Following the adoption of the two-year budget, the City will develop a comprehensive longterm Financial Sustainability Plan over the next 12-18 months. This plan will address {nancial strategies to be deployed over the next {ve years, beyond immediate budget reductions.
These strategies will include exploring revenue options, advancing economic development initiatives, conducting an organizational assessment, completing the City’s {rst asset management plan, evaluating pension funding options, and updating the reserve policy.
Staff is in the process of developing a scope of work and identifying consultants to conduct the organizational assessment with the goal of improving ef{ciency and containing costs.
This will be in addition to work that has already been done to improve ef{ciencies and effectiveness, such as the consolidation of the Engineering and Operations Services Departments that was implemented during the 2023-25 budget cycle. For the proposed two-year budget, staff recommends consolidating the Economic Development Division with the Community Development Department to enhance focus on economic development activities, including review of City permitting processes.
The challenge remains signi{cant, and there are no easy solutions. However, this issue is not unique to Pleasanton. Cities across California, and even around the country, are dealing with similar {scal challenges. While the community did not provide the necessary support for Measure PP, their input and overall participation through all of the outreach efforts over the past several months showed that they deeply care about, value, and want to preserve the services and programs, and want to be engaged. The City’s work is not yet done, and this administration is committed to continue working with the City Council and the community to work collaboratively to address the structural de{cit, ensure the City’s longterm {scal sustainability, and maintain Pleasanton’s quality of life.
The following is an overview of the Budget, the City’s {nancial challenges, regional economy, and City Council priorities re|ected in the budget.
FY 2025/26 and FY 2026/27 Citywide Budget
The FY 2025/26 expenditure budget across all operating funds totals $248.2 million, including General Fund, Enterprise Funds, Special Revenue Funds, Internal Service Funds, Debt Service Funds, and Trust Funds. The FY 2026/27 budget totals $257.5 million. 3
General Fund FY 2025/26 and FY 2026/27 Operating Expenditures and Revenues eneral Fund FY 2025/26 and FY 2026/27 Operating Expenditures and Revenues neral Fund FY 2025/26 and FY 2026/27 Operating Expendi As presented in the table below, the General Fund budget is balanced in FY 2025/26 and FY 2026/27.
Total General Fund revenues, including transfers from other funds, are estimated to be $162.9 million in FY 2025/26, an increase of $4.2 million or 2.6 percent from the FY 2024/25 Modi{ed Budget. Revenues that are increasing include property taxes ($3.8 million), sales tax ($1.0 million), reimbursement revenue ($0.9 million), interfund revenue ($0.5 million), planning and development permit fees ($0.3 million), business license tax ($0.2 million), transient occupancy tax ($0.1 million) and other revenues ($0.3 million). These increases are largely offset by decreases in transfers from other funds ($2.5 million), recreation revenues ($0.3 million), and intergovernmental revenue ($0.1 million).
As described in the chart below, over 80.0 percent of General Fund revenues are derived from taxes including property tax (60.0 percent), sales tax (15.9 percent), business license tax (3.6 percent), and Transient Occupancy Tax (TOT) (3.4 percent). The balance of General Fund revenues comes from fees for services, {nes, interest earnings, inter-fund charges, and transfers in.
Total General Fund expenditures, including transfers out to other funds, are $165.2 million in FY 2025/26 or $6.1 million more than the FY 2024/25 Modi{ed Budget. Personnel expenses 4
account for approximately 67.8 percent of the overall expenditures at $112.0 million, followed by Materials, Supplies, and Services at $34.1 million or 20.6 percent. The chart below shows the projected FY 2025/26 expenditures by category.
General Fund Budget by Service Category
As described in the chart below, public safety (Fire and Police) comprises 44.8 percent of the City’s FY 2025/26 General Fund budget while General Government is 19.1 percent, followed by Public Works at 19.0 percent, Library and Recreation 9.5 percent, and Community and Economic Development at 7.6 percent.
5
The Current Economic Climate
Federal
There appears to be a high degree of unpredictability and uncertainty based on policy discussions and implementation by the current U.S. administration and the potential effect on economies, supply chains, and credit conditions globally. Front-loading of regressive policies, including higher tariffs and federal workforce layoffs, is disrupting growth, and the overall macroeconomic conditions are projected to slowly deteriorate without changes to the current policy direction. Forecasts suggest real GDP growth will be at 1.9% in 2025 and 2026, down from 2.9% in 2023 and 2.8% in 2024.
A weak growth in household income, reduced positive impulses from the public sector, higher interest rates, and lingering policy uncertainty are some of the key factors contributing toward a decelerating economic growth in 2025. Negative sentiments have been growing among economists, in terms of both the in|ation expectations, as well as the probability of a U.S. recession over the coming year. Any type of slowdown in the broader economy will trickle down and impact the local economy.
State
In January 2025, the Governor released his proposed FY 2025/26 budget, projecting a small positive balance of $363.0 million after two years of state budget de{cits with the use of $7.1 billion in reserves. The Governor’s proposal projects $16.5 billion in additional revenue compared to estimates from last June.
The state administration’s revenue projections re|ect an economic outlook that expects moderate growth to continue in the near term. However, the administration also warns that federal policies, international trade, and immigration would increase in|ationary pressures on the economy, which would dampen economic growth and reduce state revenues.
Local
The East Bay has a strong reputation as a highly productive, dynamic, and innovative economy with a skilled and educated workforce. Pleasanton’s economy, along with neighboring cities and the greater San Francisco Bay Area, faltered during the pandemic but has substantially recovered. The local unemployment rate was under 3.0 percent as recently as 2022 but has increased to 4.3 percent as of February 2025 compared to 4.4 percent for Alameda County. These percentages are lower than California’s rate of 5.4 percent as of February 2025, re|ecting a robust local and regional economy in the San Francisco Bay Area.
Pleasanton’s housing values, following the regional trend, peaked in spring 2022 and decreased throughout the year before increasing again through 2023 and 2024. The median sales price of $1.6 million is 10.2 percent higher year-over-year, but due to the small number of homes sold, the median sale price can |uctuate signi{cantly. With higher mortgage interest rates and high home prices, housing activities are expected to remain sluggish in 2025.
6
Major Expenses - Personnel
Personnel is the largest cost category in the City’s budget comprising 67.8 percent of the City’s expenditures. The Personnel expense category includes salaries, overtime, health bene{ts, workers’ compensation, and pensions. Each major Personnel cost category is discussed separately below.
Salaries
Salaries are set through labor agreements for most employees and for several years have increased by approximately three to four percent annually. The FY 2025/26 and FY 2026/27 budgets include salary increases consistent with the City’s labor agreements. The City is in negotiations with three labor groups: Pleasanton City Employees Association (PCEA), International Association of Fire{ghters (IAFF), and Fire Battalion Chiefs. PCEA’s Memorandum of Understanding (MOU) is scheduled to expire on May 31, 2025, and IAFF and Battalion Chief MOUs are both scheduled to expire on June 30, 2025. Funding will be determined and updated once the new MOUs are {nalized and will be re|ected through the FY 2025/26 Mid-Year Budget Review process.
Health Bene{ts
The City’s labor agreements limit the City’s contribution to health bene{ts to the Kaiser Permanente premium rates. Annual premiums tend to |uctuate considerably. Premium rate changes are primarily based on City staff and retirees’ prior year’s utilization of Kaiser Permanente’s services. The biennial budget includes an annual increase of 7.0 percent in Kaiser Permanente premiums. The City receives health bene{t premium rates every year in April for the subsequent {scal year; thus, the FY 2026/27 Mid-term Budget will be adjusted to re|ect the actual change for that year.
Workers' Compensation
The budget for workers’ compensation claims is adjusted by approximately $0.2 million from FY 2024/25 to FY 2025/26 to set aside funding necessary to cover both current as well as future claim costs. Contributions to the Workers’ Compensation Fund will be gradually increased to build reserves over the next several years to ensure there is at least 70.0 percent of the claims liability available to pay future claims.
Pensions
The City’s pension expenses have substantially increased since the Great Recession, primarily due to California Public Employees' Retirement System (CalPERS) investment losses and various changes in CalPERS policies related to calculating pension liabilities. The most signi{cant of these changes is the reduced CalPERS discount rate. In January 2017, CalPERS adopted a policy that reduced the CalPERS discount rate from 7.5 percent in FY 2017/18, to 7.0 percent in FY 2020/21, and then to 6.8 percent in FY 2021/22. CalPERS’ goal is 7
to strengthen the long-term sustainability of the fund to pay promised bene{ts and reduce the long-term risk of contribution increases associated with the volatility of the markets.
Reducing the discount rate results in increased annual pension contributions. Based on CalPERS’s latest projection, the City’s contributions are expected to peak in FY 2030/31 and then decrease continuously until the Unfunded Actuarial Liability (UAL) is fully paid off.
Citywide pension costs are projected at $29.2 million for FY 2025/26 and $31.2 million for FY 2026/27. Pension contributions are expected to stabilize as a higher percentage of current members will be under the reduced pension bene{ts based on the Public Employees’ Pension Reform Act of 2013 (PEPRA).
To date, the City has allocated a total of $38.0 million toward a Section 115 Pension Trust Fund administered by PARS (PARS Trust Fund), which is comprised of both short- and longterm investments. The City Council also adopted policies that placed limits on the City’s ability to draw on the PARS Trust Fund, to ensure funds remain available to make pension contributions during {nancially dif{cult times without having to reduce City services. In addition, to the extent to which the City does not draw on the PARS Trust Fund, the fund can grow through compounded investment earnings. However, due to the City’s current {scal challenges with the structural de{cit in the General Fund, the City Council approved the use of $2.0 million annually from the PARS Trust Fund for the next two years for a total of $4.0 million to balance the budget.
Major Expenses - Non-Personnel
Non-personnel expenses include utilities, contractual services, insurance, repairs and replacement of the City’s equipment, facilities, streets, and parks, and materials and supplies. Each major non-personnel expense category is discussed separately below.
Utilities (Electricity, Phones, Garbage, Sewer and Water) The FY 2025/26 and FY 2026/27 budget includes minor adjustments compared to the FY 2024/25 Modi{ed Budget based on current usage trends and expected rate increases.
Contractual Services
The City uses contractual services to support City operations including building and grounds maintenance, engineering and architectural design, temporary employment agency staff to back{ll vacancies until positions can be {lled, consultant support for planning studies, instructors for recreation classes, and outside legal counsel. The City’s budget for key contractual services categories, including contract services, professional services, and other professional services, decreased by $2.5 million or 25.9 percent in FY 2025/26 compared to the FY 2024/25 Modi{ed Budget. This major decrease is the result of service reductions that have been incorporated to balance the proposed budget, as well as some reallocation of software-based subscription services to the data processing equipment and software category under Materials and Supplies, as discussed below. For full details on the list of service reductions and their impacts, refer to the Budget Summary section of the book.
Repairs and Replacement
General Fund allocations to City Repair and Replacement funds for the next two years are approximately $3.5 million in FY 2025/26 and $3.7 million in FY 2026/27.
Materials and Supplies
Materials and supplies include of{ce supplies, small equipment, uniform costs, and data processing equipment and software. The FY 2025/26 and FY 2026/27 Materials and Supplies budgets are approximately $0.7 million higher than the FY 2024/25 Modi{ed Budget due to higher software and related subscription costs and budget reallocations from contractual 8
services as mentioned above. There are budget decreases in several other categories, including miscellaneous supplies and equipment, of{ce supplies, phones and pagers, uniforms, and printing.
Insurance
The City’s general liability insurance premiums and related costs increased signi{cantly over the last two years and are projected to continue rising in the next two years based on recent industry trends and natural disasters.
Major Revenues
The City’s major revenue sources include Property Tax, Sales Tax, Business License Tax, and Transient Occupancy Tax (TOT) which collectively account for more than 80.0 percent of the General Fund’s overall revenues.
Property Tax
The City’s property tax revenue has been steadily increasing since the low of $47.9 million in FY 2011/12 to $97.8 million in FY 2024/25, a 104.2 percent increase over the thirteen years.
This has resulted from increasing property values and additional residential and commercial development coming out of the Great Recession. Property taxes are estimated to increase by $3.7 million to $101.5 million in FY 2026/27, an increase of 3.8 percent from FY 2025/26.
Sales Tax
Sales tax is expected to increase by 4.1 percent in FY 2025/26 and increase by 2.8 percent in FY 2026/27. The increase is largely due to anticipated additional sales tax revenues from the new Costco store, which opened in November 2024. However, based on the cost sharing agreement with Costco, 40.0 percent of the sales tax revenue will be paid back to Costco for costs associated with traf{c and street improvements in the Johnson Drive Economic Development Zone until the City’s share of the cost is paid off. 9
Transient Occupancy Tax (TOT)
TOT revenues had also increased from a low of $2.7 million in FY 2009/10 to $6.5 million in FY 2018/19 or a 140.7 percent increase over the nine years. TOT revenues experienced the sharpest decline during the pandemic and are still recovering. The City’s TOT taxes are primarily derived from business travelers to the Tri-Valley region, but with many business meetings still occurring virtually, TOT is expected to slowly recover. As such, staff conservatively assumed TOT revenues at $5.5 million in FY 2025/26 compared to $5.4 million in FY 2024/25.
Business License Tax
Business License Taxes have been steadily increasing over the past thirteen years from $2.8 million in FY 2011/12 to $5.8 million in FY 2024/25, which is slightly below an all-time high of $5.9 million in FY 2023/24. For FY 2025/26, $6.0 million is projected. 10
General Fund 10-Year Financial Forecast
The General Fund 10-year {nancial forecast is the mechanism for monitoring the long-term {nancial health of the City’s most important fund. By tracking and trending current and anticipated revenues and expenses, the forecast provides a tool for City management and policymakers for understanding the impact of decisions on the City’s {scal health. The forecast includes projections of current revenues and expenses, including pension contributions as estimated by staff and the CalPERS. In addition, the forecast includes projected tax revenues associated with anticipated development over the next ten years.
The General Fund 10-year {nancial forecast is included under Appendix D.
Given the current economic climate, two separate forecast scenarios have been prepared.
The {rst scenario assumes the City’s revenues will continue to grow at a measured pace, with the local economy not experiencing any major downturn during the 10-year period.
The second scenario assumes a mild recession sometime during FY 2027/28, impacting the City’s major revenue categories. In the recession scenario, sales tax revenue is projected to decrease by 5.0 percent in FY 2027/28 and an additional 2.0 percent in FY 2028/29, and other tax revenues are assumed to decrease by 2.0 percent in both {scal years.
The chart below shows a 10-year surplus/de{cit projection for each scenario. The City’s expenditures are expected to continue outpacing revenues for the next several years, largely due to increasing operating costs and aging infrastructure, including general liability insurance, pension obligations, and deferred maintenance. Pension costs are projected to increase until FY 2030/31 based on the latest projection from CalPERS. As more employees in the CalPERS’ Classic Plan retire over time, the City’s staf{ng pool will gradually consist of a higher percentage of employees in the CalPERS Pension Reform Act (PEPRA) Plan, which has reduced pension bene{ts. Liability insurance premiums and related costs are expected to continue to increase due to current market conditions. Required funding for aging community assets, such as facilities and other infrastructure, is signi{cant. However, due to {nancial constraints, funds have not been set aside for repair and replacement. 11
Enterprise Funds
The City’s enterprise funds include utility programs (Water, Sewer, Storm Drain), golf, cemetery, and paratransit services. Water, Sewer and Storm Drain utilities are highlighted below.
Water Fund
Revenues from water sales are expected to
increase by 5.0 percent in FY 2025/26 and by
an additional 5.2 percent in FY 2026/27.
These increases re|ect baseline
adjustments for both {scal years at this
point. The City is conducting a water rate
study with a rate increase anticipated in
January 2026. This phase of rate increase will
help the Water Fund to address the
infrastructure funding gap and some of the
critical projects identi{ed in the Water
System Management Plan approved by the
City Council in December 2024.
The anticipated rate increase will also help the Water Fund to restore and maintain the 35.0 percent reserve target. At the end of FY 2025/26, the reserve is projected at 34.9 percent. It should be noted that this reserve level assumes only a $0.1 million transfer to the Water Capital Fund for capital projects in FY 2025/26, which is not enough to maintain and improve the existing infrastructure.
The rate study is scheduled to be completed in fall 2025. Once the rate study is completed, any recommended budget amendments, as necessary, and proposed rate adjustments will be presented to the City Council for consideration.
Sewer Fund
Sewer revenues are expected to increase by 3.1 percent in FY 2025/26 and an additional 3.2 percent in FY 2026/27. A rate study is scheduled to begin at the end of 2025, following completion of the Sewer System Management Plan (SSMP) and the Long-Term Sewer Capital Improvement Plan (CIP). In the interim, sewer rates will be adjusted based on the Consumer Price Index (CPI) until the study is complete.
Like the Water Utility Program, the Sewer Utility Program also lacks funding for infrastructure investment. Although the Sewer Fund reserve is projected at 36.8 percent at the end of FY 2025/26, which meets the 35.0 percent reserve target, this was the result of reduced annual transfers to the sewer capital fund for capital improvement projects and reduced repair and replacement funding in prior {scal years. The rate study is expected to address the funding needs to support critical capital projects.
Storm Drain
The Storm Drain Utility continues to experience a funding gap where operating costs are higher than the revenues. To cover this funding gap, the General Fund has been providing an annual subsidy of more than $0.6 million each year to cover some of the de{cit.
Additionally, a couple of one-time transfers were made through the year-end process in both FY 2022/23 and FY 2023/24 to eliminate the negative fund balance. However, with revenues staying mostly static at just over $0.5 million while operating costs are increasing 12
each year, the program’s fund balance is expected to go negative again in a few years. Staff is exploring options that will increase revenues to fully fund the Storm Drain operation.
Service Level Changes from FY 2024/25
The proposed budget represents a culmination of several months of exhaustive efforts {rst identifying areas of potential service reductions and incorporating guidance and input from various stakeholders, including the City Council, Budget Advisory Committee, and the community. Given the magnitude of the projected structural de{cit, to minimize the service impacts, staff took a balanced approach to utilize some one-time funding resources in combination with measured service reductions based on the City Council’s recommendations. Below is a high-level summary of the reductions in the General Fund by program/service category, along with associated full-time equivalent (FTE) reductions, recommended by the City Council at the April 10, 2025 Budget Workshop. These reductions have been incorporated into the proposed operating budget.
Other personnel adjustments in the General Fund include reclassifying some positions to better align staf{ng responsibilities. A key adjustment is the addition of an Economic and Business Development Manager in the renamed Community and Economic Development Department – this position will support strategic alignment of economic development programs with land use, zoning, and permitting process improvements, and enhance the pro{le of economic development as a priority, as directed by the City Council. Additional changes include the addition of a Management Analyst in the Human Resources Department to continue handling expanded labor relations responsibilities that are currently managed through a limited-term position, and a set of minor adjustments to reallocate some staf{ng hours to non-General Funds, as appropriate.
To support the effective operation of the Water and Sewer utility programs, staff is recommending that those Enterprise Funds (not the General Fund) support new positions to meet the growing needs of both programs, including environmental and program compliance requirements, operation, and capital infrastructure improvement needs. A total of 6 new positions (3 in Water and 3 in Sewer) are recommended to be added in FY 2025/26 and additional 5 new positions in FY 2026/27 in Water to provide adequate staf{ng resources for expanding capital program obligations based on the recently completed Water System Management Plan, as well as operational needs. 13
Conclusion
In closing this budget message, I would like to express my appreciation to the City Council for providing positive leadership and direction on behalf of the community. The City’s commissions and committees have also provided invaluable assistance in developing the City’s priorities that led to the proposed budget. I also want to thank City staff for their dedication and effort toward providing excellent services to the Pleasanton community and for making a commitment to accomplish the goals set out in the budget and the City’s ONE Pleasanton Strategic Plan.
I would especially like to thank the team in the City’s Finance Department for their work on developing the budget. Under the leadership of Susan Hsieh, Director of Finance, they have assembled a budget document that is comprehensive, accurate, and easy to read. I would also like to acknowledge Chris Yi, Raquel Zegarra, Cindy Wei, and Jamie Gallagher for their work on developing the budget and assembling the budget book. Finally, I would also like to thank the executive team for their thoughtful contributions to the budget and for their dedication and commitment to the City organization and the community.
Respectfully submitted,
Gerry Beaudin City Manager
14
15
This page has been
intentionally left blank.
16
Five-Year Strategic Planning
Process
In Fiscal Year 2023/24 the City transitioned from a 2-year work plan to a 5-year strategic planning process to identify longer-term goals and priorities to guide City decision-making.
The ONE Pleasanton Strategic Plan de{nes the City’s vision, mission, values and identi{es citywide goals, strategies, and implementation actions over a {ve-year period from 2024 to 2028.
The {ve-year citywide strategic plan de{nes 47 strategies in {ve key goal areas:
1. Funding Our Future: Fiscal Sustainability
2. Optimizing Our Organization: Organizational Effectiveness
3. Investing in Our Environment: Infrastructure, Public Facilities, and Sustainability
4. Safeguarding Our City: Public Safety and Emergency Preparedness
5. Building a Community Where Everyone Belongs: Livability and Community Development Since approval, staff has developed an implementation plan that ties the goals and strategies in the plan to actionable projects and resources. The implementation plan was used to inform departmental work plans that outline speci{c objectives and tasks for each City department to advance strategic plan goals over the next two {scal years. 17
18
19
20
21
About the City of Pleasanton
22
23
24
25
This page has been
intentionally left blank.
26
Budgetˆ˨ˠˠ˔˥ˬ
27
Budget Summary
The Two-Year Operating Budget (Operating Budget) is projected to be $248.2 million in FY 2025/26, which represents a 1.8 percent increase from the FY 2024/25 Modi{ed Budget, and $257.5 million in FY 2026/27.
The Operating Budget is comprised of a number of funds that are summarized in the following categories of funds, as shown below in Table 1:
Table 1: Summary of Expenditures by Major Fund Types*
The only funds not included in the Operating Budget are the Capital Projects Funds.
In light of the City’s {nancial challenges, the FY 2025/26 and FY 2026/27 operating budgets re|ect signi{cant personnel and non-personnel reductions to ensure {scal stability and address deferred maintenance needs while maintaining core services. The operating budget also includes adjustments related to salary and fringe bene{ts pursuant to adopted labor agreements as well as increased PERS pension contributions. There are several nonpersonnel increases related to general liability insurance, utilities, and payment to Costco associated with traf{c and street improvements. Increases in each expenditure category are described in more detail below.
General Fund
General Fund operating revenues, including transfers, are projected to total $162.9 million in FY 2025/26, a 2.6 percent increase over the FY 2024/25 Modi{ed Budget, and $169.3 million in FY 2026/27. General Fund operating expenditures, including transfers, are projected to total $165.2 million in FY 2025/26, a 3.9 percent increase over the FY 2024/25 Modi{ed Budget, and $171.2 million in FY 2026/27. The following chart presents a comparison of the revenues and expenditures from FY 2023/24 to FY 2026/27. 28
General Fund Revenues
Table 2 below provides a comparison of projected General Fund revenues by major category.
Table 2: General Fund Revenue Summary by Major Category Tax revenues represent over 80.0 percent of the General Fund revenues. Property tax (60.0 percent) and sales tax (15.9 percent) revenues represent a majority (75.9 percent) of tax revenues. A large decrease in the recreation revenue category is mostly due to reductions to the City’s adult sports recreation programs.
29
Property Tax
Property tax revenues, which include secured, unsecured, supplemental, delinquent property taxes, homeowners tax exempt, and the amount reimbursed by the State in exchange for the reduction in vehicle license fees, are the City’s largest revenue source and are projected to increase by 4.1 percent in FY 2025/26 and by 3.8 percent in FY 2026/27.
Table 3: Property Tax by Category
Sales Tax
Sales tax is expected to increase by 4.1 percent in FY 2025/26 and 2.8 percent in FY 2026/27.
The increase is largely due to anticipated additional sales tax revenues from the new Costco store, which opened in November 2024. However, based on the sharing agreement with Costco, 40.0 percent of the sales tax revenue will be paid back to Costco for costs associated with traf{c and street improvements in the Johnson Drive Economic Development Zone until the City’s share of the cost is paid off.
The budget re|ects the full year of revenue from Costco starting in FY 2025/26. Sales tax revenues are projected at $26.0 million in FY 2025/26 and $26.7 million in FY 2026/27, increasing from $24.9 million in FY 2024/25. Sales tax is the City’s second largest revenue source.
Table 4: Sales Tax Revenue
30
General Fund Expenditures
The General Fund Operating Budget is balanced with operating revenues, reserves, and service reductions. Below is a chart that shows the relationship between personnel and non-personnel costs in the General Fund.
Analysis of Expenditures by Category
General Fund expenditures are estimated to be $165.2 million in FY 2025/26, a 3.9 percent increase over the FY 2024/25 Modi{ed Budget and $171.2 million in FY 2026/27, a 3.6 percent increase over the FY 2025/26 Budget. Table 5 below summarizes the Operating Budget in each expenditure category.
Table 5: General Fund Expenditures by Category
Personnel
Personnel costs represent 67.8 percent of the FY 2025/26 General Fund Budget and 67.7 percent in FY 2026/27. The personnel cost increases include step and salary increases pursuant to existing labor contracts, increases in health and other bene{t costs, increases in PERS contributions, and increases in annual funding to workers’ compensation reserves.
The City is currently in negotiations with three labor groups: Pleasanton City Employees Association (PCEA), International Association of Fire{ghters (IAFF), and Fire Battalion Chiefs.
PCEA’s Memorandum of Understanding (MOU) is scheduled to expire on May 31, 2025, IAFF 31
and Fire Battalion Chiefs’ MOUs are scheduled to expire on June 30, 2025. Funding will be determined and updated once the new MOUs are {nalized.
Non-Personnel
Non-Personnel costs, including transfers, are approximately 32.2 percent of the Operating Budget in FY 2025/26 and 32.3 percent in FY 2026/27. The FY 2025/26 Non-Personnel budget is $1.3 million less than the FY 2024/25 Modi{ed Budget, but transfers are increasing by $5.9 million. Below is a summary of proposed adjustments:
Increasing transfers to the Capital Improvements Fund for high-priority capital projects and deferred maintenance needs. Refer to the General Fund Transfers section below for full details.
Increasing funding for insurance costs. The City’s general liability insurance premiums and related costs are projected to continue going up in the next two years based on recent trends.
Contract services were reduced signi{cantly as part of the overall budget reduction.
Please refer to the budget reduction summary at the end of this section.
The FY 2026/27 Non-Personnel Budget is $2.0 million more than the FY 2025/26 Budget primarily due to increases to utility and general liability insurance costs.
Table 6: General Fund Reduction Summary
32
Table 7: Service Reduction Impacts
33
General Fund Transfers
Net transfers involving the General Fund are approximately $8.1 million for FY 2025/26 and $7.0 million for FY 2026/27. Key transfers in include a transfer from the Retiree Medical Fund ($1.0 million in FY 2025/26 and $1.1 million in FY 2026/27) to return the implied subsidy paid by the General Fund on retirees’ medical premiums; a transfer from the Capital Reserve Fund for capital improvement projects ($1.0 million in FY 2025/26 and $2.0 million in FY 2026/27); $0.7 million over two years from the Business Loan Repayment Fund for expected loan repayments from businesses for funds that were lent out to help businesses during 34
COVID. At the end of FY 2026/27, the Capital Reserve Fund balance is projected at only about $500,000.
