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The Pleasanton City Council will be voting Tuesday on whether or not staff should proceed with developing a Transient Occupancy Tax ballot measure for residents to vote on this November.
If given the green light by the council, staff will work over the next several months to draft the ballot language for the measure, which seeks to increase the hotel and motel tax from the current 8% rate to 12%. This tax increase, if placed on the November ballot and approved by a simple majority of voters, would be implemented in two phases: it would increase to 10% by July 2027 and to 12% in July 2028.
In August, city staff introduced a number of potential revenue streams to address the city’s continuing structural deficit — one of the options was the TOT increase which refers to a “tax on the rental of hotel and motel rooms where stays are limited to 30 days or less.”
“The tax is collected by lodging operators from guests and remitted to the city,” according to the staff report.
During the 2024-25 fiscal year, the city received about $5.3 million in TOT revenue — the city budgeted for $5.6 million in fiscal year 2026-27, according to the staff report.
Pleasanton’s current TOT rate hasn’t been updated since 1983 and is among one of the lowest in Alameda County. Staff noted that most other cities in the county charge between 10% to 14%.
During that August meeting, the City Council directed staff to conduct stakeholder engagement with Pleasanton hotel operators and regional partners to assess the feasibility of getting voters to approve the rate increase during this year’s election.Â
And according to the city, those hotel operators and regional partners were generally either neutral or supportive of the potential rate increase.
“Operators generally accepted that a rate adjustment is reasonable given the current market and Pleasanton’s competitive position,” staff said. “One theme that emerged was a preference for phased implementation to smooth impact on guest rates.”
Based on this feedback, staff is returning to the council with its recommendation to develop a 4% rate increase over the next two years.
“Based on current occupancy levels, a 2-percentage-point increase to 10% would generate an estimated $1.4 million in additional annual revenue, while a 4-percentage-point increase to 12 percent would generate approximately $2.8 million per year,” staff stated in Tuesday’s agenda report. “Like several other sources of revenue the City relies on, economic upswings and downswings make TOT volatile.”
Staff is also recommending that the TOT measure be structured as a general tax, which means the revenue would go straight into the city’s general fund. If structured as so, that means the measure would need a simple majority (50% + 1) in order to pass.
If approved Tuesday, staff will return to the council in June for final approval and to allow the measure to be placed on the November ballot.
The City Council meeting is scheduled to begin at 7 p.m. Tuesday (Feb. 3). The full agenda can be accessed here.
In other business:
* The council will be receiving an update on the feasibility study results for the Regional Groundwater Facilities Improvement Project, a joint effort by the city and the Zone 7 Water Agency to find alternative groundwater supply options after forever chemicals — also known as PFAS chemicals — were found in the city’s groundwater.
The goal of the study, which was the first phase of the project, was to determine the feasibility of constructing new groundwater wells in Pleasanton. The council approved an agreement between the city and the water agency to perform this work back in June 2024.
“This effort supports the city’s evaluation of options to recover the use of its Groundwater Production Quota (GPQ) of 3,500 acre-feet per year,” staff stated in the agenda report.
Zone 7 completed the feasibility study in December after having tested the groundwater at Pleasanton Tennis and Community Park, Hansen Park and Del Prado Park. Staff will go over the results of this testing, which was already presented to the Zone 7 Board of Directors, during Tuesday’s meeting.
According to the presentation, the study determined that the overall project is feasible, the Hansen Park and tennis and community park both scored high as potential locations for the new groundwater wells and the project is estimated to produce over 8,200 acre-feet per year of water in a drought.
Per the presentation, the total project cost — not including Pleasanton’s required infrastructure costs — is estimated to be $42.3 million.
“City staff is currently reviewing the final feasibility study report and conducting an independent evaluation,” according to the staff report. “Staff anticipate completing this analysis and plan to return to the City Council in late March or early April with a recommendation and to seek City Council direction on next steps.”
* Staff will be seeking council’s direction on developing a policy for how the city evaluates “development-related General Plan amendments and re-zoning requests.”
This action is a result of the city receiving growing inquiries from developers about re-zoning properties to allow for changes in use.
“There is currently no policy in place regarding whether or how the city should accept and process these types of applications, which typically require a significant investment of time and effort on the part of an applicant and the city to process,” staff noted in Tuesday’s report.
According to the agenda report, this policy would help address these applications and provide a “structured framework for early City Council review and direction on specific proposals, based on an evaluation of the merits, benefits and impacts of proposed projects and availability of staff resources.”
