Read the July 29 meeting.

! the

the the the the the the

the the the the the

the the the the the the the the the the the the

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

To be continued...

Thank you.

the

the the the

the the the the the the the the the the the Thank you.

Thank you.

Thank you.

the the the the

! the

!

the Yeah Yeah Yeah

Yeah

Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah Yeah

Thank you.

the

the the the

the the the the the

the

the the the the the the the the the the the the the Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

the

the the the the the the

the the the the the the the ! the Thank you.

Thank you.

Thank you.

Thank you.

the the the the the the the the

the the the the the the the the the the the

the the the the

the the the the the the the the

the the the the the the the the Thank you.

Thank you.

the

the the the the the the the the the the the the the the the the the

the the the the the the

the the the the the the the the the the the the the the

the the the the the the the ! the Thank you.

Thank you.

We'll be right back.

We'll be right back.

Thank you.

Thank you.

Good evening, everybody.

Recording in progress.

I think we're about to get started, so let me go ahead and call this special city council meeting to order.

I think because it's Friday afternoon, we're all still kind of wondering, you know, why we're all here on a Friday afternoon. So my apologies. But we wanted to make sure we addressed these issues sooner rather than later. So first of all, welcome to the Santa Ana City Council Chambers. And today is July 29, 2022. And as I said, this is a special City Council meeting to go into two areas in more depth. And that's what we normally do with some of our more complicated issues. So I thank you all for joining us. Let me go ahead and just begin with some opening remarks, and then I'll turn it over to the clerk so she can call roll.

This meeting is taking place with in-person attendance and by teleconference via Zoom. The public can access the meeting via the Santa Ana YouTube channel or the city's website. And as always, please bear with us as the technology may interrupt the flow of the meeting. We have people here in person that we'll call on first to address the council, and then we also have people, members of the public, that may be joining us by phone or virtually, and we try to make it as accessible as we can for everybody who can't make it or may have a disability, may have some illness or some impediment to coming here in person.

So let me go ahead and turn it over to the clerk so she can call roll. And by the way, we do have some council members that aren't here physically and will be joining us via Zoom.

Councilmember Hernandez?

Present. Councilmember Lopez? Here. Councilmember Mendoza? Present. Councilmember Penaloza?

David Penaloza

Presente.

Councilmember Phan? Here. Mayor Pro Tem Becerra? Mayor Sarmento.

Thank you for that. It looks like we do have quorum. Is everybody on the council here? Everybody is here as I said. Those that are not physically present or online and joining us virtually. I will turn it over to the clerk just to make some opening remarks as well for those members of the public that are joining us by phone or virtually.

To request to speak on agenda or non-agenda items within the city's jurisdiction, please Please dial star 9 from your phone or click the button labeled raised hand from Zoom at this time. Please announce your name and ward or neighborhood you reside in, the City of Santa Ana for the record.

Great. Thank you for that. Let me go ahead and turn it over to Mayor Pro Tem who is going to lead us in the Pledge of Allegiance.

Phil Bacerra

Thank you, Mayor. If you guys would all rise and repeat after me. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God indivisible with liberty and justice for all.

Thank you Mayor Pro Tem. So this brings us to and this is going to be obviously an abbreviated session special session of the City Council so we don't have presentations and sometimes that tends to delay us a little bit so we'll go straight into public comments first because we want to hear from members of the public initially and then we'll tackle the two items. So you don't have to tell us your specific address, but if you can tell us if you're a resident of Santa Ana what ward you live in, that might be helpful. And to the extent you just recite your name, you'll have three minutes to address the council.

You don't have to address, you don't have to use all three minutes. If somebody has said something before you, we're going to take it and consider that as well, but feel free to be more brief. Our objective is to try to save the rest of your Friday night so everybody can go home and be with their families or do what you need to do.

Phil Bacerra

Mayor, real quick, if I might ask if anybody would be willing to indulge, can we have the presentations first? Because the reason I ask for that is that maybe for some of the folks that are here to comment tonight, some of the elements of the presentation might address some of the ideas or concerns.

I'll leave that to the indulgence of the council and see what they want to do. I'm sure staff can do that. I just thought if some people are here for one item, they can make sure they get that all out of the way and then they don't have to stay for the second item.

I'm flexible either way, so whatever the pleasure of the council is.

Thai Viet Phan

I like the presentation idea first. I think half of the issues are already going to be addressed.

Let's start with the first item then. we have the first item that's going to be before us on for study session is related to the cannabis ordinance so I'll turn it over to the staff do the presentation and then maybe you can go ahead and if it's not recited you can

tell me which item you're here to speak on thank you mayor for the presentation on the cannabis item we have the executive director of planning Min Thai Thank You City Manager Rich

Good evening, Mayor and member of the City Council. So with tonight's presentation, staff will provide an overview of the legal cannabis history in the City of Santa Ana, as well as the draft ordinance. And then at the end of the presentation, staff will present the key changes proposed and a decision matrix to facilitate the City Council direction to staff. The key changes in the matrix are based on feedback regarding the draft ordinance from the City Council, from community stakeholders, industry operators, and labor and industry organizations. Next, I'll go over the background and context.

The City has permitted retail sales of cannabis for medicinal purposes since November of 2014. and starting in January of 2018, the retail sales of cannabis for recreational use, as well as non-retail testing, manufacturing, distribution, and cultivation. There are currently 64 cannabis-related businesses operating in the city, of which 27 are active retail dispensaries.

Santa Ana has one of the most competitive business environments and is a leader in regulating cannabis since 2014. We have the only exclusive non-discretionary licensing process in the state. The city has permitted up to 30 dispensary, I'm sorry, have permits for up to 30 dispensary with no cap on the supply chain. We have a dedicated cannabis team consisting of planning, building, and co-liaisons to facilitate the review, issuance, or permits and inspection. We have the most nimble and responsive process for making changes of any cities in the state.

Since 2014, we have routinely brought back ordinances and updates to adjust for community needs, be responsive to state regulation, as well as industry trends.

With this proposed ordinance, the city will remain the leader in introducing trend-setting concepts, such as Cannabis Consumption Lounge, Special Events, Festival, and will further streamline the administrative and regulatory requirements of our regulations.

Since the May 3rd meeting, staff have been compiling and recording the large volume of feedback and recommendations regarding the key regulatory and financial topics of the ordinance. subsequent to the subsequent and following slides will provide an overview of these key topics i won't go over them in details as we will have a decision make decision making matrix for you to follow hopefully that will help with our decision making process and ease that process for the city council in terms of the key topics where we have consensus and no further directions is needed from the Council.

This include administrative streamline updates, removal of the live scan requirements for employees, allow for the administrative relocation of retail businesses, and also implement a process to sunset the measure BB wait list.

Additional category where we have consensus include development regulations and standards to permit consumption lounges and temporary events to allow for outdoor smoking with odor control measures and to implement a sunset measure for the three main remaining licenses that have process approval with the city but not yet operational these following slides include topics that will require directions from the City Council and they include implementing measurable performance based on public benefits and social equity obligations option for in lieu fee program for the city to up

implement incorporate community benefits and equity component as part of a tax credit program another topic of requiring direction is whether or not to allow for retail and expanded location opportunity within the city through five additional retail licenses and reducing existing buffers so these maps I won't necessarily go over into them in detail but what you see there in the gray are the yellow line is existing and in the gray is to propose buffer where it's

been reduced from 600 feet from a thousand feet to 600 feet away from residential schools and parks the second map here is the buffer for dial road industrial area and the final map is for the granite industrial area these amendments here I'm going over are related to the financial amendments again here we have consensus on administrative matters and will not require any feedback from the City Council but following the next slide these are issues relating financial amendments that we will require

direction from this Council and they include tax rate for supply and retail operation and as mentioned previously combining community and social equity benefits with a tax credit or rebate program so at this point what I'll do is have Ali pull up the decision-making process matrix I will quickly go over the first table as the first table will summarize issues where we already have consensus and will not require further direction. And we'll have then the following table which will require input from the council. So Ellie. Mayor, I may make a suggestion.

I know council usually doesn't like to deliberate until after you've also heard public comment. So we could pause the presentation at this point. You could hear the public comment and then engage in your dialogue and then we could put that up if you prefer that.

I like that. Let's go ahead and do it that way. Go ahead, Councilman.

Thai Viet Phan

Will you please email me the presentation?

I think it was just emailed, right?

Thai Viet Phan

Oh, okay. Great. Thank you.

All right. So are we ready to take public comment on this now? Great. So I'll start with those, and it looks like we only have one speaker for item number two and somebody who's going to speak on item number one and two, and we may have some members of the public who want to speak on either one or two, and that's going to be a little bit more difficult to distinguish because you're going to have to ask them and put them in waiting if they are here to speak on item number two. So let me begin with those that are clearly here to speak on item number one. And let me start with Jackie Cordova, if you could come on up. And then

we're followed by Christian Martinez, followed by Derek Smith. Hello, community. I think it's funny that this meeting is on a Friday night. The two most pressing items in our community is cannabis and police oversight. This is a special surprise meeting, seems kind of secret. I didn't know about it. I get all the emails and I didn't know about this meeting. I am Jackie Cordova. I'm a mother of Santa Ana. I'm an elder. I started my business in 2016. I have a cannabis business. I'm

independent, I went statewide to go work with the farmers to learn about this medicine and their conditions up there. First of all, I did a five-year study on cannabis in Santa Ana and I am giving a report card of an F for misappropriation of public funds, the taxes. The community expressly said that they don't want our taxes to go to the police Department and the bulk of these funds do go to the police department. Failure to follow the

expressed will of the community, misappropriation of business funds, funneling experimental public social income directly to police, following outdated abuse tactics of the racist founders of Orange County, the KKK. An epic failure in police accountability for decades now. We ask that you respect the farmers, respect Mother Earth. We're looking for organic flour. A lot of the flour here has chemicals in it. We don't agree with the tax. The flour comes from the ground. It's natural. It shouldn't be taxed. There should be no tax on our medicine. This is our healing medicine. Ganja is sacred.

No tax for police or political benefit. And I want to know, do you know how many people are locked up for life for cannabis consumption still people are locked up in prison for life for this and so we need federal legalization in order to combat this thing so what is the city doing to work on that they get an f in that also public safety is an f persecution for the consumption of a medicinal flower is still rampant in orange county the city of santa anna works in collusion with our most racist district attorney Todd Spitzer for funneling

residents into his prison pipeline for decades Anna Anna has failed to enact police oversight all by design the truth is the police forces in Orange County still brutally and gleefully arrest residents for the consumption of this plant medicine I was arrested in Irvine for smoking this flower right across the border you know so they're brutally brutalizing us for this our medicine our community has explicitly denounced the use of extra public funds to benefit the Santa Ana Police Department's already grossly bloated budget and doomed to the

Orange County Sheriff Don Barnes our very own deporter-in-chief he loves tearing our families apart he loves transferring residents to ICE for deportation. Our city is blighted. You know, I've been around nationally, Mayor, and our city streets are the worst I have seen. And this is due to the blight of all of the years of being overtaxed, overworked in our city. The sidewalks are terrible. And so this tax money, we want to know where is it going. It's not going to us. Your businesses are out here crying to you. And you let that streetcar

go through you tax us a p-bid for the downtown Inc you taught you charge seconds you charge us to pay our water bill here you charge us parking to come and participate in these meetings you charge us to go to the library it's

pretty insane thank you thank you Christian Martinez followed by Derek Eric Smith, followed by Kevin Bramblat. Sorry for that pronunciation.

Good afternoon, Mayor, City Council. Thank you for the opportunity to speak with you all today. My name is Christian Martinez. I am with USCW Local 324, the primary labor union that represents cannabis workers in Santa Ana and throughout Orange County. As the industry is still young and developing, this presents us with an opportunity to determine what the standards are going to be for the jobs, but also for the industry as a whole. So with that being said, you know, that's very important because the cannabis industry is increasingly becoming one of the top employers for younger folks entering the workforce.

And it becomes even more imperative that we do what we can to make sure that these jobs provide, are quality jobs that provide career pathways for these workers. For this reason, we believe that at 324, our tax proposal is a lot more equitable than the flat tax proposal for everyone that is being proposed because it ensures that employers are doing right by their workers and by the communities that they operate in. So specifically, we are advocating that these tax rebates be allocated based on these specific criteria. We support that these tax rebates be allocated to employers that pay a living wage of at least 115% of minimum wage.

We believe that these tax rebates should be allocated to employers that participate in job training programs to make sure that these jobs are indeed providing career pathways. And lastly, we strongly support that tax rebates be allocated to employers that hire locally, with at least 40% of their workforce coming from the low-income areas of Santa Ana. This is also a way to ensure that the loss in tax revenue that the city will endure is being offset by low-income residents having access to good-paying jobs with benefits. and it's also a way to ensure that the communities that have been most negatively impacted by the war on drugs

are the ones that are primarily benefiting from the expansion of this industry. So thank you again for the opportunity to speak, and thank you, Mayor and Council, for continuing to consider USCW-224 as a partner in this decision-making.

Thank you. Derek Smith, followed by Kevin, followed by Glenda Garcia.

Good evening, Mayor, City Council, City staff. My name is Derek Smith. I'm the political director for UFCW Local 324. We have over 250 workers here in Santa Ana in the cannabis industry. And our approach in Santa Ana and in every other city where the cannabis regulations are being contemplated is to partner with the industry to create a thriving industry. Generally, we concur that cannabis is overtaxed. Certainly we agree that the legal market cannot properly compete with the illicit market unless once the price point for the product comes down. We also believe that operators who play by the myriad of rules

and taxes that are established by state and city are not only at a competitive disadvantage with the illicit market, but they're also at a competitive disadvantage with the legal market that continues to pay minimum wages with little to no benefits. They're at a financial disadvantage with the legal industry that exploits labor peace agreements by inventing labor signatories and denies their employees the opportunity to join a union.

So again, we want to protect the industry, but we're more concerned with protecting the segment of the industry that chooses to invest in their workers and acknowledge that this cannot be a minimum wage industry. By all means, lower the taxes for this industry, but in the name of fairness, misprioritize those businesses which pay in excess of 115% of the living wage, or the minimum wage, achieve local hiring goals, and provide certified trainings so that workers can make this a career path. Thank you.

Thank you. Kevin, followed by Glenda Garcia, followed by David Greenberg.

And if you all could be ready just to come on up, that way we can get through this a little quicker. Thank you.

Ladies and gentlemen of the council and city staff, thanks for taking the time to invite us over here. My name is Kevin Brombat. I am an owner of Cannabis Testing Lab here in Santa Ana, as well as president of the Orange County Advocacy Alliance, otherwise known as the OCAA. I know we've spoken to many of you over the past few months. Real quick, we're going to start by having people speak on our behalf as far as distribution, manufacturing and retail, so you can get a different perspective tonight. We have some of our members here. I'd ask that they'd stand up so you can take a look at them.

Yeah, we had a pretty good turnout. I really hope you take everyone's comments and concerns into consideration. We've done a lot of studying. We've gathered a lot of these information from other people and other cities, and we've done our own due diligence. So I just, I really hope, you know, you take these comments seriously today. Thank you.

Thank you. Glenda, followed by David Greenberg, followed by Nam Tran.

Good afternoon, all. My name is Glenda Garcia. I am one of the owners of CannaVision Labs. We're a licensed manufacturer and distribution facility in Santa Ana. As a first generation Mexican American that was born and raised in the heart of Santa Ana, it is such an honor and privilege to bring a new and innovative company to the city that for me is where it all started. As a licensed manufacturer and distributor, I am respectfully requesting that the following municipal codes change related to cannabis.

Number one, that we bifurcate the cannabis tax resolution and set it for a council meeting on August 2nd to lower cannabis taxes immediately, as proposed by the OCAA. And to reduce the gross receipt tax on cannabis retail, manufacturing, and distribution as follows. For adult cannabis retail business, from 8% to 5%. For distribution, from 6% to 1%. For manufacturing, from 6% to 0.5%. and for cultivation from 6% to 1%. These are the two most important issues facing us as cannabis operators in the city of Santa Ana.

As a small business, our competition is twofold. We are competing with large corporations and manufacturers in cities with lower taxes. Large corporations have spent millions of dollars in large-scale operations that could in fact service the entire California cannabis industry twofold.

And most of them are located in cities that have the lowest tax rates available and thus undercutting pricing across the board. Unfortunately, as licensing has increased, so has the raw good supplies and the prices that were once lucrative are now plummeting to all-time lows. At this point, without modification to the taxation of the cannabis industry in Santa Ana, we're looking at losing small businesses that are at the heart of cannabis culture and innovation. We are quite literally driving people out if we don't compete. So far, cannabis tax money has been good. It's been done wonders for the community.

It's provided parks, community areas, as well as bookmobiles that were scarce even when I was a student of Santa Ana Unified. In reality, reducing tax rates will serve to increase tax revenue. As a Santa Ana native, I would like nothing more than to maintain my business here in the city full of people just like me.

It's not only a privilege to run a company here, but it's a great responsibility to represent women in cannabis, minorities in business, and ultimately to prove that great things can come out of low socioeconomic backgrounds. 15 seconds. And that's it. Thank you.

Thank you. David Greenberg followed by Namtran followed by James Shea.

Hi, thank you for your time. My name is Dave Greenberg. I'm one of the founders of Marche Co. We're a small manufacturing business here in Santa Ana. We're just starting, so yeah, it's real important what everybody's talking about as far as getting some modification or relief in in that to help us kind of grow our business we're new to manufacturing we have a lot of you know big plans and ideas with with our business we're kind of a family-oriented company but it's also part of an expansion of another business called MJ pack and we specialize manufacturing you know joint tubes

plastic packaging and just biodegradable packaging we probably label and brand and close to 5 million joint tubes every month and ship them all over California, all over the country. So on that side of the market, we've really seen that type of relief either affect positively or negatively a lot of our customers. We're manufacturing in Norwalk and Irvine, specifically to service L.A., Orange County. So we've seen hundreds of customers here in Orange County and Santa Ana, specifically in Santa Ana, of living in Costa Mesa, kind of feel that pinch, especially what's going on the last

couple of years, especially the last, like, six months. So that modification is definitely going to help a lot of our other customers that we're selling packaging to and trying to get them started and give them, you know, a let up in the market. Plus our business, it really would benefit, you know, all our staff and all the people kind of putting in the time to make this possible, what we're trying to do here. Thank you for your time.

Thank you. Nam Tran, followed by James Shee. followed by Dana Cisneros.

