Healdsburg City Council
March 20, 2023

ANALYSIS OF SPECIFIC TOPICS OF COMMUNITY CONCERN
Fire Safety
The Project site is located within the Wildland Urban Interface and is located within a designated "Moderate Fire Hazard Severity Zone." The Project will be required to meet all Building Code and Fire Code requirements to address fire hazards and comply with the Vegetation Management Plan (Firewise 2000, Oct 2021) for the Project (see Attachment 3, Saggio Hills EIR Addendum, Appendix E). The Vegetation Management Plan ("VMP") establishes five Fuel Modification Zones and prescribes required landscaping and maintenance treatments. The VMP identifies the Foss Creek tributary that traverses the site as the area of most concern due to the amount of brush and ladder fuels under the trees. The prescribed treatment involves limbing up the trees and removing dead, down, and dying vegetation to reduce fire risk. In other locations, the VMP prescribes thinning of shrubs and mowing tall grasses to reduce fire risk. The Applicant will be required to implement the VMP on an ongoing basis.

The recommended conditions of approval include a condition requiring submittal of an Emergency Preparedness and Evacuation Plan for review and approval by the Fire Department and Police Department prior to issuance of the first Certificate of Occupancy.

Water Availability
The Project is designed with water-efficient fixtures and faucets, as well as native and drought-resistant planting materials to minimize irrigation demands. The Applicant is also investigating possible "laundry to landscaping" greywater reuse. The EIR Addendum addresses the potential impact of the Project on the City of Healdsburg's water supplies and concludes that the Project would have lesser water demand and lesser impact than the 150-unit affordable housing project assessed in the Saggio Hills Project EIR.

The City of Healdsburg’s 2020 Urban Water Management Plan Update (UWMP) addresses vulnerabilities to the City's water supply due to climate change, including droughts, floods, and wildfires.

In recent years, the City has seen curtailments of its water diversions in response to extended drought conditions. The City is planning for future curtailments by improving and adding water supply infrastructure, gaining new water rights, and educating the public about the need for water conservation to ease the negative impacts associated with future droughts. Local measures to address water supply limitations include requiring the use of drought-resistant landscaping and enforcing mandatory conservation requirements as dictated by the severity of water supply shortages.

The UWMP estimates planned population growth in Healdsburg with consideration to the City's goals for development of affordable housing. Further, the UWMP assesses water demands and availability for lower income residential households consistent with the City's Regional Housing Needs Allocation. The UWMP provides water supply and demand projections for periods of prolonged drought (5-years) and concludes that the level of conservation needed to address annual deficits ranges from less than 5 percent to roughly 12 percent. The UWMP establishes City protocols for assessing and determining water supply reliability on an annual basis to help forecast and calibrate shortage response actions. The Project would be subject to demand reduction measures identified in the City's Water Shortage Contingency Plan that may be implemented by the City in response to water shortages and emergencies.

The City is currently working to construct both aquifer storage and recovery wells and a municipal recycled water pipeline. These water supply projects would help to increase potable water supplies and would help ease the level of conservation required during periods of drought. However, future droughts would still require some level of water conservation. To build drought resiliency, the Project relies on

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Packet Pg. 398 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

meeting or exceeding the City's water efficient landscaping requirements and Building Code requirements for indoor water fixtures.

Traffic and Vehicle Speeds
The Addendum to the Saggio Hills EIR (Attachment 3) includes a detailed evaluation of traffic impacts, including an explanation of recent State-mandated changes in the methodology used to analyze traffic impacts. The emphasis is now on total "Vehicle Miles Traveled" ("VMT") rather than intersection "Levels of Service" ("LOS") as was previously analyzed. A Transportation Memorandum prepared for the Project by Fehr & Peers found that the proposed 118-unit Project would generate significantly less traffic than the previously analyzed 150-unit project and concluded that the Project would have less than significant impacts on public transit, pedestrian and bicycle systems, and emergency access. The Transportation Memorandum is included as Appendix D in the Addendum to the Saggio Hills EIR (Attachment 3).

The Transportation Memorandum also addresses vehicular system hazard impacts. It identifies a 25 miles-per-hour speed limit on Parkland Farms Boulevard and concludes that the geometrics of the roadway and proposed intersections of driveways and parking lots would not result in hazardous conditions. The Memorandum provides a number of recommendations to enhance multimodal site access and internal circulation which are included as a suggested condition of project approval. The recommendations include the following:
(a) Review the final site plan to ensure that adequate sight distance is maintained at the Project driveways and internal intersections. No objects (landscaping, trees, monument signs, etc.) should be allowed within the sight distance triangles at the project driveways and internal intersections. (b) Review the final site plan and conduct a turning movement analysis for City of Healdsburg emergency vehicles to ensure adequate emergency vehicle circulation and access throughout the Project site.
(c) The multi-use trail segment between the Community Park and Parkland Farms Boulevard should have a 10-foot minimum width.
(d) Install a high-visibility crosswalk with a Rectangular Rapid Flashing Beacon (RRFB) at the proposed midblock multi-use trail crossing on Parkland Farms Boulevard. If, in the future, speeding vehicles are an issue, the City may consider installing a raised crosswalk to reduce vehicle speeds along Parkland Farms Boulevard.
(e) Consider an additional crossing across Parkland Farms Boulevard to connect to park and trail area on the east side of the site. The same crossing treatment as the northern proposed path crossing should be considered.
(f) Add stop bar and stop sign to Area 3 driveway for exiting vehicles to yield to pedestrians and through traffic on Parkland Farms Boulevard.
(g) Add “Driveways Ahead” signage on both directions of Parkland Farms Boulevard ahead of the Area 4 townhouse driveways to alert drivers of possible exiting vehicles. (h) Clarify shared-use path interaction with the existing roadway on Parkland Farms Boulevard south of the Project.

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Packet Pg. 399 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

Visual Impacts from Healdsburg Ridge Open Space Preserve The Project will be highly visible from various locations within the Healdsburg Ridge Open Space Preserve, including the Fox Pond area. Potential impacts are evaluated at a program level in the Saggio Hills Project EIR based on a conceptual layout plan only. The affordable housing component of the project was conservatively assumed to result in significant impacts related to substantially degrading the existing visual character or quality of the project area. The EIR analysis noted that the affordable housing component would likely appear as a continuation of the Parkland Farms development and other neighboring uses. EIR Mitigation Measure 3.1-1 requires the incorporation of design choices that minimize impacts on scenic resources viewed from the Fox Pond Area of the Healdsburg Ridge Preserve.

It concluded that, while this would reduce impacts to the maximum extent feasible; impacts would remain significant and unavoidable.

Because the affordable housing component of the was analyzed at a program level analysis in the Saggio Hills Project EIR and specific site development plans were not available at the time the EIR was certified, photo-simulations of the Project were prepared for the EIR Addendum to assess the Project’s potential to substantially degrade existing visual character or that quality of public views of the site and its surroundings from the Healdsburg Ridge Open Space Preserve. These photosimulations - one addressing the view from Arabian Way in the Parkland Farms neighborhood and the other addressing the view from Nancy's Hill Overlook Trail in the Healdsburg Ridge Open Space Preserve - are included in the Aesthetics section of the Saggio Hills EIR Addendum (Attachment 3).

The view from Arabian Way is not substantially altered by the Project as existing foreground vegetation almost entirely screens the development and the new structures would not project above the distant ridgeline in the background.

The view from Nancy's Hill Overlook Trail would be significantly altered with much of the residential development in Area 3 visible in the foreground and the upper portions of the corridor building in Area 5 visible in the background. The color palette of the buildings in Area 3 is well coordinated with the natural landscape. Three additional renderings are provided on Sheet A9.01 of the Plan Set (Attachment 7). These renderings help to illustrate the massing of the buildings, the texture of the facades, and how they fit into the natural setting.

When the Project site was designated for affordable housing as part of the Saggio Hills entitlements, the City accepted that views from some locations in the Healdsburg Ridge Open Space Preserve would become more urbanized. The Project has been sited and designed with consideration to visual impacts and great effort has been made to preserve the natural terrain and open space on the site. Additional conditions are not recommended.

Visual Impacts from Residences on Palomino Court
The Project as originally proposed included a total of 110 residential units. At the March 8, 2022, Planning Commission workshop, the Applicant received feedback from community members and Planning Commissioners that additional units should be added to the Project, if feasible. In response to that feedback, the Applicant added eight units to the south wing of the corridor building in Area 5 to establish a total of 118 residential units. This was accomplished by adding a third story to that wing of the building. The original two-story design was proposed after consulting with the neighbors on Palomino Court in the Parkland Farms subdivision whose homes overlook the corridor building. The massing and scale of the three-story design is illustrated on Attachment 7, Sheet A3.04 (see 11 Corridor Building South Elevation 02). Sheet A3.04A presents the original two-story design as an alternate for the Planning Commission's consideration.

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Packet Pg. 400 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

Light and Glare
The Project will introduce light into an area that is currently undeveloped. New sources of light and glare include lighting associated with parking and pedestrian facilities, streetlighting, exterior building lights, and building windows. Glare may be produced by building windows and photovoltaic panels.

Mitigation Measure 3.1-4a of the Saggio Hills Project EIR requires preparation and implementation of a lighting plan. The Applicant has submitted a site lighting plan that indicates the locations of fixtures and provides specifications for those fixtures. Sheet E1.02 of Attachment 7 presents the Site Lighting Plan.

Sheet E0.01 provides the luminaire schedule that identifies proposed fixtures. All luminaires are LED, and exterior lighting will be required to be downcast and shielded. Sheet E1.01 presents a Photometric Map of the lighting plan. As shown, lighting is largely confined to the developed areas. A condition is recommended that addresses potential glare from the photovoltaics by requiring that roof-top solar panels be non-reflective to the extent possible.

Construction-Related Impacts
Neighbors in the Parkland Farms subdivision have voiced concerns about construction-related noise, dust and traffic associated with the Project. Several conditions are recommended pertaining to construction activities to ensure that contractors adhere to best practices to ensure that impacts are minimized. The conditions require all construction-related vehicles, equipment staging and storage to be located onsite and prohibit construction access to the site through the Parkland Farms neighborhood.

CONSISTENCY WITH LAND USE POLICIES & REGULATIONS
Through the Design Review process, the Planning Commission is tasked with ensuring that new development is attractive and enhances the appearance of the community, that the best possible traffic circulation is obtained, that the design and layout of new development is in scale and character with surrounding uses, and that new development complies with the Healdsburg 2030 General Plan, the Saggio Hills Area Plan, and the Land Use Code.

General Plan Consistency
Attachment 11 presents a detailed analysis of the Project's consistency with applicable policies of the Healdsburg 2030 General Plan. As shown, the Project is consistent with land use policies establishing protections for hillsides and ridgelines. It implements Housing Element policies calling for affordable housing and housing which meets special housing needs, including those of residents with developmental disabilities. The Project complies with policies addressing energy-efficiency performance, multi-modal transportation needs, and requirements for street trees and landscaping. It also complies with policies for development within the wildland urban interface.

Saggio Hills Area Plan Consistency
Attachment 12 presents a detailed analysis of the Project's consistency with applicable policies of the Saggio Hills Area Plan. The proposed bicycle and pedestrian trail facilities implement policies in both the Open Space and Recreation chapter as well as the Circulation chapter. The Project's Vegetation Management Plan addresses policies in the Public Facilities & Services chapter that pertain to fire safety.

The Area Plan includes a number of applicable design-related policies, all of which are addressed by the environmentally-sensitive siting of development, the preservation of open space, the design features of the proposed residential buildings, and the landscaping plans.

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Packet Pg. 401 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

Land Use Code Consistency
Attachment 13 presents a detailed analysis of the Project's consistency with applicable regulations in the Land Use Code (Healdsburg Municipal Code, Chapter 20). As affordable housing, the Project is consistent with the Special Purposes of the R-1-3,500 zoning district. The Project is consistent with Land Use Code requirements for bicycle parking and transit access, recycling and refuse facilities, building height, site coverage, and parking lot design, lighting and landscaping.

Several of the proposed single-family lots do not meet the minimum lot area and/or minimum lot width standards established in LUC Section 20.08.030. However, per the Housing Accountability Act, "a proposed housing development project is not inconsistent with the applicable zoning standards and criteria, and shall not require a rezoning, if the housing development project is consistent with the objective general plan standards and criteria but the zoning for the project site is inconsistent with the general plan" (GC Sec 65589.5(j)(4)). In this case, the Project is consistent with the General Plan and with the Special Purposes of the zoning district in which it is located. Furthermore, as a 100% affordable housing project, the Project is eligible for unlimited waivers of development standards such as the minimum lot area and lot width requirements under SDBL.

As discussed elsewhere in this report, the Project does not meet Land Use Code requirements for offstreet parking (221-230 spaces depending on whether the 18 units in Area 6 are ownership or rental housing). The Applicant has requested a concession/incentive for the parking per SDBL. The Project would include 173 off-street parking spaces plus 36 on-street spaces, which exceeds the maximum amount of parking that may be required per SDBL (152 spaces).

The Project would not meet the Land Use Code requirement that one parking space per unit be located in a garage or carport. As addressed below under "Recommendation Regarding Affordable Housing Incentives," staff supports the waiver of this requirement as compliance would result in a further reduction in the amount of parking provided.

Saggio Hills Development Agreement Consistency
Attachment 14 presents an analysis of the Project's consistency with applicable provisions of the Saggio Hills Development Agreement. As noted, the Project is architecturally compatible with the remainder of the Saggio Hills project. The proposed locations of the Public Trails are generally consistent with the approximate locations for pedestrian and bicycle trails on the Project site as identified in the Development Agreement.

FINDINGS & RECOMMENDATION REGARDING TENTATIVE SUBDIVISION MAP The Planning Commission's review of a Tentative Map application is advisory to the City Council. Per HMC Section 17.04.100(B), the following six findings must be made prior to approval of a Tentative Map. The italicized text provides evidence of the consistency of the proposed Tentative Map with each finding.

1. The proposed map and its design and improvements are consistent with the general plan and any applicable specific plan.

The proposed Tentative Map (TM 2022-02) establishes parcels that are consistent with General Plan policies relating to the preservation on hillsides and natural landforms. The Tentative Map is designed to respect the natural terrain of the site and to protect environmentally sensitive areas including the Foss Creek tributary riparian corridor that traverses the site and to incorporate common open space into the site design. This is consistent with Saggio Hills Area Plan policies.

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Packet Pg. 402 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

The parcels will accommodate a variety of housing types, providing affordable housing opportunities for a wide segment of the community, consistent with General Plan Housing Element policies. Attachment 11 and Attachment 12 provide a detailed analysis of the Project's consistency with the Healdsburg 2030 General Plan and the Saggio Hills Area Plan, respectively.

2. The site is physically suitable for the type and proposed density of development.

The Project site is accessed by an extension of Parkland Farms Boulevard that connects to Passalacqua Drive. It is designated for Medium High Density residential development by the General Plan and for affordable housing in the Housing Element and the Saggio Hills project entitlements. The site has been mass graded to establish pads for the proposed development.

3. The design of the subdivision and the proposed improvements are not likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

The Tentative Map establishes common area/open space parcels to protect the environmentally sensitive habitat along the tributary to Foss Creek that traverses the site and to protect the central knoll which is a prominent topographic feature. The proposed open space areas will provide wildlife habitat and corridors.

4. The design of the subdivision and the type of improvements are not likely to cause serious public health problems.

The Saggio Hills EIR and the EIR Addendum prepared for the Project (Attachment 3) evaluate potential impacts to public health including air quality impacts, noise impacts, hazards and hazardous materials, and wildfire. These analyses concluded that the Project will not result in public health hazards.

5. The design of the subdivision and the type of improvements will not conflict with easements, acquired by the public at large, for access through or use of property within the proposed subdivision.

Currently, there are no easements for public access through or use of the property other than along the public right-of-way for Parkland Farms Boulevard. The Saggio Hills Area Plan and its associated entitlements identifies trail corridors for future public access that traverse the property. The trails and associated easements and maintenance agreements are addressed in the conditions of approval. The design of the Tentative Map and associated site improvements will not conflict with the future trail corridors.

6. Unless otherwise provided by the Subdivision Map Act, the design of the subdivision provides, to the extent feasible, for future passive or natural heating or cooling opportunities in the subdivision.

The design of the subdivision provides for solar access on all parcels and allows for passive or natural heating and cooling opportunities.

Staff Recommendation: Attachment 1 presents a draft Planning Commission resolution that provides a recommendation to the City Council for approval of the Tentative Subdivision Map (TM 2022-02). The resolution includes the findings cited above, plus suggested Conditions of Approval that must be satisfied prior to approval and recordation of the Final Map. The conditions address necessary easements and rights-of-way, and the need for subdivision improvement plans and a Disposition and Development Agreement for the Project.

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Packet Pg. 403 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

RECOMMENDATION REGARDING AFFORDABLE HOUSING INCENTIVE AND

WAIVERS OF DEVELOPMENT STANDARDS
As explained above and in Attachment 8 and Attachment 9, the Applicant is seeking a reduction in parking standards as an incentive under SDBL.
 Reduction in the number of off-street parking spaces. Per the Land Use Code, the Project is required to provide 230 off-street spaces if the 18 units in Area 6 are ownership units and 221 spaces if those 18 units are rental units. As proposed, the Project would include 173 off-street parking spaces and 36 on-street spaces.

Due to the level of affordability provided, the Project is entitled to unlimited waivers from the City’s development standards. The City is not required to waive or reduce development standards that would cause a public health or safety problem, cause an environmental problem, harm historical property, or would be contrary to the law. As designed, the Project requires the following waivers of development standards:
 Reduction in required parking in garages or carports. Per the Land Use Code, the Project is required to locate one parking space per dwelling unit in a garage or carport. The Project provides garages for the townhome units and some carport spaces in Areas 3 and 5, but not a sufficient number to meet this standard.
 Reduction in minimum lot size and minimum lot width. Per the Land Use Code, the minimum lot size in the R-1-3,500 zoning district is 4,000 SF and the minimum lot width is 40'. Several of the parcels established for the duplex townhomes do not meet these development standards.

Staff Recommendation: As explained in Attachment 9, the requested reduction in required off-street parking is necessary in order to contain the costs of the affordable housing project. Furthermore, the amount of proposed parking exceeds that which may be required for affordable housing projects under SDBL. For these reasons, staff recommends that the incentive be granted. Given the interest in maximizing on-site parking, staff supports a waiver of the requirement for covered parking. Establishing covered parking would increase costs and result in a reduction in parking spaces due to the spacing of support structures. These parking concessions would not have an adverse impact on public health and safety or the physical environment. Staff also recommends waiving the minimum lot width and minimum lot size standards for the single-family lots as required per SDBL.

FINDINGS & RECOMMENDATION REGARDING DESIGN REVIEW
In order to approve the Design Review application, the Planning Commission must make four findings as cited below. Following each finding is italicized text providing evidence to support the finding.

1. The proposed development or use is consistent with all applicable policies and requirements of the General Plan and Land Use Code.

As detailed in the staff report and Attachment 11 and Attachment 13 for Major Design Review Permit DR 2022-05, the Project is consistent with the policies of the Healdsburg 2030 General Plan and the Land Use Code. The Saggio Affordable Housing Project is consistent with the Medium High Density Residential (MHR) land use classification in the General Plan and the Special Purposes of the R-1-3,500 zoning district. The Project implements Housing Element policies calling for affordable housing and housing which meets special housing needs, including those for residents with developmental disabilities. It complies with policies addressing energyefficiency performance, multi-modal transportation needs, and development within the wildland

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Packet Pg. 404 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

urban interface. The Project is consistent with Land Use Code requirements for design and lighting of parking areas, bicycle parking, transit access, refuse and recycling storage, setbacks, building height, and site coverage. While several of the proposed single-family lots do not meet the minimum lot area and/or minimum lot width standards established in the Land Use Code, per the Housing Accountability Act, "a proposed housing development project is not inconsistent with the applicable zoning standards and criteria, and shall not require a rezoning, if the housing development project is consistent with the objective general plan standards and criteria but the zoning for the project site is inconsistent with the general plan" (GC Sec 65589.5(j)(4)). In this case, the Project is consistent with the General Plan and with the Special Purposes of the zoning district in which it is located. Furthermore, the Project provides 100% affordable housing and thus is eligible for unlimited waivers or reductions in development standards. While the Project does not meet Land Use Code requirements for off-street parking, the Applicant has requested a concession/incentive for parking in accordance with State Density Bonus Law. Neither the parking incentive nor waiver of the minimum lot size and width requirements would adversely affect public health and safety and, therefore, both are required as concessions/incentives under State Density Bonus Law.

2. The proposed design of the development or use, and all appurtenant structures, is consistent with the policies set forth in the Citywide Design Guidelines and the Saggio Hills Area Plan, as may be amended from time to time.

Although the Citywide Design Guidelines are applicable to all projects subject to Major and Minor design review, they are only mandatory within “Character Area 1.” In areas subject to a specific Area Plan, such as the Saggio Hills Area Plan, the Area Plan provides design guidelines and standards, and the Citywide Design Guidelines are only used to provide additional information about topics not addressed within the Area Plan. The Saggio Hills Affordable Housing Project site is located within the planning area for the Saggio Hills Area Plan which establishes comprehensive design standards for the Project. Therefore, the project design was evaluated for consistency with the design guidelines established in the Saggio Hills Area Plan.

As detailed in the staff report and Attachment 12 for Major Design Review Permit DR 2022-05, the Project is consistent with the design guidelines established in the Saggio Hills Area Plan. The Project's proposed bicycle and pedestrian facilities implement Open Space and Recreation and Circulation policies of the Saggio Hills Area Plan. The Project's Vegetation Management Plan addresses fire safety policies in the Public Facilities & Services chapter of the Area Plan. The Project's environmentally-sensitive siting of development, preservation of open space, design features, and the landscaping plans address the design-related policies of the Area Plan.

3. The proposed development or use is consistent with the purposes of the zoning district in which it is located.

As affordable housing, the Project is consistent with the Special Purposes of the R-1-3,500 zoning district. The district allows for innovative housing types and placement to provide flexibility and optimization of open space. The zoning district is intended to assist in promoting affordable housing by allowing residential development on smaller lots.

4. The proposed development or use is consistent with all other conditions imposed by the Planning Commission or City Council with respect to any matter related to the purpose of design review.

The Saggio Hills Development Agreement requires that the affordable housing project be architecturally compatible with the remainder of the Saggio Hills project. The architectural

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Packet Pg. 405 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

design of the Project utilizes materials, colors and design features that are compatible with the design of the Montage Resort and Resort Residences within the Saggio Hills project. The proposed locations of the Public Trails, as identified on the Project plan set, are generally consistent with the approximate locations for pedestrian and bicycle trails on the Project site as identified in the Saggio Hills Development Agreement.

Staff Recommendation: Attachment 2 presents a draft Planning Commission resolution for approval of Major Design Review (DR 2022-05) for the Project. The resolution includes the findings cited above, plus suggested Conditions of Approval.

ALTERNATIVES
After public comment and deliberation, the Planning Commission may consider alternatives to address concerns provided from the public. Alternatives include: (a) approving the Project as conditioned or as modified by the Planning Commission, (b) continuing action on the Tentative Map and Major Design Review applications to a later date with direction to the Applicant and staff to address specific topics of concern, or (c) directing staff to prepare findings for denial of the Project as proposed.

ENVIRONMENTAL ANALYSIS
The Saggio Affordable Housing Project is addressed in the Final Environmental Impact Report for the Saggio Hills Planned Development Project (State Clearinghouse No. 2003062025) which was certified by the Healdsburg City Council through the adoption of Resolution No. 15-2011. Certain components of development on the site (extension of Parkland Farms Boulevard and related utilities; rough grading of Project site; filling of wetlands and establishment of mitigation wetlands; creek restoration) were addressed at a project-level in the Saggio Hills Project EIR. The Saggio Hills Project EIR addressed the development of up to 150 units of affordable housing on the site at a programmatic level.

An Initial Study/Environmental Checklist was prepared for the Saggio Hills Affordable Housing Project and, based on the analysis contained therein, the Community Development Director determined that an Addendum to the Saggio Hills Project EIR is the appropriate environmental document for the Project.

Based upon substantial evidence demonstrated by the analysis included in the Addendum (Attachment 3), none of the conditions described in Sections 15162 or 15163 of the CEQA Guidelines calling for the preparation of a subsequent or supplemental EIR or negative declaration have occurred, specifically:

1. There have not been any substantial changes in the Project that require major revisions of the Saggio Hills Project EIR because of new significant environmental effects or a substantial increase in the severity of previously identified significant effects;

2. There have not been any substantial changes with respect to the circumstances under which the Project is undertaken that require major revisions of the Saggio Hills Project EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and

3. There is no new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the Saggio Hills Project EIR was certified, that shows any of the following:
(a) the Project will have one or more significant effects not discussed in the Saggio Hills Project EIR;

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Packet Pg. 406 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

(b) significant effects previously examined will be substantially more severe than shown in the Saggio Hills Project EIR;
(c) mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the Project, but the project proponents decline to adopt the mitigation measure or alternative; or (d) mitigation measures or alternatives which are considerably different from those analyzed in the Saggio Hills Project EIR would substantially reduce one or more significant effects on the environment, but the Project proponents decline to adopt the mitigation measure or alternative.

Staff Recommendation: Based on the above findings, staff recommends that the Planning Commission determine that the previously-certified Saggio Hills Project EIR, together with the Addendum, are adequate to serve as the required environmental documentation for the Saggio Hills Affordable Housing Project.

FISCAL IMPACT
All City costs for processing the Saggio Affordable Housing Project entitlements are funded by the Applicant in accordance with a Cost Recovery Agreement between the Applicant and the City of Healdsburg.

The Exclusive Negotiating Agreement between the City and the Applicant anticipates that, after the Applicant has secured entitlements for the Project, the parties will enter into a Disposition and Development Agreement that will address the transfer of title to the Project site to the Applicant and other transactional requirements.

ATTACHMENTS

1. Planning Commission Resolution - Tentative Map TM 2022-02 A. Conditions of Approval
B. Saggio Hills Mitigation Monitoring & Reporting Program

2. Planning Commission Resolution - Design Review DR 2022-05 A. Conditions of Approval
B. Saggio Hills Mitigation Monitoring & Reporting Program

3. EIR Addendum & Appendices
A. Tree Inventory Report
B. Preliminary Geotechnical Report
C. Initial Stormwater LID Plan
D. Transportation Memorandum
E. Vegetation Management Plan, Life Safety Report and Fire Flow Report

4. Project Site Location Map

5. Project Narrative

6. Tentative Map (07-22-22)

7. Plan Set (07-22-22)

8. Density Bonus Application

9. Concessions & Incentives

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Packet Pg. 407 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Affordable Housing Project (November 8, 2022)

10. Planning Commission Workshop Follow-Up Memo

11. General Plan Consistency Analysis

12. Saggio Hills Area Plan Consistency Analysis

13. Land Use Code Consistency Analysis

14. Saggio Hills DA Consistency Analysis

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Packet Pg. 408 Attachment: 8. PC Staff Report 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA)

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Packet Pg. 409 Attachment: 9. PC Minutes 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA)

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Packet Pg. 416 Attachment: 9. PC Minutes 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA)

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Packet Pg. 417 Attachment: 9. PC Minutes 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA)

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Packet Pg. 418 Attachment: 9. PC Minutes 11/08/22 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Hills Affordable Housing Project DA (February 28, 2022)

REQUEST FOR PLANNING COMMISSION ACTION
PROJECT TITLE: Saggio Hills Affordable Housing Project
SUBJECT: Development Agreement (DA 2023-01)
PROPERTY ADDRESS: 450 Parkland Farms Boulevard, Healdsburg, CA ASSESSOR PARCEL NO.: APNs 091-310-005 and 091-310-006
DEVELOPER: Freebird Development Company, LLC
OWNER: City of Healdsburg

RECOMMENDED ACTIONS
By motion, it is recommended that the Planning Commission:

1. Adopt Resolution No. 2023-xx (Attachment 1) recommending that the Healdsburg City Council approve the proposed Development Agreement by and between the City of Healdsburg and Freebird Development Company, LLC (DA 2023-01).

BACKGROUND
In 2011, the Healdsburg City Council approved a Final Environmental Impact Report ("Saggio Hills Project EIR") and master entitlements for the Saggio Hills Project. The master entitlements included the Saggio Hills Area Plan, annexation and zoning of the 258.5-acre Saggio Hills Project site, a Tentative Subdivision Map and a Development Agreement for the Saggio Hills Project. In 2022, an Addendum to the Final EIR was prepared to identify and analyze the potential environmental impacts of the Saggio Hills Affordable Housing Project. The Saggio Hills Project EIR and Addendum are available for review at the City of Healdsburg Community Development Center (401 Grove Street, Healdsburg, CA) and on the City's website. As entitled, the Saggio Hills Project includes the following components:
• A luxury resort with 130 keyed rooms, restaurant, pool and spa, and other features • Up to 70 residences
• Construction of private streets, associated utilities and trails • Construction of two public streets and associated utilities (Passalacqua Drive and an extension of Parkland Farms Boulevard)
Agenda Item #: 4.A.

