Title
Staff Report for Request for City Council Direction Regarding Polling for Potential Future Revenue Measures that Require Voter Approval
Staffreport
BACKGROUND
In November 2010, San Leandro voters authorized Measure Z, a local 1/4-cent general sales tax revenue measure that was designed to temporarily stabilize the City budget in the midst of the Great Recession. Measure Z provided a reliable, voter-approved funding source for public safety and other essential City services for seven years. As Measure Z approached expiration, San Leandro voters authorized its extension at a half-cent rate for 30 years through passage of Measure HH in November 2014. Measure HH is currently generating approximately $10 million per year in general fund revenue.
While Measure HH enables the City to maintain existing service levels, the City continues to face a growing backlog of new and emerging needs that may not be sufficiently addressed through existing revenue sources. Such needs include major renovations to aging public safety infrastructure (e.g. police and fire protection facilities), deteriorating playground and park equipment in need of replacement, growing and human services challenges related to the homeless and other at-risk and low-income communities.
Although local sales tax receipts in recent years have been robust, sales tax is an inherently volatile source of revenue that will generally rise and fall in direct correlation to broader regional economic cycles. When the economy inevitably slows down or contracts in future years, the City's revenue base could similarly face steep declines, given that approximately 40% of general fund revenues are now dependent on sales tax receipts. Such a decline could cause consideration of significant future budget cuts and associated disruptions to current service levels. A diversified revenue base is essential to maintain the sustainability of the City's budget.
As a result of the above factors, and in an effort to fu...
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