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000 2022-0224 Agenda Packet (web w pg) (59.5 MB)
CITY OF PALM DESERT REVISED REGULAR PALM DESERT CITY COUNCIL (CC), SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY (SA), AND HOUSING AUTHORITY (HA) MEETING (VIRTUAL MEETING) THURSDAY, FEBUARY 24, 2022 3:30 p.m. Study Session 4:00 p.m. Regular Session Note: Pursuant to Assembly Bill 361, this meeting may be conducted by teleconference and there will be no in-person public access to the meeting location. City Council Meetings are live-streamed. You can access and view the meetings through the City’s website at https://www.cityofpalmdesert.org and click on “Council Agenda” at the top of the page. Options for participating in the meeting: To participate by email, internet or telephone, see detailed instructions on the last page. AGENDA – Revised FEBRUARY 24, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Agenda Page 2 CLOSED SESSION Due to a lack of agenda items, the closed session meeting will not take place. CONVENE THE CITY COUNCIL, SUCCESSOR AGENCY, AND HOUSING AUTHORITY MEETING – 4:00 P.M. a) Roll Call b) Pledge of Allegiance to the Flag – Councilmember Kathleen Kelly c) Inspiration/Invocation – Mayor Jan C. Harnik AWARDS, PRESENTATIONS, AND APPOINTMENTS CITY MANAGER COMMENTS MAYOR/COUNCILMEMBER REPORTS AND REQUESTS FOR ACTION NON AGENDA PUBLIC COMMENTS This is an opportunity for the public to speak on issues that are not on the agenda for a maximum of three minutes. Speakers may utilize one of the three options listed on the back page of this agenda. Because the Brown Act does not allow the City Council, Successor Agency, and Housing Authority Boards to take action on items not on the Agenda, members may briefly respond or instead refer the matter to staff for report and recommendation at a future City Council, Successor Agency, or Housing Authority Meeting. CONSENT CALENDAR All matters listed on the Consent Calendar are considered to be routine and may be approved by one (1) Minute Motion. 1. MINUTES of the regular City Council, Successor Agency, and Housing Authority Meeting of January 27, 2022 (CC) (SA) (HA) ............................................................ Page 9 Rec.: Approve as presented. 2. RECEIVE CLAIMS AND DEMANDS WARRANTS: City: 1/28/2022, 1/31/2022, and 2/4/2022 (CC); and Successor Agency: 1/31/2022 and 2/4/2022 (SA) ...... Page 19 Rec.: Receive and file. AGENDA – Revised FEBRUARY 24, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Agenda Page 3 3. RECEIVE AND FILE applications for an Alcoholic Beverage License for: (CC) ..... ................................................................................................................... Page 39 a. Breakfast Republic & Eggies – 44491 Town Center Way, Suite A b. Shadow Mountain – 73800 Ironwood Street Rec.: Receive and file. 4. RESOLUTION of the Board of the Successor Agency to the Palm Desert Redevelopment Agency Finding that Real Property Identified as the approximate +/-93 acres from APN 694-310-002, 694-310-003, and a portion of 694-310-006 are Not Subject to Requirements of the Surplus Land Act. (SA) ............................................. Page 47 Rec.: That the Successor Agency Board: 1. Waive further reading and adopt Successor Agency Resolution finding that the real property owned by the Successor Agency to the Palm Desert Redevelopment Agency (“SARDA”) located on the south side of Gerald Ford Drive, east of the Palm Desert Sheriff Station, identified as the approximate +/- 93 acres from APN 694-310-002, 694-310-003, and a portion 694-310-006 are not subject to requirements of the Surplus Land Act (SLA); 2. Authorize staff to submit a copy of this resolution to the California Department of Housing and Community Development (“HCD”); and 3. Authorize the Executive Director, its designee, and staff in consultation with SARDA legal counsel to take any other actions they deem appropriate or necessary and are consistent to effectuate the purpose of the proposed resolution. 5. RESOLUTION to authorize the destruction of paper records that have been digitally imaged from the Development Services Department (Planning/Land Development Division) to rely on the electronic record as the official record (CC) .......... Page 65 Rec.: Waive further reading and adopt. 6. RESOLUTION to adopt goals and priorities for 2022 calendar year (CC) . Page 71 Rec.: Approve a resolution adopting the City Council’s goals and priorities for the 2022 calendar year. 7. RESOLUTION to oppose Initiative 21-0042A1 (CC) .................................. Page 77 Rec.: Approve a resolution opposing Initiative 21-0042A1. 8. RESOLUTION to support net energy metering (CC) ............................... Page 105 Rec.: Approve resolution in support of net energy metering. AGENDA – Revised FEBRUARY 24, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Agenda Page 4 9. APPROVE Amendment No. 1 to the City Manager’s Employment Agreement effective March 1, 2022 (Contract No. C41110) (CC) ............................................ Page 111 Rec.: By Minute Motion, Approve Amendment No. 1 to the City Manager’s Employment Agreement with L. Todd Hileman (Exhibit A) effective March 1, 2022. 10. APPROVE out-of-state travel for Special Programs Manager and Public Art Management Analyst to attend the 2022 Americans for the Arts Annual Conference from May 18-20, 2022 in Washington D.C. (CC) ................................................................... Page 115 Rec.: By Minute Motion, authorize out-of-state travel for Special Programs Manager and Public Art Management Analyst to attend the 2022 Americans for the Arts Annual Conference from May 18-20, 2022 in Washington D.C. 11. APPROVE out-of-state travel for Permit Center Supervisor to attend the 2022 Central Square Permit Software Conference March 26-30, 2022 in Orlando, Florida (CC) ................................................................................................................. Page 119 Rec.: By Minute Motion, authorize the out-of-state travel for the Permit Center Supervisor to attend the 2022 Central Square Permit Software Conference March 26-30, 2022 in Orlando, Florida 12. APPROVE reimbursement to La Quinta Brewing Company for its public art fee in the amount of $6,200 for Hazy Palms by Artist John Cuevas (CC) ............... Page 121 Rec.: By Minute Motion: 1. Authorize reimbursement to La Quinta Brewing Company of its public art fee in the amount of $6,200 for Hazy Palms by John Cuevas; and 2. Authorize the Mayor to execute the Public Art Agreement. 13. RECEIVE AND FILE the City of Palm Desert audited financial report for the fiscal year ended June 30, 2021 (CC) ....................................................................... Page 139 Rec.: Receive and file. 14. RECEIVE AND FILE the Independent Accountants’ Report on Agreed-Upon Procedures Performed on the Measure A Transportation Fund for the fiscal year ended June 30, 2021 (CC) ......................................................................................................... Page 381 Rec.: Receive and file. 15. RECEIVE AND FILE the Palm Desert Recreational Facilities Corporation audited financial reports for the fiscal year ended June 30, 2021 (CC) .............................. Page 393 Rec.: Receive and file. CONSENT ITEMS HELD OVER AGENDA – Revised FEBRUARY 24, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Agenda Page 5 ACTION CALENDAR 16. ORDINANCE and RESOLUTION adopting a Mitigated Negative Declaration in accordance with the California Environmental Quality Act (CEQA), and approval of a Change of Zone to establish a higher residential density (eight (8) units per acre), Tentative Parcel Map 38033, and a Precise Plan to construct 32 single-story condominium units, clubhouse, and pool/spa on 3.91 acres at the southwest corner of Gerald Ford Drive and Shepherd Lane (CC) ........................................... Page 421 Rec.: Waive further reading and adopt the following: 1. Pass to second reading an Ordinance approving Change of Zone 21-0001 to establish a higher residential density from five (5) units per acre to eight (8) units per acre and adoption of a Mitigated Negative Declaration in accordance with CEQA; and 2. Adoption of Resolution approving a Tentative Parcel Map 38033, and Precise Plan 21-0008 to construct a 32 single-story unit condominium project, clubhouse, and pool/spa on 3.91 acres at the southwest corner of Gerald Ford Drive and Shepherd Lane. 17. ORDINANCE amending Palm Desert Municipal Code Section 2.34.010, to base commissioner and committee member attendance upon the fiscal year (CC) ........ ................................................................................................................. Page 655 Rec.: Waive further reading and pass to second reading an Ordinance amending Palm Desert Municipal Code Section 2.34.010 to base commissioner and committee member attendance upon the fiscal year. 18. CONSIDERATION of an appeal to reaffirm City staffs’ decision to deny the issuance of ten Short-Term Rental (STR) permits related to the Planned Residential zoning district that do not comply with Palm Desert Municipal Code Chapter 5.10 Short-Term Rentals Section 5.10.070 because the ten properties do not exist within an Homeowners’ Association (HOA) as envisioned by that Chapter (CC) ............................................................ Page 659 Rec.: By Minute Motion: 1. Deny the applicants’ appeal for the reasons outlined in this report, thereby reaffirming City staffs’ decision to deny the issuance of ten STR permits that do not comply with Palm Desert Municipal Code (PDMC) Section 5.10.070 since they do not exist within an HOA as contemplated by that Section; and 2. Direct the STR Subcommittee to guide the drafting of a formal definition for an HOA, and initiate a Zoning Ordinance Amendment (ZOA) to Chapter 5.10, and present the ZOA to the City Council at a date uncertain. AGENDA – Revised FEBRUARY 24, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Agenda Page 6 19. REQUEST FOR DIRECTION regarding recommendations contained in the 2021 Broker’s Report (CC) ............................................................................................. Page 767 Rec.: By Minute Motion: 1. Receive and file the 2021 Business Report; and 2. Provide City staff direction to initiate a Zoning Ordinance Amendment (ZOA) to execute the recommendations contained in the 2021 Commercial Broker’s Report to add new land use categories, remove certain land-uses from requiring a Conditional Use Permit, and to add new land use definitions to the Zoning Ordinance. 20. AUTHORIZE the advertisement of a Request for Proposal (RFP) for Automatic License Plate Recognition (ALPR) technology at selected intersections (CC) ......... Page 781 Rec.: By Minute Motion: 1. Authorize the advertisement of a Request for Proposal (RFP) for Automatic License Plate Recognition (ALPR) technology at selected intersections and the formation of a selection committee consisting of member(s) of the Public Safety Commission, City Council, and staff; and 2. Appoint one or more members of City Council to participate on the selection committee. 21. Approval of a Second Amendment to the Agreement for Law Enforcement Services between the City of Palm Desert and the County of Riverside (Contract No. C38780) (CC) ..................................................................................................................... Page 815 Rec.: By Minute Motion, approve a second amendment to the agreement for law enforcement services between the City of Palm Desert and the County of Riverside (Contract No. C38780). PUBLIC HEARING 22. REDRAWING of Council member district boundaries (CC) ..................... Page 879 Rec.: By Minute Motion: 1. Receive a report from staff and the City’s redistricting consultant on the redistricting process and permissible criteria to be considered to redraw district boundaries; and 2. Conduct a public hearing to receive public input on district boundaries. 23. ORDINANCE to approve the Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.060 regarding time-share projects (CC) ..... Page 903 Rec.: Open public hearing and continue item for consideration at the next regular meeting of March 24, 2022. AGENDA – Revised FEBRUARY 24, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Agenda Page 7 24. RESOLUTION to approve an addendum to the Mitigated Negative Declaration and amendment to Tentative Parcel Map 37157 for Monterey Crossing, an 18-acre mixed use commercial development located at the northeast corner of Monterey Avenue and Dinah Shore Drive (CC) ...................................................................................... Page 905 Rec.: Waive further reading and adopt a resolution approving the addendum to a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program and an amendment to Tentative Parcel Map 37157. ADJOURNMENT AGENDA – Revised FEBRUARY 24, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Agenda Page 8 THREE OPTIONS FOR PARTICIPATING IN THE MEETING Option 1 - To Participate by E-mail: 1. Send your comments by email to: CouncilMeetingComments@cityofpalmdesert.org E-mails received by 12:00 noon prior to the start of the meeting will be made part of the record and distributed to the City Council. Emails will not be read aloud. Option 2 - To Participate and Provide Verbal Comments by Using Your Internet: 1. Access via https://www.cityofpalmdesert.org/zoom and click “Launch Meeting” or 2. Access www.zoom.us, click “Join Meeting” and enter Webinar ID 833 6744 9572 Option 3 - To Listen and Provide Verbal Comments Using Your Telephone: 1. Dial (669) 900-9128 or (213) 338-8477 or (669) 219-2599 or (971) 247-1195. 2. Enter the Meeting ID: 833 6744 9572 followed by #. 3. Indicate that you are a participant by pressing # to continue. 4. You will hear audio of the meeting in progress. Remain on the line if the meeting has not yet started. 5. During the meeting, Press *9 to add yourself to the queue and wait for City Clerk staff to announce your name/phone number. The City Clerk will unmute your line when it is your turn to speak. Limit your comments to three (3) minutes. Staff reports for all agenda items considered in open session, and documents provided to a majority of the legislative bodies regarding any item on this agenda, are available for public inspection at City Hall and on the City’s website at https://www.cityofpalmdesert.org by clicking “Council Agenda” at the top of the page. Declaration of Posting: I, Níamh M. Ortega, Deputy City Clerk of the City of Palm Desert, do hereby certify, under penalty of perjury under the laws of the State of California, that the foregoing revised agenda for the Palm Desert City Council, Successor Agency for the Palm Desert Redevelopment Agency, and Housing Authority, was posted on the City Hall bulletin board no less than 72 hours prior to the meeting. Dated this 18th day of February, 2022. Note: This agenda is subject to amendment up to 72 hours in advance of the meeting. Níamh M. Ortega _ Niamh M. Ortega, Deputy City Clerk CITY OF PALM DESERT REGULAR PALM DESERT CITY COUNCIL (CC), SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY (SA), AND HOUSING AUTHORITY (HA) MEETING (VIRTUAL MEETING) DRAFT MINUTES Thursday, January 27, 2022 CALL TO ORDER – 3:00 P.M. Deputy City Clerk Níamh Ortega announced that closed session would not occur as scheduled, and the Council would convene at 4:00 p.m. There were no members of the public in attendance at 3:00 p.m. and there were no requests to speak received for closed session. ROLL CALL Present: Mayor Pro Tem/Vice Chair/Vice Chairman Sabby Jonathan Councilmember/Director/Member Kathleen Kelly Councilmember/Director/Member Gina Nestande Councilmember/Director/Member Karina Quintanilla Mayor/Chair/Chairman Jan C. Harnik Staff Present: Todd Hileman, City Manager/Executive Director Robert W. Hargreaves, City Attorney Andrew Firestine, Assistant City Manager Janet M. Moore, Director of Finance Niamh M. Ortega, Deputy City Clerk M. Gloria Sanchez, Records Coordinator PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY None. Page 9 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 2 ADJOURN TO CLOSED SESSION A. Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1) (Successor Agency) Property: 18.73-acre site, located on Desert Willow Drive, northwest of Market Place (APNs 620-450-012, 013, 014). City Negotiator: Todd Hileman/Martin Alvarez Other Party Negotiator: Family Development Group, Inc. Property Owner: Successor Agency to Palm Desert Redevelopment Agency B. Conference with Legal Counsel regarding significant exposure to litigation pursuant to Government Code Section 54956.9(d)(2): 1) Potential cases: 2 RECONVENE THE CITY COUNCIL, SUCCESSOR AGENCY, AND HOUSING AUTHORITY MEETING – 4:00 P.M. a) Roll Call b) Pledge of Allegiance to the Flag – Mayor Jan C. Harnik c) Inspiration/Invocation – Mayor Pro Tem Sabby Jonathan REPORT ON ACTION FROM CLOSED SESSION Not applicable. AWARDS, PRESENTATIONS, AND APPOINTMENTS None. MAYOR/COUNCILMEMBER REPORTS AND REQUESTS FOR ACTION Councilmember Kelly shared that she and Councilmember Nestande represented Palm Desert at the Cove Community Commission. She explained there were key aspects of government that the City of Palm Desert pursues collaboratively with the City of Rancho Mirage and the City of Indian Wells; those included Public Safety such as Fire Safety, Police, and the Joslyn Senior Center. One topic covered was an initiative for Automated License Plate Readers at intersections in Palm Desert. She expressed the presentation was enlightening as it showed how helpful it had been for the City of Rancho Mirage in tracking stolen vehicles and solving a host of criminal activity. Page 10 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 3 Councilmember Kelly sought confirmation from City Manager Todd Hileman that this topic would be presented to the Public Safety Commission which he confirmed. Councilmember Quintanilla shared her attendance at several meetings including the Cultural Preservation Committee and learned about the Sandpiper development and the historic community in Palm Desert. She also had the opportunity to be on the iHub Advisory with Mayor Harnik and expressed her excitement for future opportunities. Councilmember Quintanilla announced she was selected to be part of the Coachella Valley Water Academy and planned to bring training for water conservation and greener innovations to the City of Palm Desert. Lastly, she asked her fellow Councilmembers to reconsider moving to five districts with a motion rather than elections. Mayor Pro Tem Jonathan thanked Sergeant Wolvridge, Sergeant Koser and Deputy Nelson for taking him on an extensive tour of the dispatch and training center at the Palm Desert Civic Center. He expressed his appreciation to the men and women who provided safety to the community. Mayor Harnik shared her ongoing meetings and encouraged the public to offer their input on Lupine Plaza and “Walk n’ Roll”, a study on how to connect the community safely with bicycles and pedestrians. Mayor Harnik gave an update on housing and shared she has been attending the Southern California Association of Government meetingss and working with representatives, assemblymen, and senators to secure much-needed housing that will also complement the community. Mayor Harnik requested that staff explore the option of creating a new City seal to celebrate the fiftieth anniversary of the incorporation of the City that is relative, relevant, and timely. NON AGENDA PUBLIC COMMENTS Mr. Jared Portolesi spoke regarding a neighboring house under construction and expressed that he was opposed to the two-story construction overlooking his yard. He submitted photos for Council to review and requested the City examine his specific situation regarding zoning guidelines. CONSENT CALENDAR All matters listed on the Consent Calendar are considered to be routine and may be approved by one (1) Minute Motion. 1. MINUTES of the regular City Council, Successor Agency, and Housing Authority Meeting of December 16, 2021 (CC) (SA) (HA) Rec.: Approve as presented. Page 11 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 4 2. APPROVE CLAIMS AND DEMANDS WARRANTS: City: 1/7/2022 (CC); Successor Agency: 1/7/2022 (SA) Rec.: Receive and file. 3. RECEIVE AND FILE applications for an Alcoholic Beverage License for Gastro Grind Burgers – 73850 Highway 111 Ste B & C (CC) Rec.: Receive and file. 4. ORDINANCE NO. 1374: Update Organic Waste Recycling Requirements to the City Municipal Code to Comply with Senate Bill 1383 (2nd reading) (CC) Rec.: Waive further reading and adopt. 5. RESOLUTION NOS. 2022-03 and SARDA 091 to authorize new account signers for the Riverside County Treasurer’s Pooled Investment Fund (CC) (SA) Rec.: Waive further reading and adopt. 6. RESOLUTION NO. 2022-04 to approve Civic Engagement Committee bylaws (CC) Rec.: Waive further reading and adopt. 7. RESOLUTION NO. 2022-05 to authorize the destruction of paper records that have been digitally imaged from the Development Services Department (Planning/Land Development Division) to rely on the electronic record as the official record. (CC) Rec.: Waive further reading and adopt. 8. REQUEST TO APPROVE a contract with Romo Studios, LLC, in the amount of $188,390 for replacement of the bronze boy of For Our Freedom located at Freedom Park (Contract No. C42680) (CC) Rec.: By Minute Motion: 1. Approve Contract with Romo Studios, LLC, in the amount of $188,390 for replacement of the bronze boy of For Our Freedom located at Freedom Park; and 2. Authorize the Mayor to execute said Contract and allow the City Attorney to make non-substantive changes. Page 12 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 5 9. REQUEST TO APPROVE a contract between the City of Palm Desert and FG Creative, to provide advertising services for the El Paseo Parking & Business Improvement District, Merchant Outreach and advertising services for the Palm Desert Aquatic Center, to recognize the reassignment of work due to the separation of FG Creative from CV Strategies (Contract No. C42690) (CC) Rec.: By Minute Motion: 1. Approve Contract with FG Creative, Inc. to provide advertising services and Merchant Outreach services for the El Paseo Parking & Business Improvement District (EPPBID), and advertising services for the Palm Desert Aquatic Center (PDAC); 2. Authorize the City Attorney to make non-substantive changes to the contract and the Mayor to execute the agreement on behalf of the City; and 3. Terminate contracts No. C37060, A39220 and A42650. 10. REQUEST TO APPROVE the 2022 Palm Desert Half Marathon and 5K Event (CC) Rec.: By Minute Motion: 1. Approve the 2022 Palm Desert Half Marathon and 5K scheduled for Sunday, February 13, 2022; 2. Approve the proposed event route and road closures; 3. Temporarily waive the Palm Desert Municipal Code (PDMC) Section 11.01.140 (Amplified Sound); 4. Temporarily waive the Palm Desert Municipal Code (PDMC) Section 11.01.080 W (Possession/Consumption of Alcohol in City Parks) pursuant to PDMC 9.58.040; and 5. Temporarily waive the Palm Desert Municipal Code (PDMC) Section 11.01.080 (Prohibited Conduct Generally in City Parks, Item Q – Vendor Sales. 11. REQUEST TO AUTHORIZE the City Manager to Purchase a Patrol BMW Motorcycle for the Palm Desert Police Department from BMW Motorcycles of Riverside, California pursuant to PDMC Chapter 3.30.160 (E) and (I) (CC) Rec.: By Minute Motion, authorize the City Manager to Purchase a Patrol BMW Motorcycle for the Palm Desert Police Department from BMW Motorcycles of Riverside, California pursuant to PDMC Chapter 3.30.160(E) and (I). 12. RECEIVE AND FILE the annual Low and Moderate Income Housing Asset Fund Report relative to SB 341 Rec.: Receive and file. Page 13 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 6 13. RECEIVE AND FILE the resignation of Susan Myrland from the Cultural Arts Committee. (CC) Rec.: Receive and file with sincere regret. Main Motion: Approve all items on the consent calendar, as presented. Moved by: Kelly/Nestande Vote and Action: 5 Yes/0 No. Motion Carried ACTION CALENDAR 14. RESOLUTION NO.2022-06 to approve signature authority for all California Department of Resources Recycling and Recovery (CalRecycle) grants for which the City of Palm Desert is eligible (CC) Main Motion: Waive further reading and adopt. Moved by: Kelly/Quintanilla Vote and Action: 5 Yes/0 No. Motion Carried 15. REQUEST TO AUTHORIZE the City Manager to negotiate a contract with Kemper Sports for the maintenance and operations of the Desert Willow Golf Resort (Contract No. C42210) (CC) Main Motion: Authorize the City Manager to negotiate a contract with Kemper Sports Management (“Kemper”) for the management and operations of the Desert Willow Golf Resort and return to the City Council for consideration. Moved by: Jonathan/Kelly Vote and Action: 5 Yes/0 No. Motion Carried 16. REQUEST TO APPROVE the creation of an Ad Hoc Subcommittee for the Fourth Fire Station Design/Build (CC) Main Motion: 1. Create an Ad Hoc Sub-Committee for the Fourth Fire Station Design/Build; and 2. Appoint Mayor Harnik and Mayor Pro Tem Jonathan to serve on said committee. Moved by: Nestande/Kelly Vote and Action: 5 Yes/0 No. Motion Carried 17. REQUEST FOR DIRECTION on consideration of future City Council adoption of a resolution calling for a ballot measure on five districts (CC) Mr. Kim Floyd spoke in favor of moving to five districts. Page 14 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 7 Mr. Carlos Garcia spoke in favor of moving to five districts. Mr. Ricardo Loretta expressed interest in learning more about the redistricting process so he could determine if it was a good thing for the City. Ms. Forester spoke in opposition to moving to five districts. Main Motion: Prepare draft resolutions and return to Council for consideration of a possible Council-initiated five district ballot measure for the 2022 ballot. Moved by: Kelly/Quintanilla Vote and Action: 3 Yes/2 No (Jonathan, Nestande). Motion Carried 18. REQUEST FOR DIRECTION regarding Portola Avenue / I-10 Interchange improvements (Project No. 637-02) (C27330A-C) (CC) Main Motion: 1. Direct the City Manager or designee to work with Coachella Valley Association of Governments to return the remaining City bond funds on deposit for the Portola Avenue / I-10 Interchange Improvements project; 2. Direct the City Manager or designee to work with Riverside County Transportation Commission on repurposing the Measure A set aside for the Portola Avenue / I-10 Interchange Improvements project; 3. Direct staff to the City Manager or designee to work with County of Riverside to remove the aesthetic treatments from the design until such time that there is construction funding for the project; and 4. Reaffirm the commitment of the City Council to the Portola/I-10 interchange project and direct staff to continue pursuing funding opportunities for the project. Moved by: Kelly/Nestande Vote and Action: 5 Yes/0 No. Motion Carried PUBLIC HEARING 19. RESOLUTION NO. 2022-07 to approve a Historic District Designation for Sandpiper Condominiums Circle 2 located on El Paseo (CC) Mayor Harnik opened the public hearing and, hearing no comment, continued the item to the February 10, 2022 Council meeting at staff’s request. Main Motion: Continue item to meeting of February 10, 2022. Moved by: Kelly/Quintanilla Vote and Action: 5 Yes/0 No. Motion Carried Page 15 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 8 20. RESOLUTION NO. 2022-08 to approve a Historic District Designation for Sandpiper Condominiums Circle 3 located on El Paseo (CC) Mayor Harnik opened the public hearing and, hearing no comment, continued the item to the February 10, 2022 Council meeting at staff’s request. Main Motion: Open public hearing and continue item to meeting of February 10, 2022. Moved by: Kelly/Quintanilla Vote and Action: 5 Yes/0 No. Motion Carried 21. ORDINANCE NO. 1375: Continued item for consideration of approval to the City Council for Zoning Ordinance Amendment 21-0002 to amend the Palm Desert Municipal Code, Chapter 25, modifying Section 25.60.60 (Public Hearing and Public Notice), adding Section 25.60.160 “Community Engagement,” and Chapter 5, Section 5.11 “Disclosures Upon Transfer of Residential Property” regulating the public engagement process. (Continued from the meeting of January 13, 2022) (1st Reading) (CC) Mayor Harnik opened the public hearing and, hearing no comment, closed the public hearing. Main Motion: Waive further reading and pass to second reading Ordinance approving Zoning Ordinance Amendment 21-0002 to amend the Palm Desert Municipal Code, Chapter 25, modifying Section 25.60.60 (Public Hearing and Public Notice), adding Section 25.60.160 “Community Engagement,” and Chapter 5, Section 5.11 “Disclosures Upon Transfer of Residential Property” regulating the public engagement process. Moved by: Kelly/Nestande Vote and Action: 5 Yes/0 No. Motion Carried 22. PUBLIC HEARING on the Redrawing of Council Member District Boundaries (CC) Mayor Harnik opened the public hearing. Mr. Bruce Poynter spoke in support of the current two district system and stated his position for the record is to say no to five districts. Ms. Linda Salas spoke in favor of five districts and development of five districts. Ms. Joan Speer spoke in favor of five districts and more local representation. Ms. Kelly Lightner also spoke in favor of moving to five districts. Hearing no additional public comment, Mayor Harnik closed the public hearing. Page 16 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 9 Mayor Pro Tem Jonathan noted that there was a separate item on the agenda relative to the ballot initiative for five districts for those who wished to also speak on that item. Main Motion: 1. Receive a report from staff and the City’s redistricting consultant on the redistricting process and permissible criteria to be considered to redraw district boundaries;and 2. Conduct a public hearing to receive public input on district boundaries. Moved by: Nestande/Quintanilla Vote and Action: 5 Yes/0 No. Motion Carried 23. CONSIDERATION of an amendment to the Specific Plan, Precise Plan, Tentative Tract Map, and the Disposition and Development Agreement for DSRT Surf, a resort development inclusive of a 5.5-acre surf lagoon and surf center facility, a four-story 92-room hotel, and 83 residential units on a vacant 17.69-acre site; and an addendum of the Environmental Impact Report for the DSRT SURF project located on the west side of Desert Willow Drive (CC) Main Motion: 1. Waive further reading and adopt City Council Resolution No. 2022-09 approving Case Nos. Amendment No. 1 to SP 18-0002, PP 18-0009, TTM 37639, and an addendum to the EIR for the DSRT SURF Project, subject to the conditions of approval; 2. Approve a Revised and Restated Disposition and Development Agreement (DDA) between the City of Palm Desert and Desert Wave Ventures, LLC; 3. Approve a Transient Occupancy Tax (TOT) Agreement as-to-form with Desert Wave Ventures, LLC, in an amount not to exceed $16.1 million for the operation of a 92-room AAA four-diamond hotel located on Parcel B within the Desert Willow Golf Resort; 4. Authorize the Mayor to execute said Agreements; 5. Authorize the City Manager to make non-substantive changes to the DDA and TOT Agreement as needed prior to execution by the Mayor; 6. Authorize the City Manager to draft, negotiate, and execute other supporting agreements that may be required by the DDA, including an Acquisition Agreement as to form and the attached City Cost Reimbursement Agreement as to form; 7. Authorize the City Manager to execute said agreements; and 8. Appropriate $20 million to Fund 451 for costs associated with the public improvements at identified sites of the Project. These funds are reimbursable from the associated residual bond proceeds and controlled by the attached Acquisition Agreement as-to-form. Moved by: Jonathan/Harnik Vote and Action: 5 Yes/0 No. Motion Carried Page 17 DRAFT MINUTES – FOR DISCUSSION PURPOSES ONLY JANUARY 27, 2022 City Council, Successor Agency to the Palm Desert Redevelopment Agency, and Housing Authority Meeting Draft Minutes Page 10 CITY MANAGER COMMENTS None. ADJOURNMENT With City Council, Successor Agency, and Housing Authority concurrence, Mayor Harnik adjourned the meeting at 7:46 p.m. JAN C. HARNIK MAYOR/CHAIR/CHAIRMAN ATTEST: NÍAMH M. ORTEGA, DEPUTY CITY CLERK AND SECRETARY Palm Desert City Council Successor Agency to the Palm Desert Redevelopment Agency Housing Authority Page 18 Page 19 Page 20 Page 21 Page 22 City of P alm D esert Check Register 2/4/2022 -2/28 /2022 Bank ID Check :\umber Check Date Vendor l\ame Account :\umber Tra nsaction Oesc Invoice Amount Paid 00 01528932 02 /04/2022 ACC URAT E FIRST AID SERVICE S LLC I 104340 4219000 FIRST AID SUPPLIES -CITY HALL C-1405 138.51 00 01528933 02 /04/2022 ALPHA MEDIA LLC I 104417 4322200 Radio ad workshop 604856 -l 800.00 00 01528933 02/04/2022 ALPHA MEDIA LLC 1104417 4322200 Radio ad workshop 604854-1 1,230.00 00 01528934 02/04/2022 ALTEC INDUSTRIES INC !104331 4334000 RIM Veh #72 Owned 50913230 1,157.10 00 01528934 02/04/2022 AL TEC INDUSTRIES INC l 104331 4334000 RIM Veh #556 owned 50916037 1,234.66 00 01528935 02 /04/2022 AMERICAN FORENSIC NURSES 11042!0 4390400 FY 2!/22 Blood draws/DUI drug 75474 48.!3 00 0 1528935 02 /04/2022 AMERICAN FORENSIC NURSES I 1042!0 4390400 FY 21 /22 Blood draws/DUI drug 75475 61.22 00 0!528935 02/04/2022 AMERICAN FORENSIC NURSES I 1042!0 4390400 FY 2!/22 Blood draws/DUI drug 75476 61.22 00 01528935 02/04/2022 AMERICAN FORENS IC NURSES I 1042!0 4390400 FY 2!/22 Blood draws/DU! drug 75477 244.88 00 01528935 02/04/2022 AMERICAN FORENSIC NURSES I !042!0 4390400 FY 2 I /22 Blood draws/DU! dmg 75478 400.71 00 0 15 28935 02/04/2022 AMERICAN FORE SIC NURSES l !042 10 4390400 FY 2 l /22 Blood draws/DU! drug 75495 61.22 00 01528935 02/04/2022 AMERICAN FORENSIC NURSES 1104210 4390400 FY 21/22 Blood draws/DUI drug 75496 61.22 00 01528936 0 2/04/2022 ANDERSO COMMUNICATION INC I !043!0 4365000 MO THL Y RADIO REPEATER SERVICE 19082 250.00 00 01528936 02 /04/2022 ANDERSON COMMUNICA T!ON INC l 1043!0 4365000 MONTHLY RADIO REPEATER SERVICE !902! 250.00 00 01528937 02 /04/2022 ATLAS AWNING & SCREEN l 100000 3221100 80% REFUND RCVR21 -0074 RCVR21 -0074 211.60 00 0!528938 02 /04/2022 AUTOMATED POWER SPECIALTIES & ELECT104610 433200! IRRIG PUMP-CIVIC CENTER PARK 2462 870 .00 00 01528939 02/04/2022 AVSU INC 1104!30 4312500 AV for workshop INV-9139 831.00 00 0152894! 02/04/2022 BECK OIL INC l 10433! 4217000 SUPPLY OF GAS AND DLES EL FUEL 487236 2,687.30 00 0!528941 02/04/2022 BECK OIL INC l 10433! 4217000 SUPPLY OF GAS AND DlESEL FUEL 489469 5,460.86 00 01528943 02/04/2022 810 TOX LABO RA TORIES I 1042 !0 4390400 FY 21 /22 Blood and urine analy 42168 791.00 00 01528943 02/04 /2022 BIO TOX LABORATORIES I 1042 !0 4390400 FY 2!/22 Blood and urine ana ly 42!69 2,5 11.00 00 01528945 02/04/2022 BOOKER, LA TISHA 1100000 1150100 LODGING ADVANCE -LA TISHA B 1/26/2022 830.55 00 01528945 02/04/2022 BOOKER, LA TISHA 1100000 1150100 PARKING ADVANCE 1/26/2022 72 .00 00 01528945 02/04/2022 BOOKER, LA TISHA I !00000 1150100 M!LAGE ADVANCE-LA TISHA B 1/26/2022 115 .7 1 00 01528945 02/04/2022 BOOKER, LA TISHA I 100000 1150100 PER DIEM ADV A CE-LA TISHA B 1/26/2022 407 .00 00 01528948 02/04/2022 CDW LLC 1104190 4212000 Tech Eq uipment R026260 36 .13 00 0 15 28948 02/04/2022 CDW LLC 1104190 4404000 Tech Equipment R02 8123 1,249.99 Report Date 02/28/2022 Page Page 23 City of P alm D ese rt Check Register 2/4/2022 -2/28/2022 Bank ID Check .'\umber Check Date Vendor l\ame Account .'\umber Transaction Desc Invoice Amount Paid 00 015 2894 8 02/04/2022 CDW LLC 11 04 190 44 04 000 Tech Eq uipment Q746588 1,030 .6 7 00 0152 894 8 02/04/202 2 CDW LLC 1104190 4404000 Tech Equipment Q573190 1,342.74 00 0152 8948 02/04/2022 CDWLLC 1104190 4336000 CLO STRG SVCS A WS ZR0022!389 35 7.32 00 0152894 8 02/04/2022 CDWLLC 1104190 4404000 Additional computer purchases Q862208 2,049 .32 00 01528950 02/04/2022 COACHELLA VALLEY WATER DIST. I 104614 4351000 74735 Hovley Lane E -Soccer P 127363385426JN22 86.75 00 01528951 02/04/2022 CONSTRUCTION EXAM CENTER 1104420 4312000 CONSTRUCTION EXAM CENTER 11/19 /2021 895.00 00 01528953 02 /04/2022 COSTAR REAL TY INFORMATION INC 1100000 1430100 Prepaid Accounts Payable 114866125-1 3,20 5.22 00 0152 8953 02/04/2022 COSTAR REALTY INFORMATION I C 1104430 4309000 WEB-BASED REAL ESTATE PLATFORM 114866125-1 6,410.45 00 01528954 02/04/2022 DATA T ICKET INC 1104470 4309000 PROF SVC PARKING TICKET PROCES 133553 108.46 00 01528955 02/04/2022 DEL VALLE I FORMADOR INC 1104111 4321000 LEGAL NOTICE -DSTRCTNG 1.13 2022-3 125.00 00 01528955 02 /04 /2022 DEL VALLE INFORMADOR INC 1104111 4321000 LEGAL NOTICE -DSTRCTNG 1.27 2022 -1 6 125.00 00 01528957 02/04/2022 DEPARTMENT OF JUSTICE 1104210 4390400 FY 21 /22 Blood alcohol analysi 558232 385 .00 00 01528958 02/04/2022 DESERT ARC ATTIRE I 104470 4214000 Code uniforms TCGJl4869 377.13 00 0152 8959 02/04/2022 DESERT FIRE EXTINGUISHER 1104800 4388500 annual svc -Artist Center 10277773 371.33 00 01528960 02/04/2022 DESERT NAPA AUTO PARTS 11043 10 4332000 Car wash supplies 904731 48.47 00 01528962 02/04/2022 DESERT ROSE SOCIETY 1104610 4332001 rose annual pruning -CC Park 5050 975 .00 00 01528963 02/04/2022 DESERT SANDS UNIFIED SCHOOL DISTRIC11104417 4321900 Unite Palm Desert Podcast Reco 01 450 .00 00 01528965 02/04/2022 DR HYDRAULICS INC I 104331 4334000 ADVANTAGE LIFT AND AIR COMPRES 2372 1,367 .18 00 0 1528965 02/04/2022 DR HYDRAULICS INC 110433 1 4334000 RIM-Motor Vehicles-Fleet 2372 1.31 00 01528966 02 /04/2022 ED ITH PHILLIPS 1104230 4309000 Violation Dismissed Al412360 25.00 00 01528967 02 /04 /2022 EISE HOWER MEDICAL CENTER 1104210 4390400 FY 21 /22 Medical examinations T2l2760078 1,200.00 00 01528967 02/04 /2022 ElSE HOWER MEDICAL CENTER I 104210 4390400 FY 21/22 Medical examinations T2l3330046 1,200.00 00 01528969 02/04 /2022 EXCEL LA DSCAPE INC 11046 10 4332001 LMA 17 -CIVIC CENTER PARK 102604 620.16 00 0 1528969 02/04/2022 EXCEL LANDSCAPE INC 1104610 4332001 LMA 17-CIV IC CENTER PARK 102652 309.09 00 01528970 02/04/2022 FIESTA FORD 1104331 4334000 Enterprise Vehicle -Wire repa 470221-1 72.76 00 01528971 02/04/2022 FIRSTCHOICE COFFEE SERVICE 1104340 4219000 COFFEE / KJTCHEN SPL YS -CITY 950051 803 .35 00 0 1528972 02/04/2022 FLORES, EDUARDO 1100000 3511100 Vio lation Dismissed PD80920 50.00 Report Date 02 /28 /2022 Page 2 Page 24 City of P a lm Des ert Check Register 2/4/2022 -2/28/2022 Ba nk ID Check :'>iumb e r Check D ate Vendor :'>iame Account :\umber Transaction Desc Invoice Amount Paid 00 01528973 02 /04 /20 22 FOSTER GARD1'ER INC. 1104610 43 3200 1 FERTI LIZ ER -CC PARK 253547 4,193.54 00 015289 74 02/04/2022 FREY, J EREMY 1100000 1150100 LODGING REIMB - J ERE MY F 1/13 /2022 757 .10 00 01528974 02/04 /2022 FREY, JEREMY 1100000 11 50 100 MILAGE -JEREMY FREY 1/26/2022 125 .19 00 0 1528974 02/04/2022 FREY, JEREMY 1100000 1150100 PER DIEM-JEREMY F 1/26/2022 407.00 00 01528974 02/04 /2022 FREY, JEREMY 11 00000 1150100 PARKING ADVANCE-JEREMY F 1/26/2022 72.00 00 01528975 02 /04/2022 FRO TIER COMMUNTCA TTO S INC I 104159 4365000 D/U Circuit Fred Waring 7605686932-0122 56.59 00 01528975 02 /04/2022 FRONTIER COMMUNICATIONS INC 11042 10 4306001 Phone Svc (Dates) 7608629848-0122 117 .57 00 01528975 02/04/2022 FRONTIER COMMUN ICATIONS fNC 1104250 4365000 Traffic Signal line SVC 7603459I46-0122 56.59 00 01528975 02/04/2022 FRONTIER COMMUN ICATIO S fNC I 104344 4365000 PCC Phone Srv 7605682560-0122 130 .7 0 00 01528976 02/04/2022 FULTON D ISTRIBUTING 11 046 10 4219000 TRASHCA LINER -CC PARK 557910 1,610.32 00 01528976 02/04/2022 FULTON DISTRIBUTING 11 04340 4219000 SUPPLY AS NEED ED VARIOUS JAN IT 557909 1,284 .02 00 0 15289 76 02/04/2022 FULTON DISTRIBUTING 1104159 4391902 janitorial supplies -City Hal 5589 16 58 7.23 00 0 1528977 02/04/2022 GLADWELL GOVERNMENTAL SERVICES TN0041 l l 4309000 REC MGMT AND SUBSCRPT 21 -22 4719 250.00 00 01528978 02/04/2022 GLOBAL CT I GROUP INC. 11 04190 4336000 Move to Office 365 154503 360 .00 00 01528979 02/04/2022 GOVERNMENT FINANCE OFFICERS 11 04150 4312000 6/4-8 ANNUAL CONF REGS IT-CHAVEZ 450 .00 00 0 1528980 02/04/2022 GRANTCUS LLC 11 04470 4309000 PROFESSIONAL SERVICES FOR 148284 3 ,572.83 00 01528981 02/04/2022 GRIFFITHS FENCE I 1046 14 4392101 INST ALL TWO 30" x 27" BARRIER 3520 5,600.00 00 0 1528984 02/04/2022 HIG H TECH IRR IGATIO INC. 11 046 1 I 4332001 fe rt ilizer -LMA16 Hays tack 701406 1,409.78 00 01528985 02/04/2022 HORIZON LIGHTING INC. I 104340 4331000 RIM ELECTRJCAL -CITY HALL 272008 771.13 00 0 1528985 02/04/2022 HORIZON LIGHT ING INC . 11 04340 4331000 RIM ELECTRJCAL -C ITY HALL 2685 10 1,204.95 00 01528987 02/04/2022 IDEAPEDDLER LLC 11 044 17 4322100 Media Buy Expenditures 1615 409,000.00 00 0 1528988 02/04/2022 IMPERIAL LRRIGA TION DI STRICT 11 04250 4351400 Dinah Shore D r/Shopper 50087402-DC2 l 45 .73 00 0 1528988 02/04/2022 IMPERIAL l RRJ GA TION DISTRICT I 104250 4351400 Dinah Shore Dr/Miriam 5008741 I -DC2 1 45.57 00 0 1528988 02/04/2022 IMPERI AL IRRJ GATION DIS TRICT 1104250 4351400 7280 0 Dinah Shore Drive 50087423-DC2 l 62.10 00 0 1528988 02/04/2022 TMPERJAL IRRJGA TIO DTSTRJCT 1104250 4351400 Dinah Shore Dr/Monterrey 50087432-DC2 l 71.82 00 0 1528988 02/04/2022 IMPE RI AL LRRJ GATION DISTRICT 11 04250 4351400 Di nah Shore Dr/Monterey 5008744 3-DC2 l 47 .1 9 00 0 1528988 02/04/2022 IMPERIAL IRRI GA TIO DISTRICT 1104250 4351400 Dinah Shore Dr/M iriam 50087452-DC2 I 61.12 R e p ort D ate 02/28/2 0 22 Page 3 Page 25 City of Palm Desert Check Register 2/4/2022 -2/28/2022 Bank ID Check :\'umber Check Date Vendor .\"ame A cc ount :\umber T ransaction Desc In voice Amo unt Paid 00 01528988 02 /04/2022 IMP ERIAL IRRJGATIO:\ DISTRICT 110425 0 4351400 37998 Gerald Ford Dr 505 I 4026 -DC2 I 39 .90 00 0 152 89 8 02 /04/2022 IMPERIAL IRRIGATION DISTRICT 11 04250 4351400 37996 Gerald Ford Dr Signal LT 505 I 4028-DC2 I 59 .18 00 0152898 02 /04 /2022 IMPERIAL IRRlGA T IO N DISTRICT 11 04250 4351400 75396 Frank Sinatra Dr 50540835-DC21 45 .89 00 0 1528988 02/04 /2022 IMP ERIAL lRRlGA T IO N DISTRICT 1104250 4351400 75394 Frank Sinatra Dr St Ligh 50540839-DC21 39.40 00 01528988 02/04/2022 IMPERIAL IRRlGA TION DISTRI CT 1104250 4351400 75398 Frank Sinatra Dr 50540840-DC21 48.17 00 01528988 02/04 /2022 IMPERJAL TRRIGA TTON DISTRICT 11 04614 4351400 34249 Monterey Ave 50488446 -D C2 I 19.15 00 01528989 02/04/2022 INTERPRETERS UNLIMITED INC I 104210 4304200 interpreter services -Police 294372 16 .00 00 01528990 02/04/2022 JTB SUPPLY COM PANY INC. I 104250 4332500 traffic su ppli es -sign LED 109861 1,840.16 00 0152899 1 02/04 /2022 JUNK EXPRESS , T H E 1104470 4305500 Abate #22-0143 210099 650.00 00 01528991 02/04/2022 JUNK EXPRESS, T HE I 104470 4305500 A bate #22-013 2 210098 185.00 00 01528991 02/04/2022 JUNK EXPRESS , THE 11 04470 4305500 Abate #22-0134 2 10097 185.00 00 01528993 02/04/2022 KRAMAR, NATHAN RA YE 11041 30 4312500 Interpretation workshop 150 .00 00 01528995 02/04/2022 LASKIN , SHARON I 100000 351 I 100 Violation D is missed PD80509 330.00 00 01528996 02/04/2022 LEAG UE OF CA LIFORNIA CITIES RJV DIV 1104130 4363000 LOCC RIV CO DIVISION DUES 2550 100.00 00 0 1528998 02/04/2022 LOCK SHOP INC . 1104610 42 19000 commercial keys -CC Park BB00549483 21.01 00 01528998 02 /04/2022 LOCK SHOP INC. 11 04610 42 19000 K eys -LmA 17 CC Park BB00549 505 59.26 00 0 152 8999 02/04/2022 LOWE'S HOME CE TERS INC . 11 04250 42 19000 traffic su ppli es 902910-0 12022 92 .79 00 01528999 02/04/2022 LOWE'S HOM E CE TE RSI C. I 104340 42 19000 microwave for empl oyee launge 902136-011422 356.03 00 01528999 02/04 /2022 LOWE'S HOME CENTERS I C. I 1046 14 42 19000 wire mash -traffic supplies L 901468-011422 19 .13 00 01528999 02/04/2022 LOWE'S HOME CENTERS INC . I 104800 4388500 bldg materials roof repairs -902793 -0 11422 92.08 00 01528999 02/04/2022 LOWE'S HOME CENTE RS INC . 11043 10 4332000 Supplies to fix hoses 902957-12212 1 89.60 00 0 1528999 02/04/2022 LOWE'S HOME CENTERS INC . 11043 10 4332000 Supplies 902946-12 I 621 25.42 00 01528999 02/04/2022 LOWE'S HOME CENTERS INC. I 1043 10 4332000 Bldg supplies 902578 -0 I 1322 14.43 00 0 15 28999 02 /04/2022 LOWE'S HOME CENTERS INC . I 104310 4391502 Paint supplies 902720 -122721 90.77 00 01528999 02 /04/2022 LOWE'S HOME CENTERS INC. 1104310 4391502 Paint supplies 901 720 -122 821 166 .1 8 00 01528999 02 /04/2022 LOWE'S HOME CENTERS INC. 11 04310 4391902 Covid 19-Di sinfectant su pplie 902260-0 10622 40 .2 4 00 01529000 02/04/2022 MAGER, VANESSA 1104130 4312500 Re imbursemen t waters workshop REfMB. WORKSHOP 28 .88 Report Date 02 /28 /2022 Page 4 Page 26 City of Palm D esert Check Register 2/4/2022 -2/28 /2022 B a nk ID C hec k :\um be r C he ck D ate Vend o r i'iame Accou nt .'\umber Transaction Dcsc Invoice A m o unt Paid 00 01529001 02 /04 /2022 MARJPO SA LA '.\!D SCAP ES !:-SC 1104614 43 37001 LMA I MO:\T!-IL Y LAl\DS CAP E MA !l\T E 95854R 1,477.00 00 0 15 29 00 1 02/04/20 22 MARIPOSA LANDS CAP ES INC 1104614 433 70 01 LMA I MO NTI-I L Y LA N DS CAP E MAI NT E 9 5855 2,102 .49 00 0152 9001 02 /04/2022 MARJPOSA LANDSCAPES Ii C I 1046 14 43 3700 1 LMA I MO 1T HL Y LAN DS CAP E MAINT E 96 193 1,124.47 00 01529001 02/04/2022 MARIPOSA LANDSCAPES 11 C 1104 6 14 4337001 LMA I MO 1THL Y LANDSCAPE MAI TE 96194 3 ,005 .50 00 01529002 02 /04/2022 MCCOY.DAWN 1104417 4309000 Dawn McCoy Media COPDl22 3,000.00 00 0152 9002 02 /04/2022 MCCOY.DAWN I 104417 4309000 Dawn McCoy Medi a COPD222 3 ,000.00 00 01529003 02/04/2022 M1G I 104470 4309000 PROFESSIONAL SERVICES FOR D ESI 0073272 4 ,883 .72 00 0 1529005 02/04/2022 MOWERS PLUS INC 1104331 4334000 PERFROM AS NEEDED REPAIRS TOT 240107 193 .82 00 01529005 02/04 /2022 MOWERS PL US INC 1104331 4334000 PERFROM AS NEEDED REPAIRS TOT 242141 657 .26 00 01529005 02 /04 /2022 MOWERS PLUS INC I 104331 4334000 PERFROM AS NEEDED REPA IR S TOT 242503 113 .53 00 01529009 02 /04/2022 OZZIE'S INTERNAT IO NAL T IRE & AUTO 11 04331 4334000 SUPPLEMENTAL GENERAL FLEET REP 28821 932.45 00 0 152 9009 02/04/2022 OZZIE'S INTERNATIO NAL TIRE & AUTO 1104331 4334000 SUPPLEMENTAL GENERAL FLEET REP 29042 444.72 00 01529010 02/04/2022 PACIFIC PRODUCTS & SVC 1104310 4332000 Heavy duty anchors 29679 1,995.43 00 01529010 02/04/2022 PACIFIC PRO DUCTS & SVC 1104310 4332000 Posts -Street Maintenance 29680 1,960 .63 00 01529012 02 /04/2022 PALM D ESE RT ACE HARDWARE I 104800 4388500 bldg materials -Artist Center 234820 30.77 00 0 15 29013 02/04/2022 PALM DESERT MIDDLE SCHOOL 1104416 4306201 9th Annual Palm Desert Panther 001 2,500.00 00 01529015 02/04 /2022 PALMER ELECTRIC 1104610 4332100 ELECT REPAIRS-CC PARK 3118 7,09 7 .09 00 015290 15 02/04 /2022 PALMER EL ECTRJC 1104610 4332100 ELECT REPA IRS -CC PARK 3174 525 .00 00 01529015 02/04/2022 PALMER ELECTRJC 11 046 10 4332 100 ELECT REPAJRS -CC PARK 3216 2,214.80 00 0 1529015 02 /04/2022 PALM ER ELECTRJC 1104610 4332100 ELECT REP AIRS -CC PARK 3221 680.41 00 01529015 02 /04/2022 PALMER ELECTRJC 11 04614 4392101 ELECT REPAJRS -ENTRADA EL PAS 3230 735 .00 00 01529016 02/04/2022 PARKHOUSE TIRE INC . 1104331 4334000 TIRE REPAIRS AND REPLACEMENTS 2030209697 740.31 00 0 1529017 02/04/2022 PATTON DOOR & GA TE 11 04330 4331000 RIM OVERHEAD DRS -CORPORATIO N 85 139 168 .10 00 01529018 02/04/2022 PETE'S ROAD SERVICE INC I 10433 1 4334000 PERFORM REPAIRS AND SERVICES 553027-00 95.00 00 01529018 02 /04/2022 PETE'S ROAD SERVICE INC 11 0433 1 4334000 PERFORM REPAIRS AND SERVI CES 554127-00 95 .00 00 01529018 02/04/2022 PETE'S ROAD SERVICE INC 1104331 4334000 PERFORM RE PAIRS AND SERVICES 553026-00 95 .00 00 0 152 9019 02/04/2022 PLAZA TOWING 11 04210 4304200 police towing srvcs 21-1211 -1208 I 100.00 Report Date 02 /28/2022 Page 5 Page 27 C ity of Palm Desert Check Register 2/4/2022 -2/28 /2022 Bank ID Check '.\umb e r Check Date Vend o r :\ame Account :\umber Transaction Desc Invoi ce Amount Paid 00 015 2901 9 02 /04/2022 PLAZA TOWING 11 04 2 10 4304 200 po lice to wing srvcs 22-0 I 05 -12604 200.00 00 01529020 02 /04 /2022 PPG ARCHIT ECTU RAL FINISHES 11 043 10 4391502 Graffiti removal supplies 972203096566 62.88 00 01529020 02 /04/2022 PPG ARCHITECTU RAL FINISHES 11043 10 4391502 Pain t su pplies 972203096700 18 8.97 00 01529021 02 /04/2022 PROFOR.t"1A SOCAL I 104420 4361000 INSPECTION NOTICES BH49002364A 301.24 00 01529022 02/04/2022 QUADIENT LEASING USA INC 1104159 4342000 FY 21 /22 Folder/Inserter fees N9202668 880 .12 00 01529023 02 /04/2022 RADAR SHOP, THE 1104210 4304200 lid ar service -custom signals RS-12129 10 7.50 00 01529024 02 /04/2022 RAS!X COMPUTER CENTER INC 1104190 4212000 Toner ID7523 I 249 .03 00 01529025 02 /04/2022 RIVERSIDE COUNTY CLERK/RECORDER 1104470 4309000 Release of Lien 21-579718 20 .00 00 01529025 02 /04 /2022 RIVERSIDE COUNTY CLERK/RECORDER 1104470 4309000 Release of Lien 21 -592019 20.00 00 01529025 02 /04/2022 RIVERSIDE COUNTY CLERK/RECORDER 1104470 4309000 Release of Lie n 21 -595688 20.00 00 01529025 02 /04/2022 RIVERS IDE COUNTY CLERK/RECORDER 11 04470 4309000 Release of Lie n 21-599962 20 .00 00 01529026 02 /04/2022 RIVERS ID E COUNTY SHERIFF-PSEC 11 042 11 4306001 FY 21 /22 Citi zens on Patrol ra PEOOOOOOOl35 268 .83 00 01529027 02/04/2022 RIVERS IDE UNIVER SITY HEALTH SYSTEM 11042 11 4392100 Homelessness Assistance Progra CLAIM#6 4 ,904.28 00 01529028 02/04 /2022 ROBE RT HALF !NTERNA TIONAL !NC 11 04 154 4303600 Temp Em pl oyee 59222796 1,070 .8 8 00 0 1529028 02/04/2022 RO BERT HALF !NTERNA TIONAL !NC I 104 154 4303600 Temp Emp loyee 59248449 760.80 00 0 1529028 02 /04/2022 RO BERT HALF INTERNATIONAL !NC 11 04 15 4 4303600 Temp Emp loyee 59004034 1,416.00 00 01529028 02 /04/2022 ROBE RT HALF !NTERNA TIO ALINC 1104154 4303600 Temp Emp loyee 59247848 1,440.80 00 0 1529028 02/04/2022 ROB ERT HALF !NTERNATIO AL!NC 1104154 4303600 Temp Employee 59248 104 1,280.80 00 0 1529030 02/04/2022 ROJAS , JOE I 104300 4363000 Reimb . Chem ical Li cense Re newa RCOO 1706 .106.2 120 .00 00 0 1529032 02 /04/2022 SANT MADE 11 04417 4321900 Website Hosting & Main tenance 2315 700 .00 00 0 1529033 02 /04/2022 SH RED -IT USA 1104 111 4309000 CITY CLERK 12/27 & 01 /1 0 8000779667-1 28 .34 00 0 1529033 02 /04/2022 SHRE D-IT USA I 104150 4211000 FINANCE 12/27 & 01 /10 8000779667-3 28 .35 00 0 1529033 02/04/2022 SHRE D-IT USA I 104 154 4309000 HR 12/27 & 01 /10 8000779667-2 28.34 00 0 15 29033 02 /04/2022 SH RE D-IT USA I 104300 4309 000 PUB WO RKS 12/27 & 01/10 8000779667-4 28.35 00 0 1529033 02/04/2022 SHRED-IT USA 1104430 4211000 ECO DEV. 12/27 & 0 1/10 8000779667-6 28.35 00 0 1529033 02/04/2022 SHRE D-IT USA I 104470 4309000 CODE 12/27 & 01/10 8000779667-5 28 .35 00 0 1529034 02/04/2022 SIGN A RAMA I 104 159 4391902 COV ID Signage 110 177 159.69 Report D ate 02/28 /2022 Page 6 Page 28 City of Palm D esert Check Register 2/4/2022 -2/28 /2022 Bank ID Check :\umber Check Date Vendor :\am e Account :\umbe r Transaction De sc In voice Amount Pa id 00 01 529034 02/04 /2022 SIG:\ A RAMA 1104310 4332000 Sign Ins tallation Decals 11 0248 I 93.95 00 01529034 02 /04 /2022 SIGN A RAMA 1104310 4332000 2 signs 110328 299.55 00 01529035 02 /04 /2022 SIMPLOT PARTNERS 1104611 4332001 irrigation supplies -LMA 16 Fr 20 8 131262 136 .92 00 01529035 02/04/2022 SIMPLOT PART 'ERS 1104614 4219000 landscape small tools -LMAI H 208131149 111.39 00 015 29036 02/04 /2022 SKYLINE SAFETY AND SUPPLY 1104159 4391902 safety supplies -City Hall 6666 169.25 00 01529036 02 /04/2022 SKYLINE SAFETY AND SUPPLY I 104159 4391902 safety supplies -City Hall 6676 629. 18 00 01529036 02/04 /2022 SKYLINE SAFETY AND SUPPLY 11043 IO 4219000 SUPPLY AS NEEDED SAFETY AND OT 6565 2,138.42 00 01529036 02/04 /2022 SKYLINE SAFETY AND SUPPLY 1104310 4219000 SUPPLY AS EEDED SAFETY AND OT 6663 416.52 00 01529037 02 /04 /2022 SO CAL GAS 1104344 4351200 45480 Portola Avenue I 67525 l 2422 -J A22 248.72 00 01529038 02/04/2022 SOUTHERN CALIFORNIA EDISON I 10461 I 4351400 735 10 FW PARKS AL-2 700383536327JA22 3,859.79 00 01529038 02/04/2022 SOUTHERN CALIFORNIA ED ISO I 104340 4351400 4491 I Cabrillo Avenue 70047150906IJN22 93 .38 00 01529039 02 /04/2022 SOUTHWEST AQUATICS I 104610 4332001 RIM LAGOON -CIVIC CE TER PARK 01-18617 2,320.7 5 00 01529039 02/04/2022 SOUTHWEST AQUA TICS 1104614 4392101 RIM WATER FEATURE ENTRADADEL 01 -18617 773.5 3 00 01529040 02 /04/2022 SPANISHO E PLUS I 104130 4309000 Translation redistrictin g 001050 317.47 00 01529041 02 /04/2022 SPRINT SOLUTIONS INC I 104331 4334000 LEASED VEHICLE MONTHLY GPS 241265004-045 D2 I 860 .70 00 01529042 02 /04/2022 ST. FRANCIS ELECTRIC LLC 1104250 4332500 TRAFFIC SIGNAL PREVE TA TIVE 20016819 1,093.50 00 01529042 02 /04/2022 ST. FRANCIS ELECTRIC LLC 1104250 4332500 TRAFFIC SIG AL PREVENTATIVE 20016820 1,838 .0 0 00 0 1529043 02/04/2022 STAPLES BUSINESS ADVANTAG E 11041 IO 4219000 OFFICE SUPPLIES 3497068286 34.3 I 00 01529043 02/04 /2022 STAPLES BUSINESS ADVANTAGE I 1041 IO 4219000 OFFICE SUPPLIES 3497068288 34.40 00 01529043 02 /04/2022 STAPLES BUSINESS ADVANTAGE 1104110 4219000 OFFICE SUPPLIES 3495469149 158.88 00 0 1529043 02 /04/2022 STAPLES BUSINESS ADVANTAGE 11 04110 4219000 OFFICE SUPPLIES 3495469150 33 .93 00 01529043 02 /04 /2022 ST AP LES BUSINESS ADV ANT AGE 1104110 4219000 OFFICE SUPPLIES 3495469151 43 .36 00 01529043 02 /04/2022 STAPLES BUSINESS ADVANTAGE 1104110 4219000 OFFICE SUPPLIES 3495900060 17.76 00 0 1529043 02/04/2022 STAPLES BUSINESS ADVANTAGE I 104110 4219000 OFFICE SUPPLIES 3495900061 104.77 00 0 1529043 02 /04/2022 ST APL ES BUSINESS ADV ANT AGE 11 04110 4219000 OFFICE SUPPLIES 3495900063 21 .53 00 0 1529043 02 /04/2022 STAPLES BUSINESS ADVANTAG E 1104110 4219000 OFFICE SUPPLIES 3495900064 21.68 00 0 1529043 02/04/2022 STAPLES BUSINESS ADVANTAGE I 104430 4211000 OFFICE SUPPLIES: ECO O DEV 3498051494 32.19 Report Date 02 /28/2022 Page 7 Page 29 City of Palm D esert Check Register 2/4/2022 -2/28 /2022 Bank ID Check :\umber Check D ate Vendor ;\ame Account :\umb er Transaction Desc In voice Amount Paid 00 01529043 02 /04 /2022 STAPLES BUSINESS ADVA:\TAG E 1104430 4 2 11000 OFFICE SU PPLI ES: ECOJ\i O DEV 3498051495 5.42 00 01529043 02 /04 /2022 STAPL ES BUSINESS ADVAt\"TAG E 1104470 42 11000 OFFIC E SUPPLI ES: PLANNING 3498051494 13 .35 00 01529043 02 /04/2022 STAPLES BUSINESS ADVANTAGE 1104470 4211000 OFFICE S UPPLIES: CODE 3498051494 19.55 00 01529044 02/04/2022 ST A TE WATER RESO URCES CONTROL 1100000 1430100 annual permit fee 10/0 1/21 -0 SW-0223071 4,416.56 00 01 52 9044 02 /04/2022 STATE WATER RESOURCES CO TROL 1104396 4400100 annual permit fee I 0/0 1/2 1 -0 SW -0223071 13,249.44 00 01529045 02 /04/2022 STENO SOLUTIO S TRANSCRIPTION 11 04210 4304200 Sheri ff Dept Reports 43518 307 .08 00 01529046 02 /04/2022 SUPERIOR READY MIX CONCRETE 1104310 4332000 Concrete Mix-Cook & CC 248666C 683.14 00 01529047 02 /04/2022 TAG /AMS INC . 1104154 4305600 Annual Renewal Fee 2803971 175.00 00 01529048 02 /04/2022 TERRA NOV A PLA I G & RESEARCH 11 04470 4309000 PROFESSIONAL SERVICES FOR FISC TNI02 102 6 ,508.75 00 01529049 02 /04/2022 TIME WARNER CABLE 1104159 4365000 Cable Service Corp Yard 1093262010722 65.82 00 01529050 02 /04 /2022 TOPS N BARRICADES fNC . 1104310 4332000 Striping Paint 1091506C I ,025.24 00 01529050 02 /04/2022 TOPS N BARRICADES INC. 1104310 4332000 SUPPLY AS NEEDED VARIO US STREE 1091807 385 .85 00 01529051 02/04/2022 U S POSTMASTER 1104417 4302600 Brightside Postage FY 2 1/22 MAR/ APR 2022 6,434.69 00 01529052 02/04/2022 U .S. POSTAL SERVICE 1100000 1010600 POSTAGE REISS-80360860 REISS 15 20250 5,000.00 00 0 152 9053 02/04 /2022 UNIFIRST CORPORATION 1104310 4214000 INDUSTRIAL UNIFORM RENT AL AND 3251750303 173.27 00 01529053 02/04/2022 UNIFIRST CORPORATION 1104310 4214000 INDUSTRIAL UNIFORM RENT AL AND 3251752894 168.21 00 01529053 02 /04/2022 UNIFI RST CORPORA TIO 1104310 4214000 fNDUSTRIAL UNIFORM RENTAL A D 3251755521 168 .2 1 00 01529053 02 /04/2022 UNIFIRST CORPORAT ION I 104310 4214000 INDUSTRIAL UNIFORM RENTAL AND 3251758 154 168 .7 1 00 01529054 02/04/2022 UNITE D RENTALS 1104310 4343000 RENTAL OF WATER, DUMP AND OTHE 202286186-00 I 1,8 53 .37 00 01529055 02/04/2022 VINTAGE ASSOCIATES 1104611 4332001 EXTRA S-PARKS 223092 1,200.00 00 0 152 9055 02 /04/2022 VfNT AGE ASSOC IA TES 1104611 4332001 EXTRAS-PARKS 223093 555.49 00 0 1529055 02/04/2022 VINTAGE ASSOCIATES l 1046 1 I 4332001 EXTRAS -PARKS 222705 1,296.08 00 01529055 02 /04/2022 VINT AGE ASSOCIATES 1104611 4391000 EXTRAS -SP COMMUNITY GARDENS 222705 4,172.78 00 01529056 02 /04/2022 WAGE WORKS INC 1104154 4309000 FY 21/22 Flexible spendi ng ace JNV3313643 50.00 00 01529057 02 /04/2022 WASHINGTON CHARTER SCHOOL I 104211 4309201 FY 21 /22 Washington Charter 011322 6,620.00 00 01529059 02/04/2022 WAXIE 1104330 4219000 janitorial supplies/ face mask 80585541 228 .24 00 01529060 02 /04/2022 WEST COAST ARBORlSTS INC 1104614 4337001 HARDWOOD -MEDlANS 181426 23 ,712.00 Report Date 02 /28 /2022 Page 8 Page 30 C ity of P alm D esert Check Register 2/4/2022 -2/28 /2022 Bank ID Check 'iumb er Check Date Vendor 'ia me Accoun t . ·umb e r Transaction Desc lnvoicc Amount Paid 00 01529060 02 /04/2022 W EST COAST ARBORIS TS 17\C I 1046 14 4337001 PAL\1S -M EDIANS 181425 352 .00 00 0 1529062 02 /04 /2022 XPRESS GRAPHICS 1104 13 0 43 12500 Work shop signs 22 -4 5335 154 .58 00 01529062 02/04/2022 XPRESS GRAPHICS 1104417 4361000 Business Survey Card 22-45284 58 .78 00 01529064 02/04 /2022 Z UMAR DUSTRIES INC . 1104154 4309501 Service Award -Street Sign 95035 280 .30 00 01529064 02/04/2022 ZUMAR IND U STRIES INC. I 104310 4219000 SUPPLY AS NEEDED V ARJOUS ALUM! 95555 3,588.88 00 01529064 02 /04/2022 ZUMAR fNU USTRIES fNC . 1104310 4219000 SUPPLY AS NEEDED V ARTOUS ALUMf 95599 2,341 .31 Gene ral F und 63 8,9 83.79 00 01528964 02 /04/2022 DOKKEN ENGINEERING 2134359 4400100 PROVIDE ENGINEER! G AND 40447 13 ,135 .00 00 01528992 02 /04/2022 KJMLEY-HOR A D ASSOC IA TES INC. 2134250 5000907 CONSULTA T SERVICES FOR THE TR 20496706 86,75 1.51 Measure A 99 ,886.51 00 01529004 02 /04/2022 MJKE LINARES INC 2204800 4309000 Administration of the Co mmun it 750.00 00 01529004 02 /04/2022 M IKE LINARES INC 2204800 4309000 Administration of the Communit 2 3,750.00 00 0 1529004 02/04 /2022 MIKE LINARES INC 2204800 4309000 Administration of the Communit 3 3,850.00 Community D evelopm e nt (C DBG) 8,350.00 00 01528968 02/04/2022 ENTERPRISE HOLDINGS fNC 2294210 4391400 FY 21 /22 Car rentals for PD Po 28821180 2,879.91 00 01528975 02 /04/2022 FRONTIER COMMUN ICATIONS INC 2294210 4391400 Valley Crimestoppers Hotline 7603417867-0122 154.67 00 0 1529026 02/04/2022 RIVE RS IDE COUNTY SHERJFF-PS EC 22942 10 439 1400 FY 21 /22 PD Po lice radio opera PE0000000 155 1,313.49 00 0 1529026 02/04/2022 RIVERSIDE COUNTY SHERIFF-PSEC 2294210 4391400 FY 21 /22 PD Police rad io opera PE0000000092 59.74 Public Safety Police Grants 4,407.81 00 0 1528944 02/04 /2022 BLUE CROSS OF CALIFORN IA 2300000 3412400 EMS I 0/19/20 Ref Run 20-493921 00316745H 1,896.12 00 0 1528944 02/04/2022 BLUE CROSS OF CALlFORNlA 2300000 3412400 EMS 3/9/20 Ref Run 20-123495 154M927 32 89 .87 00 0 1528950 02/04 /2022 COACHELLA VALLEY WATER DIST. 2304220 4351000 73995 Country Club FS71 Past D 122335377974DC21 201.37 00 0 1528950 02/04 /2022 COACHELLA VALLEY WATER DIST. 2304220 4351000 73995 Cou ntry Club FS71 122335377974JN22 194 .27 00 01528985 02 /04/2022 HORIZON LIGHTfNG INC. 2304220 4331000 FY 21 /22 -Elect/Light Svcs -271790 768.16 00 01528997 02 /04/2022 LIBERTY MUTUAL 2300000 3412400 EMS 9/19/2 1 Run 21-518404 505-517538-0 I 50 .00 00 0 1529006 02 /04/2022 NORIDIAN MEDICARE JE PART B 2300000 3412400 EMS 9/23 /20 Ref Run 20-451844 8FG2WF9YT08 392.41 Report D ate 02 /28 /2022 Page 9 Page 31 City o f Palm Des ert Check Register 2/4/2022 -2/28/2022 Bank ID Ch eck '.'iumh c r Check Date Vendor :\amc Account . ·umber Transaction Desc I nvoic c Amo unt Paid 00 01529008 02 /04 /2022 OVERPAY~E~TRECOVERY 2300 000 341 2400 E~S 9/3/20 Ref Fun 20-414 192 341 A6652 2 1,550.81 00 01529037 02 /04 /2022 SO CAL GAS 2304220 4351200 44400 Town Ctr Wy -FS#33 06242756002 -JA22 415.82 00 01529037 02/04/2022 SO CAL GAS 2304220 4351200 73200 Mesa View Dr. -FS#67 054 I 2483009-JA22 179 .85 00 01529037 02 /04 /2022 SO CAL GAS 2304220 4351200 73995 Country Club Dr -FS#7 I ! 3562662000-DC2 I 92.36 00 01529037 02/04 /2022 SO CAL GAS 2304220 4351200 73995 Country Club Dr -FS #7 I I 3562662000-JN22 133.68 00 01529038 02 /04/2022 SOUTHERN CALIFORNlA EDISON 2304220 4351400 FIRESTATION 33 , 67 , & 71 700028290904JA22 3,224.57 Prop . A Fire Tax 9 ,189.29 00 01528983 02 /04/2022 HF&H CONSULT A TS LLC 2364195 4309000 PROVIDE SOLID WASTE, RECYCUNG 9718897 17 ,869 .25 Recy cling F und 17,869.25 00 01528949 02 /04 /2022 COACHELLA VALLEY ASSOCIATION 2384515 4400100 AV2766 lstQR(07/0I /21 -09 /30/ CV221 l-2 1 I 3,280.69 Air Quality Mgmt-AB27 66 13 ,280.69 00 01529037 02/04/2022 SO CAL GAS 2424549 4351200 73751 Magnesia Falls -POOL 13 1495 17933 -JA22 11,262.17 00 01529049 02/04/2022 TIME WARNER CABLE 2424549 4365000 Aquatic Center Cable Services 84484 1072052JA22 770.83 00 01529058 02/04/2022 WATERLINE TECHNOLOGIES INC 2424549 4211100 AQUATIC CE TER: 5565480 2,163 .19 00 01529058 02 /04/2022 WATERLINE TECHNOLOGIES INC 2424549 4211100 AQUATIC CE TER: 5565528 921.26 00 01529058 02 /04/2022 WATERLINE TECHNOLOGIES INC 2424549 4331101 AQUA T IC CENTER: 5564542 3,750 .00 A quatic Center 18 ,867.45 00 0 1528975 02 /04/2022 FRONTIER COMMUN ICA TI ONS INC 27 14491 4369500 EP Phone Svc (Da te) 76067490 12-0122 99.28 El Paseo Assessment District 99.28 00 0 1528986 02 /04/2022 HORIZON PROFESSIONAL LANDSCAPE 2754694 4332100 erosion repair -LMA 7 6244 340.00 00 0 1529060 02/04/2022 WEST COAST ARBORISTS INC 2754684 4309500 HARDWOOD -SO ATA II 181426 2,166.00 Zon e #6 Hovley Lane 2,506.00 00 01529055 02 /04/2022 VINTAGE ASSOC IATES 2764374 4332000 EXTRAS -HAYSTACK DRAINAGE C HA 222706 245 .69 00 0 1529055 02 /04/2022 VINTAGE ASSOCIATES 2764374 4332000 EXTRAS -HAYSTACK DRAINAGE CHA 223450 281 .63 Zon e #2 Can yon Cove/Haystack 527.32 Re port Date 02/28 /2022 Page 10 Page 32 City of Palm Desert Check Register 2/4/2022 -2/28 /2022 Bank ID Check :\umb er Check Date Vendor :\'amc Account . 'umb e r Transaction D esc In voic e Amount Paid 00 01529035 02/04/20 22 SIMPLOT PART'.\'ERS 2814374 4332 100 fertiliz er -L\IIA 7 Th e Grove 20813 13 12 60 .34 Zone#9 The Grove 60.34 00 0 152902 9 02/04 /2022 RocketMortgage, LLC 4004950 4401000 PROPERTY ACQN -MOELLER 3316029545 163 ,809.39 CP Capital Project Reserv e Fd 163,809.39 00 01528950 02/04/2022 COACHELLA VALLEY WATER DIST. 4254430 4395000 37023 Cook St. Ste 102 iHub Pa 720041309104DC21 55.44 00 01528 950 02/04/2022 COACHELLA VALLEY WATER DIST. 4254430 4395000 37023 Cook St. Ste 102 iHub 720041309104JN22 55.44 00 01528950 02/04/2022 COACHELLA VALLEY WATER DIST . 4254430 4395000 iHUB (11/15-12/15)-Late 7200413091040212 55 .44 00 01529038 02/04/2022 SOUTHERN CALIFORNIA EDISON 4254430 4393000 Lupine Plaza (11 /15-12/1 5) 700066658242DC2 J 60.49 00 01529038 02/04/2022 SOUTHERN CALIFORNIA EDISO N 4254430 4395000 iHUB (12/6-1 /4) 700423102627 928.00 E conomic Developme nt Proj 1,154 .81 00 01529031 02/04/2022 SAME DAY EXPRESS 4364650 4337200 Amount not to exceed $5,000 .00 012922 350.00 00 01529031 02/04/2022 SAME DAY EXPRESS 4364650 4337200 Amount not to exceed $5 ,000 .00 12622 595.00 Art in Public Places 945.00 00 01528986 02/04/2022 HORIZON PROFESSIONAL LANDSCAPE 4414195 4332000 DESERT WILLOW PERIMETER 6226 1,140.00 00 01528986 02/04/2022 HORIZON PROFESSIONAL LANDSCAPE 4414195 4332000 DESERT WILLOW PERIMETER 6229 622.92 Golf Course Capital 1,762.92 00 01528940 02/04/2022 BANNERBA K 4510000 1025000 Cash-Relent In Escrow 12/1 /21-78 22 ,638.70 00 01528940 02/04/2022 BA ER BANK 4510000 2060000 Retentions Payable RETENT PP#7 B 22 ,638 .70 00 01528940 02/04/2022 BA ER BANK 4510000 2060000 Retentions Paya bl e 12/l /21 -7B* -22 ,638.70 00 01528964 02/04/2022 DOKKEN ENGINEERING 4514342 4400100 LANDSCAP E ARCHIT ECTURE AND DES 40449 5,554 .00 00 01528982 02/04/2022 H & H GE ERAL CONTRACTORS INC 4510000 2060000 Retentions Payable PP#07B -22,63 8.7 0 00 01528982 02/04/2022 H & H GENERAL CONTRACTORS INC 4514692 4400100 PRESIDENT'S PLAZA EAST AND WES PP #07B 452 ,774.00 CP Properties City/RDA 458,328.00 00 01528946 02/04/2022 BRIAN K. STEMMER CONSTRUCTION 5104195 4331000 ce iling and wal repair -Rende 5416 950.00 00 01528961 02/04/2022 DESERT PIP E & SUPPLY 5104195 4369601 bldg ma int supplies -Park Vie 6369940 263 .73 00 01528975 02/04/2022 FRONTIER COMMUNICATIONS INC 5104 195 4369601 Parkview Bldg Alann Srv 7603468393 -0122 157 .80 Report Date 02 /28/2 022 Page l l Page 33 . C ity of P a lm D esert Check Register 2/4/2022 -2/28/2022 Bank lD Ch e ck .'\umber Check Date Vendor .'\am e Account .'\umb e r Trans action Desc Invoic e Amount P a id 00 01528975 02 /04/2022 FRO7\TIER COV!M t.;'s"ICATIO ;-.;S l:\C 5 104195 43 69601 Pa rkview Bld g Phone Srv 760 6 74 196 0-0 122 81.06 00 0152 8975 02 /04 /2022 FROi':TI ER COMM V1\ICA T IONS ~C 5104195 4369601 Parkview Bldg Fire Alann 7607791904-0122 71.59 00 01528975 02/04 /2022 FRONTIER COMM UN ICATIONS IN C 5104195 4369601 Parkview Bldg Al ann Srv 7608361142-0122 77.85 00 01528975 02/04 /2022 FRONTIER COMM !CATIO NS INC 5104195 4369602 State Bldg internet Srv 3101746165-0122 55 .98 00 01528975 02/04 /2022 FRONTIER COMM 1 !CATIONS INC 5104195 4369800 Henderson Bldg Phone Srv 76077667l5-0122 202.77 00 01528985 02 /04/2022 HORJZON LIGHTING TNC. 5 1041 95 4369601 RIM ELECTRICAL-PARKVTEW OFF! 268358 573.33 00 01529007 02 /04/2022 OTIS ELEV A TOR CO 5104195 4369500 ELEV A TOR SVC SHERIFF SUB ST A TIO 100400615721 195.39 00 01529011 02 /04/2022 PACIFIC WEST AIR CO DIT!ONfNG 5104195 4369500 PROVIDE HVAC PREVE 1TATJVE 135970 2,183.42 00 01529011 02 /04/2022 PACIFIC WEST AIR CONDIT!ONTNG 5104195 4369500 PERFORM AS NEEDED MISCELLA EOU 135087 2,472.66 00 0152901 I 02/04/2022 PACIF IC WEST A IR CO DITIONTNG 5 104 195 4369500 substation hva e repair 135087 BAL 191.34 00 01529037 02 /04/2022 SO CAL GAS 5 104 195 4369800 72559 Hwy I I !-Henderson 08946430827-JA22 16.27 00 0 1529059 02 /04/2022 WAXIE 5104195 4331000 janitorial supplies -Sheriffs 80571760 214.37 PD Office Comple x-Ente rprise 7 ,707.56 00 01528942 02/04/2022 BEDROSIAN, PATRJCK 5764192 4119000 RETIREE HEALTH STIPEND Februar 2/1 /2022 163.06 00 01529061 02/04/2022 WRIGHT, BARBARA 5764192 4119000 RETIREE HEAL TH STIPEND Februar 2/1 /2022 174.70 00 0 1529063 02 /04/2022 YRIGOYEN, DA YID L. 5764192 4119000 RETIREE HEAL TH STIPEND Fe bruar 2/1 /2022 461.16 R etiree Health S ink Fund 798.92 00 0 1528947 02 /04/2022 CALIFORNIA BUILD! G STA DAROS 6100000 2281000 Green Bldg F ees-4 TH Qtr 202 I 1/24/2022 2,754.00 00 01528947 02 /04/2022 CALIFORNIA BUlLDfNG STANDARDS 6 100000 2281000 10% Adminis trati on Fees 1/24/2022 -275.40 00 01528952 02/04 /2022 Co ronel En terprises lnc 6100000 2283900 PM I 0 Release 72694 Skyward Way SFGR 18-0009 460 .00 00 01528956 02/04 /2022 DEPARTMENT OF CONSERVAT ION 6 100000 2284000 SMIP Fees -4TH Qtr 2021 1/24 /2022 4 ,927.77 00 01528956 02 /04/2022 DEPARTMENT OF CONSERVATION 6100000 2284000 5% Administration Fees l /24 /2022 -246.3 8 00 01528994 02 /04/2022 LA QUfNTA BREWfNG COMPANY LLC 6100000 2283900 PMl0 Release La Quinta Brewing PG 19-0028 2,260.00 00 01529014 02 /04/2022 PALM VENTURES PA-I LLC 6 100000 2283900 PM l 0-TR36793-Remaining Balance TD 5379 1/27/22 18,000.00 T &A P e rformance Depos its 27,879 .99 Report Date 02/28 /2 022 Page 12 Page 34 .. Ba nk ID Check :\umb e r C h eck Date Vendor .'iam c R eport D ate 02/28/2022 City of Palm Desert Check Register 2/4 /2022 -2/28/2022 Account :\umbe r Tran sa ctio n D esc Page 13 I nvoice Amount Pai d Total Fo r Bank ID -00 1,476 ,414.32 Page 35 [This page has intentionally been left blank.] Page 36 Page 37 Bank ID Check N umber Check Date Vendor Name 10 10 10 10 00001527 00001528 00001528 00001529 02 /04/2022 02 /04/2022 02 /04/2022 02 /04/2022 IS PALM DESERT LP LANCE SOLL & LUNG HARD LANCESOLL&LUNGHARD WILLDAN FINANCIAL SERVICES Examined and Approved City of Palm D esert Check Register 2/4/2022 -2/28 /2022 Account Number 7034121 4374000 7034195 4302000 7034195 4302000 7034195 4309000 Transaction Desc Sewer rent payment pursuant to AUDIT SVC-21 /22 Prof-Accounting/Auditing 2003 di sc losure svc-20/21 Invoice FEB, 2022 47708 46999 01049816 RDA Successor Agency Successor Agency Report Date 02 /28/2022 Page 14 Amount Paid 11 ,639.40 870.00 5,300.00 2 ,175.00 19,984.40 Total For Bank ID -10 19,984.40 Page 38 CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM To: From: Date: BUILDING AND SAFETY DIVISION, CODE COMPLIANCE DIVISION, AND PLANNING DIVISION N , CITY CLERK Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: _____________________________________________________ A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________ Responding Department: __________________________ Date:_______________ Response: No comment – okay to present to City Council. Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary): _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Breakfast Republic & Eggies - 44491 Town Center Way Ste A, Palm Desert, CA 92260 Wednesday, February 9, 2022. February 2, 2022Building and Safety February 2, 2022 Page 39 CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM To: From: Date: BUILDING AND SAFETY DIVISION, CODE COMPLIANCE DIVISION, AND PLANNING DIVISION N , CITY CLERK Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: _____________________________________________________ A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________ Responding Department: __________________________ Date:_______________ Response: No comment – okay to present to City Council. Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary): _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Breakfast Republic & Eggies - 44491 Town Center Way Ste A, Palm Desert, CA 92260 Wednesday, February 9, 2022. February 4, 2022Dev Services - Planning February 4, 2022 Page 40 CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM To: From: Date: BUILDING AND SAFETY DIVISION, CODE COMPLIANCE DIVISION, AND PLANNING DIVISION N , CITY CLERK Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: _____________________________________________________ A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________ Responding Department: __________________________ Date:_______________ Response: No comment – okay to present to City Council. Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary): _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Breakfast Republic & Eggies - 44491 Town Center Way Ste A, Palm Desert, CA 92260 Wednesday, February 9, 2022. February 2, 2022Code Compliance February 2, 2022 Page 41 Page 42 Page 43 CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM To: From: Date: BUILDING AND SAFETY DIVISION, CODE COMPLIANCE DIVISION, AND PLANNING DIVISION NORMA I. ALLEY, MMC, CITY CLERK Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: _____________________________________________________ A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________ Responding Department: __________________________ Date:_______________ Response: No comment – okay to present to City Council. Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary): _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Shadow Mountain - 73800 Ironwood St, Palm Desert, California 92260 Wednesday, December 29, 2021. December 22, 2021Building and Safety December 20, 2021 Page 44 CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM To: From: Date: BUILDING AND SAFETY DIVISION, CODE COMPLIANCE DIVISION, AND PLANNING DIVISION NORMA I. ALLEY, MMC, CITY CLERK Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: _____________________________________________________ A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________ Responding Department: __________________________ Date:_______________ Response: No comment – okay to present to City Council. Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary): _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Shadow Mountain - 73800 Ironwood St, Palm Desert, California 92260 Wednesday, December 29, 2021. December 21, 2021Code Compliance December 20, 2021 Page 45 CITY OF PALM DESERT CITY CLERK DEPARTMENT INTEROFFICE MEMORANDUM To: From: Date: BUILDING AND SAFETY DIVISION, CODE COMPLIANCE DIVISION, AND PLANNING DIVISION NORMA I. ALLEY, MMC, CITY CLERK Subject: APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE(S) BY: _____________________________________________________ A copy of the subject ABC License Application is attached for your review and recommendation to the City Council or to another department(s) for further action. A response is required. Please mark the appropriate response below and return to my office by __________________________ Responding Department: __________________________ Date:_______________ Response: No comment – okay to present to City Council. Refer to ______________________________________ related comments (attach additional sheets, if necessary): _________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Other – Additional comments (attach additional sheets, if necessary): _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ Shadow Mountain - 73800 Ironwood St, Palm Desert, California 92260 Wednesday, December 29, 2021. December 21, 2021Dev. Services - Planning December 20, 2021 Page 46 STAFF REPORT SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ECONOMIC DEVELOPMENT MEETING DATE: February 24, 2022 PREPARED BY: Martin Alvarez, Director of Economic Development REQUEST: Adoption of a Resolution of the Board of the Successor Agency to the Palm Desert Redevelopment Agency Finding that Real Property Identified as the approximate +/-93 acres from APN 694- 310-002, 694-310-003, and a portion of 694-310-006 are Not Subject to Requirements of the Surplus Land Act. Recommendation That the Successor Agency Board: 1. Waive further reading and adopt Successor Agency Resolution No. SA- RDA-___, a resolution finding that the real property owned by the Successor Agency to the Palm Desert Redevelopment Agency (“SARDA”) located on the south side of Gerald Ford Drive, east of the Palm Desert Sheriff Station, identified as the approximate +/-93 acres from APN 694-310-002, 694-310- 003, and a portion 694-310-006 are not subject to requirements of the Surplus Land Act (SLA); 2. Authorize staff to submit a copy of this resolution to the California Department of Housing and Community Development (“HCD”); and 3. Authorize the Executive Director, its designee, and staff in consultation with SARDA legal counsel to take any other actions they deem appropriate or necessary and are consistent to effectuate the purpose of the proposed resolution. Background The subject property is owned by the SARDA and is required to be sold as part of the approved Long Range Property Management Plan. On January 13, 2022, the SARDA Board approved a Real Estate Option and Purchase and Sale Agreement and Joint Escrow Instructions (“PSA”) with Refuge Palm Desert, LLC. As part of the transaction the attached resolution is required to be adopted to fulfill the requirements of the California Surplus Land Act. The California Surplus Land Act (Government Code 54220 et seq.) (“SLA” or the “Act”) governs the sale of surplus land and requires local agencies to prioritize opportunities for certain uses of surplus land, including affordable housing Page 47 February 24, 2022 - Staff Report SARDA - Finding of APN 694-310-002, 694-310-003, & a portion of 694-310-006 Not Subject to Requirements of the Surplus Land Act Page 2 of 3 -2- 12812-0001\2546229v3.doc development. Land may be declared either “surplus land” or “exempt surplus land” by the legislative body of the local agency as supported by written findings. Effective January 1, 2020, the SLA defines a “local agency” to include the SARDA. However, Government Code Section 54234(b) provides that with respect to land that has been designated in a successor agency’s long-range property management plan for sale, the SLA, as it existed on December 31, 2019, will apply to the disposition of the land if (i) an exclusive negotiating agreement for disposition was entered into not later than December 31, 2020, and (ii) the disposition is completed not later than December 31, 2022. SARDA owns the property located on the south side of Gerald Ford Drive, east of the Palm Desert Sherriff Station, identified as the approximate +/-93 acres from APN 694- 310-002, 649-310-003, and a portion 694-310-006 (the “Property”). On December 9, 2015, the California Department of Finance (“DOF”) approved the SARDA’s Long Range Property Management Plan, as amended (“LRPMP”), which includes the Property. On December 8, 2020, the SARDA Board authorized the Executive Director to enter into an Exclusive Negotiating Agreement (“ENA”) with Refuge Palm Desert, LLC (“Developer”) for the purpose of negotiating the terms and conditions upon which SARDA would sell the Property to the Developer to develop the Project. The Developer met the conditions of the ENA and proposes to construct a single-family residential community. Currently, the Property is not subject to the requirements of the SLA. This is because SARDA entered into the ENA for the Property prior to December 31, 2020. If the Developer fails to close escrow by December 31, 2022, the Property will become subject to the requirements of the SLA. Staff recommends that the SARDA Board adopt a resolution (Attachment 1) declaring its finding that the Property is not subject to requirements of the SLA pursuant to Government Code Section 54234(b) and approve the related actions taken therein. Environmental Review Sales of surplus government property are exempt from the California Environmental Act (CEQA) pursuant to Title 14 Section 15312 of the California Code of Regulations. Page 48 February 24, 2022 - Staff Report SARDA - Finding of APN 694-310-002, 694-310-003, & a portion of 694-310-006 Not Subject to Requirements of the Surplus Land Act Page 3 of 3 -3- 12812-0001\2546229v3.doc Fiscal Analysis There is no immediate financial impact or budget action necessary as a result of the recommended actions. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER Robert W. Hargreaves City Attorney Martin Alvarez Martin Alvarez Director of Development Services N/A Janet M. Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager: L. Todd Hileman Attachments: 1. Resolution No. SA-RDA-___ 2. ENA, dated December 8, 2020 Page 49 Page 1 of 3 12812-0001\2574411v2.doc RESOLUTION NO. SA-RDA - ___ A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY FINDING THAT REAL PROPERTY OWNED BY THE SUCCESSOR AGENCY LOCATED IN THE CITY OF PALM DESERT ALONG GERALD FORD DRIVE AND IDENTIFIED AS THE APPROXIMATE +/-93 ACRES FROM APN 694-310-002, 694-310-003 AND A PORTION OF 694-310-006 IS NOT SUBJECT TO REQUIREMENTS OF THE SURPLUS LAND ACT, AND TAKING RELATED ACTIONS RECITALS: A. Pursuant to AB X1 26 (which became effective in June 2011) (as subsequently amended, the “Dissolution Act”) and the California Supreme Court’s decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231 (2011), the Palm Desert Redevelopment Agency (“Former Agency”) was dissolved as of February 1, 2012, and the City of Palm Desert elected to serve as the successor agency to the Former Agency (“Successor Agency”); and B. Pursuant to the Dissolution Act, properties of the Former Agency, including the property located on the south side of Gerald Ford Drive, east of the Palm Desert Sherriff Station, and identified as the approximate +/-93 acres from APN 694- 310-002, 694-310-003, and a portion of 694-310-006 in the City of Palm Desert (the “Property”) transferred to the Successor Agency by operation of law and the Successor Agency owns the Property in fee simple. The Property is described on Exhibit “A”, attached hereto; and C. On December 9, 2015, the California Department of Finance (“DOF”) approved the Successor Agency’s Long Range Property Management Plan, as amended (“LRPMP”), prepared pursuant to Health and Safety Code Section 34191.5, which includes the Property and requires the Successor Agency to sell the Property; and D. The Surplus Land Act (Government Code Sections 54220-54234) generally requires the governing board of a local agency that owns land in fee simple which is not necessary for the agency’s use to take formal action in a regular public meeting to declare that the land is surplus land or exempt surplus land prior to undertaking other action to dispose of the land; and E. As amended by Assembly Bill 1486, which took effect on January 1, 2020, the Surplus Land Act defines “local agency” for purposes of the Surplus Land Act to include the Successor Agency, but Government Code Section 54234(b) also provides that with respect to land that has been designated in a long range property management plan pursuant to Health and Safety Code Section 34191.5 for sale, the Surplus Land Act, as it existed on December 31, 2019, without regard to the changes Page 50 Page 2 of 3 12812-0001\2574411v2.doc made to the Surplus Land Act by Assembly Bill 1486, shall apply to the disposition of the land if (i) an exclusive negotiating agreement for disposition is entered into not later than December 31, 2020 and (ii) the disposition is completed not later than December 31, 2022; and F. The Successor Agency entered into an exclusive negotiating agreement (“ENA”) with respect to the disposition of the Property with Refuge Palm Desert, LLC, (“Refuge”) dated December 8, 2020; and G. The Successor Agency subsequently by letter to Refuge dated May 31, 2021, extended the term of the ENA through August 29, 2021; and H. The Successor Agency and Refuge entered into a First Amendment dated August 11, 2021, to ENA to extend the term for an additional thirty (30) days, until September 30, 2021; and I. The Successor Agency and Refuge entered into a Second Amendment dated September 30, 2021, to extend the expiration date by one hundred twenty (120) days, until March 30, 2022. NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. The above recitals are true and correct and are a substantive part of this Resolution. SECTION 2. The Board of Directors hereby finds that because the Successor Agency entered into the ENA with respect to the disposition of the Property prior to December 31, 2020, the disposition of the Property is not subject to the Surplus Land Act, provided that the disposition of the Property is completed not later than December 31, 2022. SECTION 3. The staff of the Successor Agency are hereby authorized to submit a copy of this Resolution to HCD. SECTION 4. The staff and officers of the Successor Agency are hereby authorized, jointly and severally, to take any other such actions as they deem necessary or proper to effectuate the purposes of this Resolution, and all actions previously taken are hereby ratified. SECTION 5. The Board of Directors hereby finds that appropriate environmental review pursuant to the California Environmental Quality Act will be completed as part of the process to dispose of the Property. [SIGNATURES TO FOLLOW ON TH NEXT PAGE] Page 51 Page 3 of 3 12812-0001\2574411v2.doc PASSED, APPROVED, AND ADOPTED this ____ day of _______, 2022. AYES: NOES: ABSENT: ABSTAIN: _________________________________ JAN C. HARNIK CHAIR OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ATTEST: _________________________________ NIAMH M. ORTEGA SECRETARY OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY Page 52 Exhibit A - Page 1 of 3 12812-0001\2574411v2.doc EXHIBIT “A” LEGAL DESCRIPTION OF SUBJECT PROPERTY The Land referred to herein below is situated in the City of Palm Desert, County of Riverside, State of California, and is described as follows: Approximately 93.171 acres known as the following in the City of Palm Desert, County of Riverside, California: • APN 694-310-002 (Approximately 40.47 acres) • APN 694-310-003 (Approximately 40.46 acres) • APN 694-310-006 (Future Remainder of Approximately 12.241 acres) A PORTION OF PARCEL 1 OF THAT CERTAIN CERTIFICATE OF COMPLIANCE NO. 88-1, RECORDED JUNE 1, 1988 AS INSTRUMENT NO. 146461 OF OFFICIAL RECORDS. IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, LOCATED IN THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 32, TOWNSHIP 4 NORTH, RANGE 6 EAST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1; THENCE NORTH 00°03'39" EAST, ALONG THE WESTERLY LINE OF SAID PARCEL 1, A DISTANCE OF 396.01 FEET; THENCE NORTH 89°55'1611 EAST, A DISTANCE OF 505.02 FEET; THENCE SOUTH 00°03'36" WEST, A DISTANCE OF 81.78 FEET; THENCE SOUTH 89°56'24" EAST, A DISTANCE OF 593.46 FEET; THENCE NORTH 00°01114" WEST, A DISTANCE OF 354.13 FEET; THENCE NORTH 89°54'53" EAST, A DISTANCE OF 220.83 FEET TO A POINT ON THE EASTERLY LINE OF SAID PARCEL 1; THENCE SOUTH 00°0110911 EAST, ALONG SAID EASTERLY LINE A DISTANCE OF 666.66 FEET TO THE SOUTHEAST CORNER OF SAID PARCEL 1; Page 53 Exhibit A - Page 2 of 3 12812-0001\2574411v2.doc THENCE SOUTH 89°5413311 WEST, ALONG THE SOUTHERLY LINE OF SAID PARCEL 1, A DISTANCE OF 1319.73 FEET, TO THE POINT OF BEGINNING; SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS-OF- WAY OF RECORD. CONTAINING 533,201 SQUARE FEET OR 12.241 ACRES MORE OR LESS. AS DEPICTED ON EXHIBIT 11811 ATTACHED HERETO AND MADE A PART HEREOF. THIS LEGAL DESCRIPTION DOES NOT DESCRIBE A LEGAL PARCEL OF LAND. IT IS NOT TO BE USED FOR CONVEYANCE OR FINANCING OR ANY OTHER PURPOSE THAT WOULD BE A VIOLATION OF THE CALIFORNIA SUBDIVISION MAP ACT. THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALM DESERT, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 1 (APN 694-310-003): PARCEL 3 OF THAT CERTAIN CERTIFICATE OF COMPLIANCE NO. 88-1, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED JUNE 01, 1988 AS INSTRUMENT NO. 146461 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: THAT PORTION OF SECTION 32, TOWNSHIP 4 SOUTH, RANGE 6 EAST, SAN BERNARDINO BASE AND MERIDIAN, AS SHOWN ON A RECORD OF SURVEY ON FILE IN BOOK 23, PAGE 77 OF RECORDS OF SURVEY, RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, LOCATED IN THE CITY OF PALM DESERT, MORE PARTICULARLY DESCRIBED AS FOLLOWS: THE NORTH HALF OF THE SOUTH HALF OF THE WEST HALF OF THE EAST HALF OF SAID SECTION 32. PARCEL 2 (APN 694-310-002): PARCEL 2 OF THAT CERTAIN CERTIFICATE OF COMPLIANCE NO. 88-1, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED JUNE 01, 1988 AS INSTRUMENT NO. 146461 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: Page 54 Exhibit A - Page 3 of 3 12812-0001\2574411v2.doc THAT PORTION OF SECTION 32, TOWNSHIP 4 SOUTH, RANGE 6 EAST, SAN BERNARDINO BASE AND MERIDIAN, AS SHOWN ON A RECORD OF SURVEY ON FILE IN BOOK 23, PAGE 77 OF RECORDS OF SURVEY, RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, LOCATED IN THE CITY OF PALM DESERT, MORE PARTICULARLY DESCRIBED AS FOLLOWS: THE SOUTH HALF OF THE NORTH HALF OF THE WEST HALF OF THE EAST HALF OF SAID SECTION 32. Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 RESOLUTION NO. 2022-____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, SETTING FORTH ITS FINDINGS AND AUTHORIZING THE DESTRUCTION OF PAPER RECORDS THAT HAVE BEEN DIGITALLY IMAGED FROM THE DEVELOPMENT SERVICES DEPARTMENT (PLANNING/LAND DEVELOPMENT DIVISION), TO RELY ON THE ELECTRONIC RECORD AS THE OFFICIAL RECORD WHEREAS, the Development Services Department of the City of Palm Desert, California, has imaged, in compliance with applicable state laws, official files, records, exhibits, permits, and other documents of said department; and WHEREAS, the images have been quality checked, and contain all significant details from the original and are an adequate substitute for the original document for all purposes for which the document was created or maintained; and WHEREAS, indexing has been verified/quality checked; and WHEREAS, the images have been placed on optical media that cannot be altered or changed (DVD-r, CD-R, or WORM), microfilm or microfiche; and WHEREAS, the optical media that cannot be altered or changed (DVD-r, CD-R, or WORM), microfilm or microfiche, has been stored in a safe and separate location. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, as follows: Section 1. That the above recitations are true and correct and constitute the findings of the Coty Council in this matter. Section 2. That it does hereby approve the destruction of the paper version of the documents, records or files as set forth in Exhibit “A” and “B,” attached hereto, to rely on the images as the “Official Record” and will be retained for the applicable retention period. Section 3. That paper files dated 1975 to 2017 containing adjustments, change of zones, conditional use permits, general files, general plan amendments, miscellaneous, parcel map waivers, precise plans, RV permits, sign applications, tentative parcel maps, and variances have exceeded its retention period (Exhibit “A”). Page 65 RESOLUTION NO. 2022-____ 2 PASSED, APPROVED, AND ADOPTED at a regular meeting of the Palm Desert City Council held on this 24th day of February 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR ATTEST: NIAMH M. ORTEGA, DEPUTY CITY CLERK CITY OF PALM DESERT, CALIFORNIA Page 66 RESOLUTION NO. 2022-____ 3 EXHIBIT “A” DESTRUCTION OF FILES FROM THE DEVELOPMENT SERVICES DEPARTMENT (PLANNING/LAND DEVELOPMENT DIVISION) THAT HAVE EXCEEDED ITS RETENTION PERIOD RETENTION NO. ADJUSTMENTS, CONDITIONAL USE PERMITS, MISCELLANEOUS, PARCEL MAP WAIVERS, PRECISE PLANS, RV PERMITS, SIGN PERMITS, AND TENTATIVE PARCEL MAPS (1991-2007) BOX NO. D-PL-36 PL-018 78001 Country Club Drive FOREMOST SELF STORAGE & AUTO SERVICE PP/CUP 99-21 2000 PL-017 78001 Country Club Drive - SURE SAVE SELF STORAGE SA 02-04 - 2002 PL-018 78001 Country Club Drive (WASHINGTON/HARRIS) SURE SELF STORAGE PMW 02-00 2002 PL-017 78005 Country Club Drive - MOBIL OIL 4529SA - 1995 PL-018 78005 Country Club Drive - MOBIL CAR WASH CUP 00-14 - 2002 PL-017 78005 Country Club Drive - EXXON MOBIL BLUE RHINO MISC - 2007 PL-017 78005 Country Club Drive - MOBIL SA 02-96 - 2002 PL-017 78010 Country Club Drive #D - FOOD MART AND MEXICAN GRILL - 2006 PL-017 78078 Country Club Drive - WENDYS SA 04-177 - 2005 PL-017 78078 Country Club Drive - JACK IN THE BOX CUP 99-1 PP 9-4 -1999 PL-018 76196 COVENTRY CIR - ADJ 04-01 - 2004 PL-018 74092 Covered Wagon Trail - HEUSINKVELD ADJ 02-04 - 2004 PL-017 74092 Covered Wagon Trail - MACARTHUR - 2007 PL-017 74200 Covered Wagon Trail - RV 99-2 - 1999 PL-017 74210 Covered Wagon Trail - MISC 04-36 - 2004 PL-017 74275 Covered Wagon Trail - RV 99-7 - 1999 PL-017 74305 Covered Wagon Trail - WATERS RV 91-4 - 1991 PL-018 890 CRESCENT FALLS - ANDERSON/STANTEC PMW 06-25 - 2006 PL-018 359 CREST LAKE DR - PMW 02-17 - 2002 PL-018 888 CRESCENT FALLS - PMW 05-10 - 2005 PL-017 73116 CROSBY LANE - MISC 98-2 - 1998 PL-017 73120 CROSBY LANE - MISC - 1997 PL-018 CROSBY LANE & SUNROSE LANE - TPM 33943 - 2005 RETENTION NO. ADJUSTMENTS, CHANGE OF ZONES, CONDITIONAL USE PERMITS, GENERAL PLAN AMENDMENTS, MISCELLANEOUS, PARCEL MAP WAIVERS, PRECISE PLANS, SIGN APPLICATIONS, TENTATIVE PARCEL MAPS, AND VARIANCES (1989-2007) BOX NO. D-PL-37 PL-018 73420 DALEA - GERALD KNUDSON PMW 06-22 - 2006 PL-017 74515 74525 DAYLILY CIR - MISC 98-3 - 1998 PL-017 74560 DAYLILY CIR - OCHA DESIGN MISC 04-41 - 2004 PL-017 72795 DAVIS RD - MISC 99-1 - 1999 PL-018 72820 DAVIS RD - DAVID TAYLOR ADJ 03-02 - 2002 PL-017 73660 HIGHWAY 111 - COMPACT RADIO TELEPHONE 1735 SA - 1990 PL-018 DE ANZA/PORTOLLA RDA PMW 03-02 - 2003 PL-018 73601 DE ANZA WAY - TPM 28630 ADJ 97-8 - 1997 PL-017 73725 DE ANZA WAY- RATLIFF MISC 04-14 - 2004 PL-017 74058 DE ANZA WAY - MISC - 2003 PL-017 74095 DE ANZA WAY - MISC - 1989 PL-018 74231-74251 DE ANZA WAY - KELLER/SALERNO PMW 03-15 - 2003 PL-018 74251 DE ANZA - ANNE SALERNO MISC 06-21 VAR 06-04 - 2006 PL-018 74231 DE ANZA - PATRICIA J KELER/SALERNO PMW 03-15 - 2003 PL-017 74290 DE ANZA - KEN STEMMER MISC 03-03 - 2003 PL-018 74431 DE ANZA - ABBAS JUDITH KAMOUIS CUP 05-04 VAR 05-02 - 2007 PL-018 DEEP CANYON ROAD & HIGHWAY 111 - LUCKYS - 4709 SA PP 94-07 - 1996 Page 67 RESOLUTION NO. 2022-____ 4 PL-012/PL- 018/PL-025 DEEP CANYON ROAD & FRED WARING - G.K. RANNEY INC GPA 86-1 CZ 86-2 PP 86-7 - 1985 PL-018 43775 DEEP CANYON ROAD - PMW 02-25 - 2003 PL-018 43200 DEEP CANYON ROAD - MANOOKIAN TT 25102 - 1999 RETENTION NO. GENERAL FILES (1991-2017) BOX NO. D-PL-358 CW-034 ALTAMIRA (CORNISHE) CONFIDENTIAL FILE 1 - 1991 CW-034 ALTAMIRA (CORNISHE) CONFIDENTIAL FILE 2 - 1992 CW-034 ALTAMIRA (CORNISHE) CONFIDENTIAL FILE 3 - 1992 CW-025 ASSESSMENT 94-3 - 1995 CW-025 AYLAIAN CORRESPONDENCE/MEMOS - 2010 CW-025 AYLAIAN CORRESPONDENCE/MEMOS - 2011 CW-034 BABAI LITIGATION - 2001 CW-025 BIGHORN BUCKHORN -2003 CW-025 BIGHORN BOOSTER STATION - 2001 CW-025 BIKEWAYS - 2000 PL-013 BLACKROCK UNIVERSITY NEIGHBORHOOD SPECIFIC PLAN - 2017 CW-025 BLM VISITORS CENTER PROJECT - 2011 PL-013 CAL STATE MASTER PLAN ADVISORY COMMITTEE - 1995 PL-013 CAL STATE MASTER PLAN FILE 1 - 1998 PL-013 CAL STATE NASTER PLAN FILE 2 - 1995 RETENTION NO. GENERAL FILES (1990-2015) BOX NO. D-PL-359 CW-025 CFD 2005-01 UNIVERSITY PARK - 2006 CW-032 CHILDCARE GRANT - BOEHM CHILD CENTER - 2005 CW-032 CHILDCARE GRANT - TOT STOP - 2005 CW-032 CHILDCARE GRANT - PALM DESERT PRESBYTERIAN - 2006 CW-032 CHILDCARE GRANT - YMCA - 2007 CW-025 CHILDCARE MITIGATION STUDY - 2005 CW-025 COACHELLA VALLEY MSHCP - 2008 CW-025 COOK STREET - BIKE LANES - 2009 CW-025 CORNISHE CONFIDENTIAL - 619 INDIAN COVE/LALIBERTE PROPERTY) - 2009 CW-025 CORNISHE MISC - 1991 CW-025 CULBERTSON AND ADMAS (BIGHORN) - 1997 CW-025 CULBERTSON AND ADMAS (BIGHORN/ALTMIRA) - 1990 CW-025 D. INGRAM - 2008 CW-025 DESERT SANDS UNIFIED SCHOOL DISTRICT: SCHOOL FEES - 2012 CW-025 DRIVE-THROUGH RESTAURANTS - 2013 CW-025 EL PASEO VILLAGE ESTOPPEL CERTIFICATES - 2011 CW-025 EL PASEO REVITALIZATION - 2009 CW-025 ENTERTAINMENT ORDINANCE CTE MEETING - 2008 CW-025 FEE SCHEDULE FILE 3 - 2004 CW-025 FISCAL ANALYSIS LAND USE CHANGES - WILLDAN FINANCIAL - 2014 CW-025 FINANCIAL ANALYSES AFFORDABLE HOUSING - 2015 CW-025 FRINGE TOAD LIZARD - 2006 CW-025 FROMME PURCHASE AGREEMENT & JOINT ESCROW - 2009 CW-025 FOOD TRUCK ORDINANCE - 2015 CW-025 FURNITURE - 2007 CW-025 FURNITURE LAURI'S OFFICE - 2007 Page 68 RESOLUTION NO. 2022-____ 5 RETENTION NO. GENERAL FILES (1975-2014) BOX NO. D-PL-360 CW-025 GARDENS EL PASEO - 2008 PL-012 GENERAL PLAN 1974 - 1975 PL-012 GENERAL PLAN 1980 - 1980 PL-012 GENERAL PLAN 2004 - 2004 PL-012 GENERAL PLAN AMENDMENT 92-1 - 1997 PL-012 GENERAL PLAN AMENDMENT 1975 PL-012 GENERAL PLAN CORRESPONDENCE - 1981 PL-012 GENERAL PLAN DETERMINATION OF COMPLIANCE - 1980 PL-012 GENERAL PLAN AMENDMENT BILLBOARDS - 2007 CW-025 GOING OUT OF BUSINESS SALES - 2009 CW-025 HILLSIDE ACQUISITIONS CONFIDENTIAL - 2011 CW-025 HOUSING ELEMENT - TERRA NOVA - 2011 CW-025 INDIAN SPRINGS MOBILE HOME PARK CONVERSION - 2005 CW-025 IRONWOOD COUNTRY CLUB - 2008 CW-025 KUYKENDALL - 2009 CW-025 KUYKENDALL NELSON SNELLENBERGER - 2011 PL-002 LAFCO: CATHEDRAL CITY SPHERE OF INFLUENCE/THOUSAND PALMS - 2014 PL-002 LAFCO: DUBOIS ANNEXATION - 1977 PL-002 LAFCO: SOI BERMUDA DUNES FILE 1 - 1996 PL-002 LAFCO: SOI BERMUDA DUNES FILE 2 - 2001 PL-002 LAFCO: SOI BERMUDA DUNES FILE 3 - 2007 PL-002 LAFCO: SOI BERMUDA DUNES FILE 4 - 2007 PL-002 LAFCO: SOI BERMUDA DUNES FILE 5 - 2013 Page 69 [This page has intentionally been left blank.] Page 70 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S OFFICE MEETING DATE: February 24, 2022 PREPARED BY: Heather Horning, Assistant to the City Manager REQUEST: Approve a Resolution adopting City Council goals and priorities for the 2022 calendar year. Recommendation By Minute Motion, approve Resolution No. 2022- adopting City Council goals and priorities for the 2022 calendar year. Background On February 7, 2022, the City Council had a goal setting session to review and discuss priorities for the 2022 calendar year. At this meeting, department heads presented on their department’s top accomplishments for 2021 and their major initiatives for 2022, followed by Council Members presenting their proposed goals and priorities for 2022. The City Council identified eight goals and priorities for 2022 including: Cal State San Bernadino Palm Desert Campus: Advocate for the creation of a Cal State San Bernadino Palm Desert Campus or other education related uses of the 170 acres the City provided for this purpose. Westfield Mall Redevelopment: Conduct market and land use planning studies to evaluate options for adaptive re-use of the Westfield Mall resulting in a Mall Master Plan. Active Transportation Projects: Analyze relevant studies to develop a 5-year Active Transportation Project Plan that includes opportunities to enhance CV Link, PD Link/bike lanes, and incorporate these projects into the 5-year CIP budget. North Sphere Planning/North Sphere Park: Analyze the recommendations of the CBRE study for potential changes in land use patterns in the north sphere. Design and build a North Sphere Park. Gather community input and use to refine planning. Explore Annexation North of I-10: Work with stakeholders to explore the annexation of the area north of the I-10 Freeway. Environmental Initiatives: Develop a 5-year plan of Environmental Initiatives including the consideration of the following or similar items: environmentally friendly landscaping, green building materials, solar, alternative fuel vehicles for the City fleet, water and energy conservation, and recycling. Work with the Resource Preservation and Enhancement Committee to evaluate and implement initiatives. Page 71 Staff Report – Approve Resolution Approving Goals and Priorities for 2022 February 24, 2022 Page 2 of 3 Public Safety Improvements: Explore new technology, review budgets, and gain efficiencies for improved public safety services. Conduct a review of current law enforcement contract and fire services. Broadband: Explore the feasibility of municipal broadband in Palm Desert and the Coachella Valley. A spreadsheet that contains the lead departments and Committees/Subcommittees assigned to these goals/priorities, as well as next steps for each is attached as Exhibit A to the Resolution. Staff will report updates on goals through a Quarterly Report that will be distributed to the City Council and regular updates will be included in the Weekly Administrative Update Report as available. Other priorities that were discussed at the goal setting but were not prioritized for this year include the following: Discover Palm Desert Visitor Center: Build a Visitor Center on the north side of San Pablo as part of "Envision San Pablo". (Although this was not identified as a 2022 goal/priority, the design for this project is currently in progress) El Paseo: Continue working on the "reimagination" of El Paseo to make is more pedestrian and Bike friendly. School District Boundary Changes: Work with Palm Springs Unified School District and Desert Sands Unified School District to come to an agreement to annex the area north of Frank Sinatra into Desert Sands Unified School District. Community Public Health: Build a Public Health and Mental Health Coalition that improves the quality of life for residents and unsheltered visitors, while connecting with higher education partners to supplement clinical experience required for licensure. San Pablo Pedestrian Safety Lighting: Ensure pedestrian safety is preserved along San Pablo with increased diurnal and nocturnal lighting that increases visibility with motorists. (Although this was not identified as a 2022 goal/priority, the Public Works department is assessing this currently) Landscape Pallet Standards: Refine and implement landscape pallet with a focus on positive environmental impact. Block Parties: Plan a block party twice a year to engage the public face to face. Staff recommends approving the attached Resolution to adopt the 2022 City Council Goals and Priorities. Page 72 Staff Report – Approve Resolution Approving Goals and Priorities for 2022 February 24, 2022 Page 3 of 3 Fiscal Analysis There is no fiscal impact with this action, however, the fiscal impact of implementing the goals and priorities will be incorporated into the Fiscal Year 2022-23 Budget. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney N/A L. Todd Hileman City Manager Janet M. Moore Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman Attachments A. Resolution No. 2022 - Page 73 RESOLUTION NO. 2022-_____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ADOPTING CITY COUNCIL GOALS AND PRIOIRITIES FOR THE 2022 CALENDAR YEAR. WHEREAS, the City Council convened for a goal setting session on February 7, 2022; and WHEREAS, the purpose of the goal setting session was to review and discuss priorities for 2022; and WHEREAS, the City Council prioritized eight goals and priorities to focus on for the 2022 calendar year; and NOW, THEREFORE, IT IS HEREBY RESOLVED, ORDERED AND FOUND by the City Council of the City of Palm Desert, California, as follows: 1. That the above recitations are true and correct and constitute the findings of the City Council; and 2. That the 2022 City Council Goals and Priorities are hereby approved and adopted as shown in Exhibit A attached hereto and incorporated herein. PASSED, APPROVED, AND ADOPTED this 24th day of February 2022, by the City Council of the City of Palm Desert, California by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR ATTEST: NIAMH M. ORTEGA, DEPUTY CITY CLERK CITY OF PALM DESERT, CALIFORNIA Page 74 Goals Description Lead Team Assigned Committees/ Subcommittees Involved Next Steps Cal State San Bernadino Palm Desert Campus Advocate for the creation of a Cal State San Bernadino Palm Desert Campus or other education related uses of the 170 acres the City provided for this purpose. Development Services City Manager's Office CV Priority One Explore legislative solutions and evaluate with the City Council by May 2022. Westfield Mall Redevelopment Conduct market and land use planning studies to evaluate options for adaptive re-use of the Westfield Mall resulting in a Mall Master Plan. Development Services City Manager's Office Contract with a consulting firm for the development of the Mall Master plan. Hold a study session in the 3rd Quarter to review and discuss. Annexation North of I-10 Work with stakeholders to explore the annexation of the area north of the I-10 Freeway. Development Services City Manager's Office Annexation Subcommittee Take Annexation Study to the City Council for discussion in 2nd Quarter. Broadband Explore the feasibility of municipal broadband in Palm Desert and the Coachella Valley. Development Services Public Works Economic Development Subcommittee Commence Request for Information regarding feasibility, development and operation of broadband in 2nd Quarter. Environmental Initiatives Develop a 5-year plan of Environmental Initiatives including the consideration of the following or similar items: environmentally friendly landscaping, green building materials, solar, alternative fuel vehicles for the City fleet, water and energy conservation, and recycling. Work with the Resource Preservation and Enhancement Committee to evaluate and implement initiatives. Development Services Public Works Resource Preservation and Enhancement Committee (RPEC) Hold a study session by the end of the 2nd Quarter of 2022 to refine the areas of focus. Work with RPEC to evaluate initiatives and develop a 5-year plan for implementation of initiatives and incorporate into the budget. North Sphere Planning/North Sphere Park Analyze the recommendations of the CBRE study for potential changes in land use patterns in the north sphere. Design and build a North Sphere Park. Gather community input and use to refine planning. Development Services Public Works Parks and Recreation Commission, Economic Development Subcommittee Revisit the CBRE study in May to determine if it will need to be revised to incorporate any potential changes in plans for a Cal State San Bernadino Palm Desert Campus. A RFP for park design will be completed in Q2, staff will gather community feedback when the design is complete and review in Q4. Public Safety Improvements Development Services City Manager's Office Administrative Services Active Transportation Projects Exhibit A City of Palm Desert A joint study session with Public Safety Commission and City Council to review law enforcement contract will be held in 2nd Quarter. Analyze the effectiveness of CSOs and evaluate the budget impacts. Request bids for ALPR and incorporate into the budget. Conduct Matrix Study. Study session in May to review improvements and efficiencies. A Subcommittee meeting will be held in March to provide an update on the Active Transportation Project Program. A Study Session will be held in April regarding this program. Public Safety Commission Active Transportation Project (ATP) Subcommittee 2022 City Council Goals and Priorities Explore new technology, review budgets, and gain efficiencies for improved public safety services. Conduct a review of current law enforcement contract and fire services. Analyze relevant studies to develop a 5-year Active Transportation Project Plan that includes opportunities to enhance CV Link, PD Link/bike lanes, and incorporate these projects into the 5-year CIP budget. Public Works Page 75 [This page has intentionally been left blank.] Page 76 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S OFFICE MEETING DATE: February 24, 2022 PREPARED BY: Heather Horning, Assistant to the City Manager Veronica Chavez, Finance Manager REQUEST: Approve a Resolution to oppose Initiative 21-0042A1 Recommendation By Minute Motion, approve Resolution No. 2022- opposing Initiative 21-0042A1. Background In 2018, the “Tax Fairness, Transparency and Accountability Act” or AG# 17-0050 Amdt. #1 (Attachment B), was being circulated to qualify for the November 2018 ballot. This initiative would have drastically limited local revenue authority. The League of California Cities and its coalition opposed this initiative. The initiative was withdrawn from the ballot in June 2018. On Jan. 4, 2022, the California Business Roundtable filed the Taxpayer Protection and Government Accountability Act or AG# 21-0042A1 (Attachment C). This initiative proposes new and stricter rules than the measure filed in 2018 regarding raising state and local taxes, fees, assessments, and property-related fees. In its current form, it proposes to take a number of actions that could negatively impact the City including: • Eliminates the ability to adopt a special tax by initiative with 50% voter approval, despite recent case law to the contrary. • Restricts the ability to charge fees for services to “actual cost,” which removes discretion from local agencies with respect to how to allocate unrestricted revenues (i.e. this could impede the ability to offer low-income discounts or subsidies for services provided). • Requires that fees for use of government property be “reasonable,” which is currently an issue being litigated at the Supreme Court and may impact franchise fees and tolls. • Increases evidentiary burden to “clear and convincing evidence.” Currently, the standard is “preponderance of the evidence” for non-property related fees, or “substantial evidence” for Proposition 218 fees. This will increase the cost of litigation, and make it even more difficult for agencies to adopt rates and defend them once they are in place. • Creates new procedural requirements for adopting fees and taxes. When the initiative was first introduced in 2021, it had additional limitations on the ability to adopt special taxes, parcel taxes, and form community facilities districts. With pressure from the development community, many of those provisions have been removed from the latest draft. However, the initiative in its current draft still has significant impact for the City. Cal Cities, along with a broad coalition of local governments, labor and public safety leaders, infrastructure advocates, and businesses, strongly oppose this initiative. Staff recommends approving the attached Resolution opposing Initiative 21-0042A1. Page 77 Staff Report – Approve Resolution Opposing Initiative 21-0042A1 February 24, 2022 Page 2 of 2 Fiscal Analysis There is no immediate fiscal impact with opposing this initiative, however, if this initiative passes it would negatively impact the City’s revenue. It is unclear at this time the full extent of the negative impact. The fundamental provision of the proposed initiative would be to designate every levy, charge, or exaction of any kind imposed by a local agency as either a tax or an “exempt charge.” Exempt charges are very specifically defined and actual costs for government services. Every revenue measure not defined as an exempt charge would be subject to voter approval requirements, some of which the initiative newly imposes or increases. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER RWH Robert W. Hargreaves City Attorney N/A L. Todd Hileman City Manager Janet M. Moore Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman Attachments A. Resolution No. 2022 opposing Initiative 21-0042A1 B. AG# 17-0050 Amdt. # 1 (Tax Fairness, Transparency, and Accountability Act) C. AG# 21-0042A (Taxpayer Protection and Government Accountability Act) Page 78 RESOLUTION NO. 2022-_____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, TO OPPOSE INITIATIVE 21- 0042A1 WHEREAS, the measure creates new constitutional loopholes that allow corporations to pay far less than their fair share for the impacts they have on our communities, including local infrastructure, our environment, water quality, air quality, and natural resources; and WHEREAS, the measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund local services and infrastructure, and would limit voter input by prohibiting local advisory measures where voters provide direction on how they want their local tax dollars spent; and WHEREAS, the measure makes it much more difficult for state and local regulators to issue fines and levies on corporations that violate laws intended to protect our environment, public health and safety, and our neighborhoods; and WHEREAS, the measure puts billions of dollars currently dedicated to state and local services at risk, and could force cuts to public schools, fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services to support homeless residents, mental health services, and more; and WHEREAS, the measure would also reduce funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, and utilities. NOW, THEREFORE, IT IS HEREBY RESOLVED, ORDERED AND FOUND by the City Council of the City of Palm Desert, State of California, that the City of Palm Desert opposes Initiative 21-0042A1. BE IT FURTHER RESOLVED that the City of Palm Desert will join the NO on Initiative 21-0042A1 coalition, a growing coalition of public safety, labor, local government, infrastructure advocates, and other organizations throughout the state. BE IT FURTHER RESOLVED that staff is directed to email a copy of this adopted resolution to the League of California Cities at BallotMeasures@calcities.org Page 79 Resolution No. 2022-_______ PASSED, APPROVED, AND ADOPTED on this 24th day of February 2022 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR ATTEST: NIAMH M. ORTEGA, DEPUTY CITY CLERK CITY OF PALM DESERT, CALIFORNIA Page 80 Attachment B Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 BELL, McANDREWS & HILTACHK, LLP Anabel Renteria Initiative Coordinator ATTORNEYS AND COUNSEL-ORS AT I.AW 455 C APITO L MALL, S UITE 600 SACRAMENTO, CALIFOE=INIA 95014 (916) 44;a-7757 FA X [916) 44-;a-77 59 www.bmhlaw.c om January 4, 2022 2 1 -0 0 4 2 RECEI VED JAN O 4 2022 Office of the Attorney General State of California INITIATIVE COO RDINATOR ATTORNEY GENERAL'S OFFICE PO Box 994255 Sacramento, CA 94244-25550 Re: Initiative 21-0042 -Amendment Number One Dear Initiative Coordinator: Pursuant to subdivision (b) of Section 9002 of the Elections Code, enclosed please find Amendment #1 to Initiative No. 21-0042 "The Taxpayer Protection and Government Accountability Act." The amendments are reasonably germane to the theme, purpose or subject of the initiative measure as originally proposed. I am the proponent of the measure and request that the Attorney General prepare a circulating title and summary of the measure as provided by law, using the amended language. Thank you for your time and attention processing my request. Sincerely, ~~ Thomas W. Hiltachk Attachment C Page 95 2 1 -0 0 4 2 Arndt. # / The Taxpayer Protection and Government Accountability Act [Deleted codified text is denoted in strikeout. Added codified text is denoted by italics and underline.] Section 1. Title This Act shall be known, and may be cited as, the Taxpayer Protection and Government Accountability Act. Section 2. Findings and Declarations (a) Californians are overtaxed. We pay the nation's highest state income tax, sales tax, and gasoline tax. According to the U.S. Census Bureau, California's combined state and local tax burden is the highest in the nation. Despite this, and despite two consecutive years of obscene revenue surpluses, state politicians in 2021 alone introduced legislation to raise more than $234 billion in new and higher taxes and fees. (b) Taxes are only part of the reason for California's rising cost-of-living crisis. Californians pay billions more in hidden "fees" passed through to consumers in the price they pay for products, services, food, fuel, utilities and housing. Since 2010, government revenue from state and local "fees" has more than doubled. (c) California's high cost of living not only contributes to the state's skyrocketing rates of poverty and homelessness, they are the pushing working families and job-providing businesses out of the state. The most recent Census showed that California's population dropped for the first time in history, costing us a seat in Congress. In the past four years, nearly 300 major corporations relocated to other states, not counting thousands more small businesses that were forced to move, sell or close. (d) California voters have tried repeatedly, at great expense, to assert control over whether and how taxes and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These measures include Proposition 13 (1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition 26 (2010). (e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and accountability, have been weakened and hamstrung by the Legislature, government lawyers, and the courts, making it necessary to pass yet another initiative to close loopholes and reverse hostile court decisions. Section 3. Statement of Purpose (a) In enacting this measure, the voters reassert their r ight to a voice and a vote on new and higher taxes by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees and other charges are passed or rejected by the voters themselves or a governing body elected by voters and not unelected and unaccountable bureaucrats. (b) Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency and accountability over higher taxes and charges by requiring any tax measure placed on the ballot- 1 Page 96 either at the state or local level-to clearly state the type and rate of any tax, how long it will be in effect, and the use of the revenue generated by the tax. (c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarify that any new or increased form of state government revenue, by any name or manner of extraction paid directly or indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the Governor to ensure that the purposes for such charges are broadly supported and transparently debated. (d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that taxpayers have the right and ability to effectively balance new or increased taxes and other charges with the rapidly increasing costs Californians are already paying for housing, food, childca re, gasoline, energy, healthcare, education, and other basic costs of living, and to further protect the existing constitutional limit on property taxes and ensure that the revenue from such taxes remains local, without changing or superseding existing constitutional provisions contained in Section 1{c) of Article XIII A. (e) In enacting this measure, the voters also additionally intend to reverse loopholes in the legislative two- thirds vote and voter approval requirements for government revenue increases created by the courts including, but not limited to, Cannabis Coalition v. City of Upland, Chamber of Commerce v. Air Resources Board, Schmeer v. Los Angeles County, Johnson v. County of Mendocino, Citizens Assn. of Sunset Beach v. Orange County Local Agency Formation Commission, and Wilde v. City of Dunsmuir. Section 4. Section 3 of Article XIII A of the California Constitution is amended to read: Sec. 3(a} Every levy, charge. or exaction of any kind imposed by state law is either a tax or an exempt charge. illlJ1l ~ Any change in state statute Jaw which results in any taxpayer paying a new or higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, and submitted to the electorate and approved by a maiority vote, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property, may be imposed. Each Act shall include: (A) A specific duration of time that the tax will be imposed and an estimate of the annual amount expected to be derived from the tax. (BJ A specific and legally binding and enforceable limitation on how the revenue from the tax can be spent. If the revenue from the tax can be spent for unrestricted general revenue purposes. then a statement that the tax revenue can be spent for "unrestricted general revenue purposes " shall be included in a separate, stand-alone section . Any proposed change to the use of the revenue from the tax shall be adopted by a separate act t hat is passed by not less than two-thirds of all members elected to each of the two houses of the Legislature and submitted to the electorate and approved by a maiority vote. (2) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall. for each measure providing for the imposition of a tax, including a measure proposed by an elector pursuant to Article II, include: {A) The type and amount or rate of the tax; (BJ The duration of the tax: and 2 Page 97 (CJ The use of the revenue derived from the tax. (c} Any change in state law which results in any taxpayer paying a new or higher exempt charge must be imposed by an act passed by each of the two houses of the Legislature. Each act shall specify the type of exempt charge as provided in subdivision (e ), and the amount or rate of the exempt charge to be imposed. Ml._fbt As used in this section and in Section 9 of Article II, "tax" means every aA1f levy, charge, or exaction of any kind imposed by the State state law that is not an exempt charge. e1<eept the follo•Ning: (e) As used in this section. "exempt charge" means only the following: (1) a el:iarge imposes fer a s1=1eeifie eenefit eonferreEl or pri'+'ilege granteEl aireetly to tl:ie 13ayor tl:iat is not 1=1ro>viaeEl to tl:iose not et:iargeEI, anEI whiel:i aoes not e1<ceeEl tl:ie reasonal3Ie costs to tl:ie State of eonferring the benefit or granting the pri¥ilege to the 1=1a¥OF. ill {-2+ A reasonable charge irnposeEl for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the rnasonable actual costs to the State of providing the service or product to the payor. f.11 ~ A charge in,poseEl for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. (3) A levy, charge. or exaction collected from local units of government. health care providers or health care service plans that is primarily used by the State of California for the purposes of increasing reimbursement rates or payments under the Medi-Cal program, and the revenues of which are primarily used to finance the non-federal portion of Medi-Cal medical assistance expenditures. (4) A reasonable charge iR'l13oseEl for entrance to or use of state property, or the purchase. rental, or lease of state property, except charges governed by Section 15 of Article XI. (5} A fine, or penalty, or other monetary el:large including any applicable interest for nonpayment thereot imposed by the judicial branch of government or the State, as a result of a state administrative enforcement agency pursuant to adiudicatorv due process, to punish a violation of law. (6} A levy, charge, assessment, or exaction collected for the promotion of California tourism pursuant to Chapter 1 (commencing with Section 13995) of Part 4.7 of Division 3 of Title 2 of the Government Code. flL~Any tax or exempt charge adopted after January 1, 2022 ~, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted B'l the begislatuFe anel signea into law ey tl:ie <iio¥ernoF in compliance with the requirements of this section. [gl[.JlJG:} The State bears the burden of proving by a preponEleranee oftl:le clear and convincing evidence that a levy, charge, or other exaction is an exempt charge and not a tax. The State bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. ,tR-a-t tl:ie amouRt is RO n,ore tl:ian neeessary to cover the reasonable costs of the go•.•emn,ental actii,•i:t>,• ane 3 Page 98 that the manner in •Nhiel.:i these cests are allecated ts a pa·1er bear a fair er reasenable relatienshi13 ts the 13a·1or's b1:1relens on, or benefits reeei11eel from, the go•.ieFRmental actit.iit'( (2) The retention ofrevenue by, or the payment to. a non-governmental entity ofa levv. charge, or exaction of any kind imposed by state law, shall not be a factor in determining whether the levy. charge, or exaction is a tax or exempt charge. (3) The characterization of a levy, charge, or exaction of any kind as being voluntary, or paid in exchange for a benefit, privilege, allowance, authorization, or asset, shall not be a factor in determining whether the levy, charge, or exaction is a tax or an exempt charge. /4} The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge. (h) As used in this section: (1) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor, and {ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including, but not limited to taxes, other exempt charges, grants, and state or federal funds received to provide such service or product. (2) "Extend" includes, but is not limited to, doing any of the following with respect to a tax or exempt charge: lengthening its duration. delaying or eliminating its expiration, expanding its application to a new territory or class ofpayor, or expanding the base to which its rate is applied. (3) "Impose" means adopt, enact, reenact, create, establish, collect, increase or extend. (4) "State law" includes, but is not limited to. any state statute, state regulation, state executive order. state resolution, state ruling, state opinion Jetter, or other legal authority or interpretation adopted, enacted. enforced, issued, or implemented by the legislative or executive branches of state government. "State law" does not include actions taken by the Regents of the University of California, Trustees of the California State University, or the Board of Governors of the California Community Colleges. Section 5. Section 1 of Article XIII C of the California Constitution is amended, to read: Sec. 1. Definitions. As used in this article: {a) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor. and {ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including, but not limited to taxes. other exempt charges, grants, and state or federal funds received to provide such service or product. (b) "Extend" includes, but is not limited to. doing any of the following with respect to a tax. exempt charge, or Article XIII D assessment. fee, or charge: lengthening its duration, delaying or eliminating its expiration. expanding its application to a new territory or class of payor, or expanding the base to which its rate is applied. 4 Page 99 .lfl..W 11General tax" means any tax imposed for general governmental purposes. (d} "Impose" means adopt, enact, reenact, create, establish, collect, increase, or extend. {clJb} "Local government" means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity, or an elector pursuant to Article fl or the initiative power provided by a charter or statute. (f) "Local law" includes. but is not limited to, any ordinance, resolution, regulation. ruling, opinion letter, or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by a local government. {gl_{t} "Special district" means an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries including, but not limited to, school districts and redevelopment agencies. f11L{d} "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund. 111 i@} As used in this article, and in Section 9 of Article II, "tax" means every aRV-levy, charge, or exaction of any kind, imposed by a local go,;ernmeRt law that is not an exempt charge., exeept tl=le fellowiRg: (i) As used in this section, "exempt charge" means only the following: (1) A cl=large imposeel fer a speeifie beAefit eoAferreel or pri,;ilege graAteel eliFeetl')' to tl=le pa1,ior tl=lat is Rot pre1,•ieleel to these Rot ehargea, aA£l which £lees Rot exeeeel tl=le reaseAable costs to tl=le loeal gm,·ernFAeAt of conferriAg the beAefit or graAting tl:1e pri¥ilege. ill R} A reasonable charge imposes for a specific local government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasoAable actual costs to the local government of providing the service or product. fl1 WA charge im13ose£l for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. W {4t A reasonable charge imposeel for entrance to or use of local government property, or the purchase, rental, or lease of local government property. Ml. fSt A fine, or penalty, or other FAOA@tar,· eharge including any applicable interest for nonpayment thereat imposed by the judicial branch of government or a local government administrative enforcement agency pursuant to adiudicatorv due process, as a res1,1lt of to punish a violation of law. ill -f6t A charge imposed as a condition of property development. No levv, charge, or exaction regulating or related to vehicle miles traveled may be imposed as a condition of property development or occupanc y. f.i1 f7t An AssessFAeRts a Rel property relate el fees assessment. fee. or charge imJ;1oseel iA aeeoraanee witl=l the pro¥isio A5 of subject to Article XI 11 D, or an assessment imposed upon a business in a tourism marketing district, a parking and business improvement area, or a property and business improvement district. 5 Page 100 (7) A charge imposed for a specific health care service provided directly to the payor and that is not provided to those not charged. and which does not exceed the reasonable costs to the local government of providing the health care service. As used in this paragraph, a "health care service" means a service licensed or exempt from licensure by the state pursuant to Chapters 1. 1.3, or 2 of Division 2 of the Health and Safety Code. The local government bears the b1:1rden of proving by a preponderance of the e .. ·ielence that a lew, charge, or other exaction is not a ta1<, that the amo1:1nt is no more than necessaPJ' to cover the reasonable costs of the go•,ernfflental acti•.«ity anel that tJ:ie manner in which those costs are allocateel to a pa•ror bear a fair or reasonable relationship to the pa•ror's blslrdens on, or bene:fits receiveel from, the go1a1ernmental acfa•ity. Section 6. Section 2 of Article XIII C of the California Constitution is amended to read : Sec. 2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution: (a) Every levy. charge. or exaction of any kind imposed by local law is either a tax or an exempt charge. All taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes. (b) No local Jaw go,.·ernment whether proposed by the governing body or by an elector, may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body. (c) An•r general tax imposed, el<tended, or increaseel, •.-.iitho1:1t •.·oter approval, lay any local go,.·ernment on or after Janlslary 1, 1995, ana prior ta the effecti,.·e date of this article, shall contin1:1e to be imposed only if appro,.·ea b1• a majority vote of the voters voting in an election OR the issye of the in:iposition, whicl::i election sl::iall be l::ield witl::iin t•Ne 1•ears ef the effectii.ie date of this article and in com13liance with slslbdi\·isien (b}. {El) No local law government. whether proposed by the governing body or by an elector. may impose, eMteRd, er increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. {d) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall. for each measure providing for the imposition of a tax, include: (1) The type and amount or rate of the tax; (2) the duration of the tax; and (3) The use of the revenue derived from the tax. If the proposed tax is a general tax. the phrase "for general government use" shall be required, and no advisory measure may appear on the same ballot that would indicate that the revenue from the general tax will. could. or should be used for a specific purpose. (e) Only the governing body of a local government. other than an elector pursuant to Article II or the initiative power provided by a charter or statute. shall have the authority to impose any exempt charge. The governing body shall impose an exempt charge by an ordinance specifying the type of exempt charge 6 Page 101 as provided in Section l(i) and the amount or rate of the exempt charge to be imposed. and passed by the governing body. This subdivision shall not apply to charges specified in paragraph (7) of subdivision (i) of Section 1. ff) No amendment to a Charter which provides for the imposition, extension, or increase of a tax or exempt charge shall be submitted to or approved by the electors. nor shall any such amendment to a Charter hereafter submitted to or approved by the electors become effective for any purpose. (q) Any tax or exempt charge adopted after January 1, 2022, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted in compliance with the requirements of this section. {h)(1) The focal government bears the burden of proving by clear and convincing evidence that a levy, charge or exaction is an exempt charge and not a tax. The local government bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. (2} The retention of revenue by, or the payment to, a non-governmental entity of a levy. charge, or exaction of any kind imposed by a local law, shall not be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge. (3) The characterization of a levy. charge. or exaction of any kind imposed by a local law as being paid in exchange for a benefit. privilege, allowance, authorization, or asset, shall not be factors in determining whether the levy, charge, or exaction is a tax or an exempt charge. (4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge. Section 7. Section 3 of Article XIII D of the California Constitution is amended, to read: Sec. 3. Property Taxes, Assessments, Fees and Charges Limited (a) No tax, assessment, fee, 6f charge, or surcharge, including a surcharge based on the value ofpropertv, shall be assessed 13y a Ry ageRC'f upon any parcel of property or upon any person as an incident of property ownership except: (1) The ad valorem property tax impeseEI p1::1rsYaRt te described in Section 1(a) of Article XIII and Section 1/a) of Article XIII A, and described and enacted pursuant to the voter approval requirement in Section 1/b) Q[Article XII I A. (2) Any special non-ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4 of Article XIII A, or after receiving a two-thirds vote of those authorized to vote in a community facilities district by the Legislature pursuant to statute as it existed on December 31, 2021. (3) Assessments as provided by this article. (4) Fees or charges for property related services as provided by this article. 7 Page 102 (b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed charges or fees imposed as an incident of property ownership. Section 8. Sections 1 and 14 of Article XIII are amended to read: Sec. 1 Unless otherwise provided by this Constitution or the laws of the United States: (a) All property is taxable and shall be assessed at the same percentage of fair market value. When a value standard other than fair market value is prescribed by this Constitution or by statute authorized by this Constitution, the same percentage shall be applied to determine the assessed value. The value to which the percentage is applied, whether it be the fair market value or not, shall be known for property tax purposes as the full value. (b) All property so assessed shall be taxed in proportion to its full value. (c) All proceeds from the taxation of property shall be apportioned according to law to the districts within the counties. Sec. 14. All property taxed by state or local government shall be assessed in the county, city, and district in which it is situated. Notwithstanding any other provision of/aw, such state or local property taxes shall be apportioned according to law to the districts within the counties. Section 9. General Provisions A. This Act shall be liberally construed in order to effectuate its purposes. B. (1) In the event that this initiative measure and another initiative measure or measures relating to state or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other revenue measures shall appear on the same statewide election ballot, the other i ni tiative measure or measures shall be deemed to be in conflict with this measure. In the event that this initiative measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions ofthe other initiative measure or measures shall be null and void. (2) In furtherance of this provision, the voters hereby declare that this measure conflicts with the provisions of the "Housing Affordabili t y and Tax Cut Act of 2022" and "The Tax Cut and Housing Affordability Act," both of which would impose a new state property tax (called a "surcharge") on certain real property, and where the revenue derived from the tax is provided to the State, rather than retained in the county in which the property is situated and for the use of the county and cities and districts within the county, in direct violation of the provisions of this initiative. (3) If this initiative measure is approved by the voters, but superseded in whole or in part by any other conflicting initiative measure approved by the voters at the same election, and such conflicting initiative is later held invalid, this measure shall be self-executing and given full force and effect. C. The provisions of this Act are severable. If any portion, section, subdivision, paragraph, clause, sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decis ion of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Act. The People of the State of California hereby declare that they would have adopted this Act and each and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not 8 Page 103 declared invalid or unconstitutional without regard to whether any portion of this Act or application thereof would be subsequently declared invalid. D. If this Act is approved by the voters of the State of California and thereafter subjected to a legal challenge alleging a violation of state or federal law, and both the Governor and Attorney General refuse to defend this Act, then the following actions shall be taken: (1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 ofTitle 2 of the Government Code or any other law, the Attorney General shall appoint independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise due diligence in determining the qualifications of independent counsel and shall obtain written affirmation from independent counsel that independent counsel will faithfully and vigorously defend this Act. The written affirmation shall be made publicly available upon request. (3) A continu ous appropriation is hereby made from the General Fund to the Controller, without regard to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (4 ) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association, from intervening to defend this Act. 9 Page 104 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S OFFICE MEETING DATE: February 24, 2022 PREPARED BY: Andrew Firestine, Assistant City Manager REQUEST: Approve a Resolution in Support of Net Energy Metering _________________________________________________________________________ Recommendation By Minute Motion, approve Resolution No. 2022- in support of net energy metering. Background Analysis Customers who install small solar, wind, biogas, and fuel cell generation facilities to serve all or a portion of onsite electricity needs are eligible for the state's net metering program. Net energy metering (NEM) allows customers who generate their own energy ("customer- generators") to serve their energy needs directly onsite and to receive a financial credit on their electric bills for any surplus energy fed back to their utility. The current NEM program NEM 2.0 was adopted by the CPUC on January 28, 2016, and went into effect in in Southern California Edison’s (SCE) service territory on July 1, 2017. The program provides customer-generators full retail rate credits for energy exported to the grid and requires them to pay a few charges that align NEM customer costs more closely with non-NEM customer costs. In August 2020, the California Public Utilities Commission (CPUC) initiated the development of a successor net energy metering tariff to NEM 2.0. Following a scoping process and the adoption of guiding principles, a lookback study was issued on NEM 2.0 in January 2021 that sought to evaluate its cost-effectiveness and the cost of service. This white paper concluded that the NEM 2.0 systems are not generally cost-effective and that the program may result in an increase in rates for ratepayers. The study and its findings served as a launching point for a year long process to develop an alternative to NEM 2.0, a process that enabled constituent groups to submit proposals for the successor to the current tariff and where those proposals were heard through a series of workshops before the CPUC followed by a cost-effective analysis of those proposals, testimony, evidentiary hearings, and briefs. Over 17 proposals were submitted to the CPUC for consideration, including a joint proposal from Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric (IOU Proposal). NEM 3.0 is currently progressing through the necessary steps at the CPUC as part of the rulemaking proceeding. On December 13, 2021, the CPUC issued a proposed decision that is very similar to the IOU Proposal. A public comment period was initiated, inviting Page 105 February 24, 2022 - Staff Report Net Energy Metering Page 2 of 3 comments through January 7, 2022. The timeline was structured such that the CPUC could make a decision on the successor tariff as early as January 27, 2022. The proposed decision was not scheduled for this meeting or their February 24, 2022, meeting. An update was published to the CPUC website indicating that the proposed rulemaking has been reassigned from former Commissioner Martha Guzman Aceves to President Alice Reynolds and that she has requested additional time to analyze the record and consider revisions to the proposed decision based on party comments and for all five Commissioners to participate in the oral arguments. There is no timeline but rather an indication that a subsequent ruling will provide further information on the proceeding schedule. While the future process remains unclear, the proposed decision that was released on December 13, 2021, generated significant pushback from multiple constituent groups, arguing that it would hinder the state’s rooftop solar market and impede clean energy and environmental goals. The attached resolution grants support for the consideration of alternatives that strengthen net energy metering by: • Protecting and expanding rooftop solar via a strong succeeding NEM tariff and expanding clean energy access by making it easier and more affordable for people to adopt rooftop solar and energy storage in order to meet California's ambitious clean energy targets and deploy solar in all communities and households, particularly those struggling to pay for electricity; and • Expressing its support for the items as stated above, including urging the CPUC to: o Strengthen NEM to expand access to all households, particularly of low- and moderate-income; o Expand access to other clean energy technologies that pair with solar, such as batteries; o Ensure that the solar installations continue to grow in order to meet state and City climate goals; and o Exclude provisions set forth in the IOU Proposal such has high monthly fixed fees and reducing or eliminating credits for sharing electricity with the power grid. Fiscal Analysis There is no fiscal impact associated with the adoption of the resolution. Page 106 February 24, 2022 - Staff Report Net Energy Metering Page 3 of 3 LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER n/a Robert W. Hargreaves City Attorney n/a N/A Janet M. Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman ATTACHMENTS: Resolution No. 2022-______ Page 107 RESOLUTION NO. 2022-_____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, IN SUPPORT OF NET ENERGY METERING WHEREAS, Net Energy Metering (NEM) is designed to support the installation of customer-sited renewable energy generation; and WHEREAS, NEM allows customers to receive bill credits for power generated by their solar system and shared with the power grid and ultimately save money on their utility bills; and WHEREAS, NEM is what has allowed solar to become increasingly accessible to low- and moderate-income households; and WHEREAS, the California Public Utilities Commission (CPUC) has launched a formal proceeding to update the current NEM structure to be introduced in 2022 as NEM 3.0 and a number of parties have submitted their proposal for what they believe NEM 3.0 should look like; and WHEREAS, the California Investor Owned Utilities (IOUs), Pacific Gas and Electric, San Diego Gas & Electric and Southern California Edison, have submitted a joint proposal (the “IOU Proposal”) that calls for drastic changes to NEM that would make customer-sited renewable energy more expensive, increase the amount of time it takes for customers to pay off their systems, and ground to a halt the installation of distributed solar in California; and WHEREAS, The IOU Proposal would make it impossible for customer-sited renewables to continue to grow sustainably as mandated by law as a result of high monthly fixed fees for all solar installations, and slashing credits customers receive for sharing their excess electricity with the power grid; and WHEREAS, proposals submitted to CPUC by Protect Our Communities Foundation, California Solar & Storage Association, Vote Solar, GRID Alternatives, Solar Energy Industries Association, and others not only would encourage new solar adoption but also include additional subsidies for low-income customers; and WHEREAS, California cannot meet its clean energy targets in time with utility- scale solar alone and needs to triple the amount of rooftop solar, as reported by the California Energy Commission 2021 SB 100 Joint Agency Report Summary; and WHEREAS, protecting rooftop solar and expanding access to rooftop solar in communities of concern will help California as well as our own city to move toward 100 percent clean energy, lessen the impacts of the climate crisis, and reduce climate injustices from dirty energy; and Page 108 Resolution No. 2022-_______ WHEREAS, on December 13, 2021, the CPUC issued a Proposed Decision that is very similar to the IOU Proposal that would substantially reduce the credit value of excess energy exported to the grid; implement an inadequate market transition credit; increase the payback period for rooftop solar systems; and reduce the eligibility term for existing (NEM 1.0 and NEM 2.0) solar customers; and WHEREAS, we are in a climate crisis and need to make the transition to clean energy more accessible. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert that it supports protecting and expanding rooftop solar via a strong succeeding NEM tariff and expanding clean energy access by making it easier, not harder, for people to adopt rooftop solar and energy storage in order to meet California's ambitious clean energy targets and deploy solar in all communities and households, particularly those struggling to pay for electricity; BE IT FURTHER RESOLVED that the City Council of the City of Palm Desert urges the CPUC to: (i) strengthen NEM to expand access to all households, particularly of low- and moderate-income; (ii) expand access to other clean energy technologies that pair with solar, such as batteries; (iii) ensure that the solar installations continue to grow in order to meet state and City climate goals; and (iv) exclude provisions set forth in the IOU Proposal such has high monthly fixed fees and reducing or eliminating credits for sharing electricity with the power grid. BE IT FURTHER RESOLVED that copies of this Resolution shall be sent to Governor Gavin Newsom, State Senator Melissa Melendez, Assemblymember Chad Mayes, and members of the California Public Utilities Commission. PASSED, APPROVED, AND ADOPTED on this 24th day of February 2022 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR Page 109 Resolution No. 2022-_______ ATTEST: NIAMH M. ORTEGA, DEPUTY CITY CLERK CITY OF PALM DESERT, CALIFORNIA Page 110 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S DEPARTMENT MEETING DATE: February 24, 2022 PREPARED BY: Andrea Staehle, Human Resources Manager REQUEST: Approve Amendment No. 1 to the City Manager’s Employment Agreement effective March 1, 2022. Recommendation By Minute Motion: 1. Approve Amendment No. 1 to the City Manager’s Employment Agreement, with L. Todd Hileman (Exhibit A) effective March 1, 2022. Executive Summary On February 7, 2022, the City Council held a goal setting and City Manager evaluation session. During the City Manager evaluation session, the City Manager requested an amendment to his contract regarding vacation and retirement contributions, and the City Council agreed to consider an approval of the amendment as a Council item. Discussion This would be the first amendment to the contract. In accordance with the request and Council direction. The amendment contains the following changes: 1. 3.3 Pension: The City no longer contributes to the employee’s 457 retirement plan. 2. 3.9 Vacation Leave Benefits: Accrue two hundred hours of vacation each year. 3. 3.12 IRS 401a: The City shall contribute one thousand five hundred dollars (1,500.00) per month to the employee’s 401a retirement account. Fiscal Impact The contract amendment includes an increase of one week of vacation and a redirection of retirement funds from a 457 Plan to a 401a Plan. The potential cost of the additional vacation, if cashed out, is $5,249 and there is no increase to the redirection of retirement funds. Page 111 Staff Report Approval CM Contract Amendment No. 1 February 24, 2022 Page 2 LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER Robert W. Hargreaves City Attorney Andrea Staehle Andrea Staehle Human Resources Manager Janet M. Moore Janet M. Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman L. Todd Hileman ATTACHMENTS: 1. Exhibit A: City Manager Employment Contract Amendment No. 1 Page 112 CITY MANAGE EMPLOYMENT AGREEMENT AMENDMENT NO. 1 1. Parties and Date. This Amendment No. 1 to the City Manager Employment Agreement is by and between the City of Palm Desert (“City”) and Todd Hileman (“Employee”), and effective March 1, 2022. City and Employee are sometimes individually referred to as “Party” and collectively as “Parties.” 2. Recitals. 2.1 The Parties entered into an agreement entitled City Manager Employment Agreement dated March 1, 2021 (“Agreement”). 2.2 Parties now desire to change certain provision of the Agreement as specified below. NOW, THEREFORE, the Parties agree as follows: 3. Terms. 3.A Section 3.3 Pension Section 3.3 of the Agreement is hereby amended in its entirety to read as follows: 3.3 Pension The City agrees to continue to fund the City Manager as a member of the California Public Employees Retirement System (CalPERS) at the 2% at 62 formula in accordance with CalPERS regulations, which includes a requirement for a 7% “employee share” contribution. The City shall no longer make contributions to Employee’s 457 retirement plan. 3.B Section 3.9 Vacation Leave Benefits. Section 3.9 of the Agreement is hereby amended in its entirety to read as follows: 3.9 Vacation Leave Benefits Upon commencement of employment, the City Manager shall have access to an accrued balance of one hundred sixty (160) hours of vacation. Additionally, City Manager shall accrue two hundred (200) hours of vacation each year, accrued at the rate of 7.69 hours per pay period, subject to a maximum accrual balance of 320 hours. Once the limit of 320 hours has been reached accrual shall cease until such time as the balance falls below the maximum.” Page 113 3.C. Section 3.12 IRS 401a. Section 3.12 of the Agreement is hereby amended in its entirety to read as follows: 3.12 IRS 401a The City will offer an IRS 401a Defined Contribution plan, allowing up to 10% salary deferral with up to 2% matching contribution plus One Thousand Five Hundred Dollars ($1,500.00 ) per month. 3.D. Except as amended by this Amendment No. 1, all other terms and conditions of the Agreement shall remain unchanged, and shall remain in full force and effect and shall govern the actions of the parties under this Amendment No. 1. From and after the date of this Amendment No. 1, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 1. IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed the 25 day of February, 2022. EMPLOYEE Todd Hileman, City Manager CITY OF PALM DESERT Jan Harnik, Mayor ATTEST: Niamh M. Ortega, Deputy City Clerk APPROVED AS TO FORM: Robert Hargreaves, City Attorney Page 114 STAFF REPORT CITY OF PALM DESERT DEVELOPMENT SERVICES DEPARTMENT MEETING DATE: February 24, 2022 PREPARED BY: Amy Lawrence, Special Programs Manager REQUEST: Consideration to approve of out-of-state travel for Special Programs Manager and Public Art Management Analyst to attend the 2022 Americans for the Arts Annual Conference from May 18-20, 2022 in Washington D.C. Recommendation By Minute Motion, authorize out-of-state travel for Special Programs Manager and Public Art Management Analyst to attend the 2022 Americans for the Arts Annual Conference from May 18-20, 2022 in Washington D.C. Funds are available in the in Account No. 4364650-4312000. Discussion Each year the staff with the public art division attends the Americans for the Arts Annual Conference. This conference affords staff the opportunity to attend workshops, panels, and interactive sessions on public art, community development, leadership, and more. It further allows staff time to network with others in the public art field and bring back innovative ideas for the Palm Desert community. Fiscal Analysis The estimated cost for the conference, airfare, lodging, and per diem meals and incidentals for both the Special Programs Manager and Public Art Management Analyst is $6,000. Funds for this conference and travel request were included in the FY 2021/2022 budget and are available in the Public Art Fund. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Martin Alvarez Martin Alvarez, Director of Development Services Janet M. Moore Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman ATTACHMENT: Conference Literature Page 115 2022 Annual Convention The 2022 Americans for the Arts Annual Convention will take place May 18-20, 2022, in Washington, D.C. More details about the schedule and location will be released in the coming weeks. Information about registration and ways to access support opportunities will be available in early March 2022. Americans for the Arts is committed to increasing access to and participation in the annual Convention to enrich conversation, practice, and policy. This year, we are subsidizing approximately $400,000 of the actual cost of the Convention to keep fees lower for all; roughly 50% of the total expense. Additionally, we are expanding registration support opportunities. The recorded content of this in-person event will also be made available, for a fee, in a digital format in June 2022. Americans for the Arts (https://www.americansforthearts.org) Arts Action Fund (https://www.artsactionfund.org) National Arts Marketing Project (https://namp.americansforthearts.org/) pARTnership Movement (https://www.partnershipmovement.org/) Animating Democracy (https://www.animatingdemocracy.org/) - 2022 ANNUAL CONVENTION REGISTRATION COMING SOON! May 18-20, 2022 Washington, DC Page 116 Anyone interested in rating the submitted session proposals between now and February 15, 2022, may do so by following this link (https://survey.alchemer.com/s3/6698773/AC2022-Session-Voting). We received 132 amazing proposals—and we need your help to narrow them down to the sessions that will appear at the Annual Convention! We've made it easy--Rate as many (or few) session proposals as you would like with our easy 4-star rating system. For more information on some of the measures Americans for the Arts is taking to make the Annual Convention a more accessible, transparent, and inclusive event, please click this link (https://www.americansforthearts.org/news-room/americans-for-the-arts-news/increasing-access-and- opening-the-submission-process-for-annual-convention). If you would like to sign up to get notifications about the Annual Convention in your email inbox, please click here (https://www.magnetmail.net/actions/subscription_form_artsusa.cfm? ep=9bALoBKyD4MREWGIzwwoeTgI6J8KXEouM5rR4WVzr2U~). If you have any other questions, please reach out to Clay Lord, the content lead for the Annual Convention, at clord@artsusa.org (mailto:clord@artsusa.org). We’ll also keep updating this site with more information in the coming weeks! Site Photo Credits: "Wavelength" by artist Emily White, Fort Lauderdale-Hollywood International Airport, photo by Tabatha Mudra. "River of Time" by artist Alan Masaoka, Priscilla Chan and Mark Zuckerberg San Francisco General Hospital and Trauma Center, photo by Bruce Damonte. "Funktional Vibrations" by artist Xenobia Bailey, 34th St subway station, New York City, photo by Sid Tabak. Americans for the Arts Home (/) Signature Events Arts and Business Partnership Awards (https://www.americansforthearts.org/events/arts- and-business-partnership-awards) Nancy Hanks Lecture (https://www.americansforthearts.org/events/nancy- hanks-lecture) National Arts Action Summit (https://www.americansforthearts.org/events/national- arts-action-summit) National Arts Awards (https://www.americansforthearts.org/events/national- arts-awards) National Arts Marketing Project Conference (https://namp.americansforthearts.org/get- smarter/conference) National Arts and Humanities Month (https://www.americansforthearts.org/events/national- arts-and-humanities-month) Press (https://www.americansforthearts.org/news- room/press-releases) Careers (https://www.americansforthearts.org/about- americans-for-the-arts/staff) Staff (https://www.americansforthearts.org/about- americans-for-the-arts/staff) Privacy Statement (https://www.americansforthearts.org/about- americans-for-the-arts/americans-for-the- arts-privacy-statement) Get Conference Updates enter e-mail address SIGN UP MANAGE SUBSCRIPTION Page 117 Location 1275 K St NW, Suite 1200 Washington, DC 20005 T 202.371.2830 F 202.371.0424 © 2022 Americans for the Arts Page 118 STAFF REPORT CITY OF PALM DESERT BUILDING AND SAFETY DIVISION MEETING DATE: February 24, 2022 PREPARED BY: Melanie Ramirez, Permit Center Supervisor REQUEST: Request for approval of out-of-state travel for Permit Center Supervisor to attend the 2022 Central Square Permit Software Conference. March 26-30, 2022 in Orlando, Florida. ________________________________________________________________ Recommendation By Minute Motion, authorize the out-of-state travel for the Permit Center Supervisor to attend the 2022 Central Square Permit Software Conference March 26-30th, 2022 in Orlando, Florida. Discussion Each year the permit software provider conducts a conference that affords staff the opportunity to attend workshops, round tables and other interactive sessions to learn and update our technology. It further allows staff the opportunity to discuss and strategize with other jurisdictions on software issues and solutions. Fiscal Analysis The estimated cost for the conference, airfare, lodging and per diem meals is $2,500. Funds are available in the FY 2021/2022 budget, Account Number 1104420-4312000. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Martin Alvarez Martin Alvarez, Director of Development Services Janet M. Moore Janet Moore Director of Finance N/A Andy Firestine Assistant City Manager City Manager: L. Todd Hileman: L. Todd Hileman ATTACHMENTS: Conference literature Page 119 Page 120 STAFF REPORT CITY OF PALM DESERT DEVELOPMENT SERVICES DEPARTMENT MEETING DATE: February 24, 2022 PREPARED BY: Amy Lawrence, Special Programs Manager REQUEST: Consideration of Approval to Reimburse La Quinta Brewing Company its public art fee in the amount of $6,200 for Hazy Palms by Artist John Cuevas ______________________________________________________________________ Recommendation By Minute Motion: 1. Authorize reimbursement to La Quinta Brewing Company of its public art fee in the amount of $6,200 for Hazy Palms by John Cuevas; and 2. Authorize the Mayor to execute the Public Art Agreement. Funds are available in the Public Art Fund 436. Committee Recommendation At its meeting of February 9, 2022, the Cultural Arts Committee recommended the City Council approve reimbursement to La Quinta Brewing Company for its public art fee in the amount of $6,200 for Hazy Palms by Artist John Cuevas. Motion carried 4-1-1, with Committee Members Adney, Boren, Flint, and Harding voting aye, Member Higgens voting no, and Member Hauer absent. The reason for Member Higgens voting no was due to an element of the work that she was not in favor of. Strategic Plan Objective The installation of public art creates a more interesting community image for residents and visitors to Palm Desert. This concept is in line with the Arts & Culture Mini-Vision of the 2013-2033 Strategic Plan, Envision Palm Desert – Forward Together which states: “Arts and culture give a community its soul. Palm Desert is the cultural core of the Coachella Valley. Cultural tourism drives economic growth in Palm Desert. The community is host to internationally recognized cultural events that bring significant economic benefits to the City. Palm Desert is a leader in arts education, ensuring a well-rounded population that possesses high levels of creativity and critical thinking skills.” Page 121 February 24, 2022 - Staff Report La Quinta Brewing Company AIPP Fee Reimbursement Page 2 of 2 Discussion At its meeting of April 14, 2021, the Art in Public Places (AIPP) Commission recommended approval of the proposed mural, Hazy Palms by John Cuevas, as the public art component for La Quinta Brewing Company. At its meeting of May 13, 2021, the City Council voted to approve the proposal. Subsequent to approval by the City Council, the Hazy Palms mural was installed at La Quinta Brewing Company. After the mural was completed, the Cultural Arts Committee had some concerns about the finished artwork as it had deviated from the initial rendering that was submitted and approved. Staff met with the artist and developer to express these concerns and the mural was updated to reflect the elements that the artist previously did not include and deviated from. Fiscal Analysis La Quinta Brewing Company paid $6,500 into the AIPP Fund and is requesting reimbursement in the amount of $6,200 for the cost of the mural. According to the City’s AIPP guidelines, applicants are eligible for reimbursement up to the amount paid into the fund. Upon review of the applicant’s submittals, staff has determined that reimbursement of $6,200 is merited per the AIPP guidelines. Monies are available in the Public Art Fund 436. There is no fiscal impact to the General Fund associated with this request. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Martin Alvarez Martin Alvarez, Director of Development Services Janet M. Moore Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman APPLICANT: La Quinta Brewing Company Mr. Scott Stokes 74-714 Technology Drive Palm Desert, California 92211 ATTACHMENTS: Photo of the Hazy Palms Mural Public Art Developer Form B Draft Public Art Agreement Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 1 Contract No. PUBLIC ART AGREEMENT THIS PUBLIC ART AGREEMENT dated this 28th day of October, 2021 between the City of Palm Desert, a municipal corporation, hereinafter referred to as “City” and La Quinta Brewing Company, hereinafter referred to as “Owner/Developer” is made with respect to the following: A. Owner/Developer is the owner of property located in the city of Palm Desert, County of Riverside, State of California, described in Exhibit “A” and depicted on Exhibit “B” attached hereto and by this reference incorporated herein (“Property”). The street address of the parcel is 74714 Technology Drive, Palm Desert, California 92211. B. Owner/Developer has heretofore applied for and been permitted to construct a project for which the establishment of specific public art, depicted in Exhibit “C”, is required and in order to comply with the City’s requirements, the art should be placed in the project and the Owner/Developer has continuing indemnification and maintenance responsibilities as hereinafter set forth. C. In consideration of the approval process and the installation of such art, this indemnification and hold harmless agreement executed by the Owner/Developer, the City proposes to issue all permits for the installation of same. D. Now, therefore, the City and Owner therefore agree as follows: NOW, THEREFORE, the parties hereto agree as follows: 1. City has approved the development of the project of Owner/Developer that includes the installation of artwork in said project, which artwork shall remain the ownership of Owner/Developer. 2. Artwork in said project shall not be removed or altered without prior Page 131 2 Contract No. approval of the City Council. If artwork is removed or altered without prior approval as outlined in the City’s Public Art Ordinance, the Owner/Developer may be required to contribute funds equal to the project’s original public art requirement to the City’s art in public places fund, or replace the removed artwork with one which is of comparable value and approved of by the City’s public art department. If these requirements are not met, the Owner/Developer’s Certificate of Occupancy may be revoked upon due notice and the City may pursue any other available civil or criminal remedies or penalties. 3. So long as artwork remains in place, Owner/Developer shall indemnify, defend, and hold harmless the City, and its officials, officers, employees, representatives, volunteers, and agents (“City indemnitees”), from and against any and all causes of action, claims, liabilities, obligations, judgments, or damages, including reasonable legal counsels’ fees and costs of litigation (“claims”), arising out of the Owner/Developer’s performance of its obligations under this agreement or out of the operations conducted by the Owner/Developer, including the City’s active or passive negligence, except for such loss or damage arising from the sole negligence or willful misconduct of the City. In the event the City indemnitees are made a party to any action, lawsuit, or other adversarial proceeding arising from Owner/Developer’s performance of this agreement the Owner/Developer shall provide a defense to the City indemnitees or at the City’s option reimburse the City indemnitees their costs of defense, including reasonable legal counsels’ fees, incurred in defense of such claims. Owner/Developer’s obligations under this paragraph are currently running with the property shall be binding upon owners, successors in interest and assigns. 4. The Owner/Developer shall maintain a Certificate of General Liability Insurance in a form acceptable to the City’s Risk Manager naming the City of Palm Desert and its officials, officers, employees, agents, and volunteers as additional insureds, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The Owner/Developer shall cause the insurance to remain in effect for the life of the project. The City reserves the right to require complete, certified copies of the insurance policy, Page 132 3 Contract No. at any time. 5. Owner/Developer shall be responsible for the maintenance, repair, upkeep and replacement of such artwork as required by the City. This maintenance responsibility shall include the responsibility for all damage to the area or the artwork that may result from construction or the item being installed on said property. The property shall be maintained in a clean, safe and attractive manner. If City, in its sole discretion, determines that the artwork is not being maintained in an acceptable condition, City through its Code Enforcement Department shall notify Owner/Developer in writing that they have fifteen (15) days to correct said deficiency. If the deficiencies are not corrected in the manner and within the time set forth, the City may make such corrections at the expense of the Owner/Developer. Upon completion of said maintenance and/or repair City shall send Owner/Developer a demand letter by first class mail to reimburse City the cost of maintenance with repairs within fifteen (15) days. In the event there is a failure to reimburse the City within such time frame, City shall be entitled to specially assess Owner/Developer of all costs incurred in maintaining or repairing such artwork, any cost of collection, including attorneys’ fees and other court costs, and lien the property. 6. This Agreement shall be binding upon and inure to the benefit of all executors, administrators, successors, assigns, agents, employees, attorneys and representatives of their respective parties hereto. In the event any provision or disagreement shall be held to be invalid, the same shall not affect any of the terms of the remainder of the Agreement. In the event of any controversy including the dispute between the parties, arising out of or relating to this Agreement, the prevailing party shall be entitled to recover from the other party reasonable expenses, attorneys’ fees and costs. 7. This Agreement is made in and shall be governed by the laws of the State of California Page 133 4 Contract No. 8. This Agreement shall be notarized and recorded in the County of Riverside, State of California. CITY OF PALM DESERT, a municipal corporation By: JAN C. HARNIK, MAYOR ATTEST: By: NIAMH M. ORTEGA, DEPUTY CITY CLERK APPROVED AS TO FORM: By: ROBERT W. HARGREAVES, CITY ATTORNEY LA QUINTA BREWING COMPANY By: By: Page 134 5 Contract No. Exhibit A Legal Description That certain Parcel of land conveyed to La Quinta Brewing Company, LLC by Grant Deed 2019-0171869 Recorded May 16, 2019. Page 135 74174 TECHNOLOGY DRIVE VICINTIY MAP Legend 9,9191: Notes Circulation Network Streets City Boundary Parcels (10/2020) Exhibit B Contract No. Page 136 6 Contract No. Exhibit C Depiction of Work Page 137 [This page has intentionally been left blank.] Page 138 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\ACFR Staff Report\0. SR - Council audit 2021 ACFR.docx STAFF REPORT CITY OF PALM DESERT PALM DESERT HOUSING AUTHORITY FINANCE DEPARTMENT MEETING DATE: February 24, 2022 PREPARED BY: Jose Luis Espinoza, CPA, Deputy Director of Finance REQUEST: Receive and file the City of Palm Desert audited financial report for the fiscal year ended June 30, 2021 Recommendation By Minute Motion, that the City Council receive and file the audited Annual Comprehensive Financial Report (ACFR) for the City of Palm Desert for the fiscal year ended June 30, 2021. Strategic Plan Objective Not applicable. Committee Recommendation The Finance Committee received the City of Palm Desert audited reports at their February 22, 2022, meeting and recommended that the report be received and filed by the City Council. Background Lance, Soll & Lunghard, LLP performed and completed the annual independent audit for the fiscal year ended June 30, 2021, for the City of Palm Desert, which includes the Palm Desert Housing Authority, in accordance with generally accepted auditing standards. In the auditor’s opinion, the basic financial statements present fairly, in all material respects, the financial position of the City of Palm Desert as of June 30, 2021, and the results of its operations and the cash flows of its proprietary funds for the year then ended in conformity with accounting principles generally accepted in the United States of America. In conducting their audit, the auditors test the City’s internal controls. Attached is the Report on Internal Controls over Financial Reporting and on compliance and other matters based on an audit of Financial Statements performed in accordance with Government Auditing Standards. The ACFR was submitted for the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements, as it has for the past 24 years. Page 139 Staff Report Receive and file ACFR for Fiscal Year ended June 30, 2021 February 24, 2022 Page 2 of 2 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\ACFR Staff Report\0. SR - Council audit 2021 ACFR.docx Staff requests that the City Council receive and file the audited financial statements for the fiscal year ended June 30, 2021. Fiscal Analysis There is no fiscal impact associated with this action. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Jose Luis Espinoza Jose Luis Espinoza Deputy Director of Finance Jose Luis Espinoza Jose Luis Espinoza Deputy Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager: L. Todd Hileman: L. Todd Hileman ATTACHMENTS: 1. City of Palm Desert audited financial report for fiscal year ended June 30, 2021. (Annual Comprehensive Financial Report) 2. Auditor’s letter to City Council 3. Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 4. Appropriations Limit Worksheet no. 6 Page 140 PALM DESERT, CALIFORNIA CITY OF PALM DESERT ANNUAL COMPREHENSIVE FINANCIAL REPORT Fiscal Year Ended June 30, 2021 Page 141 ANNUAL COMPREHENSIVE FINANCIAL REPORT of the CITY OF PALM DESERT, CALIFORNIA For the Fiscal Year ended June 30, 2021 Prepared by the Finance Department City Treasurer/Director of Finance Janet M. Moore Deputy Director of Finance Jose Luis Espinoza, CPA Finance Staff (in alphabetical order by positions and last names) ACCOUNTANT James Bounds ACCOUNTANT Jenny Weill ACCOUNTING MANAGER Anthony Hernandez ACCOUNTING SPECIALIST Mitchell Arbaugh ACCOUNTING TECHNICIAN Horacio Celaya ACCOUNTING TECHNICIAN Diana Leal ACCOUNTING TECHNICIAN Kalaina Perez DEPUTY CITY TREASURER Thomas Metz FINANCE MANAGER Veronica Tapia MANAGEMENT SPECIALIST II Patty Leon Page 142 This page intentionally left blank Page 143 CITY OF PALM DESERT, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal ................................................................................................................................. i GFOA Certificate of Achievement for Excellence in Financial Reporting .............................................. vi List of Principal Officials ........................................................................................................................ vii Organizational Chart ............................................................................................................................ viii FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT .................................................................................................. 1 MANAGEMENT’S DISCUSSION AND ANALYSIS ................................................................................ 5 BASIC FINANCIAL STATEMENTS Statement of Net Position ............................................................................................................... 17 Statement of Activities .................................................................................................................... 18 Balance Sheet – Governmental Funds........................................................................................... 22 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................................................................. 25 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ....................................................................................... 26 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................................................................................................... 29 Statement of Net Position – Proprietary Funds .............................................................................. 30 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ................................................................................................ 31 Statement of Cash Flows – Proprietary Funds ............................................................................... 32 Statement of Fiduciary Net Position – Fiduciary Funds ................................................................. 33 Statement of Changes in Fiduciary Net Position – Fiduciary Funds .............................................. 34 Notes to Basic Financial Statements .............................................................................................. 35 Page 144 CITY OF PALM DESERT, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS Page Number REQUIRED SUPPLEMENTARY INFORMATION Miscellaneous Plan – Agent Multiple-Employer Schedule of Changes in Net Pension Liability and Related Ratios ............................................................................. 96 Miscellaneous Plan- Agent Multiple – Employer Schedule of Plan Contributions ......................... 98 Schedule of Changes in the Net OPEB Liability/(Asset) and Related Ratios .............................. 100 Schedule of Plan Contributions – OPEB ...................................................................................... 101 Budgetary Comparison Schedule by Department – General Fund .............................................. 102 Budgetary Comparison Schedule – Measure A ........................................................................... 104 Budgetary Comparison Schedule – Prop A Fire Tax ................................................................... 105 Budgetary Comparison Schedule –Housing Asset Fund ............................................................. 106 Budgetary Comparison Schedule – Housing Authority ................................................................ 107 Notes to Required Supplementary Information ............................................................................ 108 SUPPLEMENTARY SCHEDULES Combining Balance Sheet – Other Governmental Funds ............................................................ 110 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Other Governmental Funds .............................................................................. 111 Other Governmental Funds – Special Revenue Funds ............................................................... 113 Combining Balance Sheet – Other Special Revenue Funds ....................................................... 116 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Other Special Revenue Funds ................................................................... 122 Budgetary Comparison Schedules – Special Revenue Funds: Traffic Safety .......................................................................................................................... 127 Gas Tax .................................................................................................................................. 128 Housing Mitigation Fees......................................................................................................... 129 Community Development Block Grant ................................................................................... 130 Child Care Program ............................................................................................................... 131 Public Safety Police Grants ................................................................................................... 132 New Construction Tax ............................................................................................................ 133 Planned Drainage .................................................................................................................. 134 Parks and Recreational Facilities ........................................................................................... 135 Traffic Signals ........................................................................................................................ 136 Page 145 CITY OF PALM DESERT, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS Page Number Fire Facilities Restoration....................................................................................................... 137 Recycling ................................................................................................................................ 138 Energy Independence Loan ................................................................................................... 139 Air Quality Management......................................................................................................... 140 Aquatic Center ....................................................................................................................... 141 Cannabis Compliance ............................................................................................................ 142 El Paseo Assessment District ................................................................................................ 143 Landscape and Lighting Districts Nos. 1-17 .......................................................................... 144 Affordable Housing Fund ....................................................................................................... 145 Other Governmental Funds – Capital Projects ............................................................................. 147 Combining Balance Sheet – Other Capital Projects Funds ......................................................... 148 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Other Capital Projects Funds ..................................................................... 152 Budgetary Comparison Schedules – Capital Project Funds: Capital Properties ................................................................................................................... 156 Capital Projects Reserve........................................................................................................ 157 Drainage Facilities .................................................................................................................. 158 Economic Development ......................................................................................................... 159 Parks and Recreational Facilities ........................................................................................... 160 Art in Public Places ................................................................................................................ 161 Signalization ........................................................................................................................... 162 Capital Golf ............................................................................................................................ 163 Buildings ................................................................................................................................. 164 Other Governmental Funds – Debt Service Funds ...................................................................... 165 Balance Sheet – Other Debt Service Fund .................................................................................. 166 Statement of Revenues, Expenditures and Changes in Fund Balances – Other Debt Service Fund ........................................................................... 167 Budgetary Comparison Schedule – Debt Service Fund: City Highland Undergrounding ............................................................................................... 168 Internal Service Funds .................................................................................................................. 169 Combining Statement of Net Position – Internal Service Funds .................................................. 170 Combining Statement of Revenues, Expenses and Changes In Fund Net Position – Internal Service Fund ........................................................................ 171 Combining Statement of Cash Flows – Internal Service Funds ................................................... 172 Page 146 CITY OF PALM DESERT, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS Page Number Custodial Funds ............................................................................................................................ 173 Combining Statement of Assets and Liabilities – All Custodial Funds ......................................... 174 Combining Statement of Changes in Fiduciary Net Position – All Custodial Funds .................... 175 STATISTICAL SECTION Description of Statistical Section ......................................................................................................... 177 Financial Trends: Net Position by Component .......................................................................................................... 179 Changes in Net Position ............................................................................................................... 180 Fund Balances of Governmental Funds ....................................................................................... 183 Changes in Fund Balances of Governmental Funds.................................................................... 184 Graphs – Changes in Fund Balances of Governmental Funds .................................................... 185 Supplemental Historical General Fund Revenues ....................................................................... 186 Supplemental Graph – Historical General Fund Revenues ......................................................... 187 Supplemental Historical General Fund Expenditures................................................................... 188 Supplemental Graph – Historical General Fund Expenditures .................................................... 189 Supplemental Historical General Revenue and Expenditures Per Capita ................................... 191 Revenue Capacity: Assessed Value and Estimated Actual Value of Taxable Property .............................................. 192 Historical Net Assessed Taxable Values Citywide and Graph – Assessed Valuation Growth ........................................................................................ 193 Supplemental FY 2020 and 2019 Breakdown of Basic 1% Property Tax Rate Not In Redevelopment Project Area .......................................................................... 194 Property Tax Rates Direct and Overlapping Property Tax Rates ................................................ 195 Principal Property Taxpayers ....................................................................................................... 196 Property Tax Levies and Collections ............................................................................................ 197 Supplemental Top 25 Sales Tax Generators and Graph – Historical Sales Tax Trends ........................................................................................ 198 Debt Capacity: Ratios of Outstanding Debt by Type ............................................................................................ 199 Ratios of General Bonded Debt Outstanding ............................................................................... 200 Supplemental Special Assessment Information ........................................................................... 201 Direct and Overlapping Government Activities Debt .................................................................... 202 Legal Debt Margin Information ..................................................................................................... 203 Pledged-Revenue Coverage ........................................................................................................ 204 Demographic and Economic Information: Demographic and Economic Statistics ......................................................................................... 205 Page 147 CITY OF PALM DESERT, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS Page Number Principal Employers ...................................................................................................................... 206 Supplemental Miscellaneous Statistics ........................................................................................ 207 Operating Information: Full-Time Equivalent City Government Employees by Function/Program ................................... 208 Operating Indicators by Function/Program ................................................................................... 209 Capital Asset Statistics by Function/Program .............................................................................. 210 SUPPLEMENTAL REDEVELOPMENT CUSTODIAL STATISTICAL SECTION Redevelopment Custodial Project Areas Map .............................................................................. 212 Tax Allocation Bond Issue Information ......................................................................................... 213 Historical Tax Increment – Redevelopment Property Tax Trust Fund Summary ...................................................................................................... 214 Page 148 This page intentionally left blank Page 149 December 20, 2021 Residents of Palm Desert, Honorable Mayor and Members of the City Council The Finance Department is pleased to present the Annual Comprehensive Financial Report (ACFR) of the City of Palm Desert for the fiscal year ended June 30, 2021. The financial statements are prepared in accordance with generally accepted accounting principles (GAAP) and the Governmental Accounting Standards Board (GASB). We believe the data, as presented, is accurate in all material respects and is presented in a manner that fairly represents the financial position and changes in financial position of the City as measured by the financial activity of each of its funds. We also believe that all disclosures necessary to enable the reader to fully understand the City's financial activities have been presented. Responsibility for the accuracy, completeness and reliability of the information contained in this report rests with the City. The City of Palm Desert conducts an annual audit, which is performed by an independent certified public accountant. The independent audit of the City’s financial statements for fiscal year ended June 30, 2021, was conducted by Lance Soll & Lunghard, LLP. The auditor’s unmodified opinion on the basic financial statements is included in the Financial Section of this report. This is the most favorable opinion. As part of the City’s annual audit engagement, the auditors reviewed the City’s internal control structure as well as compliance with applicable laws and regulations. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance, that the financial statements are free of any material misstatements. The results of the City’s annual audit for fiscal year ended June 30, 2021, provided no instances of material weaknesses in connection with the internal control structure or significant violations of applicable laws and regulations. As recipients of federal, state and county financial resources, the City may be required to undergo an annual single audit. For the fiscal year ended June 30, 2021, the City will have a single audit performed. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. CITY OF PALM DESERT 73-510 FRED WARING DRIVE PALM DESERT, CALIFORNIA 92260-2578 TEL: 760 346-0611 INFO@PALM-DESERT.ORG iPage 150 PROFILE OF THE CITY OF PALM DESERT Located in Riverside County in the geographical center of the Coachella Valley, Palm Desert was incorporated on November 26, 1973, as a General Law City. On November 4, 1997, voters overwhelmingly approved Measure LL adopting a city charter. Under the provisions of the charter, the City of Palm Desert has full authority over its own municipal affairs including: bidding and contracting procedures; regulation of parks, libraries, and other facilities; certain fees; imposition of taxes; municipal zoning; salaries of officials and employees; municipal utilities; and municipal election procedures. The City operates under a Council-Manager form of government. The City Council is comprised of five members elected to four-year terms every two years by the residents of the City. The City has two-districts, District One includes neighborhoods in and around the Palm Desert Civic Center core, comprising about 20% of the City’s population which is represented by one (1) elected City Council member. District Two comprises 80% of the City’s population, which is represented by four (4) elected City Council members. Each December, the City Council selects the Mayor from among its members for a one-year term. The City Council appoints the City Manager and the City Attorney. The City operates as a “contract city,” primarily utilizing agreements with other governmental entities, private firms, and individuals to provide many services. Contracted services include: police protection through the County of Riverside; fire protection through Cal-Fire; animal control; road maintenance and construction services; legal services; landscape maintenance; and recreation program services. Palm Desert is a member of the California Joint Powers Insurance Authority that provides insurance coverage for the City. Water, sewage treatment and wastewater disposal are provided by the Coachella Valley Water District. Southern California Gas Company supplies natural gas to the City and electric power is provided by the Southern California Edison Company. Waste Disposal is provided by Burrtec Waste & Recycling Services. Telephone/Internet service is available through Frontier Communications. Cable television/Internet service is provided by Time Warner Cable/Spectrum. The City provides traditional municipal, public enterprise, and housing services as follows: Municipal Services Public improvements, infrastructure and maintenance Public art and community promotion Planning, zoning, building and engineering Housing and community development Code compliance Economic development and business advocacy Legislative, city clerk, visitor’s services, public information, general administration, fiscal services, human resources, and risk management Building permitting, inspections and services Palm Desert Civic Center iiPage 151 Public Enterprise Services Blended & Discrete Component Units Golf course PD Housing Authority Office complex PD Financing Authority Internal service PD Recreational Facilities Corporation The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General, Special Revenue, Debt Service, and Capital Project Funds are included in the annual appropriated budget. Budgetary amounts for Debt Service, Capital Projects, and certain Special Revenue Funds are adopted annually; however, these budgets are considered to be long-term in nature. The City also maintains an encumbrance accounting system of purchase orders and contracts at the fund level as a means of accomplishing budgetary control. At each fiscal year end, open encumbrances are carried over to the new fiscal year. Purchase orders are reviewed to ensure that funds are available and that requests are properly authorized prior to being released to vendors. The adopted budget for fiscal year 2020-2021 was prepared in accordance with accounting principles generally accepted in the United States of America. As reflected in the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. LOCAL ECONOMY The City comprises an area of approximately 26 square miles and, as of January 1, 2021, has a population of 53,892 according to data provided by the California Department of Finance. In addition to permanent residents, approximately 20,000 seasonal residents make Palm Desert their home for three to six months each year. The City has cultivated a sound foundation of general fund revenues including sales tax, transient occupancy tax, licenses and permits, property tax, and investment earnings. The City’s main revenue sources are transient occupancy taxes and sales tax. Due to the timing of the City’s incorporation, in 1973, and the implementation of Proposition 13, the City receives less than 7 percent of property taxes; therefore, the City relies heavily on sales tax and transient occupancy tax. As a community where economic, environmental, social, and cultural development flourishes, Palm Desert is a much sought-after place to visit and reside. Palm Desert is the first city in Riverside County to create a public art program and is home to numerous cultural attractions including: the McCallum Theatre for the Performing Arts, a 1,127-seat theater that hosts a wide variety of A-list entertainers, touring theatrical productions and arts-related educational programs; the Living Desert Zoo and Gardens, a 1,200-acre facility containing a wide array of plants and animals from desert regions around the world; and the Palm Desert Art in Public Places program, a museum without walls, featuring more than 150 works of art on permanent display throughout the city. iiiPage 152 iv Palm Desert’s active, five-star accredited Chamber of Commerce has more than 1,125 members who work to promote, support, and enhance business prosperity, civic vitality, and the quality of life within their community. Noted for its extensive array of retail options, including the world-famous upscale shopping destination of El Paseo, Palm Desert is home to a variety of malls and retail centers including The Shops at Palm Desert, Desert Crossing, The Gardens on El Paseo, and El Paseo Village. The internationally acclaimed Desert Willow Golf Resort, one of the nation’s premier municipal courses, boasts 36 holes of championship golf and stunning scenery in close proximity to first-class hotel accommodations and fine dining. In addition to being the home of the Coachella Valley’s only community college, College of the Desert, Palm Desert is the location of satellite Desert Willow Golf Resort campuses for both the University of California, Riverside, and California State University, San Bernardino, the region’s only public, four-year university. The State of California Employment Development Department Labor Market Information Division reported that the City of Palm Desert had an unemployment rate of 7.4% compared to Riverside County, which had a rate of 7.9%. The City, as a resort destination, and its jurisdictional workforce, have been impacted greatly by the extraordinary challenges caused by the worldwide COVID-19 pandemic and the State of California and County-wide closures that began at the height of the tourist season and while recovery is well underway, the variants of COVID-19 continue to challenge local businesses. The unemployment rate, while lower than that of Riverside County, is understandably higher in the City than in areas of California that do not rely as heavily on tourism. LONG-TERM FINANCIAL PLANNING In June 2021, the City Council approved a total of $48.16 million in funding for various capital improvement projects for the fiscal year of 2021-2022. Projects include resurfacing streets, sidewalk repairs and construction, accessibility improvements, street widening, improving drainage areas, park improvements, and improvements at Desert Willow Golf Resort and Parkview Office Complex. Certificates of Awards for Outstanding Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Palm Desert for its annual comprehensive financial report for the fiscal year ended June 30, 2020. This was the 24th consecutive year that the City has achieved this prestigious award. In order to receive the Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. Page 153 vPage 154 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Palm Desert California For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 Executive Director/CEO viPage 155 &,7<2)3$/0'(6(57 /LVWRI3ULQFLSDO2IILFLDOV DVRI-XQH &LW\&RXQFLO 0DQDJHU)RUPRI*RYHUQPHQW &,7<&281&,/ .$7+/((1.(//< 0D\RU -$1&+$51,. 0D\RU3UR7HPSRUH .$5,1$48,17$1,//$ &RXQFLO0HPEHU *,1$1(67$1'( &RXQFLO0HPEHU 6$%%<-21$7+$1 &RXQFLO0HPEHU &,7<$'0,1,675$7,21 72''+,/(0$1 &LW\0DQDJHU 5REHUW:+DUJUHDYHV-DQHW00RRUH &LW\$WWRUQH\ %HVW%HVW .ULHJHU//3 'LUHFWRURI)LQDQFH&LW\7UHDVXUHU 68&&(6625 $*(1&< 727+(3$/0'(6(575('(9(/230(17$*(1&< 72''+,/(0$1 ([HFXWLYH'LUHFWRU viiPage 156 Residents of theCity of Palm DesertMayor and City CouncilCity AttorneyCommissions and CommitteesCity ManagerviiiPage 157 INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council City of Palm Desert, California Report on the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of City of Palm Desert, California, (the City) as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Palm Desert, California, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the date of the financial statements. 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 Page 158 To the Honorable Mayor and Members of the City Council City of Palm Desert, California Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with the GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. According ly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reaso nable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Other Reporting Responsibilities Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules for the General Fund, Measure A fund, Prop A Fire Tax fund, Housing Asset fund, Housing Authority fund, the schedule of changes in net pension liability and related ratios, the schedules of plan contributions and the schedule of changes in net OPEB liability/(asset) and related ratios as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2Page 159 To the Honorable Mayor and Members of the City Council City of Palm Desert, California Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory section and statistical section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2021,on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Brea, California December 20, 2021 3Page 160 This page intentionally left blank 4Page 161 CITY OF PALM DESERT MANAGEMENT’S DISCUSSION AND ANALYSIS Our discussion and analysis of the City of Palm Desert’s financial performance for the fiscal year ended June 30, 2021, provides: a comparison of current year to prior year ending results based on the government-wide financial statements; an analysis of the City’s overall financial position and results of operations to assist users in evaluating the City’s financial position; a dis cussion of significant changes that occurred in the funds; and significant budget variances. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of known facts, decisions, and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the transmittal letter and the City’s financial statements. FINANCIAL HIGHLIGHTS x The City’s total assets and deferred outflows exceeded its liabilities and deferred inflows by $787.26 million (net position). x The City’s governmental activities net position increased $4.17 million, and the net position of the business-type activities increased $0.99 million. x During the year, the City’s revenues were $107.68 million and expenses were $103.51 million in its governmental activities, compared to fiscal year 2020, where revenues were $93.22 million and expenses were $106.51 million. x In the City’s business-type activities, expenses were $0.99 million less than the $10.82 million generated in golf course green fees, merchandise sales, rental income and other revenues compared to the prior year, where business-type activities revenues were $0.60 million less than its expenses. x The City’s governmental activities program revenues and gene ral revenues increased by $14.46 million, while program expenses decreased by $3.00 million. x Business-type activities revenues increased $1.96 million, from $8.86 million to $10.82 million. Expenses increased from $9.46 million to $9.83 million. x The City kept its General Fund expenditures within spending limits by $1.29 million. The revenues available for expenditures exceeded budget by $0.23 million. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Position and Statement of Activities (on pages 17, 18 and 19) provide information about the activities of the City as a whole and present a long-term view of the City’s finances. The fund financial statements start on page 22. For governmental activities, these fund statements tell how these services were financed in the short term as well as what remains for future spending. The fund financial statements also report the City’s operation in more detail than the government-wide statements by providing information about the City’s most significant funds and other funds. The remaining fiduciary fund statement provides financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. 5Page 162 REPORTING THE CITY AS A WHOLE The Statement of Net Position and the Statement of Activities: Our analysis of the City as a whole begins on page 17. One of the most important questions asked about the City’s finances is, “Is the City as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that answers this question. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City’s net position and changes in them.Net position is the difference between total assets and deferred outflows of resources less liabilities and deferred inflows, which is one way to measure the City’s financial health, or financial position. Over time, increases or decreases in the City’s net position are an indication of whether its financial health is improving or deteriorating. Other non-financial factors should be considered, however, such as changes in the economy that could cause a decrease in consumer spending. In the Statement of Net Position and the Statement of Activities, we separate City activities as follows: Governmental activities – Most of the City’s basic services are reported in this category, including general administration (city manager, city clerk, finance, etc.), housing and redevelopment, public safety (police and fire protection), public works, parks, recreation and culture departments. Property taxes, sales tax, transient occupancy tax, user fees, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues finance these activities. Business-type activities –The City charges customers to cover all or most of the cost of certain services it provides. The City’s municipal golf course, Desert Willow, and the City’s Parkview Office Complex activities are reported in this category. Component unit activities –The City includes one separate legal entity in its report –the Palm Desert Recreational Facilities Corporation. Although legally separate, this “component unit” is important because the City is financially accountable for it. REPORTING THE CITY’S MOST SIGNIFICANT FUNDS Fund Financial Statements: The fund financial statements pr ovide detailed information about the most significant funds and other funds, not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The City has three types of funds: governmental, proprietary and fiduciary. Governmental funds – Most of the City’s basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of results in the Governmental Fund financial statements to those in the Government-wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. 6Page 163 Proprietary funds –When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. The City’s enterprise funds are the same as the business-type activities we report in the government-wide statements, but provide more detail and information such as a statement of cash flows. Fiduciary funds –Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Palm Desert operations. The accounting used for fiduciary funds is much like that used for proprietary funds. THE CITY AS TRUSTEE Reporting the City’s Fiduciary Responsibilities: The City is the trustee, or fiduciary, for the Successor Agency to the Palm Desert Redevelopment Agency’s (Successor Agency) private-purpose trust fund and for certain custodial funds held on behalf of developers and its employees’ retiree service stipend fund. The City’s fiduciary activities are reported in separate Statement of Fiduciary Net Position, Statement of Changes in Fiduciary Net Position, Combining Statement of Statement of Assets and Liabilities-All Custodial Funds, and Combining Statement of Changes in Fiduciary Net Position-All Custodial Funds.We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. THE CITY AS A WHOLE During the fiscal year ending June 30, 2021, the City’s combined net position increased $5.16 million from $782.10 million to $787.26 million. A separate review of the net change in the governmental and business- type activities is provided for the reader. Our analysis focuses on the net position (Table 1) and changes in net position (Table 2) of the City’s governmental and business -type activities. 7Page 164 2021 2020 2021 2020 2021 2020 Current and restricted assets 358.67$ 344.53$ 9.39$ 7.65$ 368.06$ 352.18$ Capital assets 421.57 424.16 68.66 69.54 490.23 493.70 TOTAL ASSETS 780.24 768.69 78.05 77.19 858.29 845.88 Deferred outflows of resources 8.82$ 8.82$ -$ -$ 8.82$ 8.82$ Long-term liabilities outstanding 41.36 39.29 0.68 1.15 42.04 40.44 Other liabilities 34.49 26.92 1.32 0.98 35.81 27.90 TOTAL LIABILITIES 75.85 66.21 2.00 2.13 77.85 68.34 Deferred inflows of resources 2.00$ 4.26$ -$ -$ 2.00$ 4.26$ Net position: Net investment in capital assets 421.57 424.16 67.98 68.39 489.55 492.55 Restricted 197.08 196.86 --197.08 196.86 Unrestricted 92.56 86.02 8.07 6.67 100.63 92.69 TOTAL NET POSITION 711.21$ 707.04$ 76.05$ 75.06$ 787.26$ 782.10$ TABLE 1 NET POSITION As of June 30, 2021 and 2020 TotalActivities Business-TypeGovernmental Activities (IN MILLIONS) - 200 400 600 800 1,000 1,200 2021 2020 2021 2020 2021 2020 Governmental Activities Business-Type Activities TotalDollars in MillionsTable 1 - Graph Total Assets & Liabilities Total Assets Total Liabilities 8Page 165 The City’s governmental activities net position increased $4.17 million. The City’s net position is made up of three components: Net investment in capital assets; restricted net position; and unrestricted net position. For governmental activities, unrestricted net position, which represents the part of net position that can be used to finance day-to-day operations, accounted for 13.00 percent of the overall total net position. Unrestricted net position increased $6.54 million from $86.02 million in 2020 to $92.56 million in 2021. The increase in unrestricted net position was the result of the Federal grants for COVID-19 pandemic relief, along with the increase in sales tax. In fiscal year 2021 the city received COVID-19 reimbursements grants (ARPA) totaling $5.65 million, additionally total sales tax increased from $18.44 million in 2020 compared to $21.16 million in 2021, an increase of $2.72 million. The increase of $0.22 million in restricted net position was due to restricted special projects increasing by $2.81 million from the prior year, while restricted capital projects fund decreased by $2.59 million. During the year, construction in major projects continued; phase 2 of the San Pablo improvements, parking lot modifications at President’s Plaza and the annual street resurfacing program totaling $11.89 million. Restricted special projects increase was mainly due to the Genera l Fund transfer of funds to the Fire Fund to cover future capital projects in the amount of $3.80 million. Investment in capital assets decreased $2.59 million. The decrease is attributed to current year depreciation of $11.48 million. The calculation of investment in capital assets includes outstanding debt used to purchase or construct the City’s capital assets. The City’s governmental activities total assets and deferred outflow of resources combined increased $11.55 million from $777.51 million in 2020 to $789.06 million in 2021. The increase is attributable to an increase in due from other governments which increased $7.27 million, from $4.79 million in the prior year to $12.06 million this fiscal year. Additionally, cash increased from $192.81 million in 2020 to $213.01 million in 2021, an increase of $20.20 million. Increases in sales tax, transient occupancy tax and lower expenditures in public safety and public works also contributed to the increase in total assets and deferred inflows. Total liabilities and deferred inflows combined increased by $7.38 million from $70.47 million in 2020 to $77.85 million in 2021. The major increase was with deposits payable which increased from $0.59 million to $5.79 million as a result of GASB 84 implementation which changed how agency deposits are recognized. Additionally, the City’s OPEB liability increased by $1.98 million from $34.82 million in 2020 to $36.80 million in 2021. The net position of the business-type activities recognized an increase of $0.99 million, from $75.06 million during 2020 to $76.05 million during 2021. The main factor for the increase in net position was overall decrease in capital lease obligation which decreased by $0.47 million. Additionally, increase in gross revenues from the golf resort of $2.07 million from the prior year further added to the increase in net position. Total assets in the business-type activities increased by $0.86 million from $77.19 million in 2020 to $78.05 million in 2021. The major increase was related to an increase in gross revenues of $2.07 million. Total liabilities in the business-type activities decreased $0.13 million from $2.13 million in 2020 to $2.00 million in 2021. The decrease in debt obligation represents the majority of the decrease. In 2020 debt obligation was $1.15 million compared to $0.68 million in 2021, a decrease of $0.47 million. 