Palm Desert City Council - Study Session, May 8, 2025

Transcript text

AI transcript text.

[00:01:38] Anthony: Madame Mayor, I just wanted to note this study session is intended to go till about 3:30 with our closed session starting at 3:45. Thank you.
[00:01:52] Anthony: I'll let the mayor and council, we're pleased to present to you a balanced budget today. Most notable in the budget is the revenue from the passage of Measure G. So we'll go through that detail shortly, but it's allowed for continued investment in city services and continued momentum in key capital projects like Fire Station 102, the park in the north sphere, and the library. So Veronica Chavez will kick us off during the presentation, and she'll be joined by each of the directors who will go over their respective budgets.
[00:02:24] Veronica Chavez: Thank you. Good afternoon, honorable mayor, members of City Council. Veronica Chavez, Director of Finance. Before we jump into the presentation, I just wanted to give you a high-level overview. Like Anthony said, this goes till 3:30. Please just let me know if you need comfort breaks and we're happy to do that. We have set this up for two days, but I suspect we may be able to get through it today. And if that's the case, we will have discussion throughout. Please just stop me if you need to. But first off, the proposed budget was developed using a conservative and responsible approach for both revenue and appropriations while meeting the community's needs and City Council's goals. We also took into consideration the macroeconomic factors that may impact resources for the city. So, as far as the US economy, it's expected to experience moderate and stable growth during fiscal year 25-26. Of course, we don't have a crystal ball, but that's what we're anticipating. The Southern California itself remains economically resilient, though facing structural challenges such as affordability and infrastructure. Palm Desert is well-positioned for continued economic health in FY 25-26 related to our strong visitor economy and stable revenue streams as well as our strategic public infrastructure improvements.
[00:03:53] Councilmember: If I may, I just want to ask as we go through this, can you give us strategic points where we can then stop and be able to ask questions?
[00:04:01] Veronica Chavez: Absolutely. I do have them marked.
[00:04:03] Councilmember: Okay. Thank you. Yeah.
[00:04:05] Veronica Chavez: So the proposed budget, before I jump in, the packet itself on page five, the City Manager memo highlights the proposed budget for 25-26, and these are the PDF page numbers, just so we're all on the same page. Page 11 is where we start the general fund summaries. Page 15 goes into the general fund detailed department budgets, and that's where you'll see the line items and their descriptions of what they represent. Page 53 is where we jump into fire services historical and projected budgets. 55 is the police historical and projected budgets. On page 57, we jump into the other fund budgets. On page 71, we have our all-fund summaries, and that's when you have the total budget for city incomplete, and then the detailed budgets begin on page 86.
[00:05:00] Veronica: We have presented the recognized obligation payment schedule for the successor agency on page 137. And then on page 139 is the 5-year capital improvement plan. Page 143 is the budget presentation. And we'll jump into that right now.
[00:05:21] Veronica: So, as I mentioned earlier, today's agenda covers the city council's goals and objectives, the budgets and forecast overviews for the general fund, the updates for all fund summary and the CIP summary, and the 25-26 operational budgets. If we aren't able to complete today, we'll be back on May 22nd at 12 p.m. for the second study session. Our public hearing notice will be published on June 15th with the proposed budget formally adopted on June 27th and then the beginning of our fiscal year beginning July 1st.
[00:05:59] Veronica: So, as everybody knows, the city council goals and priorities were evaluated and compiled back in February. And the list you have before you is what staff uses to develop the budget for 25-26 highlighting all of the goals this year. There are six main goals: CSU North sphere development, the mall, updating the development code, crime prevention technology, and the city rights of way and medians. Those are the goals and objectives this year. So, we'll jump right into the general fund overview.
[00:06:37] Veronica: As Chris mentioned earlier, we're happy to present a balanced budget showing a surplus of $312,790. What that looks like year-over-year going back to 2021: you can see the budgeted revenue in red with actual revenue in green and budgeted expenditures in purple with actual expenditures in tan. So for 25-26 you can see there's a substantial jump and that does have to do with implementing measure G monies this year.
[00:07:21] Veronica: So for the revenue, in total we are estimating a proposed budget of $109,443,818. The top three revenue drivers for the city are sales tax, which now encompasses the 1% district tax, which is measure G, transient occupancy tax including short-term rentals, and property tax. Each of those show an increase this year, a slight increase. When we budgeted for revenue this year, we considered it flat growth. And wherever we had indicators that showed a little bit of an increase or decrease, we made those adjustments. And so our sales tax numbers are driven off of our proposals from our sales tax administrator who takes a look at nationwide, regionally, and locally what those look like. Their estimates back during midyear time showed a pretty substantial decline next year. They've softened those since then. And so I'm projecting for next year what they suggested at 24.9 as our revenue stream for just our normal Bradley Burns sales tax and 24 million for the 1% measure G tax.
[00:08:39] Veronica: Because we don't have history on that yet, I don't know how to trend that. So I'm using their numbers directly on measure G. With TOT, we go through this every year where we don't have numbers in yet for season. So we're barely starting to get our March numbers in. So based on current year, we're suggesting for next year to maintain relatively the same budget at 22.75 and then property tax showing a slight increase at 12.8 compared to what we're projecting at 12.5 for 24-25. The only other major changes we have would be within our time share mitigation fees as we had a one-time payment this year. Are there any questions on this slide?
[00:09:39] Council Member: If I may, Veronica, the measure G revenue, my understanding is we collect every cent of sales tax on the same things as the Bradley Burns, but also some other things, right?
[00:09:55] Veronica: We do. So, whatever the sales tax, the general sales tax typically is, measure G would...
[00:10:01] Council Member: be more than that at the end of the year, right? Do I understand that?
[00:10:06] Veronica: So, that's the way I understand it. However, there are shared taxes in the county pool that we get additional on top of the Bradley Burns. So, that's the difference there. Are there any additional questions on this slide? Okay, I'll go ahead and move on. Again, this slide just reflects the top three earners. You can see from '24-'25 to '25-'26 the jump is Measure G revenues, sales tax of course being our largest revenue driver. This is the type of businesses that we derive our sales tax from. This has not changed very much over the years, but you can see that county pool number has been growing over the last five years. If you look pre-COVID, it was very small and we seem to be maintaining that number over the years. But this just shows you the breakdown. General retail and food still is the substantial component to our sales tax. This scorecard is what we created for the public. It's on our web page. We will continue to update this quarterly, but we wanted you to have a picture of all of the projects we promised on our five-year plan and where we're at with those promises. Each and every one of them are in progress with the recruitment of public works complete. And then also, the reserve is only as needed, so that one has not had any input into it yet. Our sales tax revenue forecast... So the line you see there is the trend line. So all things remaining equal, that's where they would anticipate our projections to go. As you see further out in 2032, we don't quite meet the trend line. And this has relatively maintained the same sort of curve over the last three to four years. I don't anticipate that it'll change much moving forward. I will say this does not include Measure G. They haven't had anything to reference yet. So, we'll see how that looks when we start getting those TOT year-over-year. This is just to show you the comparison between hotels and STRs and what that looks like for us. STRs are relatively the same. They're a little bit higher than what they were in prior years. And TOT from hotels has maintained just a level increase year-over-year. And this is a new slide I added this year just to show the breakdown of property tax over the five-year history by category. I know Evan had a question a couple meetings ago about what that looked like versus the secured and unsecured and tax increments. So, I wanted to be able to give you guys a picture of that. In the last two years on the projected and estimated, you can see the additional blue box, which is the money that we're receiving in property tax that would have gone to the county library previously. So, for the expenditures, we're projecting 109 million—I'm going to say this wrong—$109,131,028 in total for expenditures. This page shows you the expenditures by category. So you can see what the funds are spent on throughout the general fund, or what we're projecting them to be spent on. And then the graph just represents what that looks like, where transfers out are 25%, salaries and benefits are 25%, and police services 26%.
[00:14:05] Council Member: Veronica, can I ask a question?
[00:14:07] Veronica: Yes.
[00:14:08] Council Member: Um, actually, uh, first to our city clerk, if I have a question on something that is on the agenda, can I make a question without divulging which agenda item it relates to or just asking kind of a vague question as it relates to this? Is that my question wasn't vague enough?
[00:14:25] City Clerk: I believe you can ask your question and if it goes over the line, we'll let you know.
[00:14:31] Council Member: Perfect. In this other services, um, I was wondering how often in looking at certain vendors I see that there are a vendor that's approved for medical billing. Why we would have something that includes medical billing? Mobile medical ultrasound company, behavioral health services consulting firm providing clinical forensic and public safety services, auction services and...
[00:15:03] Staff: ...ground travel passenger transportation services.
[00:15:07] Councilmember Quintanilla: Is that from the procurement list? Is that—
[00:15:09] Staff: Yes.
[00:15:10] Councilmember Quintanilla: So just, if they're there, they're pre-approved. Why would we have these in the first place to where we would need to keep pre-approved vendors?
[00:15:20] Staff: So those are on the vendor list. Anyone has the ability to apply to be on the vendor list. Whether or not we use their services is dependent on, you know, what we're providing or what our needs are. But there are some of those that we use for, like, the medical services are often related to if we have anything from the Sheriff on, oh gosh, the blood alcohol tests, but also we use it for HR sometimes for their physicals. Sorry.
[00:15:58] Councilmember Quintanilla: Okay, that makes sense. Just, yeah, the ultrasound seems interesting. I can understand the field test. So I would appreciate if we could have more. I'll look more into it. Yeah, thank you.
[00:16:12] Staff: Sure thing. Are there any other questions on this slide, or...
[00:16:19] Staff: Okay. The next slide we have is broken down by department so you can see how those budgets are distributed. What I will note is just, you know, the major changes year-over-year. One is the transfers out has the most substantial increase, and those are primarily dealing with our transfer of Measure G funds to the projects we said we would be spending them on, as well as transfers for operations for fire services, the aquatic facility, and library. The other major increase you'll see there is police services, and that has to do with the annual increase that we are anticipating for police services this year, and the additional officers are included in that number. If there are no questions, I will move on to the next slide.
[00:17:10] Staff: And this list we added to the presentation this year. We wanted to give you an overall look at what the professional services are that we have going through the city each and every year, almost coincidentally with your question, Councilmember Quintanilla, about which ones we are actually using. And so that's what this represents, are the other professional services that we contract for annually.
[00:17:41] Staff: So, with Measure G on our five-year plan, the first column shows what we had anticipated or what we had said we would use Measure G funds for this first year—first full year, I should say. What we're proposing, based on the amount we're anticipating coming in, is what you see on the right there. So, fire will need a transfer of 7.75 million. The renovations, 2.4—that's exactly what we said we were going to do. Police operations, 2.7. Public works stormwater improvements, a million—we have pushed that project out, so you'll see additional funds in future years. And then facilities maintenance, that number is based on our reserve study, and so we put the amount remaining from the 24 million in there, and then if other needs arise, we will have to make appropriations at that time. And then finally, the $6 million that we planned for the library, that was moved up from the five-year plan from 27-28. Are there any questions on this slide?
[00:18:51] Council Member: I do. Can you make a distinction between the first two lines: capital improvements versus remodel?
[00:18:59] Staff: Yes. Be redundant, my apologies. So, the capital improvements are the—I'm going to say it wrong—off-site improvements for Station 102, and then the remodels are 33 and 71. Any other questions?
[00:19:20] Staff: Okay. So, our all-fund summaries. Generally, when we talk about a balanced budget, we talk about the general fund, but obviously we have other funds that we spend from. Our special revenue funds are typically restricted, and so right here you can see our beginning balances and our ending balances. Capital project funds are just that; we use them for our capital projects. Internal service funds are going to be items like compensation leaves and leave balances, and different debt service that we expend from. Our enterprise funds are Desert Willow and Palm Desert Office Complex. Our debt service funds are strictly for our bond...
[00:20:02] Staff: ...issuances, and then our fiduciary funds are relative to—oh gosh, I'm going to say the wrong thing. Um, anything that we're holding on behalf of someone else. And so we are indicating that we're estimating a beginning balance of 321 and an ending balance of 274 with everything that we have anticipated for the year happening in the middle.
[00:20:25] Council Member: If you can, when you talk about fiduciary funds, things we are holding for other people, are these bonds people have put up during work projects?
[00:20:34] Staff: There's a few things. It'll be those type of bonds, um, but also, um, I believe in our fiduciary funds—I have to look at this, this, the worksheet we have—that's where we hold our startup monies as well.
[00:20:47] Council Member: Thank you, yes, ma'am. And then a question on the capital project funds: what proportion of capital project funds stem from transfer-ins from the general fund?
[00:21:02] Staff: That's a very good question. I don't know the exact number right now. We do have about 40 million, from what I recall, that are, um, leftover bond proceeds from the successor agency. They're sitting in fund 451, and we use it strictly for capital projects because that's all we can use it for. And then the balance would be transfers from the general fund or balances that remain from projects that are complete that had a balance. So the majority of them would primarily be sourced ultimately from the general fund, especially going forward with no RDA.
[00:21:39] Council Member: Correct. Okay. So you said we have 40 million in that 451 fund, which is leftover RDA that has to be spent.
[00:21:49] Staff: Correct.
[00:21:50] Council Member: That theoretically could cover the entire library. Is that right?
[00:21:54] Staff: We are using 20—worst case, 20 million from that bond for the library. Yes.
[00:22:00] Council Member: Then, but there is an expiration on those funds.
[00:22:04] Staff: I've learned to say we have a reasonable expectation that we will spend those funds quickly.
[00:22:10] Council Member: All right. So, so why hold back the additional 20 when we know we've got a project coming? I mean, this is just...
[00:22:16] Staff: There are several projects online right now that are using those bonds, and it's actually in your CIP list. You'll see it listed with all those projects. We have uses for the other 20.
[00:22:26] Council Member: Thank you.
[00:22:27] Staff: Yep, it's all been allocated.
[00:22:29] Mayor: Any other questions?
