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
and
and and I will answer.
All right.
Good morning.
I will now call the City
council meeting of Monday, JUNE
22nd 2026 to order that
the clerk please call the Roll
Council member Campbell your
government Council member
Whitburn here Council Member
Foster Council Member Von
Wilpert Council Member Council
PRESIDENT Pro Tem Lee here
Council Member Can't be out
here Council Member Moreno
Council Member Julio Rivera and
Council PRESIDENT LaCava
present.
Also attending the meeting are
City Attorney Heather Ferber,
independent budget analyst
Jillian and Elina of Council
Affairs advisor in the mayor's
office.
But as I learned myself here
Deputy City Clerk Kevin Smith
All right, thank you Deputy
Clerk a quorum is now present.
We will begin this morning with
the invocation by Deputy Clerk
Smith followed with an
acknowledgment and the Pledge
of Allegiance let by council
member Campbell Brandt.
Those who hold office in
the city a spirit of wisdom,
charity and justice that were
steadfast purpose They MAY
faithfully serve in their
offices to promote
the well-being of all people.
We respectfully acknowledge
that the communication or
the original inhabitants of
the Unceded land now known as
San Diego Despite enduring
the horrors of genocide and
colonization, the community
spirit remains unbroken.
We honor the resilience of
their ancestors who fought to
protect their culture and land
and today they carry their
legacy forward ensuring that
their traditions continue to
thrive and gratitude and
strength We stand with Cooma,
our nation connected to our
past and committed to a
thriving future.
We place the flag, place your
hand over your heart and let's
begin by going to the flag
United States of America and to
the Republic for which it
stands one nation under GOD,
indivisible with liberty and
justice for all.
>> All right With that Deputy
clerk, please go over how
the public can offer their
testimony.
>> Thank you, Council
PRESIDENT.
I will now now highlight
the slide on the screen that
reviews how the public can
offer their public testimony
during today's meeting.
If you are in person please
complete a speaker slip located
at the entrance of chambers and
bring it to the front of
the room No further in-person
testimony will be taken once
the Council begins Virtual
testimony for better meeting
management purposes each
speaker will have one minute
per item per person.
If you would like to speak on
three or more items you will
have a maximum of three
minutes.
All right.
Thank you Deputy Clerk And as a
reminder non agenda public
comment which will be taken at
the end of the session with
the opportunity to speak freely
on items within city
jurisdiction items on
the docket we encourage
the public to offer their
testimony to inform the Council
members of their consideration
or deliberations on that docket
item.
So with that Deputy Clerk
please read the closed session
items into the record.
Conference with Legal Counsel
Existing litigation pursuant to
California Government Code
Section 5495 6.91 c.
S one Sandra Silva versus City
of San Diego at all the to
repeat versus city of San Diego
c.
S three Maria del Rosario Nunez
Munoz versus City of San Diego
c.
S four Jesse Torres versus
Civil Service Commission of
the city of San Diego c.
S five Denise Wadsworth at all
versus City of San Diego at
all.
All right.
>> With that please proceed
with public comment.
>> Thank you.
We will begin with in-person
public comment.
Jacob Lewis Edwards please come
forward.
You are requested to speak on c
us one c us two and see us
three.
>> You'll have three minutes to
speak.
Thank you members of our city
council and allow me to speak
in front of you.
I've spoken from you about many
things and these items include
lawsuits to the city of reading
slips and falls and such.
i'm going to speak upon myself
now.
I usually speak upon for what
is going on in a general sense.
I spoke to you about how our
cyber networks were hijacked
going around eight years ago.
My uncle his possession of
the dhs over our country
cybersecurity networks
hijacked.
I'm sorry to interrupt.
Can you speak to the closed
session items that you
identified as opposed to a now?
Yes, I am getting to that, sir.
I'm getting to that And that
handful of federal field agents
assisted the mob in hijacking
our federal government agencies
flooding terrorized along
the way by them pestered,
tormented, harassed, harassed
any trace of anything I've gone
through wiped out and it
continues to this day now is
prevented that until I get into
a shelter if I am able to get
into a shelter and that is here
in the city.
It's set up there on customer
tormented, harassed, terrorized
people, given assignments
within the shelter to hurt me.
And it all comes from federal
activity currently and
prevented from getting into a
shelter.
I sleep at the front door here
at the Civic Center to stay
safe under a camera.
But I go through even here I
wouldn't sue the city of San
Diego.
I love this city but I I'd like
to bring to your attention I
mean I could file a lawsuit but
I'm not but I'm going to bring
it to your attention.
Just two nights ago sleeping
right here at the front door.
Three guys nice designer jeans,
nice shoes And it was overnight
standing right over me loudly
conversating being rude.
It was very unruly over
somebody trying to sleep.
I mentioned that to them so
please have some consideration.
And I mentioned how federal
field agents who terrorize me
will set people up to do this.
I'm not saying that's the case
but it sure seems so.
They got very angry at me.
One of them pulls his belt off,
stands over me and says
Threaten to beat me in a very
aggressive threatening manner.
I said Now you're going to
threaten to beat a homeless guy
that you were standing over.
I said Really?
He got more abrasive cop bag
that he So I walked off and
called 911911 dispatchers will
not take a report from any of
the activity that I've gone
through in the past It struck
me from reporting anything
The dispatcher wanted me to
confirm my telephone number
before he would dispatch
anybody in an emergency call.
>> That's not normal protocol
in any city.
Usually it's a dispatch
immediately.
That's what I got.
Thank you for your comment that
that concludes the witness who
died.
And for the record you did not
speak to any of the closed
session items so thank you.
I'm a human being.
That does conclude in-person
public comment.
I've started the five minute
timer in council chambers.
We will now turn to the virtual
care in which there are
currently three participants
wishing to speak.
We will first go to original
draft.
Could you please indicate which
closed session item or items
you wish to speak to me?
I'm going to touch on all of
them.
Okay.
You have three minutes.
>> Please proceed.
Okay.
So with these continued trips
and fall incidents I mean it's
quite ridiculous how much money
we wind up spending to in
settlements when you know just
these problems can be fixed and
you know, knowing that someone
has tripped and fall fell in
these areas or had an incident
there, you know, have you gone
and mitigated that?
Is that something that you
know, was instantly put on
the list of things to do to
make sure that there won't be
other incidents that arise?
And I find it interesting as
well that some of you say this
case arises from a slip and
fall.
This case arises from a slip
and fall and then it's like
this matter arises from an
alleged trip and fall on
the sidewalk.
So I mean what leads you to
treat the case in that manner
And then for you you know
the case five in the Wadsworth
case, you know this one also it
says this case arises out of an
alleged scooter incident But
this is an actual death.
Somebody died and due to
dangerous condition.
So I feel like when you guys
want to, you know, go under
the Brown Act and say that
you're like providing just
enough information for a
summary I mean you're leaving
out some pretty significant
information and you know, for
the people to know and you know
to for someone to have died due
to this incident you know, and
you to to consider it alleged
in the other ones you know are
obviously true or whatever you
know it just kind of discredits
the person dying it feels like
And then with this Jesse Taurus
case and the Civil Service
Commission, you know, this
officer was engaged in
misconduct off duty.
And so, you know, officer
should be held to a, you know,
standard much like the people.
And I find that the people are
held to a higher standard than
law enforcement and or any kind
of public official.
And you know, when the people
engage in crimes, you know you
want to hold them accountable.
But then we have, you know,
officers whether it's on duty
or off duty and they're engaged
in misconduct abuse, you know,
abuse of power or different
things like that.
I mean.
Andrea Ebbing you know, within
Anthony Warner I mean he
brutally assaulted her and
she's sitting in jail right now
and they made her do a
competency evaluation and they
have deemed her incompetent
which is absolutely ridiculous
which means that stalls of
proceedings and all of this And
so it's like you guys wind up
criminal izing the people when
they've been abused by law
enforcement.
So I mean this man needs to be
held to a standard much like
the people and even higher I
would say thank you very
comment.
The caller did speak to all
the closed session items So
thank you very much.
Our next virtual commenter is
with the caller with the last
four digits 8700 please tell us
which items you wish to speak
to and begin your comments.
Excuse me.
Thank you.
Deputy Clerk Joy is Senator and
I would speak on all of them.
Okay.
Please proceed.
And number one which is a trip
and fall accident again I'm
going to speak to the public
deer public I really encourage
you to claim your own self
safety and be your own advocate
when you're out walking as I
try to do because it's
dangerous out there on
the sidewalks and we need to
watch out for ourselves.
So please consider that I'm
number two which is a slip and
fall incident and well I'll say
on that is incident versus an
accident doesn't seem as solid
a case for the plaintiff here.
I am not sure on that.
So on number three alleged trip
and fall on sidewalk so with
alleged I'm not clear again yet
what I'm not clear is what
happened and it doesn't seem
like you are either in what's
being presented and that
the evidence will need to be
presented so that you really
can move forward on it.
But best of luck on that.
So item number four which is
the Civil Service Commission
item a writ of mandamus which
in MARCH and it means we
command and also this really
struck me when I looked it up
it is an extraordinary remedy.
So I'm not clear what that
means but I did Google a civil
service commission and they
have a very positive
reputation.
So that was really wonderful to
read, You know, on
the settlements and judgments
which we looked at recently
mostly regarding speedy equal
rights within number one item
of the number of cases that
occur to I And they talked
about speeding up the process
because the costs are
escalating.
So please I don't know when
this termination in
the original added some
information which I didn't know
about so it sounds like a
pretty serious thing and then a
termination is involved So I'll
just send you blessings on that
and best of luck for all
parties In the Scooter incident
which was alleged excuse me
Same incident.
Alleged.
Oh yes.
So there is an incident alleged
e-scooter incident I learned a
lot during our e-scooter time
and when they were present in
San Diego mostly I learned that
we have many levels, many
layers of codes and regular
ations that can tie our hands
in litigation.
I think we learned a lot from
our e-scooter period and it's
it's just a learning lesson for
us and I certainly learned a
lot.
So we move forward and I thank
you very much for listening and
love to all have a beautiful
day and a beautiful week.
Thank you to the caller for
staying on topic.
Thank you for those comments.
Please note that the five
minute timer did conclude with
no additional speakers left in
the queue That does conclude
closed session Public comment
All right.
>> Thank you Deputy Clerk With
that we will now recess into
closed session and reconvene
council today at 2 P.M. Or
shortly thereafter
and then
All right started.
>> Good afternoon.
I will now reconvene the city
council meeting on Monday, JUNE
22nd 2026 that the clerk please
call the Roll Council member
Campbell Council Member
Whitburn Council Member Foster
Council Member Von Wilpert
Council PRESIDENT Pro Tem
The Council Member Campo
Council Member Moreno Council
Member Eli Rivera and Council
PRESIDENT LaCava Present.
Also attending the meeting are
Assistant City Attorney
Michelle Garland Jordan more
fiscal and policy analyst with
the Office of the Independent
Budget Analyst and myself here
Deputy City Clerk Kevin Smith.
All right, a quorum is now
present.
So first of all start off
whether there's any comments
from the mayor's office,
council members, city attorney,
independent budget analyst, our
city clerk and not seeing any
We'll go on Deputy Clerk Please
go over how the public can
offer their testimony.
I will not I don't know how I
like to slide on the screen
their reviews how the public
can offer their public
testimony during this
afternoon's meeting.
The order can be found on
the agenda Summary found online
or at the table in the back of
the room.
If you are in person please
complete the speaker slip
located at the entrance of
chambers and bring it to
the front of the room.
Council ambassadors are
available near the entrance of
chambers and can assist with
questions and speaker slips.
No further in-person testimony
will be taken once the council
begins Virtual testimony.
>> All right.
And as a friendly reminder non
agenda public comment which
will be taken at the end of
the day it's an opportunity to
speak on anything that's within
the broader city of San Diego
Purview docketed items We
request that you speak to
the item itself Inform
the Council about whether you
support an item or reject an
item and your reasons why So
focusing on the docket item
will be appreciated So with
that Deputy Clerk please
introduce item 200 item 200
Public hour Feasibility study
Phase two report.
All right.
Thank you, sir.
And a reminder to everyone this
is an information item.
No motion will be taken And now
settle then please introduce
yourselves for the record and
let us know how much time
you'll need.
>> There we go.
Try again.
There we.
Keep on Heather Rider, deputy
director for energy in
the Department of General
Services.
We need about 15 minutes.
All right, Begin when you're
ready.
All right.
Thank you very much.
Thank you.
Council PRESIDENT, members of
council as many of you are
aware and as a corollary to
the award of the Genie
franchise, the city started
studying alternatives to a
franchise agreement for
the delivery of electricity
within the city boundary and as
public power feasibility that
study was split into two parts.
The Phase one report was
brought to council in
the summer of 2023.
It did find basic economic and
technical feasibility so we
moved into phase two which was
a much deeper dive into
the economic and technical
feasibility as well as
incorporating changes in
the regulatory space that have
happened between those periods.
We brought on new gen
strategies to act as our
subject matter expert and
technical consultant in
executing that study And so I'm
going to pass it over to Scott
to go over the findings.
Great.
Thank you Heather.
Good afternoon.
Council PRESIDENT Council
members Staff As I mentioned my
name is Scott Burnham.
I'm a partner and project
manager with New Data Strategy
Solutions.
I'm joined here today with DR.
Nelson Beck along with Siemens
Engineering, Andrew Atwater
with Beebe and a consultant
that assisted us with the study
.
Excellent.
>> All right.
The bottom line in terms of
the phase two study is that we
found that the analysis for
developing and creating an mcu
and municipal electric utility
from the San Diego Gas Electric
Genie assets was both
economically and technically
feasible.
The results depend on the value
of the assets that the city
pays to acquire them.
We conducted analysis using two
approaches to cost approaches
to value.
We'll talk more about that
The Oakland original costs less
depreciation at the low end and
replacement costs new less
depreciation on the high end.
This analysis focuses on
the delivery assets only
There's no generation assets to
be acquired from Genie
The generation power supply
portion of the mcu was assumed
to be supplied by sdp.
>> This data currently serves
the majority of the city Load
results suggest a range of
savings between 6 and 6% to 16%
depending on the assets paid to
be acquired between 7 billion
and $19 billion At the 30 year
conclusion of the 30 year study
.
More broadly, the analysis that
we conducted was what we call
an overnight analysis.
It's assuming that
the municipal utility would
essentially start within
the year.
That's not feasible.
We know that We realize that
will take at least 10 or 15
years to establish a municipal
utility.
But the approach uses an
overnight analysis as a prudent
approach to understand the cost
and determine the feasibility.
We came before you
approximately three years ago
with the results of the Phase
one study.
>> There's been significant
changes since then.
The relative to the study we
had additional information and
detailed data provided by Jenny
and that informed a lot of
the results of the study.
We also recognize there have
been significant changes in
policy and the regulatory
environment that also impact
the study and the Phase two
report Phase two report In
terms of the changes in
the utility environment,
certainly a change in
the landscape relative to
the assets themselves.
Again, the information we got
from Jenny that information
helped improve the cost
analysis relative to
the physical separation of
the two systems.
If the mou is to be formed it
would be electrically isolated
from Jenny who have the ability
to do so and that would require
investment on behalf of
the city.
In terms of the regulatory
environment, the process
continues to evolve relative to
how the cpc would develop or
what would determine the cost
for the mcu to acquire these
assets.
As you're aware, the city of
San Francisco is going through
a similar exercise.
They're a little further ahead.
They've been to the cpc.
They have some preliminary
results relative to how the cpc
would then then look at
the acquisition costs.
But there are other policy and
risks to be considered in terms
of climate change, commodity
cost, wildfire mitigation as
you know that's a big ticket
item relative to costs and cost
recovery.
The Phase two approach focuses
on a 30 year cash needs.
It develops what we call a
revenue requirement for
the mcu.
That's the total dollars to
operate the mcu in comparison
to the total dollars paid to us
based on existing rates and
assumptions about future rates.
For Jenny, as I mentioned, it's
only acquiring assets within
the city primarily distribution
assets but some limited
transmission assets as dcp as
dcp sorry the cta will continue
to provide power supply to
everyone And it's this buildup
of the revenue requirement that
is the crux of the analysis.
So we're looking at the that
the system as mcu compared does
cost on an all in basis
compared to the system as I see
each unit continue and
the status quo the analysis
suggests the that there is
indeed savings it shows
the benefit of public power
there are but current
opportunity for efficiency
local control and cost savings.
Again this is done on what we
call an overnight analysis
recognizing that there would
still be a different time
component to this in terms of
the assets to be acquired.
As I mentioned, almost all
the assets almost all
the assets in the city would be
acquired approximately 800
miles of secondary conductor
conductor line wires,
transformers meters and other
equipment.
The city would be responsible
for serving approximately six
660,000 customers.
The city would also acquire 42
electrical substations within
the municipal boundary and
the sub transmission conductor
between those substations
the city would not acquire
the high voltage system
the bulk transmission system or
any generation assets from a
genie.
As I mentioned, we conducted
what we call a cost based
purchase price analysis.
This cost based analysis begins
on a low end and with the only
older original cost less
depreciation and the high end
replacement cost new less
appreciation In reality
the cost would likely come in
between those two values.
But we developed these bookend
values at $2.4 billion for
original cost of depreciation
and $7.6 billion replacement
cost new less depreciation In a
transaction a prudent seller
likely would likely not accept
our original cost appreciation
.
That's a book value essentially
and a prudent buyer is unlikely
to accept replacement cost new
less depreciation which is why
would in all likelihood that
costs would come in between
those two values somewhere
The difference of that $5.2
billion is significant and it
does in the age of the assets
certainly has an impact on that
valuation.
We also assumed that there
would be additional costs
upfront approximately $912
million of upfront cost to fund
that separation analysis again
creating to electrically
ability to have two
electrically isolated systems
startup costs as well and as
well as $470 million in working
capital.
Startup costs include
the development of the utility
to create an operating utility
,financial reserves, liquidity
measurements and the like.
This next slide shows a summary
of the key assumptions.
As I mentioned, the purchase
price is probably the most
dramatic key in terms of
the analysis that range between
2.4 billion and 7.6 billion but
also the assumptions around
long term rate growth for ge we
assume 4% per year going
forward That was based on
information available at
the time From the general rate
case it's probably a little bit
lower than historic but we
believe there was a
conservative assumption other
elements include the payment in
lieu of franchise fees and
public benefits.
As I mentioned, the separation
costs, startup costs upfront
working and of course staffing
one of the critical elements
relative to difference between
the phase one and the phase two
analysis was there's a more
detailed analysis around
staffing.
The intent would be to to
address the concerns of ibew
and others and acquire
the workforce from any.
In summary of the results.
We've got two graphics here on
the left.
You can see there's selected
years between the oclc and
again on the low end the rca
and on the high end.
So you can see we're showing
your ten, your 20 and your 30
for the ocd.
So significant savings of $19
billion at the end of
cumulative savings in your 30
the replacement costs new less
appreciation is slightly lower
at $7 billion There is a
crossover in the ocd case It's
year one in which mean you
would show cash positive for
the replacement cost you looked
at less depreciation the old
either higher asset that
crossover occurs and estimated
in year 12 so the city would
not recognize savings upfront
if indeed they purchased a
price at at rc an oldie
The next slide shows on an
annual basis looking out over
the 30 year forecast the period
of the study on the left we saw
the ocr and all the numbers You
can see showing cash positive
there in year one and
continuing to grow over time On
the right we show our you know
you can see that the blue bars
there are the city of San Diego
costs the mcu costs that would
be higher than any costs for
the first 12, 11, 12 years in
the study we did conduct a
sensitivity on the relative to
the assumptions about
the growth rate of the retail
rates.
As I mentioned, we use the 4%
approach annual approach for
city Jeanie retail rates We
believe that that was
reasonable based on recent rate
case information.
Historically that number is
probably closer to about 6% as
you can see in this analysis
here.
What we're trying to show in
this analysis I should say is
that at 3% at the lower end of
the range of growth rates,
the savings is significantly
less at 6% that that range goes
up to significant and
significant savings, a
difference of about $60 billion
between those.
Now this is based on the ocr
acquisition cost case but you
can see the sensitivity to
the results relative to
the assumption made for
the genie rates.
There are certainly several key
assumptions moving forward that
would impact future
feasibility.
Certainly policy direction
around climate change, consumer
preference, electrification and
the like relative to projected
low growth How it will impact
this analysis certainly
direction at the state level
looking at affordability,
looking at reliability in terms
of investment requirements for
systems such as energy needs
and the sensitivity to retail
rates is an important
consideration as well.
Looking out over what's
happening at the state at
the cpi you see relative to San
Francisco felt that
the precedents there in terms
of that court decision,
the preliminary court decision
looking at legislation, Senate
bill 875 looking at municipal
ization efforts across
the state as well as at the cpi
you see regarding wildfire
investments and the past in
the future is a major unknown
conclusion.
>> The Phase two analysis is
conducted has significantly
refined the financial
projections.
We have a lot more detailed
data relative to the asset
inventory relative to
the estimated costs.
The certainly the age of
the assets are materially older
than originally assumed
creating a different difference
disparity between the ocr and
replacement costs new less
depreciation values.
The Phase two does find
financial and technical
feasibility and the opportunity
to save dollars for the rate
over time for rate payers.
But the biggest drivers I
mentioned is the assumption
around sd g long term growth
rates and of course
the potential savings and
financial benefits are an
estimate At this point there's
no guarantees that these that
these savings would would would
come to fruition.
The legislative and regulatory
environment is indeed evolving
and fluid.
There are certainly costs
issues around costs recovery
cost reimbursement valuation
approaches as well as
the potential process all of
which could impact
the financial feasibility.
However, overall the results
are more refined and more more
defined than significant
unknowns and variables remain.
That's the conclusion of our
presentation.
I'd be happy to answer any
questions.
>> All right.
Thank you for the presentation.
The fire marshal has asked for
Those that are standing
the back are actually empty
seats out there.
So if you could take a seat
with make the fire marshal
happy which makes me feel more
comfortable.
So thank you.
So think again for
the presentation.
With that let's go to public
comment.
Thank you counsel Thank you.
Council PRESIDENT This item
received 15 comments in favor
and two comments in opposition
via our e comment form which
has been distributed to
the Council.
We will begin with in-person
public comment.
Anthony Stackhouse Please come
forward and and each speaker
will receive one minute after
Anthony Kevin Carroll, Matthew
Fish and Christina marquez
Please come sit in the front
row.
>> Please begin.
My name is Anthony Stackhouse.
I serve on the executive board
for ibew for 65.
I spent 14 years in the Army
with combat deployments
overseas and if you knew the I
went through to get to where
I'm at today you would not be
so steadfast to put my job and
my family's quality of life at
risk.
The people in this city don't
trust you Don't give them more
reasons.
Be honest with themselves.
You do not have the resources
or knowledge to do this.
Don't gamble with my job or
the job of my union brothers
and sisters because I promise
you one thing we will not go
down without a fight.
I urge this Cancel this council
to end this now Municipal
association is union busting.
Thank you for those comments.
Kevin Carroll Good afternoon
Council members My name is
Kevin Caroline, executive
Director of Tech San Diego
representing technology
companies across our region.
Our members care about reliable
service competitive rate and
the infrastructure needed to
support innovation,
manufacturing and economic
growth.
Based on this presentation we
have some concerns.
The question is not whether
minutes position is possible.
The question is whether
the risk caused are
sufficiently understood before
making a multibillion dollar
decision that could impact
businesses and residents for
decades before moving forward.
The city should have a high
degree of confidence that all
major cost liabilities,
regulatory requirements and
operational challenges are
fully understood and reflected
in the analysis.
If manipulation ultimately
proves to be the best path,
the business case could
withstand rigorous scrutiny if
significant uncertainties
remain as I think we saw in
the presentation, those
questions should be resolved
before ratepayers and
businesses assume the risk for
San Diego's innovation economy.
The goal is a reliable,
resilient and affordable energy
energy system that supports
job.
Thank you.
Thank you for your comment and
that does conclude your time.
Matthew Fish Good afternoon
Council members.
My name is Matthew Fish and I'm
the system business manager at
ibew Local 465.
I represent the workers
industry Jeannie speaking
against the Phase two study
because it offers no job
protections for my 700 gas
construction work members
workers will lose their jobs
and the retiree medical and
pensions will be affected.
Please in this once and for all
please invest the $9 million
Billion elsewhere such as
infrastructure backlog or
housing for the homeless.
Please do not gamble with our
union jobs and if the city has
bigger priorities like thank
you and Christina marquez and
while Christina speak incurred
Mark Fuentes, Krystal Gomez,
Monica Valdez and Cecilia
marquez please approach
the front row.
Hi good afternoon.
Christina marquez speaking on
behalf of ibew Local 569 San
Diego and Imperial County where
the inside wireman We're here
in solidarity with our union
sisters and brothers of 465.
The ibew stands against any
effort to municipalities
the power company the Nugent
study says nothing about worker
protections or job guarantee
Leaving our ibew five 569
members in limbo ibew members
could lose jobs and benefits
and the city is already
billions behind in
infrastructure spending
infrastructure spending That
puts our building trades
members to work.
>> Please do not wage or gamble
with our jobs and our
livelihood.
Please end these efforts once
for all.
Thank you.
Mark wants Yeah Good afternoon.
Council members.
My name is Mark Fuentes.
I'm a gas working foreman for
our city.
Jeannie a shop steward Would I
be w Local 465 a proud U.S.
Army veteran and a San Diego
native.
I served this country because I
believe in protecting American
families, American workers and
communities.
But when I look at this
proposal I don't see any
protections for me, my
coworkers or our families.
I don't see a future for my
skilled gas workers who have
dedicated their entire careers
to serving this community.
I also don't see protection for
our communities especially when
the cost of living is at an all
time high.
This proposal will create
additional expenses for
citizens and taxpayers who are
already struggling to make ends
meet.
Please don't gamble with good
union jobs without clear worker
protections.
I urge you not to move forward
with this effort.
Thank you Cristo Gomez.
>> Good afternoon, Council
members.
My name is Cristo Gomez.
I am shop steward of ibew 465
and equipment operator c
Jeannie I'm also a veteran of
the United States Marine Corps.
I operate equipment for gas and
electric emergency And this
feasibility study you only want
to take over electric.
What about gas jobs?
What about equipment operators
like myself and their families
when we lose our jobs?
What about our retirements?
There are over 700 gas workers
in our union.
What about them?
Where's our just transition And
what about job mobility?
Because in this proposal I
don't see a future for us in
our jobs Don't gamble with good
union jobs And I see Jeannie
with the city takeover I urge
the City Council not to proceed
any further with this effort
forcing the city to take on
billions in debt is wrong.
We have bigger priorities.
Thank you.
Monica Valdez Hello my name is
Monica Relative.
>> I'm a third generation ibew
member and emergency dispatcher
for sd Jeannie I'm a proud
resident of District four.
>> I am a very active and very
active in my union and my
community as part of local
social service clubs.
I'm here to express my absolute
opposition to the Phase two
study The proposal is costly,
will gamble what puts our union
contracts in the crosshairs?
There are zero protections and
zero guarantees for my members
.
There was zero current
consideration for my gas
members.
Our gas people They are left
behind in this proposal.
Where is the just the just
transition Please vote against
this risky measure.
Please don't gamble with our
livelihoods.
>> Please stop this once and
for all.
Thank you.
Cecilia marquez Well Cecilia
comes to the microphone could
Laurie Lips?
Lipson Noelia Carolyn Jason
Poggio, Chris Kate and Amy
Fossett please come to
the front row.
>> Please begin.
Thank you.
My name is Cecilia marquez.
I'm born and raised in San
Diego.
I'm a single mother, a
homeowner and a 24 year
employee at San Diego Gas and
Electric.
I'm also a proud union officer
and organizer at ibew Local
465.
The city has been studying this
for decades and it's time to
stop.
San Diego is a beautiful city
but when I look around I see
bigger priorities that we
should be focusing on
the homelessness, affordable
housing, fixing our storm
drains, infrastructure, public
transit And in this study
there's no guarantee that our
jobs will carry over to a city
ran utility.
And even if they do, wages,
salaries and benefits could
change considerably.
So I urge the city council to
not proceed any further with
this effort.
Let's stop wasting our tax
dollars.
This is wrong and the city has
much bigger priorities.
Municipal association It is
union busting.
>> Thank you.
Thank you.
Laurie Lipman Hello Council
members.
I'm Laurie Litzman, a
constituent of District three
sd Jean e continues to put
profits before people.
For decades we've been we've
built an energy system that
transports power long distances
,losing power along the way
while increasing costs and
vulnerability.
The Sunrise Powerlink destroyed
habitat impact and cultural
significance in significant
lands and disrupt its disrupted
communities.
Today those transmission
corridors are part of a system
that routinely shuts down power
to reduce wildfire risk.
This is not smart energy.
Sd g e customers pay among
the highest rates in California
while utility executives and
shareholders continue to profit
,many residents are being
forced to choose between
necessities and keeping
the lights on.
Energy is an essential public
service.
It should be accountable to
the people not corporate
profit.
Basically that does conclude
your time.
Thank you.
Next speaker Noelia Collin Good
afternoon.
My name is Noelia Colon and I'm
a welder.
Jeannie I'm four and a proud
member of ibew for six five.
I'm proud to be the first woman
welder in our union's history
of over 100 years.
This career has changed My life
gave me opportunities financial
independence and a future I
never imagined for myself.
I understand that people are
frustrated with utility costs.
Those concerns are valid and do
deserve to be heard and
discussed.
We pay those too and we live
here as well.
But when I read the study I
didn't see enough discussion
about the workers who operate
maintain and respond to
emergencies on the system every
day.
I didn't see myself I didn't
see my union brothers and
sisters.
I didn't see the young women
who MAY 1st day follow the path
that I did part that I did.
I ask that you consider not
only the infrastructure but
the people behind it
the workforce, the training,
the experience, the careers,
the culture, all the hustlers
that serve that community for
generations.
I was born and raised here in
San Diego.
I love the city and that's
exactly why I'm asking you to
think carefully about
the people who serve and
sacrifice for it every day.
>> Thank you.
>> Jason Paglia, Jason Paglia.
Okay.
Moving on Chris Kate Good
afternoon.
Council PRESIDENT Members of
the council Chris Kate on
behalf of the San Diego
Regional Chamber of Commerce.
The Phase two study claims I
mean just what utility would
save San Diegans $130 billion?
Let's be direct When something
sounds too good to be true, it
usually is giving false hope to
San Diegans at a time when
affordability is top of mind.
The reality is that municipal
ization is a dangerous, costly
gamble.
Startup costs alone could reach
$9 billion a year or more.
Money the city simply does not
have nor residents can afford
to take on as debt.
This doesn't even account for
massive annual operating costs
wildfire insurance cost
overruns or litigation that
residents and businesses would
be forced to bankroll.
>> Pursuing a takeover of our
energy infrastructure is a
costly distraction that
undermines our economic
stability and risk our electric
reliability.
Past city councils have rightly
rejected this path time and
again because the risks
continue to far outweigh any
speculative benefits.
We urge you to reject this
proposal once and for all.
Thank you.
Amy Fossett.
>> Good afternoon.
Amy Fossett with the Building
Industry Association of San
Diego.
I'm here today to talk more
about from my personal and
professional experience working
here at the city.
I was had the honor of working
here over for over 20 years in
almost every branch of
government.
The city is not structured
organizationally nor does it
have the expertise or
the financial resources to take
on such an endeavor.
I too am concerned about energy
rates.
But the city of San Diego is
not the solution to that
problem.
So I ask you to please move on
from this endeavor and focus on
the priorities and issues that
you already have on your plate.
Thank you.
>> Thank you.
Our next speaker is Marcy
Weaver.
While Marcy approaches
the microphone, could Mark
Kersey.
Gene Wilder, Al Sanchez and
Matt Kaczynski Please come sit
in the front row.
Good afternoon, Council members
and city staff.
