I think that's wrong. That's my understanding. Maybe that's a misreading, but you have to pay the fine. And you can correct me if that's incorrect. But I notice the violation, the traditional way of dealing with folks that have broken the rules requires a hearing before you impose fines. And I'd like to see us return to that. Thank you. Hi, Pat Malo, been working on this for a long time. Thank you, Sam, for bringing these suggestions forward. I think that they're necessary and steps in the right direction. I do think we heard a really honest comment from Supervisor Friend earlier when addressing Sam to not read into the intentions of the county and look at the results as the intentions. And you know, I'm a political realist on my bad days and today I'm agreeing with that. And the results of this seven year process have been to put all the small farmers out of business. There was some talk of pushing it to Commercial Ag in South County, but that's been made too arduous even for them. We've lost, you know, hundreds of registrants who were paying money just to get in line to participate in this process. We have, I think, five to 10 cultivation licenses in the county, I think one or two, or potentially in anything other than Supervisor Caput's district, and you know, I know that wasn't the entire group of the county and participants in this process's intentions, but I think it's an honest comment to read the results as the intentions of this. And we really need to get back on the right track if that wasn't our intentions or be honest about those intentions. I think that the commercial activity in the mountains is, you know, been a green rush for a lot of senses ended in 2015 when other, you know, areas started to get ahead of Santa Cruz and commercial cannabis stuff. I think that's evident through, you know, Sam saying that we haven't had complaints even though we have acres and acres of hemp, the same plant, I know not intoxicating, but the smell is the same, similar. We haven't had complaints. The two folks we have here complaining today instead of a room full of complaints are literally writing fiction to, you know, to flesh out those points. So I mean, I'm here as someone who has lost their job in this. I grew up in this community, you know, and I've gone with you guys on good faith for seven years on this. And I just, you know, I'm gonna still keep going in good faith because there's no other option, but there's a whole bunch of other small businesses who are feeling right now what we all felt like. There's a whole bunch of issues right now sort of involving enforcement with law enforcement to solve problems on a bigger issue. These shouldn't be issues that we're arguing about anymore, especially at these times. So I don't want you guys to lose your jobs like I did. So let's get this right. Thank you. Thank you. Yeah. Anybody in the community room? There's nobody in the community room. However, I have 12 web comments that need to be read. So if you will be patient with me, please. The first person is from Julia Gondenski. I am steadfastly opposed to the proposed changes from the cannabis licensing officer, CLO, to reduce the minimum acreage requirement from one acre for a cottage license. We have been over this many times before and the one acre size was always what was wanted by the cannabis industry, but was clearly shown to be harmful to public safety environmental biodiversity and neighborhood health while providing no meaningful community benefit. There is no evidence or compelling rationale on which to advocate for this change, except to make it easy for cannabis growers to grow almost anywhere and with little to no enforcement of any regulation. This happened already under the medical marijuana regulations. Do not let it happen again for commercial cultivation. Please reject the CLO proposal to lower the minimum acreage requirement for a cottage license from commercial cannabis cultivation to one acre and RATPZ and SU. The next one is from Eric Hoffman. My name is Eric Hoffman. I served on the cannabis choice cultivation committee representing district three. Our committee was made up of five appointees from each supervisor's districts. Letters on the cannabis cultivation business and retired county officials with specific expertise helpful to designating a workable county wide ordinance. We researched, studied, debated and made decisions to guide the growing of cannabis in a way that sought to protect the integrity of neighborhoods, diminish negative impacts on wildlife and the environment. The threat of fire due to grow activities is real. The impact of the impact of poisons, killing avian and animal predators large and small in great numbers is real. The proposition is a power play for a small segment of our population, the cannabis growers, our expense, our land and our community. I strongly suggest the board reject the COL amendment, which would be disastrous. Please endorse the strong terms, strong terms, the protection of RA, SU and T zones to protect our rural neighborhoods, environment and environment. Next one is Nancy Macy on June 2nd, 2020. President Greg Caput, Santa Cruz County Board of Supervisors, Bruce McPherson, John Leopold, Ryan Coonerty and Zach Friend, members of the board, dear President Caput and members of the board. While we can understand the frustration of the county at the unexpectedly paltry income from cannabis industry thus far and the pressure from growers to reduce the requirements, the county imposed on them, I and many others are feeling absolutely betrayed by the major changes in aspect to the ordinance that negatively impact rural residents. The process was long and labored with major concessions from local residents and environmental stewards. And we strongly urge the board not to use, to not so capillarily throw out the hand fought protections to those RA, SU and TP zone parcel owners. These include reducing the required acreage from two and a half to one acre when the preferred number of acres most rural residents required was five. And something never allowed even for a tool shed, reducing the property of line set back for interior growers, mostly greenhouses to zero feet. We reject the idea that it's okay for someone who has moved here since 2013 should be allowed to grow since that undermines the effort to the, to supporting those existing growers who are seeking licensing and to discourage those who would take advantage of this county's willingness to allow legal controlled environmentally sound growers to succeed and to be good neighbors. We strongly support the points made to our, I'm sorry, we strongly support the points made to articulate by Mary Jo Walker, Kevin Collins, the folks of Bonnie Dune and others who are applauded through their long involved input is being discounted and ignored. Reasonings that have few complaints about outdoor actually underscores the need for distancing since few neighbors are willing to make formal complaints against their neighbors when they have to live near one another and hope to have a friendly relationship rather than an adversarial one. We strongly urge you not throw away the protections that we're so agonizing to achieve. Respectfully yours Nancy Macy. I'm gonna set the timer for this person. They've sent in three emails. So this person will get a total of three minutes to comment. This is from Kathy 10, 0623 Dear Supervisors. Mike, my comment seems to be posted to item number seven. I am writing, referring item number eight, the proposed changes to the cannabis cultivation ordinance. I'm vehemently opposed to the proposed reduction and minimum acreage for commercial cannabis cultivation on RATPZ and SU. It is distressing that a change that could have such profound implications is being undertaken with virtually no consultation with the community. It seems the primary source of data and argumentation has been the cannabis lobby. This is not right. The model of the model of diffused small scale commercial cultivation in residential and timber areas was widely seen as a bad idea in 2018 and nothing has changed. It remains a bad idea for the public wellbeing. The CLO cites no meaningful new evidence to make the case that this change would address the cited problems of continued diversion to the black market and low uptake of the license. Dramatically increasing the scope won't address this and certainly there is no capacity in the county now or in the near future to truly monitor and regulate this. The supervisors are well aware the range is harmful to public safety environmental community impacts. So no to tweaking the minimum acreage on RATPZ SU for commercial cannabis cultivation. Say yes to facilitating legal commercial production on CA and A properties. Thank you, Kathy Toner, a 21 year resident and she has another email. Dear supervisors, wait, I'm sorry. That's the same one. She has one more in here. There's a lot of them to go through. I'm sorry. Okay. I need to add a comment specifically in response to the presentation. One, the CLO officer did not provide any evidence that this dramatic expansion will address the core problems of abuse of medical grows. The CLO officer only mentioned cannabis groups when asked about the public input. Green trade cannabis growers, even the CPP includes a very strong representation of cannabis representatives. By his own admission, the licensing office whose budget is paid for from County taxes, not by the cannabis industry has sought zero input from environmental community fire safety leaders or representatives of on a monumental policy change. Next comment is from Bill Shevlin. Our company is a cannabis company and we have multiple locations in Monterey and Santa Cruz County. Since the beginning of legalization of cannabis via prop 64 Monterey County has been far ahead of Santa Cruz County and has reaped the benefits of jobs and tax revenue. The adoption of the modified ordinance would be a step forward in Santa Cruz County catching up to other counties and cities in California. And the current economic and social climate, local jobs and tax revenues need to be created to support local communities. As a local cannabis company, we would prefer to expand and create our jobs in our local community, but without the proper legalization and support, it is not possible. We will be expanding our operations by adding additional cultivation and manufacturing cannabis jobs. Santa Cruz can make the choice to encourage this type of economic opportunity or can continue to push cannabis companies to operate and expand in other areas. Santa Cruz County is a two, three years behind other counties and has a chance to adopt legislation that can support the emerging emerging industry. It is up to the supervisors to show they support local jobs, local taxes and local business owners. Excuse me. Okay. Next user is Josie Roberto. Good morning. This is Josie Roberto with Ethridge Farms. First of all, on behalf of Ethridge Farms, I would like to thank the board, CAO County Council, all the staff and especially Sam Laforte for putting in the time and energy to help make our cannabis licensing program fully operational. We support all of the changes that staff is presenting here today. One issue that really stands out to us is the cottage license setback. We would like to point out that the 400 feet, the current setback for CG license is the distance of 1.33 football fields and 100 feet, the proposed setback for the CG license is 33 yards or 1 third the size of a football field. When creating setbacks for that, this policy, please keep in mind that a 2.5 acre lot is 330 feet across and five acres and a five acre lot squared is 466 feet across. Even the current cottage license setbacks are extremely difficult to comply with. Therefore, we're making it useless. We believe the board created the CG license to give small farmers a chance to have a small part of this program. We would appreciate it. If you could please keep this in mind when voting today and consider why staff has made these recommendations to the board and help make this CG license fully operational. Thank you for your time and we hope that you all stay healthy and well. Next comment is from Stacy Saida. I am Stacy Saida, one of the owners of Burnett Rose, a small family operated cannabis operation in the Santa Cruz Mountains. Burnett Rose supports the proposed changes of the non-retail commercial cannabis program. Approving these changes will make it feasible for responsible individuals