MEETING DATE: February 12, 2013 Urgency Ordinance Imposing Temporary Moratorium on Medical Marijuana Dispensaries

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1 AGENDA REPORT Meeting of the San Marcos City Council MEETING DATE: February 12, 2013 SUBJECT: Urgency Ordinance Imposing Temporary Moratorium on Medical Marijuana Dispensaries Recommendation That the City Council consider and take action on the proposed urgency interim ordinance imposing a temporary moratorium on the establishment and operation of medical marijuana dispensaries within any zone in the City of San Marcos. Introduction After the passage of Proposition 215 in 1996, California voters and the California legislature provided a defense to criminal penalties for the possession and use of marijuana for medical purposes under specific circumstances. However, Federal law currently prohibits manufacturing, cultivating, distributing and possessing marijuana for any purpose. As the Council may recall, medical marijuana dispensaries are currently prohibited in all zones within the City s jurisdictional limits pursuant to San Marcos Municipal Code (SMMC) Chapter Such uses are also precluded by the City s Zoning Ordinance because it does not allow medical marijuana dispensaries in any zone, either as a matter of right or by conditional use permit. California Courts of Appeal decisions have been issued throughout the State with inconsistent determinations as to whether local agencies have the ability to regulate and/or prohibit medical marijuana dispensaries. The California Supreme Court has granted petitions for review of several of these cases, certain of which involve a ban on dispensaries. California s Fourth District Court of Appeal, which governs San Diego County, has upheld local regulation and control of such uses, including bans. The Supreme Court heard oral argument on February 5, 2013 in the City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc., a case involving a local ban on retail medical marijuana dispensaries. The Court has up to 90 days to issue its decision regarding whether or AGENDA ITEM # 8.1

2 Page 2 Marijuana Dispensary Urgency Ordinance February 12, 2013 not local agencies can prohibit and/or regulate medical marijuana dispensaries, but often issues its decisions before 90 days have passed. If the ruling issued by the Supreme Court does not uphold local agency control of these dispensaries, the City s current prohibition would be effectively preempted with no regulations in place. To avoid such a scenario, it is necessary that the City enact a temporary moratorium on medical marijuana dispensaries under Government Code Section to protect the public health, safety and welfare until such time as the City can craft appropriate regulations governing dispensaries based on the Supreme Court ruling. Proposed for City Council consideration is an interim urgency Ordinance that would impose a forty five (45) day moratorium (Initial Moratorium Period) on the approval or issuance of any land use entitlements, business licenses, building permits, conditional use permits, or other land use approvals for the establishment or operation of medical marijuana dispensaries within the City of San Marcos. Prior to the expiration of the Initial Moratorium Period, another ordinance will be brought forward to extend the moratorium for an additional period. Discussion In 1996, California voters approved Proposition 215, entitled the Compassionate Use Act ( CUA ) to ensure that seriously ill individuals have the right to obtain and use marijuana for medical purposes when recommended by a physician. The CUA also exempts patients and their primary caregivers from criminal prosecution or sanctions under State laws that otherwise prohibit the cultivation or possession of marijuana. In 2003, the California Legislature adopted Senate Bill 420 to create the Medical Marijuana Program ( MMPA ), which established a voluntary program for the issuance of medical marijuana identification cards for qualified patients; set limits on the amount of marijuana any individual could possess; and provided an exemption from State criminal liability for persons who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes. Despite the passage of the CUA and the MMPA, marijuana remains illegal under Federal law pursuant to the Controlled Substances Act ( CSA ), which classifies it as a Schedule 1 drug and prohibits the manufacture, cultivation, distribution and possession of marijuana. Additionally, the United States Supreme Court has continuously held that the use of medical marijuana violates Federal law under the CSA. In 2005, the U.S. Supreme Court held in Gonzales v. Raich that the Commerce Clause authorizes Congress to prohibit the cultivation or use of marijuana for medical purposes permitted by California law. Under this decision, Federal law AGENDA ITEM # 8.2