My name is Marcy Weaver, ceo
Controller MR. Chamber of
Commerce.
I'm here today on behalf of
the businesses we represent to
the throughout South County.
Our business community depends
on a reliable, affordable and
predictable energy to operate,
grow and create jobs in our
region.
While we appreciate the effort
that has gone into
the feasibility study, we are
concerned that there is still
not enough information
available to fully understand
financial, operational and long
term impacts of the municipal
politician accounts.
We also want to acknowledge
the significant wildfire
mitigation work and ongoing
investment that sgmd has made
across the region.
Chula Vista has had close calls
with five wildfires.
And this is critically
important issue for our
community.
We have seen firsthand the work
that fda has done to straighten
grid build reliability and
reduce fire risk being Thank
you for your comments.
That does conclude your time.
Next speaker is Mark Kersey.
Good afternoon council
PRESIDENT And members of
the council Mark Kersey
representing San Diego
Taxpayers.
Having said on your side of
the dais for eight years I'm
going to ask you a question Is
this really a headache that you
guys want to take on?
You guys already have a lot of
headaches and several of them
concern utilities.
You get thousands of complaints
about water rate increases.
You get browbeat over the cost
of pure water.
You get criticized for failed
stormwater channels and you
take errors over trash fees
particularly when third party
estimates don't match reality
Exactly like what could happen
with this issue.
Make no mistake running
the power grid will only make
these other headaches seem
minor by comparison.
The minute this ill fated
eminent domain takeover closes
,people will expect you to
immediately lower their
electric rates.
But you won't be able to
because you have spent billions
to buy the system and might
actually need those rates to
increase to pay off the massive
bond debt and associated
integration costs.
You all have a tough job.
You have enough headaches.
Save yourself this one.
Thank you.
Thank you for your comments.
Next speaker is Jay Wilder.
If you're holding a sign,
remember there are people
behind you that might want to
see our smiling faces up here.
So use the back row if you want
to hold the signs up so we can
read them because you big fonts
but have a courtesy to
the people behind you.
Thank you.
Hello.
Thank you for your time.
My name is Jay Walder.
I'm PRESIDENT Of ibew Local 465
and alignment during
the alignment.
I'm also a marine Corps veteran
husband father to two kids and
I'm and I've defended
the nation and our freedom.
Today I am speaking to defend
my union members and protect
their jobs.
Don't do this like I've trained
for 20 plus years under ibew
desk to learn this complex and
ever changing system and I'm
learning more every day.
This is not something you can
just learn overnight.
It will take you decades and
all the while my vw brothers
and sisters and I will fight
you every step of the way to
protect union jobs.
Let's not go to war.
Let's find a way to work
together to address real
priorities in San Diego like
homelessness especially veteran
homelessness, mental health and
addiction.
This is where we should be
spending valuable city
resources.
Thank you for your time.
>> Thank you.
Our next speaker is Al Sanchez
.
>> Thank you, council members.
My name's Al Sanchez and I'm
here on behalf of Local 89 and
my business manager Bella
Marcelo.
We're here today to communicate
our opposition to the efforts
of bringing the work union
contractors currently do
in-house.
We do not mean we do not
benefit the city taxpayers or
our employees.
The studies have shown
the studies have not proven you
with real opportunities costs
for what is needed to actually
manage this reliably utility
and keep it keep the lights on
24 hours.
Nor does it address the costs
needed for worker safety
working in highly highly
skilled working workforce,
skilled workforce and
competitive wages and benefits
and construction expertise in
building and maintaining
the grid and pipelines in San
Diego.
We don't believe this business
is served in the cities.
>> Good interest of doing this
.
>> We asked the council to
direct their time and resources
in delivering the city
services.
>> Thank you Mayor Because
Greensky while Matt approaches
the microphone could make a
erroneous Britney says Rihanna
barrel Bill Powers and
allegedly Audra please come to
the front row.
Please begin.
Good afternoon council members.
My name is Max Stransky I'm
speaking We have today of acp
Local 127 the dedicated city
workers who keeps an you
running as you know local 127
represents the hardworking
employees of our maintenance
labor skilled trades and
equipment operators and so
forth.
Our members are on the front
frontlines serving the city
every single day and their
stability is our top priority.
It is our concern that that's
stability and the fiscal health
of our city that local 127 must
express its continued objection
regarding public power.
We have met with the proponents
to express the same concerns to
them.
While we understand the desire
to explore alternative models,
we believe this current
proposal presents too many
unresolved risks.
One lack of consensus This
initiative has come before
the council multiple times and
has struggled to find viable
path forward Demonstrating
the community and leadership
remained deeply divided on this
issue.
Workforce uncertainty The Phase
two report does not provide
the concrete assurances.
>> Thank you.
That does conclude your time.
Mark o'Brien is Good afternoon
Council My name is Mark o'Brien
is political director of
the San Diego and Imperial
County Labor Council.
We're proud to represent over
100 unions and 200,000 working
families including our brothers
and sisters in ibew 46 five and
we're here standing with them
in efforts to oppose them in
its opposition to this power
company.
We know the struggles of our
members to make it in San Diego
right now and we know that
consumers are paying the same
thing.
But we also know that right now
our city resources are
stretched very, very thin and
now is not the time to risk
those limited resources on
the utility take.
Workers could lose their
pensions and retirement and
the hard fought benefits.
We stand with the hundreds of
workers that could lose these
benefits.
Please don't gamble with their
jobs.
We have bigger priorities and
we thank you for your support.
>> Thank you.
Thank you.
Britney says hi.
Good afternoon council members.
Thank you so much for the time
to comment on this today.
Like many others here, we have
serious concerns with this
study in particular it doesn't
answer the critical question of
how much will it actually cost
to purchase the assets of
the utility.
First off, the report gives you
a range of between 2 and 2 and
a half and $7.5 billion a huge
range.
The cost to just purchase
the assets is $9.3 billion.
The study also omits some key
costs including the cost to
make our remaining customers
whole.
If the city were to leave
the surrounding cities and
unincorporated county would see
an increase in their rates.
There is precedent that says
that the city would need to
make sure that that does not
happen so there would be an
exit fee of billions of dollars
.
Finally the city this study
also isn't including
the significant wildfire risk
that is part of San Diego.
It doesn't include
the insurance costs or
mitigation.
Thank you very much.
Thank you.
Next speaker is Brianna Barrow.
>> Good afternoon, council
members.
My name is Brianna Berman and
local business owner and I also
run a local nonprofit.
So public power MAY be a good
idea and it MAY also be a
costly idea.
Both things can be true.
My concern is not about
protecting one institution over
the other.
My concern is about
workability, accountability and
integrity.
If the city is going to pursue
a public power model,
the process must be
transparent.
The numbers must be complete
and the public must understand
exactly what they're being
asked to carry as a ratepayer I
want relief as a taxpayer.
I want responsibility as a
contractor.
I want fair opportunity as a
community centered business
owner.
I want solutions that did not
leave the people with the least
margin carrying the most risk
at this time without a clear
and definitive understanding of
the full cost, the risk and
the impact on city communities
I cannot support moving forward
with the municipal ization and
I ask that you do not either.
Thank you.
Bill Powers While Bill
approaches the microphone could
I have Mike Miller okay all
the Monday Neil Winter John
Mattis and Barbara Pinto
approach the front row please
begin Bill Powers Board Member,
Public Power San Diego I'll
start with Labor.
The veteran utility workers
will be key to the new
utility's credibility Labor
does need to have a seat on
the utilities governing board.
Labor also needs to be a part
of the blue ribbon panel that
selects the critical initial
governing board with the die
gets cast.
New Jersey's first public power
study for the city was in 2020.
That study only looked at
distribution a distribution
only utility low voltage.
It did not look at transmission
and distribution phase one and
phase two that only at&t at&t
utility would be completely
contained within the city's
boundaries.
Crossing jurisdictional
boundaries would trigger Lasko
review that would occur six
years to the implementation
schedule That would be a
momentum killer for public
power.
In San Diego we obtained a
Phase two financial model
through a Public Records Act
request New Dennis set
the model up so you can click a
button and look at a
distribution only structure.
>> There is no more work to do
to assess distribution.
>> That is the way to go.
Thank you.
Next speakers allegedly Audra
Yeah so I mean as dg any roms
Peter to pay Paul but so do you
guys and so that's what's
concerning about this going
into your hands especially when
you talk about savings and that
not really being feasible of
course not because sd g and e
is aggressively opposed to you
guys doing this So this will
end up in litigation So it will
cost the people more than
the billions of dollars that
you are you know, talking about
here And I mean with the storm
infrastructure needing $5
billion, it's like how many
billions of dollars do you guys
need in order to provide
the things?
But again, you can't be trusted
with this type of thing when
you are not good stewards of
our money and when this is
going to be something that is
San Diego community power is
engaged with when they're
talking about keeping data
centers on and having
the public in the community not
have power during that time
that is extremely egregious and
people need to pay attention to
that because there's meetings
that are talking about it.
>> Thank you.
Next speaker is Mike Miller.
>> Good afternoon counsel.
The more we learn about Jionni
the more appalled I am at
the amount of corporate greed
that goes on that organization.
Their average profit for
the last four years is over
$800 million and their parent
company also spends nearly $300
million annually in campaign
donations and lobbying and
counting on $2,000 to Donald
Trump's inauguration last year
.
Obviously there are a lot of
questions and things that need
to be figured out before this
goes into place and it's
obviously an informational item
and I'm grateful you're taking
the time to consider it and I
hope that you consider to look
at it more because personally I
just can't imagine what I would
do with an excess amount of
even $1 million every year And
I'm sure there's a better way
that we can find to use that
money to help the people of San
Diego.
>> Thank you.
Thank you.
Gail via Marty Well Gail comes
to the microphone.
You do have time ceded to you
by Neil Winter.
Neil can you raise your hand?
Okay.
Thank you.
You will have two minutes.
Thank you.
My name is Gail b one time a
proud resident of District nine
and I'm also the chair of
the board of directors of
Public Power San Diego.
And I'd like to make an
important distinction here.
There's a difference between a
nonprofit public utility versus
a for profit investor owned
utility.
And the definition of municipal
as a nonprofit public utility
does not have to be quote run
by the city.
So you can all kind of public
thank GOD because there are
challenges but there are cities
this has been something that
has been done for 100 years.
All right.
And it's been done in over 40
cities in California including
Sacramento, by the way they do
it And on the average they have
half the rates we do And better
reliability.
So I think that's one key
point.
I just like to leave you with
the other point is our union
brothers and sisters, they
deserve to have certainly their
benefits, their compensation,
their seniority, all of that
protected.
I don't think that was really
part of the study.
I mean I don't think it was
meant to be part of the study
but that's certainly part of
any conversation I have
personally been involved with.
They talked about the possible
future of a nonprofit utility.
In fact, public utilities have
80 to 90% unionization rate
whereas private utilities have
I guess what, a 30%
unionization rate.
All right.
So there's a really big
difference.
So the unions would benefit And
I know that you know you have a
contract with sd g and that
precludes certain conversations
but you would benefit union
members would benefit both in
terms of their families and
their immediate costs and in
terms of their status.
No one is looking to change any
of that.
Thank you very much.
Thank you.
John Madison.
Next, while John approaches
the microphone, I would ask
that Patricia Mendoza
the ferryman, Adriana Cizik and
Kevin Machado please approach
the front row please me.
>> John matters here.
I'm here on the reality of
the crisis facing the city of
San Diego.
Proudly you took the first step
in a path forward.
The crisis is one quarter of
the people here in this city
can't afford their bills.
Wants to month they can't pay.
If you ask the question why
can't they?
Is it because they have
the highest rates in the state?
Is it because they want another
8% rate increase?
That's the reality.
We have a powerful quote.
We have a plan.
We have a plan that saves your
constituents tens of thousands
of dollars.
Help us get out of this crisis
of unaffordability of a key
component of our life here in
San Diego.
And that is our outrageous g&a
rate.
>> Thank you.
Thank you.
>> Barbara Pinto.
Barbara, you do have time ceded
to you by Isidora Lopez Magali.
Can you raise your hand please?
Thank you.
And an okay.
Ana Thank you.
You have three minutes.
Thank you.
Good afternoon.
My name is Barbara Pinto and
I'm a resident of San Diego,
the District 11 Loganathan and
a member of eighth.
I have been a resident since
the 40s in San Diego and
selling gas and electric has
been our only utility company
So it is a monopoly on
utilities provided since then
and before Sandy Again we are
paying the highest prices for
homes rent, gas, food and
utilities more almost than
anyone in the nation.
Our utility provider dictates
cost increases services and
sets no limit on their profits.
Last year they made a whopping
$563 million in profits and
that figure was roughly one
third lower than it was
the previous year.
I'm a senior citizen living on
a fixed income of Social
Security and a modest
retirement.
I went back to work around 2018
to keep up with the cost of
living and inflation.
i lost my job due to covid.
In 2021 I prioritize my rent
and I got behind in my water my
utility.
My current utility bill is over
$3,500.
I enlisted in a debt
forgiveness program and said
they would work with me to
forgive part of my debt.
I agreed to pay $111 a month
for 12 consecutive months but
that cost changes according to
my everyday usage.
I wasn't told that the average
monthly cost now is about $140
a month.
This is difficult when you're
on a fixed income and you're
trying to do a budget.
Why is there no limit on what
these companies can make in
profits?
Even with my return to work I
am struggling.
We need services offered at
more affordable rates.
We need more competitive
companies putting people before
profits.
Thank you.
>> Thank you.
Next speaker is Patricia
Mendoza.
>> Hi, my name is Patrick and
I'm a member of Ace Energy as a
basic necessity that every
family depends on.
We need it to cook continue to
cut meals, keep the lights on
after dark, wash close to our
children and have clean clothes
to wear.
Yet these high utility rates
make everyday activities a
source of stress, often forcing
families to make difficult
choices about the bills to pay
and which bills to put off.
It is especially troubling now
that summer's here it's going
to be more hot.
People can't afford air
conditioner.
It's going to get colder
weather outside.
People can't afford adequate
heating.
But right now I also want to
acknowledge all our brothers
and sisters here in our union
brothers and sisters here I
heard it and I had another
speech written But I want to
hear you guys to I want to put
their voice out there too
because we need public power.
We really do.
But it concerns on your
concerns about job security.
We do need public power and we
need it not at the expense of
other working class people,
other working class jobs.
Thank you.
That does conclude your time.
>> We can work together.
We can Women I'm working.
We can work together.
We're still talking about So
they make their man work
together to make this
transition good.
Okay.
All all right.
>> She set the tone.
We're not going to do that
again.
Okay?
We're going to keep this
simple.
You guys have been fantastic.
So I'm passionate on both
sides.
I've been clear and unambiguous
but let's have a good civil
dialog Now you have three
people sitting your time When I
call your name please raise
your hand to confirm your year
And above all is honor.
Thank you Gary Carter.
Gary Clark.
Corey of Corey.
Sorry.
Thank you.
Oscar Gomez Junior.
Thank you.
Your four minutes please begin.
Good afternoon, Council members
and city staff.
My name is Nate Berryman,
business manager of
the International Brotherhood
of Electrical Workers Local
Union for 65 I represent 2900
union utility workers here in
San Diego and several counties.
And look, I know why we're
really here.
People are not happy with
energy.
They're not happy with their
rates or their skyrocketing
profits.
People are mad at the never
ending corporate profits that
are pulled from our pockets and
funneled to separate
shareholders And to be 100%
honest my members are meant to
Our members have more in common
with you in this room than
utility CEOs or executives.
Working class people are
struggling.
They're struggling to get by
and something needs to be done
to provide support.
But I promise you brothers and
sisters, this ain't it.
Our union and our members share
a mutual interest in the city's
success and the success of our
communities success of our
mayor, our council and
the utility who's delivering
these essential services to San
Diego's municipal division is
bad for everyone.
It will not solve for
affordability.
It will destroy our union
contracts and force layoffs of
union workers.
Each phase of the new study
continues to diminish or ignore
addressing worker protections
and safety the fire risk and
liability the city would assume
under urban exploitation and
the occurred that the city
would force to be take on with
this effort High voltage
infrastructure demand
significant investment and
the operating continue
The operating costs continue to
be significantly
underestimated.
There's no guarantee that
the infrastructure the city
purchases will be maintained
sufficiently To keep my members
safe I was in these chambers
just weeks ago when you were
debating closing public
bathrooms in order to close a
$175 million budget deficit.
What happens when you have a
budget deficit but now you run
the power company.
You can't just shut down a
substation.
You can't just turn the lights
off to save money or limit
the hours that you provide.
Electric service like the grid
is a public library You can't
balance the budget by robbing
resources from grid maintenance
or pole replacement.
If you do that you might have
mass outages, blackouts and
wildfires.
So where's the real cost
associated with the fire risk
and liability?
Where's the real numbers on
the billions dollars of debt
the city and our taxpayers will
carry for decades?
Each phase of the Nugent study
has not provided you or our
taxpayers with an accurate
picture of that risk of
the cost of the liability and
the risk the city will be
undertaking to municipal lies.
It's a lot It's $9 billion, $9
billion at a time where
the city is laying off workers
when the city is closing
bathrooms, the city is
defunding the bomb squad and
relying on donations to keep
your arts programs alive.
You just cut $7 million from
your own Climate Action Fund.
You don't have the money You
don't have the resources and
you don't have the expertise.
So we're asking you to please
not do this.
But I will end with this If
city genie doesn't offer
immediate rate relief to our
communities most at need, we
will be back here having
the same presentation with
the same advocacy and the same
level of frustration
The utility affordability
crisis isn't going away until
we sit down with honesty and
empathy for our communities
that are struggling.
I fear the cycle will continue
and the ibew stands ready and
willing to have that
conversation.
>> Thank you very much.
Thank you and Speaker lady And
if you think you could approach
the microphone, you have
several speakers seating time
to you.
Matthew Pendergrast, thank you
Randall and Driver thank you.
As an uncommon husband no, no.
Okay.
You will have a total of three
minutes then.
Okay.
Thank you so much for having
me.
I'm DR. Adrian Cusick.
I live in District three.
I served in the us Peace Corps
and I'm a member of cfa which
is a California faculty
association.
I teach environmental science
and sustainability sdsu My
students are bright, they're
motivated, they're innovative.
They get out there and gain
work experience.
Unfortunately they're learning
about the injustices that are
deeply embedded in our systems
and structures.
The sad reality that a utility
company is a monopoly
extracting wealth from
the community to transfer it to
its already wealthy CEOs and
shareholders is an example of
environmental and social
injustices that we've been
forced to live with This system
under the investor owned
utility makes life harder for
the average than Diegan and it
stifles innovation and
progress.
But there's a better way.
The Phase two public power
study clearly demonstrates that
it's financially, technically
and operationally feasible to
transition to a nonprofit
publicly owned utility.
The study focused on different
variations on one specific
scenario for acquiring
the grid.
It demonstrated that public
power will work in San Diego.
And it also demonstrated that
public power will be good for
San Diegans not only
financially but public power
would turn decision making over
to us the people who live here
and are impacted by local
energy decisions not
shareholders who probably
couldn't care less about
the struggles of everyday San
Diego's public power have been
successful in other cities So
it makes sense It would be
successful here where we pay
the highest electricity rates
in the continental United
States.
It's important to remember that
the phase two study is a
baseline and it shows that it's
possible We don't need to have
every single technical detail
worked out right now.
But what we do need to do is
commit to making action to
making it happen.
As local owners of the grid we
can determine what works best
for us.
We can ensure that Labor
remains whole and has agreement
agreements to ensure that
people operating the system are
involved in the decisions that
impact them.
We can tailor the scale of
the infrastructure and we can
explore different different
governance models.
We can trade the status quo for
low energy costs and local
control.
Imagine what that would do for
our city.
Lower energy costs are key to
economic growth Cutting
emissions, reducing
inequalities and spurring
innovation.
So once we're out from under
the thumb of Sempra we could be
a model of community
resilience.
We could have virtual power
plants bi directional charging,
microgrids, agile and proactive
technology to mitigate growing
climate risks.
We could decide if and where
data centers enter our city.
Ultimately we have the power
now to commit to transitioning
to public power.
And when we do, every aspect of
that transition will be under
our local control.
And like my students, we have
the imagination, the creativity
to create something really
wonderful that can serve us
all.
>> Thank you for your comments.
That does conclude your time.
Next speaker is Kevin Machado
or Kevin approaches
the microphone.
I would ask Will Smith, Kevin
Zavala Rachel Kiss Lane Range
shot Sharon.
Sorry if I said that in part
Troutman too.
Please come to the front row.
Kevin please begin.
Hello, my name is Kevin and I'm
a worker here in San Diego.
Working family The San Diego
are tired of the cost of living
going up as the union has
consistently raised rates in
the past decade as the union
has raised rates on average 7%
per year.
They're taking $1 billion from
us every year and doing nothing
for our communities.
That money could go to San
Diego schools and the library
San Diego workers and San Diego
infrastructure as the union
wants more more money for their
owners And Wall Street at
the city's profits this quarter
is $290 million and they're
likely to break a million in
profit this year.
And regardless of that, they
still are proposing another
$280 million more every year.
If we don't act now, another
decade will pass and San Diego
will still be struggling with
the cost of living.
We have the opportunity to
change that now la Power will
lower the cost of electricity
for generations.
The feasibility study will will
save money.
It will work here.
It's worked everywhere else
They've tried it.
The minimum the minimum
position in Sacramento has been
complete success.
They pay half of what we're
paying the council to be brave
and act And I thank you for
your time.
Thank you.
Well Smith you do have indoor
seating your time.
Andrew, could you raise your
hand, please?
Thank you.
You'll have two minutes.
Good afternoon, Council.
My name is Will and I live in
District five.
Over the last few years I have
moved around San Diego several
times.
Every neighborhood has been
different but in each one of
them life keeps getting more
expensive.
Like many people in my
generation I already worry
about the cost of rent,
groceries, gas and health care.
But when bills used to go up no
matter what I do.
Electricity.
Recently I was fortunate enough
to move somewhere with solar
panels.
I thought I would finally get
some relief.
Instead I watched as Jeannie
continued to make decisions
that made it harder for
ordinary people to lower their
bills.
It feels like no matter what we
do the system is designed so
that the shareholders win.
And working families pay
the price.
We don't want to keep having to
choose between keeping our
lights on and putting food on
the table.
Beyond affordability, I've also
seen the consequences of
failure to properly maintain
its infrastructure.
Wildfires fueled by neglected
infrastructure threaten our
communities, our environment
and the places that make San
Diego special.
I want future generations to be
able to enjoy our parks, open
spaces and beaches without
being under the constant threat
of very preventable disasters.
That is why I am here today in
support of public power.
I want a utility that answers
to the people of San Diego not
investors.
I want money we spend on
electricity to stay in our
community and be invested in
reliability, clean energy and
affordability.
Most of all, I want future
generations of San Diego owners
to be able to afford to live in
the city they call home.
Council These issues affect
real people, real families and
real voters.
Today you have a choice Stand
with San Diego and struggling
to afford an essential service
or stand with a monopoly that
continues to raise rates while
posting record profits off
the backs of working class
families.
The voters of the city will
remember that choice.
I urge you to move forward with
sd Public Power.
>> Thank you.
Thank you.
Kevin Zavala.
>> You have time ceded to you
by Robert Freedman Could you
raise your hand please?
>> Thank you.
You'll have two minutes.
Good afternoon.
My name is Kevin Zavala, Marine
Corps veteran and a District
four constituent.
Over the last decade, genius
driven electricity rates up by
more than 80% far outpacing
inflation and leaving San Diego
residents with the same with
some of the highest utility
bills in the nation.
We're told these increases are
unavoidable but what are
the facts?
After the devastating 2007 San
Diego wildfires, the us Supreme
Court ruled that the genie
could not pass $379 million in
fire related litigation costs
to ratepayers because
the damage was caused by
the utility's poor maintained
equipment.
Shareholders, not customers
were required to bear those
costs.
However, Genie later exploited
a legal loophole while barred
from charging customers for
past damages.
The company successfully
shifted 100% of its ongoing
wildfire mitigation and
infrastructure hardening costs
onto ratepayers.
As a result, customers are
paying billions to repair and
upgrade infrastructure that
the utility neglected for
years.
This is the consequence of a
private monopoly accountable to
investors rather than
the public it serves.
In response, public power San
Diego is working to establish a
publicly owned utility that
will prioritize affordability,
transparency and local control.
Public records show sgi has
spent millions on lobbying and
political influence efforts to
block public power proposals
and protect its monopoly.
The choice is clear continue
accepting more rate hikes or
support a public power future
that puts the people first.
>> Thank you Rachel Kiss.
You have time ceded to you by
Dale Holmberg.
Thank you.
Good afternoon.
My name is Rachel Kiss.
I'm a San Diego resident, a
mother of three young children,
a homeowner and a small
business owner.
Like many families, we've made
sacrifices over the last few
years as the cost of living
continues to rise.
We budget carefully.
We compare prices.
We make difficult decisions
about where our money goes.
What's frustrating is that
while families are expected to
tighten their belts as Jeannie
continues to come back asking
for more, how much is enough?
Electricity is not a luxury.
It's a necessity.
Families need to keep food cold
home safe and children
comfortable.
Small businesses need to
survive.
Yet we're paying some of
the highest energy rates in
the country with especially
concerning is that more and
more of these costs are being
shifted into fixed charges.
Whether someone lives in a
small apartment and edu or a
large home whether they can
serve energy or not, they're
being asked to pay more.
Families are being told to use
less energy while
simultaneously being charged
speeds that they cannot
control.
That undermines both
affordability and conservation.
Today isn't just about a
feasibility study.
It's about accountability.
It's about exploring whether
there's a better path forward
that puts residents before
profits.
I'm not here because I have all
the answers.
I'm here because I believe
the people of San Diego deserve
leaders who are willing to ask
hard questions and seriously
explore alternatives.
When sd Jenny asks for another
increase it's a line item on a
spreadsheet.
For families it's groceries,
kids activities, savings and a
peace of mind.
Those costs are real and we're
feeling them.
Please seriously evaluate every
option available to bring
affordability, transparency and
accountability back to our
energy system.
And please remember that behind
every rate increase is a family
trying to make their budget
work.
Thank you for your time.
Thank you.
Lane Sharman.
When you have time ceded to you
by Katherine Harrison and
Katherine, raise your hand.
Thank you.
You'll have two minutes.
Good afternoon, counsel.
My name is Lane Sharman.
I'm a fifth generation
Californian and I'm also
the proud founder and initiator
of community choice aggregation
in San Diego along with Bill
Powers.
We have public power in San
Diego, don't we?
We've had it since the Smart
Energy Alliance was founded by
Lisa hepner, your colleague.
She did that because it was
good for the city of Solana
Beach.
That tiny little city up north
.
>> And why was it good for it?
Because San Diego gas and
electric then as now was taking
advantage of every single
ratepayer then and now.
And I am asking you to please
look at the big picture here.
Your legacy, your future, your
ability to lead and do what's
good for this city is before
you.
And even though there is so
much opposition, much of it is
just fear.
It is.
And we all fear is the only
thing that we have to fear
right now.
This is going to be great for
unions.
It's going to be great for
the people of San Diego.
It's going to be good for our
future.
So I just beg you to do what
Lisa Huebner did in 2016.
She wrote why it was good and
she published it.
Each one of you could do that
and it would be an amazing way
of clearly stating why this is
good for San Diego because you
will work through all of
the issues including the fears
and I just want to thank each
and every one of you who takes
that action and and dedicates
themselves to the future of San
Diego.
Thank you.
>> Thank you.
Next speaker is Pak Troutman.
While you approach
the microphone I would ask that
James Ferguson Diego Sandoval,
Tyler Andre, Isaiah Glass and
Allison Miller please approach
the front row park.
You have five people sitting
time to you.
Angela Haynes Thank you.
Doris Wynn.
Thank you.
Michael Brack Me.
Thank you.
Janet o'Dea Thank you.
Five minutes please.
Please begin.
Thank you.
Good afternoon, Council members
and Council PRESIDENT My name
is Park Troutman.
I am with San Diego 350 Well, I
want to talk about is San Diego
Gas Electric general rate case
that was filed last week.
The general rate case is a huge
filing in which investor owned
utility tries to convince
the California Public Utilities
Commission that they should be
allowed to raise their rates
over a four year block for 2028
the first year of the 40 years
of the rate increase request.
As the genie asked permission
to raise the residential
electricity rates by about $14
per month which is a little bit
more than 7% and
the residential gas rates by a
little bit less than 850 per
month which is about a 13%
increase.
The California Public Advocacy
Office tracks acg genies rates
versus inflation.
They've done this since 2014.
The cumulative impact of their
increase in their rates more
than inflation is that they
have increased about triple
inflation.
This request for the general
rate increase or the general
rate case which is really
the window into how they're
thinking about the future is
actually a little bit more than
their average request for
the since 2014 and they make a
similar request in 2029 and in
2030 and 2031 they only request
an increase of 5.5%.
And keep in mind that these
rate increases that are in
the general rate case are
merely the baseline of what
they're asking for.
Increasingly investor owned
utilities are asking for rate
increases outside of
the general rate case so we can
expect that they will keep
continue to ask for more And
these are through their
balancing in memorandum
accounts where they spend money
and then say oh we already
spent this money, could you get
reimbursed by paying or
charging rate payers more?
So this let the audacity and
compulsiveness of this sink in
public anger at investor owned
utilities has begun to affect
the outcomes of elections
nationwide and sd Genie which
in a J.D. Power study excuse me
a brand appeal of utilities in
the Western us that they did
last year sc Genie was 28 out
of 30th near the absolute
bottom because of their high
rates They are so out of touch
they are going to continue They
are continuing to ask for more.
The general rate case request
is higher than the 4% that was
the basis for the consultant's
study and that was the main
assumption for the phase two
feasibility study There are
consultants are constrained by
the need to be reasonable as
the genie apparently does not
feel the same.
This means that when we look at
the impacts of the cumulative
benefits I believe that Slide
11 we should be concentrating
on the highest bar showing
the highest possible savings
because that is the most
likely.
We know this because Star Genie
is telling us so they are going
to continue to ask So what does
this mean going forward?
I was we are not going to if we
know they're going to continue
to ask for more rate increases.
We're not going to be having
the same conversation.
We're not always coming back
having the exact encounter.
It's going to be worse.
People will be more frustrated,
Rates are going to be higher.
We cannot sit our hands We
cannot say wait to see what
happens in San Francisco And
these are not options.
We need to keep moving forward.
Star Genie The company will not
stop itself.
>> Thank you.
Thank you.
Our next speaker is James
Ferguson.
James, you have Deborah
Winthrop or any time to you
Deborah, can you raise your
hand?
>> Thank you.
Two minutes.
Thank you.
My name is James and I live in
North Park and I have been an
advocate for climate issues and
our energy systems for my
entire adult life which is
actually pretty long.
I went to college in 1975 and
that's where I took
environmental science.
I'm a retired naval officer and
anesthesia provider and this
has been a passion of mine for
that long.
I'm now Senate liaison for
Citizens Climate Lobby and I
must tell you that we're
working on transmission issues
this year with the federal
government And I tell you that
dependency model of early
monopoly electronic electrical
systems no longer serves as
well as electrical demand will
double or triple in the next 20
years because of data centers
electrification, reshoring of
business etc. Favoring big
distant production and long
wires with cpu c guaranteeing
double digit profits over
whatever costs are incurred And
it doesn't even have to try to
economize.
So they are incentivized to
spend as much as possible
because that's a percent above
the cost that they incur while
lack of profit incentives for
upgrades and maintenance of
the not very lucrative
capacities of the local
distribution grid is a failure
to accommodate local generation
and storage which we could do.
We have a lot of available
storage opportunities and in
solar opportunities.
But an sd Genie technician came
to my house to explain to me
why my 200 hour panel is crying
and it's because he just said
Well there's a lot of solar
systems around here These old
circuits just can't handle it.