Hi, my name is Nam Tran. I'm the founder of Goodfellas Group. We're a distribution here in Santa Ana. I want to thank the city council, the mayor, and the city staff for taking time off this Friday to hear about the taxes. I just made some notes here. I wasn't really expecting a Friday meeting.

Since I started here in Santa Ana about two years ago, a little under two years ago, I lost probably about nearly $25 million in potential deals because of the taxes. And I have a current deal on the table right now, which would revenue about $50 million. And going from 4% to 1%, that's roughly 3%. That's about $1.5 million difference. That's potentially making me lose the deal. My client is going to walk. If I lose that deal, I potentially can lose my business, or I'll be forced to move to another city, neighboring city like Costa Mesa or Huntington Beach, where they're at 1%.

And I don't want to lose the deal. I want to make sure I work here in Santa Ana. It's been great working here, and I want to stay here. Also, another thing is I have my own in-house brands that I distribute throughout California, and it's been a real struggle to compete against other brands because of the taxes, right? Prime example is on a $10 item, the additional 5% from 6 to 1 is 50 cents. And given the bad market right now, 50 cents is everything to a dispensary. And I'm negotiating with these guys, and I can't seem to land the sale, right?

And this is a struggle. I'm also speaking on behalf of Ray from Bud Tech, who couldn't be here. He's also struggling, and he's also have deals on the table that he's lost in the past just because of the tax, right? It's 6%. We can make more if it was one. And Long Beach has proven that when they lowered the taxes, the city was able to make more, right? It's just because we were able to bring more businesses here. If we don't lower the tax here, I'm going to be forced to either close my business or look to another city to relocate my business so I can capture that business.

And that's all I have to say. Thank you.

Thank you. James Shiv, followed by Dana Cisneros, followed by Jeff Dupra.

Thank you. Ladies and gentlemen of the city council and city staff, thank you so much today for the opportunity to speak in front of you. I just want to say my name is James Chi. I'm the owner of My Green Network. We're the very first shared cannabis manufacturing facility here in the city of Santa Ana, and actually in all of California to optimize the Type S license. We're incredibly excited to be part of this community. Now, our current facility actually has eight licenses with your city. We're planning to file 22 more licenses in order to actually bring 30 full manufacturers to your city.

The revenue from that at a bare minimum would be $30 million a year. But in order to do that, we need to be able to capture that business. Today, I'm standing in front of you as a concerned cannabis business owner. I can't go really tell somebody you have the best tax rates here in Santa Ana without getting that 1%. Now, four years ago, this industry was incredibly different than what we actually are here today. And a good friend of mine, also right from Bud Technologies, said that, you know, every year in cannabis is a dog year. So we are actually about 30 years of evolution in the last four years for cannabis.

With that, when we're actually going forward and we're asking for these tax rates, it's not because you guys made any bad decisions or anything. It is the current industry as it stands today. So we're looking to get to 1% across the supply chain to benefit the city and bring this entire community together. We're looking to go to 5% for retail because we know that's going to attract more businesses, more customers, and people to do business here in this city. The previous comments you've heard from everybody else in OCAA is a representative of a small segment of the licensees here today. And we're really excited to work with you.

So for this, my ask on behalf of the OCA is relatively simple. We know it's a big leap of faith, but 1% for the supply chain or lower if you'd like. You go to 1%, I guarantee you the actual operators in your city are going to be pushing business like crazy. You go below 1%, I can guarantee you that we're going to be trying to steal business from other cities. And if you go to 5% for the retail as well, we're going to be able to draw in more customers and more clients. Now the downside of it all is if you stay at anything above 1% that's going to cause us to not be able to be

competitive. You've heard the story a thousand times from all of us. We don't need to repeat it, but we will lose business and die and we don't want that. So for us the cannabis tax issue is already at the forefront today. California just removed the cultivation tax. Long Beach has set theirs to 1% and earned literally millions of dollars from the supply chain and ultimately Costa Mesa started off at 15 seconds the city of Santa Ana wants to be at the forefront of cannabis we do as well we are in this together so please the time to act is

now five seconds thank you well I feel like I'm aging in dog years man so I I get you completely. Dana Cisneros, followed by Jeff DeProw, followed by Robert Tran.

Good evening, Council, and thank you for calling this meeting. Thank you so much to staff who is so responsive and probably some of the best city staff that I've had the opportunity to work with in California. I'm really not saying that, and I do tell them that all the time. And so one of the things I'm here to talk to you about, I'm an attorney here in Orange County. I represent a number of businesses that operate within your city, including Ms. Garcia and her business, CannaVision, and what a shining example of a born and raised and bred Santa Ana resident.

And then I also represent Butter, who's here to speak after me, and they'll let you know their chief concerns. But I'm also here as a board member of Orange County Normal, and I'm here to discuss bifurcating some of these issues. One of them is the SB34 issue. Our veterans and patients are significantly lacking access to affordable cannabis. Given that you have so many operators that are designated as adult use only, they're not able to participate in donation programs. I've worked with staff who's also worked with the city attorney to come up with reasonable language to amend the ordinance.

But I'd like to bring your attention to regulation 15411, subsection 6, excuse me, subsection C, which also gives you the leeway to adopt a program that goes beyond just medicine, medicinal patients, but also extends to veterans and extends to people who are in the what we call equity community, which would service indigent people who can't afford to buy licensed cannabis, which after all that was the goal of Prop 64. I also would like to discuss the MMIC issue with taxation, again with respect to the adult use retailers. They are overcharging are patients who are being subjected to sales tax, whereas the law provides that they are

exempt from sales tax if they have a medical marijuana identification card issued through the Department of Public Health. I also would like to bring your attention to background checks. Specifically, one of my clients right now has had their banking suspended because they were unable to timely renew their RSP because they're waiting on the DOJ to respond with the information regarding a renewal on the background check. We support background checks initiation. I don't think they're necessary for every single employee, but I understand the concerns of residents in the city.

But with respect to renewing and scanning someone and live scanning someone every single year and every single staff member, it's expensive, it's onerous, and now it's caused one of my clients to have their banking suspended, which I'm sure none of you want that and nobody thinks is a good idea. The buffer reductions, I just would like you guys to consider what your residents wanted when they initially enacted these statutes. And then with respect to moving, I'm going to defer to the industry. 15 seconds. And my clients. And I would also like to echo, of course, the comments that have been made by the prior speakers

and especially Mr. Shin and would like to encourage you to reduce the taxes. Five seconds. I shared a spreadsheet with Council Member Fan that I'm not sure she'll share with you guys. Speaker, your time is up. Thank you. Thank you.

Jeff Dopera, Robert Tran, followed by Brandon Sisco. If you all can please maybe start getting in line, that way we can get through this a lot quicker.

How are you guys doing tonight? I don't want to kind of repeat the same things everyone is saying here, so thank you to the city council for taking up these measures and just looking at it overall. The things that affect us mostly are the background checks. They're hurting us for time to hire new employees. by the time we go to the background check comes back they've already found another job so we're wasting money and time on those things taxes on distribution or somebody like me that has three cultivation licenses three distribution licenses and then the retail license as I move the product

through you guys a city I'm being taxed every single time and so when you look at the cost for me to move it through it's very very expensive and the last one and just clarity on the buffers on if you're gonna let all the stores move and in addition adding new licenses to it. I'd like to see what that looks like for a store like mine who I've been kind of like the last store, I would say, that opened in the city. And so for me, I've spent a couple million dollars in the build-out of our store. We built a beautiful store in an industrial area. Then for us to change the buffers to allow these stores

to come and kind of compound right on top of us but out in a better location that wasn't previously available to us. So that's it. So something to consider. But thank you guys for your time on Friday night and look forward to knowing you guys a little more.

Thank you for being concise. Robert Tran, Brandon Sisco, followed by Chris Glu.

Hi. Good evening. Council member and staff and everybody here. I heard about the last meeting and here to support our friends. I have a licensed facility in Long Beach. I design, build, operate, manage and help a lot of friends in this industry when I heard about the taxes that's just insane Long Beach, Mr. Schoen said they dropped to 1% and they said it would just drastically increase and a lot of people are taking the business out of this city and going to somewhere else and I just think that's just a sad thing to see when everyone here works so hard for the business

pretty much that's just you know you want to pick my brain from other city I'm open to say and

support any way I can thank you thank you Brandon Cisco followed by Chris glue followed by Scott

Muse still hello everyone being born and raised in Orange County and a Santa Ana resident since 2013 I'd like to say how awesome it was that Santa Ana was the first city in Orange County to provide permits for medicinal and commercial cannabis. As a medicinal marijuana patient myself, access to regulated medicine is essential. Similarly, as an adult user, access to regulated products is still of high importance and even though many consumers purchase via adult use versus medicinal, they're often still buying for medicinal purposes such as stress

relief, insomnia, anxiety, and so on. As being a medicinal patient requires a yearly renew by doctor, many just skip that process and go to an adult use store.

Let's see here. Along with agreeing with the tax reduction which fellow stakeholders have proposed creating a more competitive playing field, I'd like to point out nearby cities Costa Mesa and Long Beach have already reduced their taxes from 6% to 1 or 2, the exact thing we're talking about. And they've shown Long Beach actually, their revenue increased 2.5% times after they reduced it from $4 million to $10 million. I would suspect if Santa Ana does not provide a competitive tax rate promptly, businesses will relocate or reroute through Costa Mesa or

Long Beach, which has the lower rates and have actually been generating more revenue, as I mentioned. I'd like to additionally address the potential of adding retail permits. I agree with adding five permits as there are 63 permits pending in Costa Mesa, and we are the largest city in Orange County, so I think five more would be reasonable in the same zone, in the same buffer, without making those modifications. As the 2018 process was merit-based and not a lottery like the first one, I think it's

It's my strong belief that the five additional licenses should adhere to the five waiting in line from 2018. And as a significant amount of time and money was already spent by the applicants and city staff, my group included, during the very competitive 2018 process. To be noted, I have emailed every year to ensure my entity's position would be activated if and when any changes occurred and received response that my position has remained in good standing. I've also heard discussion of the ability to move retail locations.

And as two permit holders have already done so on special circumstances, the remainder should also be allowed to. And as long as all codes, regulations, zonings, planning, department regulations, et cetera, are met, moving a retail business to a more desirable location should be allowable within reason. Five seconds. overall I'm happy with the city and staff throughout would be happier with these improvements proud to be a Santa Ana resident appreciate you all and have a great weekend

thank you good time Chris Blue followed by Scott followed by Michael Lang I'll be brief good

evening honorable council members and staff I just want to take a quick moment to thank you all for all your hard work on the amendments to the cannabis ordinance I'm confident it's an important first step in keeping Santa Ana's position and maintaining it in the Orange County marketplace And thank you again for all your hard work, especially that man right there, Ali. Thank you.

What it is with Ali, he is loved. So tell us your secret. Scott followed by Michael Lang followed by Elliot Lewis. Is Scott in here?

Scott's good.

Got it. Thank you, Scott. Best comments ever. Michael Lang followed by Elliot Lewis.

I'll patrol as well. Thank you.

Perfect. Elliot Lewis.

And Tatev is our last speaker. Good evening, Council, Mayor. Just wanted to talk on a few issues. First one I want to touch on is the SB 34 and echo the sentiments of Dana Cisneros. We do run a lot of veteran giveaways of cannabis through SB 34, and we should open that up to every store here. I think it's an important thing. Veterans served our country. It's an effective medication for PTSD, and they should have full access. I want to speak on the tax issue. First, let me start with the distribution, manufacturing, cultivation. It just doesn't make any sense to tax those. We don't have any dog in the fight.

Again, Long Beach is down to 1% if you've got to throw some tax on it. But taxing the supply chain, especially considering what those businesses are going through right now, basically makes it so they're going to go out of business and leave the city. You know, I've been on the phone all week, you know, talking to different people, making deals, etc., etc. There's nine large companies, and most of them I'm sworn to secrecy on. They're all going out of business in this industry, right? Big companies, ones that you know, they're all going bust. And the problem really is the oppressive tax rate.

So I'd urge the city, first and foremost, to write a letter to the state, to talk to the state representatives, because it makes no sense at the state that they have a $95 billion surplus and they can't find a billion dollars in the budget. Now, speaking on Santa Ana retail tax, obviously our position is we want to abolish all taxes. We don't understand why our business gets treated differently than any other business, especially when I say that we're an industry of underdogs that employs underdogs, that gives people a second chance. Either way, look, we want to get as low as we possibly can.

Our position would be zero, but the big elephant in the room is the state. So anything the city council could do to influence the state to get out of the way, it's just not sustainable to pay 40% in tax. Also, I'd like to touch on the live scan issue. One of the things that I'm super passionate about this industry that's really cool, it's a second chance industry. We have so many people that are second chance people. I stand here before you today as a second chance person, right? And at the end of the day, live scanning is just eliminating people that are really good.

But we have a girl that was just eliminated through the live scam process, and she's a great employee. We're moving her from one store to another. We're going to move her to another store. And you could have guys that just roofied somebody in a bar a month ago, and they don't have to go through a live scam process. So it doesn't make any sense. It delays hiring. There's all sorts of negativity out of it. I would just say this on the tax issue. It's urgent. It's imperative. There's blood in the street. People are going out of business. in five or six months, the industry is not going to look the same. So we urge council.

We just want equity. We just want to be treated fairly like any other business to get the taxes as close to zero as possible. Thank you.

Thank you. Our last in-person speaker is Tatev Oganian.

Good evening. Thank you, council members and staff members. I am here on behalf of the Oganian Agency. We're a business law agency specializing in building compliant legal cannabis businesses from seed to sale of all license types here in the city. We applaud the city's efforts to propose changes to its local cannabis ordinance and we agree that the city has a compelling interest in ensuring cannabis is not used here illicitly. Our recommendations fall into three priorities. Number one, lower the retail tax rate up to 4%. The city should

also consider creating a program that allows retail operators to receive a credit up to a certain amount for donations to 501c3 nonprofits located in the City of Santa Ana or the County of Orange. This would encourage compliance with the city's community benefit regulations. We already have a few nonprofits here in the city ready to participate. Number two, address the needs of existing operators, retain the retail cap at this time, and allow the pending licenses to begin operating. Instead, allow the existing retailers to activate a consumption lounge

in a new location in the city, while retaining a retail facility in a separate location. Allowing a consumption lounge to operate under a retail license at a different location would prevent existing retailers from having to relocate. It would also broaden the range of venues that would be suitable for consumption lounges such as coffee shops since most cannabis businesses right now are located in very industrial areas where most customers would not want to frequent. Number two, number three, excuse me, finally, remove all duplicative and burdensome

regulations across the board, remove all application badge and life scan requirements for employees at the local level to align with state law which all already requires owners to go through that process. We hope the city will partner with experienced cannabis operators and stakeholders in the city of Santa Hanna who have first-hand knowledge and experience and continue to contribute to the community. Thank you so much council members and staff.

Thank you for those comments. That was our last in-person speaker. I'm going to go ahead and now ask the clerk staff to see if there's anybody online or on the phone that wishes to address us on this item.

Yes, Mayor, there are callers in the queue.

Speakers on the queue may provide their comments only on items listed on the special city council meeting agenda. When unmuted, please announce your name, ward, or neighborhood that you reside within the City of Santa Ana for the record. To request to speak, dial star 9 from your phone or select raised hand from Zoom now. Before unmuting callers, I would like to begin by reporting the following summary of emails provided as of today. Item 1, Cannabis Code Update, 9 Santa Ana Business Organizations provided input on changes to tax rate. Item 2, Police Oversight Commission, 5 Santa Ana Business Organizations provided proposed

ordinance language for establishing Oversight Commission speakers on the queue may I please ask if you are here to speak on item 2 please lower your hand all others please remain with your hand up thank you zoom ID Amy Mason select the microphone icon to unmute from your device and proceed with your comment you have three minutes good evening honorable council and staff i'm amy mason from unrivaled brands we operate dispensaries the spot and people's and lords four and six respectively

i do wish i was there i'm unfortunately at home with covet so forgive me um i've had the opportunity to meet with many if not all of you as both as a founding member and vice president of the ocaa and and a local dispensary operator. I'm very appreciative of your hard work and willingness to engage on these topics. I'm asking you all today to do what you have the capacity and wherewithal to do on the dais on August 2nd at the city council meeting. Please bifurcate the tax discussion and the ordinance and address taxes separately and immediately. As the operator of approximately 25%

of all legal cannabis sales in the city of Santa Ana, I implore you to add quickly. Our businesses and industry are struggling between the continued illicit sales, the economy, inflation, shrinking disposable income, and bottoming of the flower market. We are not effectively able to invest back in our businesses. To be clear, and despite what many believe, our stores, after 50% product costs, nearly 40% taxes, and the balance to overhead, including payroll and security, we at best, and only when things are good, see maybe five cents of every dollar we bring in. That slim margin is what we use as reinvestment into our business.

And while it's been acceptable for companies like mine to operate at a deficit with the expectation of federal legalization, and that would be opening up the borders, it's no longer acceptable. The capital markets have dried up and investors are gone. So our businesses are no longer sustainable. Additionally, cannabis consumers are dealing with the inflation and streaking wallets and have had to make hard choices. And if they can save a few dollars by shopping in other cities, such as Long Beach, or even buying from the illicit market, they've communicated this as much to us.

And it's reflected in higher than normal attrition at our stores. We believe that we can slow this down and attract more guests, in part if you were able to bring the retail taxes down to at least five percent the reality is that across the industry tax burdens and our businesses have become untenable and particularly for the supply chain santa anna's current tax rate is actually driving business out of the city we've provided you with both background and case studies on how reducing taxes will drive tax revenue to the city we believe the reduction will ultimately result in existing businesses flourishing and new cannabis

this business is moving in. Santa Ana can retain its riceful place as the leader in cannabis in California. 15 seconds. Pennies matter to our consumers and to us. In closing, thank you for your judiciousness. We ask that you address tax next Tuesday's meeting and demonstrate your care and nurturing to the businesses who've provided. Thank you.

zoom id chispa select the microphone icon to unmute from your device and proceed with your comment you have three minutes uh good evening mr mayor and members of the council i wanted to speak briefly in support of ufcw's proposal like when it comes to making changes to the marijuana like Texas. I think like for us at Chispa, you know, we were here just a couple of weeks ago, like speaking on the budget. And I think like one of the things that's been, you know, like very like recurring is how much funding for youth programs comes from marijuana taxes.

