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HomeMy WebLinkAbout65B - ORD - CANNABIS FUNDREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: NOVEMBER 20, 2018 TITLE: INTRODUCE AND CONDUCT FIRST READING OF AN ORDINANCE ESTABLISHING A CANNABIS PUBLIC BENEFIT FUND TO BE USE SOLELY FOR YOUTH SERVICES AND ENFORCEMENT SERVICES (STRATEGIC PLAN NO. 2; 5,4) RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 181 Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Introduce and conduct First Reading of an Ordinance establishing a Cannabis Public Benefit Fund to be used solely for youth services and enforcement services. During both 2017 and 2018 the City Council adopted ordinances approving adult and commercial cannabis uses in the City. Subsequently the ordinances were by a voter approved ballot measure that provided for the taxation of adult use and commercial cannabis businesses. During the development of the adult use cannabis policy the City Council requested staff to ensure that the resulting tax revenue be directed toward providing enhanced youth services and enforcement services. As such, the City Manager proposed that the Fiscal Year 2018-19 Budget set aside anticipated revenues into a separate fund for these purposes. As part of the FY 2018-19 budget approval process, City Council Members requested staff to prepare recommendations that would ensure that future City Councilmembers would continue to set aside cannabis tax revenue for the specified services. As a result, Staff recommended the creation of the Cannabis Public Benefit Fund (Cannabis Fund) to segregate and facilitate the funding for enhanced youth services and enforcement services. The proposed ordinance provides for the establishment of a Cannabis Fund utilized solely to fund enhanced services for youth and enforcement. Youth services, intended to assist those under 24 years of age would include, for example, athletic, recreational, health, educational, and human services such as social services or prevention services. This would include City facility improvements, maintenance and equipment needs for youth. Enforcement services would be those services provided by code enforcement personnel, the police department, the City Attorney's Office and other related services to ensure the proper enforcement of all code requirements with an emphasis on enforcing violations of the Cit %!rfabis regulations Cannabis Ordinance November 20, 2018 Page 2 The proposed ordinance would require the City Manager to provide at least two reports to the City Council each year on the revenues and expenditures from the Cannabis Fund. In addition, any amendment, suspension or elimination of the Cannabis Fund would require the City Council to make the same findings as required to access the City's Economic Uncertainty Account. This process includes but is not limited to certain findings of a structural deficit and approval by a two- thirds vote of the entire City Council. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #2 — Youth, Education, Recreation; Goal #5 — Community Health, Livability, Engagement and Sustainability, Objective #4 (Support neighborhood vitality and livability). FISCAL IMPACT Upon adoption of the above -referenced Ordinance, there will be no impact to the FY 2018-19 General Fund Budget. However, beginning in FY 2019-20 two-thirds of both Adult -Use Tax and Commercial Tax revenues will be deposited to the Cannabis Fund forfunding appropriation related to youth and enforcement service(s). R bert 0. Cortez er City Manager's Office Exhibit: 1. Cannabis Fund Ordinance APPROVED AS TO FUNDS AND ACCOUNTS: Kathryn Downif, CPA Executive Director Finance and Management Services Agency 65B-2 SRC 11/20/18 ORDINANCE NO. NS -XXX AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA, ADDING ARTICLE XX TO CHAPTER 13 OF THE SANTA ANA MUNICIPAL CODE TO ESTABLISH A CANNABIS PUBLIC BENEFIT FUND THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Section XX is hereby added to Chapter 13 of the Santa Ana Municipal Code and shall read as follows: ARTICLE XX.- CANNABIS PUBLIC BENEFIT FUND. Sec. 13-200. - Establishment of the Fund. There is hereby established within the City of Santa Ana the "Cannabis Public Benefit Fund", which shall be a sub -fund within the City's General Fund (the "Cannabis Fund"). Sec. 13-201: Purpose. The Cannabis Fund shall be used to fund new or additional Youth Services, as of the date of the fund creation, for City of Santa Ana residents. The Cannabis Fund shall not be used to supplement existing Youth Services. The Cannabis Fund shall also be used to fund community enforcement and code enforcement. Sec. 13-202: Definitions. For the purposes of this Article, the following words and phrases shall be construed as having the following definitions: Adult Use- shall have the same meaning as that set forth in Santa Ana Municipal Code ("SAMC") section 40-2(2) as may be periodically amended. At the time of adoption of this Article, meaning cannabis or cannabis products that are intended to be used for non -medicinal purposes by a person twenty-one (21) years of age or older. Commercial Cannabis Activity — shall have the same meaning as that set forth in SAMC section 40-2(g) as may be