So we pay the highest rates in
America in the continental
states two times California
average with three times
the national average.
Thank you.
Next speaker is D.A. Diego
Sandoval.
Do you have time to buy Ben
Owens?
Ben, could you raise your hand?
Thank you.
And Pamela Isaacs, thank you.
You have three minutes.
Please begin.
Thank you.
Good afternoon, City Council.
My name is Diego Sandoval.
I live in District eight and
I'm here today to ask you to
choose public power over
the greed and power hungry
genie as De Genie wants you to
think that there is serious
about what's doing best for our
environment and people when in
reality they're just doing
what's best for their pockets
so much so that they change
the g in their logo to Green.
Now it's green.
How nice is that?
And truth as the genie supports
fighting climate change insofar
as they can profit from it and
households across San Diego are
feeling that every month for a
company committed to net zero
they're still incredibly
enthusiastic about fossil
fuels.
Ac Genie is owned by Sempra
which has invested heavily in
the transportation of what they
euphemistically call natural
gas.
Natural gas is the most highly
potent greenhouse gas methane.
To quote the CHAIRMAN And ceo
of Sempra from last month, they
are very bullish on
the liquefied natural gas trade
long term This is not what you
say when you're serious about
net zero or what's doing best
for the people or the climate
that they depend on for a
livable future.
This corporations mentality of
grasping what every book they
can be seen is can be seen in
their filing for their general
rate case.
They claim that they need to
raise their rates for wildfire
mitigation in the case of
ongoing climate changes.
Yet on the very same page they
also say they want to raise
rates to support
the construction of new gas
facilities.
Does that make sense?
They want us to pay more so
that they can continue
contributing to climate change
then use climate change as
justification for us paying
more as the genie does not care
about people or the environment
they only care about profit not
progress.
San Diego can do better.
This is why I asked for you to
choose public power today but
also to work with our union
brothers and sisters to ensure
that they are considered during
this transition.
To echo the opinions of a
previous speaker we can do this
together.
>> Thank you.
Yeah.
Thank you.
Next speaker is Tyler Andre.
Tyler, you have several
individuals setting your time.
Cory Quite Lander.
Thank you, Jackie Smith.
Thank you, Fred And here.
Thank you.
Rhea Coleman.
Thank you.
You will have five minutes.
Please begin.
>> Good afternoon, Counsel.
My name is Dre.
I am a resident of District
one, a Navy veteran and a small
business owner as well as a
proud volunteer with San Diego
350 and Public Power San Diego.
>> Now why are so many people
motivated to be here on a
Monday afternoon?
>> And why does Jeannie solicit
curses from every San Diego who
hears that name?
It's because every single one
of us has had that moment.
The one where you open
the billing up or the bill
lands on the counter and you
just stare at it.
Maybe you reread the number
like it'll change.
It won't.
In case you're wondering in
fact don't look at it too many
times because I'm going to
charge you extra for that.
>> And what's maddening is that
we live in one of the sunniest
city in the country.
Solar is now the cheapest
electricity on earth and we are
still paying some of
the highest electric rates in
the continental United States.
This is a broken arrangement
created by an investor owned
corporation.
In fact here are the numbers.
>> Straight from the cpu See?
Since 2014 sd genius
residential rates have gone up
about 117% Inflation over that
same period 39%.
Sd Genius rates have grown
three times faster than
the cost of everything three
times.
Right now nearly one in five sd
Genie households are behind on
their bill.
>> Owning an average owing an
average of over $500.
Those are our neighbors.
That's multiple people in this
room right now.
>> And this doesn't stop at our
electric bill.
Local businesses pay these same
rates and that cost gets built
into the price of your coffee,
your haircut, your kid's
daycare.
High electric rates are a
hidden cost on every
transaction in the city.
>> Our water rates mtf also
facing a deficit has to pay
them too.
So that's why we're here
because we're tired of
subsidizing a system that costs
us three times more than it
should in the one city in
America with the least excuse
for it.
But here's what I'd like you to
think about.
>> This is the business model
working exactly as designed.
Sd Jeannie is a government
granted monopoly.
You can't shop around for your
power and under California's
regulatory system it doesn't
make money by giving you
cheaper or better power.
It makes money by spending more
on infrastructure because
the state guarantees its
shareholders a return of nearly
10% on every dollar that it
spends.
Not on outcomes but on
spending.
Sd Jeannie boasts up to $1
billion in annual profits and
that money comes from
somewhere.
It came from us.
Yet they'll shut your power
off.
It is also why sd Jeannie
doesn't celebrate when your
neighbor puts solar panels on
the roof.
Solar that we the ratepayers
pay for Personally under this
business model your rooftop
solar is a loss of revenue to
them not a win for the grid.
>> And sd Genies parent company
Sempra is one of the largest
builders of fossil fuel export
infrastructure in the country.
>> So while we MAY be doing our
best to go green, the company
taking our power bill is in
other corners of its empire
building out more fossil fuel
infrastructure.
And they protect this
arrangement the same way every
entrenched monopoly does with
money in politics.
Sempra spendnds over $1 million a
year lobbying Sacramento and
the very commission that sets
its profit margin.
>> Take a look at where Sempra
Nest is.
You need to donate their money.
Our money.
This isn't just about a high
bill.
It's about a monopoly that
profits by spending more
vitally clean energy on our
roofs and spends our money
lobbying the people meant to
hold them accountable.
This is unacceptable.
This is nonpartisan and this is
wrong.
>> I want to end with a
question to the room and I
think you will actually might
know the answer.
How do you spell corporate
greed?
Sd Jeannie, thank you Counsel.
>> Thank you for your comments
.
Our next speaker is Isaiah
Glass of Isaiah.
You have several people sending
you time so I just need to
confirm they're here.
Robin Gill Burt thank you.
Mary Fifield Thank you.
Andrew Lund Steve Thank you.
So today Lopez Eugenio thank
you And Mike meaning All right,
Thank you.
You will have six minutes.
>> Please begin.
Good afternoon, Council
members.
My name is Isaiah Glasser and
I'm the program director for
Public Power San Diego.
I want to take a moment to
thank all the volunteers who
came out to support the Phase
two public power study and
public power in general.
I really do appreciate it from
the bottom of my heart.
This new gen study shows even
in the most conservative
modeling that public power is
good for San Diego and it's
good for San Diego is the key
number that determines this
amount of savings is
the revenue growth rate.
New Gen assumed 4% and admits
that 6% is more realistic and
it's a total slap in the face
that just a couple of days ago
you filed for an 8% increase in
2028.
The second you take this model
it's the same You take this
model and use a revenue growth
rate that's anywhere near
reality.
The savings are absolutely mind
blowing and it seems to me that
we're actually pretty close to
consensus on that which makes
common sense because when you
cut Wall Street profit out of
our electricity bills you will
see savings.
Many of us here today knew this
back in 2020 during
the franchise agreement fight
and again in 2024 during
the power San Diego campaign.
Public power was the right
choice in 2020.
It was the right choice in
2024.
It's the right choice in 2026
and it will be the right choice
in 2023.
The question is not if public
power saves money.
The question is when will we
have a council that is brave
enough to take on the corporate
oligarchs that any all of us
here today are being ripped off
by our stage name including
the city of San Diego.
The city pays an sd Jeanie Bill
the water department pays
the nasty G.I. Bill.
The sewer department pays a
nasty G.I. Bill Electric rates
are a cost inflator on
the entire city budget.
Public power would help
the city's structural deficit,
t harm it.
We really truly are the council
and the people of San Diego on
the same side against sd Jenny
.
And moving forward we
absolutely must protect ibew
guarantee their fought hard,
hard fought labor contracts and
hard earned pension funds.
And that is absolutely doable
with public power.
Now I've got a message for
the bosses at e!
>> The public power movement is
only growing.
Your days are numbered.
Of pillaging our community.
Your for profit monopoly will
end.
>> Thank you.
Alison Miller Well Alison comes
to the microphone I will ask
Blaire Beekman, Jessica
Anderson Nicole Lilly Yeah and
Dori Bruggeman to please come
to the front room.
>> Alison, please begin.
Hello Council I am a resident
of District three and I am here
today because a quarter of your
voters and my neighbors are in
debt to corporate greed as any
at any given time.
>> They're on track to make $1
billion in profits this year
yet they continue to ask for
more during the same time
period they've been
participating in union busting.
They've been turning to private
contractors that hurt our union
neighbors.
We the supporters of the public
power movement are committed to
working with our union
neighbors as we implement
public power And I ask you to
commit to the same.
Opponents today have argued
that there isn't enough
information to take the next
step.
But you have before you data
that is founded on good
information.
It's time today is the time to
take the next step.
There will never be enough
information for some people.
Today San Diego pays and see
Jeannie profits.
But San Diegans deserve to own
the goods and services that we
pay for.
So today I'm asking you to
reject corporate greed and act
in support of San Diegans by
supporting public good.
>> That doesn't include your
time.
Blair Beekman.
Hi.
I'm already here.
Shoot.
It's my time.
Thank you.
I'm not very knowledgeable
about these things, but I come
from the Bay Area.
They have a great tradition of
community energy and working
with unions I feel I have to
refresh myself on such
subjects.
I hope you guys are learning
that too that the municipal
things weren't offered here.
For union things I hope there
can be dialog between everyone
.
It sounds like people want to
have the dialog and we
definitely want to believe in
the future of what community
energy can offer.
Where you minister a municipal
system MAY not work.
We do have little small
programs you know like
the funding of neighborhood
infrastructure that can be
called a municipal program
possibly and work in those kind
of avenues.
But working towards the overall
goal of community energy I hope
we're all on board on that
subject matter and want to be
building such good things for
all of us in our future.
>> Thank you.
Thank you, Jessica Anderson.
>> Hello, Council.
Month after month over the past
year my utility bill has
continued to climb, reaching
nearly over $300 every single
month in my first apartment out
of college.
This is unaffordable.
It is ridiculous that City
Jionni profits nearly $1
billion a year yet 1 in 5 San
Diegans cannot afford their
utility bills.
It is ridiculous that in that
stage you need claim that this
is not feasible when they are
asking for an 8.6% increase at
the cpu.
See it is absolutely ridiculous
when San Diegans are forced to
choose between food on their
table paying their rent and
paying their utility bills it
is clear the system is broken.
Public power is a real
opportunity to address this
crisis.
Public power presents us with
the opportunity for clean
affordable energy.
Public power presents us with
the opportunity for clean air
public health, the opportunity
to protect strong unions and to
protect people In San Diego who
cannot afford to live here any
longer.
Public power is a real viable
opportunity to build a more
affordable and thriving San
Diego.
>> Thank you.
That does conclude your time.
Nicole Lilly.
Okay.
Uh oh.
Here she comes.
All right.
>> Sorry.
Hello.
My name is Nicole Lilly.
I'm a 23 year old run turned
Golden Heel and the executive
director of our Time to Act a
youth led 523 nonprofit
organizing powerful youth for
an inclusive, equitable and
sustainable future.
As youth organizers we have
become all too familiar
tackling complicated and
nuanced issues and creating new
and innovative solutions
because it is what is necessary
.
I support the implementation of
public power without denying
the necessity of labor
considerations.
We need not be divided.
Dismantling monopolies like
Jeannie is an effort that we
must join together to pursue.
Utilities like housing and
health care are basic needs and
allowing it to be maintained as
a tool for profit because it is
complicated is unacceptable.
Every day San Diegans young
organizers like myself demand a
commitment from this council to
do what is complicated because
it is necessary.
My roommate and I figure out
how to make do with less and
less every month to survive in
San Diego.
I urge the city to do more to
make San Diego work for all
the people in this room not
the corporations that we
destroy.
>> Thank you.
Lori Saldana.
>> Good afternoon And I want to
just acknowledge and thank all
the people who have spoken
today because the perspectives
are important and I think
they've all raised some really
excellent points on both sides
for and against us.
There are a few certainties in
life We know a couple of them
death taxes and I'll add a
third sdg in asking to raise
their rates.
300,000 people at least cannot
afford to pay their higher
rates here in San Diego.
We pay the highest rates in
the country.
So with certainty when I heard
the report on my way in today
and listen to the report saying
an estimated 3% rate increase
would even out over time i
think you're way
underestimating what us intends
to do.
So in the interest of time I
will just point out one more
thing.
Working against us is one
culprit.
You have received $5,000 as of
MARCH 31st from ibew for your
run for Congress.
I would ask that you please
recuse yourself from voting on
this.
>> I think you have a conflict
of interest and thank you for
your time.
>> Okay, take it easy.
This is an information item.
There is no voting.
Dori Brueggemann You do have
time ceded to you by Barbara I
have a rose Okay you have two
minutes.
Please begin.
>> Good afternoon Council I'm
Dory.
I'm an executive board member
of Public Power San Diego and
some of the points I had
written down here today have
already been said so I'll skip
those.
But I wanted to read a couple
of quotes from the feasibility
study phase two The first quote
that I have here is
the financial risks while real
are manageable through careful
planning and execution.
The municipal electric utility
remains viable even under
adverse scenarios.
The bottom line is that this
report shows that this is
feasible.
This quote also tells us that
when we build a public utility
we are building a domain where
success lies in our hands.
And I want to say there's been
a lot of fear mongering here
today.
I also just want to shout out
thank you.
Britney says for
the fearmongering directly from
sd Janey She did not identify
herself but she does work for
any.
I want to talk about the risk
of not making the choice to
switch to public power instead
making the choice to stay
the course where we are hoping
that legislative reform or cpc
reform will somehow fix this
problem.
The cbc is not going to save
us.
That's not our turf.
That's Sdrinis turf.
One of our allies over here had
a great example of the way that
they exploit loopholes.
Any any roadblock we put in
their way they will exploit.
We are not winning as much as
we need to be to fix
the problem at the state level.
But the point is that public
power is not uniquely risky And
also we're lucky that we have
this option that we are a city
and we can actually do
something significant to make a
change and get out under
the thumb of Jeannie.
So I want to echo what my ally
Patricia and Diego said.
We can do this.
>> We can work together.
This is a growing movement.
And don't let the fear
mongering get to you.
That does conclude your time.
Omar Walter Nadji.
One minute.
Yes.
So you said you uniquely
positioned to chart a different
course with national
consequences.
Climate is one of the greatest
natural resources anywhere in
the world.
We have an abundant sunshine
growing clean energy sector,
world class research
institutions and the population
has consistently embraced
innovations.
We're not simply capable of
generating enough clean energy
to power our homes and
businesses.
We have potential to become a
net producer of energy creating
economic value that remains in
our region rather than leaving
it.
Decisions being made right now
will determine who benefits
from this growth.
This opportunity will the value
created by this transformation
of our system remain here in
San Diego reinvested in
affordability, reliability,
infrastructure and local
priorities?
Or will it continue to flow
primarily towards a system
designed around shareholder
returns?
We have every incentive to
preserve this model.
If we were part of this study
well we that's an investor
owned utility understand that.
But as you guys represent us
the citizens your
responsibility is about what
serves San Diego is best.
Sorry I'm not professional
speech.
Is my first speech in years.
But anyway I think this is a
test.
The biggest question is ask
whether the generation of
wealth created by the energy
economy should be captured
locally and used to benefit
communities that created it.
Or are we to continue to give
it to us to Junior?
This isn't their decision.
>> Thank you.
That does conclude
the development session but
please keep.
>> I just walk to the parking
structure with former
Councilmember Mark Kersey.
>> He was kind enough to listen
to my questions about why
the city can't do the simplest
things to oversee the many
businesses that operate
throughout this city.
Do you know what he said to me?
He said there was too much
going on in this city for
the council members to deal
with all the details in
the city.
Too much going on for you to
deal with.
Now I'm not an expert on energy
but I have become an expert on
business interests hijacking
the city government for their
own purposes.
If you have any doubt, look
into how the city That's you.
Joe Lacob and Todd Lauria have
mismanaged the Torrey Pines
Gloria port.
Thank you.
Our final in-person speaker
will be Anthony Ralphs.
>> Good afternoon City Council.
I want to remind everybody in
this room that we all share one
thing in common We're all
getting ripped off by Jionni
and it continues every day year
after year.
$1 billion in profits last year
Almost a billion the year
before.
I'm sick to my stomach.
I'm tired of not being able to
pay my energy bills.
I'm tired of the people in my
city not being able to pay
their energy bills.
I'm tired of one quarter to a
fifth of the people in this
city not being able to afford
meeting their energy bills at
the end of the month.
I'm tired of seeing a corporate
monopoly and its greed
prioritized over the people
that live in the city.
I am a union member.
I'm a member of iww,
the Industrial Workers of
the World so I understand
the priority that labor places
in our lives.
But I also understand that only
half of the people in this room
are getting paid handsomely to
be here And it's not those of
us who hate sd Jeanie for free.
>> Thank you.
We also received two speaker
slips from individuals wishing
to register their position in
favor but not speak from
Brandon Reynolds and Korina
Vega.
That concludes in-person public
comment.
I've started the five minute
timer and council chambers.
We will now turn to the virtual
queue in which there are
currently ten speakers
requesting to speak.
We will begin with Eric Revolt
Zachary.
Imagine every single family
house and duplex in San Diego
covered with twice the solar
panels there are now and
they're going to get paid three
times more for the energy.
Imagine Fashion Valley covered
in solar panels.
Mission Valley covered in solar
panels.
The parking drives all their
green power.
And imagine every trolley
station covered in providing
shade and solar energy to feed
the dc motors on the trolley
instead of using ac dropping
down to dc for them directly
with solar panels on
the trolley system Even
the tracks elevator from
the tracks.
We're now doing ac power and
turning that ac power into dc
causing energy when we can
generate it from solar panels
right there on the trolley
stations.
>> No all involved is solar.
Thank you.
That does conclude your time.
We will go next to Eric Proval,
Paul Jones Eric.
>> Perfect.
Thank you so much counsel.
My name is Eric Proval and I am
the ceo of the San Diego North
Economic Development Council
representing an area North of
that sa 56 with more than 1
million residents and 500,000
jobs.
I urge caution and ask that
the city pause this effort
until the regional implications
are better understood.
The reported self acknowledges
that the electric system was
not built around city
boundaries.
Numerous substations and other
assets serve customers both
inside and outside the city.
Yet the report appears to
assume that separating and
operating these assets can
occur smoothly and
cooperatively.
That is a significant
assumption with major
implications for reliability
costs in neighboring
communities.
But most importantly the report
does not adequately explain how
a municipal utility would
participate in regional
wildfire prevention, weather
monitoring and emergency
operations before moving
forward.
North County communities
deserve a clear understanding
of how municipal this action
would affect them.
Thank you for your comments.
Kathleen Levitt Thank you.
Good afternoon and thank you to
everybody who spoke.
Governor Newsom allowed
California companies to tax
taxpayer dollars from the state
$21 billion while fund wildfire
fund to pay for their damages,
fines and liabilities for fires
that were directly tied to it.
For every dollar the utility
spent building infrastructure
they were allowed to charge
customers an additional 10% in
profits for their shareholders.
They routinely their priority
is profit for their executives
and shareholders and they
routinely disregard public
priorities They disregard while
diverse habitats that support
migratory birds, reptiles,
pollinators and they're ignored
.
On behalf of permitting if
figure you need to put their
power lines they now want to
put their power lines directly
through the anza-borrego Park
that is a designated park in
perpetuity to protect Thank
you.
That does conclude your time.
Francis Yasmeen Matlala Hello.
So first it's I think it's
important for everyone to
realize that like the entire
state of Nebraska has municipal
run power is is not impossible
task any government can do it
if they just create the public
the political will to do it.
I think that every one of
the council members should
attend The American Public
Power Association's annual
conference and you can learn
about and meet cities of people
from cities all over
the country that enjoy
the benefits of public power
that we are only dreaming of.
I want to state that the sdg
business model it's not about
security or affordability.
It's about profit And even
the way they're designing
the future with long
transmission lines out to
the desert is the wrong way to
go.
It's not sensible unless you
try and exploit people for
money as he takes $1 million a
day out of the city and 3
million a day out of
the county, it's got to stop
now.
>> Thank you, John Stump by
John Stone And DECEMBER 15th
2025 I sent the council a nine
point program to get out of
this mess with me.
And the key thing in this nine
point program which I'm sending
you again today is that
the city should create its own
municipal utility for its own
use.
The city currently now
generates its own power and
spends a lot of money paying
Genny.
The city could easily set up
its own department and that
would be the initial step
the transitional step toward
public power.
City Council Start exploring
where you spend money and where
you generate electricity now
and set up a separate
department To watch that please
follow the direction of my
mother at DECEMBER 15th 2025.
>> Thank you very much.
Thank you.
And I please know that the five
minute timer has concluded with
eight speakers left in
the queue and the other
speakers will be taken after
this time The voices please
begin.
>> Hi my name is We try and set
the director for businesses.
I'm calling to support you know
public power.
I know that I also think it's
ironic that we need a study to
figure out where we should put
the power.
We all talk about the rising
costs of standing so much now I
you know, if you can find a
little will to make it happen,
it will really help a lot of us
reduce the cost of living here
and stay here And then I go it
is the no getting there now we
don't really need a study to do
it But now you have a study Can
you please move forward with
it?
That would be great.
Thank you.
Color with the last word Digits
88213.
Please begin.
Okay so the goal here is
unbelievable to get people to
have confidence that this board
will do the right thing when
the record of ignoring
the people's wishes and needs
are like it's been proven in
putting people honestly to
the people who are awake to any
and all we have We have so much
of our money and keep asking
for more But you realize that
this board you're addressing
does the same exact thing
honestly from sandag to
the county to this board.
I mean all these corrupt
government agencies they'll
take for it They will take from
us and you know, whatever
benefits them.
But I just wish, you know, more
people were awake to that And
it's it's amazing You can't
address us without also
addressing the corruption of
the very board.
Well, I got to say that.
Thank you, Evan Burke, please
begin.
>> Hello.
I want to speak in favor of
public power first.
There is no benefit to a
private monopoly like Genie.
There's no need to even pretend
to little cost with no
competition.
Meanwhile, their insanely high
power costs make our cost of
living more expensive and
contribute to issues like
homelessness.
I found the fear mongering that
I've heard outrageous.
We hear that we don't have
enough data but what more data
do we need when dozens of other
cities have already done this
and succeeded, we were warned
that San Diego will have to pay
new costs like insurance
premiums.
But San Diegans are already
paying those costs and more
Whenever Janey turns a profit
the definition of madness is
doing the same thing over and
over again and expecting a
different result.
We've seen what I see Genie can
do and will do and now's
the time to try something
different or just a new form of
pop pop power.
>> Thank you.
Thank you.
Natalie Rashid, please begin.
Hi.
Natalie Rushdie Here I am
District seven.
I want to bring couple
attention to one number that
explains a lot of what's
happening with our electric
bills.
You see just authorized a
return on equity of nearly 10%
for 2026 to 2028.
That's the profit percentage
Sempra's shareholders earn not
on selling us electricity but
on infrastructure spending
itself.
The more he spends on poles
wires and upgrades the more
profit profit it earns because
that return is applied to
the entire faith based
independent economics at
the American Economic Liberties
Project testified that their
fair return based on current
market conditions would be
closer to 6% and the gap
between that and what was
actually authorized comes out
to 4.4 billion in overcharges
in 2026 alone across
California's immediate
utilities.
This is exactly why the cities
on Public Power study found
that most Thank you that does
conclude your tired electric
grid.
Next speaker is Jordan Lewis.
Please begin.
>> Hi, my name is Katherine
Mock.
I'm a resident of San San Diego
County in North County and I'm
an sd g and customer and I
support acquiring sd Janney
Infrastructure and could bring
it to a publicly owned power
utility particularly for
concerns like affordability and
transitioning to zero emission
utilities.
Well it's expensive to acquire
a managed utility and that cost
will be footed by us rate
payers.
We're already footing the bill
for sd duty and on top of that,
as others have pointed out,
we're paying the additional
cost of a for profit entity
including the hundreds of
millions of profits each year
that sd only makes as well as
the 22.2 million total
compensation for Jeffrey
Martin, Sempra ceo That was
last year's number.
So for these reasons I fully
support advancing a publicly
owned utility for San Diego.
Please continue this effort.
Do what you can to reduce
the uncertainty.
Incorporate the concerns of
some of the folks who spoken
opposition today and complete
the transition to public power.
>> Thank you.
Thank you.
Next speaker is a caller with
last four digits 8700.
Please begin.
Thank you.
Yes, I support public power
also known as Power of
the People.
Here are my reasons.
Number one, all of you using
the power of your voice today.
Number two, trusting that all
of us will do a full analysis
of this of its ability.
Number three keeping an eye on
San Francisco as a public power
model.
This is a golden opportunity
for creative action outside
the box of sd g and e!
It's been a great item.
Thank you everybody and love to
all.
Thank you.
Our next speaker is a caller
with the last four digits to
265.
Please begin.
I am Diego.
I live in Kensington.
Over the last five years San
Diego Gas Electric has
appropriated an average more
than $800 million per year.
At the same time, nearly 1 in 5
Centurions cannot afford to pay
their utility bills.
And greed knows no end.
And just last week they
requested the rate increase of
8.6% at the puc.
This would mean an increase of
over $22,000,022 a month on top
of the already high utility
rates we are paying above
the public power Feasibility
study shows public power is
possible feasible and cheaper
for San Diego and the time for
public power is now.
My utility bill is like we live
in a 2000 square foot apartment
in utility bills like $250.
It's just ridiculous.
>> We need to do public art
now.
You.
>> Thank you.
Our final speakers and all of
Alaska.
Please begin.
Hi.
So I'm a resident of District
two.
Natural monopolies like
utilities should not be owned
by for profit entities because
without competition and
swimmers will always be
squeezed for profit.
It was a mistake to have ever
allowed power to be privately
owned.
If the power had been publicly
owned, the electrical expertise
and the good union jobs would
have always been available
through a public entity.
It will never be a good time to
unwind this mistake but it
needs to be done.
We understand the fear of
uncertainty facing union
members but there is no better
union employer than public
agencies.
As you have pointed out, your
expertise and skill will still
be needed.
And yes, there will be a
reshuffling of jobs but
the jobs would not go away.
We hear the argument we don't
have enough information But
isn't this what the council is
considering a feasibility study
to gather more information.
We want the council to have all
the information possible to
make a decision on this issue.
>> We cannot be afraid of this
knowledge.
Thank you.
That does conclude public
comment on item 200.
>> Thank you.
All right.
Thank you, Deputy Clerk.
Let's take a moment and thank
Kevin.
This is his first big meeting
sitting there in the chair.
So well done, sir.
And to your entire team because
the way that you organized all
the flips truly, truly
impressive.
I'll just give a personal
thanks to everybody that showed
up and the special shout out to
those who showed up just to
give time to somebody else to
speak.
Greatly appreciate that.
So with that we will turn it
over to the council members for
questions and comments.
And we'll start with the chair
of the Environment Committee.
>> Council member Ella Rivera.
All right.
Thank you.
Council PRESIDENT.
Thanks for the report.
Obviously we had this
conversation at Environment
Committee.
This is a continuation of that
And I think the additional
public participation is useful
because it highlighted to me
what I think is probably
the most important component of
this And with very few
exceptions almost every comment
we heard today came from one of
two groups either the blue
collar workers who who keep
the grid running or residents
who are breaking under
the weight of their bills.
It's working People fighting to
make rent, fighting to keep
the lights on and fighting each
other over scraps because
that's exactly what a rigged
economy does.
It doesn't just take people's
money.
It turns neighbors against each
other, workers against
ratepayers in a fight over who
absorbs the pain while
the people who actually rig
the game keep their feet up and
enjoy the show from the other
side of the table.
So who's doing that?
As Jeanie in Sempra the set of
millionaire executives who will
go home tonight to a financial
reality that no one who
testified here today can even
imagine let alone enjoy.
So our San Diego boys are
fighting each other over
scraps.
Executives sit fat and happy
enjoying the fruits of their
victories.
We should put some numbers to
that because I think that's
important.
Sempra ceo Jeff Martin took
home a compensation package
worth $22.2 million in 2025
That made him the fourth
highest paid energy executive
in the country.
An average California worker
would have to work for 236
years to earn what Martin made
in a single year 236 years.
That's not poor people.
That's the average California
worker.
And that's the gap between
the people who keep the grid
running and the man at the top
of the company who owns it.
And I think there's something
really important about why it's
so important to continue this
conversation.
I understand the anxiety that
it creates for the workers who
who are impacted by
the conversation.
But I want to explain why it's
been important to keep this
conversation going.
Because despite this
conversation going despite a
visibility report that says
that this is feasible despite a
growing movement of San Diegans
who are organizing to fire
Jeanie as Jeanie still filed
for another rate increase 8.6%
on the average monthly bill
That's an extra 20 to 50 a
month.
While all of that scrutiny is
happening, not pausing to read
the room, they're not
questioning whether or not they
should slow down.
They're just they just keep at
it.
Increase after increase after
increase.
And the message that that sends
to us is that they don't think
we have the nerve to have an
honest conversation about
alternatives.
So I think we have a
responsibility to know what our
options are and ensure
the public knows the pros and
cons of those options.
According to the most recent
electric rates report by
the California Public
Advocate's Office over the past
ten years as residential rates
have risen 98% and every single
cent that ibew Local 465
members have earned in that
same period they've had to
fight for every contract
grievance after grievance.
Nothing handed to you earlier
this year or at the end of last
year as de went after a small
group of workers right to even
hold a union election.
Hiring the most notorious union
busting law firm in America and
tried to take advantage of a
paralyzed federal labor board
to run out the clock on that
vote.
And if it wasn't for the work
of the union they would have
been successful.
>> So when ratepayers see a 90%
or 98% rate increase and ask
for that money went I know it
didn't go to the workers.
It went to a company that will
spend resources fighting just a
handful of its own employees
rights to organize or asking
the rest of us for another 8.6%
.
So I want to make sure we're
really clear about what we're
up against and who we're
standing with.
MS. Mendoza I appreciated what
you said.
We can work together.
Nobody wants to fire
the workers who built the grid
and keep it running.
The conversation is about what
our options are instead of
the status quo Because
the status quo does not work.
The status quo allows a ceo to
earn 236 years worth an average
worker salary in a single year
,fights its union over a
handful of jobs and squeezes
rate payers for a 98% rate
increase.
All while there's a
conversation happening about
what our options are.
So that context is incredibly
important.
I appreciate the conversation
here today and I again just
want to reiterate why I think
it's so important for us to
keep having it.
>> There were a lot of
important points made in
today's conversation about
the way that everyone feels
these impacts about the way
the city feels, the rising
costs, the way it has a a
domino effect in terms of cost
of living.
And we have this responsibility
.
I did have one one question
that I brought up last time and
I'm curious if there's any
updates.
Last time I asked about Long
Island and the hybrid model
that they pursued.
Have you done any additional
research on that?
Any additional analysis?
We did look into it generally.
Councilmember I think
the important thing to remember
about Long Island so you are
right that the Long Island
Power Authority lpa then has a
relationship with Shute I don't
remember actual utility
operator.
The issue is is that because
Long Island and New England and
most of the East Coast frankly
is in a deregulated
environment.
So it automatically splits kind
of commodity And then you've
got a lot of competing
distributors.
>> They are overseen still by
the state Department of Energy
and Electricity Resources.
And so you still have a state
level regulatory body that
oversees that specific contract
And there are conversations
going on on updates on that
contract that are coming up in
the next several years.
If there is continued interest
in deep diving in here we can
but there's no equivalent model
in a in what was a bundled or a
semi unregulated environment
like Calif in some of the other
larger states have got it.
>> Appreciate that.
General idea though is
the workers don't have to be
displaced from their current
place of work.
They continue to do the work
that they do for who they do
it.
What changes is that company is
now working for the city or
the municipality instead If I
understand the model correctly.
Yes.
Generally what I did not what
we did not necessarily have
time or resources to do was to
dig into the actual contracts
and compare what Long Island
Power Authority has negotiated
with the in this case.
