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Home My WebLink About23 Res 2021-51 and 2021-52 PBID III STAFF REPORT CITY OF PALM DESERT FINANCE DEPARTMENT MEETING DATE: July 8, 2021 PREPARED BY: Thomas Metz, Deputy City Treasurer Randy Chavez, Landscape Supervisor REQUEST: Declare the results of a property owner protest proceeding and, if favorable, approve the renewal of, and the levy and collection of assessments within, the President’s Plaza III Property and Business Improvement District for fiscal year 2021/2022. ______________________________________________________________________ Recommendation Waive further reading and adopt: 1. Conduct the public hearing and receive public comments. 2. Resolution No. 2021-51, declaring the results of a property owner protest proceeding for the President’s Plaza III Property and Business Improvement District for fiscal year 2021/2022 and approving certain related actions. 3. Resolution No. 2021-52, ordering the renewal of, and the levy and collection of assessments within, the President’s Plaza III Property and Improvement District for fiscal year 2021/2022. Background Analysis The President’s Plaza III Property and Business Improvement District (“PBID III”) was originally formed in fiscal year 2001/2002 for a five-year term. A majority of property owners subsequently voted to renew PBID III for three additional five-year terms, the most recent being from fiscal years 2016/2017 to 2020/2021. District renewal is now requested for an additional five-year term for fiscal years 2021/2022 to 2025/2026. PBID III properties are bounded in the north by Palm Desert Drive South (a frontage road adjacent to Highway 111); in the south by El Paseo Drive; in the east by Sage Lane; and in the west by Palm Desert Drive South and Highway 74. PBID III street boundaries are shown on a satellite map that is located in-between pages 15 and 16 of the 2021/2022 Engineer’s Report. � July 8, 2021 — Staff Report PBID III Public Hearing Page 2 of 2 The City of Palm Desert ("City") collects annual assessments from PBID III property owners in order to pay for landscape maintenance, street sweeping, and parking lot lighting within the common parking lot areas. The only modification to the PBID III budget will be a three percent (3%) cost-of-living adjustment for each year of the five-year plan, which property owners must approve. The attached resolutions wili declare the ballot results and, if favorable, permit the Council to approve the renewal of, and the levy and collection of assessments within, PBID III for another five years. Staff recommends approval of both resolutions. Fiscal Analvsis The assessment and collection of the fully levy amount will finance both ongoing maintenance of PBID III and associated staff costs, relieving the City of any financial burden. LEGAL REVIEW RI/t1 DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER �a,ir.�?'�9. ?'�"loou Sawr�?�'l. ?y(oou Robert W. Hargreaves Janet M. Moore Janet M. Moore City Attorney Director of Finance Director of Finance City Manager L Todd Hileman: L. Todd f-t��Cw�.Giw ATTACHMENTS: 1. Resolution No. 2021-51 2. Resolution No. 2021-52 3. 2021/2022 Enginee�'s Report r7ndy firestine Andy Firestine Assist. City Manager CITY COLTNCiLA�TTON AI'1'ROVED nrivrr:n �z �c�rvEn o��i i r�� h�Er.TINGDATE��Q(� �2� .�.i'I'S: J�;�, �a^a��. Ne.cia..(�it�.�y,�..i��G� �I�.r ]e';)r�:S: Uo`^e A�i.�iT�h`TC - � •,S�GV � • o�nt `� ;�_ftlFll:I. i3'�'s M[�S /_�v.2._ ,::ainal �>s� i�i7c� �siil� Csflt' 4`;�Y�l;':; {;;13re RESOLUTION NO. 2021-51 1 of 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, DECLARING THE RESULTS OF A PROPERTY OWNER PROTEST PROCEEDING FOR THE PRESIDENT’S PLAZA III PROPERTY AND BUSINESS IMPROVEMENT DISTRICT AND APPROVING CERTAIN RELATED ACTIONS The City Council of the City of Palm Desert (hereafter referred to as the “City Council”) does resolve as follows: WHEREAS, The City Council called and duly held a property owner protest proceeding for the President’s Plaza III Property and Business Improvement District (hereafter referred to as the “District”) in order to present to qualified District property owners the annual levy of assessments and a maximum annual assessment over the next five years, pursuant to the provisions of Property and Business Improvement District Law of 1994, part 7 of division 18 of the Streets and Highways Code of California (hereafter referred to as the “Act”), and California Constitution articles XIII C and XIII D. The assessments will pay for the costs and expenses of maintaining and operating District landscaping, lighting, street sweeping, and all appurtenant facilities related thereto; and WHEREAS, the landowners of record within the District, as of the close of the public hearing held on July 8, 2021, did cast their ballots, the results of which are shown below: Total Cast Total “YES” Total “NO” $ ____________ $ ____________ $ ____________ NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY THE CITY COUNCIL, THE LEGISLATIVE BODY FOR THE DISTRICT, AS FOLLOWS: Section 1. The above recitals are true and correct. Section 2. Ballot Process. The protest proceeding was conducted with ballots presented to qualified District property owners. These ballots were