Key transfers out from the General Fund include operating subsidies to the Facilities Renovation Fund, Paratransit Fund, Storm Drain Fund, and the Cemetery Fund. There are also transfers from the General Fund to the Water and Sewer Funds to fund the senior and low-income water and sewer discounts. Under Proposition 218, one classi{cation of water customers cannot subsidize another; therefore, if a city desires to provide senior and lowincome discounts to its customers it must fund the discounts through the General Fund of the City. Finally, there is a transfer from the General Fund to the Capital Improvement Fund to fund the City’s Capital Improvement Program (CIP) and aging infrastructure. The General Fund transfer to the Capital Improvement Fund is $7.2 million in FY 2025/26 and $9.4 million in FY 2026/27 to address capital project funding requirements and deferred maintenance.
Table 8: List of General Fund Transfers
35
General Fund Reserves
The changes to General Fund Reserves are shown in Table 9 for the proposed two-year budget.
Table 9: General Fund Projected Reserves
The projected FY 2025/26 unrestricted ending fund balance of $30.9 million is approximately 20.0 percent of operating expenses in FY 2025/26. When all of the transfers to other funds for various subsidies and contributions to the capital program are accounted for, the projected FY 2025/26 unrestricted ending fund balance goes down to 18.7 percent.
For the FY 2026/27, $30.9 million represents approximately 19.3 percent of operating expenditures and 18.1 percent when including all the transfers.
As part of the balancing strategy, some one-time funding resources are utilized. First, the remaining COVID Response & Recovery reserve balance of $289,150 is planned to be used in FY 2025/26. Second, based on the Council’s direction from the March 4, 2025 meeting and subsequent budget workshops, a total of $4.0 million from the Section 115 Pension Trust will be utilized over the next two {scal years. Third, $2.1 million will be withdrawn from the Retiree Medical/Other Post-Employment Bene{ts (OPEB) Trust ($0.7 million in FY 2025/26 and $1.4 million in FY 2026/27) to offset estimated contribution needs for each {scal year.
Approximately $1.9 million of $2.1 million is for the General Fund.
Enterprise Funds
Water Fund
Revenues from water sales are expected to increase by 5.0 percent in FY 2025/26 and by an additional 5.2 percent in FY 2026/27. These increases re|ect baseline adjustments for both {scal years at this point. The City is conducting a water rate study with a rate increase anticipated in January 2026. This phase of rate increase will help the Water Fund to address the infrastructure funding gap and some of the critical projects identi{ed in the Water System Management Plan approved by the City Council in December 2024. The anticipated rate increase will also help the Water Fund to restore and maintain the 35.0 percent reserve target. At the end of FY 2025/26, the reserve is projected at 34.9 percent. It should be noted that this reserve percentage is achieved by only transferring $0.1 million to the Water Capital Fund in FY 2025/26, which is not enough to maintain and improve the existing infrastructure. Without additional rate increases, this estimated reserve level is projected to drop.
The rate study is scheduled to be completed in the fall. As such, numbers included in the FY 2025/26 and FY 2026/27 budget, summarized in Table 10 below, re|ect estimates based on preliminary analysis. Once the rate study is completed, any recommended budget amendments, as necessary, and proposed rate adjustments will be presented to the City Council for consideration.
36
The City currently purchases 100.0 percent of its water from Zone 7. The water purchase costs are projected to increase by 3.8 percent in FY 2025/26 and 5.5 percent in FY 2026/27.
Other operating expenses are projected to increase by 14.9 percent in FY 2025/26 and 12.7 percent in FY 2026/27. The overall increase is primarily due to three positions added in FY 2025/26, including an Associate Engineer and two Utilities Operators, and {ve positions added in FY 2026/27 including two Associate Engineers and three Utilities Operators, to support operations and the delivery of capital projects identi{ed as part of the Water System Management Plan. Total expenses for the Water Fund are projected to increase by
7.8 percent in FY 2025/26 and 8.2 percent in FY 2026/27. Table 10 below summarizes revenues and expenditures for the four years ending FY 2026/27.
Table 10: Water & Recycled Water Operating Fund Summary Sewer Fund
Sewer revenues are expected to increase by 3.1 percent in FY 2025/26 and an additional 3.2 percent in FY 2026/27. A rate study is scheduled to begin at the end of 2025, following completion of the Sewer System Management Plan (SSMP) and the Long-Term Sewer Capital Improvement Plan (CIP). In the interim, sewer rates will be adjusted based on the Consumer Price Index (CPI) until the study is complete.
Like the Water Utility Program, the Sewer Utility Program also lacks funding for infrastructure investment. Although the Sewer Fund reserve is projected at 36.8 percent at the end of FY 2025/26, which meets the 35.0 percent reserve target. This was the result of reduced or no annual transfers to the sewer capital fund for capital improvement projects and reduced repair and replacement funding in prior {scal years. For FY 2026/27, the reserve level is expected to go down to 28.3 percent. The rate study is expected to address the funding needs to support critical capital projects, supplement operational needs, and restore the reserve level.
A majority of the customers’ sewer fees are the regional sewer fees charged by DSRSD. The Budget assumes DSRSD fees will increase by 3.0 percent in FY 2025/26 and FY 2026/27.
Other operating expenses are projected to increase by 11.7 percent in FY 2025/26 and 2.5 percent in FY 2026/27. The increase is primarily due to new positions to meet compliance requirements and operational needs, including an Environmental Specialist and two Utility Operators starting in FY 2025/26. Total expenses for the Sewer Fund are projected to increase by 6.1 percent in FY 2025/26 and 2.8 percent in FY 2026/27. Table 11 below summarizes revenues and expenditures for the four years ending FY 2026/27. The projected de{cits are expected to be eliminated with rate increases. 37
Table 11: Sewer Operating Fund Summary
Golf Fund
For FY 2024/25, 68,734 rounds of golf are projected; for FY 2025/26 and FY 2026/27, this number is projected to slightly increase by about 0.1 percent or 68,803 rounds of golf. Based on adjusted fees and merchandise sales projections, golf revenues are expected to continue to remain strong, projected at $6.5 million in FY 2025/26 and $6.8 million in FY 2026/27.
Expenses are projected to increase by 4.3 percent in FY 2025/26 and 5.0 percent in FY 2026/27. Table 12 below summarizes the Golf Fund for the four years ending FY 2026/27.
Table 12: Golf Operating Fund Summary
Cemetery Fund Cemetery Fund
The Cemetery Fund is currently operating at a major de{cit largely due to the cost of cemetery maintenance contract increasing each year while revenues generated from sales of burial plots have remained stagnant in recent years. With burial plot sales and corresponding expenditures related to burials, which are challenging to predict from year to year, the ongoing operating de{cit is expected to continue. Staff is exploring opportunities to increase revenue streams and will present recommendations to the City Council at a future date.
The General Fund transfer to the Cemetery Fund is projected at $170,000 in FY 2025/26 and $50,000 in FY 2026/27. The subsidy for FY 2024/25 is budgeted at $50,000. Cemetery revenues are projected at $249,000 in FY 2025/26 and $252,800 in FY 2026/27. Expenses are projected at $328,358 in FY 2025/26 and $338,759 in FY 2026/27. Without the General Fund subsidy, both {scal years would end with a de{cit. Table 13 below summarizes the Cemetery Fund for the four years ending FY 2026/27.
Table 13: Cemetery Operating Fund Summary
38
Special Revenue Funds
Lower Income Housing Fund ower Income Housing Fund
The Lower Income Housing Fund receives revenue from an affordable housing in-lieu fee assessed at the time of a commercial or residential development in the city. The Fund is utilized to provide {nancial assistance toward meeting the affordable housing guidelines detailed in the Housing Element of the City’s General Plan. Individual project expenditures are determined by the City Council on a case-by-case basis.
Recycling and Waste Management Fund Recycling and Waste Management Fund yg g Funds from the Alameda County Waste Reduction and Recycling Initiative (Measure D) will be used to expand recycling programs and education over the next two years. Programs will include environmental education awareness programs at school sites, annual electronic waste events, food scrap recycling, large special event recycling and education on current programs. Measure D funds have been primarily used for the weekly green waste and food scrap program over the recent years.
Internal Service Funds
Internal Service Funds are used as a method to allocate certain internal costs to operating departments as a cost allocation tool. The City has over {fteen Internal Service Funds in several categories, including:
Risk Management
Workers’ Compensation
Employee Bene{ts
Retiree Medical Reserve
Public Art Acquisition
Replacement & Renovation
In accordance with adopted {nancial policies and the General Plan, the City maintains several Replacement and Renovation Funds. The purpose of these funds is to provide ongoing replacement of City assets, such as equipment, vehicles, street lights, and traf{c lights, and to make major repairs and renovations to facilities, parks, and medians, to extend the lives of these assets.
Adopted {nancial policies call for the establishment and maintenance of reserves, including major maintenance and renovations of buildings, parks, and medians. This is accomplished by assessing operating programs an annual charge pursuant to a 20-30 year funding plan based on the asset replacement cost and estimated life of the capital asset. The upcoming Asset Management Plan project will integrate the City’s master plans for the overall management of all the City’s infrastructure and capital assets. This Plan will aid in the regular update of the 10-year Infrastructure Plan and Repair & Replacement Plan.
All Other Operating Funds
Projected revenues and expenditures for all other Operating Funds, including Debt Service and Trust Funds, are contained in the body of the budget document. 39
Fund Balances
The City’s operating fund balances represent accumulated funds available to be spent in the future. Overall, projected FY 2025/26 operating fund balances total $167.2 million, and for FY 2026/27, this total is expected to decrease to $162.8 million. The General Fund’s fund balance is projected to decrease by $2.2 million from FY 2024/25 to FY 2025/26 and by $2.0 million from FY 2025/26 to FY 2026/27.
Fund balances in the Internal Service Funds are projected to decrease by $0.4 million from FY 2024/25 to FY 2025/26 due to one-time replacement costs for vehicles and equipment exceeding annual contribution totals. Fund balances in the Enterprise Funds are expected to increase by $1.1 million from FY 2024/25 to FY 2025/26 due to increasing revenues in the Water and Sewer Operating Funds. Fund balances in the Special Revenue Funds are projected to increase by $1.7 million from FY 2024/25 to FY 2025/26 mostly due to projected revenues in the Lower Income Housing Fund outgrowing expenditures.
Table 14: Fund Balances for Operating Funds
40
This page has been
intentionally left blank.
41
FY 2025/26 - FY 2026/27 Operating Budget
Estimated Changes in Fund Balance
42
(1) Beginning fund balance excludes GASB 31 adjustments (unrealized investment gain/loss), pension and retiree health liabilities and long-term debt. (2) The negative fund balance re|ects the estimated future liability for outstanding workers' compensation claims. The negative fund balance will be eliminated over time with increased internal service charges.
43
44
(1) Beginning fund balance excludes GASB 31 adjustments (unrealized investment gain/loss), pension and retiree health liabilities and long-term debt. (2) The negative fund balance re|ects the estimated future liability for outstanding workers' compensation claims. The negative fund balance will be eliminated over time with increased internal service charges.
45
Summary of Revenues and Expenditures - Citywide
46
Summary of Revenues by Fund Types
47
48
Summary of Expenditures by Fund Types
49
(1) FY 2023/24 amount re|ects the recording of pension expense at year-end due to increased net pension liability.
(2) FY 2023/24 negative amount re|ects the recording of deferred in|ows and deferred out|ows associated with other post-employment bene{ts at year-end, which resulted in a reduction in expense.
50
Citywide Operating Budget Summary - Revenues by Source
51
Citywide Operating Budget Summary - Expenditures by Department 52
53
Expenses by Category - All Funds
54
Citywide Summary of Activities - FY 2025/26
55
(1) Transfer Out from the General Fund category includes $1,000,000 transfer from the Capital Reserve Fund to the General Fund.
56
Citywide Summary of Activities - FY 2026/27
57
(1) Transfers Out from the General Fund category include $2,000,000 transfer from the Capital Reserve Fund to the General Fund.
58
General Fund Operating Budget Summary
59
Expenses by Category - General Fund
60
General Fund Transfer Summary
61
History of Full-Time City Staf{ng
62
History of Full-Time City Staf{ng (Continued)
63
FY 2025/26 - FY 2026/27 Operating Budget
Projected Debt Ratios & Payments Through 2027
(1)°°°°°°°°° 2017 PJPFA Water Revenue Bonds. On February 16, 2017, PJPFA issued $7.1 million Non-Callable Water Revenue Bonds Series 2017 to fund DERWA facilities expansion project.
The debt was paid off in April 2024.
(2)°°°°°°°°° State of California, Water Resource Control Board (CWRCB) Loan to support the construction of Recycled Water Project Phase 1A system that provides recycled water to the Ken Mercer Sports Park.°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°° (3)°°°°°°°°° 2024 PJPFA Water Revenue Bonds. On June 4, 2024, PJPFA issued $17.3 million Water Revenue Bonds Series 2024 to fund near-term improvement projects. The bonds were priced at a premium, bringing total proceeds to $19.0 million. (4) °°°°°°°° Lease/purchase agreements with U.S. Bancorp, Wells Fargo, and Vantage Tag Systems. The City entered into several lease/purchase agreements for various goal course maintenance and operating equipment totaling $1.0 million. °° (5) °°°°°°°° 2019A HUD Section 108 Loan. The Cities of Dublin, Livermore and Pleasanton entered into an agreement with US HUD to borrow $950,000 under the Variable/Fixed Rate (“VFR”) Note No.B-14-MC-06-0050 guaranteed pursuant to Section 108 of the Housing and Community Development Act of 1974, as amended to reimburse Axis Community Health, Inc. for construction costs of their new health clinic. 2015 HUD Section 108 Loan was converted to 2019A HUD Section 108 Loan on March 28, 2019 with a step-up ({xed) interest rate {nancing. The amount reported represents the City of Pleasanton's portion of debt services.
(6) °°°°°°°° Sun Ridge Computer System. On January 5, 2024, the City entered into a {nanced purchase agreement with Sun Ridge Systems, Inc. for aided dispatch and Records Management Software. The cost of the {nanced equipment was $855,235. (7) °°°°°°°° Fire Engine Lease/Purchase. On September 29, 2023, the City entered into a {nance purchase agreement (Master Agreement) with JP Morgan Equipment Finance for a {re engine, an Enforcer 1500 GPM Pumper Type 1 Fire Engine. The cost of the {nanced equipment was $1,237,932.°°°°°°°°°°°°°°°°°°°°°°°°°°°° °°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°° (8) °°°°°°°° Vehicle Lease/Purchase. The City entered into {nance purchase agreements (Master Agreement) with Enterprise Fleet Management Trust for vehicles. At June 30, 2024, the balance on the {nanced vehicles was $948,037. At the end of the term, the City has the option to purchase the vehicles.
64
ʺ˘ˡ˘˥˔˟ʺˢ˩˘˥ˡˠ˘ˡ˧
65
This page has been
intentionally left blank.
66
City Council
The City Council is responsible for establishing City policy in all areas of municipal affairs, providing broad guidelines to be followed by the City's administrative staff, and exercising its powers of legislation.
Department Goals &
Objectives
Department
Accomplishments
Continue implementing the ONE
Pleasanton Strategic Plan priorities
Monitor and address housing
affordability and development needs
Enhance community engagement and
public participation strategies
Advance sustainability initiatives and
climate action goals
Support economic vitality and business
retention
Ensure long-term {scal sustainability
Address aging infrastructure needs
Support public safety and emergency
preparedness
Promote innovative approaches to
transportation and mobility challenges
Continue to represent the Pleasanton
community's interests at all levels of
government
Adopted the ‘ONE Pleasanton’ 5-Year
Strategic Plan (2023-2028)
Approved the 2024-2028 Economic
Development Strategic Plan
Authorized the City’s {rst comprehensive
Asset Management Plan for
maintenance, repair and replacement of
infrastructure and public facilities
Approved the Water System
Management Plan and authorized the
issuance of $19 million in water revenue
bonds for critical water system projects
Adopted a comprehensive update to
Development Impact and Affordable
Housing Fees
Adopted a new Capital Improvement
Program Process and Prioritization
(CIPPP) strategy to effectively allocate
funding and resources
Appointed community members to
various boards, commissions, and
committees
Implemented the City and Tri-Valley
legislative platforms to advocate for
community interests
67
Department Overview
Operating Budget
Revenues
Reimb & Misc $1,856 – – –
REVENUES TOTAL $1,856 – – –
Expenditures
Personnel Services $194,448 $203,435 $208,829 $214,929
Transportation & Training $22,316 $26,700 $11,700 $11,700 Materials, Supplies, and
Services $17,922 $19,700 $19,700 $19,700
EXPENDITURES TOTAL $234,687 $249,835 $240,229 $246,329
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
68
City Manager
Operating Budget
The City Manager provides the overall administration, leadership, and direction for the City organization. The City Manager's Of{ce identi{es for the City Council community issues and needs requiring legislative policy decisions, ensures that programs and services are effectively and ef{ciently provided, and fosters public awareness of municipal programs, services and goals. The department includes the City Manager Administration, Communications and Emergency Management Divisions, and the City Clerk’s Of{ce. 69
70
Department Goals &
Objectives
Department
Accomplishments
Develop and implement a long-term {scal
sustainability plan to address the budget
de{cit while maintaining essential City
services
Continue to align organizational strategies
with the ONE Pleasanton Strategic Plan
Conduct a comprehensive assessment
of City departments and services to identify
operational ef{ciencies, improve service
delivery, and optimize resource allocation
Combine Community and Economic
Development to streamline permitting and
development services to support business
attraction and retention
Develop additional revenue enhancement
strategies to build {scal stability
Enhance citywide emergency
preparedness with a focus on employee
health and safety and emergency
communications
Continue to strengthen workplace culture
and expand employee engagement and
professional development through
initiatives such as BELONG (Building
Equity, Leadership, Opportunity, Nurturing,
and Growth) Pleasanton
Further develop and expand strategic
communications to effectively reach all
community members
Continue to modernize public meetings
and information management to increase
accessibility and transparency; update the
Citywide records retention schedule
Begin coordination of the November 2026
General Municipal Election for of{cers
Conduct the City Council retreat and
update Council operating procedures and
onboarding protocols
Complete the exploration and potential
development of a City Charter
Develop a preliminary Civic Center
evaluation and planning framework
Hire a new Livermore-Pleasanton Fire
Department Fire Chief and Deputy Fire
Chief
Implemented comprehensive emergency
preparedness programs, including a
citywide Training and Exercise Plan, with
updates to the Emergency Operations Plan
and Injury and Illness Prevention Program
Launched the BELONG Pleasanton
initiative to enhance workplace culture and
create an environment where all
employees feel valued and supported
Conducted two successful Pleasanton
Community Academy programs to engage
residents in local government
Implemented key initiatives from the
Economic Development Strategic Plan,
including a feasibility study for the
Downtown Business Improvement District
restructure and retail revitalization efforts
Enhanced citywide communications with
expanded social media outreach, enewsletters, and targeted community engagement strategies
Implemented electronic agenda and
records management systems
Implemented strategic plan initiatives with
regular tracking and reporting
Hired new executive team members,
including Assistant to the City Manager,
Human Resources Director, Police Chief,
and Public Works Director
71
72
Personnel Summary
73
Personnel Summary (Continued) (Continued)
74
Department Overview
Operating Budget
Revenues
Charges for Services $1,264 $31,300 $450 $450
Reimb & Misc $544,177 $539,900 $339,400 $342,000
REVENUES TOTAL $545,441 $571,200 $339,850 $342,450
Expenditures
Personnel Services $3,576,246 $4,328,062 $3,778,146 $3,744,902 Transportation & Training $39,148 $33,590 $33,590 $33,590 Repairs and Maintenance $25,322 $127,110 $30,070 $31,080 Materials, Supplies, and
Services $1,175,635 $1,050,700 $828,850 $1,033,523
Capital Outlay $270,513 $315,000 $310,000 $310,000
Debt Services $119,057 $118,000 – –
EXPENDITURES TOTAL $5,205,920 $5,972,462 $4,980,656 $5,153,094
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
75
City Manager Administration
General Fund and Special Revenue Fund
The City Manager Administration Division is responsible for providing the overall administration, leadership, and direction for the City organization, including implementation of City priorities, guidance of signi{cant initiatives, and oversight of the delivery of City services.
Communications Division
General Fund and Special Revenue Fund
The Communications Division manages strategic external communications to keep the community informed and engaged with City projects, programs, and services, and leads internal communications to ensure employees are well-informed and connected to the organization.
Emergency Services Division
General Fund and Special Revenue Fund
The Emergency Services Division supports disaster preparedness and emergency management citywide in the areas of organization and communication, equipment, planning, training and exercising. The division also works across city departments to support workplace health and safety and compliance.
Revenues
Reimb & Misc $278,435 $305,200 $55,200 $55,200
REVENUES TOTAL $278,435 $305,200 $55,200 $55,200
Expenditures
Personnel Services $2,661,938 $3,331,021 $2,791,106 $2,709,662 Transportation & Training $28,834 $17,500 $17,500 $17,500 Repairs and Maintenance $5,242 $5,242 $5,500 $5,780
Materials, Supplies, and
Services $978,118 $400,200 $385,900 $385,900
Capital Outlay $71,007 $105,000 $105,000 $105,000
Debt Services $27,234 $27,000 – –
EXPENDITURES TOTAL $3,772,373 $3,885,963 $3,305,006 $3,223,842
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
76
City Clerk Division
General Fund
The Of{ce of the City Clerk provides staff support for Council meetings, prepares the legislative agenda, and ensures meetings comply with requirements. The of{ce administers federal, state and local procedures, including elections for local government representatives, and oversees the preservation and protection of public records.
Revenues
Charges for Services $1,264 $31,300 $450 $450
Reimb & Misc $265,742 $234,700 $284,200 $286,800
REVENUES TOTAL $267,006 $266,000 $284,650 $287,250
Expenditures
Personnel Services $914,308 $997,041 $987,040 $1,035,240 Transportation & Training $10,314 $16,090 $16,090 $16,090 Repairs and Maintenance $20,080 $121,868 $24,570 $25,300 Materials, Supplies, and
Services $197,517 $650,500 $442,950 $647,623
Capital Outlay $199,507 $210,000 $205,000 $205,000
Debt Services $91,823 $91,000 – –
EXPENDITURES TOTAL $1,433,547 $2,086,499 $1,675,650 $1,929,253
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
77
This page has been
intentionally left blank.
78
Law
Operating Budget
The Law Department counsels the City Council and City staff on all legal matters pertaining to City business, frames all ordinances, resolutions, contracts and other City documents, and performs all legal services required by the City. The Law Department works closely with the City Council, City Manager, department heads, and all City staff to carry out certain administrative duties as well as providing advice on time-sensitive issues. The Law Department serves as the City’s Risk Manager and handles most of the City’s litigation. 79
80
Department Goals &
Objectives
Department
Accomplishments
Provide timely reasoned legal advice to
the City Council, City Manager, and staff
Provide guidance and advice to City
Councilmembers and appointed of{cials
Provide advice concerning evolving state
housing laws and adoption and
implementation of the Housing Element
Defend the City against claims and
lawsuits {led against it and represent the
City in prosecution of cases it {les
Advise Human Resources Department on
labor and personnel issues
Draft, review, and comment on all
agreements, contracts, ordinances, and
resolutions to be entered into by the City
Prepare an omnibus ordinance to update
the Municipal Code
Prosecute Municipal Code violations to
maintain high quality of life in the
community
Provide advice regarding land use and
California Environmental Quality Act
(CEQA) matters to City Council,
commissions/committees, and staff
Provide advice regarding development
fees, their use, and legal requirements
Provide advice to respond to local
emergencies
Provided timely reasoned legal advice to
the City Council, City Manager, City
commissions and committees, and all
City departments on a wide range of
issues involving state and federal laws
and regulations
Advised City Manager and Human
Resources Department on labor and
personnel issues
Prepared annual omnibus ordinance to
update the Municipal Code
Reviewed the form and legality of all
contracts, as well as ordinances,
resolutions, and other documents related
to City operations and policies
Successfully defended against or
resolved/settled lawsuits related to a
variety of issues
81
Personnel Summary
Department Overview
Operating Budget
Revenues
Charges for Services $30 $18,000 $18,000 $18,000
Reimb & Misc $114,777 – $218,500 $225,100
REVENUES TOTAL $114,807 $18,000 $236,500 $243,100
Expenditures
Personnel Services $1,845,165 $1,899,111 $1,897,339 $1,943,643 Transportation & Training $5,534 $5,000 $5,000 $5,000
Repairs and Maintenance $904 $904 $950 $1,000
Materials, Supplies, and
Services $4,102,916 $5,167,400 $5,954,047 $7,254,047
EXPENDITURES TOTAL $5,954,519 $7,072,415 $7,857,336 $9,203,690
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
82
Finance
Operating Budget
The Finance Department is responsible for the safekeeping, management, and accounting of the City’s {nancial assets. The department provides {nancial information and analysis to the public, the City Council, the City Manager, and other departments. The department processes cash receipts, payroll, and accounts payable; administers assessment districts and other debt; manages the City’s business license program; invests the City’s funds; coordinates preparation of the City’s operating and capital budgets; issues the annual {nancial report; and coordinates the City’s audits.
83
84
Department Goals &
Objectives
Department
Accomplishments
Provide {scal planning and forecasting to
ensure effective resource allocation and
decision-making aligned with long-term
objectives
Ensure compliance with various
guidelines and regulations
Ensure the City’s {nancial sustainability
through budget monitoring and
reporting of the City’s {nancial condition
Work with the City Manager’s Of{ce and
other City departments to develop a longterm {nancial stability plan Implement an online budget book
software to advance the City’s technology
initiative/strategic goals
Conduct a citywide fee study to ensure
adequate cost recovery
Continue to conduct citywide training on
{nancial policies and procedures
Collaborate with departments to evaluate
current practices and processes to ensure
effectiveness and improve operational
ef{ciencies
Review and evaluate internal controls and
update {nancial policies and procedures
where appropriate
Coordinate the development of the City’s
FY 2027/28 and FY 2028/29 operating and
capital budgets
Successfully prepared the Annual
Comprehensive Financial Report and
Popular Annual Financial Report for the
{scal year ended June 30, 2024
Completed the FY 2024/25 Mid-Term
Budget and Capital Improvement
Program Update
Completed the FY 2024/25 Mid-Year
Budget Review
Collaborated with the City Manager’s
Of{ce to launch a comprehensive budget
engagement program for the FY 2025/27
budget development, including
establishing a Budget Advisory
Committee
Developed the FY 2025/26 and FY 2026/27
Biennial Budget, including cost
reductions to achieve a balanced budget
to protect core services
Collaborated with City departments to
develop the Five-Year Capital
Improvement Program for FY 2025/26
through FY 2029/30
Collaborated with Public Works to
complete a water rate study to ensure
{scal sustainability
Worked with the City Manager’s Of{ce on
the revenue feasibility project and placed
Measure PP, a ½ sales tax, on the
November 2024 ballot
Led the issuance of water revenue bonds
to {nance near-term improvement
projects
Updated the citywide overhead cost
allocation plan and implemented credit
card fees to recover costs
Worked with IT and other City
departments to complete the Tyler Munis
Enterprise Resource Planning (ERP)
system upgrade
Worked with Eide Baily to conduct an
independent assessment of the City’s
{nancial health and to validate the
{nancial forecast assumptions
85
Personnel Summary
86
Department Overview
Operating Budget
Revenues
Charges for Services $444 $800 $800 $800
Reimb & Misc $54,043 $65,300 $63,300 $63,300
Interfund Revenue $500 $1,000 $500 $500
REVENUES TOTAL $54,987 $67,100 $64,600 $64,600
Expenditures
Personnel Services $3,201,448 $3,544,094 $3,552,424 $3,713,011 Transportation & Training $20,681 $15,400 $15,400 $15,400 Repairs and Maintenance $39,342 $39,575 $41,415 $43,345 Materials, Supplies, and
Services $1,080,866 $1,078,150 $1,144,550 $1,163,750
EXPENDITURES TOTAL $4,342,338 $4,677,219 $4,753,789 $4,935,506 Performance Measures
Finance Department
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
87
This page has been
intentionally left blank.
