Sorry, Chair Camp Hugh, can you give me one more audio check?

Yes, Ty, here we are.

Thank you very much, sir.

Okay.

Just wait for a few more members.

Absolutely.

Welcome to the Economic Development and Intergovernmental Relations Committee meeting of March fourth, twenty twenty-six.

Uh, before we jump into this, I'll just notifying the public and my fellow committee members.

I'll be uh sharing the meeting virtually today under uh just cause exception related to the Brown Act uh due to uh child care and uh uh sickness needs.

Uh and there is no one over the age of 18 in the room here with me.

If that changes, I will notify the committee.

Uh our committee liaison Natalie Kessler will provide information and instruction for the public to participate in today's meeting.

Thank you, Chair.

While members of the public are able to attend the meetings in person.

This meeting is being televised and live streamed on the city's website, and council administration will continue to make arrangements for the public to comment using the Zoom webinar platform.

Members of the public who wish to provide virtual testimony must enter the virtual key by raising their hand before the virtual queue closes.

The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever occurs first.

This will allow for better meeting management between the two platforms and ensure the committee is able to manage and conduct city business.

We appreciate the public's cooperation.

Chair.

I'll now call the meeting of the economic development and intergovernmental relations committee of Wednesday, March 4th, 2026 to order calling the role by Chair Lee.

Here.

Council Member Campbell.

Here.

Council Member Foster.

Here.

I am also present virtually.

Also present with us is Noah Fleischman, senior physical senior fiscal and policy analyst from the office of the IBA, senior deputy city attorney, Kate Malcolm from the office of the city attorney, and Chris Ackermann Avila, policy advisor from the office of the mayor.

Natalie, please continue with public comment instruction.

If you're in person, please complete a speaker slip located at the entrance of chambers and place it in the tray indicated at the front of the room.

Please do so in a timely manner to ensure proper meeting management.

In-person testimony will conclude before virtual testimony begins.

And members of the public can join the webinar by computer, tablet, or smartphone by accessing the link listed online in the preamble language of the agenda on the city's webpage.

To join the Zoom webinar by phone, please dial 16692545252.

When prompted, the webinar ID is 160-340-6084 pound.

This information is also available on the agenda and will appear on the screen during the public comment period for each agenda item.

Please note that if you're watching via City TV Channel 24 or online, there may be a delay.

Please participate via the audio on your phone and mute your TV or computer when it is your turn to speak.

If you wish to speak on a particular item, wait for that item to be called and then raise your hand to speak by tapping the raise your hand icon.

Or if you're a called participant, press star nine on your phone.

If you raise your hand during a non-comment period, your hand will be lowered.

Chair.

Thank you, Natalie, for reviewing those structures for the benefit of the public.

The quorum now being present, let's take up non-agenda public comment.

Council members respect and appreciate the public's input and are fully committed to protecting every participant's free speech rights at council and committee meetings.

Natalie, please proceed with the non-agenda public comment.

For Rule 2.7, non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda but within the subject matter jurisdiction of the committee.

Each speaker will have two minutes.

We will begin with those who have submitted speaker slips here in chambers.

We have received two speaker slips.

Scott Chipman, please approach the electern, and you'll be followed by Blair Beekman.

I want to say something about the words we use when discussing public policy because the words often hide the truth.

In San Diego, public transportation is subsidized by the taxpayers at more than 70%.

That means the majority of the cost isn't paid by writers, it's paid by everyone else.

Yet when we talk about transit, we rarely call it what it actually is.

Heavily subsidized.

Now think about another phrase: affordable housing.

Just like transportation, affordable housing, it generally means housing that is subsidized by taxpayers.

But instead of using words subsidized, we use softer, more appealing language.

When government programs are given euphemistic titles, we use clarity.

So here's a simple exercise.

Tonight, ask your family, friends, or neighbors how much do you think public transportation in San Diego is subsidized?

Most people won't come anywhere close to the real number.

And that tells us something important.

People are being asked to fund programs without clearly understanding the costs.

This isn't about whether subsidies are good or bad.

Reasonable people can debate that, but we should at least be honest about what we're talking about.

If a program is subsidized, let's call it subsidized.

When we replace clear language with root euphemisms, we don't just soften the words and meanings.

We lose the facts and we lose the truth.

Oh, and let's remember who is doing the subsidizing.

The taxpayers.

Thank you.

Blair Beekman.

Hi, Blair Beekman.

Um thanks for the afternoon meeting.

Thanks for the previous words.

I think subsidy clarification is really important how we talk about our issues also.

I try to work towards the goal of how do we create good social service programs for everyone.

Um so everyone can participate.

I think that's um my goals in the clarity of using the term subsidy.

And that we don't have to fear that.

Good luck and those sort of efforts.

Um I wanted to comment that um from a really interesting important uh city council meeting yesterday.

Uh KPI issues, I think are being better developed between ourselves.

There was a morning meeting.

Uh the race and equity uh uh I don't know what it's called.

It's be working with the uh IPA's office.

They seem to have a good grasp on wanting to work on KPI issues as a fact-based approach, and really not be overly you know emotional about it, but just have a clear standard and a set of guidelines they're working on.

And I hope we can all look at them and and respect, you know, we want to do this well.

Uh, our future of KPI stuff.

Good luck how we can be doing that uh together.

It was also mentioned um the future of housing issues, that um John Stump, the uh at public comment time very nicely said this may be a taxation and revenue item, and if it is, that is a major part of it, that we concern ourselves that we're uh well responsible and organized with that and do that well.

The same with the parking issues.

It's more than just about Boa Park that fees are going towards, it's going towards the general fund issues.

Let's be responsible in reporting that.

I keep making that point.

And it's okay, it's safe.

And good luck that we create safety and peace here at the local level, as at the uh international level, they're creating war.

We don't understand.

Good luck how we talk about that.

Thank you.

Thank you.

This concludes in-person public testimony.

We will now move to the virtual queue.

I've started the five-minute timer.

We have three hands raised in the virtual queue for non-agenda public comment.

Becky Rapp, please unmute and begin.

Good afternoon, Chair Kempio and Council members.

My name is Becky Raff.

I'm a public health educator and a member of my planning group.

Um, I come to bring to your attention an article titled Legal Weed didn't deliver on its promises.

And the article highlights the disparities between promises made by industry advocates and the actual effects the industry has had on neighborhoods and communities.

Some promises made include reduced opioid um addiction, safer products, increased tax revenue, and socially responsible marijuana industry.

These um expectations have been largely overstated and proven to be false.

Um were permitted.

In two in 2000, there were 2.5 million Americans reporting daily use.

Then in 2022, that number drastically increased to 17.7, and it's reported that more than 40 percent of Americans are using it nearly every day.

We have to ask ourselves if our communities and neighborhoods are healthier and safer.

According to the study, the answer is no.

In fact, one significant area of concern relates to opioid-related deaths.

Deaths have risen in areas where marijuana has been permitted to be sold.

The marijuana industry has not been able to deliver on its word, with rising consumption leading to detrimental health risks and overrunning emergency departments, negative economic impact, and regulatory failures.

Now is the time to coordinate with other jurisdictions advocating for reforms that would better balance public health and safety needs.

Thank you.

Thank you.

Our next speaker is Madison.

Please unmute and begin.

Thank you again.

Hi, thank you.

Good afternoon.

Just just point, I'm sorry, point or are we on non-agenda public comment?

If Chair, I don't know if you can hear me, but I just want to make sure that if we are doing non-agenda public comment, that we are doing non-agenda public comment.

They are talking about cannabis, they are more than welcome to talk about that when the item is up, but um if we can um reel that in, I'd appreciate it.

Thank you.

I hear you, thank you very much.

Uh Councilmember Foster.

Um, certainly I hear that point.

I think that given we know that there's uh a group of folks.

Let me, I'll tell you what my thinking was, knowing that we have a group of folks who uh call in uh regularly to this meeting regarding uh cannabis generally speaking.

Um I was hearing that comment and thought it was walking close to the line, but not quite over the line.

I appreciate the point you're making.

Um, and uh I will ask that if there are other folks who are call calling in about the licensing um or excuse me, the social equity item that's coming later in the agenda to please uh focus on that when that item is called.

Uh was giving a little leeway there, but I appreciate Councilmember Foster that you're pointing out.

It's it's it got close to the line there.

But uh so I will uh implement that rule moving forward.

Thank you.

Thank you.

We will continue with Madison, Madison, please unmute and begin.

Okay, thank you.

Good afternoon, Chair Campio and Council members.

I'm here to ask for your support for SB96, which was authored by Senator Catherine Blakespear.

This bill would prohibit the public retail sale of nitrous oxide canisters larger than the standard eight gram charger, while preserving legitimate medical, dental, culinary, and automotive uses.

Nitrous oxide, which is commonly called whippets, is increasingly misused as a recreational drug.

Large flavored tanks are being sold in smoke shops and marketed in ways that clearly blur the line between baking and intoxication.

While sales to minors are already illegal, these oversized tanks remain widely accessible and inexpensive.

The health risks are serious.

The FDA recently warned of oxygen deprivation, neurological damage, and even death.

Repeated use can cause long-term nerve injury and cognitive impairment, particularly concerning for adolescents whose brains are still developing.

This is an economic and intergovernmental issue because discarded cylinders are creating a growing waste management burden with local governments paying more to dispose of them than consumers pay to purchase them.

Those costs are passed on to taxpayers.

Other California counties and cities have already acted.

SB 936 creates a consistent statewide standard while protecting legitimate businesses that use licensed distributors.

Supporting this bill aligns public health, fiscal responsibility, and responsible retail policy.

I ask this committee to support SB 936.

Thank you.

Thank you.

The five-minute timer has concluded.

Phone number ending in 870.

Please press star six and begin.

Okay, committee member foster the third.

I am going to shine a very bright spotlight on you now.

Because of something you said in budget committee this morning.

Now I don't know if I'm going to get the context right.

So please correct me on it if I'm wrong, because that's critical.

But I believe you were commenting on the US government and President Trump.

And here's what you said that absolutely hit me beautifully.

But that is so beautiful.

And uh teach us more, will you?

Okay.

Now I want to share something really.

I hope I have time.

Something really beautiful that happened this morning in the gas slamp when I went to get Starbucks coffee.

There was an SUV covered, like a gift with a big huge bowl on it.

And of course, I I'm curious.

Uh what I got to see, I watched the whole thing happen.

All state had donated a used SUV to a company from Lemon Grove called Collision Experts.

And uh that car, that SUV had been painted and fixed up beautifully.

And the national, oh, I can I can't see this National Auto Body Council there.

I got it right.

Um they donated it to a woman who was pregnant and a retired vet, and her husband is still on active duty, and I got to see them give her the key to the car, the SUV.

Thank you.

Thank you.

This does conclude your time.

Thank you.

Our final speaker in the queue is Judy String.

Please begin.

Good afternoon, committee, and congratulations, Chair Capillo.

It's a life-changing event when children become your responsibility, and you care a great deal about the environment around them as they grow and how they'll be affected, particularly their health and welfare.

And I suppose since it's the economic development committee, also how they choose a pathway that gives them the ability to take care of themselves.

Something this committee has really paid attention to, putting in place opportunities for our young people so they can receive the tutoring and mentoring the opportunities to learn from all of us that are older about pathways that will make their life more successful.

I've had an opportunity the last uh couple of times in public comment to talk about a new law that means a great deal to me.

It's AB 455, requiring single family homes to disclose in writing about whether there's inside smoking and vaping, be it tobacco or marijuana.

I think it's means a lot to us that our children grow up healthy and happy and that they should live in homes that aren't previously contaminated by vaping and smoking contaminants.

And I'd like to respectfully ask that perhaps this committee or another appropriate committee invite the researchers from San Diego State University's Center for Tobacco and Environment to come and present their research and their work to bring AB 455 to fruition.

I think all of us would be impressed with how much they care about our the health of all of us and particularly their emphasis on young people and creating an environment for them that would protect their health.

Perhaps since there are university, they could come and do that for us.