to engage in cannabis cultivation and to generate cannabis revenues for the county while continuing to require cultivation to adhere to the numerous state and local licensing and permitting requirements that protect the health and safety of people and the environment. The process rezoning approvals are sensible for large scale operations but we appreciate the recognition by county staff that some regulations should be modified to reflect reasonableness when applied to small operations. Next comment is from Nancy Macy. Oh, I'm sorry, she already, she sent it in twice. She sent it in three times. This is from, I apologize if you're listening, I'm gonna massacre your name. Khalil Motawli, thank you. Thank you, Supervisor Leopold. Board of Supervisors, thank you for again, evaluating the rate at which cannabis businesses are taxed especially during the global pandemic deeply affecting our local economy. The cannabis business tax, CBT, has proven- That may be for the next item for the number eight. Oh. Nine, sorry. Nine, you're right, thank you. I'm sorry. There's still more on this one though. Okay. I'm gonna edit this one and not read part of this into record because it's extremely offensive. So the first sentence I'm gonna admit and it will be up to the Chief Deputy what goes into the record. We are a diversified South County grower. We grow blueberries and cannabis. We cross train all employees to work on both crops. This allows them full year employment so they do not have to go south during off seasons to pick fruit in horrible conditions in other countries. It's not food versus weed. It's sensible farming using crop rotations and new era of intelligent cultivation. And one more. Kelly Highland, esteemed board members. I encourage the board to approve all of the proposed changes to the cannabis ordinance. In particular, the industrial zone areas are the ideal location for indoor cultivation and other cannabis businesses to be located within the existing structures. I implore you to improve the proposed changes to the industrial use chart. Section 13.10.342B use chart to allow businesses to be able to operate within the county. While the board may have issues with other elements of the proposed ordinance changes, most of the board would agree that the industrial zone areas that can move forward to get cannabis facilities open. Thank you. Thank you. Thank you. Appreciate that. Okay.  I mentioned earlier, I'd like to have an amendment of what, if we could put it off, but I'd have to have a first and I can only second that. Is that correct? Well, Chair, this is Supervisor Friend. I do have a motion to make. Wait, I just have a couple of comments for motion is made. Maybe to get an idea where I'm coming at. If you don't mind if I do that before you make a motion, Supervisor Friend. Please go ahead. Okay, thank you. I appreciate Mr. LaFort's efforts to design a safe and equitable program for growers and retailers, manufacturers and consumers. Obviously it's been a tough task for the last six or seven years and it makes good sense to evaluate what role our regulation and tax structure are going to have the disappointing number of places in revenue that we've realized. I do support a lot of what is proposed in terms of redefining cannabis as an agricultural activity, removing the 2013 restrictions and clarifying the commercial and industrial uses. I also appreciate from law enforcement perspective that we need to reduce the number of small scale growers claiming their sales are exclusively for medical customers. That said, I can't support the proposed changes to the minimum partial size and setbacks that would disproportionately affect my district in particular sentiments of Valley. This is a rural residential area with one acre minimums that was not envisioned for such close proximity to agriculture and commercial uses. So I just couldn't be supportive of that reduction. And also I would like to have more input from what we've received some very legitimate concerns from Cal Fire and others about how we address fire prevention and water use and environmental protection as well. When we dramatically increase the number of parcels that would be subject to cultivation especially as I mentioned in the Santa Rosa Valley. So although I understand we have a lot of commercial operations going on already that are disguised as medical grows, I'm concerned that loosening these regulations will be disruptive to our neighborhoods particularly in my fifth district. So I could not be supportive of the overall proposal here. I'm not sure what might be proposed as a motion but the setbacks and the small grow or the setbacks and the minimum size really are appropriate. And I think they need more attention before I would be supportive of them. Thank you, Supervisor Friend for letting me say my piece. Well, thank you, Supervisor McPherson. Hopefully this motion then does actually address those concerns. I will move to reject adoption of the draft ordinance as presented that asks staff to return with a revised draft ordinance on June 16th that does the following. First, that eliminates the proposed cottage garden changes. Two, that eliminates the lowering of the minimum parcel sizes for cultivation as Supervisor McPherson was just referencing. Three, which eliminates the addition of new provisions that grant the CLO unappealable authority to provide exceptions and restrictions. Or that eliminates the proposed change which will allow new hoop houses in the coastal zone. A five, which retains the level five process for setback exemptions and modify the setback to 100 feet from habitable structures but in CA zones only and maintain the current setbacks and all other zones. Next to modify the proposed change in agricultural zones which currently is proposed to go from 10 to five acres to only allow that if there's contiguous parcels that equal 10 acres like we do in TPC. And lastly to modify the proposed change on the energy conservation from modify the language from best efforts to specify a reduction in energy consumption. And additionally, the second direction would be to return in August of 2020 with a report to the board that details the areas in the county cannabis ordinances where the CLO has unappealable authority with regard to granting exceptions to setbacks or other location restrictions for commercial cannabis operations such as within our dispensary ordinance and provide options for an internal appellate review of such decisions at a level below the board of supervisors maybe for example, a public hearing at the ZA for example to encourage transparency and community engagement on these issues and that's my motion. I'll second that motion. And I guess I'll just add that I'm not sure how this got as complicated as it's gotten. Our idea, at least my idea from the beginning was to move cannabis cultivation out of the mountains and out of neighborhoods and into vacant greenhouses where we could create good jobs, good tax revenue and an opportunity for smaller growers to share licenses and find an accessible way into the market. Somehow this has gotten much more complicated but I don't think the solution to fix this problem is to go back and undo the agreements that we had within the community. The idea is to simplify the permitting process in CA and A properties. And so I'm hopeful that Zach's changes, supervisor friend's changes get us in this direction and I'm very supportive of it being back here in front of us at the next meeting because I do think it's crucial that we try to get some operations in these greenhouses up and going as soon as possible. And so I'd like to be able to move forward with an ordinance next meeting and then a second reading so that we aren't delayed by summer recess or have any other delays. I, Supervisor McPherson, that was extensive motion and I do agree I think with just about all of it. I will support it. I think it is certainly a move in the right direction of what we want to be doing. So I will be supportive of it and obviously we'll have a lengthy discussion again I think on the 16th that this passes so I will be supportive of the motion. In regards to the motion, just a little unclear about the hoop house piece as I understood from Mr. Laforte that we don't require any kind of permitting for hoop houses under 12 feet now in any other place except cannabis and are we gonna keep doing that when the motion? Supervisor Friend, just for clarity sake I'm just trying to figure out what the hoop house. I was just making sure you completed your question. I apologize for being slightly delayed there. Yeah, my goal is to just have well actually the board's goal has been specifically to not allow new construction within the coastal zone. And I did hear what you were saying and what Mr. Laforte said. I think though it's still important for us to specify that we're not allowing this type of new construction within the coastal zone for this activity. The other piece that I was just trying to get a handle on is the concerns about the authority of the CLO and making choices. The board had previously decided that that was a good place to be but so I just wanna get clarity about what you're trying to do there. I agree that the board had previously in a very narrow escape and discussion about a specific dispensary as you may recollect in regards to a compassion program created this authority. This item significantly proposes to expand scope specifically on setbacks of and remove the level five process. But secondly, I'm just asking for a broader discussion back at the board about whether we should have a completely unappealable basically land use decision made by an individual. We don't really have that in any other structure. Most other land use decisions including pretty significant components which we have currently given authority to this position to would have an appellate component be it a ZA or a PC or technically to the board. I remember during that discussion that there was not an interest in the board hearing every single issue which is why I specifically said that this would rest at a level below the board but there still should be a discussion. The board should have an understanding of where that authority is or where that flexibility has been given and make sure that we're there. And then secondly, I would support then having a mechanism by which there can be an appellate component to what those decisions are. And I look forward to that discussion. I'm not sure the ZA is any more of a process than the CLO. It just seems like it's a way to drive up cost but not get the goal. But I look forward to that discussion. I can support this motion. I don't completely understand the hoop house argument but I will defer to my colleague who where the hoop houses are about that. I think that this board has been fairly consistent in saying that we would prefer to have cultivation happen in commercially zoned areas.  And when you hear from people who have long standing relationships in the county who have done lots of business with the county who are just trying to transfer to use a different plant but are finding that the hurdles to be extraordinary, we should take that seriously. It's not a special interest. It's actually trying to support local businesses and local farmers. And we could argue about whether there's special interest but I think that's kind of what we've been trying to do all day here and support local businesses. On the question of cotton grows. Well, we have a first and a second. Well, I'm making some comments so I'd appreciate if you just let me finish. So on the subject of cottage grows, I think I completely understand and we'll support this motion about taking this out. I think that it does, it would be worthwhile for us to have a discussion now years into this about what we see happening, whether we can make it better and whether it requires any change. I take very seriously the environmental concerns that were brought up here by people in the room as well as with the comments but trying to also figure out whether there's some way to make that work. I don't know whether there's an answer. We could debate whether what has been proposed is the answer but it clearly deserves more community discussion. We have had groups like the community prevention partners say that regulation of these sites would actually help in lowering the opportunity for young people to access cannabis. And so, and we've heard at least secondhand about the sheriff's office wanting to have some control as well. So I'm not exactly sure what the forum is that to have that conversation but I think it's worthwhile that we try to think there's a good way to do that and see whether we need to change the policy down the line. But otherwise, I support this motion. Okay, we have a first and a second. What is this returning to the board as far as the first and second? Our next meeting. June 16th. May I ask one question of the motion? I mean, we're gonna solve all of these problems between now and June 16th.  