CITY COUNCIL MEETING AGENDA January 6, 2026
CITY OF SHASTA LAKE
CITY COUNCIL
MEETING AGENDA
January 6, 2026
6:00 P.M.
Shasta Lake City Council Chambers
4488 Red Bluff Street Shasta Lake, CA 96019
Mayor: Justin Jones
Vice Mayor: Greg Watkins
Council Members: Toni Coates, Pamelyn Morgan, Dan Ringwelski
OTHER WAYS TO PARTICIPATE IN THE MEETING
• Watch a livestream of the meeting online or view the recording any time after the meeting concludes at the following: cityofshastalake.gov/meetings • Submit public comment electronically before the meeting to:
[email protected]. Public comment by email will be read into the record during consideration of the item the comment addresses. Each public comment will be limited to three minutes of reading. Include the item number you are commenting on in the subject line of the email. Once the vote has taken place on an item, no additional public comments will beaccepted.
• Submit public comment by mail addressed to City Clerk, City of Shasta Lake, PO Box 777, Shasta Lake, CA 96019. Mailed comments must be received one day prior to the meeting to be included.
1.0 CALL TO ORDER – REGULAR MEETING:
1.1 Call to order (please place electronic devices on silent)
1.2 Statement for the record of Council Members present or absent
1.3 Pledge of Allegiance
1.4 Invocation
2.0 AWARDS & RECOGNITIONS:
2.1 Proclamation: “Law Enforcement Appreciation Day” (pg. 4)
3.0 PRESENTATIONS:
3.1 None
4.0 COMMISSION, COMMITTEE, AND OUTSIDE AGENCY REPORTS:
4.1 None
1 CITY COUNCIL MEETING AGENDA January 6, 2026
5.0 PUBLIC COMMENT:
This time is set aside for citizens to address the City Council on matters listed on the Consent Agenda as well as other items not included on the Regular Agenda. If your comments concern an item noted on the regular agenda, please address the Council when that item is open for public comment. Each speaker is allocated three (3) minutes to speak. Speakers may not cede their time. Comments should be limited to matters within the jurisdiction of the City. Council discussion or action cannot be taken on items not listed on the agenda other than to receive comments. Speaker forms are available from the City Clerk, 4477 Main Street, Shasta Lake, on the City’s website, or at the back of the meeting hall. If you have documents to present to members of Council, please provide a minimum of seven copies. Pursuant to The Brown Act, the City Council cannot take action on Public Comment Items.
6.0 CONSENT AGENDA:
The items listed under the Consent Agenda are considered routine business and will be voted on together by one motion unless a Council Member requests a specific item to be removed and discussed separately.
6.1 Minutes of the Regular Meeting of December 16, 2025. (pg. 5)
6.2 Payrolls: (pg. 9)
Period Ending: 12/20/2025 Paid Date: 12/26/2025 $189,062.03
6.3 Checks, E-payments, and wires: (pg. 10)
12/04/2025 $911,091.39
6.4 Possible action to approve a Resolution accepting the Water Treatment Plant Centrifuge Addition Project (Bid No. 2024-01) and authorize the filing of a Notice of Completion. (pg. 15)
6.5 Possible action to appoint a new board member and an alternate representative for the City of Shasta Lake Board of Directors of the Small Cities Organized Risk Effort (SCORE). (pg. 19)
7.0 PUBLIC HEARINGS:
7.1 Public Hearing and discussion to approve a Resolution adopting the 2025 Water Management Plan Update. (pg. 23)
7.2 Public Hearing and discussion on a Resolution to approve the application submittal for fiscal year 2025, Notice of Funding Availability for the State of California Department of Housing and Community Development, Community Development Block Grant (CDBG). (pg. 29)
2 CITY COUNCIL MEETING AGENDA January 6, 2026
7.3 Public Hearing and discussion on an Ordinance and Resolution amending Chapter
5.05, “Regulation of Commercial Cannabis Activities” and adopting procedural guidelines and review criteria for the Retail Commercial Cannabis Business Permit Application Selection Process. (pg. 39)
7.4 Public Hearing and discussion on an Ordinance amendment to Chapter 17.10 “Cannabis Land Use”. (pg. 61)
8.0 REGULAR AGENDA:
8.1 Discussion and possible action to approve a Resolution approving the purchase and sale of energy and the environmental attributes of energy for 2028 and 2029. (pg. 73)
9.0 STAFF COMMENTS:
10.0 CITY COUNCIL COMMENTS AND REPORTS:
This is the time set aside for Council Members, who may so desire, to give brief comments or reports concerning City matters. The City Council may not enter into discussion on matters reported. Statements made by individual Council Members should not be interpreted as a statement of the City Council. The City Council only takes action by majority vote. • Brief reports by members of the Council regarding correspondence, events and/or meetings attended, and upcoming meetings/events.
• Suggestions/motions for future agenda items.
• In compliance with Assembly Bill 1234, Council will report on attendance at conferences/meetings/events where expenses are reimbursed by the City.
ADJOURNMENT:
Meetings are broadcast as scheduled on Charter Channel 181.
Videos of meetings are also available through the City website: www.cityofshastalake.gov In Compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please call (530) 275-7407. Notification 48 hours prior to the meeting is requested to enable the City to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102-35.104 ADA Title II). 3 JANUARY 9, 2026
LAW ENFORCEMENT APPRECIATION DAY
WHEREAS, law enforcement officers play a vital role in safeguarding the lives, property, and constitutional rights of all residents, visitors, and businesses within the City of Shasta Lake; and WHEREAS, law enforcement professionals serve with courage, integrity, and professionalism, often placing themselves in harm’s way to maintain public safety, uphold the rule of law, and respond to emergencies at all hours; and
WHEREAS, the dedicated men and women of law enforcement build trust and partnerships within the community through service, accountability, and compassion, contributing to the overall quality of life in the City of Shasta Lake; and
WHEREAS, Law Enforcement Appreciation Day provides an opportunity to recognize and express gratitude for the sacrifices made by officers and their families, as well as to acknowledge the challenges and responsibilities inherent in the profession; and WHEREAS, during calendar year 2024, the Shasta County Sheriff’s Office handled over 7,800 calls for service within the City of Shasta Lake, reflecting the high level of demand for law enforcement services and the dedication of deputies assigned to our community; and WHEREAS, the City of Shasta Lake values the dedication and service of its law enforcement partners, including our very own Shasta County Sheriff’s Department, and recognizes their vital role in maintaining public safety and fostering a safe and resilient community.
NOW, THEREFORE, BE IT PROCLAIMED, that the City Council of the City of Shasta Lake does hereby proclaim January 9, 2026, as Law Enforcement Appreciation Day, and encourages all residents to join in recognizing, honoring, and thanking law enforcement officers for their dedicated service to our community.
Dated this 6th day of January, 2026
___
JUSTIN JONES, Mayor
4 CITY OF SHASTA LAKE
CITY COUNCIL MEETING MINUTES
MINUTES OF THE REGULAR MEETING
HELD TUESDAY, DECEMBER 16, 2025, AT THE
CITY COUNCIL CHAMBERS, 4488 RED BLUFF ST, SHASTA LAKE, CALIFORNIA
1.0 CALL TO ORDER – REGULAR MEETING:.
1.1 Mayor Jones convened the regular meeting at 6:00 PM
1.2 Council Members present: Coates, Morgan, Jones, Ringwelski, Watkins
1.3 Pledge of Allegiance was led by Mayor Jones
1.4 Invocation was led by Vice Mayor Watkins
2.0 AWARDS & RECOGNITIONS:
2.1 None
3.0 PRESENTATIONS:
3.1 None
4.0 COMMISSION, COMMITTEE, AND OUTSIDE AGENCY REPORTS:
4.1 Shasta Lake Chamber of Commerce: Christmas Light Winners
5.0 PUBLIC COMMENT:
Janice Powell. Shasta Lake resident
Cheryle Yednak, Shasta Lake resident
Jim Mark, Shasta Lake resident
6.0 CONSENT AGENDA:
6.1 Minutes of the Regular Meeting of December 2, 2025.
6.2 Payrolls:
Period Ending: 11/22/2025 Paid Date: 11/28/2025 $184,342.89 Period Ending: 12/06/2025 Paid Date: 12/12/2025 $213,900.78
6.3 Checks, E-payments, and wires:
11/26/2025 $841,562.14
11/26/2025 $210,617.74
11/12/2025 Refund $165.56
5 6.4 Monthly Report of Investment Transactions:
LAIF:
November $10,009,407.26
Chandler:
November $37,145,106.44
6.5 Resolution CC-2025-77 approving the issuance of a “California Climate Credit” to all electric utility customers.
Motion/Vote
Councilman Watkins requested Item 6.5 be pulled from the Consent Agenda.
By motion made/seconded (Morgan/Watkins), and carried unanimously, the Consent Agenda, excluding Item 6.5, was approved.
Motion/Vote 6.5
After discussion on Item 6.5, Mayor Jones opened the Item for Public Comment.
Public Comment
None
By motion made/seconded (Watkins/Morgan), and carried unanimously, Item 6.5 was approved.
7.0 PUBLIC HEARINGS:
7.1 Public Hearing to establishing new solid waste rates and Resolution CC-2025-78 approving a new Franchise Agreement with Waste Management.
Public Comment
Tena Eisenbeisz, Shasta Lake resident
Tom, Shasta Lake resident
Jim Mark, Shasta Lake resident
Motion/Vote:
A motion was made/seconded (Watkins/Ringwelski) to acknowledge that there were not enough protests received, and passed unanimously.
By motion was made/seconded (Morgan/Ringwelski), and carried unanimously, Item 7.1 was approved.
8.0 REGULAR AGENDA:
8.1 Mayor’s Annual Appointments to Committees/Commissions/Boards.
Public Comment
None
Motion/Nomination of Mayor:
There was no vote required on this item
6 Mayor Jones appointed representatives to various Committees, Commissions, and Boards to represent the City of Shasta Lake.
8.2 Resolution CC-2025-79 appointing three members to the Parks and Recreation Advisory Commission for a term expiring December 2027.
Motion/Vote
Mayor Jones invited the applicants to answer questions by the City Council.
Public Comment
Anne Morningstar, Shasta Lake resident
Jim Mark, Shasta Lake resident
By motion made/seconded (Watkins/Morgan), and carried unanimously, Tina Zeller, Dan Roberts and Angel Dyer were appointed to the Parks and Recreation Commission with Bradley Hewitt as an alternate for a term expiring in December 2027.
8.3 Resolution CC-2025-80 adopting the 2025 revision to the City’s Sewer System Management Plan (SSMP).
Public Comment
None
Motion/Vote
By motion made/seconded (Watkins/Morgan), and carried unanimously, the Item was approved.
9.0 STAFF COMMENTS:
City Manager Jessaca Lugo notified the Council that the City has completed its 2024 Water Loss Audit.
The Shasta Lake Animal Control has its shelter Christmas tree up and is accepting donations and sponsorship for pet adoptions.
Fall River Brewery will have its soft opening on December 17th.
City Hall will be closed for the upcoming holidays 12/24/25, 12/25/25, and 1/1/26.
The next blood drive will be held on January 13, 2026, from 2:30pm – 5pm.
10.0 CITY COUNCIL COMMENTS AND REPORTS:
ADJOURNMENT:
With no further business, Mayor Jones adjourned the meeting at 7:52 PM. ____________________________
CHARITY TATLOW, City Clerk
7 8
12/23/2025 8:45:46 AM Page 6 of 6
Payroll Check Register
City of Shasta Lake Report Summary
Pay Period: 12/7/2025-12/20/2025
Packet: PYPKT00691 - PE 12.20.2025
Payroll Set: City of Shasta Lake - 01
Type
2 Count
0 2,810.38
0.00 Regular Checks
Manual Checks
0 0.00
0 0.00
Amount
79 186,251.65
Total 81 189,062.03
Reversals
Voided Checks
Direct Deposits
9 10
11 12
13 14
Report and Recommendations 6.4 Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Will Bond, Public Works Director/City Engineer
DATE: January 6, 2026
SUBJECT: AUTHORIZATION TO FILE A NOTICE OF COMPLETION
WTP CENTRIFUGE ADDITION PROJECT – BID NO. 2024-01
FILE NO.:
RECOMMENDATION:
Staff requests that the City Council consider accepting the project as complete and authorize the filing of a Notice of Completion (NOC) for the Water Treatment Plant (WTP) Centrifuge Addition Project – Bid No. 2024-01.