Meeting Date: February 28, 2023
Prepared By: Linda Ruffing, Planning Consultant
Reviewed By: ________________________
Scott Duiven
Community Development Director

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• Mass grading and conveyance of 36.15 acres (Parcel 8) to City for a public park and developer contribution of $3M
• Payment of an "in lieu contribution" for a multi-use trail extending from Healdsburg Avenue to the Healdsburg Ridge Open Space Preserve (through the Community Park and Affordable Housing sites)
• Construction of a public hiking trail north of Passalacqua Drive (the "Northwest Trail") • Conveyance to City of 0.85 acres of land (Parcel 10) for a Fire Substation and developer contribution of $1.75M
• Construction of water pump station on approximately 0.51 acres of land (Parcel 9) and conveyance to City
• Mass grading of approximately 12.36 acres of land (Parcels 5 and 6) and conveyance to City for future affordable housing development.

The Saggio Hills Project developer, Sonoma Luxury Resorts LLC ("SLR"), has completed development of the resort, public and private streets and utilities, water pump station, the Northwest Trail, and the mass grading of Parcels 5, 6, 8 and 10. SLR and the City of Healdsburg ("City") have recently completed conveyance of the Fire Substation and Affordable Housing parcels to the City and are in the process of completing documentation necessary for conveyance of the Community Park parcels to the City. Pursuant to the Saggio Hills Development Agreement, the City is responsible for making arrangements for the development and construction of up to 150 units of affordable housing on the Saggio Hills Affordable Housing site (Parcels 5 and 6). Attachment 2 shows the location of the Saggio Hills Affordable Housing site ("Project site").

Following a competitive selection process, on February 16, 2021, the City Council approved an Exclusive Negotiating Rights Agreement ("ENA") with Freebird Development Company, LLC ("Developer") for development of affordable housing on the Project site. The ENA establishes procedures and standards for the negotiation of a Disposition and Development Agreement ("DDA") and establishes that, during the Negotiation Period, the Applicant is required to conduct community outreach, complete schematic design, and secure entitlements and any required environmental review.

The Developer hosted two community meetings in June and August of 2021 and submitted applications to the City seeking approval of a Tentative Subdivision Map, concessions under State Density Bonus Law, and Major Design Review for the Saggio Hills Affordable Housing Project ("Project"). On March 8, 2022, the Healdsburg Planning Commission conducted a workshop to provide an opportunity for the Applicant to present their plans for the Project. On November 8, 2022, the Planning Commission approved Major Design Review DR 2022-05 and recommended that the City Council approve Tentative Map TM 2022-02 for the Project.

City staff and Developer propose that a development agreement is appropriate to eliminate uncertainty and extend the term of project approvals in order to encourage planning for, investment in, and development of the Project. The Development Agreement by and between the City of Healdsburg and Freebird Development Company, LLC for the Saggio Hills Affordable Housing Project ("DA") (Attachment 1, Exhibit A) will be brought forward for Council action in conjunction with the DDA and TM 2022-02.

Per State and local law, prior to the City Council acting on a development agreement, the Planning Commission must provide a recommendation to the City Council addressing the consistency of the DA with the general plan and any applicable area plan or specific plan. The DA is brought forward to the Planning Commission for that purpose.

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PROJECT DESCRIPTION
Project Overview
The approximately 12.36-acre Project site is located south of the intersection of Passalacqua Drive and Parkland Farms Boulevard within the Montage development in northeast Healdsburg. The site has been rough-graded and is currently undeveloped. An extension of Parkland Farms Boulevard was recently constructed on an alignment that bisects the Project site and connects to Passalacqua Drive to the north.

Surrounding land uses include the Montage Resort and residential property to the north, the Healdsburg Ridge Open Space Preserve to the east and south, and the Parkland Farms single-family residential neighborhood to the west. Land adjacent to the site on the northwest is planned for development as a Community Park. The City of Healdsburg General Plan designates the Project site as Medium High Density Residential (MHR) and the site is zoned Single-Family Residential with a 3,500-square-foot minimum lot area (R-1-3,500).

The Project involves subdivision of the Property into a total of 17 parcels, comprised of two parcels for open space (“Parcel A” and “Parcel B”), one parcel for outdoor amenities (“Lot 1”), one parcel for a community building (“Lot 2”), one parcel for 42 residential housing units (“Lot 3”), ten parcels for a townhome residence on each parcel (“Townhome Lots”), one parcel for 48 residential housing units (“Lot 14”), and one parcel for 18 residential housing units (“Lot 15”), as said parcels and lots are shown on TM 2022-02 (Attachment 3).

Per DR 2022-05 as approved by the Planning Commission, the Project includes the following components:
• Parcel A shall remain as open space and improved with pedestrian trails to be constructed and maintained by Developer ("Parcel A Improvements"), and subject to a non-exclusive public easement in favor of the City for public access on, over and across Parcel A. • Parcel B shall remain as open space and improved with a multi-use trail to be constructed and maintained by City ("Parcel B Improvements"), and fee title to Parcel B shall be retained by City. • Lot 1 shall be improved with outdoor amenities such as community gardens, picnic areas and/or a small farm ("Lot 1 Improvements"), to be constructed by Developer, maintained by the Owners, and available for use by residents of Lot 3, Townhome Lots, Lot 14 and Lot 15. • Lot 2 shall be improved with a one-story community building of approximately 3,067 square feet, 4 surface parking spaces and associated hardscape and landscaping improvements ("Lot 2 Improvements"), to be constructed by Developer, maintained by the Owners, and available for use by residents of Lot 3, Townhome Lots, Lot 14 and Lot 15. • Lot 3 shall be improved with four, three-story residential buildings of a height not to exceed 35 feet, containing 42 residential units totaling approximately 45,299 square feet and comprised of one (1) studio unit, nineteen (19) one-bedroom units, eleven (11) two-bedroom units, and eleven (11) three-bedroom units, 64 surface parking spaces and associated hardscape and landscaping improvements ("Lot 3 Improvements"), which residential units shall be restricted for rental to and occupancy by lower income households, inclusive of very low income households and extremely low income households, at an affordable rent, for a minimum period of 55 years. Further, Lot 3 shall be subject to a non-exclusive public easement in favor of the City for ingress and egress from Parkland Farms Boulevard on, over and across Lot 3 to the planned parking lot serving the Healdsburg Ridge Open Space Reserve to be located adjacent to and east of Lot 3, in perpetuity.

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Packet Pg. 421 Attachment: 10. PC Staff Report 02/28/23 (3976 : Saggio Hills Affordable Housing TM, DA, DDA) Planning Commission Hearing - Saggio Hills Affordable Housing Project DA (February 28, 2022)

• The ten (10) Townhome Lots shall be improved with a two-story, three-bedroom townhome residence on each parcel of a height not to exceed 28 feet, and 1,766 square feet, and associated surface parking and hardscaping and landscaping improvements ("Townhome Lot Improvements"), which townhome residences shall be restricted for sale to and occupancy by persons and families of moderate income, at an affordable housing cost, for a minimum period of 45 years.
• Lot 14 shall be improved with one, three-story residential building of a height not to exceed 35 feet, containing 48 residential units totaling approximately 59,531 square feet and comprised of thirteen (13) studio units, eleven (11) one-bedroom units, twelve (12) two-bedroom units, and twelve (12) three-bedroom units, 60 surface parking spaces and associated hardscape and landscaping improvements ("Lot 14 Improvements"), which residential units shall be restricted for rental to and occupancy by lower income households, inclusive of very low income households and extremely low income households, at an affordable rent, for a minimum period of 55 years.
• Lot 15 shall be improved with two, three-story residential buildings of a height not to exceed 35 feet, containing 18 residential units totaling approximately 20,077 square feet and comprised of one (1) studio unit, six (6) one-bedroom units, six (6) two-bedroom units, and five (5) threebedroom units, 29 surface parking spaces and associated hardscape and landscaping improvements ("Lot 15 Improvements"), which residential units shall be restricted either (i) for rental to and occupancy by lower income households, inclusive of very low income households and extremely low income households, at an affordable rent, for a minimum period of 55 years, or (ii) for sale to and occupancy by persons and families of moderate income, at an affordable housing cost, for a minimum period of 45 years.
• Public improvements shall include (i) construction of sidewalks and streetlights along Passalacqua Drive and Parkland Farms Boulevard fronting the Property, (ii) striping of that portion of Passalacqua Drive and Parkland Farms Boulevard fronting the Property, (iii) installation and construction of a Rectangular Rapid Flashing Beacon at the crossing of Parkland Farms Boulevard located between Parcel B and Lot 2, and (iv) the Parcel A Improvements.

Project Phasing
The Project is intended to be constructed in no more than four phases by Developer. The first phase of the Project will consist of the construction and completion thereof of the Parcel A Improvements, Lot 2 Improvements, Lot 14 Improvements, and the Public Improvements (“Phase 1 Improvements”). The Parcel B Improvements will be designed and constructed by City, at its sole cost and expense, either before or concurrently with the construction of the Phase 1 Improvements by Developer. The second phase of the Project will consist of the construction and completion thereof of the Lot 1 Improvements and Lot 3 Improvements in accordance with the Existing Approvals (“Phase 2 Improvements”). The third phase of the Project will consist of the construction and completion thereof of the Lot 15 Improvements in accordance with the Existing Approvals (“Phase 3 Improvements”). The fourth phase of the Project will consist of the construction and completion thereof of the Townhome Lot Improvements in accordance with the Existing Approvals (“Phase 4 Improvements”). Phase 2 Improvements may be combined with the Phase 1 Improvements. Further, if Developer elects to develop and construct the Lot 15 Improvements pursuant to the Lot 15 Rental Option, then said Lot 15 Improvements may be constructed and completed as part of Phase 2 Improvements and/or the Phase 1 Improvements; however,

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if Developer elects to develop and construct the Lot 15 Improvements pursuant to the Lot 15 OwnerOccupied Option, then said Lot 15 Improvements shall be constructed and completed as the Phase 3 Improvements, which may be combined with the Phase 4 Improvements.

Development Agreement
The proposed Development Agreement for the Saggio Hills Affordable Housing Project ("DA"), as negotiated with the Developer, is presented in Attachment 1, Exhibit A. By entering into the DA, the City will grant the Developer vested rights to develop and construct the Project in accordance with the project approvals and will extend the project approvals for up to ten (10) years if the Phase 1 improvements have commenced on or before the date which is five (5) years after the date of approval of the DA. If the Phase 1 improvements have not commenced in five (5) years, the DA will be deemed terminated.

CONSISTENCY WITH LAND USE POLICIES & REGULATIONS
The Planning Commission is tasked with providing a recommendation to the City Council addressing the consistency of the proposed DA with the general plan and any applicable area plan or specific plan. In this instance, the applicable planning documents are the Healdsburg 2030 General Plan and the Saggio Hills Area Plan.

General Plan Consistency
Attachment 4 presents a detailed analysis of the Project's consistency with applicable policies of the Healdsburg 2030 General Plan. As shown, the Project is consistent with land use policies establishing protections for hillsides and ridgelines. It implements Housing Element policies calling for affordable housing and housing which meets special housing needs, including those of residents with developmental disabilities. The Project complies with policies addressing energy-efficiency performance, multi-modal transportation needs, and requirements for street trees and landscaping. It also complies with policies for development within the wildland urban interface.

Saggio Hills Area Plan Consistency
Attachment 5 presents a detailed analysis of the Project's consistency with applicable policies of the Saggio Hills Area Plan. The proposed bicycle and pedestrian trail facilities implement policies in both the Open Space and Recreation chapter as well as the Circulation chapter. The Project's Vegetation Management Plan addresses policies in the Public Facilities & Services chapter that pertain to fire safety.

The Area Plan includes a number of applicable design-related policies, all of which are addressed by the environmentally-sensitive siting of development, the preservation of open space, the design features of the proposed residential buildings, and the landscaping plans.

FINDINGS FOR APPROVAL OF DEVELOPMENT AGREEMENT
Chapter 17.20.030(C) of the Healdsburg Municipal Code requires the City Council to make the following findings when approving a proposed development agreement or an amendment thereto:
- The Development Agreement is consistent with the Healdsburg General Plan, any applicable specific plan and the zoning ordinance. This finding may be satisfied by a determination that the

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Development Agreement is consistent through provisions that are to be adopted concurrently with approval of the Development Agreement; and
- The Development Agreement will provide Healdsburg with tangible benefits beyond those that may be required by the City through project conditions of approval; and - Any environmental impacts related to the Development Agreement have been reviewed and considered in accordance with the provisions of the California Environmental Quality Act.

Staff recommends the following findings which are incorporated into Resolution No. 2023-xx presented for Planning Commission consideration (Attachment 1):

1. The Development Agreement is consistent with the Healdsburg 2030 General Plan and the Saggio Hills Area Plan. The Saggio Hills Affordable Housing Project is consistent with the Medium High Density Residential (MHR) land use classification in the General Plan and the Special Purposes of the R-1-3,500 zoning district. The Project implements Housing Element policies calling for affordable housing and housing which meets special housing needs, including those for residents with developmental disabilities. It complies with policies addressing energy-efficiency performance, multi-modal transportation needs, and development within the wildland urban interface. The Project is consistent with the design guidelines established in the Saggio Hills Area Plan. The Project's proposed bicycle and pedestrian facilities implement Open Space and Recreation and Circulation policies of the Saggio Hills Area Plan. The Project's Vegetation Management Plan addresses fire safety policies in the Public Facilities & Services chapter of the Saggio Hills Area Plan. The Project's environmentally-sensitive siting of development, preservation of open space, design features, and the landscaping plans address the design-related policies of the Saggio Hills Area Plan.

2. The Saggio Hills Affordable Housing Project and its Development Agreement will provide Healdsburg with tangible benefits including 118 units of affordable housing and associated amenities and site improvements.

3. The Saggio Hills Affordable Housing Project is addressed in the Final Environmental Impact Report for the Saggio Hills Planned Development Project (State Clearinghouse No. 2003062025) which was certified by the Healdsburg City Council through the adoption of Resolution No. 15- 2011. Certain components of development on the site (extension of Parkland Farms Boulevard and related utilities; rough grading of Project site; filling of wetlands and establishment of mitigation wetlands; creek restoration) were addressed at a project-level in the Saggio Hills Project EIR. The Saggio Hills Project EIR addressed the development of up to 150 units of affordable housing on the site at a programmatic level. An Initial Study/Environmental Checklist was prepared for the Saggio Hills Affordable Housing Project and, based on the analysis contained therein, the Community Development Director determined that an Addendum to the Saggio Hills Project EIR is the appropriate environmental document for the Project. Based upon substantial evidence demonstrated by the analysis included in the Addendum, none of the conditions described in Sections 15162 or 15163 of the CEQA Guidelines calling for the preparation of a subsequent or supplemental EIR or negative declaration have occurred, specifically:
(a) There have not been any substantial changes in the Project that require major revisions of the Saggio Hills Project EIR because of new significant environmental effects or a substantial increase in the severity of previously identified significant effects;

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(b) There have not been any substantial changes with respect to the circumstances under which the Project is undertaken that require major revisions of the Saggio Hills Project EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and (c) There is no new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the Saggio Hills Project EIR was certified, that shows any of the following:
i. the Project will have one or more significant effects not discussed in the Saggio Hills Project EIR;
ii. significant effects previously examined will be substantially more severe than shown in the Saggio Hills Project EIR;
iii. mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the Project, but the project proponents decline to adopt the mitigation measure or alternative; or
iv. mitigation measures or alternatives which are considerably different from those analyzed in the Saggio Hills Project EIR would substantially reduce one or more significant effects on the environment, but the Project proponents decline to adopt the mitigation measure or alternative.

ENVIRONMENTAL ANALYSIS
See Finding 3, above, for a recitation of the environmental documentation and findings for the Saggio Hills Affordable Housing Project and its associated development agreement.

FISCAL IMPACT
All City costs for processing the Saggio Hills Affordable Housing Project entitlements are funded by the Developer in accordance with a Cost Recovery Agreement between the Developer and the City of Healdsburg.

The Exclusive Negotiating Agreement between the City and the Developer anticipates that, after the Developer has secured entitlements for the Project, the parties will enter into a Disposition and Development Agreement that will address the transfer of title to the Project site to the Developer and other transactional requirements.

ATTACHMENTS

1. Planning Commission Resolution - DA 2023-01
Exhibit A: Saggio Hills Affordable Housing Project Development Agreement

2. Project Site Location Map

3. Tentative Map (TM 2022-02; July 22, 2022)

4. General Plan Consistency Analysis

5. Saggio Hills Area Plan Consistency Analysis

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MINUTES - DRAFT
Healdsburg Planning Commission
February 28, 2023 6:00 PM
401 Grove Street, Healdsburg
City Hall - City Council Chamber

1. ROLL CALL
Chair Luks called to order the meeting of the Planning Commission of the City of Healdsburg at 6:00 p.m.

Commissioners present: Barber, Breznikar, Luks, McKay, Wood Commissioners present via Zoom: Gerlach, Hunt
City Staff present: Community Development Director Scott Duiven, Planning Consultant Linda Ruffing, and Administrative Technician Amanda Gray

2. ADMINISTRATIVE ACTIONS
A. Approval of March 14, 2023 Agenda
On a motion by Commissioner Breznikar, seconded by Commissioner Barber, the Commission voted 7-0-0 to approve the February 28, 2023 agenda as amended to hear Agenda Item 5A – Election of Officer, prior to Agenda Item 4A.

B. Approval of Minutes
• February 28, 2023 Regular Meeting Minutes
On a motion by Commissioner Barber, seconded by Commissioner Wood, the Commission voted 7-0-0 to approve the February 14, 2023 regular meeting minutes.

C. Acceptance of Communications and Correspondence
Agenda Item No. 4B:
• Kathryn Goldman Schuyler
• Lynne Murphy
• Margaret Kaplan • David Lawrence
D. Declarations of Conflicts of Interest
Commission Hunt declared a conflict with Agenda Item 4A, Saggio Hills.

E. Disclosures of Ex Parte Communications
None.

3. PUBLIC COMMENTS
Adina Flores, spoke regarding Mayor Ariel Kelley, and shared her concerns with her seat on the Healdsburg City Council and her desire to have her removed from office.

Shelby Pryor, spoke regarding Mayor Ariel Kelley and shared his concerns with her seat on the Healdsburg City Council and her conflicts of interests.

5. NEW BUSINESS
A. Election of Officer
On a nomination by Commissioner McKay, seconded by Commissioner Barber, the Commission voted 7-0-0 to appoint Vesna Breznikar to the position of Vice Chair.

4. PUBLIC HEARINGS
Commissioner Hunt left the meeting prior to Agenda Item 4A.

A. Item
Description: Development Agreement (DA 2023-01)
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Project
Description: Development Agreement between City of Healdsburg and Freebird Development Company, LLC to vest the existing project approvals for a 118-unit affordable housing project for up to ten (10) years. Planning Commission will consider making a recommendation to City Council on Development Agreement.

Location: 450 Parkland Farms Boulevard (Parcels 5 and 6 of the Saggio Hills project) Applicant: Freebird Development Company, LLC
Environmental
Determination: An affordable housing project of up to 150 units on the project site was addressed at a programmatic level in the certified Final Environmental Impact Report ("FEIR") for the Saggio Hills Development Project (SCH #2003062025). An Addendum to the FEIR ("Addendum") was prepared for the Saggio Hills Affordable Housing Project. The FEIR and Addendum are available for review at the City of Healdsburg Community Development Center, 401 Grove Street, Healdsburg, CA.

Planning Consultant, Linda Ruffing, introduced the item and summarized the staff report. Ms.

Ruffing provided a project overview and discussed the site plan, Tentative Subdivision Map, Development Agreement, environmental review, and the recommended action.

Commission and staff discussion ensued regarding questions on the number, shape, color schemes and height of buildings, parking, timeline for decision on whether there will be lower income rental units versus moderate income home ownership units, Development Agreement and the Disposition and Development Agreement, transfer of land, and open space/trail network maintenance and responsibility.

Chair Luks opened the hearing for public input. There being no speakers, Chair Luks closed the public input portion of the meeting.

Chair Luks discussed the Development Agreement and a provision that is included that grants the developer the exclusive right to change the phasing on the project development. He said that he feels the City should have a say in any changes and is the appropriate entity to decide which of the phases go forward. He requested that Section 4.8 of the Development Agreement (Timing of Development) be eliminated.

Vice Chair Breznikar spoke in support of the project.

On a motion by Commissioner McKay, seconded by Vice Chair Breznikar, the Commission voted 6-0-1-0 (Hunt abstained) to adopt Resolution No. 2023-03 recommending that the Healdsburg City Council approve the proposed Development Agreement by and between the City of Healdsburg and Freebird Development Company, LLC (DA 2023-01) with the elimination of Section 4.8 – Timing of Development.

B. Item
Description: DA 2020-01.04 (North Village Development Agreement amendment); CUP 2019-04.02 (North Village Master Conditional Use Permit amendment); DR 2021-07.01, CUP 2021-04.01 (Parcel 4 Design Review and Conditional Use Permit amendments); TM 2022-07 (Parcel 4 Tentative Map)

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Project
Description: The project applicants are seeking approval of (a) amendments to the North Village Development Agreement and Master Conditional Use Permit to modify the affordability levels for residential uses on Parcels 2 and 4, and to modify the shared parking plan, (b) amendments to the Major Design Review and Conditional Use Permit for the mixed-use retail and residential development on Parcel 4 to address changes to the facades, building footprints, and landscaping, and (c) tentative map to establish a common parcel and three airspace parcels on Parcel 4.

Location: Parcel 2: 201 Dovetail Lane
Parcel 4: 1830 Boxheart Drive; 1840 Boxheart Drive; 70 Dovetail Lane; 80 Dovetail Lane
Hotel: 101 Dovetail Lane
Enso Village: 1801 Boxheart Drive
Applicant: Comstock Healdsburg, LLC (DA 2022-01.04; CUP 2019-04.02; TM 2022-07) Burbank Housing Development Corporation (DR 2021-07.01; CUP 2021-

04.01)
Environmental
Determination: On May 20, 2019, the Healdsburg City Council certified the Final Environmental Impact Report (FEIR) for the North Entry Area Plan (SCH# 2018062041) and adopted related findings, a Mitigation Monitoring and Reporting Program, and a Statement of Overriding Considerations. An Environmental Checklist & Addendum to the FEIR were prepared for the Master Conditional Use Permit for the North Village Project (MCUP 2019- 04) that was approved by the Planning Commission on February 11, 2020; and the Development Agreement for the North Village Project (DA 2020-01) that was adopted by the City Council on April 6, 2020. In accordance with the California Environmental Quality Act (CEQA) Guidelines Section 15183 (Projects Consistent with a Community Plan, General Plan, or Zoning), no further environmental review is required because the project components under consideration would not result in on-site, off-site or cumulatively significant effects on the environment that were not examined in the FEIR.

Planning Consultant, Linda Ruffing, introduced the item and summarized the staff report. Ms.

Ruffing provided a project overview and discussed the background, purpose of proposed amendments, affordability mix, sitewide affordable housing mix, proposed changes to unit mix, shared parking plan, sitewide parking demand, mobility services and TDM Plan, Parcel 4 design modifications, mixed use project rendering, Parcel 4 exterior modifications, modifications to building footprint, proposed landscaping plan, plant palette and furnishings, play equipment/materials, Tentative Map and findings, Development Agreement findings, Conditional Use Permit findings, Major Design Review findings, environmental review and the recommended actions.

Debra Geiler, Vice President of Entitlement and Forward Planning at Comstock Development Company, introduced the team of individuals that are present to answer any questions. Ms.

Geiler spoke regarding North Village Master Conditional Use Permit, Development Agreement and Amendments, project unit mix, and bond financing.

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Karen Massey, Senior Project Manager at Burbank Housing, provided a presentation and discussed project objectives, approved versus refined project, design refinements, refined elevations, refined site plan, parking, preliminary income and rent levels, and next steps/timeline.

Commissioner, staff and applicant discussion ensued regarding questions on the Foss Creek Pathway Plan and connectivity, North Entry Avenue Plan, entry feature, elevation of Building 14, façade, architecture, screening of tenants, Area Median Income, bond measure, commercial space retainment, Development Agreement, town homes being rented and sold, design of the promenade, lot split process, HOA management, privacy screening at the playground, trees and shading, terms under the Reciprocal Easement Agreement, missing middle housing, number of affordable housing units included, financing through the 501c3 and Parcel 2 net buildable area opportunities.

Chair Luks opened the hearing for public input.

Kathryn Goldman Schuyler, Palo Alto Ave., San Francisco, spoke as a future North Village Enso Village resident, and said she supports the presence of affordable housing that integrates lower income residents within a village with a sense of community but said she does not believe the currently proposed amendments do this and she explained why. She said she does not support the suggested amendments as they have been presented.

Tegan Wilson, 1205 Grove St., said she is a resident of Healdsburg Glen, an affordable housing/subsidized housing complex, and spoke in support of the project. She shared her experience living in the Healdsburg Glen complex and said that is has afforded her and other residents the opportunity to live and work in Healdsburg and she discussed the importance of that.

Dora Ortega, Healdsburg Glen Apartments, spoke on behalf of her community, and asked the Commission to consider and take into account the people that work at the hotels, restaurants and fields stating that these are low-income individuals, and it is not the same as middle income individuals and she explained why. She said that it is these people that help keep tourism high in Healdsburg and attract more visitors by their devoted and hard work at their places of business.

Calum Weeks, Policy Director for Generation Housing, thanked the Commission for their interest and advocacy for affordable housing and discussed the importance of this. He expressed his appreciation to the two prior speakers and said they touched on many important issues that he would encourage the Commission to amplify and take into consideration. He expressed his excitement for the Metropolitan Transportation Mission funding that was granted and discussed the different elements that help create a community and feels that this project design does that.

Cristal Lopez, Community Advocacy Coordinator for Corazon Healdsburg, thanked the City for providing interpretation services at this meeting, and said Corazon Healdsburg is in full support of this project. She discussed her concerns with parking, public transportation, the City not being walkable/ bikeable, housing prices and the AMI. She also said she is very happy that laundry hookups will be provided in each of the units.

Nick, Parkland Farms resident, spoke in favor of the project and said he hoped the Commission would approve it as presented. He provided a brief background on his family and shared his concerns with people being able to afford to live in Healdsburg, especially those

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who work here.

There being no further speakers, Chair Luks closed the public input portion of the hearing.

Commissioner Barber discussed the occupancy permit for the hotel and shared positive feedback on the ample bike storage, laundry hookups and the outdoor features that will be available.

Commissioner Wood spoke in support of the project and discussed the exterior façade changes.

Commissioner Hunt spoke in support of the project and recognized the challenges the applicants have had to address and how much work has gone into finding a solution. She discussed the waitlist for affordable housing units and the high demand and overwhelming need in Healdsburg. She also discussed the parking analysis, design, landscaping, and home ownership opportunities.

Commissioner McKay spoke in support of the project and discussed financing related to the preliminary income and rent levels spreadsheet presented and encouraged some type of additional articulation on Building 14, Elevation 2.

Commissioner Gerlach spoke in support of the project, and said he appreciated the work the applicants did to be aggressive in the bond market and discussed the significance of continuing to recognize the importance of public space and parking.

Vice Chair Breznikar spoke in support of the project and said that the applicants have been very thoughtful about the community that is going to live there. She shared positive feedback on laundry hook ups, bicycle storage, the promenade and praised the applicants for designing the extra parcels to be for sale units for middle income.

Chair Luks discussed the missing middle and said he is disappointed that this project is not going to make much of a dent in that. He said he is sensitive to the notion that this project is skewed towards the higher end of affordability and discussed the amount of affordable housing that will become available in Healdsburg through various project approvals. He also discussed home ownership verses rentals, Building 14 design and façade, and his concerns with parking.

Planning Consultant Ruffing said that the Resolution amending Major Design Review Permit (DR 2021-07.01) and Major Conditional Use Permit (CUP 2021-04.01) for the North Village Mixed Use Project (Parcel 4) could be amended to include language that says “with clarification that the permits will not become effective until the City Council adopts the Fourth Amendment to the Development Agreement.”
On a motion by Commissioner McKay, seconded by Vice Chair Breznikar, the Commission voted 7-0-0 to approve Resolution No. 2023-04 recommending that the Healdsburg City Council approve the proposed Fourth Amendment to the Development Agreement by and between the City of Healdsburg and CCS Healdsburg, LLC, for the North Village Project (DA 2020-01.04).

On a motion by Commissioner Wood, seconded by Vice Chair Breznikar, the Commission voted 7-0-0 to adopt Resolution No. 2023-05 modifying the Master Conditional Use Permit for the North Village Project (CUP 2019-04.02) to conform housing affordability levels to the

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Fourth Amendment to the DA and to authorize modifications to the sitewide Shared Parking Plan.