[00:22:31] Staff: Okay, thank you. So, a quick picture of our capital improvement plan right here. This is just the visual representation of, um, what Jess will go through later. Um, as you can see, primary, um, primary funds are spent for capital projects, but then we also have public work facilities, some econ and public work, public art, um, projects coming up, and then the different, um, capital improvements at Desert Willow. So, we're going to go through, um, the 10-year, um, cash flow for the general fund in a little bit. This is just a visual representation of the first five or six years. Um, the yellow line represents the dip into the general fund that's needed to accommodate the various CIP projects that we have that we don't have other funds to, to use for. Um, and those are all going to be decisions, you know, that we'll have to make at that time. But this is what it looks like as of right now. And here we go. So, the reserve policy that we have currently and how it's written allocates these different, um, thresholds that we have to meet so that our, uh, fund balance is allocated and reserved properly based on what City Council has approved. Right now, we have—we are estimating, um, a fund balance of 99.4 million, and of that money, the allocation is just as you see it here. So, we have actual funds that cannot be touched of 2.8, and then we allocate for different reasons other, um, amounts. What it leaves you with is about 23 million that can be allocated as discretionary or unassigned. Um, that's the, the, the snapshot picture of what that is today. The projects that we have coming online like the regional park, the, the, um, community park, those funds in the future are allocated in the 10-year. And I have that on the next page. And so you can see how completing those projects, if we were to use fund balance, how it impacts the, um, reserve requirement. So, when we get out to...
[00:25:01] Staff: 2027-28, really, that's when we start dipping into that fund balance and bringing it below 100% funded. Um, it maintains that level for a while because our expenditures often or traditionally exceed the growth of our revenue. And so as you go out those years, we kind of maintain 58%, 57%. And then beyond the 10th year, that 58% just starts climbing incrementally year after year. All things, you know, remaining the same. And if there are no unforeseen circumstances that require us to dip back into it, I will say, um, this has always been something, you know, um, the chicken and the egg. Which one's better? Do we spend more money to make sure we're providing, you know, what the community needs, or do we hold on to it, a lot of it for a rainy day? Um, when I look at other cities, they're typically geared towards, um, achieving 25% reserve. So, we still are more reserved than most cities are, but that's your comfort level. You know, where you want to be, and those are the decisions that will have to be made moving forward.
[00:26:13] Council Member: If I may, I was looking through the reserve policy requirements and they are very conservative and, um, definitely a lot of wisdom put into this reserve policy. So I, I, I, you know, I see what you're saying is they might be a little too aggressive, kind of where I'm more comfortable. So looking long term, you, you, you suggested that getting past that 10th year, the reserve will likely climb. So it's kind of we're looking at the path we're going will put us through some lean years, but long term it should balance out eventually.
[00:26:54] Staff: Eventually, it's going to take some time, but yeah.
[00:26:58] Council Member: Alternatively, we would have—and that's for us to decide—is do we make some changes now that reduce the lean years, but the sacrifice is less capital in services that we've—
[00:27:11] Council Member: Yeah, okay. Yeah, I mean, this was very, this was very helpful. Good, and I thank you for putting it together.
[00:27:16] Staff: Absolutely. There's a couple things that we can look at at that point. Um, you know, we've talked about capital appreciation bonds funds so that it's not, um, constricting the general fund. Um, but you have that ability to finance those improvements. We haven't done that in the past, but it is a tool that's out there. And so you level off those payments and then it doesn't impact the fund balance as much. Um, but that's a decision you guys can make down the road. Um, but I just want to make sure you have all the information. So, um, this is what it looks like just as is.
[00:27:54] Staff: Okay. Any other questions on this page?
[00:28:01] Staff: Okay. So, we will jump into the department budget updates. And up first is Miss Staley.
[00:28:13] Andrea Staley: All right. Good afternoon, honorable mayor and members of City Council. My name is Andrea Staley and I have the privilege of serving as the city's Human Resources Director. What we're going to discuss today is a brief overview of the current staffing as well as anticipated future requests, along with the city's, um, current recruitment and retention strategy. So as you can see in the organizational chart that is being presented, this is the current staffing divided by the departments and the divisions within each of the different departments. The personnel changes that we wanted to highlight, uh, include what was, uh, presented to the City Council July with the total positions. Um, on the position allocation, we had a total of 147 FTEs. Midyear, we, uh, requested and was approved 158 total positions, which is 151 FTEs since we added two part-time employees as well as the three street maintenance workers that, uh, we want to make sure that we had with the Measure G money. And then for '25-'26, we're requesting a total of 157 FTEs, um, which includes an associate planner, a code compliance officer, a permit center coordinator, a project manager, and includes our current public works management analyst. And so those are the additional position requests that we have. These requests come in order to assist in the completion of projects, programs, serve customers, and streamline our processes. So that's the justification for the additional positions, which goes to slide 30 that I talked about. So, so as I mentioned, these justifications, um, really are in order to complete
[00:30:02] Staff Member: ...council priorities and goals as well as a state-mandated process, with a focus on one of them being on commercial areas, which is what we're seeing we need to focus on for our code compliance officer. One thing that I do want to mention is that these vacant positions, though they're being requested, we'll analyze to see if we do need to fill them and at what level. So, though these are being requested, it doesn't necessarily mean we're going to fill them as of July 1st. It's definitely something that we'll look into to make sure that everything's aligning and our budget meets the requirements. Go ahead.
[00:30:43] Staff Member: So, I do want to go ahead and talk about our recruitment and retention. This is important for everyone here at the city, as well as, I'm sure, all the council members. So, the city employs a comprehensive approach to recruitment and retention, and we leverage both external recruitments as well as internal promotions to fill positions with the most qualified candidates. And this helps us remain responsive to customer and organizational needs and align with the council priorities and goals. And then one thing that we're going to make sure that we do is that when there are internal promotions, then we'll notify council on the promotions to make sure that there's transparency between those different promotional decisions as well as city council. We employ some key recruitment strategies. As I've mentioned, the internal promotion, and that reinforces the city's commitment to developing internal staff, and that helps us to support employee morale, enhance engagement, reduce the recruitment costs, cultivate future leaders, and reinforces accountability and strengthens the team's continuity. We have competitive compensation. In 2022, we did a classification and compensation study, and through that, we decided that we wanted to ensure that the city maintains top talent through being within the top two tiers of our market basket. The career development opportunities are aligned with our internal promotions because we have found that ongoing learning and professional growth are key to retaining our high-performing employees, and the city supports continuous development through our leadership programs, our mentorship programs, training, and that really fosters our culture of continuous improvement and team. And then our positive and productive work environment through the different—the workplace culture is really important here, and it's central to our employee satisfaction. Regular employee recognition and engagement initiatives help maintain the high morale and promote internal relationships, contributing to the overall success of the organization. So, I wanted to make sure that we highlighted this so that way we showed the strategies and the justification, as well as we want to make sure that the city maintains an employer of choice capable of maintaining, attracting, and developing our workforce, who are exceptional in my opinion. So, I'm here to answer any questions.
[00:33:23] Council Member: Are there any questions?
[00:33:28] Council Member: Um, obviously we want to make sure we've got the balance between the positions we need and the positions that we have. I don't recall—I think it may be a conversation I'd had with our interim city manager about the permit center, or that there was somebody that has the engineering background that would be present at that front level. Is that a conversation that we'd had?
[00:33:53] Staff Member: Correct.
[00:33:53] Council Member: Okay. Um, at the recent SCAG meeting, one of the things they mentioned is that those positions were being absorbed through AI, and that once we were—and we get all of our code realigned—that in some cities, once they've implemented it, that has gone and approved within minutes, which would allow all of the process to streamline. Do you anticipate—and I know, again, magic crystal ball—that our plan for hiring would change the number of positions with increasing technology?
[00:34:34] Staff Member: I think that the luxury that we have is that because we're doing professional development, if that were to develop, we can train people to do other things. So, like the one-stop shop with our permit center, one of the goals is to truly serve as a one-stop shop to serve multiple needs. And so we're not siloed as permit center technicians only doing permits. And so because of our professional development and the culture and continuous...
[00:35:00] Staff: ...improvement, even if there are changes that happen that way tomorrow or 10 years from now, through these different programs, we're confident that they'll still have positions that meet our needs.
[00:35:13] Staff: Any other questions?
[00:35:15] Councilmember: I appreciate your answer because it shows how Palm Desert is open to evolving and to responding to the exterior change so that we remain relevant in the workforce and with our community. So, I definitely appreciate that answer. Thank you.
[00:35:34] Staff: Perfect. Thank you. Yeah, and just to follow up on that, one of the things, you know, with working with it and we're working to bring on more AI for the city, what we've been reading about is the transition from needing technical expertise. Once you bring AI on, it's needing the analysis. So, you still need the bodies to be able to interpret what they're getting out of the AI. So, to what Andrea said, this is true. These are the numbers that we have for the different departments broken out based on what Andrea was presenting just a minute ago and where those vacancies lie as she mentioned. Before we jump into the departments, I would like to go back to Jan's question on the fiduciaries. On the fiduciary funds, I apologize. It means a different thing in every report, but for the budget, it's specific to our debt service for the different assessment districts and CFDs that we have throughout the city, as well as our retiree health stipends. So, I apologize. So, with that, oh, I'm going the wrong way. With that, we will jump into the city manager's office and Richard Kenoni will take over.
[00:36:49] Richard Kenoni: Good afternoon, Mayor and Council. Just to quickly touch base on some of the major initiatives for this upcoming year in the City Manager's Office, with the City Manager work group really focusing again on, obviously, city operations and the implementation of the six Council goals that we just looked at, as well as other priorities that come up throughout the year, and continuing to evaluate our services and projects, looking to make sure we're increasing efficiency and effectiveness, and most importantly, that the community satisfaction is there for what we are providing. Some of the major initiatives that the City Clerk and Human Resources are working on fall right in line with that increasing efficiency, with the City Clerk really focusing on our records management, both improving online access for records for individuals so that they could get them much quicker, but also cutting back on the amount of staff time that is being spent on researching those records when they can easily be pulled up online, as well as updating the records management policy and citywide training on records retention. In addition to that, continuing to focus on software enhancement for boards and commissions and agenda management. Our Human Resources group is again assisting in the implementation of our HRIS, or Human Resources Information System, also Workday, making sure that that is all, we're all combined on one system with Finance, which will greatly improve just our overall operations and efficiencies and how that workflows between HR and Finance. As Andrea mentioned, continuing to deliver professional development, as well as focusing on renewing our autism certification. Some of the cost containment measures that we'll be focused on is, from the City Manager's Office, again, working to modernize our internal systems to support that delivery service, and then continue to identify grant opportunities to supplement where we can with our programs that we're bringing forward. The City Clerk, again, looking at, as we mentioned, looking to utilize software to streamline agenda management as well as records management, and then proactively seek opportunities to address recurring records requests. So whether there's an FAQ or frequently asked records, again, looking to create just opportunities for individuals to find things much more expeditiously. And then from the Human Resources side, looking again, obviously, to decrease liability wherever we can and recruitment costs through professional development and training programs. Again, keeping in line with that continuous improvement, and then investing in employee appreciation, as well as reducing the administrative burden by going to the streamlined system with Workday. What that equates to as far as overall dollars for the department on the next slide... there we go. So overall, as a department, if you look at all the way to the right from last year's...
[00:40:01] Staff: Budget to this year, there's an overall reduction of about half a million dollars. The largest change is within the City Manager line item, from roughly $2 million to $1 million. That had to do with the reduction in five employees, primarily the engineering staffing that was under the City Manager's office. Community safety—I wanted to touch on that line item. There is roughly a $100,000 increase there. The largest or lion's share of that increase has to do with emergency planning and really making sure we had funds available. So, if we do have another event where we need to engage our EOC, we have some funds available right away to access supplies or contract services, whether it be for portable restrooms, laundry to make sure we have clean uniforms for workers that are out 24 hours a day. And so, it's just getting better prepared in the case we do have another emergency. Most of the other line items, we have obviously an increase in City Attorney's budget, but most of the other line items are relatively flat. The other reduction, obviously, we don't have an election this coming year, and so you see a reduction from the prior year. And with that, I'll be happy to answer any specific questions. Thank you.
[00:41:23] Mayor: Are there any questions?
[00:41:26] Council Member: No questions. So when you say, 'if we have another emergency,' I am happy to see Palm Desert work so hard to be prepared, because we all know that it's when we have the next emergency—whether it's a Hilary, COVID, earthquake, whatever it might be. And I do want to assure anyone who might be aware of this study session that the City is always preparing and making sure that we're ready to help where we're needed in the community.
[00:41:54] Staff: That is correct. We're just bolstering that.
[00:41:58] Council Member: Thank you. Actually, I do have a question. Is it under the City Manager's?
[00:42:04] Staff: Finance.
[00:42:05] Council Member: Finance. Okay.
[00:42:10] Staff: With that, we'll jump into economic development then and have Martin take them.
[00:42:18] Martin Alver: Good afternoon, Mayor, members of the City Council. Martin Alver, Economic Development Director. We want to walk through the highlights here of our Economic Development Department budgets. Start off with just the couple of employee increases you'll see on that top line. That's just based on two additional part-time bodies or staff members at the Visitor Center that's currently being operated at the library. And then we can jump into major initiatives. Of course, one of the biggest initiatives that we're developing and jumping into is the mall redevelopment. We have been working with several developers at that site, and we're continuing to make some movement. And we will have some additional news here coming forward in the next couple of months on that site. Other things we're working on, of course, is the property dispositions. There's still several Surplus Land Act properties that we need to move forward. There are several over in the Desert Willow area. There are several here in South Palm Desert, including the Alejandro Alley or Parkway. And then also with business attraction is a big key initiative for next year. Another initiative that we're working on will be to re-evaluate the sculpture at San Pablo at the COD roundabout. So you'll see that on the list there. We will be updating the AIP, the Art in Public Places code, to bring that more into current standards. And then, of course, continuing with event promotion, which is a key factor for our tourism and for our visitors and residents. And then under cost containment, we're continuing to establish cross-training throughout the different divisions to ensure we have coverage and to ensure we have savings as different things develop. We're going to continue to evaluate our consultant contracts. And as we mentioned before, one of the other cost containment measures we're looking into is to try to reduce the cost of that sculpture at San Pablo and COD. As we move forward, we're continuing to pursue grants so that we can keep some of our initiatives moving forward. And of course, we're going to also be looking at bringing our media buys in-house. This is sort of promotional items for all of our community events and some of the other sponsorships that we have throughout the community. Any questions on these items here before I move on? Okay. So, moving on to the next slide, we'll just hit upon some of the key areas. There's not a major shift...
