Cudahy City Council
June 4, 2024

AMENDED AGENDA

A REGULAR MEETING

OF THE CUDAHY CITY COUNCIL
and JOINT MEETING of the
CITY OF CUDAHY AS SUCCESSOR AGENCY and HOUSING SUCCESSOR AGENCY

TO THE CUDAHY DEVELOPMENT COMMISSION
Tuesday, June 4, 2024 – 6:30 P.M.

Written materials distributed to the City Council within 72 hours of the City Council meeting shall be available for public inspection at www.cityofcudahy.com In compliance with the Americans with Disabilities Act (ADA) if you need special assistance to participate in this meeting, you should contact the City Clerk’s Office at (323) 773-5143 at least 72 hours in advance of the meeting.

Rules of Decorum
Under the Government Code, the City Council may regulate disruptive behavior that impedes the City Council Meeting.

Disruptive conduct may include, but is not limited to:
• Screaming or yelling during another audience member’s public comments period; • Profane language directed at individuals in the meeting room; • Throwing objects at other individuals in the meeting room; • Verbal altercations with other individuals in the meeting room; and • Going beyond the allotted three-minute public comment period granted.

When a person’s or group’s conduct disrupts the meeting, the Mayor or presiding officer will request that the person or group stop the disruptive behavior and WARN the person or group that they will be asked to leave the meeting room if the behavior continues.

If the person or group refuses to stop the disruptive behavior, the Mayor or presiding officer may order the person or group to leave the meeting room and may request that those persons be escorted from the meeting room. Any person who, without authority of law, willfully disturbs or breaks up a City Council meeting is guilty of a misdemeanor. (Pen. Code, § 403.)
Jose R. Gonzalez, Mayor
Elizabeth Alcantar, Vice Mayor
Martin U. Fuentes, Council Member
Cynthia Gonzalez, Council Member
Daisy Lomelí, Council Member
Amended 05/31/2024
Added Teleconference Information
This meeting will be conducted in
person, telephonically, and
electronically.

Council Chambers/Bedwell Hall
5240 Santa Ana Street
Cudahy, CA 90201
Teleconference Phone Number:
1 (669) 900-6833
Meeting ID: 881 6335 3903
https://us06web.zoom.us/j/88163353903
Mayor Jose R. Gonzalez will be
Teleconferencing From:

Business Center Room at the Hilton
Downtown Portland
921 SW Sixth Avenue Portland, OR 97204

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

1. CALL TO ORDER

2. ROLL CALL
Council / Agency Member Fuentes
Council / Agency Member Gonzalez
Council / Agency Member Lomelí
Vice Mayor / Vice Chair Alcantar
Mayor / Chair Gonzalez

3. APPROVAL OF AGENDA

4. PLEDGE OF ALLEGIANCE

5. LAND ACKNOWLEDGMENT
We would like to acknowledge that the land we inhabit today was once known as Tovangaar, the home of the Gabrieleño-Tongva people. We show our respects to the Gabrieleño-Tongva people, as well as all Indigenous people, past, present, and future, and honor their labor as original caretakers of this land. We commit to uplifting the Gabrieleño-Tongva people, invite you to acknowledge the history, and join us in caring for this land.

6. PRESENTATIONS
A. Certificate of Recognition to Recipients of the Cudahy to College and Career Scholarship

7. PUBLIC COMMENTS
(Each member of the public may provide a public comment in person, telephonically or electronically.

In person participants must submit one comment card if they wish to address the City Council. Only speakers that submit a comment card within the first 20 minutes of the meeting will be permitted to speak. Remote participants may provide public comment by clicking the hand icon on Zoom or pressing star (*) nine (9) on the telephone, if they wish to address the City Council. Members of the public are permitted to speak for three (3) minutes concerning items under the City Council’s jurisdiction, including items on the council agenda.)
(Any person who, without authority of law, willfully disturbs or breaks up a City Council meeting is guilty of a misdemeanor. (Pen. Code, § 403).)

8. CITY COUNCIL COMMENTS / REQUESTS FOR AGENDA ITEMS (Each Council Member is limited to three minutes.)
(This is the time for the City Council / Agency to comment on any topics related to “City Business,” including announcements, reflections on city / regional events, response to public comments,

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

suggested discussion topics for future council meetings, general concerns about particular city matters, questions to the staff, and directives to the staff (subject to approval / consent of the City Council majority members present, regarding staff directives). Each Council / Agency Member will be allowed to speak for a period not to exceed three (3) minutes. Notwithstanding the foregoing, the City Council Members shall not use this comment period for serial discussions or debate between members on City business matters not properly agendized. The City Attorney shall be responsible for regulating this aspect of the proceeding.)

9. CITY MANAGER REPORT (information only)

10. REPORTS REGARDING AD HOC, ADVISORY, STANDING, OR OTHER COMMITTEE

MEETINGS

11. WAIVER OF FULL READING OF RESOLUTIONS AND ORDINANCES (Consideration to waive full text reading of all Resolutions and Ordinances by single motion made at the start of each meeting, subject to the ability of the City Council / Agency to read the full text of selected resolutions and ordinances when the item is addressed by subsequent motion.) (COUNCIL / AGENCY)
Recommendation: Approve the Waiver of Full Reading of Resolutions and Ordinances.

12. CONSENT CALENDAR
(Items under the Consent Calendar are considered routine and will be enacted by one motion, prior to the vote to approve the Consent Calendar, each Council Member shall have a maximum of three (3) minutes to comment on the Consent Calendar as a whole. There will be no separate discussion of these items unless a Council / Agency Member so requests specific item(s) be removed from the Consent Calendar for separate action. Items may only be considered as a separate action if either (1) a Council Member must recuse themselves due to a conflict of interest or (2) a Council Member has specific questions for City Staff. Items called for separate discussion will be heard as the next order of business.) A. Consideration to Review and Approve the Draft Minutes of May 21, 2024, for the Regular Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission (page 11) Presented by the City Clerk
Recommendation: The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for May 21, 2024.

B. Direct Staff to Begin the Review of the City’s Conflict of Interest Code (page 25) Presented by the City Clerk

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

Recommendation: It is recommended that the City Council direct staff to review the conflict of interest code and file the 2024 Local Agency Biennial Notice by October 1, 2024.

C. Consideration to Adopt Statement of Investment Policy (page 35) Presented by the Finance Director
Recommendation: The City Council is requested to adopt Resolution No. 24-12 approving the Statement of Investment Policy.

D. Conduct the Second Reading of Ordinance No. 743 of the City Council of the City of Cudahy approving Municipal Code Text Amendment No. 2024-04 to amend Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Peace, Morals and Welfare) of the Cudahy Municipal Code (page 51) Presented by the Senior Planner
Recommendation: Staff recommends that the City Council take the following actions:

1. Conduct the second reading Ordinance No. 743 of the City Council of the City of Cudahy, California, approving Municipal Code Text Amendment No. 2024-03 amending Chapter 9.08 (Alcoholic
Beverages) of Title 9 (Public Peace, Morals and Welfare) of the Cudahy Municipal Code.

E. Conduct the Second Reading of Ordinance No. 744 of the City Council of the City of Cudahy approving Zoning Code Text Amendment (“ZTA”) No. 2024-01 to amend Chapters 20.16, 20.20,

20.24, 20.28, 20.30, 20.52, 20.56, 20.64, 20.84, and 20.88 of Title 20 (Zoning Code) of the Cudahy Municipal Code (“CMC”) (page 59)
Presented by the Senior Planner
Recommendation: Staff recommends that the City Council take the following actions:

2. Conduct the second reading of Ordinance No. 744 (Attachment A) of the City of Cudahy, California, recommending the City Council to approve Zoning Code Text Amendment No. 2024-01 amending Title 20 (Zoning Code), Chapters 20.16, 20.20, 20.24, 20.28, 20.30, 20.52,

20.56, 20.64, 20.84 and 20.88 of the CMC.

F. Conduct the Second Reading of Ordinance No. 745 of the City Council of the City of Cudahy adding a New Chapter, Chapter 15.44 (Electric Vehicle Charging Station), to Title 15 (Buildings and Construction) of the Existing CMC as Proposed by Municipal Code Text Amendment No. 2024-03 (page 75)

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

Presented by the Building Official
Recommendation: Staff recommends that the City Council of the City of Cudahy (the “City”):

1. Conduct the second reading Ordinance No. 745 (Attachment A) of the City Council of the City of Cudahy, California, approving adding a new chapter, Chapter 15.44 (Electric Vehicle Charging Station), to Title 15 (Buildings and Construction) of the existing CMC as proposed by Municipal Code Text Amendment No. 2024-03.

13. PUBLIC HEARING
*The Public Hearing scheduled to consider the adoption by first reading of an Ordinance repealing Ordinance No. 677 terminating Development Agreement No. 18-012C, between the City of Cudahy and 420 Club, LLC, and revoking Commercial Cannabis Permit No. 18-0019 will be rescheduled and re-noticed to a date uncertain.

A. Introduction and adoption by first reading of Ordinance No. 746 Repealing Ordinance No. 681 terminating Development Agreement No. 18-021C, between the City of Cudahy and Davina, LLC (page 87)
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open public hearing and receive comments and testimony; and

2. Make a determination that Davina, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-021C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 746 (Attachment A) repealing Ordinance No. 681 terminating DA No. 18-021C, between the City of Cudahy and Davina, LLC; and

4. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

B. Introduction and adoption by first reading of Ordinance No. 747 Repealing Ordinance No. 678 terminating Development Agreement No. 18-016C, between the City of Cudahy and Genius Distribution, LLC (page 1041)
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s):

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

1. Open public hearing and receive comments and testimony; and

2. Make a determination that Genius Distribution, LLC (“Operator”) is not in compliance with the terms and conditions of its Development Agreement (“DA”) No. 18-016C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 747 (Attachment A) repealing Ordinance No. 678 terminating DA No. 18-016C, between the City of Cudahy and Genius Distribution, LLC; and

4. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

C. Introduction and adoption by first reading of Ordinance No. 748 repealing Ordinance No. 682 terminating Development Agreement No. 18-022C, between the City of Cudahy and Herbal Dragon, LLC (page 1949)
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open public hearing and receive comments and testimony; and

2. Make a determination that Herbal Dragon, LLC (“Operator”) is not in compliance with the terms and conditions of its Development Agreement (“DA”) with the City and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading, Ordinance No. 748 (Attachment A) repealing Ordinance No. 682 terminating DA No. 18-022C, between the City of Cudahy and Herbal Dragon, LLC; and

4. Determine these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

D. Introduction and adoption by first reading of Ordinance No. 749 repealing Ordinance No. 680, terminating Development Agreement No. 18-020C, between the City of Cudahy and Daniel and Goliath, LLC. (page 2891)
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open public hearing and receive comments and testimony; and

2. Make a determination that Daniel and Goliath, LLC (“Operator”) is not in compliance with the terms and conditions of Development

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

Agreement (“DA”) No. 18-020C with the City and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading t Ordinance No. 749 (Attachment A) repealing Ordinance No. 680 terminating DA No. 18-020C, between the City of Cudahy and Daniel and Goliath, LLC; and

4. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

14. BUSINESS SESSION
A. Approval of First Amendment to Professional Services Agreement with SWA Group, Inc. for Geotechnical Services for Site 3 and Site 4 of the Los Angeles River Improvement Project (page 3901) Presented by the Administrative Analyst
Recommendation: The City Council is requested to approve the First Amendment to Professional Services Agreement (PSA) with SWA Group, Inc. for Geotechnical Services for Site 3 and Site 4 of the Los Angeles River Improvement Project in a fixed sum of $24,680.

B. Approval of the First Amendment to the Purchase and Sale Agreement for the property located at 8420 Atlantic Avenue, in Cudahy, California (page 3955) Presented by the Community Development Director
Recommendation: Staff recommends that the City Council take the following actions:

1. Approve the First Amendment to the Purchase and Sale Agreement (Attachment A) for the real property located at 8420 Atlantic Avenue, Cudahy, California (Assessor Parcel Numbers: 6224-034-014; 6224- 034-032; 6224-034-040; and 6224-034-041) (“Property”), and authorize the City Manager to execute all related documents; and

2. Determine that the Project is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption).

C. Request to Consider the Approval of a Reimbursement Agreement between the City of Cudahy and Local Coordinating Alliance 1 (LCA1) for Shelter Beds Within the Salvation Army Bell Shelter (page 4005)

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

Presented by the Community Development Director
Recommendation: It is recommended that the City Council take the following action(s):

1. Approve the Reimbursement Agreement between the City of Cudahy and LCA1 for the Bell Salvation Army Bell Shelter Beds not to exceed amount of $31,086.00 (Attachments A and B).

2. Authorize the City Manager to execute the contract and all other necessary documentation.

D. Adoption of Proposed Resolution No. 24-13: Permanent Local Housing Allocation (PLHA) Program Grant Funding Eligible Activity for Year 4 (page 4091) Presented by the Community Development Director
Recommendation: Staff recommends that the City Council adopt Resolution No. 24-13 which approves the following action(s):

1. Elect eligible activitity for Year 4 of the 5-year Permanent Local Housing Allocation Program grant period for Supportive Services Case Management.

E. Adoption of Proposed Resolution No. 24-14, A Resolution of the City Council of the City of Cudahy Adopting the Salary Plan for City Employees (page 4115) Presented by the Finance Director
Recommendation: The City Council is requested to approve Resolution No. 24-14, of the City Council of the City of Cudahy adopting the Salary Plan for City employees.

F. Adoption of Proposed Resolution No. 24-15, A Resolution of the City Council of the City of Cudahy Adopting the FY 2024-25 Classification Plan (page 4137) Presented by the Finance Director
Recommendation: The City Council is requested to approve Resolution No. 24-15, A Resolution of the City Council of the City of Cudahy adopting the Fiscal Year (FY) 2024-25 Classification Plan.

G. Adoption of Proposed Resolution No. 24-16 Replacing and Superseding Resolution No. 23-27, Designating Holidays on which City Offices Shall be Closed for Fiscal Year 2024-25 (page 4371) Presented by the Human Resources Manager

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

Recommendation: The City Council is requested to adopt proposed Resolution No. 24-16, Designating Holidays on which City Offices Shall be Closed for Fiscal Year 2024-25.

H. Adoption of Proposed Resolution No. 24-17 (1) Calling For and Giving Notice of a General Municipal Election to Be Held on Tuesday, November 5, 2024 for the Election of Two (2) City Councilmembers; (2) Requesting that the Board of Supervisors of the County of Los Angeles Grant the City’s Request for Consolidation of Said General Municipal Election With the November 5, 2024 Statewide General Election Administered by the Registrar-Recorder/County Clerk of the County of Los Angeles (“County Clerk”); (3) Requesting that the County Clerk Provide Specific Election Administration Services in Connection with the City’s General Municipal Election; (4) Adopting Regulations for Candidates for Elective Office Regarding Candidate Statements; and (5) Providing for the Determination of Tie Votes By Lot Pursuant to Elections Code Section 15651 (A) (page 4377)
Presented by the City Clerk
Recommendation: The City Council is requested to approve proposed Resolution No. 24-17:

1. Calling for and giving notice of a General Municipal Election to be held on Tuesday, November 5, 2024, for the Election of two (2) City Councilmembers;

2. Requesting that the Board of Supervisors of the County of Los Angeles grant the City’s Request for Consolidation of said General Municipal Election with the November 5, 2024 Statewide General Election administered by the Registrar-Recorder/County Clerk of the County of Los Angeles (“County Clerk”);

3. Request the County Clerk provide specific election administration services in connection with the City’s General Municipal Election;

4. Adopt regulations for candidates for elective office regarding candidate statements; and

5. Provide for the determination of tie votes by lot pursuant to Elections Code Section 15651(a).

I. Adoption of Proposed Resolution No. 24-18 Electing the Population and Inflation Factors and Establishing the City’s Fiscal Year (FY) 2024-2025 Appropriations Limit (GANN Limit) (page 4387) Presented by the Finance Director

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
June 4, 2024, at 6:30 P.M.

Recommendation: The City Council is requested to adopt proposed Resolution No. 23-18 confirming the population and inflation factors used to calculate the annual Appropriation Limit (GANN Limit) and establish the City’s GANN Limit for Fiscal Year (FY) 2024-2025.

J. Adoption of Resolution No. 24-19 Approving Proposed Fiscal Year (FY) 2024-25 City of Cudahy Capital and Operating Budget (City Budget) (page 4397)
Presented by the Finance Director
Recommendation: The City Council is requested to adopt Resolution No. 24-19, adopting the Proposed FY 2024-25 City Capital and Operating Budget.

15. COUNCIL DISCUSSION – NONE

16. CLOSED SESSION – NONE

17. CLOSED SESSION ANNOUNCEMENT – NONE

18. ADJOURNMENT
I, Richard Iglesias, hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the City’s Website, City Hall, Clara Park, and Lugo Park not less than 72 hours prior to the meeting. A copy of said Agenda is on file in the City Clerk’sOffice.

Dated this 31st day of May 2024
Richard Iglesias
City Clerk

“Serving the People” "Sirviendo A La Comunidad"
Staff Report
06/04/2024 Page 1 of 2

STAFF REPORT
Date: June 4, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Richard Iglesias, City Clerk
Subject: Consideration to Review and Approve the Draft Minutes of May 21, 2024, for the Regular Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission

RECOMMENDATION
The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for May 21, 2024.

BACKGROUND / ANALYSIS
On December 12, 2016, the City Council of the City of Cudahy adopted Resolution No. 16-38, approving the use of summary action minutes, meant to allow the City Clerk's Office to write the minutes in brief, assuring a record of Council's actions, due to having a recording of the full Council Meeting on the City’s website.

Historically
The Municipal Clerk is one of the oldest professions in government, dating back to 1272 A.D., originating in England. The record keeper then was called Remembrancer, an English official whose job was to remind the Lord Treasurer and Barons of Court, of business pending.

Years later, in the 1600s, when early colonists came to America, the office of the Clerk was one of the first offices to be established. Over the years, the City Clerk’s office has become the core for local government, and the liaison to the residents of the Community. The Municipal Clerk (City Clerk) is the record keeper of a City’s recorded history.

Item Number
12A

“Serving the People” "Sirviendo A La Comunidad"
Staff Report
06/04/2024 Page 2 of 2
William Bennett Munro, a Canadian historian, and political scientist, who taught at Harvard University and the California Institute of Technology, stated in one of his first textbooks written: “No other office in municipal service has so many contacts. It serves the Mayor, the City Council, the City Manager (when there is one), and all administrative departments, without exception. All of them call upon it, almost daily, for some service or information. Its work is not spectacular, but it demands versatility, alertness, accuracy, and no end of patience.

The public does not realize how many loose ends of city administration this office pulls together.”
Moving forward to the present time, the City Clerk’s office today is generally responsible for keeping a record of City Council meetings; agreements; recordings of official documents; legal advertisements; municipal elections; commissions and committees current files; claims against the city; and other legal or official documents.

City Clerks are required to keep record of the proceedings (minutes) of Council meetings (Government Code Sections 36814 and 40801). Minutes are the official record of a meeting which provides a history of the Council’s decisions and actions.

CONCLUSION
The City Council is requested to approve the attached City Council / Agency Draft Minutes of the proceedings of May 21, 2024.

STRATEGIC PLAN CORRELATION
No correlation to the strategic plan.

FINANCIAL IMPACT
No Financial Impact.

ATTACHMENT
A. May 21, 2024, Draft Minutes
B. Resolution No. 16-38, approving the City Clerk’s use of Summary Action Minutes as the Official Record of the City Council proceedings.

City Council/Successor Agency Minutes of 5/21/2024` Page 1 of 10

MINUTES
CUDAHY CITY COUNCIL REGULAR MEETING and
CITY OF CUDAHY AS SUCCESSOR AGENCY and

HOUSING SUCCESSOR AGENCY TO THE CUDAHY

DEVELOPMENT COMMISSION JOINT MEETING
May 21, 2024, 6:30 P.M.

1. CALL TO ORDER
Vice Mayor / Vice Chair Alcantar called the meeting to order at 6:35 p.m.

2. ROLL CALL
PRESENT: Council / Agency Member Martin Fuentes
Council / Agency Member Cynthia Gonzalez
Council / Agency Member Daisy Lomelí
Vice Mayor / Vice Chair Elizabeth Alcantar
Mayor / Chair Jose R. Gonzalez
ABSENT: None
ALSO PRESENT: City Attorney, Stephanie Arechiga, City Clerk, Richard Iglesias, Assistant City Clerk, Estefania Zamora, Community Development Director, Juan Arauz, Finance Director, Joshua Calhoun, Community Services Director, Brenda Rodriguez, Assistant to the City Manager, Johncito “John” Peraza, Building Official, Raul Diaz, Senior Planner, Cecilia Madrigal, Assistant Planner, Jessica Guillen, and Administrative Analyst, Michael Hernandez.

3. APPROVAL OF AGENDA
Motion: Council Member C. Gonzalez motioned to approve agenda as is, seconded by Council Member Fuentes. Motion passed 5-0 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None

4. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Council Member Fuentes.

5. LAND ACKNOWLEDGEMENT
Attachment A Page 13 of 4584
City Council/Successor Agency Minutes of 5/21/2024` Page 2 of 10 The Land Acknowledgment was led by Council Member Lomelí.

We would like to acknowledge that the land we inhabit today was once known as Tovangaar, the home of the Gabrieleño-Tongva people. We show our respects to the Gabrieleño-Tongva people, as well as all Indigenous people, past, present, and future, and honor their labor as original caretakers of this land. We commit to uplifting the Gabrieleño-Tongva people, invite you to acknowledge the history, and join us in caring for this land.

6. PRESENTATIONS
A. Certificate of Recognition Awarded to Gloria Hernandez, Teacher B. ScholarMatch Program
C. Siemens Project Update
At 7:13 p.m. Mayor J. Gonzalez left Council Chambers.

7. PUBLIC COMMENTS
Benjamin Gutierrez commented on the citations being issued to his clients at location 8206 Salt Lake, requested the red paint no parking in front of his business be removed or changed to a 2-hour parking.

Barrie Grinberg expressed her support for the EV ordinance, requested City Council support item 13B, also requested City Council to update their policies like zoning code, general plan, and other documents to make her potential 0 emission vehicle charging station project possible.

At 7:18 p.m. Mayor J. Gonzalez returned to Council Chambers.

Antonio Sanchez shared information on IBEW (International Brotherhood of Electrical Workers) Local 11, shared his support for Ordinance No. 745, and asked City Council to direct staff to update the general plan, zoning code and other policies to make zero emission infrastructure in the city.

Susie de Santiago complained about the CART services, stated drivers are not stopping at the stops, driving too fast and are aggressive to the residents, shared her support on the electric vehicles, and commented on the streetlight’s replacements.

Nora Gutierrez introduced herself to the City Council as the California Public Utilities Commission liaison to serve as a resource to the community.

Samuel Brown spoke in support of the potential electric vehicles station project and shared environmental issues in Southeast Los Angeles.

Nayellie asked the City Council to encourage staff to update the current general plan, zoning code and other policies for the potential zero emissions truck charging project.

City Council/Successor Agency Minutes of 5/21/2024` Page 3 of 10 Bertha Martinez congratulated Gloria Hernandez on her retirement from Ellen Ochoa Learning Center, stated she is excited to hear about the charging station project, mentioned CART not stopping for residents, and the scholarship opportunities.

8. CITY COUNCIL COMMENTS / REQUESTS FOR AGENDA ITEMS
Council Member Fuentes shared his participation at LA County Sanitation District, Tacos with the City Manager, Grand Opening of Lilly’s Juice Bar and Epic Wings, Cudahy Clean Ad Hoc, Contract Cities, asked staff to prepare a proclamation on behalf of Transtech for their 35-year celebration, also participated in a emergency preparedness meeting, and requested to look into a new setting for a new City Hall.

Council Member C. Gonzalez thanked staff for all the accommodations for the requests she has made, mentioned she met with Inclusive Action to address vendors in the city and how we can partner, discussed safety at the parks, participated in the Keeping Cudahy Clean with Council Member Fuents, shared the SELA standoff event, requested a Resolution on protecting students first amendment right and rights to protest, and thanked Bell Chamber of Commerce for the nomination of Latina of the Year.

Council Member Lomelí thanked staff, shared her attendance at the grand openings, Mother’s Day basket giveaway delivery, stated she supports the university student encampment movement, shared already working on solidarity statement, requested to make sure we are not engaging in business that are profiting or contributing over the genocide, requested to work with staff on holding a space for everyone to come together, lastly, mentioned her support for the Southeast Los Angeles send off.

Vice Mayor Alcantar shared her attendance at the grand opening of Piara Pizza, Lilly’s Juice Bar and Epic Wings, attended the emergency preparedness training for City Council, Public Safety Ad Hoc, and also visited Cudahy, Wisconsin, shared she has received plenty of complaints with CART and requested staff reach out to the contractor for customer service residents are given, also mentioned Los Angeles County is not recommending Hub Cities to continue as the economic development support for the region and will be reaching out to staff to prepare a letter to reconsider.

Mayor J. Gonzalez commented on the Hub Cities and stated there is time to still fix the issue, mentioned the LED lights and can have potential complaints about how bright they are, and spoke regarding AI.

9. CITY MANAGER REPORT (information only)

10. REPORTS REGARDING AD HOC, ADVISORY, STANDING OR OTHER COMMITTEE MEETINGS – NONE
At 7:51 p.m. Council Member Lomelí left Council Chambers.

City Council/Successor Agency Minutes of 5/21/2024` Page 4 of 10

11. WAIVER OF FULL READING OF RESOLUTIONS AND ORDINANCES Motion: Council Member Fuentes motioned to waive full reading of resolutions and ordinances, seconded by Council Member C. Gonzalez. Motion passed 4-0-1 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Alcantar, and J. Gonzalez
NOES: None
ABSENT: Lomelí
ABSTAIN: None

12. CONSENT CALENDAR
A. Consideration to Review and Approve the Draft Minutes of May 7, 2024, for the Regular Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission
Presented by the City Clerk
Recommendation: The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for May 7, 2024.

B. Approval of the Local Agency Investment Fund (LAIF) for the Month of April 2024 Presented by the Finance Director
Recommendation: The City Council is requested to approve the Local Agency Investment Fund (LAIF) Report for the month of April 2024 in the amount of $12,864,594.90.

C. Approval of the City Demands and Payroll Including Statement of Investment for the Month of April 2024
Presented by the Finance Director
Recommendation: The City Council is requested to approve the Demands and Payroll in the amount of $1,399,214.40 including the Statement of Investments for the month of April 2024.

