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Page 2 of 9 sources such as grant funds to support services and programs, although grant funds are restricted for specific purposes. Over the years the City Council has implemented a number of cost-saving measures to improve operational efficiency and reduce costs, including merging departments and operations, offering less generous pension and retiree medical benefits, implementing energy and water efficiency projects, and establishing a pension trust to pay down the City's unfunded liability. Like other communities, the City has also deferred infrastructure repair and replacement to balance the General Fund operating budget and support the delivery of services. Limited funding for infrastructure upkeep has resulted in significant deferred maintenance over time. Overall, the City needs to expand and/or identify new revenue sources to keep pace with expense growth while also continuing to reduce and manage expenses to address the issue. At its August 15, 2023, meeting, the City Council received an overview of community needs, potential revenue options, and the process and timeline for election-based ballot measure development. The City Council provided feedback and authorized staff to conduct a public opinion poll to seek input from the community regarding Pleasanton’s service priorities and identify potential revenue options. At its December 5, 2023, meeting, the City Council received the polling results summarized below. • Pleasanton voters continue to be positive about City services and City government. • Voters prioritize basic City services such as 9-1-1 emergency response, police, fire, street maintenance, infrastructure maintenance, and parks. • Sales tax and hotel tax revenue measures are potentially viable; however, more education and community outreach is necessary to help the community understand the City’s funding needs. Based on the community’s response, the City Council directed staff to launch a comprehensive outreach plan to engage, inform, and listen to input from residents and stakeholders on City needs and a proposed plan to meet those needs. If there is support from the community for a revenue measure, the intent is to place a ½ cent sales tax measure on the ballot for the November 5, 2024, General Election. While staff is working with the community to assess the viability of a sales tax measure, the City is also developing additional cost containment strategies. The General Fund forecast scenarios that are discussed below will help the community better understand the assumptions that were used to develop the long-term projection. The timeline for cost reduction will provide a roadmap for cost containment and inform the community about potential service impacts if new revenue sources are not identified. DISCUSSION Sales Tax The City’s current sales tax rate is 10.25% and the prospective rate increase is 0.5%, which would bring Pleasanton’s rate to 10.75% if approved by the voters. In this scenario, this additional sales tax would add $5.00 on $1,000 in taxable purchases. The sales tax rate for six cities in Alameda County is already at 10.75%. Notably, prescription medicine and devices and groceries are exempt from sales tax. Rent, mortgage payments, utilities, and other items such as goods transmitted electronically (music, books, movies, computer software, etc.) are also exempt from sales tax. The cost for individuals and families will vary depending on the Page 213 of 228