88
Human Resources
Operating Budget
The Human Resources Department supports the City and its vision by providing services in employee and labor relations, recruitment and retention, classi{cation and compensation, bene{ts, organizational development, performance management, safety, workers’ compensation, City policy development, and compliance. The department’s mission is to provide exceptional services by recruiting the best talent, developing that talent, and providing the workforce with a gratifying, safe, and supportive work environment. Human Resources supports the organization by providing an inclusive workplace free from discrimination and promoting personal accountability. The department and organization emphasize respect and consideration for its workforce and the public. 89
90
Department Goals &
Objectives
Department
Accomplishments
Forge stronger partnerships by working
collaboratively with the City’s bargaining
groups to develop successor labor
agreements that support a thriving,
future-ready workforce
Attract top talent and keep them
engaged by leading a citywide effort to
implement thoughtful strategies that
bring in high-caliber candidates and
strengthen retention through meaningful
work, growth opportunities, and a culture
where all employees feel valued and
connected
Empower excellence through smarter
performance management by
redesigning the performance evaluation
process to align with the ONE Pleasanton
Strategic Plan and transform feedback
into a tool for growth, alignment, and
accountability
Invest in employees by building a culture
of continuous learning through the
creation and implementation of a
dynamic training and development
roadmap that drives professional growth
and cultivates future leaders
Embrace innovation and leverage
technology and smart resource
management to streamline operations
and enhance service delivery across the
organization
Initiated job description updates to
remain competitive with other agencies
for recruitment and retention
Successfully streamlined the candidate
screening process to better align with
speci{c job responsibilities, foster a more
inclusive environment, and improve
retention throughout the recruitment
cycle
Developed a Workplace Violence
Prevention Plan and training program as
required by recent legislation. Formed an
interdepartmental Health & Safety
Committee with representatives from all
departments, and updated the Injury and
Illness Prevention Plan (IIPP) and
associated programs
Implemented a New Employee
Orientation for the organization by
adding new orientation materials
including Disaster Service Worker and
Cybersecurity Awareness to re|ect
current priorities
91
Personnel Summary
92
Department Overview
Operating Budget
Revenues
Reimb & Misc $456,326 $370,000 $838,600 $862,300
REVENUES TOTAL $456,326 $370,000 $838,600 $862,300
Expenditures
Personnel Services $2,053,832 $2,271,232 $2,235,155 $2,309,851 Transportation & Training $7,212 $12,000 $7,000 $7,000
Repairs and Maintenance $3,738 $3,738 $3,920 $4,120
Materials, Supplies, and
Services $916,218 $557,714 $517,714 $517,714
Capital Outlay $49,338 $50,400 $50,400 $50,400
EXPENDITURES TOTAL $3,030,339 $2,895,084 $2,814,189 $2,889,085
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
93
This page has been
intentionally left blank.
94
Information Technology
Operating Budget
The Information Technology (IT) Department manages and maintains the City’s technology infrastructure, ensuring the reliability, security, and ef{ciency of digital services. It supports enterprise applications, servers, networks, databases, and end-user devices, while also overseeing City websites, electronic communications, and telephony systems. IT safeguards systems through proactive cybersecurity measures, audits, and user access management, and works collaboratively with departments to implement modern technologies that improve operations, service delivery, and strategic outcomes. 95
96
Department Goals &
Objectives
Department
Accomplishments
Further enhance the City's cybersecurity
posture through layered defenses and
integrated threat intelligence
Expand the City's Wi-Fi footprint to
enhance connectivity and provide free
public access
Modernize the City's physical access and
security systems
Advance digital service offerings through
user-centered design, automation, and
improved system integration
Expand the Citywide Arti{cial Intelligence
(AI) program to enhance service delivery
and operational ef{ciency in a secure,
ethical manner
Strengthen interdepartmental
collaboration through the IT Steering
Committee, which aligns technology
initiatives with strategic goals and fosters
transparent project governance
Develop a citywide Fiber Master Plan to
guide the deployment and management
of a municipal {ber network, enabling
future-ready connectivity
Refreshed and deployed next-generation
Mobile Data Computers (MDCs) for Police
Patrol operations
Upgraded mission-critical Police systems,
including Computer-Aided Dispatch
(CAD), Records Management System
(RMS), and Mobile solutions
Completed upgrade and modernization
of the City's Enterprise Resource Planning
(ERP) system (Tyler Munis)
Refreshed legacy systems by replacing
end-of-life operating systems citywide
Launched the City’s redesigned public
website with improved navigation and
accessibility
Established the IT Steering Committee to
ensure strategic alignment and
transparent prioritization of technology
initiatives
Conducted a citywide evaluation of
software platforms and data practices,
forming a foundation for smarter
procurement, standardization, and
governance
Initiated the development of an AI policy
framework
Strengthened cyber resilience with
expanded endpoint protection, AI-based
threat detection, mandatory staff training,
and full multifactor authentication (MFA)
implementation
Completed enterprise-wide cyber risk
assessments and conducted a tabletop
incident exercise
Migrated Land Management to a cloudbased SaaS platform, enhancing reliability and access
Completed upgrades to Wide Area
Network (WAN) infrastructure at offsite
locations
Upgraded Local Area Network (LAN)
infrastructure across on-net City sites
97
Personnel Summary
98
Department Overview
Operating Budget
Revenues
Charges for Services $5,843 $5,000 $5,000 $5,000
Reimb & Misc $1,043,045 $527,000 $622,600 $630,000
Interfund Revenue $364,001 $364,000 $382,000 $401,000
REVENUES TOTAL $1,412,889 $896,000 $1,009,600 $1,036,000 Expenditures
Personnel Services $1,993,933 $2,085,153 $2,110,898 $2,179,603 Transportation & Training $11,249 $20,500 $20,500 $20,500 Repairs and Maintenance $209,584 $255,642 $253,450 $260,070 Materials, Supplies, and
Services $1,715,595 $1,751,600 $1,548,460 $1,548,460
Capital Outlay $894,407 $476,000 $616,000 $616,000
Debt Services $471,796 $276,700 $360,000 $360,000
EXPENDITURES TOTAL $5,296,564 $4,865,595 $4,909,308 $4,984,633
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
99
This page has been
intentionally left blank.
100
Non-Departmental
Private Purpose Trust Fund
Private-Purpose Trust Fund - accounts for the Pleasanton Township County Water District #3 (P.T.C.W.D.#3) Trust Fund. The Trust received money in 1973 from the Pleasanton Township County Water District #3 and the funds are used to maintain the private road that serves the City's water tanks.
Revenues
Charges for Services $325 $1,925 – –
REVENUES TOTAL $325 $1,925 – –
Expenditures
Repairs and Maintenance – $10,000 – –
Materials, Supplies, and
Services $16,691 $30,780 $7,700 $7,700
EXPENDITURES TOTAL $16,691 $40,780 $7,700 $7,700
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
101
General Government
Miscellaneous & Non-Departmental
Includes revenues and expenditures not associated with a particular department, such as the General Fund contingency, Employee Bene{ts Internal Services Fund, Workers' Compensation Internal Services Fund, PERS Rate Stabilization Fund, Retiree Medical Reserve Funds and the Self-Insurance Retention Fund.
Revenues
Property Tax $90,241,390 $93,920,500 $97,763,200 $101,442,100 Sales & Use Tax $23,963,541 $24,935,000 $25,964,700 $26,700,200 Other Taxes $11,969,789 $11,954,000 $12,271,300 $12,580,700 Franchise Fees $3,440,134 $3,440,000 $3,491,400 $3,545,800 Intergov Revenue $359,758 – – –
Charges for Services – $9,000 – –
Reimb & Misc $425,899 $394,567 $345,700 $345,700
Interfund Revenue $13,164,675 $16,614,100 $17,707,603 $19,571,313 REVENUES TOTAL $143,565,187 $151,267,167 $157,543,903 $164,185,813 Expenditures
Personnel Services $10,076,930 $5,597,600 $4,952,503 $5,219,513 Transportation & Training $14,609 $45,500 $10,000 $10,000 Materials, Supplies, and
Services $9,476,989 $10,789,795 $13,430,534 $15,013,254 Debt Services $5,305 $5,000 $5,000 $5,000
EXPENDITURES TOTAL $19,573,833 $16,437,895 $18,398,037 $20,247,767 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 102
˃˨˕˟˜˖ˆ˔˙˘˧ˬ
103
This page has been
intentionally left blank.
104
Livermore-Pleasanton Fire
Operating Budget
The Livermore-Pleasanton Fire Department’s (LPFD) core purpose is to make our communities safe for all citizens to live and work through the protection of lives, property and the environment. The department, through the Fire Prevention Division is responsible for minimizing {re risk through positive {re code enforcement and weed abatement. The Operations Division prepares for and responds to all emergency {re, medical, rescue and hazardous materials incidents. Five of the department’s ten {re companies are based in the City of Pleasanton. The LPFD also trains at the City’s training facility in east Pleasanton.
The department provides community training to improve safety and self-reliance in emergencies and includes the Livermore-Pleasanton Community Emergency Response Team (CERT).
105
106
Department Goals &
Objectives
Department
Accomplishments
Upgrade Image Trend, LPFD’s cloudbased records management system Continue to expand partnership with Las
Positas College to provide college units
and funding for existing LPFD training
Launch a new modern LPFD website
Update the Phoenix G2 Station Alerting in
all {re stations
Continue to focus on technology
improvements to modernize operations
Recruit a new Fire Chief
Streamline the station supply process for
ef{ciency and cost reduction
Pursue Insurance Services Of{ce (ISO)
Fire Protection Class 2 status
LPFD Fire Academy partnered with Las
Positas College and Piedmont Fire
Completed a Community Risk
Assessment
Enhanced Communications – launched
quarterly newsletters, Annual Report
refresh, increased social media
engagement, and internal Chief’s Chats
Hosted a successful Fire Safety Expo, with
over 1,800 attendees
Awarded a $38,000 grant from Cal Water
Services for individual thermal imaging
cameras (TICs)
Awarded a $10,000 grant from Homeland
Security for Continuing Challenge HazMat
training
Awarded a $30,000 grant from Bay Area
Urban Security Initiative (UASI) for Class 1
multi-threat HazMat suits
Submitted an Assistance to Fire{ghters
Grant (AFG) for training and certi{cation
of Emergency Medical Technicians (EMTs)
to become paramedics
Participated in the Bay Area Fire
Conference, an annual training that
includes {re{ghters from across the
country
Continued implementation of the LPFD
Strategic Plan
Increased CalOES reimbursement rate for
administrative overhead
107
108
Personnel Summary
109
Personnel Summary (Continued)
110
Department Overview
Operating Budget
Revenues
Permit Fees $748,220 $481,000 $567,000 $569,550
Intergov Revenue $316,682 $377,000 $227,000 $227,000
Charges for Services $1,204,654 $1,370,000 $1,410,620 $1,452,459 Reimb & Misc $60,977 $30,300 $30,300 $30,300
Interfund Revenue $3,143 – – –
REVENUES TOTAL $2,333,677 $2,258,300 $2,234,920 $2,279,309 Expenditures
Personnel Services $23,272,475 $23,772,181 $24,490,359 $25,318,105 Transportation & Training $200,148 $199,808 $199,808 $199,808 Repairs and Maintenance $657,304 $659,181 $687,769 $717,789 Materials, Supplies, and
Services $3,347,551 $3,453,337 $3,587,887 $3,643,364
EXPENDITURES TOTAL $27,477,477 $28,084,507 $28,965,823 $29,879,066
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
111
Performance Measures
Pleasanton Only
112
Police
Operating Budget
The Pleasanton Police Department is dedicated to serving the community with empathy, fairness, and respect. As guardians of public safety, the department understands its responsibility to protect lives, prevent crime, and enhance the quality of life for the residents we serve. The Police Department will continue to implement effective crime-{ghting strategies through collaborative partnerships with community members, businesses, and organizations, with a goal to collaborate with the community in improving public safety while focusing on trust and engagement. By focusing on community engagement, the department will ensure its services are responsive to the needs of those it serves.°° 113
114
Department Goals &
Objectives
Department
Accomplishments
Maintain an immediate response to
emergency calls with the priority of the
safety of the community
Achieve non-emergency response times
under 20 minutes
Continue to engage in various
community events that foster trust and
collaboration
Maintain staf{ng levels through a
continued focus on retention strategies
Focus on the professional development
to prepare personnel for future
leadership roles
Implement training strategies that
focus on foundational skills and best
practices in policing
Allocate resources to adequately staff
special assignment positions that
ensure community safety and
engagement while providing
development opportunities for
personnel
Continue to focus on wellness initiatives
for all staff members and include City
staff when appropriate
Identify and implement technological
solutions to improve organizational and
operational ef{ciency and effectiveness
Continue to identify and apply for grant
opportunities
Explore opportunities to leverage
technology to improve
case/investigative communication and
updates
Identify opportunities to collaborate
with the community on crime
prevention strategies
Successfully implemented a new
computer automated dispatch program
and records management system to
enhance response times, and improve
operational ef{ciency and move toward
paperless document submissions
Successfully resolved a long-standing
homicide case, bringing closure to the
victim’s family and demonstrating a
commitment to justice
Procured the Command and Crime
Scene Investigation vehicles to expand
operational readiness
Developed leadership capability by
sending numerous personnel through
professional and executive leadership
programs
Created a police cadet program as a
pipeline to the police of{cer position;
one cadet has successfully entered the
pipeline
Expanded relationship with PUSD
through use of a School Resource
Of{cer and a School Community Of{cer
Resource Education Of{cer
Implemented the California IncidentBased Reporting System Partnered with South Bay Academy to
host Pellet B testing for Police Of{cer
position
Ful{lled staf{ng goals by hiring all
vacant positions (sworn and
professional staff)
Applied for and received grant funding
to assist with the purchase of ballistic
vests for sworn staff
Through grant funding, implemented
traf{c collision report writing software
that integrates with Traf{c Engineering
and the State, including a cost-saving
electronic citation platform
Alternative Response Unit was
recognized for outstanding effort and
innovative solutions by winning the
prestigious Helen Putnam Award for
Excellence
115
116
Personnel Summary
117
Personnel Summary (Continued)
118
Department Overview
Operating Budget
Revenues
Other Taxes $637,588 $600,000 $600,000 $612,000
Permit Fees $10,464 $11,000 $15,000 $15,000
Fines & Forfeitures $176,156 $184,000 $184,000 $184,000 Intergov Revenue $363,700 $725,820 $648,046 $495,000
Charges for Services $67,112 $41,000 $54,600 $63,100
Reimb & Misc $143,476 $253,365 $262,500 $265,000
Interfund Revenue $26,854 $178,820 $35,000 $35,000
REVENUES TOTAL $1,425,349 $1,994,005 $1,799,146 $1,669,100 Expenditures
Personnel Services $30,322,490 $34,411,956 $36,508,099 $38,115,528 Transportation & Training $631,368 $457,500 $470,000 $437,000 Repairs and Maintenance $714,951 $691,840 $723,960 $759,780 Materials, Supplies, and
Services $2,797,086 $3,326,253 $3,061,685 $3,038,475
Capital Outlay $11,584 $1,391,158 $13,925 $13,925
Debt Services $225,873 $225,200 – –
EXPENDITURES TOTAL $34,703,353 $40,503,907 $40,777,669 $42,364,708
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
119
Administration Division
General Fund & Special Revenue Fund
Comprised of the Of{ce of the Chief and Professional Standards collectively manages department training, recruitment, background and internal investigations, |eet and building maintenance, procurement, and special projects Revenues
Interest & Rent $46,362 $11,900 $26,800 $32,100
Intergov Revenue $152,952 $575,820 $486,046 $315,000
Reimb & Misc $9,806 $4,000 $2,000 $2,000
REVENUES TOTAL $209,120 $591,720 $514,846 $349,100
Expenditures
Personnel Services $2,522,079 $3,338,226 $2,401,566 $2,499,248 Transportation & Training $593,263 $444,500 $436,500 $423,500 Repairs and Maintenance $32,611 $7,300 $5,300 $5,300
Materials, Supplies, and
Services $1,051,840 $1,346,613 $1,130,438 $1,129,518
Capital Outlay $11,584 $1,351,328 – –
Debt Services $2,407 $2,200 – –
EXPENDITURES TOTAL $4,213,785 $6,490,167 $3,973,804 $4,057,566 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 120
Investigation Division
General Fund
Includes Investigations, Community Services, Crime Prevention, Special Enforcement, and Business Services. Responsibilities include: investigations of property crimes, crimes against persons, and sexual assaults; school programs, volunteers, and explorers; community engagement, and special assignments, and budget management, grant oversight and contracting.
Revenues
Permit Fees – – $4,000 $4,000
Reimb & Misc $6,950 – – –
Interfund Revenue – $143,820 – –
REVENUES TOTAL $6,950 $143,820 $4,000 $4,000
Expenditures
Personnel Services $4,930,989 $5,216,958 $6,657,759 $6,958,919 Transportation & Training $2,183 $3,000 $3,000 $3,000
Repairs and Maintenance – $1,000 $1,000 $1,000
Materials, Supplies, and
Services $271,311 $284,770 $405,345 $398,725
Debt Services $84,263 $83,400 – –
EXPENDITURES TOTAL $5,288,746 $5,589,128 $7,067,104 $7,361,644
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
121
Operations Division
General Fund
Comprised entirely of uniformed personnel, this division partners with the community to work collectively on proactive problem solving to address the causes of crime while positively impacting quality of life issues and community concerns.
Revenues
Other Taxes $637,588 $600,000 $600,000 $612,000
Fines & Forfeitures $2,400 $34,000 $34,000 $34,000
Intergov Revenue $199,526 $150,000 $162,000 $180,000
Reimb & Misc $60,442 $189,000 $189,000 $189,000
REVENUES TOTAL $899,955 $973,000 $985,000 $1,015,000
Expenditures
Personnel Services $16,376,066 $18,291,739 $17,778,880 $18,554,112 Transportation & Training $25,676 $5,000 $22,500 $2,500 Repairs and Maintenance $682,340 $682,340 $716,460 $752,280 Materials, Supplies, and
Services $281,413 $169,030 $136,260 $107,490
Capital Outlay – – $13,925 $13,925
Debt Services $112,868 $113,200 – –
EXPENDITURES TOTAL $17,478,363 $19,261,309 $18,668,025 $19,430,307 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 122
Special Operations Division
General Fund
Includes the Traf{c, Animal Services, Special Events, and Alternate Response units, and is responsible for traf{c, parking, permits, animal protection, humane education, permitted events, and homeless and mental health outreach.
Revenues
Permit Fees $6,064 $7,000 $7,000 $7,000
Fines & Forfeitures $173,756 $150,000 $150,000 $150,000 Intergov Revenue $10,296 – – –
Charges for Services $52,393 $30,000 $42,600 $50,100
Reimb & Misc $44,996 $46,000 $46,000 $46,000
Interfund Revenue $26,854 $35,000 $35,000 $35,000
REVENUES TOTAL $314,358 $268,000 $280,600 $288,100
Expenditures
Personnel Services $2,820,740 $3,007,950 $5,115,782 $5,390,075 Transportation & Training $10,245 $5,000 $8,000 $8,000
Repairs and Maintenance – $1,200 $1,200 $1,200
Materials, Supplies, and
Services $1,018,271 $1,342,300 $1,209,452 $1,221,052
Debt Services $26,336 $26,400 – –
EXPENDITURES TOTAL $3,875,592 $4,382,850 $6,334,434 $6,620,327 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 123
Support Services Division
General Fund
Includes the Department’s records and communications areas providing ef{cient and personal responses to every request for service. Dispatchers answer all 911 emergency calls and send police personnel as needed to all calls for service.
Revenues
Permit Fees $4,400 $4,000 $4,000 $4,000
Intergov Revenue $926 – – –
Charges for Services $14,720 $11,000 $12,000 $13,000
Reimb & Misc $21,283 $14,365 $25,500 $28,000
REVENUES TOTAL $41,328 $29,365 $41,500 $45,000
Expenditures
Personnel Services $3,672,616 $4,557,082 $4,554,112 $4,713,175 Materials, Supplies, and
Services $174,250 $183,540 $180,190 $181,690
Capital Outlay – $39,830 – –
EXPENDITURES TOTAL $3,846,866 $4,780,452 $4,734,302 $4,894,865 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 124
Performance Measures
Police Department
125
This page has been
intentionally left blank.
126
ʶˢˠˠ˨ˡ˜˧ˬ˔ˡ˗ʸ˖ˢˡˢˠ˜˖
ʷ˘˩˘˟ˢˣˠ˘ˡ˧
127
This page has been
intentionally left blank.
128
Operating Budget
The Community and Economic Development Department helps provide a sustainable, well-designed physical environment, transportation network, and thriving local economy to preserve and enhance the quality of life in Pleasanton. The Department includes the Planning, Building and Safety, Economic Development, Code Enforcement, Transportation/Traf{c Engineering, Permit Center, and Housing divisions. Together, these form a professional team focused on delivering exceptional customer service and an integrated approach to development services. By employing collaborative and innovative strategies, the department effectively manages Pleasanton’s long-term and short-term development programs and ensures a safe and ef{cient transportation system for all users.
Community & Economic
Development
129
130
Department Goals &
Objectives
Department
Accomplishments
Work collaboratively with Stoneridge
Shopping Center property owners to
develop a comprehensive long-range
plan for redevelopment of the mall
Process incoming residential project
applications under the Housing Sites
Conformance Analysis process,
including those on recently designated
housing element sites and in East
Pleasanton
Incorporate the Economic Development
Division as part of the new Community
and Economic Development
Department to support an integrated
approach to permitting, zoning, and
land use
Facilitate updates to processes and
municipal code changes that support
desired commercial investment in key
sectors
Implement strategies identi{ed in the
Economic Development Strategic Plan
to attract new retail to the city
Continue to implement key programs of
CAP 2.0 including preparation of Fleet
Electri{cation Plan, Municipal Solar
Storage Project, and Electric Vehicle
Fast Charging Hubs at City facilities
Advance pedestrian and bicycle
improvements by updating the
Pedestrian and Bicycle Master Plan and
supporting the high priority projects
along West Las Positas Boulevard, Santa
Rita Road, and near I-580
Advance efforts to develop a planning
framework for East Pleasanton area and
address key issues around potential
annexation, infrastructure needs, and
development of various East Pleasanton
properties
Develop a concept plan and coordinate
with BART to advance efforts to issue a
developer RFP for the east DublinPleasanton BART station Continue to support planning for the
Valley-Link project
Continue to support implementation of
the I-680 express lane projects
Complete design improvements at
Sunol Boulevard and I-680 Interchange
Complete Accela SaaS Migration
(Cloud)/User Interface
Approved Stoneridge Mall Development
Agreement amendment, including
securing $200,000 in funding to help
support comprehensive planning
Continued implementation of Climate
Action Plan 2.0, including adoption of a
leaf-blower ordinance, installation of fast
electric vehicle charging stations and
initiating an RFP to perform
comprehensive municipal facility
updates related to reducing energy use
Adopted a comprehensive
Development Impact Fee update,
establishing new Capital Facilities,
Transportation Impact, and Sewer and
Water Connection fees
Adopted a comprehensive update of
the Inclusionary Zoning Ordinance, to
create more enforceable standards and
support construction of affordable
housing
Entitled 255 units of residential
development and facilitated building
permit issuance for construction of the
305-unit Avalon Bay residential
development
Continued improvements to the Accela
online permit portal allowing for
simpli{ed, on-demand trade, building,
and {re permit submittals
Created a new retail development
program to attract and retain
businesses in targeted retail categories
Assisted more than 400 Pleasanton
residents through housing programs
and provided support for unsheltered
Pleasanton residents
Increased the affordable housing supply
with the construction of a 2-bed/2-bath
ADU for residents with
intellectual/developmental disabilities,
approval of nine affordable for-sale units
in the 3200 Hopyard project, and
approval of 18 age-restricted senior for
sale units in the Merritt project
Installed and energized the Valley
Avenue at Northway Traf{c Signal
Completed traf{c improvements to
support the Costco opening
Continued design of W Las Positas Blvd
Multimodal Reconstruction Project,
including completion of 65 percent of
the plans.
131
132
Personnel Summary
133
Personnel Summary (Continued)
134
Department Overview
Operating Budget
Revenues
Permit Fees $5,110,109 $6,277,000 $6,833,000 $5,188,500 Intergov Revenue $1,321,496 $574,137 $580,679 $580,935
Charges for Services $153,492 $184,000 $154,000 $154,000 Reimb & Misc $3,602,461 $1,181,239 $1,155,788 $1,154,834 Interfund Revenue $47,471 $243,346 $254,910 $267,210
REVENUES TOTAL $10,235,030 $8,459,722 $8,978,377 $7,345,479 Expenditures
Personnel Services $8,257,554 $8,775,922 $9,081,114 $9,405,971 Transportation & Training $52,643 $52,719 $53,669 $50,069 Repairs and Maintenance $798,303 $807,086 $846,620 $875,130 Materials, Supplies, and
Services $2,792,298 $3,866,397 $3,265,052 $3,160,946
Capital Outlay – $350,000 $350,000 $350,000
Debt Services $75,937 $74,343 $65,843 $65,843
EXPENDITURES TOTAL $11,976,734 $13,926,467 $13,662,299 $13,907,959 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 135
Administration Division
General Fund
The Administration Division is responsible for the oversight and business and clerical operations of the department, including budget, personnel administration, interdivision coordination, and special projects.
Revenues
Reimb & Misc $1,070 $46,000 $30,000 $30,000
REVENUES TOTAL $1,070 $46,000 $30,000 $30,000
Expenditures
Personnel Services $934,065 $997,715 $1,330,962 $1,381,568 Transportation & Training $7,543 $4,900 $4,900 $4,900
Repairs and Maintenance $4,642 $4,642 $4,870 $5,110
Materials, Supplies, and
Services $204,585 $67,735 $67,735 $67,735
EXPENDITURES TOTAL $1,150,836 $1,074,992 $1,408,467 $1,459,313 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 136
Permit Center Division
General Fund
The Permit Center is the portal for customers to interact with the Community Development Department. The Permit Center Counter and online portal, www.PleasantonPermits.com, enable the community to obtain development information and process development applications and permits with the Planning, Building and Safety, Engineering, and Traf{c Engineering Divisions.
Revenues
Permit Fees $16,626 – $18,500 $19,000
Intergov Revenue $190,000 – – –
Reimb & Misc $342 – – –
REVENUES TOTAL $206,968 – $18,500 $19,000
Expenditures
Personnel Services $63,967 $154,515 $51,801 $53,511
Transportation & Training $3,348 $3,500 $3,500 $3,500
Materials, Supplies, and
Services $125,184 $285,200 $223,309 $234,391
EXPENDITURES TOTAL $192,499 $443,215 $278,610 $291,402
Traf{c Engineering Division
General Fund & Internal Service Fund
The Traf{c Engineering Division is responsible for planning and operating roadways, sidewalks, and bikeways to provide for the safe and ef{cient movement of people, goods, and services within Pleasanton.
