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1. INTRODUCTION Study Overview This study has been conducted by Economic & Planning Systems, Inc. (EPS) for the City of Pleasanton in order to provide a fiscal impact analysis for the City's recently adopted growth policies. Specifically, this report evaluates the fiscal implications of the General Plan adopted in July 2009 and Housing Element adopted in February 2012 designed to guide new growth in the City through buildout. The analysis is based on interviews with City staff as well as review of applicable budget trends both at the City and State level. The fiscal impact analysis is focused on the City's General Fund budget, comparing the costs of providing public services and maintaining public facilities with the primary revenue sources available to cover these expenditures. While the focus is on the fiscal impacts of growth, the study makes reference to the important interaction between new and existing development. Going forward these relationships will be critical to understanding the City's overall fiscal performance because even at build-out of the General Plan existing land uses (i.e., uses already in place) will continue to account for the bulk of General Fund costs and revenues. Location and type of growth can have important fiscal implications for the General Fund. Consequently, this study is based on land use projections that distinguish density, product type, and other characteristics of new development. The primary goal of the fiscal impact analysis is to quantify the impact of each land use on the City's long-term fiscal health and to inform policy formulation related to growth patterns and appropriate development mix that is fiscally sustainable over the General Plan buildout. It should be noted that fiscal results (annual surpluses or deficits) are simply indicators of fiscal performance; they do not mean that the City will accordingly have surplus revenues or deficits because it must have a balanced budget each year. Persistent shortfalls shown in a fiscal impact analysis may indicate the need to reduce service levels or obtain additional revenues; persistent surpluses will provide the City with resources to improve overall service levels or reduce liabilities, or to address deferred maintenance. This analysis is designed to inform growth policies and should not be used for actual budgeting purposes. Thus, the results should not be used as a basis for making actual, department level staffing decisions or annual revenue estimates. Background The City has recently adopted a new General Plan and Housing Element with the documents designed to provide guiding principles for the City's land use and growth. The City plans to accommodate nearly 10,000 new residents and 22,800 additional employees through buildout as it is transitioning from a growth-oriented focus to a more stable state. Pleasanton has enjoyed a balanced economic base with historically strong fiscal performance. The City has taken steps towards balancing its fiscal and economic development with the inclusion of well-designed fiscal and economic policies in its General Plan. Going forward, the City staff wants to make sure that new growth does not result in any adverse effects on the City. Economic&Planning Systems, Inc. 1 P:\121000\121062Pleasanton\Report\121062Report_FINAL.doc