At least as I understood, we're taking things out of you. I'm making a comment now. I'd like to see it put off until August. I'd like to know more about Cal Fire's interpretation of the roads that will, the changes and actually I wouldn't welcome some kind of report on jobs. I'm claiming that more jobs would be lost than actually created. And actually something about energy use and that's going on right now. Anyway, I'd like to see it be put off until August. This is Supervisor Friend. I would like to address that. So the Cal Fire concerns were on things that I'm proposing to remove from consideration. So I think that they were concerned about the reduction in parcel size and potentially the expansion of the cottage grows. So the motion is before you would eliminate those issues therefore eliminating whatever concerns they would have which is why I felt that June 16th was a doable date because it doesn't need to be an additional research on that. And setbacks also, right? Yeah. May I ask one question of the motion? Yeah, go ahead. By Supervisor Friend. Supervisor Friend, thank you for the clarity. I will say it's very nice and appreciated to get such clarity and emotion. And I was wondering on the setbacks with regards to eliminating the changes to the setbacks, is there any potential to allow a zero setback for indoor cultivation within our C4 and M1 zones as that is a unique area of the South Rodeo Gulch. And if we proceed with the motion, as you've said, all of the operations there will continue to be level five use permits due to one residential home. And I'm just wondering if that could be acceptable to you in the motion. Well, I'd like to ask the seconder of the motion whether you have a concern, Supervisor Coonerty, do you have an issue with allowing those zones back in? So no, if it's for those zones and if it resolves that issue, I'm good. Okay, well then I'll modify my motion to encourage that for that one section. Okay, I'll read the motion. Actually, the motion is to return in June the 16th, right? And also additional direction to return in August. The direction for June 16th has several parts to it. Four or five, six. More than that. Seven. Eight. I believe the motion is clear from staff's perspective in terms of we will be able to go back to the video and work on it, but it is a lot to say. I will email it also to the clerk's, but it's available. And we always double check it by listening to the record. Are we ready for the vote? I'm ready. Okay, I'll do the roll call. Supervisor Leopold. Aye. Friend. Aye. Coonerty. Aye. McPherson. Aye. Chairman Caput. Aye. And with that, we'll take, we'll take a 12, we'll come back at 1230 if we could take a little recess, is that all right? Okay, we'll come back. Thank you. Okay, item number nine, right? Consider report, analyzing various cannabis business tax rates as outlined in the memorandum of the county administrative officer, jurisdictional tax rates by operation type and jurisdictional tax rate comparison. I know I got to speak right into it, I guess. Okay. Okay. Go ahead. Sure. Thank you. So your board has directed us to return with information regarding cannabis business taxes, including some information on tax rates in surrounding areas. So the, just want to give you, sorry, I can't see the presentation. I had to turn it off. She turned me off. Okay. Thank you. Thank you. Okay. Here we are. So just a quick background. This is a snapshot of the history of the CBT to date. And you can see that we started in November, 2014 and we've done a couple of things since then. The board has discretion to adjust the CBT rates between zero and 10%. Currently, our tax rate for cultivators, manufacturers and distribution is six and it's 7% per retail. Also just wanted to remind you about the state tax, taxes that are imposed on cannabis businesses. These, the excise tax rate of 15% on everybody. Cultivation also pays some additional taxes. And of course, the sales tax. This is a chart of manufacturing distribution and retail taxes. And we wanted to give you the comparison across a number of jurisdictions. All of these are collected as gross receipts tax. So you can see what's happening generally in the central coast area and where the County of Santa Cruz falls in relation to other areas within our surrounding neighborhoods. So cultivation taxes actually vary between those that are assessed on gross receipts and those that are assessed based on square footage. Reasons vary for choosing one type of tax over the other. For jurisdictions that restrict cultivation to indoor only grows or are land rich, a square footage tax is easier to implement and provides a more predictable revenue stream while placing the risk entirely on the cultivator. Jurisdictions that choose a gross receipts tax find that while this revenue stream is less predictable, it offers a better structure for the industry as it can adjust as operations scale up or down or as price fluctuates. In order to do our cultivation tax analysis, we got a sample size from a variety of actual cultivators within our community and Monterey and the city of Santa Cruz. So this is real data that we used based on how people are doing their taxes. And what we tried to do was look at the variations between the gross receipts and the square footage tax and then try to normalize them between the different methods of collecting those tax. A number of factors such as brand power, quality and additional infrastructure accounted for significant variations in what a cultivator could command as a wholesale price per pound. Data was provided in the staff report which sought to create equivalencies in calculations between the gross receipts and the square footage tax. Based on the sample size we collected, our gross receipts tax of 6% for our indoor growers would translate to an equivalent square footage tax on an average of about $35. I want to be very clear, we currently have very few of these types of operators in the unincorporated county. As you can recall from Sam's previous presentation, there's like three. So these would be sites located in the C4 and the M zones that are strictly indoor only gross. When we compare outdoor gross receipts to square footage charge, these growers actually end up paying far less per square foot, an average of about $1.15. This is less than Sonoma County with a rate of $1.61 per square foot and significantly less than our neighboring county of Monterey who charges $8 per square foot. Though I do want to remind you, Monterey does not have any outdoor gross.  There are more of these sites coming online in 2020 for us but they make up less total square footage than the existing greenhouse or mixed light operators that we have. So let's concentrate on them since they are our most prevalent form of cannabis growers in the county. Mixed light are greenhouse and hoop house operations, which is our primary method of cultivation here in Santa Cruz County. As with the outdoor cultivators when comparing mixed light gross receipts to an equivalent square footage charge, these growers also end up paying far less per square foot, an average of about $2.90 compared to about $5 in other jurisdictions. So rates can vary as much as cannabis ordinances across the state and there are many variables as we outlined in the staff report which can impact the wholesale price a cannabis cultivator can command in the marketplace. In setting taxes, the board should consider both its revenue goals and its goals for the development of the still emerging industry before making tax adjustments. So I have a question. Okay, I'll try. We'll go with Supervisor McPherson first and then go ahead. Do you have a comment? I don't think he has a question. I'm not sure he has a question. You're ready. Microphone. Supervisor McPherson, get it. Yeah, I thought Supervisor Leopold was gonna be speaking. So go ahead John or Supervisor. Is it okay? Thank you Supervisor McPherson and thank you for the information here. You made a point of saying we have very few cultivators and so small data sets provide big changes. Do we have any idea how many cultivation license there are in Monterey County? I do not have that data right at hand. I can get that data for you. Because as I look at this chart on the jurisdictional tax rate comparison, it seems like in a lot of areas we're 50 to 100% more in our taxes than the other jurisdictions. And other than we want the money, I don't know how we justify that kind of differential and whether there's any examples of any other area where we see those kind of differentials. And again, I don't have data. I don't have live data from a lot of other sources. And so the data set as you can see by the standard deviation swings quite widely. So I'm not sure that I can answer that appropriately. I think the thing to remember is that when we charge a grocery seats tax, it looks very different than somebody charging a square footage tax. And those differences show themselves most highly on indoor cultivation sites, right? That's where the various difference becomes significant between say what Monterey is charging for an indoor cultivation site and what the equivalency gets to be when we charge a grocery seats tax. Like I said, we have three of those cultivators, right? Everybody else for the most part is an outdoor cultivator where they're actually getting a much reduced rate compared to other jurisdictions who have a square footage rate. But our actions and our previous item lead me to believe that we are gonna be making changes to the amount of licenses in indoor cultivation. And so therefore it seems to me that it's important for us to talk about that even though our data set is small, because one thing about cannabis is it's shown a certain strength during this COVID pandemic where the state deemed it essential that people continue to buy the product. And in this era of looking at diminished tax revenue from lots of different sources, trying to figure out both how we earn the revenue that we need and provide jobs, it seems to me that it becomes important. So on the looking at the cultivation piece it seems to be important. And as I look at that data from San Luis Obispo, it looks like it's a 50% greater than San Luis Obispo, a county that we usually compare ourselves to. And Sonoma, it's hard to know exactly how to read these figures, but my reading of it is that it's also a lot more. Another community that we regularly compare ourselves to. But even if you look at the retail taxes, right? I mean, our retail taxes here in Santa Cruz County are extraordinarily higher than most other places with the exception of the city of San Jose. Again, the counties that we measure ourselves against, things like San Luis Obispo, Moneray, Santa Barbara, Sonoma, we're on the high end of all those like-minded counties or like-sized counties that we often commit ourselves to. The similar difference shows up in terms of manufacturing as well, where we're someplace twice as much as counties, again, that we compare ourselves to, or at least 50% greater than one we compare ourselves to. And then in the area of distribution, it's extraordinary because even our colleagues in Santa Cruz County have something that's, ours is three times as much as the city of Santa Cruz. And I know that there's, I've met a distributor there who's hiring 60 people. That, you know, our tax structure is different. These are jobs, especially during a time when we needed jobs. So I think this data shows me that we have a tax structure that is disadvantageous to businesses here in Santa Cruz. And I cannot think of another circumstance or another product in which our taxes look so out of whack with other jurisdictions anywhere in the state as we do with cannabis. And that's why I think we need to make some changes to make it more realistic. Supervisor Caput, this is Supervisor McPherson. As you all might recall, the tax structure has been of a concern of mine from the start. I think we were way too