CITY OF VALLEJO
DRAFT TOBACCO
RETAIL LICENSING
ORDINANCE
9/24/2024 Council Meeting
– Discussion Regarding
Possible Amendments to
Draft Ordinance
Background
– On 4/25/23 the Vallejo City Council received a
presentation from community groups LGBTQ Minus
Tobacco and Bay Area Community Resources relating to
the establishment of a Tobacco Retail Licensing
Ordinance in the City.
– At the conclusion of the presentation, Council directed staff to return to Council with a comprehensive
ordinance for its consideration.
Background Continued
– Staff engaged in research regarding other Cities’ TRL ordinances, reviewed model ordinances and discussed
options for a Vallejo specific ordinance. Thereafter, Staff prepared a draft ordinance for Council’s consideration. – Staff held a noticed workshop in the Vallejo Room.
– Planning Commission considered the draft ordinances
at a noticed public hearing held on 6/3/24 and
recommended the zoning provisions to the Council.
– On 6/25/24, the City Council held a noticed public
hearing on the draft ordinance.
Background Continued
– At the Council hearing on 6/25/2024, Council took no
action on the draft ordinance but directed staff to
conduct additional public outreach to discuss concerns
expressed during the hearing.
– A noticed community meeting with the tobacco retailers and interpreters was held on 8/14/2024. Retailers
identified sections of the proposed ordinance with
which they were concerned.
– A zoom meeting was held with proponents of the
ordinance on 8/19/2024. The proponents identified
their view of the retailers’ concerns and expressed their comments.
Background Continued
– A noticed community meeting including interpreters
and table facilitators was thereafter held on 8/21/24.
Both retailers and supporters were present at this
meeting. Staff consolidated the comments and broke
the group into facilitated tables with both supporters
and retailers at each table. The goal of these sessions was to try to bring the supporters and retailers together in a solutions-oriented manner to discuss possible
suggestions for modifications to the ordinance.
– The purpose of the Council’s meeting tonight is to
discuss these possible modifications to the draft
ordinance and receive direction from Council regarding
same.
Concerns Discussed
1. TRANSFERABILITY
2. MINIMUM PACK SIZING AND PRICING
3. DENSITY (CAP ON TOBACCO LICENSES)
4. PENALTIES AND ENFORCEMENT
Major Provisions of Existing Draft TRL
Ordinance – Who and What is Regulated
Generally
• All persons engaged in retail sale of “tobacco products” in the City will need to have a Tobacco Retail License. This includes Existing Retailers and any new retailers.
• “Tobacco products” includes any product made or
derived from tobacco or nicotine regardless of means of delivery (includes, cigarettes, cigars, pipe tobacco,
chewing tobacco, snuff, electronic delivery devices, etc.).
Prohibited Locations
• Tobacco Products will not be permitted to be sold
at all at:
– Pharmacies
– Cannabis Retail Stores
– Non-Fixed locations (mobile retail)
Separation Requirements
• New Tobacco Retailers will not be able to locate within 1,000 feet of :
– “Youth Oriented Facilities” such as schools, libraries, playgrounds, youth centers, recreation facilities, parks, childcare facilities.
– Existing tobacco or cannabis retailers.
– These separation requirements do not apply to existing retailers that are legally operating (meaning had all
required permits such as a use permit at the time the
business was established).
Location Exemptions
• As currently proposed, existing retailers that were legally established prior to the ordinance are exempted from
proximity and density requirements and can receive a
retail license regardless of location or density limitations; however, a new owner would not be able to obtain a
license for a location that does not comply with the
ordinance or if the number of retailers exceeds the
density requirements.
Transferability of Licenses
• Separation Requirements, Location Requirements
and Density Requirements are all highly relevant
to the issue of “Transferability”.
• As currently proposed, tobacco retail licenses are
not transferable from person to person or from
location to location. A TRL business may be sold,
however the new operator would need to comply
with the Separation and Location requirements to
obtain a new TRL license in the name of the new
operator. If the business does not meet those
requirements, the new owner would not be
eligible for a TRL license and could not sell
tobacco related products.
Density Requirements
• Density Requirements currently set forth in the
ordinance provide that each current retailer may
obtain a TRL license, but no new TRL licenses may
be issued for new locations until such time as
there are fewer than 51 retailers per 126,090 (or 1
for every 2,500) inhabitants in the City.
• Permitting transfers slows the attrition of tobacco
businesses resulting in it taking longer to reach a
reduced number of tobacco sales locations. A
reduced number of tobacco sales locations is a
goal of the ordinance.