[00:45:01] Staff: In overall spending for the department, we will highlight, if you look under community promotions, the $275,000 that you see on that other operational expenses, that is for the courtesy cart program. We are going to be going out to an RFP this summer, so that will come back to the City Council shortly. The other event under that line item is $327,000 that we will talk about more. That's for event sponsorships and for promotions. It'll be a different slide that we'll walk through. If we move down to the professional services line at the bottom of that slide, you'll see some of our professional services that we're endeavoring, making sure that we have appraisals, business recruitment, merchant relations for El Paseo, and also some other community engagement items that we're working on. So that is what that line item is for. And then moving forward, if you go back to economic development, the very first line item there, you see the $51,000 that is for the ongoing operational expenses for the ERC, that is the former iHub. The $886,000 was for the mall, that is the community area maintenance items that we have. And then the $50,000 is for operational costs to maintain the formerly Sears building that the city purchased. So those are some of the key highlights that we have on that line item. Any questions you may have?
[00:46:45] Councilmember: I do. In terms of the public affairs, excuse me, the visitor center, going back and tracking over the last few years, there's quite a lot of fluctuation between what's allocated and what is being used. And that's before we took the visitor center to the level that we have now. That's quite a substantial jump in, I think the largest portion is supplies and office equipment. Being that it's inside the library, what kind of equipment do we anticipate that that's going to be for the visitor center? That's a big jump.
[00:47:21] Staff: Let me ask Thomas if he could help us with that particular question.
[00:47:35] Thomas Soul: Good afternoon, Thomas Soul, your Public Affairs Manager. I'm not tracking with the question, the jump for the visitor center.
[00:47:44] Councilmember: Yeah, on page 38, it shows that for the visitor center, it says 'other operational expenses,' it shows 1,000, and if you continue, it goes to 'supplies and office equipment,' 8,500. And I wish that we had the previous year. It's fluctuated, I think, one year from like 800, because that's one that... and this was one minor indicator to me when I looked last year at why this was such a wild fluctuation. And it even, I think, it said like shipping and freight, and this particular item red-flagged for me last year. And I think, why such a micro-element of the city is fluctuating so much that I thought, okay, maybe we need to pay deeper attention to the nitty-gritty, because if there's other departments where you suddenly have a $7,000, you know, variable element when you've got a $9,000 budget, that seems... Oh, here it is. For example, the previous year is 12,930, and the previous year it wasn't even that high when we should have been planning for our big anniversary.
[00:49:02] Thomas Soul: Two things that pertain here. One is that when we moved into the library, we began to sell t-shirts and pickleball paddles and stickers. So, the increase is the cost of goods from that. So, we buy the goods and then we're selling them, and then the goal is to break even there. So, there's a revenue line that comes along with this that's not reflected in that budget. That's the bulk of it. This year, we also purchased a HootBoard, which if you go into the library, you'll see. It's a digital board that helps advertise events and things that are happening around the city to catch attention as people are walking by and give them information about what's happening. So, that was a one-time expense that we incurred for that.
[00:49:48] Councilmember: So, would it be normal in a previous year before moving to the library to have an expense of, for example, $5,000 for supplies?
[00:49:57] Thomas Soul: No, and that budget had been...
[00:50:01] Martine: Just stable for a long time. We didn't really play with it once it got once we moved the visitor center into the into City Hall. We just sort of left it where it was, but we weren't spending much money there. And so when we moved it into the library, then we began to really take a look at it and see, um, we've absorbed a lot of the cost from the visitor center into the marketing budget. Um, I think the staff for one thing has been absorbed into there, but also some of the media elements. So there's been a lot of interplay back and forth, but that's sort of where you see that come into play. But if you said it's kind of maintained stable, I think that one really hadn't.
[00:50:37] Council Member: That's, that's one when you're saying from before. I mean, honestly, if, if this is an item that I would like to table because it, it does warrant asking why was there such a fluctuation. In fact, I think this is a conversation that I had had with, with Council Member Pedetto to say, "Do you, do you see any patterns of why this would seem logical?" And I think in one of the specific details it said something like postage and freight.
[00:51:04] Martine: Yeah. So, we get a lot of requests from people who would like us to mail them information about Palm Desert. And that depends, that's, that varies from year to year. It depends on the requests that come in. Sometimes we get more requests, sometimes we get fewer. And so, we maintain that line so that we're able to respond and we have, uh, money to pull it from. But the biggest jump there is really the cost of goods, um, that we purchased, which we budgeted at about $5,000 for that. And when we had our, our 50th, there wasn't any request for, for people to receive things or be mailed to them. None of that came from the visitor center...
[00:51:37] Council Member: Okay.
[00:51:38] Martine: ...line. Yeah. We paid for that from a, we had, we had a special fund for the 50th anniversary so that we could gather all of those costs in one, one cost center. So we knew what we were spending for that.
[00:51:46] Council Member: Okay. That kind of shed some light into it. I still have a lot of questions on that, but again, that could be for another day.
[00:51:54] Staff Member: Well, and just to support what he was just saying, it really is the cost of goods sold that is hitting that account for this year and he's proposing for next year. Finance used to have, um, an account for cost of goods sold specifically as an expense because we're trying to clean up our accounts to transition into Workday. We're trying to consolidate things to make them simpler—more simple, I should say. And that was one of the reasons why we budgeted in that account. He could separate it out and put it strictly in cost of goods sold so that it's distinct, if that is what Council wants to see.
[00:52:28] Council Member: Did we have a—one of, one of the, the reasons this will fluctuate so much is it's such a small number that the law of small numbers would just, you know, any variation will look big.
[00:52:41] Council Member: Thank you.
[00:52:46] Staff Member: Okay. And one of the things I thought I had footnoted on this page but I did not. Um, any of the tables that you see in black are going to be funded by other funds and the ones in blue are the General Fund, just for clarification.
[00:52:59] Council Member: You're welcome.
[00:53:01] Council Member: Do you want to proceed, Martine? Okay.
[00:53:05] Martine: Okay. We can move on to this slide here. It's just basically a summary of the city's proposed, city-produced events for next fiscal year. Um, there are not a lot of, uh, changes for this next year. Uh, we are looking to increase a little bit of money, uh, to provide a flyover for Veterans Day celebration. Uh, but for the most part, um, the rest of it remains the same. And we're happy to answer any questions you may have on any of these city-sponsored events moving forward. Okay. All right. I'm going to turn it back over to Veronica.
[00:53:41] Veronica: I'll jump in on this one. So we've included this page just to clarify. A lot of times our funding sources for outside entities gets confused. And so outside agency funding is, um, designated for supporting charities or, um, programs and services in the community that aren't offered by the city. Um, we just closed the application period on April 30th. The outside agency committee will go through those on May 29th and make their recommendation to Council, and we'll submit that to you on June 26th. Um, that funding source is typically around 215,000, and that's what we're proposing for this year's budget. Community event sponsorships are strictly for events or, um, supporting that, uh, civic engagement in the community from outside sources, and the same period closed for them on April 30th. We'll go to outside agencies on the 29th and will be brought back to you on the 26th of June. The proposed funding for that program is 190,000. And then we have a funding source for table sponsorships of 35,000, and that'll be included on that recommendation with the event sponsorships. Um, we do have a line in our guidelines for each that they cannot double dip, and so that's why we keep...
[00:55:00] Speaker: ...them on the same meeting for everyone to consider them at the same time. Martine.
[00:55:08] Martine: Okay, moving on to the community event sponsorships. You see the list here of the annual events that the city sponsors. Just a key note that Fashion Week and Food & Wine, this is their last year of sponsorship by the city. They will have to come back to the city to request additional partnership and sponsorship. And so the only other thing that, as Veronica mentioned, the table sponsorships, that is a number that'll come back and be refined once the outside agency funding committee makes a determination and the City Council approves it. Do you have any questions on these particular items? Happy to answer any questions.
[00:55:52] Councilmember: Quick question. Where's the Plein Air event? Where does that fall, or did we do a multi-year on that? Can anybody answer that?
[00:56:06] Amy Lawrence: Good afternoon. Amy Lawrence, Deputy Director of Economic Development. That will come back before you from Erica Powell, Management Analyst for Public Art. We're working with them right now to get information from this past year's event and find out what their funding request will be for this upcoming year, and we'll go forward at that time to see what your sponsorship level will be. We didn't want to include it with this. I don't believe they submitted an application. I'm not sure if they submitted an application for funding. It's sort of like the Desert X thing that we talked about. Is it going to be a study session? We wanted you to review that one based on what they had done last year.
[00:56:53] Councilmember: Okay. Thank you.
[00:56:58] Martine: Okay, if there are no additional questions, we will jump into the Finance Department. So, in Finance, we have two vacant positions currently: the Deputy Director of Finance and our Senior Contracts Analyst. We're evaluating the needs right now and will determine how those are filled moving forward. Our major initiatives obviously are the Workday implementation. Staff is in the weeds as we speak, putting together the HR and payroll components, and we're excited to go live with that. We are looking to update our investment policy to meet CMTA certification. That's the California Municipal Treasurers Association. We've never had that certification, and we'd like to achieve that. It is also working through Workday implementation, but they're also looking forward to the Clarity go-live in 2026, which is the new LMS system. And then bringing on business license implementation this fiscal year as well. For affordable housing, we are currently working through onboarding National CORE at the Housing Authority complexes. National CORE is a very large management company, and we're looking forward to what they'll bring to the city and to the portfolio. As well, we're doing an affordable housing program assessment. We're asking Harrison Associates to take a look at our programs, take a look at how we're working them, and seeing where we can identify any inefficiencies and make them more efficient for what we're providing. As far as cost containment measures, we are still looking through KPI development and continued process improvements. That seems to be a daily thing for us. We're continuing to facilitate training for all city staff and finance staff as well. And then also just continued risk assessment as it pertains to purchasing and contracts, and ensuring that all of our t's are crossed and i's are dotted. For IT, their focused efforts are on strengthening cybersecurity. Obviously, that is one that we want to make sure we have under control, and then utilizing consultants wherever necessary to streamline some of our processes. For the Housing Division, we're bundling contracts for many of the economies of scale we can achieve by using the Public Works vendors and their contracts that they're letting. And then we have been working with legal to amend the stipulated judgment, and we will get into that later in the presentation. It's a conversation that we want to have today. And then also, as I mentioned, working with the consultant to identify any inefficiencies as far as our budgets go. Some of the major changes you'll see are in Finance. Prior year to current year, we added two staff people during fiscal year 24-25 at the recommendation of our consultant who...
[01:00:01] Staff: ...said we needed additional accounting staff. And so we hired an accounting manager and an additional accountant. And they have a great team now and are doing very well. And then general services, you see an increase. Part of that is our increased requirement for PERS. It was an additional $500,000 if I recall correctly, as well as funds for contingency costs related to city council goals. And then the next increase you'll see is in information technology. As we transition our hardware costs to software costs, we have to buy additional licenses for the staff that we have on hand. And so that's where those costs are increasing. And then the major one of course is the interfund transfers. So 27.2 includes the 24 million from Measure G to all the various projects and programs that we will be funding this year. And then down at the bottom on the black table, those are the housing authority funds. So, we're anticipating expenditures for the apartment complexes at 10.8 million with revenues estimated at 10.68 million. That 10.8 includes our admin cost and our replacement costs and those are actually funded by our reserve so they don't impact the NOI for the properties. The housing asset fund has 787,000 budgeted and that includes our programs for housing and then the affordable housing line is the staff cost and any of our administrative costs. Are there any questions on this slide? We'll move on to the interfund transfers. As I mentioned earlier, the 27.2 includes library services ops transfer at 2.5, aquatic center transfer at 2.1, our other operational transfers, the retiree stipend Martine mentioned, ERC we have 325 we're transferring to economic development to support that, and then our LLDDS require transfer as well. And then the rest are all Measure G transfers for projects and programs that we said we would be doing this fiscal year. Are there any questions on this page?
[01:02:36] Council Member: No questions. Just a statement that I found this slide to be very helpful and informative. So, thank you.
[01:02:45] Staff: Absolutely. Okay, we will move on to library services and Shannon will be providing that for you.
[01:02:55] Shannon Vonagget: Right. Good afternoon, Mayor and City Council. I'm Shannon Vonagget, assistant director of library services. So, the library staff currently consists of eight full-time and 12 part-time employees for a total of 20 employees, 14 FTE. Some of our major initiatives that we're looking at for the next year is a student success card. This is a partnership with the local schools to try and give all students a card that will give them access to the library as well as to their school resources. We'll continue our One Book, One Palm Desert that's been very successful in the last two years. So, we're hoping to build it and grow it next year into a bigger program in March of 2026. And then our summer reading program, again, a program we're still building. We're getting ready to launch our second one, which will carry over from this fiscal year into next fiscal year during the summer. An increase to homebound services. This is an area we've identified a lot of our—not a lot, but a portion of our population has trouble getting out of the house. So what can we do to bring services to them and have them be able to use the library's resources at home? For our cost containment measures, we're looking at eliminating some extraneous databases. So we've been tracking statistics all of this year, seeing what works, what doesn't, what we can adjust. We're rebalancing the collection of books in the library to more match the population and what people are actually checking out and using in the library. And then we will continue to seek grant opportunities to fund programs and collections and other opportunities within the library. As you can see on the chart, I've included some statistics which compare with March 2023 which Riverside has provided. They—we have very little data from them, but we did have March of the year before we took over and we compared it to March of this year. We, as you can see, we almost doubled our library visits compared to what the county was experiencing in the branch. Children's programming, we don't have attendance number or we don't have...
