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HomeMy WebLinkAbout01-19-2021 City Council PresentationsCity Council Regular Meeting January 19, 2021 •All attendees enter the meeting muted. •You can rename yourself by following the steps below. •When Public Comment is called for an item you would like to speak on,please raise your virtual hand. •When your name is called,you will be moved to a Panelist.After a brief moment,you will be able to unmute your mic and turn on your video. •Please state your name and address (optional)for the record. •After providing your comments you will be moved back to an attendee. Directions for Public Comment _______________________________________________________ Recommendation: City Manager /Emergency Services Director Derek Johnson will provide COVID-19 updates. Item 1 CITY MANAGER REPORT / EMERGENCY SERVICES DIRECTOR COVID-19 UPDATE PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA •If you would like to speak on Items Not On The Agenda,please raise your virtual hand. •When your name is called,you will be moved to a panelist. •Before you begin speaking unmute your mic and turn on your video. Please state your name and address (optional)for the record. •After you complete your comments you will be moved back to an attendee. Public Comment Items #2 –#8 CONSENT AGENDA Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon at one time.A member of the public may request the Council to pull an item for discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of the Council chooses another time.The public may comment on any and all items on the Consent Agenda within the three-minute time limit. Cannabis Business Program Regulations Update January 19, 2021 Recommendation 1.Receive an update on the City’s Cannabis Business Program;and 2.Adopt a resolution that updates the Cannabis Fee Schedule;and 3.Introduce and adopt an ordinance amending Municipal Codes Section 9.10 and 5.10 that renews all operator permits at the beginning of the fiscal year;and 4.Adopt a resolution that waives the operator permit renewal fee for a cannabis business being annexed into the City of San Luis Obispo from the date of annexation to July 1,2021. 6 Background November 8, 2016:Proposition 64 approved allowing recreational cannabis use in CA May 1, 2018: City Council adopts an ordinance to create land use regulations allowing personal cultivation and commercial cannabis businesses to operate in the City May 15, 2018: City Council considers a proposed ballot measure for the November 2018 election to establish a Cannabis Business Tax if approved by voters October 16, 2018: City Council met to discuss cannabis business operator application requirements and evaluation criteria for ranking operators and provided staff with a list of directional items to incorporate into revised criteria November 6, 2018: Residents voted to authorize the Cannabis Business Tax Measure (Measure F -18), putting Ordinance 1647 in effect. November 27, 2018: City Council adopted the resolution approving the fee schedule and evaluation criteria for the Cannabis Business Operator Permits December 3, 2019: City Council received the first annual cannabis program update and adopted modifications to the application fees, and adopted an ordinance to modify Municipal Code 9.10 7 Program Update 8 Business Business Status Retail Storefront Megan’s Organic Market Open and operating in the City. Natural Healing Center Received a Commercial Cannabis Operator Permit on October 22, 2019. Received a Conditional Use Permit on November 13, 2019 The businesses operator permit requires the business be open by April 2021. SLO Cal Roots Received a Commercial Cannabis Operator Permit on March 23, 2020 and is now completing the land use permit process. Manufacturing, Distribution and Retail (Non-Storefront) Coastal Delivery SLO Open and operating in the City. Element 7 Received a Commercial Cannabis Operator Permit on December 6, 2019. Received a Conditional Use Permit on August 24, 2020. The businesses operator permit requires the business be open by June 2021. Cali Direct Received a Contingent Commercial Cannabis Operator Permit on May 19, 2020 and is currently completing the background check process. Pure SL Received a Contingent Commercial Cannabis Operator Permit on November 2, 2020 and is currently completing the background check process. Business Locations within the City 9 Mobile Deliveries from Outside of the City 10 Since the start of this program the City has registered 11 of these businesses •The City has received over $100,000 in cannabis taxes from these businesses •Reported uncompliant to the BCC •Enforcement through SLOPD and Administrative Actions •Licensing of out of area operators continues Annexation of Papa Bear Farms 11 •Approved through the Fiero Lane and Clarion Court Annexation •The business is eligible to continue operations in the City •The business expressed significant concerns regarding the operator permit renewal fee •The business structure was based on County operating permit fees Recommendation:Waive the operator