D. Adoption by Second Reading of Ordinance No. 742 approving Municipal Code Text Amendment No. 2024-02 to amend Chapter 8.52 (Fireworks) of Title 8 (Health and Safety) of the Cudahy Municipal Code
Presented by the Senior Planner

City Council/Successor Agency Minutes of 5/21/2024` Page 5 of 10 Recommendation: Staff recommends that the City Council take the following actions:

Adopt by second reading Ordinance No. 742 (Attachment A) of the City Council of the City of Cudahy, California, approving Municipal Code Text Amendment No. 2024-02 amending Title 8 (Health and Safety), Chapter 8.52 (Fireworks) of the Cudahy Municipal Code.

Motion: Vice Mayor Alcantar motioned to approve Consent Calendar items, seconded by Council Member C. Gonzalez. Motion passed 4-0-1 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Alcantar, and J. Gonzalez
NOES: None
ABSENT: Lomelí
ABSTAIN: None
At 7:54 p.m. Council Member Lomelí returned to Council Chambers.

13. PUBLIC HEARING
A. Conditional Use Permit No. 2024-01: A Request to allow the on-site consumption of beer and wine (Type “41” Alcoholic Beverage Control License) in conjunction with a new restaurant (Epic Wings) at 8017 Atlantic Ave., Suite 103 in the Civic Mixed Use (Civic MU) zone
Presented by the Assistant Planner
Recommendation: City staff recommends that the City Council take the following action(s): Open the public hearing and receive public comment; and Adopt Resolution No. 24-11 of the City Council of the City of Cudahy, California to approve Conditional Use Permit No. 2024-01 to allow the on-site consumption of beer and wine (Type “41”) at a new restaurant (Epic Wings); and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15301 (Class 1, Existing Facilities).

At 7:57 p.m. Mayor J. Gonzalez opened public comment.

Public Comments:

Susie de Santiago supported the item and suggested the City Council to approve the item.

At 7:58 p.m. Mayor J. Gonzalez closed public comment.

Motion: Council Member Fuentes motioned to adopt Resolution No. 24-11 of the City Council of the City of Cudahy, California to approve Conditional Use Permit No. 2024-01 to allow the on-site consumption of beer and wine (Type “41”) at a new restaurant (Epic

City Council/Successor Agency Minutes of 5/21/2024` Page 6 of 10 Wings); and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15301 (Class 1, Existing Facilities), seconded by Vice Mayor Alcantar. Motion passed 5-0 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None
B. Adoption by First Reading of Ordinance No. 743 approving Municipal Code Text Amendment No. 2024-04 to amend Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Peace, Morals and Welfare) of the Cudahy Municipal Code Presented by the Senior Planner
Recommendation: Staff recommends that the City Council take the following actions:

Open the public hearing and receive public comment; and adopt by first reading Ordinance No. 743 of the City Council of the City of Cudahy, California, approving Municipal Code Text Amendment No. 2024-04 amending Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Peace, Morals and Welfare) of the Cudahy Municipal Code; and Schedule a second reading of Ordinance No. 743 at the next regularly scheduled City Council meeting on June 4, 2024; and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 150601(b)(3).

At 8:02 p.m. Mayor J. Gonzalez opened public comment, there being none, closed public comment.

Motion: Council Member Fuentes motioned to adopt by first reading Ordinance No. 743 of the City Council of the City of Cudahy, California, approving Municipal Code Text Amendment No. 2024-04 amending Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Peace, Morals and Welfare) of the Cudahy Municipal Code; and Schedule a second reading of Ordinance No. 743 at the next regularly scheduled City Council meeting on June 4, 2024; and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 150601(b)(3), seconded by Council Member C. Gonzalez. Motion passed 5-0 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None
C. Adoption by first reading Ordinance No. 744 of the City Council of the City of Cudahy approving Zoning Code Text Amendment (“ZTA”) No. 2024-01 to amend Chapters

20.16, 20.20, 20.24, 20.28, 20.30, 20.52, 20.56, 20.64, 20.84, and 20.88 of Title 20 (Zoning Code) of the Cudahy Municipal Code (“CMC”)
Presented by the Senior Planner

City Council/Successor Agency Minutes of 5/21/2024` Page 7 of 10 Recommendation: Staff recommends that the City Council take the following actions:

Open the public hearing and receive public comment; and adopt by first reading Ordinance No. 744 of the City of Cudahy, California, recommending the City Council to approve Zoning Code Text Amendment No. 2024-01 amending Title 20 (Zoning Code), Chapters 20.16, 20.20, 20.24, 20.28, 20.30, 20.52, 20.56, 20.64, 20.84 and 20.88 of the CMC; and Schedule the second reading of Ordinance No. 744 at the next regularly scheduled meeting on June 4, 2024; and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3).

At 8:12 p.m. Mayor J. Gonzalez opened public comment, there being none, closed public comment.

Motion: Council Member Fuentes motioned to adopt by first reading Ordinance No. 744 of the City of Cudahy, California, recommending the City Council to approve Zoning Code Text Amendment No. 2024-01 amending Title 20 (Zoning Code), Chapters 20.16, 20.20,

20.24, 20.28, 20.30, 20.52, 20.56, 20.64, 20.84 and 20.88 of the CMC; and Schedule the second reading of Ordinance No. 744 at the next regularly scheduled meeting on June 4, 2024; and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3), seconded by Council Member C. Gonzalez. Motion passed 5-0 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None
D. Adoption by First Reading of Ordinance No. 745 Approving Adding a New Chapter, Chapter 15.44 (Electric Vehicle Charging Station), to Title 15 (Buildings and Construction) of the Existing CMC as Proposed by Municipal Code Text Amendment No. 2024-03
Presented by the Building Official
Recommendation: Staff recommends that the City Council take the following actions:

Open the public hearing and receive public comment; and adopt by first reading Ordinance No. 745 of the City Council of the City of Cudahy, California, approving adding a new chapter, Chapter 15.44 (Electric Vehicle Charging Station), to Title 15 (Buildings and Construction) of the existing CMC as proposed by Municipal Code Text Amendment No. 2024-03; and Schedule a second reading of Ordinance No. 745 at the next regularly scheduled City Council meeting on June 4, 2024; and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 150601(b)(3).

At 8:20 p.m. Mayor J. Gonzalez opened public comment.

City Council/Successor Agency Minutes of 5/21/2024` Page 8 of 10 Public Comments:

Barrie Grinberg reiterated her previous comments during public comment and requested the city to work together and mentioned will be submitting a project.

Susie de Santiago expressed her support for this item, shared her concerns regarding projects being exempt from CEQA, and asked for confirmation.

Antonio Sanchez recommended the City Council to move forward with this item, commented on upgrading infrastructure, and shared the four apprenticeships they have.

At 8:26 p.m. Mayor J. Gonzalez closed public comment.

Motion: Council Member Fuentes motioned to adopt by first reading Ordinance No. 745 of the City Council of the City of Cudahy, California, approving adding a new chapter, Chapter 15.44 (Electric Vehicle Charging Station), to Title 15 (Buildings and Construction) of the existing CMC as proposed by Municipal Code Text Amendment No. 2024-03; and Schedule a second reading of Ordinance No. 745 at the next regularly scheduled City Council meeting on June 4, 2024; and Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 150601(b)(3), seconded by Vice Mayor Alcantar. Motion passed 5-0 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None
At 8:34 p.m. Council Member Fuentes left Council Chambers.

14. BUSINESS SESSION
A. Presentation on the Los Angeles County Animal Care and Control Services 2024- 2029
Presented by the Community Service Director
Recommendation: The City Council is recommended to receive and file staff’s presentation.

Motion: Council Member C. Gonzalez motioned to receive and file the Los Angeles County Animal Care and Control Services 2024-2029 presentation, seconded by Council Member Lomelí. Motion passed 5-0 by the following roll call vote:

City Council/Successor Agency Minutes of 5/21/2024` Page 9 of 10 AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None
At 8:36 p.m. Council Member Fuentes returned to Council Chambers.

B. Discussion of Potential Ballot Measure for the November 5, 2024 Election, Extending Term Limits for Council Members
Presented by the City Attorney
Recommendation: The City Council is recommended and provided feedback as to the potential language for the ballot measure to be included in the November 5, 2024 election, extending term limits for Council Members.

Motion: Vice Mayor Alcantar motioned to approve direction to bring back official language to go on the ballot, extending term limits for Council Members, seconded by Council Member Lomelí. Motion passed 5-0 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None
C. Discussion and Direction – City Council Compensation Presented by the Finance Director
Recommendation: The City Council is recommended to discuss and provide direction as to whether they would like to increase the monthly stipend the City Council Members receive.

Motion: Mayor J. Gonzalez motioned to set the City Council compensation at $1,400 and bring back this item for the next meeting, seconded by Council Member Fuentes. Motion passed 5-0 by the following roll call vote:

AYES: Fuentes, C. Gonzalez, Lomelí, Alcantar, and J. Gonzalez NOES: None
ABSENT: None
ABSTAIN: None

15. COUNCIL DISCUSSION – NONE

16. CLOSED SESSION – NONE

City Council/Successor Agency Minutes of 5/21/2024` Page 10 of 10

17. CLOSED SESSION ANNOUNCEMENT – NONE

18. ADJOURNMENT
The City Council / Agency meeting adjourned at 9:24 p.m.

Jose R. Gonzalez
Mayor
ATTEST:

Richard Iglesias
City Clerk

Attachment
B

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
06/04/2024 Page 1 of 2

STAFF REPORT
Date: June 4, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Richard Iglesias, City Clerk
City Attorney’s Office
Subject: Direct Staff to Begin the Review the City’s Conflict of Interest Code

RECOMMENDATION
It is recommended that the City Council direct staff to review the conflict of interest code and file the 2024 Local Agency Biennial Notice by October 1, 2024.

BACKGROUND
The Political Reform Act requires every local government agency to review its conflict of interest code biennially with the code reviewing body (City Council) to determine if any amendments to the agency’s conflict of interest code are necessary.

ANALYSIS
Each local government agency is required to review its code at least every even-numbered year.

It is legally required that a conflict of interest code reflect the structure of the City and identify all officicals, employees, and consultants who should be filing a Form 700. City Clerk’s Office will begin the review and determine by October 1, 2024 if substantial changes to the city’s organizational structure since the last code were made. If amendments to the conflict of interest code are necessary the amended code will be presented to City Council for approval within 90 days of filing the notice.

Item Number
12B

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
06/04/2024 Page 2 of 2

CONCLUSION
Government Code Section 87306.5 requires that City Council, no later than July 1, 2024 direct staff to review the City’s conflict of interest code to determine if any amendents are required.

FINANCIAL IMPACT
None.

ATTACHMENTS
A. 2024 Conflict of Interest Code Biennial Notice Instructions for Local Agencies B. Resolution No. 22-67, Conflict of Interest Code

[email protected] 1.866.275.3772 or 916.322.5660
www.fppc.ca.gov FPPC • 076-04.2024 • Page 1 of 1

FAIR POLITICAL PRACTICES COMMISSION
2024 Conflict of Interest Code
Biennial Notice Instructions for Local Agencies
The Political Reform Act requires every local government agency to review its conflict of interest code biennially. A conflict of interest code tells public officials, governmental employees, and consultants what financial interests they must disclose on their Statement of Economic Interests (Form 700).

By July 1, 2024: The code reviewing body must notify agencies and special districts within its jurisdiction to review their conflict of interest codes.

By October 1, 2024: The biennial notice must be filed with the agency’s code reviewing body.

The FPPC has prepared a 2024 Local Agency Biennial Notice form for local agencies to complete or send to agencies within its jurisdiction to complete before submitting to the code reviewing body. The City Council is the code reviewing body for city agencies. The County Board of Supervisors is the code reviewing body for county agencies and any other local government agency whose jurisdiction is determined to be solely within the county (e.g., school districts, including certain charter schools). The FPPC is the code reviewing body for any agency with jurisdiction in more than one county and will contact them.

The Local Agency Biennial Notice is not forwarded to the FPPC.

If amendments to an agency’s conflict of interest code are necessary, the amended code must be forwarded to the code reviewing body for approval within 90 days. An agency’s amended code is not effective until it has been approved by the code reviewing body.

If you answer yes, to any of the questions below, your agency’s code probably needs to be amended.
• Is the current code more than five years old?
• Have there been any substantial changes to the agency’s organizational structure since the last code was approved?
• Have any positions been eliminated or re-named since the last code was approved? • Have any new positions been added since the last code was approved? • Have there been any substantial changes in duties or responsibilities for any positions since the last code was approved?
If you have any questions or are still not sure if you should amend your agency’s conflict of interest code, please contact the FPPC. Additional information including an online webinar regarding how to amend a conflict of interest code is available on FPPC’s website.

Attachment A Page 27 of 4584
RESOLUTION NO. 22-67

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

CUDAHY AMEDNING THE CITY'S CONFLICT OF
INTEREST CODE AND REPEALING RESOLUTION NO. 20-
39 IN ACCORDANCE WITH THE POLITICAL REFORM
ACT
WHEREAS, the City of Cudahy ("City") in accordance with the Political Reform Act, is required to adopt, promulgate and take action regarding the City's Conflict of Interest Code ("Code"); and
WHEREAS, a designated employee is anyone within the City who is an officer, employee, committee member or consultant who is designated in the Code to hold a position that entails the making or participation in the making of decisions which may foreseeably have a material effect on any financial interest (Government Code § 82019); and
WHEREAS, the term "designated employee" does not include public officials specified in Government Code § 87200, e.g. City Councilmembers, Planning Commissioners, City Manager, City Attorney, City Treasurer, etc., nor does it include a position which is solely clerical, ministerial or manual; and WHEREAS, Government Code§ 87306(a) requires the City amend its Code every two years when "change is necessitated by changed circumstances, including the creation of new positions which must be designated"; and WHEREAS, the City wishes to incorporate by reference 2 Cal. Code of Regs. § 18730, which contains the terms of a standard Conflict of Interest Code, which can be incorporated by reference, and which may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act.

BASED UPON THE ABOVE RECITALS, THE CITY COUNCIL OF THE CITY OF

CUDAHY, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:

SECTION 1: Conflict of Interest Code. The Political Reform Act. Government Code § 81000, et seq., requires State and local government agencies to adopt and promulgate Conflict of Interest Codes. The Fair Political Practices Commission has adopted a regulation, 2 Cal. Code of Regs. §18730, which contains the terms of a standard Conflict of Interest Code, which can be incorporated by reference, and which may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act after public notice and hearings.

Attachment B Page 28 of 4584
Resolution 22-67

SECTION 2: Repeal. The City of Cudahy hereby repeals all prior Resolutions and amendments that form the City of Cudahy's Conflict of Interest Code.

SECTION 3: Adoption. The terms of 2 Cal. Code of Regs. § 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference, along with the attached Exhibit A in which Public Officials and Employees are designated and Exhibit B in which Disclosure Categories are set forth, to constitute the Conflict of Interest Code of the City of Cudahy which is considered the "Agency" within the purview of this Code.

SECTION 4: Statements. Designated employees shall file their statements with the City Clerk, who shall be and perform the duties of filing officer for the City of Cudahy.

Statements will be available for inspection and reproduction pursuant to Government Code § 81008. The City Clerk shall make and retain a copy of all statements filed by the Mayor, Members of the City Council and Planning Commission, the City Manager, the City Attorney and the City Treasurer, and forward the originals of such statements to the Fair Political Practices Commission. The City Clerk shall retain the originals of the statements filed by all other officials and designated positions and make all statements available for public inspection and reproduction during regular business hours as set forth in Government Code§ 81008.)
SECTION 5: Public Officials and Employees Designated. Attached as Exhibit A to this Resolution and incorporated by reference herein is the list of Public Officials and Employees designated and covered by this code.

SECTION 6: Disclosure Categories. Attached as Exhibit B to this Resolution and incorporated by reference herein are the Disclosure Categories of this code.

SECTION 7: Saving Clause. Any change provided for in this Conflict of Interest Code shall not affect or excuse any offense or act committed or done or omission or any penalty or forfeiture incurred or accruing under any other Conflict of Interest Code; nor shall it affect any prosecution, suit, or proceeding pending or any judgment rendered in connection with any other Conflict of Interest Code.

SECTION 8: Effective Date. This Resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify to the passage and adoption of this Resolution.

PASSED, APPROVED AND ADOPTED by the City Council of the Ci regular meeting on this 6
th day of December 2022.

Resolution 22-67

STATE OF CALIFORNIA )

CERTIFICATION
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Resolution No. 22-67 was passed and adopted by the City Council of the City of Cudahy at a regular meeting held on the 6
th of December, 2022 and that said Resolution was
adopted by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Lozoya, Lomeli, Gonzalez, and Alcantar
None
Guerrero
None

Resolution 22-67

EXHIBIT A

CITY OF CUDAHY
Conflict of Interest Code
The Mayor, members of the City Council, members of the Oversight Board to the City of Cudahy as Successor Agency to the Former Cudahy Community Development Commission/Redevelopment Agency, members of the Planning Commission, the City Manager, the City Attorney, the City Treasurer, and all other city officials who manage public investments as defined by Section 18700.3 of title 2, division 6 of the California Code of Regulations, such as the Finance Director, are not required to be included in the Code but are subject to the mandatory disclosure requirements of the Political Reform Act (Gov. Code, §18700 et seq.)
List of Public Officials required to file disclosure statements (All are category 1 filers):

Mayor
City Council
City Manager
City Attorney
City Clerk
Director of Finance
Planning Commissioners
List of Members required to file disclosure statements (All are category 1 filers):

Senior and Community Service Commission
Recreation, Arts, and Cultural Heritage Commission
Parks and Environmental Justice Commission

LIST OF DESIGNATED EMPLOYEES AND DISCLOSURE CATEGORY
Department/Position Disclosure Category
Administrative Services Department
Administrative Services Director 1, 2
Assistant Recreation Program Coordinator 3,4
Parks and Recreation Prooram Manaoer 3,4
Recreation Program Coordinator 3
Citv Clerk's Office
Assistant City Clerk 1, 2
Deputy City Clerk 1, 2
Junior Deputy City Clerk 1, 2
City Manager's Office
Administrative Analyst 3, 5,6
Executive Assistant 1, 2
Management Analyst 3, 6
Communitv Development Department

Resolution 22-67

Building Inspector
Community Development Director
Community Preservation Officer
Municipal Enforcement Officer
Parking Enforcement Officer
Planning Assistant
Planning Associate
Public Safety and Services Manager
Senior Building Inspector
Senior Community Preservation Officer
Senior Parking Enforcement Officer
Senior Planner
Supportive Services Coordinator
Finance Department
Accountinq Technician
Purchasing and Grants Coordinator
Senior Accountant
Human Resources
Human Resources Manager
Public Works Department
Assistant City Engineer
Assistant Engineer
Associate Enqineer
Maintenance Superintendent
Maintenance Supervisor
Public Works Director/EnQineer
Consultants
1, 4, 5
1, 2
3,4, 5
3,4, 5
3,4, 5
1, 4, 5
1, 4, 5
4 1, 4, 5
3,4,5
3,4,5
1, 4, 5
6 3,4
3, 6
2 3
1, 3,4, 5
1, 3,4,5
1, 3,4,5
3,4,5
3 3,4,5
1, 2

Resolution 22-67

Exhibit B:

DISCLOSURE CATEGORIES
The disclosure categories listed below identify the types of economic interests that the designated position must disclose:

CA TE GORY 1: Real Property Interests
All interest in real property which is located in whole or in part within, or not more than two (2) miles outside, the jurisdiction of the CITY, including any leasehold, beneficial or ownership interest or option to acquire property.

CATEGORY 2: Investments/Sources of Income
All investments and business positions in business entities, and sources of income, including gifts, loans and travel payments, within the jurisdiction of the CITY.

CATEGORY 3: Contracting/Procurement
All investments and business positions in business entities, and sources of income, including gifts, loans and travel payments, that provide services, products, materials, machinery, vehicles or equipment of a type purchased or leased by the designated position's department, unit or division.

CATEGORY 4: Regulatory/Permits/Licensing Authority
All investments and business positions in business entities, and sources of income, including gifts, loans and travel payments, subject to the regulatory, permit, or licensing authority of the designated position's department, unit or division.

CATEGORY 5: Land Development/Construction/Acquisition
All investments and business positions in business entities, and sources of income, including gifts, loans and travel payments, that are engaged in land development, construction or the acquisition or sale of real property within the jurisdiction of the CITY.

CATEGORY 6: Grants/Service Providers
All investments and business positions in business entities, and sources of income, including gifts, loans and travel payments, or income from a nonprofit or other organization, if the source is of the type to receive grants or other monies from or through the CITY.

Blank Page

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
06/06/2023 Page 1 of 2

STAFF REPORT
Date: June 4, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Joshua Calhoun, Finance Director
Subject: Consideration to Adopt Statement of Investment Policy

RECOMMENDATION
The City Council is requested to adopt Resolution No. 24-12 approving the Statement of Investment Policy.

BACKGROUND

1. On June 6, 2023, the City Council approved Resolution 23-20 approving the Statement of Investment Policy

ANALYSIS
Pursuant to California Government Code Sections 53600 and 53630 et seq. and 53646, the City of Cudahy must adopt an annual investment policy by resolution.

The Statement of Investment Policy sets forth policies which shall govern the investment of the City’s funds. It will be used by the City’s Finance Director and other City officials and staff, as well as all other third-party providers of investment or investment-related services. Its purpose is to direct the prudent investment and protection of the City’s funds and investment portfolio.

The policy has been updated to better align with the California Government Code 53601.

CONCLUSION
The City Council is requested to adopt a resolution, approving the Statement of Investment Policy that will be effective for the 2024-2025 Fiscal Year.

Item Number
12C

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
06/06/2023 Page 2 of 2

STRATEGIC PLAN CORRELATION
Goal (Financial Stability and Transparency)
• Develop materials to educate the community about the City’s budget, finances, spending, and investments.
• Provide regular updates to the City Council and Community about the City’s finances.

FINANCIAL IMPACT
None.

ATTACHMENTS
A. Draft Resolution No. 24-12, Adopting Statement of Investment Policy.

B. Statement of Investment Policy.

1 RESOLUTION NO. 24-12

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF CUDAHY ADOPTING STATEMENT OF INVESTMENT
POLICY
WHEREAS, the City of Cudahy (“City”) has established a Statement of Investment Policy to set forth and identify policies of the City Council which may not otherwise be established in ordinances of the City, or which are restated to further amplify existing City policy; and
WHEREAS, all policies included in the Statement of Investment Policy are adopted by resolution.

WHEREAS, the City Council wishes to amend its Statement of Investment policy to better align with Government Code section 53601; and.

WHEREAS, such policy will provide for the safety of City investments, and secondarily ensure liquidity and yield; and.

WHEREAS, such policy will ensure strict investment guidelines with regards to investments, external portfolio managers, and capital wherewithal of brokering firms.

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF CUDAHY, CALIFORNIA, AS FOLLOWS:

SECTION 1. The Recitals set forth above are true and correct and are incorporated into this Resolution by reference.

SECTION 2. The City Council of the City of Cudahy amends its existing investment policy, which is attached and incorporated herein as Exhibit A.

SECTION 3. This Resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Cudahy at its regular meeting on this 4th day of June 2024.

Jose R. Gonzalez
Mayor
Attachment A Page 37 of 4584
ATTEST:

Richard Iglesias
City Clerk

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Resolution No. 24-12 was passed and adopted by the City Council of the City of Cudahy, signed by the Mayor and attested by the City Clerk at a regular meeting of said Council held on the 4th day of June 2024, and that said Resolution was adopted by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Richard Iglesias
City Clerk

"Exhibit A"

STATEMENT OF INVESTMENT POLICY

Investment Policy 24-25 Page 1 of 10 6/6/2023

CITY OF CUDAHY

STATEMENT OF INVESTMENT POLICY
I. INTRODUCTION
The City Council of the City of Cudahy (the “City”) recognizes its responsibility to prudently direct the investment of the City’s funds on behalf of the City’s existing and future residents. The City Council further recognizes that the City’s investment assets are essential to the City’s financial strength, the effective implementation of long-range financial plans, and ultimately its ability to respond to the needs of the community.

The investment policies and practices of the City of Cudahy take into consideration that California statutes authorize the City of Cudahy to finance acquisition or construction of various projects and capital assets through the issuance and sale of municipal securities, including but not limited to general obligation bonds and revenue bonds. Depending on the type and the authority for the issuance and sale of the bond, the City’s general fund and/or certain sources of city revenue may be pledged as security for the bonds. The bonding and the resulting security interest in city funds and revenue may supercede all or portions of this Policy.

This Statement sets forth policies which shall govern the investment of the City’s funds.

It will be used by the City’s Finance Director and other City officials and staff, as well as all other third-party providers of investment or investment-related services. Its purpose is to direct the prudent investment and protection of the City’s funds and investment portfolio.

II. POLICY
It is the policy of the City to invest public funds in a manner which will provide the highest investment return with maximum security while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds.

III. SCOPE
This Investment Policy applies to all financial assets of the City of Cudahy. The following funds are covered by this Investment Policy and are accounted for in the City's Annual Comprehensive Financial Report:

A) General Fund
B) Special Revenue Funds
C) Debt Service Funds
Attachment B Page 40 of 4584
Investment Policy 24-25 Page 2 of 10 6/6/2023
D) Capital Project Funds
E) Enterprise Funds
F) Internal Services Funds
G) Trust and Agency Funds
H) Any new funds created by the City Council
This Investment Policy does not apply to proceeds of bond issues and retirement funds held in trusts.

IV. PRUDENCE
Investments shall be made in the context of the "Prudent Investor" standard pursuant to Government Code Section 53600.3 which states in relevant part that:
"When investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” All investments purchased shall have daily liquidity or a final stated maturity date, upon which the full principal value of the security will be received. Although the investment will mature at full principal value, it is recognized that the market will vary throughout the life of the security. In a diversified portfolio it must be further recognized that occasional measured losses are inevitable due to economic, bond market, or individual security credit analysis. These occasional losses must be evaluated and considered within the context of the overall return.

The "Prudent Investor" standard shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

V. OBJECTIVE
The City's cash management system is designed to accurately monitor and forecast expenditures and revenues, which enables the City to invest its funds to the fullest extent possible. The objective of the investment portfolio is to meet the short- and long-term cash flow demands of the City. To achieve this objective, the portfolio will be structured to provide safety of principal and liquidity, while attempting to receive the highest yield obtainable.