We were able to sit through the presentation that UFCW held a couple of weeks back. And I think if there are going to be changes to the taxes on marijuana sales, we believe that their proposal is a responsible way of ensuring that tax breaks for different companies are directly tied to changes to actions that benefit the workers. especially when it comes to making tax break eligibility for reaching 40% local hiring at goal,

we believe is actually a very important proposal considering how much of the workforce in this industry is young people. And it's young people between the ages of 21 up to their 30s. And so we're fully in support of UFCW's proposal.

Zoom ID Tim Johnson, select the microphone icon to unmute from your device and proceed with your comment. You have three minutes.

Hi, good evening, this is Tim Johnson, resident of Ward 3. First, thank you, Mayor Rotem Becerra for recommending the staff presentation take place prior to public comments this evening. As a member of the public, there was no dissemination of the staff presentation with the agenda. So we did not have the information prior to now other than reading public correspondence, which was quite helpful. I respectfully request that draft presentations be provided to the public in order to increase transparency, especially for members of the community that may not be connected as others. By the way, providing these presentations

should also happen with other council agenda items also. So with the item at hand, having an 8% to 5% drop in retail cannabis rate and 6% to 1% rate on supply side activities is a quite large decrease in raw dollars. I don't believe that we have the information to determine this right now, or at least it wasn't provided this evening in the staff presentation, but those raw amounts are likely quite large. The city is trying to do its best and prepare for the sunset of major X years in advance. And yet we are here right now, considering a drastic reduction of tax revenue in a matter of weeks.

Now I'm generally in favor of reduction of tax burden. However, we have to prepare for it in the public and our council needs to know what the raw dollar amounts would be on any proposed tax reductions to make qualified decisions. Additionally, we have to know what the impact will be on services provided to our residents. I'm concerned that this information has not been provided to the council or the public. A reduction in tax collections will result in reduction services, it is how city government works. Quite possibly those services provided to youth and enforcement with the reduction in cannabis revenue.

Further, I suggest that we have the tax rates for any other cities in the areas

either in effect or being proposed, being considered and disseminated to the council and the public. I urge you to make an advance decision on what service reductions will be made with any reductions in tax collections so that all residents and businesses will know what this will look like again i'm in favor of reducing the burden on our businesses but we must do so with full information as some have said tonight if we reduce the tax it may create additional revenue due to expanding of the base or in other words increasing of revenue that the tax is based on

as a cpa i certainly understand that concept having a reduction from six percent to one percent Now supply side business is a huge change though. Revenue will have to increase drastically to make up the difference. Reduced tax rates can be a good thing though in driving revenue, but there needs to be some guarantees that overall revenue will not be reduced as other speakers have implied. If businesses truly believe overall revenue will increase, then maybe possibly consider a rebate program that can be successful or even possibly a special assessment regime that makes up any revenue shortfalls in a trailing year.

but this should not happen if what businesses are saying will happen if we have a 1% increase. Revenue would be increasing. Lower taxes can generally be a good thing and will likely increase revenue, but the magnitude of such increase is always unknown. Temporary program reduced taxes-May also be a concept to consider. Appreciate your attention this evening and best of luck, thank you.

Zoom ID, Candace, select the microphone icon to unmute from your device and proceed with your comment. You have three minutes. Hello, honorable mayor, council and staff. Thank you for arranging the study session today on the proposed changes to the cannabis ordinance. I'm the founder and board chair of Orange County Normal, the longest established cannabis education and advocacy organization, Orange County. There are many important changes that are being discussed today, but I wanna speak on two. The city has benefited greatly from the cannabis sales tax. Just last year, you collected $20 million

and were able to spend that on valuable community services. The city council must acknowledge that your captive market of legal cannabis consumers is going to end very soon. And residents from across the county will have more affordable markets to choose from. I implore you to lower the retail sales tax in Santa Ana now before we lose our customers to other cities. Coast to Mesa will be at least 2.5% less than Santa Ana and Huntington Beach will at least be 3.5% less than Santa Ana cannabis. You may think that a dollar or two will not change the buyer pattern of cannabis consumer and patients, but as the community outreach director

at Pharmacy Santa Ana, I'm seeing every day that customers are selecting products based on a one or $2 difference. And I'm certain that lower tax rates in other cities will compel them to shop otherwise. Some stakeholders in the cannabis space are overwhelmed by the number of issues being discussed and wanna prioritize certain changes and leave others on the table for future. But a change to the retail tax cannot wait and is gonna significantly impact the city if not. I'm worried about a drop in business once these cities are to open. I'm worried about having to let go of our employees. I'm worried about Santa Ana losing its grip

on the cannabis industry. And I'm worried about having overall revenue drop and consequently the tax revenue is now as well. The time is now to act. We have to do something. Otherwise we'll lose these customers and they may not come back to Santa Ana. The second issue that I wanna raise is reduction of the sensitive use buffer and adding five more dispensaries into the city. As the campaign manager for Measure CC, we conducted poll surveys after people voted and found out that a great number of voters chose the city's ballot measure based on the setback.

That was the number one reason that they chose the city's measure and also the lower number of dispensaries. So I do not think that the residents want the setback changed. I don't think that they want more dispensaries. and as a working a dispensary we see that every time a new dispensary opens revenue drops so we're not bringing more revenue in by having more dispensaries we're just diluting the market thank you for your time and consideration

zoom ID Vanessa select the microphone icon to unmute from your device and proceed with your comment you have three minutes

Okay. Good afternoon, city council members. I'm Vanessa Montiano, a proud Santa Ana native first generation student with a bachelor's degree from Chapman university and master's degree from UC Irvine. And I live in ward three. I'm also a biologist cannabis for conservation. The first and only federally exempt nonprofit addressing conservation issues in the cannabis industry. above all else i am a protector and advocate for wildlife i am here today representing their voice it is a fallacy that increasing access to regulated cannabis will increase the cell

and use of cannabis that cell and use is already prevalent through the unregulated market often at the expense of both the environment and the workers of those unregulated operations This is not an opinion, but rather a fact supported by data. A fair and just regulatory market with increased access to regulated cannabis creates a safer industry for wildlife and for consumers. It helps protect precious water resources, habitat for special status species, and overall ecosystem stability. Education about adaptive wildlife conservation and management and regenerative farming can be

made further available to farmers and consumers through increased regulated access and allows for improved and informed choices. Additionally excessive taxation dissuades consumers of cannabis to purchase product through the regulated market and actually encourages and drives consumers to to purchase less expensive product, which in this depressed market can only be profitable if produced en masse, leading to extensive use of toxic pesticides, diverting streams and creeks, and the intentional poisoning and killing of wildlife that may interfere with the success of the crop. As our elected public officials,

it is your duty to make an informed choice for your constituents supported by science, and I'd urge you to do so. So thank you all for your time and for hearing my position.

Caller whose phone number ends in 010.

Please dial star six from your phone to unmute from your device and proceed with your comment. You have three minutes. Hello, this is Victor Mendez. Can you hear me? Yes. Okay, please begin mic. Before I begin, I'm commenting on both one and two. So I got really confused on this process. Is there a problem with that? No, no, not at all. Thank you. Once the queue opens for item two, just go ahead and raise your hand then. Thank you. Okay, just want me to comment on item one then. I'm just trying to understand what you'd like to hear right this time. Yes, just item one. Okay, I'm gonna comment on item one. What did you say again?

I've never done this before. An item, then how do I get back in queue for item two? I'll go ahead and lower your hand after you're done with comment one, but once the public comments open up for item two, go ahead and raise your hand again and then you'll get to speak. Thank you.

Okay, all right, thank you. Anyway, just very brief on the cannabis tax. You know, there's a lot of discussion and frankly, I don't have a formative opinion on how low or where this should all go in terms of percentage. I can only state that as many of you know, that during the budget process, you know, I personally advocated against using code enforcement staff and law enforcement expenditures out of the cannabis tax revenue, which was intended for our parks and our children. So if somehow we lower this and we have to cut service, I really see it not necessarily the reduction of service,

but really reverting to the original 10 of the law and what the voters voted for, that is parks and recreation. And with that amount and with that focus, we'll just simply go with where the revenue takes us. But it's obviously that the world of competition that's at Santa Ana and it just, it is what it is. I mean, people saw this as other cities have seen this as a revenue source. They've taken action, they've gotten on the ballot, the voters are approved. I think Cunningham Beach just approved it this past spring. So they're going to be the new kid on the block. And it's no longer business as usual.

You have to reevaluate like any other business. And they have to reevaluate their expenditures, their overhead, and how they go about doing business. And how that translates into a tax and what those taxes can do for the community. But the days I think of just using this as kind of a cash cow and flooding it with all kinds of overhead have really got to be over. It's got to be very lean. and if we're not lean, we're gonna lose it all, at least according to some of these industry experts, which I'm tend to believe. But again, I don't know exactly how far or low you should go, but it's obviously that the days of business as usual,

as seen as is, and having high overhead of legal staff, code enforcement, and paying for capital expenditures like body cams really need to be over or seriously rethought or you won't have any tax at all for these businesses as well. Thank you.

Mayor, that was it.

Great. Thank you. So let me just, before I bring it back to Council for questions and comments, and if staff wants to chime in with anything additional that they may want to augment to their presentation, I just want to answer some of the, or respond to some of the comments that were made. This is a publicly noticed work study session. So this is not meeting in the dark behind closed doors. We're on camera. This is televised. It's being recorded. And this is at the response of the operators. So we're doing this, and I really want to extend my gratitude to staff and my colleagues

because we're all here on a Friday afternoon, and some of our employees have some family issues and relatives that are not well, but they're here just so we can expedite this for you because we didn't want to bring it to you without having heard from you and also hearing from staff. So I'm really offended when people say this is not transparent. It's not, you know, it's somehow, you know, being elusive or trying to hide something. Those comments don't help, and I can tell you they're very reckless. So I want to thank you all for coming here. There are no decisions going to be made tonight.

we're just giving you an opportunity to hear from you, right? And so you can hear from our staff. So those of you who make irresponsible comments, it doesn't help this process. So thank you to staff for spending your Friday afternoon and to colleagues and everybody who's here. But this is our way of trying to accommodate additional information so we can make responsible decisions. This will be agendized sooner rather than later, but it'll be done with your input. So that's the whole objective tonight, not to hide anything. And nobody wants to be here on a Friday afternoon, but this is something that we're doing

to make sure we accommodate everybody's comment. So in any event...

Go ahead, Mayor Pro Tems.

Phil BacerraItem 2

Thank you for your comments. And I just want to add to that, for staff to clarify for us, are we taking any votes tonight? Are any final decisions being made tonight?

Thank you, Mayor Pro Temp for the clarification. No, we're not. We're just seeking some input and direction, but no decisions are being made. And I will take you up on the offer, Mayor, because some of the items have already been written in the ordinance that were mentioned by the speaker. So if we could just provide a quick clarification that might speed the conversation along.

Please.

Thank you, Mayor. And I'll leave. You can. So at this point, what we did was we assimilated and compiled all of the comments that we received from the council members from the community from the industry and stakeholders and compile that into a list oh thank you and for the clarification of the speakers um i just want to brought up a few issues so a few of the issues that they have brought up i will be going over where actually we do have agreement and we will make the changes in alignment with some of the recommendations

In terms of we keep hearing the comment about there's a meeting of this item or kind of discussion of this item on August 2nd. The city has never discussed any hearing date or meeting dates. And so there is a meeting, but there is no discussion of this item on the August 2nd agenda. Any future discussion will have to be agendized and publicly noticed.

Is that it? I thought there were some issues. I think what the city manager wanted you to do is go through the items that I mentioned that are, you know, we're supportive of so that needs, doesn't really need much discussion because I think staff's recommendation unless it's contrary to what the council wants to see is consistent

with what the public is requesting. So those items include live scan requirements for employees. We are recommending the removal of that and to be consistent with the state to only address it for the property owner, I'm sorry, business owner and managers. In terms of looking at allowing for donation under SB 34, we are looking at supporting those type of regulatory changes to our ordinance, and we'll be working to address that. Relating to bona fide labor unions, in terms of defining that, we are agreeable and believe that that should be done within our ordinance.

So those are some of the few items that we actually do have agreement, and I have a whole list. If you want to, I can go over all of that now in terms of where we do have agreements. Relocation of cannabis retail store. I believe there are some area of concerns by organization, but overall, we have consensus from the council that relocation is something that we should permit. requirement, requiring and pending of, I'm sorry, sunsetting of the Measure BB wait list of the five existing licenses.

There has been a long wait and we are, we did receive consensus on allowing for us to come up with a process and procedure to fairly address those on the waiting list but sunset it so that we don't have this outstanding waiting list continuing to go on further. of moving forward. In terms of temporary events and festival, again, there we also have agreement that the types of events that we have heard from the industry that there are different sizes and types of event that should be allowable at the onsite and something that can be allowed to go on. And we are looking to support that regulations,

including festivals that can potentially be hosted by jointly with the city or organizations, but something that would be akin to a festival that would highlight cannabis.

In addition to that, there are some administrative as well as financial amendments that we will move forward and we have directions on. So those summarize the areas where we do have agreement and we won't need to discuss tonight.

And we do have a list that then also addresses topics that we need directions on. So at your pleasure, we can start going with that list.

Let me just make a quick comment, then I'll go to Mayor Pro Tem, and I'll go to everybody who has some comments and questions. So even though there are some staff recommendations that are consistent with what the operators or the operators in the city want, there may be some additional comments from the council that may adjust those and we may need some additional information. So really I guess what I'm trying to get to is that no decisions will be made tonight. This item will come back to us. We're just doing this so we can get this item before us sooner, right, because I've heard that we want to expedite this.

So to the extent that we will be hearing this again formally when we do take action, and it will probably take, is it a two reading process?

It is an ordinance process, so we will take a first and a second reading.

Got it. So we're going to have almost two additional opportunities to hear this, but we wanted to take this time just to kind of give you some direction as well and for you to hear from the public. So let me now bring it back to the Council and just get comments and any questions that they may have on this ordinance as well. And as you know, we have four members of the council that are with us virtually, so I'll be calling on them as well. Mayor Pro Tem.

Phil BacerraItem 2

Thank you, Mayor. I have a question on one of the items that you have mentioned that was resolved, but if I may suggest perhaps maybe kind of what we've done with some of our other big items where we have multiple components that you want input from the council, maybe perhaps we can have staff, you know, go round robin with us and say, okay, here's item one, what's your thoughts, go down the row, item two, go down, because if not, I think we'll probably just start talking all over the place. So that's just my suggestion on that. But my question in regards to the SB 34 component.

Phil BacerraItem 2

So I just, I agree we want to resolve it, but I just want to understand how you're going to resolve that. In other words, what's the edits that are going to take place to amend that language?

It's already part of the ordinance that's been drafted. And what I'll do is I'll leave, will assist with bringing that information up and we can provide that information for you. But it's a part of the existing ordinance for us to address that issue.

Phil BacerraItem 2

Could you clarify just for all of us here how you're going to amend it?

So one of the provisions is because it is right now only medicinal, businesses that can be permitted to address those types of donations and provisions, we're looking to allow both retailers of adult use and medicinal to be able to provide those benefits under SB 34.

Phil BacerraItem 2

So you're going to specifically list it, even though the term adult use is in there, you're going to specifically list that it would be allowed to abide by the provisions of SB 35. Correct.

Okay. Correct.

Phil BacerraItem 2

I just wanted to make sure that that was the case. Okay. Thank you.

Well, let me, does anybody want to go first and go ahead and recite their, you know, their support or their opposition or any questions to anything here?

Phil BacerraItem 2

Mayor, I was thinking maybe if staff wants to take each component that they want input on, and then we can just keep going around on that.

So each item, so how many items do we have that we're going to have to look at? It looks like about 12 items, right? So, or 15. It's a lot of round robins.

Phil BacerraItem 2

I just remember during the charter amendments, we were confusing staff well.

Five, which is some items. So five main characters.

And the way we have formatted is that if you are agreeable to the primary category, then there will be a drop-down menu of options. And if there's not consensus, then it just stops there.

You know, in a way, I think, I almost feel like, you know, if a council member could just say, look, I'm with staff on these recommendations and, you know, on the ones that they need clarification on or they need some additional direction, because it looks like you narrowed down your presentation to ones that appear to be consistent with what you've heard from the industry, and you just need some direction from staff on these items with respect to taxes for the supply side, the retail, and then the community benefits. That's the way I read your presentation.

But maybe if a council member says, you know, I'm good with staff's recommendation with the exception of, and that way we can kind of go through that, right? Anyways, let me do it that way. I want to give, you know, we have another work study session after this that's going to be as robust as this one, if not more. So I do want to give everybody an opportunity to at least tackle it this way.

Sonia R. CarvalhoItem 2

Mayor, could I suggest that we maybe just have staff read off the item and then only ask council members if they're not happy with it, if they have a comment. I mean, if they read off the item and you say, does anyone disagree, you would then know whether you have a majority or not. All right, let's go there. And then you could take the council input.

We'll take it item by item then.

Phil BacerraItem 2

Just real quick question. So it's slide 11 and 16. Those are the items that we're going to.

Actually we have a table that we'll bring up that will allow us to help that decision making process. Okay.

Phil BacerraItem 2

Thank you.

Sonia R. CarvalhoItem 2

You really don't have to vote. He just mentions the item and then if there's no comment on it that means you're good with it.

So the first item is to whether or not allow consumption lounges be permitted. And if it is permitted, should it be on-site or off-site? And to extend the hours from 11 to 12 as the closing hours.

Any comments on this?

Any opposition? Let me see if there's anybody. Go ahead.

On the consumption, is it just the gummies or is it about the smoking? And is the consumption going to be like a lobby type setting or is it contained somewhere else within the facility?

So what we're recommending is looking at a consumption allowance that will be allowable on-site with an existing retail license. It would include allowable consumption outdoor with the right air cleaning equipment. And then also consumption would include smoking, ingestion. So that's really primarily what onsite consumption would mean is smoking and consumption, like you said, gummies.

Any other questions, Council Member Mendoza?

Just about ventilation on the smoke.

Is there a requirement to have certain amount of ventilating equipment to ensure that the surrounding facilities don't get any of this

smoke? Great question. Yes, we will work on with industry on best practices for air collection system for cleaning and filtering the air before it get exhaust and dispersed into the air.

Okay, I would support this consumption lounge then as long as all precautions are taken.

Great. And what I'll do is because, you know, we have council members that are not here, I'm going to call on them first because I can see the council members here. So I'm going to call on those that we can't see. So I think council member Mendoza gave her comment on this item. Council member Peñalosa.

