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Draft Memorandum January 22, 2025 East Pleasanton Annexation Fiscal Impact Analysis Page 5 x Table 3 documents assumptions related to the projected assessed value of the site under the proposed projects, based on market assumptions provided to EPS by Steelwave LLC as well as additional market research conducted by EPS. The values of the affordable residential units are calculated using assumptions aligned with Pleasanton’s Inclusionary Housing Policy. x Table 4 shows property tax and property tax in lieu of vehicle license fee (VLF) calculations. Based on examples of similar annexation projects, this analysis assumes that Pleasanton will receive an allocation of the base 1 percent property tax equal to the citywide average, which is 25 percent. Property tax in lieu of VLF revenue is based on the pro rata growth in City of Pleasanton assessed value attributable to the projects, over the existing Citywide assessed valuation basis. x Table 5 documents the assumptions and calculations supporting household taxable retail spending potential. New households support retail sales with average expenditure expressed as a weighted sum of household taxable retail spending. The spending estimates differentiate between the single-family homes and ADUs in the Arroyo Lago project, and the market rate and below market rate independent and assisted living units at the East Lakes Project. The Bureau of Labor Statistics Consumer Expenditure Survey tracks and reports household spending by income and those ratios are used in this analysis. x Table 6 relies on household spending derived in Table 5 to calculate sales tax revenue, and documents additional assumptions and calculations for employee and other on-site taxable spending. Key assumptions include: o 50 percent of new residents’ spending is captured in Pleasanton, and o While the projects will likely generate taxable business-to-business sales as well, this possible sales tax revenue could vary substantially depending on specific commercial tenants and is excluded from this analysis. o Pleasanton’s General Fund receives 0.95 percent of - taxable sales (i.e., the local Bradley-Burns Sales and Use Tax). x Table 7 documents Pleasanton’s other General Fund revenue, which includes revenue from business licenses. Revenue is derived on a per-employee basis. x Table 8 summarizes the City of Pleasanton General Fund expenditures by line item and documents the assumptions and calculations to estimate new General Fund costs resulting from providing services to the projects. The FIA relies on a categorization of the likely budgetary response to changes in demand for services for each department, expressed for fiscal modeling purposes in terms of “fixed expenses” and “variable expenses” within the department budget. EPS uses a per-service-population cost approach to estimate department costs. The variable portion of each department budget is used to determine the per-service- population cost, and per-service-population factors are multiplied by the projected increase in service population generated by the projects. The proposed projects are not expected to generate new capital and technology, overhead, debt service, and other non-departmental expenditure requirements for the General Fund. This analysis provides two sets of assumptions for the variable portion of each department budget, depending on whether the projects are located in the County or are annexed into the City. x Table 9 documents the population, employment, and service population assumptions underlying the FIA. The metrics are sourced directly from the California Department of Page 227 of 749