And in that instance you're
talking about us contracting
out to sd Jenny so that that
and how different that is from
say either the workers contract
under that with that system
versus another and how
different say the revenue or
model is versus other areas
where that utility operates
separately?
Okay.
Again, just in terms of us
understanding options, the pros
and cons of those options
hearing what are the main
sources of anxiety that matter
to me here which is hardworking
people not being displaced in
their jobs, not having their
jobs place at risk And that's
seeming to be a thing that was
worked through in that model
While also significantly
reducing management costs.
It just seems like a thing that
we should know as a potential
tool in the tool belt.
I'll just end with this council
PRESIDENT.
I'm glad we're having this
conversation.
I think it's important and I
appreciate Nate your comments.
The reality is is that this is
I don't know that there's a
single issue where I heard have
heard more agreement amongst
folks from different sides of
the political spectrum.
We had some of the most
conservative folks who engage
with the council and some of
the furthest to the left who
are in complete agreement that
what is what we are currently
operating under is
unsustainable and unacceptable.
And if that doesn't show that
the dam is starting to break,
that San Diegans are sick and
tired of paying so much for
their utility bills I don't
know what will.
And it's that's why it's
incumbent upon us to continue
this conversation, continue to
work so that we know what
options we have to both protect
workers and protect ratepayers.
Thank you, Council PRESIDENT.
All right.
Well, thank you Council member
Eli Rivera.
And as a reminder this is an
information item and no motion
is required And I'm going to
jump in at this point.
So I want to start out by
thanking Heather General
Services Team Randy Wilde and
the mayor's office and
the teams that knew Jen and and
for this work And of course
thank you to every member of
the public who showed up
speaking on all sides of
the issue And those who called
in Phase two report was an
equally impressive undertaking
as phase one and provided
greater detail and clarity on a
proposal that is massive in
scale and as complex as
anything we would undertake at
the city.
That does not mean we should
shy away.
We can and will do big things
and win Financial impacts on
residents and businesses is on
the table.
We must be bold.
I will start by highlighting
the opening slide.
I mean it's simple Energy
utility is both economically
feasible and technically
feasible.
That is what the city set out
to determine and should we
decide to proceed there is a
path forward.
Of course that comes with risks
that must be weighed and
assumptions that must be tested
and we will have to find
the right balance.
And whether you feel the study
has been too conservative in
its projections or it MAY take
longer than initially
anticipated.
A municipal energy utility
remains feasible and since
the outset onset of exploring
public power and when I voted
against the current electric
and gas franchises in 2021 I
have talked about the limited
options we have as a city.
But just as we fought for in
the creation of the San Diego
community power in giving
customers options it would be
irresponsible of us not to
pursue pursue alternatives to
our energy distribution system
.
Today's presentation as we've
heard coincidentally perhaps
prophetically comes just days
after sd genius latest general
rate case submitted to the cpc.
And as we've heard from members
of the public sd Janey's own
projections are substantially
higher than the average annual
increase assumed by
the consultants in the study.
>> As an engineer I appreciate
that conservatism moving
forward with this process
demonstrates our commitment to
not sitting back not accepting
the status quo nor remaining
vulnerable to a monopoly but
rather exploring all options to
provide more affordable rates
keeping our options open and
continuing to pursue a
municipal energy utility is in
everyone's best interest.
So for those of you who opposed
this conversation, look into
the faces who can't afford but
don't qualify for subsidies on
their electric bill.
And for those of you who
support, look into the faces of
the workers who are wondering
whether they will still have a
long term career in their
chosen profession.
And a promise today is not
necessarily a promise that will
be kept.
The two sides of a conversation
And for those who oppose
municipal tell me the question
I ask you is what are you doing
to join the city in our efforts
to control rates, to control
the impact or reduce the impact
that is hitting so many San
Diegans?
And if those who spoke that
were prior here at City Hall
let me remind you you let a 50
year franchise expire with no
game plan to give our city
options or help control rates.
We missed a golden opportunity
and 2021 became a very awkward
year to realize we had no place
to go and a franchise had to be
signed to keep the wheels
turning so to speak.
So this is a difficult
conversation.
I agree with Councilmember Eloy
Rivera.
We should keep our options
open.
We should continue to pursue a
municipal energy utility
because it's in everyone's best
interest.
And until we have sd Jeannie
come to the table, pull that
general rate increase and have
the conversation as one member
of the public I'm not going to
name.
He knows who he is and he
pleasantly surprised me today
and have a real conversation
about how we relook at rates
knowing as some of you have
said that the cpp is not going
to save us.
And as a reminder cpc doesn't
guarantee profits.
They set a profit rate to set
the rates.
And when I won and the investor
owned utility exceeds those
profit rates year after year
after year.
Something has to change.
We have to protect our most
vulnerable individuals who
can't afford what should be a
right of affordable electricity
going forward.
>> So that's where we stand
today.
I agree that we have to keep
this on the table going forward
.
And again, thank you for
the good work in this phase two
study.
With that again this is an
information item no motions
required.
We'll turn to council member
Campbell, the third member of
the Environment Committee.
>> Thank you so much.
Council PRESIDENT When first
elected and thank you for
the presentation and thanks to
the public for all of your
input.
It's a.
Agreed with and appreciated on
all sides.
This is a really complicated
issue and I want to say that
when I was first elected to
council I was appointed chair
of the Environment Committee
That was JANUARY 2019.
First thing I did was lead
the effort to create community
choice aggregation.
In other words, what became San
Diego community power does now
include six cities and our
county government which means
our unincorporated areas.
One of the goals was to provide
cleaner energy options to
reduce the effects of climate
change.
It also gave our communities
more local control over how we
purchase energy And at that
time the city commissioned
the first feasibility study on
municipal izing our energy
utilities, gas and electric.
And since then we have
completed two more studies and
spent millions of dollars on
consultants to tell us about
municipal ization millions of
dollars we could use this year
in our budget or in a year in
our budget.
The findings have always been
clear The estimated cost is at
least 8 billion.
That was the first study that
was seven years ago is probably
16 billion now and that was
just for the infrastructure
needed.
The city cannot afford this.
That estimate does not include
additional cafs costs staffing
operations and onboarding.
The impact of exit fees on
the other 17 cities that rely
on sd Jeannie system and would
expect us to pay them
the difference or the fact that
we still would need to use sd g
and e for the gas component.
So this study was only about
electricity not the g.
Part of sd g After three
studies we do not need more
analysis.
We already have the information
we need to decide at this point
it is too expensive to continue
to spend billions of dollars on
consultants.
It is way too expensive for
the billions that the city
would have to spend to try to.
To provide this utility.
It is important to know that
the state of California public
utilities Commission, the puc
it says right there in the law
is main responsibility is to
protect ratepayers and also
decide utility rates In so
doing to protect ratepayers.
They're supposed to protect us
.
They don't.
It's supposed to decide utility
rates within mind us consumers
The puc needs to be reformed.
It needs to be held accountable
and I ask you to please
inundate them with emails and
phone calls and letters that
they need to lower sd any rates
not raise them.
Forming San Diego community
power was a good idea and sd
Jeannie was in favor and you
MAY be wondering why Why would
they have been in favor?
Because commercial utilities
are not allowed to make a
profit on what it costs them to
buy the power to make
electricity And so they handed
this off gladly to the San
Diego community power.
Do you know that 95% of
electric customers have signed
up for San Diego community
power?
It's a good thing It's been
very successful.
It has millions of dollars in
its reserve.
The question is why have they
not lowered their rates?
We need to have them come in
and answer that for us.
Meantime, we need to stop
spending on consultant reports
.
I think this last one was $3
million.
It's ridiculous.
Is going to come out the same
every time.
It's very, very expensive And
the city has 100 and $100
million deficit It can't even
meet And we're supposed to
spend 8,000,000,008 billion 60
billion to become an electric
company?
No, no, no.
That doesn't make any sense at
all.
We cannot afford to be a power
company In the meantime, as dg
and his top executives and
those of many other
corporations in this nation
need to decide how many
millions of dollars a year do
they need to live on?
This is ridiculous.
Just as my my colleague
Councilmember Ella Rivera said,
the guy in 2025 made $25
million a year.
It's ridiculous.
Think if you only made a couple
of million dollars a year how
many rates could be lowered?
Quite a few.
And so I say to all the top
executives of the corporations
in this nation how much money
do you really need at the cost
of making your consumers poor?
Greed is evil.
Stop practicing it.
>> Thank you.
Council PRESIDENT All right.
Thank you, Council member
Campbell.
We'll go next to council member
Von Walbert.
Thank you very much for your
work today and for
the presentation.
Thank you for everyone who's
come in today to express a very
justified frustration over
the fact that effigy enables
continue to go up including our
own workers who also don't want
to pay that.
And I want to thank the workers
who came in, especially our
veterans who served in Iraq and
Afghanistan.
I can't imagine what you've
seen.
You know, this past Memorial
Day we just did a memorial
commemorations only for folks
who died in the Afghanistan and
Iraqi wars because they were
our generation.
And so just know that you have
sacrificed a lot in coming in
and getting training from ibew
which is one of the most
incredible veterans transition
employers in this country is
fantastic And I want to thank
you for continuing to do that
work.
So I know that we up here care
about you.
We care about union workers And
I'm going to show you why what
we're going to do.
I also want to thank
the environmentalist who came
in San Diego 350 and everyone
who's been trying to take away
the monopoly power of this
company as we should our our
public power should not be a
monopoly.
We should not be paying $22
million alone To the ceo
Jeffrey Martin of Sempra last
year.
We just should none of us have
a choice about whether or not
we pay a fee.
You need to keep our power on
but I want everyone who's in
the room all the union workers
especially or anyone who works
at a job to pay attention to
this.
This is a public website from
the Office of Labor Management
Standards.
It's under the Department of
Labor.
You can check this website to
see if your employer is paying
union busters for the most
part.
We'll get to Jackson Lewis go
to the next slide please.
We did check this website when
we had to renew the franchise
agreement as council PRESIDENT
LaCava said and we all got
elected up here.
We were forced with this
renewal for stg and our
predecessors didn't do anything
about it and left it in our
laps This is a formal Clinton
report.
You can see it highlighted.
It's from c, g and e Studio gas
and electric from 2019.
Please go to the next slide.
This is a public report.
They have two to show if
they're going to hire union
busters they are public facing
in 2019 as you paid tens of
thousands of dollars of our
rate payer money to hire crews
and associates to be their
independent labor consultant
who is known nationwide to be
one of the biggest union
busters in the nation.
They were trying to rent steel
you need from hiring from
unionizing the coal center
workers And I know ibew came to
the call center Workers Aid and
made sure this didn't happen
before the next slide please.
This is the one from 2018 which
you can see Crews Associates
was paid This one I think was
signed by Scott Crider who is
now I believe the ceo of cgt.
They paid them $33,000 to hire
union busters to fight
The unionized work to cgt had
been hiring union busters And
when they came to this Dyess to
get a renewal I required cgt
their ceo to say they would not
hire union busters again with
our money And you agreed?
I think at the end of
the slides you do down And so
I'm really upset to see that
when ibew tried to get some of
their supervisor employees who
don't actually supervise anyone
into the union which is a
common union busting tactic for
an employer to say they have
supervisory responsibilities
which they don't You hired
Jackson Lewis but guess what?
You don't have to report that
because there's a loophole in
federal law that says if you
hire a lawyer to you your union
busting you can call it legal
services.
Congress can change this law
and I hope they do.
They haven't anyway, I am sick
and tired of seeing cgt crush
its workers at our expense and
I want you to know that
everyone on this diet is going
to work hard to make sure
whatever transition happens
union jobs are protected.
You do incredibly hard work at
a high voltage and none of us
are trying to do and we
respected value for that.
If you need me on a strike line
call me.
I'll be there.
That said, I'm questions First
of all what would taking over
the power structure look
the power infrastructure look
like Obviously you need is not
willing to sell their assets.
So legally what would the city
do if we were to do that?
>> So if we use the San
Francisco model as the current
Calif fornia template San
Francisco City County they're
all one thing did make an offer
to pge to purchase the wires in
their system and you kind of
didn't pick up the phone So San
Francisco petitioned to
the cpsc which regulates pge to
require pge to to establish a
purchase price.
>> So that is as Scott
mentioned, the biggest variable
about how all of this modeling
and economics really works
where feasible, where your cash
flow is, etc. That is now a
process that is ongoing.
The first decision came out in
the fall and that set
the framework of what has to
happen afterwards which
includes prey's appraisals of
the system by both parties,
multiple different valuations
and a basic set of principles
regarding things like just
compensation etc. So we know
that that step is in there.
>> There is our current
understanding and I will I am
not a lawyer so a grain of salt
a high probability that at some
point an action like this would
probably need to go to
the ballot.
And so one of the I would say
the next step that moves this
past feasibility if there is
interest in continuing this
effort is moves it into
the kind of political
regulatory legal area.
>> What that looks like really
frankly is a discussion and
guidance that will be given to
staff from discussions between
the mayor's office and council
Randi, I don't know if you have
anything to add.
I would say that there is not
currently allocated resources
to go hire more consultants or
staff resources to go do a lot
of that work in this current
fiscal year.
So our intention is to watch
closely what happens with
the San Francisco case.
Well not exactly the same
scenario as what would be
the case in San Diego for a
number of different reasons
would certainly set a lot of
precedents in terms of
the valuation methodology and
the process that the city of
San Diego would go through.
I think there's other decisions
that would need to be made if
the city were to move forward,
what would be the structure of
the new entity?
Would that be a special
district as recommended in
the report?
What type of a special district
would that be?
That MAY or MAY not require a
ballot measure or a vote of
the people depending on how
that structured MAY or MAY not
require less co component.
Again, I'm also not an attorney
so I would defer to them on
that.
But there's a number of
different decisions that need
to be made about the structure
and the process.
But I think that the highest
priority for us since this is
kind of the new process
established by the state is
through this cpc is to really
monitor closely what happens in
the San Francisco pge case.
Okay.
i have a question for a
question about the district.
So I, I, I do believe that
the power system should be
governed by a nonprofit.
I do not believe the city of
San Diego as a beautiful
corporation is ready to take
this on.
We can barely operate a water
department.
We are struggling to figure out
if we can deploy our own
ambulance system if we have to
bring that in-house.
But I do believe there's
another opportunity and that is
what Sacramento did with
the Sacramento Municipal
Utility District And this is
what I hope the advocates
listen to the city ceo you you
get a sales tax passed last
year because voters didn't
trust us.
I think the better option is
not to saddle this on the city
the better option is to create
a public utility district which
is run by experts And but
the only way anyone would vote
for this and I would vote for
this is if there was concrete
new protections for union
workers and they should have a
role in the ballot measure if
we're ever to get to that point
because there's no way I would
You're working with us and we
need our workers to provide
the power we need anyway.
So how would that process look
like?
>> As Randy mentioned,
the special district process
looks different depending on
one or multiple parties going
after it.
This is all kind of outlined in
California Public utilities
code so various structures
require votes by council and
then going to the ballot Some
of them it can be go to
the ballot directly.
So a lot of it is the structure
that is put in place and
therefore the special district
is defined by public utility
code.
I'm happy to follow up with you
with those specific areas of
law.
I do not want to even attempt
to quote them off the cuff yet.
>> Sounds like a lack of
question.
Understood that a question
about this valuation I have a
feeling it's going to be much
higher than what's even the $7
billion just because you know I
don't think you do You wouldn't
willingly sell its assets which
means it would go to some kind
of eminent domain for closure.
I don't know.
And that would be litigated
every step of the way which
would increase the cost
exponentially.
So just I have a feeling that
what's going to happen in San
Francisco a wealthy the one
thing I do give you credit for
every time we're here is
the wildfire work they are
doing which the Witch Creek
Fire didn't have to happen to
have that led down that path by
the emergency operation center
to see if you need to start up
is state of the art.
It's incredible.
It's catching fires left and
right And I appreciate the fact
that they've also invested in
wildfire attack helicopters.
So does this study also
encapsulate the cost of taking
over the emergency operations
center Because we cannot take
over utility if we're not going
to protect us from wildfires.
It doesn't because the vast
majority of the area that
the eoc monitors is not within
the city of San Diego.
It does imagine a portion of
the costs that currently are
expended within wildfire
mitigation as a part of
the overall operating costs and
thus a revenue requirement for
the utility as well as pieces
of you know there's someone
mentioned liability so there's
liability insurance etc. So
that would need to be carried
for those areas that are
subject to it.
But again I think it's
remembering that if you're
separating out the system, what
now there also then would need
to be coordination between
the two and that kind of goes
to about just compensation
piece of how much has already
been paid for by San Diego
ratepayers how much would
therefore need to be And some
of that is also subject to you
know the cpc as was mentioned
as dgt makes a revenue request
specifically within
the wildfire mitigation fund
that includes the cost of
operation of the that's the cpc
then decides how much of that
can and cannot be rate based or
should or should not be
expended.
And so what role for
the municipal utility in an
area that is definitely at risk
because of fires in not its
territory pays and plays in
the operations to ensure that
those fires don't get anywhere
near the territory would all be
part of the negotiations
between the parties.
So the feasibility study
incorporates modeled costs for
that but it doesn't outline for
a whole bunch of reasons how
specifically those negotiations
would go because simply we
can't speak for the other side
of the table.
Okay, got it.
But that would be something
that's incredibly important
that needs to be thought about.
Absolutely.
Yeah, I was I suppose you would
require utility to do something
similar So we satellite involve
ours of another state but there
are many things I wish the cbc
would do.
Okay.
My last my colleagues have
covered a lot of this.
I mean what about the fact that
there's an 8.6% request for a
rate hike and the feasibility
study had anticipated four per
year?
You know what is this large
hike that I see Judy want to
add to our bills once again due
to the feasibility study?
Sure.
So I think some of the thing to
remember is over a 30 year
horizon we specifically picked
4% one because historically in
the past two grc that's
approximately been the end
decision.
So cgu usually asks for more
money and then it gets cut down
through the grc process.
So fundamentally if you look at
that sensitivity graph,
the higher the rate increase
annually for us, Jenny,
the more cumulative benefit
there would be for utility that
is only replacing its revenue
requirements, right?
And so you can kind of say if
their rates are significantly
higher than they're saying
their revenue requirement is
significantly higher than
the That's what that
distinction is because this is
just their proposal.
We don't know what the cpc is
going to decide And because it
is frankly only a four year
picture and we're trying to do
a 30 year model providing a
conservative estimate is gives
us and it's still feasible at
4% then at 6% it is also
feasible from an economic
perspective at 8% it is still
feasible from an economic
perspective.
So it's 8% increase in 20 I'm
sorry it's overall in
the system it's actually a 5%
increase in f y 28 sorry in
2028 from 2027 rates So we
haven't seen those yet.
2028 is 8.5% and then 20 sorry
2029 is 8.5% and then 2030 and
2031 about 5.5%.
So again we're trying to blend
out a 30 year annual rate
increase in order to make those
numbers line up accurately and
ensure when we say it's
economically feasible you're
doing that with a responsibly
conservative number on
the Jenny side so you're not
overpromising savings that MAY
or MAY not manifest.
Okay.
Understood.
Thank you.
Thank you for the update.
Thank you for going down this
incredibly complex study and
what we're trying to do to at
least give the city and
the residents who live here
some kind of negotiating power
over city.
You know, it's very hard to do
that when did the monopoly but
it has to include protections
for our workers who work very
hard to make sure the lights
and the gas are literally
turned on every day And it
needs to account for
the catastrophic litigation
costs that are going to come
with trying to separate from
this.
But again, that's why I think
the utility district would be
better to take this on to
the city of San Diego itself
because that could be a fight
the good fight the city and I
don't think we can do this on
our own in a city needs to
charge lower rates.
We have no ability to handle
that here at the city of San
Diego We did Under California
state law it is Sacramento to
decide how and when a city
charges its rates.
However, in the next few years
in 20 2030 our franchise
agreement could be opened up
again by the future City
Council who sits here.
I will be termed out.
Many of us will be turned out
but we are trying to do is make
sure that 2030 if the future
Council wants to put
the pressure on cgt to lower
rates they will now be able to
do that because of the work
we're doing going down this
road with the public
marketability study and we need
to continue to strengthen our
hand to lower rates for our
state.
You need to they charge too
much.
Thank you.
All right.
Thank you, gentlemen.
Bonneville We'll go next to
Councilmember Flippen.
Thank you, Council PRESIDENT.
First of all, thank you to
everybody who provided public
comment this afternoon.
I took a lot of notes, very
interesting comments from
everybody here appreciated that
I have a few questions for our
consultant There is it says
the potential for average
customer savings of $500 a year
or which would equate to about
$42 about the end of the 30
year study period is that in
today's dollars 30 years from
now $42 MAY not seem like that
much.
So if you say the potential
savings then would be
the equivalent of what $42
about this today or would it be
$42.30 years from now to
the extent the analysis is
looking at a sort of average
bill, it would be in today's
dollars We're looking at
the percentage that were
proposed or was projected to be
relative to the savings.
And looking at the flip side,
you talk about the risk What
would be the worst case
scenario if things went south
in term in real terms what bad
things could happen to the city
in terms of what bad things I
mean, you know, who knows,
right?
I mean you could say that that
I mean I don't really know that
to tell you the truth.
But what bad things could
happen is that is that the you
know, the utility could incur
you know, costs like any other
utility incurred costs and have
to pass those costs on to a
ratepayer right Just in terms
of commodity cost, in terms of
all the costs that it takes
operating ability there's
there's always a potential
those costs could exceed beyond
what anybody could imagine and
then in which case those costs
would have to be recovered by
ratepayers.
Okay.
So essentially you're not
seeing a lot of financial risk
for the city as I mean it's a
poor entity in of itself.
You would see the financial
risk as being contained within
the utility structure.
Okay.
You've prepared a 200 page
report and analysis on
the feasibility Based on what
you know in your expertise, do
you think that San Diego should
go to a minimal utility?
I believe the report suggests
that it's financially feasible
to do so.
Okay.
I will turn now to the Office
of the Independent Budget
Analyst MR. Boer, your thoughts
on this?
My thoughts on this are many So
I will tell you what I've been
telling sort of leading up to
this meeting.
>> I've had many meetings I've
met with general Services, I've
met with Public power San
Diego, I've met with San Diego
Gas and Electric all three
entities the same thing.
We've had three studies.
They're all directionally
pointing the same direction
which is yeah, it's most likely
economically feasible.
The questions that are still
being raised how much is it
going to cost?
What's the revenue projections
going to look like?
Those types of things Another
study is not going to tell you
because there are things that
need to be worked out either
through the cpc proceeding or
somebody writing down on a
ballot measure What is this
thing going to look like?
What is structure going to be
and how is it going to operate
And then sending that ballot
measure to the people for a
decision.
So at this point I think
the study is sound.
It's a sound of the committee.
It's showing a path that could
be taken with known risks At
this point as Heather kind of
alluded to earlier, it's now a
policy decision on what
the people want to do.
How would you want to frame it
and how would you want to craft
If you want to craft a ballot
measure, how is that going to
look That will start answering
a lot of the questions that are
here today but it's kind of
going above the staff paper of
you know what they can answer
for you.
Okay.
Thank you, Council PRESIDENT.
All right.
Thank you, gentlemen.
Whitburn we'll go next to
Council member Campion Thank
you very much, Council
PRESIDENT And thank you to
the public for your
participation today.
Obviously a very big
conversation for our city
talking about over $10 billion
in one way or another in cost
and potentially more than that
in savings.
I want to get to the heart of
some key questions that keep
coming up in this is it's not
very often we have both sides
of the debate here to be able
to answer them.
I think the first thing I want
to point out is that we're not
going to get anywhere without
our workers who repair
the lines and make sure our
energy gets to our hospitals.
Schools and homes are taken
care of and that their jobs are
protected because they're just
too many livelihoods at risk to
make sure that they don't don't
get to continue their careers,
have their retirements
protected and their families
cared for.
The representative from sd
Eugenie would come to that
answer a few questions just
very directly.
Thank you.
MRS..
Thank you for being here.
Given the report that's in
front of us very explicitly and
directly, what is the issue
that you believe makes whether
it's municipal ization or a
nonprofit utility which are
very close to the same in this
debate?
What's what do you think is
the most risky part of that
plan?
Sure.
I think the riskiest part of
the plan is the cost.
I don't think this report
captures the full cost to
acquire our assets And as I was
talking about the exit fee to
make other customers whole.
So if you even take the 9
billion just to acquire
the assets, separate
the separate the system and
then ensure that the other
cities in our territory.
Chula Vista Imperial Beach
Alcohol and Carlsbad don't see
a significant rate increase
when the city leaves The city
of San Diego would have to pay
a significant fee to ensure
that that that doesn't happen.
That would be billions of
dollars.
So you're taking an asset to
purchase the assets of $9.3
billion and then several
billion dollars on top of that.
The feasibility study itself
says that it's $7.5 billion.
There will be a rate increase
for the first 12 years.
Then at some point rates going
to flatten out And in 30 years
there's a very de minimus
decrease in rates.
I can just things that we can
be doing right now to reduce
rates that we'd love to work
with the City council on.
I think I've talked to many of
your officers about this Almost
30% of our bills are made up of
state mandates and we would
love to work with the city
the city council.
We're happy to come in to talk
to you.
Let's work at this at
Sacramento and take these cost
ineffective things out of our
bills would immediately reduce
bills JANUARY first.
Okay.
Thank you.
Okay.
From public power San Diego
the issue of the cost.
But when I looked at
the spreadsheet realizing that
4% was the 4%, was it assumed
increase in electrical rates
annually?
Right.
I think far higher than that in
the last ten years.
Right.
Almost a doubling in 13 years.
14 years, something like that.
Correct?
Generally speaking, yes.
Okay.
So the cost of the system
relative to the cost to
the ratepayers that we're
seeing someone from San Diego,
what would you address that
issue related to
the disassociation cost that
we're going to have to pay to
the other municipalities
Because I know that one model
of this is to not take over
the transmission.
It's only to take over
the distribution.
What's your response to what
MRS. Just said about that fee
We'd have to pay other cities.
Well there is no fee yet that
we might pay.
I think I would side with I
think Heather's comment that
all of this would be a
negotiation.
We don't know where that's
going to land.
We talked about how much fire
exposure we have as a city That
would be it's partly in
the model already but this idea
that there are billions pending
that we would have to pay is
based on nothing at this point
That would be something we
would discuss.
But keep in mind the electrical
workers would stay.
They would be maintaining
the system.
I just wanted you to focus on
that part portion that she
brought up.
I know there's lots of
components that have been
brought up to date but you're
telling me we just don't know
what that true cost to
the associate would be here?
Would there be no cost if we
just did distribution instead
of taking over transmission
lines or the beauty of doing
distribution?
Not only is we would have no
lack of exposure so we have
years of delay to to look at
this but it's important to know
that those electrical workers
would be maintaining and
operating the system in San
Diego.
Those costs wouldn't be costs
that other cities would bear.
We would bear our own cost So
it's very much to be negotiated
what additional costs we might
have to bear as well.
Okay.
One second.
Given that our business manager
for these workers here in
the room, MR. Ferryman, can I
ask you a quick question
related to that component of
this potential model?
What impact on workers could
you guys work on all
the electrical lines We're
going to get some I'm here with
Nate.
Okay.
Thank you for being here.
The transmission versus
distribution concept here
the transmission lines cross
municipal boundaries that I
understand could open us up to
a price We have to pay other
municipalities but just a
distribution.
How many workers of that would
it impact that you represent?
I would say anywhere from 100
to 200 directly but then you're
reducing the size of
the primary group at as many as
your lowering their bargaining
strength indirectly about 1800
directly about 1 to 200.
Okay, understood.
So MRS. If we did a
distribution model as opposed
to taking over any transmission
lines, would we still be
exposed to those cut off fees
or or exit fees please?
Absolutely.
If you're taking out a portion
of our system and a portion of
our customers, those costs that
are fixed costs are still going
to need to be spread across
the remaining customers And now
you no longer have the city of
San Diego as part of that as
part of those customers paying
for those other costs.
So absolutely if you separate
the distribution cost out,
the remaining customers will
still see an increased cost.
Okay.
Transmission is where sd Genie
makes its profit.
Correct?
I don't understand.
So generation of the energy you
have to sell it at the value it
costs you to do it So there's
no profit on the actual
creation of it.
The profit margin comes from
the transmission cost from
where it's generated out to
the customers, correct?
Well, the profit comes from
both the distribute and
the transmission.
Okay.
So it's from our infrastructure
that we build everything from
that batteries, transmission
lines, distribution lines It's
the entire infrastructure
system.
Okay.
I guess a question as it
relates to the economics of
this is the transmission
crosses multiple cities, maybe
even multiple counties, right?
Absolutely.
Okay.
So there's a profit that's
built into that component that
goes to the entire system.
But after it gets to a
distribution hub say in Sierra
mesa in my district and down to
the homes, then there's a
different profit component
that's part of that correct?
Yes.
Okay.
It's the same concept though.
Okay.
When the infrastructure is
built we are making the profit
on building the infrastructure
whether it's transmission or
distribution.
Okay.
I guess I'm wondering is why
would why would we have to pay
an exit fee after the energy
already crosses into the city
of San Diego to a distribution
center And and then so we'd
have to pay to la Masons and
people from Poway and other
cities when it's crossed over
the line it's now in the city
And then the utility
the nonprofit utility would
ostensibly take control of it
at that point.
So Genie would still be making
a profit from the transmission
And at that point it's not
really affecting the Masons and
folks from power would it?
Right.
But there's fixed costs what
you just said.
Right.
Well I'm sorry.
Don't catch me.
I'll explain it.
There are fixed costs across
the entire system.
Don't build our system
including the distribution
system.
City boundaries only.
Okay?
You don't say We're building it
out for La mesa.
Done Now to do another foot in
San Diego.
So the distribution system also
crosses the borders So just
cutting it off there's still
fixed costs that go both ways
And so to serve the system as a
whole So you're taking our
customers out of the city of
San Diego out of the system and
there are still fixed costs
that will be part of
the distribution and
transmission system that would
then be shouldered by
the remaining customers no
longer the customers from
the city of San Diego.
But if a transmission line
crosses from some other county
or part of the part of
the county into our city and
we've disassociated from
the ecosystem as you're
pointing out, it doesn't seem
to me that la Masons would pay
for any component of it getting
to the distribution center and
on and we'd be buying
the distribution center from
you at that point.
So are we paying for la Masons
and people in power is I see
this one here You're nodding
your head clear this up for me
because it seems to me that
once it crosses into our city
gets to a place that the public
utility would have purchased it
.
I understand the fixed cost
component but if we bought it
from MR. Genie and it's being
owned publicly, why would there
be a further fixed cost to it?
Okay, so let me come at this
slightly differently in
the math so that it might be a
little clearer.
So the first thing to
understand is when we talk
about distribution assets in
the report, those include
specifically the vast majority
of the distribution sorry
the transmission assets that we
speak about are the substations
and that's the point of step
down.
Those are often and you want
those The reason they're
included in the study is
because you want them both for
the ability to manage
the system and then plan for
future growth so that
the oversimplified solute
example I can give here is
buying just the distribution
system is like buying the pipes
but not the pump station for
water.
So that's kind of the I just
want to address kind of
the there's a reason that we
didn't do a distribution only
kind of presentation in
the report from the just
compensation standpoint.
Yes.
So we know from the information
that's in the report that about
10% give or take of
the physical assets of any
within the city of San Diego
are fully depreciated.
One of the reasons those cost
boundary is are so large
compared to phase one is
because there's a significantly
larger component of the assets
that are old And a lot of that
is because the vast majority of
ratepayer funds in the last 5
to 10 years of all of city
genius territory have been
toward wildfire mitigation
that's been approved at the cpc
.
And to Councilmember Von
Wilpert point, we have
benefited from that as a city
but we're also paying for it.