3 Page 3 Marijuana Dispensary Urgency Ordinance February 12, 2013 enforcement agents may continue to enforce Federal drug laws against Californians who cultivate or possess marijuana for medical purposes. The conflict between State and Federal laws relating to the ability of local agencies to prohibit and/or regulate medical marijuana dispensaries has resulted in several inconsistent California Court of Appeal decisions. The California Supreme Court has granted petitions for review of at least six Court of Appeal decisions concerning medical marijuana dispensaries, several of which involve a ban on dispensaries. On February 5, 2013, it heard oral argument in the City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc., a case involving a local ban on retail medical marijuana dispensaries. The Court has up to 90 days to issue its decision regarding whether or not local agencies can prohibit and/or regulate medical marijuana dispensaries. If the ruling does not uphold local agency control of these dispensaries, the City s current prohibition would be preempted and it would have no applicable regulations in place absent this interim urgency ordinance. California Government Code Section authorizes the City to adopt an interim urgency ordinance prohibiting any uses that may be in conflict with a contemplated general plan, specific plan or zoning proposal that the legislative body, planning commission or planning department is considering, studying or intends to study within a reasonable time. Pursuant to Section 65858, the urgency Ordinance will, upon adoption, prohibit and preclude the approval or issuance of any applicable license or entitlement for use, including, but not limited to, the issuance of a business license, building permit, conditional use permit, or other land use approval for the establishment or operation of any medical marijuana dispensary within any zone in the City s jurisdictional boundaries. It is necessary for the City to impose an interim ordinance imposing a temporary moratorium because it has a compelling interest in protecting the public health, safety and welfare of its residents and businesses, in preserving the peace and integrity of its neighborhoods, and in providing clear local regulation consistent with the requirements of Federal and State law. The adoption of the proposed Ordinance is necessary on an urgency basis because of the current and immediate threat medical marijuana dispensaries pose to the public health, safety and welfare of the City. Other California cities that have permitted the establishment of medical marijuana dispensaries have experienced negative secondary effects, including, but not limited to, burglaries, armed robberies and murders. Additionally, other negative adverse impacts of these dispensaries AGENDA ITEM # 8.3

4 Page 4 Marijuana Dispensary Urgency Ordinance February 12, 2013 include the loss of trade for neighboring businesses, loitering and increased noise and pedestrian traffic. For the reasons described above, a temporary moratorium is necessary to allow the City time to: Further study the potential impacts that medical marijuana dispensaries may have on the public health, safety and welfare; Review possible amendments to the provisions of the SMMC and the Zoning Code relating to medical marijuana and craft appropriate regulations governing dispensaries in the event the California Supreme Court ruling does not uphold local control or limits the same; and Ensure that regulations authorizing these dispensaries can be implemented in such a way as to minimize any harmful effects they might have on nearby businesses and property owners and the City s residents. Urgency moratorium ordinances are effective for a period of 45 days from the date of adoption. The provisions of the Government Code utilized for this ordinance provide for a maximum of two extensions, first for a period of ten (10) months and fifteen (15) days and then, if needed, for a final period of one (1) year, for an aggregate total of two (2) years. Staff will bring this matter back to the Council by or before the March 26, 2013 meeting for purposes of securing any necessary extension of the urgency Ordinance and its protections in the event the California Supreme Court does not uphold local control up to and including regulations prohibiting such uses. Copies of the following research materials are attached for the Council s information and consideration: News articles regarding MMD armed robberies: Orange County Register article dated June 12, 2012; Laist Daily article dated July 16, 2012; Union Tribune San Diego article dated July 28, 2012; Press Telegram article dated July 30, 2012; Los Angeles Times article dated August 1, 2012; ABC Los Angeles article dated August 3, 2012; Park Labrea News/Beverly Press article dated August 9, 2012; San Jose Mercury News article dated September 4, 2012; Press Enterprise article dated October 14, 2012; Up North Live article dated October 14, 2012; Murrieta Patch article dated November 8, 2012; Santa Cruz Sentinel article dated November 28, 2012; KSBY News article dated January 17, 2013; Fox5 San Diego article dated January 22, AGENDA ITEM # 8.4

