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File Number: 15-463 <br />union that they may choose. <br />Community Benefits & Financial Contributions to the City's General Fund <br />HSL commits to providing a robust community benefits program. This program would consist <br />of a voluntary donation of 4% of the dispensary's annual gross sales receipts towards a <br />community benefits fund, approximately 80% of which will be donated to local San Leandro <br />non-profit organizations through a community grants program. The program would be <br />overseen by an oversight board (yet to be created) chosen by HSL, where over half of the <br />members would be comprised of San Leandro residents. The task of the HSL community <br />benefit oversight board would be to review and recommend to HSL applications for funding <br />from local San Leandro -based community -serving non-profit organizations. Award allocations <br />would be made on a semi-annual basis. <br />According to conservative revenue projections, total contributions to a San Leandro <br />Community Benefits Fund could reach approximately $191,200 in 2016, and approximately <br />$287,200 in 2017. The remaining 20% of this fund would be used to provide a multitude of <br />HSL in-house programs for the collective's members and patients, such as: free to members <br />and patients holistic health services like acupressure, acupuncture, massage, yoga, <br />chiropractic, and ayurvedic healing; a care package program offering free or low-cost <br />medicine to patients who have demonstrated financial need; and an outreach program <br />targeted toward special needs patient groups, including peer counseling sessions, harm <br />reduction drug abuse counseling, and peer support groups for new patients, senior citizens, <br />parents of juvenile medical cannabis patients, and patients with various specific medical <br />conditions. <br />HSL will also voluntarily commit to donate 1 % of its gross receipts to the City of San Leandro <br />each year. Preliminary estimates indicate that this contribution would be approximately <br />$47,800 in 2016 and $71,800 in 2017. Additionally, HSL has committed to voluntarily <br />contributing 10% of its net income to the City of San Leandro, which preliminary estimates <br />indicate would be approximately $14,000 in 2016 and $45,000 in 2017. These voluntary <br />commitments have been incorporated as conditions of approval in the attached resolution. <br />Future Tax Discussion <br />The above financial commitments were negotiated with HSL in light of the fact that the City of <br />San Leandro does not presently have in place a gross receipts tax on sales of medical <br />cannabis within San Leandro, which is commonplace in other California jurisdictions that have <br />allowed dispensaries to operate. Because HSL developed its business model and financial <br />projections based on this assumption, the conditions of approval mandating the <br />aforementioned commitments would be nullified if San Leandro voters approved a measure to <br />impose such a tax. Nevertheless, the City Manager recommends that the City Council <br />continue to explore such a gross receipts tax further. <br />Some examples of jurisdictions with such taxes in place, and their specified rates, are outlined <br />below: <br />CitV Tax Rate <br />Berkeley 2.5% gross receipts <br />Oakland 5% gross receipts <br />Los Angeles 6% gross receipts <br />City of San Leandro Page 6 Printed on 9/212015 <br />