David PenalozaItem 2

Thank you, Mayor. The question I had, Min, and thank you for the presentation, was more in regards to what kind of priority are we going to be giving to currently the current operators that we already have in town, approximately 30 of them. I know that the idea of a consumption lounge could potentially be very lucrative to a lot of these businesses and the industry as a whole. Are we going to allow for or give priority to the current ones that are already open to see how they could best operate a consumption lounge within their facility?

David PenalozaItem 2

Because I know that that would be now an added footprint, potentially extension of their building. or the warehouse they're in versus prioritizing a new, let's say, a new business entity to come into town, aside from the ones that have already been here for years. Is there any, I mean, how are we looking to do that? Is it lottery system? I mean, I'm not sure how we move forward with that. Can you, do you guys have any idea on that, Ann?

Yes, we do. So every existing license that is permissible and currently operating a dispensary operations in our city will be eligible for a lounge.

David PenalozaItem 2

So all of them that are?

As long as they're in compliance with our regulations, they will be permissible to have a lounge. So potentially every dispensary license, all 30, could potentially have a lounge component in it. But what we have heard back from the industry is that not necessarily all dispensary necessary need a lounge. They would be looking forward to some type of on-site event that would allow for different type of instructional consumption. And as part of our recommendation is that we already have consensus on is to allow for these type of events to occur. So I hope that answers your question.

No outsider. No outsider. I also want to know outsider will be permitted. Only existing licenses.

David PenalozaItem 2

Okay. That's where I'm concerned is that we're going to, you know, be opening up, you know, for potential festivals or consumption. And then we're going to have just an influx of outside businesses coming into town wanting to partake in this. The other thing that I am also just kind of keep thinking about is, is there going to be an additional tax added to the consumption on site?

David PenalozaItem 2

because I know that potential consumption on site could potentially come with additional unintended consequences.

David PenalozaItem 2

Are we looking into that or is it just allowing whatever the retail tax is of that product, that's it? Or is it going to be like an additional tax edit, I guess is what I'm asking.

It is not going to be an additional tax. It's based on the existing retail tax. It's only to be consumed on site. However, we are recommending that the consumption tax and the festival and a temporary event consumption tax be separated into a revenue stream so that it can be identified separately from the retail stream for offsite consumption.

David PenalozaItem 2

Okay. And when it comes to the buffer, the reduction of the buffer, what are you looking at?

Sonia R. CarvalhoItem 2

May I, council member, just say something? Just wanna ask you this. I think what we were hoping to do today was to get your broad strokes on whether you just generally supported these things, then we can draft, and then if you have specific questions, we will be able to have that input when you actually look at the ordinance. I mean, unless you want to have this as your opportunity to just ask a lot of questions. But I think if we're going to get through this, it would be really helpful to at least get these broad strokes. And then have you come back and ask each question.

David PenalozaItem 2

Okay. Thank you for that, Madam City Attorney. I guess, you know, it's either we have, you know, a million questions today or we do it at an official City Council meeting. I see because the way I'm looking at the consumption lounges, if the buffer radius is going to remain at 1000 feet, fantastic. I'm okay with it. But if we're looking to reduce that to 500 feet and allow the consumption lounges to now be within the 500 feet buffer of a commercial area or school. I mean, I think that changes things for me. So I guess it's just getting clarity on how,

David PenalozaItem 2

but I guess overall I am supportive of looking at, allowing consumption lounges in the city. So a short answer, yes. Thank you, Council Member. Depending on that buffer.

Thank you. That was very clear. That last comment I think was very helpful. Thank you for that. Let me go to Council Member Lopez.

Thank you, Mayor Sarmantel. and thank you for your guidance to the attorney. So big picture for me, men, there are four boxes that I've seen your presentation that you need direction from the council members. So I'm very supportive of having, making sure that whatever you bring back to us has a community benefits obligation, has a social equity obligation written in the upcoming ordinance that we will see and discuss publicly.

I'm supportive of the additional storefronts.

I have a question, I guess similar to Council Member Peñalosa in terms of the cannabis zone map. I do see that direction or what staff has written in the PowerPoint is to reduce it from 1000 feet to 600 feet and I don't know at this moment if I can support that. I would just have to have more conversations with staff about why that is.

Thank you council member. Council member Hernandez.

Johnathan Ryan HernandezItem 2

Yes, thank you mayor Sarmiento. Please excuse my voice as I'm in the process of recovering from COVID. But I am supportive of what staff have brought forward. I would like to see the live scan process removed. I would like to see us support our veterans by echoing and supporting what some of the speakers presented earlier about making cannabis accessible to our veterans. I think that that is something we must absolutely prioritize.

Johnathan Ryan HernandezItem 2

Preliminarily, I am tentative in the buffer. I think I would need to learn more about it as well. I would be interested to see what staff can share. So preliminarily, I'm undecided. I would need more information on that. In listening to some of the requests from some of the stakeholders, I just wanted to share, I am supportive of the community benefits agreement. I am completely supportive of us having a robust discussion with stakeholders, labor, and community on social equity.

Johnathan Ryan HernandezItem 2

I think that taking into account that Latinos make up over 70% of the workforce in cannabis, we need to start looking at how do we also make up a larger demographic of ownership, management. And I think having the conversation of social equity brings everybody to the table. So that's important to me. Something that I also want to echo is some of the cannabis operators shared that cities are starting to compete with Santa Ana. We were at the forefront of cannabis, first city in Orange County.

Johnathan Ryan HernandezItem 2

I think in order for us to stay competitive as cannabis starts to grow in the county, I am supportive of decreasing the distribution rate from 6%. I'm open to talking with staff and my colleagues. If 1% is a number that has been fruitful for Long Beach, I would be interested in looking at the data. and I think if the data supports that there would be an increase for the city of Santa Ana, that means there's an increase in youth services and in overall just services that we can provide to the community. And if that is the case, I'm supportive of going from 6% to 1% for

Johnathan Ryan HernandezItem 2

distribution and manufacturing. That concludes my comments, Mr. Mayor.

Thank you, council member and Madam city manager. I really like those comments because Because when you're silent on everything else, it means that you're okay, right? To the extent we go one by one, this is going to be a very long, drawn-out thing. So if every council member could just focus in on those issues that they have questions with, it makes it much simpler. But look, if we can go through this as quickly as we can, I think that was a lot more efficient. I think you got clear direction on the issues from the council members that just spoke, on, you know, especially the last two, they were a little bit more comprehensive.

So I assume where they're silent, they're fairly receptive.

I agree, Mayor, and thank you for that clarification. Also, I want to remind the individual council members, if you have detailed questions, staff will make themselves available to meet with you one-on-one and go through everything in great detail. We are really just looking for overarching. Do you want us to bring forth a recommendation on these components? And if you're supportive of it, that's all we need to know.

Thank you very much. Let me go to Councilmember Fan.

David PenalozaItem 2

And point of clarification, Mayor Sarmiento, the reason why I only talked about the consumption lounge side was because that's what men had asked about if we were okay with this or that. And I thought we were going to go over each topic. But I mean, if we can, can we go over the rest

then? Is this? Yeah, I think so. And no, council member, it wasn't, you know, I think, I guess I disagreed with the way going one through, you know, each one, because there's so many questions embedded in each item and if we do that we're going to be here if you know there were 15 items with sub set items I just think if we want to focus in on those that we really have some issues with we flesh them out here those that you know we still need some additional you know conversations on staff will be available but no it wasn't at all your fault I kind of wanted to go through it this

other way but then you know you know some some said let's go through it line item by line item and it became pretty long so no that I mean I think there was just misdirection or some confusion at the front end. So if there's anything else, council member,

David PenalozaItem 2

please go ahead. So yeah, all I'll need is about a minute. So I do agree with what my colleague, council member Hernandez said. I do would like to see the live scan removed as a requirement from a form of employment to hire somebody because in speaking with many of the cannabis shop owners, they said it themselves, look, we're, we're a business owner and we're not going to be out there trying to hire people that would hinder our business or be dangerous in our business. And there are a lot of people that cannot get a job in the industry because of prior offenses related to the industry.

David PenalozaItem 2

So I don't believe that having a live scan is necessary. It would be more efficient for the industry to hire, especially members of our community and our city, in their industry. So definitely supportive of that. I would like to see a the pay more attention to that buffer I'm not comfortable reducing it from a thousand because there are a number of businesses that have been here in town that are in in deep into industrial areas that have rooted themselves in our community and invested millions of dollars in our in our city as well to have their shop where it's currently at if we now reduce this buffer

David PenalozaItem 2

it's going to open up the door for new businesses to come in and be in a better, more lucrative location in the city that can allow them to have a leg up on the industry, on the businesses that are already in town. So that is it, what I have for now, Mayor, on those three things. And I'm

sure more comments will come up. Thank you. Excellent. Thank you. Those are great comments. And yeah, if there's anything that you see you need to add, please just go ahead and just let the clerk know so I can call on you. Let me maybe go back to Council Member Mendoza if there's anything she wants to add on sort of the other issues in addition to the on-site consumption.

Thank you, Mayor Sarmiento. No, I'm fine. I want to explore that added 600-foot boundaries. I would like to explore what, see what the, the consequences or the negatives of that. I mean, could the existing facilities expand if they wanted to some way, maybe into that, they can make that their consumption lounge. So I'm willing to listen to whatever is going to be beneficial

and within the ordinance for the consumers and the public and the other businesses in the area. And I generally am in agreement also to reduce the tax to a percentage that's going to keep our businesses here and continue to prosper here at the residence with that revenue that will be coming in because I certainly don't want to lose any businesses. I want to keep them here. I don't want them to go outside of the city of Santa Ana. We've seen the benefit.

So I'd like to see about reducing that to the 1%. And that was it. Everything else I'm in agreement with.

Excellent. Thank you for those comments, Council Member Mendoza.

Now let me bring it back to the Council Members that are here present. Let me start with Council Member Fan.

Thai Viet PhanItem 2

Thank you, Mayor. Thank you to staff and everyone who's here. I actually did read the draft ordinance as well as Mr. Shae's draft ordinance as well as UFCW's edited draft ordinance. So I read all of that. So I do have a number of comments. First regarding outdoor smoking, I do understand that the, I guess the Excel sheet says that to proceed I do not support this item. Recently we did talk about how we are banning flavored tobacco because we are concerned about obviously the health of young children here in the city. Moreover we do understand that the city of Santa Ana has high rates of asthma. I am one

Thai Viet PhanItem 2

person in the city who was raised here who has a high rate of asthma relating to smoke inhalation. The state of California has banned indoor smoking and in many different areas although those laws are related to tobacco smoking I would not be surprised if that might one day extend to other types of smoking. So maybe there are some types of filters and whatnot that might help, but I would be highly surprised if it really does eliminate all odors outdoors related to outdoor smoking. However, I am very supportive of indoor consumption lounges.

Thai Viet PhanItem 2

The other thing I want to talk about, okay, so consumption lounges, I like it to be co-located at existing retailers. I really do like that we are finding ways to support our existing cannabis owners, businesses, and whatnot. But again, it would be limited to on-site consumption. I would like us to also look into the state of California also just passed a law that places the burden on bartenders to stop providing alcohol to patrons drinking alcohol there. When you are obviously taking an edible, those take a little bit longer to kick in.

Thai Viet PhanItem 2

A lot of people don't understand what their limits are or might be first timers. I would like for us to look into how we would be able to successfully implement something like that, especially if it does take 30 minutes, an hour, whatever that might be, for something like that to kick in.

Thai Viet PhanItem 2

regarding the zone map I personally would prefer that we allow cannabis retail in any commercial area in the entire city although I do know that it might not be the most that most people would support that so in my case I'm okay with the 600 feet or a thousand feet buffer but I do want us to look into how we would ensure that existing businesses that had to comply with the more restrictive location requirements are not harmed by any new businesses that might come in. But with that, I am not particularly supportive of adding additional licenses at this time.

Thai Viet PhanItem 2

I do think that we are looking into expanding on-site consumption, festivals, events, and other types of business enterprises, and I'd like for us to see how that would go prior to expanding additional licenses. regarding supply side tax rates. I am, well, I took a lot of time talking to our Director of Finance, Director Downs, our planning team to look at what taxes would look like. And I can say I did receive not only early projections or estimates from our finance department,

Thai Viet PhanItem 2

I do know that folks from OCAA also provided what they believe are projections relating to lower taxes but increase business. And so a potential revenue reduction for some of this, you know, supply side could range in, you know, the low $700,000 to a million dollars per year. These are just really rough estimates. They don't take into account what would happen if we increase businesses, or excuse me, increase revenue in the city. But I do think it is important for us to be

Thai Viet PhanItem 2

nimble and flexible regarding our tax rate and looking at what the you know the industry is like so i am supportive of the one percent supply side tax rate i do also want to comment that a lot of folks brought up huntington beach and costa mesa first i'd like to reiterate that the city of santa ana thanks to staff has the most it's the most interesting way to apply for a retail license which is it's completely ministerial I don't know if any other places that do that like you said it's only one in the state of California what I do know is that the city of Costa Mesa still I think they adopted cannabis a couple

Thai Viet PhanItem 2

years ago and they still have really nothing operating for operating in the pipeline right so they're still pending and continuing their CUP hearings and those are subject to appeals. So I do understand the concerns for the businesses but I do also want to say that you know these are not up and running yet. Similar with Huntington Beach their ballot measure did not pass and they're gonna try again for a second bite at the apple. When it comes to

Thai Viet PhanItem 2

retail tax rates I really liked I will I am interested in lowering the tax rate However, I do also think that the comments made by UFCW are interesting to me. I think that one of the strongest arguments to me is that this is a burgeoning industry. Yes, it's been around for a little while, but there are still a lot of room to grow. Do we want it to be a high-paying, well-skilled industry, or do we want it to be another retail job?

Thai Viet PhanItem 2

And so that is something that is interesting to me and to look at the social equity provision and tax rebate. However, I would like to see that as potentially a separate program. So I am interested in lowering the tax rate potentially to maybe 7% or 6% with an additional tax rebate program that brings in the social equity portion and local hire portion to further lower the tax rate. And I want to make sure that when we talk about lowering the tax rate on the business side, I understand.

Thai Viet PhanItem 2

I took my mom to buy some cannabis, some patches and whatnot for her pains. And when we paid for it, she thought they overcharged me because the tax rate was so much higher than what she was used to. And so I think it's important that to encourage more customers to come to the city of Santa Santa Ana, we do need to lower the tax rate from the purchaser side. But as to the retailers to support and assist you and to encourage more business in the city, I think that if you are a good actor and if you're hiring locally and you're hiring good paying workers, then there might be some benefits to that too, especially if they're

Thai Viet PhanItem 2

Santa Ana residents. As to just Madam City Attorney, for a kind of a procedural matter, and I think Director Tai had brought this up to you too, there are some numbers in the draft ordinance, for example, the number of cannabis licenses, the number of annual events and festivals, as well as the tax rate. I'd like for us to change the language in the draft ordinance to say the City Council is empowered to adopt a resolution to adjust the annual number of

Thai Viet PhanItem 2

events or the tax rate or the licenses authorized via resolution that way in the future if you say you know We look at it and say 7% is too high You're not looking at two readings plus a 30-day wait But also, I might say 7% is too low and we want to increase it. So that gives flexibility to the city council to be more responsive to not only the industry but also other advocates. So I wanted to make sure that we had that as a procedural matter.

Thai Viet PhanItem 2

Some other items that I'd like for you to address in the ordinance is in the draft ordinance we talk about obtaining local construction materials. I do understand that there were some concerns from industry regarding the cost I would just like to see what we can do and look into whether it's true

Thai Viet PhanItem 2

whether it is increasing the cost of construction and build out to an infeasible amount there are some requirements to mandate healthy living incentives like gym memberships and whatnot I don't think that's necessary Let's focus on paying the workers rather than giving them a 24-hour fitness account. You know, if it's $30, I'd rather the $30 be going to pay their payroll. I do like the opt-in community benefit program.

Thai Viet PhanItem 2

I...

Thai Viet PhanItem 2

Sorry. Oh, and as to... I wanted to make sure that when we have the big festival events, that the city is the one that holds the 420 event or holds the big event of the year to work with our industry and work with retailers the city of Santa Ana is the Cabral Cannabis in Orange County and I would like for us to own it to celebrate it and to bring others into it so hopefully we can all agree on that and that the industry will come and work with us another comment is regarding whether cannabis shops can be venues I'm not sure how I feel about that I don't

Thai Viet PhanItem 2

know what a definition of venue might be, whether they want to be able to bring in, say, performers or anything like that, but I do know it's a comment from the industry. I think it might be fun, but I'm also worried maybe they might need a special event permit for something like that. Next, there is some discretion in the draft ordinance allowing the chief of police to deny, I guess, an employee who applies. I don't know if that would change given no longer requiring live scan. Would it change? Okay. Then I won't have to comment on that. I would also like to see what we're doing regarding tax auditing and inspections.

Thai Viet PhanItem 2

I don't know what we're doing regarding that and whether we're ensuring that we are following those requirements to make sure that as we're changing and providing these benefits that we are also making sure that everyone's paying their fair share.

Thai Viet PhanItem 2

And those would be my comments for now. Thank you, Mayor.

Excellent. Thank you. Let me go to Mayor Pro Tem.

Phil BacerraItem 2

Thank you, Mayor. So to go through this list here, so on the additional retail storefronts, I do not support that. on the updated cannabis zoning map, the buffer. I also do not support that, although with the caveat that I know one of the concerns was in regards to if an existing licensed premise was to have a consumption lounge and for whatever reason, by adding that additional square footage, it would encroach beyond the buffer or into the buffer. I'd like you to consider a discretionary process just for that particular

Phil BacerraItem 2

portion. As Council Member Fan said, you know, we have a great process here in town where we have it done ministerially, which is why I would believe that Santa Ana is the cannabis capital for Orange County. But in this particular instance, trying to kind of thread the needle as a way to remedy this particular instance rather than just blindly expanding the radius, I'd rather have some discretion, especially because we're talking about proximity to sensitive uses, just like we would with alcohol and any other use application we'd want the community to know and to weigh in on that decision. Let's see.

Phil BacerraItem 2

On the financial amendments, so on the financial supply side, I agree with the 1% across the board on all the supply chain aspects. on the retail tax rates. Before I get into numbers, what I want to ask, Madam City Manager, maybe you can help me understand. I appreciate what UFCW proposed and this idea of incentive, not mandating, but incentive. If you're going to provide certain types of community benefits, you should be rewarded. That makes absolute sense. But in this particular instance, I'm

Phil BacerraItem 2

I'm a little concerned that if certain businesses take advantage of it and we tie it to a tax rate, we're now looking at different businesses with different tax rates. I mean, would that be fair to say?

