ECONOMIC VITALITY COMMITTEE AGENDA PACKET

TOP NON-CONFIDENTIAL BUSINESS TYPES Q1 '25* PleasantonBusiness Type Change Change ChangeCountyHdL State -0.6%-1.6%3.8% 889.8 New Motor Vehicle Dealers 1.3%2.2%4.5% 466.4 Casual Dining -0.8%-20.8%-11.8% 319.1 Medical/Biotech -5.8%-5.8%-11.4% 204.0 Service Stations -0.9%-1.6%3.6% 170.3 Quick-Service Restaurants -0.6%-0.3%9.3% 136.5 Electronics/Appliance Stores -4.4%4.2%-5.8% 124.8 Department Stores 9.1%6.6%-17.2% 118.8 Business Services 20.6%73.9%2.4% 118.3 Auto Lease -2.9%-12.5%-33.3% 104.2 Light Industrial/Printers *Allocation aberrations have been adjusted to reflect sales activity *In thousands of dollars REVENUE BY BUSINESS GROUP Pleasanton This Quarter* 21% Pools 13% Restaurants 23% Autos/Trans. 16% Bus./Ind. 16% Cons.Goods 11% Others *ADJUSTED FORECONOMIC DATA SALES TAX UPDATECITY OF PLEASANTON1Q 2025 STATEWIDE RESULTS California’s local one-cent sales and use tax receipts for January through March 2025 increased by 0.34% compared to the same quarter in 2024, after adjusting for accounting anomalies. While this modest growth may signal the end of an eight- quarter decline, it could be temporary, as the broader economy remains on the edge between recovery and further slowdown. The first quarter is traditionally the lowest sales tax-generating period of the year, often influenced by seasonal weather and post-holiday consumer behavior. Notably, the autos-transportation and building-construction sectors—both of which had been dragging down statewide results over the past two years—showed the strongest rebounds this quarter. In the autos sector, used car sales and leasing activity led the recovery. Consumers are increasingly opting for more affordable vehicles and shorter-term commitments, moving away from high-end purchases. In construction, pent-up demand for repairs and improvements, especially in weather- affected and wildfire-damaged areas like Southern California, drove strong sales for building material suppliers. Other segments generating modest growth included business-industry and countywide use tax pools, largely due to continued strength in online sales. Sales of goods already in California before purchase are reported under business-industry fulfillment centers. Goods shipped from outside the state are reported under county pools, based on the destination of the out- of-state shipment. Online shopping remains a preferred option for value-conscious consumers, contributing significantly to tax receipts in these categories. Calendar year 2024 saw a decline in fuel- related tax receipts due to lower global crude oil prices—a trend that continued into 1Q 2025. Fuel-related returns dropped by 5%. This decline also affected general consumer goods, as large retailers that sell fuel typically report all sales under a single taxpayer ID. As a result, brick-and-mortar merchants such as post-holiday family apparel stores, winter sporting goods vendors and closures of variety stores contributed to weaker performance. Although food-drugs is the smallest of the eight tax groupings, it was significant that cannabis returns continued a downturn trend that has been ongoing for over two years. Bankruptcies, customer shopping alternatives and oversaturation of retail footprint diminished taxes coming from drug stores. As 2025 begins, sales tax returns remain modest, reflecting broader economic volatility. Key factors influencing our outlook include: ongoing national tariff and trade negotiations and decisions on the federal funds rate - which directly affect consumer interest rates. Recent Middle East conflicts, which temporarily spiked crude oil prices and threatened local gas prices during the summer, will be a short-term concern. In summary, “uncertainty” remains the most accurate descriptor of California’s current and future economic climate.