Lakeport City Council
November 19, 2024

Project: Lakeport Navigation Center
Date: 7/19/24
DRAFT
ID Task Name Duration Start Finish
39 Mobilization 5 days 3/6/26 3/12/26
40 Demo 5 days 3/13/26 3/19/26
41 Site Improvements 25 days 3/20/26 4/23/26
42 Paving & Flatwork 40 days 4/24/26 6/18/26
43 Slurry Seal Existing Paving 10 days 6/5/26 6/18/26
44 Re-Stripe Entire Lot 8 days 6/19/26 6/30/26
45 Irrigation & Planting 10 days 6/19/26 7/2/26
46 Move-In & Closeout 25 days 3/5/27 4/8/27
47 FF&E 20 days 3/5/27 4/1/27
48 Move-In 5 days 4/2/27 4/8/27

J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M Half 2, 2024 Half 1, 2025 Half 2, 2025 Half 1, 2026 Half 2, 2026 Half 1, 2027 Task
Split
Milestone
Summary
Project Summary
Inactive Task
Inactive Milestone
Inactive Summary
Manual Task
Duration-only
Manual Summary Rollup
Manual Summary
Start-only
Finish-only
External Tasks
External Milestone
Deadline
Progress
Manual Progress

Project: Lakeport Navigation Center
Date: 7/19/24
DRAFT
City of Lakeport Navigation Center
Feasibility Study
October 22, 2024 195
End of Report
DRAFT
1 City of Lakeport

NAVIGATION CENTER
Feasibility Study
Presentation to
Lakeport City Council
November 19, 2024
Team Introduction
2 Lakeport Navigation Center
City of Lakeport
Vanir
Community Partners County of Lake & Stakeholders
DBGI (Real Estate) KMP Strategies
(Public Outreach)
Project Introduction
• City of Lakeport’s Plan for a New LowBarrier Navigation Center (LBNC) • Homelessness in Lakeport – 2024 PIT
• Comprehensive Feasibility Study
• Collaborative Teamwork
• Roadmap to Developing a LBNC
3 Lakeport Navigation Center
Assessing the Need
• Causes and Effects of Homelessness
in Lakeport
• Forecasting Future Homeless Needs
in Lakeport
• Multi-Pronged Approach for a LBNC
• Physical Needs for a LBNC
4 Lakeport Navigation Center
Engaging the Public and
Stakeholders
• Public Outreach Approach & Program
• City Webpage Development
• Community Feedback – Online Survey
• Small Group Stakeholder Meetings
5 Lakeport Navigation Center
Identifying Potential Sites and
Development Strategies
• Property Search Criteria
• Properties Evaluated
• Property Selection Recommendations
• Recommended Space Program
6 Lakeport Navigation Center
Financial Analysis
• Project Development Cost Estimate
• Operating Cost
• Potential Revenue & Funding Sources
• Risk Analysis
7 Lakeport Navigation Center
Project Schedule
• Project Delivery Method
• Project Timeline
• Project Schedule & Cost Escalation
8 Lakeport Navigation Center
Program/Services Plan
Development
• Core & Supportive Services
• Legal Services
• Specialized Services
• Transitional and Employment Services
• Permanent Housing Allocation
9 Lakeport Navigation Center
Assessing Potential Impacts
• Potential Impacts of a LBNC to
Community
• Improving Public’s Negative
Perception through Public Outreach
10 Lakeport Navigation Center
11 Lakeport Navigation Center
Questions ?
Meeting Date: 11/19/2024 Page 1 Agenda Item #VII.A.1.

CITY OF LAKEPORT
City Council
City of Lakeport Municipal Sewer District
Lakeport Industrial Development Authority
Municipal Financing Agency of Lakeport

STAFF REPORT
RE: First Reading of an Ordinance Adding Chapter 5.40, Tobacco Retailer License to Title 5 of the Lakeport Municipal Code MEETING DATE: 11/19/2024
SUBMITTED BY: Kevin M. Ingram, City Manager
PURPOSE OF REPORT: Information only Discussion Action Item WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD:

The City Council is requested to review and consider the adoption of an Ordinance Adding Chapter 5.40, Tobacco Retailer License to Title 5 of the Lakeport Municipal Code.

BACKGROUND/DISCUSSION:

Lake County faces significant health challenges, including a high rate of tobacco use. Tobacco use and vaping are prevalent among even younger populations and is a significant problem in our school system. In September the Council received a presentation from Lake County Public Health regarding their recently adopted ordinance establishing a tobacco retail license program. The presentation also detailed their efforts to secure a grant for a tobacco enforcement program aimed at ensuring compliance with existing California state laws on tobacco sales.

During that meeting, the City Council expressed support for establishing local tobacco retail regulations and partnering with Lake County Public Health to develop an enforcement program with a specific focus on reducing sales to minors. However, concerns were raised by a member Council that the penalties for first-time offenses outlined in the County’s ordinance might be unreasonably high.

The City has engaged in conversations with the County of Lake and the City of Clearlake to create consistent tobacco retailer regulations that can be implemented countywide by Lake County Public Health.

On August 16, 2024, the Lake County Board of Supervisors adopted an ordinance regulating tobacco retailers.

The proposed ordinance before the Council aligns closely with the County's ordinance but includes additional flexibility for enforcement responsibilities. Specifically, the ordinance designates the City Manager as responsible for enforcement. This designation allows the City Manager to delegate enforcement authority to any agency, department, or individual as approved by the City Council.

The ordinance also explicitly permits the City Council to enter into agreements with the County or other agencies to perform enforcement duties. City staff recommends contracting with Lake County Public Health to enforce and administer the ordinance. However, should the City choose to alter this arrangement in the future, the ordinance ensures that enforcement authority remains clearly under the City's jurisdiction.

This proposed approach provides flexibility while maintaining the necessary structure to effectively regulate tobacco retail activities and protect public health.

Meeting Date: 11/19/2024 Page 2 Agenda Item #VII.A.1.

OPTIONS:

1. The City Council may choose to introduce the ordinance and direct staff to set a public hearing for possible adoption on December 17, 2024.

2. The City Council may suggest amendments to the ordinance before adoption if there are concerns about specific provisions or procedures.

3. The City Council could decide not to adopt the ordinance which would leave the City without a tobacco retail license program.

4. Or alternatively, the Council may provide staff alternative direction.

FISCAL IMPACT:

None $ Budgeted Item? Yes No
Budget Adjustment Needed? Yes No If yes, amount of appropriation increase: $ Affected fund(s): General Fund Water OM Fund Sewer OM Fund Other:

Comments: No direct fiscal impact to the Lakeport budget.

COUNCIL PRIORITIES:
☒ Priority #1: Public Safety & Crisis Response
☐ Priority #2: Disaster Resiliency
☐ Priority #3: Good Governance & Fiscal Stability
☐ Priority #4: Capital Infrastructure Improvement
☒ Priority #5: Safe, Sustainable & Attractive Neighborhoods ☐ Priority #6: Economic Development
SUGGESTED MOTIONS:

Move to introduce an Ordinance adding Chapter 5.40, Tobacco Retailer License to Title 5 of the Lakeport Municipal Code and set a public hearing for December 17, 2024.

Attachments: 1. Draft Ordinance Adding Chapter 5.40, Tobacco Retailer License to Title 5 of the Lakeport Municipal Code.

2. Redlined Version of Draft Ordinance Highlighting Differences Between the Proposed City of Lakeport Ordinance and the County of Lake Ordinance 1 ORDINANCE NO. XX (2024)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKEPORT ADDING CHAPTER

5.40 TO TITLE 5 OF THE LAKEPORT MUNICIPAL CODE REQUIRING THE LICENSURE OF

TOBACCO RETAILERS, REGULATING THE SALE OF TOBACCO PRODUCTS, AND

DETERMINING THAT THIS ORDINANCE IS NOT SUBJECT TO THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT
WHEREAS, the City finds it necessary and desirable to regulate the retail sale of tobacco and tobacco products to protect the health, safety, and welfare of our residents.

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

SECTION 1. Code Adoption. Chapter 5.40 (“Tobacco Retailer License”) is hereby added to Title 5 of the Lakeport Municipal Code to read as follows:

5.40.010 Definitions.

The following words and phrases, whenever used in this chapter, shall have the meanings defined in this section unless the context clearly requires otherwise.

A. “Arm’s length transaction” means a sale in good faith and for valuable consideration that reflects the fair market value between two informed and willing parties, neither of which is under any compulsion to participate in the transaction.

B. “Child-resistant packaging” means packaging that meets the definition set forth in Code of Federal Regulations, title 16, section 1700.15(b), as in effect on January 1, 2015, and was tested in accordance with the method described in Code of Federal Regulations, title 16, section 1700.20, as in effect on January 1, 2015.

C. “Cigar” means any roll of tobacco other than a cigarette wrapped entirely or in part in tobacco or any substance containing tobacco and weighing more than 4.5 pounds per thousand.

D. “Cigarette” means: (1) any roll of tobacco wrapped in paper or in any substance not containing tobacco; and (2) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described herein.

E. “City manager” means the city manager of the city of Lakeport and designee, and any agency, department, or person designated to enforce or administer the provisions of this chapter pursuant to an agreement approved by the city council.

F. “Compliance checks” means systems the city manager uses to investigate and ensure that tobacco retailers are following and complying with the requirements of this chapter. Compliance checks may involve the use of persons between the ages of 18 and 20 who purchase or attempt to purchase tobacco products. Compliance checks may also be conducted by the city manager or 2 other units of government for educational, research, and training purposes or for investigating or enforcing federal, state, or local laws and regulations relating to tobacco products.

G. “Day” means a calendar day.

H. “Delivery sale” means the sale of any tobacco product to any person for personal consumption and not for resale when the sale is conducted by any means other than an inperson, over-the-counter sales transaction in a tobacco retail establishment. Delivery sale includes the sale of any tobacco product when the sale is conducted by telephone, other voice transmission, mail, the internet, or app-based service. Delivery sale includes delivery by licensees or third parties by any means, including curbside pick-up.

I. “Electronic smoking device” means any device that may be used to deliver any aerosolized or vaporized substance to the person inhaling from the device, including, but not limited to, an e-cigarette, e-cigar, e-pipe, vape pen, or e-hookah. Electronic smoking device includes any component, part, or accessory of the device, and also includes any substance that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine.

Electronic smoking device does not include drugs, devices, or combination products authorized for sale by the U.S. Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act.

J. “Flavored tobacco product” means any tobacco product that imparts a taste or odor distinguishable by an ordinary consumer, other than the taste or odor of tobacco, either prior to or during the consumption of such tobacco product, including but not limited to tastes or odors relating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, mint, wintergreen, menthol, herb, or spice; or a cooling or numbing sensation distinguishable by an ordinary consumer during the consumption of such tobacco product.

