CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 1 of 4 Item #13 CITY COUNCIL AGENDA REPORT December 17, 2024 City Manager TITLE: APPROVE THE ESTABLISHMENT OF A BUDGET ADVISORY COMMITTEE AND APPOINT MEMBERS SUMMARY A Budget Advisory Committee is being established to assist the City Manager in developing the City's 2025-26 and 2026-27 budget for City Council approval in June 2025. Given significant fiscal challenges in both operating and capital budgets, the Budget Advisory Committee will provide critical insights to help the City Manager address constraints on City finances. This committee will also serve as a mechanism for increased transparency and public engagement in compliance with the Brown Act. RECOMMENDATION Approve the creation of a Budget Advisory Committee, comprised of representatives as outlined in this report, and appoint the members as identified at the December 17, 2024, City Council meeting BACKGROUND The City is confronting significant fiscal challenges, with a projected structural deficit averaging $13 million annually over the next eight years, starting in fiscal year 2025-26. Contributing factors include rising personnel and pension costs, inflation, and declining revenues from retail activity and hotel taxes, which have not rebounded to pre-pandemic levels. Additionally, the City faces a substantial capital and infrastructure funding gap, with an estimated $900 million needed over the next decade for maintaining and upgrading community assets such as streets, parks, and public facilities. The City Council placed Measure PP (Pleasanton Essential Services Protection Measure)—a proposed half-cent sales tax increase—on the November 5, 2024, ballot to generate approximately $10 million annually for essential services. The measure did not pass, receiving 45.82% of votes in favor and 54.18% against. This result means the City must explore alternative solutions to address the budget shortfall and maintain high-quality municipal services. To assist in this process, and presuming that the City Council has approved moving forward with establishing a Budget Advisory Committee as part of a separate City Council agenda item discussion, the City is creating a Budget Advisory Committee (BAC) to provide insights and recommendations on community priorities and strategies for achieving a balanced budget. This initiative aligns with the City's ongoing efforts to enhance public engagement in the budget development process, as outlined in the Approve the Fiscal Years 2025/26 and 2026/27 Budget Engagement Plan report also on the City Council's December 17, 2024, agenda. The BAC will operate under the provisions of the Brown Act, ensuring transparency and compliance with open meeting requirements. Page 292 of 893