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File Number: 18-209 <br />sustainability of the City’s budget. <br />As a result of the above factors, and in an effort to further diversify the City’s revenue base while <br />supporting new services, in November 2016, San Leandro voters authorized the following three <br />general purpose revenue measures: <br />1) Measure NN: A cannabis business tax of up to 10% of gross receipts (currently set by the <br />City Council at 6% of gross receipts); <br />2) Measure OO: A modified business license tax that reduced fees for small businesses, <br />while charging up to 10% of gross receipts for parking lots, and also charging $100 per <br />1,000 square feet of real property that is used for warehouse businesses; and <br />3) Measure PP: A modified transient occupancy tax of up to 14%. <br />As outlined at the April 9, 2018 City Council work session, the City continues to face a long-term <br />structural deficit that is largely a function of legacy retirement benefit obligations over which it has <br />minimal direct control. Although the City has launched various initiatives to contain costs, <br />including the Prioritization of Unfunded Liability Liquidation (PULL) program as well as the recent <br />launch of the Cost and Revenue Efficiency (CARE) Team, it is unlikely that the City’s longer term <br />financial challenges can be surmounted in the absence of some combination of ongoing <br />expenditure reductions coupled with new sources of revenue. <br />In addition to the City’s long-term operating deficit, the City also faces a number of emerging <br />needs in the realm of public safety services. For example, a number of the City’s existing fire <br />stations were constructed many decades ago and are in need of significant capital improvements <br />and structural repairs in order to bring them up to modern standards. The City’s public safety <br />building is also in need of significant repairs and upgrades. Although $9 million has been <br />appropriated in the adopted Capital Improvement Program budget for modernizing this facility, it <br />is conceivable that actual costs could exceed estimates due to the current highly-competitive <br />bidding environment. There also remains over $650,000 in funding needs for new fire department <br />vehicles and medical equipment that have been deferred from the current year budget that the <br />City will need to purchase within approximately two years. Due to recent changes in the First <br />Responder Advanced Life Support (FRALS) contract that is administered at the County level, the <br />City also faces about $350,000 in new ongoing costs towards ambulance services. Finally, the <br />City needs to identify approximately $400,000 towards the cost of new radios for the Police <br />Department to achieve compliance with the requirements of the East Bay Regional <br />Communications System Authority. <br />In addition to the above existing needs that have been identified to support current service levels, <br />there has been a desire expressed by some members of the City Council and the community to <br />explore increased staffing levels in the Police Department. The local fire fighters’ union has also <br />highlighted a desire to explore adding a fourth crew member on some or all of the local fire <br />companies that serve San Leandro. Based on current projections, it is estimated that each <br />additional Police Officer costs the City an average of $270,000 when accounting for fully-loaded <br />salary, benefits and retirement costs, and adding an additional crew member to each fire or <br />Page 2 City of San Leandro Printed on 5/1/2018 <br />1569