[01:05:01] Shannon: ...program numbers, but the attendance numbers again were almost doubled. Teen went down a little bit. We're still building our teen program. Teens are one of the hardest populations to reach and convince to use the library. And then adult programs, again, we saw a large increase. Our volunteer numbers are a little bit lower, but that's a program we're also still building. We of course have more requirements for volunteers, like having a background check, which the county did not. So, we are growing that and we expect to continue to grow next year. And then circulation, a library's most important number. They didn't provide that number, but we circulated 14,000 items in the month of March. Next slide. So looking at our budget, um, our current fiscal year was 2.6 million and our proposal for the upcoming fiscal year is 2.5. One thing to note is the current estimate for the property tax revenue from the county is 2.6 and that's based on the current receipts this fiscal year. We won't have the actual numbers of what we're getting from the county until around August. So we have, um, adjusted this budget based on what we had from this year's data, um, our operational expenses. We don't have any real significant changes or one-time requests in the budget. We're kind of, we have a base year and going to see what we can do with that for the second year. Any questions?
[01:06:30] Council Member: Any questions, please? All right. Thank you, Shannon. Um, when you talk about increased services to the homebound, you're talking about is that the bookmobile being able to handle that?
[01:06:42] Shannon: That's one of the things we're looking at. It's, um, we've gotten some comments from people that they really like the digital being able to get the ebooks and the downloadable audio. Um, we have a sample Braille Institute library and that, and we can get people cards to the Braille Institute if they need those resources and those get sent to their home. But we're also looking at mobile and how we can either with a partnership or with Bob reach people at home. We're kind of still playing with what that's going to look like.
[01:07:08] Council Member: Perfect. And the second question is actually about the, the budget and might be for Veronica. I'm not sure. Um, rent is showing at 112. I thought the figure was more like 160 that we pay College of the Desert, 160,000 a year, or is it...
[01:07:23] Staff: It had built into the lease a percentage increase each year. So we, we put a little bit extra...
[01:07:28] Council Member: ...interest is actually lower than what I thought we had paid in previous years. But either way, it's good. I'm glad it's lower than what I thought it was. So, good news.
[01:07:39] Council Member: We're just going to pay them less.
[01:07:45] Mayor: Any other questions? No. Thank, all right. Thank you.
[01:07:52] Staff: So, we will jump into capital projects and Jess will be providing that for you.
[01:08:03] Jess: Good afternoon, Mayor, uh, City Council. Uh, we'll jump right into the capital projects budget. Um, starting with the, uh, full-time, uh, employees. Uh, we have eight currently. Uh, this coming year we're, as, as Andrea mentioned, we're looking to add a capital, uh, projects manager, um, to that, uh, uh, to, to supplement our staff with, with our existing workload. Uh, also with our, our major initiatives this year, uh, it, we want to, uh, advance priority capital projects. Of course, those, that's focusing on advancing critical projects like, uh, the new library, Fire Station 102, Dave Irwin Park, uh, as well as Walk, Walk and Roll, our, our key ATP initiative, as well as our key, uh, street reservicing programs, uh, including El Paso this summer, uh, Monterey, Cook Street, as, as we move on, uh, into the upcoming years. Also, some of our other key initiatives are, are our certified project management, uh, staff training. We want to continue to provide certified project management training to our select department staff to ensure that they're, they're the most efficient and effective in delivering our projects. Uh, strategic use of contract services. Um, this is to, uh, maintain, uh, the strategic use of contract services in areas like design engineering, uh, to enhance efficiency in managing and delivering capital projects. Uh, this helps to, to keep our cost down on all the, all these, uh, key projects. Um, and then lastly is public engagement. Uh, we want to sustain ongoing public engagement and efforts to gather valuable feedback and input from the community. And we've, we've found that to be really invaluable over the last few years in putting projects together, uh, to the cost containment measures. Um, shared, uh, cross-departmental administrative services, uh, collaborating with finance and public works departments, uh, to better utilize their administrative staff and maximizing staff strengths and capacities. That's...
[01:10:01] Staff: also helped to so we don't have to add additional FTEs and other part-time positions to help us administratively. And then lastly is identifying alternative funding sources, actively pursuing leveraging alternative funding sources like grants, non-general fund sources like Measure A, gas tax, highway safety, SCAG grants, and other resources to finance capital projects.
[01:10:28] Staff: As far as our budget, overall most of our items stayed pretty flat. You can see there's an increase with the request in the additional project manager, and then just personnel costs that have gone up, but overall, that's a snapshot at the capital projects budget. Any questions?
[01:10:50] Councilmember: Questions? Go. Thank you very much. And so I've been on council now for just over two years. And it seemed like when I first got on, we were spending a lot of money on what we call deferred maintenance. That's the way it was presented to me, right? And it made sense. You know, there were things that were let go and we got caught up on. We're implementing new software now. And the way Chris kind of described it to me is that every time we go out and do any kind of work on any of our city-owned projects or buildings, the staff can input that data and it's a tracking. So what I'm foreseeing in the future is no more deferred maintenance, just maintenance. In other words, things won't get ahead of us anymore. Is that kind of the plan by implementing the software?
[01:11:34] Staff: Yeah. And I think that that program, mainly with Public Works oversees that program, Cartegraph, and that's our key asset management program. So now we're able to backfeed a lot of that historical maintenance data in there, but also as we go along. So it helps to prioritize things in the future and gives us an idea of what's due, what needs to be on the radar as a capital project and improvement moving forward. So Cartegraph is a key item in technology for us.
[01:12:04] Councilmember: And that means that you're working hand-in-hand with finance. The money is getting set aside. There's no surprises and things.
[01:12:10] Staff: We definitely all our information, like when we do Fred Waring, that's something that will be updated in the system in Cartegraph to make sure that we're tracking all that historical data. And so that can help us to make those decisions in the future 5, 10, 15 years from now when it needs maybe another rehabilitation.
[01:12:28] Staff: If I may too, some of we're still working on some of the deferred maintenance. We're still doing ratchet up, to be frank. And though we will have records of what needs to be done and where we are, there are occurrences that may prevent us from doing it in the most efficient manner. Whether it's COVID, whether it's a downturn in the economy, things happen. But with that, as you say, with that program, it will help us to do the best job we possibly can with all the internal and external unforeseen circumstances. So, we are catching up and doing a great job. And the Parkview building is a great poster child for what happens when you fall behind.
[01:13:23] Councilmember: Are there any other questions? Thank you. All right. Thank you.
[01:13:30] Staff: And to Evan's question, facility maintenance is a pretty big component of the reserve requirement as well. So we do work with them hand-in-hand. So next up we have Development Services, and Rosie, there you are. Rosie will present that.
[01:13:52] Rosie Lua: Council, Rosie Lua, director of Development Services. Development Services is made up of five divisions. That's Planning, Building and Safety, Code Compliance, Permit Center, and Engineering. This year, we're adding three full-time positions to help us with our major initiatives. Planning will have the majority of these initiatives this year, which is long-range planning initiatives with the UNSP update, the Unified Development Code, the hillside regulations, as well as our downtown standards. One of our other major initiatives is also the General Plan circulation element and the CRPC work plan. For Building and Safety, we have virtual inspection software implementation as well as business license inspection program. For Code Compliance, we have business license as well as landscape programs that we're putting together. These are to help... we have a code officer to help us with these programs as well as the homelessness programs. We have recently
[01:15:01] Staff Member: transitioned that into our department. So we will be helping that grow. This year you'll see a common theme within our department. Last year we spent, our initiative last year was to work through our process improvements, streamlining our permitting processes, workflows, reducing redundancies, and this is the year of implementation. Next slide.
[01:15:31] Staff Member: So, our permit center is now working on implementing these new workflow processes through our land management software program. So, we are to launch in October. We're continuing the one-stop shop mission, and this one-stop shop mission is, as was mentioned, to have all of the services, all have our front line provide services to our customers. And so that is to service planning, building and safety, engineering, as well as code, to have them come into our lobby and have the services on the spot and then be able to walk out with answers to whatever questions they had.
[01:16:20] Staff Member: We are also building road maps for the public and also continuing on the cross-training for the permit center portion that's regulatory. We're building an in-house business license program. We're also revamping the business license compliance program as well as adding a component to our short-term rental outreach for HOAs and customers. For engineering, again, working through all of our streamline processes from last year, we're implementing all of those through road maps for internal and external uses, as well as implementing the engineering design manual that was just recently approved by council.
[01:17:04] Staff Member: With that, if you can go to the next slide.
[01:17:11] Staff Member: So for our department, you see an increase in code compliance, again adding an officer as well as adding in a component for our citations. We have our permit center that also has some increase in budget, and that is to also service us to having an additional person to help us, as well as all of our software that we're adding, as well as in engineering. In engineering, we are consolidating all of the budgets. And for engineering, engineering provides services not only to our development community, but also to public works and capital projects. And so most of our cost for development services is in our professional services, again to help us with our planning initiatives, which are CEQA consultants, general plan cleanup, as well as our CRPC work plan. And that is it. Do you have any questions? Okay. Next, we'll jump into public works and we'll turn it over to Randy.
[01:18:24] Randy Chavez: Good afternoon, mayor, city council members. My name is Randy Chavez. I'm the director of public works. Public works consists of five divisions: the administration, community services, facilities, streets, and traffic. Currently we have 40 full-time employees. This includes the three new street maintenance workers and the one new management analyst. Just some major initiatives for each of the divisions: for example, public works, we are using Cartegraph, that's our asset management software program which you asked about a little bit ago, and we're using that as our digital repository to capture all of our storm water inspection, playground inspections, capture all the deferred maintenance that's been taking place. So we're putting all that information in there. Community services, our major initiative is to refresh and update our parks, and a big portion of that includes new playground equipment at several parks. Our facilities initiative, again going back to the deferred maintenance, is retrofitting and upgrading our ADA compliance infrastructure. We have a lot of older facilities, for example at the historical society, that needs a bit of work. So, we're working on that. Our cost containment measures, we're for the public works administration division, we're always performing analysis on our supplies, our breakroom supplies, janitorial supplies, first aid supplies. So, we're always monitoring those.
[01:20:00] Staff Member: ...costs and, uh, pivoting and adjusting as needed. Uh, for community services, we're always seeking grant opportunities and taking advantage of those when they come up. And for facilities, uh, we are, uh, replacing a lot of the, uh, fluorescent lights to LED lights and fixtures, installing timers, um, and things of that nature. Next slide.
[01:20:24] Staff Member: For our street maintenance, uh, division, uh, we we intend to purchase, uh, the equipment necessary to perform the duties, especially from the lessons learned from Tropical Storm Hillary. Uh, this includes a new, uh, vector truck that will help us, um, quickly clean storm basins out in an efficient manner. And in our traffic division, uh, we are upgrading our traffic management system. The current system we have now is from the '90s. Uh, we can't get any parts, unfortunately. So, but we're bringing, uh, that system up to current, um, standards and also ensuring that it aligns with the CVAG Sync system. And our cost, uh, containment measures, uh, for street maintenance is, uh, we all heard about the recycled wood mulch. Uh, that's been a lifesaver. That's really decreased the amount of nuisance sand that the team has to remove from the streets. And our, uh, in our traffic division, we are, uh, combining, bundling is the key term there, uh, several projects together to get a better economies of scale. Next slide.
[01:21:34] Staff Member: So overall, our budget, um, has increased from last, uh, next fiscal year we are going to see an increase, um, and a big portion of that is, uh, uh, the addition of three maintenance workers and a management analyst. In addition, um, several of our maintenance contractors have requested CPIs and, um, so we included that in our budget for next fiscal year as well. Um, I could go into more detail if you'd like, but that's, uh, that's that's where the majority of the of the, uh, costs are are coming from. That, uh, concludes my presentation, and I'll be happy to answer any questions.
[01:22:18] Council Member: At, I think it's the Carlos Ortega Villages. I think that's the playground that is ADA compliant and has the, the swing that accommodates a wheelchair. Is that, is that the right park?
[01:22:29] Staff Member: Yes, it is Joe Mann Park, and...
[01:22:32] Council Member: Yeah. And, and it's a, it's a, it's a swing that doesn't accommodate a wheelchair, but it allows a, a parent/guardian, uh, to swing with their, uh, the baby, small child. Is there any plan to have similar kinds of, of upgrades and when any playground equipment is being replaced as needed?
[01:22:51] Staff Member: Yeah. Well, before we replace the, the equipment, we are, um, performing a lot of, uh, community engagement to see what, uh, the specific area neighborhoods, what they'd like to see. But yes, we, our intent is to make the, uh, playgrounds more inclusive to the, the different, uh, diverse children and their needs. Um, so we want to make sure that we cater to all the kids.
[01:23:14] Council Member: Thank you so much.
[01:23:20] City Manager: Okay, if there are no other questions, um, we'll move on. Um, City of Palm Desert is a contract city, and so the next section is developed with our major contracts in mind. The first one we're going to go through is Desert Willow, and I've asked Derek White to present that to you.
[01:23:48] Derek White: All right. Good afternoon, honorable mayor, members of council. Feels like we were just here doing this. I've done a few of these, I guess, by now. Um, all right. If we want to pull up the slide, I guess the number one goal that we all have as a team of Kemper Sports over at Desert Willow Golf Resort is to continue to be an award-winning amenity for the city, uh, and to provide a renowned guest experience for the residents and visitors to the, to the city, as well as to the valley. And so that's ultimately what we're looking to do with the vision of the budget dollars presented today. Uh, from an economic standpoint, I think everybody's probably aware that the golf industry went through a huge boom post-COVID, which Desert Willow was certainly a beneficiary of, although that fun ride is starting to come to a plateau, which was what we've kind of noticed, which is normal business cycle type of behavior. Uh, rounds have started to plateau, although we have been able to continue to garner a, a higher rate for, uh, fees at Desert Willow. And so our goal will be to continue to try to raise rates, uh, where we can, um, and we're likely going to be continuing to plateau the number of rounds played at Desert Willow, um, based on seasonality and...