Revenues
Permit Fees – $2,500 – –
Reimb & Misc $53,585 $10,000 $10,000 $10,000
Interfund Revenue $41,029 $233,055 $244,610 $256,910
REVENUES TOTAL $94,614 $245,555 $254,610 $266,910
Expenditures
Personnel Services $1,602,162 $1,652,015 $1,597,954 $1,649,568 Transportation & Training $8,997 $4,780 $4,780 $4,780
Repairs and Maintenance $761,809 $770,092 $807,810 $834,410 Materials, Supplies, and
Services $417,845 $459,225 $397,025 $397,025
Capital Outlay – $350,000 $350,000 $350,000
Debt Services $8,773 $8,500 – –
EXPENDITURES TOTAL $2,799,586 $3,244,612 $3,157,569 $3,235,783
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
137
Planning Division
General Fund
The Planning Division protects and promotes public health, safety, and general welfare through the development and administration of the General Plan and other planning, zoning, transportation, and environmental regulations.
Revenues
Permit Fees $160,970 $174,500 $169,500 $169,500
Intergov Revenue $120,000 – – –
Reimb & Misc $510,718 $125,000 $125,000 $125,000
REVENUES TOTAL $791,688 $299,500 $294,500 $294,500
Expenditures
Personnel Services $2,689,811 $2,715,061 $2,490,243 $2,585,860 Transportation & Training $3,626 $11,150 $11,200 $11,200 Repairs and Maintenance $9,116 $9,116 $9,570 $10,040
Materials, Supplies, and
Services $306,519 $257,135 $232,135 $232,135
EXPENDITURES TOTAL $3,009,072 $2,992,462 $2,743,148 $2,839,235 Building and Safety Division
General Fund & Special Revenue Fund
The Building and Safety Division safeguards against faulty or inappropriate building, plumbing, mechanical, and electrical construction practices. Through plan review and {eld inspection, the division provides guidance in compliance with state and local construction laws as they relate to seismic, wind, and {re life safety.
Revenues
Permit Fees $4,599,305 $4,350,000 $4,500,000 $4,500,000 Intergov Revenue $31,506 $30,000 $30,000 $30,000
Charges for Services $153,492 $184,000 $154,000 $154,000 Reimb & Misc $3,528 – – –
REVENUES TOTAL $4,787,831 $4,564,000 $4,684,000 $4,684,000 Expenditures
Personnel Services $2,312,467 $2,479,137 $2,399,590 $2,479,970 Transportation & Training $24,518 $18,189 $21,789 $18,189 Repairs and Maintenance $20,878 $20,878 $21,920 $23,020 Materials, Supplies, and
Services $703,635 $1,243,000 $1,067,250 $1,062,750
EXPENDITURES TOTAL $3,061,497 $3,761,204 $3,510,549 $3,583,929 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 138
Housing Division
General Fund & Special Revenue Fund
The Housing Division coordinates the development and maintenance of affordable rental and ownership housing in Pleasanton and administers a range of programs including {rsttime homebuyer assistance through a loan program and homebuyer education, housing rehabilitation, and housing and human services grants for non-pro{t agencies. Additionally, the division provides resources and information on below-market rental housing, housing and services for seniors and persons with disabilities, and fair housing and tenant-landlord services.
Revenues
Permit Fees $333,208 $1,750,000 $2,145,000 $500,000
Intergov Revenue $949,866 $514,137 $520,679 $520,935
Reimb & Misc $1,917,811 $650,239 $640,788 $639,834
Interfund Revenue $6,442 $10,291 $10,300 $10,300
REVENUES TOTAL $3,207,327 $2,924,667 $3,316,767 $1,671,069 Expenditures
Personnel Services $450,222 $405,416 $427,307 $448,439
Transportation & Training – $2,000 $2,000 $2,000
Repairs and Maintenance $164 $164 $170 $180
Materials, Supplies, and
Services $807,377 $1,324,602 $1,060,598 $964,910
Debt Services $67,164 $65,843 $65,843 $65,843
EXPENDITURES TOTAL $1,324,928 $1,798,025 $1,555,918 $1,481,372
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
139
Economic Development Division
General Fund & Special Revenue Fund
The Economic Development division focuses on the retention, expansion, and attraction of businesses within Pleasanton. This division manages programs that support local businesses and further develop and enhance the business environment, coordinates and supports permit and process improvements to facilitate business development, and works in partnership with local and regional organizations, and with other City divisions to promote the economic vitality of the community.
Revenues
Intergov Revenue $30,124 $30,000 $30,000 $30,000
Reimb & Misc $1,115,407 $350,000 $350,000 $350,000
REVENUES TOTAL $1,145,531 $380,000 $380,000 $380,000
Expenditures
Personnel Services $204,860 $372,063 $783,257 $807,056
Transportation & Training $4,612 $8,200 $5,500 $5,500
Repairs and Maintenance $1,694 $2,194 $2,280 $2,370
Materials, Supplies, and
Services $227,152 $229,500 $217,000 $202,000
EXPENDITURES TOTAL $438,317 $611,957 $1,008,037 $1,016,926
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
140
Performance Measures
Community & Economic Development Department
141
142
143
This page has been
intentionally left blank.
144
ʿ˜˕˥˔˥ˬ˔ˡ˗˅˘˖˥˘˔˧˜ˢˡ
145
This page has been
intentionally left blank.
146
Operating Budget
With a vision to inspire a vibrant community where everyone belongs, the Library and Recreation Department is structured around the values of service, integrity, inclusion, innovation, and collaboration. The department oversees library services; senior services; the City’s performing, literary, visual, cultural, and public art activities; environmental education; preschool; facility rentals; a variety of indoor and outdoor camps, classes, events, sports, and aquatics for all ages; as well as cemetery, human services, and paratransit services.
Library & Recreation
147
148
Department Goals &
Objectives
Department
Accomplishments
Implement the new City Sponsorship
Program for special events and select
programs
Update Library and Recreation fees in the
City’s Master Fee Schedule to improve
cost recovery
Implement recommendations from the
cemetery operations study
Update the Housing and Human Services
and Community Grant programs to better
meet the needs of the organizations
receiving funding and enhance
operational ef{ciency
Launch the Library and Recreation
outreach vehicle for offsite engagement
with the community
Identify actionable goals relevant to
Library and Recreation in the Eastern
Alameda County Human Services Needs
Assessment and Develop an
Implementation Action Plan
Evaluate, standardize, update, and
promote the departmental volunteer
program to provide empowering
opportunities to the community
Developed a new departmental {ve-year
strategic plan aligned with the City’s
strategic plan
Developed a citywide sponsorship policy
for City programs and facilities
Conducted an operational study and
analysis for the Pleasanton Pioneer
Cemetery
Delivered inclusive programs and services
that met the needs and interests of
Pleasanton’s diverse community
In conjunction with the cities of Dublin
and Livermore, as well as local nonpro{ts,
completed the Eastern Alameda County
Human Services Needs Assessment
In conjunction with the cities of Dublin
and Livermore, as well as local nonpro{ts,
completed the {rst set of improvements
to the grant application process for
improved ef{ciency and impact
Increased 2024 summer reading program
participation at the Pleasanton Public
Library by 123% over prior years
Doubled the number of rentable picnic
sites, enriching the facility rental offerings
Completed transfer of Amador Theater
facility and operations to the Pleasanton
Uni{ed School District
Successfully organized and expanded the
City’s cultural celebration series, fostering
community engagement and inclusivity
throughout Pleasanton
149
150
Personnel Summary
151
Personnel Summary (Continued)
152
Department Overview
Operating Budget
Revenues
Permit Fees – – $500 $500
Intergov Revenue $194,735 $277,273 $277,273 $209,048
Charges for Services $204,529 $255,000 $255,000 $255,000 Reimb & Misc ($111,837) $144,100 $191,100 $193,100
Interfund Revenue $195,288 $104,000 $109,000 $114,000
Recreation Revenue $4,663,652 $5,027,934 $4,725,698 $4,730,698 REVENUES TOTAL $5,146,366 $5,808,307 $5,558,571 $5,502,346 Expenditures
Personnel Services $11,756,547 $12,105,785 $10,786,147 $10,977,688 Transportation & Training $36,998 $94,036 $96,800 $86,800 Repairs and Maintenance $280,025 $284,026 $270,390 $283,470 Materials, Supplies, and
Services $4,009,398 $4,649,891 $4,109,191 $4,140,796
Capital Outlay $300,458 $578,148 $192,000 $192,000
Debt Services $137,835 $129,000 – –
EXPENDITURES TOTAL $16,521,259 $17,840,886 $15,454,528 $15,680,754
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
153
Administration Division
General Fund & Special Revenue Fund
The Library and Recreation Administration team coordinates departmental information for City Council, liaises with four City Commissions, and provides administrative support to the entire department. This group oversees the contracts, budgets, and processes that ensure delivery of quality Library and Recreation services including recreation program registration, library reciprocal lending, facility and picnic rentals, department communications, and operation of the Pleasanton Pioneer Cemetery.
Revenues
Permit Fees – – $500 $500
Charges for Services $1,949 – – –
Reimb & Misc $21,509 $63,000 $110,000 $112,000
Recreation Revenue $61,502 $65,000 $65,000 $70,000
REVENUES TOTAL $84,960 $128,000 $175,500 $182,500
Expenditures
Personnel Services $3,085,844 $2,974,483 $2,378,066 $2,456,848 Transportation & Training $34,794 $77,900 $80,800 $80,800 Repairs and Maintenance $146,676 $146,676 $154,010 $161,710 Materials, Supplies, and
Services $494,580 $696,660 $603,950 $636,830
Capital Outlay – $280,000 – –
Debt Services $67,060 $64,000 – –
EXPENDITURES TOTAL $3,828,954 $4,239,719 $3,216,826 $3,336,188
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
154
Civic Arts Division
General Fund & Special Revenue Fund
The Civic Arts Division provides oversight and supervision of arts and cultural programs throughout the City, including serving as the liaison to the Civic Arts Commission. This division programs the City’s Firehouse Arts Center, coordinates arts and cultural programs, classes, and events for all ages, and oversees the Harrington Gallery and the City’s public art collection.
Revenues
Reimb & Misc $26,480 $15,800 $15,800 $15,800
Interfund Revenue $104,000 $104,000 $109,000 $114,000
Recreation Revenue $1,671,401 $1,758,707 $1,718,707 $1,718,707 REVENUES TOTAL $1,801,882 $1,878,507 $1,843,507 $1,848,507 Expenditures
Personnel Services $1,215,383 $1,198,430 $1,442,775 $1,480,694 Transportation & Training – $136 – –
Repairs and Maintenance $35,443 $35,744 $9,880 $10,100
Materials, Supplies, and
Services $969,741 $1,076,270 $901,518 $901,518
Capital Outlay $78,638 $50,000 $35,000 $35,000
EXPENDITURES TOTAL $2,299,206 $2,360,580 $2,389,173 $2,427,312
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
155
Human Services Division
General Fund & Special Revenue Fund
The Human Services Division provides oversight and supervision of the City’s Senior Center and senior programs (including nonpro{t partners), Pleasanton Rides Program, Recreation for Adults with Developmental Disabilities (RADD), Gingerbread Preschool, Youth and Teen programs and services, homeless liaison services, Alviso Adobe and environmental education, Human Services Commission, Youth Commission, and the Community Grant programs.
Revenues
Intergov Revenue $58,421 – – –
Reimb & Misc $73,296 $10,800 $10,800 $10,800
Recreation Revenue $1,116,613 $1,136,940 $1,136,940 $1,136,940 REVENUES TOTAL $1,248,330 $1,147,740 $1,147,740 $1,147,740 Expenditures
Personnel Services $1,820,517 $1,748,791 $1,392,949 $1,440,356 Repairs and Maintenance $10,438 $14,138 $14,660 $15,210 Materials, Supplies, and
Services $423,101 $346,952 $430,452 $445,452
EXPENDITURES TOTAL $2,254,056 $2,109,881 $1,838,061 $1,901,018
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
156
Library Division
General Fund & Special Revenue Fund
The Library Division provides oversight and supervision for the services and programs of the Library, including serving as liaison to the Library Commission and Friends of the Library.
Staff provides information and research assistance, literacy and English as a Second Language (ESL) services, computer and technology support, and library programming for patrons of all ages. This division selects, procures, and catalogs new library materials. It includes the support staff who issue new library cards and manage accounts, check library materials in and out, and return items to their correct position on the shelves.
Revenues
Intergov Revenue $136,314 $172,173 $172,173 $103,948
Charges for Services $10,679 $25,000 $25,000 $25,000
Reimb & Misc $35,260 $47,000 $47,000 $47,000
Interfund Revenue $91,288 – – –
REVENUES TOTAL $273,540 $244,173 $244,173 $175,948
Expenditures
Personnel Services $3,608,541 $3,906,871 $3,593,835 $3,574,002 Transportation & Training $655 $10,000 $10,000 –
Materials, Supplies, and
Services $708,138 $777,655 $583,703 $525,478
Capital Outlay $221,819 $248,148 $157,000 $157,000
Debt Services $70,775 $65,000 – –
EXPENDITURES TOTAL $4,609,928 $5,007,674 $4,344,538 $4,256,480
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
157
Recreation Services Division
General Fund
The Recreation Services Division provides oversight and supervision of sports and aquatics operations throughout the city. This division oversees the City’s Dolores Bengston Aquatic Center, programs sports {elds in conjunction with local sports leagues, is the liaison to the Co-Sponsor Sports User Groups, and partners with the Pleasanton Uni{ed School District to co-operate all three middle school gyms.
Revenues
Reimb & Misc $4,893 $7,500 $7,500 $7,500
Recreation Revenue $1,814,135 $2,067,287 $1,805,051 $1,805,051 REVENUES TOTAL $1,819,028 $2,074,787 $1,812,551 $1,812,551 Expenditures
Personnel Services $1,970,672 $2,146,387 $1,966,203 $2,013,067 Transportation & Training $1,549 $6,000 $6,000 $6,000
Repairs and Maintenance $21,458 $21,458 $22,530 $23,670 Materials, Supplies, and
Services $1,097,956 $1,373,316 $1,273,530 $1,305,480
EXPENDITURES TOTAL $3,091,635 $3,547,161 $3,268,263 $3,348,217
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
158
Cemetery
Enterprise Fund
This division oversees the Pleasanton Pioneer Cemetery, with support from contractors. The program currently operates with a General Fund subsidy and is actively selling plots, providing burials, and conducting grounds maintenance.
Revenues
Charges for Services $191,901 $230,000 $230,000 $230,000 Reimb & Misc ($274,863) – – –
REVENUES TOTAL ($82,961) $230,000 $230,000 $230,000
Expenditures
Personnel Services $38,616 $31,045 $12,320 $12,721
Materials, Supplies, and
Services $315,881 $379,038 $316,038 $326,038
EXPENDITURES TOTAL $354,497 $410,083 $328,358 $338,759
Paratransit
Enterprise Fund
Pleasanton Rides provides special transportation for Pleasanton residents aged 70 and over.
The City offers door-to-door service (advance reservations required) within the City, and to selected medical locations in Dublin, Livermore, and San Ramon. This service is offered through a contractor and supported fully by Measure BB.
Revenues
Intergov Revenue – $105,100 $105,100 $105,100
Reimb & Misc $1,588 – – –
REVENUES TOTAL $1,588 $105,100 $105,100 $105,100
Expenditures
Personnel Services $16,974 $99,779 – –
Repairs and
Maintenance $66,010 $66,010 $69,310 $72,780
EXPENDITURES TOTAL $82,984 $165,789 $69,310 $72,780
ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
159
Performance Measures
Library & Recreation Department
160
161
162
˃˨˕˟˜˖ˊˢ˥˞˦
163
This page has been
intentionally left blank.
164
Operating Budget
The Public Works Department plays a vital role in maintaining and enhancing the City's infrastructure and services to foster a safe, sustainable, and attractive environment. The department consists of eight divisions: Administration, Customer Service & Utility Billing, Engineering, Environmental Services, Operations and Maintenance, Parks, Utilities, and Waste and Recycling.
The Operations and Maintenance Division sustains City functions by maintaining public facilities, managing the municipal |eet, and ensuring safe, well-maintained streets. The Parks Division manages street trees, parks, and trails, including the administration of the Callippe Preserve Golf Course. The Utilities Division and the Environmental Services Division oversee essential services such as water distribution, wastewater collection, and stormwater management while ensuring compliance with state regulations to provide safe, reliable water resources for the community. This division also manages water conservation programs to promote sustainability and ef{cient resource use. The Public Works Department recently integrated Waste and Recycling, which manages waste collection, recycling efforts, and sustainability initiatives. The Engineering Division designs, constructs, and maintains public infrastructure while reviewing private development projects. Its responsibilities include Geologic Hazard Abatement Districts, Landscape Maintenance Districts, construction management, landscape architecture, and the Heritage Tree Preservation Program.
Public Works
165
166
Department Goals &
Objectives
Department
Accomplishments
Assess long-term water supply options to
ensure sustainable resources
Address evolving regulatory standards
and implement new programs to meet
regulatory requirements for water,
wastewater, storm systems, and water
conservation
Evaluate and update enterprise revenue
sources, including utility rates and
connection and user fees
Update the Sewer System Master Plan to
re|ect current and future operations and
identify system improvements and
necessary maintenance
Identify key projects for the anticipated
10-year Capital Improvement Plan (CIP)
Deliver Capital Improvement Projects on
time and within budget allocations
Apply conditions of approval for private
development projects, ensuring
compliance with grading, drainage,
landscape, utility, and roadway design
standards
Review private development plans to
ensure alignment with state regulations,
city standards, and best engineering
practices
Develop an Asset Management Plan to
address comprehensive long-term
planning for maintenance, renovation,
repair and/or replacement of
infrastructure and public facilities
Inspect Capital Improvement and private
development projects for compliance
with approved plans and speci{cations
Develop and adopt an Urban Forest
Master Plan
Design solutions to repair and mitigate
damages caused by the 2023 winter
storms
Improve city’s diversion rate: percentage
of waste that is diverted from land{ll or
incineration through recycling,
composting, or other means of recovery
Finalize agreement for recyclable
materials processing and diversion
services in preparation for new statewide
recycling policy (SB 54) that mandates
higher levels of material recovery, and an
improved market for recycling services
Updated City Standards and
Speci{cations
Implemented the Capital Improvement
Program (CIP) Prioritization Program and
developed the FY26-30 CIP Budget
Completed initial phases of the Asset
Management Plan
Completed the Johnson Drive Economic
Development Zone Improvements on I680-Stoneridge Drive bridge and Johnson Drive
Upgraded water lines on Bernal Avenue,
Sunol Boulevard, and Stoneridge Drive as
part of Near-Term Water Infrastructure
improvements
Constructed Hopyard Road and Owens
Drive Intersection improvements
Upgraded Library lighting by replacing
lighting controls and installing LED lights
Updated the Urban Forest Master Plan
and Tree Preservation Ordinance
Completed Downtown LED Conversion
Project of 480 street and parking lot
lights
Replaced the Roof at 157 Main Street, remodeled, replaced the HVAC System and converted the Operation Service Center
(OSC) Sewer Building to new of{ce space
for two PWD Divisions
Completed Refuse Vehicle Street
Maintenance Cost Analysis and
implemented a Vehicle Impact Fee
Achieved 98 percent SB 1383 compliance
rate for commercial and multi-family
garbage accounts
Completed the Water System
Management Plan to ensure long-term
sustainability of the City's water program
Completed the Sewer System
Management Plan audit and update as
required by the State Water Resources
Control Board
Upgraded the utility billing web portal to
improve the customer service experience
with new features such as paperless
billing and additional payment options
with Auto Pay
167
168
Personnel Summary
169
Personnel Summary (Continued) (Continued)
170
Department Overview
Operating Budget
Revenues
Franchise Fees – $600,000 $632,940 $632,940
Permit Fees $628,953 $401,500 $441,500 $441,500
Fines & Forfeitures $33,700 – $25,000 $25,000
Intergov Revenue $386,618 $304,000 $304,000 –
Charges for Services $56,727,624 $64,915,563 $67,427,845 $70,392,452 Reimb & Misc $3,021,467 $2,326,327 $2,322,472 $2,323,772 Interfund Revenue $5,861,566 $4,270,888 $5,169,834 $5,372,694 REVENUES TOTAL $66,659,927 $72,818,278 $76,323,591 $79,188,358 Expenditures
Personnel Services $24,547,767 $28,306,756 $29,999,999 $32,553,107 Transportation & Training $1,430,395 $1,400,195 $1,352,850 $1,352,850 Repairs and Maintenance $6,316,599 $3,805,892 $3,125,010 $3,192,070 Materials, Supplies, and
Services $57,327,019 $58,781,201 $62,030,860 $63,816,296 Capital Outlay $1,282,171 $7,246,337 $7,437,632 $5,714,700 Debt Services $972,098 $1,590,203 $1,391,585 $1,393,084 EXPENDITURES TOTAL $91,876,049 $101,130,584 $105,337,936 $108,022,107
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
171
Administration Division
General Fund
The Administration Division oversees personnel management, budget development and monitoring, accounts payable, contract administration and management, department policies and procedures and City Council priorities and agenda reports. The division also fosters collaboration with vendors and regional agencies to maintain strong partnerships that bene{t the community.
Revenues
Reimb & Misc $165,574 $150,000 $150,000 $150,000
Interfund Revenue – $85,600 – –
REVENUES TOTAL $165,574 $235,600 $150,000 $150,000
Expenditures
Personnel Services $711,434 $561,579 $593,079 $614,367
Transportation & Training $12,371 $23,600 $19,400 $19,400 Repairs and Maintenance $129,404 $6,572 $6,900 $7,250
Materials, Supplies, and
Services $143,905 $322,800 $330,000 $330,000
Capital Outlay – $7,000 $7,000 $7,000
Debt Services $85,865 $79,000 – –
EXPENDITURES TOTAL $1,082,980 $1,000,551 $956,379 $978,017
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
172
Waste & Recycling Division
Special Revenue Fund
This division is responsible for the City’s comprehensive solid waste collection and recycling program and ensuring state regulatory compliance for 20,000 residential accounts and 1,000 multifamily and commercial business accounts. Pleasanton residents participate in the City’s garbage and recycling curbside collection service provided by the City’s franchisee, Pleasanton Garbage Service.
Revenues
Franchise Fees – $600,000 $632,940 $632,940
Intergov Revenue $100,725 $304,000 $304,000 –
Reimb & Misc $1,106,611 $1,579,400 $1,446,460 $1,446,460 REVENUES TOTAL $1,207,336 $2,483,400 $2,383,400 $2,079,400 Expenditures
Personnel Services $206,272 $680,790 $744,043 $770,820
Transportation & Training $103,570 – $9,600 $9,600
Repairs and Maintenance – $100,000 – –
Materials, Supplies, and
Services $254,799 $820,000 $814,600 $704,600
Debt Services $31,410 $31,000 – –
EXPENDITURES TOTAL $596,051 $1,631,790 $1,568,243 $1,485,020
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
173
Callippe Golf
Enterprise Fund
Revenues
Charges for Services $6,314,582 $6,348,050 $6,522,933 $6,783,850 Reimb & Misc $5,133 – – –
REVENUES TOTAL $6,319,715 $6,348,050 $6,522,933 $6,783,850 Expenditures
Repairs and Maintenance $1,750 – – $10,000
Materials, Supplies, and
Services $4,884,585 $5,324,221 $5,702,012 $5,817,140
Capital Outlay $431,096 $395,000 – $445,000
EXPENDITURES TOTAL $5,317,431 $5,719,221 $5,702,012 $6,272,140
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
174
Parks Division
General Fund, Internal Service Funds & Special Revenue Fund The Parks Division maintains over 385 developed acres of parkland at 46 sites, landscaping at City facilities, and 832 acres of open space, which includes 23 miles of trails. This division also manages the City’s urban forest, weed abatement, street median maintenance, irrigation, and other projects.
Revenues
Intergov Revenue $2,000 – – –
Charges for Services $9,013 – – –
Reimb & Misc $86,034 $102,500 $102,500 $102,500
Interfund Revenue $1,038,003 $308,000 $323,000 $339,000 REVENUES TOTAL $1,135,049 $410,500 $425,500 $441,500
Expenditures
Personnel Services $5,541,014 $6,000,091 $6,084,174 $6,358,168 Transportation & Training $121,568 $127,000 $144,000 $144,000 Repairs and Maintenance $1,123,271 $508,872 $435,620 $437,450 Materials, Supplies, and
Services $4,834,880 $5,309,880 $5,250,700 $5,025,100
Capital Outlay $122,696 $2,400 $2,400 $2,400
Debt Services $788 $790 – –
EXPENDITURES TOTAL $11,744,216 $11,949,033 $11,916,894 $11,967,118
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
175
Streets & Traf{c Safety Division
General Fund & Internal Service Funds
Streets and Traf{c Safety is responsible for maintaining and improving the City’s transportation infrastructure, ensuring safety, functionality, and accessibility for all users.
The division oversees the maintenance of City streets, sidewalks, sound walls, streetlights, pathway and parking lot lights, traf{c signs, and pavement markings. Additional responsibilities include street sweeping, storm drain maintenance and responding to roadway emergencies. The division also fabricates and installs traf{c signs, banners, and other traf{c-related materials to enhance safety and compliance.
Revenues
Charges for Services $3,117 $20,000 – –
Reimb & Misc $73,910 $22,500 $22,500 $22,500
Interfund Revenue $139,769 $235,064 $148,800 $153,200
REVENUES TOTAL $216,796 $277,564 $171,300 $175,700
Expenditures
Personnel Services $2,563,099 $2,811,701 $2,683,980 $2,798,729 Transportation & Training $49,088 $40,700 $40,700 $40,700 Repairs and Maintenance $782,350 $788,768 $799,570 $810,920 Materials, Supplies, and
Services $901,001 $832,450 $710,950 $729,850
Capital Outlay $2,416 $172,400 $172,400 $172,400
Debt Services $788 $790 – –
EXPENDITURES TOTAL $4,298,742 $4,646,809 $4,407,600 $4,552,599
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
176
Facilities and Fleet Division
General Fund & Internal Service Fund
Facilities is responsible for maintaining and operating 139 publicly owned structures, encompassing more than 500,000 square feet of of{ce, recreational, and operational space.
This includes custodial services, mechanical systems, building repairs, and the maintenance of specialized systems such as pools, pump systems, and HVAC units.
Fleet manages 325 vehicles and 120 pieces of equipment, providing procurement, preventive maintenance, repairs, surplus management, compliance with California Air Resources Board (CARB) regulations, Basic Terminal Inspections, and DMV registration.
Fleet supports City operations by maintaining reliable facilities and equipment while aligning with sustainability and regulatory requirements.
Revenues
Reimb & Misc $141,682 $42,500 $66,900 $68,200
Interfund Revenue $2,843,342 $2,425,794 $2,622,040 $2,743,200 REVENUES TOTAL $2,985,024 $2,468,294 $2,688,940 $2,811,400 Expenditures
Personnel Services $2,630,209 $2,952,551 $3,120,951 $3,252,321 Transportation & Training $998,347 $955,600 $904,900 $904,900 Repairs and Maintenance $2,786,233 $2,117,622 $1,587,420 $1,628,910 Materials, Supplies, and
Services $2,259,372 $2,278,935 $2,237,475 $2,294,600
Capital Outlay $356,575 $4,030,537 $5,080,832 $2,917,900 Debt Services $39,549 $278,623 $277,835 $277,834
EXPENDITURES TOTAL $9,070,285 $12,613,868 $13,209,413 $11,276,465
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
177
Utilities Division
Enterprise Fund
Utilities operates and maintains the City-owned potable water, recycled water, sewer, and storm drainage systems. This division is responsible for public health and safety compliance, infrastructure planning, capital improvement projects, and water supply planning. The potable water system includes 16 pressure zones, 20 reservoirs, 12 pump stations, and 340 miles of piping. The sewer system includes 11 pump stations and 260 miles of piping. The storm drainage system runs 196 linear miles, with four lift stations.
