"The City With a Heart"
Rico E. Medina, Mayor
Sandy Alvarez, Vice Mayor
Tom Hamilton, Councilmember, District 2
Michael Salazar, Councilmember, District 3
Marty Medina, Councilmember, District 4
AGENDA
SAN BRUNO CITY COUNCIL SPECIAL MEETING
July 14, 2026
5:30 PM
IN PERSON* MEETING LOCATION
San Bruno Recreation and Aquatic Center, Community Room 251 City Park Way
San Bruno, CA 94066
*Please turn off all electronic devices before the start of the meeting to prevent disruptions*
TELECONFERENCE MEETING CONNECTION
Zoom Link
https://sanbrunocagov.zoom.us/j/89019288693?
pwd=ZHBdnahfjirxAiqqkQXhfykMbwmimC.1
Phone Line: 16465588656
Webinar ID: 890 1928 8693
Webinar Password: 305107
PUBLIC COMMENT: In person attendees who want to provide public comment, will be asked to fill out a speaker card and turn it into the City Clerk. Public comment may also be emailed to [email protected]. Comments received via email will not be read aloud during the meeting. Under the Brown Act, the City is only obligated to allow public comment on topics that are within the subject matter jurisdiction of the City Council. If a speaker is commenting on a topic that is not within the City Council’s subject matter jurisdiction, the City reserves the right to pause the timer and ask the speaker to comport his or her comments consistent with the Brown Act’s requirements. If the speaker is unable to do so, the City reserves the right to consider the speaker disruptive and remove them from the meeting.
ACCESSIBILITY: In compliance with the Americans with Disabilities Act, individuals requiring special accommodations or modifications to participate in this meeting should contact the City Clerk’s Office 48 hours prior to the meeting at (650) 6167061 or [email protected]
.
PUBLIC RECORDS: Any public writings related to an open session item on a regular meeting agenda and distributed by the City to at least a majority of the City Council less than 24 hours prior to this meeting are available for public inspection at the City Clerk’s Office at City Hall located at 567 El Camino Real, San Bruno, California during normal business hours. In addition, the City may post such documents on the City website at www.sanbruno.ca.gov/AgendaCenter .
1. CALL TO ORDER
2. ROLL CALL
3. CLOSED SESSION
Public comment will be requested after each item in this section a. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION
(Paragraph (1) of subdivision (d) of Section 54956.9)
Name of case: Gary Otterstedt v. City of San Bruno, et al., San Mateo County Superior Court Case No. 26CIV01761
b. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(paragraph (1) of subdivision (d) of Section 54956.9)
Name of Case: City of San Bruno and Walmart.com USA, LLC, v California Department of Tax and Fee Administration (San Mateo County Superior Court Case No. 23CIV05021)
c. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: One potential case
4. STUDY SESSION
Public comment will be requested after each item in this section a. 2026 Ballot Revenue Measure: Business License Tax Options
5. ADJOURNMENT – The next Regular City Council Meeting will be held on July 14, 2026 at 7:00 pm.
POSTING: I declare a copy of this agenda was posted at City Hall, 567 El Camino Real, San Bruno, among other locations in the city limits of San Bruno, on July 9, 2026 by 8:00 pm. 1 of 9
Name of Case: City of San Bruno and Walmart.com USA, LLC, v California Department of Tax and Fee Administration (San Mateo County Superiour Court Case No. 23CIV05021)
"The City With a Heart"
Rico E. Medina, Mayor
Sandy Alvarez, Vice Mayor
Tom Hamilton, Councilmember, District 2
Michael Salazar, Councilmember, District 3
Marty Medina, Councilmember, District 4
AGENDA
SAN BRUNO CITY COUNCIL SPECIAL MEETING
July 14, 2026
5:30 PM
IN PERSON* MEETING LOCATION
San Bruno Recreation and Aquatic Center, Community Room 251 City Park Way
San Bruno, CA 94066
*Please turn off all electronic devices before the start of the meeting to prevent disruptions*
TELECONFERENCE MEETING CONNECTION
Zoom Link
https://sanbrunocagov.zoom.us/j/89019288693?
