020 upon ratification of the majority of the member agencies and upon full ratification
of the amended and restated Joint Powers Agreement for the San Luis Obispo Regional Transit
Authority by its member agencies.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Atascadero:
SECTION 1. The City Council hereby finds and determines that all of the recitals are true
and correct.
SECTION 2. The City Council supports consolidation of South County Transit into the
San Luis Obispo Regional Transit Authority.
SECTION 3. The City Manager is directed to execute a San Luis Obispo Regional Transit
Authority amended and restated Joint Powers Agreement in substantial conformance with
Attachment A on file in the office of the City Clerk and incorporated herein by this reference.
PASSED AND ADOPTED at a regular meeting of the City Council held on the ___th day
of_______, 2020.
On motion by Council Member ___________ and seconded by Council Member ________,
the foregoing Resolution is hereby adopted in its entirety on the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
CITY OF ATASCADERO
______________________________
Heather Moreno, Mayor
ATTEST:
______________________________________
Lara K. Christensen, City Clerk
APPROVED AS TO FORM:
______________________________________
Brian A. Pierik, City Attorney
1
SAN LUIS OBISPO REGIONAL TRANSIT AUTHORITY
JOINT POWERS AGREEMENT
WITNESSETH:
This Agreement is made and entered into this 9 th day of March, 1990, and
amended on 2nd day of September, 1998, and further amended on the 24th day of June,
2013, by and among the incorporated cities of Arroyo Grande, Atascadero, El Paso de
Robles, Grover Beach, Morro Bay, Pismo Beach and San Luis Obispo, all being
municipal corporations in the County of San Luis Obispo, California (hereinafter called
“Cities”) and the County of San Luis Obispo, a body politic and corporate, and a
subdivision of the State of California, (hereinafter called “County”).
WHEREAS, Section 6500 et seq. of the California Government Code (Title 1,
Div. 7, Chapter 5, Article 1) provides for agreements between two or more public
agencies to jointly exercise any power common to the contracting parties, subject to
certain mandatory provisions contained therein; and
WHEREAS, the Cities and County have previously entered into a joint powers
agreement for the formation of the San Luis Obispo Council of Governments for the
purpose of providing, among other things, for a regional transportation agency; and
WHEREAS, the San Luis Obispo Council of Governments, at a regularly held
meeting on May 10, 1989, voted to consolidate the administration of several
transportation systems through a regional transit joint powers agreement.
WHEREAS, the cities of Arroyo Grande, Grover Beach and Pismo Beach, and
the County of San Luis Obispo, were formerly members of the South County Area
Transit Joint Powers Agency which began operating a public transit system within those
jurisdictions in January, 1978, and which ceased to exist and transferred its assets to
the San Luis Obispo Regional Transit Authority in return for amendments made to this
Agreement effective January 1, 2021.
NOW THEREFORE, it is agreed as follows:
ARTICLE I
General Provisions
Section 1. Purpose: The purpose of this Agreement is to exercise the common
powers of the member agencies for the formation of a Joint Powers Agreement with full
power and authority to own, operate and administer a county-wide public transportation
system within the boundaries and over the territory over which the Joint Powers Agency
has jurisdiction.
Section 2. Name: The official name of the entity shall be San Luis Obispo
Regional Transit Authority and hereafter referred to as the RTA.
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
2
ARTICLE II
Organization
Section 1. Board Members: The membership of the RTA Governing Board shall
be the same as the membership of the San Luis Obispo Council of Governments
(hereinafter referred to as SLOCOG).
Section 2. Board Meetings - Voting - Quorum: Regular meetings shall be
generally held in the first week of July, September, November, January, March and May
or as specified in a biannually adopted meeting calendar. Special meetings may be
called by the President or upon written request of at least three (3) members of the RTA
Board.
Voting and quorum provisions shall be the same as those provided in the
SLOCOG Joint Powers Agreement, however, any vote regarding local fixed-route
services or other public transportation services operated solely within the Arroyo
Grande – Grover Beach Urbanized Area, including the budgeting and funding of such
services, shall require at least three affirmative votes from Board members who also sit
on the South County Transit Committee.
Section 3. Officers: The officers of SLOCOG shall serve as officers of RTA.
Section 4. Executive Director: The RTA Board shall designate an Executive
Director to operate the RTA. The Executive Director shall serve at the pleasure of the
RTA Board, with delegated powers to certify documents of the RTA Board as required
by the law and to assume such duties and responsibilities as the Board may direct.
Section 5. Members:
1. The County of San Luis Obispo and all cities incorporated in the County of
San Luis Obispo presently or in the future, are declared eligible for
membership.
2. Member city agencies may elect to have an alternate member(s) from
their city council in addition to any official member, but said alternate(s)
shall be able to vote only in the absence of the official representative.
3. Membership shall be contingent upon the execution of this Joint Powers
Agreement.
Section 6. Boundaries and Service Levels: The service area boundaries shall be
all of the area within the boundaries of San Luis Obispo County as designated by the
RTA Board. Any additional services beyond the level recommended by the Regional
Transportation Plan or mandated in the Unmet Transit Needs Hearing (PUC Section
99401.5) may be instituted, but shall require unanimous approval of affected
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
3
jurisdictions, with costs for the extra service to be distributed on the basis of formula
developed by the RTA Board members representing the affected jurisdictions.
Section 7. Committees:
1. Committees and subcommittees may be established as RTA may deem
appropriate.
2. Membership on “ad-Hoc” policy committees shall be at the discretion of
the President. Nothing herein shall be construed to limit membership on
these aforesaid committees to officials of the member agencies. The
President may appoint any individual deemed qualified to serve on a
committee.
3. Standing committees shall include the:
a. Regional Transit Advisory Committee (RTAC) serving as a
Regional Transit Productivity Committee to advise the Board on the
efficiency and effectiveness of the transit system.
b. An Executive Committee comprised of the President, Vice
President and the past President and at least one representatives
from the county of San Luis Obispo (if none of the above) shall
advise the Executive Director and RTA on: draft agendas,
personnel issues, budget and Overall Work Program; controversial,
sensitive and major policy issues; and shall facilitate the annual
performance evaluation of the Executive Director. Items for review
shall be selected by the Executive Director in consultation with the
President. All Committee members may include agenda items as
they desire. For purposes of conducting business, two members
shall constitute a quorum.
c. South County Transit Committee (SCTC) comprised of RTA Board
members representing the four jurisdictions included in the Arroyo
Grande – Grover Beach Urbanized Area as defined in the 2010
Decennial Census (hereinafter referred to as the AG-GB UZA). The
SCTC member jurisdictions include the cities of Arroyo Grande,
Grover Beach and Pismo Beach, and the County of San Luis
Obispo, representing the Oceano Area and the Avila Beach Area.
The SCTC’s roles and responsibilities include:
i. The SCTC shall effectively control local fixed-route
services and any other public transportation services
operated solely within the AG-GB UZA by virtue of the
voting requirements for matters provided above in
Section 2 of Article II.
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
4
ii. At a minimum, the SCTC shall meet annually to consider
annual service levels, fare levels, major marketing
campaigns, capital improvement plans, and to ratify
financial commitments for each jurisdiction participating
in public transportation services operated solely within
the AG-GB UZA. At the request of two or more SCTC
members, properly noticed special SCTC meetings may
also be conducted.
iii. For purposes of conducting business, three of the four
SCTC members shall constitute a quorum.
iv. The SCTC shall submit an annual operating budget and
multi-year capital improvement plan for fixed-route and
other public transportation services operated solely within
the AG-GB UZA to the full RTA Board prior to May 1 for
consideration as part of the RTA Overall Annual Budget.
v. Any additional services beyond the level recommended
by the Regional Transportation Plan or mandated in the
annual Unmet Transit Needs Hearing (PUC Section
99401.5) may be instituted in the SCTC service area, but
shall require unanimous approval of affected jurisdictions,
with costs for the extra service to be distributed on the
basis of a formula developed by the SCTC members
representing the affected jurisdictions.
vi. Each SCTC member agency shall make an annual
Transportation Development Act contribution based upon
the percentage of total SCTC-served population related
to the area served within that member agency. All
population percentages utilized shall be those annually
adopted by the San Luis Obispo Council of Governments
for allocating Transportation Development Act Funds
based annually on estimates prepared by the State
Department of Finance pursuant to Section 2227 of the
Revenue and Taxation Code for Cities and by the County
Planning and Building Department for unincorporated
communities.
i.vii. Any member of the SCTC may withdraw from the SCTC
after providing written notice to the RTA Board President
one year in advance of the requested withdrawal date. A
withdrawing member’s financial obligation under this
subsection is limited to the withdrawing member’s pro-
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
5
rata share of the currently adopted SCTC operating
budget within the service area of the obligated
commitments affecting the withdrawing member and any
San Luis Obispo Council of Governments finding as to
Unmet Transit Needs that are Reasonable to Meet
pursuant to Public Utilities Code Section 99401.5.
However, the obligations of a withdrawing member under
this subsection are limited to the special transportation
funds to which the withdrawing member would be
entitled, such as Transportation Development Act funds,
and this section shall not impose any obligation on the
general funds of the withdrawing member.
4. No committee shall commit the RTA on any matter or questions of policy.
Such matters or questions can only be decided by the RTA.
5. All committees shall receive clerical assistance from RTA staff and, by
agreement, SLOCOG staff for the purpose of maintaining minutes of
meetings and other such duties as the Executive Director may direct. The
chair of each committee shall sign the original copy of the minutes
indicating verification of contents upon committee approval. Copies of
minutes of all meetings shall be sent to members of the RTA and the
Executive Director.
ARTICLE III
Financial Provisions
Section 1. Budget: The Executive Director shall prepare an Overall Annual
Budget annual budget for RTA Board adoption prior to commencement of each fiscal
year. The Overall Annual Budget shall include financial details on core RTA services, as
well as financial details for those various public transportation services provided under
agreement to other agencies. Core RTA services include intercity fixed-routes along the
US-101 and SR-1 corridors, and regional Americans with Disabilities Act
complementary paratransit services. The approval of the Overall Annual Budget shall be
in accordance with those procedures prescribed by the Joint Powers Agreement of
SLOCOG.
The annual operating and capital budgets for non-core services provided under
agreement to another agency requires ratification by its governing body prior to
consideration of the Overall Annual Budget by the RTA Board.
Accounting practices to be applied will conform to those used by San Luis
Obispo County, consistent with Transportation Development Act rules and regulations.
A Consolidated Fund balance and cash balance for RTA core services will carry
forward from one year to the next. Separate Consolidated Fund balances and cash
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
6
balances will be maintained for public transportation services provided by RTA under
agreement to other agencies, including those public transportation services provided
under the direction of the SCTC.
The Overall Annual Budget may additionally carry funds for future fiscal years
where necessary to develop a multi-year Capital Improvement Program and to reflect
obligations under state or federal funding agreements, to the extent allowable by
California law.
No member Agency shall be required to expend any of its general fund monies to
support the operations of the RTA. The operation of the transit system shall be funded
from revenues derived from operations, member Transportation Development Act fund
contributions, grants, and any other appropriate revenue sources. Each member agency
shall make an annual contribution to the RTA in accordance with the adopted budget.
Any formula may be amended upon approval of all jurisdictions affected by that
formula and ratified by the RTA.
All population percentages utilized shall be those annually adopted by SLOCOG
for allocating Transportation Development Act Funds based annually on estimates
prepared by the State Department of Finance pursuant to Section 2227 of the Revenue
and Taxation Code for cities and by the County Planning and Building Department for
unincorporated communities.
Section 2. Expenditures: The RTA may establish procedures and policies to
insure competitive prices for the purchases of goods and services. Formal bidding shall
not be required unless directed specifically by the RTA or unless required by state or
federal law. Particularly in the purchase of equipment, including buses, the RTA may
consider the design, maintenance and operating costs, and other similar factors in
determining the most suitable equipment and need not purchase equipment having the
lowest initial cost.
Section 3. Treasurer and Auditor: Pursuant to Government Code Section 6505.5,
the Treasurer of the County of San Luis Obispo is hereby designated as Treasurer of
the RTA. The Treasurer shall have the powers and duties set forth in Gove rnment Code
Section 6505.5. The Auditor/Controller of the County of San Luis Obispo is designated
as the Auditor of the RTA pursuant to Government Code Section 6505.5.
Section 4. Annual Audit: The RTA shall cause an annual audit to be prepared
and filed in accordance with Government Code Section 6505 and Public Utilities Code
Section 99245. This audit shall include RTA core services, as well as those service
provided under agreement for other agencies.
Section 5. Annual Report: The Executive Director shall prepare and submit an
annual report of the operations to the RTA Board, SLOCOG and State Controller within
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
7
90 days of the by January 31 following each fiscal year pursuant to Public Utilities Code,
Section 99243.
Section 6. Periodic Reporting: The RTA Board may require periodic reporting of
ridership, finances, or other information. This periodic reporting shall include RTA core
services, as well as those service provided under agreement to other agencies. It shall
be the responsibility of the Executive Director to provide such reports in a form
acceptable to the RTA Board.
ARTICLE IV
Authority
Section 1. Powers: The RTA shall have all Powers necessary to carry out the
purpose of this Agreement, except the power to tax. Its power to expend funds shall be
limited only by the availability of funds as set forth in ARTICLE III: Finances, Section 1.
The Powers of the RTA specifically include, but are not limited to, the following:
1. To solicit bids and negotiate contracts from private enterprise for services
and/or operation.
2. To sue or be sued.
3. To employ agents, employees and contract for professional services.
4. To make and enter contracts, including labor, purchase agreement and
employment contracts.
5. To acquire, convey, construct, manage, maintain and operate necessary
equipment, building and improvements.
6. To acquire and convey real and personal property.
7. To incur debts, liabilities and obligations, as well as obligations of financial
assistance from State and Federal agencies, and to obligate RTA to
operate the improvements, equipment or transportation system in
accordance with the terms and conditions of said financial assistance.
8. To purchase insurance.
7.9. To develop policies and procedures necessary to remain in compliance
with Federal Transit Administration Section 5307 Urbanized Area Formula
Program and other federal grant program funding requirements.
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
8
Section 2. RTA is a Public Legal Entity: The RTA is a public entity duly formed
and existing under the laws of the State of California. It is a separate and distinct legal
entity from its member agencies. The debts, duties and obligations created pursuant to
this Agreement, shall be solely the obligations of the RTA and not those of its officers,
employees, members of the Board of Directors or the member agencies.
ARTICLE V
Miscellaneous Provisions
Section 1. Withdrawal of Member: A withdrawing member’s financial obligation
under this Section is limited to the withdrawing member’s pro-rata share of the currently
adopted operating budget based upon ARTICLE III, Section 1 within the service area of
the obligated commitments affecting the withdrawing member and any SLOCOG’s
finding as to unmet transit needs that are reasonable to meet pursuant to Public Utilities
Code Section 99401.5.
Section 2. Amendment of Agreement: No amendment to this Agreement shall be
made without the consent of all member agencies at the time of the amendment.
Section 3. Ratification - Effective Date: This Agreement shall be deemed
effective as to those parties executing this Aagreement upon their execution of the
Aagreement.
Section 4. Assignability: In the event it is deemed in the best public interest to
have the RTA operated by another individual or entity, whether public or private, and
provided that the assignment complies with State and Federal laws, the agency RTA on
affirmative vote of the majority in accordance with Section 2 of ARTICLE II, may sell,
lease or assign all of its real and personal property and cease operations upon such
terms and conditions as the RTA determines to be reasonable.
Section 5. Termination: This Agreement shall continue in full force and effect until
rescinded by a majority of the member agencies.
Section 6. Notification to Secretary of State: Pursuant to Government Code
Section 6503.5, the RTA shall cause a notice of the execution of this Agreement to be
prepared and filed with the Office of the Secretary of the State of California, within thirty
(30) days after the effective date of any amendment to this Agreement. Until such filings
are completed, the RTA shall not incur indebtedness of any kind.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first hereinabove written.
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
9
City of Arroyo Grande
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
City of Atascadero
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
City of Grover Beach
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
City of Morro Bay
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
City of Paso Robles
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
City of Pismo Beach
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
City of San Luis Obispo
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
10
County of San Luis Obispo
By: ___________________________ Date:______________________
___________________________ Resolution No._______________
Clerk
Approved as to form and legal effect:
RITA L. NEAL
County Counsel
By: ___________________________
DeputyAssistant County Counsel
Date: __________________________
ITEM NUMBER: A-4
DATE: 11/24/20
ATTACHMENT: 1A
ITEM NUMBER: C-1
DATE: 11/24/20
Atascadero City Council
Staff Report – Public Works Department
Discussion of Proposed Pickleball Courts at Colony Park
RECOMMENDATION:
Council provide feedback and staff direction regarding the proposed Pickleball Courts at
Colony Park.
DISCUSSION:
Background
About two years ago, Council and staff were contacted by residents representing the
Atascadero Pickleball Club to request additional pickleball courts at Colony Park.
Currently, there are no dedicated pickleball facilities at Colony Park or at any other City
park. Pickleball participants play in the Colony Park Community Center gymnasium and
on the outdoor basketball courts. In December of 2019, the City Council approved
changes to the Colony Park master plan to set aside space for 3 to 4 Pickleball courts.
The Council did not direct staff to appropriate funds at that time , but said that it would be
amenable to discussing a funding partnership with the Atascadero Pickleball at some
time in the future.
Since the Council meeting a year ago, pickleball, fund raising by the Atascadero
Pickleball Club and construction of the pickleball courts have all been affected by
COVID. Pickleball is currently being played only on the outdoor basketball courts
although the hope is to be able to open the Gym to pickleball in the future. Fund
raising opportunities have been hampered by COVID restrictions and construction
prices have seen some significant increases.
Representatives from the Atascadero Pickleball Club have expressed frustration with
increasing estimated construction costs and the lack of a formal funding partnership
agreement with the City.
Site Design Analysis
Pickleball has become a very popular sport over the last ten years, particularly among
older adults. Pickleball is played as doubles or singles with a paddle and plastic ball
with holes. This sport combines many elements of tennis, badminton, and ping -pong.
Pickleball is played indoors or outdoors on a badminton -sized court with a slightly
modified tennis net. The playing area for pickleball measures 20 feet by 44 feet, with a
recommended buffer area of 5 feet and 8 feet outside the sidelines and baselines,
Page 29 of 103
ITEM NUMBER: C-1
DATE: 11/24/20
respectively. The minimum recommended total hard surface dimension needed for one
pickleball court with buffer areas is 30 feet by 60 feet. These dimensions can be
increased, if desired, to provide greater buffer distance to fencing, walls, and other
physical barriers.
Pickleball is currently played in the Community Center gymnasium (three courts) and
outside on the basketball courts (three courts). There is a request for three to four
additional pickleball courts to accommodate the growing demand of this popular sport.
The Master Plan for Colony Park was changed 11 months ago to accommodate
additional pickleball courts in an area adjacent to the basketball courts and petanque
court (see map below).
Page 30 of 103
ITEM NUMBER: C-1
DATE: 11/24/20
The proposed pickleball court location is currently being used as a temporary material
storage yard for Public Works and is located just north of Lift Station No. 5 and south of
the lift station’s overflow pond area. The overflow pond is currently accessed by
vehicles (trucks, mowers and a bulldozer one to two times per year) through the area
slated for the Pickleball courts. Access to the overflow pond will be built into the Project
either through an alternative access point or by designing the courts to allow for limited
vehicle traffic. The alternative access to the overflow pond near A -Town State Park
appears to be feasible and will require a culvert extension and new fence gate. This
alternative access will eliminate the need to design the court pavement for loading from
vehicles and heavy equipment. While the lift station and overflow pond are static and
cannot be relocated without significant cost s, the temporary material storage yard can
and will be combined with other nearby Public Works storage yards. This proposed
location is relatively flat and can accommodate four pickleball courts as designed below.
The above layout shows four courts with 34-foot by 64-foot dimensions with a 10-foot
wide walkway bisecting through the middle to a 10 -foot by 20-foot seating area. The
total court plus walkway dimension is 66 -feet by 138-feet. Eight-foot high fencing would
be installed around the perimeter and four-foot high fencing on either side of the
walkway and between courts. A concrete sidewalk would also be installed on the west
side for access to the courts.
