City staff seeks more input for developing marijuana ordinance

Martinez City Hall

MARTINEZ, Calif. ­­– Martinez employees will ask the Martinez City Council today for additional guidance as they craft a proposed marijuana ordinance to regulate commercial and other operations.

Three staff members – Community and Economic Development Director Christina Ratcliffe, Chief of Police Manjit Sappal and Contract Planner Brian Millar – wrote a report that described citizens’ concerns aired in recent workshops.

They also listed other areas that could be discussed tonight: The types of cannabis license Martinz would consider allowing, what areas should be considered for cannabis operations, how the operations should be considered and processed and potential fiscal impacts of commercial cannabis operations.

These regulations wouldn’t affect private growth of up to six plants for individual medicinal or personal adult use. That was provided with voters’ passage of Proposition 64.

Staff will ask the Council to confirm whether it agrees with the recommendations and to clarify areas where the panel and its employees differ.

The three wrote that during April workshops, some residents worried about public safety and crime, which places should be considered for cannabis operations and what types of operations should be considered for approval.

“A universal concern for all licenses is the all-cash nature of the businesses and the increased potential for robberies and related cash-handling procedures, security and availability to banking,” the three wrote in the report.

“Staff believes that most of these concerns can be addressed through the permitting and monitoring process,” they wrote.

Another area of concern is the need for a clear definition of “youth center’ under the state code.

That point was raised and became the center point of discussion during a series of Planning Commission hearings on the application by Firefly for a local medicinal marijuana dispensary next to a local gym that caters in part to youth. City employees have recommended a specific definition of the term.

The report said city staff has suggested that marijuana operations might be compatible where non-cannabis retail, commercial, laboratories and industrial uses are allowed, and could be allowed there without a use permit.

However, commercial cannabis operations would require a Cannabis Operating Permit which should be described in detail by ordinance. Staff also said those permits should include measures to address potential negative impacts of the operations.

City staff has recommended two types of retail licenses, covering adult use and medicinal marijuana.

“Based on the current demand for retailer locations (dispensaries), cannabis retail locations can generate substantial revenues compared to other retail establishments within jurisdictions,” they wrote, adding a recommendation that up to two of the uses be allowed in commercial and light industry zones.

However, city staff is not recommending initial approval of cultivation licenses, basing this on the intensity of electricity and water use in growing marijuana commercially. “In addition, there is an expected high failure rate with these operations due to an excess capacity,” they wrote.

On the other hand, the city might consider indoor cultivation licenses for “small cottage” operations fof up to 500 square feet and specialty operations up to 5,000 square feet, the report said.

Saying they believe the Council supports marijuana manufacturing, the three wrote that city staff recommends one such use in the light, heavy and controlled industry zones.

One distribution warehouse in the light, heavy and controlled industry zones also has been recommended, they wrote.

Microbusiness licensing is allowed by the state, conditional upon local agency concurrence, and is the newest and most complex license, they wrote. It combines cultivation of less than 10,000 square feet of canopy space, manufacture and retail sales of marijuana, and is an option for a small business owner who wants to enter the cannabis market.

They’re also considered having a higher risk of failure and of becoming a compliance liability. But because the category was created to help address social equity concerns, the staff report said employees suggested the Council consider allow marijuana microbusinesses.

One testing laboratory could be allowed in the research and development, light, heavy and controlled industrial zones, staff recommended.

California may modify its laws governing cannabis delivery that could remove local oversight, and restricting deliveries is a challenge to enforce, the report said. Staff has recommended allowing two delivery businesses citywide.

The report recommended the Council acknowledge how neighboring cities are acting to address commercial marijuana operations. El Cerrito allows two operating permits for retail cannabis businesses and for deliveries, but bans cultivation, manufacturing and testing, the trio wrote.

Martinez’s staff has recommended that those applying for cannabis business licenses request a cannabis operating land permit, which would be reviewed by the Planning Commission during a public hearing. The Commission would recommend whether the Council should approve or deny the application.

A development agreement for each proposed cannabis operation also would be required. This would address tax revenue generation until residents vote on a measure for taxing cannabis operations. Both the permit and the development agreement, along with state licenses, should be subject to annual review, the report said.

To assure compliance with city and state regulations, the city likely would need a professional inspection and audit firm, the trio wrote.

Along with additional police services and staff processing, this cost would be picked up by applicants. Regulatory costs would be considered in the development agreement, they wrote.

Revenues for such operations could range from $162,000 to $258,000, depending whether 2.5 percent or 4 percent of gross sales go to the city.

Given the nature of the state law, staff is recommending the city’s marijuana ordinance be reviewed a year after adoption.

In other matters under consideration tonight, the Council will consider awarding a $2,436,630 contract for the 2018-19 Measure D to American Paving Systems of Modesto and transferring $1,025,000 from Measure D unallocated reserves to Account C1062 to help underwrite the projects.

