2 9
6 7
Proposer Location Score
Smart Communications Seminole, FL 383
Inmate Calling Solutions San Antonio, TX 364
NCIC Longview, TX 335
ViaPath Technologies Falls Church, VA 309
400 Points Possible
Smart Communications received the highest score as the most comprehensive solution.
Their proposal specifies the lowest overall telephone calling rates at $0.07 per minute across all call types: local, long distance, and international. Smart Communications’ proposed video visitation rate of $0.15 per minute is 40 percent less than each of the other proposers, and the paid entertainment content rate of $0.01 per minute is 80 percent less than other proposals containing paid content.
The five-year term specified in the City’s RFP and this agreement was designed to deliver the best possible final product at the lowest possible cost to both the City and persons incarcerated. Implementation of this project requires significant infrastructure improvements to the Jail facility, including network servers and other related hardware, Wi-Fi access points, installation of new conduits and facility-wide cabling, and as many as 400 tablet devices. Smart Communications’ proposal assigns 100 percent of these costs to the vendor, while also delivering services at the lowest overall cost to the inmate population.
Smart Communications’ proposal provides for significant no-charge entertainment content, as well as weekly no-charge telephone calling, video visitation, and messaging allotments for all persons incarcerated. The proposal also includes outstanding educational programming opportunities, incorporating full-suite courses from publishers including Khan Academy and i-Pathways. Smart Communications’ educational software also supports the ability for our local education partner, Santa Ana College, to upload full courses including text content, video and multimedia content, and test and quizzes for delivery on-demand. All educational, legal, and religious content is provided without cost of any kind.
The inmates housed in the Santa Ana Jail pay for calls beyond mandated allowances and any applicable fees or additional services. Therefore, the City does not anticipate any expenses to be incurred during the period of this agreement. The agreement includes provisions for the inmate communication services provider to pay the City a percentage of inmate gross billable revenue.
Revenues from this agreement are estimated at $130,000 annually, based on average telephone usage for calendar years 2019 and 2020 and anticipated digital content engagement. This revenue is composed of the following:
•60% of gross billed telephone revenue
•50% of digital content purchases
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Santa Ana Jail Inmate Communication and Digital Services September 20, 2022
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The total anticipated revenue over the five-year term of the agreement is $650,000.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Revenues from this agreement will be deposited in the Jail Inmate Welfare Fund, Inmate Recovery account (no. 02314002-57403). Revenue estimates by fiscal year are as follows:
Fiscal Year
Accounting Unit
– Account No. Fund Description Accounting Unit –
Account No. Description Amount
FY 22-23 02314002-57403 Inmate Welfare
Fund
Inmate Welfare Fund,
Inmate Recovery $86,667
FY 23-24 02314002-57403 Inmate Welfare
Fund
Inmate Welfare Fund,
Inmate Recovery $130,000
FY 24-25 02314002-57403 Inmate Welfare
Fund
Inmate Welfare Fund,
Inmate Recovery $130,000
FY 25-26 02314002-57403 Inmate Welfare
Fund
Inmate Welfare Fund,
Inmate Recovery $130,000
FY 26-27 02314002-57403 Inmate Welfare
Fund
Inmate Welfare Fund,
Inmate Recovery $130,000
FY 27-28 02314002-57403 Inmate Welfare
Fund
Inmate Welfare Fund,
Inmate Recovery $ 43,333
Total $650,000
These funds will be included in each respective fiscal year budget for anticipated expenditures that benefit the inmates housed at the Santa Ana Jail.
EXHIBIT
1. Agreement with Smart Communications
Submitted By: David Valentin, Police Chief
Approved By: Kristine Ridge, City Manager
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Master Services Agreement | City of Santa Ana
Master Services Agreement
This Master Services Agreement (this “Agreement”) is by and between the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, hereinafter referred to as “Customer,” and Smart Communications Holding, Inc. and/or its designated subsidiary or assignee, with principal offices located at 10491 72nd Street, Seminole, FL 33777 , hereinafter referred to as “Provider.” This Agreement supersedes any and all other agreements made between the Parties, written, oral or otherwise.
Whereas, Customer desires that Provider install an inmate communications system(s) and provide inmate communications and maintenance services according to the terms and conditions in this Agreement, and according to the Schedules, which are incorporated by reference into this Agreement, and; Whereas, Provider agrees to install the inmate communications syste m(s) and provide inmate communications and maintenance services according to the terms and conditions in this Agreement, and according to the Schedules, which are incorporated by reference into this Agreement.
Now therefore, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties, intending to be legally bound, agree as follows:
1. Systems. This Agreement specifies the general terms and conditions under which Provider will perform certain inmate related services and systems (the “System(s)”) for the Customer. Additional terms and conditions with respect to the Systems will be specified in the Schedules entered into by the Parties and attached (the “Schedules”). The Schedules are incorporated into this Agreement and are subje ct to the terms and conditions of this Agreement. In the event of any conflict between this A greement and a Schedule, the terms of the Schedule shall govern.
2. Use of Systems and Exclusivity. In exchange for Provider installing, providing, and supporting its System and inmate communication services throughout Customer’s Facility at no cost to Customer, Customer acknowledges, agrees, and grants to Provider the exclusive right to provide such ser vices in Customer’s Facility. Provider shall have the exclusive right to install, maintain, and derive revenue from and through Provider’s inmate communication services and Systems including, without limitation, the related hardware and software, located in the Customer Facility as identified on the Schedules. Customer agrees that it will not resell, grant , or provide access to Provider’ s services or System, directly or indirectly, to any third party unless agreed to by Provider in a separate written agree ment.
During and subject to the terms and conditions of this Agreement, Provider shall be the sole and exclusive provider of inmate telephone services (ITS) and all inmate communication services available on or provided by a tablet or kiosk system as set f orth in the accompanying Schedule(s) , including but not limited to video and data services (e.g., electronic video visitation, electronic messaging and email, texting, photo delivery, and electronic entertainment) and inmate software applications (e.g., el ectronic delivery of routine postal mail, electronic medical or general requests, electronic grievances, electronic law library, and electronic education ).
3. Hardware and Software License. For the term of this Agreement, Provider grants Customer a non-exclusive, non- transferable license to access and use certain proprietary computer software and hardware products and materials in connection with our inmate services and Systems. Provider will provide free of charge all Software upgrades, modifications, and u pdates. All hardware upgrades, modifications and updates will be done at Provider’s sole discretion.
Provider makes no representation or warranty as to the legality of monitoring or archiving such communications and activities.
4. Ownership. Smart Communica tions is and shall remain the owner of the equipment provided by Smart Communications whether or not physically attached to real estate.
5. License Restrictions: The Software is to be used solely in connection with Provider’s Services by Customer and inmates housed at Customer’s Facility in connection with Provider’s services and Systems. The Hardware is to be Exhibit 1
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used solely by inmates housed at Customer’s Facility to access Provider’s services and Systems. Unless and only to the extent that this Agreement expressly permits, Customer must not: i. permit any parent, subsidiary, affiliated entity or third party to use the Hardware or Software; ii. rent, lease, lend, assign, sublicense, encumber or otherwise transfer or attempt to transfer the Hardware or Software or any portion thereof; iii. alter, create derivatives of, or modify the Hardware or Software in any way, or allow a third party to do so; iv. connect the Software or Hardware to any third-party products or services that were not approved of in writing by Provider; v. distribute or otherwise make the Hardware or Software or any password, key, or other access code for the Software available to any third party; vi. reverse engineer, decompile, or disassemble the Hardware or Software, or allow a third party to do so; vii. defeat or work around any access restrictions or encryption in the Software, or allow a third party to do so; viii. remove, minimize, block, or modify any titles, logos, trademarks, copyright and patent notices, digital watermarks, disclaimers, or other legal notices that are included in the Software, whether or not they are Provider’s or a third party′s; 6. Title. Provider shall have and retain all rights, title, and interest in the products and services provided to Customer. The Hardware, Software, Systems, networking, and cabling, including all modifications and updates of Software, shall at all times remain the sole and exclusive property of the Provider. Any trade secrets, methodology and processes of our services and Systems constitute proprietary information of Provider, regardless of any part or portion thereof is the subject of a valid copyright or patent. During the term of this agreement and for the time period(s) as stated in the Schedule for Systems, we will provide you access to the records. 7. Term. This Agreement shall commence on November 1, 2022 and shall continue for a period of five (5) years. After the original five (5) year term, this Agreement may be renewed for two (2) additional one (1) year terms upon written notification by Customer or as otherwise agreed by the Parties. The parties agree that the terms and conditions herein shall govern for so long as Provider continues to provide its system and services. 8. Limitation of Liability. To the maximum extent permitted by applicable law, Provider shall indemnify and hold harmless Customer, his agents, servants and employees from any and all claims, actions, lawsuits, judgments or liabilities of any kind whatsoever deriving from negligent acts or omissions of the Provider, its agents or sub-contractors. Each Party agrees that it shall be solely responsible for the negligent or wrongful acts of its own employees. However, nothing contained herein shall constitute a waiver by Customer of its sovereign immunity or other applicable State Statutes. Notwithstanding anything to the contrary in this Agreement or Schedules, in no event will Provider’s liabilities under this agreement, whether under contract law, tort law, warranty, or otherwise, exceed the total amount of revenue received by Provider pursuant to this agreement, during the twelve (12) month period before the date the claim arose. 9. Confidential Information and Non-Disclosure. The parties acknowledge that in their performance of their duties hereunder either party may communicate to the other (or its designees) certain confidential and proprietary information, including without limitation information concerning the party’s services and know-how, technology, techniques, or business or marketing plans related thereto (collectively, the "Confidential Information") all of which are confidential and proprietary to, and trade secrets of, the disclosing party (the “Disclosing Party”). As a condition to the receipt of the Confidential Information from the Disclosing Party, the receiving party (the “Receiving Party”) shall, at all times during and after the term of this Agreement (i) not disclose in any manner, directly or indirectly, to any third party any portion of the Confidential Information; (ii) not use the Confidential Information in any fashion except to perform its duties hereunder or with the Disclosing Party's express prior written consent; (iii) disclose the Confidential Information, in whole or in part, only to employees and agents who need to have access thereto for the Receiving Party's internal business purposes; (iv) take all necessary steps to ensure that its employees and agents are informed of and comply with the confidentiality restrictions contained in this Agreement; and (v) take all necessary precautions to protect the confidentiality of the Confidential Information received hereunder and exercise at least the
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same degree of care in safeguarding the Confidential Information as it would with its own confidential information, and in no event shall apply less than a reasonable standard of care to prevent disclosure. The Receiving Party shall promptly notify the Disclosing Party of any unauthorized disclosure or use of the Confidential Information. The Receiving Party shall cooperate and assist the Disclosing Party in preventing or remedying any such unauthorized use or disclosure. The term “Confidential Information” does not include, and the obligations and undertakings set out in this section do not apply to: (a) Information which now is in the public domain or publicly known at the time of disclosure or hereafter comes into the public domain or generally known through no fault of the Receiving Party, otherwise than by reason of breach of this Agreement; (b) Information the disclosure of which is requested or required by law, regulation, court order or a regulatory agency, provided that, prompt notice of such requested disclosure shall be given to the Disclosing Party, if legally permitted, so that Disclosing Party may seek appropriate remedy to prevent such disclosure or waive compliance with the provisions of this Agreement and the Receiving Party, its directors, officers, employees, agents and advisers shall reasonably co-operate with the Disclosing Party, at the Disclosing Party’s sole cost and expense, if the Disclosing Party elects to challenge the validity of such requirement and/or take such steps as the Disclosing Party may reasonably require to avoid or limit such disclosure; (c) Information that was previously known to the Receiving Party free of any obligation of confidentiality; (d) Information that is independently developed by the Receiving Party without reference to or use of the Confidential Information; or (e) Information that is disclosed to the Receiving Party by a third party not under or in violation of, as the case may be, any confidentiality undertaking to the Disclosing Party. Subsections (a) through (e) of this paragraph notwithstanding, the parties agree that the technology behind the Providers Services and Systems is Confidential Information and is a trade secret of Provider. 10. Default and Termination. If either party defaults in the performance of any obligation under this agreement, then the non-defaulting Party must give written notice to the defaulting Party specifically describing the nature of default and clearly notifying the defaulting party that the written notice is being provided pursuant to this provision. The defaulting Party shall have thirty (30) days after receipt of notice of default to cure. If it is not reasonable to cure the default within 30 days, then the right to cure period shall be extended to a reasonable cure period as long as the defaulting Party has made good faith attempts to cure the default. Upon termination of this Agreement, Provider shall remove all hardware and software Systems except for the cabling and conduit which shall become the property of the Customer. Provider shall have the right to immediately terminate this Agreement if Customer breaches the Confidentiality or Non-Disclosure provisions of this Agreement. 11. Insurance. Coverage shall be at least as broad as: 1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and 9 (non-owned), with limit no less than $1,000,000 per accident for bodily injury and property damage. 3. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. 4. Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. If the Consultant maintains broader coverage and/or higher limits than the minimums shown above, the Customer requires and shall be entitled to the broader coverage and/or the higher limits maintained by the contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Entity.
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Other Insurance Provisions The insurance policies are to contain, or be endorsed to contain, the following provisions: Additional Insured Status The Entity, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Consultant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Consultant’s insurance (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used). Primary Coverage For any claims related to this contract, the Consultant’s insurance coverage shall be primary insurance primary coverage at least as broad as ISO CG 20 01 04 13 as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the Consultant’s insurance and shall not contribute with it. Notice of Cancellation Each insurance policy required above shall state that coverage shall not be canceled, except with notice to the Entity. Waiver of Subrogation Consultant hereby grants to Customer a waiver of any right to subrogation which any insurer of said Consultant may acquire against the Customer by virtue of the payment of any loss under such insurance. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the Customer has received a waiver of subrogation endorsement from the insurer. Self-Insured Retentions Self-insured retentions must be declared to and approved by the Entity. The Customer may require the Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or Entity. Acceptability of Insurers Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the Entity. Claims Made Policies If any of the required policies provide coverage on a claims-made basis: 1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work. 2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. 3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work. Verification of Coverage
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Consultant shall furnish the Customer with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to Customer before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. The Customer reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. Subcontractors Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Contractor shall ensure that Customer is an additional insured on insurance required from subcontractors. Special Risks or Circumstances Customer reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 12. Employees. Provider represents that it has, or will secure at its own expense, all personnel required in performing its obligations under this Agreement. All of the services required hereunder will be performed by the Provider or under its supervision and all personnel engaged in the work shall be fully qualified to perform such services. Provider and any subcontractors used in the performance of the responsibilities listed herein must maintain a drug-free workplace policy. Customer acknowledges that Provider is an independent contractor and nothing in this Agreement is intended nor shall be construed to create an agency relationship, and employer/employee relationship, a joint venture relationship or any other relationship allowing Customer to exercise control or discretion over the manner by which Provider performs hereunder. Provider expressly agrees that it shall be solely responsible for supervising its employees, that it shall comply with all rules, regulations, orders, standards and interpretations promulgated pursuant to the OSHA Act of 1970, including but not limited to training, recordkeeping, providing personal protective equipment, lock/tag out procedures, material safety data sheets and labeling. Provider certifies that neither it nor any subcontractors used to accomplish its obligations hereunder, shall employ unauthorized aliens. Provider certifies that in accordance with the provisions of Title VII of the 1968 Civil Rights Act as amended by the Equal Employment Opportunity Act of 1972 and Executive Order 11914, that neither it nor any subcontractors used to accomplish its obligations hereunder discriminate on the basis of race, color, sex, religion, age, national origin or disability in their employment practices. Miscellaneous 13. Warranty Against Contingent Fees. Provider warrants that no person or selling agency has been employed or retained to solicit this contract upon an agreement of understanding for commission, percentage, brokerage or contingency, except bona fide employees or selling agents maintained by the Provider for the purpose of securing business. 14. Subcontracts. Provider shall be allowed to use subcontractors for the purpose of completing the provisions of this Agreement. 15. Provider Personnel. All Provider personnel being permitted to work in the Customer Jail Facility will be subject to a security/background check by the Office of the Sheriff. 16. Provider Cooperation. Provider shall, at all times observe and comply with all Federal, State, and local municipal laws, ordinances, rules and regulations in any way affecting the Agreement. The Provider shall maintain regular communications with Customer, or its designees, and shall actively cooperate in all matters pertaining to this Agreement. 17. Public Information. Neither the Provider nor the Customer shall publish any findings based on data obtained from the operation of this agreement without the prior consent of the other party, whose written consent shall not be unreasonably withheld.
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18. Permits and Licenses. All permits and licenses required by Federal, State, local laws, rules, and regulations necessary for the implementation of the work undertaken by the Provider pursuant to the Agreement shall be served and paid for by the Provider. It is the responsibility of the Provider to have and maintain the appropriate certificate(s) valid for work to be performed and valid for the jurisdiction in which the work is to be performed for all persons working on the job for whom a certificate is required. 19. Third-party Rights. The rights, obligations and duties contained in this Agreement shall exist exclusively between the Parties. The Parties expressly agree and intend that they alone shall have the exclusive rights to seek legal or equitable enforcement, remedy, injunctive relief or to bring a breach of Agreement action. The Parties do not intend to create, nor shall this Agreement be construed to create in any other individual or entity the status of a third-party beneficiary. 20. Waiver of Breach. The waiver by either party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent breach of the same or other provision hereof. 21. Compliance with Laws. Provider shall comply with all Federal, State and local laws, rules, and regulations applicable to the services or payments for services under this Agreement. 22. Governing Law. The parties mutually consent to the jurisdiction of and agree that any litigation arising hereunder shall be brought and completed in Orange County, California and governed by the laws of the state of California. 23. Attorney Fees. In the event of litigation concerning this Agreement, the Parties shall each be responsible for their own attorney’s fees and costs. 24. Completeness of Agreement. This Agreement, together with any additional or supplementary Schedules or documents incorporated herein by specific reference contain all the terms and conditions agreed upon by the parties hereto, and no other agreements, oral or otherwise, regarding the subject matter of this Agreement or any part thereof shall have any validity or bind any of the Parties hereto. This Agreement may be amended or revised only in writing and signed by all the parties. 25. Force Majeure. Provider will not be deemed in violation of this Agreement if it is prevented from performing any of its obligations hereunder for any reason beyond its control, including without limitations, strikes, inmate disturbances, failure of Customer to provide proper security services, acts of God, civil or military authority, acts of public enemy, war, terrorism, accidents, fires, explosions, earthquakes, floods, or any similar cause beyond the reasonable control of either Party. 26. Assignment. Provider may assign this Agreement or any interest herein at any time to any parent, successor, or subsidiary with prior written notice to Customer. 27. Severability. In the event any provision of this Agreement is held to be unenforceable for any reason, the unenforceability thereof shall not affect the remainder of the Agreement which shall remain in full force and effect and enforceable in accordance with its terms. 28. Matters to be Disregarded. The titles of the several sections, subsections and paragraphs set for in this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of the provisions of this Agreement. 29. Interpretation. The language in this Agreement is to be construed according to its plain meaning and not strictly for or against either party. The parties have reviewed this Agreement and no ambiguities are known to exist; however, to the extent any ambiguity is later discovered, any rule that such ambiguity is to be resolved for or against either party does not apply. 30. Notices. Any notices, demands, payments or reports required by this Agreement shall be in writing and sufficient
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if sent by the parties hereto via registered or certified United States mail, postage prepaid, to the notice addresses below: Customer (City of Santa Ana): Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 Provider (Smart Communications Holding, Inc.): Attn: Jonathan Logan Smart Communications 10491 72nd St. Seminole, FL 33777 Courtesy Copy to: Santa Ana Police Department Attn: Chief of Police 60 Civic Center Plaza Santa Ana, CA 92702
31. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute the same Agreement. Any signature page of any such counterpart, or any telecopy or other electronic facsimile thereof, may be attached or appended to any other counterpart to complete a fully executed counterpart of this Agreement, and any telecopy or other electronic transmission of a signature shall be deemed an original and shall bind the party who made such signature. 32. Authority. Each Party represents and warrants that it possesses or has obtained the authority to enter into this Agreement, and that the individual signing on its behalf likewise has authority to do so.
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Master Services Agreement | City of Santa Ana
IN WITNESS WHEREOF , the Parties have caused this Agreement to be executed by the duly authorized Officers and Agents and have set their hands and seals hereto as of the day and year written below.
Customer: City of Santa Ana
By: ______________________________ ___
Name: _______________________________
Title: ________________________________
Date: _____________________________ ___
Email: _______________________________
Provider: Smart Communications Holding, Inc.
By: ______________________________
Name: Jon Logan
Title: CEO
Date: _____________________________
Email: [email protected]
September 2, 2022
See Attached Signature Page
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Schedule of Services Agreement | City of Santa Ana
Schedule of Services Agreement
This Schedule is between the the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, hereinafter referred to as “Customer,” and Smart Communications Holding, Inc. and/or its designated subsidiary or assignee, with principal offices located at 10491 72nd Street, Seminole, FL 33777 , hereinafter referred to as “Provider. ” This Schedule is part of and governed by the Master Service Agreement, the “Agreement”, executed by the Parties. The terms and conditions of the Agreement are incorporated herein by reference.
The Customer’s Facility Name and address is: City of Santa Ana Jail, 62 Civic Center Plaza, Santa Ana, CA 92701 .
Commission Payments shall be remitted to the following:
Payee: City of Santa Ana
Address: 62 Civic Center Plaza, Santa Ana, CA 92701
Provider and Customer agree to the following terms and conditions in connection with Provider’s installation and provision of inmate communication services to Customer’s Facility:
Inmate Telephone System
1. Customer grants to Provider the exclusive right to install and maintain Inmate Telephone Services within and throughout Facility, including for any future expansion of telephone service to buildings or locations under contro l of Facility, during the term of this Agreement.
2. Provider will make available to each inmate at Customer’s Facility one free phone call per week, up to fifteen (15) minutes in length, to satisfy the needs of indigent inmates.
3. Thereafter, Provider shall establish rates for telephone services as set forth below.
INMATE TELEPHONE SYSTEM PER
MINUTE CALL RATES
Call Type Collect PrePaid
Collect
PrePaid
Debit
Local $0.07 $0.07 $0.07
IntraState $0.07 $0.07 $0.07
InterState $0.07 $0.07 $0.07
International $0.07 $0.07 $0.07
4. This Agreement includes all other premises, whether now existing ( e.g., if a different vendor has a contract and equipment at such premises, this clause applies at the earliest termination opportunity) or subsequently acquired, under the control of Customer within Provider’s service areas. Customer will advise Provider in writing, of newl y opened, acquired, or available premises, promptly, and Provider can evaluate installation of its telephone services at these premises.
5. In consideration of the compensation paid to Customer under this Agreement, Customer expressly waives carrie r selection rights, where applicable, and Provider expressly reserves the right to select and/or contract for the loca l,
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intraLATA and interLATA carrier selections for the telephones subject to this Agreement and intended for placement at Customer locations. Smart Communications’ Responsibilities (Inmate Telephone System) 6. Provider’s telephone services and system are provided by way of Provider’s Smart-EVO™ ITS terminals, which will be installed in quantities and at locations that are mutually agreed upon by both parties. 7. Provider shall service and maintain its telephone system and Smart-EVO™ ITS terminals at Provider’s expense, except as otherwise agreed upon herein. 8. Provider shall comply with the Americans with Disabilities Act (ADA) for all equipment it provides. 9. Provider shall provide the Customer an annual review of revenue performance, facility service needs, and expansion requirements and will discuss with the Customer the appropriate action to be taken by Provider at the Customer’s request. Commissions and Payments 10. Provider agrees to pay Customer certain commissions collected from its inmate phone system. Said commission is based upon Customer’s grant to Provider exclusivity for the services described herein, including secure two-way electronic messaging, video visitation, and entertainment. 11. Provider shall make monthly commission payments to Customer in the amount of sixty percent (60%) of revenues generated from all phone calls made on its Inmate Telephone System, regardless of call type or call rate. Provider shall additionally pay Customer 100% of revenue generated from inbound voicemail messages, which are provided at a fixed rate of $1.00 per voicemail. 12. Starting the first month after Provider’s system and services are installed and live, Provider will pay Customer said commission payments on or before the 30th day of the month. 13. Commission schedule is based on rate caps as of the time Provider's proposal was made. To the extent the Federal Communications Commission (FCC) or other governing body changes allowable rates, Provider shall have the right to renegotiate commissions, which the parties agree to do in good faith. Customer’s Responsibilities (Inmate Phone System) 14. Customer agrees to provide adequate space for installation of Provider’s Smart-EVO™ ITS terminals, and easy accessibility for inmate use during the normal operating hours. In the event Customer is not the owner of the premises, Customer shall, where necessary, obtain permission from the building owner or owner’s agent for the placement of the ITS terminals, and shall be responsible for any fees for use of required riser cable and electric power. 15. Customer agrees to maintain the area around the ITS terminals and ensure safe and ready access by inmates. 16. Customer agrees to allow Provider access to perform maintenance during the established hours of accessibility as jointly agreed by the parties, except when access must be denied to ensure the safety of Provider service personnel and/or to maintain institutional control. 17. Customer agrees to allow Provider, with prior written approval of Customer, access to and use of house cable and inside wire at no cost, in order to install and provide telephone service. Any new house cable or inside wire required during the contract term will be at the sole expense of the Provider, unless otherwise negotiated with Customer.