5 Page 5 Marijuana Dispensary Urgency Ordinance February 12, 2013 News articles regarding MMD murders: Los Angeles Times article dated August 21, 2005; Bay City News article dated June 25, 2010; Huffington Post article dated June 26, 2010; U.S. News article dated June 6, 2012; The Sacramento Bee article dated November 16, News article regarding San Marcos MMD robbery: Union Tribune San Diego article dated July 8, Medical Marijuana Dispensaries and Associated Issues report presented to the California Police Chiefs Association dated July California Police Chiefs Association White Paper on Marijuana Dispensaries dated April 22, Correspondence from Attorney General Harris regarding MMDs dated December 21, 2011 and the Attorney General Guidelines for the Security and Non Diversion of Marijuana Grown for Medical Use dated August Correspondence from U.S. Attorney s Office regarding enforcement against MMDs dated October 7, 2011 and Correspondence from U.S. Attorney Duffy regarding enforcement against MMDs dated July 17, News articles regarding U.S. Attorney s Office enforcement against MMDs: Main Justice article dated July 24, 2012; Union Tribune San Diego article dated January 15, 2013; and Huffington Post article dated January 26, Fiscal Impact No fiscal impact is anticipated as a result of the attached Ordinance. Attachment(s) Proposed Urgency Ordinance Imposing Temporary Moratorium on MMDs Research Materials referenced in staff report Submitted by: Reviewed by: Helen Holmes Peak, City Attorney Jack Griffin, City Manager AGENDA ITEM # 8.5

6 ORDINANCE AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN MARCOS IMPOSING A TEMPORARY MORATORIUM ON THE ESTABLISHMENT AND OPERATION OF MEDICAL MARIJUANA DISPENSARIES WITHIN ANY ZONE IN THE CITY OF SAN MARCOS The City Council of the City of San Marcos, California, in accordance with the freedom afforded to charter cities generally, and by the Charter of the City of San Marcos specifically, and pursuant to Government Code Section 65858, does ordain as follows: SECTION 1. Findings and Purpose. The City Council finds and declares that: (a) Congress passed the Federal Controlled Substances Act ( CSA ) in The CSA prohibits the manufacture, cultivation, distribution and possession of marijuana and classifies it as a Schedule 1 drug meaning it has no accepted medical value in treatment; and (b) California law generally makes it a crime to possess and cultivate marijuana under Health and Safety ( H&S ) Code Sections and 11358, respectively; and (c) California voters approved Proposition 215 (Health and Safety Code Sections et seq.), entitled the Compassionate Use Act ( CUA ), in The intent of the CUA was to ensure that seriously ill individuals have the right to obtain and use marijuana for medical purposes when recommended by a physician. It also exempted patients and their primary caregivers from criminal prosecution or sanctions under H&S Code Sections and 11358; and (d) The California Legislature passed Senate Bill 420 (Health and Safety Code Sections et seq.) in 2003 to create the Medical Marijuana Program ( MMPA ). The MMPA established a voluntary program for the issuance of medical marijuana identification cards for qualified patients; set limits on the amount of marijuana any individual could possess; and provided an exemption from State criminal liability for persons who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes ; and (e) Although State law creates a limited affirmative defense to criminal prosecution for qualified patients and their primary caregivers, the operation of medical marijuana dispensaries as for profit is expressly prohibited, and it is difficult to determine whether or not a dispensary is operating for profit; and (f) The United States Supreme Court has continuously held that the use of medical marijuana violates Federal law under the CSA. In 2001, the Court held in United States v. Oakland Cannabis Buyers Cooperative, et al. that there was no medical necessity defense under the CSA, and therefore a medical marijuana dispensary could be enjoined from distribution and manufacturing. In 2005, the Court held in Gonzalez v. Raich that the Commerce Clause authorizes Congress to prohibit the cultivation or use of marijuana for medical purposes permitted by California law. The significance of the Raich decision is that Federal law enforcement agents may continue to enforce Federal drug laws against Californians who cultivate or use marijuana for medical purposes; and AGENDA ITEM # 8.6