On a motion by Commissioner Breznikar, seconded by Commissioner Wood, the Commission voted 7-0-0 to adopt Resolution No. 2023-06 amending Major Design Review Permit (DR 2021-07.01) and Major Conditional Use Permit (CUP 2021-04.01) for the North Village Mixed Use Project (Parcel 4), based on the suggested findings and subject to the recommended conditions of approval, with clarification that the permits will not become effective until the City Council adopts the Fourth Amendment to the Development Agreement.

On a motion by Vice Chair Breznikar, seconded by Commissioner Barber, the Commission voted 7-0-0 to adopt Resolution No. 2023-07 approving a Tentative Map (TM 2022-07) for Parcel 4 of the North Village Project based on suggested findings and subject to the recommended conditions of approval.

The Commission took a recess at 9:29 p.m.

The Commission reconvened at 9:36 p.m.

C. Item
Description: Land Use Code Amendment 2023-01
Project
Description: Amendments to the Healdsburg Municipal Code including repealing Healdsburg Municipal Code Chapter 8.32: Medical Marijuana Dispensaries; amending Section 20.08.145: Permitted and Conditionally Permitted Uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) Districts; amending Section 20.08.155: Permitted and Conditionally Permitted Uses in the Mixed Use (MU) District; amending Section 20.08.195: Permitted and Conditionally Permitted Uses in the Industrial (I) District; adding a new Section 20.20.095: Commercial Cannabis Uses and Requirements; amending Section 20.20.100: Marijuana Cultivation, Possession and Use; and amending Section 20.28.310:

Definitions to allow for commercial cannabis uses in Healdsburg.

Location: Citywide
Applicant: City of Healdsburg
Environmental
Determination: Determine that the proposed Healdsburg Municipal Code amendments are exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (the “common sense exemption”) because it can be seen with certainty that there is no possibility that the amendments will have a significant effect on the environment.

Community Development Director, Scott Duiven, introduced the item and summarized the staff report. Director Duiven provided a project overview and discussed the proposed amendments to the Healdsburg Municipal Code to develop a regulatory framework for commercial cannabis uses. Mr. Duiven discussed the path forward which includes City Council review and approval of the proposed amendments, an application process for the selection of up to two retail dispensaries, establishing a commercial cannabis business permit fee to cover the costs of administering the program, and setting the annual rate of the cannabis business tax.

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Commission and staff discussion ensued regarding the application and permit process, and whether or not cannabis retailers should be allowed in the downtown commercial district.

Chair Luks opened the hearing for public input.

Eli Melrod, Co-Founder of SolFul, provided information on their business, allowable locations for dispensaries in Healdsburg and the importance of foot traffic to this type of business. Mr.

Melrod invited the Commission to tour one of their nearby stores.

Brandon Levine, Sonoma County resident, Founder and CEO of Mercy Wellness, shared his background and said that they have been instrumental in developing these ordinances in other cities all over the North Bay and that Healdsburg has done a great job. He said he is available to answer any questions the Commission may have related to Mercy Wellness.

There being no further speakers, Chair Luks closed the public input portion of the hearing.

Chair Luks stated that he had previously pushed for extending the prohibition on dispensaries in the downtown commercial district. He said he would like to withdraw his previous comments about the absolute limitation for dispensaries in the downtown commercial district. He said that the location criteria for dispensaries adequately addresses potential sensitive receptors, and that he sympathizes with the comments from operators regarding the importance of foot traffic.

Vice Chair Breznikar said it is a well-established business and the cannabis businesses have gone through a lot of trials and supports moving forward.

On a motion by Commissioner McKay, seconded by Vice Chair Breznikar, the Commission voted 7-0-0 to adopt Resolution No. 2023-08 recommending the City Council repeal Healdsburg Municipal Code Chapter 8.32: Medical Marijuana Dispensaries; amend Section 20.08.145: Permitted and Conditionally Permitted Uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) Districts; amend Section 20.08.155: Permitted and Conditionally Permitted Uses in the Mixed Use (MU) District; amend Section 20.08.195: Permitted and Conditionally Permitted Uses in the Industrial (I) District; add a new Section 20.20.095: Commercial Cannabis Uses and Requirements; amend Section 20.20.100: Marijuana Cultivation, Possession and Use; amend Section 20.28.310: Definitions; and related CEQA Exemption.

6. COMMISSIONER AND SUBCOMMITTEE REPORTS
None.

7. DIRECTOR’S REPORT
Director Duiven provided information regarding:
• Appointment of Commissioner Wood
• March 14, 2023, Planning Commission meeting agenda items • Brown Act requirements changing March 1, 2023, regarding attendance in person and virtually

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8. ADJOURNMENT
The meeting adjourned at 10:15 p.m.
________________________________ ________________________________ Scott M. Duiven, Secretary Phil Luks, Chair

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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: March 20, 2023
SUBJECT: Healdsburg Municipal Code Amendments to Allow for Commercial Cannabis Uses
PREPARED BY: Scott Duiven, Community Development Director STRATEGIC INITIATIVE(S):

Establish Proactive Policies/Programs to Continue to Promote Economic Diversity & Sustainable Growth
Provide Effective Governance
RECOMMENDED ACTION(S):

Conduct a public hearing and, by motion, introduce for first reading, by title only, an ordinance to repeal Healdsburg Municipal Code Chapter 8.32: Medical Marijuana Dispensaries; amend Section 20.08.145: Permitted and Conditionally Permitted Uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) Districts; amend Section

20.08.155: Permitted and Conditionally Permitted Uses in the Mixed Use (MU) District; amend Section 20.08.195: Permitted and Conditionally Permitted Uses in the Industrial (I) District; add a new Section 20.20.095: Commercial Cannabis Uses and Requirements; amend Section

20.20.100: Marijuana Cultivation, Possession and Use; amend Section 20.28.310: Definitions; and related CEQA Exemption.

COMMUNITY ENGAGEMENT/OUTREACH:

A public hearing notice was published in the Press Democrat and posted at City Hall. In addition information regarding the public hearing was disseminated via the City’s website and social media outlets as well as via email to those who have expressed interest in the development of the commercial cannabis ordinance. A detailed summary of previous community engagement and meetings related to commercial cannabis is summarized in the Background section of this Staff Report.

BACKGROUND:

The City of Healdsburg currently prohibits all commercial cannabis uses in the community. As required by Proposition 64, the City permits medical and nonmedical cannabis use and cultivation by individuals subject to specific requirements as outlined in Section 20.20.100 of the Healdsburg Municipal Code (HMC).

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The Council held a publicly noticed Work Session on Thursday, November 18, 2021, to discuss options for commercial cannabis uses. Staff presented materials at the Work Session that went over a range of alternatives regarding cannabis, from continuing the existing prohibition on commercial cannabis uses to allowing various types of commercial cannabis uses across the city.

The staff report included:
• A Timeline and Overview of Federal and State Cannabis laws • Definitions
• Types of commercial cannabis activities
• Types of cannabis products
• A layperson’s explanation of what the laws say
• How State regulation and licensing work
• Zoning considerations for various commercial cannabis activities, including information about crime and cannabis
• Equity and Cannabis
• How other cities in Sonoma County regulate cannabis
• Taxation and revenue issues.

At the conclusion of the Work Session, the Council directed staff to conduct a community survey and to report back with the survey’s results as well as with an approach to commercial cannabis based in part on the survey and in part on Council’s direction to move away from a prohibition and to allow and apply limits to commercial cannabis uses. City staff prepared a community survey in January 2022 in English and Spanish, with a survey end date of February 11, 2022. A total of 604 persons responded to the survey.

On May 5, 2022, staff returned to City Council and discussed the results of the community survey. Staff also provided City Council with a proposed approach for allowing commercial cannabis uses and received feedback from the Council and the public on the proposed approach.

Staff received direction to continue with the development of a regulatory program for cannabis uses and return with formal land use code amendments.

On September 6, 2022 staff presented the City Council with draft land use code amendments which would provide a regulatory framework for allowing commercial cannabis uses in Healdsburg. City Council was supportive of the overall approach and directed Staff to move forward with the formal adoption process.

On November 8, 2022 staff presented the Planning Commission with draft land use code amendments, with minor changes based on input provided by the City Council at their September 6, 2022 meeting, that would allow commercial cannabis uses in Healdsburg. Overall, the Planning Commission was supportive of the proposed regulatory framework. One area of consensus was a recommendation to change the term of a commercial cannabis permit from two years to three years. Other issues raised but without a clear majority was whether or not to allow non-retail uses such as manufacturing, whether or not a different approach should be considered with respect to location requirements for cannabis uses such as defining particular areas as

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opposed to buffering from sensitive receptors, and whether or not there should be a limit on the size of a dispensary.

On November 8, 2022, Healdsburg voters approved Measure M which established a cannabis business tax at annual rates up to and not to exceed 8% of gross receipts for cannabis businesses to be spent on unrestricted general revenue purposes, including for police, fire and emergency services, parks, affordable housing, and street maintenance.

On January 23, 2023 the City Council approved a consultant contract with HdL Companies to develop an application and internal review process for all commercial cannabis business applications, conduct a fee study to establish the appropriate application fees, develop internal procedures for reviewing cannabis business applications, and develop and administer a robust application process, based on City Council direction, to support the selection of the currently proposed two retail cannabis businesses (dispensaries).

On February 2, 2023 staff presented an update on the development of the cannabis ordinance to the Chamber of Commerce’s Good Morning Healdsburg program outlining the proposed regulatory framework for commercial cannabis. There were no concerns or issues raised by those in attendance.

On February 28, 2023 the Planning Commission conducted a public hearing and considered the proposed amendments to the Healdsburg Municipal Code. Commissioners were generally supportive of the proposed revisions and approach to allowing commercial cannabis uses in Healdsburg and adopted Resolution No. 2023-08 recommending City Council approval of the ordinance.

Since the Planning Commission hearing and in preparation for City Council approval of the ordinance staff and the City Attorney’s office reviewed the ordinance and have made a few clarifications and editorial corrections to the text of the ordinance. None of the edits are substantive and there is no need to refer these minor edits back to the Planning Commission.

DISCUSSION/ANALYSIS:

Overview of Municipal Code Amendments
Attachment 1 to this staff report provides a draft, red-lined version of specific chapters of the Healdsburg Municipal Code which require amendments in order to establish commercial cannabis uses within the City of Healdsburg. The regulatory framework for allowing commercial cannabis uses in Healdsburg outlined in the amendments is substantially the same as that presented to the Planning Commission at their November 8th workshop with additional amendments to address other parts of the Healdsburg Municipal Code that need to be amended in order to allow for commercial cannabis uses. A brief analysis of each chapter to be amended by the proposed Ordinance can be found below:

Chapter 8.32: Medical Marijuana Dispensaries
Chapter 8.32 Medical Marijuana Dispensaries was enacted in 2007 to prohibit medical marijuana dispensaries from locating in the City of Healdsburg. Now that the City is proposing to allow commercial cannabis uses, both for recreational and medicinal use, this Chapter is no longer

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needed and will be repealed in its entirety.

Chapter 20.08: Base Zoning Districts
The proposed ordinance amends Sections 20.08.145: Permitted and conditionally permitted uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) Districts; Section 20.08.155: Permitted and conditionally permitted uses in the Mixed Use (MU) District; and Section 20.08.195: Permitted and conditionally permitted uses in the Industrial (I) District to allow for commercial cannabis uses. The table below summarizes the proposed additions to the permitted and conditionally permitted uses in these five zoning districts that were identified for commercial cannabis uses during the May 5th City Council meeting and November 8th and February 28th Planning Commission meetings.

Permitted (P) and Conditionally Permitted
Uses (CUP)
Plaza
Retail
(PR)
Downtown
Commercial
(CD)
Service
Commercial
(CS)
Mixed
Use
(MU)
Industrial
(I)
Specific Use
Regulations
Cannabis storefront retailer (dispensary) - P P P P HMC

20.20.095
Non-storefront commercial medicinal retailer
(delivery only)
- - - - P HMC

20.20.295
Cannabis microbusiness (without cultivation) - P P P P HMC

20.20.095
Cannabis manufacturing facility (non-volatile/no
solvents)
- - - - P HMC

20.20.095
Cannabis manufacturing facility (volatile solvents) - - - - - Cannabis distributor - - - - P HMC

20.20.095
Cannabis testing laboratory - - - - P HMC

20.20.095
No commercial cannabis uses would be allowed within the Plaza Retail district which surrounds the Healdsburg Plaza. Cannabis storefront retailers (dispensary) and cannabis microbusinesses would be allowed in the Downtown Commercial, Service Commercial, Mixed Use, and Industrial zoning districts subject to specific use regulations outlined in a new Section 20.20.095 which is discussed further below.

A Type 9 non-storefront retailer (delivery only) was presented to the City Council as not being a permitted commercial cannabis use in the proposed land use code amendments. Subsequent to that meeting the Governor signed SB 1186 on September 18, 2022, and the Act takes effect on January 1, 2024. The Act prevents cities from prohibiting the retail sale by delivery of medicinal cannabis and requires all local jurisdictions to allow licensed, non-storefront, delivery-only medicinal cannabis businesses. Although cities and counties may still regulate or prohibit all other commercial cannabis activities, the Act represents a significant limitation on local control over cannabis businesses. The attached amendments have been modified to address this new law and provides that a licensed, non-storefront commercial medicinal retailer (delivery only) is a permitted use in the Industrial zone, that this use would not be included in the limit on the number of storefront retail dispensaries and or microbusinesses, and that it is subject to specific use regulations in the new Section 20.20.095.

Non-retail uses such as a cannabis manufacturing facility (utilizing non-volatile solvents), cannabis distributor, or cannabis testing laboratory would be allowed in the Industrial zoning district only and subject to specific use regulations in the new Section 20.20.095. Cannabis

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manufacturing facilities that rely on volatile solvents would not be permitted in any zoning district in Healdsburg. Commercial cannabis cultivation would also not be an allowed use in Healdsburg under the proposed changes.

Chapter 20.20 Standards for Specific Land Uses
A new Section 20.20.095 titled “Commercial cannabis uses and requirements” is proposed to be added to Chapter 20.20: Standards for Specific Land Uses to establish standards for commercial cannabis uses. This new section includes the following subsections:

A. Standards for all Commercial Cannabis Uses
B. Standards for Cannabis Storefront Retailers and Cannabis Microbusinesses.

C. Standards for Manufacturing, Testing, Storage, and Distribution of Commercial Cannabis D. Standards for Non-Storefront Commercial Medicinal Cannabis Retailers E. Enforcement
Rather than duplicate all of the information contained in the above subsections, the following summarizes each subsection and discusses areas of interest raised by the City Council and Planning Commission and how those issues are addressed. See the attached ordinance (Attachment 1) for a full accounting of the proposed amendments to the Healdsburg Municipal Code.

A. Standards for all Commercial Cannabis Uses
This section outlines standards that will apply to all commercial cannabis uses and address areas such as, but not limited to, application procedure and requirements, development standards, permit requirements, renewal requirements, taxes, and security requirements. One notable change based on input received at the City Council and Planning Commission meetings is an adjustment to the term for commercial cannabis permits which was originally proposed as 2 years to a term of 3 years.

B. Standards for Cannabis Storefront Retailers and Cannabis Microbusinesses The proposed ordinance limits the number of retail dispensaries to two (2). A Type 12 microbusiness license would count as a retail dispensary under the limits on the number of dispensaries. Also note that while the Type 12 microbusiness license from the State allows for up to 10,000 square feet of cultivation area, the proposed land use code amendments for Healdsburg do not allow for cultivation as part of a microbusiness. Both Type 10 storefront retail dispensaries and microbusinesses would be able to deliver cannabis goods under their respective licenses.

Based on City Council input at their May 5, 2022 meeting staff has included location requirements for dispensaries. "Path of travel” was selected as opposed to simple buffers in an effort to address barriers to path of travel such as the railroad right-of-way and Foss Creek. A buffer from a sensitive receptor on one side of a barrier could impact the potential location of a commercial cannabis use on a parcel on the other side of that barrier which for all intents and purposes has adequate separation. This could result in a commercial cannabis use being physically located close to a sensitive receptor but not readily accessible from a path of travel perspective. The City Council at their September 6, 2022 meeting noted that they would like to

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see West Plaza Park and 3 North Street removed from the list of parks as they are not active parks and do not represent sensitive receptors. Attachment 2 presents a general view of parcels that may be eligible for locating a retail dispensary or microbusiness. Any proposed retail dispensary or microbusiness will be evaluated in greater detail to ensure compliance with the criteria outlined below:
• A retail dispensary which is open to the public may only be located within the allowed zoning district(s) under Table 10 of Section 20.08.145, Table 12 of Section

20.08.155, and Table 15 of Section 20.08.195.
• A retail dispensary shall not be established on any parcel containing a dwelling unit, or immediately abutting (sharing a common property line with) a residential zoning district. Residentially zoned does not include mixed-use zoning for purposes of this chapter.
• A retail dispensary shall not be established within five hundred feet from any youthoriented property. • A retail dispensary shall not be established within two hundred and fifty feet of any public park (with the exception of West Plaza Park and 3 North Street), public playground, or public library.
• The distances listed above shall be measured between the nearest entrance (ingress/egress to commercial cannabis establishment, e.g., front door/public entry or service door) of the retail dispensary and the nearest property line of the parcel(s) on which the youth-oriented property, public park, public playground, or public library is located, along the shortest route intended and available for public passage (any public road, street, or highway, including footpaths and bicycle paths, or other route provided for the passage of people).

C. Standards for Manufacturing, Testing, Storage, and Distribution of Commercial Cannabis This subsection addresses standards for manufacturing, testing, storage, and distribution of commercial cannabis. The ordinance only allows for manufacturing which relies on non-volatile solvents. Non-volatile solvents are chemicals that do not produce a flammable gas or vapor.

Examples of which include ethanol, carbon dioxide, cooking oils, and butter. Manufacturing that relies on volatile solvents are not allowed. Volatile solvents are chemicals that produce a flammable gas or vapor and examples include butane, heptane, hexane, and propane.

D. Standards for Non-Storefront Commercial Medicinal Cannabis Retailers This subsection was added to address SB 1186 as discussed earlier in this report. The Act prevents cities from prohibiting the retail sale by delivery of medicinal cannabis and requires all local jurisdictions to allow licensed, non-storefront, delivery-only medicinal cannabis businesses. The attached amendments have been modified to address this new law and provides that a licensed, non-storefront commercial medicinal retailer (delivery only) is a permitted use in the Industrial zone, that this use would not be included in the limit on the number of storefront retail dispensaries and or microbusinesses, and that it is subject to the specific use regulations outlined in this subsection.

E. Enforcement
This subsection outlines the reasons for and the process by which the City may revoke, modify,

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or suspend any commercial cannabis permit. Permittees would be provided notice and an opportunity for a hearing.

Section 20.20.100 Marijuana Cultivation, Possession and Use The proposed ordinance amends this existing section of the Land Use Code to remove and replace the term “Marijuana” with the term “Cannabis” to provide consistency with the previously discussed amendments; eliminates references to previously prohibited commercial uses which are now proposed to be allowed under the ordinance; and eliminates duplicative definitions. Commercial cultivation is not allowed, and personal cultivation, possession, and use standards remain unchanged and consistent with State law.

Section 20.28.310: Definitions
The Definitions section of the Land Use Code is proposed to be amended to include cannabisrelated definitions that will provide additional clarity in the implementation of the commercial cannabis ordinance.

Applicable General Plan and Land Use Code Information
General Plan Consistency
The Land Use Code Amendments are consistent with the following guiding principle and goals of the General Plan:

Guiding Principle:
5-A Provide an open and inviting business climate, a balanced economic environment, and a diverse tax base.

GOAL ED-A Expand the commercial and industrial sectors of Healdsburg’s economy to increase jobs, meet the needs of residents and visitors, and generate revenues that support City services.

ENVIRONMENTAL STEWARDSHIP:

Should Council ultimately allow commercial cannabis operations in Healdsburg, there may be limited reductions in greenhouse gas emissions as fewer individuals may travel out of town to neighboring jurisdictions to purchase cannabis from other cities’ dispensaries.

ALTERNATIVES:

After public comment and deliberation, the City Council may consider alternatives to address any issues raised and propose revisions to the ordinance.

FISCAL IMPACT:

The establishment of a commercial cannabis business permit fee, which will be brought forward as a separate action for council consideration, will recover costs associated with staff time associated with implementing the commercial cannabis program. Additional revenues are anticipated from the cannabis business tax and may be spent on unrestricted general revenue purposes, including for police, fire and emergency services, parks, affordable housing, and street maintenance.

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ENVIRONMENTAL ANALYSIS:

The proposed Healdsburg Municipal Code amendments are exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (the “common sense exemption”) because it can be seen with certainty that there is no possibility that the amendments will have a significant effect on the environment.

ATTACHMENT(S):

Commercial Cannabis Ordinance
Potential Dispensary Locations

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CITY OF HEALDSBURG
ORDINANCE NO. ____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG REPEALING HEALDSBURG MUNICIPAL CODE CHAPTER 8.32: MEDICAL MARIJUANA DISPENSARIES; AMENDING SECTION 20.08.145: PERMITTED

AND CONDITIONALLY PERMITTED USES IN THE PLAZA RETAIL (PR),

DOWNTOWN COMMERCIAL (CD), AND SERVICE COMMERCIAL (CS)
DISTRICTS; AMENDING SECTION 20.08.155: PERMITTED AND
CONDITIONALLY PERMITTED USES IN THE MIXED USE (MU) DISTRICT; AMENDING SECTION 20.08.195: PERMITTED AND CONDITIONALLY PERMITTED USES IN THE INDUSTRIAL (I) DISTRICT; ADDING A NEW SECTION 20.20.095: COMMERCIAL CANNABIS USES AND REQUIREMENTS; AMENDING SECTION 20.20.100: MARIJUANA CULTIVATION, POSSESSION AND USE; AND AMENDING SECTION 20.28.310: DEFINITIONS TO ALLOW FOR

COMMERCIAL CANNABIS USES
WHEREAS, pursuant to its police powers and as authorized by the California Compassionate Use Act, the California Medical Cannabis Regulation and Safety Act (“MCRSA”), the Adult Use of Marijuana Act (“AUMA”), SB 94 and the Medical and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”), the City may enact laws or regulations pertaining to cannabis cultivation, dispensing, manufacturing, distribution, transportation, and testing within its jurisdiction; and
WHEREAS, the City wishes to establish a uniform regulatory structure for cannabis uses in the City in accordance with state law; and
WHEREAS, the City of Healdsburg Municipal Code (HMC) regulates allowable uses and development standards within the City; and
WHEREAS, amendments are proposed to the HMC including repealing Chapter 8.32:

Medical Marijuana Dispensaries in its entirety; amending Section 20.08.145: Permitted and conditionally permitted uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) districts; amending Section 20.08.155: Permitted and conditionally permitted uses in the Mixed Use (MU) district; amending Section 20.08.195 Permitted and conditionally permitted uses in the Industrial (I) district; adding a new Section 20.20.095: Commercial cannabis uses and requirements; amending section 20.20.100 Marijuana cultivation, possession and use; and amending Section 20.28.310: Definitions to allow for commercial cannabis uses; and
WHEREAS, the Planning Commission held a duly noticed public hearing on February 28, 2023, at which time it reviewed the proposed amendments and considered all public comments on the revisions and the related CEQA exemption; and

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2 WHEREAS, the proposed amendments will not allow for, nor encourage, any more development than is already anticipated under the City’s General Plan, or otherwise allow for or promote physical changes in the environment and, therefore, it can be seen with certainty that there is not a possibility that the proposed amendments may have a significant impact on the environment; and
WHEREAS, the proposed amendments are exempt from the California Environmental Quality Act pursuant to Section 15061(b)(3) (general rule) of the CEQA Guidelines in that as a general policy making activity and/or administrative activity there is no possibility that the implementation of this ordinance will have significant effects on the environment; and WHEREAS, the Planning Commission made the following affirmative findings pursuant to HMC Section 20.28.282 in support of the proposed amendments:

A. The amendments are consistent with the Healdsburg 2030 General Plan including the goals, and policies, in that no conflicts with any Goals, Policies, Programs or measures of the Healdsburg General Plan 2030 have been identified.

B. The amendments are consistent with the objectives of the Land Use Code contained in Section 20.04.010 given that: a) adoption of the proposed amendments will continue to protect and promote the public health, safety and general welfare of the community by providing updated standards; and b) the amendments will implement the goals, policies, and programs contained in the Healdsburg 2030 General Plan.

C. The Planning Commission has conducted a public hearing on the draft Land Use Code Amendments with hearing notices provided as prescribed in Land Use Code Section

20.28.080, including newspaper publication at least 10 days prior to the hearing date.

D. The amendments are exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines.

WHEREAS, based upon the Planning Commission’s findings, the City Council determines that the revisions are consistent with the General Plan including the Goals, Policies, and Implementation Measures of the Housing, Land Use, and Economic Development Elements of the adopted General Plan, and that the revisions are internally consistent with all other provisions of the Municipal Code.

NOW, THEREFORE, the City Council of the City of Healdsburg does ordain as follows:

Section 1. Findings.

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3 The above recitals are hereby declared to be true and correct findings of the City Council of the City of Healdsburg.

Section 2. Chapter 8.32 Medical Marijuana Dispensaries is hereby repealed in its entirety (additions underlined, deletions strikethrough).

Chapter 8.32

MEDICAL MARIJUANA DISPENSARIES
Sections:

8.32.010 Purpose.

8.32.020 Relationship to other laws.

8.32.030 Definitions.

8.32.040 Medical marijuana dispensaries prohibited.

8.32.050 Establishment or maintenance of medical marijuana dispensaries declared a public nuisance.

8.32.060 Penalties for violation.

8.32.010 Purpose.

The purpose of this chapter is to prohibit medical marijuana dispensaries from locating in the City of Healdsburg.

The City Council may adopt by resolution any regulations or policies that will further the purpose of this chapter, and that do not conflict with the provisions herein. (Ord. 1058 § 2, 2007.)

8.32.020 Relationship to other laws.

This chapter is not intended to, nor shall it be construed or given effect in a manner that causes it to, apply to any activity that is regulated by federal or state law to the extent that application of this chapter would conflict with such law or would unduly interfere with the achievement of federal or state regulatory purposes. It is the intention of the City Council that this chapter shall be interpreted to be compatible with federal, county, and state enactments, and in furtherance of the public purposes which those enactments express. Nothing in this chapter is intended to supersede any other provisions of this code. (Ord. 1058 § 2, 2007.)

8.32.030 Definitions.

For the purpose of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section.
“City” means the City of Healdsburg.
“Compassionate Use Act of 1996” means California Health and Safety Code Sections 11362.5 and 11362.7, et seq., as those sections are amended from time to time, including, without limitation, those amendments contained in SB 420.
“Medical marijuana dispensary” means any facility or location where medical marijuana is made available to and/or distributed by or to two or more of the following: a qualified patient, a person with an identification card, and/or a primary caregiver. A “medical marijuana dispensary” shall not include qualified patients, persons with an identification card and/or primary caregivers who associate within the state of California in order to collectively or cooperatively cultivate marijuana for medical purposes. A “medical marijuana dispensary” shall also not include any place or facility that is otherwise permitted or licensed by applicable laws to make marijuana available to qualified patients, persons with identification cards and/or primary caregivers. A primary caregiver of a qualified patient or person with an identification card may deliver, administer or provide medical marijuana at the primary residence of the qualified patient or person with an identification card without violating this chapter.

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4 “Person with an identification card” shall have the same meaning as defined in California Health and Safety Code Sections 11362.5 and 11362.7, et seq., as those sections are amended from time to time. “Primary caregiver” shall have the same meaning as defined in California Health and Safety Code Sections 11362.5 and 11362.7, et seq., as those sections are amended from time to time. “Qualified patient” means a person who is entitled to use medical marijuana pursuant to California Health and Safety Code Sections 11362.5 and 11362.7, et seq., as those sections are amended from time to time. (Ord. 1058 § 2, 2007.)

8.32.040 Medical marijuana dispensaries prohibited.

The establishment and/or operation of medical marijuana dispensaries shall be prohibited in all areas of the City of Healdsburg. No permit or any other applicable license or entitlement for use, including but not limited to the issuance of a business license, shall be approved or issued for the establishment or operation of a medical marijuana dispensary within the City limits of the City of Healdsburg. (Ord. 1058 § 2, 2007.)

8.32.050 Establishment or maintenance of medical marijuana dispensaries declared a public nuisance.

The establishment, maintenance, or operation of a medical marijuana dispensary as defined in this chapter within the City limits of the City of Healdsburg is declared to be a public nuisance. (Ord. 1058 § 2, 2007.)