Investment Policy 24-25 Page 3 of 10 6/6/2023
A. Safety of Principal
Safety of principal is the foremost objective of the City of Cudahy. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. Each investment transaction shall seek to ensure that capital losses are avoided, whether from securities default, broker-dealer default, or erosion of market value. To attain this objective, the City will diversify its investments by investing funds among a variety of securities and approved financial institutions. The City shall seek to preserve principal by mitigating the two types of risk in order of importance: credit risk and market risk.

1. Credit Risk Credit risk, defined as the risk of loss due to failure of an issuer of a security, shall be mitigated by purchasing U.S. Treasuries or high-grade securities. All investments beyond Treasury securities will be diversified so that the failure of any one issuer would not unduly harm the City's cash flow. Credit risk shall also be mitigated by prequalifying financial institutions, broker/dealers, intermediaries, and advisors with which the City does business.

2. Market or Interest Rate Risk Interest rate risk is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates. Interest rate risk may be mitigated by structuring the Funds so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity, and by investing operating funds primarily in shorter-term securities. The cash flow is updated on a daily basis and will be considered prior to the investment of securities, which will reduce the necessity to sell investments for liquidity purposes. Long-term securities shall not be purchased for the sole purpose of short-term speculation. Securities shall not be sold prior to maturity with the following exceptions, 1) a security whose credit declines or is expected to decline may be sold IF there is a reasonable expectation that the prompt payment of principal and interest becomes unlikely. A temporary or modest decline in a security’s credit rating should not in and of itself trigger a liquidation, 2) a security swap would improve the quality, yield, or target duration in the portfolio, or 3) liquidity needs of the portfolio require that the security be sold. The weighted average maturity of the funds will be limited to three years or less. Purchases of investments will be restricted to securities with a final stated maturity not to exceed five (5) years.

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B. Liquidity
This refers to the ability to "cash in" at any moment in time with a minimal chance of losing some portion of principal or accrued interest. Liquidity is an important quality especially when the need for unexpected funds occurs. The City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated.

C. Return On Investments
The City’s investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk constraints and the cash flow characteristics of the portfolio. A benchmark does not imply that the Finance Director will add additional risk to the portfolio in order to attain or exceed the benchmark.

VI. DELEGATION OF AUTHORITY
The City Council on an annual basis adopts a resolution approving the Investment Policy.

The Investment Policy authorizes the Finance Director to invest or deposit the City’s funds in accordance with California Government Code Sections 53600 and 53630 et seq. and all related State and Federal laws.

In the Finance Director’s absence, and subject to City Council approval, the Finance Director may assign investment responsibilities to the City Manager. The Finance Director will provide prior written notification to the City Manager and the City Council regarding the assignment of responsibilities. In the event that the Finance Director is unable to assign responsibility, the City Manager may select a designee. In addition, at the discretion of the Finance Director, cash monitoring and investment responsibilities can be assigned to a designated assistant and a surety bond will be obtained by the City for said assistant.

The responsibility for establishing, monitoring, and maintaining a strong system of investment controls and directing an independent audit of the investment function is delegated to the City Manager. The City Manager’s designee(s) may assist in carrying out these functions.

The City Council’s primary responsibilities over the investment function include establishing investment policies, annually reviewing such policies, reviewing monthly investment reports issued by the Finance Director and authorizing any deviations from the City’s Investment Policy.

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As permitted by Government Code 53601, the Finance Director may delegate day-to-day investment decision making and execution authority to an investment advisor. Eligible investment advisors must be registered with the Securities and Exchange Commission (SEC) under the Investment Advisors Act of 1940. The advisor will follow the Policy and such other written instructions as are provided.

VII. ETHICS AND CONFLICTS OF INTEREST
The Finance Director and other employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program or which could impair their ability to make impartial investment decisions. The Finance Director and investment employees shall disclose any material interests in financial institutions with which they conduct business within their jurisdiction. They shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio and shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City. The Finance Director and investment employees are required to file annual disclosure statements as required by the Fair Political Practices Commission (FPPC). During the course of the year, if there is an event subject to disclosure that could impair the ability of the Finance Director or investment employees to make impartial decisions, the City Council will be notified in writing within 10 days of the event.

VIII. QUALIFIED DEALERS
The City shall transact investments only with banks, savings and loans, investment security dealers and the State of California Local Agency Investment Fund. The purchase by the City of any investment, other than those purchased directly from the issuer, shall be purchased directly from an institution licensed by the State as a broker/dealer, as defined in Section 25004 of the Corporations Code, who is a member of the Financial Industry Regulatory Authority (FINRA), or a member of a Federally regulated securities exchange, a National or State Chartered Bank, a Federal or Savings Association, or a brokerage firm designated as a Primary Government Dealer by the Federal Reserve Bank. Exceptions to this rule will be made only after thorough research and documented confirmation of financial strength and reputation and after approval by the City Manager. Investment staff shall investigate dealers who wish to do business with the City in order to determine if they are adequately capitalized, market securities appropriate to the City’s needs, and are recommended by managers of portfolios similar to the City’s.

The City shall at least annually send a copy of the current investment policy to all dealers approved to do business with the City. Confirmation of receipt of this policy shall be considered as evidence that the dealer understands the City’s investment policies and intends to show the City only appropriate investments.

Investment Policy 24-25 Page 6 of 10 6/6/2023
IX. AUTHORIZED AND SUITABLE INVESTMENTS
The investments set forth in this section are authorized investments pursuant to Section 53601 et seq. of the Government Code and are authorized investments for the City subject, however, to the prohibitions set forth in Section X of this Investment Policy.

A. U.S. Treasury Instruments. United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.

B. Federal Agency Securities. Federal agency or United States governmentsponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

C. Municipal Bonds
City Bonds – Bonds issued by the city, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the City that is rated in a rating category of “A” long term, or “A-1” short term, the equivalent or higher by a nationally recognized statistical rating organization (NRSRO).

California State Bonds – Registered state warrants or treasury notes or bonds of the State of California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the State or by a department, board, agency, or authority of the State that are rated in a rating category of “A” long term, or “A-1” short term, the equivalent or higher by a NRSRO.

CA Local Agency Bonds. Bonds, notes, warrants, or other evidences of indebtedness of a local agency within this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency that are rated in a rating category of “A” long term, or “A-1” short term, the equivalent or higher by a NRSRO.

Other 49 States’ Bonds – Bonds, notes, warrants, or other evidences of indebtness of any local agency within the State of California and any of the other 49 states, including bonds payable solely out of the revenues from a revenueproducing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency that are rated in a rating category of “A” long term, or “A-1” short term, the equivalent or higher by a NRSRO.

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D. Deposits. FDIC insured or fully collateralized bank deposits, including, but not limited to, demand deposit accounts, savings accounts, market rate accounts, and certificates of deposits in financial institutions located in California. The amount on deposit in any financial institution shall not exceed the shareholder’s equity. To be eligible to receive City deposits, the financial institution must have received a minimum overall satisfactory rating, under the Community Redevelopment Act, for meeting the credit needs of California Communities in its most recent evaluation. Bank deposits are required to be collateralized as specified under Government Code Section 53630 et seq.

The Finance Director may waive the collateralization requirements for any portion that is covered by federal deposit insurance. The City shall have a signed agreement with any depository accepting City funds per Government Code Section 53649. There is no limit on the percentage of the portfolio that may be invested in this category. However, a maximum of 10 percent of the portfolio may be invested in time deposits.

E. Negotiable Certificates of Deposit. Negotiable certificates of deposit issued by a nationally or state-chartered bank, a savings association or a federal association (as defined by section 5102 of the Financial Code), a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank. Purchases are limited to securities rated in a rating category of “A” (long-term) or “A-1” (short-term) or their equivalents or better by an NRSRO. A maximum of 30% of the portfolio may be invested in this category.

F. Bankers’ Acceptance Notes. Bankers’ acceptances otherwise known as bills of exchange or time drafts that are drawn on and accepted by a commercial bank. Purchases of bankers’ acceptances shall not exceed 180 days’ maturity or 40 percent of the agency’s moneys that may be invested pursuant to this section. However, no more than 30 percent of the agency’s moneys may be invested in the bankers’ acceptances of any one commercial bank pursuant to this section.

G. Commercial Paper
Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a nationally recognized statistical rating organization (NRSRO). The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (1) or (2):
(1) The entity meets the following criteria: (A) Is organized and operating in the United States as a general corporation; (B) Has total assets in excess of five hundred million dollars ($500,000,000), and (C) Has debt other than commercial paper, if any, that is rated in a rating category of “A” or its equivalent or better by an NRSRO.
(2) The entity meets the following criteria: (A) Is organized within the United States as a special purpose corporation, trust, or limited liability company, (B) Has program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond, and (C) Has commercial paper that is rated “A-1” or better, or the equivalent, by an NRSRO.

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Purchases are limited to securities that have a maximum maturity of 270 days.

A maximum of 25% of the portfolio may be invested in this category.

H. Money Market Funds (“MMF”). Purchases are restricted to Government Money Market Funds. Furthermore, these Money Market Funds must have met either of the following criteria: (A) Attained the highest ranking or the highest letter and numerical rating provided by not less than two NRSROs, or (B) Retained an investment advisor with not less than five years’ experience and registered or exempt from registration with the SEC, with assets under management in excess of five hundred million dollars ($500,000,000). Whenever the City has any funds invested in a MMF, the Finance Director shall maintain on file a copy of the MMF’s current information statement. A maximum of 20% of the portfolio may be invested in this category.

I. State of California’s Local Agency Investment Fund (LAIF). The maximum amount invested in this category may not exceed the limit set by LAIF for operating accounts.

J. Joint Powers Authority Investment Pools. Joint Powers Authority Investment Pools are organized pursuant to Section 6509.7 of the Government Code that invests in the securities and obligations under Sections 53601 of the California Government Code.

To be eligible for City investments, the joint powers authority issuing the shares shall have retained an investment adviser that is registered or exempt from registration with the Securities and Exchange Commission, the adviser has not less than five years of experience investing in the securities and obligations authorized in under Section 53601 and the adviser has assets under management in excess of five hundred million dollars ($500,000,000).

X. PROHIBITED INVESTMENTS AND TRANSACTIONS
Investments not described herein, including, but not limited to range notes, reverse repurchase agreements, zero coupon bonds, inverse floaters, common stocks, futures, options, mortgage-derived, interest-only strips and derivatives are prohibited from use in the City’s investment portfolio.

The City shall not engage in securities lending, short selling, or other hedging strategies.

The City shall not purchase or sell securities on margin.

XI. COLLATERALIZATION
Collateralization will be required on two types of investments: certificates of deposit and repurchase agreements. Deposits per institution are insured up to certain dollar amounts by the FDIC and Certificates of Deposit can be supported by either U.S. Government agency notes of mortgages currently held by the bank or savings and loan.

Collateral will always be held by an independent third party with whom the City has a current custodial agreement. A clearly marked evidence of ownership (safekeeping

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receipt) must be supplied to the City and retained. The right of collateral substitution is granted.

XII. SAFEKEEPING AND CUSTODY
All security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a delivery-versus-payment basis. Securities will be held by a third party custodial designated by the Finance Director and evidenced by safekeeping receipts.

XIII. DIVERSIFICATION
The City operates its investment pool with many State and self-imposed constraints. It does not speculate. Assets shall be diversified to eliminate the risk of loss resulting from over concentration of assets in a specific maturity, a specific issuer, or a specific class of securities.

The City will diversify its investments by security type, institution, and maturity/call dates. With the exception of U.S. Treasury securities, federal agency securities and authorized pools, no more than 5% of the City’s total investment portfolio will be invested in a single security type or with a single financial institution.

XIV. MAXIMUM MATURITIES
To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than 5 years from the date of purchase.

Debt service reserve funds may be invested in securities exceeding five years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the funds.

XV. INTERNAL CONTROL
The Finance Director shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with the City’s Investment Policy and for establishing internal controls that are designed to prevent losses due to fraud, negligence, and third-party misrepresentation.

Internal controls deemed most important shall include (but not limited to): avoidance of collusion; separation of duties and administrative controls; separating transaction authority from accounting and record keeping; custodial safekeeping; clear delegation of authority; management approval and review of investment transactions; specific

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limitations regarding securities losses and remedial action; written confirmation of telephone transactions; documentation of investment transactions and strategies; and monitoring of results.

XVI. PERFORMANCE STANDARDS
The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs.

The City’s investment strategy is passive. Passive investment portfolio management generally indicates that the Finance Director will purchase an instrument and hold it through to call or maturity, and then reinvest the monies. Although the City’s investment strategy is passive, this will not restrict the Finance Director from evaluating when swaps are appropriate or if the sale of an instrument is prudent prior to final maturity. Given this strategy, the basis used by the Finance Director to determine whether market yields are being achieved shall be the Local Agency Investment Funds (LAIF).

XVII. REPORTING
The Finance Director shall provide the City Council monthly investment reports which provide a clear picture of the status of the current investment portfolio. The management report shall include the type of investments, the issuers, maturity dates, par values, and the current market values of each component of the portfolio, including funds managed for the City by third party safekeeping custodians. The report will also include the source of the portfolio valuation. As specified in California Government Code Section 53646 (e), if all funds are placed in LAIF or FDIC-insured accounts, the foregoing report elements may be replaced by copies of the latest statements from such institutions. The report must also include a certification that the City will meet its expenditure obligations for the next six months as required by California Government Code Section 53646 (b)(3) and that the City’s portfolio is in compliance with this investment policy, or the manner in which the portfolio is not in compliance as required by California Government Code Section 53646 (b)(2). The Finance Director shall maintain a complete and timely record of all investment transactions.

XVIII. INVESTMENT POLICY ADOPTION
The City’s investment policy shall be adopted annually by resolution of the City Council.

The policy shall be reviewed annually by the City Council and any modifications made thereto must be approved by the City Council.

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STAFF REPORT
Date: June 4, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
Prepared by: Cecilia Madrigal-Gonzalez, Senior Planner
Concurrence: Juan Arauz, AICP, Community Development Director Subject: Conduct the Second Reading of Ordinance No. 743 of the City Council of the City of Cudahy approving Municipal Code Text Amendment No. 2024-04 to amend Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Peace, Morals and Welfare) of the Cudahy Municipal Code

RECOMMENDATION
Staff recommends that the City Council take the following actions:

1. Conduct the second reading Ordinance No. 743 (Attachment A) of the City Council of the City of Cudahy, California, approving Municipal Code Text Amendment No. 2024- 03 amending Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Peace, Morals and Welfare) of the Cudahy Municipal Code.

BACKGROUND
The Cudahy Municipal Code (“CMC”) requires periodic updates to ensure consistency between the City of Cudahy (“City”) policies, provide clarity, and reflect current trends. As such, the City staff has identified provisions in the CMC that need to be amended.

Currently, CMC Section 9.08.010 prohibits alcohol consumption on “any public street, alleyway, sidewalk, parkway, or in any public building, public park, public lavatory, auto park, lobby, or entrance to any building within the City.” This restriction does not allow for any exceptions, even if the event is city-hosted or sponsored. This restriction limits the ability to offer alcoholic beverages for events such as the State of the City which are hosted in city facilities. Additionally, the restriction does not allow the City to offer a wider range of citysponsored or hosted events that cater to an adult demographic such as a beer garden and paint-and-wine nights to name a few. This amendment is proposed to allow the City the Item Number
12D

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ability to offer alcohol for city-sponsored or hosted events and proposed to adopt similar conditions and restrictions as CMC Section 20.52.120 (Temporary use permit for consumption of alcohol) which lists certain restrictive conditions including limited hours, prohibition of dancing, and location restrictions.

To provide flexibility while complying with protecting public health, safety, and general welfare, City staff is recommending Municipal Code Text Amendment No. 2024-04 which would adopt similar conditions from those found in CMC Section 20.52.120 for alcoholic beverage consumption in public facilities or parks for city-sponsored or hosted events only.

On October 23, 2023, and November 20, 2023, City staff presented the proposed code amendments as a discussion item to the Planning Commission for review and consideration.

The Planning Commission directed City staff to proceed with the code amendment, and on February 29, 2024, the Planning Commission adopted Planning Commission Resolution No. 2024-10 (Attachment B) recommending the City Council to approve Municipal Code Text Amendment No. 2024-04.

DISCUSSION/ANALYSIS
This Municipal Code Text Amendment No. 2024-04 is summarized in Table 1 below. The redlines associated with these amendments, which show deletions in strikethrough and additions in underlines, can be found in Exhibit A of the draft resolution (Attachment C).

TABLE 1 – SUMMARY OF PROPOSED AMENDMENTS
Section Discussion

9.08.010 New Section Added
Add in an exemption for the consumption of alcohol in public buildings or public parks for events sponsored or hosted by the City.

Additionally, the events shall adhere to the restrictions as detailed below with written approval by the City Manager.
• Non-alcoholic beverages and water must be available at the event.
• Alcohol beverages may be sold or served on the following days and times:
o 9:00 am to 10:00 pm from Sunday through Thursday.
o 9:00 am to 11:00 pm on Friday and Saturday, and for
any federal, state, or city-designated holiday. Regardless of whether the event coincides with the holiday date,
these hours still apply.

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• All alcoholic beverages must be consumed within a clearly marked dedicated area and wristbands given to those 21 years or age and over.
• A detailed security plan approved by the Sheriff’s Department is on file.
• The Sheriff’s Department has the power to determine if the presence of a doorman and/or security personnel is required. • Approval from the State Department of Alcoholic Beverage Control.

ENVIRONMENTAL REVIEW
The proposed municipal code text amendment has been assessed in accordance with the California Environmental Quality Act (“CEQA”) Guidelines and the environmental regulations of the City. The proposed municipal code text amendment is exempt from the requirements of the CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. This exemption applies to all activities that have no significant effect on the environment and are not a project under CEQA because the proposed amendment is intended to amend the municipal code.

PUBLIC NOTICE AND COMMENTS
Municipal Code Text Amendment No. 2024-04 was noticed in accordance with the City’s public notice requirements, which involved publication in the local paper as provided in Attachment D. As of the writing of this report, staff has not received public comments.

FISCAL IMPACT
The Fiscal Year 2023-24 Adopted Budget included the cost for required legal publication and codification of the ordinance. As such, there is no financial impact.

STRATEGIC PLAN CORRELATION
Not applicable.

CONCLUSION
City staff recommends the approval of this request, for the reasons outlined in the draft ordinance, which in summary are to modernize the CMC to reflect good practices and recent trends.

ATTACHMENTS

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A. Ordinance No. 743

ORDINANCE NO. 743

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY

OF CUDAHY, CALIFORNIA ADOPTING MUNICIPAL
CODE TEXT AMENDMENT NO. 2024-04 AMENDING
CHAPTER 9.08 (ALCOHOLIC BEVERAGES) OF TITLE 9
(PUBLIC PEACE, MORALS AND WELFARE) OF THE
CUDAHY MUNICIPAL CODE.

WHEREAS, the City of Cudahy (“City”) is a general law city, incorporated under the laws of the State of California (“State”); and
WHEREAS, pursuant to the City’s power, the City may enact and enforce laws within its boundaries which promote the public health, morals, safety, or general welfare of the community, and are not in conflict with the general laws; and WHEREAS, the City intends to allow alcohol consumption in public buildings and public parks for City sponsored or hosted special events, subject to conditions as provided in Cudahy Municipal Code (“CMC) and with the written approval of the City Manager; and
WHEREAS, on February 26, 2024, the Planning Commission at a duly noticed public hearing considered all public comments received both before and during the public hearing, the presentation by City staff, the relevant staff report, and other pertinent documents and adopted Planning Commission Resolution No. 2024-10 recommending the City Council on a 4-0 vote to approval Municipal Code Text Amendment No. 2024-04 amending various sections of CMC Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Peace, Morals and Welfare) to the City Council of the City of Cudahy (“City Council”); and
WHEREAS, on May 21, 2024, the City Council at a duly noticed public hearing considered all public comments received both before and during the public hearing, the presentation by City staff, the relevant staff report and other pertinent documents and approved Municipal Code Text Amendment No. 2024-04 amending various sections of CMC Chapter 9.08 (Alcoholic Beverages) of Title 9 (Public Pease, Morals and Welfare) to the City Council; and
WHEREAS, on May 21, 2024, the City Council adopted Ordinance No. 743 amending the CMC.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:

Section 1. The facts set forth in the recitals above are true and correct and incorporated herein by reference.

Attachment A Page 55 of 4584
Ordinance No. 743

Section 2. Section 9.08.010 (Drinking in public places) is hereby amended to read as follows:

A. No person shall consume any malt, spirituous or vinous liquor containing more than one-half of one percent of alcohol, by volume, while he is upon any public street, alleyway, sidewalk or parkway, or in any public building, public park, public lavatory, auto park, or lobby or entranceway to any building within the city.

A violation of this section shall be an infraction and, upon a conviction thereof, shall be punishable by a fine of $65.00 per offense, plus assessment fees to be determined by the court.

B. Exceptions. Alcohol consumption may occur at any public building or public park in conjunction with a city-sponsored or hosted special event, with the written approval of the City Manager and subject to the following conditions:

1. Non-alcoholic beverages and water must be available at the event.

2. Alcohol beverages may be sold or served on the following days and times:
i. 9:00 am to 10:00 pm from Sunday through Thursday.
ii. 9:00 am to 11:00 pm on Friday and Saturday, and for any federal, state, city-designated holiday. Regardless of whether the event coincides with the holiday date, these hours still apply.

3. All alcoholic beverage sales shall end a minimum of thirty (30) minutes before the scheduled event ends.

4. All alcoholic beverages must be consumed within a marked designated area and wristbands shall be given to attendees twenty-one (21) years of age and older.

5. A detailed security plan approved by the Sheriff’s Department is on file.

6. The Sheriff’s Department has the power to determine if the presence of a city-approved doorman and/or security personnel is required.

7. Approval from the State Department of Alcoholic Beverage Control is required.

Section 3. CEQA. This Ordinance has been assessed in accordance with the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.), CEQA Guidelines (Cal, Code Regs., tit. 14, § 15000 et seq.) and the environmental regulations of the City. Adoption of this Ordinance is categorically exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15061(b)(3). This exemption applies to where it can be seen with certainty that there is no possibility that

Ordinance No. 743

the activity in question may have a significant effect on the environment.

Section 4. Inconsistent Provisions. Any provision of the Cudahy Municipal Code, or appendices thereto, that conflicts with the provisions of this Ordinance, to the extent of such conflict and no further, is hereby repealed or modified to the extent necessary to affect the provisions of this Ordinance.

Section 5. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this Ordinance, or any part thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase would be subsequently declared invalid or unconstitutional.

Section 6. Construction. This Ordinance is intended to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. To the extent the provisions of the Cudahy Municipal Code as amended by this Ordinance are substantially the same as the provisions of that Code as it read prior to the adoption of this Ordinance, those amended provisions shall be construed as continuations of the earlier provisions and not as new enactments.

Section 7. Publication and Effective Date. The Mayor shall sign, and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption.

This Ordinance shall become effective in full force and effect thirty (30) days after adoption.

PASSED, APPROVED and ADOPTED by the City Council of the City of Cudahy this ______ day of ______ 2024.
________________________________
Jose R. Gonzalez
Mayor
ATTEST:
_________________________________
Richard Iglesias
City Clerk

Ordinance No. 743

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 745 was introduced for a first reading on the _____ day of ____ 2024 and approved for a second reading and adopted by said Council at its regular meeting held on the ______ day of ______ 2024 by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Richard Iglesias
City Clerk

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STAFF REPORT
Date: June 4, 2024
To: Honorable Mayor and Councilmembers
From: Alfonso Noyola, City Manager
From: Juan Arauz, AICP, Community Development Director
Prepared by: Cecilia Madrigal-Gonzalez, Senior Planner
Subject: Conduct the second reading of Ordinance No. 744 of the City Council of the City of Cudahy approving Zoning Code Text Amendment (“ZTA”) No. 2024-01 to amend Chapters 20.16, 20.20, 20.24, 20.28, 20.30, 20.52, 20.56, 20.64, 20.84, and 20.88 of Title 20 (Zoning Code) of the Cudahy Municipal Code (“CMC”)

RECOMMENDATION
Staff recommends that the City Council take the following actions:

1. Conduct the second reading of Ordinance No. 744 (Attachment A) of the City of Cudahy, California, recommending the City Council to approve Zoning Code Text Amendment No. 2024-01 amending Title 20 (Zoning Code), Chapters 20.16, 20.20, 20.24, 20.28,

20.30, 20.52, 20.56, 20.64, 20.84 and 20.88 of the CMC.

BACKGROUND
The Cudahy Municipal Code (“CMC”) requires periodic updates to ensure consistency between City policies and State law, to improve clarity, and to reflect current development trends. As such, the City staff has identified several provisions in the CMC that need to be amended. These amendments would be reflective of best planning practices and recent policy actions and achieve consistency with recent State laws including implementation of the City’s 6th Cycle Housing Element Goals and Programs (Attachment B).

At the October 23, 2023, and November 20, 2023, Planning Commission meetings, City staff presented a list of proposed code updates for discussion and feedback from the Planning Commission. City staff received positive feedback and on February 26, 2024, the Planning Commission adopted Planning Commission Resolution No. 2024-09 recommending the City Council adopt Zoning Code Text Amendment No. 2024-01 (Attachment C) on a 4-0 vote. Since Item Number
12E

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the recommendation of the Planning Commission, City staff have further revised the proposed updates to address grammatical errors and clarify inconsistencies.

DISCUSSION/ANALYSIS
The proposed amendments can be categorized into the following: 1) housing element program zoning code updates, 2) off-street parking methods, 3) temporary use permit alcohol sale and consumption, 4) minor deviation review, and 5) review of land uses. Further, City staff has prepared an amendment summary table for all proposed amendments which can be found in Attachment D.

Amendment #1: Housing Element Program Zoning Code Updates Per State law, Programs #3 (Accessory Dwelling Units), #10 (Development Standards to Allow Uses), #11 (Emergency Transitional and Supportive Housing), #24 (Low Barrier Navigation Centers, #25 (Single Room Occupancy Units), #26 (State Density Bonus Law) and #27 (Zoning Code Review) require the City to review and amend the CMC to promote and expedite housing production. As such, City staff and the City’s Consultants, the Arroyo Group, (“TAG”), whom assisted the City with the 6th Cycle Housing Element, have prepared this amendment to the City’s Zoning Code:
o Accessory Dwelling Units (Program #4). Accessory dwelling units (also known as second units “granny” flats or ADUs) are complete independent housing units that can be either detached or attached from an existing single-family or multi-family residence. In response to updates in State legislation regarding ADUs, the Cudahy City Council adopted Ordinance No. 690 implementing ADU provisions from State law in 2018. Since 2018, the State has revised ADU provisions several times, most recently in 2022. Currently, City staff utilize the State ADU Law, but cities are allowed to adopt a local ADU ordinance, in compliance with statutory requirements. As such, the City’s 6th Cycle Housing Element Program #4 requires the City to review and update the City’s ADU regulations to comply with the State law provisions.