9Page 166 2021 2020 2021 2020 2021 2020 REVENUES: Program Revenues: Charges for services 31.49$ 30.14$ 10.47$ 8.41$ 41.96$ 38.55$ Operating grants and contributions 10.61 10.42 --10.61 10.42 Capital grants and contributions 16.84 3.66 0.22 0.18 17.06 3.84 General Revenues: Property taxes 12.22 11.67 --12.22 11.67 Transient occupancy tax 10.78 12.07 --10.78 12.07 Sales tax 21.16 18.44 --21.16 18.44 Other taxes 3.07 3.02 --3.07 3.02 Investment earnings 0.30 2.37 0.02 0.16 0.32 2.53 Gain on sale of capital assets -0.08 ---0.08 Other revenues 1.21 1.35 0.11 0.11 1.32 1.46 TOTAL REVENUES 107.68 93.22 10.82 8.86 118.50 102.08 EXPENSES: General government 25.61 24.30 --25.61 24.30 Housing and redevelopment 10.50 8.80 --10.50 8.80 Public safety 34.28 37.29 --34.28 37.29 Parks, recreation and culture 7.97 7.65 --7.97 7.65 Public works 24.98 28.27 --24.98 28.27 Interest on long-term debt 0.17 0.20 --0.17 0.20 Golf Course-Desert Willow --8.96 8.60 8.96 8.60 Office Complex-Parkview --0.87 0.86 0.87 0.86 TOTAL EXPENSES 103.51 106.51 9.83 9.46 113.34 115.97 INCREASE (DECREASE) IN NET POSITION 4.17 (13.29) 0.99 (0.60) 5.16 (13.89) BEGINNING NET POSITION 707.04 720.33 75.06 75.66 782.10 795.99 ENDING NET POSITION 711.21$ 707.04$ 76.05$ 75.06$ 787.26$ 782.10$ TABLE 2 CHANGES IN NET POSITION As of June 30, 2021 and 2020 TotalActivities Business-TypeGovernmental Activities (IN MILLIONS) 10Page 167 Table 2- Graph Changes in Net Position Governmental Activities Total revenue increased by $14.46 million from $93.22 million to $107.68 million. Factors that contributed to the changes in revenues are as follows: x Transient occupancy tax decrease from $12.07 million in 2020 to $10.78 million in 2021, a decrease of $1.29 million. Hotels were closed to the public for a period of time due to the COVID-19 pandemic. x The City’s sales tax increased by $2.72 million from $18.44 million in 2020 to $21.16 million in 2021. Retail and restaurants were allowed to open for business after the economic shutdown from the pandemic, and payments were made on sales tax deferrals from the prior year and the City’s allocation of taxes from online sales increased. x In 2021, investment rates continued to be near or below 1%, as a result, the City recognized $0.30 million in investment earnings compared to $2.37 million in 2020, a decrease of $2.07 million. x Charges for services increased from $30.14 million in 2020 to $31.49 million in 2021. Cannabis tax recognized an increase of $1.15 million. x Operating contributions and grants recognized a minor increase of $0.19 million. This was the result of small increases in CDBG and COPS AB3229 grants. x Capital contribution and grants increased by $13.18 Million This was the result of a Federal ARPA funds for COVID-19 relief of $5.65 million and reimbursements from Cal-trans of $2.43 million and CVAG of $5.14 million for street improvements. Total expenses decreased from $106.51 million to $103.51 million, a 2.81 percent decrease. The primary reason for the decrease was reductions in both the public works and public safety function that accounted for a combined decrease of $6.30 million. Police and Fire combined expenditures decreased $2.57 million, from $34.56 Million in 2020 to $31.99 million in 2021. - 100 200 300 400 500 600 700 800 2021 2020 Governmental ActivitiesDollars in millions - 10 20 30 40 50 60 70 80 2021 2020 Business-Type Activities Beginning Net Position Total Revenues Ending Net Position Total Expenses 11Page 168 The following schedule represents the net cost of providing services: Governmental Activities Net (Expense) Revenue (In Millions) Business-type Activities In the business-type activities, total revenues increased by 22.12 percent from $8.86 million to $10.82 million, a $1.96 million increase. The main factor for the change in total revenues was the overall increase in the combined fees and rentals revenues which recognized a $2.07 million growth from prior year. The Parkview Office Complex revenues decreased slightly. Occupancy decreased from 91% in 2020 to 84% in 2021. Operating expenses for business-type activities increased by $0.37 million from $9.46 million to $9.83 million. The majority of the increase is related to the growth in operations at Desert Golf resort which recognized an $0.40 million increase in overall expenditures. Parkview’s recognized minor increase in overall costs from the prior year. 2021 2020 General government ($20.57)($19.56) Housing and redevelopment (2.63)0.14 Public safety (9.01)(20.76) Parks, recreation and culture (4.94)(4.33) Public works (7.23)(17.58) Interest on long term debt (0.18)(0.20) Total ($44.56)($62.29) 47% 7% 20% 11% 15%0% 2021 Governmental Activities Net (Expense) Revenue 32% 0%33% 6% 29%0% 2020 Governmental Activities Net (Expense) Revenue General government Housing and redevelopment Public safety Parks, recreation & culture Public works Interest on long term debt 12Page 169 THE CITY’S FUNDS On page 22, the governmental funds balance sheet is shown. The combined fund balance of $312.57 million increased $7.46 million from $305.11 million. This total includes the General Fund balance of $100.41 million, which increased by $7.53 million from the prior year. The City’s General Fund balance has a non-spendable balance of $4.17 million, committed balance of $73.86 million, assigned balance of $16.70 million, and $5.68 million of unassigned fund balance. The increase in the General Fund’s balance was due in part to the COVID-19 relief grants received of $5.65 million and increased sales tax of $2.72 million. Other major fund balance changes are noted below: x The Prop A Fire Tax Special Revenue Fund: The fund balance increased $4.13 million. The City transferred $3.8 million to cover future capital projects. x The Housing Asset Fund: The fund had a minor increase of $0.05 million. x Measure A Special Revenue Fund: the fund balance increased from $20.46 million to $22.15 million. The increase was related to projects not started. x The Housing Authority Fund: The fund balance had a decrease of $1.08 million. The decrease was directly related to increased capital improvement costs for One Quail and Candlewood apartment complexes. x Capital Properties Fund: The fund balance decreased $6.78 million from $61.83 million to $55.05 million. The decrease was due to the capital project expenditures of $6.80 million. More detailed information about the combined fund balance reserves is presented in Note 12 to the financial statements. General Fund Budgetary Highlights Based upon recommendations from the staff, the City Council revised the budget several times during the year. Adjustments were made on a monthly basis as City staff requested additional appropriations to cover the cost of projects that either had change orders for additional work, or were underestimated. At mid-year, no adjustments were requested as department budgets met current demands. At year-end, budgets were adjusted for unanticipated approved expenditures. All amendments that either increase or decrease appropriations are approved by the City Council. For the City’s General Fund, the actual ending revenues of $64.49 million were $0.23 million more than the final budgeted revenues of $64.26 million. Sales and transient occupancy taxes continue to be the top two revenue generators for the City, totaling $31.91 million or 49.48 percent of the total General Fund actual revenues. The original budget was $48.64 million compared to the final budget of $64.26 million an increase of $15.62 million. The City increase in the final budget was related to the unanticipated increase in both sales tax and transient occupancy tax which recognized a combined increase of $7.65 million, and state and federal grants related to COVID-19 in the amount of $5.65 million, along with minor increases in several other revenue sources which account for the overall increase to the final budget. The General Fund actual ending expenditures of $56.95 million were $1.29 million less than the final budget of $58.24 million. There were changes in the original budget compared to the final budget during the year. The original expenditure budget was $58.79 million compared to the final budget of $58.24 million, a $0.55 million decrease. During the year, the following represent the major changes between original budget and final budget; $0.92 million was reduced for police services and $0.61 million was reduced for community promotions. These reductions exceeded any increases that were recognized in the other expense categories. 13Page 170 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At the end of 2021, the City had $490.23 million invested in a broad range of capital assets including land, streets, bridges, drainage systems, traffic lights, parks, buildings, artwork, vehicles, golf courses and equipment (See Table 3). This amount represents a net decrease (including additions and deductions) of $3.47 million over the prior year, due mainly to depreciation. 2021 2020 2021 2020 2021 2020 Land 81.96$ 81.96$ 53.31$ 53.31$ 135.27$ 135.27$ Construction-in-progress 10.60 3.99 --10.60 3.99 Buildings and improvements other than buildings 83.51 88.90 14.13 14.55 97.64 103.45 Machinery and equipment 4.55 3.27 1.22 1.68 5.77 4.95 Infrastructure & right-of-way 240.95 246.04 --240.95 246.04 TOTALS 421.57$ 424.16$ 68.66$ 69.54$ 490.23$ 493.70$ TABLE 3 CAPITAL ASSETS AT YEAR-END For the years ended June 30, 2021 and 2020 TotalActivities Business-TypeGovernmental Activities (NET OF DEPRECIATION, IN MILLIONS) - 100 200 300 400 500 600 700 2021 2020 2021 2020 2021 2020 Governmental Activities Business-Type Activities TotalDollars in millionsTable 3 - Graph Capital Assets at Year-End (Net of Depreciation in Millions) Land Construction-in-Progress Buildings & Improvements other than buildings Equipment Infrastructure & right-of-way Totals 14Page 171 This year’s major additions included (in millions): Street improvements $ 7.29 Park and recreation improvements 0.02 Building improvements 0.09 Equipment and software purchases 2.29 $9.69 The City’s fiscal year 2022 adopted capital budget calls for an additional $48.16 million to be spent, plus continuing capital projects of $39.88 million from prior year, with the majority being spent on streets, infrastructure, buildings, parks, and golf course improvements. Projects will be funded with existing bond proceeds or funds that have been designated by an outside party for specific use. More detailed information about the City’s capital assets is presented in Note 1f and Note 5 to the financial statements. Debt At year-end, the City’s governmental activities had $41.36 million in bonds, claims, compensated absences, and pension liability versus $39.29 million last year, an increase of $2.07 million as shown in Table 4. The major increase was the City’s Net Pension liability that went from $34.82 million in 2020 to $36.80 million in 2021, an increase of $$1.98 million. In addition, the City’s meet all its annual bond debt payment requirements decreasing their balances from $1.85 million to $1.67 million. 2021 2020 2021 2020 2021 2020 Compensated absences payable 2.50$ 2.57$ -$ -$ 2.50$ 2.57$ Capital leases --0.68 1.15 0.68 1.15 Claims and judgements payable 0.39 0.05 --0.39 0.05 Special assessments debt with government commitment 1.13 1.18 --1.13 1.18 Limited Obligation Improvement bonds 0.54 0.67 --0.54 0.67 Pension liability 36.80 34.82 -- 36.80 34.82 TOTALS 41.36$ 39.29$ 0.68$ 1.15$ 42.04$ 40.44$ TABLE 4 OUTSTANDING DEBT AT YEAR-END For the years ended June 30, 2021 and 2020 TotalActivities Business-TypeGovernmental Activities (IN MILLIONS) The City was able to meet its current year debt obligation in a timely manner. Bonds that were issued in prior years have been used to finance various capital projects. 15Page 172 The City’s business-type activities debt decreased $0.47 million from $1.15 million to $0.68 million. Debt in the business-type activities is for capital leasing of equipment. The City’s golf course uses leasing as an alternative to purchasing golf carts and maintenance equipment to maintain a cash flow to operate the day-to-day activities. The City’s business-type activities were able to meet their current year debt obligation in a timely manner. More detailed information about the City’s long -term liabilities is presented in Note 6 through Note 9 and Note 11 to the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS During the fiscal year the State of California lifted COVID-19 restrictions which allowed the economy to move towards operating fully. Although the economy has begun to operate and travel restrictions lifted, the uncertainty relating to the COVID-19 Coronavirus pandemic, could once again impact the City’s two largest revenue sources, sales tax, and transient occupancy tax. Consequently, the City remains committed to spend cautiously while prioritizing projects that support recovery from the COVID-19 Coronavirus. In preparing the budget for fiscal year 2022, management carefully considered operational adjustments due to the extraordinary economic challenges faced by reopening and recovery of the global COVID-19 pandemic and its effects, while considering the wellbeing and safety of Palm Desert’s residents, visitors and businesses. It remains a commitment of the City to provide a high level of service and maintenance of City facilities by allocating resources for public safety and necessary infrastructure improvements. The 2022 budget is further a reflection of that commitment by authorizing the use of reserves to balance the General Fund operating budget, if needed. The City’s 2021-2022 Financial Plan can be found on the City’s website at www.cityofpalmdesert.org. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our residents, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and serves as a resource to demonstrate the stewardship and accountability for the public monies it receives. If you have questions about this report or need additional financial information, please contact the Finance Department at (760) 346-0611 or info@cityofpalmdesert.org. 16Page 173 CITY OF PALM DESERT STATEMENT OF NET POSITION Component Unit Governmental Business-TypeActivities Activities Total ASSETS: Cash and investments 213,010,916$9,641,278$ 222,652,194$866,936$ Receivables: Accounts 3,222,414 194,653 3,417,067 41,414 Notes 1,130,000 - 1,130,000 - Accrued interest 2,510,187 - 2,510,187 - Allowance for interest on Successor Agency (1,890,000)- (1,890,000)- Loans 6,932,696 - 6,932,696 - Internal balances 2,000,000 (2,000,000)-- Prepaid costs 203,259 53,391 256,650 3,404 Deposits 15,129,753 - 15,129,753 - Due from other governments 12,056,782 - 12,056,782 - Inventories 5,790 129,065 134,855 47,347 Property held for resale 61,516 -61,516 - Due from component unit 420,000 1,370,792 1,790,792 - Restricted assets: Cash with fiscal agent 103,076,936 - 103,076,936 - Advances to Successor Agency 6,000,000 - 6,000,000 - Allowance on Advances to Successor Agency (6,000,000)- (6,000,000)- Net OPEB asset 805,423 -805,423 - Capital assets, not being depreciated 213,764,381 53,304,965 267,069,346 - Capital assets, net of depreciation 207,804,438 15,352,337 223,156,775 - TOTAL ASSETS 780,244,491 78,046,481 858,290,972 959,101 DEFERRED OUTFLOWS OF RESOURCES: Deferred outflows from pensions 6,365,230 - 6,365,230 - Deferred outflows from OPEB 2,456,165 - 2,456,165 - Total Deferred Outflows of Resources 8,821,395 - 8,821,395 - LIABILITIES: Accounts payable 12,740,931 918,394 13,659,325 52,679 Accrued liabilities 438,134 110,875 549,009 33,031 Accrued interest 56,038 -56,038 - Due to primary government --- 1,790,692 Unearned revenue 15,463,160 264,138 15,727,298 144,048 Deposits payable 5,792,557 26,590 5,819,147 - Noncurrent liabilities: Due within one year Compensated absences 300,000 -300,000 - Capital leases -488,548 488,548 - Long-term debt 108,000 -108,000 - Claims and judgements 384,643 -384,643 - Due in more than one year Compensated absences 2,201,835 - 2,201,835 - Capital leases -187,428 187,428 - Long-term debt 1,564,000 - 1,564,000 - Net pension liability 36,803,724 - 36,803,724 - TOTAL LIABILITIES 75,853,022 1,995,973 77,848,995 2,020,450 DEFERRED INFLOWS OF RESOURCES: Deferred inflows from OPEB 2,004,106 - 2,004,106 - Total Deferred Inflows of Resources 2,004,106 - 2,004,106- NET POSITION: Net investment in capital assets 421,568,819 67,981,326 489,550,145- Restricted for: Special projects 97,546,130 - 97,546,130 - Capital projects 99,536,759 - 99,536,759 - Unrestricted (deficit)92,557,050 8,069,182 100,626,232 (1,061,349) TOTAL NET POSITION 711,208,758$76,050,508$ 787,259,266$(1,061,349)$ JUNE 30, 2021 Primary Government Palm Desert Recreational Facilities Corporation See Notes to Financial Statements 17Page 174 CITY OF PALM DESERT STATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2021 Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Primary Government: Governmental activities: General government 25,610,212$ 2,437,840$ 1,104,120$ 1,501,625$ Housing and redevelopment 10,496,579 7,455,959 -410,236 Public safety 34,280,941 18,828,021 86,873 6,355,308 Parks, recreation and culture 7,969,386 325,485 2,443,800 255,390 Public works 24,979,279 2,443,299 6,982,786 8,314,001 Interest on long-term debt 176,259 --- Total governmental activities 103,512,656 31,490,604 10,617,579 16,836,560 Business-type activities: Desert Willow Golf Course 8,960,991 9,171,607 -220,198 Parkview Office Complex 872,212 1,291,020 -- Total Business-Type Activities 9,833,203 10,462,627 - 220,198 Total Primary Government 113,345,859$ 41,953,231$ 10,617,579$ 17,056,758$ Component Unit: Palm Desert Recreational Facilities Corp.2,343,554$ 2,181,902$ -$ -$ General Revenues: Taxes: Property taxes, levied for general purpose Transient occupancy taxes Sales taxes Franchise taxes Investment earnings Miscellaneous Total general revenues Change in net position Net position - beginning of year Net position - end of year Program Revenues Functions/Programs See Notes to Financial Statements 18Page 175 Net (Expenses) Revenues and Changes in Net Position Primary Government Component Unit Governmental Business-Type Activities Activities Total (20,566,627)$ -$ (20,566,627)$ -$ (2,630,384)- (2,630,384)- (9,010,739)- (9,010,739)- (4,944,711)- (4,944,711)- (7,239,193)- (7,239,193)- (176,259)- (176,259)- (44,567,913)- (44,567,913)- -430,814 430,814 - -418,808 418,808 - -849,622 849,622 - (44,567,913) 849,622 (43,718,291)- --- (161,652) 12,221,109 - 12,221,109 - 10,776,751 - 10,776,751 - 21,156,220 - 21,156,220 - 3,066,989 - 3,066,989 - 301,330 20,283 321,613 - 1,214,362 114,283 1,328,645 - 48,736,761 134,566 48,871,327 - 4,168,848 984,188 5,153,036 (161,652) 707,039,910 75,066,320 782,106,230 (899,697) 711,208,758$ 76,050,508$ 787,259,266$ (1,061,349)$ Palm Desert Recreational Facilities Corporation See Notes to Financial Statements 19Page 176 This page intentionally left blank 20Page 177 FUND FINANCIAL STATEMENTS 21Page 178 CITY OF PALM DESERT BALANCE SHEET GOVERNMENTAL FUNDSJUNE 30, 2021 General ASSETS: Pooled cash and investments 99,017,554$ 20,380,021$ 7,867,672$ 4,059,601$ Receivables: Accounts 1,965,499 - 356,710 25 Assessments ---- Notes 1,130,000 --- Interest 627,597 -- 416,518 Allowance for interest on Successor Agency (146,411)-- (378,000) Loans 14,978 -- 5,148,813 Prepaid costs 139,201 --- Deposits - 15,109,753 -- Due from other governments 5,970,791 2,571,439 405,099 - Due from other funds 3,991,706 --- Inventories ---- Property held for resale ---61,516 Due from component unit 420,000 --- Restricted assets: Cash and investments with fiscal agent - 134,439 - 39,363,043 Advances to Successor Agency 581,000 --- Allowance for Advances to Successor Agency (581,000)--- TOTAL ASSETS 113,130,915$ 38,195,652$ 8,629,481$ 48,671,516$ Liabilities, Deferred Inflows of Resources and Fund Balances LIABILITIES: Accounts payable 5,826,107$ 931,114$ 82,642$ 15,020$ Accrued liabilities 329,339 --- Unearned revenues - 15,109,753 -- Deposits payable 5,233,511 --- Due to other funds ---- TOTAL LIABILITIES 11,388,957 16,040,867 82,642 15,020 DEFERRED INFLOWS OF RESOURCES: Unavailable revenue 1,328,494 --37,620 1,328,494 --37,620 FUND BALANCES: Nonspendable 4,178,180 --- Restricted - 22,154,785 8,546,839 48,618,876 Committed 73,856,851 --- Assigned 16,696,825 --- Unassigned 5,681,608 --- Total Fund Balances 100,413,464 22,154,785 8,546,839 48,618,876 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 113,130,915$ 38,195,652$ 8,629,481$ 48,671,516$ Housing Asset Fund Prop A Fire Tax Measure A Special Revenue Funds See Notes to Financial Statements 22Page 179 CITY OF PALM DESERT BALANCE SHEET GOVERNMENTAL FUNDSJUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Assessments Notes Interest Allowance for interest on Successor Agency Loans Prepaid costs Deposits Due from other governments Due from other funds Inventories Property held for resale Due from component unit Restricted assets: Cash and investments with fiscal agent Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS Liabilities, Deferred Inflows of Resources and Fund Balances LIABILITIES: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenue FUND BALANCES: Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Revenue Funds Capital Projects Funds 16,913,297$ -$ 54,355,138$ 202,593,283$ 71,982 -828,198 3,222,414 --1,188,117 1,188,117 ---1,130,000 -1,250 1,464,822 2,510,187 -- (1,365,589) (1,890,000) --1,768,905 6,932,696 --18,427 157,628 --20,000 15,129,753 --2,846,582 11,793,911 --500,000 4,491,706 --5,790 5,790 ---61,516 ---420,000 3,193,503 58,468,585 1,917,366 103,076,936 --5,419,000 6,000,000 -- (5,419,000) (6,000,000) 20,178,782$ 58,469,835$ 63,547,756$ 350,823,937$ 116,486$ 2,421,596$ 2,019,426$ 11,412,391$ 104,207 -4,588 438,134 57,698 -295,709 15,463,160 555,266 -3,780 5,792,557 - 999,050 1,492,656 2,491,706 833,657 3,420,646 3,816,159 35,597,948 --1,287,350 2,653,464 --1,287,350 2,653,464 --18,427 4,196,607 7,469,637 55,049,189 26,529,194 168,368,520 11,875,488 -4,436,891 90,169,230 -- 27,459,735 44,156,560 -- -5,681,608 19,345,125 55,049,189 58,444,247 312,572,525 20,178,782$ 58,469,835$ 63,547,756$ 350,823,937$ Other Governmental Funds Total Governmental Funds Capital Properties Housing Authority See Notes to Financial Statements 23Page 180 This page intentionally left blank 24Page 181 CITY OF PALM DESERT RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2021 Total fund balance for governmental funds 312,572,525$ Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets net of depreciation have not been included as financial resources in the governmental fund activity.417,699,467 Deferred outflows related to pension and OPEB related items are not included in the governmental fund activity: Pension Contributions made after the measurement date 4,732,417$ Differences between expected and actual experiences 792,742 Net difference between projected and actual earning on plan investments 840,071 6,365,230 OPEB Contributions made after the measurement date 1,140,548 Changes in assumptions 1,242,802 Differences between expected and actual experiences 6,588 Net difference between projected and actual earning on OPEB plan investments 66,227 2,456,165 Deferred inflows related to pension and OPEB related items are not included in the governmental fund activity: OPEB Changes in assumptions (693) Differences between expected and actual experiences (2,003,413) (2,004,106) Long-term debt, claims and judgements and net pension liability are not in the governmental fund activity: Bonds (1,672,000) Claims and judgments (384,643) Net pension liability (36,803,724) (38,860,367) Net OPEB assets are not available to pay for current-period expenditures and therefore are not reported in the governmental funds 805,423 Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due.(56,038) Unavailable revenues are not reported as revenues in governmental funds and thus have the effect of decreasing fund balances. For the City as a whole, however, the collection of these receipts increases the net position in the Statement of Net Position and results in revenues in the Statement of Activities.1,465,347 Internal service funds are used by management to charge the costs of certain activities, such as equipment and compensated absences to individual funds. The assets and liabilities of the internal service fund must be added to the Statement of Net Position.10,765,112 Net Position of Governmental Activities 711,208,758$ See Notes to Financial Statements 25Page 182 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2021 General REVENUES: Taxes 49,724,775$ 3,505,628$ 7,889,982$ -$ Special assessments collected -- 2,140,682 - Licenses and permits 1,265,615 --- Intergovernmental revenues 6,930,667 2,924,394 1,101,349 - Rental income 66,913 --- Charges for services 1,561,555 - 2,571,832 - Investment earnings 284,744 47,100 35,596 218,227 Fines and forfeitures 145,572 --- Miscellaneous 991,953 -24,845 39,467 TOTAL REVENUES 60,971,794 6,477,122 13,764,286 257,694 EXPENDITURES: Current: General government 19,322,057 --- Public safety 20,788,228 - 13,169,943 - Parks, recreation and culture 3,980,724 --- Public works 5,369,541 4,633,581 -- Housing and redevelopment --- 205,100 Capital outlay 20,544 152,658 265,706 - Debt service: Principal retirement ---- Interest and fiscal charges ---- TOTAL EXPENDITURES 49,481,094 4,786,239 13,435,649 205,100 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 11,490,700 1,690,883 328,637 52,594 OTHER FINANCING SOURCES (USES): Transfers in 3,515,966 - 3,800,000 - Transfers out (7,471,753)--- TOTAL OTHER FINANCING SOURCES (USES)(3,955,787)- 3,800,000 - NET CHANGE IN FUND BALANCES 7,534,913 1,690,883 4,128,637 52,594 FUND BALANCES - BEGINNING OF YEAR 92,878,551 20,463,902 4,418,202 48,566,282 FUND BALANCES - END OF YEAR 100,413,464$ 22,154,785$ 8,546,839$ 48,618,876$ Measure A Prop A Fire Tax Housing Asset Fund Special Revenue Funds See Notes to Financial Statements 26Page 183 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Taxes Special assessments collected Licenses and permits Intergovernmental revenues Rental income Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR Special Revenue Funds Capital Projects Funds -$ -$ 4,088,937$ 65,209,322$ -- 1,240,975 3,381,657 --239,079 1,504,694 -- 9,180,269 20,136,679 7,192,074 -61,432 7,320,419 --756,247 4,889,634 35,886 20,500 656,675 1,298,728 --2,099147,671 316,914 - 2,403,659 3,776,838 7,544,874 20,500 18,629,372 107,665,642 -2,500 4,153,986 23,478,543 --76,931 34,035,102 -- 2,092,291 6,073,015 - 5,682,157 2,848,140 18,533,419 8,384,337 -250,122 8,839,559 - 1,117,520 6,284,010 7,840,438 --174,000 174,000 --184,529 184,529 8,384,337 6,802,177 16,064,009 99,158,605 (839,463) (6,781,677) 2,565,363 8,507,037 -- 2,870,375 10,186,341 (243,032)- (3,515,966)(11,230,751) (243,032)- (645,591) (1,044,410) (1,082,495) (6,781,677) 1,919,772 7,462,627 20,427,620 61,830,866 56,524,475 305,109,898 19,345,125$ 55,049,189$ 58,444,247$ 312,572,525$ Other Governmental Funds Total Governmental Funds Housing Authority Capital Properties See Notes to Financial Statements 27Page 184 This page intentionally left blank 28Page 185 CITY OF PALM DESERT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2021 Net change in fund balances - total governmental funds 7,462,627$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. Capital outlay 7,840,438$ Loss on disposal and transfer of capital assets (1,033,109) Depreciation (10,759,140) (3,951,811) Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.174,000 Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Net change in accrued interest for the current period 8,270 Net change in claims and judgments for the current period (337,648)(329,378) Pension obligation and OPEB expenses are expenditures in the governmental funds, but reduce the Net Pension Liability and Net OPEB Liability in the statement of net position: Pension expense (106,234) OPEB expense 1,153,223 1,046,989 Unavailable revenues are not reported as revenues in governmental funds and thus has the effect of decreasing fund balances. For the City as a whole, however, the collection of these receipts increases the net position in the Statement of Net Position and results in revenues in the Statement of Activities.(634,236) Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities.400,657 Change in Net Position of Governmental Activities 4,168,848$ See Notes to Financial Statements 29Page 186 CITY OF PALM DESERT STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2021 Major Fund Other Fund ASSETS: CURRENT ASSETS: Cash and investments 2,950,132 $ 6,691,146 $ 9,641,278$ 10,417,633 $ Receivables: Accounts 111,752 82,901 194,653 - Prepaid costs 53,391 -53,391 45,631 Due from other governments ---262,871 Inventories 129,065 -129,065 - Due from component unit (PDRFC)1,370,792 -1,370,792 - TOTAL CURRENT ASSETS 4,615,132 6,774,047 11,389,179 10,726,135 CAPITAL ASSETS: Nondepreciable 53,304,965 - 53,304,965 - Depreciable, net 9,408,540 5,943,797 15,352,337 3,869,352 CAPITAL ASSETS, NET 62,713,505 5,943,797 68,657,302 3,869,352 TOTAL ASSETS 67,328,637$ 12,717,844$ 80,046,481$ 14,595,487$ LIABILITIES: CURRENT LIABILITIES: Accounts payable 877,652$ 40,742$ 918,394$ 1,328,540$ Accrued liabilities 110,875 -110,875 - Unearned revenues 255,228 8,910 264,138 - Deposits payable -26,590 26,590 - Due to other funds 2,000,000 -2,000,000 - Compensated absences ---300,000 Capital leases 488,548 -488,548 - TOTAL CURRENT LIABILITIES 3,732,303 76,242 3,808,545 1,628,540 NONCURRENT LIABILITIES: Compensated absences --- 2,201,835 Capital leases 187,428 -187,428 - TOTAL NONCURRENT LIABILITIES 187,428 -187,428 2,201,835 TOTAL LIABILITIES 3,919,731 76,242 3,995,973 3,830,375 Net Position: Net investment in capital assets 62,037,529 5,943,797 67,981,326 3,869,352 Unrestricted 1,371,377 6,697,805 8,069,182 6,895,760 Total Net Position 63,408,906 12,641,602 76,050,508 10,765,112 Total Liabilities, Deferred Inflows of Resources, and Net Position 67,328,637$ 12,717,844$ 80,046,481$ 14,595,487$ Parkview Office Complex Total Enterprise Funds Governmental Activities - Internal Service Funds Business-Type Activities - Enterprise Funds Desert Willow Golf Course See Notes to Financial Statements 30Page 187 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2021 Major Fund Other Fund OPERATING REVENUES: Fees and rentals 7,894,823$ 1,291,020$ 9,185,843$ -$ Miscellaneous 114,283 -114,283 - Merchandise sales 1,276,784 -1,276,784 - TOTAL OPERATING REVENUES 9,285,890 1,291,020 10,576,910 - OPERATING EXPENSES: General and administrative 2,411,530 196,269 2,607,799 409,738 Cost of merchandise 486,019 -486,019 - Maintenance and operations 4,867,275 362,280 5,229,555 396,940 Depreciation and amortization 1,115,872 313,663 1,429,535 718,948 TOTAL OPERATING EXPENSES 8,880,696 872,212 9,752,908 1,525,626 OPERATING INCOME (LOSS)405,194 418,808 824,002 (1,525,626) NONOPERATING REVENUES (EXPENSES) Intergovernmental ---637,393 Interest revenue 1,460 18,823 20,283 20,907 Interest expense (80,295)-(80,295)- Loss on disposal of capital assets ---(8,202) TOTAL NONOPERATING REVENUES (EXPENSES)(78,835)18,823 (60,012)650,098 INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS & TRANSFERS 326,359 437,631 763,990 (875,528) CAPITAL CONTRIBUTIONS 220,198 -220,198 231,775 TRANSFERS IN - - - 1,044,410 CHANGE IN NET POSITION 546,557 437,631 984,188 400,657 NET POSITION - BEGINNING OF YEAR 62,862,349 12,203,971 75,066,320 10,364,455 NET POSITION - END OF YEAR 63,408,906$ 12,641,602$ 76,050,508$ 10,765,112$ Parkview Office Complex Business-Type Activities - Enterprise Funds Total Enterprise Funds Governmental Activities - Internal Service Funds Desert Willow Golf Course See Notes to Financial Statements 31Page 188 CITY OF PALM DESERT STATEMENT OF CASH FLOWS PROPRIETARY FUNDSYEAR ENDED JUNE 30, 2021 Major Fund Other Fund CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 9,003,795$ 1,286,129$ 10,289,924$ -$ Payments to suppliers (7,371,516)(551,960) (7,923,476) (456,322) Cash paid to employees for services ---(482,974) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,632,279 734,169 2,366,448 (939,296) CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES: Cash received from other funds --- 1,044,410 NET CASH PROVIDED BY NONCAPITAL AND RELATED FINANCING ACTIVITIES - - - 1,044,410 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Received from other Government ---374,522 Purchases of capital assets (94,253)(258,866) (353,119) (523,039) Principal paid on leases (469,035)- (469,035)- Interest paid on leases (54,745)-(54,745)- NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (618,033)(258,866) (876,899) (148,517) CASH FLOWS FROM INVESTING ACTIVITIES: Interest and dividends 1,460 18,823 20,283 20,907 NET CASH PROVIDED BY INVESTING ACTIVITIES 1,460 18,823 20,283 20,907 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,015,706 494,126 1,509,832 (22,496) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 1,934,426 6,197,020 8,131,446 10,440,129 CASH AND CASH EQUIVALENTS - END OF YEAR 2,950,132$ 6,691,146$ 9,641,278$ 10,417,633$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)405,194$ 418,808$ 824,002$ (1,525,626)$ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 1,115,872 313,663 1,429,535 718,948 Changes in assets and liabilities: (Increase) decrease in receivables, net 102,048 (3,612)98,436 - (Increase) decrease in prepaid costs (1,778)-(1,778)8,057 (Increase) decrease in inventories 76,964 -76,964 - (Increase) decrease in due from component unit (401,119)- (401,119)- Increase (decrease) in accounts payable and accrued liabilities 318,122 6,589 324,711 (67,439) Increase (decrease) in deposits payable -2,125 2,125 - Increase (decrease) in unearned revenue 16,976 (3,404)13,572 - Increase (decrease) in compensated absences ---(73,236) Total Adjustments 1,227,085 315,361 1,542,446 586,330 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,632,279$ 734,169$ 2,366,448$ (939,296)$ NONCASH ITEMS: Capital Contributions 220,198$ -$ 220,198$ 231,577$ Governmental Activities - Internal Service Funds Parkview Office Complex Total Enterprise Funds Desert Willow Golf Course See Notes to Financial Statements 32Page 189 CITY OF PALM DESERT STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2021 Private-Purpose Trust Fund Custodial Funds Assets: Pooled cash and investments 11,101,567$ 2,443,496$ Receivables: Assessments 48,058,996 - Accrued interest 42 149 Prepaid costs - 1,464,272 Due from other governments 35,425 - Restricted assets: Cash and investments with fiscal agents 4,663,828 37,780,052 Capital assets: Capital assets, not being depreciated - 24,891,841 Total Assets 63,859,858 66,579,810 Deferred Outflows of Resources: Deferred charge on refunding - 40,700 Total Deferred Outflows of Resources - 40,700 Liabilities: Accounts payable 17,427 592,088 Deposits payable 48,058,996 65,000 Long-term liabilities: Long-term debt due in one year 1,945,000 18,115,000 Long-term debt due in more than one year 45,135,000 183,028,892 Interest payable - 2,036,482 Total Liabilities 95,156,423 203,837,462 Deferred Inflows of Resources: Deferred charge on refunding - 395,394 Total Deferred Inflows or Resources - 395,394 Net Position: Held in trust - (137,612,346) Held in trust for other purposes (31,296,565) - Total Net Position (31,296,565)$ (137,612,346)$ Successor Agency to the Palm Desert Redevelopment Agency Private- Purpose Trust Fund See Notes to Financial Statements 33Page 190 CITY OF PALM DESERT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2021 ADDITIONS: Taxes 4,584,359$ 37,667,136$ Investment income 52,412 13,180 Contributions from City 936,802 - Other - 19,618 TOTAL ADDITIONS 5,573,573 37,699,934 DEDUCTIONS Housing and development - 823,679 Administrative expenses 96,751 - Contractual services 1,290,011 - Interest 2,514,423 7,679,256 TOTAL DEDUCTIONS 3,901,185 8,502,935 CHANGES IN NET POSITION 1,672,388 29,196,999 NET POSITION - BEGINNING OF YEAR - (166,809,345) Restatement (Note: 22)(32,968,953) - NET POSITION - BEGINNING OF YEAR RESTATED (32,968,953) (166,809,345) NET POSITION - END OF YEAR (31,296,565)$ (137,612,346)$ Private-Purpose Trust Fund Successor Agency to the Palm Desert Redevelopment Agency Private- Purpose Trust Fund Custodial Funds See Notes to Financial Statements 34Page 191 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies a. Description of the Reporting Entity The City of Palm Desert was originally incorporated on November 26, 1973, as a General Law City. In December 1997, Measure LL was enacted following a vote by Palm Desert residents, which adopted a City Charter. The City operates under a Council-Manager form of government and provides the following services: public safety (police and fire), highways and streets, public improvements, community development (planning, building and zoning) and general administrative services. The City has defined its reporting entity in accordance with accounting principles generally accepted in the United States of America which provides guidance for determining which governmental activities, organizations and functions should be included in the reporting entity. The Basic Financial Statements present information on the activities of the reporting entity, which include the City of Palm Desert (the primary government) and its component units, entities for which the government is considered financially accountable. Accounting principles generally accepted in the United States of America require that the component units be separated into blended or discretely presented units for reporting purposes. The following criteria were used in determination of blended component units: appointment of the governing board and fiscal dependence. Although legally separate entities, blended component units are, in substance, part of the City’s operations. Therefore, they are reported as part of the primary government. Discretely presented component units are reported in a separate column in the basic financial statements to emphasize that they are legally separate from the City. Blended Component Units Following are descriptions of legally separate component units for which the City is financially accountable that are blended with the Primary Government. The governing bodies of these component units are substantially the same with operational responsibility as the City and provides a financial benefit. The Palm Desert Housing Authority (Housing Authority) was established by the City Council in January 1998, and is responsible for the administration of providing affordable housing in the City. The Housing Authority transactions are reported in the governmental funds balance sheet as a major fund. The Palm Desert Financing Authority (Financing Authority) was formed on January 26, 1989. The purpose of the Financing Authority is to issue debt and loan the proceeds to the City and Agency. The Financing Authority’s capital related transactions are reported in the governmental fund financial statements in the capital projects funds, and the collection of assessments and payments of debt service is recorded in the fiduciary funds. The City Council of Palm Desert is the governing body for the Housing Authority and Financing Authority. Separate financial statements are not issued for the Housing Authority and Financing Authority. 35Page 192 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) Discretely Presented Component Unit The Palm Desert Recreational Facilities Corporation (Corporation) was incorporated on February 25, 1997. The purpose of the Corporation is to lease, operate and manage a restaurant and bar in the Desert Willow Golf Course in Palm Desert, California. The Board of Directors of the Corporation appoints an executive director to administer operations. The Corporation is in a separate column to emphasize that it is legally separate from the City and is financially accountable to the City. The two-member board governing the Corporation is appointed by the City Council, the City has authority to approve the Corporation’s budget, and the City must approve any debt issued. Complete financial statements of the Component Unit can be obtained from the City’s administrative offices. b. Basis of Presentation: Government-Wide Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Interfund services provided and used are not eliminated in the process of consolidation. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Expenses reported for functional activities include allocated indirect expenses. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 36Page 193 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) Fund Financial Statements The accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, deferred inflows of resources, fund equity, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operation fund of the City or meets the following criteria: a.Total assets plus deferred outflows of resources, liabilities plus deferred inflows of resources, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type; and b.Total assets plus deferred outflows of resources, liabilities plus deferred inflows of resources, revenues or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5% of the corresponding total for all governmental and enterprise funds combined; and c.The government has determined that a fund is important to the financial statement user. The funds of the financial reporting entity are described below: Governmental Fund Types General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue resources (other than major capital projects) that are legally restricted to expenditures for specified purposes. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term obligation principal, interest and related costs. Capital Projects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. 37Page 194 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) Proprietary Fund Types Enterprise Funds - The Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the City Council is that the costs (expenses including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges. The Primary Government’s Enterprise funds consist of the Parkview Office Complex and the Desert Willow Golf Course. Desert Willow Golf Course is operated by a management company. The discretely presented Component Unit’s fund consists of the Palm Desert Recreational Facilities Corporation, also operated by a management company. Internal Service Funds - The Internal Service Funds account for financial transactions related to replacement of City-owned vehicles and equipment and to fund compensated absences. These services are provided to other departments or agencies of the City on a cost reimbursement basis. Fiduciary Fund Types Private-Purpose Trust Fund The Successor Agency to the Palm Desert Redevelopment Agency Private Purpose Trust Fund is used to account for the activities of the Successor Agency to the Palm Desert Redevelopment Agency. Custodial Funds The Custodial, Special Assessment and Treasurers 1911 Bond Act Funds are used to account for assets held by the City in a custodial capacity as a trustee. These assets include deposits placed with the City by individuals, as well as deposits from assessment district’s property owners. These deposits are reduced by payments to individuals or entities at some future time. Custodial funds are custodial in nature and do not involve measurement of results of operations. The City’s Retiree Service Stipend Fund is used to account for assets held to pay for the retiree service stipend. The Treasures 1991 Bond Act Fund is used to account for assets held for the Bond Act. The major funds are as follows: Governmental Funds The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. 38Page 195 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) The Measure A Special Revenue Fund - In 1988, Riverside County voters approved a half-cent sales tax, known as Measure A, to fund a variety of highway improvements, local street and road maintenance, commuter assistance and specialized transit projects. This fund is used to collect this tax, and pursuant to the provision of Measure A (Ordinance No. 88-1 and Ordinance No. 02-001 of the County of Riverside) it is restricted for local street and road expenditures only. The Prop A Fire Tax Special Revenue Fund is used to account for all revenues derived from tax collected within the City for upgrading fire protection and prevention. Its use is restricted to obtaining, furnishing, operating and maintaining fire protection and prevention services (currently under contract with Riverside County Fire Department) equipment or apparatus. This fund is reported as a major fund because the tax collected is a voter approved measure. The Housing Asset Fund is used to account for any funds generated from housing assets of the former Redevelopment Agency to be used for projects that benefit low and moderate income families. The Housing Authority Special Revenue Fund is used to account for revenues and expenditures related to rental units owned by the Housing Authority, established in January 1998. The Capital Properties Capital Projects Fund is used to account for the cost of city owned properties that will either be sold or for the construction of public facilities, and the proceeds of bond funds for capital related properties. Proprietary Fund The Desert Willow Golf Course Fund is used to account for the fees collected and expenses incurred in connection with operating the municipal golf course in the City of Palm Desert. c. Measurement Focus and Basis of Accounting Measurement focus is a term used to describe which transactions are recorded within the various financial statements. Basis of accounting refers to when transactions are recorded regardless of the measurement focus applied. On the government-wide Statement of Net Position and the Statement of Activities, both governmental and business-like activities are presented using the economic resources measurement focus. The accounting objectives of the economic measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position and cash flows. All assets, deferred outflows of resources, liabilities and deferred inflows of resources (whether current or noncurrent) associated with their activities are reported. 39Page 196 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus is used as appropriate: 1.All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets, deferred outflows of resources, current liabilities and deferred inflows of resources are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period. 2.The proprietary fund and private purpose trust fund utilize an “economic resources” measurement focus. Proprietary fund and private purpose trust fund equity are classified as net position. 3.Custodial funds are not involved in the measurement of results of operations; therefore, measurement focus is not applicable to them. Basis of Accounting In the government-wide Statement of Net Position and Statement of Activities, both governmental and business-like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred, or economic asset used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable and available”. Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. Revenues that are susceptible to accrual include property taxes and special assessments that are levied for and due for the fiscal year and collected within 60 days after year-end. Licenses, permits, fines, forfeits, charges for services and miscellaneous revenues are recorded as governmental fund type revenues when received in cash because they are not generally measurable until actually received. Revenue from taxpayer assessed taxes, such as sales taxes, are recognized in the accounting period in which they became both measurable and available to pay liabilities of the current period. Grants and similar items are recognized as soon as all eligibility requirements imposed by the provider have been met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Interfund activity has been eliminated from the general government function for the government-wide financial statements except for charges between the government’s Desert Willow Golf Course and Parkview Office Complex funds and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues for the various functions considered. 40Page 197 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) The accrual basis of accounting is followed by the proprietary fund and private purpose trust fund. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred, or economic assets are used. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund’s principal ongoing operations. The principal revenue of the Desert Willow Golf Course and Parkview Office Complex Enterprise Funds are charges to customers for use of the golf course and rental fees. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. d. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until that time. The City has the following items that qualify for reporting in this category: x Deferred amount on refunding. A deferred amount on refunding results from the difference in the carrying value of the refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. x Deferred outflows related to pensions and OPEB. This amount is equal to employer contributions made after the measurement date of the net pension liability and net OPEB liability/(asset). x Deferred outflows related to pensions resulting from the difference in projected and actual earnings on investments of the pension plan fiduciary net position. These amounts are amortized over five years. x Deferred outflows of resources related to pensions arising from a change in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plan, which is 3.0 years. In addition to liabilities, the statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category: x Deferred inflows from unavailable revenue, which arises under a modified accrual basis of accounting is reported only in the governmental fund balance sheet. The governmental funds report unavailable revenues from the following sources: rent, investment income, grants, notes receivables collections and reimbursements. These amounts are unavailable and recognized as an inflow of resources in the period that the amounts become available. 41Page 198 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) x Deferred inflows related to pensions for differences between expected and actual experience. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plan, which is 3.0 years. x Deferred inflows from pensions resulting from changes in assumptions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plan, which is 3.0 years. Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. x The recognition period differs depending on the source of the gain or loss: Net difference between projected and actual earnings on OPEB plan investments 5 years straight-line recognition All other amounts Straight-line recognition over the expected average remaining service lifetime (EARSL) of all members that are provided with benefits, determined as of the beginning of the Measurement Period. In determining the EARSL, all active, retired and inactive (vested) members are counted, with the latter two groups having 0 remaining service years. e. Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s practice to consider restricted - net position to have been depleted before unrestricted - net position is applied. f. Capital Assets and Depreciation Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, traffic signals, drainage systems and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets are defined by the City as assets with an initial cost of more than $500 and an estimated life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. 42Page 199 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) The City has reported general infrastructure assets acquired in prior and current years. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives: Buildings 40 years Improvements other than buildings 20 years Machinery and equipment 5 to 8 years Infrastructure 20 to 75 years g. Appropriations Limit Under Article XIII-B of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements. For the fiscal year ended June 30, 2021, proceeds of taxes did not exceed appropriations. h. Investments Investments are reported in the accompanying financial statements at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments. i. Cash and Investments For purposes of the statement of cash flows, the City has defined cash and investments to include cash on hand, demand deposits, investments held in various instruments, and investments held in the California Local Agency Investment Fund (LAIF), California Asset Management Program (CAMP) and Riverside County Treasurer’s Pooled Investment Fund. j. Employee Compensated Absences It is the government’s policy to permit employees to accumulate earned but unused vacation and sick leave (compensated absences). Vacation pay and sick leave, which are expected to be liquidated with expendable available resources, are reported as expenditure and liability of the governmental fund that will pay it only if they have matured, for example, as a result of employee resignations or retirements. k. Property Held for Resale The land held for resale is recorded in the Housing Asset Fund as property held for resale at the lower of cost or market. At June 30, 2021, the cost of the property held for resale for various housing properties in Palm Desert totaled $61,516. 43Page 200 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) l. Inventories, Prepaid Costs and Deposits Inventory in the amount of $129,065 and $47,347, for the Desert Willow Golf Course Enterprise Fund (Primary Government) and Palm Desert Recreational Facilities Corporation (Component Unit), respectively, are reported at lower of cost or market. Inventory in the amount of $5,790 in the Other Governmental Funds are also reported at lower of cost or market. Inventory and prepaid costs are recorded as an expenditure when consumed rather than purchased. Certain payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid costs in the government-wide and fund financial statements. The Measure A Special Revenue Fund has a deposit in the amount of $15,109,753 with another governmental agency to pay for future construction of a City project. Deposit of $20,000 in other governmental funds represents security deposit on rental of commercial space. m. Property Tax Calendar Property taxes are assessed and collected each fiscal year according to the following property tax calendar: Lien date: January 1 Levy date: July 1 to June 30 Due date: November 1 - 1st Installment March 1 - 2nd Installment Delinquent date: December 10 - 1st Installment April 10 - 2nd Installment Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool and are then allocated to the cities based on complex formulas prescribed by state statutes. The City accrues only those taxes, which are received within 60 days after the year-end. The City is a participant in the Teeter Plan under the California Revenue and Taxation Code. The County of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy. n. Restricted Assets Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because they are maintained in separate trustee bank accounts and their use is limited to applicable bond covenants. In addition, funds have been restricted for future capital improvements by City resolution. 44Page 201 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) o. Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s California Public Employees’ Retirement System (CalPERS) pla ns (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. p. Other Post-Employment Benefits (OPEB) For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and the OPEB expense have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2019 Measurement Date June 30, 2020 Measurement Period June 30, 2019 to June 30, 2020 q. Use of Estimates The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, include amounts that are based on management’s best estimates and judgments. The financial statements includ e estimates for the value of the capital assets (infrastructure), depreciation expense, the fair value of investments, the amounts reported for the net pension liability and related items (Note 11), the amounts reported for the net pension liability, net OPEB liability/(asset) and related items (Note 15), and claims payable (Note 9). Accordingly, actual results could differ from the estimates. Note 2: Cash and Investments As of June 30, 2021, cash and investments were reported in the accompanying financial statements as follows: Governmental activities 316,087,852$ Business-type activities 9,641,278 Component unit 866,936 Fiduciary funds 55,988,943 382,585,009$ Total cash and investments 45Page 202 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Cash and investments at June 30, 2021, consisted of the following: Primary Government Demand accounts (423,988)$ Petty cash 22,750 Escrow 293,755 Investments 325,836,613 Total cash and investments - Primary Government 325,729,130$ Component Unit Demand accounts 866,936$ Fiduciary Funds Demand accounts 1,894,691$ Pooled with primary government 11,101,567 Investments 42,992,685 Total cash and investments - Fiduciary Funds 55,988,943$ The City of Palm Desert maintains a cash and investment pool that is available for use for all funds. Each fund type’s position in the pool is reported on the combined balance sheet as cash and investments. The City has adopted an investment policy, which authorizes it to invest in various investments. Deposits At June 30, 2021, the carrying amount of the deposits was $13,732,961, and the bank balance was $14,890,674. The $1,157,713 difference represents outstanding checks, deposits in transit and other reconciling items. The California Government Code requires California banks and savings and loan associations to secure an Entity’s deposits by pledging government securities with a value of 110% of an Entity’s deposits. California law also allows financial institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of total deposits. The City Treasurer may waive the collateral requirement for deposits that are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state-chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an Agent of Depository has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency. 46Page 203 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Investments Under provision of the City’s investment policy and in accordance with the California Government Code, the following investments are authorized: x United States Treasury bills, notes, bonds or certificates of indebtedness x United States government-sponsored agency obligations, participations or other instruments x California State and Local Agency Debt x Commercial Paper issued by general corporations x Negotiable Certificates of Deposits, issued by a nationally or state-chartered bank, a savings association, a federal association or by a state-licensed branch of a foreign bank x Time Certificates of Deposit issued by qualified public depositories. x Repurchase Agreements sold by authorized brokers x Medium-term Notes issued by corporations organized and operating in the United States, or by depository institutions operating in the United States and licensed by the United States or by any state x Money Market Mutual Funds that are registered with the SEC under the Investment Act of 1940 x State of California Local Agency Investment Fund (LAIF) that is managed by the State Treasurer’s Office x Structured Notes in the form of callable securities or “STRIPS” issued by the United States Treasury, Federal Agencies or government-sponsored enterprises x Local Government Investment Pools GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. The City Treasurer is authorized under state and municipal law to invest in various types of securities that meet specified credit quality standards, based upon credit risk ratings assigned by Standard and Poors (S&P), Fitch, or by Moody’s Investor Services (Moody’s). Permissible City investments include medium-term notes that are rated “A” or higher at time of purchase; commercial paper that is rated “A-1” or the equivalent; money market mutual funds that are rated “AAA”; and United States Government and Federal Agency securities (the quality of United States Treasury securities is not analyzed since they are not deemed to have credit risk). Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required, when applicable, by the California Government Code, the City’s investment policy, or debt agreements, and the rating by Standard and Poor’s, Fitch and Moody’s as of year-end for each investment type. 47Page 204 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Primary Government Investment Type Total as of June 30, 2021 Minimum Legal Rating Aaa AAA Other Unrated California Local Agency Investment Fund 75,215,860$ N/A -$ -$ -$ 75,215,860$ California Asset Management Program 62,583,760 N/A - 62,583,760 -- Riverside County Treasurer's Pooled Investment Fund 79,393,569 N/A 79,393,569 --- Medium-Term Corporate Notes 43,477,800 A 5,001,200 - 38,476,600 - Held by Fiscal Agent: Money Market Deposit Account 63,249,189 N/A ---63,249,189 California Local Agency Investment Fund 1,916,435 N/A ---1,916,435 Total 325,836,613$ 84,394,769$ 62,583,760$ 38,476,600$ 140,381,484$ The ratings for the “Other” category above are as follows: Aa A Total 20,265,850$18,210,750$38,476,600$Medium- Term Corporate Notes Investment Type 48Page 205 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Fiduciary Funds Investment Type Total as of June 30, 2021 Minimum Legal Rating Aaa AAA Unrated California Local Agency Investment Fund 742$ N/A -$ -$ 742$ California Asset Management Program 5,728 N/A - 5,728 - Riverside County Treasurer's Pooled Investment Fund 336 N/A 336 - - Investment in City Bonds - Successor Agency RDA 542,000 N/A - - 542,000 Held by Fiscal Agent: Money Market Deposit Accounts Successor Agency RDA 37,780,051 N/A - - 37,780,051 Money Market Deposit Accounts Assessment District 1,961,966 N/A - - 1,961,966 California Local Agency Investment Fund - Assessment District 2,701,862 N/A - - 2,701,862 Total 42,992,685$ 336$ 5,728$ 42,986,621$ Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for the investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2021, none of the City’s deposits or investments were exposed to custodial credit risk. 49Page 206 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Concentration of Credit Risk The City’s investment policy imposes restrictions on the percentage the City can invest in certain types of investments, which the City is in compliance. As of June 30, 2021, in accordance with GASB Statement No. 40, if the City has invested more than 10% of its total investments in any one issuer then they are exposed to concentration of credit risk. The City is not invested in any one issuer that is more than 10% of its total investments. The City’s Investment policy imposes the following restrictions on the maximum percentage it can invest in a single type of investment. Issuer Portfolio Maximum Single Issuer Maximum United States Treasury Bills, Notes, Bonds 100%N/A United States Government-Sponsored Agency Securities 100%30% California State and Local Agency Debt 25%N/A Commercial Paper 25%10%* Negotiable Certificates of Deposit 5%N/A Time Certificates of Deposit 5%N/A Repurchase Agreements 10%N/A Medium-Term Corporate Notes 25%10%* Money Market Mutual Funds 20%N/A Local Agency Investment Fund (LAIF)$75M/Acct N/A Structured Notes (STRIPS)20%N/A Local Government Investment Pools 75%N/A N/A - Not Applicable *No more than 10% of the portfolio may be invested in the corporate debt of any single issuer. The City’s policy is more conservative than state law, which has no issuer concentration limits on federal agency debt. Interest Rate Risk The City’s investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City’s investment policy states that the City shall not invest in securities with maturities exceeding five years. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. 50Page 207 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) As of June 30, 2021, the City had the following investments and maturities: Primary Government Less Than 6 months - 1 year -Over Fair 6 months 1 year 3 years 3 years Value Investment Fund 75,215,860$ -$ -$ -$ 75,215,860$ Management Program 62,583,760 - - - 62,583,760 Pooled Investment Fund 79,393,569 - - - 79,393,569 Medium-Term Corporate Notes 15,016,850 - 28,460,950 -43,477,800 Held by Fiscal Agent: Money Market Deposit Accounts 63,249,189 ---63,249,189 California Local Agency Investment Fund 1,916,435 - - - 1,916,435 Total Investments 297,375,663$ -$ 28,460,950$-$ 325,836,613$ Investment Type Riverside County Treasurer's California Local Agency California Asset Fiduciary Funds Less Than 6 months - 1 year -Over Fair 6 months 1 year 3 years 3 years Value Investment Fund 742$ -$ -$ -$ 742$ Management Program 5,728 - - - 5,728 Riverside County Treasurer's Pooled Investment Fund 336 - - - 336 Successory Agency RDA 60,000 - 187,000 295,000 542,000 Held by Fiscal Agent: Money Market Deposit Accounts - Successory Agency RDA 37,780,051 - - - 37,780,051 Money Market Deposit Accounts - Assessment District 1,961,966 - - - 1,961,966 LAIF - Assessment District 2,701,862 - - - 2,701,862 Total Investments 42,510,685$ -$ 187,000$ 295,000$ 42,992,685$ Investment Type California Asset Investment in City Bonds - California Local Agency Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 51Page 208 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Investment in California Asset Management Program The California Asset Management Program (CAMP) is a public joint powers authority which provides California Public Agencies with investment management services for surplus funds and comprehensive investment management, accounting and arbitrage rebate calculation services for proceeds of tax-exempt financings. The CAMP currently offers the Cash Reserve Portfolio, a short-term investment portfolio, as a means for Public Agencies to invest these funds. Public Agencies that invest in the Pool (Participants) purchase shares of beneficial interest. Participants may also establish individual, professionally managed investment accounts (Individual Portfolios) by separate agreement with the Investment Advisor. Investments in the Pools and Individual Portfolios are made only in investments in which Public Agencies generally are permitted by California statute. The CAMP may reject any investment and may limit the size of a Participant’s account. The Pool seeks to maintain, but does not guarantee, a constant net asset value of $1.00 per share. A Participant may withdraw funds from its Pool accounts at any time by check or wire transfers. Requests for same-day wire transfers must be made by 11:00 a.m. that day. Fair value of the Pool is determined by the fair value per share of the Pool’s underlying portfolio. Investment in Riverside County Treasurer’s Pooled Investment Fund The City is a voluntary participant in the Riverside County Treasurer’s Pooled Investment Fund (Pooled Fund). The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value that the Riverside County Treasurer’s Office has provided for the entire Pooled Fund (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based upon the accounting records that the Riverside County Treasurer’s Office maintains, which are recorded on an amortized cost basis. Fair Value Measurements The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets in active markets that the City has the ability to access. Level 2: Inputs to the valuation methodology include: x Quoted prices for similar assets in active markets; x Quoted prices for identical or similar assets in inactive markets; x Inputs other than quoted prices that are observable for the asset; x Inputs that are derived principally from or corroborated by observable market data by correlation or other means. 52Page 209 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data. The asset’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The determination of what constitutes observable requires judgment by the City’s management. City management considers observable data to be that market data which is readily available, regularly distributed or updated, reliable, and verifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the relative observability of the inputs to its fair value measurement and does not necessarily correspond to City management’s perceived risk of that investment. The methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are based on evaluated prices received by City’s asset manager from third party service provider. The following is a description of the recurring valuation methods and assumptions used by the City to estimate the fair value of its investments. For a large portion of the City’s portfolio, the City’s custodian applies their leveling methodology across all securities in a specific sector (i.e. U.S. Government Sponsored Agency Securities). Inputs to their pricing models are based on observable market inputs in active markets. The Successor Agency Former RDA’s investment in City bonds is not tradable and is categorized in Level 3. When valuing Level 3 securities, the inputs or methodology are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. 53Page 210 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments (Continued) Primary Government Quoted Observable Unobservable Prices Inputs Inputs Level 1 Level 2 Level 3 Total Medium-Term Corporate Notes -$ 43,477,800$ -$ 43,477,800$ Total Leveled Investments -$ 43,477,800$ -$ 43,477,800 California Local Agency Investment Fund* 75,215,860 California Asset Management Program* 62,583,760 Pooled Investment Fund*79,393,569 Held by Fiscal Agent: Money Market Deposit Accounts* 63,249,189 California Local Agency Investment Fund* 1,916,435 Total Investment Portfolio 325,836,613$ Investment Type Riverside County Treasurer's Fiduciary Funds Quoted Observable Unobservable Prices Inputs Inputs Level 1 Level 2 Level 3 Total Investment in City Bonds - -$ -$ 542,000$ 542,000$ Total Leveled Investments -$ -$ 542,000$ 542,000 California Local Agency Investment Fund*742 California Asset Management Program*5,728 Pooled Investment Fund*336 Held by Fiscal Agent: Money Market Deposit Accounts* - Successor Agency Former RDA 37,780,051 Money Market Deposit Accounts* - Assessment District 1,961,966 LAIF* - Assessment District 2,701,862 Total Investment Portfolio 42,992,685$ * Not subject to fair value measurements Investment Type Riverside County Treasurer's Successor Agency Former RDA 54Page 211 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 3: Receivables Primary Government’s Governmental Funds Notes and Loans Receivable: On August 8, 2006, the City Palm Desert issued $3,165,000 of Limited Obligation Bonds. The proceeds of the Bonds were used to finance the construction of the utility undergrounding and pay the cost of issuance. The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. Bond maturities began September 2, 2007, and continue annually through 2036. The interest rates of the bonds range from 3.85% to 5.15%. The City of Palm Desert is the only bondholder on record for the bonds and reports a receivable in the general fund that corresponds to the outstanding principal on the bonds. As of June 30, 2021, the receivable balance was $1,130,000. The City entered into several individual loan agreements with residents of the Highlands Utility Undergrounding Assessment District No. 04-01. The loans were issued by the City to pay off the principal of the respective properties assessment. In turn, the residents agreed to pay to the City the full cost of the loan amount plus any accrued interest at a rate of 5.35%. The full amount of the loan along with all accrued interest is due and payable at the earliest of September 2, 2036 or any change in ownership of the property. As of June 30, 2021, the total receivable from the Highlands Deferral Loan Program was $14,978. Pursuant to Health and Safety Code 34176(b), the housing assets of the former RDA have been transferred to the Housing Asset Fund as the successor housing entity. The Housing Asset Fund has a loan receivable for the construction of a multi- family affordable housing development dated June 14, 2001, with a balance of $5,148,813 due from the PD Hovley Limited Partnership. The loan is secured by a Deed of Trust and Regulatory Agreement with Options on the housing development located in Palm Desert. On April 8, 2021 the Authority Board approved the re-syndication, refinancing and rehabilitation of the affordable housing development. The existing 2001 loan was modified to extend its maturity for fifty-five (55) years and provides for a suspension of principal payments for the estimated construction period. The Authority Loan shall bear interest at the greater of the current applicable federal rate as of the date of the Promissory Note or one percent (1%) simple interest per annum, and will be repaid from seventy-five percent (75%) of the developments residual receipts remaining after payment of fees and expenses. On August 28, 2008, the City Council approved through resolution the Energy Independence Program (EIP), which is supported by Assembly Bill AB811. The EIP program allowed the City to create the funding mechanism to assist the residents and businesses entering into a loan agreement with the City and providing the money for the borrowers to acquire and install energy efficient improvements. Assembly Bill AB811 allows the City to lien the properties through annual property tax assessments for a period not to exceed 20 years. To date, 279 residents and business owners entered into loan agreements with the City and have completed their improvements through the EIP program, as of June 30, 2021, 160 loans have been repaid. The loans are payable in two annual installments for a period of 5 years to 20 years at an interest rate of 7% annually. On June 30, 2021, the outstanding loans receivable through the EIP Program was $1,768,905. 55Page 212 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 3: Receivables (Continued) Pursuant to Health and Safety Code 34176(b), the housing assets of the former RDA have been transferred to the Palm Desert Housing Authority as the successor housing entity. The Housing Authority has loans for several other projects, all of which are secured by a deed of trust. A valuation allowance equal to the loan balance has been recognized since there is a significant possibility that these loans will either become uncollectible or forgiven by the Housing Authority at a future date if all the terms of the loans have been met. Detailed information for these loans is as follows: Loan Balance Interest Maturity Special Provisions Project Name Outstanding Rate Date Secured By of Loan Self-Help Housing Program 429,000$ 7.25%30 years or 2024 Deed of Trust Loan balance and interest due upon maturity, unpaid balance of loan or interest will bear an interest rate of 12%. Home Improvement Loans (1) 300,855$ N/A N/A Deed of Trust Loan is payable upon change or transfer of title,refinancing or upon the death of the borrower. Restrictive covenants are placed against property to maintain affordability for up to 45 years in exchange for favorable loan terms. Portola Palms Mobile Home Park 74,580$ 3.00%30 years from date of loan Deed of Trust Loan balance and interest will be forgiven at maturity if debtor does not breach the terms and conditions of either the unit regulatory agreement or note. Desert Rose (1)2,543,811$ 3.00%30-45 years* from date of loan Deed of Trust Loan will be forgiven at maturity unless the debtor is in violation of the unit regulatory agreement or the deed of trust. Falcon Crest (1)5,387,121$ 3.00%30-45 years* from date of loan Deed of Trust Loan is payable upon change or transfer of title,refinancing or upon the death of the borrower. Acquisition, Rehabilitation, Resale 190,510$ 3.00%30-45 years from date of loan Deed of Trust Assignment of Rent Loan is payable upon change or transfer of title,refinancing or upon the death of the borrower. Restrictive covenants are place against property to maintain affordability from up to 45 years in exchange for favorable loan terms. * All properties acquired from the former Redevelopment Agency after June 2009 will have a 45 year restrictive covenant. (1) Portion of deferred loans are from funding sources other than Housing Authority. 56Page 213 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 4: Interfund Receivables, Payable and Transfers Due To/From Other Funds The composition of interfund balances as of June 30, 2021, was as follows: Due To Due From Amount General Fund Other Governmental Funds 1,492,656$ Desert Willow Golf Course 1,500,000 Capital Properties 999,050 Other Governmental Funds Desert Willow Gold Course 500,000 4,491,706$ The General Fund advanced $1,394,000 to the Energy Independence Special Revenue Fund to payoff the bonds used to fund energy efficiency, loaned $1,500,000 to Desert Willow Golf Course to fund the daily operations, including the daily operations of the restaurant, and advanced $999,050 and $98,656 to the Capital Properties and New Construction Tax Fund, respectively, to cover cash shortfall at year end. The Other Governmental Funds advanced $500,000 to Desert Willow Golf Course for operations during the construction phase of the clubhouse and kitchen expansion. Due To/From Component Unit Due From Component Unit Major Funds: General Fund 420,000$ Desert Willow Golf Course 1,370,792 1,790,792$ The receivable by the General Fund is for rent owed by the Palm Desert Recreational Facilities Corporation (PDRFC), and the receivable by the Desert Willow Golf Course represents funds loaned to PDRFC for operation. 57Page 214 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 4: Interfund Receivables, Payable and Transfers (Continued) Interfund Transfers The composition of interfund transfers as of June 30, 2021, was as follows: Transfers Out General Fund Prop A Fire Tax Special Revenue Fund Other Governmental Funds Internal Service Fund Totals General Fund -$ 3,800,000$ 2,627,343$ 1,044,410$ 7,471,753$ Housing Authority Special Revenue Fund -- 243,032 - 243,032 Other Governmental Funds 3,515,966 --- 3,515,966 Totals 3,515,966$ 3,800,000$ 2,870,375$ 1,044,410$ 11,230,751$ Transfers In Transfers are used to: 1.Transfer revenues to provide for capital projects. 2.Transfer revenues to provide for additional resources to pay for expenditures. 3.Transfer to cover future cost of assets. 58Page 215 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 5: Capital Assets A summary of changes in capital assets at June 30, 2021, was as follows: Primary Government –Governmental Activities Balance at July 1, 2020 Transfers Additions Deletions Balance at June 30, 2021 Capital assets not being depreciated: Land 81,958,949$ -$ -$ -$ 81,958,949$ Right-of-way 121,210,045 - - -121,210,045 Construction-in-progress 3,985,114 - 7,406,925 (796,652)10,595,387 Total Capital Assets Not being Depreciated 207,154,108 - 7,406,925 (796,652)213,764,381 Capital assets being depreciated: Buildings 144,231,143 ---144,231,143 Improvements other than buildings 60,679,106 ---60,679,106 Machinery and equipment 10,654,160 (231,775) 433,513 (25,345)10,830,553 Infrastructure 244,190,768 ---244,190,768 Equipment - Internal service fund 7,212,135 231,775 1,852,041 (230,444)9,065,507 Total Capital Assets being Depreciated 466,967,312 - 2,285,554 (255,789)468,997,077 Less accumulated depreciation for: Buildings (71,067,522)- (3,493,838)-(74,561,360) Improvements other than buildings (44,936,062)- (1,900,271)-(46,836,333) Machinery and equipment (9,899,237)- (266,949)20,663 (10,145,523) Infrastructure (119,355,186)- (5,098,082)- (124,453,268) Equipment - Internal service fund (4,699,449)- (718,948) 222,242 (5,196,155) Total Accumulated Depreciation (249,957,456)- (11,478,088) 242,905 (261,192,639) Total Capital Assets Being Depreciated, Net 217,009,856 - (9,192,534)(12,884) 207,804,438 Capital assets, net - Governmental Activities 424,163,964$ -$ (1,785,609)$ (809,536)$ 421,568,819$ 59Page 216 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 5: Capital Assets (Continued) A summary of changes in capital assets at June 30, 2021, was as follows: Primary Government –Business-Type Activities Balance at July 1, 2020 Additions Deletions Balance at June 30, 2021 Land 53,304,965$ -$ -$ 53,304,965$ Total capital assets, not being depreciated 53,304,965 - - 53,304,965 Buildings and improvements 28,041,594 434,733 - 28,476,327 Machinery and equipment 6,616,313 113,034 - 6,729,347 Total capital assets, being depreciated 34,657,907 547,767 - 35,205,674 Buildings and improvements (13,487,887) (851,870) - (14,339,757) Machinery and equipment (4,935,915) (577,665) - (5,513,580) Total capital assets being depreciated, net 16,234,105 (881,768) - 15,352,337 Capital assets, net - Business-Type Activities 69,539,070$ (881,768)$ -$ 68,657,302$ - (19,853,337) Capital assets, not being depreciated: Capital assets, being depreciated: Less accumulated depreciation for: Total accumulated depreciation (18,423,802) (1,429,535) Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General government 1,840,718$ Housing and redevelopment 1,653,935 Public safety 76,783 Public works 5,687,404 Parks, recreation and culture 1,500,300 Depreciation expenses for internal service funds is charged to various functions based on usage of capital assets 718,948 Total depreciation expense - governmental activities 11,478,088$ Business-Type Activities: Parkview Office complex 313,663$ Desert Willow Golf Course 1,115,872 Total depreciation expense - business-type activities 1,429,535$ 60Page 217 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 6: Long-Term Debt The following is a summary of long-term liability transactions of the City for the year ended June 30, 2021. Primary Government –Governmental Activities Balance June 30, 2020 Additions Reductions Balance June 30, 2021 Due Within One Year Direct Borrowing: Special assessment debt with government commitment 1,178,000$ -$ (48,000)$ 1,130,000$ 48,000$ Limited obligation improvement bonds 668,000 - (126,000) 542,000 60,000 Total 1,846,000$ -$ (174,000)$ 1,672,000$ 108,000$ Debt service payments for the special assessment debt with government commitment, tax allocation bonds and notes payable are made from debt service funds and a special revenue fund. The City historically allocates costs to liquidate liabilities for compensated absences and pension liability based on the allocation of the employees earning the respective benefits and their respective payroll expense to various fund across the City. Special Assessment Debt with Government Commitment Highlands Undergrounding Assessment District No. 04-01, Limited Obligation Improvement Bonds, Series 2006 On August 8, 2006, the City Palm Desert issued $3,165,000 of Limited Obligation Bonds. The proceeds of the Bonds were used to finance the construction of the utility undergrounding and pay the cost of issuance. The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. In the event that assessment collections are insufficient to pay the debt service, the City has a potential obligation to provide additional funds to pay the debt service, therefore these bonds are reported as special assessment debt with government commitment. Bond maturities begin September 2, 2007, and continue annually through 2036. The interest rates of the bonds range from 3.85% to 5.15%. The City of Palm Desert is the only bondholder on record of the bonds and the City does not own the constructed assets. 61Page 218 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 6: Long-Term Debt (Continued) The future debt service requirements on the Highlands Undergrounding Assessment District No. 04-01, Limited Obligation Improvement Bonds, Series 2006 are as follows: Year Ending June 30, Principal Interest 2022 48,000$ 56,797$ 2023 50,000 54,310 2024 52,000 51,709 2025 55,000 48,981 2026 58,000 46,099 2027-2031 336,000 181,625 2032-2036 431,000 83,404 2037 100,000 2,575 Total 1,130,000$525,500$ Limited Obligation Bonds Limited Obligation Improvement Bonds Series 2009A (Taxable) On January 29, 2009, the City issued $2,015,000 Limited Obligation Improvement Bonds Series 2009A (Taxable). The proceeds of the Bonds were used to fund the City’s Energy Independence Program. Concurrent with the issuance of the Bonds, the City entered into a bond purchase agreement with the Agency whereby the Agency agreed to purchase the Bonds equal to par value. The Series 2009A (Taxable) bonds consist of $2,015,000 Serial Bonds with interest at 3% payable semiannually on September 2 and March 2. Bond maturities commenced September 2, 2010, and continue annually through September 2, 2029. The future debt service requirements on the Limited Obligation Improvement Bonds Series 2009A (Taxable) are as follows: Year Ending June 30, Principal Interest Total 2022 30,000$ 8,340$ 38,340$ 2023 30,000 7,440 37,440 2024 31,000 6,525 37,525 2025 32,000 5,580 37,580 2026 32,000 4,620 36,620 2027-2030 138,000 8,430 146,430 Total 293,000$ 40,935$ 333,935$ 62Page 219 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 6: Long-Term Debt (Continued) Limited Obligation Improvement Bonds Series 2009B (Taxable) On September 2, 2009, the City issued $1,136,000 Limited Obligation Improvement Bonds Series 2009B (Taxable). The proceeds of the Bonds were used to fund the City’s Energy Independence Program. Concurrent with the issuance of the Bonds, the City entered into a bond purchase agreement with the Agency whereby the Agency agreed to purchase the Bonds equal to par value. The Series 2009B (Taxable) bonds consist of $1,136,000 Serial Bonds with interest at 3% payable semiannually on September 2 and March 2. Bond maturities commenced September 2, 2010, and continue annually through September 2, 2029. The future debt service requirements on the Limited Obligation Improvement Bonds Series 2009B (Taxable) are as follows: Year Ending June 30, Principal Interest Total 2022 30,000$ 7,020$ 37,020$ 2023 31,000 6,105 37,105 2024 31,000 5,175 36,175 2025 32,000 4,230 36,230 2026 24,000 3,390 27,390 2027-2030 101,000 6,165 107,165 Total 249,000$ 32,085$ 281,085$ Note 7: Compensated Absences The City's policy relating to compensated absences is described in Note 1 of the Notes to Financial Statements. This liability will be paid in future years from future resources in the internal service fund. The outstanding liability for compensated absences accrued was $2,501,835. Balance June 30, 2020 Additions Deletions Balance June 30, 2021 Due Within One Year 2,575,071$ 1,405,258$ 1,478,494$ 2,501,835$ 300,000$ Note 8: Capital Leases Primary Government –Business-type Activities Balance June 30, 2020 Additions Reductions Balance June 30, 2021 Due Within One Year Capital leases 1,145,011$ -$ (469,035)$ 675,976$ 488,548$ 63Page 220 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 8: Capital Leases (Continued) Obligations under capital leases are as follows: Club Car National Account - The present value of the minimum lease payment on the Club Car cart fleet equipment was capitalized at $471,909 using an interest rate of 5.75%. Lease is payable in 48 months, commencing on February 1, 2019. Payments are $12,330 monthly. The lease agreement was executed on June 12, 2018.199,834$ GPSI Leasing, LLC - The present value of the minimum lease payment on the GPSI Visage Golf Cart GPS System was capitalized at $267,040 using an interest rate of 5.75%. On December 27, 2018 GPSI lease was amended to extend for an additional 48 months and lower the payment to $5,792.The amended lease was payable in 48 monthly installments of $5,792 beginning November 1, 2018.107,382 PNC Equipment Finance LLC -The present value of the minimum lease payment on the Toro golf course maintenance equipment was capitalized at $1,399,284 using an interest rate of 2.95%. Lease is payable in 60 monthly installments of $25,078 beginning on October 1, 2017. The lease was executed on June 21, 2017.368,760 Present value of net minimum lease payments 675,976 Less: current portion (488,548) 187,428$ The following is a schedule, by year, of future minimum lease payments and present value of the net minimum lease payments for capital leases as of June 30, 2021: Year Ending Minimum Lease June 30, Payments 2022 523,779$ 2023 198,987 Total 722,766 Less: amounts representing interest (46,790) Present value of net minimum lease payments 675,976$ The assets acquired through capital lease are as follows: Machinery and equipment 2,461,344$ Less: accumulated depreciation (1,834,409) 626,935$ 64Page 221 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Claims and Judgements Payable Estimates for all workers’ compensation and general liabilities up to the self -insured levels have been recorded as long-term liabilities. Changes in claims liabilities during the past two years are as follows: June 30, 2020 June 30, 2021 Claims payable - Beginning of year 584,439$ 46,995$ Incurred claims (including IBNR) and changes in estimates 41,690 1,035,092 Claims payments (579,134) (697,444) Claims payable - End of year 46,995$ 384,643$ Note 10: Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. Pursuant to changes in August 1996, of IRC Section 457, in January 1997, the City established a trust in which all assets held by Nationwide Retirement Solutions, Inc. (NRS) and ICMA Retirement Corporation (ICMA) were placed. The City does not have fiduciary responsibility for the plan assets held by NRS and ICMA. The assets, all property and rights purchased with such amounts and all income attributable to such amounts are held in trust for the exclusive benefit of the participants and the beneficiaries. The assets are no longer the property of the City, and as such, are no longer subject to the claims of the City’s general creditors. As a result, the assets in the amount of $17,780,969 held by NRS and ICMA of the 457 Plan are not reflected in the City’s financial statements. Note 11: Pension Plan a. General Information about the Pension Plan: Plan Description All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. 65Page 222 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Pension Plan (Continued) Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law. The Plan’s provisions and benefits in effect at measurement date, are summarized as follows: Prior to On or after Hire date January 1, 2013 January 1, 2013 Benefit formula 2.7% @ 55 2.0% @ 62 Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age 50-67 52-67 Monthly benefits, as a % of eligible compensation 2.0% - 2.7% 1.0% - 2.5% Required employee contribution rates 7%-8% 6.25% Required employer contribution rates 13.069% 13.069% Employer Payment of Unfunded Liability $3,583,502 $3,583,502 Miscellaneous Employees Covered At June 30, 2021, the following employees were covered by the benefit terms for all Plans: Inactive employees or beneficiaries currently receiving benefit s79 Inactive employees entitled to but not yet receiving benefits 37 Active employees 111 Total 227 Contributions Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. 66Page 223 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Pension Plan (Continued) b. Net Pension Liability The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. T he net pension liability of Plan is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Assumptions The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions: Valuation date June 30, 2019 Measurement date June 30, 2020 Actuarial cost method Entry age normal Actuarial assumptions: Discount rate 7.15% Inflation 2.625% Payroll Growth 2.875% Projected Salary Increase Investment Rate of Return Mortality rate table * Varies by Entry Age and Service 7.25% Net of Pension Plan Investment and Ad Expenses; includes Inflation Derived using CalPERS' membership data for all funds *The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website. Discount Rate The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing of the Plans, the tests revealed the assets would not run out. Therefore, the current 7.15% discount rate is appropriate and the use of the municipal bond rate calculation is not deemed necessary. The long term expected discount rate of 7.15% is applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained from the CalPERS website under the GASB 68 section. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. 67Page 224 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Pension Plan (Continued) In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects the lo-ng-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the CalPERS Board effective on July 1, 2014. New Strategic Real Return Real Return Allocation Years 1-10 (1) Years 11+ (2) Global Equity 50.00% 4.80% 5.98% Global Fixed Income 28.00% 1.00% 2.62% Inflation Sensitive 0.00% 0.77% 1.81% Private Equity 8.00% 6.30% 7.23% Real Estate 13.00% 3.75% 4.93% Liquidity 1.00% 0.00% -0.92% Total 100.00% Asset Class (1) An expected inflation of 2.00% used for this period. (2) An expected inflation of 2.92% used for this period 68Page 225 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Pension Plan (Continued) c. Changes in the Net Pension Liability The changes in the net pension liability for the year ended June 30, 2021, with a measurement date of June 30, 2020, for the Miscellaneous Plan are as follows: Total Pension Liability Plan Fiduciary Net Position Net Pension Liability (Asset) Balance at June 30, 2019 (Measurement Date)136,590,663$ 101,765,740$ 34,824,923$ Changes in the Year: Service Cost 2,086,683 - 2,086,683 Interest on the Total Pension Liability 9,645,145 - 9,645,145 Difference between Expected and Actual Experience 533,373 - 533,373 Contributions - Employer - 4,521,813 (4,521,813) Contributions - Employees - 805,528 (805,528) Net Investment Income - 5,102,524 (5,102,524) Benefit Payments including Refunds of Employee Contributions (6,540,485) (6,540,485)- Administrative expense - (143,465) 143,465 Net Changes 5,724,716 3,745,915 1,978,801 Balance at June 30, 2020 (Measurement Date)142,315,379$ 105,511,655$ 36,803,724$ Increase (Decrease) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City for the Plan, calculated using the discount rate for the Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: 1% Decrease 6.15% Net Pension Liability 55,472,209$ Current Discount Rate 7.15% Net Pension Liability 36,803,724$ 1% Increase 8.15% Net Pension Liability 21,306,228$ Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. Change of Assumptions In 2020, there were no changes in the discount rate or the inflation rate. 69Page 226 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Pension Plan (Continued) d. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2021, the City recognized pension expense of $4,838,651. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Pension contributions subsequent to measurement date $ 4,732,417 -$ Difference between actual and expected experience 792,742 - Net difference between projected and actual earnings on pension plan investments 840,071 - Total 6,365,230$ -$ $4,732,417 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2022. Other amounts reported as deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ending June 30 Amount 2022 282,439$ 2023 402,940 2024 522,609 2025 424,825 Thereafter - Total 1,632,813$ e. Payable to the Pension Plan At June 30, 2021, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2021. 70Page 227 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 12: Fund Balances In the fund financial statements, reserves segregate portions of fund balances that are either not available or have been earmarked for specific purposes. The various reserves established as of June 30, 2021, were as follows: General Fund Measure A Prop A Fire Tax Housing Asset Fund Housing Authority Capital Properties Total Nonspendable: Advances 2,894,000$ -$ -$ -$ -$ -$ -$ 2,894,000$ 1,144,978 ------1,144,978 Prepaid costs 139,202 -----18,427 157,629 Total Nonspendable 4,178,180 -----18,427 4,196,607 Restricted for: Capital projects: Assessment districts improvements ------2,116,419 2,116,419 Capital bond projects ---4,938,989 - 55,049,189 -59,988,178 Total capital projects ---4,938,989 - 55,049,189 2,116,419 62,104,597 Debt service ------79,261 79,261 Low income housing: Projects and programs --- 43,679,887 --3,575,892 47,255,779 Apartments ----7,469,637 --7,469,637 Total low income housing --- 43,679,887 7,469,637 -3,575,892 54,725,416 Public facilities: Park facilities ------1,599,065 1,599,065 Childcare facilities ------1,549,239 1,549,239 City facilities ------1,078,653 1,078,653 Total public facilities ------4,226,957 4,226,957 Public safety: Fire facilities ------1,261,388 1,261,388 Fire operation -- 8,546,839 ----8,546,839 Police programs & equipment ------914,981 914,981 Total public safety -- 8,546,839 ---2,176,369 10,723,208 Special programs: Community projects ------56,359 56,359 Recycling projects ------2,859,433 2,859,433 Special district advertising ------62,142 62,142 Air quality projects ------27,100 27,100 Landscaping and lighting ------4,194,727 4,194,727 Art construction & improvements ------1,140,484 1,140,484 Total special programs ------8,340,245 8,340,245 Street related purposes: Construction & improvements -6,241,487 -----6,241,487 Street resurfacing ------4,869,886 4,869,886 Facilities maintenance reserve - 15,913,298 -----15,913,298 Drainage projects ------707,674 707,674 Traffic signals projects ------436,491 436,491 Total street related purposes - 22,154,785 ----6,014,051 28,168,836 Total Restricted - 22,154,785 8,546,839 48,618,876 7,469,637 55,049,189 26,529,194 168,368,520 Committed to: Aquatic center ------2,239,645 2,239,645 Capital asset replacement ---- 11,875,488 --11,875,488 Capital improvement projects reserve 17,008,555 ------17,008,555 Facilities maintenance reserve 23,109,303 ------23,109,303 Liability reserve 4,000,000 ------4,000,000 Other fund stability reserve 7,280,435 ------7,280,435 Emergency/contingency reserve 11,101,221 ------11,101,221 Employment benefits reserve 9,334,243 ------9,334,243 Equipment Replacement Reserve 1,193,094 ------1,193,094 Economic development / land acquisition reserve 830,000 ------830,000 Energy loan program ------2,197,246 2,197,246 Total Committed 73,856,851 --- 11,875,488 -4,436,891 90,169,230 Assigned to: General fund operating reserve 15,626,136 ------15,626,136 Capital projects: Facilities maintenance reserve ------6,073,334 6,073,334 City capital outlay projects ------4,553,719 4,553,719 Total capital projects ------10,627,053 10,627,053 Property acquisition ------420,387 420,387 Community contingency 444,000 ------444,000 Public facilities: Facilities maintenance reserve ------2,857,741 2,857,741 Public facilities ------1,415,456 1,415,456 Golf facilities ------9,304,743 9,304,743 Total public facilities ------13,577,940 13,577,940 Special programs: Library ------673,861 673,861 Professional services 331,342 ------331,342 Total special programs 331,342 -----673,861 1,005,203 Street related purposes: Street maintenance 295,347 ------295,347 Facilities maintenance reserve ------2,160,494 2,160,494 Total street related purposes 295,347 -----2,160,494 2,455,841 Total Assigned 16,696,825 -----27,459,735 44,156,560 Unassigned 5,681,608 ------5,681,608 Totals 100,413,464$ 22,154,785$ 8,546,839$ 48,618,876$ 19,345,125$ 55,049,189$ 58,444,247$ 312,572,525$ Loans and notes receivable Capital Projects Fund Special Revenue Funds Other Governmental Funds 71Page 228 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 12: Fund Balances (Continued) The fund balances reported on the fund statements now consist of the following categories: Nonspendable - This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted - This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers or through enabling legislation. Committed - This classification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. The City considers the adoption of a resolution to institute a formal action of City Council for the purpose of establishing, modifying or rescinding committed fund balances. Assigned - This classification includes amounts to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. This includes amounts that are assigned through adoption of a resolution by City Council. The Council may delegate the ability of an employee or committee to assign uses of specific funds, for specific purposes. Such delegation of authority occurred on September 27th, 2018 and will be in effect for future fiscal years. Unassigned -This classification includes the residual balance for the government’s general fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s policy is to apply res tricted fund balance first. When an expenditure is incurred for purposes for which committed, assigned or unassigned fund balances are available, the City’s policy is to apply committed fund balance first, then assigned fund balance, and finally unassigned fund balance. Note 13: Risk Management a. Description of Self-Insurance Pool Pursuant to Joint Power Agreement The City of Palm Desert is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 123 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The Authority began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors which operates through a nine-member Executive Committee. 72Page 229 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 13: Risk Management (Continued) b. Primary Self-Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool. Primary Liability Program In the liability program, claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses have a limit of $50 million per occurrence. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/protection/coverage-programs. Primary Workers' Compensation Program Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs in excess from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2020-21, the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law.Employer's Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. 73Page 230 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 13: Risk Management (Continued) c. Purchased Insurance Pollution Legal Liability Insurance The City of Palm Desert participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Palm Desert. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million. Property Insurance The City of Palm Desert participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. The City of Palm Desert’s property is currently insured according to a schedule of covered property submitted by the City of Palm Desert to the Authority. The City of Palm Desert’s property currently has all-risk property insurance protection in the amount of $264,643,396. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance, which has a $2,500 deductible. Crime Insurance The City of Palm Desert purchases crime insurance coverage in the amount of $10,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Special Event Tenant User Liability Insurance The City or Palm Desert further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Palm Desert according to a schedule. The City of Palm Desert then pays for the insurance. The insurance is facilitated by the Authority. d. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were no significant reductions in pooled or insured liability coverage in the fiscal year 2020-21. 74Page 231 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 14: Unearned Revenues and Deferred Inflows of Resources Unearned Revenues Major Governmental Funds Measure A Special Revenue Fund has $15,109,753 in funds received from the Successor Agency that are deemed unearned until expenditures are incurred related to construction of interchange. Housing Authority Special Revenue Fund has other amounts reported as unearned revenues include $57,698 for prepaid rents. Other Governmental Funds Special Revenue Funds $184,959 of grant funds are deemed unearned until expenditures are incurred in the Public Safety Police Grants Fund. $13,428 of grant funds are deemed unearned until expenditures are incurred in the Recycling Fund. $30,218 of unused portion of deposits are deemed unearned until event incurred in the Aquatic Center Fund. $4,063 of grant funds are deemed unearned until expenditures are incurred in the El Paseo Assessment District Fund. Capital Projects Fund Capital Projects Reserve fund has $63,041 of unearned revenue represents deposits for street improvements and public facilities, as the funds have not been spent as of June 30, 2021. Business-type Activities The balance of $255,228 represents the unused portions of prepaid golf fees and value of unredeemed gift certificates. The balance of $8,910 represents the unearned rent for the Parkview Office. Component Unit The balance of $144,048 represents the unused portions of prepaid banquets. 75Page 232 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 14: Unearned Revenues and Deferred Inflows of Resources (Continued) Deferred Inflows of Resources Major Governmental Funds General Fund On March 13, 1997, the City entered into an agreement with subsequent amendments on June 4, 1997, May 18, 2004, and May 12, 2009, with the Palm Desert Recreational Facilities Corporation (Corporation) for the use of property at the City’s Golf Resort (Des ert Willow). Payment is due when the Corporation’s revenues exceed its expenses. At June 30, 2021, the Corporation owed the City rent totaling $420,000, which will be recognized as revenue by the City when the rent is paid by the Corporation. The City entered into several individual loan agreements with residents of the Highlands Utility Undergrounding Assessment District No. 04-01. The residents agreed to pay to the City the full cost of the loan amount plus any accrued interest at a rate of 5.35%. The full amount of the loan along with all accrued interest is due and payable at the earliest of September 2, 2036, or any change in ownership of the property. As of June 30, 2021, $39,937 in interest has been accrued. Recognition of the interest revenue has been reported as unavailable until it becomes due. Interest receivable in the amount of $31,820 on the advance from the General Fund to the Energy Independence Special Revenue Fund, and $176,981 on investments purchased, and $32,850 on advance to Desert Willow are reported as unavailable revenue. Other accounts receivable for reimbursement of court fees in the amount of $17,477, outstanding lien in the amount of $83,798, traffic light reimbursements in the amount of $93,731, county abandoned vehicle reimbursement in the amount of $28,753, Emergency Management Performance Grant in the amount of $14,363, and $388,784 of timeshare facilities fees, are not available at year end. Housing Asset Fund Uncollected interest on notes receivable of $37,620 due from the Palm Desert Development Company has been reported as unavailable. Other Governmental Funds Special Revenue Funds Interest accrued on loans of $64,274 on loans receivable through the City’s EIP Program is reported as unavailable (see Note 3). 