8.32.060 Penalties for violation.

A. Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punishable therefor by a fine of not more than $1,000 or by imprisonment in the county jail for a period of not more than six months or by both such fine and imprisonment. In the event any civil suit or action is brought by the City to enforce the provisions of this chapter, the person responsible for such violation shall be liable to the City for the City’s costs of the suit, including, but not limited to, attorneys’ fees, expert fees, and other costs of the suit.

B. In addition to any other enforcement remedies available to the City under any applicable state or federal statute or pursuant to any other lawful power the City may possess, any violation of this chapter may be prosecuted or enforced as a nuisance pursuant to Chapter 1.12 HMC as that chapter may be amended from time to time. The City may also prosecute or enforce violations of this chapter as a criminal offense or by a civil court action, prosecuted by the City attorney in the name of the City or in the name of the people of the state of California, by seeking the appointment of a receiver, or in any other manner provided by law. (Ord. 1058 § 2, 2007.) Section 3. Section 20.08.145 Permitted and conditionally permitted uses in the Plaza Retail (PR), Downtown Commercial (CD), and Service Commercial (CS) Districts shall be amended to allow commercial cannabis uses as follows (additions underlined, deletions strikethrough):

20.08.145 Permitted and conditionally permitted uses: PR, CD, and CS Districts The following permitted and conditionally permitted uses may be allowed in the PR, CD and CS Districts. Chapter

20.28 HMC, Article V describes the procedures for obtaining a conditional use permit.

Table 10 Permitted and conditionally permitted uses: PR, CD and CS Districts Permitted (P) and Conditionally Permitted (C) Uses PR CD CS Specific Use Regulations
Residential Uses
Accessory dwelling unit P P P HMC 20.20.010
Day care, general -- C C

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Packet Pg. 445 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

5 Permitted (P) and Conditionally Permitted (C) Uses PR CD CS Specific Use Regulations
Day care, limited -- P P
Homeless shelters -- -- P
Multifamily dwellings located on the same site as a commercial use – above ground floor C P P
Multifamily dwellings located on the same site as a commercial use – any floor -- P P Residential care, general -- C C
Residential care, limited -- P P
Single-room occupancy dwellings located on the same site as a commercial use – above ground floor C P P
Single-room occupancy dwellings located on the same site as a commercial use – any floor -- P P
Supportive housing P P P
Transitional housing P P P
Vacation rental -- C --
Retail Trade and Services
Ambulance service -- -- P
Antique car display and sales -- C P
Antique sales – above ground floor P P C
Antique sales – ground floor C P C
Art galleries and picture framing with art sales P P P
Arts and crafts schools -- P P
Arts, crafts and hobby stores, including instructional classes as an accessory use P P P Automobile rentals -- -- P
Automobile washing (self-service) -- -- P
Automotive repair -- -- C
Automotive sales and service, new and used, with auto service -- -- P Automotive service stations, including smog testing, minor repair (tune-ups and brake repair only), towing services, vehicle storage and mini-markets -- -- C Automotive supply stores -- P P
Automotive upholstery shops -- -- C
Bakeries, retail P P P
Banks, savings and loans, thrift and loans, credit unions, including automated teller machines and drive-through facilities -- C C
Banks, savings and loans, thrift and loans, credit unions, including automated teller C P P

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Packet Pg. 446 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

6 Permitted (P) and Conditionally Permitted (C) Uses PR CD CS Specific Use Regulations
machines (no drive-through)
Barber shops/beauty shops – above ground floor P P P
Barber shops/beauty shops – ground floor -- P P
Bars and cocktail lounges C C C HMC 20.20.075
Beer and wine sales (off-premises consumption), ancillary to mini-market retail sales contained within a service station -- -- C HMC 20.20.075 Bicycle sales and repair shops, including rentals -- P P Blueprint and photo reproduction shops -- P P
Boat sales and service -- -- P
Bookstores and newsstands – above ground floor P P P
Bookstores and newsstands – ground floor C P P
Bowling alleys -- -- P
Building material sales -- -- C
Bus depots C C C
Cabinet shops -- -- C
Cannabis Storefront Retailer (Dispensary) -- P P HMC 20.20.095 Cannabis Microbusiness (without cultivation) -- P P HMC 20.20.095 Card and stationers’ stores P P P
Carnivals and circuses, temporary -- -- C
Catering shops (food to go only) -- P P
Christmas tree sales lots, temporary P P P
Clothing and shoe establishments, including clothing sales (new merchandise only), tailor shops, and dressmaking establishments P P P
Computer retail sales -- P --
Consignment sales with incidental sales of used goods and clothing -- P P Contractors’ equipment rental yards & equipment rental yards -- -- C Contractors’ shops with no outdoor storage of heavy equipment -- -- P Delicatessens and gourmet food sales with incidental catering P P C Dental labs -- P P
Department stores -- P P
Dry cleaners and laundries -- P P
Electronic games centers (4 or more games) -- C C

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Packet Pg. 447 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

7 Permitted (P) and Conditionally Permitted (C) Uses PR CD CS Specific Use Regulations
Fabric shops P P P
Farmers markets C C C
Firearm dealers -- -- C HMC 20.20.105
Floor covering and drapery sales -- C P
Florists, including outdoor sales P P P
Food and cold storage lockers -- C P
Food stores over 3,500 square feet in retail sales -- P P Food stores up to 3,500 square feet in retail sales C P P Furniture repair -- P P
Furniture stores, retail P P P
Gift shops P P P
Glass shops (glaziers) -- -- P
Hardware, paint and wallpaper stores, with no firearm sales -- P P Hardware, paint and wallpaper stores with firearm sales -- -- C HMC 20.20.105 Health clubs, gymnasiums and dance studios -- C P
Home electronics and household appliance stores, including television, stereo, radio, telephone, computer and related sales (includes repair and installation services) -- P P Hotels, extended stay hotels and motels C C -- HMC 20.20.090 Ice cream parlors, soda fountains and candy stores P P P Interior furnishing and accessory shops P P P
Jewelry sales and repair, including watch and clock repair P P P Kennels -- -- C
Kitchenware shops P P P
Laboratories -- C P
Laundries – self-service -- P P
Linen supply services -- -- P
Liquor, beer and wine sales – off-premises consumption C C C HMC 20.20.075 Live-work facilities -- P P
Locksmiths -- P P
Machinery sales, service, rental -- -- P
Manufacturing/processing – light; provided, that all of the conditions prescribed by Chapter 20.24 HMC, Article I, are met, and that no motor power other than -- C C

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Packet Pg. 448 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

8 Permitted (P) and Conditionally Permitted (C) Uses PR CD CS Specific Use Regulations
electrically operated motors shall be used. The horsepower of any single motor shall not exceed five horsepower and the total horsepower of all such motors on the site shall not exceed 25 total horsepower. This does not include air conditioning equipment.

Massage establishments – above ground floor P P P
Massage establishments – any floor -- P P
Medical and dental clinics -- -- P
Mortuaries -- C C
Motorcycle sales and service -- C P
Music and dance entertainment clubs -- P C
Musical instrument sales, repair and lessons; and recorded music sales – above ground floor P P P
Musical instrument sales, repair and lessons; and recorded music sales – ground floor C P P
Nightclubs C C C HMC 20.20.075
Nurseries and garden supply stores -- C P
Office equipment sales and service -- P P
Offices – professional, administrative and business, including chiropractor, insurance, real estate and financial offices, but excluding medical and dental offices – any floor
-- P P
Offices – professional, administrative and business, including chiropractor, insurance, real estate and financial offices, but excluding medical and dental offices – above ground floor

P -- --
Offices – psychologist, psychiatrist, counseling and therapy -- P P Optician and optometrist shops -- P P
Outdoor vendors on private property C C --
Parking lots and parking garages C P P
Patio and garden furniture and accessories shops -- P P Pet shops, including pet grooming -- P P
Pharmacies and drugstores C P P
Photography shops, studios and photo supply stores C P P Picture framing shops -- P P
Plumbing supply shops -- C P
Pool and billiards halls -- C P
Pool and spa sales and service -- -- P
Post office and private mail services -- C P

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Packet Pg. 449 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

9 Permitted (P) and Conditionally Permitted (C) Uses PR CD CS Specific Use Regulations
Pottery and woodworking shops -- -- P
Printing, lithography and engraving -- C P
Public information centers – indoor P P P
Public utility installations, including public service pumping stations, power stations and substations, equipment buildings and installations -- C C Radio and television broadcast and recording studios -- C C Radio, television and stereo sales and service -- P P
Recreational equipment rental -- -- P
Recreational vehicle sales, services, repair and storage -- -- P Residential visitor lodging -- C C
Restaurants, cafes and eating establishments, indoor and outdoor eating, including sale of alcoholic beverages as an ancillary use and indoor music with no sound amplification
P P P
• Amplified music C C C
Restaurants, drive-in, walk-up and drive-through -- -- C Retail warehouses over 6,000 square feet of floor area -- -- C Retail warehouses under 6,000 square feet of floor area -- -- P Secondhand stores and pawn shops -- C C
Shoe repair -- P --
Sign painting -- C P
Skating rinks (within building) -- -- P
Spa, day -- P P
• Above ground floor C P --
• Any floor -- P --
Spa, overnight P P --
Sporting goods sales, with rental as an accessory use, with no firearm sales -- P P Sporting goods sales, with rental as an accessory use, with firearm sales -- -- C HMC 20.20.105 Supermarkets (over 3,500 square feet of retail sales area) -- P P Tasting room C C -- HMC 20.20.075
Theaters and auditoriums within buildings C P C
Tire sales, not including tire recapping -- -- P
Tobacco and pipe shops P P P

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Packet Pg. 450 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

10 Permitted (P) and Conditionally Permitted (C) Uses PR CD CS Specific Use Regulations
Toy stores P P --
Travel agencies – above ground floor P P P
Travel agencies – ground floor C P P
Upholstery shops -- C C
Vacation timeshares -- -- --
Variety stores and dry goods -- P P
Vending machine service -- -- P
Veterinarian offices and small animal hospitals -- -- C Recreation, Education and Public Assembly
Churches and other religious institutions -- C C
Private clubs, fraternal lodges and meeting halls C C C Private museums P C --
Accessory Uses
Accessory structures and uses located on the same site as a permitted or conditional use
P P P
-- = not permitted
Section 4. Section 20.08.155 Permitted and conditionally permitted uses in the Mixed Use (MU) District shall be amended to allow commercial cannabis uses as follows (additions underlined, deletions strikethrough):

20.08.155 Permitted and conditionally permitted uses: MU District Table 12 identifies the permitted and conditionally permitted uses for the Mixed Use District. This table is to be used in conjunction with the definitions contained in Chapter 20.28 HMC, Article IX. Refer also to the specific use regulations as noted. Chapter 20.28 HMC, Article V, describes the procedures for obtaining a conditional use permit. Chapter 20.12 HMC, Article IV, describes specific regulations that apply to areas within the Mixed Use District that are also within the North Entry Area Plan Overlay.

Table 12 Permitted (P) and conditionally permitted uses: MU District Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations Residential Uses
Accessory dwelling unit and junior
accessory dwelling unit P
HMC 20.20.010
Employee housing for six or fewer
employees in accordance with Cal.

Health & Safety Code § 17000 et seq.

P

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Packet Pg. 451 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

11 Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations Home occupations P HMC 20.20.005
Residential uses as part of a mixed use
development C
Multifamily dwellings not part of a
mixed use development P
Residential care, general C
Residential care, limited P
Single-family attached dwellings not part
of a mixed use development P
Supportive housing P
Transitional housing P
Vacation rental homes --
Retail Trade
Alcoholic beverages (off-sale) C HMC 20.20.075
Artisan shop P
Cannabis Storefront Retailer
(Dispensary) P
HMC 20.20.095
Cannabis Microbusiness (without
cultivation) P
HMC 20.20.095
Convenience store
• Beer and wine sales (off-sale), ancillary
C
C HMC 20.20.075
Grocery and specialty food sales
• 3,500 square feet or less
• More than 3,500 square feet
P
C
Outdoor display and sales P Ch. 20.16 HMC, Art. V
Retail, general
• Extended hours
• Secondhand goods
P
C
C
Sporting goods sales, with rental as an
accessory use, with firearm sales C
HMC 20.20.105
Services
Bank, financial services P
Business support services P
Catering P
Instructional services C
Medical services, minor C
Personal services P
Recycling, small collection facility C

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Packet Pg. 452 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

12 Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations Specialty transportation rental, touring
services C
Storage – indoor C
Tasting room C HMC 20.20.075
Vehicle services – service station
• Beer and wine sales (off-sale), ancillary
C
C
HMC 20.20.065
HMC 20.20.075
Visitor lodging C
Eating and Drinking Establishments, Entertainment
Bar, nightclub C HMC 20.20.075
Restaurant
• Amplified music audible from outside
the building
• Extended hours
P
C
C
HMC 20.16.080
Food and Beverage Production
Food and beverage production – limited C
Utilities
Public utility facility P
Telecommunication facility – minor P HMC 20.20.080
Telecommunication facility – major C HMC 20.20.080
Accessory Uses
Accessory uses customarily associated
with or essential to a permitted or
conditionally permitted use, and operated
incidental to the principal use
P
Drive-through service C
Section 5. Section 20.08.195 Permitted and conditionally permitted uses in the Industrial (I) District shall be amended to allow commercial cannabis uses as follows (additions underlined, deletions strikethrough):

20.08.195 Permitted and conditionally permitted uses
The following table identifies the permitted and conditionally permitted uses for the Industrial District. This table is to be used in conjunction with the definitions contained in Chapter 20.28 HMC, Article IX. Chapter 20.28 HMC, Article V describes the procedures for obtaining a conditional use permit.

Table 15 Permitted (P) and conditionally permitted (C) uses: I District Residential Uses Specific Use Regulations
Home-based business P
Live/work facilities, including caretaker residence C

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Packet Pg. 453 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

13 Supportive housing
P
Transitional housing
P
Workforce housing
C
Retail Trade
Non-Storefront Commercial Medicinal Retailer (Delivery
Only)
P
HMC 20.20.095
Cannabis Storefront Retailer (Dispensary)
P HMC 20.20.095
Cannabis Microbusiness (without cultivation)
P HMC 20.20.095
Firearm dealers, subject to HMC 20.20.105
C HMC 20.20.105
Retail sales, bulky products • Outdoor display and salesPC Retail, general, of products manufactured, assembled or warehoused on the same premises, incidental to the primary use
P
Vehicle and agricultural equipment sales and related
equipment and supplies sales
C
Wholesaling and distribution
P
Services
Adult entertainment
C
Business support services
P
Catering
P
Commercial recreation
C
Equipment rental • With outdoor storage and displayPC
Equipment storage yard
C
Fitness center
P
Furniture repair, refinishing and re-upholstery
P
Instructional services • Abutting a residential or office use or zoning districtPC Kennel, animal grooming and sales of related equipment and supplies
C
Maintenance/repair service P*
Mortuary
C
Offices, nonmedical
C
Offices, medical, where medical, dental, mental health, surgical and/or other similar health care services are
provided on an outpatient basis, and that accommodate no more than four licensed primary practitioners (such as
medical doctors, dentists, chiropractors, psychologists) withina single office suite ina building specifically
C

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Packet Pg. 454 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

14 designed for office uses. This classification does not include hospitals, clinics, laboratories and dispensing opticians and optometrists.

Recycling facility • Small collection facility • Medium collection facility CC
Restaurant
P
Storage– personal storage facility
P
Vehicle rental
C
Vehicle services • Major maintenance and repair • Minor maintenance and repair • Service station CPP
Vehicle/boat storage
C
Veterinarian, small animal hospital
C
Industrial Uses
Alcoholic beverage manufacturing facility • Amplified music • Entertainment and assembly venue • Tasting roomPCCC Cannabis manufacturing facility (non-volatile/no solvents) P HMC 20.20.095
Cannabis manufacturing facility (volatile solvents) --
Cannabis distributor
P HMC 20.20.095
Cannabis testing laboratory
P HMC 20.20.095
Laboratory– medical, analytical
P
Manufacturing/processing– light
P
Manufacturing/processing– moderate
C
Research and development
P
Warehouse
P
Accessory Facilities and Uses
Accessory uses customarily associated with or essential toa permitted use, and operated incidental to the principal use, including offices
P
Tasting of food and nonalcoholic beverage products
produced on site
P
Public and Quasi-Public Uses
Transit station
P
Mail collection and distribution center
P
Utilities

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Packet Pg. 455 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

15 Public utility facility P
Telecommunication facility – minor P
Telecommunication facility – major C
* If this use (maintenance/repair service) includes firearm sales, a conditional use permit is required subject to the requirements of HMC

20.20.105.

Section 6. CHAPTER 20.20 Standards for Specific Land Uses shall be amended to include a new Section 20.20.095 titled “Commercial cannabis uses and requirements” as follows (additions underlined, deletions strikethrough):

20.20.095 Commercial cannabis uses and requirements
A. Standards for All Commercial Cannabis Uses.

1. Purpose. This section provides the development, operating, and permit standards for all commercial cannabis uses, including both adult (recreational) and medicinal cannabis uses, to ensure neighborhood compatibility, minimize potential environmental impacts, mitigate potential nuisances, and provide safe, legal access to cannabis. Additional standards may apply to particular commercial cannabis uses, as established in other subsections of this section.

2. Applicability. Commercial cannabis uses shall be permitted only in compliance with the requirements of this section, state law and all other applicable requirements for the specific type of commercial cannabis use and those of the underlying base zone. In addition to the requirements of this section, commercial cannabis uses shall comply with all applicable state laws and regulations, including the California Environmental Quality Act (CEQA), and other applicable provisions of the City of Healdsburg’s general plan and municipal code. The terms used in this section are defined in Municipal Code section 20.28.310, except for those terms that are defined specifically in this section. Except for hospitals and research facilities that obtain written permission for cannabis cultivation under federal law, it is unlawful to engage in any commercial cannabis use within the City without first having obtained from the City a valid commercial cannabis permit issued pursuant to the provisions of this section. Possession of other types of state or city permits or licenses does not exempt a person or entity from the requirement of obtaining a commercial cannabis permit under this section. Unless specific distinctions are made in subsequent subsections, these requirements shall apply equally to either adult use or medical cannabis activities.

3. Limitations on Use. A commercial cannabis use shall only be allowed if such use is in compliance with this section and all applicable provisions set forth and/or incorporated in the Healdsburg Municipal Code, including but not limited to building, plumbing, electrical, fire, hazardous materials, and public health and safety codes.

A commercial cannabis use shall comply with all laws and regulations applicable to that type of commercial cannabis use, including all state cannabis laws, and shall comply with all permit, license, approval, inspection, reporting, and operational requirements of other public agencies having jurisdiction over that type of commercial cannabis use. The commercial cannabis use owner or manager shall provide copies of other agency and department permits, licenses, or certificates to the City of Healdsburg to serve as verification of such compliance.

4. Application Procedures and Requirements. The form and content of the commercial cannabis permit application, the procedures for submitting a commercial cannabis permit application, and the procedures for the issuance and/or denial of a commercial cannabis use permit shall be specified by the City Manager or their designee. In addition to any other disclosures, data, forms, recitals, assurances, agreements, or other

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Packet Pg. 456 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

16 information required by federal, state, or local law, applicants for a commercial cannabis permit shall provide the following information when submitting an application for a commercial cannabis permit:
a. Property Owner Consent. Commercial cannabis permits shall only be issued where written permission from the property owner and/or landlord is provided. The applicant shall provide evidence of such consent. The property owner and applicant, if other than the property owner, shall sign the application for the commercial cannabis permit, and shall include affidavits agreeing to abide by and conform to the conditions of the commercial cannabis permit and all provisions of the Healdsburg Municipal Code pertaining to the establishment and operation of the commercial cannabis use, The affidavit(s) shall acknowledge that the approval of the commercial cannabis permit shall, in no way, permit any activity contrary to the Healdsburg Municipal Code, or any activity which violates any applicable laws. b. The name of the proposed commercial cannabis use, including, if applicable, the name on file with the California Secretary of State and any fictitious business names and/or DBAs. If the proposed commercial cannabis use is incorporated, the names, titles, addresses, and contact information of each corporate officer, the name, address, and contact information of the agent for service of process, a certified copy of the articles of incorporation, and a certified copy of the bylaws. If the proposed commercial cannabis use is a partnership, the names, addresses, and contact information for each partner and the agent for service of process.
c. The name, address, and contact information of each owner of the proposed commercial cannabis use.

For purposes of this section, “owner” shall have the same meaning as the word “owner” set forth in California Business and Professions Code Section 26001(am) and California Code of Regulations Title 4, Division 19, Chapter 1, Article 1, Section 15003, which includes, for each applicable commercial cannabis use, any of the following: (1) a person with an aggregate ownership interest of 20 percent or more in the entity applying for a commercial cannabis permit, unless the interest is solely a security, lien, or encumbrance , or (2) an individual who manages, directs, or controls the operations of the commercial cannabis use, including but not limited to: (a) a member of the board of directors of a nonprofit; (b) a general partner of a commercial cannabis use that is organized as a partnership; (c) a non-member manager or managing member of a commercial cannabis use that is organized as a limited liability company; (d) the trustee(s) and all persons who have control of the trust and/or the commercial cannabis use that is held in trust; and (e) the chief executive officer, president or their equivalent, or an officer, director, vice president, general manger or their equivalent. d. For each applicant, owner, and manager, a criminal history (“LiveScan”), to include State and federal level checks, prepared not more than two weeks prior to the date of submitting the commercial cannabis permit application, demonstrating that there are no convictions or pending charges for a felony, a felony or misdemeanor involving moral turpitude, or any crime involving the sale, possession for sale, manufacture, transportation, cultivation, or distribution of a controlled substance within the previous ten years, and that the business owner is not currently on parole or probation for a felony, a felony or misdemeanor involving moral turpitude, or any crime involving the sale, possession for sale, manufacture, transportation, cultivation, or distribution of a controlled substance. For each owner or manager who becomes part of a commercial cannabis use after a commercial cannabis permit is issued, the commercial cannabis use must submit the required criminal history showing the absence within the past ten years of the offenses listed above to the City Manager or their designee within two weeks of the new owner or manager joining the commercial cannabis use. For purposes of this section, “manager” shall mean any person(s) designated by the commercial cannabis use to act as the representative or agent of the commercial cannabis use in managing day-to-day operations with corresponding liabilities and responsibilities, and/or the person in apparent charge of the premises where the commercial cannabis use is located; evidence of management includes, but is not limited to, evidence that the individual has the power to direct, supervise, or hire and dismiss employees, controls hours of operations, creates policy rules, or purchases supplies.

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Packet Pg. 457 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

17 i. A conviction within the meaning of this sections means a plea or verdict of guilty or a conviction following a plea of nolo contendere or no contest. ii. A commercial cannabis use shall notify the Police Chief in writing of any disqualifying conviction described in subsection A(4)(d) for an owner or manager within 10 days of the conviction or of any pending charges for offenses described in subsection A(4)(d) for an owner or manager within 10 days of the filing of such charges by a prosecuting agency. iii. A commercial cannabis use may submit to the Police Chief a written request for a waiver of the prohibition against the convictions specified in subsection A(4)(d) with regard to a particular applicant, owner, or manager on the ground that such person’s involvement with the commercial cannabis use will not pose a threat to public safety. If the Police Chief determines that the requesting party has not submitted a preponderance of evidence to support the conclusion that there is no threat to public safety, the Police Chief shall deny the request, subject to the appeal procedures as set forth in Chapter 2.36. When responding to any request for a waiver under this section, and when determining whether a particular commercial cannabis activity with a particular applicant, owner, or manager will not pose a threat to public safety, the Police Chief will take into consideration: (1) employers are prohibited from using the types of “criminal history” documented in California Code of Regulations Title 2, Division 4.1, Chapter 5, Subchapter 2, Article 2, Section 11017; and (2) the California Department of Cannabis Control will deny a license based on convictions that are substantially related to the qualifications, functions, or duties of the business for which the application is made, including criteria set forth in California Code of Regulations Title 4, Division 19, Chapter 1, Article 3, Sections 15017 and 15035. e. The name and contact information for each manager of a proposed commercial cannabis use. If such information is not available at the time the commercial cannabis permit application is submitted, the commercial cannabis permit applicant shall submit such information to the City Manager as soon as it becomes available.
f. The proposed type of commercial cannabis use.
g. The proposed location of the commercial cannabis use, demonstrating compliance with the zoning and locational restrictions applicable to that commercial cannabis use.

5. Compliance with County Health Regulations and Requirements. Commercial cannabis uses shall be subject to permit requirements and regulations, including inspections, established by the Sonoma County Department of Health Services under the direction of the County Health Officer, or any other individual designated by the County Health Officer to act on their behalf.

6. Development Standards.
a. Building Requirements. All structures used in commercial cannabis uses must comply with applicable building and fire code provisions as determined by the City’s building official and the fire department official, respectively. In addition, the site of the commercial cannabis use and all associated buildings must comply with all applicable sections of the Healdsburg Municipal Code, as determined by the community development director, prior to issuance of a commercial cannabis permit. Commercial cannabis uses that provide access to the public, including but not limited to employees, vendors, contractors, business partners, members, customers, or patients, shall meet local, state and federal requirements for accessibility, including accessible parking, paths of travel, seating, restrooms, and washing facilities. All facilities must be inspected by the City and fire department prior to issuance of a commercial cannabis permit.

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Packet Pg. 458 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

18 b. Emissions Control. All commercial cannabis uses shall utilize appropriate measures in operation and, where applicable, construction, to prevent the emission of dust, smoke, noxious gases, or other substances that have the potential to impact local or regional air quality. c. Hours of Operation. Hours of operation for commercial cannabis uses are established in sections below pertaining to each particular use category.
d. Operating Plan. All commercial cannabis uses shall submit as a part of the commercial cannabis permit application and thereafter maintain an operating plan that specifies the manner in which operations will be handled, and which details the number of employees and hours and days of operation. Any commercial cannabis use approved under this section shall be operated in conformance with the approved operating plan and shall meet any specific, additional operating procedures and measures as may be imposed as conditions of approval to ensure that the operation of the facility is consistent with protection of the health, safety and welfare of the community, customers, qualified patients, and primary caregivers, and will not adversely affect surrounding uses. Any change to the operating plan must be approved in writing by the City Manager or their designee.
e. Odor Control. Devices and techniques shall be incorporated in all commercial cannabis uses to ensure that odors from cannabis are not detectable off site. Commercial cannabis uses shall provide a sufficient odor-absorbing ventilation and exhaust system so that odor generated inside the facility that is distinctive to its operation is not detected outside of the facility, anywhere on adjacent property or public rights-ofway, on or about the exterior or interior common area walkways, hallways, breezeways, foyers, lobby areas, in any other areas available for use by common tenants or the visiting public, or within any other unit located inside the same building as the commercial cannabis use. As such, commercial cannabis uses must install and maintain the following equipment or any other equipment which the building official or designee determines has the same or better effectiveness:
i. An exhaust air filtration system with odor control that prevents internal odors from being emitted externally; or
ii. An air system that creates negative air pressure between the commercial cannabis use’s interior and exterior so that the odors generated inside the commercial cannabis use’s facility are not detectable on the outside of the facility.
f. Air Quality. A commercial cannabis permit applicant shall provide a calculation of the business’s anticipated emissions of air pollutants. The commercial cannabis permit applicant shall also provide assurance that the business will comply with all best management practices established by the Northern Sonoma County Air Pollution Control District (NSCAPCD). No commercial cannabis permit shall be issued to any business that would exceed the thresholds of significance established by the NSCAPCD for evaluating air quality impacts under the California Environmental Quality Act for either operation or construction. After the receiving a commercial cannabis permit from the City, a commercial cannabis use must not exceed the thresholds of significance established by the NSCAPCD for evaluating air quality impacts under the California Environmental Quality Act for either operation or construction. g. Hazardous Materials. To the extent that a commercial cannabis permit applicant intends to use any hazardous materials in its operations, the applicant shall provide a hazardous materials management plan that complies with all federal, state, and local requirements for management of such substances. “Hazardous materials” includes any hazardous substance regulated by any federal, state, or local laws or regulations intended to protect human health or the environment from exposure to such substances. After receiving a commercial cannabis permit for a commercial cannabis use that involves hazardous materials, the commercial cannabis use must comply at all times with its approved hazardous materials management plan.

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19 h. Water Supply. If a proposed commercial cannabis use will occupy an existing building, the applicant shall demonstrate to the satisfaction of the City engineer and building official that water usage will not exceed that of the building’s intended occupancy class without additional review and prior approval by the City Manager or their designee. If a proposed commercial cannabis use will occupy a newly constructed building, the proposed use and construction design shall include all necessary devices and processes to ensure water usage will not exceed an operation typical of the zone in which it is proposed. After receiving a commercial cannabis permit, the commercial cannabis use must ensure that its water usage will not exceed that of the building’s intended occupancy class without additional review and prior approval by the City Manager or their designee.
i. Wastewater. A commercial cannabis permit applicant shall demonstrate to the satisfaction of the City engineer that sufficient wastewater capacity exists for the proposed use. To the extent the proposed commercial cannabis use will result in agricultural or industrial discharges to the City’s wastewater system, the applicant shall provide a plan for meeting all federal, state, and local requirements for such discharges. After receiving a commercial cannabis permit, the commercial cannabis use must ensure that its wastewater discharge does not exceed that of the approved occupancy class without additional review and prior approval by the City Manager or their designee.