BACKGROUND:
On February 20, 2024, the City Council approved resolution CC-2024-11 authorizing the City Manager to enter into a contract with Northstate Earth and Water, Inc. for the purposes of performing the above project.
Staff has determined that the work specified in the contract has been completed and is in substantial conformance with the Plans and Specifications. Therefore, staff recommends that the Council accept the Project and authorize the filing of a Notice of Completion at the Shasta County Recorder’s Office.
FISCAL IMPACTS:
Awarded construction contract: $ 475,507.00
Approved expenditure not to exceed: $ 515,000.00
Total project construction cost: $ 494,805.00
This project is funded through currently budgeted Water Utility funds (510-340). 15 ATTACHMENTS:
Resolution
DISTRIBUTION:
City Council
16 RESOLUTION CC 2026-XX
______________________________________________________________________
A RESOLUTION OF THE CITY OF SHASTA LAKE CITY COUNCIL TO ACCEPT THE
WATER TREATMENT PLANT CENTRIFUGE ADDITION PROJECT AND
AUTHORIZE THE FILING OF A NOTICE OF COMPLETION
______________________________________________________________________ WHEREAS, the City entered into a contract with Northstate Earth and Water, Inc. for the performance of the Water Treatment Plant (WTP) Centrifuge Addition Project; and WHEREAS, Northstate Earth and Water, Inc. has completed the project to the satisfaction of City staff.
NOW, THEREFORE BE IT RESOLVED THAT the City of Shasta Lake City Council hereby accepts the WTP Centrifuge Addition Project (2024-01) as complete and authorizes staff to file a Notice of Completion with the Shasta County Recorder’s Office.
PASSED, APPROVED, AND ADOPTED this 6th day of January 2026, by the following vote:
AYES:
NOES:
ABSENT:
_______________________________
JUSTIN JONES, Mayor
ATTEST:
____________________________
CHARITY TATLOW, CMC
City Clerk
17 18
Report and Recommendations 6.5
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Jessaca Lugo, City Manager
DATE: January 6, 2026
SUBJECT: RESOLUTION APPOINTING THE NEW BOARD MEMBER FOR
THE CITY OF SHASTA LAKE TO THE BOARD OF DIRECTORS
OF THE SMALL CITIES ORGANIZED RISK EFFORT (SCORE)
FILE NO.:
RECOMMENDATION
Staff recommends that the City Council consider adoption of the attached resolution appointing Jason Peterson, Finance and General Services Manager, as the primary Board Member and Jessaca Lugo, City Manager, as the alternate representative for the City of Shasta Lake on the Board of Directors of the Small Cities Organized Risk Effort (SCORE).
BACKGROUND
With the upcoming retirement of Finance Director Wendy Howard, it is necessary to appoint a new Board Member and Alternate Board Representative to the City’s Board of Directors for SCORE, in accordance with SCORE bylaws requiring member agency appointments. Jessaca Lugo, City Manager, currently serves as the City’s alternate representative.
History of SCORE
The Small Cities Organized Risk Effort was formed in 1986 as a Joint Powers Authority (JPA) by a group of small cities seeking an alternative to the commercial insurance market. At the time, many cities were experiencing rising premiums, reduced coverage options, and limited leverage due to their size. By pooling resources, SCORE enabled member cities to collectively manage risk and self-insure key exposures.
Since its formation, SCORE has grown into a well-established public entity risk pool providing:
19 • General liability coverage
• Workers’ compensation coverage
• Property insurance programs
• Risk management, safety, and loss-prevention services SCORE operates on a member-governed model, meaning it is overseen by representatives from its member cities rather than private insurers.
Member cities are required by SCORE’s Joint Powers Agreement and Bylaws to appoint a Board Member and an Alternate Board Representative to the SCORE Board of Directors. These appointments are necessary because:
• Governance and Oversight: The Board of Directors establishes policy, approves budgets, sets contribution rates, and oversees claims and risk management programs.
• Member Representation: Appointed representatives ensure the City’s interests are represented in decisions affecting coverage, costs, and risk exposure. • Continuity and Voting Authority: An alternate representative is required to ensure the City maintains voting authority and participation when the primary Board Member is unavailable.
• Compliance with Bylaws: Formal appointments by the City Council are required to remain in good standing as a SCORE member agency.
In short, SCORE exists to give small cities collective strength and control over their risk management programs, and formal Board appointments ensure each member city has a voice in how the organization is governed and operated.
FISCAL IMPACTS:
None
ATTACHMENTS
Resolution CC-2026-XX
DISTRIBUTION
City Council
City Attorney
Finance Department
20 RESOLUTION CC 2026-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE
APPOINTING A BOARD MEMBER AND ALTERNATE BOARD REPRESENTATIVE
TO THE BOARD OF DIRECTORS OF THE SMALL CITIES ORGANIZED
RISK EFFORT (SCORE)
WHEREAS, Article VIII of the Joint Powers Agreement creating the Small Cities Organized Risk Effort (SCORE) requires the governing body of each member entity to appoint one representative and one alternate to the Board of Directors; and WHEREAS, the City of Shasta Lake is a member agency of the Small Cities Organized Risk Effort (SCORE), a Joint Powers Authority formed to provide pooled risk management and insurance services to its member cities; and
WHEREAS, the City’s current board representative, Finance Director Wendy Howard, will be retiring, necessitating new appointments to ensure continued representation and compliance with SCORE governance requirements; and
WHEREAS, it is in the best interest of the City of Shasta Lake to appoint qualified staff members to represent the City on the SCORE Board of Directors.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Shasta Lake, California, as follows:
1. Jason Peterson, Finance and General Services Manager, is hereby appointed as the City of Shasta Lake’s Board Member to the Board of Directors of the Small Cities Organized Risk Effort (SCORE).
2. Jessaca Lugo, City Manager, is hereby appointed as the City of Shasta Lake’s Alternate Board Representative to the Board of Directors of the Small Cities Organized Risk Effort (SCORE).
3. These appointments shall remain in effect until modified or rescinded by action of the City Council.
PASSED, APPROVED, AND ADOPTED this 6th day of January, 2026, by the following vote:
AYES:
NOES:
ABSENT:
_______________________________
JUSTIN JONES, Mayor
ATTEST:
21 ____________________________
CHARITY TATLOW, CMC
City Clerk
22 Report and Recommendations 7.1
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
____________________________________________________________ TO: Mayor and City Council Members
FROM: Will Bond, City Engineer
Chris Carr, Water Treatment Superintendent
DATE: January 6, 2026
SUBJECT: ADOPTION OF THE 2025 WATER MANAGEMENT PLAN
UPDATE
FILE NO.:
RECOMMENDATION
Staff recommends the City Council adopt a resolution approving the City of Shasta Lake Water Management Plan Update and authorize the City Manager to execute and submit the Plan to the appropriate state and federal agencies, as required.
BACKGROUND
The Central Valley Improvement Act of 1992 (CVPIA) and Section 210(b) of the Reclamation Reform Act of 1982 require entities that enter into a water service contract with the Bureau of Reclamation to prepare and submit a Water Management Plan.
Each Water Management Plan must be updated every five years. In compliance with this requirement, the City, with the assistance of Carollo Engineers, has completed the update to its 2025 Water Management Plan. The 2025 Update reflects current system conditions, water supplies, demands, conservation performance, and capital planning.
Adoption of the Plan ensures continued eligibility for certain state and federal funding programs and confirms compliance with water management best practices.
Public Noticing Requirements Completed:
For Water Management Plans associated with a Bureau of Reclamation contract or funding, federal law requires a public review and comment process prior to final submittal.
In accordance with Section 210 of the Reclamation Reform Act of 1982, the draft Water Management Plan was made available for public review and comment for a minimum of 23 30 days before submission to the Bureau of Reclamation. Public notice was provided through publication in a newspaper of general circulation within the service area and by posting the draft plan on the City’s website and at a physical public location, such as City Hall. Proof of publication, along with any written public comments received, will be included with the final plan submittal in compliance with 43 CFR § 427.1 and applicable Bureau of Reclamation directives and standards.
FISCAL IMPACT
None
ATTACHMENTS
Resolution CC-2026-XX
Public Notice
Hyperlink: 2025 Water Management Plan Update
DISTRIBUTION
City Council
Water Department
24 RESOLUTION CC 2026-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE ADOPTING THE 2025 WATER MANAGEMENT PLAN UPDATE
WHEREAS, the Central Valley Improvement Act of 1992 (CVPIA) and Section 210(b) of the Reclamation Reform Act of 1982 requires the preparation and submittal of a Water Management Plan (Plan) from entities that enter into a water service contract with the Bureau of Reclamation; and
WHEREAS, the City of Shasta Lake owns and operates a municipal water system providing potable water service to residents, businesses, and institutions within the City’s service area; and
WHEREAS, each Plan is required to be updated every 5 years. In compliance with this requirement, the City, with the assistance of Carollo Engineers has completed the update for the 2020 Water Management Plan; and
WHEREAS, the 2025 Water Management Plan Update was prepared by Carollo Engineers in coordination with City staff and reflects current system conditions, water supplies, demands, conservation performance, and planned capital improvements; and WHEREAS, the Water Management Plan Update demonstrates that the City continues to meet or exceed applicable water conservation targets and implements Best Management Practices for urban water suppliers; and
WHEREAS, adoption of the Water Management Plan Update supports continued eligibility for state and federal water-related funding programs and ensures compliance with applicable planning and reporting requirements; and WHEREAS, adoption of the Water Management Plan Update is a planning and policy action and does not approve or authorize any specific construction project, and therefore is not a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Shasta Lake as follows:
1. The City Council hereby adopts the City of Shasta Lake Water Management Plan 2025 Update, as presented and on file with the City Clerk.
2. The City Manager is authorized and directed to execute any necessary certifications and to submit the adopted Water Management Plan to applicable state and federal agencies, as required.
25 3. City staff are authorized to implement the policies, practices, and programs described in the Water Management Plan Update consistent with existing budgets and adopted City policies.
PASSED, APPROVED, AND ADOPTED this 6TH day of January, 2026, by the following vote:
AYES:
NOES:
ABSENT:
______________________________
JUSTIN JONES, Mayor
ATTEST:
_______________________________
CHARITY TATLOW, CMC
City Clerk
26 CITY OF SHASTA LAKE
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council of the City of Shasta Lake will conduct a Public Hearing to accept testimony and consider ADOPTION OF THE 2025 WATER MANAGEMENT PLAN UPDATE FOR THE CITY OF SHASTA LAKE on Tuesday, January 6, 2026, with the session commencing at 6:00 P.M. or as soon thereafter as possible, at the Shasta Lake City Council Chambers, 4488 Red Bluff Street, Shasta Lake, California.
Pursuant to the California Water Code section 10642, Central Valley Improvement Act of 1992, and Section 210 of the Reclamation Reform Act of 1982, the City of Shasta Lake prepared a 2025 Update to the Water Management Plan (WMP).
A copy of the Water Management Plan can be reviewed by visiting the City's website at www.cityofshastalake.gov
ALL HEARINGS ARE OFFICIALLY SET FOR 6:00 P.M. and will be conducted as soon thereafter as the business of the City Council will allow. All interested parties may either submit written comments to Charity Tatlow, City Clerk, prior to the hearing, or appear and present oral testimony.
For questions concerning the Water Management Plan document, please contact:
Chris Carr, Water Treatment Plant Superintendent
City of Shasta Lake
P.O. Box 777
4477 Main Street
Shasta Lake, CA 96019
Email: [email protected]
27 28
Report and Recommendations 7.2
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Whitney Zeller, Community and Economic Development Manager
DATE: January 6, 2026
SUBJECT: PUBLIC HEARING – APPLICATION SUBMITTAL FOR FISCAL YEAR 2025 NOTICE OF FUNDING AVAILABILITY – STATE OF
CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY
DEVELOPMENT COMMUNITY DEVELOPMENT BLOCK GRANT
FILE NO.: NEW FILE (under G-100)
______________________________________________________________________
RECOMMENDATION
Staff recommends the City Council:
1. Hold a public hearing to solicit public input for the 2025 Notice of Funding Availability (NOFA) State of California Community Development Block Grant Allocation.
2. Approve a resolution authorizing the City Manager, or designee, to submit an application for funding and the execution of a grant agreement and any amendments thereto from the 2025 funding year of the State CDBG Program, not to exceed $3,300,000.