high to begin with. In order to see economic benefits that we're seeing in other jurisdictions, I think we have to align ourselves more closely with their structures to be competitive in this on the non-retail side in particular. I do appreciate the staff putting together this, which I requested some time ago. It is complicated because there's different tax structures. But I think I'm ready to make a motion on this, but I would like to hear from some others. But when you just look at, for instance, the city of Watsonville has a 2.5% tax on manufacturing and zero on distribution compared to what we're doing with six in each of those. In Monterey, San Luis, Santa Barbara all have lower rates. We will be able to track if whatever we do and see the impact on accordingly reports from the cannabis licensing office, whether reduction in taxes has a positive impact on our revenue structure. I'm ready to make a motion, but I would really, I wanna make, like to hear from other members of the board and must they want me to make a motion at this point and then hear from the public as well. But I do think that we should be reducing our taxes, maybe not on all segments of the operations, but I'm ready to make a motion at the right time after some public comment. This is Supervisor Coonerty. I'll jump in here if people can hear me. So this information is good. I think it's relatively unclear. So, but I guess as I look at it, there are different sectors here. So from the retail sector, we've seen year over year growth in that sector that we've seen in virtually no other sector, economic sector. And as in the COVID limitations, this will be probably second to grocery stores, the fastest growing sector in Santa Cruz County. So a two, and just as a reminder, for every million dollars sold, we get $70,000. In order, if we cut it to 5%, in order to get that same $70,000, they'd have to sell $1.4 million effective immediately or we're gonna face a revenue loss. And losing revenue at a moment when we're looking at cutting what I even think are essential services to our residents when there's no evidence that it's hurting those businesses is tough, especially when we maintain a TOT tax on hotels that were effectively shut down, we're maintaining a sales tax on businesses that are struggling to survive and restaurants struggling to survive. Why we would cut one industry that's actually doing well in this economy, cut their taxes is when we're in serious financial trouble is beyond me. On cultivation, we actually did lower taxes and I don't think we saw a particular increase in taxes. What I've heard on the cultivation side is almost entirely regulatory in time. Hopefully we fix that today, but I haven't heard from any cultivator that the tax is the issue that causes them to move. We also lower the tax on manufacturing and I haven't seen any evidence that it impacted the permit applications one way or another. If these taxes are determinative to cause people to relocate and move businesses, it's possible, but if all that means is we're just gonna, if we lower our rates, I would assume the other jurisdictions in order to keep minimal taxes as we've seen with international corporate taxes, we'll lower their rates and then we'll lower our rates and it becomes a very quick race to the bottom. It seems to me that we wanna be in line with most folks in the county and that a percent here or a percent there is not the dispositive impact on these businesses and losing large sources of revenue right now on a recreational product is, when we're facing the budget challenges we face is really not, not a good move unless people can guarantee that we're gonna see an immediate increase in revenue. But again, that takes an enormous, that'll take an enormous growth in that industry and I don't know why lowering 2% on taxes will cause a 40% increase in sales. I just don't see it. A chair, I'll briefly speak to this day. I agree with Supervisor Coonerty's assessment of it and for that matter, the board actually did lower as you know our rates temporarily and we didn't see a significant, the percentage growth that people are estimating with additional reductions. My guess is that if we just lowered it there would be some additional profits. There was some concern originally about equity issues and this isn't doing anything toward that as far as there isn't an additional compassion program for example that would be created as a result of the reduction. And also to Supervisor Coonerty's point, I mean we really aren't doing this for other industries that actually have additive taxes so something that could be akin to it at least to some degree would be the greater lodging industry which has TOT components and has gone down to zero while this industry has not at the same time and there isn't a proposal to reduce that in order to increase people coming back into that industry. So I just find it to be a little bit of a weak argument. Also it ties into a national discussion that I think that ideologically the board isn't normally harmonized with which is this concept that the supply side argument that if you just cut all these taxes we'll see a lot more revenue. It hasn't played out in history in any other economic forum but for some reason in specific to this industry that argument is playing out in Santa Cruz County. So I'm not supportive of a change beyond what the board had already done which was a reduction with the escalator to bring it back to the original rates. Is it okay if I make a comment? Yeah. I appreciate the comments of my colleagues. We should be clear on who pays these taxes which are local consumers. They pay it when they go to the retailer and they have to pay more money. So be clear just like the national debate about who pays these taxes and tariffs it's the end consumer that pays the taxes and to compare it to the TOT tax on hotels seems like a misguided attempt to equate apples with oranges because there is no industry that is taxed as high as cannabis, right? There's a state tax, there's a county tax, there's a sales tax and so the fact that hotels cannot have guests right now has nothing to do with the tax structure has to do with a public health issue. And to me, we should be thinking about ways to support industries that are local that will provide jobs during a period, the next period where jobs are gonna be in shorter supply. I get that we don't wanna blow a hole in our budget. We've had this tax too high since the beginning and our changes that we'll hopefully will make on June 16th will be helpful in bringing new taxes in but the basic equity is just looking at these issues on this chart and you can't say that it's fair in any way shape or form with any other jurisdiction that's on this chart. So that's the part where I think that we need to have some change because we are, to me, when someone's trying to play by the rules we should work to help them play by the rules. If we wanna promote a legal activity or unregulated grows or dealing, we make the legal product so expensive that that becomes a business decision where someone says it's worth the risk because the money's so good. So we wanna create a system where we have a fair tax structure that is generating revenue that's real and that is comparable to many other jurisdictions and not place our businesses at a disadvantage than the neighboring counties. There's no other industry in which we do that. This is Ryan, let me just say, there's also no other industries where we're giving people a monopoly. I would, my wife would happily pay a 7% additional tax if she got to be one of the only jewelry stores in Santa Cruz that my sister could outlaw Amazon and only so be the only distributor of books we would give, she'd be happy to. So it's that while in many ways you could argue it'd be much better for the consumer if you could buy cannabis on any corner from any store, prices would eventually lower. We've given this industry through our regulatory system a competitive advantage that it has resulted in them increasing their sales year over year over year as other sectors haven't. So they are, I don't see anyone being at a disadvantage right now. So Laforte weigh in about the ongoing sales increases. That's, the way I looked at the tax revenue is it seems like it's pretty, it's plateaued in a lot of ways. When Mr. Laforte, could you come forward and just share that information? So sorry, I'm gonna interrupt you and just say I can talk to you about where the taxes have been for the last few months. So retail, the amount of money that we've gotten for retail in March and April was less than we typically see compared to last year's at the same time, right? Which was certainly to be expected, right? Given the restriction in movement. And so, but April was about $100,000 less compared to last year for just retail. The cultivation and manufacturing side stayed steady. So we didn't see any dramatic decrease compared to what we received from them last year at this time. But remember that in that side of the industry is still pretty constrained by who's legal and who's paying taxes. So, but we haven't seen wild increases in the amount of sales that have generated taxes here in Santa Cruz County. We have not. And the amount of tax increases directly retired to the number of license that we've given. Not that their business has been more successful than a bookstore or jewelry store or a retail, other retail established. Yes, and we do not have the capability to see the taxes based on an individual retail location or an individual cultivation location. We only see the aggregate data of how much somebody is paying. Thank you. Mr. Chair, Mr. Chair. Realistic, we couldn't act on a tax cut at this time because it has not been agendized as such. Emotion would be to bring back this along with the other, what the previous item that we discussed just to consider this with a motion in June 16th and we will not be able to act on a tax cut proposal of any type right now anyway. So my suggestion is that we bring this back in June 16th to consider a reduction in taxes and some of the operations, maybe not all of them in the cannabis industry. I would second. So what you're proposing that the tax goes down, is that correct? We're not proposing any, we did not make any staff recommendations. Right. Emotion on the floor. Supervisor McPherson. Yes. Yeah. I'm just asking to bring this item back to the board on June 16th to consider any tax reduction. I believe we still need to go to public comment before we. That's correct. I know that too. Yeah. Just had a quick question. I know we're talking about taxes and how they're higher and lower with cannabis and other people, but what about liquor taxes? Do we have any idea how much is the tax on liquor compared to? I have not done any comparative study of cannabis to alcohol. Yeah. And then they pay taxes to the state also and everything like that. And cigarettes, cigarettes have like, what about $2.50 tax on top of the regular tax? Yes, again, I haven't done a comparative study on alcohol or cigarettes. Maybe the question is, Chair, do we have local taxes on alcohol or tobacco? Do we have special taxing on those two products? Yeah. The other ones are on the statewide. I know, but we don't have any statewide revenue to actually compare our taxes to everybody else, right? Well, I'm just saying in Monterey, they pay the same alcohol tax as we pay in Santa Cruz. Tobacco tax is similar in Monterey as it is in Santa Cruz. The cannabis tax is different because there's a local tax. And then, okay. And then there's a, it's written here, Canopy square footage taxes, especially popular in areas that are land rich due to the potential of producing a higher revenue stream because of the availability of cultivation space. Again, I get back to a district four. We have most of the cultivation space in the whole county, right? You have a large majority of the cultivation space. I'm not saying that it's all cultivated there. Certainly we have a significant amount of cultivation happening in Supervisor McPherson's district. But most of the retail is happening in the first district. The retail section, yes. The retail sector is different. So Supervisor McPherson, are you, while you're just proposing we come back June 16th? Well, yes. I mean, we have to continue with this public hearing, but we cannot make a, we can't move, it's not been agendized as a tax, proposed tax cut. So we'd have to wait until June 16th, but I think we should have continued with the public hearing, but the motion to, in June 16th. The current rate? The current rate for retail is 7% and everything else is 6%. 