7 ORDINANCE Page 2 (g) In 2006, the City added Chapter 5.54 to the San Marcos Municipal Code ( SMMC ) to prohibit the establishment of medical marijuana dispensaries in all zones within the City s jurisdictional limits; and (h) The City s Zoning Code provides that uses which are not specifically permitted by right or by conditional use permit are prohibited. As medical marijuana dispensaries are not permitted by right or with a conditional use permit, they are prohibited; and (i) The conflict between State and Federal laws relating to the ability of local agencies to prohibit and/or regulate medical marijuana dispensaries has resulted in several inconsistent California Court of Appeal decisions. The California Supreme Court has granted petitions for review of at least six of these cases concerning medical marijuana dispensaries, including, but not limited to the City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc., a case involving a local ban on retail medical marijuana dispensaries. On February 5, 2013, the California Supreme Court heard oral argument in the Riverside case and has up to 90 days to issue its determination regarding whether or not local agencies can prohibit and/or regulate medical marijuana dispensaries; and (j) In the event that the State Supreme Court ruling does not uphold local agency control of medical marijuana dispensaries, then the City s prohibition would be preempted with no regulations in place; and (k) In the past, a number of medical marijuana dispensaries have opened in the City in violation of the SMMC and the Zoning Code. Although the City pursued successful code enforcement actions against these dispensaries and was able to shutter these dispensaries, if a temporary moratorium is not imposed and the California Supreme Court does not uphold local agency control and/or regulation it is likely that potential dispensary operators will apply for the necessary permits to operate these dispensaries, and the City would be required to process and issue permits in the absence of a moratorium unless a clear zoning violation exists on other grounds; and (l) California Government Code Section authorizes local agencies, including charter cities, to adopt as an urgency measure, without following the procedures otherwise required prior to adopting a zoning ordinance, an interim ordinance prohibiting any uses that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission, or planning department is considering, studying or intends to study within a reasonable time; and (m) It is necessary for the City to impose a temporary moratorium prohibiting the approval or issuance of any applicable license or entitlement for use, including, but not limited to, the issuance of a business license, building permit, conditional use permit, or other land use approval for the establishment or operation of any medical marijuana dispensary within any zone in the City s jurisdictional boundaries to provide time for the City to further study the potential impacts that medical marijuana dispensaries may have on the public health, safety and welfare; review possible amendments to the provisions of the SMMC and the Zoning Code relating to medical marijuana and craft appropriate regulations governing dispensaries in the event the California Supreme Court ruling does not uphold local control; and to ensure that regulations authorizing these dispensaries can be implemented in such a way as to minimize any harmful effects they might have on nearby businesses, property owners, and the residents of the City; and AGENDA ITEM # 8.7

8 ORDINANCE Page 3 (n) The City Council s determination is based upon the following specific legislative findings: (1) Research shows that in the past 6 months, a number of armed robberies have occurred at medical marijuana dispensaries throughout California including, but not limited to, dispensaries in Garden Grove on June 7, 2012; Marina del Rey on July 16, 2012; Los Angeles on July 17, 2012 (dispensary security guard was shot); Los Angeles on July 20, 2012; Long Beach on July 26, 2012; San Diego on July 28, 2012; Woodland Hills on August 1, 2012; San Jose on September 3, 2012; Cathedral City on October 12, 2012; Gaylord on October 14, 2012; Murrieta on November 8, 2012; Pleasure Point on November 27, 2012; Santa Maria on January 17, 2013; and most recently, two armed robberies occurred within 90 minutes of each other at dispensaries in Imperial Beach and City Heights on January 24, (2) Murders have taken place at several medical marijuana dispensaries located in Echo Park, Hollywood, San Francisco, Sacramento, and San Leandro. (3) Between 2005 and 2006, a dispensary operating in San Marcos that obtained a business license to operate as a nutritional supplement store was burglarized several times and the operators failed to report the break-ins to law enforcement. (4) In Pacific Beach, residents who live near these dispensaries have frequent complaints about the dispensaries, including teenagers and drug addicts constantly hanging around the dispensaries. One resident reported that people leave the dispensary and immediately proceed to smoke marijuana cigarettes while walking down the sidewalk. Additionally, residents have reported seeing street dealers wait outside the dispensaries and try to take the dispensaries customers by undercutting their prices. (5) Other California cities that have permitted the establishment of these dispensaries have reported experiencing negative secondary effects and adverse impacts, including, but not limited to, an increase in crimes involving marijuana and narcotics distribution and use; an increase in other criminal activities in the vicinity of these dispensaries, such as burglaries, armed robberies, and murders; money laundering; firearm violations; loss of trade for commercial businesses located near dispensaries; and increased noise and pedestrian traffic. (6) The California Police Chief s Association has compiled extensive information, reports, news stories and statistical research detailing the negative secondary effects associated with medical marijuana dispensaries. In April 2009, it issued a White Paper stating that many violent crimes have been committed throughout California that can be traced back to the proliferation of medical marijuana dispensaries, including, but not limited to, armed robberies and murders. Other adverse secondary impacts resulting from the operation of these dispensaries include street dealers lurking around dispensaries to offer a lower price to patrons; marijuana smoking in public and in the vicinity of dispensaries; loitering and nuisances; acquiring marijuana and/or money by means of robbery of dispensary patrons; an increase in burglaries at or near dispensaries; a loss of trade for other commercial businesses located near dispensaries; the sale of other illegal drugs AGENDA ITEM # 8.8