returned to the city clerk on July 8, 2021. They were weighted according to the proportional financial obligation of the affected property. Section 3. Confirmation of Ballot Results. The results of the counting of the valid property owner protest ballots that property owners within the District returned, prior to the conclusion of the July 8, 2021 District public hearing and property owner protest proceeding, is hereby confirmed and made a public record. RESOLUTION NO. 2021-51 2 of 2 Section 4. Levy of Assessment. The counting of the valid property owner protest ballots that property owners within the District returned, indicates approval of the assessment and the maximum assessment that will be allowed over the next five years. The City Council is hereby authorized to take the necessary steps to levy the assessments as approved. Section 5. Direction to City Clerk. The city clerk is hereby directed to enter this resolution into the minutes of the City Council meeting. This will constitute the official declaration of the result of the property owner protest proceeding. Section 6. Effective upon Adoption. This resolution will become effective immediately upon adoption. Section 7. Certification of Resolution. The city clerk will certify the adoption of this resolution. PASSED, APPROVED, AND ADOPTED at a regular meeting of the Palm Desert City Council, held on this 8th day of July 2021, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ KATHLEEN KELLY, MAYOR ATTEST: _____________________________________ M. GLORIA SANCHEZ, ACTING CITY CLERK CITY OF PALM DESERT, CALIFORNIA RESOLUTION NO. 2021-52 1 of 4 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ORDERING THE RENEWAL OF THE PRESIDENT’S PLAZA III PROPERTY AND BUSINESS IMPROVEMENT DISTRICT AND THE LEVY AND COLLECTION OF ASSESSMENTS FOR FISCAL YEAR 2021/2022 The City Council of the City of Palm Desert, California (hereafter referred to as the “City Council”), hereby finds, determines, resolves, and orders as follows: WHEREAS, the City Council did, by previous resolutions, initiate proceedings and order the preparation of a Management District Plan and Engineer’s Report (hereafter referred to collectively as “Report”), pursuant to the provisions of Property and Business Improvement District Law of 1994, part 7 of division 18 of the Streets and Highways Code of California (hereafter referred to as the “Act”). The Report discusses the renewal of the President’s Plaza III Property and Business Improvement District (hereafter referred to as the “District”) and the establishment of maximum assessments in order to pay for the maintenance and services of landscaping, lighting, street sweeping, and all appurtenant facilities and operations related thereto; and WHEREAS, the City Council did, by previous resolution, appoint an owners’ association, pursuant to the Act. The owners’ association will cause to be prepared an annual Report on the District for the City Council’s approval; and WHEREAS, the City Council has called and duly held a property owner protest ballot proceeding for the District in order to present to qualified District property owners the annual levy of assessments and a maximum annual assessment over the next five years for the costs and expenses associated with and authorized for the District, as outlined in the Report; pursuant to the provisions of the Act and California Constitution articles XIII C and XIII D; and WHEREAS, the protest proceeding was conducted with ballots that were presented to qualified District property owners and returned to the city clerk on July 8, 2021. The ballots were weighted according to the proportional financial obligation of the affected property. The counting of the protest ballots that the property owners returned indicated approval of both the assessment and the maximum assessment allowed over the next five years. NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY THE CITY COUNCIL, THE LEGISLATIVE BODY FOR THE DISTRICT, AS FOLLOWS: Section 1. The above recitals are true and correct. RESOLUTION NO. 2021-52 2 of 4 Section 2. Renewal of District and Levy of Assessments. The City Council wishes to renew the President’s Plaza III Property and Business Improvement District and to levy annual assessments for a duration of five years, pursuant to the provisions of the Act. Section 3. Declaration on Assessments. The City Council hereby declares that the annual assessments will not exceed the maximum assessment that the property owners approved, pursuant to the Act and to the apportionment method that the Report describes. The annual assessments will commence with the fiscal year beginning July 1, 2021 and ending June 30, 2022, in order to pay for the costs and expenses of operating, maintaining, and servicing District improvements. Section 4. Fair Public Hearing. Following notice duly given, the City Council has held a full and fair intent meeting and a public hearing in connection with the levy and collection of assessments and has considered all oral and written statements, protests, and communications that interested persons have made or filed. The city clerk, or his or her assigned representative, has counted the ballots and determined that the property owners have