Page 31 of 103
ITEM NUMBER: C-1
DATE: 11/24/20
Estimated Project Costs
There is currently no funding source identified in the budget to construct pickleball
courts if the Council decides to move forward with these facilities at Colony Park. The
Pickleball Club is continuing to raise funds and has obtained $42,669 to date in funding,
pledges and donations labor and materials as follows:
Cash (Bank): $ 36,525
GoFundMe (Cash): $ 3,144
Home Depot Gift Card: $ 3,000
Total: $ 42,669
In addition, the Club has applied for the f ollowing grants and waiting for award results:
Justin Community Grant ($50,000), Home Depot ($12,000), and Adidas Corporation. In
addition the Club has secured either donations of services or discounted prices for
services as follows:
Pledge for North Coast Engineering to complete the grading and drainage plans
Pledge by Dane Jensen to complete all soil and concrete testing for a firm price
of $2,500
Pledge by Central Coast Fencing for fencing, including setting poles for $20 to
$25 a linear foot.
The value of the services donated to the Atascadero Pickleball Club would bring down
the City Project scope and total cash outlay for the Project.
The Pickleball Courts Project proposes construction of four outdoor pickleball courts,
built to meet the size and construction methods standards of the USA Pickleball
Association. Primary construction items include general site preparation, construction
of concrete slab (138’ x 66’) and associated concrete access pathways, court surfacing
(textured acrylic coating), perimeter fencing (8’ height) and court separation fencing (4’
height). (The estimate does not include costs for permanent nets, poles or storage
facilities.) Staff currently estimates construction project costs to be as follows:
UNIT TOTAL
No.ITEM QUAN UNIT PRICE PRICE
Civil
1 MOBILIZATION 1 LS 1,500.00$ $1,500.00
2 WATER POLLUTION CONTROL PLAN/TREE PROTECTION 1 LS 1,500.00$ $1,500.00
3 EXCAVATION / EARTHWORK 300 CY 30.00$ $9,000.00
4 REMOVE FENCE 120 LF 20.00$ $2,400.00
5 INSTALL DRAINAGE SYSTEM 1 LS 2,500.00$ $2,500.00
6 CONSTRUCT CONCRETE SIDEWALK (4" CONCRETE/4" CL 2 BASE)1425 SF 15.00$ $21,375.00
7 CONSTRUCT CONCRETE COURTS (6" CONCRETE/6" CL 2 BASE)8700 SF 20.00$ $174,000.00
8 COURT SURFACING 8700 SF 3.00$ $26,100.00
9 DECOMPOSED GRANITE SURFACING 10 TN 60.00$ $600.00
10 FENCING (4' HEIGHT)265 LF 25.00$ $6,625.00
11 FENCING (8' HEIGHT - NO SLATS)140 LF 40.00$ $5,600.00
12 FENCING (8' HEIGHT - SLATTED)300 LF 50.00$ $15,000.00
$266,200.00CONSTRUCTION TOTAL:
Page 32 of 103
ITEM NUMBER: C-1
DATE: 11/24/20
Total project costs including contingencies would bring total project costs to almost
$350,000 as follows:
EST. COST
15,000$
266,200$
51,800$
17,000$
TOTAL PROJECT COSTS 350,000$
BUDGET ITEM
SURVEY, ENGINEERING
CONSTRUCTION
CONSTRUCTION CONTINGENCY (15%)
CONSTRUCTION STAKING, INSPECTION & CONSTRUCTION MANAGEMENT
This is a rough estimated cost based on other bids the City has received for projects.
The City of Santa Maria, in partnership with the Santa Maria Pickleball Club and
Partners for Leisure and Youth, are completing a project to build six new Pickleball
Courts. The cost of the Santa Maria project is estimated to finish at roughly $125,000
which is significantly less than the current staff estimate for the proposed four courts.
The actual cost of the Project will vary significantly either up or down depending on:
1. Thickness of Base and Concrete - The thickness of the base and the concrete will
be a significant determining factor in the cost per square feet for the concrete. The
Santa Maria courts were constructed using 3” of concrete on a 3” base. The current
estimate includes 6” of concrete on 6” of base. There are a number of factors that
will go into determining the “right” base and concrete for the courts:
Soil Composition - The soil make-up and existing soil compaction will play
a significant role in determining the thickness of the required base and
concrete. Complete soils testing has not been performed at the site.
Driveable - If alternative access to the overflow pond cannot be built, the
courts will need to be designed and built to withstand the necessary vehicles
and bulldozers driving across the courts a couple of times per year.
Upfront Costs vs. Future Maintenance Costs - In general, assuming the
same soil composition and use, the thinner the base and concrete, the
more prone the surface is to cracking and heaving. This may mean more
frequent and costly repairs.
2. Post-tension Slab - The Atascadero Pickleball Club desires that the courts be built
using a post-tension slab construction. This type of construction will be significantly
more costly than most reinforced concrete, but should be more resistant to cracking
and have lower maintenance costs in the long-run.
3. Total Area to be Surfaced - Typically the larger the area that will be surfaced, the
more expensive the project will be. The six Santa Maria courts are on a slab that is
100’ x 110’. The four courts proposed in the Project are currently designed on a
138’ x 66’ slab to accommodate the spacing needs requested by the Atascadero
Pickleball Club.
4. Bidding Environment - The number of projects being constructed and the availability
of labor and materials have a significant impact on the prices that the City can
expect to see in their bids.
Page 33 of 103
ITEM NUMBER: C-1
DATE: 11/24/20
Staff estimates that eliminating the post tension slab and reducing the thickness of the
concrete from 6” to 4” would bring down the estimated construction cost of the Project to
just under $200,000 with an overall projected Project cost of around $250,000; however,
the thinner concrete may lead to slab cracking in the future. Reductions in the size
around the pickleball courts and a good bidding environment could further reduce costs.
The Atascadero Pickleball Club also believes that with the support and partnerships that
they have built, that the cost of the Project will be significantly lower than the current
staff estimated Project costs.
City Funding
In the past, the City has collaborated with local groups request ing park facilities. Below
is a list of recent City/Community partnership park expansion projects and the relative
financial contribution of each.
Project Park City
Joy Playground Colony Park 47.3%52.7%
ALPS Three Bridges Trail Open Space 24.8%75.2%
Zoo Education Center/Thelma Vetter
Red Panda Exhibit Lake Park 50.0%50.0%Est.
Lake Well Project Lake Park 0.0%100.0%
Lake Aeration System Lake Park 0.0%100.0%
Bocce Ball Courts Colony Park 0.0%100.0%
Petanque Courts Colony Park 0.0%100.0%
Horseshoe Pits Paloma Park 0.0%100.0%
Skate Park Insulation Project Colony Park 0.0%100.0%
Skate Park OutdoorFacility Colony Park 0.0%100.0%
Community
At other times, the City has been able to use grant funding and impact fees to complete
projects without significant community participation.
Project Park City
The Plaza New Park Area 100.0%0.0%
Centennial Plaza Centennial Plaza 100.0%0.0%
Stadium Park Easement Stadium Park 100.0%0.0%
Paloma Park Purchase Paloma Park 100.0%0.0%
Community
The City collects Parkland Facilities Fees Funds from new development to help build
new or expand existing park facilities. These funds have historically been used to
partner with community groups such as the Atascadero Pickleball Club in order to
leverage limited funds to build new facilities to serve the public. There currently is a
small unallocated balance in the Parkland Facilities Fees Fund and there are significant
development projects in process that are expected to pay Parkland Facilities Fees
Funds within the next year or two. Since adoption of the current fees the City has
received anywhere from $68,000 - $612,000 in any fiscal year; however in most
average building years, the City will collect about $150,000 in Parkland Impact Fees.
Page 34 of 103
ITEM NUMBER: C-1
DATE: 11/24/20
Conclusion
The Atascadero Pickleball Club has been fundraising for the courts, but they have
asked for a City financial commitment to the Project. The City does have available
Parkland Impact Fees to partner with the Atascadero Pickleball Ball Club simila r to other
park projects. Staff is looking for Council direction on both the design of the pickleball
courts and direction on whether to bring back a formal funding partnership agreement
and appropriation.
FISCAL IMPACT:
None. Council will be providing direction to staff which has no fiscal impact.
ATTACHMENTS:
None.
Page 35 of 103
ITEM NUMBER: C-2
DATE: 11/24/20
Atascadero City Council
Staff Report – Community Development Department
Cannabis Regulations
Update Discussion
(CPP 2020-0011)
RECOMMENDATION:
Council direct staff to conduct further analyses on commercial cannabis uses and/or draft
ordinance language to amend Title 9-Chapter 15 of the Zoning Regulations to allow for
limited commercial cannabis uses.
REPORT-IN-BRIEF:
In May of 2020, the City Council gave direction to staff to examine the options for an
update to the City’s Cannabis Regulations with the addition of commercial cannabis
business types. The business types consisted of the following:
Commercial cultivation (Indoor)
Cannabis manufacturing (non-volatile materials)
Distribution centers
Staff has evaluated the potential land use factors and tax revenues associated with these
business types. Retail cannabis uses remain the predominant tax revenue genera ting
land uses for most regions. However, commercial cultivation and manufacturing can
account for up to 25% of the tax revenue associated with cannabis. The demand for
cannabis business as a commercial land use, is primarily associated with retail uses,
while manufacturing and cultivation space demand tends to be less frequent. However,
as retail uses expand on the central coast, the cultivation and manufacturing uses may
increase and begin to catch up with the revenue currently found in retail.
Currently, the City allows for retail cannabis deliveries from businesses that are based
outside of the City. There are currently eight such delivery businesses that are licensed
to deliver both medical and recreational cannabis in Atascadero. The City’s existing
ordinance can be modified to allow other commercial land uses if it is determined that
these land uses are an appropriate fit for Atascadero and that any potential impacts can
be adequately addressed through code requirements or use permit conditions .
Page 36 of 103
ITEM NUMBER: C-2
DATE: 11/24/20
DISCUSSION:
Background
In 2017, the City Council adopted a new ordinance regulating cannabis activities that
repealed Title 9, Chapter 6, Section 9-6.186, Medical Marijuana Facilities, of the
Atascadero Municipal Code. 9-6.186 was replaced with an entire new Chapter (Chapter
17), Cannabis Activities and Regulations. The existing ordinance contains cannabis
definitions, personal cultivation standards, and a review process to allow for commercial
cannabis activities, including a land use table indicating permitted zoning for each land use.
The City also developed cannabis land use buffer maps that included 600-foot buffers from
sensitive land uses should the ordinance be expanded to include additional cannabis land
uses (Attachment 2). Sensitive land uses include parks, youth centers, and schools.
Churches were not included in the buffer map but may be considered a sensitive use if
utilized as a school or youth center. Other than testing labs, all other commercial cannabis
activities are prohibited in the City. However, at this time, no testing labs have located in
the City. The State of California requires that local jurisdictions allow for cannabis delivery
services, whether or not the jurisdiction allows for commercial cannabis activities.
Chapter 17 was developed in a fashion that would allow for code updates in the future and
to incorporate legal and regulatory developments. Since the adoption of Chapter 9-17, the
Council also voted to adopt a Cannabis Tax Measure (Municipal Code Chapter 3-18), which
allowed the City to adopt a tax based on business gross receipts and square footage of
plant canopy. Taxes are currently being collected for retail delivery businesses that are
licensed to deliver cannabis products in Atascadero. As of the end of the previous fiscal
year, the City has collected approximately $11,000 from eight licensed delivery services
that are located outside of the City. That amount is expected to increase as additional
delivery services obtain City business licenses. Many of the existing businesses did not
obtain City licenses or begin paying taxes until the middle of the fiscal year.
Cannabis Land Uses in Atascadero
In May of 2020, Council decided to re-examine the existing Cannabis Ordinance and
evaluate the potential for other commercial cannabis business land uses in the City.
Based on this discussion, the following recommendations were made for further analysis
of commercial cannabises in the City:
Retail storefront: No changes and examine at a future date.
Mobile Dispensaries with no storefront: No changes and examine at a future
date.
Manufacturing with volatile facilities: No changes and examine at a future date.
Manufacturing with non-volatile facilities: Consider changes to allow non-
volatile manufacturing. Analyze market demand, job creation, and potential tax
revenue share.
Outdoor commercial cultivation: No changes and examine at a future date.
Page 37 of 103
ITEM NUMBER: C-2
DATE: 11/24/20
Indoor commercial cultivation: Consider changes to allow cultivation in select
locations. Analyze potential locations/allowable zoning districts, land use impacts,
and odor concerns.
Distribution Center: Consider changes to allow non-storefront storage and
distribution of commercial cannabis. Analyze market demand, job creation, and
potential tax revenue share.
Based on the Council discussion in May, staff has taken a closer look at non-retail
cannabis land uses including manufacturing and indoor cultivation . Additionally, an
economic impact study for Sonoma County’s Cannabis Industry was utilized to evaluate
potential cannabis job creation numbers, as well as economic studies utilized by the City
of Grover Beach’s cannabis tax and information from permits for cannabis businesses in
the County and the State (Attachments 3-4).
1. Manufacturing/non-volatile
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 manufacturing 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. Staff has examined Type 1
manufacturing as a potential land use for Atascadero.
Manufacturing Use Considerations
Type 1 manufacturing of cannabis products includes but is not limited to the
processing of raw cannabis plant products into a wide variety of edible, topical, and
even industrial products that involve the oils, resins, fibers and compounds of the
cannabis plant. These products are used in the medical, recreational, and industrial
industry. Such manufacturing may also include the manufacturing of non -THC hemp
based products where plant fibers are utilized for fiber, cloth and CBD products. Hemp
products are not subject to the same tax structure as THC based cannabis products
that are specialized to the medical and recreational market.
In our County, there are few manufacturing land uses, however, some small industries
have located in the Grover Beach area and u nincorporated areas. These land uses
account for a smaller portion of the cannabis industry in our region but are anticipated
to grow based on predictions by Grover Beach and other areas.
In Atascadero, the Industrial Zones, Service Commercial Zone (CS) and Commercial
Park Zone (CPK) appear to be the best fit for Manufacturing uses, as these zones are
designed for indoor service, manufacturing and industrial land uses. Such land uses
should be subject to a Conditional Use Permit , including a community benefit
agreement. Attachment 1 begins to illustrate what an ordinance that allows
Manufacturing land uses would look like. However, additional work would be needed
to complete this draft ordinance for Council review in the future. Additionally, the City
would need to adopt a special review process and separate fee schedule for
commercial cannabis uses. Most cities seek full cost recovery for a commercial
cannabis application, therefore application fees are very high (currently $23,000 in
SLO, with annual renewal fees over $75,000).
Page 38 of 103
ITEM NUMBER: C-2
DATE: 11/24/20
The following considerations should be incorporated into any use permit for cannabis
Manufacturing land uses:
1. Limitations on the number of specific manufacturing uses and distance
requirements between land uses. State Law mandates that any cannabis land
uses, including Manufacturing facilities be prohibited within 600 feet from schools,
parks, and youth centers.
2. Performance criteria for Manufacturing Businesses including submittal of and/or
City approval of:
a. Indemnification Form/Agreement.
b. Preliminary Security and Operations Plan. It is recommended that all
cannabis businesses in the City be required to submit a Security Operations
Plan. This is typical of cannabis permitting in adjacent cities and is included
in the application for CUP for cannabis business licenses.
c. Signage Plan.
d. Employee Safety and Training Plan.
e. City Tax and Fee Payment Plan.
f. Vicinity Map showing distance to closest sensitive land uses. Sensitive land
uses include uses such as residential uses, schools, and parks.
g. Community Benefit Agreement to include a program or compensation to be
given to the community to mitigate the potential impacts of cannabis
business.
h. Additional conditions to be established through the Conditional Use Permit
process.
It is recommended that any cannabis business in the City be reviewed by the Design
Review Committee prior to Planning Commission to ensure neighborhood
compatibility and compliance with City appearance review standards.
2. Commercial Indoor Cultivation
The State Department of Food and Agriculture (Department), issues licenses for
commercial cannabis cultivation through the CalCannabis Cultivation Licensing
program. Indoor cultivation of cannabis consists of the cultivation of cannabis using
artificial light or mixed artificial light and outdoor light (mixed-light). Mixed-light
commercial operations often utilize hoop houses or greenhouses for growing, while an
artificial light operation is in a fully controlled environment. The State issues indoor and
mixed light cultivation licenses for various categories of commercial cultivation, based
on size of operation. This includes specialty cottage, specialty small, medium, and large
operations, as well as indoor nurseries and processors. Staff has examined indoor
commercial cultivation (artificial light only) as a potential land use for Atascadero.
Commercial Indoor Use Considerations
Indoor cultivation is a controlled environment where the cultivator can control all factors
that go into production of cannabis, including light, dark periods, grow mediums,
moisture temperature, and harvest cycles. In general, the cost to produce cannabis fully
indoors is higher than outdoor or mixed light production, and is also much less common
than outdoor cultivation in the State. In terms of share of production in the State, outdoor
cultivation consists of 60 percent, mixed light (indoor with some outdoor light
assistance) cultivation 24 percent, and indoor cultivation only 16 percent.
Page 39 of 103
ITEM NUMBER: C-2
DATE: 11/24/20
As indoor commercial cultivation is a non-public visitation use, it is recommended that
the development standards for indoor commercial cultivation be the same as the
underlying zoning districts. However, it could be beneficial to include more restrictive
setback requirements than the existing underlying zoning districts to contribute to
additional odor control and ensure any nuisance odor emissions from being detected
offsite, especially in the case of mixed light operations.
The primary concern that Council discussed in May was potential odor impacts of
commercial cultivation operations. Odor impacts should be controlled through odor
control devices and techniques, such as air filtration, to control cannabis odors and
ensure that cannabis odors are not detectable from the property boundary and
adjacent public rights-of-way. Odor control systems may include ventilation and
exhaust systems that provide sufficient odor control to meet requirements that would
be determined in the ordinance. An odor control system is something that would be
reviewed as part of the CUP process and environmental review under CEQA (if size
and impacts substantiate an environmental review).
In our County, there are few commercial indoor cultivation land uses, and only the City
of Grover Beach and the City of San Luis Obispo allow indoor commercial cultivation.
Similar to State trends, indoor commercial cultivation land uses account for a smaller
portion of the cannabis cultivation industry in our region.
In Atascadero, we do not have any large Agricultural properties, however, the CPK, and
Industrial zones could accommodate smaller indoor commercial cannabis cultivation
uses. The City could limit commercial cannabis cultivation to State license types that
eliminate the option of very large cultivation facilities, since the larger facilities are not
likely to be a good fit for Atascadero. The City can limit the size and scope of indoor
cultivation, and the City may choose to limit the maximum size of an indoor cultivation
site. For example, there are State licenses that are designed for small, “cottage” type
cultivation uses that might be the best fit for Atascadero. A specialty indoor license
(Type 1A) allows for indoor sites that are equal to or less than 5,000 square feet. A Type
2A license allows indoor operations between 5,000 square feet and 10,000 square feet.
The State also offers a medium indoor license that allows for indoor cultivation spaces
that are between 10,000 and 22,000 square feet. All three of these license types may
be suitable in a small community such as Atascadero, while a much larger facility may
not fit within the smaller commercial properties in our community.
The following considerations should be incorporated into any use permit for Indoor
Commercial Cultivation:
1. Limitations on the number of specific manufacturing uses and distance
requirements between land uses. It is recommended that Indoor Commercial
Cultivation facilities be prohibited within 600 feet from schools, parks, and youth
centers.
2. Limitations on the size of an indoor cultivation business. Limits should match those
that are licensed by the State. For example, the maximum size could be 22,000
square feet (or smaller).
Page 40 of 103
ITEM NUMBER: C-2
DATE: 11/24/20
3. Performance criteria for Indoor Commercial Cultivation facilities including submittal
of and/or City approval of:
a. Indemnification Form/Agreement.
b. Preliminary Security and Operations Plan. It is recommended that all
cannabis businesses in the City be required to submit a Security Operations
Plan. This is typical of cannabis permitting in adjacent cities and is included
in the application for CUP for cannabis business licenses.
c. Signage Plan.
d. Odor Management Plan.
e. Employee Safety and Training Plan.
f. City Tax and Fee Payment Plan.
g. Vicinity Map showing distance to closest sensitive land uses.
h. Community Benefit Agreement to include a program or compensation to be
given to the community to mitigate the potential impacts of cannabis
business.
i. Additional conditions to be established through the Conditional Use Permit
process.
