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BACKGROUND In July 2009 the City adopted its current General Plan and in February 2012 the City adopted its Housing Element Update. Land use policies, such as those reflected in Pleasanton's General Plan and Housing Element Update, have broad implications for the City's fiscal well-being and sustainable growth. Going forward, the City wants to make sure that new growth does not result in any adverse effects on the City. In order to determine the impacts of growth, the City hired Economic & Planning Systems, Inc. (EPS) to prepare a fiscal impact analysis based on the land use data contained in its General Plan and Housing Element Update. The East Side of Pleasanton that is currently under study by the Task Force was excluded from the analysis. The fiscal analysis of the impacts of development in this area will be considered separately at a later date when the East Side Specific Plan Study comes forward for Council review and approval. DISCUSSION The following are the key findings in the study: 1. Pleasanton's service population (employees plus night time population) is expected to grow by roughly 24 percent through buildout, suggesting that existing development will continue to account for the majority of General Fund costs and revenues (76 percent). Residential uses are estimated to grow by 15-20 percent while commercial space is expected to increase by 35-40 percent. 2. New growth is likely to have a positive fiscal impact on the City's General Fund at buildout. The analysis estimates that new growth will result in additional annual revenue of $15.1 million and will exceed additional annual expenditures of $11.1 million; resulting in an annual net fiscal surplus of$4.0 million to the City. Property tax will comprise the largest revenue to the City, while public safety and parks will result in the most significant expenditures from new growth. 3. Fiscal impacts of residential uses will vary depending on product orientation and density. For-sale housing units provide fiscal advantages for the City, while multifamily rental housing will likely result in fiscal shortfalls. However, these potentially negative impacts could be mitigated if new apartments provide housing opportunities that allow existing empty nesters (with higher income households) to remain in Pleasanton as they age and downsize. This is especially true if they sell their existing single-family homes, which likely have depressed assessed values due to Proposition 13, to more affluent families. 4. Commercial uses result in positive fiscal impacts on the City's General Fund. Retail uses generate the highest fiscal benefits to the City's General Fund due to generating both sales tax and property tax revenues. This is followed by industrial/warehouse, R&D, and office use. Page 2 of 4