approved the annual levy and collection of assessments and a maximum assessment over the next five years, as outlined in the Report and in accordance with California Constitution articles XIII C and XIII D. Section 5. City Council Findings. Based upon its review of the Report, copies of which have been presented to the City Council and filed with the city clerk, the City Council hereby finds and determines that: A. The land within the District will receive special benefits from the operation, maintenance, and servicing of the improvements and appurtenant facilities that are located within District boundaries. B. The District includes all of the lands so benefited. C. The District term is five years, beginning in fiscal year 2021/2022 and ending in fiscal year 2025/2026, unless renewed after this time. D. The net amount to be assessed upon the lands within the District, in accordance with the proposed budget for the fiscal year commencing July 1, 2021 and ending June 30, 2022, is apportioned by a formula and by a method that fairly distribute the net amount among all eligible parcels, in proportion to the special benefits that each parcel will receive from the improvements and services. RESOLUTION NO. 2021-52 3 of 4 E. The assessments that are described in the Report are consistent with the assessments that the District property owners have approved. Section 6. Confirmation of Report and Assessments. The Report and the assessments, as presented to the City Council and as on file in the Office of the City Clerk, are hereby confirmed as filed. Section 7. Improvements Ordered. The City Council hereby orders the proposed improvements to be made, and the levy and collection of annual assessments to pay for those improvements, to be presented to the County Auditor/ Controller of Riverside County (hereafter referred to as the “County”), commencing with fiscal year 2021/2022. The county auditor/controller will enter on the County Assessment Roll, opposite each parcel of land, the amount of levy. The levy will be collected at the same time and in the same manner as the County taxes are collected. After the County collects the levy, the net amount of the levy will be paid to the Treasurer of the City of Palm Desert. Section 8. Restricted Use of Assessment Money. The city treasurer will deposit all money representing assessments that the County has collected for the District, into a District fund. This money will be expended only for the improvements that the Report describes. Section 9. Adoption of District Levy. The adoption of this resolution constitutes the District levy for the fiscal year commencing July 1, 2021 and ending June 30, 2022. Section 10. Direction to City Clerk. The city clerk, or his or her assigned representative, is hereby authorized and directed to file the levy with the county auditor/ controller upon adoption of this resolution. RESOLUTION NO. 2021-52 4 of 4 PASSED, APPROVED, AND ADOPTED at a regular meeting of the Palm Desert City Council, held on this 8th day of July 2021, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ________________________________ KATHLEEN KELLY, MAYOR ATTEST: _____________________________________ M. GLORIA SANCHEZ, ACTING CITY CLERK CITY OF PALM DESERT, CALIFORNIA City of Palm Desert President’s Plaza III Property and Business Improvement District MANAGEMENT DISTRICT PLAN AND ENGINEER’S REPORT FISCAL YEAR 2021/2022 TO 2025/2026 INTENT MEETING: MAY 13, 2021 PUBLIC HEARING: JULY 8, 2021 27368 Via Industria Suite 200 Temecula, CA 92590 T 951.587.3500 | 800.755.6864 F 951.587.3510 ***.willdan.com E VICINEEK�2 ISEbOfSl `dEEIDV/WICINEEK�2 ISEb411 p�vuv� �n �uy ��a�uvea �WULVAtlWb41�M yUl� rj1lElUbCE �V�e�u�:� b�saiqsu�, bI9S9 III b�saiqsu�, C!� o� b9�w ps2st.� C!� o�. b91� bavuv� �n auy �iie�uvee �WIJLV/�b1lJbIJ��A 7U1� �j11E14JbGG �V�e�� - b�s2igsu� hlsS_s_ Jll - b�s2igsu� C!f� ol bs�u� ps2s� C!� ol bglu . . ,. �.... .� ....,. .... ............ .... w. ., . ,..........� ...... ......... .....,. , ....... .... 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FL4' s �- �r„�r �k C 8J 888 � L/'/ (�II\1/ b u /_ .. _ ..... ... \ \� _ d1��t��\��i,. �� 2021/2022 President’s Plaza III Property and Business Improvement District Page 1 TABLE OF CONTENTS OVERVIEW .............................................................................................................. 2 Introduction 2 District Renewal Process 3 DESCRIPTION OF THE DISTRICT ................................................................................ 4 District Boundary 4 Improvements and Activities 4 Special Benefits of the Improvements and Activities 5 METHOD OF APPORTIONMENT .................................................................................. 7 Method of Apportionment Rationale 7 Parking Lot Improvements and Services 7 Method of Apportionment Calculations 7 Apportionment of Direct Costs 7 Apportionment of Indirect (Administration/Reserve) Costs 8 Total Annual Assessment 9 Annual Budget Adjustments 9 DESCRIPTION OF BUDGET ITEMS (TABLE 4) ............................................................ 10 Direct Benefit Costs 10 Indirect Benefit Costs (Administration/Reserves) 10 Levy Breakdown 11 District Statistics 11 District Budget 12 APPENDIX A —ASSESSMENT DIAGRAM ................................................................... 