CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 2 of 8 • Reduced hotel tax revenue (particularly during and post-pandemic). In addition, much of the City’s infrastructure and facilities are aging. Pleasanton realized significant and rapid growth in the 1980s and 1990s, when buildings, parks, streets, and many other City assets were constructed. The City has contributed significant resources to maintain these assets over time, but many are reaching the end of their useful life and funds have not been set aside to replace or significantly rebuild infrastructure and facilities. As the City continues to transition from a growing city to a mature community, necessary revenue increases are no longer occurring. Over the years, the City has implemented cost- saving measures to improve operational efficiency and reduce costs, including merging departments and operations, offering less generous pension and retiree medical benefits to employees, implementing energy and water efficiency projects, and establishing a pension trust to pay down the City's unfunded liability. However, the City has also deferred critical infrastructure repair and replacement to balance the General Fund operating budget and to continue to support the delivery of services. Currently, there is not sufficient capital funding, nor is there sufficient operational funding, to continue to delivering services and programs at the level the Pleasanton community has come to expect. Toward addressing the City’s challenging financial position, at its March 21, 2023, meeting, the City Council directed staff to place an item to discuss revenue options on a future agenda, including but not limited to, a potential ballot measure for upcoming elections. At its August 15, 2023, meeting, staff and the City’s revenue strategy consultant, Clifford Moss, provided the City Council and the community with 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 directed staff to conduct a public opinion poll to seek input from the community regarding Pleasanton’s service priorities and identify potential revenue options. After exploring several possible new revenue sources in the poll, including a potential infrastructure bond, at its December 5, 2023 meeting, the City Council received a presentation noting the focus is now on a small ½ cent sales tax increase that would be placed on the November 5, 2024 ballot, if the City Council chooses to put this option before the voters. DISCUSSION Public Engagement Community input is imperative to exploring the feasibility of a revenue measure, and the community has been actively engaging in this process. During the first half of 2024, staff has been meeting with community leaders and local organizations and groups to bring awareness of the City’s structural budget deficit and gather questions and solicit feedback to present to the City Council. Staff also attended various City commission and committee meetings to seek feedback from the members. Concurrently, a community survey was open during February- April 2024, in which all Pleasanton residents were encouraged to participate. Community Survey In February 2024, the City opened a community survey asking residents to offer feedback on how they would rank the following City priorities, and an opportunity to add in any additional priorities not listed and provide comments: • Protect 911 Emergency Services Page 308 of 428