[01:25:00] Presenter: ...whatnot and in season. This first particular slide really only shows expenditures. Um, I know that this is the traditional way that this city shows its funds. If there was any particular questions about the nodes, uh, I'd happily address those, but I think the next page probably is the one that we would look at since it's enterprise fund. We we tend to look at it more like it's a business, uh, in terms of cash flow, etc. So, if we could flip that slide, unless there was a specific question there, I think just to highlight what we're anticipating then economically is probably to be able to increase revenues by like 3%. We've gotten back into more of that cycle where we're trying to increase revenues to help offset uh increases in inflation and costs. Uh, we do think that we'll be able to do that and remain in a cash flow positive position from operations. In this particular report, what you'll see is a modified cash flow version of the facility. So, you'll start with a beginning cash number and then work through revenues, which you'll see. And again, that's about a 3 to 3.8% increase in revenues from 24-25 to 25-26. We are also in this budget accounting for roughly a 60 to 90-day closure of the Mountain View course to provide for turf reduction as a part of the Desert Surf project. And so there is some lost uh business there, but we had about the same amount of lost days the previous year with the Fire Cliff renovation. From an expenses standpoint, again with inflation and with uh growing costs of insurance uh and things like that, we are anticipating about a 4% uh incline there on operating expenses. And then the capital improvement section is kind of a collusion of um—not collusion, but a cooperation of projects from the city side as well as from the operation side. The majority of those funds you'll see a transfer back in from um would be the property amenity fees and things like that that are out there to fund those projects. And then Desert Willow out of its own operations always funds approximately $100,000 to $200,000 worth of equipment replacement on its own. That being said, you'll see that we will continue to increase the uh cash uh value by being cash flow positive from operations. And we have and will continue to uh maintain that 90-day reserve that we established last year. Uh, I would also highlight that we will be paying down the remaining $500,000 of the operational loan that was um provided to uh the the the facility, I don't know, four or five years ago. So uh that will no longer be outstanding and then we will be working towards uh future goals, right? Any particular questions? We can shift to the next slide which are kind of—
[01:27:58] Council Member: Go ahead. We've got a question.
[01:28:02] Presenter: Sure.
[01:28:04] Presenter: Oh, okay. Uh, the next one is really kind of a highlight of programs or ones that have been in the spotlight over the last couple of years. So, we'll just kind of go column by column. The first one is the Palm Desert Resident Card. We are not anticipating any changes, uh, I mean unless dictated uh from council members at this stage. I would highlight that even in the peak of season in March—now this is both resident play and residents playing under the platinum card uh program—that percentage of play for residents was at 20% even in the month of March and maintains about a 20% play ratio for their market for the entire year at this point. Um, that is up from some lean years right after COVID where that percentage had declined. Um, but we are now sitting pretty steady at that 20% resident play um slot. The next column is the champions club league and that is for our resident card holders to have the opportunity to have basically their weekly play program um like the country clubs might have. And so every Wednesday we reserve tea times for those members of that club that all must be Palm Desert resident golf card holders. And that program has been going well. They did ask for a few additional lunches to be um a part of that program and we have complied with that and I think everyone has loved those events. So that's positive. In the next column, this is our major uh internal loyalty program called the platinum club card. This program is available to both uh guests but at a much higher rate than to residents who get a much—a much more reasonable discounted rate. And this also will give your resident who'd like to have guests play with them the opportunity to have those guests play at a discount. Um, obviously the same sort of discounts uh are applied to visitors who purchase this card. We have uh last year we reserved half of our available loy—
[01:30:01] Staff: Loyalty cards for residents and then the other half are available for non-residents at this point. So, we are planning really no significant changes to the programs here on the summer VIP column. This is kind of like the summer loyalty program. We plan to not offer that this summer with there being limited availability, but that will be back in action in fiscal year 2026. But the benefits to the residents will remain for the summer because they actually end up getting a better rate than the typical resident rate when we hit the summer. As you can imagine, demand drops a little when the temperatures hit 120. I say that programming will stay relatively stable, but I assure you that means that programming is relatively busy at Desert Willow. We offer a number of concert events, holiday brunches, you name it. We try to make sure that there's something for everyone to enjoy at the resort. I would also say some of our key indicators don't show any signs of concern in the future in terms of, you know, booking paces for large groups for banquets are pretty steady. I would say lesson revenues are up. We don't see any early indicators that we might see any real downturns at this point, but of course, nobody really knows. I think that about covers it. I'll take some questions if there are any.
[01:31:24] Mayor: Okay, questions, please.
[01:31:26] Council Member: So, with the Desert Surf, once it opens, have you considered what effect it'll have on revenue? I'm assuming it's going to increase.
[01:31:37] Staff: Yeah, I mean certainly in season if you looked at our tee sheet, there's no spaces available. But that being said, in the summer, we're hoping—yeah, we're hoping that those families are flocking from all over Southern California and the country to come surf there. And yes, we do expect that to have a bump in, you know, play. We would call it 'surf and turf' at Desert Willow. But we've had some preliminary discussions. John Luff and I, you know, we meet often, have lunch, and talk about different ways to partner and make sure that we're making those amenities work for all guests. And so, I'm certain that it will have a benefit to Desert Willow.
[01:32:16] Council Member: Okay. I like the name 'Surf and Turf.' That's very catchy. Thank you.
[01:32:19] Staff: I wish I could say I invented it, but—
[01:32:23] Mayor: Other questions? Okay. The wisdom was no one really knows, right? Yes. But I do have one question. The 20% of the play that you said is resident, is that kind of the goal you're looking for is 20? Is that the sweet spot?
[01:32:37] Staff: I don't know that that's a goal that we have. I think that it'd probably be more of a policy goal that maybe Council may have, you know, in terms of balancing the operational break-even nature of the entity with giving opportunity to the residents. I'd say that we're probably in a pretty good sweet spot, especially considering we're probably at the peak of the business cycle. If the business cycle starts to do this and, you know, we have 30, 40, 50% resident play at current resident rates, operational break-even points might be a difficult thing to achieve. So, I think right now we're in a really good spot. I think that availability has vastly improved. I think that the virtual waitlist that we've added to their benefits, so at that three-day window, if there is a cancellation, they're immediately getting a push notification to their phone. There are things that have benefited those residents of ours that made it easier for them to get access, which I think we think is a plus for everyone.
[01:33:35] Mayor: So, they seem pleased.
[01:33:37] Staff: Yes.
[01:33:37] Mayor: Okay. And have we been able to analyze, are there particular golfers who are taking up the 20% more than others? Do we know how that's allocated?
[01:33:51] Staff: Individual golfers. I could absolutely generate a list of who the primary users are that are residents. And typically in the past when we've looked at this—I haven't looked at this this year—usually about 80% of the resident rounds are usually generated by about 500 residents. So you have your heavy users and then you have, you know, your frequent, your once in a great while, the ones that generate. That's typically how it works.
[01:34:18] Mayor: I see. That's typically how it works. Okay. Thank you. Are there any other questions?
[01:34:22] Council Member: No.
[01:34:23] Staff: Okay. Madam Mayor, may I request a small comfort break since I see we still have a chunk to go through?
[01:34:29] Mayor: Absolutely. So, why don't we take—does 10 minutes sound reasonable for everyone?
[01:34:34] Council Member: That would be wonderful.
[01:34:35] Mayor: 10 minutes it is. It's 1:34. We'll be back at 1:45.
[01:46:36] Speaker: So they've done...
[01:46:58] Speaker: I remember the kill or... do you remember with the Samsonite?
[01:47:08] Speaker: Yes, I'm old, Thomas. I know. I hate it. So...
[01:49:41] Speaker: There are so many things like the transfers out. I was literally going, 'I need to know where all the money's going,' to stumble upon that. So you put in there...
[01:50:00] Speaker: ...and we're constantly trying to...
[01:50:05] Speaker: Oh, my question.
[01:50:39] Speaker: Welcome back. We'll get back to work, and we're at, on page 64 or 205, I suppose, either way, on at animal control services. So we will hand this over to Richard Canon.
[01:50:58] Richard Canon: Good afternoon again. So, I wanted to go over our animal services proposed budget for next year. One thing I did want to mention before I get into any of this: the City Manager and I attended a call yesterday, a Teams call, with county staff. It was, I believe, the county executive assistant, executive, the director of public works, which is where animal services, Department of Animal Services, is under, as well as some of the other municipalities within the valley. And so, what they went over was really just some big-picture items with what they're looking at for next year as part of this rate study or fee study that they did. Unfortunately, we don't have a copy of that yet. We will be getting it shortly, so at least it was a peak into what we could expect. One of the items that they had proposed was an additional 38 staff members to assist with this. One of the things that the City Manager had asked for was a very detailed outline of specifically what those positions are going to be focused on, but more importantly, how they will help to improve the situation that we are currently faced with operations at the shelter. And that was a total cost of roughly 4.5. And so, this methodology that they're—and I wish I had the study to be able to give more information and details on it—but it included what they were calling a 'piece of the pie' methodology. And so, basically what that means is they looked at three factors: there's average length of stay, which accounts for 50% of that rate; 20% based upon the human population of the city; and then the third is the average length of impound, which accounts for 30%. And so, there were two different options that they had. There was an Option A and an Option B. Quite honestly, one was more of a subsidy from Riverside County—I believe that was Option B. Both are at a full cost recovery. Just for, again, raw numbers—I'm probably generating more questions than I have answers for right now, so I apologize—but Option A was at a cost of $331,000. Option B, which is what I believe it seemed like county staff was leaning towards recommending, would be at a cost of $257,000. They're looking at a staggered sort of approach to that, with, I think it was 50% first year, 75% second year, 100% the third year of the contract term. And what they're looking at doing is putting this in place for January 1st. And so, the good news with all of this that I'm generating a million questions on, we will be back with that. So, what I understood was kind of continued status quo is the way I understood it with how we're currently operating through the first six months, and then beginning January 1st, this new contract that they're proposing would come into play. And so, one thing that we want to do internally is really go through that in extreme detail, understand the numbers, how they came up or derived what our cost is, make sure those numbers are actually real, and then look at whatever other services perhaps that we can supplement to further reduce our overall cost. The number that we did put in for this year's budget, obviously, is a substantial increase over the prior year, upwards of $200,000. But just to give you some numbers of where we are just with sheltering cost, and again, those...
[01:55:01] Richard: Options A and B, that was just sheltering cost. And so, as you know, we do pay for a full-time animal control officer and there's associated overtime with that. What they didn't give us was if there was going to be a change in rate to that above what they initially thought it would be, somewhere between anywhere from 3 to 7% increase, and that was just based upon COLA increases and benefit cost health insurance increases. But again, we haven't seen those numbers. But just again, talking shelter costs, last fiscal year 23-24, our overall cost was roughly, round numbers, $53,000 in sheltering cost for the year. This year, the first three months—and so the numbers I have go to February, so eight months—we're at almost $111,000. So, our first three months of the year, we were at $46,000 already in sheltering costs. And so, there is obviously a significant increase. And so, we really want to understand again the numbers that they're coming up with. We also want to understand how our costs are rising so drastically. We've had two months out of the last eight where we exceeded $30,000 a month in sheltering costs.
[01:56:36] Mayor: Okay. Okay. So, as Mr. Canon said, he probably generated a lot of questions. So, if we can keep our questions succinct and to the point, that would be helpful, please.
[01:56:46] Council Member Nandi: I was just going to say perhaps this warrants a separate study session.
[01:56:52] Mayor: Yes. Okay. Yeah, we're on the budget. Stick to the budget.
[01:56:55] Mayor Pro Tem: I think I have a succinct question.
[01:56:58] Mayor: Yeah. Go ahead, Mayor Pro Tem.
[01:57:00] Mayor Pro Tem: 38 employees are scheduled to be added to their staff. Is that just at CVAC, or is that among all their facilities?
[01:57:09] Richard: It's spread across the entire system. And so the details is what we're pending to see—which shelter is getting added, which positions are added to each shelter.
[01:57:18] Mayor Pro Tem: And just to give an idea of scale, how many employees currently work at CVAC, the Coachella Valley branch or the animal campus? Do you know offhand, Richard?
[01:57:24] Richard: I don't offhand. I'm sorry.
[01:57:26] Mayor Pro Tem: Okay, that's all.
[01:57:28] Council Member: If I may, please. I want to just grasp the numbers. You said there was 53,000 in the last fiscal year total, or was that in the first quarter, or sheltering costs?
[01:57:40] Richard: Sheltering costs.
[01:57:42] Council Member: Okay. And that was—and you said up now through the end of February, we are at $110,469?
[01:57:58] Council Member: Sorry, I'm taking notes. What was that number again?
[01:58:01] Richard: From July through the end of February, 110,469.
[01:58:07] Council Member: All right. Thank you so much.
[01:58:11] Council Member: When was the last time they increased the costs? Do we know that?
[01:58:15] Richard: This goes back—the last time, the last series, the three-year contract back in 21-22. Again, it predates me, but my understanding was that was based upon a prior—trying to go back to the presentation we did, I want to say there was a fee study that was done right around 2020, 2019, and then there was a series, that 21 through 23, those three years, that's what that fee was based on, or those costs were based on that study. And they've recently just conducted a new study. They also did share that the shelter here is, I think he said, at 200% capacity.
[01:59:04] Council Member: Wow. Okay. Thank you. Is there discussions about licensing at all?