pwd=ZHBdnahfjirxAiqqkQXhfykMbwmimC.1
Phone Line: 16465588656
Webinar ID: 890 1928 8693
Webinar Password: 305107
PUBLIC COMMENT: In person attendees who want to provide public comment, will be asked to fill out a speaker card and turn it into the City Clerk. Public comment may also be emailed to [email protected]. Comments received via email will not be read aloud during the meeting. Under the Brown Act, the City is only obligated to allow public comment on topics that are within the subject matter jurisdiction of the City Council. If a speaker is commenting on a topic that is not within the City Council’s subject matter jurisdiction, the City reserves the right to pause the timer and ask the speaker to comport his or her comments consistent with the Brown Act’s requirements. If the speaker is unable to do so, the City reserves the right to consider the speaker disruptive and remove them from the meeting.
ACCESSIBILITY: In compliance with the Americans with Disabilities Act, individuals requiring special accommodations or modifications to participate in this meeting should contact the City Clerk’s Office 48 hours prior to the meeting at (650) 6167061 or [email protected]
.
PUBLIC RECORDS: Any public writings related to an open session item on a regular meeting agenda and distributed by the City to at least a majority of the City Council less than 24 hours prior to this meeting are available for public inspection at the City Clerk’s Office at City Hall located at 567 El Camino Real, San Bruno, California during normal business hours. In addition, the City may post such documents on the City website at www.sanbruno.ca.gov/AgendaCenter .
1. CALL TO ORDER
2. ROLL CALL
3. CLOSED SESSION
Public comment will be requested after each item in this section a. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION
et al., San Mateo CountySu
4. STUDY SESSION
Public comment will be requested after each item in this section a. 2026 Ballot Revenue Measure: Business License Tax Options
5. ADJOURNMENT – The next Regular City Council Meeting will be held on July 14, 2026 at 7:00 pm.
POSTING: I declare a copy of this agenda was posted at City Hall, 567 El Camino Real, San Bruno, among other locations in the city limits of San Bruno, on July 9, 2026 by 8:00 pm. 2 of 9
c. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: One potential case
City Council Agenda Item
Staff Report
CITY OF SAN BRUNO
DATE: July 14, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Alex D. McIntyre, City Manager
PREPARED BY: Joseph D. Toney, Assistant City Manager
SUBJECT: 2026 Ballot Revenue Measure: Business License Tax Options BACKGROUND:
At the June 23, 2026 Study Session on potential November 2026 ballot measures, the City Council received a presentation on two separate revenue measure options: a commercial parcel tax and a Business License Tax (BLT) modernization measure. The Council provided direction to proceed with a BLT measure of a variable gross receipts rate structure based on business categories (referred to as “Model 2”) instead of a single gross receipts rate based on a uniform flat rate (Model 1). Staff noted at the June 23 meeting that additional analysis would be needed to refine the Model 2 rate structure and develop complete revenue projections by business category.
On June 30, 2026, staff met with the Revenue Subcommittee to review detailed revenue modeling prepared by the City’s consultant, HdL Companies (HdL), for Model 2 rate options.
The Subcommittee reviewed four variations for comparison (Model 1, and Options 2A, 2B, and 2C) and ultimately recommended a revised rate structure for recommendation to the full City Council. This staff report presents the Subcommittee’s findings and recommended rate model for Council consideration.
DISCUSSION:
Current Business License Tax Structure
The City currently levies its Business License Tax pursuant to Chapter 3.16 of the San Bruno Municipal Code. The general rate schedule codified in Section 3.16.010, applicable to most businesses with a fixed place of business, is based on annual gross receipts and has not been comprehensively updated in more than 25 years:
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July 14, 2026
Annual Gross Receipts Annual Tax
Less than $75,000 $75.00 flat rate
$75,000 – $100,000 $100.00 flat rate
Over $100,000 $110.00, plus $5.25 per additional $5,000 or fraction thereof up to $500,000
Over $500,000 $530.00, plus $4.00 per additional $5,000 or fraction thereof up to $1,000,000
Over $1,000,000 $930.00, plus $2.75 per additional $5,000 or fraction thereof up to $5,000,000
Over $5,000,000 $3,130.00, plus $1.65 per additional $5,000 or fraction thereof The current schedule reflects a regressive marginal rate structure in which the effective tax rate per dollar of gross receipts decreases significantly as a business’s revenue grows. The schedule does not distinguish between business categories as all (e.g. general retailers, professional services firms, contractors, property managers) are taxed at the same declining- marginal-rate schedule regardless of their business type, margins, or service demands on City infrastructure. The current schedule generates approximately $2.7 million annually in business license tax general fund revenue.