>> We are ten and in every
other municipalities paying for
it.
So ten years ago the city of
San Diego ratepayers made up
approximately 40% of city
genies Total revenue Since
we've now seen growth in houses
and industry etc. In
the greater San Diego region
we're now down to about 35% of
their revenue.
So the issue of just
compensation in a hypothetical
simply says okay you are going
to remove 35% of revenue,
660,000 customers from
the overall territory.
>> If you do that that means
that and again we don't put
this number in the feasibility
study because you can kind of
pick any number to put in that
whatever investments sdg any
continues to make from that
division from the point of that
division are only going to be
applied to the rest of excuse
me the rest of the system.
So right now yes, depending on
which year we're talking about
City of San Diego ratepayers
most of the urban ratepayers
frankly not just within
the city are subsidizing
investment in the physical
system outside the city If
those physical investments
continue to and are seen to be
beneficial to the whole area
including a new city I mean you
then there is a just
compensation problem that all
of those costs should not be
borne by the remaining sdg any
ratepayers If there is still
benefit out to the new city of
San Diego ratepayers And that's
the just compensation
conversation one and part of
the ongoing kind of proceeding
with San Francisco and ppg and
they have a very different
calculation both because of
Janie's lack of investment into
wildfire and the size of San
Francisco as it relates to
the larger any system but
the exit fee fees is kind of
like the cia when the ccr was
set up.
There are contracts and fixed
costs that Guinea pays or has
historically paid that the city
of San Diego ratepayers still
need to cover.
If you look back and say Well
we've done a whole bunch
outside the city you could
argue just compensation one way
If you say hey all this load
growth means that we're going
to have to do a whole bunch of
investment outside the city
boundaries but it benefits
the city than just compensation
is going to look another way
what that range looks like and
how the puc even determines
the correct way to calculate
that is a vastly open question.
Okay, So let me just go back to
one last material component of
this problem.
My understanding is if we did a
distribution only model that
would be the utility, the local
public utility that we'd pay a
portion of the bill too but we
wouldn't stop paying as genie
for the transmission component
would we Correct.
It would be like some type of
you would still have to use
the transmission system.
Yeah, okay.
We'd still have to use
the transmission system so we'd
still be bearing the cost of
the entire air transmission
system through that portion of
a potential hypothetical bill.
So why would there be an exit
fee if we'd still be paying
the transmission bill Because
of the fixed cost for
the entire distribution system
which again doesn't it wasn't
built city by city.
So even as you disconnect it,
our system is built as a
unified territory wide south
Orange County to the border and
there are fixed costs that run
through that that would still
need to be that are still being
paid by our customers.
And so if the city was to walk
away, those customers are still
paying those fixed costs that
have already been spent And so
the city can't just walk away
from those fixed costs across
the system.
They would still be
responsible.
That's what the case up in San
Francisco said is you have to
make the other customers whole
And what do you think the fixed
costs are We think it's in
the billions surely two $7
billion That's a huge range
somewhere between 4 and $7
billion for being very
concerned As I say, surely as
the investors in that
infrastructure you wouldn't
know the exact dollar amount
that it would cost, right?
Yeah.
Okay.
Can you not give me better than
427 six 6 to $8 billion?
>> Okay But it's negotiable,
right?
>> We don't think so.
And the cpc did say that it's
absolutely part of the court
case as Heather just explained
,the court will actually
determine it.
So you know, I don't know
exactly what that's going to
look like.
Yes, it could be some type of
settlement but ultimately
the court determines what
the just compensation would be
to the remaining customers So
they don't see a 20 to 30% rate
increase.
Okay.
Really quickly, you mentioned
that you didn't do an analysis
of distribution only model.
You said that right just a
minute ago.
This study doesn't provide its
kind of recommendations and
determination of feasibility
looking at just distribution
because it's not recommended
for the actual long term health
purpose and a capability of any
municipal utility.
But the other thing but there
is that distinction that's got
made of you're not talking high
voltage crossing line
transmissions.
We have transmission line is
just how big the line is.
There's a break point of what's
considered a distribution line
versus a transmission line.
We have transmission lines that
run between substations, both
of which are within the city.
You effectively want to own all
of the assets within the city
boundary in order to run
the system efficiently.
Sometimes you got to move power
really far and sometimes you
you know you can just run it
along the distribution lines.
That's an excellent point.
Power San Diego That's a
component that wasn't brought
up that I've heard before
The fact that within the city
you have the transmission lines
and if you're looking at if
you're suggesting just a
distribution only utility, a
public utility, how do you get
around that internal
transmission line?
What do you get around that is
those transmission and
distribution substations become
tollbooths.
You monitor how much power is
flowing off the transmission
system You pay for that.
We pay it through
the transmission access charges
and that is how the system
works.
Again, the first study that new
Gen did with distribution only
and so it's a choice.
Okay, understood.
Thank you, MR. CHAIRMAN, Quick
question for you.
I noticed you mentioned
leverage your workers would
have in negotiating a deal if a
significant proportion were
segregated off from the broader
body that you represent.
How would it materially change
the day to day work to have
Genie essentially handling
certain components that run
into the city of San Diego
versus a public utility
controlling inside the city?
I would say it's going to be a
substantial impact especially
when you start talking about
breaking out the transmission
and distribution infrastructure
.
As a lineman who worked on
these power lines in the city
of San Diego for ten years
before taking this job, a lot
of our transmission
infrastructure has distribution
under build so it's the same
exact pole, right?
So if a transmission pole has
16 kbps on top 12 gave you
under build and then 120 to 40
on the bottom and a drunk
driver runs into that pole and
everything's on the ground.
We struggle today having to put
up telecommunications lines,
having to rely on spectrum
at&t, Cox Communications to
come out and then we are
putting stuff up here Now
you're just adding another
layer of bureaucracy on who's
going to take the transmission.
We're going to do
the transmission, you're going
to do the distribution And then
three different telecom
telecommunications companies
are going to do these other
wires As a lineman I'm just
trying to get everything off
the ground and up safe and
power restored.
So you're going to add to
competing power companies
trying to restore service in an
emergency?
I think it would make it very
complicated.
Okay.
Appreciate that.
I'll wrap up my comments.
Council PRESIDENT I thank
the members of the public for
getting into the deep details
of just why this is so
complicated and being able to
stand side by side at
the microphone to answer
the questions very directly as
kind of transparent in fact
driven comparison I think
the public expects when we're
dealing with multibillion
dollar decisions and being able
to hear immediately what one
organization says and being
able to rebut it or supplement
it and ultimately hearing from
the workers about how that
impacts their lives.
I know we have another item
into a one where I'll have some
further comments but at the end
of the day I think that
the well I'll say my comments
about the 8% profit coming up
in a second.
Thank you Council PRESIDENT And
thank you to members of
the public for caring so much
about driving rates down for
electricity in San Diego.
All right.
Thank you.
And to member Campo, this is an
information item.
We have a lot more work to do
today but nevertheless
Councilmember Bond, welcome
one.
One more point.
First of all, the way that we
can lower bills today is by
making less profit for
shareholders.
Today any argument that we need
to get rid of the public
purpose programs in the state
but the mandates in our bills
is ridiculous.
You want us to take away
the low income assistance
program and state bills.
You want to take away
the wildfire safety mandates?
These are the state
requirements in the bills that
we pay.
That is ridiculous.
It should be said you need
shareholder profits that are
lower today to lower our bills,
not lowering help for low
income people And it shouldn't
be on the backs of cities to do
that.
Second, we already pay We
the city of San Diego already
pay for infrastructure we don't
use for city And I'm now
reading about the Golden
Pacific Power Line project that
could go entirely around
the city of San Diego.
Yet our ratepayers might have
to pay for it.
So I'm glad you're having a lot
of stakeholder engagement but
you need to engage the citizens
of City of San Diego who could
be paying for this.
And second of all you should be
doing more than just virtual
open houses.
If you're going to run this
through an unnatural state park
like Rego Springs, go to
Brigham Springs, talk to
the people in the communities
in in person about this before
you go to a natural preserve.
Thank you.
Council PRESIDENT.
All right.
Thank you.
So not seeing anybody else on
the lights.
This is an information item.
No motions required.
Thank you to Brittany, Nate
Bell and whoever else got in
the hot seat And we're willing
to take the questions from
the council members going
forward.
There was a lot of ground
covered.
There was a lot of ground not
covered for this discussion
because we weren't setting this
up for an action today because
there are still so many things.
But I'll reiterate what
the report said that it is
feasibly feasible from an
economic point of view and it's
feasible from a technical point
of view.
A lot more work would have to
be done And so you kind of
tried to summarize Heather and
I appreciate that.
So with that we will close item
200.
Again, thank you to everyone
and Deputy Clerk please
introduce item 201 Thank you
Council PRESIDENT Item 2a1 sdg
any franchise independent audit
report and Franchise Compliance
Review Committee report 2023
through 2025 Thank you for All
right As you start to settle in
introduce yourselves for
the record and let us know how
much time we need.
>> Hello.
Thank you.
Council PRESIDENT My name is
Matt.
We are We'll try to keep under
20 minutes for That's for both
for the entire reading.
Okay.
Thank you.
>> Thank you.
My name is Megan Long, program
manager and department of
General Services.
I'm joined today by Eric Cohen,
Aaron Cohen and Eric Niland
from Crow Cody Human And to
tell me about Marshall Zeigler
from our franchise Compliance
Review committee today we'll be
presenting to you the results
of our second two year
compliance period of the Genie
franchise which will include a
presentation from our
independent auditor as well as
our presentation from
the Franchise Compliance Review
Committee.
By way of background in JULY of
2021 the Council passed two
ordinances that awarded the gas
and electric franchises to San
Diego Gas and Electric
the franchise with a ten year
term with an automatic renewal
for a second ten years unless
there's action taken by council
as additional level of
oversight.
The franchise required two
things First, the city is
required to retain a third
party independent auditor every
two years to perform an audit
of each unit compliance with
the franchise.
And second, the franchise
requires the city to establish
the Franchise Compliance Review
Committee also known as the f
crc, a citizens committee
comprised of two mayoral
appointments and three council
appointments.
The icrc is charged with
receiving the independent
Auditors report and providing
its own report to Council with
a recommendation on
the automatic renewal on
the second ten year term.
Both of those reports will be
presented today in JULY of 2024
we presented a similar item for
the first two year review
period and at the same meeting
council passed a resolution to
establish the second frc to
review the second compliance
period which covers JULY 8th
2023 to JULY 7th of 2025.
I would like to take a moment
to thank the volunteer
committee members Matt Brennan,
Lydia Latimore, Cody Human So
tell me about Flagler and Corey
All right.
For their time and dedication
to this committee in regards to
the independent auditor in
OCTOBER of 2022 city staff
released an rfp for
the independent auditor and
after a competitive process
Crowell lp was elected as
the vendor cro will present
their audit findings for
the first two three for
the second two year Crowe
presented their audit findings
for the first two year
franchise period as part of
the hearing in JULY of 2024 and
the city chose to exercise its
option to extend Crowe's
contract for the second two
year compliance period.
I have with me today
representatives from the Crowe
team who will go into more
detail about their audit
procedures and findings in a
few minutes.
But at a high level the audit
covers the second two year of
the franchise scuse me
the second two years of
the franchise and includes
the financial, operational and
cooperative requirements under
the franchise ordinances and
their supporting documents
which include
the administrative mou,
the undergrounding mou and
the Energy Cooperation
Agreement.
At this point I will pass it
over to our independent under
Crowe who will provide an
overview of the audit findings
and recommendations.
Thank you Megan.
Next slide we'll go through
some brief introductions.
We'll talk about audit scope
and procedure and then our
findings and recommendations.
So next slide My name is Eric
Niland.
I'm a director with Crowe and
with me I have Erin Cohen who's
a senior manager with Crowe.
We don't have Burt with us but
he was the engagement partner
on this project.
>> I'll turn to Aaron to talk
about the scope here.
Thank you Eric So scope of
the audit was an independent
audit of Genie's gas and
electric franchise agreements
And as Megan mentioned the two
year period was JULY 8th, 2023
through JULY 7th, 2025.
The audit covered Genie's
performance and complying with
the franchise agreements
Administrative mou, the utility
underwriting mou and the Energy
Cooperation agreement
associated with the franchises
.
Now our audit procedures
included conducting interviews
with Jenny and city staff.
We spoke with city staff
including finance, operational
and oversight personnel and
spoke with many city
departments the Development
Services Department and an
engineering and capital
projects utilities
undergrounding program and city
management.
We reviewed and documented
requirements of each agreement.
We submitted multiple data
requests to City Jenny and
the city.
These data requests were
requested for relevant
requirements for each of
the agreements for franchise
fees We obtained and reviewed
Genie Annual franchise fee
calculation documents,
quarterly franchise fee
statements, processed
documentation controls
information They are aging
reports, bad debt expense
support and collection
procedures and documentation of
payment to the city Exide For
the administrative mou we
selected a sample of 13
projects to audit project
specific requirements things
like permitting inspections or
collaboration.
We also reviewed supporting
documentation for what we're
calling non project specific
requirements.
This is information sharing
protocols or communication
between Genie and the city.
Similarly for the utility
undergrounding mou we selected
eight in-process projects to
audit requirements that were
project specific and then
review review supporting
documentation for non project
specific requirements for
the Energy Cooperation
Agreement We reviewed
supporting documentation for
each requirement.
>> Now the results of these
tests indicated that we met
the four audit objectives in
all significant respects for
the audit period.
However we did include two
audit findings that were deemed
not to be significant
significant to the objectives
but warranted inclusion in
the report.
>> And now I'm going to turn it
to Eric to walk through
the findings.
You know, so the first of these
findings has to do with
compliance with
the undergrounding mou And
there were several sections of
the mou that we found
noncompliance and and they're
listed here on this slide and
I'll review those with you for
the first of those are six 11.2
for a project titled block b r
a r c g You do not complete
internal processes on time
which caused a delay in
assigning and inspector to
the project and that's Palm
City.
Edgar Highlands project.
Secondly, sd g did not provide
a written schedule of days and
hours in which the c an
inspector would be available to
a project titled Blockade r sd
g ultimately was not able to
provide an inspector at
the time of that construction
as a consequence.
So in section 743g did not
comply by providing a
construction baseline which
includes both an estimate of
cost and a schedule for
trenching conduit work for
the project titled 2bb job two
That's a crown point one.
And finally in section 834cg
has not submitted detailed 90%
design estimates in
the supporting documentation
for invoices Did not clearly
differentiate projects that
have reached the 90% completion
threshold as required by
the franchise.
So we have a number of
recommendations to address
these these misses so to speak.
The first is to establish
stronger project management
controls by developing
standardized timelines and
checklists.
Secondly, to assign a dedicated
compliance liaison or project
coordinator within cdg and to
limit these misses.
Third, to revise invoicing
backup materials to more
clearly distinguish that 90%
design estimate.
Fourth to establish regular
joint review meetings with city
staff They've started doing
those and are doing more of
them As a consequence of this
trained personnel and mou
requirements by reinforcing
compliance standards And
finally link compliance to
performance metrics or
oversight reviews.
So those are recommendations
that are addressed first.
The first findings second
finding on the next slide has
to do with the admin mou
section ten point b of that mou
as you need to not schedule
pre-construction meeting with
the city as required as
Eugenie's Field crews
incorrectly assumed that was a
classic Category one project
winner which would not have
required this pre-construction
meeting and the project was
actually a Category two
project.
So there's a couple of things
that I can do to strengthen and
you know, respond accordingly.
First by just project project
classification work and review
processes so that this doesn't
happen again.
Developing a project checklist
to be reviewed by
the supervisor before
construction begins.
And perhaps most important to
train field crews and project
managers to clearly
differentiate between these two
category types.
So those are the two findings
the status of findings from
the first phase of the audit
and I'll go through those
briefly here.
There were four findings last
Two of these have been
remediating remediated.
Those are three and four.
Number three was remediated
because it's no longer a
compliance requirement And
the new admin mou number four
was remediated because
the finding related to a paint
plant completion timing which
they met although they delayed
in meeting and getting that
done both the city and in
the study ultimately got
the plan completed So it wasn't
a compliance matter in this
phase.
The other two relate to number
one they're inconsistent
undergrounding project cost
estimates.
And so this is sort of a to be
determined going forward.
In the past there were some
inconsistencies in the overhead
allocations to the cost
estimates and they've cleaned
those up to some degree.
But going forward I think
there's still as they get into
more construction projects
there's still a need to
reinforce consistent project
cost estimates There.
The second one is just in terms
of collaborating between
the city and sd Junior on
the mou for certain contracted
services, the Mhsaa hasn't been
solicited again So to
the degree that when that
happens there more coordination
between the city and sga and on
that is merited So we didn't
say that's remediated but it's
pending the next cycle of
the mhsaa.
So with that I will turn it
back to the Council for
questions.
At this time I would have to
revert to our franchise
compliance review committee.
Hi everybody.
Thank you.
My name is Cody Hoven.
I'm the chair of your franchise
Compliance Review committee.
Nice to be back in the seat I
think.
And here with the Tell me about
Siegler the vice chair of
the committee.
We're going to split up this
portion of the presentation.
Thanks.
So just to remind you
the purpose of Franchise
Compliance Review Committee was
it was assigned a very narrow
scope per the franchise
agreement and it's formed as
you see here every two years to
review franchise compliance and
recommend to the city council
whether the franchise should be
renewed for a secondary term.
So we're a function of
the Brown Act compliant
Committee and comply with all
of the rules of the Brown Act
in our meetings.
Additionally, our
responsibilities include
reviewing and discuss
discussing the franchise audit
what you just heard in
collaboration with the auditor
and preparing a comprehensive
written report for you all
which we provided And I quickly
went quickly through these and
then making a formal
recommendation to City Council
regarding whether to approve
automatic renewal of
the franchise for a secondary
ten year term.
Next on the committee found
that Junior demonstrated
overall compliance with all
four agreements The electric
and gas franchise agreements,
the administrative mou or
the utility utility
undergrounding mou and
the energy Cooperation
Agreement.
The audit identified only a few
minor issues mostly related to
documentation scheduling or
classification.
These were isolated and
technically and with no
evidence of systemic problems
financial harm or governance
breakdowns.
The committee recommends that
routine monitoring or franchise
compliance continue with a
focus on clarifying
expectations, standardizing
documentation and reinforcing
early coordination between
F.D.A. And city departments for
the administrative mou This
means strengthening internal
controls and aligning
renegotiate renegotiation
timelines with the committees
review cycle.
Right now there's a timing
mismatch mismatch between when
the agreements can be
renegotiated and when
the committee is actually doing
its review.
That means the committee's
input MAY come too late to
meaningful meaningfully
influence the process.
What we're proposing is to
better align those timelines so
when the renegotiation
opportunities arise they
coincide with the committee's
review cycle allowing their
work to directly inform city
decisions for
the undergrounding mou.
The committee recommends
providing detailed cost
breakdowns and establishing a
regular review mechanism.
Those costs are often shown as
big lump sums and not broken
into enough detail.
So you know x is for labor wise
for overhead, for construction.
Right now it's like getting a
restaurant bill that just says
a total of $200 with no
itemized itemization.
The committee is recommending
an itemized receipt and regular
check ins to make sure
everything looks reasonable for
the Energy Cooperation
Agreement.
The committee suggests setting
realistic timelines,
maintaining energy efficient
program commitments, improving
reporting and expanding public
engagement opportunities.
Next slide please.
While complaints are strong,
the committee noted several
areas where the processes could
be improved.
These include ensuring
pre-construction meetings are
consistently held clarifying
documentation practices,
increasing transparency and
project cost enhancing tracking
and reporting under the Energy
Cooperation Agreement and
creating additional
opportunities for public
engagement before agreements or
modifications are executed.
Next slide please.
The committee recommends
continuing to monitor prior
audit needs to ensure progress
is sustained.
Recognizing that some issues
require ongoing management
rather than one time fixes, it
also suggest creating plain
language summaries of all
agreements to help both
the committee and the public
understand the purpose process
and the timelines.
Renegotiation timelines once
again should be aligned should
align with biennial review
cycle to improve public
engagement and the Committee
should have access to draft
audit findings for early
review.
Oversight shouldn't just focus
on compliance though We also
need to look at financial
impacts and how these
agreements affect the community
creating structured
opportunities for Republican
input along with more
standardized reporting across
all franchise agreements would
improve transparency and make
it easier for the council and
the public to review and
understand what's happening
next Like this.
The committee observed that not
all franchise activities carry
the same level of risk or
public concern.
So oversight should focus on
areas of greatest impact For
example routine administrative
updates like minor contract
amendments or reporting changes
don't typically have major
community impacts and can be
reviewed more quickly.
But decisions involving
undergrounding projects rate
impacts or long term renewal
terms have significant
financial and public
implications So those should be
should receive deeper scrutiny
and more detailed oversight.
Some prior audit findings like
undergrounding cost variability
have improved while others
require ongoing management.
In this case continuous
improvement rather than
the complete absence of issues
is is a reasonable but
reasonable benchmark.
To strengthen oversight,
the committee recommends
establishing successful
criteria beyond compliance for
example instead of only
confirming compliance.
We would also look at look at
outcomes like whether
the project stayed on budget or
were delivered on schedule.
Sharing all public comments So
feedback from residents is
fully visible throughout
the process not just summarized
.
Expanding structured public
input early in the agreement
process for instance holding
engagement sessions before key
terms are finalized not after
decision decisions are largely
set.
Enhancing audit scope for cost
drivers.
So instead of just seeing total
project costs we can clearly
see the breakdowns you know
like earlier and itemized
receipt and standardizing
reporting across all franchise
agreements to improve
transparency, consistency and
accessibility for the committee
,city council and the public
in general.
And so consider our
recommendations a bigger
picture.
We based on the information we
had in front of us and barring
any other decisions you all
might make.
The committee recommended
allowing the franchise to renew
with conditions.
So this Conditional Renewal
Council decision per our
recommendation should consider
both individual agreements and
among others as well as
the overall structure and long
term impact of the franchise.
So our recommendation for
renewals conditioned on
aligning renegotiation
timelines to ensure meaningful
public and council input before
agreements are finalized.
So we talked about some of our
key compliance.
i think the key findings as a
student is generally compliant
based on the scope of the audit
question posed with only minor
issues noted in the audit.
Underground costs are high and
overhead transparency could
improve.
And previous concerns have been
mostly addressed But climate
action progress has been
limited and public input was
considered in our meetings as
well.
And the three new one would
preserve flexibility for future
options like mineralization.
This conditional renewal is
the approach our committee
recommended because it supports
both San Diego ratepayers and
the city's broader policy
objectives.
But I would like to underscore
that it is important to
recognize that simply meeting
the terms of these agreements
the compliance alone doesn't
fully address the bigger
concerns of how you define
success As a lot of discussion
you've heard today.
Things like affordability,
potential rate impacts or how
these agreements align with
the city's long term energy and
climate goals.
This is why renewal is
ultimately a policy decision to
city council balancing
compliance with public value
and long term priorities.
>> Thank you.
We're happy to take any
questions I think.
All right.
Thank you for
the presentations.
Special shout out to Cody Soto
me and everybody on
the franchise compliance
agreement the volunteers.
You've got some fans out there
and all the work to do that.
So with that please proceed
with public comment.
Thank you.
Council PRESIDENT.
This item received one comment
in favor and one comment in
opposition via our e comment
form which had been distributed
to the Council.
We will begin with in-person
comment allegedly Audra please
come forward You'll have one
minute to speak or serve.
Feels like we're as de genies
really And it's just
interesting to have them here
and talking about like how much
is it really going to cost and
it's like 4 to 7 billion and
then it's like be honest and
it's like okay, 6 to 8.
So interesting how we just let
this go on and as long as we
make sure they're compliant
with these agreements But no
wonder why the cost is high for
undergrounding because they
make profit off of this
infrastructure.
And so I'm wondering if you're
conditional renewal can be like
any kind of profit you make you
give it to us or half of it so
that the people can start
getting their money back.
It's like I don't understand
why we just kind of bend over
and allow them to do these
things.
It's like you know it's
happening.
You know why their cost is high
and why they're profiting.
But yeah, we just continue to
let it happen.
How about you guys take some of
that back?
I mean you're the ones with
the agreements that should get
off the top.
>> Thank you, Blair Beckman And
while Blair comes to
the microphone, could we have
Anthony Ralphs or Seldon?
Yeah and Bob because these Can
you please come to the front
row?
Hi, we're Beekman.
Thanks for the report.
Thanks for the words on working
on undergrounding issues that
needs to be better specified.
I was trying to specify
previously that if we're going
to do undergrounding things
there is little neighborhoods
that have undergrounding you
know, funding sources and we
can consider that as a
municipality process.
I want to make that more clear.
Thank you for the ideas of
oversight.
Um yeah.
Basically what I was saying was
that we don't have to fully
rely on municipality.
We can rely on San Diego
community energy itself and
nothing in this capacity Those
are options.
Thank you for the oversight
process that you've offered
overall to do The big items on
public projects is good also to
offer you know what are
the little administrative
signatures Where's a little
space for that that can be
available to the public as
well?
I think that can be helpful and
important.
Thank you.
>> Anthony Ralphs followed by
Laurie Saldana City Council.
>> Thank you for
the presentation by the Audit
group.
I took a couple of notes on
the things that I heard.
I heard number one that they
didn't finished undergrounding
on time, that they didn't have
standardized timelines and that
the construction baseline for
cost and schedule are rather
that they didn't schedule
pre-construction meetings.
These are just the ways in
which you need $1 billion
profit in company every year
has been out of compliance just
some of the ways in which
they've been out of compliance
that I heard that I got to take
notes on which it was hard to
do because the representatives
from sd g are so loud and
they're talking right now when
I'm trying to give
the presentation and one of
them is eating your popcorn so
incredibly loudly that it's
really difficult for me and
it's really difficult for
the public to have trust in me
when they're talking in
the middle of someone giving a
presentation on how they're out
of compliance and eating so
loud that I can't even write
down the notes as to all
the ways in which they're out
of compliance yet they're
making $1 billion a year and
they're asking for their
franchise board renewal.
>> Thank you does conclude your
time.
Lori Saldana followed by Vikas
Whiskey Thank you.
So ultimately I think we need
to say is this meeting
the needs of utility rate
payers And there are many
things here that if you're
committed to improve customer
service they were delays.
We have a domino effect of
missed deadlines and other
things that delay the outcomes
.
So what are the consequences
for this?
That's my question When if you
do a customer service survey
and you find out that they're
not meeting the needs of your
customers, what are
the consequences?
What do you change?
And I think that's been missing
from these reports for the last
few cycles Are the meeting
formats available for people to
participate are accessible to
the public The ones that I
happen to have in the middle of
the day when most people are
not able to participate I think
that's problematic.
So in general talking about
undergrounding my family has
had the same house for 60 years
we've been paying into
undergrounding is delay, delay,
delay.
So what are the consequences
for delaying basic customer
service?
You know, there appeared to be
nothing but because it's been
followed by promises I'm not
deeply informed on this issue
and I'm mostly sympathetic to
ratepayers But it's my
understanding from city and
union representatives that they
are operating on their own land
or land that they have leased
or from their own funds over
many years Now that doesn't
mean that the city shouldn't
take a role in ensuring that
citizens are treated fairly.
You should but I find it
inexplicable that here you are
investigating and reporting and
auditing what sd, g and e does
as a private business on mostly
their own land.
While you have refused to do
any investigation or auditing
of a private business or
operating on our public
parkland at the Torrey Pines
Glider port, can any of you
explain that inconsistency?
>> Thank you.
That does conclude your time.
Says I thank you so much both
to the auditors and
the Franchise Compliance Review
Committee for spending the time
to evaluate our work Under
the franchise agreements we
knowledge of the independent
auditor for the second year or
the second time found no
significant findings or
deficiencies relating to
performance on the franchise
and related agreements.
This reflects our commitment to
meetings and to meeting
the several hundred
requirements under each of
these ancillary franchise
agreements.
Of course we know we always
have to improve.
We'll continue to work on our
processes and we take that
responsibility seriously.
We'd also like to recognize
the Franchise Compliance Review
Committee for the time and care
they dedicated to this process
After their extensive review
including presentations from
subject matter experts
including the cpa and other
stakeholders in the community.
Your evaluation of our
performance and your
consideration of all the public
input.
Importantly, the committee
found that we demonstrated
overall compliance with
the electric and gas franchise
agreements as well as an mou.
Thank you very much.
All of you.
Thank you.
That concludes in-person public
comment.
We will now go to virtual
public comment.
I've started the five minute
timer in council chambers and
we will turn to the virtual
queue in which there are
currently three participants
requesting to speak.
We'll begin with John Stott.
Please begin.
>> Wow.
Did they get it a a p a c, a d
or an f?
Can't tell you No.
For $1 billion company you'd
expect an a-plus.
Second thing that's missing
here is how much did the city
or residents of the city of San
Diego have to pay in litigation
with f, c, g and e?
How much damages did they do on
the undergrounding You know, in
the valuation that we had
before the undergrounding Seems
like we have to pay three times
for the same undergrounding.
And for the lawyers there
amongst you the law fixtures
should apply.
This is not like San Francisco
in any way.
San Francisco is a takeover.
Ours would be an end of a
franchise or at least that we
get the law for next year.
>> Thank you.
Thank you.
All right.
Our next speaker is John Lear.
Please begin.
>> Good afternoon.
This has been a long one.
I just really wish I could get
a contract where when I screw
up with a major installation
like a nuclear power plant I
get to build the customers for
it.
I don't even begin to
understand this cost plus
billing that we live under.
I will tell you this Six months
ago I had solar installed on
the on the unit that I live in.
Unfortunately I've not been
able to take advantage of it
until the last two months.
But I will say this I generate
twice as about twice the amount
of power that I need in this
household on that solar.
So the rest of it goes back to
my neighbors and the people
around me.
Unfortunately I'm not able to
take advantage of the benefit
of the reduced billing because
for 3 or 4 months as the genie
could get people out to inspect
and approve and turn it on
which is just outrageous.
Anyway, get solar, get away
from the grid and get rid as
the genie.
>> Thank you.
Thank you.
Our next speaker is caller with
the last four digits 8700.
Please begin.
>> Thank you, Joy.
It's turn.
I don't support the renewal of
the fda and the franchise
agreement.
My reasons are mostly in
the last paragraph of
the PowerPoint entitled
Conclusion and I quote
Conditional renewal supports
rate payers in the city's
objectives.
At the same time, complaints
alone doesn't solve concerns
about affordability rates or
long term value.
Ultimately the Council must
weigh both technical
performance in broader public
benefit in deciding whether to
renew Dear Council.
Dear Mayor do not renew It does
not support repairs.
It does not support the city
objectives.
We all know that.
So let's be bold.
Let's have the courage to say
no.
Thank you.
That concludes your time This
morning.
Thank you.
That concludes public testimony
on item 201.
>> All right.
Thank you, Deputy Clerk.
With that this is an
information item and no motions
required.
I'll turn it over to council
members and jump in if nobody
else wants to.
So I will jump in.
Again, thank you to the members
of the franchise compliance
agreement.
I mean it's committee excuse
me.
It's an interesting animal that
we've created and we appreciate
your two year stint.
You know, if I can make a pitch
for you to come back and do
another two years.
i would be remiss if I did not
do that.
I want to speak to some of
the things that were raised by
the public.
We have new faces doing utility
undergrounding and our
transportation department and
they've done some serious
changes to that that when we do
the next two year review I
don't think we're going to see
those same problems because
they've gotten much more
aggressive not only with Genie
but also with at&t and
Spectrum,
the telecommunications that
also have aboveground lines.
So I'm it didn't surprise me
that there were some instances
where there were problems going
forward But new crew internally
the city is doing a fantastic
job.
So I don't think we'll see it
in the next audit We go
forward.
And to MR. Kozinski or Bob
because I always pronounce your
name wrong I did reach out to
the city auditor to actually
look into the latter part.
