CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 4 of 6 services Pleasanton residents have consistently said they want. Sales tax revenues are paid by out-of-town visitors patronizing the City’s retail, dining, lodging and entertainment businesses, as do local residents. Costs generated by visitors who impact Pleasanton’s local infrastructure can appropriately be supported through a local sales tax measure. The proposed measure would provide the City with a guaranteed source of local funding for vital City services that will stay local. Proposed Tax Measure The base sales tax rate is 10.25% in Alameda County. The cities that have taken action to establish additional sales tax are Alameda, Albany, Hayward, Newark, San Leandro and Union City; all having increased the local sales tax rate by a ½ cent (0.50%), for a total current rate of 10.75%. The recommendation under consideration for Pleasanton is to place a ½ cent Transactions and Use Tax (known commonly as a "Sales Tax") on the November 2024 ballot. If approved, the Transactions and Use Tax would add a new Chapter 5.40 to Title 5 of the Pleasanton Municipal Code. If approved, the Transactions and Use Tax will be implemented by the California Department of Tax and Fee Administration during the later part of FY 2024/25, at which time businesses would begin to collect the tax; the City would begin receiving revenue thereafter. The total sales tax in Pleasanton would increase from 10.25% to 10.75%. The proposed tax would be a general tax paid by all consumers purchasing goods in the City and would be used to maintain essential services such as 911 emergency response and police and fire protection services. The additional tax revenue could not be taken by the State of California for any reason or purpose. Sales tax does not apply to groceries or prescription medicines. For large purchases that are delivered (such as appliances) and vehicles, the sales tax is determined by the location where the buyer lives - not by the location of the business where the purchase is made. Results of Recent Polling In anticipation of the City Council considering placing a sales tax revenue measure before the voters, the City engaged the services of FM3 Research to conduct a statistically valid poll of likely voters from May 15 to 21, 2024. A representative from FM3 Research will be at the June 18 City Council meeting to present and discuss the survey results, which are summarized below. • FM3 conducted a statistically valid and representative survey through 438 online and phone interviews with registered voters. After hearing a summary of a ½ cent sales tax measure, 58% of those surveyed indicated support for the general-purpose measure, which is up from 50% “yes” testing a similar measure in September 2023. • Support decreased to 49% with 14% remaining undecided after respondents heard negative or oppositional information on the measure, including statements that the City should cut unnecessary spending, the cost of living is already too high, etc. • Given the 4.9% margin of error for the study, FM3 estimated that a sales tax measure to maintain essential City services and protect Pleasanton’s quality of life may be viable for the November 2024 election with a strong campaign in favor and no organized opposition. • The survey results indicate that top investment priorities for any new revenue generated are largely related to maintaining and preventing cuts to public safety services, including Page 234 of 248