BACKGROUND
On September 30, 2025, The California Department of Housing and Community Development (HCD) released the Community Development Block Grant (CDBG) Program 2025 Notice of Funding Availability (NOFA). The NOFA made available approximately $27 million in federal funds for Public Service and Planning, Housing Programs, Economic Development Programs, Public Facilities Projects, Infrastructure Projects, and Housing Projects. Under this program, funds are provided as grants to Non-Entitlement Units of General Local Government.
Eligible jurisdictions may submit applications for CDBG funds under the NOFA for up to three activities, for a total maximum amount of up to $3.6 million. There is only one 29 application process through the 2025 NOFA, a competitive application process, as follows:
Competitive Application Process
Each Jurisdiction may submit up to three (3) applications during this NOFA cycle:
- 1 Project + 1 Program + 1 Public Service or Planning -OR- - 1 Project + 2 Public Service or Planning -OR-
- 1 Program + 2 Public Service or Planning
**Note: 2 Projects, 2 Programs, 3 Public Service, or 3 Planning applications are NOT allowed.
Activity limits are as follows:
- Public Service – up to $300,000
- Planning – up to $300,000
- Projects – 0 up to $3.3 million
- Programs – up to $1.5 million
Jurisdictions may not apply for more than the aggregate amount of $3.6 million in grant funds, regardless of the number of applications submitted. Program Income amounts do not apply towards this limit.
All CDBG activities must meet one of the following National Objective:
• Benefit low- and moderate-income persons
The objectives of the CDBG program are to develop viable communities by the provision of decent affordable housing, a suitable living environment, and to expand economic opportunities, principally for the benefit of Low- and Moderate-Income (LMI) persons, families, households, and neighborhoods, defined as those at or below 80% of the area median income. Currently, the median income for Shasta County is $101,800 (household of 4). As a Non-Entitlement jurisdiction, the city of Shasta Lake is eligible to apply for qualified activities under the NOFA.
As part of the application process, the City must show compliance with Housing Element requirements. The City’s Housing Element was adopted in August 2020 and is compliant through 2028. Needs outlined in the Housing Element are as follows:
- Broad range of housing types for all residents
- Construction and maintenance of quality affordable housing - Maintenance and rehabilitation of the existing housing stock - Adequate infrastructure and services for residential development - Energy efficient improvements and appropriate weatherization for all new and existing housing units
- Provide a range of housing types and services for special needs groups - Safe and sanitary housing and quality living environment for all residents, without discrimination
30 Project Details
The City of Shasta Lake anticipates submitting one competitive project application for the Force Main Replacement.
Force Main Replacement Project
The City owns, operates, and maintains the wastewater collection system, which consists of approximately 58 miles of gravity mains and force mains, which convey the flow from connected units to the Shasta Lake Wastewater Treatment Plant. In 2016, the City completed a Wastewater Master Plan (WWMP), which evaluated the City’s wastewater system and recommended capacity improvements necessary to service the needs of existing users and future growth in the City. The WWMP identified the force main replacement project as an improvement necessary to mitigate deficiencies, as the existing infrastructure is at capacity and could result in loss of wastewater service to residents if the system were to fail. This project would replace and realign the force mains between Lift Station 3 (located at the intersection of Cascade Boulevard and Autumn Harvest Way) and Lift Station 5 (located westerly near the intersection of Cascade Boulevard and Pine Grove Avenue) and the wastewater treatment plant, respectively. The existing 10-inch force main from Lift Station 3 would be replaced with a new 12-inch force main, and the existing 14-inch force main from Lift Station 5 would be replaced with a new 18-inch force main. 95% design documents were completed by Pace Engineering in 2019, and a CEQA environmental review was completed in 2019 by Enplan, resulting in an Initial Study and Mitigated Negative Declaration, as well as a Mitigation Monitoring and Reporting Program. Project design was completed in 2024, with 100% design documents provided by Pace Engineering. The Force Main Replacement Project was identified in the WWMP to be completed by Fiscal Year 2025.
The project would service Basins 2, 3, and 5, which include approximately 9,278 individuals, of which 5,225 (56%) are considered low-to-moderate income. The total project cost is estimated at $7,414,000. If the City were to receive the maximum 2025 CDBG award of $3,300,000, it would reduce the City’s financial obligation for the project to $4,114,000, to be funded through wastewater capital improvement funds. The City applied for funding in the 2024 CDBG Over-the-Counter Program, but was not awarded.
The 2025 Wastewater Utility Rate Study, prepared by Water Resources Economics, determined that only 50 percent of the Force Main Replacement Project can be financed through debt supported by wastewater ratepayers, the majority of which are low-income households. Without grant funding, the remaining funding gap renders the project infeasible. Despite the City’s efforts to secure external funding, rising construction costs continue to widen the funding gap and increase the level of grant assistance required to deliver this critical infrastructure project. If 2025 CDBG funds are awarded, the project would need to be initiated within 60 days of contract execution and is estimated to take 24 months to complete. Per 24 CFR 570.488, the proposed project would not result in any displacement or relocation of residents.
More information on the CDBG Program can be found at:
https://www.hcd.ca.gov/grants-and-funding/programs-active/community-developmentblock-grant
FISCAL IMPACT
If funding is awarded, a supplemental appropriation to the budget will be brought to the City Council for review and approval.
31 Force Main Replacement Proposed Funding ($7,414,000 Total) Source Amount
Wastewater Capital Improvement Funds $4,114,000
2024 CDBG OTC Program $3,300,000
ATTACHMENTS
Resolution CC-2026-XX
Force Main Replacement Project Map and Collection Basins
DISTRIBUTION
City Council
32 Department of Housing and Community Development
Resolution Form Revised 3/18/2025 2025 CDBG NOFA
Appendix C: Resolution Template of the Governing Body
(Required)
Applicants are required to use the resolution form on the following page with no changes to content other than what is in the fillable fields.
When completing and preparing the Resolution, please refer to section V.D. of the 2025 NOFA.
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To display hidden text:
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2. Select Options from the bottom of the left-hand column
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Note 1: The attesting officer cannot be the person identified in the Resolution as the authorized signer.
Note 2: Unless there is a city ordinance stating otherwise, the mayor must be the designated official in Section 5.
33 Resolution of the Governing Body
RESOLUTION NO. CC 2026-XX
A RESOLUTION APPROVING AN APPLICATION FOR FUNDING AND THE
EXECUTION OF A GRANT AGREEMENT AND ANY AMENDMENTS THERETO FROM THE 2025 FUNDING YEAR OF THE STATE CDBG PROGRAM
BE IT RESOLVED by the City Council of the City of Shasta Lake as follows:
SECTION 1:
The City Council has reviewed and hereby approves the submission to the State of California of one or more application(s) in the aggregate amount, not to exceed, of $3,300,000 for the following CDBG activities, pursuant to the and 2025 CDBG NOFA:
List activities and amounts
Activity (e.g. Public Services,
Infrastructure, etc.)
Dollar Amount Being Requested for the
Activity
Public Improvement Project – Force Main Replacement $ 3,300,000 $
$
$
$
SECTION 2:
The City Council hereby approves the use of Program Income in an amount not to exceed $0 for the CDBG activities described in Section 1.
SECTION 3:
The City Council acknowledges compliance with all state and federal public participation requirements in the development of its application(s).
SECTION 4:
The City Council hereby authorizes and directs the City Manager or designee*, to execute and deliver all applications and act on the City’s behalf in all matters pertaining to all such applications.
SECTION 5:
If an application is approved, the City Manager or designee*, is authorized to enter into, execute and deliver the grant agreement (i.e., Standard Agreement), any recordable or nonrecordable contract documents, and any and all subsequent amendments thereto with the State of California for the purposes of the grant. 34 SECTION 6:
If an application is approved, the City Manager or designee*, is authorized to sign and submit Funds Requests and all required reporting forms and other documentation as may be required by the State of California from time to time in connection with the grant.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Shasta Lake held on 1/6/2026 by the following vote:
AYES: Enter # of votes or names
NOES: Enter # of votes or names
ABSENT: Enter # absentees or names
ABSTAIN: Enter # of abstains or names
Justin Jones, Mayor
City Council
STATE OF CALIFORNIA
City of Shasta Lake
I, Charity Tatlow, City Clerk of the City of Shasta Lake, State of California, hereby certify the above and foregoing to be a full, true and correct copy of a resolution adopted by said City Council on this 6th day of January, 2026 and that said resolution has not been amended, modified, repealed, or rescinded since its date of adoption and is in full force and effect as of the date hereof.
Charity Tatlow, City Clerk of the City of Shasta Lake, State of California
______________________________________
By: Charity Tatlow, CMC, City Clerk
35 36
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37 38
Report and Recommendations 7.3
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Jessaca Lugo, City Manager
DATE: January 6, 2026
SUBJECT: PUBLIC HEARING AND CONSIDERATION OF ORDINANCE AND RESOLUTION AMENDING CHAPTER 5.05, “REGULATION OF
COMMERCIAL CANNABIS ACTIVITIES,” AND ADOPTING THE
PROCEDURAL GUIDELINES AND REVIEW CRITERIA FOR THE
RETAIL COMMERCIAL CANNABIS BUSINESS PERMIT
APPLICATION SELECTION PROCESS
FILE NO.: C-015-080-060
RECOMMENDATION
Staff recommends that the City Council receive a staff presentation, conduct a Public Hearing, and subsequently approve an ordinance and resolution amending Chapter 5.05, “Regulation of Commercial Cannabis Activities.”
BACKGROUND
At the July 15, 2025, City Council meeting, the City Council voted to temporarily pause the acceptance of retail applications and established a Commercial Cannabis Ad Hoc Committee to discuss existing Commercial Cannabis Regulations, create a retail license application selection process, and review suggested regulatory updates. The Ad Hoc Committee held two public meetings, during which they met with staff, commercial cannabis stakeholders, and subject-matter specialists to evaluate the operational challenges encountered during the licensing process.
Through this review, the Committee identified a series of miscellaneous but meaningful updates spanning definitions, application submittal requirements, evaluation procedures, timelines, and compliance protocols. These recommended changes aim to streamline internal workflows, clarify expectations for applicants, and ensure that the Ordinance 39 continues to align with evolving state law and best practices within the cannabis regulatory field and the Shasta Lake community.
The update includes additional definitions, addresses separation requirements for cannabis retailers, sets forth a timeline for application abandonment, and establishes a retail application selection process. Additionally, the revision aligns the maintenance and retention requirements for records with those of the California Department of Cannabis Control.
FISCAL IMPACTS:
The number of licensed retail licenses remains unchanged, so staff does not anticipate a fiscal impact.
ATTACHMENTS
Ordinance ORD-2026-XX
Resolution CC-2026-XX
Public Hearing Notice
DISTRIBUTION
City Council
City Attorney
Finance Department
40 ORDINANCE CC 2026-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE
AMENDING CITY MUNICIPAL CODE SECTIONS FOR REGULATION OF
COMMERCIAL CANNABIS ACTIVITIES
The City of Shasta Lake City Council does hereby ordain that City of Shasta Lake Municipal Code Article V Section 5.05 is hereby amended to read as follows:
Section 1. Chapter 5.05 Regulation of Commercial Cannabis Activities
Attached hereto as Exhibit A
Section 2. Severability: If any provision of this ordinance or the applications thereof to any person or circumstances is held invalid, the remainder of the ordinance and the applications of such provision will remain in effect to the extent permitted by law.
Section 3. Effective Date: This ordinance shall take effect 30 days after the date of its second reading and posting pursuant to City Code.
I HEREBY CERTIFY that the foregoing Ordinance was introduced and read at a regular meeting of the City Council of the City of Shasta Lake held on the 6th day of January 2026.
PASSED, APPROVED, AND ADOPTED this 6th day of January, 2026, by the following vote:
AYES:
NOES:
ABSENT:
_______________________________
JUSTIN JONES, Mayor
ATTEST:
____________________________
CHARITY TATLOW, CMC
City Clerk
41
Exhibit A
Chapter 5.05 REGULATION OF COMMERCIAL CANNABIS ACTIVITIES
5.05.010 Purpose and intent.
It is the purpose and intent of this section to regulate the cultivation, manufacturing, testing, distribution, and sale of cannabis in order to ensure the health, safety and welfare of the residents of the city. The regulations in this article, in compliance with the Compassionate Use Act, the Medical Marijuana Program Act, Proposition 64 (AUMA), SB 94 (MAUCRSA) and the California Health and Safety Code (collectively referred to as "state law") do not interfere with the right to use cannabis or medical cannabis as authorized under state law, nor do they criminalize the possession or cultivation of cannabis or medical cannabis as authorized under state law. All commercial cannabis business shall at all times be in compliance with current state law at a minimum.
