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File Number: 21-082
<br />Retail food establishments means a retail store in the City of San Leandro that is either:
<br />a) over 15,000 square feet in size and that sells primarily household foodstuffs for offsite consumption,
<br />including the sale of fresh produce, meats, poultry, fish, deli products, dairy products, canned foods,
<br />dry foods, beverages, baked foods and/or prepared foods. Other household supplies or other
<br />products shall be secondary to the primary purpose of food sales;
<br />b) over 85,000 square feet and with 10% of its sales floor area dedicated to sale of non-taxable
<br />merchandise including, but not limited to, the sale of fresh produce, meats, poultry, fish, deli
<br />products, dairy products, canned foods, dry foods, beverages, baked foods and/or prepared foods;
<br />or
<br />c) a drug retail store in the City of San Leandro that sells a variety of prescription and nonprescription
<br />medicines and miscellaneous items, including but not limited to drugs, pharmaceuticals, sundries,
<br />fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods,
<br />beverages, prepared foods, and other merchandise.
<br />Attached to this staff report is a preliminary draft list of approximately 19 San Leandro businesses that
<br />would most likely be impacted by the draft ordinance. Staff estimates these businesses employ
<br />approximately 2,105 workers in total who would be eligible for the proposed enhanced pay. It is
<br />important to note that this is a preliminary estimated list, so it’s possible that the ordinance’s provisions
<br />would not necessarily be limited to only those identified businesses and their employees.
<br />Staff also offers for the City Council’s consideration that there likely exists at least one, if not other, local
<br />family-owned businesses in San Leandro that operate in a franchise framework associated with a
<br />larger nationwide company. As a result of that franchise association, they would most likely not be
<br />exempted from the ordinance as currently written.
<br />The requested proposal comes on the heels of similar ordinances having been adopted by the cities of
<br />Long Beach, Montebello, and Oakland, California. It is staff’s understanding that the California Grocers
<br />Association (CGA) has filed legal challenges to those ordinances, including requests for a temporary
<br />restraining order and preliminary injunction.
<br />In summary, the proposed urgency ordinance represents a significant policy decision for the City
<br />Council and the public to consider.
<br />Fiscal Impacts
<br />Based on the high likelihood of litigation being filed against the City by the CGA and/or potentially
<br />impacted businesses immediately subsequent to adoption of this ordinance, it is reasonably
<br />foreseeable that if the ordinance is adopted the City will incur significant legal costs to defend the
<br />ordinance, and potential exposure to payment of attorneys’ fees and costs if the CGA’s litigation is
<br />successful. Preliminary estimates provided by the City Attorney’s office estimate costs of defense all
<br />the way through hearings but not through appeals could be in the range of $25,000 to $75,000.
<br />Payment of CGA’s attorneys’ fees could be significantly higher; preliminary estimates are that they
<br />would be well over $100,000. Funds to offset the costs of such litigation were not appropriated in the
<br />adopted FY 2020-2021 City budget, nor would such costs be eligible for coverage under the City’s
<br />existing program of self-insurance. As such, any related expenditures would likely need to be paid by
<br />drawing down from the City’s undesignated General Fund reserves.
<br />ATTACHMENT(S)
<br />Attachment to Resolution
<br />·Preliminary Draft List of Potentially Affected San Leandro Retail Food Establishments
<br />·Draft Resolution and Emergency Ordinance
<br />Page 2 City of San Leandro Printed on 2/11/2021
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