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File Number: 16-231 <br />Councilmember Lee inquired whether the 3 or fewer employees are only full time employees <br />are or part-time too. <br />Director Battenberg stated the way the Business License is currently charged it is per <br />employee and does not distinguish whether full or part time. <br />Director Baum spoke of the proposed change to the Transient Occupancy Tax. At the prior <br />Finance Committee meeting, there was discussion on raising the rate from 10% to 12% <br />however there was also a proposal to increase the rate to 14%. Increasing the rate to 14% <br />would generate an additional $200,000 per year. <br />City Manager Zapata stated that those who visit the City of San Leandro park on our streets <br />and use other services as well. The Transient Occupancy Tax is not a cost to residents. We <br />are on the San Francisco Bay and there are many amenities that people use. Increasing the <br />Transient Occupancy Tax is a way of capturing more revenue for those people that use our <br />services. <br />Councilmember Lee stated visitors will benefit as the revenue will be used to fix our roads. <br />The biggest users of hotels are businesses that often do not pay attention to the Transient <br />Occupancy Tax rate. The City of San Leandro is changing as we have a great investment in <br />Kaiser, we are building a Tech Campus and we will be building at the Shoreline. <br />Councilmember Prola also agrees with increasing the rate to 14% and believes it will pass as <br />residents recognize that the visitors are paying this tax. He anticipates that more hotels will <br />come into the City. <br />Mayor Cutter believes that 14% is too high. Would like to make sure that it is very clear that <br />the tax is being adjusted and that it is not a new tax <br />2.C. Update of Statewide Minimum Wage <br />Deputy City Manager Engelbart provided information on the statewide efforts of minimum <br />wage. The Governor signed a new statewide law that by 2022 there will be a $15/hour <br />minimum wage, with smaller business of 25 and fewer getting an extra year. Increases would <br />begin in January 2017 as the minimum wage would go from $10 to $10.50 and then increase <br />by $1 each January thereafter. Then in 2022, it will be indexed to National CPI with no <br />sunset. There are off -ramp provisions that authorize the governor to initiate a 1 year pause to <br />any of the increases, if needed, due to a negative job growth or sales receipts. <br />Councilmember Prola stated that the federal poverty level is $24,000 per year. Prola stated <br />that the Governor chose to gradually increase the minimum wage as it will cost the state <br />approximately $3.6 billion. This is due to some state workers who earn minimum wage. <br />Mayor Cutter asked about the City's responsibility to follow the State's law on minimum wage. <br />City Attorney Pio Roda stated that the City can exceed the State's rate. There is no State law <br />that required the City to do any outreach although it is highly recommended. Indicated in the <br />draft ordinance, section 4-34; 4-35-400, the City does not have a specific date as to when it <br />begins. We could have an educational period, to allow time for businesses. <br />City of San Leandro Page 5 Printed on 5110/2016 <br />