K. “Licensee” means a person granted a tobacco retailer’s license for the location at which tobacco retailing is to occur.

L. “Little cigar” means any roll of tobacco other than a cigarette wrapped entirely or in part in tobacco or any substance containing tobacco and weighing no more than 4.5 pounds per thousand. “Little cigar” includes, but is not limited to, tobacco products known or labeled as small cigar, little cigar, or cigarillo.

M. “Manufacturer” means any person, including any repacker or relabeler, who manufactures, fabricates, assembles, processes, or labels a tobacco product; or imports a finished tobacco product for sale or distribution into the United States.

N. “Moveable place of business” means any form of business that is operated out of a kiosk, truck, van, automobile or other type of vehicle or transportable shelter and not a fixed address store front or other permanent type of structure authorized for sales transactions. 3 O. “Person” means any natural person, partnership, cooperative association, corporation, personal representative, receiver, trustee, assignee, or any other legal entity.

P. “Proprietor” means a person with an ownership or managerial interest in a business. An ownership interest shall be deemed to exist when a person has a 10% or greater interest in the stock, assets, or income of a business other than the sole interest of security for debt. A managerial interest shall be deemed to exist when a person has or shares ultimate control over the day-to-day operations of a business.

Q. “Recreation facility” means an area, place, structure, or other facility that is used either permanently or temporarily for community recreation, even though it may be used for other purposes, and includes but is not limited to a gymnasium, playing court, playing field, and swimming pool.

R. “Sale” or “sell” means any transfer, exchange, barter, gift, offer for sale, or distribution for a commercial purpose, in any manner or by any means whatsoever.

S. “Self-service display” means the open display or storage of tobacco products in a manner that is physically accessible in any way to the general public without the assistance of the retailer or employee of the retailer and a direct face-to-face transfer between the purchaser and the retailer or employee of the retailer. A vending machine is a form of self-service display.

T. “Smoking” means inhaling, exhaling, burning, or carrying any lighted or heated cigar, cigarette, or pipe, or any other lighted or heated product containing, made, or derived from nicotine, tobacco, marijuana, or other plant, whether natural or synthetic, that is intended for inhalation. “Smoking” includes using an electronic smoking device.

U. “Tobacco product” means:

1. Any product containing, made of, or derived from tobacco or nicotine that is intended for human consumption or is likely to be consumed, whether inhaled, absorbed, or ingested by any other means, including but not limited to, a cigarette, a cigar, pipe tobacco, chewing tobacco, snuff, or snus;

2. Any electronic smoking device and any substances that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine; or

3. Any component, part, or accessory of (1) or (2), whether or not any of these contains tobacco or nicotine, including but not limited to filters, rolling papers, blunt or hemp wraps, hookahs, mouthpieces, and pipes.

V. “Tobacco product” does not mean drugs, devices, or combination products authorized for sale by the U.S. Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act.
4 W. “Tobacco retailer” means any person who sells, offers for sale, or exchanges or offers to exchange for any form of consideration, tobacco products. This definition is without regard to the quantity of tobacco products sold, offered for sale, exchanged, or offered for exchange.

X. “Tobacco retail” or “tobacco retailing” means engaging in the activities of a tobacco retailer.

5.40.020 General Requirements and Prohibitions.

A. Tobacco Retailer’s License Required. It shall be unlawful for any person to engage in tobacco retailing in the city without first obtaining and maintaining a valid tobacco retailer’s license for each location at which tobacco retailing is to occur. Tobacco retailing without a valid tobacco retailer’s license is a nuisance as a matter of law.

B. Lawful Business Operation. In the course of tobacco retailing or in the operation of the business or maintenance of the location for which a license issued, it shall be a violation of this chapter for a licensee, or any of the licensee’s agents or employees, to violate any local, state, or federal law applicable to the sale of tobacco products.

C. Smoking Prohibited. Smoking, including smoking for the purpose of sampling any tobacco product, is prohibited within the indoor area of any retail establishment licensed under this chapter. Smoking is also prohibited outdoors within 25 feet of any retail establishment licensed under this chapter.

D. Minimum Legal Sales Age. No person engaged in tobacco retailing shall sell a tobacco product to a person under 21 years of age.

E. Display of License. Each tobacco retailer license shall be prominently displayed in a publicly visible location at the licensed location.

F. Positive Identification Required. No person engaged in tobacco retailing shall sell a tobacco product to another person without first verifying by means of government-issued photographic identification that the recipient is at least 21 years of age.

G. Self-Service Displays Prohibited. Tobacco retailing by means of a self-service display is prohibited. All tobacco products must be stored behind the sales counter, in a locked case, in a storage unit, or in another area not freely accessible to the general public.

H. Distance From Youth Appealing Products. It is unlawful for a tobacco retailer to place or maintain, or cause to be placed or maintained, any displays containing tobacco products within five feet of toys, candy, snacks or non-alcoholic beverages inside a licensed retail establishment.

I. On-Site Sales. All sales of tobacco products shall be conducted in-person in the licensed location. It shall be a violation of this chapter for any tobacco retailer or any of the tobacco retailer’s agents or employees to engage in the delivery sale of tobacco products or to knowingly 5 or recklessly sell or provide tobacco products to any person that intends to engage in the delivery sale of the tobacco product in the city.

5.40.030 Sale of Flavored Tobacco Products Prohibited.

A. Flavored Tobacco Product Sales Prohibited. It shall be unlawful for any tobacco retailer to sell any flavored tobacco product.

B. Presumptive Flavored Tobacco Product. A public statement or claim made or disseminated by the manufacturer of a tobacco product, or by any person authorized or permitted by the manufacturer to make or disseminate public statements concerning such tobacco product, that such tobacco product has a taste or smell other than tobacco shall constitute presumptive evidence that the tobacco product is a flavored tobacco product.

5.40.040 Tobacco Product Pricing and Packaging.

A. Packaging and Labeling. No tobacco retailer shall sell any tobacco product to any consumer unless the tobacco product: (1) is sold in the manufacturer’s packaging intended for sale to consumers; (2) conforms to all applicable federal labeling requirements; and (3) conforms to all applicable child-resistant packaging requirements.

B. Display of Price. The price of each tobacco product offered for sale shall be clearly and conspicuously displayed on the tobacco product or on any related shelving, posting, advertising, or display at the location where the item is sold or offered for sale.

C. Distribution of Tobacco Samples or Promotional Items. It is unlawful for any person to distribute free or nominally priced tobacco products.

5.40.050 Limits on Eligibility for a Tobacco Retailer License.

A. Mobile Vending. No license may issue to authorize tobacco retailing at other than a fixed location. No tobacco retail license will be issued to a moveable place of business.

B. Licensed Cannabis Businesses. No license may issue, and no existing license may be renewed, to authorize tobacco retailing at a location licensed for commercial cannabis activity by the State of California.

5.40.060 Application Procedure.

A. An application for a tobacco retailer’s license shall be submitted in the name of each proprietor proposing to conduct retail tobacco sales and shall be signed by each proprietor or an authorized agent thereof. All applications shall be submitted on a form supplied by the city manager.

B. A license issued contrary to this chapter, contrary to any other law, or on the basis of false or misleading information shall be revoked pursuant to Section 5.40.130(C). Nothing in this 6 chapter shall be construed to vest in any person obtaining and maintaining a tobacco retailer’s license any status or right to act as a tobacco retailer in contravention of any provision of law.

C. Applicant submissions shall contain the following information:

1. The name, address, and telephone number of each proprietor of the business seeking a license.

2. The business name, address, and telephone number of the location for which a license is sought.

3. The name and mailing address authorized by each proprietor to receive all communications and notices required by, authorized by, or convenient to the enforcement of this chapter.

4. Proof that the location for which a tobacco retailer’s license is sought has been issued all necessary state and local licenses for the sale of tobacco products.

5. Whether or not any proprietor or any agent of the proprietor has admitted violating, or has been found to have violated, this chapter or any other local, state, or federal law governing the sale of tobacco products and, if so, the dates and locations of all such violations within the previous five (5) years.

6. Such other information as the city manager deems necessary for the administration or enforcement of this chapter as specified on the application form required by this section.

D. A licensed tobacco retailer shall inform the city manager in writing of any change in the information submitted on an application for a tobacco retailer’s license within thirty (30) days of a change.

5.40.070 License Issuance or Denial.

A. Issuance of License. Upon the receipt of a complete and adequate application for a tobacco retailer’s license and the license fee required by this chapter, the city manager may approve or deny the application for a license, or it may delay action for a reasonable period of time to complete any investigation of the application or the applicant deemed necessary.

B. Denial of Application. The city manager may deny an application for a tobacco retailer’s license based on any of the following:

1. The information presented in the application is inaccurate or false. Intentionally supplying inaccurate or false information shall be a violation of this chapter;

2. The application seeks authorization for tobacco retailing at a location for which the city prohibits a license to be issued;
7 3. The application seeks authorization for tobacco retailing for a proprietor to whom this chapter prohibits a license to be issued; or

4. The application seeks authorization for tobacco retailing in a manner that is prohibited pursuant to this chapter, that is unlawful pursuant to any other chapter of this Code, or that is unlawful pursuant to any other law; or

5. Any other any other reason the granting of a license to the applicant that is not consistent with the requirements of this chapter, including the applicant’s history of noncompliance with this chapter and other laws relating to the sale of tobacco products.

5.40.080 License Renewal and Expiration.

A tobacco retailer’s license is invalid if the appropriate fee has not been timely paid in full or if the term of the license has expired. The term of a tobacco retailer license is one (1) year. Each tobacco retailer shall apply for the renewal of their tobacco retailer’s license and submit the license fee no later than thirty (30) days prior to expiration of the current license. A retailer that fails to timely submit a renewal application and fee is ineligible for license renewal and must submit a new application pursuant to Section 5.40.060.

5.40.090 Licenses Not Transferrable, Past Violations at Retail Location.

A. Licenses Not Transferable. A tobacco retailer’s license may not be transferred from one person to another or from one location to another. A new tobacco retailer’s license is required whenever a tobacco retailing location has a change in proprietors.

B. Past Violations. Notwithstanding any other provision of this chapter, prior violations at a location shall continue to be counted against a location and license ineligibility periods shall continue to apply to a location unless:

1. The location has been transferred to new proprietor(s) in an arm’s length transaction; and

2. The city manager determines that there is adequate documentary evidence submitted by the new proprietor(s) establishing that the new proprietor(s) have acquired the location in an arm’s length transaction.

5.40.100 License Conveys a Limited, Conditional Privilege.

Nothing in this chapter shall be construed to grant any person obtaining and maintaining a tobacco retailer’s license any status or right other than the limited conditional privilege to act as a tobacco retailer at the location in the city identified on the face of the permit. Nothing in this chapter shall be construed to render inapplicable, supersede, or apply in lieu of, any other provision of applicable law.
8 5.40.110 Fee for License.