Thank you.

And Chair, this concludes non-agenda public comment.

Thank you very much, the members of the public for your participation.

Uh, we will now move to committee member, mayoral staff, city attorney, and IBA comments.

Do we have any?

Hearing and seeing none.

Do we have any requests for continuances?

Hearing and seeing none, we will now dispense with approval of the consent agenda.

Are there any requests to remove items from the consent agenda?

Hearing none, Natalie, let's please proceed with the public comment.

Thank you, Chair.

The public comment period for the consent agenda is now open.

The consent agenda includes item one approval of the committee minutes from February 20th, 2026.

Item two, resolution authorizing the marketing partnership agreement between the City of San Diego and California Coast Credit Union.

And item three resolution authorizing the marketing agreement between the City of San Diego and Hyundai Motor America.

Each speaker will have one minute per item.

And Chair, we did receive two speakers' lips from Blair Beekman.

Please approach the elector, and you've indicated that you wish to speak to item one and item three.

So you'll have two minutes.

Hi, thank you, Blair Beekman.

Um, I think I'll just speak on item three uh today.

Uh the the uh arrangement with uh Hyundai Motors uh for new vehicles.

You speak about other vehicles uh use uh for the city.

Um I I'm assuming I these were fossil fuel cars, and I if I if it's appropriate, I hope I can just quickly offer uh in the importance of our electrical vehicle use, uh electric vehicle use that um council person von Wilpert has has made very clear uh a certain set of batteries can be really harmful that we're questioning right now.

I think there can be a transition to another uh chemical composition of batteries that's safer, and I hope those kind of conversations can be more regular here.

Council person von Wolpert made a great uh effort to make something clear that we're worried about uh electric battery use, and uh there are ways to mitigate that, and uh, I hope we can talk more openly what those differences can be and uh improvements for ourselves.

Um, good luck in those efforts, and now we talk about electric vehicle use and battery use in our future.

Thank you.

Thank you, and chair with no hands raised in the queue.

This concludes public comment on the consent agenda.

Thank you very much to the members of the public for participating.

I will now turn it over to committee members for questions and comments and entertain a motion.

I will move the consent agenda.

Thank you, Councilmember Foster.

Do we have a second?

Councilmember Campbell.

I'll be happy to second the consent agenda, but I would like to report a no vote on item number two.

Understood.

Thank you.

We have a motion and we have a second with a registered no vote from Councilmember Campbell on item number two.

I'll call the role on the consent agenda as a whole.

Vice Chair Lee.

Yes.

Councilmember Campbell.

Yes, except no on number two.

Very good.

Councilmember Foster.

Yes.

And I am a yes as well.

Thank you, everyone, for that.

We will now move on to the discussion agenda.

Natalie, let's move to item number four.

Item four fiscal year 2027 business improvement district budget annual appropriation process.

And if you're watching on City TV or the live stream online and wish to call into the meeting to speak to item four, please call 1669-2545252.

When prompted info webinar ID is 160-340-6084-pound.

Chair.

Thank you.

We'll hand it over to Sean Plaistead, our small business engagement specialist from the EDD department.

And Sean Caraffin, program manager from the EDD department as well.

Please introduce yourselves.

Let us know how much time you'll need.

Good afternoon, Chair Kempio and committee members.

My name is Sean Plaisted, Small Business Engagement Specialist with the Economic Development Department.

With me today is Sean Caraffin, Program Manager.

Yeah, there we go.

Respectfully ask for six minutes for the presentation.

Very good.

The item before you today is the fiscal year 2027 business improvement district or bid budgets.

The city collects assessments from businesses within bids and contracts with nonprofit associations to provide technical assistance for small businesses, promote neighborhood identity, and attract customers to local businesses.

The city's bid program is authorized by the parking and business improvement area law of 1989 in the California Streets and Highways Code.

The intent of the program is to strengthen small business communities, create new jobs, attract new business, and revitalize older commercial neighborhoods.

This action relates to the strategic plan's priority area, protect and enhance every neighborhood.

The business improvement district program supports dynamic neighborhoods that incorporate mobility, connectivity, and sustainability by fostering resilient and economically prosperous neighborhoods.

The City of San Diego has a total of 18 active bids that are individually managed by 16 nonprofit business associations and one currently managed by the economic development department.

For fiscal year 2027, an estimated 1.5 million dollars in assessments would be collected from approximately 12,000 businesses located within the districts shown on this slide.

Bid association managers have developed a variety of successful strategies to increase business and invest in their communities.

In the Gaslamp District, the Gaslamp Quarter Association held weekly artisan markets as well as large-scale events such as urban pickleball.

Urban pickleball was the second event of its kind in the United States and first on the West Coast.

Not only were these events successful in bringing in over one million people to the district, they had a much larger impact through social media.

In fiscal year 25, they had over 25 million impressions across social media channels where they produce all original content highlighting assessment paying businesses.

Bid assessments are strategically deployed in this way to develop and market each district's unique identity.

In the El Cone Boulevard bid, they focus their resources on direct business support and revitalizing areas in their district to create new business hubs.

The Elcone Boulevard Business Improvement Association internally staffs a business support and outreach specialist as a way to strengthen relationships with their businesses and resolve business challenges along the boulevard.

They also support their businesses through placemaking.

Community activated lots transform once vacant lots into vibrant community gathering places.

Fair at 44 and Pop Up Winona each attract over a thousand local visitors per week, driving over a million dollars in annual spending directly to the businesses within a four-block radius.

All these metrics are provided to the bids annual report uh annual performance reports.

Bids are required to post an annual performance report to their website, summarizing activities during the fiscal year and detailing revenue and expenditures.

Each year, the council considers approving a one-year extension to the agreement, which can which includes two six-month periods.

Per state law, the council must take eight actions over two council meetings.

During the first meeting, the council will consider appointing the respective advisory board for each bid, approving the fiscal year 2027 budget reports for each bid, declaring the council's intent to collect assessments from businesses, and set May 11th, 2026 as the notice public hearing date.

In addition, an action will be added this year to allow the economic development department to continue to directly manage the San Isidro bid, including waiving sections of Council Policy 900-7.

During the second meeting, the council will consider confirming the actions taken at the first meeting, authorizing the city's CFO to appropriate transfer and expend assessment revenues, approving the third amendment to the fiscal year 2024 bid management agreements with the nonprofit associations, and authorize the mayor to execute the contracts.

As part of their agreement, the economic development department collaborates with bid managers to better understand each district through metrics.

The metrics provided are for fiscal year 2025 and provide information regarding ratio of assessment versus non-assessment spending, business losses and gains, job losses and gains, vacancy rates, and rental rates.

These are included in the staff report as attachment F.

Metrics are also provided by other city departments.

These include building permits, both applications and approved, public projects, private investment, and public investment.

These are also included in the staff report as attachment G.

Accountability provisions remain part of the current agreement.

These provisions include the requirement of an anti-harassment, non-discrimination, and inclusion policy signed by all board members and staff, and the requirement that all board members and staff attend a related training.

Also included is additional conflict of interest processes.

A final summary of council actions required for the fiscal year 2027 business improvement district budgets is shown on this slide.

We are available to answer any questions.

Thank you.

Thank you for that presentation.

Let's go to public comment.

Thank you, Chair.

The public comment period for item four is now open, and we have received two speakers list from individuals in chambers.

Ben Nichols, please approach the lecture, and you'll be followed by Blair Beekman.

Each speaker will have two minutes.

Hello.

My name is Benjamin Nichols, and I'm the executive director of the Hillcrist Business Association, and I'm here representing 1800 small businesses and property owners in Hillcrist.

The Business Improvement District Program is one of the foundational elements of our budget.

We spend these funds on promotions and business mixers, communications, and business assistance.

Just in this past quarter, these funds have enabled us to promote our businesses through our shop Hill Christ for the holidays and Valentine's Day promotional campaigns.

We hosted a well-attended community mixer, and we celebrated three new business ribbon cuttings.

This past month, we launched our still fabulous promotional campaign that helps businesses during challenging construction projects in the neighborhood.

What makes this program truly impactful, however, and is the foundational leverage that it c that it creates.

For every dollar that this program invests in Hillcrest, we generate a further $19 in services.

That makes this program extremely impactful, and I urge you to support it.

And the tens of thousands of businesses across San Diego that rely on this program.

Thank you for the opportunity.

Thank you.

Blair Beekman.

Hi, Lair Beekman.

Thank you for this item.

It's important.

With the uh parking commission that was canceled a few months ago, uh, I was just shocked by that action.

And it seems like this bid process is a real natural place for the future of people who have their parking concerns and commissioners, previous commissioners, uh, become a part of this bid process.

And um the voice of parking can be addressed for the future of San Diego.

Unfortunately, I mean, I don't know if this is obvious and clear to everyone, or if this is just hidden, you know, deep within the recesses of our thinking as a community.

Um, but it's important.

It's important that parking is a part of the future of this bid process, and that we, if we need our voice heard, that it can be um worked through this bid process because I'm really disappointed in ending the parking commission and ending the public voice.

It's so vital right now.

And this is a perfect place and opportunity to allow that voice to continue.

And good luck how to bring that into uh the parking ideas into this uh bid process.

It sounds really good, and uh it seems it can be encompassing to bring in parking.

Good luck.

Um you had a very strong vibrant feeling about talking about this item.

Good luck how to bring in tech accountability to local business decisions, their parking decisions.

Um, you know, open public policies with tech, uh, the data collection.

To do that well, that's the vibrancy all of its own.

It's really important too.

So good luck how to bring that into this conversation and um thank you.

Uh, this is an important item for ourselves.

Thanks that it's here.

I hope it's here often.

Thank you.

Thank you.

This concludes in-person public testimony on item four.

We will now move to the virtual queue.

There are four hands raised in the virtual queue.

Sunny Lee, please unmute and begin.

Hello, my name is Sunny Lee, and I serve as the executive director of Discover Pacific Beach, president of the San Diego Bid Alliance, and chair of the City of San Diego Small Business Advisory Board.

I want to thank the economic development department for bringing forward the fiscal year 27 bid appropriation process.

The annual process is critical because it allows bids across San Diego to continue delivering the programs and services that our small businesses depend on every day.

Through this process, the assessment of the assessments, bid support marketing and promotion for neighborhood business districts, community events that drive local spending, business outreach and technical assistance, and place-based initiatives that keep our commercial quarters active and welcoming.

I also want to highlight the continued importance of the small business enhancement program.

SBEP has historically been one of the most effective tools of the city the city has used at the Port Neighborhood Business Districts.

These grants allow bids to provide direct support to small business businesses, activate commercial portals, and expand programs that strengthen local economies.

Together, the bid program and SPEP represent a strong partnership between the city and the small business community.

Continued support for both helps ensure that San Diego's neighborhood economies remain vibrant and resilient.

Thank you for your time and for your your continued support of small businesses across San Diego.

Thank you.

Our next speaker, phone number ending at 870.

Please press star six and begin.

12,000 businesses.

Yes, yes, yes, on bids.

And oh, before I say whether more stuff on that, uh thank you for the information on the San Isidro uh bid.

That was good information.

So on the gas lamp district uh bid, uh it's a great bid.

And what I one of the things I discovered, I think a couple years ago was reading the annual performance report.

I don't have time to read those very often, but when it came out as an agenda item back up, I really learned a lot.

Not only were the metrics there for accountability, but they really explain in the chances what it means to have a small business there and the issues they have around employees, both the good and the not so good.

It was really an eye-opener.

I love those annual performance reports, and I'm so glad that they're part of the bids.

And uh this is just a great thing uh that you're doing now uh the bids, you know, the gas lamp district bid, it's bumpy.

I'm still having healed over the loss of the promenade, and we still do have the craft uh day on the weekends a couple of days, I believe.

I love the pickle pickleball thing.

I watched it happen.

I don't like pickleball, but it was fun to see the music was great, and there are crazy people out there.

So uh it has wonderful aspects, but uh there's this collaboration thing sometimes if there's budget items that don't seem to be collaborated on.