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18. Customer agrees that any relocation, expansion, addition, or removal of ITS hardware, equipment, or terminals, which would result in extraordinary expenses must be agreed to by Provider in advance of the cost being incurred or alternately, the cost be paid by Customer. 19. Customer agrees to exercise reasonable and ordinary care to prevent the loss through theft or damage to the ITS terminals and equipment from any source. 20. Customer agrees to, at its option, purchase and provide enclosures at its own expense for Telephones. In the event Customer elects to provide its own enclosures, Customer shall be responsible for installation and maintenance of said enclosures. 21. Customer represents and warrants that Provider’s ITS system will be installed on property owned by the Customer, or if Customer is not the owner of the premises, Customer has obtained permission from the Facility’s owner or owner’s agent. SmartTablet™ and Secure Network 22. The SmartTablet™ system and its entire supporting infrastructure are provided at no cost to Customer or inmates. 23. Provider will furnish the proprietary SmartTablet™ on an initial 1:2 inmate to tablet ratio based on the Average Daily Population (“ADP”). Thereafter, usage will be monitored and increased for a given housing area if usage rates for that area exceed 40% on average. Sufficient reserve tablets shall also be provided. Customer shall determine which inmates have access to the SmartTablets™. 24. The SmartTablet™ is a custom, wireless, ruggedized and correctional grade tablet of our custom specifications that will connect to our secure network. 25. The SmartTablet™ software operating system and applications are all custom-compiled for a corrections environment to ensure that only the minimum operating system components and applications are present. The inmate only has access to applications that are approved for their use, and the operating system is only allowed to connect to our own secure wireless network within the facility. 26. The network itself is designed to facilitate applications within a corrections environment. We utilize a deny-by-default policy on all traffic, so nothing may traverse the network unless specifically allowed and enabled. We utilize a defense-in-depth strategy which employs many layers of security. If any one layer of security is breached, there are many others to provide continuing protection. Distribution and Refurbishment Plan (SmartTablets™) 27. We will provide a tablet charging station and “home base” within each housing unit within the facility. These home bases will be permanently installed into a housing area (e.g. wall mounted). Each home base provides the necessary connections for charging the tablets, as well as a convenient storage location to ensure all tablets are accounted for during non-usage times. 28. Each tablet is assigned to a specific housing area and will only allow inmates within that housing area to sign in and use a tablet. Individual tablets are not assigned to specific inmates. Any inmate in a given housing unit may use any tablet that is assigned to that housing unit. If a tablet that an inmate is using stops working, they can return it to a deputy for maintenance, and then take a different tablet and sign on and gain full access to their account and content. Provider will provide to the Customer a sufficient number of extra SmartTablets™ so that the available number of SmartTablets™ will always meet the approved ratio. In the event a tablet stops working, no longer holds a charge, is damaged, or is otherwise in need of service, facility staff can replace the malfunctioning tablet with a new
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working SmartTablet™. We will provide pickup and delivery of malfunctioning and replacement SmartTablets™ at no charge to the Sheriff’s Office. Damage (SmartTablets™) 29. The tablets provided are ruggedized for use in a correctional setting. They have been drop tested from two stories high to a concrete floor without damage; however, if an inmate is determined, they can be damaged enough to require repair. Should this occur, the facility will be required to fill out a damage report form. We will seek restitution from the inmate with the assistance of your agency. SmartInmate™ Electronic Messaging 30. Provider will provide a fully functional electronic messaging system for the inmates of the Customer’s Facility (SmartInmate™). Provider is responsible for providing and installing all of the hardware, the software to include the operating systems and application software, and all networking requirements needed for operation of the system. Provider shall be exclusively entitled to all revenue derived from electronic messaging and photo delivery. 31. Provider will provide at no cost to Customer the labor for the installation of the SmartInmate™ electronic messaging system. 32. Provider will provide at no cost to Customer the labor, hardware, and software needed for the continued operating, maintaining, and networking of the electronic messaging system. 33. Provider is responsible for all the costs and future costs associated with any modification, reconfiguration, or upgrade of the electronic messaging system at the Customer’s Facility. These costs do not include the costs of the actual electrical power. 34. Provider will provide each inmate at Customer’s Facility with credits for two (2) messages per week at no charge, to satisfy the needs of indigent inmates. 35. Customer shall have the capability of monitoring and reviewing all electronic messages and attachments sent through the electronic messaging system, except those messages deemed to be privileged under law between attorney and client. Further, Provider will maintain a record of all electronic messages sent through the electronic messaging system for a period of seven (7) years from the time the message is sent. 36. Friends and Family can access the electronic messaging and photo delivery system via the SmartInmate.com website. 37. Electronic Messaging. Each email message is billed at fifty cents ($0.50), which corresponds to 50 credits. 38. Photo Delivery Service. Each approved photo is billed at one dollar ($1.00), which corresponds to 100 credits. Customer’s Responsibilities (SmartInmate™ Electronic Messaging) 39. Customer will provide access to the Customer Jail Facilities and space within the Facilities, subject to operational security requirements, for Provider to install, network, and maintain the electronic messaging system. Emergency access to the system will be granted as needed Monday through Friday 8:00 am to 4:00 pm. Non-emergency access will be granted within twenty-four (24) hour notice by Provider. 40. Customer will include information regarding the SmartInmate™ messaging system in Facility’s Inmate Handbook and in all other areas where information on the Inmate Telephone System is located.
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41. Customer will provide information regarding the SmartInmate™ messaging system in at least one location next to the inmate mailing address on Customer’s website, with a link to the SmartInmate.com website. 42. Upon completion of installation and appropriate system testing, Customer will allow the electronic messaging to go live within forty-eight (48) hours’ notice of system availability. 43. Customer will provide a list electronically twice each day of all inmates residing in the Customer Jail Facilities and their current housing assignments. Provider will use this listing to ensure that each inmate is authorized to use only those kiosks and tablets appropriate to their housing assignment. 44. Customer will give prompt notice, in writing, to Provider of any trouble or irregularity in the functioning of the electronic messaging system, as a whole. Patented MailGuard Postal Mail Elimination® System 45. Provider is the exclusive licensee of MailGuard®, the patented postal mail elimination system covered by U.S. Patent No. 1,0291,617 and multiple pending patent applications. 46. Provider shall provide its patented MailGuard Postal Mail Elimination® system at no cost to Customer. Provider’s MailGuard® service converts regular incoming postal mail into an electronic document that is delivered to the inmate recipient via the SmartTablets™ or SmartKiosk™ within the Customer’s Facility. 47. Provider shall provide all the equipment and support services to operate the MailGuard® system and transmit incoming routine postal mail into an electronic document to be delivered to the inmate on the SmartTablets™ or SmartKiosk™ at no cost to Customer. 48. For purposes of this agreement, “routine mail” means all regular incoming correspondence between inmates, family and friends and excludes all legal mail, packages, books, magazines, periodicals and religious mail. All legal mail, packages, books, magazines, or other non-routine inmate mail will still be sent to Customer’s Facility for delivery. 49. MailGuard® will only integrate with and transmit incoming routine mail to the SmartTablets™ or SmartKiosk™. 50. Provider is responsible for all the future costs associated with any modification, reconfiguration, or upgrade of the MailGuard® system at the Customer Jail Facilities. These costs do not include the costs of the actual electrical power. 51. MailGuard® shall become the Inmates’ designated Agent to process and electronically deliver incoming routine inmate mail pursuant to Customer’s mail policy which shall promote the intent of this Agreement. 52. Customer will instruct and publish on its website that all incoming routine mail must be sent to the designated Post Office Box for electronic delivery via the MailGuard® system. 53. Provider shall be solely responsible for the cost of maintaining the Post Office Box designated by the Customer for incoming routine mail to be sent. 54. Provider will retrieve incoming routine mail from the designated Post Office Box and process and transmit that mail in an expeditious manner. 55. The MailGuard® public website will allow inmates to log into their account and retrieve electronic copies of their processed incoming routine mail for thirty (30) days from the date of their release from the Customer’s Facility.
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56. Provider will maintain electronic records for a period of seven (7) years from the date of the inmate’s release from the Customer’s Facility. During the term of this Agreement and upon request, we will provide Customer with electronic copies of the requested record for the purpose of inspecting, examining, and auditing the Provider’s records directly relevant to Customer’s Facility. 57. MailGuard® will provide Customer with the capability of monitoring and reviewing all electronic mail sent through the MailGuard® system, except those messages deemed to be privileged under law between attorney and client. Customer’s Responsibilities (MailGuard®) 58. Customer shall be responsible for informing inmates and inmates’ friends and family that all routine correspondence must be sent to the designated MailGuard® Post Office Box. Customer will include information regarding the MailGuard® system in the Inmate Handbook and in all other areas where information regarding the Inmate Mail Policy and Procedures are located. 59. Customer will provide information regarding Customer’s incoming postal mail policy, the MailGuard® system and the MailGuard® procedure for processing and/or disposing of all incoming mail and pictures in at least one location next to the inmate mailing address on the Customer’s website and very clearly state that all incoming routine mail MUST be mailed to the MailGuard® designated Post Office Box. 60. Customer will instruct on its website that all incoming routine mail must be sent to the designated Post Office Box for electronic delivery via the MailGuard® system and display information regarding the Customer’s incoming postal mail policy, the MailGuard® system and the MailGuard® procedure for processing and/or disposing of all incoming mail and pictures. 61. Should the Customer receive incoming routine mail instead of the designated Post Office Box, the Customer will be responsible for the delivery of said mail to MailGuard® for processing. 62. Upon completion of installation and appropriate system testing, Customer will allow the MailGuard® system to go live within forty-eight (48) hours’ notice of system availability. 63. Customer will provide a list electronically twice each day of all inmates residing in the Customer Jail Facilities and their current housing assignments. 64. Customer will give prompt notice in writing to Provider of any trouble or irregularity in the functioning of the MailGuard® system. Patented MailGuard Legal™ System 65. Provider is the exclusive licensee of MailGuard Legal™, the patented postal mail elimination system for legal mail covered by U.S. Patent No. 10,659,630 and other pending patent applications. 66. Provider will provide, install, and maintain its patented MailGuard Legal™ Mail system, which will include a sufficient number of MailGuard Legal™ Mail Scanning Carts to handle the volume of legally privileged mail or other mail deemed to be legal mail (the “Legal Mail”) to be processed by the Facility. 67. Customer acknowledges and agrees that Legal Mail must be opened in the presence of the inmate. 68. Provider will install and maintain its proprietary software and the additional infrastructure necessary to operate its patented MailGuard LegalTM system, at no cost to Customer. 69. The Legal Mail may be scanned in the presence of the inmate for electronic delivery to the inmate or printed to hard copy for physical delivery to the inmate, in accordance with Provider’s patented MailGuard LegalTM
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system. 70. Customer understands and agrees that the MailGuard LegalTM system does not allow for any electronic copies of Legal Mail to be monitored, reviewed, or investigated. 71. Customer agrees to adhere to all applicable laws in order to maintain the privileged nature of privileged communications while using or supervising the inmates’ use of Provider’s patented MailGuard LegalTM Mail system. Video Visitation 72. Provider will provide at no cost to Customer a fully functional video visitation system for the inmates of Customer’s Facility. Provider is responsible for providing all hardware (i.e. tablets and kiosks), the software (including the operating systems and application software), and all networking requirements needed for operation of the system. Provider shall have the exclusive right over any other vendor to provide the services of and to derive revenue from remote video visitation. 73. Provider’s video visitation system will be accessible to inmates via video visitation kiosks that will be installed in quantities and locations as agreed by the Parties, including onsite video visitation (public) kiosks and/or lobby kiosks. 74. Provider will provide at no cost to Customer the labor, hardware, and software needed for the continued operating, maintaining, and networking of the video visitation system, including any public or lobby kiosks. 75. Provider is responsible for all the costs and future costs associated with any modification, reconfiguration, or upgrade of the video visitation system at Customer’s Facility. These costs do not include the costs of the actual electrical power. 76. Provider will provide Customer with the capability of monitoring the video visitations, except those visitations deemed to be privileged under law between attorney and client. Provider will maintain a record of all parties of the video visitation system for a period of seven (7) years from the time of the visitation. 77. Friends and Family can access and purchase and schedule the video visitation sessions via the Smartjailmail.com website. 78. Remote video visitation will be made available to inmates 7 days a week, in keeping with the same hours and time availability of the inmate phone system. 79. Onsite video visitations shall be provided at no change. Remote video visitations with an attorney shall also be provided at no charge. In addition, Provider will make available to each inmate at Customer’s Facility one free remote video visitation session per week, up to fifteen (15) minutes in length, to satisfy the needs of indigent inmates. 80. Thereafter, remote video visitation sessions (scheduled or on demand) will be billed at $0.15 per minute, subject to change by mutual agreement of the parties. 81. Provider shall pay Customer a commission in the amount of fifty percent (50%) of the revenue collected from use of its remote video visitation system. 82. Provider shall pay commissions to Customer on a monthly basis, no later than thirty (30) calendar days from the end of each calendar month for which the remote video visitation services are provided.
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Grievances, General and Medical Requests 83. We shall provide at no cost to the Customer and Inmate electronic general and medical requests as well as well as electronic grievance forms via the SmartTablet™ or SmartKiosk™. 84. Our System presents Inmates with a list of available forms, and once a form has been selected and submitted, it is automatically routed to the appropriate person or department for processing. Law Library 85. Provider shall provide access to a law library at no cost via SmartTablet™ or SmartKiosk™ devices. The law library provides access to Federal and State statutes and case law, as well as a legal dictionary, practice manual, and other legal aides to assist inmates with researching material appropriate for their case. Electronic Education & Entertainment 86. Provider will provide access to its extensive SmartEd™ educational platform via the SmartTablet™, where a full suite of Educational Programs can be made available. 87. Provider shall provide access to its SmartEntertainment™ platform via the SmartTablet™ for streaming basic content (free) and premium content (at a rate of one cent ($.01) per minute). 88. Provider shall pay Customer a commission in the amount of fifty percent (50%) of revenue collected from streaming of premium entertainment content. 89. Provider shall pay commissions to Customer on a monthly basis, no later than thirty (30) calendar days from the end of each calendar month for which the entertainment services are provided. Commissary Hosting and Integration 90. At Customer’s request, Provider will host Customer’s commissary vendor’s menu on Provider’s system, at no cost to Customer. 91. At Customer’s request, Provider will integrate with Customer’s jail management system (JMS) at no cost to Customer. Customer Training 92. Upon the installation of Provider’s system, Provider shall provide Customer staff with extensive training for all services and features available to Customer pursuant to this Agreement. In addition, Provider will provide refresher or new training sessions to Customer staff as necessary, including as new staff is hired by Customer. THIS PORTION INTENTIONALLY LEFT BLANK
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Schedule of Services Agreement | City of Santa Ana
IN WITNESS WHEREOF , the Parties have caused this Agreement to be executed by the duly authorized Officers and Agents and have set their hands and seals hereto as of the day and year written below.
Customer: City of Santa Ana
By: ______________________________ ___
Name: _______________________________
Title: ________________________________
Date: _____________________________ ___
Provider: Smart Communications Holding, Inc.
By: ______________________________
Name: Jon Logan
Title: CEO
Date: _____________________________
September 2, 2022
See Attached Signature Page
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written.
CITY OF SANTA ANA
_______________________
KRISTINE RIDGE
City Manager
ATTEST:
_______________________
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
By: _______________________
TAMARA BOGOSIAN
Senior Assistant City Attorney
RECOMMENDED FOR APPROVAL:
________________________
DAVID VALENTIN
Chief of Police
Signature Page - Smart Communications Master Services Agreement and Schedule of Services
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Police Department
www.santa-ana.org/pd
Item # 23
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
September 20, 2022
TOPIC: Inmate Medical Services Agreement
AGENDA TITLE:
Approve Agreement with California Forensic Medical Group, Inc. and Wellpath to Provide Inmate Medical Services for the Santa Ana Jail (General Fund)
RECOMMENDED ACTION
Authorize the City Manager to execute an agreement with California Forensic Medical Group, Inc. and Wellpath to provide basic and emergency inmate health care services for the Santa Ana Jail in an amount not to exceed $10,070,246 including a $200,000 contingency, for a three-year period beginning October 1, 2022 through September 30, 2025, with an option for two, one-year extensions, subject to non-substantive changes approved by the City Manager and City Attorney.
DISCUSSION
The State of California, Board of State and Community Corrections (BSCC) mandates that agencies provide essential and emergency health care services to incarcerated individuals within their custody. Additionally, the City of Santa Ana’s federal and local contracts require the City to provide medical services to contract inmates.
On May 7, 2021, the City hired C Cesario Medical Consulting, LLC to assess the Santa Ana Jail's operational needs and prepare a request for proposals (RFP) for inmate medical services including regulatory issues mandated by state law and compliance with BSCC standards. Using their expertise in this highly specialized and technical area, C Cesario Medical Consulting, LLC observed the physical layout of the facility and its current operations, and analyzed several years of the Jail’s medical data and industry best practices to finalize a comprehensive RFP maintaining a balance between cost and quality.
On March 8, 2022, the Police Department issued RFP No. 22-025 for inmate medical services for an average daily population of approximately 400 inmates. On May 6, 2022, the City received proposals from three firms. An evaluation committee reviewed and rated the proposals for the following criteria:
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Technical Proposal (25%)
Scope of Services (45%)
Reasonableness of Cost (30%)
The results of the RFP evaluation are as follows:
Proposer Location Score
California Forensic Medical Group San Diego 381
NaphCare Birmingham, AL 342
Vital Medical Services Glendale 342
400 Points Possible
Among all viable proposals, California Forensic Medical Group, Inc. and Wellpath (CFMG) was the most responsive, capable, and comprehensive, and had the lowest overall cost. Their proposal was well written with a detailed description of the operational metrics to meet or achieve each of the RFP’s mandatory indicators. CFMG provided the most detailed executive summary and description of how they would deliver clinical and administrative services to meet the objectives listed in the scope of service as presented in the RFP. CFMG has a significant client presence in the state of California (currently 36 jail/police department clients). CFMG’s significant market share will provide the Santa Ana Police Department with additional resources, including: clinical, administrative and leadership when needed. CFMG has developed a comprehensive staffing plan for the Santa Ana Jail. CFMG will provide properly trained personnel to ensure a continuity of care that meets state and federal laws, including: California Title 15 and 24, U.S. Marshals Standards, Bureau of Prisons, correctional community standards for health care as per National Commission on Correctional Health Care and the Prison Rape Elimination Act guidelines.
The CFMG proposed staffing plan includes 24/7 coverage that includes: Clinical Practitioner Services that provide direct patient care, assess and manage acute and chronic illnesses, prescribe medication, assess the need for off-site services and referrals, manage overall medical services, and supervise delivery of medical care. Registered nurses will manage a sick call program, conduct receiving screenings, conduct health assessments, and operate a detox program. CFMG will also verify and administer medications, provide wound care, and conduct urgent sick calls. CFMG’s mental health services consist of clinical services and consultation for patients with serious mental illnesses, suicidal ideation, and/or behavioral disturbances. CFMG will handle mental health intakes, referrals, crisis management and suicide prevention measures. Additionally, CFMG will oversee special housing units (i.e., segregation, detox, and mental health housing) and offer both individual and group counseling services.
Lastly, CFMG will provide discharge planning to patients receiving mental health services and will liaison with community resources.
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Finally, a multi-disciplinary Quality Improvement (QI) Committee will direct medical activities at the Jail. The site Medical Director will lead the QI Committee, which will also include the Health Service Administrator, site Safety Coordinator, Dentist, Mental Health Coordinator, and appropriate Santa Ana Police Department representative(s). The QI Committee will be responsible for performing monitoring activities, discussing the results, and implementing corrective actions if needed.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Funds for this agreement are available and will be budgeted in future fiscal years for expenditure in the Jail Operations, Contract Services account (no. 01114475-62300) as follows:
Fiscal
Year
Accounting Unit -
Account No.
Fund
Description
Accounting Unit,
Account
Description
Amount
FY 22-23
(Oct.-June) 01114475-62300 General Fund Jail Operations - Contract Services $ 2,444,993
FY 23-24
(July-June) 01114475-62300 General Fund Jail Operations - Contract Services $ 3,331,841
FY 24-25
(July-June) 01114475-62300 General Fund Jail Operations - Contract Services $ 3,429,796
FY 25-26
(July-Sept.) 01114475-62300 General Fund Jail Operations - Contract Services $ 863,616
Total: $10,070,246
The annual amounts above include a monthly allocation of the $200,000 contingency. Any portion of the contingency unspent in a fiscal year will be carried forward for possible expenditure in a subsequent fiscal year during the period of the agreement.
EXHIBIT(S)
1. Agreement with California Forensic Medical Group, Inc.
Submitted By: David Valentin, Police Chief
Approved By: Kristine Ridge, City Manager
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AGREEMENT FOR INMATE HEALTH CARE SERVICES
at City of Santa Ana, California
Effective October 1, 2022 through September 30, 2025
This Agreement for Inmate Health Care Services (hereinafter, the “Agreement ”) entered into by and between the City of Santa Ana, a political subdivision in the State of California (hereinafter, the “City”), acting by and through its duly elected City Council , (hereinafter, the “Council”) and California Forensic Medical Group, Inc., and Wellpath (hereinafter referred to collectively as, “Contractor “CFMG”), a California Professional Medical Corporation.
RECITALS
WHEREAS, in accordance with applicable laws, the City is obligated and responsible for providing, quality health care to Inmates and Detainees, (“City Inmates/Detainees”) housed at the Santa Ana Detention Facility located at 62 Civic Center Plaza, Santa Ana, California (hereinafter, "SAJ"); and
WHEREAS, CFMG is in the business of providing correctional health care services and desires to provide such services on behalf of the City to the Jail Population under the terms and conditions hereto.
NOW, THEREFORE, in consideration of the covenants and promises hereinafter made, the Parties hereto agree as follows:
DEFINITIONS
CFMG Chief Clinical Officer– CFMG’s Chief physician who is authorized to manage the terms and conditions of this Agreement.
City Inmates/Detainees – An Inmate is an adult or juvenile who is incarcerated at the SAJ. A Detainee is an adult or juvenile whose sentence has not yet been adjudicated and is held as a pre-trial detainee or other individual held in lawful custody. City Inmates/Detainees may be housed in the SAJ or in another jurisdiction's correctional facility. However, City Inmates/Detainees hous ed in another jurisdiction are excluded from the provisions of this Agreement, unless CFMG administers health care services at the other jurisdiction's facility and is specifically set forth below.
Contract Professionals – Physicians or other clinicians retained by CFMG as contractors rather than employees.
Contract Year – The initial, and any successive, twelve (12) month period beginning with the effective date of the Agreement.
Covered Persons – An Inmate/Detainee who is: (1) part of the SAJ’s MADP; and (2) Fit for Confinement; and (3)(a) incarcerated in the SAJ;. Covered Persons include Other County Inmates/Detainees for purposes of delivery of basic health care services, however, the cost of certain services provided to Other County Inmates/Detainees shall be borne by the County as set forth in Section 5.0 of this Agreement.
Fit for Confinement – A determination made by a CFMG authorized physician that an Inmate/Detainee is medically stable and has been medically cleared for acceptance into the SAJ. Such determination shall only be made after resolution of any injury or illness requiring immediate transportation and treatment at a hospital or similar facility.
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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Health Care Staff – Medical, mental health and support staff provided or administered by CFMG.
In-Patient Hospitalization Off -Site Medical Facility - Admission of a Covered Person to a licensed healthcare facility for treatment of a medical condition.
Jail Population - Covered Persons currently housed at the Santa Ana City Jail.
Long Term Care Facility Services - Provision of long-term medical and/or mental health care occurring on the premises of a licensed healthcare facility.
Mental Health Care - Treatment of mental health conditions as diagnosed by a licensed professional as occurring on the premises of the Santa Ana City Jail.
Monthly Average Daily Population (“MADP”) – The average number of Inmates /Detainees housed in the SAJ on a daily basis for the period of one month. The MADP shall include, but separately list, Other County Inmates/Detainees held at the SAJ. The MADP shall be figured by summing the daily population for the SAJ and Other County Inmates/Detainees (as determined by a count performed at the same time each day) for each day of the month and dividing this sum by t he total number of days in the month. Jail records shall be made available to CFMG upon request to verify the MADP. Parolees and escapees shall not be considered part of the Jail's MADP.
NCCHC – The National Commission on Correctional Health Care.
Off-Site Dental Services- Dental care which is medically necessary, as determined by the Chief Clinical Officer, or their designee, but which must occur outside of the Santa Ana City Jail due to the need for specialized dental equipment or expertise.
On-Site Dental Services- Dental care which is medically necessary , as determined by the Chief Clinical Officer, or their designee, and which can be provided on the premises of the Santa Ana City Jail utilizing currently available dental equipment and professional staff.
Other County Inmate/Detainee – An Inmate/Detainee under the jurisdiction of another county, state or federal agency, who is housed at the SAJ.
Pathology/Radiology Services - Medical diagnostics or testing through the use of laboratory or imaging equipment.
Pharmacy Services - The ordering, storage and administration of medically necessary prescription drugs, occurring on the premises of the Santa Ana City Jail.
Physician Extender – An advanced level healthcare professional such as a Nurse Practitioner, Physician Assistant, or Clinical Nurse Specialist.
Specialty Services – Medical services that require licensed physicians in a specialty such as obstetrics, gynecology, or dermatology or other specialized field of medicine, excluding medical services that are otherwise provided for in this Agreement.
Utilization Management Services - Review of medical claims data undertaken for the purpose of improving efficiency and achieving cost savings, including, when needed, the processing of medical claims for patients in the custody of the United States Marshals Service.
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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Vision Care - Medically necessary care for eye diseases or conditions, including the prescribing and provision of glasses.
ARTICLE I
HEALTH CARE SERVICES
1.0 SCOPE OF SERVICES. CFMG shall administer health care services and related administrative services at the SAJ according to the terms and provisions of this Agreement. The costs of the various health care services shall be borne by CFMG or the City as set forth in this Article.
1.1 GENERAL HEALTH CARE SERVICES. CFMG will arrange and bear the cost of the following health care services:
1.1.1 RECEIVING SCREENING . A receiving screening of a Covered Person shall be performed as soon as possible after the Covered Person’s booking into the SAJ, not to exceed four (4) hours after the Covered Person’s arrival at the SAJ.
1.1.2 HEALTH ASSESSMENT. A health assessment of a Covered Person shall be performed as soon as possible, but no later than fourteen (14) calendar days after the Inmate/Detainee's arrival at the SAJ. The health assessment shall follow current NCCHC guidelines.
1.1.3 SCHEDULED SICK CALL. A qualified healthcare professional shall conduct sick calls for Covered Persons on a timely basis and in a clinical setting. A Physician Extender will be available to see Covered Persons at least once per week.
1.2 AMBULANCE SERVICE. CFMG shall not be responsible for the provision and/or cost of any ambulance services, but shall arrange for Covered Persons to be transported by ambulance when deemed by Contract Professionals to be necessary.
1.3 BODY CAVITY SEARCHES/COLLECTION OF PHYSICAL EVIDENCE. CFMG staff will not perform body cavity searches or collect physical evidence (blood, hair, semen, saliva, etc.).
