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July 3, 2022

Guest View: Town should explore other ways to boost revenue

It strikes me that the major reason for allowing cannabis dispensaries in Los Gatos would be to generate more revenue. Assuming for argument’s sake that this is correct, there are options for generating revenue other than from allowing cannabis dispensaries in town. I often throw out ideas to generate discussion. I am not wedded to these approaches, nor do I pretend to be an expert on whether these suggestions might fly legally or politically.

In my research I discovered numerous sources of information discussing methods for generating revenue for municipalities. For example, an article by McKinsey and Company, the well-known consulting firm, titled “Unlocking the full potential of city revenues” published in July 2019, indicates that a municipality has many ways in which to increase potential revenues by as much as 50%.

The article suggests increasing service fees for parking and construction permits and increasing fines and the cost of accessing city assets.

Another method for increasing revenues is to expand the frequency of surveillance and inspections for selected fine sources to maximize the detection of violations. McKinsey cites as an example, New York’s Nassau County (where coincidentally, I grew up). There, they installed red-light cameras at 86 intersections in 2016 and produced more than 500,000 tickets for motorists, which generated $48 million.

Los Gatos could also increase efforts at collection, and ramp up audit processes, to increase collection rates. McKinsey and Company mentions that some cities have utilized an amnesty program for delinquent parking tickets that waives penalties and additional fines as an incentive for motorists to pay up. It cites as an example, the City of Chicago, which instituted such a program several times over the past two decades. Each time, the city brought in $7 million to $9 million in revenue. Allowing payment plans to be used to pay delinquent fines can also increase collections.

Another possible source of additional revenue may come from assuring that the cost of renting public spaces, clean-up from such rentals and site management, are completely covered.

Perhaps the town could expand public-private partnerships for projects other than major infrastructure projects. These partnerships could be utilized to defray the costs for direct services to the community such as sports, programs and social services.

Another similar way to enhance revenues is to determine whether it is possible to increase corporate sponsorship, such as for town events or for the construction/maintenance of soccer fields.

No doubt, many other ways exist for our town to generate more revenue, in addition to those mentioned here.

To flesh out these other options it might be worthwhile to first conduct a gap analysis of the town’s revenue baseline to determine current revenue sources and then compare revenue sources against benchmarks for peer towns to identify any gaps.

We can also reach out to the Los Gatos Community Foundation, the Chamber of Commerce, and our service clubs, such as Rotary, Kiwanis and the Lions Club, and have them join in the brainstorming process of determining how best to generate more income for the town.

Regardless of whether the decision to hire a consultant to explore the economic consequences of allowing cannabis dispensaries was appropriate, it makes sense to explore other options to the revenue-generating approach. In so doing, we may conclude that the town has numerous options for implementation of unique and forward-thinking revenue streams.

Jeffrey P. Blum is a family law mediator who lives in Los Gatos.

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