It is recommended that any cannabis business, including indoor commercial
cultivation, in the City be reviewed by the Design Review Committee prior to the
Planning Commission to ensure neighborhood compatibility and compliance with City
appearance review standards. Attachment 1 illustrates what an ordinance that allows
Commercial Indoor cannabis cultivation land uses would look like . Similar to the
discussion regarding Manufacturing uses, a special application process and fee
structure would need to be developed for any commercial cannabis use.
3. Distribution Centers (CBB License Type 11)
Development standards, land use impacts, and permitting for Commercial Cannabis
Distribution Centers would be similar to manufacturing cannabis land uses. Cannabis
distributors are licensed to purchase, sell, conduct quality assurance review of
packaging and labeling, and also transport cannabis goods between licensees.
Distribution may involve a variety of manufacturing-related activities including
purchase of raw material and transportation of raw materials or manufactured
materials to other licensed cannabis facilities.
Distribution Use Considerations
Distribution centers generally serve the procurement, sale, and transport of cannabis
and cannabis products between entities licensed for and engaged in commercial
cannabis activities. A distribution center would distribute cannabis product between
licensees, such as from a cultivation site to a retailer , or from manufacturing to retail.
Distribution centers do not conduct any retail sales and do not have a public visitation
use. It is also important to understand that a distribution center is not a delivery service
and cannot distribute cannabis products to the retail consumer. Typically, a distribution
center is associated with a manufacturing and cultivation business. It is important to
understand that a distribution use does not allow for any retail deliveries or distribution
to retail customers. A retail delivery business is a different license (Type 9). A Type 9
license could allow for a non-storefront delivery service to operate in conjunction with
another commercial cannabis use, or alone. Such a delivery service would be similar
Page 41 of 103
ITEM NUMBER: C-2
DATE: 11/24/20
in nature to a small office or small distribution site . However, at the previous City
Council hearing, Council did not suggest exploring a Type 9 license in the City.
Attachment 1 provides draft ordinance language to amend the existing ordinance to
allow for a cannabis distribution land use.
In our County, cannabis distribution centers are allowed in the unincorporated County,
the City of San Luis Obispo, Grover Beach, and the City of Morro Bay (medical
distribution center only). The use considerations are similar to manufacturing uses and
most permitted manufacturing land uses also serve as distribution centers.
In Atascadero, the Industrial (I), Commercial Service (CS), and Commercial Park Zone
(CPK) zones could accommodate a distribution location. Such land uses should be
subject to a Conditional Use Permit. Attachment 1 illustrates what an ordinance for a
cannabis distribution use would look like. These uses should be limited in size to 2,000
square feet or less or be combined with a cultivation or manufacturing site.
The following considerations should be incorporated into any use permit for cannabis
distribution land uses:
1. Limitations on the number of specific distribution uses and distance requirements
between land uses. Maximum size limits may also be prescribed. It is
recommended that distribution facilities be prohibited within 600 feet from schools,
parks, and youth centers.
2. Performance criteria for distribution businesses including submittal of and/or City
approval of:
a. Indemnification Form/Agreement.
b. Preliminary Security and Operations Plan. It is recommended that all
cannabis businesses in the City be required to submit a Security Operations
Plan. This is typical of cannabis permitting in adjacent cities and is included
in the application for CUP for cannabis business licenses.
c. Signage Plan.
d. Employee Safety and Training Plan.
e. City Tax and Fee Payment Plan.
f. Vicinity Map showing distance to closest sensitive land uses.
g. Community Benefit Agreement to include a program or compensation to be
given to the community to mitigate the potential impacts of cannabis
business.
h. Additional conditions to be established through the Conditional Use Permit
process.
It is recommended that any cannabis business in the City be reviewed by the Design
Review Committee prior to the Planning Commission to ensure neighborhood
compatibility and compliance with City appearance review standards.
Zoning and Land Availability
The City’s most intensive commercial zones are the Industrial, Commercial-Service, and
Commercial Park Zones. These zoning districts are designated for service,
manufacturing, and industrial land uses and are designated for larger, indoor land uses.
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These land use designations were selected as the most desirable for non-retail cannabis
land uses as these land uses can most easily fit within these zones. Manufacturi ng,
cultivation, or storage of cannabis products does not seem appropriate in retail, tourism
or residential zones.
The City’s Industrial Zone is concentrated around Traffic Way and Via Avenue with
substantial additional land along Sycamore Avenue adjacent to the Salinas River. There
are approximately 25-30 acres that are vacant within this district, and much more that is
underutilized. Much of the vacant industrial land is owned by the Atascadero Mutual
Water Company. The existing Sycamore Industrial Park represents one of the largest
industrial parks in the City. However, that industrial park is currently 100% occupied with
automotive and industrial land uses. Additional industrial land lies along the Traffic Way
corridor. However, many of these sites are small and are developed with small industrial
buildings, typically less than 5,000 square feet. Several large, underutilized parcels
remain in the industrial zone adjacent to Via Avenue. This location could accommodate
indoor cultivation, manufacturing or distribution. Allowing such land uses, could
accelerate development or redevelopment of several of the underutilized parcels that
have been historically utilized for outdoor storage or other non-conforming uses (See
Attachment 2).
The City’s Service-Commercial zone or CS is primarily located along the southern corridor
of EL Camino Real, north of Santa Rosa Road and south of Curbaril Road. Interspersed
with the retail zone (both zones share the same general plan designation), this zone is
primarily developed with light industrial uses, and service uses such as auto repair, tire
shops, and towing facilities. All of the parcels in this zone are fairly small in size (less than
one acre) and are developed. This zone could accommodate a small “light manufacturing”
facility or distribution facility in the area that sits between El Camino Real and Highway
101, south of Curbaril Road. The likelihood of an indoor cultivation facility is low in this
area since there are no significant sized buildings or parcels within this area . Therefore,
it is recommended that cultivation not be included in the list of conditionally allowed uses
in the CS zone (see Attachment 2).
The City’s Commercial Park or CPK zone is located entirely within the strip of land
between Highway 101 and EL Camino Real, north of San Anselmo and south of Del Rio
Road. This zone has a significant number of medium sized, vacant parcels that could be
developed with buildings suitable for light manufacturing or smaller indoor cultivation uses
(see Attachment 2).
Overlay Zone Option
Some communities choose to utilize an “Overlay Zone”, similar to a “Planned
Development” zone to implement cannabis land uses. This can ensure that cannabis land
uses only get developed in very specific locations in the City, and that any change to the
location would need City Council approval. For example, the City may choose to add an
overlay zone to portions of the Industrial, CS and CPK zone while prohibiting cannabis
uses in the remainder of these zones. This reduces land use flexibility, but allows ultimate
control and neighborhood protection. In some cases, the adoption of an overlay zone
could be property owner driven and could be evaluated at the request of the property
owner and at the discretion of the City.
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Job and Tax Revenue Potential
State law creates a framework that allows for a legal, structured, and taxed statewide
industry to develop while giving purview in terms of location and approval of cannabis
business to local and regional governments. Cities can prohibit cannabis businesses, or
allow businesses to operate within their jurisdiction.
Job Creation
Job creation data from the Bureau of Labor is non-existent as cannabis is still considered
to be prohibited under federal law and jobs created in the industry are not counted.
However, signs of job growth in the cannabis industry in California are positive. In 2018,
Sonoma County had 52 licensed commercial cultivators (indoor and outdoor) that created
an estimated 1,674 industry jobs, which is roughly 32 jobs per cultivator (Economic Impact
of the Cannabis Industry, Sonoma County, 2018 (Attachment 3)). However, data on job
creation from manufacturing business is limited, especially on the scale for smaller
operations that would operate in the City of Atascadero. Similar to other industries, such
as the wine industry, the creation of a local cannabis supply chain (cultivation,
manufacturing, and certain types of retail) may align and help expand other industries,
including real estate, trucking/transportation, construction, fertilizer and grower supply,
printing, labeling, and marketing. There is potential market creation in allowing additional
cannabis businesses and this does have the potential for job creation.
In examining existing cannabis permits and environmental documents in unincorporated
San Luis Obispo County, a typical commercial cultivation facility of around 20,000 square
foot has an estimated 15 employees directly associated with or employed by the
business. A 15,000 square foot square foot manufacturing and cultivation project in
Hayfork, CA, has an estimated 40 employees. In the City of San Luis Obispo, there is a
merit criteria checklist that requires commercial cannabis operators to commit to local
hiring of employees. Applicants that commit to hiring local employees receive more
application points, as well as applicants that commit to sources from local businesses.
As of August 2020, the City of Grover Beach has approved 30 cannabis use permits.
Currently, there are eleven (11) operational businesses, six (6) in the development/
construction process, and five (5) under City review. Of the 30 use permits, the majority
are manufacturing and distribution facilities.
Existing City Tax 2018
The City Council voted to adopt a resolution to submit a Cannabis Tax Ballot Measure to
the voters in June of 2018. The Cannabis Tax Measure came into effect January 1, 2019 ,
and is based on gross receipts of cannabis sales, services, and transactions. The
Cannabis Business Tax may be repealed or amended by the City Council without a vote,
but voter approval would be required for any amendment that would increase the rate of
any tax. The current City cannabis business tax rates are shown in Table 1 and is shown
in Chapter 18 of the Atascadero Municipal Code.
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Table 1 – City of Atascadero Cannabis Tax Rates
Initial Rate (beginning
January 1, 2019)
Maximum Rate (through
January 1, 2021)
Commercial Cultivation Per square feet of canopy space
Indoor, permanent artificial
lighting
$7.00 annually $10.00 annually
+ Consumer Price Index
(CPI) Increase
Indoor, combination of
natural and artificial lighting
$4.00 annually $7.00 annually
+ CPI Increase
Indoor, exclusively natural
lighting
$2.00 annually $4.00 annually
+ CPI Increase
Nursery, minimal artificial
lighting
$1.00 annually $2.00 annually
+ CPI Increase
Testing, Manufacturing,
and Retail
% of Gross receipts
Testing Lab 1% 2.5%
Retail sales 4% 6%
Distribution 2% 3%
Manufacturing, processing,
or other
2.5% 4%
Staff Time and Cost Recovery
While the review process to evaluate a use permit for a commercial cannabis business
may require significant staff time, the cost recovery for staff time would be covered by
fees and may not be significant when compared to similar use permit applications.
Regionally, the cities of Morro Bay and Grover Beach implement cost recovery through
cannabis specific fee structures and applicant deposits. For example, the City of Grover
Beach collects an annual regulatory fee per retailer or manufacturer. These one -time or
annual regulatory fees cover the majority of costs associated with maintenance and law
enforcement. Additionally, development fees are charged to applicants for planning,
enforcement, and permit review costs. The City of Morro Bay charges a deposit to
applicants and an annual fee. As part of an amended ordinance, the City could charge
deposits to applicants, annual regulatory fees, and implement 100 percent cost recovery
associated with cannabis oversight and permitting. The development of this fee structure
would require coordination with City Administration, Fire Department, Police Department,
and the Finance Department.
As an example, the City of Grover Beach’s basic fee structure for cost recovery is included
below.
Cannabis Business Type Fee Type Amount Notes
Retail/Manufacturing Annual Regulatory Fee $20,000
Distribution Annual Regulatory Fee $10,000
Labs/Testing Annual Regulatory Fee $5,000
All Deposit Account $6,000 Redevelopment site
All Deposit Account $10,000 Greenfield site
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Market Demand
The California Legislative Analyst’s Office estimates that in 2019-2020 tax year, the state
will allocate nearly $300 million from cannabis tax revenues into state programs. The
California Department of Tax and Fee Administration (CDTFA) reported that as of August
2019, California’s cannabis excise tax generated $74.2 million in revenue and the
cultivation tax generated $22.6 million, not including taxes collected by local and regional
governments. Data also suggests that market opportunities exist in supplying products to
retailers as retail operation markets mature and that the primary market in the United
States will be California, where retail sales of cannabis is expected to grow by 23 percent,
or approximately $4.7 billion.
Regionally, market demand data is lacking as only a few cities in the County have
cannabis ordinances that allow for expanded commercial activities and information on
revenue, community impacts, and benefits are limited. In discussions with HdL, the City
has been advised that demand for non-retail cannabis land uses is very low. It was noted
that these commercial land uses typically locate in larger populations that exceed 500,000
persons where there are direct connections to a large retail market. Furthermo re, it was
noted that due to Covid-19, the amount of capital to invest in these commercial land uses
is very low. Much of the market is still in the illegal market, as high taxes and extensive
capital needs continue to drive down the legal market. However, the City of Grover Beach
still believes there is a future in the non-retail market, therefore their analysis projects that
there is growth potential in this arena. Atascadero has not received any inquiries
regarding cultivation or manufacturing allowances, however we do receive inquires
regarding the potential for retail uses on a regular basis.
Tax Revenue
In San Luis Obispo County, the cities of Morro Bay, San Luis Obispo, and Grover Beach
have adopted ordinances that allow for retail sales of cannabis products through store
fronts or dispensaries, in addition to other commercial cannabis activities. For fiscal year
2018-2019, the City of Grover Beach received an estimated $1,000,000 in cannabis
related revenue for the year and the City of San Luis Obispo received and estimated
$80,000. The City of Atascadero currently collects tax on retail cannabis delivery services
from outside of the City, which was implemented in early 2020. The addition of more
commercial cannabis business will increase potential tax revenue, however the significant
increase would be far less than surrounding communities unless a retail land use was
included in the update. In Atascadero, there is very little commercial industrial land that
can accommodate significant increases in manufacturing or cultivation uses, and there is
virtually no agricultural land available. Currently, there is not substantial or accurate data
on the potential for tax revenue from cultivation or manufacturing uses. Most of the data
in our County is based on retail uses. While there are commercial cannabis cultivation
operations in the unincorporated areas, these primarily exist on large agricultural or rural
residential properties, and that type of land is not available in Atascadero.
The three considered uses that have the potential for revenue creation are retail,
cultivation, and manufacturing. Retail sales is generally considered to be the greatest
source of tax revenue for cities, followed by cultivation and manufacturing. Current
revenue by type is unavailable from neighboring jurisdictions due to the small number or
business outlets and business information confidentiality laws.
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Next Steps
This discussion is intended to be a closer look at the potential land uses that may be
appropriate in the City. If the City Council would like staff to return with a draft ordinance,
specific direction on the items to include in the draft can be discussed at this time. The
Council may also desire to direct staff to provide additional community outreach on this
effort prior to returning with a draft ordinance.
Specifically, staff is seeking Council direction on the following items:
1. Should staff return with a draft ordinance amending the existing Cannabis
Ordinance to include additional commercial land uses?
2. What Commercial Land uses should be included in a draft ordinance:
a) Commercial Cultivation (size limits, small to medium)
b) Commercial Manufacturing (non-volatile)
c) Commercial distribution (size limits)
d) Non-storefront commercial medical or retail delivery
3. Should other land uses, such as a retail storefront, be explored at this time?
4. If staff returns with a draft ordinance, are there specific items that should be
incorporated into the ordinance?
a) Specific number of each use?
b) Should the City establish overlay zones for cannabis?
c) Should the City require community benefit programs?
d) Are their specific districts other than CS, CPK or Industrial that should be
examined?
ATTACHMENTS:
1. Examples of a Draft Ordinance Amendments to Title 9, Chapter 17
2. City zoning maps with buffer zones
3. Sonoma County Cannabis Study
4. City of Grover Beach Revenue Projections
5. LA Times article regarding Cannabis industry trends
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Attachment 1: Rough Draft Amendments to Existing Cannabis Ordinance (Chapter 17)
Draft Amendments to AMC Chapter 17:
Chapter 17 CANNABIS ACTIVITIES AND REGULATIONS
Show All
9-17.001 Title.
9-17.002 Purpose and intent.
9-17.003 Definitions. (Amendments for new uses)
9-17.004 Personal cannabis cultivation.
9-17.005 Commercial cannabis activities. (Amendments for new uses)
9-17.006 Commercial cannabis activities development standards. (Amendments for new uses)
9-17.007 Commercial cannabis application and procedures. (Amendments for new uses)
9-17.008 Commercial cannabis application approval or denial of entitlement.
9-17.009 Commercial cannabis operational requirements. (Amendments for new uses)
9-17.010 Suspension and revocation of entitlement.
9-17.011 Enforcement.
9-17.003 (Changes in Red)
For the purposes of this chapter, the following definitions shall apply.
(a) Accessory Structure. An accessory structure is a detached structure, with a “u” occupancy that
is accessory to and subordinate to the primary residential use.
(b) Cannabis. “Cannabis” shall have the meaning set forth in Business and Professions Code
Section 26001(f), which includes all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or
Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified,
extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or
preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or
purified, obtained from cannabis. “Cannabis” does not include the mature stalks of the plant, fiber
produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture,
salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this
chapter, “cannabis” does not mean “industrial hemp” as defined by Section 11018.5 of the Health and
Safety Code.
(c) Cannabis Canopy. All areas occupied by any portion of a cannabis plant, encompassing all
vertical planes (i.e., stacking of plants), whether contiguous or noncontiguous on any one (1) site.
Cannabis canopy” shall be measured by taking the longest length and widest width of existing plants
(including all gaps and open areas between plants) and multiplying the length and width to get square
footage.
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(d) Cannabis Greenhouse. A fully enclosed permanent structure that is clad in transparent
material. Cannabis cultivation within an enclosed, non-transparent greenhouse is considered indoor
cultivation.
(e) Cannabis Hoop Structure. A readily removable plastic covered hoop structure without in-
ground footings or foundations, which are not more than twelve (12) feet in height and do not have
vertical sides that exceed four (4) feet in height. Cannabis hoop structures are accessory uses on
residential land use categories which shall not exceed one hundred twenty (120) square-feet. Cannabis
cultivation within hoop structures is considered outdoor cultivation.
(__) Cannabis Manufacturing. The production, preparation, propagation, or compounding of
cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by
means of chemical synthesis or by a combination of extraction and chemical synthesis, using volatile or
non-volatile organic compounds, at a fixed location, that packages or repackages cannabis or cannabis
products, or labels or relabels its containers.
(f) Cannabis Testing Facility. A facility, entity, or site that offers or performs testing of cannabis
or cannabis products and that is both accredited by an accrediting body that is independent from all other
persons involved in the cannabis industry in the state, and registered with and licensed by the California
State Department of Public Health.
(g) Commercial Cannabis Activity. “Commercial cannabis activity” shall have the meaning set
forth in Business and Professions Code Section 26001(k), which includes the cultivation, possession,
manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation,
delivery or sale of cannabis or cannabis products as provided in MAUCRSA (Business and Professions
Code Section 26000 et seq.) and for which a state license is required. Commercial cannabis activity shall
also include the sale or distribution of cannabis and/or cannabis products, in exchange for compensation
in any form, for medicinal purposes under Health and Safety Code Sections 11362.5 and 11362.7 et seq.
(__) Commercial Cannabis Business, Establishment, or Facility. Any business,
establishment, facility, property, location, or site where a commercial cannabis activity occurs or
is operated (or is proposed to occur or operate) under this section.
(h) Cultivation. “Cultivation” shall have the meaning set forth in Business and Professions Code
Section 26001(l), which includes any activity involving the planting, growing, harvesting, drying, curing,
grading, or trimming of cannabis.
(__) Distribution. The procurement, sale, and transport of cannabis or cannabis products between entities
licensed pursuant to the Medicinal and Adult-Use Cannabis Regulation and Safety Act or as amended.
(__) Distributor. A Person licensed under the Medicinal and Adult-Use Cannabis Regulation and Safety
Act to engage in the business of purchasing cannabis from a licensed cultivator, or cannabis products
from a license manufacturer, for sale to a licensed retailer or microbusiness.
(i) Day Care Center. “Day care center” shall have the same meaning as Health and Safety Code
Section 1596.76, which any child day care facility other than a family day care home, and includes infant
centers, preschools, extended day care facilities, and school-age child care centers.
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(j) Fully Enclosed Structure. A fully enclosed space within a building or separate structure that
complies with the California Building Code (CBC), as adopted by the City of Atascadero, or if exempt
from the permit requirements of the CBC, that has a complete roof, foundation, slab or equivalent base to
which the floor is secured by bolts or similar attachments, and non-transparent walls on all sides.
(k) Indoor Cultivation. Cultivation, as defined in subsection (h), of this section, within a fully
enclosed structure, as defined in subsection (j) of this section.
(l) Outdoor Cultivation. Any location within the City of Atascadero that is not within a fully
enclosed structure, or cannabis green house, as defined in subsection (d) of this section.