1.4 DENTAL. CFMG shall arrange and bear the cost of on-site dental services, in accordance with NCCHC standards, of all Covered Persons. CFMG shall not bear the cost of any off- site dental services required by any Inmate/Detainee or Other County Inmate/Detainee.
1.5 ELECTIVE MEDICAL CARE. Contractor shall not be responsible for the provision or cost of any elective care. In the event a member of the Jail Population requires elective care, the Inmate/Detainee, City, or relevant outside agency shall be responsible for al l costs. Elective medical care shall be defined as care which, if not provided, would not, in the sole opinion of Contractor’s Chief Clinical Officer or designee, cause the Inmate/Detainee's health to deteriorate or cause harm to the Inmate/Detainee's wellbeing. Decisions concerning elective medical care shall be consistent with the applicable American Medical Association (AMA) Standards.
1.6 IN-PATIENT OFF -SITE HOSPITALIZATION. CFMG shall not be responsible for the provision or cost of any in-patient hospitalization services at an off-site medical facility, but shall make all arrangements for Covered Persons, including but not limited to, referrals, appointments, authorizations, transportation, and billing to receive in-patient hospitalization services at an off-site medical facility when medically necessary.
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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1.7 LONG TERM CARE. CFMG shall not be responsible for the provision or cost of any long-term care facility services, but shall arrange for Covered Persons to receive long -term care facility services when medically necessary.
1.8 MENTAL HEALTH CARE . CFMG shall arrange and bear the cost of on- site mental health services for Covered Persons which shall include evaluations, referrals, crisis management, suicide intervention, individual therapy, basic community linkage, and continuity of care. CFMG shall not be responsible for the provision or cost of any off-site or inpatient mental health services, but shall make all arrangements for Covered Persons, including but not limited to, referrals , appointments, authorizations, transportation, and billing to receive off -site or inpatient mental health services when medically necessary.
1.9 PATHOLOGY/RADIOLOGY SERVICES. CFMG shall arrange and bear the cost of on -site pathology/radiology services for Covered Persons. CFMG shall not be responsible for the provision or cost of any off -site pathology or radiology services but shall arrange for Covered Persons to receive off-site pathology or radiology services when medically necessary.
1.10 PREGNANT COVERED PERSONS . CFMG shall arrange and bear the cost of on -site health care services for any pregnant Covered Person in accordance with NCCHC standards and this Agreement, however Contractor shall not arrange or bear the cost of any health care services for infants. To the extent off -site health care services are required for any pregnant Covered Person , CFMG shall make appropriate arrangements for rendering such care, but shall not be financially responsible for such care.
1.11 SPECIALTY SERVICES. CFMG shall arrange and bear the cost of on-site specialty services for Covered Persons . Contractor shall not be responsible for the provision or cost of any off -site specialty services but shall arrange for Covered Persons to receive off-site specialty services when medically necessary.
1.12 VISION CARE. CFMG shall not be responsible for the provision or cost of eyeglasses or any other vision services other than care for eye injuri es or diseases. In the event that any Covered Person requires vision services, including an ophthalmologist's serv ices, CFMG shall make all arrangements for Covered Persons, including but not limited to, referrals , appointments, authorizations, transportation, and billing for such services.
1.13 OFFICE EQUIPMENT. CFMG shall be responsible for the provision or cost of any office equipment, which shall remain the property of CFMG unless the parties agree otherwise in writing.
The City shall be responsi ble for providing utilities, and phone service required for the administrative operation of the medical unit.
1.14 OFFICE SUPPLIES. CFMG shall be responsible for the provision and cost of office supplies such as books, medical record folders, and forms as required for the administrative operations of the medical unit.
1.15 MEDICAL SUPPLIES/EQUIPMENT. With the exception of a dental chair, CFMG shall be responsible for the provision and cost of medical supplies, (including but not limited to, alcohol prep pads, syringes, etc.) and equipment , (i.e. thermometers, scales, etc.) as required to fulfill its duties under the terms of the Agreement.
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1.16 M
EDICAL WASTE. CFMG shall arrange and bear the cost of removing and properly disposing of medical waste material generated while fulfilling its duties under this Agreement in accordance with all applicable state laws and OSHA- r
egulated standards.
1.17 P
HARMACY SERVICES. CFMG shall provide monitoring of pharmacy usage as well as a Preferred Medication List. CFMG shall prescribe, purchase, receive, store, and administer medications to Covered Persons. Except as provided below, CFMG shall not bear the cost of any prescriptions and over-the-counter medications prescribed or ordered by a duly licensed CFMG provider for a Covered Person.
1.17.1 GENERAL. Prescribing, dispensing, and administering of medication shall comply with all State and Federal laws and regulations and all medications shall be dispensed under the supervision of a duly authorized, appropriately licensed or certified health care provider.
1.17.2 EXCEPTIONS. CFMG shall bear the cost of all prescription medication for Covered Persons at the SAJ who are in the sole custody of the City, and who are not detained at the SAJ pursuant to any agreement between the City and the United States Marshals Service, the State of California, or the United States government.
ARTICLE II
HEALTH CARE STAFF
2.0 STAFFING HOURS. CFMG shall provide or arrange for the provision of Health Care Staff necessary to render the health care services contemplated in Article I as set forth in the staffing plan set forth in Exhibit A, attached hereto and incorporated herein. CFMG reserves the right to assign the staff in Exhibit A to shift coverage as necessary based on operation al needs to provide the health care services under this Agreement.
2.0.1 Additional hours may be provided if mutually agreed upon by both Parties in writing, with at least 24 hours advanced notice.
2.0.2 CFMG shall provide and arrange for the provision of an on- call provider available by telephone or pager 24 hours per day and 7 days per week.
2.0.3 CFMG shall make reasonable efforts to supply the staffing levels contained in this section, however, failure to continuously supply all of the required staffing due to labor market demands or other factors outside the control of Contractor , after such reasonable efforts have been made, shall not constitute a breach of this Agreement.
2.1 STAFFING LEVELS WAIVER. Based on actual staffing needs as affected by medical emergencies, riots, increased or decreased Inmate/Detainee population, and/or other unforeseen circumstances, certain increases or decreases in staffing requirements may be waived as agreed to by the City and CFMG.
2.2 STAFF SCREENING. SAJ staff shall screen CFMG’s proposed Health Care Staff, employees, agents and/or subcontractors charged with the responsibility of providing medical services at the SAJ to ensure they do not constitute a security risk. The City and SAJ stall shall have final approval of CFMG’s Health Care Staff, employees, agents and/or subcontractors in regards to security/background clearance.
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2.3 STAFFING REIMBURSEMENT. In each instance where the actual number of hours provided is less than those in the Agreement, CFMG shall reimburse the City for the appropriate fully burdened hourly wage (to include salary and fringe benefits) for each position shortage. CFMG can count as “worked” any positions CFMG is paying PTO or sick time.
ARTICLE III
ADMINISTRATIVE SERVICES
3.0 UTILIZATION MANAGEMENT. CFMG shall provide utilization management services and administer Pharmacy services as set forth in Article I, on behalf of the City . CFMG shall follow applicable state laws and make reasonable efforts to obtain provider discounts and will keep the City/SAJ apprised of its utilization management practices.
3.1 HEALTH AND MENTAL HEALTH EDUCATION AND TRAINING . CFMG shall conduct ongoing health and mental health education and training program for SAJ staff in accordance with the needs mutually established by the City/SAJ and CFMG.
3.2 MONTHLY REPORTS. As requested by the City/SAJ, CFMG shall submit monthly health care reports concerning the overall operation of the health care services program rendered pursuant to this Agreement and the general health of the Jail Population.
3.3 QUARTERLY MEETINGS. As requested by the City /SAJ, CFMG shall meet quarterly, or as soon thereafter as possible, with the SAJ Manager or designee, concerning health care services provided in the SAJ and any proposed changes in health-related procedures or other matters, which the Parties deem necessary.
3.4 MEDICAL RECORDS MANAGEMENT. CFMG shall provide the following medi cal records management services:
3.4.1 MEDICAL RECORDS. CFMG Health Care Staff shall maintain, cause and/or require the maintenance of complete and accurate medical record s for Covered Persons who have received health care services. Medical records shall be kept separate from Covered Person's confinement records. A complete copy of an individual’s medical record shall be available to accompany each Covered Person who is transferred from the SAJ to another location for off-site services or transferred to another correctional institution. CFMG will maintain confidentiality of all medical records and shall not release any information contained in any medical record except as required by applicable law, court order, SAJ , or upon the request of the Covered Person for their own medical records. Upon termination of this Agreement, all medical records shall be delivered to and remain property of the City/SAJ.
3.4.2 COMPLIANCE WITH LAWS. Each medical record shall be maintained in accordance with the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and any other applicable state or federal privacy statute or regulation.
3.4.3 RECORDS AVAILABILITY . As needed to administer the terms and conditions provided for in this Agreement, CFMG shall make available to the City/SAJ, unless otherwise specifically prohibited or if such records are confidential pursuant to California or federal law, at the City/SAJ’s request, all records, documents and other papers relating to the direct delivery of health care services to the Jail Population hereunder.
ARTICLE IV
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PERSONS COVERED UNDER THIS AGREEMENT
4.0 GENERAL. Except as otherwise provided for in this Agreement, CFMG shall only be required to arrange and provide health care services under this Agreement to Covered Persons.
4.1 EMERGENCY MEDICAL CARE FOR JAIL EMPLOYEES AND VISITORS. CFMG shall arrange for on- site first response emergency medical care as required for SAJ employees, contractors and/or visitors to the SAJ . The medical treatment shall be limited to the extent reasonably necessary to stabilize and facilitate the individual's referral to a medical facility or personal physician.
4.2 RELEASE FROM CUSTODY . The City/SAJ acknowledge and agree that Contractor is responsible for the payment of costs associated with services rendered to Covered Persons as set forth in this Agreement only when such persons remain in the custody of, or under the jurisdiction of, the SAJ.
ARTICLE V
PERSONS NOT COVERED OR PARTIALLY COVERED UNDER THIS AGREEMENT
5.0 OTHER COUNTY INMATES/DETAINEES . CFMG shall only be responsible for health assessments, sick call, over-the counter medications, medical supplies and medical waste services for Other County Inmates/Detainees. The cost of all prescription medication and all other health care expenses shall be paid by the agency responsible for the Other County Inmate/Detainee, including those services listed in Article I of this Agreement and all other medically -related expenses associated with Other County Inmates/Detainees.
5.1 CITY INMATES/DETAINEES HOUSED IN OTHER JURISDICTIONS OR OUTSIDE THE SAJ. CFMG shall not be responsible for arranging the medical care or treatment for City Inmates/Detainees housed in other counties or jurisdic tions. The City or other agency with legal responsibility for the medical care of such persons shall be responsible for all medical expenses associated with the care and treatment of City Inmates/Detainees removed from the Jail, including, but not limited to the services listed in Article I of this Agreement and any other health care related expenses associated with those Inmates/Detainees, unless the Inmate/Detainee is housed in a facility where CFMG provides Inmate/Detainee health care services. CFMG shall not be responsible for arranging the medical care or treatment for County Inmates/Detainees housed outside the SAJ.
5.2 INJURIES PRIOR TO INCARCERATION, FIT FOR CONFINEMENT, AND ESCAPED INMATES/DETAINEES. CFMG shall not be responsible for the cost of providing off -site medical care for injuries incurred by an arrested person prior to incarceration at the SAJ or during an escape or attempted escape, including, but not limited to, medical services provided to any arrested person p rior to the person's booking and confinement in the SAJ .CFMG shall not be responsible for the cost of any medical treatment or health care services necessary to medically stabilize any arrested person presented at intake by an arresting agency with a life threatening injury or illness or in immediate need of emergency medical care. CFMG shall however, provide such care as is medically necessary until the arrested person can be transported to a medical care facility by the arresting agency or their designee. The arresting agency or the City shall bear the cost of, and be responsible for, all reasonable and necessary medical services or health care services of the individual until such time as the arresting authority can present a medically stable individual that is Fit for Confinement. To the extent CFMG is billed for medical services provided to an individual who is not Fit for Confinement, the City shall reimburse CFMG for all such costs. CFMG shall not DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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charge an additional fee to examine an individual to de termine if they are suitably Fit for Confinement.
5.3 RELEASED PERSONS, PAROLEES, ESCAPEES AND PERSONS TRANSPORTED TO
AND FROM SAJ
In no event shall Contractor be responsible for payment of any costs associated with any services rendered to any individual when said individual is released from the custody of, or no longer under the jurisdiction of, the SAJ including, but not limited to, releasees, parolees and escapees.
Furthermore, in no event shall CFMG be responsible for payment of costs associated with any medical services rendered to a Covered Person when that Covered Person is injured outside the SAJ facility during transport to or from the SAJ.
ARTICLE VI
COST OF SERVICES NOT COVERED UNDER THIS AGREEMENT
6.0 SERVICES NOT LISTED. The Parties understand and agree there will be costs incurred for health care related services as outlined in Articles I, II and III above. CFMG shall not be responsible for any expenses not specifically covered under Articles I, II and III of this Agreement. In the event any of the health care services not covered by CFMG under Articles I, II and III, or any services not listed in this Agreement are required to be provided to a member of the Jail Population as a result of the medical judgment of a physician or authorized personnel of CFMG, CFMG shall not be responsible for arranging such services and the cost of such services shall be billed dir ectly to the City.
6.1 SERVICES BEYOND THE SCOPE OF THIS AGREEMENT . The Parties understand and agree there are certain occurrences, at times, beyond the control and at other times, within the control of the Parties which may result in health care expenses outside the scope of the regular operation of a correctional facility and, therefore, outside the Scope of Services provided for in this Agreement. While the Parties agree to act in good faith and endeavor to reduce the possibility of such occurrences, in the unlikely event of an occurrence such as an Act of God, riot, explosion, fire, food poisoning, epidemic illness outbreak or any other catastrophic event, or an event caused by the actions or inactions of the City or SAJ employees, agents or contractors, which result in the need for medical care for the Jail Population, staff, visitors, or contractors, CFMG shall not be responsible for costs related to such catastrophic event s and all such costs shall be borne by the City. CFMG shall be responsible for medical costs under this Agreement associated with such an event only if such an event was caused solely by CFMG, its employees, agents or contractors.
ARTICLE VII
CITY’S DUTIES AND OBLIGATIONS
7.0 COMPLIANCE WITH HIPAA/STATE HEALTH INFORMATION PRIVACY LAWS. The City, SAJ, and its employees, agents and subcontractors shall comply with the Health Insurance Portability and Accountability Act of 1996 (hereinafter "HIPAA") and any State health information privacy laws, to the extent they are applicable. The City /SAJ shall implement policies and/or procedures in compliance with such laws.
7.1 COMPREHENSIVE MEDICAL/MENTAL HEALTH CARE. Contractor shall identify to the City/SAJ staff those members of the Jail Population with medical or mental health conditions which DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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may be worsened as a result of being incarcerated at the SAJ or which may require extensive care while incarcerated. After review of the circumstances, and when security risks permit, the City/SAJ shall make reasonable efforts, if practicable and feasible, to have such an Inmate/Detainee released, transferred or otherwise removed from the correctional setting.
7.2 RECORD ACCESS. During the term of this Agreement, and within one-hundred and eighty (180) days following the termination of this Agreement , the City shall provide CFMG , at CFMG’s request, the City and/or SAJ’s records, (including any medical records obtained by outside health care providers, hospitals ) regarding the provision of health care services/treatment to the Jail Population to the extent the City /SAJ has control of, or access to, such records. CFMG may subpoena such records in connection with the investigation of, or defense of, any claim by a t hird party related to CFMG’s conduct or related to any claims CFMG may have against a third party.
Any such information provided by the City/SAJ to CFMG that the City/SAJ considers confidential shall be kept confidential by CFMG and shall not, except as r equired by law or court order , be distributed to any third party without prior written approval by the City/SAJ.
7.3 Intentionally omitted.
7.4 SECURITY OF THE JAIL FACILITY AND WELLPATH. CFMG and the City understand that adequate security services are necessary for the safety of CFMG employees, agents, and subcontractors consistent with a correctional setting. SAJ shall provide security sufficient to enable CFMG its Health Care Staff, employees, agents and/or subcontractors to safely provide the health care services described in this Agreement. CFMG, its Health Care Staff, employees, agents and/or subcontractors shall follow all security policies, procedures and protocols of the SAJ while on the premises, or other premises under the City’s direction or control. However, any CFMG Health Care Staff, employee, agent and/or subcontractor may, at any time, refuse to provide any service required under this Agreement if such person reasonably feels the their safety and security has or will be compromised, provided that, if feasible, they first seek assistance from SAJ staff to maintain their safety and security. . CFMG shall not be liable for any loss or damages resulting from CFMG’s Health Care Staff, employees, agents and/or subcontractors failure to provide medical services due to insufficient security services.
7.5 CITY’S POLICIES AND PROCEDURES . CFMG, its Health Care Staff , employees, agents and/or subcontractors shall adhere to the City/SAJ’s policies, and procedures, that relate to or impact the provision of medical services.
7.5.1 A complete set of SAJ’s policies and procedures shall be made available for inspection by SAJ and SAJ will be provided access to those policies and procedures or may make copies of any specific section(s) it wishes to provide to its employees.
7.5.2 Any policy or procedure that may impact the provision of health care services to the Jail Population which has not been made available to CFMG Health Care Staff, its employees, agents and/or subc ontractors shall not be enforceable against CFMG unless otherwise agreed upon by the Parties.
7.5.3 Notice of a ny modification (s) or revision(s) to SAJ’s policies and procedures shall be timely provided to CFMG, its Health Care Staff, employees, agents and/or subcontractors, who shall adhere to those modified policies or procedures after such modification(s) or revision(s) have been made available to them.
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7.5.4 If any of the City’s or SAJ ’s policies and procedures specifically relate to the delivery of medical serv ices, the City/SAJ staff and CFMG staff shall review the them and if necessary, may modify or remove any provisions that conflict with CFMG’s Health Care policies and procedures, provided however that no policies or procedures shall be revised or modified if it conflicts with applicable law and/or a court order.
7.6 DAMAGE TO EQUIPMENT. CFMG shall not be liable for loss of or damage to equipment and supplies of CFMG, its agents, employees or subcontractors if such loss or damage was caused by the negligence of the City or SAJ employees.
7.7 SECURE TRANSPORTATION. SAJ shall provide security as reasonable and necessary in connection with the transportation of a member of the Jail Population to and from off-site services including, but not limited to, specialty services, hospitalization, pathology and radiology services as requested by CFMG. CFMG and SAJ staff shall coordinate for transportation to and from off - site services providers or hospitals.
7.8 NON-MEDICAL CARE OF JAIL POPULATION. The City/SAJ shall provide all non-medical personal needs and services of the Jail Population as required by law. CFMG shall not be responsible for providing, or liable for failing to provide, non- medical services to the Jail Population including, but not limited to, daily housekeeping services, dietary services, building maintenance services, personal hygiene supplies and services and linen supplies.
7.9 JAIL POPULATION INFORMATION. To assist CFMG in providing the best possible health care services to Covered Persons, SAJ shall at CFMG’s request, provide information pertaining to the Covered Person that CFMG and the City mutually identify as reasonable and necessary for CFMG to adequately perform its obligations under this Agreement.
ARTICLE VIII
COMPENSATION AND ADJUSTMENTS
8.0 ANNUAL AMOUNT/MONTHLY PAYMENTS . The base amount to be paid by the City to CFMG for Years 1-3 of the Agreement is listed in the Column 1 table below. Each amount shall be payable for a period of twelve ( 12) months , in equal monthly installments. The monthly installment for each Contract Year is listed in Column 2 of the table below. All monthly installments shall be pro-rated for any partial months and subject to any reconciliations as set forth below. The first monthly amount is to be paid to CFMG on November 1 of each Contract Year, for services administered in the month of October during each Contract Year. Each monthly payment thereafter is to be paid by the City to CFMG before or on the 1st day of the month of the month of service.
COLUMN 1- ANNUAL AMOUNT COLUMN 2- MONTHLY INSTALLMENT
Year 1 (2022-2023): $3,193,324 $266,110.33 per month
Year 2 (2023-2024): $3,289,124 $274,093.66 per month
Year 3 (2024-2025): $3,387,798 $282,316.50 per month
8.1 QUARTERLY RECONCILIATION PROCESS . CFMG will provide a quarterly reconciliation to the City for any amounts owed by either Party pursuant to the terms of this Agreement, including, but not limited to the following:
8.1.1 ADJUSTMENT FOR MADP . For each month reconciled, if SAJ ’s MADP is greater than 475 Inmates/Detainees, the compensation payable to CFMG by the DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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City shall be increased by the number of Inmates/Detainees over 475 at the per diem rate of $1.41 during Year 1 of the Agreement, $1.46 during Year 2 of the Agreement, and $1.50 during Year 3 of the Agreement.
8.2 COMPENSATION. The total amount to be expended during the term of this Agreement shall not exceed $10,070,246. This amount includes a base amount of $9,870,246 and a contingency amount of $200,000 for additional services as directed at the City’s sole discretion. Should the Facility ADP exceed 475 for a period of 30 days or more, the Parties agree to meet and negotiate in good faith an increase to the total amount expended during the term of this Agreement, subject to the approval of the City Council of the City of Santa Ana.
ARTICLE IX
TERM AND TERMINATION
9.0 TERM. The term of this AGREEMENT shall be for a period of three (3) years from October 1, 2022 at 12:01 a.m. through September 30, 2025 at 11:59 p.m. This Agreement shall renew upon the mutual agreement of the parties for up to two (2) additional one year periods on October 1st of each subsequent year with mutually agreed upon increases to the compensation, subject to approval by the Santa Ana City Council , unless this Agreement is terminated or notice of termination is given, as set forth in this Article.
9.0.1 RENEWAL. Upon each subsequent renewal beyond the initial three (3) year term of this Agreement pursuant to Paragraph 9.0, the Parties may negotiate an increase in accordance with CPI not to exceed 4.0% of the annual amount as defined in Paragraph 9.0.1.1.
9.0.1.1 CPI INCREASES. A CPI increase shall be calculated by multiplying the annual amount of the previous year by a fraction, the numerator of which is the Price Index for a defined month prior to the renewal date, and the denominator of which is the Price Index for the same month for the year immediately preceding the Agreement renewal date. However, the annual amount due for any year will not be less than the annual amount for the prior year. The “Price Index” is defined as the Consumer Price Index – All Urban Consumers, U.S. City Average, Medical Care Services (1982-84=100), published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
9.1 TERMINATION FOR LACK OF APPROPRIATIONS . This Agreement shall be subj ect to annual appropriations by the City.
9.1.1 Recognizing that termination for lack of appropriations may e ntail substantial costs for CFMG and the City, the City shall act in good faith and make every effort to provide CFMG reasonable advance notice of any p otential problem as it relates to funding or appropriations related to this Agreement.
9.1.2 If future funds are not appropriated for this Agreement , and upon exhaustion of e xisting funding, the City may terminate this Agreement without penalty or liability, by providing a minimum of thirty (30) days advance written notice to CFMG.
9.2 TERMINATION DUE TO CFMG’s OPERATIONS. The City reserves the right to terminate this Agreement immediately upon written notification to CFMG in the event that CFMG discontinues or abandons its operations, is adjudged bankrupt or is reorganized under any DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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bankruptcy law, or fails to keep in force and effective any required insurance policies. The Parties agree that termination under this provision will be considered without cause.
9.3 TERMINATION FOR CAUSE . The Agreement may be terminated for cause under the following provisions:
9.3.1 TERMINATION BY CFMG. Failure of the City to comply with any provision of this Agreement shall be considered grounds for termination of this Agreement by CFMG upon sixty (60) days advance written notice to City specifying the termination effective date and identifying the basis for termination. The City shall pay for services rendered up to the date of termination of the Agreement. Upon receipt of the written notice, the City shall have fifteen (15) days to provide a written response to CFMG. If the City provides a written response to CFMG with an adequate explanation for the basis for termination and cures the basis for termination to CFMG’s satisfaction, the sixty (60) day notice shall become null and void and this Agreement will remain in full force and effect. Termination under this provision shall be without penalty to CFMG.
9.3.2 TERMINATION BY CITY . CFMG’s failure to comply with any provision of this Agreement shall be considered grounds for termination of this Agreement by City who shall provide sixty (60) days advance written notice specifyin g the termination effective date and identifying the basis for termination. The City shall pay for services rendered up to the date of termination of the Agreement . Upon receipt of the written notice , CFMG shall have fifteen (15) days to provide a written response to the City. If CFMG provides a written response to the City with an adequate explanation for the basis of termination or cures the basis for termination to the City’s satisfaction, the sixty (60) day notice shall become null and void and this contract will remain in full force and effect. Termination under this provision shall be without penalty to the City.
9.4 TERMINATION WITHOUT CAUSE. Notwithstanding anything to the contrary contained in this Agreement, the City or CFMG may, without prejudice to any other rights it may have, terminate this Agreement for their convenience and without cause by giving no less than ninety (90) days advance written notice to the other Party.
9.5 COMPENSATION UPON TERMINATION. If any of the above termination clauses are exercised by either of the Parties to this Agreement, the City shall pay CFMG for all services rendered by CFMG up to the date of termination of the Agreement regardless of the City’s failure to appropriate funds.
9.6 PROPERTY DISPOSITION UPON T ERMINATION. Upon termination of this Agreement, CFMG shall be allowed to remove any unused property, equipment and supplies, including its proprietary policies and procedures, manuals, training materials, and forms, prepared and/or purchased by CFMG that is stored or located at SAJ at the time of termination.
ARTICLE X
LIABILITY AND RISK MANAGEMENT
10.0 INSURANCE COVERAGE. CFMG shall, at its sole cost and expense, procure and maintain during the term of this Agreement, the following coverage and limits of insurance:
10.0.1 Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
10.0.2 Automobile Liability: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and 9 (non-owned), with limit no less than $1,000,000 per accident for bodily injury and property damage.
10.0.3 Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
10.0.4 Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate.
If the CFMG maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by CFMG. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.
10.1.1 ADDITIONAL INSURED STATUS. The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of CFMG including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of a blanket endorsement to the CFMG’s insurance (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).
10.1.2 PRIMARY COVERAGE.
For any claims related to this contract caused by the CFMG’s negligent acts or omissions, the Contractor’s insurance coverage shall be primary insurance primary coverage at least as broad as ISO CG 20 01 04 13 as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self- insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the CFMG’s insurance and shall not contribute with it.