14 APPENDIX B —ASSESSMENT ROLL ......................................................................... 16 2021/2022 President’s Plaza III Property and Business Improvement District Page 2 Overview Introduction The City of Palm Desert (“City”) formed and established the President’s Plaza III Property and Business Improvement Assessment District (“District”) beginning in Fiscal Year 2001/2002 to provide improvements and activities that confer special benefits upon real property within the boundaries of the District. The District was established and levied pursuant to Property and Business Improvement District Law of 1994, Part 7 of Division 18 of the California Streets and Highways Code (“Act”). Pursuant to the Act, property owners within the District submitted a signed petition requesting formation of the District. The District was successfully formed for a term of five years and a maximum assessment was approved by the property owners through an assessment ballot proceeding, conducted according to provisions of the California Constitution Article XIIID (“Proposition 218”). Fiscal Year 2005/2006 was the fifth year of the term of the District. Under the provisions of the Act, the property owners within the District may renew the District for a maximum term of ten (10) years. Pursuant to the Code, and the provision of the California Constitution, the property owners within the District approved the continuation of the District and assessment for an additional five years and on June 14th, 2016 the City authorized the funding for improvements and activities authorized within the District for a period of five years (Fiscal Years 2016/2017 through 2020/2021). It is the City’s desire to renew the District for an additional five-year period starting Fiscal Year 2021/2022 through Fiscal Year 2025/2026. This combined Management District Plan and Engineer’s Report hereinafter referred to as “Plan” or “Report”, is presented for consideration by the property owners within the area known and commonly referred to as President’s Plaza, to seek their support for the organization of a business improvement district in accordance with the provisions of the Property and Business Improvement District Law of 1994, Streets and Highways Code Section 36600 et. seq., hereinafter referred to as the “Act.” This is the Management District Plan required by Section 36622 of the Act, for the proposed renewal of the President’s Plaza III Property and Business Improvement District hereinafter referred to as “District” or “PBID III”, to fund services and activities to improve and convey special benefits to properties located within the boundaries of the District. This Report describes the District, improvements and activities, method of apportionment, the proposed assessments for the current fiscal year, and the maximum assessment proposed for the five-year duration of the renewed District. The proposed assessments are based on the estimated cost to provide the improvements, activities, and operations that provide a direct and special benefit to properties within the District. The costs of improvements, activities, and operations include all expenditures, deficits, surpluses, revenues, and reserves. 2021/2022 President’s Plaza III Property and Business Improvement District Page 3 The word “property,” for the purposes of this Plan, refers to real property situated within the District, and identified as an individual property or parcel assigned its own Assessor’s Parcel Number (APN) by the County of Riverside Assessor’s Office. The County of Riverside Auditor/Controller uses APNs to identify on the tax roll parcels and properties assessed for taxes, special assessments, and fees and charges. District Renewal Process A written petition of the property owners within the District, representing more than 50 percent of the proposed assessment to be levied was submitted to the Palm Desert City Council to initiate renewal proceedings. The City Council initiated proceedings for the renewal of the District by adopting a resolution expressing its intention to renew the District. The resolution of intention referenced the Engineer’s Report and the Management District Plan and noticed the time and place of a public hearing on the renewal of the District and levy of assessments. The City Council is required to hold a public hearing not less than forty-five (45) days after adopting the resolution of intention. Property Owners are sent notice of a public hearing on the matter of the renewal, pursuant to Section 54954.6 of the Government Code. Public notices and assessment ballots (property owner protest ballots) are mailed to each property owner at least 45 days prior to the public hearing pursuant to Article XIIID of the California Constitution. At the public hearing the City Council provides the public and property owners with an opportunity to provide oral protests and written protests prior to the adoption of the Engineer’s Report and the Management District Plan. Pursuant to the California Constitution Article XIIID, the City Clerk or its designated alternate tabulates the property owner assessment ballots received from property