Title
Ordinances that Amend Various San Leandro Municipal Codes to Annually Adjust the Business License Tax, EMS Tax, and Emergency Communications System Access Tax for 2022-2023
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends the City Council approve by ordinances annual adjustments to the Business License tax, EMS tax, and Emergency Communications System Access tax in accordance with the San Leandro Municipal Code. Ordinances amending the three tax schedules are presented to the City Council for adoption.
BACKGROUND
Annual adjustments to the tax rates are based on the percentage increase in the region’s Consumer Price Index (CPI). The City determines the annual change in CPI and applies this increase to the Business License tax, EMS tax, and Emergency Communications System Access tax schedules as permitted by San Leandro Municipal Code Sections 2-2-500, 2-13-140, and 2-18-210. Changes to the tax rate schedules become effective immediately upon adoption. The new rate schedules will be implemented on July 1, 2022.
DISCUSSION
Business licenses are permits allowing an organization to conduct business in the City. Organizations may be a sole proprietor, a company, or other business entity with a product or service to sell. Depending on the business classification, business license fees are a flat annual fee or a base fee and a per unit fee.
The Emergency Communications System Access tax requires subscribers to telephone service in the City to pay for improvements and operation of the 911 communication (call processing and call dispatch) system. The 911 communication system provides immediate access to emergency services. The access tax is imposed on a per line basis-made up of single access lines, trunk lines, and super trunk lines.
The emergency medical services tax allows for providing paramedic level of emergency services. The paramedic engine company program ensures residents receive timely responses of paramedics to all medical emergencies. The tax is based on benefit units with distinct land uses assigned benefit units based on demand for services generated by the use.
To accommodate increasing costs of providing services, each of the taxes is adjusted annually by the amount of the change in the Consumer Price Index (CPI). Municipal Code Section 2-2-500, Section 2-13-140, and Section 2-18-210 control the calculation of the annual CPI adjustments.
The change in CPI calculated by the Bureau of Labor Statistics for the Consolidated Metropolitan Statistical Area (CMSA) covering San Francisco-Oakland-Hayward, is applied for 2022-2023 (January through December 2021) and is a 4.2% increase. In accordance with the Municipal Code, the tax schedules for business licenses, EMS, and 911 access are adjusted by 4.2%. The unit fee for retail, wholesale/distribution (large local seller), and manufacturing will increase to $46.60 (per each owner and each employee) for business licenses, the single access line rate for 911 will increase to $2.90, and a benefit unit tax under the EMS will increase to $20.52.
Fiscal Impacts
Staff estimates the proposed CPI tax rate changes for the Business License tax rates increase revenue by $200,000. EMS and Emergency Communication Access will generate an additional $160,000 in revenue. Total estimated General Fund fiscal impact amounts to an increase of $360,000.
Summary General Fund Revenue Increase
Business License Tax ($200,000)
Emergency Medical Services Tax ($25,000)
Emergency Communication System Access Tax ($135,000)
ATTACHMENTS
• Attachment A, Ordinance Business License Fees
• Attachment B, Ordinance EMS Tax
• Attachment C, Ordinance 911 Tax
PREPARED BY
Karen Chang, Assistant Finance Director