76Page 233 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 14: Unearned Revenues and Deferred Inflows of Resources (Continued) Capital Projects Fund The Capital Golf fund has $34,959 uncollected interest on advances due form the Desert Willow Golf Course. Debt Service Fund Assessment receivables in the amount of $1,188,117 represent future assessments to be received from property owners in Highlands Undergrounding Assessment Districts 04-1 to pay for long-term obligations incurred in making capital improvements in the Assessment District. Recognition of the revenue from the assessments has been deferred until it becomes available. Once received, the monies will be used to make annual debt service payments. Note 15: Other Post-Employment Benefits a. Plan Description In addition to the pension benefits described in Note 11, the City provides other post-employment benefits (OPEB) through the California Employers’ Retiree Benefit Trust Fund (CERBT), an agent multiple-employer defined benefit healthcare plan administered by the California Public Employees’ Retirement System (CalPERS). All full-time or part-time employees who meet the eligibility requirements for this program may continue their medical coverage through the CalPERS Health Plan and receive reimbursement from the City for a portion of the costs for the coverage. Separate financial statements for the CERBT may be obtained by writing to CalPERS at Lincoln Plaza North, 400 Q Street, Sacramento, California 95811, or by visiting the CalPERS website at www.calpers.ca.gov. Employees Hired Prior to January 1, 2008 Eligibility for the stipend requires retirement simultaneously from the City and CalPERS on or after age 50 with at least 10 consecutive years of service with the City. Eligible employees must be covered under the CalPERS Health Plan at the time of retirement and elect to participate in the stipend program within 30 days of retirement. The City’s contribution towards the coverage is based on years of service as follows: Consecutive Years of Service City's Contribution With the City at Retirement Percentage 10 years of service 50% 11 years of service 55% 12 years of service 60% 13 years of service 65% 14 years of service 70% 15 or more years of service 75% 77Page 234 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 15: Other Post-Employment Benefits (Continued) Employees Hired On or After January 1, 2008 Eligibility for the stipend requires retirement simultaneously from the City and CalPERS on or after age 50 with at least 15 consecutive years of service with the City. Eligible employees must be covered under the CalPERS Health Plan at the time of retirement and elect to participate in the stipend program within 30 days of retirement. The stipend is discontinued when the retiree reaches Medicare eligibility age. The City’s contribution towards the coverage will be applied to the lowest cost plan and is based on age at retirement and consecutive years of service with the City as outlined in the following table: Age1516171819202122232425+ 50 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 51 10% 15% 20% 25% 30% 35% 40% 45% 50% 50% 50% 52 20% 25% 30% 35% 40% 45% 50% 50% 50% 50% 50% 53 30% 35% 40% 45% 50% 50% 50% 50% 50% 50% 50% 54 40% 45% 50% 50% 50% 50% 50% 50% 50% 50% 50% 55+ 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% Consecutive Years of Service at Retirement Employees with at least 5 years of service, not meeting the eligibility requirements for the stipend program, who retire simultaneously from the City and CalPERS are eligible to continue medical coverage through the CalPERS Health Plan. The City is required to pay the CalPERS minimum employer contribution ($139 in 2020 and $143 in 2021) for these employees. Employees Hired On or After January 1, 2015 Employees are not eligible for either of the defined retiree health benefits plan but are instead enrolled in the City’s ICMA Retirement Health Savings Account. Employees have a mandatory 1% contribution to the Retirement Health Savings Plan and the City matches the 1% contribution. In addition, an employee can participate in the ICMA 401A Governmental Money Purchase Plan with a maximum pre-tax dollar contribution of 10%, with the City maximum match of 2%. As of June 30, 2020, the date of the most recent actuarial valuation, the City's plan has 111 active employees. 78Page 235 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 15: Other Post-Employment Benefits (Continued) Employees Covered -Plan membership, at June 30, 2020 valuation date, membership consisted of the following: Inactive plan members or beneficiaries 116 Active plan members 111 b. City Contributions to the Plan City contributions to the Plan occur as benefits are paid to retirees and/or to the OPEB trust. c. Net OPEB Asset The City’s Net OPEB Asset was measured as of June 30, 2020 and the Total OPEB Liability used to calculate the Net OPEB Asset was determined by an actuarial valuation as of June 30, 2020. Standard actuarial update procedures were used to project/discount from valuation to measurement dates. Actuarial assumptions. The total OPEB liability was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation 2.75% Salary Increase 3.25% per annum Assumed Wage Inflation 3.25% per annum Investment Rate of Return 6.20% per annum Healthcare cost-trend rates Assumed to start at 6.5% and grade down by 0.5% each year to 5% in 2024 Retirement Age The City offers the same plans to its retirees as to its active employees,withthe general exceptionthat uponreaching age 65 and becoming eligible for Medicare, the retiree must join one of the Medicare Supplement coverages offered under PEMHCA. Mortality Mortalityrates used were those published byCalPERS under the 2017 Experience study and projected using the MacLeod Watts Scale 2018 applied generationally. 79Page 236 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 15: Other Post-Employment Benefits (Continued) d. Discount Rate GASB 75 requires a discount rate that reflects the following: a) The long-term expected rate of return on OPEB plan investments –to the extent that the OPEB plan’s fiduciary net position (if any) is projected to be sufficient to make projected benefit payments and assets are expected to be invested using a strategy to achieve that return; b) A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher –to the extent that the conditions in (a) are not met. e. Changes in the Net OPEB Liability/(Asset) The changes in the Net OPEB liability/(Asset) for the Plan are as follows: Total OPEB Liability Plan Fiduciary Net Position Net OPEB Liability Balance at June 30, 2019 (Measurement Date)18,033,465$ 18,074,464$ (40,999)$ Changes recognized for the measurement period: Service Cost 366,971 - 366,971 Interest 1,117,500 - 1,117,500 Expected Investment Income -977,487 (977,487) Employer Contributions - 1,280,453 (1,280,453) Administrative Expenses -(9,045)9,045 Benefit Payments (752,486) (752,486)- Net Changes in Fiscal Year 2019-2020 731,985 1,496,409 (764,424) Balance at June 30, 2020 (Measurement Date)18,765,450$ 19,570,873$ (805,423)$ Increase (Decrease) f. Sensitivity of the Total OPEB Liability and Net OPEB Liability/(Asset) to Changes in the Discount Rate The following presents the Total OPEB liability and Net OPEB liability/(asset), as well as what the total OPEB liability and net OPEB liability/(asset) would be if they were calculated using a discount rate that is 1-percentage point lower (5.20 percent) or 1-percentage-point higher (7.20 percent) than the current discount rate: Discount Rate - 1% (5.20%) Current Discount Rate (6.20%) Discount Rate +1% (7.20%) Total OPEB Liability $ 21,169,503 $ 18,765,450 $ 16,767,481 Net OPEB Liability/(Asset) $ 1,598,630 $ (805,423) $ (2,803,392) 80Page 237 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 15: Other Post-Employment Benefits (Continued) g. Sensitivity of the Total OPEB Liability and Net OPEB Liability/(Asset) to Changes in the Health Care Cost Trend Rates The following presents the Total OPEB liability and net OPEB liability/(asset), as well as what the Total OPEB liability and net OPEB liability/(asset) would be if they were calculated using healthcare cost trend rates that are 1-percentage-point lower (5.50 percent decreasing to 4.00 percent) or 1-percentage-point higher (7.50 percent decreasing to 6.00 percent) than the current healthcare cost trend rates: 1% Decrease (5.50% decreasing to 4.00%) Trend Rate (6.50% decreasing to 5.00%) 1% Increase (7.50% decreasing to 6.00%) Total OPEB Liability $ 16,524,502 $ 18,765,450 $ 21,499,112 Net OPEB Liability $ (3,046,371) $ (805,423) $ 1,928,239 h. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the City recognized OPEB expense (revenue) of ($12,675). As of fiscal year ended June 30, 2021, the City reported deferred outflows and inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Changes of assumptions 1,242,802 693 Difference between projected and actual return on OPEB plan investments 66,227 - Contributions made subsequent to the measurement date 1,140,548 - Total 2,456,165$ 2,004,106$ Difference between expected and actual experiences 6,588$ 2,003,413$ The City will recognize the Contributions Made Subsequent to the Measurement Date in the next fiscal year. In addition, future recognition of the deferred resources is shown below: Measurement Period ended June 30: Deferred Outflows/(Inflows) of Resources 2022 (369,489)$ 2023 (308,585) 2024 (3,190) 2025 26,527 2026 (5,317) Thereafter (28,435) Total (688,489)$ 81Page 238 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 16: Special Assessment Debt Below is a summary of the changes in the special assessment bonds payable: Balance at July 1, 2020 Additions Payments and Reductions Balance at June 30, 2021 Due Within One Year 2003 Assessment Revenue Bonds 1,180,000$ -$ 180,000$ 1,000,000$ 100,000$ CFD 2005-1 Special Tax Bonds Series 2006A 27,280,000 - 1,030,000 26,250,000 1,080,000 AD 2004-2 Limited Obligation Improvement Bonds 20,565,000 - 735,000 19,830,000 765,000 Total 49,025,000$ -$ 1,945,000$ 47,080,000$ 1,945,000$ The City has Special Assessment Bonds Payable issued under the 1911 and 1915, Special Improvement Acts and the 1982 Mello-Roos Community Facilities Act (1982 Bonds). The City has no liability to 1911 Act bondholders until assessments have been collected from the property owner. Such liability is then recorded in the Custodial Funds. Therefore, the 1911 Bonds are not recorded as liabilities in the accompanying financial statements. The City also has no liability to the 1915 Act bondholders, or the bondholders of bonds issued under the 1982 Mello-Roos Community Facilities Act until assessments are collected on the tax rolls. However, the City may take certain actions to assume secondary liability for all or part of 1915 Act Bonds and the 1982 Bonds until such time as foreclosure proceedings are consummated. Special assessment bonds payable, as described below, and are not recorded as long-term liabilities, as these obligations do not constitute a debt or obligation of the City. 2003 Assessment Revenue Bonds In June 2003, the Palm Desert Financing Authority issued $4,423,000 in 2003 Assessment Revenue Bonds. The proceeds were used to purchase three series of limited obligation improvement bonds issued by the City in connection with the financing and refinancing of certain improvements of benefit to property within the City’s Assessment District No. 94-2 (Sunterrace), Assessment District No. 94-3 (Merano) and Silver Spur Ranch Utility Undergrounding Assessment District No. 01-01. These bonds were issued under the 1915 Improvement Bond Act to provide funds for public improvements in the respective assessment districts. Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total 2022 100,000$ 50,719$ 150,719$ 2023 110,000 45,206 155,206 2024 115,000 39,300 154,300 2025 120,000 33,056 153,056 2026 125,000 26,472 151,472 2027-2029 430,000 35,475 465,475 Total 1,000,000$ 230,228$ 1,230,228$ 82Page 239 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 16: Special Assessment Debt (Continued) As of June 30, 2021, the principal amounts to be repaid by the assessment district 01-1 to pay off the loans from the Financing Authority is $1,000,000.: Community Facilities District No. 2005-1 The bonds were issued in an original amount of $50,000,000 in May 2006, to construct and acquire certain public facilities of benefit to the District, provide for the establishment of a reserve account, provide capitalized interest, and pay the costs of issuance of the bonds. The bonds are secured by and payable from a pledge of net taxes derived from special taxes to be levied by the District on real properties within the boundaries of the District from the net proceeds of any foreclosure actions brought following delinquency in the payment of the special taxes, and from amounts held in certain funds under the indenture. Interest rates vary from 4.0% to 5.5% with interest payable semi-annually on March 1 and September 1, with principal maturing annually on September 1. In May 2007, the 2007 Bonds were issued in the amount of $17,915,000 pursuant to the Bond Indenture in May 2006, as supplemented by a First supplemental Indenture in May 2007, to provide construct and acquire certain public facilities of benefit to the District, provide capitalized interest, and pay the costs of issuance of the 2007 Bonds. The bonds are secured by and payable, on parity with the bonds issued in May 2006 for $50,000,000, from a pledge of net taxes derived from special taxes to be levied by the District on real properties within the boundaries of the District from the net proceeds of any foreclosure actions brought following delinquency in the payment of the special taxes, and from amounts held in certain funds under the indenture. On March 1, 2016, a combined total of $20,885,000 of the outstanding bonds were called. Interest rates vary from 3.875% to 5.20% with interest payable semi-annually on March 1 and September 1, with principal maturing annually on September 1. Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total 2022 1,080,000$ 1,382,625$ 2,462,625$ 2023 1,140,000 1,325,700 2,465,700 2024 1,195,000 1,264,406 2,459,406 2025 1,255,000 1,200,094 2,455,094 2026 1,320,000 1,132,500 2,452,500 2027 - 2031 7,805,000 4,494,840 12,299,840 2032 - 2036 10,100,000 2,087,908 12,187,908 2037 2,355,000 64,763 2,419,763 Total 26,250,000$ 12,952,836$ 39,202,836$ 83Page 240 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 16: Special Assessment Debt (Continued) Section 29 Assessment District (No 2004-02), Limited Obligation Improvement Bonds, Series 2007 In March 2007, the City of Palm Desert issued $29,430,000 Limited Obligation Improvement Bonds. The proceeds of the Bonds will be used to finance certain infrastructure improvements within the City’s Section 29 Assessment District (No. 2004-02). The debt service on the bonds is to be paid by assessments secured on the property tax rolls of those properties benefiting from the improvements. The bonds consist of Serial Bonds in the amount of $6,870,000 with interest ranging from 4.00% to 4.70% payable semiannually on March 2 and September 2. Bond maturities begin September 2, 2009 and continue annually through 2020. Term bonds in the amount of $2,525,000 carry an interest rate of 4.75% and mature September 2, 2022. Term bonds in the amount of $5,110,000 carry an interest rate of 5.05% and mature September 2, 2027. Term bonds in the amount of $14,925,000 carry an interest rate of 5.10% and mature September 2, 2037. Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total 2022 765,000$ 985,354$ 1,750,354$ 2023 800,000 948,185 1,748,185 2024 845,000 907,849 1,752,849 2025 885,000 864,166 1,749,166 2026 930,000 818,338 1,748,338 2027-2031 5,395,000 3,317,685 8,712,685 2032-2036 6,920,000 1,756,185 8,676,185 2037-2038 3,290,000 169,830 3,459,830 Total 19,830,000$ 9,767,592$ 29,597,592$ Bond Reserve Requirements At June 30, 2021, the fund balance reserve requirements and actual reserve balances were as follows: Requirement Actual 2003 Financing Authority Revenue Bonds 156,959$ 160,890$ CFD 2005-1 Special Tax Bonds 2,465,700 2,701,638 Assessment District 29 1,752,849 1,744,551 Note 17: Other Disclosures The Palm Desert Recreational Facilities Corporation has a deficit of $1,061,349, which will be eliminated by increasing revenues through banquet reservations and outings directly related to the expansion of the outside dining terrace and the kitchen. The Fiduciary Private-Purpose Trust Fund has a deficit of $137,612,346, which will be funded through future property taxes collected by the County under the direction of the State. The State of California is the responsible body for the elimination of this deficit. 84Page 241 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 18: Construction and Other Significant Commitments Construction Commitments Primary Government Current Year Prior Year Remaining Spent Spent Commitment General Fund Landscape and Lighting Distict 2,240$ -$ -$ Traffic Signal Improvements 90,127 - 127,623 Marriott / Hotel El Paseo CO-OP - - 57,450 Promotional Advertising / Rebranding 274,330 - 134,670 Drainage Improvements 3,855 - 6,145 Local NonProfit Agency Funding Agreement 7,500 - 13,168 City Fleet Maintenance 34,847 64,291 74,829 Misc nonConsturction 154,263 - 212,804 Measure A Street Improvements 283,736 1,031,356 1,757,349 San Pablo Street Improvements 2,905,806 861,577 2,538,404 CVLINK 60,547 - 39,350 Traffic Signal Improvements 77,791 - 361,512 Capital Properties San Pablo Street Improvements 3,695,701 1,514,219 725,002 Pesidents Plaza Parking Lot Improvements 720,395 552,433 7,312,949 Alessandro West Improvement Project 1,088,757 11,720 111,095 Housing Authority City Owned Buildings Improvments - - 511,164 Other Governmental Funds City Owned Buildings Improvments 16,680 112,094 76,156 Street Improvements 2,066,179 837,040 43,797 CVLINK 5,698,631 22,107 2,062,642 Recycle Projects 201,636 48,359 263,005 Traffic Signal Improvements - - 6,925 Promotional Advertising / Rebranding 14,859 - 3,971 Alessandro West Improvement Project 411,312 17,936 45,000 Drainage Improvements - 273,818 36,100 El Paseo Art Exhibit 81,000 9,000 10,000 Local NonProfit Agency Funding Agreement 400,000 800,000 1,000,000 City Fleet 243,357 448,371 523,417 iHub 206,015 96,665 1,172,450 Equipment Ordered, Vehicles - - 126,339 CDBG 237,156 - 146,444 CDBG-Covid 19 143,190 - 79,230 Misc Non-Consturction 103,172 19,563 169,545 19,223,082 6,720,549 19,748,535 Project 85Page 242 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 18: Construction and Other Significant Commitments (Continued) Fiduciary Funds Project Current Year Spent Prior Year Spent Remaining Commitment Sewer Rent Payment $ 139,673 $ 372,461 $ 2,479,192 139,673$ 372,461$ 2,479,192$ Note 19: Dissolution of California Redevelopment Agencies and Wind-Down by Successor Agencies Pursuant to AB X1 26 (adopted by the California Legislature in June 2011)and the State Supreme Court’s decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231 (2011), all redevelopment agencies in the State were dissolved as of February 1, 2012. The City Council adopted Resolution No. 2011-76 on August 25, 2011, pursuant to Health and Safety Code (“HSC”) Section 34172, electing for the City to serve as the Successor Agency (‘SARDA”)to the former Palm Desert Redevelopment Agency (the “Dissolved RDA”). SARDA is tasked with the wind-down of the Dissolved RDA’s affairs. Certain SARDA actions must first be approved by an oversight board, composed of seven-members representing taxing entities. HSC Section 34173(g) expressly provides that SARDA is a separate public entity from the City, and the liabilities and assets of the Dissolved RDA shall not be transferred to the City. Pursuant to HSC Section 34176, the City Council adopted Resolution No. 2012-07, on February 9, 2012, electing to have the Palm Desert Housing Authority to serve as the Housing Successor. The Housing Authority (as the Housing Successor) submitted to the State Department of Finance (“DOF”) a list of housing assets to be transferred by SARDA to the Housing Successor. On August 31, 2012, the DOF issued a letter indicating that the DOF had no objection to such housing asset list. The housing assets (per the housing asset list), obligations, and activities of the Dissolved RDA were transferred to the Housing Successor and are reported in the Housing Asset Fund beginning in fiscal year 2011-12. However, outstanding bonds (“Housing Bonds”), secured by a pledge of moneys which would have been deposited into the Dissolved RDA’s low and moderate income housing fund (known as the “Housing Set Aside”), remain as the SARDA’s enforceable obligations. See also “Stipulated Judgment”below. All other assets, obligations, and activities of the Dissolved RDA have been transferred and are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City. The County Auditor-Controller (“CAC”)has established a Redevelopment Property Tax Trust Fund (the “RPTTF”) for SARDA and is charged with depositing into the RPTTF the amount of property taxes that would have been redevelopment property tax increment had the Dissolved RDA not been dissolved. 86Page 243 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 19: Dissolution of California Redevelopment Agencies and Wind-Down by Successor Agencies (Continued) SARDA is required to prepare an annual recognized obligation payment schedule (the “ROPS”) setting forth the amounts due for enforceable obligations from each July 1 through the following June 30. The CAC only makes payments to the SARDA from the RPTTF based on the ROPS amounts approved by the oversight board and the DOF. During fiscal year 2012-13, SARDA was required to conduct due diligence reviews of the low and moderate income housing fund and all other funds to compute the funds (cash) which were not needed to be retained to pay existing enforceable obligations or otherwise unrestricted, and therefore, must be remitted to the CAC. SARDA paid a total amount of $40,988,399 to the CAC based on the due diligence reviews per the DOF’s determination. The DOF issued a Finding of Completion on May 15, 2013 after SARDA remitted such payments. The Finding of Completion allows the placement of certain loans (“Advances”) made by the City to the Dissolved RDA (which were previously voided by operation of law upon the Dissolved RDA’s dissolution) on the ROPS. For each approved repayment 20% of the repayment amount must be allocated to the Housing Asset Fund. The repayment of the Advances, pursuant to the oversight board’s and the DOF’s approval, began during fi scal year 2019-20. At June 30, 2021, the balance of outstanding and unpaid Advances were paid in full. See further discussion under Note 20. Pursuant to HSC Section 34191.4(b), unpaid interest on the remaining principal amount of the Advances shall be calculated at a simple rate of 3%. Based on the 3% simple rate, the unpaid accrued interest on the Advances as of June 30, 2021, totaled $0 due to the remaining balance payoff. The California State Controller was directed to review the propriety of any transfers of assets between the Dissolved RDA and other public bodies that occurred after January 1, 2011. The State Controller completed its review on March 14, 2013 and did not identify any unallowable transfers of assets that occurred between the Dissolved RDA and the City or other public agencies. SARDA’s use and disposition of all real properties held (Long Range Property Management Plan (“LRPMP”), was approved by the DOF on June 2, 2014. The LRPMP allowed the SARDA to transfer property used for government purposes with a cost basis of $6,390,263 to the City. Stipulated Judgment On May 15, 1991, the Riverside County Superior Court entered a final judgment incorporating the terms of a Stipulation for Entry of Judgment (“Original Stipulation”) in Case No. 51124 and a Stipulation for Entry of Judgment pursuant to Settlement Agreement and Mutual Release (“Settlement Agreement”) in Case No. 51124, among the Dissolved RDA, the City, the Western Center on Law and Poverty, Inc., California Rural Legal Assistance, and others. On June 18, 1997 and on September 20, 2002, the Riverside County Superior Court amended the judgment, incorporating Stipulations Amending Stipulation for Entry of Judgment. 87Page 244 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 19: Dissolution of California Redevelopment Agencies and Wind-Down by Successor Agencies (Continued) The judgment, as amended (the “Judgment”), generally required the Dissolved RDA to use 20% of its tax increment revenues, and additional tax increment revenues if necessary, to develop, rehabilitate, or otherwise financially assist affordable housing units and to meet certain housing needs of the City. Before dissolution, the Dissolved RDA used its Housing Set-Aside to fulfill its obligations under the Judgment (including the payment of debt service on the Housing Bonds issued to finance and refinance affordable housing projects that satisfied the requirements of both the Judgment and the relevant Redevelopment Law provisions). While the low and moderate income housing fund and the requirement to deposit the Housing Set-Aside into such fund have been eliminated upon the Dissolved RDA’s dissolution,SARDA continues to recognize the Judgment as its enforceable obligation. On its ROPS, the SARDA has included line items designated as “Stipulation Judgment Case No. 51124,” listing the amounts necessary to fulfill its obligations under the Judgment (after taking into account the amounts already listed for the repayment of the Housing Bonds). While the DOF originally approved such line items, the DOF changed its position beginning with ROPS 14-15A (i.e., covering the period commencing July 1, 2014). On August 14, 2014, SARDA filed an action, SARDA to the Palm Desert Redevelopment Agency v. Michael Cohen, Sacramento Superior Court Case No. 34-2014-00167698 (the “Successor Agency Lawsuit”), seeking to compel the DOF to permit payment of the affordable housing obligations mandated by the Judgment. Subsequently, in view of the fact that there were similar cases pending in the California Court of Appeal (Third District), the SARDA voluntarily dismissed its action without prejudice pending resolution of those other cases. To date, none of the other cases has resulted in a decision that would compel the DOF to permit payment of the obligations under the Judgment as an enforceable obligation. Note 20: Successor Agency Disclosures The assets and liabilities of the Dissolved RDA (except for those transferred to the Housing Successor and reported in the Housing Asset Fund) have been transferred to the SARDA. The SARDA is acting in a fiduciary capacity for the assets and liabilities. Disclosures related to these transactions are as follows: The advances from the General Fund and Other Governmental Funds were made to the Dissolved RDA for capital improvements. The Dissolved RDA’s low and moderate housing fund also made an advance to the Dissolved RDA to cover the remittance that the Dissolved RDA made to the CAC for deposit into the County Supplemental Educational Revenue Augmentation Fund (“SERAF”) in fiscal year 2009-10. The repayment of the Advances repayable to City Funds for any fiscal year is subject to a cap calculated pursuant to HSC Section 34191.4 and has a lower priority for repayment relative to the repayment of the SERAF loans. Further, 20% of the repayment must be transferred to the Housing Asset Fund (Housing Authority, as Housing Successor). 88Page 245 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 20: Successor Agency Disclosures (Continued) Capital Assets Balance at July 1, 2020 Additions Deletions Balance at June 30, 2021 Capital assets, not being depreciated: Land 24,891,841$ -$ -$ 24,891,841$ Total capital assets, not being depreciated 24,891,841$ -$ -$ 24,891,841$ Tax Allocation Bonds A summary of changes in tax allocation bonds at June 30, 2021, was as follows: Balance July 1, 2020 Additions/ Accretion Repayments/ Reductions Balance June 30, 2021 Due Within One Year Project Area No. 2 2003 TARBs, $15,745,000 15,745,000$ -$ -$ 15,745,000$ -$ 2017 A TARBs, $52,390,000 45,535,000 - 2,875,000 42,660,000 3,060,000 2017 B TARBs, $140,130,000 122,855,000 - 8,325,000 114,530,000 8,780,000 2017 H-A TARBs, $7,365,000 6,265,000 - 395,000 5,870,000 415,000 2017 H-B TARBs, $45,815,000 23,805,000 - 5,735,000 18,070,000 5,860,000 Subtotal 214,205,000 - 17,330,000 196,875,000 18,115,000 Add: Unamortized bond premium 6,649,415 - 643,183 6,006,232 - Less: Unamortized bond discount (1,872,071) - (134,731) (1,737,340)- Total 218,982,344$ -$ 17,838,452$ 201,143,892$ 18,115,000$ 2017 Tax Allocation Refunding Bonds The tax allocation revenues bonds issued before 2011 (i.e., before the dissolution of the Dissolved RDA) were issued by the Palm Desert Financing Authority, the proceeds of which were loaned to the Dissolved RDA for financing or refinancing redevelopment projects. Pursuant to the bond documents, the Authority’s bonds were secured by the Dissolved RDA’s (and after dissolution, are secured by the Successor Agency’s)repayment of the loans were secured by tax increment (after the Dissolved RDA’s dissolution, are secured by certain moneys deposited in the RPTTF, see Notes 19) and other funds as provided in the bond documents. In January 2017, the Successor Agency issued four series of bonds: (i) the Tax Allocation Refunding Bonds, 2017 Series A, in the aggregate principal amount of $52,390,000 (the “2017A Bonds”), (ii) the Taxable Tax Allocation Refunding Bonds, 2017 Series B, in the aggregate principal amount of $140,130,000 (the “2017B Bonds”), (iii) the Tax Allocation Refunding Bonds, 2017 Series H-A, in the aggregate principal amount of $7,365,000 (the “2017H-A Bonds”); and (iv) the Taxable Tax Allocation Refunding Bonds, 2017 Series H-B, in the aggregate principal amount of $45,815,000 (the “2017H-B Bonds”). As further described below, the 2017 refunding refunded all of the outstanding tax allocation revenue bonds, except for the Project Area No. 2 2003 Bonds. None of these bonds or any interest thereon are a debt of the City, the State of California or any of its political subdivisions (except for the Successor Agency), and none the City, the State of California nor any of its political subdivisions (except for the Successor Agency) is liable on the bonds, nor in any event shall the bonds and interest thereon be payable out of any funds or properties other than those provided under the respective bond documents. 89Page 246 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 20: Successor Agency Disclosures (Continued) The remaining outstanding Project Area No. 2 2003 Bonds were insured by MBIA Insurance Corporation (“MBIA”). On February 18, 2009, MBIA announced the restructuring of its financial guaranty insurance operations into two separately capitalized sister companies, with one entity (MBIA Illinois) assuming the risk associated with its U.S. municipal exposures, and the other (MBIA Corp) insuring the remainder of the portfolio. Effective March 19, 2009, MBIA Illinois was renamed National Public Finance Guarantee Corporation (“NPFGC”). Some (but not all) of the maturities of each series of the 2017 Bonds are insured by Build America Mutual Assurance Company. 2003 Series Tax Allocation Revenue Bonds (Project Area No. 2) On March 26, 2003, the Palm Desert Financing Authority issued $15,745,000 of Tax Allocation Revenue Bonds (Project Area No. 2) 2003 Series. The Palm Desert Financing Authority loaned the bond proceeds to the Dissolved RDA to fund various redevelopment capital projects in Project Area No. 2. Interest rates on the bonds vary from 4.5% to 5.0% per annum payable semi-annually on February 1 and August 1, with principal maturing as follows: 875,000 Serial Bonds August 1, 2023 910,000 Serial Bonds August 1, 2024 2,485,000 Term Bonds August 1, 2026 11,475,000 Term Bonds August 1, 2033 The future debt service requirements on the 2003 Series Tax Allocation Revenue Bonds (Project Area No. 2) are as follows: Principal Interest Total 2022 -$ 769,006$ 769,006$ 2023 - 769,006 769,006 2024 875,000 749,319 1,624,319 2025 910,000 709,156 1,619,156 2026 1,145,000 662,203 1,807,203 2027 - 2031 7,400,000 2,312,488 9,712,488 2032 - 2034 5,415,000 415,125 5,830,125 15,745,000$ 6,386,303$ 22,131,303$ Year Ending June 30, 2017 Series A Tax Allocation Refunding Bonds On January 31, 2017, the Successor Agency issued the 2017A Bonds, in the principal amount of $52,390,000. The proceeds from the 2017A Bonds were utilized to refund the Project Area No. 1 2002A Bonds, Project Area No. 1 2003 Bond, Project Area No. 1 2004 Bonds, the Project Area No. 2 2002A Bonds, and the Project Area No. 4 1998 Bonds and pay certain costs associated with the issuance of the bonds. Interest rates on the bonds vary from 2.00% to 5.00% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2021, the outstanding principal balance on the bonds $42,660,000. 90Page 247 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 20: Successor Agency Disclosures (Continued) The future debt service requirements on the 2017A Bonds are as follows: Year Ending June 30, Principal Interest Total 2022 3,060,000$ 2,056,500$ 5,116,500$ 2023 3,195,000 1,900,125 5,095,125 2024 715,000 1,802,375 2,517,375 2025 6,630,000 1,618,750 8,248,750 2026 6,910,000 1,280,250 8,190,250 2027 - 2031 22,150,000 2,525,500 24,675,500 Total 42,660,000$ 11,183,500$ 53,843,500$ 2017 Series B Tax Allocation Refunding Bonds On January 31, 2017, the Successor Agency issued the 2017B Bonds, in the principal amount of $140,130,000. The proceeds from the 2017B Bonds were utilized refund the Project Area No. 1 2006A Bonds, the Project Area No. 2 2006A Bonds, the Project Area No. 2 2006D Bonds, the Project Area No. 3 2003 Bonds, the Project No. 3 2006A Bonds, the Project Area No. 3 2006B Bonds, the Project Area No. 3 2006C Bonds, the Project Area No. 4 2001 Bonds, the Project Area No. 4 2006A Bonds, and the Project Area No. 4 2006B Bonds and pay certain costs associated with the issuance of the bonds. Interest rates on the bonds vary from 1.25% to 4.25% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2021, the outstanding principal balance on the bonds is $114,530,000. The future debt service requirements on the 2017B Bonds are as follows: Year Ending June 30, Principal Interest Total 2022 8,780,000$ 3,971,400$ 12,751,400$ 2023 9,405,000 3,726,844 13,131,844 2024 11,675,000 3,422,400 15,097,400 2025 5,585,000 3,160,009 8,745,009 2026 5,710,000 2,979,956 8,689,956 2027 - 2031 30,115,000 11,713,848 41,828,848 2032 - 2036 35,175,000 5,520,306 40,695,306 2037 - 2041 7,385,000 579,806 7,964,806 2042 700,000 14,875 714,875 Total 114,530,000$35,089,444$149,619,444$ 91Page 248 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 20: Successor Agency Disclosures (Continued) 2017 Series H-A Tax Allocation Refunding Bonds On January 31, 2017, the Successor Agency issued the 2017H-A Bonds, in the principal amount of $7,365,000. The proceeds from the 2017H-A Bonds were used to refund the 2002 Housing Bonds and pay certain costs associated with the issuance of the bonds. Interest rates on the bonds vary from 2.00% to 5.00% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2021, the outstanding principal balance on the bonds is $5,870,000. The future debt service requirements on the 2017 Series H-A Tax Allocation Refunding Bonds are as follows: Year Ending June 30, Principal Interest Total 2022 415,000$ 259,394$ 674,394$ 2023 430,000 238,269 668,269 2024 455,000 216,144 671,144 2025 475,000 192,894 667,894 2026 505,000 168,394 673,394 2027 - 2031 2,925,000 434,265 3,359,265 2032 665,000 10,806 675,806 Total 5,870,000$ 1,520,166$ 7,390,166$ 2017 Series H-B Tax Allocation Refunding Bonds On January 31, 2017, the Successor Agency issued the 2017H-B Bonds, in the principal amount of $45,815,000. The proceeds from the 2017 H-B Bonds were used to refund the 2007 Housing Bond and pay certain costs associated with the issuance of the bonds. Interest rates on the bonds vary from 1.25% to 3.00% per annum payable semi-annually on April 1 and October 1, commencing April 1, 2017, with principal maturing annually on October 1. As of June 30, 2021, the outstanding principal balance on the bonds is $18,070,000. The future debt service requirements on the 2017H-B Bonds are as follows: Year Ending June 30, Principal Interest Total 2022 5,860,000$ 428,175$ 6,288,175$ 2023 6,015,000 268,556 6,283,556 2024 6,195,000 92,925 6,287,925 Total 18,070,000$ 789,656$ 18,859,656$ 92Page 249 CITY OF PALM DESERT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 21: Tax Abatement The City entered into a tax abatement agreement of transient occupancy tax revenue with a local hotel under the authority of the City Council of the City of Palm Desert. Tax abated each year is a calculation of the product of fifty percent (50%) of paid transient occupancy tax revenues paid to the City by the hotel. For the fiscal year ended June 30, 2021, the City abated tax increment totaling $802,324 under this agreement. Note 22: Prior Period Adjustment At June 30, 2021, the City reported a prior period adjustment in the amount of $32,968,953 in the custodial funds in the Statement of Changes in Fiduciary Net Position. The prior period adjustment was due to the implementation of GASB Statement No. 84, Fiduciary Activities, for accounting and financial reporting purposes. The adjustment will convert former agency funds, which previously only reported assets and liabilities, to a full accrual custodial fund with an economic resources measurement focus to include the reporting of the custodial funds net position. Note 23: Subsequent Event On July 28, 2021, the City of Palm Desert issued CFD 2021-1 Special Tax Bonds Series 2021 and CFD 2005-1 Special Tax Refunding Bonds Series 2021A in relation to the University Park development. The purpose of the bonds is to refund the CFD 2005-1 Special Tax Bonds Series 2006A. In addition, the CFD 2021-1 bonds finance certain new public improvements for the University Park development. The new bonds carry principal balances of $15,200,000 and $5,165,000 respectively. The bonds bear interest rates of 3% to 4%. The CFD 2021-1 bonds are payable over 30 years with interest payments beginning on March 1, 2022 and principal payments beginning on September 1, 2022. The new CFD 2005-1 bonds are payable over 15 years with interest payments beginning on March 1, 2 022 and principal payments beginning on September 1, 2022. On July 14, 2021, the City of Palm Desert issued Section 29 Assessment District 2004 -02 Limited Obligation Refunding Improvement Bonds Series 2021. The purpose of the issuance is to refund the Section 29 AD 2004-02 Limited Obligation Improvement Bonds Series 2007. The principal balance of the new bonds was $16,400,000. The bonds bear interest rates of 2% to 4% and are payable over 16 years with interest payments beginning on March 2, 2022 and principal payments beginning on September 2, 2022. 93Page 250 This page intentionally left blank 94Page 251 REQUIRED SUPPLEMENTARY INFORMATION 95Page 252 CITY OF PALM DESERT MISCELLANEOUS PLAN - AGENT MULTIPLE-EMPLOYER SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 TOTAL PENSION LIABILITY Service Cost 2,156,598$ 2,125,437$ 2,076,964$ 2,204,265$ Interest 7,991,591 8,223,320 8,327,823 8,558,529 Difference between Expected and Actual Experience - (2,378,254) (4,259,317) (1,895,482) Changes in Assumptions - (2,091,348)- 7,367,723 Benefit Payments, Including Refunds of Employee Contributions (4,849,320) (4,597,025) (4,801,252) (5,401,531) Net Change in Total Pension Liability 5,298,869 1,282,130 1,344,218 10,833,504 Total Pension Liability - Beginning 107,900,900 113,199,769 114,481,899 115,826,117 Total Pension Liability - Ending (a)113,199,769$ 114,481,899$ 115,826,117$ 126,659,621$ PLAN FIDUCIARY NET POSITION Contributions - Employer 3,320,450$ 4,065,411$ 4,257,322$ 5,303,371$ Contributions - Employee 995,504 878,171 870,981 828,467 Net Investment Income 11,290,314 1,682,498 448,184 8,800,663 Benefit Payments, Including Refunds of Employee Contributions (4,849,320) (4,597,025) (4,801,252) (5,401,531) Administrative Expense -(87,279)(47,263) (115,573) Net Plan to Plan Resource Movement ---- Other Miscellaneous Income/(Expense)---- Net Change in Fiduciary Net Position 10,756,948 1,941,776 727,972 9,415,397 Plan Fiduciary Net Position - Beginning 64,851,550 75,608,498 77,550,274 78,278,246 Plan Fiduciary Net Position - Ending (b)75,608,498$ 77,550,274$ 78,278,246$ 87,693,643$ Plan Net Pension Liability/(Assets) - Ending (a) - (b)37,591,271$ 36,931,625$ 37,547,871$ 38,965,978$ 66.79%67.74%67.58%69.24% Covered Payroll 11,110,759$ 11,448,621$ 11,342,713$ 10,684,238$ 338.33%322.59%331.03%364.71% Notes to Schedule: Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only seven years are shown. Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2019 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: None in 2019 or 2020. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. See Notes to Required Supplementary Information 96Page 253 2019 2020 2021 2,196,462$ 1,973,971$ 2,086,683$ 8,797,867 9,261,660 9,645,145 (594,882) 1,762,387 533,373 (1,148,708)-- (5,934,338) (6,383,377) (6,540,485) 3,316,401 6,614,641 5,724,716 126,659,621 129,976,022 136,590,663 129,976,022$ 136,590,663$ 142,315,379$ 5,407,412$ 5,963,737$ 4,521,813$ 812,447 791,794 805,528 7,555,653 6,322,815 5,102,524 (5,934,338) (6,383,377) (6,540,485) (136,651) (67,893) (143,465) (222)-- (259,502)222 - 7,444,799 6,627,298 3,745,915 87,693,643 95,138,442 101,765,740 95,138,442$ 101,765,740$ 105,511,655$ 34,837,580$ 34,824,923$ 36,803,724$ 73.20% 74.50%74.14% 10,751,687$ 9,807,088$ 11,392,639$ 324.02% 355.10%323.05% See Notes to Required Supplementary Information 97Page 254 CITY OF PALM DESERT MISCELLANEOUS PLAN - AGENT MULTIPLE-EMPLOYER SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 Actuarially Determined Contribution 3,393,171$ 3,585,082$ 3,550,127$ 4,219,764$ Contribution in Relation to the Actuarially Determined Contribution (4,065,411) (4,257,322) (5,303,371)(5,396,908) Contribution Deficiency (Excess)(672,240)$ (672,240)$ (1,753,244)$ (1,177,144)$ Covered Payroll 11,448,621$ 11,342,713$ 10,684,238$ 10,751,687$ Contributions as a Percentage of Covered Payroll 35.51%37.53% 49.64%50.20% Note to Schedule: Valuation Date: Methods and assumptions used to determine contribution rates: Actuarial cost method Amortization method/period Asset valuation method Inflation Salary increases Payroll growth Investment rate of return Retirement age Mortality 7.25% net of pension investment and administrative expenses, including inflation. The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using the 90% scale MP 2016 published by the Society of Actuaries. (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only seven years are shown. June 30, 2019 2.875% Varies by entry age and service 2.625% Market value Level percentage of payroll, closed Entry age normal See Notes to Required Supplementary Information 98Page 255 2019 2020 2021 4,225,204$ 4,736,668$ 4,936,652$ (5,963,737) (4,521,813)(4,729,797) (1,738,533)$ 214,855$ 206,855$ 9,807,088$ 11,392,639$ 10,353,849$ 60.81% 39.69%45.68% See Notes to Required Supplementary Information 99Page 256 CITY OF PALM DESERT SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY/(ASSET) AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2018 2019 2020 2021 Total OPEB Liability Service cost 346,417$ 357,675$ 369,299$ 366,971$ Interest on the total OPEB liability 1,144,106 1,199,747 1,256,431 1,117,500 Differences between expected and actual experience - - (4,066,457)- Changes in assumptions - - 2,552,767 - Benefit payments (653,187) (696,845) (756,759) (752,486) Net change in total OPEB liability 837,336 860,577 (644,719)731,985 Total OPEB liability - beginning 16,980,271 17,817,607 18,678,184 18,033,465 Total OPEB liability - ending (a)17,817,607$ 18,678,184$ 18,033,465$ 18,765,450$ Plan Fiduciary Net Position Contribution - employer 1,255,960$ 1,381,501$ 2,408,260$ 1,280,453$ Net investment income 902,331 843,319 1,226,966 977,487 Benefit payments (653,187) (696,845) (756,759) (752,486) Administrative expense (6,541) (7,371) (3,515) (9,045) Other Expenses - (18,115) - - Net change in plan fiduciary net position 1,498,563 1,502,489 2,874,952 1,496,409 Plan fiduciary net position - beginning 12,198,460 13,697,023 15,199,512 18,074,464 Plan fiduciary net position - ending (b)13,697,023 15,199,512 18,074,464 19,570,873 Net OPEB Liability/(Asset) - ending (a) - (b)4,120,584$ 3,478,672$ (40,999)$ (805,423)$ Plan fiduciary net position as a percentage of the total OPEB liability/(asset)76.87% 81.38% 100.23% 104.29% Covered-Employee payroll 10,584,400$ 10,749,431$ 10,546,052$ 11,382,103$ Net OPEB liability/(asset) as a percentage of covered-employee payroll 38.93% 32.36% -0.39% -7.08% (1)Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. See Notes to Required Supplementary Information 100Page 257 CITY OF PALM DESERT SCHEDULE OF PLAN CONTRIBUTIONS - OPEB AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2018 2019 2020 2021 520,620$ 455,021$ 348,915$ 320,508$ (1,217,465) (2,211,778) (1,280,453) (1,140,548) (696,845)$ (1,756,757)$ (931,538)$ (820,040)$ 10,741,786$ 10,546,052$ 11,382,103$ 10,881,697$ 11.33%20.97%11.25%10.48% Notes to Schedule: Methods and assumptions used to determine contributions: Actuarial Cost Method Amortization Valuation Method/Period Asset Valuation Method Market value of assets Inflation 2.75% Payroll Growth 3.25% per annum, in aggregate Investment Rate of Return 6.20% per annum Healthcare cost-trend rates Retirement Age Mortality (1)Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contributions Contribution Deficiency (Excess) Covered-Employee payroll Contributions as a percentage of covered-employee payroll Entry Age Normal Level percent of payroll over a closed rolling 6.5%; Medical plan premiums and claims costs by age are stepping down by 0.5% each year to 5%. Tier 1 employees - 2.50% @55 and Tier 2 employees - 2.00% @62 The probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period of 1997 to 2015. Mortality rates used were those published by CalPERS, adjusted to back out 20 years of Scale BB to central year 2008, then projected using the MacLeod Watts Scale 2017 applied generationally. See Notes to Required Supplementary Information 101Page 258 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 92,878,551$92,878,551$92,878,551$ -$ Resources (Inflows): Taxes Property taxes 6,832,597 6,832,597 6,648,488 (184,109) Property transfer tax 563,105 1,027,105 1,027,833 728 Property tax in lieu 4,467,600 4,467,600 4,544,788 77,188 Timeshare mitigation fee 1,482,583 1,482,583 1,501,625 19,042 Sales tax 15,750,000 21,156,000 21,156,220 220 Business license tax 1,200,000 970,000 962,940 (7,060) Job valuation fees 75,797 75,797 25,445 (50,352) Transient occupancy tax 8,514,517 10,754,517 10,760,455 5,938 Franchises 3,125,550 3,125,550 3,066,989 (58,561) Penalties and interest on taxes 10,000 10,000 29,992 19,992 Total Taxes 42,021,749 49,901,749 49,724,775 (176,974) Licenses and Permits Building permits 400,000 1,181,000 1,181,896 896 Grading permits 45,000 45,000 13,997 (31,003) Encroachment permits 30,000 30,000 46,517 16,517 Miscellaneous permits 500 500 585 85 Business regulatory permits 30,000 30,000 20,815 (9,185) Golf cart permits 1,500 1,500 1,730 230 Valet parking permits 550 550 75 (475) Total Licenses and Permits 507,550 1,288,550 1,265,615 (22,935) Intergovernmental State mandate cost - - 83 83 Federal ARPA/COVID19 - 5,656,000 5,654,951 (1,049) Motor vehicle in-lieu fees 24,000 24,000 38,862 14,862 Monthly parking bail 10,000 10,000 7,287 (2,713) Reimbursement RDA costs 650,000 650,000 575,284 (74,716) Other reimbursements 636,500 636,500 654,200 17,700 Total Intergovernmental 1,320,500 6,976,500 6,930,667 (45,833) Rental income 66,000 66,000 66,913 913 Charges for Services Subdivision fees 250,000 250,000 276,492 26,492 Zoning fees 70,000 70,000 32,981 (37,019) Plan check fees 250,000 250,000 480,881 230,881 Sale of maps and publications 10,000 10,000 8,777 (1,223) Microfilm fees 2,028 2,028 498 (1,530) Vehicle impact fee 570,000 570,000 618,430 48,430 Other fees 123,000 123,000 143,496 20,496 Total Charges for Services 1,275,028 1,275,028 1,561,555 286,527 Investment Earnings Interest income 375,000 74,500 118,365 43,865 Interest on notes receivable 200,000 200,000 166,379 (33,621) Total investment Earnings 575,000 274,500 284,744 10,244 Fines and Forfeitures Vehicle code fines 35,000 35,000 31,729 (3,271) Municipal court fines 40,000 40,000 16,331 (23,669) VICR fees 75,000 75,000 97,512 22,512 Total Fines and Forfeitures 150,000 150,000 145,572 (4,428) Miscellaneous Code compliance 50,000 50,000 207,305 157,305 Certificate of compliance fee 500 500 525 25 Nuisance abatement tax 20,000 20,000 3,510 (16,490) Abandoned vehicle abatement 38,000 38,000 45,177 7,177 Other revenue 93,000 703,000 735,436 32,436 Total Miscellaneous 201,500 811,500 991,953 180,453 Transfers in 2,526,010 3,516,010 3,515,966 (44) Amounts Available for Appropriations 141,521,888 157,138,388 157,366,311 227,923 See Notes to Required Supplementary Information 102Page 259 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Charges to Appropriation (Outflow): General Government City Council 288,724 288,724 220,070 68,654 City Clerk 811,585 789,585 716,255 73,330 Legislative Advocacy 38,500 38,500 36,090 2,410 Elections 97,000 97,000 57,293 39,707 City Attorney 286,867 286,867 269,376 17,491 Legal Special Services 294,000 1,235,000 1,233,099 1,901 City Manager 1,024,850 988,944 945,014 43,930 Finance 2,011,845 1,935,845 1,908,513 27,332 Independent Audit 90,000 50,000 44,867 5,133 Human Resources 845,795 1,074,295 964,005 110,290 General Services 4,716,485 4,466,485 4,458,627 7,858 Information Technology 1,295,235 1,420,235 1,416,469 3,766 Unemployment Insurance 10,000 25,000 23,440 1,560 Insurance 900,500 710,500 697,444 13,056 Retiree Funding - 936,802 936,802 - Contributions to other Agencies 602,000 582,000 533,539 48,461 Community Promotions 1,050,000 440,000 420,424 19,576 Marketing 1,048,640 1,178,919 999,367 179,552 Visitors Information Center 206,690 149,690 125,389 24,301 Economic Development Center 940,100 992,100 972,703 19,397 Planning & Community Development 2,669,299 2,465,214 2,343,271 121,943 Total General Government 19,228,115 20,151,705 19,322,057 829,648 Public Safety Police Services 19,510,810 18,590,810 18,563,046 27,764 Animal Regulation 341,000 241,000 232,993 8,007 Traffic Safety 382,850 450,850 333,166 117,684 Building and Safety 1,468,010 1,468,010 1,461,477 6,533 Community Safety 429,000 221,570 197,546 24,024 Total Public Safety 22,131,670 20,972,240 20,788,228 184,012 Parks, Recreation and Culture Civic Center Park 1,318,900 1,318,900 1,278,209 40,691 Park Maintenance 1,091,200 941,200 925,541 15,659 Landscaping Service 1,961,178 1,781,178 1,776,974 4,204 Total Parks, Recreation and Culture 4,371,278 4,041,278 3,980,724 60,554 Public Works Administration 2,427,950 2,007,950 1,886,402 121,548 Street Maintenance 2,240,550 2,320,550 2,317,468 3,082 Curb & Gutter 25,000 - - - Parking Lot 50,000 - - - Corporate Yard 122,500 122,500 115,773 6,727 Auto Fleet / Equipment 250,000 250,000 218,381 31,619 Public Bldg - Opr/Maint.723,955 665,955 651,362 14,593 Portola Community Center 151,400 151,400 115,523 35,877 Storm Water Permit 55,000 65,000 64,632 368 Total Public Works 6,046,355 5,583,355 5,369,541 213,814 Capital outlay - 21,000 20,544 456 Transfers out 7,011,508 7,474,706 7,471,753 2,953 Total Charges to Appropriations 58,788,926 58,244,284 56,952,847 1,291,437 Budgetary Fund Balance, June 30 82,732,962$98,894,104$100,413,464$1,519,360$ See Notes to Required Supplementary Information 103Page 260 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE MEASURE A YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 20,463,902$20,463,902$20,463,902$-$ Resources (Inflows): Taxes 2,391,000 2,391,000 3,505,628 1,114,628 Intergovernmental 3,722,000 3,722,000 2,924,394 (797,606) Investment earnings 87,000 87,000 47,100 (39,900) Amounts Available for Appropriations 26,663,902 26,663,902 26,941,024 277,122 Charges to Appropriation (Outflow): Public works 12,740,000 1,435,000 4,633,581 (3,198,581) Capital outlay 700,000 35,358,674 152,658 35,206,016 Total Charges to Appropriations 13,440,000 36,793,674 4,786,239 32,007,435 Budgetary Fund Balance, June 30 13,223,902$(10,129,772)$22,154,785$32,284,557$ See Notes to Required Supplementary Information 104Page 261 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PROP A FIRE TAX YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 4,418,202$4,418,202$4,418,202$-$ Resources (Inflows): Taxes 6,305,384 6,305,384 7,889,982 1,584,598 Assessments 2,250,000 2,250,000 2,140,682 (109,318) Intergovernmental 1,050,000 1,050,000 1,101,349 51,349 Charges for services 2,275,000 2,275,000 2,571,832 296,832 Investment earnings 6,000 6,000 35,596 29,596 Miscellaneous 28,000 28,000 24,845 (3,155) Transfers in 3,800,000 3,800,000 3,800,000 - Amounts Available for Appropriations 20,132,586 20,132,586 21,982,488 1,849,902 Charges to Appropriation (Outflow): Public safety 15,235,328 14,322,500 13,169,943 1,152,557 Capital outlay 480,172 480,172 265,706 214,466 Total Charges to Appropriations 15,715,500 14,802,672 13,435,649 1,367,023 Budgetary Fund Balance, June 30 4,417,086$5,329,914$8,546,839$3,216,925$ See Notes to Required Supplementary Information 105Page 262 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE HOUSING ASSET FUND YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 48,566,282$48,566,282$48,566,282$-$ Resources (Inflows): Investment earnings 121,000 121,000 218,227 97,227 Miscellaneous -- 39,467 39,467 Amounts Available for Appropriations 48,687,282 48,687,282 48,823,976 136,694 Charges to Appropriation (Outflow): Housing and redevelopment 492,510 492,510 205,100 287,410 Total Charges to Appropriations 492,510 492,510 205,100 287,410 Budgetary Fund Balance, June 30 48,194,772$48,194,772$48,618,876$424,104$ See Notes to Required Supplementary Information 106Page 263 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE HOUSING AUTHORITY YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 20,427,620$20,427,620$20,427,620$-$ Resources (Inflows): Rental income 6,890,520 6,890,520 7,192,074 301,554 Investment earnings 87,500 87,500 35,886 (51,614) Miscellaneous -- 316,914 316,914 Amounts Available for Appropriations 27,405,640 27,405,640 27,972,494 566,854 Charges to Appropriation (Outflow): Housing and redevelopment 9,282,123 9,282,123 8,384,337 897,786 Transfers out 319,100 319,100 243,032 76,068 Total Charges to Appropriations 9,601,223 9,601,223 8,627,369 973,854 Budgetary Fund Balance, June 30 17,804,417$17,804,417$19,345,125$1,540,708$ See Notes to Required Supplementary Information 107Page 264 CITY OF PALM DESERT NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2021 BUDGETS AND BUDGETARY ACCOUNTING The City used the following procedures in establishing the budgetary data reported in the financial statements: 1. Before the beginning of the fiscal year, the City Manager submits to the City Council a proposed budget for the year commencing the following July 1. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is subsequently adopted through passage of a resolution. 4. Expenditures for the General Fund cannot exceed amounts budgeted at the departmental level, which is the legal level of control. For other funds, expenditures cannot exceed the total amount budgeted for each fund, which is the legal level of control. The City Manager is authorized to transfer appropriations (without council approval) between an object of a General Fund Department and authority to adjust intra-and outer departmental budgeted line items, as well as inter-fund transfers, provided such adjustments do not exceed the total approved budget. The City Council approves all other changes. Annual appropriation amounts lapse at year-end. 5. Encumbrances and continuing appropriations are rebudgeted as of July 1, by Council action. 6. Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds except for certain special revenue funds and capital projects funds, which adopt project length budgets and debt service funds that are not budgeted as effective budgetary control is achieved through debt indenture provisions. The following funds did not have legally adopted budgets during the current fiscal year: Other Governmental Funds Library Assessment District No. 94-3 Merano Silver Spur Ranch Highlands Undergrounding CFD University Special Assessment Assessment 29 108Page 265 OTHER GOVERNMENTAL FUNDS COMBINING STATEMENTS 109Page 266 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments 25,815,476$ 28,462,231$ 77,431$ 54,355,138$ Receivables: Accounts 824,448 3,750 -828,198 Assessments -- 1,188,117 1,188,117 Loans 1,768,905 -- 1,768,905 Interest 229,082 1,235,740 - 1,464,822 Allowance for interest on Successor Agency (164,808) (1,200,781)-(1,365,589) Prepaid costs 2,290 16,137 -18,427 Deposits - 20,000 - 20,000 Due from other governments 2,844,523 - 2,059 2,846,582 Due from other funds - 500,000 -500,000 Inventories 5,790 --5,790 Restricted assets: Cash and investments with fiscal agents - 1,917,366 - 1,917,366 Advances to Successor Agency 654,000 4,765,000 - 5,419,000 Allowance for Advances to Successor Agency (654,000) (4,765,000)-(5,419,000) TOTAL ASSETS 31,325,706$ 30,954,443$ 1,267,607$ 63,547,756$ Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable 1,895,529$ 123,668$ 229$ 2,019,426$ Accrued liabilities 4,588 --4,588 Unearned revenues 232,668 63,041 -295,709 Deposits payable 3,780 --3,780 Due to other funds 1,492,656 -- 1,492,656 TOTAL LIABILITIES 3,629,221 186,709 229 3,816,159 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues 64,274 34,959 1,188,117 1,287,350 Total Deferred Inflows of Resources 64,274 34,959 1,188,117 1,287,350 FUND BALANCES: Nonspendable: Prepaid costs 2,290 16,137 -18,427 Restricted for: Public safety 2,176,369 -- 2,176,369 Capital Projects - 2,116,419 - 2,116,419 Debt service -- 79,261 79,261 Street related purposes 6,014,051 -- 6,014,051 Low income housing 3,575,892 -- 3,575,892 Public facilities 4,226,957 -- 4,226,957 Special programs 7,199,761 1,140,484 - 8,340,245 Committed to: Aquatic center 2,239,645 -- 2,239,645 Energy loan program 2,197,246 -- 2,197,246 Assigned to: Capital projects - 10,627,053 - 10,627,053 Property acquisition - 420,387 -420,387 Public facilities - 13,577,940 - 13,577,940 Special programs - 673,861 -673,861 Street related purposes - 2,160,494 -2,160,494 TOTAL FUND BALANCES 27,632,211 30,732,775 79,261 58,444,247 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 31,325,706$ 30,954,443$ 1,267,607$ 63,547,756$ Total Other Governmental Funds Debt Service Fund Capital Projects Funds Special Revenue Funds 110Page 267 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Taxes 4,088,937$ -$ -$ 4,088,937$ Special assessments collected 1,106,780 - 134,195 1,240,975 Licenses and permits - 239,079 - 239,079 Intergovernmental revenues 9,148,052 32,217 -9,180,269 Charges for services 756,247 --756,247 Investment earnings 285,701 370,722 252 656,675 Rental income - 61,432 -61,432 Fines and forfeitures 2,099 --2,099 Miscellaneous 11,018 2,392,641 - 2,403,659 TOTAL REVENUES 15,398,834 3,096,091 134,447 18,629,372 EXPENDITURES: Current: General government 1,241,664 2,899,029 13,293 4,153,986 Public safety 48,045 28,886 -76,931 Parks, recreation and culture 1,238,999 853,292 - 2,092,291 Public works 2,848,140 -- 2,848,140 Housing and redevelopment 250,122 -- 250,122 Capital outlay 5,835,008 449,002 - 6,284,010 Debt service: Principal retirement 126,000 - 48,000 174,000 Interest and fiscal charges 125,320 - 59,209 184,529 TOTAL EXPENDITURES 11,713,298 4,230,209 120,502 16,064,009 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 3,685,536 (1,134,118) 13,945 2,565,363 OTHER FINANCING SOURCES (USES) Transfers in 1,400,375 1,470,000 - 2,870,375 Transfers out (3,394,756) (121,210)- (3,515,966) TOTAL OTHER FINANCING SOURCES (USES)(1,994,381) 1,348,790 - (645,591) NET CHANGE IN FUND BALANCES 1,691,155 214,672 13,945 1,919,772 FUND BALANCES - BEGINNING OF YEAR 25,941,056 30,518,103 65,316 56,524,475 FUND BALANCES - END OF YEAR 27,632,211$30,732,775$79,261$ 58,444,247$ Debt Service Fund Total Other Governmental Funds Special Revenue Funds Capital Projects Funds 111Page 268 This page intentionally left blank 112Page 269 OTHER GOVERNMENTAL FUNDS - SPECIAL REVENUE Special Revenue Funds are used to account for proceeds of specific revenue sources other than expendable trust that are legally restricted to expenditures for specific purposes. Traffic Safety Fund - Traffic and court fines are collected in these funds. A transfer from this Fund to the General Fund is made at the end of the fiscal year by council action to be applied toward the eligible expenditures permitted by law. Gas Tax Fund - Portions of the tax rate per gallon levied by the State of California on all gasoline purchases are allocated to cities throughout the State. These funds are restricted to expenditure for transit and street- related purposes. Housing Mitigation Fee Fund - This fund is used to account for fees collected from construction of commercial and office buildings for low and moderate income mitigation purposes to be used strictly for projects and programs that benefit the low and moderate income households. Community Development Block Grant Fund - This fund is used to account for the receipts and expenditures of CDBG funds received from the U.S. Department of Housing and Urban Development. Child Care Program Fund –This fund is used to collect funds from developers for the purpose of providing child care programs. Public Safety Police Grants Fund - This fund is used to account for grants received from the U.S. Department of Justice under the Local Law Enforcement Block Grant Program for the purpose of purchasing equipment related to public safety. New Construction Tax Fund - This fund is used to account for tax collected upon application to the City for a building permit from every person/entity for the construction of any new building, addition or trailer space in the city according to a fee schedule. Its use is restricted for the acquisition and development of public facilities such as parks, playgrounds and public structures. Planned Drainage Fund - This fund is used to account for off-site drainage fees based on an established fee schedule collected prior to approval of the final map in the case of land being subdivided or prior to the issuance of a building permit in the case of construction or improvement of subdivided land. Parks and Recreational Facilities Fund - This fund is used to account for fees collected for residential and subdivision developments collected either at the time grading permits are paid or prior to the approval of the final map. Its use is restricted for expenditures related to park development, maintenance and equipment. Traffic Signals Fund - This fund is used to account for fees collected for residential, commercial and industrial developments either at the time grading permits are paid or prior to the approval of the final map. Its use is restricted for expenditures related to the acquisition and maintenance of traffic signals. Fire Facilities Restoration Fund –This fund is used to collect funds from developers for the purpose of construction, restoration and purchase of equipment for fire stations within the City. Recycling Fund - This fund is used to account for resources resulting from lower landfill tipping fees which have been reduced to zero in 2013, and State grant funds. Funds will be utilized for purposes of promoting recycling and recycling related activities. 113Page 270 OTHER GOVERNMENTAL FUNDS - SPECIAL REVENUE (CONTINUED) Energy Independence Loan Fund –This fund is used to provide funding for the AB811 Energy Loans and collect assessments from those AB811 loans through property tax collections. The assessments collected will be used to service debt issued and to provide additional funding for the AB811 loans. Air Quality Management Fund –This fund accounts for receipts from South Coast Air Quality Management District, sixty percent of which is disbursed to the Coachella Valley Association of Governments. Aquatic Center Fund – This fund is used to account for revenues and expenditures for the City’s aquatic facility. Cannabis Compliance Fund – This fund is used to account for revenues and expenditures for the City’s cannabis compliance activity. El Paseo Assessment District Fund –This fund is used to collect assessments on all business establishments located within the boundaries set for the El Paseo Parking and business improvement area based on a fee schedule established for the various types of businesses. Proceeds from all charges are used for the promotion of business activities in the area. Various Landscape and Lighting District Funds –These funds are used to account for expenditures and receipts of property taxes and service fees levied to the property owners in the various landscaping and lighting districts, which were formed to provide landscaping and street lighting maintenance. Individual landscaping and lighting funds are set up for Districts No 1 through 17. Affordable Housing Fund –This fund is used to account for the management and operation of the affordable housing portfolio. 114Page 271 This page intentionally left blank 115Page 272 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments -$ 4,709,040$ 3,577,390$ 52,777$ Receivables: Accounts ---- Loans ---- Interest ---- Allowance for interest on Successor Agency ---- Prepaid costs ---- Due from other governments 191 233,021 -407,093 Inventories ---- Advances to Successor Agency ---- Allowance for Advances to Successor Agency ---- TOTAL ASSETS 191$ 4,942,061$ 3,577,390$ 459,870$ Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable -$ 72,366$ 1,498$ 403,511$ Accrued liabilities ---- Unearned revenues ---- Deposits payable ---- Due to other funds ---- TOTAL LIABILITIES -72,366 1,498 403,511 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues ---- Total Deferred Inflows of Resources ---- FUND BALANCES: Nonspendable: Prepaid costs ---- Restricted for: Public safety ---- Street related purposes 191 4,869,695 -- Low income housing -- 3,575,892 - Public facilities ---- Special programs ---56,359 Committed to: Aquatic center ---- Energy loan program ---- TOTAL FUND BALANCES 191 4,869,695 3,575,892 56,359 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 191$ 4,942,061$ 3,577,390$ 459,870$ Traffic Safety Gas Tax Housing Mitigation Fee Community Development Block Grant 116Page 273 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Loans Interest Allowance for interest on Successor Agency Prepaid costs Due from other governments Inventories Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues Total Deferred Inflows of Resources FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Public safety Street related purposes Low income housing Public facilities Special programs Committed to: Aquatic center Energy loan program TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (CONTINUED) 1,549,239$ 207,775$ 11,749$ 758,252$ ---- ---- --164,808 - -- (164,808)- ---- -- 2,149,413 - ---- --654,000 - -- (654,000)- 1,549,239$ 207,775$ 2,161,162$ 758,252$ -$ 8,066$ 983,853$ 50,578$ ---- -184,959 -- ---- --98,656 - -193,025 1,082,509 50,578 ---- ---- ---- -14,750 -- ---707,674 ---- 1,549,239 - 1,078,653 - ---- ---- ---- 1,549,239 14,750 1,078,653 707,674 1,549,239$ 207,775$ 2,161,162$ 758,252$ Public Safety Police Grants New Construction Tax Planned Drainage Child Care Program 117Page 274 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Loans Interest Allowance for interest on Successor Agency Prepaid costs Due from other governments Inventories Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues Total Deferred Inflows of Resources FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Public safety Street related purposes Low income housing Public facilities Special programs Committed to: Aquatic center Energy loan program TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 1,604,983$ 436,491$ 1,261,388$ 2,858,628$ ---59,074 ---- ---- ---- ---300 ---- ---- ---- ---- 1,604,983$ 436,491$ 1,261,388$ 2,918,002$ 5,918$ -$ -$ 44,841$ ---- ---13,428 ---- ---- 5,918 --58,269 ---- ---- ---300 -- 1,261,388 - -436,491 -- ---- 1,599,065 --- --- 2,859,433 ---- ---- 1,599,065 436,491 1,261,388 2,859,733 1,604,983$ 436,491$ 1,261,388$ 2,918,002$ Fire Facilities Restoration Recycling Parks and Recreational Facilities Traffic Signals 118Page 275 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Loans Interest Allowance for interest on Successor Agency Prepaid costs Due from other governments Inventories Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues Total Deferred Inflows of Resources FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Public safety Street related purposes Low income housing Public facilities Special programs Committed to: Aquatic center Energy loan program TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (CONTINUED) 1,820,958$ 41,508$ 2,122,098$ 484,959$ --342,240 419,052 1,768,905 --- 64,274 --- ---- --1,952 - 5,626 17,593 -- --5,790 - ---- ---- 3,659,763$ 59,101$ 2,472,080$ 904,011$ 4,243$ 32,001$ 200,265$ -$ ---- --30,218 - ---3,780 1,394,000 --- 1,398,243 32,001 230,483 3,780 64,274 --- 64,274 --- --1,952 - ---900,231 ---- ---- ---- -27,100 -- -- 2,239,645 - 2,197,246 --- 2,197,246 27,100 2,241,597 900,231 3,659,763$ 59,101$ 2,472,080$ 904,011$ Energy Independence Loan Air Quality Management Aquatic Center Cannabis Compliance 119Page 276 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER SPECIAL REVENUE FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Loans Interest Allowance for interest on Successor Agency Prepaid costs Due from other governments Inventories Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS Liabilities, Deferred Inflows of Resources, and Fund Balances: LIABILITIES: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues Total Deferred Inflows of Resources FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Public safety Street related purposes Low income housing Public facilities Special programs Committed to: Aquatic center Energy loan program TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 111,359$ 4,202,294$ 4,588$ 25,815,476$ 4,082 --824,448 ---1,768,905 ---229,082 ---(164,808) 38 --2,290 -31,586 -2,844,523 ---5,790 ---654,000 ---(654,000) 115,479$ 4,233,880$ 4,588$ 31,325,706$ 49,236$ 39,153$ -$ 1,895,529$ --4,588 4,588 4,063 --232,668 ---3,780 ---1,492,656 53,299 39,153 4,588 3,629,221 ---64,274 ---64,274 38 --2,290 ---2,176,369 ---6,014,051 ---3,575,892 ---4,226,957 62,142 4,194,727 -7,199,761 ---2,239,645 ---2,197,246 62,180 4,194,727 -27,632,211 115,479$ 4,233,880$ 4,588$ 31,325,706$ Total Other Special Revenue Funds El Paseo Assessment District Landscape and Lighting Districts Nos. 1 - 17 Affordable Housing Fund 120Page 277 This page intentionally left blank 121Page 278 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Taxes -$ -$ 85,098$ -$ Special assessments collected ---- Intergovernmental revenues - 3,064,894 - 738,033 Charges for services ---- Investment earnings -22,164 8,224 249 Fines and forfeitures 2,099 --- Miscellaneous ---10,997 TOTAL REVENUES 2,099 3,087,058 93,322 749,279 EXPENDITURES: Current: General government --- 738,033 Public safety ---- Parks, recreation and culture ---- Public works - 2,066,179 -- Housing and redevelopment --7,090 - Capital outlay ---- Debt service: Principal retirement ---- Interest and fiscal charges ---- TOTAL EXPENDITURES - 2,066,179 7,090 738,033 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 2,099 1,020,879 86,232 11,246 OTHER FINANCING SOURCES (USES) Transfers in ---- Transfers out (2,087)--- TOTAL OTHER FINANCING SOURCES (USES) (2,087) - -- NET CHANGE IN FUND BALANCES 12 1,020,879 86,232 11,246 FUND BALANCES - BEGINNING OF YEAR 179 3,848,816 3,489,660 45,113 FUND BALANCES - END OF YEAR 191$ 4,869,695$ 3,575,892$ 56,359$ Traffic Safety Gas Tax Housing Mitigation Fee Community Development Block Grant 122Page 279 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANC OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR (CONTINUED) 66,213$ -$ 121,564$ 61,455$ -- - - - 134,814 5,141,123 - -- - - 3,742 1,451 5,445 1,683 -- - - -- - - 69,955 136,265 5,268,132 63,138 -- - - -47,599 - - -- - - -- - - -- - - -87,215 5,719,745 19,474 -- - - -- -- - 134,814 5,719,745 19,474 69,955 1,451 (451,613)43,664 -- - - -- -- -- -- 69,955 1,451 (451,613)43,664 1,479,284 13,299 1,530,266 664,010 1,549,239$ 14,750$ 1,078,653$ 707,674$ Child Care Program Public Safety Police Grants New Construction Tax Planned Drainage 123Page 280 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANC OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR 10,443$ 18,467$ 45,624$ -$ -- - - -- - - ---442,264 3,424 972 2,977 6,318 -- - - -- -21 13,867 19,439 48,601 448,603 ---231,233 -- - - -- - - ---8,308 -- - - 3,249 --- -- - - -- -- 3,249 --239,541 10,618 19,439 48,601 209,062 -- - - -- -- -- -- 10,618 19,439 48,601 209,062 1,588,447 417,052 1,212,787 2,650,671 1,599,065$ 436,491$ 1,261,388$ 2,859,733$ Parks and Recreational Facilities Traffic Signals Fire Facilities Restoration Recycling 124Page 281 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANC OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR (CONTINUED) -$ -$ -$ 3,680,073$ ---- -69,188 -- -- 313,983 - 188,026 54 11,502 - ---- ---- 188,026 69,242 325,485 3,680,073 4,909 67,167 -- ---446 -- 1,238,999 - ---- ---- --5,325- 126,000 --- 125,320 --- 256,229 67,167 1,244,324 446 (68,203)2,075 (918,839)3,679,627 -- 1,026,000 - ---(3,392,669) -- 1,026,000 (3,392,669) (68,203)2,075 107,161 286,958 2,265,449 25,025 2,134,436 613,273 2,197,246$ 27,100$ 2,241,597$ 900,231$ Energy Independence Loan Air Quality Management Aquatic Center Cannabis Compliance 125Page 282 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANC OTHER SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Taxes Special assessments collected Intergovernmental revenues Charges for services Investment earnings Fines and forfeitures Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Public works Housing and redevelopment Capital outlay Debt service: Principal retirement Interest and fiscal charges TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR -$ -$ -$ 4,088,937$ 215,816 890,964 -1,106,780 ---9,148,052 ---756,247 936 28,534 -285,701 -- -2,099 ---11,018 216,752 919,498 -15,398,834 200,322 --1,241,664 ---48,045 ---1,238,999 - 773,653 -2,848,140 --243,032 250,122 ---5,835,008 ---126,000 -- -125,320 200,322 773,653 243,032 11,713,298 16,430 145,845 (243,032)3,685,536 - 131,343 243,032 1,400,375 -- -(3,394,756) - 131,343 243,032 (1,994,381) 16,430 277,188 -1,691,155 45,750 3,917,539 -25,941,056 62,180$ 4,194,727$ -$ 27,632,211$ El Paseo Assessment District Landscape and Lighting Districts Nos. 1 - 17 Affordable Housing Fund Total Other Special Revenue Funds 126Page 283 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE TRAFFIC SAFETY YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 179$ 179$ 179$ -$ Resources (Inflows): Investment earnings 10 10 -(10) Fines and forfeitures 6,000 6,000 2,099 (3,901) Amounts Available for Appropriations 6,189 6,189 2,278 (3,911) Charges to Appropriation (Outflow): Transfers out 6,010 6,010 2,087 3,923 Total Charges to Appropriations 6,010 6,010 2,087 3,923 Budgetary Fund Balance, June 30 179$ 179$ 191$ 12$ 127Page 284 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE GAS TAX YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 3,848,816$3,848,816$3,848,816$-$ Resources (Inflows): Intergovernmental 2,358,200 2,358,200 3,064,894 706,694 Investment earnings 8,000 8,000 22,164 14,164 Amounts Available for Appropriations 6,215,016 6,215,016 6,935,874 720,858 Charges to Appropriation (Outflow): Public works 2,200,000 4,613,256 2,066,179 2,547,077 Total Charges to Appropriations 2,200,000 4,613,256 2,066,179 2,547,077 Budgetary Fund Balance, June 30 4,015,016$1,601,760$4,869,695$3,267,935$ 128Page 285 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE HOUSING MITIGATION FEE YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 3,489,660$3,489,660$3,489,660$-$ Resources (Inflows): Taxes 109,000 109,000 85,098 (23,902) Investment earnings 17,000 17,000 8,224 (8,776) Amounts Available for Appropriations 3,615,660 3,615,660 3,582,982 (32,678) Charges to Appropriation (Outflow): Housing and redevelopment 310,000 310,000 7,090 302,910 Total Charges to Appropriations 310,000 310,000 7,090 302,910 Budgetary Fund Balance, June 30 3,305,660$3,305,660$3,575,892$270,232$ 129Page 286 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE COMMUNITY DEVELOPMENT BLOCK GRANT YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 45,113$ 45,113$ 45,113$ -$ Resources (Inflows): Intergovernmental 851,067 851,067 738,033 (113,034) Investment earnings --249 249 Miscellaneous -- 10,997 10,997 Amounts Available for Appropriations 896,180 896,180 794,392 (101,788) Charges to Appropriation (Outflow): General government 851,067 851,067 738,033 113,034 Total Charges to Appropriations 851,067 851,067 738,033 113,034 Budgetary Fund Balance, June 30 45,113$ 45,113$ 56,359$ 11,246$ 130Page 287 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CHILD CARE PROGRAM YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,479,284$1,479,284$1,479,284$-$ Resources (Inflows): Taxes 109,000 109,000 66,213 (42,787) Investment earnings 9,000 9,000 3,742 (5,258) Amounts Available for Appropriations 1,597,284 1,597,284 1,549,239 (48,045) Charges to Appropriation (Outflow): Capital outlay 54,000 1,584,000 - 1,584,000 Total Charges to Appropriations 54,000 1,584,000 - 1,584,000 Budgetary Fund Balance, June 30 1,543,284$13,284$ 1,549,239$1,535,955$ 131Page 288 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY POLICE GRANTS YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 13,299$ 13,299$ 13,299$ -$ Resources (Inflows): Intergovernmental 160,000 160,000 134,814 (25,186) Investment earnings 300 300 1,451 1,151 Amounts Available for Appropriations 173,599 173,599 149,564 (24,035) Charges to Appropriation (Outflow): Public safety 40,000 57,215 47,599 9,616 Capital outlay 88,000 88,000 87,215 785 Total Charges to Appropriations 128,000 145,215 134,814 10,401 Budgetary Fund Balance, June 30 45,599$ 28,384$ 14,750$ (13,634)$ 132Page 289 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE NEW CONSTRUCTION TAX YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,530,266$1,530,266$1,530,266$-$ Resources (Inflows): Taxes 220,000 220,000 121,564 (98,436) Intergovernmental 8,100,776 8,100,776 5,141,123 (2,959,653) Investment earnings 6,000 6,000 5,445 (555) Amounts Available for Appropriations 9,857,042 9,857,042 6,798,398 (3,058,644) Charges to Appropriation (Outflow): Capital outlay 8,100,776 10,032,294 5,719,745 4,312,549 Total Charges to Appropriations 8,100,776 10,032,294 5,719,745 4,312,549 Budgetary Fund Balance, June 30 1,756,266$(175,252)$1,078,653$1,253,905$ 133Page 290 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PLANNED DRAINAGE YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 664,010$664,010$ 664,010$-$ Resources (Inflows): Taxes 10,000 10,000 61,455 51,455 Investment earnings 6,000 6,000 1,683 (4,317) Amounts Available for Appropriations 680,010 680,010 727,148 47,138 Charges to Appropriation (Outflow): Capital outlay - 598,575 19,474 579,101 Total Charges to Appropriations - 598,575 19,474 579,101 Budgetary Fund Balance, June 30 680,010$81,435$ 707,674$626,239$ 134Page 291 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATIONAL FACILITIES YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,588,447$1,588,447$1,588,447$-$ Resources (Inflows): Taxes 25,000 25,000 10,443 (14,557) Investment earnings 6,000 6,000 3,424 (2,576) Amounts Available for Appropriations 1,619,447 1,619,447 1,602,314 (17,133) Charges to Appropriation (Outflow): Capital outlay 1,150,000 1,306,582 3,249 1,303,333 Total Charges to Appropriations 1,150,000 1,306,582 3,249 1,303,333 Budgetary Fund Balance, June 30 469,447$312,865$ 1,599,065$1,286,200$ 135Page 292 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE TRAFFIC SIGNALS YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 417,052$417,052$ 417,052$-$ Resources (Inflows): Taxes 10,000 10,000 18,467 8,467 Investment earnings 1,000 1,000 972 (28) Amounts Available for Appropriations 428,052 428,052 436,491 8,439 Charges to Appropriation (Outflow): Capital outlay 75,000 157,055 - 157,055 Total Charges to Appropriations 75,000 157,055 - 157,055 Budgetary Fund Balance, June 30 353,052$270,997$ 436,491$165,494$ 136Page 293 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE FIRE FACILITIES RESTORATION YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,212,787$1,212,787$1,212,787$-$ Resources (Inflows): Taxes 6,000 6,000 45,624 39,624 Investment earnings 7,000 7,000 2,977 (4,023) Amounts Available for Appropriations 1,225,787 1,225,787 1,261,388 35,601 Charges to Appropriation (Outflow): Capital outlay 72,000 1,223,471 - 1,223,471 Total Charges to Appropriations 72,000 1,223,471 - 1,223,471 Budgetary Fund Balance, June 30 1,153,787$2,316$ 1,261,388$1,259,072$ 137Page 294 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE RECYCLING YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,650,671$2,650,671$2,650,671$-$ Resources (Inflows): Charges for services 275,000 275,000 442,264 167,264 Investment earnings 10,000 10,000 6,318 (3,682) Miscellaneous --21 21 Amounts Available for Appropriations 2,935,671 2,935,671 3,099,274 163,603 Charges to Appropriation (Outflow): General government 323,500 598,141 231,233 366,908 Public works - 36,000 8,308 27,692 Total Charges to Appropriations 323,500 634,141 239,541 394,600 Budgetary Fund Balance, June 30 2,612,171$2,301,530$2,859,733$558,203$ 138Page 295 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE ENERGY INDEPENDENCE LOAN YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,265,449$2,265,449$2,265,449$-$ Resources (Inflows): Investment earnings 357,000 357,000 188,026 (168,974) Amounts Available for Appropriations 2,622,449 2,622,449 2,453,475 (168,974) Charges to Appropriation (Outflow): General government 15,000 15,000 4,909 10,091 Debt service: Principal retirement 178,000 178,000 126,000 52,000 Interest and fiscal charges 131,870 131,870 125,320 6,550 Total Charges to Appropriations 324,870 324,870 256,229 68,641 Budgetary Fund Balance, June 30 2,297,579$2,297,579$2,197,246$(100,333)$ 139Page 296 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE AIR QUALITY MANAGEMENT YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 25,025$ 25,025$ 25,025$ -$ Resources (Inflows): Intergovernmental 64,000 64,000 69,188 5,188 Investment earnings 50 50 54 4 Amounts Available for Appropriations 89,075 89,075 94,267 5,192 Charges to Appropriation (Outflow): General government 50,500 70,500 67,167 3,333 Total Charges to Appropriations 50,500 70,500 67,167 3,333 Budgetary Fund Balance, June 30 38,575$ 18,575$ 27,100$ 8,525$ 140Page 297 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE AQUATIC CENTER YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,134,436$2,134,436$2,134,436$-$ Resources (Inflows): Charges for services 877,500 877,500 313,983 (563,517) Investment earnings 3,000 3,000 11,502 8,502 Transfers in 1,026,000 1,026,000 1,026,000 - Amounts Available for Appropriations 4,040,936 4,040,936 3,485,921 (555,015) Charges to Appropriation (Outflow): Parks, recreation and culture 1,668,500 1,668,500 1,238,999 429,501 Capital outlay 250,000 250,000 5,325 244,675 Total Charges to Appropriations 1,918,500 1,918,500 1,244,324 674,176 Budgetary Fund Balance, June 30 2,122,436$2,122,436$2,241,597$119,161$ 141Page 298 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CANNABIS COMPLIANCE YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 613,273$613,273$ 613,273$-$ Resources (Inflows): Taxes 2,000,000 2,000,000 3,680,073 1,680,073 Investment earnings 200 200 -(200) Amounts Available for Appropriations 2,613,473 2,613,473 4,293,346 1,679,873 Charges to Appropriation (Outflow): Public safety 50,000 50,000 446 49,554 Transfers out 2,000,000 3,345,000 3,392,669 (47,669) Total Charges to Appropriations 2,050,000 3,395,000 3,393,115 1,885 Budgetary Fund Balance, June 30 563,473$(781,527)$900,231$1,681,758$ 142Page 299 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE EL PASEO ASSESSMENT DISTRICT YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 45,750$ 45,750$ 45,750$ -$ Resources (Inflows): Assessments 250,000 250,000 215,816 (34,184) Investment earnings --936 936 Amounts Available for Appropriations 295,750 295,750 262,502 (33,248) Charges to Appropriation (Outflow): General government 250,000 250,000 200,322 49,678 Total Charges to Appropriations 250,000 250,000 200,322 49,678 Budgetary Fund Balance, June 30 45,750$ 45,750$ 62,180$ 16,430$ 143Page 300 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE LANDSCAPE AND LIGHTING DISTRICTS NOS 1 -17 YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 3,917,539$3,917,539$3,917,539$-$ Resources (Inflows): Assessments 876,937 876,937 890,964 14,027 Investment earnings 7,000 7,000 28,534 21,534 Transfers in 100,000 100,000 131,343 31,343 Amounts Available for Appropriations 4,901,476 4,901,476 4,968,380 66,904 Charges to Appropriation (Outflow): Public works 1,003,987 1,007,487 773,653 233,834 Total Charges to Appropriations 1,003,987 1,007,487 773,653 233,834 Budgetary Fund Balance, June 30 3,897,489$3,893,989$4,194,727$300,738$ 144Page 301 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE AFFORDABLE HOUSING FUND YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows): Transfers in 319,100 319,100 243,032 (76,068) Amounts Available for Appropriations 319,100 319,100 243,032 (76,068) Charges to Appropriation (Outflow): Housing and redevelopment 273,100 273,100 243,032 30,068 Capital outlay 1,000 1,000 -1,000 Transfers out 45,000 45,000 - 45,000 Total Charges to Appropriations 319,100 319,100 243,032 76,068 Budgetary Fund Balance, June 30 -$ -$ -$ -$ 145Page 302 This page intentionally left blank 146Page 303 OTHER GOVERNMENTAL FUNDS - CAPITAL PROJECTS Capital Projects Funds are used to account for the acquisition and construction of major capital facilities, except for those financed by certain Special Revenue and Enterprise funds. Capital Projects Reserve - This fund is used to account for resources and expenditures for capital improvement projects that are related to the acquisition and development of public facilities, infrastructure and equipment. Drainage Facilities Fund - This fund is used to account for resources and expenditures for planned capital improvement projects that are under the Master Drainage Plan. Economic Development - This fund is used to account for façade enhancement projects for Palm Desert businesses utilizing funds from the sales of certain City-owned properties. Parks and Recreational Facilities Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to park development, maintenance and equipment. Art in Public Places Fund - This fund is used to account for fees collected from residential, commercial and public facilities development except for street and drainage projects. Its use is restricted for acquisition, installation, improvement and maintenance of artwork to be displayed in the City, the administration of the program and community public art education programs. Signalization Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to the acquisition and maintenance of traffic signals. Capital Golf Fund - This fund is used to offset the cost of capital improvements, equipment purchases, perimeter maintenance, pay off assessments and other nonrecurring costs that will arise as a result of Desert Willow Golf Course Resort. Funding sources for the Golf Course Maintenance Fund are collections from the IROC and Standard Vacation Ownership, Inc. time-share project. Buildings Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to the improvement and maintenance of public facilities and structures. Library Fund - This fund is used to account for resources and expenditures for capital improvement projects that are related to the purchase of library resources for the Multi-Agency Library. Special Assessment District Funds - This fund is used to account for the construction of public improvements from proceeds resulting from the creation of various assessment Districts. Assessment District No. 94-3 Merano Silver Spur Ranch Highlands Undergrounding CFD University Special Assessment Assessment 29 147Page 304 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments 11,168,172$ 2,051,301$ 1,416,543$ 26,431$ Receivables: Accounts - - 3,750 - Interest - - - 1,200,781 Allowance for interest on Successor Agency --- (1,200,781) Prepaid costs --16,137- Deposits --20,000- Due from other funds ---- Restricted assets: Cash and investments with fiscal agents ---- Advances to Successor Agency --- 4,765,000 Allowance for Advances to Successor Agency --- (4,765,000) TOTAL ASSETS 11,168,172$ 2,051,301$ 1,456,430$ 26,431$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable 57,691$ -$ 24,837$ 2,030$ Unearned revenues 63,041 --- TOTAL LIABILITIES 120,732 -24,837 2,030 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues ---- TOTAL DEFERRED INFLOWS OF RESOURCES ---- FUND BALANCES: Nonspendable: Prepaid costs --16,137- Restricted for: Capital Projects ---- Special programs ---- Assigned to: Capital projects 10,627,053 --- Property acquisition 420,387 --- Public facilities - - 1,415,456 24,401 Special programs ---- Street related purposes - 2,051,301 -- TOTAL FUND BALANCES 11,047,440 2,051,301 1,431,593 24,401 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 11,168,172$ 2,051,301$ 1,456,430$ 26,431$ Drainage Facilities Economic Development Parks and Recreational Facilities Capital Projects Reserve 148Page 305 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Interest Allowance for interest on Successor Agency Prepaid costs Deposits Due from other funds Restricted assets: Cash and investments with fiscal agents Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable Unearned revenues TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Capital Projects Special programs Assigned to: Capital projects Property acquisition Public facilities Special programs Street related purposes TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (CONTINUED) 1,147,300$ 109,193$ 8,818,522$ 2,851,855$ ---- --34,959 - ---- ---- ---- --500,000 - ---- ---- ---- 1,147,300$ 109,193$ 9,353,481$ 2,851,855$ 6,816$ -$ 13,779$ 18,515$ ---- 6,816 -13,779 18,515 --34,959 - --34,959 - ---- ---- 1,140,484 --- ---- ---- -- 9,304,743 2,833,340 ---- -109,193 - - 1,140,484 109,193 9,304,743 2,833,340 1,147,300$ 109,193$ 9,353,481$ 2,851,855$ Buildings Art in Public Places Signalization Capital Golf 149Page 306 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Interest Allowance for interest on Successor Agency Prepaid costs Deposits Due from other funds Restricted assets: Cash and investments with fiscal agents Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable Unearned revenues TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Capital Projects Special programs Assigned to: Capital projects Property acquisition Public facilities Special programs Street related purposes TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 673,861$ 188,794$ 618$ 21$ --- - --- - --- - --- - --- - --- - --- - --- - --- - 673,861$ 188,794$ 618$ 21$ -$ -$ -$ -$ --- - ---- --- - --- - --- - - 188,794 618 21 --- - --- - --- - --- - 673,861 --- --- - 673,861 188,794 618 21 673,861$ 188,794$ 618$ 21$ Library Assessment District No. 94- 3 Merano Silver Spur Ranch Highlands Undergrounding 150Page 307 CITY OF PALM DESERT COMBINING BALANCE SHEET OTHER CAPITAL PROJECTS FUNDS JUNE 30, 2021 ASSETS: Pooled cash and investments Receivables: Accounts Interest Allowance for interest on Successor Agency Prepaid costs Deposits Due from other funds Restricted assets: Cash and investments with fiscal agents Advances to Successor Agency Allowance for Advances to Successor Agency TOTAL ASSETS LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES: LIABILITIES: Accounts payable Unearned revenues TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES: Nonspendable: Prepaid costs Restricted for: Capital Projects Special programs Assigned to: Capital projects Property acquisition Public facilities Special programs Street related purposes TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 8,950$ 670$ 28,462,231$ --3,750 -- 1,235,740 -- (1,200,781) --16,137 --20,000 --500,000 1,917,366 - 1,917,366 -- 4,765,000 -- (4,765,000) 1,926,316$ 670$ 30,954,443$ -$ -$ 123,668$ --63,041 --186,709 --34,959 --34,959 --16,137 1,926,316 670 2,116,419 -- 1,140,484 -- 10,627,053 --420,387 -- 13,577,940 --673,861 -- 2,160,494 1,926,316 670 30,732,775 1,926,316$ 670$ 30,954,443$ Total Other Capital Projects Funds CFD University Special Assessment Assessment 29 151Page 308 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Licenses and permits -$ -$ -$ -$ Intergovernmental revenues --32,217 - Investment earnings 302,404 4,394 13,451 268 Rental income --61,432- Miscellaneous -- -- TOTAL REVENUES 302,404 4,394 107,100 268 EXPENDITURES: Current: General government 400,000 - 2,477,067 - Public safety -- -- Parks, recreation and culture 49,500 --18,622 Capital outlay 415,002 --- TOTAL EXPENDITURES 864,502 - 2,477,067 18,622 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (562,098)4,394 (2,369,967)(18,354) OTHER FINANCING SOURCES (USES) Transfers in 400,000 - 1,070,000 - Transfers out -- -- TOTAL OTHER FINANCING SOURCES (USES) 400,000 - 1,070,000 - NET CHANGE IN FUND BALANCES (162,098)4,394 (1,299,967)(18,354) FUND BALANCES - BEGINNING OF YEAR 11,209,538 2,046,907 2,731,560 42,755 FUND BALANCES - END OF YEAR 11,047,440$ 2,051,301$ 1,431,593$ 24,401$ Economic Development Parks and Recreational Facilities Capital Projects Reserve Drainage Facilities 152Page 309 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Licenses and permits Intergovernmental revenues Investment earnings Rental income Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR (CONTINUED) 239,079$ -$ -$ -$ ---- 2,424 239 30,911 5,888 ---- 20 - 2,392,621 - 241,523 239 2,423,532 5,888 ---21,962 ---28,886 207,305 -577,865 - 34,000 --- 241,305 -577,865 50,848 218 239 1,845,667 (44,960) ---- (121,210)--- (121,210)--- (120,992)239 1,845,667 (44,960) 1,261,476 108,954 7,459,076 2,878,300 1,140,484$ 109,193$ 9,304,743$ 2,833,340$ Art in Public Places Signalization Capital Golf Buildings 153Page 310 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Licenses and permits Intergovernmental revenues Investment earnings Rental income Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR -$ -$ -$ -$ --- - 1,469 49 -- --- - --- - 1,469 49 -- --- - --- - --- - --- - ---- 1,469 49 -- --- - ---- ---- 1,469 49 -- 672,392 188,745 618 21 673,861$ 188,794$ 618$ 21$ Library Assessment District No. 94- 3 Merano Silver Spur Ranch Highlands Undergrounding 154Page 311 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER CAPITAL PROJECTS FUNDS YEAR ENDED JUNE 30, 2021 REVENUES: Licenses and permits Intergovernmental revenues Investment earnings Rental income Miscellaneous TOTAL REVENUES EXPENDITURES: Current: General government Public safety Parks, recreation and culture Capital outlay TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING OF YEAR FUND BALANCES - END OF YEAR -$ -$ 239,079$ --32,217 9,225 -370,722 --61,432 -- 2,392,641 9,225 -3,096,091 -- 2,899,029 --28,886 --853,292 --449,002 --4,230,209 9,225 -(1,134,118) -- 1,470,000 --(121,210) --1,348,790 9,225 -214,672 1,917,091 670 30,518,103 1,926,316$ 670$ 30,732,775$ Total Other Capital Projects Fund CFD University Special Assessment District Assessment 29 155Page 312 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CAPITAL PROPERTIES YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 61,830,866$61,830,866$61,830,866$-$ Resources (Inflows): Investment earnings 100,000 100,000 20,500 (79,500) Amounts Available for Appropriations 61,930,866 61,930,866 61,851,366 (79,500) Charges to Appropriation (Outflow): General government 100,000 450,000 2,500 447,500 Parks and recreation - 20,735,000 - 20,735,000 Public works 740,000 17,143,245 5,682,157 11,461,088 Capital outlay - 1,533,921 1,117,520 416,401 Total Charges to Appropriations 840,000 39,862,166 6,802,177 33,059,989 Budgetary Fund Balance, June 30 61,090,866$22,068,700$55,049,189$32,980,489$ 156Page 313 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS RESERVE YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 11,209,538$11,209,538$11,209,538$-$ Resources (Inflows): Investment earnings 10,000 10,000 302,404 292,404 Transfers in 400,000 400,000 400,000 - Amounts Available for Appropriations 11,619,538 11,619,538 11,911,942 292,404 Charges to Appropriation (Outflow): General government 400,000 400,000 400,000 - Public safety - 68,152 - 68,152 Parks, recreation and culture - 249,802 49,500 200,302 Public works - 279,000 - 279,000 Capital outlay - 454,690 415,002 39,688 Total Charges to Appropriations 400,000 1,451,644 864,502 587,142 Budgetary Fund Balance, June 30 11,219,538$10,167,894$11,047,440$879,546$ 157Page 314 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE DRAINAGE FACILITIES YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,046,907$2,046,907$2,046,907$-$ Resources (Inflows): Investment earnings 5,000 5,000 4,394 (606) Amounts Available for Appropriations 2,051,907 2,051,907 2,051,301 (606) Charges to Appropriation (Outflow): Public works 25,000 407,926 - 407,926 Total Charges to Appropriations 25,000 407,926 - 407,926 Budgetary Fund Balance, June 30 2,026,907$1,643,981$2,051,301$407,320$ 158Page 315 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE ECONOMIC DEVELOPMENT YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,731,560$2,731,560$2,731,560$-$ Resources (Inflows): Rental income 61,816 61,816 61,432 (384) Intergovernmental -- 32,217 32,217 Investment earnings 1,000 1,000 13,451 12,451 Transfers in - 1,000,000 1,070,000 70,000 Amounts Available for Appropriations 2,794,376 3,794,376 3,908,660 114,284 Charges to Appropriation (Outflow): General government 482,115 3,589,992 2,477,067 1,112,925 Total Charges to Appropriations 482,115 3,589,992 2,477,067 1,112,925 Budgetary Fund Balance, June 30 2,312,261$204,384$1,431,593$1,227,209$ 159Page 316 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE PARKS AND RECREATIONAL FACILITIES YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 42,755$42,755$42,755$-$ Resources (Inflows): Investment earnings 100 100 268 168 Amounts Available for Appropriations 42,855 42,855 43,023 168 Charges to Appropriation (Outflow): Parks, recreation and culture 20,000 20,000 18,622 1,378 Total Charges to Appropriations 20,000 20,000 18,622 1,378 Budgetary Fund Balance, June 30 22,855$22,855$24,401$1,546$ 160Page 317 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE ART IN PUBLIC PLACES YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 1,261,476$1,261,476$1,261,476$-$ Resources (Inflows): Licenses and permits 75,000 75,000 239,079 164,079 Investment earnings 5,000 5,000 2,424 (2,576) Miscellaneous --20 20 Amounts Available for Appropriations 1,341,476 1,341,476 1,502,999 161,523 Charges to Appropriation (Outflow): Parks, recreation and culture 223,270 233,270 207,305 25,965 Capital outlay 296,000 296,000 34,000 262,000 Transfers out 175,000 175,000 121,210 53,790 Total Charges to Appropriations 694,270 704,270 362,515 341,755 Budgetary Fund Balance, June 30 647,206$637,206$1,140,484$503,278$ 161Page 318 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE SIGNALIZATION YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 108,954$108,954$108,954$-$ Resources (Inflows): Investment earnings 100 100 239 139 Amounts Available for Appropriations 109,054 109,054 109,193 139 Budgetary Fund Balance, June 30 109,054$109,054$109,193$139$ 162Page 319 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CAPITAL GOLF YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 7,459,076$7,459,076$7,459,076$-$ Resources (Inflows): Investment earnings 30,000 30,000 30,911 911 Miscellaneous 2,392,615 2,392,615 2,392,621 6 Amounts Available for Appropriations 9,881,691 9,881,691 9,882,608 917 Charges to Appropriation (Outflow): Parks, recreation and culture 644,305 844,305 577,865 266,440 Total Charges to Appropriations 644,305 844,305 577,865 266,440 Budgetary Fund Balance, June 30 9,237,386$9,037,386$9,304,743$267,357$ 163Page 320 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE BUILDINGS YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 2,878,300$2,878,300$2,878,300$-$ Resources (Inflows): Investment earnings 5,000 5,000 5,888 888 Amounts Available for Appropriations 2,883,300 2,883,300 2,884,188 888 Charges to Appropriation (Outflow): General government 286,000 578,600 21,962 556,638 Public safety - 90,000 28,886 61,114 Parks, recreation and culture 615,000 850,180 - 850,180 Total Charges to Appropriations 901,000 1,518,780 50,848 1,467,932 Budgetary Fund Balance, June 30 1,982,300$1,364,520$2,833,340$1,468,820$ 164Page 321 OTHER GOVERNMENTAL FUNDS –DEBT SERVICE FUND City Highlands Undergrounding Fund –This fund is used to account for the resources and payment for debt related to Highlands Undergrounding. 165Page 322 CITY OF PALM DESERT BALANCE SHEET OTHER DEBT SERVICE FUND JUNE 30, 2021 ASSETS: Pooled cash and investments 77,431$ 77,431$ Receivables: Assessments 1,188,117 1,188,117 Due from other governments 2,059 2,059 TOTAL ASSETS 1,267,607$ 1,267,607$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES: LIABILITIES: Accounts payable 229$ 229$ TOTAL LIABILITIES 229 229 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues 1,188,117 1,188,117 TOTAL DEFERRED INFLOWS OF RESOURCES 1,188,117 1,188,117 FUND BALANCES: Restricted for: Debt service 79,261 79,261 TOTAL FUND BALANCES 79,261 79,261 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 1,267,607$ 1,267,607$ Total Other Debt Service Fund City Highland Undergrounding 166Page 323 CITY OF PALM DESERT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER DEBT SERVICE FUND YEAR ENDED JUNE 30, 2021 Total Other Debt Service Fund REVENUES: Special assessments collected 134,195$ 134,195$ Investment earnings 252 252 TOTAL REVENUES 134,447 134,447 EXPENDITURES: Current: General government 13,293 13,293 Debt service: Principal retirement 48,000 48,000 Interest and fiscal charges 59,209 59,209 TOTAL EXPENDITURES 120,502 120,502 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 13,945 13,945 FUND BALANCES - BEGINNING OF YEAR 65,316 65,316 FUND BALANCES - END OF YEAR 79,261$ 79,261$ City Highlands Undergrounding 167Page 324 CITY OF PALM DESERT BUDGETARY COMPARISON SCHEDULE CITY HIGHLAND UNDERGROUNDING YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 65,316$65,316$65,316$-$ Resources (Inflows): Assessments 114,798 114,798 134,195 19,397 Investment earnings 200 200 252 52 Amounts Available for Appropriations 180,314 180,314 199,763 19,449 Charges to Appropriation (Outflow): General government 10,000 13,500 13,293 207 Debt service: Principal retirement 48,000 48,000 48,000 - Interest and fiscal charges 59,210 59,210 59,209 1 Total Charges to Appropriations 117,210 120,710 120,502 208 Budgetary Fund Balance, June 30 63,104$59,604$79,261$19,657$ 168Page 325 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for services provided to other departments or agencies of the City on a cost reimbursement basis. Equipment Replacement –This fund is used to account for financial transactions related to replacement of City-owned vehicles and equipment. Compensation Benefits Fund –This fund is used to account for funding of compensated absences. 