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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: March 15, 2016 <br />TO: Finance Committee <br />FROM: Katie Bowman, Business Development Specialist <br />SUBJECT: Business License Update Discussion <br />SUMMARY AND RECOMMENDATION <br />Staff requests that the Finance Committee provide feedback on proposed updates to business <br />license fees related to small businesses, as well as warehouse and wholesale/distribution centers. <br />DISCUSSION <br />As a part of the current business license update process, Business Development staff are <br />evaluating potential changes to the business license fee structure for small businesses, <br />warehouses, and wholesale/distribution businesses. The goal of these updates is to lessen the <br />burden of business license fees for the smallest businesses, as well as make the fees for large <br />warehouses and distribution centers better reflect their impact and the City's policy goals. <br />Existing Business License Fees <br />Base fee of $125 per business, plus: <br />Retail, Manufacturing, Wholesale/Distributors, Utility $37.52 per employee <br />Service (incl Warehouse), Contractor, Rec/Entertainment $75.14 per employee <br />Professional $93.96 per employee <br />Proposed changes are: <br />1. Waive the per -employee fee for businesses with 3 or less employees (they will continue to <br />pay the base fee of $125) <br />o Results in an estimated $300,000 reduction in business license fee revenue <br />2. Base the fees for warehouses and wholesale/distribution centers on building square footage <br />rather than number of employees, charging $100 per thousand square feet <br />o Results in an estimated $300,000 - $500,000 increase in business license fee revenue <br />Small Businesses: <br />The majority of businesses licensed by the City are small, with around 2,500 having 3 or less <br />employees (excluding property rental businesses and businesses located outside of San <br />Leandro). In speaking with these small businesses, staff often hears that business license fees are <br />onerous, particularly as compared with some surrounding communities that provide <br />accommodations for small businesses. In general, these businesses currently pay $37 - $93 per <br />