Measure X Stakeholders Meet For "The Rules"

REMEMBER THIS?
You will recall that I did a preview of the Measure X Stakeholders meeting, HERE, of the event that was held in City Council Chambers from 2:00 - 3:30 today.  In that entry I gave you some handy links and a map of where this activity will eventually be permitted.  That map is below.

 

AN UNEXPECTED CROWD

When I arrived at City Hall a few minutes before the starting time I was impressed with the number of people milling around on the Council Chambers porch.  This was unusual, and was compounded by the crowd I found inside the room.  Eventually, when the meeting began, I estimate there were upwards of 75 people in the auditorium - and more than a few of them were folks you'd never invite to dinner.  In all my years of attending meetings in Costa Mesa I've never felt as uneasy as I did during this one.  I found myself thinking, "Well, if this is the kind of folks we are inviting to do business in our city, I'm not happy about it... at all!"

FRANCIS LED THE TEAM

Assistant City Manager Rick Francis was the point man on this event and he moderated the discussions.  He was supported by Chief of Code Enforcement Fidel Gamboa and Zoning Administrator Willa Bowens-Killeen.  Also there to aid in the presentation was David McPherson of HDL, the consultancy that provides us with Sales Tax information and also consults in these kinds of issues.  Also in attendance was City Clerk Brenda Green, Interim Development Services Director Jay Trevino, consultant Sherry Vander Dussen, Interim Finance Director Steve Dunivent, Captain Bryan Glass of the CMPD and several other city staffers.

HIS OPENING COMMENTS

Francis took the lead and told the crowd they were going to present a broad overview of this issue and would deal with permits, fees, etc.  He said, "Not many cities are doing specifically what Costa Mesa is doing, so it will take a long time."  He said it's "not going to be a two week, or two month process."  The crowd murmured.  He told us that at the April 18, 2017 City Council meeting the council will hear the fee recommendations.

MC PHERSON AND THE CUP

He then introduced many of the staffers present and described their roles briefly.  He also introduced David McPherson of HDL.  He introduced the Conditional Use Permit (CUP) process briefly, indicating that state law requires a 60 day wait after adoption of the fee schedule and the CUP process could take 8-12 weeks, depending on many variables.

 FIDEL AND THE APPLICATION PROCESS

Fidel Gamboa then took over and walked the audience through a slide show on the application process.  You can see the slide above for reference.  The message that was sent, loud and clear, throughout this entire meeting was that background checks were going to be major hurdles that the applicants will have to deal with.  They were advised to be sure they and their business partners were "clean", and if there's a blemish on their record it needs to be resolved or don't bother applying.  There was no ambiguity on this issue.

WILLA ON THE "NORMAL" CUP

Willa Bowens-Killean went through the process for a normal CUP - this is NOT a normal process because of all the governmental clearances required.

ID BADGES REQUIRED FOR ALL

Gamboa told the crowd that EVERY employee will be required to have a city-issued Identification Badge and must wear it at all times because Code Enforcement, the Police and Fire Department may drop in any time to perform an inspection.  Failure to comply puts their business in jeopardy.

FEE SCHEDULE STILL AMORPHOUS...

Francis spoke of the fee schedule, which apparently is not yet complete.  Remember, April 18th is the date it will be presented to the City Council.  He said the City WILL NOT accept cash payments.  Background checks will be conducted by both the California Department of Justice and the Federal Bureau of Investigation.  The FBI check could take 6-9 months or longer.  Francis guestimated that fees for a new business as defined by Measure X will cost in the neighborhood of $50-$55 thousand dollars, not counting the business license fee of $250.  Every two years a Business Permit fee will be required and a Business License renewal will be required every year.

...SALES TAX, TOO

Then the discussion turned to the issue of sales tax.  Presently it is set at 6.5% of gross receipts, but the council could change that either direction.  The books will be audited by HDL periodically.

CLEAN RECORDS!

McPherson then reiterated the need for clean records.  He advised the audience to know who you're in business with.  He emphasized the duration of background testing.

FITZY SEEKING SPEED IN THE PROCESS

Resident and former Planning Commission Chairman Jim Fitzpatrick, apparently now a shill for the dope business, asked about the timeline, and wondered if certain elements could be truncated.  He said he was looking for speed in the process - which brought a snappy response from Francis that it wasn't speed, it was marijuana.  The crowd erupted in laughter.  Fitzpatrick persisted and Francis told him it's not likely because of all the variables in the process, which could take 5-8 months.

NO RECKLESS OPERATORS NEED APPLY

Francis reminded us that their application packets need to be TIGHT - no holes that could cause disqualification later.  He reminded them that none of the fees are refundable.  He said the objective is to weed out the reckless operators... again, the crowd laughed.  In response to a question he said that the tax would probably be due quarterly, but that, also, is still an open question.

NON-SOLVENT VS. SOLVENT?

Then there were several questions about non-solvent and solvent processes... have no clue about that.  Apparently it's a method of processing.  Apparently a process using ethanol extraction may be used in Costa Mesa.  That fact caused more murmuring in the crowd.

SCREENING NEW EMPLOYEES COULD TAKE 10 DAYS

Concern was expressed about the hiring process for new employees.  Francis assured us that it might only take 10 days or so. 

WHAT ABOUT OTHERS?