10.1.3 NOTICE OF CANCELLATION. Coverage shall not be canceled, except with notice to the City by the CFMG.
10.1.4 WAIVER OF SUBROGATION. CFMG hereby grants to City a waiver of any right to subrogation which any insurer of said CFMG may acquire against the City by virtue of the payment of any loss under such insurance. CFMG agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.
10.1.5 ACCEPTABILITY OF INSURERS. Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the Entity.
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10.1.6 CLAIMS MADE POLICIES. If any of the required policies provide coverage on a claims-made basis:
1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.
2. Insurance must be maintained and evidence of insurance must be provided for at least five(5) years after completion of the contract of work.
3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work.
10.1.7 VERIFICATION OF COVERAGE. CFMG shall furnish the Entity with original Certificates of Insurance including all required blanket endorsements (or copies of the applicable policy language effecting coverage required by this clause) to Entity before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them.
10.1.8 SUBCONTRACTORS. CFMG shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein.
10.2 INDEMNIFICATION. CFMG agrees to indemnify and hold harmless the City, its officials, agents, and employees from and against any and all clai ms, actions, lawsuits, damages, judgments or liabilities of any kind whatsoever caused by, based upon or arising out of any act, conduct, misconduct or omission of CFMG, its agents, employees, or independent contractors in connection with the performance or non-performance of its duties under this Agreement.
The City agrees to indemnify and hold harmless CFMG , its officials, agents, and employees from and against any and all claims, actions, lawsuits, damages, judgments or liabilities of any kind whatsoever caused by, based upon or arising out of any act, conduct, misconduct or omission of City, its agents, employees, or independent contractors, to the extent allowed by law. The City agrees to promptly notify CFMG in writing of any incident, claim or lawsuit of which they become aware and shall fully cooperate in the defense of such claim. The City agrees that CFMG’s indemnification and defense obligations do not apply for any costs or expenses, including attorney’s fees or settlements, incurred or effected prior to written notice to Contractor as set forth above. Upon written notice of claim, Contractor shall take all steps necessary to promptly defend and protect the City from an indemnified claim, including retention of defense counsel, and CFMG shall retain sole control of the defense while the action is pending, to the extent allowed by law.
10.3 HIPAA. CFMG, the City, SAJ, and their employees, agents and subcontractors shall fully comply with, and shall implement all necessary policies and/or procedures in order to comply with, the requirements of HIPAA as it applies to the services provided under this Agreement. The City, Jail, and their employees and agents shall indemnify and hold harmless Contractor from and against any claims of any kind made as a result of alleged or actual violati ons of HIPAA by the City and its employees, agents and subcontractors, un less such claims are proven to be caused by the sole negligence or willful misconduct of Contractor.
ARTICLE XI
MISCELLANEOUS
11.0 INDEPENDENT CONTRACTOR STATUS. It is mutually understood and agreed, and it is the intent of the Parties hereto that an independent contractor relationship be and is hereby established DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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under the terms and conditions of this Agreement . Nothing in this Agreement shall be construed to create an agency relationship, an employer/employee relationship, a joint venture relationship, or any other relationship allowi ng the City to exercise control or direction over the manner or methods by which CFMG, its employees, agents or subcontractors perform hereunder, or CFMG to exercise control or direction over the manner or methods by which the City and its employees, agents or subcontractors perform hereunder, other than as provided in this Agreement.
11.1 SUBCONTRACTING. In performing its obligations under the Agreement, it is understood that CFMG is not licensed or otherwise authorized to engage in any activity that may be construed or deemed to constitute the practice of medicine, dentistry, optometry, or other professional healthcare service requiring licensure or other authorization under state law. To comply with these requirements CFMG may engage physicians or other clinicians as independent contractors (“Contract Professionals”), rather than employees, in order to supply the clinical services required under this Agreement. CFMG shall engage Contract Professiona ls that meet the applicable professional licensing requirements and CFMG shall exercise administrative supervision over such Contract Professionals as necessary to insure the fulfillment of the obligations contained in this Agreement. Contract Professiona ls shall provide clinical services under this Agreement in a manner reasonably consistent with the independent clinical judgment that the Contract Professional is required to exercise. It is further understood that CFMG may subcontract for specialized services such as pharmacy, medical waste, medical supplies and other services or supplies which it is required to provide under this Agreement.
11.2 AGENCY. For purposes of asserting any statutory rights afforded to the City to pay providers for medical services at certain reduced rates, City designates CFMG as their agent to assert such rights and privileges.
11.3 EQUAL EMPLOYMENT OPPORTUNITY. CFMG will not discriminate against any employee or applicant for employment becau se of race, color, religion, sex, ancestry, national origin, place of birth, marital status, sexual orientation, age or handicap unrelated to a bona fide occupational qualification of the position or because of status as a disabled veteran or Vietnam -Era veteran.
Contractor will distribute copies of its commitment not to discriminate to all persons who participate in recruitment, screening, referral and selection of job applicants, and to prospective job applicants.
11.4 WAIVER OF BREACH. The waiver of either Party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent breach of the same or other provision hereof.
11.5 OTHER CONTRACTS AND THIRD- PARTY BENEFICIARIES. The Parties acknowledge CFMG is neither bound by or aware of any other existing contracts to which the City is a party and which relate to the providing of health care to Inmates/Detainees at the SAJ. The Parties agree they have not entered into this Agreement for the benefit of any third person or persons, and it is their express intention this Agreement is for their respective benefits only and not for the benefits of others who might otherwise be deemed to constitute third-party beneficiaries thereof.
11.6 FORCE MAJEURE. In case performance of any terms or provisions hereof shall be delayed or prevented because of compliance with any law, decree or order of any governmental agency or authority of local, State or Federal governments or because of riots, war, terrorism, explosions, acts of civil or military authority, acts of public enemy, public disturbances, lack of adequate security escorts, strikes, lockouts, differences with workers, earthquakes, fires, floods, Acts of God or any other reason whatsoever which is not reasonably within the control of the Party whose performance DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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is interfered with and which, by the exercise of reasonable diligence, said Party is unable to prevent; the Party so suffering may, at its option, suspend, without liability, the performance of its obligations hereunder during the period such cause continues.
11.7 MATERIAL CHANGES IN SCOPE OR CIRCUMSTANCES, OR EMERGENCY CIRCUMSTANCES. If at any time during the Term of this Agreement, the City requests a change in the scope, volume, quality/degree or quantum of services to be provided by Contractor, or the scope of services set out herein must materially be changed as a result of any of the following, any of which would result in an increase to the cost of providing the services or which Contractor notifies the City affects CFMG’s ability to provide the requested scope of services under the circumstances, (a “Material Change Circumstance”), including, but not limited to any of the following:
• There is or are new, amended, and/or repealed law(s) or regulation(s) (including statutes, codes, Agency orders/memoranda and/or case law), or changes to the Client’s policies, procedures, practices, or circumstances, any or all of which render performance under the Agreement partially or completely impracticable or impossible under the Agreement’s existing terms;
• The United States Food and Drug Administration (“FDA”) or another regulatory body approves (or issues an emergency use authorization for) a new therapy/ies or treatment modality/ies, there are changes to legal/regulatory requirements concerning the treatment of Client’s patients, and/or changes to the applicable standard of care that materially impact the Contractor’s ability to provide services and/or costs under the Agreement;
• Contractor’s performance hereunder is impacted by any event related to a Public Health Emergency (PHE) declared pursuant to Section 319 of the Public Health Service Act, a Disaster declaration pursuant to the Stafford Act (2 U.S.C. §§ 5121-5207), or any similar announcement or proclamation made by the Federal Government or any Federal Agency, any Federally recognized Native American Tribe, or any State, County/Parish or Local Government pursuant to an analogous provision of Federal or non-Federal law or rule (each, an “Emergency Circumstance”).
the parties shall follow the procedures outlined in Subsection 11.7.1 below:
11.7.1 In the event of any Material Change Circ umstance, upon notice from a Party, the Parties shall meet and in good faith re-negotiate the terms of this Agreement. Material changes agreed upon by the parties are subject to approval by the City Council for the City of Santa Ana. Changes which do not increase the overall compensation to this Agreement may be approved by the City Manager and the City Attorney. Neither Party shall unreasonably delay or withhold consent to such negotiations, or the proposed modifications resulting from such negotiations. In the event the Parties are not able to reach mutually acceptable changes to the Agreement after thirty (30) days, either Party may thereafter terminate the Agreement without cause upon providing ninety 90 days’ notice thereafter.
11.8 PERFORMANCE MEASURES. The City may assess penalties in the following amounts related to CFMG’s failure to meet the standards listed below. CFMG and City agree that such penalties may be provided as invoice credits by Contractor upon the mutual agreement of the parties in writing.
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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• A penalty of $200 per receiving screening may be assessed for CFMG’s failure to perform receiving screenings within four (4) hours of a patient’s booking at the jail. • A
penalty of $150 per health assessment may be assessed for CFMG’s failure to perform health assessments within fourteen (14) days of a patient’s booking at the jail.
11. 9 ASSIGNMENT. Except as otherwise provided herein, the Parties may not assign any of their rights or delegate any of their duties under this Agreement without the prior written consent of the other Party; provided however, that CFMG, upon notice to the City, may assign its rights or delegate its duties to an affiliate of CFMG, or in connection with the sale of all or substantially all of the stock assets or business of CFMG,. Any unauthorized attempted assignment shall be null and void and of no force or effect.
11. 10 NOTICES. Any notice of termination, requests, demands or other communications under this Agreement shall be in writing and shall be deemed delivered: (a) when delivered in person to a representative the Parties listed below; (b) upon receipt when mailed by overnight courier service, mailed by first-class certified or registered mail, return receipt requested, addressed to the Party at the address below; or (c) upon confirmation of receipt if sent by facsimile to the fax number of the Party listed below:
I
f for Contractor: If for City:
CFMG, Inc. Clerk of the City Council
Attn: Chief Legal Officer City of Santa Ana
3340 Perimeter Hill Dr. 20 Civic Center Plaza (M-30)
Nashville, TN 37211 P.O. Box 1988
Santa Ana, CA 92702
W
ith Courtesy Copy to:
Chief of Police
City of Santa Ana
60 Civic Center Plaza
Santa Ana, CA 92702
S
uch address may be changed from time to time by either Party by providing written notice as provided above.
11.1 1 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflicts of laws or rules of any jurisdiction.
11.1 2 EXECUTION AUTHORITY. By their signature below, each signatory individual certifies that they are the properly authorized agent or officer of the applicable Party hereto and have the requisite authority necessary to execute this Agreement on behalf of such Party , and each Party hereby certifies to the other than any resolutions necessary to create such authority have been duly passed and are now in full force and effect.
11.13 S
URVIVAL. The following provisions will survive any termination or expiration of the Agreement: Article VIII, Article IX and Article X.
11.1 4 COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be considered an original and all of which shall constitute but one and the same instrument.
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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11.15 TITLES OF PARAGRAPHS . Titles of paragraphs are inserted solely for convenience of reference and shall not be deemed to limit, expand or otherwise affect the provisions to which they relate.
11.1 6 SEVERABILITY. In the event that any one or more provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and this Agreement shall be construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.
1 1.17 ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement of the Parties and is intended as a complete and exclusive statement of the promises, representations, negotiations, discussions and Agreement s that have been made in connection with the subject matter hereof.
This Agreement may be amended at any time, but only with the written consent of all Parties.
I
N WITNESS WHEREOF, the Parties have caused this Agreement to be executed as their official act by their respective representative, each of whom is duly authorized to execute the same.
AG
REED TO AND ACCEPTED AS STATED ABOVE:
CITY OF SANTA ANA, CALIFORNIA
___________________________________
Name: _____________________________
Title: ______________________________
Date: ______________________________
CFMG, INC.
___________________________________
Name: Grady “Judd” Bazzel, MD
Title: President
Date: ______________________________
See attached signature page
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41 9/12/2022
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written.
CITY OF SANTA ANA
_______________________
KRISTINE RIDGE
City Manager
ATTEST:
_______________________
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
By: _______________________
TAMARA BOGOSIAN
Senior Assistant City Attorney
RECOMMENDED FOR APPROVAL:
________________________
DAVID VALENTIN
Chief of Police
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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EXHIBIT A – STAFFING MATRIX
Staffing for the Santa Ana Jail ADP - 400
Day Shift
POSITION
Mon
Tues
Wed
Thur
Fri
Sat
Sun
Hrs/
Week
FTEs
Medical Director 4 4 0.1
Mid-Level Provider NP/PA 8 8 8 24 0.6
HSA 8 8 8 8 8 40 1.0
Charge RN 12 12 12 12 12 10 10 80 2.0
RN (Sick Call/H&P) 8 8 8 8 8 40 1.0
LVN 24 24 24 24 24 24 24 168 4.2
Administrative Assistant 8 8 8 24 0.6
Psychiatric ARNP 4 4 8 0.2
Dentist 4 4 8 0.2
Dental Assistant 4 4 8 0.2
Mental Health Professional 10 10 10 10 10 10 10 70 1.75 Total Hours/FTE - Day 474 11.85
Night Shift
Charge RN 10 10 10 10 10 10 10 70 1.75
LVN 24 24 24 24 24 24 24 168 4.2
Total Hours/FTE - Night 238 5.95
Weekly Total
TOTAL HOURS/FTE - Per Week 712 17.8
DocuSign Envelope ID: 6225CE08-C2AA-4269-9AF5-9311FF666B41
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Clerk of the Council Office
www.santa-ana.org/departments/clerk-of-the-council/
Item # 24
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
September 20, 2022
TOPIC: Amend Conflict of Interest Code Policy
AGENDA TITLE:
Biennial Review Conflict of Interest Code Policy, List of Designated Classifications Required to Annual Disclosure Form (Statement of Economic Interests Form)
RECOMMENDED ACTION
Adopt a resolution amending the City of Santa Ana Conflict of Interest Code Policy.
DISCUSSION
The California State Government Code specifies that local agencies must review their Conflict of Interest Codes each even-numbered year. Changes to the codes must be adopted by the City Council as the code reviewing body for City agencies and departments.
Pursuant to State requirements, each agency in the City of Santa Ana has reviewed the classifications in their department and proposed the changes as reflected in the attached resolution. The recommendations include the addition of new classifications added to the City’s budget and deletion of positions removed from the budget or whose duties have changed and no longer include making or participating in governmental decisions. The following changes to the Conflict of Interest Code list of designated filers are reflected in the resolution attached.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact with this action.
EXHIBIT(S)
1. Resolution
2. Strikethrough Version Exhibit A to the Resolution
City Council
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Biennial Review of Conflict of Interest Policy
September 20, 2022
2 9
4 1
Submitted By: Norma Orozco, Acting Assistant Clerk of the Council Approved By: Kristine Ridge, City Manager
City Council
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2 9/20/2022
Resolution No. 2022-XXX
RESOLUTION NO. 2022-XXX
A RESOLUTION OF THE CITY COUNC IL OF THE CITY OF
SANTA ANA AMENDING THE CONFLICT OF INTEREST
CODES OF CERTAIN CITY AGENCIES AND
DEPARTMENTS
BE IT RESOLVED BY THE CITY COUNC IL OF THE CITY OF SANTA ANA AS
FOLLOWS
Section 1. The City Council of the City of Santa Ana hereby finds determines and declares as follows:
A. The various offices, agencies, and departments of the City of Santa Ana have maintained Conflict of Interest Codes pursuant to the Political Reform Act of 1974 (California Government Code sections 81000 et seq .) since the enactment of that law.
B. The last comprehensive revision of the Conflict of Interest Code of the various offices, agencies, and departments of the City is set forth in City Council Resolution No. 2021-014 adopted April 6, 2021.
C. Certain agencies and departments of the City now desire to amend the list of designated employees in the Conflict of Interest Code set forth in Resolution No. 2021-014.
Section 2. The persons holding designated positions defined in Exhibit A attached to and made part of this resolution shall file statements of economic interest pursuant to the requirements of the City’s Conflict of Interest Code.
Section 3. The disclosure categories as defined in Exhibit B are attached t o and made a part of this resolution.
Section 4. This resolution shall supersede and replace Resolution No. 20 21- 014.
Section 5. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution.
City Council
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Resolution No. 2022-XXX
ADOPTED this _______ day of September, 2022.
__________________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
SONIA R. CARVALHO, City Attorney
By: ____________________________
Laura A. Rossini
Chief Assistant City Attorney
AYES: Councilmembers:
NOES: Councilmembers:
ABSTAIN: Councilmembers:
NOT PRESENT: Councilmembers:
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2022-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on September ____, 2022.
Date: _____________________
Clerk of the Council
City of Santa Ana
City Council
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Resolution No. 2022-XXX
EXHIBIT A
CITY OF SANTA ANA
CONFLICT OF INTEREST CODE
DESIGNATED POSITIONS
2022-2024
This Conflict of Interest Code is adopted for the City of Santa Ana California pursuant to the Political Reform Act of 1974 (California Government Code, Sections 81000 g.). It consists of the model code set forth in Regulation 18730 of the Fair Political Practices Commission, incorporated herein by reference, together with the following Appendix:
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Elected Officials
Mayor 1 1
Councilmembers 1 1
Successor Agency Members 1
City Manager
City Manager 1 1
Assistant City Manager
Assistant to the City Manager
1 1
Management Analyst 1
Senior Management Analyst 1
Public Affairs Information Officer 1
Consultants 2 1
Principal Management Analyst 1
Clerk of the Council
Clerk of the Council 1
Assistant Clerk of the Council 1
City Attorney
City Attorney 1 1
Chief Assistant City Attorney 1
Assistant City Attorney 1
Deputy City Attorney 1
Senior Assistant City Attorney 1
Senior Legal Management Assistant 4
City Council
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Resolution No. 2022-XXX
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Community Development Agency
Executive Director of Community Development 1
Arts and Culture Specialist 2, 4
Community Development Analyst 2, 4
Economic Development Manager 1
Economic Development Specialist I 2, 4
Economic Development Specialist II 2, 4
Economic Development Specialist III 2, 4
Homeless Services Manager 1
Housing Authority Analyst 2, 4
Housing Authority Operations Supervisor 4
Housing Division Manager 1
Housing Programs Analyst 2, 4
Housing Specialist I 2, 6
Housing Specialist II 2, 6
Management Analyst 2, 4
Principal Management Analyst 1
Residential Construction Specialist 2, 5
Senior Community Development Analyst 2, 4
Senior Housing Specialist 2
Senior Residential Construction Specialist 2, 5
Workforce Specialist I 2, 4
Workforce Specialist II 2, 4
Workforce Specialist III 2, 4
Workforce Specialist IV 2, 4
** Consultants (Grants) 2, 4
Finance Management Services Agency
Executive Director 1 1
Accounting Manager 1
Assistant Director of Finance Management Services 1
Budget Analyst 1
Budget Supervisor 1
Administrative Services Manager 1
Management Analyst 1
Payroll Manager 1
Payroll Supervisor 1
Payroll System Analyst 1
Principal Management Analyst 1
Purchasing Supervisor 3
Buyer 3
Senior Budget Analyst 1
City Council
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6 9/20/2022
Resolution No. 2022-XXX
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Senior Financial Analyst 1
Senior Management Analyst 1
Financial Analyst 1
Supervising Accountant 1
Treasury and Customer Services Manager 1
Treasury Services Supervisor 1
Budget and Research Manager 1
Information Technology Department
Chief Technology Innovations Officer 1
Information Services and Network Manager 1
Applications/Tech Support Manager 1
Library Services Agency
Executive Director 1
Library Operations Manager 1
Principal Librarian 1
Management Analyst 1
Human Resources Department
Executive Director 1
Assistant Director of Human Resources 1
Benefits & Compensation Supervisor 1
Payroll Systems Analyst
1 Principal Human Resources Analyst 1
Risk Manager 1
Senior Human Resources Analyst 1
Worker’s Compensation Administrator 4
Parks Recreation and Community Services
Executive Director 1
Recreation and Community Services Manager 1
Recreation and Community Services Supervisor 1
Management Analyst 1
Senior Management Analyst 1
Zoo Manager 1
Zoo Curator 1
Zoo Curator of Education 1
Zoo Curator of Health 1
City Council
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7 9/20/2022
Resolution No. 2022-XXX
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Planning and Building Agency
Executive Director 1
Administrative Services Manager 1
Assistant Director of Planning and Building 1
Assistant Plan Check Engineer I 2, 7
Assistant Plan Check Engineer II 2, 7
Assistant Planner I 2, 6, 7*
Assistant Planner II 2, 6, 7*
Associate Plan Check Engineer 2, 7
Associate Planner 2, 6, 7*
Building Safety Manager 1
Building Technician 6
Code Enforcement Associate 6
Code Enforcement Manager 1
Code Enforcement Officer 6
Code Enforcement Principal 2, 6
Code Enforcement Supervisor 2, 6
Combination Building Inspector 6
Management Aide 2,
Management Analyst 2, 4
Part-time Permit Services Technician 6
Part-time Planning Technician 2, 6, 7
Permit Services Processor 6
Permit Services Supervisor 2, 6, 7**
Permit Services Technician 6
Planning Assistant 2, 6, 7
Planning Manager 1
Planning Technician 2, 6, 7
Plans Examiner Electrical 2, 6
Plans Examiner Plumbing/Mechanical 2, 6
Principal Planner 2, 6, 7**
Senior Accounting Assistant 4
Senior Code Enforcement Officer 6
Senior Combination Building Inspector 6
Senior Community Planner 1
Senior Electrical Inspector 6
Senior Electrical Systems Specialist 2, 6 ***
Senior Plan Check Engineer 2, 7
Senior Planner 2, 6, 7 ****
Senior Plumbing / Mechanical Systems Specialist 2, 6 *** Supervisor of Inspections 2, 6, 7
City Council
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8 9/20/2022
Resolution No. 2022-XXX
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Police Department
Police Chief 1
Jail Administrator 1
Correctional Manager 1
Police Administrative Manager 1
Police Captain / Deputy Chief 1
Police Communications Manager 4
Police Lieutenant /Commander 1
Police Systems Manager 1
Police Administrative Budget Manager 1
Public Works Agency
Executive Director 1
Administrative Services Manager
NPDES Manager
1 2, 5, 7
Assistant Public Works Maintenance Manager 1
Deputy Public Works Director/City Engineer
Senior Construction Inspector
Construction Inspector
1 5
5 Contracts Administrator 5
Deputy City Engineer 1
Principal Civil Engineer 2, 5, 7
Projects Manager 1
Deputy Public Works Director/ Maintenance Services Manager 1 Senior Civil Engineer 2, 5, 7
Senior Engineer
Associate Engineer
Civil Engineer
2, 5, 7
2, 5, 7
2, 5, 7
Stores & City Yard Property Specialist
Street Maintenance Supervisor
2, 5, 7
1 Fleet Supervisor 2, 5, 7
Building Maintenance Supervisor 2, 5, 7
Tree Maintenance Supervisor 1
Deputy Public Works Director/ Water Resources Manager 1 Water Services Supervisor 1
Deputy Public Works Director/ Construction Services Manager Senior Management Analyst
1 1
General Maintenance Supervisor 1
Park Services Inspection Supervisor 1
Park Services Superintendent 1
Board / Commission Members
Arts and Culture Commission 1
Community Development Commission 1
City Council
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9 9/20/2022
Resolution No. 2022-XXX
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Environmental and Transportation Advisory Commission 1 Historic Resources Commission 1
Personnel Board 1
Parks, Recreation and Community Services Commission 1
Planning Commission 1 1
Workforce Development Board 1
Successor Agency 1
Housing Authority 1
1 The Mayor, City Council, City Manager, City Attorney, Executive Director of Finance Management Services Agency, and Planning Commissioners file Economic Disclosure Form 700 with the Fair Political Practices Commission per Government Code Section 87200.
2 City Consultants shall be included when the City Manager determines in writing that a particular consultant is hired to perform duties that would constitute a “desig nated position”. Such written determination shall include a description of the consultant’s duties and, based upon the description, a statement of the extent of disclosure requirements. The determination by the City Manager is a public record and shall b e retained for public inspection in the same manner and location as this conflict of interest code.
City Council
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Resolution No. 2022-XXX
EXHIBIT B
CITY OF SANTA ANA
CONFLICT OF INTEREST CODE
DISCLOSURE CATEGORIES
Required filers must review Form 700 Schedules and complete forms as mandated by the specific Disclosure Category designated.
Disclosure Category 1: Full Disclosure
Persons in this category shall disclose all applicable investments, business positions, income, any interests in real property located in the City or within a two -mile radius outside of the City limits, and, any interests in property owned or used by the City.
Disclosure Category 2: Decision Making Authority Affecting Real Property Persons in this category shall disclose all applicable investments, business positions, and income, including loans and gifts, from sources which engage in land development, construction, or the acquisition or sale of real property; also reportable are all interests in real property located in the City and within a two-mile radius outside of the City limits or of any property owned or used by the City.
Disclosure Category 3: City-wide Purchasing Responsibilities Persons in this category shall disclose applicable investments, business positions, and income, including loans and gifts, from sou rces which provide services, supplies, materials, machinery, or equipment of the type utilized by the City
Disclosure Category 4: Department/Division Purchasing Responsibilities Persons in this category shall disclose all applicable investments, business positions, and income, including loans and gifts, from sources which provide services, supplies materials, machinery, or equipment of the type utilized by the designated employee s agency, department, or division.
Disclosure Category 5: Public Works/Construction Projects Responsibilities Persons in this category shall disclose all interests in and income from businesses engaged in construction, landscaping, street repair, traffic signal installation or modification or the supply of materials for any of the above.
Disclosure Category 6: Regulatory Power
Persons in this category shall disclose all applicable investments, business positions, and income, including loans and gifts, from any source which is subject to the regulatory, permit, or licensing authority of the designated employee’s agency, department, or division.
Disclosure Category 7: Planning and Engineering
Persons in this category shall disclose all applicable investment, business positions, and income, including loans and gifts, from any sou rce engaged in engineering, planning, and design services.