(m) Personal Cultivation. Cultivation of cannabis at a private residence, as defined by subsection
(n) of this section, for non-commercial cannabis activities, which is defined in subsection (g).
(n) Private Residence. A house, apartment unit, mobile unit, or other similar dwelling unit that is
legally permitted within the City of Atascadero, and is considered a residential occupancy type in the
California Building Code, as adopted by the City of Atascadero.
(o) Retail Cannabis Delivery Center. A “retail cannabis delivery center” is a facility from which
deliveries of cannabis and/or cannabis products originate pursuant to orders placed by customers inside
and/or outside the City.
(p) School. A private or public educational facility providing instruction in kindergarten or grades
1 through 12.
(q) State Cannabis Laws. “State Cannabis Laws” shall mean and include California Health and
Safety Code Sections 11362.1 through 11362.45; California Health and Safety Code Section 11362.5
(Compassionate Use Act of 1996); California Health and Safety Code Sections 11362.7 to 11362.83
(Medical Marijuana Program Act); California Health and Safety Code Sections 26000 through 26211
(Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”)); California Health and
Safety Code Sections 26220 through 26231.2; the California Attorney General’s Guidelines for the
Security and Non-Diversion of Marijuana Grown for Medical Use issued in August, 2008, as such
guidelines may be revised from time to time by action of the Attorney General; California Labor Code
Section 147.5; California Revenue and Taxation Code Sections 31020 and 34010 through 34021.5;
California Fish and Game Code Section 12029; California Water Code Section 13276; all State
regulations adopted pursuant to MAUCRSA; and all other applicable laws of the State of California.
(__) Type 1 Cannabis Manufacturing Facility. A facility that manufactures cannabis
products using nonvolatile solvents, or no solvents, and for which a Type 6 or Manufacturing Level
1 license is required under Business and Professions Code section 26100.
(__) Type 2 Cannabis Manufacturing Facility. A facility that manufactures cannabis
products using volatile solvents and for which a Type 7 or Manufacturing Level 2 license is
required under Business and Professions Code section 26100.
(__) Volatile Solvents. “Volatile solvents” shall have the same meaning as in Health and Safety
Code section 11362.3(b)(3), which includes any solvent that is or produces a flammable gas or
vapor that, when present in the air in sufficient quantities, will create explosive or ignitable
mixtures.
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(r) Youth Center. “Youth center” shall have the same meaning as Health and Safety Code Section
11353.1, which includes any public or private facility that is primarily used to host recreational or social
activities for minors, including, but not limited to, private youth membership organizations or clubs,
social service teenage club facilities, video arcades, or similar amusement park facilities. (Ord. 612 § 2,
2017)
9-17.005 Commercial cannabis activities. (Changes in Red)
All commercial cannabis activities are prohibited unless specifically allowed in this Table 17-1. It is
unlawful for any person to commence, operate, engage in, to conduct, or carry on (or to permit to be
commenced, operated, engaged in, conducted or carried on) in or upon any property located within the
City a commercial cannabis activity unless that person does so in strict compliance with State Cannabis
Laws, this section, and all applicable Municipal Code provisions.
(a) Table 17-1 identifies the uses of commercial cannabis activities that are permitted in non-
residential districts, and the planning permit required to establish each use, in compliance with Chapters
9-1 and 9-2 of this code.
Table 17-1 – Commercial Cannabis Use Table
Table 17-1 – Commercial Cannabis Use Table
Allowed Land Uses and
Permit Requirements
Non-Residential Zones
A Allowed Use, Zoning Clearance Required
CUP Conditional Use Permit Required (Major)
AUP Administrative Use Permit Required
Not Permitted
Use Permitted Uses By Zones
CN CP CR CS CT CPK DC DO IP I
Commercial Cannabis Activity
Distribution Center –
No On-Site Sales
CUP CUP CUP CUP
Indoor Commercial
Cultivation
CUP CUP CUP CUP
Manufacturing - Type
1
CUP CUP CUP CUP
Testing Facility CUP CUP AUP AUP AUP AUP
9-17.006 Commercial cannabis activities development standards. (Changes in Red)
(a) Commercial Cannabis Businesses. The following are development standards for all
Commercial Cannabis testing facilities cannabis testing facilities:
(1) On-Site Sales. Retail or wholesale sales to the public are prohibited.
(2) Distance. Cannabis testing facilities shall be prohibited within six hundred (600) feet of
schools, parks, and youth centers.
(3) Signage. Signage shall be limited to fifteen (15) square feet in size.
(b) Cannabis Deliveries. The following standards apply to Cannabis delivery services located
outside the incorporated City limits of the City of Atascadero:
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(1) Deliveries within Incorporated City Limits. State-licensed retail cannabis delivery centers
located outside the City may personally deliver cannabis and cannabis products to individuals located at
private residences within the City, provided that such deliveries are in strict compliance with State
Cannabis Laws and have obtained a business license tax certificate and are paying the applicable business
license tax under Municipal Code Chapter 3-5. All other deliveries of cannabis and/or cannabis products
are prohibited.
(2) Vehicle Advertising. Vehicles used in the delivery process must be unmarked without any
designation or logo that identifies the vehicle as a cannabis delivery vehicle.
(3) Delivery Times. Cannabis and cannabis product deliveries within the City may not occur
between 11:00 p.m. and 7:00 a.m. (Ord. 612 § 2, 2017)
9-17.007 Commercial cannabis application and procedures. (Changes in Red)
(a) Application Requirements. Any person applying for an AUP or CUP for a commercial cannabis
facility cannabis testing facility, as allowed under this chapter, must submit the following information
with their application:
(1) The name of the proposed commercial cannabis facility cannabis testing facility including, if
applicable, the name on file with the California Secretary of State and any fictitious business names
and/or DBAs.
(2) The location of the proposed commercial cannabis facility cannabis testing facility (must
comply with the zoning and location restrictions set forth above).
(3) The names, addresses, and contact information for each owner of the proposed commercial
cannabis facility cannabis testing facility
(4) If the proposed commercial cannabis facility cannabis testing facility is incorporated, the
names, titles, addresses, and contact information of each corporate officer, the name, address, and contact
information of the agent for service of process, a certified copy of the articles of incorporation, and c opy
of the bylaws.
(5) If the proposed commercial cannabis facility cannabis testing facility is a partnership, the
names, addresses, and contact information for each partner and the agent for service of process.
(6) The name and contact information for each manager of a proposed commercial cannabis
business, establishment, or facility. If such information is not available at the time the application is
submitted, the proposed commercial cannabis business, establishment, or facility shall submit such
information to the Community Development Department as soon as it becomes available.
(7) For each owner, corporate officer, partner, manager, employee, or volunteer, a criminal history
(“LiveScan”) prepared not more than two (2) weeks prior to the date of submitting the application
demonstrating that there are no pending charges or convictions for any crime ( including, without
limitation, theft, fraud, deceit, or assault) within the previous ten (10) years, and that the subject i s not
currently on parole or probation for the sale, possession for sale, manufacture, transportation, cultivation,
or distribution of a controlled substance. For each owner, corporate officer, partner, manager, employee,
or volunteer who becomes part of a cannabis testing facility after the required permit is issued, the
cannabis testing facility must submit the required criminal history to the Community Development
Department within two weeks of the new owner, corporate officer, partner, manager, employee, or
volunteer joining the operation.
(8) A site plan and operations plan that demonstrate how the proposed commercial cannabis
facility cannabis testing facility has already complied or will comply with the requirements of this
chapter.
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(9) A copy of all required permits and certificates under Title 8 (Buildings Code) of this Code or
an acknowledgment that the proposed cannabis testing facility will obtain all required permits and
certificates under Title 8 prior to its opening, establishment, operation, and/or commencement.
(10) The name, address, and contact information for the owner of the property on which the
proposed commercial cannabis facility cannabis testing facility will be located.
(11) An agreement signed by the owner of the property on which the commercial cannabis facility
cannabis testing facility is located consenting to use of the property as a commercial cannabis facility
cannabis testing facility and agreeing to indemnify, defend (with an attorney selected by the city), and
hold harmless The City of Atascadero from any claims, damages, legal or enforcement actions arising
from the use of the property as a cannabis testing facility.
(12) Indemnification Form/Agreement,
(13) Preliminary Security and Operations Plan. It is recommended that all cannabis businesses in the
City be required to submit a Security Operations Plan. This is typical of cannabis permitting in adjacent
cities and is included in the application for CUP for cannabis business licenses.
(14) Signage Plan,
(15) Odor Management Plan
(16) Employee Safety and Training Plan,
(17) City Tax and Fee Payment Plan,
(18) Vicinity Map showing distance to closest sensitive land uses.
(19) Community Benefit Agreement to include a program or compensation to be given to the
community to mitigate the potential impacts of Cannabis business.
(20) Additional conditions to be established through the Conditional Use Permit process.
(12) (21) Any supplemental information requested by the Community Development Director or
designee to establish compliance with the requirements of this chapter. (Ord. 612 § 2, 2017)
9-17.009 Commercial cannabis operational requirements. (Changes in Red)
Existing:
(a) Operational Requirements.
(1) A commercial cannabis facility cannabis testing facility permitted under this section may only
operate between the hours of 7:00 a.m. and 8:00 p.m.
(2) A commercial cannabis facility cannabis testing facility permitted under this chapter must
comply with all applicable State Cannabis Laws.
(3) A commercial cannabis facility cannabis testing facility permitted under this chapter must
comply with all applicable provisions of Title 8 of this Code.
(4) A commercial cannabis facility cannabis testing facility permitted under this section may not
employ any person who is not at least eighteen (18) years of age.
(5) A commercial cannabis facility cannabis testing facility permitted under this section shall not
conduct or engage in the commercial or retail sales of any cannabis or cannabis products on the premises
of the cannabis testing facility.
(6) No cannabis cultivation may occur on the property of a cannabis testing facility permitted
under this chapter.
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(7) A commercial cannabis facility cannabis testing facility permitted under this chapter may not
allow or permit the use, inhalation, smoking, eating, ingestion, or consumption of cannabis or cannabis
products on the property of the commercial cannabis activity, including in the parking areas of such
property.
(8) Criminal Background Requirements.
(i) No person who is currently charged with or has been convicted within the previous ten years of
a felony, a felony or misdemeanor involving moral turpitude, or any crime involving the sale, possession
for sale, manufacture, transportation, cultivation, or distribution of a controlled substance, shall be an
owner, corporate officer, partner, manager, employee, or volunteer of a cannabis testing facility permitted
under this chapter. A conviction within the meaning of this section means a plea or verdict of guilty or a
conviction following a plea of nolo contendre or no contest.
(ii) Prior to commencing any work within or on behalf of a cannabis testing facility permitted
under this chapter, each owner, corporate officer, partner, manager, employee, and volunteer must
complete a current criminal history background check that demonstrates compliance with subsection
(g)(13)(i). Each criminal history background check must be updated every twelve (12) months.
(iii) A cannabis testing facility permitted under this section shall maintain a complete register of
each owner, corporate officer, partner, manager, employee, and volunteer working for and/or associated
with the cannabis testing facility, including a copy of each required criminal history background check.
The register and required records must be made available for inspection by any city officer or official for
purposes of determining compliance with this chapter.
(iv) A cannabis testing facility permitted under this chapter shall notify the city in writing of any
disqualifying conviction described in subsection (g)(13)(i) for an owner, corporate officer, partner,
manager, employee, or volunteer within ten (10) days of the conviction.
(v) A cannabis testing facility permitted under this chapter may submit to the Police Chief a
written request for a waiver of the prohibition in subsection (g)(13)(i) with regard to a particular owner,
corporate officer, partner, manager, employee, or volunteer, on the ground that such person’s involvement
with the cannabis testing facility will not pose a threat to public safety. The Police Chief, in his or her
unfettered discretion, may deny such a written request, subject to the appeal procedures set forth in
Municipal Code Sections 1-2.13 through 1-2.16.
(9) A cannabis testing facility permitted under this chapter shall provide the name, phone number,
facsimile number, and e-mail address of a manager or representative who can be reached twenty-four (24)
hours a day in the event that the city decides to provide notice of an operating problem associated with the
cannabis testing facility.
(10) Disposal of chemical, dangerous or hazardous waste must be conducted in a manner consistent
with Federal, State and local laws, regulations, rules or other requirements. Cannabis waste must be made
unusable and unrecognizable prior to leaving the licensed premises by grinding it and incorporating it
with fifty percent (50%) non-cannabis waste.
(11) A cannabis testing facility permitted under this chapter must pay any applicable taxes pursuant
to Federal, State, and local law.
(12) A cannabis testing facility permitted under this chapter shall provide a secured storage area on-
site. All cannabis and cannabis products shall be stored in this area during non-business hours. (Ord. 612
§ 2, 2017)
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Attachment 2: Draft Buffer Maps
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Attachment 3: Sonoma County Cannabis Study
The Economic Impact of the Cannabis Industry
Sonoma County, California
December 2018
Sustaining
Technologies, LLC
Economic Forensics and Analytics, Inc.
This report was generously funded by Mercy Wellness, The GrowBiz, CannaCraft, and NorCal Cannabis
Company for the benefit of the community. By analyzing economic activity of the cannabis sector, policy makers and
the industry can better understand how to regulate and nurture the industry’s growth.
Questions and Comments to the authors: Please go to this Google form
(https://goo.gl/forms/aa54zuQnDU0PAP0Z2) and submit your inquiry. We ask that you don’t contact the
authors directly.
Contents
Executive Summary ...................................................................................................................................... 2
Key Findings for Sonoma County .............................................................................................................. 2
Recommendations .................................................................................................................................... 3
1. Introduction .............................................................................................................................................. 4
2. Basic Concepts and Literature Review ...................................................................................................... 5
Basic Concepts .......................................................................................................................................... 5
Taxation .................................................................................................................................................... 7
Literature Review ...................................................................................................................................... 7
Costs to Public Sector: Enforcement and Compliance .......................................................................... 9
Market Entry and Industry Challenges ..................................................................................................... 9
3. Cannabis Supply Chains .......................................................................................................................... 11
Sonoma County Cannabis Industry: Transition from Illegal to Legal Marketplace ................................ 11
Modeling the Legal Cannabis Industry ................................................................................................... 12
Cannabis Cultivation ............................................................................................................................... 12
Cannabis Manufacturing ......................................................................................................................... 16
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Cannabis Distribution .......................................................................................................................... 16
Cannabis Retail ....................................................................................................................................... 17
Cannabis Supply Chain Summary and Direct Economic Impacts ........................................................ 17
Methodology .......................................................................................................................................... 18
4. Broader Effects (IMPLAN®) ..................................................................................................................... 18
Description of Direct to Total Impacts .................................................................................................... 19
5. Conclusions and Policy Recommendations ............................................................................................ 22
References and Data Sources ..................................................................................................................... 23
Executive Summary
With a long history in Sonoma County, the cannabis industry has new challenges and opportunities as a
result of Proposition 64 passing and recreational use of cannabis being legal for adults over 21 starting
on January 1, 2018. This study estimates the economic impacts from the current state of the legal
cannabis business. Conversion of current, illegal businesses and the expansion of new businesses can
lead to broader economic impacts. This study was sponsored by several Sonoma County cannabis
businesses; this report is not advocating a position for or against cannabis consumption. This report
instead shows the gains and economic consequences from more cannabis businesses coming to Sonoma
County rather than locating elsewhere or remaining illegal.
The cannabis supply chain, like any other agricultural good, determines its ability to support a broad
number of industries and jobs regionally. Local agriculture is likely to produce more products than can
be sold within Northern California, which implies export possibilities. As of 2018, the legal cannabis
market cannot legally sell products outside California; for Sonoma County cannabis businesses, one
challenge is to optimize cultivation, manufacturing, distribution, and retail business opportunities inside
the county. This balance between leakages (losses of revenue to vendors outside the local area) and
exports (sales outside Sonoma County) is a major part of economic development for any industry.
Recent data collected by this study’s authors, and available from sources such as BDS Analytics, provide
the baseline data as of July 1, 2018.
Key Findings for Sonoma County
• Sonoma County’s overall retail sales of cannabis products are projected to be $150 million in
2018 based on the first two quarters of legal, taxable activity and estimates of illegal activity;
• 52 licensed cultivators are currently identified by the state of California as of July 1, 2018 in
Sonoma
County; o Another 178 businesses licenses are in Sonoma County, predominantly temporary
cultivation licenses;
• There is an estimated 64.33 million grams of cannabis product or 64,330 kilograms of raw
product to be produced in Sonoma County in 2018;
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• The estimated amount of cannabis legally cultivated in Sonoma County is $233 million for 2018;
• Estimated sales in Sonoma County are $150 million in 2018 of cannabis products, suggesting
some cultivation is exported to other parts of California and beyond;
• In 2018, given the current level of economic activity and supply-chain connections, state and
local taxes of over $33 million are estimated from the economic impacts paid across many
categories in Sonoma County; and
• In the legal market, as many as 2,800 jobs may be supported in this industry through all the
supply chain connections;
• For every kilogram of cannabis produced in Sonoma County, the county economy generates
$7,800 of business revenue across hundreds of industries; o If all local retail sales came from
local production, there would be a 31 percent increase in economic impacts within Sonoma
County.
Sonoma County Cannabis
Economic Impact
Full-time Equivalent Jobs 2,814
Wages Paid $164.0 million
Retail Value of Cannabis Sold $150.0 million
Cultivator Revenue $233.3 million
Number of Cultivators 52
Number of Licensed Businesses Beyond Cultivation 178
Taxes Paid: State and Local $33.4 million
Total Impacts $504.4 million
Total Impacts per kg harvested $7,800
* Estimated production is 64,330 kilograms in 2018 for Sonoma County for legal cultivation.
Recommendations
• Public policy should focus on incentives for conversion of current illegal businesses, enhancing
the hedgers and wait-and-see possibilities for conversion by reducing tax rates and compliance
costs;
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• Public costs exist for enforcement and compliance in the legal environment and to enforce laws
against continued, illegal activity;
• Provide entrepreneurship training and support for business conversions;
• Centralize distribution and use of local product such that benefits can be maximized across
county economy;
• Make provisions for local processing of plant material into saleable flower and supply for
manufacturers to make concentrates;
• Support cannabis tourism through Sonoma County Tourism; and
• Create a long-term vision for development of the cannabis industry in Sonoma County.
Economic Impact of Cannabis in Sonoma County
1. Introduction
The 2016 passage of Proposition 64 in California allows for recreational adult use of cannabis products
beginning on January 1, 2018, opening up the current marketplace for cannabis beyond medical use
only. The nationalization of cannabis for recreational use in Canada (October 2018) provides an example
of how national policies can provide a framework for further economic opportunities. The U.S. does not
have a national policy in place yet, which restricts the economic impacts of California’s legalization. It is
in production where Sonoma County, the focus of this study, has advantages to generate economic
benefits across the county. This report is not advocating a position for or against cannabis consumption.
This report instead shows the gains and economic consequences from more cannabis businesses coming
to Sonoma County rather than locating elsewhere or remaining illegal.
Public policy continues to struggle with a regulatory framework that both discourages consumption
while simultaneously providing incentives for illegal operations to become legal. There are few strong,
historic examples: the end of alcohol prohibition in December 1933 has some similarities, but currently
California cannabis production does not have a national, legal market. The tax structure for legal
cannabis is still evolving with every California municipality left to its own choices. Some risks also exist
of having adjacent “dry” and “wet” cities and counties in terms of recreational cannabis availability,
while state legislation continues to develop its policies for cultivation to retail and other supply-chain
partners in between.1
This study’s purpose is to look at the legal cannabis industry’s potential economic impacts on the
Sonoma County. Data remain problematic in defining the market’s size: a 2017 study by ERA Economics
(see the following link) provides estimates of the supply and demand sides of the state-level market for
the medical cannabis market only. ERA Economics’ methodology (as discussed later) is one way to
consider estimating the total market size; however, the ERA study does not measure Sonoma County
directly.
Because an illegal market continues to exist, estimates of total market size with precision are tricky. This
study provides projected consumption and production levels in Sonoma County. For each new business
1 The best place to watch this evolution is the California Cannabis Portal of the state government:
https://cannabis.ca.gov/ 2 See a study on Oliver’s Market for one methodology to examine the capture of local
supply chains and the economic impacts.