You think I don't do anything?
And the city auditor reported
that they have heard these
allegations multiple times and
quote Our investigations
determined that the allegations
of fraud, waste and abuse were
unsubstantiated and that
the qualification requirements
for him claiming that the clerk
report were reasonable.
That comes from our independent
city auditor.
Take that for what it's worth.
But again thank you to
the auditors for the good work
that you do under the franchise
agreement.
Thank you again for the good
work that you do.
And then again the volunteers
who stepped up for
the committee very much
appreciate it.
With that we will go to council
member Eli Rivera.
>> All right.
Thank you.
Council PRESIDENT I just wanna
say thank you.
It's a ton of time and effort
that goes into this volunteer
work that you do and it is
important and is one of
the things that distinguishes
the way that we've approached
our our relationship ship with
Jeannie um and with this
franchise agreement in
comparison to what had been
done in the past.
I think that that positions us
better for the future and I'm
very grateful for the work that
you do to help us do that.
>> Thank you.
Council PRESIDENT.
All right.
Thank you.
Council Yellow Rivera Not
seeing anybody else in
the lights.
I will close this item up And
again thank you for the good
work and your patience on a
long afternoon.
Okay.
And with that deputy clerk
please introduce item 203 Thank
you, Council PRESIDENT Item 2
or 3 approval of a Fifth
Amendment to the agreement with
Path of San Diego for
the Coordinated Street Outreach
Program.
>> All right.
Thank you for that.
This is a Fifth Amendment to an
agreement.
It's a little bit of a holdover
Would you guys be okay with
waiving the presentation given
that this is the Fifth
Amendment?
All right, So settle yourselves
in and Deputy clerk proceed
with public comment on item 203
.
Thank you.
Council PRESIDENT We will begin
with an in-person comment
allegedly Order a please come
forward.
You'll have one minute to speak
And again you guys want to get
out of here.
But again the presentations
aren't for you guys.
It's also for the people.
All right.
So this is interesting because
you know, homelessness is
running rampant though It's
good for business when it is
it's fantastic.
There's so much money to be
made off of these people And
I'm wondering how good are they
doing if just right outside
the doors here there's homeless
people sleeping every night.
So I mean is that money well
spent And when there is no, you
know, path to another shelter
or you know, some kind of home
for like a hamster wheel and we
just keep going around.
It's like let's give more money
and maybe that will help fix
it.
No, we don't have anywhere for
them to go But we have these
people out there just telling
people, you know, that there's
nowhere for them to go but then
we're going to arrest them or
take their stuff, you know,
because they're out there.
So it seems like it's working
out.
Maybe you guys could get some
more money and throw it at it.
>> Thank you.
That concludes your time.
Our next speaker is Blair
Beekman followed by Anthony
Ralphs.
Hi, we're Beekman.
I'm filling improving today I
guess my my knowledge and depth
of community issues is pretty
feeble but gosh darn it this is
an item that I think really
needs a public presentation.
I'm the work that does for our
unhoused has been incredible
especially in the past few
years.
They've proven how much they
can house people and we don't
just talk about shelters we can
actually be talking about
housing issues.
I really ask the council to if
they can you know, be asking
questions after public
presentation and that they can
still make their presentation
that would be great too.
It's really important to be
hearing this item and I'm
really surprised we're avoiding
it out of efficiency and to get
home early.
This is an important step.
I hope we make this step more
open and clear in our public
future.
>> Thank you.
Anthony Ralphs Good afternoon
City Council Excuse me I
support the approval of
the Fifth Amendment to
the agreement with the path San
Diego Program for
the Coordinated Street Outreach
Program.
At a time when we've seen so
many of our homeless programs
and outreach programs cut
particularly the Alpha project
particularly I believe it was I
forget the good the good center
I'm blanking on the full name
of it.
But anyway we've had so many
homeless programs cut and this
is a matter of public safety
and I know how quick all are to
defend public safety.
So I would expect that we could
have that same approach with
our homeless, that same
compassion and empathy and that
these programs can pan out and
help the people that they are
intended to serve.
Thank you.
That concludes in-person public
comment.
I've started the five minute
timer and council chambers.
We will now turn to the virtual
queue in which there are
currently three participants
requesting to speak.
We will begin with color with
the last four digits 8700
Please begin and thank you Joy
Senator Yes I support this item
passed.
It is absolutely fabulous.
I don't have personal
experience with them but I had
a wonderful experience with
the homeless couple years ago
when I moved here and I
followed their experience with
past and how they helped them
and it was very beautiful.
The only concern I have for
Path it seems like a few years
ago they were having trouble
with really paying their people
enough to work and perhaps they
were having trouble filling
positions that could have been
corrected And I MAY be way off
base on that but that just
popped up when I thought about
what I was going to say.
So love path just support them
wherever we can and love you
Path for what you do for
the homeless and that affects
all of San Diego Love to all
Thank you.
Next is Natalie Roski.
Please begin.
>> Hi Natalie.
Rush here District seven.
So I've been doing some
research and I'm really getting
good at my research I think so
I'm kind of confused on what
I'm researching and what this
path San Diego Fifth Amendment
means because it's telling me
that the resolution before it
describes this routine one year
extension flat funding at 13.6
million and change.
But there's an underlining
amendment does something that
the resolution never mentions
It adds a new clause
acknowledge is that h m c.
S and c I e the data systems
used to track and house
residents are some surveillance
technology under the trust
ordinance.
So moving forward and improving
are these systems being used
currently?
Is there understanding
the grace period and is this
being acknowledged or is this
was known about is it
the question?
Thank you.
That does conclude your time.
Next speaker is John Leah.
Please begin.
Good afternoon.
Council members.
It's been a long one but I did
want to make time to update you
that I actually that
the individual that came out
front of city Council in my rv
for a period of time I'm not
sure where ultimately that
situation is resolved but I
will tell you that we've run
into these cases all the time.
I love that they're an amazing
provider.
We have had nothing but a high
regard for much of their
service.
So this is not necessarily
related to path but we do not
have a mechanism for people who
are struggling and falling
through the cracks to raise
their hand and go Hey, what's
going on?
And I don't think that we are
capturing the number of people
that are returning to our
system effectively because
after two years if you come
back into the system are hmas
recognize here is a brand new
person anyway we need to be
listening to our customers.
We're still not and I would
hope that we could take that
seriously.
Thank you.
That does conclude public
comment on item 203.
All right.
Thank you, Deputy Clerk.
This is an item for discussion
and we will need a motion.
So we'll turn over first to
Council member Whipper Thank
you Council PRESIDENT I will
make the motion to approve
the staff recommendation.
This presentation is online.
Both the PowerPoint and
the staff report are on line
for everybody to access and
they've been online for
everybody to access for several
days now.
This does not add more money to
the contract.
It extends the term of
the contract.
These response teams that I
have has out there assess
people who are experiencing
homelessness and have helped
hundreds of people not just get
into emergency shelters but
also into housing both
temporary and permanent
housing.
And that's very important
because I am deeply concerned
about the unavailability of
emergency shelter.
We need more shelter beds to be
available to people.
But the good news is that path
is also directing people to
housing And as long as we're
getting people off the streets
and directly into housing,
that's a good thing.
One of the most important
things we could be doing and I
will approve move the staff
recommendation.
All right.
Thank you, sir.
So we have a motion by council
member Whipper and we'll go
next to Council PRESIDENT Pro
Tem Lee.
Thank you Council PRESIDENT And
thank you to path for their
continued work as well.
I'll second this motion.
>> All right so we have a
motion by Councilmember Whipper
and a second by Council
PRESIDENT Pro Tem Lee to move
the staff recommendation.
I see Council member John
Wolpert sup Thank you very much
and thank you for all the work
that path does as well.
I appreciate it.
I know that does increase
the amount of the contract but
it is the Fifth Amendment.
So are we thinking about doing
another rfp at some point or a
new scope of services or what's
the plan?
We released the rfp in APRIL of
this year so we intend to
fulfill the awardees of the rfp
in this next fiscal year and
that will then supersede this
contract.
Okay.
All right.
Thank you very much.
And Sara, could you introduce
yourself for the record since
you did a response?
Sorry.
Third Dorman, director of
Homelessness Strategies and
Solutions Deanna would be very
mad at me if I didn't get that
done All right, I I don't see
anybody else in the light.
I'll just add my Thank you for
managing that And to the folks
at path we have a motion by
Councilmember Lipper and a
second by Council PRESIDENT Pro
Tem Lee to move the staff
recommendation please call
the roll Deputy Clerk I have
set up the voting system.
Please cast your vote.
The item passes unanimously
with District two and District
eight absent.
>> All right.
And for meeting management
the reason we did that was to
make sure that we have a quorum
when it comes to not agenda
public comment at the end.
So for those that might
participate remotely stay
tuned.
We MAY or MAY not have a quorum
to have remote not a agenda
public comment We will
definitely do it for in-person
non agenda Public comment
meeting Management All right
Deputy Clerk please introduce
item 202 Thank you Council
PRESIDENT Item 2o2
Establishment of a cannabis
Delivery Services business
permit and enhanced commercial
cannabis enforcement mechanisms
.
All right.
I believe this is coming from
district seven.
So Councilmember Camp here do
you want to have some opening
remarks?
Thank you.
Counsel turn it over to your
staff.
Yes.
Council PRESIDENT, thank you
very much for that.
And before we begin with
the staff presentation, I'd
like to take a moment to
recognize the amount of work
that's gone in today's action
over the past two years not
only from my office but from
the mayor's office and cannabis
workers and businesses, members
of the public who've engaged
with us throughout this
process.
Cannabis delivery is a complex
policy issue and the item we
are putting forward for
consideration today is one that
puts accountability, safety and
workers first.
So with that I'll turn over to
Summer Patten, Deputy director
of policy for my office for
the presentation.
>> Thank you.
i need ten minutes for
the presentation when you're
ready.
>> Good afternoon.
Council PRESIDENT Lacob and
council members I'm presenting
here today on behalf of
Councilmember Campo
the establishment of a cannabis
delivery services business
permit and enhanced commercial
cannabis enforcement mechanisms
.
>> The proposed actions today
are to establish a cannabis
delivery business permit
category for commercial
cannabis operators entering
the city of San Diego to
conduct cannabis delivery.
I'm sorry, can you hold on?
We're not displaying.
There we go.
Okay.
Very nice.
My apologies for
the interruption.
Go ahead.
Good.
So that's the first action.
The second is to establish a
private right of action to
allow eligible entities to
pursue step one enforcement
against operators that violate
local commercial cannabis
regulations.
And third is to revise
penalties for noncompliance to
a maximum of $20,000 per day
for court imposed civil
penalties and $20,000 per
violation for administratively
imposed civil penalties not to
exceed $500,000 per parcel or
business and up to 10,000 per
violation for administrative
abatement penalties not to
exceed 500,000 per parcel or
structure.
And before we discuss
the proposed changes, it's
helpful to review the licensing
system around commercial
cannabis.
Cannabis in California is
regulated on a dual track
system meaning that cannabis is
regulated both by the state and
by a businesses, city or county
.
And at the state level there
are two types of retail
licenses.
There is a non storefront
retailer or delivery only
business which is what we're
talking about today.
And there are storefront
retailers or brick and mortar
businesses.
And while state law allows
cannabis delivery on public
roads, state law also
explicitly states that local
jurisdictions have authority to
regulate cannabis businesses
including through business
license requirements.
Cities and counties can
prohibit cannabis of all
business types some or
implement their own regulations
.
And as shown on the map, this
creates a patchwork of local
regulations throughout
the state.
>> So if a customer in San
Diego is ordering cannabis for
delivery, it can either come
from a permitted retailer in
the city a state licensed
business entering the city to
deliver or a business operating
outside of legal requirements.
Currently the city only permits
storefront or brick and mortar
cannabis retailers.
These are the ones that are
limited to four per council
district and they're required
to obtain a conditional use
permit.
They are allowed to deliver
direct to consumer as part of
that conditional use permit.
The city allows state licensed
delivery from outside of
the city If that business
registers for a business tax
certificate with
the Treasurer's office and
remits monthly business taxes.
The city's land use code does
not allow delivery only
non-food storefront retail
establishments within city
limits.
And this ordinance does not
change that.
And it does not propose any new
land uses.
Cannabis delivery is extremely
difficult to regulate because
the operations are mobile.
And cities can only regulate
what occurs within their
jurisdiction.
And cannabis businesses can
easily avoid those regulations.
And on the screen is an example
of a listing on weed maps for a
business advertising in North
Park.
That's based in Alameda County
and I'm looking at the license
on the Department of Cannabis
Control website.
It's expired but they currently
advertise 30 to 60 minute
deliveries in San Diego.
So here we can see
the difference between what's
advertised to consumers and
where the current the city
currently permits cannabis
retail.
The image on the left are
delivery only offerings listed
on weed maps in San Diego.
And some of these businesses
are advertising is based in San
Diego and are licensed to
the state.
Some are not licensed through
the state or operate on expired
permits or are not following
all state and local
requirements.
State licensing a strict and
requires those businesses to
return to a licensed premise
after a delivery route.
To use license facilities to
restock their product.
To dispatch deliveries only
after orders are received and
logged.
And it also requires delivery
of cannabis goods to be
performed by a driver employed
by that retailer.
>> For the retailers to
maintain an accurate list of
their delivery employees to
confirm ages and identities of
customers.
And for a delivery drivers to
carry copies of the retailers
license id and an employee
badge.
Which are just a few examples
of the numerous other state
requirements as part of
commercial cannabis delivery.
So with that the goals for this
ordinance are to create a
centralized regulatory check
point for cannabis delivery
services entering the city of
San Diego.
It's to increase the cost of
noncompliance through raise
penalties.
And third, it's to allow
private civil action where
the city currently lacks staff
capacity.
Next slide.
So with stronger civil
enforcement the goal is to
incentivize registration for a
cannabis delivery services
business permit and encourage
local compliance.
This requirement would be in
addition to the business tax
certificate and cannabis
business tax currently required
and administered through
the City Treasurer's office.
So all three of those processes
will be administered by
the city Treasurer's office.
Cannabis delivery businesses
entering into the city of San
Diego would be required to
obtain the permit.
This does not include current
cup holders as delivery
services are already permitted
and regulated through their
conditional use permit and they
are subject to an annual
cannabis fee at around $15,000
a year.
The application requirements
are modeled off of the City of
Ventura which has a similar
license and would require a
copy of the business's state
retail license a copy of their
business tax certificate
information of all owners and
employees.
Proof that employees are direct
employees of the delivery
service as required by state
law.
And the fee amount would be
determined in a future action
to determine the exact costs
recoverable amounts related to
the registration or permit
expense.
So the proposed enforcement
changes are to increase civil
penalties in three categories
in the code regulating
commercial cannabis operations.
The first is to increase court
awarded civil penalties for
commercial cannabis violations
up to $20,000 per day for
cannabis business.
The second is to increase
administrative civil penalties
for violations up to $20,000
per day not to exceed 500,000
per business.
And third, this ordinance
defines cannabis violations as
a public nuisance which would
then allow the city to abate
violations if there's capacity.
The penalty amounts are aligned
with recent updates to land
development code which was
updated at $10,000 provi lation
not to exceed 500,000 per
parcel.
But the significant enforcement
change is to introduce a
private right of action for
cannabis related code
violations.
Private right of action are
more commonly used in labor law
but was implemented to allow
civil enforcement against
cannabis violations most
recently through ab 1171 which
was implemented in 2024.
The ordinance proposes
establishing the private right
of action to allow legal
cannabis businesses or labor
organizations representing
cannabis workers to file civil
actions to enforce compliance.
This means that a licensed
cannabis business could sue a
business if they can establish
that a violation of this
ordinance occurred within city
limits and any penalties
recovered would be distributed
between the city for
enforcement and the entity
bringing the civil action 65%
to 35%.
And this distribution was
modeled after the private
Attorney General's act or paga
which was updated in 2020 for.
So with that the recommended
action today is to approve
amendments to Chapter four
Article two Division 15 of
the San Diego Municipal Code to
establish a cannabis delivery
permit business permit category
for commercial cannabis
operators entering the city of
San Diego to conduct delivery
to create a private right of
action allowing eligible
entities including state
certified cannabis retailers
and labor unions representing
cannabis workers to pursue
civil enforcement against
operators that violate local
commercial cannabis regulations
and to revise penalties for
noncompliance to a maximum of
$20,000 per day for court
imposed civil penalties.
20,000 per violation for
administratively imposed
penalties and up to $10,000 per
violation for administrative
abatement penalties.
And that concludes my
presentation.
Thank you.
All right.
Thank you very much for
the work and the presentation.
Now I'll turn it over to
the office of the rba for
comment.
>> Thank you.
Council PRESIDENT Sergio
Leclaire from the iab his
office as presented by staff
The this proposal would make
four main changes to
the municipal code.
First they would create a new
permit category specifically
for cannabis businesses that
are based outside the city but
deliver cannabis products to
customers within city limits.
Consistent with the status quo.
This proposal will not permit
delivery only businesses based
within the city.
Second, it would establish a
private right of action
allowing compliant cannabis
businesses and representative
labor organizations to pursue
civil action against operators
without a civil city permit
without a valid city permit.
Civil penalties recoverable in
this manner would be shared
with the city.
Third, it will classify
cannabis businesses without a
city permit as a public
nuisance.
And lastly it would separate.
It would update fines for those
that fail to comply with
the city's cannabis permitting
requirements.
Based on our conversations with
relevant departments.
The fiscal impact of this
proposal is uncertain but MAY
not be substantial.
There are three noteworthy
sources of potential revenue
outlined in the proposal.
First is permitting fees.
Second is city imposed fines.
And then third is the city's
share of civil penalties
recovered through private right
of action which would be one
time in nature.
Regarding permitting fees,
the number of businesses likely
to seek a new delivery permit
is limited currently to conduct
business including deliveries
within the city.
Cannabis businesses outside
city limits must obtain a
business tax certificate and
remit cannabis business tax.
The city Treasurer's office
indicated that there are five
of these compliant businesses.
Staff noted that if a new
permit is established these
five businesses are expected to
obtain the new permit in
addition to the business tax to
cannabis delivery services that
do not currently have business
.
Business tax ratification,
however, would likely not
comply with additional
permitting requirement given
the small number of affected
businesses Any permit fee
revenue as well as cannabis
business tax revenue would
likely be limited unless
private rights of action compel
enforcement.
Regarding fines we found that
the city currently does not
receive currently receives
minimal city issued penalty
revenue from delivery operators
that do not comply with
the city's current regulations.
Therefore, even with
adjustments to the fines city
issued penalty revenue would
likely remain minimal.
The private Right of action
provision offers an additional
enforcement tool for private
entities.
Though state law allows
licensed cannabis businesses
including those permitted by by
the city to pursue civil action
against operators without a
state license, cannabis
license.
The city's city attorney's
office has not found any
reported cases of such
lawsuits.
So it's unclear whether
eligible parties would choose
to pursue civil action under
this proposal.
As noted by the presentation,
however, the state's provision
has a higher burden of proof
and a more limited financial
incentive Compared to this
proposal.
Additionally, this proposal
would also allow compliant city
businesses to pursue civil
action against operators
without a city permit work
orders regardless of whether
they have a state issued
cannabis license or not or
the intent of this proposal is
to regulate state licensed
cannabis businesses not
complying with city regulations
or unregulated operators.
We note that the greater
compliance challenge lies
within with cannabis delivery
businesses that operate
illicitly without state issued
licenses or illicit operators
since again they're unlikely to
comply with the new additional
local permit requirement.
Additionally, since this
proposal doesn't increase
the city's enforcement levels,
the permit and fines provision
of this proposal MAY not
significantly improve
compliance among illicit or
unregulated operators and
materially increase the city's
revenues.
Unless a private right of
action compels enforcement
During our discussions with
the Development Services
Department and the Treasurer
they raise concerns regarding
implementation.
These operational concerns
include uncertainty over
whether which new which
department would enforce
the new perimeter permit or
what enforcement of the new
permit would look like from
the city's perspective.
Questions about the city's
authority to find businesses
located outside city boundaries
and whether additional
resources would be needed to
administer and enforce
the program.
We recommend that council
inquire further with
departments including the city
Attorney's office, city
treasurers, dsd and police
the police department regarding
the practical challenges of
implementing and enforcing
these provisions and whether
they are there are any
outstanding issues.
This concludes my comments and
are available for any
questions.
Then comes Council PRESIDENT.
All right, Thank you for your
always appreciate the input at
the office.
With that Deputy clerk please
proceed with public comment.
>> This item received five
comments in Opposition via our
economic forum which has been
distributed to the Council.
We'll begin with in-person
comment.
DeAndre Brooks please come
forward.
You'll have one minute to speak
while DeAndre walks to
the microphone I would ask Matt
Stransky.
Mark o'Brien as our man king
And Terry best to please come
to the front row Council
members My name is DeAndre
Brooks and I'm here tonight as
a concerned citizen with strong
opposition to this ordinance
for several reasons.
In a sense it creates a
monopoly on the delivery
services and that's also
counterproductive to
the county's cannabis equity
program that's been spearheaded
.
So for individuals who have
been harmed by the war on drugs
and then living out over
criminalized communities an
opportunity to get into
the cannabis industry so we end
up voting yes to things like
that.
It is super counterproductive
to what we're trying to do as a
county.
And if you recall this same
issue came before this city
council and you guys kind of
shut it down basically sort of
county had to come in to give
that demographic an opportunity
to thrive in this industry.
So again, I'm a strong
opposition to this and I urge
you to consider everything I
just said Thank you, MR. Ski.
I don't see you.
Okay.
We'll move on to Marco Briones
.
Thank you, council members.
But again we stand in
solidarity with the brothers
and sisters of 135 you if cw
and ask you to support this
ordinance today at a time
cannabis delivery businesses
are avoiding paying the city's
cannabis retail tax and harming
our local permitted cannabis
retailers like the ones I've
known since childhood that are
here today.
So our local cannabis workers
are really feeling these
effects of the unregulated
activity, seeing their hours of
layoffs and wages reduced
workers and taxpayers are
better.
>> We support this and we ask
you to do the same.
Thank you.
Our next speaker is Armand
King.
All right.
Do you have several speakers
reading time to you?
When I call your name please
raise your hand to confirm
you're here.
Justin Lewis going on.
Okay.
Anthony Hawkins.
Okay, Louis The waste business
gone.
Okay.
And tis one Let us Okay.
>> So that you'll have three
minutes.
Okay.
Sounds good.
Thank you.
So what was pointed out was
Alameda, right?
Alameda problem There are there
is a problem with dispensary
deliveries happening from
outside of San Diego County.
Very much so that should be
regulated.
What's not mentioned is our
neighbors La mesa, National
City, Chula Vista.
Let me grow now They cannot
deliver across the street
without going through this and
I'm not here to fight for them.
I doubt has been reach out to
these cities to let them know
that this is about to happen.
There has not been adequate
reach out to communities We
there hasn't been a time limit
right now The problem is and
what I'm here representing
those social equity applicants
I'm the program manager for
the County of San Diego Social
Equity Program.
The majority of our
participants are San Diego City
residents from your district,
your district or district in
your district the majority of
them.
Why are they in a county
program?
Because we all know I thought
we know we had it here and
the same entities that are
coming bringing that brought
this law because it didn't come
from your office, it came from
the same people, the same evil
people that stripped us from
having a social equity program
here are now back in this.
So what's behind the scenes
That private right to action
private right to action is
saying there now you all by
voting yes or giving them a
loaded gun to now attack
the very people that should be
in the city program right now
These people live in your city.
They live in Linda Vista.
They live in North Park.
They live in southeast San
Diego.
They live here.
And even if now they have to
locate because to have a
delivery service you have to
have a building somewhere to
deliver.
Forget outside.
Forget Oakland, forget L.A. San
Diego residents that you're
attacking here are people so
they have to have a break not a
brick and mortar but a building
where they store their their
stories that they live in San
Diego.
They pay rent in Central City.
They shop in San Diego City.
Where's the revenue coming back
to here?
So my only ask is is there a
way for us if we want to
register them because they're
going to be legal operators,
Can we set up a process to
where the city of San Diego
knows who they are but to add
an extra barrier to people who
have been buried and we stand
here marching on the ashes of a
program that we should have had
right Because certain people
are afraid to feel the wrath of
high paid lobbyists that are
pushing this forward.
>> I have represented
the people from your city.
Clean this up.
Yes, we need to regulate
outside people.
Yes, we do.
But this ain't it.
Let's do this right Because
once you sign this once you say
yes and this is put into place
you're giving You heard of a
Trojan horse, right?
It looks nice and shiny.
The way to deliver to your is
we're keeping out all these
outside folks But meanwhile
inside that Trojan horse is an
army ready to attack.
They can't wait to see all
these people out of business.
They couldn't stop the county
the same way they stopped
the city They couldn't And
we're about to have unlimited
delivery services.
Thank you for your time.
Thank you.
Next up Terry Bass.
Well, Terry walks to
the microphone.
I would like to ask Daniela
Nelson, Victoria Bush, James
Case, Nate Ferryman and
allegedly Otto to please come
to the front row please Again,
Terry.
Thank you.
I'm Terry Best, a voter in
District three.
This appears to be an
unnecessary law aimed at
the Social at the county social
equity program.
My suggestion would be to
please remove the private right
of action portion from
the proposal.
It is just wrong and shame on
you.
>> Shame on you too.
Please also modify the proposal
to only cover out of county
delivery services.
Please exclude all three within
San Diego County and San Diego
County itself from this law.
Each of our cities has a robust
cannabis permitting process.
It is not necessary to be
hostile to other cities
delivery operations.
Please do this so that at
the very least the one licensed
type where we struggling
entrepreneur could hope to get
into the industry is not
blocked by special interests.
Thank you that those who do not
want the competition
the current city operators
behind this proposal have
enjoyed additional
consideration.
Thank you.
No other industry enjoys.
Now the city is considering
whether that does conclude your
time on the board.
What would you do if you took
special interest along with a
rabbit for a profit and any
other.
>> Thank you.
Next speaker is Don Ellen
Nelson.
Hello, everybody.
Good evening.
My name is Donald Nelson.
I am a proud resident of San
Diego and live out to just
outside of City Heights.
I am actually here in support
of this measure.
Having worked on the license
cannabis delivery in San Diego.
I have firsthand seen
the impact of an illegal market
Continuing to have legitimate
business licenses are
legitimate businesses,
employees and consumers while
license operators invest
significant resources into
complying with state and local
regulations regulations.
Many unlicensed operators
continue to conduct business
without oversight
accountability and
consequences.
Licensed cannabis Licensed
cannabis is required to test
the products, verify customer
rage, maintain strict inventory
controls and pay taxes to
support our local community.
Illegal operators do not do
none of those things.
They undermine public safety,
avoid paying taxes and create
unfair competition for
businesses that are trying to
do things right.
I myself has been a part of
the cannabis industry for five
years and over the time I've
watched them do that does
conclude your time.
>> Thank you.
Thank you.
Next speaker is Victoria Bush.
Victoria.
Here.
Okay.
James Case Thank you Counsel My
time.
Thank you, Council members.
My name is James Case.
I'm a resident of District two
and I've lived and worked in
San Diego, the city of San
Diego for over 30 years since
SEPTEMBER of 2021.
I've been a proud member of
the United Food and Commercial
Workers Union as a delivery
driver for legal registered
cannabis dispensaries San
Diego.
I'm not evil.
I'm a 63 year old grandpa.
I do my job.
I love my job And that's four
and a half years I've been
doing this.
I've delivered I've driven over
100,000 miles on the streets of
San Diego delivering cannabis.
And one thing I've learned to
be here today is it's about
the money The city needs
the money.
Unlicensed operators have no
incentive to pay business
taxes.
Those business taxes not only
fund the works of the city,
those operators also provide
good jobs like my union job
where the people who have those
jobs spend that money in
the county in the city.
So those dollars not only thank
that does the county help
the community?
Next speaker is Nate Furman.
Don't see Nate here.
I will go to allegedly order
next please smile.
Just coming to the microphone
Todd Walters grant Tom, Robert
Wood, Larry Beekman and Eduardo
Battista Please come to talk
about a war on drugs.
Did you guys ever think you'd
be micromanaging drug turf
competition and stuff like
that?
How cool is that?
Right?
It used to be illegal.
Now it's not.
I mean one day it could be
again.
Who knows?
It's like on the edge of your
seat which is so interesting
because people think it's still
profitable.
The government has taken like
$60 billion industry and it's
like governance.
>> We heard your daddy I mean
talk about being able to make
all the money and not have to
pay taxes.
Then you come here like listen,
we need you to regulate it and
I do not want these people
coming into my territory.
So you guys are going to need
to regulate that know But this
is what is so interesting New
permits you know what I mean?
It's like I'm sorry.
I just I don't understand why
people think it's cool for you
to come to the government and
be like what's going to take
billions of dollars out of my
pocket like I did?
>> But good for you guys,
right?
And it's supposed to go to city
services.
>> Looks like it's working.
Thank you.
That does conclude your time.
Our next speaker is Todd
Walters.
Good evening City council and
city staff and thank you very
much for your time.
It's very valuable and I
respect it.
Most people aren't aware of it.
The cannabis legal cannabis
industry is in trouble.
It's not doing well.
The unpermitted cannabis
delivery services are taking
business away from those
licensed retailers who are
paying taxes.
The illicit cannabis market can
treat contributes to a shadow
economy where wage theft,
unsafe working conditions and
labor exploitation are more
likely to occur.
Workers in legal cannabis
industry should not have to
compete against businesses that
ignore regulations and avoid
paying their fair share.
Stronger licensing requirements
help ensure that cannabis
businesses operating in San
Diego follow the same rules.
Ensuring operators contribute
to the cannabis business tax
helps generate revenue for our
city essential services which
we know we need.
Supporting this ordinance means
protecting workers responsible
business and the integrity of
Senegal's regulated cannabis
industry.
In conclusion I just ask you to
support this ordinance and
support the workers.
Thank you.
Our next speaker is Grant Tom.
>> Good evening.
I'm Grant Tom Secretary
Treasurer Jacobi Look at 135 I
represent about 12,000 members
throughout the county
everywhere including retail,
cannabis, medical, kiser
everything I know the out of
town companies and listed
operators of unpermitted
cannabis businesses that are
currently operating or harming
or illegal local cannabis
industry and operators and
they're undercutting taxpayers
but not paying their fair share
of the cannabis retail tax just
hurts the workers who are
causing reduce hours and we've
had tons of layoffs.
It's really sad.
It's important to maintain
the integrity of your San
Diego's regulated your cannabis
industry.
It's also important to protect
the workers and the taxpayer.
This ordinance creates enhanced
enforcement to protect those
workers and their families
including other local high road
cannabis businesses.
Please support this ordinance.
Thank you guys very much.
Thank you.
Robert Wood.
While Robert walks to
the microphone, I will ask for
the folks as needed in time to
please raise my hand when
called Eduardo Camacho Eduardo
Livio Marquez No.
Okay.
Ada Castaneda okay, So Ada is
here so you'll have to answer.
>> Okay?
>> Doug Okay.
Thank you.
First of all, my name is Robert
Wood.
I am a citizen of San Diego
County.
I was born and raised in
the city of San Diego.
I did prison time for selling
marijuana.
Now I go throughout
the community, try to improve
it in various ways and I'm a
social equity cannabis
advocate.
Would that be I'm one of
the people he helped build
the cannabis industry in
the county of San Diego at one
point and one of the people who
went to prison behind it And
now I'm out.
I'm ready to do things legally.
I told five different greens
one the nba.
I understand barriers to entry,
barriers to entry be it dealt
with Businesses want to keep
people out of something they
come up with ridiculous like
this ridiculousness like this.
They come up with things where
they say Oh you're probably
right too soon so you can just
personally sue me into oblivion
yourself.
You don't need anybody else to
do it for you.