The fee to issue or to renew a tobacco retailer’s license shall be established by resolution of the city council and shall be reviewed with the master fee schedule. The fee shall be calculated so as to recover the total cost of administration and enforcement of this chapter, including, but not limited to, issuing a license, administering the license program, retailer education, retailer inspection and compliance checks, documentation of violations, and prosecution of violators, ensure the licensee has a hazardous waste management plan for disposal of tobacco product waste, but shall not exceed the cost of the administration and enforcement of this chapter. All fees and interest upon proceeds of fees shall be used exclusively to fund the administration and enforcement of this chapter. Fees are nonrefundable except as may be required by law.

5.40.120 Compliance Monitoring.

A. Compliance with this chapter may be monitored by the city manager or any law enforcement agency. In addition, the city manager may designate additional persons to monitor compliance with this chapter.

B. All licensed premises must be open to inspection by the city manager or designated persons during regular business hours. At the conclusion of any premise inspection, the license holder shall be provided a report, which, among other things, shall note any documented violations and provide the license holder no greater than fourteen (14) days to cure such violations. Any corrections shall be verified via documentation submitted by the license holder and/or in a subsequent inspection after the period to cure has lapsed.

C. Prior to the city manager’s approval or denial of an application for a license, the city manager shall inspect each proposed location for which a complete application for a tobacco retail license is submitted and a nonrefundable application fee has been paid.

D. The city manager shall endeavor to inspect each tobacco retailer at least one time per 12- month period to ensure compliance with this chapter.

E. The city manager may conduct compliance checks based on allegations of violations received from the public, as resources allow. In collaboration with law enforcement, compliance checks may involve the participation of persons between the ages of 18 and 20 to enter licensed premises to attempt to purchase tobacco products.

F. Nothing in this section shall create a right of action in any licensee or other person against the city or its agents.

5.40.130 Suspension or Revocation of License.

A. Fines, Suspension or Revocation of License for Violation. In addition to any other penalty authorized by law, the following penalties shall be imposed on a tobacco retailer or licensee if the city manager finds, after the licensee is afforded notice and an opportunity to be heard, that 9 the licensee, or any of the licensee’s agents or employees, have violated any of the requirements, conditions, or prohibitions of Sections 5.40.020 through 5.40.050 of this chapter.

1. Upon a finding by the city manager of a first violation at a location, the license shall be suspended for thirty (30) days and the tobacco retailer shall pay a $1000 fine.

2. Upon a finding by the city manager of a second violation at a location within any 60-month period, the license shall be suspended for ninety (90) days and the tobacco retailer shall pay a $2500 fine.

3. Upon a finding by the city manager of a third violation at a location within any 60- month period, the license shall be suspended for one-hundred and twenty (120) days and the tobacco retailer shall pay a $5000 fine.

4. Upon a finding by the city manager of four or more violations at a location within any 60-month period, the license shall be revoked, and no new license shall issue for the licensee until five (5) years have passed from the date of revocation.

B. Appeal of Suspension or Revocation. A decision of the city manager to impose penalties under Section 5.40.130(A) is appealable to a third-party hearing officer designated by the city manager and any appeal must be filed in writing with the city manager within ten (10) days of mailing of the city manager’s decision. The appeal shall comply with the provisions of subsections (B)(1) - (B)(4) below. If such an appeal is timely made, it shall stay enforcement of the appealed action. An appeal to a hearing officer is not available for a revocation made pursuant to subsection (C) below.

1. Upon determining the existence of any of the grounds pursuant to this chapter for the suspension or revocation of a license, or the imposition of a penalty for tobacco retailing without a license, the hearing officer shall issue a notice of intended decision to the licensee, or the person against whom the penalty for tobacco retailing without a license is directed. The notice shall be provided by personal service or by first class mail, postage prepaid, and shall include a copy of the affidavit or certificate of mailing.

2. The notice of intended decision shall state all the grounds upon which the revocation, suspension, or imposition of penalty is based.

3. The notice of intended decision shall specify the effective date of the action.

4. The notice of intended decision shall state that the city manager shall give the licensee, or the person subject to the penalty for tobacco retailing without a license, an opportunity to request a hearing thereon. The hearing shall be an informal hearing before the hearing officer. Within thirty (30) days of the hearing, or within ten (10) days if no hearing is requested, the hearing officer shall issue a decision and serve the decision.

C. Revocation of License Wrongly Issued. A tobacco retailer’s license shall be revoked if the city manager finds, after the licensee is afforded notice and an opportunity to be heard, that one 10 or more of the bases for denial of a license under Section 5.40.070 existed at the time application was made or at any time before the license issued. The decision by the city managershall be final.

5.40.140 Tobacco Retailing without a Valid License.

In addition to any other penalty authorized by law, if the city manager finds, or if a court of competent jurisdiction determines, after notice and an opportunity to be heard, that any person has engaged in tobacco retailing at a location without a valid tobacco retailer’s license, either directly or through the person’s agents or employees, the person shall be ineligible to apply for, or to be issued, a tobacco retailer’s license as follows:

A. After a first violation of this section at a location, no new license may issue for the person or the location (unless ownership of the business at the location has been transferred in an arm’s length transaction), until thirty (30) days have passed from the date of the violation; and the tobacco retailer will be issued a $5000 fine for selling without a license.

B. Notification of this violation will be sent to the jurisdiction in which the tobacco retailer was selling without a license.

5.40.150 Sale of Tobacco Products to Minors.

Any licensee or tobacco retailer who sells, gives, or in any way furnishes to another person who is under 21 years of age any tobacco products resulting in an arrest or citation under the California Penal Code shall result in the suspension of the tobacco retail owner’s license pending final disposition of the case. During the period of suspension, the licensee or tobacco retail owner shall be given reasonable notice and an opportunity to demonstrate to the city manager that the tobacco products were not sold, given, or in any way furnished to another person who is under 21 years of age.

A. Upon a finding by the city manager of a first violation at a location, the license shall be suspended for thirty (30) days unless final disposition of the case does not result in a conviction.

B. Upon a finding by the city manager of a second violation at a location within any 60-month period, the license shall be suspended for ninety (90) days unless final disposition of the case does not result in a conviction.

C. Upon a finding by the city manager of a third violation at a location within any 60-month period, the license shall be suspended for one-hundred and twenty (120) days unless final disposition of the case does not result in a conviction.

D. Upon a finding by the city manager of four or more violations at a location within any 60- month period, the license shall be revoked, and no new license shall issue for the licensee until five (5) years have passed from the date of revocation unless final disposition of the case does not result in a conviction.
11 5.40.160 Additional Remedies.

A. The remedies provided by this chapter are cumulative and in addition to any other remedies available at law or in equity.

B. Whenever evidence of a violation of this chapter is obtained in any part through the participation of a person under the age of 21 years, such person shall not be required to appear or give testimony in any civil or administrative process brought to enforce this chapter and the alleged violation shall be adjudicated based upon the evidence presented.

C. In addition to other remedies provided by this chapter or by other law, any violation of this chapter may be remedied by criminal prosecution by the district attorney and/or administrative or judicial nuisance abatement proceedings, civil code enforcement proceedings, and suits for injunctive relief.

D. For the purposes of the civil remedies provided in this chapter:

1. Each day on which a tobacco product is distributed, sold, or offered for sale in violation of this chapter shall constitute a separate violation of this chapter; and

2. Each individual tobacco product that is distributed, sold, or offered for sale in violation of this chapter shall constitute a separate violation of this chapter.

E. All tobacco retailers are responsible for the actions of their employees relating to the sale, offer to sell, and furnishing of tobacco products at the retail location. The sale of any tobacco product by an employee shall be considered an act of the tobacco retailer.

5.40.170 Agreement for Administration and Enforcement.

The city council may enter into an agreement to provide for the enforcement and carrying out of the requirements of this chapter with the county or any agency, department, or person as the city council may from time to time deem necessary or advisable.

5.40.180 Exceptions.

A. Nothing in this chapter prevents the provision of tobacco products to any person as part of an indigenous practice or a lawfully recognized religious or spiritual ceremony or practice.

B. Nothing in this chapter shall be construed to penalize the purchase, use, or possession of a tobacco product by any person not engaged in tobacco retailing.

50.40.190 Construction & Severability.

It is the intent of the city council to supplement applicable state and federal law and not to duplicate or contradict such law and this ordinance shall be construed consistently with that intention. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this 12 chapter, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases of this chapter, or its application to any other person or circumstance. The city council hereby declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause, or phrase hereof, irrespective of the fact that any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.

SECTION 2. CEQA. The City Council finds that this ordinance is not subject to the California Environmental Quality Act (CEQA). This ordinance is not a “project”, as defined in Section 15378 of the State CEQA Guidelines, and will not cause a direct or reasonably foreseeable indirect effect or change to the physical environment. This ordinance is therefore exempt from the California Environmental Quality Act pursuant to Sections 15061(b)(3) of the State CEQA Guidelines.

SECTION 3. Effective Date. This ordinance shall take effect thirty (30) days after adoption as provided by Government Code section 36937.

SECTION 4. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall give notice of its adoption as required by law. Pursuant to Government Code section 36933, a summary of this ordinance may be published and posted in lieu of publication and posting the entire text.