6%. Okay, so I'm just a little worried. We don't know the number that's gonna be proposed on June 16th. And that was going to be one of my questions. Okay. I don't know if it's appropriate for me to get into that discussion. Maybe I should ask the County Council if that's proper to do at this point. Yes, it's within the range of the discussion that is envisioned by the matter. So your board could have a full discussion about contemplated rates and then ask the CAO to study those and bring your board back an item on the 16th with a recommendation. Okay, if I could, what my idea was is I'm not recommending a change in the retail tax at this time because I'm concerned about the short-term loss it might cause to our tax sector for cannabis, but I would like to recommend or will be recommending lowering the non-retail tax rates of manufacturing and distribution by cutting them each in half from 6% to 3%. That's my idea. As a seconder of the motion, I would also support that. Okay, but that's not part of the motion. It could be direction. It could be direction to bring back a change at our next meeting. But that's what's probably going to be voted on. So anyway, I guess... Chair, we have to get to the public. Public comment. Can we get to the public? Yeah, well, my quick comment is the cash cow of cannabis is not giving us the money that maybe we thought we were going to get. I never thought it was going to be really high, but I heard a lot of people in the public say, well, we can afford this now because you're going to have cannabis legalized and everything going. What I'm getting at is no matter how we deal with this, it's going to keep coming back. We're not going to make everybody happy. And the cash cow is not going to produce what we thought it was going to produce, no matter what we do. Go ahead. Yes, I did. We'll open it up for public comment. Yeah, one of these issues we've been working on a long time. So thank you for hearing it again. And I've said many, many times how desperate the industry survivors that have gone through a couple of points around that. I think that the retail discussion statewide, it's around 30% decrease that I've known. That a few of my friends who have clubs have said that that's what they've seen. Even though people were hoarding in the beginning and we saw the fun newspaper articles, that's not representative. So it's doing better than businesses that are forced to be closed, but it's still on shaky grounds, the retail, the other license types, we really can't measure what the tax revenue potential of a healthy licensed cultivation, manufacturing, distribution, et cetera, are because as the last issue shows, we haven't been able to get licensed to those folks. So I think that we need to at least not escalate back up the rates to 7%. We need to do something on that front. But again, I think we got deeper structural issues than the tax rate. And then another issue that I think has been a core for me as a community member, it's not so much what the tax rates are, but how that money is being spent. I think we've generated $16 million since the inception of the cannabis business, tax, and I think most of that has gone into the general fund except for a small amount going to early childhood development. Santa Cruz city, when they recently talked about adjusting their tax rates, did something that I thought was really great is that they originally had had a 1% tax rate for early childhood development fund when they were talking about cutting their rate from 8% to other numbers on other license types. They didn't wanna reduce the amount or the proportion that was going to early childhood development. They set directing 12% of all the cannabis business tax revenues to go to a fund like that. I think that's what we really need to do. When people voted for this tax, they voted for new revenues to be spent in the community on unmet needs, not to get lost in the general fund, which I know is well-intentioned, but from everyone's perspective, we wanna see this new revenue source used in the community for new unmet needs. That's what many of the cannabis industry supported this tax for, and that's what we need to see. So I think take that into your motion, maybe if we can do it, Santa Cruz city already did. Thank you. Good timing. Any other comments here? Okay, we'll go to the community room. There's nobody in the community room. However, we do have two web comments. The first one is from Bryce Beriesa. No other comments. I'm sorry? No comments. There's two web comments. Okay. So the first one is from Bryce Beriesa. Dear supervisors, one of you mentioned earlier today, the wisdom of not being penny wise and pound foolish. The sentiment holds as it relates to the overlay high taxation of local cannabis businesses. You have an opportunity at this moment to provide us some desperately needed relief. We are deemed essential businesses yet still have zero access to federal funding, stimulus relief, our loans. We have limited and predatory. Excuse me. Options for banking, zero options for banking loans and overbundant with high taxation. 28E and regulatory fees. Despite being able to remain open, many of us are barely surviving financially due to regulatory costs, the black market, high taxation and now COVID. Most cannabis businesses owners are local businesses, operators that invest our money, time and souls into this community. It's people, employees and businesses. I implore you to listen to the guidance and recommendation of staff at the CAO. Look at the recommendation before you with long view in sight. Economic recovery is going to be a slow road. However, your decision today can immediately provide some relief and support to local cannabis businesses. We need it. We deserve to have a thriving, vibrant, positive cannabis business industry in this county. A healthy regulated industry is the best way to deter against the perils, crime and environmental destruction of the black market. Providing a tax parity with surrounding counties and allowing us a small amount of relief to invest in our employees' businesses during this crisis is smart. It's the right thing to do. Many of us may not survive the next year without it. It would be a cultural tragedy to have a local, the local operators that have paved this way to be replaced with the med men's high times and harvests of the world. Companies whose only obligation are to return profits to shareholders and have no ties to this community or history of Santa Cruz. Please give us the resources to thrive and get through these times. We have no options but your support. You have the opportunity today to give it to us. Lower the taxes and allow us to weather the storm and come out intact. We have one more. This one again is by Khalil. Both of them. Thank you. Board of Supervisors, thank you for again, evaluating the rate at which cannabis businesses are taxed especially during the global pandemic deeply affecting our local economy. The cannabis business tax CBT has proven itself to be a stable revenue mechanism for the county's general fund since 2014. The majority coming from the retail sector of the local industry. However, this is not the same industry from six years ago. And therefore we need to adjust the business tax to reflect the current state of the industry. The emerging industry now operates within statewide regulatory framework, which includes a 15% excise tax and skyrocketing compliance costs for businesses. Annual state license alone are upwards of $96,000 a year. Licensed operators have fully committed to this new framework and made good on the tax revenues they have provided to the county. But their ability to stay compliant, continue providing employee benefits and compete against a larger emerging business is quickly deteriorating. Please provide a reduction in taxes that will allow our operators to lower costs to customers, increase volume and sustain or increase the tax revenue to the county. If we want the CBT to remain a sustainable revenue mechanism during a looming economic downturn, the rate needs to come down to compensate for market changes. We have proven ourselves to be a solid partners with the county and we need this change more than ever before to sustain the tax revenues for the county. Take the opportunity to align ourselves more closely with our progressive communities around the Bay Area and allow our local operators to stay local and compete in a vastly different market than when the tax was originally enacted. And that's all for web comments. Well, we have a first and second I imagine, I think. Chair Caput, yeah. Chair Caput, if I could just say that I understand this is a policy decision. This is the thing that you folks do in your work and I certainly will do whatever you would like. I will express my concerns and given the budget situation of reducing the tax rates at this time because it's hard for me to believe that we won't see anything but a reduction in revenues from a reduction in taxes at this point. So anyway, I just wanted to provide my point of view and I know it will accept whatever you folks wanna do. It's a very difficult decision and I just wanted to let you know how that I am concerned about the budgetary impacts, especially given the situation we face in the county in our budget. Chair, could I just ask one or two more questions? How much do you know whether we're getting any tax revenue from distributors at this point? Again, I don't get to see the data that way, right? I see all the retail data together and all the non-retail data together.  I don't get to see the data that way. So you couldn't say, I mean, do you know how many license we've given out for distributors or manufacturers? Most of our distributors are self distributors and Sam can correct me if he's still in the room, but I believe most of our distributors are self distributors. So they're cultivators who are. So they're not actually paying any tax currently. And the manufacturers have an idea of how many license we have from this. I think we have about four manufacturing licenses right now. And then we have a handful of cultivators. And a handful of cultivators, yes. And do you have an idea of the difference percentage wise between retail and the non-retail? I'm not sure, I understand the question. Well, the motion is to change the tax structure on the non-retail side. The concern raised by the CAO, reasonable, is we're facing tough budget times, so we're worried about any funding source being reduced. So I'm trying to find out what's really at risk here between our retail side, those 12 or 13 outlets that we have, and then the non-retail side. Gotcha. Yeah, so retail last year accounted, I think for about 2.3 million, and non-retail accounted for around 700,000. So this change could have a couple of $100,000 effect if everything stayed the same. If you left your retail as it was. Well, that's the motion that's on the table. I'm just trying to get clarity about what the actual risk is. And I think the leaving the retail as it is has the potential to still impact sales because as the web commentator said, it's the illegal market that has the biggest impact on sales for retail. So as long as there is a strong illegal market out there, their sales are impacted, and then that impacts our tax. So I'm not sure if you just made an argument that we should actually lower the tax in order to reduce illegal sales, but. I'm not making any argument. I'm just saying that's what impacts the retail sales market the most is the black market. Yeah. Well, I mean, and so I believe that the actions that we've talked about today, whether it be in the previous item or this item, is to really create an environment that legal regulated businesses can be successful and that it doesn't provide a disincentive to go illegal or black market. And so when you have a high tax structure, that to me is an incentive for people to choose to do things illegally rather than legally. And I'd like to get to a place where we have legal operators that we can regulate can have a reasonable amounts of control. Okay. All right, Mr. Chair, this is to supervise the friend. I'd like to make a substitute motion to the motion that's on the floor. Obviously I don't support any sort of lowering rates. I don't know that we need to have an additional conversation on that. So I would just like