owners and determines that majority protest did or did not exist. If the property owners approve the renewal of the District and imposition of the assessments, the City Council can appoint an owner’s association for the District. The owner’s association can make yearly recommendations to the City Council on the expenditures of revenue derived from the levy of assessments and on the classification of properties as applicable. The owner’s association can prepare a report each fiscal year for which assessments are to be levied and collected. Said annual report shall be filed with the City Clerk and shall contain: any proposed changes to the district boundary; the improvements and activities to be provided that year; the estimated costs for that year; the method of assessment; the amount of any surplus or deficit; and contributions from other sources. The City Council may approve the report as submitted or as modified. 2021/2022 President’s Plaza III Property and Business Improvement District Page 4 Description of the District District Boundary The District consists of all parcels located in the commercial business area known as the President’s Plaza III within the City of Palm Desert, County of Riverside. The District includes sixteen (16) assessed commercial parcels. The boundary of the District and the parcels therein are generally located South of Palm Desert Drive at Highway 111; North of El Paseo; West of Sage Lane; and East of Old Highway 74 and includes the Palm Desert Parking Lot – a lease parcel to the City of Palm Desert located South of Highway 111; East of New Highway 74; and West of Old Highway 74. Improvements and Activities In an effort to enhance and improve business opportunities and the appearance of the area known as the President’s Plaza III, the Agency provided funds for the renovation and capital improvement of the parking lot and landscaped areas related to this commercial business center. In conjunction with this renovation, President’s Plaza III Property and Business Improvement District was initially formed in 2001 and every subsequent five-year period after the date of formation to provide and ensure the continued operation and maintenance of the improvements after the renovations had been completed. It has been determined that all the properties within the District receive special and distinct benefits from the improvements and activities to be funded through the assessments. The improvements include the necessary activities, services, operations, administration, and maintenance required to keep the improvements in satisfactory condition including all necessary labor, material, and equipment. The services may include, but are not limited to, regular maintenance, repair, removal or replacement of all or any part of the improvements including removal of trimmings, rubbish, debris and other solid waste; and, providing for the growth, health and beauty of landscaping and lighting including cultivation, trimming, spraying, fertilizing or treating for disease or damage as well as supplying necessary irrigation and electrical energy. The specific improvements and activities include:  Parking lot landscaped areas: including, but not limited to, ground cover, shrubs, trees, plants, irrigation and drainage systems and associated appurtenant facilities;  Parking lot lighting facilities: including, but not limited to, bulbs, fixtures, poles, wiring, and electrical energy; and,  Debris removal: including, but not limited to, regular mechanical sweeping of the parking lot. 2021/2022 President’s Plaza III Property and Business Improvement District Page 5 The costs associated with the improvements are equitably spread among the benefiting parcels within the District utilizing the method of apportionment described in the Method of Apportionment section of this Report. The total funds collected shall be dispersed and used for the services and operations provided to the District. Special Benefits of the Improvements and Activities Assessed properties within the District receive special benefits from one or more of the improvements and activities funded through the District assessments. Specifically, lighting and landscaping amenities within the parking lot, and regular sweeping of the parking lot. The special benefits of lighting (parking lot lights) are the convenience, safety, and security of property, improvements, and goods. Specifically: 1. Enhanced deterrence of crime and the aid to police protection; 2. Increased nighttime safety for patrons and employees; 3. Improved visibility for pedestrians and motorists; 4. Improved ingress and egress to property; 5. Reduced vandalism and other criminal acts and damage to improvements or property; 6. Enhanced aesthetic appeal of the parking area and the properties that are associated with the parking area; 7. Increased promotion of business activities and opportunities during nighttime hours; and, 8. The special enhancement to the value of property, which results from the above benefits. The benefits associated with landscaped islands and medians within the parking lot are specifically: 1. Improved aesthetic appeal of the parking area and nearby parcels; 2. Improved dust control; 3. Enhanced adaptation of the