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that converts somewhere along the supply chain in Sonoma County, there are different regional effects;
however, the data reflect the power of regional, vertical integration to capture as much of the supply
chain in Sonoma County as possible.2
Using information available from various industry sources, we provide a per-kilogram, algorithm by
which policymakers can consider how to provide incentives to generate more legal jobs and economic
activity through converting activity already occurring in illegal markets. After conversion, those benefits
become taxable and traceable as well as safer for all.
This study has the following organization:
• Section 2 provides research examples and basic concepts to consider both caveats and
opportunities in estimating this marketplace and monitoring its evolution;
• Section 3 explores the supply chain of cannabis and how each part has its own economic
impacts;
• Section 4 provides the economic impact analysis showing the greater economic effects. The
IMPLAN® model is used to identify the business revenues, wages, jobs and estimated tax
revenue amounts supported by this industry per kilogram of product, regardless of recreational
or medical use2; and
• Section 5 offers conclusions and policy recommendations.
2. Basic Concepts and Literature Review
This section provides a brief overview of a nascent, expanding literature on the cannabis industry’s
economics based on a legal marketplace.
Basic Concepts
The current, overarching issue in the cannabis industry is the Schedule 1 drug designation by the United
States government: an illegal drug for recreational use. Because Sonoma County is located in California’s
premium wine area, we are able to point out some similarities and connections between the cannabis
and wine industries as they exist:
• Cannabis, like wine grapes, is an agricultural product;
• Each have harvest cycles that create local labor and vendor demand annually at a minimum,
however unlike wine grapes, cannabis has multiple harvests per year;
• Both harvests then go to a processor for conversion into at least one “value-added” product
from raw materials;
• These products manufactured from raw agricultural materials are then packaged and distributed
to a wholesale entity or direct to a retail or consumer endpoint; o After wholesale, a retail entity
delivers product to consumers; and
• Each step of this process has some taxation and governmental monitoring involved.
Each supply-chain link, as shown in Figure 1, is a step where value is added to the previous step’s
product, then tracked and traced. Chemical testing happens as required by California’s regulations,
2 See http://www.implan.com for more on this model and economic impact examples.
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creating scientific jobs to process legal cannabis as it moves from one link in Figure 1’s chain toward the
consumer.
Wine and beer and spirits are different than other products that come from agricultural raw materials in
terms of compliance and governmental regulations because they contain alcohol. Each state in the
United states regulates alcoholic beverages differently, though some states are “reciprocal” and have
very similar laws (California and Colorado are examples in the alcohol industry).
Until cannabis is a federally legal product, reciprocity and exporting are only future possibilities.
Vertically integrating the supply chain in Figure 1 is critical in taking advantage of regional connections
from cultivator to retail. This can happen in one business or through regional economic development.
Figure 1: The Cannabis Supply Chain
As of 2018, California grows more cannabis than it consumes. Estimates suggest there may be $10 to
$12 billion of market value of legal cannabis in California in terms of potential supply; for the United
States overall, the retail sales number may be as high as $40 billion, where California is a major potential
supplier.3
Demand is nationwide. For Sonoma County, legitimate export markets for now are the rest of California
outside of Sonoma County. However, because demand is nationwide, incentives remain to grow and
ship through longstanding interstate markets illegally unless incentives to convert and redirect focus on
California’s market are a norm for policymakers.
Recreational use and availability of cannabis does not stop illegal activity; it simply changes how markets
compete and the costs of continuing to operate in an illegal marketplace. What should concern
policymakers is placing taxes on a product where competition is fierce. The illegal market, where no
taxes are collected, is a mature substitute for a legal market where costs are relatively large to conform
and comply.
Concerns over costs of enforcement are somewhat alleviated by new tax revenue, but data so far do not
allow any precise conclusions as to how law enforcement and other city and county agencies adapt to
new regulations and compliance support needs. There are generations of cannabis business
entrepreneurs regionally in Sonoma County, and circumvention of taxes and laws has been a long-
standing part of that industry. Making both compliance costs and tax rates a relatively low barrier to
3 See https://bdsanalytics.com/press/new-report-legal-marijuana-industry-to-generate-40-billion/ for
more. 5 Sustaining Technologies estimates that at least $1.5 billion in cannabis flower/buds were sold
before 2018, which connects to the estimate of $150 million in local consumption.
Farmer/
Cultivator
• Outdoor
• Indoor
• Mixed Light
Manufacturing/
Processing Distribution Retail
• Direct to
Consumer
• Brick and
Mortar
Consumer
• Domestic Sales
• Export Sales
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entry allows new, legal markets to start more easily with these revenues generating new government
revenue.
Throughout this study the idea of “leakage” or loss of economic value from a market is addressed. A
legal seller of cannabis cannot export from California if the seller wants to remain legal. For Sonoma
County specifically, local growers historically have been able to outpace local demand by a factor of
around ten, generating “export” (outside of Sonoma County) sales from a base of approximately $1.5
billion in production.5
To summarize, Sustaining Technologies’ estimation model, surveys by the authors and third-party
sources like BDS Analytics and the California Department of Tax and Fee Administration (CDTFA) suggest
the following baseline estimates in 2018:
• Sonoma County consumes about $150 million in cannabis, of which $20 million is due to non-
residents visiting Sonoma County and making purchases;
• There is a mix of legal and illegal production of $1.5 billion in final value, perhaps as much as $2
billion in market value from Sonoma County growers as 2018 began (pre-legalization); and
• California has a $10 billion retail marketplace (combined illegal and legal) and the United States
has as much as $40 billion retail nationally.
Taxation
Taxation faced by converting
businesses concerns both
advocates and policymakers.
The potential economic
impact of this industry may
fall because taxes lead to an
artificial constraint on growth.
There are two basic truths
related to this issue:
• The tax structure
for cannabis
businesses is a key marginal variable in decisions converting an illegal market business into a
legal business as compliance with tax codes is another cost; and
• In Sonoma County and California, so many of the value-chain and supply-chain relationships are
already in place, albeit in ways that violate state and federal laws.
Economic development is most effective when there is regional, vertical integration that captures as
much of an industry’s supply chain (see Figure 1) locally as possible. This includes local capture of sales,
use and excise taxes placed on the cannabis market. The literature on cannabis as a legal, recreational
product and the economic impacts is limited as of September 2018.
Literature Review
Tax Rates, Sonoma County, July 1, 2018
Outdoor Cultivation Mixed Light Cultivation
Cultivation License Type Rate per Sq ft Cultivation License Type Rate per Sq ft
1C - Specialty Cottage $1.00 1C - Specialty Cottage $2.25
- Specialty Outdoor 1.50 1B - Specialty Mixed-light 4.50
- Small 2.00 2B - Small 6.50
- Medium 2.00
3B - Medium
6.50
Indoor Cultivation
Operator Type % of Gross Receipts
Cultivation License Type Rate per Sq ft Manufacturer 3.0%
1C - Specialty Cottage $3.75 Transporter 0.0%
1A - Specialty Indoor 7.50 Distributor 0.0%
2A - Small 11.25 Cannabis Nursery 0.0%
3A - Medium 11.25 Dispensary 2.0%
Testing Laboratory 0.0%
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Three main strains to this nascent research field affect our economic impact analysis. First are some
economic impact analyses available as of September 2018.4 Tax collection and compliance at the
cultivation, manufacturing, distribution, and retail levels are similar in structure (not exactly the same in
terms of full compliance) to the wine industry. The supply-chain relationships define “allied” industries
and other business dependent on the core industry. Related literature includes studies on the wine
industry. There are scores of these studies now, some of which are about California and Sonoma County
(see http://www.wineeconomy.com/ for the latest version for California from 2017 and at this link for
the Sonoma County report in 2014 link).
The second literature thread is on measuring market activity, perhaps to be combined with economic
impact studies. This literature looks at how to measure a market where there is illegal activity as the
basis or parallel to a legal marketplace. The medical cannabis market provides one way to look at
demand and supply, thus pricing and volume. How large and precise an indicator the medical market is
of the legal, recreational market remains to be seen. ERA Economics completed an extensive study in
2017 for the California Department of Finance that helped inform our analysis (see the ERA Economics
study here).
ERA Economics’ analysis centers on the decision function for cultivators: the core risk premium, the
direct cost of regulation, and the regulatory risk premium. The core risk premium for a cultivator is
continuing to operate in an illegal market at the potential cost of losing their business and personal
freedom. The direct cost is initial compliance of making the conversion, including permitting, fees, taxes,
and other requirements. The regulatory risk premium is keeping the compliance in place, including
ongoing tax payments (which may rise in cost over time) and increased costs and regulatory
complexities. The regulatory risk premium also includes costs of local permits, fees and other
compliance processes; this includes the cost of not producing while waiting for local government to
provide legal clearance. Currently, the cost of outdoor and mixed light are by far the most expensive
growing operations and styles.
Another important insight comes directly from the ERA Economics study. One might argue that the
economic impacts of this industry already exist, and the conversion from illegal to legal business is
simply a transfer of the same market to a different environment. We argue that because the choice to
convert is costly and the legal marketplace is “new” and complex in structure, the economic impacts of
the illegal market loses an enormous amount of supply-chain partnerships, and new, legal businesses
from formerly illegal operators are like new market entrants.
4 Two such studies are used here as ways to model thinking about the market’s structure and the supply -chain
relationships that help proliferate the economic impacts. University of the Pacific (UOP) has produced two studies
on Sacramento and Calaveras counties as models (see the UOP studies here). UC Davis’ Agricultural Issues Center
has also released a study on the cut flower industry and how legal cannabis may intrude on their growth (see the
UC Davis study here).
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Other studies are more academic in nature and have extensive
bibliographies in terms of recent studies. Butsic, et al. (2017)
investigates the ecological economics of where cannabis production
is located. Its focus is on Humboldt County, California. Humboldt
along with Del Norte and Mendocino counties make up the
“Emerald Triangle” of major, historic cannabis production in
California. Locations in this area tend to be close to each other, and
the authors see positive, “cluster” effects in terms of where
cannabis is grown. Doussard (2017) examines the labor market for
cannabis supply-chain jobs with a focus on the Colorado market.
Many of the gains come from import-substitution effects, where
due to the lack of potential imports, the legalization of recreational cannabis in Colorado created jobs
across the supply chain to fulfill the demand for legal cannabis. The gains may not last, especially if there
is nationalization,
and Colorado is generating gains from being a first mover. These two studies elucidate how economic
development efforts need to support initial gains when conversion takes place.
Firms like BDS Analytics are using big data to follow the cannabis market. Studies such as Caulkins, et al.
(2018) look at data available in Washington State after two years of legal use. Data show where market
opportunities may lie and how data perhaps increase competition in some areas and lower the current
3:1 retail to wholesale price ratio for value-added products. Yates and Speer (2018) look at the Colorado
market and how data of all kinds can help inform regulatory decisions and evolution to maximize social
welfare or gains to Sonoma County from market activity being legal. Their results suggest that increasing
the amount of available data is better for all and may inform how other states or national decisions
evolve.
Costs to Public Sector: Enforcement and Compliance
Some concern exists over increased costs to the public sector as a result of cannabis legalization for
recreational use in California. Since Proposition 64 passed, law enforcement and city and county
agencies have been concern with shifting burdens and rising costs versus estimated new tax revenues.
Data to draw conclusions are not available as of this writing, but the literature has a couple of studies
that provide some perspective. Carnavale, et al. (2017) uses recent evidence in Colorado and
Washington to investigate the public costs, benefits and concerns of cannabis legalization for
recreational use without a parallel federal policy. Their study suggests a need to align public policy with
public goals. This study advocates for a single, state-wide system, a public health approach, and
practical goals as primary. Reducing youth exposure and use and increasing transparency are examples.
For each stage of the supply chain, this study shows examples (page 75, Table 3) of regulatory
considerations. Their conclusions provide specific recommendations for a well-balanced, regulatory
environment where public costs are balanced with business support.
The depth and breadth of literature will also change. The next section explores market entry and the
basics of how new business may come into the cannabis space in Sonoma County.
Market Entry and Industry Challenges
A key challenge is to provide the correct incentives and entice current illegal businesses to become
legitimate. Tax and regulatory environments must balance between conditions of temperance and also
ERA Economics estimated a total
supply of 13.5 million pounds in
2016 (650,000 lbs. was for medical
use), of which 1/3 comes from the
“North Coast” region of California
that includes the “Emerald Triangle”
counties and Sonoma County (as
well as Lake, Marin and Napa
counties).
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business support to keep local businesses as involved as possible. Sustaining Technologies in Santa Rosa
has identified four different types of market entrants.
All in Businesses that see the potential and are willing to do the initial heavy
lifting to convert to a legitimate business
Hedgers Businesses that have both legal and illegal operations where full conversion
(becoming “all in” businesses) depends on cost of legal market entry
Wait and See Businesses that are illegal and considering conversion but are not going
toward legitimate businesses yet
Not in Businesses that have no intention to convert
These categories are important to understand moving forward. There is some evolution of hedgers into
all-in businesses and wait-and-see operators into hedgers. The speed at which this evolution happens
may be slow; however, local policy can help shape and augment such choices. Local governments should
want entrepreneurs in this market to convert from illegal to legal businesses.
Another challenge is determining how much supply-chain revenue can stay local versus being lost to
adjacent counties due to lack of raw materials supply or capacity along the supply chain. More
established industries (such as agriculture and food systems) vertically integrate by connecting local and
regional raw materials sources with local processors/manufacturing, distribution and retail. For
example, a grocery store is both a retailer and manufacturer simultaneously in cases where a full-service
grocery store includes amenities such as a bakery, deli, taqueria, etc.
A recent study commissioned by Oliver’s Market in Sonoma County shows the power of vertical
integration as an approach to retail.5 By sourcing local inputs, Oliver’s Market revenues in Sonoma
County were increased by 55 percent compared to a grocery store that sourced from outside Sonoma
County. Tax revenues generated were increased by approximately 73 percent due to multiple layers of
additional taxes paid by local vendors and wholesalers versus similar entities paying other counties and
cities those taxes. We provide a similar analysis below to show the economic power of local, vertical
integration and monitoring licenses in a way to fill supply chain gaps. Doing such work is the essence of
economic development.
Suppose there is a Sonoma County business that sources raw cannabis from Mendocino County farmers.
Farmers and suppliers in Mendocino County are generating income where Sonoma County farmers
could be gaining that income instead. This represents a leakage and loss to the county economy. This is
precisely the situation in October 2018 because of regulations related to land use in Sonoma County
that have rendered 8090 percent of the incumbent cultivators illegal.
Manufacturing and testing and distribution have similar outcomes. If local growers need to send their
product to another county, for instance, to Yolo County as businesses choose to locate close to UC Davis
and its scientific talent, that location choice represents a leakage to Sonoma County. By encouraging
such businesses to locate in Sonoma County and take on local contracts with local farmers, one part of
the supply chain links to another through vertical integration. Retail works the same way; local retailers
should attempt to source as much local product as economically feasible and possible to maximize the
local economic impacts.
5 See the Oliver’s Market study from 2016 at https://bit.ly/2QpE4Oe
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Cannabis businesses may not only grow their own supply, but may combine manufacturing, testing,
packaging, distribution, and retail in one space as a business model (microbusiness licensing allows
supply-chain links to be integrated inside the same license). A cannabis business may hold other links
within supply chain.
3. Cannabis Supply Chains
Earlier, we introduced similarities between cannabis and other agricultural crops. Some simple
differences between cannabis and other “crops” are:
• Cannabis remains federally illegal, thus no legal exports from
California to other states;
• It is a high-value product to weight; and • The compliance
network is vast and costly.
Labor resources also make up a large part of the value chain as raw cannabis is converted to various
products by adding value.
Sonoma County Cannabis Industry: Transition from Illegal to Legal Marketplace
The cultural divide between the cannabis marketplace and mainstream culture is more evident now that
cannabis is legal statewide. In a pre-legal environment, there was little need for non-cannabis
consumers (around 70 percent of the general population) to pay much attention to the marketplace. It
was mostly out of sight, out of mind.
That changed dramatically on January 1, 2018 when recreational cannabis consumption became legal.
Cities and counties throughout California had to wrestle with regulatory apparatus in short order to align
with the everchanging state regulations. Decisions about where to legally grow and manufacture
cannabis products and where to sell them became a source of controversy and disagreement between
residents.
The distribution of Sonoma County cultivators (farmers) was in the thousands pre-2016. Most were
small growers operating on small parcels of land and, in some cases, in residential neighborhoods. Some
farmers could make a living wholly, but most saw cannabis as a supplement to their household income.
Their transition to a legally-sanctioned pathway has slowed in Sonoma County in the face of restrictive
land-use policies balancing temperance and legal production incentives.
While pre-2018 production was illegal, it represented an economic presence that was difficult to ignore
due to its multiplier effects in the local economy. Thousands of people have been employed in the
cannabis market over past decades, and their expenditures for commercial and private consumption
stimulated local economic activity.
In 2018, very little grown flower has made it to the legal Sonoma County retail marketplace. Local
manufacturers likewise have relied on biomass supplies from outside Sonoma County. This loss of local
biomass supply clips the wings of economic growth as it represents a major leakage at a time when retail
sales are growing statewide in search of high-quality product.
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The downside for the legal market at this critical time is that the illegal market is thriving in 2018. Since
track and trace does not kick in until 2019, available product from illegal cultivation and even in some
cases from legallysanctioned operations are found in the illegal market. A portion of the illegal market
supplies the California consumer market through legacy channels that are comfortable to long-time
consumers. In reality, most of the illegal market production leaves the state in the forms of flower and
concentrates. Due to massive oversupply in Oregon, that product is also finding its way into the national
supply and illegal market prices have fallen significantly—to approximately $700 per pound for outdoor
and $1,600 for indoor. That’s a price decline of nearly 40 percent over the past two years.
Legal cultivators will find it more difficult to divert production to the illegal market once track and trace
begins, but not impossible. While it is not ideal for cultivators and manufacturers to bifurcate into
markets, it is a matter of survival due to regulatory costs rising quickly for most operators, slow permit
process in cities and counties, and rising taxes from all levels of government. These concerns are at the
heart of the ERA economics study mentioned above.
Two years ago, Sonoma County was perched to become a robust center of supply chain activity largely
due to the presence of thousands of small cultivators. Given the drastic reduction of local suppliers, it is
not clear the role Sonoma County will play on the state, or national, stage in the coming years.
Modeling the Legal Cannabis Industry
A major challenge is finding a model of what legitimate businesses are currently doing to measure what
the benefits are for illegal businesses to convert to legal businesses in Sonoma County. Aggregating
these benefits over the entire county economy is the next step. The data here are based on the grams of
cannabis involved, the standard unit of measure in a final product and the basis of pricing in cannabis
markets. Figures 2 and 3 provide the licenses volume as of July 1, 2018 for California across different
parts of the supply chain. These data also provide some perspective on how many potential businesses
may spring up in this marketplace and the economic possibilities if more conversions and
entrepreneurships take place.
Like the wine industry, the cannabis industry has allied industries as part of its normal operations.
These include fertilizer, commercial real estate, trucking/transportation, crop management, field design
and maintenance, fencing, water, packaging, printing, labeling, marketing, track and trace, and research.
Each of these “allied” industries have their own connections to cannabis and also help accelerate and
proliferate the economic impacts of these jobs.
Cannabis Cultivation
Outdoor cultivation is the classic growing condition associated with forested areas. Sonoma County is
part of the
“Emerald Triangle” region, but is at its southern vertex. Being proximate to the central counties of
Mendocino, Humboldt and Del Norte, exporting product out of state remains illegal but still exists
(interstate trade will not be allowed legally until a national policy is passed); Sonoma County remains a
hub for logistics and retail in the illegal market.
Indoor cultivation is associated with a highly-controlled environment, where cultivators set up optimal
growing conditions as possible. Pests and other agricultural concerns can be mitigated through an
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indoor setting, but space management, energy and other costs of such cultivation can be relatively large.
New innovations in LED lighting design and environmental control can significantly lower energy
consumption.
Mixed light cultivation is similar to indoor with less control and a focus on manipulating the light as the
key factor in growing. Greenhouses or hoop houses are a classic example of such agricultural practices,
which use artificial light, as with indoor growing, that can be controlled in combination with the use of
natural light. Because of the similarities, some areas may see a conversion to indoor grow if product
prices are high enough to cover the additional cost.
ERA Economics (2017) identifies three types of cultivation as the cornerstone of cannabis supply:
• Outdoor;
• Indoor; and • Mixed Light.