Peer Jurisdiction Comparison
Staff updated the peer jurisdiction analysis presented at the June 23 Study Session to include Millbrae and Daly City. The table below compares business license tax revenues and structures among some Bay Area cities using State Controller’s Office data (FY 2024) and U.S. Census population figures:
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Honorable Mayor and Members of the City Council
July 14, 2026
City Population* Business
Count
BLT
Revenue**
Revenue/
Capita
Revenue/
Business
Last
Modified
Tax Basis Cap?
Brisbane 4,661 983 $5,390,411 $1,156.49 $5,483.63 2023 Gross Receipts
Y
Emeryville 13,314 2,600 $9,527,818 $715.62 $3,664.55 1993 Gross Receipts
Y
Sausalito 6,856 2,000 $2,142,427 $312.49 $1,071.21 2019 Gross Receipts
N
Richmond 112,735 5,200 $14,463,504 $128.30 $2,781.44 2021 Gross Receipts
N
Tracy 96,609 4,700 $8,807,071 $91.16 $1,873.84 2023 Gross Receipts
Y
Daly City 101,424 2,500 $6,680,000 $65.86 $2,672.00 2004 Gross Receipts
N
Burlingame 30,513 8,400 $1,909,822 $62.59 $227.36 2023 Gross Receipts
Y
SAN
BRUNO
42,152 4,200 $2,199,484 $52.18 $523.69 1999 Gross
Receipts
N
South San
Francisco
64,601 6,500 $3,175,739 $49.16 $488.58 2025 Per Employee N San Carlos 29,420 4,300 $1,342,096 $45.62 $312.12 > 10 years Per Employee N Millbrae 22,689 1,916 $552,000 $24.32 $288.10 1976 Hybrid Y Hayward 159,770 12,300 $3,782,779 $23.68 $307.54 > 10 Years Per Employee N *Population: U.S. Census. **BLT Revenue: State Controller’s Office, FY 2024.
San Bruno generates $52.18 in business license tax revenue per capita, which is moderate to low of the identified Bay Area jurisdictions. With a business license ordinance that has had minimal updates since 1999, San Bruno lags behind cities that have recently modernized their schedules. Daly City, a comparable gross-receipts-based jurisdiction, generates $65.86 per capita on a rate of $1.10 per $1,000 of gross receipts (last updated 2004); Burlingame, updated in 2023, generates $62.59 per capita. Millbrae, whose ordinance dates to 1976, generates only $24.32 per capita and illustrates how an outdated rate schedule erodes revenue relative to peers over time.
June 23, 2026 Study Session — Models Presented to Council The following two models were presented to the City Council at the June 23 Study Session as the primary structural approaches for a modernized BLT:
Model 1 — Uniform Flat Rate
Model 1 applies a single uniform rate of $1.00 per $1,000 of gross receipts above the $75,000 flat-base threshold to all business types, regardless of category. This model is simple to administer and explain but does not differentiate between business types with materially different revenue profiles, margins, or demands on City services.
Model 2 — Business Category Rate Structure
Model 2 applies different per-$1,000 gross receipts rates to different business categories,
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Honorable Mayor and Members of the City Council
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consistent with a “3-2-1” tiered approach common in other California jurisdictions. The version presented at the June 23 Study Session reflected the following category rates:
Business Category Rate per $1,000 Gross Receipts
(above $75,000)
Flat Base (up to $75,000)
Contractor $2.00 $75.00
General Retail/Administrative
Headquarters
$1.00 $75.00
Professional and Advanced $3.00 $75.00
Property Rental $3.00 $75.00
Services/Other $2.00 $75.00
The Categories are generally defined as follows:
Contractors: These are persons or firms that are carrying on the business of a contractor, subcontractor, or builder, particularly the construction or repair of any buildings. Examples include, but are not limited to construction, plumbing, HVAC, etc.
General Retail/Administrative headquarters: These are retailers, restaurateurs, and other general businesses. Administrative headquarters means the principal place of business where the executive, administrative, or management functions of a business are primarily conducted.