urban environment within the natural environment; 4. Improved traffic circulation; 5. A positive representation of the businesses within the District; 6. Centralized locations for refuse collection facilities; and, 2021/2022 President’s Plaza III Property and Business Improvement District Page 6 7. The special enhancement to the value of property, which results from the above benefits. Parking lot sweeping is an essential and necessary activity for all properties— particularly commercial properties. This improvement is funded through the assessments solely for the special benefit of properties within the District. The benefits associated with this service are: 1. Enhanced aesthetic appeal of the parking area and the properties that are associated with the parking area; 2. Improved dust control; 3. The special enhancement to the value of property, which results from the above benefits. The on-going operation and maintenance of the landscaping, lighting and sweeping improvements provide no measurable general benefit to other properties outside the District or to the public at large. Therefore, these improvements and the corresponding assessments have been identified as 100% special benefit to parcels within the District. 2021/2022 President’s Plaza III Property and Business Improvement District Page 7 Method of Apportionment Method of Apportionment Rationale The costs of the District improvements have each been apportioned by a formula and method, which fairly distributes the net amount to be assessed among all assessed parcels in proportion to the estimated special benefits to be received by each parcel from the improvements. Parking Lot Improvements and Services All assessed parcels within the President’s Plaza III PBID have use of, and access to, a centralized parking facility (lot) that provides access, parking, and delivery areas for the businesses and parcels within the District. Because the parking area is a centralized facility used and accessed by all properties within the District, each parcel’s benefit is based on the size of such parcel. Therefore, it has been determined that a fair and reasonable reflection of each parcel’s benefit for the parking lot improvements shall be based on the approximate size, in square feet, of each parcel. Method of Apportionment Calculations The Total Direct Costs of the parking lot improvements and services are apportioned to each parcel within the District based on each parcel’s lot size in square feet. In addition to a parcel’s Total Direct Cost, each parcel is assessed for District administration expenses and a reserve fund collection (Indirect Costs). The Indirect Costs for each parcel have been apportioned in the same manner as Total Direct Costs. Therefore, each parcel’s Total Annual Assessment is the sum of its proportionate share of the Total Direct Costs and Total Indirect Costs. Apportionment of Direct Costs The Total Direct Costs estimated for parking lot improvements and services (maintenance) are based on the estimated annual costs to maintain the landscaping, lighting, and mechanical sweeping of the parking lot within President’s Plaza III. The Total Direct Costs are divided by the sum of the square footage of all parcels within the District in order to establish a rate per parcel square foot. This rate multiplied by each parcel’s square footage equals the parcel’s proportionate share of the parking lot maintenance costs (rounded to the nearest even penny). The rate provided in Table 1 is for Fiscal Year 2021/2022 only. Please refer to the District Budget (Table 4) for future assessment rates. Total Direct Cost / Total Square Footage = Rate per Square Foot Rate x Parcel Square Footage = Direct Cost Assessment Component 2021/2022 President’s Plaza III Property and Business Improvement District Page 8 Table 1: Direct Cost Proposed Assessment and Rate Proposed Direct Costs for FY 2021-2022 Proposed Rate (per Square Foot) for FY 2021-2022 Fifth Fiscal Year Maximum $31,783 $0.0700 Apportionment of Indirect (Administration/Reserve) Costs To ensure the improvements, activities, and services provided and funded through the District are continued, each parcel will be assessed for administrative and reserve costs (Indirect Costs). These Indirect Costs include all expenses related to the administration of the District as well as the collection of money towards a Reserve Fund. The Reserve Fund Collection is proposed to be slightly under twenty-three percent (22.65%) of the annual Total Direct Costs of the District. Similar to the method of apportionment for Total Direct Costs, the District’s indirect costs are apportioned to each parcel based on each parcel’s lot size in square feet. The rate provided in Table 2 is for Fiscal Year 2021/2022 only. Please refer to the District Budget (Table 4) for future assessment rates. Total Indirect Cost / Total Square Footage = Rate per Square Foot Rate x Parcel Square Footage = Indirect Cost Assessment Component Table 2: Indirect Cost Proposed Assessment and Rate Proposed Indirect Costs for FY 2021-2022 Proposed Rate (per Square Foot) for FY 2021-2022 Fifth Fiscal Year Maximum $15,091 $0.0332 2021/2022 President’s Plaza III Property and Business Improvement District Page 9 Total