to, I would just like to move the recommended actions, which are just to accept and file this report and not come back then in another week to consider lowering of the rates. So my substitute motion is just for the recommended actions, which is just to accept and file the report. And I'll second that my comment being that I think Bryce and Khalil's points are exactly true. And I think it's true for every business in our community and we could lower all kinds of taxes to help people in this time of crisis. But then we're having a real trade-off. I think we could lower our transportation tax. My guess is that would potentially just cause the current large transporter to move his operations from the city of Santa Cruz to the county, which would then cause the city of Santa Cruz to then cut their taxes to attract them back or to prevent that move. And then we'd have to cut our taxes and pretty soon we're arguing over pennies. So I just don't see the economic case to that we will see increased revenues from this move at a time when we're gonna be cutting really basic services for kids, for parks, for roads, for things that our community very much wants. The taxes at this moment too, I guess. But anyway, we have a motion by Supervisor McPherson. I don't know if there was a second on that. And then the other motion by Supervisor Friend is leave it like it is and not come back on the 16th. So Supervisor, we have a motion on the floor and a substitute motion. If I could ask Supervisor McPherson to restate what the motion is, the original motion that was seconded by Supervisor Leopold because what I was hearing is two different things on the record and I wanna make sure that everyone understands. I see the clerk nodding, the clerk's nodding their head that they're not clear either about what the original motion is. Go ahead. Okay, my motion would be to have staff bring back recommended reductions that I recommended and let me know the impact or... Well, they could use the facts figures, the actual facts figures and they probably can't reject the impact but I'd just like to review those reductions that I said to cut in half the manufacturing and distribution taxes from six to three and the retail to leave the same at 7%. Does that have a second? Well, I seconded that motion. You did. So you would vote first on the substitute motion, take that first. And then if that passes, then that's the end of the item. If it doesn't pass, then you go to the original motion. We go back to Supervisor Friend. Supervisor Friend's motion, substitute motion, you vote on that first. So take a roll call on Supervisor Friend's motion. We'll do that first. Supervisor Friend's first. Yes. Supervisor Friend's first. So we'll do the substitute motion first and that was to accept and file the recommended actions. Supervisor Leopold. Well, wait a minute. County council, we're voting on friends first. Yes, you're voting up. Yes, correct. You're voting on Supervisor Friend's motion first and that motion is just to accept and file the report. Period. Okay. So if I understand it, well, we had Supervisor McPherson explain his. Supervisor Friend's is saying it's gonna stay the same.  That's correct. Okay. And we'll start again with that vote. Supervisor Leopold. No. Coonerty. Sorry. Yes. Friend. Aye. McPherson. No. And Chair Caput. Aye. Yes. Two nos and three ayes. Then we have item number 11. We'll do a couple of these. We'll do real fast and then we have to discuss whether or not we'll have a short lunch break, but go ahead. Public hearing to consider proposed 2021 benefit assessment service charge reports for various county service areas and adopt a resolution confirming the benefit assessment service charge reports as outlined in the memorandum of the County CAO and Director of Public Works. Will this take long? No. It's the same with the request. So just so I'm clear, we're skipping 10 for the moment and go into item 11. Is that right? Yes. So I heard, okay, good. Okay, so good afternoon, Chair Supervisors. My name is Matt Machado. I'm the Public Works Director and one of the deputy CAOs. The item before you is a public hearing to confirm proposed benefit assessment services. On April 14th of 2020, the board adopted a resolution setting June 2nd today as the public hearing date on proposed 2021 benefit assessment service charge reports for various county service areas, CSAs. The CSA rates presented have previously been approved by the board and are outlined in attachment A. The previously approved rates are either remaining at the same level as in fiscal year 1920 are being reduced or increased per the current consumer price index rate as approved in previous elections. With that, the recommended action is that you conduct a public hearing to hear objections or protests, if any, to the proposed 2021 benefit assessment service charge report for the various CSAs, then close the public hearing and following the public hearing, adopt a resolution confirming the benefit assessment service charge reports for various county service areas. With that, I can answer any questions you may have. It looks like a lot of them are all the same, right? Yes, this item includes that all the, or most of them are the same. No changes and the changes that are happening are just the CPI, which is a very modest change. There are a total of 40 CSAs in this action item today. Okay, thank you. Any questions by the board? Okay, we'll go to open it up to the public. Anybody in the community room, no comments? Do we have a motion? Well, I think you have to say opening the public hearing. Yes, sir. Oh, I'm sorry. You would open the public hearing, ask for a public comment like you did. You asked for a public comment and then you would close the public hearing and bring it back to the board for action. Okay, but I need to say opening up for the public hearing. Yes. Okay, we're opening it up for a public hearing and comments, any comments? We don't have them. So I'll close the public hearing and then we'll bring it back to the board for action. I wouldn't move the recommended actions. We have us first from Leopold. Second. We have two seconds. Which one gets it? That'll be fine. Okay. Into the roll call. Supervisor Leopold. Aye. Friend. Aye. Coonerty. Aye. McPherson. Aye. Chair Caput. Aye. It passes unanimously. If we'll go to item number 12 and that is public hearing to consider proposed 2020 to 2021 benefit assessment rates for county service areas number 26, number 37, number 47, request the submittal of ballots for the proposed fiscal year 2020 to 2021 benefit assessments continue the public hearing to June 16th, 2020 and take related actions as outlined in the memorandum of the deputy CAO and the director of public works. Thank you chair and supervisors. Again, Matt Machado. So the item before you is a public hearing for benefit assessment rate increases for CSAs. On April 14th of 2020, the board adopted a resolution of intention to authorize and levy an increased assessment for road maintenance and operations within the districts you mentioned 26, 37 and 47. These directions were given by CSAs to increase these assessments. Additionally, the board directed public works to mail out ballots to the owners of record within the CSAs in return June 2nd for the public hearing today. The recommended actions are to open the public hearing, hear objections or protests to the CSAs 26, 37 and 47 to request the submittal of all ballots for the proposed 2021 benefit assessments for said CSAs to close the public testimony portion of the public hearing and to continue the public hearing to June 16th, 2020 to allow for tabulation and certification of the ballots. So I can answer any questions you may have. No, I just apologizing. We're rushing you. No. Yeah. It's very important what you're talking about. It's good. Thank you. I'll open it up for public, any comments from the board first? No. Okay, I'll open up the public hearing and we'll also have comments from the public. Nobody in the community room either. Okay, I'll close. I'll close the public hearing and bring it back to the board for action. I will move the recommended actions. We have a first from Supervisor Leopold. Second. Okay. But the second was by Supervisor McPherson. What's that? Coonerty. Coonerty, thank you. Either one. Okay. Ready for the roll call? Yes. Supervisor Leopold. Aye. Friend. Aye. Coonerty. Aye. McPherson. Supervisor McPherson. We can't hear you. We can't hear you. Aye. Aye. Okay. And Chair Caput. Aye. Passes unanimously. That takes us next to the closed session, right? No. Well, we have the, we do have the, we have 13 and we also have the, the- Oh, I'm sorry. Capital improvement program. Yes. Public, item number 13, public hearing to consider County Service Area 48, County Service Area 4, Fire Protection Assessment Service Charge reports for fiscal year 2020 to 2021 and adoption of resolution confirming the service charge reports of CSA 48 and CSA 4 as outlined in the memorandum of the Director of General Services. And that's you. Hi. How you doing? I'm doing well. How are you? Yeah. Thank you. Members of the board, this item is before you today as you adopted a resolution at your May 12th meeting to set a public hearing to hear the CPI increases for CSA 48 and CSA 4 for the fire protection areas covered under your cooperative agreement. This is an annual process that's brought before your board to consider the annual increase for the CPI for those two CSAs. Any comments, questions from the board? I don't hear any. Okay, open up public hearing. I'll open it up to the public hearing for item number 13. And any comments from the public? I have one here. Hi. Okay, come on up. Sure. Item 19, or what about the agenda? No, item 19 was a consent item agenda that we already voted on. This is on the CSA 48 contract or the, not the contract, the annual rate tax rate for both CSA 48, which is county fire and CSA four, which is Paro Dunes. To this, oh, very distance widely. And then the, because the benefit assessment shall not be levied up for wild land or watershed fire suppression. Located in the state responsibility area as defined in section 4102 of the public resources code, but the money's gonna go into them while there's currently a firing against the CSA, the CSA 48 that was passed. The public pass was not overvalued. It's counted with just a minimal amount of input by the landowner without having a prolonged discussion of where all this money was going because it was all of our understanding that measure G was gonna go, part of that was going to them for Cal Fire and none of it went and went to go pay for your other financial responsibilities that goes in the general code amounts to go pay for the employee's retirement funds and such. So with the smoke and mirrors and stuff, the money being moved around, more money is being now generated because it was taken away from what we voted on measure G in the first place. So just concern that there's not a benefit to pay all this money in advance and to pay it yearly because if that CSA 48 bond is revoked, where's the money gonna come from next? Okay, so are you commenting that the vote was not correct or? The process of the vote was not correct. And I believe currently there's a lawsuit going forward to try and get it revoked. Chair Caput, I might be able to provide some additional information, Chief Larkin. Yeah, the benefit assessment that the board of supervisors are addressing today is not the benefit assessment that was passed in January. This was a current benefit assessment that was passed in 1997. This is an annual increase for the CPI on that benefit assessment that was passed in 1997. Okay, thank you. Thank you for your comment, okay. Anybody downstairs? There's nobody in the community room, but we do have one web comment. This is from Charles 80. Dear Chair Caput and supervisors, as the consultant representing the two homeowners associations at Pajaro Dance, I am commenting remotely today in the spirit of the times to report that the association have no objection to the proposed rate increase for CSA four. Pajaro Dunes Community Affairs Committee has representatives for both HOA boards and has worked closely with Cal Fire in reviewing budget details, costs and expenses. We greatly appreciate the staff work done by Cal Fire and their positive collaboration with Pajaro Dunes. In some Pajaro Dunes leadership finds that the proposed rate change is appropriate and sufficient. Thank you, Charlie, Eddie, Eddie consultants. Thank you. We'll close the public hearing and bring it back to the board for action. Well, I'll just say that Measure G does go to our general fund. Our general fund does help pay for a portion of County fire. I support this and I make the motion for the recommended actions. I'll second. Can we have more? Aye. Passes unanimously. That brings us to somebody mentioned something else here. We have the CIP, which would, we'll take about, the presentation will be about 15 minutes and then whatever questions the board have. So it's up to you if you want to continue and we can finish it up. You want to take a short lunch break and then?  