9 ORDINANCE Page 4 besides marijuana at dispensaries; an increase in traffic accidents and driving under the influence arrests involving marijuana; and the failure of dispensary operators to report robberies to the local police department. (7) In 2008, then California Attorney General Brown issued the Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use. These AG Guidelines were intended to clarify the State s laws governing medical marijuana and provide clear guidance for patients and law enforcement to ensure that medical marijuana is not diverted to illicit markets. In 2011, current California Attorney General Harris deemed the 2008 AG Guidelines to be inadequate and stated that California law needed to be amended to address significant unsettled questions of law and policy in the areas of cultivation and distribution of medical marijuana. She also stated she was troubled by the exploitation of the State s medical marijuana provisions by gangs, criminal enterprises, and others. (8) In 2011, Federal prosecutors announced an aggressive crackdown on California medical marijuana dispensaries and stated that the Department of Justice maintains the authority to pursue criminal and/or civil actions for any violations of the CSA. As a result, four regional U.S. Attorneys for California began a coordinated prosecution effort against medical marijuana dispensaries, including sending letters to dispensary operators and landlords informing them that marijuana sales and/or distribution from the dispensaries would subject them to criminal prosecution, imprisonment, fines and asset forfeiture. (9) Actions and statements by Federal prosecutors have also challenged the authority of local agencies to enact land use controls regulating medical marijuana dispensaries, including raising concerns about the potential criminal and civil liability of local government employees, boards, commissions, and agents involved in issuing permits to dispensaries, which violates the CSA and the Federal government s efforts to regulate controlled substances. In a 2012 letter to the City Attorney of the City of Del Mar, U.S. Attorney for the Southern District of California Laura Duffy stated, State and City employees who conduct activities mandated by [an ordinance authorizing the use of medical marijuana] are not immune from liability under the CSA. (10) The U.S. Attorney s Offices located within California will continue to enforce the CSA. In 2012, U.S. Attorney for the Eastern District of California Benjamin Wagner stated that conditions on the ground have changed between 2009 and 2011, prompting the need for increased enforcement of medical marijuana dispensaries. He further stated, [w]e were alarmed by explosive growth of these large commercial operations. These huge dispensaries are focused on profits, not helping sick people. U.S. Attorney Duffy recently provided comments to the effect that her obligation and responsibility to uphold the provisions of the CSA requires her to investigate individuals and entities that may be engaging in for-profit retail sales of marijuana. SECTION 2. Definition of Medical Marijuana Dispensary or Dispensary. AGENDA ITEM # 8.9