[01:59:10] Richard: There is. We didn't get into that much detail on it. One of the things they did look at was actually having the cities take on more of the licensing functions. They do a lot of that now, and then we get a credit on our monthly invoice. Again, until we see that information, the packet of information, I don't know what all of that means and whether that's something we can absorb. Most of it is done online. I think there's also other things that could be done when animals are having a vaccine. I think there's things that could be streamlined, but I'll save that for another work session.
[01:59:48] Mayor: So, as Council Member Nandi said, this is a whole other study session. I'm sure after you get that packet, we'll have a lot to talk about. All right. Thank you. Are there any other questions?
[02:00:05] Speaker: And next up, we have law enforcement. We'll jump back with Mr. Canon.
[02:00:10] Mr. Canon: So with certainty, I'd like to present just some of the major initiatives for law enforcement and some cost containment measures. So, of course, as we discussed earlier, the addition of six new deputies focusing on strengthening the community policing efforts and engagement throughout the city, focusing really on that retail theft, targeted patrol, special operations. They're working to enhance partnerships with retailers, particularly on El Paso, closely collaborating with the code enforcement officer. One of the, as Rosie indicated, one of the requests was for an additional code enforcement officer. That officer would be primarily assigned to our commercial areas. That way, there's one officer that can handle all of the commercial details with respect to code compliance, as well as continuing to be that liaison with the Sheriff's Office SET team and business team, as well as coordinating traffic enforcement on the major thoroughfares with our neighboring cities of Indian Wells and Rancho Mirage.
[02:01:18] Mr. Canon: Some of the cost containment measures, again, continuing to evaluate emerging technologies through the use of the cameras, which really assist in reducing staff time spent on prolonged investigations. I think as you see through the updates that come out, sometimes daily, folks are usually apprehended almost within minutes sometimes, as well as, as we were just discussing, even assisting with missing persons. I think the chief had mentioned we were able to locate some—they were able to locate someone in 16 minutes, which is pretty amazing through the use of the cameras.
[02:02:00] Mr. Canon: For the next slide, just looking at overall numbers, police services grand total budget of—and we'll get into some details on the next slide—just over 28 million, fire services at 32 million, so for a total public safety budget of roughly 60.5 million.
[02:02:25] Mr. Canon: And then this provides that detailed budget for law enforcement. I'm not going to go through every line item, but if there's any specific questions, I'm sure either I'll try or defer to Veronica to answer. But it does give you that breakdown as well as the FTEs, all the way from patrol, lieutenant, sergeant, all the way down to community service officer.
[02:02:56] Mr. Canon: Okay. Are there any questions or thoughts?
[02:03:01] Councilmember: No.
[02:03:03] Mr. Canon: Wow, that was easy. And for the next slide, I'll ask Lieutenant Pors to come up to talk about the current staffing counts.
[02:03:19] Lieutenant Pors: Good afternoon, everybody. Thank you very much. So, as you can see, these are our breakdown in staff. The reality is sometimes you have dedicated staff team members, such as your motors, your SET team members, and then you also have associated staff that support those people. So, in total, we have 73.9—you know, people who run these everyday operations of our fleet vehicles, people who are community service officers that aren't necessarily dedicated to the streets of Palm Desert, but those people work behind the scenes through evidence collection, running our evidence warehouse. So, part of the contract rate is included in these support staff members. So, I think, I know throughout the years we've had these discussions of, you know, what are these dedicated versus support staff, and that's where we're at now. So, we did have an increase of 34.9 deputies. And I know that we talk about adding six deputies, but what I want to make sure everybody understands is, for 24 hours of patrol time, obviously one deputy can't work 24 hours, 365. So, it's what we need to hire to get that job done. So, sometimes there's some questions regarding that, but that's why I want to make sure that's clarified, or if you need any further explanation about that.
[02:04:43] Lieutenant Pors: So, and then to begin with, I know the questions came up at the Coffee with the Mayor last week. Out of the six, we've hired three: the two motors and 12 hours of patrol are that one deputy. And we're anticipating in August of this year to get the other three on board. And I know Councilman...
[02:05:00] Staff: Troy always asks me one of those three on board, and we're shooting for August. So we're going for that. So, any other questions on this?
[02:05:07] Council Member: Yes. Have you identified the other three officers, or you're still looking for three qualified candidates?
[02:05:14] Staff: So what happens there is, obviously, when the cities decide to, 'Hey, we want to add services,' unfortunately, we just can't say, 'The next person up, you're in this position.' We have to go and hire them. And this is something that we talk with our HR team, the county team. And so we always give a lead time of 18 months from going through backgrounds, from them going through the academy, and then to when they actually complete our training bureau or training. So oftentimes we do conversation. We had the opportunity to get that one extra patrol deputy a little bit sooner than we wanted to. And recently, we had nine people get off training, and we have seven people that are just starting training in April. So it's not as easy as just picking somebody off the shelf and putting them into service. It's a lead time, and we're always working as the entire county to get more people and more staff here. And one of the things that was highlighted is, out of the nine people that just came out here to start working at the station, a majority actually now moved out here and decided, 'Let's make this our home.' And that's a big thing that we're trying to recruit people. Part of the rate is a 2.5% increase in desert pay for deputies that are working at the Palm Desert Station and Thermal Station because recruitment is a big issue. So we're trying to make them come out here and have them stay out here. That's the big thing.
[02:06:45] Council Member: That's so important. I know that housing costs have been a concern in the past, so it's good to hear that we're making progress there.
[02:06:53] Staff: Yes, we are.
[02:06:57] Council Member: I know another position that's really hard to fill are the dispatch, the 911 dispatch. Is that part of that in which our funding supports, or is that entirely different? That's just as a...
[02:07:09] Staff: Yes, it is part of it. It's part of the contract rate. It supports the dispatchers, and that's another avenue that we're trying to... Obviously, we are building a new dispatch center next to our station. So housing is also a big thing, and I know the association is trying to work on things and how to get people to move out here and stay out here and fall in love with the desert. That's the big thing, you know, that's the huge thing. So, yes.
[02:07:32] Council Member: Does that go under the supported office staff, or just trying to get an insight in terms of if they're local or...
[02:07:41] Staff: So, no, it doesn't come through this one, but there is a different rate because when you pay for the contract rate when it comes to supporting our deputies on the street that are in the car, that's part of that rate. So it's kind of broken down differently, but you don't necessarily get a number of dispatchers assigned to the city of Palm Desert.
[02:07:59] Council Member: Thank you.
[02:08:01] Mayor: Other questions?
[02:08:03] Council Member: You know, it's not only important, as you said, that you have the deputies come here and stay here, but it's so critically important to the community members that they build that familiarity with the deputies, and it's a consistency. I think that's so important.
[02:08:25] Staff: You're correct. Very correct. It means a lot to the community when they get to see the same people coming into their neighborhood and answering their calls for service, and you develop that rapport with them, and it makes everybody feel comfortable.
[02:08:39] Council Member: Yeah, I think it's meaningful. So, thank you.
[02:08:44] Staff: And the next slide is just calls for service throughout the year. Obviously, we went back to 2019, 2020 when we had a baseline of 171 hours of patrol time, which throughout the years, it's gone down to 144, but we're shooting to 180 hours now. The one thing I do want to highlight is, obviously, between 2022 and 2023 to '23 and '24, there was a reduction of calls for service. I don't have really an answer why people decided to call police less. You know, they did. But what I did ask is our dispatch center countywide, there was a reduction throughout all regions. There was, I believe, a 4% reduction between '22 and '23, and a 2.5% reduction between '23 and '24. So there was a slight decline, but as we all know, the north end of the city is what, 6,000 new residents are coming online within the next year. So we're working on seeing how that's going to develop, and we're going to have to analyze at what point do we create a new reporting district for our deputies. Usually, we need about a year or so of data to see how many calls are coming in, and at that point, we can break up beats in the city. So that's something we're always analyzing.
[02:10:02] Council Member: One more question. Um, what do you anticipate will be, um, the impact of switching to NIBRS? Will it, um, more adequately, um, reflect this, or do you think we're going to get more precise info?
[02:10:14] Staff Member: So with NIBRS, it's a reporting system and how crimes are reported. Under UCR right now, they take a snapshot of one crime and the most severe crime. So with NIBRS, what you're going to get is, um, you'll get a crime, but then you get all the associated crimes within it. So you may see the perception of a spike in crime when that happens, if that transition happens and the department's working through that, but necessarily it's just a reporting ways you're going to capture everything versus just the one major component. So as we, you know, transition throughout the next year or two, you know, obviously we'll work through the public safety committee and get that information out, but just more of how everything is captured. And this is a nationwide roll out. Some departments have moved out quicker and some are still transitioning like we are too. So any other questions or thoughts? Okay, thank you very much.
[02:11:12] Council Member: Thank you.
[02:11:17] Staff Member: And, uh, so the next slide just shows, um, uh, five-year, uh, actuals and, and projections. So you see, um, the, uh, column all the way to the right, the, um, box in red is where we are this fiscal year. Uh, and then if you look at, um, the very bottom, uh, you'll see the projections through from next fiscal year all the way through, uh, 2023-31. And then, um, going into our, uh, fire suppression, uh, some of the major initiatives, um, for this coming year, uh, they'll be working on, uh, transitioning to a national, uh, municipal staffing level. Uh, transitioning stations 33 and, uh, 71, those remodel, rebuild projects and the, uh, temporary housing for staff. Uh, working on improving the response times by adding that fourth fire station. Uh, reducing fire emergency medical services, um, high unit utilization rates by adding additional, uh, resources and staff, and then instituting a fire and life safety business inspection program. And so some of the cost containment measures associated with that again is that, um, that transition, um, to a, um, national municipal staffing levels, uh, negotiating, which involves negotiating a 56-hour max work week. Uh, and I'll let Chief Beverlin, uh, give the details on how that, uh, how that works if there's questions. Uh, evaluate a, a study, uh, and study user fees for fire and life safety business inspections and other fire marshal services. Uh, looking at updating costs associated with medical services and recovery for non-residents, and then, um, having a dispatch accreditation allowing for more efficient allocation of, uh, resources.
[02:13:03] Council Member: Can you go over, can you, yeah, the update costs associated with emergency medical service recovery from non-residents. Is that the ambulance fees for non-residents?
[02:13:16] Staff Member: Yes. And, um, Daniel brought that forward as far as the cost recovery and what we were actually requesting, and I believe you approved it at our last meeting, and so we'll be able to recover what the actual costs are now.
[02:13:28] Council Member: Okay. Thank you.
[02:13:38] Staff Member: And here we are for, um, the fire services budget and, and projections. And so, um, as you see the, at the very top, the, uh, star 25-26 shows the total revenue, uh, for this year at, um, just over 20 million, uh, and our total expenditures, uh, at, uh, 32, as well as that, um, transfer from the, um, general fund to absorb some of those costs.
[02:14:13] Council Member: Sorry, the reimbursement for the liner truck, how many more years are left on that program until it's paid off?
[02:14:21] Staff Member: So the reimbursement is a reimbursement from the cities of Indian Wells and Rancho Mirage for the time that they use it, and so we'll get it annually as long as it's in service.
[02:14:30] Council Member: Awesome. Thank you.
[02:14:38] Staff Member: No other questions. I'll ask Chief Beverlin to come up and overview of the fire stats and staffing levels. Thank you. Are there any other questions to this point?
[02:14:54] Chief Beverlin: Good afternoon, Mayor, Council. Uh, so what you're looking at is a, a brief snapshot of, uh, the last few years of
[02:15:01] Staff Member: Calls for service, ambulance transports, and average response times. So you can kind of see the trends. Ironically, calls for service in 2024 also went down, which is not the trend throughout the county. And I'm not exactly sure why that is. I think that we attribute some of that to our new dispatching procedures to where we're able to get alternate services. That program isn't fully off of the ground yet, but we will soon have a nurse on board that will be able to take some of our lower priority calls that don't necessarily need 911 service. So I think what you're seeing there is a little bit of that. And then also all of our units get dispatched based on where they are in either one of the cities. So it could be that, for whatever reason, Rancho Mirage and Indian Wells were closer to calls in Palm Desert coming back and forth from the hospital. So that decrease, even though it looks significant from the previous three years, I would anticipate that normally what we would see is something closer to a three or five percent increase for service. So I'm not exactly 100% sure why it is that it's one percent right now. As you can also see, the average response times have gone down since 2022. That has a lot to do with the addition of Medic Squad 71 that we put into service. That has tremendously helped us out. And if you may recall, the medic squad came online as basically a stopgap to be able to help out with reducing response times until the new fire station was open. So once the new fire station opens, Medic Squad 71 will be assimilated into Fire Station 102, and we believe that the average response time will go down even further. The national standard is four minutes or less, so in 2024 we almost met it. You can see the calls for service by station, so you can see which ones are the busier units there. And if you refer to the matrix report that the council paid for a few years ago, the high utilization rates of some of our ambulances and engines, specifically Fire Station 71 and 33, are going to be dramatically helped by the new fire station along with the staff and equipment that'll be hosted out of there. Next slide, please. This is a breakdown of the staffing for Palm Desert throughout all of the different stations and pieces of equipment. And so what you'll see is in the 25-26 year, we are asking to add positions, and that's primarily to staff the new pieces of equipment at Fire Station 102. In order to fulfill the mission for all three of the pieces of equipment that'll be running out of there, we need 27 total people, but as you see, Palm Desert's only going to be funding some of those. So, you have, as part of the MOU agreement with the County of Riverside Fire Department, you're going to have some cost-share measures with staffing on Engine 102. And then the truck program initially is 100% funded by the county. However, part of the agreement is that the city and the county will look together every couple years to see what the stats look like, and maybe we will start transitioning to more of a cost-share on that.
[02:18:51] Council Member: Because I always forget, would you confirm Station number 71 is Portola and Country Club? Is that right?
[02:19:00] Staff Member: Yes, ma'am. That pretty much concludes my part of the presentation. I'm happy to answer any questions.