If the proposal is to, yeah, do a tiered tax rate based on community benefits and equity items, that's how I would interpret it. And I don't believe staff would make a recommendation to do so, just to administer different tax rates at the same type of business, that would be very difficult. However, I believe they also mentioned a rebate as opposed to a tiered tax rate. That would be everybody would still maintain the same tax rate, what you decide it to be, but then there would be some type of a give back. Okay.

Phil BacerraItem 2

One thing I'd like to throw out for everybody to think about is maybe we tie the satisfaction of the community benefits to some of these provisions, such as what type of employees we hire. I think one of the proposals was to hire employees that were in census tracts where more than the majority of them were residents of a household that had income at or below 80% of the county median income, or if they hired 60% of their employees for full-time work, you know, schedule them for full-time work. Something along those lines. I like some of the things that UFCW was saying,

Phil BacerraItem 2

but I think rather than tie it to the taxes, maybe as we're talking about this requirement for community benefits, you know, as we talk about, say, with housing, we have the in-lieu fee. Well, maybe this is an in-lieu satisfaction of this particular requirement. So I'd be kind of curious to see what staff can come back with on that. So with the retail tax, I really think, I'm a firm believer that the lower rates will attract folks. And if we're trying to say that we're the leader, you know, I don't want to be a percentage higher than Costa Mesa, regardless of how bureaucratic or not bureaucratic their process is.

Phil BacerraItem 2

So I know the industry has been asking for five. I know we're possibly looking at six. I'd like to just say perhaps we go at either 5.75 or 5.5. I don't believe we're going to see a hit. I really don't. I think that the amount that we'll see come in, I think it will more than make it up. But one thing I'd like to add, and I thank Councilmember Fan, she was reading my mind on this, that I want to make sure, though, that we do have flexibility, because God forbid if we're wrong. And 5.5 or 5.75 is not the right rate. and we do have to increase to make sure that we're maintaining a certain level of income

Phil BacerraItem 2

coming in, I'd like to be able to have that flexibility. So perhaps having the tax rate done by resolution as we do with a lot of our other fees and rates in the city. So I would like to make sure we have that flexibility. I appreciate the attention being paid to the veterans and the SB34 language. And then as far as the events go, definitely want to see, again, Council Member Pham, thank you for saying this, the citywide event being handled by the city. I think one thing that we don't want to be accused of is being unfair and having certain

Phil BacerraItem 2

folks within the industry having a more prominent involvement with it. Because what we want to see, at least I would say what I would like to see, is that a citywide benefit benefits all of the industry stakeholders in Santa Ana in any way that it can. So I think the best way to do it is to have the city put that on. Other than that, those are my comments. So I just want to thank all of the folks that came today, both the industry stakeholders, UFCW and all the folks that called in. So thank you, everybody.

Thank you for those comments. I think we have Councilmember Hernandez's hand raised, but before we go to everybody's second set of comments, if there are any, let me go ahead and just provide mine. That way you have all seven of us, and that way that's all done. I'll begin with just saying thank you to all of you that have provided your remarks and comments even in advance of tonight's meeting, right? So I know that you've been in contact with staff, so you've sent emails, you've sent written communication and correspondence and met with some of us. So I appreciate you doing that advocacy and giving us, you know, your thoughts.

To staff, thank you for putting this together and, you know, again, spending this time with us so we can better understand this. I guess, you know, the only person that's been here since 2014 or 16 when we implemented this? 14, I guess, is me. So, you know, back then there wasn't a market. Like, literally back then there were no other cities with the exception of Long Beach that was getting sued in federal court because they made mistakes and stumbled right out of the gate. We were the ones who took this on. So we were the ones who were courageous enough because this was an unknown, completely untapped, unforeseen area of business.

And people said, it's going to fail, it's illegal, it's wrong, you guys are not going to do anything. Now, looking back in hindsight, we just got through a two-year pandemic where many cities were just devastated because of their economies. This was one of the industries that helped us get through. And if you see your industry, your work, your investment really helped us stay very steady. And our last budget was very strong. So I have to thank you for that because you stayed in business.

you did this and and you know we certainly had we took a risk you know my colleagues who were with me at that time took a risk but I think it was a risk that was well calculated and I think now in hindsight we are very glad that we took that risk and and so let me begin by just saying that and and say I'll begin with the ones that are very simple and very easy and just compliment you on I'm removing the live scans, so I'm very supportive of that.

On the relocation, I know that there was a specific store that was impacted by a condemnation project, a widening project, and there are going to be others, right? There will be some other government takes at some point that we don't see as foreseeable. To the extent that that happens, that's almost a force majeure clause, where nobody sees that. And if government is going to take your property, like the transit authority is going to be widening the 55 freeway, it's impacting a business. Look, that wasn't foreseeable. That business should be allowed to move. I'm not real supportive of just movement anywhere.

So when it comes to those, that's a very limited case. I'm very supportive of that movement. On the consumption lounges, I thought what some of my colleagues said about tying the consumption lounges to broadening the buffer, or excuse me, reducing the buffer from 1,000 to 600, that is a very interesting comment. I'm glad it was raised. I think a couple of council members raised it. I tend to agree that they have to be tied to one another just because I think it makes sense.

I'm very supportive of the community benefits and social equity. Some of the comments that were made by the representatives from UFCW I think make a lot of sense on that.

I do think when we're talking about hiring from those census tracts where you see people living below the poverty level, very low AMI, I would add not only that, but we should also try to benefit those businesses that look at people who've been convicted of possessory. crimes when it comes to cannabis. We saw that it's devastated a lot of people who, you know, back when it was illegal, have these on their records. If we talk about second chances like some people talked about, well, that is a way to provide second chances. Other cities do that.

So, you know, I think that's a good way to go. And on additional storefronts, I am of the opinion that we should increase those, but only to those on the wait list. And I believe there's only three if I'm not mistaken, or three to five or something. But whatever it is, I don't think we're prepared. I wouldn't be prepared to go beyond that because I do want these operators to succeed. And the more we increase the number of competition, competition is always strong, but let's strengthen the existing industry that we have right now before we open it up to more. On the maps, I'm generally supportive of maybe expanding.

I'm not real thrilled about going into, commercial areas because commercial areas start encroaching into sensitive receptors. And that means single neighborhoods, parks, schools, those things that could be difficult. So that I'm going to say I'm tentatively okay with right now. But again, you are not looking for solid direction, but tentative direction right now. So I'm tentatively supportive of that. When it comes to the financial amendments, so we've heard a lot of compelling arguments tonight. The one thing that I would like to see when it comes back to us for full consideration for our first reading is a market analysis.

Where is the rest of the market? And I think it will tell the story that for the supply side, we are out of the market. We are beyond or above where the market is. I know that other cities are right about on their supply side 1% to 2%. And so we are definitely above that. But that wasn't because we wanted to be outside the market. It's because we were the first in the market, right? First in the industry. So I think it's fair. We're all here to try to make your lives better and make you and help you. So you are more competitive, not just with stores within the city, but stores, you know,

throughout the region, both in the county and outside the county. I know that when we first brought this up, when this was first discussed, Santa Ana was supposed to be the hub of the industry and not just retail or supply side, but it was all the ancillary industry, the packaging, the accounting, the attorneys, everybody else that supports the industry that you all have as your subcontractors and sub-vendors. This was supposed to be that hub and we were going to create a lot of that. And I see that we're moving in that direction, right? That, you know, hopefully people are going to see that we're so supportive of the industry

that they want to be here as a result of that. So all those vendors that support you, hopefully we'll see that we're a receptive community to that. On the retail side, that's where I am, you know, where I would like to see not just a market analysis on that, but also one percentage drop in what we request would equate to what? Like, what would that revenue loss look like, if at all, right? So, you know, I'm sure we can probably, you know, quantify that, and that could be brought back to the council to give us a sense of, if we adjust down, this is what it appears we could lose, right?

There's an argument that says, you know, economically, look, if you reduce it, you're going to get more volume. So, you know, those are competing schools of thought. But I think for us to make an informed decision, we need to have those numbers before us. So I think those all make sense to me. So I am a little less, a little more rigid on the retail. I'm very flexible on the supply side. On the supply side, I agree that we should be at or close to 1%. So that's where I see us being on that side. On the retail, I'm gonna need a little bit more information before I see any adjustment coming from the council or coming from my support.

Again, I'm very supportive of the community benefits, social equity. we need to talk about that because what I see is everybody is very benevolent in the industry. We all are. We all want to help and voluntarily and we want to be aspirational and some do more than others. I think it's much easier just to have some sort of flat way of doing it. Everybody does the same. Everybody kicks into something and we have a fund that we can benefit that those people that are your customers, those people whose city you're in, and that is a good thing. That is being part of the community, wanting to help.

And I just don't want there to be a lack of parity where some are doing a lot and some are doing none. And so we think that fairness, and if you look at larger cities that have taken this on, they just do a flat CBA, and then they all put in to that, and that becomes a fund that could go to youth, deferred maintenance on parks, after school programs, just so many benefits that will go towards, you know, our friend here who's our new Parks and Recs Director who's going to make all those dollars work for all our youth here in the city. So in any event, those are sort of my preliminary tentative comments, and if anybody has anything

else to add for staff, let me go ahead and do one quick round, but I know we have Councilmember Hernandez who's on the queue. Go ahead, Councilmember.

Johnathan Ryan HernandezItem 2

Thank you, Mr. Mayor. First and foremost, thank you for your comments. I'm honored to serve alongside you. You've done a great job breaking down exactly the importance of this ordinance. And you mentioned 2014 when the ordinance was first brought forward, we were the first city in Orange County to do it. So we were the benchmark for Orange County. Now that other cities are following suit, taking that into account, I want to support Councilmember Fan's idea of taking a look at decreasing retail from 8%.

Johnathan Ryan HernandezItem 2

I am supportive of Mayor Sarmiento's idea to decrease down to 7%. I think to stay at the competitive rate, I would like for staff to see if it's feasible for us to be anywhere between 5% and 7%. Ideally, I would like for us to be at the forefront of cannabis so that way we can compete with the respective cities and we are the place to go for distribution, retail and manufacturing. I think being at the forefront of that would be extremely important for our city. I also want to emphasize the importance of the social equity in CBA and the importance of local hiring.

Johnathan Ryan HernandezItem 2

In addition to that, I want to make it clear that I think it is a top priority for the city of Santa Ana to capitalize on the history that we have with cannabis. by utilizing our Travel Santa Ana platform and taking the lead on Santa Ana being the organizer of having a 420 event and that we only throw one event during the month of April and it's a 420 event where we partner with Santa Ana cannabis vendors that this is an event that is exclusive only to Santa Ana operators and vendors

Johnathan Ryan HernandezItem 2

that we partner with Santa Ana food vendors and local merchants. And this can help us with our travel. It can help us with people flying in from all over the country. We have an airport that's up the street. We have hotels. We have a thriving community in the cannabis industry. And I think this would bring us a lot of revenue and a lot of taxes to the city. I think a way for us to partner and make the cannabis industry part of this community is to have them come in and help us and offset some of the costs for producing this event.

Johnathan Ryan HernandezItem 2

I think if we can identify a number on the city side and identify a number on the cannabis side, I think we can meet in the middle and have a festival that no other city in California has had. I also support the lounges. I just wanted to note that the last round, I didn't mention that, but I wanted to have it on the record that I am supportive of lounges and I am also supportive of having additional permits extended to new operators. And the reason being is to offset any potential decrease in taxes.

Johnathan Ryan HernandezItem 2

I think that we would see this allow us to offset potential decreases, but I also think it creates a surplus for us. And that's a priority for us in the city of Santa Ana. And my ask of my colleagues is that for the CBA, similar to what Mayor Sarmiento mentioned, I think it would be important for 100% of those funds to go out to our parks and recreation so that we can fund our library, fund our youth programming, and fund senior services. And that concludes my comments, Mr. Mayor. Thank you.

Thank you for those. Madam Clerk, are there any others virtually that have their hands raised?

I don't see anybody else with their hands raised.

Great.

Oh, I'm sorry. Forgive me. Council Member Penalosa and Council Member Lopez just raised their hand.

Great. Let's do that in that order. Council Member Penalosa and then Lopez.

David PenalozaItem 2

Thank you, Melanie, and thank you, Mayor Sambiento. So I also wanted to touch on the, I realized I didn't really touch on the percentages or the additional licenses. I, at the moment, am not supportive of seeing additional business licenses added to the system until we see how the consumption lounge aspect of it plays out. I am supportive of seeing the percentage, the tax, decrease to 1% on the non-retail side, 1% or 2%. It's still depending on what that looks like. Like you, Mayor, I'm very flexible on reducing that one.

David PenalozaItem 2

The retail side, I'm a little more hesitant, so I want to kind of see what that will do, but I am open to seeing a minor reduction in that one to anywhere from, like Councilman Hernandez mentioned, from five to seven. I do like what the city manager mentioned, how instead of having a tiered system and have multiple tax brackets for different businesses, I would like to see potentially look at a rebate method or approach when it comes to these businesses

David PenalozaItem 2

that are abiding and contributing to the community benefits and social equity aspect of it. I definitely would love to see some more of our Santa Ana residents hired into this industry and supported and even look into, I know that I briefly mentioned this to staff. We have a legal defense fund for our immigrant community. It could possibly, you know, thinking about just having also a legal defense fund for those people that have been affected by

David PenalozaItem 2

and wrongfully incarcerated and charged with any type of crime, I'm using air quotes here, related to cannabis and the industry because there has been a lot. And there is a lot of damage that needs to be repaired. So looking at things that we could, you know, at ways that we could address that would be very, very beneficial, very supportive of a lot of the language, specifically the local hire component of it. Because last thing we want to do is see, you know, a bunch of outsiders coming in and making and profiting off of this industry in our city.

David PenalozaItem 2

And we want to make sure that it's our community at the forefront. So thank you for that.

Excellent comments. And let me just double down on what the council member said on, I think he was referring to maybe expungement clinics. So to the extent that we can work with the industry, work with, I know UFCW does those. I volunteered for those in the past, you know, as you know, my law office. And I think it's something that the city should help with as well to the extent we can. And maybe we can recruit some of the city attorneys who are not busy. And I see John Funk raising his hand. Just kidding, John. But yeah, you know, but I think all those things are just so important.

So thank you, Council Member Peñalosa, for raising that. Let me go to Council Member Lopez.

David PenalozaItem 2

Thank you for that. That is exactly what I meant. Thank you, Mayor.

Thank you, Mayor Sarmiento. Yeah, I'm very, very supportive of the expungement clinics. I also wanted to say that I support the market analysis and I also want to see back the impact to the budget. There's a lot of things that we have discussed and approved. A lot of programs that we have set that we want to move forward with and see be implemented in the city. And I think it's only right that the residents get to see exactly what the tax reductions are going to impact. So I want to see that information be brought forth to the public. I want them to have access to it.

We heard from the public actually say that this is what they also want to be involved in seeing and understanding how this decision is going to impact possibly code enforcement or youth funding or any programming that goes towards seniors in the city of Santa Ana.

Also very supportive on the local hire and staff. I wanna, whatever ordinance you bring back, I wanna clear definition on the bona fide labor organization. That's something that I'm gonna be looking forward to. That's gonna be it. Thank you, Mayor.

Thank you for those comments. Let me just call on council member Mendoza

if she has anything further.

Thank you, Mayor Sarmiento. No, I concur actually, since this is just a work study session, I'm agreeing what I'm hearing in the reduction and to ensure that we remain competitive and everything else I agree about making sure that we're within the ordinance, that code enforcement, et cetera. So I am a-okay, thank you.

Thank you for those comments. Let me come back and see if any other council members here have any additional remarks. Mayor Pro Temp.

Phil BacerraItem 2

Thank you, Mayor. Just one last thing. As far as the consumption lounges, kind of like what we saw during the pandemic with alcohol consumption, we have the outdoor components. And I think I would like to see the outdoor consumption lounges, but definitely want to make sure that we have the regulations in place to make sure that there aren't negative impacts beyond the site. Also too, I would like to make sure that we allow for a rooftop. Because in some of these cases we have sites that can't expand their footprint, but perhaps maybe they can do something on the rooftop instead. So those are my comments. Thank you.

Great comments. Thank you. I think Councilmember Lopez just raised her hand real quickly. Councilmember?

Yeah, sorry, last comment. I am supportive of the additional licenses coming in the city, but I do wanna piggyback off your comment and seeing what the wait list looks like. I don't think that we need to necessarily lock anyone out of the industry. I think that we can always, and we should make room for others that possibly are Sonana residents that wanna get involved in this industry as well. Thank you.

Thank you for that. Let me go now to council member Fan.

Thai Viet PhanItem 2

Thank you.

First, regarding SB 34, any of those updates?

Thai Viet PhanItem 2

Oh, maybe I'm just not close enough. So regarding SB 34, I am supportive of allowing adult use to also donate as we do with medicinal. However, I want to make sure that we have some type of caveat or requirement that we prioritize Santa Ana residents and nonprofits. For example, we have Heroes Landing, which is 100% affordable housing and wraparound services for veterans. and so I would like for our residents to be prioritized if we have any donations. Regarding the licenses expansion, I am okay with expanding it for those on the wait list.

Thai Viet PhanItem 2

The reason why I'm not okay at this time with supporting a full expansion is because we have a limited territory in which individuals can open businesses. If this were a situation in which all commercial retail were suitable for cannabis licenses, I would be supportive of an unlimited amount or something related to the census, which is what we do for bars and anywhere that sells alcohol as they require ABC licenses that are limited by the state. And so with that, I will leave staff to doing the edits. Thank you.

So let me just wind up by saying, number one, thank you to all of you and the public that came and spoke, those of you in the industry that have been really, really instructive on your hopes. I hope you heard that many of the things that you proposed are, I heard a lot of agreement with that. There's still a few, you know, sort of areas that we want to get some more information on, but I think we're close. And I think, you know, you see that there's a general sense of wanting to help you remain competitive, you know, and that's what we've heard from all of you.

Thai Viet PhanItem 2

I'm sorry, just a quick question for staff. How long would a tax analysis take? Because I heard a lot about getting an analysis on that for the retail tax.