5.05.020 Scope of article.
The operating standards established in this article apply to any site, facility, location, use, or business currently operating in the city, or which commences operations after the effective date of this section, that cultivates, distributes, dispenses, stores, sells, exchanges, processes, delivers, or gives away cannabis for medical or recreational purposes. Any commercial cannabis business shall operate in conformance with the operating standards set forth in this section of the code to assure that the operations of the retail facility, cultivation facility, manufacturing facility, distribution facility or testing facility are in compliance with state law and to mitigate the adverse secondary effects from its operations.
Persons who cultivate cannabis for their sole personal use, or qualified primary caregivers who cultivate medical cannabis on behalf of their qualified patient(s) may do so in quantities recommended by their physician and in accordance with all state and local regulations without submitting any application or permit. It is hereby declared to be unlawful and a public nuisance may also be deemed to exist if such activity is determined to be related to the cultivation of cannabis and produces:
1. Odors which are disturbing to people residing or present on adjacent or nearby property or areas open to the public.
2. Repeated responses to the property from law enforcement or other code enforcement officers (more than three times in a one-year period).
3. Repeated disruption to the free passage of persons or vehicles in the neighborhood (more than three times in a one-year period) as reported to law enforcement officers or the city code enforcement officer.
4. Any other impact which adversely impacts the health, safety or general welfare of people on adjacent or nearby property or areas open to the public.
Nothing in this chapter shall be construed as a limitation on the city's authority to abate any nuisance which may exist from the planting, growing, harvesting, drying, processing or storage of cannabis plants or any part thereof from any location.
All cannabis cultivation shall be subject to Chapter 8.12 (summary abatement-immediately dangerous buildings and conditions), Chapter 8.16 (abatement of dangerous buildings, substandard buildings and public nuisances) and the state housing code (California Health and Safety Code) and other applicable provisions of local and state law.
42
5.05.030 Definitions.
The definitions listed here are applicable throughout this code where cannabis is referenced. All definitions are intended to comply with those in this code, state regulations, Business and Professions Code, and in the California Health and Safety Code, and as they may be amended. "Applicant" shall mean an owner who is required to file an application for a permit or license under this chapter.
"Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, "cannabis" does not mean "industrial hemp" as defined by Section 11018.5 of the Health and Safety Code.
“Cannabis Application Selection or Review Committee” consists of designated staff members from departments to include: Electric Utility, Finance, and Planning. "Cannabis goods" means both cannabis and/or cannabis products. "Cannabis products" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients. "Cannabis manufacturing site" means the premises that produces, prepares, propagates, or compounds manufactured cannabis or cannabis products either directly or indirectly, or by extraction methods, or by a combination of extraction and chemical synthesis at a fixed location that packages, or repackages cannabis goods, or labels or relabels its container.
"Cannabis testing facility" means a public or private laboratory licensed and certified or approved by the Bureau of Cannabis Regulation or any other regulatory body controlling testing facilities, to conduct research and analyze cannabis, cannabis products, and cannabis concentrate for contaminants and potency. "Canopy" means the total combined canopy area for all locations on a property where cannabis is being cultivated, including indoor areas, outdoor areas, or a combination of both, as measured by the horizontal extent of the plant or combination of plants at the widest point and measured in a straight line. "City manager" means the city manager of the City of Shasta Lake or designee. "Commercial cannabis business" means any business which engages in commercial cannabis activity. "Commercial cannabis business" also means the location at which a person engages in commercial cannabis activities.
"Commercial cannabis business permit" means a regulatory permit issued by the City of Shasta Lake pursuant to this chapter to a commercial cannabis business to engage in those commercial cannabis activities authorized by the permit and is required before any cannabis business may conduct any commercial cannabis activity in the city. "Commercial cannabis activity" includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, dispensing, or sale of cannabis and/or cannabis products.
"Cultivation" and/or "cultivate" shall mean the planting, growing, harvesting, drying, processing, or storage of one or more cannabis plants or any part thereof.
43
"Customer" means a natural person twenty-one (21) years of age or older or a natural person eighteen (18) years of age or older who possesses a physician's recommendation, or a primary caregiver who is engaged in a transaction with a retailer for purposes of obtaining cannabis goods, i.e., purchase. “Daycare Center” or "Licensed Daycare Center" means any child care-infant center, child care center, or child care center preschool licensed by the State of California Department of Social Services. "Delivery" means the commercial transfer of cannabis or cannabis products to a customer. "Delivery" also includes the use by a retailer of any technology platform owned and controlled by the retailer, or independently licensed, that enables customers to arrange for or facilitate the commercial transfer by a licensed retailer of cannabis or cannabis products.
"Distribution" means the procurement, sale, and transport of cannabis goods between state-licensed cannabis businesses.
"Distributor" means a commercial cannabis business that is locally authorized to engage in the distribution of cannabis goods.
"Employee" shall mean any person employed by a commercial cannabis business that is locally authorized to engage in commercial cannabis activity.
"Immature cannabis plant" or "immature plant" means a plant that is nonflowering and is shorter and narrower than eighteen (18) inches.
"Indoor cultivation" means cultivation that is conducted within a fully enclosed, permitted building or structure, accessible only through one or more locking doors, which is secure against unauthorized entry, and which uses artificial light.
"Labeling" means any label or other written, printed, or graphic matter upon a cannabis good, upon its container or wrapper, or that accompanies any cannabis good. "Manager" shall mean an employee responsible for management and/or supervision of a commercial cannabis business.
"Manufacture" means to produce, prepare, propagate, or compound, or otherwise blend, extract, or infuse cannabis and/or a cannabis product either directly or indirectly, or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis. "Mixed-light cultivation" means cultivation of cannabis using light deprivation, and both natural and/or artificial lighting during the growing cycle, in a permanent facility, which is a building constructed on a permanent foundation in compliance with the California Building Code and complies with all applicable requirements cited within this chapter.
"Non-climbable fence" means a fence with a smooth exterior surface that is not equipped with steps or other provisions for climbing.
"Nursery" means a commercial cannabis business that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis. "Outdoor cultivation" means any commercial cannabis cultivation without the use of light deprivation and/or artificial lighting in the canopy area, and that is not conducted within a fully enclosed, permitted building, accessible only through one or more locking doors, which is secure against unauthorized entry. "Person" includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business, business trust, receiver, syndicate, collective, cooperative, or any other group or entity, or combination acting as a unit, and the plural as well as the singular. "Premise" means the designated structure(s) and land of a legal parcel specified in the application that is owned, leased, used, possessed, or otherwise held under the control of the commercial cannabis business where the commercial cannabis activity will be or is conducted. The premise shall be a contiguous area and shall only be occupied by one permittee.
44
"Primary caregiver" shall have the same meaning as set forth in California Health and Safety Code Section 11362.7.
"Qualified patient" shall have the same meaning as set forth in the California Health and Safety Code Section 11362.7.
"Retail" or "retailer" means a premise that is locally authorized to engage in retail sale and delivery of cannabis or cannabis goods.
"Retail nursery" means a premise that is locally authorized to engage in retail sale and delivery of only cannabis clones, immature plants, and seeds. The sale of all other cannabis goods is prohibited. "School" means any public or private school providing instruction in kindergarten or grades one to twelve (12), inclusive, but does not include any private school in which education is primarily conducted in private homes. "Youth center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.
5.05.040 Separation requirements.
No commercial cannabis business may be located within a 900-feet linear foot (from property line to property line) from a school, day care home, recreational center, youth center, library or public park.
No commercial cannabis retail business may be located within a 600-feet linear foot (from property line to property line) from another permitted commercial cannabis retail business. (Ord. No. 19-276, § 3(Exh. A), 9-17-2019)
5.05.050 Maximum number of retail businesses permitted citywide.
In no case shall the city allow more than three retail businesses to operate within city limits, regardless of the location's compliance with any other section specified in this title. Retail nurseries are excluded from this restriction.
5.05.060 Commercial cannabis cultivation, testing, manufacturing, distribution and retail facilities.
A. Commercial cannabis cultivation shall be limited to indoor cultivation or mixed-light cultivation only. Outdoor cultivation is prohibited.
B. Cannabis cultivation, distribution, manufacturing or testing facilities shall not contain an exhibition or product sales area or allow for retail sale of products at that location.
C. All commercial cannabis businesses 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, 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.
45 Created: 2025-08-21 12:21:21 [EST]
(Supp. No. 23, Update 1)
5.05.070 Commercial cannabis business permit required.
A. It shall be unlawful for any person, association, partnership or corporation to engage in, conduct or carry on, in or upon any premises within the city without a commercial cannabis business permit. A cannabis business shall register and obtain a commercial cannabis business permit from the city prior to operation. The applicant shall pay a nonrefundable fee in an amount established by the city council.
B. A copy of the commercial cannabis business permit shall be displayed at all times in a place visible to the public.
C. A commercial cannabis business permit shall be valid for one year, unless sooner revoked. No permit granted herein shall confer any vested right to any person or business for more than the above-referenced period.
5.05.080 Commercial cannabis business permit.
A. A commercial cannabis business permit shall not be issued to an individual or a business entity associated with an individual, who has violated California Health and Safety Code Section 11590 and its provisions.
B. The commercial cannabis business permit shall be issued to the specific person or persons listed on the cannabis permit application.
C. A commercial cannabis business permit does not transfer with the land and does not transfer with the transfer of the property.
5.05.090 Commercial cannabis business permit application submission process.
A. The city manager will prepare cannabis application forms and a related administrative policy. Each applicant interested in operating pursuant to this section may submit an application together with a nonrefundable processing fee in an amount established by the city council.
B. The city manager shall determine whether each application received demonstrates compliance with the minimum requirements to be eligible to be entered into the selection process. These requirements include:
1. Application was submitted during the application period.
2. Application is filled out completely.
3. Application fee is paid.
4. The location indicated on the application meets the zoning criteria established in Section 17.10.020.
5. The location indicated on the application meets the separation criteria established in Section 5.05.040.
6. A planning and/or building permit with a receipt proving payment for processing from the city planning department for the property location the commercial cannabis business will occupy.
7. A notarized signature from the property owner authorizing the location to be used for commercial cannabis business activity.
8. Authorization from the management association/CC&R's that a cannabis business use is allowed on that parcel (if applicable).
9. Business owner(s)/applicant(s) referenced on the application completes live scan background check.
10. There may be no change in applicant/business owner from the one(s) listed on the commercial cannabis business permit application.
46
11. All other application documents required in the city's application package instructions, state regulations and any other applicable regulations as they may be amended.
12. Photographs of the exterior of the building including the entrance(s), exit(s), street frontage(s) and parking area.
13. If the property is being rented, leased or purchased under contract, the lease agreement term, name of lessor or equivalent, shall be provided by a notarized signed affidavit of the property owner.
14. The name and address of the applicant's current agent for service of process.
15. A copy of the applicant's board of equalization seller's permit.
16. A copy of the commercial cannabis business operating standards, listed in Sections 5.05.140, 5.05.150, and 5.05.160 if applicable containing a statement dated and signed by the business owner stating that under penalty of perjury that they read, understand and shall ensure compliance with the aforementioned operating standards.
17. Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.
18. Release of the city from all liability associated with the commercial cannabis business. Such a release includes indemnifying the city for claims, damages and injuries that may arise as a result of the commercial cannabis business.
19. Provide a completed utility load information form.
5.05.100 Environmental clearance required for commercial cannabis business permit applications.
A. The purpose of this section is to provide the City of Shasta Lake, permit applicants, and the public with the procedures to be used in administering the city's responsibilities under the California Environmental Quality Act (CEQA), codified as Public Resources Code Section 21000, et seq., as amended. The procedures are intended to protect both local and regional natural resources in a manner that is consistent with the goals and policies of the general plan, and the requirements of CEQA.
B. Each applicant interested in operating pursuant to this chapter shall submit an application for environmental clearance with the city manager together with a nonrefundable processing fee in an amount established by the city council at the time of application for a commercial cannabis business permit. The city manager will prepare documents as required for environmental clearances for all cannabis business permits.