permit renewal fee from the date of annexation to July 1, 2021. Operator Permit Fees 12 Business Type Current Fees Proposed Fees Retail $96,074.11 $39,638.38 Manufacturing $76,407.43 $39,638.38 Cultivation $76,629.12 $39,638.38 Other Businesses $69,890.40 $39,638.38 ▪Staff proposes to reimburse operators who have already paid FY 20 -21 the difference of the current fees and the proposed fees. ▪Staff also recommends placing all operator permit on a Fiscal Year Renewal Cycle,starting July 1st and ending June 30th of each year. Costs Included in Fees 13 •Providing Business Support •Compliance Monitoring •Quarterly inspections •Unscheduled inspections •Monthly Sales Tax Monitoring •Annual Financial Audits •Operator Permit Renewals •Community Benefit Agreement Monitoring •Background Checks •Background Checks for New Employees •Complaint Response •Internal Administrative Support •Program Modifications •State Regulation Monitoring •Non-Qualified Sales Program Fiscal Impact 14 ▪Because staff proposes to reimburse operators the difference, there will be a budget shortfall for Fiscal Year 2020 -21 in the actual fees collected. ▪However, staff is confident that the amounts collected in Cannabis tax will exceed the budgeted $400,000 and eliminate most if not all of the fee shortfall. Funding Sources Current Budgeted Fees Revised Budgeted Fees Change in Budgeted Fees Annual Ongoing Cost General Fund $320,937 $220,402 $100,535 $0 State Federal Fees Other: Total $320,937 $ 220,402 $100,535 $0 Recommendation 1.Receive an update on the City’s Cannabis Business Program;and 2.Adopt a resolution that updates the Cannabis Fee Schedule;and 3.Introduce and adopt an ordinance amending Municipal Codes Section 9.10 and 5.10 that renews all operator permits at the beginning of the fiscal year;and 4.Adopt a resolution that waives the operator permit renewal fee for a cannabis business being annexed into the City of San Luis Obispo from the date of annexation to July 1,2021. 15 Alternative Council Action: Papa Bear Farms 16 Current Recommendation:Waive the operator permit renewal fee from the date of annexation to July 1, 2021. Council can direct staff to: 1.Defer instead of waive fees 2.Extend duration of fee waiver •Extend from 6 months to all of FY 21 -22 3.Come back with a tiered Fee Structure for Retail Storefront and Non-Retail Storefront 4.Do a combination of any of these options 2019-20 Comprehensive Annual Financial Report 17 Recommendation 1 8 Review and accept the Comprehensive Annual Financial Report for Fiscal Year 2019-20. 2019-2 0 A u d i t Annual Audits 1 9 •Annual audits are required by the City’s Charter and State laws •City’s current auditing firm –Badawi & Associates •Purpose is to fairly present the financial condition of the City in accordance with Generally Accepted Accounting Principles •Single Audit Report and Transportation Development Act Fund Report will be issued separately 2019-2 0 A u d i t Audit Highlights 2 0 •Unqualified, Clean Audit •No substantial material findings •Increase in Fund Balance in General Fund, Water Fund and Sewer Fund. Significant impacts in Parking and Transit Funds due to COVID-19. 2019-2 0 A u d i t 21 FY 2019-20 Financial Statements 2 22019-2 0 A u d i t 61%Taxes from revenue sources such as sales, property, transients, and utility users' tax. 21%Fees for services such as Development Review, Park & Recreation programs & Special Assessments. 18%Revenue from grants and investments. Governmental Funds –Revenues $88.1 million FY 2019-20 Financial Statements 2 32019-2 0 A u d i t Governmental Funds –Expenditures $80.6 million Public Safety $30,216,995 Leisure, cultural, social Services $8,416,687 Debt Service $2,598,936 Capital Outlay $10,675,457 Transportation $3,710,943 General Government $14,503,410 Community Development $10,477,062 Total Expenditures: $80.6 million 24 FY 2019-20 Financial Statements CAFR page xiv Nonspendable - Assigned to: Contingency Fund - 20% policy level 10,251,000$ Establishment of Section 115 Trust 1,400,000 Revenue Stabilization 1,000,000 Development Services 899,277 Risk Management 1,498,078 General Government 10,384,119 Public Safety 1,096,215 Unassigned 7,122,607 Total fund balance 33,651,296$ General Fund - Fund Balance June 30, 2020 FY18 FY19 FY20 FY21 FY22 FY23 FY24 $4.2 M $4.2M $3M $3M $2M $2M $2M Paid – April 2019 In Fund Balance In Fund Balance Part of new Fin. Plan Part of new Fin. Plan Part of new forecast Part of new forecast 2019-21 UFL Payments FY 2019-20 Financial Statements 2 52019-2 0 A u d i t Proprietary (Enterprise) Funds –Revenues $54.8 million Water Fund $ 25.7 Million Sewer Fund $19.8 million Parking Fund $3.8 million Transit Fund $3.8 million Service Charges $21,713,030 Impact Fees $3,723,460 Other Revenue $230,287 Non-Operating Revenue $29,465 Service Charges $16,896,990 Impact Fees $2,031,476 Other Revenue $113,918 Non-Operating Revenue $782,163 Service Charges $2,677,438 Fines & Forfeitures $602,409 Other Revenue $14,094 Non-Operating Revenue $546,118 Service Charges $630,067 Other Revenue $3,500 Non -Operating Revenue $3,132,641 FY 2019-20 Financial Statements 2 62019-2 0 A u d i t Proprietary (Enterprise) Funds –Expenditures $46.2 million Water Fund $22.1 million Parking Fund $3.7 million Transit Fund $ 4.1 million Sewer Fund $12.6 million Staffing $4,638,948 Supplies & Maint.