Professional and Advanced: These businesses offer services that require rigorous training through higher education or vocational institutions that certify the complete acquisition of skills and the ability to provide such professional services. This also includes businesses that can be considered "Advanced Services," such as those in the research and development and scientific fields. Examples include, but are not limited to, a doctor’s office, a law office, a consulting firm, etc.
Property Rental: Although listed separately, this category includes any business that leases, rents, or provides use of real property to another individual or entity for compensation.
Examples include, but are not limited to, commercial leasing, residential rental, parcel leasing, hoteliers, etc. The City could also include language and rates for taxing short-term rentals in this category.
Services/Other: This sector offers services that require minimal to no higher education or training. It is also the default category for any business that is not explicitly defined in one of the other five categories. Examples include, but are not limited to, hair stylists, gardeners, nail salons, etc.
The City Council directed staff to proceed with Model 2 and refine the rates and structure.
June 30, 2026 Revenue Subcommittee Meeting — Options Reviewed On June 30, 2026, staff and the City’s tax consultant, HdL, presented the Revenue Subcommittee with detailed revenue modeling for four options: Model 1 (retained for comparative reference), and three variations of Model 2 (Options 2A, 2B, and 2C). Revenue projections are based on HdL’s analysis of current City business license filings, with businesses
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Honorable Mayor and Members of the City Council
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assigned to the five categories in the proposed framework. The table below summarizes the per $1,000 rates proposed for each option:
Business Category Model 1
(per $1,000)
Option 2A
(per $1,000)
Option 2B
(per $1,000)
Option 2C
(per $1,000)
Recommended
(per $1,000)
Contractor $1.00 $2.00 $1.50 $1.50 $2.00
General Retail/Administrative
Headquarters
$1.00 $1.00 $1.00 $1.00 $1.00
Professional and Advanced $1.00 $3.00 $2.00 $2.00 $2.00 Property Rental $1.00 $3.00 $2.00 $10.00 $3.00
Services/Other $1.00 $2.00 $1.50 $1.50 $1.50
The key distinctions among the three Model 2 options are:
•Option 2A: Moderate rates across all categories, commonly referred to as a “3-2-1” model. Produces the highest revenue among the options.
•Option 2B: Reduces all the categories relative to 2A, reflecting a moderate difference from a flat rate in Model 1.
•Option 2C: Retains the lower rates of 2B, but increases Property Rental to $10.00 per $1,000, producing the highest total revenue of any option but raising equity and competitiveness concerns regarding rental property businesses.
Revenue Projections by Option
The following table presents HdL’s revenue projections by business category and option, based on current gross receipts filing data for the 3,443 active San Bruno businesses assigned across the five categories:
Business
Category
FY 2026
Current Model 1 Option 2A Option 2B Option 2C Recommended Contractor $109,000 $201,000 $299,000 $250,000 $250,000 $299,000 General Retail/
Administrative
Headquarters
$2,270,000 $5,734,000 $5,734,000 $5,734,000 $5,734,000 $5,734,000 Professional and
Advanced
$157,000 $229,000 $608,000 $418,000 $418,000 $418,000
Property Rental $76,000 $117,000 $275,000 $196,000 $830,000 $275,000 Services/Other $107,000 $123,000 $208,000 $166,000 $166,000 $166,000 TOTAL $2,719,000 $6,404,000 $7,124,000 $6,764,000 $7,398,000 $6,892,000 Net New Revenue $3,685,000 $4,405,000 $4,045,000 $4,679,000 $4,173,000 Source: HdL Companies revenue modeling based on City of San Bruno business license filing data. Figures rounded to nearest thousand.
Subcommittee Recommendation — Revised Model 2
After reviewing all four options, the Revenue Subcommittee recommended a revised rate structure that it characterized as a more moderate approach relative to the options presented.