Customer Service & Utility Billing Division
Enterprise Fund
Customer Service and Utility Billing provides administrative and customer service for the Public Works Department and community, including work requests, utility billing services for approximately 22,600 customers, and dog licenses.
Environmental Services Division
Enterprise Fund
Environmental Services provides oversight of recycled water connections, water conservation and education, back|ow
protection, industrial and storm water inspections, and regulatory compliance.
Water
Enterprise Fund & Debt Services Fund
Revenues
Intergov Revenue $148,825 – – –
Charges for Services $30,674,639 $37,161,768 $39,283,307 $41,432,889 Reimb & Misc $37,839 $103,185 $196,370 $196,370
Interfund Revenue $665,104 $431,041 $687,500 $721,700
REVENUES TOTAL $31,526,406 $37,695,994 $40,167,177 $42,350,959 Expenditures
Personnel Services $5,070,598 $5,729,749 $6,823,983 $8,388,708 Transportation & Training $86,105 $129,000 $119,500 $119,500 Repairs and Maintenance $425,872 $151,000 $151,000 $151,000 Materials, Supplies, and
Services $27,211,296 $27,300,530 $29,034,417 $30,379,660 Capital Outlay $48,900 $889,000 $800,000 $1,075,000
Debt Services $213,896 $1,200,000 $1,113,750 $1,115,250 EXPENDITURES TOTAL $33,056,667 $35,399,279 $38,042,650 $41,229,118
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
178
Sewer
Enterprise Fund
Revenues
Intergov Revenue $83,392 – – –
Charges for Services $16,781,934 $17,932,310 $18,470,279 $19,024,387 Reimb & Misc $11,458 – – –
Interfund Revenue $403 $2,500 $2,500 $2,500
REVENUES TOTAL $16,877,187 $17,934,810 $18,472,779 $19,026,887 Expenditures
Personnel Services $2,180,857 $2,798,606 $3,293,349 $3,455,231 Transportation & Training $38,875 $90,000 $80,000 $80,000 Repairs and Maintenance $1,008,711 $87,000 $87,000 $87,000 Materials, Supplies, and
Services $13,731,706 $13,484,300 $14,488,000 $15,146,203 Capital Outlay $70,782 $1,750,000 $1,375,000 $1,095,000 EXPENDITURES TOTAL $17,030,930 $18,209,906 $19,323,349 $19,863,434 Storm Drain
Enterprise Fund
Revenues
Intergov Revenue $51,676 – – –
Charges for Services $528,755 $530,000 $530,000 $530,000 Reimb & Misc $6,310 – – –
Interfund Revenue $357,830 $200,000 $457,000 $457,000
REVENUES TOTAL $944,570 $730,000 $987,000 $987,000
Expenditures
Personnel Services $636,841 $931,916 $772,028 $821,545
Transportation & Training $3,612 $8,295 $7,750 $7,750
Repairs and Maintenance $17,518 $4,000 $13,500 $13,500
Materials, Supplies, and
Services $971,950 $904,199 $947,644 $961,405
EXPENDITURES TOTAL $1,629,922 $1,848,410 $1,740,922 $1,804,200 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
179
Recycled Water
Enterprise Fund & Debt Services Fund
Revenues
Charges for Services $2,415,584 $2,923,435 $2,621,326 $2,621,326 Reimb & Misc $128,030 – – –
REVENUES TOTAL $2,543,614 $2,923,435 $2,621,326 $2,621,326 Expenditures
Personnel Services $590,385 $657,093 $647,146 $676,671
Transportation & Training $401 $9,500 $9,500 $9,500
Materials, Supplies, and
Services $1,159,987 $1,365,333 $1,457,733 $1,462,533
Debt Services $599,803 – – –
EXPENDITURES TOTAL $2,350,577 $2,031,926 $2,114,379 $2,148,704 ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27 180
General Engineering Services Division
General Fund
This Division is responsible for the administration and coordination of all sections of the division as well as designing and constructing City infrastructure such as roadways; sidewalks; public buildings; and sewer, water, and stormwater facilities.
Revenues
Permit Fees $82,162 $35,000 $35,000 $35,000
Reimb & Misc $2,602 – – –
Interfund Revenue $439,040 $265,000 $533,094 $548,594
REVENUES TOTAL $523,804 $300,000 $568,094 $583,594
Expenditures
Personnel Services $2,328,595 $2,888,769 $2,942,823 $3,043,775 Transportation & Training $16,279 $16,500 $17,500 $17,500 Repairs and Maintenance $19,237 $19,806 $20,640 $21,510 Materials, Supplies, and
Services $624,822 $286,440 $564,000 $564,000
EXPENDITURES TOTAL $2,988,934 $3,211,515 $3,544,963 $3,646,785 GHAD Division
Special Revenue Fund
A GHAD is an assessment district, {nanced by property owners within a given residential subdivision, where geologic hazards exist that are routinely monitored, maintained and repaired when necessary.
Revenues
Reimb & Misc $85,785 $91,197 $91,197 $91,197
Interfund Revenue $1,353 $1,229 $1,200 $1,200
REVENUES TOTAL $87,138 $92,426 $92,397 $92,397
Expenditures
Materials, Supplies, and
Services $46,328 $218,557 $188,063 $193,563
EXPENDITURES TOTAL $46,328 $218,557 $188,063 $193,563
Public Works (Continued)
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
181
Construction Inspection Division
General Fund
This division ensures that all infrastructure construction, whether related to the Capital Improvement Program or Private Development, is constructed as per plans, and City Code and Standards.
Revenues
Permit Fees $409,033 $315,000 $320,000 $320,000
Reimb & Misc $1,900 – – –
Interfund Revenue $355,042 $300,000 $371,600 $382,700
REVENUES TOTAL $765,975 $615,000 $691,600 $702,700
Expenditures
Personnel Services $1,308,741 $1,357,986 $1,299,620 $1,340,290 Repairs and
Maintenance $18,850 $18,850 $19,790 $20,780
EXPENDITURES TOTAL $1,327,591 $1,376,836 $1,319,410 $1,361,070 Landscape Architect Division
General Fund & Special Revenue Fund
This Division is responsible for designing and constructing park and streetscape amenities, as well as administering the Landscape and Lighting Districts and Heritage Tree Ordinance.
Revenues
Fines & Forfeitures $33,700 – $25,000 $25,000
Reimb & Misc $1,084,453 $225,045 $226,545 $226,545
Interfund Revenue $21,680 $16,660 $23,100 $23,600
REVENUES TOTAL $1,139,833 $241,705 $274,645 $275,145
Expenditures
Personnel Services $460,304 $548,696 $558,520 $576,424
Transportation & Training $178 – – –
Repairs and Maintenance $3,402 $3,402 $3,570 $3,750
Materials, Supplies, and
Services $192,614 $323,556 $285,266 $187,643
Capital Outlay $249,706 – – –
EXPENDITURES TOTAL $906,204 $875,654 $847,356 $767,816
ACTUALS FY 2023/24 MODIFIED FY 2024/25 PROJECTED FY 2025/26 PROJECTED FY 2026/27
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
182
Private Development Division
General Fund
This Division applies Conditions of Approval to proposed Private Land Development applications with respect to subdivision mapping, grading, drainage, utility, and roadway design including Stormwater Pollution Prevention during the Entitlement Process. This Division also reviews Private Land Development plans and subdivision maps for conformance with State of California regulations, adopted City standards, and accepted professional engineering practice.
Revenues
Permit Fees $137,758 $51,500 $86,500 $86,500
Reimb & Misc $84,146 $10,000 $20,000 $20,000
REVENUES TOTAL $221,904 $61,500 $106,500 $106,500
Expenditures
Personnel Services $319,418 $387,231 $436,305 $456,058
Materials, Supplies, and
Services $109,773 $10,000 $20,000 $20,000
EXPENDITURES TOTAL $429,191 $397,231 $456,305 $476,058
ACTUALS FY
2023/24
MODIFIED FY
2024/25
PROJECTED FY
2025/26
PROJECTED FY
2026/27
183
Performance Measures - Public Works Department Public Works Department 184
185
This page has been
intentionally left blank.
186
ʴˣˣ˘ˡ˗˜˖˘˦
187
This page has been
intentionally left blank.
188
The City of Pleasanton prepares a {ve-year Capital Improvement Plan (CIP) document that is separate from the Operating Budget document, although the two are closely linked. The CIP, as distinguished from the Operating Budget, is used as a planning tool for the City to identify the capital improvement needs of the City and align those needs with the appropriate timing and {nancing in a way that assures the most responsible and ef{cient use of resources. City Council appropriates funds for the {rst two years of the {ve-year CIP.
The {ve-year CIP is reviewed bi-annually to enable the City Council to reassess projects in the program and allocate funds.
A capital project typically involves the purchase or construction of major {xed assets such as land, buildings and any permanent improvement including additions, replacements and major alterations having a long life expectancy. Additionally, capital projects may apply to:
expenditures which take place over two or more years and require continuing appropriations beyond a single {scal year; systematic acquisitions over an extended period of time or scheduled replacement or maintenance of speci{c elements of physical assets.
Generally, only those items costing $50,000 or more are considered as capital projects. For informational purposes, capital projects are also referred to as capital facilities, CIP projects and capital improvement projects.
For more information on the City’s CIP, please refer to the FY 2025/26 – 2029/30 Capital Improvement Program located on the City’s website: www.cityofpleasantonca.gov. The information provided in this section is from the original adopted FY 2025/26 – 2029/30 CIP.
Appendix A
Capital Improvement
Program Overview
189
Capital Improvement Program Summary
The FY 2025/26 – 2029/30 CIP includes 40 City projects totaling approximately $221.7 million.
The chart below shows the FY 2025/26 and FY 2026/27 Capital Budget by CIP category. (1) Excluding fund transfers and other operating expenditures. 190
Signi{cant Non-recurring Capital Projects
The FY 2025/26 – 2029/30 CIP includes signi{cant non-recurring projects and projects identi{ed through the Capital Improvement Program Process and Prioritization (CIPPP). A project is considered signi{cant if it has a measurable impact on the operating budget, or if the project rarely occurs. Once completed, these projects will be added to the City’s Repair and Replacement Plan or Paving Plan to be amortized over the life of the asset. Future budgets will include funding to cover the amortized replacement cost that will fund future repair and replacement costs. The table below identi{es the annual amortization rate, if applicable. City staff does not expect these projects to impact other areas of the operating budget or expect these projects to result in additional savings or revenues. 191
This page has been
intentionally left blank.
192
The City of Pleasanton has adopted a number of {scal management policies which help guide it through budget preparation and {scal decision-making. In addition to these policies, City staff utilized Strategic Plans, the Fiscal Model, internal Enterprise and Replacement {scal models and the CIP during the preparation of the two-year Operating Budget.
This method of budgeting has served the City well by delivering both relatively balanced budgets and capital improvements that have provided well-planned infrastructure throughout the City’s history. In addition, it allows for long-term planning, quick analysis of impacts of proposed changes and memorializes year-to-year {scal decision making of City Council priorities.
In addition to the documents discussed above, the Finance Department will also prepare a “snapshot” Budget-in-Brief document which provides a condensed version of key information from both the Operating Budget and the CIP. The Budget-in-Brief will be included in the summer or fall 2025 edition of the City’s quarterly newsletter. In addition, all of these documents will be readily available on the City’s website at the following location:
www.cityofpleasantonca.gov
Budget Guidelines
The Operating Budget is developed and managed per the General Financial Policies, beginning on page C–1, and the budgetary principles de{ned below. The purpose of the policy is to establish guidelines for budget development, administration, and management and to set the City’s {scal policies regarding user fee cost recovery goals, capital {nancing and debt management.
The two-year Operating Budget is adopted no later than June 30th for the ensuing {scal year. Every six months after the adoption of the budget, the City Council formally reviews the City’s {scal condition and amends appropriations as needed. The City Council may, by majority vote, amend or supplement the budget at any time after its adoption.
The City Manager and the Director of Finance both have the authority to make administrative adjustments to appropriations as long as there is no funding source incompatibility and provided those changes do not increase the overall appropriations except as allowed in the General Financial Policies. All budget transfers require the approval of the Director of Finance except those affecting personnel which must be approved by the City Manager.
The following budgetary principles guided the City in preparation of this budget:
Appendix B
Budget Preparation Process
193
The City will strive to maintain a balanced budget, with revenues (including transfers from the Pension/ OPEB Obligation Fund, used for budget stabilization purposes) covering ongoing expenditures, for the duration of the two-year budget Revenues are conservatively estimated
The General Fund maintains a 16.7% - 25.0% of annual General Fund operating expenditures as reserves
For capital projects, all associated costs are identi{ed in order to properly consider future {nancial impacts
Each Enterprise and Internal Service Fund re|ects the true cost of operation, including direct and indirect costs of services provided by the General Fund Activities supported by user fees should be fully cost recoverable unless City Council direction calls for less than full recovery (e.g. recreation programs) The City will incorporate all budgetary decisions into its {scal models in order to ensure responsible, long-range {nancial planning
Budget Development
The Finance Department is responsible for both preparing and monitoring the City’s budget. The Finance Department begins the budget process with the development of the Operating and Capital Budget project schedule approximately six months prior to the start of the {scal year. The project schedule ensures the City meets the mandatory June budget adoption deadline.
Development of the budget is dependent upon the City Council Work Plan in prior budget cycles. Departments begin the strategic planning process by developing strategic initiatives which support goals consistent with elements in the General Plan. A City Council Work Plan Workshop is held every two years to gather input from both the public and the City Council on the proposed initiatives. The City Manager uses the results of the workshop to develop the {nal draft of the Work Plan. The {nal draft of the Work Plan is presented to the City Council for approval and adoption.
In FY 2023/24 the City transitioned from a 2-year work plan to a 5-year strategic planning process to identify longer-term goals and priorities to guide City decision-making. The ONE Pleasanton Strategic Plan, adopted by the City Council in October 2023 creates a vision for the future and provide a foundation for the design and implementation of projects and programs. Strategic plan elements will include a clear mission, vision, and values, as well as goals, strategies, and a plan of action for implementation. 194
Budgeting begins in December when a preliminary base budget is generated by the Finance Department to gauge the City’s {nancial status for the upcoming {scal year. In January, a budget kick-off meeting is held for the departments. The Finance Department prepares a budget packet with instructions for the current budget process to ensure the budget is prepared in a manner consistent with current policies and guidelines. The budget packet includes all instructions and schedules.
Between December and February, staff prepares and conducts community engagement to seek input from the public and to provide the City Council with additional community input in advance of budget adoption. In addition to scheduled City Council meetings and budget workshops, the public may participate in surveys, community meetings, and in-person information-gathering events.
Between January and March, departments enter, review and adjust budgets as needed to ensure the proposed two-year budget meets all of the de{ned guidelines. Departments are responsible for entering departmental revenues, budgets for supplies and services and preparing personnel requests and reallocations, required to both achieve the assigned strategic initiatives and maintain quality service levels for the community. The Finance Department is responsible for preparing non-departmental revenue, internal service, debt service, transfer and personnel related budgets.
Budget reports are prepared for review by the Director of Finance and the City Manager.
Once all of the reviews are completed, and all revisions have been incorporated, the Finance Department prepares the Operating Budget and Capital Budget for presentation and review at a Budget Workshop, held at the {rst or second City Council meeting in May to gather input from the City Council and the community. The proposed budget is used to create a ten-year General Fund Fiscal Model. The Finance Department incorporates changes from the Workshop into the draft budget and the {nal Operating Budget and Capital Budget are presented to the City Council at a June meeting for formal adoption.
Budget Calendar
195
Account
A subdivision within a fund for the purpose of classifying transactions.
Accounting System
The total set of records and procedures that are used to record, classify and report information on an entity’s {nancial status and operations.
Accrual Basis of Accounting
The method of accounting under which revenues are recorded when they are earned (regardless of when cash is received) and expenditures are recorded when goods and services are received (regardless if disbursements are actually made at that time).
Activity
A function or a group of related functions for which the budgetary unit is responsible. For the City’s budgeting purposes, an activity is the same as a program.
Actual Cost
The amount paid for an asset; not its market value, insurable value, or retail value. It generally includes freight-in and installation costs but not interest on the debt to acquire it.
Ad Valorem
Latin for according to value. An ad valorem tax is assessed on the value of goods or property; not on the quantity, weight, extent, etc.
Administrative Expense
Often grouped with General Expenses, expenses that are not as easily associated with a speci{c function as are direct costs of providing services.
Adjusting Entry
A journal entry posted to the accounting records at the end of an accounting period to record a transaction or event which was not properly posted during the accounting period for various reasons.
Adopted Budget
A budget which typically has been reviewed by the public and “Adopted” (approved) by the City Council prior to the start of the {scal year.
Appendix B (Continued)
Glossary of Terms
196
Allocable Costs
Costs that are allocable to a particular cost objective to the extent of bene{ts received by such objective.
Allocation
A distribution of funds or an expenditure limit established for an organizational unit.
Annual Comprehensive Financial Report
Prepared in conformity with GAAP as set forth by GASB.
Applied Overhead
Amount of overhead expenses that are charged to either a production job or a department when utilizing a cost accounting system.
Appropriation
An authorization by the City Council to make expenditures and to incur obligations for speci{c amounts and purposes. All annual appropriations lapse at {scal year-end.
Appropriations Limit
As de{ned by Section 8 of Article XIIIB of the California Constitution, enacted by the passage of Proposition 4 at the November 6, 1979 general election, the growth in the level of certain appropriations from tax proceeds are generally limited to the level of the prior year’s appropriation limit as adjusted for changes in cost of living and population. Other adjustments may be made for such reasons as the transfer of services from one government entity to another.
Appropriation Resolution
The of{cial enactment by the City Council to establish legal authority for City of{cials to obligate and expend resources.
Arbitrage
The simultaneous purchase and sale of the same or an equivalent security in order to pro{t from price discrepancies. In government {nance, the most common occurrence of arbitrage involves the investment of the proceeds from the sale of tax-exempt securities in a taxable money market instrument that yields a higher rate, resulting in interest revenue in excess of interest costs.
Assessed Valuation
An of{cial value established for real estate or other property as a basis for levying property taxes.
Assessments
Charges made to parties for actual services or bene{ts received.
Assets
Government-owned property that has monetary value.
Assigned Fund Balance
A portion of unreserved fund balance designed by city policy for a speci{c future use.
Audit
A {nancial audit is a review of the accounting system and {nancial information to determine how government funds were spent and whether expenditures were in compliance with the legislative body’s appropriations. 197
Audit Trail
Documentation which permits the sequence of {nancial transactions to be followed.
Authorized Positions
Those ongoing positions approved in the {nal budget of the preceding year.
Average Cost
Total of all costs for all units bought (or produced) divided by the number of units acquired (or produced).
Balance Available
The amount of money available for appropriation or encumbrance. It is the excess of cash and near- cash assets of a fund over its liabilities and reserves; or commonly called surplus available for appropriation. It is also the unobligated balance of an appropriation which may be encumbered for the purposes of the speci{c appropriation.
Balanced Budget
When there is neither a budget de{cit nor a budget surplus – when revenues equal expenditure.
Baseline Budget
A baseline budget re|ects the anticipated costs of carrying out the current level of service or activities as authorized by the City Council in the current budget. It includes an adjustment for cost increases but does not include changes in service or authorized positions over that authorized by the City Council.
Bond
A municipal bond is a written promise from a local government to repay a sum of money on a speci{c date at a speci{ed interest rate. Bonds are most frequently used to {nance capital improvement projects such as buildings, streets and bridges.
Budget
A plan of {nancial operation, for a set time period, which identi{es speci{c types and levels of services to be provided, proposed appropriations or expenses and the recommended means of {nancing them.
Budget Amendments
The Council has the sole responsibility for adopting the City’s budget and may amend or supplement the budget at any time after adoption by majority vote. The City Manager has the authority to approve line item budgetary transfers between expenditure objects of the budget as long as it is in the same fund.
Budget Calendar
The schedule of key dates which City departments follow in the preparation, revision, adoption, and administration of the budget.
Budget Detail
A support document to the published budget that details the line-item expenditures.
Budget Year
The {scal year for which the budget is being considered; {scal year following the current year.
198
Budgetary Unit
An organizational component budgeted separately, usually a department or a division.
Build America Bonds
Taxable municipal bonds that carry special tax credits and federal subsidies for either the bond issuer or the bondholder. Build America Bonds were created under Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act that U.S. President Barack Obama signed into law on February 17, 2009.
California Society of Municipal Finance Of{cers
The purpose of this organization is to promote professional administration of municipal {nance and to strive for the attainment of professional status of all those responsible for the conduct of the activities of the {eld.
Capital Expenditure
A capital expenditure typically involves items costing $10,000 or more for the purchase or construction of major {xed assets such as land, buildings and any permanent improvement including additions, replacements and major alterations having a long life expectancy.
Capital Improvement Program
A long-range {nancial plan detailing all funding sources and planned expenditures for capital planning and capital improvement projects.
Capital Outlay
Expenditures which result in the acquisition of, or addition to, {xed assets. A capital item is tangible, durable, non-consumable, costs $10,000 or more and has a useful life of more than ten years.
Carryover or Carry Forward
Process of carrying a budgeted and encumbered item from the current {scal year to the next {scal year. For example, a purchase order for a budgeted computer purchase is placed in FY 2023/24. The budget for FY 2024/25 did not include a purchase of a computer. The unspent FY 2024/25 budget is adjusted (increased) for this purchase.
Cash Basis or Cash Method
Is an accounting method that recognizes income and deductions when money is received or paid. The modi{ed accrual method is the preferred method for government organizations.
Community Development Block Grant Program
Funded by the Department of Housing and Urban Development of the Federal Government.
Community Facilities District
These funds account for special bene{t assessments levied for a variety of allowable uses, including but not limited to police services, joint use school facilities and library facilities.
The allowable uses of the funds are governed by the formation documents of each individual District.
Compensation
Direct and indirect monetary and non-monetary rewards given to employees on the basis of the value of the job, their personal contributions and their performance. These rewards must meet both the organization’s ability to pay and any governing legal regulations. 199
Contractual Services
A series of object codes, which include the expense of custodial, janitorial and other services, procured independently by contract or agreement with an individual, {rm, corporation or other governmental units.
Controllable Costs
Costs that can be in|uenced by the department involved, unlike other {xed costs such as rent, which is contracted by lease in advance.
Cost Accounting
The continuous process of analyzing, classifying, recording and summarizing cost data within the con{nes and controls of a formal cost accounting system and reporting them to users on a regular basis.
Cost Basis
Original price of an asset, used in determining depreciation and capital gains or losses. It usually is the purchase price, but in the case of an inheritance or gift is the market value of the asset at the time of receipt.
Costs
Amount of money that must be paid to acquire something, purchase price or expense.
Current Fiscal Year
The {scal year in progress.
Debt Service
The City’s obligation to pay the principal and interest of all bonds and other debt instruments according to a pre-determined payment schedule.
Defeasance
In {nancial reporting, the netting of outstanding liabilities and related assets on the statement of position. Most refunding results in the defeasance of the refunded debt.
De{cit
A result of: 1) insuf{ciency in the account or number, whether as the result of defaults and misappropriations or of mistakes or shrinkage in value or 2) excess of the government’s spending over its revenues.
Department
A basic organizational unit of government which is functionally unique in its delivery of services.
Depreciation
The process of allocating the cost of a capital asset to the periods during which the asset is used.
Development
In real estate, process of placing improvements on or to a parcel of land; projects where such improvements are being made. Such improvements may include drainage, utilities, subdividing, access, buildings or any combination of these elements.
Direct Cost
200
An expense that can be traced directly to a speci{c cost center or cost object such as a department, process or product.
Direct Labor
Cost of personnel that can be identi{ed in the product or service, such as the salary of the person who provides the direct service.
Discretionary Costs
Costs changed easily by management decisions such as advertising, repairs and maintenance and research and development. Also called managed costs.
Division
An organizational component of a department, which may be further subdivided into programs.
Division Overhead
The cost of the division’s indirect labor and material/supplies divided by the division’s direct salary and wages cost. The result is expressed as a percentage to be applied to direct salary and wages.
Effective Interest Methods
Premiums, discounts, bond issuance costs amortized over life of debt issue.
Encumbrance
The commitment of appropriated funds to purchase goods or services. An encumbrance is not an expenditure. An encumbrance reserves funds to be expended.
Equity
The difference between fund assets and fund liabilities.
Estimate
To approximate.
Estimated Economic (Useful) Life
The period over which a property is expected to be usable, by one or more users, with normal repairs and maintenance, for the purpose(s) for which it is intended.
Expenditure/Expense
The out|ow of funds paid or to be paid for an asset obtained or goods and services obtained regardless of when the expenditure is actually paid. The term expenditure applies to Governmental Funds. The term expense is used for Enterprise and Internal Service Funds. For complete fund descriptions, refer to the Guide to Funds/Fund Descriptions.
Fee
Cost of a service.
Fiscal Year
The 12-month period for recording {nancial transactions speci{ed by the City as beginning July 1st and ending June 30th.
Fixed Assets
Assets of long-term character such as land, buildings, machinery, equipment or furniture.
Fixed Asset Management
201
Tagging and preparing asset ledgers for plant, facilities and equipment; recording changes in asset status and conducting periodic inventories of assets.
Fixed Cost
A cost that remains constant regardless of volume or demand. Fixed costs include salaries, interest expense, rent, depreciation and insurance expenses.
Forecasts
Estimates of the future impact of current revenue and expenditure policies based on speci{c assumptions about future conditions such as in|ation or population growth.
Forecasts are neither predictions about the future nor a statement of policy intentions.
Fringe Bene{ts
Compensation that an employer contributes to its employees such as social security, retirement, life/health insurance or training supplements. Fringe bene{ts can be either mandatory, such as PERS contributions, or voluntary, such as health insurance bene{ts.
Full-Time Employee
The designation of staf{ng based on the Full-Time Employee for personnel using a guideline of 2,080 hours per year (1.0 FTE) or for 1,040 hours per year (0.5 FTE).
Function
An activity or a group of related activities for which the budgetary unit is responsible; in the City, a function is the same as a program.
Fund
A separate accounting entity, with a self-balancing set of accounts, to record all {nancial transactions (revenues and expenditures) for speci{c activities or government functions.
Funds are classi{ed into three categories: governmental, proprietary or {duciary. For a detailed list of the City’s funds and descriptions, refer to the Fund Descriptions.
Fund Accounting
System used by nonpro{t organizations, particularly governments. Since there is no pro{t motive, accountability is measured instead of pro{tability. The main purpose is stewardship of {nancial resources received and expended in compliance with legal requirements.
Financial reporting is directed at the public rather than investors.
Fund Balance
The excess of assets over liabilities and reserves; also known as surplus funds. This term applies to governmental funds only.
General Obligation Bond
Also referred to as GO Bonds, are usually limited by state law as to the amount as well as the length of indebtedness that a government can have. These “Full Faith and Credit” bonds are secured by all of the {nancial assets of the local government, including property taxes.