Annual Assessment Each parcel’s Total Annual Assessment is the sum of their proportionate share of the Direct Costs and Indirect Costs. The preceding description of the method of apportionment outlines the estimated cost and rates applied for the District in Fiscal Year 2021/2022. The rate provided in Table 3 is for Fiscal Year 2021/2022 only. Please refer to the District Budget (Table 4) for future assessment rates. Direct Cost Rate + Indirect Cost Rate = Total Rate per Square Foot Total Rate x Parcel Square Footage = Total Parcel Assessment Table 3: Total Cost Proposed Assessment and Rate Fifth Fiscal Year Proposed Direct Costs for FY 2021-2022 Proposed Rate (per Square Foot) for FY 2021-2022 Direct Costs Maximum $31,783 $0.0700 Indirect Costs $15,091 $0.0332 Total Costs Maximum $46,874 $0.1032 Annual Budget Adjustments For the five years of the term of the PBID III renewal, annual assessments may be adjusted by the President’s Plaza III PBID owners’ association up to three percent (3%) per year. Actual annual adjustments may range from zero percent (0%) to three percent (3%). Adjustments may differ from year to year depending on the service needs identified by the owners’ association. In any event, assessments will not exceed the levels illustrated by the District Budget (Table 4). Any annual budget surplus or deficit will be accrued into the following year’s PBID budget. Assessments will be set accordingly, within the constraints of the annual adjustment, to adjust for surpluses or deficits that are carried forward. 2021/2022 President’s Plaza III Property and Business Improvement District Page 10 Description of Budget Items (Table 4) Direct Benefit Costs Sweeping Services: Weekly cleaning of the parking lot and gutters using a contracted, mechanized service. Landscape Contract Maintenance: Includes all regularly scheduled labor, material (e.g. pipe, fertilizer, insecticides), and equipment required to properly maintain and ensure the satisfactory condition of all landscaping, irrigation and drainage systems, and appurtenant facilities. All landscaping improvements within the District are contracted for maintenance and service on a regular basis. The frequency and specific maintenance and operations required within the District will be determined by City staff. Lighting Repair and Maintenance: This item includes repairs that are not normally included in the yearly maintenance contract costs. This may include repair of damaged amenities due to vandalism and storms, as well as planned upgrades, which could include replacing lighting materials or renovation of lighting systems. Landscape Repair and Maintenance: This item includes repairs that are not normally included in the yearly maintenance contract costs. This may include repair of damaged amenities due to vandalism and storms, as well as planned upgrades, which could include replacing plant materials or renovation of irrigation systems. Landscape Utilities -Water: Utility cost to furnish water for required landscape irrigation. Street Lighting Utilities - Electric: The furnishing of electricity required for the operation and maintenance of the lighting facilities. The City contracts for the furnishing of its electricity for street lighting, which includes normal maintenance and bulb replacement. This cost does not include repairs or replacement of damaged facilities due to vandalism, accidents or storms. Landscape Utilities - Electric: Utility cost for furnishing of electricity required for the operation of the irrigation systems and landscape maintenance. Indirect Benefit Costs (Administration/Reserves) District Administration: The cost to all departments and staff of the City, for providing the coordination of District services, operations and maintenance of the District, response to public concerns and education, and procedures associated with the levy and collection of assessments. This cost also includes contracting with professionals to provide additional administrative, legal, or engineering services specific to the District. 2021/2022 President’s Plaza III Property and Business Improvement District Page 11 County Administration Fee: This is the actual cost to the District for the County to collect District assessments on the property tax bills. This charge is based on a flat rate per fund number. County Per Parcel Fee: This is the cost to the District for the County to collect assessments on the property tax bills. This charge is on a per assessment basis, at $0.45 per assessment, and is in addition to the County Administration Fee. Operating Reserve Fund Collection: The Operating Reserve Fund provides for collection of funds to operate the District, for each fiscal year, from the time period of July 1 through January when the County provides the City with the first installment of assessments collected from the property tax bills. The Operating Reserve Fund eliminates the need for the City to transfer funds from non-District accounts to pay for District charges during the first half of each fiscal year. The Operating Reserve Fund may also be used to offset any unforeseen costs such as repairs, legal fees, revenue deficits, or increased costs due to inflation or contractual agreements that are greater