INTRODUCED by the City Council on the __ day of ___________2024; and PASSED AND ADOPTED at a regular meeting of the City Council held on the __ day of ______, 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
____________________________
Michael Froio, Mayor
ATTEST:
_____________________________
Kelly Buendia, City Clerk
1 ORDINANCE NO. _______________XX (2024)
AN ORDINANCE OF LAKE COUNTY REGULATING TOBACCO PRODUCT SALES,THE CITY COUNCIL OF THE CITY OF LAKEPORT ADDING CHAPTER 5.40 TO TITLE 5 OF THE

LAKEPORT MUNICIPAL CODE REQUIRING THE LICENSURE OF TOBACCO RETAILERS, REGULATING THE SALE OF TOBACCO PRODUCTS, AND AMENDING THE LAKE COUNTY

CODEDETERMINING THAT THIS ORDINANCE IS NOT SUBJECT TO THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT
The Board of Supervisors of WHEREAS, the Lake County, State of California, ordains as follows:

SECTION I. FINDIINGS AND PURPOSE.
(a)Findings. The Board of Supervisors of the County of Lake hereby City finds it necessary and declares as follows:
(1) The Board of Supervisors finds that a local licensing system for desirable to regulate the retail sale of tobacco retailers is appropriate to ensure that retailers comply with tobacco control laws and business standards of the Board of Supervisors,tobacco products to protect the health, safety, and welfare of our residents; and.
(2) Approximately four hundred eighty thousand (480,000) people die in the United States from smoking‐ related diseases and exposure to secondhand smoke every year, making tobacco use the nation's leading cause of preventable death and continues to be an urgent public health issue; and (3) Despite the state's efforts to limit youth access to tobacco, youth are still able to access tobacco products, and
(4) Requiring tobacco retailers to obtain a tobacco retailer license will not unduly burden legitimate business activities of retailers who sell tobacco products to adults but will, however, allow the Board of Supervisors to regulate the operation of lawful businesses to discourage violations of federal, state, and local tobacco control and youth tobacco access laws, as evidenced by the following:

(i)         Studies found increased retailer compliance and reduced tobacco sales to youth following implementation and active enforcement of youth tobacco sales laws paired with penalties for violations; and

(5) The State of California acknowledges that youth usage of flavored tobacco products continues to rise and that while the FDA recently announced a partial ban of certain flavored electronic cigarette products, the policy does not adequately address the health and safety of California children as it makes dangerous exemptions; and

2 (6) The State of California, in response to the rising epidemic of youth usage of flavored tobacco products, the intentional targeted marketing of certain flavored tobacco products to communities of color, low‐ income individuals, and the LGBTQ community, and the aggressive marketing of menthol‐flavored products to African American community members, enacted SB 793, which came into effect on December 21, 2022; and
(7) Unlike cigarette use that has steadily declined among youth, the prevalence of the use of non‐ cigarette tobacco products has increased among California youth; and (8) Strong policy enforcement and monitoring of retailer compliance with tobacco control policies (e.g., requiring identification checks) is necessary to achieve reductions in youth tobacco sales;   and (9) State law explicitly permits cities and counties to enact local tobacco retail licensing ordinances, and allows for the suspension or revocation of a local license for a violation of any state tobacco control law (Cal. Bus. & Prof. Code Section 22971.3); and
(10) The Board of Supervisors has a substantial interest in protecting youth and underserved populations from the harms of tobacco use; and
(11) The Board of Supervisors finds that a local licensing system for tobacco retailers is appropriate to ensure that retailers comply with tobacco control laws and business standards of Lake County in order to protect the health, safety, and welfare of our residents; and NOW THEREFORE, it is the intent of the Board of Supervisors, in enacting this ordinance, to ensure compliance with the business standards and practices of Lake County and to encourage responsible tobacco retailing and to discourage violations of tobacco‐related laws, especially those which prohibit or discourage the sale or distribution of tobacco products to youth, but not to expand or reduce the degree to which the acts regulated by federal or state law are criminally proscribed or to alter the penalties provided therein.

SECTION II.

ARTICLE XIII Of CHAPTER 9 OF THE COUNTY CODE IS HEREBY ADDED AS FOLLOWS:

Section 1. DEFINITIONS. NOW, THEREFORE, the City Council of the City of Lakeport does ordain as follows:

SECTION 1. Code Adoption. Chapter 5.40 (“Tobacco Retailer License”) is hereby added to Title 5 of the Lakeport Municipal Code to read as follows:

5.40.010 Definitions.

The following words and phrases, whenever used in this articlechapter, shall have the meanings defined in this section unless the context clearly requires otherwise: . 3 A. (a)         “Arm's Length Transaction“Arm’s length transaction” means a sale in good faith and for valuable consideration that reflects the fair market value between two informed and willing parties, neither of which is under any compulsion to participate in the transaction.

B. (b)         “Child‐Resistant Packagingresistant packaging” means packaging that meets the definition set forth in Code of Federal Regulations, title 16, Sectionsection 1700.15(b), as in effect on January 1, 2015, and was tested in accordance with the method described in Code of Federal Regulations, title 16, Sectionsection 1700.20, as in effect on January 1, 2015.

C. (c)         “Cigar” means any roll of tobacco other than a cigarette wrapped entirely or in part in tobacco or any substance containing tobacco and weighing more than 4.5 pounds per thousand.

D. (d)         “Cigarette” means: (1) any roll of tobacco wrapped in paper or in any substance not containing tobacco; and (2) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described herein.

E. (e)         “City manager” means the city manager of the city of Lakeport and designee, and any agency, department, or person designated to enforce or administer the provisions of this chapter pursuant to an agreement approved by the city council.

E.F. “Compliance checks” means systems the departmentcity manager uses to investigate and ensure that tobacco retailers are following and complying with the requirements of this articlechapter. Compliance checks may involve the use of persons between the ages of 18 and 20 who purchase or attempt to purchase tobacco products. Compliance checks may also be conducted by the departmentcity manager or other units of government for educational, research, and training purposes or for investigating or enforcing federal, state, or local laws and regulations relating to tobacco products.

G. (f)         “Day” means a calendar day.

F.H. “Delivery sale” means the sale of any tobacco product to any person for personal consumption and not for resale when the sale is conducted by any means other than an in‐ person, over‐the‐counter sales transaction in a tobacco retail establishment. Delivery sale includes the sale of any tobacco product when the sale is conducted by telephone, other voice transmission, mail, the internet, or app‐based service. Delivery sale includes delivery by licensees or third parties by any means, including curbside pick‐up. (g)         “Department” means Lake County Department of Health Services and any agency or person designated by the Department to enforce or administer the provisions of this article.

G.I. (h)         “Electronic smoking device” means any device that may be used to deliver any aerosolized or vaporized substance to the person inhaling from the device, including, but not limited to, an e‐cigarette, e‐cigar, e‐pipe, vape pen, or e‐hookah. Electronic smoking device includes any component, part, or accessory of the device, and also includes any substance that 4 may be aerosolized or vaporized by such device, whether or not the substance contains nicotine.

Electronic smoking device does not include drugs, devices, or combination products authorized forsale by the U.S. Food and Drug Administration, asthose terms are defined in the Federal Food, Drug, and Cosmetic Act.

H.J. (i)         “Flavored tobacco product” means any tobacco product that imparts a taste or odor distinguishable by an ordinary consumer, other than the taste or odor of tobacco, either prior to or during the consumption of such tobacco product, including but not limited to tastes or odorsrelating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, mint, wintergreen, menthol, herb, or spice; or a cooling or numbing sensation distinguishable by an ordinary consumer during the consumption of such tobacco product.

I.K. (j)         “Licensee” means a person granted a tobacco retailer'sretailer’s license for the location at which tobacco retailing is to occur.

J.L. (k)         “Little Cigarcigar” means any roll of tobacco other than a cigarette wrapped entirely or in part in tobacco or any substance containing tobacco and weighing no more than 4.5 pounds per thousand. “Little Cigarcigar” includes, but is not limited to, tobacco products known or labeled as small cigar, little cigar, or cigarillo.

K.M. (l)          “Manufacturer” means any person, including any repacker or relabeler, who manufactures, fabricates, assembles, processes, or labels a tobacco product; or imports a finished tobacco product for sale or distribution into the United States.

L.N. (m)         “Moveable place of business” means any form of business that is operated out of a kiosk, truck, van, automobile or other type of vehicle or transportable shelter and not a fixed address store front or other permanent type of structure authorized for sales transactions.

M.O. (n)          “Person” means any natural person, partnership, cooperative association, corporation, personal representative, receiver, trustee, assignee, or any other legal entity.

N.P. (o)          “Proprietor” means a person with an ownership or managerial interest in a business. An ownership interest shall be deemed to exist when a person has a 10% or greater interest in the stock, assets, or income of a business other than the sole interest of security for debt. A managerial interestshall be deemed to exist when a person has orshares ultimate control over the day‐to‐day operations of a business.

O.Q. (p)         “Recreation Facilityfacility” means an area, place, structure, or other facility that is used either permanently or temporarily for community recreation, even though it may be used for other purposes, and includes but is not limited to a gymnasium, playing court, playing field, and swimming pool.

P.R. (q)         “Sale” or “Sellsell” means any transfer, exchange, barter, gift, offer for sale, or distribution for a commercial purpose, in any manner or by any means whatsoever. 5 Q.S. (r)         “Self‐Service Displayservice display” means the open display or storage of tobacco products in a manner that is physically accessible in any way to the general public without the assistance of the retailer or employee of the retailer and a direct face‐to‐face transfer between the purchaser and the retailer or employee of the retailer. A vending machine is a form of self‐ service display.

R.T. (s)         “Smoking” means inhaling, exhaling, burning, or carrying any lighted or heated cigar, cigarette, or pipe, or any other lighted or heated product containing, made, or derived from nicotine, tobacco, marijuana, or other plant, whether natural or synthetic, that is intended for inhalation. “Smoking” includes using an electronic smoking device.

S.U.        (t)““Tobacco Productproduct” means:

1. (1) anyAny product containing, made of, or derived from tobacco or nicotine that is intended for human consumption or is likely to be consumed, whether inhaled, absorbed, or ingested by any other means, including but not limited to, a cigarette, a cigar, pipe tobacco, chewing tobacco, snuff, or snus;

2. (2) anyAny electronic smoking device and any substances that may be aerosolized or vaporized by such device, whether or not the substance contains nicotine; or

3. (3) anyAny component, part, or accessory of (1) or (2), whether or not any of these contains tobacco or nicotine, including but not limited to filters, rolling papers, blunt or hemp wraps, hookahs, mouthpieces, and pipes.

T.V.        (u)““Tobacco product” does not mean drugs, devices, or combination products authorized for    sale by the U.S. Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act.

U.W.       (v) “Tobacco Retailerretailer” means any person who sells, offers for sale, or exchanges or offers to exchange for any form of consideration, tobacco products. This definition is without regard to the quantity of tobacco products sold, offered for sale, exchanged, or offered for exchange.

V.X.               (aa) “Tobacco Retailingretail” or “tobacco retailing” means engaging in the activities of a tobacco retailer.

Section 2. GENERAL REQUIREMENTS AND PROHIBITIONS.
(a)         TOBACCO RETAILER'S LICENSE REQUIRED.5.40.020 General Requirements and Prohibitions.

A. Tobacco Retailer’s License Required. It shall be unlawful for any person to engage in tobacco retailing in Lake Countythe city without first obtaining and maintaining a valid tobacco 6 retailer'sretailer’slicense for each location at which tobacco retailing isto occur. Tobacco retailing without a valid tobacco retailer'sretailer’s license is a nuisance as a matter of law.

B. (b)         LAWFUL BUSINESS OPERATION.Lawful Business Operation. In the course of tobacco retailing or in the operation of the business or maintenance of the location for which a license issued, it shall be a violation of this articlechapter for a licensee, or any of the licensee'slicensee’s agents or employees, to violate any local, state, or federal law applicable to the sale of tobacco products.

C. (c)          SMOKING PROHIBITED.Smoking Prohibited. Smoking, including smoking for the purpose of sampling any tobacco product, is prohibited within the indoor area of any retail establishment licensed under this articlechapter. Smoking is also prohibited outdoors within 25 feet of any retail establishment licensed under this articlechapter.

