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ADOPT FINDINGS APPROVING AN EXCEPTION TO THE COMPETITIVE BID PROCESS TO ENTER INTO A COOPERATIVE AGREEMENT WITH FREEDMAN & KOSKI, INC. FOR THE DEVELOPENT OF A SUSTAINABLE REGULATORY CANNABIS PROGRAM
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Adopt findings approving an exception to the competitive bid process and authorize the City Manager to execute a Cooperative Agreement with Freedman & Koski, Inc. in the amount of $194,415 for development of a sustainable regulatory structure for personal use and commercial cannabis businesses within the City of Stockton; and
2. Authorize the City to take all necessary and appropriate actions to carry out the purpose and intent of the motion.
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Summary
Staff recommends entering into a Cooperative Agreement with Freedman & Koski, Inc. to acquire professional services to help analyze and establish a proposed regulatory framework for additional cannabis business activities. On November 7, 2017, City Council adopted ordinance 2017-11-07-1502, which made changes relative to the City’s medical cannabis permitting program and banned additional medical cannabis businesses and all other adult use cannabis businesses. At this meeting, City Council directed the City Manager to review the City’s current cannabis program and to analyze options for the program, including adding business activities to the program. Examples of additional business activities are manufacturing, transportation, microbusiness operations, and distribution.
On January 9, 2018, the County of San Joaquin approved a Cooperative Agreement for consulting services for the development and implementation of a sustainable regulatory structure for commercial and adult use cannabis. During the RFP process to determine the best qualified consultant, the County adhered to standard procurement practices. This selection process deemed Freedman and Koski, Inc as the best suited vendor to conduct this analysis. The City proposes to enter into a Co-operative Agreement for consultant services in the not-to-exceed amount of $194,415 (Attachment A). The consultant will provide an analysis of current regulations, research of business activities not currently allowed under the City’s Municipal Code, facilitate with public engagement and outreach, and draft regulations for consideration by the Council, Staff recommends approval of a Cooperative Agreement with Freedman and Koski, Inc.
DISCUSSION
Background
On June 28, 2016, the Council adopted Resolutions 2016-06-28-1503-01 and 2016-06-28-1503-02 to place two qualified initiatives (Measures P and Q) before voters on the November 8, 2016, General Election ballot. The two initiatives sought to remove the prohibition on medical cannabis (marijuana) dispensaries, allow medical cannabis cultivation businesses within the City, and allow an increase to the business license tax on medical cannabis and cannabis-related businesses. Both measures were approved by the voters.
Measure P did three things: lifted the ban on medical cannabis dispensaries, expanded the maximum number of medical cannabis dispensaries, and allowed the establishment of medical cannabis cultivation locations. Measure P amended Chapters 5.10, 16.20, 16.80 and 16.240 of the Stockton Municipal Code (SMC) to:
• Remove the prohibition on dispensaries;
• Allow up to four (4) medical cannabis dispensaries in certain commercial and industrial zones, including the two (2) existing dispensaries;
• Allow up to four (4) cultivation sites in industrial zones;
• Impose location restrictions for dispensaries and cultivation operations; including distances from sensitive locations;
• Require a Conditional Use Permit (CUP), Operator Permit, and permits for all employees; and
• Prohibit dispensary owners/operators from owning/operating cultivation operations within the City.
As enacted, Measure P requires two types of permits for medical cannabis businesses: a CUP approved by the Planning Commission, and an Operator Permit approved by the Chief of Police. The CUP must be obtained prior to applying for an Operator Permit. The measure also sets zoning standards that restrict the location of dispensaries and cultivation facilities, including separation distances from sensitive land uses and from other cannabis businesses.
On June 27, 2017, the Governor signed into law Senate Bill 94, the Medicinal and Adult-Use Cannabis Regulation and Safety Act, which established a single system of administration for cannabis laws in California. This bill combined the Medical Cannabis Regulation and Safety Act and the Adult Use of Marijuana Act of 2016 (Proposition 64) into a single system.
On November 7, 2017, City Council adopted ordinance 2017-11-07-1502, which made changes relative to the City’s medical cannabis businesses permitting program. This included banning non-medical cannabis businesses. Adoption of the ordinance addressed items referred by Council for reconsideration, implemented a ban on additional medical and other cannabis businesses, placed a ban on outdoor personal cultivation, and placed certain restrictions on indoor cultivation.
During the meeting, City Council directed the City Manager to pursue an analysis of the City’s current program and to analyze further options for expanding the program.
Present Situation
On January 9, 2018, the County of San Joaquin approved a Cooperative Agreement to provide consulting services for the development and implementation of a sustainable regulatory structure for commercial and personal cannabis. During its RFP process to determine the best qualified consultant, it adhered to standard procurement practices. This selection process deemed Freedman and Koski, Inc as the best suited to conduct this analysis. The City proposes to enter into a Co-operative Agreement for consultant services in the not-to-exceed amount of $194,415. The consultant will provide an analysis of current regulations, research of business activities not currently allowed under the City’s Municipal Code, facilitate with public engagement and outreach, and draft regulations for consideration by the Council.
If approved, the work will be scheduled to commence immediately after the contract is executed and will be completed by July 2019. The proposed scope of work will include nine phases for the implementation of a regulatory system:
Phase 1 - Project Initiation
Phase 2 - Stakeholder Engagement
Phase 3 - Draft Regulations
Phase 4 - Environmental Review
Phase 5 - Workflow Development and Staff Projections
Phase 6 - Data Collection
Phase 7 - Review of Personal Cultivation Ordinance
Phase 8 - Public Hearings and Outreach
Findings
Stockton Municipal Code section 3.68.070 provides for an exception to the competitive bidding requirement in cases where findings support and justify the exception. Specifically, Section 3.68.070 (A) (5) provides for an exception to competitive bidding for Cooperative Agreements through other governmental jurisdictions. Below are proposed findings to support and justify an exception.,
1. The County of San Joaquin entered into a Cooperative Agreement with Freedman & Koski, Inc to provide consulting services for the development and implementation of a sustainable regulatory structure for commercial and personal cannabis, and the agreement allows for third parties to contract for the same services.
2. The County conducted an RFP process to determine the best qualified consultant and adhered to standard procurement practices after which Freedman and Koski, Inc was determined as the best suited to conduct this analysis.
3. The RFP documents used by the County of San Joaquin have been assessed by the Administrative Services Department’s Procurement Section as compatible to the City of Stockton standards with regard to the formal process, pricing, awarded contract, and language allowing public agencies to avail of such process and pricing.
4. Use of a Cooperative Agreement will streamline the procurement process saving time and money.
5. Freedman & Koski, Inc. is an experienced and professional firm that can provide these services for an organization of the size and complexity of the City of Stockton.
6. The Community Development Department is currently recruiting for a number of key leadership positions, and it is in the public interest to acquire professional services to conduct the analysis and develop regulatory proposals for Council consideration rather than further delay the project.
FINANCIAL SUMMARY
The not-to-exceed amount of the agreement is $194,415. Sufficient funding is available in the Community Development Department, Planning and Engineering Division Account No. 048-1825-510.
Attachment A - City of Stockton Cooperative Agreement