City Council
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11 9/20/2022
CITY OF SANTA ANA
CONFLICT OF INTEREST CODE
DESIGNATED POSITIONS
20221-20242
This Conflict of Interest Code is adopted for the City of Santa Ana California pursuant to the Political Reform Act of 1974 (California Government Code, S ections 81000 g.). It consists of the model code set fo rth in Regulation 18730 of the Fair Political Practices Commission, incorporated herein by reference, together with the following Appendix:
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Elected Officials
Mayor 1 1
Councilmembers 1 1
Successor Agency Members 1
City Manager
City Manager 1 1
Assistant City Manager
Assistant to the City Manager
1 1
Management AnalystAssistant
1 Senior Management Analystssistant 1
Public Affairs Information Officer 1
Consultants 2 1
Principal Management Analyst 1
Clerk of the Council
Clerk of the Council 1
Assistant Clerk of the Council 1
City Attorney
City Attorney 1 1
Chief Assistant City Attorney 1
City Council
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12 9/20/2022
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Assistant City Attorney 1
Deputy City Attorney 1
Senior Assistant City Attorney 1
Senior Legal Management Assistant 4
Community Development Agency
Executive Director of Community Development 1
Arts and Culture Specialist 2, 4
Community Development Analyst 2, 4
Economic Development Manager 1
Economic Development Specialist I
2, 4
Economic Development Specialist II 2, 4
Economic Development Specialist III 2, 4
Homeless Services Manager 1
Housing Authority Analyst 2, 4
Housing Authority Operations Supervisor 4
Housing Division Manager 1
Housing Programs Analyst 2, 4
Housing Specialist I 2, 6
Housing Specialist II 2, 6
Loan Specialist
2 Management Analyst 2, 4
Principal Management Analyst 1
Residential Construction Specialist 2, 5
Senior Community Development Analyst 2, 4
Senior Housing Specialist 2
Senior Residential Construction Specialist 2, 5
Workforce Specialist I
2, 4
Workforce Specialist II 2, 4
Workforce Specialist III 2, 4
Workforce Specialist IV 2, 4
** Consultants (Grants) 2, 4
Finance Management Services Agency
Executive Director 1 1
Accounting Manager 1
Assistant Director of Finance Management Services 1
Budget Analyst 1
Budget Supervisor 1
Administrative Services Manager 1
Management Analyst 1
City Council
24 –
13 9/20/2022
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Payroll Manager 1
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3 Buyer 3
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1 Financial Analyst 1
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Recreation and Community Services Supervisor 1
City Council
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14 9/20/2022
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
General Maintenance Supervisor 1
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1 Park Services Superintendent 1
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City Council
24 –
15 9/20/2022
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
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Senior Accounting Assistant 4
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Senior Plumbing / Mechanical Systems Specialist 2, 6 *** Supervisor of Inspections 2, 6, 7
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5 Contracts Administrator 5
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2, 5, 7
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City Council
24 –
16 9/20/2022
DESIGNATED EMPLOYEES / FILERS DISCLOSURE
CATEGORY
Building Maintenance Supervisor 2, 5, 7
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1 1
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1 The Mayor, City Council, City Manager, City Attorney, Executive Director of Finance Management Services Agency, and Planning Commissioners file Economic Disclosure Form 700 with the Fair Political Practices Commission per Government Code Section 87200.
2 City Consultants shall be included when the City Manager determines in writing that a particular consultant is hired to perform duties that would constitute a “designated position”. Such written determination shall include a description of the consultant’s duties and, based upon the description, a statement of the extent of disclosure requirements. The determination by the City Manager is a public record and shall be retained for public inspection in the same manner and location as this conflict of interest code.
City Council
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CITY OF SANTA ANA
CONFLICT OF INTEREST CODE
DISCLOSURE CATEGORIES
Required filers must review Form 700 Schedules and complete for ms as mandated by the specific Disclosure Category designated.
Disclosure Category 1: Full Disclosure
Persons in this category shall disclose all applicable investme nts, business positions, income, any interests in real property located in the City or within a two-mile radius outside of the City limits, and, any interests in property owned or used by the City.
Disclosure Category 2: Decision Making Authority Affecting Real Property Persons in this category shall disclose all applicable investments, business positions, and income, including loans and gifts, from sources which engage in land de velopment, construction, or the acquisition or sale of real property; also reportable are all interests in real property located in the City and within a two-mile radius outside of the City limits or of any property owned or used by the City.
Disclosure Category 3: City-wide Purchasing Responsibilities Persons in this category shall disclose applicable investments, business positions, and income, including loans and gifts, from sources which provide services, supplies, materials, machinery, or equipment of the type utilized by the City
Disclosure Category 4: Department/Division Purchasing Responsib ilities Persons in this category shall disclose all applicable investments, business positions, and income, including loans and gifts, from sources which provide services, supplies materials, machinery, or equipment of the type utilized by the designated employee s agency, department, or division.
Disclosure Category 5: Public Works/Construction Projects Resp onsibilities Persons in this category shall disclose all interests in and in come from businesses engaged in construction, landscaping, street repair, traffic signal instal lation or modification or the supply of materials for any of the above.
City Council
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18 9/20/2022
Disclosure Category 6: Regulatory Power
Persons in this category shall disclose all applicable investments, business positions, and income, including loans and gifts, from any source which is subject to the regulatory, permit, or licensing authority of the designated employee’s agency, department, or division.
Disclosure Category 7: Planning and Engineering
Persons in this category shall disclose all applicable investment, business positions, and income, including loans and gifts, from any source engaged in engineering, planning, and design services.
City Council
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19 9/20/2022
Planning and Building & Finance and Management Services Agencies santa-ana.org/pb
Item # 25
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
September 20, 2022
TOPIC: Ordinance Amendment No. 2022-01 - Commercial Cannabis Regulatory and Tax Updates
AGENDA TITLE:
Public Hearing - Ordinance Amendment No. 2022-01 to Update Chapters 18, 21, and 40 of the Santa Ana Municipal Code Addressing Medicinal Cannabis Retail, Consumption Lounges and Temporary Events, Measure BB Waitlist Termination, Retail Facility Relocation, Commercial Cannabis Eligible Areas, Commercial Cannabis Tax Rate Reductions for Commercial Cannabis Cultivation, Distribution, and Manufacturing, and Adopt Language Addressing Proposed Tax Treatment of Microbusinesses and Shared Manufacturing, and Make Other Administrative Amendments of a Complimentary Nature
RECOMMENDED ACTION
1. Approve first reading of an ordinance amending Chapters 18, 21, and 40 of the Santa Ana Municipal Code addressing medicinal cannabis retail, consumption lounges and temporary events, Measure BB Waitlist termination, retail facility relocation, commercial cannabis eligible areas, commercial cannabis tax rate reductions for commercial cannabis cultivation, distribution, and manufacturing, and adopt language addressing proposed tax treatment of microbusinesses and shared manufacturing, and make other administrative amendments of a complimentary nature.
2. Adopt a resolution modifying various non-retail commercial cannabis tax rates.
3. Adopt a resolution establishing a map of commercial cannabis eligible areas in the City.
DISCUSSION
Background
The City of Santa Ana permits a variety of types of cannabis business activity, which include retail sales of medicinal and adult-use cannabis, and cannabis cultivation, distribution, manufacturing, and testing. These cannabis business activities were permitted through adoption of multiple ordinances beginning with Measure BB (Ordinance
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NS-2684) in November 2014 ending with Ordinance NS-2944 in May 2018. In November 2018, Santa Ana voters approved Measure Y (Ordinance NS-2962), which established commercial cannabis business license taxes for adult-use cannabis retail sales, cannabis cultivation, distribution, manufacturing, and testing. The most recent commercial cannabis ordinance updates were adopted by the City Council in September 2019 (Ordinance NS-2973). These updates amended various sections of Chapters 18, 21, and 40 of the Santa Ana Municipal Code (SAMC) to address horizontal and vertical integration of cannabis businesses, to streamline and modernize regulations in response to State changes allowing microbusinesses and shared manufacturing, and to establish consistency among various SAMC sections addressing employee badge requirements and minimum purchasing age.
Ongoing changes to State cannabis laws and evolving market demands prompt the City to regularly revisit its ordinances and tax collection to ensure that Santa Ana: (1) maintain its competitive position in the region; (2) remain compliant with applicable State laws; and (3) streamline and equalize its implementation of non-retail commercial cannabis taxation.
In response to these changes, the City is proposing to update the SAMC in various chapters and sections to address medicinal cannabis retail, consumption lounges and temporary events, Measure BB Waitlist termination, retail facility relocation, commercial cannabis eligible areas, commercial cannabis tax rate reductions affecting nominal gross receipts tax rates as well as alternate (minimum) square footage tax rates for commercial cannabis cultivation, distribution, and manufacturing, and adopt language addressing proposed tax treatment of microbusinesses and shared manufacturing. These updates are intended to foster an environment in which commercial cannabis businesses continue to operate safely and in accordance with all applicable local and State regulations while maintaining Santa Ana’s top position in the regional cannabis industry.
Market Analysis
On July 29, 2022, the City Council conducted a work-study session to discuss municipal code changes related to Cannabis and requested a market analysis with comparative tax information from other cities. The comparative tax information is included in Exhibit 5.
Based on the City Council’s discussion of July 29, 2022, and the comparative tax information available, staff recommends a reduction of the Cannabis supply tax rate for cultivation, distribution, and manufacturing from the current 6% to 1%, as outlined below.
Cannabis business with multiple licenses to cultivate, manufacture, distribute and sell product can take advantage of the vertical and horizontal integration approved by City Council in 2019 to further reduce their net gross receipts tax burden. Multiple-license businesses only owe a City tax when they sell to a third party, not when they internally sell/transfer product from one of their vertically/horizontally integrated operations to another.
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In 2020, the City of Long Beach reduced its Cannabis supply tax rate from 6% to 1%.
Representatives of the Cannabis industry indicated that Long Beach tax collections significantly increased after the rate reduction. Staff obtained revenue estimates from Long Beach and found, in aggregate, that supply businesses in that city are generating roughly the same amount of tax, on a per-percentage basis, as supply businesses in the City of Santa Ana (an average of approximately $8,900 per 1% percent of tax rate, per location). Therefore, it appears that Long Beach’s action in 2020 merely increased tax collections to the same comparative level as Santa Ana.
In conjunction with the recommended rate reduction to 1%, staff recommends a reduction of the alternate (minimum) square footage tax rates for commercial cannabis cultivation, distribution, and manufacturing. The proposed square-footage tax-rate reductions are as follows: cultivation from $10 per square foot to $7; distribution from $4 per square foot to $3; and manufacturing from $10 per square foot to $3.
At this time, staff does not recommend an adjustment of the 8% Cannabis retail rate or the 6% medicinal rate. The City’s retail Cannabis tax revenue continues to grow. Staff obtained revenue estimates from other jurisdictions and it appears that, on average, Santa Ana Cannabis businesses generate higher sales volume than those in other jurisdictions. In May of this year, the Long Beach City Council directed staff to prepare a report exploring the feasibility of reducing the Long Beach retail tax rate (currently 8%) to align with the medicinal tax rate (currently 6%). The item was presented to the City of Long Beach Economic and Finance Committee on August 18, 2022, recommendation of committee was to “Receive and File”. Long Beach staff did, however, recommend a reduction of the tax rate for eight new equity storefronts to enhance their ability to compete with established storefronts. There was no recommendation to reduce the tax rate for existing Cannabis retail businesses. If desired, Santa Ana City Council could direct staff to return in one year with an updated market analysis, including the latest revenue estimates for further comparison.
The State of California recently enacted AB195, which includes tax credits for “high-road” Cannabis employers that compensate employees at or above 150% of minimum wage, provide group health insurance and retirement benefits, provide safety equipment and training, and provide workforce development training to build skills and competitiveness.
Because tax credits are available at the state level, staff does not recommend tax credits at the local level at this time. Staff is not aware of any other cities currently considering local tax credits.
Proposed Amendments – Financial (SAMC Chapter 21)
Table 1 (Proposed Amendments to Chapter 21) describes the finance-related ordinance amendments. Additional details are provided in the subsections that follow.
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Table 1: Proposed Financial Amendments
Item Impact
Amend (SAMC
Sections 21-127, 21-
133, and 21-135)
Amendment:
(1) Amend SAMC Chapter 21 (Licenses) provisions relating to Article XII (Medical Marijuana) - Section 21-127- to reflect definitional changes, and Article XIII (Commercial Cannabis) - Section 21-133 – to adopt a separate business license
category for consumption lounges and temporary consumption/ special events and to reduce cannabis tax rates for commercial cannabis cultivation, distribution, and manufacturing activities; (2) by further amendment of Section 21-133 to administratively simplify the taxation of shared manufacturing activities to maintain Santa Ana’s competitive advantage visa via these commercial cannabis business activities, and to also relax and equalize square footage assessment treatment as between co- located cannabis distribution and manufacturing businesses who are not horizontally/vertically integrated and those that are; and (3) also amend Section 21-135 to equalize the tax treatment of microbusinesses to insure fair treatment.
The recommended Commercial Cannabis Tax Rate
Adjustments, including a $2,000 basic tax rate per license, are described in detail in Exhibit 4.
Impacts:
Reduction of commercial cannabis business license tax rates for commercial cannabis cultivation, distribution, and
manufacturing activities, first effective January 1, 2023, is estimated to result in lower end of fiscal year non-retail commercial cannabis business tax revenue as follows:
•A reduction in the projected revenue in the range of
approximately $1,626,500 to $1,210,000 for FY 2022-23,
when measured against actual receipts for FY 2021-22 of approximately $2,310,000; and
FY 2022-23
REVENUE
ESTIMATE
FY 2021-22
Actual
Revenue
Received
FY 2022-23
Revenue
Estimate
(Upper Range)
FY 2022-23
Revenue
Estimate
(Lower Range)
CULTIVATION $1,223,376 $841,000 $640,000
DISTRIBUTION $863,446 $595,000 $423,000
MANUFACTURING $215,152 $190,500 $147,000
Total $2,310,974 $1,626,500 $1,210,000
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Table 1: Proposed Financial Amendments
Item Impact
•An estimated reduction in the projected revenue in the range of approximately $952,500 to $708,500 for FY 2023-24,
compared to actual receipts for FY 2021-22 of approximately $2,310,000.
FY 2023-24
REVENUE
ESTIMATE
FY 2021-22
Actual
Revenue
Received
FY 2023-24
Revenue
Estimate
(Upper Range)
FY 2023-24
Revenue
Estimate
(Lower Range)
CULTIVATION $1,223,376 $459,500 $349,000
DISTRIBUTION $863,446 $327,000 $232,000
MANUFACTURING $215,152 $166,000 $127,500
Total $2,310,974 $952,500 $708,500
•The foregoing non-retail commercial cannabis figures do not include potential offsetting revenues which may be anticipated from future shared manufacturing and microbusiness revenues and from the enhanced natural growth of Santa Ana’s non- retail commercial cannabis business community which will be encouraged by the rate reductions, and the simplification and equalization of tax treatments for cultivation, distribution, manufacturing, shared manufacturing, and microbusinesses.
At present, however, the City is lacking in sufficient information to reasonably project such additional revenues.
•Likewise, the City may anticipate future increased revenues from primary manufacturers and participating shared
manufacturers taking advantages of Santa Ana’s proposed favorable and administratively streamlined treatment of shared manufacturers and the proposed relaxation and equalization of the tax treatment as between manufactures and distributors who are co-located, regardless of whether they are horizontally or vertically integrated or not.
•Similarly, there will be an increased likelihood of formation of microbusinesses based on Santa Ana’s going-forward
equalization of microbusiness tax treatment, so that
microbusinesses will not have to include the annual $2,000 basic tax rate assessment for each licensed category of commercial cannabis business they choice to engage in, but instead they will be liable to only pay once for the primary
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Table 1: Proposed Financial Amendments
Item Impact
commercial cannabis activity they choose to engage in. This effectively affords microbusinesses the same net administrative tax treatment as other categories of commercial cannabis business.
Consumption Lounges & Temporary Consumption/Special Events and Shared-Use Manufacturing – Elimination of Alternate Square Footage Tax Assessment Consumption Lounges & Temporary Consumption/Special Events are locations where an underlying retail cannabis business licensee is already subject to a square footage assessment. Likewise, Shared Manufacturing premises are places where multiple shared manufacturers (also known as sub-manufacturers) rotate on a variable schedule and share space and equipment provided by a primary commercial cannabis manufacturing business, the alternate square footage method of assessment is made too cumbersome to apply and the need to impose it is mitigated by the fact that the primary manufacturing business owning and controlling the manufacturing premises is already subject to the assessment. Therefore, staff recommends that the City Council establish both the Consumption Lounge & Temporary Consumption/Special Events and Shared Use Manufacturing square footage tax rates at zero ($0) dollars, effectively eliminating the Alternate Square Footage Tax Assessment method as a component in computing taxes owed by shared manufacturers operating at primary manufacturing locations within the City. Effective elimination of the alternate tax will remove the principle administrative tax impediment to facilitating consumption and shared manufacturing within the City.
Microbusinesses – Elimination of De facto Assessment of Multiple Basic Tax Rate Assessments
The City’s Business License Tax Code dealing with cannabis businesses establishes an annual Basic Tax Rate assessment of $2,000 per each licensed commercial cannabis activity engaged in at a single location in the City. This requirement poses a challenge for microbusinesses, which were not contemplated as a commercial cannabis category to be authorized to do business in the City at the time the Basic Tax Rate assessment was adopted for commercial cannabis businesses pursuant to Voter Ballot Measure Y. The Basic Tax Rate assessment was primarily intended as the means - together with the Alternate Square Footage Tax - of assuring a minimum level of City revenue from commercial cannabis businesses. Microbusinesses are required by the state to engage in a minimum of three commercial cannabis activities, and thus are required by the City to obtain a business license for each of these activities. (No administratively reasonable methodology exists or is likely to become available for combining all categories of commercial cannabis assessment into one business license account.)
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However, the requirement for multiple Basic Tax Rate assessments can be seen to have a negative impact on the formation of microbusinesses within the City. To address this issue, staff recommends that the City Council adopt a special proviso for microbusinesses allowing them to pay the annual Basic Tax Rate only upon their predominate commercial cannabis activity, and thus allow them to be exempted from the requirement on all of their other licensed activities engaged in at a single location within the City.
Proposed Amendments – Regulatory (SAMC Chapters 18 and 40) In addition to the proposed changes listed in Table 1, the City is proposing to update and streamline certain sections of Chapter 18 (Medicinal Marijuana) and Chapter 40 (Commercial Cannabis Business Activities Other Than Medicinal Marijuana). Table 2 (Proposed Regulatory Amendments) describes the regulatory-framework ordinance amendments.
Table 2: Proposed Regulatory Amendments
Item Amendment and Impact
Repeal and Readopt
Medicinal Cannabis
Retail Regulations
(SAMC Article XIII of
Chapter 18)
Amendment:
Removes medicinal cannabis retail regulations from Chapter 18 by deleting Article XIII and readopting as Article II of Chapter 40.
Impacts:
•Creates a single SAMC chapter addressing all commercial cannabis (medicinal and adult-use) business activities, including retail, cultivation, distribution, manufacturing, and testing.
•Enhances internal consistency of commercial cannabis regulations by consolidating all regulations into a single chapter within the SAMC.
Community Benefits,
Sustainable Business
Practices, and Social
Equity (SAMC Sec. 40-
1)
Amendment:
Updates community benefit and sustainable business practices requirement by codifying requirements and integrating required social equity components.
Impacts:
•Addresses the termination date of existing commercial cannabis operating agreements, which are set to expire December 31, 2022. •Codifies requirement for all commercial cannabis businesses to submit and have a Community Benefit, Sustainable Business Practices, and Social Equity Plan (“Plan”) on file with the City. •Allows the City to require proof of satisfaction of the Plan. •Integrates key social equity principles into the Plan. •Establishes a Plan template for internal consistency, reporting, and auditing, if required.
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Table 2: Proposed Regulatory Amendments
Item Amendment and Impact
Commercial Cannabis
Eligible Areas (SAMC
Secs. 40-5, 40-6, and
40-105)
Amendment:
Establishes an updated commercial cannabis eligible areas map to maintain a buffer between commercial cannabis businesses and sensitive land uses, such as schools, parks, and residential zones.
Impacts:
•Updates the existing map of commercial cannabis eligible areas adopted March 18, 2020, and requires adoption of the new map by resolution of the City Council.
•Maintains a buffer between commercial cannabis businesses and sensitive land uses based on the original 1,000-foot buffer. •Allows operating and pending businesses to expand within existing buildings.
•Creates consistency between ordinance and adopted map.
Relocation of
Commercial Cannabis
Retail Facilities
(SAMC Secs. 40-7 and
40-104)
Amendment:
Allows relocation of currently-operating commercial cannabis retail locations within Santa Ana.
Impacts:
•Addresses facilities impacted by changes in market conditions and/or impacted by projects such as the Costa Mesa (SR-55) Freeway widening.
•Facilitates the opening of remaining pending and five new retailer storefronts, for a total of 35 retail storefronts.
•Allows the City to achieve its full revenue-generating potential of the commercial cannabis ordinance.
Consumption
Lounges as an
Ancillary Component
of Retail (SAMC Secs.
40-5 and 40-8)
Amendment:
Establishes a means by which cannabis retailers may apply to construct and operate a consumption lounge.
Impacts:
•Consistent with State law, allows cannabis consumption lounges as an ancillary component to retail activities subject to full compliance with State licensing, local permitting, environmental and public health, and building and fire safety regulations.
•Allows the City to achieve its full revenue-generating potential of the commercial cannabis ordinance.
•Maintains Santa Ana’s competitive edge and leadership position within the regional cannabis industry.
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Table 2: Proposed Regulatory Amendments
Item Amendment and Impact
Temporary
Consumption
Festivals and Events
(SAMC Sec. 40-8)
Amendment:
Establishes a means by which cannabis retailers may apply to conduct special events that include cannabis sales and consumption.
Impacts:
•Allows cannabis retailers each to hold up to two (2) temporary consumption events per calendar year.
•Allows the City to organize and hold its own festivals. •Activities would be required to satisfy all applicable State licensing, local permitting, environmental and public health, and building and fire safety regulations.
•Allows the City to achieve its full revenue-generating potential of the commercial cannabis ordinance.
•Maintains Santa Ana’s competitive edge and leadership position within the regional cannabis industry.
Various
Administrative
Amendments for
Internal Consistency
(SAMC Secs. 40-2, 40-
9, 40-9.2, 40-10, and
40-100 through 40-
108)
Amendments:
Updates various sections of Chapters 21 and 40 to establish internal consistency in terminology and regulations, update background check requirements, and require plan submittal and opening for all remaining pending cannabis retail businesses.
Impacts:
•Edits title of Chapter 40 and updates definitions to address amendments described above.
•Removes local badge requirements and requires only live scans for business owners.
•Updates application selection process for commercial cannabis businesses and addresses consumption lounges.
•Modifies various sections to remove references to now-defunct Article XIII of Chapter 18.
•Requires all pending medicinal and adult-use retail locations to submit construction plans and open within one year of the effective date of the ordinance.
Among the proposed amendments, the number of permitted retail locations and relocation of pending/selected and existing retailers, termination of the Measure BB Waitlist, changes to the buffer requirements from sensitive land uses, and consumption lounges and temporary events represent substantive changes that are described in further detail in the subsections below. These amendments are intended to address evolution in market conditions for cannabis businesses in Santa Ana and maintain the City’s competitive position in the regional cannabis industry.
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Number of Permitted Retail Locations, Retail Relocation, and Termination of the Measure BB Waitlist
Existing ordinance regulations permit up to 20 medicinal and 30 adult-use cannabis retail locations; however, such facilities may be co-located in a single facility. The proposed amendments would allow an additional five (5) retail locations, for a total of 35 storefronts in the City. If approved, the amendments would allow all 35 retail licenses to sell both medicinal and adult-use cannabis.
There are currently 27 operating storefront retailers in the City. Of these, 19 sell medicinal and adult-use cannabis, and 8 sell adult-use only cannabis. In addition, there are 1 pending/selected medicinal-only and 3 pending/selected adult-use retailers. The amendment would incentivize the pending/unopened retailers to open sooner and provide the retailers greater revenue-generating potential through both medicinal and adult-use retail cannabis sales.
The amendments would also allow existing retailers to relocate subject to full compliance with all zoning, buffer, and separation requirements from other existing or pending/selected locations. This amendment also addresses the SR-55 widening project, which will result in physical impacts to at least one retailer, as well as evolving market conditions as the industry matures in Santa Ana. Currently, relocation is prohibited, and those businesses that have relocated have done so pursuant to various agreements with the City. The amendments would standardize the process for all entities and further incentivize the pending/selected businesses that have not yet opened to properly locate and open.
Lastly, the amendments would terminate the Measure BB Waitlist, which has consistently shrunk since 2015 from 575 entities to its current five (5). Pursuant to Measure BB, each year waitlisted entities must notify the City of their desire to remain on the Waitlist, and the City updates the Waitlist annually between April and May. The amendments would set forth a process by which the City notifies the waitlisted entities of the intended termination and allow them to apply for the five new retail locations by March 30, 2023.
Should all five not open, the priority for remaining storefront positions would then be given to those entities scored as part of the adult-use retail selection process in 2018; those entities would need to apply by July 31, 2023. Should remaining storefront positions be available thereafter, the City would accept applications from brand-new entities beginning July 31, 2023, subject to the same merit-based evaluation process employed in 2018 that included criteria such as site control, previous experience, commitment to community benefits, having remained on the Waitlist, residing in Santa Ana, and being in good standing. This staggered method will ensure consistency with prior processes and create a fair opportunity for those waitlisted entities to submit competitive applications to operate new retail locations in the City. Any remaining positions available after this staggered
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process would follow the same selection process employed in 2018 using merit-based criteria.
Commercial Cannabis Eligible Areas Map
All commercial cannabis businesses were initially subject to specific, codified regulations for separation from sensitive land uses (schools, parks, and residential zones) under Measure BB for medicinal cannabis retail sales, and subsequently by Ordinance No. NS- 2929, which created Chapter 40 of the Santa Ana Municipal Code for all other commercial cannabis business activities. The regulations allowed commercial cannabis business activity in the City’s light and heavy (M1 and M2) industrial zoning districts and required a 1,000-foot separation from these sensitive land uses; no accompanying map was officially adopted to illustrate these parameters.
Following redevelopment of industrial properties east of the Costa Mesa (SR-55) Freeway, the City Council adopted a map of commercial cannabis eligible areas on March 20, 2018 in which commercial cannabis business activities could locate subject to full compliance with applicable local, County, and State regulations. The map, however, is currently in conflict with existing ordinance language requiring the 1,000-foot buffer from residential zones.