D. (d)         MINIMUM LEGAL SALES AGE.Minimum Legal Sales Age. No person engaged in tobacco retailing shall sell a tobacco product to a person under 21 years of age.

E. (e)          DISPLAY OF LICENSE.Display of License. Each tobacco retailer license shall be prominently displayed in a publicly visible location at the licensed location.

F. (f)         POSITIVE IDENTIFICATION REQUIRED.Positive Identification Required. No person engaged in tobacco retailing shall sell a tobacco product to another person without first verifying by means of government‐issued photographic identification that the recipient is at least 21 years of age.

G. (g)          SELF‐SERVICE DISPLAYS PROHIBITED.Self‐Service Displays Prohibited. Tobacco retailing by means of a self‐service display is prohibited. All tobacco products must be stored behind the sales counter, in a locked case, in a storage unit, or in another area not freely accessible to the general public.

H. (h)         DISTANCE FROM YOUTH APPEALING PRODUCTS.Distance From Youth Appealing Products. It is unlawful for a tobacco retailer to place or maintain, or cause to be placed or maintained, any displays containing tobacco products within five feet of toys, candy, snacks or non‐alcoholic beverages inside a licensed retail establishment.

I. (i)         ON‐SITE SALES.On‐Site Sales. All sales of tobacco products shall be conducted in‐ person in the licensed location. Itshall be a violation of this articlechapter for any tobacco retailer or any of the tobacco retailer'sretailer’s agents or employees to engage in the delivery sale of tobacco products or to knowingly or recklessly sell or provide tobacco products to any person that intends to engage in the delivery sale of the tobacco product in Lake County. the city.

Section 3. SALE OF FLAVORED TOBACCO PRODUCTS PROHIBITED. (a)         FLAVORED TOBACCO PRODUCT SALES PROHIBITED.5.40.030 Sale of Flavored Tobacco Products Prohibited.
7 A. Flavored Tobacco Product Sales Prohibited. It shall be unlawful for any tobacco retailer to sell any flavored tobacco product.

B. (b)         PRESUMPTIVE FLAVORED TOBACCO PRODUCT.Presumptive Flavored Tobacco Product.

A public statement or claim made or disseminated by the manufacturer of a tobacco product, or by any person authorized or permitted by the manufacturer to make or disseminate public statements concerning such tobacco product, that such tobacco product has a taste or smell other than tobacco shall constitute presumptive evidence that the tobacco product is a flavored tobacco product.

Section 4. TOBACCO PRODUCT PRICING AND PACKAGING.
(a)         PACKAGING AND LABELING.5.40.040 Tobacco Product Pricing and Packaging.

A. Packaging and Labeling. No tobacco retailer shall sell any tobacco product to any consumer unless the tobacco product: (1) is sold in the manufacturer'smanufacturer’s packaging intended for sale to consumers; (2) conforms to all applicable federal labeling requirements; and (3) conforms to all applicable child‐resistant packaging requirements.

B. (b)         DISPLAY OF PRICE.Display of Price. The price of each tobacco product offered for sale shall be clearly and conspicuously displayed on the tobacco product or on any related shelving, posting, advertising, or display at the location where the item is sold or offered for sale.

C. (c)         DISTRIBUTION OF TOBACCO SAMPLES OR PROMOTIONAL ITEMS.Distribution of Tobacco Samples or Promotional Items. It is unlawful for any person to distribute free or nominally priced tobacco products.

Section 5. LIMITS ON ELIGIBILITY FOR A TOBACCO RETAILER LICENSE. (a)         MOBILE VENDING.5.40.050 Limits on Eligibility for a Tobacco Retailer License.

A. Mobile Vending. No license may issue to authorize tobacco retailing at other than a fixed location. No tobacco retail license will be issued to a moveable place of business.

B. (b)         LICENSED CANNABIS BUSINESSES.Licensed Cannabis Businesses. No license may issue, and no existing license may be renewed, to authorize tobacco retailing at a location licensed for commercial cannabis activity by the State of California.

Section 6. APPLICATION PROCEDURE.
(a)         5.40.060 Application Procedure.

A. An application for a tobacco retailer'sretailer’s license shall be submitted in the name of each proprietor proposing to conduct retail tobacco sales and shall be signed by each proprietor or an authorized agent thereof. All applications shall be submitted on a form supplied by the Departmentcity manager.
8 B. (b)         A license issued contrary to articlethis chapter, contrary to any other law, or on the basis of false or misleading information shall be revoked pursuant to Section 13(c) of this article.5.40.130(C). Nothing in this articlechapter shall be construed to vest in any person obtaining, and maintaining a tobacco retailer'sretailer’s license any status or right to act as a tobacco retailer in contravention of any provision of law.

C. (c)         Applicant submissions shall contain the following information:

1. (1) The name, address, and telephone number of each proprietor of the business seeking a license.

2. (2) The business name, address, and telephone number of the location for which a license is sought.

3. (3) The name and mailing address authorized by each proprietor to receive all communications and notices required by, authorized by, or convenient to the enforcement of this articlechapter.

4. (4) Proof that the location for which a tobacco retailer'sretailer’s license is sought has been issued all necessary state and local licenses for the sale of tobacco products.

5. (5) Whether or not any proprietor or any agent of the proprietor has admitted violating, or has been found to have violated, this articlechapter or any other local, state, or federal law governing the sale of tobacco products and, if so, the dates and locations of all such violations within the previous five (5) years.

6. (6) Such other information asthe Departmentcity manager deems necessary for the administration or enforcement of this articlechapter as specified on the application form required by this section.

D. (d) A licensed tobacco retailer shall inform the Departmentcity manager in writing of any change in the information submitted on an application for a tobacco retailer'sretailer’s license within thirty (30 calendar) days of a change.

Section 7. LICENSE ISSUANCE OR DENIAL.
(a)         ISSUANCE OF LICENSE.5.40.070 License Issuance or Denial.

A. Issuance of License. Upon the receipt of a complete and adequate application for a tobacco retailer'sretailer’s license and the license fee required by this articlechapter, the Departmentcity manager may approve or deny the application for a license, or it may delay action for a reasonable period of time to complete any investigation of the application or the applicant deemed necessary.

B. (b)         DENIAL OF APPLICATION.Denial of Application. The Departmentcity manager may deny an application for a tobacco retailer'sretailer’s license based on any of the following:
9 1. (1) The information presented in the application is inaccurate or false.

Intentionally supplying inaccurate or false information shall be a violation of this articlechapter;

2. (2) The application seeks authorization for tobacco retailing at a location for which the jurisdictioncity prohibits a license to be issued;

3. (3) The application seeks authorization for tobacco retailing for a proprietor to whom this articlechapter prohibits a license to be issued; or

4. (4) The application seeks authorization for tobacco retailing in a manner that is prohibited pursuant to this articlechapter, that is unlawful pursuant to any other chapter of this Code, or that is unlawful pursuant to any other law.; or

5. (5) Any other any other reason the granting of a license to the applicant that is not consistent with the requirements of this articlechapter, including the applicant'sapplicant’s history of noncompliance with this articlechapter and other laws relating to the sale of tobacco products.

Section 8. LICENSE RENEWAL AND EXPIRATION.
(a) RENEWAL OF LICENSE. 5.40.080 License Renewal and Expiration.

A tobacco retailer'sretailer’s license is invalid if the appropriate fee has not been timely paid in full or if the term of the license has expired. The term of a tobacco retailer license is one (1) year.

Each tobacco retailer shall apply for the renewal of their tobacco retailer'sretailer’s license and submit the license fee no later than thirty (30) days prior to expiration of the current license. A retailer that fails to timely submit a renewal application and fee is ineligible for license renewal and must submit a new application pursuant to Section 65.40.060.

Section 9. LICENSES NOT TRANSFERABLE, PAST VIOLATIONS AT RETAIL LOCATION. (a)         LICENSES NOT TRANSFERABLE.5.40.090 Licenses Not Transferrable, Past Violations at Retail Location.

A. Licenses Not Transferable. A tobacco retailer'sretailer’s license may not be transferred from one person to another or from one location to another. A new tobacco retailer'sretailer’s license is required whenever a tobacco retailing location has a change in proprietors.

B. (b)         PAST VIOLATIONS.Past Violations. Notwithstanding any other provision of this articlechapter, prior violations at a location shall continue to be counted against a location and license ineligibility periods shall continue to apply to a location unless:

1. (1) theThe location has been transferred to new proprietor(s) in an arm'sarm’s length transaction; and
10 2. (2) the DepartmentThe city manager determines that there is adequate documentary evidence submitted by the new proprietor(s) establishing that the new proprietor(s) have acquired the location in an arm'sarm’s length transaction.

Section 10. LICENSE CONVEYS A LIMITED, CONDITIONAL PRIVILEGE.

5.40.100 License Conveys a Limited, Conditional Privilege.

Nothing in this articlechapter shall be construed to grant any person obtaining and maintaining a tobacco retailer'sretailer’s license any status or right other than the limited conditional privilege to act as a tobacco retailer at the location in the Lake Countycity identified on the face of the permit. Nothing in this articlechapter shall be construed to render inapplicable, supersede, or apply in lieu of, any other provision of applicable law.

Section 11. FEE FOR LICENSE.

5.40.110 Fee for License.

The fee to issue or to renew a tobacco retailer'sretailer’s license shall be established by resolution of the Board of Supervisorscity council and shall be reviewed annually with the master fee schedule.

The fee shall be calculated so as to recover the total cost of administration and enforcement of this articlechapter, including, but not limited to, issuing a license, administering the license program, retailer education, retailer inspection and compliance checks, documentation of violations, and prosecution of violators, ensure the licensee has a hazardous waste management plan for disposal of tobacco product waste, but shall not exceed the cost of the administration and enforcement of this articlechapter. All fees and interest upon proceeds of fees shall be used exclusively to fund the administration and enforcement of this articlechapter. Fees are nonrefundable except as may be required by law.

Section 12. COMPLIANCE MONITORING.

(a)        5.40.120 Compliance Monitoring.

A. Compliance with this article shall chapter may be monitored by the Departmentcity manager or any law enforcement agency. In addition, the Departmentcity manager may designate additional persons to monitor compliance with this article. chapter.

A.B. All licensed premises must be open to inspection by Department staffthe city manager or designated persons during regular business hours. At the conclusion of any premise inspection, the license holder shall be provided a report, which, among other things, shall note any documented violations and provide the license holder no greater than fourteen (14) days to cure such violations. Any corrections shall be verified via documentation submitted by the license holder and/or in a subsequent inspection after the period to cure has lapsed.

11 B.C. (b)         Prior to the Department'scity manager’s approval or denial of an application for a license, the Departmentcity manager shall inspect each proposed location for which a complete application for a tobacco retail license issubmitted and a nonrefundable application fee has been paid.