I don't have the full truths on that, I don't speak well on it, but I miss miss the promenade.

I hope we can get it back someday.

Thank you.

This does conclude your time.

Our next speaker is Francine Maxwell.

Please unmute and begin.

Thank you.

Francy Maxwell, Southeastern San Diego.

I want to make sure that I highlight our executive director of the Diamond Bid, Jackie, for all the um extra work that she has had to do over these many months of transition.

Also want to um commend and celebrate our assistant district manager, Jerome, for all his hard work and his innovative thinking.

I would like to understand sometimes why EDD doesn't come out and hold community meetings so that the community can also be educated as we celebrate and support small businesses throughout District Four.

We have um no public bathrooms, and so when people want to walk down and um spend their money, it's very hard for them to um be able to locate something as we begin to get the excitement that um the black chamber has purchased a beautiful property in district four and the things that will happen.

I think it's incumbent of EDD to come in the community and educate people to let them know this is where your CPP money is going for this nonprofit.

We could education is the key, and so people get excited when they can talk directly to the departments.

So as we're doing things differently in 2026, let's think about EDD coming out to the community and talking to the entire community.

Love the technical assistance that you offer to the bids, and again, we are excited about the diamond and the things that are about to come.

We will no longer be the diamond in the rough with the upcoming staff and the board that we have.

Thank you so much for allowing me to speak.

Thank you.

The five-minute timer concluded.

We have one hand remaining in the queue.

Jacqueline Garcia, please unmute and begin.

Good afternoon.

Thank you, Ms.

Francine Maxwell, and uh good even good afternoon, council members and EDD support staff.

I'm Jacqueline Schleppnik Garcia, and I'm honored to serve as the executive director of the Diamond Bid.

I'm also the secretary of the Bid Alliance for San Diego Small Businesses, and I really want to make sure that everybody knows how important it is that we need these SPEP dollars for our business outreach, especially with the growth that we're seeing in the Diamond District, which we are all so excited about.

These this money helps us create small classes for our businesses, create resources for the small business, community festivals.

We're creating uh we have space making areas like the Brooks Huffman Plaza, which is getting cleaned up on uh um bi weekly basis right now.

Uh, we're cleaning up the corridor of Euclid Market and Imperial with our new advisory board that's been on for over a year now, and we're excited to see all the change because the community is being a big part of it.

So I just want to say thank you for your support.

We look forward to making more improvements in the Diamond District in the Diamond Bid, and thank you for supporting our small businesses in San Diego.

It's very important in these times where a lot of our community is struggling, and we want to make sure that we're there to help the growth of San Diego small business community.

Thank you so much for your time.

Have a wonderful afternoon.

Thank you.

And Chair, this concludes public comment on item four.

Thank you very much.

The members of the public for your participation on this item.

Uh I will go ahead and move approval of the item.

Thank you, staff, for your good work year in and year out uh as it relates to the business improvement districts.

Uh, we know that our departments work closely uh out there and that these are helping small businesses and workers in the communities.

So I appreciate your good work.

That'll conclude my motion.

Do I have a second?

I see a second from Councilmember Foster.

Uh, not seeing any comments or questions from my colleagues.

We have a motion and a second, and I will call the roll.

Question Lee.

Yes.

Yes.

Councilmember Foster.

Yes.

And I vote yes as well.

It passes unanimously with all four members present.

Thank you.

Natalie, let's move to item number five.

Thank you, Chair.

Item number five, establishment of a cannabis social equity and economic development program.

And if you've joined the oh, I'll just go ahead and say if you join the Zoom webinar, please call 1669 2545252 with webinar ID 1603406084 pound if you'd like to provide comments on item five.

Thank you, Chair.

Thank you.

Uh uh Councilmember Foster, would you like to introduce your team or should I introduce them?

Uh yes, I will introduce them.

Um thank you, Chair.

If it's okay, I'll go ahead and get started.

I do have some quick comments before I turn it over to my team.

Yes, sir.

Thank you so much.

Um again, thank you, Chair Campillo.

Um, for decades, the war on drugs has disproportionately harmed communities like those in District 4, destabilizing families and limiting economic opportunity.

A 2021 court order reduced approximately 20,000 felony cannabis convictions in San Diego County and dismissed about 1,000 misdemeanor cases, just illustrating the scale of past criminalization.

Bringing attention to this issue, issue is long overdue, and I am proud to bring this conversation before committee today.

If we are serious about equity, then we must be serious about repairing the harms that led us here.

Um, with that, I will turn it over to Tiffany Harrison, Deputy Chief of Staff for Council District 4, and uh Jacqueline Kennedy, um, senior policy advisor to go over the presentation.

Thank you.

Thank you, Councilmember, and Chair will need only um 10 minutes.

Okay, thank you.

Um, well, good afternoon.

My name is Tiffany Harris, and as council member said, happy to present this.

I'm here today on the establishment of cannabis social equity and the economic development program.

Next slide.

In partnership with the mayor's office, today's item continues the process of establishing an ordinance within the city of San Diego that will establish a cannabis social equity economic development program.

While our office is presenting this for the first time today, we are not starting from scratch.

This item will review the work done within the past seven years to create a seed program, but it will also provide an overview of what we are reviewing currently and evaluating.

In 2016, Proposition 64 in California decriminalized recreational cannabis for adults over the age of 21.

The passage of Prof.64 encouraged different cities to look at ways to restore the harm caused by the war on drugs by creating cannabis equity programs.

Today, we are doing the same by continuing the work of creating a C program here in San Diego.

Next slide.

Below is some data identified within the City of San Diego's cannabis equity report, which I'll talk about later.

In 2010, the black arrest rate for marijuana possession was 716 per 100,000 people, while the wide arrest rate was 192 per 100,000 people.

Also, a national survey conducted in 27 by MJ Biz Daily found that only 17% of cannabis businesses have an ethnic minority in executive position.

And also in 2021, the Office of Business Research and Analysis, also known as OBRA, for the California State University, San Marcos, analyzed economic impacts of the cannabis industry in San Yo County.

Ober created a survey designed to understand which demographics demographics hold cannabis licenses in this county.

And the survey results found that 68% of the cannabis business license holders were white, followed by 14% Hispanic, Latino, Spanish, 7% black and African American, 4% American Indian, 4 Asian, 3 million Eastern.

And in addition, 87% of cannabis business licenseholder participants were male, with female business owners only accounting for 13%.

Next slide.

So I'm including the slide, and it is an excerpt from the Congressional Black Caucus Foundation, John R.

Lewis Social Justice Fellow.

Tatiana Hopkins, who did a report called the road to 2030 federal legislative solutions to social equity and booming cannabis industry, and including this illustration, just to show what it looks like to create or achieve the mission of decreasing disparities and outcomes for marginalized communities, and also addressing disproportionate impacts on the war drugs.

And they highlight this by getting to equity by looking at the industry, community justice and access.

So as you can see, the industry recommendation is to broaden opportunity to participate in cannabis industry for those affected by the war on drugs.

This includes license qualifications, social equity benefits, license requirements, and also providing funding as well as lowering the bar barrier regulations.

Other areas are community, empowering communities impacted by the war on drugs in the justice section, restoring the rights and providing opportunity for nonviolent cannabis offenders, and then last access, providing safe access to all adults without risk or legal injury.

Next slide.

In 2019, the then staff from Councilmember Montgomery Steps office and Councilmember Ward's office brought an item to E N IR to create a cannabis equity program.

The committee approved the action to create a draft resolution which recommended providing services, access to capital, community violence, and reduction programs and expungement.

The city attorney also conducted legal analysis, MS 59, and in it it recommended that the city may implement a cannabis every program that focuses on communities and individuals impacted by disproportionate enforcement of cannabis related crimes following the completion of a comprehensive independent equity study.

So with that direction, the city proceeded to conduct and produce a cannabis equity study on the direction of the Office of Race and Equity.

Next slide.

In this slide, it accounts for the item coming to ED and IR in 2019.

And it also shows towards the end of 2020 that the Development Service Department developed the cannabis business division to process cannabis land use entitlements, co-compliance activities, and provide related business support to authorized cannabis businesses.

It also in 2021, the city was awarded 75,000 grant that will help fund a cannabis equity assessment and support the development of a first ever cannabis equity program from the Go Biz Cannabis Equity Grants Program in the state of California.

Next slide.

So where we are at now in 2024, the grants funds were um returned to the state.

And during a vote in the fiscal year 25 budget on June 11th, 2024, Councilmember Foster committed to working with the mayor's office to bring a C policy forward.

And completing the ordinance and starting the program will make San Diego eligible for future funding from the state.

Next slide.

So briefly, what came before was allowing 36 additional cannabis outlets for eligible seat applicants, reducing some strict sensitive uses restrictions, and distance requirements, waiving or reducing licensing permitted and inspection fees, and also establishing a cannabis outlet seat overlay zone that would include a broad range of commercial zones within transit priority areas.

And we are currently evaluating again 36 seat licensing licenses, also reviewing ownership, transferability so that it goes from one seed uh owner to a future applicant, and also eligibility to ensure that uh folks are able to apply and there won't be any concerns with the equal protection law and commercial zones.

Next slide.

Outreach that has been done previously includes in 2022 during the creation of the cannabis equity program or cannabis equity report.

Night outreach sessions were held in each council district to collect feedback for the city of San Diego County Cannabis Equity Survey.

Also in 2023, the then cannabis held a series of workshops, which included workshops for stakeholders revisiting cannabis operators.

Now in 2026, outreach continues through community-led efforts, including initiatives like Road Up for Equity campaign, which supports cannabis equity and community engagement.

And we will show a short clip after this slide.

So proposed action today is request that the office of council member Henry L.

Foster III work with the city attorney's office, independent budget analysis office, and relevant stakeholders to prepare an ordinance that will establish the cannabis social equity and economic development program.

Um at the conclusion of the video, we're happy to take questions and thank you.

Almost everyone I know has a marijuana conviction.

People have been taken out of my life doing marijuana convictions.

So it's a big on my heart.

I am getting called, and together with Joanna when I represent the roller for equity campaign.

One thing that San Diego doesn't have is social equity in their cannabis program.

Not only for a regular cannabis market, but in particular for social equity.

Black and brown people didn't have safe access in their communities, and that was policy that was signed on to by our politicians.

Social equity is like we think about the person who gets the license, right?

We're not thinking about the opportunities they're gonna create after that.

This is more than just about the cannabis.

This is about this is about justice.

And rewriting the narrative that has no longer last time.

We've been at this five or three and a half years, and I'm just starting to see the people who are against us.

Thank you very much for that presentation.

Or public comments.

Thank you, Councilmember.

I'm going to turn this over to the Deputy Director of the Division of Race and Equity and the Office of the Independent Budget Analyst, Kim Desiman.

Thank you so much.

Kim Deson here, the director for Division of Race and Equity.

We are IBA's office will prepare official comments as the proposed action moves through this committee.

As the division director, this is a topic that wanted to say a brief comment and to acknowledge thank you, Councilmember Foster, for your continued advocacy to keep bringing this work forward.

Tiffany, I appreciate the timeline that you added to this slide deck around this conversation moving through from March of 2019.

It is now 2026.

And to Councilman Foster to the comment that you made around it's one thing to talk about equity, it's another thing to actually invest in addressing the disparities that we already know, right?

So I'm just here to say now that raising equity is in the IBA's office, we're prepared to continually talk about the equity implications to this topic, which includes robust involvement in this endeavor to collect community feedback around the impact to the world drugs on people of color.

So with that, briefly, I will just say this is as we move this item through.

You have to staff up the work to support this type of ordinance.

And so these are things that are important that we keep this work moving forward by way of saying it's not just the ordinance, but it's the operational staffing to make sure we can release the permits that's agreed upon.

And so racing equity most certainly um supports the continued work with this topic as the numerous hours spent within community talking about this topic to get some forward motion moving forward.

So happy to um address any other questions for race and equity, but want to point out that it's past time for this work to actually take forward and move it to address the harm that we see poignantly.

