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File Number: 18-209 <br />engine company could cost approximately $1 million per year (the City currently maintains 5 fire <br />engines and 2 ladder trucks). <br />Based on these factors, at the April 2, 2018 City Council meeting, the City Council directed city <br />staff to return with an analysis of the tasks that would be necessary to bring forward for voter <br />consideration a potential public safety parcel tax as part of the upcoming November 2018 ballot. <br />It is also important to note that given the current budgetary environment, expanded staffing for <br />either the Police or Fire Department is not feasible absent new ongoing funding or significant cuts <br />to other City services. Furthermore, even if a new parcel tax measure were to include an annual <br />cost of living adjustment, it is unlikely that annual increases in revenues from such a tax would <br />keep pace with the currently forecasted annual increases in public safety pension and retirement <br />benefits costs that would be associated with any new staffing. For both police and fire, personnel <br />costs are certain to see substantial increases over the next several years. <br />Overview of Potential Public Safety Parcel Tax & Steps Involved in Placing it on the <br />November 2018 Ballot <br />Under the California Constitution, any proposed special parcel tax requires a two-thirds (2/3) <br />affirmative vote of the electorate in order to pass, which is a significant threshold that requires <br />public support across a broad cross-section of the local electorate. Such a parcel tax is not an ad <br />valorem (value-based) property tax, but rather, is an excise tax levied on the availability and use of <br />a particular public service. Therefore, a property's value may not be a factor in determining the <br />amount of the tax that the property will pay. Furthermore, the revenues raised by the tax would be <br />dedicated towards specific purposes, such as police and fire services and capital, tracked in a <br />designated account that is separate and discrete from General Fund revenues. <br />Parcel taxes may also be structured such that the City has the option to concurrently adopt <br />general administrative guidelines in the measure that would allow for potential discounts for <br />certain at-risk populations such as residential properties owned by lower-income seniors or the <br />disabled. In addition, state law allows for modified rates for certain parcels based on their <br />anticipated use of the particular public services that would be funded by the tax. Therefore, the tax <br />rate could vary based on parcel size, or the specific use of the parcel. For example, different rates <br />could be applied to commercial properties, mixed-use properties, or vacant land. In addition, <br />parcel taxes typically include a sunset date, which would stipulate an end date for the tax that <br />could only be extended through a subsequent vote by the electorate. Therefore, before placing <br />such a measure on the ballot, it would be important for the City to fully evaluate a wide range of <br />potential tax structures, rates, sunset provisions and the associated revenues derived from each <br />option so that the City Council would be able to make an informed decision about how to structure <br />the proposed measure. <br />Potential On-Going Revenue: <br />Based on an analysis of readily accessible parcel tax data, staff estimates that a potential parcel <br />tax could be structured to generate between $3 million to $6 million annually. This very preliminary <br />estimate is based on the estimates of existing parcel tax data that was derived from 2010 census <br />data. Nevertheless, given the inherent complexity of parcel taxes and the technical expertise <br />Page 3 City of San Leandro Printed on 5/1/2018 <br />1570