7. Permit Requirements. In addition to state permitting requirements and the requirements of this section, including the requirement of a commercial cannabis permit, commercial cannabis uses shall be subject to the cannabis permit requirements as shown in Table 10 of Section 20.08.145, Table 12 of Section 20.08.155, and Table 15 of Section 20.08.195. In addition, all commercial cannabis uses must obtain a zoning clearance and pay applicable fees and taxes. Any violations of the Healdsburg Municipal Code or any other local, state, or federal law pertaining to the structure or property to be used for the commercial cannabis use must be cured prior to issuance of a commercial cannabis permit. The City Manager or their designee may design application forms specific to each permitted category and require inspections of proposed facilities before issuing a permit under this section. Commercial cannabis uses shall also be subject to permit requirements and regulations established by the Healdsburg Municipal Code and any additional requirements established by other subsections of this section, resolutions or ordinances of the City Council or a vote of the citizens of Healdsburg.

A City business license is required for commercial cannabis uses, pursuant to Chapter 5.04. a. Issuance and Term of Permit. Except as provided in subsection (B) of this section pertaining to the approval process for a commercial cannabis permit for cannabis storefront retailers and cannabis microbusinesses, commercial cannabis permits shall be issued to the operator by the City Manager or their designee if the applicant has paid all applicable fees and the commercial cannabis permit application is complete, demonstrates compliance with all applicable federal, state, and local requirements, and includes the information required by this section to the satisfaction of the City Manager, City engineer, building official, or their designee as applicable. Each commercial cannabis permit approved under this section, including commercial cannabis permits for cannabis storefront retailers and cannabis microbusinesses approved under subsection B, shall be valid for a period not to exceed three years from the date of permit approval and shall be subject to permit renewals, in accordance with subsection (A)(8) of this section. No property interest, vested right, or entitlement to receive a future permit to operate a commercial cannabis use shall ever inure to the benefit of a commercial cannabis permit holder. Commercial cannabis permits issued pursuant to this section are not transferable without prior City approval. Commercial cannabis permits may be issued with conditions. The City has no duty or obligation to issue commercial cannabis permits. The City may elect at any time to cease issuing commercial cannabis permits, including upon receiving credible information that the federal government will commence enforcement measures against such businesses and/or local governments that permit them. b. Operator/Permit Holder Qualifications. Owners of commercial cannabis permittees must be twenty-one years of age or older.

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20 c. Priority. When processing permit applications for commercial cannabis uses other than cannabis storefront retailers and cannabis microbusinesses, priority may be given to applications based on a City Council-adopted applicant selection process.
d. Issues of Significant Public Interest. In considering an application under this section for a commercial cannabis permit, the City Manager or their designee’s review shall be limited to compliance with this section and applicable federal, state, or local laws and regulations. The City Manager or their designee may, however, determine that an application does not meet the requirements for a particular license and that the license may remain unissued due to a significant public interest. “Significant public interest” includes, but is not limited to, potential health or safety impacts, potential conflicts with neighboring uses, unique characteristics of the proposed site, unique characteristics of the proposed operations, and/or other factors that, in the City Manager or their designee’s discretion, warrant rejection of application(s). e. Denial of Commercial Cannabis Permit. In addition to any other basis for denying a commercial cannabis permit set forth in this section, the City Manager or their designee may deny a commercial cannabis permit if the application contains any false or misleading statement or information, misrepresentation, or material omission or if the criminal history for any applicant, owner, or manager includes a felony, a felony or misdemeanor involving moral turpitude, or any crime involving the sale, possession for sale, manufacture, transportation, cultivation, or distribution of a controlled substance within the previous ten years.

8. Exercise and Renewal of Permit. Commercial cannabis permits shall be exercised only by the applicant and are not transferable to any other person or entity without prior written City approval. Permits shall expire upon termination of the business for which it was issued, or upon sale or unauthorized transfer of ownership of the cannabis commercial use. Any commercial cannabis permit that is abandoned for a period of six months shall automatically expire and shall become null and void with no further action required on the part of the City. For purposes of this section, “abandonment” shall mean the failure to initiate the activities described in the permit application or cessation of regular and continuous business operations. All commercial cannabis permits, including commercial cannabis permits for cannabis storefront retailers and microbusinesses, have a term of three years and must be renewed prior to expiration. A commercial cannabis use must apply for permit renewal no less than 60 days prior to the expiration of their current permit. Approval of permit renewals may be issued by the City Manager or their designee following demonstration by the operator/permittee of compliance with all requirements in effect. Review shall also include, but not be limited to, analyses of the following:
a. The commercial cannabis use has been conducted in accordance with this section and all applicable permit conditions, and all applicable state and local laws and regulations, and is in good standing with all state and local agencies.
b. Any and all code and/or commercial permit violations or complaints, including complaints related to nuisance activities, have been promptly addressed and cured to the satisfaction of the police chief and City Manager or their designee depending on the violation.
c. The commercial cannabis use for which the permit was approved has not been transferred without authorization to another owner or operator.
d. There are no outstanding violations of applicable laws, including the municipal code and state cannabis laws.
e. The business for which the permit was approved is current on all City taxes and fees due. f. The application for renewal is complete, does not contain any false or misleading statement or information, misrepresentation, or material omission, and the criminal history for any owner or manager does not include a felony, a felony or misdemeanor involving moral turpitude, or any crime involving the

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21 sale, possession for sale, manufacture, transportation, cultivation, or distribution of a controlled substance within the previous ten years.

9. Health and Safety. Commercial cannabis uses shall not create a public nuisance of any kind or adversely affect the health or safety of the nearby residents or businesses by creating dust, light, glare, heat, noise, noxious gases, odor, smoke, traffic, vibration, unsafe conditions or other impacts, or be hazardous due to the use or storage of materials, processes, products, runoff or wastes.

10. Taxes. Commercial cannabis uses shall timely remit payment of all applicable taxes that may be enacted by the voters, including Chapter 3.32, or any additional regulations that may be promulgated in addition to all current applicable state and local taxes.

11. Security. The following security measures shall be adhered to by all commercial cannabis uses. Additional security measures may apply to particular commercial cannabis uses, as established in this section. a. A safety and security plan shall be required prior to permit issuance and shall be subject to review and approval by the City Manager or their designee. All safety and security plans shall be held in a confidential file exempt from disclosure as a public record pursuant to Government Code Section 6255(a).

Such plans shall include, at a minimum, information regarding implementation of the requirements of this section. The City Manager or their designee may require that additional information be included in the plan. Commercial cannabis permittees must adhere to the requirements of the approved safety and security plan at all times the commercial cannabis permit is active. b. Security cameras shall be installed with capability to record activity on the property, including parking lots, entry points to the property, and within all buildings and structures on the property, including all entrances, exits, perimeter windows and all areas where customers and employees may have access, apart from any restroom area. Security cameras shall record 24 hours a day, seven days a week. Additionally:
i. Areas where cannabis is grown, tested, cured, manufactured, or stored shall have camera placement in the room facing the primary entry door at a height which will provide a clear unobstructed view of activity without sight blockage from lighting hoods, fixtures, or other equipment. ii. Cameras shall also be placed at each location where weighing, packaging, transport preparation, processing, or labeling activities occur.
iii. At least one camera must be dedicated to record the access points to the secured surveillance recording area.
iv. At each entrance and exit to the facility, camera coverage must enable recording of customer facial features with sufficient clarity to determine identity. c. Surveillance video shall be kept for a minimum of 90 days in a format that can be easily accessed for viewing. Video must use standard industry format to support criminal investigations. Permit holders shall be required to cooperate with all law enforcement investigations and provide video footage related to any such investigation upon request. Failure to do so could result in revocation of a commercial cannabis permit. Motion-sensor lighting and alarms shall be required and shall be professionally installed and monitored to ensure the safety of persons and to protect the premises from theft. Alarm and surveillance systems shall be equipped with a failure notification system that provides prompt notification to the commercial cannabis use of any prolonged surveillance interruption and/or failure of the system. The commercial cannabis use shall notify the Healdsburg Police Department within twenty-four hours of a failure of the surveillance video system. The commercial cannabis use shall restore the surveillance video system within a time period as determined by the Police Chief or their designee. All surveillance equipment, records, and recordings must be stored in a secured area that is only accessible to management

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22 staff. Permittees must keep a current list of all authorized employees who have access to the surveillance system and/or alarm system.
d. A permittee 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 alarm installation company, and the name of any monitoring company. Off-site monitoring and video recording storage of the premises by the licensee or an independent third party is authorized if standards exercised at the remote location meet or exceed all standards for on-site monitoring. e. All security measures installed on site shall have the capability to remain fully operational during a sustained power outage.
f. With the exceptions of weapons and firearms possessed by on-duty law enforcement officers, weapons and firearms are prohibited on the property of a commercial cannabis use. g. Security measures shall be designed to ensure emergency access in compliance with fire safety standards.
h. All structures used for commercial cannabis uses shall have locking doors, with commercial-grade nonresidential locks, to prevent free access.
i. Security measures shall prevent individuals from remaining on the premises of the commercial cannabis use if they are not engaging in activities expressly related to the operations of the business. j. Security measures shall include a transportation plan that details the procedures established for the safe and secure transport of cannabis, cannabis products, and currency to and from the business, including the transfer of currency for City tax payments.
k. Except for live growing cannabis plants and products on display for sale at retail dispensaries during hours when the business is open to the public, all cannabis and cannabis products shall be stored in a secured and locked room, safe, or vault that meets approval of the Healdsburg police department. To the fullest extent possible, all cannabis and cannabis products shall be kept in a manner that prevents theft and loss, except for limited amounts used for the purposes of display or immediate sales. l. Duress alarm buttons shall be installed in all commercial cannabis use facilities with easy access by employees and all employees shall be properly trained in their use. m. Any security bars installed on the windows or the doors of the commercial cannabis use shall be installed only on the interior of the building.
n. Security personnel hired by the commercial cannabis use shall be subject to prior review and approval of the chief of police or their designee.
o. Each commercial cannabis use shall identify a liaison and provide the liaison’s contact information to the Healdsburg Police Department. The designated liaison shall be reasonably available to meet with the chief of police or their designee regarding security measures and operational issues.

12. Employees.
a. All employees of a commercial cannabis use must be twenty-one years of age or older. b. Each commercial cannabis use shall maintain on site a current register of all the employees currently employed by the commercial cannabis use and shall produce such register to the chief of police, designee,

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23 or any other City official authorized to enforce the Healdsburg Municipal Code for purposes of determining compliance with this section.

13. Weights and Measures. All scales used for commercial transactions shall be registered for commercial use and sealed by the Department of Agriculture/Weights and Measures.

14. Tracking. Commercial cannabis uses and permittees shall comply with any track and trace program established by the City or by County or State agencies. Commercial cannabis uses must maintain records tracking all cannabis production and products and shall make all records related to the commercial cannabis use available to the City upon request. The City Manager or their designee may require commercial cannabis uses to comply with a County track and trace system if appropriate.

15. Police Notification. Commercial cannabis uses shall notify the Healdsburg Police Department within twenty-four hours of discovering any of the following:
a. Significant discrepancies identified during inventory. The level of significance shall be two percent of inventory or per state regulations, whichever is stricter. b. Diversion, theft, or loss, or any criminal activity involving the commercial cannabis use or any agent or employee of the commercial cannabis use.
c. Any other breach of security.

16. Inspections. Commercial cannabis uses shall be subject to inspections by appropriate local and state agencies, including but not limited to the Departments of Health Services, Agriculture/Weights and Measures, and the City of Healdsburg. Commercial cannabis uses shall be inspected at random times for conformance with the Healdsburg Municipal Code and permit requirements. Unless otherwise allowed under the law, the inspection shall be conducted during regular business hours. If interference in the performance of the duty of the agency having jurisdiction occurs, the agency may request that the City temporarily suspend the permit and order the cannabis operation to immediately cease operations.

17. Restriction on Alcohol Sales. No alcoholic beverages may be sold, dispensed, or consumed on or about the premises of any commercial cannabis use. This section shall not apply to responsible after-hours consumption by employees which does not violate any state or local law or regulation. After-hours consumption, however, is not permitted at any cannabis retail dispensary or microbusiness.

18. Appeal of Decision on Commercial Cannabis Permit. Within 10 days of a decision by the City Manager or their designee to approve or disapprove a commercial cannabis permit application for a commercial cannabis use other than a cannabis storefront retailer or cannabis microbusiness, or a decision by the City Manager or their designee to approve or deny a commercial cannabis permit renewal application, an applicant or interested party may appeal the approval or disapproval by following the procedures for appeals set forth in Chapter 2.36 of the Healdsburg Municipal Code. The appeal hearing shall be set and conducted in accordance with Chapter

2.36. 19. Liability and Indemnification. To the fullest extent permitted by law, any actions taken by a public officer or employee under the provisions of this section shall not become a personal liability of any public officer or employee of the City. To the maximum extent permitted by law, the permittees under this section shall defend (with counsel acceptable to the City), indemnify and hold harmless the City of Healdsburg, the Healdsburg City Council, and its respective officials, officers, employees, representatives, agents and volunteers (hereafter collectively called “City”) from any liability, damages, actions, claims, demands, litigation, loss (direct or indirect), causes of action, proceedings, or judgments (including legal costs, attorneys’ fees, expert witness or consultant fees, City attorney or staff time, expenses or costs) (collectively called “action”) against the City to attack, set aside, void or annul any cannabis related approvals and actions, and strictly comply with the

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24 conditions under which such permit is granted, if any. The City may elect, in its sole discretion, to participate in the defense of said action and the commercial cannabis permittee shall reimburse the City for its reasonable legal costs and attorneys’ fees. Permittees under this section shall be required to agree to the above obligations in writing.

B. Standards for Cannabis Storefront Retailers and Cannabis Microbusinesses.

1. Purpose. This subsection provides the locational, operational, and permit standards for any commercial cannabis storefront retailers and cannabis microbusinesses within the City in order to promote the health, safety, and general welfare of its residents and businesses. The standards in this subsection shall be in addition to standards contained in subsection A of this section (Standards for All Commercial Cannabis Uses) for all commercial cannabis uses.

2. Applicability. Commercial cannabis storefront retailers and cannabis microbusinesses with retail activity (collectively, a “retail dispensary,” “retail dispensaries,” “cannabis retail dispensary,” or “cannabis retail dispensaries”) shall be permitted only in compliance with the requirements of this subsection B, all other applicable requirements of subsection A of this section (Standards for All Commercial Cannabis Uses), and all other applicable requirements of the Healdsburg Municipal Code, including Chapter 3.32 (Cannabis Business Tax), and state and county agencies. The regulations and requirements of this subsection B do not apply to nonstorefront cannabis retailers that only engage in the retail sale by delivery of medicinal cannabis to qualified patients and primary caregivers, which are addressed under subsection D of this section (Non-Storefront Commercial Medicinal Cannabis Retail Sales).

3. Permit Requirements and Application Procedure. A commercial cannabis permit, issued in addition to any applicable permit issued by the Sonoma County Department of Health Services, shall be required to operate a cannabis retail dispensary within the City of Healdsburg. Cannabis retail dispensaries shall also be subject to permit requirements and regulations established by the state and those established by the City Council through resolution or ordinance, or by a vote of the citizens of Healdsburg. Commercial cannabis permits for retail dispensaries shall be considered and issued according to the following procedure:
a. The City Council, following an open application period and review of applications by City staff and recommendations by the City Manager or designee, shall consider commercial cannabis permit applications for retail dispensaries meeting all minimum qualifications at a properly noticed public hearing and, in its sole discretion, may approve the issuance of commercial cannabis permits for retail dispensaries.
b. The City Manager or their designee may adopt such forms, fees, and procedures as are necessary to implement this subsection with respect to the selection, investigation process, renewal, revocation, and suspension of commercial cannabis permits for retail dispensaries. Such procedures may include a priority ranking system, and appointment of a staff review panel for retail dispensary permits. c. Each approved commercial cannabis permit for a retail dispensary shall be valid for a period not to exceed three years from the date of permit issuance and shall be subject to permit renewals in accordance with subsection (A)(8) of this section.

4. Limit on Number of Retail Dispensaries. No more than two retail dispensaries shall be permitted within the City at any one time. All facilities authorized under this subsection must maintain a storefront which is open to the public. This limit is inclusive of cannabis microbusinesses with a Type 12 state license operating a retail dispensary.

5. Specific to Cannabis Microbusinesses. Any commercial cannabis permit issued to a microbusiness with a Type 12 state license, or a state cannabis license type subsequently established, that contains a retail operation, will be subject to all commercial cannabis permit procedures and requirements for cannabis retail dispensaries

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25 under this section. Any commercial cannabis permit issued to a Type 12 microbusiness with a manufacturing component will also be subject to the applicable requirements of subsection C of this section (Standards for Manufacturing, Testing, Storage, and Distribution of Commercial Cannabis), Cultivation shall not be an allowed component of a Type 12 microbusiness license.

6. Location Requirements. Unless otherwise allowed under state law and as modified by this subsection:
a. A retail dispensary which is open to the public may only be located within the allowed zoning district(s) under Table 10 of Section 20.08.145, Table 12 of Section 20.08.155, and Table 15 of Section 20.08.195. b. A retail dispensary shall not be established on any parcel containing a dwelling unit, or immediately abutting (sharing a common property line with) a residential zoning district. Residentially zoned does not include mixed-use zoning for purposes of this section.
c. A retail dispensary shall not be established within five hundred feet from any youth-oriented property. d. A retail dispensary shall not be established within two hundred and fifty feet of any public park (with the exception of West Plaza Park and 3 North Street), public playground, or public library. e. The distances listed above shall be measured between the nearest entrance (ingress/egress to commercial cannabis establishment, e.g., front door/public entry or service door) of the retail dispensary and the nearest property line of the parcel(s) on which the youth-oriented property, public park, public playground, or public library is located, along the shortest route intended and available for public passage (any public road, street, or highway, including footpaths and bicycle paths, or other route provided for the passage of people).

7. Operating Standards. In addition to standards contained in subsection A of this section (Standards for All Commercial Cannabis Uses), the following are the minimum development criteria and operational standards applicable to any cannabis retail dispensary:
a. The building in which the retail dispensary is located shall comply with all applicable local, state and federal rules, regulations, and laws including, but not limited to, building codes and accessibility requirements.
b. The retail dispensary shall provide adequate security on the premises pursuant to subsection (A)(11) of this section, and any additional requirements in this section, including lighting and alarms, to ensure the safety of persons and to protect the premises from theft. The applicant shall submit a safety and security plan for review and approval by the Healdsburg police department. The safety and security plan will remain confidential.
c. The site plan, circulation, parking, lighting, facility exterior, and any signage shall be subject to all underlying zoning requirements, director review, and approval. The community development director may waive this requirement where the applicant can demonstrate that existing facilities, including parking, lighting, and landscaping, already meet the requirements of this section. d. No exterior signage or symbols shall be displayed which advertise the availability of cannabis using drug-related symbols which are attractive to minors or which are carried out in a manner intended to encourage persons under twenty-one years of age to consume cannabis or cannabis products, nor shall any such signage or symbols be displayed on the interior of the facility in such a way as to be visible from the exterior.
e. No person shall be allowed onto the premises of a retail dispensary unless they are an employee, customer, vendor or contractor of the retail dispensary, primary caregiver, qualified patient, or employee

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26 of an agency having jurisdiction to monitor or investigate the terms of regulatory compliance by the retail dispensary. If the retailer dispensary denies entry for monitoring and inspection to any employee of an agency having such jurisdiction, the facility may be closed and the commercial cannabis permit may be revoked, modified, or suspended. In strict accordance with California Health and Safety Code Section 11362.5 et seq., no person under the age of eighteen shall be allowed on a medical cannabis retail site unless allowed under state law, and no person under the age of twenty-one shall be allowed on a nonmedical cannabis retail site pursuant to California Business and Professions Code Section 26140. All persons entering the site, except those representing a regulatory agency, shall present a photo identification. A doctor’s recommendation shall not be required for customers of a nonmedical cannabis retail dispensary. The operating plan submitted as a part of the commercial cannabis permit application shall specify how this provision will be complied with and enforced. f. No retail dispensary shall hold or maintain a license from the State Department of Alcoholic Beverage Control to sell alcoholic beverages or operate a business that sells alcoholic beverages. No alcoholic beverages shall be allowed or consumed on the premises of a retail dispensary. g. No cannabis retail dispensary shall conduct or engage in the commercial sale of any product, good or service unless otherwise approved by the commercial cannabis permit. A retail dispensary may sell live starter (immature) plants, clones, and seeds from qualified nurseries, but shall not cultivate or clone cannabis. A retail dispensary may sell manufactured cannabis, including edible products, and vaporizing devices if allowed by a permit issued by the Department of Health Services. Not more than five percent of the retail dispensary area, up to a maximum of two hundred square feet, may be devoted to the sale of incidental goods for personal cannabis cultivation and use or promotional items such as clothing, hats, or posters.
h. No cannabis shall be consumed on the premises of a retail dispensary. For purposes of complying with this requirement, the term “premises” includes the physical building and leasehold space, as well as any accessory structures, parking areas, sidewalks, driveways, or other immediate surroundings. i. No retail dispensary may increase in size without amending its commercial cannabis permit, as applicable. The size limitation shall be included in the operational plan required by subsection (A)(6)(d) of this section.
j. A retail dispensary shall not have a physician on site to evaluate patients for medical cannabis. k. Parking required by Chapter 20.16 HMC, Article VIII, shall be provided on site. l. Retail dispensaries’ operating hours shall be limited to Monday through Sunday, nine a.m. to nine p.m. m. If the permittee holds a Type 12 microbusiness license, manufacturing hours shall be established and approved through the commercial cannabis permit process. Retail hours for a Type 12 microbusiness shall be limited to Monday through Sunday, nine a.m. to nine p.m. n. Delivery. Delivery of cannabis is allowed by retail dispensaries. Delivery functions must be included in the commercial cannabis permit application and approved as a discrete function. Delivery functions shall be in conformance with state cannabis laws and all of the following:
i. Deliveries can only be conducted between the hours of nine a.m. to nine p.m. ii. Deliveries shall be made by an employee of the licensed retail dispensary and said employee shall carry with him/her at all times a physical copy of the city commercial cannabis permit and business license and state cannabis license.

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27 o. Record Keeping. A retail dispensary shall maintain records in accordance with the state and local requirements of its license type. The retail dispensary shall keep accurate records, follow accepted cash handling practices, and maintain a general ledger of cash transactions. The retail dispensary shall allow the City to access the books, records, accounts, and all data relevant to its operations for purposes of conducting an audit or examination to determine compliance with the municipal code, administrative regulations, conditions of approval, and applicable laws. Books, records, accounts, and all relevant data shall be produced no later than twenty-four hours after receipt of the City’s request. p. Required Signage. The following signs, in measurements of not less than eight by ten inches, shall be clearly and legibly posted in a conspicuous location inside the retail dispensary where they will be visible to customers in the normal course of a transaction, stating:
i. “The dispensing of cannabis without a state license is illegal.” ii. “Use or consumption of cannabis on this premises or property is prohibited.” iii. For retail dispensaries: “All visitors to this premises must be at least 21 years of age, or, at least 18 years of age and able to show a government issued medical cannabis ID card in accordance with California Health and Safety Code Section 11362.7 et seq.” C. Standards for Manufacturing, Testing, Storage, and Distribution of Commercial Cannabis.

1. Permits for commercial manufacturing, testing, storage, and distribution of cannabis shall be issued by the City Manager or their designee according to the requirements of subsection (A)(7) of this section and this subsection (C) and may include conditions of approval.

2. Additional Operating Standards. In addition to the requirements of subsection (A) of this section, any base zone requirements, and all state cannabis laws and regulations, commercial cannabis uses permitted under this subsection shall also comply with the following operational standards:
a. Facilities shall not be open to the general public.
b. Extraction Processes. Cannabis manufacturers shall utilize only extraction processes that are (i) solvent free or that employ only nonflammable, nontoxic solvents that are recognized as safe pursuant to the federal Food, Drug and Cosmetic Act, and/or (ii) use solvents exclusively within a closed loop system that meets the requirements of the federal Food, Drug and Cosmetic Act, including use of authorized solvents only, the prevention of off-gassing, and certification by a California licensed engineer. c. No closed loop systems shall be utilized without prior inspection and approval of the City’s building and fire code officials.
d. Standard of Equipment. Extraction equipment used by the manufacturer must be listed or otherwise certified by an approved third-party testing agency or licensed professional engineer and approved for the intended use by the City’s building and fire code officials. e. Annual Recertification Required. Extraction equipment used by the manufacturer must be recertified annually and a report by a licensed professional engineer on the inspection shall be maintained on site. f. Food Handler Certification. All owners, employees, volunteers, or other individuals who participate in the production of edible cannabis products must be state certified food handlers. The valid certificate number of each such owner, employee, volunteer, or other individual must be on record at the manufacturer’s facility where that individual participates in the production of edible cannabis products.

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28 g. Edible Product Manufacturing. Commercial cannabis uses that sell or manufacture edible medicinal cannabis products shall obtain a Sonoma County health permit. Permit holders shall comply with Health and Safety Code Section 13700 et seq. and Sonoma County health permit requirements. These requirements provide a system of prevention and overlapping safeguards designed to minimize foodborne illness, ensure employee health, demonstrate industry manager knowledge, ensure safe food preparation practices, and delineate acceptable levels of sanitation for preparation of edible products. h. Operating hours shall be subject to permit.

3. Permit Requirements and Restrictions. The following limits on permits for commercial cannabis uses engaging in manufacturing, testing, storage, and distribution of commercial cannabis apply:
a. Permits may be issued among the allowable types identified in Table 15 of Section 20.08.195.

Permittees who obtain state licenses for both adult (recreational) and medical uses for the same premises shall require one commercial cannabis permit from the City. b. No facility permitted under this subsection shall be located on any parcel containing a dwelling unit, nor within 500 feet of any youth-oriented property, or immediately abutting (sharing a common property line with) a residential zoning district.
c. The distances listed above shall be measured between the nearest entrance (ingress/egress to commercial cannabis establishment, e.g., front door/public entry or service door) of the commercial cannabis use and the nearest property line of the parcel(s) on which the youth-oriented property is located, along the shortest route intended and available for public passage (any public road, street, or highway, including footpaths and bicycle paths, or other route provided for the passage of people).

4. Manufacturing shall be subject to any additional permitting and inspection requirements of the Sonoma County health official, per subsection (A)(5) of this section.

D. Standards for Non-Storefront Commercial Medicinal Cannabis Retailers.

1. Purpose. This subsection provides the locational, operational, and permit standards for any non-storefront commercial medicinal cannabis retailer within the City in order to promote the health, safety, and general welfare of its residents and businesses.

2. Permits for non-storefront commercial medicinal cannabis retailers shall be issued by the City Manager or their designee according to the requirements of subsection (A)(7) of this section. A non-storefront commercial medicinal cannabis retailer that engages only in the retail sale by delivery of medicinal cannabis to qualified patients and primary caregivers shall comply with the following requirements and regulations:
a. The deliveries must be conducted in accordance with any relevant state cannabis laws, this municipal code, any applicable local laws in the delivery location, and any conditions imposed upon the permittee. b. The non-storefront commercial medicinal cannabis retailer must keep in place standard operating procedures that ensure the safety and security of those individuals engaging in delivery and the security of all cannabis being delivered, including procedures to prevent diversion. c. Upon arrival at the delivery address and prior to transferring any cannabis or cannabis products, the delivery person must verify and confirm that the identity of the recipient is the same as the person who requested the delivery and that the person is either a qualified patient or primary caregiver.

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29 d. A non-storefront commercial medicinal cannabis retailer shall report to the City and local law enforcement any vehicle accidents, diversions, losses, or other reportable incidents such as thefts or suspicious activity, that occur during transportation and delivery, within 24 hours. e. The delivery person shall keep a delivery manifest that includes the following information:
i. All cannabis that will be transported, accurately inventoried; ii. Departure date and approximate time of departure;
iii. Arrival date and approximate time of arrival;
iv. Name, address, and local license number of the originating non-storefront commercial cannabis medicinal retailer;
v. Name and address of the individual requesting the delivery; vi. Delivery vehicle make, model, and license plate number; and vii. Name and signature of the individual transporting the cannabis. f. A non-storefront commercial medicinal cannabis retailer must at all times maintain any and all state licenses required by state cannabis laws.