169Page 326 CITY OF PALM DESERT COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2021 Total ASSETS: CURRENT ASSETS: Cash and investments 7,891,170$ 2,526,463$ 10,417,633$ Prepaid costs 45,631 - 45,631 Due from other governments 262,871 -262,871 TOTAL CURRENT ASSETS 8,199,672 2,526,463 10,726,135 CAPITAL ASSETS: Depreciable, net 3,869,352 -3,869,352 CAPITAL ASSETS, NET 3,869,352 -3,869,352 TOTAL ASSETS 12,069,024 2,526,463 14,595,487 LIABILITIES: CURRENT LIABILITIES: Accounts payable 1,328,540 -1,328,540 Compensated absences - 300,000 300,000 TOTAL CURRENT LIABILITIES 1,328,540 300,000 1,628,540 NONCURRENT LIABILITIES: Compensated absences - 2,201,835 2,201,835 TOTAL NONCURRENT LIABILITIES:- 2,201,835 2,201,835 TOTAL LIABILITIES 1,328,540 2,501,835 3,830,375 NET POSITION: Invested in capital assets 3,869,352 -3,869,352 Unrestricted 6,871,132 24,628 6,895,760 TOTAL NET POSITION 10,740,484$ 24,628$ 10,765,112$ Equipment Replacement Compensation Benefits 170Page 327 CITY OF PALM DESERT COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2021 Total OPERATING EXPENSES: General and administrative -$ 409,738$ 409,738$ Maintenance and operations 396,940 -396,940 Depreciation and amortization 718,948 -718,948 TOTAL OPERATING EXPENSES 1,115,888 409,738 1,525,626 OPERATING LOSS (1,115,888) (409,738) (1,525,626) NONOPERATING REVENUES (EXPENSES): Intergovernmental 637,393 - 637,393 Interest revenue 16,750 4,157 20,907 Loss on disposal of capital assets (8,202)-(8,202) TOTAL NONOPERATING REVENUES (EXPENSES)645,941 4,157 650,098 LOSS BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS (469,947) (405,581) (875,528) CAPITAL CONTRIBUTIONS 231,775 -231,775 TRANSFERS IN 718,948 325,462 1,044,410 CHANGE IN NET POSITION 480,776 (80,119)400,657 NET POSITION - BEGINNING OF YEAR 10,259,708 104,747 10,364,455 NET POSITION - END OF YEAR 10,740,484$ 24,628$ 10,765,112$ Equipment Replacement Compensation Benefits 171Page 328 CITY OF PALM DESERT COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2021 Total CASH FLOWS FROM OPERATING ACTIVITIES: Payments to suppliers (456,322)$ -$ (456,322)$ Cash paid to employees for services -(482,974)(482,974) NET CASH USED BY OPERATING ACTIVITIES (456,322)(482,974)(939,296) CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES: Cash received from other funds 718,948 325,462 1,044,410 NET CASH PROVIDED BY NONCAPITAL AND RELATED FINANCING ACTIVITIES 718,948 325,462 1,044,410 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Received from other Government 374,522 374,522 Purchases of capital assets (523,039)-(523,039) NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (148,517)-(148,517) CASH FLOWS FROM INVESTING ACTIVITIES: Interest and dividends 16,750 4,157 20,907 NET CASH PROVIDED BY INVESTING ACTIVITIES 16,750 4,157 20,907 NET DECREASE CASH AND CASH EQUIVALENTS 130,859 (153,355)(22,496) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 7,760,311 2,679,818 10,440,129 CASH AND CASH EQUIVALENTS - 7,891,170$ 2,526,463$ 10,417,633$ END OF YEAR RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)(1,115,888)$ (409,738)$ (1,525,626)$ Adjustments to Reconcile Operating Loss to Net Cash Provided (used) by Operating Activities: Depreciation and amortization 718,948 -718,948 (Increase) decrease in prepaid expense 8,057 -8,057 Increase (decrease) in accounts payable (67,439)-(67,439) Increase (decrease) in compensated absences -(73,236)(73,236) Total Adjustments 659,566 (73,236)586,330 NET CASH USED BY OPERATING ACTIVITIES (456,322)$ (482,974)$ (939,296)$ NONCASH ITEMS: Capital Contributions 231,577$ -$ 231,577$ Equipment Replacement Compensation Benefits 172Page 329 CUSTODIAL FUNDS Custodial Funds are used to account for assets held by the city as an agent for individuals, private organizations, other governments and/or funds. Treasurers 1911 Bond Act - This fund is used to account for the assets held on behalf of the assessment district’s property owners until they are remitted to the bondholders. Retiree Service Stipend Fund - This fund is used to account for assets held to pay for the retiree service stipend. Special Assessment Funds - These funds are used to account for the collection of special assessments and the future payment of debt service related to bonds issued. 173Page 330 CITY OF PALM DESERT ALL CUSTODIAL FUNDS JUNE 30, 2021 Totals Assets: Pooled cash and investments 11,354$ 2,912,455$ 8,177,758$ 11,101,567$ Receivables: Assessments -- 48,058,996 48,058,996 Accrued interest --42 42 Due from other governments --35,425 35,425 Restricted assets: Cash and investments with fiscal agents -- 4,663,828 4,663,828 Total Assets 11,354 2,912,455 60,936,049 63,859,858 Liabilities: Accounts payable 11,354 2,550 3,523 17,427 Deposits payable -- 48,058,996 48,058,996 Long-term debt due in one year -- 1,945,000 1,945,000 Long-term debt due more than one year -- 45,135,000 45,135,000 Total Liabilities 11,354 2,550 95,142,519 95,156,423 Net Position: Held in trust for other purposes - 2,909,905 (34,206,470) (31,296,565) Total Net Position -$ 2,909,905$ (34,206,470)$ (31,296,565)$ COMBINING STATEMENT OF ASSETS AND LIABILITIES Treasurers 1991 Bond Act Retiree Service Stipend Fund Special Assessment Funds 174Page 331 CITY OF PALM DESERT COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2021 ADDITIONS: Intergovernmental 74$ -$ 4,584,285$ 4,584,359$ Investment income -3,268 49,144 52,412 Contributions from City -936,802 -936,802 TOTAL ADDITIONS 74 940,070 4,633,429 5,573,573 DEDUCTIONS Administrative expenses --96,751 96,751 Contractual services 268,804 936,802 84,405 1,290,011 Interest -- 2,514,423 2,514,423 TOTAL DEDUCTIONS 268,804 936,802 2,695,579 3,901,185 CHANGES IN NET POSITION (268,730)3,268 1,937,850 1,672,388 NET POSITION - BEGINNING OF YEAR ---- Restatement (Note: 23)268,730 2,906,637 (36,144,320) (32,968,953) NET POSITION - BEGINNING OF YEAR RESTATED 268,730 2,906,637 (36,144,320) (32,968,953) NET POSITION - END OF YEAR -$ 2,909,905$ (34,206,470)$ (31,296,565)$ Treasurers 1991 Bond Act Retiree Service Stipend Fund Special Assessment Funds Total Custodial Funds 175Page 332 This page intentionally left blank 176Page 333 '(6&5,37,212)67$7,67,&$/6(&7,21&217(176 -XQH 7KLV SDUW RI WKH &LW\ RI 3DOP 'HVHUW¶VDQQXDO FRPSUHKHQVLYH ILQDQFLDO UHSRUW SUHVHQWV GHWDLOHG LQIRUPDWLRQ DV D FRQWH[W IRU XQGHUVWDQGLQJ ZKDW WKH LQIRUPDWLRQ LQ WKH ILQDQFLDO VWDWHPHQWV QRWH GLVFORVXUHVDQGUHTXLUHGVXSSOHPHQWDU\LQIRUPDWLRQVD\DERXWWKHFLW\¶VRYHUDOOILQDQFLDOKHDOWK &RQWHQWV )LQDQFLDO7UHQGV 7KHVHVFKHGXOHVFRQWDLQWUHQGLQIRUPDWLRQWRKHOSWKHUHDGHUXQGHUVWDQGKRZWKH&LW\¶V ILQDQFLDOSHUIRUPDQFHDQGZHOOEHLQJKDYHFKDQJHGRYHUWLPH 5HYHQXH&DSDFLW\ 7KHVHVFKHGXOHVFRQWDLQLQIRUPDWLRQWRKHOSWKHUHDGHUDVVHVVWKH&LW\¶VPRVWVLJQLILFDQW ORFDOUHYHQXHVRXUFH 'HEW&DSDFLW\ 7KHVHVFKHGXOHVSUHVHQWLQIRUPDWLRQWRKHOSWKHUHDGHUDVVHVVWKHDIIRUGDELOLW\RIWKH&LW\¶V FXUUHQWOHYHOVRIRXWVWDQGLQJGHEWDQGWKH&LW\¶VDELOLW\WRLVVXHDGGLWLRQDOGHEWLQWKHIXWXUH 'HPRJUDSKLFDQG(FRQRPLF,QIRUPDWLRQ 7KHVHVFKHGXOHVRIIHUGHPRJUDSKLFDQGHFRQRPLFLQGLFDWRUVWRKHOSWKHUHDGHUXQGHUVWDQG WKHHQYLURQPHQWZLWKLQZKLFKWKH&LW\¶VILQDQFLDODFWLYLWLHVWDNH SODFH 2SHUDWLQJ,QIRUPDWLRQ 7KHVHVFKHGXOHVFRQWDLQVHUYLFHDQGLQIUDVWUXFWXUHGDWDWRKHOSWKHUHDGHUXQGHUVWDQGKRZ WKHLQIRUPDWLRQLQWKH&LW\¶VILQDQFLDOUHSRUWUHODWHVWRWKHVHUYLFHVWKH&LW\SURYLGHVDQG WKHDFWLYLWLHVLW SUHIRUPV 6RXUFHV 8QOHVV RWKHUZLVH QRWHG WKH LQIRUPDWLRQ LQ WKHVHV VFKHGXOHV LV GHULYHG IURP WKH DQQXDO FRPSUHKHQVLYHILQDQFLDOUHSRUWVIRUWKHUHOHYDQW\HDU7KH&LW\LPSOHPHQWHG*$6%6WDWHPHQWLQ VFKHGXOHVSUHVHQWLQJJRYHUQPHQWZLGHLQIRUPDWLRQLQFOXGHLQIRUPDWLRQEHJLQQLQJLQWKDW \HDU 177Page 334 This page intentionally left blank 178Page 335 &LW\RI3DOP'HVHUW 1HW3RVLWLRQE\&RPSRQHQW /DVW7HQ)LVFDO<HDUV $FFUXDO%DVLVRI$FFRXQWLQJ Governmental Activities 2021 2020 2019 2018 2017 Net Investment in capital assets 421,568,819 424,163,964 429,729,549 438,184,070 449,037,170 Restricted 197,082,889 196,858,726 200,536,233 197,349,364 197,824,604 Unrestricted 92,557,050 86,017,220 90,057,306 83,054,707 87,091,894 Total Governmental Activities Net Position 711,208,758 707,039,910 720,323,088 718,588,141 733,953,668 Business-Type Activities - - - - Net Investment in capital assets 67,981,326 68,394,059 69,070,734 69,111,797 69,829,772 Restricted - - - - - Unrestricted 8,069,182 6,672,261 6,590,251 5,609,843 4,829,456 Total Business-type Activities Net Position 76,050,508 75,066,320 75,660,985 74,721,640 74,659,228 Primary Government Net Investment in capital assets 489,550,145 492,558,023 498,800,283 507,295,867 518,866,942 Restricted 197,082,889 196,858,726 200,536,233 197,349,364 197,824,604 Unrestricted 100,626,232 92,689,481 96,647,557 88,664,550 91,921,350 Total Primary Government Net Position 787,259,266 782,106,230 795,984,073 793,309,781 808,612,896 Governmental Activities 2016 2015 2014 2013 2012 Net Investment in capital assets 459,644,720 473,722,694 466,246,732 465,756,172 475,457,375 Restricted 193,298,431 135,900,520 140,460,575 132,741,798 119,736,419 Unrestricted 78,812,066 71,530,456 105,537,785 103,603,715 107,622,257 Total Governmental Activities Net Position 731,755,217 (3) 681,153,670 (2) 712,245,092 702,101,685 702,816,051 (1) Business-Type Activities Net Investment in capital assets 70,202,487 71,129,743 72,009,184 72,892,200 73,375,634 Restricted - - - - - Unrestricted 4,479,575 4,302,958 3,920,382 3,682,061 3,901,816 Total Business-type Activities Net Position 74,682,062 75,432,701 75,929,566 76,574,261 77,277,450 Primary Government Net Investment in capital assets 529,847,207 544,852,437 538,255,916 538,648,372 548,833,009 Restricted 193,298,431 135,900,520 140,460,575 132,741,798 119,736,419 Unrestricted 83,291,641 75,833,414 109,458,167 107,285,776 111,524,073 Total Primary Government Net Position 806,437,279 756,586,371 788,174,658 778,675,946 780,093,501 (1) On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. (2) The implementation of GASB Statement No. 68 and Statement No. 71 resulted in a prior year restatement decrease of $37.73 million in the governmental activities net positons. (3) The City's Capital Properties Capital Project Fund received $65,566,963 and the Housing Asset Fund received $6,571,706 for a combined total of $72,138,669 of capital bond proceeds transferred from the Successor Agency. 179Page 336 &LW\RI3DOP'HVHUW &KDQJHVLQ1HW3RVLWLRQ /DVW7HQ)LVFDO<HDUV $FFUXDO%DVLVRI$FFRXQWLQJ Governmental Activities: General government 25,610,212 24,297,715 23,252,576 18,467,097 15,708,054 Public safety 34,280,941 37,286,860 37,195,732 36,543,050 34,943,220 Housing & Redevelopment 10,496,579 8,802,290 9,067,858 9,605,756 10,954,630 Parks, recreation and culture 7,969,386 7,651,094 8,284,914 8,240,115 9,850,200 Public works 24,979,279 28,270,798 14,836,332 18,358,907 14,892,145 Payments to other agencies - - - - - Interest on long term debt 176,259 203,183 231,228 259,250 271,603 Total Governmental activities Expenses 103,512,656 106,511,940 92,868,640 91,474,175 86,619,852 Business-Type Activities: Desert Willow Golf Course 8,960,991 8,603,243 8,700,514 8,763,220 8,243,515 Office Complex - Parkview 872,212 856,196 874,753 930,815 893,125 Total Business-Type Activities 9,833,203 9,459,439 9,575,267 9,694,035 9,136,640 Total primary government expenses 113,345,859 115,971,379 102,443,907 101,168,210 95,756,492 Program Revenues Governmental Activities Charges for services General government 2,437,840 2,343,116 2,645,724 2,388,260 2,095,648 Housing & Redevelopment 7,455,959 8,446,585 8,180,354 7,551,760 6,861,450 Public safety 18,828,021 16,429,810 14,503,741 10,801,436 10,603,708 Parks, recreation and culture 325,485 532,543 829,557 821,824 793,527 Public works 2,443,299 2,386,635 2,762,045 2,685,831 2,327,521 Operating grants & contributions 10,617,579 10,416,281 10,426,397 8,555,881 7,931,900 Capital grants & contributions 16,836,560 3,661,487 4,016,193 2,442,621 7,710,355 Total Governmental Activities Program Revenues 58,944,743 44,216,457 43,364,011 35,247,613 38,324,109 Business-Type Activities Charges for Service: Desert Willow Golf Course 9,171,607 7,099,985 8,743,654 8,432,273 7,497,664 Office Complex - Parkview 1,291,020 1,311,140 1,298,066 1,250,456 1,284,462 Capital grants & contributions 220,198 183,556 504,217 167,670 605,186 Total Business-type activities program revenue 10,682,825 8,594,681 10,545,937 9,850,399 9,387,312 Total Primary Government program revenue 69,627,568 52,811,138 53,909,948 45,098,012 47,711,421 Net (Expense) / Revenue Governmental activities (44,567,913) (62,295,483) (49,504,629) (56,226,562) (48,295,743) Business-type activities 849,622 (864,758) 970,670 156,364 250,672 Total Primary Government Net Expense (43,718,291) (63,160,241) (48,533,959) (56,070,198) (48,045,071) General Revenues & Other Changes in Net Position Governmental Activities: Taxes: (Combined/Net Pass-through)47,221,069 45,210,477 53,894,917 50,150,650 47,628,454 Investment Earnings 301,330 2,366,204 3,170,693 1,901,536 1,041,232 Contributions not restricted for specific purpose - - - - - Gain(loss) on sales of capital assets - 80,490 7,452 17,274 2,145 Miscellaneous 1,214,362 1,355,134 1,396,514 1,573,106 1,522,363 Special Item (3)- - (7,530,000) - - Transfers In / (Out) - - 300,000 300,000 300,000 Gain on Transfer to Successor Agency/ Extraordinary Gain (2)- - - - - Total Governmental activities Net Revenues 48,736,761 49,012,305 51,239,576 53,942,566 50,494,194 Business-Type Activities: Investment Earnings 20,283 159,115 181,310 74,873 26,494 Gain(loss) on sales of capital assets - - 87,365 131,175 - Miscellaneous 114,283 110,978 - - - Transfers Out - - (300,000) (300,000) (300,000) Total Business-type activities 134,566 270,093 (31,325) (93,952) (273,506) Total primary government 48,871,327 49,282,398 51,208,251 53,848,614 50,220,688 Change in Net Position Governmental Activities: 4,168,848 (13,283,178) 1,734,947 (2,283,996) 2,198,451 Business-Type Activities:984,188 (594,665) 939,345 62,412 (22,834) Total primary government 5,153,036 (13,877,843) 2,674,292 (2,221,584) 2,175,617 (1) On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. (2) The City's Capital Properties Capital Project Fund received $65,566,963 and the Housing Asset Fund received $6,571,706 for a combined total of $72,138,669 of capital bond proceeds transferred from the Successor Agency. (3) City established an allowance for advances owed by the Successor Agency. Expenses 20172018201920202021 180Page 337 &LW\RI3DOP'HVHUW &KDQJHVLQ1HW3RVLWLRQ &RQWLQXHG /DVW7HQ)LVFDO<HDUV $FFUXDO%DVLVRI$FFRXQWLQJ Governmental Activities: General government 14,836,881 16,337,393 19,194,343 16,375,295 17,387,080 Public safety 34,009,984 32,077,635 29,339,106 28,614,153 28,037,453 Housing & Redevelopment 8,162,859 11,666,724 7,852,611 6,944,033 10,519,663 Parks, recreation and culture 9,223,126 8,598,242 8,327,402 8,752,623 6,033,019 Public works 47,044,197 19,144,213 21,123,197 16,316,237 17,407,751 Payments to other agencies - - - - 16,994,265 Interest on long term debt 289,000 294,258 237,053 253,381 10,971,707 Total Governmental Activities Expenses 113,566,047 88,118,465 86,073,712 77,255,722 107,350,938 Business-Type Activities: Desert Willow Golf Course 8,165,183 8,433,267 8,452,001 8,655,754 8,471,567 Office Complex - Parkview 1,005,918 934,296 922,341 984,811 1,031,178 Total Business-Type Activities 9,171,101 9,367,563 9,374,342 9,640,565 9,502,745 Total primary government expenses 122,737,148 97,486,028 95,448,054 86,896,287 116,853,683 Program Revenues Governmental Activities Charges for services General government 2,185,123 2,088,393 2,152,280 1,833,823 1,805,442 Housing & Redevelopment 7,029,595 7,971,265 6,851,603 5,308,858 5,034,002 Public safety 10,606,464 9,987,891 10,239,886 11,147,297 9,041,801 Parks, recreation and culture 772,801 772,728 729,076 898,222 728,721 Public works 2,186,153 1,832,241 2,180,877 768,775 826,251 Operating grants & contributions 9,496,520 7,512,894 9,745,609 5,876,028 7,411,902 Capital grants & contributions 10,839,715 19,297,015 21,086,051 7,733,439 2,309,678 Total Governmental Activities Program Revenues 43,116,371 49,462,427 52,985,382 33,566,442 27,157,797 Business-Type Activities Charges for Service: Desert Willow Golf Course 7,240,866 7,894,676 7,804,904 7,494,819 7,635,352 Office Complex - Parkview 1,280,230 1,306,042 1,254,521 1,215,860 1,222,971 Capital grants & contributions 111,942 47,768 94,076 660,685 236,419 Total Business-type activities program revenue 8,633,038 9,248,486 9,153,501 9,371,364 9,094,742 Total Primary Government program revenue 51,749,409 58,710,913 62,138,883 42,937,806 36,252,539 Net (Expense) / Revenue Governmental Activities (70,449,676) (38,656,038) (33,088,330) (43,689,280) (80,193,141) Business-type activities (538,063) (119,077) (220,841) (269,201) (408,003) Total Primary Government Net Expense (70,987,739) (38,775,115) (33,309,171) (43,958,481) (80,601,144) General Revenues & Other Changes in Net Position Governmental Activities: Taxes: (Combined/Net Pass-through)44,747,151 41,931,997 39,952,738 38,742,060 73,105,614 Investment Earnings 2,074,934 494,452 358,674 318,996 1,102,309 Contributions not restricted for specific purpose - - - - 791,256 Gain(loss) on sales of assets 24,292 11,720 488,319 - - Miscellaneous 1,828,677 1,726,007 1,994,506 3,894,203 5,838,881 Special Item (3)- - - - - Transfers In / (Out) 237,500 437,500 437,500 437,500 440,000 Gain on Transfer to Successor Agency/Extraordinary Gain (2) 72,138,669 - - - 144,011,578 Total Governmental Activities Net Revenues 121,051,223 44,601,676 43,231,737 43,392,759 225,289,638 Business-Type Activities: Investment Earnings 24,924 11,774 13,646 3,512 13,411 Gain(loss) on sales of capital assets - 47,938 - - - Miscellaneous - - - - - Transfers Out (237,500) (437,500) (437,500) (437,500) (440,000) Total Business-type activities (212,576) (377,788) (423,854) (433,988) (426,589) Total primary government 120,838,647 44,223,888 42,807,883 42,958,771 224,863,049 Change in Net Position Governmental Activities: 50,601,547 5,945,638 10,143,407 (296,521) 145,096,497 Business-Type Activities:(750,639) (496,865) (644,695) (703,189) (834,592) Total primary government 49,850,908 5,448,773 9,498,712 (999,710) 144,261,905 (1) On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. (2) The City's Capital Properties Capital Project Fund received $65,566,963 and the Housing Asset Fund received $6,571,706 for a combined total of $72,138,669 of capital bond proceeds transferred from the Successor Agency. (3) City established an allowance for advances owed by the Successor Agency. Expenses 2012 (1)2013201420152016 181Page 338 This page intentionally left blank 182Page 339 &LW\RI3DOP'HVHUW )XQG%DODQFHVRI*RYHUQPHQWDO)XQGV /DVW7HQ)LVFDO<HDUV 0RGLILHG$FFUXDO%DVLVRI$FFRXQWLQJ General Fund:2021 2020 2019 2018 2017 Nonspendable 4,178,180 7,196,092 10,559,396 10,509,094 9,067,979 Restricted - - - - - Committed 73,856,851 66,012,415 63,197,223 59,666,638 - Assigned 16,696,825 16,196,564 15,964,130 15,492,508 658,817 Unassigned 5,681,608 3,473,480 3,322,321 4,702,308 74,259,748 Total General Fund 100,413,464 92,878,551 93,043,070 90,370,548 83,986,544 All other Governmental Funds: Nonspendable 18,427 15,705 193,189 1,726 1,276 Restricted 168,368,520 168,806,454 175,780,733 169,549,126 171,044,474 Committed 16,312,379 16,275,373 16,247,652 16,751,821 16,771,055 Assigned 27,459,735 27,133,815 21,238,271 23,258,063 23,250,337 Unassigned - - - - - Total all other Governmental Funds 212,159,061 212,231,347 213,459,845 209,560,736 211,067,142 General Fund:2016 2015 2014 2013 2012 Nonspendable 9,528,630 10,312,261 7,745,320 7,678,250 2,926,739 Restricted - - - - - Committed - - - - - Assigned 991,853 1,771,278 4,425,423 3,224,761 3,297,152 Unassigned 71,842,172 67,727,130 66,203,203 65,311,919 69,438,971 Total General Fund 82,362,655 79,810,669 78,373,946 76,214,930 75,662,862 All other Governmental Funds: Nonspendable 3,052 348 6,713 (2) 49,319,200 39,525,247 Restricted 165,411,544 (3) 106,261,212 114,194,435 (2) 76,725,388 69,065,451 Committed 16,873,834 16,952,887 21,644,068 15,649,703 20,289,309 Assigned 24,172,531 24,429,824 14,144,969 17,552,726 Unassigned - - - - - Total all other Governmental Funds 182,288,430 147,386,978 160,275,040 155,839,260 146,432,733 (1) (1) On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. (2) Advances to the Successor Agency reclassified from Nonspendable to Restricted for Special Revenue Funds. (3) The City's Capital Properties Capital Project Fund received $65,566,963 and the Housing Asset Fund received $6,571,706 for a combined total of $72,138,669 of capital bond proceeds transferred from the Successor Agency. 183Page 340 &LW\RI3DOP'HVHUW &KDQJHVLQ)XQG%DODQFHVRI*RYHUQPHQWDO)XQGV /DVW7HQ)LVFDO<HDUV 0RGLILHG$FFUXDO%DVLVRI$FFRXQWLQJ Revenues:2021 2020 2019 2018 2017 Taxes 65,209,322 59,635,918 67,102,185 61,906,859 59,466,545 Special assessments collected 3,381,657 3,481,924 3,948,157 3,445,246 3,318,114 Licenses & permits 1,504,694 1,268,965 1,416,829 1,326,049 1,678,709 Intergovernmental revenues 20,136,679 6,401,926 6,194,152 5,682,704 7,249,515 Rental income 7,320,419 7,071,648 6,899,916 6,675,632 6,439,458 Charges for services 4,889,634 5,272,577 5,223,285 2,894,821 2,356,363 Investment Earnings 1,298,728 10,311,159 7,166,097 3,626,892 2,086,224 Fines & forfeitures 147,671 127,801 273,434 162,370 135,276 Miscellaneous 3,776,838 4,741,905 2,892,940 2,886,542 2,594,433 Contributions from other government - - - - 3,550,991 Contributions from property owners - - - - - Total Revenues 107,665,642 98,313,823 101,116,995 88,607,115 88,875,628 Expenditures: General government 23,478,543 21,468,512 24,269,546 19,281,102 16,887,293 Housing & redevelopment 8,839,559 7,090,941 7,504,119 8,522,801 9,239,680 Pass-through-agreement - - - - - Public safety 34,035,102 37,021,952 36,901,283 36,247,656 34,674,418 Parks, recreation & culture 6,073,015 5,902,166 6,497,391 6,467,713 7,157,821 Public works 18,533,419 21,994,806 8,728,354 12,183,852 8,794,894 Contributions to property owners - - - - Capital outlay 7,840,438 5,117,968 3,396,511 915,422 2,169,035 Debt service: Principal retirement 174,000 225,000 587,000 150,000 237,000 Interest and fiscal charges 184,529 210,292 244,050 260,971 277,814 Total Expenditures 99,158,605 99,031,637 88,128,254 84,029,517 79,437,955 Excess(deficiency of Revenues over(under) expenditures 8,507,037 (717,814) 12,988,741 4,577,598 9,437,673 Other financing sources (uses) Transfers in 10,186,341 10,702,762 5,319,448 6,613,352 9,406,888 Transfers out (11,230,751) (11,377,965) (5,736,558) (6,313,352) (12,218,428) Special Item (3)- - (6,000,000) - - Extraordinary Gain / (Loss) (2)- - - - - Sale of property - - - - - Total Other financing sources (uses)(1,044,410) (675,203) (6,417,110) 300,000 (2,811,540) Net Change In Fund Balance 7,462,627 (1,393,017) 6,571,631 4,877,598 6,626,133 Revenues:2016 2015 2014 2013 2012 (1) Taxes 56,735,503 52,571,369 50,464,511 50,768,200 82,901,921 Special assessments collected 3,296,705 3,058,766 3,486,220 3,654,337 3,232,923 Licenses & permits 2,057,843 1,757,250 2,262,907 1,586,796 1,041,834 Intergovernmental revenues 15,429,238 18,981,304 7,380,744 5,097,892 6,637,426 Rental income 5,896,480 5,660,762 5,626,850 5,367,630 5,146,499 Charges for services 2,082,843 1,819,464 2,165,020 898,222 728,721 Investment Earnings 1,837,319 1,242,662 864,853 373,012 1,469,142 Fines & forfeitures 295,269 224,612 231,768 242,568 276,452 Miscellaneous 2,317,499 2,377,923 3,539,552 9,028,698 6,814,924 Contributions from other government - 9,168 10,749,218 - - Contributions from property owners 7,868 - 420,590 - - Total Revenues 89,956,567 87,703,280 87,192,233 77,017,355 108,249,842 Expenditures: General government 15,783,955 15,467,746 17,070,816 14,028,252 15,851,883 Housing & redevelopment 6,438,849 9,349,021 6,650,178 5,650,666 8,942,097 Pass-through-agreement - - - - 16,994,265 Public safety 33,750,347 31,819,214 29,139,735 28,299,876 27,551,113 Parks, recreation & culture 6,831,534 6,236,717 5,802,941 6,162,449 3,685,334 Public works 11,031,584 13,082,388 12,741,764 9,819,591 11,306,021 Contributions to property owners 19,584,487 49 2,350,187 - - Capital outlay 7,071,738 19,339,987 6,273,822 2,788,676 9,575,227 Debt service: Principal retirement 257,000 4,944,000 674,000 318,000 9,032,707 Interest and fiscal charges 296,336 240,219 242,495 255,239 10,187,765 Total Expenditures 101,045,830 100,479,341 80,945,938 67,322,749 113,126,412 Excess(deficiency of Revenues over(under) expenditures (11,089,263) (12,776,061) 6,246,295 9,694,606 (4,876,570) Other financing sources (uses) Transfers in 6,030,706 6,132,859 4,861,551 11,274,539 24,453,724 Transfers out (6,075,206) (6,971,359) (5,424,051) (11,010,550) (24,013,724) Special Item (3)- - - - (155,895,962) Extraordinary Gain / (Loss) (2)72,138,669 - - - Sale of property 225,000 2,163,222 911,001 - - Total Other financing sources (uses)72,319,169 1,324,722 348,501 263,989 (155,455,962) Net Change In Fund Balance 61,229,906 (11,451,339) 6,594,796 9,958,595 (160,332,532) 1.2%0.9%18.6% (1) On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. For more information on the dissolution of the RDA please see Note 16 and 17. (2) The City's Capital Properties Capital Project Fund received $65,566,963 and the Housing Asset Fund received $6,571,706 for a combined total of $72,138,669 of capital bond proceeds transferred from the Successor Agency. (3) City established an allowance for advances owed by the Successor Agency. Debt service as a percentage of noncapital expenditures Debt service as a percentage of noncapital expenditures 6.4% 0.7%0.5%1.0%0.5%0.4% 0.6% 184Page 341 City of Palm Desert *UDSKV&KDQJHVLQ)XQG%DODQFHVRI*RYHUQPHQWDO)XQGV /DVW7HQ)LVFDO<HDUV 0RGLILHG$FFUXDO%DVLVRI$FFRXQWLQJ (1) Combined Other is a combination of rental income, investment earnings, and charges for services. (2) Miscellaneous Other is a combination of fines and forfeitures, miscellaneous, contributions from other governments, and contributions from property owners. (3) Debt Expenditures is a combination of interest/fiscal charges and principal retirement . (4) Public works is a combination of public works and contributions to property owners. Note: Graphs excludes Other financing sources and uses. )<)<)< )<)<)<)<)<)<)<7RWDO5HYHQXHV &RPELQHGRWKHU 0LVFHOODQHRXVRWKHU ,QWHUJRYHUQPHQWDOUHYHQXHV /LFHQVHV SHUPLWV 7D[HV 6SHFLDO$VVHVVPHQWV )<)<)< )<)<)<)<)<)<)<7RWDO([SHQGLWXUHV 3DUNVUHFUHDWLRQ FXOWXUH 3DVVWKURXJKDJUHHPHQW 'HEW([SHQGLWXUHV &DSLWDORXWOD\ 3XEOLFZRUNV 3XEOLFVDIHW\ +RXVLQJ 5HGHYHORSPHQW *HQHUDO*RYHUQPHQW -185Page 342 City of Palm Desert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tate Subventions is any combination of motor vehicle, off-highway in-lieu, and subventions from state. (2) Other Revenues is any combination of miscellaneous penalties and interest, permits, grants, parking bails, fees, sales of maps and publications, vehicle and court fines, rental income, other revenues and Federal ARPA-Covid19. (3) The State of California reprogramed motor vehicle fees, the City now receives this as property taxes. (4) Reimbursements is a combination of RDA costs and other reimbursements, due to dissolution in February 2012 the RDA reimbursement is limited and applies to existing projects. 186Page 343 City of Palm Desert 6XSSOHPHQWDO*UDSK+LVWRULFDO*HQHUDO)XQG5HYHQXHV ,QFOXGLQJ7UDQVIHUV,Q /DVW7HQ)LVFDO<HDUV (1) Combined Other is any combination of transfers, franchises, state subventions*, building and grading permits, reimbursements, business license taxes, timeshare mitigation fees, plan check fees, property transfer taxes. It also may include any combination of miscellaneous bails, fees, fines, grants, incomes, penalties, permits, sales and taxes. *State Subventions is any combination of motor vehicle, off-highway in-lieu, and subventions from state. FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012&RPELQHG2WKHU ,QWHUHVW 3URSHUW\7D[ 7UDQVLHQW2FFXSDQF\7D[ 6DOHV7D[ 187Page 344 City of Palm Desert 6XSSOHPHQWDO+LVWRULFDO*HQHUDO)XQG([SHQGLWXUHV ,QFOXGLQJ7UDQVIHUV2XW /DVW7HQ)LVFDO<HDUV )< ([SHQGLWXUH 3XEOLF6DIHW\ &LW\$GPLQLVWUDWLRQ 3XEOLF:RUNV$GPLQLVWUDWLRQ &RPPXQLW\3URPRWLRQV 6WUHHW0DLQWHQDQFH %XLOGLQJ6DIHW\ 6WUHHW5HVXUIDFLQJ 3XEOLF:RUNV 2WKHU([SHQGLWXUHV 7RWDO([SHQGLWXUHV )< ([SHQGLWXUH 3XEOLF6DIHW\ &LW\$GPLQLVWUDWLRQ 3XEOLF:RUNV$GPLQLVWUDWLRQ &RPPXQLW\3URPRWLRQV 6WUHHW0DLQWHQDQFH %XLOGLQJ6DIHW\ 6WUHHW5HVXUIDFLQJ 3XEOLF:RUNV 2WKHU([SHQGLWXUHV 7RWDO([SHQGLWXUHV (1) Public Safety is any combination of animal regulation, police services, community safety and traffic safety expenditures, this does not include the cost for Fire Services. Fire Services are reported in a different fund. (2) City Administration is any combination of community services, independent audit, City attorney, City clerk, City council, City manager, information technology, elections, finance, general services, human resources, insurance, legal special services, legislative advocacy and unemployment insurance expenditures. (3) Other Expenditures is any combination of acquisitions, committees, contributions, retiree health, planning & community development, economic development, marketing, interfund transfers, parks, recreation and culture, extraordinary loss and visitor center, capital outlay, special item, included in the transfer out is transfer to the Fire fund for its shortfall. (4) Public Works is a combination of curb & gutter, parking lot, auto fleet, corporate yard, public building maintenance, Portola Community center, storm water permit. 188Page 345 City of Palm Desert 6XSSOHPHQWDO*UDSK+LVWRULFDO*HQHUDO)XQG([SHQGLWXUHV ,QFOXGLQJ7UDQVIHUV2XW /DVW7HQ)LVFDO<HDUV (1) Public Safety is any combination of animal regulation, police services, community safety and traffic safety expenditures, this does not include the cost for Fire Services. Fire Services are reported in a different fund. (2) City Administration is any combination of community services, independent audit, City attorney, City clerk, City council, City manager, information technology, elections, finance, general services, human resources, insurance, legal special services, legislative advocacy and unemployment insurance expenditures. (3) Other Expenditures is any combination of acquisitions, committees, contributions, retiree health, planning & community development, economic development, marketing, interfund transfers, parks, recreation and culture, extraordinary loss and visitor center, capital outlay, special item, included in the transfer out is transfer to the Fire fund for its shortfall. (4) Public Works is a combination of curb & gutter, parking lot, auto fleet, corporate yard, public building maintenance, Portola Community center, storm water permit. )<)<)< )<)<)<)<)<)<)<2WKHU([SHQGLWXUHV&RPE 3XEOLF:RUNV &LW\$GPLQLVWUDWLRQ 3XEOLF6DIHW\ 189Page 346 This page intentionally left blank 190Page 347 City of Palm Desert 6XSSOHPHQWDO+LVWRULFDO*HQHUDO5HYHQXHDQG([SHQGLWXUHV3HU&DSLWD /DVW7HQ)LVFDO<HDUV )< 7RWDO*HQHUDO5HYHQXH 3RSXODWLRQ *HQHUDO5HYHQXH3HU&DSLWD )< 7RWDO*HQHUDO5HYHQXH 3RSXODWLRQ *HQHUDO5HYHQXH3HU&DSLWD )< 7RWDO*HQHUDO([SHQGLWXUHV 3RSXODWLRQ *HQHUDO([SHQGLWXUHV3HU &DSLWD )< 7RWDO*HQHUDO([SHQGLWXUHV 3RSXODWLRQ *HQHUDO([SHQGLWXUHV3HU &DSLWD (1) Population figures are as of January start of fiscal year. (2) Interfund Transfers In/Out, extraordinary loss (gain), and special item are not included in total. 6RXUFHV 3RSXODWLRQILJXUHVIURP6WDWH'HSDUWPHQWRI)LQDQFH&LW\RI3DOP'HVHUW)LQDQFH'HSDUWPHQW 191Page 348 City of Palm Desert $VVHVVHG9DOXHDQG(VWLPDWHG$FWXDO9DOXHRI7D[DEOH3URSHUW\ /DVW7HQ)LVFDO<HDUV Fiscal Year Ended June 30 Residential Property Commercial Industrial Property Institutional Property Vacant Land Less: Tax Exempt Total Taxable Assessed Value Total Direct Tax Rate Estimated Actual Taxable Value (1) 2021 12,277,100,484 2,872,316,290 65,652,944 279,025,011 *- 16,413,235,941 1.00000 16,217,619,993 2020 11,781,804,552 2,771,257,791 63,343,035 300,879,417 *(45,437) 15,835,758,806 1.00000 15,636,583,844 2019 11,231,546,199 2,675,659,205 62,224,633 373,347,796 (326,679,322) 15,556,158,170 1.00000 15,045,226,485 2018 10,757,283,204 2,554,854,761 59,762,684 388,457,449 (313,754,093) 14,940,671,116 1.00000 14,445,331,683 2017 10,555,732,091 2,434,816,656 58,318,962 379,073,252 (306,174,550) 14,579,740,457 1.00000 14,095,158,994 2016 10,174,360,142 2,358,860,033 56,840,001 412,090,006 (312,620,004) 14,210,000,198 1.00000 13,743,682,041 2015 9,636,181,445 2,290,456,630 54,211,991 420,142,932 (298,165,952) 13,552,997,813 1.00000 13,086,962,905 2014 9,043,372,632 2,247,924,054 64,595,519 426,330,424 (297,139,386) 12,919,103,760 1.00000 12,453,921,285 2013 8,621,493,305 2,239,836,432 62,565,263 462,982,950 (300,313,265) 12,513,052,693 1.00000 12,064,845,537 2012 8,694,403,021 2,198,729,088 50,256,665 452,309,984 (288,975,823) 12,564,166,215 1.00000 12,123,771,853 (1) Estimated Actual Taxable Value = Net Taxable Value Per HDL there was an artifact change in the Riverside County Assessors data that occurred primarily between 2018 and 2019, new vs old system differences, the few properties which are listed as having asssessed value and being non-taxable are either new to the roll or are newly non-taxable for 2019. Notes: Property Taxes in Riverside County are subject to the State of California's Proposition 13, Jarvis-Gann Initiative which allows reappraisals of real property only when there is a change in ownership or new construction takes place. Further, the proposition limits property assessment increase to no more than two(2%) percent annually. Property is assessed at one hundred percent (100%) of its fair market value at the time of new construction or change in ownership. The tax rate is one (1%) percent of the assessed value. Source: Riverside County Assessor thru HDL Coren & Cone 192Page 349 City of Palm Desert +LVWRULFDO1HW$VVHVVHG7D[DEOH9DOXHV&LW\ZLGH *UDSK$VVHVVHG9DOXDWLRQ*URZWK /DVW7HQ)LVFDO<HDUV Historical Major Additions Annexations FY Retail Centers FY Cook Street Area 88/89 Town Center Mall 83/84 Country Club #28 93/94 Desert Springs Marriott 86/87 Price Club/Costco 93/94 One Eleven Town Ctr 88/89 Palm Desert CC #29 94/95 Mervyn's Center 92/93 Palm Desert Greens 04/05 Desert Crossing 95/96 Suncrest 04/05 Lucky's/Albertson Deep Canyon 96/97 Remodel 111 Town Ctr (Best Buy)97/98 Gardens on El Paseo 98/99 Remodel Westfield Mall (Sears, Barnes & Noble) 04/05 Sears Automotive 04/05 Lowes Home Improvement 05/06 Walmart / Sam's Supercenters 05/06 Kohl's 07/08 Golfsmith Extreme 08/09 El Paseo Village 09/10 Best Buy & Ulta 11/12 Remodel Westfield Mall (Dick's/H&M/Restaurants) 12/13 PGA Tour Superstore 12/13 Total Wine & More 13/14 Tesla Motors 15/16 Source: Riverside County Assessor thru HDL Coren & Cone -4.60%-0.49% 3.22%5.08%5.02%2.56%2.48%4.15%3.93%3.72% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Percent Increase in Assessed Valuation FY 2012 to FY 2021 $- $5,000 $10,000 $15,000 $20,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Value in Millions Net Assessed Valuation - Historical Comparison FY 2012 to FY 2021 193Page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ity of Palm Desert is a No-Low Property Tax City and the 7% represents what the state allocates to No-Low Property Tax Cities. Source: County of Riverside, Property Tax Allocation Percentages, TRA 018-041. 194Page 351 &LW\RI3DOP'HVHUW 3URSHUW\7D[5DWHV 'LUHFWDQG2YHUODSSLQJ3URSHUW\7D[5DWHV /DVW7HQ)LVFDO<HDUV Fiscal Year Basic County-wide Levy Total Direct Tax Rate Desert Sands Unified School District Desert Community College Dist. Coachella Valley Water District Coachella Valley Water District I.D. 58 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Notes:Proposition 13 limits the ability of the city to raise the property tax rate. Source: CalMuni Statistics Inc &LW\'LUHFW 2YHUODSSLQJ5DWHV 195Page 352 &LW\RI3DOP'HVHUW 3ULQFLSDO3URSHUW\7D[SD\HUV &XUUHQWDQG7HQ<HDUV$JR 2021 2012 Taxpayer Taxable Assessed Value Percentage of Total City Tax Assessed Value Taxpayer Taxable Assessed Value Percentage of Total City Tax Assessed Value Marriott Desert Springs 182,745,861$ 1.12% WEA Palm Desert LP $139,236,279 1.15% WEA Palm Desert 162,659,297 1.00%Marriot Desert Springs 120,991,665 1.00% Gardens on El Paseo LLC 142,445,754 0.88%Desert Crossing II 88,765,211 0.73% WVC Rancho Mirage Inc 129,291,941 0.79%Gardens on El Paseo LLC 79,159,820 0.65% PRU Desert Crossing LLC 104,245,817 0.64%WVC Rancho Mirage Inc 74,133,255 0.61% CC Cimarron LP 69,278,290 0.43%Elisabeth E. Stewart 53,441,829 0.44% Bighorn Golf Club 59,824,020 0.37%Sinatra & Cook Project 52,743,562 0.43% First American Trust 59,112,000 0.36%Monarch Sevilla Venture 47,777,773 0.39% Walmart /Sams 55,610,121 0.34%Walmart Real Estate Business Trust 47,514,131 0.39% Segovia Operations 53,885,955 0.33%Time Warner Ent 46,583,074 0.38% Total 1,019,099,056$ 6.27%Total 750,346,599$ 6.17% Note:The estimated property tax revenue stated above is based upon net taxable values, tax ratios and base year values that impact the revenue calculation. As a result, parcels with the same assessed value that are assigned to different tax rate areas may contribute dissimilar amounts of total revenue to the City and Redevelopment Agency. Source: HdL Coren & Cone thru Riverside County Assessor 17/18 and HdL Coren & Cone thru Riverside County Assessor 08/09 196Page 353 &LW\RI3DOP'HVHUW 3URSHUW\7D[/HYLHVDQG&ROOHFWLRQV /DVW7HQ)LVFDO<HDUV Fiscal Year Taxes Levied Collections Ended for the Percentage in Subsequent Percentage June 30, Fiscal Year Amount of Levy Years (3)Amount (3)(4)of Levy 2012 5,478,345 4,366,451 79.70% 1,111,894 5,478,345$ 100.00% 2013 5,398,524 4,913,780 91.02% 484,744 5,398,524$ 100.00% 2014 5,623,740 5,048,787 89.78% 574,953 5,623,740$ 100.00% 2015 5,911,501 5,523,658 93.44% 387,843 5,911,501$ 100.00% 2016 6,212,993 5,943,252 95.66% 269,741 6,212,993$ 100.00% 2017 6,731,899 6,022,566 89.46% 182,652 6,205,218$ 92.18% 2018 6,729,952 6,553,297 97.38% 173,642 6,726,940$ 99.96% 2019 6,867,405 6,640,656 96.70% 207,894 6,848,550$ 99.73% 2020 7,202,939 6,502,032 90.27% 211,602 6,713,634$ 93.21% 2021 7,332,966 6,391,062 87.16% 256,431 6,647,493$ 90.65% (1) City of Palm Desert is on the "Teeter Plan" with the County of Riverside. The first payment was received in the fiscal year 1993/94. (2) City of Palm Desert is a "No-Low Property Tax City". Proposition 13 rolled the tax rates back to 1973 which is when the City of Palm Desert incorporated and the Property Tax rates were zero. Based on current state law the County allocates 7% of the 1% assessed values within the City less the Redevelopment Agency tax increment. Fiscal Year 1992/93 was the first year to receive the No/Low taxes. (3) Includes tax collections accrued as of June 30, 2021. (4) Includes amounts receivable for tax year 2020-2021 along with prior receivables due for prior tax years. Source: Riverside County Auditor Controller Office and City of Palm Desert Collected within the Fiscal Year of the Levy (1) (2) Total Collections to Date - 197Page 354 &LW\RI3DOP'HVHUW 6XSSOHPHQWDO7RS6DOHV7D[*HQHUDWRUV *UDSK+LVWRULFDO6DOHV7D[7UHQGV -XQH Top 25 Sales Tax Generators (1)Primary Economic Category A B C SUPPLY COMPANY SPECIALTY WHOLESALE STORES ALBERTSON'S FOOD CENTERS SUPERMARKETS ARCO-AM/PM MINI MARTS SERVICE STATIONS ARIZONA TILE SPECIALTY WHOLESALE STORES ASHLEY FURNITURE HOME FURNISHINGS BEST BUY STORES LP APPLIANCE / ELECTRONICS CARMAX AUTO SUPERSTORES AUTOMOBILE DEALER CONSOLIDATED ELECTRICAL DISTRIBUTORS SPECIALTY WHOLESALE STORES COSTCO WHOLESALE COMPANY WHOLESALE GENERAL STORES GOLF & TENNIS PRO SHOP MISCELLANEOUS RETAIL STORES LEEDS & SON JEWELERS DEPARTMENT STORES LOUIS VUITTON SPECIALTY WHOLESALE STORES LOWE'S HOME CENTERS BLDG. MATLS-WHSLE MACY'S DEPARTMENT STORES DEPARTMENT STORES MOBIL SERVICE STATIONS SERVICE STATIONS NORDSTROM RACK DEPARTMENT STORES RING ONLINE RETAIL SAKS FIFTH AVENUE DEPARTMENT STORES SAM'S CLUB WHOLESALE GENERAL STORES SHELL SERVICE STATIONS SERVICE STATIONS SIMPLOT SPECIALTY WHOLESALE STORES SUPERIOR POOL PRODUCTS SPECIALTY WHOLESALE STORES TARGET STORES DEPARTMENT STORES TOTAL WINE & MORE SUPERMARKETS WAL-MART SUPERCENTER DEPARTMENT STORES /LVWHGLQ$OSKDEHWLFDO2UGHU Note : Current California law prohibits production of individual tax information as an effort not to infringe on proprietary information, therefore confidential information which is protected by law is not disclosed. * The State of California exchanged Sales Tax Revenue with Property taxes, this amount represents the portion of sales tax that were exchanged. Source: SBOE Data, MuniServices LLC. In Lieu given to city from State ERAF Property Taxes, City of Palm Desert $7.0 $9.0 $11.0 $13.0 $15.0 $17.0 $19.0 $21.0 $23.0 $25.0 $27.0 2012201320142015201620172018201920202021Millions Sales and Use Tax Trends FY 2012 - 2021 -2.57%0.66% 15.1% -13.9% 7.9%5.9% 1.8% Amounts in Millions % = % Change from Prior Year 8.1% $15.836 $16.764 $17.258 $17.564 $18.994 $18.505 $18.627 $21.434 $18.445 $21.156 14.7% -In Lieu * 2.9% 198Page 355 City of Palm Desert Ratios of Outstanding Debt by Type Last Ten Fiscal Years Special Assessment/Total Percentage Total Debt Fiscal Local Obligation Capital Primary of Total Personal Per Year Bonds b,c,d Leases Government Income a,f Capita a,f 2012 9,238,000 2,291,358 11,529,358 0.47%241 2013 8,920,000 1,751,083 10,671,083 0.44%223 2014 8,246,000 1,222,915 9,468,915 0.39%198 2015 3,302,000 e 1,435,046 4,737,046 0.19% 99 2016 3,045,000 929,860 3,974,860 0.16% 83 2017 2,808,000 499,881 3,307,881 0.14% 69 2018 2,658,000 1,493,330 4,151,330 0.17% 87 2019 2,071,000 1,595,394 3,666,394 0.24% 128 2020 1,846,000 1,145,011 2,991,011 0.23% 105 2021 1,672,000 675,976 2,347,976 0.20% 92 a - Personal income, population and per capita information provided by California Department of Finance, and U.S Census Bureau and/or estimated by City Finance using 1% growth rate. b - Special Assessment Government Activities includes Highlands Undergrounding AD No# 04-01, as of June 30, 2021 the balance was $1.130M. c - Fiscal Year End 2009 the City issued the Energy Independence Program Limited Obligation Improvement Bonds Series 2009A (Taxable) $2.5 millio Energy Independence Loan Program. The actual Bond Issuance was for $2.015m. At June 30, 2021 the oustanding balance was $0.293M d - The City issued $1.136 million dollars of the Energy Independence Program (AB811 Assessments) Limited Obligation Improvement Bonds (Taxable) The special assessment collection will commence during the fiscal year 2010-2011. At June 30, 2021 the outstanding balance was $0.249M. e - In addition the Palm Desert Financing Authority issued $5.225 million dollars of the Energy Independence Program Variable Rate Demand Lease Revenue Bonds, Series 2009(Federally Taxable). On September 2, 2014 the bonds were called in full.as of June 30, 2017 their were no outstanding f - Personal income and Per Capita statistic includes government and business type activities combined. Governmental Activities Business Type Activities 199Page 356 &LW\RI3DOP'HVHUW 5DWLRVRI*HQHUDO%RQGHG'HEW2XWVWDQGLQJ /DVW7HQ)LVFDO<HDUV General Bonded Debt Outstanding Percentage of Actual Special Assessment Taxable Value of Per Bonds Property Capita Note: There is no General Obligation Bonds from FY 2012 to FY 2021 200Page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eserve Balances are as of 6/30/21. (2) Amount represents principal and interest collected during the FY 20/21 tax roll for Debt Service Payment due in FY 21/22. (3) Levied amounts reflect adjustments for construction funds, reserve funds, redemption funds and other adjustments. (4) Outstanding bond balance at June 30, 2021. (5) The schedule presents the information for each individual local obligation bonded district. Assessment Districts 94-3 Merano and 01-01 Silver Spur were refunded and obligated to pay Debt Service to Series 2003 Assessment Revenue Bonds see note 16 for additional information. Source: Wildan Financial Annual Report - 201Page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age 359 &LW\RI3DOP'HVHUW /HJDO'HEW0DUJLQ,QIRUPDWLRQ /DVW7HQ)LVFDO<HDUV Assessed Value 16,217,065,983$ Debt Limit (15% of Assessed Value) (1)2,432,559,897 Debt Applicable to Limit: General Obligation Bonds 1,130,000 Less: Amount set aside for repayment of general obligation debt - Total Debt Applicable to Limit - Legal debt margin 2,431,429,897$ 2012 2013 2014 2015 2016 Debt Limit 1,884,624,932 1,811,620,824 1,869,699,132 1,963,741,235 2,059,815,120 Total Net debt applicable to limit 1,624,000 1,589,000 1,526,000 1,489,000 1,451,000 Legal debt margin 1,883,000,932 1,810,031,824 1,868,173,132 1,962,252,235 2,058,364,120 Total net debt applicable to the limit as a percentage of debt limit 0.09%0.09%0.08%0.08%0.07% 2017 2018 2019 2020 2021 Debt Limit 2,114,442,742 2,167,115,649 2,256,723,736 2,345,639,686 2,432,559,897 Total Net debt applicable to limit 1,410,000 1,368,000 1,310,000 1,178,000 1,130,000 Legal debt margin 2,113,032,742 2,165,747,649 2,255,413,736 2,344,461,686 2,431,429,897 Total net debt applicable to the limit as a percentage of debt limit 0.07%0.06%0.06%0.05%0.05% (1) Section 43605 of the California Government Code. Source: California Municipal Statistic, Inc. San Francisco Legal Debt Margin Calculation for Fiscal Year 2021 FISCAL YEAR FISCAL YEAR 203Page 360 &LW\RI3DOP'HVHUW 3OHGJHG5HYHQXH&RYHUDJH /DVW7HQ)LVFDO<HDUV Special Special Fiscal Assessment Assessment Year Collections a,c Principal Interest Coverage Collections Principal Interest Coverage 2012 8,822,163 3,332,000 4,897,651 1.0720 32,941,958 e 15,290,000 17,651,958 1.000 2013 9,524,786 3,786,896 5,255,558 1.0533 33,473,418 e 16,315,000 17,158,418 1.000 2014 d 14,895,214 12,324,000 d 4,954,432 0.8621 38,444,447 e 23,650,000 14,794,447 1.000 2015 10,848,129 g 8,159,000 f 4,543,692 0.8540 32,294,255 e 18,295,000 13,999,255 1.000 2016 8,537,227 25,401,000 h 4,463,786 0.2859 34,810,024 e 18,055,000 16,755,024 1.000 2017 5,896,670 3,192,000 3,233,399 0.9177 37,535,680 e, i 16,255,000 e, i 21,280,680 1.000 2018 5,590,479 3,545,000 3,088,864 0.8427 23,428,001 e, i 14,235,000 e, i 9,193,001 1.000 2019 5,608,312 2,427,000 2,942,348 1.0445 25,986,960 e, i 17,210,000 e, i 8,776,960 1.000 2020 5,280,905 2,080,000 2,818,146 1.0781 27,833,500 e, i 19,475,000 e, i 8,358,500 1.000 2021 5,397,140 2,119,000 2,698,952 1.1202 25,215,056 e, i 17,330,000 e, i 7,885,056 1.000 Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. a - The City issued $2.015 million dollars of the Energy Independence Program (AB811 Assessments) Limited Obligation Improvement Bonds (Taxable) The special assessment collection will commence during the fiscal year 2009-2010 with the first interest payment paid on March 2, 2010. b - Tax increment bonds are backed by property tax increment based on calculation provided by the Riverside County tax assessor office. Additional information on tax increment can be found in the notes to the financial statements. c - The City issued $1.136 million dollars of the Energy Independence Program (AB811 Assessments) Limited Obligation Improvement Bonds (Taxable) The special assessment collection will commence during the fiscal year 2010-2011, in addition, the Palm Desert Financing Authority issued $5.225 million dollars of the Energy Independence Program Variable Rate Demand Lease Revenue Bonds, Series 2009 (Federally Taxable). Interest is paid monthly commencing August 2009 and Principal is paid annually on September 2. The first princiapl payment was paid on September 2, 2010 d- A portion of the $50.51 (2007) and $17.915 (2008) million CFD 2005-1 (University Park) was prepaid in the amount of $6.269 Million. The prepaid $6.269M and $2.280 (2004-1) were called during on September 2, 2014. e- The total amount payable for the bonded obligations is disbursed by the State of California Department of Finance to the City of Palm Desert Successor Agency. The annual collection equal the annual obligations. f The City called the $5.225 Million Energy Independence Program Variable Rate Demand Lease Revenue Bonds, Series 2009 (Federally Taxable) in full on September 2, 2014 in the amount of $4.485 Million. The Energy Fund used the remaining $5.225 Bond Funds in the amount of $2.155 Million in addition to the $2.5 Million loan from the City General Fund as proceeds to call the bonds. g The City of Palm Desert loaned the Energy Fund $2.5 Million to call the $5.225 Million Energy Independence Program Lease Revenue Bonds, Series 2009 (Federally Taxable). The $2.5 Million is included as Special Assessment Collections. h- During the Fiscal Year 2015-16 the Communities Facilities District 2005-1 (University Park Series, Special Tax Bonds Series 2006A and Series 2007 defeased $20.885M of the original issued $67.715M. i- During the Fiscal Year 2016-17 the Successor Agency issued four series of bonds (1) the Tax Allocation Refunding Bonds, 2017 Series A ($52.39M), (ii) Taxable Tax Allocation Refunding Bonds, 2017 Series B ($140.130M), Tax allocation Refunding Bonds, 2017 Series H-A ($7.365M), and (iv) Taxable Tax Allocation Refunding Bonds, 2017 H-B ($45.815M). See Note 18 Tax Allocation Bonds. The 2017 Refunding Bonds refunded all of the tax allocation revenue bonds; with the exception of the Project Area No. 1 2007A Bonds, and the Project Area No. 2 2003 Bonds. Tax Increment b Debt ServiceDebt Service Special Assessment Bonds - 204Page 361 &LW\RI3DOP'HVHUW 'HPRJUDSKLFDQG(FRQRPLF6WDWLVWLFV /DVW7HQ&DOHQGDU<HDUV Calendar Percentage Per Capita City Riverside Percentage County Year City Increase Personal Personal Unemployment County Increase Unemployment End Population (Decrease)Income CY a Income CY Rate b Population (Decrease)Rate b 2021 53,892 1.71% 2,960,364,477$ 54,931$ 7.40% 2,454,453 0.50% 8.00% 2020 52,986 -1.19% 2,916,615,248$ 55,045$ 17.20% 2,442,304 0.09% 14.70% 2019 53,625 1.62% 2,873,512,560$ 53,585$ 4.90% 2,440,124 1.00% 4.40% 2018 52,769 4.00% 2,831,046,858$ 53,650$ 5.00% 2,415,955 1.31% 4.80% 2017 50,740 2.85% 2,789,208,727$ 54,971$ 4.00% 2,384,783 1.57% 5.70% 2016 49,335 -3.37% 2,747,988,894$ 55,701$ 4.20% 2,347,828 1.71% 6.70% 2015 51,053 1.26% 2,707,378,221$ 53,031$ 4.60% 2,308,441 1.25% 6.50% 2014 50,417 0.94% 2,667,367,705$ 52,906$ 4.90% 2,279,967 1.10% 8.40% 2013 49,949 0.97% 2,627,948,478$ 52,613$ 6.00% 2,255,059 1.23% 10.20% 2012 49,471 0.73% 2,589,111,801$ 52,336$ 7.74% 2,227,577 0.44% 11.99% a - Personal Income estimated based on average growth rate of previous four years. The growth rate factor used was 1.5%. Income data will be updated once the actual data is available. b - Unemployment rate for fiscal year 20/21 is based on annual information from State of California Employment Development Department Labor Market Information Division (not seasonally adjusted) Sources: State Department of Finance, State Employment Development Department 205Page 362 &LW\RI3DOP'HVHUW 3ULQFLSDO(PSOR\HUV &XUUHQWDQG7HQ<HDUV$JR Employer Employees Rank Percentage of Total City Employment Employer Employees Rank Percentage of Total City Employment JW Marriot-Desert Springs Resort & DS Villas 2,304 1 10.02% JW Marriot-Desert Springs Resort & DS Villas 2,304 1 8.65% Universal Protection Services 1,500 2 6.52% Universal Protection Services 1,500 2 5.63% Securitas-Security Service USA 700 3 3.04% Guthy Renker Corp.825 3 3.10% Avida Caregivers 550 4 2.39% Securitas-Security Service USA 700 4 2.63% Organization of Legal Pro's 501 5 2.18% Macy's 301 5 1.13% Sunshine Landscape 500 6 2.17% Bighorn Golf Club 250 6 0.94% Costco Wholesale 250 7 1.09% Costco 250 7 0.94% Bighorn Golf Club 250 8 1.09% Desert ARC 250 8 0.94% Yellow Cab of Desert 160 9 0.70% Westin-Desert Willow 248 9 0.93% Whole Foods Market 150 10 0.65% Time Warner Cable 236 10 0.89% Totals 6,865 30%Totals 6,864 26% Sources: CA Employment Development Department - Federal and State Government not included * Data based on prior years numbers, at the time of preparation data was not available. 2020*2012 206Page 363 &LW\RI3DOP'HVHUW 6XSSOHPHQWDO0LVFHOODQHRXV6WDWLVWLFV -XQH City/ Municipal Government Form of Government:Council - City Manager/Charter City Date of Incorporation:November 26, 1973 Number of Employees:112 Full-time Employees Size of City:26.96 Square Miles Geographic Location:Located 117 miles east of Los Angeles and 515 miles south of San Francisco. Streets:170 paved street miles Number of Business Licenses:7,093 active business licenses Number of Hotels & Rooms: 18 hotels, 2,726 rooms CONTRACT SERVICES: Police Department Contract with Riverside County Sheriff - 70 positions plus 9 support staff Fire Department Contract with Riverside County/State Fire 49 positions plus 12 Fire Prevention staff Animal Control Riverside County Animal Services Water & Sewer Coachella Valley Water District Trash Collection Burrtec - Waste Management Electric Southern California Edison Gas Southern California Gas Telephone Verizon Airport Palm Springs International Airport Public Education Elementary School (grades K - 5) 4 Middle School (grades 6 - 8)1 High School (grades 9 - 12)1 Community College - College of the Desert 1 CSUSB - Palm Desert Campus 1 UCR - Palm Desert Graduate Center 1 Insurance Coverage General Liability Coverage Calif. Joint Powers Insurance Authority $50 Million/Event (Excludes Earthquake & Flood)Excess Coverage: from $2 Million up to $50 Million limit Special Events Calif. Joint Powers Insurance Authority $1 Million Worker's Compensation Calif. Joint Powers Insurance $10 Million Property Insurance Calif. Joint Powers Insurance Based on Prop. Value Health Insurance Medical California PERS; choice of PPO, HMO, Kaiser, Blue Shield Dental Delta Dental Vision Vision Service Plan Disability Insurance Disability - The Hartford Insurance Company Life The Hartford Insurance Company Retirement California PERS - Public Employees' Retirement System Source: City of Palm Desert 207Page 364 &LW\RI3DOP'HVHUW )XOOWLPH(TXLYDOHQW&LW\*RYHUQPHQW(PSOR\HHVE\)XQFWLRQ3URJUDP /DVW7HQ)LVFDO<HDUV Function / Program 2021 2020 2019 2018 2017 2016 2015 2014 2013 a 2012 a,b General Government City 33 33 31 31 32 32 34 34 33 26 Economic Dev & Housing b 11 11 11 10 11 13 13 13 12 17 Public Safety 30 30 28 29 29 28 26 25 24 24 Police & Fire (1) 140 174 172 179 170 163 169 173 157 162 Public Works 38 38 39 39 39 40 40 40 38 40 Totals 252 286 281 288 281 276 282 285 264 269 (1) The City operates as a "contract city" utilizing, primarily, agreement with other governmental entities, private firms and individuals to provide services. Contracted services include: Police and Fire protection through the County of Riverside, Cal-Fire, animal control, health services, legal services and landscape maintenance. a - As of June 2011 realignments were made due to budget cuts, retirements and layoffs, these continued to FY 2013. b - On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. Source: City of Palm Desert Financial Plan, California Department of Forestry and Fire Protection, Riverside County Sheriff's Department 208Page 365 &LW\RI3DOP'HVHUW 2SHUDWLQJ,QGLFDWRUVE\)XQFWLRQ3URJUDP /DVW7HQ)LVFDO<HDUV Function / Program 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 General Government Business License Inspections ******24 33 196 477 Contracted Services - Burrtec Waste (1) Refuse Collected (tons)60,226 58,096 59,154 56,346 54,301 52,772 54,865 57,935 52,131 49,205 Recyclables Collected 20,964 21,772 27,391 28,119 26,651 23,818 24,611 26,424 24,862 23,588 Public Safety Physical Arrests 1,066 621 758 1,654 1,620 1,284 1,946 1,348 986 1,012 Parking Violations 780 899 375 575 587 712 794 386 198 569 Traffic Violations 2,070 1,392 3,525 7,012 6,939 6,223 5,525 5,284 5,080 6,216 Emergency Responses-Fire Department 9,701 15,088 10,009 9,984 9,617 9,285 8,628 8,235 7,907 7,151 Fires Extinguished 104 147 93 90 68 103 88 106 104 101 Fire Inspections #3,372 5,397 3,378 1,274 2,118 2,989 2,552 3,048 5,235 Building Permits Issued 3,651 3,118 3,912 3,644 4,734 4,704 4,909 5,552 4,548 3,448 Building Inspections Conducted 13,451 13,439 13,965 18,601 23,542 24,756 24,057 24,830 19,107 14,749 Public Works Street Resurfacing (miles) (3)1.83 16.9 31.6 7.3 25.8 2.9 8 34 23 60 Parks, recreation & culture Athletic Field Permits Issued 2,262 643 2,990 2,934 3,197 2,997 4,430 6,548 2,635 3,682 Amphitheater / Pavilions Permits Issued 244 6 119 121 106 104 283 247 128 266 Community Center Admissions 15,577 9,746 52,203 60,769 51,694 64,493 53,426 50,204 53,062 69,240 Aquatic Center Admissions (2)38,249 32,905 52,102 53,739 58,023 60,359 64,103 43,545 48,663 45,909 (1) The City operates as a "contract city" utilizing, primarily, agreement with other governmental entities, private firms and individuals to provide services. Contracted services include: Police and Fire protection through the County of Riverside, animal control, health services, legal services and landscape maintenance. (2) Aquatic Center operations began in June 2011, managed by the YMCA. (3) New methods of street resurfacing have improved efficiency, therefore equaling more miles resurfaced. (*) Per Building & Safety Department business license inspections are no longer done. (#) City discontinued the City Fire Marshal services and contracted with the County for State mandated inspections only. Sources: Riverside County Sheriff's Dept., California State Department of Forestry & Fire Protection, City of Palm Desert, Coachella Valley Recreation & Park District, Burrtec Waste and The YMCA. 209Page 366 &LW\RI3DOP'HVHUW &DSLWDO$VVHW6WDWLVWLFVE\)XQFWLRQ3URJUDP /DVW7HQ)LVFDO<HDUV Function / Program 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 General Government Contracted Services (1) Collection trucks 29 25 25 24 24 35 30 30 36 36 Public Safety - Police & Fire Police Stations 1111111111 Police Sub Stations 1111111110 Patrol Units-Cars 26 27 29 30 29 29 29 26 28 31 Patrol Units-Motorcycles 776991110101010 Fire Stations 3333333333 Fire Trucks 5 plus 2 reserve 4 plus 1 reserve 4 plus 1 Reserve 4 plus 1 Reserve 4 plus 1 Reserve 4 plus 1 Reserve 4 plus 1 Rsrvd 4 plus 1 Rsrvd 4 plus 2 Rsrvd 4 plus 2 Rsrvd Ambulance 4 plus 3 reserve 4 plus 3 reserve 4 plus 3 Reserve 4 plus 3 Reserve 4 plus 3 Reserve 4 plus 3 Reserve 4 plus 3 Rsrvd 4 plus 3 Rsrvd 4 plus 1 Rsrvd 4 plus 1 Rsrvd Fire Prevention Pick-ups - 2.5 4 3 3 3 3333 Public Works Streets (miles)170 170 170 170 170 170 170 170 170 174 Traffic Signals 99 99 99 99 99 98 98 98 98 98 Parks, recreation & culture Acreage 201 201 201 201 201 201 201 201 201 201 Total Parks 13 13 13 13 13 13 13 13 13 13 Playgrounds 16 16 16 16 16 16 16 16 16 16 Baseball/softball diamonds 8888888888 Soccer/football fields 9999999999 Basketball Courts 11 11 11 11 11 11 11 11 11 11 Tennis Courts 10 10 10 10 10 10 10 10 10 10 Volleyball Courts 8888888888 Community Centers 2222222222 Skateboard Parks 2222222222 Aquatic Center 1111111111 Commercial Office Space (Parkview Office Complex) Leasable Space (square feet)50,322 50,322 50,322 50,322 50,322 50,322 50,322 50,322 50,322 50,322 Occupancy Rate 84%91%91%82%84%90%90%86%88%83% Number of Tenants by Type Government (State, local regional)77777989810 Non-Profit 4443343445 Private 3332311453 Square Footage lease by tenant Government (State, local regional)31,607 31,607 31,607 30,907 32,287 33,127 30,907 31,921 31,321 32,021 Non-Profit 7,339 7,341 6,621 4,061 4,061 3,561 6,269 3,294 4,467 5,215 Private 3,083 6,693 7,468 6,218 6,938 8,688 8,025 8,025 8,513 4,310 Vacant 8,293 4,681 4,626 9,136 8,416 4,946 5,121 7,082 6,021 8,776 Municipal Golf Course (Desert Willow Golf Resort) Courses - Fire Cliff and Mountain View 2222222222 Holes 36 36 36 36 36 36 36 36 36 36 Golf Carts 172 172 172 172 172 172 172 172 172 172 Clubhouse square footage 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 Rounds per Course Fire Cliff 47,695 38,057 48,646 46,620 39,424 39,366 44,845 45,841 45,645 45,005 Mountain View 49,005 35,332 43,523 43,712 39,931 40,910 42,407 43,160 38,669 41,666 Total Annual Rounds 96,700 73,389 92,169 90,332 79,355 80,276 87,252 89,001 84,314 86,671 (1) The City operates as a "contract city" utilizing, primarily, agreement with other governmental entities, private firms and individuals to provide services. Contracted services include: Police and Fire protection through the County of Riverside, animal control, health services, legal services and landscape maintenance. Sources: Riverside County Sheriff's Dept., California State Department of Forestry & Fire Protection, City of Palm Desert, Coachella Valley Recreation & Park District, Burrtec Waste 210Page 367 Note: This section is not required by GASB No. 44, however, City believes that statistical information is beneficial to the reader. On February 1, 2012 the State of California dissolved the City of Palm Desert Redevelopment Agency as part of the Statewide dissolution of all City Redevelopment Agencies, which in turn created the Successor Agency to the Redevelopment Agency of the City of Palm Desert. For more information on the dissolution of the RDA please see note 19 and note 20. 6XSSOHPHQWDO5HGHYHORSPHQW$JHQF\6WDWLVWLFDO6HFWLRQ &LW\RI3DOP'HVHUW&DOLIRUQLD 211Page 368 6XFFHVVRU AgencyProject Areas COOK STMONTEREY AVEFRED WARING DR PORTOLA AVEHOVLEY LN E STATE HWY 111 STATE HWY 74FRANK SINATRA DR EL PASEO GERALD FORD DR WASHINGTON STELDORADO DRWARNER TRLHOVLEY LN W OASIS CLUB DRTA MARISK RO W D RCALIFO R N IAAVESAN PABLO AVEPARK VIEW DR MESA VIEW DR DEEP CANYON RDMAGNESIA FALLS DR DINAH SHORE DR COOK STHAYSTACK RDTOWNCENTERWAYMONTEREY AVEP O R TO L A AVEPORTOLA AVEGRAPEVINE STSHADOWMOUNTAIN DR FAIRWAY DR HOVLEY LN EPORTOLA AVEFRED WARING DR COUNTRY CLUB DR FRANK SINATRA DRPORTOLA AVECOUNTRY CLUB DR MONTEREY AVECOOK STIN T E R S T A T E H W Y 1 0 IN T E R S T AT E H W Y 1 0 Project Area No. 1 Original 1975 Project Area No. 1 Added Territory 1982 Project Area No. 3 1991 Project Area No. 2 1987 Project Area No. 4 1993 0120.5 Miles Project Area No. 1 - Original (1975) Project Area No. 1 - Added Territory (1982) Project Area No. 2 (1987) Project Area No. 3 (1991) Project Area No. 4 (1993) City Limits City of Palm Desert July, 2004January 2021 212Page 369 City of Palm Desert Redevelopment Agency Tax Allocation Bond Issue Information June 30, 2021 '(6&5,37,21 7D[$OORFDWLRQ 5HYHQXH %RQG <HDUV %RQG,VVXH'DWH )LQDO0DWXULW\'DWH +LJKHVW,QWHUHVW5DWH %RQG,VVXH$PRXQW 2XWVWDQGLQJ%RQG$PRXQW &DOO3UHPLXP %RQG,QVXUHU 0%,$ 5HVHUYH5HTXLUHPHQW 5HVHUYH%DODQFH &DOOHG%RQGV 3ULQFLSOH'XH ,QWHUHVW'XH $UEULWDJH<LHOG5DWH $UEULWDJH$PRXQW2ZHG $UEULWDJH)LYH<HDU'XH'DWH '(6&5,37,21 1RQ+RXVLQJ 7D[$OORFDWLRQ %RQG ([HPSW 1RQ+RXVLQJ 7D[$OORFDWLRQ %RQG 7D[DEOH <HDUV %RQG,VVXH'DWH )LQDO0DWXULW\'DWH +LJKHVW,QWHUHVW5DWH %RQG,VVXH$PRXQW 2XWVWDQGLQJ%RQG$PRXQW &DOO3UHPLXP %RQG,QVXUHU %$0 %$0 5HVHUYH5HTXLUHPHQW 5HVHUYH%DODQFH &DOOHG%RQGV 3ULQFLSOH'XH ,QWHUHVW'XH $UEULWDJH<LHOG5DWH $UEULWDJH$PRXQW2ZHG $UEULWDJH)LYH<HDU'XH'DWH '(6&5,37,21 +RXVLQJ 7D[$OORFDWLRQ %RQG ([HPSW +RXVLQJ 7D[$OORFDWLRQ %RQG 7D[DEOH <HDUV %RQG,VVXH'DWH )LQDO0DWXULW\'DWH +LJKHVW,QWHUHVW5DWH %RQG,VVXH$PRXQW 2XWVWDQGLQJ%RQG$PRXQW &DOO3UHPLXP %RQG,QVXUHU %$0 %$0 5HVHUYH5HTXLUHPHQW 5HVHUYH%DODQFH &DOOHG%RQGV 3ULQFLSOH'XH ,QWHUHVW'XH $UEULWDJH<LHOG5DWH $UEULWDJH$PRXQW2ZHG $UEULWDJH)LYH<HDU'XH'DWH $VXUHW\ERQGZDVLVVXHGE\0%,$,QVXUDQFHIXWXUHUHVHUYHEDODQFH VZLOOEH]HUR 5HIXQGHG3$WD[H[HPSWSRUWLRQRIERQGV 0 0 0000000 0DQG 0 5HIXQGHG3$WD[DEOHSRUWLRQRIERQGV 0 0 0000000 0DQG 0 5HIXQGHG+RXVLQJWD[H[HPSWSRUWLRQRIERQGV 0DQG0 5HIXQGHG+RXVLQJWD[DEOHSRUWLRQRIERQGV 0DQG0 6RXUFH &LW\RI3DOP'HVHUWDQG6XFFHVVRU$JHQF\WRWKH3DOP'HVHUW5HGHYHORSPHQW$JHQF\ 213Page 370 &LW\RI3DOP'HVHUW +LVWRULFDO7D[,QFUHPHQW 5HGHYHORSPHQW3URSHUW\7D[7UXVW)XQG6XPPDU\ $OO3URMHFW$UHDV 3URMHFW$UHD1R)< )< )< )< )< )< )< )< )< )< *URVV7D[,QFUHPHQW /HVV +RXVLQJ6HW$VLGH 6% *URVV3DVV7KURXJKV 1HW7D[,QFUHPHQW RPTTF Amount Deposited 29,927,559 26,848,203 25,090,381 26,530,801 24,696,424 25,131,004 19,923,194 20,331,658 21,672,933 21,069,258 3URMHFW$UHD1R)< )< )< )< )< )< )< )< )< )< *URVV7D[,QFUHPHQW /HVV +RXVLQJ6HW$VLGH 6% *URVV3DVV7KURXJKV 1HW7D[,QFUHPHQW RPTTF Amount Deposited 7,503,009 7,568,241 7,017,531 5,441,721 5,547,427 5,887,814 5,516,674 5,629,776 6,106,095 6,005,764 3URMHFW$UHD1R)< )< )< )< )< )< )< )< )< )< *URVV7D[,QFUHPHQW /HVV +RXVLQJ6HW$VLGH 6% *URVV3DVV7KURXJKV 1HW7D[,QFUHPHQW RPTTF Amount Deposited 2,088,587 1,491,532 1,357,678 1,237,930 1,290,623 1,295,156 1,422,709 1,451,877 1,563,906 1,519,617 3URMHFW$UHD1R)<)< )< )< )< )< )< )< )< )< *URVV7D[,QFUHPHQW /HVV +RXVLQJ6HW$VLGH 6% *URVV3DVV7KURXJKV 1HW7D[,QFUHPHQW RPTTF Amount Deposited 3,910,755 4,064,105 3,675,440 3,071,966 2,443,507 2,610,660 4,834,978 4,934,105 5,301,405 5,164,761 )RUFDOFXODWLRQSXUSRVHVRQO\1RUHTXLUHPHQWWRGHSRVLW+RXVLQJ6HW$VLGHSRVW5HGHYHORSPHQW'LVVROXWLRQ 214Page 371 City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 760-346-0611 ȃȃȃ˘ǯǵȀȅǻDzǼǭǸǹǰDZǿDZǾȀ˘ǻǾdz Page 372 December 20, 2021 To the Honorable Mayor and Members of the City Council City of Palm Desert, California We have audited the financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Palm Desert, California (the City) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our let ter to you dated December 20, 2021. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings and Other Issues Qualitative Aspects of Significant Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. As described in Note 22 to the financial statements, the City changed accounting policies related to recording of the fiduciary funds by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities, in year ended June 30, 2021. Accordingly, the cumulative effect of the acc ounting change as of the beginning of the year is reported in the Statement of changes in fiduciary net position. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were: Management’s estimates of its net pension liability and net other post-employment benefits asset based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability and net other post-employment benefit asset in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 Page 373 To the Honorable Mayor and Members of the City Council City of Palm Desert, California Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Circumstances that Affect the Form and Content of the Auditor’s Report New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements. This standard updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities. Management Representations We have requested certain representations from management that are included in the mana gement representation letter dated December 20, 2021. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the management discussion and analysis, budgetary comparison schedule for the General Fund, major special revenue funds as listed in the table of contents, schedule of changes in net pension liability and related ratios, schedule of plan contributions - Pension, schedule of changes in net OPEB Liability/(Asset) and related ratios, and schedules of plan contributions – OPEB, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. Page 374 To the Honorable Mayor and Members of the City Council City of Palm Desert, California We were engaged to report on the combining statements and individual nonmajor fund statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information co mplies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory or statistical section, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. New Accounting Standards The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit: GASB Statement No. 84, Fiduciary Activities. GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61. GASB Statement No. 98, The Annual Comprehensive Financial Report. The following Governmental Accounting Standards Board (GASB) pronouncements are effective in the following fiscal year audit and should be reviewed for proper implementation by management: Fiscal year 2022 GASB Statement No. 87, Leases. GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. Fiscal year 2023 GASB Statement No. 91, Conduit Debt Obligations. Restriction on Use This information is intended solely for the use of city council and management of the City of Palm Desert and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Brea, California Page 375 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council City of Palm Desert, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Palm Desert, California (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 20, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with cert ain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 Page 376 To the Honorable Mayor and Members of the City Council City of Palm Desert, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Brea, California December 20, 2021 Page 377 Page 378 Page 379 Page 380 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\Measure A Staff Report\SR - Council audit 2021 Measure A.docx STAFF REPORT CITY OF PALM DESERT FINANCE DEPARTMENT MEETING DATE: February 24, 2022 PREPARED BY: Mitchell Arbaugh, Accounting Specialist REQUEST: Receive and file the Independent Accountants’ Report on Agreed-Upon Procedures Performed on the Measure A Transportation Fund for the fiscal year ended June 30, 2021 Recommendation By Minute Motion, that the City Council receive and file the Independent Accountants’ Report on Agreed-Upon Procedures Performed on the Measure A Transportation Fund for the fiscal year ended June 30, 2021. Strategic Plan Objective Not applicable. Committee Recommendation The Finance Committee received the Independent Accountants’ Report at their February 22, 2022 meeting, and recommended that the report be received and filed by the City Council. Background The Measure A fund is a special revenue fund that was created to keep track of funds received by the Riverside County Transportation Commission. In 1988, Riverside County voters approved a half cent sales tax, known as Measure A, to fund a variety of highway improvements, local streets and roads maintenance, commuter assistance and specialized transit projects. Conrad LLP performed the procedures which were agreed to by the Riverside County Transportation Commission, Riverside, California (RCTC) solely to assist RCTC with respect to an evaluation of the City of Palm Desert’s Measure A Transportation Fund and degree of the City’s compliance with RCTC requirements for the year ended June 30, 2021. Staff requests that the Council receive and file the Independent Accountants’ Report on Agreed- Upon Procedures Performed on the Measure A Transportation Fund for the fiscal year ended June 30, 2021. Page 381 Staff Report Approval of Report on Procedures for Measure A Fund for Fiscal Year ended June 30, 2021 February 24, 2022 Page 2 of 2 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\Measure A Staff Report\SR - Council audit 2021 Measure A.docx Fiscal Impact There is no fiscal impact associated with this action. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Jose Luis Espinoza Jose Luis Espinoza Deputy Director of Finance Jose Luis Espinoza Jose Luis Espinoza Deputy Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager: L. Todd Hileman: L. Todd Hileman ATTACHMENTS: Independent Accountants’ Report on Agreed-Upon Procedures Page 382 Page 383 Page 384 Page 385 Page 386 Page 387 Page 388 Page 389 Page 390 Page 391 Page 392 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\PDRFC Staff Report\0. SR - Council audit 2021 PDRFC (2).docx STAFF REPORT CITY OF PALM DESERT FINANCE DEPARTMENT MEETING DATE: February 24, 2022 PREPARED BY: Anthony Hernandez, Accounting Manager REQUEST: Receive and File the Palm Desert Recreational Facilities Corporation audited financial reports for the fiscal year ended June 30, 2021 Recommendation By Minute Motion, that the City Council receive and file the audited financial statements of the Palm Desert Recreational Facilities Corporation (PDRFC) for the fiscal year ended June 30, 2021. Strategic Plan Objective Not applicable. Committee Recommendation The Finance Committee received the audited financial statements for the PDRFC at their February 22, 2022, meeting, and recommended that the statements for the fiscal year ended June 30, 2021 be received and filed by the City Council. Background The Palm Desert Recreational Facilities Corporation is a corporation that provides food and beverage services exclusively to the Desert Willow Golf Resort. Lance, Soll & Lunghard, LLP performed and completed the annual independent audit for the fiscal year ended June 30, 2021. In the auditor’s opinion, the basic financial statements present fairly, in all material respects, the financial position of the PDRFC as of June 30, 2021, and the results of its operations of the year then ended are in conformity with accounting principles generally accepted in the United States of America. In conducting the audit, the auditors are also required to test the PDRFC’s internal controls. Attached is the report issued by the auditors for the year ended June 30, 2021. Staff requests that the Council receive and file the Palm Desert Recreational Facilities Corporation’s audited financial reports for the fiscal year ended June 30, 2021. Page 393 Staff Report Receive and file PDRFC reports for Fiscal Year ended June 30, 2021 February 24, 2022 Page 2 of 2 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\PDRFC Staff Report\0. SR - Council audit 2021 PDRFC (2).docx Fiscal Impact There is no fiscal impact associated with this action. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Jose Luis Espinoza Jose Luis Espinoza Deputy Director of Finance Jose Luis Espinoza Jose Luis Espinoza Deputy Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager: L. Todd Hileman: L. Todd Hileman CONTENTS: Palm Desert Recreational Facilities Corporation Audited Financial Report for Fiscal Year Ended June 30, 2021, and the Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Page 394 PALM DESERT RECREATIONAL FACILITIES CORPORATION FISCAL YEAR ENDED JUNE 30, 2021 ANNUAL FINANCIAL REPORT WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PRUBLIC ACCOUNTANTS Page 395 PALM DESERT RECREATIONAL FACILITIES CORPORATION ANNUAL FINANCIAL REPORT WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS June 30, 2021 Page Number Independent Auditors’ Report 1 Management’s Discussion and Analysis 4 Basic Financial Statements: Statement of Net Position 10 Statement of Revenues, Expenses and Changes in Net Position 11 Statement of Cash Flows 12 Notes to Basic Financial Statements 13 Independent Auditors’ Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 18 Page 396 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 INDEPENDENT AUDITORS’ REPORT To the Board of Directors Palm Desert Recreational Facilities Corporation City of Palm Desert, California Report on the Financial Statements Opinions We have audited the accompanying financial statements of the Palm Desert Recreational Facilities Corporation (the Corporation), a component unit of the City of Palm Desert, California, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Corporation’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Palm Desert Recreational Facilities Corporation (the Corporation), a component unit of the City of Palm, California, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Corporation and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Corporation’s ability to continue as a going concern for twelve months beyond the date of the financial statements. Page 397 To the Board of Directors Palm Desert Recreational Facilities Corporation City of Palm Desert, California Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with the GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsible to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate tin the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. According, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Corporation’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Other Reporting Responsibilities Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2Page 398 To the Board of Directors Palm Desert Recreational Facilities Corporation City of Palm Desert, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 7, 2022 on our consideration of the Corporation’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Corporation’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Corporation’s internal control over financial reporting and compliance. Brea California February 7, 2022 3Page 399 PALM DESERT RECREATIONAL FACILITIES CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS See independent auditors’ report. June 30, 2021 Our discussion and analysis of the financial performance of the Palm Desert Recreational Facilities Corporation (the Corporation), a component unit of the City of Palm Desert, provides an overview of the Corporation’s financial activities for the fiscal year ended June 30, 2021. Please read it in conjunction with the Palm Desert Recreation Facilities Corporation’s financial statements. FINANCIAL HIGHLIGHTS Palm Desert Recreational Facilities Corporation’s net position deficit increased by $161,652 from $899,697 to $1,061,349. Palm Desert Recreational Facilities Corporation’s gross income of $2,181,902 decreased by $34,817 (16%) from the previous year. Palm Desert Recreational Facilities Corporation’s gross profit decreased by $81,734 (5%) from last year. The gross profit margin1 decreased to 67%. Palm Desert Recreational Facilities Corporation’s cost of goods sold increased by $46,917 from $667,594 to $714,511. Palm Desert Recreational Facilities Corporation’s Selling and Administrative Expense Percentage2 decreased from 77% to 75%. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position (on pages 9 and 10) provide information about the activities of the Palm Desert Recreational Facilities Corporation as a whole and present a long- term view of the Corporation’s operations. 1 The gross profit margin is calculated by dividing gross profit by gross sales. The gross profit margin indicates how well sales are performing when compared to expectations and the industry. The corporation expected an industry gross profit margin of approximately 68%. 2 The selling and administrative expense percentage is calculated by dividing the sum of the Maintenance & Operations and the General & Administrative costs by the gross sales. This percentage indicates how well the corporation’s overhead is maintained in relation to sales. The goal is to arrive at overhead cost of approximately 64% or lower. 4Page 400 PALM DESERT RECREATIONAL FACILITIES CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS See independent auditors’ report. REPORTING THE COMPONENT UNIT AS A WHOLE The Statement of Net Position and the Statement of Revenues, Expenses and Changes in Net Position: Our analysis of the Palm Desert Recreational Facilities Corporation as a whole begins on page 9. The Corporation plays an independent, yet vital role in completing the overall project known as Desert Willow Golf Resort (a municipal golf course owned by the City of Palm Desert). The Corporation’s only function is to provide the Food and Beverage operations at the Desert Willow Clubhouse. The restaurant operation within the environment of the golf industry is a necessary complement to a round of golf. The main focus of our analysis of the Palm Desert Recreational Facilities Corporation’s operations is the profitability of the food and beverage activities and tailoring the restaurant to meet the expectations of all golf enthusiasts alike. What is the outcome for the food & beverage operations for this fiscal year? The Statement of Net Position and the Statement of Revenues, and the Expenses and Changes in Net Position report information about the Component Unit as a whole and about its activities. This report along with the financial highlights, noted above, illustrates the operations and the profitability of the food and beverage activities. These statements include all assets and liabilities of the Corporation using the accrual basis of accounting. With the accrual basis of accounting, all of the current year’s revenues are recognized when earned instead of received, and all expenses are recorded when incurred instead of when paid. These two statements report the Palm Desert Recreational Facilities Corporation’s net position and changes in net position. Net position is the difference between assets and liabilities, which is one way to measure the Corporation’s financial health, or financial position. Over time, increases or decreases in the Corporation’s net position is an indication of whether its financial health is improving or deteriorating. To determine the profitability of the Corporation, consideration should also be given to other non-financial factors such as the changes in consumer spending as a direct result of the overall economic indicators, as well as changes in the significant industry factors such as price per golf round and level of tourism. THE COMPONENT UNIT AS A WHOLE The Palm Desert Recreational Facilities Corporation’s net position deficit increased by $161,652 from $899,697 to $1,061,349. The food and beverage operations again endured multiple restrictions and closures throughout fiscal year 2021 due to COVID-19. Banquet events and organized group gatherings were extremely limited for the entire year having the largest impact on revenues. The restaurant was cycled through restrictions ranging from outdoor dining only to a full closure during the December Stay-at-Home order from the state of California. The various closures and restrictions directly impacted the operations resulting in the increase to the deficit in net position. 5Page 401 PALM DESERT RECREATIONAL FACILITIES CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS See independent auditors’ report. The restaurant operations recognized a 16% decrease in gross revenues and a net decrease in overall expenditures of 15%. In response to the State mandated closure there was a decline in the Group outing and banquet events given the restrictions imposed on restaurants in California. The reduction in expenditures was directly related to reduced personnel costs associated with the closure of the restaurant. Our analysis below focuses on the Net Position (Table 1) and Changes in Net Position (Table 2) of the Corporation. Table 1 Condensed Statements of Net Position Fiscal Fiscal Year Year 2021 2020 Assets: Current assets $ 959,101 $ 509,588 Total Assets 959,101 509,588 Liabilities: Other liabilities 2,020,450 1,409,285 Total Liabilities 2,020,450 1,409,285 Net Position: Unrestricted (Deficit) (1,061,349) (899,697) Total Net Position $ (1,061,349) $ (899,697) Current assets increased by $449,513, which is related directly to the increase in other liabilities. Other Liabilities increased by $611,165 (43%), from $1,409,285 in fiscal year end 2020 to $2,020,450 in fiscal year end 2021. The increase from due to primary governments liabilities was the main factor in the overall increase in other liabilities. The City of Palm Desert approved the deferral of the annual lease payment in the amount of $96,000. Additionally, during the year the Desert Willow Golf Resort provided an additional $401,019 in cash for operations to PDRFC which increased the related party liabilities. 6Page 402 PALM DESERT RECREATIONAL FACILITIES CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS See independent auditors’ report. Table 2 Condensed Statements of Revenues, Expenses and Changes in Net Position Fiscal Fiscal Year Year 2021 2020 Operating Revenues: Food and beverage sales $ 2,181,902 $ 2,216,719 Total Revenues 2,181,902 2,216,719 Operating Expenses: Cost of goods sold 714,511 667,593 Maintenance and operations 1,428,846 1,485,757 General and administrative 200,197 225,722 Total Expenses 2,343,554 2,379,073 Change in Net Position $ (161,652) $ (162,354) Component Activities Total revenue decreased by $34,817 (16%) from $2,216,719 to $2,181,902, the decline in revenues was directly attributed to State mandated closure and restrictions. Outdoor dining allowed for improvements in a la carte dining revenues, but group catering events were extremely limited, which eliminated a vital market segment of the business; banquet and outings revenues were completely lost for the year. This fiscal year was the twentieth year of operation at the Desert Willow Clubhouse. During this fiscal year, the Palm Desert Recreation Facilities Corporation continued to market their banquets and outings aggressively in the national, regional and local markets and advertising campaign to maximize revenue for fiscal year 2022 and beyond focusing on: Attracting new and repeat business. Continued patronage of customers and corporate groups. Increased banquet and outing operations. Marketing to golfers on the golf course. As Table 2 above indicates, total expenses recognized a decrease of $35,519 from $2,379,073 to $2,343,554. The majority of the decrease was represented in maintenance and operations; specifically, decreased of payroll costs in the amount of $23,006, and decrease in equipment rentals of $30,344, other increases in costs mitigated the overall reductions to $35,519. During the 2020-2021 fiscal year, management continued to focus on retaining repeat business, continued patronage, and growing the corporate and group market as the economy improves. After the State restrictions Management refocused operations to maximizing restaurant revenues utilizing its outdoor 7Page 403 PALM DESERT RECREATIONAL FACILITIES CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS See independent auditors’ report. terrace for services. Expenses were limited to those needed for services offered and for maintaining a sales presence for future year banquet bookings. The Gross Profit Margin decreased from 70% to 67% largely due to supply chain issues causing inflationary pressure on food and beverage product costs. The Selling and Administrative Expense Percentage decreased during the year from 77% in 2020 to 75% in 2021. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets/Debt Administration The Palm Desert Recreational Facilities Corporation does not own or lease any capital assets; subsequently, there is no debt related to capital assets presented on their financial statement. More details are presented in the Notes to the Financial Statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET In preparing the budget for 2021-22, management looked at the following economic factors: COVID Pandemic: The uncertainty related to the COVID pandemic along with the potential for further State mandated shutdown of operations or continued operational restrictions were considered when finalizing the fiscal year 2021-22 budget. Prices: The prices for goods and services in the golf industry continue to experience downward pressure resulting from the lagging economy. In an effort to maintain the integrity of the products served at the restaurant, The Palm Desert Recreational Facility has increased menu prices between 3-5% in response to the increased pressure on costs associated with labor and supplies. Secondarily, management continues to implement better cost control measures to eliminate wastage. In addition, the Palm Desert Recreational Facilities Corporation will continue to aggressively market and advertise to secure their market share in the local and regional golf industry. National Economy: The golf and hospitality industries rely heavily on a strong national and local economy. With a strong national economy, the market demand for leisure activities such as golf and dining is increased; however, in an economic downturn or a slowing of the economy, the typical trend is for consumers to reduce their consumption of leisure activities. The state of the current economy was taken into consideration when budgeting for the 2021-2022 fiscal year. 8Page 404 PALM DESERT RECREATIONAL FACILITIES CORPORATION MANAGEMENT’S DISCUSSION AND ANALYSIS See independent auditors’ report. Labor cost: The State of California has mandated increased minimum wage rates, which is scheduled to increase from $14 per hour to $15 per hour effective January 1, 2022. The increase minimum wage rate coupled with the mandated changes in employer provided health care benefits (Affordable Care Act) places pressure on an already fragile food industry. The Palm Desert Recreational Facilities Corporation has taken measures to manage labor costs without affecting customer service, and will continue to seek effective and efficient methods to implement in their daily operations. A copy of the Corporation’s 2021-2022 financial plan can be obtained by contacting the Palm Desert Recreational Facilities Corporation (see below). CONTACTING THE CORPORATION’S FINANCIAL MANAGEMENT This financial report is designed to provide the users with a general overview of the Palm Desert Recreational Facilities Corporation, a component unit of the City of Palm Desert. If you have questions about this report or need additional financial information, contact the Controller at the address of the Palm Desert Recreational Facilities Corporation at 38-995 Desert Willow Drive, Palm Desert, California 92260. 9Page 405 See independent auditors' report and notes to basic financial statements. PALM DESERT RECREATIONAL FACILITIES CORPORATION STATEMENT OF NET POSITION June 30, 2021 ASSETS: Cash and investments $ 866,936 Accounts receivable 41,414 Prepaid costs 3,404 Inventories 47,347 TOTAL ASSETS 959,101 LIABILITIES: Accounts payable 52,679 Accrued liabilities 33,031 Due to Primary Government 1,790,692 Unearned revenue 144,048 TOTAL LIABILITIES 2,020,450 NET POSITION (DEFICIT): Unrestricted (deficit) (1,061,349) TOTAL NET POSITION $ (1,061,349) 10Page 406 See independent auditors' report and notes to basic financial statements. PALM DESERT RECREATIONAL FACILITIES CORPORATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION Fiscal Year Ended June 30, 2021 OPERATING REVENUE: Food and beverage sales $ 2,181,902 TOTAL OPERATING REVENUE 2,181,902 OPERATING EXPENSES: Cost of goods sold 714,511 Maintenance and operations 1,428,846 General and administrative 200,197 TOTAL OPERATING EXPENSES 2,343,554 OPERATING INCOME/CHANGE IN NET POSITION (161,652) NET POSITION - BEGINNING OF YEAR (899,697) NET POSITION - END OF YEAR $ (1,061,349) 11Page 407 See independent auditors' report and notes to basic financial statements. PALM DESERT RECREATIONAL FACILITIES CORPORATION STATEMENT OF CASH FLOWS Fiscal Year Ended June 30, 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers $ 2,213,774 Payments to suppliers (2,284,030) NET CASH USED BY OPERATING ACTIVITIES (70,256) CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES: Cash received from primary government $ 1,233,943 Cash paid to primary government (860,988) NET CASH PROVIDED BY NONCAPITAL AND RELATED FINANCING ACTIVITIES 497,019 NET INCREASE IN CASH AND CASH EQUIVALENTS 426,763 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 440,173 CASH AND CASH EQUIVALENTS - END OF YEAR $ 866,936 RECONCILIATION OF OPERATING INCOME TO NET CASH USED BY OPERATING ACTIVITIES: Operating income $ (161,652) Adjustments to reconcile operating income to net cash provided by operating activities: (Increase) decrease in accounts receivables, net (28,499) (Increase) decrease in inventories (2,359) (Increase) decrease in prepaid costs 8,108 Increase (decrease) in accounts payable and accrued liabilities 53,775 Increase (decrease) in unearned revenue 60,371 NET CASH USED BY OPERATING ACTIVITIES $ (70,256) 12Page 408 PALM DESERT RECREATIONAL FACILITIES CORPORATION NOTES TO BASIC FINANCIAL STATEMENTS See independent auditors’ report. June 30, 2021 1. ORGANIZATION AND DESCRIPTION OF THE REPORTING ENTITY: The Palm Desert Recreational Facilities Corporation (the Corporation) is a Corporation that provides food and beverage services exclusively to the Desert Willow Golf Resort (the Golf Resort). The Corporation is a component unit of the City of Palm Desert (the City) and is reported as an Enterprise Fund in the City’s basic financial statements. The Corporation was incorporated on February 25, 1997. The Board of Directors of the Corporation consists of two members of the City Council and two members of the public at large. The annual Board of Director’s meetings are held the second Monday of June at 11:00 a.m. at the principal office of the Corporation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Basic Financial Statements: The basic financial statements are comprised of the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Net Position, the Statement of Cash Flows and the notes to the basic financial statements. b. Basis of Presentation: The basic financial statements of the Palm Desert Recreational Facilities Corporation have been prepared in conformity with the accrual basis of accounting principles as applicable to government units. The Governmental Accounting Standards Board is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The accounts of the Corporation are an enterprise fund. An enterprise fund is a Proprietary type fund used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. 13Page 409 See independent auditors’ report. PALM DESERT RECREATIONAL FACILITIES CORPORATION NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2021 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. Measurement Focus and Basis of Accounting: Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied. The accompanying financial statements are reported using the “economic resources measurement focus”, and the “accrual basis of accounting”. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. d. Net Position: In the Statement of Net Position, net position is classified in the following categories: Net investment in capital assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction, or improvement of the assets. Restricted net position - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. Unrestricted net position - This amount is all net position that do not meet the definition of “net investment in capital assets” or “restricted net position”. When both restricted and unrestricted resources are available for use, the Corporation may use restricted resources or unrestricted resources based on the Board’s discretion. e. Operating Revenues: Operating revenues, such as food and beverage sales, resulting from exchange transactions associated with the principal activity of the Corporation. Exchange transactions are those in which each party receives and gives up essentially equal values. f. Cash and Investments: For purposes of the Statement of Cash Flows, the Corporation considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents. The carrying value was $904,640 and the deposit value was $866,936. The difference is represented by $6,699 of deposits in transit and checks outstanding totaling $44,403 for a net total of $37,704. 14Page 410 See independent auditors’ report. PALM DESERT RECREATIONAL FACILITIES CORPORATION NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2021 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): f. Cash and Investments (Continued): The City has implemented GASB Statement No. 40, “Deposit and Investment Risk Disclosures”. This pronouncement is an amendment to GASB Statement No. 3. GASB No. 40 establishes and modifies disclosure requirements related to deposit and investment risks. The information required by GASB Statement No. 40 related to authorized investments, credit risk, etc., is available in the annual report of the City. g. Inventories and Prepaid: Inventories in the amount of $47,347 consisted of merchandise for sales of food and beverages, are reported at lower of cost or market. Certain payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid costs in the financial statements. At June 30, 2021 the prepaid balance was $3,404. h. Budgetary Policies: Kemper Sports Management, Inc. is required to submit to the City an operating budget containing estimates of all the Corporation expenses for the next operating year, including expenditures for: (a) property operation and maintenance, (b) repairs, replacements and alterations that do not constitute capital improvements, (c) furnishings and equipment and operating inventory, and (d) advertising, sale and business promotion. The budget is required to be reviewed and approved by the City prior to July 1st each year. 3. DUE TO PRIMARY GOVERNMENT AND UNEARNED REVENUE: Due to primary government: As of June 30, 2021, the Corporation owed the following amounts to primary government: Desert Willow Golf Course $ 1,370,692 City of Palm Desert 420,000 $ 1,790,692 The Corporation amounts owed to primary government represent amounts owed to the Desert Willow Golf Resort for monies provided for operations and rent due to the City of Palm Desert per the operating lease with the City for use of the facilities (see Note 4). 15Page 411 See independent auditors’ report. PALM DESERT RECREATIONAL FACILITIES CORPORATION NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2021 3. DUE TO PRIMARY GOVERNMENT AND UNEARNED REVENUE (continued): Unearned revenue: The balance of $144,048 represents the unused portions of prepaid banquets. 4. COMMITMENTS AND CONTINGENCIES: Operating Leases: The Corporation has an operating lease with the City for use of the facilities. The original terms of the lease indicated a lease rate of $8,000 per month beginning June 4, 1997. On May 18, 2004, the Corporation approved an increase in the lease payment commencing begin on July 1, 2004. The July 1, 2004 lease amendment stipulated a new lease payment of $15,000 per month. On May 12, 2009, the Board of Directors approved a decrease in the lease payment from $15,000 to $8,000 commencing on July 1, 2009. The rent expense for the year ended June 30, 2021 was $96,000. At June 30, 2021, the Corporation owed $420,000 in rent in arrears to the City of Palm Desert. Management Agreement: The Corporation is managed by Kemper Sports Management, Inc., under an agreement to manage and operate Desert Willow Golf Course. On April 13, 2017, a new contract was approved and with a commencement date of July 2017 and a termination date of July 1, 2020. There are two 1-year options to extend the management agreement. On May 23, 2019 both 1-year options were exercised and approved; the term was extended to July 1, 2022. 5. RISK MANAGEMENT: The Golf Resort is covered by insurance purchased by Kemper Sports Management Inc., which includes commercial liability, automobile, workers’ compensation and overall umbrella excess liability insurance through Aon Risk Services, Inc. of Illinois. The Corporation is named as additional insured. 6. OTHER DISCLOSURES: The Corporation has a net deficit of $ 1,061,349, which will be eliminated by increasing revenues through banquet and dining reservations. 16Page 412 See independent auditors’ report. PALM DESERT RECREATIONAL FACILITIES CORPORATION NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2021 6. OTHER DISCLOSURES (continued): The Corporation has federal and state income tax Net Operating Losses (NOL) carryforwards of $539,898, which will expire in the next 13 years as follows and a current NOL incurred in fiscal year 2020-2021 of $161,652 and loss of $162,354 incurred in 2019-2020 that can be carried forward indefinitely subject an income limitation of 80% in year utilized, for a combined NOL of $863,904. 2011-2031 $ 395,413 2012-2032 109,556 2013-2033 34,929 2020- 162,354 2021- 161,652 $ 863,904 The Corporation anticipates that it is more likely than not the benefit for each certain State and Federal NOL carryforwards will be realized prior to their respective expiration. 17Page 413 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Palm Desert Recreational Facilities Corporation Palm Desert, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Palm Desert Recreational Facilities Corporation (the Corporation), a component unit of the City of Palm Desert, California (the Corporation), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Corporation’s basic financial statements, and have issued our report thereon dated February 7, 2022. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Corporation’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Corporation’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Corporation’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Page 414 To the Board of Directors Palm Desert Recreational Facilities Corporation Palm Desert, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Corporation’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Corporation’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Brea, California February 7, 2022 19Page 415 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the City Council City of Palm Desert, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Palm Desert, California (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 20, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Page 416 To the Honorable Mayor and Members of the City Council City of Palm Desert, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Brea, California December 20, 2021 Page 417 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 December 20, 2021 To the Honorable Mayor and Members of the City Council City of Palm Desert, California We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Palm Desert, California (the City) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated December 20, 2021. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings and Other Issues Qualitative Aspects of Significant Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. As described in Note 22 to the financial statements, the City changed accounting policies related to recording of the fiduciary funds by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities, in year ended June 30, 2021. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of changes in fiduciary net position. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were: Management’s estimates of its net pension liability and net other post-employment benefits asset based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability and net other post-employment benefit asset in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Page 418 To the Honorable Mayor and Members of the City Council City of Palm Desert, California Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Circumstances that Affect the Form and Content of the Auditor’s Report New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements. This standard updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 20, 2021. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the management discussion and analysis, budgetary comparison schedule for the General Fund, major special revenue funds as listed in the table of contents, schedule of changes in net pension liability and related ratios, schedule of plan contributions - Pension, schedule of changes in net OPEB Liability/(Asset) and related ratios, and schedules of plan contributions – OPEB, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. Page 419 To the Honorable Mayor and Members of the City Council City of Palm Desert, California We were engaged to report on the combining statements and individual nonmajor fund statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory or statistical section, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. New Accounting Standards The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit: GASB Statement No. 84, Fiduciary Activities. GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61. GASB Statement No. 98, The Annual Comprehensive Financial Report. The following Governmental Accounting Standards Board (GASB) pronouncements are effective in the following fiscal year audit and should be reviewed for proper implementation by management: Fiscal year 2022 GASB Statement No. 87, Leases. GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. Fiscal year 2023 GASB Statement No. 91, Conduit Debt Obligations. Restriction on Use This information is intended solely for the use of city council and management of the City of Palm Desert and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Brea, California Page 420 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\Santa Barbara\00 Staff Report - Santa Barbara Condos.Docx CITY OF PALM DESERT DEPARTMENT OF DEVELOPMENT SERVICES CITY COUNCIL STAFF REPORT MEETING DATE: February 24, 2022 PREPARED BY: Kevin Swartz, Associate Planner REQUEST: Consideration for the adoption of a Mitigated Negative Declaration in accordance with the California Environmental Quality Act (CEQA), and approval of a Change of Zone to establish a higher residential density (eight (8) units per acre), Tentative Parcel Map 38033, and a Precise Plan to construct 32 single-story condominium units, clubhouse, and pool/spa on 3.91 acres at the southwest corner of Gerald Ford Drive and Shepherd Lane. Recommendation Waive further reading and adopt the following: 1. Pass to second reading City Council Ordinance No. ____, approving Change of Zone 21-0001 to establish a higher residential density from five (5) units per acre to eight (8) units per acre and adoption of a Mitigated Negative Declaration in accordance with CEQA; and 2. Adoption of City Council Resolution No. , approving a Tentative Parcel Map 38033, and Precise Plan 21-0008 to construct a 32 single-story unit condominium project, clubhouse, and pool/spa on 3.91 acres at the southwest corner of Gerald Ford Drive and Shepherd Lane. Planning Commission Recommendation On February 1, 2022, the Planning Commission recommended approval of the project to the City Council with a 3-0 vote with Commissioners Gregory and Pradetto absent. The Commissioners supported the project and architecture and stated that the proposed project is in keeping with the surrounding neighborhood in regards to building height (single-story) and density at eight (8) units per acre. The Commissioners also thanked the applicant for modifying the project and working with the existing residents to the south. Page 421 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 2 of 11 Architectural Review Commission Recommendation The Architectural Review Commission (ARC) has reviewed the proposed project at two (2) separate meetings on November 23, 2021, and December 14, 2021. On November 23, 2021, the applicant presented the project to the ARC, which included 16 single-story duplex buildings consisting of a total of 32 units and a single-story clubhouse and pool/spa building located along Gerald Ford Drive. The ARC deemed the new design as very attractive and praised the applicant’s responsiveness to the adjacent neighbors. The ARC continued the project and directed the applicant to explore design options to break up the monotony of the layout regarding the buildings, streets, continuous linear sidewalks, and incorporate design interest. On December 14, 2021, the applicant returned to the ARC with updated design plans. The ARC stated that the improvements made to the site plan by staggering the buildings, lengthening every other driveway, meandering the sidewalk throughout the project, and adding additional recess to the windows was much appreciated and added the design interest that they were requesting. The ARC approved the updated project by a 5-0 vote with Commissioner McAuliffe absent, subject to the following: 1. Staff to conduct field verification of roof parapets, and if they are not properly concealed, the applicant will revisit parapet design to ensure edges are properly concealed and parapet edges line up over garages on Style A as discussed, should it be determined they need to be enclosed due to visibility. 