10 ORDINANCE Page 5 (a) For purposes of this Ordinance, the terms medical marijuana dispensary or dispensary shall include, but not be limited to, any facility or location, whether fixed or mobile, that distributes, transmits, gives, dispenses, facilitates, or otherwise provides or purports to provide marijuana to one (1) or more of the following in any manner pursuant to California Health and Safety Code Sections through (the Compassionate Use Act and the Medical Marijuana Program Act), inclusive: a primary caregiver; a qualified patient; or a patient with an identification card, as those terms are identified in strict accordance with California Health and Safety Code Sections through Additionally, despite any technical differences that may exist between the terms, medical marijuana dispensary or dispensary shall be broadly extended to include cooperatives, collectives, and similar establishments where medical marijuana is possessed, cultivated, sold and/or distributed for profit pursuant to the definition provided by the Court of Appeal in City of Riverside v. Inland Empire Patient s Health and Wellness Center ((2011) 200 Cal.App.4th 885) and People v. G3 Holistic ((2011) Cal.App.4th, No. E051663). (b) For purposes of this Ordinance, the terms medical marijuana dispensary or dispensary shall not include the following uses, as long as the location of such uses is otherwise regulated by applicable law: a clinic licensed pursuant to Chapter 1 of Division 2 of the Health and Safety Code; a healthcare facility licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code; a facility licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code; a residential care facility for persons with chronic life-threatening illnesses licensed pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code; a residential care facility for the elderly licensed pursuant to Chapter 3.2 of Division 2 of the Health and Safety Code; and a residential hospice, or a home health agency licensed pursuant to Chapter 8 of Division 2 of the Health and Safety Code, as long as such use complies strictly with applicable law, including, but not limited to, California Health and Safety Code Sections through SECTION 3. Temporary Moratorium Established. For the reasons described above, the City Council has determined it is necessary to enact an interim ordinance imposing a temporary moratorium on medical marijuana dispensaries as defined in Section 2, above, pursuant to Government Code Section The City has a compelling interest in protecting the public health, safety and welfare of its residents and businesses, in preserving the peace and integrity of its neighborhoods, and in providing clear local regulation consistent with the requirements of Federal and State law. The adoption of this Ordinance is necessary on an urgency basis because of the current and immediate threat medical marijuana dispensaries and the approval of any development entitlements, business license applications and/or dispensary use permits pose to the public health, safety and welfare. No permit or other applicable license or entitlement for use, including, but not limited to, the issuance of a business license, building permit, conditional use permit, or other land use approval, shall be approved and/or issued for the establishment and/or operation of any medical marijuana dispensary within the jurisdictional limits of the City. AGENDA ITEM # 8.10

11 ORDINANCE Page 6 SECTION 4. Enforcement. The provisions of this Ordinance shall be enforced by means of civil proceedings and any other remedies provided by the SMMC, which remedies are cumulative in nature. SECTION 5. Consistency with the SMMC. Any provision of the SMMC that is inconsistent with any provision of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified only to the extent necessary to effect the provisions of this Ordinance. The City Council expressly finds that SMMC Chapter 5.54 is not inconsistent with this Ordinance. SECTION 6. Severability. If any section, sentence, clause or phrase of this Ordinance is determined to be invalid, illegal or unconstitutional by a decision or order of any court or agency of competent jurisdiction, then such decision or order will not affect the validity and enforceability of the remaining portions of this Ordinance. The City Council declares that it would have passed and adopted the Ordinance, and each section, sentence, clause or phrase thereof, regardless of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared invalid or unconstitutional. SECTION 7. Effective Date. This Ordinance shall take effect immediately upon adoption as an urgency measure. The temporary moratorium shall be of no further force and effect forty five (45) days from the date of the adoption of this Ordinance, unless, prior to its expiration, following a noticed public hearing in accordance with Government Code Section 65090, the City Council extends the Ordinance pursuant to Government Code Section SECTION 8. Publication. Within fifteen (15) days following adoption of this Ordinance, the City Clerk shall certify to the passage of this Ordinance and cause the same to be published in accordance with the provisions of State Law in a newspaper of general circulation designated for legal notices publication in the City of San Marcos. PASSED APROVED AND ADOPTED at a regular meeting of the City Council of the City of San Marcos held on the 12th day of February, 2013 by the following roll call vote: AYES: NOES: ABSENT: COUNCILMEMBERS: COUNCILMEMBERS: COUNCILMEMBERS: James M. Desmond, Mayor ATTEST: APPROVED AS TO FORM: Susie Vasquez, City Clerk Helen Holmes Peak, City Attorney AGENDA ITEM # 8.11

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