3. Permit Requirements and Restrictions. The following limits on permits for a non-storefront commercial medicinal cannabis retailer apply:
a. Permits may be issued among the allowable types identified in Table 15 of Section 20.08.195. b. No facility permitted under this subsection shall be located on any parcel containing a dwelling unit, nor within 500 feet of any youth-oriented property, or immediately abutting (sharing a common property line with) a residential zoning district.
c. The distances listed above shall be measured between the nearest entrance (ingress/egress to commercial cannabis establishment, e.g., front door/public entry or service door) of the commercial cannabis use and the nearest property line of the parcel(s) on which the youth-oriented property is located, along the shortest route intended and available for public passage (any public road, street, or highway, including footpaths and bicycle paths, or other route provided for the passage of people).

E. Enforcement.

1. Public Nuisance. The violation of this section, any regulation promulgated under this section, and the condition of any permit issued under this section is hereby declared to be a public nuisance and may be abated pursuant to the provisions of Chapter 1.12 HMC.

2. The provisions of this section, any regulation promulgated under this section, and the condition of any permit issued under this section may be enforced by the City by any means provided for in Chapter 1.12 of this Code in addition to any and all other remedies, civil, equitable or criminal, afforded to the City under the law. Violations of this section, any regulation promulgated under this section, and the condition of any permit issued under this section

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Packet Pg. 470 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

30 are punishable as misdemeanors. Each day of engaging in any of the prohibited activities shall constitute a separate offense.

3. In addition to any other remedies available to the City under the law, the City may revoke, modify, or suspend any commercial cannabis permit, following notice and opportunity for a hearing, based on any one of, or combination of, the conditions set forth below:
a. A permittee ceases to meet any of the minimum qualifications listed in this section or has failed to comply with the requirements of this section or any conditions of approval of the permit. b. A permittee’s state license for the commercial cannabis use is revoked, terminated, suspended, or not renewed. In the case of a suspension, the City shall not reinstate the commercial cannabis permit until documentation is received showing that the state license is eligible to be reinstated or reissued. It shall be within the City’s discretion whether to reinstate any permit. c. The commercial cannabis use has not been in regular and continuous operation for six consecutive months.
d. State law permitting the commercial cannabis use for which the permit was issued is amended or repealed resulting in the prohibition of such use, or the City receives credible information that the federal government will commence enforcement measures against such businesses and/or local governments that permit them.
e. Circumstances under which the permit was granted have changed and the public health, safety, and welfare require the suspension, revocation, or modification. f. The permit was granted or renewed, in whole or in part, on the basis of a misrepresentation or material omission in the permit or renewal application, or the permittee made a misrepresentation or material omission in any submittal required after the issuance of the commercial cannabis permit. g. The permittee is not current on City taxes or fees.
h. The permittee has violated the Municipal Code, this section, any regulation promulgated under this section, and/or any condition of a commercial cannabis permit issued under this section, and/or has otherwise created a public nuisance pursuant to Civil Code sections 3479 and 3480.

4. The following procedures apply to the revocation, modification, or suspension of a commercial cannabis permit:
a. If, as the result of an investigation, the City determines that one or more of the conditions contained in subsection (E)(3) of this section applies to a commercial cannabis permit granted in accordance with the provisions of this section, the City Manager shall schedule a public hearing before the City Council to consider the revocation, modification, or suspension of the commercial cannabis permit. b. Written notice of the date, time, place and purpose of such public hearing shall be served to the following parties, as applicable:
i. The owner of the property for which the commercial cannabis permit was granted; ii. The person or entity to which the commercial cannabis permit was issued, as reflected on the permit and permit application; and
iii. Any person or entity who has been identified as an owner of the commercial cannabis use that is subject to the proposed commercial cannabis permit revocation, modification, or suspension.

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Packet Pg. 471 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

31 c. Such notice shall be provided by registered mail, postage prepaid, return receipt requested, not less than 10 days prior to the date of such hearing. Notice may also be posted at the entrance to the commercial cannabis use that is subject to the proposed commercial cannabis permit revocation, modification, or suspension.
d. At the public hearing, each party shall have the right to call and examine witnesses and introduce exhibits. The hearing need not be conducted according to technical rules relating to evidence and witnesses.

The City Council has the right to ask questions and the discretion to exclude evidence if its tendency to prove or disprove an issue is substantially outweighed by the likelihood that its admission will not assist in proving or clarifying a material issue or consume an undue amount of time. Evidence offered during the hearing must be credible and relevant in the estimation of the City Council, but formal rules governing the presentation and consideration of evidence shall not apply. Evidence presented by staff or other officials of the City tending to support an administrative decision shall constitute prima facie evidence that the decision was justified. The burden of proof shall then be on the aggrieved party or other affected person challenging the decision to refute such evidence. The standard to be applied for meeting this burden shall be a preponderance of evidence.
e. Following a public hearing, the City Council may revoke, modify, or suspend the commercial cannabis permit after finding one or more of the conditions set forth in subsection (E)(3) of this section.

5. The election of any particular enforcement remedy shall in no way act as a waiver of the pursuit of any other available enforcement remedy. The City may pursue any enforcement remedy, or combination of enforcement remedies, permitted by law to achieve compliance with this section, any regulation promulgated under this section, and the condition of any permit issued under this section.

Section 7. Section 20.20.100 Marijuana cultivation, possession and use shall be amended as follows (additions underlined, deletions strikethrough):

20.20.100 Marijuana Cannabis cultivation, possession and use The provisions of this section are established to permit medical and nonmedical marijuana cannabis use and cultivation by individuals meeting the specific requirements of qualified caregiver, patient, or adult individual over 21 years of age, for purposes of medical and nonmedical use of marijuana cannabis in compliance with state law; to establish reasonable limits on the cultivation, distribution, sale and use, possession and growth of marijuana for medical and nonmedical purposes within the City of Healdsburg; to protect children, residents and visitors and the environment from potential dangers; and to prohibit marijuana commercial cannabis cultivation businesses within the City including the cultivation, processing, manufacture, establishment of distribution facilities, testing, and sale of marijuana, including marijuana products and marijuana accessories, for commercial or other purposes within the City other than for the purpose of providing for use of marijuana cannabis for medical purposes by a qualified caregiver or patient, or adult nonmedical user, as defined by state law and subject to the provisions established herein.

A. Definitions. As used herein, the following definitions shall apply:

City. The City of Healdsburg.

Cultivation. The planting, growing, harvesting, drying, curing, grading, or trimming of marijuana cannabis plants or any part thereof.

Fully enclosed and secure structure. A space within a dwelling unit that complies with the California Building Code, as adopted in the City (“CBC”); or, if exempt from the permit requirements of the CBC, an accessory structure, on a lot or site containing a dwelling unit, having a complete roof and enclosure supported by connecting

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Packet Pg. 472 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

32 walls extending from the ground to the roof, a foundation, slab or equivalent base to which the floor is secured by bolts or similar attachments, is secure against unauthorized entry, and is accessible only through one or more lockable doors. In order to qualify as a fully enclosed and secure structure, the walls and roofs must be constructed of solid materials that cannot be easily broken through, such as two-inch by four-inch or thicker studs overlaid with three-eighths-inch or thicker plywood or the equivalent. Plastic sheeting, regardless of gauge, or similar products, are not considered solid materials.

Indoors. Within a private residence or a fully enclosed and secure structure on the grounds of a private residence.

Marijuana. All parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin.

Marijuana accessories. Any equipment, products or materials of any kind which are used, intended for use, or designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, smoking, vaporizing, or containing marijuana, or for ingesting, inhaling, or otherwise introducing marijuana or marijuana products into the human body.

Marijuana microbusiness. Any business that includes the cultivation of marijuana on an area less than 10,000 square feet which also acts as a distributor, manufacturer, and/or retailer of marijuana, marijuana products, or marijuana accessories.

Cannabis Marijuana nursery. A facility that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis marijuana.

Marijuana products. Marijuana that has undergone a process whereby the plant has been transformed into a concentrate, including but not limited to concentrated cannabis, or an edible or topical product containing marijuana or concentrated cannabis and other ingredients.

Medical cannabis marijuana cultivation. Cultivation of cannabis marijuana by a qualified patient or primary caregiver cultivated outdoors in conformance with this section.

Mixed-light. The cultivation of cannabis marijuana using a combination of natural and supplemental artificial lighting.

Nonmedical cannabis marijuana. Cannabis Marijuana that is intended to be used for nonmedical and/or recreational purposes pursuant to California Health and Safety Code Section 11362.1 et seq., as those sections may be amended from time to time.

Nonmedical cannabis marijuana cultivation. Cultivation of cannabis marijuana that is intended to be used for nonmedical and/or recreational purposes pursuant to California Health and Safety Code Section 11362.1 et seq., as those sections may be amended from time to time.

Outdoor. Any location within the City, on private grounds, that is exposed to the open air not within an enclosed and secure residential structure or private residence.

Primary caregiver. A “primary caregiver” as defined in Health and Safety Code Section 11362.7, as amended.

Private residence. A house, an apartment unit, a mobile home, or other similar dwelling unit.

Property. A parcel of land upon which is built or placed a private residence.

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Packet Pg. 473 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

33 Qualified patient. A “qualified patient” or a “person with an identification card” as defined in Health and Safety Code Section 11362.7, as amended.

Solid fence. A fence constructed of substantial material, such as wood or metal, that prevents viewing the contents from one side to the other side of the fence.

B. Cultivation, Possession and Use of Cannabis Marijuana.

1. Outdoor Cultivation. Cultivation of cannabis marijuana is prohibited in all zoning districts of the City, except when such cultivation occurs on property with a private residence and in accordance with the following reasonable regulations:
a. Nonmedical Outdoor Cultivation Prohibited. It is hereby declared to be unlawful and a public nuisance for any person owning, leasing, occupying, or having charge or possession of any lot or site within any zoning district in the City of Healdsburg to cause or allow such lot or site to be used for the outdoor cultivation of cannabis marijuana plants for nonmedical (recreational) use. b. Medical Outdoor Cultivation Restricted. It is hereby declared to be unlawful and a public nuisance for any person owning, leasing, occupying, or having charge or possession of any property including any lot or site, building, shed, or accessory structure within any zoning district in the City of Healdsburg to cause or allow such lot or site property to be used for the outdoor cultivation of more than three cannabis marijuana plants by a primary caregiver or a qualified patient as defined in Health and Safety Code Section 11362.7, as amended.

2. Indoor Cultivation. Indoor cultivation of cannabis marijuana is prohibited in all zoning districts of the City, except when such cultivation occurs on property with a private residence and in accordance with the following reasonable regulations:
a. It is hereby declared to be unlawful and a public nuisance for any person owning, leasing, occupying, or having charge or possession of any dwelling unit within any zoning district in the City of Healdsburg to cause or allow for the indoor cultivation of more than six cannabis marijuana plants. b. The limit of six plants per residence for nonmedical cannabis marijuana cultivation shall apply regardless of how many adult individuals reside at the private residence. c. Indoor cultivation may only occur within a private residence or fully enclosed and secure private residential structure. Attached and detached garages designed and intended primarily for the use of vehicle parking are not considered private residences or fully enclosed and secure structures and may not be used for the cultivation of cannabis marijuana. Indoor cultivation may only occur in a locked space that is not visible by normal unaided vision from a public place.

3. Restriction on Location of Cultivation. No cannabis marijuana cultivation or storage of cannabis marijuana products or preparation of cannabis marijuana products, whether indoor, outdoor, or through use of “mixed-light,” is permitted within any nonresidential structure, or within 300 feet of any hospital, school, church, park or playground, child care center, recreation center or youth center. The distance between any cannabis marijuana cultivation and any hospital, school, church, park or playground, child care center, recreation center or youth center shall be measured in a straight line, without regard to intervening structures, from (a) with regard to outdoor cultivation, the closest property line of the lot or site on which the outdoor cultivation is occurring and (b) with regard to indoor cultivation, the closest exterior wall of the fully enclosed and secure structure in which the indoor cultivation is occurring, to the closest property line of the lot or site containing the hospital, school, church, park or playground, child care center, recreation center or youth center.

This restriction does not apply to indoor cultivation within a private residence that complies with the terms and restrictions on indoor cultivation as set forth in this section.

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Packet Pg. 474 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

34 4. Restriction on Possession or Use.
a. It shall be unlawful for any individuals under 21 years of age to possess, process, transport, purchase, obtain or give away cannabis marijuana or cannabis marijuana products. b. Individuals 21 years of age or older may possess, process, transport, purchase, obtain or give away

28.5 grams (approximately one ounce) or less of nonconcentrated cannabis marijuana and eight grams or less of concentrated cannabis marijuana, subject to compliance with all provisions of this section and all provisions of state law, as may be amended.
c. Smoking or ingesting of marijuana shall not be permitted within any public place within the City of Healdsburg, or within 1,000 feet of a school or in any location where tobacco is prohibited. d. Medical marijuana dispensaries are prohibited pursuant to HMC 8.32.040. de. It shall be unlawful for any individuals to possess, process, purchase, obtain, store, and/or prepare cannabis marijuana or cannabis marijuana products intended for smoking or consumption within the City except in strict compliance with the provisions of this section.

C. Standards for Indoor and Outdoor Cultivation of Cannabis Marijuana.

1. An adult user, qualified patient or primary caregiver shall reside in the dwelling unit on the lot or site upon which cannabis marijuana is being cultivated and such dwelling unit must be the adult user’s, qualified patient’s or primary caregiver’s primary place of residence. No person other than an individual over 21 years of age may engage in the cultivation of nonmedical cannabis marijuana.

2. If the cultivation occurs in a dwelling unit, the dwelling unit shall retain at all times legal and functioning cooking, sleeping and sanitation facilities with proper egress.

3. Cannabis Marijuana cultivation is permitted only on a lot or site with a dwelling unit. The primary purpose of the property on which the nonmedical cultivation occurs shall be as a private residence.

4. Outdoor cannabis marijuana plants shall be located a minimum of five feet from property lines.

5. Outdoor cannabis marijuana plants shall be located only in the rear yard of a lot or site.

6. Outdoor cannabis marijuana plants are not permitted to be located in front yards of a lot or site.

7. Outdoor cannabis marijuana plants are limited to a maximum height of six feet above grade.

8. Indoor grow lights shall not exceed 1,200 watts and comply with the California Building, Electrical, Plumbing and Fire Codes as adopted by the City. Gas products (CO2, butane, propane, natural gas, etc.) or generators may not be used indoors.

9. The residence or fully enclosed and secure permitted structure used for the cultivation of cannabis marijuana must install a filtered ventilation system that will prevent cannabis marijuana plant odors from exiting the interior of the structure and that shall comply with the California Mechanical Code Section 402.3, Mechanical Ventilation, as amended. The filtered ventilation system must be approved by the building official and installed prior to commencing cultivation.

10. A fully enclosed and secure residential accessory structure used for the cultivation of nonmedical cannabis marijuana shall be located in the rear yard area of the property and must maintain a minimum 10-foot setback from any property line. The yard where the fully enclosed and secure structure is maintained must be enclosed by a solid fence at least six feet in height.

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35 11. Volatile solvents as defined in State Health and Safety Code Section 11362.3(d) or generators are strictly prohibited and may not be used for the cultivation, manufacturing or processing of cannabis marijuana.

12. A portable fire extinguisher, that complies with the regulations and standards adopted by the California State Fire Marshal and other applicable law, shall be kept in the area of cultivation at all times in a location that is easily accessible.

13. The private residence or the fully enclosed and secure structure shall comply with all provisions of California Building Standards Code (Title 24, California Code of Regulations) as adopted and amended by the City of Healdsburg.

14. Adequate mechanical locking or electronic security systems must be installed to ensure the indoor nonmedical cannabis marijuana cultivation is secure from the entry or access of any person under 21 years of age and from theft or vandalism, prior to the commencement of indoor nonmedical cultivation.

15. Indoor cultivation of marijuana shall only take place on impervious surfaces.

16. From a public right-of-way, there shall be no exterior evidence of nonmedical cannabis marijuana cultivation occurring on the property.

17. Public Nuisance Prohibited. It is hereby declared to be unlawful and a public nuisance for any person owning, leasing, occupying, or having charge or possession of any lot, site, dwelling unit, and/or fully enclosed and secure structure within the City to create a public nuisance in the course of cultivating marijuana plants or any part thereof in any location, indoor or outdoor. A public nuisance may be deemed to exist, if such activity produces: (a) odors which are disturbing to people of normal sensitivity residing or present on adjacent or nearby property or areas open to the public, (b) repeated responses to the parcel from law enforcement officers, (c) repeated disruption to the free passage of persons or vehicles in the neighborhood, (d) excessive noise which is disturbing to people of normal sensitivity on adjacent or nearby property or areas open to the public, or (e) any other impacts on the neighborhood which are disruptive of normal activity in the area.

18. Nothing herein shall be construed or interpreted to amend, repeal, affect, or restrict the ability of an individual or private entity to prohibit or restrict any of the actions or conduct otherwise permitted under this section.

D. Prohibited Activities and Uses. The following activities and uses are prohibited within the City of Healdsburg:

1. Mixed-light cultivation of cannabis marijuana (e.g., state-licensed cultivation sites).

2. Cannabis Marijuana nurseries.

3. Manufacturing of marijuana products.

4. Testing facilities for the testing of marijuana or marijuana products.

5. Retail sales of marijuana, marijuana products, or marijuana accessories.

6. Facilities for the distribution of marijuana, marijuana products, or marijuana accessories.

7. Marijuana microbusinesses.

8. Marijuana cultivation as a home occupation.

9. Retail operations related to the cultivation of marijuana.

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Packet Pg. 476 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

36 310. “Tasting room” type facilities, including but not limited to the offering or providing of free samples of cannabis marijuana at a retail facility.

E. Enforcement.

1. Public Nuisance. The violation of this section is hereby declared to be a public nuisance and may be enforced pursuant to the provisions of Chapter 1.12 HMC.

2. Seizure and Destruction of Cannabis Marijuana. Except as otherwise expressly stated in this section, all cannabis marijuana seized by the City police in the enforcement of this article shall be seized, retained and destroyed in the same manner and subject to the same procedures as are provided in California Health and Safety Code Sections 11472 through 11479, for cannabis marijuana possessed in violation of Division 10 of the Health and Safety Code. The requirements in Health and Safety Code Section 11479(b), prescribing the conditions that must be satisfied before seized cannabis marijuana may be destroyed without a court order, as applied by this section, are revised as follows:

Photographs have been taken which reasonably depict the total number of mature and immature plants to be destroyed and the location where they were growing immediately prior to their seizure.

3. Right of Entry. The code enforcement officer, building official, planning director, chief of police, fire inspector, or a designee is authorized to enter upon and inspect private properties to ensure compliance with the provisions of this section. Reasonable advance notice of any such entry and inspection shall be provided and, before entry, consent shall be obtained in writing from the owner or other person in lawful possession of the property. If consent cannot for any reason be obtained, an inspection warrant shall be obtained from a court of law prior to any such entry and inspection. In those cases where consent is denied, the City may seek to recover the costs it incurs in obtaining a warrant from the property owner and/or person in lawful possession of the property.

4. Abatement. The City attorney, in the name of and on behalf of the City and/or the people of the City, may bring a civil action in a court of competent jurisdiction to enforce any provision of this section, or to restrain or abate any violation of the provisions of this section as a public nuisance pursuant to the procedures set forth in Chapter 1.12 HMC.

5. Violation. Cultivation of cannabis marijuana that does not comply with this section constitutes a violation of the zoning ordinance and is subject to the penalties and enforcement as provided in Chapter 20.04 HMC.

6. Penalties Not Exclusive. The remedies and penalties provided herein are cumulative, alternative and nonexclusive. The use of one does not prevent the use of any others and none of these penalties and remedies prevent the City from using any other remedy at law or in equity which may be available to enforce this section or to abate a public nuisance.

F. Liability. The provisions of this section shall not be construed to protect the property owner(s) of record for property associated with the cultivation of cannabis marijuana, or their lessees, tenants or participants in the cultivation of cannabis marijuana, from prosecution pursuant to any laws that prohibit the cultivation, sale and/or possession of cannabis marijuana. In particular, the possession or cultivation of cannabis marijuana remains illegal under any circumstances pursuant to the laws of the United States, and this section is not intended to protect the above-described persons from arrest or prosecution pursuant to the laws of the United States. The property owner(s) of record for property associated with the cultivation of cannabis marijuana, or their lessees, tenants and other participants in the cultivation of cannabis marijuana, assume any and all risk and all liability that may arise or result under state and federal criminal laws from the cultivation of cannabis marijuana.

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Packet Pg. 477 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

37 Section 8. Section 20.28.310 Definitions shall be amended to include the following definitions (additions underlined, deletions strikethrough):

20.28.310 Definitions
Cannabis. All parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, or any other strain or varietal of the genus Cannabis that may exist or be discovered, or developed, that has psychoactive or medical properties, whether growing or not, including but not limited to 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 California Health and Safety Code Section 11018 and Business and Professions Code Section 26000(f), as both may be amended from time to time. Any reference to “cannabis” or “cannabis products” shall include medical and nonmedical cannabis and medical and nonmedical cannabis products unless otherwise specified. “Cannabis” or “cannabis product” does not mean industrial hemp as defined by Health and Safety Code Section 11018.5, or the weight of any other ingredient combined with cannabis to prepare topical or oral administrations, food, drink, or other product. “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.

Cannabis accessories. Has the same meaning as in Health and Safety Code Section 11018.2.

Cannabis cultivation. Any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis, including nurseries.

Cannabis cultivation area (or “canopy”). The total aggregate area(s) of cannabis cultivation on a single premises as measured around the outermost perimeter of each separate and discrete area of cannabis cultivation at the dripline of the canopy expected at maturity and includes, but is not limited to, the space between plants within the cultivation area, the exterior dimensions of garden beds, garden plots, hoop houses, green houses, and each room or area where cannabis plants are grown, as determined by the review authority.

Cannabis cultivation – indoor. The cultivation of cannabis within a permanent, lockable structure, using exclusively artificial lighting.

Cannabis cultivation – mixed-light. The cultivation of cannabis using any combination of natural and supplemental artificial lighting. Greenhouses, hoop houses, hot houses and similar structures, or light deprivation systems are included in this category.

Cannabis cultivation – outdoor. The cultivation of cannabis using no artificial lighting conducted in the ground or in containers outdoors with no covering.

Cannabis cultivation site. The location, premises, leased area(s), property, location or facility where cannabis is planted, grown, harvested, dried, cured, graded, or trimmed, or a location where all or any combination of those activities is currently occurring or proposed to occur in the future.

Cannabis distribution facility. Location or a facility where a person conducts the business of procuring cannabis from licensed cultivators or manufacturers for sale to licensed dispensaries or delivery operations, and the inspection, quality assurance, batch testing by a Type 8 licensee, storage, labeling, packaging and other processes, prior to transport to licensed dispensaries or delivery operations. This facility requires a Type 11 license pursuant to the Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”) or a state cannabis license type subsequently established.

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Packet Pg. 478 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

38 Cannabis distributor. A commercial cannabis operation that distributes cannabis or cannabis products between licensees, under a valid state license Type 11, or a state cannabis license type subsequently established.

Cannabis license. A state license issued pursuant to the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”).

Cannabis licensee. A person issued a state license under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) to engage in commercial cannabis uses or activity.

Cannabis, manufactured. Raw cannabis that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product.

Cannabis manufacturer. A person that produces, prepares, propagates, or compounds manufactured cannabis or cannabis products, either directly or indirectly or by extraction methods, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis, at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container, that holds a valid state Type 6 or 7 license, or a state cannabis license type subsequently established, and that holds a valid local license or permit.

Cannabis manufacturing facility (non-volatile/no solvents). A facility that produces, prepares, propagates, or compounds manufactured cannabis or cannabis products, directly or indirectly, by extraction methods, independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, and is operated by a Type 6 license for these activities. Non-volatile solvents are chemicals that do not produce a flammable gas or vapor. Examples of non-volatile solvents include ethanol, carbon dioxide, cooking oils, and butter.

Cannabis manufacturing facility (volatile solvents). A facility that produces, prepares, propagates, or compounds manufactured cannabis or cannabis products, directly or indirectly, by extraction methods, independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, and is operated by a Type 7 license for these activities. Volatile solvents are chemicals that produce a flammable gas or vapor. Examples of volatile solvents include butane, heptane, hexane, and propane.

Cannabis medical, medical cannabis, or medicinal cannabis. Cannabis that is intended to be used for medical cannabis purposes in accordance with the Compassionate Use Act (“CUA,” Health and Safety Code Section 11362.7 et seq.), the Medical Marijuana Program Act (“MMPA,” Health and Safety Code Section 11362.7 et seq.), the Medical Cannabis Regulation and Safety Act (“MCRSA,” Business and Professions Code Section 19300 et seq.) and the Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”).

Cannabis microbusiness (without cultivation). A commercial cannabis facility operating under a state Type 12 license, or a state cannabis license type subsequently established, and meeting the definition of microbusiness found in Business and Professions Code Section 26070(a)(3)(A), as may be amended from time to time, without cultivation of cannabis, and acts as a licensed distributor, Level 1 manufacturer, and retailer.

Cannabis non-storefront retailer. A commercial cannabis facility where cannabis and/or cannabis products are offered for retail sale exclusively by delivery, where there is no storefront open to the public, operating under a state license Type 9 or a cannabis license type subsequently established. This definition does not include mobile dispensaries.

Cannabis permit or commercial cannabis permit. A permit issued by the City pursuant to Section 20.20.095 for the operation of a commercial cannabis business within the City.

Cannabis products. Cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.

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Packet Pg. 479 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

39 Cannabis storefront retailer (dispensary). A facility operated in accordance with state and local laws and regulations, where cannabis and/or cannabis products are offered for retail sale, including an establishment that delivers cannabis and/or cannabis products as part of a retail sale, under a state license Type 10 or a cannabis license type subsequently established. This definition does not include mobile dispensaries.

Cannabis testing laboratory. A laboratory, facility, or entity that offers or performs tests of cannabis or cannabis products, including the equipment provided by such laboratory, facility, or entity, which is accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity and is licensed by the state.

Cannabis use or commercial cannabis use. Any commercial cannabis activity as defined in California Business and Professions Code Section 26001(j), and as may be subsequently amended, which includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis or cannabis products as provided in the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA,” California Business and Professions Code Sections 26000 et seq.) and applicable state cannabis laws and for which a state license or nonprofit license is required.

Non-Storefront Commercial Medicinal Cannabis Retailer. Any commercial cannabis use that only engages in the retail sale by delivery of medicinal cannabis to qualified patients and primary caregivers.

Primary caregiver. Primary Caregiver shall have the meaning set forth in Health and Safety Code Section 11362.7, as it may be subsequently amended.

Qualified patient. Qualified Patient shall have the meaning set forth in Health and Safety Code Section 11362.7, as it may be subsequently amended.

State cannabis laws. Means and includes California Health and Safety Code Sections 11362.1 through 11362.45; California Health and Safety Code Section 11362.5 (Compassionate Use Act of 1996); California Health and Safety Code Sections 11362.7 to 11362.85 (Medical Marijuana Program); California Business and Professions Code Sections 26000, et seq. (Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”)); all state laws enacted or amended pursuant to SB-94, Chapter 27, Statutes of 2017; the California Attorney General’s Guidelines for the Security and Non-Diversion of Cannabis Marijuana Grown for Medical Use issued in August 2019, as such guidelines may be revised from time to time by action of the Attorney General; California Labor Code Section 147.5; California Revenue and Taxation Code Sections 31020 and 34010 through 34021.5; California Fish and Game Code Section 12029; California Water Code Section 13276; all state regulations adopted pursuant to MAUCRSA, particularly including California Code of Regulations Title 4, Division 19 (Department of Cannabis Control); any license issued pursuant to MAUCRSA; and all other applicable laws of the State of California.

Youth oriented property. Any property on which any of the following uses are located: (1) a child day care facility (as defined by California Health and Safety Code Section 1596.750, which includes a facility that provides nonmedical care to children under 18 years of age in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual on less than a 24-hour basis; and includes day care centers, employer-sponsored child care centers, and family day care homes); (2) a day care center (as defined by California Health and Safety Code Section 1596.76, including any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and school-age child care centers, and includes child care centers licensed pursuant to California Health and Safety Code Section 1596.951); (3) a youth center (as defined by California Health and Safety Code Section 11353.1, which includes 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); or (4) a school (including any private or public educational facility providing instruction in kindergarten or grades 1 through 12).

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Packet Pg. 480 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) Ordinance No.

40 Section 9. Environmental Compliance.

The City Council finds that the proposed Healdsburg Municipal Code amendments are exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (the “common sense exemption”) because it can be seen with certainty that there is no possibility that the amendments will have a significant effect on the environment; and
Section 10. Severability
If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

Section 11. Effective Date and Publication.