2. The applicant shall be mindful of roof color to ensure it is not too reflective. Strategic Plan x Land Use, Housing & Open Space – Priority 2:“Facilitate development of high-quality housing for people of all income levels.” x Land Use, Housing & Open Space – Priority 5: “Utilize progressive land use policies and standards to support ongoing and future needs.” Executive Summary The applicant is proposing a Change of Zone (CZ) from the existing zone of Planned Residential (PR-5) of five (5) dwelling units per acre (du/acre) to PR-8, allowing eight (8) du/acre, a Tentative Parcel Map (TPM) for condominium purposes, and a Precise Plan (PP) to construct a 32 single-story unit condominium project and a clubhouse with a pool/spa on 3.91 acres. The development conforms to the City’s General Plan designation of Conventional Suburban Neighborhood, which allows for a maximum density of eight (8) du/acre, and conforms to all Page 422 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 3 of 11 development standards for building setbacks, lot coverage, parking, height, and landscaping. The development was subject to the approval of a Mitigated Negative Declaration (MND) for the CEQA review. This review has determined that there will be no significant environmental impacts with the development’s mitigation measures. Additionally, the project has received full support from the residents to the south along Scholar Lane (east and west) along with other property owners within the surrounding area. Background A. Property Description: The development site is an undeveloped 3.91-acre property located at the southwest corner of Gerald Ford Drive and Shepherd Lane, east of the Riverside County Sheriff’s Station. The property consists of sparse desert vegetation including, shrubs and grasses, blow sand, and scattered debris. The topography of the site generally slopes down from the southwest. In 2020, Desert Luxury Apartments, LLC (“Applicant”), submitted a project on this site for 48 condominium units and a clubhouse with a pool/spa within 3.91 acres. The project entitlements included a General Plan Amendment (GPA) from “Conventional Suburban Neighborhood (three (3) to eight (8) du/acre)” to “Town Center Neighborhood,” which allows up to 40 du/acre, a CZ from the existing zone of PR-5 of five (5) du/acre to PR-12, allowing 12 du/acre, a TPM for condominium purposes, and a PP application. The non- gated project was designed with one (1) vehicular access driveway along Gerald Ford Drive that allows a right turn in and a right turn out. A total of 17 buildings were located throughout the site, including one (1) single-story clubhouse building, eight (8) single-story duplex buildings, and eight (8) two-story buildings. On May 25, 2021, the ARC recommended approval of the original design, which was later redesigned by the Applicant. On July 13, 2021, the ARC recommended approval of the new design plans, which included the replacement of four (4) two-story buildings along the rear with eight (8) single-story duplex buildings to address the neighbor’s concerns. On September 7, 2021, the Planning Commission denied recommending approval of the project to the City Council after considering a request to increase the density, the height of buildings, and site design. In addition, public comments submitted to the Planning Commission showed that numerous neighbors were opposed to the project’s density and building heights (privacy and views) and expressed the project was not in keeping with the single-family neighborhood design. The Planning Commission stated that the project was too dense, and the site plan lacked design merit to recommend approval of a GPA and CZ. The project was not presented to the City Council as the Applicant chose to withdraw the project application. Page 423 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 4 of 11 On November 4, 2021, the Applicant submitted the current application proposing to construct 32 single-story condominium units and a clubhouse with a pool/spa. B. Current Zoning and General Plan Land Use Designation: Zone: Planned Residential–5 dwelling units per acre (PR-5) General Plan: Conventional Suburban Neighborhood–3 to 8 dwelling units per acre (du/acre) C. Adjacent Zoning and Land Use: North: PR-5 - The Gallery residential community South: PR-5 - Single-Family Homes East: PR-5 - Vacant Land West:PR-20 - Future City retention basin Project Description The applicant proposes constructing 32 condominium units and a clubhouse with a pool/spa within 3.91 acres of undeveloped land. A. Site Plan The project includes 16 single-story duplex buildings throughout the site and a single- story clubhouse and pool/spa located along Gerald Ford Drive. The site has three (3) proposed landscaped retention basins throughout the site, including one (1), which will be located adjacent to the clubhouse and pool/spa, and two (2) located along the rear of the property, one in which has turf. The non-gated project is designed with two (2) vehicular access driveways. The Gerald Ford Drive entrance allows a right turn in and a right turn out and the other entrance along Shepherd Lane allows for full ingress and egress. The exterior also includes a meandering eight-foot (8’) sidewalk along Gerald Ford Drive and Shepherd Lane. Interior pedestrian paths are also situated for continuous pedestrian connections throughout the site and landscaping areas. The front and side yard perimeters of the site are enclosed with a five- foot-high combination wall along the property boundaries. The rear of the property (south) includes an existing six-foot-high (6”) block wall. The project requires a CZ from five (5) du/acre (PR-5) to eight (8) du/acre and a MND for environmental purposes. The project density of 32 units complies with the General Plan designation of Conventional Suburban Neighborhood, which has density allowances from three (3) to eight (8) du/acre. In addition, the Tentative Parcel Map (TPM) for condominium purposes (TTM 38033) will be concurrently processed with the entitlement application. Page 424 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 5 of 11 B. Architecture The proposed architecture features a contemporary design characterized by geometric building forms, stucco pop-outs and furring, flat rooflines, balcony railings, recessed windows, prominent architectural elements, and warm earth tone colors. Architectural projections, recessing, and breaks in the parapet line are used to alleviate the massing of the building. The single-story duplex buildings are proposed to be 15 feet, six inches (6”) in height, and consist of three (3) bedrooms and two (2) baths at 1,337 square feet in size. Each unit has a two-car garage and the availability of guest parking within the driveways. All buildings include ground-mounted air conditioning (A/C) units, which are screened by walls and landscaping high enough to cover the units. The Applicant has been made aware that exterior building-mounted downspouts are strongly discouraged. Instead, the design should integrate the roof drainage and downspouts into the building architecture. The clubhouse will maintain the same architectural style and implement the same design elements. The single-story building is 14 feet, six inches (6”) in height, and consists of a gym/amenity space, leasing office, and restroom. The Applicant is proposing two color schemes (A and B) for the 32 duplex units. The clubhouse is color scheme A. DESIGN ELEMENTS PROPOSED EXTERIOR MATERIAL, FINISH, AND COLOR Façade Color Scheme A - Painted smooth stucco (Urban Jungle, Sandbar, and Cocoon Color Scheme B – Painted smooth stucco (Quiver Tan, Softer Tan, and Lanyard) Fascia’s – Peppercorn Garage Doors – Summit Gray Windows and Doors Espresso Anodized Aluminum Roof Concrete Roofing Scheme A – Charcoal Brown Scheme B – Rustic Brown Stone Stone Veneer Eldorado Stone Cut Coarse Stone Seashell Awnings Metal Awnings Lighting LED Wall Sconce – Bronze with Tempered Glass, Satin Black with Etched Glass, Titanium with Tempered Glass Fencing Decorative Block Wall Page 425 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 6 of 11 C. Landscape The proposed landscape includes front yards, perimeter roadway frontages, retention areas, and common areas. Shade trees are found throughout the perimeters, along street frontages, and interior paseos of the site. The proposed landscape plan includes low water usage planting materials, including mixes of desert native species for trees and shrubs. Perimeter Roadways: Gerald Ford Drive and Shepherd Lane are the public roadways along the perimeter of the project and are proposed to include a decorative six-foot CMU wall, drought-tolerant 36- inch box Desert Museum trees, 24-inch box Mulga trees, and 18-foot Medjool Date Palms. Also proposed along the perimeter are a mix of low water usage shrubs, including Green Carpet, Deer Grass, Green Cloud, Chihuahuan Sage, Little John, Lydia, Twin-Flowered Agave, and Red Tipped Yucca. Front Yards, Common Areas and Retentions: Each front yard features a large canopy tree. The common areas and retention basins are planted similarly to the perimeter roadways in that a combination of inert material, shrubs, and trees are used to fill these planting areas. One (1) of the rear retention basins includes turf, and the other includes decomposed granite. Additional trees include a 36-inch box Maverick and Tipu Tree, 24-inch box Feather Bush, Mediterranean Fan Palm, and Yellow Bird of Paradise. Additional accents include 15-gallon Octopus and 5-gallon Little Ollie, Thunder Cloud, Boxwood Beauty, Lantana, and Trailing Indigo Bush. D. Roadway and Right-of-Way Improvements As a part of the development, the Applicant will construct a commercial driveway along Gerald Ford Drive, with an eight-foot (8’) sidewalk along the length of the property fronting Gerald Ford Drive. Analysis Land Use Compatibility: A. General Plan Conformance: In 2016, the City of Palm Desert adopted a General Plan update to guide development in the City for the 2040 horizon year. The land use designation of the property is “Conventional Suburban Neighborhood,” which allows low-intensity residential developments between three (3) and eight (8) du/acre. This designation is intended for single-family houses and small multi-family dwellings. At maximum density, the property would allow up to 32 dwelling units, which is consistent with the number of proposed units for this project. The proposed project is consistent with the Goals and Policies of the General Plan, as demonstrated below: Page 426 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 7 of 11 Policy No. 3.21 Infill neighborhoods. In existing developed areas of the city, encourage development that repairs connectivity, adds destinations, and encourages complete neighborhoods. The proposed project supports the expansion of condominium-type housing by providing high-quality resi dential development that is within a vacant property fronting Gerald Ford Drive and has existing residential to the north and south. The project is designed with internal pedestrian access and provides common area recreational amenities available to all residents. Theproposedproject includes localstreets,pathways, and open spaces intended to allow residents to enjoy not only the project’s amenities but to connect pedestrians to the existing neighborhoods to the west, east, and south, thereby creating a pedestrian, family-oriented atmosphere. Goal 3, Policy No. 3.2 Conventional neighborhood design. Discourage the construction of new residential neighborhoods that are characterized by cul- de-sacs, sound walls, long block lengths, and single building and housing types. The existing area to the south contains a long street broken up with multiple cul-de-sacs. The proposed project allows the applicant to construct a different housing product, which includes single-story buildings which is consistent with the neighborhood. Goal 3, Policy 3.3 Variety of types of neighborhoods. Promote a variety of neighborhoods within the City and ensure that neighborhood types are dispersed throughout the City. The project site is surrounded by a mix of vacant land and low-density, single-story residential developments. Staff finds that the proposed project establishes a land-use pattern that is consistent with the existing neighborhood. The project site is surrounded by a mix of vacant land and low- density, single-story residential developments. The residential developments to the north and south of the project are currently designated “Conventional Suburban Neighborhood,” consisting of single-family homes on lots generally in the range of 9,000 square feet. These existing neighborhoods extend from Frank Sinatra Drive to Gerald Ford Drive along the west side of Portola Avenue. The properties to the west and southwest are designated “Town Center Neighborhood.” The City Council recently approved a project for 269 affordable apartments just west of this site, and staff is working with an applicant for the remaining +/- 80 acres to the southwest on a denser residential project with a variety of different housing choices consisting of single-family homes, duplexes, and multi-family. The proposed project provides public benefit by expanding the City’s housing stock by offering a different product type of condominiums to the area and providing for the City’s expanding population in the immediate future. As designed, staff finds that the project does not physically divide an existing community and does not conflict with any applicable land use plan, policy, or regulation outlined in the General Plan. Page 427 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 8 of 11 B. Change of Zone: The Applicant is also requesting a CZ to allow for a higher density. The current zone allows for five (5) du/acre, and the proposed 32 condominium units provide a density of eight (8) du/acre. The CZ to eight (8) du/acre will support the proposed development. Directly west of the property is approximately 100 acres that are zoned for 22 du/acre. To the north, south, and east are multiple housing developments zoned for five (5) du/acre. Those developments are multiple tract maps consisting of 16 single-family residential lots ranging from 8,000 to 11,000 square feet. Those developments are designed to attract first-time homebuyers and families. The proposed development provides a housing type that can also attract first-time homebuyer or a retired population who choose to live within an HOA where amenities and property maintenance are included. The subject property is zoned PR, which is the City’s most flexible zoning standard for residential development. Essentially, the PR zone allows the developer to propose development standards based on their desired products and compatibility of the surrounding uses, requiring a consultation with City Planning staff and approval of the Commissions. The request for the CZ to a higher density meets the intent of the PR zone by providing a mixture of residential densities in the surrounding area. The building density as designed would not adversely impact any adjacent properties, as shown from the neighboring residents in support of the project. C. Tentative Parcel Map: The TPM 38033 proposes to create a single parcel for condominium purposes, as well as lettered lots for open space, stormwater retention, and streets. The proposed TPM 38033 is consistent with the City of Palm Desert General Plan 2040, and upon analysis, meets the density and development standards of its zoning district. The design of the subdivision will not conflict with easements acquired by the public at large for access through or use of property within the proposed subdivision because all such improvements will be constructed to be adequate for the proposed project. The environmental assessment has been reviewed for the proposed subdivision, and it will not cause substantial environmental damage or substantially avoidably injure fish or wildlife or their habitat. The required conditions of approval ensure the proposed project from being detrimental to the public health, safety or welfare and actually protect and promote the public health, safety and welfare, and the conditions prevent material injury to properties or improvements in the vicinity. D. Precise Plan: The proposed development standards are analyzed for conformance: Height: The PR zone allows for three-story buildings up to a maximum height of 40 feet pursuant to Palm Desert Municipal Code (PDMC) Section 25.10.050(B)(11). The building heights are 15 feet, six (6”) inches in height, which are permitted by the zoning ordinance. Page 428 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 9 of 11 Density: The PR zone allows a minimum of four (4) du/ac and a max of 40 du/ac pursuant to PDMC Table 25.10-3. The proposed project is requesting eight (8) du/ac, which is within the threshold of the PR zone allowance. Street Line Setbacks: Pursuant to PDMC Table 25.10-2 the street setback distance for Gerald Ford is 32 feet from the property line. The proposed project has a setback distance of 28 feet from the property line which was approved by Planning Commission by authorization provided in Section 25.72.030. Staff finds that the reduced front yard setback will unreasonably interfere with the use or enjoyment of property in the vicinity by the occupants thereof for lawful purposes or would endanger the public peace, health, safety, or general welfare. The project setbacks for the sides and rear are below. x Side Yard (west property line) –15 to 20 feet x Side Yard (east property line) – 20 feet x Rear Yard (south property line) – 38 to 39 feet As proposed, the developer is showing adequate setbacks from surrounding roadways and the project perimeter. Parking/Garages: Section 25.46.040 Parking Requirements states condominium projects require 2.5 parking spaces per unit. The 32-unit project will require 80 parking spaces. Below is the parking breakdown: x Each unit has a two-car garage – 64 parking spaces x Parking adjacent to the clubhouse – 8 parking spaces x Each unit has a driveway that can accommodate at least one vehicle – 32 parking spaces Based on a total of 104 on-site parking spaces as referenced above, the project has adequate parking available to accommodate the proposed project. Public Input Public Notification: Public noticing was conducted for the February 24, 2022, City Council meeting in accordance with and the PDMC Section 25.60.060. A public hearing notice was published on Saturday, February 12, 2022, in The Desert Sun. Additionally, notices were mailed to all property owners within 300 feet of the project site for a total of 31 hearing notices. Public Comments: Prior to the Applicant resubmitting a new project, staff requested that the Applicant contact the immediate residents along Scholar Lane east and west and residents within the surrounding area. Page 429 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 10 of 11 According to the Applicant, their outreach included a door-to-door presentation of the new project and site plan to the neighboring residents. The presentation to the residents included that units changed from two-stories to single story buildings, the proposed density decrease from 48 units to 32 units, and a 38-foot rear yard buffer zone. One of the residents originally opposed to the project, is now in support of this project and assisted by collecting 38 signatures from residents along Scholar Lane east and west and a few from Windflower Court. All the written correspondence received are provided to the City Council as an attachment to this staff report. Environmental Review In accordance with the CEQA and the State CEQA Guidelines, an Initial Study has been prepared to analyze the environmental impacts of the project. The City circulated the Notice of Intent to Adopt an Initial Study (IS)/Mitigated Negative Declaration (MND) in The Desert Sun, the newspaper of record on December 22, 2021, for the public review and comment period of no less than 20 days. The comment period closed on January 14, 2022, and the City did not receive any comments. Staff is recommending that the City Council adopt the MND for the purposes of CEQA. Findings of Approval Findings can be made in support of the project and in accordance with the City’s Municipal Code. Findings in support of this project are contained in City Council Ordinance No. for Change of Zone 21-000, and City Council Resolution No. , attached to this staff report. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Martin Alvarez Martin Alvarez, Director of Development Services N/A Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager: L. Todd Hileman:LL. Todd Hileman APPLICANT: Desert Luxury Apartments 2755 S. Nellis Boulevard, Suite 10 Las Vegas, NV 89121 Page 430 February 24, 2022 –Staff Report Case No. PP 21-0008, TPM 38033, CZ 21-0001, MND Santa Barbara Condos Page 11 of 11 ATTACHMENTS: 1. Draft City Council Ordinance No. 2. Draft City Council Resolution No. 3. Mitigated Negative Declaration and studies 4. Planning Commission Notice of Action for February 1, 2022 5. ARC Notice of Action for November 23, 2021 6. ARC Notice of Action for December 14, 2021 7. Public Hearing Notice 8. Public Comments 9. Applicant’s Project Exhibits Page 431 ORDINANCE NO. ____ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING CHANGE OF ZONE 21-0001 TO ESTABLISH A HIGHER RESIDENTIAL DENSITY FROM FIVE (5) DWELLING UNITS PER ACRE TO EIGHT (8) DWELLING UNITS PER ACRE TO CONSTRUCT 32 SINGLE-STORY CONDOMINIUM UNITS, CLUBHOUSE, AND POOL/SPA ON 3.91 ACRES AND CONSIDERING THE ADOPTION OF A MITIGATED NEGATIVE DECLARATION IN ACCORDANCE WITH THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA ) AT THE SOUTHWEST CORNER OF GERALD FORD DRIVE AND SHEPHERD LANE. CASE NO: CZ 21-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 1st day of February 2022, hold a duly noticed public hearing to consider the request by the Desert Luxury Apartments, LLC for approval of the above-noted, and adopted Resolution No. 2807, recommending approval to the City Council; and WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to consider the request by Desert Luxury Apartments, LLC for approval of the above noted Change of Zone 21-0001 application; and WHEREAS,pursuant to section 21067 of the Public Resources Code, Section 15367 of the State California Environmental Quality Act (CEQA) Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.), and the City of Palm Desert’s (“City’s”) Local CEQA Guidelines, the City is the lead agency for the proposed Project; and WHEREAS,City staff reviewed the Project and prepared an Initial Study pursuant to State CEQA Guidelines section 15063 to determine if the Project could have a significant effect on the environment; and WHEREAS,based on the Initial Study, which concluded that the Project would have potentially significant impacts, but that those impacts could be reduced to less than significant levels with the implementation of the proposed mitigation measures, the City determined that a subsequent Mitigated Negative Declaration (“MND”) should be prepared for the Project, and an MND was prepared pursuant to Public Resources Code sections 21064.5 and 21080, subdivision (c), and the State CEQA Guidelines section 15070 et seq; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: 1. The site consisting of 3.91 acres is suitable for the change of zone and development proposed. Environmental and traffic studies were prepared for the project area. No environmental or traffic concerns were identified that would indicate that development in this area would be unsuitable. In addition, existing residential developments have successfully constructed similar types of development in the immediate vicinity. No obstacles to development of surrounding subdivisions were experienced and, due to Page 432 ORDINANCE NO. _____ 2 the proximity and similarity of the proposed development, it is reasonable to conclude that the site is physically suitable for it. The property is suitable for the proposed development as conditioned and mitigated as described in the draft Initial Study and Environmental Assessment. 2. The change of zone meets the intent of the Planned Residential (PR) zone by providing a mixture of residential densities in the surrounding area. The PR zone, which is the City’s most flexible zoning standard for residential development. Essentially, the PR zone allows the developer to propose development standards based on their desired products and compatibility of the surrounding uses, requiring a consultation with City Planning staff and approval of the Commissions. The request for the CZ to a higher density meets the intent of the PR zone by providing a mixture of residential densities in the surrounding area. The building density as designed would not adversely impact any adjacent properties, as shown from the neighboring residents in support of the project. 3. The site layout and density are consistent with surrounding development. The current zone allows for five (5) dwelling units per acre (du/acre), and the proposed 32 units provide a density of eight (8) du/acre. The applicant is requesting a change of zone to eight (8) du/acre, which will support the proposed development. Directly west of the property is approximately 100 acres that are zoned for 22 du/acre. To the north, south, and east are multiple housing developments zoned for five (5) du/acre. Those developments are multiple tract maps consisting of 16 single-family residential lots ranging from 8,000 to 11,000 square feet. Those developments are designed to attract first-time homebuyers and families. The proposed development provides a housing type that can also attract first-time homebuyer or a retired population who choose to live within an HOA where amenities and property maintenance are included. 4. The design and layout of the 32 units comply with all grading requirements and the project will be developed in accordance with the Uniform California Building Code. Grade changes in the community are accommodated by the street layout and open space provided throughout the subdivision. SECTION 1. Adoption of Recitals.The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California (“City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and Page 433 ORDINANCE NO. _____ 3 B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment.The City Council of the City of Palm Desert, California, approve, and adopt Change of Zone 21-0001 from five (5) du/acre to eight (8) du/acre, as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Compliance with the CEQA.The City Council has reviewed and considered the information contained in the MND, Initial Study, and administrative record on file with the City and is available for review at 73510 Fred Waring Drive, Palm Desert, California. The City Council finds that the MND and Initial Study have been completed in compliance with the CEQA (Pub. Res. Code § 21000 et seq: “CEQA”) and the State CEQA Guidelines. SECTION 4. Findings on Environmental Impacts. In the City’s role as the lead agency under CEQA, the City Council find that the MND and Initial Study dated January 2022 contained a complete and accurate reporting of the environmental impacts associated with the Project. The documents have been completed in compliance with CEQA, the State CEQA Guidelines, and City of Palm Desert local CEQA guidelines. All environmental impacts of the Project are either insignificant or can be mitigated to a less than significant level pursuant to the mitigation measures outlined in the MND, Initial Study, and the Mitigation Monitoring and Reporting Program. No substantial evidence in the record supporting a fair argument that the Project may result in significant environmental impacts and that any comments received to date regarding the Project have been examined and determined not to modify the conclusions of the MND or the City Council. Furthermore, the MND has not been substantially revised after the public notice of its availability, and recirculation is not required. (State CEQA Guidelines, § 15073.5.) The City Council further finds that the MND contains a complete, objective, and accurate reporting of the environmental impacts associated with the Project and reflects the independent judgment of the City Council. SECTION 5. Adoption of the Mitigated Negative Declaration.The City Council approves and adopts the subsequent MND prepared for the Project. SECTION 6. Adoption of the Mitigation Monitoring and Reporting Program.The City Council approves and adopts the Mitigation Monitoring and Reporting Program prepared for the Project, which are included in the MND. SECTION 7. Severability.If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the Page 434 ORDINANCE NO. _____ 4 fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 8. Publication.The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 24th day of February 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR ATTEST: CITY CLERK CITY OF PALM DESERT, CALIFORNIA Page 435 ORDINANCE NO. _____ 5 Exhibit “A” Page 436 CITY COUNCIL RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING TENTATIVE PARCEL MAP 38033 AND PRECISE PLAN 21-0008 TO CONSTRUCT 32 SINGLE-STORY CONDOMINIUM UNITS, CLUBHOUSE, AND POOL/SPA ON 3.91 ACRES AT THE SOUTHWEST CORNER OF GERALD FORD DRIVE AND SHEPHERD LANE CASE NOS: TPM 38033 and PP 21-0008 WHEREAS, Desert Luxury Apartments, LLC, propose to develop 32 condominium units on an undeveloped 3.91-acre site, located on the southwest corner of Gerald Ford Drive and Shepherd Lane east of the Riverside County Sheriff Station with site improvements consisting of one-story condominiums, clubhouse, and pool/spa (“Project”); and WHEREAS,street improvements include the construction of a new commercial driveway along Gerald Ford Drive, and a new eight-foot wide meandering sidewalk along the length of the property fronting Gerald Ford Drive; and WHEREAS, the Project complies with the goals and policies contained in the City’s General Plan that promote a variety of neighborhoods, and promote a mix of housing choice for current and future residents; and WHEREAS,pursuant to section 21067 of the Public Resources Code, Section 15367 of the State California Environmental Quality Act (CEQA) Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.), and the City of Palm Desert’s (“City’s”) Local CEQA Guidelines, the City is the lead agency for the proposed Project; and WHEREAS,City staff reviewed the Project and prepared an Initial Study pursuant to State CEQA Guidelines section 15063 to determine if the Project could have a significant effect on the environment; and WHEREAS,based on the Initial Study, which concluded that the Project would have potentially significant impacts, but that those impacts could be reduced to less than significant levels with the implementation of the proposed mitigation measures, the City determined that a subsequent Mitigated Negative Declaration (“MND”) should be prepared for the Project, and an MND was prepared pursuant to Public Resources Code sections 21064.5 and 21080, subdivision (c), and the State CEQA Guidelines section 15070 et seq; and WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 1st day of February 2022, hold a duly noticed public meeting where members of the public were allowed to comment on the Project and recommended approval to the City Council; and WHEREAS, the City Council of the City of Palm Desert, California, did on the 24 th day of February 2022, hold a duly noticed public meeting where members of the public were allowed to comment on the Project; and Page 437 CITY COUNCIL RESOLUTION NO. 2 WHEREAS,at the said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did make the following findings to justify the approval of said request: WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AS FOLLOWS: SECTION 1. Recitals. The City Council hereby finds that the foregoing recitals are true and correct and are incorporated herein as substantive findings of this Resolution. SECTION 2. Compliance with the CEQA. The City Council has reviewed and considered the information contained in the MND, Initial Study, and administrative record on file with the City and is available for review at 73510 Fred Waring Drive, Palm Desert, California. The City Council finds that the MND and Initial Study have been completed in compliance with the CEQA (Pub. Res. Code § 21000 et seq: “CEQA”) and the State CEQA Guidelines. SECTION 3. Findings on Environmental Impacts. In the City’s role as the lead agency under CEQA, the City Council found that the MND and Initial Study dated January 2022 contained a complete and accurate reporting of the environmental impacts associated with the Project. The documents have been completed in compliance with CEQA, the State CEQA Guidelines, and City of Palm Desert local CEQA guidelines. All environmental impacts of the Project are either insignificant or can be mitigated to a less than significant level pursuant to the mitigation measures outlined in the MND, Initial Study, and the Mitigation Monitoring and Reporting Program. No substantial evidence in the record supporting a fair argument that the Project may result in significant environmental impacts and that any comments received to date regarding the Project have been examined and determined not to modify the conclusions of the MND or the City Council. Furthermore, the MND has not been substantially revised after the public notice of its availability, and recirculation is not required. (State CEQA Guidelines, § 15073.5.) The City Council further finds that the MND contains a complete, objective, and accurate reporting of the environmental impacts associated with the Project and reflects the independent judgment of the City Council. SECTION 4. Findings on the Tentative Parcel Map. Approval of this project, the City Council makes the following findings: Findings necessary to determine a Tentative Parcel Map (TPM) acceptable: 1. That the density of the proposed subdivision is consistent with applicable general and specific plans. The proposed project of 32 condominium units on 3.91 acres is consistent with the proposed General Plan Designation “Conventional Suburban Neighborhood,” which allows low-intensity residential developments between three (3) and eight (8) du/acre. This designation is intended for single-family houses and small multi- Page 438 CITY COUNCIL RESOLUTION NO. 3 family dwellings. At maximum density, the property would allow up to 32 dwelling units, which is consistent with the number of proposed units for this project. 2. That the design or improvement of the proposed subdivision is consistent with applicable general and specific plans. The Development Services Department, Economic Development, Fire Department, and Public Works Department have reviewed the design and improvements of the proposed subdivision for consistency with the General Plan and emergency services. The street and utility improvements, circulation patterns, and drainage improvements meet all requirements of the General Plan. All existing perimeter streets are in conformance with the General Plan, and minor roadwork along Gerald Ford Drive is needed. All internal project streets that serve TPM 38033 conform to City standards and are consistent with adjoining residential developments. There are no specific plans for the property. 3. That the site is physically suitable for the type of development. The site consisting of 3.91 acres are physically suitable for the development proposed. No environmental or traffic concerns were identified that would indicate that development in this area would be unsuitable. In addition, existing residential developments have successfully constructed similar types of development in the immediate vicinity. No obstacles to the development of surrounding subdivisions were experienced and, due to the proximity and similarity of the proposed development, it is reasonable to conclude that the site is physically suitable for it. The property is suitable for the proposed development as conditioned. 4. That the site is physically suitable for the proposed density of development. The site layout and density are consistent with the surrounding developments.The current zone allows for five dwelling units per acre (du/acre). The proposed 32 condominium units provide a density of eight (8) du/acre.The property allows for the proposed eight (8) du/acre, subject to a Change of Zone (CZ) to eight (8) du/acre. The parcel is adequate to accommodate the proposed 32 units, all site access (public and private), utilities, and drainage facilities. The parcel size of the proposed subdivision design provides for adequate roadways and infrastructure that allows for the site to be physically suitable for residential development. 5. That the design of the subdivision and the proposed improvements are not likely to cause substantial environmental damage or substantially and unavoidably injury to fish or wildlife or their habitat. The TPM 38033 is consistent with the City of Palm Desert General Plan 2040, and upon analysis, meets the density and development standards of its zoning district. The design of the subdivision will not conflict with easements acquired by the public at large for access through or use of property within the proposed subdivision because all such improvements will be constructed to be adequate for the proposed project. The environmental assessment has been reviewed for the proposed subdivision, and it will not cause substantial environmental damage or Page 439 CITY COUNCIL RESOLUTION NO. 4 substantially avoidably injure fish or wildlife or their habitat since the surrounding area has been developed. In addition, the project will pay into the Coachella Valley Multi-Species Habitat Conservation fund for the development of raw land. The required conditions of approval ensure the proposed project from being detrimental to the public health, safety, or welfare and actually protect and promote the public health, safety and welfare, and the conditions prevent material injury to properties or improvements in the vicinity. 6. That the design of the subdivision or the type of improvements is not likely to cause serious public health problems. The design and layout of the 32 condominium units comply with all grading requirements, and the properties will be developed in accordance with the Uniform California Building Code. Grade changes in the community are accommodated by the street layout and open space provided throughout the subdivision. Storm drainage, sanitary sewer, water, streets, and all utilities are available to the site and have the capacity to accommodate the project. The subdivision has been designed so the parcels have the necessary infrastructure to adequately serve the development and all proposed uses as allowed by the zoning ordinances that regulate the project. 7. That the design of the subdivision or the type of improvements will not conflict with easements, acquired by the public at large, for access through or use of property within the proposed subdivision. The TPM 38033 includes easements for roadways, drainage facilities, and utilities that will be recorded in the final map. No known public easements traversing the subject site that would be adversely affected by the Project. Therefore, the design of the subdivision will not conflict with easements acquired or required by the public at large for access through or use of the property. In addition, the applicant is responsible for the maintenance of the retention basins outlined in the conditions of approval. Surrounding perimeter City streets are built out to the General Plan designation. SECTION 5. Approval. The City Council approves and adopts the Tentative Parcel Map and Precise Plan applications for the Project. SECTION 6. Approval. The City Council approves and adopts the Project, subject to the Conditions of Approval attached hereto as Exhibit “A.” SECTION 7. Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings are based are located at the City’s office at 73510 Fred Waring Drive, Palm Desert, CA 92260. The City Clerk’s Office is the custodian of the record of proceedings. Page 440 CITY COUNCIL RESOLUTION NO. 5 SECTION 8. Notice of Determination. The City Council approves the Project, and directs Staff to file a Notice of Determination with the County of Riverside and the State Clearinghouse within five (5) working days of any Project approval. SECTION 9. Execution of Resolution. The Mayor of the City Council shall sign this Resolution, and the City Clerk shall attest and certify to the passage and adoption thereof. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AS FOLLOWS: 1. That the above recitations are true and correct and constitute the findings for approval of the City Council in this case. 2. That the City Council does hereby approve Case Nos: TPM 38033 and PP 21- 0008. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 24th day of February 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR ATTEST: CITY CLERK CITY OF PALM DESERT, CALIFORNIA Page 441 CITY COUNCIL RESOLUTION NO. 6 EXHIBIT “A” CONDITIONS OF APPROVAL CASE NOS: CZ 21-0001, TPM 38033, and PP 21-0008 PLANNING/LAND DEVELOPMENT DIVISION: 1. The development of the property shall conform substantially with exhibits on file with the Development Services Department, as modified by the following conditions. 2. The applicant agrees that in the event of any administrative, legal, or equitable action instituted by a third party challenging the validity of any of the procedures leading to the adoption of these Project Approvals for the Project, or the Project Approvals themselves, Developer and City each shall have the right, in their sole discretion, to elect whether or not to defend such action. Developer, at its sole expense, shall defend, indemnify, and hold harmless the City (including its agents, officers, and employees) from any such action, claim, or proceeding with counsel chosen by the City, subject to the Developer’s approval of counsel, which shall not be unreasonably denied, and at the Developer’s sole expense. If the City is aware of such an action or proceeding, it shall promptly notify the Developer and cooperate in the defense. Developer upon such notification shall deposit with City sufficient funds in the judgment of City Finance Director to cover the expense of defending such action without any offset or claim against said deposit to assure that the City expends no City funds. If both Parties elect to defend, the Parties hereby agree to affirmatively cooperate in defending said action and to execute a joint defense and confidentiality agreement in order to share and protect the information under the joint defense privilege recognized under applicable law. As part of the cooperation in defending an action, City and Developer shall coordinate their defense in order to make the most efficient use of legal counsel and to share and protect information. Developer and City shall each have sole discretion to terminate its defense at any time. The City shall not settle any third-party litigation of Project Approvals without the Developer’s consent, which consent shall not be unreasonably withheld, conditioned, or delayed unless Developer materially breaches this indemnification requirement. 3. The development of the property described herein shall be subject to the restrictions and limitations set forth herein, which are in addition to the approved development standards listed in the Palm Desert Municipal Code (PDMC) and state and federal statutes now in force, or which hereafter may be in force. 4. All construction documentation shall be coordinated for consistency, including, but not limited to, architectural, structural, mechanical, electrical, plumbing, landscape and irrigation, grading, and street improvement plans. All such plans shall be consistent with the approved entitlement plans on file with the Development Services Department. 5. The applicant shall commence project construction within two years from the date of final approval unless an extension of time is granted; otherwise, said approval shall become null, void, and of no effect whatsoever. 6. Any proposed modifications to this approval shall require an amendment to the application, which will result in a new public hearing. Page 442 CITY COUNCIL RESOLUTION NO. 7 7. The applicant or any successor in interest shall comply with all applicable local, state, and federal laws and regulations. 8. A copy of the herein-listed Conditions of Approval shall be included in the construction documentation package for the project, which shall be continuously maintained on-site during Project construction. 9. Prior to issuance of a building permit for construction of any use or structure contemplated by this approval, the applicant shall first obtain permits and or clearance from the following agencies: Public Works Department Fire Department Evidence of said permit or clearance from the above agencies shall be presented to the Building & Safety Division at the time of issuance of a building permit for the use contemplated herewith. 10. Prior to the approval of construction plans by the Development Services Department, access to trash and service areas shall be placed so as not to conflict with parking areas. Said placement shall be approved by the applicable waste company and Department of Development Services and shall include a recycling program. 11. The project approval shall be contingent upon the construction of single-story units. 12. All interior and exterior sidewalks shall meander throughout the project. 13. Prior to issuance of a building permit, this project shall be subject to payment of the City’s Public Art fee. The fee will be applied at the time of a building permit issuance and shall remain in the City’s public art fund. 14. Prior to the issuance of any permit, a qualified archeologist shall complete a cultural resources inventory prior to any development activities within the project area. 15. If the presence of cultural resources is identified in the cultural resources inventory, an approved Native Cultural Resource Monitor shall be on-site during ground-disturbing activities. 16. Should human remains be discovered during the construction of the proposed project, the project coordinator would be subject to either the state law regarding the discovery and disturbance of human remains or the Tribal burial protocol. In either circumstance, all destructive activity in the immediate vicinity shall halt, and the County Coroner shall be contacted according to State Health and Safety Code 7050.5. If the remains are determined to be of Native American origin, the Native American Heritage Commission (NAHC) shall be contacted. The NAHC will determine the Most Likely Descendant (MLD). The City and Developer will work with the designated MLD to determine the final disposition of the remains. Page 443 CITY COUNCIL RESOLUTION NO. 8 17. Prior to the approval of construction plans by the Development Services Department, the lighting plans shall be submitted in accordance with PDMC Section 24.16 for any landscape, architectural, street, or other lighting types within the project area. 18. All mitigation measures identified in the CEQA Environmental Assessment and Initial Study shall be incorporated into the planning, design, development, and operation of the project. 19. Prior to the approval of a Building Permit by the Development Services Department, final landscape and irrigation documents shall be prepared by a landscape architect registered with the State of California and shall be submitted to the City’s Development Services Department and the Coachella Valley Water District for review and approval. All sheets shall be wet signed by the landscape architect and shall include the license number and the expiration date. The landscape plan shall conform to the preliminary landscape plans prepared as part of this application and shall include dense plantings of landscape material. All plants shall be a minimum of five (5) gallons in size, and all trees shall be a minimum 24-inch box in size. 20. All project irrigation systems shall function properly, and landscaping shall be maintained in a healthy and thriving condition. The maintenance of landscaping and the irrigation system shall be permanently provided for all areas of the project site, as well as walkways and the portion of public right-of-way abutting the project site (parkways). Furthermore, the plans shall identify responsibility for the continued maintenance (such as homeowners’ association, landscape maintenance district, property owner, etc.). 21. Prior to the approval of a Building Permit by the Development Services Department, all exterior rooftop equipment, and all appurtenances thereto, shall be completely screened from public view by parapet walls or roof screens that are architecturally treated to be consistent with the building. The final construction plans shall include appropriate drawings demonstrating how such equipment is to be screened from view. 22. Prior to the approval of a Building Permit by the Development Services Department, all ground-mounted utility structures including, but not limited to, transformers, HVAC equipment, and backflow prevention valves shall be located out of view from any public street or adequately screened through the use of landscaping and/or masonry walls. 23. Prior to the approval of a Building Permit by the Development Services Department, the applicant shall comply with the recommendations made by the City’s Architectural Review Commission (ARC), as referenced in the December 14, 2021, Notice of Action. 24. Prior to the approval of a Building Permit by the Development Services Department, the final design of all site walls and monumentation (signage) walls shall be reviewed and approved by the Development Services Department. 25. If the existing bordering southern wall (neighboring properties along Scholar Lane east and west) is damaged in any way during grading or construction, the applicant shall replace or repair all damages to the wall subject to a building permit. Page 444 CITY COUNCIL RESOLUTION NO. 9 Prior to recordation of the Parcel Map and any permits: 26. The parcel map shall be submitted to the Director of Development Services for review and approval. 27. The applicant shall record Parcel Map 38033 within two (2) years of project approval 28. Easements for drainage, pedestrian, and public utility purposes shall be provided as needed on the final parcel map. 29. Park fees in accordance with PDMC Section 26.48.060 shall be paid prior to the recordation of the parcel map. 30. Pad elevations, as shown on the parcel map, shall be subject to review and modification in accordance with Chapter 27 of the PDMC. 31. The applicant shall submit Covenants, Conditions, and Restrictions (CC&Rs) concurrently with the final map for review and approval. Once approved by the City, the CC&Rs shall be recorded with the County Recorder’s Office. 32. Signalization fees, in accordance with City of Palm Desert Resolution Nos. 79-17 and 79-55 shall be paid prior to issuance of any permits associated with this project or the recordation of the parcel map. 33. Drainage fees in accordance with PDMC Section 26.49 and Ordinance number 653 shall be paid prior to the recordation of the parcel map. Prior to the issuance of grading permits, the applicant shall: 34. The applicant shall submit a grading and drainage plan to the Department of Development Services for review and approval by the City Engineer. Any changes to the approved civil plans must be reviewed for approval prior to work commencing. The grading and drainage plan shall include but not be limited to the following elements: A. The City of Palm Desert General Notes and Grading Notes. B. The total area and disturbed area of the project in acres. C. Construction notes and quantities. D. Proposed and existing utilities. E. Cut and fill quantities. F. Landscaping areas. G. Spot elevations. H. Proposed and existing property lines and easements. I. Square footage of building. J. Top of wall and top of footing elevations. K. Top of grate and invert elevations. L. Finish floor and pad elevations. M. Horizontal location of structures. N. Parking lot striping and dimensioned drive aisles. O. Existing grades of adjacent parcels. Page 445 CITY COUNCIL RESOLUTION NO. 10 35. The applicant shall submit any reports or agreements to the City Engineer that are relevant to the project including but not limited to soils reports, hydrology or hydraulic reports, maps, development agreements, Exclusive Negation Agreements (ENA), and a preliminary title report with the first grading submittal. 36. The applicant shall submit a PM10 application to the Land Development Division for approval. The applicant shall comply with all provisions of PDMC Section 24.12 regarding Fugitive Dust Control. 37. Prior to the issuance of a grading permit, the applicant shall install a PM10 sign with the contact information of the contractor or owner on the project site. 38. The applicant shall submit a final Water Quality Management Plan (WQMP) for approval. The WQMP shall identify the Best Management Practices (BMPs) that will be used on the site to control predictable pollutant runoff. Prior to the issuance of a grading permit, the Operation and Maintenance Section of the approved final WQMP shall be recorded with County’s Recorder Office and a conformed copy shall be provided to the Land Development Division. 39. The applicant shall provide the City Engineer with evidence that a Notice of Intent (NOI) has been filed with the State Water Resources Control Board. Such evidence shall consist of a copy of the NOI stamped by the State Water Resources Control Board or the Regional Water Quality Control Board, or a letter from either agency stating that the NOI has been filed. 40. The applicant shall abide by all provisions of City of Palm Desert Ordinance 843, Section 24.20 Stormwater Management and Discharge Ordinance. 41. This project is proposing to construct improvements in the public right-of-way. The applicant shall obtain an encroachment permit from the Public Works Department prior to commencement of work in the right-of-way. 42. Traffic control plans shall be submitted to the Public Works Department for review and approval prior to the issuance of an encroachment permit. 43. Any damage to an existing street or sidewalk during construction shall be repaired to the satisfaction of the Public Works Inspector and City Engineer at the expense of the developer. 44. The applicant shall construct or enter into an agreement and post security, in a form and amount acceptable to the City Engineer, guaranteeing the construction of off-site improvements. Improvements shall be in accordance with the Development Agreement. Improvements include but are not limited to: A. The construction of an ADA compliant, eight-foot (8’) meandering sidewalk on Gerald Ford Drive and Shepherd Lane. B. The construction of commercial driveways at the project entrances on Gerald Ford Drive and Shepherd Lane. Page 446 CITY COUNCIL RESOLUTION NO. 11 C. The construction of ADA compliant curb ramps at the entrances of the project on Gerald Ford Drive and Shepherd Lane, and on the corner of Gerald Ford Drive and Shepherd Lane. During the course of the project, the applicant shall: 45. Schedule a Site Inspection through the Permit Center to meet and confer with the Public Works Inspector. 46. Prior to a footing inspection from the Building Department the engineer shall submit a signed and stamped Form Certification to Land Development for review and approval. 47. Submit a Letter of Certification to the Land Development Department prior to scheduling of a Final Inspection. 48. Violation of any of the conditions of approval may be cause for revocation of the grading permit. BUILDING AND SAFETY DIVISION: 49. This project shall comply with the latest adopted edition of the following codes: A. California Building Code and its appendices and standards. B. California Plumbing Code and its appendices and standards. C. California Mechanical Code and its appendices and standards. D. California Electrical Code. E. California Energy Code. F. California Green Building Standards Code G. California Administrative Code. H. California Fire Code and its appendices and standards. 50. Submit an exit plan that labels and clearly shows compliance with all required egress features such as, but not limited to, common path of travel, the required number of exits and separation, occupant load, required width, continuity, travel distance, elevators, etc. CBC 1001.1 51. An approved automatic fire sprinkler system shall be installed as required per the City of Palm Desert Code Adoption Ordinance 1351. 52. A disabled access overlay of the precise grading plan is required to be submitted to the Building and Safety Division for plan review of the site accessibility requirements as per 2016 CBC Chapters 11A & B (as applicable) and Chapter 10. 53. Provide building height and area analysis to determine compliance with CBC Section 503. Justify any area increases to height and area as permitted per CBC Sections 504 and 506. Page 447 CITY COUNCIL RESOLUTION NO. 12 54. Provide a complete set of scaled or fully dimension elevations to determine the number of stories for the proposed project. CBC Section 503 (Definition of a Grade Plan, Story, and Story above grade plane). 55. Provide an area analysis on the first sheet of the plans to justify the allowable floor areas for a mixed occupancy building. The sum of the ratios of the actual area for each occupancy divided by the allowable area for each occupancy must not exceed 1.00. For buildings with firewalls, use the floor area of each separate "building" to justify the area. CBC Section 508.4.2 and 706.1. 56. All exits must provide an accessible path of travel to the public way. (CBC 1027.5 & 11B- 206) 57. Detectable warnings shall be provided where required per CBC 11B-705.1.2.5 and 11B705.1.2.2. The designer is also required to meet all ADA requirements. Where an ADA requirement is more restrictive than the State of California, the ADA requirement shall supersede the State requirement. Provide an accessible path of travel to the trash enclosure. The trash enclosure is required to be accessible. Please obtain a detail from the Building and Safety Division. 58. Public pools and spas must be first approved by the Riverside County Department of Environmental Health and then submitted to Building and Safety Division. Pools and Spas for public use are required to be accessible. 59. Submit a detailed analysis that labels and clearly shows compliance with CBC Section 1102A.3 for housing accessibility for multistory apartment buildings without elevators. 60. All contractors and subcontractors shall have a current City of Palm Desert Business License prior to permit issuance per PDMC, Title 5. 61. All contractors and/or owner-builders must submit a valid Certificate of Workers’ Compensation Insurance coverage prior to the issuance of a building permit per California Labor Code, Section 3700. 62. Address numerals shall comply with Palm Desert Ordinance No. 1351 (PDMC 15.28. Compliance with Ordinance 1351 regarding street address location, dimension, a stroke of line, distance from the street, height from grade, height from the street, etc., shall be shown on all architectural building elevations in detail. Any possible obstructions, shadows, lighting, landscaping, backgrounds, or other reasons that may render the building address unreadable shall be addressed during the plan review process. You may request a copy of Ordinance 1351 or Municipal Code Section 15.28 from the Building and Safety Division counter staff. 63. Please contact the Permit Center Division at (760) 776-6420 regarding the addressing of all buildings and/or suites. Page 448 CITY COUNCIL RESOLUTION NO. 13 FIRE DEPARTMENT: 64. Fire Hydrants and Fire Flow: Prior to the issuance of building permits, plans for the water system shall be submitted to the Fire Department for review and approval. The water system shall be capable of delivering the required fire flow. Fire hydrant(s) location and spacing shall comply with the fire code. An approved water supply for fire protection during construction shall be made available prior to the arrival of combustible materials on site. Reference 2016 California Fire Code (CFC) 507.5.1, 3312, Appendices B and C. 65. Fire Department Access: Prior to building permit issuance, approved vehicle access, either permanent or temporary, shall be provided during construction Ref. CFC 503.1.1, 3310.1, and 503.2.1. 66. Requests for installation of traffic calming designs/devices on fire apparatus access roads shall be submitted and approved by the Office of the Fire Marshal. Ref. CFC 503.4.1. 67. Residential Fire Sprinklers: Residential fire sprinklers are required in all one and two- family dwellings per the California Residential Code (CRC). Plans must be submitted to the Office of the Fire Marshal for review and approval prior to installation. Ref. CRC 313.2. 68. Addressing: All residential dwellings shall display street numbers in a prominent location on the street side of the residence. Ref. CFC 505.1 and County of Riverside Office of the Fire Marshal Standard No. 07-01. 69. These Fire conditions are preliminary, and further review will occur upon receipt of construction plans. Additional requirements may be required based upon the adopted codes at the time of submittal. END OF CONDITIONS OF APPROVAL Page 449 Page 450 Page 451 Page 452 Page 453 Page 454 Page 455 Page 456 Page 457 Page 458 Page 459 Page 460 Page 461 Page 462 Page 463 Page 464 Page 465 Page 466 Page 467 Page 468 Page 469 Page 470 Page 471 Page 472 Page 473 Page 474 Page 475 Page 476 Page 477 Page 478 Page 479 Page 480 Page 481 Page 482 Page 483 Page 484 Page 485 Page 486 Page 487 Page 488 Page 489 Page 490 Page 491 Page 492 Page 493 Page 494 Page 495 Page 496 Page 497 Page 498 Page 499 Page 500 Page 501 Page 502 Page 503 Page 504 Page 505 Page 506 Page 507 Page 508 Page 509 Page 510 Page 511 Page 512 Page 513 Page 514 Page 515 Page 516 Page 517 Page 518 Page 519 Page 520 Page 521 Page 522 Page 523 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT APN: 693-300-003 Lead Agency: City of Palm Desert Prepared For: Desert Luxury Apartments LLC 2755 S. Nellis Boulevard, Suite 10 Las Vegas, Nevada 89121 Prepared By: Elevated Entitlements LLC 449 Rayburn Street Thousand Oaks, California 91361 March 29, 2021 Page 524 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT 1 Table of Contents 1.0 SUMMARY...................................................................................................................... 1 2.0 METHODOLOGY............................................................................................................ 2 3.0 REGULATORY FRAMEWORK .......................................................................................... 3 4.0 EXISTING CONDITIONS................................................................................................. 7 4.1 GENERAL 7 4.2 WILDLIFE 8 4.3 JURISDICTIONAL WATERS 8 4.4 HABITAT CONNECTIVITY AND WILDLIFE MOVEMENTS 8 5.0 BIOLOGICAL CONSTRAINTS & RECOMMENDATIONS.................................................. 9 5.1 SPECIAL STATUS PLANTS AND ANIMALS 9 5.2 NATIVE VEGETATION/HABITAT 5 5.3 NATIVE AND NON-NATIVE TREES 5 5.4 PROJECT CONSTRAINTS & RECOMMENDED MITIGATION MEASURES 5 6.0 REFERENCES................................................................................................................... 1 Figure 2 Project Location Map 3 Figure 3 Conceptual Project Site Plan on Aerial Overlay 4 Figure 4 Vegetation Communities Map 5 Figure 5 Project Site Photograph 1 6 Figure 6 Project Site Photograph 2 7 Figure 7 Project Site Photograph 3 8 Figure 8 Project Site Photograph 4 9 Figure 9 Project Site Photograph 5 10 Figure 10 Project Site Photograph 6 11 Page 525 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT 2 LIST OF TABLES Table 1 Special-Status Plant/Animal Species with Potential to Occur on Project Site 5.5 LIST OF FIGURES Figure 1 Project Vicinity Map A.2 Figure 2 Project Location Map A.3 Figure 3 Conceptual Project Site Plan on Aerial Overlay A.4 Figure 4 Vegetation Communities Map A.5 Figure 5 Project Site Photograph 1 A.6 Figure 6 Project Site Photograph 2 A.7 Figure 7 Project Site Photograph 3 A.8 Figure 8 Project Site Photograph 4 A.9 Figure 9 Project Site Photograph 5 A.10 Figure 10 Project Site Photograph 6 A.11 LIST OF APPENDICES APPENDIX A 1 Page 526 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 1 1.0 SUMMARY Desert Luxury Apartments LLC (Applicant) is proposing to build a 32-unit condominium project on a 3.91-acre parcel located at the southwest corner of Gerald Ford Drive and Shepherd Lane in Palm Desert, California. The subject of this proposal is the development of a 24-unit condominium project consisting of a pool house, swimming pool, spa, community landscape area, and detention pond. The vacant site is approximately 3.91-acres. The project site consists of one parcel, APN# 694-300-003, occurring within the City of Palm Desert, Riverside County jurisdiction. The Project Site is located in an area that is covered by the Coachella Valley Multiple Species Habitat Conservation Plan (CVMSHCP), but is not located in a CVMSHCP’s Conservation Area. A reconnaissance-level biological survey conducted on March 25, 2021 at the Project Site revealed that the habitat occurring on the Project Site is characteristic of disturbed desert habitat. Although species occurrence records indicate potential for several special status plants and wildlife species to occur in the project area, the habitat on site is generally of low quality. The Project Site is located in a highly urbanized setting, surrounded by roadways and residential housing, and easily accessible to people. These factors render the Project Site less than optimal to support special status plants and wildlife species. The following special status species have a low to moderate potential to occur on the Project Site: Coachella-valley milk-vetch, Flat-seeded Spurge, Burrowing Owl, Loggerhead Shrike, Flat-tailed Horned Lizard, Coachella Valley Fringe-toed Lizard. The Project Site is not within any preserved lands for the Flat-tailed horned lizard. The extent of the Project Site has the potential to host native breeding bird species protected under the Migratory Bird Treaty Act (MBTA). There are no hydrological nor drainage features on the Project Site that qualify as “Waters of the United States,” and/or “State Waters” subject to jurisdictional authority of the United States Army Corps of Engineers (ACOE), Regional Water Quality Control Board, and California Department of Fish and Wildlife (CDFW), respectively. There are no protected trees on the parcel. As stated earlier, the Project’s area of potential disturbance does not lie within a Conservation Area of the CVMSHCP. Therefore, the Proposed Project is not subject to CVMSHCP requirements. Under the rules of the CVMSHCP, however, the project may be required to pay a pe-dwelling mitigation fee to the City, to offset potential impacts to biological resources. Although burrowing owls, flat-tailed horned lizard, and Coachella valley fringe-toed lizards are covered species under the CVMSHCP, mitigation measures are recommended to avoid impacts to these resources. In addition, measures to protect nesting birds under the MBTA is recommended. With the implementation of the required mitigation (fee payment); and the recommended mitigation measures, the proposed project development is not expected to result in significant adverse impacts to sensitive species or other biological resources beyond the Project site. Page 527 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 2 Introduction The approximately 3.91-acre Project site (APN# 694-300-003) is located in the northwest quadrant of Gerald Ford Drive and Portola Road, in the City of Palm Desert. The Project Site occurs in the western portion of the Coachella Valley area of Riverside County and is situated south of Interstate 10 (Figures 1 and 2). To the north, south, east and west, are roadways and residential development. Desert Luxury Apartments LLC (Applicant) is proposing to build a 32-unit condominium project on the parcel (Project). Figure 3 is a conceptual overlay of the proposed project design plans on an aerial base map of the Project site. On March 25, 2021, Elevated Entitlements staff conducted a general reconnaissance-level biological assessment of the Project site. The site survey and this report are intended to: a) characterize the existing biological conditions at the site, b) to evaluate and discuss the potential for special status plants and wildlife species to occur on the site, c) to identify those biological resources that may pose a constraint to the development of the site and d) to recommend general resource management measures to facilitate the Applicant to avoid or minimize impacts, if feasible. Elevated Entitlements staff evaluated the potential for on-site and adjacent habitats to support special-status plant and/or animal species. In addition, the staff identified whether the site could serve as an important regional wildlife movement corridor or habitat linkage to other open space areas, and whether any potential jurisdictional resources under the protection of the ACOE, the CDFW, and/or RWQCB potentially occur on the site. Since the purpose of this evaluation was to generally identify potential biological constraints to development, focused/protocol-level surveys for plant or animal species were not conducted. 2.0 METHODOLOGY On March 25, 2021, a reconnaissance-level biological survey/habitat assessment of the parcel was conducted by Elevated Entitlements staff. The entire site within the proposed development footprint and immediate adjacent areas was traversed on foot to assess site characteristics and dominant habitat areas on the site. Prior to visiting the site, a query of the California Department of Fish and Game’s California Natural Diversity Database (CNDDB) (CDFW 2021) and California Native Plant Society Database (CNPS 2021) was conducted to identify special-status plant or animal species previously recorded in the area. The CNDDB lists historical and recently recorded occurrences of both special-status plant and animal species, and the CNPS database lists historical and recent occurrences of special-status plant species. The areas searched included a minimum radius of 1 mile around the project site and included the Cathedral U.S. Geological Survey (USGS) 7.5-minute quadrangle (project location), and the Myoma Quadrangles. A list of plants and wildlife observed on the property was created using the Plant Taxonomy by Holland (1986) and Sawyer et al. (2009). Other standard references used for the survey include Sibley (2003), Stebbins (2003), Jameson and Peters (2004). Prior to conducting the field survey of the project site, EE staff also reviewed aerial photography of the Study Area (Google Earth Maps, 2019), U.S. Fish and Wildlife Service Critical Habitat Online Mapper (http://criticalhabitat,fws.gov/), and the Coachella Valley MSHCP (CVMSHCP) web site (https://cvmshcp.org/index.htm). In addition, relevant biological assessment reports for past projects in the vicinity was also reviewed as reference, The potential for special-status species to occur on the project site is based on the proximity of the site to recorded occurrences listed in the CNDDB and CNPS databases, on-site vegetation and Page 528 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 3 habitat quality, topography, elevation, soils, surrounding land uses, habitat preferences, and geographic ranges of special-status plant and animal species known to occur in the region. 3.0 REGULATORY FRAMEWORK Federal Endangered Species Act (ESA) – The United States Fish and Wildlife Service (USFWS) and the National Marine Fisheries Service are the designated federal agencies accountable for administering the ESA. The ESA defines species as “endangered” or “threatened” and provides regulatory protection at the federal level. x Section 9 of the ESA prohibits the “take” of listed (i.e., endangered or threatened) species. The ESA’s definition of take is “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, collect, or attempt to engage in such conduct.” Recognizing that take cannot always be avoided, Section 10(a) includes provisions for take that is incidental to, but not the purpose of, otherwise lawful activities. Specifically, Section 10(a) (1) (A) permits (authorized take permits) are issued for scientific purposes. Section 10(a) (1) (B) permits (incidental take permits) are issued for the incidental take of listed species that does not jeopardize the species. x Section 7 (a) (2) requires federal agencies to evaluate the proposed project with respect to listed or proposed listed species and their respective critical habitat (if applicable). Federal agencies must employ programs for the conservation of listed species and are prohibited from authorizing, funding, or carrying out any action that would jeopardize a listed species or destroy or modify its “critical habitat.” o As defined by the ESA, “individuals, organizations, states, local governments, and other non- federal entities are affected by the designation of critical habitat only if their actions occur on federal lands, require a federal permit, license, or other authorization, or involve federal funding. x Section 10(a) of the ESA authorizes the issuance of incidental take permits and establishes standards for the content of habitat conservation plans (see Section 3.3 below). Migratory Bird Treaty Act (MBTA) – Treaties signed by the U.S., Great Britain, Mexico, Japan, and the countries of the former Soviet Union make it unlawful to pursue, capture, kill, and/or possess, or attempt to engage in any such conduct to any migratory bird, nest, egg or parts thereof listed in the document. As with the ESA, the MBTA also allows the Secretary of the Interior to grant permits for the incidental take of these protected migratory bird species. National Environmental Policy Act (NEPA) – If portions of a proposed project could fall under the jurisdiction of a federal agency (i.e., U.S. Bureau of Reclamation, U.S. Army Corps of Engineers) they are subject to environmental review pursuant to NEPA. NEPA establishes certain criteria that must be adhered to for any project that is “financed, assisted, conducted or approved” by a federal agency. The federal lead agency is required to “determine whether the proposed action will significantly affect the quality of the human environment.” Page 529 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 4 Section 404 of the Clean Water Act – This section of the Clean Water Act, administered by the U.S. Army Corps of Engineers (USACE), regulates the discharge of dredged and fill material into “waters of the United States.” The USACE has created a series of nationwide permits that authorize certain activities within waters of the U.S. provided that the proposed activity does not exceed the impact threshold of 0.5 acre for nationwide permits, takes steps to avoid impacts to wetlands and other designated U.S. waters where practicable, minimizes potential impacts to wetlands, and provides compensation for any remaining, unavoidable impacts through activities to restore or create wetlands. For projects that exceed the threshold for nationwide permits, individual permits under Section 404 can be issued. An inspection of the project site to determine presence or absence of potential jurisdictional wetlands and waters was conducted during the above mentioned general biological assessment. State California Endangered Species Act (CESA) – This legislation is similar to the federal ESA, but it is administered by the California Department of Fish and Wildlife (CDFW – formerly Department of Fish and Game). The CDFW is authorized to enter into “memoranda of understanding” with individuals, public agencies, and other institutions to import, export, take, or possess state-listed species for scientific, educational, or management purposes. CESA prohibits the take of state- listed species except as otherwise provided in state law. Unlike the federal ESA, the CESA applies the take prohibitions to species currently petitioned for state-listing status (candidate species). State lead agencies are required to consult with CDFW to ensure that actions are not likely to jeopardize the continued existence of any state-listed species or result in the destruction or degradation of occupied habitat. California Environmental Quality Act (CEQA) – The basic goal of CEQA is to maintain a high- quality environment now and in the future. The specific goals are for California's public agencies to: 1. identify the significant environmental effects of their actions; and, either 2. avoid those significant environmental effects, where feasible; or 3. mitigate those significant environmental effects, where feasible. CEQA applies to "projects" proposed to be undertaken or requiring approval by state and local government agencies. Projects are activities that have the potential to have a physical impact on the environment and may include the enactment of zoning ordinances, the issuance of conditional use permits and the approval of tentative subdivision maps. Where a project requires approvals from more than one public agency, CEQA requires one of these public agencies to serve as the "lead agency." A "lead agency" must complete the environmental review process required by CEQA. The most basic steps of the environmental review process are to: 4. Determine if the activity is a "project" subject to CEQA; 5. Determine if the "project" is exempt from CEQA; 6. Perform an Initial Study to identify the environmental impacts of the project and determine whether the identified impacts are "significant". Based on its findings of "significance", the lead agency prepares one of the following environmental review documents: Page 530 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 5 a) Negative Declaration if it finds no "significant" impacts; b) Mitigated Negative Declaration if it finds "significant" impacts but revises the project to avoid or mitigate those significant impacts; c) Environmental Impact Report (EIR) if it finds "significant" impacts. While there is no ironclad definition of "significance", Article 5 of the State CEQA Guidelines provides criteria to lead agencies in determining whether a project may have significant effects. The Native Plant Protection Act (NPPA) – The NPPA includes measures to preserve, protect, and enhance rare and endangered native plant species. Definitions for “rare and endangered” are different from those contained in CESA. However, the list of species afforded protection in accordance with the NPPA includes those listed as rare and endangered under CESA. NPPA provides limitations on take as follows: “no person will import into this state, or take, possess, or sell within this state” any rare or endangered native plants, except in accordance with the provisions outlined in the act. If a landowner is notified by CDFW, pursuant to section 1903.5 that a rare or endangered plant is growing on their property, the landowner shall notify CDFW at least 10 days prior to the changing of land uses to allow CDFW to salvage the plants. Natural Community Conservation Planning (NCCP) Program – A NCCP, which is managed by the CDFW, is intended to conserve multiple species and their associated habitats, while also providing for compatible use of private lands. Through local planning, the NCCP planning process is designed to provide protection for wildlife and natural habitats before the environment becomes so fragmented or degraded by development that species listing is required under CESA. Instead of conserving small, often isolated “islands” of habitat for just one listed species, agencies, local jurisdictions, and/or other interested parties have an opportunity through the NCCP to work cooperatively to develop plans that consider broad areas of land for conservation that would provide habitat for many species. Partners enroll in the programs and, by mutual consent, areas considered to have high conservation priorities or values are set aside and protected from development. Partners may also agree to study, monitor, and develop management plans for these high value “reserve” areas. The NCCP provides an avenue for fostering economic growth by allowing approved development in areas with lower conservation value. The project site is in a combined Habitat Conservation Plan (HCP) / NCCP, see Section 1.3.3. Sections 1600-1603 of the State Fish and Game Code – The California Fish and Game (Wildlife) Code, pursuant to Sections 1600 through 1603, regulates all diversions, obstructions, or changes to the natural flow or bed, channel, or bank of any river, stream, or lake that supports fish or wildlife resources. Under state code, CDFW jurisdiction is assessed in the field based on one, or a combination, of the following criteria: 7. At minimum, intermittent and seasonal flow through a bed or channel with banks and that also supports fish or other aquatic life. 8. A watercourse having a surface or subsurface flow regime that supports or that has supported riparian vegetation. 9. Hydrogeomorphically distinct top-of-embankment to top-of-embankment limits. 10. Outer ground cover and canopy extents of, typically, riparian associated vegetation species that would be sustained by surface and/or subsurface waters of the watercourse. Page 531 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 6 The CDFW requires that public and private interests apply for a “Streambed Alteration Agreement” for any project that may impact a streambed or wetland. The CDFW has maintained a “no net loss” policy regarding impacts to streams and waterways and requires replacement of lost habitats on at least a 1:1 ratio. Section 2081 of the State Fish and Game Code – Under Section 2081 of the California Fish and Game Code, the CDFW authorizes individuals or public agencies to import, export, take, or possess state endangered, threatened, or candidate species in California through permits or memoranda of understanding. These acts, which are otherwise prohibited, may be authorized through permits or “memoranda of understanding” if (1) the take is incidental to otherwise lawful activities, (2) impacts of the take are minimized and fully mitigated, (3) the permit is consistent with regulations adopted in accordance with any recovery plan for the species in question, and (4) the applicant ensures suitable funding to implement the measures required by the CDFW. The CDFW shall make this determination based on the best scientific information reasonably available and shall include consideration of the species’ capability to survive and reproduce. Section 3505.5 of the State Fish and Game Code – This section makes it unlawful to take, possess, or destroy any birds in the order Falconiformes or Strigiformes (birds-of-prey, e.g.: owls, hawks, eagles, etc.) or to take, possess, or destroy the nest or eggs of any bird-of-prey. CVAG/Coachella Valley Conservation Commission Coachella Valley Multiple Species Habitat Conservation Plan (CVMSHCP)/ NCCP – Subsequent to the establishment of the Fringe-toed Lizard HCP in the early 1980s, continued growth in the Coachella Valley impacted other species and their habitats. Several species that occur in the Coachella Valley have been listed as threatened or endangered, and several more have been proposed for listing or identified as candidates for listing. A scoping study was prepared for the Coachella Valley Association of Governments (CVAG) by the Coachella Valley Mountains Conservancy (Conservancy) in 1994. It was recommended that a Multiple Species Habitat Conservation Plan (MSHCP) be prepared for the entire Coachella Valley and surrounding mountains to address potential state and federal Endangered Species Act issues in the proposed MSHCP area. Subsequently, a Memorandum of Understanding (MOU) was developed to govern the preparation of the MSHCP. In late 1995 and early 1996, the cities of Cathedral City, Coachella, Desert Hot Springs, Indian Wells, Indio, La Quinta, Palm Desert, Palm Springs, and Rancho Mirage, Coachella Valley Water District, Riverside County Flood Control and Water Conservation District, Imperial Irrigation District, the County of Riverside, USFWS, CDFW, the Bureau of Land Management (BLM), the U. S. Forest Service (USFS), and the National Park Service (NPS) signed the MOU to initiate the planning effort. In late 1996 and early 1997 the parties to the MOU approved an amendment stipulating that the MSHCP will meet the intent of the Natural Community Conservation Planning (NCCP) Act as well as the California Endangered Species Act (CESA) and the Federal Endangered Species Act (FESA), and, further, that the MOU constitutes an agreement to prepare a NCCP. Final state and federal resource agency approval and permitting for the CVMSHCP occurred in September and October 2008. Preparation of the CVMSHCP serves two main purposes: balancing environmental protection and economic development objectives in the CVMSHCP area, and simplifying compliance with endangered species related laws. The CVMSHCP intends to accomplish this through the following means. Conserving adequate habitat in an unfragmented manner to provide for the protection and security of long-term viable populations of the species that are either currently listed as threatened or endangered, are proposed for listing, or are believed by the Scientific Advisory Page 532 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 7 Committee, USFWS and CDFW, to have a high probability of being proposed for listing in the future if not protected by the CVMSHCP. It is intended to proactively address requirements of the state and federal endangered species acts to avoid disruption of economic development activities in the CVMSHCP area. For species that are currently listed as threatened or endangered, the CVMSHCP is the basis for securing incidental take permits. For species that are not currently listed, the CVMSHCP addresses the conservation of the species and its habitat as if the species were listed, so that if the species is subsequently listed, an incidental take permit will be issued on the basis of the CVMSHCP, and no further mitigation requirements will be imposed. A further goal of the plan is to remove the need to list species as threatened or endangered by taking proactive conservation measures. It should be recognized that the CVMSHCP does not address Section 404 of the Clean Water Act nor the Streambed Alteration Agreement provisions of the California Fish and Game Code, (Section 1600). Projects that currently require a Section 404 permit or Streambed Alteration Agreement will continue to do so notwithstanding the CVMSHCP. Additionally, the CVMSHCP does not provide a means of compliance with the federal Migratory Bird Treaty Act (MBTA). The CVMSHCP website on the subject property was consulted to determine the parcel number that were surveyed on the subject project site, and their status with regards to the various county plan areas. The subject parcel do not occur within any Conservation Areas, but occur within the overall CVMSHCP planning area, to which the City of Palm Desert is a signatory to. 4.0 EXISTING CONDITIONS 4.1 GENERAL Climate The project area lies within the confines of a geographical region known as the Colorado Desert (Jaeger, 1957). As is typical of this subdivision of the Sonoran Desert, annual rainfall averages less than six inches (National Climatic Center, 2013). Most precipitation falls during the winter and late spring with occasional summer storms accounting for approximately one fifth of the annual total. Winter days are mild, averaging 71 degrees Fahrenheit. Winter nights occasionally drop to near freezing. The month of July brings the hottest temperatures with daytime highs averaging 109 degrees F. Physical Features/Soils The subject project site consists of one parcel that is generally rectangular in shape and is approximately 3.91-acres. The parcel is generally flat, and gently sloping towards the north and east. The elevation ranges from approximately 225 feet above sea level at the eastern portion to approximately 258 feet at the western portion. The USDA’s online Web Soil Mapper (www.websoilsurvey.sc.egov.usda.gov) was reviewed to obtain information about the soils on the Project site. The soils on the Project site are Myoma fine sand (5 to 15 percent slopes). Soil characteristics are uniform over the entire site. Soil is composed of wind-blown alluvium created by persistent air movements from the northwest. This process increased in intensity with the drying out of the Coachella Valley at the close of the Pleistocene epoch ending 10,000 years before present. The presence of a wall on the south side of both Page 533 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 8 parcel associated with the adjacent residential buildings, has resulted in some sand stabilization next to the wall. Vegetation The vegetation of the project site is sparse and consists of a single habitat type that can be characterized as disturbed Sonoran creosote bush scrub. This type of vegetation community is characterized by creosote bush (Larrea tridentata), which is the most conspicuous plant of this vegetation type. Other native plants in less conspicuous numbers include Indigo bush (Psorothamnus schottii) and Burro brush (Hymenoclea salsola), interspersed among the cresote bush and occurring sparingly. The ground cover is predominantly consisting of non-native common Mediterranean grass (Schcismus barbatus). Other non-native plants occurring on the parcel includes: Salt cedar (Tamarix ramosissima), horseweed (Erigeron bonariensis) and ornamental flowers, occurring right next to the walls of the adjacent housing. The creosote bushes predominantly occur along the southern wall separating the parcel from the adjacent housing. This may be due to the precipitation that pools next to the wall or due to irrigation of the lawns on the adjacent property. In the western portion of the parcel and the eastern portion of parcel are piles of wooden debris. Small stockpiles of compacted sand and construction debris material were also detected on both sites. The vegetation communities are shown in Figure 4, Vegetation Communities Map. Figure 5 contains photographs of the site that depict the vegetation and site conditions. 4.2 WILDLIFE During the site survey, the side-blotched lizard (Uta stansburiana) and western whiptail (Cnemidophorus tigris) were detected on the site. Several small burrows, likely occupied by these common reptiles were also detected throughout the site. Bird species that are common, detected during the survey include: Common raven (Corvus corax), mourning dove (Zenaida macroura) and a house finch (Carpodacus mexicanus). No nests of birds were detected. 4.3 JURISDICTIONAL WATERS The parcel is dry, vacant, and covered by loose sands, as seen in Figures 1, 2, and 3 containing representative photos of the project site. There are no drainages or other aquatic features that could potentially be under the jurisdictional authority of the California Department of Fish and Game, U.S. Army Corps of Engineers, or the Regional Water Quality Control Board. 4.4 HABITAT CONNECTIVITY AND WILDLIFE MOVEMENTS While the project site does support some foraging habitat for wildlife species, it does not represent a linkage between significant natural habitats. Common urban wildlife such as coyotes and black-tailed rabbits could utilize the project site for temporary resting and foraging and use the parcel as transients. The highly urbanized setting surrounding the project site and the presence of roadways surrounding the parcel, present a severe constraint for wildlife movement. Page 534 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Biological Constraints & Recommendations March 29, 2021 9 5.0 BIOLOGICAL CONSTRAINTS & RECOMMENDATIONS No special-status plant or animal species were observed during the site visit. Based on a 1-mile radius query of the California Natural Diversity Database (CNDDB), a list of special-status plant and animal species that have the potential to occur on site is provided in Table 1, Special-Status Plant or Animal Species with Potential to Occur on the Project Site. In addition to the list of species yielded for the 1-mile radius query, additional species were evaluated for their potential to occur on the site, based on literature review of other studies in the region. 5.1 SPECIAL STATUS PLANTS AND ANIMALS No special-status plant or animal species were observed during the site visit. As previously described, the site visit was a “reconnaissance-level” survey and therefore did not include focused surveys for such species. A complete list of special-status plant and animal species that have the potential to occur on site is provided in Table 1, Special-Status Plant or Animal Species with Potential to Occur on the Site. Of the 12 special status plant and wildlife species that could potentially occur in the project area, none have a high potential to occur on-site due to various factors, including: the highly urbanized setting of the Project area, open access of the site, evidence of human disturbance (trash and debris) on the site. All these factors greatly limit the suitability of the site for these species. Page 535 BIOLOGICAL ASSESMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT References March 29, 2021 1 Common Name Scientific Name Status General Habitat Description Occurrence Potential on Project SiteState Federal CNPS CVMSHCP Plants Astragalus lentiginosus var. coachellae 1B.1 Yes Annual/Perennial herb found in sandy flats, washes, alluvial fans, sand field, dunes and dune edges, at 130 to 2,150 feet, a CA endemic. Moderate. Loose, sandy soils present on site. Species not observed during surveys. Moderate potential to occur due to disturbed nature of site. This plant species is listed as federally Endangered Flat-seeded spurge (Euphorbia platylsperma)1B.2 No Annual herb found in desert dunes and Sonoran Desert scrub habitat at 210 to 330 feet elevations. Very Low. The flat- seeded spurge is an extremely rare ephemeral herb known to occur on sandy soils in the Sonoran Desert. This species was not detected during surveys. The disturbed nature of the site makes it unsuitable habitat. Ribbed Cryptantha (Cryptantha costata)4.3 No Annual herb found in sandy soils and blooms between February and May. . Low. This plant is an uncommon ephemeral plant. This species was not detected during the surveys. The project site has suitable habitat but the quality of habitat is low. The ribbed cryptantha is not listed as rare, threatened or endangered by either the state or federal governments. Glandular ditaxis (Ditaxis claryana) 2B.2 Yes This perennial herb is found in sandy soils in creosote bush scrub of the Sonoran and Mojave deserts below 1,500 feet. Very Low. A very rare perennial herb that It is restricted to sandy environments in the Sonoran Desert and has been found in Table 1 Special-Status Plant/Animal Species with Potential to Occur on Project Site Page 536 BIOLOGICAL ASSESMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT References March 29, 2021 2 Blooms from December through March. Imperial, Riverside, and San Bernardino Counties, and Arizona and northern Mexico. the Coachella Valley at elevations similar to those found on the project site. Since the glandular ditaxis is a perennial, it is likely that it would have been detected during the on-site surveys. It was not detected and therefore presumed to not likely to occur onsite. This species is not listed as rare, threatened or endangered by either the state or federal governments nor is it proposed to be listed at this time. Reptiles Flat-tailed horned lizard (Phrynosoma mcallii) CSC Yes Fine sand in desert washes and flats with vegetative cover and ants, generally below 600 feet elevation in Riverside, San Diego, and Imperial Counties. Moderate. Suitable habitat is present on site in the form of loose, sandy soils, though degraded. Additionally, site is isolated from sandy sources. There are, however, several records of this species in the project area. The Project site does not occur within the Flat-tailed horned lizard Preserve Areas. Coachella Valley fringe-toed lizard (Uma inornate) SE FT Yes Sandy areas of the Coachella Valley (dunes and sand field habitats) Moderate. Suitable habitat is present on site in the form of loose, sandy soils, though degraded. Additionally, site is isolated from sandy sources. There are, however, several records of this Page 537 BIOLOGICAL ASSESMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT References March 29, 2021 3 species in the project area. Birds Burrowing owl (Athene cunicularia) CSC Yes This species prefers Grasslands, nests in burrows. This species also inhabits man-made structures such as culverts and pipes. Often occupies unused ground squirrel burrows. Moderate. The open nature of the project site to human access and traffic renders this site less than suitable habitat for the species, this species was not detected during the survey, nor was any burrows or signs of owls detected. However, due to several occurrence records of this species in the project area, there is a moderate potential that this species may occur on site. Loggerhead shrike (Lanius ludovicianus) CSC No Prefers open fields with scattered trees or shrubs, open country with short vegetation, pastures, old orchards, cemeteries, golf courses, riparian areas, and open woodlands. Moderate:Both foraging an nesting habitat found on site, although the habitat on site is less suitable for nesting, This species is not covered under the MSHCP, has no special federal status but is considered a Species of Special Concern by the State of California, This species was not detected during the survey nor were any nests found. Le Conte’s thrasher (Taxostoma lecontei) CSC Yes Resident of open desert wash, scrub, alkali scrub, succulent scrub habitats, nests in dense spiny shrubs and cacti in washes. This species is closely Very low.The cactus species which the Le Conte’s thrasher strongly prefers for nesting, is absent from the Project site and, therefore, it is presumed that this Page 538 BIOLOGICAL ASSESMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT References March 29, 2021 4 associated with golden cholla, an arborescent cactus that provides a nesting site for the thrasher species does not nest on the Project site. There is less than suitable foraging habitat on site for this species. This species is covered under the CVSMSHCP. Prairie falcon (Falco mexicana) WL No Inhabits a variety of open terrain, nests on cliffs Low.Foraging only, no nesting habitat present, Mammals Palm Springs Pocket Mouse (Perognathus longimembris) CSC Yes Most common in creosote- dominated scrub, but also in desert riparian, scrubs, wash, and sagebrush habitats Moderate: The Project site supports habitat for this species, but less than suitable. This species was not detected during the general survey. This is a covered species under the CVMSHCP. Coachella Valley (Palm Springs) round-tailed ground squirrel Moderate: The Project site supports habitat for this species, but less than suitable. This species was not detected during the general survey. This is a covered species under the CVMSHCP. There are several occurrence records for this species in the project area. Status Key: Federal: FE = Federal Endangered; FT = Federal Threatened; FSC = Federal Species of Concern State: CE= California Endangered; CSC = California Species of Concern; CR = California Rare, WL= Watch List, FP= Fully Protected CNPS: Rare Plant Rank 1B = Rare, Threatened or Endangered in California and elsewhere 2 = Rare, Threatened or Endangered in California, but more common elsewhere 3 = Plants about which we need more information – a review list 4 = Plants of limited distribution - a watch list .1 = seriously threatened in California .2 = fairly threatened in California .3 = not very threatened in California Page 539 BIOLOGICAL ASSESMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT References March 29, 2021 5 5.2 NATIVE VEGETATION/HABITAT The implementation of the proposed project is likely to impact a nominal amount of disturbed Creosote bush scrub habitat and sandy soils. 5.3 NATIVE AND NON-NATIVE TREES There are no native trees on the Project site. As indicated earlier, there are a number of non- native salt cedar, occurring on the Project site. 5.4 PROJECT CONSTRAINTS & RECOMMENDED MITIGATION MEASURES Protected Birds The extent of the site has a moderate potential to host native bird species throughout their nesting period, for shrub, and ground nesting bird species. Development Constraint:Native breeding birds, their active nests, eggs, and young are protected under the Fish and Game Code of California and the federal Migratory Bird Treaty Act (MBTA). In addition, avoidance of impacts to nesting migratory and resident birds is a requirement of the federal permit issued for the CVMSHCP. Therefore, potential impacts on bird nests from grading and/or construction-related activities should be avoided. Potential Mitigation:In order to avoid impacting nesting birds, avoidance of project-related disturbance during the nesting season would be required (generally from approximately February 1 to August 31). Alternatively, nesting bird surveys conducted by a qualified biologist immediately prior to project related disturbance during the nesting season would be required. If nesting birds are present, no work would be permitted near the nest until young have fledged. While there is no established protocol for nest avoidance, when consulted, the CDFW generally recommends avoidance buffers of about 500 feet for birds-of-prey, and 100 – 300 feet for songbirds. The implementation of this mitigation measure may be conducted in concurrence with the Burrowing Owl pre-construction surveys, which would also ensure avoidance of other protected bird species such as the Loggerhead Shrike and Le Conte’s thrasher, which have a potential to occur on the site. Burrowing Owl Development Constraint: Burrowing owl is deemed to have a moderate potential to occur on the project site. This is a covered species under the CVMSHCP. Since the Project site is not within a Conservation Area of the CVMSHCP, the Project is not required to conduct protocol surveys for this species. However, a Project is still required by law (DFG codes and MBTA) to avoid “take” of burrowing owls. Page 540 BIOLOGICAL ASSESMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT References March 29, 2021 6 Potential Mitigation: Impacts to this species, if present on the site, can be accomplished by take avoidance (pre-construction) surveys. CDFW recommends two take avoidance surveys. The first should occur between 14 and 30 days prior to ground disturbance and the second within 24 hours of ground disturbance. If owls are located on the project site, conducting the first clearance survey 14 to 30 days prior to ground disturbance enables the project proponent to consult with CDFW to determine what course of action is needed, such as the use of exclusion devices (if applicable) to discourage owls from using burrows that are believed to be in jeopardy of being impacted by implementation of the project. The project site lies within the boundaries of the Coachella Valley Multiple Species Habitat Conservation Plan (CVMSHCP) and is, therefore, subject to per residential unit fees. The precise amount will be determined by the City of Palm Desert and is based upon the fee requirements at the time of approval. In addition to the implementation of the recommended mitigation measures discussed above, the payment of the mitigation fee to the City would offset impacts to species that are not covered under the CVMSHCP and therefore, the project would have less than significant adverse impacts to biological resources beyond the confines of the proposed project development. Page 541 BIOLOGICAL ASSESMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT References March 29, 2021 1 6.0 REFERENCES Baldwin, B.G., D.H. Goldman, D.J. Keil, R. Patterson, T.J. Rosatti, and D.H. Wilken (eds.). 2012. The Jepson Manual, vascular plants of California, second edition. University of California Press, Berkeley, CA. California Department of Fish and Game (CDFG). 2021. California Department of Fish and Game Natural Diversity Database © 2003, Version 3.0.5, Update. California Native Plant Society (CNPS). 2021. “California Native Plant Society Inventory of Rare and Endangered Plants.” < http://cnps.web.aplus.net/cgibin/inv/inventory.cgi >. Jaeger, E.C. 1957. The North American Deserts. Stanford University Press, Stanford, California. National Climatic Data Center. 2013. Climate Summaries, Asheville, North Carolina. Rincon Consultants, Inc. 2008. Biological Resources Assessment Agoura Medical Partners Project, Chesebro and Agoura Roads, Agoura Hills, County of Los Angeles, California. Sawyer, J.O., T. Keeler-Wolf, and J.M. Evens. 2009. A Manual of California Vegetation, second edition. California Native Plant Society, Sacramento, CA. Sibley, D. 2003. The Sibley Field Guide to Birds of Western North America. Alfred A. Knopf, New York, NY. Stebbins, Robert. 