C. The full text of the state CEQA guidelines as amended is hereby incorporated by reference into this chapter as if fully set out herein and shall supersede any inconsistent provisions of these city environmental review procedures. These environmental review procedures supplement the state CEQA guidelines adopted as 14 California Code of Regulations, Title 14, Section 15000, et seq. In the event there is a conflict between the Public Resources Code and the CEQA guidelines, the Public Resources Code shall govern.
D. The list of defined terms in Chapter 17.02 (definitions), under title 17 of the City of Shasta Lake Municipal Code is expanded by reference to include the definitions contained in the Public Resources Code and the state CEQA guidelines.
E. The city manager shall determine whether an application for environmental clearance is complete within thirty (30) calendar days from the receipt of the application. If no written determination of the completeness of the application is made within that period, the application shall be deemed complete on the thirty-first (31st ) day.
1. When reviewing the application for completeness, the city manager shall identify environmental issues that require additional information or explanation by the applicant. An application for a commercial 47
cannabis business permit shall not be accepted as complete until all the information necessary for environmental review as determined by the city manager has been submitted.
2. Accepting an application as complete does not limit the authority of the city to require the applicant to submit additional information needed for environmental evaluation.
3. Notice of Exemption. When the city manager determines that a project is categorically or statutorily exempt from CEQA and the city decides to approve the commercial cannabis permit, the city may file a notice of exemption. The notice of exemption may be prepared in accordance with Section 15062 of the CEQA guidelines.
4. Filing of Notice of Exemption. The city may file the notice of exemption with the County Clerk of Shasta County. Copies of the notice may also be available for public inspection at the city. Filing and posting the notice of exemption commences a thirty-five-day statute of limitations from the date of project approval.
F. A commercial cannabis business permit shall not be issued until such time that environmental clearance where required by this chapter and the provisions of CEQA has been completed.
1. Exception: Where the issuance of a commercial cannabis business permit also involves the issuance of a discretionary land use entitlement as set forth in Chapter 17.10, the environmental clearance may be completed in combination with the land use entitlement.
5.05.110 Non-Retail commercial cannabis business permit application selection process.
A. The city manager will evaluate the applications received and make a determination on the eligibility of each application. Each application that is complete and in compliance with this chapter shall be placed on the "qualified commercial cannabis business application list" and shall be notified in writing that they are a "qualified commercial cannabis business applicant."
B. The city manager, after receiving the application and aforementioned information, will grant the permit Approval Letter if they find:
1. The required fee has been paid.
2. The application conforms in all respects to the provisions of this chapter.
3. The applicant has not knowingly made a material misrepresentation in the application.
4. The applicant has fully cooperated in the investigation and background checks required by this section.
5. The applicant has not had a commercial cannabis business license or other similar license or permit denied or revoked for cause by this city or any other city in the state within the last five years prior to the date of the application.
6. The commercial cannabis business, as proposed by the applicant would comply with all applicable laws including, but not limited to, health, zoning, fire and safety requirements.
7. The applicant has demonstrated compliance with this code and state regulations.
C. After all tenant improvements have been finalized by the commercial cannabis business owner, the city manager can request an inspection of the cannabis business location to confirm compliance with this section.
D. If any of the items listed in the application process are not met, the city manager shall notify the applicant of the deficiency, after which the applicant will have ten days from receipt of notice to correct the deficiency. If the deficiency is not corrected within ten days, the city manager may deny the permit and notify the applicant of this determination in writing after which the applicant can appeal the decision in accordance with Section 5.05.130 (appeal of denial of permit reference).
E. Any application that has failed to comply with local or state application compliance may be deemed abandoned after 90 days.
48
F. The Business License and Permit to Operate will be issued once the State has approved the license and all fees have been paid.
5.05.120 Retail commercial cannabis business permit application selection process.
A. The Qualified Lottery process is intended to ensure fairness and transparency in the issuance of retail commercial cannabis business permits by requiring applicants to first demonstrate basic qualifications through a merit-based review, followed by a randomized lottery among those applicants who meet the established standards.
B. By resolution, the City Council shall adopt Procedural Guidelines and Review Criteria for the City’s evaluation of applications for retail commercial cannabis business permits. The Procedural Guidelines and Review Criteria shall be published on the City's website and available upon request at City Hall.
B. The Procedure Guidelines shall provide the process for soliciting applications including time frames, limitations, requirements, forms, and rules for completing applications.
C. The Review Criteria shall include the methodology to be used to evaluate applications on a point system, or other system, based on the Review Criteria.
D. The City Managershall be authorized to prepare forms and adopt rules to implement the Procedure Guidelines and Review Criteria.
E. Merit-based review.
1. All applications shall first be reviewed to determine compliance with minimum qualifications and standards adopted by City Council resolution.
2. Only those applications that meet or exceed the minimum threshold established by resolution shall be eligible to participate in the lottery.
3. Applications failing to meet the minimum threshold shall be deemed ineligible and disqualified from the application process.
F. Qualified lottery.
1. The City shall conduct a lottery among all eligible applicants who satisfy the minimum qualifications.
2. The procedures for conducting the lottery, including methods to ensure impartiality and transparency, shall be adopted by City Council resolution.
3. The lottery shall be conducted in a public forum, and the results shall be recorded and made available to the public.
G. Permit Award.
1. Applicants selected through the lottery shall be offered conditional retail commercial cannabis business permits, subject to compliance with all other applicable requirements of this Code.
2. In the event a selected applicant is disqualified or withdraws, the City may offer the permit to another applicant in accordance with procedures adopted by resolution.
5.05.130 Cannabis permit annual renewal.
A. Applications for the renewal of a permit shall be submitted at least thirty (30) calendar days before the expiration of the current permit. 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. 49
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. 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 section. 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 city manager in order to determine whether said permit should be renewed.
5.05.140 Denial of permit.
A. The city manager, in consultation with law enforcement, building official and city fire protection district, will review all commercial cannabis business applications, and all other relevant information, and determine if a permit should be granted. If the city manager determines that the permit shall not be granted, the reasons for denial shall be provided in writing to the applicant. The applicant shall have fourteen (14) calendar days from the date of the receipt of the written denial to correct the reasons for denial and request in writing reconsideration of permit issuance. Following review of the amended permit application, the city manager will approve or deny the permit by providing written notice to the applicant.
B. An applicant who disagrees with the decision may appeal such decision pursuant to the appeals process of this section.
5.05.150 Operational standards for all commercial cannabis business activities.
A. Interior and exterior locations of the business property shall be monitored at all times by digital video surveillance system with a minimum camera resolution of one thousand two hundred eighty (1280) by seven hundred twenty (720) pixels and at a minimum of fifteen (15) frames per second for security purposes. The video surveillance system shall at all times be able to effectively and clearly record images of the area under surveillance. Each camera shall be permanently mounted and in a fixed location. The video surveillance system shall record areas where cannabis goods are weighed, packed, stored, loaded, and unloaded for transportation, prepared, or moved within the permitted premise including: all limited-access areas, security rooms, point-of-sale areas, and all points of entry and exit on the premise. The video surveillance system shall clearly record activity occurring within twenty (20) feet of all points of entry and exit on the premise.
B. Surveillance recordings shall clearly and accurately display the time and date and shall be maintained, unaltered, in secured location, stored digitally, for a period of not less than ninety (90) days. The city or law enforcement may request the recordings in connection with an investigation. If the recordings are not voluntarily provided, the city or law enforcement may seek a warrant or court order for the recordings.
C. A commercial cannabis business entity that remains inoperative for more than ninety (90) days shall be deemed "abandoned" and the permit shall be forfeited. A business may temporarily suspend 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 development services director or his or her designee.
D. Create and maintain an active account within the state's track and trace system prior to commencing any commercial cannabis 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.
E. Register with the department of pesticide regulation if using any pesticides.
F. Comply with all state regulations regarding testing, labeling and storage of all cannabis products.
G. Meet all state and local regulations for the disposal of all cannabis materials and materials used in conjunction with manufacturing, testing, processing, distributing and cultivating of cannabis.
H. Conform to all state regulations requiring the use of appropriate weighing devices.
I. Conform to all state and local regulations regarding water usage. 50
J. All electrical and plumbing must comply with state and local regulations including the California Building Code and California Fire Code, as adopted by the City of Shasta Lake.
K. Comply with all state insurance and security bond regulations.
L. The commercial cannabis business shall have a centrally monitored fire and burglar alarm system which shall include all perimeter entry points and perimeter windows.
M. All persons with ownership interest, and all employees, agents, officers and other persons acting on behalf of a licensee must be at least twenty-one (21) years of age.
N. Comply with all state, county, and local tax regulations.
5.05.160 Additional operational standards for retail business.
A. A permitted cannabis retail business shall comply with all state regulations. During the hours of operation, the cannabis retail business shall hire or contract for security personnel who are at least twenty-one (21) years of age and licensed by the Bureau of Security and Investigative Services and shall comply with Chapters
11.4 and 11.5 of Division 3 of the Business and Professions Code.
B. The security personnel and cannabis retail business personnel shall monitor the site and the immediate vicinity of the site to assure 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. Signage.
1. All exterior signage shall conform with existing zoning requirements. The existing retail business signage is 'grandfathered' in as of April 1, 2017. Any additional signage modifications shall comply with retail business.
2. The following information shall be provided on a sign posted in a conspicuous location inside the cannabis dispensary:
a. Smoking, ingesting or consuming cannabis on this property or within one hundred (100) feet of the business is prohibited.
b. No one under the age of twenty-one (21) shall be allowed to enter this facility unless they are a qualified patient or a primary caregiver and they are in the presence of their parent or legal guardian.
c. The City of Shasta Lake has not tested or inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location.
D. No recommendations from a doctor for medical cannabis shall be issued on-site.
E. Each retail business owner shall establish minimum training standards for all employees.
F. There shall be no on-site sales of alcohol or tobacco products, and no on-site consumption of food, alcohol, tobacco or cannabis by patrons without prior written approval from the city.
G. Drive-through sales must be approved in writing by the city prior to implementing.
H. The retail business shall comply with state department of health requirements pertaining to use of commercial kitchen facilities for the cannabis operations.
I. All employees of the retail business shall wear a laminated or plastic-coated photo identification badges clearly identifying them as employees when on duty. Badges shall include a color frontal face picture, 51
employee name, employee number, business name and number, and be at least one and one-half inches in width by one and one-half inches in height.
J. No cannabis retail facility shall cause or permit the access, sale, or exchange of cannabis goods to any person who is not at least twenty-one (21) years of age or at least eighteen (18) years of age with a valid physician's recommendation for medical cannabis.
5.05.170 Deliveries.
A. All deliveries shall comply with all state regulations contained in California Code of Regulations Title 16, Division 42 and as it may be amended from time to time.
B. Deliveries may be made from a licensed retail business.
C. All employees who deliver cannabis must have a valid identification card at all times while the delivery is being made.
D. Deliveries may only take place during normal business hours of the retail business.
E. A customer requesting delivery 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.
F. A 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.
G. A cannabis business shall only deliver cannabis in aggregate amounts tied to its members' needs. A cannabis business shall ensure compliance with state law limits as they regard cannabis and cannabis products.
H. A manifest with all information required in this section must accompany any delivery person or delivery method at all times during the delivery process and delivery hours.
5.05.180 Additional operational standards for retail nurseries.
A. A retail nursery shall be restricted to the sale of only cannabis clones, immature plants, and seeds. The sale of all other cannabis goods is prohibited.
B. A retail nursery shall be required to comply with the additional operating standards established for retail businesses in Section 5.05.140.
C. A retail nursery shall be required to obtain a state-issued license.
5.05.190 Maintenance of records.
A. A commercial cannabis business shall maintain all the records required for retention by California Code of Regulations Title 3, Division 8; Title 16, Division 42 Title 4, Division 19 – New location; and Title 17, Division 1.
B. These records shall be maintained for a period of seven years and shall be kept in a manner that allows the records to be produced for the City of Shasta Lake and/or law enforcement at the cannabis business premises in either hard copy or electronic form, whichever the City of Shasta Lake requires.
C. A commercial cannabis business shall maintain all the records required for retention by California Business and Professions Code Section 26160.
D. A commercial cannabis business shall maintain all the records required for retention by Revenue and Taxation Code Section 34019.
