Laserfiche WebLink
File Number: 16-364 <br />revenue measure that was designed to temporarily stabilize the City budget in the midst of the <br />Great Recession. Measure Z provided a reliable, voter-approved funding source for public <br />safety and other essential City services for seven years. As Measure Z was approaching <br />expiration, San Leandro voters authorized its extension at a half-cent rate for 30 years <br />through passage of Measure HH in November 2014. The primary purpose of Measure HH <br />was to preserve current City service levels for a range of public services, including public <br />safety and anti-gang programs, library programs, services for children and youth, as well as <br />various other City programs and services. In conjunction with Alameda County Measure BB, <br />Measure HH also assists with the City’s significant street and road repair needs. <br /> <br />While Measure HH allows the City to maintain existing service levels, the City continues to <br />face a growing backlog of new and emerging needs that cannot be sufficiently addressed <br />through existing revenue sources. Such needs include major renovations to aging public <br />safety infrastructure (e.g. police and fire protection facilities), deteriorating playground and <br />park equipment in need of replacement, human services challenges related to the homeless <br />and other at-risk and low income community members, and community interest in enhanced <br />artistic and cultural amenities. <br />Although local sales tax receipts this past year were robust, sales tax is an inherently volatile <br />source of revenue that will generally rise and fall in direct correlation with broader regional <br />economic cycles. Should the economy slow down or contract in future years, the City’s <br />revenue base could similarly face steep declines, thereby causing the need for future budget <br />cuts and associated disruptions in service levels. A diversified revenue base is essential to <br />maintain the sustainability of the City’s budget. <br />To address these factors, at the direction of the City Council Finance Committee, City staff <br />began exploring various potential new local sources of revenue which, per State law, require <br />voter authorization. An overview of these measures was presented to the City Council at its <br />June 20, 2016 meeting. Those measures include: <br />1) A medical cannabis business tax of up to 10% of gross receipts; <br />2) A modified business license tax that would reduce fees for small businesses, while <br />charging up to 10% of gross receipts for parking lots, and also charging $100 per 1,000 <br />square feet of real property that is used for warehouse businesses; and <br />3) An increased transient occupancy tax of up to 14%. <br />These potential revenue sources align with previously adopted City Council goals and policy <br />priorities, as outlined below. Furthermore, these new revenue sources would not directly <br />impact the vast majority of San Leandro residents, as they would be paid by a select number <br />of businesses and people from out of town. Should the Council decide to move forward with <br />the above measures, staff recommends that the City Council adopt by resolution the attached <br />ordinances which would bring forward corresponding ballot measures for local voter <br />consideration on the upcoming November 2016 ballot. <br />Overview of Potential Cannabis Business Tax <br />Now that the City has issued its first cannabis dispensary permit, and a second permit is <br />expected to be issued by the City Council on July 18, 2016, the City has an opportunity to <br />derive an important new source of revenue from these businesses. Similar to many other <br />Page 2 City of San Leandro Printed on 7/13/2016 <br />535