Package Sizes and Pricing
• Tobacco products must be sold in manufacturer’s
packaging and conform to federal labeling and child-
resistant packaging requirements
• Pricing must be conspicuously displayed
• Free or nominally priced tobacco products may not be
sold or distributed
• The minimum package size for little cigars is 10.
• Regular cigars may be single or package of 10.
Minimum pricing:
• $10 for a package of 20 cigarettes
• $10 for a package of 10 little cigars
• $10 for an individual cigar
• $10 for a package of 10 regular cigars
Enforcement
• Fines
• Civil Action
• Criminal Prosecution
• Forfeit of product
• Suspension/Revocation of license for violations
(within 5-year period):
– First Violation 30-day suspension
– Second Violation 90-day suspension
– Third Violation 1 year suspension
– Fourth Violation – revocation
Enforcement Continued
• Violations of the TRL ordinance by a licensed
tobacco retailer will be counted against the
current location and any subsequent location
of the retailer and license
ineligibility/suspension periods will continue to
apply unless:
– The location has been acquired by new
proprietor(s) in an arm’s length transaction,
as shown by clear and convincing evidence.
Other Provisions,
Continued
• License is annual with an annual license fee.
• Clear provisions for issuance or denial.
• May be revoked if improperly issued.
• Compliance monitoring authorized.
• Lack of compliance which is found to exist
through monitoring or through investigation
leads to enforcement actions.
Concerns Expressed - Transferability
• Retailers expressed concerns regarding the
transferability of the TRL Permits. This issue surrounds the requirement that a transferred business must
comply with the location and separation requirements.
• Density requirements of the TRL Ordinance is also
implicated in the issue of Transferability.
Transferability Options
• Allow a purchaser to remain exempt from the location, separation, and density requirements.
• Prohibit an exemption where retailer has 1 violation? 2 violations?
• Allow exemption from the requirements for a purchaser for a certain number of years.
• Allow all existing retailers to transfer their TRL permit, at least once.
Concerns Expressed- Minimum Pack
Sizing and Pricing
• Too easy for others to break apart the packaging and
resell or distribute individual units off-site, creating a black market.
• Some manufacturers mandate package sizes and prices,
resulting in fewer product choices in Vallejo and
benefitting large tobacco manufacturers.
• Low-income residents would be disproportionately
impacted.
• Buyers will go to another jurisdiction to make their
purchases.
• Persons trying to quit would have to purchase more
tobacco.
Packaging and Pricing Options
• Allow retailers to bundle certain smaller packages
together meet the minimum sizes.
• Change pack size numbers and prices.
• Eliminate minimum pack sizing and pricing altogether. • Studies show higher prices induce smokers to quit
smoking, so keep the ordinance as is.
Concerns Expressed - Density
• The density numbers are arbitrary.
• Most agreed density cap was beneficial.
• Exacerbates the transferability issue because if business does not meet the location or separation requirements,
business cannot relocate until the total number of
licenses falls below the density cap.
• The density cap would prohibit purchaser of an existing tobacco retail business from being able to obtain a TRL permit until the total number of licenses in Vallejo falls below the applicable threshold.
Density Options
• If transferability issue is resolved, density issue becomes moot.
• Modify the cap.
Concerns Expressed –Penalties and
Enforcement
• State law already regulates tobacco sales and is not
being enforced.
• City does not have capacity to enforce a new ordinance. • Retailers should not be punished for the actions of their employees.
• Fear of unfair enforcement.
• Make enforcement mandatory.
Penalty and Enforcement Options
• Prohibit transfer upon single violation
• Employees should not be able to be prosecuted or, if
criminal enforcement at all, should be limited to
infraction.
• License fee should be designed to cover enforcement
costs (staff and inspection program by contract).
• Modify suspension time
• Model enforcement on that of the Alcoholic Beverage
Control—
1. Fine
2. Suspension of the license
3. Revocation of the license
Other Ideas as a Result of Community
Discussions
• Create a hotline for retailers to report unlawful sales and follow up with enforcement.
• Require landlords to consent to the retail sale of
tobacco products on their property to reduce the total
number of tobacco retailers in the City.
QUESTIONS?