Thank you very much for that comment.

We will now proceed to the public comment.

Natalie, go ahead.

Thank you, Chair.

The public comment period for item five is now open, and we have received nine speakers lists from individuals in chambers, and there are 12 hands raised in the virtual queue.

We will begin with those in chambers.

And when I call your name, please come up to the reserve seats at the front of the room for better meeting management.

Scott Chipman, please approach the lecture and each speaker will have 1.5 minutes or minute a minute and a half.

And Scott, you'll be followed by Armand King, Miguel McCall, and Andrew Banner.

So uh please begin.

Uh Scott Chipman, Vice President of Americans Against Legalizing Marijuana and representative of cannabis industry victims.

Educating litigators.

I'm here to warn about the legal and financial risk associated with adopting a cannabis equity licensing program across the country, cannabis licensing schemes that prioritize prioritize applicants based on residency demographic factors or other preferential criteria are being challenged in federal courts.

When governments provide preferential treatment and licensing on grant programs, they risk challenges under the Equal Protection Clause, even well-intentioned policies that allocate economic opportunities using demographic racial or geographic proxies will trigger strict constitutional scrutiny.

The result is lawsuits, injunction injunctions, and costly litigation funded by taxpayers.

Several states have already experienced this.

Courts have halted cannabis licensing rollouts for months or even years while litigation proceeds.

During that time, cities incur legal cost, businesses remain in limbo, and regulatory systems become tied up in uncertainty.

If the city proceeds with a program that creates discriminatory licensing preferences or residency restrictions, legal challenges are highly likely to follow.

Our coalition is working with attorneys across the country evaluating these programs.

It would be nice to know what our time is going to be before we get here so we can prepare remarks.

Is this always a one-minute 30?

Or is sometimes two minutes, sometimes thank you.

Armand King.

Hello.

I'm speaking as someone whose community lived through the consequences of cannabis prohibition, arrest, barriers, and lost opportunities that lasted long after the charges were gone.

Today, the industry that once harmed our neighborhoods is generating significant wealth, yet many of those most impacted are still locked out.

San Diego has the opportunity to change that.

A meaningful social equity program will create real pathways to ownership, economic opportunity, and new revenue for the city that continues to talk about budget challenges.

I urge you to take action and ensure that legal cannabis industry in San Diego reflects fairness and access, not policies shaped by high pace, high-paid lobbyists whose priority is protecting the profits of those who are already on top.

Here we go.

We have a second chance to do this right.

Mr.

Campillo, we have a second chance to do this right.

Mr.

Lee, Miss Campbell, Mr.

Foster, thank you.

Deja vu.

Been doing this for nine years.

How long do the people cry for your help?

Let's quit bowing down to these lobbyists and these lawyers who are doing their job respectfully, and it's not for the people.

It's for the people they represent.

Come on, y'all.

Round two.

Thank you.

Thank you.

McGain McCall.

Gila.

Andrew.

Thank you.

Andrew Banner.

And you'll be followed by Michelle Caborkian, Robert Wood, and Gina Austin.

If you can please make your way to the front of the room, good afternoon, Council members.

Uh thank you, Councilman Henry Foster, for championing in this and your staff and all the council members supporting this.

My name is Andrew Bañez.

I'm 39 years old from District 4, father of a six-year-old and small business owner.

I'm also the president of the Filipino American Chamber of Commerce, Greater San Diego.

I know it's a sensitive subject, but I also served my community as the resource coordinator for the FEMA funded 2024 San Diego Flood Disaster Case Management Program that we just complete actually in February.

And I'm also working on the reconnecting community sound the San Diego National City Green Corridor Project of bringing back 57 acres and giving it back to the community.

And I say all that not to um not for my ego, but to give you a sense of who I am and my mindset and what I would do for my community.

And it didn't doesn't matter if I was labeled a felon, it doesn't matter I went to jail, but none of that helped me back in everything I did for my community.

Um working on this for um years, and I understand this is a process, and this is one step forward to righting those wrongs.

Um, as someone who feels as if in the past, as um as someone who pioneered this industry and frontlined it in the city of San Diego.

Um I'm looking forward to being a kind of social equity applicant in the city of San Diego.

Thank you.

Thank you.

Michelle Good afternoon, Council President, Council members and city staff.

Thank you for the opportunity to speak today about the social equity cannabis program.

My name is Michelle Cavorkin.

I'm here today in support of the social equity program.

I believe communities that carry the consequences of cannabis prohibition should not be excluded from the opportunities created by legalization.

For decades, the war on drugs created consequences that last far longer than any arrest.

Across California, hundreds of thousands of people were arrested for cannabis-related offenses before legalization.

Even today, many people still face barriers to employment, housing, and financial instability because of the long-term impact of those policies.

Today, cannabis is legal and has become a multi-billion dollar regulated industry in California.

Legalization changed the law.

Equity ensures opportunities change with it.

If cannabis is now legal and generating economic opportunities, then fairness means ensuring that opportunities most impacted by prohibition are not excluded from the participating in the legal industry.

When equity participants succeed, the entire city benefits.

That means more local businesses operating legally, more jobs created for San Diego residents, and tax revenue supported essential city services and community programs.

San Diego has opportunity to lead by showing legalization can be implemented.

Thank you for your time.

My name is Michelle Coborkian.

Thank you.

Robert Wood.

And you'll be followed by Gina Austin, Edward Bautista, and Brian Gooden.

How are you guys doing?

I'm Robert Wood.

First of all, I'd like to say thank you, Henry Foster.

Great job.

I love what you're doing.

The reason I'm here today is because I'm an adjunct professor at Adam State University.

I'm on the board of directors for the Prison Scholar Fund.

I'm also a violence interrupter with Safat Outreach right here in the city of San Diego.

And the other thing that I am is somebody who has been punished by the prohibition that cannabis had.

I served two years just for cannabis.

Something that's legal now.

And now that it's legal.

Me, my community, the people who have been harmed the most by it, should have the opportunity to reap some of the rewards of it.

In addition to that, the city of San Diego, where many people got harmed by it, deserve the revenue inflow that social equity cannabis can bring.

The people from social equity cannabis aren't the big corporations.

They aren't people living outside of this city.

They are people that live right here in the city, live right here in the county of San Diego, and they're the ones who should be running the cannabis industry in San Diego County.

They're the ones who are going to take the tax dollars, put them back, and who are going to make sure that there's a safe supply of cannabis.

If you like the people, if you like the city, and if you love social equity, make this happen.

Thank you.

Thank you.

Gina Austin.

A little bit taller.

Good afternoon, committee members.

My name is Gina Austin, and I'm a land use attorney who's been in and working with the cannabis industry since 2013.

We work with clients in over 40 jurisdictions in California in over five different states.

So we've seen all of the various equity programs, how they've succeeded, which ones have failed, why they've failed, and we understand that process.

Meaningful participation, allowing people to who have been marginalized in communities from the war on drugs to participate, means looking at all of the options and all of the opportunities that are out there.

Those include business training.

They include incubation in the licenses we already have that can allow for that, the manufacturing production facilities.

It includes expungement services, technical assistance.

All of these things are opportunities that need to be considered when you're considering a social equity program.

Please do not limit an evaluation of a program to just an issuance of licenses.

Thank you.

Thank you.

Edward Batista.

And you'll be followed by Brian Gooden and Blair Beatman.

Good afternoon, uh Council Member.

Good afternoon, Councilmember, committee member, city attorney, everybody that's present today.

Thank you for allowing me the opportunity to speak.

Cities across California and across the country have already implemented cannabis social equity programs that create real pathways for participation, economic mobility, and fairness in this industry.

San Diego is one of the largest and most influential cities in the state.

Yet we continue to fall behind on an issue that should have been addressed years ago.

It was truly, or yes, if we truly believe in fairness, entrepreneurship, and inclusive economic growth, then San Diego should be setting the standard, not watching other cities lead the way.

A well-designed social equity program would not only allow correct past to correct past harms, but also open the door for local entrepreneurs and community members to participate in an industry that is already generating significant revenue revenue.

The community has waited long enough.

I urge the council to take meaningful action and move San Diego forward by making real equity in the cannabis industry a reality.

Thank you.

Thank you.

Hello, council.

Thank you for this opportunity to speak before you.

I'm my name's Brian Gooden.

I'm a native San Diegan, San Diego State alumni, local Morris High School graduate.

I'm from Southeast San Diego.

And in case you haven't noticed, there is a liquor store on just about every other corner.

And those funds do not go back to the community.

Those funds do not help people who look like me.

And unfortunately, I did 18 months in prison because of a cannabis conviction.

Now we have the opportunity to turn that around, and this is a life-changing acquisition that would benefit families, communities, you know.

And most of the people that are pushing this forward have a lot of experience in this business.

And why should we let big business come in and um be tutored by us only to benefit financially and not benefit us?

So it's in your hands, and um I think you guys will do the right thing.

Thank you for letting me share.

Thank you.

Our final speaker in chambers, Blair Beekman.

I think I'll try this high mic today.

Hi, Blair Beekman.

Uh, thank you.

Um there was an item brought here about a year ago now.

Um, working on uh cannabis um within uh cannabis stores within local neighborhoods in San Diego.

Um it was voted on, it had a series of uh proposals and fees that were just kind of run-of-the-mill standard.

We raised fees, you know, all that bring them a roll.

Councilperson Foster at the time asked some really interesting questions, I thought, uh, about the future of how we're gonna talk about this issue.

That I think is when it first started talking about these ideas of equity, uh, cannabis equity here.

And it's nice.

Uh nice to it was nice to hear that.

Uh nice to thank you that it's coming out now and what you're working on.

I've come from uh the Oakland and the San Francisco Bay area.

They were having difficulties with equity issues too, way back in 2017 and 18.

They worked really hard to bring in women to bring in um a really good culture that addressed, you know, not just handing out licenses, but I think I think what was stated is just a whole way of working that was really uh interesting.

I think they're obviously a model for yourselves now, the city of Oakland, and we all look to them.

Uh good luck, but you guys can be developing yourselves.

A lot of hard work, and and like Oakland, you can come up with some good stuff.

Good luck.

Thank you.

Thank you.

This concludes in-person public testimony.

We will now move to the virtual queue.

There are 12 hands raised in the virtual queue, and I've started the five-minute timer.

Phone number ending in 7234.

Please press star six and begin.

You'll have a minute and 30 seconds.

Good afternoon, economic development and intergovernmental relations committee.

Chair Campillo, my name is Terry Ann Skelly.

I'm a parent and public health educator.

Earlier this week, I spoke to the increase in adolescents who are experiencing health problems associated with their smoking and their vaping.

So today's proposal is confusing to me since marijuana products are most often smoked or vaped.

The tobacco industry has strategically targeted black Americans for decades, dramatically affecting their health outcomes, and now the marijuana industry is doing the same thing.

Truth Initiative, a premier nonprofit recognize the situation and joined the NAACP and announced a partnership to address the industry's exploitation of black communities and empower individuals to quit.

Their recent fact sheet states, and I quote early and heavy marijuana use is linked to a lack of economic and social attainment for young people.

Early and heavy marijuana use is linked to increased risk of psychiatric disorders, including psychosis, depression, anxiety, and other substance use disorders.

Frequent smoking of marijuana increases the risk of lung issues such as bronchitis.

This uh this is the wrong program to improve the health outcomes of vulnerable populations and communities of concern.

Thank you for hearing my concerns this afternoon.

Thank you.

Our next speaker is Sugar Bear.

Sugar Bear, please unmute and begin.

I've asked you to unmute.

Okay, can you hear me?

Yes.

Oh, okay.

Thank you.

Um, good afternoon, council members.

Um Alfonso Huey, I'm sorry, I didn't even know that it's a sugar bear my bad.

But I'm Alfonso Huey.

I live in district or uh many residents believe that cannabis industry in San Diego has been shaped more by expensive lobbying than by community input.

So small entrepreneurs, community advocates, and people from impacted neighborhoods often do not have the financial resources to compete with large companies that can hire lobbyists and legal teams.