Proposed Amendments: Relocate the existing ADU found in Chapter 20.16 into a new part, Part 20 in Chapter 20.52 (Standards for Specific Land Uses). The amendment would also include the following revisions to comply with State law:
• Add a definition of “accessory dwelling units”; and
• Add a definition of “efficiency kitchen”; and
• Eliminate the owner occupancy requirements for ADUs; and • Allow separate conveyance/sale of regular ADUs if it meets affordability and tenancy criteria set in California Government Code Section 65852.26; and • Add objective design standards for new construction ADUs including adding definitions for “accent color” and “base color;” and

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• Clarify ADUs are not part of density calculation; and • Remove the minor development review permit requirements for ADUs and permit ADUs as by-right land use in all zones where single- and multi-family are permitted including LDR, MDR, HDR, CMU, Civic-MU zones; and
• Increase the height of certain detached ADUs from 16 feet to 18 feet and attached ADUs to 25 feet. Allow a higher height if the ADU is proposed on top of a garage, not to exceed 28 feet; and
• Define and clarify the maximum permitted number of ADUs for multi-family and single-family properties; and
• Clarify the definition of multi-family properties as properties with two (2) or more attached dwellings; and
• Add a minimum and maximum size for all ADU types; and • Adds a provision that allows applicants to request to deviate from the objective design/development standards through a new process, Accessory Dwelling Unit Design Variance; and
• Clarifies the zoning clearance, building permit, and demolition permit shall either be approved or denied within 60 days.
o Development Standards to Allow Uses (Program #10), Emergency, Transitional and Supportive Housing (Program #11), Low Barrier Navigation Centers (Program #24) and Single-Room Occupancy Units (Program #25). Per the State law, the 6th Cycle Housing Element Program #10, 11, 24 and 25 require the City to amend the Code for consistency with State law regarding emergency transitional supportive housing and supportive housing, low barrier centers, and single-room occupancy. As such, the amendment would include the following revisions to comply with State law:

Proposed Amendments:
• Emergency, Transitional, and Supportive Housing. The Zoning Code presently allows five land uses associated with providing temporary lodging for unhoused persons and families; “emergency shelter,” “transitional housing, housing type,” “transitional housing, residential care facility large type,” and “transitional housing, residential care facility small type.” State law requires supportive housing to be permitted in multifamily and mixed-use zones. To comply with the provisions, the City staff is recommending the following summarized amendments:
o Revise parking standards for emergency shelters by reducing the number of parking spaces from 1 space per 5 beds to 2 spaces plus 1 space for each 50 beds, which is no greater than necessary to accommodate staff; and o Allow emergency, transitional, and supportive housing as a conditional use in the Neighborhood Commercial (NC) and Innovative Industrial (I-IND) zones,

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permitted by right in the Entertainment (Ent) zone, and prohibited in the Light Industrial (LI) zone.
• Single-room occupancy. A single-room occupancy are a form of housing that is typically aimed at residents with lower-income individuals, who rent small furnished single rooms while sharing a kitchen and restroom facilities with other individuals.

Program #25 requires the City to review and amend the CMC to allow single-room occupancy units within residential zones. To comply with the provisions, the City staff is recommending the following summarized amendments:
o Define single-room occupancy as a dwelling unit with a minimum floor area of 200 square feet with a kitchen and bathroom facility.
o Allow single-room-occupancy by right in the Commercial Mixed-Use (CMU), Civic-Mixed Use (Civic-MU), High-Density Residential (HDR), Entertainment (Ent), and Innovative Industrial (I-Ind) and prohibited in the Neighborhood Commercial (NC) and Light Industrial (LI) zones.
• Low Barrier Navigation Centers. A "Low Barrier Navigation Center" is a service shelter focused on moving people into permanent housing that provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing “Low Barrier” means best practices to reduce barriers to entry such as allowing pets; storage of possessions; and privacy. The Zoning Code does not presently define low-barrier navigation centers nor specify appropriate zones and operational standards. Per State law, low-barrier navigation centers would be permitted in all mixed-use zones as well as commercial zones that permit multifamily uses. To comply with the provisions, the City staff is recommending the following summarized amendments:
o Allow low barrier navigation centers as by right in the Entertainment (Ent), Commercial Mixed-Use (CMU) and Civic-Mixed Use (Civic-MU), conditionally permitted in the Neighborhood Commercial (NC) and Innovative Industrial (IIND) zones and prohibited in the Light Industrial (LI) zone. o Expand the existing use management, operations, and off-street parking regulations for emergency shelters in CMC Chapter 20.52, Part 8, and apply them to low-barrier navigation centers.
o State Density Bonus Law (Program #26). As part of the 6th Cycle Housing Element, the following changes are necessary to comply with State Density Bonus Law.

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Proposed Amendments
• Add a new part, Part 19 related to compliance with replacement housing for density bonus applications; and
• Address inconsistencies in income requirements based on for-sale or rental units; and • Clarifies inclusionary concessions are in addition to density bonus concessions; and • Revises method of fractional units which shall be rounded up to the next whole number; and
• Adds a required base density study to be conducted in the Entertainment zone to establish density; and
• Revise the current “yard” concession up to 20 percent to “side yard setback” allowed deviation; and
• Add distance between buildings as a menu concession for density bonus; and • Revise both the “common open space” and “private open space” to “open space” to address zoning code changes from Housing Element Program #27; and • Add “minimum unit size” as a menu concession for density bonus projects to be reduced by a maximum of 100 sq. ft.; and
• Add “minimum nonresidential area” as a menu concession for a density bonus to waive the required minimum floor area in a mixed-use development; and • Remove “fee” concessions; and
• Clarify the off-menu concessions are not discretionary approvals subject to approval of the Planning Commission; and
• Remove the CUP required for a density bonus greater than 35-percent; and • Clarify discretionary approvals for density bonus are only required if greater than state density bonus law (50-percent); and
• Establish an off-menu concession permit process; and
• Address other language inconsistencies and clean up.
o Zoning Code Review (Program #27). As part of the 6th Cycle Housing Element, the following Zoning Code changes and incentives were committed to encourage appropriate development, expedite housing production and remove constraints to housing production.

As such, City staff is recommending the following amendments as summarized below:

Proposed Amendments
• Permit residential care facilities with seven (7) or more persons by right in all zones where residential is permitted or conditionally permitted (LDR, MDR, HDR, NC, Ent, CMU, Civic MU, zones); and
• Change the definition of “Family” as follows: Family means one or more persons living together in a dwelling unit, with common access to, and common use of all living, kitchen, and eating areas within the dwelling unit.
• Eliminate the 15 dwelling units per acre limit on sites that are less than half an acre. • Increase the FAR limit to 1.5 in the CMU zone.

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• Eliminate the 11 dwelling units/acre limit on site that are less than half an acre in the MDR zone; and
• Eliminate the one-acre minimum for mixed-use projects. • Eliminate the 15 feet by 15 feet required private open space for ownership projects. • Count the fire turnaround within the open space area, and it would be allowed to be non-concrete/asphalt material. However, for the fire turnaround to count as open space, the area must be developed and maintained with hardscaping, and it must be free of any obstructions such as BBQ grills, swing sets, etc. • Allow permeable, porous materials in the driveway right of way. • Reduce the private open space from 150 sq. ft. to 100 sq. ft. in the MDR zone, 200 sq. ft. to 100 sq. ft. in the HDR and 250 sq. ft. to 100 sq. ft. in the LDR zone. In all zones, require a total of 280 sq. ft. of total open space consisting of common and private space.
• Add total open space area minimum of 280 sq. ft. and private open space minimum of 100 sq. ft. in the Entertainment zone; and
• Add a definition for “total open space”
• Allow buildings that are two stories or higher to have balconies projecting into the side setback of approximately 3 feet, leaving a minimum balcony setback from the side property line of 4 feet.
• Reduce guest parking to 0.25 spaces per unit and eliminate enclosure requirements for parking.
• Remove the multiple dwelling restriction in the MDR zone. • Remove the development agreement requirement for new development in the HDR and Mixed-Use zones.
• Remove the CUP requirement for multifamily development in the LDR zone. • Increase the number of units that trigger Planning Commission development review from 3 units to 5 units.
• Classify development review by the Director of Community Development as a ministerial process.
• Update the zoning code to specify what party is responsible for making the CEQA determinations.
• Specify what party is responsible for making the California Environmental Quality Act (CEQA) determination of Public Resource Code § 21080.1 and specify that the decision will be made within the timeframe permitted.
• Increase the building length maximum in the MDR and HDR zones from 125 feet to 175 feet.
• Add architectural design, form, and material standards for all residential zones; and • Allow open space to include exercise areas (gyms) to be indoors. • Remove the development agreement requirement for new development in the Commercial Mixed Use, Civic Mixed Use, and Entertainment zone.

Amendment #2: Off-street Parking Methods.

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City staff has evaluated existing CMC off-street parking methods for residential dwellings to allow flexibility to provide maximize off-street parking. Currently, single-family and multi-family dwellings must either provide all or a portion of their minimum off-street parking spaces through an enclosed garage as shown in Table 1 below:

Table 1 – Current CMC Off-street Parking Spaces for residential dwellings Dwelling Type Minimum Number of Spaces Requires
Single-Family Detached and Duplex 2 garage spaces/dwelling unit, plus 1 additional garage or surface space where
dwelling unit contains 5 or more bedrooms
Multifamily Units with Three or More
Bedrooms
2 spaces/dwelling unit, at least 1 space in a
garage
Multifamily Units with One or Two Bedrooms 1.5 spaces/dwelling unit, at least 1 space in a garage
Efficiency Apartments (studio)/ Senior
Housing
1 space/dwelling unit
Guest Parking For all but single-family detached dwellings and senior housing, guest parking shall be
provided at 0.5 space/dwelling unit for
multifamily units with 1 or more bedrooms,
and 0.5 space/dwelling unit for efficiency
apartments.

Historically, garages are used as storage spaces and thus ineffective in providing adequate offstreet parking, or in other cases converted into ADUs. In both cases, the City’s Street parking supply is adversely impacted. City staff recommends the following amendments to the methods for residential off-street parking methods:

Proposed Amendments: Chapter 20.64.040 would be revised to reflect the following changes:
• Include striped open-air parking as an acceptable method of providing off-street parking for residential dwelling.
• Include parking lifts as an acceptable method of off-street parking for residential dwellings.
• Allow guest parking for residential uses to be provided separate and secure from the on-site public parking.

Amendment #3: Temporary Use Permit Alcohol Sales and Consumption.

Currently, the CMC allows for the sale of alcohol with a temporary use permit under certain restrictions which can be found in CMC Section 20.52.120 (Temporary use permit for consumption of alcohol). This amendment would relocate the section to the temporary use

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permit (“TUP”) chapter, which is found in Part 4 of Chapter 20.84. Additionally, City staff has reviewed the existing TUP requirements for alcohol consumption and recommends the following amendments:

Proposed Amendments:
• Remove the no dancing provision.
• Revise the hours when alcoholic beverages can be sold or served beginning at 9:00 a.m. to 10:00 p.m. from Sunday through Thursday and 9:00 a.m. to 11:00 p.m. on Friday, and Saturday. Regardless of alcohol beverages hours, all alcohol sales shall end a minimum of thirty minutes before the scheduled event ends.
• Require a detailed security plan to be approved on file with the Sheriff’s Department. • Require approval of the State Department of Alcoholic Beverage control.

Amendment #4: Minor Deviation Review.

City staff has identified the lack of an administrative process for obtaining a minor deviation from development standards such as building height, sign area, and setbacks, to name a few.

This practice is common and widely adopted by cities to streamline such requests, which would otherwise require a variance and a public hearing at the Planning Commission. Most commonly, a deviation may be necessary due to the physical characteristics of the property or there are no alternatives to the requested deviation that could provide an equivalent level of benefit to the property owner. As such, City staff recommends the following amendments:

Proposed Amendments:
• Amend Part 5 of Chapter 20.84 to add “Minor Deviation,” including an intent and purpose.
• Set a threshold of a maximum of 10 percent of the requested standards to be modified. • Eligible development standards include landscape area, building setbacks, building height, wall/fence height, lot coverage, sign area, distance between structures and parcel dimensions and area, subject to compliance with all applicable building and fire codes.
• Add findings and decisions for a minor deviation.
• Set a maximum of one deviation per parcel.

Amendment #5: Review of land uses.

The Zoning Code includes permitted, conditionally permitted, and prohibited land uses, based on standards established for residential, commercial/industrial, and mixed-use zoning districts.

The City recognizes that certain uses, due to the nature of the use, intensity or size, require special review to determine if the use proposed, or the location of that use, is compatible with surrounding uses; or if through the imposition of conditions on the development and use, it can be made compatible with surrounding uses. However, City staff has identified various land

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uses that should be amended to remove constraints to uses that conform with the underlying zone purpose and intent, as follows:

Proposed Amendments:
• Remove the CUP requirement for the following uses in the Neighborhood Commercial (NC) zone:
o Financial institutions; and
o Restaurants; and
o Outdoor dining; and
o Grocery stores; and
o Plant nursery; and
o Recreational equipment sales and rentals; and
o Personal services, convenience and improvement.
• Remove the CUP requirement for the following uses in the Entertainment zone:
o Retail sales; and
o Personal services, convenience, and improvement.
• Remove the CUP requirements for the following uses in the Commercial Mixed-Use zone:
o Grocery stores; and
o Pet stores, inclusive of grooming services; and
o Recreational equipment sales and rentals; and
• Allow city-operated government buildings, structures, office, and service facilities including maintenance yards and public libraries in the City Parks/Parklets/School zone. • Remove the City Council Conditional Use Permit approval for off- and on-site alcohol consumption in all commercial and mixed-use zones. Further, remove the City Council annual compliance required and instead allow the Community Development Director to conduct the reviews.

The redlines associated with all amendments, which show deletions in strikethrough and additions in underlines, can be found in Attachment E.

GENERAL PLAN CONSISTENCY
Pursuant to CMC Section 20.84.510, any amendments to the General Plan, Zoning Code Text, and Zoning Map must comply with the required findings before adoption. The amendments proposed by ZOTA No. 2024-01 are consistent with the 2040 General Plan as aim to implement the 6th Cycle Housing Element program numbers 3, 10, 11, 24, 25, 26, and 27, amend methods for off-street parking standards, revise temporary use permit requirements relating to alcohol, establish a new administrative review procedure for minor deviations for certain development

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standards, revise certain land uses and clarify certain zoning ordinance provisions and address for internal inconsistency. Furthermore, the proposed amendments address inconsistencies with State law and bring the City into compliance. Additionally, the proposed amendments are consistent with the General Plan Goals LU-5.6, LU-6, LU-6.6, LU 9.1 as they provide more flexible accessory dwelling unit regulations and policies, supports policies that facilitate and incentivize the development of affordable housing and bonus programs, strengthen neighborhood identity with new development that is architecturally compatible with surrounding structures, accommodates a range of land uses to meet the economic, environmental and social needs of Cudahy’s residents and businesses. Lastly, the proposed amendments fulfill implementation objectives for Programs 1, Program 3 and Program 4 as it amends the Zoning Code, examine the current project review process to ensure expeditious and efficient timing, and update the accessory dwelling unit development standards in compliance with State law.

ENVIRONMENTAL REVIEW
The municipal code text amendment has been assessed in accordance with the California Environmental Quality Act (CEQA) Guidelines and the environmental regulations of the City.

The proposed municipal code text amendment is exempt from the requirements of the CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. This exemption applies to all activities that have no significant effect on the environment and are not a project under CEQA.

CONCLUSION
City staff recommends the approval of this request, for the reasons outlined in the draft ordinance, which in summary are to modernize the CMC to reflect good practices and recent trends.

PUBLIC NOTICE AND COMMENTS
The municipal code amendment was noticed in accordance with the City’s public noticing requirements, which involved publication in the local paper as provided in Attachment F. As of the writing of this report, staff has not received public comments.

ATTACHMENTS
A. Ordinance No.744

ORDINANCE NO. 744

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

CUDAHY, CALIFORNIA ADOPTING ZONING CODE TEXT
AMENDMENT NO. 2024-01 AMENDING CHAPTERS 20.16,

20.20, 20.24, 20.28, 20.30, 20.52, 20.56, 20.64, 20.84 AND

20.88 OF TITLE 20 (ZONING) OF THE CUDAHY MUNICIPAL
CODE.

WHEREAS, the City of Cudahy (“City”) is a general law city, incorporated under the laws of the State of California (“State”); and
WHEREAS, pursuant to the City’s power, the City may enact and enforce laws within its boundaries which promote the public health, morals, safety, or general welfare of the community, and are not in conflict with the general laws; and WHEREAS, the City of Cudahy (City) is proposing a comprehensive zoning ordinance text amendment (“ZOTA”) update to Title 20 (Zoning) of the Cudahy Municipal Code (“CMC”), to achieve the following: (1) implement the 6th Cycle Housing Element program numbers 3, 10, 11, 24, 25, 26 and 27; (2) amend methods for off-street parking standards; (3) revise temporary use permit requirements relating to alcohol; (4) establish a new administrative review procedure for minor deviations for certain development standards; (5) revise certain land uses; and (6) clarify certain zoning ordinance provisions and address for internal inconsistency; and
WHEREAS, the proposed ZOTA addresses existing inconsistencies with State law, bringing the City into compliance; and
WHEREAS, the ZOTA is consistent with the 2040 General Plan and 6th Cycle Housing Element; and
WHEREAS, on February 26, 2024, the Planning Commission at a duly noticed public hearing considered all public comments both before and during the public hearing, the presentation by City staff, the relevant staff report, and other pertinent documents and recommended approval ZOTA No. 2024-01 amending Chapters 20.16, 20.20, 20.24,

20.28, 20.30, 20.52, 20.56, 20.64, 20.84 and 20.88 of Title 20 (Zoning Code) in a 4-0 vote; and
WHEREAS, pursuant to Government Code §§ 65090 and 65091, this matter was duly noticed and posted for a public hearing held on February 26, 2024, at 6:30 P.M. consistent with the CMC procedures for a ZOTA application; and WHEREAS, on May 21, 2024, the City Council at a duly noticed public hearing considered all public comments received both before and during the public hearing, the presentation by City staff, the relevant staff report and other pertinent documents and adopted Ordinance No. 744 amending the CMC; and
Attachment A Page 69 of 4584
Ordinance No. 744

WHEREAS, the Community Development Director is authorized to make minor updates to the proposed amendment before the publication of the code amendments, as long as the City Attorney determines that such changes are not substantial.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:

SECTION 1. The facts set forth in the recital paragraphs above are true and correct.

SECTION 2. California Environmental Quality Act. The proposed ZOTA has been assessed in accordance with the California Environmental Quality Act (CEQA) (Pub. Res.

Code § 21000 et seq.) and the CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) and the City’s environmental regulations of the City. The proposed amendment to Title 20 of the CMC is categorically exempt from CEQA pursuant CEQA Guidelines Section 15061(b)(3) because the proposed amendments are intended to implement 6th Cycle Housing Element programs numbers 3, 10, 11, 24, 25, 26 and 27, amend methods for off-street parking standards, revise temporary use permit requirements relating to alcohol, establish a new administrative review procedure for minor deviations for certain development standards, revise certain land uses and clarify certain zoning ordinance provisions and address for internal inconsistency which have already been addressed in the Housing Element update. Therefore, it can be seen with certainty that the project would not have a significant effect on the environment.

SECTION 3. After considering the ZOTA on the basis for approval or denial as stated in Part 8 (Amendments to the General Plan, Zoning Code Text, and Zoning Map) of Section 20.84.510 of the CMC, the City Council finds as follows:

ZONING ORDINANCE TEXT AMENDMENT NO. 2024-01
A. Finding: The amendment is consistent with the goals, policies and objectives of the general plan.

Fact: The amendments proposed by ZOTA No. 2024-01 are consistent with the 2040 General Plan as it implements the General Plan by updating the existing Zoning Code to implement the 6th Cycle Housing Element program numbers 3, 10, 11, 24, 25, 26 and 27, amend methods for off-street parking standards, revise temporary use permit requirements relating to alcohol, establish a new administrative review procedure for minor deviations for certain development standards, revise certain land uses and clarify certain zoning ordinance provisions and address for internal inconsistency. Furthermore, the proposed amendments address inconsistencies with State law and bring the City into compliance. Additionally, the proposed amendments are consistent with the General Plan Goals LU-5.6, LU-6, LU-6.6, LU 9.1 as it provides more

Ordinance No. 744

flexible accessory dwelling unit regulations and policies, supports policies that facilitate and incentivize the development of affordable housing and bonus programs, strengthen neighborhood identity with new development that is architecturally compatible with surrounding structures, accommodates a range of land uses to meet the economic, environmental and social needs of Cudahy’s residents and businesses. Lastly, the proposed amendments fulfill implementation objectives for Programs 1, Program 3 and Program 4 as it amend the Zoning Code, examine the current project review process to ensure expeditious and efficient timing, and update the accessory dwelling unit development standards in compliance with State law.

B. Finding: The amendment will not adversely affect surrounding properties.

Fact: The proposed ZOTA does not involve any physical construction project that would adversely affect any surrounding properties. Any construction projects that may occur as a result of this ZOTA are required to adhere to standards in the CMC.

C. Finding: The amendment promotes public health, safety and general welfare.

Fact: The ZOTA intended to bring the City into compliance with State Law by implementing the 6th Cycle Housing Element programs to provide opportunities for additional locations for emergency shelters and low-barrier navigation centers, update the development standards for accessory dwelling units and amend the land use development standards to remove housing constraints and expedite housing production. Furthermore, the ZOTA will allow for additional methods of off-street parking for residential uses, permit alcohol sale and/or consumption with a temporary use permit and establish a new administrative procedure for minor deviations to certain development standards. For these reasons, the amendments will not be detrimental to the public interest, health, safety, convenience, or general welfare of the City.

D. Finding: The amendment serves the goals and purpose of the Zoning Code.

Fact: The ZOTA is consistent with the goals and purpose of the Zoning Code by assisting the implementation of the Cudahy General Plan and 6th Cycle Housing Element. The ZOTA will facilitate the arrangement of land uses, permit and promote the development of a full range of appropriate land uses, promote off-street parking spaces and update the development regulations for new development. For these reasons, the amendments will be consistent with the goals and purpose of the zoning code.

E. Finding: The ZOTA is consistent with the portions of the County of Los Angeles Hazardous Waste Management Plan relating to siting, and siting criteria, for hazardous waste facilities.

Ordinance No. 744

Fact: The ZOTA does not propose any updates to the Zoning Code that will impede the implementation of the Los Angeles Hazardous Waste Management Plan.

SECTION 4. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase would be subsequently declared invalid or unconstitutional.

SECTION 5. Construction. This Ordinance is intended to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed considering that intent. To the extent the provisions of the CMC as recommended for amendment by this Ordinance are substantially the same as the provisions of that CMC as it read prior to the adoption of this Ordinance, those amended provisions shall be construed as continuations of the earlier provisions and not as new enactments.

SECTION 6. The City Council approves Ordinance No. 744, and as shown in Exhibit A attached hereto.

PASSED, APPROVED and ADOPTED by the City Council of the City of Cudahy this ______ day of ______ 2024.
______________________________
Jose Gonzalez
Mayor
ATTEST:
____________________________
Richard Iglesias
City Clerk

Ordinance No. 744

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 744 was introduced for a first reading on the _____ day of ____ 2024 and approved for a second reading and adopted by said Council at its regular meeting held on the ______ day of ______ 2024 by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Richard Iglesias
City Clerk

Ordinance No. 744

EXHIBIT “A”
ZOTA No. 2024-01 Code Amendment Summary Redlines

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STAFF REPORT
Date: June 4, 2024
To: Honorable Mayor/ Vice Mayor/ City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
Prepared by: Raul Diaz, Building Official
Concurrence: Juan Arauz, AICP, Community Development Director Subject: Conduct the Second Reading of Ordinance No. 745 of the City Council of the City of Cudahy adding a New Chapter, Chapter 15.44 (Electric Vehicle Charging Station), to Title 15 (Buildings and Construction) of the Existing CMC as Proposed by Municipal Code Text Amendment No. 2024-03

RECOMMENDATION
Staff recommends that the City Council of the City of Cudahy (the “City”):

1. Conduct the second reading Ordinance No. 745 (Attachment A) of the City Council of the City of Cudahy, California, approving adding a new chapter, Chapter 15.44 (Electric Vehicle Charging Station), to Title 15 (Buildings and Construction) of the existing CMC as proposed by Municipal Code Text Amendment No. 2024-03.

BACKGROUND

1. In 2015, the State of California adopted Assembly Bill 1236 (2015, Chiu, Codified as Government Code Section 65850.7), which requires local jurisdiction to adopt an ordinance to create an expedited, streamlined permitting process for electric vehicle charging stations.

2. An electric vehicle charging station is any level of electric vehicle supply equipment station which delivers electricity from a source outside an electric vehicle into a plug-in electric vehicle. AB 1236 may refer to the recommendations in the most current version of the “Plug-In Electric Vehicle Infrastructure Permitting Checklist” of the “Zero-Emission Vehicles in California: Community Readiness Guidebook” published by the Governor’s Office of Planning and Research.

Item Number
12F

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3. Assembly Bill 1236, which amended Government Code Section 65850.7 to require jurisdictions with a population less than 200,000 residents to establish procedures for expedited, streamlined processes for permitting of electric vehicle charging stations. The amendments to Section 65850.7 include the requirement for a jurisdiction to adopt an ordinance for the expedited, streamlined process. The ordinance shall include the requirement that a jurisdiction adopt a checklist of requirements with which a permit application for an electric vehicle charging station will be eligible for expedited review.

4. AB 970 (McCarty, 2021), codified in Government Code Section 65850.71 builds on California’s existing permit streamlining law, AB 1236. Jurisdictions are required by AB 1236 to Limit EVCS project review to health and safety requirements. AB 970 adds specific binding timelines to that review period. Based on the size of the project and clarifies parking requirements.