C.D. (c)         The Departmentcity managershall endeavor to inspect each tobacco retailer at least one time per 12‐month period to ensure compliance with this articlechapter.

D.E. (d)         The Departmentcity manager may conduct compliance checks based on allegations of violations received from the public, asresources allow. In collaboration with law enforcement, compliance checks may involve the participation of persons between the ages of 18 and 20 to enter licensed premises to attempt to purchase tobacco products.

E.F. (e)         Nothing in this section shall create a right of action in any licensee or other person against the Countycity or its agents.

Section 13. SUSPENSION OR REVOCATION OF LICENSE.
(a) FINES, SUSPENSION OR REVOCATION OF LICENSE FOR VIOLATION.5.40.130 Suspension or Revocation of License.

A. Fines, Suspension or Revocation of License for Violation. In addition to any other penalty authorized by law, the following penalties shall be imposed on a tobacco retailer or licensee if the Departmentcity manager finds, after the licensee is afforded notice and an opportunity to be heard, that the licensee, or any of the licensee'slicensee’s agents or employees, have violated any of the requirements, conditions, or prohibitions of Sections 25.40.020 through 5.40.050 of this articlechapter.

1. (1) Upon a finding by the Departmentcity manager of a first violation at a location, the license shall be suspended for thirty (30) days and the tobacco retailer shall pay a $1000 fine.

2. (2) Upon a finding by the Departmentcity manager of a second violation at a location within any 60‐month period, the license shall be suspended for ninety (90) days and the tobacco retailer shall pay a $2500 fine.

3. (3) Upon a finding by the Departmentcity manager of a third violation at a location within any 60‐month period, the license shall be suspended for one‐hundred and twenty (120) days and the tobacco retailer shall pay a $5000 fine.

4. (4) Upon a finding by the Departmentcity manager of four or more violations at a location within any 60‐month period, the license shall be revoked, and no new license shall issue for the licensee until five (5) years have passed from the date of revocation.

B. (b) APPEAL OF SUSPENSION OR REVOCATION.Appeal of Suspension or Revocation. A decision of the Departmentcity manager to impose penalties under Section 13(a5.40.130(A) is appealable 12 to a third‐party Hearing Officerhearing officer designated by the Departmentcity manager and any appeal must be filed in writing with the Departmentcity manager within ten (10) days of mailing of the Department'scity manager’s decision. The appeal shall comply with the provisions of subsections(bB)(1)  ‐ (b)(5‐ (B)(4) below. Ifsuch an appeal istimely made, itshallstay enforcement of the appealed action. An appeal to a Hearing Officerhearing officer is not available for a revocation made pursuant to subsection (cC) below.

1. (1)Upon determining the existence of any of the grounds pursuant to this articlechapter for the suspension or revocation of a license, or the imposition of a penalty for tobacco retailing without a license, the Hearing Officerhearing officer shall issue a notice of intended decision to the licensee, or the person against whom the penalty for tobacco retailing without a license is directed. The notice shall be provided by personal service or by first class mail, postage prepaid, and shall include a copy of the affidavit or certificate of mailing.

2. (2)The notice of intended decision shall state all the grounds upon which the revocation, suspension, or imposition of penalty is based.

3. (3)The notice of intended decision shall specify the effective date of the action.

4. (4) The notice of intended decision shall state that the Departmentcity manager shall give; the licensee, or the person subject to the penalty for tobacco retailing without a license, an opportunity to request a hearing theronthereon. The hearing shall be an informal hearing before the Hearing Officer.hearing officer. Within thirty (30) days of the hearing, or within ten (10) days if no hearing is requested, the Hearing Officerhearing officer shall issue a decision and serve the decision.

C. (c) REVOCATION OF LICENSE WRONGLY ISSUED.Revocation of License Wrongly Issued. A tobacco retailer'sretailer’s license shall be revoked if the Departmentcity manager finds, after the licensee is afforded notice and an opportunity to be heard, that one or more of the bases for denial of a license under Section 75.40.070 existed at the time application was made or at any time before the license issued. The decision by the Departmentcity manager shall be the final decision of the Department.

Section 14. TOBACCO RETAILING WITHOUT A VALID LICENSE.
(5.40.140 Tobacco Retailing without a) INELIGIBLE FOR LICENSE. Valid License.

In addition to any other penalty authorized by law, if the Departmentcity manager finds, or if a court of competent jurisdiction determines, after notice and an opportunity to be heard, that any person has engaged in tobacco retailing at a location without a valid tobacco retailer'sretailer’s license, either directly or through the person'sperson’s agents or employees, the person shall be ineligible to apply for, or to be issued, a tobacco retailer'sretailer’s license as follows:

A. (1) After a first violation of this section at a location, no new license may issue for the person or the location (unless ownership of the business at the location has been transferred in 13 an arm'sarm’s length transaction), until thirty (30) days have passed from the date of the violation; and the tobacco retailer will be issued a $5000 fine for selling without a license.

A.B. Notification of this violation will be sent to the jurisdiction in which the tobacco retailer was selling without a license.

Section 15. SALE OF TOBACCO PRODUCTS TO MINORS
(a)         5.40.150 Sale of Tobacco Products to Minors.

Any licensee or tobacco retailer who sells, gives, or in any way furnishes to another person who is under 21 years of age any tobacco products resulting in an arrest or citation under the California Penal Code shall result in the suspension of the tobacco retail owner'sowner’s license pending final disposition of the case. During the period of suspension, the licensee or tobacco retail owner shall be given reasonable notice and an opportunity to demonstrate to the Departmentcity manager that the tobacco products were not sold, given, or in any way furnished to another person who is under 21 years of age.

A. (1) Upon a finding by the Departmentcity manager of a first violation at a location, the license shall be suspended for thirty (30) days unless final disposition of the case does not result in a conviction.

B. (2) Upon a finding by the Departmentcity manager of a second violation at a location within any 60‐month period, the license shall be suspended for ninety (90) days unless final disposition of the case does not result in a conviction.

C. (3) Upon a finding by the Departmentcity manager of a third violation at a location within any 60‐month period, the license shall be suspended for one‐hundred and twenty (120) days unless final disposition of the case does not result in a conviction.

D. (4) Upon a finding by the Departmentcity manager of four or more violations at a location within any 60‐month period, the license shall be revoked, and no new license shall issue for the licensee until five (5) years have passed from the date of revocation unless final disposition of the case does not result in a conviction.

Section 16. ADDITIONAL REMEDIES.
(a)         5.40.160 Additional Remedies.

A. The remedies provided by this articlechapter are cumulative and in addition to any other remedies available at law or in equity.

B. (b)         Whenever evidence of a violation of this articlechapter is obtained in any part through the participation of a person under the age of 21 years,such person shall not be required to appear or give testimony in any civil or administrative process brought to enforce this articlechapter and the alleged violation shall be adjudicated based upon the evidence presented. 14 C. (c)         In addition to other remedies provided by this chapter or by other law, any violation of this articlechapter may be remedied by criminal prosecution by the District Attorneydistrict attorney and/or, administrative or judicial nuisance abatement proceedings, civil code enforcement proceedings, and suits for injunctive relief.

D. (d)          For the purposes of the civil remedies provided in this articlechapter:

1. (1) Each day on which a tobacco product is distributed, sold, or offered for sale in violation of this articlechapter shall constitute a separate violation of this articlechapter; and

2. (2) Each individual tobacco product that is distributed, sold, or offered for sale in violation of this articlechapter shall constitute a separate violation of this articlechapter.

E. (e) All tobacco retailers are responsible for the actions of their employees relating to the sale, offer to sell, and furnishing of tobacco products at the retail location. The sale of any tobacco product by an employee shall be considered an act of the tobacco retailer.

Section 17. EXCEPTIONS.
(a)         5.40.170 Agreement for Administration and Enforcement.

The city council may enter into an agreement to provide for the enforcement and carrying out of the requirements of this chapter with the county or any agency, department, or person as the city council may from time to time deem necessary or advisable.

5.40.180 Exceptions.

A. Nothing in this articlechapter prevents the provision of tobacco products to any person as part of an indigenous practice or a lawfully recognized religious or spiritual ceremony or practice.

B. (b)         Nothing in this chapter shall be construed to penalize the purchase, use, or possession of a tobacco product by any person not engaged in tobacco retailing.

Section 18. CONSTRUCTION & SEVERABILITY. 50.40.190 Construction & Severability.

It is the intent of the Board of Supervisorscity council to supplement applicable state and federal law and not to duplicate or contradictsuch law and this ordinance shall be construed consistently with that intention. If any section,subsection,subdivision, paragraph,sentence, clause, or phrase of this articlechapter, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases of this articlechapter, or its application to any other person or circumstance.

The Board of Supervisorscity council hereby declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause, or phrase hereof, irrespective of the fact 15 that any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.

SECTION III. EFFECTIVE DATE.

This Ordinance shall take effect and be in force from and after January 1, 2025.

SECTION IV.

2.   CEQA. The Board of SupervisorsCity Council finds that this ordinance is not a project within the meaning of section 15378 of the subject to the California Environmental Quality Act (“CEQA”) (CEQA). This ordinance is not a “project”, as defined in Section 15378 of the State CEQA Guidelines, because there is no potential for it to result in an impact to and will not cause a direct or physical reasonably foreseeable indirect effect or change into the physical environment, either directly or indirectly. In the event this . This ordinance is found to be subject to CEQA, it istherefore exempt from CEQA the California Environmental Quality Act pursuant to sectionSections 15061(b)(3) of the State CEQA Guidelines, known as the “Common Sense” exemption, because it can be seen with certainty that there is no possibility of a significant effect on the environment.

SECTION 3.   Effective Date. This ordinance shall take effect thirty (30) days after adoption as provided by Government Code section 36937.

SECTION 4.   Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall give notice of its adoption asrequired by law. Pursuant to Government Code section 36933, a summary of this ordinance may be published and posted in lieu of publication and posting the entire text.

INTRODUCED by the City Council on the __ day of ___________2024; and PASSED AND ADOPTED at a regular meeting of the City Council held on the __ day of ______, 2024 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
____________________________
Michael Froio, Mayor
16 ATTEST:
_____________________________
Kelly Buendia, City Clerk
Meeting Date: 11/19/2024 Page 1 Agenda Item # VII.B.1.

CITY OF LAKEPORT
City Council ☒
City of Lakeport Municipal Sewer District ☐
Lakeport Industrial Development Authority ☐
Municipal Financing Agency of Lakeport ☐

STAFF REPORT
RE: Ordinance Requiring Exhaustion of Remedies for Prop. 218 Challenges
MEETING DATE: 11/19/2024
SUBMITTED BY: Nick Walker, Assistant City Manager
PURPOSE OF REPORT: ☐Information only ☐ Discussion ☒Action Item WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD:

The City Council is being asked to consider the addition of a section to the Lakeport Municipal Code establishing a procedure requiring the exhaustion of administrative remedies for individuals or entities challenging fees, charges, and assessments on real property levied by the City of Lakeport BACKGROUND/DISCUSSION:

The proposed ordinance is designed to establish a clear and structured process for handling challenges to fees, charges, and assessments, particularly those subject to Proposition 218 of the California Constitution.