Okay, so he'll, he's going to do about 15 minute presentation. This thing? What about the other board members? You want to do this one now or bring it back in two o'clock? Fine now. Okay. Okay. So you want to announce, so go ahead and announce the item. Oh, I don't have it in front of me. That's the one that's on me off. Here you go. It jumps. Okay. Conduct the studies. Oh, it is here. I'm sure I'm sorry. Conduct the study session of the 2020, 2021. Hold on a minute. What? We just had a fail of the community room and we want to make sure even though there's no one down there that it's open. No, but we've just lost everybody on the teams. Oh. So, yeah, I would suggest you take a recess at this point and we come back and however, whatever you believe is appropriate until we can get everybody back online. Five minutes. It's reasonable. Probably about five minutes, yeah. Yeah. So we just take a five minute break. Five minute break? Five minutes. Okay. We'll take a five. Yes, sir. Okay. Should I read it? Okay. Conduct a study session on 2020, 2021, capital improvement program and direct public works to present the 21, 22 capital improvement program incorporating all changes that the board adopts as part of the 21, 22 budget hearings in capital improvement programs related to budget appropriations on or before May 25th, 2021, as recommended by the deputy CAO and the director of public works. Thank you, chair and supervisors. Good afternoon. My name is Matt Machado. On May 19th, 2020, the board accepted and filed the 2021 capital improvement program document and scheduled a study session for today. The 2021 CIP identifies capital improvement projects proposed for the unincorporated areas of the county as well as improvements to various county facilities located countywide. With me today, a few members of our staff are joining to help this presentation. And so I'm going to introduce them today right now and then we'll go through this PowerPoint. I will comment now that the recommended action is to conduct a study session today and then we will receive all of your comments and incorporate those into next year's item. That's recommended action number two. So with me today is Travis Carey, director of capital projects, Steve Wiesner, assistant director of transportation, Jeff Gaffney, director of parks. And so I'm going to lead us off here. So the county CIP is a five year plan. It does forecast our capital needs over five years with fiscal constraint. So it's not all of our needs, but it's the ones that we can afford at this point. And it includes projects for public works, county facility projects, libraries, health, safety and parks. We do get guidance on how to manage our CIP through state code, county code and planning commission code, as you can see here. Our planning, at the planning commission meeting last week, we did receive multiple comments from planning commissioners. We've shared those here, their questions and our answers. I won't read them, but you can see them that there were a handful of comments, questions and answers last week. We do update our CIP annually. This has been a practice for the past couple of years. This year we have continued to update the format. As you can see, we've also identified and added in our county strategic plan components. We've now provided more detailed funding sources and added expanded details to each of our projects. The CIP overall includes 113 projects. That excludes our storm damage projects. Those 113 projects are valued at $803.4 million. You can see the breakdown. The next two slides will further break this down. This is by sheer number of projects. You can see that we do have a lot of great parks, open space and cultural service projects. In terms of value, those projects are predominantly in our flood control and drainage for the highest value. And so next up, I'm going to introduce Travis Carey to give us a brief presentation on our county facilities. You can do it. Yeah, great. Thanks, Matt. Good morning, chair or good afternoon chair and board. Travis Carey, director of capital projects. And I'm very pleased to announce that we now have a fully staffed capital projects division and public works. We have three licensed landscape architects. Damon Adlow is managing the library projects. Nicole Steele is working on juvenile hall and several solid waste projects for us. And Rob Tidmore is our newest project manager working on rail trail, animal shelter and a whole bunch of other master planning projects for public works and around the county. We're also assisted by a real property and Kimberly Finley is our new chief real property agent assisting us with related property agreements to support capital projects. So very pleased to announce that team. Next slide. That allows us to provide a comprehensive project management services for the county. This is an example of some of our projects currently that we're working on. And then in addition to this, we're also doing some master planning services, as I mentioned for sanitation DPW and other long range facility planning for the county. Next slide. This is just a listing of our current library program. So we're currently working on six library projects and the funding here is all measure S and county library funds for all fully funded projects all in various stages of development. And I'll go over a little bit more detail on these. Next slide. So this is a juvenile hall project. It's actually two projects. This is the recreational facility. Next slide. And this is the larger renovation facility. And we've decided to combine these two projects. So you'll see that coming to your board on June 30th for approval of spans plans and specs and approval to bid. And we also have received all permits and the real property agreements are under negotiation almost complete with those funding here is SB 81 round one and round two and also county bonds at this time fully funded. Next slide. This is the animal shelter renovation project. Just getting started on this one. There's been some design work here. The development permit has been issued and we're currently working on an updated engineer's estimate and a phasing plan for this project so that we can maximize our budget with the phased project. Next slide. This is the Monterey Bay scenic trail segments 10 and 11. We call it the rail trail project. Also, this is the environmental phase of the project pre-construction phase also known as we're currently working on a cooperative funding agreement. That's RTC fully funded with measure D. We're looking to come to the board in June and then for approval of that cooperative funding agreement to provide funding for that. And then coming back in August to the board for approval of RFP to select consultants. Next slide. Marvista project, we're supporting the RTC with this project and it's been incorporated into their Highway 1 work. Next slide. Okay, here's the library. The Aptus library is a large design build process. We've actually made significant progress with the design build selection. We've conducted interviews with design build teams. Proposals are actually do this Friday for that from the top three firms. We did make some significant changes to the selection process, which we feel like significantly will improve that process quite a bit. So we're coming to the board August 4th for a ward of that project. Big team involved in that a lot of community input. And we feel like we've really pulled that project together with a little bit extra work, looking at building layouts, parking, the civil engineering floor plans, and a lot of the design elements and community desires for that project. So that's gonna be coming soon. Next slide. Felton library, this project, as many of you know, is complete. We are still doing a little bit of closeout. We did open up the facility just before COVID. We do have a temporary occupancy permit here. So it is an operating library. And we're just working on finalizing some of the closeout activities. Next slide. Another library project, Boulder Creek. We did bid this out. We had a unsuccessful bidding. We're rebidding. And that is actually coming back June 16th to the board to issue a new bid for that project. Next slide. The sale of each library is actually in construction. It's going really, really well. And we're looking at completion in fall of 2020. Next slide. Bivoke branch, it's in the construction documents phase. Primarily interior renovations on the facility. So this is a little bit further out, but making good progress on this. Next slide. And this is the library annex also in construction document phase. It's a partnership with the parks department for some of the operations that facility. So we've been involved with parks and the libraries and looking at how to best plan for this. And this is at the Simpkins Swim Center location. And with that, I'm going to turn it over to Steve Wiesner. Thank you, Travis. Good afternoon, board and members of the public that are still with us. I'm going to present some of the projects that public works has in the program section of the CIP. We have many projects in the CIP. So instead of presenting them individually, I'm going to describe the projects by their category. According to the programs that public works is responsible for most of the projects fall within these kind of five basic categories, pavement management, bridge projects, community development and congestion management projects, storm damage repair projects, and then finally community service area and special districts. So next slide, please. Okay, so this is our pavement management program. I think it's no secret to this board and to our community members that we have struggled with identifying funds for pavement management over the past approximately a decade and a half. However, with the passage of measure D and the new waste haulers franchise fee for road impacts combined with some very critical federal highway regional surface transportation funding, the county now has a much more robust pavement management program. And in fact, this summer is going to be kind of a banner year for us. We're putting out the largest pavement management program we've had in well over a decade. So listed here are some of the projects that we've recently completed and some of the ones that we have to look forward to. Okay, next slide. And so this slide shows the bridge replacement program that we have in place and the county is responsible for approximately 150 bridges county wide on our 600 mile road network. And many of these bridges are nearing the end of their useful lives or have some type of geometric or structural deficiency, which requires either some type of rehabilitation or full replacement. So the good news is, is that the highway bridge program, the federal bridge program is still alive and well, and it provides pretty critical funding for these needs. The county currently has 18 bridges in the program that are all in various states of development. We anticipate trying to put out like one bridge a year and we were actually very well poised to do that until we got hit with this 2016, 17 storms. So the program's taken a little bit of a backseat to the storm repairs, but it's still moving forward. And in fact, we just recently completed the full bridge replacement down in Coralitos area. That's the Redwood Rdge bridge replacement. Next slide, please. So this slide encompasses what I kind of characterize as community development slash congestion management projects. They're projects on our road system that are comprised of road widening projects, traffic signal installations, operational improvements, streetscape projects, and pedestrian facility and bike lane projects as well. Some of these projects, you'll notice they're leftover from the former redevelopment agency era and have just a small amount of seed money