5. All cities and counties including charter cities in California are required to comply with AB 1236 and AB 970. AB 970 Shall become operative on January 1, 2022 for every city, county, or city and county with population of more than 200,000 residents. This section should apply beginning on January 1, 2023 for every city, county, city and county with fewer than 200,000 residents.

6. At the October 23, 2023, and November 20, 2023, Planning Commission (“Commission”) meetings, City staff presented a list of proposed code updates for discussion and feedback from the Planning Commission. City staff received feedback and comments on this municipal code text amendment and recommended City staff proceed with preparing the various code text amendments for formal review.

DISCUSSION
This process includes the establishment of a checklist containing objective requirements for the installation of an electric vehicle charging station and a process for electronic submittal of permit applications. The content of the checklist requires the permit applicant to check the features of the existing electrical service such as rating in amperes, system voltage, connected or calculated load, spare capacity in amperes, voltage and ampere rating of the electric vehicle supply equipment, circuit rating of the electric vehicle supply equipment, location of the electric vehicle supply equipment, if ventilation is/or is not required, and clearances of the charging equipment to comply with all applicable building and fire safety laws. The checklist also assists the applicant in confirming that the location of the electric vehicle supply equipment will comply with any vehicle clearance requirements. Govt. Section 65850.7 requires that the City’s checklist be based on the “Plug-In Electric Vehicle Infrastructure Permitting Checklist” of the “Zero-Emission Vehicles in California: Community Readiness Guidebook” of the Governor’s Office of Planning and Research. Assembly Bill 1236 (2015) also clarifies that a jurisdiction shall not condition approval of a permit for an electric vehicle charging station based on the approval of an association as defined in California Civil Code, Section 4080.

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City staff is taking measures to meet all requirements of Assembly Bill 1236 and as amended.

This includes finalizing the application checklist in conjunction with the “Plug-In Electric Vehicle Infrastructure Permitting Checklist” of the “Zero-Emission Vehicles in California: Community Readiness Guidebook”, measures for electrical compliance, and standard items for fire prevention safety. Building and Fire inspection staff are also developing procedures for expedient and thorough inspection of the electric vehicle charging stations.

This Municipal Code Text Amendment No. 2024-03 is summarized in Table 1 below. The redlines associated with these amendments, which show deletions in strikethrough and additions in underlines, can be found in Exhibit A of the draft resolution (Attachment A).

TABLE 1 – SUMMARY OF PROPOSED AMENDMENTS
CMC Section(s) Discussion

15.44.010
through

15.44.070
New Chapter and Subsequent Sections Added.

The section is amended to speed up EV Charging stations which includes the following:
• Established a purpose for the chapter.
• Establishes four definitions including: Building Official, Electric Vehicle Charging Stations or Charging Stations, Nonconforming Charging Stations, Specific Adverse Impact.
• Applicability.
• Electric Vehicle Charging Station Requirements.
• Application and Documents.
• Permit Review Requirements and Appeals.
• Fees.

CONCLUSION
The proposed expedited permitting procedures for EV Charging Stations will encourage homeowners and businesses to install and use EV charging stations by promoting a state mandated local program that is obstacle-free, cost-effective, and ensures an expedited permit process.

ENVIRONMENTAL REVIEW
The municipal code text amendment has been assessed in accordance with the California Environmental Quality Act (CEQA) Guidelines and the environmental regulations of the City.

The proposed municipal code text amendment is exempt from the requirements of the CEQA

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pursuant to Section 15061(b)(3) of the CEQA Guidelines. This exemption applies to all activities that have no significant effect on the environment and are not a project under CEQA.

PUBLIC NOTICE AND COMMENTS
The municipal code amendment was noticed in accordance with the City’s public noticing requirements, which involved publication in the local paper as provided in Attachment B. As of the writing of this report, staff has not received public comments.

ATTACHMENTS
A. Ordinance No. 745

ORDINANCE NO. 745

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

CUDAHY, CALIFORNIA ADOPTING MUNICIPAL CODE
TEXT AMENDMENT NO. 2024-03, ADDING A NEW
CHAPTER, CHAPTER 15.44 (ELECTRIC VEHICLE
CHARGING STATION) TO TITLE 15 (BUILDINGS AND

CONSTRUCTION) OF THE CUDAHY MUNICIPAL CODE
WHEREAS, the City of Cudahy (“City”) is a general law city, incorporated under the laws of the State of California (“State”); and
WHEREAS, pursuant to the City’s power, the City may enact and enforce laws within its boundaries which promote the public health, morals, safety, or general welfare of the community, and are not in conflict with the general laws; and WHEREAS, the City of Cudahy (“City”) desires to remain compliant with State law regarding Electric Vehicle Charging Stations (“EVCS”) including but not limite to AB 1246 and AB 970 which requires every city and county to expedite and streamline the local review process by adopting an ordinance and adopt a checklist of requirements with which a permit application for EVCS will be eligible for expedited review; and WHEREAS, on February 26, 2024, the Planning Commission held a duly noticed public hearing on this item, considered all public comments both before and during the public hearing, the presentation by City staff, the relevant staff report and other pertinent documents and continued public hearing to the next scheduled Planning Commission meeting; and
WHEREAS, on March 18, 2024, the Planning Commission continued the duly public hearing and adopted Planning Commission Resolution No. 2024-02 on a 3-0 vote recommending the City Council approval of Municipal Code Text Amendment No. 2024- 03 adding Chapter 15.44 of Title 15 of the Cudahy Municipal Code (“CMC”); WHEREAS, pursuant to Government Code §§ 65090 and 65091, this matter was duly noticed and posted for a public hearing consistent with Cudahy Municipal Code (“CMC”) procedures for a municipal code text amendment; and WHEREAS, on May 21, 2024, the City Council at a duly noticed public hearing considered all public comments received both before and during the public hearing, the presentation by City staff, the relevant staff report and other pertinent documents and adopted Ordinance No. 745 amending the CMC; and
WHEREAS, the Community Development Director is authorized to make minor updates to the proposed amendment before the publication of the code amendments, as long as the City Attorney determines that such changes are not substantial.

Attachment A Page 79 of 4584
Ordinance No. 745

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:

SECTION 1. The facts set forth in the recital paragraphs above are true and correct.

SECTION 2. Addition of Chapter 5.44 (Electric Vehicle Charging Station) to Title 15 (Buildings and Construction) of the Cudahy Municipal Code as follows:

15.44.010 Purpose
The purpose of this chapter is to provide an expedited, streamlined permitting process for electric vehicle charging stations that will encourage the timely and costeffective installations of electric vehicle charging stations, in compliance with California Government Code Section 65850.7. This chapter is intended to achieve these goals while protecting public health and safety.

15.44.020 Definitions
For the purpose of this Chapter, the words, terms and phrases as defined in this section shall be construed as hereinafter set forth, unless it is apparent from the context that a different meaning is intended:

A. Building Official or Official
“Building Official” or “Official” means the City’s Building Official or designee.

B. Electric Vehicle Charging Station(s) or Charging Station(s) “Electric vehicle charging station(s)” or “charging station(s)” means an electric vehicle supply equipment station, of any level, ancillary to a primary use, that delivers electricity from a source outside an electric vehicle into a plug-in electric vehicle and is designed and built in compliance with Article 625of the California Electrical Code, as it reads on the effective date of this chapter, or as it may be amended.

C. Nonconforming Charging Station(s)
“Nonconforming charging station(s)” means any charging station that was lawfully established and in compliance with all applicable laws at the time it was installed, but which, due to enactment of this chapter, no longer complies with all the applicable regulations and standards of the zone in which the property is located.

D. Specific Adverse Impact

Ordinance No. 745

“Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, and written public health or safety standards, policies, or conditions as they existed on the date the City found the electric vehicle charging station application complete.

15.44.030 Applicability
A. Except for charging stations located on publicly-owned property, this chapter applies to the permitting of all charging stations in the City.

B. Unless modified after the effective date of the ordinance codified in this chapter, nonconforming charging station(s) are exempt from this chapter.

Routine operation and maintenance, or like-kind replacements, do not require a permit.

15.44.040 Electric Vehicle Charging Station Requirements A. All electric vehicle charging stations must meet all applicable health and safety standards and requirements, as set forth in Federal, State, County, and municipal codes and regulations.

B. Electric vehicle charging stations must meet all applicable safety and performance standards established by applicable law including, without limitation, the Society of Automotive Engineers, the National Electrical Manufacturers Association, and accredited testing laboratories such as Underwriters Laboratories and, where applicable, rules of the Public Utilities Commission regarding safety and reliability.

15.44.050 Application and Documents
A. All documents required for the submission of a charging station application will be made available on the City’s website and at City Hall.

B. Applicants may submit the required permit application and documents by submitting them either via electronic mail or by delivering them to the Building Official. An applicant’s electronic signature will be accepted on all forms, applications, and other documents in lieu of a wet signature.

C. The Building Official, or designee, will adopt a checklist of all requirements with which the charging stations must comply to be eligible for expedited review. The electric vehicle permit process, standard(s) and checklist(s) must substantially conform to recommendations for permitting of the “Zero-Emission Vehicles in California: Community Readiness Guidebook” published by the Office of Planning and Research, including the checklist and standards contained in the “Plug-In Electric Vehicle Infrastructure Permitting Checklist.”

Ordinance No. 745

D. If an application is submitted to the City and the Building Official deems the application incomplete, a written correction notice detailing all deficiencies in the application and any additional information or documentation required to be eligible for expedited permit issuance must be sent to the applicant for resubmission. The correction notice must be sent within ten (10) days after submission of the application.

15.44.060 Permit Review Requirements—Appeals.

A. Review of an electric vehicle charging station permit application is limited to whether the application meets local, State, and Federal health and safety requirements. If the application meets the requirements of the approved checklist and standards, and the proposed charging station does not pose any specific, adverse impact upon public health or safety, the Building Official must approve the application.

B. If the Building Official determines, based on the application, that the proposed charging station could have a specific, adverse impact upon the public health and safety, the Building Official may require an “Electric Vehicle Charging Station Use Permit.” The permit may include conditions designed to mitigate the specific, adverse impact upon health and safety at the lowest possible cost.

C. The Building Official must notify an applicant whether the application has been approved, or, alternatively, whether the applicant must obtain an Electric Vehicle Charging Station Use Permit, within thirty (30) days after the submission of a complete application.

D. An application for an Electric Vehicle Charging Station Use Permit can only be denied if the Building Official finds that: (1) the proposed installation would have a specific, adverse impact upon public health or safety; and (2) there is no feasible method to satisfactorily mitigate or avoid the adverse impact. These findings must be presented in writing, must include the basis for the rejection of the potential feasible alternative for preventing the adverse impact, and must be based upon substantial evidence in the record.

E. A feasible method to satisfactorily mitigate or avoid the specific, adverse impact may include, but is not limited to, any cost-effective method, condition, or mitigation imposed by the City on a prior successful application for an Electric Vehicle Charging Station Use Permit, where the proposed charging station is similarly situated to the charging station in that prior successful application.

F. Any decision by the Building Official made pursuant to this chapter may be appealed to the planning commission in accordance with the procedure set forth in (Chapter 20.84 Permit Procedures).

Ordinance No. 745

15.44.070 Fees.

The City Council may establish by resolution the fees for permits issued under this chapter.

SECTION 3. CEQA. This Ordinance has been assessed in accordance with the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.), CEQA Guidelines (Cal, Code Regs., tit. 14, § 15000 et seq.) and the environmental regulations of the City. Adoption of this Ordinance is categorically exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15061(b)(3). This exemption applies to where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.

SECTION 4. Inconsistent Provisions. Any provision of the Cudahy Municipal Code, or appendices thereto, that conflicts with the provisions of this Ordinance, to the extent of such conflict and no further, is hereby repealed or modified to the extent necessary to affect the provisions of this Ordinance.

SECTION 5. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this Ordinance, or any part thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase would be subsequently declared invalid or unconstitutional.

SECTION 6. Construction. This Ordinance is intended to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. To the extent the provisions of the Cudahy Municipal Code as amended by this Ordinance are substantially the same as the provisions of that Code as it read prior to the adoption of this Ordinance, those amended provisions shall be construed as continuations of the earlier provisions and not as new enactments.

SECTION 7. Publication and Effective Date. The Mayor shall sign, and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption.

This Ordinance shall become effective in full force and effect thirty (30) days after adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Cudahy at the regular meeting of this __ day of _____ 2024.

Ordinance No. 745

______________________________
Jose Gonzalez
Mayor
ATTEST:
____________________________
Richard Iglesias
City Clerk

Ordinance No. 745

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 745 was introduced for a first reading on the _____ day of ____ 2024 and approved for a second reading and adopted by said Council at its regular meeting held on the ______ day of ______ 2024 by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Richard Iglesias
City Clerk

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STAFF REPORT
Date: June 4, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager
By: Juan Arauz, AICP, Community Development Director
Subject: Introduction and adoption by first reading of Ordinance No. 746 Repealing Ordinance No. 681 terminating Development Agreement No. 18-021C, between the City of Cudahy and Davina, LLC

RECOMMENDATION
City staff recommends that the City Council take the following action(s):

1. Open public hearing and receive comments and testimony; and

2. Make a determination that Davina, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-021C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 746 (Attachment A) repealing Ordinance No. 681 terminating DA No. 18-021C, between the City of Cudahy and Davina, LLC; and

4. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

SUMMARY
Pursuant to the terms and conditions of DA No. 18-021C and CCP No. 18-0019, it is the City’s purpose and intent to regulate cannabis activities within the City in a responsible manner to protect the health, safety, and welfare of the residents of Cudahy and to enforce rules and regulations consistent with California’s Cannabis laws. Cannabis operators with development agreements are obligated to comply with all provisions of the Cudahy Municipal Code (“CMC”), Item Number
13A

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obligations of the DA, and conditions of approval under the CCP, and applicable state and local laws and related regulations. This report provides a summary of the unrefuted evidence offered at an administrative review hearing; a decision by a third-party hearing officer (“Hearing Officer”) on November 14, 2023 finding the Operator in default of the DA and out of compliance with the CCP; the public hearing by the Planning Commission , determining that the Operator has failed to comply with the terms and conditions of its DA, despite being provided with ample notice and several opportunities to achieve compliance, thereby recommending to the City Council that it repeal Ordinance No. 681 and DA No. 18-021C through the adoption of Planning Commission Resolution No. 2024-05. Therefore, City staff recommends the City Council adopt Ordinance No. 746 repealing Ordinance No. 681 terminating DA18-021C.

BACKGROUND

1. On September 11, 2017, the City adopted Ordinance No. 673 (Attachment B) establishing the City’s commercial cannabis production activity regulations codified in Chapter 5.20 of the Cudahy Municipal Code (“CMC”). CMC Section 5.20.040 authorizes medicinal commercial cannabis activities within a designated overlay zone, pursuant to a development agreement adopted in accordance with the Development Agreement Law (Govt. Code Section 65864 et seq.) and Chapter 20.28 of the CMC.

2. On April 30, 2018, the Planning Commission recommended approval of CCP No. 18-0019 for cannabis manufacturing at 4916 Cecilia Street, as illustrated in Figure 1 below, subject to the execution of a development agreement between the City and the Operator for cannabis manufacturing. The Operator is one of seven tenants at the Site which all have separate development agreements with the City but share an interest in CCP No. 18-0019 and are subject to the same conditions of approval. As discussed in further detail below, the conditions of approval of CCP No. 18-0019 require the Operator to make timely payments of the fees due under the Development Agreement.

Figure 1 – Aerial of the Site.
4916 Cecilia

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3. On May 15, 2018, the City Council adopted Resolution No. 18-17 (Attachment C) approving the issuance of CCP No. 18-0019 with conditions of approval to the Operator, subject to the execution of a development agreement with the City.

4. On June 5, 2018, the City Council adopted Ordinance No. 681 (Attachment D) approving Development Agreement No. 18-021C by and between the Operator and the City authorizing commercial cannabis manufacturing activities at the Site as illustrated in Figure 2, below. The DA requires the Operator to make timely payments for Community Benefit Fees; Cost Recovery Fees; and Non-Operating Fees.1 Figure 2 – Floor Plan

5. On October 2, 2019, the City provided the Operator with a Notice of Delinquency (Attachment F – pg. 181) due to failure to pay the various fees due under CCP 18-0019 and DA No. 18-021C, prior to placing the Operator in default status due to payment noncompliance with the DA, inclusive of the non-payment of Community Benefit Fees, Cost Recovery Fees, and Non-Operating Fees in the amount of nine thousand eight hundred sixty-nine dollars and one cent ($9,869.01). The Operator was given no later than October 17, 2019, to cure the amount, however the delinquency was not timely cured.

6. On May 4, 2021, the City provided the Operator with a Notice of Default (Attachment F – pgs. 183-184) due to non-compliance with the payment of fees and associated penalties in the amount of fifty-three thousand two hundred fifty-one dollars and fifteen cents ($53,251.15). The Operator was given no later than 30 days to cure the default, however, the default was not timely cured.

7. On October 19, 2021, the City provided the Operator with a Final Demand Letter (Attachment F – pgs. 186-187) due to payment non-compliance informing the Operator 1 As used herein, the term Non-Operating Fees and Operating Fees are used interchangeably.

Unit C
4916 Cecilia

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that fees and penalties had accumulated to fifty-eight thousand four hundred thirty-two dollars and thirty-nine cents ($58,432.39). The Operator was given no later than 30 days to cure the default and comply with payment obligations, however the default was not timely cured.

8. On December 7, 2022, the City Manager offered a Cannabis Deferment and Payment Program (Attachment F – pgs. 189-190) to assist cannabis Operators with accumulated Community Benefits, Cost Recovery and Non-Operating Fees by deferring and providing additional time for payment without penalty. Under the program:
a. Unpaid Non-Operating Fees would be deferred (without penalty) until six (6) months after the Operator was issued a Certificate of Occupancy, and then repay already accumulated Non-Operating Fees within twelve (12) months; and b. Operators would continue to be responsible for the timely payment of Community Benefit Fees and Cost Recovery Fees, as they accumulated; and c. Previously incurred Community Benefit Fees and Cost Recovery Fees would be subject to a payment plan and require timely payments.

All cannabis operators that were interested in participating in the program were given no later than January 31, 2023, to execute an agreement to participate in the Deferment and Payment Program. The City Manager did not receive a request from the Operator to participate in the Deferment and Payment Program. As of the writing of this report, the payment of fees due under DA No. 18-021C and CCP No. 18-0019 plus applicable penalties and interest continue to accumulate.

9. On May 31, 2023, the City sent a Final Demand Letter (Attachment E) demanding the Operator to respond to the following demands: 1) Proof of revival of the LLC’s entity status with the State; 2) Forwarding payment for all past due amounts; and 3) Contact the City to revise the CCP’s Schedule of Performance and for further information to become compliant with the DA and CCP. The Operator did not respond in a timely manner and has failed to make any attempt to cure the defaults.

10. On August 9, 2023, the City issued an Escrow Account Letter (Attachment F – pgs. 196- 197) requiring all cannabis operators to open an escrow account by September 15, 2023, to ensure payment of Cost Recovery Fees. As of the writing of this report, the Operator has not opened an escrow account nor made any payments into the account.

11. On October 12, 2023, the City issued the Operator a Notice of Review Hearing (Attachment F – pgs. 349-350) with the hearing date, time, and place. The Notice of Review Hearing requested the Operator to contact staff to confirm appearance at the Review Hearing and advised the Operator to respond within ten days of the date of the letter to confirm appearance Review Hearing or otherwise waive the right to present evidence at the hearing (Attachment G). The notice also informed the Operator that it was responsible for the cost of the Review Hearing and requested the Operator to deliver a cashier’s check three days prior to the scheduled hearing or would otherwise constitute

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further default on the DA. The City did not receive a timely response from the Operator nor payment for the cost of the Review Hearing.

12. On October 24, 2023, the City issued a letter (Attachment F – pgs. 199-200) updating the Operator on their payment and fees related to the DA by correcting the amount due to an error in the total amount billed. The City provided a credit in the amount of Fourteen thousand nine hundred fifty dollars and fifty cents ($14,950.50).

13. As of October 24, 2023, Operator owed the City One hundred forty-six thousand twentyseven dollars and nine cents ($146,027.09). Operator has continued to fail to make payments and as of the writing of this report owes One hundred sixty-eight thousand seven hundred two dollars and twenty-nine cents ($168,702.29). Community Benefit Fees, Cost-Recovery and Non-Operating Fees plus penalties continue to accrue and the total amount due may be higher as of the date of this staff report.

14. On November 2, 2023, the City sent a follow up notice to the Notice of Review to the Operator confirming that it had not received any communication from the Operator confirming attendance at the Review Hearing and that the ability to present before the hearing officer had been waived (Attachment H). The City did not receive a timely response from the Operator.

15. On November 14, 2023, the duly appointed third-party Hearing Officer, Steve Napolitano, conducted a Review Hearing as authorized under the CMC Section 5.20.080(7) and Section 19 of the DA No. 18-021C to hear and consider information and evidence submitted by City staff through an Administrative Record (Attachment F) and the Operator. No representation from the Operator was present at the hearing nor did the Operator submit any information or evidence for consideration.

16. On January 14, 2024, the Hearing Officer issued a written decision and order (Attachment I) finding evidence showing the Operator, despite considerable notice and opportunities to cure outstanding issues, has breached the terms and conditions of the DA and CCP and recommends the Planning Commission and City Council repeal Ordinance No. 681 terminating DA No. 18-021C and revoke the related interest in CCP No. 18-0019.

17. Approximately two months after the Review Hearing, on January 6, 2024, an attorney who appears to represent the Operatorsubmitted a letter to the City alleging the City was in default with the terms of DA No. 18-021C (“Notice to Cure Breach”) (Attachment J).

The Notice to Cure Breach alleged the City had breached DA No. 18-021C by (a) failing to waive fees pursuant to the Article 23.i of the DA (Force Majeure); (b) failing to “expedite” approvals and by seeking fees for delays allegedly caused by the City; (c) requiring the Operator to pay Non-Operating Fees as required by the DA; (d) implementing fees that violate The Mitigation Fee Act (Govt Code § 65864-65869.5); and (e) failing to conduct an annual hearing to determine compliance with the DA No. 18-021C. The Notice to Cure Breach also alleged the City was liable under the Civil RICO statute. The Operator demanded that the City (i) waive all accumulated Non-Operating Fees for a period of 15

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months; (ii) “waive all fees during any delays caused by the City[;]” (iii) “waive all fees when the City was in default under the agreements[;]” (iv) issue certificate of occupancy to the Operator; (v) halt the hearing process before the third-party Hearing Officer; and (vi) expedite the processing of all permit applications.

18. On January 8, 2024, the City received a request to submit the Notice to Cure Breach into the administrative record for the hearing that took place on November 14, 2023 (Attachment K).

19. On March 18, 2024, pursuant to State law and the CMC, the Planning Commission held a duly noticed public hearing to consider the Hearing Officer’s recommendation to repeal Ordinance No. 681 and terminate DA No. 18-021C. Hours before the hearing, the attorney representing the Operator requested that a comment letter be submitted into the record at the May 18 Planning Commission hearing (Attachment L).2 The Planning Commission considered all public comments received before and during the public hearing, the presentation by City staff, the relevant staff report, administrative record, and all other pertinent documents. No representation from the Operator was present at the hearing.

After closing public hearing, the Planning Commission adopted Resolution No. 2024-05 (Attachment M), recommending the City Council repeal Ordinance No. 681 and terminate related DA No. 18-021C.

DISCUSSION/ANALYSIS
During a review of the Operator’s compliance with the Development Agreement, the burden is upon the Operator to demonstrate good faith compliance with the terms of the Development Agreement under Article 19. Pursuant to Government Code Section 65868.1 and Articles 19 and 19.d of the DA, if the City Council determines, based on substantial evidence, that the Operator has not complied in good faith with the terms of the conditions of the DA, the City Council may terminate the DA, or alternatively may choose to modify and impose conditions reasonably necessary to protect the interests of the City. Conversely, if the Operator is found to be in compliance with the DA, the Owner may request the City to issue a Certificate of Compliance pursuant to Article 19.e. Any decision to terminate a development agreement must be reviewed by the Planning Commission prior to review by the City Council. Gov. Code § 65867. Under Article 19.d, the decision to terminate a development agreement by the City Council is final.

As it relates to the CCP, pursuant to the CMC Sections 5.20.080(6) and 5.20.080(7), any material violations of Chapter 5.20, any other relevant city law or state law, condition of approval, or any other required agreement or covenant, such as a development agreement, by a cannabis permittee, or cannabis permittee’s agent, is grounds for suspending or revoking the relevant cannabis permit. The decision to suspend or revoke a commercial cannabis permit is with the 2 The City assumes that the request to add the letter to the May 18 Planning Commission hearing was a typo and was intended to be submitted into the record for the March 18, 2024 Planning Commission hearing. The City accepted the letter as a public comment into the record. All Planning Commissioners and City Council members were also addressed in the communication.

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City Manager or his designee. Furthermore, pursuant to CMC Section 5.20.080, any decision regarding the suspension or revocation may be appealed to the City Council.

The City has appointed a third-party hearing officer to conduct a review of the Operator’s compliance with CCP No. 18-0019 and DA No. 18-021C. The findings and determinations made by the Hearing Officer inform any subsequent action to terminate or modify the Development Agreement and suspension or revocation of the CCP. As stated above, and further described in Attachment I, the Hearing Officer issued a written decision making several findings of fact and conclusions and determined that Davina, LLC breached the terms and conditions pursuant to DA No. 18-021C and CCP No. 18-0019, based on a preponderance of the evidence, in the following material aspects:

1. Violation #1: Breach of Payment Obligations. Pursuant to the terms of the DA, the Operator is responsible for timely payment of Community Benefit Fees (Article 5.b); Cost Recovery Fees (Article 8); and Operating Fees (Article 7.c). The Operator is also obligated to pay the fees due under the DA pursuant to CCP Condition of Approval No. 45; and timely payment for Non-Operating Fees pursuant to Condition of Approval No. 13 (Attachment F- pgs. 54-69). Conditions of Approval 1(a) and 1(b) require the Operator to pay all City-issued invoices within 30 days of receipt. Pursuant to the terms of the DA, Operators that are more than 30 days past due on operating fees are subject to a penalty equal to twenty-five percent (25%). In addition, a ten percent (10%) penalty shall be added to the first day of each calendar month following the imposition of the initial 25% penalty, if the fee remains unpaid in whole or in part, up to a maximum of the one hundred percent (100%) of the payable fee. The conditions of approval for CCP No. 18- 0019 are incorporated into the DA through Article 18 and require the Owner to comply with all conditions contained therein (Attachment F – p. 80-124). The City offered the Operator relief in the form of the Cannabis Deferment and Payment Program; however, the Operator did not acknowledge nor execute a Letter Agreement with the City to participate in the Cannabis Deferment and Payment Program. Further, the Operator failed to respond to multiple notices informing the Operator of the lack of payment and continued to default on payments.