2003. A Field Guide to Western Reptiles and Amphibians. Houghton Mifflin Company, New York, NY. Page 542 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 1 Appendix A PROJECT FIGURES Page 543 1SPKFDU7JDJOJUZ.BQ 'JHVSFSanta Barbara Condominiums Palm DesertMap not to scalePage 544 1SPKFDU-PDBUJPO.BQ 'JHVSF4BOUB#BSCBSB$POEPNJOJVNT1BMN%FTFSUMap not to scale130+&$5Shepard LaneGerald Ford Dr.Page 545 Map not to scaleProject Aerial Map, Figure 36DQWD%DUEDUD &RQGRPLQLXPV3DOP'HVHUWShepard LaneGerald Ford Dr.Page 546 Figure 4: Project Site Plan6DQWD%DUEDUD&RQGRPLQLXPV3DOP'HVHUW [ [ Page 547 CB = Creosote BushDSCS = Disturbed Sonoran Creosote Scrub ELEVATEDENTITLEMENTSDSCSCB7FHFUBUJPO$PNNVOJUJFT.BQ 'JHVSF4BOUB#BSCBSB$POEPNJOJVNT1BMN%FTFSU1BSDFM#PVOEBSZ-FHFOEPage 548 .4)$1.BQ 'JHVSFSanta Barbara Condominiums Palm Desert ELEVATEDENTITLEMENTSProject Location C7MSHCP Conservation "SFBTCity Boundaries CVMSHCP Planning BoundaryPage 549 MSHCP Map, Figure 6Santa Barbara Apartment Condominiums Palm Desert APN #’s: 694300003 and 4.9 Acres06+&30DS)LJXUH6DQWD%DUEDUD&RQGRPLQLXPV3DOP'HVHUWProject Location MSHCPCity BoundariesELEVATEDENTITLEMENTSPage 550 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 6 Figure 5 Project Site Photograph 1 Photo 1. View looking west from Shepherd Lane. Photos shows Creosote brush scrub vegetation and sandy substrate. Page 551 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 7 Figure 6 Project Site Photograph 2 Photo 2. View looking north towards Gerald Ford Drive. View shows sandy substrate and groundcover composed of non-native grass of Mediterranean origin. Page 552 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 8 Figure 7 Project Site Photograph 3 Photo 3. View looking south towards adjacent residential house and wall. Large shrubs are Creosote bush. Page 553 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 9 Figure 8 Project Site Photograph 4 Photo 4.View looking southeast. Foreground shows sandy soils and limited ground cover and in the background are large creosote bushes and a wall of adjacent residential buildings. Page 554 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 10 Figure 9 Project Site Photograph 5 Photo 5. View looking south at the wooden piles and construction debris materials, in the western portion of the parcel. Page 555 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 11 Figure 10 Project Site Photograph 6 Photo 6.Photo of a small burrow, likely used by small reptiles. Page 556 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 12 Photo 7. View looking east towards Shepherd Lane. Photo shows debris and trash collected along the wall of the adjacent residential houses. Page 557 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 13 Photo 8. View looking east towards Shepherd Lane. Photo shows non-native salt cedar in the foreground. Page 558 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 14 Photo 9. View looking East from Shepherd Lane. View shows sandy soils as substrate, and creosote bush on the right-hand side of the photo view, with a wall of the adjacent residential housing. Page 559 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 15 Photo 10. View looking southeast at large creosote bushes in front of the wall associated with adjacent residential development. The trees seen in the photo are located on adjacent property. Page 560 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 16 Photo 11. View looking north east towards Gerald Ford Road. The view shows the characteristic Sonoran Creosote Bush Scrub vegetation, with sandy substrate. Page 561 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 17 Photo 12. Photo of a small burrow, likely occupied by a lizard species. Page 562 BIOLOGICAL ASSESSMENT FOR PALM DESERT SANTA BARBARA CONDO PROJECT Appendix A Project Figures March 29, 2021 18 Photo 13. View looking southeast at the far eastern corner of the parcel, Photo shows a non- native salt cedar shrub in the background. Page 563 Page 564 Page 565 Page 566 Page 567 Page 568 Page 569 Page 570 Page 571 Page 572 Page 573 Page 574 Page 575 Page 576 Page 577 Page 578 Page 579 Page 580 Page 581 Page 582 Page 583 Page 584 Page 585 Page 586 Page 587 Page 588 Page 589 Page 590 Page 591 Page 592 Page 593 Page 594 Page 595 Page 596 Page 597 Page 598 Page 599 Page 600 Page 601 Page 602 Page 603 Page 604 Page 605 Page 606 Page 607 Page 608 Page 609 Page 610 Page 611 NOI to Adopt Neg. Dec., Mit. Neg. Dec.1FORM “D” NOTICE OF INTENT TO ADOPT A NEGATIVE DECLARATION/ MITIGATED NEGATIVE DECLARATION Notice is hereby given that the public agency named below has completed an Initial Study of the following described project at the following location: Public Agency:City of Palm Desert Project Name:PP 21-0008/TPM 38033/CZ 21-0001 and MND Santa Barbara Condominiums Project Description:The applicant is proposing 32 condominium units and a clubhouse with a pool/spa within 3.91 acres of undeveloped land. The project includes 16 single-story duplex buildings around the perimeter of the property. The single-story clubhouse and pool/spa are located along Gerald Ford Drive. The non-gated project is designed with two (2) vehicular access driveways. The Gerald Ford Drive entrance allows a right turn in and a right turn out and the other entrance along Shepherd Lane allows for full ingress and egress with meandering sidewalks along Gerald Ford Drive and Shepherd Lane. The project requires a Change of Zone from five (5) units per acre (PR-5) to eight (8) units per acre and a Mitigated Negative Declaration for environmental purposes. The project density of 32 units complies with the General Plan designation of Conventional Suburban Neighborhood, which has density allowances from three to eight (3-8) units per acre. In addition, the Tentative Tract Map (TTM) for condominium purposes (TTM 38033) will be concurrently processed with the entitlement application. Project Location – Identify Street address and cross streets or attach a map showing project site (preferably a USGS 15’ or 7 1/2’ topographical map identified by quadrangle name): APN: 694-300-003 Located on the southwest corner of Gerald Ford Drive and Shepherd Lane This Initial Study was completed in accordance with the Lead Agency’s Guidelines for Implementing the California Environmental Quality Act. This Initial Study was undertaken for the purpose of deciding whether the project may have a significant effect on the environment. Based on such Initial Study, the Lead Agency’s Staff has concluded that the project will not have a significant effect on the environment and has therefore prepared a Draft Mitigated Negative Declaration. The Initial Study reflects the independent judgment of the Lead Agency. The Project site IS on a list compiled pursuant to Government Code section 65962.5. The Project site IS NOT on a list compiled pursuant to Government Code section 65962.5. The proposed project IS considered a project of statewide, regional or area wide significance. The proposed project IS NOT considered a project of statewide, regional or area wide significance. The proposed project WILL affect highways or other facilities under the jurisdiction of the State Department of Transportation. The proposed project WILL NOT affect highways or other facilities under the jurisdiction of Page 612 NOI to Adopt Neg. Dec., Mit. Neg. Dec.2FORM “D” the State Department of Transportation. A scoping meeting WILL be held by the Lead Agency. A scoping meeting WILL NOT be held by the Lead Agency. If the project meets the criteria requiring the scoping meeting, or if the agency voluntarily elects to hold such a meeting, the date, time and location of the scoping meeting are as follows: Date: Time: Location: Copies of the Initial Study, technical reports, and Draft Mitigated Negative Declaration are on file and are available for public review at the Lead Agency’s office, located at: 73510 Fred Waring Drive, Palm Desert, CA 92260, and within the link. http://cpdftp.org/link/2SVnRGCvF908MAirrOAUcz. Contact Kevin Swartz, Associate Planner at kswartz@cityofpalmdesert.org for questions regarding the proposed project or to obtain an electronic copy of the Mitigated Negative Declaration. Lead Agency address: 73510 Fred Waring Drive, Palm Desert, CA 92260 Comments will be received from: December 21, 2021 – January 12, 2022 Any person wishing to comment on this matter must submit such comments, in writing, to the Lead Agency on or prior to January 12, 2022. Comments of all Responsible Agencies are also requested. The Lead Agency will initially consider the project and the Draft Mitigated Negative Declaration at its tentative Planning Commission meeting on: Date: January 18, 2022 Time: 6:00 p.m. The City Council will then consider the project and the Final Mitigated Negative Declaration at future date. If the Lead Agency finds that the project will not have a significant effect on the environment after the incorporation of mitigation measures, it may adopt the proposed Mitigated Negative Declaration and approve the project. This means that the Lead Agency may proceed to consider the project without the preparation of an Environmental Impact Report. Date Received for Filing: Kevin Swartz Staff (Clerk Stamp Here) Associate Planner Title Page 613 Page 614 Page 615 Page 616 Page 617 Page 618 Page 619 Page 620 Page 621 Page 622 Page 623 Page 624 Page 625 Page 626 Page 627 Page 628 ARCHITECTURAL REVIEW COMMISSION NOTICE OF ACTION November 29, 2021 Desert Luxury Apartments 2755 S. Nellis Boulevard, Suite 10 Las Vegas, NV 89121 Subject: Consideration of a recommendation to the Planning Commission for approval of a Change of Zone to establish a higher residential density (8 units per acre), Tentative Tract Map 38033, and a Precise Plan to construct a 32-unit single-story condominium project, clubhouse, and pool/spa on 3.91 acres at the southwest corner of Gerald Ford Drive and Shepherd Lane. The Architectural Review Commission of the City of Palm Desert considered your request and took the following action at its meeting of November 23, 2021: By Minute Motion, the Architectural Review Commission continued Case Nos. PP 21- 0008, C/Z 21-0001, TTM 21-0003 (TTM 38033), and MND, subject to the following: 1) Explore other design options which would break up the monotony of the layout, allow for widening of the community’s main street, provide additional length to driveways, and easier trash collection; 2) Consider options which would provide a break to the long continuous linear sidewalk and incorporate more design interest (meandering); 3) Consider alternative placement of HVAC units and ensure equipment is properly screened; 4) Consider undulation of garage doors by staggering the buildings; 5) Extend parapets to ensure edges are properly concealed; 6) Review plans to ensure accurate depiction of changes in plane; 7) Windows on front elevations which are street exposed should have a recess of 6 inches or more; 8) Provide a perspective of dwelling units from Gerald Ford; 9) Remove stucco short wall and consider more prominent massing on walls with veneer from front perspective, (Sheet A-6.2) as discussed; 10) Provide a sight section study to determine view from Scholar Lane; 11) Provide plan which shows internal drainage; 12) Consider incorporating side yards; and 13) Revisit placement and size of landscaping, with particular attention to driveway areas. The motion carried with a 5-0 vote with Commissioner McAuliffe and Commissioner Mireles, ABSENT. Page 629 Any appeal of the above action may be made in writing to the City Clerk of the City of Palm Desert within 15 days of the date of the decision. If you have any questions, please contact Associate Planner Kevin Swartz at (760) 346-0611, Extension 485 or kswartz@cityofpalmdesert.org. Sincerely, ROSIE LUA, SECRETARY ARCHITECTURAL REVIEW COMMISSION cc: File Page 630 ARCHITECTURAL REVIEW COMMISSION NOTICE OF ACTION December 29, 2021 Desert Luxury Apartments 2755 S. Nellis Boulevard, Suite 10 Las Vegas, NV 89121 Subject: Consideration of a recommendation to the Planning Commission for approval of a Change of Zone to establish a higher residential density (8 units per acre), Tentative Tract Map 38033, and a Precise Plan to construct a 32-unit single-story condominium project, clubhouse, and pool/spa on 3.91 acres at the southwest corner of Gerald Ford Drive and Shepherd Lane. The Architectural Review Commission of the City of Palm Desert considered your request and took the following action at its meeting of December 14, 2021: By Minute Motion, the Architectural Review Commission approved Case Nos. PP 21- 0008, C/Z 21-0001, TTM 21-0003 (TTM 38033), and MND, subject to the following: 1) Staff to conduct field verification of roof parapets and if they are not properly concealed, applicant will revisit parapet design to ensure edges are properly concealed and line up parapet edges over garages on Style A as discussed, should it be determined they need to be enclosed due to visibility; and 2) Applicant shall be mindful of roof color to ensure it is not too reflective. The motion carried with a 5-0 vote with Commissioner McAuliffe ABSENT. Any appeal of the above action may be made in writing to the City Clerk of the City of Palm Desert within 15 days of the date of the decision. If you have any questions, please contact Associate Planner Kevin Swartz at (760) 346-0611, Extension 485 or kswartz@cityofpalmdesert.org. Sincerely, ROSIE LUA, SECRETARY ARCHITECTURAL REVIEW COMMISSION cc: File Page 631 CITY OF PALM DESERT LEGAL NOTICE CASE NOs.PP 21-0008/TPM 38033/CZ 21-0001 and MND NOTICE OF A PUBLIC HEARING BEFORE THE PALM DESERT CITY COUNCIL TO CONSIDER A REQUEST BY DESERT LUXURY APARTMENTS, LLC FOR A RECOMMENDATION OF APPROVAL TO THE CITY COUNCIL FOR A CHANGE OF ZONE FROM FIVE (5) DWELLING UNITS PER ACRE TO EIGHT (8) DWELLING UNITS PER ACRE, A PRECISE PLAN APPLICATION TO CONSTRUCT 32 SINGLE-STORY CONDOMINIUM UNITS, TENTATIVE PARCEL MAP 38033, AND A MITIGATED NEGATIVE DECLARATION FOR ENVIRONMENTAL PURPOSES. The City of Palm Desert (City), in its capacity as the Lead Agency for this project under the California Environmental Quality Act (CEQA), has reviewed and considered the proposed project and has determined that any potentially significant impacts can be mitigated to a less than significant level and a Mitigated Negative Declaration has been prepared for this project. Project Location/ Description: Project Location: APN: 694-300-003, Located on the southwest corner of Gerald Ford Drive and Shepherd Lane 3.91 acres Project Description: The applicant is proposing 32 condominium units and a clubhouse with a pool/spa within 3.91 acres of undeveloped land. The project includes 16 single-story duplex buildings around the perimeter of the property. The single-story clubhouse and pool/spa are located along Gerald Ford Drive. The non-gated project is designed with two (2) vehicular access driveways. The project requires a Change of Zone from five (5) units per acre (PR-5) to eight (8) units per acre and a Mitigated Negative Declaration for environmental purposes. The project density of 32 units complies with the General Plan designation of Conventional Suburban Neighborhood, which has density allowances from three to eight (3-8) units per acre. In addition, the Tentative Tract Map (TTM) for condominium purposes (TTM 38033) will be concurrently processed with the entitlement application. Recommendation: Staff is recommending that the City Council adopt and approve the project request, subject to conditions of approval. Public Hearing:The public hearing will be held before the City Council on February 24, 2022, at 4:00 p.m. via Zoom. The hearing will be conducted in accordance with the City’s emergency protocols for social distancing. Options for remote participation will be listed on the Posted Agenda for the meeting at: https://www.cityofpalmdesert.org/our-city/committees-and- commissions/planning-commission-information-center. Comment Period: The public comment period for this project is from February 12, 2022,to February 24, 2022. Public Review:The project application is available for public review Monday through Friday from 8:00 a.m. to 5:00 p.m. by contacting the project planner, Mr. Kevin Swartz. Please submit written comments to the Planning Department. If any group challenges the action in court, the issues raised may be limited to only those issues raised at the public hearing described in this notice or in written correspondence at, or prior to the City Council hearing. All comments and any questions should be directed to: Kevin Swartz, Associate Planner City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 (760) 346-0611 kswartz@cityofpalmdesert.org PUBLISH: DESERT SUN February 12, 2022 Page 632 Page 633 Page 634 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVZZZGDQLHOLDQFRP 6+((7,1'(;9,&,1,7<0$3Page 635 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 636 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV 6&$/( 16UV$1$7(QQHU/,$&,$SODQ,(/662VS1,$6HFW'$FKLW'DUF 6&$/( Page 637 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV16UV$1$7(QQHU/,$&,$SODQ,(/662VS1,$6HFW'$FKLW'DUFPage 638 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV 6&$/( Page 639 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV 6&$/( Page 640 6&$/( '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 641 6&$/( '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV16UV$1$7(QQHU/,$&,$SODQ,(/662VS1,$6HFW'$FKLW'DUF &$/( 6&Page 642 6&$/( /( 6&$/'$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 643 6&$/( /( 6&$/'$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 644 6&$/( /( 6&$/'$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 645 6&$/( /( 6&$/'$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 646 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV,(/,$1662&,$7(6VSODQQHUV'$1,$6DUFKLWHFWPage 647 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV16UV$1$7(QQHU/,$&,$SODQ,(/662VS1,$6HFW'$FKLW'DUFPage 648 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 649 6&$/( '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV16UV$1$7(QQHU/,$&,$SODQ,(/662VS1,$6HFW'$FKLW'DUF /( 6&$/Page 650 6&$/( '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUV16UV$1$7(QQHU/,$&,$SODQ,(/662VS1,$6HFW'$FKLW'DUF /( 6&$/Page 651 '$1,(/,$1$662&,$7(6DUFKLWHFWVSODQQHUVPage 652 &2/256&+(0(6+(5:,1:,//,$060$18)$&785('6721(9(1((5(/'25$'26721(&87&2$56(6721(6($6+(//6($6+(//&2/256 0$7(5,$/66$17$%$5%$5$&21'266: 8UEDQ-XQJOH6:6DQGEDU6:&RFRRQ&2/256&+(0(6+(5:,1:,//,$066:4XLYHU7DQ6:6RIWHU7DQ6:/DQ\DUG3$/0'(6(57&$&21&5(7(522),1*&+$5&2$/%52:1&+$5&2$/%52:1&21&5(7(522),1*5867,&%52:15867,&%52:1B:,1'2:6$1''2256(635(662(635(662)$6&,$66:3HSSHUFRUQ6: 6XPPLW*UD\*$5$*(&2/25$Page 653 [This page has intentionally been left blank.] Page 654 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S OFFICE MEETING DATE: February 24, 2022 PREPARED BY: Heather Horning, Assistant to the City Manager REQUEST: Adopt an Ordinance amending Palm Desert Municipal Code Section 2.34.010, to base commissioner and committee member attendance upon the fiscal year. Recommendation By Minute Motion, waive further reading and pass to second reading Ordinance No. , amending Palm Desert Municipal Code Section 2.34.010 to base commissioner and committee member attendance upon the fiscal year. Background On November 19, 2020, the City Council conceptually approved various recommendations regarding commissions and committees. Many of these recommendations required further City Council action, including revisions to ordinances, bylaws and other activities. On February 25, 2021, the City Council adopted an ordinance amending Palm Desert Municipal Code Section 2.34.010 to base commissioner and committee member appointment terms upon the fiscal year rather than the calendar year. In order to have commissioner and committee member attendance coincide with their appointment terms staff recommends adopting the attached ordinance amending Palm Desert Municipal Code Section 2.34.010, to base commissioner and committee member attendance upon the fiscal year. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER RWH Robert W. Hargreaves City Attorney N/A L. Todd Hileman City Manager N/A Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman Attachments A. Ordinance No. Page 655 ORDINANCE NO. _______ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA AMENDING PALM DESERT MUNICIPAL CODE SECTION 2.34.010 RELATED TO COMMITTEE/COMMISSION MEMBER ATTENDANCE REQUIREMENTS WHEREAS, the City of Palm Desert is undertaking a comprehensive review of its committees and commissions; and WHEREAS, on February 25, 2021, the City Council changed committee and commission appointment terms from being based on a calendar year to fiscal year; and WHEREAS, the City council desires to have meeting absences be tracked by fiscal year rather than calendar year to match the terms. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Palm Desert, California, as follows: SECTION 1. That section 2.34.010 of the Palm Desert Municipal Code is hereby amended to read as follows: A. The beginning date for all terms of appointment to any city committee or commission will be July 1 and the ending date will be June 30, with the exception of appointments made to fill unexpired terms of office, or appointments made to fill new positions created during the year, but which will all be ultimately based upon the fiscalcalendar year thereafter. Following expiration of the term of office, and if requested by city council, each member shall continue to serve until either he or she is reappointed or his or her successor is qualified and appointed. D. Three unexcused absences from regular meetings in any one year (January 1—December 31) (July 1—June 30) shall constitute an automatic resignation of members holding office on boards that meet monthly. E. Six unexcused absences from regular meetings in any one year (January 1—December 31) (January 1—December 31) shall constitute an automatic resignation of members holding office on boards that meet twice monthly. F. Two unexcused absences from regular meetings in any one year (January 1—December 31) (January 1—December 31) shall constitute an automatic resignation of members holding office on boards that meet bimonthly. G. One unexcused absence from regular meetings in any one year (January 1—December 31) (January 1—December 31) shall constitute an automatic resignation of members holding office on boards that meet quarterly. Page 656 ORDINANCE NO. 2 PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 24th day of February 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JAN C. HARNIK, MAYOR ATTEST: NIAMH M. ORTEGA, DEPUTY CITY CLERK Page 657 [This page has intentionally been left blank.] Page 658 STAFF REPORT CITY OF PALM DESERT DEVELOPMENT SERVICES DEPARTMENT MEETING DATE: February 24, 2022 PREPARED BY: Kevin Swartz, Associate Planner Robert Hargreaves, City Attorney REQUEST: Consideration of an appeal to reaffirm City staffs’ decision to deny the issuance of ten Short-Term Rental (STR) permits related to the Planned Residential zoning district that do not comply with Palm Desert Municipal Code Chapter 5.10 Short-Term Rentals Section 5.10.070 because the 10 properties do not exist within a Homeowners’ Association (HOA) as envisioned by that Chapter. Recommendation By Minute Motion: 1. Deny the applicants’ appeal for the reasons outlined in this report, thereby reaffirming the City staffs’ decision to deny the issuance of 10 STR permits that do not comply with Palm Desert Municipal Code (PDMC) Section 5.10.070 since they do not exist within an HOA as contemplated by that Section; and 2. Direct the STR Subcommittee to guide the drafting of a formal definition for an HOA and initiate a Zoning Ordinance Amendment (ZOA) to Chapter 5.10 and present the ZOA to the City Council at a date uncertain. Summary Appellants formed the “Ironwood Estates Association” (“Ironwood HOA”) consisting of at least 10 residences scattered throughout the Planned Residential Zone in neighborhoods, specifically targeted for elimination of STRs due to lack of a self-regulating HOAs. Appellants then applied for STR permits based on approval letters from the Ironwood HOA pursuant to Section 5.10.070. The Code does not define an HOA. Staff determined that the Ironwood HOA was not consistent with its understanding of Council’s intent in adopting the HOA approval provision and denied the permits. On January 5, 2022, the appellants’ appealed the decision pursuant to PDMC Chapter 2.72 Appeals to the City Council. Ordinance Background In 2017, during the yearlong City-wide policy update, the City created a subcommittee made up of numerous stakeholders and members of the public that discussed extensively four (4) Page 659 February 24, 2022 –Staff Report STR Applications - Appeal Page 2 of 5 main topics; (Enforcement/Penalties, Operational Requirements, Communication, and Density for the R-1 and R-2 zones). On December 14, 2017, the City Council adopted Ordinance No. 1332 approving amendments to PDMC Chapter 5.10 Short-Term Rentals regarding enforcement, operational standards, communication, and zoning requirements for STRs within the City of Palm Desert, included not issuing any new STR permits in the R-1 and R-2 zones and phasing out all existing STR permits in those zones by December 31, 2019. In 2018, the City was alerted by residents of several non-gated neighborhoods within the Planned Residential (PR) zone that do not have a governing HOA and function the same as R-1 or R-2 single-family zoning districts. The City Council directed staff to monitor STR use in the PR neighborhoods without an active HOA and report to the City Council if there are any alarming trends. Below are four (4) neighborhoods that staff monitored (see attached map). • Shepherd Lane: The neighborhood is mostly off Shepherd Lane, north of Frank Sinatra Drive, west of Portola Avenue, and south of Gerald Ford Drive. • Hovley Lane West: This neighborhood is east of Monterey Avenue and west of Portola Avenue. • The Grove: This neighborhood is west of Deep Canyon Road, south of Fred Waring Drive, and north of Highway 111. • North Deep Canyon: These neighborhoods are east of Deep Canyon Road, west of Palm Desert High School, north of Fred Waring Drive, and south of the Whitewater Storm Channel. In 2019, an uptick in new STR permits within the PR zones without active HOAs was evident. Staff prepared informational reports to the City Council stating that staff does not see an alarming concern with the volume of new STR permits. However, in 2020, the volume of complaints to the STR hotline and emails to the City Council office escalated significantly. At its regular meeting of August 27, 2020, the City Council requested that staff review a known zoning irregularity within PR zoning districts that do not have a governing HOA relating to STR use. The City Council also directed staff to bring forward an interim urgency ordinance, placing a moratorium on the issuance of STR permits within PR zoning districts. At its next regularly scheduled meeting of September 10, 2020, the City Council adopted Ordinance No. 1357, which established a temporary moratorium that was extended on October 15, 2020, on issuing new STR permits within all PR zoning districts unless approved by the governing HOA. The City Council also authorized the STR subcommittee, which includes Councilmembers Kelly and Jonathan, to work with staff and present a recommendation to the entire City Council. Page 660 February 24, 2022 –Staff Report STR Applications - Appeal Page 3 of 5 City Council STR Subcommittee At the meetings of September 24 and October 22, 2020, the City Council Subcommittee on STRs met to discuss the current permits issued, complaint history, and operational requirements. After careful a study of all public input and considering all policy directions set by the City Council in 2017, the subcommittee recommended requiring an authorizing letter from a governing HOA for STR permits in PR zones and phase-out non-conforming permits. This concept allows for developments with HOAs to control their own rules and regulations/policies through a governing board for their community/neighborhood on STR uses. The City Council STR Subcommittee also recommended a one-year phase-out for all existing STR permits within the PR zones, without written approval from an HOA having jurisdiction over the property until December 31, 2021. On December 10, 2020, the City Council adopted Ordinance No. 1360 approving amendments to PDMC Chapter 5.10 Short-Term Rentals related to PR zoning districts. A copy of Ordinance No. 1360 is attached. The amendments included the following: • Require the issuance of new STR permits in PR zones to be supported by written approval from an HOA having jurisdiction over the property. • Existing STR permits within the PR zones (excluding On-Site Owner STR Permits) without a written approval letter shall terminate, and such uses permanently cease operation after December 31, 2021. • The ordinance does not define “HOA.’ Permit Background Since the adoption of Ordinance No. 1360, staff has processed several STR applications within the PR zones with an approved HOA letter. Below are some of the governing HOAs who have submitted letters of approval. • Monterey Country Club • Palm Valley Country Club • Ironwood Country Club • Palm Desert Resorter On December 15, 2021, the City received 10 STR applications from Ms. Lisa Kushida, Community Association Manager for Ironwood Estates Association Board Directors, for properties in the PR zone whose STR permits terminated on December 31, 2021, since they were not located within a governing HOA that could provide a written letter of approval. The applications included a letter stating that Ironwood Estates Association is a registered HOA with the State of California. Article 2, Section 1 of the Ironwood Estates Covenants, Conditions, and Restrictions (CC&Rs) address the issue for less than 27 days and specifically Page 661 February 24, 2022 –Staff Report STR Applications - Appeal Page 4 of 5 allows those rentals, subject to compliance with all City and state laws and Ordinances. City of PDMC 5.10.070 subsections C and D. Below are the addresses and expired STR permit numbers. Attached is a map of the locations of the requested permits concerning the four neighborhoods discussed above as targeted for the elimination of STRs. • 74053 Alpine Lane 2016-048693 • 74513 Columbine Drive STR 2020-0004 • 74140 E. College View Circle STR 2019-0083 • 40765 Avenida Estrada STR 2019-0094 • 40603 Via Fonda STR 2020-0019 • 75686 Easy Street 2017-046988 • 74120 E. Chinook Circle 2017-043073 • 74602 Lavender Way STR 2018-0008 • 40744 Via Fonda STR 2020-0082 • 40750 Centennial Circle 2016-048535 Based on staff’s understanding of what an HOA is, staff declined to process the STR. On January 5, 2022, the City Attorney sent a letter (attached to this staff report) to Ironwood Estates Association. The letter stated that the listed properties do not qualify for STR permits because they do not exist within and have the approval of an “HOA” as contemplated and required by the Ordinance (PDMC Section 5.10.070(c)). The 10 applicants filed a joint appeal pursuant to PDMC Section 5.10.070(c), claiming that the Ironwood Estates Association approval letters qualified under the Code. Appellants’ appeal package is included with the packet. Legal Background City Council’s interpretation of its own ordinance controls. In Aguiar v. Superior Court, the City of Los Angeles implemented a city living wage ordinance (LWO). 2009 WL 117554 (Cal. App. 2 Dist.). Differing interpretation of the ordinance led to a lawsuit. The court found that its “fundamental task is to ascertain the Legislature’s (or, as here, the city council’s) intent and thereby effectuate the purpose of the ordinance.” Id. at 6. If there is any ambiguity, the court will use the council’s interpretation to promote rather than defeat the general purpose of the statute and avoid an interpretation that would lead to absurd consequences. The court also looked at how the ordinance was applied and the legislative history. Id. at 7. Discussion When Ordinance No. 1360 was adopted by the City Council, it did not include a formal definition for an HOA. It was the understanding/intent during the City Council Subcommittee meetings and the City Council public hearings that requiring an approval letter of an HOA would come from a governing board of a common interest development formed under the Davis-Stirling Common Interest Development Act (Civil Code Section 41200 et seq). Staff’s understanding that an HOA consisted of contiguous properties subject to CC&Rs with a Page 662 February 24, 2022 –Staff Report STR Applications - Appeal Page 5 of 5 governing board that is elected by, and responsive to, the whole neighborhood and capable of enforcing STR regulations to the satisfaction of the whole neighborhood. The intent of Ordinance No. 1360, as evidenced throughout the process outlined above, was to eliminate STRs in neighborhoods that did not support their presence and were not self- regulated by a functioning HOA and particularly within the four neighborhoods identified above. All 10 applications are for residences that exist within the four identified neighborhoods in 2018. Ironwood Estates Association is composed of a handful of residences scattered throughout those neighborhoods, does not have jurisdiction over neighboring properties, and does not appear to have the capacity to regulate STRs to the satisfaction or approval of the surrounding neighborhoods. For these reasons, staff requests that the appeal be denied, and the decision of staff be confirmed for the reasons stated above. Environmental Review The appeal is not a project as defined in the California Environmental Quality Act (CEQA) Public Resource Code (Pub. Resources Code, § 21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.). LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER Robert W. Hargreaves City Attorney Eric Ceja for Martin Alvarez, Director of Development Services N/A Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager, L. Todd Hileman: L. Todd Hileman ATTACHMENTS: 1. Appellants’ Appeal Application 2. Appellants’ Appeal Letter dated January 14, 2022 3. Appellants’ STR Applications 4. Appellants’ Bylaws 5. Appellants’ Declarations and CC&R’s 6. Letter from BB&K dated January 5, 2022 7. Map of the 10 STR properties 8. Map of the four PR neighborhoods discussed in 2018 9. STR Ordinance No. 1360 Page 663 Page 664 Page 665 Page 666 SLOVAK BARON EMPEY MURPHY & PINKNEY LLP Palm Springs, CA T (760) 322-2275 Indian Wells, CA T (760) 322- 9240 Orange County, CA T (714) 435-9592 San Diego, CA T (619) 501-4540 New Jersey T (609) 955-3393 New York, NY T (212) 829-4399 www.sbemp.com SHAUN M. MURPHY, ESQ. PARTNER ADMITTED IN CA, MI, TX, NY AND THE U.S. SUPREME COURT REPLY TO: 1800 E. Tahquitz Canyon Way Palm Springs, California 92262 T (760) 322-2275 • F (760) 322-2107 murphy@sbemp.com January 14, 2022 City of Palm Desert 73510 Fred Waring Drive Palm Desert, CA 92260 Re: Appeal of Denial of Renewal of Short Term Rental Permits to Homeowners in the Ironwood Estates Association Dear Mayor, City Council Members, City Manager: This is an Appeal of the denial of the renewal of short term rental permits to the following homeowners in the Ironwood Estates Association: Oliver and Randie Chaine 74053 Alpine Lane Palm Desert, CA 92211 Jennifer DeSimone 74140 College View Circle East Palm Desert, CA 92211 Tracy Phillips 74602 Lavender Way Palm Desert, CA 92260 Michael & Irma Baronian 40603 Via Fonda Palm Desert, CA 92260 Sirvard Chalikyan 40765 Avenida Estrada Palm Desert, CA 92260 Hieu Luu 74513 Columbine Drive Palm Desert, CA 92260 Page 667 City of Palm Desert January 14, 2022 Page 2 Rozanna Bagoian / Armen Semerjian 40744 Via Fonda Palm Desert, CA 92260 James Sutherland 74120 Chinook Circle East Palm Desert, CA 92211 Michael & Irma Baronian 40750 Centennial Circle Palm Desert, CA 92260 Michael Hackett 75686 Easy Street Palm Desert, CA 92211 We understand the City adopted a new ordinance noted below: 5.10.070 Short term rental permit—prohibited in R-1, R-2, and PR zones, unless approved by the homeowners’ association. The city shall prohibit the issuance of new short-term rental permits within the R-1 and R-2 zones, and the PR zones under certain circumstances as described below. These requirements do not apply to on-site owner short-term rental permits. A. A new short-term rental permit within the R-1 zone will not be issued. B. A new short-term rental permit within the R-2 zone will not be issued. C. A new short-term rental permit within the PR zones will not be issued unless issuance of the permit is approved in writing by the homeowners’ association having jurisdiction over the property. D. Existing short-term rental permits in PR zones may be renewed if otherwise qualified, but all such short-term rental permits shall terminate, and such uses permanently cease operation, by December 31, 2021, unless the issuance of the permit is approved in writing by the homeowners’ association having jurisdiction over the property.” E. If an existing permit is revoked pursuant to this chapter, and the short-term rental unit is located in the R-1 or R-2 zones, then a new permit will not be issued. A new permit may be issued in the PR zones only if the permit complies with Section 5.10.070(C) and (D). (Ord. 1360 § 2, 2020; Ord. 1338 § 2, 2018; Ord. 1332 § 2, 2017) Page 668 City of Palm Desert January 14, 2022 Page 3 “Planned residential district (P.R.)” means to provide for flexibility in residential development, by encouraging creative and imaginative design, and the development of parcels of land as coordinated projects involving a mixture of residential densities (4.0 – 40.0 du/ac), mixed housing types, and community facilities, and is characterized as providing for the optimum integration of urban and natural amenities within developments and is organized around formal, walkable, and highly connected streetscapes. (Palm Desert Municipal Code §5.10.030 Definitions) The above listed properties are all within the PR zones and already had STR permits prior to enactment of Ordinance 1360. The above listed properties are also under the jurisdiction of a registered Homeowner’s Association (“HOA”) with the State of California and a letter from the Ironwood Estates Association was submitted for each property noted that under Article 2, Section 1 of the Ironwood Estates CC&Rs address the issue of leasing for less than 27 days, and specifically allows those rentals, subject to compliance with all City and State laws and ordinances. Enclosed are the HOA CC&Rs, Bylaws and the ten letters. City staff claimed the permits were denied because owners who are members of a certain type of association (a DSA CID association) are eligible for use permits, but members of another type of association are not eligible for use permits. The ordinance does not make a distinction. It states HOA. Furthermore, there is no basis to support an association formed under the Non-profit Mutual Benefit Corporation law is less capable of controlling its members than is an association formed under the SA CID Act. City staff claimed the permits were denied saying that owners who reside within a certain type of project, where all lots are contiguous or in a gated community, are eligible for use permits, while owners not residing in such projects are not eligible. The ordinance does not make that distinction. Furthermore, gated communities is not in the definitions nor is in the definition for PR zones. In addition, that would violate constitutional rights, such as equal protection under the law, by preferring gated communities and the like over ungated or non-contiguous associations. There appears to have been an attempt to amend or instruct staff to modify the application of Ordinance 1360 so that permittees in HOA developments would be presumed to have a continued right to a permit unless the City heard otherwise from the HOA saying it changed its rules. This change also was not included in the final language. Thus, the City Attorney’s comments about “intent” lack merit. Had the City “intended” to limit the application to HOAs in gated communities or with contiguous lots it had every opportunity to do so. It did not. When the City was in the process of drafting and ultimately enacting the above new ordinance. Officer Pedro told residents that if you want to keep renting just make an HOA with a few people and they will approve the permit. Applicants have fundamental vested rights in renting and in renewing their permits. The City is punishing innocent owners for the transgressions of others (owners who do not control their Page 669 City of Palm Desert January 14, 2022 Page 4 tenants and the tenants who are creating a nuisance) instead of enforcing the law to protect its residents. Hence, the City Council should grant the appeal and issue the STR permits. Sincerely, SLOVAK, BARON, EMPEY, MURPHY & PINKNEY, LLP : By: Shaun M. Murphy enclosures: Ironwood Estates Association Declaration of Covenants, Conditions and Restrictions Ironwood Estates Association Bylaws Letters from Association to City of Palm Desert for the 10 properties dated 12/22/21 Page 670 Page 671 Page 672 Page 673 Page 674 Page 675 Page 676 Page 677 Page 678 Page 679 Page 680 Page 681 Page 682 Page 683 Page 684 Page 685 Page 686 Page 687 Page 688 Page 689 Page 690 -i- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc BYLAWS OF IRONWOOD ESTATES ASSOCIATION An Unincorporated Association Law Offices of Hanna & Van Atta 525 UNIVERSITY AVENUE, SUITE 600 PALO ALTO, CA 94301 TELEPHONE (650) 321-5700 Page 691 ii G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc BYLAWS OF IRONWOOD ESTATES ASSOCIATION An Unincorporated Association TABLE OF CONTENTS ARTICLE I. NAME AND LOCATION ................................................................................................. 1 1.1. Name and Location ........................................................................................................... 1 ARTICLE II. DEFINITIONS ................................................................................................................ 1 2.1. Incorporation by Reference ............................................................................................... 1 2.2. Board ................................................................................................................................ 1 2.3. Declaration ........................................................................................................................ 1 2.4. Director. ............................................................................................................................ 1 2.5. Subject Lot. ....................................................................................................................... 1 ARTICLE III. MEETING OF MEMBERS AND VOTING ..................................................................... 1 3.1. Annual Meeting ................................................................................................................. 1 3.2. Special Meetings ............................................................................................................... 1 3.3. Notice and Place of Meetings ........................................................................................... 1 3.4. Waiver of Notice ............................................................................................................... 1 3.5. Quorum ............................................................................................................................. 1 3.6. Proxies ............................................................................................................................. 2 3.7. Membership and Voting ................................................................................................... 2 3.8. Eligibility to Vote .............................................................................................................. 2 3.9. Action Without Meeting By Ballot ..................................................................................... 2 3.10. Conduct of Meetings ........................................................................................................ 2 ARTICLE IV. BOARD OF DIRECTORS; SELECTION; TERM OF OFFICE ...................................... 2 4.1. General. ........................................................................................................................... 2 4.2. Number; Qualifications and Appointment of Directors ...................................................... 2 4.3. Term of Office .................................................................................................................. 3 4.4. Compensation .................................................................................................................. 3 4.5. Indemnification of Officers and Directors and Agents ....................................................... 3 ARTICLE V. MEETINGS OF DIRECTORS ....................................................................................... 3 5.1. Regular Meetings ............................................................................................................. 3 5.2. Special Meetings of the Board ......................................................................................... 4 5.3. Emergency Meetings ........................................................................................................ 4 5.4. Quorum ............................................................................................................................ 5 5.5. Open Meetings................................................................................................................. 5 5.6. Executive Session ............................................................................................................ 5 5.7. Telephone/Videoconference Meetings ............................................................................. 5 5.8. Notice of Adjourned Meeting ............................................................................................ 6 5.9. Availability and Distribution of Minutes ............................................................................. 6 5.10. No Action Without a Meeting ........................................................................................... 6 5.11. Definition of Meeting ........................................................................................................ 6 ARTICLE VI. POWERS AND DUTIES OF THE BOARD OF DIRECTORS ...................................... 6 6.1. Duties .............................................................................................................................. 6 A. Adopt Policies:.................................................................................................................. 6 B. Oversight and Review of Administration of Association Affairs ......................................... 6 C. Supervision ....................................................................................................................... 6 6.2. Powers ............................................................................................................................. 7 A. Manager ........................................................................................................................... 7 B. Adoption of Rules ............................................................................................................. 7 C. Assessments and Fines .................................................................................................... 7 C. Enforcement (Notice and Hearing): .................................................................................. 7 D. Contracts: ......................................................................................................................... 7 E. Delegation ........................................................................................................................ 7 F. Other Powers: .................................................................................................................. 7 ARTICLE VII. ASSOCIATION DUTIES AND RESPONSIBILITIES .................................................... 7 7.1. Association Duties ............................................................................................................ 7 A. Requirements of Declaration ............................................................................................. 7 B. Insurance .......................................................................................................................... 7 C. Assessments .................................................................................................................... 7 D. Expenses and Obligations ................................................................................................ 7 Page 692 iii G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc E. Enforcement ..................................................................................................................... 7 F. Records ............................................................................................................................ 7 G. Contracts .......................................................................................................................... 8 H. Financial Requirements .................................................................................................... 8 ARTICLE VIII. OFFICERS AND THEIR DUTIES .............................................................................. 8 8.1. Enumeration of Officers ................................................................................................... 8 8.2. Appointment of Officers .................................................................................................... 8 8.3. Term ................................................................................................................................ 8 8.4. Special Appointments ....................................................................................................... 8 8.5. Resignation and Removal ................................................................................................ 8 8.6. Vacancies ........................................................................................................................ 8 8.7. Duties .............................................................................................................................. 8 A. President .......................................................................................................................... 8 B. Vice President .................................................................................................................. 8 C. Secretary .......................................................................................................................... 8 D. Chief Financial Officer ...................................................................................................... 8 ARTICLE IX. COMMITTEES ............................................................................................................. 9 9.1. Committees ...................................................................................................................... 9 ARTICLE X. BOOKS AND RECORDS ............................................................................................. 9 10.1. Inspection by Members .................................................................................................... 9 10.2. Rules for Inspection ......................................................................................................... 9 10.3. Inspection by Directors ..................................................................................................... 9 ARTICLE XI. FINANCIAL AND REPORTING REQUIREMENTS ....................................................... 9 11.1. Budgets, Financial Statements and Reports ..................................................................... 9 ARTICLE XII. MISCELLANEOUS ..................................................................................................... 9 12.1. Amendments .................................................................................................................... 9 12.2. Conflicts. .......................................................................................................................... 9 12.3. Fiscal Year ....................................................................................................................... 9 12.4. Electronic Communications .............................................................................................. 9 Page 693 -1- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc BYLAWS OF IRONWOOD ESTATES ASSOCIATION An Unincorporated Association ARTICLE I. NAME AND LOCATION 1.1. Name and Location. The name of the association is IRONWOOD ESTATES ASSOCIATION, hereinafter referred to as the "Association." The principal office of the Association shall be located at such place in the City of Palm Desert as may be designated by the Board. ARTICLE II. DEFINITIONS 2.1. Incorporation by Reference. The definitions contained in the Declaration are incorporated by reference herein. 2.2. Board. “Board” shall mean the Board of Directors of the Association. 2.3. Declaration. "Declaration" shall mean and refer to the IRONWOOD ESTATES ASSOCIATION DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS applicable to the Subject Lots recorded in the Official Records of Riverside County, California and subsequent amendments thereto. 2.4. Director. “Director” shall mean a Person who has been duly appointed to serve on the Board. 2.5. Subject Lot. “Subject Lot” shall mean a Subject Lot as defined in the Declaration. ARTICLE III. MEETING OF MEMBERS AND VOTING 3.1. Annual Meeting. The Board shall arrange and notice annual meetings of the Association Members to occur no later than ninety (90) days after the close of the Association's fiscal year. 3.2. Special Meetings. Special meetings of the Members shall be promptly scheduled at any time by the Board in response to the vote of a majority of the Board of Directors, or in response to a request by the President or Vice-President, or upon written request of any one Member. 3.3. Notice and Place of Meetings. Written notice of each meeting of the Members, annual or special, shall be given by, or at the direction of, the Secretary or other officer of the Association, by personal delivery or mailing a copy of such notice, first-class mail, postage prepaid, or by electronic transmission to Members who have consented to receiving such electronic transmission at least ten (10) but not more than ninety (90) days before such meeting to all Members, addressed to the Member's address last appearing on the books of the Association, or supplied by such Member to the Association for the purpose of notice, and to each First Lender that has requested notice in writing. Such notice shall specify the place, day and hour of the meeting, the means of electronic transmission by and to the Association and, in the case of a special meeting, the purpose of the meeting. Meetings shall be held at a meeting place within the City of Palm Desert. 3.4. Waiver of Notice. The transactions of any meeting of Members, however called and noticed or wherever held, shall be as valid as though taken at a meeting duly held after regular call and notice, if (a) a quorum is present, either in person or by proxy, and (b) either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice or consent to holding the meeting, or an approval of the minutes. The waiver of notice or consent need not specify the purpose of the meeting. Notice of a meeting shall also be deemed given to any person who attends the meeting without protesting before or at its commencement about the lack of adequate notice. 3.5. Quorum. The presence either in person or by proxy, at any meeting, of at least 25% of the Members shall constitute a quorum for any action except as otherwise provided in the Declaration, or these Bylaws. Page 694 -2- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc 3.6. Proxies. At all meetings of Members, each Member may vote in person or by proxy. All proxies shall be in writing and filed with the Secretary before the appointed time of each meeting. Every proxy shall be revocable and shall automatically cease upon conveyance by the Member of its Subject Lot, or upon receipt of written notice by the Secretary of the Board of the death or judicially declared incompetence of a Member prior to the counting of the vote, or upon the expiration of eleven (11) months from the date of the proxy. Any form of proxy distributed by any person to the membership of the Association shall afford the opportunity to specify a choice between approval and disapproval of each matter or group of matters to be acted upon. The proxy shall provide that, where the Member specifies a choice, the vote shall be cast in accordance with that choice. The proxy also shall identify the person or persons authorized to exercise the proxy and the length of time it will be valid. The proxy also shall identify the person or persons authorized to exercise the proxy and the length of time it will be valid. 3.7. Membership and Voting. Each Owner shall be a Member of the Association and shall be entitled to one (1) vote for each Subject Lot owned. No cumulative voting shall be allowed. 3.8. Eligibility to Vote: Each Member shall maintain a current filing with the Association of the following: (i) the signature or signatures of the Owner(s) authorized to vote on behalf of the Member's Subject Lot; and (ii) address where all notices shall be sent; or, alternatively, (iii) a proxy that names the Owner's representative and lists said representative's address. The Association shall deny a ballot to a Person who is not a Member at the time when ballots are distributed and may not deny a ballot to a Member for any other reason. 3.9. Action Without Meeting By Ballot. Any action that may be taken at any annual or special meeting of Members may be taken without a meeting if a written ballot is distributed to every Member entitled to vote. Any form of written ballot distributed by any person to the membership of the Association shall set forth the proposed action, provide the opportunity to specify approval or disapproval of any proposal, and provide a reasonable time within which to return the ballot. Approval by written ballot shall be valid only when the number of votes cast by ballot within the time specified equals or exceeds the quorum required to be present at a meeting authorizing the action and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting as provided in these Bylaws. 3.10. Conduct of Meetings: Meetings of the membership of the Association shall be conducted in accordance with a recognized system of parliamentary procedure or such parliamentary procedures as the Association may adopt. Notwithstanding any other provision of law, notice of meetings of the Members shall specify those matters the Board intends to present for action by the Members, but, except as otherwise provided by law, any proper matter may be presented at the meeting for action. Any Member shall be permitted to speak at a meeting of the Association Members. All Owners may attend Board and Membership meetings and serve on committees, including, without limitation, Owners who hold title as community property, tenants-in-common, joint tenants, and co-trustees. ARTICLE IV. BOARD OF DIRECTORS; SELECTION; TERM OF OFFICE 4.1. General. The activities and affairs of this Association shall be administered and overseen by, and the powers of the Association exercised under the direction of, the Board of Directors. The Board may delegate the management activities of the Association to any management company, or to a managing agent, or committee, provided, however, that the activities and affairs of the Association shall be directed, overseen and managed, and the corporate powers exercised, under the ultimate direction of the Board. 4.2. Number; Qualifications and Appointment of Directors. The affairs of this Association shall be managed by a Board of three (3) Directors. The initial Directors shall be designated and appointed by Owners who signed the Declaration and shall hold office until the first meeting of the Members as described in Section 3.1 and until their successors are appointed. If a Subject Lot has multiple Owners, only one (1) at a time may be a Director. Each Owner as a Member shall appoint a Person as Director at a meeting of the Members, which appointment shall be memorialized and stated in the minutes of the Association. A Director must be current in payment of Regular Assessments and Special Assessments. Only one (1) Owner of a Subject Lot may serve on the Board at any one time. Page 695 -3- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc 4.3. Term of Office. At each annual meeting of the Association the Members shall elect (3) Directors for a term of one (1) year. Unless vacated sooner, each Director shall hold office until the Director's term expires and a successor is elected. 4.4. Compensation. No Director shall receive compensation for any service rendered to the Association. However, any Director may be reimbursed for his actual expenses, if reasonable, that are incurred in the performance of his duties. 4.5. Indemnification of Officers and Directors and Agents. The Association shall indemnify any present or former Director, officer, employee or other agent of the Association to the fullest extent authorized under law, or any successor statute, including, but not limited to, indemnification for claims for personal injury and/or property damage claims arising from either passive and/or active negligence, and may advance to any such person funds to pay expenses that may be incurred in defending any action or proceeding on receipt of an undertaking by or on behalf of such person to repay such amount unless it is ultimately determined that such person was entitled to indemnification under this provision. ARTICLE V. MEETINGS OF DIRECTORS 5.1. Regular Meetings. Regular meetings of the Board of Directors shall be held at least quarterly at such place within the City of Palm Desert that the Directors agree to use at such hour as may be fixed from time to time by resolution of the Board. Should said meeting fall upon a legal holiday, then that meeting shall be held at the same time on the next day which is not a legal holiday, excluding Saturday and Sunday. A. Notice of Regular Board Meetings: Notice of the time and place of meetings of the Board shall be given, by mail or delivery to each Member or by electronic transmission to a Member who has consented to electronic receipt or similar means of communication as permitted by law, and shall be communicated to Directors and Members not less than four (4) days prior to the meeting, except for an emergency meeting (for which notice is not required) or an executive session meeting (for which a two (2) day notice is required). The notice shall contain the agenda for the meeting. Notice of any meeting need not be given to any Director who has signed a waiver of notice or a written consent to holding of the meeting. B. Items on Agenda. (1) Except as described in subparagraphs (2) to (4), inclusive, below, the Board of Directors of the Association may not discuss or take action on any item at a non-emergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to Section 5.1.A. This subdivision does not prohibit an Owner who is not a Member of the Board from speaking on issues not on the agenda. (2) Notwithstanding subparagraph (1), above, a Member of the Board of Directors, a Managing Agent or other agent of the Board of Directors, or a Member of the staff of the Board of Directors, may do any of the following: (A) Briefly respond to statements made or questions posed by a person speaking at a meeting as described in Section 5.5. (B) Ask a question for clarification, make a brief announcement, or make a brief report on his or her own activities, whether in response to questions posed by a Member of the Association or based upon his or her own initiative. (3) Notwithstanding subparagraph (1), above, the Board of Directors or a Member of the Board of Directors, subject to rules or procedures of the Board of Directors, may do any of the following: (A) Provide a reference to, or provide other resources for factual information to, its Managing Agent or other agents or staff. (B) Request its Managing Agent or other agents or staff to report back to the Board of Directors at a subsequent meeting concerning any matter, or take action to direct its Managing Agent or other agents or staff to place a matter of business on a future Page 696 -4- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc agenda. (C) Direct its Managing Agent or other agents or staff to perform administrative tasks that are necessary to carry out this subdivision. (4) (A) Notwithstanding subparagraph (1), above, the Board of Directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to Section 5.1.A under any of the following conditions: (i) Upon a determination made by a majority of the Board of Directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the Board, that require immediate attention and possible action by the Board, and that, of necessity, make it impracticable to provide notice. (ii) Upon a determination made by the Board by a vote of two-thirds (2/3rds) of the Members present at the meeting, or, if less than two-thirds (2/3rds) of total membership of the Board is present at the meeting, by a unanimous vote of the Members present, that there is a need to take immediate action and that the need for action came to the attention of the Board after the agenda was posted and distributed pursuant to Section 5.1.A or Section 5.2. (iii) The item appeared on an agenda that was posted and distributed pursuant to Section 5.1.A or Section 5.2 for a prior meeting of the Board of Directors that occurred not more than thirty (30) calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken. (B) Before discussing any item pursuant to this paragraph, the Board of Directors shall openly identify the item to the Members in attendance at the meeting. 5.2. Special Meetings of the Board. Special meetings of the Board of Directors shall be held when called by written notice signed by the President, Vice President or Secretary of the Association, or by any two (2) Directors. The notice shall specify the time and place of the meeting and the nature of any special business to be considered, and shall contain the agenda for the meeting. The notice shall be given to each Director by one (1) of the following methods: (a) by personal delivery; (b) written notice by first-class mail, postage prepaid; (c) by telephone communication, either directly to the Director or to a person at the Director's office who would reasonably be expected to communicate such notice promptly to the Director; or (d) by telegram, facsimile or electronic mail, pursuant to the requirements of applicable law (electronic transmission) by the Association to a Member, officer or Director, are not authorized unless consent to the transmission has been preceded by or includes a clear written statement to the recipient as to: (a) any right of the recipient to have the record provided or made available on paper or in non-electronic form; and, (b) whether the consent applies only to that transmission, to specified categories of communications, or to all communications from the Association, and, in addition, the procedures the recipient must use to withdraw consent are included). Such notice shall be posted or communicated in a manner prescribed for notice of regular meetings and shall be sent to all Directors not less than four (4) days prior to the scheduled time of the meeting. All Members shall be given notice of the time and place of a special meeting, except for an emergency meeting, at least four days prior to the meeting. Notice of the special meeting may be given by mail to any Member who had requested notification of Board meetings, at the address requested by the Member. Notice may also be given, by mail or delivery of the notice to each Owner of a Subject Lot or by newsletter or similar means of communication and shall be communicated to Directors and Members not less than four (4) days prior to the meeting. Notices sent by first-class mail shall be deposited into a United States mailbox at least six (6) days before the time set for the meeting. 5.3. Emergency Meetings. An emergency meeting of the Board of Directors may be called by the President, or by any two (2) Directors other than the President, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the Board, and which of necessity make it impracticable to provide the notices required by Sections 5.1 or 5.2. Notice to Members of an emergency meeting is not required. When such an emergency meeting is held, the minutes shall reflect the circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the Board. Electronic transmissions (e-mail) may be used to conduct an emergency meeting, if all Page 697 -5- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc Directors consent in writing to the use of electronic transmissions to conduct the emergency meeting, and the written consents are filed with the minutes of the meeting. 5.4. Quorum. A majority of the Directors then in office (but not less than two (2)) shall constitute a quorum for the transaction of business. Every act performed or decision made by a majority of the Directors present at a duly held meeting at which a quorum is present shall be regarded as an act of the Board. A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of Directors, provided at least two (2) Directors are present, if any action taken is approved by a majority of the required quorum for that meeting. 5.5. Open Meetings. All meetings of the Board shall be open to all Members. 5.6. Executive Session. The Board may, with proper notice, call an executive session meeting, or, with approval of a majority of Directors present at a meeting in which a quorum for the transaction of business has been established, adjourn a meeting and reconvene in executive session to discuss and vote upon litigation, matters relating to the formation of contracts with third parties, Member discipline, personnel matters, or to meet with a Member, upon the Member's request, regarding the Member's payment of assessments, as specified in California Civil Code Section 5665. Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership. The Board shall meet in executive session, if requested by a Member who may be subject to a fine, penalty, or other form of discipline, and the Member affected shall be entitled to attend the executive session. The Board may hold an executive session emergency meeting if circumstances require, as authorized by Section 5.3. Except for an emergency meeting, Members shall be given notice of the time and place of an executive session meeting at least two (2) days prior to the meeting. 5.7. Telephone/Videoconference Meetings. A meeting of the Board may be held by conference telephone or electronic video screen, so long as all of the following apply: A. A teleconference, where a sufficient number of directors to establish a quorum of the Board, in different locations, are connected by electronic means, through audio or video, or both. A teleconference meeting shall be conducted in a manner that protects the rights of Members of the Association and otherwise complies with the requirements of the Davis-Stirling Act. B. Except for a meeting that will be held solely in executive session, the notice of the teleconference meeting shall identify at least one physical location so that Members of the association may attend, and at least one Director shall be present at that location. C. Participation by Directors in a teleconference meeting constitutes presence at that meeting as long as all Directors participating are able to hear one another, as well as Members of the Association speaking on matters before the Board. D. Each Director participating in the meeting can hear one another and can hear Members of the Association speaking on matters before the Board. E. Each Director is provided the means of participating in all matters before the Board, including, without limitation, the capacity to propose, or to interpose an objection to a specific action to be taken by the corporation; F. The Board adopts and implements some means of verifying all of the following: (1) A person participating in the meeting is a Director or other person entitled to participate in the Board meeting; (2) All actions of, or votes by, the Board are taken or cast only by the Directors and not by persons who are not Directors; (3) A majority of Directors, in different locations, are connected by electronic means through audio and/or video, or both; (4) The meeting shall be audible to the Members in a location specified in the notice of the meeting; (5) All participating in the meeting are able to hear one another. Arrangements shall be made to enable any Member who desires to listen to the telephone/electronic meeting of the Board, to be able to do so. The minutes of the meeting shall state that those participating in the meeting were recognized to be Directors or other persons authorized to participate in the meeting. An explanation of the action taken shall be posted at a Page 698 -6- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc prominent place within the Common Area within three (3) days after the meeting. If the Common Area consists of an easement or is otherwise unsuitable for posting the explanation of the action taken, the Board shall communicate said explanation by any means it deems appropriate. 5.8. Notice of Adjourned Meeting. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for more than twenty-four (24) hours, in which case personal notice of the time and place shall be given before the time of the adjourned meeting to the Directors who were not present at the time of the adjournment, and shall be posted at a prominent place within the Common Area. If the Common Area consists only of an easement or is otherwise unsuitable for posting of such notice, the Board shall communicate the notice of the time and place of such meeting by any means it deems appropriate. 5.9. Availability and Distribution of Minutes: The minutes, or minutes proposed for adoption that are marked to include draft status, or a summary of minutes of any meeting of the Board, other than an executive session, shall be available to Members within thirty (30) days after the meeting to be delivered by mail or by electronic transmission to each Owner who consents to obtaining such information by such electronic transmission. The minutes, proposed minutes or summary shall be distributed to any Member on request and upon reimbursement of the Association's costs in making that distribution. 5.10. No Action Without a Meeting. The Board shall not take any action on any item of business (action within the authority of the Board) outside of a meeting. 5.11. Definition of Meeting. “Board Meeting” means either of the following: A. A congregation, at the same time and place, of a sufficient number of Directors to establish a quorum of the Board, to hear, discuss, or deliberate upon any item of business that is within the authority of the Board; or, B. A teleconference in compliance with Section 5.7. ARTICLE VI. POWERS AND DUTIES OF THE BOARD OF DIRECTORS 6.1. Duties. The Board of Directors shall undertake and fulfill the following duties: A. Adopt Policies: The Board shall adopt policies of the Association which shall consist of such resolutions adopted by the Board of Directors that fulfill the purposes of the Association. Said policies will serve the membership and management as the statement of the specific objectives and purposes for which the Association exists. B. Oversight and Review of Administration of Association Affairs. The Board shall review and direct the officers any Managing Agent of the Association to assure that the policies of the Association are being accomplished in a reasonable and prudent manner and that the requirements set forth in the Governing Documents and the laws applicable to the Subject Lots are fulfilled to the extent reasonable and appropriate. C. Supervision: The Board shall supervise all officers, agents and employees of the Association to see that their duties are properly performed. Page 699 -7- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc 6.2. Powers. The Board of Directors shall have power to: A. Manager: Employ a Managing Agent. B. Adoption of Rules: Adopt Rules in accordance with the Declaration. C. Assessments and Fines: Levy and collect Assessments and impose fines as provided in the Declaration. If the Association adopts or has adopted a policy imposing any monetary penalty, including any fee, on any Association Member for a violation of the governing documents or rules of the Association, including any monetary penalty relating to the activities of a Member or Occupant of a Subject Lot, the Board shall adopt and distribute to each Member, by personal delivery or first-class mail, a schedule of the monetary penalties that may be assessed for those violations, which shall be in accordance with authorization for Member discipline contained in the governing documents. The Board shall not be required to distribute any additional schedules of monetary penalties unless there are changes from the schedule that was adopted and distributed to the Members pursuant to this Section. C. Enforcement (Notice and Hearing): Enforce the Declaration and these Bylaws. When the Board is to hold a hearing to consider or impose discipline upon a Member, the Board shall notify the Member in writing, by either personal delivery or first-class mail, at least ten (10) days prior to the hearing. The notification shall contain, at a minimum, the date, time, and place of the hearing, the nature of the alleged violation for which a Member may be disciplined, and a statement that the Member has a right to attend and may address the Board at the hearing. The Board shall meet in executive session if requested by the Member being disciplined. If the Board imposes discipline on a Member the Board shall provide the Member a written notification of the disciplinary action, by either personal delivery or first-class mail, within fifteen (15) days following the action. A disciplinary action shall not be effective against a Member unless the Board fulfills the requirements of this Section. D. Contracts: Contract for goods and/or services in accordance with the Declaration, and these Bylaws. E. Delegation: Delegate its authority and powers to officers or employees of the Association or to a Managing Agent employed by the Association. F. Other Powers: The Association may exercise the powers granted to a nonprofit mutual benefit corporation as enumerated in California Corporations Code § 7140 except for the use of a corporate seal or issuance of membership certificates. ARTICLE VII. ASSOCIATION DUTIES AND RESPONSIBILITIES 7.1. Association Duties: The Association shall, as provided in these Bylaws, or as the Board may otherwise direct through its Managing Agent, undertake the following duties and responsibilities: A. Requirements of Declaration: Perform and undertake the actions and duties stated and described in the Declaration; B. Insurance: Maintain insurance as required by the Declaration or which the Board determines to be prudent. C. Assessments: Fix, levy, collect and enforce Assessments as set forth in the Declaration; D. Expenses and Obligations: Pay all expenses and obligations incurred by the Association in the conduct of its business including, without limitation, all licenses, taxes, or governmental charges levied or imposed against the property of the Association; E. Enforcement: Enforce these Bylaws and the Declaration; F. Records: Cause to be kept a complete record of all its acts and affairs and to present a statement thereof to the Members at the annual meeting of the Members, regular meeting, or at any special meeting when such statement is requested in writing by any Member; keep adequate and correct books and records of account, minutes of proceedings of its Members, Page 700 -8- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc Board and committees, and a record of its Members giving their names and addresses and classes of membership; G. Contracts: Contract for goods and/or services in accordance with the Declaration; and, H. Financial Requirements: Comply with the Financial Requirements set forth in Article XI of these Bylaws. ARTICLE VIII. OFFICERS AND THEIR DUTIES 8.1. Enumeration of Officers. The officers of this Association shall be a President and Vice President, who shall at all times be Directors serving on the Board of Directors, a Secretary, and a Chief Financial Officer, and such other officers as the Board may from time to time by resolution create. An individual may hold more than one office. 8.2. Appointment of Officers. The appointment of officers shall take place at the first meeting of the Board of Directors following each annual meeting of the Members. 8.3. Term. Each officer of this Association shall be appointed annually by the Board and each shall hold office for one (1) year unless he or she sooner resigns, or is removed, or is found by the Board to be disqualified to serve. 8.4. Special Appointments. The Board may appoint such other officers as the affairs of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as the Board may, from time to time, determine. 8.5. Resignation and Removal. Any officer may be removed from office (but not from the Board, if the officer is also a Board Member) by the Board with or without cause. Any officer may resign at any time by giving written notice to the Board, the President or the Secretary. Such resignation shall take effect on the date of receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 8.6. Vacancies. A vacancy in any office may be filled by appointment by the Board. The officer appointed to such vacancy shall serve for the remainder of the term of the officer he replaces. 8.7. Duties. The duties of the officers are as follows: A. President. The President shall preside at all meetings of the Board of Directors; shall see that orders and resolutions of the Board are communicated to the Association officers and Managing Agent (if any) and carried out; shall sign all leases, mortgages, deeds and other written instruments and shall sign all promissory notes. The President shall have the general powers and duties of management usually vested in the office of the President of a California nonprofit mutual benefit corporation, and shall have such powers and duties as may be prescribed by the Board or by these Bylaws. B. Vice President. The Vice President shall act in the place and stead of the President in the event of his absence, inability or refusal to act, and shall exercise and discharge such other duties as may be required by the Board. C. Secretary. The Secretary shall record the votes and keep the minutes of all meetings and proceedings of the Board and of the Members; serve notice of meetings of the Board and of the Members; keep appropriate current records showing the Members of the Association together with the addresses, and shall perform such other duties as required by the Board. D. Chief Financial Officer. The Chief Financial Officer shall receive and deposit in appropriate bank accounts all monies of the Association and shall disburse such funds as directed by resolution of the Board of Directors; shall sign all promissory notes of the Association; shall keep proper books of account; shall prepare and shall distribute budgets and financial statements to each Member as required under these Bylaws, and by applicable laws. Page 701 -9- G:\Shaun\Client Files\Ironwood Estates Association (individual members)\Appeal (to City)\BYLAWS[Unincorporated][11 15 21].doc ARTICLE IX. COMMITTEES 9.1. Committees. The Board of Directors may appoint such committees of Members as deemed appropriate in carrying out its purpose. ARTICLE X. BOOKS AND RECORDS 10.1. Inspection by Members. Association Records and Enhanced Association Records as defined in California Civil Code Section 5200 shall be made available for inspection and copying by any Member of the Association, or by his duly designated representative in accordance with the provisions of California Civil Code Sections 5200-5240. 10.2. Rules for Inspection. The Board shall establish reasonable rules for inspection and copying of Association records in accordance with California Civil Code Sections 5200-5240. 10.3. Inspection by Directors. Every Director shall have the absolute right at any reasonable time to inspect all books, records and documents of the Association and the physical properties owned or controlled by the Association. The right of inspection by a Director includes the right to make extracts and copies of documents, at the expense of the Association. ARTICLE XI. FINANCIAL AND REPORTING REQUIREMENTS 11.1. Budgets, Financial Statements and Reports. The Association shall cause to be prepared and distributed budgets, financial statements, and reports to each Member as required by California Corporations Code Sections applicable to unincorporated associations. The Association shall distribute to each Member an annual budget report 30 to 90 days before the end of its fiscal year. ARTICLE XII. MISCELLANEOUS 12.1. Amendments. These Bylaws may be amended, only by the affirmative vote (in person or by proxy) or written consent of no less than a fifty-one percent (51%) of the Members. 12.2. Conflicts. In the case of any conflict between the Declaration and these Bylaws, the Declaration shall control. 12.3. Fiscal Year. Unless the Board directs otherwise, the fiscal year of the Association shall begin on the first (1st) day of January and end on the thirty-first (31st) day of December of every year, except that the first fiscal year shall begin on the date of incorporation. 12.4. Electronic Communications. Electronic transmissions may be used to communicate with Members who have provided an unrevoked consent to the use of such means of transmission for communications. CERTIFICATE I, the undersigned, as the Secretary of the IRONWOOD ESTATES ASSOCIATION, an unincorporated association, hereby certifies that the foregoing Bylaws were adopted as the Bylaws of the Association on ____________________, 202__, and that the same do now constitute the Bylaws of the Association. This Certificate is executed under penalty of perjury on ____________________, 202__ in _______________, California.______________________ _______________________ Secretary Page 702 Page 703 Page 704 Page 705 Page 706 Page 707 Page 708 Page 709 Page 710 Page 711 Page 712 Page 713 Page 714 Page 715 Page 716 Page 717 Page 718 Page 719 Page 720 Page 721 Page 722 Page 723 Page 724 Page 725 Page 726 Page 727 Page 728 Page 729 Page 730 Page 731 Page 732 Page 733 Page 734 Page 735 Page 736 Page 737 Page 738 Page 739 Page 740 Page 741 Page 742 Page 743 Page 744 Page 745 Page 746 Page 747 Page 748 22061.00009\34658823.1 Bend (541) 382-3011 Indian Wells (760) 568-2611 Irvine (949) 263-2600 Los Angeles (213) 617-8100 Ontario (909) 989-8584 74760 Highway 111, Suite 100, Indian Wells, CA 92210 Phone: (760) 568-2611 | Fax: (760) 340-6698 | www.bbklaw.com Riverside (951) 686-1450 Sacramento (916) 325-4000 San Diego (619) 525-1300 Walnut Creek (925) 977-3300 Washington, DC (202) 785-0600 Robert W. Hargreaves (760) 837-1604 robert.hargreaves@bbklaw.com January 5, 2022 Via E-mail: lisakushida@gmail.com and U.S. Mail Ms. Lisa Kushida Community Association Manager Ironwood Estates Association Board Directors 74-710 Highway 111, Suite 102 P,O. Box 402 Palm Desert, CA 92260 Dear Ms. Kushida I am City Attorney for the City of Palm Desert. Your letter dated December 15, 2021, regarding short term rental (STR) permits for the properties listed below has been referred to me for response. I have reviewed the record of proceedings for the adoption of Ordinance No. 1360 (adopted December, 2020) which established new limits on short term rentals within Palm Desert Planned Residential Zones and have concluded, as has city staff, that the listed properties do not qualify for STR permits, because they do not exist within, and have approval of, an “HOA” as contemplated and required by the Ordinance (Palm Desert Municipal Code section 5.10.070(c)). In my opinion, it is clear from the proceedings leading to the adoption of Ordinance 1360 that the City Council in requiring the approval of an “HOA”, intended to mean an “HOA” as commonly understood at the time, the governing board of a common interest development formed under the Davis-Stirling Common Interest Development Act (Civil Code Section 41200 et seq) consisting of contiguous properties subject to CCRs and with an governing board that is elected by, and responsive to, the whole neighborhood and capable of enforcing STR regulations to the satisfaction of the whole neighborhood. Given the apparent recent formation of the “Ironwood Estates Homeowners Association” and the dispersed nature of the listed properties, that does not appear to be the case. If we are missing relevant facts, please clarify. Otherwise, please consider this letter as a denial of the STR applications for the listed properties. This Page 749 22061.00009\34658823.1 Ms. Lisa Kushida January 5, 2022 Page 2 denial may be appealed to the City Council, pursuant to Palm Desert Municipal Code Chapter 2.72. Applications and application fees, along with a copy of this letter, are being returned to individual applicants at addresses below. Sincerely, Robert W. Hargreaves of BEST BEST & KRIEGER LLP RWH:alr Enclosures cc: Oliver and Randie Chaine 74053 Alpine Lane Palm Desert, CA 92211 Jennifer DeSimone 74140 College View Circle East Palm Desert, CA 92211 Tracy Phillips 74602 Lavender Way Palm Desert, CA Michael & Irma Baronian 40603 Via Fonda Palm Desert, CA 92260 Sirvard Chalikyan 40765 Avenida Estrada Palm Desert, CA 92260 Page 750 22061.00009\34658823.1 Ms. Lisa Kushida January 5, 2022 Page 3 Hieu Luu 74513 Columbine Drive Palm Desert, CA 92260 Rozanna Bagoian / Armen Semerjian 40744 Via Fonda Palm Desert, CA 92260 James Sutherland 74120 Chinook Circle East Palm Desert, CA 92211 Michael & Irma Baronian 40750 Centennial Circle Palm Desert, CA 92260 Michael Hackett 75686 Easy Street Palm Desert, CA 92211 Mark McGowan, Esq. 72-630 Fred Waring Drive, Suite 201 Palm Desert, CA 92260 Pedro Rodriguez, Palm Desert Code Compliance Officer Page 751 Sources: Esri, HERE, Garmin, Intermap, increment P Corp., GEBCO, USGS, FAO, NPS, NRCAN, GeoBase, IGN, Kadaster NL, Ordnance Survey, Esri Japan, METI, Esri China (Hong Kong), swisstopo, © OpenStreetMap contributors, and the GIS User Community Sources: Esri, HERE, Garmin, Intermap, increment P Corp., GEBCO, USGS, FAO, NPS, NRCAN, GeoBase, IGN, Kadaster NL, Ordnance Survey, Esri Japan, METI, Esri China (Hong Kong), swisstopo, © OpenStreetMap contributors, and the GIS User Community IRONWOOD ESTATES HOA MEMBER PROPERTIES INTERESTED IN SHORT-TERM RENTAL PERMITS I VICINITY MAPPage 752 Page 753 Page 754 Page 755 Page 756 Page 757 Page 758 Page 759 Page 760 Page 761 Page 762 Page 763 Page 764 Page 765 [This page has intentionally been left blank.] Page 766 STAFF REPORT CITY OF PALM DESERT DEVELOPMENT SERVICES DEPARTMENT DATE: February 24, 2022 PREPARED BY: Eric Ceja, Deputy Director of Development Services Deborah Glickman, Management Analyst REQUEST: Request for direction regarding recommendations contained in the 2021 Broker’s Report Recommendation Receive and File the 2021 Business Report; and By Minute Motion, provide City staff direction to: 1) Initiate a Zoning Ordinance Amendment (ZOA) to execute the recommendations contained in the 2021 Commercial Broker’s Report to add new land use categories, remove certain land-uses from requiring a Conditional Use Permit, and to add new land use definitions to the Zoning Ordinance. Background Analysis In January 2021, the Economic Development division hosted an online Broker’s Forum for Coachella Valley’s commercial real estate brokers. At the forum, Economic Development and Planning division staff members introduced themselves to the brokers and presented the brokers with the following updates: • Presentation of pertinent Buxton matches • Discussion of potential City incentives • Highlights of upcoming commercial and residential projects • Outdoor dining opportunities The forum was extremely well received, with an attendance of fifteen (15) brokers from (nine) brokerages. Due to the positive reception, staff intends to host another Broker’s Forum, tentatively planned for March 2022. In the fall of 2021, staff scheduled individual meetings with the commercial broker’s listed in the report. The intent of these meetings was to: • Introduce new staff and organizational changes that better serve their needs • Gain additional insights to the commercial leasing and sales market through 2021 • Understand specific opportunities and challenges in Palm Desert • Solicit feedback in how the City can be helpful. Page 767 February 24, 2022 – Staff Report Direction on Broker’s Report Recommendations Page 2 of 3 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\Business Report\0 CC Staff Report (Brokers_Bsuiness Report).doc The commercial brokers eagerly shared information with staff and they discussed specific challenges related to leasing. Staff was able to make suggestions on what process improvements would be beneficial in their leasing and sales efforts. The outcome of the meeting resulted in the preparation of the 2021 Commercial Broker’s Report, as well as recommendations to remove barriers contained in the existing zoning ordinance. As indicated in the report, staff is recommending changes to the zoning ordinance to identify desirable land uses and remove the Conditional Use Permit (CUP) requirements in lieu of Administrative Use Permits (AUP). The AUP process provides staff-level review and approvals for businesses with notification to adjoining properties, as opposed to the more lengthy public hearing process of a CUP. In addition, staff is recommending to expand land use definitions within the Zoning Ordinance and provide a distinction for Veterinary and pet boarding uses. A summary of the report is provided in the attached “2021 Commercial Broker’s Report.” Business Report Summary: Below is a summary of the content of the attached 2021 Business Report, which details City staff and business activities in roughly the last quarter of 2021. During this time, staff interacted with more than two-hundred and fifty (250) of the City’s businesses via email, phone and in-person. Through these interactions, staff discovered that the City’s businesses are recovering well from the difficulties they faced in 2020 and 2021 in relation to COVID-19. The areas in which businesses continue to struggle in are finding and retaining staff, and the increased costs associated with it. When businesses needed assistance with issues related to the City and its processes, the City assisted in the following ways: • Assistance with Business Licenses • Information on zoning for new businesses • Demographic information Over the course of this time, 166 new business licenses were issued and commercial vacancy rates dropped throughout the City. Staff researched Citywide vacancy rates, including north Palm Desert, and El Paseo, and found that rates were near or at a ten (10) year low across the board. To assist these new businesses, and existing ones, a “Doing Business in Palm Desert” page was added to the Engage Palm Desert website. This page details steps to opening a new business or navigating changes to an existing business, as well as resources for entities outside of the City. Next steps for business development in the City include the following: • Hosting a brokers’ forum in the first quarter of 2022 to touch base with the brokers and find out what business needs have come to their attention. • Continued outreach to Unite Palm Desert loan recipients. • Continued outreach and visits to both new and existing businesses including administering a survey to them requesting information on their future plans and ways in which the City can assist them. Page 768 February 24, 2022 – Staff Report Direction on Broker’s Report Recommendations Page 3 of 3 W:\Staff Reports - Shared 2\Staff Reports 2022-0224\5 - Clerk's Office - 2022-0224\Business Report\0 CC Staff Report (Brokers_Bsuiness Report).doc Economic Development Subcommittee On January 24, 2022, Development Services/Economic Development staff met with the Economic Development Subcommittee (Councilmember Kelly and Councilmember Jonathan) to review the 2021 Commercial Broker’s Report and the 2021 Business Report. Feedback from the subcommittee was significantly positive. Staff specifically sought the Subcommittees response to the recommended actions in the Broker’s Report, and after some discussion on the technical aspects of the changes to the zoning ordinance, the subcommittee did recommend that we bring the recommendations forward to the City Council. In addition, the Subcommittee suggested bringing both reports forward for City Council consideration and information. Request for Direction Staff is requesting direction from the City Council related to the recommendations contained in the 2021 Commercial Broker’s Report including: 1) Initiate a ZOA to: a. Review the Land Use Tables contained in the Zoning Ordinance and to identify desirable land-uses, including restaurants, daycare centers, health clubs, and indoor automotive sales, and change the requirement for a Conditional Use Permit (CUP) to an Administrative Use Permit (AUP). b. Review land use definitions and expand specific land use categories including: veterinarians and pet boarding. Fiscal Analysis There is no fiscal impact related to the staff’s recommendation. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Martin Alvarez Martin Alvarez Dir. of Development Services N/A Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager, L. Todd Hileman: L. Todd Hileman ATTACHMENTS: 1. 2021 Business Report 2. 2021 Commercial Broker’s Report Page 769 Economic Development December 2021 Business Report G:\Econ Development\Business Report\Business Report - CC Staff Report.docx Between late September and December 2021, Economic Development staff had more than 250 interactions with Palm Desert businesses. More than 125 of these interactions were in person, and the others were via phone or email. The interactions fell into the following categories • Ribbon Cuttings • Participation in the PDACC monthly membership and board meetings • Participation in the DVBA monthly meetings • Business Visits/Business Advocate Introductions • Businesses reaching out to me for assistance with opening a new business • Requests for Business License information • PPE Requests • Updates from Unite Palm Desert loan recipients • Outreach to businesses in CIP project areas (i.e., President’s Plaza and Alessandro Alley) Responses from Businesses Overall, businesses reported that they are doing well. • The prominent issue that businesses are having is difficulty with staffing. Businesses reported that they are setting up interviews and the applicants are not showing up. In cases where applicants attended interviews and were hired, businesses reported that the new employees were not committed and often stay only one to two weeks. • Businesses reported that their existing employees are salary shopping by interviewing with different employers that are willing to pay more. They are then using the higher-wage job offers to get a raise with their current employer. One restaurant reported that it is paying dishwashers $20 per hour. • If businesses had issues with the City of Palm Desert, it was that they were having a difficult time getting a Business License. This complaint primarily occurred at the beginning of my outreach. As HDL Consulting (the third-party processor of the City’s Business Licenses) has settled into its licensing process the complaints have diminished. These complaints were solved by staff reaching out to HDL on the business' behalf. • The other complaint staff heard on a couple of occasions is that businesses were having difficulty getting Fire Marshal inspections. To assist with these complaints, staff worked with the Permit Center and the Fire Marshal’s office to remedy permit issues and ensure a continuity of service Unite Palm Desert Loan Recipients • After the State of California mandatory shut down due to the COVID-19 virus, the City Council approved several different grants and forgivable loans to assist the City’s businesses pay for regular operating costs and for restaurants to expand Page 770 Economic Development December 2021 Business Report G:\Econ Development\Business Report\Business Report - CC Staff Report.docx their dining decks. Through these programs, the City gave its businesses more than 300 grants/loans valued at over $2 million dollars. • Outreach was conducted to select Unite Palm Desert loan recipients. Every recipient with whom staff spoke expressed gratitude to the City for the assistance. • One business said that the loan allowed it to remain open and not lay off any of its employees throughout the shutdown. • Staff only spoke with one loan recipient for which the shutdown took too high of a toll on its income and as a result had to close. Staff will continue to conduct outreach to the loan recipients to gain a better understanding of specific businesses needs and what assistance, form the City, is most helpful for their particular needs. Assistance Starting a Business Staff regularly speaks with businesses that are interested in locating or relocating in Palm Desert. • The most frequent question staff received from the business owners and commercial real estate brokers was about zoning and in which areas of the City their particular business can locate. • Other questions included what permits would be needed, and suggestions for marketing their business. • Through conversations with staff, businesses expressed that it would be helpful to have a step-by-step guide for how to open a business in Palm Desert. A guide already exists, but it is outdated. Staff is working on updating the information and publishing it on the Economic Development section of the City’s website by March 2022 Palm Desert Area Chamber of Commerce (PDACC) • The PDACC has been busy reaching out to new businesses and has been a good resource at directing businesses with questions to City staff. Business Survey • An updated business survey was completed in October 2021 and published on the City’s Engage Palm Desert webpage. Additionally, CV Strategies has been engaged to conduct further outreach to El Paseo businesses and encourage them to take the new City of Palm Desert Business Survey. To date, six (6) businesses have taken the survey. • A few of the answers from the responding businesses are as follows: o 3 of the businesses had been located on El Paseo for 2-3 years and 3 for 10+ year o 3 businesses identify as retail, 1 as hospitality, 1 personal services, and 1 as other (photography) o Located in Palm Desert because of the clientele or because it was close to their home Page 771 Economic Development December 2021 Business Report G:\Econ Development\Business Report\Business Report - CC Staff Report.docx o When their lease was going to expire, 3 of the businesses planned to renew, 2 responded “other” and one did not respond to this question. Business Licenses During this time, 166 new Business Licenses were issued to businesses within the City including home-based businesses (40). Notable business openings include: • El Paseo o Athleta o Be Seen Optics o Fig and Nash o Firebirds Retail Store o Goldfield home o Kyle X Shahida o Larkspur Grill o Olivier Napa Valley o Rebecca Taylor o Sundance • Around the City o D' Coffee Bouteaque (Country Club and Monterey) o Elder Love Thrift Shop (Bump and Grind Shopping Center) o European Flower Power (San Pablo) o Fusion Training Studio (Palms to Pines Shopping Center) o Habit Burger (North Sphere) o Haus of Fades (Washington and Country Club) o Holiday Inn Express (Technology Drive) o The Stretch Zone (Highway 111) o The Wellness Mode (Highway 111) Vacancies (Based on CoStar data) Citywide Vacancies throughout the City of Palm Desert in Q4 2021 are at 6.3%, which is down -1.3% from Q4 2020. This marks the second lowest vacancy rate in 10 years. The lowest vacancy rate was 5.8% in Q4 2019. Page 772 Economic Development December 2021 Business Report G:\Econ Development\Business Report\Business Report - CC Staff Report.docx 10-Year Vacancy Rate - Citywide El Paseo between Portola and Highway 74 Page 773 Economic Development December 2021 Business Report G:\Econ Development\Business Report\Business Report - CC Staff Report.docx 10 Year Vacancy Rate – El Paseo North Sphere (Country Club between Monterey and Washington north to I10) Page 774 Economic Development December 2021 Business Report G:\Econ Development\Business Report\Business Report - CC Staff Report.docx 10 Year Vacancy Rate – North Sphere Next Steps • Update of the Economic Development section of the website. • Continued outreach to Unite Palm Desert loan recipients. • Continued outreach and visits to both new and existing businesses. Page 775 ECONOMIC DEVELOPMENT 2021 COMMERCIAL BROKERS REPORT As a follow-up to the January 2021 Broker’s Forum, the City’s Economic Development team initiated meetings with several commercial brokers active in Palm Desert and the Coachella Valley. The intent of these meetings was multifaceted: •Introduce City staff and recent organizational changes at City Hall. •Allow staff to better understand current market conditions: “What are you seeing?” •Understand specific opportunities and challenges in property transactions and leases. •Ask “How can the city help your efforts in leasing/sales?” The report below highlights feedback and themes provided by the participating firms. In addition, the Economic Development team is providing specific recommendations for implementation in the coming months. Commercial Brokers Engaged •Baxley Properties: Matthew Longstreth •Coldwell Banker: Steven Lyle •Desert Pacific Properties: Paula Turner •Johnson Commercial: Matt Johnson •Lee & Associates: Shawna Strange and Maggie Montes •NAI Capital: Lynn Coker and Nancy Portolesi •Smoketree Investments: Josef Jonathan •The Firm: Adam Gilbert •Wilson and Meade: Noel Ramos, Monique Millan, Heather Sharp, Matt Rifkin, and Bill Sanchez (Capital Building Services) Consistent Themes 1.Property Management Companies often manage commercial/office properties between Beaumont to Coachella. Some have larger regional, state, or national footprints. 