FUNDING OUR FUTURE:
Protecting Pleasanton’s Quality of Life
Revenue Measure Feasibility
As a full-service city that provides essential services and facilities, the City works in a fiscally responsible manner to sustain the services that residents tell us they value most: rapid 911 emergency response services, safe neighborhoods, quality streets and roads, maintaining and preserving our parks and open spaces, supporting local businesses, and programs for youth and seniors. The City’s General Fund budget provides funding for a wide range of services and infrastructure. The City’s Long-Term Financial Forecast and the draft 10-Year Infrastructure Plan have identified budget deficits and significant funding needs for services and programs and repair and replacement in future years, as community-owned assets age. The City is now considering new revenue options to responsibly address community needs as City leaders also engage with the community to ensure residents’ voices are heard before important decisions are made. Additional information about this initiative and why the City is exploring it now can be found below.We Want Your Input!
Share your thoughts on Pleasanton’s priorities in our resident survey.Questions?
Take a look at our detailed FAQs section.For more information
View the spring 2024 special edition Pleasanton Progress newsletter that is about the City’s budget. View a mailer that was sent to all addresses in Pleasanton with registered voters in mid-February. For more information, contact Heather Tiernan at (925) 931-5044 or by email at PleasantonListens@cityofpleasantonca.gov.Community Meetings
- July 16, 2024 – City Council Meeting – Final decision of whether or not to move forward with a 1/2 cent sales tax measure on the November ballot
- June 18, 2024 – City Council Meeting – Presentation on polling results associated with revenue measure feasibility; Adopt FY 2024/25 Mid-Term budget (if not adopted at May 21 City Council Meeting); Review language for a potential ballot measure to increase General Fund revenue ( 1/2 cent sales tax)
- June 4, 2024 – City Council Meeting – Presentation on community survey results associated with City priorities
- May 21, 2024 – City Council Meeting – FY 2024/25 Mid-Term Budget Update
- May 21, 2024 – Budget Workshop – View the Agenda Report that introduce potential future service reductions if revenues do not increase
- December 19, 2023 – City Council Meeting – View the Agenda Report requesting funding for a community engagement campaign
- December 5, 2023 – City Council Meeting – View the Agenda Report introducing the topic of a potential revenue measure and a list of revenue options presented.
FAQs
What are the City’s greatest needs?
- PUBLIC SAFETY: Rapid 911 emergency response, maintaining police patrols and fire protection services to keep neighborhoods safe, emergency/disaster preparedness, crime prevention programs, and updating and modernizing police information and dispatch systems.
- STREETS & ROADS: Repairing potholes, repaving and maintaining roads, improving pedestrian safety with safe sidewalks and crosswalks.
- COMMUNITY INFRASTRUCTURE: Maintaining and replacing aging infrastructure, including facilities such as police and fire stations, the City’s library, cultural arts center, senior center, and other city buildings.
- PARKS AND OPEN SPACES: Maintaining City parks, repairing park systems and equipment, and replacing aging paths and trails.
- ECONOMIC VITALITY: Supporting small and local businesses, and attracting new businesses, jobs, and economic activity.
- SERVICES FOR YOUTH AND SENIORS: Maintaining after-school programs for children and teens, and senior services and programs, including maintaining library hours and providing access to books and educational technology.
What is the City doing to manage its finances responsibly?
The City makes every effort to use resources wisely. Over time, the City has made changes to its organizational structure, compensation packages, and operating strategies to reduce costs and improve efficiency. Reduced retiree health benefits are being offered to employees, and all City employees now contribute their maximum share towards the employee’s portion of the pension contribution. The City has also been proactive in setting funds aside in a pension reserve and established General Fund reserves to weather economic uncertainties. Like other agencies, the City develops a financial plan when significant expenses beyond the budget arise, making it critical to identify new resources to maintain vital City services and infrastructure that protect the community’s quality of life.
Why does the City need more funding?
