CITY COUNCIL REGULAR MEETING AGENDA PACKET 2-3-26

Page 3 of 5 actively campaign for or against the measure and would not oppose it. Staff also engaged with Visit Tri-Valley (VTV), the regional tourism marketing organization. The cities of Pleasanton, Livermore, and Dublin, and the town of Danville, provide funding for VTV through tourism assessments collected from hotel guests. The rate is currently $4.0 per paid occupied room per night, less any applicable exemptions. The funding to VTV was $2.9 million for FY 2024/25, $2.8 million for FY 2023/24, and $2.8 million for FY 2022/23. VTV uses the funding for marketing campaigns, community outreach, and sales initiatives. VTV expressed interest in receiving additional funding. Specifically, VTV would like to see some of the new TOT revenue (collected by the cities and Town of Danville) be "passed through" to fund a potential future regional event venue. Staff has communicated that dedicating new revenue in Pleasanton is not feasible or recommended by staff at this time for several reasons. Specifically, the City of Pleasanton needs to address its operating budget to fund core services and maintain its quality of life for residents, as well as tactical concerns related to a tax increase for a specific purpose, resulting in the vote threshold moving to two- thirds from the 50 percent + 1 required for an increase associated with general city needs. Regional Coordination Staff engaged with counterparts in neighboring jurisdictions to explore opportunities for a coordinated regional approach. Dublin has expressed interest in a TOT adjustment, and staff will continue to coordinate as those discussions develop. Staff recommends that Pleasanton proceed with ballot measure development on its own timeline while remaining open to coordination with regional partners as their processes advance. Rate Options and Phased Implementation Based on stakeholder feedback and regional analysis, staff recommend a target rate of 12 percent with phased implementation over two years. This approach addresses operator preferences while maximizing long-term revenue generation. Under this approach, voters would approve a single measure authorizing a 12 percent rate, with implementation occurring in two steps: • Phase 1 (July 1, 2027): Rate increases from 8 percent to 10 percent • Phase 2 (July 1, 2028): Rate increases from 10 percent to 12 percent This phased approach requires only one ballot measure and one voter approval, streamlining the process while achieving the full 12 percent rate. As an alternative, the City Council could seek a 10 percent increase now and return later for an additional increase. However, this approach would require two campaigns (and incur related costs), two votes, and delay full revenue realization. Or the City Council could move forward with implementing the full 12 percent increase at one time, minimizing administrative burden but creating a higher up-front impact on rates. Page 44 of 80