Title
Health and Human Services Agency (HHSA) and Environmental Management Department (EMD) recommending the Board:
1) Receive an economic analysis of the potential impacts of tobacco regulations from Planning and Building, included in Attachment G;
2) Receive and file a presentation (Attachment A) that outlines options for the Board’s consideration, regarding Tobacco Zoning Ordinance 5210 and Tobacco Retail License (TRL) Ordinance 5211;
3) Provide direction to staff regarding the next steps to take for Ordinance 5210 and 5211, from the options as follows:
a) Repeal both Tobacco Zoning Ordinance 5210 and TRL Ordinance 5211 and end local tobacco regulations; or
b) Repeal TRL Ordinance 5211 and make updates to Tobacco Zoning Ordinance 5210; or
c) Modify both Tobacco Zoning Ordinance 5210 and TRL Ordinance 5211; or
d) Maintain the current Tobacco Zoning Ordinance 5210 and Modify TRL Ordinance 5211; or
e) Provide other direction to staff.
FUNDING: N/A
Body
DISCUSSION / BACKGROUND:
In 2022, a parent's concern about youth exposure to tobacco prompted the Board to engage with the Tobacco Use Prevention Program (TUPP). At the same time, the 2022 National Youth Tobacco Survey revealed a youth vaping epidemic, with over 2.5 million middle and high school students using e-cigarettes and 46% of high school users vaping almost daily. In response, a town hall meeting was held on November 2, 2022, at Herbert Green Middle School, where community concerns about the location of tobacco retailers near youth-centered areas were raised. These discussions helped shape the development of Ordinance 5210 and Ordinance 5211, as part of a broader strategy to reduce youth access to tobacco products.
Prior to their passage, HHSA conducted community and retailer outreach to help guide the development of the Ordinances 5210 and 5211. On October 22, 2024, the Board approved Ordinance 5210, to add tobacco retailer land use regulations, and on November 5, 2024, the Board approved Ordinance 5211, establishing a TRL Ordinance to regulate tobacco retailers throughout the unincorporated areas of El Dorado County. The ordinances took effect 30 days after passage, with enforcement set to begin on April 1, 2025 (Legistar file 24-1371).
Following passage of these ordinances, HHSA staff performed additional outreach to community tobacco retailers to make them aware of the upcoming enforcement of these regulations, during which additional feedback was garnered. The primary feedback from retailers was a desire to revise the TRL ordinance to include a transferability clause for applicable tobacco retailers.
On March 25, 2025, pursuant to Board Policy A-3 Ordinance - New or Amended, the Board provided conceptual approval to amend Ordinance 5211 to regulate tobacco retailers. The Board directed HHSA staff, working in partnership with EMD, to return to the Board and present recommendations in addressing tobacco retailer transferability and other Board recommended modifications to Ordinance 5211, including carding age, minimum pricing guidelines, minimum pack size, aligning grandfathering provisions with the County Zoning Ordinance, the quantity of licenses granted based on population, and differentiating the number of licenses between gas stations and smoke shops.
Economic Development conducted a tax revenue impact assessment of the existing TRL Ordinance on two gas station tobacco retail locations, focusing on restrictions related to tobacco product types, package sizes, prices, and discounts. On average, tobacco products make up 30% of in-store sales revenue at gas stations. In December 2024, location A had tobacco sales of 44%, or $69,644, while location B had 31.4%, or $59,527. Under the current TRL Ordinance, location A would have experienced a loss of $35,334.27 in December 2024, and location B would have faced losses of $42,264.17.
The existing ordinance also affects sales of ancillary products (such as beverages and snacks), as well as gas and diesel taxes. Location A: 46.5% of tobacco transactions include the sale of ancillary products, and Location B: 63%. If customers who purchase tobacco and gas in-store were to go elsewhere, the County would see a decrease in gas and diesel tax revenue of at least $1,750 a month from Location A and $4,943 a month from Location B. It is unknown how many customers pay for fuel at the pump and also buy tobacco or other products inside the store.
Another retailer provided tax revenue projections for future development if the current ordinance stays in place. The retailer operates a gas and convenience store in the County and owns a site with plans to develop another gas and convenience store. Based on their existing location, this new site is expected to generate over $150,000 in sales and use tax revenue from the convenience store alone within a year. Additionally, higher property tax assessments, increased gas tax revenues, and improved employment opportunities would further enhance the value of such a development in the County.
To identify options for potential changes to Ordinance 5211, HHSA and EMD staff conducted a secondary review of State and Federal tobacco laws and other local tobacco ordinances. HHSA, EMD and Planning and Building Department staff also met with local retailers to understand the likely impacts of the existing TRL Ordinance, including assessing the economic impacts to the County. The outcomes of this review process indicate significantly varied potential impacts to the County and the community depending on the selected combination of changes. As such, HHSA and EMD recommend that the Board provide direction regarding the next steps to take for Tobacco Zoning Ordinance 5210 and/or TRL Ordinance 5211 following the presentation.
ALTERNATIVES:
The Board may decide to provide direction to staff on Tobacco Zoning Ordinance 5210 and TRL Ordinance 5211 differing or in any combination thereof from the presented options.
PRIOR BOARD ACTION:
1) 12/05/23, 23-1992, HHSA/Planning & Building, Resolution of Intention to Amend Zoning Code (Title 130)
2) 01/30/24, 24-0022, HHSA/Planning and Building Urgency Ordinance, Tobacco Retailer Businesses
3) 03/12/24, 24-0083, HHSA/P&B - TUPP Urgency Ordinance
4) 10/22/24, 24-1371 (V.1), HHSA/Planning/EMD - Tobacco Zoning & Tobacco Retail
License Ordinances
5) 11/05/24, 24-1371 (V.2), HHSA/Planning/EMD - Tobacco Zoning & Tobacco Retail
License Ordinances
6) 03/25/25, 25-0336, HHSA/EMD TRL Ordinance 5211 Conceptual Approval for Revisions
OTHER DEPARTMENT / AGENCY INVOLVEMENT:
N/A
CAO RECOMMENDATION:
In consideration of the County’s already strained staffing resources and significant concerns with slowing discretionary revenues, the Chief Administrative Office recommends the Board repeal the Tobacco Retail License Ordinance 5211 and make updates to the zoning ordinance to add a population limit and sensitive and same use restrictions which would only apply to smoke shops. Smoke shops would be defined as retailers with 30% of floor/display space being tobacco products. This recommendation would reduce the staff resources needed for the program, limit the financial impacts to the County, limit the impacts of the program on tobacco retailers that are not smoke shops, and limit the growth of smoke shops in the unincorporated areas of the County, which was the Boards’ primary concern for the tobacco regulation.
FINANCIAL IMPACT:
There is no financial impact associated with obtaining Board direction and/or conceptual approval to amend the ordinance presented in this agenda item.
CLERK OF THE BOARD FOLLOW UP ACTIONS:
N/A
STRATEGIC PLAN COMPONENT:
N/A
CONTACT:
Olivia Byron-Cooper, MPH, Director, Health and Human Services Agency
Jeffrey Warren, REHS, Director, Environmental Management Department
Kyle Fliflet, MIPH, Acting Public Health Director, Health and Human Services Agency