This Ordinance of the City of Healdsburg shall be effective thirty (30) days after the date of its passage. Before expiration of fifteen (15) days after its passage, this Ordinance or a summary thereof as provided for in Government Code Section 36933, shall be published at least once in a newspaper of general circulation published and circulated in the City of Healdsburg, along with the names of the City Council members voting for and against its passage.

INTRODUCED by the City Council of the City of Healdsburg on the ___ day of ____, 2023, and PASSED and APPROVED at a regular meeting of the City Council on the ____ day of ____, 2023, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAIN: Councilmembers: ( )

SO ORDERED
Ariel Kelley, Mayor Raina Allan, City Clerk
Dated:

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Packet Pg. 481 Attachment: Commercial Cannabis Ordinance [Revision 1] (3971 : Commercial Cannabis Ordinance) BUNI

W NORTH ST

GROVE ST

SCENIC LN

GRANT AV

KINLEY DR

BAILHACHE AV

HEALDSBURG AV

WESTSIDE
RD

RIO LINDO AV

N FITCH MOUNTAIN RD

CHIQUITA
RD

S FITCH MOUNTAIN RD

DRY CREEK RD
101
KINLE
Y
D
R

MAGNOL IADR
101
101
Park
Park
Park
School
Park
School
School
Youth
Center
Child
Care
School Child
Care
School
Park
Park
School
Park
Park
Park Park
Park
Park
Park
Park
Park
Park
Youth
Center
Park
Library
N
Map Date: 2/22/2023
Legend
City Limits
Sensitive Use Parcel
Location Type
School
Youth Center
Child Care
Library
Park
Eligible Parcel Locations

COMMERCIAL DISTRICTS
CD - Downtown Commercial
CS - Service Commercial
MU - Mixed Use

INDUSTRIAL DISTRICT
I - Industrial 1,600 800 0 1,600
Feet

PARCELS ELIGIBLE FOR RETAIL DISPENSARY OR MICROBUSINESS Location Requirements:
• A retail dispensary which is open to the public may only be located within the allowed zoning district(s) under Table 10 of Section 20.08.145, Table 12 of Section 20.08.155, and Table 15 of Section 20.08.195.
• A retail dispensary shall not be established on any parcel containing a dwelling unit, or immediately abutting (sharing a common property line) a residential zoning district.

Residentially zoned does not include mixed-use zoning for purposes of this chapter.
• A retail dispensary shall not be established within five hundred feet from any youth-oriented property.
• A retail dispensary shall not be established within two hundred and fifty feet of any public park (with the exception of West Plaza Park and 3 North Street), public playground, or public library.
• The distances listed above shall be measured between
the nearest entrance (ingress/egress to commercial
cannabis establishment, e.g., front door/public entry or service door) of the retail dispensary and the nearest
property line of the parcel(s) on which the youth-oriented property, public park, public playground, or public library is located, along the shortest route intended and available for public passage (any public road, street, or highway,
including footpaths and bicycle paths, or other route
provided for the passage of people).

Attachment 2 7.C.b
Packet Pg. 482 Attachment: Potential Dispensary Locations (3971 : Commercial Cannabis Ordinance)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: March 20, 2023
SUBJECT: Provide Feedback on Cannabis Dispensary Application Criteria and Process
PREPARED BY: Andrew Sturmfels, Assistant City Manager
STRATEGIC INITIATIVE(S):

Establish Proactive Policies/Programs to Continue to Promote Economic Diversity & Sustainable Growth
Provide Effective Governance
RECOMMENDED ACTION(S):

Receive a presentation from City Staff on the proposed process, criteria, and dispute resolution process to be included in the application process for retail cannabis dispensaries and provide feedback to staff on the process.

COMMUNITY ENGAGEMENT/OUTREACH:

This discussion item is part of a properly noticed City Council meeting where opportunity for public participation is available. Previous efforts to engage the community on developing a cannabis business program include a public workshop, multiple publicly noticed meetings, a community survey, and a voter initiative placed on the 2022 ballot.

BACKGROUND:

The City Council has provided direction to staff to establish a competitive process for the selection of up to two retail dispensaries who will be permitted to operate within the City limits.

Applicants holding a type 12 microbusiness license (which would also include distribution and non-volatile manufacturing) would be allowed to participate. Staff anticipate significant interest from prospective businesses in competing for one of the two available retail cannabis licenses.

The purpose of this agenda item is to present a preliminary proposed approach for conducting the competitive process and receive feedback from the Council on the process, criteria and adjudication process.

At the January 23rd, 2023 City Council meeting, the City Council approved a contract with HdL companies for technical support services in developing the City’s cannabis business program.

Staff have worked with HdL to develop the proposed approach, taking into consideration

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previously provided feedback from the Council and incorporating the Healdsburg community context.

DISCUSSION/ANALYSIS:

Application Process:

A common approach to solicit and review proposals for any competitive process is to use a structured application review process. Attachment A includes the current draft Application Procedures and Guidelines. This document outlines details on requirements for submittal, the review process and review criteria, as well as the adjudication process should an appeal be filed.

Upon ultimate approval of the Application Procedures and Guidelines by Council, staff would open the application period. Staff recommend keeping the application window open for 45 days to allow applicants to have ample time to complete all application requirements. Applicants would be required to submit all the following documents, including:

1. Retail Commercial Cannabis Permit Application

2. Financial Responsibility, Indemnity, and Consent to Inspection Agreement

3. Agreement on Limitations of Liability and Indemnification to City

4. Application Fee and Background Check fees

5. Property Owner Consent/Landlord Affidavit

6. Proof of Insurance or Letter of Insurability

7. Proof of capitalization

8. Zoning Clearance Letter
Much of the key information needed to evaluate the applicants will be requested in the Retail Commercial Cannabis Permit Application. Applicants would be required to submit all documents in the form and manner required within the application to be deemed having submitted a complete proposal.

Phase I: Determination of Eligibility
The review process is broken down into multiple phases. Phase one of the review process would be a general determination of eligibility. Applications would be reviewed for completeness and compliance to meet the minimum submittal requirements. The determination of eligibility would be based on the criteria outlined in the procedures and in accordance with the currently proposed Land Use Code amendments. This first phase is essentially pass or fail based purely on application completeness.

Phase II: Application Evaluation and Review
During the second phase of review, the City will review and score each applicant using a merit based system. Applicants will be scored and ranked using the following evaluation criteria:
▪ Section A – Business Plan (400 points)
▪ Section B – Labor and Employment Plan (400 points)
▪ Section C – Security Plan (400 points)

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The detailed proposed evaluation criteria for each of these sections can be found in the appendix of Attachment A. The phase two review is meant to be a purely technical evaluation of the information submitted. Staff would not recommend changes to the criteria listed in the appendix.

However, Council may wish to consider changing the number of points allocated to each section.

Phase III: Interviews
The third phase includes a staff selection committee including three members of the City staff designated by the City Manager. These staff will conduct a discretionary, merit-based interview process. Applicants will all be asked the same questions and given the same amount of time for responses. Applicants will be scored using the following evaluation criteria:
• Section E – Qualifications of Owners (400 Points)
• Section F – Neighborhood Compatibility (400 Points)
• Section G – Community Benefits and Equity Plan (400 Points) • Section H – Proposed Site Plan (400 Points)
Proposed questions are included in the appendix of Attachment A. Staff have provided substantial input on the questions in this section to ensure that the evaluation criteria is reflective of the City of Healdsburg’s values, policy goals and Council feedback provided to date. Staff are seeking feedback from Council on both the criteria, questions, and scoring breakdown for the interviews.

Phase IV: City Council Final Determination
Upon completion of Phase III, the City Manager will present to the City Council, at a properly noticed public meeting, the top applicants. The City Council shall make a final determination as to whether the Applicant(s) will be awarded a permit. During the public hearing, each applicant will be prepared to conduct a brief presentation and answer questions from the Council.

Furthermore, during the public hearing, the City Council may impose additional terms and conditions under which the retail cannabis business will operate. The decision of the City Council would be final.

Microbusinesses
Council has directed staff to allow for the consideration of a Type 12 microbusiness as part of this process. To ensure a microbusiness application is reviewed in the same manner as retail only-applicants, the responses to the evaluation criteria sections A-G will only be focused on storefront retail applications to ensure that staff can compare applicants fairly. Should a microbusiness be selected to participate in the interview phase or City Council final determination phase, the City would reserve the right to ask questions related to the proposed microbusiness operations. If a microbusiness is ultimately selected by Council, they would be required to amend their application to include any additional information required by the City to finalize the permit.

Equity and Community Benefit Considerations
In the attached draft application procedures and guidelines staff have included several policy recommendations to ensure a fair and equitable process for all applicants. They include:

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1. No requirement to have site control. The proposed process requires a Zoning Clearance Letter to ensure the site meets the City’s regulatory criteria. The application also requires proof of owner/landlord consent to lease/sell property in the event the applicant is successful. To limit potential competition between applicants for the same site, staff recommends capping the number of applicants who can submit the same site to 5. The five selected will be the first five to obtain the Zoning Clearance Letter, which will be provided in the order the request is received. This allows potential applicants to apply without having to front the costs required to have site control.

2. Living Wage Requirement – Included in the labor and employment plan is a commitment by the applicant to offer employees, at a minimum, a Living Wage.

Additionally, during the interview process, the Community Benefits and Equity Plan section includes a question for the applicant where they will be asked to identify the minimum wage that will be offered to employees. This category seeks to ensure that workers in the City will receive a living wage.

3. Encouraging Local Hiring – Included in the Community Benefit and Equity Plan is a question asking the applicant to describe plans for local outreach to City residents for open positions, and what other actions the applicant proposes to benefit the local workforce and/or the applicant’s local employees.

4. Community Benefits – Applicants will be asked during the interview phase to describe the benefits that the business will provide the local community, including aiding, participating in, or funding the work of local nonprofits, civic organizations, or social service organizations. This category seeks to ensure the selected business gives back to the local community through participation and contributions of time and resources.

5. Fees – While not part of this item, staff will be requesting Council feedback on application and regulatory fees. Ensuring equity across fees will allow for greater participation among potential applicants.

ENVIRONMENTAL STEWARDSHIP:

Staff are reviewing options for a fully electronic process for application submittal. Additionally, criteria included in the Community Benefits and Equity Plan portion of the applications will seek understanding of the applicants environmental practices. Any applicant awarded a license will also have to comply with all federal, state, and local environmental laws.

ALTERNATIVES:

As a discussion item, staff is seeking direction on the draft Application Procedures and Guidelines.

FISCAL IMPACT:

There is no direct fiscal impact associated with this action.

ENVIRONMENTAL ANALYSIS:

Pursuant to California Environmental Quality Act (“CEQA”) and Title 14, the California Code of Regulations Section 15378(b)(2), the recommended action is administrative in nature and does not qualify as a “Project” under CEQA. Therefore, no further CEQA or environmental review is required.

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ATTACHMENT(S):

Attachment A: DRAFT Application Procedures and Guidelines

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1 City of Healdsburg
City Manager’s Office
401 Grove Street
Healdsburg, CA 95448
Email: [email protected]

APPLICATION PROCEDURE GUIDELINES AND REVIEW CRITERIA

FOR A COMMERCIAL CANNABIS BUSINESS PERMIT
(STOREFRONT RETAIL APPLICATIONS)
Application Period
OPENS – TBD
CLOSES – TBD

NUMBER OF PERMITS
During this application period the City will be allowing up to two (2) cannabis Retail permits under this process.

RETAIL BUSINESS
▪ “Retailer” shall have the same meaning as that contained in Section 26070(a)(1) of the California Business and Professions Code.

CONTACT
If you have any questions or would like an update on the status of your application, please contact the City Manager’s Office by email at [email protected].

APPLICABLE REGULATIONS
Information regarding the Commercial Cannabis Business (CCB) Application process can be found on the City’s website at https://healdsburg.gov/cannabis and includes the following:
▪ Application Procedures Guidelines
and Review Criteria
▪ Healdsburg Municipal Code
Chapter 20.20.095 (Commercial
Cannabis Uses and Requirements)
▪ Property Owner Consent/Landlord
Affidavit
▪ Financial Responsibility, Indemnity and
Consent to Inspection Terms Agreement
These Procedure Guidelines apply solely to Cannabis Retail Applications. Applicants wishing to operate a Microbusiness with Retail are required to apply for a Cannabis Retail permit, prior to being considered for a Microbusiness permit. Additional information regarding Microbusiness permits is provided in Appendix A.

9.A.a
Packet Pg. 488 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 2 ▪ Healdsburg Municipal Code Chapter 20.08
(Use Tables)
▪ Healdsburg Municipal Code Chapter

20.28.310 (Definitions)
▪ Commercial Cannabis Business (CCB)
Permit Application
To be considered for issuance of a Cannabis Business Permit, applications must be submitted to the City Manager’s Office located at the address listed on these procedures by the deadline.

There will be no exceptions. These Procedure Guidelines and Review Criteria (hereafter referred to as “Procedures”) constitute the application process and are adopted pursuant to the Healdsburg Municipal Code (HMC) Sections 20.20.095(A)(4) and 20.20.095(B)(3).

Applicants should monitor the City’s web page for any additional information, FAQs, or updates.

It is the responsibility of the Applicant to stay informed of this information.

AMENDMENTS TO THE APPLICATION
Applicants will not be allowed to make amendments to their application or to supplement their application, except as otherwise specifically permitted in these Procedures, or posted on the City’s website as a clarification update, or as authorized in writing by the City Manager or his/her designee.

City staff and/or the Consultant will conduct a preliminary evaluation of the applications for completeness. Applications missing a major component (for example, a Security Plan), will be rejected and the City will notify the applicant by email that they have been disqualified. For Applications missing minor essential information, (for example, signatures/dates on forms, proof of payment receipts, scanned pages in one of the scoring criteria documents, or incorrect formatting or organization of files), the primary contact will be notified by email that their application is found to be missing minor components. If this is the case, the Applicant may be granted five business days from the date of the email to submit the required supplemental information.

Please note, additional time to complete the curing process will not be provided. Applicants should monitor incoming and spam email carefully. Any additional information, other than what was requested to cure the minor deficiencies, will not be considered. Following the five-day supplemental application window, Applicants will be notified if their application is deemed incomplete or if there is any other reason for which they will not be moving forward in the application process.

LIMITATIONS ON MULTIPLE SUBMISSIONS
Applicants possessing an ownership interest of ten percent (10%), or more in a retail cannabis permit application shall be limited to submitting only one application which includes retail during this application period. In addition, the City will only accept a maximum of five application Zoning Clearance Letters (ZCL) per property (APN). Furthermore, without exception, only one retail Applicant will be issued a retail permit per location by the City Council.

CITY’S RESERVATION OF RIGHTS
The City reserves the right to reject any and/or all applications, with or without cause or reason.

The City may modify, postpone, or cancel the request for a CCB permit without liability, obligation, or commitment to any person, party, firm, or organization. In addition, the City

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Packet Pg. 489 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 3 reserves the right to request and obtain additional information from any Applicant in order to conduct a complete review of the application or an investigation into the truthfulness of the statements set forth in the application or provided at any stage of the application process.

This application process is adopted pursuant to HMC Chapter 20.20.095. Review the information regarding the application process and which documents you will need. Before submitting your application, review your application in its entirety to ensure that it is complete and accurate. Review the information regarding the Cannabis Business Permit application process for a CCB on the City webpage (link provided on page one).

APPLICATION SUBMITTAL REQUIREMENTS
Applications must respond to all requirements outlined in the Application Procedure and Review Criteria for a Commercial Cannabis Business Permit. Applicants must submit all required application materials together via the online submittal and payment portal, to be found on the cannabis portion of the City’s website.

The application package must include all of the following documents, with signatures (where applicable). Documents shall be submitted in the order and format described in the section entitled “Online Application Submittal Contents.”

1. Cannabis Business Permit Application;

2. Financial Responsibility, Indemnity and Consent to Inspection Agreement;

3. Agreement on Limitations of City’s Liability and Indemnification to City;

4. Property Owner Consent/Landlord Affidavit;

5. Copy of Live Scan receipt for each owner and manager;

6. Proof of Capitalization;

7. Business entity formation and organizing documents;

8. Zoning Clearance Letter;

9. Proof of Insurance or Letter of Insurability from the Insurance Company.

ONLINE APPLICATION SUBMITTAL CONTENTS
All Applicants must submit one complete digital copy of the application package, as outlined in the below format. The entire application package must be received by the City Manager’s Office at the same time using the online submittal portal.

Please note that responses to the Evaluation Criteria, Sections A-H (found in Appendix A of the Procedures) shall be limited to 125 pages, otherwise points will be deducted. Responses pertaining to Backgrounds, Proof of Capitalization, Business Entity Formation, Zoning Clearance Letter, Property Owner Consent/Landlord Affidavit, and Business Owner Acknowledgement Form shall not be included in the 125-page limitation. Those responses should be saved in PDF files that are separate from the Evaluation Criteria (see below).

Applicant responses to the Evaluations Criteria (Sections A-H) must be provided in the section order identified in Appendix A. Each section shall be clearly labeled, with responses provided in

APPLICATION PROCESS

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Packet Pg. 490 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 4 the appropriate section. Any response to Evaluation Criteria that is not placed within the appropriate section will receive a deduction in points.

All materials must be in a PDF format in the following files. Please submit the files in the correct format and organized correctly or your application may be rejected.

PDF File #1 Cannabis Business Permit Application (pages 1-5); Financial Responsibility, Indemnity and Consent to Inspection Terms Agreement (pages F1-F3); Agreement on Limitations of City’s Liability and Indemnification to City (pages F4-F6); and Property Owner Consent/Landlord Affidavit. All copied documents shall display required signatures to be deemed complete.

PDF File #2 Evaluation Criteria (Responses to Sections A-H of Appendix A limited to 125 pages, excluding Proof of Capitalization, which shall be included separately in PDF File #4).

PDF File #3 Copy of Live Scan receipt for each owner and manager.

PDF File #4 Proof of Capitalization (Appropriate bank statements, loan documents, promissory notes, financial and commitment letters); Copies of business entity formation and organizing documents (e.g. certified copy of articles of incorporation, bylaws, statement of information, articles of association, and fictitious business name statement, as applicable).

PDF File #5 Zoning Clearance Letter (ZCL) which shows the correct location, unit, space, or suite number in the building being used. Proof of Insurance or a letter showing proof of insurability by a qualified insurance company which shows the location being insured in City of Healdsburg, the type of activity being insured, and the name of the business being insured. Copies from another business location in another city owned by the Applicant will not be accepted.

CRIMINAL BACKGROUND CHECK
Each owner and manager, as defined in HMC Sections 20.20.095(A)(4)(b) and

20.20.095(A)(4)(c) must undergo a criminal history background check to demonstrate they do not provide good cause for denial of a CCB permit, per HMC Section 20.20.095(A)(4)(d).

Applications with owners and/or managers who do not meet the criminal history eligibility requirements of HMC Section 20.20.095(A)(4)(d) will be disqualified.

Live Scans may be performed by the Healdsburg Police Department (HPD) by appointment only or at a third-party Live Scan provider approved by the California Department of Justice (DOJ).

Applicants may schedule with HPD to complete their Live Scan or utilize a third-party Live Scan provider. Third party Live Scan providers can be found online at https://oag.ca.gov/fingerprints/locations.

A copy of the Live Scan form is provided as part of the application materials. Applicants should complete all blank fields provided in the “Request for Live Scan Service” form under the “Applicant Information” section. Applicants shall not alter the pre-completed sections of the Live Scan request form, as any modification may result in Live Scan rejection and/or delay by the DOJ or FBI. A separate form shall be filled out for each owner of the business receiving a Live

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Packet Pg. 491 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 5 Scan. The bottom portion of the “Request for Live Scan” form must be filled out by the person conducting the Live Scan.

The Live Scan fee will be charged at the time of Live Scan by the HPD or the third-party Live Scan provider. Live Scan results will be sent directly to the HPD. The HPD will be responsible for conducting an additional background investigation upon receipt of the Live Scan results. If, at any point, the HPD background investigation determines that one or more of the owners is ineligible pursuant to the HMC, the application will be denied.

ZONING CLEARANCE LETTER (ZCL)
As part of a complete application packet, an Applicant must obtain a Zoning Clearance Letter from the Community Development Department. To secure this letter, an Applicant must make a written request to the Community Development Department which should specify the intended use of the building, and the proposed building location.

The issuance of a ZCL does not constitute written evidence of permission given by the City or any of its officials to operate a cannabis business, nor does it establish a “permit” within the meaning of the Permit Streamlining Act, nor does it create an entitlement under the Zoning or Building Code. A regulatory permit for a CCB does not constitute a permit that runs with the land on which the cannabis business is established.

FEES
All applicants will be required to submit a fee of $TBD. This amount will be charged against time spent by City staff in reviewing applications and administrating the application process.

Applicants may be required to pay additional amounts, as required, for the sole purpose of the City’s completion of the application review process. Payment must be made by a certified check, cashier’s check or money order made payable to the City of Healdsburg. Please note the City will not accept cash or credit cards and application fees are non-refundable once the City has begun reviewing the application.

A separate fee for the Zoning Clearance Letter (ZCL) of $TBD per site and a Background Check Fee of $TBD per owner, will also be required. There will also be a Live Scan Fee of $TBD.

SUBMITTAL DEADLINE
Applications must be received by the TBD Department by 4:00 pm on TBD. Late applications will not be accepted. Furthermore, applications may be rejected for the following reasons:

1. It is not responsive to this Cannabis Business Permit application and the Application Procedure Guidelines for a Commercial Cannabis Business Permit.

2. The issuance of the Cannabis Business Permit for the proposed location does not comply with State law or HMC.

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Packet Pg. 492 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 6 PHASE I: DETERMINATION OF ELIGIBILITY
Applications will be reviewed for completeness and compliance to meet the minimum submittal requirements. The determination of eligibility will be based on the criteria outlined in these Procedures, in accordance with HMC Sections 20.20.095(A)(4) and 20.20.095(B)(3). These Procedures may be amended in writing, for clarification to application submittal questions which will be posted in the FAQ section of the Cannabis Information webpage and shall go into full effect immediately upon being posted on the website.

PHASE II: APPLICATION EVALUATION AND REVIEW (1,200 points) During Phase II, the City will review and score each application using a merit-based system.

Applicants will be scored and ranked using the following evaluation criteria identified in Appendix A:
▪ Section A – Business Plan (400 points)
▪ Section B – Labor and Employment Plan (400 points)
▪ Section C – Security Plan (400 points)
The top applicants from Phase II, as determined by the City, may be eligible to advance to Phase III. The decision as to how many applicants will be interviewed will be determined by the quantity of applicants and the overall quality the City receives. Notice of the results of Phase II will be provided in writing via email to the primary contact listed on the application.

PHASE III: INTERVIEWS (1,600 points)
During Phase III, a Staff Selection Committee designated by the City Manager will conduct a discretionary merit-based interview process. Applicants will be scored using the following evaluation criteria identified in in Appendix A:
• Section E – Qualifications of Owners (400 Points)
• Section F – Neighborhood Compatibility (400 Points)
• Section G – Community Benefits and Equity Plan (400 Points) • Section H – Proposed Site Plan (400 Points)
Upon the completion of Phase III, the Staff Selection Committee will tabulate the scores of all Applicants from Phase III to create a preliminary ranking which will form the basis for determining who will be invited to participate in Phase IV. The ranking will be based upon the scores received during the Phase III discretionary merit-based interview process. Should there be a tie in any scoring, the Staff Selection Committee shall force rank each of the Applicants who participated in Phase III, in order to establish an eligibility list.

Prior to the tabulation of scores, the City reserves the right to request and obtain additional information from any candidate, for purposes of clarifying or validating information provided during Phase III interviews. The City Manager may review the totality of the information received, including any additional information received, to determine which applicants are authorized to participate in Phase IV.

APPLICATION REVIEW, SCORING, AND APPROVAL PROCESS

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Packet Pg. 493 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 7 PHASE IV: CITY COUNCIL FINAL DECISION
Upon the completion of Phase III, the City Manager will present to the City Council, at a properly noticed public hearing, the top Applicant(s) from the Phase III process. The City Council shall make a final determination as to whether the Applicant(s) will be awarded a CCB permit. Each Applicant should be prepared to conduct a brief presentation and answer questions from the City Council. Further details as to date, time, place, and length of presentation will be provided prior to the date of the public hearing.

At the public hearing, the City Council may impose additional terms and conditions under which the cannabis facility will operate. City Council conditions may be addition to the requirements of HMC Chapter 20.20, including, but not limited to, minimum operating procedures to protect and promote the public health, safety and welfare of the community, customers, qualified patients, and primary caregivers. Additionally, during the public hearing the City Council may ask questions relating to proposed microbusiness or delivery operations, if the Applicant selected one or both of these options on the Permit Application form. The City reserves the right to consider microbusiness or delivery operations, for purposes of making final determination as to whether to award a CCB permit.

Any Applicant wishing to appeal Phase I through Phase III of the Application Process may file an appeal with the City Clerk’s Office within ten (10) days of the Applicant receiving a notice that they will not move forward in the application process or be issued a permit. Such appeals shall comply with the requirements of Appendix B. Any decision made by the City Council during Phase IV to award or not to award a cannabis permit shall be final and shall not be subject to appeal.

NOTE: Being awarded a CCB permit does not constitute a land use entitlement and does not waive or remove the requirements of applying for and receiving permits for all construction including: electrical, plumbing, fire, Planning & Building Department permits or reviews, and any other permits, licenses, or reviews as deemed necessary by the relevant departments or governmental entities in charge of said permits. Nor does the award of a CCB permit guarantee that the plans submitted via the CCB application process meet the standards or requirements in HMC Title 20 and any other permit requirements from other City departments or agencies.

9.A.a
Packet Pg. 494 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 8 APPENDIX A: EVALUATION CRITERIA
Public Records Act
The City of Healdsburg is a public agency subject to the California Public Records Act (“CPRA”). In the event a request for information under the CPRA seeks disclosure of application materials marked by Applicant as “Confidential Information,” the City may make reasonable efforts to provide notice to the Applicant prior to such disclosure to allow Applicant to seek a protective order, injunctive relief, or other appropriate remedy. If Applicant contends any designated application materials are exempt from the CPRA and wishes to prevent disclosure, it is required, at its own cost, liability, and expense to obtain a protective order, injunctive relief or other appropriate remedy from a court having jurisdiction over the matter at least two (2) days before City’s deadline to respond to the CPRA request. If the Applicant fails to obtain such a remedy before the deadline for the City’s response to the CPRA request, the City will disclose the requested information and shall not be liable or responsible for such disclosure.

Microbusiness Applicants
Responses to Evaluation Criteria Sections A-G should focus primarily on storefront retail operations. Applicants intending to operate cannabis deliveries and/or microbusiness operations should communicate this intent through the Commercial Cannabis Business Permit Application form, under the section entitled “Applicant (Entity) Information.” No additional information regarding proposed delivery and/or microbusiness operations is required in Applicant written responses to Sections A-G of the Evaluation Criteria. Nothing within the Application Procedures and Guidelines prohibits an Applicant from providing information relating to their proposed delivery and/or microbusiness operations in their written responses. However, Applicants should be aware that no additional points will be awarded during Phase II to Applicants who provide information related to proposed delivery and/or microbusiness operations in their written responses. For Applicants selected to progress to Phase III interviews, the City reserves the right to ask questions related to proposed delivery and/or microbusiness operations, if the Applicant selected one or both of these options on the Permit Application form. Additional information regarding Phase III evaluation will be provided to Applicants prior to the start of interviews.

PHASE II EVALUATION
Important Instructions:
• Evaluation Criteria identified in Sections A-C will be scored based upon Applicant written response. Points may be deducted for responses that fail to meet State/local regulatory requirements, or best practices for the cannabis industry. • Applicant responses to the Evaluations Criteria must be provided in the same order identified in Sections A-C below. Each section shall be clearly labeled, with responses provided within the appropriate section. Any response to Evaluation Criteria that is not placed within the appropriate section will receive a deduction in points. • Any commitments made by an Applicant during the evaluation process will become terms and conditions under which the cannabis business must operate. Applicants awarded a permit that fail to meet commitments made during the evaluation process may have their cannabis business license suspended or revoked by the City.

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Packet Pg. 495 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 9 SECTION A: BUSINESS PLAN (400 points)

1. Finances – Application includes a budget for construction, operations, maintenance, compensation of employees, equipment, property lease, security equipment and staff, City fees, state fees, utility costs, product purchases and other anticipated contingency costs. The budget must demonstrate sufficient capital in place to pay startup costs and at least three months of operating costs, as well as a description of the sources and uses of funds. Application must also address the following:

A. Proof of capitalization, in the form of documentation of cash or other liquid assets on hand, Letters of Credit or other equivalent assets. (Note: Proof of Capitalization should be submitted in a separate PDF file. See “Application Process” section for more information.)
B. A pro forma for at least three years of operations.

C. A schedule for beginning operation, including a narrative outlining any proposed construction and improvements and a timeline for completion.

