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File Number: 18-572 <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 /> <br />1)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 />2)Measure PP: A modified transient occupancy tax of up to 14% <br />3)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 />The City also continues to face a long-term structural deficit that is largely a function of legacy <br />retirement benefit obligations over which it has minimal direct control, details of which have been <br />outlined in various presentations to the City Council, including the April 9, 2018 City Council work <br />session. Although the City launched various initiatives to contain costs, including the Prioritization <br />of Unfunded Liability Liquidation (PULL) program as well as the Cost and Revenue Efficiency <br />(CARE) Team, it is unlikely that the City’s longer term financial challenges can be surmounted in <br />the absence of some combination of ongoing expenditure reductions coupled with new sources <br />of revenue. <br />In addition to the City’s long-term, projected operating deficit, the City also faces emerging needs <br />in its public safety services. For example, a number of the City’s existing fire stations were <br />constructed many decades ago and are in need of significant capital improvements and structural <br />repairs for modernization. The City’s public safety building is also in need of significant repairs <br />and upgrades. Although $9 million was appropriated in the currently adopted Capital <br />Improvement Program budget to modernize this facility, additional needs remain, including locker <br />room upgrades, expanded, secure parking, and potentially an evidence building. There also <br />remains over $650,000 in deferred funding needs for new fire department vehicles and medical <br />equipment that will need to be purchased within approximately two years. Due to recent changes <br />in the First Responder Advanced Life Support (FRALS) contract that is administered at the <br />County level, the City also faces about $350,000 annually in new costs towards ambulance <br />services. <br />In addition to the existing needs identified above to support current service levels, there is a <br />desire expressed by some City Council members and the community to explore increased <br />staffing levels in the Police Department. The local fire fighters’ union has also made known its <br />desire to explore adding a fourth crew member to the local fire companies that serve San <br />Leandro. Based on current projections, staff estimates that each additional Police Officer costs <br />the City an average of $270,000 per year when accounting for fully-loaded salary, benefits and <br />retirement costs. Adding an additional crew member to each fire or engine company could cost <br />approximately $1 million per year (the City currently maintains 5 fire engines and 2 ladder trucks). <br />It is important to note that given the current budget, expanded staffing for either the Police or Fire <br />Department is not feasible absent new ongoing funding or significant cuts to other City services. <br />Furthermore, even if a new parcel tax measure with an annual cost of living adjustment were <br />Page 2 City of San Leandro Printed on 11/13/2018