Proposition 218 requires voter approval for certain local taxes, assessments, and property-related fees. Under the ordinance, individuals or entities that wish to challenge such fees must first exhaust all administrative remedies before pursuing legal action.

The key provisions of the ordinance include:

1. Exhaustion of Administrative Remedies:

Challengers must submit written objections to the City Clerk detailing specific grounds for any allegations of noncompliance with constitutional or other legal standards. Failure to submit these objections before the close of the public comment period during the relevant hearing will bar judicial review.

2. Procedural Requirements for the City:

The City is required to make the basis for any proposed fee or assessment publicly available 45 days before the deadline for written objections. This includes posting the rationale on the City’s website and mailing it upon request. The City must also respond in writing to any objections before or during the hearing.

3. Council Review and Decision-Making:

The City Council must consider all objections and responses from the City before making any final decisions on whether to clarify, reduce, or proceed with the proposed fees or assessments. The Council has discretion to adjust or abandon the proposal based on the objections and feedback received.

This ordinance aims to streamline the process for handling challenges and protect the City from prolonged and costly litigation by requiring challengers to first utilize administrative remedies.

Meeting Date: 11/19/2024 Page 2 Agenda Item # VII.B.1.

This ordinance will serve as an important tool in ensuring that challenges to fees and assessments are resolved administratively, reducing the City's exposure to unnecessary litigation while ensuring compliance with Proposition 218.

OPTIONS:

Adopt the Ordinance: The City Council may choose to adopt the ordinance, which would establish the exhaustion of administrative remedies as a requirement for challenging fees, charges, and assessments.

Modify the Ordinance: The Council may suggest amendments to the ordinance before adoption if there are concerns about specific provisions or procedures.

Reject the Ordinance: The Council could decide not to adopt the ordinance, which would leave the City without a formal administrative remedy exhaustion requirement for such challenges, potentially leading to more frequent litigation.

FISCAL IMPACT:
☒ None ☐ $ Budgeted Item? ☐Yes ☐ No
Budget Adjustment Needed? ☐Yes ☒ No If yes, amount of appropriation increase: $ Affected fund(s): ☐ General Fund ☐ Water OM Fund ☐ Sewer OM Fund ☐ Other:

Comments:

COUNCIL PRIORITIES:
☐ Priority #1: Public Safety & Crisis Response
☐ Priority #2: Disaster Resiliency
☒ Priority #3: Good Governance & Fiscal Stability
☐ Priority #4: Capital Infrastructure Improvement
☐ Priority #5: Safe, Sustainable & Attractive Neighborhoods ☐ Priority #6: Economic Development
SUGGESTED MOTIONS:

Move to introduce an ordinance of the City Council adding section XXXXX and set a public hearing for December 17th, 2024.
☒ Attachments: 1. Lakeport - Ordinance Requiring Exhaustion of Remedies for Prop. 218 Challenges
1 ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKEPORT ADOPTING

AN ADMINISTRATIVE REMEDIES PROCEDURE FOR CHALLENGES TO FEES,

CHARGES,AND ASSESSMENTS
______________________________________________________________________________ Be it ordained by the Council of the City of Lakeport:

Section 1. AUTHORITY. This Ordinance is authorized by the City’s authority under California Constitution, article XI, sections 7 (police power) and 9 (utility power) as well as Government Code section 53759.1.

Section 2. CODE AMENDMENT. Chapter 1.04 (General Provisions) of Title 1 (General Provisions) of the Lakeport Municipal Code is hereby amended to add a new section 1.04.020 to read as follows:

Section 1.04.020 — Exhaustion of administrative remedies for challenges to fees, charges, and assessments on real property.

A. Scope. The duty to exhaust administrative remedies imposed by this section extends to:
a. any fee or charge subject to articles XIII C or XIII D of the California Constitution,
b. any assessment on real property levied by the City, and c. the methodology used to develop and levy such a fee, charge, or assessment.

B. “Hearing” as used in this section means the hearing referenced in paragraph 4 of subsection D of this section.

C. Duty to Exhaust Issues. No person may bring a judicial action or proceeding alleging noncompliance with the California Constitution or other applicable law for any new, increased, or extended fee, charge, or assessment levied by the City, unless that person submitted to the City Clerk a timely, written objection to that fee, charge, or assessment specifying the grounds for alleging noncompliance. The issues raised in any such action or proceeding shall be limited to those raised in such an objection unless a court finds the issue could not have been raised in such an objection by those exercising reasonable diligence. 376745.2 2
D. Procedures. The City shall:
(1) Make available to the public any proposed fee, charge, or assessment to which this section is to apply no less than 45 days before the deadline for a ratepayer or assessed property owner to submit an objection pursuant to paragraph 4 of this subsection D.
(2) Post on its internet website a written basis for the fee, charge, or assessment, such as a cost of service analysis or an engineer’s report, and include a link to the internet website in the written notice of the Hearing, including, but not limited to, a notice pursuant to subdivision (c) of Section 4 or paragraph (1) of subdivision (a) of Section 6 of Article XIII D of the California Constitution. (3) Mail the written basis described in paragraph 2 of this subsection D to a ratepayer or property owner on request.
(4) Provide at least 45 days for a ratepayer or assessed property owner to review the proposed fee or assessment and to timely submit to the City Clerk a written objection to that fee, charge, or assessment that specifies the grounds for alleging noncompliance. Any objection shall be submitted before the end of the public comment portion of a Hearing on the rate, charge or assessment. (5) Include in a written notice of the Hearing, a statement in bold-faced type of 12 points or larger:
(A) That all written objections must be submitted to the City Clerk by the end of public comment period at the Hearing and that a failure to timely object in writing bars any right to challenge that fee, charge, or assessment in court and that any such action will be limited to issues identified in such objections.
(B) All substantive and procedural requirements for submitting an objection to the proposed fee, charge, or assessment such as those specified for a property-related fee under California Constitution, article XIII D, section 6(a) or for an assessment on real property under California Constitution, article XIII D, section 4(e).

E. Council Consideration; City Responses. Before or during the Hearing, the City Council shall consider and the City shall respond in writing to, any timely written objections. The City Council may adjourn the Hearing to another date if necessary to respond to comments received after the agenda is posted for the meeting at which the Hearing occurs. The City’s responses shall explain the 376745.2 3
substantive basis for retaining or altering the proposed fee, charge, or assessment in response to written objections, including any reasons to reject requested amendments.

F. City Council Determinations. The City Council, in exercising its legislative discretion, shall determine whether:
(1) The written objections and the City’s response warrant clarifications to the proposed fee, charge, or assessment.
(2) To reduce the proposed fee, charge or assessment.
(3) To further review the proposed fee, charge, or assessment before determining whether clarification or reduction is needed. (4) To proceed with the Hearing, to continue it, or to abandon the proposal.

SECTION 3. CEQA FINDINGS. The City Council finds that adoption of this Ordinance is exempt from CEQA because: (i) it is not a project within the meaning of Public Resources Code, section 21065 because it has no potential to alter the physical environment; (ii) and pursuant to CEQA Guidelines section 15061(b)(3), the so-called “common sense” exemption, for this same reason.

SECTION 4. SEVERABILITY. If any section, subsection, sentence, clause, phrase or portion of this Ordinance or its application to any person or circumstance is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or its application to other persons and circumstances. The City Council declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase or portion thereof despite the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional and, to that end, the provisions hereof are hereby declared to be severable.

SECTION 5. EFFECTIVE DATE. This Ordinance shall be in full force and effect 30 days after its adoption pursuant to Government Code section 36937.

SECTION 6. PUBLICATION. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published pursuant to Government Code section 36933.

INTRODUCED and first read at a regular meeting of the City Council on the _____ day of __________ 2024.
376745.2 4
FINAL PASSAGE AND ADOPTION by the City Council of the City of Lakeport was at a meeting held on the _____ day of _______ 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINING:
______________________________
Michael Froio, Mayor
ATTEST:
______________________________
Kelly Buendia, City Clerk
Meeting Date: 11/19/2024 Page 1 Agenda Item # VII.B.2

CITY OF LAKEPORT
City Council ☒
City of Lakeport Municipal Sewer District ☒
Lakeport Industrial Development Authority ☐
Municipal Financing Agency of Lakeport ☐

STAFF REPORT
RE: Unaudited Actual Report MEETING DATE: 11/19/2024
SUBMITTED BY: Nicholas Walker, ACM/ Finance Director
PURPOSE OF REPORT: ☐Information only ☒ Discussion ☐Action Item WHAT IS BEING ASKED OF THE CITY COUNCIL/BOARD:

The City Council is being asked to receive a presentation on the fiscal year ended June 30, 2024 unaudited actuals and provide staff direction on the treatment of any surplus revenues.

BACKGROUND/DISCUSSION:

The accounting for the fiscal year ended June 30, 2024 is substantially closed. The auditors were here the week of November 5th for year end field work and preparation of the Annual Comprehensive Financial Report (ACFR) has commenced. Staff is providing this information as an update to the status of the revenues and expenditures for the year ended June 30, 2024.

Attachment A to this staff report includes summarized unaudited financial statements for the general fund, water operating and maintenance fund, and the sewer operating and maintenance fund, which include revenue and expense activity through June 30, 2023. The format in which the statements are prepared is similar to the annual budget. The schedule includes amounts available for discretionary spending for each fund anticipated to be presented in the 2020-21 audited financial statements, in accordance with Generally Accepted Accounting Principles (GAAP), as well as the amounts of anticipated ending discretionary spending expected to be available at the 2022-23 year-end. In the enterprise funds this term “working capital” is defined as current assets minus current liabilities. For budgeting purposes, the modified accrual method is used and this is common practice among governmental agencies. Working capital is the enterprise funds equivalent of the general funds amounts available for discretionary spending.

In accordance with GAAP, financial statements in the Annual Comprehensive Financial Report (ACFR) are presented in two distinctly different ways, (1) the governmental fund financial statements and (2) government wide and enterprise fund financial statements. Governmental fund financial statements present balances using a current financial resources measurement focus which emphasizes the current available spendable resources available for appropriation. This method of accounting is known as modified accrual. Government wide and enterprise fund financial statements are presented on a flow of economic resources measurement focus which reports all assets and liabilities whether current or long term. This method is referred to as accrual accounting and is similar to the type of presentation that is used in private industry.