D. A letter from a bank, credit union, or similar financial institution stating that the cannabis applicant has, or will be provided, access to banking services.

2. Daily Operations – Application describes the day-to-day operations of the proposed Retail business, which meet industry best practices. This should include, at a minimum, a description of the following criteria:

A. Customer check-in procedures.

B. Location(s) and procedures for receiving deliveries during business hours.

C. The Point-of-Sale system (including name) to be used and how it will interact with the state’s mandated track and trace system. Identify the number of Point-ofSales terminals to be used when the business is at full capacity.

D. The number of customers to be served per hour/day.

E. The proposed product line, including brand names, to be sold at the business, and estimate the percentage of sales of flower and manufactured products.

F. How the Cannabis Business will conform to local and state laws. See HMC Section 20.20.095(B)(7) for local requirements pertaining to retail establishments in the City of Healdsburg.

G. How cannabis and cannabis products will be tracked and monitored to prevent diversion.

H. The proposed waste management plan, including waste disposal locations, security measures, methods of rendering all waste unusable and unrecognizable, and the vendor in charge of disposal.

SECTION B: LABOR AND EMPLOYMENT PLAN (400 points)

1. Collective Bargaining – Application describes to what extent the cannabis business will recognize the collective bargaining rights of employees in accordance with the Department of Cannabis Control (DCC) California Code of Regulations (CCR) Title 4, Division 19, §15002.

2. Number of Employees – Application identifies the number of employees at initial opening, and the maximum number of employees when the business is at full capacity.

3. Employee Responsibilities – Application identifies all positions to be employed at the proposed business, and their responsibilities.

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Packet Pg. 496 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 10 4. Employee Benefits – Application identifies the benefits provided to employees, including health care, vacation, and medical leave, to the degree they are offered as part of employment.

5. Living Wage – Application commits to offering employees, at minimum, a Living Wage, as defined by the MIT Living Wage calculator (https://livingwage.mit.edu/).

SECTION C: SECURITY PLAN (400 points)

1. Qualified Security Professional – The Application includes a security plan that has been prepared by a qualified professional. The security plan can be prepared with in-house staff or a third-party security consultant, but must clearly demonstrate that it meets the professional standards requested to receive the appropriate points for each criterion in this section. The qualifications of the person(s) preparing the security plan must be provided, for verification that they are able to meet these standards.

2. Premises Diagram – The Application includes a Premise Diagram in the Security Plan that meets the following requirements:

A. The diagram meets all the standards identified in Department of Cannabis Control (DCC) California Code of Regulations (CCR) Title 4, Division 19, §15006 Premises Diagram.

B. The diagram shows the boundaries of the property and the proposed location to be licensed, showing all dimensions, entrances and exits, interior partitions, walls, rooms, windows, and doorways, and includes a brief statement or description of the principal activity to be conducted therein.

C. The diagram shows and identifies commercial cannabis activities that will take place in each area of the premises and identifies all limited-access areas.

D. The diagram shows where all cameras are located and assigns a number to each camera for identification purposes.

E. If the proposed location consists of only a portion of a property, the diagram is labeled indicating which part of the property will be used for the licensed premises and what activities will be used for the remaining property.

3. Operational Security – The Application includes a description of operational security, including but not limited to general security for access/visitor control and inventory control.

4. Cash Handling – The Application includes a description of cash handling procedures, including the process for receiving, tracking, storing and transporting cash generated by the retail business.

5. Perimeter Security – The Application includes a description of perimeter security, exterior lighting, on-site security guards, proposed guard hours and their responsibilities.

6. Employee Training and Policies – The Application includes a description of employee training and general security policies.

9.A.a
Packet Pg. 497 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 11 PHASE III EVALUATION
Important Instructions:
• During Phase III Interviews, Applicants will be asked questions related to Evaluation Criteria Sections D-G.
• Due to the time limitation of interviews, Phase III questions will cover only a portion of the criteria identified within each Section D-G.
• Scoring for Sections D-G will be based upon information conveyed verbally by Applicants, in response to the questions asked. Scoring for Section G may also consider photographs, site plans, and other visual depictions provided by Applicants. • All Applicants will be asked the same questions and be provided the same amount of time for response.
• Any commitment made by an Applicant during the Phase III Interview process may become a condition on the business permit, if issued.

SECTION D: QUALIFICATION OF OWNERS (400 points)

1. Describe the business owner’s prior experience in owning, managing, and operating a legally permitted or licensed retail cannabis business in the United States. For purposes of this section, owner shall mean the State definition of owner in the State Business and Professions Code Section 26001.

2. Describe your overall knowledge of the cannabis industry, including identification of how industry best practices and State regulations have been incorporated in existing/prior legal businesses outside the City of Healdsburg.

3. Describe the involvement of the ownership team in the day-to-day operation and management of the proposed business.

SECTION E: NEIGHBORHOOD COMPATIBILITY PLAN (400 points)

1. Describe how the business will take proactive steps to avoid becoming a nuisance or having negative impacts on its neighbors or surrounding community. Additionally, describe how the business will react and respond to complaints specifically related to noise, light, odor, public consumption, loitering, littering, and vehicle and pedestrian traffic.

2. Describe the policies that you would implement, and how you would enforce these policies, to ensure your cannabis products do not end up in the hands of underage youth.

3. Describe the steps you have taken to get to know the Healdsburg community. Provide a detailed description of the neighborhood in which you are seeking to open a cannabis retail business, and how your business will contribute positively to the surrounding area.

4. Describe steps that the business will take to minimize any negative environmental impacts of the retail operation, including greenhouse gas emissions, vehicle miles travelled, excessive product packaging, energy and water utilization, and other impacts.

9.A.a
Packet Pg. 498 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 12 SECTION F: COMMUNITY BENEFITS AND EQUITY PLAN (400 points)

1. Describe the benefits that the business will provide to the local community, for example by directly aiding, participating in, or funding the work of local non-profits, communitybased organizations, civic organizations, or social services organizations (“Community Organizations”). Note: Applicants should not identify any specific Community Organization at this time, or provide commitment letter(s) from local Community Organizations in the Application submittal. This section is only intended to capture the overall commitment of Applicants to fund or support local community-based activity in general.

2. Identify the minimum wage that will be offered to employees of the proposed business, excluding tips and gratuities. If entry-level employees are salaried, the Applicant should divide the minimum annual salary by 2,087 hours to arrive at an hourly rate.

3. Identify the benefits that will be provided to employees, including but not limited to health care, vacation, and medical leave, to the degree they are offered as part of employment.

4. Describe the Applicant’s plans for local outreach to City of Healdsburg residents for open positions, and any other actions proposed by the Applicant that are intended to benefit the local workforce and/or Applicant’s local employees.

5. Identify the total number of paid community service volunteer hours that will be provided, if any, to each employee per year.

6. Describe how the business will secure supplies and equipment from local sources.

SECTION G: PROPOSED SITE PLAN (400 points)

1. Provide the following information about the existing site:

A. Physical address;
B. Narrative description of the existing site, including building(s), parking spaces, driveways, pedestrian sidewalks/rights-of-way,
C. Photographs of the existing property and building(s); i. Note: Photographs of building interior are not required.

D. Description of how the site is currently being used; E. Description of any businesses currently operating on the parcel (if any), and any parcels directly adjacent to the existing site.

2. Provide the following information about the proposed site:

A. A site plan, drawn to scale, of the proposed business showing perimeter fencing, driveways, streets, property lines, buildings, parking areas, and outdoor areas.

B. A narrative description of proposed site improvements, including façade rehabilitation, building expansion, parking, landscaping, fencing, or other exterior site improvements;
i. Note: Descriptions of interior site improvements are not a requirement of this section.

C. Visual depictions of the proposed exterior of the cannabis business.

9.A.a
Packet Pg. 499 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application 13 3. Describe how the proposed modifications and utilization of the site for cannabis retail activity will impact the public health, safety, welfare, environmental quality, and/or quality of life in the surrounding area.

9.A.a
Packet Pg. 500 Attachment: Attachment A: DRAFT Application Procedures and Guidelines (3910 : Provide Feedback on Cannabis Dispensary Application

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: March 20, 2023
SUBJECT: Retail Cannabis Fee Discussion
PREPARED BY: Andrew Sturmfels, Assistant City Manager
STRATEGIC INITIATIVE(S):

Establish Proactive Policies/Programs to Continue to Promote Economic Diversity & Sustainable Growth
RECOMMENDED ACTION(S):

1. Receive a presentation from City staff; and

2. Provide direction to staff to return to Council with a resolution establishing appropriate fees to recover costs associated with regulation of the retail cannabis industry.

COMMUNITY ENGAGEMENT/OUTREACH:

This discussion item is part of a properly noticed City Council meeting where opportunity for public participation is available. Previous efforts to engage the community on developing a cannabis business program include a public workshop, multiple publicly noticed meetings, a community survey, and a voter initiative placed in the 2022 ballot.

BACKGROUND:

The City of Healdsburg is in the process of implementing a cannabis business program that would authorize two retail dispensaries selected through a competitive process. To appropriately recover staff and consultant costs associated with developing and implementing the program, City staff are proposing to establish fees for the retail dispensary permit application. The fees would recover costs associated with the retail cannabis application process, appeals, background checks, and zoning clearance letters.

Staff will return to Council at a later date to discuss establishing permit application fees for nonstorefront commercial medicinal retailer (delivery only), non-volatile manufacturing, distribution, and testing laboratory.

DISCUSSION/ANALYSIS:

Under existing State law, the City may recover up to 100% of the estimated reasonable cost of

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providing discretionary services through the imposition of fees. To date, staff have invested significant time into developing the discretionary cannabis business program. The City will continue to invest time and money through the retail cannabis application process, licensing, inspection, and other regulatory processes. The proposed fees are necessary to offset City costs associated with regulating cannabis businesses in Healdsburg. Proposed fee amounts are based upon the costs reasonably borne by the City to effectuate the proposed Chapter 20.20.095 of the Healdsburg Municipal Code (HMC), relating to the authorization and regulation of commercial cannabis uses.

Full cost recovery through fees would allow the City to charge cannabis businesses directly for the discretionary services that they receive from the City. Without establishing new fees, the City would be subsidizing the cannabis program with general City tax revenues, which may result in service reductions to other General Fund programs.

Retail Commercial Cannabis Permit Application Fee
Proposed Chapter 20.20.095 of the HMC establishes a commercial cannabis permit application process, which must be completed prior to issuance of a commercial cannabis permit. The application process will check for property owner authorization of the commercial cannabis use, business entity formation, business owner identification, operating plan compliance, security information, proof of insurance, and other regulatory requirements. Costs associated with design and implementation of the application process include:
• Development of application forms and instructions
• Intake, processing, and review of application materials • Notification of missing materials and processing of supplemental information • Pre-permitting inspections
• Other general administrative functions
City staff have prepared two alternatives for Council Consideration for the retail commercial cannabis application fee. Both fees are based on receiving 10 applications for a retail dispensary and/or microbusiness, which staff feel is an appropriate estimate based on interest to date. The first option, included as Attachment A, contemplates full cost recovery for the development of the commercial cannabis program, including City staff time spent on the development of the Ordinance and Municipal Code amendments. The per applicant fee under Alternative One would be $19,680.70. In addition to the costs incurred to establish the regulatory program, this cost is based upon the estimated staff time, consultant costs, and other expenses necessary to design and implement the retail commercial cannabis application process. In addition to the application fee, businesses will be expected to pay standard zoning, building permit, inspection and other landuse fees normally associated with commercial construction in Healdsburg.

To ensure equitable opportunities for participation in the process, staff also developed a second alternative, included as Attachment B. Alternative Two considers the costs associated with developing the Ordinance and Municipal Code amendments as sunk costs and focuses application fee only on costs associated with developing and administering the competitive application process. The per applicant fee under this scenario would be $10,060.46. This cost is based upon the estimated staff time, consultant costs, and other expenses necessary to design and

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Packet Pg. 502
implement the retail commercial cannabis application process. In addition to the application fee, businesses will be expected to pay standard zoning, building permit, inspection and other landuse fees normally associated with commercial construction in Healdsburg.

Staff reviewed other Sonoma County Jurisdictions and found the following application fees listed in their Master Fee Schedules for dispensary permits:

Jurisdiction Application Fee
Cloverdale $ 5,182.00
Sonoma (City) $ 9,797.00
Santa Rosa $ 13,991.00
Cotati $ 6,943.00
It’s important to note that each jurisdiction has a different approach to their retail cannabis application process – so while the local comparisons are helpful, they are not a perfect apple to apples comparison of costs.

Commercial Cannabis Annual Regulatory Fee
Many communities additionally choose to establish a fee to cover the ongoing oversight of the commercial cannabis industry, which would include costs for the City Manager’s Office, Community Development Department, Finance Department, Police Department, and other City Departments. Ongoing regulatory activities typically include, but are not limited to:
• Policy development and program management
• Public outreach and education
• Administrative enforcement
• Coordination with state agencies
• Public safety
• Other oversight activities
The annual regulatory fee per retail cannabis licensee could be up to $18,500 per year to fully recover ongoing staff costs associated with the program. Staff are not proposing to establish an annual regulatory fee at this time. Revenues from the voter approved Cannabis Business Tax are anticipated to exceed the annual program costs. Staff are seeking direction from Council as to if the City should establish an annual regulatory fee to recover ongoing program management costs or use a portion of the Cannabis Business Tax revenues to support regulation.

Other Fees
Additional commercial cannabis fees are necessary to offset the cost of providing services to cannabis businesses. A summary of the fees and costs are provided in Attachment C. A summary of these fees is provided below:
• Cannabis Appeal Process Fee – Cannabis business permit denials are subject to appeal.

Businesses wishing to appeal an application denial will be charged a non-refundable appeal fee in the amount of $5,471 to recover the City’s cost to administer the appeal process. The main driver for the cost is staff’s proposal to use a third-party hearing

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officer to adjudicate any appeals. Staff believe this is an important component in ensuring a fair process for all applicants.
• Zoning Clearance Letter – Applicants will need to obtain a Zoning Clearance Letter from the City as part of their application process to ensure their proposed location meets established criteria. Staff recommend this fee be $113.14 based on the cost to complete this process.

Staff are seeking feedback on the proposed fee structure. Staff will return to a subsequent City Council meeting requesting Council action to adopt proposed fees consistent with Council feedback.

ENVIRONMENTAL STEWARDSHIP:

Not Applicable
ALTERNATIVES:

The purpose of this item is to present the draft fee proposal to City Council and receive feedback.

Staff will bring forward a final proposal at a future meeting.

FISCAL IMPACT:

The purpose of these application fees is to offset consultant and City staff time costs for administering the permit process for retail commercial cannabis uses. The total fiscal impact of the proposed fees will depend upon the number of cannabis applicants and permittees in the City.

Based upon current estimates, it is expected that the application fee will generate approximately $196,807 in one-time General Fund revenues under a full cost recovery approach and $100,605 under a cost recovery approach focused only on the application process.

ENVIRONMENTAL ANALYSIS:

Pursuant to California Environmental Quality Act (“CEQA”) and Title 14, the California Code of Regulations Section 15378(b)(2), the recommended action is administrative in nature and does not qualify as a “Project” under CEQA. Therefore, no further CEQA or environmental review is required.

ATTACHMENT(S):

Attachment A - Retail Cannabis Application Fee Alternative 1 Attachment B - Retail Cannabis Application Fee Alternative 2 Attachment C - Retail Cannabis Application Other Fees

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Healdsburg Application Process Cost Analysis

ASSUMPTIONS
Est. # Applications: 10
Loaded rates:

Dep Position Department Fully Loaded Cost
CM City Manager City Manager's Office $162.38
CM Assistant City Manager City Manager's Office $124.68 CD Community Development DirectoCommunity Development Department $113.14 CA City Attorney (Contract) City Attorney's Office $318.00 PD Police Chief Police Department $160.42
CM Adminitrative Analyst II City Manager's Office $65.03 CD Senior Planner Community Development Department $81.48

APPLICATION FEE

PROCESS DESCRIPTION HOURS FREQUENCY POSITION DEPT RATE HOURS/APP UNIT TOTAL (ESTIMATED) PER APPLICATON City of Healdsburg Staff
Community outreach, policy/administrative development, and overall design of program. 80 Total Hours Assistant City Manager CM $124.68 8.00 One-Time $ 9,974.40 $ 997.44 Legal support for ordinance development, adoption and implementation of cannabis regulatory program.
200 Total Hours City Attorney (Contract) CA $318.00 20.00 One-Time $ 63,600.00 $ 6,360.00 Ordinance development, buffer map design, and other planning/administrative functions 200 Total Hours Community Development Director CD $113.14 20.00 One-Time $ 22,628.00 $ 2,262.80 20 Total Hours Assistant City Manager CM $124.68 2.00 One-Time $ 2,493.60 $ 249.36 20 Total Hours Community Development Director CD $113.14 2.00 One-Time $ 2,262.80 $ 226.28 Development of cannabis website, including FAQ and other updates before and during application window. 20 Total Hours Adminitrative Analyst II CM $65.03 2.00 Receive and process applications by mail or in person. 0.25 Hours/Application Senior Planner CM $81.48 0.25 Application $ 203.70 $ 20.37 Notification of missing application materials, and processing of supplementary information provided by businesss with incomplete applications. 0.75 Hours/Application Senior Planner CM $81.48 0.75 Application $ 611.10 $ 61.11

0.5 Hours/Application Assistant City Manager CM $124.68 0.50 Application $ 623.40 $ 62.34

0.5 Hours/Application City Manager CM $162.38 0.50 Application $ 811.90 $ 81.19 Participation in applicant interviews (3 panelists, blended loaded rates) 6 Hours/Application Multiple Blended Rates N/A $122.19 6.00 Application $ 7,331.60 $ 733.16 Final high level review of cannabis buisness permit application Phase III scores. Preparation of final applicant selection materials for City Council approval. 4 Hours/Application Assistant City Manager CM $124.68 4.00 Application $ 4,987.20 $ 498.72 Presentation of final applicants to City Council. 1 Hours/Application Assistant City Manager CM $124.68 1.00 Application $ 1,246.80 $ 124.68 Local Authorization Respond to requests from State agency to verify "local authorizaton" of cannabis applicants for state license. Verify State agency has issued a state license. 0.5 Total Hours Adminitrative Analyst II CM $65.03 0.05 One-Time $ 32.52 $ 3.25 Consultant Services
Consulting Services
Coordination with City Attorney and Deputy City Manager on development of draft cannabis application procedures, development of fee study, assistance with City Council presentations, and other cannabis consulting services.

N/A Flat Rate Consultant N/A $20,000.00 N/A One-Time $ 20,000.00 $ 2,000.00 Application Review/Interview Check for completeness and quality assurance review of cannabis business license applications, facilitation of applicant interviews and City Manager final selection. N/A Per Application Consultant N/A $6,000.00 N/A Application $ 60,000.00 $ 6,000.00 Pre-License Site Inspections Inspect cannabis facility for regulatory compliance prior to licensure. Includes lighting, security, signage, security cameras, inventory control, product storage, etc. N/A Flat Rate Consultant N/A $4,000.00 N/A One-Time $ 4,000.00 $ 400.00 Total Per Application $ 196,807.02 $ 19,680.70
Application Selection
General Administration
Application Design
Application
Intake/Review/Interview
Review/approval of application forms and instructions. Development/presentation of resolution to City Council.

Final high level review of cannabis business permit applications Phase II scores.

ATTACHMENT A Page 2
Attachment A: Retail Cannabis Application Fee Alternative 1 9.B.a Packet Pg. 505 Attachment: Attachment A - Retail Cannabis Application Fee Alternative 1 (3909 : Provide Feedback on Retail Cannabis Permit Application Fees) aldsburg Application Process Cost Analysis

UMPTIONS
# Applications: 10
ded rates:

Position Department Fully Loaded Cost
City Manager City Manager's Office $162.38
Assistant City Manager City Manager's Office $124.68
Community Development Director Community Development Department $113.14 City Attorney (Contract) City Attorney's Office $318.00 Police Chief Police Department $160.42
Adminitrative Analyst II City Manager's Office $65.03
Senior Planner Community Development Department $81.48

APPLICATION FEE

PROCESS DESCRIPTION HOURS FREQUENCY POSITION DEPT RATE HOURS/APP UNIT TOTAL (ESTIMATED) PER APPLICATON City of Healdsburg Staff
Community outreach, policy/administrative development, and overall design of program. 0 Total Hours Assistant City Manager CM $124.68 0.00 One-Time $ - $ - Legal support for ordinance development, adoption and implementation of cannabis regulatory program. 0 Total Hours City Attorney (Contract) CA $318.00 0.00 One-Time $ - $ - Ordinance development, buffer map design, and other planning/administrative functions 0 Total Hours Community Development Director CD $113.14 0.00 One-Time $ - $ - 20 Total Hours Assistant City Manager CM $124.68 2.00 One-Time $ 2,493.60 $ 249.36 20 Total Hours Community Development Director CD $113.14 2.00 One-Time $ 2,262.80 $ 226.28 Development of cannabis website, including FAQ and other updates before and during application window. 20 Total Hours Adminitrative Analyst II CM $65.03 2.00 Receive and process applications by mail or in person. 0.25 Hours/Application Senior Planner CM $81.48 0.25 Application $ 203.70 $ 20.37 Notification of missing application materials, and processing of supplementary information provided by businesss with incomplete applications. 0.75 Hours/Application Senior Planner CM $81.48 0.75 Application $ 611.10 $ 61.11

0.5 Hours/Application Assistant City Manager CM $124.68 0.50 Application $ 623.40 $ 62.34

0.5 Hours/Application City Manager CM $162.38 0.50 Application $ 811.90 $ 81.19 Participation in applicant interviews (3 panelists, blended loaded rates) 6 Hours/Application Multiple Blended Rates N/A $122.19 6.00 Application $ 7,331.60 $ 733.16 Final high level review of cannabis buisness permit application Phase III scores. Preparation of final applicant selection materials for City Council approval. 4 Hours/Application Assistant City Manager CM $124.68 4.00 Application $ 4,987.20 $ 498.72 Presentation of final applicants to City Council. 1 Hours/Application Assistant City Manager CM $124.68 1.00 Application $ 1,246.80 $ 124.68 Local Authorization Respond to requests from State agency to verify "local authorizaton" of cannabis applicants for state license. Verify State agency has issued a state license. 0.5 Total Hours Adminitrative Analyst II CM $65.03 0.05 One-Time $ 32.52 $ 3.25 Consultant Services
Consulting Services
Coordination with City Attorney and Deputy City Manager on development of draft cannabis application procedures, development of fee study, assistance with City Council presentations, and other cannabis consulting services.

N/A Flat Rate Consultant N/A $20,000.00 N/A One-Time $ 20,000.00 $ 2,000.00 Application Review/Interview Check for completeness and quality assurance review of cannabis business license applications, facilitation of applicant interviews and City Manager final selection. N/A Per Application Consultant N/A $6,000.00 N/A Application $ 60,000.00 $ 6,000.00 Pre-License Site Inspections Inspect cannabis facility for regulatory compliance prior to licensure. Includes lighting, security, signage, security cameras, inventory control, product storage, etc. N/A Flat Rate Consultant N/A $4,000.00 N/A One-Time $ 4,000.00 $ 400.00 Total Per Application $ 100,604.62 $ 10,060.46
Application Selection
General Administration
Application Design
Review/approval of application forms and instructions. Development/presentation of resolution to City Council.

Application Intake/Review/Interview
Final high level review of cannabis business permit applications Phase II scores.

Attachment B: Retail Cannabis Application Fee Alternative 2

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Packet Pg. 506 Attachment: Attachment B - Retail Cannabis Application Fee Alternative 2 (3909 : Provide Feedback on Retail Cannabis Permit Application Fees) Other Fees: Healdsburg Additional Regulatory Cost Analysis ASSUMPTIONSEst. # Appeals 2Loaded rates:Dep Position Department Fully Loaded CostCM Assistant City Manager City Manager's Office $124.68CD Director of Community Development Community Development Department $113.14 CA City Attorney (Contract) City Attorney's Office $318.00 CM Senior Planner City Manager's Office $81.48
N/A Hearing Officer Contract $250.00

PROCESS DESCRIPTION POSITION DEPT RATE HOURS UNIT PER APPEAL Development of appeal process. Assistant City Manager CM $124.68 3 One‐Time $ 187.02 Development of appeal form for applicants to challenge application, buffer measurement, or other processes. Senior Planner CM $81.48 2 One‐Time $ 81.48 Assistant City Manager CM $124.68 2 Appeal $ 249.36
Consultant N/A $250.00 6 Appeal $ 1,500.00
Provide legal assistance with applicant appeal process. City Attorney (Contract) CA $318.00 3 Appeal $ 954.00 Review administrative appeal materials and reverse/sustain decision. Hearing Officer N/A $250.00 10 Appeal $ 2,500.00 Per Appeal $ 5,471.86

PROCESS DESCRIPTION POSITION DEPT RATE HOURS UNIT PER OWNER Zoning Clearance Letter Receiving request, reviewing location criteria, issuing letter. Director of Community Development CD $113.14 1.00 Review $ 113.14 Per Zoning Clearance Letter Review $ 113.14

APPEAL PROCESS FEE
Appeal Process Preparation and testimony during appeal.ZONING CLEARANCE LETTER ATTACHMENT A Page 4
Attachment C: Other Fees 9.B.c
Packet Pg. 507
Attachment: Attachment C - Retail Cannabis Application Other Fees (3909 : Provide Feedback on Retail Cannabis Permit Application Fees) 3/14/2023 – Page 1

CITY OF HEALDSBURG

CITY COUNCIL FUTURE AGENDA ITEMS
(NOTE: The schedule is tentative and subject to change pending final publication and posting of the City Council meeting agenda) April 3, 2023 Domestic Violence Awareness Month Proclamation Employee Anniversaries
Fire Department Annual Update
Land Use Code Amendments and Application Process Discussion for Cannabis Policy – 2 nd reading
Saggio Hill Affordable Housing Development Agreement 2023-01 North Village – 4th Development Agreement Amendment
Resolution to Comply with State Housing Laws
Cannabis Business Tax
Budget Amendment and Contract for Improvements to Facilitate Preschool at the Community Center L&M Village Quarterly Update
Fiscal Year 2023-2024 City Council Goals
Community Services Commissions, Composition and Roles
Mayors’ & Councilmembers’ City Selection & Board of Director Appointments April 17, 2023 Marie Sparks Annual Award
Healdsburg Jazz Request for Road Closure on June 17, 2023 Healdsburg Farmers' Market Request for Road Closures and Consumption of Alcohol for the 2023 Season Transportation Development Act Article 3 (TDA3) Pedestrian and Bicycle Project Healdsburg Future Farmers Country Fair Request for Road Closures and Alcohol Consumption Healdsburg Farmers' Market Request for Road Closures and Consumption of Alcohol for Tuesday Markets Community Services Request for Road Closures for Tuesdays in the Plaza Rotary Club of Healdsburg Sunrise Request for Road Closures on July 4, 2023 Fitch Mountain Public Access Improvements Phase A Bid Award Community Services Request for Road Closure for Art After Dark

13.1.a
Packet Pg. 508 Attachment: Agenda Planning Sheet (3985 : Future Agenda Items - March 20, 2023) 3/14/2023 – Page 2
Boys & Girls Club Request to Restrict Access to Plaza Park for Healdsburg Crush 2023 Annual Water Supply Update as Required by the 2020 Urban Water Management Plan Three North Street: Foley Family Pavilion Easements and Budget Amendments Three North Street: Foley Family Pavilion GPA, LUCA, MND Update on Climate Mobilization Strategy
Updated Draft Cannabis Dispensary Application Process, Scoring and Criteria Adopt Cannabis Business Tax Rate for Fiscal Years 2022-23 and 2023-24 Presentation of Electric Department Cost of Service Analysis and discussion of rate setting May 1, 2023 National Day of Awareness for Missing and Murdered Indigenous Women on May 5th, 2023 Proclamation Cornelia de Lange Syndrome Awareness Day
Amend Special Event Policy and Chapter 12.24 of Municipal Code Prune Packers Request for Alcohol Consumption for 2023 Baseball Season Redcom Contract Approval
Housing Element Update
May 15, 2023 Professional Services Agreement for Design Services for Healdsburg Avenue Professional Services Agreement with St. Paul’s Episcopal Church for the Healdsburg Shower Ministry Quarter Three Financial Update
June 5, 2023 Elder Abuse Awareness Month Proclamation
Consideration of Electric Rate Increases for Fiscal Years 2024, 2025, 2026, & 2027 June 20, 2023 Diversity, Equity, and Inclusion Plan Development Update Professional Services Agreement with the Chamber of Commerce August 7, 2023 Review Draft Climate Mobilization Strategy (NOTE: The schedule is tentative and subject to change pending final publication and posting of the City Council meeting agenda)

13.1.a
Packet Pg. 509 Attachment: Agenda Planning Sheet (3985 : Future Agenda Items - March 20, 2023)