July 10, 2023
1. Background
2. Highlights of fiscal challenges
3. Overview of various revenue measure options
4. Cost implications
5. Factors to consider
6. Council feedback & questions
2 SL voters have authorized 6 tax measures over the past decade:
Measure Z (November 2010)
Measure HH (November 2014)
Measures OO, PP, NN (November 2016)
Measure VV (November 2020)
3 ¼ cent sales tax, 7-year sunset to expire 12/31/2017 Extended Measure Z at ½ cent rate, 30-year sunset to expire 12/31/2044 Maintained existing service levels
Small business license tax reduction, parking lot (10% of gross receipts) & warehouse tax ($100/$1,000 square feet)
Modified T.O.T (hotel tax) from 10% to 14%
Cannabis business tax (currently 5% of gross receipts) Increased real property transfer tax from $6/$1,000 to $11/$1,000 4 Unfunded deferred maintenance, capital projects, and infrastructure needs
General Fund structural deficit
Legacy pension obligations
Lean staffing levels
Public Safety Needs
- Fire station reconstruction & seismic safety
- Fire Dept. vehicles & medical equipment
5 General obligation or revenue bonds
Parcel Tax
Targeted business license tax modifications
*More expansive information presented at February 2023 Council Retreat General Obligation Bonds
Revenue Bonds
6 Require voter approval
Backed by issuer’s creditworthiness & ability to levy taxes Subject to the City’s debt limit
The City currently does not have G.O. debt
Voter approval not required
Supported by specific revenue source (e.g., lease or sewer revenue) Not subject to the City’s debt limit
7 Considered a “special tax”
Require a 2/3 super-majority vote of the electorate
Property valuation may not be a factor
Revenues dedicated towards specific purpose
Cities may include admin. guidelines or funding
priorities
8 Various Possible Structures
Flat rate per parcel
Rate based on parcel size (most common)
◦ Typically applies to both residential & commercial
Rate based on usage of public services
Sunset provisions
Possible exemptions: low-income seniors, disabled etc.
Potential Annual Revenue: approx. $3M to $6M
(based on parcel tax of approx. ~$65 to ~$140/ parcel)
To retain existing public safety service levels, shall the City adopt the following tax:
Commercial/Industrial: $16.00 per 1,000 s.f. of parcel area Residential: $78.00 per parcel
Multi-Family/Mobile homes: $46.80 per unit
Unimproved: $4.00 per 1,000 s.f. of parcel area
Non-profit/education/: $13.00 per 1,000 s.f. of parcel area places of worship
- Annual CPI adjustment
- 40% discount for low-income seniors aged 65+
- Sunset: 5.5 years
Threshold for passage: 66.7%
Election results: 50.5% YES
49.5% NO
Outcome: Measure Failed
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13 May be based on usage of City services
Gross receipts could be applied to
certain business types
Risks:
◦ May disincentivize economic investment
◦ Complex administration
May require additional staffing or consulting
services
14 Traditional Election
March 5, 2024 Statewide Primary
◦ (ineligible for revenue measure w/out fiscal emergency declaration) November 5, 2024 Presidential election
◦ (expected filing deadline: early August 2024)
15 Assumption
July – Oct 2023
July 10, 2023
Aug – Fall 2023
Late Fall 2023
Dec 2023
November 2024 Election
Phase 1 – Project Launch, Priority Setting, Assessment Due Diligence & Early Listening.
City Council Discussion – Revenue measure history, current needs, provide direction to staff
1. Launch and start-up Due Diligence. Early assessment/diagnostics, current needs, options etc.
2. Commence Communications Strategy Development (including preliminary listening)
3. Early Listening with opinion leaders. Initiate 2-way conversations re: the City’s “story of need”
4. Conduct public opinion poll. Prepare/conduct/analyze poll. Determine 2024 feasibility
5. If Feasibility Results show November 2024 election is electorally feasible, begin preparing
6. Strategic Update to City Council – Poll results and Early Listening results.
7. Communications planning for robust public engagement leading to Council Action (July 2024). 16 With Feasibility RESULTS and Council approval – prepare for Nov 2024 ballot Phase 2 – Pivot to INFORMED Public Engagement & Ballot Measure Preparation
8. Broad Public Engagement Work accelerates (informed by earlier steps of listening).
Shift to INFORMED outreach push:
• Mail + Digital
• More/continuing Opinion Leader “Strategic Conversations” + stakeholder meetings • Speakers Bureau – service clubs, civic and community groups, etc. • Accelerate digital communications (web, email, online PSAs, social media).
Core ballot measure package defined – informed by opinion research (poll) + needs, City Council, community input
9. Communications and Listening Work – CONTINUES.
10. If needed – conduct tracking poll
11. Council work session. Review tracking poll results, ballot language + “package” + Q&A.
12. Council Action calling for the election.
13/14. Final document preparation and filing.
15. Public INFO-ONLY - ballot measure facts shared with community Phase 3 – Election Window, for a November 2024 Election • Oct. 7: Ballots mailed out
• Nov. 5, 2024: Election Day!
Jan - Aug 2024
Jan – May 2024
By May 31, 2024
Late May/Early June
Late June 2024
By Mid/End of July
August 9, 2024
After Aug 9, 2024
Aug 9 – Nov 5, 2024
Type of Election Cost Per Voter* Est. Local Cost*
Standalone $19 - $21 up to ~$987K**
Standalone Vote by Mail ballot $9 - $11 up to ~$517K**
Countywide Consolidated $4 - $6 up to ~$282K**
*based upon approx. 47,000 registered San Leandro voters **excludes ballot translation costs
Other Anticipated One-Time Ancillary Costs
Public affairs consultant (exploration phase): $55,000
Public affairs public outreach ($7,500/month; Jan-Oct): $75,000 Public opinion survey ($42K each): $84,000
3 informational mailers (includes postage): $65,000
Online informational messaging: $50,000
Estimated Total: $329,000
17 Two-thirds super-majority is a very difficult threshold City resources/staff time can’t be used for advocacy
Robust “yes” campaign organization is key to success
Unified Council support is key
Public must understand the proposed tax structure
Any other competing measures on ballot?
Public perceptions regarding budget challenges
Public engagement on service level desires & priorities Community & stakeholder involvement is key
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