$1,252,083 Contract Services $12,002,287 General Gov.$1,592,154 Depreciation $2,640,219 Staffing $4,869,963 Supplies & Maint.$1,752,068 Contract Services $1,390,111 General Gov.$1,711,224 Depreciation $2,899,058 Staffing $1,465,774 Supplies & Maint.$387,749 Contract Services $689,788 General Gov.$537,277 Depreciation $634,365 Staffing $357,718 Supplies & Maint.$282,917 Contract Services $2,630,270 General Gov.$276,806 Depreciation $592,039 FY 2019-20 Financial Statements 2 72019-2 0 A u d i t Capital Assets (net of depreciation) Governmental Assets -$ 198.9 million Enterprise Assets –$199.5 million Notes Section 28 2019-2 0 A u d i t •Accompany the basic financial statements -Provides further analysis •Two new notes added for 2019-20 Note 4 –Loan Receivables This note reports on the City’s outstanding loans for: Affordable Housing BEGIN Homeownership Down Payment Assistance Note 19 –Covid-19 Given the last quarter of the 2019-20 Fiscal Year, the worldwide pandemic and resulting health emergency declaration and economic recession, the 2019-20 Financial Statements need to be understood in this context. Statistical Section 29 2019-2 0 A u d i t •The Statistical section provides additional financial and statistical data, including data about financial trends that may better inform the reader about the government’s activities. •It is also a good resource for long -term trends, reporting on most data over a 10-year period. Popular Annual Financial Report 30 https://www.slocity.org/Home/ShowDocument?id=29011 Addressing Auditor’s Findings 31 •Year-end closing and reconciliation •JE posting and numbering •Bank Reconciliation •Capital Asset –Additions and Deletions •Segregation of Duty in AP •Payroll System Configuration •Late Performance Reviews FY 2019-20 Financial Statements Questions? 2019-2 0 A u d i t Recommendation 3 3 Review and accept the Comprehensive Annual Financial Report for Fiscal Year 2019-20. 2019-2 0 A u d i t CONSIDERATION OF EMERGENCY ORDINANCE FOR ENFORCEMENT OF EMERGENCY AND PUBLIC HEALTH MEASURES Recommendation Adopt an Emergency Ordinance to codify expressly City authority to enforce measures enacted pursuant to a declared federal, state or local emergency, as follows: 1.Amend Chapter 2.24 (Emergency Services) to include express authorization for direct enforcement of local, state and federal emergency rules, regulations, orders, directives, or other measures related to the declaration of a local, state or federal emergency affecting the City of San Luis Obispo; and declaring and clarifying the meaning of the phrase “any lawful rule or regulation issued pursuant to this Chapter” as used in Chapter 2.24.” 2.Amend Chapter 9.22 (Safety Enhancement Zones) of the Municipal Code to expressly designate violations of Chapter 2.24, or any validly enacted County, State or Federal emergency or public health measures, as subject to $1000 fines immediately upon declaration of emergency and for the duration of a declared emergency. Existing Enforcement Authority & Measures The City Council and Emergency Services Director have broad powers under the Municipal Code and state law to enact “rules and regulations on matters reasonably related to the protection of life and property as affected by such emergency” Strong emphasis on education, outreach and business support to ensure understanding of evolving state requirements and support compliance for whole community benefit; penalties have been imposed only for large, unsafe gatherings and continuing and willful business violations Pursuant to the currently declared federal, state and County COVID-19 emergency, the City Council took prior action via Council Resolution 11099 and 11106 (2020 Series) to declare a local emergency and to enact emergency measures for the administrative enforcement of violations of any COVID-19 related public health and emergency orders against persons and businesses that failed or refused to comply with public health orders Proposed Amendments https://slocitycloud.sharepoint.com/:w:/r/sites/SLOHub /City Attorney/Shared%20Documents/Agenda%20Items%2 0(Reports%20- %20Advice)/City%20Council/20210119_EmergencyO rd/Redline%20for%201- 12021%20Meeting.docx?d=w1c7824c3526d44e481a ce1c0f019ed0f&csf=1&web=1&e=XLVamh PUBLIC COMMENT •If you would like to speak on this item,please raise your virtual hand. •When your name is called,you will be moved to a panelist. •Before you begin speaking unmute your mic and turn on your video. Please state your name and address (optional)for the record. •After you complete your comments you will be moved back to an attendee. Public Comment The Regular Meeting of the San Luis Obispo City Council will resume shortly *Recess in Progress* ADJOURNMENT The next Regular Meeting of the City Council is scheduled for Tuesday, February 2, 2021 at 6:00 p.m., via teleconference.