This is this is this is
incredible to me.
The people in the San Diego
Social Equity Cannabis program
are people from San Diego.
We all arrested in San Diego
for cannabis at some point
Social equity cannabis.
It's just that is social
equity.
Do you think that any of these
businesses that got together it
concocted this that one time
about such work I can't see one
facing one of these owners in
here that came down to
the social equity program and
took the time to talk to us and
try in equities you would think
that they would be embracing
this, trying to work at it and
saying you got to try to get
into this Cool.
Let us see what we can do to
help you guys If they take
tooth and nail the whole time,
it's time that the game stop is
time that this gets torn up,
that the barriers to entry stop
and social equity is treated
like we're just supposed to be
sociable and equitable.
>> Thank you.
Blair Beekman.
All right.
Thank you.
Where we going?
I have not known much about
this item.
It was a learning process for
myself.
I really like hearing public
comment on it about the social
equity lack that seems to be a
part of this.
We try to make up rules and
laws sometimes that we feel is
just gosh darn good, you know
and we're doing a good thing.
It has a logic to it is a good
logic but that logic doesn't
take into account what maybe is
going on underneath.
This is a group that seems to
have some sort of real thing
going on in wanting to nail
social equity with marijuana
purchases and how that process
can work.
I mean Oakland has always
created really good examples of
social equity.
Perhaps you can talk to them at
this time at this needs a bit
of more review and work it
sounds like Thank you.
>> Thank you Eduardo Batista
followed by Anthony Ralphs and
more so Daniel.
Good evening Council members My
name is Eduardo Batista and I
respectfully oppose this
cannabis delivery proposal.
I support legal cannabis
businesses paying taxes
following the rules and
operating responsibly.
But this proposal goes beyond
fair regulation.
It creates new barriers for
licensed delivery operators and
gives existing cannabis
retailers the ability to use
private lawsuits against
competitors.
So weaponizing it This is
dangerous for small businesses,
county operators and future
social equity businesses that
MAY not have the resources to
fight expensive litigation.
Even a threat of lawsuit can
discourage competition and
limit access.
You can also look California
Motor Transport Company where
trucking Unlimited and I think
that covers kind of that If
the concern is tax compliance,
create a simple registration
and tax process.
If concern is illegal operators
focus enforcement on unlicensed
activity but do not create a
system that allows established
businesses to weaponize
enforcement against licensed
competitors.
I urge the Council to reject
this proposal.
>> Thank you.
That does conclude your time.
Anthony Ralphs Yes I had
submitted want to speak in
favor but after hearing
the deliberation I think I'm
going to change to speak in
opposition.
>> The reason why I am changing
my position from going in favor
to in opposition is because I
do think that regulation has
good intentions.
I do want to see delivery
drivers have the ability to
have some type of guidelines by
the city as to what they can do
and what they can't do.
However, I was really concerned
about the amount of
the penalties that would be
imposed The $20,000 a day just
like none of us are made out of
gold and we all make mistakes
and $20,000 to be out of
compliance or to have made a
mistake with the regulations
just seems really excessive to
me.
And also I think that if there
is a confliction a conflict
between the socially equitable
cannabis program and this one I
think I would rather go with
the socially equitable
community program.
Thank you.
Lori Saldana you actually cut
off some of his time but let me
just start out by saying what
Terry Bell said.
MR. Campos shame on you and
your committee members.
You were putting a loaded gun
in the hands of people to go
after folks who have been
historically disadvantaged in
this industry.
When I served the legislature I
wrote bills to do the exact
opposite to try and prevent
this kind of cherry picking and
I'm going to stick around for a
non agenda comment so I can
speak a little bit more about
what if other industries took
this approach What if other
indices were given a gun and
said you can do private action
and go after these opponents?
Are these competitors It would
be mayhem.
Shame on you.
Shame on you MR. Foster.
You know how this community has
been hurt so I just don't
understand why you're picking
winners and losers.
I wait.
I do.
Who has money?
Who gives money to
the Democratic Party?
Who gives money to the party
and then passes it on to
candidates?
>> The people that you are
favoring on this Shame on you.
>> Thank you.
That does conclude your time.
That concludes in-person public
comment.
We have started the five minute
timer and council chambers will
now turn to the virtual queue
in which there are ten
participants requesting to
speak.
We'll begin with Terry and
Skelly.
Please begin.
>> Good afternoon San Diego
City Council Chair LaCava My
name is Terrance Fili and I
work with my planning group on
good public health and safety
policies and land use
decisions.
I support this policy.
I appreciate the city's effort
to know who is selling pot in
our city and where the pot is
coming from since it doesn't
seem to have a physical
location within the city, this
is a very good thing We should
be aware of actual actually
being successful collecting
cannabis business tax and
perhaps also remember that
the comment by a physician
trained in emergency medicine
pediatrics and family practice
and I quote It's ridiculous to
think that any city or county
will make it will make excess
funds in tax revenue from
the selling of addictive
products.
The money being brought in does
not cover the costs of
addiction of addiction
treatment let alone any any
other harm psychosis, cannabis
hyperemesis pediatric exposures
and injuries while intoxicated.
Thank you for hearing my
concern.
Thank you.
Our next speakers and Albania's
please begin.
>> Andrew Ibanez I cannot
unmute for you must press on
Hear me?
Yup Go ahead please.
>> Thank you.
Good evening.
Presenter and council members.
My name is Andrew Ibanez.
I lived in District four for 39
years and I'm a cannabis social
equity applicant.
I oppose the proposal.
I support maintaining expanded
access to cannabis delivery
services in the city of San
Diego.
Cannabis delivery provides a
safe, convenient and legal
option for adults, seniors,
people with disabilities,
veterans and patients and
residents who have difficulty
traveling to a dispensary or a
storefront.
Delivery services allows
consumers to receive product at
home rather than driving to a
retail location.
Licensed delivery operators are
regulated subject to testing
and tracking requirements and
contribute tax revenue to
the city.
Policy should encourage
consumers to the to use
the regulated market rather
than care or create barriers
that MAY unintentionally push
customers toward unlicensed
operators.
As the city considers new
regulations, I encourage you to
support a framework that
protects public safety while
preserving reasonable access to
legal cannabis delivery
services.
Regulation should be fair,
practical and designed to
promote compliance.
Thank you.
>> That does conclude your
time.
Madison please begin.
Hi.
Good evening.
Thank you for the chance to
speak.
I support this ordinance
because strong enforcement of
cannabis regulations is
essential to protecting young
people in our city.
We are not talking about
delivery of ice cream here.
When delivery of a drug like
cannabis is allowed it means
products are spreading
throughout our community that
contain extremely high levels
of thc and have been linked to
increased risks of psychosis
cannabis use disorder, cyclic
vomiting syndrome, impaired
driving and other serious
health concerns particularly
for adolescents.
That is why enforcement matters
.
Creating a local permit
requirement for cannabis
delivery businesses gives
the city a tool to identify
operators, monitor compliance
and take action When violation
occurs.
Strong penalties are also
important because regulations
without meaningful enforcement
are simply suggestions.
Every gap in enforcement
creates opportunities for
unlawful activity and increases
the risk that harmful cannabis
products will reach our youth.
>> Thank you.
Thank you.
Next is Becky Wrap.
Please begin.
My name is back.
You up and I'm very concerned.
The city is considering
expanding delivery regulations
before providing or proving
that existing regulations have
been effectively enforced.
For years residents have been
requesting a comprehensive
audit of San Diego's marijuana
program including the number of
businesses operating,
the amount of tax revenue being
collected and whether
businesses are complying with
local regulations.
This report repeatedly
references noncompliance but
does not include important
enforcement data to support
the need that this new permit
program is needed.
How many violations have been
identified?
How much unpaid tax has been
recovered?
And the delivery operators have
been investigating.
A report doesn't tell us that
before creating new permits and
expanding the city's marijuana
framework.
The city should first provide a
full accounting of the current
system.
If we don't know whether
existing businesses are
complying with the rules or
paying the taxes they owe.
>> How can we justify
expanding?
Thank you.
That is include your time.
>> Please note that the five
minute timer has concluded with
six speakers left in the queue.
No other speakers will be taken
.
Next up is Peggy Walker.
Please begin.
Oh, good evening, COUNCILMAN
Campo.
I represent parents and thank
you and support this.
Strict controls are needed
because bad players on both
the seller and consumer sides
ignore illegal delivery
requirements.
Delivery services Too often
cheat the city of taxes put
youth in jeopardy of harmful
underage use, fail to make I.D.
Checks and deliver quantities
not allowed by state
regulations.
A Bay Area delivery company was
recently exposed for leaking
their delivery databases
containing customer names, home
addresses, even medical data.
Consumers should be made aware
of these risks.
An official list posted online
of all future San Diego license
delivery services would be
helpful so that consumers can
know that their deliveries are
from permitted vendors.
Thank you.
>> Thank you.
Next up is Peggy Walker.
Please begin.
>> Hi.
That was me.
I just spoke.
Sorry.
I apologize.
Next up is Kathleen Leavitt.
Please begin.
>> Thank you.
Thank you.
To counsel Patrick Campo for
his good intentions a proactive
step that should be taken
before proposing any additional
programs like this would be to
do an analysis of
the businesses already
permitted.
Are they compliant?
Are they paying their taxes?
Many businesses already see
city codes and suggestions
rather than requirements.
They do not see meaningful
consequences to businesses
found to be out of compliance.
It is no surprise many
marijuana businesses have gone
out of business because
unpermitted marijuana
businesses always have and
always will take business from
permitted business.
This permanent undermines
the city's regulatory framework
and disadvantages compliant
businesses.
That being said, there is
nothing good about compliant or
permitted businesses any more
than unpermitted businesses.
The rent seeking revenues over
public safety is never going to
end well for the city.
>> That does conclude your
time.
Thank you.
Next up J.D. String Please
begin.
>> Good afternoon, San Diego
City Council.
Thank you to City Council
person Carpio for considering
this at his NOVEMBER adr
meeting.
I'm sorry Some of us maybe who
spoke didn't have an
opportunity to hear
the discussion then I think we
would have a better
understanding of what the goal
was behind this policy.
Some intent to level
the playing field for those who
actually have permits in
the city of San Diego to
deliver and those who do not
and are coming in and we don't
know who they are, where
they're from, what
the condition of the products
are And it looks like and
the example on the PowerPoint,
the one given it's not even
registered by the city, by
the state, by dcc.
So we need to really understand
who it is just driving around
our neighborhoods, dropping off
pot.
I must say, however, in doing a
search I found the city of
Oceanside tried to do the same
thing and get a registry of
deliveries and then when signed
out.
>> Thank you.
That does conclude your time.
Next is Cannabis Education
Project.
Please begin Cannabis Education
Project.
Please begin.
I see you're unmuted.
One more time Cannabis
Education Project.
Okay, we'll have to move on.
Next up Shelby Huffaker.
Please begin that evening.
My name is Shelby and I'm a
board member of the San Diego
chapter of Americans for Safe
Access, a national nonprofit
advancing Safe Access to
cannabis for therapeutic use
and research.
I urge you to reject this
proposed cannabis delivery
permit and enforcement
enforcement ordinance.
It is redundant with state law
and appearance designed to let
San Diego's existing cannabis
monopoly block competition from
the county social equity
program which is just weeks
away from an anticipated vote
on the code's needed to
implement it.
If you move forward please make
two changes.
First, eliminate the private
right of action which would let
anyone including monopoly
members and opponent opponents
of cannabis legalization sue
compliant operators and clog
our courts.
Second, please exempt operators
already licensed by the county
from this duplicative permitted
system.
Please reject this ordinance or
adopt these fixes.
>> Thank you.
Thank you.
>> Kelly Hayes.
Please begin.
>> Hi.
Good evening, Council members.
My name is Kelly Hayes.
i'm a resident of District two
and an attorney who specializes
in working with the cannabis
businesses.
I've been working with this
industry since 2014.
And I've seen a lot of issues
with this ordinance and I
strongly oppose it.
First requiring delivery
businesses to obtain a separate
San Diego permit is unworkable
in the city.
The city is going to have no
way to police and enforce this
requirement.
State regulations require
delivery vehicles to be in
unmarked and indistinguishable
from any other type of vehicle
.
The effect that this is going
to have on staff is going to be
burdensome and it's going to
accomplish absolutely nothing
nothing that you're trying to
achieve.
Additionally, the private right
to action is duplicative.
There's already state law that
allows for this type of private
action And what you're
proposing is going to create
meritless cases and clog our
court system.
>> So I strongly ask you to
oppose this.
Thank you.
That does conclude your time.
And that concludes the public
testimony on item 2o2.
All right.
Thank you, Deputy Clerk.
Thank you.
Everybody that spoke or called
in will now turn it over to
council members for questions,
comments and entertain a motion
and we'll start with
the proponent.
Council Member Campo Thank you
Council PRESIDENT And thank you
to my staff for the good work
on this.
Thank you to all the members of
the public for their
participation today.
I want to specifically thank
the cw workers who came to
speak directly.
Members of the Public Labor
Council and members of sounds
like almost every district for
explaining why today's action
is so important.
It's abundantly clear that
illicit cannabis delivery is a
problem in the city.
It's a problem that we haven't
had a solution to address
because it's difficult to
address.
It's layered with state and
local laws and enforcement
Actions span from the state to
city attorneys, local law
enforcement, the city
administrators and city
administrators involved.
Land use enforcement in some
cases.
So from a regulatory
perspective it is very
difficult to get this right.
But we're here.
The city regulates cannabis
delivery from businesses inside
city limits.
And if they don't follow
the rules, they don't get to
operate in the city.
They have a physical building
and a permit to operate it.
But what about the businesses
that come in, drive in, deliver
legally by state or local laws
and then leave?
To test if this is actually
happening you could right now
order cannabis to be delivered
to city hall particularly out
of city company is advertising
on Weed Maps an online platform
for marketing cannabis products
and has their location listed
as the Gaslamp District right
here in downtown Shouldn't
surprise anybody.
We don't have any licensed
cannabis outlets in
the Gaslamp.
This business is listed on
the state's Department of
Cannabis Control website as a
state licensed delivery
business but their licensed
operations is in Kern County.
That means in order to abide by
state law they would have to
wait until an order is made
before they dispatch to deliver
with a driver that delivery
driver has to be a direct
employee of that company.
They have to provide specific
details on every receipt with
information about that company
and they have to pay all
applicable taxes.
And they're definitely not
allowed to deliver to
government property.
You can place an order and have
a delivery within two hours
from this company.
No local taxes are applied on
their receipt.
No state license number is
listed on that receipt.
That means that someone is
either driving very fast from
Kern County, the nearest city
of which is 191 miles away or
they're storing cannabis
products illegally within our
city limits and that business
is clearly not abiding by
worker and consumer safety
protections.
So I understand we have a
current process for cannabis
delivery services entering city
limits.
They are required to register
for a business tax certificate
and pay applicable taxes but
they're not required to provide
any proof of their state
license.
So if we know that a business
is violating their state
license requirements, we can't
really do anything about it
yet.
And in this scenario let's say
we suspect that a facility is
within city limits is being
used to store cannabis products
for delivery.
It's not allowed under current
code.
We can provide notice and send
in code enforcement cpd to
investigate.
Apply penalties If they have
information on that business we
could file a complaint with
Department of Cannabis Control
to apply penalties or revoke a
permit if the business has one.
But we know that revoking a
permit or having an expired
permit does not stop that
business entity from continuing
to advertise and deliver
cannabis in the city of San
Diego.
So it's safe to say our current
resources are at capacity at
addressing this kind of illegal
commercial activity.
And when we've exhausted our
administrative options,
the city attorney's office can
still file a civil action in
court against the business.
But it would be a matter of
prioritizing this this issue
over others because our staff
capacity is limited.
And from what I've heard from
the workers and businesses and
members of the public is that
this activity goes on and on
and on.
>> While the government
agencies tasked with regulation
they're unable to enforce
the law.
My experience as a litigator
and prosecutor the private
right of action is a very
commonly used enforcement
mechanism.
It's primarily used in other
areas of law labor law for
example.
But the concept is very simple.
When a party is harmed by
the violation of a law they can
ask the court to enforce it.
This is not a unique remedy.
It's not a unique tool.
It's not just any member of
the public, by the way, a party
that's harmed by the violation
and in this case a legal
business.
Unions representing those
workers and those businesses
right here in San Diego.
So a court can evaluate that
evidence, determine penalties
if they determine the law was
not followed.
So what does this accomplish
and what does success look like
if we implement this?
First we incentivize legal
commercial activity by raising
the cost of noncompliance.
Registering for a business
permit means filling out a form
or you run The risk of high
penalties is not a high bar
that we are setting here
penalties that can actually
outweigh the financial benefit
to skip On hiring employees and
obtaining and renewing required
permits.
That's what we're looking at.
With this we intend to be clear
that any cannabis business
operating within our
jurisdiction must make
themselves known.
They must follow the laws.
As I pointed out earlier, a
receipt from a cannabis company
and current registered in Kern
County and delivering in
Gaslamp advertising Gaslamp as
violating multiple laws.
And if the business continues
to ignore local and state laws
they can then be held
accountable.
But I think we ought not reward
multimillion dollar companies
that decide it's more
profitable to ignore the law
which means ignoring worker
protections.
I think we should protect
workers.
These companies are ignoring
community protections where
around where cannabis can be
sold.
I think we should maintain
the system that we've put up in
San Diego that allow outside
entities to bring it down.
>> The public who voted to
allow commercial cannabis under
the expectation that tax
revenue would return back to
them.
That's what they wanted.
Right now it's not working.
So this proposal helps us
collect that as well.
So with that I understand that
to make this mechanism
successful we also need to
properly implement a permit or
a business registration
whichever way you want to
describe it.
We need to bring a fee study in
order to determine the cost
recoverable amount for
administering the permit.
And if we're asking businesses
to submit a copy of their state
license or business certificate
and information on their owners
employees I would imagine that
would align with the amount for
the business tax certificate
which is around $34 right now
for small businesses or $125
for larger businesses.
I see Good is here from
the mayor's office.
I need the mayor's commitment
via you that we will that you
will work to bring back bring
forward the appropriate fee
study to determine the exact
amount of what this business
permit will cost.
Yes, Councilmember, thank you
for that.
You do have our commitment to
bring that forward post second
reading at this House is today.
City Treasurer's office will
initiate the process to conduct
the fee study and then bring
that forward for council
consideration later this fall.
>> Okay, very good.
Also with along those same
lines working with staff to
ensure that neighboring
jurisdictions and
the Department of Cannabis
Control are properly notified
of those changes to our
cannabis regulations and
understand how to register
through the mechanism that will
be created by our departments.
Yes and I think that be an all
hands effort for parties that
touch this including dsd, cpd,
our government affairs team.
So you have our full support
there as well.
Okay.
With that council PRESIDENT,
I'm happy to move approval of
staff's recommendation on this.
Thank you.
All right.
So we have a motion by Council
member Campo to move the staff
recommendation and we'll go
next to council member Von
Wolpert.
>> Thank you.
And thank you very much to
staff for bringing this forward
today and thank you for
the hard work you've done it
and thank you to the public for
commenting and thank you to our
hard working folks that you
have.
C.W. Who have negotiated some
of the very first labor
contracts in the cannabis
industry.
I mean things like a paid day
off to go to the doctor and
fair wages And if you're
injured at the job that your
employer actually has to pay
worker's comp these are
the things that these workers
are asking for.
And I think that that should be
the bare minimum And it really
is very hard for cannabis
businesses who are lawfully
operating including the new
cannabis businesses who will be
permitted under the county's
equity program.
You too can be undercut by
the folks who operate down
the gas gaslamp from Kern
County by folks operating
outside of our state.
Even once you're licensed by
the cannabis equity program in
the county you too can use this
law If you locate in San Diego
and with the private right of
action it grants attorney's
fees and costs to
the prevailing party So you
don't need to hire an attorney.
You can get one to do it On
contingency.
It will be available to any
licensed business provider here
and you all can take on these
guys here or girls whoever who
are clearly coming from outside
the city and the county to come
undercut our local businesses.
That said, anyone who delivers
a product for sale in the city
of San Diego needs to be paying
sales tax and in this case
cannabis tax in the city.
You know we have folks who
deliver for Amazon or Target or
Walmart And if the point of
sale is here in the city of San
Diego, they have to pay their
taxes here even if their
business is located outside of
it.
This is a basic tax revenue
requirement.
It's a licensure requirement
and we require all businesses
to do this.
So I will second the motion.
>> Thank you.
All right.
Thank you.
Council member Von Wilpert.
So we have a motion by
Councilmember Campos, second by
Council member Von Wolpert to
move the staff recommendation
and we'll go next to Council
member Foster and thank you
Council PRESIDENT And I guess I
just need to reiterate and just
state for the record that I
think the discourse that you
are hearing stems from one
problem and that is we move
forward with cannabis without
being inclusive on its onset
And I think that was the worst
thing that we could have done.
I appreciate the $20 million in
revenue or roughly thereof that
we have been receiving.
I appreciate the good jobs as
our partners have been working
to make sure that we have good
employee benefits and and
workers rights But we did a
disservice.
We excluded a community that
has and still to this day is
continuing to have challenges
as we look at um how folks can
have what we call a life in
this United States of America
and this is something that we
have to stop.
It sounds like just from
the line of I guess from my
colleague MR. Campo
Councilmember Campo that there
is work that needs to come back
as we talk about establishing
permit fees.
It sounds like it should not
exceed $125.
Is that what I'm understand on
the onset of this conversation?
That's correct.
Okay.
Um and I guess if you can help
me to understand what does this
mean as I hear the public
comment, what does this mean
for folks that are part of this
county's program?
Is this excluding those
individuals from being able to
participate in the cannabis
industry that would like to do
delivery?
Yeah.
Thank you for the question.
Um, as the ordinance is written
now the county social equity
operators or any operator
that's delivering from outside
the city would be required to
fill out the permit form which
would be an online
registration.
And I think the thing that
we're hearing and discussion is
the fee amount and does that
fee represent a barrier?
And so like you said,
the second part of this is to
bring that fee study forward
and to determine the cost of
service and also explore
options for whether that be
waivers, discounted rates and
explore the possibilities
there.
But we can't determine that
feasibility without
understanding the cost to begin
with.
So we benchmark it against
the current business tax
certificate because it's a
similar mechanism of
registering providing
the information online.
It's not a land use permit
where it's going to be
intensive.
So we're thinking ballpark
can't be more than 50 to $100
but we have to be sure before
we present that information to
any other jurisdiction And also
to that we have met with
the county of San Diego over
this question and concern which
is how will the county social
equity businesses understand
the requirements when they're
navigating all of these hoops
through the county's program?
And we received their
commitment that they have a
list of the delivery operators
those Type nine licenses or
microbusinesses that will be
entering into the city and they
have a staff person ready to
assist filling out that form.
They're waiting on us to get
that information to them So we
will work extensively to make
sure that this ordinance
targets who is intended and is
not hurt, who it's not intended
to hurt.
Okay.
I appreciate that clarification
.
I mean I guess I will turn to
the city attorney as I am as my
office is working on a cannabis
equity policy as we speak.
And I will say that we have had
conversations with other
agencies and in one being Long
Beach on that we've had some
extensive conversations with as
we talk about the cannabis
industry and impacted folks and
barriers.
And one thing that did come
about that conversation as we
talk about cannabis equity is
the importance of delivery and
delivery services.
Um it is a lot different than
trying to enter the market just
establishing a brick and mortar
type process.
Um just evening I'm going to
take out what the cost of of of
building a building or some of
that but just the cost of what
we go through from a
development services position
and that added cost and time
frame and what it does to
someone that's trying to move
forward in this industry it is
daunting and it is a a
financial burden um the way
this process is moving right
now.
And so with that MADAM City
Attorney I will say um that um
I will my office will be
contacting you as I think as we
continue to move forward with
the cannabis equity policy that
we will have to potentially at
some point um relook at this
policy that we are discussing
today and to make some
provisions based on what we are
going to be bringing forward
because I cannot bring in a
cannabis equity policy without
a delivery provision and that
was directly a result of my
conversations with Long Beach
and what was brought to my
attention.
So it is a very, very important
and critical component of a of
an equity program.
So thank you Council member
We'll be happy to discuss those
issues with Office.
All right.
Thank you With that One last
question and just going to
the eBay's comments on that
they provided it seems like
there are as we as the main
purpose that we are doing this
is trying to get our arms
around the illicit market and
especially and I'm just going
to say out of town folks, right
I'm going to isolate those mean
those bad actors.
But clearly it looks like
there's concerns on just what
that enforcement entails, what
it looks like.
Can you fill us in on just what
those at least immediate
challenges have been or what is
police referring to?
As you know, we can pass a
policy but if we can't go out
and enforce then what are we
accomplishing?
Definitely I'll I'll start and
then I can pass it over to
the departments to get their
response.
But the concerns that were
mentioned on how to enforce
delivery is essentially
the reason why we're proposing
this with the private right of
action.
Our current enforcement
capacity is exhausted.
The fda has the authority to
issue notices and I'll let them
finish on their department of
their expertise.
But their staff is limited.
The information that they have
is limited So as is they're
unable to enforce against known
delivery services especially
because they don't have a
physical place in San Diego.
So how can dsd enforce
something that's not within
their limits?
And so that's where the city
treasurer's office comes in and
they're responsible for
administering the business tax
certificate and they would be
the entity that's responsible
for enforcing this so to speak
from an administrative
perspective they would be
administering the permit.
But the question then becomes
what happens if a business
decides not to register?
They only have five registrants
so far and like you heard in
comment Oceanside set up a
registry No one registered
because they don't have an
incentive to and so that's
where the private right of
action comes into play where
the current enforcement
mechanisms aren't working.
So there wouldn't be
necessarily additional
enforcement capacity to address
that even though it repeat some
of the available improvement
mechanisms.
I would say So with that I can
turn it over to coda if you
have anything else to add.
>> Yeah.
Thanks so much.
I think that captures it pretty
accurately.
It's really to supplement and
support the current enforcement
landscape they're adding in
the Treasurer piece of it and
having essentially a checkpoint
for what we know is out there
not out there That's helpful to
support these efforts
separately from that.
But really the private right of
action is is that in the big
shiny thing through this new
proposed policy But staff is
ready to enforce this to
implement this I do have at
least open to as well as
Ricardo Ramos from city
treasurer all mine if have
really any specific questions
there But we are all on
the same page and ready to
enforce.
Okay.
Is there any I guess anything
covered in the current statutes
in regards to reporting or how
are we going to monitor Is
there any monitoring associated
with this?
How are we going to determine
how this is progressing?
There's no monitoring
requirements that are explicit
in the ordinance but because of
that it's flexible to determine
that administratively our goal
would be to have something like
the Department of Cannabis
Control They have a registry
that's available for public
viewing so you're not
contacting that staff person
and asking for that
information.
It's a readily available list
and active registry.
So in terms of records
maintenance and managing of
that we would envision an
annual updated process.
But again it's up to
the administration and
department to determine what
makes the most sense and what
would be feasible on their end.
Okay.
All right.
Thank you for that.
I guess I will fall back coda
and have some additional
conversation so I can make sure
I just understand just from a
practical perspective what this
enforcement process looks like.
It sounds like we are going to
leave it in the hands of
the public to come in and try
and do some things which is a
little concerning based on how
the commentary and the feedback
you get within the industry as
competitive as it is and
the issues that that everyone's
encountering I will support
this today as we continue to
move forward.
But again and that's what
the understanding the intent
that I will be bringing forward
the cannabis equity program
I'll be it will have a delivery
component to it And so we'll be
looking to make sure that any
necessary provisions to make
sure we are as inclusive as we
can be as we continue to move
forward and further progress
with the cannabis or cannabis
program.
And again I'm just going to
close with I am still very
disappointed that we move
forward without the cannabis
equity program.
I hate that we gave almost $1
million back which I think was
a horrible decision and really
an injustice to those folks who
have been impacted.
And just to turn this over to
what I guess I would call
corporate type folks to take
over this industry I think was
just a horrific and horrible
move by the by the city
council.
And so I'll conclude there.
Council PRESIDENT And me for
your comments.
All right.
Thank you Council my boss for
not seeing anybody Council
member Yellow River Thank you
Council PRESIDENT Thank you so
much for the presentation and
for your help Customer come to
you for bringing us forward
kind of at a high level you
know groups and businesses that
are taking advantage of San
Diego that are operating here
benefiting from the city but
not paying their fair share.
I always have a problem with
that And so I appreciate
the part of this that that aims
to address that.
I'm certainly sympathetic to
the concerns that the high
standard that you C.W., has
helped establish for what work
place conditions and wages look
like for those folks who work
in the industry that operate
outside the city.
There's operators who work or
not not only not meeting that
standard that employers
generally and we certainly do
want to reward that All of
those concerns I am very
sympathetic to I appreciate
the questions and comments from
Councilmember Foster.
I could I'm not sure I fully
understood the answer to
the question raised about input
raised about implementation
because in terms I appreciate
your your response but I will
note that dsd and Treasurer
raise concerns regarding
implementation of Proposal co
two.
You said you guys are ready to
enforce.
What's the gap there between
what the department's told
the ipa and the readiness to
enforce?
And I think there's been an
acknowledgment by the length
within the language of
the ordinance that there's a
gap between what the city can
do and what the expectation is
as far as what needs to be
done.
I think and certainly I'm not
tried to speak on your behalf I
think there was a
misunderstanding that MAY be
played out last week during one
of the public briefings that
has since been resolved where
dsd does know their role here
within this proposed ordinance
as does the city treasurer.
I think maybe there was an
assumption that more was going
to be added to their plate in
terms of something that would
require additional staff time
or budget which again wouldn't
be maybe wasn't something that
was going to be ready for
consideration today that then
resolved We do have a path
forward here that we can do
within our current capacity.
We do have a game plan moving
forward on returning with
the fee study and so we do feel
confident that our timeline and
path forward is solidified and
agreed upon by all parties and
city departments.
So if you can I ask you I mean
you put this here for a reason
.
Are there specific concerns
that you continue to have just
not have the information that
code is referencing here?
I'm trying to reconcile what I
know what's put here in good
faith and what we're hearing on
the dais.
I think Yes.
So so while we're discussing
with the departments both dsd
and seato just have questions
on how to enforce once we have
this registered or some
information that they might
require that it's not provided
and I defer back to the city or
what specific those are For
example type nine licenses
information that is collected
in the state That's not
something they're able to
receive as of my understanding
now But I would defer back to
the cto for specifics.
I don't have anyone we do
believe we had a deputy
director Ricardo Ramos from
city treasurer only this
recording of the see that's
what concern was just
the enforcement as referenced
earlier this is basically just
a registry So we're collecting
the data and we can actually do
that piece.
But it's the question is just
the enforcement.
So that's what the answer if
that's the question as well as
what was presented today, there
is no enforcement enforcement
that would be performed by
the city just because we have a
lack of resources to The answer
is a private right of action.
Correct.
Okay.
So okay So concerns about
the city's ability to enforce
or I should say implement
through enforcement those
remain what is solved through
salt Fourth through
the ordinance is
the expectation that that gap
will be closed through private
right of action.
That's okay.
There's like I like a consensus
of had nothing going on okay I
recognize that type of action
are a common tool and an
important tool And I just from
a general public policy
perspective I have concerns and
don't like the idea that we've
basically written off
the city's ability to to
perform a function that we
think is worth writing the law
for to the to private industry.
But that's just as a general
sense of public policy that
doesn't seem like the direction
we should head but that's a
resource issue and that will
continue to be a resource issue
until the city is properly is
properly resourced which is a
little bit of a separate issue
but not completely because as
we like we are adding things to
the city's plate while we're
also removing resources at
times and I will continue to be
frustrated by that But that's
not the decision that's in
front of us.
One other question and
COUNCILMAN Foster was going to
get to this There's four cities
referenced in the ordinance
L.A., Oakland, Long Beach and
Ventura.