Figure 2: Cannabis Supply Chain Licenses Across California, July 1, 2018 (number of licenses)
Manufacturing
Licenses
Alameda
Los Angeles
Riverside
Humboldt
Monterey
Sacramento
San Bernardino
San Francisco
Santa Cruz
Sonoma
San Diego
Santa Clara
Yolo
All Others
Totals
111
80
76
53
36
32
32
31
29
22
16
13
11
61
603
Temporary Cultivation
Santa Barbara County
Humboldt County
Mendocino County
Monterey County
Calaveras County
Trinity County
Riverside County
Los Angeles County
Sonoma County
Yolo County
Sacramento County
Alameda County
All Others
Totals
Licenses
1,288
843
616
405
195
191
189
156
103
91
88
81
310
4,556
Retail Storefront
Los Angeles
Riverside
San Francisco
Sacramento
Orange
San Diego
Stanislaus
Santa Cruz
Mendocino
Solano
Alameda
Sonoma
Santa Clara
All Others
Totals
130
32
32
27
18
18
16
14
13
13
12
11
10
68
414
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Retail: Non-store
Alameda
Sacramento
San Francisco
Los Angeles
Marin
Monterey
Riverside
San Bernardino
SLO
Colusa
Lake
Orange
Totals
44
25
23
8
6
3
2
2
2
1
1
1
118
Testing Facilities
Los Angeles
Alameda
Humboldt
San Diego
Monterey
Sacramento
Sonoma
Marin
Orange
Riverside
San Francisco
Santa Cruz
Ventura
7
6
3
3
2
2
2
1
1
1
1
1
1
Totals
31
Each license type has a financial performance model unique to its link in the supply chain, but ultimately
each is based on weight and value. For example, indoor growing operations with 22,000 square feet (sq
ft) of canopy produce 17,600 kg in volume (weight) per year at $5,000 per kg in value (dollars). These
models were developed over the past two years by interviewing cultivators and researching average
performance metrics. Cultivators employ many different techniques that produce many different
results, even within the same license class.
Survey interviews noted differences among different yield levels and best practices in pursuit of higher
yields.
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Figure 3: Cannabis Supply Chain Licenses Across California, July 1, 2018 (number of licenses)
Microbusiness
Los Angeles
Alameda
Santa Clara
San Francisco
Riverside
Humboldt
Santa Cruz
Siskiyou
El Dorado
San Diego
Santa Barbara
Sonoma
Stanislaus
Mendocino
Sacramento
San Bernardino
Shasta
Solano Totals
25
18
10 8
7
4
4
4
2
2
2
2
2
1
1
1
1
1
95
Distributor – Transport
Mendocino 25
Humboldt 16
Alameda 4
Riverside 2
Monterey 1
Sacramento 1
Sonoma 1
Trinity 1
Totals 51
Distributor
Los Angeles
Alameda
Monterey
Humboldt
Riverside
Sonoma
Santa Cruz
San Francisco
San Diego
Mendocino
San Bernardino
All Others
Totals
74
57
32
30
29
26
19
15
11
10
10
70
383
Sources: California Cannabis Portal (https://cannabis.ca.gov/) and Bureau of Cannabis Control (https://www.bcc.ca.gov/) and
California Department of Public Health (https://www.cdph.ca.gov/Programs/CEH/DFDCS/MCSB/Pages/LicenseeLookup.aspx)
Figure 4 provides the data that lead to $233.3 million in wholesale value of recreational cannabis
product produced in Sonoma County by legal, licensed cultivators.
Figure 4: Estimated Wholesale Value from 52 Cultivator Licenses in Sonoma County, as of July
1, 2018
Cultivation License Type
# of
licenses Sq Ft
Grams per
license
Total
Grams
Price per
gram
$ value per
license
Estimated
Total Value
Medium Indoor 4 88,000 4,400,000 17,600,000 $5.00 $22,000,000 $88,000,000
Medium Outdoor 13 567,450 1,658,700 21,563,100 $2.00 $3,317,400 $43,126,200
Small Indoor 2 20,000 2,000,000 4,000,000 $5.00 $10,000,000 $20,000,000
Small mixed light Tier 1 1 10,000 1,400,000 1,400,000 $3.00 $4,200,000 $4,200,000
Small Outdoor 12 120,000 380,000 4,560,000 $2.00 $760,000 $9,120,000
Specialty Cottage Mixed
Light Tier 1 1 2,500 350,000 350,000 $3.00 $1,050,000 $1,050,000
Specialty Cottage Mixed
Light Tier 2 2 10,000 700,000 1,400,000 $3.00 $2,100,000 $4,200,000
Specialty Indoor 12 60,000 1,000,000 12,000,000 $5.00 $5,000,000 $60,000,000
Specialty Mixed Light Tier 1 1 5,000 700,000 700,000 $3.00 $2,100,000 $2,100,000
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Specialty Outdoor 4 20,000 190,000 760,000 $2.00 $380,000 $1,520,000
Total 52 902,950 12,778,700 64,333,100 $233,316,200
Cannabis Manufacturing
Categorically, refined oils, the flowers/buds, and biomass (the remaining, usable parts of the cannabis
plant) are main products for value-added goods. Value-added goods and services have many forms and
many directly and indirectly related components to take raw materials to finished products. Equipment
purchases, commercial space, heating and air conditioning (HVAC), transportation, mechanical
engineering, architects, and many other sub-industries may need to be engaged to complete value-
added services.
Compliance is another value-added component in terms of track and trace and understanding each
product’s chemistry and origin (like “terroir” and viticultural areas in the wine industry). Hence, quality
assurance and quality control are also major elements of cannabis manufacturing. The possibilities of
final products may be somewhat unlimited. From gummies to candies to simply refined buds, the craft-
manufacturing process is analogous to wine or beer or confection making, and likely has a lot of the
same processing elements. Market possibilities are vast.
Starting with a harvested, agricultural product, the raw inputs become products based on adding value.
Each of these allied industries are potential places of economic development and business growth in
Sonoma County once legalization and conversion begins in earnest:
• Quality control and sorting;
• Preparation;
• Extraction and processing;
• Post-processing and quality assurance;
• Drying or initial storage;
• Packaging and final processing; and
• Final Storage.
Cannabis Distribution
Distribution in the legal form has compliance (taxation and track and trace) and involves many of the
same costs as any other food distribution:
• Warehousing;
• Logistics (trucking, last-mile delivery, refrigeration, etc.); and
• Security.
Additional expenses follow other business settings: electricity, water/sewer, roadway maintenance,
building maintenance, etc. Each step or link in these relationships generates more economic activity and
more connections to households throughout Sonoma County as more workers are affected. Because
distribution companies look to optimize scale and perhaps take on multiple clients to spread risk and to
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grow, as the cannabis industry evolves and matures, California locations where distribution is most likely
to thrive will also evolve.
Cannabis Retail
Once distribution takes place, retail begins. Retail is a cash activity for now. This is likely not the
preference of legitimate businesses long-term. Because the United States government’s scheduling does
not allow for credit market activity, merchant activity in banks and credit unions (depository institutions
where cash can be stored) may be limited also. Due to consistent cash needs, cannabis businesses, from
farmer to retailer, are faced with additional security costs and concerns to complete transactions.
Some debate exists on what retail analog best describes cannabis. While the future likely includes a mix
of specialty shops and grocery shelf space, regulated retail is the only, current choice. Three major issues
apply to a tightly monitored environment where cannabis retail is handled more like a high-end jewelry
shop than a specialty food store:
• Until removal from Schedule 1 status with the federal government, merchant banking services
are going to be largely unavailable and thus all transactions continue to be in cash;
• The product by volume is relatively high value, like diamonds in glass cases, and thus have
different security conditions and transport needs/costs; and
• The nascent market aspects suggest something more like an educational wine-tasting
experience rather than a mass marketing and shelf space competition.
There are some inherent inefficiencies from such models, and this industry’s evolution and success as it
moves forward legally depends on innovations and regulatory generalizations to help reduce costs.
Cannabis Supply Chain Summary and Direct Economic Impacts
As shown above, this study used multiple sources of data to estimate the current (as of June 30, 2018)
level of economic activity in the cannabis markets in Sonoma County. These “direct impacts” are the
basis of estimates for the broader economic impacts of this industry; the amount of economic activity
possible with more regional, supply-chain integration; and the benefits of conversion of illegal regional
businesses into legitimate ones. Figure 5 summarizes the direct impacts from the full supply chain
including allied industries.
Figure 5: Direct Economic Impacts, Legal Cannabis Industry, June 30, 2018 (per kilogram (kg)
based on 64,330 kilograms produced in Sonoma County in 2018)
Category Direct Impacts: Aggregate Direct Impacts per kg
Cultivation – Greenhouse $11,550,000
Cultivation – Indoor Grow $168,000,000
Cultivation – Outdoor Grow $53,766,200
Manufacturing $70,427,000
Distribution – Transport Allied
Distribution Allied
Testing Allied
Retail – Storefront (Added Value)* $27,571,200
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Totals $331,314,400 $5,150
*Note: There is an estimated amount of gross retail sales of $140,584,000, but due to leakages along the supply
chain, only $27.5 million remains local in Sonoma County.
These direct impacts are new to the economy because they generate new tax revenues for city, county
and state government. Sonoma County’s economy, according to the Bureau of Economic Analysis, is
approximately $25 billion in 2009 dollars as of January 1, 2018. The methodology below provides one
way to measure the current market size.
Methodology
We initially arrived at a range of $54 million low end and $65 million on the high end using estimated,
legitimate sales in Sonoma County from statewide customers for 2018. These estimates are based on
current tax collection with the other period forecasts divided by all retailers currently licensed in the
state. No weights were applied for location. We then multiplied that average with the number of
licensed dispensaries in Sonoma County to arrive at a $70 million estimate. This estimate is very close to
the one implied by CDTFA data extrapolating tax collections on legal cannabis sales from Sonoma County
after 2018 quarter 2 (July 1, 2018).
Sustaining Technologies LLC has developed a consumption model multiplying an estimated percent of
the population that consumes cannabis with average consumption (seven consumer segments at varied
volumes of annual consumption derived from Colorado’s data and two other sources). The results
suggest that Sonoma County residents consume around $130 million of product per year. Another $20
million are likely sold to tourists for a total sales projection of $150 million per year. That would produce
a conclusion that the legal retail is around 47 percent ($70 million of $150 million) of total sales with the
rest coming from illegal or imported sales.
The next section provides the economic impacts generated from these direct impacts.
4. Broader Effects (IMPLAN®)
Economic impacts come in three “flavors” that start the same way ripples come from throwing a rock
into a still pond. The rock, in this case, is a new cannabis cultivator, manufacturer, distributor, or retail
business. The new revenues ripple out as additional economic impacts produced from by new
employers.
Direct effects come from these projects and the subsequent business and worker gains. Indirect effects
come from workers employed by vendors to these cannabis businesses or allied businesses (wholesale,
testing, etc.), producing broader spending. For example, a testing business may purchase more office
furniture due to new cannabis businesses providing more demand for services. This spending supports
some portion of office furniture businesses and its employees locally as an example. This type of
spending has induced effects on the broader economy. The furniture store’s employees spend wages on
groceries, medical visits, restaurant meals, and various other industries that have nothing to do with the
original businesses affected. Figure 6 shows the multiplier effect of these rounds of new spending.
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Figure 6: Economic Impacts
Description of Direct to Total Impacts
In each figure below, we assume 64.33 million grams or approximately 64,330 kilograms of product
annually. Notice the breadth and depth of industries and workers affected by an expansion and the
current economic footprint of this industry in Sonoma County. The business revenues derived from the
cannabis industry involve its licensee businesses and allied industries (as shown in each figure from
Figures 7 through 11) as well as hundreds of other industries that have nothing to do with Figure 1’s
supply chain, but everything to do with the regional economy.
From these revenues, wages are paid to support full-time employment and taxes of various kinds are
paid indirectly due to the new economic activity. Per kilogram of raw product produced in Sonoma
County, there is approximately $7,800 of business revenue spread throughout countywide businesses.
If Sonoma County did not cultivate cannabis, allied industries (manufacturing, distribution and testing)
would have less incentive to locate here; the $7,800 acts as an algorithm for the economic impact of one
additional kilogram of raw cannabis biomass grown in Sonoma County legally.
Estimated wages of $2,549 are paid per kilogram, while $519 in tax revenues (including the excise taxes
paid to the state of California) are supported per kilogram. One job full-time worker is supported per 25
kilograms. These numbers are connected by the general activity of $7,800 per kilogram in business
revenues. Other costs, profits and leakages to businesses and workers outside Sonoma County make up
the remaining amount.
Figure 7: Business Revenues
Category Direct Impacts
Indirect and
Induced Impacts Overall Impacts Per kg
Induced Impacts
Indirect Impacts
Direct Impacts
Total
Economic
Impacts
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Cultivator – Indoor $11,550,000 $7,761,600 $19,321,600
Cultivator – Greenhouse $168,000,000 $94,882,000 $262,882,000
Cultivator – Outdoor $53,766,200 $11,943,000 $65,709,200
Manufacturing $70,427,000 $35,830,900 $106,257,900
Distribution $0 $8,650,100 $8,650,100
Testing $0 $103,200 $103,200
Retail ($140,584,000)
Retail margin $27,571,200 $13,970,200 $35,541,400
Total $331,314,400 $173,141,000 $504,455,400 $7,840
*Note: There is an estimated amount of gross retail sales of $140,584,000, but due to leakages along the supply
chain, only $27.5 million remains local in Sonoma County.
Cultivation gains are seen as being local by definition, and it is in manufacturing and retail where the
gains expand. The more those processes can use local markets, the better. We assume that Sonoma
County cultivators are producing more cannabis than is consumed in Sonoma County, thus there is an
intrastate export market where Sonoma County’s economy is the “domestic” market.
Figure 8 shows how sourcing more local products affects manufacturing, allied industries and retail
environments in such a way to increase the economics gains of conversion to a legitimate business per
raw cannabis kilogram. We estimate the sum of these additional, integration gains as 31.2 percent more
than the status quo. By connecting Sonoma County links in the supply chain more completely, the
Sonoma County economy reaps 31 percent more economic benefits.
Figure 8: Sourced Locally Versus Outside Sonoma County, Manufacturing and Retail Value -
Added 2x (from current amount of economic activity)
Category Direct Impacts
Indirect and
Induced
Impacts Overall Impacts Per kg
Cultivator – Indoor $11,550,000 $7,761,600 $19,321,600
Cultivator – Greenhouse $168,000,000 $94,882,000 $262,882,000
Cultivator – Outdoor $53,766,200 $11,943,000 $65,709,200
Manufacturing $140,854,000 $71,661,800 $212,515,800
Distribution $0 $17,300,200 $17,300,200
Testing $0 $206,400 $206,400
Retail ($140,584,000)
Retail margin $55,142,400 $27,940,400 $71,082,800
Total $429,312,600 $231,695,400 $661,008,000 $10,275
Percentage gain from
baseline in Figure 5 +31.2%
Figures 9, 10 and 11 complete the data summary by providing the annual wages, jobs supported and
annual tax revenues at the state and local level collected from our estimated level of cannabis
cultivated, manufactured and sold in Sonoma County.
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Figure 9: Wages
Category Direct Impacts
Indirect and
Induced Impacts Overall Impacts Per kg
Cultivator – Indoor $5,625,900 $2,976,700 $8,602,600
Cultivator – Greenhouse $46,886,900 $23,885,600 $70,722,500
Cultivator – Outdoor $23,498,000 $17,270,000 $40,768,000
Manufacturing $13,771,700 $13,248,500 $27,020,200
Distribution $0 $2,703,600 $2,703,600
Testing $0 $47,000 $47,000
Retail $9,425,000 $4,681,800 $14,106,800
Total $99,207,500 $64,813,200 $164,020,700 +$2,549
Gain from baseline in
Figure 5 if more local +$3,344
Jobs, wages and taxes come from business revenues. For the jobs numbers, notice that the per-kilogram
figures are less than one full-time equivalent job. An alternative way of viewing the estimate of 0.04 jobs
per kilogram produced is that one full-time equivalent worker is supported somewhere in the cannabis
supply chain for every 25 kg of raw product cultivated. The projected production in 2018 for Sonoma
County is estimated to support 1,674 jobs in cannabis directly and over 2,900 jobs throughout the
county just in the legal market.
Taxes include those projected through the end of the year from California Department of Tax and Fee
Administration (www.cdtfa.ca.gov) and are reflected on the line item called “Excise Taxes” (excise tax on
retail sales is 15 percent).
Figure 10: Jobs Supported, Direct, Indirect, Induced and Total Impacts
Category Direct Impacts
Indirect and
Induced
Impacts Overall Impacts Per kg
Cultivator – Indoor 86.0 61.0 147.0
Cultivator – Greenhouse 712.0 478.0 1,190.0
Cultivator – Outdoor 412.0 249.0 761.0
Manufacturing 256.0 218.0 474.0
Distribution 37.0 37.0
Testing 0.6 0.6
Retail 208.0 97.0 305.0
Total 1,674.0 1,140.6 2,814.6 +0.04 jobs
Gain from baseline in
Figure 5 if more local
+0.05 jobs
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Figure 11: Tax Revenues Supported Annually
Type of Tax Amount Per kg
Employment Taxes $840,800
Sales taxes $6,854,800
Excise Tax $10,500,000
Property taxes $6,026,500
Personal Income $6,752,500
Other Taxes and Fees $2,451,200
Total State and Local taxes $33,425,800 +$520
Gain from baseline in Figure 5 if more local +$680
As Sonoma County considers the use of agricultural and commercial space for economic development, it
would be wise to study and compare cannabis to other agricultural industries in Sonoma County and
regionally to gain a complete perspective on land use choice and the economic impacts conversion. It is
difficult to imagine another crop that has as much economic impact and value per kilogram of raw
production for Sonoma County agriculture.
5. Conclusions and Policy Recommendations
This study shows the economic impacts from the current state of legal cannabis business, where
conversion of illegal businesses and the expansion of new businesses can lead to broader economic
impacts. This study was sponsored by several Sonoma County cannabis businesses. The cannabis supply
chain, like any other agricultural good, determines its ability to support a broad number of industries
and jobs. Agriculture grown locally is likely to produce more products than can be sold locally, which
implies export possibilities. The legal cannabis market cannot sell products outside California legally as
of 2018. For Sonoma County, the challenge is determining how to maximize the opportunities of
cultivation, manufacturing, distribution and retail businesses within the county versus purchasing those
goods and services from outside the county. This balance between leakages and exports is a major part
of economic development and support for legal cannabis. Major findings include:
• Sonoma County’s overall retail sales of cannabis products are projected to be $150 million in
2018 based on the first two quarters of legal, taxable activity and estimates of illegal activity;
• 52 licensed cultivators are currently identified by the state of California as of July 1, 2018 in
Sonoma
County; o Another 178 businesses licenses are in Sonoma County, predominantly temporary
cultivation licenses;
• There is an estimated 64.33 million grams of cannabis product or 64,330 kilograms of raw
product to be produced in Sonoma County in 2018;
• The estimated amount of cannabis legally cultivated in Sonoma County is $233 million for 2018;
• Estimated sales in Sonoma County are $150 million in 2018 of cannabis products, suggesting
some cultivation is exported to other parts of California and beyond;
• Public costs exist for enforcement and compliance in the legal environment and to enforce laws
against continued, illegal activity
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• In 2018, given the current level of economic activity and supply-chain connections, state and
local taxes of over $33 million are estimated from the economic impacts paid across many
categories in Sonoma County; and
• In the legal market, as many as 2,800 jobs may be supported in this industry through all the
supply chain connections;
• For every kilogram of cannabis produced in Sonoma County, the county economy generates
$7,800 of business revenue across hundreds of industries; o If all local retail sales came from
local production, there would be a 31 percent increase in economic impacts within Sonoma
County.
Recommendations
• Public policy should focus on incentives for conversion of current illegal businesses, enhancing
the hedgers and wait-and-see possibilities for conversion by reducing tax rates and compliance
costs;
• Encourage the development of a craft, artisanal sector;
• Provide entrepreneurship training and support for business conversions;
• Centralize distribution and use of local product such that benefits can be maximized across
county economy;
• Make provisions for local processing of plant material into saleable flower and supply for
manufacturers to make concentrates;
• Support cannabis tourism through Sonoma County Tourism; and
• Create a long-term vision for development of the cannabis industry in Sonoma County.
