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IL PREFACE The City of Pasadena and the businesses located here depend on the spending of those who live, work, visit and do business here to support our community. Pasadena's economic well-being hinges on the city being home to diverse, growing and dynamic commercial enterprises. The City relies on many revenue sources. Sales tax from retail stores is a major contributor to the General Fund, providing approximately 18% of general fund revenues. The Transportation and Public Works Department budgets are funded by taxes generated by the sale of gasoline, based on population formulas. Vital services are funded through property tax from residential and commercial property owners, which contribute 17% of the City's general Fund revenues. Taxes on utility use generate 15% of General Fund monies for Pasadena. In Pasadena in 2007, six of the top ten property tax generators were office developments. The aggregate assessed valuation for these six office buildings was approximately $581,000,000. These six properties provide $981,000 in property tax revenue annually to the city. These same projects bring property tax revenues of $1,220,000 to the Pasadena Unified School District, $1,743,000 to Los Angeles County and $465,000 to Pasadena City College. That $581,000,000 represents an increase of more than 80% over 1998 assessed value. Those six properties also represented 4% of the total property tax revenue for Pasadena and slightly less for PUSD. Commercial customers, including office buildings, represent 60% of the revenues to Pasadena's Power Department. Five of the top ten electric customers for Pasadena are office buildings. A typical office complex of 75,000 square feet pays, on average, $206,250 for electricity and $112,500 for other public utility services. New commercial customers present the opportunity to build on existing revenues and to install conservation protocols to meet or exceed Pasadena's green standards. Retrofitting existing office buildings with energy efficient systems could also help Pasadena meet renewable energy goals. Right now, Pasadena faces challenges to its economic stability. As in any mature city, space for commercial development of any kind is limited. The sub -prime mortgage crisis and the subsequent fallout in the financial markets precipitated a recession that has severely limited money available for investment. It is anticipated that it may be as many as four to five years before those markets recover. In the meantime, Pasadena must protect its financial foundations and plan for the future. With the concerns generated by declining retail sales projections, the shrinking spending ability of the average family along with the universal tightening of spending habits, it may be time to examine Pasadena's economic base and consider adjustments to stabilize the city's financial future. Now that our softening economy means fewer discretionary dollars in the hands of consumers, it may be appropriate for the City of Pasadena to consider adjusting the mix of retail, entertainment, restaurant, industrial, institutional and commercial office uses for the near and long term future. Sales tax dollars are dependent on market forces, consumer trends and