CITY OF VALLEJO, CA
CODE ENFORCEMENT DIVISION
USER FEE STUDY
September 24th, 2024
2 Agenda
1. Introduction
2. Background/Project History
3. Objectives
4. Study Methodology
5. Study Findings/Recommendations
3 INTRODUCTION
Fee Study Consultant: MGT
• Nationally recognized consulting firm
• Focus is on Government consulting
• 900+ Employees
• Mr. Ruben Rivas conducted the Code Enforcement study
• Mr. Rivas has 11 years of user fee/cost accounting
experience
• Mr. Rivas has worked with/for the City of Vallejo since 2015 • Mr. Rivas has conducted the following studies for the City of Vallejo since 2015:
• Police Department operations/fee comparison - 2015
• Citywide User Fee Study – 2016/2017
• Public Works Department fee study – 2022
• Code Enforcement fee study – 2024
• Tobacco Retail License fee implementation – 2024
4 BACKGROUND/PROJECT
HISTORY
• The City of Vallejo and MGT have a standing relationship.
MGT has conducted several fee studies for the City in the last decade.
• The last comprehensive, Citywide user fee study took place in 2016/2017 with adoption taking place in 2018.
• The City also hired MGT in 2021 to conduct a Public Works fee study update.
• In late 2023 the City hired MGT to conduct a Code
Enforcement fee study update.
• The study includes fee-for-service activities and
fines/penalties. Non-user fee related services were not analyzed (example: impact fees)
• The study utilized Fiscal Year 2024 adopted budget
figures
• The study was conducted and completed between
MGT and Code Enforcement staff
5 OBJECTIVES
• Develop a catalog of fees
• Develop staff fully burdened hourly rates using the City’s FY24 adopted budget and personnel cost
• Define what it cost to provide fee-related services
• Assess levels of current cost recovery and evaluate
opportunities for adjustments
• Provide estimated revenue projections based on proposed adjustments
• Provide recommendations
• Ensure compliance with State law governing user fee cost recovery
6 STUDY METHODOLOGY
The analysis to determine the cost of providing fee-for-service activities is based on two basic elements:
Hourly rates of staff providing the services
Average time required to provide the services
The product of the hourly rate calculation multiplied by the time spent yields the cost of providing the service
7 STUDY METHODOLOGY
CONTINUED…
Cost Calculation:
• Interview department to identify staff members involved in each fee service and the average amount of time they spent providing the service
• Calculate direct labor cost
• Calculate indirect cost
• Apply fully burdened hourly rates to average time spent to provide the service
• Costs are then annualized by incorporating annual volume figures for each fee category
STUDY FINDINGS & RECOMMENDATIONS
► Column A: Costs, user fee services
─ $764,134 is related to Code Enforcement services for which the City charges fees. It is this $764,134 that is the focus of this study and represents the total potential for user fee-related revenues for the City. MGT calculates this cost based on cost to provide each service multiplied by the annual volume for that service that’s provided by City staff. ► Column B: Current Revenues
─ Based on the current fee amounts charged multiplied by the annual volume activity, the City receives fee-related cost recovery in an amount equal to $245,921 and Is experiencing an overall 32% cost recovery level
STUDY FINDINGS & RECOMMENDATIONS
CONTINUED…
► Column C: Current Subsidy
─ The current subsidy is the difference between the current cost minus current revenues.
Current fee levels recover 32% of full cost, leaving 68% or $518,213 to be funded by other funding sources. This subsidy represents an opportunity for an updated and more focused cost recovery effort by the City for fee-related services. ► Column D: Recommended Cost Recovery
─ It is estimated that adoption of the recommended fees would increase cost recovery to $607,548. This would bring the overall cost recovery level up to80% ► Column E: Recommended Increased Revenue
─ Assuming activity levels remain relatively static, approximately$361,628 in in additional cost recovery could be received by the City.