Among the actions proposed for City Council consideration to address this conflict is adoption of a resolution establishing new map largely based on the existing 1,000-foot buffer from schools, parks, or properties zoned for residential purposes. The new map would specify on a parcel-specific level those properties that are eligible for commercial cannabis businesses. The proposed ordinance would also be modified to reflect the map, rather than specify the buffer in text. Modification to the map could take place with future resolutions as needed, without requiring an amendment to the overall ordinance.
Consumption Lounges and Temporary Events
State law was modified in 2019 to create a framework allowing cannabis consumption lounges and temporary (special) events with cannabis consumption. Cannabis consumption lounges are permitted to be opened and operated by businesses holding a retailer license. The proposed amendments would allow the City’s commercial cannabis retail businesses to submit applications to operate consumption lounges on the same site as and physically contiguous to a cannabis retailer. In addition, standards would be in place to allow temporary consumption festivals organized and held by the City, and temporary consumption events held by cannabis retail businesses.
Several development and operating standards are included to ensure the health and safety of visitors to retailers and to minimize impacts onto surrounding properties. Among these, lounges will need to be designed so that a patron need not enter a consumption
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lounge in order to access a retail-only portion of the facility, and the lounges may only be accessible to those aged 21 or older. Lounges and special events may also offer food and non-alcoholic beverages, but the sale or consumption of alcohol or tobacco products will be prohibited. Lastly, cannabis retailers would be able to construct specific spaces within the retail area for the opening and limited consumption of cannabis products for educational purposes, without the need to construct a dedicated consumption lounge.
In addition, smoking cannabis will be permissible subject to odor control and elimination, and consumption or smoking of cannabis products shall not be visible from any public place, public right-of-way, or area where minors may be present. If the consumption lounge or event contains an outdoor area, the outdoor area shall be oriented so as to eliminate visibility from any adjacent public place, public right-of-way, area where minors may be present, or adjacent business, tenant space, or building. As with all other commercial cannabis businesses, odor control and ventilation systems must be in place to eliminate any odors. Lastly, all facilities or event operators must abide by odor control response measures specified in the ordinance.
Orange County Grand Jury and Orange County Advocacy Alliance On June 3, 2021, the Orange County Grand Jury (OCGJ) issued an investigate report with findings and recommendations regarding the City’s licensed retail adult-use cannabis program and regulatory framework. Subsequent staff reports were presented on the matter to the City Council, most recently on September 7, 2021. Following the September 7 meeting, the City issued a letter on September 13, 2021 to the Honorable Erick Larsh, Presiding Judge, with the City’ responses to six findings and three recommendations. The proposed ordinance will maintain the City’s commercial cannabis regulatory framework in keeping with these findings. Moreover, the proposed amendments to community benefit and sustainable business practice requirements reflect the OCGJ’s recommendation to further streamline and unify such obligations by the licensed commercial cannabis businesses operating in Santa Ana, and enable more routine and accurate reporting of such engagements.
Most recently, the Orange County Advocacy Alliance (OCAA) issued a letter to the City Council urging a modification to commercial cannabis tax rates as “the number one priority to create a sustainable, competitive, and profitable cannabis business marketplace.” The proposed tax code amendments to reduce certain non-retail commercial cannabis tax rates reflect not just OCAA’s sentiments, but also feedback received by dozens of business operators and research that the Planning and Building and Finance and Management Services agencies’ staff performed between 2020 and 2022 into competitive jurisdictions’ commercial cannabis tax rates.
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Community Benefits, Sustainable Business Practices, and Social Equity In response to recommendations from the OCGJ investigative report and industry feedback, the City is also proposing modifications to its community benefit and sustainable business practice requirements that would clarify and streamline obligations, options, and reporting. The proposed amendments would sunset the requirement for individual operating agreements but would require all commercial cannabis businesses to maintain a community benefit and sustainable business practices plan on file with the City.
Staff met with a focused group of industry representatives on April 21, 2022 to obtain insight on the proposed code amendments. Representatives recommended modifications to the required community benefits and sustainable business practices to reflect current labor trends and industry practices. In addition, representatives expressed a desire to standardize reporting to the City. Because of this meeting, staff tailored community benefit and sustainable business practice options in the proposed ordinance to address the concerns brought up by the industry representatives.
All commercial cannabis businesses will be required to report community benefit and sustainable business practice obligations twice a year as a condition of maintaining the regulatory safety permit in good standing and as a condition of their annual renewal. The annual reporting will require descriptions of the following components:
1. Action – a thorough breakdown of all stated commitments/obligations and the actions taken by the business to satisfy the required commitments/obligations.
2. Value – A detailed, quantitative description of the value of the commitments/obligations, either as money spent or time/resources committed by the business and its staff.
3. Community Benefit Value – A qualitative description of the resulting value of the commitments/obligations’ quantitative impacts, otherwise known as the “local multiplier effect” when one dollar is spent locally.
4. Local Engagement – A detailed narrative of engagement by business owners with local organizations, community groups, and civic/government organizations.
Examples include coordination with the City’s Economic Development Division, the Santa Ana WORK Center, job fairs, local educational institutions’ skills training, and local community and not-for-profit organizations.
A component of the ordinance requires that all commercial cannabis businesses operating in the City provide community benefits through a Community Benefits, Sustainable Business Practices, and Social Equity Plan (“Plan”) that promotes health and sustainability of the community in a format acceptable by the Executive Director of the Planning and Building Agency as reviewed and verified from time to time as a component of issuance of an annual regulatory safety permit. Obligations to satisfy the Plan’s
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requirements will be based on a percentage rate of a business’s gross reportable revenue from the prior reporting year (0.50% from January 1, 2023 to January 1, 2024, and 1.00% thereafter). The Plan will document each of the business’s commitment to local hiring, local sourcing, community engagement and contributions, sustainable business practices, and consideration of social equity goals through paying prevailing wages, hiring from disadvantaged communities, supporting local non-profit organizations (NPOs), and job and skills training. Moreover, the Plan will quantify the value of each commitment therein. The format is also intended to enable businesses committing to certain social equity principles to apply for consideration by the State for tax credits, complementing the provisions of Section 17053.64 of the California Revenue and Taxation Code.
ENVIRONMENTAL IMPACT
In accordance with the California Environmental Quality Act (CEQA), these actions are exempt from further CEQA analysis pursuant to CEQA Guidelines Section 15061(b)(3), as the proposed amendments address business activities already permitted in the City and will not result in any significant physical effect on the environment. Because Santa Ana is a built-out, urbanized community, and the uses permitted and regulated by the cannabis ordinance are already allowed by the underlying zoning designations and the development standards in Chapter 41 (Zoning) of the Santa Ana Municipal Code, the updates to the ordinance will not lead to any cumulative or unforeseen impacts. A Notice of Exemption, Environmental Review (ER) No. 2022-15, will be filed for these actions.
FISCAL IMPACT
There is a projected fiscal impact associated with approval of the recommended actions, as they will reduce the projected commercial cannabis revenues for cultivation, distribution, and manufacturing as compared with the actual revenues received in FY 2021-22. Assuming the proposed rate changes become effective January 1, 2023, the cumulative revenue reduction is estimated to be between approximately $685,000 and $1,100,000 for FY 2022-23; and between approximately $1,360,000 and $1,600,000 in FY 2023-24. However, other elements of the staff recommendations contained within this Staff Report relating to shared manufacturing, microbusinesses, and notably consumption lounges and temporary events, and allowing all retailers to sell both medicinal and adult-use cannabis, will likely provide some degree of offsetting revenues.
Staff, however, lacks reasonable data on which to make increased revenue projections.
Likewise, the addition of five (5) potential added retail sales locations, while encouraging in terms of future revenue; cannot, as yet, be counted on as a reliable projected revenue for the current 2022-23 fiscal year or the approaching 2023-24 fiscal year due to the long lead times involved in bringing such retail locations into operation.
Failure to adopt the above recommended action items, however, would have a negative impact on a significant number of established cannabis businesses as well as pending commercial cannabis applicants awaiting adoption of those recommended items before committing to entering the approval, permitting, and licensing process and who will defer
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or cancel their decision to enter the Santa Ana market, thus causing the hoped for revenues to not be realized.
EXHIBIT(S)
1. Ordinance
2. Resolution modifying various commercial cannabis tax rates
3. Resolution establishing a map of commercial cannabis eligible areas in the City
4. Recommended commercial cannabis tax rate adjustments table
5. Comparative tax information (market analysis)
Submitted By: Minh Thai, Executive Director of Planning and Building Agency and Kathryn Downs, Executive Director of Finance and Management Services Agency Approved By: Kristine Ridge, City Manager
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Ordinance No. NS-XXX
ORDINANCE NO. NS-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA READOPTING AND AMENDING CERTAIN
SECTIONS OF ARTICLE XIII OF CHAPTER 18 OF THE
SANTA ANA MUNICIPAL CODE PERTAINING TO
MEDICINAL MARIJUANA RETAIL AND CHAPTER 40 OF
THE MUNICIPAL CODE PERTAINING TO COMMERCIAL
CANNABIS RETAIL BUSINESSES TO MODIFY THE
MAXIMUM NUMBER OF RETAIL BUSINESSES AND
ZONING REQUIREMENTS; TERMINAT E THE MEDICINAL
RETAIL WAITLIST; ALLOW AND REGULATE RETAIL
FACILITY RELOCATION , CANNABIS CONSUMPTION
LOUNGES, AND TEMPORARY CONSUMPTION E VENTS
AND FESTIVALS; AND AMEND BACKGROUND CHECK
AND BADGE REQUIREMENTS; AND AMENDING CERTAIN
SECTIONS OF ARTICLES XII AND XIII OF CHAPTER 21 OF
THE SANTA ANA MUNICIPAL CODE PERTAINING TO THE
TAX TREATMENT OF COMMERCIAL CANNABIS
MICROBUSINESSES AND SHARED MANUFACTURING
BUSINESSES TO REDUCE THE TAX RATES FOR
COMMERCIAL CANNABIS CULTIVATION, DISTRIBUTION,
AND MANUFACTURING / SHARED MANUFACTURING
AND TO ADOPT A SEPARATE TAX RATE CATEGORY FOR
CANNABIS CONSUMPTION LOUNGES, AND
TEMPORARY CONSUMPTION EVENTS AND FESTIVALS
THE CITY COUNCIL OF THE CITY OF SANTA ANA HEREBY ORDAINS AS FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows:
A. On November 4, 2014, Santa Ana voters approved Santa Ana’s Medical Marijuana Regulatory Program ordinance (“Measure BB”) which was codified in Chapters 18 and 21 of the Santa Ana Municipal Code. Such regulations govern medicinal marijuana and the retail sale thereof.
B. In 2015, the Governor signed into law Senate Bill 643, Assembly Bill 266, and Assembly Bill 243, collectively referred to as the Medical Marijuana Regulation and Safety Act , further amended in 2016 as the Medical Cannabis Regulation and Safety Act, which established regulations and a state licensing system for medical cannabis cultivation, manufacturing, delivery, and dispensing.
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C. In November 2016, the voters of the State of California approved Proposition 64, the California Marijuana Legalization Initiative, also known as the Adult Use of Marijuana Act.
D. In 2017, the Governor signed into law Senate Bill 94 also known as Medicinal and Adult-Use Cannabis Regulation and Safety Act.
E. On November 9, 2017, the City Council created Chapter 40 of the Santa Ana Municipal Code (Ordinance No. NS -2929), allowing adult -use commercial cannabis retail businesses in the city, and amended certain sections of Chapters 18 and 21 of the Santa Ana Municipal Code to ensure consistency with State law and Chapter 40.
F. Since November 2014, the City of Santa Ana has permitted the retail sale of cannabis for medicinal purposes and since January 2018 for adult -use purposes.
On March 20, 2018, the City Council adopted Ordinance NS -2941 and NS -2942, allowing and regulating commercial cannabis testing laboratories.
G. On April 17, 2018, the City Council adopted Ordinance NS -2944 allowing and regulating commercial cann abis cultivation, distribution, and manufacturing activities.
H. On November 6 , 2018, the voters of the City of Santa Ana approved Measure Y (Ordinance NS-2962), establishing a tax on commercial cannabis business activities except medicinal cannabis retail sales, which continue to be subject to taxes under Measure BB.
I. On September 3, 2019, the City Council adopted Ordinances NS-2972 and NS-2973 amending certain sections of chapters 18, 21, and 40 of the Santa Ana Municipal Code allowing vertical and horizontal integration of cannabis businesses; updating ownership transfers procedural standards and requirements, security deposits, and various administrative processes; updating and streamlining regulatory components; reducing cannabis testing taxes to the greater amount of one (1%) percent of gross receipts or one and one -half ($1.50) dollars per square foot; and adopting a canopy measurement and square footage allocation service fee.
J. The State of California continues to update its regulations on commercial cannabis business licensing, resulting in the need for local jurisdictions to update and amend local commercial cannabis ordinances from time to time.
K. It is the desire of the Ci ty Council to combine and unify the regulations for medicinal cannabis retail and all other types of commercial cannabis business activities, currently contained in Chapters 18 and 40 of the Santa Ana Municipal Code, respectively, for clarity and cohesion.
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L. The City Council recognizes those entities that have remained on the Medicinal Cannabis Waitlist pursuant to Santa Ana Municipal Code Section 40 -104, and those entities that were scored as part of the merit -based selection process in Section 40-9.
M. Commercial cannabis businesses form an integral part of the Santa Ana economy, contributing revenues and community benefits through business engagement with the Santa Ana community.
N. The City Council of the City of Santa Ana intends that nothing in this article shall be deemed to conflict with federal law as contained in the Controlled Substances Act, nor to otherwise permit any activity that is prohibited under that Act or other applicable law.
O. The City of Santa Ana has a compelling interest in ensuring that cannabis is not sold, cultivated, manufactured, tested, consumed, or distributed in an illicit manner, in protecting the public health, safety and welfare of its residents and businesses, in preserving the peace and quiet of the neighborhoods in which these uses may operate, and in providing access of cannabis to residents.
P. The City Council has held a duly noticed public hearing on September 20, 2022 in connection with consideration and adoption of this ordinance.
Section 2. This Ordinance is adopted pursuant to the authority granted by the California Constitution and State law, including but not limited to: Article XI, Section 7 of the California Constitution, the Compassionate Use Act of 1996 (California Health and Safety Code Section 11362.5), the Medical Marijuana Program (California Health and Safety Code Section 11362.7 et seq.), the Medical Marijuana Regulation and Safety Act (AB 266, AB 243, and SB 643; hereafter “MMRSA”), the Adult Use of Marijuana Act (Proposition 64), and the Medical and Adult Use Cannabis Regulation and Safety Act (SB 94; hereafter “MAUCRSA”).
Section 3. P
ursuant to the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines, the adoption of this ordinance is exempt from CEQA review pursuant to California Code of Regulations section 15061(b)(3), which is applicable if it can be seen with certainty that there is no possibility that the project may have a significant effect on the environment. Santa Ana is a built-out, urbanized community, and the uses permitted and regulated by this Ordinance are already allowed by the underlying zoning designations and the development standards in Chapter 41 (Zoning) of the Santa Ana Municipal Code. The uses permitted and regulated by this ordinance will not lead to any cumulative or unforeseen impacts. As a result, a Notice of Exemption will be filed upon the adoption of this ordinance.
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Section 4. All provisions of the Santa Ana Municipal Code which are repeated herein are repeated solely in order to comply with the provisions of Section 418 of the City Charter. Any such restatement of existing provisions of the Code is not intended, nor shall it be interpreted, as constituting a new action or decision of the City Council, but rather such provisions are repeated for tracking purposes only in conformance with the Charter.
S
ection 5. The title of Chapter 40 of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows:
Chapter 40 - RE GULATION OF COMMERCIAL CANNABIS B USINESS
ACTIVITIES OTHER THAN MEDICINAL CANNABIS RETAIL ACTIVITIES Section 6. Article I of Chapter 40 of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows:
Sec. 40-1. P urpose and intent, intent, and community benefits required.
A. The purpose and intent of this article is to regulate commercial cannabis business activities, as defined in this article, in order to ensure the health, safety and welfare of the residents of the City of Santa Ana by establishing regulations nec essary for commercial cannabis business operating in the City of Santa Ana to obtain and maintain a Regulatory Safety Permit ("RSP"). Any commercial cannabis businesses operating in the City of Santa Ana shall at all times be in compliance with current State Law and this article. All commercial cannabis facilities shall operate in accordance with the regulations in this article and with the conditions of approval associated with the applicable zone for the parcel of real property upon which the commercial cannabis activities are conducted. Any commercial cannabis business shall qualify for and receive a Regulatory Safety Permit from the City of Santa Ana as provided by this article and operate only in a zone in compliance with Santa Ana Municipal Code before commencing with any commercial cannabis business activity. Any commercial cannabis business without a Regulatory Safety Permit is in violation of this article. The regulations in this article, in compliance with the Compassionate Use Act, the Medicinal Marijuana Program Act, SB 94, AB 133, Proposition 64, and the California Health and Safety Code (collectively referred to as "State Law") do not interfere with the right to use adult -use cannabis or medicinal cannabis as authorized under State Law, nor do they criminalize the possession of cannabis as authorized under State Law.
B. Any person operating a medicinal marijuana collective/cooperative (as defined in Chapter 18 Article II of this Code Chapter) as of December 14, 2017, or who has a RSP application pending to operate a medicinal collective/cooperative, and has met all of the requirements of Chapter 18 Article II , shall be allowed to apply for a Regulatory Safety Permit for the sale of Adult -Use cannabis provided that they enter into the Commercial Cannabis Operating Agreement with the City.
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C. The Commercial Cannabis Operating Agreement shall be a legally binding written agreement between each commercial cannabis business operator and the City, executed by the City Manager, or his or her designee, and in a form and substance satisfactory to the Executive Director of Planning and Building and the City Attorney, and containing those provisions necessary to ensure that the requirements of this article are satisfied. A distinct Commercial Cannabis Operating Agreement shall be required for each location of a commercial cannabis business activity taking place at an approved Commercial Cannabis Business Community Benefits, Sustainable Business Practices, and Social Equity Plan Required.
1. Effective January 1 , 2024, all commercial cannabis businesses operating in the City shall be required to provide community benefits through a Community Benefits, Sustainable Business Practices, and Social Equity Plan (“Plan”) that promotes health and sustainability of the community in a format acceptable by the Executive Director of the Planning and Building Agency or his or her designee as reviewed and verified from time to time as a component of issuance of a regulatory safety permit (RSP). By January 1, 2025, all such Plans shall contain provisions for social equity obligations, as per the approved format established by the City.
2. The Plan shall document each of the business’s commitment to local hiring, local sourcing, community engagement and contributions, sustainable business practices, and consideration of social equity goals through paying prevailing wages, hiring from disadvantaged communities, supporting local non- profit organizations (NPOs), and job and skills training. The Plan shall quantify the value of each commitment therein.
3. D ocumentation of fulfillment of the aforementioned Plan shall be submitted to the Code Enforcement Division on a n annual basis, including as part of a renewal application for an RSP during the annual renewal process. Said documentation shall detail said business’s satisfaction of its commitments and shall be evaluated for satisfaction by the Executive Director of the Planning and Building Agency or his or her designee. Failure to provide the requested documentation shall result in a suspension or revocation of an RSP, delay or denial of an RSP renewal application, as applicable.
4. The Planning and Building Agency may enforce these provisions pursuant to Section 40-12 of this Chapter, including issuance of warnings, citations, and fines as authorized by the Santa Ana Municipal Code, and suspension and revocation, to enforce the commitments in each Plan.
Sec. 40-2. Definitions.
The definitions are incorporated herein as fully set forth and are applicable to this article.
All definitions are intended to comply with those set forth by the State of California for all commercial cannabis business activities.
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1. "Applicant" means a pers on who is required to file an application for a permit under this article, including an individual owner, managing partner, officer of a corporation, or any other operator, manager, employee, or agent of a commercial cannabis business. "Adult-Use" means cannabis or cannabis products that are intended to be used for non-medicinal purposes by a person twenty-one (21) years of age or older.
3. "Adult-Use Cannabis Retailer Operating Agreement" or "Operating Agreement" means the agreement entered into by and bet ween the City and the commercial cannabis business operator which will specify terms for local hiring and sourcing, community benefit plans, and fees to compensate for authorized impacts on City services.
4. "Adult-Use cannabis retail business" means an Adult-Use retail business that obtains a Regulatory Safety Permit and engages in the delivery or sale of Adult-Use cannabis, or an Adult-Use cannabis product, except as related Business and Professions Code Section 19319, or Health and Safety Code Sections 113 62.1 through 11362.45, as amended from time to time, excepting medicinal cannabis retail.
5. "Authorized City of Santa Ana representative" means any police officer, city employee, contractor or agent of the city designated by the director of any city department which has the authority and responsibility to enforce provisions as set forth in this article.
6. "Business owner" means any of the following:
a) A person with an aggregate ownership interest of twenty (20) percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance.
b) The chief executive officer of a nonprofit or other entity. c) A member of the board of directors of a nonprofit.
d) An individual who will be participating in the direction, control, or management of the person applying for a license.
7. "Cannabis" or "cannabis product" means all parts of the Cannabis sativa Linnaeus, Cannabis Indica, or Cannabis Ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the st erilized seed of the plant which is incapable of germination. For the purpose of this chapter, "cannabis"
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does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
8. "City" means the City of Santa Ana, a charter city and municipal corporation.
9. "Commercial cannabis activity" means the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products as provided for this Chapter. Permitted commercial cannabis activities are listed in Land Use Table 40- 5 of this Chapter and are allowed in the Commercial Cannabis Eligible Areas M ap as adopted and modified from time to time by resolution of the City Council.
10. "Commercial cannabis business" means a business that obtains a Regulatory Safety Permit and engages in the cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, distribution, delivery, or sale of adult -use cannabis, medicinal cannabis or an adult -use cannabis or medicinal cannabis product, except as related Business and Professions Code Section 19319, or Health and Safety Code Sections 11362.1 through 11362.45, as amended from time to time.
11. "Cultivation" means to plant, grow, harvest, dry, cure, grade or trim cannabis, as defined by California Business and Professional Code Section 26001, as amended from time to time.
12. "Customer" means a natural person twenty-one (21) years of age or over.
13. "Delivery" means the commercial transfer of cannabis or cannabis products from a retail cannabis business to a customer up to an amount determined to be authorized by the State of California, or any of its departments or divisions. "Delivery" also includes the use by a retail cannabis business of any technology platform owned, controlled, and/or licensed by the retail cannabis business, or independently licensed by the State of California under the State law (as amended from time to time), that enables anyone to arrange for or facilitate the commercial transfer by a licensed retail cannabis business of cannabis or cannabis products. For the purposes of this article, "delivery" does not include distribution or purchase of cannabis from a licensed cultivator, and cannabis products from a licensed manufacturer, for sale to a licensed cannabis retail business.
14. "Delivery employee" means an individual employed by a licensed retail cannabis business who delivers cannabis goods from the permitted retail premises to a customer at a physical address.
15. "Display" means cannabis goods that are stored in the licensed retail business during the hours of operation.
16. "Distribution" means the procurement, sale, and transport of can nabis or cannabis products between Licensees.
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17. "Edible cannabis product" means manufactured cannabis that is intended to be used, in whole or in part, for consumption. An edible cannabis product is not considered food as defined by Section 109935 of the California Health and Safety Code or a drug as defined by Section 109925 of the California Health and Safety Code.
18. "Free sample" means any amount of commercial cannabis goods provided to a purchaser of cannabis without cost or payment or exchange of any other thing of value.
19. "Labor Peace Agreement" means a legally binding agreement between an employer and a bona fide labor organization in which the employer agrees to remain neutral in the event its employees wish to unionize, as described more fully in Busi ness and Professions Code 26001(z), as amended from time to time. For the purposes of this Chapter, a "Bona Fide Labor Organization" means any organization or any agency or employee representation committee or any local unit thereof in which employees participate, and exists for the purpose, in whole or in part, of working with employers concerning grievances, labor disputes, wages, hours of employment or conditions of work, which labor organization is not found to be or to have been financed in whole or in part, interfered with, dominated or controlled by the employer or any employer association.
20. "License/Licensee" means a license issued by the State and includes both an A - license (Adult-Use) and an M-license (Medicinal), and the holder of such license.
21. "Manufacturer" means a Licensee that conducts the production, preparation, propagation, or compounding of cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container.
22. "Manufacturing" means all aspects of the extraction and/or infusion processes, including processing, preparing, holding, storing, packaging, or labeling of cannabis products. Manufacturing also includes any processing, preparing, propagating, holding, or storing of components and ingredients.
22.5. “Shared Manufacturing” means manufacturers who work in a shared-use facility.
Shared-use facilities are places where multiple shared manufacturers engaging in cannabis extraction using butter or cooking oils, infusion, and/or packaging and labeling rotate on a schedule and share space and equipment. All or part of manufacturing premises may be registered as a shared-use facility. 23 "Medicinal cannabis patient" is a person whose physician has recommended the use of cannabis to treat a serious illness, including cancer, anorexia, AIDS, chronic pain, spasticity, g laucoma, arthritis, migraine, or any other illness for which cannabis provides relief.
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24. "Microbusiness" means a commercial cannabis business that cultivates cannabis on an area less than ten thousand (10,000) square feet and acts as a licensed distributor, Level 1 manufacturer, and retailer.
25. "Nursery" means a commercial cannabis Licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis.
26. "Medicinal/medical cannabis" or "Medicinal cannabis product," means cannabis or a product containing cannabis, including, but not limited to, concentrates, and extractions, intended to be sold for use by medicinal cannabis patients in California pursuant to the Compassionate Use Act of 1996, found at Section 11362.5 of the California Health and Safety Code. Medicinal cannabis retail is regulated by this Chapter 18 and Chapter 21 of the Santa Ana Municipal Code.
27. "Outdoor cultivation" means the cultivation of cannabis outside a permanent enclosed building. Outdoor cultivation is prohibited within the City of Santa Ana.
28. "Ownership interest" means an interest held by a person who is an owner as defined by State of California commercial cannabis regulations or who has a financial interest in the commercial cannabis business of twenty (20) percent or more.