than originally planned. The Operating Reserve Fund Collection amount is slightly more than three percent (3.15%) of the annual Total Direct Costs of the District in Fiscal Year 2021/2022. Parking Lot Maintenance Fund Collection: The Parking Lot Maintenance Fund provides funds for the sealing and re-striping of the parking lot after the fourth year of the renewal term of the District. The parking lot’s total surface area is approximately 184,000 square feet. During December 2005, the District’s cost of sealing and re-striping the parking lot was $27,200 (15.5 cents per square foot multiplied by 175,520 square feet of surface area) and the cost of repairs within the parking lot was $24,300 (for 8,500 square feet of surface area); for a total cost of $51,500. The cost of sealing and re-striping the parking lot’s total surface area of 184,000 square feet would have been approximately $28,520 (15.5 cents per square foot multiplied by 184,000 square feet of surface area). Insurance: This line item supports insurance costs for the operation of the District. Levy Breakdown Total District Costs: This is the sum total of all budgeted Direct and Indirect costs. District Statistics Total Parcels: The total number of parcels within the District. Total Parcels to Levy: The total number of parcels within the District that will be assessed. Non-assessed lots or parcels include easements, common areas, and parcels within the boundaries of the District that currently do not benefit from the improvements and which are not included in the Total Parcels to Levy. Total Parcels Square Footage: This is the sum total of the assessed parcels’ square footage applied to each assessed parcel within the District. 2021/2022 President’s Plaza III Property and Business Improvement District Page 12 Levy Rate per Direct Costs per Square Foot: This amount represents the Rate for Direct Costs being applied to each assessed parcel’s individual lot square footage. The Levy Rate per Direct Costs is the result of dividing the estimated Total Direct Costs for that year by the sum of the District’s Total Parcels Square Footage. The rate is calculated to four decimal places. Levy Rate per Indirect Costs per Square Foot: This amount represents the Rate for Indirect Costs being applied to each assessed parcel’s individual lot square footage. The Levy Rate per Indirect Costs is the result of dividing the estimated Total Indirect Costs for that year by the sum of the District’s Total Parcels Square Footage. The rate is calculated to four decimal places. Total Levy Rate per Square Foot: This amount represents the Rate being applied to each assessed parcel’s individual lot square footage. The Levy Rate per Square Foot is the result of dividing the estimated Total District Costs for that year by the sum of the District’s Total Parcel Square Footage. The rate is calculated to four decimal places. District Budget The District Budget shown on the following table (Table 4), lists the estimated costs of providing the various improvements and services within the District. The costs and the resulting rates for Fiscal Year 2021/2022 through Fiscal Year 2025/2026 are based on the estimated costs to provide the improvements and services for each year. Direct Costs, District and County Administration Costs, and Insurance Costs are adjusted for the three percent (3%) inflation factor. The owners’ association, appointed by the City Council, will annually review the District Costs and make recommendations for any changes or adjustments to the budget. Changes to the budget could result in changes to the annual assessment, but the resulting total assessment may not exceed the maximum rates established in this Report without first obtaining property owner approval through assessment ballots. 2021/2022 President’s Plaza III Property and Business Improvement District Page 13 2021/2022 President’s Plaza III Property and Business Improvement District Page 14 Appendix A —Assessment Diagram The Assessment Diagram for the District is on the following page and is inclusive of all parcels identified on the County of Riverside Assessor’s Parcel Maps as Book 627, Page 192. The Assessment Diagram will be kept on file with the City Clerk of the City of Palm Desert. 2021/2022 President’s Plaza III Property and Business Improvement District Page 15 PALM DESERT DR N OCOTILLO DRTU M BLEW EED LN TUMBLEW EE D L N TUMBLEWEED LNSAN CLEMENTE C I R SAN GORGONIO WAY PALM DESERT DR S SA N ANT ONIOCIRALLEY SANANTONIOC IR EL P A S E O EL PA SEO SA N CLEM ENTECIRALLEYOCOTILLODRPALM DESERT DR SSAGE LNSA N GO RGO N I O W A Y SA N CLEMENTECIRSAGELNSA N ANTONIO CIR ALLEY EL PA SEOSANANT O NIO CI R S H A D O W M O U N TA I N D RSAN MARCOSAVEMONTEREYAVESANCLEMENTE CI R HWY74H WY74HWY 111 HWY 111 President Plaza 3 Assessment District I 2021 2021/2022 President’s Plaza III Property and Business Improvement District Page 16 Appendix B —Assessment Roll Parcel identification, for each lot or parcel within the District, shall be the parcel as shown on the County Assessor’s Map for the year in which this Report is prepared. The Assessment Roll, which includes a listing of parcels assessed within this District, along with their assessment amounts, is shown in Table 5.