So we already have the calculations as to what a single percentage change would have an impact on retail. Gathering the market analysis is going to be a little bit difficult because there isn't that many entities and jurisdictions that we can look for. So I don't think we're going to be able to come up with a whole lot, but we'll do our best, possibly working with the industry on their analysis where they indicate that a lowering of tax rate can produce a revenue increase. But I don't believe it's not like every jurisdiction does this, we're not going to be able to do

a survey, it's going to be hard to come across data, but we'll do our absolute best and we'll try to do it in a very quick turnaround. Thank you.

So let me continue. What I meant by a market analysis is not like a thorough, hey, you know, let's just see sort of what other cities are at. That's the market analysis, right, to me. How competitive are we or are we not, right? So if somebody is at, you know, 1%, we're at 6%, then that's probably pretty simple to do.

That's way easier.

Yeah. So, you know, that way we expedite, we bring this back sooner to us. So, again, as I was saying, I just want to say thank you to all of you. I want to thank staff for doing this, bringing this before us. I want to thank my colleagues for some very, very intuitive and I think constructive comments and I think we'll be able to get there. I know some of you were taking pictures of our beautiful new, you know, I want to say captions there that we have. That's meant for, you know, closed caption for those that are hearing impaired. I saw you taking some snapshots of this. What we said up here isn't set in stone.

It could change, right? but I think generally you saw some good consistency with what you were advocating for. These are not votes that were taken, these are just direction that we're giving our staff to bring something back that's consistent with what they heard from members of the council. So with that, thank you all for coming. We're gonna move on to our next study. So let me now go to item number two which is the police oversight model and implementation and you know let's do the same thing that we did with the first one does the staff need a break or anything as we transition out or is everybody okay shall we muscle

through council are you guys okay everybody good all right well let's we'll muscle through let me um let me do the same thing and begin with our public comments and I'll begin with the in-person public comments. We'll wait till the room clears so everybody can hear us. Mayor, do you want to have the

Phil BacerraItem 2

presentation first or the comments? Yes, we'll do the presentation first and

then we'll do the public comments. Okay, Mayor, we are ready to go. If you could exit quietly we're moving on to another item please. So we do have a presentation and it's it's not a long presentation it's gonna really cover three things and you're gonna hear from three different people. So the first one is we just want to do a recap of where we've been for the benefit of the members that don't serve on the ad hoc so we'll let you know how it started how many meetings they had give you just a brief update on that and then you will have the opportunity to hear from the police chief who had spoken to the ad hoc as

well to just update you on what our current practices are and then Sonia will be rounding out the the presentation because this is such a important legal matter so those are the three presenters and I will start with turning it over to Daniel Soto from the city manager's office

thank you Christine and good evening mayor and members of the City Council I'm launching a presentation shortly, just a second.

All right, so for tonight's presentation we're going to start off with a quick timeline.

Back in June of 2020, Mayor Sarmiento, Mayor Pro Tem Becerra and Council Member Peñalosa added a Council Member requested item to direct staff to look into police oversight models for Santa Ana and returned back to the City Council with information. Staff came back to the City Council in September 2020 with an informational report. This report gave an overview and history of police oversight, took a look at the three main models of police oversight, examined subpoena authority for police oversight mechanisms, provided an overview of the Santa Ana Police Department's complaint process for allegations

of police officer misconduct, and that was an opportunity for the City Council to provide direction to staff. The City Council did that, and we returned in December 2020 with additional information about the subpoena power for police oversight. We also provided a comparative analysis of California cities that have police oversight boards or commissions, and also shared the results of a community feedback survey to assess residents' sentiments regarding police oversight.

Staff returned again in September 7th with an updated informational report that focused on the auditor, monitor, and investigation-focused models of police oversight. That was the preference of oversight models that was shared by members of the City Council at past meetings. We also took a look at the police oversight models in the cities of Berkeley, Oakland, Riverside, and Anaheim, and examined the eligibility criteria for folks to serve on a police oversight board or commission. The following month, the mayor appointed an ad hoc committee to further study police oversight.

The mayor appointed Mayor Pro Tem Becerra, Councilmember Hernandez, and Councilmember Lopez to the ad hoc committee.

The ad hoc committee met eight times to study police oversight, and they were directed to return back to the City Council within one year's time with the recommendation.

Specifically, the ad hoc committee is intended to identify the advantages and disadvantages of various police oversight models, assess the legal requirements, discuss collective bargaining limitations, identify the objectives and scope of a police oversight mechanism for Santa Ana, develop a budget, and receive reports from law enforcement to understand their perspective. To date the ad hoc committee has been working on a working draft ordinance. So the ad hoc committee has gathered consensus around a handful of matters relating to an ordinance that would

establish a police oversight commission for Santa Ana. Specifically this working draft ordinance would establish the police oversight commission with an independent oversight director.

The model would be classified so far as a hybrid that consists of elements of both the auditor monitor and investigation focused models with subpoena power. As drafted, the Oversight Commission would have seven members that are appointed by the City Council, and each commissioner would be required to take an oath and execute a confidentiality agreement, participate in a write-along, and receive training and ongoing training. The Commission would be required to meet within 30 days of all members being appointed to the Commission. The City Manager would recommend a budget for the Commission as part of the annual budget

process and rules regarding the police oversight commission would be developed by the Commission in consultation with the independent oversight director and the city manager there are many other elements of each working draft ordinance that still require discussion among the ad hoc committee those four big categories are the establishing authority and that outlines how the Police Oversight Commission would be established. That's things like a ballot measure to approve a charter amendment, a ballot measure to approve an ordinance that would be adopted by the voters, an

ordinance approved by the City Council, or a combination of a ballot measure charter amendment requiring that the City Council adopt an ordinance establishing a Police Oversight Commission. The next bullet is qualifications of commissioners. That is the eligibility criteria. Do you want your commissioners to be residents? What other background or other criteria do you want to look at to determine whether an individual can serve on the commission or not? The third category is powers and duties. What will the commission do exactly? And this is a very substantive component of the working draft ordinance.

And the final item is how the independent oversight director would be appointed. At the end of the presentation, should the City Council desire, I have a bulleted list of the first three categories that we can run through if the Council members would like to discuss and express either their support of or opposition to any particular items under those three categories.

The next section of the presentation is current practices to addressing police officer conduct and police chief David Valenting will be providing a presentation.

Okay, thank you, Mr. Mayor, City Council, City Manager, for the opportunity to discuss this very important topic. I have a couple of slides if you want to go ahead and go to that, and then I've got additional information that I will add as we go. If you want to go ahead and go to the first slide here.

Okay. Okay. There we go.

Okay.

I'll go ahead and get started here. So the Senate of the Police Department has a policy in place to accept and thoroughly investigate all citizen complaints of alleged misconduct.

The complaint process has the following goals. to conduct complete, thorough, and objective investigations into allegations of employee misconduct, to correct employee misconduct, be it through discipline and or training, to protect employees from unwarranted criticism when their actions are justified. The complaint procedure is the complainant prepares and submits a citizen complaint form. and communicates the alleged misconduct against the department staff member,

the supervisor reviews the complaint to determine the nature of the complaint, if it's one of misconduct or one of procedure. If warranted and appropriate an administrative investigation is initiated, conducted within a one-year statute of limitation, This may be extended due to circumstances involving concurrent criminal investigations. There are four determinations in an administrative investigation. The first is sustained, that is, the conduct did occur.

The second is not sustained, that is, it could not be established one way or another. The third finding classification is unfounded. That is the conduct did not occur. And then the final is exonerated. And that classification has to do with conduct that occurred but was legal and proper. The complainant that submits their complaint is notified within 30 days of the final determination of the investigation. If the complaint is sustained, there is a discipline recommendation. that is forwarded to the chief of police via the chain of command.

The employee is afforded due process. There's the personnel board that also hears the case and determines if the findings and imposition of discipline were appropriate. They can also uphold the discipline or overturn it. Officer-involved shootings and in-custody deaths. And again, there's more information that will be provided in the presentation, but I'm just providing an overview of what's in place already today in the form of oversight, accountability, and transparency. Officer-involved shootings and in-custody deaths, there's three concurrent investigations that occur.

The first is the Orange County District Attorney's Office. They conduct an investigation. Their focus is any criminal culpability on behalf of the employee involved. The Santa Ana Police Homicide Unit conducts a criminal investigation against the suspect involved in the incident for any criminal culpability. We also have the Internal Affairs Division that conducts an independent administrative investigation. Their focus is policy, compliance with policy and procedure.

Another component that was added approximately now three years ago, the city attorney's office representative that's assigned as a police legal advisor actually responds to officer-involved shootings and in-custody deaths. And the purpose of that representation is to take a very high-level look at any liability exposure issues related to the incident.

On our website, in the form of accountability and transparency, you will find on our city police department website the following data. officer-involved shooting and in-custody death data,

officer-involved in-custody death investigation protocol, and I might add, we're the only agency in Orange County that actually has this information forward-facing to the public. So it gives you a pretty good understanding of the flow of investigations that occur when these types of incidents occur involving our employees. You also find reports on alleged employee misconduct, a use of force report, the UCR FBI crime statistics, which will be revised next month to comply with reporting requirements.

Hate crime data is also published there. And then our calls for service total tallies are there as well. Another form of oversight and accountability that is already in place is our shooting review board. Every instance in which an officer fires their weapon, whether intentionally or not, that incident and its corresponding administrative investigation is reviewed by the shooting review board that's made up of representatives throughout the department. The chair of that shooting review board is the training commander.

And so the reason for that component is to look at the circumstances involving the shooting and then attach a classification. Is the shooting justified? Is it not justified? Or is it accidental and more appropriately categorized as negligent? In the instance where a weapon is negligently discharged, there could be discipline and or training.

There are also various areas of legislation that have occurred here in the state that, of course, we comply with, again, in the area of oversight and accountability and transparency. Senate Bill 1421 and Senate Bill 2. Senate Bill 1421 has to do with the release of information involving sustained findings of sexual assault by a peace officer or custodial officer involving a member of the public, sustained findings for perjury, false statements, false reports, destruction,

falsifying or concealing evidence by a peace officer, Sustained findings involving a complaint that alleges unreasonable or excessive force. Sustained findings that an officer failed to intervene against another officer using unreasonable or excessive force. Sustained findings that a peace officer engaged in conduct including, but not limited to, verbal statements, writings, online posts, recordings, gestures involving prejudice or discrimination.

Assembly Bill 1506 also requires that the State Attorney General investigate officer-involved shootings where someone is shot that is unarmed. So that is in place as well. Another form of oversight that is already in place by the state legislator is Senate Bill 2, which I both supported representing the Senate and the Police Department and also as the president of the Orange County Chiefs and Sheriff's Association. That creates a platform to decertify an officer that is found culpable of certain misconduct.

That is still in progress in terms of the Commission establishing their rules and regulations, but that very much is moving forward.

Go to the next slide. I think I've covered everything.

That's what I have to offer at this point. I know you probably will have some questions, but I think at this point I'm turning it over to the city attorney's office. Thank you.

Sonia R. CarvalhoItem 2

And thank you, Mayor, Councilmembers, and to members of our public and our staff that are here tonight. I just briefly wanted to take you through a couple of the legal considerations very quickly. When the city council directed the ad hoc committee to explore the possibility of establishing a police oversight committee, we first looked to whether the city council actually has that authority. And we've confirmed that the city charter authorizes the creation of a committee of this nature. We looked at committees that have been created in other cities. What we noticed is that in the strong mayor cities,

Sonia R. CarvalhoItem 2

our very large cities in California, we see some independent, truly independent operations of police oversight. I'll go into why that wouldn't work in our community unless we make some changes to our charter. We see the bulk of these police oversight committees are actually in charter cities. Charter cities, much like Santa Ana, have maneuvered through the authority in their charters, coupled with some creative ways of creating the commission. And they are really made specific for each of those cities. They all differ in just slight ways to be responsive to the kind of trust and transparency that the cities are trying to build.

Sonia R. CarvalhoItem 2

And interestingly enough, I only located two general law cities in the state that have these types of committees. There's a reason for that because it's the law. You have to be able to have the authority to move forward. The type of committee depends on the type of city government that your charter is authorized. We are a city manager form of government. And what that means here in Santa Ana is that the individual council members and the boards and commissions that you create, they only gain their authority through that charter. And in our city manager form of government, our city manager is responsible for each and

Sonia R. CarvalhoItem 2

every department. As you know, the city council hires the manager, the city clerk, and myself. And so we have to be careful to be mindful of those kind of requirements that we are not allowing an independent board outside of the charter authority to make decisions regarding personnel. Other legal considerations that we have to give thought to is just compliance with the Public Safety Officers Procedural Bill of Rights. We refer to this as POBAR. In California, our law enforcement and safety officials have a great deal of protection

Sonia R. CarvalhoItem 2

under these laws in terms of accusations made against them, investigations of those accusations, and ultimate discipline or even termination. We have to look at whether the ordinance that you want is going to offer change in officer working conditions. If this is something that occurs, we have to be mindful of negotiating with the bargaining units that represent the individuals. We've had to take a look at the role of the personnel board because right now your charter creates a personnel board. Your personnel board is there as a due process board to review any discipline and or termination

Sonia R. CarvalhoItem 2

decisions and that includes officers. We do know that the City Council can create a lawful committee now with investigative powers. There was some discussion that you might recall we had about, well, what about subpoena powers? Well, your charter already authorizes the council to authorize investigations and to lend your existing subpoena powers to subordinate bodies or individuals. And then finally, the city council can strive for an independent or separate entity that requires changes to the charter. And this is something the ad hoc committee spent a great deal of time looking at because

Sonia R. CarvalhoItem 2

there was this discussion of, do you want your police review committee to be something that interfaces with your public for transparency and conversation? Or do you want a police review committee that is really focused in on investigating and independently disciplining individual officers? And that latter part, while I offered a formal memo to the ad hoc committee members, I've also shared that as an attorney-client privilege memo with the City Council members, there are ways to create that but creating that kind of model requires a significant

Sonia R. CarvalhoItem 2

shift in the way you do business when the city of Oakland for example created theirs they shifted in that community to a strong mayor form of government where it became like a city administrator so that's what would be necessary if you want that side of the spectrum but if you want something that creates that transparency that provides interactions and also gives a little bit of independence than the model that Mr. Soto reviewed with you, it heads in that direction. So we'll just wait for further direction from you.

Thank you.

So, Mayor, we do have next steps for the types of direction that we're looking for, but we could place that on hold for you to take your public comment and do your own deliberation.

That works. Why don't I go ahead and bring it back to public comments from members of the public? I believe we only have one speaker card for an in-person comment, and I believe the clerk has some people on hold that wish to address us on this item. So let me go ahead and call on Kelly Kraus-Lee to address us, and she'll be the only in-person speaker and then I'll go ahead and turn it over to the clerk. Thank you.

Thank you, Mayor, City Council. Kelly Kraus-Lee, I'm a resident of Ward 6. So, before the meeting tonight, I emailed all the council members a link to the article called Getting It Right, Building Effective Civilian Review Boards to Oversee Police. This is by Udi Ofer at the ACLU. And in it, he outlines eight key components to effective civilian review. And I would encourage the council to ensure our board meets all of the criteria. One, board majority nominated by civic organizations like League of Women Voters, ACLU. Two, broad scope to review complaints. 3. Independent investigatory authority. 4. Ensure discipline sticks.

5. Ability to audit policies and practices in addition to individual allegations of misconduct. 6. Budget tied to a fixed percentage of the police department's non-capital budget. I know we've already allocated some resources, but that would be a great goal to strive for in the future. 7. Due process protections for police officers. and eight, public access for residents and quarterly reporting from the board to ensure transparency. I'll just leave you with a quote from the article because this is what really I think we need to keep in mind.

A weak civilian review board is worse than no review board because it gives the illusion of independent accountability but actually provides little to no accountability. A weak civilian review board can lead to an increase in community resentment. As residents go to the board to seek redress yet end up with little. Thank you.

Thank you. You know, I may have misspoken when Ms. Cordoba turned in her card. I believe she put one and two, if I'm not mistaken. So Jackie, if you want to address us on this item as well, I believe you put both items.

Thank you, Mayor. I was passing by Memorial Park the other day, and I saw officers pull over a guy that was walking home. and I stopped to make sure he was okay. And he said he was walking home from work, dressed as a resident of Santa Ana, and they're racially profiling our men walking to and from work. I read an officer-involved shooting report the other day, and it's they're profiling gang members as wearing angels baseball hats

and a shooting occurred because of the way that our residents are dressing. So I would like this process to decriminalize our residents for walking down the street and how one thing leads to another. Thank you.

Thank you for those comments. I'll now go ahead and turn it over to the clerk so she can go ahead and call on those folks that are online.

Caller whose phone number ends with the last three numbers 010 please dial star six from your phone to unmute from your device and proceed with your comment. You have three minutes.

Okay. Can you hear me? I can hear you. Hi, Victor Mendez Ward 3. Yeah, so I really appreciate Sonia's comments because I think they kind of brought the quotation kind of what I guess my own personal recommendation would be. And that's really to really focus on making this kind of a performance oriented quality assurance performance audit type of function, at least initially. As the chief went through, there's a lot of parties involved in a major shooting or a severe incident, including the state attorney general. And there's really not a lot for commission to do.

There's obviously this 18 point plan by the ACLU and just frankly, a lot of very rich structures that probably would be very expensive and probably be used for maybe like maybe 5% of the total complaints at most on any given day. You know, that said, there was work to be done here. without a doubt um and but you know trying to you know offload this huge structure uh for something that probably you know existed maybe 20 years ago or maybe will come up once in a great while really if it works that said i just think there's a lot of work to do from the performance side of the

chief i mean there's a there's a black from what i understand the huge backlog of complaints uh There's dissatisfaction on the complaint resolutions. There's certainly behavioral and conduct issues with our officers while not being abusive, but certainly warranted attention. And what just came to my attention not recently was this $28 million in overtime that's been spent over the last three years of some officers making an excess of $100,000. I'm using the type of issues that we can hone in on without going to a lot of legalistic issues or having to deal with rules from the city manager, and they can just simply start to address it

and make this department and this function more effective to the citizens.

You know, we have a service issue, a gap between delivery and expectation. The woman was talking about some problems she had with people profiling. You know, we have situations, even in my own unit, where some woman had a break in by a homeless person. And before the CNN police came, the person was obviously gone. So, you know, these are the types of things as a community we got to address and put the chief and the department and the city manager accountable for. But I think we can do it in a very, I guess, performance-oriented, accountable type of approach

versus backloading just this massive structure that basically loads up on everything. And I'm not too sure at the end of the day, where it's all gonna go or what we'll achieve. Five seconds. But I think a lot of, I think I'll just wrap it up. I think a lot of it can be achieved again. Performance accountability. Thank you so much. And focus on effectiveness. Thank you. Bye bye.