Geographic Information System
A computer-based Geographic Information System is being established by the Information Services Division for the tracking and monitoring of development projects.
Goal
A general statement of broad direction, purpose or intent which describes the essential reason for existence and which is not limited to a one-year time frame. Generally, a goal does not change from year to year.
202
Government Accounting
Principles and procedures in accounting for federal, state and local governmental units. The National Council on Governmental Accounting establishes rules. Unlike commercial accounting for corporations, encumbrances and budgets are recorded in the accounts.
Assets of a governmental unit are restricted for designated purposes.
Government Enterprise
Governmentally sponsored business activity. A utility plant may be a government enterprise which raises revenue by charging for its services.
Government Finance Of{cers Association
A non-pro{t professional association serving more than 21,000 government {nance professionals throughout North America.
Governmental Fund
This category of funds account for all records or operations not normally found in business, such as the General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds.
Grant
A sum of money given by an organization or agency for a particular purpose. The use of grant funds must be consistent with any funding conditions required by the grant.
Historical Cost
Actual expenses incurred during the previous {scal years. The basis for how trends are determined. Accounting principle requiring that all {nancial statement items be based on original cost or acquisition cost.
Hourly Billing Rate
The rate of a position on an hourly schedule including the cost of the positions hourly salary plus the hourly fringe bene{t costs, plus the division or department overhead costs, plus the City’s general and administrative costs. This “Total” labor cost per hour is used to determine various costs of services provided to the public.
Indirect Cost
Costs not directly accountable to a cost object but included in total cost overhead.
In|ation
Rise in the prices of goods and services, as happens when spending increases relative to the supply of goods on the market.
Infrastructure
The physical assets of the City, such as streets, water, wastewater, public buildings and parks, and the support structures within a development.
Interest Revenues
Revenues received as interest from the investment of funds not immediately required to meet cash disbursements obligations.
Investment
Securities and real estate purchased and held for the production of income in the form of interest, dividends, rentals or base payments.
203
Jurisdiction
Geographic or political entity governed by a particular legal system or body of laws.
Liability
Debt or other legal obligations arising out of transactions in the past which must be liquidated, renewed or refunded at some future date. Encumbrances are not considered to be liabilities.
Line-Item Budget
A budget which lists detailed expenditures categories (personnel, operating, contractual, internal services and capital outlay) separately, along with the amount budgeted for each speci{c category.
Measure B
A half-cent transportation sales tax authorized by the passage of Alameda County in 2000.
Measure B went into effect on April 1, 2002 and expired on March 31, 2022. Funding can be used for street construction, repairs and maintenance and for bicycle and pedestrian safety projects.
Measure BB
A half-cent transportation sales tax authorized by the passage of Alameda County in 2000.
Measure BB went into effect on April 1, 2005 and will expire on March 31, 2022. The full onecent sales tax will begin April 1, 2022 and will extend through March 31, 2045. Funding is to be used for transportation priorities that includes streets and roads improvements, bicycle/pedestrian enhancements, and transit related projects.
Measure F
The Vehicle Registration Fee ballot measure was passed in 2012 by Alameda County.
Approximately 60% of Measure F funding is allocated directly to local agencies to be put towards the maintenance and improvement of essential transportation services and facilities. City applies it for repairs and maintenance of local streets and roads and the improvement of traf{c |ow, public transportation, and bicyclist, pedestrian, and driver safety.
Modi{ed Accrual Basis or Modi{ed Accrual Method
An accounting method whereby income and expense items are recognized, as they are available and measurable.
Net
Figure remaining after all relevant deductions have been made from the gross amount; or to arrive at the difference between additions and subtractions or plus amounts and minus amounts.
Object Codes
Speci{c numerical classi{cations for which money is allocated for disbursements. The City uses object codes as the last six characters of the account number and represents the lowest level of classi{cation within the General Ledger accounting system.
Objective
Measurable statement of the intended bene{cial and tangible effects of a program’s activities. An objective is a speci{c target toward which a manager can plan, schedule work activities and make staff assignments. An objective is stated in quanti{able terms, such that it is possible to know when it has been achieved.
204
Operating and Maintenance
Cost associated with a capital facility that will impact the City of Pleasanton on an ongoing and annual basis.
Operating Expense
A series of object codes which include expenditures for items which primarily bene{t the current period and are not de{ned as personnel services, contractual services or capital outlays.
Operational Audit
Process to determine ways to improve production and services.
Ordinance
The laws of a municipality.
Organization
Organized structure of roles and responsibilities functioning to accomplish predetermined objectives.
Organization Chart
A chart showing the interrelationships of positions within an organization in terms of authority and responsibilities. There are basically three patterns of organization: line organization, functional organization and line and staff organization.
Overage
Too much, opposite of shortage.
Overhead
Indirect expenses of running an organization not directly associated with a particular item of service. For example, wages paid to an employee providing a service and the costs of the required materials for performing the service are direct costs. Electricity and building insurance are overhead expenses. By applying a factor called the burden rate, cost accounting attempts to allocate overhead, where possible, to the cost of the services provided.
Overtime
Time worked in excess of an agreed upon time for normal working hours by an employee.
Hourly or non- exempt employees must be compensated at the rate of one and one-half their normal hourly rate for overtime work beyond 40 hours in a workweek. Working on holidays or weekends is sometimes referred to as overtime work.
Payroll
Aggregate periodic amount an organization pays its workers, lists of employees and their compensation.
Per Capita
By or for each individual. Anything {gured per capita is calculated by the number of individuals involved and is divided equally among all.
Performance Measures
Speci{c quantitative measures of work performed within a program (e.g. miles of streets cleaned). Also, speci{c quantitative measures of results obtained through a program (e.g., percent change in response time compared to previous year). 205
Prepaid
Expense paid in advance, such as a one-year insurance policy paid when purchased or rent paid in advance of the period covered.
Prior Year
The {scal year preceding the current year.
Program
An organized self-contained set of related work activities within a department or division which are directed toward common objectives and represent a well-de{ned expenditure of City resources.
Projection
Estimate of future performance made by economists, corporate planners and credit and securities analysts, typically using historic trends and other assumed input.
Pro Rata
Proportionate allocation. For example, a pro rata property tax rebate might be divided proportionately (prorate) among taxpayers based on their original assessments, so that each gets the same percentage.
Purchase Order
An order issued by the Purchasing Department which authorizes the delivery of speci{c goods or services, and incurrence of a debt for them.
Purchase Requisition
The initial purchase request document that, if approved, is the basis for the preparation of the of{cial purchase order.
Reserve
The portion of a fund’s balance legally restricted for a speci{c purpose and therefore not available for general appropriation.
Reserved Fund Balance
For governmental funds and expendable trust funds, the portion of fund balance that is not available for appropriation because it is either legally restricted or not spendable.
Resolution
In general, expression of desire or intent. Legal order by a government entity.
Revenues
Funds, received from various sources and treated as income to the City, which are used to {nance expenditures. Examples are tax payments, fees for services, receipts from other governments, {nes, grants, licenses, permits, shared revenue and interest income.
Right-of-Way
A public designation for space needed to accommodate streets, public utilities and other public facilities.
Rollover
Similar to carryover, used primarily in adjusting anticipated or budgeted amounts in the future years to actual amounts.
206
Salary and Wages
An employee’s monetary compensation for employment.
Salary Savings
Salary savings re|ect personnel cost savings resulting from vacancies and as a result of employee turnover. The amount of budgeted salary savings is generally based upon experience.
Service
Work done by one person that bene{ts another.
Service Departments
Sections, programs or departments of an on-going organization giving service.
Special District
A designated geographic area established to provide a specialized service (e.g., Landscape Maintenance District).
Special Revenue Fund
A governmental fund type used to account for speci{c revenues that are legally restricted to expenditures for particular purposes.
Staff
In general, persons in an organization.
Statement of Net Activities
Reports net (expense) revenue of functions.
Statement of Net Assets
Includes all assets and liabilities.
Target
Desired amount or level of performance to obtain.
Total Cost
Costs including all ancillary costs. For example, the total cost of a project would include the direct costs and indirect costs.
Transient Occupancy Tax
This tax is collected from the operators of hotels and motels located within the City. A percentage of this tax is then remitted to the City.
Trend
In general, any line of movement.
True Up
An assessable, computational adjustment to inconsistencies in estimates versus actuals.
Unit Cost
Compare the volume of work anticipated to the items needed to complete the work and the funds required to purchase these items.
Unreserved Fund Balance
207
In a governmental or expendable trust fund, the balance of net {nancial resources which are spendable or available for appropriation.
Update
Revise printed information according to the most current information available.
User Charge
Charges or fees levied to recipients of a particular service.
Variable
Data item that can change its value; also called a factor or an element.
Variance
Difference between actual experience and budgeted or projected experience in any {nancial category.
208
Appendix B (Continued)
Acronyms
ABAG Association of Bay Area Governments
AC Air Conditioning or Alternating Current
ACE Altamont Commuter Express
ACFR Annual Comprehensive Financial Report
ACTC Alameda County Transportation Commission
ACWMA Alameda County Waste Management Authority
AD Assessment District
ADA Americans with Disabilities Act
AED Automated External De{brillator
AMI Area Median Income
ATV All-Terrain Vehicle
BACS Bay Area Community Services
BART Bay Area Rapid Transit
BMR Below Market Rate
BMX Bicycle Motocross
CAD Computer Aided Dispatch
CALTRANS California Department of Transportation
CAPE Community Association for Preschool Education
CDBG Community Development Block Grant
CDIAC California Debt and Investment Advisory Commission CERT Citizens Emergency Response Training
CIP Capital Improvement Program
COP Certi{cate of Participation
COPPS Community Oriented Policing & Problem Solving
CoVWR Committee of Valley Water Retailers
CPAT Candidate Physical Abilities Test
CPR Cardiopulmonary Resuscitation
CPUC California Public Utilities Commission
CRIL Community Resources for Independent Living
CSO Community Service Of{cer
DARE Drug Abuse Resistance Education
DSRSD Dublin Sam Ramon Services District
DTA Downtown Association
DUI Driving Under the In|uence
EBMUD East Bay Municipal Utility District
EBRPD East Bay Regional Parks District
ECHO Eden Council for Hope and Opportunity
EIR Environment Impact Report
EMS Emergency Medical Services
EOC Emergency Operations Center
ERAF Educational Revenue Augmentation Fund
ESL English as a Second Language
EVC Economic Vitality Committee
FEMA Federal Emergency Response Agency
GASB Governmental Accounting Standards Board
GHAD Geological Hazard Abatement District
HBPOA Hacienda Business Park Owners Association
HCD Housing and Community Development
HELP Housing Enabled by Local Partnerships
HOME Housing Opportunities Made Easy
HR Human Resources
HUD Housing and Urban Development
ICLEI International Council for Local Environmental Initiatives IRS Internal Revenue Service
IS Information Services
IT Information Technology
JPA Joint Powers Agreement or Authority
LAFCO Local Agency Formation Commission
LAVWMA Livermore Amador Valley Water Management Agency
LEED Leadership in Energy & Environmental Design
LPFD Livermore-Pleasanton Fire Department
MOU Memorandum of Understanding
MTC Metropolitan Transportation Commission
NPDES National Pollutant Discharge Elimination System
NPD North Pleasanton Improvement District
O&M Operations & Maintenance
OPEB Other Post-Employment Bene{ts
OSC Operations Services Center
PDA Pleasanton Downtown Association
PERS Public Employees Retirement System
PG&E Paci{c Gas and Electric
PMC Pleasanton Municipal Code
POST Police Of{cers Standards & Training
PTCWD Pleasanton Township County Water District
PUD Planned Unit Development
PUSD Pleasanton Uni{ed School District
RADD Recreational Activities for Developmentally Disabled RFP Request for Proposal
RMS Records Management System
SCADA Supervisory Control and Data Acquisition
SMMP Stream Management Master Plan
SROVT Solid, Realistic, Ongoing, Veri{able Trainings
SSI Supplemental Security Income
TANF Temporary Aid to Needy Families
TOT Transient Occupancy Tax
TSM Transportation Systems Management
TVCVB Tri-Valley Convention and Visitors Bureau
TVHOC Tri-Valley Housing Opportunity Center
TVTC Tri-Valley Transportation Council
TVWRG Tri-Valley Water Retailers Group
UST Underground Storage Tank
VFD Variable Frequency Drives
VFW Veterans of Foreign Wars
VIPS Volunteers in Police Services
VLF Vehicle License Fees
VOP Veterans Organizations of Pleasanton
YMPIC Youth Master Plan Implementation Committee
209
There are many separate funds into which all City revenues are placed and from which all expenses are paid. A fund is an accounting entity with a complete set of self-balancing accounting records. Each fund has been established based on accounting principles that de{ne use and restriction on the kind of resource received by that fund. The fund types that comprise the operating budget are described below.
General Fund – Accounts for general purpose revenues, e.g. sales taxes, property taxes, building permits and records the transactions of general government services, e.g. police, {re, maintenance of streets and parks, library and recreation.
Enterprise Funds – Used to account for the City’s ongoing activities which are operated similarly to a business in the private sector. The City has included in the operating budget the operations and maintenance portions of the Water Fund, the Sewer Fund, the Storm Drain Fund, the Golf Fund, the Cemetery Fund, and the Transit Fund.
Internal Service Funds – Used to account for the {nancing of goods or services provided by one City department to other City departments on a cost-reimbursement basis. The City has internal service funds for Employee and Retiree Bene{ts, Vehicle, Equipment and Computer Replacement, Facilities Renovation, Street Light Replacement, Traf{c Signal Replacement, Public Art Acquisition and Maintenance, Insurance, and Park and Median Renovation.
Special Revenue Funds – Used to account for speci{c revenue sources that are restricted by law to expenditures for speci{c purposes. In the operating budget, these include DARE, Asset Forfeiture, Recycling Funds (Measure D, Import Mitigation, Beverage Container Recycling, RPPP Recycled Products), Lower Income Housing, Downtown Parking, Landscape and Lighting Districts, Geologic Hazard Districts, HOME Program, Law Enforcement Services Grant, Used Oil Grant, HBPOA Maintenance District, Urban Forestry, Community Development Block Grant, Miscellaneous Donations, Another H.A.P.P.Y. Public Art Donations, Downtown Economic Development Loan and Abandoned Vehicles.
Debt Service Funds – Used to account for debt revenues and associated debt service payments. The City has debt service funds for the Water and Recycle Water programs.
Trust Funds – Used to account for assets held by the City in a trustee capacity. The City has a trust fund for the Pleasanton Township County Water District #3 (PTCWD #3).
The City’s accounting system operates on a modi{ed accrual basis for the General Fund, the Debt Service Fund and the Special Revenue Funds. In these funds, revenues are recorded Appendix B (Continued)
Accounting Systems and
Funds
210
when they are received or when they are both measurable and available to {nance the expenditures of the current period.
Expenditures are recorded when liabilities are incurred. The City uses the accrual method of accounting for the Enterprise Funds and the Internal Service Funds where revenues and expenses are recorded when earned and incurred, respectively. For budgeting purposes, the City uses a Working Capital basis. This means that the focus is on changes in current spendable resources. The budgeted funds are adopted on a basis consistent with generally accepted accounting principles in the United States.
211
This page has been
intentionally left blank.
212
The City of Pleasanton has established the following {nancial policies to provide guidance towards the City’s {scal stability as well as prudent and accountable management of the City’s budget and funds:
General Financial Policies
Fee Policy
Sewer Enterprise Financial Policy
Water Enterprise Financial Policy
City Debt Policy
Investment Policy & Guidelines
Reserve Policy
These policies are included in the subsequent sections of Appendix C.
Appendix C
Financial Policies
213
A. GENERAL POLICIES
The City will manage its {nancial assets in a sound and prudent manner.
The City will maintain sound {nancial practices in accordance with State law, and direct its {nancial resources toward meeting the City’s long-term goals.
The City will maintain and further develop programs to assure its long-term ability to pay all the costs necessary to provide the level and quality of service required by its citizens.
The City will maintain accounting systems in conformance with generally accepted accounting principles.
The City will establish and maintain investment policies in accordance with State laws that stress safety and liquidity over yield.
B. REVENUE POLICIES
The City will strive to maintain a diversi{ed and stable revenue base that is not overly dependent on any land use, major taxpayer, revenue type, restricted revenue, inelastic revenue, or external revenue.
The City will aggressively pursue revenue collection and auditing to assure that moneys due the City are accurately received in a timely manner.
The City will seek Federal and State grants and reimbursements for mandated costs whenever possible.
The City will investigate potential new revenue sources, particularly those which will not add to the tax burden of residents or local businesses.
The City will work proactively with the League of California Cities and local communities to monitor legislation that may impact the City {nancially.
The City will avoid targeting revenues for speci{c purposes whenever possible.
The City will review user fees and charges and attempt to set them as close as possible to the cost of providing services, except as provided by the City’s Fee Policy or speci{c direction.
The City will impose user fees when appropriate.
The City will adopt a user fee policy, which establishes desired levels of cost recovery and determines the minimum frequency of user fee reviews.
Appendix C (Continued)
General Financial Policies
214
The fees and charges will be set at a level that fully supports the total direct and indirect cost of the activity, including administrative overhead and depreciation, and in accordance with the City’s Fee Policy.
The City will prepare periodic {nancial reports of actual revenue received, for review by the City Council, to provide information on the status of the City’s {nancial condition.
The City will maintain and further develop methods to track major revenue sources and evaluate {nancial trends.
The City will establish methods to maximize the accuracy of revenue forecasts.
C. COST OF SERVICES POLICIES
The City will recover the costs of new facilities and infrastructure necessitated by development, consistent with State law.
The City will consider requiring large developments to prepare a {scal analysis, which measures direct and indirect costs and bene{ts to the City.
D. EXPENDITURE AND BUDGETING POLICIES
The City will prepare a balanced budget.
Surplus fund balances may be used to increase reserves, fund Capital Improvement Projects, prepay pension liabilities, or other one-time uses.
The City will deliver service in the most effective manner, including utilizing the services of volunteers in areas where it is economically viable.
The budget will state the objectives of the operating programs, and identify the service and resources being provided to accomplish the speci{ed objectives.
The budget will fully account for and apportion all costs, fees, and General Fund transfers associated with the Enterprise Funds.
Department expenditures are limited to:
Budgeted expenditures approved by the City Council as appropriated by major category:
Employee Services; Transportation and Training
Repairs and Maintenance, Materials, Supplies and Services; Capital Outlay; and Debt Services.
All budget transfers within a fund require the approval of the City Manager or designee.
Budget transfers required to hire additional permanent personnel require the City Council’s approval.
The City will have various expenditure controls in place to ensure the City does not overexpend its budget including (1) position requisition must be budgeted and approved by the City Manager, (2) Finance staff will review purchase and contract requests to ensure there are adequate funds and (3) mid-year budget reviews to forecast expenses and revenues through year-end to ensure the City ends the year with a balanced budget. 215
The City will fully fund accrued unused vacation annually.
The City will periodically update replacement and maintenance {nancing plans, and incorporate them into the Budget.
E. FUND BALANCE
The budget year estimated fund balance includes prior year actual fund balance plus estimated revenues minus the expenditure budget.
Long-term liabilities including Pension, OPEB and debt (bonds and loans) are excluded from fund balance.
The Workers Compensation Fund balances include claims payable (estimated value of all claims the City has received that are still outstanding).
F. CAPITAL IMPROVEMENT POLICIES
The City will construct all capital improvements in accordance with an adopted capital improvement program.
The City will develop a four-year plan for capital improvements to be updated at least biannually. Future capital revenues and expenditures will be projected annually for a fouryear period based on changes in the community population, real estate development and/or replacement of the infrastructure.
The City will coordinate preparation of the Capital Improvement Budget with preparation of the Operating Budget. Future operating costs associated with new capital improvements will be projected and included in Operating Budget forecasts.
The City will identify the estimated costs and potential funding sources for each proposed capital project before it is submitted to Council for approval.
The City will attempt to determine the least costly {nancing method for all new projects.
The estimated cost of Capital replacement for enterprise funds such as water and sewer will be updated at least every two years to ensure that rates and charges are covering the full cost of operating these programs.
216
The Fee Policy is established to assist all departments in determining how any speci{c fee should be established, to help assure equitable treatment of all citizens and to structure the maintenance of fees at a current cost level.
Furthermore, the Fee Policy establishes categories of services for which the City desires to collect such fees and upon which the level of cost recovery is determined.
A. GENERAL POLICY
It is the general policy of the City of Pleasanton to recover its costs of service from the individuals and/or groups served to the extent that individual members of the public are bene{ting from speci{c City facilities or personnel in a way different from that enjoyed by all citizens. To the extent that the City organizes some of its activities into enterprise funds, such activities should recover all of their costs even if they bene{t essentially all of the citizens.
B. CATEGORIES OF SERVICE
From a policy standpoint, the Council expects City services to be placed in one of six categories before a fee is established or considered for any speci{c service:
1. Development which impacts municipal infrastructure costs.
When additional housing or commercial units are being built, it is the City’s policy to charge them for the costs of the additional roadways, road widening(s), traf{c control devices, water/sewer lines or processing capacity, and other related capital costs the City must spend to support the new development and the impacts it creates. The policy of the City Council is that these fees will include all cost expended or expected to be expended by the City in creating or performing these support activities, either in cash or in such in-kind as may be approved by the City Manager, as provided by State legislation.
2. Fees or charges designed to discourage improper behavior.
This would include traf{c {nes, parking enforcement, vandalism repair, theft or willful destruction of City property, building code infractions, etc. There is no need for these charges to be constrained by the cost of the enforcement activity. While they should at least meet this cost, they will generally be expected to be more than the cost of enforcement to discourage repeat offenses.
3. Services designed to control activities which could be harmful to others.
This includes {re inspection fees, many types of police permits, building inspections, etc. In these cases, the individual has probably done nothing wrong, but is engaged in an activity which could be harmful to others if conducted incorrectly. These fees should be set at full Appendix C (Continued)
Fee Policy
(Adopted by Resolution No. 92-99)
217
cost recovery. Full cost recovery includes direct labor costs (salary and bene{ts), allocated cost of supervision, pro-rata departmental management costs, City-wide overhead allocation, and physical facility or equipment hourly costs. This does not include criminal activities for which there are other penalties.
4. Services clearly required by the payee which the City would not otherwise be required to perform.
These include most of category 3 above as well as most Planning, Engineering, and Building department activities which are focused on a single transaction or incident. Not included in this category are Police activities with criminal penalties. This would include copying costs when the nature of the transaction {ts this description. All accidents resulting in harm to City property would fall into this category.
5. Services which are supportive of general City service policies, but require out-of-pocket expenses by the City for the bene{t of the participating individuals.
Many recreation activities would fall into this category. It is the general policy of the City for these activities to pay for their out-of-pocket costs, including any City overtime involved, but not to be charged for the otherwise allocable overhead costs, indirect supervision time, or a pro-rata share of the facility being used. If the activities being offered preclude (or collectively preclude) the facility being available for general purpose use (such as swim classes vs. general “open pool” hours), a pro- rata share of facility costs may be assigned with consent of the Council. This category would also include copying costs in support of such programs.
6. Normal City services supporting all inhabitants.
The City performs a host of functions, from street maintenance to {re {ghting to law enforcement as part of its services to all persons and property within the City limits. These general services are funded through a variety of taxing mechanisms and should not be funded by a fee for service. The key test for this type of service is that it is applied to all persons and property equally, not to a restricted subset of the population. Programs which are speci{cally tax or grant funded for a speci{c subset of the population (such as senior citizens) are also included in this category.
Exhibit I summarizes these categories and the fee rules associated with each. 218
EXHIBIT I
Category Costing Methodology Examples of Fees in Category A. Impact Fees Based on the capital costs
of the City infrastructure
impacted by proposed
development. Developed
within AB1600 guidelines
from State.
Residential construction fee
Capital improvement fee
Sewer connection fee
Water connection fee
Growth management fee
"Affordable Housing" fee
B. Improper Behavior Full City costs plus penalty
amount where
appropriate.
Traf{c {nes or parking
enforcement
Theft, willful destruction of
property
Vandalism
C. Control of
Potentially Harmful
Activities
Full cost recovery. Fire Inspection Fees
Pawn Shop Permits
Building Inspection Fees
D. Services to/for an
individual or group
and enterprise fund
activities
Full cost recovery. Planning or Engineering work
associated with processing of a
subdivision map, building permits,
or public R/W Company's exclusive
rental of facility Water/Sewer
monthly charges non-willful harm
to City property
E. Service Supporting
General City Policy
Out-of-pocket cost
recovery.
Recreation Fee (unless facilities
therefore not available to general
public) Safety Training (CPR, {re
prevention)
F. Normal City Services No Charge. Street maintenance, Park maintenance, law enforcement,
{re response, etc.
In addition to and overriding the above categories are enterprise fund activities. These are typically similar to category D above, in that the City would recover all of its costs and overhead. However, with enterprise funds including Water and Sewer, the capital costs required to support the activity are typically signi{cant, and it is the City’s policy to recover their costs directly from the users of the enterprise fund services. This includes depreciation or other method of provision for capital facility replacement. No other City services would normally include provision for replacement of capital facilities.
C. MAINTENANCE OF FEE LEVEL
The Policy of the City is to maintain fees at a level consistent with the costs associated with each service. To accomplish this, the City will:
1. Annual departmental submission of recommended fees.
Each department is directed every November to review its costs associated with each existing fee for service and to determine whether it has added any services during the year, or is contemplating adding any services in the upcoming {scal year for which a fee should be charged. It should then report to the Finance Director by December 31 of each year as to the changing costs of providing services and/or the proposed new fees and the basis for each. It is not necessary for the department to report to the Finance Director on fees for which the only changes are basic in|ationary changes. This directive is not intended to 219
preclude departments bringing forth recommended adjustments at other times if State law or other circumstances make mid-year changes appropriate.
2. Finance Director annual report to Manager/Council
The Finance Director shall review the proposed fee changes and/or additions or deletions suggested by each department and report to the Manager and Council as part of the annual budget cycle on proposed changes. At this time, the Finance Director shall propose across the board adjustments to fees for City salary increases and other in|ationary impacts.
3. Periodic review of overhead cost allocations.
Every {ve years the Finance Director shall analyze or cause to be analyzed the overhead and departmental management costs allocated to each fee.
4. Annual master fee schedule adjustment.
To facilitate annual adjustment, the City shall annually adopt a new master fee schedule.
The City Attorney shall propose any new fee ordinances in a manner consistent with this intent, and revise any ordinances existing requiring such adjustment so that the amount of the fees can be changed with a single new resolution each year.
D. DAMAGE REIMBURSEMENT
1. Overall basis for charges.
The City will charge the person who has damaged, destroyed, or taken City property for the cost to the City to process the incident and to replace that item or items with a comparable new item which conforms to current City policies for the purpose the item serves, or to repair the item to a state comparable to its state at the time of the incident. Where the item damaged, destroyed, etc. was a vehicle, the City charges will not exceed the cost to replace the vehicle with a comparable vehicle of similar capabilities and use, plus its processing costs. All costs incurred by the City shall be included in the time and materials charged to the perpetrator, including time to determine the nature and extent of the problem, time to determine the most effective way to restore the previous situation, time to handle the parties involved, court costs and time if needed, staff report preparation time, and the reasonable costs allocated to these direct expenses to cover their pro-rata share of direct supervision, management, support facilities, equipment used in the repair, the general City overhead.
