HomeMy WebLinkAbout30 - PH-1 - Approve Certification of Special Assessm - 7/20/20211
CITY COUNCIL AGENDA REPORT
MEETING DATE: July 20, 2021 ITEM NUMBER: PH-1
SUBJECT: APPROVE CERTIFICATION OF SPECIAL ASSESSMENTS FOR THE
COLLECTION OF DELINQUENT CIVIL CITATIONS FOR MUNICIPAL
CODE VIOLATIONS IN RELATION TO ILLEGAL AND UNLICENSED
CANNABIS BUSINESSES
DATE: JULY 6, 2021
FROM: FINANCE DEPARTMENT
PRESENTATION BY: CAROL MOLINA, DIRECTOR OF FINANCE
FOR FURTHER INFORMATION
CONTACT:
CAROL MOLINA, DIRECTOR OF FINANCE
714-754-5243
RECOMMENDATION:
1. Hold a Public Hearing; and
2. Adopt the attached resolution approving the certification of special assessments for
delinquent civil fines for municipal code violations in relation to illegal and unlicensed
cannabis businesses.
BACKGROUND:
Since the legalization of recreational use of cannabis in 2016 under Proposition 64, illegal
cannabis operations (dispensaries) have proliferated throughout the State. The participants
in these operations, including property owners and employees, have set up shop with
disregard to local ordinances, state permits and State building and fire codes. Specifically,
these dispensaries have disregarded the ordinances regulating cannabis uses enacted by
the voters of the City (Measure X) and the City Council - all to the detriment of the general
public, as well as those legal cannabis businesses currently operating in the City.
The City has attempted to curb illegal and unlicensed cannabis operations that have been
operating throughout the City by issuing citations for municipal code violations including:
operating without a business license, lack of required building permits, and operating an
unlicensed cannabis dispensary. As part of the City’s targeted enforcement, citations have
been issued to property owners, business operators, and employees. All parties who were
issued citations had 30 days to pay before considered delinquent. Delinquent citations are
then forwarded to the Finance Department for collection. Pursuant to State law, certain
delinquent fines, interest, and penalties may be collected as part of nuisance abatement
procedures authorized by Government Code Section 38773.5. This allows the City to place
delinquent citations on the County’s property tax roll as a special tax for collection purposes.
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ANALYSIS:
Government Code Section 38773.5 authorizes municipalities’ legislative bodies to adopt
an ordinance to establish a procedure for the abatement of a nuisance and make the cost
of abatement of a nuisance upon a parcel of land a special assessment against that
parcel. The assessments are limited to property related violations. The City’s procedures
pursuant to Section 38773.5 are set forth in Costa Mesa Municipal Code (CMMC) Section
1-48, Collection of Unpaid Fines.
Staff has made repeated attempts without success to collect the Civil Citation fines due from
the property owners and affiliated parties listed in Attachment 2. There are a total of 58
delinquent civil citations that are recommended to be assessed against 12 properties. The
delinquent amount is $122,475.
Persons cited were notified in writing at the time of citation issuance of their right to a hearing
pursuant to CMMC Sections 1-45 through 1-47. In addition, each property owner recently
was mailed a formal letter, via certified mail on July 7, 2021, of the proposed special
assessment against their property for the delinquent civil citations and the date and time of
the public hearing. Further, the letter included information that their right to an administrative
hearing and judicial review of the citation issued against them has now expired.
The purpose of the public hearing is to consider a resolution to certify the special
assessments and authorize recording such assessments against the respective properties
as liens. This action will also authorize the Tax Collector for the County of Orange to place
the assessments on the tax roll and proceed to collect the assessments as property tax liens
against their properties. Should the assessments be added to the tax roll as liens, penalties
and interest will continue to accrue until paid at the maximum rate as allowed by State law.
Pursuant to Government Code section 38773.5(c), at the time of imposition of the
assessment, a notice will be given to the property owner notifying them the property may be
sold after three years by the County tax collector for unpaid delinquent assessments.
Property owners identified in Attachment 2, may appear before City Council at the public
hearing and contest the amount and/or validity of any lien or assessment for a civil fine.
However, pursuant to CMMC 1-48(4), such contests shall be limited to the issue of the
amount and/or validity of the lien or assessment (whether the civil citation can legally be
added to the tax roll as a special assessment) and may not consider whether the underlying
Code violation occurred.
Finally, a legal notice advertising the public hearing, which is required pursuant to
Government Code Section 38773.1(b), was published in the Daily Pilot on July 9, 2021.
ALTERNATIVES CONSIDERED:
Council may choose to reject the resolution and direct staff to proceed to collect delinquent
civil citations through a collection agency, which historically has a low collection rate,
therefore, limiting the effectiveness of compliance enforcement through citations. Adding the
Civil Citation fines to Special Assessment liens provides an additional mechanism to assist
Code Enforcement Officers in their effort to ensure compliance with the CMMC as it pertains
to illegal and unlicensed cannabis business operators.
FISCAL REVIEW:
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By certifying the Special Assessments to the Orange County Assessor for inclusion on the
Property Tax Roll, the City has a greater likelihood to collect delinquent fines and curb the
illegal and unlicensed cannabis operations within City limits. The County charges 0.30
percent (0.30%) of the original value for each special tax, fee, or assessment that is to be
collected on the County tax rolls. The citations currently total $122,475.
LEGAL REVIEW:
The City Attorney has reviewed and approved this report and the attached resolution as to
form.
CITY COUNCIL GOALS & PRIORITIES
This item supports the following City Council goals and objectives: strengthen public safety
and keep the community safe; and achieve long-term fiscal sustainability.
CONCLUSION:
Staff recommends adopting the attached resolution approving the certification of Special
Assessments for delinquent civil fines for Costa Mesa Municipal Code violations in relation
to illegal and unlicensed cannabis operations.
CAROL MOLINA KIMBERLY HALL BARLOW
Director of Finance City Attorney
ATTACHMENTS: 1. 2021 Special Assessment Resolution
2. 2021 Civil Citation Special Assessment List