Zoom ID G-SPOT 2, select the microphone icon to unmute from your device. and proceed with your comment. You have three minutes.

Hi, can you hear me? Yes. Yes. Hi, good evening, Mr. Mayor and members of the council.

My name is Hyrule Cortez. I'm the executive director at Chispa and I'm a resident of Ward 5. Thank you for scheduling this meeting, I think like on a Friday, no less. It's a very important topic, right? Like in one that's been needing to come back to the city for discussion. I do wanna address like some of the, you know, like some of like the last points, but first and foremost, you know, I would like to share prior to this meeting, Chase Van de ACLU both submitted a letter.

It was signed onto by other organizations like OCO, Accords, and Building Health Communities,

and Resilience that included an ordinance that we wrote alongside the ACLU. It included a policy brief describing and summarizing the contents of the ordinance. one that is thorough and that can and should serve as a starting framework from which this council can work off of what we try to do in drafting this ordinance is comply with state law the charter and existing city mo use because we know i think to to the previous speaker's point

ensuring ensuring proper transparency oversight and accountability of the police department does come with like navigating a lot of like different rules and that is by design police officers have the most protections out of like any other like profession out there and these protections are layered like the local the county and the state and national levels

And so, you know, like we, we highly urge you to use our ordinance as the model and like as the basis for crafting a policy for Santa Ana. Where needed we are ready and able to work with the council to clarify intent to fine tune language and proposed processes to build a police oversight mechanism that is effective in its goals of bringing greater transparency and accountability for the police department for Santana residents. I think like over the over the last couple of years, you know,

like this issue has surfaced and surfaced like over and over, precisely because it needs to be addressed. It has been something that's been top of mind for Santana residents for decades. 15 seconds. And that has been top of mind for Santana residents just in the last year alone. And so So we urge you to move forward with taking action and to use our ordinance as the base for the council's policy. Caller, your time is up. Thank you.

Caller Zoom ID, I'm sorry, Hector, select the microphone icon to unmute from your device and proceed with your comment. You have three minutes. Hi folks, my name is Hector Bustos and I'm a resident in Ward four and the communications director at Chispa. I'm here alongside High Road to voice our organization's support for the establishment of a police oversight commission in Santana. As most of us know, the community's fight for police oversight in this city has been one of nearly 60 years. And we know that police oversight is the most effective mechanism to ensure accountability among police officers

who abuse their power and engage in misconduct. Police violence and misconduct have cost Santana residents over $20 million in lawsuit settlements over the last decade. In order to ensure accountability and transparency moving forward, we're in support of a robust police oversight commission that is independent and has investigatory powers. Our proposed police oversight ordinance that was sent to all of you is a direct representation of the kind of police oversight Santana residents want to see. When the city conducted a survey last year on police oversight models, we took a careful look at those survey results.

We looked at the data and crafted an ordinance thoroughly that met the benchmarks that residents demanded. Police oversight is an issue that most Santhana residents agree on, which these days is pretty rare. Residents agree that we need to hold police officers who abuse their power accountable, and just like we would do to any other professional, just like we do to any other professional. But this accountability system must be independent from the department that's being investigated. So again, we ask for your consideration of the proposed police oversight ordinance that we sent over and ask that the council use this ordinance

as a base for establishing a police oversight commission. Thank you.

Zoom ID Penelope, select the microphone icon to unmute from your device and proceed with your comment. You have three minutes.

Hello, Mayor Sarmiento and members of the council. Thank you so much for taking the time to hear from us tonight. My name is Penelope Lopez and I'm the organizing director of CHISPA. I'm here today to speak in support of a strong and robust civilian-led police oversight model. The call for police oversight in Santana originated in 1965 in response to unjustified use of excessive and deadly force against civilians. And decades later, residents of Santana and community-based organizations continue to advance this call today.

In the past year, we have hosted presentations and listening sessions throughout the city for hundreds of residents and youth. We have heard heartbreaking testimonies from residents about their interactions with colleagues. Mothers have shared the pet talks they give to their children as many as 10 years old about interactions with colleagues. But overall, our listening sessions reiterate the hope that elderly residents and youth have for a future that champions accountability and that is free of fear from police violence. Meaningful oversight can be only enacted through a clear and detailed policy

that provides direction for structure, scope of authority, duties, staffing, funding, access to records, community engagement, and public reporting. So it is imperative that the city of Santana establishes a comprehensive, effective, and fully funded civilian oversight model with a clearly defined scope of authority to prevent intervene and investigate police misconduct and violence we have heard feedback from hundreds of residents in the city-led survey and city council ad hoc committee robust civilian oversight cannot be put on hold any longer so we

urge you the city council to pass or to use our community driven ordinance language presented to which would establish a robust model of civilian oversight that has been denied to Santana residents for nearly six decades. The residents of Santana deserve to live free of police misconduct and violence. Thank you.

Mayor, that was the last caller.

Excellent, thank you. And I think you had some final comments, Madam City Manager and Daniel on next steps and then we'll go.

We have a final slide of the presentation, sir, that is kind of the type of direction we're looking for. If you think that would be beneficial to put up, we can do that.

Great.

Thank you, Mayor. So tonight we're seeking some direction from the City Council, and that's broken down into two categories on your screen. Some options to consider is to direct staff to return with additional information to the City Council. The second option is to direct staff to return with an ordinance establishing a police oversight commission or something else. Second category would be direction to the ad hoc committee and that would be directing them to continue studying the outstanding items and return to the City Council with recommendations. The mayor may dissolve the ad hoc committee or something else. Thank you.

I like the something else. That's interesting. I don't know, that leaves it very broad and open-ended. So let me just, you know, before I bring it back to all the council members, and I'm just going to make some just kind of introductory opening remarks. First, I want to thank members of the public that addressed us not just tonight, but over now years on this topic. So I know the timeline that we have begins at June 12, 2020, but I know this item's been before the council for several years now. I think Madam City Attorney and I are the only ones that saw this back and I don't even want to date myself.

We're getting, it's going to get too long and we're going to feel older than we already feel. But, you know, this council itself, I think, you know, this was one of the first things that was proposed by Mayor Pro Tem, Council Member Peñalosa and myself. And so it's before us. And I do want to thank also the members of the ad hoc that have been working on this since October of last year, and that's Council Member Lopez, Hernandez, and Mayor Pro Tem also. So with that, I do want to disband the ad hoc at this point. I believe it served its purpose.

I think they took in a lot of information. and over the past, I guess it's now nine months, have gathered a lot. I think now it's time to bring it back to the council for us to make decisions on our own. We will look to the ad hoc members to give us maybe their opinions because we're able to take a deeper dive on this than the other four of us, and that's really the purpose of an ad hoc is to maybe get more in detail, give detailed information and share it with the rest of us so we can all make a collective decision. But I do want to say that, you know, we're just, you know, we're tackling this.

I think it's something that's gonna, again, we're not making any decisions tonight. I think based upon, you know, your next step slide, I think, you know, what we've seen in the presentation and really what we've seen over time, you know, we're getting to the point where you do want us to give you some instructive information so you can bring it back to the council for its first and second reading to the extent we will do that. This will not be the night that decisions are made, but we gathered some information. We've heard from the staff on their presentation. We'll hear from the ad hoc members.

And now the other members of the council will now have a chance to give you some direction. Again, this won't be the time as it was with the first work study where we make any decisions, but hopefully it will give you some guidance as you bring back a draft ordinance for the council's consideration. So what I'm going to do first, since we didn't have an ad hoc on the previous item and we have an ad hoc on this one, I'm going to go to them first and then have them kind of share their thoughts on what they'd like to see and then bring it back to the non-ad hoc members.

So let me begin with those ad hoc members that are not here physically, And let me start with Council Member Lopez. And I believe it was all going in the order of Council Member Lopez, Hernandez, who's also not here, and then wind up with Mayor Pro Tem. Then we'll bring it back to the rest of the Council Members.

Thank you, Mayor Sarmiento. Yes, so I volunteered to be part of the ad hoc, and I really did enter the ad hoc with the best intentions. and I'm happy to see that this is something that the entire council is going to deliberate on and hopefully move forward so that the residents can finally have something to point to and also to have some sort of input to. There were a lot of things that we as an ad hoc

had discussed and possibly even got stuck in the weeds about. You know, there was some like diversity commitments that I had brought up in terms of how many people should be appointed to the board, should folks have any qualifications in terms of knowledge of employment law or HR law, things of that, you know, things of that nature because I thought it was important for people that were gonna be appointed to this very, very important commission to not be completely taken aback

or to not be fumbling around because I also hear about some of the issues with the personnel commission now. And I had a commissioner that stepped down from the personnel commission because of how chaotic it is and how unsupported that responsibility has been. And so I don't wish to see the same process be implemented for this very, very special board. I do believe that there needs to be criteria established for the people that are gonna be appointed

because again, this is not, you know, the ETAC. This is not a regular commission. This is something that people need to have knowledge about in employment law, in POVAR, in HR, all of the different issues that come forth through the personnel commission now. And so I think there's a lot of things that need to continue to be flushed out in terms of the appointment process. You saw Daniel did a good job in summarizing some of the issues that, or recommendations that the ad hoc members had talked about. You know, I had expressed issues.

If we're gonna pay people to do the ride alongs, it really needs to be a cap in how much people, or in how many ride alongs people can do, because I could see someone doing ride alongs on a monthly basis. And so all of those are the conversations that we had and so that's why you're seeing specific recommendations but I do think that this body and I'm looking forward to having a more thorough conversation maybe if it's not tonight when this comes back to us about the training that this that needs to happen

with the with this commission with this body the staffing the hiring the budget I know we allocated a million dollars and most importantly the powers and the duties of the board because I don't think that this should be treated as any other regular commission that we have in the city it is too important you're talking about people's jobs you're also talking about justice for people that may not have that may not have ever gotten gotten any before in the past um you know the issue to policy recommendations. And so I think there's a lot that we still need to go through

and really resolve in terms of big picture. I did read the working ordinance that ACLU submitted. I particularly liked the requirements, as I mentioned earlier, around the people that need to be appointed or should be appointed to serve on this body. I do believe strongly that we need to have something been in place cemented and not just be, you know, at the pleasure of the council members. So those are gonna be my opening statements. Mayor Sambiento, I will hand this over to council member Hernandez.

Johnathan Ryan HernandezItem 2

Thank you. Thank you council member Lopez. It was honored to serve along you and my colleagues on the ad hoc. I know it was a long nine months and over the course of those nine months, We heard from experts in Pobar. We heard from community members. We heard from our city attorney and staff. And we really had an in-depth dive as to what was going to be the best approach. Unfortunately, we were not able to bring something in a timely manner in which we were all able to come to terms with. But that's why we're now having this session now.

Johnathan Ryan HernandezItem 2

So I am supportive of us continuing to have this conversation, and I want us to have a model that is both strong, that is equitable, and that is inclusive of community members who have firsthand lived experience, whether it be working in the field of re-entry, juvenile justice, justice reform work, or whether they have been justice impacted.

Johnathan Ryan HernandezItem 2

I think that it's important to have people who know firsthand the difference between a cop doing his job and a cop abusing his role. I think that having people who have that lived experience is crucial. In addition to that, I wanted to make it very clear that I was not supportive of having law enforcement part of this commission. Law enforcement are already actively investigating themselves in this country. And I think that the community demands are they want something different, something that is going to represent the values of the communities.

Johnathan Ryan HernandezItem 2

and uh and so with that being said i got an email from american civil liberties union and i had a chance to read through it today um and i mean over the last couple of of days since they sent it um i i planned on on inquiring with with american civil liberties union um if they could send it to the majority of everybody here on the council i'm not sure if everybody did received the email. But I liked what they what they proposed. I would like to support the draft that they sent us. And I would inquire my colleagues if you haven't seen it to reach out to American

Johnathan Ryan HernandezItem 2

Civil Liberties Union. I'm very supportive of the draft. I would like to see that move forward. I would like to see us adopt that. So I am echoing Council Member Lopez's comment as well. That

concludes my comments. Mr. Mayor. Thank you. Thank you. And let me go ahead and call on Mayor Pro Tim, who is a third member of the ad hoc.

Phil BacerraItem 2

Thank you, Mayor. I'm just going to begin by expressing my disappointment. This is something that should not be rushed, and this is something that we spent countless hours discussing very important aspects of this effort. And to now just disband it and take a draft from an organization, it's just really disappointing. I feel like that this is more on the calendar of the election than it is on accomplishing something that actually will Produce what we all want which is to hold our police officers accountable It's like body cameras

Phil BacerraItem 2

I don't think anybody whether you're supportive or not as supportive of our police Doesn't want to see them be accountable and I think that what we are trying to do here We're trying to take something and right-size it for Santa Ana that this isn't something you should lift off a national organization and then try to jam a square peg into a round hole. So I will say that I'm very disappointed that all of a sudden we need to disband this ad hoc. I think that while we were in the weeds, there's nothing wrong with delving into the technical and logical feasibility of what we need to see implemented in this commission.

Phil BacerraItem 2

There were differences of opinions, but I think that ultimately we would have been able to bring something back to the full council that would have given all of us an option, I'm sorry, options to determine what we ultimately move forward with. But to abruptly disband it because it doesn't seem to match the needed calendar for certain upcoming events is truly, truly disappointing.

Great. Let me go ahead and call on the rest of the council members who were not on the ad hoc if they wish to comment. And, you know, I guess I'll bring it back to the direction to staff. We're talking about the now the first option, which is a direction to staff recommendations and three options there. So I'll start with those council members, as I did before, who are not here physically. So let me start with Council Member Mendoza.

Thank you, Mayor Sarmiento. This is a very serious issue and it should not be rushed. So I would recommend we continue with the ad hoc and explore the issues a little bit further because there are so many things that we need to look at. And we need to see what has worked, what has not, what are the consequences. We can get sued again. The city of Santa Ana can continue to be sued by the actions taken by this oversight committee.

We need to protect the city. We need to protect our citizens and we need to protect our officers. Everyone is in this together. So we need to remove the us against them mentality. We do need to continue to keep them accountable as we have been for years. and so I agree totally that this needs to go back to staff with better research and we need to look at what has happened in other cities where they've had oversight. What were the consequences? What were the benefits? Now, are we going to be compensating the personnel who sit on this oversight committee?

How will we recruit? What are the qualifications? And we definitely need to get people who have law enforcement background or some kind of legal expertise and skills. So we cannot allow just the ordinary citizen to come and be on this very, very difficult and complex board. And so I definitely need to see more. I'm not ready to go forward with it. And I think we need to have more analysis and detailed work product. So I am not going to support any of this.

I need to see much more than we have today. Thank you.

Thank you. Let me go to Councilmember Peña-Losa.

David PenalozaItem 2

Thank you, Mayor Sarmiento. I currently don't have any comments. I remain supportive of us having a police oversight commission. Definitely want to say, I don't, you know, just little things. I think the commission should be open to anybody that would want to serve and not forbid some because they had a relative or family member that was a police officer. I mean, that to me just doesn't make sense. I did take a glance at the ordinance language that ACLU sent.

David PenalozaItem 2

Maybe what we could do is send that back to the ad hoc commission and see how they can, you know, take that apart to see what is feasible here and what isn't. um i guess my question to you mayor is so why is is the ad hoc being disbanded

yeah just to go just because i think now at this point we've had this with the ad hoc about nine months and then we had a lot of other information provided to the council at large prior to that at this point i think all seven of us should be deciding on this so i think the information that's out there. I think all of us can deliberate. So my my sense is if we can get through this together, it's probably better. I had conversations with the city attorney and the city manager, and I believe that, you know, those and nobody's making a decision on any draft ordinance tonight. So I

haven't even looked at the ACLU draft ordinance in detail. I just think now we need all the information that the ad hoc has and all seven of us need to make a decision on this item.

David PenalozaItem 2

which which I agree I definitely think that all seminars should start you know deliberating on what this what the ad hoc will be I mean I'm sorry not the ad hoc the police oversight commission so I guess my question is is the ad hoc that we have was that a public safe general public safety ad hoc or was just strictly police oversight commission it was just exclusive

from one of my intention was just on this particular commission item

David PenalozaItem 2

Oh, okay. Because I was under the impression that it wasn't just a public safety ad hoc that was looking at numerous things. I know there was a couple other things over the last couple of months that we suggested would go to the Public Safety Commission. But maybe I'm mistaken. But I guess those are my comments for now, Mayor.

Great. Thank you for that. Let me now bring it back to members of the council who are here present who weren't on the ad hoc and that only leaves two of us. So council member Phan.

Thai Viet PhanItem 2

Thank you, Mayor.

Thai Viet PhanItem 2

Yeah, I'm not exactly sure what recommendations our ad hoc is providing us. I remember last time I did ask to get some dollar, you know, an estimate for what each of these models might cost or look like. I would like to say that I was provided the draft ordinance by the ACLU and CHISPA, and I've gone through it thoroughly more than once and have had multiple conversations regarding some of the concerns I had, issues, some areas I like, some that I don't like.

Thai Viet PhanItem 2

I also reviewed the draft, I guess, ordinance from our city attorney's office, which was really nice to have, but it was significantly shorter and more limited. And so for me, I do like having a detailed and robust ordinance. I am supportive of an independent oversight body. I've said that many times before, and it has nothing to do with whether or not our IA or police department is doing a good job or not. I do believe that processes is what helps us ensure that there is transparency and accountability.

Thai Viet PhanItem 2

And so by having an independent body, we are able to better, I think, look into some of these issues. That doesn't prohibit IA or the police department from also conducting its own investigations. At least that is my thought process on this.

Thai Viet PhanItem 2

So I guess just next steps for staff, Madam City Attorney or Madam City Manager, you know, I like the starting point of that draft ordinance submitted by a third party. In fact, I'm perfectly happy with anyone who wants to submit a resolution or ordinance that they're willing to do the work on so that I can provide comments and edits and feedback and I can tell you that there are many items that I don't agree with and I'm happy to send those comments to our city attorney's office for review. And I would never approve something that our city attorney's office did not yet approve. So I think that that's one starting point.