Questions were asked about third parties in the facilities - contract maintenance personnel, cleaning crews and consultants who might be in the facility providing some kind of support.  Each will be required to have a business ID badge - not the city-issued badge - and will be required to show it.  Some kind of a sign-in process will be required and will be audited.  It is not the intent to allow "consultants" to slip around the identification process.

"COST RECOVERY" NUMBERS QUESTIONED

Some members of the audience questioned the cost recovery process and the $50-$55 thousand dollar fee.  Francis explained the many city hands that are involved in this process, each of which costs money.  The City expects the fees to cover all those costs.  At one point an audience member asked if they could kick in some cash so the City could hire more staff to move the process faster.  That concept was rejected.

INSTALLMENTS

That fee is due in segments, at certain points along the approval process.. it is expected that about a quarter of the fee would be paid up front and the remaining segments later as progress is made.  Francis reminded the audience that Costa Mesa has a very low CUP fee for most businesses - it's way out of date.  However, THIS CUP process WILL pay for itself.

EARLY START POSSIBLE?

Some asked if there's anything they can do to begin the process now.  The answer was NO. There is a CUP application online, but an addendum will be posted for these types of businesses.

WHAT ABOUT "DELIVERY"?

Another person asked how they planned to handle "delivery" - apparently meaning delivering marijuana to Costa Mesa addresses.  Francis reminded them that the sale and cultivation of marijuana is still illegal in Costa Mesa and that the kind of "delivery" he was describing would be forbidden and subject to law enforcement.

HOW FEES COMPARE?

When the question was asked about how these fees compare to other CUP fees we were told those were typically in the $1,500 range.

LIKE SOMEBODY RANG A BELL

At 3:05 - an hour into the meeting, with a half hour left, it was though someone rang a bell.  All of a sudden first 8, then 10 then eventually around 20 people stood up and left the room and decamped to the porch where they chattered away among themselves.  Apparently they'd heard enough.

SUE WANTS 100% COMPLIANCE - AND ENFORCEMENT

Resident Sue Lester - former pot purveyor -  arrived late but stayed to the end and spoke twice.  She wanted to be sure the City did this right.  She was concerned about the compliance policy, voicing the opinion that it should be 100% - no exceptions.  As I had looked around the room during the meeting, and based on many of the questions asked and the reactions to the answers, I found myself thinking that many of those in attendance have a problem with "rules".  I guess we'll see. 

NO CULTIVATION... PERIOD!

Later, in response to a question about marijuana grown in laboratories for research purposes, Francis reminded those remaining in the chambers that growing marijuana - cultivation - is forbidden, as is retail sales of marijuana products.

"GOT OUR BACK IF THE FEDS BUST US?"

Another person asked if the City "Will back us if the Feds come calling?"  Her point was that if they followed all the City rules and still got busted by federal authorities the City should defend them.  McPherson replied that we have no control over what the federal authorities do.

SLOW LEARNER

Fitzpatrick again asked if there was a way to truncate the process - he's a slow learner.  The answer was still NO.

90 MINUTES OF INTERESTING DISCUSSION

Francis wrapped up the meeting at 3:30 and most departed.  Many hovered around outside in small groups, chatting.  A few, including members of the press who were present, stuck around to get some more answers.  Gamboa was a very popular guy as applicants peppered him with questions.

NOT COMFORTABLE AT ALL...

Here's my take on the meeting.  I've never been in a meeting where those conducting it had to constantly remind the attendees that they need to be "clean"!  I was amazed that those leading the discussion found it necessary to admonish the attendees that they need to carefully vet their partners in their enterprises lest they lose a lot of money if one of them turns up "dirty".  This is just not in my realm of experience.  I don't like the fact that Costa Mesa apparently is about to become Marijuana Heaven, where those interested in advancing the "product" will find a safe place to create new products.  Yes, I know... it's now the law of the land for adult recreational marijuana and, yes, I know there are those who benefit from the administration of medical marijuana... I get it.  I got the sense, from the questions asked and reaction to the answers, that many of those folks who crowded into the chambers this afternoon were looking for ways to game the system.

STAFF NOT PREPARED FOR WHAT'S AHEAD

I also got the impression that our city staff, as hard as they've worked on this problem, are not really prepared for what's to come.  They didn't have enough answers to very important questions, particularly since this thing is about to get launched on April 18th.  We don't have enough staff - code enforcement, fire and police - to properly enforce our laws.  We don't have enough staff in the planning area to handle all this paperwork on a timely basis.  We don't have enough staff in Building, Inspection and Engineering.  And, in that arena, we don't have a full-time Director of Development to guide this process.  Yes, Jay Trevino is a superstar - but he's a consultant, without any kind of a vested interest in my city.  We are ripe pickin's for the kind of sophisticated operators I saw in that room tonight to take advantage of us in many ways.

TIME TO SPEAK UP

So, I'm worried about the future of the north part of town.  I'm worried for the rest of us, too.  This is another flim-flam conjured up by Jim Righeimer that he will leave in his wake.  If we're going to do this we should squeeze these "businessmen" until it hurts!  That "$55 thousand" number probably should be $100,000!  And, there MUST be a ZERO tolerance philosophy for these businesses.  NO transgressions - not a single one!  I'm thinking that the good folks of this city need to express themselves to their elected leaders via email, telephone calls and/or presenting themselves before the City Council on April 18th.  Now is the time.