The City’s General Fund supports both City services and infrastructure. As the community has grown over the years, City services and programs have expanded to accommodate the increase in service demand. The City lost more than $11 million in hotel tax revenue during the pandemic and has not fully recovered to the pre-pandemic level, impacting the City’s financial stability. In particular, many City facilities such as fire stations and park systems that support the community’s most valued programs and services have grown old, and deferred maintenance will become more expensive the longer it is delayed. The current annual repair and replacement cost estimate over the next 10 years for the General Fund and Enterprise Funds total close to $900 million, or approximately $89 million annually. Additional funding is vital to maintaining City services.
What has the City done to contain costs?
The City has been working to proactively address projected budget deficits with a combination of reduced costs and new revenue.
Steps taken to reduce costs include freezing some unfilled positions, combining departments to increase operational efficiency, and planning to cut more than $2 million from the upcoming year budget. An impact fee study is also underway to ensure the City recovers the cost of programs and new development.
Why is Pleasanton considering a 1/2 cent sales tax ballot measure?
The City has been evaluating various funding options to generate additional revenues to support City services and infrastructure. No decisions have been made yet: at this time, City leaders are still assessing options that would help raise revenues to close the current funding gap such as placing a possible revenue measure on the November 2024 ballot.
One option currently being discussed is a ½ cent sales tax increase, a step that would require Pleasanton voter authorization to go into effect. This particular option would ensure that visitors pay their fair share for use of Pleasanton services while not impacting certain essential purchases like groceries, prescription medication, and medical appointments. This option would help protect Pleasanton’s quality of life enjoyed by residents now and into the future.
What would funds raised by a possible sales tax measure go toward?
Any funds raised by a voter-approved local revenue measure would go directly into the City’s General Fund to help fund essential city services, including:
- Maintaining rapid 911 emergency response, neighborhood police patrols and fire protection services to keep neighborhoods safe, emergency/disaster preparedness, crime prevention programs, and updating and modernizing police information and dispatch systems.
- Repairing potholes, repaving and maintaining local roads, and improving pedestrian safety with safe sidewalks and crosswalks.
- Maintaining and replacing aging infrastructure, including facilities such as police and fire stations, the City’s library, cultural arts center, senior center, and other city buildings.
- Maintaining City parks, repairing park systems and equipment, and replacing aging paths and trails.
- Supporting small and local businesses, and attracting new businesses, jobs, and economic activity.
- Maintaining after-school programs for children and teens, and senior services and programs, including maintaining library hours and providing access to books and educational technology.
Does the City have an Expenditure Plan for spending money raised by a new measure?
If a measure is placed on the ballot and if it is approved by voters, funds raised by the measure would go directly into the City’s General Fund. The City Council would be the responsible decision-making authority to determine how funds will be spent. The needs listed immediately above would provide a good example of the priorities that the public could expect to see funded if a measure were to be placed on the November 2024 ballot and voters approve the measure.
Why are you looking at a general sales tax measure rather than a specific tax measure?
No decisions have been made yet. The City Council continues to evaluate all possible options for increasing revenues. A general sales tax increase measure gives the City Council the flexibility to use the funds raised on the City’s most critical needs rather than mandating that money raised is required to be spent on specific programs, services, or facilities.
How much would a new measure cost?
While no decisions have been made yet, if the City Council votes to place a half-cent sales tax measure on the ballot and local voters approve it, the cost to an individual would depend on the amount of qualified goods or services he or she purchased. In this case, the new tax would add a new ½ cent for every dollar spent. Some examples: if a family spends $10,000 a year in taxable purchases, there would be an additional $50 in sales tax with the half-cent rate; the additional cost to purchase a $1,200 television would be $6; the purchase of a $100 item would add 50 cents; and a $50 dinner at a local restaurant would add 25 cents more. If approved by voters, the sales tax would be paid by everyone in the community, as well as visitors making qualified purchases in Pleasanton.
What would a sales tax apply to? What’s taxed and what isn’t?
A local sales tax would apply to the same goods and services and be subject to the existing state sales tax on tangible personal property. For example: furniture, cars, giftware, toys, antiques, clothing and gasoline would be subject to the tax. Items that are exempt from sales tax include sales of certain food products for human consumption (groceries), sales to the U.S. government, sales of prescription medicine and certain medical devices, and sales of items paid for with food stamps.