Meeting Date: 11/19/2024 Page 2 Agenda Item # VII.B.2
Investments
According to the idle funds investment policy for the City of Lakeport, the City of Lakeport Municipal Sewer District (CLMSD) and Municipal Financing Agency of Lakeport (MFAL) quarterly updates are to be provided to the City Council for review.

This schedule provides detailed information on each individual CD as of June 30, 2024:

This schedule provides balances and concentration percentages of the City-wide cash and investment balances as of June 30, 2024:

OPTIONS:

1. Review and file the Fiscal Year 2024 Unaudited Actual Financial Update.

2. Do not review and file but provide direction to staff.

FISCAL IMPACT:
☐ None ☐ $ Budgeted Item? ☐Yes ☐ No
Budget Adjustment Needed? ☐Yes ☐ No If yes, amount of appropriation increase: $ Affected fund(s): ☐ General Fund ☐ Water OM Fund ☐ Sewer OM Fund ☐ Other:

Comments:

General Fund Settlement Original Estimated Current Accrued Interest CD Title Yield FDIC # Date Amount Market Value Through 3/31/24 Total Fidelity Govt MMKT Capital 4.44% 68,561.08 68,561.08
UBS Bank Salt Lake 3.05% 90348J3H1 11/18/2024 2 Years 200,000.00 198,180.00 213.70 198,393.70 Capital One National 3.18% 14042TGE1 5/19/2025 3 Years 200,000.00 196,258.00 747.40 197,005.40 State Bank India 1.00% 856283P26 7/10/2025 5 Years 200,000.00 191,564.00 900.55 192,464.55 BNY Mellon 4.70% 05584CKE5 11/15/2027 4 Years 244,000.00 243,167.96 1,476.70 244,644.66 Discover Bank 4.89% 254673Z74 11/15/2027 5 Years 243,000.00 247,196.61 1,564.52 248,761.13 Total 1,087,000.00 1,144,927.65 4,902.87 1,149,830.52
Wastewater Settlement Original Estimated Current Accrued Interest CD Title Yield FDIC # Date Amount Market Value Through 3/31/24 Total Fidelity Govt MMKT Capital 4.44% 86,073.17 86,073.17
Northern Bank 4.76% 66476QDC9 8/15/2024 1 Years 244,000.00 243,807.24 1,492.41 245,299.65 Wells Fargo Bank 2.01% 949763R73 1/17/2025 5 Years 200,000.00 196,332.00 149.59 196,481.59 American Express National 3.18% 02589ACS9 5/19/2025 3 Years 200,000.00 196,258.00 747.40 197,005.40 Synchrony Bank 3.18% 87165HP79 5/20/2025 3 Years 200,000.00 196,232.00 713.42 196,945.42 BMW BK North America 4.46% 05580AZ23 4/21/2027 4 Years 244,000.00 240,849.96 2,088.37 242,938.33 Total 1,088,000.00 1,159,552.37 5,191.19 1,164,743.56
Term
Term
Original
Original
Investment Type Fair Value Concentration
Local Agency Investment Fund (LAIF) $ 2,851,326 13.42%
Certificates of Deposit 2,314,574 10.90%
PARS Mutual Funds 1,068,337 5.03%
Demand Deposits (checking) 15,007,134 70.65%
Total Funds $ 21,241,371 100.00%
Meeting Date: 11/19/2024 Page 3 Agenda Item # VII.B.2
COUNCIL PRIORITIES:
☐ Priority #1: Public Safety & Crisis Response
☐ Priority #2: Disaster Resiliency
☒ Priority #3: Good Governance & Fiscal Stability
☐ Priority #4: Capital Infrastructure Improvement
☐ Priority #5: Safe, Sustainable & Attractive Neighborhoods ☐ Priority #6: Economic Development
SUGGESTED MOTIONS:

Receive and file the FY 2024 Unaudited Actual Financial Update. ☒ Attachments: 1. Summarized unaudited financial statements for the general fund, water operating and maintenance fund and the sewer operating and maintenance fund.

Fund: 110
Name: General Fund
2023-24 2023-24
Adjusted Budget As of June 30,
2024 Remaining $ % Collected/
Used
Taxes $ 5,550,785 5,507,335 $ (43,450) $ 101%
Franchises 189,148 326,000 136,852 58%
Licenses 315 200 (115) 158%
Permits 111,590 107,500 (4,090) 104%
Fines, forfeitures, and penalties 11,000 8,523 2,477 77% Use of money and property 87,000 245,866 (158,866) 283% Income from other agencies 244,000 178,722 65,278 73%
Federal funding 3,961 1,000 (2,961) 396%
State funding 137,489 102,500 (34,989) 134%
Charges for service 126,214 80,000 (46,214) 158%
Other revenue 64,306 34,300 (30,006) 187%
Total revenue 6,500,835 6,616,919 (116,084) 102%
3,516,308 3,967,068 450,760 89%
2,106,843 2,340,253 233,410 90%
524,203 610,038 85,835 86%
Total expenditures 6,917,359 6,147,354 770,005 89%
Use of fund balance - -
44,630 35,000
(455,743) (457,810)
Net sources (uses) (422,810) (411,113)
Resources - Use
Surplus (deficit) $ 58,452 (839,334) $
Beginning General Fund Balance 6,732,550 6,523,962
Nonspendable (289,481) (289,481)
Restricted (24,462) (24,462)
Operating Reserve (1,101,595) (926,118)
Reserve for Economic Uncertainties (1,468,794) (1,234,824) Disaster Reserve (734,397) (617,412)
VERF (147,735) (117,735)
RIMF (214,253) (114,492)
PORF (986,866) (946,490)
Beginning Discretionary General Fund Balance 1,764,967 2,252,948 Inflows 6,535,835 6,661,549
Outflows 7,375,169 6,603,097
58,452 (839,334)
Anticipated Ending Discretionary General Fund Balance 925,633 $ 2,311,400 $ Adjusted Budget As of June 30,
2024
Non-Departmental 769,335 794,811 25,476 97%
Legislative 112,646 115,476 2,830 98%
Administration 377,757 446,342 68,585 85%
Economic Development 81,894 117,000 35,106 70%
City Attorney 94,184 50,000 (44,184) 188%
Finance and Information Technology 405,227 389,047 16,180 96% Community Development:

Planning 320,404 490,233 169,829 65%
Building 348,715 371,478 22,763 94%
Engineering 145,061 154,203 9,142 94%
Police 2,684,275 3,078,539 394,264 87%
Public Works:

Administration and Compliance 141,105 131,764 9,341 93% Roads and Infrastructure 577,206 563,293 13,913 98%
Parks, Buildings, and Grounds 633,549 584,722 48,827 92% Total use 6,603,097 7,375,169 772,072 90%
Fiscal Year 2023-24
Financing Sources (Uses)
Transfers in
Transfers (out)
Revenue Sources
Salaries and benefits
Operations
Capital outlay/CIP
Departmental Use
Expenditures
Change to fund balance
Fund: 501
Name: Water Utility M & O Fund
2023-24 2023-24
Adjusted Budget As of June 30,
2024 Remaining $ % Collected/Used
Use of money and property - 45,034 100% (45,034)
Charges for service 2,827,00 0 2,678,743 95% 148,257
Interfund services provided 120,00 0 103,512 86% 16,488 Total revenue 2,947,00 0 2,827,289 96% 119,711
-
1,376,277 1,204,407 88% 171,870
787,239 729,234 93% 58,005
Debt service 756,891 752,222 99% 4,669
5,159,061 501,923 10% 4,657,138
Total expenditures 8,079,46 8 3,187,786 39% 4,891,682
-
Net sources (uses) - - -
Resources - Use -
Surplus (deficit) (360,497) (5,132,468)
Beginning Working Capital 1,949,86 0 1,949,860
Inflows 2,947,00 0 2,827,289
Outflows 8,079,46 8 3,187,786
Change to fund balance (5,132,468) (360,497)
Anticipated Ending Working Capital $ (3,182,608) $ 1,589,363 Adjusted Budget As of June 30,
2024
Non-Departmental 826,891 827,290 100% (399)
Legislative 17,00 0 16,602 98% 398
Administration 146,26 4 123,174 84% 23,090
City Attorney 28,000 32,358 116% (4,358)
Finance and Information Technology 318,80 6 290,681 91% 28,125 Community Development: -
Planning 24,30 6 20,676 85% 3,630
Building 29,35 8 31,115 106% (1,757)
Engineering 64,29 8 67,014 104% (2,716)
Public Works: -
Administration and Compliance 215,596 128,085 59% 87,511 Water O&M 6,408,94 9 1,650,791 26% 4,758,158
Total use 8,079,46 8 3,187,786 39% 4,891,682
Departmental Use
Financing Sources (Uses)
Fiscal Year 2023-24
Revenue Sources
Expenditures
Salaries and benefits
Operations
Capital outlay/CIP
Fund: 601
Name: Sewer Utility M & O Fund
2023-24 2023-24
Adjusted Budget As of June 30,
2024 Remaining $ % Collected/Used
Taxes $ 55,050 $ 81,820 $ 149% (26,770)
Use of money and property 52,500 116,989 223% (64,489)
Charges for service 3,071,00 0 3,171,450 103% (100,450) Interfund services provided 18,000 20,807 116% (2,807)
Total revenue 3,196,55 0 3,391,066 106% (194,516)
1,393,118 1,195,530 86% 197,588
1,063,872 1,154,857 109% (90,985)
Debt service 675,36 7 672,517 100% 2,850
1,435,211 243,799 17% 1,191,412
Total expenditures 4,567,56 8 3,266,703 72% 1,300,865
Net sources (uses) - -
Resources - Use
Surplus (deficit) 124,363 (1,371,018)
Audited Beginning Working Capital 6,320,690 6,320,690
Inflows 3,196,55 0 3,391,066
Outflows 4,567,56 8 3,266,703
Change to fund balance (1,371,018) 124,363
Anticipated Ending Working Capital $ 4,949,672 $ 6,445,053 Adjusted Budget As of June 30,
2024
Non-Departmental 745,36 7 747,182 100% (1,815)
Legislative 17,000 16,602 98% 398
Administration 146,21 4 123,174 84% 23,040
City Attorney 28,000 32,283 115% (4,283)
Finance and Information Technology 316,755 288,720 91% 28,035 Community Development:

Planning 24,306 20,676 85% 3,630
Building 29,358 31,164 106% (1,806)
Engineering 64,298 65,702 102% (1,404)
Public Works:

Administration and Compliance 215,596 127,971 59% 87,625 Sewer O&M 2,980,67 4 1,813,229 61% 1,167,445
Total use 4,567,56 8 3,266,703 72% 1,300,865
Departmental Use
Financing Sources (Uses)
Expenditures
Salaries and benefits
Operations
Capital outlay/CIP
Fiscal Year 2023-24
Revenue Sources