A strong social equity program helps restore balance by ensuring that policy decisions create opportunity for everyday residents, not just those with the deepest targets.

And you know, most a lot of people use cannabis for medication.

People seem seem to forget that.

And um, you know, I use it myself for medication.

And um, I just wanted to, you know, say the positive outcomes that we will get out of it if given the chance.

Thank you for your time.

Thank you.

Our next speaker is Becky Rapp.

Becky Rappett, please unmute and begin.

Good afternoon.

Uh, my name is Becky Rath, and today I urge this committee to not move forward with the cannabis social equity program.

We need to pause and consider the bigger picture.

The seed program has failed in other jurisdictions, and there's no evidence it would succeed here.

Now is not the time to experiment with taxpayer dollars, especially as the city faces another challenging budget year.

Last year, the city had to return the allocated 1.8 million dollars in combined state and local funding due to budget limitations.

Our resources are even more stretched now, and we cannot afford to take any chances.

It is also critical that we limit the presence of marijuana in our city.

We know more regarding serious public health consequences, particularly for youth, and we should focus on policies that reduce exposure and availability rather than encouraging even greater access.

There are far more effective ways to support marginalized communities without promoting substance use.

Investments in community developing development projects, job training, internships, education, and mentoring programs provide measurable, sustainable benefits for underserved communities.

These initiatives have a proven track record and represent a far better use of public resources.

Thank you.

Thank you.

Our next oh, the five-minute timer just concluded.

We have eight hands remaining in the queue.

We will take no additional callers after these eight.

Grant, please unmute and begin.

You'll have a minute and 30 seconds to manage.

Thank you.

Good afternoon, Chair and members of the committee.

My name is Grant Tom, Secretary of Treasurer of the United Food and Commercial Workers Union, Local 135.

We represent over 11,000 union members of San Diego and Piero Counties, including workers in the legal cannabis industry.

UFCW, we fully support the social equity programs that provide a path forward for individuals from communities of concern to participate in the cannabis businesses.

But it is important that any cannabis retail programs do not operate at the expense of employment standards or public health and safety.

As such, we urge the city council to ensure the following safeguards are addressed in the drafting of an ordinary ordinance to protect the integrity of the social equity program.

Number one is ensure the program's regulations do not directly or indirectly diminish cannabis worker employment standards.

Two, ensure delivery licensing and requirements are consistent with the existing requirements for legally permitted retail stores currently operating in the city.

Three, ensure any updates to the city cannabis regulations do not compromise public safety and are consistent with state regulations.

Four, ensure compliance is consistent with the city's existing regulations for legally permitted retail stores.

Five, ensure licenses only be transferable to individuals who independently qualify for social equity programs.

Ensuring benefits remain with the community.

It was designed to support you.

This does conclude your time.

If you have additional comment comments, please email councilcommittee at Sandiego.gov and we will publish those.

Madison, please unmute and begin.

Hi, thank you.

I'm also here in opposition to the seed program.

Let's first ask an important question.

Does expanding participation in the cannabis industry truly strengthen vulnerable populations?

Cannabis is a substance that weakens, not strengthens our city.

Creating new permits and lowering barriers to entry into a commercial cannabis market does not erase the public health realities associated with this product.

Today's high potency cannabis is associated with elevated risks of psychosis, depression, anxiety, and impaired cognitive development in adolescence.

If we are serious about equity, don't forget about the long-term mental health and economic consequences for the very communities this program intends to help.

There could be some big regrets down the road when these marijuana businesses do more harm than good.

The seed program notes that the most disadvantaged communities already face high burdens of poverty, pollution, asthma, and heart disease.

Economic opportunity absolutely does not need to be tied to increasing access to a mind-altering substance.

I respectfully urge you to reconsider advancing this ordinance and instead prioritize policies that reduce barriers to education, entrepreneurship, and health without expanding cannabis access.

Thank you.

Thank you.

Our next speaker, Ty Freeman.

Please unmute and begin.

Thank you so very much.

Uh my name is Dr.

Tyrone Freeman.

I represent uh over 2500 social equity license holders in the state of California as the head of the California Minority Alliance.

And I want to first say that what we often hear in this and what you've heard today and presented are false narratives.

The reality is that cannabis exists in the city of San Diego.

It exists because it's fronted by illegal operations.

The fact of the matter is that increased use of cannabis is just a sense of counting, not a collaboration between granting licenses.

Meaning that once it became legal, more people expose the fact that they used it when it was illegal, and it no direct coalition exists.

Uh and that between uh growth in dispensaries and growth and usage.

I want to first bring your focus in these next remaining minutes to the economic benefits.

Today I'm asking you to move forward with this small social equity re retail licensing palette program and a structure physically responsibly, measurable, and cost neutral to administer.

Here's the physical reality.

The city's cannabis tax is now 10% on retail tax receipt, and it remains an important general fund revenue for the city of San Diego, but it also is volatile.

For 2025 year, cannabis tax revenue was about 16.7 million for 2026.

It indicates that cannabis tax forecasts is down.

This is tied to market conditions, including saturation and competition.

My economic point is that stabilizing and growing revenues by expanding illegal tax breaks overcomes the barriers that we face in any business market relative to marketing conditions.

Please submit a comment to council committee at San Diego.gov.

Adriana.

Adriana, I have asked you to unmute.

Please begin your comment.

Adriana, I'll give you one more opportunity.

Hello, good afternoon, council members and everyone else participating in today's meeting.

My name is Adrian.

And I'm here in support of the social equity cannabis program.

Cannabis already exists in our community.

The real question before us isn't whether people are using it, it's whether it will remain in an unregulated market or be regulated responsibly to protect consumers.

This program means our community will have more lab tested products, accurate labeling, and safety standards.

Without regulation, people are left purchasing untested products from the illicit market with no oversight.

I also want to address concerns about safety.

What regulation actually does is improve safety by replacing illegal untested products with tested and controlled ones.

Regulation also helpings weaken, also helps weaken the illegal market because consumers naturally choose safer legal products when they're available.

For many pro uh for many people, cannabis is also medicinal, helping manage chronic pain, anxiety, sleep disorders, and symptoms of serious illnesses.

Many of these products can be used topically or even eaten or used in drinks rather than being smoked.

Thank you.

This does conclude your time.

Our next speaker, Rashida, please unmute and begin.

Great day, council members.

Um, my name is Rashida Hamid, and I'm actually in support of bringing cannabis equity, social equity to Sandy, the city of San Diego.

I'm speaking as someone from a community that lived through the consequences of cannabis prohibition, arrests, records, and barriers that follow people long after our cases were over.

Today, the industry that once criminalized our neighborhoods is generating significant wealth, yet many of those impacted are still shut out.

San Diego, America's finest city, has an opportunity to change that.

A meaningful social equity program would create real pathways to ownership, economic opportunity, and a new revenue for a city that continues to talk about budget challenges.

I urge you to ensure that this industry reflects fairness and access, not policies shaped by lobbyists that are protecting the profits of those who are already at the top.

Thank you.

Thank you.

With four hands remaining in the queue, we will go to Judy Strang.

Please unmute and begin.

Good afternoon, committee.

Thank you for letting me share my questions and concerns.

As I understand it in the city, the city of San Diego has a population of six percent black Americans, and seven percent own pot shops.

So it would seem they are already represented in that marketplace.

I also understand that there's a possibility of 38 pot shops, but at this point there's only 25.

So I'm wondering, is that because the businesses are generally failing?

I think what we understand is that the market is shrinking and that there is a saturation.

So why would it?

Why would we want to provide communities of concerns an opportunity to participate in a marketplace that isn't doing well?

The LA Times just did an article regarding the many marijuana businesses who are unable to pay their taxes.

And I think this is an example of the shrinking of the marketplace.

If we're going to use new money for our budget to assist communities of concern, and I see no problem in that, let's spend it differently.

Let's add mentorships and tutoring and scholarships.

Let's broaden the perspective of what we can provide to our communities of concerns and those who have perhaps been harmed in the past.

This seems like a wider use of wiser use of money than bringing them or trying to bring them into a marketplace that is not doing well at this particular time.

Thank you.

Thank you.

Thank you, uh Joyce and CD3.

Uh Chair Campio.

I would really you probably were going to do this, but I'll say it anyway.

I would appreciate any comment you would make on the legal climate that is present in this uh topic.

So the only way I can speak on this item is from the big picture view.

And I want to thank Kim.

Thank God that Kim is on board now.

Because Kim, you said something this morning.

Oh, I hope I can find it.

Uh, you said something this morning, which is like here's the big picture.

A cultural shift, the city needs a cultural shift.

That's huge.

And number two, what I want to say, I recently had a poignant conversation with a black man.

And he shared the struggles he faces in San Diego daily.

And I had a big sadness into me.

So I don't know what to do with this.

I am I I really can't say on anything on this, the yes and no, and all of that.

I I'm sorry, but I just can't.

But I want you to trust that we're beginning the real process.

Thank you, Kim.

And thank you, everybody, the IB and everybody's on this board with this big shift.

Thank you.

Thank you.

Our next speaker, iPhone, please unmute and begin.

Hello.

Um afternoon, council members.

I'm calling in today on the urge the city of San Diego to move forward with the real meaningful cannabis social equity program.

When legalized legalization was passed, communities were disappointed.

Disapportionately horned by the war on drugs, was promised opportunities to participate, participating in a new legal industry.

Unfortunately, that promise has not yet fulfilled the San Diego in San Diego.

Social equity is about fairness, accountability, and making sure that the people who were most impacted by the past enforcement policies have real pathway, have a real pathway into the legal market.

The time has come to San Diego for San Diego to correct the imbalance and move forward with the equality program that reflects the values of fairness and opportunity in our city.

Thank you.

Thank you.

Our final speaker in the queue, Sinara Velazquez.

Please unmute and begin.

Hi, my name is and um I want to say that I hope that it's that you do move forward on social equity.

This is free money from the state to create business incubators and to um also administer the bureaucracy associated with this.

So, you know, it it allows the city to have the funds to help small businesses build in the community, and that is a great opportunity.

I don't see any reason not to take advantage of it.

Uh someone mentioned that the market downturn, that should not be an excuse to continue to allow monopolies.

Whether the market is good or the market is bad.

I thought we lived in what was a capitalist system, a capitalist system says that the market, and in this case, in many cases, uh medical panic cannabis patients should determine who they wish to get their services from.

Just because we're in a downturn now doesn't mean we're going to be in a downturn forever.

So by allowing more people to have a chance to compete, you have more chance to give more people business opportunities.

Um, as part of the county social equity program, they include adult use education and youth prevention services.

Those are things that are part of the social equity money that the city of San Diego can get from the state.

So I I think this is a great opportunity to continue uh youth prevention awareness and uh adult safe use and to give young business people a chance to even try because to maintain a monopoly that's that's not uh in the best interest of the consumers or the business community.

Thank you.

And if you have just raised your hand for item five, the five-minute timer did conclude, but we will take your comment at councilcommittee at San Diego.gov and chair.

This concludes comment on item five.

Thank you to the members of the public for your participation and comments on this item.

We will now go to council member questions and comments and entertain a motion, and we'll begin with councilmember Foster.

Uh yes, thank you.

Um, Chair, and I just like to um take another quick moment to thank my team for all of um their work um that they have done thus far.

Um, also would like to thank everyone who provided public comment today um on this matter.

Um we have done a lot of work on this, but we still have a lot of work um to do.

I would also um like to thank the mayor for his partnership as we continue moving this item forward.

Um, and as I said, there's been a considerable amount of work done by the mayor's office um to get us to this point.

Um so I am truly appreciative of those efforts and look forward to continuing our collaboration.

Um, this item is important to me because it addresses the historical harms and injustices that have impacted communities of color like District 4.

The war on drugs has left many underserved communities disproportionately impacted and unable to participate in the cannabis industry today.

In 1990, black arrest rates reached over 255 per 1,000 residents, the highest of any racial group.

Hispanic arrest rates were nearly double those of white residents across multiple decades.