As of October 24, 2023, the City reported that the Operator is past due in the amount of One hundred forty-six thousand twenty-seven dollars and nine cents ($146,027.09) and past-due payments continue to accumulate, including late payment penalties. As of the writing of this report, the Operator now owes the City $168.702.29.

Table 1. Summary of Past and Current Amounts Due as of May 14, 2024 Fee Type Payment Amount Due
Community Benefit Program $48,381.27
Cost Recovery Fees $74,021.27
Non-Operating Fees $36,271.20
Penalties (Late Payments) $10,027.92
TOTAL $168,702.29

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Based on the evidence submitted by the City, the Hearing Officer found that “based on the unrefuted evidence presented by the City...a preponderance of the evidence shows that [Operator] breached multiple conditions of the DA and CCP. Despite multiple attempts and notices by the City to gain compliance, the evidence shows that [Operator] failed to comply with their payment obligations, which constitutes the necessary grounds for termination of the DA and revocation of the CCP under the CMC” (Attachment I). The Hearing Officer’s determination was ratified by the Planning Commission through the adoption of Resolution No. 2024-05 which recommends that the City Council find that the Operator is in default of the terms set forth in DA No. 18-021C and repeal Ordinance No. 681 and terminate the related DA.

2. Violation #2: Failure to comply with state law - Suspended Status with the Secretary of State (SOS) and Franchise Tax Board (FTB). Pursuant to Article 4.a of the DA, the Operator must be a lawful entity capable of operating in accordance with state laws. A Certificate of Status dated October 31, 2023, states: “The above-referenced entity’s powers, rights, and privileges are suspended in California. As of the date of the Review Hearing on November 14, 2023, the Operator’s entity status was “FTB/SOS Suspended.” The Hearing Officer further determined “[a]ccording to the California Franchise Tax Board website, a suspended entity cannot do business in California until they cure the reason for their suspension, which is supported by Rev. and Tax Code Sec. 23303 and case law cited by the City: Casiopea Bovet, LLC v. Chiang (2017) 12 Cal.App.5th 656, 662; City of San Diego v. San Diegan for Open Government (2016) 3 Cal.App.5th 568, 577” (Attachment I).

Despite notice of default and opportunity to cure, the Operator’s status remained “suspended” at the time of the Review Hearing. Non-compliance with state law due to the Operator's legal status as a California limited liability is suspended by the State’s Secretary of State, as such, the Operator is unable to operate in the State of California.

3. Violation #3: Failure to Implement the Project Under Prescribed Time Limits. CCP Condition of Approval No. 51.A set a 90-day time frame in which the Operator must complete construction of Phase I of the Project. The 90-day period began following the 15-day appeal period from the date of the CCP approval, or June 20, 2018, meaning the Operator needed to complete Phase I by September 18, 2018. CCP Condition of Approval

51.A.iii sets a 180-day time limitation from the effective date of the CCP to complete all tenant improvements, construction, and obtain a certificate of occupancy from the Building Department, or December 17, 2018. The Operator was given a notice of default and opportunity to cure pursuant to the City’s Final Demand Letter to the Operator (Attachment F- pgs. 192-194), with no response from the Operator. The Operator has failed to provide any evidence that it has obtained a Zoning Clearance, completed construction of Phase I, or completed the tenant improvements, obtained a certificate of occupancy, or otherwise complete Phase II within the prescribed time periods. Nor does the City have any record of any request by the Operator for an extension of time to the City Manager and there is no evidence to demonstrate the Operator has made substantial progress, such as submitting an application for a Zoning Clearance or building permit plan check.

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Allegations of Default on Behalf of the City:

As an initial matter, the Notice to Cure Breach offered as evidence to demonstrate compliance with the DA and CCP was untimely submitted, nor does it actually offer evidence of Operator’s compliance with the CCP and DA. The request was made nearly two months after the Review Hearing that took place on November 14, 2023, after providing the Operator with multiple notices, and need not be considered. However, the City shall respond to the allegations made by the Operator’s representative which are largely unsupported by the evidence, the law, or both.

1. Operator is not Excused for Performance Pursuant to Force Majeure. The DA provides a Force Majeure clause at Article 23.i, which applies to unforeseen events that include “war, insurrection, acts of God, local, state or national emergencies, strikes and other labor difficulties beyond the party’s control, or any default by the City hereunder, which Force Majeure event substantially interferes with the development, construction or operation of the Project” (emphasis added).

Operator has failed to make a substantiated showing that the circumstances of Force Majeure were present during the time of default. The City provided the Operator with the first notice that it was in breach of the DA and CCP, approximately five months prior to the Governor’s issuance of Executive Order N-22-20 (Attachment N). The Operator was provided 30 days to cure the default pursuant to Article 14.a of the DA (Attachment F- pgs. 80-124). During this time, Operator did not cure the default, nor take diligent efforts to cure the default. City issued a subsequent notice to Operator on May 4, 2021 (Attachment F- pgs. 183-184) – during the unsupported allegation of the City’s closure.

Further, City Hall was not closed for a 15-month period. During the height of the pandemic, City Hall’s physical premises were closed to the public, however, the City continued to conduct business, and process requests, including applications for building permits which could be dropped off at the front of City Hall. Additionally, both commercial cannabis activities, inclusive of cannabis manufacturing, and commercial construction were permitted by the authority granted to the State Public Health Officer pursuant to Executive Order N-33-20 (Attachment N). The State permitted cannabis activities and construction to continue through the height of the pandemic and operators were able to continue processing applications, such as building permits, during this time.

The Notice to Cure Breach alleges that the Operator has invested $10 million from the onset of the COVID-19 pandemic to present day but has not provided any evidence to substantiate this point. However, if the Operator was prohibited from engaging in activities that would have allowed them to pursue the operation of a cannabis business, it is unclear how the Operator could have been prohibited from investing $10 million into the Project and been prohibited from moving forward with implementation of the Project at the same time.

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Even assuming arguendo that there was an event of Force Majeure, Article 23.i3 does not excuse performance, but only provides the Owner with an extension of time. There is no excusal of performance under Force Majeure nor does Article 23.i grant the City the ability to waive fees. Any allegation that City “agreed” not to charge fees during the COVID-19 pandemic or other delays are unsupported by any evidence in the administrative record.

2. Operator Has Failed to Demonstrate How the City has Failed to Expedite Approvals. The Notice to Cure Breach asserts the City has delayed in approving certain plans, however the City has no record of the Operators attempt to apply for and obtain a Zoning Clearance or implement the multiple phases of the Project as described in Violation #3, above.

Operator failed to offer any evidence that it complied with the timelines and requirements set forth in the CCP and DA. Further, as stated above, the Operator has been in default since 2019. Despite this, the City provided a pathway to achieve compliance with multiple defaults, including the schedule of performance, which the Operator did not timely attempt to cure any default.

Any allegation by the Operator that the City’s duty to review building plans was limited by the annual review process under Article 19 of the Development Agreement is unfounded and expressly contradicted in the DA terms. It’s unclear why the Operator is under the impression that its Project would be constructed and operated without any review of permit applications, etc., other than the reviews contemplated under Section 19 of the Development Agreement and is contrary to law. CMC Section 15.04.010 requires all development projects to comply with the Los Angeles Building Code requirements. Title 15 of the CMC also requires projects to comply with Los Angeles County’s Electrical Code requirements (Chapter 15.08), Plumbing Code requirements (Chapter 15.12), and Mechanical Code (Chapter 15.16). Providing comments to ensure that a project applicant complies with such state and local requirements does not constitute a delay on the City’s part, but enforcement of the Operator’s requirement to comply with state, local and federal regulations. At no time does the Notice allege the City refused to accept or review plans or other submissions by the Operator. If anything, this assertion cuts against Operator’s own argument and would result in further delays for the Operator to implement the Project.

3. There is No Evidence in the Administrative Record to Support a Finding that the City Did Not Intend for the Non-Operating Fees Not to Apply. To support the notion that NonOperating Fees would not apply the Operator’s representative submitted statements by a former councilmember who now acts as a consultant to many of the defaulting operators and other persons affiliated with the Operator.4 3 In full, Article 23.i states “If delays are caused by unforeseen events beyond the control of Owner, such delays will entitle Owner to an extension of time as provided in this section. Such unforeseen events (‘Force Majeure’) shall mean war, insurrection, acts of God, local, state or national emergencies, strikes and other labor difficulties beyond the party’s control, or any default by the City hereunder, which Force Majeure event substantially interferes with the development, construction or operation of the Project.” 4 The Operator’s attorney offered a statement by Daffodil Tyminski that was submitted to the City pursuant to Evidence Code Section 1152 and 1154, which protects the confidentiality of statements made during settlement or negotiation discussions. Based on this submitted statement it appears that the Operator has waived that privilege

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Any assertion that Non-Operating Fees were not intended to apply are directly contradicted by language in Article 7.c(1) which states the Operator shall be charged a “monthly operating fee of [.42 x total square foot of the ’Premises‘] until Owner is operating on the Premises and selling product under its City Regulatory Permit and State Regulatory Permit. Once Owner is operational and generating revenue, the monthly operating fee is [.42 x total square foot of ’Production Space‘] or a monthly operating fee based on gross receipts. DA Article 7.c(i) (emphasis added). The Development Agreement further provides that “Operating Fees shall begin to accrue ninety (90) days after the end of the month of the Effective Date of the Agreement.” Id. The language provided in the Development Agreement plainly states a formula that applies for Operating Fees for when the Operator is operating based on square footage or gross receipts or a formula based on square footage when the Operator is not operating or in “non-operation.” To argue that there is no such thing as Non-Operating Fees merely because those exact words is a matter of semantics. Further, there is no language in the DA that discusses or implies the intent for such fees to apply only to operators who “squat” on licenses as represented in a declaration submitted by the consultant.

Failure to pay such fees are out of compliance with Conditions of Approval Nos. 1(a) and (b), requiring payment of all City-issued invoices within thirty days of receipt. (Attachment F- pgs. 54-72). Non-payment of Non-Operating Fees is also in violation of Conditions of Approval 13, 21, 37, and 45.

4. The Assertion that Non-Operating Fees are Illegal Impact Fees is Not Supported by the Law. Non-Operating Fees are a part of the Development Agreement entered into between the City and the Operator and was enacted via ordinance pursuant to Development Agreement Law (Govt. Code §§ 65864-65869.5). Fees imposed by development agreements are expressly exempt from the Mitigation Fee Act. (Govt. Code § 66000(b) (“’Fee’ means a monetary exaction other than a tax or special assessment…but does not include…fees collected under development agreements adopted pursuant to Article 2.5 (commencing with Section 65864) of Chapter 4…”).) Therefore, the fees agreed to by the Operator through the execution of the DA and subsequent Letter Agreement are not subject to the Mitigation Fee Act.

Even if the Mitigation Fee Act was applicable to the past due fees, to properly contest, the Non-Operating Fees, the Operator would have been required to tender the required payment in full and serve written notice to the City that informs the City that payment has been tendered under protest accompanied by a statement of facts. (Govt. Code § 66020(a).) However, such protests must be filed at the time of the approval of the development or within ninety (90) days of the imposition of fees. The City and Operator entered into the Development Agreement on June 5, 2018. The 90-day statute of limitations to protest such fees ended on September 3, 2023, and Operator has not tendered payment in full as required by Government Code Section 66020(a). Therefore, any opportunity to protest under the Mitigation Fee Act has long since passed. AR pp. 9- afforded by those previous statements.

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10. Further, as stated above, Operator does not contest that it previously acknowledged that all of the fees due, inclusive of Non-Operating Fees, were presently due and owing at the time it signed a Letter Agreement.

5. There is No Requirement to Perform an Annual Review. Operator points to CMC Section

20.84.600 and Government Code Section 65865.1 to assert the City is in breach of the Development Agreement by failing to conduct a periodic review of the Operator’s compliance with the Development Agreement. However, Operator’s assertion is directly contradicted by the express language in the Development Agreement. Article 19.f of the Development Agreement expressly provides that “City’s failure to conduct a periodic review of this Agreement shall not constitute a breach of this Agreement.” Nor does the City have any record of the Operator requesting an annual review to demonstrate compliance with the DA or CCP.

6. The City Has Not Breached the Ability for the City Council to Make a Final Determination on the Operator’s Compliance with the Development Agreement and Whether to Modify or Terminate the DA, or Otherwise Find the Operator in Compliance. The plain language in Article 19.d of the Development Agreement provides that “[a]t the time and place set for the Review Hearing, Owner shall be given an opportunity to be heard. If City Council finds, based upon substantial evidence, that Owner has not complied in good faith with the terms or conditions of this Agreement, City Council may terminate this Agreement notwithstanding any other provision of this Agreement to the contrary, or modify this Agreement and impose such conditions as are reasonably necessary to protect the interests of the City.” The City has retained a third-party hearing officer for the purpose of hearing the evidence and making a recommendation to the City Manager, Planning Commission and City Council to “adopt an ordinance repealing Ordinance No. 681 and terminate Development Agreement No. 18-021C and revoke Operator’s interest under CCP18-0019.” (Attachment F – pgs. 2-10) The Operator has been provided an opportunity to be heard at the administrative hearing conducted by a third-party hearing officer, whose findings and determinations were sent to the Planning Commission and now City Council. No one has denied the Operator the opportunity to be “heard” before the City Council, but the Operator ignores the procedural requirements that require the repeal of an ordinance to terminate a development agreement, which includes a process by which the Operator may address the Planning Commission as well as the City Council.

Further, there is nothing in Article 19.d or the CMC that prohibits the City from appointing a third-party hearing officer from conducting the initial hearing and forwarding findings to City decisionmakers for the purpose of determining whether to take any action to modify or terminate the Development Agreement or Commercial Cannabis Permit so long as the City Council’s determination and actions are supported by substantial evidence. All such findings and recommendations made by the hearing officer shall be forwarded to the appropriate decisionmakers for final disposition. The City has provided Operator with more than 30 days’ notice of the November 14, 2023 hearing, requesting Operator to

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provide evidence of compliance at least 10 days prior to the hearing (Attachment F- pgs. 349-350). The Operator provided no response. The City sent a follow up communication informing Operator that it did not submit any documentation and has waived its rights at the Review Hearing (Attachment I). Operator instead submitted a Notice to Cure Breach approximately two months after Review Hearing alleging the City is in default of DA18- 021C. Pursuant to Article 14.d of DA18-021C, Operator’s remedies for a default are limited to a termination of the Development Agreement.

CMC Section 5.20.080(6)(a) permits the City Manager to revoke an operator’s interest in a CCP upon a determination “that the cannabis permittee has failed to comply with [Chapter 5.20], any condition of approval, or any agreement or covenant as required pursuant to this chapter.” The City Manager’s decision to revoke the operator’s interest in a CCP may be appealed to a third-party hearing officer or to the City Council. CMC §

5.20.080(7). As determined by the Hearing Officer, there is a preponderance of evidence to support a finding that the Operator is out of compliance with the DA and CCP.

7. Operator’s Assertion for Damages under the Development Agreement are Improper.

Even if the City were in default of the DA, which it is not, the Operator’s remedies are limited under the DA. Pursuant to Articles 14.a and 14.b of the DA, the Operator may only seek monetary damages if there is a showing of “bad faith intentional acts [or] the grossly negligent or malicious acts of City and its officials, officers, agents and employees.” Pursuant to Article 14.d of the DA, even if the City were in default, which it is not, the Operator’s remedies would otherwise be limited to a cancellation of the Development Agreement after providing a 60-day notice of default. Operator’s notice did not provide 60-day notice, but 30-day notice.

Based on the evidence provided by the City, which was unrefuted, the Hearing Officer found that the Operator “has breached the terms and conditions of DA 18-021C and [Operator’s] portion of its CCP and recommends to the Planning Commission and/or City Council repeal Ordinance No. 681 and terminate DA [No.] 18-021C...” (Attachment I).

Pursuant to CMC Section 20.84.070, DA 18-021C and CCP No. 18-0019 were processed concurrently and approved collectively under Ordinance No. 681. To repeal Ordinance No. 681, the repeal shall occur in the same manner as the original proceedings and pursuant to CMC Section 20.84.500.

PUBLIC NOTICE AND COMMENTS

This item was noticed in accordance with the City’s public notice requirements, which involved mailed notices to property owners and tenants within 300 feet of the Site and publication in the local paper (Attachment O). As of the writing of this report, City staff have not received any public comments.

ENVIRONMENTAL ANALYSIS

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The action(s) have been assessed in accordance with the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.), CEQA Guidelines (Cal, Code Regs., tit. 14, § 15000 et seq.) and the environmental regulations of the City. The Project is categorically exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15321 - Class 21 (Enforcement Actions by Regulatory Agencies). This exemption is applicable to “[a]ctions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issues, adopted, or prescribed by the regulatory agency or enforcement or a law, general rule, standard, or objective, administered or adopted by the regulatory agency.” If the City Council adopts Ordinance No. 746 to repeal Ordinance No. 681 and terminate DA No. 2018-021C, it would be an enforcement action. Therefore, the action(s) are categorically exempt from the provisions of CEQA.

CONCLUSION
As discussed above and based on the preponderance of unrefuted evidence offered at the administrative review hearing; and the Planning Commission’s finding that the Operator has failed to comply with the terms and conditions of its DA, despite being provided with ample notice and several opportunities to achieve compliance, thereby recommending to the City Council that it repeal Ordinance No. 681 and DA No. 18-021C through the adoption of Planning Commission Resolution No. 2024-05. As stated above, the Operator has failed to comply with their obligations under the DA and CCP, despite being provided with ample notice and several opportunities to achieve compliance. Therefore, City staff recommends the City Council adopt Ordinance No. 746 repealing Ordinance No. 681 terminating DA18-021C.

ATTACHMENTS
A. Draft City Council Ordinance No. 746
B. Ordinance No. 673
C. Resolution No. 18-17
D. Ordinance No. 681
E. Final Demand Letter dated May 31, 2023
F. Administrative Record for Davina, LLC
G. Notice of Review Hearing dated October 12, 2023
H. Review Hearing Waiver dated November 2, 2023
I. Decision and Order for Davina, LLC
J. S. Rucci Email dated January 6, 2024
K. S. Rucci Email dated January 8, 2024
L. S. Rucci Planning Commission Comment Letter dated March 18, 2024 M. Planning Commission Resolution No. 2024-05
N. Executive Order No. N-22-20
O. Newspaper Publication

ORDINANCE NO. 746

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF CUDAHY REPEALING ORDINANCE NO. 681 AND

TERMINATING RELATED DEVELOPMENT AGREEMENT
NO. 18-021C BETWEEN DAVINA, LLC AND THE CITY OF
CUDAHY.

WHEREAS, the City of Cudahy (the “City”) is a general law city, incorporated under the laws of the State of California; and
WHEREAS, pursuant to its police power, the City may enact and enforce laws within its boundaries that promote the public health, safety, or general welfare of the community, and are not in conflict with general laws; and WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the California State Legislature adopted Section 65864 et seq. of the California Government Code (the “Development Agreement Statute"); and WHEREAS, the Development Agreement Statute authorizes the City to enter into a development agreement with a person having legal or equitable interest in real property for the development of such property in order to establish certain development rights in exchange for public benefits; and
WHEREAS, in accordance with the Development Agreement Statute, the City Council adopted Ordinance No. 690 in 2018 establishing the procedures and requirements for the consideration of development agreement with the City and are contained within Cudahy Municipal Code (“CMC”) Sections 20.84.530 through

20.84.640; and
WHEREAS, on September 11, 2017, the City Council adopted Ordinance No. 673 establishing regulations for commercial cannabis activities in a specified Overlay Zone through an acquisition of a Commercial Cannabis Permit and execution of a development agreement with the City; and
WHEREAS, on April 30, 2018, the City Planning Commission (“Planning Commission”) conducted a properly noticed public hearing to consider an application by Davina, LLC (“Operator”) for approval of a Commercial Cannabis Permit by and between the City and to allow non-store front commercial cannabis manufacturing activities at 4916 Cecilia Street, Unit C (“Site”); and
WHEREAS, at this hearing, the Planning Commission heard and considered verbal and written testimony and evidence, and recommended approval of the Commercial Cannabis Permit subject to Operator’s execution of a development agreement with the City; and
WHEREAS, on May 15, 2018, the City Council conducted a properly noticed Attachment APage 101 of 4584
Ordinance No. 746

public hearing to consider the issuance of the Commercial Cannabis Permit (“CCP”) No. 18-0019 and Development Agreement (“DA”) No. 18-021C at which the City Council heard and considered both written and oral testimony and evidence and subsequently approved, and adopted Resolution No. 18-17 for CCP No. 18-0019; and WHEREAS, at the same hearing the City Council considered and approved CCP No. 18-0019, it also conducted the first reading of Ordinance No. 681 which authorized the execution of DA No. 18-021C between the Operator and the City; and WHEREAS, on June 5, 2018, the City Council adopted, at a second reading, Ordinance No. 681 approving DA No. 18-021C and authorizing the Mayor to execute the DA on behalf of the City; and
WHEREAS, the effective date of the Development Agreement is July 5, 2018 (“Effective Date”); and
WHEREAS, upon the Effective Date of Ordinance No. 681, the Operator was granted the permission to conduct commercial cannabis retail delivery activities provided, among other things, it apply for and receive a Zoning Clearance pursuant to the CMC’s requirements, receive State licensing approval from the Department of Cannabis Control, and comply with the terms outlined in the DA and conditions of approval under the CCP inclusive of the timely payment of Community Benefit Fees, Cost Recovery Fees and Operating/Non-Operating Fees and applicable penalties and interest; and WHEREAS, the Operator has not complied with the terms and conditions of the DA and CCP despite multiple notices and opportunities to cure and remains in material breach of thereof; and
WHEREAS, on October 12, 2023, the City provided notice to the Operator that it would be conducting a Review Hearing (“Review Hearing”) under Article 19(c) of DA No. 18-021C, which informed the Operator of the burden to prove compliance with the DA and CCP;
WHEREAS, the Operator never provided a timely response to the City’s notice for a Review Hearing;
WHEREAS, on November 2, 2023, the City sent a follow up notice informing the Operator it had not received any response to the Review Hearing Notice; and WHEREAS, the Operator did not respond to the follow up notice; and WHEREAS, on November 14, 2023, Steve Napolitano, Esq., a duly appointed third-party hearing officer for the City (“Hearing Officer”), conducted a properly noticed Review Hearing;
WHEREAS, the Operator did not participate at the Review Hearing, was not present at the hearing and did not present any evidence for consideration prior to or during the hearing, and the Hearing Officer heard and considered information and

Ordinance No. 746

evidence by City staff, which a true and correct copy of the staff report and supporting evidence is attached hereto as Exhibit “A” and incorporated herein by reference; and WHEREAS, the Hearing Officer heard and considered information and evidence by City staff; and
WHEREAS, on January 14, 2024, the Hearing Officer issued a written decision and order (the “Decision”), incorporated by reference and attached hereto as Exhibit “B”, making several findings of fact and conclusions of law with respect to the Operators noncompliance with the DA and CCP based on a preponderance of the evidence; and WHEREAS, the Hearing Officer determined that Operator breached its payment obligations due to the Operator’s non-payment of fees and penalties due and owed to the City totaling$162,894.46, which continue to accumulate; and WHEREAS, the Operator continues to fail to meet its payment obligations and the total amount due to the City as of May 14, 2024 is $168,702.29; and WHEREAS, the Operator breached its obligation to maintain its legal status with the State of California, as the Operator’s LLC entity status has been suspended by the State of California; and
WHEREAS, the Operator had breached its obligation to implement the Project within the prescribed time periods contained within CCP No. 18-0019 Condition of Approval No. 51 (Time Limits), because there is no evidence that the Operator has made a diligent effort to implement the Project in any fashion inclusive of an application for a Zoning Clearance to permit the commercial cannabis activities; and WHEREAS, the Hearing Officer has recommended that the City Council adopt an ordinance repealing Ordinance No. 681 terminating DA 18-021C and revoking the related interest in CCP 18-0019; and
WHEREAS, pursuant to state law and the CMC, the Planning Commission duly noticed, agendized, and conducted a public hearing on this matter on March 18, 2024; WHEREAS, and the Planning Commission considered all public comments received before and during the public hearing, the presentation by City staff, the relevant staff report, administrative record, and all other pertinent documents relating to the repeal of Ordinance No. 681;
WHEREAS, after the close of such public hearing, the Planning Commission adopted Resolution No. 2024-05, attached hereto and incorporated by reference as Exhibit “C,” recommending the City Council repeal Ordinance No. 681 and terminate related DA No. 18-021C; and
WHEREAS, pursuant to state law and the CMC, the City Council duly noticed, agendized, and conducted a public hearing on this matter; and

Ordinance No. 746

WHEREAS, the City Council considered all public comments received before and during the public hearing, the presentation by City staff, the relevant staff report, administrative record, and all other pertinent documents relating to the repeal of Ordinance No. 681; and
WHEREAS, after the close of such public hearing, the City Council introduced and adopted by first reading Ordinance No. 746 repealing Ordinance No. 681 and terminating related DA No. 18-021C; and

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:

SECTION 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.

SECTION 2. ADOPTION OF HEARING OFFICER’S FINDINGS OF FACT AND

CONCLUSIONS OF LAW
The City Council has reviewed and considered the Decision by the Hearing Officer (Exhibit “B”) issued on January 14, 2024, on this matter. For the reasons stated in the Decision, and as recommended by the Planning Commission (Exhibit “C”), the City Council adopts the Hearing Officer’s findings of fact and conclusions of law as its own and determines that Davina, LLC is not in compliance with the terms and conditions of the Development Agreement No. 18-021C and finds that Davina, LLC is in default of its contractual obligations set forth in said Development Agreement and has breached its Conditions of Approval for CCP No. 18-0019 by a showing of the preponderance of the evidence.