2. Costs of items acquired or installed to replace damaged property.
The actual hydrant, lamp post, sign or signpost, or other item acquired or installed should be charged to the claim. This cost should be determined by the actual out-of-pocket cost if purchased for this speci{c repair or the replacement cost value if taken out of storage. If the replacement is an upgrade from the item which was damaged, the charge should only be for the cost of the comparable item with two exceptions. First, if the only readily available item (or in an emergency, the only immediately available item) differs from the replace item, the City will charge the full cost. (Example -- they no longer make the old type, or the old type is not available on nights and weekends and we could not wait.) Second, if a wooden signpost was damaged, but the City standard for a signpost is now to use a metal signpost (or a larger wooden signpost), the City will charge for replacement at the current standard.
220
3. Staff labor time.
The City expends time handling the damage or theft. All of that time should be charged to the offending party at the fully burdened hourly rate of those staff members who deal with the problem(s). The types of time which might be incurred include:
a.) Investigative Time
This is time required to determine who is responsible for the damage or theft. This could be incurred by a police of{cer, a member of the staff who observes the incident, or a staff member asking questions to {nd out what happened.
b.) Solution De{nition Time
This is time spent deciding the best thing to do to resolve the problem. It might include time spent taking a vehicle to three repair shops to get bids, time spent determining whether to sand-blast or paint over graf{ti, etc.
c.) Preparation Time
This is the time spent acquiring the materials needed to effect the repair or replacement. It could involve determining the speci{cations for the item, procurement time (including centralized purchasing if applicable), or adjustment of equipment centrally so that it can be used to effect the repair/replacement.
d.) Repair/Replacement/Installation Time
This is the time actually spent replacing the item or repairing it. This included the travel time involved.
e.) Participant Interaction Time
This is the time spent handling the parties involved in the incident. f.) Accounting/Billing/Of{ce Time
This is the time spent determining the charges and preparing a bill. It would include Finance Department time.
g.) Enforcement Time
This is the time spent in court, including of{cer testimony, City Attorney time, and Finance staff’s small claims court appearance. These charges would be tracked for claiming in court if the incident goes to court.
4. Staff labor rates.
Each department involved in the claim should have a labor rate for the time it spends. The labor rate consists of the following items:
The direct annual salary of the individuals divided by their anticipated annual work hours (“hourly direct salary”). This can also be the average for a group of similar workers who 221
might work on a claim -- i.e., a department-wide clerical rate or a division-wide electrician rate. Either of these approaches is equally valid.
The costs of the fringe bene{ts of the individual staff member divided by the anticipated number of hours to be worked that year. If you used a group rate above, you must use a group rate for this. If you used an individual rate above, it is permissible to use either an individual or group rate for fringe bene{ts. (“Direct Hourly Fringes”) If the time spent was overtime, these costs should not be added.
Most City staff have a supervisor whose job is to manage and direct their time, provide technical or professional expertise and advice, etc. This person would typically manage several people, and might also be a producer of products. (Example -- a supervising accountant might spend half of his or her time supervising a function and half time performing advanced level accounting work.) The percentage of the supervisor’s time which is management and supervision oriented should be divided by the number of personnel supervised, and the result would be a direct overhead to the staff person. For example, if that supervising accountant managed four junior accountants, one eighth of his or her salary (50%/4 personnel) and fringes should be allocated as “Direct Supervision” costs.
In addition to the above, the general management of the department should be added to the rate. This consists of the department head, his/her secretary, and the general expenses of the department. These costs are then divided by the direct salary costs of the rest of the department to determine the percentage which departmental overhead is of the direct departmental costs.
Citywide overhead (determined by this study to be approximately 33.89%) would be added to the result from the above step.
Reviewing all of the above, the formula for determining the hourly rate would be a follows:
Rate = (hourly direct labor salary + direct fringe rate) x (1+supervision overhead %) x (1+ departmental overhead %) x 1.3389 (Citywide overhead factor) If a rate for supervision or departmental overhead is not readily available, 15% and 5% will be used respectively. The actual rate, when calculated, will likely be higher than these, however.
5. Equipment used.
In addition to labor and materials used to repair/replace the damaged item, some operations require the use of City equipment. This includes passenger vehicles, police cruisers, and heavy equipment. The Support Services Division will provide an estimate of the appropriate hourly rate for passenger vehicles or Police cruisers. A heavy equipment rate can be developed by taking the original cost of the unit and dividing it by the anticipated number of hours of use it will get in its life. For example, if a “cherry-picker” gets used 3 days each week for 8 hours a day and is expected to last 8 years, the procurement cost would be divided by 9,984 (23 hours per week x 52 weeks per year x 8 years). For example, if the units cost $50,000 to procure, paint, decal, etc., the rate would be about $5/hour. In addition to this, the appropriate hourly share of the annual maintenance, gas, oil, etc., must be added. An easier and equally acceptable approach for many types of equipment is to use 85% of the cost of renting the unit on a commercial basis. The 85% factor is used to eliminate the pro{t aspect of such a rate. (This approach should only be used if the City does not have similar equipment in another department.) 222
6. Materials, supplies, and out-of-pocket expenses.
These expenses will be included in the charges. In the case of water losses from a hydrant, an estimate will be made based on pressure, size of opening, and estimated duration of the unchecked |ow.
E. PARK AND RECREATION SERVICES
The City Council authorizes staff to adjust fees and charges for services and facilities for up to twenty percent of the approved fees and charges without resubmitting the adjustment to the City Council.
The City Council authorizes staff to adjust to provide new programs/classes at a fee based on the cost of service or established guidelines, and that fees for such programs or classes be submitted to the Council for approval within a one-year period from initiation of the class or program.
The City Council authorizes the Recreation Supervisors or Director to continue to enter into contractual agreements for program services, in forms as approved by the City Attorney.
The cost of fee classes is set to attempt to return the full cost of the instructor(s) and materials plus an additional thirty percent for program supervision and of{ce support. 223
The City of Pleasanton recognizes the importance of sound {nancial management of its sewer system utility. Its goals include the operation of the utility on an enterprise basis, with the maintenance of adequate reserves, and with {nancial provisions for funding future replacement and expansion of the system.
The purpose of this policy is to set forth guidelines to achieve these goals.
SCOPE - This policy applies to all Sewer Utility funds.
POLICY - The City shall operate the Sewer Utility on an enterprise basis, whereby the costs of service are borne entirely by the users.
The City shall maintain adequate reserves in the Sewer Maintenance and Operations (M&O) Fund to meet cash |ow requirements and contingencies.
The City shall perform a sewer rate study at least bi-annually which determines sewer rates based on a cost of service analysis.
Sewer rates shall be set at a level to meet debt service requirements and to provide adequate annual capital replacement accruals.
The City shall establish and maintain a separate Sewer Capital Improvement Fund and a Sewer Capital Replacement Fund.
The Sewer Capital Improvement Fund shall be funded primarily by connection fees, and will provide for future expansion of the sewer utility.
The Sewer Capital Replacement Fund shall be funded primarily by replacement accruals charged to existing users through the sewer rate structure.
To construct replacement and expansion facilities, the City may utilize other {nancing alternatives such as debt {nancing, and seek other funding sources such as development exactions.
In addition to the speci{c {nancial policies stated above, the Sewer enterprise funds are subject to the "Financial Policies of the City of Pleasanton" which were adopted by Resolution No. 90-131.
Appendix C (Continued)
Sewer Enterprise Financial
Policy
(Adopted by Resolution No. 91-28)
224
The City of Pleasanton recognizes the importance of sound {nancial management of its water system utility. Its goals include the operation of the utility on an enterprise basis, with the maintenance of adequate reserves, and with {nancial provisions for funding future replacement and expansion of the system.
The purpose of this policy is to set forth guidelines to achieve these goals.
SCOPE - This policy applies to all Water Utility funds.
POLICY - The City shall operate the Water Utility on an enterprise basis, whereby the costs of service are borne entirely by the users.
The City shall maintain adequate reserves in the Water Maintenance and Operations (M&O) Fund to meet cash |ow requirements and contingencies.
The City shall perform a water rate study at least bi-annually which determines water rates based on a cost of service analysis. Additionally, an annual cursory review shall be performed.
The water rate structure shall be designed to provide a balance between revenue stability and water conservation.
Water rates shall be set at a level to meet debt service requirements and to provide adequate annual capital replacement accruals.
Appendix C (Continued)
Water Enterprise Financial
Policy
(Adopted by Resolution No. 91-30)
225
The City shall establish and maintain a separate Water Expansion Fund and a Water Capital Replacement Fund.
The Water Expansion Fund shall be funded primarily by connection fees, and will provide for future expansion of the water system.
The City shall perform a water connection fee review at least bi-annually to ensure that future water customers contribute fairly and equitably towards expansion projects necessary to serve their needs. Reviews may be necessary within a shorter duration due to changing conditions or facility needs.
The Water Capital Replacement Fund shall be funded primarily by replacement accruals charged to existing users through the water rate structure.
To construct replacement and expansion facilities, the City may utilize other {nancing alternatives such as debt {nancing, and seek other funding sources such as development exactions. In addition to the speci{c {nancial policies stated above, the Water enterprise funds are subject to the “Financial Policies of the City of Pleasanton” which were adopted by Resolution No. 90-131.
226
1. INTRODUCTION
The City of Pleasanton has established this Debt Management Policy (“Policy”) to provide clear and comprehensive guidelines for the issuance and {nancial management of debt issued by the City of Pleasanton. This Policy supports the City of Pleasanton’s mission of providing responsive and high-quality public services for its citizens and ensures that the City of Pleasanton is {nancially self- sustaining and {scally strong. Finally, this Policy requires that the City Council speci{cally authorize each debt {nancing by resolution.
2. PURPOSE
This Policy has been developed in accordance with practices recommended by the Government Finance Of{cers Association for the purpose of providing a framework for debt management and capital planning by the City. The guidelines established by this policy will govern the issuance and management of all debt funded for long term capital {nancing needs and short-term cash-|ow needs. Changes in the capital markets and other unforeseen circumstances may require action which may deviate from this Policy. In cases which require exceptions to this Policy, the City Council approval will be necessary for implementation.
3. GOALS
The purpose of this Debt Policy is to establish prudent debt issuance guidelines to ensure that the City meets the following objectives:
Identifying the purposes for which the debt proceeds may be used or are prohibited.
Identifying the types of debt that may be issued or prohibited.
Describing the relationship of the debt to, and integration with, the City’s capital plan objectives or budget.
Establishing policy goals related to the City’s planning goals and objectives.
Mandating that the City comply with all debt covenants.
Establishing to voters, taxpayers, and community that the City has plans and procedures to implement its {nancing programs prudently and transparently.
Demonstrating to rating agencies and investors that the City is well managed. Meeting the ongoing obligations associated with the issuance of bonds under State, tax and securities laws.
Appendix C (Continued)
City Debt Policy
(Adopted by City Council February 15, 2022)
227
4. DEBT CAPACITY
Article XVI, Section 18 of the California Constitution (the “debt limit”) prohibits cities from entering into indebtedness or liability that in any year exceeds the income and revenue provided for such year unless the City {rst obtains two- thirds voter approval for the obligation. Determining what the City’s debt capacity is at any point in time is dif{cult. It depends on a number of factors including market conditions, amount of undesignated fund balance in the General Fund, |uctuating cash balances, {nancial policies, management and staff experience, new or existing revenues available to support additional debt, and availability of {nancial consultants to assist in {nancial analysis. In the development of this Debt Policy, the goal is to serve as a framework within which the City can evaluate each potential debt issuance. This Debt Policy is not to be so restrictive that it interferes with the City’s legitimate efforts to prudently provide public services and facilities.
5. TYPES OF DEBT AUTHOIZED TO BE ISSUED
A. Short-Term Debt
Short-term borrowing may be utilized for the temporary funding of operational cash |ow de{cits or anticipated revenues, where anticipated revenues are de{ned as an assured revenue source with the anticipated amount based on conservative estimates or until the structure of the take-out {nancing is {nalized. The City will determine and utilize the least costly method for short term borrowing. The City may issue short-term debt when there is a de{ned repayment source or amortization of principal, subject to the following policies:
Grant Anticipation Notes (GANs) are short-term notes that are repaid with the proceeds of State or Federal grants of any type. The City shall generally issue GANs only when there is no other viable source of funding for the project.
Bond Anticipation Notes (BANs) are short-term notes issued prior to the issuance of longterm debt. It is anticipated that BANs will be retired, or taken-out, with long term debt or commercial paper. BANs will be issued only when there is no better alternative to reduce the overall cost of a {nancing program.
Tax and Revenue Anticipation Notes (TRANs) shall be issued only if the sizing of the issue fully conforms to Federal IRS requirements and limitations.
Lines of Credit shall be considered as an alternative to other short-term borrowing options. The lines of credit shall be structured to limit concerns as to Internal Revenue Code compliance.
B. Long-Term Debt
Debt issues may be used to {nance essential capital facilities, projects and certain equipment where it is appropriate to spread the cost of the projects over more than one budget year. Projects which are not appropriate for spreading costs over future years will not be {nanced with long-term debt. Long-term debt will not, under any circumstances, be used to fund City operations.
Current Coupon Bonds are bonds that pay interest periodically and principal at maturity.
They may be used for both new money and refunding transactions. Bond features may be adjusted to accommodate the market conditions at the time of sale, including changing dollar amounts for principal maturities, offering discount and premium bond pricing, modifying call provisions, utilizing bond insurance, and determining how to fund the debt service reserve fund.
228
Zero Coupon and Capital Appreciation Bonds pay interest only when principal matures.
Interest continues to accrue on the unpaid interest, therefore representing a more expensive funding option. In the case of zero-coupon bonds, principal and interest, at one coupon rate, is repaid at maturity. In the case of Capital Appreciation Bonds, the value of the bond accretes until maturity. These types of bonds are prohibited under this Policy.
Taxable Debt is debt whose interest payments are not tax-exempt for federal tax purpose to bondholders, but whose interest payments are taxable for federal income tax purposes. The City will consider the issuance of taxable debt when it is necessary for federal tax reasons or if these bonds would lower the overall cost of the {nancing.
C. Debt Types
The following are the types of debt the City could issue:
New Money Bonds: New Money bonds are bonds issued to {nance the cost of capital improvement projects or other large and extraordinary costs as approved by the City Council.
Refunding Bonds: Refunding bonds are bonds issued to re{nance (refund) previously issued outstanding debt. The City may issue refunding bonds to re{nance the principal of and interest on outstanding bonds or other debt to achieve debt service savings, restructure scheduled debt service, convert from or to a variable or {xed interest rate, change or modify the source(s) of payment and security for the refunded debt, or modify covenants otherwise binding upon the City. Refunding bonds may be issued either on a current or advance basis.
Revenue Bonds: Revenue Bonds are generally issued by enterprise funds that are {nancially self- sustaining without the use of taxes and therefore rely on the revenues collected by the enterprise fund to repay the debt.
Assessment Bonds: The Improvement Bond Act of 1915 (Streets and Highways Code Section 8500 et seq.) allows the City to issue bonds to {nance the “speci{c bene{t” improvements on the real property within its jurisdiction provided by the City.
Installments are collected by posting to the secure property tax roll of the county.
Mello Roos Bonds: Mello-Roos districts may issue municipal bonds to help {nance development projects. If voters in the area have elected to become a Mello-Roos district, they are responsible for the repayment of these bonds through a special tax, assessed annually based on the value of the properties within the district. Mello-Roos {nanced developments might include schools, roads, libraries, police and {re protection stations.
This type of {nancing is named after Henry Mello and Mike Roos of the California legislature, who sponsored legislation in 1982 to authorize this form of {nancing.
General Obligation (GO) Bonds: In California, GO Bonds require a supermajority voter approval. Most GO bonds are backed by the issuer’s ability to level ad valorem tax in amounts suf{cient to meet debt service requirements.
Certi{cate of Participation and Lease Revenue Bonds: Also known as ‘COP’, this security that represents a share of an issuer’s lease payment. When a City {nances a public facility through a lease- purchase transaction, the interest in that City’s lease payment often is 229
assigned to a third party that issues certi{cates of participation. The certi{cates represent a share of the lease payment to be received by the investor. 230
6. CAPITAL IMPROVEMENT PROGRAM INTEGRATION
The City’s multi-year Capital Improvement Program (CIP), which identi{es the projects and the appropriate funding mechanisms to pay for them, shall be used in combination with the Financial and Budget Policies and this Policy to ensure the proper allocation and {nancing of eligible projects. The CIP and its related policies set priorities and strategies for allocating and tracking funding, while the Debt Policy provides policy direction and limitations for proposed {nancings.
7. TERMS AND CONDITIONS OF BOND
The City shall establish all terms and conditions relating to the issuance of bonds, and will control, manage, and invest all bond proceeds. Unless otherwise authorized by the City, the following shall serve as bond requirements.
A. Term
All capital improvements {nanced through the issuance of debt will be {nanced for a period generally not to exceed the average useful life of that which is being {nanced. At no time will the {nancing exceed 120% of the expected average useful life of the assets being {nanced, and in no event should the {nal maturity exceed the lesser of thirty (30) years or when the revenue source is projected to sunset.
B. Capitalized Interest
The nature of the City’s revenue stream is such that funds are generally continuously available and the use of capitalized interest should not normally be necessary. However, certain types of {nancings may require the use of capitalized interest from the issuance date until the City has constructive use/ bene{t of the {nanced project. Unless otherwise required, the City will avoid the use of capitalized interest to obviate unnecessarily increasing the bond size. Interest shall not be funded (capitalized) beyond three (3) years or a shorter period when based upon project needs or if further restricted by statute. The City may require that capitalized interest on the initial series of bonds be funded from the proceeds of the bonds. Interest earnings may, at the City’s discretion, be applied to extend the term of capitalized interest but in no event beyond 3 years, or less, if restricted by state law.
C. Lien Levels
Senior and Junior Liens for each revenue source will be utilized in a manner that will maximize the most critical constraint, typically either cost or capacity, thus allowing for the most bene{cial use of the revenue source securing the bond. Projects chosen for priority {nancing, based on funding availability and proposed timing, will generally be subject to the most senior lien of the bond series.
D. Maximum Annual Debt Service (“MADS”)
Concerning revenue bonds, the MADS for any given year must not exceed a level at which the City’s net revenues are less than one and a quarter times (1.25x) the total debt service within any year unless allowed by existing bond covenants.
E. Additional Bonds Test
231
Any new debt issuance must not cause the City’s debt service to exceed the level at which the net revenues are less than one and a quarter times (1.25x) the maximum annual principal and interest (debt service) for the aggregate outstanding senior lien bonds including the debt service for the new issuance unless allowed by existing bond covenants.
F. Debt Service Structure
Debt issuance shall be planned to achieve relatively rapid repayment of debt while still matching debt service to the useful life of facilities. The City will amortize its debt within each lien to achieve overall level debt service or may utilize more accelerated repayment schedules after giving consideration to bonding capacity constraints. The City shall avoid the use of bullet or balloon maturities except in those instances where these maturities achieve one of the City’s stated goals, such as minimizing annual debt service or leveling annual existing debt service, among others.
G. Call Provisions
In general, the City’s securities will include a call feature, which is no later than ten (10) years from the date of delivery of the bonds. The City will avoid the sale of non-callable bonds absent careful evaluation by the City with respect to the value of the call option. If the City were to issue taxable bonds, the City will carefully consider the {nancial impacts of a 10-year call, a make-whole call, or non-callable debt.
H. Maximum Repayment Ratio
The maximum repayment ratio, where total future debt service payments are divided by the principal of the bonds issued, shall be within three to one for each series of bonds and for each authorization.
I. Original Issue Discount & Deep Discount Bonds
An original issue discount and deep discount bonds will be permitted only if the City determines that such discount results in a lower true interest cost on the bonds and that the use of an original issue discount or deep discount bonds will not materially reduce the value of the bonds’ call provisions and adversely affect the project identi{ed by the bond documents.
J. Multiple Series
In instances where multiple series of bonds are to be issued, the City shall make a {nal determination as to which allocations are of the highest priority K. Variable Rate Debt
No Variable Rate Debt or Derivative Products: The City shall not issue variable rate debt. The City will not utilize derivative products.
8. CREDIT ENHANCEMENTS
The City will consider the use of credit enhancement on a case-by-case basis, evaluating the economic bene{t versus cost for each case. Only when a clearly demonstrable savings can 232
be shown shall enhancement be considered. The City will consider each of the following enhancements as alternatives by evaluating the cost and bene{t of such enhancement.
A. Bond Insurance
The City may purchase bond insurance when such purchase is deemed prudent and advantageous. The predominant determination shall be based on such insurance being less costly than the present value of the difference in the interest on insured bonds versus uninsured bonds.
B. Debt Service Reserves
When required, a reserve fund equal to the lesser of 10% of the original principal amount of the bonds, maximum annual debt service, or 125% of average annual debt service, and if permitted, 10% of par value of bonds outstanding, (the “Reserve Requirement”) shall be funded from the proceeds of each series of bonds, subject to federal tax regulations and in accordance with the requirements of credit enhancement providers and/or rating agencies.
The City may purchase reserve equivalents (e.g., a reserve fund surety policy) when such purchase is deemed prudent and advantageous. Such equivalents shall be evaluated in comparison to cash funding of reserves on a net present value basis, the creditworthiness of the surety provider and market acceptance.
9. DEBT ISSUANCE PRACTICES
A. Selection of Professionals
Pursuant to the provisions of Sections 37209 and 40805.5 of the Government Code of the State of California, the Finance Director (Director of Finance) shall be the head of the Finance Department and shall be responsible for all of the {nancial affairs of the City. This City Debt Management Policy grants the Director of Finance the authority to select the {nancing team, coordinate the administration and issuance of debt, communicate with the rating agencies, as well as to ful{ll all the pre-issuance and post issuance disclosure information.
The Director of Finance or designee may use the Request for Proposal (RFP) process to select various Financing Team Members. Below is a brief description of the main Financing Team, along with their functions, and the mandated frequency of soliciting RFP’s.
The typical Debt Financing Team consists of:
Financial Advisor:
Assists with capital planning and long-term {nancial planning Coordinates the {nancing and debt issuance process
Helps evaluate underwriter proposals and provides {nancial analysis and recommendations
Assists with the securing of other professional services and other members of the {nancing team
Monitors and evaluates market conditions for opportunities to issue debt at low interest rates
Works with the City and Underwriter to develop investor outreach and market approach Manages competitive bid process
Ensures negotiated prices are “fair” and reasonable in the marketplace 233
Requests for Proposals for Financial Advisors should be done on a periodic basis not to exceed ten (10) years but is subject to review after four years.
Bond Counsel:
Prepare an approving legal opinion
Provide expert and objective legal opinion and advice
Prepare and review documents necessary to authorize, issue sale and delivery of the bonds, as well as coordination of the authorization and execution of closing documents Review legal issues relating to the structure of the bond issue Prepare election proceedings or pursue validation proceedings if necessary Review or prepare those sections of the of{cial statement that relate to the Bonds, {nancing documents, bond counsel opinion, and tax exemption Assist the City in presenting information to bond rating organizations and credit enhancement providers relating to legal issues affecting the issuance of the Bonds Review or prepare the Notice of Sale of Bond Purchase Contract for the Bonds and review or draft the continuing disclosure undertaking of the City Post-issuance advice for bond covenant compliance
Requests for Proposals for Bond Counsel should be done on a periodic basis not to exceed ten (10) years but is subject to review after four years.
Underwriter:
Provide the City with market knowledge
Assist with credit analysis and preparation
Premarketing of the Bonds
Pricing and Sale of Bonds
Trading of the Bonds
Underwriter services should be solicited through a Request for Proposal (RFP) for every bond issue, or by developing a pool of pre-quali{ed underwriters from which to select.
Trustee/Fiscal Agent/Paying Agent: ee/Fiscal Agent/Paying Age / g / ygg Establishes and holds the funds and accounts relating to the bond issue Maintains the list of names and addresses of all registered owners of the bonds and recordings of transfers and exchanges of the bonds
Acts as the authenticating agent
Acts as the paying agent
Protects the interests of the bondholders by monitoring compliance with covenants and acts on behalf of the bondholders in the event of default As the escrow agent holds the investments acquired with the proceeds of an advance refunding and uses those funds for payments on those investments to pay debt service on the refunding bonds
As a dissemination agent acts on behalf of the issuer or other obligated person to disseminate annual reports and event notices to repositories under SEC Rule 15c2-12 RFP’s for Trustee services should be done on a periodic basis if the recurring Trustee fees increase excessively (in excess of the prevailing Bay Area in|ation rate).
B. Method of Sale
The City will determine, on a case-by-case basis, whether to sell its bonds competitively or through negotiation.
Competitive Sale ompetitive Sale p
234
In a competitive sale, the City’s bonds shall be awarded to the bidder providing the lowest true interest cost as long as the bid adheres to the requirements set forth in the of{cial notice of sale. Conditions under which a competitive sale would be preferred are as follows:
Bond prices are stable and/or demand is strong.
Market timing and interest rate sensitivity are not critical to the pricing. There are no complex explanations required during marketing regarding issuer’s projects, media coverage, political structure, political support, and funding or credit quality.
The bond type and structure are conventional.
Bond insurance is included or pre-quali{ed (available).
Manageable transaction size.
The City (or a City enterprise) has strong credit ratings.
The City (or a City enterprise) is well known to investors.
Negotiated Sale egotiated Sale g
The City recognizes that some securities are best sold through negotiation. Conditions under which a negotiated sale would be preferred are as follows:
Interest rates are volatile.
Demand is weak or supply of competing bonds is high.
Market timing is important, such as for refunding’s.
Issuer has lower or weakening credit rating.
Issuer is not well known to investors.
Sale and marketing of the bonds will require complex explanations about the issuer’s projects, media coverage, political structure, political support, funding, or credit quality.
The bond type and/or structural features are non-standard, such as for a forward delivery bond sale, issuance of variable rate bonds, or where there is the use of derivative products.
Bond insurance is not available or not offered.
Early structuring, investor outreach and other market participation by underwriters are desired.
The par amount for the transaction is signi{cantly larger than normal.
Demand for the bonds by retail investors is expected to be high.
Participation from DBE {rms is required or desired.
Private Placement
From time to time the City may elect to privately place its debt. Such placement shall be considered if this method is demonstrated to result in a cost savings to the City or other bene{ts relative to other methods of debt issuance.
Derivative Products
Because of their complexity, unless otherwise amended, Derivative Products such as Interest Rate Swaps, Inverse Floaters, and other hybrid securities are prohibited from the City of Pleasanton’s Debt Management Policy.
10. DEBT ISSUANCE PRACTICES
The City shall have the responsibility to analyze outstanding bond issues for refunding opportunities that may be presented by underwriting and/or {nancial advisory {rms.
The City will consider the following issues when analyzing possible refunding opportunities:
A. Debt Service Savings
235
The City has established a minimum savings threshold goal of 3% of the refunded bond debt service compared to the refunding bonds debt service unless there are other compelling reasons for defeasance. The present value savings will be net of all costs related to the re{nancing. The decision to take savings on an upfront or deferred basis must be explicitly approved by the City Council.
B. Restructuring
The City will refund debt when in its best interest to do so. Refunding will include restructuring to meet unanticipated revenue expectations, achieve cost savings, mitigate irregular debt service payments, release reserve funds or remove unduly restrictive bond covenants.
C. Term of Refunding Issues
The City will refund bonds within the term of the originally issued debt. The City may also consider shortening the term of the originally issued debt to realize greater savings. The remaining useful life of the {nanced facility and the concept of inter generational equity should guide this decision.