[02:19:11] Council Member: I have a question. When you say that the medic squad will be assimilated to the new fire station, does that mean it would be relocated there, or that crew would be relocated there and then upgraded to an engine crew?
[02:19:24] Staff Member: Yeah. So, the Medic Squad 71 as we know it now will just become a surplus piece of equipment that more than likely will be at Fire Station 102. The staffing that is on it now will be transitioned into Fire Engine 102.
[02:19:44] Council Member: May I ask a question? Madam, in all of the excitement and knowing we will have new stuff coming, have you identified a location or a plan in terms of where we're going to support our personnel in transition? So when, when—
[02:20:01] Fire Chief: Fire Station 102 comes online, we already have the apparatus ordered and is in the process of being built. In fact, the new ambulance actually arrived into the battalion last week and is being outfitted in preparation. When we do the transition to have Fire Station 71 and 33 remodeled or redeveloped, we will have to come up with a plan on where we're going to place those folks temporarily. Fire department and staff with the city have contemplated all these things and are currently working on that. Thank you. Lastly, what you'll see on the screen is a proposed map of the 4-minute drive time from Fire Station 102. When we first kind of really started studying this, I believe that was in '19 or '20, we were at roughly 1,000 calls, 800 calls, and now we're up to 1,826. I anticipate with the, you know, the anticipated roofs that are going to be coming in in the north part of the city that when we actually open up the station, those pieces of equipment will probably be running roughly 3,000 calls or more. So, it's going to be a busy place as soon as it opens its doors.
[02:21:26] Staff Member: And then, Chief, if you want, I can jump in here. These are the plans for the two stations. For Station 33, we're anticipating $10 million for construction. I know Jess will go into these later. The design was approved, or to be approved, September 25, and then construction is anticipated July of '26 right after 102 is completed, and it's about a 12 to 14-month timeline. 71 demo and rebuild is anticipated at 17.4. And again, design approved in September of this year, construction to begin in July at the same time as 33. And then that one has a 14 to 16-month timeline. And if there are no other questions, we can move on.
[02:22:19] Council Member: This seems kind of big. I've lived here 30 years and we have three stations, don't we? But there's four stations listed here in the...
[02:22:29] Staff Member: We have 33, 67, 71, 55.
[02:22:32] Council Member: Okay. So we're including Indian Wells then. Okay. Just want to make sure which one we were including, whether it was the one near Sun City or Indian Wells is included. Okay. That's all.
[02:22:41] Staff Member: Yeah. So, Fire Station 55 is the Indian Wells Fire Station, and we have an MOU between the two cities to house an ambulance out there to help with responses into the area of Palm Desert that has poor response times from 33.
[02:22:55] Council Member: Okay, perfect. Thank you.
[02:23:03] Staff Member: If there are no other questions on fire, we can move on to the aquatic center. And Sean, if you... don't turn it over to Sean.
[02:23:16] Sean Mureer: Good afternoon, Mayor, members of the City Council. I'm Sean Mureer, Community Services Manager, here to talk about the Aquatic Center. So, the major initiatives: this past fiscal year we worked with Keer Sports on investigating some potential future capital improvements to the pool, but as we know, right now we need to focus on addressing deferred maintenance. So you'll see there the equipment room renovation is one of the top priorities, as well as replacing some concrete on the west side of the lap pool deck, installing a roof access ladder, and making some other fence improvements. We'll contain costs by implementing the Year 2 fee increase that was just approved, and that will provide some control on the city subsidy. We're also going to achieve some energy savings by installing the new efficient heaters and pumps in the equipment room, and we've updated the management and operations with YMCA this fiscal year as well, which reduced the management costs. Next slide.
[02:24:20] Sean Mureer: Here's the overall budget, and it's relatively flat with a slight increase, and it's basically due to, you know, giving the lifeguards raises as needed and then a utility rate increase, but otherwise pretty well flat. The focus is to improve the city's recovery rate. So, as I mentioned, we'll increase... we've looked at capital improvements, but barring those, we can increase programs and other marketing ideas to increase attendance at the Aquatic Center. The targeted marketing will look at...
[02:25:00] Staff: geographic areas that the Aquatic Center is being underutilized. We'll also incorporate passive income like the cabanas and new food and beverage options for folks, and then continuing to look at those capital improvements after those increases are achieved. We brought on an aquatics consultant just at the end of this fiscal year, so they'll be doing studies and customer feedback surveys to understand what people are looking for in their experience at the Aquatic Center. We can continue to meet that need. And then, of course, the fee increase is implemented, but we understand that's more of a cost control measure and not something that will necessarily increase the revenues at the Aquatic Center. We're looking to do that through the marketing and programming. So, that's all I have for you today. I'm happy to answer any questions you may have. Thank you so much.
[02:25:53] Mayor: Are there any questions?
[02:25:57] Council Member: Thank you. When we first set forth on this, we were saying we'll bring back 60% in revenue. Where are we now, about 33%?
[02:26:09] Council Member: I know we've done a lot of work and really we're doing much better than we were. So, we still have a ways to go, but thank you for that and thank you for all the work you've been doing on this because I know this has been a challenge.
[02:26:25] Staff: My pleasure. Thank you.
[02:26:32] City Manager: So, Mayor, at this point, this would be the start of day two. We have an hour left in the study session. If you guys are ready to power through, we can do that, or it's entirely up to you.
[02:26:46] Mayor: I say go. Everybody say go. Does that work for everybody? Okay, let's go.
[02:26:50] City Manager: Perfect. So, we will jump right into the Capital Improvement Plan, and I'll ask Jess to come up. This page right here is just a high-level overview. You saw it earlier, but this one shows it by the different funding source. So, Jess...
[02:27:08] Jess Culpepper: Right, thank you. Good afternoon again. Jess Culpepper, Director of Capital Projects. Next slide, please. So, this is a slide just of the overview of our priority projects. It's a lot of big, fun projects we have going on with the library and the North Sphere—now Dave Irwin Park—as well as the Fire Station 102 build and the other two major renovation rebuilds. So, this is a quick snapshot. I'll bring your attention to the street resurfacing program. We have for Year 1, FY 25/26, we had programmed originally when we published this, $10,840,000. This was in case we have some road work for El Paso, El Dorado, and our slurry. So, we had that programmed just in case we had any bidding irregularities where we didn't get it in this fiscal year. We'll bring that to you next meeting for approval. So, that number will really come at more about 6.5 when it comes to you in June for approval. Next slide.
[02:28:14] Council Member: May I ask a question on that one? And going back to Measure A, and actually on page 87, I looked where the beginning fund balance is $12,893,060 for 2025/26, and it's almost half of what it is the year before. And then when we go down to ending fund balance, we see about the same. Is this just kind of catch-up and really tackling those CIPs?
[02:28:48] Jess Culpepper: And yes, I think that was a significant mandate, really, as the Capital Projects Department has been going and catching up on a lot of that backlog work. There were significant funds that were caught up in Measure A in the Portola interchange, and so there was some backlog there, intentionally and otherwise. So, that's been a big effort of ours is to really, with a lot of these bigger projects, Fred Waring, and not only with just capital projects, but public works projects as well. And it also goes to staff and other items, but it's been a big one to make sure that we use those reserves to make sure that's actually working in the community. And so, it's been really helpful in getting those reserves down. But yeah, we are getting to the point where those reserves are getting depleted and expended to where we're getting just to our annual allocations each year.
[02:29:43] Council Member: Thank you.
[02:29:46] Jess Culpepper: Any other questions on that? No? Okay. Next slide. This is just going a little bit more of a highlight on the timing and some of our projects. So, the new library facility, design should be complete in March...
[02:30:01] Staff: April of next year, with the demo of Park View will be included in that project obviously. And that's looking probably between February and May of next year to happen and take the building down. We'll start construction in summer of next year, 2026, and then construction will go from the summer of next year all the way through the end of 2027. The next one, it obviously says North Palm Desert Community Park now, and that's obviously the conceptual is complete. We plan and we intend to complete the design and bids and award the spring of next year, and that construction will also go through most of 2027. So we'll have that nice big 27-acre park moving. Northsphere Fire Station 102, obviously that's in construction now and that's expected to be completed by May or June of next year and online. Street resurfacing program, as mentioned, obviously El Paseo is the big push this summer, so that'll start. We're bringing that forward for approval next meeting, and that will go from June all the way through September, so that'll be the big rehab this year, and obviously our annual slurry. And then next year, we'll also look at doing major rehabs along Monterey, North Monterey, and also Cook Street as well. And then as Veronica mentioned with the fire stations, the designs will be complete in September of this year, and then we'll look to start construction in July of 2026. But the construction is targeted to end through the fall of 2027. As Veronica mentioned, these are contingent upon Fire Station 102 being built and operational so that they can switch resources and staffing around. A big part of that also is getting the temp facilities months ahead so that we have any of the bugs worked out, and we have that home away from home ready to go so that there's no last-minute moves in that. So that'll be a big part of getting that switch. But that's kind of how it'll go as far as Fire Station 102 being built online, and then we'll go with the Fire Station 33 and 71 construction after that. Walk and Roll PD, that's phase two, the bike lanes. That's the big ATP initiative, and that's the big connectivity for the bike lanes. That's finishing up design right now, will be awarded this year, and that'll move forward starting the end of the summer and work through the very beginning of 2026. And then phase three will be in the subsequent year. Lastly is the Haystack channel rehabilitation, and the design is being completed now in the summer. We had a lot of public outreach, positive public outreach, and found a way to settle on a good design. The construction will start the end of the summer and complete in early 2026. So we're excited about that project as well. That's just a quick snapshot on some of the bigger key projects we're working on. Any questions?
[02:33:32] Councilmember: Hi, thank you very much. This is good information on the Walk and Roll PD. We had a study session at our last council meeting about bike lanes and pedestrians. Is that a part of this?
[02:33:46] Staff: Yeah. So, Walk and Roll, generally speaking, is the connectivity for bikes and alternate forms of, you know, golf carts and also pedestrians. So phase two is going to be focused on the connectivity throughout the city where there aren't bike lanes or there are insufficient bike lanes. There will be those bike lanes so that people can connect bikewise for phase two. Phase three will be the pedestrian portion, where we add sidewalk where there may not be sidewalk to improve connectivity for walking.
[02:34:17] Councilmember: Okay, which I think is very important that we have continuity on our bike lanes, because you'll be in a bike lane and all of a sudden there's no bike lane anymore, which is dangerous. My comment is, at the study session that we had at our last meeting, I did voice concerns about narrowing Fred Waring for a portion of Fred Waring, and I thought there was going to be more time in the future to discuss it and have more community outreach.
[02:34:45] Staff: This is separate from Vision Zero, I think.
[02:34:47] Councilmember: Yes, that was my question. Okay, thank you.
[02:34:49] Staff: Right. But there will be projects that likely down the road in the future, we'll come to you with those projects.
[02:34:53] Councilmember: Okay, thanks.
[02:34:58] Councilmember: So, just which section of Cook...
[02:35:00] Staff: Street is scheduled to be resurfaced? So we have there's two sections, and one is—and Ryan can speak to this a little bit more wholesomely—but it's Fred Waring to Hovley will be one section, and this is contingent on CVWD finishing some of their work in the area. And there's another section just north of that. So those are in design right now. Highway 74, Cook Street, and Monterey are in design right now. So, we'll have those ready to go. Really, it'll depend on timing and need because they're both in need at this point, but as the designs unfold, we'll do another analysis on what's most in need and in timing with work going on.
[02:35:41] Council Member: Perfect. Yeah, I can definitely vouch Cook Street needs some love by the high school down to Hovley. Thanks.
[02:35:46] Staff: Absolutely.
[02:35:52] Staff: Okay. So, what Jess just went through is his top 10 of all the projects that they have on the CIP list. The entire list is on page 139, and that list will go before the Planning Commission before it comes back to you in June for their approval. Next up, we will have Randy Chavez go through the public works priority list.
[02:36:14] Randy Chavez: Good afternoon, Mayor, City Council. So what we want to highlight today are the projects, top nine. We couldn't quite get the top 10 on the list, but we have these projects currently in design or they're programs that initiated this year, and this is a snapshot and we'll go more in detail on the following slide. So, the next slide we have the ADA curb ramp modification sidewalks. This is to—we have a lot of non-compliant ramps throughout the city, and this is a program that we started this year. The current contract goes for another five years. So, we intend to keep budgeting every year to get a handle on this. The second project is citywide bike and lane striping improvements. We also started this project this year. Keep in mind that Caltrans, they changed the size of the lane or the lines from four inches to six inches. So as we make these improvements, you'll notice that the lane lines are a little bit wider. So, it's important that we cover the city to ensure that we comply with the Caltrans regulations. The third project we want to highlight is the citywide wayfinding and monument signs. We intend to take a staff report to City Council for final approval of design on May 22nd, and if approved, then we will move forward with cost analysis and estimates to bring back to the City Council for final approval so we could move forward with this project. The next project, Michon touched on this, Aquatic Center improvements. We are expecting a full facility closure in November and December to repair the pump room. The design is currently ongoing. However, we will come back once we have the final design and ask for an appropriation to cover the construction costs. The next project on the following slide is charging station improvements, and this is more for fleet vehicles. So the intent is to install 10 charging stations here at Civic Center, City Hall, and three or four of them at the corporation yard. The next project we want to highlight are the Civic Center Park improvements, specifically the playground and the surrounding footprint. We did take a design to the Parks and Rec Committee for an informational item, and then we will be coming back to City Council again on May 22nd with that design for approval. And the next project is the median landscape rehabilitation. We are developing a landscape master plan to rehabilitate the medians throughout the city so we could have one theme. As you drive around the city right now, you'll see different themes from moonscape to lush. So we want to make sure that we come up with one common theme for the whole city. So when you drive into the city, you know you're in Palm Desert. And this is also a City Council goal that we were given as well. And the last item combines two different projects: traffic infrastructure improvements, which also includes the traffic management system. But the traffic infrastructure improvement is to rewire approximately 20 intersections, a full rewire and changing out the cabinets and other infrastructure that are dated. That concludes my presentation, and I'll be happy to answer any questions.
