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9 A .- 3 <br />however, they are only a short-term (two years) part of the solution. They provide time <br />to enact long -term solutions, i.e. reduction of costs and development new revenue. <br />Future Economic Development <br />There are several development opportunities that have the potential for improving the <br />City's revenues. <br />The Abbott Labs project could generate substantial sales and use taxes depending <br />upon the business activities that reside in the project. <br />There is a real potential that the City could attract additional automobile dealerships <br />which would generate substantial sales tax. <br />The retail businesses in the cinema project have the potential for generating a <br />moderate amount of sales tax. <br />Costco has been interested in expansion which could generate additional sales tax. <br />This might involve the construction of a parking structure and the sales of gasoline. <br />• Raising Existing City Fees/Taxes to Market Level <br />Staff will be reviewing each of the City's major fees (development - related fees and <br />recreation fees) to determine if full costs are being recovered where appropriate and <br />where our fees are relative to those charged by neighboring cities. <br />Council has already conceptually approved raising the TOT rate to 10 %. Staff will be <br />bringing a report back to the City Council in the near future on the TOT of our <br />neighboring cities. <br />The City's business license tax has not been increased since June 1995 and generates <br />$1 million annually. Each 1% that this tax is increased will generate an additional <br />$10,000 per year. <br />Under the provisions of Proposition 218 which was approved by the voters in November <br />1996, both the TOT and business license tax would require a majority vote of the <br />residents. <br />Fight the State <br />Enough has been said about the state's mismanagement of its budget. The Council <br />and residents must be verbal and firm with our representatives that we must have their <br />support to prevent the state from stealing any more local revenue from cities, counties, <br />or school districts. We must only support legislators who are willing to defend local <br />revenue. <br />Five Pronaed Strateav <br />Successful resolution of the City's financial problems will require a reasoned mix of: <br />Expenditure reductions <br />• Additional revenues <br />• Use of reserves <br />• Vigorous lobbying of state representatives <br />• Using a three year time period to deal with this deficit situation <br />3 <br />