29. "Package" and "Packaging" means any container or wrapper that may be used for enclosing or containing any cannabis goods for final retail sale. "Package" and "packaging" does not include a shipping container or outer wrapping used solely for the transport of cannabis goods in bulk quantity to a Licensee.
30. "Person" includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
31. "Premises" means the designated structure(s) and land specified in the application that are in possession of and used by the applicant or Licensee to conduct the commercial cannabis activity.
32. "Primary Caregiver" has the same meaning as that term is defined in Section 11362.7 of the Health and Safety Code, as amended from time to time.
33. "Private Residence" shall have the same definition as that contained in Health and Safety Code section 11362.2(5) and also means a lawfully established structure, suitable for human occupancy as required by section 17922 and 17958 of the California Health and Safety Code. A recreational vehicle does not constitute a lawfully established structure for the purposes of this article.
34. "Private security officer" has the same meaning as that term as defined in the State of California Business and Professions Code section 7574.01.
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35. "Purchase" means obtaining cannabis goods in exchange for consideration.
36. "Purchaser" means a person who is engaged in a transaction with a Licensee for purposes of obtaining cannabis goods.
37. "Qualified patient" has the same meaning as such term is defined in California Health and Safety Code section 11362.5, as amended from time to time, and means a person whose physician has recommended the use of cannabis to treat a serious illness, including cancer, anorexia, AIDS, chronic pain, spastic ity, glaucoma, arthritis, migraine, or any other illness for which cannabis provides relief.
38. "Responsible person" means any of the following:
a) A person who causes a Code violation to occur.
b) A person who maintains or allows a Code violation to continue by way of his or her action or failure to act.
c) A person whose agent, employee, or independent contractor causes a Code violation by its failure to act.
d) A person who is the owner of, and/or a person who is a lessee or sub lessee with the current right of possession of, real property where property -related Code violation occurs.
e) A person who is the on- site manager of a business who normally works daily at the site when the business is open and is responsible for the activities of such premises.
39. "Retail business" means a premises where cannabis, cannabis products, or devices for the use of cannabis or cannabis products are offered, either individually or in any combination for retail sale, including an establishment that delivers cannabis or cannabis products as part of a retail sale.
39.1. For the purposes of this Chapter, “Consumption lounge” means a facility for the onsite retail sale and consumption or smoking of cannabis or cannabis products that is a licensed premises that is a physical location from which commercial cannabis activities are conducted, as defined by Business and Professions Code Section 26070 as amended from time to time. For the purposes of this definition, “consumption” and “smoking” shall also include inhalation, vaping, and/or ingestion.
39.2. For the purposes of this Chapter, “Temporary Consumption Event” shall mean an event organized by a commercial cannabis retail business that may be single- or multi-day where people can sell and consume cannabis subject to full compliance with local, County, and State licensing requirements.
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39.3. For the purposes of this Chapter, “Temporary Consumption Festival” shall mean a large-scale event organized and held by the City of Santa Ana that may be single- or multi-day where people can sell and consume cannabis subject to full compliance with local, County, and State licensing requirements.
40. "Regulatory Safety Permit (RSP)" means a permit issued by the City pursuant to this article to a commercial cannabis business.
41. "Sell," "sale," and "to sell" include any transaction whereby, for any consideration, title to cannabis is transferred from one (1) person to another, and includes the delivery of cannabis goods pursuant to an order placed for the purchase of the same and soliciting or r eceiving an order for the same, but does not include the return of cannabis goods by a Licensee to the Licensee from whom such cannabis goods were purchased.
42. "State" means the State of California.
43. "Testing Facility" or "Testing Laboratory" defined in the Business and Professions Code section 26001, as amended from time to time, means a laboratory, facility, or entity in the State that offers or performs tests of cannabis or cannabis products and that is both of the following:
a) Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the State; and, b) Licensed by the Bureau of Cannabis Control.
44. "Wholesale" means the sale of cannabis goods to a distributor for resale to one (1) or more retail cannabis businesses.
Sec. 40-3. Compliance with state and local licensing requirements.
A. Any commercial cannabis business as defined by the State of California and the City of Santa Ana shall operate in conformance with all regulations and standards set fort h in this article to assure that the operations of any commercial cannabis business as defined by the State of California and allowed by the City of Santa Ana are in compliance with local and State law and are established to mitigate any adverse secondary effects from its operations.
B. C
ommercial cannabis businesses shall be required to obtain a Regulatory Safety Permit (RSP) from the City of Santa Ana and a State license, and shall comply with any applicable State licensing requirements, such as operational standards and locational criteria.
C. Co-l
ocation of commercial cannabis businesses proposed on any one (1) site shall occur only if authorized by the State and the City of Santa Ana and only if
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allowed pursuant to the City's Zoning Code. Any commercial cannabis activity not specifically permitted by this article is prohibited.
Sec. 40-4. Maximum number of regulatory safety permits for commercial cannabis retail businesses.
A. Twenty (20) total medicinal cannabis retail businesses (as regulated by Article XIII of Chapter 18);
B. Thirty (30) total adult -use cannabis retail businesses (which could include any or all of the medicinal cannabis retail businesses)
A. The total number of commercial cannabis retail businesses in operation shall be determined based on a figure established by resolution of the City Council.
B. In no case shall the maximum number of regulatory safety permits for commercial cannabis retail businesses be less than thirty (30).
C. All commercial cannabis retail businesses may sell medicinal and adult -use cannabis.
Sec. 40-5. Zoning compliance and regulatory safety permit requirements.
Commercial cannabis activities are expressly prohibited in all zones in the City of Santa Ana; however, specific commercial cannabis businesses are allowed in the Industrial zoning districts (M -1, M-2) areas specified on the Commercial Cannabis Eligible Areas Map as adopted by resolution of the City Council. The allowed current permit types are described in Table 40-5 and the City of Santa Ana's zoning ordinance as a requisite for obtaining a Regulatory Safety Permit. No commercial cannabis business may operate in the City of Santa Ana without a Regulatory Safety Permit.
This Land Use Table 40- 5 shall be used to determine whether a commercial cannabis business is permitted — "P," or not permitted — "X." Any commercial cannabis business in the City of Santa Ana shall also operate in compliance with the City's zoning ordinance.
If a Zoning District is not listed in the Land Use Table in this section, then the use is expressly not permitted.
City of Santa Ana Municipal Code Table 40-5
Commercial
Cannabis
Business
Activities Use
Type
Land Use
Classification
Indication on the
Commercial
Cannabis Eligible
Areas Map
M-1 Zone
M-2
Zone
Regulatory
Safety
Permit
Required
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Cultivator/Nursery Indoor only P P Yes
Cultivator/Nursery Outdoor or mixed-
light X X NA
Cultivator/Nursery
Indoor/Outdoor —
Type 5 A
(Cultivation;
Indoor; Large )
Grows, as defined
and amended by
the State ,
permitted
beginning
January 1, 2023)
X P X P NA Yes
Manufacturing
(including “shared
manufacturing”)
Manufacturing P P Yes
Retail
Medicinal Retail
(SAMC Chapter
18)
P P Yes
Retail Adult-Use Retail P P Yes
Testing Laboratory
Adult-Use and/or
Medicinal
Industrial
P P Yes
Distribution Freight/Transport P P Yes
Microbusiness
Cultivation/Retail/
Manufacturing/
Distribution
P – only as part of
a vertically -
integrated/co-
located business
in full
conformance
with the
requirements of
this and Chapter
18. P – only as part
of a vertically -
integrated/co-
located
business in full
conformance
with the
requirements of
this article and
Chapter 18.
Yes
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Consumption
Lounge
Consumption
Lounge, as an
ancillary
component to
Retail
P P Yes
Sec. 40-6. Location and Separation requirements for all commercial cannabis retail businesses.
A. C ommercial cannabis businesses may only operate within an area in accordance with the Commercial Cannabis Eligible Areas Map as adopted by r esolution of the City Council.
B. No commercial cannabis retail business shall be located within five hundred (500) feet of another retail cannabis business, as measured fr om primary entrance of the business to primary entrance of the other business.
(a) No commercial cannabis retail business shall be located within one thousand (1,000) feet of any:
(1) School (K-12) as defined by Section 11362.768 of the Health and Safety Code; or (2) Park; or
(3) Existing Residential zones in place on November 4, 2014. (b) No commercial cannabis retail business shall be located within five hundred (500) feet of another retail cannabis business, except for permitted co-location.
Sec. 40-7. Separation requirements for non- retail (cultivation, manufacturing, testing laboratory, and distribution) commercial cannabis businesses Relocation of commercial cannabis retail businesses (medicinal and/or adult-use). (a) Relocation of an existing medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business as defined in this Chapter is permitted within the City of Santa Ana subject to the following:
(1) The medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business must hold a valid RSP, business license, and the appropriate State commercial cannabis license, and be operating with all required permits and licenses. For the purposes of this sub- section, “operating” means a medical marijuana collective, medical marijuana cooperative, and/or adult -use cannabis retail business currently holding a valid RSP and Santa Ana business license.
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(2) The existing RSP holder and existing location must be in good standing, including but not limited to full compliance with all requirements of the Santa Ana Municipal Code, no active code enforcement and/or building safety violations, no violations of regulations imposed by the State of California and County of Orange, and have no outstanding business license fees and taxes , except those subject to and performing under a Finance and Management Services Agency approved payment plan agreement.
(3) An application to relocate to a proposed new location may be filed after October 1, 2023.
(4) The proposed new location of the medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business is in full compliance with the zoning and separation requirements for commercial cannabis retail businesses as outlined in Sections 40-5 and 40-6 of the Santa Ana Municipal Code. (5) The proposed new location of the medical marijuana collective, medical marijuana cooperative, and/or adult -use cannabis retail business must comply with separation requirements of this Chapter except that the proposed new location must also satisfy said separation requirements from any location identified on the Qualified Registration Applicant List (“Waitlist”), as defined in Section 40-104 of this chapter and from any entity selected during the City’s evaluative process in 2018.
(b) Any operating medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business wishing to relocate shall be required to concurrently: (1) F ile an application for an RSP by and (2) Submit all required construction plans for plan check by the City, subject to the requirements of this Chapter and other applicable chapters of the Santa Ana Municipal Code, and operate within 180 days of construction permit issuance. An extension may be issued for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the Director of Planning and Building or his or her designee.
(c) Upon issuance of the RSP for the new location, the previous location’s RSP and certificate of occupancy immediately becomes null and void and the location must cease to operate.
(d) Within 60 days of issuance of the RSP for the new location, the applicant must provide the City documentation demonstrating that any State- issued commercial cannabis retailer license associated with the previous location has been cancelled, rescinded, or updated to reflect the new location.
(a) N o non-retail commercial cannabis business shall be located within one thousand (1,000) feet of any:
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(1) School (K-12) as defined by Section 11362.768 of the Health and Safety Code; or (2) Park; or
(3) Existing Residential zones in place on November 4, 2014.
Sec. 40- 8. General provisions for commercial cannabis activities in the City of Santa Ana.
1. Regulatory Safety Permit Required.
a. Each commercial cannabis business shall obtain a Regulatory Safety Permit (RSP) specific to the business activity or activit ies defined by the State pertaining to that activity. The only allowed current activity types pursuant to this article are for commercial cannabis retail sales and cultivation, distribution, manufacturing, and testing laboratories/facilities. Co-location is permitted pursuant to Section 40-9.3.1. b. It shall be unlawful for any person, as defined by this ordinance, to engage in, conduct or carry on, in or upon any premises within the City of Santa Ana any commercial cannabis business without a RSP. A commercial cannabis business shall register and obtain a RSP from the City of Santa Ana prior to operation. The RSP applicant shall pay an annual non- refundable application fee in an amount established by the City Council.
c. A copy of the RSP shall be displayed at all times in a place visible to the public. d. A RSP shall be valid for a period of one (1) year from the date of issuance, unless sooner revoked. No permit granted herein shall confer any vested right to any person or business for more than the above-referenced period.
2. Maintenance of Records and Reporting. All records shall be maintained by the commercial cannabis business for a period of five (5) years and shall be made available by the commercial cannabis business to an authorized City of Santa Ana representative upon request. If they are not produced as requested, the City may seek a search warrant, subpoena, or court order. In addition to all other formats that the commercial cannabis business may maintain, these records shall be stored by the business at the location in a printed format in a f ireproof safe or filing cabinet. Any loss, damage or destruction of the records shall be reported to the Police Department within twenty-four (24) hours of the loss, destruction or damage. a. T he business shall obtain and maintain a valid Seller's Permit from the State Board of Equalization California Department of Tax and Fee Administration (CDTFA). b. Financial records include, but are not limited to: bank statements, sales invoices, receipts, tax records, and all records required by the California State Boar d of Equalization CDTFA under Title 18 California Code of Regulations section 1968.
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c. Personnel records, including each employee's full name, address, phone number, social security, or individual tax payer identification number, date of beginning employment, and date of termination of employment if applicable. d. Training records, including, but not limited to, the content of the training provided and the names of the employees that received the training. e. Contracts with other businesses regarding commercial cannabis business activity. f. Permits, licenses, and other local authorizations to cond uct the commercial cannabis business activity.
g. Security records, as outlined in the Operational Standards for All Commercial Cannabis Business Activities.
h. Proof of building ownership or landlord letter acknowledging business type. i. Proof of insurance.
3. Operational Standards for All Commercial Cannabis Business Activities. a. The location, interior and exterior, shall be monitored at all times by web- based closed circuit television for security purposes. The camera and recording system must be of adequate quality, color rendition and resolution to allow the ready identification of any individual committing a crime anywhere on or adjacent to the location. The recordings shall be maintained unaltered in a secure location for a period of not less than ninety (90) days. The Police Department may request the recordings in connection with an investigation.
b. All controlled access areas, security rooms and all points of ingress/egress to limited access areas and all point of sale (POS) areas shall have fixed camera coverage capable of identifying activity occurring within a minimum of twenty (20) feet.
c. The surveillance system storage device or cameras shall be transmission control protocol/TCP capable of being accessed through the internet by the police department or their designee on request.
d. If applicable, the applicant shall conduct and pay for any required CEQA reviews and analyses, and pay for all costs, including those of the City, associated with project review under CEQA.
e. Commercial cannabis businesses shall c reate and maintain an active account within the State's track and trace system prior to commencing any commercial cannabis retail activity. In the event of system failure, the business shall keep a hard copy record and transfer the information to the track and trace system within twenty-four (24) hours of the system being available.
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f. No physical modification of the licensed premises is allowed without written prior permission by the City of Santa Ana and payment of any additional fees required by the City.
g. Commercial cannabis business businesses shall provide adequate off -street parking and comply with the City of Santa Ana Municipal Code parking requirements in order to service customers without causing negative impact. h. The commercial cannabis business sh all provide adequate disabled access parking per the requirements in the California Building Code. i. The commercial cannabis business shall minimize nuisances such as trash, litter, and graffiti.
j. Any and all signage, packaging, and facilities shall not be "attractive," as it is defined by the State, to minors.
k. Commercial cannabis business facilities shall be required to provide an air treatment system that ensures off -site odors shall not result from its operations.
This requirement at a minimum means that the facility shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location is not detected outside the building, in any adjacent tenant suites, on adjacent properties or public rights -of-way, or within any other unit located within the same building as the facility if the use occupies only a portion of a building.
l. The commercial cannabis business shall comply with all State regulations regarding:
i. Testing, labeling and storage of all cannabis products. ii. Use of appropriate weighing devices.
iii. Electrical and plumbing regulations subject to periodic and unannounced inspections to ensure compliance.
iv. State deadlines for applying for a State license and r eceiving a State license within six (6) months after the date the State begins issuing licenses. This may be waived if the State has longer delays in issuing licenses of the type the commercial cannabis business seeks.
m. The commercial cannabis business shall maintain a comprehensive general liability combined single occurrence insurance policy issued by an "A" rated insurance carrier in an amount no less than two million dollars ($2,000,000.00), with primary coverage, naming the City of Santa Ana as additional insured. n. No free samples of any cannabis or cannabis product may be distributed at any time.
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o. Badges shall be worn by any individuals as required to do so pursuant to All agents, private security officers or other persons acting for or employed by a collective shall display a laminated an identification badge at least two (2) inches by two (2) inches in size the California Code of Regulations, Title 4, Section 15043 and California Business and Professions Code Section 7582.28, as amended from time to time ., issued by the City. The badge, at a minimum, shall include the employee's first and last name, date of most recent Live Scan, expiration date of Live Scan results after the one-year period, and a color photo of the employee that shows the full front of the employee's face.
p. All private security officers acting for or employed by a commercial cannabis business shall be licensed by the State and issued a security/patrol services business license from the City of Santa Ana.
q. The commercial cannabis business shall have a centrally monitored fire and burglar alarm system which shall include all perimeter entry points and perimeter windows and the building or portion of the building where the business is located shall contain a fireproof safe or fireproof filing cabinet and include a safety and security plan.
r. The commercial cannabis business shall ensure a licensed alarm company operator or one (1) or more of its registered alarm agents installs, maintains, monitors and responds to the alarm system. The alarm company shall obtain a City of Santa Ana business license.
s. The commercial cannabis business shall provide the name and phone number of an on- site staff person to the police department and the Code Enforcement Division of the Planning and Building Agency for notification if there are operational problems with the establishment.
t. The commercial cannabis business must obtain and maintain a valid City business license at all times as a condition for receiving, renewing, and maintaining its regulatory safety permit.
u. Occupancy shall not exceed that required under the Uniform Building Code and Uniform Fire Code, and the maximum occupancy load shall be posted at the main entrance.
v. For any commercial cannabis business with two (2) or more employees, the business owner shall attest that he/she has entered into a labor peace agreement and provide a copy of the agreement to the City.
w. Each commercial cannabis business owner, operator(s) and employee(s) shall complete a criminal background check and wear a visible photo ID at all times during working hours. Owners, operators, employees, managers or volunteers may not have been convicted of, or pled guilty/no- contest to a felony or
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misdemeanor drug charge within the past four (4) years; nor shall they be a person required to register as a controlled substance offender pursuant to Health and Safety Code section 11590. Any individual with an ownership interest shall complete a live scan and submit the results to the City. x. All signage for the commercial cannabis business must comply with Article XI of Chapter 41 of the Santa Ana Municipal Code.
y. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours.
4. Additional Operational Standards for Adult-Use Cannabis Retail Business. a. At all times the Adult-Use cannabis retail business is open, it shall provide at least one (1) private security guard who is licensed, possesses a valid Department of Consumer Affairs "security guard card," and has a valid business license from the City of Santa Ana as a security/private patrol service. b. The private security guard and adult-use retail cannabis business personnel shall monitor the site and the immediate vicinity of the site to ensure that patrons immediately leave the site and do not consume cannabis in the vicinity of the retail business or on the property or in the parking lot.
c. Exterior signage shall comply with Article XI of Chapter 41 of the Santa Ana Municipal Code. Interior signage or advertising may not be visible from the exterior.
Retail cannabis businesses must comply with the advertising and marketing provisions of Business and Professions Code §§ 26150—26155. d. There shall be no on -site sales of alcohol or tobacco products, (excluding rolling papers and lighters) and no on-site consumption of alcohol or tobacco by patrons.
Food may not be consumed on site, except as permitted by Section 40- 8 (10) of this chapter.
e. Hours of operation shall be limited to: 7:00 a.m. to 10:00 11:00 p.m. daily. No licensed retail business shall be open to the public between the hours of 10:01 11:01 p.m. and 6:59 a.m. of any day.
f. The Adult-Use cannabis retail business shall notify patrons of the following both verbally and through posting of a sign in a conspicuous location:
i. Secondary sale, barter or distribution of adult-use cannabis is a crime and can lead to arrest.
ii. That loitering on and around the retail site is prohibited by California Penal Code § 647(e) and that patrons must immediately leave the site and not consume cannabis in the vicinity of the retail site or on the property or in the parking lot.
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iii. A warning that patrons and/or employees may be subject to prosecution under federal cannabis laws.
iv. That the use of cannabis may impair a person's ability to drive a motor vehicle or operate machinery.
g. No one under the age of twenty -one (21) shall be allowed to enter an Adult -Use cannabis retail facility unless the licensed Adult-Use cannabis facility holds a medicinal use cannabis RSP issued by the City and retail license issued by the State, and the licensed premises for the adult-use cannabis license and medicinal cannabis license are the same in accordance with Business and Professions Code section 26140.
h. If non-cannabis food is distributed, the retail business shall comply with all relevant State laws, County and City ordinances pertaining to the preparation, distribution and sale of food.
i. All Adult-Use cannabis retail businesses shall establish and implement a program to incentivize the recycling of used containers. Failure to establish and implement a program to incentivize the recycling of used containers will result in a violation of the terms of the required commercial cannabis Operating Agreement requiring sustainable building or business practices.
j. A
dult -Use c Cannabis retail businesses shall also record on the video surveillance system point -of-sale areas and areas where cannabis goods are displayed for sale.
k. Adequate signage shall clearly state who has inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location. l. Shipments of cannabis goods may only be accepted during regular business hours.
m. Inventory shall be secured using a lockable storage system during non- business hours.
n. No cannabis product shall be visible from the exterior of the business. o. All required labelling shall be maintained on all product, as required by State law, at all times.
p. Educational tours of adult-use retail cannabis businesses shall be allowed. q. A permitted commercial cannabis retail business shall have one hundred eighty (180) days after construction permit issuance by the City of Santa Ana to operate.
A permitted commercial cannabis retail business that ceases to operate for more than ninety (90) calendar days shall be deemed "abandoned" and the permit shall be forfeited. A permitted commercial cannabis business may temporarily suspend
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operations for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the Director of Planning and Building or his or her designee. For the purposes of this section, "operate" shall mean that the gross receipts fees charged for the business exceed the fee per square foot calculations by the end of the one hundred eighty (180) day period. A pending commercial cannabis retail business shall be required to concurrently: (1) File an application for an RSP and (2) Obtain all required construction permits for the facility from the City within six months of the effective date of this ordinance, subject to the requirements of this Chapter and other applicable chapters of the Santa Ana Municipal Code, and open withi n 180 days of construction permit issuance. An extension may be issued for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the Director of Planning and Building or his or her designee. Failure to satisfy these requirements by that deadline will disqualify the applicant from the RSP Eligibility List and the Waitlist described in Article II of this Chapter. Relocation is permitted pursuant to Section 40- 7 of this Chapter.
r. (r) A licensee that is authorized to conduct medicinal and/or adult-use retail sales may donate cannabis or cannabis products and the use of equipment in compliance with any State compassionate use, equity, or other similar program in accordance with Section 26071 to the Business and Professions Code. s. Subject to approval of an operations plan by the Executive Director of the Planning and Building Agency, the opening of cannabis packages and demonstration of cannabis products at a commercial cannabis retail business is permitted for educational purposes without establishment of a consumption lounge, subject to the following requirements:
i. The maximum amount of cannabis product which may be consumed in such a setting is one-half (1/2) of one gram.
ii. There shall be a separate room dedicated for such purposes. Activities in said dedicated room shall be limited to the opening of packages, use demonstration, and consumption for consumer education purposes, by the consumer only.
iii. The dedicated room shall be limited to 100 square feet maximum size, shall be included as part of the facility’s ventilation and odor control methods, and shall be monitored using video surveillance systems.
iv. Such activities shall be subject to an administrative permit issued by the Planning and Building Agency. As part of the permit application, the applicant shall include administrative policies ensuring the opening of
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packages, demonstration and education, and limited consumption are restricted to the room and for ensuring such activities do not pose a threat to the health, safety, and welfare of other consumers, employees of the business, and visitors to the surrounding area.
5. Additional Operational Standards for Commercial Cannabis Retail Delivery Services. a. Commercial cannabis retail deliveries may be made only from a commercial cannabis retail business permitted by the City in compliance with this article, and in compliance with all State regulations.
b. All employees who deliver cannabis shall have valid identification and a copy of the commercial cannabis retail business' Regulatory Safety Permit and State license at all times while making deliveries.
c. All commercial cannabis retail businesses shall maintain proof of vehicle insurance for any and all vehicles being used to transport cannabis goods as required by State law.
d. Deliveries may only take place during normal business hours of the commercial cannabis retail business.
e. During delivery, the delivery employee shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The delivery request documentation shall comply with State law.
f. A licensed delivery employee shall not leave the State of California while possessing cannabis products.
g. A commercial cannabis retail business shall maintain a list of all deliveries, including the address delivered to, the amount and type of product delivered, and any other information required by the State.
h. A manifest with all information required in this section shall accompany any delivery person at all times during the delivery process and delivery hours. i. Any delivery method shall be made in compliance with State law, as amended, including use of a vehicle that has a dedicated GPS device for identifying the location of the vehicle (cell phones and tablets are not sufficient). j. Each delivery request shall have a receipt prepared by the commercial cannabis retail business with the following information:
i. Name and address of the commercial cannabis retail business. ii. The name of the employee who delivered the order.
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iii. The date and time the delivery request was made.
iv. The complete delivery addresses.
v. A detailed description of the cannabis goods requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested.
vi. The total amount paid for the delivery including any fees or taxes. k. At the time of the delivery, the date and time delivery was made, and the signature of the person who received the delivery.
l. No cannabis delivery vehicle shall display signs, decals or any other form of advertisement with the exception of a maximum four-inch by four-inch decal. m. Inspections by an authorized City of Santa Ana representative may be conducted anytime during regular business hours.
6. Additional Operational Standards for Commercial Cannabis Testing Facilities or Laboratories.
a. A licensed cannabis testing facility or laboratory business, its owners and employees may not hold an interest in any other cannabis business except another testing laboratory business.
b. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours.
c. Educational tours of cannabis testing facility/laboratory businesses shall be allowed.
7. Additional Operational Standards for Commercial Cannabis Manufacturing Facilities. a. A licensed commercia l cannabis manufacturing facility may conduct all activities permitted by the State. This includes, but is not limited to: extractions, repackaging and relabeling, infusions and extractions.
b. Any manufacturing that will be conducted by the commercial cannabis business shall be included on the application. No additional manufacturing activity can be conducted without notifying the Executive Director of the Planning and Building Agency or his or her designee, after which a determination will be made if the new activity may commence with or without modification to the RSP or if a new RSP is required.
c. At all times, the commercial cannabis manufacturing facility will be compliant with all State regulations for cannabis manufacturing including Health and Safety Code § 11362.775, as amended from time to time. Signage shall be posted regarding the type(s) of chemicals being used at the manufacturing facility.