Arrests and convictions for cannabis-related offenses have deeply harmed and created economic barriers for communities like ours.

Those who have suffered under oppressive policies deserve not only to be acknowledged, but also to have tangible opportunities to participate in the cannabis industry.

This industry provides the opportunity to be a business owner and create general generational wealth.

And everyone, no matter what their background, should have access to that.

Now I will say this.

I truly think the city did a disservice by not being inclusive and addressing intentional harms of the past by not bringing an equity program forward when the city first adopted its municipal code for the regulation of cannabis.

So I am committed to ensuring the seed program is created so those impacted by the war on drugs here in San Diego have the same access that so many others already have across the state.

Again, I do want to highlight that this is a collaborative effort with the mayor's office.

We are not starting from zero.

My office is working with the mayor's team to take into account previous recommendations.

I share in comments made today that we must work to establish a program that is successful, and I am committed to do so.

I will be proposing 36 licenses under the seed program.

I will also be looking at issues issues such as ownership and transferability to ensure that conditional use permits transfer only to seed applicants.

I look forward to working with the city attorney's office, the mayor's office, the IBA, and city staff to bring this item forward.

For me, this is a matter of justice, repairing the harms of racist policies, opportunity, and also community resilience after being blocked from this industry for far too long.

Having said, I would like to move staff recommendation that the Office of Councilmember Henry L.

Foster III work with the city attorney's office, independent budget analyst office, and relevant stakeholders to prepare an ordinance that will establish the cannabis social equity and economic development program.

And so with that, I would like to say that I do appreciate the comments from our Department of Race and Equity as we continue to have equity conversations.

I think this is no better example of us doing the right thing.

It's one thing to talk about equity.

We do it quite often.

When we celebrate black excellence, we find ourselves in celebrating Black History Month and celebrating Juneteenth.

Oftentimes my colleagues are very eager to stand on the stage to provide congratulatory comments.

But now it's time to move past that.

And it's time to write a wrong.

And the city of San Diego did a wrong by bringing a cannabis program forward without being inclusive.

And so I find it very interesting that we have a group that wants to come to the podium today and talk about strict scrutiny and to talk about constitutional rights.

Thank you for the opportunity to bring this item forward, and that will conclude my comments.

Thank you, Councilmember Foster.

We have a motion on the floor.

Thank you, Chair.

Uh, I'll start by seconding the motion, and um uh this is not a new discussion for many of us.

Uh the council has had these discussions around seed before, and I uh tend to agree with councilmember Foster that I think what the the biggest harm we did was establishing a policy from the very beginning that did not have uh seed in mind.

Um and to that end, I I think that has created challenges as well as as moving forward.

So I look forward to as Councilmember Foster explores um explores and ordinance.

I know we've had a number of conversations uh in that process that I think will be important as we move forward.

Um I appreciate the IBA's analysis and report as well.

I think last year when uh the council agreed to raise the business tax uh by two percent.

Um I think I had noted back then that I was a bit concerned that based on what we've been seeing uh that we would not achieve the revenue assumptions that um were projected from just a 2% increase.

Um, and I think that does say something about where uh the market is, and that data I think continues to be important in terms of how we move forward, and so I would certainly encourage my colleague to be thoughtful about how a program is structured to ensure exactly what you said that it actually is successful, uh, because I think that would be important.

I know in that discussion last year as well, there was some discussion by the council about other areas of exploration, uh, including broadening our efforts to combat the illicit market as well as to recover revenues from other currently delivery services that are running that that do not pay anything into our um San Diego system.

And so I wanted to ask if there was any update in exploring how the city would better confront those issues.

Thank you, Councilmember, for the question.

Chris Ackerman with Mayor Glory's office.

Um there are several um efforts underway right now in terms of how we can improve our court enforcement and police enforcement of those issues.

Um and we'll be um circling back on that soon.

Okay.

Um I would look forward to hearing an update on that front, just because I think at some point those are also revenue generation opportunities for the city.

Um, and as much as we made that increase last year, I am a bit concerned about where kind of position we've put the entire market in and would want to basically want to ensure that as a region that we're going to be successful if we move forward.

So thank you for that update.

And that concludes my comments.

Looking to the chair for the chair, but sir.

Yes.

Still in the same direction visually, right?

Thank you, uh Vice Chair Lee.

There is a second on the motion, and we now will go to Councilmember Campbell.

Thank you very much, uh Chair.

Thank you for the presentation, and uh thank you for all the comments of my colleagues.

Um as the city is facing 120 million dollar budget deficit, I can't support this action.

I understand the action today is just to request that a team be established to look into making more cannabis permits, actually doubling the number of them from 36 to twice 36 available in the city.

I at this moment prefer city resources be focused on preserving the city's core programs and services for city residents.

It's been well reported that the current legal cannabis retailers are facing tremendous challenges because of the illegal market.

The state needs to rein in the illegal market competition before any discussion of expanding the city program takes place.

And lastly, the staff report notes that the IBA will determine an analysis of the fiscal impact of expanding the cannabis program.

And I would like to see an analysis of the fiscal impact before any other actions are approved.

I would hate to see an equity program in which I totally believe in equity.

And I would hate to see a program established that only leads to business failure for those involved.

And so I think it's it's very important that we uh consider that.

And these are the reasons that today I will know on this item.

Thank you.

Thank you, Councilmember Campbell.

Uh do uh we have a motion and a second on the floor at this point.

Um first I'll start by thanking uh councilmember Foster and Ms.

Harrison for your work on the item.

Uh I appreciate the opportunity to weigh in and provide feedback here early in the process.

Uh the idea that the city could create a cannabis social equity program has been explored at length before.

And here's an opportunity to take the lessons learned from the previous versions, the previous work done before, and learn from those examples and other examples throughout the state.

Uh looking at other cities, there are significant lessons that we have to learn from.

Uh we know that when there's only a focus on licensing without the support, that means financial sus sustainability it takes to enter into a market, a market that all data shows is uh not uh thriving at this moment, uh, or the economic stability of the industry as a whole, uh, that's not taking a look at the entire picture.

Uh so I appreciate the United Food and Commercial Workers uh calling in today and providing feedback since the workers of this industry uh should really be at the core of any proposal.

Uh what would be most helpful in my decision making as a committee member would be to return the concept to committee uh uh with council member foster's uh research, his team doing the work uh based on uh what he's talked about today, uh, so that we can see what the potential options or phases of this could look like, similar to how the county presented their program development.

Uh if the goal is to develop the sustainable program, uh therefore I would request this item come back to committee when ready prior to going to full city council, uh, so that we can be confident that the program will be successful and the data backs that up uh before it goes to full city council.

Um much like councilmember Campbell just said, setting folks up for failure is the last thing we want to do, and I know no one wants to see that happen.

It's really important to me to see the industry and labor involvement in the proposal, engagements with other jurisdictions, and of course, funding feasibility, staff capacity as well.

Uh, two things I do want to just say directly as it relates to particular components that were in the presentation.

Um my initial impression first is that creating 36 licenses uh doesn't seem economically justifiable.

Um seems obvious to me that this would not be economically sustainable, not supported by the public, and creating 36 licenses without financial and economic justification and what that would mean to the market is is risky.

Um so I need a higher degree of certainty from the economic perspective before we agree to advance 36 licenses and figuring out what that right number is.

Um so that's that's one point I'd like to make about one specific uh bullet point that was uh fleshed out in the presentation.

The second thing is something that's come up a lot, which is license transferability.

Um if that's not addressed, we're gonna see scenarios where the licensee uh could sell their business or license to non-qualified entities, which I know is not the goal here, right?

Uh part of supporting local industry is keeping the licenses local and flipping licenses needs to be avoided.

Uh and as we're well aware, we're in an incredibly difficult budget environment.

Uh I appreciate uh the points that council member Campbell said.

Uh I think that given all the research that's been done, uh, when we think about fiscal sustainability uh for an industry that could help us on our own budget items, uh, if it were successful, that would be good.

So I think that we shouldn't necessarily put an idea on pause, um, but we do have to make sure that what policy is created out of council member foster's research and later uh proposal um does have fiscal sustainability at the front end.

Uh otherwise we risk defaulting again on a proposal um and a program.

Uh lastly, I think this idea pairs really well with the cannabis delivery licensing and enforcement policy that my office has been working on.

Um, if we can strengthen enforcement against unregulated retailers, the market will stabilize.

Uh, we will be working towards advancing equity outcomes because the economic indicators of the industry will be improving.

So I look forward to that as well.

Uh so uh with that, I look forward to hearing the proposal as it develops, uh hearing from more stakeholders uh on the uh very important data that will go into justifying the exact nature of the specific planks of the proposals, uh, and I will uh support the item moving forward today.

Uh at this point, do we have uh I don't know if anyone's gotten back on the lights uh for any further comments, but seeing none at this time, I will go and call the roll.

We have a motion and a second.

Uh will you cast uh council member foster are you back on the lights?

Yeah, yes, if I may.

Absolutely, sir.

Yes, and and and thank you.

And again, I just want to note that and and remind everyone as part of their presentation.

Um my staff did reference the prior resolution that was passed by the city council regarding a um equity program.

And so it is not the intent that the C program is only a component of licenses.

And I want to be very clear about that.

Um I I think um what I will say is it's unfortunate that there was a decision made to pause the efforts around the program, specifically returning the dollars that we had to return.

And so again, I'm going to go back to as we receive feedback, no different than the correspondence that we receive from the attorney.

Um the reason why certain things didn't happen is because we did not move a program forward, and that money was returned.

And so again, I'm going to go back to the comments that were made earlier.

If we are serious about equity, here is an opportunity.

Here's an opportunity to do what's right.

Um, I also look forward to working with you on the uh delivery program as well.

Um, I know that there have been um significant feedback that that uh came in um from various stakeholders, and uh just want to make sure that um as we move these items forward, um, that we do collaborate, we do work together and make sure that our intentions um are noble on all sides of this as we move forward.

Um so again, I do appreciate the opportunity.

Um I look forward um to the work that this will entail.

We are working closely with the IBA.

And we do plan to return back to committee to have a robust conversation.

And I am committed again to create a successful program as I think my people if I can just speak frankly.

Um than upliftment and support.

And so we're going to get this done and we're going to make this happen because I think it is the right thing to do.

So thank you.

Thank you.

I will now call the role.

Yes.

Councilmember Campbell.

No.

Councilmember Foster.

Yes.

And I am a yes.

Thank you, everyone, for that.

Very briefly before she leaves her seat.

I know that Jacqueline Kennedy is there from the District 4 office.

Just wanted to say I'm sorry I missed your last day.

And for those who don't know, the district four and the district seven office are right across from each other at City Hall.

And Jackie, my team appreciates you.

I appreciate you your kindness and partnership and collegiality.

And we got a motion passed on your last day of work.

So that's good work.

So we will wish you well in your endeavors and thanks for your service to people in District 4.

Item agenda number six.

Let's please introduce it.

Item six, 2026 state budget and legislative update.

Chair.

Sorry.

I will hand it over to our director of government affairs with the city of San Diego, Mr.

Walt Bishop, and our state lobbyist for Platinum Strategies, Moira Top.

Go ahead and let's know how much time you need and you may begin.

Thank you, Chairman.

We'll need 10 minutes today for our presentation.

Very good.

Thank you, Chair Campillo and honorable members of the Economic Development Intergovernmental Relations Committee.

We're here to provide our biannual update on the state budget and the state legislative session, which is kicked into high gear.

Joining me today as the chair mentioned is our state lobbyist Moyer Top, and I'm going to hand it over to Moyer to take you through today's presentation.

Thank you, Mr.

Chair and members, and thank you for allowing me a few minutes to give you an update for the year for the beginning of the year.

We're just starting to get underway.

Starting off with the state budget, the governor, of course, announced his proposed budget in January.

There wasn't much in it other than just kind of paying the bills, not a whole lot of new initiatives.

You know, we're at 280 billion dollars in general fund, but when you total all funds that the state um expends were uh over half a trillion dollars.

So it's a big budget.

