CITY COUNCIL REGULAR MEETING AGENDA PACKET 2-17-26

Page 5 of 13 • A decrease of $0.16 million in Sales Tax revenue. With the softening of the labor market, the general consensus among economists is forecasting a slight reduction in consumer spending as they shift their focus to essentials. Sales Tax is the City’s second largest revenue source. • An increase of $0.55 million in Business License Tax. The final FY 2024/25 Business License Tax total was $6.71 million, well above the budgeted amount, fueled by increased gross receipts, new businesses headlined by a new Costco store, and the relocation of Kaiser’s administrative division. A similar revenue total is anticipated for FY 2025/26. • An increase of $0.59 million in Development Services Fees is primarily based on year- to-date collected, as well as anticipated Planned Unit Development Application, Plan Check and Public Works Inspection Fee revenues in the second half of this fiscal year. • An increase of $0.18 million in Recreation Fees is mostly due to higher than anticipated Facility/Field Rental Fee revenues. General Fund Expenditures As presented in Table 2 above, General Fund expenditures are projected to decrease slightly by $0.57 million. The most significant adjustments are personnel budget based on year-to-date actuals and updated year-end projections. Personnel Expenses – Personnel costs are expected to be $1.15 million lower than the adopted budget. Adjustments in this category reflect revised year-end projections based on up- to-date information, including year-to-date actuals, vacancies, and City Council approvals. The Mid-Year Budget does not include any new permanent positions. Non-Personnel Expenses – Non-personnel expenses (all expenditure categories other than Personnel) are projected to increase by a net total of $0.58 million as described in more detail below. • Transportation & Training – A net increase of $0.17 million is due to a series of adjustments. An increase of $0.10 million for vehicle-related expenses, consisting of additional fuel costs for Police and repair and maintenance costs for Public Works, is recommended. The remaining increases are to fund staff training costs in Police and Human Resources, as well as to restore $2,700 in funding for the City’s pRide Parking Cashout Program. • Materials, Supplies & Services – A net increase of $0.46 million consists of $0.02 million increase in Human Resources budget for the workplace investigation contract; a $0.28 million increase in Community and Economic Development budget for various professional service costs related to East Pleasanton and Objective Design Standards projects, the City match for the Council-approved Safe Streets and Roads for All grant, and funding for software subscriptions; $0.06 million in Non-Departmental for homeless encampment cleanup costs; a $0.18 million increase in Library & Recreation budget to replace aging equipment and additional contract services; and a $0.02 million increase in Public Works budget to account for additional utility costs. These increases are offset by $0.11 million decrease in the Police Department temporary staffing budget. • Capital Outlay and Debt Services – A net decrease of $0.05 million is due to delays in Page 74 of 144