52
5.05.200 Inspection and enforcement responsibilities.
City code enforcement officials may enter and inspect the location of any commercial cannabis business between the normal business hours to ensure compliance with this section. In addition, law enforcement may enter and inspect the location of any cannabis business and the recordings and records maintained as required by this section, except that the inspection and copying of private medical records shall be made available to law enforcement only pursuant to a properly executed search warrant, subpoena, or court order. A person engaging in commercial cannabis business without a permit and associated unique identifiers required by this chapter shall be subject to civil penalties of up to twice the amount of the permit fee for each violation, and the department, state or local authority, or court may order the destruction of cannabis associated with that violation. A violator shall be responsible for the cost of the destruction of cannabis associated with his or her violation, in addition to any amount covered by a bond required as a condition of licensure. Each day of operation shall constitute a separate violation of this section.
5.05.210 Fees.
All cannabis operations shall pay applicable fees and taxes, which may include one or more of the following.
A. Application Fee. The business applicant shall submit a nonrefundable fee to cover the cost of processing an application and renewal application for the commercial cannabis business.
B. Business License Fee. The business owner shall at all times maintain a current and valid business certificate and pay all business taxes required by this code.
C. Regulatory License Fee. The business owner shall pay an annual regulatory license fee ("regulatory fee") to cover the costs of anticipated enforcement relating to the cannabis operation. The amount of the fee shall be set by resolution of the city council and be supported by the estimated additional costs of enforcement and monitoring associated with the cannabis operation. The regulatory fee shall be due and payable prior to opening for business and thereafter on or before the anniversary date. The regulatory fee may be amended from time to time based upon actual costs.
D. Taxes. The business applicant shall stay current with all state, federal, and local taxes, including commercial cannabis business tax set forth by Chapter 3.17.
5.05.220 Violation and enforcement.
Each and every violation of this section 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 business's commercial cannabis business permit, 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 cannabis business and persons related or associated with the cannabis business.
5.05.230 Permit suspension, modification or revocation.
Commercial cannabis business permits may be revoked, suspended, modified for any violation of any law, rule, regulation, or permit conditions or standard adopted pursuant to this Title 5.05. If the city manager determines that there is cause to consider revocation, suspension or modification of any commercial cannabis business permit, the city manager will:
1. Notify the permittee of the possible action and the reasons for it; 53
2. Provide permittee with evidence the city manager possesses that may justify the revocation, suspension or modification;
3. Advise the permittee that permittee may request a hearing before the city manager to present evidence, argument or other matters permittee feels the city manager should consider before taking any action.
5.05.240 Hearing.
If a permittee wishes to have a hearing before the city manager, the permittee must, within five days of the city manager's notice, send to the city manager a written request for a hearing. The city manager will provide notice to permittee of the time and place of hearing. The city manager will consider evidence, argument, and evidence offered by permittee and render a written decision.
5.05.250 Appeal process.
A. Within ten calendar days after the date of a decision of the city manager to revoke, suspend or deny a permit, or to add conditions to a permit, an aggrieved party may appeal such action by filing a written appeal with the city clerk setting forth the reasons why the decision was not proper.
B. At the time of filing the appellant shall pay the designated appeal fee, established by resolution of the city council from time to time.
C. Upon receipt of the written appeal, the city clerk shall set the matter for a hearing before the city council.
The city council shall hear the matter de novo, and shall conduct the hearing pursuant to the procedures set forth by the city.
D. The appeal shall be held within a reasonable time after the filing the appeal.
E. At the hearing the appellant may present any information they deem relevant to the decision appealed. The formal rules of evidence and procedure applicable in a court of law shall not apply to the hearing.
F. At the conclusion of the hearing the city council may affirm, reverse or modify the decision appealed. The decision of the city council shall be final.
54 RESOLUTION CC 2026-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE
ADOPTING THE PROCEDURAL GUIDELINES AND REVIEW CRITERIA FOR THE
RETAIL COMMERCIAL CANNABIS BUSINESS PERMIT APPLICATION SELECTION PROCESS PURSUANT TO SECTION 5.05.120 OF THE SHASTA LAKE MUNICIPAL CODE
WHEREAS, Section 5.05.120 of the City of Shasta Lake Municipal Code establishes the Retail Commercial Cannabis Business Permit Application Selection Process; and WHEREAS, this section requires that the City Council, by resolution, adopt Procedural Guidelines and Review Criteria to ensure fairness, impartiality, and transparency in the City’s evaluation and selection of retail commercial cannabis business applications; and WHEREAS, the Procedural Guidelines establish the process for soliciting applications, including timelines, limitations, requirements, forms, and rules for completing and submitting applications; and
WHEREAS, the Review Criteria provide the methodology for evaluating applications based on a point system, or other system, as determined appropriate by the City Council, to assess compliance with minimum qualifications and standards; and WHEREAS, the City Council finds that adoption of these Guidelines and Criteria promotes an equitable merit-based review followed by a randomized qualified lottery among eligible applicants who meet or exceed the established minimum standards; and WHEREAS, the City Council further authorizes the City Manager to prepare forms, adopt administrative rules, and implement procedures necessary to carry out the adopted Guidelines and Criteria consistent with Section 5.05.120 of the Municipal Code; and WHEREAS, the City Council desires to ensure that the City’s retail commercial cannabis permitting process is transparent, competitive, and consistent with state and local law.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Shasta Lake hereby adopts the Retail Commercial Cannabis Business Permit Procedural Guidelines and Review Criteria (attached hereto as Exhibit B), governing the City’s evaluation and selection process for retail cannabis permit applications, including the Qualified Lottery process.
BE IT FURTHER RESOLVED that:
1. Procedural Guidelines — shall define the City’s process for soliciting, accepting, and reviewing applications, including timeframes, forms, requirements, and submission procedures.
55 2. Review Criteria — shall establish the evaluation methodology for determining applicant eligibility, utilizing a point-based or equivalent merit system approved by the City Council.
3. Qualified Lottery — shall be conducted among eligible applicants who satisfy the minimum threshold of qualifications, following impartial and transparent procedures adopted by this resolution.
4. City Manager Authority — the City Manager, or designee, is authorized to prepare and distribute necessary forms, adopt administrative procedures, and take such actions as may be required to implement the adopted Guidelines and Criteria.
Publication — the adopted Procedural Guidelines and Review Criteria shall be published on the City’s website and made available at City Hall.
PASSED, APPROVED, AND ADOPTED this 6th day of January, 2026, by the following vote:
AYES:
NOES:
ABSENT:
_______________________________
JUSTIN JONES, Mayor
____________________________
CHARITY TATLOW, CMC
City Clerk
56 Qualified Lottery - Process Overview
This hybrid process, the Qualified Lottery, has two phases: merit‑based pre‑qualification and public lottery. Applicants must complete both phases to obtain a retail license.
Phase 1: Merit‑Based Pre‑Qualification
The goal of Phase 1 is to ensure that applicants are qualified, ready and aligned with community priorities before entering the lottery. Two pre‑qualification models are proposed: threshold scoring and pass/fail qualification.
1. Threshold Scoring Model
• Scoring rubric: Develop a rubric with weighted categories (e.g., compliance, security, community benefits, experience, financial viability, environmental sustainability). Each category receives a score; applicants must achieve a minimum aggregate (e.g., ≥ 80 points on a 100‑point scale) to advance to the lottery. • Objective criteria: Publish the rubric and evaluation guidelines to reduce perceived arbitrariness. Use independent reviewers or a third‑party consultant to grade applications, reducing conflicts of interest.
• Transparency & appeals: Allow applicants to view their scores and a breakdown of points. Provide an appeal process for scoring errors but limit it to factual corrections to avoid delays.
• Use cases: A threshold model is suited to jurisdictions that want to prioritize qualified operators ensuring that only high‑quality proposals proceed.
2. Pass/Fail Qualification Model
• Minimum requirements: Instead of a numeric score, applicants must meet each criterion on a checklist (e.g., complete application, compliance with zoning, security plan meets regulatory standards, proof of capital, community engagement plan). Applicants that fail any criterion are disqualified.
• Strict standards: Because it is binary, the pass/fail process often requires applicants to meet all requirements perfectly.
• Efficiency: Pass/fail reviews may be quicker and less susceptible to subjective scoring, but the city must clearly define each requirement.
Suggested Evaluation Criteria
Regardless of the pre‑qualification model, the city should evaluate applicants on core areas:
Criterion Rationale
Regulatory
compliance
Demonstrated understanding of local and state cannabis laws, including zoning, buffer zones and operational restrictions.
Community
impact
Plans to minimise negative impacts (traffic, nuisance, youth exposure) and invest in the community. Preference can be given to applicants hiring locally or local ownership.
Security and
safety
Comprehensive security plan covering surveillance, access control, product tracking and emergency response.
57 Financial
viability
Proof of capitalisation, business plan, and contingencies to ensure the business can operate sustainably.
Site control Evidence of site ownership or lease, zoning compliance and local support.
Operational
readiness
Experience of principals, management team qualifications and timeline to open.
Phase 2: Public Lottery
After pre‑qualification, the city will conduct a lottery among qualified applicants to allocate the limited number of licenses. Key elements include:
1. Determine license slots: The city council should determine how many retail licenses will be issued.
2. Public and transparent drawing: Use an independent auditor or third‑party to oversee the drawing. Conduct lottery at City Council Meeting or stream the lottery live and invite applicants and members of the public. Record the procedure and publish results.
3. Randomisation method: Use secure randomisation software or physical drawing equipment (e.g., numbered balls) with auditing. Document the method to defend against claims of tampering.
4. Successive draws: If an applicant declines or fails to meet post‑selection requirements, the next applicant on the lottery list can be offered the license.
5. Post‑lottery verification: Winners must complete remaining steps such as background checks, final inspections, paying licensing fees, and obtaining final approvals. If a winner fails to complete these within a specified timeframe, the license may be offered to the next lottery entrant.
Threshold vs. Pass/Fail Considerations
Aspect Threshold Scoring Pass/Fail Qualification
Evaluation Effort Higher; reviewers score each
category and compute totals.
Lower; reviewers verify criteria are met.
Flexibility Allows weighting of criteria to
prioritise community benefits
or social equity.
Binary; all criteria must be met, limiting
flexibility.
Risk of Litigation Greater potential for disputes
over scores and weighting;
states have been sued over
inconsistent scoring
Lower risk because decisions are binary
and objective, but disputes can occur
over whether a criterion was met or
over technical issues (e.g., document
upload)
Inclusivity May favour well‑resourced
applicants who can produce
high‑quality proposals
Sets a baseline that smaller or social
equity applicants may meet more easily,
but failing to meet any requirement
disqualifies them
Transparency Requires publicly available
rubric and training for
reviewers to reduce
subjectivity.
Requires clearly defined and published
criteria and checklists.
58 Administrative
Complexity
More complex; needs
experienced reviewers and
quality control.
Simpler; review is checklist‑based but
must manage cures and resubmissions.
Key Advantages of the Hybrid Approach
• Fairness and transparency: The initial screening ensures that all lottery participants meet objective qualifications and reduces the risk of unprepared operators. A public lottery then eliminates bias and political influence, addressing concerns raised in lawsuits against merit‑based systems.
• Efficiency and timeliness: Screening applicants for ability and readiness avoids awarding licenses to ill‑prepared businesses, which can delay market development. A lottery reduces the administrative burden of ranking every application and helps ensure timely issuance of licenses.
• Flexibility: Threshold or pass/fail criteria can be adjusted to reflect local priorities (e.g., community benefits, social equity) without over‑burdening reviewers. The lottery can be held only when demand exceeds supply
Implementation:
1. Amend Chapter 5.05: Add a Retail Application Process Section a. Add a dedicated section to Chapter 5.05 that generally describes the application process for retail cannabis licenses.
b. Authorize the City Council to adopt detailed procedures by resolution, allowing the City to adjust timelines, documentation requirements and evaluation methods without amending the municipal code itself.
2. Establish Procedures and Review Criteria by Resolution a. Direct the City Council to pass a resolution setting out procedural guidelines and the criteria that will be used to review and score applications. b. Permit the Council or Staff to modify these guidelines in the future via resolution or administratively.