SECTION 3. TERMINATION OF DEVELOPMENT AGREEMENT
Pursuant to Article 19(d) of the Development Agreement, the City Council may terminate Development Agreement No.18-021C in its entirety. For the reasons stated in the Decision, and as recommended by the Planning Commission, the City Council hereby adopts this Ordinance repealing Ordinance No. 681 and terminating DA No. 18- 021C in its entirety.

SECTION 4. SEVERABILITY
If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions might subsequently be declared invalid or unconstitutional.

Ordinance No. 746

SECTION 5. CALIFORNIA ENVIRONMENTAL QUALITY ACT
The City Council has determined that this Ordinance is categorically exempt from the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.) and CEQA Guidelines (Cal. Code Regs., tit. 14, § 21000 et seq.) pursuant to CEQA Guidelines Section 15321 (Class 21) because the repeal of Ordinance No. 681 and termination of DA No. 18-021C is an enforcement action to revoke an entitlement interest.

SECTION 6. PUBLICATION
The City Clerk shall certify the passage and adoption of this Ordinance and shall cause this Ordinance to be published and/or posted as required by law, which shall take full force and effect thirty days from its adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Cudahy at the regular meeting of this ______ day of _____ 2024. ______________________________
Jose R. Gonzalez
Mayor
ATTEST:
____________________________
Richard Iglesias
City Clerk

Ordinance No. 746

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 746 was introduced for a first reading on the _____ day of ____ 2024 and approved for a second reading and adopted by said Council at its regular meeting held on the ______ day of ______ 2024 by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Richard Iglesias
City Clerk

Ordinance No. 746

EXHIBIT “A”
EVIDENCE SUBMITTED BY THE CITY (“ADMINISTRATIVE RECORD”)

ADMINISTRATIVE RECORD FOR

REVIEW HEARING
Davina, LLC
November 14, 2023
ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 1 of 352 108 of 4584

REVIEW HEARING STAFF REPORT
Date: November 14, 2023
To: Hearing Officer, Steve Napolitano
From: Juan Arauz, AICP, Community Development Director
Prepared By: Jessica Guillen, Assistant Planner
Concurrence: Cecilia Madrigal-Gonzalez, Senior Planner, Joshua Calhoun, Finance Director, Glenn Ward Calsada, Special Counsel, Raul Diaz, Building Official and Paloma McEvoy, Assistant City Attorney.

Subject: Compliance Review Hearing relating to Commercial Cannabis (“CCP”) 18-0019 and Development Agreement (“DA”) 18-021C between Davina, LLC (“Operator”) and the City of Cudahy (“City”).

RECOMMENDATION
Staff recommends that the Hearing Officer take the following action(s):

1. Hear the evidence presented by the City; and

2. Make a determination that the Operator is not in compliance with the terms and conditions of its DA with the City and find that the Operator is in default of contractual obligations set forth in the DA ;

3. Make a determination that the Operator is not in compliance with the conditions of approval set forth in CCP18-0019; and

4. Make a recommendation to the City Manager for Planning Commission and City Council to adopt an ordinance repealing Ordinance No. 681 and terminating Development Agreement No. 18-021C and revoking their interest under CCP18-0019; and

BACKGROUND/TIMELINE
On September 11, 2017, the City adopted Ordinance No. 673 (Attachment A) establishing the City of Cudahy's commercial cannabis production activity regulations codified in Chapter 5.20 of the Cudahy Municipal Code (“CMC”). CMC Section 5.20.040 authorizes medicinal commercial cannabis activities within a designated overlay zone, pursuant to a development agreement adopted in accordance with the Development Agreement Law (Govt. Code Section 65864 et seq.) ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 2 of 352 109 of 4584

and Chapter 20.28 of the CMC.

On April 30, 2018, the Planning Commission recommended the City Council approve CCP18-0019 for cannabis manufacturing at 4916 Cecilia St. Unit C, subject to the approval of a development agreement between the City and the Operator for cannabis manufacturing.

On May 15, 2018, the City Council adopted Resolution No. 18-17 (Attachment B) approving the issuance of CCP18-0019 (Attachment C) with conditions of approval to the Operator upon the execution of a development agreement with the City.

On June 5, 2018, the City Council adopted Ordinance No. 681 (Attachment D) approving Development Agreement No. 18-021C (Attachment E) inclusive of exhibits A-F (Attachment F) between Operator and the City authorizing cannabis manufacturing activities at 4916 Cecelia Street Unit C (“Site”) as illustrated in Figures 1 and 2 below. Recital I of the Development Agreement permits the Operator to utilize approximately 1,270 square feet of the Site for cannabis manufacturing, inclusive of volatile and non-volatile extraction areas. The Operator is one (1) of seven (7) tenants at the Site which all have separate development agreements with the City but each tenant is subject to the same CCP conditions of approval.

FIGURE 1 – AERIAL OF SITE
FIGURE 2 – FLOOR PLAN
Site
4916 Cecelia St.

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On October 2, 2019, the City provided the Operator with a Notice of Delinquency due to nonpayment (Attachment G) prior to placing the Operator in default status due to non-compliance with the Development Agreement, inclusive of the payment of Community Benefit Fees, Cost Recovery Fees, and Non-Operating Fees in the amount of nine thousand sixty-nine dollars and one cent ($9,869.01). The Operator was given no later than October 17, 2019, to cure the delinquency, however, it was not timely cured.

On May 4, 2021, the City provided the Operator with a Notice of Default due to payment noncompliance (Attachment H) with a payment of fees due in the amount of fifty-three thousand two hundred fifty-one dollars and fifteen cents ($53,251.15). The Operator was given no later than 30 days to cure the default, however, the default was not timely cured.

On October 19, 2021, the City provided the Operator with a Final Demand Letter due to payment non-compliance (Attachment I) informing the Operator that fees and penalties had accumulated to fifty-eight thousand four hundred thirty-two dollars and thirty-nine cents ($58,432.39). The Operator was given no later than 30 days to cure the default, however, the default was not timely cured.

On December 7, 2022, the City Manager offered a Cannabis Deferment and Payment Program (Attachment J) to assist cannabis Operators with the accumulated non-operating and other fees by deferring and providing additional time for payment without penalty. Under the program:
(a) Unpaid Non-operating Fees would be deferred (without penalty) until six (6) months after the Operator was issued a Certificate of Occupancy; and then repay accumulated NonOperating Fees within twelve (12) months; and Unit C
4916 Cecelia
St.

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(b) Operators would continue to be responsible for the timely payment of Community Benefit Fees and Cost Recovery Fees as they accumulated; and (c) Previously incurred Community Benefit Fees and Cost Recovery Fees would be subject to a payment plan and require timely payments.

All cannabis Operators interested in participating in this program were given no later than January 31, 2023, to execute a payment agreement. The City Manager did not receive a request from the Operator to participate in the deferment and payment agreement. As of the writing of this report, the City has not limited payment of fees due under DA18-021C since the Development Agreement has been in effect.

On May 31, 2023, the City sent the Operator a Final Demand Letter (Attachment K) demanding a response to the following demands: 1) Proof of the revival (or request for revival) of the LLC’s entity status with the California Secretary of State; 2) Forwarding payment for the total past due amount; and 3) Contact City staff for a meeting to revise CCP’s Schedule of Performance and for further information to become compliant with DA and CCP. The Operator did not respond in a timely manner and has failed to make any attempt to cure the defaults.

On August 9, 2023, the City issued an Escrow Account Letter (Attachment L) requiring all cannabis Operators to open an escrow account by September 15, 2023, to ensure payment of Cost Recovery Fees. As of the writing of this report, the Operator has not opened an escrow account nor made any payments into the account.

On October 12, 2023, the City issued to the Operator a Notice of Review Hearing (Attachment Q) with the hearing date, time, and place.

On October 24, 2023, the City issued a letter (Attachment M) updating the Operator on their payment and fees related to the DA by correcting the amount due to an error in the total amount billed. The City provided a credit in the amount of fourteen thousand nine hundred fifty dollars and fifty cents ($14,950.50). As of the writing of this report, the Operator owes the City onehundred forty-six thousand twenty-seven dollars and nine cents ($146,027.09). Community Benefit Fees, Cost-Recovery and Non-operating Fees plus penalties continue to accrue and the total amount due may be higher as of the date of the Review Hearing on November 14, 2023.

DISCUSSION/ANALYSIS
Under Section 19 of the Development Agreement, if the “City finds and determines based on substantial evidence that, Owner or Landlord executing [the] Agreement, or successor in interest thereto, has not complied in good faith with the terms or conditions of the Agreement, City may terminate or modify [the] Agreement (except that no modification shall increase Owner’s liability nor reduce Owner’s rights).

Pursuant to the CMC Section 5.20.080(6)(a), “[a]ny material violations of this chapter or any other ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 5 of 352 112 of 4584

relevant city law by a cannabis permittee, or cannabis permittee’s agent, is ground for suspending or revoking the relevant cannabis permit.” To suspend or revoke a cannabis permit the City Manager must determine “that the cannabis permittee has failed to comply with any conditions of approval, or any agreement or covenant.”
City staff recommends that the Hearing Officer review the material violations and evidence and make the following findings in support of finding the Operator to be in default of DA18-021C and in violation of the conditions of approval for CCP18-0019.

Violation #1. Breach of Payment Obligations. Pursuant to the DA Article. 5.b (Community Benefit Fees), Article. 7.c (Operating Fees) and Article. 8 (Cost Recovery Fees), the Operator must pay the City an annual community benefit fee in the amount of $9,523.86 ($1,904.77 down payment and monthly payments in the amount of $761.91), a cost recovery fee, and an operating [or nonoperating] fee each year since 2018. The Operator is also obliged to make payments for these fees in Condition of Approval No. 45; the obligation for Non-Operating Fees is also repeated in Condition of Approval No. 37 for distribution activities. The Operator has not made the required timely payments and as of October 24, 2023, is past due in the amount of $146,027.09 as shown in Table 1 below. Past-due payments continue to accumulate, including late payment penalties.

The Operator must pay all required DA fees in accordance with DA terms. Failure to pay fees constitutes a breach of the DA and may result in suspension or immediate revocation of the DA.

Accordingly, the Operator is in breach of its payment obligation under DA No. 18-021C.

TABLE 1 – SUMMARY OF PAST AND CURRENT AMOUNTS DUE AS OF OCTOBER 24, 2023.

Fee Type Payment Amount Due
Community Benefit Program $ 43,047.90
Cost Recovery Fee $ 64,147.67
Non-operating Fee $ 32,537.40
Penalties (Late Payment) $6,294.12
TOTAL: $ 146,027.09
Finding 1. The Operator breached the terms of Development Agreement No. 18-021C by failing to make all required payments to the City that are required pursuant to the terms of Development Agreement No. 18-021C.

Evidence: On June 5, 2018, Davina, LLC executed Development Agreement No. 18-021C, which is a legally binding contract between Davina, LLC and the City of Cudahy pursuant to DA Art. 5.b [Community Benefit Fees], Art. 7.c [Operating Fees] Art. 8 [Cost Recovery Fees]. In December 2022 (Attachment J), the City offered a deferment and payment plan option to the Operator but no interest was received. The City continued to issue monthly invoices from the period of October 2022 to October 2023 (Attachment N), which are due and payable. Proper notice of default was ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 6 of 352 113 of 4584

given with the opportunity to cure, but the Operator has failed to fulfill its monetary obligations owed to the City. This failure is a material breach of the DA and grounds for termination of the DA.

First, if the Operator asserts that City Officials previously made representations that nonretail cannabis operators would not have to pay Non-Operating Fees – no such authority is granted under the CMC nor the Development Agreement.

Forgiveness of fees due to a government agency, if not for a public purpose, constitutes an unlawful gift of public funds in violation of Article XVI, Section 6 of the California Constitution.

The Operator has requested the City forgive Non-Operating Fees spanning the course of an 18- month period and has failed to provide any evidence that the forgiveness of this debt would somehow fulfill a public purpose.

Second, if the Operator asserts that it was unable to move forward with its project due to closures at City Hall caused by the COVID-19 pandemic, this argument would similarly fail. During the height of the pandemic, City Hall’s physical premises were closed to the public, however, the City continued to conduct business, and process requests, including applications for building permits which could be dropped off at the front of City Hall.

Third, if the Operator asserts that the Contested Fees are subject to the Mitigation Fee Act, such assertion is not supported by the law. The Contested Fees are a part of the Development Agreement entered into between the City and the Operator and was enacted via ordinance pursuant to Development Agreement Law (Gov. Code §§ 65864-65869.5). Fees imposed by development agreements are expressly exempt from the Mitigation Fee Act. Gov. Code § 66000(b) (“ ’Fee’ means a monetary exaction other than a tax or special assessment…but does not include…fees collected under development agreements adopted pursuant to Article 2.5 (commencing with Section 65864) of Chapter 4…”). Therefore, the Contested Fees are not subject to the Mitigation Fee Act.

Further, even if the Mitigation Fee Act was applicable to the Contested Fees, in order to properly contest the Contested Fees, the Operator would have been required to tender the required payment, in full; and serve written notice to the City that informs the City that payment has been tendered under protest accompanied by a statement of facts.

Gov. Code § 66020(a). However, such protests must be filed at the time of the approval of the development or within ninety (90) days of the imposition of fees. The City and Operator entered into the Development Agreement on June 5, 2018. The 90-day statute of limitations to protest such fees ended on September 3, 2023, and has Operator tendered payment in full as required by Government Code Section 66020(a). Therefore, any opportunity to protest under the Mitigation Fee Act has long since passed.

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Fourth, if the issue is raised by the Operator, the holdings in Nollan v. California Coastal Commission and Dolan v. City of Tigard do not apply to the Contested Fees. Nollan, (1987) 483 U.S. 825; Dolan, (1994) 512 U.S. 374. The U.S. Supreme Court holding in Nollan requires exactions to (1) bear a nexus to the burdens imposed by development; and (2) substantially advance a legitimate state interest. The 5-4 U.S. Supreme Court decision in Dolan refines the second prong of the Nollan test and requires development conditions to have a “rough proportionality” to a proposed development’s impact. Dolan at p. 391.

However, the holdings in these cases are inapplicable to Contested Fees. Here, the Court notably limited the holding to adjudicative decisions, and not legislative decisions. Id., at p. 385; see also Lingle v. Chevron U.S.A., (2005) 544 U.S. 528, 547 (reaffirming that the rough proportionality requirement applies to adjudicative decisions and not legislative decisions), Leroy Land Development v. Tahoe Regional Planning Agency (1991) 939 F.2d 696, 698 (holding that separately negotiated agreements are not subject to an unconstitutional “takings” analysis because the agreements were entered into voluntarily, in good faith and supported by consideration). In consideration for those Contested Fees, Operator received a ten (10) year term with an option to renew for another ten (10) year term to operate a medicinal commercial cannabis facility.

Finding 2: The Operator has failed to comply with Conditions of Approval No. 1(a) and (b) of the CCP, which required the Operator to pay all City-issued invoices within 30 days of receipt thereof.

Evidence: The City approved Development Agreement No. 18-021C subject to Conditions of Approval, which are incorporated as part of Development Agreement No. 18-021C. Condition of Approval 1(b) provides that the Operator is required to pay all City-issued invoices within 30 days of receipt thereof. The City has sent the Operator regular monthly invoices for Community Benefit Program fees, Cost Recovery fees, Non-Operating fees, and late penalties from 2019 to September 2023 (Attachment O). The current outstanding fees owed by the Operator have been owed to the City for longer than 30 days as shown in (Attachment N). Despite demand and after proper notice of default and opportunity to cure, the Operator has failed to cure its monetary obligations owed to the City.

Finding 3: Pursuant to Condition of Approval Nos. 13 and 45, the Operator, LLC’s failure to pay all fees constitutes a cross-breach of Development Agreement No. 18-021C and is grounds for revocation of the CCP.

Evidence. Pursuant to the foregoing evidence, the Operator’s non-payment of Non-Operating Fees due under the Development Agreement and all fees due under the Development Agreement, respectively, in violation of Condition Nos. 13 and 45 and constitute grounds for revocation of the Operator's interest in the CCP for the Site.

Violation #2. Non-Compliance with State Law. The DA sets forth standard operating procedures ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 8 of 352 115 of 4584

as mentioned in DA Art. 4.a. [Facility Operations]. At all times, the Operator must be a lawful entity.

Finding 4: The Operator is unable to lawfully operate the LLC due to the Suspended status with the Secretary of State and is therefore in breach of DA Art. 4.a.

Evidence: The City has learned that Davina, LLC’s legal status as a California limited liability company has been suspended. (Attachment P) shows the Certificate of Status with the Secretary of State of California dated October 31, 2023. The Certificate of Status for Davina, LLC states:
“The above-referenced entity’s powers, rights, and privileges are suspended in California.” See, Rev. & Tax Code Sec. 23301. Despite notice of default and opportunity to cure, Davina, LLC’s entity status remains “FTB” suspended by the California Secretary of State and, as such, the entity is unable to operate in the State of California.

A suspended business entity becomes essentially prohibited from legally operating within the State of California unless and until such suspended status is withdrawn. The consequences of this suspended status include, without limitation, the business entity being unable to sell, transfer or exchange real property in California, as well as risking any contracts entered into by the business entity during the time of suspension being voidable at the option of the other party.

See, e.g., Casiopea Bovet, LLC v. Chiang (2017) 12 Cal.App.5th 656, 662; City of San Diego v. San Diegans for Open Government (2016) 3 Cal.App.5th 568, 577. Additionally, the suspended business entity may lose its ability to prosecute or defend legal actions (i.e., file or defend lawsuits). See City of San Diego, supra, 3 Cal.App.5th at p. 577.

Violation #3. Breach of Conditions of Approval No. 51 (Time Limits) under CCP 18-0019. CCP Condition No. 51.A. states the approval decision for this CCP becomes effective upon the expiration of the 15-day appeal period following the approval decision, or when any appeals of the decision are finally resolved. The CCP effective date for the Development Agreement was June 20, 2018. No appeal was ever filed and thus CCP Condition No. 51.A.i sets a 90-day time limit from the effective date of the CCP for the Permittee to obtain a Zoning Clearance. CCP Condition No. 51A.ii sets a 90-day time limit from the effective date of the CCP for the Permittee to complete construction of Phase I, or until September 18, 2018. CCP Condition No. 51A.iii sets a 180-day time limit from the effective date of the CCP for the Permittee to complete all Tenant Improvements and construction and to obtain a Certificate of Occupancy from the City Building Department, or until December 17, 2018. The City Manager may grant an extension of time if the Permittee has made a diligent effort to implement the Project.

Finding 5: The Operator has not obtained a Zoning Clearance pursuant to Chapter 20.84 of the CMC, nor has the Operator applied for a building permit to complete tenant improvements or otherwise obtained a certificate of occupancy. Therefore, the Operator breached its conditions of approval for CCP18-0019 by failing to implement the Project within the time limits set forth in ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 9 of 352 116 of 4584

Conditions of Approval No. 51.

Evidence: The Operator has not provided the City with any evidence it has obtained a Zoning Clearance, completed construction of Phase I, completed all Tenants Improvements, or obtained a Certificate of Occupancy for the Site within the time limits set forth in Condition of Approval No. 51. Without an extension, the deadlines expired in 2019. The City has no record of any request by the Operator to the City Manager for an extension of time, nor is there evidence that the Operator has made diligent efforts to comply, such as submitting for a zoning clearance or submitting for a building permit plan check. Despite notice of default and opportunity to cure, Davina, LLC remains in breach of its conditions of approval by failing to implement the Project within the time limits set forth in the Conditions for Approval No. 51.

NOTICE
Pursuant to Section 22 of the Development Agreement the City sent a Review Hearing notice to all concerned parties on October 12, 2023. The notice advised that the Review Hearing would be held on the hearing date at the location designated in (Attachment Q). Proof of certified mailing is provided as Attachment R.

ENVIRONMENTAL ANALYSIS
The action(s) have been assessed in accordance with the California Environmental Quality Act (CEQA) (Pub. Res. Code § 21000 et seq.) and the environmental regulations of the City. The Project is expected to be categorically exempt from the requirements to prepare additional environmental documentation per CEQA Guidelines Section 15321. Class 21 (Enforcement Actions by Regulatory Agencies) is applicable to “Actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issues, adopted, or prescribed by the regulatory agency or enforcement or a law, general rule, standard, or objective, administered or adopted by the regulatory agency.” Therefore, the action(s) are categorically exempt from the provisions of CEQA.

CONCLUSION
It is the City’s purpose and intent to regulate cannabis activities within the City in a responsible manner to protect the health, safety, and welfare of the residents of Cudahy and to enforce rules and regulations consistent with California Cannabis laws. Cannabis Operators with development agreements are obligated to comply with all provisions of the CMC, obligations of the DA and conditions of approval under the CCP. As discussed above and based on the evidence attached to this report, the Operator has failed to comply with their obligations despite being provided with ample notice and opportunities to achieve compliance. Therefore, staff recommends the Hearing Officer after independent review, consideration, analysis of staff’s report and the information presented, oral and written testimony by all parties and their witnesses, and the record as a whole – make a determination the Operator, Davina LLC, has breached the terms and conditions DA No. 18-021C and recommend that the Planning Commissioner and City Council repeal Ordinance No. 681 and terminate DA18-021C and revoke their interest under CCP18-0019.

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ATTACHMENT(S)
A. Ordinance No. 673
B. City Council Resolution No. 18-17
C. CCP18-0019 Conditions of Approval
D. Ordinance No. 681
E. Development Agreement No. 18-021C
F. Exhibit A-F of Development Agreement No. 18-021C
G. Correspondence Letter – Notice of Delinquency dated October 2, 2019 H. Correspondence Letter – Notice of Default dated May 4, 2021 I. Final Demand letter dated October 19, 2021
J. Correspondence Letter – Notice of Cannabis Deferment and Payment Program dated December 7, 2022
K. Final Demand Letter dated May 31, 2023
L. Correspondence – Notice of Escrow Account dated August 9, 2023 M. Correspondence – Notice of updated payment of fees dated October 24, 2023 N. Invoice Payment Due Letters from October 2022 to October 2023 O. Invoice Payment Due Letters from 2019 to September 2023 P. Certificate of Status dated October 31, 2023
Q. Notice of Hearing
R. Proof of certified mailing- Notice of Hearing
ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 11 of 352 118 of 4584 ATTACHMENT A.

Ordinance No. 673
ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 12 of 352 119 of 4584 ORDINANCE NO. 673

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY AMENDING TITLE 5 (BUSINESS LICENSES AND
REGULATIONS) AND TITLE 20 (ZONING) OF THE

CUDAHY MUNICIPAL CODE TO PROHIBIT CANNABIS

RETAILERS/DISPENSARIES CITYWIDE AND TO

ESTABLISH REGULATIONS AND A DISCRETIONARY

REVIEW PROCESS FOR THE ALLOWANCE OF

MEDICINAL-ONLY COMMERCIAL CANNABIS ACTIVITIES
(CULTIVATION, DISTRIBUTION, MANUFACTURING,

DELIVERIES, MICROBUSINESS, AND LABORATORY

TESTING) IN A SPECIFIED OVERLAY ZONE THROUGH A

DEVELOPMENT AGREEMENT
WHEREAS, in 1996, the California Legislature approved Proposition 215, also known as the Compassionate Use Act (the "CUA"), which was codified under Health and Safety Code Section 11262.5 et sec. and was intended to enable persons in need of medical marijuana for specified medical purposes, such as cancer, anorexia, AIDS, chronic pain, glaucoma and arthritis, to obtain and use marijuana under limited circumstances and where recommended by a physician. The CUA provides that "nothing in this section shall be construed or supersede legislation prohibiting persons from engaging in conduct that endangers others, or to condone the diversion of marijuana for non-medical purposes.";
WHEREAS, in 2004, the California Legislature enacted the Medical Marijuana Program Act (Health & Saf. Code, § 11362.7 et seq.)(the "MMP"), which clarified the scope of the CUA, created a state-approved voluntary medical marijuana identification card program, and authorized cities to adopt and enforce rules and regulations consistent with the MMP. Assembly Bill 2650 (2010) and Assembly Bill 1300 (2011) amended the MMP to expressly recognize the authority of counties and cities to "[a]dopt local ordinances that regulate the location, operation, or establishment of a medical marijuana cooperative or collective" and to civilly and criminally enforce such ordinances;
WHEREAS, the Federal Controlled Substances Act (21 U.S. C., § 801 et seq.) makes it unlawful under federal law for any person to cultivate, manufacture, distribute or dispense, or possess with intent to manufacture, distribute, or dispense marijuana.

Despite such federal prohibition, on August 29, 2013, the United States Department of Justice issued a memorandum (the "Cole Memo") stating that, notwithstanding the federal classification of marijuana as a schedule 1 controlled substance, jurisdictions that have legalized marijuana in some form are less likely to be subject to federal enforcement under the Controlled Substances Act if they have implemented strong and effective regulatory and enforcement systems to follow eight guiding principles: (1) preventing the distribution of marijuana to minors; (2) preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; (3) preventing the

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 13 of 352 120 of 4584 diversion of marijuana from states where it is legal under state law in some form to other states; (4) preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; (5) preventing violence and the use of firearms in the cultivation and distribution of marijuana; (6) preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; (7) preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and (8) preventing marijuana possession or use on federal property;
WHEREAS, in September 2015, the California State Legislature enacted, and Governor Brown signed into law three bills - Assembly Bill 243, Assembly Bill 266, and Senate Bill 643 - which together comprise the Medical Marijuana Regulation and Safety Act (the "MMRSA"). The MMRSA created a comprehensive dual state licensing system for the cultivation, manufacture, retail, sale, transport, distribution, delivery, and testing of medical cannabis;
WHEREAS, on August 22, 2016, the City Council of the City of Cudahy (the "City Council" of the "City") adopted Interim Urgency Ordinance No. 656U to establish a temporary moratorium on medical "commercial cannabis activities," as defined under the MMRSA, for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 661, on September 26, 2016;
WHEREAS, the MMRSA was renamed the Medical Cannabis Regulation and Safety Act (the "MCRSA") under Senate Bill 837 in June 2016, which also made substantive changes to the applicable state laws, which affect the various state agencies involved in regulating cannabis businesses as well as potential licensees; WHEREAS, on November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act ("AUMA") was approved California voters as Proposition 64 and became effective on November 9, 2016, pursuant to the California Constitution (Cal. Const., art.

