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Page 5 of 18 Part 1: Issues Applicable to Annexation and Development of Both Projects in Pleasanton The following sections discuss issues generally applicable to both the Arroyo Lago and East Lakes projects. Based on the outcomes of the various analyses and review of various topics, staff recommends processing formal applications to annex both projects into Pleasanton. Compared to development in the County, annexation provides the City with much improved, and positive, fiscal benefits; provides an opportunity to achieve beneficial RHNA reporting benefits; and eliminates the need for the privately operated wastewater treatment facility and spray fields included in the County project. While new infrastructure will be needed to support the development in Pleasanton, there does not appear to be any fundamental impediment to allowing connections to City utilities; furthermore, annexation provides the opportunity to create a long-term financing mechanism for the new infrastructure in East Pleasanton, whether through an agreement(s) between the major property owners who will principally benefit from the extension of roads and utilities and the City, or a the creation of a funding structure such as a Community Facilities District. Fiscal Impacts Economic & Planning Systems, Inc. (EPS) has prepared a fiscal impact analysis of the proposed East Pleasanton development projects, including Arroyo Lago and East Lakes (Attachment 6). At the applicant’s request, this analysis also includes data for a third project, the annexation and development with light industrial uses of “Parcel H”, located in the north part of the East Pleasanton Planning Area, south of Stoneridge Drive and Arroyo Mocho. The fiscal impact analysis considers the following three development programs: • Arroyo Lago: 189 single-family homes and 49 accessory dwelling units (238 total units) • East Lakes: 357 independent living age-restricted homes and 88 assisted living units (445 total units) • Parcel H: 299,655 square feet of light industrial uses. The analysis compares fiscal impacts of projects annexed and developed in the city, with those same projects developed in the county. For both city and county development scenarios, the analysis compares forecasts of City general fund revenues and expenditures to estimate net annual fiscal impacts to the City. Revenues are generated through property tax, sales tax, and other revenue sources. Expenditures are costs related to providing City services to the project, including public works (e.g., streets and infrastructure maintenance), police, fire and government services. Key findings from the fiscal impact analysis include the following: • If developed in the city, all three projects would have a net positive annual impact on the City’s general fund. • For all three projects, the total net fiscal impact is estimated to be $903,000 annually if developed in the city. East Lakes has the greatest positive fiscal impact ($500,000), followed by Arroyo Lago ($289,000) and then Parcel H ($114,000). Page 204 of 749