Greg Jacobs Engineers would be contracted for up to $155,000 for resident engineering and construction management services, if the Council approves.

Money for the paving will come from the half-cent sales tax Measure D adopted by voters Nov. 8, 2016. Since that vote, revenues have been accumulating until they reached a level that could be used for the expensive work that is expected to improve the quality of the city’s local streets and roads.

The Council also will consider a resolution opposing the repeal of SB1, the fuel tax increase and hike in car registration and other fees that have been generating additional money for road and highway repairs.

The Council also will hear a Public Works Department work plan that should improve its operations.

A look at the department was instigated after Councilmember Debbie McKillop described citizens’ concerns about recent water main breaks.

City Manager Brad Kilger and Assistant City Manager Anne Cardwell, in their joint report, noted the recent water main breaks that appear to be increasing especially in summer, and they seem to be in greater magnitude.

This could be caused by the distribution system’s age, not just the city’s land which tends to expand and contract, the report said.

At the same time, staff developed a study of the citywide organization, and including that of the Public Works Department, along with recommendations for improvements overall. Some of those recommendations apply to Public Works and are designed to make the department operate more efficiently so it can address d safety of the city’s water supply and its distribution..

The Council will review the Public Works work plan tonight.

In addition, the Council will hear the city’s response to a grand jury report regarding joint power authorities (JPAs.) Martinez is one of 19 Contra Costa County cities to receive the report about transparency and accountability of JPAs. The county’s auditor-controller and the Local Agency Formation Commission (LAFCo) also received the report.

Since neither the state nor Contra Costa County could provide a list of all JPAs operating in the county, the cities were asked for the information. Martinez is a member of four JPAs, the grand jury said.

The grand jury said JPAs are formed when two or more public agencies agree on creating a function or service that would benefit all of the agreement’s members. JPAs are established by governing bodies, not voters. They’re sometimes confused with special districts, another type of legal entity.

No state or county agency directly oversees a JPA operation or use, the grand jury report said, although updates must be sent to the Secretary of State, State Controller, the California Debt and Investment Commission and LAFCo.

In the city’s response to the grand jury’s report, Kilger wrote that Martinez is a member of the Transportation/Land Use Partnership and Cooperation Joint Powers Authority (TRANSPAC) along with Clayton, Concord, Pleasant Hill, Walnut Creek and Contra Costa County.

It joined that JPA in 1990 to respond to requirements of Measure C local transportation funding. The JPA agreement was updated in 2014.

Martinez is one of 20 members of the Municipal Pooling Authority of Northern California, which it joined in 1977. It was updated in 2005. This JPA was formed as a risk pooling organization to respond to a lack of willingness of the private insurance markets to insure governmental agencies especially when they needed to self -insure costs of tort liability, worker’s compensation, property and other risks.

It joined the Pleasant Hill/Martinez Joint Facilities Agency in 1975, but that agreement, to develop and operate shared facilities, dissolved and the city has been addressing employee costs since then.

Along with multiple cities in Alameda and Contra Costa counties, several special districts, the California Department of Transportation and the University of California, Berkeley, the city is part of the East Bay Regional Communications System Authority (EBRCSA). That JPA was formed to improve emergency communication among the members, and is based out of the Homeland Security Office in Dublin.

In responding to the grand jury report, Kilger wrote that Martinez agreed with the finding that JPAs delegate to JPAs functions each member has authority to provide in expectation of cost savings and better efficiency.

However, Martinez disagrees with the grand jury’s recommendation that cities should confirm their compliance with government codes by submitting required audits to the county auditor by Dec. 31, 2018. Kilger wrote that since JPAs are separate legal public entities with their own responsibility for compliance, the city doesn’t have resources to monitor each JPA’s compliance.

For the same reason, neither would the city implement the recommendation that cities with JPAs should use special mailings, website postings and media announcements to tell taxpayers about JPA debt decisions and audit report, he wrote.

Staff will ask the Council to approve resolutions for paying and reporting the value of employer paid member contributions for classic sworn and miscellaneous employees as a result of the city’s negotiated agreement with the California Public Employees Retirement System (CalPERS).

Martinez contracts with CalPERS for the employer paid member contributions (EPMC) benefit of paying employees’ normal member contributions under agreements with its bargaining groups or as outlined in the Management Compensation Plan document.

As part of the acknowledged dissolution of the Martinez-Pleasant Hill JFA and after the discovery the EPMC was not on file, staff will ask the Council tonight to clean up and complete those records with Martinez Police Officers’ Association, Laborers’ International Local 324, Management Compensation Plan and Martinez Non-Sworn Employees’ Association.

The Council will meet at 7 p.m. today in Martinez City Hall, 525 Henrietta St.

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