Agency: City of Vallejo
Department: Code Enforcement
Fiscal Year: 2023-2024
Ord Service Name Fee
Descriptio
Annual
Volume
Current
Fee Full Cost Current
Recovery Annual Cost Annual
Revenue
Annual
Subsidy
Recovery
Level
Recommended
Fee
Annual
Revenue2
Increased
Revenue
Recommended
Subsidy
1 Warrant Processing Fee Flat 6 1,476.77$ 1,814.35$ 81% 10,886$ 8,861$ 2,025$ 81% 1,469.62$ 8,818$ (43)$ 2,068$ 2 Warrant Lien Process Admin. Charge Flat 6 494.38$ 393.86$ 126% 2,363$ 2,966$ (603)$ 100% 393.86$ 2,363$ (603)$ -$ 3 Notice of Violations Appeals Fees (Non-Refundable) Flat 8 509.23$ 2,764.99$ 18% 22,120$ 4,074$ 18,046$ 18% 2,764.99$ 22,120$ 18,046$ -$ 4 Administrative Citation Fine Per Code Section Violated - 1st Citation Per Violation 91 283.26$ 446.90$ 63% 40,668$ 25,777$ 14,892$ 63% 283.26$ 25,777$ -$ 14,892$ 5 Administrative Citation Fine Per Code Section Violated - 2nd Citation Per Violation 24 566.52$ 446.90$ 127% 10,726$ 13,596$ (2,871)$ 127% 566.52$ 13,596$ -$ (2,871)$ 6 Administrative Citation Fine Per Code Section Violated - 3rd and All Subsequent Citations Per Violation 20 850.84$ 446.90$ 190% 8,938$ 17,017$ (8,079)$ 190% 850.84$ 17,017$ -$ (8,079)$ 7 Administrative Citation Lien Processing and Late Payment Penalty Per Citation 61 503.93$ 406.94$ 124% 24,823$ 30,740$ (5,916)$ 124% 503.93$ 30,740$ -$ (5,916)$ 8 Notice of Violation Admin. Charge Flat 183 409.51$ 446.90$ 92% 81,783$ 74,940$ 6,843$ 92% 411.15$ 75,241$ 300$ 6,543$ 9 Vacant Real Property Annual Registration Fee Flat 150 453.00$ 1,448.78$ 31% 217,317$ 67,950$ 149,367$ 31% 449.12$ 67,368$ (582)$ 149,949$ 10 Notice of Violation or Administrative Citation Posting Fee New Fee 400 -$ 80.62$ 0% 32,247$ -$ 32,247$ 100% 80.62$ 32,247$ 32,247$ -$ 11 Demand Request Processing Fee New Fee 150 -$ 212.09$ 0% 31,814$ -$ 31,814$ 100% 212.09$ 31,814$ 31,814$ -$ 12 Lien Release Request Processing Fee New Fee 400 -$ 701.12$ 0% 280,448$ -$ 280,448$ 100% 701.12$ 280,448$ 280,448$ -$ 13 Vacant Real Property Renewal Fee (75% of regular fee) New Fee - -$ 981.67$ 0% -$ -$ -$ 100% 75% of regular fee -$ -$ Total User Fees $764,134 $245,921 $518,213 $607,548 $361,628 $156,586 % of Full Cost 32% 68% 80% 147% 20%
1 Fees #4-7 are fines are exempt from Prop 26.
2 Fee #11 is a fee for requesting a payment demand, also known as demand payoff).
Per Unit Annual Per Unit Annual
Current Recommendations
Thank you
CONTACTS:
Andrew Murray
City Manager
Presentation on Roles of the
City Council and City
Manager in Council-Manager
Form of Operation and
Discussion of City Council’s
Goals for City Manager
BACKGROUND
At the appointment of the City
Manager in May 2024, Council
requested a presentation on the
roles of the City Council and City
Manager and a discussion of the
City Council’s , goals and
expectations of the City Council and
City Manager.
Presentation by Joe Gorton of Bob Hall and
Associates
• Roles of City Council and City Manager
• City Council’s Performance Expectations of the
City Manager
• City Council’s Near-Term Priorities for the City
Manager
CITY COUNCIL PRIORITIES
• Public Safety
• Efficient, Effective and Responsive Government
• Economic Development
• Housing and the Unhoused
• Youth Development
CITY MANAGER GOALS
• Provide Excellent Service
– Creating strong relationships
– Efficient and Effective City
– Smart Strategies
• Achieve the City Council Priorities
• Accomplish Goals with Core Values:
Honesty Integrity
Respect Compassion
Accountability Collaboration
Equity Effectiveness
Creativity
CITY MANAGER’S ACTIVITIES
(first 3 months)
• Creating Relationships
• Understanding Key Programs and Procedures
• Understanding Council Priorities and Community Issues • Formulating Plans to Address/Achieve Goals
CITY MANAGER’S ACTIVITIES
(4 to 6 months)
• Continuing to Build Relationships
• Increase Communication and Engagement
• Implementing Near-Term Opportunities
– Efficiency and Effectiveness of City Programs and
Procedures
– Achieve Council Priorities
– Address Community issues
– Developing Longer-Term Plans
NEXT STEPS
City Manager will focus on
meeting City Council
performance expectations
and near-term priorities.
CONTACT(S)
Andrew Murray, City Manager
[email protected]
(CM up to $150,000)