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Home My WebLink About2020/04/21 Item 05 CITY COUNCIL AGENDA STATEMENT CITY OF CHULA VISTA April 21,2020 File ID: 20-0130 TITLE RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CHAPTER 4 (GENERAL BUSINESS FEES) OF THE CITY'S MASTER FEE SCHEDULE TO MODIFY VARIOUS CANNABIS-RELATED FEES RECOMMENDED ACTION Council adopt the resolution. SUMMARY An Amendment of the City's Master Fee Schedule to modify Cannabis application fees is recommended. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California (W Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus,no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION In March 2018,the City Council voted to approve Ordinance 3418,which created a licensing and regulatory structure for the operation of lawful cannabis businesses in the City of Chula Vista; such structure is codified in Chula Vista Municipal Code Chapter 5.19. Section 5.19.290 made the effectiveness of Ordinance 3418 contingent on voter approval of a cannabis tax measure to be placed on the November 2018 ballot. A cannabis tax measure, Measure Q, was ultimately approved by voters and was certified by the City Council on December 11,2018.As a result,Chapter 5.19 has now gone into effect. Section 5.19.080(T) states that fees and charges associated with commercial cannabis activity will be established by resolution of the City Council.Staff initially recommended and proposed the establishment of cannabis application and other cannabis-related fees to City Council,which was approved on December 18, (aw 2018. Such application fees were utilized in the January 2019 application period. City intends to open a V. 001 Page I1 second 2020 application period. In preparation for this 2020 application period, staff have reviewed the actual time spent on the 2019 round of cannabis applications and determined that the costs of processing such applications were underestimated. Additionally, staff have also analyzed changes to the application process that will be implemented for the 2020 application period.Consequently,staff now proposes that the cannabis application fees, and other cannabis-related fees be modified. The following are highlights of the recommended changes based on staff analysis: • Previously,the phase one application fees were divided into phase 1a, 1b, 1c,and 1d fees,for a total phase one application fee of $6,049. The 2020 application period will have a single phase one application fee of$7,493. The 2020 application period will be open to non-retail license applicants only and will involve a new, streamlined process that does not utilize an outside consultant. In the newly revised application process,all applicants will go through the entire phase one process. • Previously,the background fees were divided into two sub-fees,the provisional background review and secondary background review, for a total fee of$647. The 2020 application period will have a single background review fee of$1,155.The City is no longer conducting provisional and secondary background reviews but is instead conducting a single background review of each applicant. As a result,it is appropriate to consolidate these fees. • Previously,all applications were new and subject to the same application fee.Staff anticipate that the 2020 application period will include both new applications and re-submissions of substantially similar applications from 2019. The proposed fees in the Cost of Service Analysis (Attachment 2) include a component of prework, and ongoing support spread over 30 application/re-submissions. The assumption of 30 applications/resubmissions is deemed appropriate based on the number of non-retail license applications submitted during the 2019 application period. Since the resubmitted applications will require less staff time, staff have calculated separate new application and resubmittal application fees of $7,493 and $2,800, respectively. Similarly, staff have calculated separate new background review and resubmittal background review fees of $1,155 and $663, respectively. The cannabis application fees, and other cannabis-related fees were established solely to recover the costs of processing cannabis business applications. Such costs would include reimbursement of staff processing, reviewing and selecting qualified cannabis business applicants. Application Fees As proposed, Resolution A amends Chapter 4 (General Business Fees) of the City's Master Fee Schedule to modify Cannabis Application Fees and other cannabis-related fees. Application Phase 1-"Application Process Development"establishes a fee of$7,493 per application for new applications and a fee of$2,800 for resubmittal applications. These fees will recover all reasonable costs of developing the cannabis application process including creating necessary forms; web pages; procedures; processes;selection criteria;technical support; and all other program development costs. These fees will be required to be paid upon submittal of the application by the applicant. Page 2 Additional Fees • New Background Review- $1,155 (per individual) • Resubmittal Background Review-$663 (per individual) DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently,the 500-foot rule found in California Code of Regulations Title 2,section 18702.2(a)(11),is not applicable to this decision for purposes of determining a disqualifying real property-related financial conflict of interest under the Political Reform Act(Cal. Gov't Code§ 87100, et seq.). Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT Approval of the resolution will likely result in a positive fiscal impact to the General Fund as all reasonable staff and costs associated with the application development process will be reimbursed to the General Fund from the application fees. The exact impact will be determined after the application process is completed. A budget amendment will be brought back to Council once the exact impacts are known. ONGOING FISCAL IMPACT There will be no material impact to the general fund in future years as a result of these fees being approved. (W All fees are designed to simply recover costs for staff time and consultants. ATTACHMENTS 1. Resolution 2. Cost of Service Analysis Staff Contact:David Bilby,Director of Finance Page 13 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CHAPTER 4 (GENERAL BUSINESS FEES) OF THE CITY'S MASTER FEE SCHEDULE TO MODIFY VARIOUS CANNABIS-RELATED FEES WHEREAS, in March 2018, the City Council voted to approve Ordinance 3418, which created a licensing and regulatory structure for the operation of lawful cannabis businesses in the City of Chula Vista; and WHEREAS, Ordinance 3418 was contingent on voter approval of a cannabis tax measure to be placed on the November 2018 ballot(Measure Q),which was ultimately approved by voters and was certified by the City Council on December 11, 2018; and WHEREAS, Ordinance 3418 became effective and was codified as Chula Vista Municipal Code Chapter 5.19; and WHEREAS, Section 5.19.080(T) states that fees and charges associated with commercial cannabis activity will be established by resolution of the City Council, and staff initially recommended and proposed the establishment of cannabis application fees and other cannabis- related fees to City Council in December 2018 for the 2019 application period; and (W WHEREAS, City intends to open a second application period and, in preparation for this 2020 application period, staff have reviewed the actual time spent on the 2019 round of cannabis applications and determined that the cannabis application fees, and other cannabis-related fees, should be modified for the 2020 application period; and WHEREAS, an analysis of staff effort and the current fully burdened hourly rates for impacted staff associated with processing cannabis licenses and related activities has been conducted to determine the cost of service associated with providing these permitting services; and WHEREAS, the City Council wishes to amend application and background fees for the licensing of cannabis related businesses; and WHEREAS, in order to achieve full and equitable cost recovery for cannabis application and licensing process,the City Council wishes to amend Chapter 4 (General Business Fees) of the City's Master Fee Schedule, as set forth in Exhibit 1, attached hereto and incorporated herein by reference as if set forth in full; and WHEREAS, the proposed fees do not exceed the estimated reasonable cost of providing the associated services; and WHEREAS, Article XIII C of the California Constitution requires a vote of the electorate to increase any levy, charge, or exaction imposed by a local government, unless specifically exempted; and WHEREAS, the proposed fees fall within the exceptions enumerated in Article XIII C Section 1(e), including but not limited to, subsections 1(e)(2) and I(e)(3), and, therefore, are not subject to the vote requirement; and WHEREAS,the proposed amendments to the Master Fee Schedule Chapter 4 shall become effective upon adoption of this Resolution by the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it does hereby amend Chapter 4(General Business Fees)of the City's Master Fee Schedule to set the amounts of the Cannabis Application and Background fees as set forth in Exhibit 1 to this Resolution. Presented by Approved as to form by David Bilby Glen R. Googins Director of Finance City Attorney ri� MASTER FEE SCHEDULE Chapter 4—Business Fees , � General Business Fees 1 1 MY OF City of Chula Vista Finance Department CHULA VISTA 276 Fourth Avenue,Chula Vista,CA 91910 GENERAL BUSINESS First Year Compliance Inspection Phase 2 includes 4 City inspections per commercial 1. Business License Fees,General cannabis business. Additional inspections will be Duplicate license............................................$5.00 subject to the Commercial Cannabis License Change of location............................................$12 Reinspection fee. Home Occupation Permit .................................$25 Business resource and energy evaluation Non-compliance fine,greater of.......................$15 or...............................5%of business license fee 2. Sales,Special Closing out sale,first 60 days............................$30 Closing out sale,one 30-day extension ............$15 Special sales event............................................$45 Temporary outside sales event.........................$45 SPECIFIC BUSINESS (REGULATORY) 1. Bath House Application, annual......................................$1,400 2. Bingo Application......................................................$265 Annual renewal...............................................$265 3. Commercial Cannabis Application &First Year License Fees Apflication Phase 1- New Application.........$7,493 Application Phase 1- Resubmittal...............$2.800 ApP:Tc-atieR Phase !A...................... . . $2r33 Appncatie R Phase 19 .c 2 n6s AppieeatigR P .ase 1C.......................................$868 Apcat*eR Phase 1s......................................c433 Application/Initial Compliance Inspection Phase 2 (due at license application)....................$16,570 First Year Compliance Inspection Phase 2 (due at conditional license issuance).....$31,275 (W City of Chula Vista www.chulavistaca.gov 619.691.5250 September MASTER FEE SCHEDULE ■ FEE BULLETIN 4-100 Page 2 of 3 2019 Renewal Fees ,r Annual Renewal/Compliance Inspection,each (City).......................................................$28,210 Annual Compliance Inspection, each (HDL).$6,000 Additional Fees Zoning Verification Letter...............................$183 New Background Review..................... $1,155 Resubmittal Background Review $663 SeGORdapy(CVRD) baekgreund review- 347 Rrev+SiGRal(HDh) baGI(greWnd review.............$389 Appeal..........................................................$3,276 Reinspection,each..........................................$330 4. Card Room Work permit,application...............................$175 Work permit,annual renewal.........................