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d. Cannabis manufacturing facilities shall not contain an exhibition or product sales area or allow for retail distribution of products at that location unless the facility is co-located with an approved commercial cannabis retail business with a RSP. e. Extraction equipment and extraction process utilizing hydrocarbon solvents shall be located in a room or area dedicated to extraction.
f. All commercial cannabis manufacturing/processing facilities shall comply with any and all applicable safety guidelines adopted by the Orange County Fire Authority, the State of California, and/or the City of Santa Ana for cannabis plant processing and extraction.
8. Additional Operational Standards for Indoor Commercial Cannabis Cultivation Facilities.
a. There shall be no exterior evidence of cannabis cultivation from a public right -of- way.
b. The Building Official may require additional specific standards to meet the California Building Code and Fire Code, including, but not limited to, installation of fire suppression sprinklers.
c. Compliance with Section 13149 of Water Code as enforced by the State Water Resources Control Board is required.
d. All commercial cannabis cultivation facilities shall comply with any and all applicable safety guidelines adopted by the Orange County Fire Authority, the State of California, and/or the City of Santa Ana for cannabis carbon dioxide enrichment systems.
e. Cannabis cultivation facilities shall not contain an exhibition or product sales area or allow for retail distribution of products at that location unless the facility is co- located with an approved commercial cannabis retail business with a RSP.
9. Additional Operational Standards for Commercial Cannabis Distribution Facilities. a. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours.
b. A distributor shall ensure that all cannabis goods stored in compliance with all applicable State regulations to ensure conformance to any and all applicable Track and Trace systems required by the State.
c. Employee breakrooms, eating areas, changing facilities, locker rooms and bathrooms shall be completely separated from the storage areas.
10. Additional Operational Standards for Consumption Lounges and Onsite Cannabis Consumption.
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a. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours. b. Consumption lounges are permitted as an ancillary use to a commercial cannabis medicinal or adult-use retail business.
c. Consumption lounges must be on the same site as and physically contiguous to a commercial cannabis retail business.
d. All retail sales transactions for the purposes of onsite consumption shall be conducted using point-of-sales equipment and reported separately in a format satisfactory to the Executive Director of the Finance and Management Services Agency.
e. Two (2) parking spaces per 1,000 square feet of gross building square footage shall be provided for any building expansion constructed for a consumption lounge.
f. Consumption lounges shall be designed such that a patron need not enter a consumption lounge in order to access a retail-only portion of the facility. There shall be no connection between a consumption lounge and another tenant suite.
g. Medicinal or adult -use cannabis and cannabis products may be sold on the premises of a consumption lounge, subject to the following:
i. The operator must hold a valid adult -use and/or medicinal retail business RSP.
ii. Products shall be sold for on- site consumption only. Products may not be sold for off-site consumption. All cannabis products purchased and opened at the facility must be smoked or consumed on site and shall not be permitted to leave the facility unless in a resealed package that meets all State guidelines.
iii. All products consumed or smoked on premises shall be sold at the consumption lounge. Operators shall not permit patrons to bring their own personal cannabis or cannabis products to the consumption lounge. h. Outdoor smoking is permitted with the installation of odor-control mechanisms as reviewed and approved by the Planning and Building Agency. i. Food may be consumed in the consumption lounge; however, t he sale or consumption of alcohol or tobacco products is prohibited. j. Access to the consumption lounge shall be restricted to persons twenty -one (21) years of age or older, or as allowed by State law.
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k. The consumption or smoking of cannabis products shall not be visible from any public place, public right -of-way, or area where minors may be present. If the consumption lounge contains an outdoor area, the outdoor area shall be oriented so as to eliminate visibility from any adjacent public place, public right- of-way, area where minors may be present, or adjacent business, tenant space, or building.
l. Commercial cannabis consumption lounges shall be required to provide an air treatment system that ensures off-site odors shall not result from its operations.
The facility shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location is not detected outside the building, in any adjacent tenant suites, on adjacent properties or public rights -of-way, or within any other unit located within the same building as the facility if the use occupies only a portion of a building. m. Odor control response.
i. Within twenty-four (24) hours of any complaint concerning odors emanating from or originating at the facility, the operator shall respond to the complaint in question and shall timely file a written disclosure to the Planning and Building Agency documenting any and all actions taken and planned to address the odor complaint(s). The City, upon determination of the continued existing of detectable odor from the facility , may require an operator to submit an implementation plan and/or a performance schedule, above and beyond this written disclosure filed within twenty-four (24) hours, to ensure the employment of measures to control the odor. ii. The Executive Director of the Planning and Building Agency shall have the authority to require an operator of a consumption lounge to amend any implementation plan and/or performance schedule submitted pursuant to this sub-section to cause compliance herewith.
iii. Any failure to timely submit a written disclosure, a more detailed implementation plan and/or performance schedule or amendment thereto, to timely adhere to terms of either, or to complete any required improvements within the timeframe specified by the Executive Director of the Planning and Building Agency shall be grounds for revocation of the RSP.
iv. Odors from a consumption lounge are identified as a public nuisance pursuant to the Santa Ana Municipal Code. The City may pursue all administrative, civil, and criminal remedies available in relation to any nuisance determined to exist with respect to the operation of a consumption lounge in violation of this sub-section.
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v. All consumption lounges shall be equipped with point -of-sale or similar equipment to distinguish sales of products made for onsite consumption from sales of retail products for offsite consumption.
11. Additional Operational Standards for Temporary Consumption Events and Temporary Consumption Festivals.
a. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the event.
b. All retail sales transactions for the purposes of onsite consumption during a temporary consumption event shall be conducted using point -of-sales equipment and reported separately in a format satisfactory to the Executive Director of the Finance and Management Services Agency. c. Temporary Consumption Festivals.
i. Temporary consumption festivals may be held on public or private property as approved by the City.
ii. Temporary consumption festivals may only be organized and held by the City of Santa Ana.
iii. Temporary consumption festivals are subject to all applicable standards promulgated by this Chapter for temporary consumption events.
d. T emporary consumption ev ents are permitted as an ancillary use to each commercial cannabis medicinal or adult -use retail business, subject to review and approval of a Land Use Certificate (LUC), pursuant to Section 41- 675 through 41- 677 of the Santa Ana Municipal Code, and verifi cation of any applicable required valid business licenses required pursuant to Chapter 21, Articles XII and XIII of this Code. The number of temporary consumption events permissible per business per calendar year is subject to establishment by resolution of the City Council.
e. Live entertainment may be provided only in conjunction with an approved LUC. f. Applications for temporary consumption event LUCs must be submitted at least 45 days prior to the event date.
g. Applicant(s) for a temporary consumption event must provide a copy of all final application materials submitted to the State of California pursuant to California Code of Regulations Section 15002.1 (Temporary Cannabis Event Application) as amended from time to time.
h. The event shall last no longer than 48 hours and in all cases shall begin no earlier than 8:00 a.m. and end no later than 10:00 p.m. The duration of setup
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and dismantling activities associated with the event shall be specified on the LUC application.
i. Location. Temporary consumption events must be on the same site as a commercial cannabis medicinal or adult-use retail business. j. Medicinal or adult -use cannabis and cannabis products may be sold on the premises during temporary consumption events, subject to the following:
i. The operator must hold a valid adult -use and/or medicinal retail business RSP.
ii. Products shall be sold for on- site consumption only. All unconsumed cannabis products purchased and opened at the facility must be resealed prior to leaving the facility.
iii. All products consumed or smoked on premises shall be sold at the facility.
Operators shall not permit patrons to bring their own personal cannabis or cannabis products to the event.
k. Outdoor smoking is permitted with the installation of odor-control mechanisms as reviewed and approved by the Planning and Building Agency. l. Food may be consumed; however, the sale or consumption of alcohol or tobacco products on the premises is prohibited.
m. Access to the temporary consumption and/or special event shall be restricted to persons twenty-one (21) years of age or older.
n. The consumption or smoking of cannabis products shall not be visible from any public right -of-way or area where minors may be present. If the temporary consumption event takes place in an outdoor area, the outdoor area shall be oriented to eliminate visibility from any adjacent public place, public right -of- way, area where minors may be present, or adjacent business, tenant space, or building, and shall be oriented to minimize odor intrusion onto adjacent tenant spaces and properties.
o. All events shall be required to provide an air treatment system that ensures off- site odors shall not result from its operations. The site shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location is not detected outside the building, in any adjacent tenant suites, on adjacent properties or public rights-of-way, or within any other unit located within the same building as the facility if the use occupies only a portion of a building. Outdoor smoking, including vaping and the use of other electronic inhalation devices, must take place within ventilated enclosures subject to the satisfaction of the Planning and Building Agency and Orange County Fire Authority.
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p. Odor control response.
i. Odors from a temporary consumption event are identified as a public nuisance pursuant to the Santa Ana Municipal Code. The City may pursue all administrative, civil, and criminal remedies available in relation to any nuisance determined to exist with respect to the operation of a consumption lounge in violation of this Chapter.
ii. Upon receipt of any complaint concerning odors emanating from or originating at the temporary consumption event, the Planning and Building Agency may suspend or revoke the LUC.
q. All temporary consumption events shall be equipped with point -of-sale or similar equipment to distinguish sales of products made for onsite consumption from sales of retail products for offsite consumption.
Sec. 40-9. Commercial cannabis selection process.
1. Commercial Cannabis — Registration Application and Regulatory Safety Permit Required.
a. For applicants prior to January 1, 2018: Existing medicinal cannabis business operators, or those with pending applications for a medicinal RSP, who desire to operate an adult cannabis retail business shall apply for the cannabis Regulatory Safety Permit ("RSP") on or before December 14, 2017. The Direct or of Planning and Building shall review such application and issue the RSP, without consideration of the merit based point system, so long as they satisfy all other requirements of this Chapter article and Chapter 18.
b. The Regulatory Safety Permit ("RSP") selection process will be conducted in two (2) phases, Phase 1 (Registration Application) and Phase 2 (Regulatory Safety Permit Application). Registration Applications will be reviewed by the Director of Planning and Building or designees(s) for completeness and compliance, and if eligible, will be notified in writing to enter placed on the "Regulatory Safety Permit ("RSP") Eligibility List" and entered into the Phase 2 Regulatory Safety Permit Application process. In Phase 2, the City of Santa Ana has established a merit based point system for adult -use commercial cannabis retail businesses to objectively award permits as described in the Regulatory Safety Permit Application.
2. Phase 1 — Registration Application.
a. Following the adoption of this article, the Director of Planning and Building shall prepare commercial cannabis business registration application forms and a related administrative policy. Each commercial cannabis business interested in operating
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pursuant to this article may submit an application together with a non- refundable processing fee in an amount established by the City Council. b. The Registration Application period shall be thirty (30) calendar days from the date the applications are released. Following the application period, the Director of Planning and Building or designee(s) shall stop accepting applications and review all applications received in Phase 1. Each application that is complete and in compliance with the application requirements in Phase 1 shall be placed on the "RSP Eligibility List" and shall be notified in writing whether they are a "RSP Eligible Applicant" or not. Each complete and compliant applicant on the RSP Eligibilit y List may then choose to file an application for a RSP in Phase 2. c. The requirements for Phase 1 include, but are not limited to:
i. All application documents required in the City's Phase 1 Registration Application package.
ii. Application was submitted during the application period. iii. Application forms are filled out completely.
iv. Phase 1 application fee is paid.
v. A signed statement that the proposed location of the commercial cannabis business on the application meets the zoning criteria established in this article including, but not limited to, any and all sensitive use separation criteria required by this article.
vi. Proof of site control for commercial cannabis retail businesses submitting Phase 1 applications on or after July 1, 2018.
d. The Director of Planning and Building or his or her designee(s) shall determine whether each application demonstrates compliance with the minimum requirements (above) and be placed on the RSP Eligibility List and entered into the Phase 2 application and review process.
(e) d. The Director of Planning and Building or his or her designee(s) shall review each application upon submission and ensure that the application is complete.
Incomplete applications will be promptly rejected and the applicant shall be notified in writing of the deficiencies. The applicant shall be given an opportunity to cure any incomplete or deficient application prior to the conclusion of the application processing term, if such time period is applicable.
3. Phase 2 — Regulatory Safety Permit Application.
a. Each complete and compliant applicant identified on the RSP Eligibility List may choose to complete and file a RSP application to the Director of Planning and Building. The application shall be filed together with a nonrefundable fee as
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established by resolution of the City Council, to defray the cost of investigation required by this article.
b. The RSP application period shall be open for thirty (30) calendar days and may run concurrently with the Phase 1 review period. Following the RSP application period, the Director of Planning and Building or designee(s) shall stop accepting applications and review all applications received in Phase 2. c. The Director of Planning and Building or designee(s) will review all application documents required in the City's Phase 2 application package plus the additional requirements in subsection (d) below. The Director of Planning and Building or his or her designee(s) will use a merit based point system to review and rank each of applications from the most to the least points and objectively award the top applicants a RSP. A complete description of the merit based point system and all merit based point considerations shall be included with the application forms. d. Phase 2 requirements include, but are not limited to:
i. All application documents required in the City's Phase 2 RSP application package.
ii. Phase 2 application fee is paid and a comprehensive background check is completed on all owners, employees, volunteers, managers, security guards, and/or agents.
iii. The Building Official or designee has inspected all structures in which the use is located to determine that all applicable standards and requirements are met.
If a building permit is required for site improvements, Permit issuance will be deferred until a certificate of occupancy or other building permit approval is issued. Additionally, the Building Official has determined that there are no notices of nuisance or other code compliance issues recorded or on the property.
iv. The Planning Manager or designee has issued zoning clearance documenting compliance with the following:
a. The use is permitted;
b. All land use permits, if any, have been approved and all conditions of approval have been met or are in good standing; and,
c. No zoning violations exist on the property.
e. The Director of the Planning and Building Agency or his or her designee(s) shall review each application upon submission and ensure that the application is complete. Incomplete applications will be promptly rejected and the applicant shall be notified that business day of the deficiencies. The applicant shall be given an
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opportunity to cure any incomplete or deficient application prior to the conclusion of the application processing term, if such time period is applicable.
3.1. Commercial Cannabis – Selection Process for New Commercial Cannabis Retail Businesses after January 1, 2023.
a. Measure BB Waitlist Entities. The commercial cannabis selection process for new retail licenses available after January 1, 2023 for entities on the Waitlist, as defined by Section 40-104 of this Chapter, is as follows:
i. Those entities listed on the Waitlis t as defined and set forth in Article II of this Chapter shall be afforded first priority to submit a complete RSP application for a new commercial cannabis retail business. Said RSP application must be submitted no later than March 30, 2023. Failure to submit a complete RSP application by March 30 , 2023 shall result in disqualification to obtain an RSP.
ii. The RSP application for Waitlisted entities must be for the same location as identified on the Waitlist. The location must comply with the 500- foot separation required by Section 40- 6 of this Chapter from any operating or selected entity identified during the Measure BB lottery process, or the City’s evaluative process for adult-use retailers in 2018.
iii. If there remain additional commercial cannabis retail business permits available after steps i and ii, above, then the City shall open a new window for applications as specified in subsection b, below.
b. Entities Selected during the City’s 2018 Evaluative Process. The commercial cannabis selection process for new retail licenses available after January 1, 2023 for entities selected during the City’s 2018 evaluative process is as follows:
i. If there remain additional commercial cannabis retail business permits available after the selection process identified in subsection a, above, then the City shall open a new window for applications as specified below.
ii. Those entities scored as part of the City’s evaluative process for adult -use retailers in 2018 pursuant to this Chapter may submit an RSP application after May 1, 2023 but no later than June 30, 2023. Failure to submit a complete RSP application by July 31, 2023 shall result in disqualification to obtain an RSP.
iii. Applications shall be considered in order of their scoring from the City’s evaluative process for adult-use retailers in 2018.
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iv. The RSP application for those entities scored as part of the City’s evaluative process for adult -use retailers in 2018 must be for the same location as identified on each respective application that was scored. The location must comply with the 500- foot separation required by Section 40- 6 of this Chapter, from any operating or selected entity identified during the City’s evaluative process for adult-use retailers in 2018.
c. For those entities listed on the Waitlist and for those entities scored as part of the City’s evaluative process for adult-use retailers in 2018, the commercial cannabis retail business shall complete the process to receive all necessary approvals and be operational with sustained business activity no later than one (1) year after submittal of a complete RSP application. An extension of time may be granted by the Executive Director of the Planning and Building Agency on an as-needed basis.
d. Failure of those entities listed on the Waitlist and for those entities scored as part of the City’s evaluative process for adult -use retailers in 2018 to receive all necessary approvals and be operational with sustained business activity within the specified time period will result in disqualification to obtain an RSP.
e. Any additional commercial cannabis retail business permits available after the implementation of steps a . through d. above shall be subject to the selection process identified in Section 40-9 (1), (2), and (3) of this Chapter.
3.1 3.2 Commercial Cannabis — Registration Application and Regulatory Safety Permit for Additional Commercial Cannabis Business Activities on the Same Premises (Co- Location).
a. A n existing commercial cannabis business with an RSP may co- locate additional non-retail commercial cannabis business activities (cultivation, distribution, and/or manufacturing) by applying for a new RSP for the additional use(s). The new RSP must meet the all requirements of the Santa Ana Municipal Code except that background checks (live scans) shall only be required for any new staff owners as outlined in Section 40- 8. A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter. b. N ew or pending RSP applicants wishing to co- locate additional non- retail (cultivation, distribution, and/or manufacturing) uses may submit a new RSP for any of the non-retail commercial cannabis business activities. The additional RSP must meet the all requirements of the RSP except that background checks (live scans) shall only be required for any new staff owners as outlined in Section 40-8.
A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter.
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c. New commercial cannabis business applicants — co-location.
1. New commercial cannabis retail applicants wishing to co-locate additional non- retail (cultivation, distribution, and/or manufacturing) uses shall submit separate RSPs for the proposed retail activity and another RSP for any of the non-retail (cultivation, distribution, and/or manufacturing) commercial cannabis business activities. Each RSP application will be evaluated independently and must meet any applicable requirements of the RSP as outlined in Sections 40- 8 and 40- 9, including, but not limited to, merit evaluation and additional separation requirements for the retail RSP. A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter.
2. New non-retail commercial cannabis applicants wishing to co-locate additional non-retail (cultivation, distribution, and/or manufacturing) uses may submit a single RSP for the proposed activity or activities. The RSP application must meet any applicable requirements of the RSP as outlined in Sections 40-8 and 40-9. A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter.
4. Regulatory Safety Permit Annual Renewal.
a. Applications for the renewal of a permit shall be filed with the Director of Planning and Building or designee(s) at least sixty (60) calendar days before the expiration of the current permit. Temporary permits will not be issued. Any permittee allowing their permit to lapse or which permit expired during a suspension shall be required to submit a new application, pay the corresponding original application fees and be subject to all aspects of the selection process.
b. Any person desiring to obtain a renewal of their respective permit shall file a written application under penalty of perjury on the required form with the Director of Planning and Building or his or her designee(s) who will conduct a review. The application shall be accompanied by a nonrefundable filing fee established by the City Council to defray the cost of the review required by this article. An applicant shall be required to update the information contained in their original permit application and provide any new and/or additional information as may be reasonably required by the Director of Planning and Building or designee(s) in order to determine whether said permit should be renewed based on compliance with all applicable provisions of the Santa Ana Municipal Code. c. Compliance with Section 40-1 (C) to provide for community benefits is required for all commercial cannabis businesses seeking renewal of the RSP.
5. Appeal of Denial of Regulatory Safety Permit/Denial of RSP Renewal. The Executive Director of the Planning and Building Agency City Manager or his or her designee(s) will review all Regulatory Safety Permit applications and renewal requests, along with
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all other relevant information, and determine if a RSP should be granted and/or renewed based on compliance with all applicable provisions of the Santa Ana Municipal Code. If the Executive Director of the Planning and Building Agency City Manager determines that the permit shall not be granted and/or renewed, the reasons for denial shall be provided in writing to the applicant. No such denial shall become effective until the applicant for the regulatory safety permit and/or renewal has been notified in writing by certified mail of the right to appeal the denial decision pursuant to the provisions of Chapter 3 of this Code. If a timely appeal is filed, the denial shall be effective only upon decision of a hearing officer as provided for in Chapter 3 of the Santa Ana Municipal Code. Otherwise, the denial shall become effective after the timely appeal period has passed. The matter may be subject to judicial review under the provisions of California Code of Civil Procedure Sections 1094.5 and 1094.6.
Sec. 40-9.1. Non-retail commercial cannabis business (cultivation, manufacturing, distribution, and testing facility/laboratory) selection process.
1. Non-Retail Commercial Cannabis Businesses — Registration Application (Phase 1) and Regulatory Safety Permit (Phase 2) Required.
a. Every Non -Retail Commercial Cannabis Business shall apply for the Phase 1 (Registration Application) and Phase 2 (Regulatory Safety Permit Application) in the manner described in Section 40-9, except that the Director of the Planning and Building Agency or his or her designee may accept Phase 1 and Phase 2 applications for a Non -Retail Commercial Cannabis Business concurrently, and shall review such applications and issue the Regulatory Safety Permit Application without consideration of the merit based point system, insofar as the applications satisfy all other requirements of this article and Chapter 18. b. Applications for a Non -Retail Commercial Cannabis Business shall be accepted during normal City Hall business hours and are not subject to the thirty (30) day Phase 1 or Phase 2 application periods.
Sec. 40-9.2. Commercial cannabis consumption lounge permitting process. (a) After the adoption of this Ordinance, the Executive Director of the Planning and Building Agency shall prepare application forms to evaluate a proposed commercial cannabis consumption lounge. Each commercial cannabis retail business int erested in operating a consumption lounge pursuant to this article may submit an RSP application together with a non- refundable processing fee in an amount established by the City Council.
(b) The Director or his or her designee shall determine whether each RSP application demonstrates compliance with this article as prescribed by Section 40- 9 of this Chapter and notify the applicant of the outcome of the application as either eligible or ineligible.
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(c) Qualified Consumption Lounge Applicants shall be notified by the City that they may submit any/all required documentation and plan drawings to complete the City’s plan check and permitting process to construct a consumption lounge. (d) Upon notification of eligibility , applicants shall have 180 days to complete the plan check and construction process, and be issued a certificate of occupancy, unless an extension is granted by the Executive Director of the Planning and Building Agency to resolve required building or site upgrades, modifications, repairs, or other property issue mitigations tied directly to construction of the lounge.
Sec. 40-10. Audits - Commercial Cannabis Businesses.
Annual audits. No later than September 30 of every year, each licensed commercial cannabis business , except commercial cannabis businesses lice nsed and operating solely as shared manufacturers, shall be liable to file with the City an independent audit or financial review of its operations of the previous calendar year. Provided, however, that licensed commercial cannabis businesses which operate as m icrobusiness, or that operate on a vertically or horizontally integrated basis as established in Chapter 21, Article XIII of this Code, or that are co-located on shared premises may file a consolidated independent audit or financial review. The form and contents of the document shall be specified by the Executive Director of Finance and Management Services, or his or her designee(s). The Executive Director of Finance and Management Services, or his or her designee(s) may waive this requirement for certain licensed commercial cannabis businesses in accordance with guidelines established by the Finance and Management Services Agency.
Sec. 40-11. Inspection and enforcement responsibilities.
The Code Enforcement Division of the Planning and Building Agency may enter and inspect the location of any commercial cannabis business between the hours of 7:00 a.m. and 10:00 p.m., or at any reasonable time, to ensure compliance with this article. In addition, any police officer may enter and inspect the location of any commercial cannabis business and the recordings and records maintained as required by this article, except that the inspection and copying of private medical records shall be made available to the police department only pursuant to a properly executed search warrant, subpoena, or court order. It is unlawful for any owner, responsible person, landlord, lessee, member including, but not limited to, a member engaged in the management), or any other person having any responsibility over the operation of the commercial cannabis business to refuse to allow, impede, obstruct or interfere with an inspection, review or copying of records and closed-circuit monitoring authorized and required under this article, including, but not limited to, the concealment, destruction, and falsification of any recordings, records, or monitoring.
Sec. 40-12. Violation and enforcement.
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1. Violation/enforcement. Each and every violation of this article shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by this Code. Additionally, as a nuisance per se, any violation of this article shall be subject to injunctive relief, revocation of the commercial cannabis business Regulatory Safety Permit, revocation of the certificate of occupancy for the location, disgorgement and payment to the City of any and all monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or equity. The City may also pursue any and all remedies and actions available and applicable under local and State laws for any violations committed by the commercial cannabis business and persons related or associated with the business.
2. Suspension or revocation. When an authorized City of Santa Ana representative finds that any person holding a Regulatory Safety Permit under the provisions of Chapter 40 has violated the provisions of this chapter or is found guilty of conduct which would form the basis of denial of the Regulatory Safety Permit as set forth in Article XIII of this Chapter 18, s/he may revoke or suspend the permit. No such revocation shall become effective until the Regulatory Safety Permit holder has been notified in writing by certified mail of the right to appeal the revocation decision pursuant to the provisions or Chapter 3 of this Code. If a timely appeal is filed, the revocation shall be effective only upon decision of a hearing officer as provided for in Chapter 3 of the Santa Ana Municipal Code. Otherwise, the revocation shall become effective after the timely appeal period has passed.
3. State License Suspension/Revocation. Revocation or suspension of a Licensee's State issued commercial cannabis business permit or license by the State shall constitute a violation of this article and result in revocation of the Licensee's RSP.
Sec. 40-13. Transfer of ownership.
1. Upon the transfer of any interest in a commercial cannabis business, the Regulatory Safety Permit shall be null and void. Any person, firm or entity desiring to own and operate the commercial cannabis business shall make a new Regulatory Safety Permit application. Prior to or concurrent with the submission of said application the transferee shall obtain all required business licenses, post all required security deposits, acquire all necessary, certificates, permits or other licenses allowing the doing of any act which the person paying or holding the same would not otherwise be entitled to do; and any permit, license, variance or other instrument of approval or evidence that any conditions exist as required by any other section of this Code or by any statute or code provisions of the state must first be obtained or complied with before the doing of any act or thing for which it is required. A fee as established by resolution of the City Council shall be payable for each such application involving transfer of any interest in an existing commercial cannabis retail business. The
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