Three of those four, as I
understand it have equity
programs and as I think either
of us were saying, the delivery
piece is the onramp to
the equity program in Long
Beach.
So what are and I trust
COUNCILMAN Foster to do
the work here But what what are
we kind of doing more broadly
to include the equity piece
since we're using their
regulatory framework that you
you'll have you don't have to
That's all right if you want it
by all means.
But it's also a question for
COUNCILMAN Foster and our
office has been working on
the cannabis social equity
program and proposed policy for
you know been working closely
together on that.
That was one of the first
questions asked when this
initial proposal came forward
was how it MAY incorporate an
impact Councilmember Foster's
effort.
And so as we get closer to
the finish line with that
proposed policy as this one
gets legs under it and starts
to be implemented, those are
two conversations that
absolutely have to happen
concurrently to ensure that
both are essentially feeding
into each other.
>> So okay, I appreciate that.
The last thing I will say is I
just will echo the comments
from Catherine Foster that
the further we allow those who
got their foot in the door for
the regulated industry to to to
sprint ahead, the more
difficult it is to make it
equity to eventually have an
equity program that will
actually be meaningful and we
have folks who were shut out
who were targeted just as much
for who they are and where they
were as as to what they were
actually doing.
We know the disproportionality
of the war on drugs and what
that has meant for generational
poverty, the disruption of
families and long term harm
that will take generations to
undo And it the cities the city
has made it a intentional
decision to start a race and
not even allow those folks to
not only not have their shoes
on yet they're not even at
the track yet And I think that
continues to be a concern And
my trust in Councilmember
Foster's commitment to making
sure that we get that piece up
and running in a meaningful way
is is significant.
But I understand
the frustration And so again,
the intent here I think is
there's a lot that we are
aiming to curb that I think
needs to be curbed.
I will never support the idea
of businesses operating in
the city without contributing
back to the city.
I'll never support the idea of
businesses operating in
the city and selling their
workers short and I want to
make sure that we do right by
those who were most harmed by a
war on drugs that has been
proven in every way imaginable
to have been extremely,
extremely harmful in a very
disproportionate way.
So with that I say thank you
again to Catherine Pompeo and
his team for bringing this
forward and look forward to
having the questions answered
that have been raised today.
Thank you.
>> All right.
Thank you.
Council member Eli Rivera.
We'll go back to Councilmember
Foster.
Thank you.
Just one last question
Hopefully I guess just process
wise as there is more work to
do Right.
We have this passes today I'm
assuming that's the first read
comes back for the second read.
I guess my question is timeline
wise and as we talk about cost
of service right our fee study
those types of things So what
happens when we are still going
through that process and
understanding just how this
will be operationalized?
I guess I will say And what
does that leave to
the individuals who MAY be
going through whatever they are
going through?
Let's say there is a county
equity individual who wants to
come in and sign up or do
something.
What does that do to their
business and their ability to
engage as we are trying to
figure out the operational side
of this and to where we are
able to function and understand
who you know because I'm
assuming if they go to court
who would be the legal not
legal not legal business entity
or what comes first, how does
that play out in terms of
the process of the ordinance
and its implementation?
Well, first this would be first
reading second reading 30 days
pass that implementation date
and we're asking for commitment
from the mayor's office to be
able to bring that fee study in
alignment with that timeline so
that we have certainty before
this ordinance becomes
effective because you can't
have an effective ordinance
with this tool without
the implementation and it can't
work.
So correct And I think it would
if that did happen it would
just become chaos.
So what I guess how are you
going to manage that?
What's the plan for that?
So as we go through the second
reading and if that passes
through council city treasurer
initiates the fee study item We
are up against legislative
recess at that time as well
too.
So there's a little bit of time
here after initial passage and
actual implementation.
I think during that portion as
you do have the commitment from
our office that this does not
go live until that fee is
obviously there.
And so it's a it's a
communication piece really.
And so I think the second part
of the request from
Councilmember Campo was for our
assistance in coordinating with
other regional entities as
Summer mentioned earlier
incorporating equity pieces
that the county already has in
place into that fee study I
think is is a good step forward
And so there's quite a bit of
work here after initial passage
but we got to get this passed
to initiate that work And so
it's really going to be a
communication piece from both
of our offices on this council
to educate folks on what to
expect and then have a clear
runway as the fee actually gets
adopted by this council.
We have a firm implementation
date in mind.
Okay.
So what I'm hearing is if for
some reason that commitment in
regards to operationalizing
this is not stood up in time as
we go through this second read
then are we going to pause or
timeline that correctly so that
we are not so we don't have an
ordinance that has passed and
made it through and then we are
in trouble trying to scramble
and you have this clause in
here where folks can just start
filing.
So how are we managing that?
>> You understand what I'm
asking?
I totally get what you're
saying.
So I think I think there need
to be a discussion maybe with
city attorney's office here on
if we push out a second reading
and initiate to basically take
this as the direction of
the council saying yes, proceed
with establishing the fee and
then going through that process
to conduct the study and have
the conversations I described
earlier before returning for
the second reading Similar to
how we do things if it's a
meeting confer approach or
anything like that that way we
can have a clear and clean
implementation date.
I think both options work here
but I completely understand
where your concerns are of
basically creating a
opportunity for predatory
litigation to come through and
in place.
So get that.
Okay.
Well I think that's something
that we need to make sure we
have a clear understanding and
don't get ahead of ourselves
and create other issues And
then I'm sure creating more
barriers for folks who have
already been impacted from
the war on drugs right.
So so MADAM City Attorney, I
guess I will in the city
attorney's office We'll add
that to our conversation.
Um, as we are preparing and
continuing to move this item
forward I just want to make
sure that we are not getting
ahead of ourselves and doing
more of a disservice and that
what we are trying to
accomplish with this.
Okay.
Thank you.
Council PRESIDENT All right.
Thank you Councilmember Foster
Not see anybody else and light
I'll ask a few questions of my
own one Thank you Councilmember
Camp you and your d seven team
on This is something we've
talked about.
We have acknowledged it and it
never went anywhere even though
we recognize the delivery
services were happening there
And as I think we've all kind
of landed on the inability to
enforce by city staff was
probably one of the reasons
that we were just kind of stuck
and acknowledging there was a
problem without any kind of
solution And the private right
of action is that missing piece
that allows us to actually that
will be brought forward.
So thank you for working
through it.
So the questions that go
through my mind are unlike most
ordinances and implementations
that follow afterwards, it's
the city that's doing
the enforcement.
This ordinance actually has a
private right of action.
Is there language in today's
motion that says this does not
go into effect until we
actually have a permit process
in place That's not in
the motion language but if
the maker would like to we go
to the first reading, we go to
the second reading we have an
ordinance and somebody named
Lady Named says I just found
somebody who doesn't have a
permit and compliance.
I'm going to initiate a private
right of action Go to my be
bound with operations side.
Is it a crazy idea?
I know there's some big money
there that council PRESIDENT
Are you are you asking if
the private right of action can
be a force enforced if the city
hasn't City Treasurer's office
hasn't created the license
structure or the permit
structure for an outside of
the city cannabis delivery
program or a business to
actually get and therefore
follow the law.
>> I guess that's that's
the question.
I think that it would Okay Well
first to even prove it you'd
have to prove harm or you'd
have to show that you're, you
know, harmed economically But I
guess strictly speaking it
doesn't elucidate that exactly
.
I mean code is committed to
the operation cited dft or city
treasurers would enforce that.
We actually had it in place
certainly Well to be very to be
very clear, there is an
enforcement mechanism for
the city that says a city
manager shall promulgate rules
and regulations to do that.
So it's not as if we're not
able to create a system for
internal administrative
enforcement.
So I would say it's almost
nonsensical to think that a
private right of action could
come forward if the city
manager, the mayor's office
through the departments hasn't
created an actual license to
apply for because how could you
possibly go forward and try to
follow the law as an outside
delivery company if it doesn't
exist?
Yeah but the city attorney
agree with him Either one of
you And as Deputy City attorney
David Carlin to respond to
that?
>> Yes, I would agree with that
proposition that's been
discussed by Councilmember You
.
It's a private right of action
could not be initiated until
there actually is a permit
process in place That I guess
to answer that question
specifically, there's nothing
ever to stop somebody from
filing a lawsuit as I think we
all know.
But to succeed in that lawsuit
is you'd have to have a permit
process in place to show that
somebody is in violation of it
.
>> That's right.
Okay.
I got three lawyers saying yes
so I'm going to back off at
the engineer the for those of
us that are not steeped in this
whole ordinance, there's no
limit on the number of permits
that can be issued.
Is that correct?
>> That's correct.
As long as it's state licensed
there was an assumption made
that you have to have both a I
think a business tax
certificate and the permit and
that the expectation is that
that permit we know what
the business tax certificate
amounts are.
It's kind of a throwaway It's
probably the cheapest fee that
we have on the books.
But if what if survey the fee
analysis comes back and said
well yeah, we're not going to
do anything for 75 bucks or 150
bucks.
I don't even know what permit
you could get for that.
And it comes back of 300 bucks
and 500 bucks.
We're just going to we could
subsidize it.
We don't have to have full cost
recovery but I just want to set
expectations that in fact it
MAY not come in that an
expensive so and then we can
deal with it because we can
subsidize it.
We don't have to charge full
cost recovery and we can do as
I think it was suggested
waivers or carve out I've done
some of those and some of
the fees.
The other question is I think
every time that we've gone and
done update our fees and
penalties, a lot of us have
grumbled that we don't think
those rates are high enough to
actually be a disincentive to
someone breaking the law.
I can think lots and lots of
examples of that.
This sets a whole new bar of
jacking up 10,000 per violation
for abatement $20,000 a day for
a civil penalty That opens up
the universe in terms of what
those can be.
Why is this okay?
And when we don't do that with
any other fee and penalty, was
that just a policy call or was
there actually something that
limited how much we could
charge?
I don't know Who wants to
answer that.
I can start with the policy
direction the fee establishment
amount at $20,000 was a policy
decision based off of the city
of L.A. Is a penalty structure.
The $10,000 value comes from
what is existing in the land
development code that was
recently updated as part of
the JUNE 8th action.
So that is the baseline figure
that we were operating off of.
I'll leave it there.
MR..
So legally again this literally
goes to the United States
Constitution and the Eighth
Amendment and the excessive
fine clause It would have to be
to be unlawful to be grossly
disproportionate to the actual
fence.
Again, this is a fee that's up
to $20,000 per day that a
violation exists.
And this would be I guess I
should say this is the judicial
civil penalty portion of this.
So a judge would have to factor
in what he or she would decide
would be judicially imposed.
Right.
I mean so it's not it's not a
guarantee $20,000 if we put a
ceiling on it.
Okay.
Fair enough Because again, we
have private right of action.
The city's policy generally has
a ban.
We're not looking for revenue.
We're looking for compliance by
private right of action
probably assume has no such
strings.
They don't have to say Did you
not know that there was a new
law that you have to comply
with that they can just drag
them into court, is that
correct?
Again, once the permit process
is up and running, yes, that
that is correct.
Okay.
And as I think others said,
communications are going to be
a big part of this to try to
spread the word that not only
is there a requirement but it
could be enforced immediately
unlike how the city typically
acts.
I think the one question that I
didn't hear from my colleagues
was we got a number of folks
who apparently operate under
the county cannabis equity
program.
I'm not familiar what are
the requirements that they had
to go through to qualify or get
a permit or whatever the county
does versus what this ordinance
will require?
Is there any differences or any
added obligations or
differences between
the county's permit and this
proposed permit The counties
permit?
From our conversations they
have four categories and
they're all land use based So
their delivery permit also
include is the facility itself
and they have a flat fee
assessed And I know we have
some county operators here they
can give the specifics on fees
but it's in the thousands of
dollars That's for the license
for the counties program.
An operator that's operating
social equity or not still has
to obtain their state license
both at the same time.
So they would have to obtain
their state license their
license to the county as a
separate licensing process
application fee And that's
the county what the city is
proposing in this ordinance is
the registration,
the commercial business
registration to do business and
conduct business in the city.
So it's not a land use permit
in that sense It's a business
registration that it's intended
to complement the existing
cannabis non cannabis business
tax certificate.
So if I understand correctly
the only new requirement for
anybody who has a permit or
license through the county is
to fill out an online form.
That's correct.
That's it.
So and the tax certificate and
then the permit fee which we
hope is $150 range.
>> Okay.
And I think that answers all
the questions.
So thank you very much for
answering the questions.
Thank you for working through
this.
I know some of the folks that
were in opposition to this are
not going to be satisfied with
the dialog here going forward
but I will be in support of
this.
So Councilmember Hemphill Thank
you, counselors.
I'll just be very brief.
MR. Carlin mentioned
constitutional protections that
clicked in my mind The Doctor
There would be a due process
problem for the city to create
a law but not create the permit
to enforce the law and then go
someone from a private reaction
go to a court to say this
person doesn't have the permit
that is required by law.
So I think it's a I think we
can say with a high degree of
certainty that no court would
allow a private private right
of action lawsuit if we haven't
taken the steps.
There's also equitable remedies
under the law to save.
How could I know I was
violating the law if I never
had the ability to follow
the law itself?
So I appreciate MR. Carlin
bringing up that phrase so it
would trigger that history
lesson.
Well, we all learned a little
bit about the Constitution.
Okay.
I think I've gotten all my
questions answered about again
thank you, Councilmember Campo,
for finally solving the missing
piece to regulate something
that we've talked about for a
very long time.
I look forward to Councilmember
Foster and his work at the city
level.
Thank you to staff for
navigating this and
the research that you did to
bring bring this forward.
So with that I don't see
anybody else on the lights.
We have a motion by
Councilmember Campo and
the second by council member
Von Wilbert that we can't
please call the roll.
I have set up the voting
system.
Please cast your vote.
The motion passes unanimously
with District two and district
date absent.
All right.
Thank you again.
Okay.
I need to do a little bit of a
time check.
This is the point in
the afternoon session where we
do not agenda public comment
Everybody willing to stick
around for both in-person and
remote because I hope we got
six So we're in good shape.
Thank you because I know I
don't want to roll over till
tomorrow.
It can be done so we will now
take up non agenda public
comment We'll take both
in-person and those
participating remotely.
Council members respect and
appreciate the public input and
are fully committed to
protecting every participant's
free speech rights at council
and committee meetings.
Deputy Clerk Please proceed
with public comment Pearl 2.7
Known Agenda Public comment is
an opportunity for members of
the public to comment on items
that are not on the agenda but
within the subject matter
jurisdiction of the City
Council.
Each speaker will have two
minutes.
Please note if there are eight
or more speakers on a single
topic the maximum time for
the topic will be 16 minutes.
If you are in chambers please
submit your speaker slip If you
are joining us virtually please
raise your hand to speak by
tapping the raise your hand
icon or if you are a call in
participant start nine We will
begin with in-person knowledge
and public comment.
Jacob Lewis Edwards I don't
think he's still here so I'll
go to the next person allegedly
Order Please come forward.
You have two minutes to speak.
Okay.
We we go.
Can you start my time over?
Thanks.
Yeah.
You guys are funny with this
drug stuff.
You're like we're going to
fight the war on drugs by
heavily regulating the drugs
make an extremely difficult for
all those people.
Who were you know wrongly
charged any who And it's funny
to be talking about drugs while
we have people who are
whistleblowing against
the government like some are
Stephan And the things that are
going on in the jails at Las
Colinas and their brutal
assault from that Andrea Ebbing
with Anthony Warner totally
slammed her face into
the ground and he's playing
the victim.
He's like six, six three and
260 pounds said she was really
posturing any who So they have
done a competency evaluation
because you know in order to
silence somebody you got to
really question their
competency.
So then as long as you ask them
some political questions and
the person doing the evaluation
things that you're I don't know
maybe a conspiracy theorist
then they'll say that your
incompetent So how cool is
that?
I mean she's got felony charges
from you know, supposedly
barring Anthony Warner who you
know, can still shoot his
firearm but has to take time
off of work because his hand is
so injured.
But it's just interesting to
see the lengths that people
will go to silence people.
So I mean imagine she might go
into a mental hospital for like
two years.
Who knows?
And then eventually, you know,
if somebody deems her competent
she might be able to face these
charges.
Right.
And right now she's in on two
misdemeanors.
She's out on a felony.
You know, she had her brain
aneurysm.
No worries there.
She might need some more
surgery while she's in there.
She already had to go to
the hospital because they can't
take care of her.
>> But good job isn't that cool
when you're exposing stuff and
they say you're incompetent
should be really exciting.
>> The job.
Thank you.
Blair Beekman followed by Bob
Kozinski, Anthony Ralphs, Lori
Saldana, Marco Espinosa and
Terry Best High by Beekman
Thanks.
A report back on Andrea's which
is that where she's at?
I think she's passing her
competency test so Oh I'm not
hearing the story right If
she's going down again she was
up before and now it's down and
it's just amazing she has to go
through all of this.
I mean I really hope that can
be a real effort to be working
on this issue And overall
issues of how our police work,
how our immune systems are
working.
Good luck in those efforts.
I wanted to ask also how
the just I made a point You
know, I was I was late to learn
that the new Good Day Centers
is probably going to be closing
in six months time And I think
we have to make a concerted
effort to talk about our
homeless issues more in
the coming year, how we do that
and a more sensitivity in that
department.
And so I was really hurt in
the presentation being
dismissed today.
I think we have to make that
extra effort at this time and I
hope we can.
So good luck how we can.
I also wanted to offer at this
time I'm giving my tech academy
a bit of a break tonight and
just consider you know
the ideas I brought up before
about budget issues that we can
still work on budget issues at
this time And the idea of as a
very small cut in pay to our
city government staff if that's
3000 people at least if they
take a cut of say $600 a year
that's 50 bucks a month.
I think that's over almost $2
million in savings that can go
to the budget and that's not
including our city council And
Mayor, what they can take on
that's a lot of money and I
hope we want to consider such
things.
>> Good luck You can Thank you.
Thank you.
Bob Kozinski So video okay.
Okay Bob because there's a week
ago today I was hang gliding at
Dockweiler State Beach in Los
Angeles under the Dockweiler
waiver that has been in place
since 2017 the public has been
able to hang glider at
Dockweiler Beach for nearly ten
years under that waiver a
decade ago.
However, hang gliding at
Dockweiler was not allowed by
the county of Los Angeles
without use of a membership.
Fortunately that all changed
due to a sequence of events
that started right here in San
Diego On JULY 24th, 2011.
A female student named Shannon
Hamby was taking lessons at
Tori through the city where she
was under radio supervision
when she was flown directly
into the path of another
student.
She crashed and was badly
injured.
I was contacted by Shannon's
lawyer and asked to testify as
an expert witness and I did.
My testimony in SEPTEMBER of
2014 was solid and the case was
quickly settled in Shannon's
favor for an undisclosed
amount.
Yeshivah ended up losing their
insurance coverage by NOVEMBER
of 2014.
I was retaliated against by
your concessionaire who
conspired with you spend
the spring of 2015 to have me
expelled for my testimony which
ended my ability to fly at all
use for sites including Torrey
Pines and Dockweiler In early
2017 we met with newly elected
Barbara Bree for help.
Barbara Bree suggested a flight
waiver to solve the problem but
she never followed through.
Joe Foust and I also spoke to
the Los Angeles County Board of
Supervisors while Barbara Bree
did nothing here in San Diego,
Los Angeles Supervisor Janice
Hahn stepped up and actually
instituted a waiver.
The first DR. Weiler waivers
were issued to Joe Foust, Frank
Culver and myself on JULY 26th,
2017 and we have flown under
those waivers without incident
ever since Barbara Bree dodged
the issue for the rest of her
term until her failed mayoral
bid in 2020.
Joe LaCava has followed her
lead throughout his entire term
reactivate the Torrey Pines
City Park Advisory Board and
Institute a Torrey Pines flight
waiver now Thank you.
>> Thank you.
>> Our next speaker is Anthony
Ralphs.
Good afternoon City Council.
I just wanted to speak about
the concern that I have and
hearing the expressed financial
concerns earlier today.
Miss Campbell who is no longer
here expressed the $3 million
concern that she had with
the study that was done for
the Phase two project for sdi
And she thought that the $3
million was too much, that
these studies are costing
the city too much.
I have a real difficulty in
understanding how she can on
one hand have fine problems
with the costs of the studies
that cost $3 million to help us
potentially get off of a
monopoly that's making $1
billion of profit every year.
But she doesn't raise a single
point with the fact that
the police budget the public
liability fund has exceeded
over $116 million in the last
ten years or that this year
alone it's already exceeded $42
million and we're not even
finished with all
the settlements.
I have not heard the side of
the city that does not address
these issues as as Henry Foster
has expressed before and
multiple times in this chambers
he said this is the tale of two
cities And he's right.
We do have one half of this
city council that understands
and respects our privacy
concerns, that understands and
respects that we are not
property of the state to be
tracked in our whereabouts of
where we go that understands in
the Supreme Court's recent
ruling that we have freedom in
the whole totality of our
movement Although the roads are
owned yes by the city and
therefore yes y'all do have
jurisdiction over the city's
roads.
We own our own personal
sovereignty over our own bodies
And there are cities that are
being sued including I believe
it is Santa Monica No Santa
Clara.
>> Thank you for your time.
Thank you.
We're next.
Lori Saldana.
>> Good evening and thank you
to those of you who are
actually still here and some of
you are maybe even paying
attention.
I just got off of a Zoom
meeting with the Democratic
Club and one of the council
members who's not here tonight
was in that meeting.
So I'm not sure where
the priorities are but it's a
little concerning to me when
you have discussions on issues
that are important to this body
and people leave early and then
end up at another engagement
elsewhere.
You're you're concerned about
the impacts on public health
and safety and giving
the private right of action to
others in certain industry.
And I just want to suggest that
there's another industry in
town that has serious impacts
on public health and safety.
Is it just me or is there
feedback on this tonight?
There's feedback.
>> And if you were to give a
private right of action to
people I think you would go a
long way to closing of several
problems in our city budget and
also our housing.
And of course I'm talking about
short term vacation rentals.
They also lack enforcement.
They also have people operating
without permits.
They also have people putting
lives and safety at risk.
Around the corner from my
house.
There's a short term rental
that has caught on fire that
has flooded raw sewage into
the streets.
And it took me over a year to
get someone to respond.
If I had a private right of
action I could have gone at
them as a property owner
nearby.
Also they don't pay commercial
trash hauling fees.
They pay residential fees and
they're businesses operating in
our neighborhoods.
If you are serious about
private right of action, give
residents who are next door to
short term rentals that are
violating the permitting,
violating health and safety.
And let us go after them
because I promise you they are
not disadvantaged.
They have people that owned
multiple properties that form
consortiums that buy our
properties in Ocean Beach and
elsewhere and push out full
time residential rent renters
and homeowners.
If you want a right of action
apply it to short term rent.
Thank you.
That does conclude your time.
>> Marco Espinosa.
>> Good evening.
My question goes a Boston
Avenue park ideas.
Um the it's not helpful if I
don't have a map for you.
Sorry.
Um, I know we already iterated
the coming onto the freeway
The bollards that first section
of park between the freeway
onramp and the bridge that goes
over the freeway.
I think that could be
the section in the diagram
shows how it's owned.
It doesn't include actually
the walkway.
Um, and the bridge.
Um, so when I got to the park I
was like oh that's something to
consider on Google Maps.
The park actually looks really
small.
Doesn't seem like there's a lot
space but once you get there
quite a lot of space for a park
If it does end up being the um
tennis courts or soccer fields
um in the portion that's like a
longer portion Nothing could
fit there.
That doesn't need to be like a
net or something that goes
along that nice new barrier
wall for the freeway so
eyeballs don't go into
the freeway as cars are going.
And then the second portion of
land use available for park
Right now it's a cycle center.
I remember I heard that
possibly So we chose one second
over which then we left like a
little strip on the side along
Charles Creek and at the creek
was a lot cleaner, a lot nicer.
I mean you can make that into
some kind of little beach kind
of thing but it's a really
dirty water so.
And if the recycle center does
move out and the so be chosen
to move in, that's a huge whole
plot of land for a park that
had a nice and everything.
That would be a lot of fun.
And couple of more that you
measured did not pass but I saw
advertised as 5000 to 5000 but
on the values 8000.
Thank you.
That does conclude your time.
Terry Best Terry Best District
three.
Please stop allowing special
interest to write laws that
create and strengthen
monopolies.
Stop doing the bidding of rich
white men to fund your future
political endeavors.
Stop allowing special interests
using labor to attack those
less fortunate.
This nonsense theme here is
precursory support for your
2028 mayor campaign and it
looks ugly.
Is that the look you want
further marginalize vulnerable
people?
Again, shame on you MR. Trump.
You.
>> Thank you.
That does conclude in-person
public comment.
I have started the five minute
timer in council chambers.
We will now turn to the virtual
queue in which there are seven
participants requesting to
speak.
We'll begin with Tyrion Skelly.
Please begin.
Good evening San Diego City
Council Chair.
My name is Scully and I work
with my planning group on good
public health and safety
policies and land use
decisions.
Where I live has windy
sometimes rocky roads,
overgrown foliage and some
roads reported that at times
and dangerous when it rains or
is windy as it's been in
the last couple of days.
JUNE is Brain Awareness Month
and I'd like to talk about
the dangers of marijuana and
alcohol impaired drivers.
This is a situation we know
well in our family oriented
neighborhoods with our perilous
roadways.
Recently the Journal of
Adolescent Health article wrote
that marijuana policies
decisions must acknowledge that
access access to an
intoxicating substance that
appeals to young people will
end up causing harm No more.
So then when we drive
the tribute again describe
the conditions of our roadways
and the delays to fix them.
I would like to respectfully
suggest that damaged roadways
combined with drug impaired
driving is one more lawsuit
about to happen?
At least there is one thing you
could do to mitigate that has
been contributing to
the dangerous the dangerous use
of can and cannabis removing
enticing and distracting
marijuana billboards from our
roadways.
Summer 26 would be the perfect
time for policies to happen
that would ban marijuana from
our neighborhood roadways.
Thank you for hearing my
concerns this evening.
Thank you.
Next up Peggy Walker.
Please begin.
Thank you.
Council members Food and gas
prices MAY be high today but
drugs like high potency
marijuana have never been more
affordable or available And
that's reflected in today's
marijuana delivery item
addressed earlier.
In a society seeking
the convenience of home
delivery for just about
everything that item shows
psychotropic drug consumers are
no exception.
And the upshot of that is that
a society where people can get
high so easily it's also less
healthy and that's reasonable.
That truth was put forth in a
recent New York Times article
headlined It Shouldn't Be This
Easy to Get High And so many of
us parents agree.
Citing the fact that 48 million
Americans are addicted to an
intoxicant like marijuana,
the Times suggests we should be
making it easier for people to
get help rather than get high.
A straightforward way to curb a
particularly uptick in use and
its outcomes of poor physical
and mental health and
addiction.
The proposals it's higher
taxation on marijuana reasoning
that people sicker less when
something's more costly.
With that in mind I ask your
consideration of increased
taxes for all marijuana
products.
However results are delivered
and more transparent reporting
of how much in taxes for
marijuana is being collected
and transfer nc and how they're
being used by the city.
Thank you for that
consideration.
Thank you.
Next up is Judith Strain.
Please begin.
>> Good evening San Diego City
Council.
I appreciate that you've stated
that doesn't go unnoticed by
the public when you make those
sorts of sacrifices.
I want to speak to a
terminology that we're seeing
in public health more and more
and that is called gas station
heroin.
It's kind of used as a catchall
terminology for gas station
intoxicants but we now see
those products still available
to our young people.
They include in their often
sort of spotlight kratom.
They're also including what's
called magic mushrooms not I'm
sorry nitrous oxide and other
products that contain high thc
in hiding under cbd products.
I just mention it because
the terminology is getting used
more and more about where our
children buy these items at gas
stations which right at the top
of the list and the number of
gas stations in the city of San
Diego.
One can only guess And if we
were to enforce the laws
against these products here in
our city, just think of
the amount of money that we
could bring in.
So as you hear the terminology
gas station heroin and realize
that they're talking about all
the intoxicants that are now
portable at gas stations, I
think what we could do to at
least stop it by enforcement
and gather up from them they
find that come with it.
Boy, it could be a double win
for everybody.
>> Thank you.
>> Please note that the five
minute timer has concluded with
four speakers left in
the queue.
No other speakers will be taken
at this time.
Next up Phyllis.
Please begin.
Phyllis, please On the air.
I can assure you Phyllis I can
on mute for you.
We're going to move on.
Okay.
Next up, Becky Wrap.
Please begin.
Good evening.
I need a second rapid increase
in my concerns about
transparency and
accountability.
In San Diego, the marijuana
marijuana permitting program
almost seven years ago,
the rich Bernardo community
engaged extensively in
the public process for
the original marijuana
application.
Residents attended hearings,
submitted written comments and
with strong concern about this
being a pot shop in their
neighborhood.
But what has happened since
that approval is basically
invisible to the public.
That original permit has now
changed hands multiple times.
The operator that the community
initially evaluated is no
longer the operator today.
Ownership has shifted through
acquisitions and corporate
transactions and now
the business is associated with
a brand called Lake House.
Residents were never notified
of these changes.
There were no public hearings,
no neighborhood notices and no
requirement for the city to
explain who ultimately controls
these permits.
The community was fully engaged
in the original decision but it
has been in the dark for years
since.
That raises a transparency
question.
If public input is required to
approve a pot shop, why is
there no transparency when that
same permit is sold or
transferred to an entirely
different company multiple
times?
The operator behind the permit
is not a minor detail.
It speaks to accountability,
business practices and
the enforcement history.
It also raises concerns about
branding and public perception
and the like.
The House does not communicate
to the public that this
business will be selling highly
intoxicating products.
Rather the message it sends is
that our being now has a new
bakery in town.
This is unacceptable and
communities deserve to know who
is operating in their
neighborhoods not just at
the moment of approval but
throughout the entire life of a
permit.
Thank you.
Next, John Elway.
Please begin.
Hi John.
You have lived experience
advisors so my team and I went
through all the press articles
and were in attendance or
listening to the majority of
the budget meetings and we
started to find out that
the city is not only funding
the partial operation over at
the new Good data center but
that you are licensing it
meaning that nobody could go
ahead and or and fill in
the money or or move in and
operate that separately from
the existing provider.
I can't believe after all
the work we've done building
relationships that nobody had
the courtesy to say that Well
actually I probably should
believe it because obviously it
was hidden from the public.
The fact that you were taking
away the only place that
homeless people could go in
the entire city and not be
addressed at least from 9 to 5
for a few days a week.
I'd like to understand how this
decision occurred and was that
included in the budget
resolution?
>> Thank you.
Thank you.
Next our last caller is caller
with the last four digits 8700
please begin.
Thank you.
First of all, Joy Senator a
first of all, a big thank you
and five stars for
the performance by our deputy
city clerk.
Thank you so much And the next
PRESIDENT For your humor was
present today.
Thank you.
I really enjoyed that.
And then a request from MR.
Stump.
I'm wondering if you could
during the public comment give
the public his nine step plan
for fda and that sounds
interesting.
Next I want to speak to
the gentleman who used the word
union bust and I felt his anger
in those words.
I respect that anger.
Next, I love the boldness and
the fight that was present in
the chamber today.
Did you feel the beautiful
tapestry of all the people to
be There was a little bit like
what we feel when we say one
people, one family, one San
Diego I'm going to get to this
tomorrow.
Look forward to that.
But to all.
Thank you.
This concludes lunch and
the public comment.
All right.
You can catch me at The Late
Show at the Comedy Club later
tonight.
With that, does the city
attorney have anything to
report out in closed session?
There is nothing to report.
All right.
Thank you.
With that we will now turn
counsel to the regularly
scheduled council meeting
tomorrow, Tuesday, JUNE 23rd,
2026 at 10 A.M. Or shortly
thereafter.