from traffic impact fees. So we can continue to develop these projects and seek grant funding to hopefully implement them in the future. Others on the list are long-time community development projects that include a myriad of roadway and roadside improvements to modernize or beautify a downtown area like the Aptos Village project or Sea Cliff area project as well. And then other projects are for traffic and operational improvements, such as signalized intersections or right-hand turnpockets and so forth. So they're all at various stages of development and you'll see some of them come to fruition within the next year. Next slide, please. Thank you. Okay, so this page represents the tremendous amount of work that we have accomplished and also we have ahead of us for storm damage repairs. As your board is aware, the monumental task of repairing the many roads that were damaged during the 2016-17 intense winter storms. It's a huge task for our department. It's been one of our primary focuses over the last couple of years. To date, we've completed nearly 42 permanent repairs on these sites. We have over 20 that are either in construction today or will be by mid-summer. However, even with all of that, we still have approximately 155 sites left to repair, which is estimated to cost 75 million. So we're just gonna, we continue to chip away at the stone here. Like I said, it's a primary focus for us in transportation. We continue to work with our state and our federal partners to deliver these projects as they provide a lot of the critical funding. I think as your board is aware, most of the lion's share of our SB1 funding is currently being used for the local match, which is required for these projects. So this program as it moves forward, we'll continue to work with all of our federal and state partners, Cal OES, FEMA, FHWA, Caltrans to make sure that we're able to repair all these roads. Okay, and so the last slide. Public Works, so this represents a community service areas in special districts. And Public Works is responsible to maintain and operate and administer many community service areas in special districts throughout our county. Many of the CSAs in special districts are set up to provide localized wastewater collection systems, treatment systems and clean drinking water facilities. And several of the projects that are listed here will come to fruition the next several years as well. They're all in various states of development. And so with that, and in the spirit of brevity, I'm gonna turn it over to Jeff Gavney and he'll cover parks, open space and cultural services. Thank you, Steve. And thank you, board, CAO's office for having me here. And I wanna commend DPW and Matt Machado and his crew. They're doing a great job and we really appreciate all the support that they've given us with more further ado. We'll go ahead and move along. As Supervisor Leopold mentioned earlier, Santa Clara Park, we just didn't notice completion. It was started with zero money for the most part and through the support of Supervisor Leopold's efforts and the CAO's office and of course our nonprofit partners, especially Mariah Roberts and Trisha Potts, we were able to get this thing done and got it a little bit under budget, believe it or not. And then the timing was pretty good. So really excited about that. Next slide. Fault in Nature Discovery Park, another one that we didn't have any money for. We were able to get that moving along and got it right to open up unofficially on the same day we opened the library. It's a perfect blend of library and outdoor education, really excited about that and happy we were able to get it open. And that was Supervisor McPherson's efforts as well, getting us a few extra dollars from the state. So thank you so much. Moving on. Davenport Landing. I know Supervisor Community has been looking for this bathroom for a very long time. It took us a couple of years. We finally got it replaced and it was very actively used the day it was installed and it looks good and happy to get as many facilities as we can. Always excited about bathrooms. Sea Cliff Village Park. We were able to actually get a skate park featuring here. Supervisor Friend was able to give us a tremendous amount of effort. We also some local philanthropists, both Richard Novak and Roland Rebley were able to give us several hundred thousand dollars. So we were able to get that done. We now have our County Park Friends fund raising for almost another hundred thousand dollars. They have about half of that right now to finish out that park. So pretty exciting. We should be close to getting that done. Moving on. And then Heart of Soquel. Another didn't really have very much money. I had a few dollars but we're able to get large grants from the state and this is a very exciting completion of the town plan in Soquel and it connects up several main streets for walking paths and pedestrian, I mean bike trails as well. So more than ever right now this is a very valuable asset that will be adding to the list of places we have to go for people in our County. Should be actually finished in the fall. Hidden Beach, also with County Park Friends. They currently have a group of local neighbors that have pledged to raise a hundred thousand dollars to match our hundred and some odd thousand dollars that we have and we should be able to replace the playground and it'll be for the most part inclusive as much as it can be. Won't be completely inclusive but we'll do the best we can. Thank you. So with that, we'd like to turn it to the board to conduct the study study session and we'll take your comments and questions and incorporate those into next year's CIP and we're here to and available to answer any questions. Okay. Bring it back to the board for questions. If we could try to make them brief so we can finish up everything. Hello, this is Supervisor Mayer. My person, I just wanted to, some points. You know, congratulations to Public Works, Parks, everybody. It just shows what we can do and with the support of the community too through some tax measures that we've passed, what we can do when we have some resources, what you have done to date and what you have underway when we've had the committed funds to do these projects is truly remarkable. So thank you very much, job well done and I'm glad we were able to get some commitments and get these things going previous to our COVID-19 experiment, what we're doing now, what's happening to us today. So thank you very much. Appreciate it, everybody's to be commended. Chair, I'll just ask one or two questions. First of all, as we mentioned this morning on the consent agenda, this grant application for Soquel Drive seems like it could really be a game changer in terms of safety. It'd be great to add that to this document because I think it's worthwhile and we should trumpet that when we can. Absolutely, we will add that in for next year. The other thing, the question about Capitol Road and widening is something that's gonna require community discussion as well. And so I just wanna put that out there that I understand it's in the book but we haven't really had that conversation with the community yet. And so I know it's on there for 2025. So we need to do that if we're gonna be serious about it. And then just a clarification on the date for the Live Oak Library Annex. So that showed June 2022 as it finished. When does the construction start on that project? Or do we think it's gonna start on that project? So we're actually still working on that. I can get back to you on that question. We are in the midst of a bit of a redesign for a couple of budget issues but the planning on that is going fairly well but we do need to regroup a little bit in terms of looking at the programming and how the partnership with Parks is gonna work in the funding issues that we have. So I'm still moving well ahead. We're in development and construction documents. So I can get you a better update on that project but it is moving along fairly well. We had pretty good design meetings over the last couple of months on it. So it's definitely moving in. Yeah, well, I'd love to get information about what it looks like now. And then the animal shelter, when do you expect that work to begin? That's uncertain in this time. So we're just this week we received revised engineers estimates and that project is looking at some funding issues. So we're looking at how to develop the specs and the plans to create a phased project so that we can make sure we're maximizing the value there and leave the future phases in a good place to when we can do some additional fundraising for that project to fund the entire thing. So I think that we're just about done with plans. We're actually in the development permit has been issued. We're first comments already back from building department. And so we'll hopefully be having an actual building permit but we do wanna make sure that the plans are all up to snuff and then I think we need some direction on the budget with that project and the phasing will likely come back for direction on that. So, and it's a bit of a staffing issue too but it's definitely moving ahead. Our new project manager is managing that project and it's come together. We have a new CM on board as well. I'm coordinating that project with the CEO's office. So we're kind of taking over management of that project. So definitely look at some serious progress in the next couple of months. I look forward to all the things that are listed in here. They're gonna be happening next year and in the years out. Thank you for your work. Thank you. Chair, this is Supervisor Freitman. I just wanted a very briefly thing, public works and parks because in the last three years you've done more on roads and parks and libraries than we've been able to do in the last 30. And as Supervisor McPherson noted, it goes to show what can happen when we have new funding coming in but it also I think has a lot to do with the leadership in those departments. And I just wanted to make sure that you know that we very much appreciate the work that you're doing on behalf of the community. And this is Supervisor Coonerty. I just wanna echo that. I really appreciate the work and the creativity and it's nice to have a little bit of good news. So thank you. Thank you for bringing in some good news today. Any other comments? Okay. I'll make a quick comment. I won't ask for an answer now because of the time constraints but Green Valley and Casterly Creek and then the Hula Hand and 152 and then also Buena Vista landfill transfer station. And I wanna thank you for all the work you're doing. I know we're pushing everything as hard as we can and money seems to be disappearing as we speak, right? With the pandemic and everything like that. But we will get through this and we will get these projects done. Parks, wanna thank you for what you're doing too at the time and those pictures of the kids playing in the parks and everything. I can't wait to see that really open up like it was in the past. I got a lot of kids at home and a couple of weeks ago when the playground areas were closed, they were going, are we breaking the law if we go down the slide? I mean, that's hard to answer, right? And so we gotta get back to normal and the beautiful pictures of that park and supervisor Leo Polz area. What's the name of that one? It's called New Haven. Leo's Haven. Yeah, it's beautiful, just wonderful. We gotta get kids out there and use it. That's what we built it for. Thank you. We'll open it up for the public hearing. No, we'll open the public comment. And if we have anybody, okay, nobody. There's no public comment. Bring it back to the board for action. Recommended actions, I think it's just accepted file. So I would make that motion. Second. Then we have first and second. Bill Cobble. Supervisor Leopold. Aye. Friend. Aye. Coonerty. Aye. McPherson. Aye. Chair Caput. Aye. Thank you, board members. That concludes our regular meeting. We do have a reportable item from, I understand item B. Yes, that's correct. After we have closed session, we will come out and report on that. And now we'll go into closed sessions. Okay. We're reporting on item B in closed session. I'll let, okay. Okay, we're reporting on item B in closed session. And I'll let County Council explain it. Thank you, Supervisor. The board has authorized our office to file litigation in one matter. And we will be following up on that and serving that shortly. Thank you. That's it. Okay, thank you.