periodically amended. At the time of adoption of this Article, meaning the cultivation, possession, manufacture, distribution, processing, storing, laboratory, packaging, labeling, transportation, delivery or sale of cannabis or cannabis products as provided for in this Chapter Ordinance No. NS -XXX Page 1 of 4 L• [Chapter 40]. Permitted commercial cannabis activities are listed in Land Use Table 40-5 of this Chapter [Chapter 40]. Enforcement Services — any and all services provided by City staff for the prevention, detection, investigation and violations of the City's codes and ordinances intended to prevent public nuisances or activities that are detrimental to the health, safety and welfare of the community. Medicinal/Medical Cannabis- shall have the same meaning as that set forth in SAMC section 40-2(27) as may be periodically amended. At the time of adoption of this Article, meaning cannabis or a product containing cannabis, including, but not limited to, concentrates, and extractions, intended to be sold for use by medicinal cannabis patients in California pursuant to the Compassionate Use Act of 1996, found at Section 11362.5 of the California Health and Safety Code. Medical cannabis retail is regulated by Chapter 18 and Chapter 21 of the Santa Ana Municipal Code. Operating Agreement- shall have the same meaning as that set forth in SAMC section 40-1C as may be periodically amended. At the time of adoption of this Article, meaning a legally binding written agreement between each commercial cannabis business operator and the City, executed by the City Manager, or his or her designee, and in a form or substance satisfactory to the Executive Director of Planning and Building and the City Attorney, and containing those provisions necessary to ensure that the requirements of this article are satisfied. A distinct Commercial Cannabis Operating Agreement shall be required for each location and type of commercial cannabis business activity taking place at an approved Commercial Cannabis Business. Youth Services- any and all services provided to residents of the City under the age of 24 for athletic, recreational, health, educational, or human services, directly by City staff or through partnerships with third parties. This may include City facility improvements, maintenance and equipment needs related to youth services. Sec. 13-203. - Cannabis Revenue Funding. A. Automatic Deposit of Cannabis Tax Revenues into the Cannabis Fund. The Cannabis Fund shall be funded by an automatic deposit of two-thirds (2/3) of all cannabis tax revenues generated each year, commencing with the Fiscal Year Budget for 2019-20 and continuing thereafter in the budget for each Fiscal Year, from all of the following: 1) Operating Agreements for Commercial Cannabis businesses and 2) Any newly adopted Cannabis Business License Tax. For purposes of this subsection, in addition to the descriptions provided directly above in this paragraph, the phrase "cannabis tax revenues" means all revenues generated from any new or increased cannabis tax which has been approved by the voters of the City on or after the effective date of this Chapter and any increase of the cannabis tax authorized by the Santa Ana Municipal Code and approved by the City Council. Tax revenue from 2 Ordinance No. NS -XXX 65B-4 Page 2 of 4 Medicinal/Medical Cannabis shall not go into the Cannabis Fund. Funds in this sub -fund shall be carried over from year-to-year. B. Discretionary Deposits into Cannabis Fund not Prohibited. Nothing in this Chapter shall prohibit the City Council, as part of the budgeting process, from contributing additional revenues to the Cannabis Fund, as determined in the City Council's sound legislative discretion. C. Expenditures from the Cannabis Fund. Funds in the Cannabis Fund shall be restricted to 1) Youth Services: expenditures for new, additional or enhanced, as of the date the Cannabis Fund is created, Youth Services for City of Santa Ana residents and 2) Enforcement Services: expenditures for Enforcement Services. Sec. 13-204.- Presentation to City Council. At least two times per year the City Manager shall make a presentation to the City Council and report on the revenue that has been deposited in the Cannabis Fund and expenditures from the Cannabis Fund. Sec. 13-205. - Procedure for Amending, Suspending or Rescinding Ordinance. This ordinance may only be amended, suspended or rescinded by an affirmative vote of at least two-thirds of the City Council after making findings that a structural deficit exists in the same manner as required to access the Economic Uncertainty Account as set forth in the City's Budget and Financial Policy. Section 2. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. ADOPTED this day of 2018. Miguel A. Pulido Mayor Ordinance No. NS -XXX 3 Page 3 of 4 65B-5 APPROVED AS TO FORM //Sonia R. Carvalho// SONIA R. CARVALHO City Attorney AYES: NOES: ABSTAIN NOT PRESENT: Councilmembers: Councilmembers: Councilmembers: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS -XXX to be the original ordinance adopted by the City Council of the City of Santa Ana on . 2018, and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana 4 Ordinance No. NS -XXX 65B-6 Page 4 of 4