Thai Viet PhanItem 2

you know why not submit that if there's a whole team of attorneys and others who are already working on it and you can tell me this doesn't work under our charter this doesn't work under our city manager form of government this is not practical this is not feasible I think that would be helpful at least for me because I do agree with my number of the policy ideas one thing I am not supportive of is prohibiting former police officers or individuals related to them, former civilian employees of police departments, former DAs, former city attorneys.

Thai Viet PhanItem 2

And there's a whole list of individuals that are, I guess, some advocates are saying should not serve on this police oversight. I've said from the day, the first time I've talked on this issue, a police oversight commission isn't just about transparency for the public. It's not just about holding our officers accountable. It's also ensuring that our officers who are facing potential discipline feel that they have a fair shake, that they are getting due process, and that they do have a voice. And I'll say it once and again, I don't know of any other profession in which you may lose

Thai Viet PhanItem 2

your job or profession or license, and the body reviewing you does not have the experience in that profession. So I would definitely not support a police oversight commission that prohibits former law enforcement city attorneys and DAs, and especially not an oversight board that prohibits family members of these individuals. In fact, I think if we had that, I think maybe not just myself, because two of my cousins are police officers, but I think maybe the mayor, you wouldn't be able to serve on that either, because we both have family members in law enforcement.

Thai Viet PhanItem 2

And I don't think that that kind of exclusion is helpful, not only for our community, but but also for our officers.

Thai Viet PhanItem 2

And so I guess with next steps, that's what I would recommend. Let's look at that draft ordinance. Let's see what we like or what we don't like. Let's get feedback from each of the council members because if there are whole sections that we don't like, let's get rid of it. Because I also want to better understand, Madam City Attorney, the comments regarding our charter and changing our, I guess, city manager form of government. when it comes to a fully independent oversight body.

Thai Viet PhanItem 2

I don't feel, and my mind can change if you make a good argument, that if we are having a robust office of accountability or transparency and an oversight body, and we're spending all this time and energy only to make a recommendation that would otherwise not be followed or doesn't have to be followed by the disciplinarian. I don't know why we would do that. But you said there might be some issues with the charter or form of government. So I'd like to better understand that. I know I read the memo. It kind of just mentions it.

Thai Viet PhanItem 2

The other is regarding any MOUs or any discussion with our bargaining units, they're negotiations. Any way that we negotiate regarding how disciplined is meted out or anything like that, those are negotiable. Whether you decide to have a personnel board or not do a personnel board, those are negotiable. And so I don't see that that is a hurdle that we cannot overcome, depending on the cycle of the MOU.

Sonia R. CarvalhoItem 2

If I could just comment on that really quickly. So I agree with you. These are not hurdles that you can't overcome. And one of the things we talked about at the ad hoc committee was if you want to overcome them, then go propose to your full council that we make adjustments and amendments, for example. But I think just the biggest hurdle you will have, it's not that you have an independent body. The city of San Jose has an independent auditor. Other cities have independence. The key that I think the ad hoc committee was struggling with is they wanted this personnel

Sonia R. CarvalhoItem 2

board to be able to make personnel decisions, this police review board to make personnel decisions. And our entire charter is set up as a city manager form of government. The only person that can discipline or terminate an employee in this city, other than the three people appointed by the council, has to go through the city manager's process. Even the personnel board doesn't terminate or discipline. they serve as a due process body to ensure that what the city manager's team, a department head, or someone's recommendation is done. So it's not that you can't do it, but if you want a personnel

Sonia R. CarvalhoItem 2

board, a police review commission that can tell the police chief how to do his job or her job, and tell the city manager how to do his job or her job, then your charter is going to have to match that, because right now that's not what your charter says. Can it be overcome? Certainly, if your citizens want to amend the charter that way.

Thai Viet PhanItem 2

That's fantastic. Thank you so much for the clarification. And with something like that, I think it's, I guess I say easy enough, but anything's easy enough coming out of your mouth, right? But to actually do, for example, say a provision that says the police oversight commission will make a recommendation in which the city manager shall only overturn or provide otherwise with a you know finding of you know what is it clear

Sonia R. CarvalhoItem 2

negligence or something you know. And that's what San Jose has done so that that's an example so that's why it can be done. The San Jose example I only gave you because I guess in I was reading today that in that type of body there was like 300 recommendations and only like 47 of them were upheld and that actually created a lot of animosity. You were trying to create the review board for peace and transparency, but it ended up creating animosity because when the city manager did review the police review committee's recommendations, in that instance, that manager wasn't always agreeing.

Thai Viet PhanItem 2

Yeah, so in that case, for example, I think I learned my, I always had a brain fart, but for example, the police oversight commission would make a recommendation in which the city manager will only overturn the recommendation with a clear convincing evidence demonstrating that their finding was insufficient or something like that. So that subject to any type of charter changes, right? We have that kind of language all the time in our ordinances and whatnot that says, hey, if the charter changes or the state law changes, then we also change with it.

Thai Viet PhanItem 2

In fact, we did this with the Costa-Hawkins comment in a rent stabilization, and we do that with other ordinances too. And the reason why I, again, am supportive of something that is clearly, I guess, distinct from any internal processes is to ensure that everyone who's involved with it and the public feel that everyone gets a fair shake. And it's not because our department isn't doing a good job. Actually, Chief, I think that since you've been here, there's been a lot of changes that's really positive. But at the same time, just because we're doing better doesn't mean we can't continue on down

Thai Viet PhanItem 2

that path, and I think this is a part of it.

Thai Viet PhanItem 2

And so that would be my recommendation to staff. I will send you my red lines as well as my comments. I'm happy to do that and have individual meetings with staff to provide additional comments on that. And I will leave it there for now. Thank you.

Great. Thank you. And maybe what we'll do is we'll do this, we just did our initial round of comments, maybe if there's any second thoughts that others may have. And I'll do mine and I'll go canvas the rest of the council to see if they have any additional comments for sort of the second round. So let me begin by, you know, so this has been a long path. So when somebody, I think Mayor Pro Tem said we're trying to rush this. Boy, this is the slowest rush I've ever seen because we started talking about this back in June 12, 2020. Today is now July 29, 2022. So, yeah, that is a very interesting way to define that period of time.

But, look, I think at this point, we do need the seven of us to deliberate because the ad hocs had it for nine months. If you want to talk about timing, they could have brought something back to us much, much earlier. They didn't. And I have my suspicions of how things got gummed up, but, you know, I'll keep those to myself. and maybe there's a fear of some people wanting to have this honest discussion at this point. I think we all said we want to. The premise of this was you have this whole subject matter that is public safety,

the police department receive about 40 to 50 percent of the general fund And I think what was initially talked about is that we have commissions for arts and culture. We have commissions for parks and rec. We have commissions for planning. And for something as important as this, to not have civilian participation, really doesn't make sense. I think our residents, our folks who live here, want to be part of this process. They want to also maybe not dictate but augment what process we already have. And I completely agree with Councilmember Fan.

I've been very supportive and impressed with the chief and the decisions he's made and the advances he's made in the department. But the chief is not going to be with us for 20 years. So to the extent that we'll have a new chief, well maybe he will, I don't know, if we're so lucky. But, you know, but to the extent that, you know, to the extent that we will have a new chief at some point, we want that person, him or her, to, you know, make sure that they have some guardrails.

And I, you know, again, you know, couldn't agree more with what we've done in the past is when the public submits a draft resolution, a draft ordinance, that's sort of our starting point. And if there's more than one, that's great, because I think staff then could take a look at it and see what makes sense in it and what doesn't. And these types of things should be driven by the community. We always said that we welcome input, and I hope those aren't just, you know, comments that are frivolous. I think we honestly do like people who do research and their residents that bring forth suggestions.

So that doesn't mean we're going to follow them blindly. We're going to have to make sure that they comply with the law. And I think here the guardrails are POBAR and civil service protections and our charter. So I think those things are going to define how far we can go. But I think that, look, I want to thank the city manager for putting in the budget that we have some funding for this commission. So we've set this up with respect to having funding for it to go forward.

And I think that as the chief was going through the review process, whether it's for an excessive force case, whether it's for a 1983 civil rights violation, there is a process and there are reviews and there is no doubt. We have the DA, we have IA. But I see that there really isn't that civilian resident element until it hits personnel. And so, you know, that's where I think we can have a concurrent path with a commission like this. And so that's what, you know, led me to be supportive of this, you know, years ago and supportive of it, you know, just recently.

Well, maybe not just recently, but back in June 2020 when we started with this council. So, you know, it looks like from what I read from or from what I heard from the city attorney's presentation part of this was that we can have investigatory power, subpoena power that's already embedded in the charter. So we have those we have those authorities. And, you know, as Councilmember Phan said, you know, I would hate for this to be a fruitless exercise where we go through and we have sufficient findings, and then in the end we're going to have a city manager that's going to disregard that.

And I think if that happens, there will be tension. And I do know the mayor of San Jose, and I know they've had some issues. But again, if there was a city manager that was disregarding credible findings, credible indicia of evidence and of misconduct, and him or her is still disregarding that, then I think the council has a decision to make on whether they want to have that city manager in that position. So there is some other relief. So I think that the accountability takes the next step, right? Because this is all about accountability for our officers. And I just want to say something to everybody who says, well,

if you want an oversight or citizen's review commission, you're anti-law enforcement. Couldn't be further from the truth. The whole idea is that, as was said, any profession has some sort of review authority on that. And you do have people from within, but you also have people from without, from outside of that profession, that this is such a sensitive area that the public is impacted by this. The authority that law enforcement has is so powerful that I think one of the council members said that we may get sued if we get this wrong. Well, we're getting sued already.

We've had I don't know how many misconduct cases that we've had to pay out millions of dollars. And that's because we haven't had this review process and this oversight process. But I can go back and think about cases that we've had to settle for bad shootings, for violations of people's civil rights. So look, we're already getting sued. This is supposed to remedy that because it will relieve those good officers of having colleagues that are putting them in jeopardy and putting the public in jeopardy. So I think that that is completely counterintuitive. And this isn't rocket science. Other cities have taken this up.

This isn't novel. This isn't first impression stuff. We're not breaking ground here. We're just looking at other models that cities have and, you know, going forward and seeing what best fits for Santa Ana. and what bets, you know, how we can tailor it to our needs. So, you know, my recommendation would be, again, I completely agree with Councilmember Fan. We have a good starting off point with an ordinance that was submitted. It's well drafted. We don't have to adopt every provision or term on that because it may conflict with those guardrails that I mentioned, our charter, POBAR, civil service protections.

but there are things that I think make sense in there. And I think with your recommendations, Madam City Attorney, and your team of Deputy City Attorneys, I think we can figure this out. We've done rent control, we've done the Housing Opportunity Ordinance, and you and your team and others on City staff have tackled some very, very complex issues. I see this as just one more of those. So I would just recommend, let's start with that. let's tackle that, maybe you can meet with us again, but this needs to come back to us. And this needs to come back because it's already been

since June of 2020 that we're dealing with this. It's over two years. So let's get this ball rolling, let's get all seven of us focused, and if it doesn't get approved, well at least we'll have the opportunity to deliberate on it. So those are my comments for now. I'll go ahead and make another round of the council members. So does anybody have their hand up first? That's virtual.

Mayor, I don't see, I'm sorry, Mayor, I don't see anybody with their hands up virtually at this moment.

Got it. I'll start just in the same sequence that I started before. So let me start with Councilmember Lopez, then Hernandez, then Peña Losa and Mendoza.

Thank you, Mayor Samantha. though um i i i am not opposed to the ad hoc being disbanded i i think it's time for the public and and this body to provide staff with direction it's very very difficult to be part of an ad hoc when you know it's not being productive and i don't want to waste staff's time anymore um and so i'm not going to be opposed to your decision

I think this is going to be a great opportunity for us to hear from the public and to really use a draft ordinance that a lot of talented people have worked on. And for our staff to say, this works, this doesn't work. You can't do this because of X, Y, and Z. And so I'm, you know, I am grateful to all the community members that have reached out that have asked, you know, where are you with this? What's going on? I think it's been a long time coming. And so that is going to be the direction to staff

that I provide you tonight. And I am not opposed to the decision of disbanding the ad hoc. Thank you.

Thank you. Let me go with council member Hernandez.

Johnathan Ryan HernandezItem 2

Thank you, Mayor Sarmiento. I too am supportive of disbanding the ad hoc. And that concludes my comments, Mr. Mayor. Thank you.

Thank you. Council member Mendoza.

Thank you, Mayor Sarmiento. I'm in favor of forming an oversight committee. However, I just want to ensure that we've covered all our bases and that we've looked at every angle so that we are protected and whoever we select as committee members, that there are some qualifications set and that they're met and that it's something that we need to have in alignment with our city charter. So if the ad hoc is disbanded, that's fine. we just need to be sure that the ordinance is something that we can live

and to survive the test of time and that we can have it in place 10 15 20 years and that it's It's not something that it will be disbanded by a new council coming in. So I do wanna hold individuals responsible when they are intentionally, when they have behavior issues, we definitely need to have a disciplinary action. And so I am in favor of the police oversight to ensure that we have less issues is with the city of Santa Ana getting sued

over inappropriate shootings or police force

that is an unexcusable force. So definitely, I think that maybe that this is something that we need in order to reduce the costs that we pay out in lawsuits. And I do see that there has been a reduction in lawsuits since Chief Valentine has come on board. So that has, we should give him a lot of credit for that and the officers because the training has been different. And with the Police Oversight Commission, I think that we will have an even better police force. So I'm in force, I'm in favor of the Oversight Committee

and in favor of disbanding at this time because that's the only way we'll be able to proceed. Thank you.

Thank you, council member. You cut out a little bit, but we got most of your comments. So thank you for those great comments. Let me go ahead and go to council member Peñalosa.

David PenalozaItem 2

Thank you, mayor. Again, I'm very supportive of having a police oversight commission. I think it's definitely long overdue. I guess the only question I have is, I mean, I didn't serve on the ad hoc. And so there's no concrete recommendation from the ad hoc is what I'm hearing.

Johnathan Ryan HernandezItem 2

Thank you, Councilman. I'm happy to answer that.

Go ahead, Daniel. My apologies, Councilmember Hernandez. Councilmember Peñalosa, the ad hoc committee did build consensus around some of the elements of the working draft ordinance. Those were establishing a commission with an independent oversight director. that would be composed of seven members, seven commissioners appointed by the council, that the commissioners would take an oath and execute a confidentiality agreement, participate in a ride-along, receive training for onboarding and ongoing, that the commission would meet within 30 days of all members being appointed,

that the city manager would recommend a budget for the commission, and that the rules for the commission would be developed by the commission in coordination and consultation with the independent oversight director and city manager those were the initial

David PenalozaItem 2

recommendations by the ad hoc committee okay thank you for that which i'm supportive of all of those things um so thank you to that i just i i know i i don't i i know the three members i I don't know who chaired it. I don't know any details because from the comment I heard that the ad hoc was not productive, that's what threw me off a little and wasn't sure if there was

David PenalozaItem 2

a concrete recommendation. So I'm supportive of all of those that you just listed, Daniel. So thank you to the ad hoc and whatever we could do to move this forward, I'd be supportive. That's it, Mayor. Thank you.

Thank you for those comments. Let me bring it back now to members of the council that are here in person. And let me start with Mayor Pro Tem,

Phil BacerraItem 2

THEN COUNCILMEMBER FAN. THANK YOU MAYOR. THERE'S NO SUCH THING AS A PRESCRIBED TIME TO CRAFT AN ORDINANCE. SO I GUESS IT'S KIND OF AN EYE OF THE BEHOLDER WHETHER IT'S NINE MONTHS IS TOO MUCH, TWO YEARS IS TOO MUCH. THE MOST IMPORTANT THING IS GETTING THIS CONSTRUCTED CORRECTLY AND MAKE SURE THAT IT WORKS FOR SANTA ANA. SANTA ANA IS TRULY A UNIQUE CITY AND YES, WE'RE NOT DOING EVERYTHING, YOU KNOW, We're not inventing everything here, but at the same time, I think there's a lot of fine-tuning for something like this for our community. And so taking that time to do it is very important.

Phil BacerraItem 2

A good chunk of that time was spent by staff doing the research. And I want to thank staff for taking the time to do that research. And I thought that was very helpful to us when we began our deliberations at the Ad Hoc. As the one who initiated the item, and my colleagues joined me on that item to create the Oversight Commission, I can tell you right now that I've been looking forward to the day that this would come before the full council. I definitely did not want to see it at the ad hoc forever. But what we did have at the ad hoc were very lengthy discussions about so many different

Phil BacerraItem 2

aspects of what this oversight commission and what the model that we would use would look like. And I think that those items deserve those discussions. And as staff indicated, you had components that the ad hoc committee agreed on. So it wasn't a complete waste. I think to say that it was not productive is truly not accurate. I think that it probably would take more time for us to come back with something for the full council to deliberate on. I think it would have been worth it because while at times there were some items that my colleagues wanted to do that I didn't agree with, I was looking forward to the discussion

Phil BacerraItem 2

at the council once we had something a little more complete to bring back. I do still question the timing of this, but nonetheless, to bring it back for the community to see, I'm looking forward to that, but I am very suspicious of the timing.

Great. Thank you for that. Let me go to Councilmember Pham.

Thai Viet PhanItem 2

Thank you to all my colleagues for your comments. Madam City Attorney, so I will send you the draft that I found. I do want to say that as an attorney, maybe I'm kind of unveiling some of our secrets, but very few attorneys draft things out of whole cloth. And so often, you know, you crib things from other jurisdictions and other riders because why reinvent the wheel? And I appreciate not billing everything by reinventing the wheel. So I know that some members of the ACLU, you know, they're attorneys, they're folks who work on this too, and I can guarantee you I do not agree with every single item that they brought before me.

Thai Viet PhanItem 2

And so with that, I will submit my comments. I do think maybe some direction for staff, or at least my thoughts, is that I think that there are general overarching areas that might have more disagreement than others. and any areas that I think the ad hoc really dove into that had a lot of disagreement or background information or memos or research, I'd love to see that myself so that I can see what they were also looking at if there was anything. So if there was a link to an article or to a research paper that they reviewed, I would

Thai Viet PhanItem 2

love to see that also. Thank you.

Great. Thank you. And I'm in agreement with the council member. I'll be submitting some red lines as well based upon what I've heard and what I've seen before me. But I think it is time that the public also sees us deliberate openly. You know, I think they're eager to also lend their comments, lend their insight, and help staff get to a conclusion that all of us can be, you know, be content with. So with that, thank you, everybody. Thank you for spending your Friday evening with us. It's 10 minutes before 9 and we are adjourned. Thank you.