The Subcommittee’s recommended rates are as follows:
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July 14, 2026
Business Category Recommended Rate per $1,000
Gross Receipts (above $75,000)
Flat Base (up to $75,000)
Contractor $2.00 $75.00
General Retail/Administrative
Headquarters
$1.00 $75.00
Professional and Advanced $2.00 $75.00
Property Rental $3.00 $75.00
Services/Other $1.50 $75.00
Compared to the Model 2 version presented at the June 23 Study Session, the Subcommittee’s recommendation reduces the Professional and Advanced rate from $3.00 to $2.00 and the Services/Other rate from $2.00 to $1.50, while maintaining Contractor at $2.00, General Retail/ Administrative Headquarters at $1.00, and Property Rental at $3.00. These adjustments were made to moderate the impact on professional services firms and service-oriented businesses, which the Subcommittee identified as more rate-sensitive than contractors or property rental operations. Property rental businesses, by contrast, tend to be owned by non-local investors rather than community-based operators, making a higher rate more appropriate for that category. Additionally, certain business types in the General Retail/Administrative Headquarters category, such as restaurants and clothing stores, are already subject to sales tax and typically operate on thinner profit margins. Maintaining the lower rate of $1.00 per $1,000 for these businesses reflects the City’s commitment to ensuring San Bruno remains a welcoming and financially viable environment for small and locally owned businesses.
The recommended rate structure aligns closely with Option 2A with the Property Rental rate retained at $3.00 (rather than the $10.00 in Option 2C) and moderate reductions to Professional and Services rates. Based on HdL’s modeling, the recommended structure is projected to generate approximately $6.9 million in total annual BLT revenue, representing approximately $4.2 million in net new annual General Fund revenue above the current $2.7 million baseline.
The proposed rate structure does not affect all sections of Chapter 3.16. Specifically, Section
3.16.080 (Gambling Clubs) and Section 3.16.180 (Airport Parking Facilities) would remain unchanged under this measure, as these business types are governed by specialized rate schedules that are not part of this modernization effort.
The Subcommittee further noted that the recommended rate structure positions San Bruno competitively relative to peer jurisdictions while targeting a revenue level that meaningfully addresses the City’s structural General Fund gap. A primary example is Daly City ($1.10 per $1,000, and $5.50 for property rentals), which serves as the most directly comparable gross- receipts-based jurisdiction in San Mateo County.
Council Direction
Staff requests that the City Council receive this report and provide direction on the rate model, confirming the Subcommittee’s recommended revised Model 2 rate structure as the preferred approach to be incorporated into a ballot measure ordinance; or direct staff to return with a different rate structure. If the City Council confirms direction to proceed with a BLT modernization measure for the November 2026 ballot, staff will return at the July 28 City Council meeting with a resolution and ordinance for adoption.
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Next Steps
Following tonight’s meeting should the City Council direct staff to return with a resolution introducing the ballot measure, staff will return to the July 28 Regular City Council Meeting with a resolution to place the measure on the November 3, 2026, General Election Ballot. The resolutions must be adopted and finalized at the July 28 meeting to submit the measure to the County by the deadline of August 7, 2026.
Date Item
July 28, 2026 City Council Adopts Resolution Calling the Election August 7, 2026 FINAL DEADLINE (88 days before election) August Argument & Rebuttal Windows
September County Ballot Production
October Ballots Mailed; Outreach Continues
November 3, 2026 Election Day
FISCAL IMPACT:
There is no direct fiscal impact associated with City Council consideration of this study session item.
Based on HdL’s revenue modeling, the Subcommittee’s recommended rate structure is projected to generate approximately $4.2 million in net new annual General Fund revenue. The County of San Mateo manages the election and will recoup the associated costs from the City as estimated in the table below, ranging from $118,000 to $198,000. The City may have additional translation and legal costs that will be nominal and that the City will expend directly.
On the Ballot $/Registered
Voters Low
$/Registered
Voters High County Low County High
Mayor/Council Seats only $ 4.52 $ 5.42 $ 118,000.00 $ 141,600.00 Mayor/Council +1 Measure 5.05 6.06 131,000.00 157,200.00 Mayor/Council +2 Measures 5.57 6.69 145,000.00 174,000.00 Mayor/Council +3 Measures 6.48 7.78 165,000.00 198,000.00 M easures are 5 pages per in the V oter Information Pamphlet ENVIRONMENTAL IMPACT:
The action is not a project subject to CEQA. City Council’s action is not considered a “Project” per CEQA Guidelines and therefore no further environmental analysis is required.
RECOMMENDATION:
Receive the 2026 Ballot Revenue Measure: Business License Tax Options Report and Provide Direction Confirming the Revenue Subcommittee’s Recommended Model 2 Rate Structure.
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