References and Data Sources
Bureau of Cannabis Control (2018) “Check a License.” Accessed at
https://www.bcc.ca.gov/clear/license_search.html
California Cannabis Portal (2018) “Laws and Regulations.” Accessed at https://cannabis.ca.gov/laws-
regulations/
California Department of Public Health (2018) “Manufactured Cannabis Safety Branch: Licenses.”
Accessed at https://www.cdph.ca.gov/Programs/CEH/DFDCS/MCSB/Pages/LicenseeLookup.aspx
California Department of Finance (2017) “Economic Impact Analysis of Medical Cannabis Cultivation
Program
Regulations: Standardized Regulatory Impact Assessment (SRIA).” by ERA Economics LLC for California
Department of Food and Agriculture and California Department of Finance, Accessed at
http://www.dof.ca.gov/Forecasting/Economics/Major_Regulations/Major_Regulations_Table/documen
ts/2017 0203FinalMCCPSRIA.pdf
California Department of Food and Agriculture (2018) “CalCannabis Cultivation Licensing.” Accessed at
http://calcannabis.cdfa.ca.gov/
Carnevale, John T., Raanan Kagan, Patrick J. Murphy, Josh Esrick (2017) “A practical framework for
regulating for-profit recreational marijuana in US States: Lessons from Colorado and Washington”,
International Journal of Drug Policy, vol.42, pp. 71-85.
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3
Caulkins, Jonathan P., Yilun Bao, Steve Davenport, Imane Fahli, Yutian Guo, Krista Kinnard, Mary
Najewicz, Lauren Renaud, Beau Kilmer. (2018) “Big data on a big new market: Insights from Washington
State’s legal cannabis market.” International Journal of Drug Policy, Volume 57, pages 86-94.
County of Sonoma (2018) “All Cannabis Tax Rates.” Accessed at
https://sonomacounty.ca.gov/Cannabis/Taxes/All-Cannabis-Tax-Rates/
Doussard, Marc. (2017) “The Other Green Jobs: Legal Marijuana and the Promise of Consumption-Driven
Economic Development.” Journal of Planning Education and Research, pages 1-14.
Sonoma County Grapegrowers (2015) “Economic Impact of Sonoma County Wine Industry: Summary.”
Accessed at https://sonomawinegrape.org/wp-
content/uploads/2014%20Sonoma%20County%20Economic%20Impact%20Report%20Release.pdf
Sonoma State University (2016) “Going Local as a Retailer: Oliver’s Market as a Case Study.” mimeo,
Accessed at https://bit.ly/2QpE4Oe
University of California Agricultural Issues Center (2017) “Economics of the California Cut Flower
Industry and Potential Impacts of Legal Cannabis.” Accessed at
https://www.cafgs.org/assets/docs/final_calflower_reportweb.pdf
University of the Pacific (2018) “Cannabis Sector Analyses.” Accessed at
https://www.pacific.edu/academics/schools-and-colleges/eberhardt-school-of-business/centers-
andinstitutes/center-for-business-and-policy-research/custom-studies/cannabis-sector-analyses.html
United States Food and Drug Administration (2018) “Cannabis Q&A.” Accessed at
https://www.fda.gov/NewsEvents/PublicHealthFocus/ucm421168.htm
Van Butsic, Benjamin Schwab, Matthias Baumann, Jacob C. Brenner (2017) “Inside the Emerald Triangle:
Modeling the Placement and Size of Cannabis Production in Humboldt County, CA USA.” Ecological
Economics, Volume 142, Pages 70-80.
Yates, Dave and Jessica Speer (2018) “Over and under-regulation in the Colorado Cannabis industry—A
dataanalytic perspective.” International Journal of Drug Policy, Volume 59, pages 63-66.
Wine Institute (2018) “Economic Impact of California Wine, 2017.” Accessed at http://www.wine-
economy.com/ Data:
BDS Analytics provided data that helped complete the estimation of market size. See
https://bdsanalytics.com/ for more.
California Department of Tax and Fee Administration Staff provided sales/excise tax information for
each quarter of quarter 1 and 2 in 2018 directly through e-mail. See https://www.cdtfa.ca.gov/ for
more.
Sustaining Technologies provided both survey and estimation data that helped inform this report. Those
surveyed were told they would remain anonymous.
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Attachment 4: City of Grover Beach Revenue Projections and Staff Report
CITY COUNCIL STAFF REPORT
___________________________________________________________________
TO: Honorable Mayor and City Council DATE: April 16, 2018
FROM: Matthew Bronson, City Manager
PREPARED BY: Matthew Bronson, City Manager
SUBJECT: Options for Amending Commercial Cannabis Tax Structure
____________________________________________________________________________
RECOMMENDATION
Receive information on potential options for amending the City’s commercial cannabis tax
structure and provide direction to staff on desired amendments.
____________________________________________________________________________
BACKGROUND
On April 2, 2018, the Council received an update on the implementation of the City’s commercial
cannabis ordinances and regulatory processes and provided direction to staff on policy issues
related to commercial cannabis. These policy issues included the following items:
• Development application review and permit process changes
• Retailer businesses with no storefront
• Level Two manufacturing with volatile solvents other than ethanol
• Adult use commercial cannabis businesses
• Onsite consumption
• Regulatory budget and permit fees
• Tax structure changes
Based on Council direction, staff is currently amending the commercial cannabis land use and
regulatory ordinances to: 1) change the development application review process for the Planning
Commission to issue Use Permits for non-retailer businesses, 2) allow Level Two manufacturing
with volatile solvents, 3) allow adult use commercial cannabis businesses in addition to medicinal
businesses, and 4) draft standards for greater restrictions on personal cultivation in residences.
The amended ordinances will be brought to the Council for consideration in May.
In addition, the Council requested that staff conduct further analysis into the commercial cannabis
tax structure changes and bring back information for the Council to consider for potentially
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amending this structure. The cannabis tax approved by voters in November 2016 (Measure L-16)
includes a 5% gross receipts tax on medical commercial cannabis activities and a 10% tax on adult
use/recreational commercial cannabis activities. This gross receipts tax does not apply to
cultivation businesses which have a $25/square foot tax on the first 5,000 square feet of canopy
space and $10/square foot on square footage beyond that. Pursuant to Proposition 218, these
rates represent the maximum tax rates for cannabis businesses unless voters approved a higher
rate structure. Since the City’s rates were approved, numerous jurisdictions have established
cannabis tax rates as shown in Attachment 1. This compilation includes San Luis Obispo and Santa
Barbara counties which have each placed a measure on the June 2018 ballot to establish a
commercial cannabis tax.
Agenda Item No. ______ 12
Staff Report: Options for Amending Commercial Cannabis Tax
Structure April 16, 2018
Staff identified the following four general options for changing the cannabis tax structure at the
April 2nd meeting:
• Reduce the 10% gross receipts tax rate for adult use businesses
• Create a flat gross receipts tax rate of 4-5% for all cannabis businesses except cultivation
• Charge different gross receipts tax rates for different cannabis uses
• Lower the cultivation square foot tax
The Council concurred in reducing the 10% gross receipts tax for adult use businesses and
requested further information and initial revenue estimates of the following tax rate structures:
• Retail: 4-5% of gross receipts
• Manufacturing/Distribution: 2%, 3%, and 5% of gross receipts
• Cultivation: Change from canopy area to building area and reduce to $5/square foot
Staff has developed initial revenue estimates for the current baseline tax structure and six
potential options shown in Attachment 2. These estimates include next fiscal year 2018-19 along
with three years out (2021-22) to match the timeframe of the existing baseline estimates realizing
the degree of uncertainty in projecting out these revenues. Given that this is a new industry in
Grover Beach, the current baseline tax structure assumes a conservative estimate for business
revenues (gross receipts) along with the number of businesses operating. The current structure
does not include a specific estimate of increased business revenues with allowing adult use
businesses and products at this time though some increase is likely once businesses start
operating.
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Below is a brief summary of the current tax structure and each of the six options for the Council’s
consideration:
• Current Baseline Structure – 5% tax and $25/square foot cultivation tax. Baseline
structure is based on a projection of 10 separate businesses to operate beginning in 2018-
19 based on previous and impending permits issued (4 retailers and 6 manufacturers). Under
this structure, revenues for 2018-19 are projected at $800,000 and 2021-22 revenues
projected at $2 million.
• Option 1 – 5% tax and $5/square foot cultivation tax. This option retains the 5% tax rate
while lowering the cultivation tax to $5/square foot. Revenue estimate for 2018-19 remains
at $800,000 given a lack of cultivation businesses assumed next year while 2021-22 revenues
are projected at $1.74 million or approximately $260,000 (13%) lower than the baseline.
• Option 2 – 5% retailer tax, 3% manufacturing/distribution tax, $5/sf cultivation tax.
This option retains the 5% tax rate for retail businesses while lowering the tax to 3% for
manufacturing and distribution businesses and the cultivation tax to $5/square foot.
Revenue estimate for 2018-19 is lowered to $560,000 with lower tax revenues expected
from manufacturing businesses while 2021-22 revenues are projected at $1.22 million or
approximately $780,000 (39%) lower than the baseline.
• Option 3 – 5% retailer tax, 2% manufacturing/distribution tax, $5/sf cultivation tax.
Similar to the above option, this option retains the 5% tax rate for retail businesses while
lowering the tax further to 2% for manufacturing and distribution businesses and the
cultivation tax to $5/square foot. Revenue estimate for 2018-19 is lowered to $440,000
with less revenues expected from manufacturing businesses while 2021-22 revenues are
projected at $960,000 or approximately $1 million (48%) lower than the baseline.
Staff Report: Options for Amending Commercial Cannabis Tax
Structure April 16, 2018
• Option 4 – 4% tax and $5/square foot cultivation tax. Similar to Option 1, this option
uses a consistent tax rate for all businesses (4% in this case) while lowering the cultivation
tax to $5/square foot. Revenue estimate for 2018-19 is lowered to $640,000 while 2021-22
revenues are projected at $1.41 million or approximately $590,000 (30%) lower than the
baseline.
• Option 5 – 4% retailer tax, 3% manufacturing/distribution tax, $5/sf cultivation tax.
This option includes a 4% tax rate for retail businesses and 3% for manufacturing and
distribution businesses with the lowered cultivation tax to $5/square foot. Revenue
estimate for 2018-19 is lowered to $520,000 while 2021-22 revenues are projected at $1.15
million or approximately $850,000 (43%) lower than the baseline.
• Option 6 – 4% retailer tax, 2% manufacturing/distribution tax, $5/sf cultivation tax.
This option includes a 4% tax rate for retail businesses and 2% for manufacturing and
distribution businesses with the lowered cultivation tax to $5/square foot. Revenue
estimate for 2018-19 is lowered to $400,000 while 2021-22 revenues are projected at
$892,000 or approximately $1.1 million (55%) lower than the baseline.
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These six options provide choices for the Council to consider in amending the current tax
structure. The Council could also consider a tax cap where a business would not pay taxes above a
certain level of gross receipts (e.g., $3-5 million). While the majority of jurisdictions identified in
Attachment 1 charge the same tax rate for businesses other than cultivation, several jurisdictions
have different rates for retailers and manufacturers including Long Beach, Watsonville, and Santa
Barbara County if approved by voters.
Of the six options, Option 2 (5% retailer and 3% manufacturer/distributor rates) might particularly
meet the Council’s expressed interest in encouraging substantial manufacturing investment while
still generating desired tax revenues to address community needs. The 5% retailer rate is lower
than the initial 4% rate proposed for San Luis Obispo County that increases to 6% in 2019 or the 6%
rate proposed for Santa Barbara County and the 3% manufacturing rate is similar to the Santa
Barbara County rate. These rates in Option 2 would be half the median tax rate in jurisdictions
listed in Attachment 2 which is 10% for retailers and 6% for manufacturers. The median cultivation
square footage tax for jurisdictions using this methodology is $25/square foot of canopy space in
contrast to $5/square foot of building area as identified by the Council. Staff is researching this
change in methodology from canopy space to building area to ensure Proposition 218 compliance.
Staff is seeking Council’s direction in determining the most appropriate commercial cannabis tax
structure and corresponding amendments to the existing structure. Pending this direction, staff
would bring a resolution to the Council in May to formally change the tax amount to be charged
under the maximum amount authorized by Measure L-16. This amended tax structure would be
retroactive to be applicable for any cannabis businesses starting to operate in April.
FISCAL IMPACT
Staff has estimated that the City’s commercial cannabis tax will generate approximately $800,000
in 2018-19 and up to $2 million annually over time under the current tax structure. Council
direction for an amended structure with lower rates would change these estimates and staff would
incorporate updated estimates into the City’s budget development for next year and long-term
financial forecasting. There would be a decrease in anticipated tax revenue projected from
lowering rates, but conversely there could be an increased level of cannabis business activity
particularly with adult use businesses that would ultimately lead to greater tax revenues.
Staff Report: Options for Amending Commercial Cannabis Tax Structure
April 16, 2018
ALTERNATIVES
The Council has the following alternatives to consider:
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1. Receive information on potential options for amending the City’s commercial cannabis tax
structure and provide direction to staff on desired amendments; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
ATTACHMENTS
1. Examples of Adult Use Tax Rates in California Jurisdictions
2. Cannabis Tax Rate Revenue Estimates
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Attachment 1
Examples of Adult Use Cannabis Tax Rates in California Jurisdictions
Jurisdiction Retail Manufacturing Cultivation Other/Comment
Adelanto 5% 5% 5% Cultivators can pay $5/sf of facility as alternative
Berkeley 5% 5% 5% Recently reduced from 10%
Carson 18% 18% $25/sf Tax increased annually by CPI
Cathedral City - - $25/sf $1 per gram/unit of cannabis concentrate or product
Coachella 6% 6% $15/sf Only wholesale cannabis businesses allowed
Coalinga 10% - $25/sf $10/sf after first 3,000 sf of cultivation space
Dixon 15% 15% 15% -
Fillmore 15% 15% $30/sf $15/sf after first 3,000 sf of cultivation space
Gonzales - 5% $15/sf Rates can be raised in 3 years to 15% and $25/sf
Greenfield 5% 5% $15/sf Rates increase after 2020; nursery rate $2/sf
Grover Beach (current) 10% 10% $25/sf $10/sf after first 5,000 sf of cultivation space
Hayward 15% 15% 15% -
King City - $30,000 $25/sf $10/sf after first 5,000 sf of cultivation space
Long Beach 10-12% 6-8% $12-15/sf Marijuana business license tax also imposed
Oakland 10% 10% 10% Considering ballot measure to lower rates
Perris 10% - $25/sf -
Pittsburgh 10% 10% 10% -
Point Arena 10% 10% 10% -
Richmond 5% 5% 5% -
Sacramento 4% 4% 4% -
SLO County (if apprv) 4% 4% 4% Raised 2% every year to 10% maximum
Salinas 5% 5% $15/sf Rates increase in 2019 to 10% and $25/sf
San Diego 5-15% 5-15% 5-15% -
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San Jacinto 15% 15% $50/sf -
San Leandro 10% 10% 10% -
Santa Barbara (city) 20% 20% 20% -
Santa Barbara Co (if apprv) 6% 3% 4% Also 1% on nurseries and distributors
Santa Cruz 7% 7% 7% Maximum rate of 10%
Watsonville 10% 2.5% $20/sf Manufacturing rate selected within 2-5% range
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Attachment 2
Commercial Cannabis Tax Structure
Revenue Estimates
Current ‐‐ 5% Tax and $25/SF Cultivation Tax
2018‐19 2021‐22
# Type Gross Receipts Tax Amount # Type Gross Receipts Tax Amount
4 Retailer $1,000,000 $200,000 4 Retailer $1,700,000 $340,000
6 Manufacturing $2,000,000 $600,000 10 Manufacturing $2,600,000 $1,300,000
‐ Cultivation ‐ ‐ 2 Cultivation $2,500,000 $350,000
TOTAL $800,000 TOTAL $1,990,000
Option 1 ‐‐ 5% Tax and $5/SF Cultivation Tax
2018‐19 2021‐22
# Type Gross Receipts Tax Amount # Type Gross Receipts Tax Amount
4 Retailer $1,000,000 $200,000 4 Retailer $1,700,000 $340,000
6 Manufacturing $2,000,000 $600,000 10 Manufacturing $2,600,000 $1,300,000
‐ Cultivation ‐ ‐ 2 Cultivation $2,500,000 $100,000
TOTAL $800,000 TOTAL $1,740,000
Option 2 ‐‐ % Tax Retailer, % Manufacturer/Di stributor, and $5/SF Cultivation Tax
2018‐19 2021‐22
# Type Gross Receipts Tax Amount # Type Gross Receipts Tax Amount
4 Retailer $1,000,000 $200,000 4 Retailer $1,700,000 $340,000
6 Manufacturing $2,000,000 $360,000 10 Manufacturing $2,600,000 $780,000
‐ Cultivation ‐ ‐ 2 Cultivation $2,500,000 $100,000
TOTAL $560,000 TOTAL $1,220,000
Option 3 ‐‐ % Tax Retailer, % Manufacturer/Di stributor, and $5/SF Cultivation Tax
2018‐19 2021‐22
# Type Gross Receipts Tax Amount # Type Gross Receipts Tax Amount
4 Retailer $1,000,000 $200,000 4 Retailer $1,700,000 $340,000
6 Manufacturing $2,000,000 $240,000 10 Manufacturing $2,600,000 $520,000
‐ Cultivation ‐ ‐ 2 Cultivation $2,500,000 $100,000
TOTAL $440,000 TOTAL $960,000
Option 4 ‐‐ 4% Tax and $5/SF Cultivation Tax
2018‐19 2021‐22
# Type Gross Receipts Tax Amount # Type Gross Receipts Tax Amount
4 Retailer $1,000,000 $160,000 4 Retailer $1,700,000 $272,000
5 3
5 2
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6 Manufacturing $2,000,000 $480,000 10 Manufacturing $2,600,000 $1,040,000
‐ Cultivation ‐ ‐ 2 Cultivation $2,500,000 $100,000
TOTAL $640,000 TOTAL $1,412,000
Option 5 ‐‐ 4% Tax Retailer, 3% Manufacturer/Distributor, and $5/SF Cultivation Tax
2018‐19 2021‐22
# Type Gross Receipts Tax Amount # Type Gross Receipts Tax Amount
4 Retailer $1,000,000 $160,000 4 Retailer $1,700,000 $272,000
6 Manufacturing $2,000,000 $360,000 10 Manufacturing $2,600,000 $780,000
‐ Cultivation ‐ ‐ 2 Cultivation $2,500,000 $100,000
TOTAL $520,000 TOTAL $1,152,000
Option 6 ‐‐ 4% Tax Retailer, 2% Manufacturer/Distributor, and $5/SF Cultivation Tax
2018‐19 2021‐22
# Type Gross Receipts Tax Amount # Type Gross Receipts Tax Amount
4 Retailer $1,000,000 $160,000 4 Retailer $1,700,000 $272,000
6 Manufacturing $2,000,000 $240,000 10 Manufacturing $2,600,000 $520,000
‐ Cultivation ‐ ‐ 2 Cultivation $2,500,000 $100,000
TOTAL
$400,000 TOTAL
$892,000
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Attachment 5: Los Angeles Times Article
https://www.latimes.com/california/story/2019-08-14/californias-biggest-legal-marijuana-market
--------- Page 1-----------------------
California now has the biggest legal marijuana market in the world. Its black market is even bigger
A new study predicts record legal cannabis sales in California this year. (Genaro Molina / Los Angeles Times)
By PATRICK MCGREEVY | STAFF WRITER
AUG. 15, 2019 | 5 AM
SACRAMENTO — California is on track to post a record $3.1 billion in licensed cannabis sales this year, solidifying its status as the
largest legal marijuana market in the world, according to a study released Thursday by financial analysts who advise the industry.
Legal sales are up significantly from an approximate $2.5 billion in 2018, the first year of licensed cannabis sales in California,
according to the analysis by sales-tracking firms Arcview Market Research and BDS Analytics. After a rocky start in 2018, retailers
that have survived California’s tough licensing, testing and packaging regulations are “battle hardened” and stronger because of
an influx of investment that has allowed them to take advantage of the state’s large population and pent-up demand for legal
products, said Tom Adams, managing director and principal analyst for BDS Analytics.
“Any market in the world would be ecstatic about a 23% growth rate,” Adams said. “That is fabulous for any industry to have that
kind of growth.’’