Um I think most noteworthy though is that revenues continue to be strong.

We continue to see us breaking projections, um, which is good, but of course, expenditures both from a uh a workload perspective as well as dealing with the federal cuts and having to backfill behind those have caused uh revenue uh or excuse me expenditure pressures in that way.

Uh May revision will be out in May, uh May 15th or so, and so I think that's when we'll see some more significant policy initiatives from the governor.

Um as we focus on 2026, we remain focused on these uh core city priorities that I think you have dictated through the platform.

Um we work strongly with our uh with our great San Diego delegation of members.

We have a broad uh cross-section of members who are very helpful for the city's interests and uh focusing in as well on these four uh core city priorities.

Uh from a legislative and bill perspective, um, we've seen about 1,800 new bills, surprisingly, even though that number is huge.

It was uh it's it's a significant reduction in the number of bills we've seen in recent years.

Usually we're about the 23, 2400 uh mark.

Um we see the general themes again, a lot of housing bills continuing, um, a lot of federal reaction reaction bills kind of across the board from health care to education to everything in between.

Um, spot bills, bills that are just intent bills, they'll be filled out in the next I'd say four or six weeks.

So that's when we'll really start to see what um uh what the legislature was gonna focus on in 2026.

It was important for him to get up to Sacramento to really engage the legislative leaders in our delegation on our priorities for the year, ensuring that we're getting our fair share of funds, especially in the homeless space, and really reinforcing those strong partnerships we have.

So we had a good meeting in January.

We look forward to continuing the those dialogue, that dialogue on those items with leaders and our delegation.

So moving to some of our specific topics of priorities, of course, homelessness remains one of our highest priorities.

So it is identified, and they did keep their word.

Senator Blakespear, our own senator, has led the efforts on a lot of this.

SB 569, I do want to note is the bill, if you remember from last year, is sponsored by the city.

It did not pass last year, so we continue to work on it and are hopeful that we can get it across the finish line this year.

Senator Blake Spear does have another bill in the interim shelter capacity space.

It's a spot bill right now, so we look forward to working with her office to see how that bill rounds out and hopefully receive maybe a longer term funding stream for homelessness.

And behavioral health remains something that we continue to focus on.

Again, Senator Blake Spear has been a leader is a leader in this space.

The governor just recently announced some streamlining and enforcement initiatives for the care court.

So again, we continue to focus on that as an important component of our homelessness and behavioral health initiatives.

Like I mentioned earlier, housing continues to be a high priority of policy initiative for the legislature.

You'll see that the legislature is going to consider a housing bond to be put on to the 2026 November ballot.

Now both of those bills reflect a 10 billion dollar bond.

It's we haven't seen a housing bond in a number of years.

Obviously, there's a lot of pressure to put a lot of different things on the ballot, especially for some additional bond capacity.

So we'll uh see how that shapes out.

Um if you remember the REAP program from a number of years ago, um it has been a successful program.

San Diego has benefited from the REAP program.

Um we have some legislation in that space as well.

And then a number of policy changes, um, some good, some bad, um, that we're engaging on.

Um Assemblymember Patel, again, a member of our delegation, um, has some uh legislation to promote mixed-use development.

Um, assemblymember Ward, a lot of our members are very active in this space, which is great.

Um, he uh has a uh a substantive bill to ensure condominium liability reform is enacted to increase litig uh liquidated damages for breach of contract.

It'll help promote the development of condos, which is kind of that missing middle we see a lot.

Um then we uh we have seen that Senator Weiner is interested in and needed cleanup.

The legislature has talked a lot about some needed cleanup in the in SB 79, and so we are focused on that.

We've been engaged in that dialogue to make sure that bill is cleaned up properly.

In the sustainability and environmental quality and infrastructure space, um it's kind of a catch-all for a lot of things.

We could talk about a lot, a lot of different issues here, but I know some things that are important to you all.

Um, of course, last year the governor renamed rebranded CAP and trade to Cap and Invest.

Um there's not a lot in the legislative space, but the the budget does contain some changes that reflect the change that was made in last year's budget to kind of further that.

I will note that um, you know, the the budget and the the changes made last year create uh kind of a three-tiered waterfall of funding that quite frankly puts some of the programs that we are interested in to that thirds that third category of the waterfall.

Um so we're uh there's a lot of discussion in Sacramento about kind of how that what those those priorities should be if that waterfall is kind of the right mix of a flow.

Um Prop four of it was the environmental bond from two years ago.

Um so there the governor does continue to fund uh fund Prop 4, um about 2.1 in the budget years included in the governor's Gen 10 budget.

Um, and then again, a member of our delegation, um AB 35 is a bill that we support that would uh streamline the implementation of um Prop four.

Um Alvarez Senator excuse me, give it a senatorial status.

Assemblymember Alvarez also has some um legislation in the space to uh provide funding for San Diego MTS, and lastly, just mention um Senator Padilla uh is has been for uh a couple of years and this year as well, uh, involved in the data center space and the energy uh impacts that uh that data centers have.

So he has two bills in that space at this point.

Um just want to note I'll try and talk faster.

Um just want to note that we are focused on a number of local projects in Sacramento, um, wanting to make sure that we were exploring every possible state policy opportunity we have we could find to advance some of these major projects, and one specifically we identify as um uh the mission Bay Park um uh redevelopment and uh assemblymember ward is introduced to AB 2025 on our behalf, which would um promote the modernization of the uh mission Bay Park land.

Um in the community and economic development and equity space, um a couple of bills just to note from our delegation.

Senator Blakespear is interested in libraries and in promoting libraries, and Senator Assemblymember Alvarez has uh AB 2270, which uh promotes the land transfer of the state park to the San Pescual Band of Mission Indians.

So as we look ahead, um we've got the budget to look forward to.

The legislature will adjourn by fiat of the constitution by August 31st, so a lot to be done between now and then.

Um, I think that a lot of the 2026 activity is gonna be focused on federal reaction since it constantly changes and we're gonna be constantly reacting.

And of course, don't have to tell you it is an election year this year.

Um we do have six state senators, seven assembly members who are termed out, um, and all statewide officers on the ballot.

There's only one incumbent um on the statewide ballot, and that's um uh attorney general Bonta is uh our only incumbent.

Otherwise, we have some uh interesting races there.

Um, and then we of course have ballot initiatives, not nothing scheduled, of course, for the the June ballot, but in November, we've got three ballot measures that have already qualified and 33 measures that are circulating.

So legislature has until June 25th to place any measures that they wish to place on the ballot.

So it will be a very, very active year with that, Mr.

Chair.

Uh I will conclude my comments and certainly welcome any questions.

Thank you very much.

We will now go to public comment.

Thank you, Chair.

The public comment period for item six is now open, and we did receive one speaker slip from Blair Beekman, but I see he is in the virtual queue, so this will conclude in-person public testimony.

We will now move to the queue.

And I've started the five-minute timer.

Each speaker will have two minutes to speak to item six.

Phone number ending in 870.

Please press star six and begin.

Thank you.

Uh Joy Sunyada C D3.

I think you know by now how much I love this report.

And how much I appreciate all of you.

And you could have gone on for a long time telling me about your work.

I'm sorry you had a time limit, which is always present.

But thank you for your work on all levels.

Just really appreciate it.

So you just hit the basis for me really, really strongly.

And uh I want to just mention that uh I don't think you didn't have time to do this, but on AI artificial intelligence that was on your list of new bills.

Uh do whatever you can that seems appropriate uh to you and our local and state every level, you'll make the right decisions as to what to put your efforts to.

But I'm totally support uh strong movements on bills and work around AI.

Thrilled about what you said about half.

Uh that's one of my babies that I just try to take care of as much as possible.

And also thank Ward for his wonderful work on that.

Um I was unclear on the policy uh statement on the slide.

Uh did I say this right?

There was an item on the arena on RENA housing obligation shift.

So I'll I'll Google that myself and see if I can get information on that.

But that seems to be a hot button topic for me, and and it kind of hits on the lava levels regarding our housing.

So uh thank you for all your work on affordable housing on housing and the homelessness.

You spoke beautifully on the homelessness issues.

Um, I think that covers it.

Great work and keep it up, and we're doing it.

We're in this together and one step at a time, and it's working.

Love to all.

Thank you.

And our final speaker in the queue is Blair Beekman.

Hi, uh, Blair Beekman.

I had to leave and take care of Aaron's uh within downtown today.

So I'm speaking on Zoom now.

Thank you.

It's nice that uh Zoom will become permanent as California state decision making.

Thank you.

Um I wanted to comment firstly, um a real good luck uh in how the city of San Diego can work with the state and then work with the federal level on issues of of housing.

Uh, I think we have a really caring housing department, it sounds like here in San Diego, who really wants to accomplish a lot.

Uh in how we work through the state level and then to through the federal level.

I think I I hope they can see uh uh real good that we'll be trying to work towards.

Uh with mobility and infrastructure items.

Um, does that mean like shared mobility issues and and mobility uh for people in wheelchairs and stuff?

Um for that item, uh I would include the language as you know, you have four points, how you want to uh what you want to be working on uh with the state.

Uh mobility and infrastructure uh uh and creating safe and comfortable spaces.

Uh that's one of your points.

Uh it should include the idea of tech accountability, mobile mobility, infrastructure, and tech accountability can help ensure create safety and comfortable spaces.

Um really think of tech accountability in those terms and what it adds to our public process.

I think it's an important addition that adds a lot of uh weight and merit to uh a good list that you're trying to work on.

And um ask yourselves why you don't want to include it.

Maybe that's an another question to consider.

Um there'll be a day when it will be okay to talk about.

There will be a day when it'll be okay to talk about tech.

I don't know if we'll ever get there, but um good luck that we can and make it a regular part of our conversations.

Boy, I have a lot more to say, and I don't have enough time.

Um thanks for your time.

Thank you.

And Chair, this concludes public comment on item six.

Thank you to the members for your participation.

This is an information item only.

No motion is required.

Uh, I will kick us off with uh comments and questions.

Uh first, thank you, Mr.

Bishop for government affairs team, Ms.

Topp for this update.

Uh obviously, what comes uh comes down from Sacramento uh has a lot of uh impact on us, and so having you go up there to make sure that it's a positive impact is really important.

Um I'm glad to see that uh state representatives continue to show up and step up to address care court reform, uh homelessness programming and housing.

Uh I am uh excited to see that assemblymember Ward uh has a bill that formally excludes Mission Bay Park from the Surplus Land Act.

Uh that is something that this council uh spent a lot of time detailing when we had our platform uh up in front of us uh uh before and uh uh we know that this is um it's something the public really wants down here.

So we got to go fight for that.

And and of course, Assemblymember Ward is a huge champion for housing, uh, was an excellent council member when he was on our city council.

And so obviously uh getting that exemption from the surplus land act shows the value of protecting access to beaches and bays, and it speaks volumes to the fact uh that this is really about keeping access uh for the public open.

Um and uh I know that uh next month I'm working with my staff uh to introduce a resolution uh for this committee to formalize our support for this bill and protect our beaches and bays, and so that item will be forthcoming.

Um at this point, uh, just I know that it's not in this particular uh set of legislation, but from a prior set of legislation that I know uh Mr.

Bishop and Ms.

Topp worked on uh appreciating um that another policy I'm bringing forward to the public safety committee uh regarding e-bikes uh safety uh to implement uh assembly uh assemblywoman uh burners uh law that was passed uh prior for setting up um what are they called uh the pilot programs in San Diego County.

I know we'll be taking that up soon, so I want to thank her for her good work in prior years.

So um with that, I have no other further comments and questions uh other than to reiterate my thanks and uh not seeing any com no, I do see council member Foster.

Hey, thank you, Chair, and um I just wanted to say thank you, um, Walt for the work that you do in our um lobbies here.

Um, and just thank you for coming to the reinvestment task force.

Um that was uh truly helpful.

Um I don't think they've had a a briefing or an update like that in quite some time.

So um thank you.

You provided some um good information that I think the team um over there needed.

Um you always do good work.