3. Publish Application Opportunities Transparently
a. Whenever a retail license becomes available, or if the Council increases the maximum number of permitted retailers, publicly announce the opening of the application period. Notices should explain the application procedures and evaluation criteria, and be posted on the City’s website and through other appropriate channels.
b. Ensure that the public announcement provides sufficient time for prospective applicants to prepare and submit complete applications. 59 NOTICE OF PUBLIC HEARING BY THE
CITY COUNCIL OF THE CITY OF SHASTA LAKE
______________________________________________________________________ NOTICE IS HEREBY GIVEN that the City Council of the City of Shasta Lake, State of California, will conduct a public hearing and consider approving the first reading of the ordinance described below on Tuesday, January 6, 2026, with the session commencing at 6:00 P.M. or as soon thereafter as possible, at the Shasta Lake City Council Chambers, 4488 Red Bluff Street, Shasta Lake, California.
Following the public hearing, the City Council will consider the following:
Municipal Code Amendment Z 25-01, amending City of Shasta Lake Municipal Code Title 17 - Zoning – Chapter 17.10.020 – Cannabis Business Land Use Table The City of Shasta Lake City Council will receive public input and discuss whether updates to Municipal Code Amendment Z 25-01, amending City of Shasta Lake Municipal Code Title 17 - Zoning – Chapter 17.10.020 – Cannabis Business Land Use Table should be added to the City of Shasta Lake Municipal Code.
Environmental Determination: None
A complete copy of the text of the Ordinance and all associated documents are on file and available for review Monday-Friday, 7:00 AM – 4:00 PM (closed from Noon-1:00 PM) in the office of the City Clerk, 4477 Main Street, Shasta Lake, California 96019; 530.275.7400.
ALL HEARINGS ARE OFFICIALLY SET FOR 6:00 P.M. and will be conducted as soon thereafter as the business of the Council will allow. The official agenda and staff report for the City Council meeting, along with instructions on how the public can participate online, will be available three days prior to the meeting on the City Council Chamber exterior bulletin board at 4488 Red Bluff Street, Shasta Lake, California and on the City’s website cityofshastalake.gov. Copies of the documents associated with the ordinance are on file and available for review Monday-Friday, 7:00 AM – 4:00 PM (closed from Noon-1:00 PM) or by appointment at Shasta Lake City Hall, 4477 Main Street, Shasta Lake, CA.
60 Report and Recommendations 7.4 Reviewed and Approved
City Manager
AGENDA ITEM
City Council
____________________________________________________________ TO: Mayor and City Council Members
FROM: Peter Bird, Senior Planner
DATE: January 6, 2026
SUBJECT: PUBLIC HEARING AND CONSIDERATION FOR APPROVAL OF
AMENDMENTS TO THE CITY OF SHASTA LAKE MUNICIPAL
CODE TITLE 17 - ZONING
FILE NO.:
RECOMMENDATION
Staff recommends that the City Council consider the information provided in the staff report and open the meeting to accept public comments on the ordinance. If determined appropriate, the Council should adopt the proposed revisions to Title 17-Zoning of the City of Shasta Lake Municipal Code (SLMC).
BACKGROUND
The following municipal code amendment represents an effort to clarify and align Chapter
17.10 – Cannabis Business Land Use with the findings of the Commercial Cannabis Ad Hoc Committee.
PROPOSED CHANGES
The existing ordinance will be replaced with the attached draft, which is reformatted and reflects the zoning districts that will be adopted with the development code update. The current ordinance is included in Attachment B for reference.
Substantive changes include:
1. Existing Footnote 1 - Three total retail businesses are permitted; each must be located on Shasta Dam Boulevard or in a previously established location housing 61 an existing retailer in operation at the time the ordinance from which this section is derived was adopted.
Proposed Footnote 1 - A total of three cannabis retailers are permitted within the City of Shasta Lake.
FISCAL IMPACT
None
ATTACHMENTS
Ordinance CC-2026-XX
Attachment B – Existing Ordinance
Public Hearing Notice
DISTRIBUTION
City Council
City Manager
62 ORDINANCE CC 2026-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE APPROVING A MUNICIPAL CODE AMENDMENT TO CHAPTER 17.10 – CANNABIS
BUSINESS LAND USE
WHEREAS, the General Plan of the City of Shasta Lake has been adopted to guide development in compliance with State Law; and
WHEREAS the Government Code allows the City to adopt ordinances and standards to reasonably regulate the development of property and to protect public safety and the environment consistent with the direction provided by the General Plan; and, WHEREAS, the City of Shasta Lake proposes to amend the Municipal Code Chapter
17.10 – Cannabis Business Land Use to align with the Commercial Cannabis Ad Hoc Committee findings; and,
WHEREAS, the City of Shasta Lake is in the process of completing the comprehensive development code update; and,
WHEREAS, the existing Shasta Lake Municipal Code Chapter 17.10 will stay in effect until May 30, 2026, and will thereafter be replaced by this ordinance.
WHEREAS, the Planning Commission conducted a public hearing on December 4, 2025, and considered all public testimony provided regarding the proposed ordinance, as well as all written materials and other information in the record, finding the changes exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption), and made a recommendation to the City Council for approval of the amendments;
NOW, THEREFORE, THE CITY COUNCIL OF SHASTA LAKE DOES ORDAIN AS FOLLOWS:
SECTION 1: Findings, Determinations, and Direction:
1. The proposed amendments would further the public necessity, convenience, and general welfare. The amendment would provide citizens with opportunities to participate in the planning and decision-making processes of the City relative to the development of property. The proposed ordinance would also preserve and enhance the quality of life of residents by supporting orderly and safe development of a variety of living environments and accommodating growth.
2. The proposed revisions comply with the applicable Government Code requirements of the State of California as implemented by the General Plan and Municipal Code of the City.
63 3. The proposed amendments are consistent with the City’s General Plan by supporting the adopted goals, objectives, policies, and implementation measures, including but not limited to the following:
a. POLICY-LU-1.3 - Evaluate zoning proposals to prevent the overconcentration of land uses in any area of the City where land use intensities, commercial or industrial operations, or increased traffic would adversely impact the safety, health, and quality of life of residents. b. POLICY-LU-1.8 As the community grows and faces development pressure along Interstate 5 and on its fringes, the City must be both deliberate and resolute in its commitment to preserve the character and economic vitality of downtown. The City shall encourage economic growth and continued improvement in the downtown area on already-developed areas and on underutilized parcels.
c. IMPLEMENTATION-LU-1.3 Regularly monitor all parts of the Municipal Code to identify requirements or standards that limit flexibility and creativity in the reuse of developed properties and existing structures. The City should make appropriate changes consistent with the goals and policies of the General Plan when needed.
4. The proposed project will not result in a significant adverse impact on the environment as it will implement the Land Use Element of the General Plan, consistent with the Final Environmental Impact Report prepared for adoption of the General Plan. The proposed amendments address minor modifications to existing permitted uses, and will not create new impacts of the environment. Therefore, the proposed amendments are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the State Guidelines to implement CEQA.
SECTION 2: Severability: If any provision of this ordinance or the applications thereof to any person, property, or circumstances is held invalid, the remainder of the ordinance and the applications of such provision will remain in effect to the extent permitted by law.
SECTION 3: Municipal Code Amendment:
Ordinance Amendments – Replace Chapter 17.10 in its entirety.
I. Proposed Ordinance (including new anticipated chapter reference):
Title 17 – Zoning
Division IV – Regulations Applying in All Districts
Chapter 17.49 – Cannabis Business Land Use
64 17.49.010 Purpose.
The purpose of this chapter is to establish clear standards for the location and operation of commercial cannabis uses within the City of Shasta Lake. Commercial cannabis activities are permitted only in the zoning districts expressly identified in Section
17.49.040; any district not listed in that section does not allow such uses.
This chapter is further intended to ensure that all cannabis businesses operate in a manner that safeguards public health, safety, and the general welfare of residents and businesses, and that such activities remain compatible with surrounding land uses and community expectations.
17.49.020 Applicability.
This chapter applies to the permitting of cannabis land uses in the city. Routine ongoing operation and maintenance shall not require a permit.
17.49.030 Definitions.
The definitions for commercial cannabis activities listed within Section 05.05.030 - Definitions are hereby incorporated into this chapter by reference.
17.49.040 Land Use table(s).
The following land use tables – Tables 17.49. 040 - A and B - shall be used to determine whether a cannabis business is permitted (P) by zoning clearance, not permitted (NP), or permitted subject to an administrative permit (AP) or use permit (UP).
If a zoning district in title 17 is not listed in the land use table in this section, the use is expressly not permitted.
Table 17.49 - A. Cannabis Land Use Type and Permitting.
Use Type Land Use Class Permit Required
VM
U
GC/VC HC IL L SGIPPD/D
R
Cultivation Commercial—A, B,
C
NP NP UP P P P
Retailer Storefront/Delivery P 1 P 1 NP N
P
N
P
NP
65 Footnotes:
1 A total of three total retail cannabis businesses are permitted within the City of Shasta Lake. 2 Permitted use within buildings less than two thousand (2,000) square feet. 3 Retail sales required.
4 Retail sales allowed.
5 Permitted use for buildings less than two thousand (2,000) square feet—Subject to CUP for buildings over two thousand (2,000) square feet.
6 Retail sales not allowed.
Land use classifications:
Commercial A—Permitted cultivation area: Zero to five thousand (5,000) square feet.
Commercial B—Permitted cultivation area: Five thousand one (5,001) to ten thousand (10,000) square feet.
Commercial C—Permitted cultivation area: Ten thousand (10,000) to twenty-two thousand (22,000) square feet.
Use Type Land Use Class Permit Required
VM
U
GC/VC HC IL L SGIPPD/D
R
Distribution Warehouse/Distribut
or
NP P 2 P 2 /UP P P P
Manufactur
er
Manufacturing NP NP UP U
P
P P
Nursery Retail/Wholesale NP P 3 /UP 3,
5 P 4 /UP 4,
5 P
6 P
6 P 6
Testing Laboratory NP UP UP P P P
66 Table 17.49 - B. Applicable Land Use Table.
17.49.050 Permits.
All commercial cannabis business allowed as shown in section 17.49.040 are required to obtain a business license and commercial cannabis business permit as required by Title 5 - Business Licenses and Regulations, prior to the commencement of activity of any kind.
A. The director may require an applicant to apply for a use permit if, based on substantial evidence, the cannabis use could have a specific, adverse impact upon the public health and safety. The director’s decision to require a use permit may be appealed by the applicant to the planning commission pursuant to Chapter 17.11 – Common Procedures of this title.
B. If a use permit is required, the application for the permit may be denied if the planning commission makes written findings, based upon substantial evidence in the record, that the proposed use would have a specific, adverse impact upon the public health or safety, and there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact. Such findings shall include the basis for the rejection of potential feasible alternatives for preventing the specified, adverse impact.
17.49.120.060 Development Standards.
Commercial cannabis businesses shall comply with all applicable development standards outlined within this title and code.
SECTION 4: Effective Date: This ordinance shall take effect 30 days after the date of its second reading and posting pursuant to City Code.
ZONING DISTRICTS
VMU Village Mixed Use
GC, VC General Commercial
HC Heavy Commercial
LI Light Industrial
I Industrial
SGIP-PD Shasta Gateway Industrial
Park—Planned
Development
67 I HEREBY CERTIFY that the foregoing Ordinance was introduced and read at a regular meeting of the City Council of the City of Shasta Lake held on the 18th day of November 2025, and a second reading was conducted on the 2nd day of December 2025.
PASSED, APPROVED, AND ADOPTED this 6th day of January, 2026, by the following vote:
AYES:
NOES:
ABSENT:
_______________________________
JUSTIN JONES, Mayor
ATTEST:
____________________________
CHARITY TATLOW, CMC
City Clerk
68 Attachment B – Current Ordinance
Chapter 17.10 CANNABIS BUSINESS LAND USE
17.10.010 Purpose.
The purpose of this chapter is to define where cannabis business as a land use can be located within the identified zoning districts as called out in the land use table in section 17.10.020. For zoning districts not called out in the table it shall be presumed that the business is expressly not permitted or allowed within that zoning district. (Ord. No. 17-258, § 1, 5-2-2017; Ord. No. 20-283, § II(Att. A), 9-1-2020)
17.10.015 Intent.
The intent of this section shall be to insure that cannabis businesses are operated in such a manner as to insure the public health and safety of the residents and businesses of the City of Shasta Lake.
(Ord. No. 17-258, § 1, 5-2-2017; Ord. No. 20-283, § II(Att. A), 9-1-2020)
17.10.020 Land use table.
The land use table shall be used to determine whether a cannabis business is permitted (P), not permitted (NP), or permitted with a conditional use permit (CUP). If a zoning district in title 17 is not listed in the land use table in this section, the use is expressly not permitted.
