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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: March 15, 2016 <br />TO: Finance Committee <br />FROM: Chris Zapata, City Manager <br />BY: David Baum, Finance Director <br />SUBJECT: Discussion of Potential Local Revenue Measure for the November 2016 Ballot - <br />Transient Occupancy Tax <br />SUMMARY AND RECOMMENDATION <br />Staff recommends that the Finance Committee approve the increase in the transient occupancy <br />tax (TOT) from the current 10% to 12%. <br />BACKGROUND <br />On July 1, 1994, the City's TOT commenced. In fiscal year 2014-15, the City collected <br />$540,000 in transient occupancy taxes. The TOT is used to fund the City's basic operating costs <br />and represents less than one percent of General Fund revenues. <br />DISCUSSION <br />One of the City Council's goals is to place San Leandro on a firm foundation for long-term fiscal <br />sustainability. Increasing the TOT to 12% could enable the City to add more than $100,000 per <br />year for the City's General Fund operations. If approved by Council and at least 50% of voters <br />in November, customers who choose to stay in lodging located in San Leandro would pay an <br />additional $2 of tax on a $100 -a -night hotel bill. <br />Most cities in Alameda collect TOT at the 10% rate or less. However, three cities — Oakland <br />14%, Berkeley 12% and Emeryville 12% -- collect TOT at a higher rate. Statewide, 435 cities <br />collect TOT at the 10% rate or below. However, 91 cities collect TOT at rates greater than 10%. <br />Given the lack of available hotel rooms in San Leandro combined with the strength in the current <br />economy, the time seems right to raise the rate. This proposed tax increase would be brought to <br />voters at the November 2016 ballot along with the proposed medical cannabis tax and <br />adjustments to the City's business license tax adjustments. High voter turnout is expected due to <br />the election of the US President on the same ballot. <br />