D. Escrow Structuring
The City shall utilize the least costly permitted securities available in structuring refunding escrows. The City will examine the viability of an economic versus legal defeasance on a net present value basis. Generally, the City should look to purchase State and Local Obligations (SLGS) from the federal treasury when structuring refunding escrows. The City may review the purchase of Open Market Securities to fund a refunding escrow. In such a case, a certi{cate from a third-party agent, who is not a broker-dealer, is required stating that the securities were procured through an arms-length, competitive bid process (in the case of open market securities}, that such securities were more cost effective than State and Local Government Obligations (SLGS), and that the price paid for the securities was reasonable within Federal guidelines. Under no circumstances shall an underwriter, agent or {nancial advisor sell escrow securities to the City from its own account.
E. Arbitrage
The City shall take all necessary steps to optimize refunding escrows and to avoid negative arbitrage. Any resulting positive arbitrage, on funds other than advance refunding escrows (which are not allowed to generate positive arbitrage earnings), will be rebated as necessary according to Federal guidelines.
11. PERFORMANCE STANDARDS
The City of Pleasanton strives to maintain ‘investment grade’ standings in the municipal market. Below is an Investment Grade Table of the three (3) major rating agencies. 236
12. MARKET RELATIONSHIPS
The Director of Finance will be responsible for maintaining relationships with investors, credit analysts, and rating agencies.
13. ON-GOING DEBT ADMINISTRATION
The Director of Finance will regularly review the City’s outstanding obligations, particularly in declining interest rate environments. When rates begin to approach levels at which refunding is cost-effective, the City shall select a {nancing team to begin preparations for a refunding issue.
A. Continuing Disclosure
The Finance staff will ensure that the City’s annual {nancial statements and associated reports are posted on the City’s web site. The City will also contract with Consultant(s) to comply with the Securities and Exchange Commission Rule 15c2 by {ling its annual {nancial statements and other {nancial and operating data for the bene{t of its bondholders on the Electronic Municipal Market Access (EMMA) website of the Municipal Securities Rulemaking Board (MSRB).
B. Arbitrage Rebate Compliance and Reporting
The use and investment of bond proceeds must be monitored to ensure compliance with arbitrage restrictions. Existing regulations require that issuers calculate rebate liabilities related to any bond issues, with rebates paid to the Federal Government every {ve years and as otherwise required by applicable provisions of the Internal Revenue Code and regulations. The Director of Finance shall contract with a specialist to ensure that proceeds and investments are tracked in a manner that facilitates accurate, complete calculations, and if necessary, timely rebate payments.
C. Use of Bond Proceeds
The Director of Finance shall report to the City Council annually at the same time as the City’s annual audited {nancial statements the actual use of bond proceeds to ensure the use is consistent with intended use and that the proceeds are spent in accordance with tax requirements.
14. DEBT MANAGEMENT POLICY REVIEW
237
The Director of Finance will be involved in the annual review of this Policy to con{rm compliance. The annual review will occur in conjunction with the budget adoption.
The Director of Finance shall review this Policy at a minimum of every {ve (5) years and recommend any changes to the City Manager and City Council. 238
City of Pleasanton Debt Management Policy: Glossary of Terms City of Pleasanton Debt Management Policy: Glossary of Terms y g yy Advance Refunding: For purposes of certain tax and securities laws and regulations, a refunding in which the refunded issue remains outstanding fora period of more than 90- days after the issuance of the refunding issue. The proceeds of the refunding issue are generally invested in Treasury securities or federal agency securities (although other instruments are sometimes used), with principal and interest from these investments being used (with limited exceptions) to. Pay principal and interest on the refunded issue.
Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment in an amount suf{cient to pay the principal of and interest on the issue being refunded on the original interest payment and maturity dates, although in some cases an issuer may expressly reserve its right (pursuant to certain procedures delineated by the Securities and Exchange Commission) to consider “pre-refunded” when the refunding issue’s proceeds are escrowed only until a call date or dates on the refunded issue, with the refunded issue redeemed at that time.
Amortization: The gradual reduction in principal and interest of an outstanding debt according to a speci{c repayment schedule, which details speci{c dates and repayment amounts on those dates.
Arbitrage: Arbitrage: In the municipal market, arbitrage refers to the difference between the taxexempt interest rate paid by the borrower and the interest rate at which the proceeds of the issue are invested. The Internal Revenue Code contains speci{c regulations concerning the amount that can be earned from the investment of tax-exempt proceeds.
Call Provisions: Mandatory or optional provisions that allow or require an issuer to prepay or re{nance a bond prior to its stated maturity date. These provisions identify which bonds may be called, when they may be called, and what premium, if any, must be paid upon redemption prior to the stated maturity date of the bond.
Capitalized Interest: Speci{c interest payments of a bond issue which are funded in advance, or capitalized, through proceeds of the same bond issue. These proceeds are set aside in a specially designated fund in order to pay these designated interest payments.
Current Refunding: A refunding transaction where the municipal securities being refunded will all mature or be redeemed within 90-days or less from the date of issuance of the refunding issue.
Debt Affordability: The principal amount of debt that an issuer can afford within the constraints of net revenues and debt coverage requirements.
Debt Service Coverage: The ratio of the net revenue stream pledged against a debt to the debt service payments to the debt. Debt service coverage ratios are most often used by rating agencies to determine repayment suf{ciency with respect to bonds secured by a speci{c revenue stream.
Debt Service Reserve Fund: Traditional bond issues are structured with a debt service reserve fund, which assures the timely availability of suf{cient funds for the repayment of debt service in the event that an issuer cannot make the required debt service payment(s). Typically, the required size of the reserve fund is determined by the lesser of:
100% of maximum annual debt service; 125% of average annual debt service; or 10% of the aggregate issue price. Reserve funds are usually fully funded out of bond proceeds and 239
are set-aside in a separate fund, as long as the debt service fund is fully funded, and can only be used to offset debt service payments.
Defeasance: Termination of rights and interests of the bondholders and their lien on the pledged revenues or other security in accordance with the terms of the bond contract for an issue of bonds. Defeasance usually occurs in connection with the refunding of an outstanding issue after provision has been made for future payment of all obligations under the outstanding bonds through funds provided by the issuance of a new series of bonds.
Derivative Product: A product, such as an option or futures contract, whose value is derived from the performance of an underlying security. A commonly used derivative is an interest rate swap. Given the complexity of derivative products, the City of Pittsburg and its related entities will no longer utilize derivative products in its debt issuances.
Discount Rate: The interest rate used for adjusting for the time value of money for net present value calculations, option pricing models, and other market models. The term “discount rate” can also refer to the rate that the Federal Reserve Bank charges its members for overnight deposits.
Good Faith Deposit: A sum of money or, alternatively, a surety bond provided to an issuer of a new issue of municipal securities by an underwriter or underwriting syndicate as an assurance of performance on its offer to purchase the issue. Good faith deposits generally are required in connection with competitive sales and sometimes in connection with negotiated sales.
Hedging: A strategy designed to reduce investment risk. A hedge can help reduce the risk and volatility of a portfolio. A common hedging strategy includes matching the amount of short-term assets with the amount of short-term variable rate debt outstanding.
Letter of Credit: Two types of letter of credit are used in bond and other debt {nancings:
standby letter of credit and direct pay letter of credit. They provide credit enhancement for debt issues by shifting the risk of repayment from the issuer to the bank issuing the letter of credit. Letters of credit are usually required for the issuance of variable rate debt.
Letters of credit are also used to provide liquidity. A Standby Letter of Credit is an agreement issued by a commercial bank that commits the bank to pay a third party contingent upon the failure of bank’s customer to perform under the terms of a contract or agreement with the bene{ciary. Used as a substitute for a performance bond or payment guarantee, standby letters of credit are used mainly in the U.S where banks are legally barred from issuing certain types of guarantees. For bond or debt holders it serves as a secondary source of payment, in case the issuer fails to meet its payment obligations. A Direct Pay Letter of Credit is an agreement issued by a commercial bank that commits the bank to pay third parties upon a request presented by the bene{ciaries to the bank issuing the direct pay letter of credit.
Line of Credit: An arrangement in which a bank or other {nancial institution extends a speci{ed amount of unsecured credit to a speci{c borrower for a speci{ed time period.
Maturity Date: Maturity Date: The date upon which a speci{ed amount of debt principal or bonds matures, or becomes due and payable by the issuer of the debt.
Negotiated Sale: A method of sale of bonds, notes or other {nancing vehicles in which the issuer selects in advance, on the basis of proposals received or by other means, one or 240
more underwriters to work with it in structuring, marketing and {nally offering an issue to investors. The negotiated sale method is often used when the issue is: a {rst time sale by a particular issuer, a complex security structure, such as a variable rate transaction, an unusually large issue, or in a highly volatile or congested market.
Net Revenue: Gross revenues less operating and maintenance expenses.
Of{cial Statement: A comprehensive statement issued by the governmental entity prior to the sale of bonds, notes, or other {nancing vehicles that contains all the salient facts concerning the issuer, the issuer’s {nancial condition, the security pledged for the securities being offered, the projected use of the proceeds of the sale, and other facts deemed necessary to enable the investor to judge the quality of the securities being offered. This is also known as the Disclosure Statement.
Private Placement: A private placement is a variation of a negotiated sale in which an issuer, usually with the help of a {nancial advisor or placement agent, will attempt to place the entire issue directly with an investor. The investor will negotiate the speci{c terms and conditions of the {nancing before agreeing to the purchase of the issue.
Redemption: Depending on an issue’s call provisions, an issuer may on certain dates and at certain premiums, redeem or call speci{c outstanding maturities. When a bond or certi{cate is redeemed, the issuer is required to pay the maturities’ par amount, the accrued interest to the call date, plus any premium required by the issue’s call provisions.
Senior Lien Debt: Debt whose terms require it to be repaid with a priority claim on pledged revenues.
Subordinate Lien Debt: Subordinate Lien Debt: Debt whose terms require it to be repaid with pledged revenues net of the amount necessary to make debt service payments on senior lien debt.
Surety Bond: An alternative to a fully funded debt service reserve fund. A surety bond can be purchased from a bond insurance provider to ful{ll the role of debt service reserve fund and can be drawn upon in the event an issuer cannot make a regularly scheduled debt service payment. A surety bond must be purchased and is subject to credit approval by a bond insurance provider. The provider charges an upfront fee for the surety bond.
Weighted Average Maturity: With respect to an issue of bonds, the weighted period of time required to repay half of the issue through scheduled principal payments. The weighted average maturity is also referred to as the “weighted average life” or “average life” re|ects how rapidly the principal of an issue is expected to be paid. Under one commonly used calculation method, average life is equal to the total bond years divided by the total number of bonds.
Yield: The net rate of return, as a percentage, received by an investor on an investment.
Yield calculations on a {xed income investment, such as a bond issue, take purchase price and coupon into account when calculating yield to maturity. 241
POLICY
The purpose of this investment policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Pleasanton’s (“City”) objectives of safety, liquidity and return on investment through a diversi{ed investment portfolio. This policy also serves to organize and formalize the City’s investment-related activities, while complying with all applicable statutes governing the investment of public funds. This policy is written to incorporate industry best practices and recommendations from sources such as the Government Finance Of{cers Association (GFOA), California Municipal Treasurers Association (CMTA), California Debt and Investment Advisory Commission (CDIAC) and the Association of Public Treasurers (APT).
SCOPE
This investment policy applies to all {nancial assets of the City. These funds are accounted for in the City’s Annual Comprehensive Financial Report and include:
General Fund
Enterprise Funds
Internal Service Funds
Capital Projects Funds
Special Revenue Funds
Private-Purpose Trust Funds
Agency Funds
Debt Service Funds
Proceeds of debt issuance shall be invested in accordance with the City’s general investment philosophy as set forth in this policy; however, such proceeds are to be invested pursuant to the permitted investment provisions of their speci{c bond indentures. The City’s Section 115 Pension Trust Fund and the City’s other post-employment bene{t trusts are to be invested pursuant to their own investment policies.
POOLING OF FUNDS
Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase ef{ciencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.
PRUDENCE
Appendix C (Continued)
Investment Policy &
Guidelines
(Adopted by City Council June 18, 2024)
242
Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City are trustees and therefore {duciaries subject to the Prudent Investor Standard:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore {duciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the Agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the Agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.” Investment of{cers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
OBJECTIVES
The primary objectives, in priority order, of the City’s investment program shall be:
a. Safety: Safety of principal is the foremost objective of the investment program.
Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns. b. Liquidity: The City’s investment portfolio will remain suf{ciently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. c. Yield: The City’s investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the City’s investment risk constraints and the cash |ow characteristics of the portfolio.
DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from Sections 41006 and 53600 et seq. of the Government Code and Chapter 2.16 of the Pleasanton Municipal Code.
Management responsibility for the investment program is delegated by the City Council and City Manager to the Director of Finance.
The Director of Finance will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate of{cials and employees. Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Director of Finance.
The City may engage the services of professional investment managers (Advisers) at the election and further approval of the City Council at the recommendation of the City Manager and Director of Finance. The Adviser shall be registered under the Investment 243
Advisers Act of 1940. The Adviser may be granted discretion to purchase and sell investment securities in accordance with this investment policy. The Adviser shall follow this Investment Policy, written internal controls and other written instructions as provided by the City. Such delegation is subject to City review and overriding discretion which will be exercised as needed.
ETHICS AND CONFLICTS OF INTEREST
All participants in the investment process shall act as custodians of the public trust.
Investment of{cials shall recognize that the investment portfolio is subject to public review and evaluation. Of{cers and employees involved in the investment process shall refrain from personal business activity that could con|ict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.
Employees and investment of{cials shall disclose to the City Manager any material interests in {nancial institutions with which they conduct business, and they shall further disclose any large personal {nancial/ investment positions that could be related to the performance of the investment portfolio. Employees and of{cers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City. employees and investment of{cials who manage the investment of public funds must {le an annual Statement of Economic Interests.
AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
To the extent practicable, the Director of Finance shall endeavor to complete investment transactions using a competitive bid process whenever possible. The Director of Finance will determine which {nancial institutions are authorized to provide investment services to the City. It shall be the City’s policy to purchase securities only from authorized institutions and {rms. The Director of Finance will maintain a list of {nancial institutions authorized to provide investment services. In addition, a list will also be maintained of approved security broker/dealers selected by credit worthiness, these may include “primary” dealers or regional dealers that qualify under Security & Exchange Commission Rule 15C3-1 (uniform net capital rule). All broker investment transactions require the approval of authorized City staff. No public deposit shall be made except in a quali{ed public depository as established by state laws, and deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.
In accordance with Section 53601.5, institutions eligible to transact investment business with the City include:
Institutions licensed by the state as a broker-dealer
Institutions that are members of a federally regulated securities exchange Primary government dealers as designated by the Federal Reserve Bank and nonprimary government dealers Special Revenue Funds
Nationally or state-chartered banks
The Federal Reserve Bank
Direct issuers of securities eligible for purchase
All {nancial institutions and broker/dealers who desire to become quali{ed bidders for investment transactions must supply the Director of Finance with the following: audited {nancial statements, completed broker/dealer questionnaire, and certi{cation of having reviewed California Government Code, Section 53600 et seq. and read the City’s investment policy.
244
Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded. If there is no other readily available competitive offering, best efforts will be made to document quotations for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price.
AUTHORIZED AND SUITABLE INVESTMENTS
The City’s investments are governed by California Government Code, Sections 53600 et seq.
Within the investments permitted by the Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits and minimum credit quality requirements listed in this section apply at the time the security is purchased.
Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.
An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversi{ed by security type and institution to avoid incurring unreasonable and avoidable risks regarding speci{c security types or individual issuers.
a. Time Deposits
Fully-insured (FDIC) or fully collateralized non-negotiable certi{cates of deposits (CDs) in {nancial institutions located in California. All time deposits must be collateralized in accordance with California Government Code sections 53650 et. seq. The City, at its discretion, may waive the collateralization requirements for any portion of the deposit that is covered by federal insurance. A maximum of 30% of the City’s portfolio may be invested in this category. The maximum maturity may not exceed {ve (5) years. b. Negotiable Certi{cates of Deposit (NCDs)
Negotiable C/Ds issued by a nationally or state-chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank. The amount of the NCD insured up to the FDIC limit does not require any credit ratings. Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one nationally recognized statistical rating organization (NRSRO); or long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO. The aggregate investment in Negotiable C/Ds shall not exceed 30% of the City’s total portfolio.
c. Banker’s Acceptances
Banker’s Acceptances shall not to exceed 180 days maturity from date of purchase. No more than 5% of the City’s total portfolio shall be invested in banker’s acceptances of any one issuer and the aggregate investment in banker’s acceptances shall not exceed 30% of the City’s total portfolio.
245
Banker’s Acceptances must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
d. Obligations of the United States Treasury
U.S. Treasury bills, notes, bonds or certi{cates of indebtedness, and other government obligations for which the faith and credit of the United States are pledged for the payment of principal and interest. There is no limitation as to the percentage of the City’s portfolio that may be invested in this category. Maximum maturity may not exceed {ve years. e. Securities of U.S. Government Agencies
Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. There is no limitation as to the percentage of the City’s portfolio that may be invested in this category, provided that:
No more than 30% of the portfolio may be invested in any single Agency/GSE issuer The maximum maturity does not exceed {ve (5) years
The maximum percent of agency callable securities in the portfolio will be 20% f. Commercial Paper
Commercial paper securities issued by an entity that meets all of the following conditions in either paragraph (a) or (b) and additional requirements below:
a. Securities issued by corporations:
(i) A corporation organized and operating in the United States with assets more than $500 million
(ii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO (iii) If the issuer has other debt obligations, they must be rated in a rating category of “A” or its equivalent or better by at least one NRSRO
b. Securities issued by other entities:
(i) The issuer is organized within the United States as a special purpose corporation, trust, or limited liability company
(ii) The securities must have program-wide credit enhancements including, but not limited to, overcollateralization, letters of credit, or a surety bond (iii) The securities are rated “A-1” or its equivalent or better by at least one NRSRO No more than 10% of the outstanding commercial paper of any single issuer is permitted No more than 25% of the City’s investment assets under management may be invested in Commercial Paper
No more than 5% of the portfolio may be invested in any single issuer The maximum maturity does not exceed 270 days
g. State of California Local Agency Investment Fund (LAIF) The Local Agency Investment Fund was established by the State to enable local agency treasurers to place funds in a pool for investment (California Government Code Section 16429.1 et seq.). The City uses this investment vehicle for short-term liquidity, funds are 246
available on demand and interest is paid quarterly. The City may invest up to the maximum permitted by LAIF.
h. Municipal Securities That Are California State and Local Agency Obligations h. Municipal Securities That Are California State and Local Agency Obligati . Municipal Securities That Are California State and Local Agency Obligations pal Securities That Are California State and Local Agency Obligations Obligations of the State of California or any local agency within the state, provided that such obligations are rated in a rating category of A or its equivalent or better by at least one NRSRO. No more than 5% of the City’s total portfolio shall be invested in any one issuer in this category and the aggregate investment in categories (h. & i.) shall not exceed 30% of the City’s total portfolio.
i. Municipal Securities from Other States
Registered treasury notes or bonds of any of the other 49 United States in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 United States, in addition to California, provided that such obligations are rated in a rating category of A or its equivalent or better by at least one NRSRO. No more than 5% of the City’s total portfolio shall be invested in any one issuer in this category and the aggregate investment in categories (h. & i.) shall not exceed 30% of the City’s total portfolio.
j. Medium-term notes
Medium-term notes, de{ned as all corporate and depository institution debt securities with a maximum remaining maturity of {ve years or less, issued by corporations organized and operating in the United States or by depository institutions licensed by the United States or any state and operating in the United States. Purchases are limited to securities rated in a rating category of “A” or its equivalent or better by one NRSRO. The aggregate investment in Medium-term corporate notes shall not exceed 30% of the City’s total portfolio, and no more than 5% of the portfolio may be invested in any single issuer. k. Repurchase and Reverse Repurchase Agreements
Repurchase Agreements collateralized only by securities of the U.S. Government or its agencies. The purchase securities shall have a minimum market value of 102% of the dollar value of funds borrowed and a term not to exceed one year. The aggregate investment in repurchase agreements shall not exceed 15% of the City’s total portfolio. Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third-party custodian. Repurchase Agreements are subject to a Master Repurchase Agreement between the City and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA).
l. Money Market and Mutual Funds
Money market and mutual funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a. Mutual Funds that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
247
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than {ve years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.
No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
b. Money Market Mutual Funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversi{ed management companies and meet either of the following criteria:
(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than {ve years’ experience managing money market mutual funds with assets under management in excess of $500 million.
No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c. No more than 20% of the total portfolio may be invested in these securities. m. Managed Portfolio for Pension Liabilities
City Council authorized setting up a Section 115 Pension Trust Fund (Trust Fund), The Trust Fund assets will be managed by an external manager and the investment policy related to the trust will be a separate document that is approved by the City Council. n. California Asset Management Program (CAMP)
California Asset Management Program “CAMP” is a California Joint Powers Authority (“JPA”) established in 1989 to provide California public agencies with professional investment services. The CAMP Pool is a permitted investment for all local agencies under California Government Code Section 53601(p). The aggregate investment in CAMP shall not exceed 30% of the City’s investment portfolio.
o. Supranational Organizations Securities
United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by IBRD, IFC, or IADB, with a maximum remaining maturity of {ve years or less and eligible for purchase and sale in the United States. Purchases are limited to securities rated in a rating category of “AA” or its equivalent or better by an NRSRO. The aggregate investment in Supranational Organizations Securities shall not exceed 30% of the City’s investment portfolio. No more than 10% of the portfolio may be invested in any single issuer. Supranational Organizations Securities are permitted investment under California Government Code 53601(q).
p. Collateralized Bank Deposits
City’s deposits with {nancial institutions will be collateralized with pledged securities per California Government Code, Section 53651. There are no limits on the dollar amount or percentage that the City may invest in collateralized bank deposits. q. Asset-Backed, Mortgage-Backed, Mortgage Pass-Through Securities, and Collateralized q Asset-Backed Mortgage-Backed Mortgage Pass-Through Securities and Collater q. Asset-Backed, Mortgage-Backed, Mortgage Pass-Through Securities, and Collateralized . Asset-Backed, Mortgage-Backed, Mortgage Pass-Through Securities, and Collateraliz Mortgage Obligations From Issuers Not De{ned in Paragraphs d. and e. of the Authorized 248
and Suitable Investments Section of this Policy:
The securities shall be rated in a rating category of “AA” or its equivalent or better by one NRSRO. No more than 20% of the total portfolio may be invested in these securities. No more than 5% of the portfolio may be invested in any single Asset-Backed or Commercial Mortgage security issuer. The maximum legal {nal maturity does not exceed {ve (5) years.
PROHIBITED INVESTMENT VEHICLES AND PRACTICES
State law notwithstanding, any investments not speci{cally described herein are prohibited, including, but not limited to futures and options.
In accordance with Government Code, Section 53601.6, investment in inverse |oaters, range notes, or mortgage derived interest-only strips is prohibited.
Investment in any security that could result in a zero interest accrual if held to maturity is prohibited. Under a provision sunsetting on January 1, 2026, securities backed by the U.S.
Government that could result in a zero- or negative-interest accrual if held to maturity are permitted.
Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.
Purchasing or selling securities on margin is prohibited.
The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
The purchase of foreign currency denominated securities is prohibited.
Agencies that are not Quali{ed Institutional Buyers (QIB) as de{ned by the Securities and Exchange Commission are prohibited from purchasing Private Placement Securities. The SEC de{nes a QIB as having at least $100,000,000 in securities owned and invested.
INVESTMENT POOLS/MUTUAL FUNDS
The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. The Director of Finance shall develop a questionnaire which will answer the following questions:
A description of eligible investment securities, and a written statement of investment policy and objectives.
A description of interest calculations and how it is distributed, and how gains and losses are treated.
A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.
A description of who may invest in the program, how often, and what size deposit and withdrawal are allowed.
A schedule for receiving statements and portfolio listings.
Are reserves, retained earnings, etc. utilized by the pool/fund? A fee schedule, and when and how is it assessed.
Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?
COLLATERALIZATION
Certi{cates of Deposit (CDs). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certi{cate of Deposit. The value of eligible securities as de{ned pursuant to California Government Code, Section 53651, pledged against a Certi{cate of Deposit shall be equal to 150% of the face value of the CD if the securities are classi{ed as mortgages and 110% of the face value of the CD for all other classes of security.
249
Collateralization of Bank Deposits. This is the process by which a bank or {nancial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or {nancial institution to comply with the collateralization criteria de{ned in California Government Code, Section 53651.
Repurchase Agreements. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:
The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities.
Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
The City shall receive monthly statements of collateral.
SAFEKEEPING AND CUSTODY
All security transactions entered into by the City shall be conducted on a delivery-versuspayment (DVP) basis.
To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third party custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City from the custodian listing all securities held in safekeeping with current market data and other information.
The only exceptions to the foregoing shall be depository accounts and securities purchases made with: (i) local government investment pools; (ii) time certi{cates of deposit, and (iii) mutual funds and money market mutual funds, since these securities are not deliverable.
RISK MANAGEMENT AND DIVERSIFICATION
Mitigating Credit Risk in the Portfolio
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
The diversi{cation requirements included in the “Authorized And Suitable Investments” section of this policy are designed to mitigate credit risk in the portfolio.
No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise speci{ed in this policy.
The City may elect to sell a security prior to its maturity and record a capital gain or loss in orderto manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences.
If a security owned by the City is downgraded to a level below the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:
a. Any actions taken related to the downgrade will be communicated to the Director of Finance in a timely manner.
b. If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council.
Mitigating Market Risk in the Portfolio
250
Market risk is the risk that the portfolio value will |uctuate due to changes in the general level of interest rates. The City recognizes that, over time, longer-term portfolios have the potential to achieve higher returns. On the other hand, longer-term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short-term cash needs, and by making longer-term investments only with funds that are not needed for current cash |ow purposes.
The City further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk pro{le of the portfolio differently in different interest rate environments. The City, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
The City will maintain a minimum of six (6) months of budgeted operating expenditures in short term investments to provide suf{cient liquidity for expected disbursements.
The maximum stated {nal maturity of individual securities in the portfolio will be {ve (5) years, except as otherwise stated in this policy.
TRUST AGREEMENTS
The City shall direct the investment activities of trustees. Such direction shall be in keeping with the terms and conditions of its bond agreements, applicable law and policies set forth in this document.
REVIEW OF THE INVESTMENT PORTFOLIO
The Director of Finance shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish protocols for reporting major and critical incidences of noncompliance to the City Council.
MAXIMUM MATURITIES
To the extent possible, the City will attempt to match its investments with anticipated cash |ow requirements. Because of inherent dif{culties in accurately forecasting cash |ow requirements, a portion of the portfolio should be continuously invested in readily available funds. Where this policy does not specify a maximum remaining maturity at the time of the investment, no investment shall be made in any security that at the time of the investment has a term remaining to maturity in excess of {ve (5) years from the date of trade settlement.
The City will not invest in securities maturing more than {ve (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment either speci{cally or as a part of an investment program approved by the City Council no less than three months prior to the investment.
The City may invest proceeds of bond issuances or certi{cates of participation for a term exceeding {ve years, provided the City Council authorizes such investments as part of the legal documents.
INTERNAL CONTROLS
The Director of Finance shall establish an annual process of independent review by an external auditor to prevent loss of funds arising from fraud, theft, staff errors and irregularities, misrepresentations by third parties, misuse, or imprudent actions by staff. This review will provide internal control by assuring compliance with policies and procedures.
PERFORMANCE STANDARDS
251