Use Type Land Use Class Permit Required
R VC C-2 CM ML M SGIPPD/DR
Cultivation Commercial—A, B, C NP NP NP CUP P P P
Retailer Storefront/Delivery NP P1 P1 NP NP NP NP
Distribution Warehouse/Distributor NP NP P2 P2
/CUP
P P P
Manufacturer Manufacturing NP NP NP CUP CUP P P
Nursery Retail/Wholesale NP NP P3
/CUP3,5
P4
/CUP4,5
P6 P6 P6
Testing Laboratory NP NP CUP CUP P P P
Footnotes:
1 Three total retail businesses are permitted; each must be located on Shasta Dam Boulevard or in a previously established location housing an existing retailer in operation at the time the ordinance from which this section is derived was adopted. 2 Permitted use within buildings less than two thousand (2,000) square feet. 3 Retail sales required.
4 Retail sales allowed.
5 Permitted use for buildings less than two thousand (2,000) square feet—Subject to CUP for buildings over two thousand (2,000) square feet. 69 6 Retail sales not allowed.
Land use classifications:
Commercial A—Permitted cultivation area: Zero to five thousand (5,000) square feet.
Commercial B—Permitted cultivation area: Five thousand one (5,001) to ten thousand (10,000) square feet.
Commercial C—Permitted cultivation area: Ten thousand (10,000) to twenty-two thousand (22,000) square feet.
ZONING DISTRICTS
R Residential Zoning Districts
VC Village Commercial
C-2 Community Commercial
CM Commercial—Light Industrial
DR Design Review
ML Light Industrial
M Industrial
SGIP-PD Shasta Gateway Industrial Park—Planned Development (Ord. No. 17-258, § 1, 5-2-2017; Ord. No. 18-268, 4-3-2018; Ord. No. 20-283, § II(Att.
A), 9-1-2020; Ord. No. 21-288, (Exh. A), 4-6-2021)
17.10.030 Definitions.
The definitions listed within section 05.05.030, regulation of commercial cannabis activities—definitions, are hereby incorporated into this chapter. (Ord. No. 17-258, § 1, 5-2-2017; Ord. No. 18-268, 4-3-2018; Ord. No. 20-283, § II(Att.
A), 9-1-2020)
17.10.040 Development standards.
Commercial cannabis businesses shall comply with all applicable development standards outlined within this Code.
(Ord. No. 17-258, § 1, 5-2-2017; Ord. No. 20-283, § II(Att. A), 9-1-2020)
17.10.050 Permits.
All commercial cannabis business allowed as shown in section 17.10.020 are required to obtain a business license and commercial cannabis business permit as required by title 5, business licenses and regulations. (Ord. No. 17-258, § 1, 5-2-2017; Ord. No. 20-283, § II(Att. A), 9-1-2020) 70 NOTICE OF PUBLIC HEARING BY THE
CITY COUNCIL OF THE CITY OF SHASTA LAKE
______________________________________________________________________ NOTICE IS HEREBY GIVEN that the City Council of the City of Shasta Lake, State of California, will conduct a public hearing and consider approving the first reading of the ordinance described below on Tuesday, January 6, 2026, with the session commencing at 6:00 P.M. or as soon thereafter as possible, at the Shasta Lake City Council Chambers, 4488 Red Bluff Street, Shasta Lake, California.
Following the public hearing, the City Council will consider the following:
Municipal Code Amendment Z 25-01, amending City of Shasta Lake Municipal Code Title 17 - Zoning – Chapter 17.10.020 – Cannabis Business Land Use Table The City of Shasta Lake City Council will receive public input and discuss whether updates to Municipal Code Amendment Z 25-01, amending City of Shasta Lake Municipal Code Title 17 - Zoning – Chapter 17.10.020 – Cannabis Business Land Use Table should be added to the City of Shasta Lake Municipal Code.
Environmental Determination: None
A complete copy of the text of the Ordinance and all associated documents are on file and available for review Monday-Friday, 7:00 AM – 4:00 PM (closed from Noon-1:00 PM) in the office of the City Clerk, 4477 Main Street, Shasta Lake, California 96019; 530.275.7400.
ALL HEARINGS ARE OFFICIALLY SET FOR 6:00 P.M. and will be conducted as soon thereafter as the business of the Council will allow. The official agenda and staff report for the City Council meeting, along with instructions on how the public can participate online, will be available three days prior to the meeting on the City Council Chamber exterior bulletin board at 4488 Red Bluff Street, Shasta Lake, California and on the City’s website cityofshastalake.gov. Copies of the documents associated with the ordinance are on file and available for review Monday-Friday, 7:00 AM – 4:00 PM (closed from Noon-1:00 PM) or by appointment at Shasta Lake City Hall, 4477 Main Street, Shasta Lake, CA.
71 72
Report and Recommendations 8.1
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: James Takehara, Electric Utility Director
DATE: January 6, 2026
SUBJECT: Authorization of Purchase and Sale of Energy and the Environmental Attributes of Energy for Future Periods
FILE NO.:
RECOMMENDATION:
Staff recommends the City Council adopt a resolution authorizing the City Manager to purchase and sell wholesale electricity supply and environmental attributes of energy for Calendar Years 2028 and 2029.
BACKGROUND
Under Resolution CC-14-65, the City Council delegates authority to City staff to authorize purchase and sale agreements for certain wholesale power supply commodities on the City’s behalf, provided that necessary funds are budgeted by the City Council. Under this structure, the period of time staff would be authorized to act can be quite short, perhaps just 2 months prior to when power deliveries are needed. At issue is the normal timing of the City’s budgeting practices, which normally approves a 2-year budget period in mid- to early-Spring for a budget that would take effect June of that year the budget is approved.
This means staff would be attempting to purchase power 1-2 months prior to needing it and for the most challenging and costly times of year (i.e., the summer peak demand).
Following this schedule is essentially waiting until the last minute to buy power supply, which would expose electric ratepayers to significant market price risks. Through separate budgetary actions, the City Council could extend the period of time staff is authorized to act to help reduce such risks.
Staff recommends a general strategy of buying power supply 2-3 years in advance by authorizing funding for future periods outside the normal budgeting schedule. Doing so would allow staff to source power supply in the “forward market” where prices tend to be less volatile. Having a longer period of time to monitor and survey the market helps to 73 avoid short-term price bubbles, such as weather-driven events. Having standing authorization would enable staff to act more quickly if forward prices are viewed as advantageous.
Staff has recommended, the Electric Committee and City Council has concurred, that purchasing power supply products 2-3 years in advance is a simple way to help mitigate some of the volatility and associated risks shown by current market conditions. In recent years, City Council has adopted Resolutions that appropriate funds for the purchase of power supply products enabling staff to execute power supply purchase contracts 2-3 year in advanced of the delivery of the products. The attached Resolution would continue this practice by appropriate funds for CY 2028 and CY 2029 power supply purchases.
Staff preliminary survey of the wholesale markets is that prices have moderated slightly, but remain higher than pre-pandemic levels.
The Electric Committee met on December 2, 2025 to discuss general market conditions; major policy changes occurring in California, Oregon, and Washington that have material impact on wholesale power prices in the Western United States; and possible courses of action when building the City’s electric portfolio for future years. The Electric Committee supports staff pursuing power supply products for CY 2028 and CY 2029 at this time.
First, there have been significant reductions in wholesale supply driven by State government policies intended to reduce the reliance on coal, natural gas, and nuclear power plants in California, Oregon, Washington, and Idaho. While this culling have occurred over several years, the wholesale markets have had difficulty recovering. Most of these generating stations were not replaced in kind. Instead, they were replaced with resources that lack the same operating characteristics as their predecessors and typically do not have much ability to produce electricity when consumers are actually using electricity. Moreover, traditional powerplants are typically designed to operate more than 60% of the time, while the replacement technology favored under recent State policies only operates 20%, maybe 30% of the time. This type of supply loss and supply/demand mismatch and loss of “energy density” can place sustained upward pressure on pricing for several years until replacement energy takes its place, which leads us to a second issue.
Second, load is growing rapidly across the United States with the push for artificial intelligence computing. AI requires massive computing power, which come in the form of large buildings packed with industrial-level computer servers. These so called, “server farms” take massive amounts of resources to power and maintain safe operating temperatures. A small server farm is twice the size of the entire City of Shasta Lake electricity load. Today’s large server farms consume the same amount of electricity as a medium sized city. As new server farms are brought online in the Western US, their draw on existing power supply and powerline resources is extensive. Essentially, the market is seeing rapid expansion of demand without a commensurate expansion of supply. This puts upward pressure on market prices, if you can source a product at all.
Third, new replacement power plants, particularly the new renewable energy resources policy makers have been promoting, continue to been delayed due to a lack of access to the grid. When building a powerplant in a new location (as opposed to where the original plant was located), new powerlines must also be built to interconnect new generation to 74 the existing grid. These “gen-tie” lines require technical engineering studies to ensure their addition do not cause adverse impacts on other areas of the electric grid. However, the necessary studies have been delayed since the powerline owners, including California’s largest privately owned utilities, are being directed by public, legal, political, and internal forces to focus their attention and work efforts on wildfire prevention work on existing powerlines.
Fourth, supply chain issues continue to slow the expansion of the grid. the pandemic has proven to have lasting effects on supply chains and labor causing additional cost pressures. Additionally, changes in tariff policies have caused suppliers to change their business models, cause additional processing times for inspections at ports, and introduce new areas of risk that are subjects in contract negotiations.
Finally, and perhaps the largest recent impact to the power supply market, Washington State adopted a landmark law mimicked after California’s greenhouse gas reduction law, which gives a strong financial incentive for certain power supply resources in Washington to “stay home” rather than serve the broader Western United States.
Many of these supply impacts are expected to persist and have a sustained impact on market conditions. Therefore, staff is exploring power supply options for the portfolio’s needs in CY 2028 through CY 2029.
The City purchasing power supply for future periods will not resolve the energy supply problems that are projected to occur in California and neighboring regions, like those experienced in 2020 (i.e., general shortage in power supply across the Western US).
However, it would position the City to have sufficient power supply under contract to meet its projected needs, help protect electric rate payers from potentially elevated and volatile market prices, help to stabilize electric rates, and possibly position the City from experiencing “rolling blackouts.”
FISCAL IMPACT
The attached Resolution would appropriate $35 million for 2028 and 2029, each, for the purchase and sale of wholesale electricity supply and environmental attributes of energy.
For comparison, the same funding levels were requested and approved by the City Council for 2026 and 2027.
The impact to electric rates will depend on the actual cost of power supply contract deliveries in each year. No action will be needed to incorporate any change in rates as the electric rate structure includes an adjustment clause, the “Power Cost Adjustment” (“PCA”) to ensure electric rates appropriately recover costs. The costs for power supply contracts are included in the PCA for the period to which they apply, so no costs for transactions made under this authority would impact immediate cash balances nor current rates, as costs would be incurred approximately 1 month after delivery of products. Future budgets and rates would incorporate these costs for proper recovery via the PCA.
ATTACHMENTS
75 Resolution CC 2026-XX
DISTRIBUTION
City Council
76 RESOLUTION CC 2026-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE
APPROVING THE PURCHASE AND SALE OF ENERGY
AND THE ENVIRONMENTAL ATTRIBUTES OF ENERGY FOR 2028 AND 2029 WHEREAS, in 2014, the City Council adopted Resolution CC-14-65, which authorized the purchase and sale of energy and the environmental attributes of energy, and energy delivery; provided that funds for purchases are budgeted by the City Council; and WHEREAS, the City desires to enable staff to execute market purchases for future periods to reduce electric ratepayers’ exposure to potential substantial market volatility and inflation; and
WHEREAS, the City desires to enter into one or more power supply contracts for products to cover a portion of the City’s electric customer expected needs for calendar years 2028 and 2029.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Shasta Lake hereby authorizes the City Manager, or designee, to purchase and sell energy and environmental attributes, including transmission delivery, for calendar years 2028 and 2029; and further authorizes appropriations in an amount not to exceed $35 million for each calendar year, to be expended from account codes 520-330-5201, 520-330-5202, 520-330-5208, and 520-330-5305.
PASSED, APPROVED, AND ADOPTED this 6th day of January 2026, by the following vote:
AYES:
NOES:
ABSENT:
_______________________________
JUSTIN JONES, Mayor
ATTEST:
____________________________
CHARITY TATLOW, CMC
City Clerk
77