[02:40:01] Speaker 1: Any questions? That's a lot. In looking at your extensive and very informative priority list, following up on what my peers have mentioned about the need for deferred maintenance, the priority versus deferred, is that based on funding, based on timeline, or based on contractors? Is there a particular reason? Because I would hate for these to be matters outside of our control and to have our residents and vendors assume that it's because we don't want to prioritize it.
[02:40:35] Speaker 2: No, this was in no specific order. I believe it was more just alphabetical order. But we did request funding for those that you mentioned deferred for the next five years. So we did request that in the budget.
[02:40:51] Speaker 1: Okay. So those are all just strictly monetary reasons for being deferred.
[02:40:54] Speaker 2: Correct.
[02:40:55] Speaker 1: Okay. Thank you.
[02:41:01] Speaker 3: Question. Okay. Thank you.
[02:41:06] Speaker 2: Okay, so that concludes the presentation on the CIP list. The next item we have up is the affordable housing discussion. And this is a little more encompassing of the program, not just the budget, but we thought it was really important to have during budget time because it does impact various parts. And so with that, I'll go ahead and jump in. The housing authority currently owns 15 rental properties. Those are the ones listed there. They're throughout Palm Desert. Cumulatively, we have 1,114 units that we provide to the community at affordable rates.
[02:41:53] Speaker 2: Some of the problems that we're identifying with owning those units is the units were acquired when we had a redevelopment agency. And so at the time, we had a 20% set-aside that we could put toward the capital improvements that were needed, by being owners of the units. The housing authority properties collectively provide a positive NOI of about a million to 1.2 million annually. That amount is the only revenue source right now for the housing authority, and it also covers staffing costs and housing division programs where necessary. The balance of the NOI does not provide sufficient funding long-term to support the capital improvement needs. One of the things we did do when the dissolution of RDA occurred was we had listed the entire requirement for housing, affordable housing in Palm Desert on our list, and it was denied the second year we requested it, but we were able to hold on to just under $12 million for housing for the housing authority, and we have been reserving that for a number of years now, but we are now dipping into it to make the capital improvements that are needed now. And those were also deferred improvements that occurred over the past 13 years since dissolution. That $25 million that we were receiving annually just isn't there to support anymore. And so that's the fly in the ointment that we really wanted to talk about with you. And we brought it up last year, but it's a little more urgent now.
[02:43:37] Speaker 2: The finite number of reserves that we have will be used in the next couple of years, and so it really is an important conversation. So a few of the solutions we've talked about are maintaining the portfolio. What does that look like? Maintaining all 15 complexes. So one of the major things we need to do is work with the Western Center on Law and Poverty. They won a lawsuit against the city years ago that requires the city, or the authority, I should say, to provide the units at varying levels that aren't what the current HUD or HCD requirements are. And so we have been working with legal counsel to talk to Western Center so that we could alleviate those levels and provide them at the same level, which would be what the current law requires affordability at.
[02:44:31] Speaker 2: Another idea is to apply for grant opportunities to help with those, but we know that there's a lot of strings that come with that. So it's not optimal, but it is an option for us to do. And then the other idea is to issue long-term debt using the properties as collateral, but then you only have the 1.2 million that you can use to repay that debt. So, it's kind of a catch-22 on that one. You know, the other solution is, does the city provide a...
[02:45:01] Staff: subsidy to maintain the units long-term? Um, and then also the other opportunity we have is to sell to a developer. The only way we can sell to a developer and make it lucrative for them is to remove the requirement from the Western Center. And so that's why that's such a big component for us and why staff has been working on that already to see what we could do there. Um, and we've also, as we mentioned earlier, been working um to get a housing administrator on um on under contract to help us identify any inefficiencies so we can, you know, create some wiggle room as well.
[02:45:42] Staff: So, I've mentioned the Western Center a few times. Just to go into it, the lawsuit occurred in 1995. Um, they stated that the city was not meeting the RHNA numbers. Um, they were successful in that. And so, um, we were required to use 100% of our set aside to provide affordable housing to meet RHNA at levels that are more restrictive than what the state and federal requirements are.
[02:46:09] Staff: Um, the details are listed there. Um, HUD and HCD offer rents at 50%, 60%, and 80%. The authority is required to do 5% increments. So we have to start at 20 all the way up to 100% at every 5% increment. So what that means is that our rent is generated at a much lower rate than what HCD or HUD would generate. And so there's a loss of revenue there. Um, if we were to um successfully amend the stipulated judgment, we would be potentially able to increase NOI by about $2 million. Um, that was the most recent analysis.
[02:46:52] Staff: And my next slide kind of gives you a quick snapshot of what that looks like. Um, we took a three-bedroom just in general and for Palm Desert, a family that has that makes 58,000 would qualify at 59% AMI. Their rent would be calculated at 60%. Which means it would be $1,219 a month. If we were to use the HCD model, their rent would be calculated at the 80% AMI number, which is 82,000, which would make their rent $2,000. Meaning there's a revenue loss of $800, $831 a month potentially by this scenario. And so if you take that times a thousand units, it's a substantial number.
[02:47:51] Staff: What does that look like? So long-term, the picture is exactly what you see here. We're showing um budget for 25-26 just as presented and then the capital improvements that we're anticipating. And as you see, when we get out to 28-29, that's when we run out of money to fund the capital improvements for um the housing authority. And just so you know, um staff has prioritized health and safety as the improvements they're making first and then everything else has to do with like deferred maintenance that um is none of I should say none of it is beautification. It's more these things need to be done and get done immediately.
[02:48:36] Staff: One of the ideas is I guess I should explain the housing asset fund. Housing asset fund are the funds that we have remaining from the successor agency or I should say from the redevelopment agency um that need to be used for affordable housing. They have very high restrictions, more restricted than what we have on our um apartment complexes. And so these are the monies that we use for um developer subsidies and um any other um development of affordable housing in the city. One idea is we could use these funds to help with the capital improvements at the housing authority properties, but is that the best use of those monies? Um, I'm not sure and that's something that, you know, we would need to discuss. But if we do that, you can see the last row on this um cash flow shows the 28-29 amounts and 29-30 that we would need and that would completely deplete those funds. There is no direct revenue s- revenue source for this fund other than repayment of loans. So once we use these funds, they're gone with the exception of about two or $300,000 a year.
[02:49:53] Council Member: Let me ask a question while we're on it. What would be another use? You said if we use it here, we couldn't use
[02:50:00] Staff: ...it for something else. If another developer was to come in and ask for assistance, it could be used for that. And when you think about, um, more bang for your buck, we do get, um, value in providing those subsidies to developers because we can count them towards our RHNA, whereas the thousand units that we already have have already been counted. Yes, ma'am.
[02:50:31] Staff: And so when we talk about the programs that potentially, um, could be affected by this directly with affordable housing, we're talking about our home buyer assistance program where we provide subsidies to home buyers to get them into homes. Desert Rose and Falcon Crest are the two, um, developments that the city did and that we use those the most with, but they're not the only ones. Um, ARR we do fund that annually anytime we can find, um, infill projects where we can buy a home and help someone get into that home. Um, and then our home improvement program, we budget for it annually. We currently only use it for emergency grants because the funds are finite and, um, it's it's still used today. And then ultimately the developer subsidies are impacted by any use of these program funds.
[02:51:24] Staff: And then so next steps, um, staff and legal continues to work with the Western Center. I will say on Tuesday we had a phone call with the Western Center's legal team. Um, we explained the situation. We did this about a year ago, but their, um, staff person had left and so we had the conversation again on Tuesday. Um, the legal team was very understanding and seemed amenable, but did tell us they have to tell their bosses, of course. Um, they asked us for additional information. We told them if this was something we could do, we would do it through attrition. So we would wait till someone, um, you know, moved out of the complexes and then when the new person came in we would qualify them at the new rates. Um, they understood that and so they asked us for what are our attrition rates so they could, um, verify those things and some other documents. Um, so we'll continue working with them on that. They said it could take a few months and so we may be coming back to you with that soon. Um, we've talked about the housing consultant and the inefficiencies. We're still working through that and we'll continue with them. And then, um, we'd also like to work with them. Um, Harrison Associates, um, has said that a lot of cities they work with are going through this right now and so they have worked with some to package up different complexes if that's the way Council decides to go and, um, they can, um, give us the best advice on how to package them up if that's what we decide to do so that, um, we maximize, number one, how we, um, are able to sell them but also how we manage our, um, affordability covenants with them moving forward. Um, so that would be, um, part of what we look at in the future and then, um, also continue working closely with the grants consultant to see what other funding resources we can tap into.
[02:53:21] Staff: That was all I had on that subject. It was a lot in a little bit of time. I'm happy to answer questions on it though.
[02:53:33] Councilmember: If I may, I'll just make a statement. Thank you for bringing this forward because it's an outlier. We have a, a good budget here with we saw a 10-year projection. I asked, uh, Veronica if that 10-year projection included a potential subsidy should we go status quo and reach the point where the RDA funds have expired and that, um, that is not in that 10-year projection. No. So, um, this is a very big looming thing of concern to me and I'm thankful that staff brought this up for us to know about and in and learning about what they're doing on it. But yeah,
[02:54:19] Councilmember: Well, I was going to say yes, it is a, it and it is a, a growing concern. So, we're going to need to take action sooner rather than later.
[02:54:29] Councilmember: And, uh, again another study session on this as well to see which option to go to take. I think that, um, again great job. This is wonderful and thanks to all of the staff that came and presented and helped us understand, um, just shows us where we need work, where we need more detail so that we can make the best informed decisions. Um, and I think we've found some of those places where we can hone in. Um, so thank you. Thank
[02:55:01] Councilmember: Thank you. Thank you. And affordable housing will be a painful subject no matter which way we choose to go in because they need work and because of everything that's built in, not only with the funding that we need, but where federal funding gets involved and HUD. So it's not just what we want to do, all of the tape that we have to go through. So again, thank you in advance for the work that's going to come with that.
[02:55:32] Councilmember: Okay, excellent presentation. Again, I agree with all my colleagues. Glad you brought it to our attention here. Looks like a looming issue we need to deal with. Can you just once more explain the distinction between the housing authority cash snapshot and the housing asset fund cash snapshot? We got roughly 34 million in one and 17 in the other.
[02:55:54] Staff: Yes. So the housing authority cash are the funds that we have strictly from the operations of the properties, the 15 properties. There is $12 million in there that has accumulated from the redevelopment agency that we're holding in reserve for capital improvements, and then about 8 million that we have built over time from positive NOI, and then just the revenue and rents that come in on an annual basis on top of that.
[02:56:28] Councilmember: Okay. So, what happens? Is that our money to keep if we sell these properties?
[02:56:36] Staff: That's a very interesting question. I don't think I've thought about that. I imagine it would be up to council if you're going to sell all of them or just the ones that possibly are not generating positive NOI. And if council decided to keep the ones that were generating positive NOI, I would think we would use that towards keeping those up to date. But that's something that we would have to bring you to consider.
[02:57:03] Councilmember: Yeah. Thank you.
[02:57:08] Councilmember: So affordable housing is one of the great oxymorons of all time. And it really, it's a difficult situation. It's very painful in many ways. Financially, it's difficult. And yet, as a city, our job is to make sure we take care of the most vulnerable. And this is an attempt to do that. But there are obstacles sometimes placed in the way by the state that make it even more difficult for us to help people out. So, we will have to look at it, and we're going to have to dig deep and make some difficult decisions on this.
[02:57:51] Staff: Okay, if there are no other questions on that, I just will do a quick recap. You've been proposed a balanced operating budget for the general fund with a surplus of 312,790. The proposal includes 24 million for Measure G being moved to all of the items that we said we would do on the 5-year plan. It also considers the 2025 city council goals and priorities. Special fund budgets for the aquatic facility, library, fire services, and entrepreneurial resource center anticipate transfers from the general fund to support their operational costs. 25-26 public safety costs account for the largest increase in the general fund expenditures this year, just under 9 million combined compared to prior year. The 5-year CIP includes over 120 million in projects anticipated in some phase of final design and construction in FY 25-26, capital projects including, you know, the fire stations, the library, the Dwin community park, storm drain improvements, etc. The cash flow projections indicate the general fund reserve balance may be necessary to complete some of the projects in future years, but the balance maintains 58% of the required reserve in further out in those years and starts regenerating after 29-30. Housing authority complex operations and staff are currently supported by positive NOI generated from rent revenue. The capital expenditures, as we mentioned, only have a finite number of reserves and will need additional resources, and staff looks forward to a busy and successful year and has compiled the comprehensive budget intended to achieve future goals of city council and the community. And I would just like to express my gratitude to staff for helping to compile this year's budget and a shout out to my team for taking on so much of it this year. And so that is all I have. If you have no further questions, we are done. That was a
[03:00:03] Mayor: So thank you very, very much. Any comments?
[03:00:08] Councilmember: If, if I may. Yeah, I would like to say good job and thank you. And our city manager started off by saying we have a balanced budget. And the story behind that is really great because you guys have been able to balance the budget really by holding costs steady but delivering a lot of capital. A lot of capital, and that's really, um, thank you for doing that. I mean, you just kept operating relatively flat and we're delivering a lot of great projects. So, so thank you to the team. Good work.
[03:00:39] Mayor: Any other comments?
[03:00:41] Councilmember: I, I do want to express something that there was concern about, and what we saw demonstrated here should alleviate much of that concern, and it was about Measure G where there was no accountability. But we see the accountability over and over again throughout this budget. So, thank you for that. And I know we're going to continue seeing the accountability and seeing the report cards on it and being able to stay up to speed with it. So, thank you for that. And I think, is that it?
[03:01:15] Staff: That's it, Madam Mayor. And we would return at 3:45 for closed session.
[03:01:21] Mayor: We'll do it. Thank you very much.