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Page 1 of 5 <br />Item #6 <br /> CITY COUNCIL AGENDA REPORT <br /> <br />February 3, 2026 <br />City Manager <br /> <br />TITLE: RECEIVE AN UPDATE ON STAKEHOLDER ENGAGEMENT AND PROVIDE <br />DIRECTION ON A POTENTIAL TRANSIENT OCCUPANCY TAX (TOT) MEASURE <br />ON THE NOVEMBER 2026 BALLOT <br /> <br />SUMMARY <br />Following City Council direction on August 19, 2025, staff conducted stakeholder engagement <br />with Pleasanton hotel operators and regional partners to assess the feasibility of a Transient <br />Occupancy Tax (TOT) rate increase on the November 2026 ballot. Pleasanton's current TOT <br />rate of 8 percent has remained unchanged since 1983 and is among the lowest in Alameda <br />County. <br /> <br />Engagement with hotel operators and partners revealed no opposition to a potential rate <br />increase, with feedback ranging from neutral to supportive. Operators generally accepted that <br />a rate adjustment is reasonable given the current market and Pleasanton's competitive <br />position. One theme that emerged was a preference for phased implementation to smooth <br />impact on guest rates. <br /> <br />Staff also engaged with neighboring jurisdictions to explore opportunities for regional <br />coordination. Staff recommends Pleasanton proceed with ballot measure development for a <br />TOT increase for the November 2026 ballot on its own timeline while remaining open to <br />alignment with regional partners. <br /> <br />RECOMMENDATION <br />1. Direct staff to proceed with development of a Transient Occupancy Tax ballot measure <br />for the November 2026 election; <br />2. Provide direction on a target rate of 12 percent, with phased implementation (10 percent <br />effective July 1, 2027; 12 percent effective July 1, 2028); and <br />3. Authorize staff to return with draft ballot language for City Council consideration. <br /> <br /> <br />BACKGROUND <br />Structural Budget Deficit and Revenue Options <br />The City of Pleasanton faces a projected structural budget deficit based on the budget adopted <br />for the 2025-27 budget cycle. On August 19, 2025, the City Council received a staff <br />presentation that outlined several potential new or expanded revenue options. The City <br />Council directed staff to focus on a Transient Occupancy Tax (TOT) increase to bolster an <br />existing revenue source and to begin stakeholder engagement. <br /> <br />Transient Occupancy Tax Overview <br />TOT is a tax on the rental of hotel and motel rooms where stays are limited to 30 days or less. <br />Page 42 of 80