But California’s black market for marijuana continues to flourish as high taxes and a refusal by most cities to allow licensed shops
makes it cheaper and easier for people to buy from illicit dealers, he said. An estimated $8.7 billion is expected to be spent in the
illegal cannabis market in 2019 — more than double the amount of legal sales.
The size of the black market continues to trouble many supporters of Proposition 64, the statewide initiative approved by voters
in 2016 that legalized growing and selling cannabis for recreational use.
“The illegal market is competitive because legal marijuana is so expensive to produce under Prop. 64,” said Dale Gieringer,
director of Cal NORML, which supported the initiative though it preferred other regulations.
Assemblyman Rob Bonta (D-Alameda) tried unsuccessfully this year to win legislative approval to temporarily reduce cannabis
taxes.
“It’s abundantly clear that the illicit market is still undercutting the licensed and regulated market,” Bonta said. “The much lower
than projected statewide cannabis tax revenue indicates that significant numbers of cannabis businesses remain in the illicit
market not paying their taxes, rather than migrating to the regulated market.”
California cannabis markets
2019 spending
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Legal market: $3.1 billion
Illicit market: $8.7 billion
2024 projection
Legal market: $$7.2 billion
Illicit market: $6.4 billion
Tamar Todd, an attorney who lectures on cannabis law at UC Davis and UC Berkeley and is vice chairwoman of a state advisory
panel on marijuana, said the growth of the legal market and the continued existence of a large illicit market is not a surprise.
More than 20 years after California became the first state to legalize the sale of medical marijuana, it will take years more to
move many longtime growers and sellers into a complicated licensing system, she said. “I personally take a really long view of the
transition toward legalization, especially in California that had a really large illicit and quasi-legal market under medical
[marijuana law] for 20 years that operated without state oversight and state enforcement,” Todd said.
California remains easily the biggest government-sanctioned market in the nation, topping the $1.6 billion in legal sales projected
this year for Colorado, which legalized cannabis in 2014. Legal pot sellers here are expected to sell nearly triple the $1.1 billion in
legal cannabis that will be sold this year in Canada, which began allowing pot shops in Adams said California’s legal market this
year is also larger than those in Germany, which he projected to reach $240 million this year, and the Netherlands, which he
expects will have smaller sales.
The first year of licensed cannabis sales in California saw spending drop from $3 billion to $2.5 billion because many medical
marijuana shops closed once licensing began or kept operating outside the legal market. There are currently 583 licensed pot
shops in California and 263 licensed home-delivery firms.
The climb back this year is happening “despite these huge levels of taxation and regulatory woes that we think add 77% to the
cost of a gram in the legal market versus what it costs on the open market,” Adams said. Jerred Kiloh’s Sherman Oaks store, the
Higher Path, has seen sales hold steady after spiking in the first months after legalization. He said many licensed stores in the San
Fernando Valley have seen an uptick in sales because of the city’s enforcement against illegal operators in the area.
But he is skeptical of the $3.1-billion projection because many other pot shops have seen sales declines in the last year as they
struggle with a competitive disadvantage against the illegal market. “If you look at Los Angeles, it’s 10 to 1 when it comes to
illegal operators versus legal ones,” said Kiloh, who is president of the United Cannabis Business Assn.
Contributing to the size of the illicit market, industry officials say, some 76% of cities and 69% of counties have banned cannabis
stores. Proposition 64 gave local governments the power to prohibit legal marijuana sales in their jurisdictions.
The local control provision of the initiative “requires by design that there is going to be a very long transition period because it’s
saying there are communities in California that are going to wait and see and are going to opt to keep an illicit market,” Todd
said.
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As more states allow cannabis and the federal government changes laws, more cities may decide that it is better to license pot
shops than have home deliveries they can’t control come from outside their jurisdictions.
If federal and state law change to allow California cannabis to be legally exported out of the state, that also could reduce the
illicit market, Todd said.
The release of the report coincides with the return of the California Legislature for its last two months of work for 2019, and is
likely to add urgency to the debate on a cluster of bills aimed at bolstering the legal market and reducing illegal sales.
Lawmakers have shelved a measure that would have cut the state excise tax on cannabis sales from 15% to 11% for three years,
but bills still under consideration would fine websites that advertise unlicensed pot dealers and create a state-sanctioned bank
for use by cannabis firms.
Assemblyman Phil Ting (D-San Francisco) was unable to get the votes needed for a bill that would have required cities to allow
pot shops if their voters supported Proposition 64. But he noted enforcement is stepping up.
“California’s cities and counties need our support to go after the illicit cannabis market,” Ting said. “At the same time, local
governments need to do their part and help bring legal cannabis businesses to light, so they can thrive and pay taxes that help
fund public services.”
Without changes to make it easier for illegal pot sellers to get licenses and compete, the illicit market will continue to be a
significant part of cannabis sales in California, according to the report released Thursday.
Adams’ Colorado-based firm projects legal cannabis sales in California will grow to $7.2 billion in 2024, but illegal sales will still be
$6.4 billion that year. More cities are expected to allow pot shops, and state efforts to get illegal operators licensed, in part
through tougher enforcement, will help with the shift, officials say.
“Unless the state acts to lower the taxes and lower the regulatory load, they are making the illicit market participants happy
campers by keeping them in business,” Adams said.
Patrick McGreevy is a reporter covering California state government and politics in the Sacramento Bureau. He previously
worked in the Los Angeles City Hall Bureau for The Times. He is a native of San Diego and a graduate of San Jose State University.
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Atascadero City Council
Staff Report – Public Works Department
CDBG Traffic Way Sidewalk Accessibility and
Pedestrian Ramp Project Construction Award
RECOMMENDATIONS:
Council:
1. Reject the bid protest of JJ Fisher Construction, Inc. and award the contract for the
construction of the CDBG Traffic Way Sidewalk Accessibility and Pedestrian Ramp
Project to G. Sosa Construction, Inc.
2. Authorize the City Manager to execute a contract with G. Sosa Construction, Inc. for
$286,385 to construct the CDBG Traffic Way Sidewalk Accessibility and Pedestrian
Ramp Project.
DISCUSSION:
Background
A portion of the City’s Community Development Block Grant (CDBG) must be used for
public facility projects. The City is eligible to apply for these funds, and has trad itionally
used these funds for design and construction of sidewalk and pedestrian improvements
to remove barriers related to the Americans with Disabilities Act (ADA). Generally,
these projects are smaller in nature ($100,000-$150,000) and address non-compliant
pedestrian ramps and sidewalks, as well as pedestrian connectivity issues by
constructing “missing links” between sidewalks and other upgrades to the existing
infrastructure to provide greater accessibility.
The CDBG Traffic Way Sidewalk Accessibility and Pedestrian Ramp Project was
awarded a $100,612 grant during the 2017 funding cycle, with a second $198,449 grant
award during the 2018 funding cycle. Additional funding in the amount of $87,235 was
reallocated to this project for a total of $386,296.
The City prioritized this project to remove pedestrian barriers along Traffic Way and at
the intersection with El Camino Real. The current sidewalk, adjacent to the property at
the northwest corner of the intersection (5970 El Camino Real), was constructed long
before current accessibility requirements when the property was developed as a
refueling and service station. Subsequently, a full frontage driveway approach was
constructed that doubled as a sidewalk and it does not meet the cross-slope
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requirements of ADA between El Camino Real and the 101 undercrossing.
Furthermore, the pedestrian ramp at the northwest corner of Traffic Way and El Camino
Real is substandard. This project will address these deficiencies.
The project will reconstruct approximately 220 lineal feet of 10-foot wide concrete
sidewalk along the north side of Traffic Way, 140 lineal feet of 8-foot wide concrete
sidewalk along the south side of Traffic Way, two pedestrian ramps at the corners,
concrete curb and gutter, driveway approaches, storm drain improvements, fire hydrant
relocation, and pavement replacement of the outside lanes in both directions.
Additionally, Traffic Way will be widened by two feet to add a lane to provide three
eastbound lanes (left, through, right). Narrowing of all four lanes will be needed to
accommodate the added lane, but the proposed widths still meet minimum City and
California Manual on Uniform Traffic Control Devices (CA-MUTCD) standards. This
lane reconfiguration was identified as an important mitigation measure for improving
traffic flow in the traffic analysis for the Downtown El Camino Real Infrastructure
Enhancement Project.
The project schedule was delayed due to on -going discussions and negotiations for
permanent and temporary construction easements with the property and business
owners on the northwest corner of Traffic Way/El Camino Real (5970 ECR). A
permanent easement was needed to accommodate construction of an ADA-compliant
pedestrian ramp on that corner, while temporary construction easements were needed
for encroachments to the property to construct the new sidewalk. Much of the
discussion focused on vehicle access to the property, which currently has unfettered
access due to existing driveway approach ramps across the full frontage of the property
(Traffic Way and ECR). The current business (Pflum’s Atascadero Muffler and Auto
Sales) situates vehicles for sale on the perimeter of the property and has no internal
circulation, requiring direct access to Traffic Way and El Camino Real on an infrequent
basis. A combined driveway approach for public alleyway and auto repair structure (on
the westerly side) will be constructed on Traffic Way, while a standard vertical curb will
be constructed on the El Camino Real frontage of the pro perty. A mountable concrete
curb will be constructed between the combined driveway approach and the pedestrian
ramp on the northwest corner to allow the occasional need to access the property. In
addition, concrete sidewalk will be thicker in these locations to accommodate vehicle
loads. The City has secured needed easements at no direct cost.
Discussions were also held with the property owner on the south side of Traffic Way
(6040/6090 El Camino Real) regarding access onto Traffic Way from those properties.
The original design was modified to accommodate requested access improvements,
including a rolled curb for delivery access to Colony Deli, and a right out only egress
from the 6090 El Camino Real parcel.
Bid Analysis
The project was advertised for a minimum of 30 days, from October 9, 2020 through
November 12, 2020. Six bids were received ranging from $236,930 to $319,380 with
the low bid submitted by R. Burke Corporation, with the next lowest bid of $286,385
submitted by G. Sosa Construction, Inc. The bids were reviewed for accuracy and
compliance with the City of Atascadero and Federal bidding requirements, and the City
Engineer determined that R. Burke Corporation was the lowest responsive bidder.
Page 95 of 103
ITEM NUMBER: C-3
DATE: 11/24/20
However, R. Burke Corporation notified the City on November 16, 2020 that their bid
contained a substantial clerical error related to traffic control working days and
requested their bid to be withdrawn. The City Engineer agreed that the error was
material and finds that G. Sosa Construction, Inc. of Santa Maria to be the next lowest
responsible bidder. G. Sosa Construction’s bid of $286,385 is very competitive and
roughly $18,000 less than the next lowest bid amount.
The City Clerk received a written bid protest from the third lowest bidder, JJ Fisher
Construction, Inc., on November 17, 2020 (see attachments). The bid protest alleges that
bids received from R. Burke Corporation and G. Soso Construction, Inc. are not
responsive to Technical Specification Section 10-2, Mobilization. Mobilization is an
itemized pay item on the bid form and Section 10-2.1 list activities that are to be included
with the Mobilization bid item, such as obtaining bonds, moving equipment onto the
project site, etc. JJ Fisher Construction alleges that the two low bidders did not include
costs associated with one of the mobilization activities listed in Section 10-2.1 as follows:
“Designation of the Contractor’s superintendent who will be present at the job site full
time”. JJ Fisher Construction’s bid protest alleges that the mobilization price of the two
low bidders could not possibly cover the costs of a superintendent for the project. JJ
Fisher Construction’s bid included $61,176 for mobilization, while R. Burke Corporation
and G. Sosa Construction bids included $13,000 and $20,400, respectively, for this item.
Staff reviewed the bid protest of JJ Fisher Construction and finds that the protest has no
merit (see attached response letter). In the bid protest, JJ Fisher Construction
incorrectly interprets “Designation of the Contractor’s superintendent who will be
present at the job site full time” to include the cost of providing a superintendent for the
project. Mobilization is widely known to be associated with preconstruction activities as
evidenced by the other listed activities in Section 10-2.1, such as identifying key
personnel who will be representing the contractor. The words “designation” and “who
will be” in the said clause also support this notion of preconstruction. Furthermore, JJ
Fisher Construction’s mobilization price of $61,176 was roughly 2 to 4 times higher than
the bid prices of the other five bidders ($13,000, $20,000, $20,400, $31,000, and
$33,000), further supporting that the bidding documents were clear and this
interpretation was a mistake made by JJ Fisher Construction. For these reasons and
others stated in the City Engineer’s response letter, staff recommends rejecting the bid
protest of JJ Fisher Construction.
Environmental Review
The proposed project is Categorically Exempt (Class 1) from the provisions 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.) pursuant to CEQA Guidelines Section 15301, because it is limited to
repair and maintenance of existing facilities. A finding of exemption is on file in the
project records.
Since the project is federally funded, a review under the National Environmental Policy
Act (NEPA) is also required. As the funding recipient agency, the County of San Luis
Obispo completes the NEPA analysis. This project was found to be Categorically
Excluded per 24 CFR 58.35(a). This finding of exemption is on file with the project
records, and associated mitigation requirements are included in the project bid
documents.
Page 96 of 103
ITEM NUMBER: C-3
DATE: 11/24/20
Conclusion
Staff recommends that the City Council reject the bid protest from JJ Fisher
Construction for the reasons stated above and award a contract for the construction of
the CDBG Traffic Way Sidewalk Accessibility and Pedestrian Ramp Project to G. Sosa
Construction for $286,385. In an environment where construction costs have been
consistently escalated and available bidders scarce, this bid environment for this project
was very competitive provides good value for the City.
If awarded, construction is expected to begin before the end of this year and continue
during winter as weather permits. Significant inconveniences to vehicular and
pedestrian traffic along the roadway segments are an ticipated during construction. The
Contractor will be required to prepare a traffic control plan, and City staff will work with
the Contractor and adjacent business owners to minimize travel delays and
impediments to driveways.
FISCAL IMPACT:
Award of this contract for the construction of the Traffic Way Sidewalk Accessibility and
Pedestrian Ramp Project will result in the expenditure of an estimated $386,300 in
budgeted CDBG funds.
ESTIMATED EXPENDITURES
Design and Bid Phase 15,000
Construction 286,385
Staff / Inspection / Testing / Construction Administration @
12.5%
36,000
Contingency @ 17% 48,911
Total Estimated Expenditure: $386,296
BUDGETED FUNDING
2017CDBG Allocation 100,612
2018 CDBG Allocation 198,449
CDBG Reallocation 87,235
Total Funding: $386,296
ALTERNATIVES:
Staff does not recommend any other alternatives.
ATTACHMENTS:
1. Bid Summary
2. JJ Fisher Construction Bid Protest
3. City Response Letter to JJ Fisher Construction Bid Protest
Page 97 of 103
TO:
FROM:
BID NO.:
OPENED:
PROJECT:
6
Name of Bidder Bid Total
$236,930.00
$286,385.00
$304,276.20
$307,216.50
$314,879.00
$319,380.00
City of Atascadero
Office of the City Clerk
Bid Summary
Public Works
Amanda Muther, Deputy City Clerk
2020-005
11/12/2020
CDBG Barrier Removal/Traffic Way Sidewalk Accessibility & Pedestrian Ramp
Replacement
Bids were received and opened today, as follows:
R. Burke Corporation
G. Sosa Construction, Inc.
JJ Fisher Construction, Inc.
CalPortland Construction
Papich Construction Co., Inc.
AAAA Engineering Contracting, Inc.
ITEM NUMBER C-3
DATE: 11/24/20
ATTACHMENT: 1
Page 98 of 103
1
Lara Christensen
From:Kevin Dodd <kevin@jjfisherconstruction.com>
Sent:Tuesday, November 17, 2020 4:16 PM
To:City Clerk
Cc:JJ Fisher
Subject:CDBG Barrier Removal/Traffic Way Sidewalk Bid Protest
Attachments:ATASCADERO BID PROTEST.jpg; ATASCDERO BID PROTEST2.jpg
Lara,
JJ Fisher Construction would like to submit a bid protest for this project. The reason for this protest is the apparent non
responsive inclusion of an item requested in the special provisions 10-2.01
10-2.01
“Designation of the contractors superintendent who will be present at the job site full time”
After reviewing the bid items of bidders 1 & 2 it doesn’t seem possible that costs were factored in for this item due to
the bid total of line item #1. Attached is the special provision from the bid set and a copy of my bid software for that line
item. Since this project is federally funded, the cost for the superintendent should be the same for everyone involved in
this bid. Bidder 1 & 2 final bid number does not even come close to this cost and when you figure bond and insurance in
there also I don’t see how they could have factored this required specification into their bid.
Thank you for your time,
Kevin Dodd
Superintendent
JJ Fisher Construction, Inc.
Lic.# 939644
PO Box 2219
Nipomo, Ca. 93444
Office: (805)723-5220
Cell: (805)801-1417
ATTENTION:
This email originated from outside the City's network. Use caution when opening links and attachments.
ITEM NUMBER C-3
DATE: 11/24/20
ATTACHMENT: 2
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ITEM NUMBER C-3
DATE: 11/24/20
ATTACHMENT: 2
Page 100 of 103
ITEM NUMBER C-3
DATE: 11/24/20
ATTACHMENT: 2
Page 101 of 103
CITY OF ATASCADERO
PUBLIC WORKS DEPARTMENT
6500 Palma Avenue, Atascadero CA 93422
(805) 470-3456 | publicworks@atascadero.org
November 18, 2020
VIA EMAIL
Kevin Dodd, Superintendent
JJ Fisher Construction, Inc.
P.O. Box 2219
Nipomo, CA 93444
RE: BID PROTEST FOR CDBG TRAFFIC WAY SIDEWALK ACCESSIBILITY AND PEDESTRIAN
RAMP PROJECT | CITY PROJ. NO. C2016M05
Dear Mr. Dodd:
We have received and reviewed your bid protest dated November 17, 2020 for the above reference
project. In your protest, you allege that the two lowest bidders, R. Burke Corporation and G. Sosa
Construction Inc., were non-responsive in their bids to include costs associated with superintendence as
defined in Section 10-2.01 of Technical Specification 10-2 (Mobilization). Section 10-2.01 list the various
activities that Mobilization is comprised of, such as obtaining bonds and permits, moving equipment to
the project site, and installing temporary facilities. Specifically, your protest is focused on the
mobilization activity of “Designation of the Contractor’s superintendent who will be present at the job
site full time“ as itemized in Section 10-2.01. You claim that the line item bid price for Mobilization on
the two lowest bid proposals could not have possibly accounted for the cost of a superintendent for the
project.
We have reviewed your bid protest and have concluded that JJ Fisher Construction misinterpreted the
above “Designation of the Contractor’s superintendent” clause of Section 10-2.01. Mobilization is an
industry standard and conventionally known to be related to preconstruction activities as evidenced by
the items listed in Section 10-2.01. Introducing and identifying personnel who will be representing the
contractor is also an item that occurs before construction commences. The words “designation” and
“who will be” in the said clause also support this notion of preceding construction. Section 7-2.7,
(Superintendence) of the bidding documents supports this concept, stating “Contractor designate in
writing before starting work an authorized representative who shall have the authority to represent and act for
Contractor”. Furthermore, JJ Fisher Construction’s mobilization price of $61,176 was roughly 2 to 4 times
higher than the bid prices of the other five bidders ($13,000, $20,000, $20,400, $31,000, and $33,000),
further supporting that the bidding documents were clear and this interpretation was a mistake made by
JJ Fisher Construction.
For the above reasons, we will recommend that the City Council reject your bid protest without merit
and recommend awarding the project to the lowest responsible bidder.
ITEM NUMBER C-3
DATE: 11/24/20
ATTACHMENT: 3
Page 102 of 103
Bid Protest for CDBG Traffic Way Sidewalk Accessibility Project
Page 2
Please contact me at 805-470-3456 or ndebar@atascadero.org if you should have any questions regarding
this matter. You will also have an opportunity to address the City Council when they consider awarding
this project and may present any evidence rebutting our recommendation. The City Clerk will provide
you with the needed information if you choose to participate at the City Council meeting.
Sincerely,
Nicholas D. DeBar, PE
Director of Public Works/City Engineer
xc: Lara Christensen, City Clerk
Greg Soso, G. Sosa Construction, Inc.
ITEM NUMBER C-3
DATE: 11/24/20
ATTACHMENT: 3
Page 103 of 103