Sacramento Law and Legislation Committee Special Meeting – September 19, 2023

The Law and Legislation Committee of the Sacramento City Council met in special session on Tuesday, September 19, 2023, from 11:01 a.m. to 2:08 p.m. in the City Hall Council Chamber. Members present were Chair Katie Valenzuela (District 4), Councilmember Lisa Kaplan (District 1), Vice Mayor Eric Guerra (District 6), and Councilmember Rick Jennings (District 7). The committee acted on a three-item consent calendar, reviewed and unanimously forwarded two Department of Utilities ordinances to the City Council, and provided direction to staff on cannabis social consumption.

Consent Calendar

• Approved the August 15, 2023 Law and Legislation Committee minutes (File ID 2023-01115).
• Approved the Law and Legislation Log (File ID 2023-01178).
• Received and filed Legislative Advocacy Correspondence (File ID 2023-01064).

All consent items were adopted by one motion (Kaplan/Guerra) with a 4-0 vote.

Public Comments & Testimony

Storm Drainage Development Fee

• Chris Noram, North State Building Industry Association, expressed serious concern about the proposed fee increases, describing increases of 1,000 to 1,500 percent in some cases. He stated the increases could jeopardize hundreds or thousands of housing units in the pipeline. He submitted an independent analysis and requested protections for projects covered by SB 330, an exemption for projects with submitted grading or improvement plans, and an implementation date of 2025.
• James Allison, Midtown Association, representing 1,200 properties, said the fee increases would remove a key incentive for development. He said the city's own calculations show a 200-unit apartment building in the central city would see fees rise by more than $700,000, a 115% increase. He urged the city to pursue state and federal infrastructure grants first and apply fees based on need rather than maximizing them.

Cannabis Social Consumption

• Thirty-nine people provided public comment. A large majority supported expanding legal consumption beyond Cal Expo and creating consumption lounges. Many speakers, including representatives of 1111 Delivery, Alpaca Club, Homebrew, and other operators, asked the committee to include standalone/off-site consumption options for non-storefront and delivery businesses, not only storefront retailers. Several urged a pilot program and priority for social equity/core participants, while others asked that all operators be eligible.
• Medical cannabis patients and advocates described the need for safe, legal spaces to consume, especially for renters, seniors, and people with medical needs. Risa Roque (Lumpie's Flowers), Richard Miller (Americans for Safe Access), and JP Tatarelli spoke in favor of preserving medical access and standalone lounges.
• Public health and youth-serving organizations opposed or raised concerns: Faith Galati (Breakthrough Sacramento), Michael Duncan and Albert Tittman (Native Dads Network), Letitia Aguilar (Native Sister Circle), Crystal Harding (Public Health Advocates), Cynthia Mumford (Omni Youth Programs), Jim Ketty (Youth Forward), Corey Burgess (Pro Youth and Families), and a statement from pediatrician Dr. Silver warned about secondhand smoke, youth exposure, impaired driving, and renormalization of smoking. Several asked for a public health briefing and County Public Health involvement before decisions.
• Rhonda Ernest (NH Logistics) noted that fewer than 9% of city cannabis licenses are held by core participants despite a 50% policy goal, and urged exclusive or prioritized award of lounge/event permits to core participants.

Discussion Items

Item 4 – Floodplain Management Ordinance

Staff from the Department of Utilities presented proposed amendments to Sacramento City Code Chapter 15.104. Changes include adding definitions for 'alteration of a watercourse' and 'encroachment,' clarifying accessory structures, updating FEMA bulletin references, requiring engineer/surveyor information, and prohibiting increases in base flood elevation of more than one foot without administrator discretion. The ordinance aims to maintain compliance with the National Flood Insurance Program and the city's Class 3 Community Rating System discount. Councilmember Kaplan asked about the distinction between 'higher than' and 'consistent with' NFIP standards and whether some areas could be redesignated from A99 before comprehensive levee certification. Staff confirmed the changes are clarifying and already-compliant. The committee voted unanimously to forward the ordinance to City Council (motion Kaplan/Guerra).

Item 5 – Storm Drainage Development Fee Ordinance

Utilities Director Pravani Vandeyar proposed adding Section 13.16.125 and amending Section 18.52.010 to establish a new storm drainage development impact fee and add it to the city's fee deferral program. The department completed nexus studies and held 11 meetings with about 26 developer groups. The proposed ordinance responds to a 20-year gap in development impact fee updates. After public comment, committee members discussed protections for projects already in the pipeline, SB 330 vesting, phasing in fees, a possible gradient fee structure, and a 90-day implementation period after City Council adoption. The committee unanimously forwarded the ordinance to City Council with direction to staff to meet with industry partners, incorporate pipeline protections and SB 330 analysis, and address implementation timing (motion Guerra/Kaplan, as amended).

Item 6 – Cannabis Social Consumption at Special Events and Onsite Consumption Lounges

Cannabis Manager Davina Smith presented research on social consumption, noting that California has no statewide allowance for standalone lounges under current state law; local consumption is limited to Cal Expo except by local approval. Staff visited eight lounges and one cannabis-friendly hotel and received more than 400 survey responses. They identified three decision points: events beyond Cal Expo, consumption lounges, and core participant opportunities.

• Chair Valenzuela expressed support for a limited event permit pilot, lounges attached to existing permit holders to the extent state law allows, priority for core participants without exclusivity, and a public health panel. She highlighted medical necessity and harm reduction, and emphasized that the illicit market is a common enemy.
• Councilmember Kaplan said she is 'ready to go' on consumption lounges, with priority for core participants and perhaps 3-4 initial licenses, and supported public health education and best practices.
• Vice Mayor Guerra expressed strong hesitation about moving forward until a full public forum with county health experts is held, citing a UCSF study on particulate matter, tobacco control history, and concerns about secondhand smoke. He said he was not in favor of moving forward at that point.
• Councilmember Jennings supported a pilot program for lounges first, then events, with public health and education panels; he wanted crime/impaired-driving data from the cities studied and priority for core participants while allowing others.

Staff clarified that under state law, consumption lounges are currently an add-on to an existing retail license and standalone/off-site lounges for delivery-only businesses are not currently permitted, although the city could explore options with state partners. Assistant City Manager Laney Millstein asked for clear direction; the committee agreed staff should return with an ordinance authorizing some form of social consumption consistent with state law, starting with a limited number/pilot, core priority with phased inclusion, public health and public safety components, public education, and geographic distribution.

Key Outcomes

• Consent calendar adopted 4-0.
• Floodplain ordinance forwarded to City Council 4-0.
• Storm drainage fee ordinance forwarded to City Council 4-0 with additional staff direction.
• Cannabis social consumption: staff directed to prepare an ordinance for future committee/council consideration; no formal vote. The meeting adjourned at 2:08 p.m.