Um, the only thing I think that we um can't get our arms around are those unfunded mandates, right?

Um you guys come up with some type of methodology or something to take care of those.

I think you'll figure out the the mystery, the the mystery behind the mystery.

Um but thank you for your hard work.

Thank you.

Thank you, Councilmember.

Thank you.

Uh Councilmember Campbell.

Thank you.

Uh Walt, congratulations.

I know you're soon.

Is this the first time you'll be a dad?

Or it will be, yeah.

Oh wow.

Rude awakenings coming.

And I mean awakening, like all night long for several nights.

At any rate, I just wanted to say thank you for all your good work and um and you as well.

And I just gotta repeat because um I'm not gonna be here much longer.

It's my last year.

I'd be termed out, and it's time for me to retire for sure.

But I just want to remind you to please talk to the legislative independent budget analyst about changing the formula by which San Diego receives money from the property tax.

In my latest bill, I received a little uh insert, and we all did, I think, about what percent goes to the city of San Diego, and it is tiny.

It's 12 percent, maybe 12 and a half.

Out of each dollar, we get 12 and a half cents.

This is ridiculous.

It is supposed to be based on the services provided by the governmental entity.

Well, times have changed over the last 70, 80 years, and it's time for the largest city in the county by far, and the second largest city in the state to receive its fair share.

We should probably get at least 33 and a third cents per dollar, maybe even 50 cents per dollar, would be even better.

We provide so much for everyone in the county and not just for the city.

So I uh I would ask that you work on that at talk to them about it.

They're the ones who instructed me and what this is all about.

And uh perhaps they can come up with an answer as to how we could make this happen.

I know the legislature would have to vote for it.

This city needs money, and probably all the cities in the state are hurting, and it is not right.

We send a lot of tax money in and we get almost none back.

So I just want to ask you to please do that.

Thank you so much.

Thank you, Councilmember Campbell.

Seeing no further comments or questions at this time, uh, I will uh thank our presenters and continue to wish them uh good luck in Sacramento and good luck to you all.

Uh let us proceed with item number seven.

Thank you, Chair.

Item number seven information item on artificial intelligence policy governance, risk management and adoption in the city of San Diego.

All right, we will hand it to Alexander Hempton, our chief innovation officer and director of the performance and analytics department and Jonathan Banke, uh, our award winning CIO in the Department of Information Technology.

Uh please introduce yourselves for the record and let us know how much time you'll need.

Thank you.

Um, I think we will ask for 15 minutes, but we can try to go faster if that's desired.

So uh the program says.

Okay.

Okay, go ahead.

15 seconds.

All right.

So good afternoon, Chair Campio and members of the committee.

My name is Alex Hampton, director of the performance and analytics department and the city's chief innovation officer.

Our goal is simple to make city government work better for people.

We don't just innovate for the sake of innovation.

We do it to support our city employees and to better serve San Diegans.

This work is a new.

We've been building digital tools for over a decade.

For example, get it done launched in 2016.

Building an app is not that difficult, but building tools that help employees do their jobs and helping residents solve problems in their communities is much harder.

And that's experience we've been building for years now.

Since 2023, in partnership with the Department of Information Technology, we've also provided formal guidance for employees on the responsible use of artificial intelligence.

Uh today we'll cover three things.

What artificial intelligence is and how it's impacting government, the policies and safeguards the city has adopted, and examples of AI pilot projects and use cases.

So to get us started, I'm pleased to introduce my partner in this work, Jonathan Binke, the director of the Department of Information Technology and the Chief Information Officer.

All right, thank you, Alex.

So artificial intelligence has been around for decades, and most of you have probably been using traditional AI for years for things like predictive text on your phones or grammar checks and documents based on predefined rules or patterns.

But advances in computing power have allowed generative AI solutions like ChatGBT to train on large volumes of data, create text images, um, audio video with real high levels of accuracy, and we see AI being rapidly integrated into many of the existing technology solutions right now.

So the early emerging use cases include things like chatbots, um, image and video creation, self-services, and office suite assistance.

So Gardner research uh has been providing guidance uh to organizations to help them prepare for some of the anticipated impacts of AI on operations and employee training.

Gardner projects that by 2027, 60% of all knowledge workers will uh the knowledge worker tasks will be augmented by AI, and 50% of business decisions will be augmented or automated by AI agents.

And I think that's actually an accurate prediction.

Uh, we are seeing AI integrated into common office suite tools like Microsoft and Google, so it is taking off.

And then by 2028, Gardner projects that 40% of employee training and coaching will be completed by AI.

And that's up from 5% currently.

Uh, and then by 2030, Gardner projects that half of enterprises will face irreversible skill shortages in job roles due to Gen AI accuracy decline, skill erosion, and uncompetitive pay.

And there's a lot to unbox uh with the assumption uh that they made there, but an example would be current trends at some large commercial organizations who integrate AI into the tasks of the entry-level workforce.

There's a risk of the incoming workforce depending too heavily on AI for their tasks and missing out on learning foundational operational information or decision making that prepares them to move up in the organization.

So this skill erosion can have a domino effect as they advance, and it's a legitimate consideration as organizations plan to integrate AI into various functions and tasks.

Gardner Research research also survey organizations about their expectations uh for the impact of AI.

Expectations are for high productivity gains, increases in revenue and cost savings, and we see the major technology vendors making significant investments, and the technology is moving rapidly as they fight for global leadership.

And with these high expectations and the rapid advancements, there are risks that every organization has to take into account.

The most common risks related to AI include copyright infringement and leakage of sensitive data into a prompt that's retained by the model.

Cybersecurity risks include prompt injection attacks on Gen AI solutions, and the ability for criminals to develop phishing, social engineering, malware, other attacks, and a fraction of the time that it took them to do it manually.

And you've likely seen stories about deepfakes that can use a person's likeness or voice to create videos or images that are indiscerminable discernible from legitimate sources.

And AI models can hallucinate and provide inaccurate information.

They can provide biased information due to the model or maybe the underlying data.

Shadow AI that mirrors the term shadow IT that simply refers to AI solutions, maybe built by the average uh the average user out there and bypassing security controls, and that increases risk.

And our city and policies address these risks and include requirements like having a human in the loop that validates the output of the AI solution, and AI governance review is also important to ensure that the AI solutions meet standards and avoid these risks.

And then data governance is one of the most important considerations because the AI solution is only as good as the data that it's trained on.

Just some quick background on our policies, AI policies and governance.

In May of 23, we issued guidance to city employees as ChatGBT was taking off, and then in September of 23, we formed a multi-department steering committee to develop the city's AI policy.

And at the same time, San Diego became one of the founding members of the Gov AI coalition that was spearheaded by San Jose.

The coalition's grown from the original eight cities that were part of that effort to over 900 local, state, federal members, and 3,000 practitioners.

So our city policy was not done in a vacuum, and it reflects many of the widely adopted best practices and standards that have been developed by the coalition.

In September of 24, the city's initial AI policy became effective, and in November of 24, the AI subcommittee began reviewing AI solutions as part of a larger IT governance effort.

A multi-department steering committee developed the comprehensive AI policy to provide legal and operational guidelines for use of AI in the city, used resources from the National Institute of Standards, Gartner Research, the Gov AI Coalition, and then also had local considerations like the trust ordinance.

The policy was published in January 2025, and all city employees received training on the policy.

The city's AI subcommittee for IT governance includes multiple departments and a thorough review of AI solutions, their algorithms, requires an AI fact sheet, which provides detailed and technical data considerations.

And the AI Governance Committee follows a formal process to review new AI solutions and ensures that the appropriate departments and stakeholders approve a solutions before it's launched.

Some of the pilots and use cases for AI in the city include the Microsoft Copilot M365 AI assistant for the office suite, a new web-based AI solution that's already included in the city's Microsoft licensing is called co-pilot chat.

And that will be a made made available to every city employee this year.

Copilot chat is protected by the same security, same compliance and data handling requirements as our Microsoft Office solution.

The city clerk used AI to accelerate language translation and risk management has a new claim system that will provide AI integration validated by employees to streamline their tasks.

Several of the leading chatbots were piloted on City Net, and then early testing of AI agents shows their ability to be trained on things like the city budget or administrative regulations or other large bodies of data that can be very time consuming to search manually.

A public facing AI solution called MyE SISO was released back in 2024 to help improve regional cybersecurity.

It allows small businesses and agencies to have a conversational interview with AI on their cybersecurity controls.

And they receive a report card at the end that can help them drive improvements.

The most critical considerations for adoption focus solely on our employees.

Last year we conducted over 100 trainings and workshops with city staff.

Our AI policy highlights employee empowerment as a guiding principle.

And department champions have helped teach their colleagues and expand the efficiencies that are being realized.

We will continue the focus on education as we roll out the co-pilot chat solution to all employees this year.

The co-pilot M365 AI assistant was deployed last year in January.

And it's now in use by hundreds of city staff.

Some of the common uses include summarizing meetings and emails, action items, analyzing Excel data, creating PowerPoint presentations, drafting documents with multiple information sources.

And then in October, we surveyed the city staff on their experience.

The majority of staff found that co-pilot improved efficiency in their tasks of things like streamlining emails, meetings, document creation, and the majority of their responses also reported time savings of 30 minutes to two hours a week, and some reported time savings of more than four hours.

The total time savings is estimated at over 27,000 hours annually.

And most uh most found it easy to learn, especially since you can ask the tool how to interact it with it most effectively.

And we were also pleasantly surprised to receive requests from employees for more advanced training and role specific training.

And it really shows us that many employees were really engaged in maximizing the value and efficiencies that they receive from the tools.

And I'll turn it over to Alex to talk about some of the AI use cases under evaluation.

Thank you.

So departments across the city are really evaluating ways that AI can help improve operations and public services.

So some examples include development services exploring AI to support permit intake and review, and then automation tools to help manage when there's service rate changes.

Allow staff to perform more advanced searches.

Other areas under evaluation include police department, non-emergency line, kind of expediting that process, tools to quickly search city council meeting agendas and videos, and there are also opportunities to improve overall customer service and IT support through self-help tools.

And there's also some promising applications in the GIS area.

So finally, um, what's next?

Looking ahead, five priorities really kind of guide this approach.

So first is AI literacy, making sure employees understand what AI can and cannot do, so it's used responsibly.

Second is scaling solutions.

So starting with prototypes, for example, testing a chat bot to answer some common questions and then expanding it if it's cost effective and it is reliable and can be maintained.

Third, consistent standards.

So ensuring AI tools reflect a consistent voice and experience similar to our city style guide.

Improving data quality, so reliable data is really foundational to the AI.

Whether someone's using an AI tool or visiting our website or making a phone call, and then finally with the agentech AI with systems that can complete multi-step tasks, making sure there's appropriate guardrails and human oversight.

So that concludes our presentation, and we're available for any questions.

Thank you.

Thank you very much for that.

Really appreciate the presentation.

It has come to my attention that one of our colleagues has departed under the Brown Act.

A quorum of members has to be present in person for the meeting to continue.

So even though I'm participating virtually, and there are three of us on the meeting, only two are currently present and one and not three.

So um, unfortunately at this point, since we have lost quorum, uh, we are going to have to end the meeting.

Uh, as we're under the brown act, we cannot proceed with comments or questions uh as much as I have prepared and another item uh that has long been prepared.

Uh so uh I do want to thank uh council member Campbell, Councilmember Foster for being there, uh, and of course our IT and panda teams for their uh good work with my team.

Um but sadly at this moment we're going to have to uh end the meeting.

Um can I just get a confirmation from the city attorney that that is uh the appropriate action at this time?

Appropriate and necessary action at this time.

Yes, that is appropriate and um accurate Okay, all right.

Uh with that we will uh conclude the economic development and intergovernmental relations committee meeting.

Uh my deepest apologies to the public who would uh had comments prepared for this, uh, but given the Brown Act, we will need to uh end the meeting.

Thank you again, and uh, we will see you at the next economic development and intergovernmental relations committee meeting uh in April, I'm gonna go back to the city.

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