$100 5. Casino Parties Application......................................................$265 6. Firearms Dealer Application 365 �f Annual renewal...............................................$310 7. Fraternal Society Gameroom Application......................................................$265 8. Holistic Health Establishment Application......................................................$195 Annual renewal.................................................$25 9. Holistic Health Practitioner Application......................................................$175 Annual renewal...............................................$100 10. Junk Dealer Application......................................................$315 Renewal,every 2 years...................................$100 City of Chula Vista www.chulavistaca.gov 619.691.5250 September MASTER FEE SCHEDULE ■ FEE BULLETIN 4-100 Page 3 of 3 2019 11. Massage Establishment 20. Alcoholic Beverage Control (ABC) Application...................................................$1,400 Determination of Public Convenience or Annual renewal............................................$1,250 Necessity(PCN) Hearing Filing Hearing fee........................Full cost recovery Sale, transfer or change of location requires a new Initial deposit...............................................$1,500 application, including payment of application fee. 21. Tobacco Retailer 12. Massage Technician Permit fee.......................................................$322 Application......................................................$175 Annual renewal...............................................$100 APPEALS 1. ABC PCN Determination 13. Mobile Home Park Annual Operating Fee The annual safety and health fee for operation of a Processing fee.............................Full cost recovery mobile home park shall be as established by the Initial deposit...............................................$1,000 State. 2. Police Regulated Business License 14. Pawnbroker Processing fee.............................Full cost recovery Application......................................................$315 Initial deposit..................................................$250 Renewal,every 2 years...................................$100 FULL COST RECOVERY Pawnshop employee ID card For all full cost recoveryfee items,an initial deposit Application......................................................$165 shall be collected to cover the City's full cost, LW Annual renewal.................................................$70 including overhead, incurred in conjunction with Change of address/replacement.......................$10 review and processing as requested by applicant. Additional funds may be collected, as required,to 15. Peddler cover City costs. Should the application be Application......................................................$165 withdrawn at any time, the deposit shall be adjusted to cover the City's actual costs, including 16. Public Dance overhead,up to that time. Any funds remaining on deposit at the time of the completion or Application......................................................$175 withdrawal of the application shall be returned to the depositor, after accounting for expenses 17. Second Hand Dealer incurred to date. Application......................................................$315 Renewal,every 2 years...................................$100 See Master Fee Schedule Fee Bulletins 1-100 and 1-200 for additional discussion of full cost recovery 18. Solicitor and current hourly rates. Application, includes ID card...........................$165 ID card,annual renewal....................................$70 19. Transient Merchant Application......................................................$165 City of Chula Vista www.chulavistaca.gov 619.691.5250 Classification FBHR Deputy City Attorney II $ 179.93 Peace Officer $ 130.75 Police Lieutenant $ 207.41 Police Captain $ 252.36 Chief of Police $ 301.71 Police Department Cannabis Business Application Background Review Fees New Background Review(person not previously backgrounded on cannabis application) Establish Folder&Review Application (includes completeness check) Officer 45 min. $ 98.06 Individual Background Analysis Officer 4 hours $ 523.00 Discrepancy and Follow Up Time Officer 30 min $ 65.38 Draft Investigation Summary Officer 30 min $ 65.38 Internal Review/Discussion Deputy City Atty II 15 min $ 44.98 Lieutenant 15 min $ 51.85 Captain 15 min $ 63.09 Officer 15 min $ 32.69 Draft Disqualification Checklist Officer 15 min $ 32.69 Final Review Captain 10 min $ 42.06 Chief's Disqualification Review&Signature Chief 10 min $ 50.29 Captain 10 min $ 42.06 Send all Disqual Reviews in App to City Atty(6 min per app/avg.3 persons per app=2 min per person) Officer 2 min $ 4.36 DCA Review&Draft NOD Letter(21 minutes per app/ avg.3 persons per app=7 min per person) Deputy City Atty II 7 min $ 20.99 Chief Review&Sign NOD(6 minutes per app/avg.3 persons per app=2 min per person) Chief 2 min $ 10.06 Captain 2 min $ 8.41 Total $ 1,155.34 Establish Folder&Review Application (includes completeness check) Officer 45 min. $ 98.06 Individual Background Analysis Officer 1 hour $ 130.75 Discrepancy and Follow Up Time Officer 30 min $ 65.38 Draft Investigation Summary Officer 15 min $ 32.69 Internal Review/Discussion Deputy City Atty II 15 min $ 44.98 Lieutenant 15 min $ 51.85 Captain 15 min $ 63.09 Officer 15 min $ 32.69 Draft Disqualification Checklist Officer 15 min $ 32.69 Final Review Captain 10 min $ 42.06 Send all Disqual Reviews in App to City Atty(6 min per app/avg.3 persons per app=2 min per person) Chief 2 min $ 10.06 Captain 2 min $ 8.41 Scan and send Disqualification Review to City Atty Officer 5 min $ 10.90 DCA Review&Draft NOD Letter(21 minutes per app/ avg.3 persons per app=7 min per person) Deputy City Atty II 7 min $ 20.99 Chief Review&Sign NOD(6 minutes per app/avg.3 persons per app=2 min per person) Chief 2 min $ 10.06 Captain 2 min $ 8.41 LW Total $ 663.06