II, § 10(a).). Proposition 64 legalized the nonmedical use of cannabis by persons 21 years of age and over, and the personal cultivation of up to six (6) cannabis plants. On November 14, 2016, the City Council adopted Urgency Ordinance No. 663 to prohibit outdoor personal marijuana cultivation and establish regulations and a permitting process for indoor personal marijuana cultivation;
WHEREAS, AUMA also created a state regulatory and licensing system j governing the commercial cultivation, testing, and distribution of nonmedical cannabis, and the manufacturing of nonmedical cannabis products. On January 9, 2017, Interim Urgency Ordinance No. 666 was adopted by the City Council to establish a temporary moratorium on nonmedical "commercial cannabis activities" for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 667, on February 27, 2017; Page2
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I
)
WHEREAS, on June 27, 2017, Governor Brown signed the Legislature-approved Senate Bill 94. SB 94 combined elements of the MCRSA and AUMA to establish a streamlined singular regulatory and licensing structure for both medical and nonmedical cannabis activities given that there were discrepancies between the MCRSA and AUMA. The new consolidated provisions under SB 94 is now known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA") to be governed by the California Bureau of Cannabis Control. MAUCRSA refers to medical cannabis as "medicinal cannabis" and nonmedical/recreational cannabis as "adult-use cannabis"; WHEREAS, on June 27, 2017, the as part of an Economic Development Ad Hoc Committee presentation on revenue-generating opportunities, commercial cannabis regulations and strategies were offered to and discussed by the City Council; WHEREAS, the City seeks to establish an overlay zone in the City in which certain medicinal-only commercial cannabis activities can be conducted in accordance with MAUCRSA and the City's police power under Section 7 of Article XI of the California Constitution;
WHEREAS, it is the purpose and intent of the City to regulate medicinal cannabis in a manner that is consistent with the Cole Memo and promotes the health, safety, and general welfare of the residents and businesses within the City, while limiting any negative impacts;
WHEREAS, the City intends to be on the forefront of groundbreaking research, science, innovation, and development of treatment for symptoms and cures in the field of medicinal cannabis, as scientific research, studies, and data have established that medicinal cannabis can help patients with a vast array of medical conditions; WHEREAS, the City desires to reduce the illegal market for cannabis while minimizing the chances of social harm and creating jobs and revenue for the City; and WHEREAS, nothing in this Ordinance shall be construed to allow persons to engage in conduct that violates the law, endangers others, causes a public nuisance, allows the illegal use or diversion of cannabis, or allows any activity relating to cannabis that is otherwise illegal under California state law, as amended.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein.

SECTION 2. Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 20.120 (Commercial Cannabis Overlay Zone), which shall read as follows:

Chapter 20.120 - Commercial Cannabis Overlay Zone.

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20.120.010 Definitions
For purposes of this Chapter 20.120, the following definitions shall apply:
"Commercial cannabis activities" mean the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products. ) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or j Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter, cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
"Cannabis product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients. "Day care center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
"Overlay Zone" means the commercial cannabis overlay zone, whose area and boundaries are attached to City Council Ordinance No. 673 as Exhibit "A" "MAUCRSA" means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, as may hereinafter be amended.
"Youth center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.

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20.120.020 Prohibitions.

Adult-use commercial cannabis activities and medicinal commercial cannabis activities, as both are described in state law, including, but not limited to MAUCRSA, are hereby prohibited unless otherwise allowed in this Chapter.

20.120.030 Overlay zone.

Medicinal commercial cannabis activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the Overlay Zone pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter

20.28 (Development Agreements). No such activities shall be permitted without a development agreement within or outside of the boundaries of the Overlay Zone.

The City may approve or deny such a development agreement in its sole and absolute discretion.

20.120.040 Particular restrictions for Atlantic Avenue.

Section 20.120.030 notwithstanding, no cannabis-related business shall be located within the Overlay Zone and on Atlantic Avenue with a storefront facing Atlantic Boulevard unless such business employs and effectuates a business model with a primary entertainment purpose.

20.120.050 Indoor Horticulture.

Indoor horticulture, excluding cannabis horticulture shall be permitted by-right within the Overlay Zone.

20.120.060 Prohibition on new schools, day cares, and youth centers in overlay zone.

The establishment of public or private schools providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center is prohibited within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone, is hereby prohibited, unless otherwise mandated under state or federal law. An existing public or private school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center located within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone shall be considered legal nonconforming, in accordance with Chapter 20.24 (Legal Nonconforming) of Title 20 (Zoning) of the Cudahy Municipal Code.

20.120.070 Temporary permits for local events - rights reserved.

The City reserves the right to issue temporary permits for onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair, district agricultural association event, or other similar event authorized under state law, which is located within the Overlay Zone, pursuant to the provisions of Subdivision (e) of Business and Professions Code Section 26200.

SECTION 3. Subsection (3)(p) of Section 20.64.090 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.64 (Residential Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 17 of 352 124 of 4584 (p) Schools, public and private, excluding schools providing instruction in kindergarten or any grades 1 through 12 located within 600 feet of a residential zone located within the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 4. Subsection (24) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(24) Day care centers, excluding those occupying any portion of the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 5. Subsection (49) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(49) Schools, colleges, and universities, accredited, including appurtenant facilities that offer instruction required to be taught by the Education Code of the state of California and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 6. Subsection (50) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(50) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 7. Subsection (46) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(46) Schools, colleges, and universities, accredited, including appurtenant facilities which offer instruction required to be taught by the Education Code of the state and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 18 of 352 125 of 4584 mandated under state or federal law.

SECTION 8. Subsection (47) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(47) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 9. Title 5 (Business License and Regulations) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 5.20 (Cannabis Permitting and Regulation), which shall read as follows:

Chapter 5.20 - Cannabis Permitting and Regulation.

5.20.010 Section Intent and Purposes.

The intent and purpose of this Chapter is to regulate Commercial Cannabis Activity (as defined below) in accordance with State Law (as defined below) to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law, including, but not limited to, MAUCRSA. The goals of this regulation for Commercial Cannabis Activity include:
(a) To comply with the goals and guidance set forth in the Cole Memo. (b) To minimize the size of the illegal market for Cannabis in the City and the surrounding regions.
(c) To create jobs, revenue, and economic growth for the City and its residents. (d) To enable law enforcement and regulators to have sufficient rights to inspect and audit Cannabis Permittees and take expeditious action against Cannabis Permittees who violate the requirements of this Chapter. (e) To minimize social harms which may arise from Cannabis including youth consumption or intoxicated driving.
(f) To regulate the manner of advertising and location of Cannabis Permittees such that public nuisance is minimized.

5.20.020 Definitions.

For purposes of this Chapter, the following definitions shall apply, unless the context clearly indicates otherwise:
(a) "Applicant" means an Owner seeking a Cannabis Permit pursuant to this Chapter.
(b) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 19 of 352 126 of 4584 compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. Cannabis also means the separated resin, whether crude or purified, obtained from cannabis. Cannabis also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter 5.18, Cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
(c) "Cannabis Permit" means a permit issued by the City to conduct a Commercial Cannabis Activity, including, but not limited to a Cultivation Permit, Distribution Permit, Manufacturing Permit, Microbusiness Permit, Retail Delivery Permit, or Testing.
(d) "Cannabis Permittee" means a Person who holds a Cannabis Permit. (e) "Cannabis Product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.
(f) "City" shall mean the City of Cudahy.
(g) "City Coden means the City of Cudahy Municipal Code. (h) "City Manager" means the City Manager of the City of Cudahy. (i) "Cole Memo" means the August 29, 2013 United States Department of Justice memorandum offering guidance on federal enforcement priorities regarding Cannabis.

U) "Commercial Cannabis Activity(ies)" means the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of Cannabis and/or Cannabis Products. (k) "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of Cannabis.
(I) "Cultivation Permit" means a Cannabis Permit for the Indoor Cultivation of Cannabis in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to the particular Cultivation Permittee.
(m) "Cultivation Permittee" means an applicant who has applied for and has been issued a Cultivation Permit by the City pursuant to the terms and conditions of this Chapter.

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ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 20 of 352 127 of 4584 (n) "Day Care Center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
(o) "Development Agreement" means an agreement adopted pursuant to the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter 20.28 (Development Agreements), which provides agreed upon community benefits to the City.
(p) "Distribution" means the procurement, sale, and transport of cannabis and cannabis products between persons authorized to engage in permitted commercial cannabis activities pursuant to this Chapter. (q) "Distribution Permit" means, with respect to a Distribution Permittee, a Cannabis Permit for Distribution in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to such Distribution Permittee.
(r) "Distribution Permittee" means a Person that has been issued a Distribution Permit by the City pursuant to the terms and conditions of this Chapter. (s) "Fully Enclosed and Secure Structure" means a space within a building or other structure which has a complete roof enclosure supported by connecting walls extending from the ground to the roof, which is reasonably secure against unauthorized entry, provides complete visual screening or is behind fencing or other features providing complete visual screening, and which is accessible only through one or more lockable doors and is inaccessible to minors. (t) "Good Cause" for purposes of refusing or denying a Cannabis Permit, for revoking a Cannabis Permit, or for refusing or denying a Cannabis Permit renewal or reinstatement means: (i) the Applicant has not obtained approval by the City Council of a Development Agreement setting forth the general terms for the operation of commercial cannabis activity or breaches a term or terms of a Development Agreement approved by the City Council pursuant to this Chapter; (ii) The Applicant or Cannabis Permittee has violated the terms, conditions, or provisions of this Chapter, of state law, of any regulations or rules promulgated pursuant to state law or this Chapter, any applicable local rules, regulations, or conditions placed upon its state license or Cannabis Permit; (iii) the licensed Premises have been operated in a manner that adversely affects the public health, safety, or welfare or the safety of the immediate neighborhood in which the Commercial Cannabis Activity is being conducted; (iv) the Applicant or Cannabis Permittee has knowingly made false statements, misrepresentations, or material omissions on an application form, renewal form, or other document submitted to the City; (v) the Applicant or Cannabis Permittee's criminal history does not indicate that the Applicant or Cannabis Permittee is of Good Moral Character or the Applicant or Cannabis Permittee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee. However, if the City has issued a Cannabis Permit to the Applicant or Cannabis Permittee, the City shall not consider any

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 21 of 352 128 of 4584 criminal history of the Applicant or Cannabis Permittee that was disclosed to or discovered by the City prior to issuance of the Cannabis Permit and is confirmed by the Applicant or Cannabis Permittee. For any criminal history that was not disclosed to or discovered by the City prior to issuance of a Cannabis Permit, or that arose after the issuance of the Cannabis Permit, the City shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the Applicant or Cannabis Permittee, and shall evaluate the suitability of the Applicant or Cannabis Permittee based upon such review. In determining which offenses are substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee, the City shall consider factors set forth in Business and Professions Code Section 26057; (vi) the Applicant or Cannabis Permittee is employing or allowing to volunteer any person whose criminal history indicates that such person is not of Good Moral Character; (vii) the Applicant or Cannabis Permittee fails to allow inspection by City officials of the security recordings, activity logs, business records, or other accessible records pertaining to the activities conducted on the applicable Premises; or (viii) the Applicant or Cannabis Permittee allows for Physician Services to be conducted on the applicable Premises. (u) "Good Moral Character" means having a personal history that demonstrates the propensity to serve the public in a manner that reflects openness, honest, fairness, and respect for the law and rights and well-being of others. In determining Good Moral Character, the following standards shall apply: (i) a judgment of guilt in a criminal prosecution or a judgment in a civil action shall not be used, in and of itself, as proof of an individual's lack of Good Moral Character.

Such judgment, however, may be used as evidence in the determination and when so used, the individual shall be notified and shall be permitted to rebut the evidence by showing that, at the current time, he or she has the ability to, and is likely to serve the public, in a fair, honest, and open matter, that he or she is rehabilitated, and/or that the substance of the former offense is not substantially related to the applicable Commercial Cannabis Activity; and (ii) a prior conviction where the sentence, including any term of probation incarceration, or supervised release is completed for the possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance, is not considered substantially related, and shall not be the sole ground for denial of a Cannabis Permit, except that any of the convictions set forth in Business and Professions Code Section 26057(b)(4), as may be amended, shall be deemed substantially related to applicable Commercial Cannabis Activity. (v) "Health and Safety Code" means the California Health and Safety Code, as amended from time to time.
(w) "Indoor" means within a Fully Enclosed and Secure Structure. (x) "Manufacture" or "Manufacturing" means to compound, blend, extract, infuse, or otherwise make or prepare a Cannabis Product from such blends, extractions, or infusions.

)
ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 22 of 352 129 of 4584 (y) uManufacturing Permit" means a Cannabis Permit to Manufacture in accordance with the terms and conditions of this Chapter and the conditions of approval for the applicable Cannabis Permit issued to the particular Manufacturing Permittee.
(z) "Manufacturing Permittee" means a Person that has been issued a Manufacturing Permit by the City pursuant to the terms and conditions of this Chapter.
(aa) "Medicinal Permittee" means a Person who is issued a Cannabis Permit to engage in Commercial Cannabis Activity with respect to medicinal Cannabis in accordance with applicable City law and State Law, including MAUCRSA. (bb) "Microbusiness" means a commercial medicinal cannabis business facility of cultivation of medicinal cannabis on areas less than 10,000 square feet and also acts as a licensed distributor, manufacturer, and Delivery-only retailer, pursuant to State Law, including MAUCRSA. Microbusinesses shall not be open to the public for point-of-sale retail Cannabis sales.
(cc) "Microbusiness Permit" means a Cannabis Permit to establish and conduct a Microbusiness in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Microbusiness Permittee. (dd) "Microbusiness Permittee" means a Person who has been issued a Microbusiness Permit by the City pursuant to the terms and conditions of this Chapter.
(ee) "Outdoors" means any location within the City that is not within a Fully Enclosed and Secure Structure.
(ff) "Owner" means any of the following: (i) a Person with an aggregate ownership interest of 20% or more in the Person applying for a Cannabis Permit, unless the interest is solely a security, lien, or encumbrance; (ii) the chief executive officer of a nonprofit or other entity; a member of the boards of directors of a nonprofit; (iv) an individual who will be participating in the direction, control, or management of the person applying for a Cannabis Permit. (gg) "Permit Zone" means, with respect to a Person holding a Cannabis Permit, the overlay zone described in Cudahy Municipal Code Chapter 20.120 where such Cannabis Permit type is permitted to operate pursuant to a Development Agreement with the City.
(hh) "Person" includes any individual, entity, firm, co-partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
(ii) "Physician Services" means the consultation by a State-licensed physician of a patient with the possible recommendation by such physician of medicinal Cannabis for such patient.

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 23 of 352 130 of 4584 OD "Premises" means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the Cannabis Permittee applicant or Cannabis Permittee where the Commercial Cannabis Activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one Cannabis Permittee. (kk) "Retail Delivery" means the commercial transfer or delivery of Cannabis or Cannabis Products to a customer, patient, primary caregiver or Cannabis Permittee.
(II) "Retail Delivery Establishment" means a location where Cannabis or Cannabis Products are, either individually or in any combination, Delivered pursuant to State Law, including MAUCRSA. Retail Delivery Establishments shall not be open to the public for point-of-sale retail sales. (mm) "Retail Delivery Permit" means a Cannabis Permit to Deliver Cannabis and Cannabis Products to customers, patients, and primary caregivers in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Retail Delivery Permittee.
(nn) "Retail Delivery Permittee" means a Person that has been issued a Retail Delivery Permit by the City pursuant to the terms and conditions of this Chapter. (oo) "State" means the State of California.
(pp) "State Law" means all laws of the State of California, including, but not limited to, all rules and regulations adopted by State agencies and State regulatory entities, including subsequent amendments to such laws, rules, and regulations.
(qq) "State Medicinal license" means a State license for medicinal Commercial Cannabis Activities issued pursuant to State Law. (rr) "Testing" means the activities conducted by a Testing Laboratory. (ss) "Testing Laboratory" means an accredited laboratory, facility, or entity in the City that offers or performs tests of medicinal cannabis or medicinal cannabis products in accordance with State Law and City law:
(tt) "Testing Permit" means a Cannabis Permit for Testing the quality and makeup of Cannabis and Cannabis Products pursuant to the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Testing Permittee. (uu) "Testing Permittee" means a Person who has been issued a Testing Permit by the City pursuant to the terms and conditions of this Chapter. (vv) "Volatile Solvent" means a Class I Flammable liquid as defined by the National Fire Protection Association, including butane and propane. (ww) "Youth Center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to,

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 24 of 352 131 of 4584 private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.

5.20.030 Commercial Cannabis Activity Prohibited.

All Commercial Cannabis Activity within the City is prohibited except as permitted by this Chapter.

5.20.040 Certain Commercial Cannabis Activity Permitted. Medicinal Commercial Cannabis Activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the area set forth in the overlay zone/Permit Area illustrated in Exhibit "A" to City Council Ordinance No. 673 pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code,§ 65864 et seq.) and Cudahy Municipal Code Chapter

20.28 (Development Agreements). No such activities shall be permitted without a Development Agreement within or outside of the boundaries of such overlay zone.

The City may approve or deny such a Development Agreement in its sole and absolute discretion. The City Manager is authorized to develop and promulgate policies and procedures consistent with the intent and spirit of this Chapter concerning the applications, application process, including, but not limited to, the information required of Applicants, and application review procedures, which shall inform the administration and protocols to be used and followed by the City in the application and hearing processes.

5.20.050 Business standards.

Commercial Cannabis Activity within the City shall be in conformance with the standards set forth in this Section, in addition to those additional standards that may be imposed through negotiated Development Agreement. The City Manager is hereby authorized to formulate and impose additional Business Requirements applicable to Cannabis Permittees in furtherance of the public health, safety, and/or welfare.
(a) Commercial Cannabis Activity shall only be allowed upon application and issuance of a Cannabis Permit and a Development Agreement by the City in accordance with the criteria and process set forth in this Chapter and City Code. (b) Zoning and Land Use.
(1) Operation Near Schools, Day Cares, and Youth Centers. Following the enactment of this Chapter, no new Premises shall be established, developed, or operated within 600 feet of a Day Care Center, Youth Center, or public or private school providing instruction in kindergarten or any grades 1 through 12 that is in existence at the time the Cannabis Permit is issued. All distances shall be measured in a straight line, without regard to intervening structures, from the nearest point of the building or structure in which the Premises are, or will be, located to the nearest property line of those uses describe in this Subsection. The restrictions set forth in this Subsection shall not apply to Premises which operate within 600 feet of any Day Care Center, Youth Center, or public or private school

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 25 of 352 132 of 4584 providing instruction in kindergarten or any grades 1 through 12, if such Premises existed prior to the establishment of the applicable Day Care Center, Youth Center, or school that is located within 600 feet of such Premises.
(2) Co-Location. All Commercial Cannabis Activity shall fully comply with all l mandates set forth in State Law. To the extent not prohibited under State Law, a Cannabis Permittee may be located within the same unit of the same Premises or building, facility or real property parcel as another Cannabis Permittee.
(3) Development Agreement.
a) Prior to commencing operations, all Cannabis Permittees shall enter into a Development Agreement with the City.
b) All Premises shall be operated in accordance with the terms of the applicable Development Agreement for the specified parcel of real property (or sub-portion thereof) upon which the Premises is located. c) Except as specified, Commercial Cannabis Activities shall not exceed the square footage authorized pursuant to the applicable Development Agreement.
d) All Premises shall be located in the Permit Zone pursuant to the applicable Development Agreement.
(c) Commercial Cannabis Activity is allowed only within Fully Enclosed and Secure Structures that are inaccessible to minors.
(d) Signage for any business must be applied for through the City's Planning Division, which shall require review and approval prior to installation. Business identification signage shall be limited to that needed for identification only, and shall not contain any logos or information that identifies, advertises, or lists the services or the products offered. No Cannabis Permittee shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the Premises of the Cannabis Permittee or elsewhere including, but not limited to, the public right-of-way. (e) From any public right-of-way, there shall be no visible evidence of the consumption of any Cannabis Products. Commercial Cannabis Activity shall not adversely affect the health or safety of the nearby residents by creating dust, glare, heat, noise, smoke, traffic, vibration, odor or other impacts, and shall not be hazardous due to use or storage of materials, processes, products, or wastes. (f) Hours of operation limits, if any, shall be specified in terms mutually agreed upon in a Development Agreement.
(g) All Cannabis and Cannabis Products shall be kept in a secured manner during all business and nonbusiness hours.
(h) All Commercial Cannabis Activities shall operate within Premises that are compliant with all applicable State Laws and local laws.

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 26 of 352 133 of 4584 (i) Cannabis Permittees must pay all applicable taxes pursuant to all federal, State, and local laws, including, but not limited to, fees relating to infrastructure improvements within the Permit Zone.

U) Cannabis Permittees shall provide sufficient odor absorbing ventilation and exhaust systems so that odors outside the applicable Premises are not a nuisance on any adjacent property of public right-of-way. Any violation of this Section shall be remedied within thirty (30) days of the Cannabis Permittee receiving notice of such violation.
(k) Cannabis Permittees shall utilize product and inventory tracking software and accounting software that is consistent with reasonable business practices within the industry and the seed-to-sale tracking software being developed by the State. (I) Except permitted in this Chapter, on-site smoking, ingestion, or consumption of Cannabis or Cannabis Products shall be prohibited on Premises. Except to the extent otherwise permitted pursuant to this Chapter, the entrance of the Premises shall be clearly and legibly posted with a notice indicating that smoking, ingesting, or consuming Cannabis, Cannabis Products or alcohol on such Premises is prohibited.
(m) Signage for all Premises shall be in compliance with the City's sign code and application for all signs must be submitted to the City's Planning Division and comply with its sign permitting protocol.
(n) Alcoholic beverages and tobacco shall not be sold, stored, distributed, or consumed on the Premises. Cannabis Permittees shall not hold or maintain a license from the State Department of Alcohol Beverage Control to sell alcoholic beverages, or operate a business that sells alcoholic beverages or tobacco with respect to the Premises. In addition, alcohol shall not be provided, stored, kept, located, sold, dispensed, or used on the Premises.
(o) Physician Services shall not be provided at any Premises. (p) The Premises shall fully comply with all applicable rules, regulations, and laws including, but not limited to, zoning and building City Codes, the City's business license ordinances, the Revenue and Taxation Code, the Americans with Disabilities Act, and MAUCRSA.
(q) Each Cannabis Permittee shall provide the City Manager, or the City Manager's designee, with the name, phone number, facsimile number, and email address of an on-site representative of such Cannabis Permittee to whom the City and the public can provide notice if there are any operational problems associated with such Cannabis Permittee's Premises. Each Cannabis Permittee shall make reasonable and good faith efforts to encourage residents and the public to call this representative to resolve any operational problems before any calls or complaints are made to the City or law enforcement. (r) All Cannabis Permittees must comply with the following security requirements:
(1) General Security Requirements.

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 27 of 352 134 of 4584 a) Security cameras shall be installed and maintained in good working condition and used in a format approved by the City Manager. The cameras shall be in use 24 hours per day, 7 days per week. The areas to be covered by the security cameras include areas as determined by the City Manager, including, but not limited to, the area in which the primary Commercial Cannabis Activity occurs, e.g. the Cultivation area for a for a cultivator.
b) The Premises shall be alarmed with a reliable commercial alarm system that is operated and monitored by a security company or alarm business in a manner satisfactory to the City Manager.
c) Entrance to any storage areas shall be locked at all times and under the control of staff of the Cannabis Permittee.
d) The business entrance(s) and all window areas shall be illuminated during evening hours. The Applicant shall comply with the City's lighting standards regarding fixture type, wattage, illumination levels, shielding, etc., and secure the necessary approvals and permits, as necessary. e) All windows on the Premises shall be appropriately secured with all Cannabis and Cannabis Products securely stored.
f) Each Cannabis Permittee shall implement track and trace protocols, as noted above in this Section, in order to prevent diversion of Cannabis or Cannabis Products.
g) All waste and disposal containers shall be locked at all times and stored ins a secure area and, at all times, under the control of the Cannabis Permittee.
(2) Security Alarm Systems - Minimum Requirements.
a) Each Premises shall have a security alarm system installed by a licensed alarm company on all perimeter entry points and perimeter windows.
b) Each Premises must ensure that its location is continuously monitored. Premises may engage the services of outside vendors to fulfill this requirement, such as a private security firm.
c) Each Premises shall maintain up to date and current records and existing contracts on the Premises that describe the location and operation of each security alarm system, a schematic of security zones, the name of the licensed alarm company, and the name of any vendor monitoring the Premises.
(3) Lock Standards. At a minimum, all points of ingress and egress shall be secured with commercial-grade, non-residential door locks. (4) Video Surveillance Requirements.

ADMINISTRATIVE RECORD FOR REVIEW HEARING - DAVINA LLC Page Page 28 of 352 135 of 4584 a) Prior to exercising the privileges of a Cannabis Permit issued under this Chapter, an Applicant must install fully operational video surveillance and camera recording system. The recording system must record in digital format and meet the requirements outlined herein.
b) All video surveillance records and recording must be stored in a secure area that is only accessible to the management staff of the Cannabis Permittee.
c) Video surveillance records and recordings must be made available upon request to the City Manager or designee for a purpose authorized by this Chapter or for any other State or local law enforcement purpose. d) Video surveillance shall be held in confidence by all employees and representatives of the City Manager, except that the City Manager may provide such records and recordings to any State or local law enforcement agency for any purpose authorized under this Chapter for any State or local law enforcement purpose.
e) A sign shall be posted in a conspicuous place near each point of public access, which shall not be less than 12 inches wide and 12 inches long, composed of letters not less than one inch in height, stating that "All Activities Monitored by Video Camera" or "These Premises Are Being Digitally Recorded" or otherwise advising of all persons entering the Premises that a video surveillance and camera recording system is in operation and recording all activity as provided in this Section. f) The Premises shall utilize video surveillance equipment and a camera system that shall be remotely accessible by the City and Los Angeles County Sheriff's Department.
(5) Video Surveillance Equipment.
a) Video surveillance equipment shall, at a minimum, consist of digital or network video recorders, cameras capable of meeting the recording requirements described in this Section, video monitors, digital archiving devices, and a color printable capable of delivering still photos. b) All video surveillance systems must be equipped with a failure notification system that provides prompt notification to a Cannabis Permittee of any prolonged surveillance equipment interruption and/or the complete failure of the surveillance.
c) Cannabis Permittees are responsible for ensuring that all surveillance equipment is properly functioning and maintained so that the playback quality is suitable for viewing and the surveillance equipment is capturing the identity of all individuals and activities in the monitored Premises.
d) All video surveillance equipment shall have sufficient battery backup to support a minimum of four hours of recording in the event of a power outage.