How much new funding would a ½ cent sales tax generate for the City?
A ½ cent sales tax would generate approximately $10 million per year for City services. This revenue generated would be dependent on the economy and the amount of sales tax generated in Pleasanton. ALL funds generated by the local sales tax would be locally controlled and would stay in Pleasanton to provide essential City services, programs, and facility improvements. By law, the State could not take this funding away.
Why aren't we talking about water?
The City’s Water Fund is separate from the City’s General Fund; the cost to operate and maintain the City’s water programs comes from user fees, not the General Fund. Providing reliable, safe drinking water is a top priority for the City, and we have prioritized a number of water related projects over the past 18 months to ensure we continue to deliver quality water throughout our community. Increased revenue from a recent water rate adjustment will help stabilize the City’s water fund and was necessary to secure financing to complete some of the projects and improvements. The City is considering additional funding sources for water specific projects including state and federal grants, a lawsuit against PFAS contributors, partnerships with Zone 7 for cost sharing, and potential future bond measures.
The budget deficit being discussed now is in addition to the gaps in funding for water projects, and being addressed separately.
How long would a sales tax last?
No decisions have been made yet about a Pleasanton sales tax. However, measures like this often include a 10-year duration or “sunset”. Once approved by voters, changes cannot not be made without a new vote of the people.
How much of the revenue generated by a local sales tax goes to the State?
NONE. By law, every penny generated by a local voter-approved sales tax must stay local. In this case, that would mean all funds generated by a local sales tax in Pleasanton would STAY LOCAL to fund essential City services and facility improvements for Pleasanton. None of these funds can be taken by the State or diverted to other communities.
Where does the money from our current sales tax go?
The 1% County/City local tax is the only sales tax that comes directly to Pleasanton.
- CA Sales & Use Tax – 6.25%
- State General Fund/Realignment – 5.5%
- County Public Safety – 0.5%
- County Transportation Fund – 0.25%
- City/County Local Tax (direct to Pleasanton) – 1%
- Transaction & Use Taxes: Other Taxing Agencies – 3%
- BART – 0.5%
- Alameda County Transportation Commission – 0.5%
- Alameda County Transportation Sales Tax – 0.5%
- Alameda County Health Care Services Agencies – 0.5%
- Alameda County Children’s Health and Child Care – 0.5%
- Alameda County Transactions and Use Tax – 0.5%
When would a local tax measure be placed on the ballot?
The City is currently studying and evaluating its options. No decisions have been made yet. In the event that there is support from the community to consider such a measure, the City Council could take action to place a proposal on a future ballot. The next most likely election ballot that is viable is the November 2024 ballot. To qualify for that ballot, the City must file the measure with the Alameda County Registrar of Voters by August 9, 2024.
What happens if the measure being discussed makes it to the ballot and passes?
IF a ballot measure proposal is placed on the ballot and voters approve it, funds generated by the measure would be used to address City service, program, and facility needs deemed most critical by the City Council.
What happens if the City doesn’t pass a revenue measure?
IF voters were given the option to approve a local revenue measure and they chose to reject it, the likely result would be that some City programs and services would be at risk of reduction or elimination.
The City is considering a number of cuts to programming and services if we cannot bring in additional revenue to our General Fund. No decisions have been made about what specific cuts will be made, and won’t be made until later this year, but items the City is considering at this time include but are not limited to:
- Reducing personnel across all departments, including police and fire
- Deferring maintenance of parks, open spaces, and other city areas
- Reducing library days and hours
- Reducing pool hours
- Canceling special events, including the annual Hometown Holiday Parade
- Delaying permit processing times
Without additional facilities funding, City facilities will continue to age and deteriorate and, at some point, become unsafe and unusable for the community.
How will the City involve the community in this effort?
The City is evaluating options for generating additional revenues by exploring community interest in a local measure to ensure continued funding for many important city services, programs and facility improvements. This includes working with stakeholders and interested parties across the community, prioritizing replacement projects and listening to our community in a robust public engagement effort. No decisions have been made about a local revenue measure, and none are expected until at least summer 2024.