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Discussion of Major Revenues <br />MAJOR REVENUE FORECASTING ASSUMPTIONS <br />The following discussion outlines the major operating revenue sources of the City and <br />describes the methods used to forecast FY 2025/26 and FY 2026/27 revenues. <br />GENERAL FUND <br />Property Taxes <br />Pursuant to Proposition 13 passed by California voters in 1978, countywide property taxes are <br />set at 1.0 percent of assessed value. After Proposition 13, initial assessed values were set at <br />the 1976 level. Since that time, assessed values have increased in most years by a factor of <br />2.0 percent. Upon change of ownership, the assessed value of a property is reset to the <br />current market value (sales price). <br />The City receives approximately 25.0 percent of the 1.0 percent countywide collected tax in <br />Pleasanton. Secured property taxes are the single largest source of revenue to the City's <br />General Fund, representing approximately 50.5 percent of the total revenue. <br />Property taxes are collected on both secured (real property) and unsecured property (such <br />as boats). If a property changes ownership in the middle of a tax year, the reassessment <br />appears on the tax rolls the following year. However, the property is reassessed for a pro -rata <br />portion of the year of sale, and an additional or "supplemental tax" is applied in that year. <br />The County often lags behind on reassessments, so supplemental assessments can span <br />more than one year, causing fluctuations in revenue. <br />During the Great Recession, Pleasanton experienced essentially no growth in assessed <br />property value and the impact on the General Fund revenue was evident. As the real estate <br />market improves the City is experiencing increases in assessments through Proposition 8 <br />recaptures. <br />A two percent increase is typically derived from the Proposition 13 growth factor (but is not <br />guaranteed). After factoring in all property tax related revenues (secured, unsecured, <br />supplemental, delinquent and property tax in lieu of Vehicle License Fee), staff is projecting <br />an increase of 4.1 percent ($3.8 million) in FY 2025/26 and 3.8 percent ($3.7 million) in FY <br />2026/27. <br />263 <br />