2.At least three (3) relatively large office/retail buildings/sites are set to close escrow soon on Highway 111. Page 776 Sales and leasing 1.Commercial/retail space is performing well. 2.Leasing is slow as there is limited to no space available. 3.Less than 2% vacancy on warehousing 4.Less than 1% vacancy on industrial. Most potential tenants are looking for 1,000 square feet to 2,500 square feet with roll-up doors. 5.Even with industrial space scarce, rent prices do not justify new construction (at least not yet). The City could consider zoning more land for industrial type uses. Office 1.Office around 10% vacant. 2.There is an approximate 18-month lag until lenders come after owners for missing payments. There is a need for a bridge to help owners make missing payments and fill space. 3.Class A office space performs well with little to no vacancy. However, Class B/C spaces are too large, outdated, and require substantial investment. 4.Smaller office space and shared space are desired. Retail 1. Retail is around 10% vacant but performing well. On-Going Issues 1.Older building stock is outdated and not meeting the needs of today’s tenants 2.Commercial and office rents don’t justify investment into property. 3.Businesses want to locate in Palm Desert because of its central location; however, finding space is problematic and zoning hurdles impede this process. 4.Potential tenants are extremely hesitant to go through any city discretionary entitlement process. 5.Property owners are also hesitant to go through any city discretionary processes related to architectural design for building façade updates. 6.Difficulty with/understanding the One Eleven Development Code and requirements for parking. Although generally agreed that parking reductions are good, tenants still require ample parking available in proximity to the storefronts. PD gets gold stars on the development process and staff availability! Page 777 Staff Recommendations Based on the feedback provided staff is recommending minor changes to the City’s Zoning Ordinance and other process improvements that will assist in the opening of businesses within the City. 1.Provide Zoning Ordinance review and identify specific land use (i.e., restaurants, daycare centers, health clubs, and automotive sales) which would benefit from a reduction in City processing. Staff recommends reducing the Conditional Use Permit (CUP) process for these uses and supplant the CUP requirement with an Administrative Use Permit (AUP) process, which can be reviewed by Development Services staff. This process would result in a reduction of review time from 3-4 months for a CUP to 1-2 months for AUP approval. Requires Zoning Ordinance Amendment (ZOA) and approval by the Planning Commission and City Council. 2.Expansion of land uses and their definitions. Currently, the Zoning Ordinance identifies a broad range of land uses categorized as either: o Residential o Recreation, Resource Preservation o Utilities o Retail, Service, and Office Uses o Automotive Uses, and o Industrial, Manufacturing, and Processing Uses. The specific business types identified in these categories are narrow in their scope and may no longer correspond to changes in business practices. Specifically, the definition of Medical Offices is broad enough to include veterinarian use but prohibits overnight stays/boarding. Staff recommends identifying such desirable uses and either specifically calling them out in the land use table and/or expanding their definitions within the Zoning Ordinance to align with current business practices. Requires Zoning Ordinance Amendment (ZOA) and approval by the Planning Commission and City Council. Page 778 3.Development Process “Quick Notes.” Some of the feedback received was that a “quick notes” version of the City’s development process be prepared and available to brokers, potential businesses, and the public. By creating these “quick notes,” the City can abbreviate and accurately explain the development process. Staff is preparing these infographics now and will have them available online and at the permit center. Infographics will also be prepared explaining what improvements will trigger additional Americans with Disabilities Act (ADA) improvements and explain what the exception process entails. Requires Staff initiated and in process. Anticipated Completion February 2022 Page 779 [This page has intentionally been left blank.] Page 780 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S OFFICE MEETING DATE: February 24, 2022 PREPARED BY: Andrew Firestine, Assistant City Manager REQUEST: Authorize the advertisement of a Request for Proposal (RFP) for Automatic License Plate Recognition (ALPR) technology at selected intersections. _________________________________________________________________________ Recommendation By minute motion: 1. Authorize the advertisement of a Request for Proposal (RFP) for Automatic License Plate Recognition (ALPR) technology at selected intersections and the formation of a selection committee consisting of member(s) of the Public Safety Commission, City Council, and staff. 2. Appoint one or more members of City Council to participate on the selection committee. Background Analysis The Public Safety Commission considered this item at their February 9, 2022, meeting and recommended approval of the recommendation as presented. Their discussion supported an open and competitive RFP process as there are multiple ALPR vendors. Automated License Plate Recognition (ALPR) technology was authorized for use by state and local law enforcement agencies by the passage of California Senate Bill 1330 in May of 2012. ALPR systems utilize special cameras to capture a color image, as well as an infrared image, of a license plate from a passing vehicle. Those images are converted to a text file utilizing Optical Character Recognition (OCR) technology. The text file is automatically compared against law enforcement databases for review against stolen vehicles, stolen license plates, wanted persons, missing persons, and public safety related incidents. ALPR’s may also be used to gather information related to active warrants, homeland security identifiers, electronic surveillance, suspect interdiction and stolen property recovery. In addition, ALPR data can be an extremely valuable tool for criminal investigations in a number of ways by providing law enforcement investigative leads. ALPR technology has also been proven to assist with non-criminal investigations Page 781 February 24, 2022 - Staff Report ALPR Technology at Selected Intersections Page 2 of 5 such as aiding in the timely return of critical missing persons and identifying vehicles linked to endangered persons. The Riverside County Sheriff’s Department currently uses ALPR technology on patrol vehicles within the City of Palm Desert pursuant to the recommendation of the Public Safety Commission and the approval of City Council in November 2018 for three (3) mobile ALPR systems from Vigilant Solutions. Since this approval, the use of ALPR within Riverside County and the Coachella Valley has increased significantly, including among cities within the Coachella Valley and in unincorporated areas. Within the Coachella Valley, Rancho Mirage has installed 26 fixed cameras at 10 intersections since 2019 and Indian Wells is preparing to undertake a similar effort. Indio approved a lease for 20 ALPR systems in January 2022 and Riverside County approved a lease for 260 cameras for the unincorporated areas in October 2021. By way of this staff report, staff is seeking direction from the City Council on the further deployment of ALPR technology in Palm Desert, including its installation at approximately 30 intersection locations. Preliminarily, the Riverside County Sheriff’s Department has identified that the City would need 40 to 56 camera systems, depending on the vendor, to provide full coverage of the City at its primary entryway and exit points and at major intersections on arterials. A map available at https://protect-us.mimecast.com/s/xC- eC5yExkHYN4lSOXBfs shows a conceptual camera placement, including how the cameras relate to those in the City of Rancho Mirage. A list attached to the staff report provides a more detailed breakdown of their potential placement at each intersection and the number of cameras needed (at the higher end of the range). As additional background, a fixed location ALPR solution contains both hardware and software. The hardware consists of a camera that is either hardwired to an electrical source or is solar powered. The camera captures photos of vehicles that pass through the travel lanes that it is oriented towards. A typical intersection would need multiple cameras to cover each leg of the intersection. The cameras are paired with a software solution that processes the images in such a way that they can be used by law enforcement. The capability of these software systems varies by vendor, but they all permit a search by license plate number or partial plate number, time, date, and location with real-time alerts and notifications of hits. The data is stored in a cloud-based system that retains the images for a period of time ranging from 30 days to 1 year. One software system uses machine learning to enable searches by vehicle characteristics without the need for a reflective license plate, including vehicle color, type, manufacturer, state of license plate, and object detection (roof rack, bumper stickers, etc.) The use of ALPR technology provides law enforcement agencies with an additional tool to reduce crime, a tool that has been demonstrated to not only identify stolen vehicles Page 782 February 24, 2022 - Staff Report ALPR Technology at Selected Intersections Page 3 of 5 and stolen license plates but also to improve the investigation of crime through the identification of vehicles associated with criminal activity. The City of Rancho Mirage has reported statistics from their system that reveal 31,946,312 license plate reads between June 2019 and January 2022 (31,225,176 from fixed point locations and 721,136 mobile, data may include hits on multiple cameras). That data has produced 326,387 stolen vehicle hits and 292,456 stolen license plate hits (data may include hits on multiple cameras). Beyond those hits, however, the system has also been a key tool in multiple cases: • February 2020 – ALPR camera led to the identification of a suspect responsible for nine (9) vehicle burglaries in Palm Desert and Thousand Palms and burglaries in the Cathedral City and Palm Springs areas. • July 2020 – ALPR camera led to the identification of a Palm Desert burglary suspect, which led to the identification of three (3) additional suspects, all of whom were later arrested. • December 2020 – ALPR assisted in the identification of a suspect responsible for theft in the unincorporated area of Thousand Palms. • March 2021 – ALPR camera led to the identification of suspect responsible for 14 residential burglaries in Palm Desert and Rancho Mirage. • December 2021 – ALPR camera assisted in the apprehension of a suspect responsible for a homicide in Palm Desert. • January 2022 – ALPR assisted in the identification of a vehicle suspected in multiple commercial burglaries In Palm Desert and elsewhere in the Coachella Valley. Principally, there are two vendors operating ALPR technology in Riverside County – Vigilant Solutions and Flock Safety. Materials for both vendors are attached to this staff report. There are advantages to each system. Vigilant Solutions is viewed as a system that can read plates in dark environments and on vehicles moving at high speeds. It is also rugged and operates at temperatures of up to 140 degrees Fahrenheit. The data retention on Vigilant Solutions can also be defined by law enforcement agencies. Flock Safety has a lower upfront cost and its software includes machine learning capabilities that permit searches based on vehicle attributes without a license plate. The City currently contracts with Vigilant Solutions for its mobile ALPR units. Rancho Mirage and Indian Wells have also adopted the Vigilant Solutions ALPR technology, including for fixed point locations. Elsewhere in Riverside County, Eastvale and Perris also contract with Vigilant Solutions (Perris also contracts with Flock Safety). The City of Rancho Mirage’s recent experience with Vigilant Solutions fixed cameras suggests an approximate one-time cost of $12,000 to $15,000 per camera. An additional four-year warranty is available at an approximate cost of $1,500 per camera and the cameras are supported through a roughly $400 per year per year subscription fee. A Page 783 February 24, 2022 - Staff Report ALPR Technology at Selected Intersections Page 4 of 5 Vigilant Solutions fixed camera deployment would require the use of more cameras as they can only view one travel lane. While no specific estimates have been made for a Palm Desert application, any cost projection for Vigilant Solutions should be based on the higher end of the range of cameras needed to support the system. A 56-camera deployment would incur a one-time cost of $672,000 to $840,000 with an on-going annual subscription fee between $21,000 and $23,000. Flock Safety was formed in 2017 and has a significant footprint in Southern California. Other local Southern California government agencies currently using Flock Systems include the Los Angeles Sheriff’s Department, Azusa Police Department (PD), Covina PD, West Covina PD, and the City of Redlands. Within Riverside County, the Sheriff's Department, as well as the cities of Beaumont, Canyon Lake, Cathedral City, Corona, Desert Hot Springs, Hemet, Jurupa Valley, Lake Elsinore, Menifee, Norco, Perris, San Jacinto, Temecula, and Wildomar are also on the Flock Safety system. Indio recently approved a lease with Flock Safety as well. Flock Safety operates a subscription-based model of $2,500 per camera per year, covering the camera and software, together with a one-time fee of $250 per camera. An advanced search tool is available for an annual cost of $3,500. Flock Safety has provided an estimate for a 40-camera deployment that would cost $113,500 in the first year and $103,500 each year thereafter. The cameras are designed to operate on solar power, although they may optionally be wired to existing infrastructure. The City would be responsible for any costs of wiring the cameras if this were desired. While some cities and Riverside County have chosen to sole source the selection of a vendor for ALPR technology, including the City of Palm Desert itself in 2018, the Palm Desert Municipal Code only permits a sole source exception to a procurement process when it is determined that there is only one source that provides the needed product or service or where a specific product is needed to be compatible with other City products and equipment. This is a difficult finding to make as it is clear that there are at least two vendors who currently provide ALPR technology in the Coachella Valley. The City currently contracts with Vigilant Solutions for mobile ALPR and where both the cities of Rancho Mirage and Indian Wells, contract cities under the Riverside County Sheriff’s Department, also use Vigilant Solutions, while Flock Safety has developed a significant footprint in Riverside County. With this in mind, it is staff’s recommendation that the City conduct a Request for Proposal (RFP) process to invite proposals from both Vigilant Solutions and Flock Safety and that the selection committee include member(s) of the Public Safety Commission and City Council. Staff is also requesting that, with this recommendation, the Council identify those member(s) of Council that it would like to select to participate on the selection committee. Page 784 February 24, 2022 - Staff Report ALPR Technology at Selected Intersections Page 5 of 5 Fiscal Analysis ALPR technology was not contemplated in the FY 21/22 budget. If it is implemented this fiscal year, a budget appropriation may be needed. Otherwise, the expenditure may be planned for the FY 22/23 budget. The purchase may be eligible for the use of Supplemental Law Enforcement Services Funding (SLESF), a funding source that supports expenditures for front line law enforcement. According to the City’s SLESF expenditure plan for FY 21/22, the City’s SLESF balance is approximately $240,000 and it expects to receive an additional $100,000 this fiscal year. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER n/a Robert W. Hargreaves City Attorney n/a Janet M. Moore Janet M. Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman ATTACHMENTS: Vigilant Solutions ALPR material Flock Safety material Page 785 Beech Grove, IN is an “excluded city” whose 15,000 residents are completely surrounded by Indianapolis Metro. Beech Grove has its own law enforcement and city government. Background Deputy Chief Hurrle, who has spent the entirety of his career in Beech Grove, knew that his 36 sworn officers needed to be equipped with the best tools to keep themselves and the community safe. Recently, that has meant spending time to upgrade Beech Grove’s technology. After being pulled into a case with Indianapolis Police where a Flock Safety camera was used to help solve a string of serious burglaries, Beech Grove PD began looking at deploying LPR. “It was readily apparent that we needed to grow up,” said Deputy Chief Hurrle. “Over the last year since installing the Flock cameras, I would say we’re leaps and bounds ahead of where we were.” How One Law Enforcement Agency Measures the ROI of Technology Best Practices for Mid-Sized Agencies on Getting the Most Out of an ALPR System The Agency Needed to Grow "Leaps and Bounds" Given their location, much of Beech Grove’s crime originates in or bleeds over from Indianapolis. Common crimes include burglary, auto theft, and drug crimes, especially opioid use. “We used to be more of a traffic enforcement type of department, whereas now we’re more about crime,” said Deputy Chief Tom Hurrle. “Our focus is on getting guns, drugs, all the opioids that everyone talks about, off the street.” The Scenario Page 786 Almost immediately upon installing 5 Flock Safety cameras, Deputy Chief Hurrle says they began seeing results. Cases were being cleared and crimes being solved. Beech Grove tracks all Flock Safety Hot List alerts, searches, and solved cases, so leadership can evaluate success metrics, audit usage, and promote accountability. Tracking metrics has also led to more robust and frequent review of policing policy. For example, the Flock system prompted a significant increase in pursuits — in just three months in 2021, officers conducted more pursuits than the total number in 2020. Police leadership therefore chose to review and update their pursuit policy. “With this technology, pursuits are going to happen,” said Deputy Chief Hurrle. “As an administrator, you have to be prepared, that your policy is reviewed more frequently, and that it’s good review. My advice is that we need to be tracking all of these instances, so we can show that we’re willing to use restraint.” The statistics show that Beech Grove’s officers are taking full advantage of the features of Flock Safety. Every officer on the force has been trained to access the system while on patrol and at their desks. “Once officers try it with an open mind, they’re able to see how much of a force multiplier it is,” said Deputy Chief Hurrle. An Overnight Success Story “The only real question we hear from our officers is, ‘when can we get more?’ ” Vehicles Recovered 17 In Three Months Felony Arrests Executed 18 Stolen Plates Identified 8 — Deputy Chief Hurrle Page 787 How To Solve: University Campus Safety Clemson University established an ALPR virtual gate to keep students, faculty, and staff safer Policing a university campus has its unique challenges. The student population turns over every 3 to 5 years, necessitating constant education on crime prevention and safety. Campuses are highly transient, welcoming many visitors each day, and universities often host several large events each semester, from sporting events to concerts to guest speakers. These were the considerations for Clemson University Police Department Physical Security and Program Coordinator James Gowan, a former Clemson student and police captain with 25 years in law enforcement. Previously James led CUPD’s Criminal Investigations Division and has overseen the department’s Physical Security Effort for the 12 years since. Like many other university police agencies, Clemson already had hundreds of IP cameras and electronic access control to enhance safety. However, they wanted something to identify vehicular leads — an ALPR system. James oversaw the camera deployment, aided by Flock Safety deployment experts who aimed to ensure that Flock Falcon cameras covered the most high-traffic ingress points of campus. "We are frequently able to track a vehicle backward until we find where they came into campus and get a read from the nearest Falcon," James said. With its safety-as-a-service lease model, Flock's affordable ALPR system allowed Clemson to get cameras quickly installed and maintained at low cost and with no additional work for James or his team. Why Clemson University Police chose Flock Safety Flock is not only helping us detect crime and clear cases, but it is bringing to our officers’ attention crime moving through here that would have otherwise gone completely undetected. — James Gowan, Clemson University Police Page 788 Across the country, law enforcement agencies are finding that clearing more cases with Flock Safety is leading to crime numbers dropping across the board. One agency recorded a 70% reduction in burglaries; another saw the lowest crime rates recorded in the entire history of the police department. We know that this is because the number-one most effective deterrent to crime is the likelihood of being caught. When university police increase the surety of catching individuals who commit crimes on campus, the entire campus becomes safer. Common campus crime includes alcohol and drug-related issues and larceny (theft) in both residential and classroom areas. Interpersonal crime is also a concern for the Clemson University Police Department, as it is with all law enforcement agencies. Flock's ALPR consistently performs above competitors on number of plate reads and accuracy — in side-by-side testing Flock proved 30% more accurate than legacy ALPR providers. Officers rely on that accuracy to ensure they locate the correct suspects. In one case, Physical Security Specialists identified a suspect vehicle associated with a rash of expensive bicycle thefts, using surveillance video to backtrack and identify it passing a Falcon camera. Then, by using the Flock Lookup and Insights features, they placed the suspect at the site and timeframe of multiple thefts. Detectives recovered the bikes and the suspect was charged. Officers also make substantial use of the Flock Hot List for real-time alerts when a suspect vehicle enters the jurisdiction. In 2021, in unrelated instances, information from Flock helped put officers in contact with three separate individuals who were subsequently identified as having active warrants in Tennessee. "Our investigators and our patrol officers have well caught on to using the data provided through Flock to find leads for investigations or simply make sure an initial report is as thorough as it can be," said James. How Flock Safety features help solve cases Cases cleared leads to campus crime reduction We currently have great support from our administration for the idea of using technology to save time, money and effort, while making all of our public safety efforts more effective. — James Gowan, Clemson University Police Page 789 How Flock Safety Helps A One-Man Investigation Unit Fulshear, the “safest city in Texas”, covers 50 square miles with one Detective. Here’s how Flock Safety helps Detective Villa solve crime. About 45 minutes from Houston, Fulshear’s farm and ranchlands are adjacent to a growing commercial district. Fulshear is one of the fastest-growing Texas cities, exploding from 12,000 residents in 2018 to 18,000+ today. Fulshear’s 26 sworn officers cover the 11-mile city limits, as well as a 40-mile “extraterritorial jurisdiction” (ETJ) adjacent to the city. Covering that entire 50 miles is the Fulshear Criminal Investigation Division, comprised of just one investigator: Detective Bobby Villa. “Being a one-man unit, it’s a lot of pressure,” admits Detective Villa. Being part of the agency protecting the safest city in Texas only adds to that pressure. “One thing about being one of the safest cities is trying to stay on that list,” said Fulshear Chief Kenny Seymour said. “We don’t rest on those laurels; we’re always on the offensive when it comes to crime prevention.” And yet, when it came to the choice of adding an additional team member or purchasing intelligent, effective technology like Flock Safety that collects actionable evidence — Detective Villa chose the tech. “You can saturate the cities with bodies, but if they don’t have good information, you’re not going to solve crimes,” said Detective Villa. “Even if we had 5 or 10 people, what do you do if you don’t have the video? What do you do if you don’t have the evidence?” The Challenges of Being a One-Man Team Welcome to Fulshear, TX Page 790 One week after 25 Flock LPR cameras were installed in Fulshear, a report of one of the first residential burglaries in the city’s history crossed Detective Villa’s desk. Four burglars had entered the house of a family with young children, stealing their property (including firearms) and violating their privacy. Detective Villa found no fingerprints, but was able to pull a grainy video from a neighbor’s doorbell camera. It wasn’t a lot to go on, but he could make out the color and vehicle type: a white passenger car. With this bare bones lead, Detective Villa performed a search in the newly-installed Flock network and got a hit. The vehicle had a temporary paper license plate, which in the vast majority of LPR systems will not lead to an identification. Flock Safety’s database, on the other hand, does include paper plates. The investigator identified three out of the four suspects, and the agency executed a felony arrest within a few weeks. “I could have 50 officers out here, but they have to be at the right place at the right time. Strategically, I can put technology at the right place at the right time every time.” —Fulshear PD Chief Kenny Seymour A Big Case in Fulshear — Solved “Flock Safety gives you the confidence to know that you can go out and clear these cases. You are your own data analyst in a few strokes of a key.” —Detective Bobby Via Page 791 Welcome to Sarasota Florida’s Gulf Coast is known for its white sand beaches, mild waves, and year-round tanning weather. Nestled along the coast, the city of Sarasota and its miles of shoreline attracts many visitors, including snow birds and tourists. The sworn officers of the Sarasota Police Department are charged with protecting both Sarasota residents and visitors. This involves patrolling Sarasota beaches, including Lido Beach, an island attached to the mainland by a bridge. Investigators John Lake and Mike Harrell first heard about Flock Safety from colleagues at the local Sheriff’s Office. When they learned about Flock’s 24/7, infrastructure-free LPR cameras, they immediately wanted to learn more. John is an LPR veteran, implementing Sarasota PD’s first LPR program with mobile units in 2007. He liked Flock’s simple, lightweight setup. “I liked the portability part of it — we didn’t have to run lines for electricity or hook up ethernet cables that would take a lot of time. It picks up vehicles without tags, bicyclists, so it’s obviously different from your conventional LPR,” said John. Sarasota PD installed an initial group of Flock LPR cameras early this year. Already, the detectives said that the system is bearing fruit. Sarasota, FL Police Pilot: How LPR Helps Keep Residents and Visitors Safe In this tourist haven, Flock Safety License Plate Recognition technology helps solve crime LPR Technology in Sarasota Crime Overview 5-year downward trend in crime rates (both violent and property crime) 170 sworn officers employed by Sarasota PD 800 cases investigated by Sarasota’s Criminal Investigations Division (2019) Page 792 www.flocksafety.com/polic e 866-901-1781 Two days after the Flock cameras were installed in Sarasota, the agency received a stolen vehicle alert. They located the vehicle, caught the occupants after a foot chase, and recovered the vehicle and firearms in the car. Another week, they were able to use Flock’s Vehicle Fingerprint™ technology to identify a distinctive feature on a car being driven by a suspect wanted for three counts of aggravated assault with a deadly weapon. In yet another case, a stolen vehicle passed a camera strategically situated along the John Ringling Causeway bridge leading to Lido Beach. The vehicle and the suspect were apprehended. Beachgoers can be a prime target for criminals, explains the officers, because of their vacation mindset. “[Thieves] will go out to beach parking lots when they know that people are on the sand enjoying the water, while their credit cards are in the car. We’re putting the cameras in areas where we know these car burglaries on the beach are happening,” said John. Given the success of the technology, Sarasota has expanded the LPR program. Led by leaders like Investigators John and Mike, LPR has proved an effective tool to solve and lower crime in seaside Sarasota. “We would love to have 100 of them,” concluded John. Flock Safety Results “Every day the Detectives are coming to us and asking to put searches on Flock to try to further their investigations.” -Investigator Mike Harrell Sarasota Police Department Page 793 Tega Cay, South Carolina, has a unique geographic setup. The Charlotte suburb (though technically across the Carolina border, it is only 20 miles from Charlotte) is situated on a peninsula along a lake. Appropriately, Tega Cay is Polynesian for “Beautiful Peninsula.” Because of that unique geography, Tega Cay Police Chief Steve Parker realized that, if law enforcement could focus on the limited access points to the community, they had a real chance of making a meaningful dent in crime. Tega Cay, SC Police strategically deployed Flock Safety cameras at all entrances of this peninsula town How One Police Agency Built A Virtual Security Perimeter Around Their City Tega Cay, the “Beautiful Peninsula” While Tega Cay itself has very low crime rates, it does see spillover from Charlotte just up the road. Suspects wanted by Charlotte-Mecklenburg Police will drive through the small town, and it gets its fair share of stolen cars, robberies, and property crime. Creating An LPR Camera Perimeter “There are only six ways to get inside the city,” said Chief Parker. “We placed the Flock Safety cameras at those entrances, and immediately saw fruit. We saw stolen cars, we identified an individual wanted for strangulation, an escaped criminal that had come into our community — we would not have known about those things.” Using only a few well-placed LPR cameras, Tega Cay PD has arrested suspects wanted for larceny, strangulation, drug possession and distribution, burglary, and possession of stolen firearms. Page 794 Chief Parker has placed a high value on working closely with his City Council and the local community around police technology policies. By remaining transparent, Tega Cay PD builds trust and integrity for their chosen methods of policing. “We showed the City Council these results after three months — how many suspects we’ve arrested, how many hits we’ve had, and they saw the value. They’re ready for more cameras.” At $2,500 per year per camera, Chief Parker believes that Flock Safety cameras are the best use of his agency’s limited discretionary budget and the most effective technology for the price. “What are you going to gain in using the tax dollars of citizens, and are they going to be able to get something for their money?” “We were able to evaluate that Flock Safety is a no brainer for us to reduce crime.” www.flocksafety.com 866-901-1781 Getting Community and City Council Buy-In “One of the things I saw immediately with Flock Safety is the customer service. It’s like going to a 5-star restaurant — your glass is never going to go below half empty.” — Chief Steve Parker Tega Cay Police Department Within the first three months of installing Flock Safety cameras, Tega Cay PD arrested 8 felony suspects Page 795 Like any other large agency with a varied constituent base, Shelby County sees a wide range of crime: everything from murder investigations to hit-and-runs, carjackings, auto burglaries, and of course, property crime. Lieutenant David Ballard, who helps oversee Shelby County’s technology strategy, examined trends, such as that on average, 70% of crimes are committed with a vehicle, to build an efficent, cost-conscious tech deployment plan. One of the largest and most diverse counties in Tennessee deploys Flock Safety to successfully lower crime rates Shelby County Sheriff’s Smart Tech Strategy to Decrease Crime During A Pandemic Policing Challenges Shelby County flanks the Mississippi River in the west-most part of Tennessee. Memphis, the home of blues and birthplace of rock-and-roll, is its largest city. The highly-diverse Shelby County ranks amongst the top ten counties in the state for median household income. The Memphis metro area also has its challenges, incuding the highest rate of violent crime in the state. The Shelby County Sheriff’s Office employs over 2,000 sworn officers and administrators to fight crime. Welcome to the Home of Blues “You can’t predict everything, but can we look at trends? Certainly. Can we see where we can apply resources to combat those trends? Absolutely,” said Lt. Ballard. In 2018, Shelby County conducted a pilot with 45 Flock Falcon camera. 2018: Flock Pilot 45 2020: Agency- Owned 105 2021: Camera Network 600 Shelby County Cameras Page 796 “Those cameras don’t sleep, they don’t need a break, they work 24 hours a day,” said Lt. Ballard. He now champions Flock Safety in Shelby County. “If we don’t have LPR technology, if we don’t have cameras out in the field, then my budget is going to be sorely affected, because to combat these [crime] numbers, I’m going to have to put more cars on the street, more boots on the ground,” explained Lt. Ballard. In 2019, Shelby County expanded the pilot to a long-term relationship. They also worked with the community to sign data-sharing agreements with HOAs and neighborhoods that have Flock cameras. The Sheriff’s Office now has access to footage from 600 cameras across Shelby County. Group A crimes went down 10% across the county in 2019, according to Lt. Ballard. Despite the COVID-19 pandemic, which spurred a rise in crime rates across the U.S., 2020 saw another 5% drop in Shelby County. www.flocksafety.com 866-901-1781 “What did we prevent? What didn’t happen the next week, month, year, now that this defender is out of their element? You can’t put a price tag on that.” -Lt. David Ballard Crime Drops in Shelby County The Shelby County Sheriff’s Office receives 50-60 Hot List alerts each day from the Flock Safety camera network. Page 797 Commissioner Wright had been serving in city government for about two years when a friend in a neighboring community gave him a demo of the Flock Safety camera system. He was “just blown away.” With Commissioner Wright’s backing, in 2019, the City of Lakeland purchased and installed 20 Flock Safety license plate readers around the community. “We put it at major thoroughfares leading in and out of the municipality, not at any interior roads into a neighborhood,” Commissioner Wright said. The city crafted a careful process to protect residents' privacy. Access to footage is limited to authorized users and they work closely with law enforcement. Commissioner Wright examined several options, but Flock Safety's features made it the best option for Lakeland. Why City Councils Choose Flock Safety Lakeland, TN City Commissioner on how Flock Safety’s affordability, service, and network made it the best choice for his community Lakeland is considered very safe, ranking as one of the Best Places to Raise a Family in Tennessee. But every community experiences crime, and Lakeland is no exception. Located just outside of Memphis, the Lakeland suburb features rolling greenery and clear blue lakes. The natural surroundings are important to residents. In addition to serving on City government, Wesley is a small business owner, a trained educator and pastor, and a father of two. Wesley Wright has served as City Commissioner for 4 years. A Memphis native, he became involved in community safety issues 15 years ago when his own home was the subject of robbery. Lakeland, TN Why Flock Safety Works For Lakeland Commissioner Wesley Wright “It’s a passion of mine to help lead our city in the right direction, and Flock is a part of that.” -Commissioner Wesley Wright Page 798 www.flocksafety.com 866-901-1781 Flock Safety was already present in several neighborhing towns and HOAs around Lakeland. “It’s paramount that municipalities work together,” said Commissioner Wright. “If you don’t choose Flock, I think you would kind of be putting yourself on an island.” City government appreciated the hands- off nature of Flock Safety. The partnership comes with installation, upgrades, and maintenance, which "makes it a lot easier for a municipality." Network Reach Service Aesthetics Commissioner Wright calls Flock Safety cameras a “subtle presence.” The camera’s size and design enables it to blend in with the surroundings in Lakeland, so it is “not an eyesore — it gives you safety but doesn’t take away from the beauty around you.” Cost Flock Safety’s flat, affordable pricing made allocating budget much easier for city government officials. Page 799 Jay Taylor has served on the Jersey Village police force since 2011. Part of the Criminal Investigation Division (CID), Detective Taylor is tasked with solving cases ranging from aggravated robberies and thefts to a variety of property crimes. “Those first few hours after a crime is committed are the most important,” said Detective Taylor. “The sooner we can see what was going on, the better chance we have of solving that crime.” Jersey Village, TX is a town of about 8,000 outside of` Houston. While violent crime is low, the police department contends with property crime and theft. Jersey Villlage has 54 Flock Safety Falcon cameras around the town. Background This Detective Needed Better Leads 82%+ of property crime goes unsolved, according to the FBI’s Uniform Crime Report. These crimes often occur at night, without the presence of eyewitnesses. Even when there are witnesses, their testimony may be subjective or incomplete. To solve these crimes in an equitable and objective manner, law enforcement turn to Flock license plate readers. When leads are slim, identify evidence with Flock Safety How one time-strapped Detective uses Flock Safety to detect and decode leads Property Crime is Hard to Solve Page 800 When a thief who had been visiting liquor stores from Dallas to Houston came to Jersey Village, Detective Taylor took on the case. He identified the make and color of the suspect's vehicle, and was then able to use footage from a Flock Safety license plate reader located near the local liquor store to pinpoint the vehicle, get the plate, and catch the perpetrator. In solving this crime, Detective Taylor cleared a case for several other Texas agencies. In total, this thief had stolen $9,000 worth of merchandise across the state. Solving Crime State-Wide When Detective Taylor is put on a case, he works all angles: identifying eyewitnesses and obtaining any video footage from the time and place the crime occurs. He uses surveillance cameras, doorbell camera footage, and anything else available to him to ascertain clues. One of his most effective tools, Detective Taylor said, is the network of 54 Flock Safety Falcon cameras situated throughout Jersey City. When an eyewitness or traditional video camera provides him with a vehicle make, model, color, or even a partial license plate, he is able to use Flock Safety to complete the picture. “Flock Safety is going to change the way you do investigations.” “When we have a lead here, Flock Safety lets us expand our ability to solve crime and collaborate with other agencies.” — Jersey Village Police Chief Kirk Riggs Page 801 San Marino is a small jurisdiction within the Los Angeles metro area. Police Chief John Incontro shared that their biggest issue, by far, is property crime, specifically theft and burglary. In 2020, San Marino PD installed 22 Flock Safety cameras around the city. One year later, Chief Incontro was sharing success statistics with the San Marino Public Safety Commission: residential burglaries had declined nearly 80% and Part 1 crimes were down 19%. "Our car stops have increased and we have connected that to the cameras to reduce crime,” said Chief Incontro. In San Marino, most of the crime is committed by suspects who travel from outside the city limits. By using the Flock Hot List alert system, police know immediately when a wanted suspect enters the area and can deploy patrol cars right away to head off the crime. In one case, officers received two alerts — weeks apart — on a wanted vehicle. The first time, officers called off the pursuit due to poor weather, but when the car passed by again weeks later, officers did detain the suspect. They found stolen mail, illegal drugs, and stolen identification. The Flock Safety system was also able to help San Marino detectives identify and arrest an arsonist who had set a local family's home on fire. How One Agency Used LPR to Reduce Residential Burglaries By 80 Percent San Marino, CA Police Used An LPR Virtual Gate to Drastically Reduce Property Crime When communities install Flock Safety License Plate Recognition cameras, police typically report some recurring patterns that you might expect. Police pursuits increase, more stolen vehicles are recovered, and arrests of wanted suspects climb. However, when agencies report crime statistics in the months and years following a Flock Safety deployment, they also often report a less obvious, but even more exciting trend: overall crime reduction. It's About More Than Solving Crime Flock Safety Cameras Work for San Marino Page 802 “The Flock cameras have resulted in an increase in traffic stops and in stolen vehicle recoveries — someone who has stolen a vehicle might also have something in their car — drugs, a firearm. They might be going to commit another crime with that vehicle,” explained Chief Incontro. “The individuals we are alerted about on the Hotlist often have multiple prior arrests. So we’re seeing a demonstrable decrease in crimes with this increased policing activity.” Flock Safety believes that every community has a right to safety. San Marino police and citizens agree. Chief Incontro reports, “the majority of residents are asking for more.” Fewer Wanted Suspects Translates to Less Crime As the number of cleared cases increases, crime correspondingly decreases. A substantial body of research shows that the most effective deterrent to crime is the likelihood of being caught. And an analysis of violent crime investigations showed that when detectives spend more time working a case, it is more likely to be solved. In an agency of only 29 sworn officers, Flock Safety has acted as a force multiplier, allowing police to quickly obtain accurate, objective evidence without having to send officers to every corner of the city, 24 hours a day. “The cameras are really helping us catch folks that are involved in crimes and who are probably going to commit crimes in the city. By us stopping with them, interacting with them, arresting them or letting them go, I think we reduce the possibility of a crime being committed." — Police Chief John Incontro 70% IN ONE YEAR 19%36% Decrease in Residential Burglaries Decrease in Part 1 Crimes Requested Increase in # of Cameras Page 803 Sole Source Letter for Flock Safety ALPR Cameras and Solution Flock Safety is the sole manufacturer and developer of the Flock Safety ALPR Camera. Flock Safety is also the sole provider of the comprehensive monitoring, processing, and machine vision services which integrate with the Flock Safety ALPR Camera. The Flock Safety ALPR camera and devices are the only Law Enforcement Grade ALPR System to offer the following combination of proprietary features: 1. Patented Vehicle Fingerprint Technology: ○ Patented proprietary machine vision to analyze vehicle license plate, state recognition, vehicle color, vehicle type, vehicle make and objects (roof rack, bumper stickers, etc.) based on image analytics (not car registration data) ○ Machine vision to capture and identify characteristics of vehicles with a paper license plate and vehicles with the absence of a license plate ○ Ability to ‘Save Search’ based on description of vehicles using our patented Vehicle Fingerprint Technology without the need for a license plate, and set up alerts based on vehicle description ○ Only LPR provider with “Visual Search” which can transform digital images from any source into an investigative lead by finding matching vehicles based on the vehicle attributes in the uploaded photo 2. Integrated Cloud-Software & Hardware Platform: ○ Ability to capture two (2+) lanes of traffic simultaneously with a single camera from a vertical mass ○ Best in class ability to capture and process up to 30,000 vehicles per day with a single camera powered exclusively by solar power ○ Wireless deployment of solar powered license plate reading cameras with integrated cellular communication weighing less than 5lbs and able to be powered solely by a solar panel of 60W or less ○ Web based footage retrieval tool with filtering capabilities such as vehicle color, vehicle type, vehicle manufacturer, partial or full license plate, state of license plate, and object detection ○ Utilizes motion capture to start and stop recording without the need for a reflective plate ○ Motion detection allows for unique cases such as bicycle capture, ATV, motorcycle, etc. ○ On device machine processing to limit LTE bandwidth consumption ○ Cloud storage of footage 1170 Howell Mill Rd. NW · Suite 210, Atlanta, GA 30318 Page 804 ○ Covert industrial design for minimizing visual pollution 3. Transparency & Ethical Product Design: ○ One-of-a-kind “Transparency Portal” public-facing dashboard that details the policies in place by the purchaser, as well as automatically updated metrics from the Flock system ○ Built-in integration with NCMEC to receive AMBER Alerts to find missing children ○ Privacy controls to enable certain vehicles to “opt-out” of being captured 4. Integrated Audio & Gunshot Detection: ○ Natively integrated audio detection capabilities utilizing machine learning to recognize audio signatures typical of crimes in progress (e.g., gunshots) 5. Partnerships: ○ Flock Safety is the only LPR provider to officially partner with AXON to be natively and directly integrated into Evidence.com ○ Flock Safety is the only LPR provider to be fully integrated into a dynamic network of Axon’s Fleet 3 mobile ALPR cameras for patrol cars and Flock Safety’s Falcon cameras ○ Access to additional cameras purchased by our HOA and private business partners, means an ever-increasing amount of cameras and data at no additional cost 6. Warranty & Service: ○ Lifetime maintenance and support included in subscription price ○ Flock Safety is the only fully integrated ALPR one-stop solution from production of the camera to delivery and installation ○ Performance monitoring software to predict potential failures, obstructions, tilts, and other critical or minor issues Thank you, Garrett Langley CEO, Flock Safety 1170 Howell Mill Rd. NW · Suite 210, Atlanta, GA 30318 Page 805 PAGE 1BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS A COMPREHENSIVE GUIDE TO BUILDING A SUCCESSFUL LPR PROGRAM SELECTING THE RIGHT LICENSE PLATE RECOGNITION SOLUTION FOR YOUR AGENCY BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS Page 806 WHY ADOPT LICENSE PLATE RECOGNITION? AVAILABLE LPR DEPLOYMENT OPTIONS License plate recognition (LPR) systems were first invented in the 1970’s, with the earliest arrest using the technology recorded about a decade later. Over the years, LPR systems have been greatly refined, becoming much more powerful and useful. Today, they’re regarded as indispensable law enforcement tools, assisting agencies with real-time threat detection and mitigation while helping close all manner of criminal investigations faster. LPR systems take photos of vehicles, then use Optical Character Recognition (OCR) algorithms to capture and parse license plate data, plus date, time, GPS coordinates, and other information. LPR systems can also integrate with other technologies to significantly expand their core functionality. For instance, LPR detections can trigger a real-time alert to improve situational awareness, be searched and analyzed for investigative insight, and leveraged to automate processes such as traffic enforcement or access control. This type of automation makes integrated LPR systems a highly valuable tool to increase officer efficiency and productivity, so they can spend less time on rote activities and more time in the community, keeping residents safe. We hope this guide will prove useful, serving as a starting point for your own research and the first step to establishing a successful license plate recognition program. That’s why we created this guide. We’ve provided overviews for each type of camera system, along with usage scenarios for each and other considerations for choosing a system that meets your needs. We’ve also provided some pointers on what to look for beyond the camera, such as back-end software, that can play an important role in a well-performing LPR program. Yet, not all LPR systems – or LPR system vendors – are the same. With so many LPR systems offering so many different options, including promises of “all-in-one” systems that can do it all, it can be difficult to know where to start. Partnering with an experienced vendor can help. In addition to deep product expertise, vendors with strong law enforcement experience are critical to ensure regulatory compliance and program success, especially given the ever-changing laws and regulations governing LPR. PAGE 2BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS Find more wanted vehicles of interest Close more open cases, faster Improve officer efficiency and productivity QUICK-DEPLOY TRAILERFIXEDVIDEO-BASED IN-CAR INTEGRATEDMOBILE APP-BASED TABLE OF CONTENTS 4 11 15 LPR CAMERAS: SYSTEM TYPES, DEPLOYMENT SCENARIOS, AND PURCHASING CONSIDERATIONS LICENSE PLATE RECOGNITION SOFTWARE: SEARCH, ANALYSIS, ALERTING, DATA MANAGEMENT, SECURITY AND SUPPORT PROCUREMENT OPTIONS 4 FIXED 5 QUICK DEPLOY 6 VIDEO-BASED 7 TRAILER 8 MOBILE 9 IN-CAR INTEGRATED 10 APP-BASED 12 SEARCHING AND ANALYTICS 13 HOT LISTS AND ALERTING 14 DATA MANAGEMENT 14 PRIVACY AND SECURITY 15 POLICY, TRAINING, AND SUPPORT BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS PAGE 3Page 807 PAGE 4 PAGE 5BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMSBUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS LPR CAMERAS: SYSTEM TYPES, DEPLOYMENT SCENARIOS, AND PURCHASING CONSIDERATIONS FIXED QUICK-DEPLOY DEPLOYMENT OVERVIEW Fixed license plate recognition is one of the most adopted types of deployments today. These cameras are permanently installed, typically on poles or other roadway infrastructure and meant to provide the most data capture per dollar spent. These cameras are perfect for when you need high-performance, continuous scanning in all weather conditions, day or night, and on vehicles moving at high and low speeds. DEPLOYMENT OVERVIEW Quick-deploy license plate recognition is one of the newest LPR technologies on the market. It emerged due to technology improvements that allow for smaller form factors while still getting useful performance. Capable of being moved with ease due to flexible power and data connectivity, these cameras can be installed permanently or for a specific time period. They may stand on their own or can be mounted to common infrastructure, making them ideal for low-volume, low-speed vehicle scanning in more controlled environments. DEPLOYMENT SCENARIOS Major Thoroughfares: High-performance fixed license plate recognition is necessary for highways, interstates or other major thoroughfares due to their high traffic volume. These roads require a high rate of capture, as well as high quality bright and low-light performance for usage at all times of day. With vehicles moving at high speeds, a global shutter sensor is also critical to ensure accurate data capture. Jurisdiction Entry Points: While not all roads into your jurisdiction have significant traffic, vehicles moving at high speeds, or round-the- clock usage, ensuring you have reliable plate capture capability from high-performance fixed license plate recognition can be critical for proactively responding to threats. After all, identifying bad actors early, at points of entry, is the easiest way to mitigate incidents. DEPLOYMENT SCENARIOS Narcotics Interdiction: Quick-deploy cameras can be instrumental in shortening drug interdiction timelines by helping gather more data and evidence. As you uncover distribution details and primary players, you can easily expand investigations utilizing analytics, expose operational patterns, and make arrests. Neighborhood Complaints: These easy-to-deploy cameras are perfect for improving responsiveness to community concerns. Quickly, and oftentimes covertly, you can activate quick-deploy cameras in areas experiencing an uptick in calls for suspicious vehicles, parties, and more. Pattern Crime Locations: Make an immediate impact on pattern crime, such as residential burglaries and car break-ins. Upon determining a recurring crime series and MO, quick-deploy cameras can be placed at probable future targets in order to narrow down a vehicle of interest and catch criminals. Public-Private Partnerships: With many businesses seeing the value of police partnerships, affordable quick-deploy LPR can be ideal. These camera systems can be owned and operated by the business while seamlessly sharing data with your agency. Capture rate Capture rate determines how many plates the system will successfully detect. Verify that the camera can scan a high volume of cars in a short timespan and that it can scan continuously. 3 Frame rate should be 60 FPS or greater 3 The camera should scan continuously 3 There should be no daily capture limits Time-to-benefit Time-to-benefit is a measure of how long it takes to install and activate the camera. A major determining factor is whether it requires specialized tools or significant technical expertise. 3 Carry case included for easy transport 3 Hand-holdable size - no bigger than 6 inches 3 Quick-connecting Android or iOS setup app Read accuracy Read accuracy measures how often recognition is correct. Make sure to determine how well a system can read plates in dark environments as well as plates on vehicles moving at high speeds. 3 Simultaneous color and IR image capture 3 Zero degradation at 150 MPH or greater 3 Camera should employ a global shutter Mounting Having good mounting options allows you to place the camera in convenient locations. Consider if the mount is easily maneuverable and if there are ways to make it blend into the surroundings. 3 Pole-mount or equivalent universal straps 3 Camera maneuvering via easy-lock ball joint 3 Paintable shroud for added security Lens design Having a variety of focal lengths to choose from enables you to more easily deploy cameras where you need. Additionally, a wide field of view helps ensure you can scan errant vehicles. 3 Lenses should at least span 6mm - 25mm 3 20-foot field of view for multi-lane capture Power options Having various power options are also critical to meeting deployment needs with a quick-deploy camera as it ensures you can move camera locations without worrying about your power source. 3 Solar power with at least 40-watt panel 3 AC or DC direct power connection 3 Battery capable of 20,000 scans Ruggedness Ruggedness metrics determine how capable a system is of withstanding the test of time so it doesn’t have to be replaced, as well as indicates how well it can perform in inclement weather. 3 Camera system should be IP68 or higher 3 Should be rated ISO 16750-3 or better 3 Operate at temperatures of -40ºF to 140ºF Connectivity Having a variety of network options for your quick-deploy camera also ensures it can be installed where it’s needed. Even look for a camera that can connect to an existing wireless subscription. 3 Major cellular carrier purchase option 3 Bring-your-own-SIM cellular flexibility 3 Camera health and status monitoring L5F Fixed LPR Camera System L6Q Quick-Deploy LPR Camera System KEY CONSIDERATIONS AND RECOMMENDATIONS KEY CONSIDERATIONS AND RECOMMENDATIONS Page 808 VIDEO-BASED TRAILER DEPLOYMENT OVERVIEW Video-based license plate recognition is one of the easiest ways to quickly benefit from LPR while increasing return on investment for an existing system. That’s because video-based LPR uses existing camera feeds and runs the LPR algorithm over the top of the video to detect and recognize plates. Video-based LPR is limited by the cameras used with it. Most video cameras aren’t optimized for LPR so results won’t be as effective in poor lighting and high-speed, high-volume traffic scenarios. DEPLOYMENT OVERVIEW License plate recognition trailers are a flexible, highly visible option for not only collecting license plate data, but also informing drivers of relevant information. Similar to quick-deploy cameras, trailers provide flexibility in where they are placed and can be easily towed, placed and left alone, Yet, unlike the small discrete nature of quick-deploy cameras, trailers can provide added safety with boards or signage for critical information like a temporary speed limit or hazard alerts. DEPLOYMENT SCENARIOS Facilities Security: Video-based license plate recognition is an excellent option for areas that you’re already actively monitoring with video surveillance. This may include police stations, a dispatch center or other city-owned buildings for which your agency is responsible for securing and protecting. School Security: With an emphasis on protecting students and teachers at an all-time high, relationships are strengthening between schools and law enforcement. Video-based LPR can be an easy way to build upon an existing video security system, detecting and responding to banned vehicles on premises. Public-Private Partnerships: With many businesses having their own video systems in place, as well as a growing desire for partnership with police, video-based LPR can be ideal. This requires a solution that can seamlessly share data from businesses with your agency. DEPLOYMENT SCENARIOS Special Events: LPR trailers are great for special events due to the amount of data available for capture and the value they provide in helping direct traffic or provide important updates to drivers. Additionally, with events a prime target for threat actors, this additional layer of security can be critical. Seasonal Traffic: The mobility of trailers makes them perfect for seasonal deployment. Place them in school zones during the year to capture data and reinforce speed limits. Move them to a local park or swimming pool in the summer when traffic picks up with kids on break and protection is needed. KEY CONSIDERATIONS AND RECOMMENDATIONS KEY CONSIDERATIONS AND RECOMMENDATIONS Camera requirements The first determining factor for video-based LPR is verifying if it requires expensive, top-of-the-line cameras, or if it can work with most modern cameras with at least modest specs. 3 Resolution requirement no more that 720p 3 Frame rate requirement no more than 15 FPS Read accuracy Read accuracy measures how often recognition is correct. Make sure to determine how well a system can read plates in dark environments as well as plates on vehicles moving at high speeds. 3 Simultaneous color and IR image capture 3 Zero degradation at 150 MPH or greater 3 Camera should employ a global shutter Ruggedness Ruggedness metrics determine how capable a system is of withstanding the test of time so it doesn’t have to be replaced, as well as indicates how well it can perform in inclement weather. 3 Camera system should be IP68 or higher 3 Should be rated ISO 16750-3 or better 3 Operate at temperatures of -40ºF to 140ºF Deployment options To fit within your existing technical environment you’ll then want to determine how a video-based LPR solution can be deployed to ensure you’re staying most cost-effective. 3 Centralized or distributed architectures 3 Optional VMS deployment requirement 3 Zero limits on number of cameras 3 RTSP or ONVIF-compliant output Power options Having various power options are also critical to meeting deployment needs with a quick-deploy camera as it ensures you can move camera locations without worrying about your power source. 3 Solar power with at least 80 watt panel 3 AC or DC direct power connection 3 Battery power with 100 watt hours or more Signage Having signage options to present messages to drivers might not be first priority, but if this option is of interest, it’s important to consider if it can be easily reconfigured or if it is static. 3 Configurable digital signage 3 Optional vehicle speed display PAGE 7BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMSPAGE 6BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS L5M Trailer LPR Camera System LinC Video-Based LPR Integration Page 809 PAGE 9 MOBILE IN-CAR INTEGRATED DEPLOYMENT OVERVIEW Mobile license plate recognition is also a highly adopted type of LPR today. Anywhere between one and four cameras are mounted to a vehicle and scan continuously around the vehicle as long as it is on. Drivers can receive real-time alerts from within the car, typically through a software interface on a mobile computer or tablet device. These cameras are ideal for helping to keep officers safe and aware of threats as well as guiding patrol efforts based on hot plate hits. DEPLOYMENT OVERVIEW In-car video systems integrated with license plate recognition are a growing phenomenon designed to help give agencies more value from their investments. In-car integrated LPR is perfect for officer safety by enabling very capable detection and recognition of license plates on vehicles in close proximity and in the front of the patrol vehicle. It is important to note that integrated LPR does have some shortcomings due to the camera being located inside the car and not being dedicated or designed for license plate recognition. These challenges include difficulties in low-light and with vehicles moving at high speeds, which impact detection and recognition accuracy as well as capture rate limitations. DEPLOYMENT SCENARIOS Traffic Stops: Mobile license plate recognition can be the first line of defense for officers during a traffic stop. With high-performance detection and immediate recognition, officers can be alerted to any outstanding wants or warrants associated with a vehicle they have pulled over and approach appropriately. Guided Patrol: Turn passive patrolling into active law enforcement with mobile license plate recognition. High-volume scanning and accurate detection of hot listed vehicles can provide officers with automated direction on BOLOs and vehicles with warrants in order to bring more criminals to justice, more efficiently. Investigations: While on scene of a crime, canvassing nearby vehicles is critical to find potential witnesses who can help solve a case. Mobile license plate recognition can aid in recording plate information while eliminating manual, time-consuming processes by simply driving by vehicles of interest. DEPLOYMENT SCENARIOS Traffic Stops: In-car integrated license plate recognition can be the first line of defense for officers during a traffic stop. With highly capable detection and recognition, officers can be alerted to any outstanding wants or warrants associated with a vehicle they have pulled over and approach appropriately. Standard Patrol: For officers who typically operate in a relatively residential beat where roads are only two to three lanes wide, the M500 can be an ideal supplement to their enforcement efforts. With lighter, slow-moving traffic and well lit streets officers can stay alert to vehicles of interest and respond accordingly. Capture rate Capture rate determines how many plates the system will successfully detect. Verify that the camera can scan a high volume of cars in a short timespan and that it can scan continuously. 3 Frame rate should be 60 FPS or greater 3 The camera should scan continuously 3 There should be no daily capture limits Read accuracy Read accuracy measures how often recognition is correct. Make sure to determine how well a system can read plates in dark environments as well as plates on vehicles moving at high speeds. 3 Simultaneous color and IR image capture 3 Zero degradation at 150 MPH or greater 3 Camera should employ a global shutter Lens design Having a variety of focal lengths to choose from enables you to more easily deploy cameras how you need them. Additionally, a wide field of view helps ensure you can scan errant vehicles. 3 Lenses should at least span 6mm - 25mm 3 20-foot field of view for multi-lane capture Ruggedness Ruggedness metrics determine how capable a system is of withstanding the test of time so it doesn’t have to be replaced, as well as indicates how well it can perform in inclement weather. 3 Camera system should be IP68 or higher 3 Should be rated ISO 16750-3 or better 3 Operate at temperatures of -40ºF to 140ºF In-Car software The right in-car software is critical. Verify it is easy to use and adopt for drivers, that it can run distraction- free in the background and is consistent with other software officers are using. 3 Audio and visual alert configurability 3 Search and investigation tools 3 Light and dark modes interface options 3 Option to run in the background Capture rate Capture rate determines how many plates the system will successfully detect. Verify that the camera provides a field of view for multi-lane coverage and that it can scan continuously. Driver safety The license plate recognition capability on an in-car system should not require officers to take any actions to enable scanning, nor should the camera itself be a safety hazard. In-Car software The right in-car software is critical. Verify it is easy to use and adopt for drivers, that it can run distraction-free in the background and is consistent with other software officers are using. 3 There should be a panoramic field of view 3 The camera should scan continuously 3 There should be no daily capture limits 3 Should not require repositioning for LPR 3 Critical sightlines should be unobstructed 3 Blind spots should not be created 3 Audio and visual alert configurability 3 Search and investigation tools 3 Light and dark mode interface options 3 Option to run in the background PAGE 9PAGE 8BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS L5M Mobile LPR Camera System M500 LPR-Enabled In-Car Video System KEY CONSIDERATIONS AND RECOMMENDATIONS KEY CONSIDERATIONS AND RECOMMENDATIONS BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMSPage 810 PAGE 10BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS APP-BASED LICENSE PLATE RECOGNITION SOFTWARE SEARCH, ANALYSIS, ALERTING, DATA MANAGEMENT, SECURITY AND SUPPORT DEPLOYMENT OVERVIEW App-based license plate recognition provides added convenience for license plate and vehicle data capture when a deployed camera doesn’t have a clear line of sight to a plate. App-based LPR can also provide other benefits besides data capture such as hot hit alerts to keep officers informed even if they are away from their vehicle. As a fall back, app-based options with video-based plate capture can function as a light, mobile license plate recognition alternative. DEPLOYMENT SCENARIOS Behind The Tape: Log a large amount of vehicles and locations prior to releasing vehicles from controlled crime scenes. App-based license plate recognition can aid in recording plate information and eliminate a hand- written, error-prone process by simply walking or driving by and taking a picture or video. Foot Patrol: For officers who patrol by foot and don’t rely on a vehicle, app-based LPR is an essential tool for license plate and vehicle data capture. Using their mobile device, they can easily take a picture of a suspicious vehicle or use the functionality during a field interview to document details of the interaction. Operating system The ability to run an application on devices officers already rely upon is critical for accessibility. It provides a familiar user experience, simplified management and overall efficiency of use. 3 Available on Android or iOS 3 Download from Google Play or Apple App Store Plate capture Having a variety of data collection options such as scanning plates through streaming video as well as single image capture or upload, ensures officers are most efficient and effective. 3 Capture single license plate image 3 Multi-plate capture via video capture 3 Upload images from phone gallery Hit alerting Beyond capturing data, it is important to determine if and how your LPR app can ensure officers are informed of vehicles of interest so they can take appropriate action and stay safe. 3 Push notification alerting Data security Ensuring data is stored securely avoids questions of validity. Determine how data is stored, if it is accessible through other apps on the device and how users are authorized. 3 Data erased from device after closing app 3 Segmented, isolated data storage 3 User login with optional PIN method Vigilant Mobile Companion Application PAGE 11BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS KEY CONSIDERATIONS AND RECOMMENDATIONS Page 811 PAGE 12BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS In addition to providing sophisticated search options, look for a system that does more with your data to uncover additional leads. Some of the most impactful, advanced analytic features that provide the most value to agencies include associate analysis, convoy analysis and locate analysis. Associate and convoy analysis enable you to identify vehicles connected to your identified vehicle of interest. This can help you get a better understanding of a criminal network perpetrating anything from trafficking and smuggling, to burglaries and thefts. Locate analysis functionality provides added insight on a vehicle of interest to help you actually make contact by determining the most probable locations, time-of-day and day-of-week to find a vehicle. This is ideal for quickly finding a vehicle of interest involved in a violent crime, a missing person, or an abduction. Once you have hot lists created, shared and subscribed to, the next determination is how alerts are received. Different people prefer different methods of communication and your license plate recognition alerting options should reflect that. Most solutions should be able to facilitate email and text message-based alerts that individual users or groups can be provisioned to receive based on the hot lists they can access. But that’s just the baseline. Additional notification channels to consider include mobile application-based alerts that can facilitate push notifications on any Android or iOS device as well as a dedicated alerting client that can run at a dispatcher’s workstation or anywhere else that hot hit notifications are valuable. Lastly, the ability to directly integrate alerts into other systems, such as call handling, computer-aided dispatch systems, or a real-time crime center solution can be highly beneficial. It helps make license plate recognition a more integrated part of your workflow and minimizes the learning curve for those users. Another often-used license plate recognition capability is creating hot lists and configuring alerts for sightings of vehicles of interest. When evaluating a solution there are a number of key considerations to keep in mind. First, hot lists and white list creation and access should be permission- based. It makes everyone’s job more convenient to not only have agency- wide lists but also enable users to create their own lists for specific cases they might be working on. Additionally, outside of your agency, it is valuable to be able to have access to other agency, state and national lists to facilitate better collaboration between agency partners, nearby or across the nation. Look for an easy hot list sharing and subscription option in any LPR system you are evaluating. KEY FUNCTIONALITY TO CONSIDER KEY FUNCTIONALITY TO CONSIDER • Full, Partial & Wildcard Plate Search • Single and Multi-Location-Based Search • Year, Make, Model & Color Search Filtering • Associate & Convoy Vehicle Analysis • Vehicle Locate Analysis & Prediction • User, Group or Agency Hot List Creation • Simple Hot List Sharing & Subscription • Email & Text Message-Based Alerting • Mobile Application/Push Notifications • Easy-To-Use Dedicated Alerting Client • System-Integrated Alerting Capabilities HOT LISTS AND ALERTING PAGE 13BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS SEARCHING AND ANALYTICS When it comes to license plate recognition data, the most basic investigative use is to search for where a vehicle of interest has been previously seen. This is easy when you have a full license plate to go off of, but that’s the bare minimum requirements for any LPR solution. What really makes an LPR system valuable is its ability to also accommodate partial and wildcard searches for those instances where maybe a witness only caught a couple characters. But what happens when you have no characters at all? Maybe a victim only knows that a vehicle was present, or better yet, caught the make and model of a perpetrator’s car? This is where a location- based search capability becomes helpful. It allows you to set a time frame and proximity to a location, as well as vehicle year, make, model and color parameters, to generate a list of potential vehicles worth investigating. To go a step further, a great location-based search capability will allow you to look for vehicles who have appearances across multiple locations, perfect for identifying vehicles of interest in a crime series. Target Alert Service (TAS) Mobile Companion Page 812 PAGE 14BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS DATA MANAGEMENT POLICY, TRAINING, AND SUPPORT PRIVACY AND SECURITY Contrary to many movies and TV shows, investigations aren’t always cleanly completed in a matter of days. It may take weeks or months to build your case, gather evidence, follow up on leads, identify suspects and make arrests, not to mention prosecute. This is why having full control of your data retention and ownership is critical. A system that permits you to set your own data retention policy, rather than an arbitrary one set by a vendor, allows you to preserve data as long as you need to close a case, as well as meet your specific state and local requirements for data retention. Your data should be owned by you, never a vendor, so that should you need to leave and take it with you, you can, no questions asked. Similarly, data sharing is another critical element of a license plate recognition program. As we know, criminals don’t abide by jurisdictional boundaries, especially when they are on the run. Easy, completely agency-controlled data sharing between neighboring agencies and those across the nation can help you generate stronger leads and capture more criminals. Additionally, data sharing from There is much more to a successful license plate recognition program than product features and functionality. Without the proper policy creation, user training, vendor support and access to new innovation there is no way to sustain an effective program. Your vendor can and should be a resource for each of these. A key indicator to determine if a vendor can truly help you be successful is having people on staff who have been in your shoes using the product and can provide training to build proper policies and processes. Additionally, it is worth confirming if these services from your vendor are free or require additional investment. Another important consideration is technology development and ownership. In order to provide effective support, as well as continuously push enhancements and innovations to your LPR camera systems and software, your vendor needs to design and build the technologies they sell you. Ask whether or not their software, algorithms, and cameras are homegrown or supplied by a third party. If a third party is employed, support becomes fragmented and meaningful innovation becomes stifled because your input as a customer may not get back to the actual developer of your LPR products. the right vendor you should have options to meet your procurement needs. This can range from outright, upfront purchase options, subscription “as-a-service” options as well as financing. Although a newer concept for hardware like cameras, subscription pricing models can provide benefits like predictability of spend, automatic equipment upgrades and additional services like warranty or advanced support built in. For subscription procurements, be aware of required contract length as you evaluate vendors. License plate recognition data privacy and security is not something to be taken lightly. This is why it is critical for your system of choice to be compliant with the Criminal Justice Information Services (CJIS) Security Policy. This standard provides the most comprehensive framework, informed by NIST and the FBI, for ensuring CJI data is protected by dictating parameters for physical security, redundancy, access control, audit functionality, encryption of data at-rest and in-transit, compliance regulation and more. Beyond the security of your LPR system and data, additional controls are important for ensuring responsible, permissible use of your system. This is critical for addressing privacy concerns and building community buy-in around your use of license plate recognition technology. A key mechanism to consider, beyond those already included as a part of being CJIS compliant (auditing, access control), are justification fields for use of certain features that can provide a record of why a user is employing the solution. businesses and community groups who are interested in license plate recognition for their own needs is something to consider and can be a great way to build relationships and partnerships to co-create public safety with your community. For any of these data sharing options, having a clear understanding and expectation set for policy and process is critical. That’s why a bonus feature to consider is how easy it is to create a memorandum of understanding (MOU) between yourself and those with whom you are sharing. KEY FUNCTIONALITY TO CONSIDER KEY SERVICES AND FUNCTIONALITY TO CONSIDER KEY PROCUREMENT OPTIONS TO CONSIDER KEY FUNCTIONALITY TO CONSIDER • Agency-Defined Data Retention Policy • Complete Agency Data Ownership • Preservation Function for Critical Data • Agency-To-Agency Data Sharing • Enterprise-To-Agency Data Sharing • Built-In MOU Templates • Help with Policy & Process Creation • Free User & Administrator Training • Direct 24/7 Technical Support • In-House Developed Technology • Free, Automatic System Updates • Outright, Upfront Purchase • Subscription “as-a-Service” • Required Contract Length • CJIS Security Policy Compliance • Required Justification for Use Fields PROCUREMENT OPTIONS BUYER’S GUIDE LICENSE PLATE RECOGNITION (LPR) SYSTEMS PAGE 15Page 813 Motorola Solutions, Inc. 500 West Monroe Street, Chicago, IL 60661 U.S.A. 800-367-2346 motorolasolutions.com MOTOROLA, MOTO, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. © 2022 Motorola Solutions, Inc. All rights reserved. 01-2022 For more information on our LPR systems, please visit: www.motorolasolutions.com/lpr From fixed cameras to quick-deploy systems, each type of LPR solution comes with its own questions and considerations based on projected use cases and overall program goals. Beware of anyone claiming one “all-purpose” system can cover all LPR use cases. An experienced vendor, with deep law enforcement industry expertise, can help match your specific needs to the right LPR system while helping your agency comply with rapidly evolving LPR regulations. For over 90 years, Motorola Solutions has revolutionized law enforcement technology - creating innovative, mission-critical communications and security solutions that help agencies create safer communities. Our hope is that the knowledge gained from this guide will instill confidence in your ability to acquire the best LPR system for your agency’s unique needs, and with it, help your community thrive. SELECTING TODAY’S LPR SYSTEMS: ONE SIZE DOES NOT FIT ALL Page 814 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S OFFICE MEETING DATE: February 24, 2022 PREPARED BY: Andrew Firestine, Assistant City Manager REQUEST: Approval of a Second Amendment to the Agreement for Law Enforcement Services between the City of Palm Desert and the County of Riverside (Contract No. C38780). _________________________________________________________________________ Recommendation By minute motion, approve a second amendment to the agreement for law enforcement services between the City of Palm Desert and the County of Riverside (Contract No. C38780). Background Analysis On August 27, 2020, the City Council approved the first amendment to its law enforcement services contract, an amendment that modified the level of service in the contract consistent with decisions made during the development and adoption of the City’s FY 20/21 budget, including the reduction of a Business District Team (BDT) deputy sheriff position. The changes resulted in roughly $3.5 million in savings to the FY 20/21 budget and were made in an effort to reduce expenses at the beginning of the pandemic during a time when closures and travel restrictions had an immediate and significant impact on the City’s revenues. The cost reductions were made with a commitment that staff would continue to monitor the impacts of the decision and when they should be revisited. They were also represented as temporary actions that may be reconsidered when economic conditions improve. There is a need for an additional dedicated position to the BDT. The economic recovery in 2021 and 2022 has resulted in an increase in activity within the City’s business core. Visitors have returned to Palm Desert and there is abundant activity at restaurants and retail stores. This is positive in the sense that the City’s revenue outlook is much more positive today than it was in 2020 when the decision was made to scale back certain law enforcement services. It has, however, also resulted in an increased calls for service within the business core that have been managed by a smaller staff, resulting in a lower overall responsiveness to resident and business concerns. Those concerns have been expressed by businesses to the city manager and have prompted a reevaluation of the decision to cut the BDT position. Following discussions with the Riverside County Sheriff’s Department and an evaluation of alternatives, staff recommends restoring the funding for a dedicated deputy sheriff Page 815 February 24, 2022 - Staff Report Second Amendment to the Law Enforcement Services Contract Page 2 of 4 position to the Business District Team for the purposes of responding to calls for service and conducting criminal investigations within the City’s business district. Alternatives Beginning in late 2021, overtime has been authorized and a motor unit has also been reassigned to the BDT to increase the staffing level on a temporary basis. Neither of these are long-term solutions. Sustained overtime may result in fatigue and diminished overall performance while reassigning a unit from another part of the contract leaves that team short. Equally, alternatives such as increased utilization of Community Service Officer (CSO) or homeless outreach services are not effective substitutes for the full range of services provided by the BDT deputies. The BDT is responsible for a significant number of criminal investigations that affect the community and all enforcement programs within the City’s business district. Additionally, they conduct supplemental patrol in the area in response to crime trends and community needs, work that cannot be performed by CSOs. Public Safety Commission The Public Safety Commission considered this request at their meetings on January 13, 2022, and February 9, 2022, and recommended approval of the request. There was substantial discussion, however, about alternatives, particularly with respect to homelessness issues. A presentation given to the Public Safety Commission focused on the number of calls for service within the business core together with figures on the numbers of criminal arrests and criminal filings for 2021 as compared to 2020, both of which showed significant increases, along with a substantial decrease in the number of investigative follow ups. The presentation provided by the Riverside County Sheriff’s Department to the Public Safety Commission on February 9, 2022, reinforced information provided in the January 13, 2022, that the Business District Team is tasked with a range of services in the business community and, while this includes responding to trespass calls and working to reduce the impacts of homelessness on the City, it is a share of their overall responsibility. Homelessness There are clear needs when it comes to homelessness and the Riverside County Sheriff’s Department has a role in that resolution. For clarification, and as further support for the addition of a deputy to the Business District Team, the general breakdown of Page 816 February 24, 2022 - Staff Report Second Amendment to the Law Enforcement Services Contract Page 3 of 4 responsibilities for homelessness between law enforcement, code compliance, and homeless outreach services through Riverside University Health: Law Enforcement Code Compliance Homeless Outreach Services • Enforce State criminal codes and all pertinent City criminal codes and ordinances • Conduct criminal investigations • Make criminal arrests and criminal filings, including warrant arrests • Coordinate with the homeless outreach services team to present available services and alternatives and code compliance for the storage of personal property • Enforce Palm Desert Municipal Code regulations that regulate the use and maintenance of private property, including property maintenance • Coordinate with Sheriff’s Department on the cleanup of encampments and the notification and disposal of abandoned property • Pick up and storage of personal possessions and belongings • Identify and engage homeless individuals • Make connections and referrals to options, including mental health, substance abuse, and/or social services and emergency housing and hospitalization • Provide alternatives to incarceration • Coordinate with Sheriff’s Department and with jail incarceration diversion teams and programs and with County detention staff The newly formed Homelessness Taskforce was created specifically to review and advise on various services, coordinate efforts to address homelessness, and serve as an environment to discuss business and community requests and concerns regarding the impacts of homelessness. The Homelessness Taskforce may review services, including those provided by law enforcement, and it may offer ideas on business and community needs and how to better address the issue of homelessness. The request for additional deputy on the BDT is made with these considerations in mind and is based on the need to provide a greater level of responsiveness to the City’s business core. The expectation is that the Riverside County Sheriff’s Department will Page 817 February 24, 2022 - Staff Report Second Amendment to the Law Enforcement Services Contract Page 4 of 4 continue to coordinate with code compliance and homeless outreach services, both as it is currently contemplated and any future iteration. Staff is committed to providing updates from the Homelessness Taskforce to the Public Safety Commission. Fiscal Analysis The cost of one deputy sheriff to the BDT is approximately $381,000 annually. No additional appropriation for FY 21/22 is needed and the position will be budgeted as part of the FY 22/23 budget. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER n/a Robert W. Hargreaves City Attorney n/a Janet M. Moore Janet M. Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager L. Todd Hileman: L. Todd Hileman ATTACHMENTS: 1. February 9, 2022, Public Safety Commission staff report with attachments 2. Proposed Second Amendment to Contract No. 38780 Page 818 STAFF REPORT CITY OF PALM DESERT PUBLIC SAFETY COMMISSION MEETING DATE: February 9, 2022 PREPARED BY: Andrew Firestine, Assistant City Manager REQUEST: Recommend Approval of a Second Amendment to the Agreement for Law Enforcement Services between the City of Palm Desert and the County of Riverside (Contract No. C38780). _________________________________________________________________________ Recommendation By minute motion, recommend the approval of a second amendment to the agreement for law enforcement services between the City of Palm Desert and the County of Riverside (Contract No. C38780). Background Analysis At the January 11, 2022, meeting of the Public Safety Commission, the Commission requested additional information on the City’s contract with the Riverside County Sheriff’s Department, including the rate structure, and additional information in support of restoring funding for a dedicated deputy sheriff position to the Business District Team (BDT). The original staff report is attached for reference. In response to the Public Safety Commission, several other documents are attached to this staff report: •City Council staff report dated May 26, 2021, with attachments •Presentation prepared by the Riverside County Sheriff’s Department for the February 9, 2022, meeting of the Public Safety Commission With particular respect to the City’s contract with the Riverside County Sheriff’s Department, the City contracts for a specified level of service that’s defined as an attachment to the contract, which includes both patrol hours and various specialized positions. The January 11, 2022, staff report described how the level of service was reduced in 2020 through the first amendment to the law enforcement services agreement, including the reduction of one (1) dedicated deputy sheriff position to the BDT. The May 26, 2021, City Council staff report provides further context to the City’s overall $20 million law enforcement budget, including the funding per position and the rate structure. The rates are set annually by the Riverside County Board of Supervisors for contract cities to the Riverside County Sheriff’s Department. They are intended to allow the County to obtain full cost recovery on any cost incurred through their contract policing operations with cities. The law enforcement budget and the rate structure contain both supported and unsupported positions. The terms supported and unsupported are from the Riverside Page 819 February 9, 2022 - Staff Report Second Amendment to the Law Enforcement Services Contract Page 2 of 3 County Sheriff’s Department and are how they charge direct and indirect costs to contract cities. The supported positions have greater overhead, which includes sworn supervision, investigative services, dispatch, field training, information services, and other similar supports. Dispatch accounts for the largest share of the overhead costs. All of the City’s patrol, special teams, motor, and traffic positions are supported positions, including the BDT deputies. All of these positions are responding to calls for service. The unsupported positions perform more targeted duties related to task forces and school resource officers and are allocated a smaller portion of the overhead associated with a supported position. These positions are not responding to calls for service. The Coachella Valley Violent Crime Gang Task Force (CVVCGTF) and the Coachella Valley Narcotics Task Force (CVNTF) are two task forces led by the Riverside County Sheriff’s Department that are supported by the City of Palm Desert through two (2) dedicated positions at an unsupported rate. Those positions serve the greater Coachella Valley and are not specific to the City of Palm Desert. As unsupported positions, they are also not responding to calls for service. The Homelessness Task Force that has been mentioned in past Public Safety Commission meetings is not led by the Riverside County Sheriff’s Department. Rather, it is organized and led by the City of Palm Desert and is intended to include business and community members with support from City staff and the Riverside County Sheriff’s Department, where appropriate. As the BDT is responsible for criminal investigations that and all enforcement programs within the City’s business district and supplemental patrol in the area in response to crime trends and community needs, deputies serving on the BDT have a perspective that may be helpful to the Homelessness Task Force. The Homelessness Task Force, however, is not their primary responsibility, nor is it the driving force behind the request to restore funding for the one (1) dedicated deputy sheriff position to the BDT. The requested position is at a supported rate, which reflects the desire for this position to be dedicated to the City of Palm Desert for the intended purpose of supporting the City’s business core, as was described in the January 11, 2022, staff report to the Public Safety Commission, including responding to calls for service. The Riverside County Sheriff’s Department presentation on February 9, 2022, will provide further support for the restoration of the BDT deputy position. Fiscal Analysis The cost of one deputy sheriff to the BDT is approximately $381,000 annually. No additional appropriation for FY 21/22 is needed and the position will be budgeted as part of the FY 22/23 budget. Page 820 February 9, 2022 - Staff Report Second Amendment to the Law Enforcement Services Contract Page 3 of 3 ATTACHMENTS: 1. January 11, 2022, Public Safety Commission staff report requesting a recommendation of approval for a second amendment to the City’s law enforcement services contract 2. City Council staff report dated May 26, 2021, with attachments 3. Presentation prepared by the Riverside County Sheriff’s Department for the February 9, 2022, meeting of the Public Safety Commission Page 821 STAFF REPORT CITY OF PALM DESERT PUBLIC SAFETY COMMISSION MEETING DATE: January 12, 2022 PREPARED BY: Andrew Firestine, Assistant City Manager REQUEST: Recommend the approval of a Second Amendment to the Agreement for Law Enforcement Services between the City of Palm Desert and the County of Riverside (Contract No. C38780). _________________________________________________________________________ Recommendation By minute motion, recommend that the Palm Desert City Council approve the second amendment to the agreement for law enforcement services between the City of Palm Desert and the County of Riverside (Contract No. C38780). Background Analysis On August 27, 2020, the City Council approved the first amendment to its law enforcement services contract, an amendment that modified the level of service in the contract consistent with decisions made during the development and adoption of the City’s FY 20/21 budget. The modifications made to the contract included: • Reducing patrol hours from 171.4 daily hours to 144 daily hours • Suspending the Administrative Sergeant position • Suspending two Motor Team officers • Suspending the K-9 officer position • Suspending one Business District Team position • Suspending one School Resource Officer position • Recruiting three additional Community Services Officer II positions The changes resulted in roughly $3.5 million in savings to the FY 20/21 budget if the modifications had not been made. Following continued discussions with the Riverside County Sheriff’s Department, staff recommends restoring the funding for a dedicated deputy sheriff position to the Business District Team. The Business District and Special Enforcement Teams are responsible for a significant number of criminal investigations that affect the community and all enforcement programs within the City’s business district. Additionally, BDT/SET conducts Page 822 January 12, 2022 - Staff Report Second Amendment to the Law Enforcement Services Contract Page 2 of 3 supplemental patrol in the area in response to crime trends and community needs. Their responsibilities include, but are not limited to the following: • Conduct criminal investigations of organized retail crime, commercial burglary, point of sale fraud, and business operating as fronts for criminal activity. • Manage daily operations relating to the Homeless/Transient Outreach program. • Manage the Palm Desert Police Business Alert Network System (BANS) and the Nextdoor.com social media program for the El Paseo Shopping District and Highway 111 corridor. • Manage the Palm Desert Police Commercial Trespassing Program throughout the City of Palm Desert, including; business enrollment in the program, data and records management, and criminal enforcement (currently 100 properties work with BDT). • Conduct special enforcement programs and undercover investigations throughout the City of Palm Desert concerning prostitution, sales of tobacco and alcohol to minors; and massage parlor compliance. • Manage and conduct the City’s annual Holiday Theft Suppression Program. • Provide support to the City’s Code Compliance Office during municipal code enforcement actions and quality of life programs. • Conduct bicycle, marked/unmarked units, plain unit, and foot patrol duties. • Work a flex schedule that allows for adjustment of schedules based on crime trend analysis, peak shopping times, and/or high-profile events. • Assist with the City of Palm Desert with the planning and operation of police support for significant City events. The calls for service within Beat 30 are indicative of the current workload for the Business District Team: CALLS FOR SERVICE 2017 2018 2019 2020 2021* Trespassing 246 252 231 396 394 Suspicious Persons 206 202 215 243 221 Vandalism 92 81 75 114 92 Petty Theft 408 384 333 220 277 *Through December 14, 2021 Page 823 January 12, 2022 - Staff Report Second Amendment to the Law Enforcement Services Contract Page 3 of 3 Without additional staffing support, law enforcement indicates that they are unable to effectively address their responsibilities under the Business District Team, including transient related calls for service. Fiscal Analysis The cost of one deputy sheriff to the BDT is approximately $381,000 annually. No additional appropriation for FY 21/22 is needed and the position will be budgeted as part of the FY 22/23 budget. ATTACHMENTS: Proposed Second Amendment to Contract No. 38780 Contract No. 38780 Police Beat Map Page 824 Page 825 Page 826 Page 827 Page 828 Page 829 Page 830 Page 831 Page 832 Page 833 Page 834 Page 835 Page 836 Page 837 Page 838 Page 839 Page 840 Page 841 Page 842 Page 843 AÌ AÌ A¦ §¨¦01 §¨¦01 §¨¦01 AÌ A¦ 34 36 30 32 FRED WARING DR COUNTRY CLUB DR FRANK SINATRA DR COOK STPORTOLA AVEMONTEREY AVEHOVLEY LN E ELDORADO DRSTATE HWY 74HAYSTACK RD MESA VIEW DR STATE HWY 111 GERALD FO RD DRDINAH S HORE DR HOVLEY LN W WASHINGTON STINTERSTATE 10 EL PASEO 38 City of Palm DesertPoliceDepartmentBeats Beat Name Beat 30 - Business Beat 32 - South Palm Desert Beat 34 - North East Palm Desert Beat 36 - North West Palm Desert Beat 38 - North Palm Desert ¹ 0 1 20.5 Miles Page 844 CITY OF PALM DESERT CITY COUNCIL BUDGET STUDY SESSION INTEROFFICE MEMORANDUM MEETING DATE: May 26, 2021 PREPARED BY: Stephen Y. Aryan, Risk Manager RE: FY 2021/22 Proposed Palm Desert Police Department Budget Police services are provided through a contract with the Riverside County Sheriff’s Department, which expires on June 30, 2024. The FY 2021/22 proposed law enforcement budget is $20 million, which includes an approximate $500,000 increase due to rises in the patrol and other contract rates and breaks down as follows: • General Law Enforcement Patrol Hours (54%) • Special teams/positions (38%) • Other support costs (8% and includes, but is not limited to, overtime, facility fees, patrol unit mileage, motorcycles maintenance and fuel, etc.) Background Analysis The Palm Desert Police Department is a contracted service of the Riverside County Sheriff’s Department. It includes general patrol of the City and various special teams as ancillary services to patrol. These special teams include, but are not limited to: • Motor Team; • Special Enforcement Team; • Business District Team; • Burglary Suppression Team; • School Resource Officer; and • Representation on local violent crime/gang and narcotics task forces. The Sheriff’s Department charges for services using a calculated “fully-supported” hourly rate for the majority of contracted positions and patrol hours. The FY 2021/22 proposed budget includes a projected 4% increase to the fully-supported rate. The Sheriff’s Department explains that the projected rates are impacted by inflation, increasing pension costs, and negotiation of salary and benefits with unions. The current fiscal year’s rate was also adjusted to account for a 4.74% increase over the prior year. This was originally estimated at 6% and the current year budget will be adjusted as appropriate . Contract Staffing Modifications Police services costs continue to escalate and the City has responded by constantly evaluating opportunities for efficiencies , along with the community’s changing needs. Over the last four years, the City made the following staffing modifications to contain costs , while monitoring impacts to ensure an appropriate level of response and staffing: Page 845 May 26, 2021 - Staff Report FY 2021/22 Police Budget Page 2 of 7 FY 2020/21 Cost Containment Measures Fiscal Impact* Modification of Patrol Hours (171.4 daily hours to 144 daily hours) ($2,058,366) Defer Two Motor Team Officers ($741,193) Defer the K9 Officer Position ($370,596) Defer One Business District Team (BDT) Position ($366,381) Defer the Administrative Sergeant Position ($279,853) Defer One School Resource Officer Position (PDCMS) ($168,720) Hired Thr ee Additional Community Service Officer IIs** $403,978 TOTAL ($3,581,131) Previous Cost Containment Measures (2016-2019) Fiscal Impact* Defer Two Motor Team Officers ($741,192) Modification of Patrol Hours (176.4 daily hours to 171.4 daily hours)*** ($375,614) Defer One SET Deputy Position ($366,381) Defer One S pecial Enforcement Team (SET) Sergeant Position ($279,853) Defer One C ommunity Service Officer (CSO) II Position ($134,659) Defer One Crime Analyst Position (Cove Shared @ 69%) ($92,885) Defer One Forensic Tech Position (Cove Shared @ 69%) ($98,646) TOTAL ($2,089,230) The modifications listed above, at today’s rates, represent approximately $5.7 million. Staff will continue to monitor the impacts of these changes and requested additional detailed reporting from the Sheriff. This data will assist the City in continuing to meet the needs of the community. Law Enforcement Services - Current Staffing Level Postions Palm Desert Patrol Deputies/Corporals (FTE)27.90 Special Enforcement Team (SET)3.00 Business District Team (BDT)3.00 COVE Commercial Traffic Enforcement 1.00 Motor Team 4.00 Burglary Suppression Team 2.00 School Resource Officer 1.00 CVVCGTF Deputy 1.00 CVNTF Deputy 1.00 Total Sworn Patrol & Special Teams 43.90 Captain 1.00 Lieutenant 1.00 Motor Sergeant 1.00 BDT/SET Sergeant 1.00 Rate Supported Lieutenants (FTE)1.54 Rate Supported Sergeants (FTE)5.68 Rate Supported Investigators (FTE)3.89 Total Sworn Management/Rate Support 15.11 Community Service Officer II (CSO)11.00 Rate Supported CSOs (FTE)1.94 Rate Supported Sheriff's Service Officer (FTE)1.07 Rate Supported Accounting Staff (FTE)1.86 Rate Supported Office Staff (FTE)3.74 Total Classified Support 19.61 Total Sworn Positions 59.01 Total Contract Positions 78.62 Total Sworn Posistions p/ 1,000 Residents 1.1 *Adjusted to reflect FY 2021/22 estimated costs **An action related to modifying patrol hours ***Backfilled by K9 Officer Page 846 May 26, 2021 - Staff Report FY 2021/22 Police Budget Page 3 of 7 Crime Reporting Data The charts below provide a five year overview of FBI Uniform Crime Reporting (UCR) data provided by the nine incorporated cities within the Coachella Valley. The FBI currently has data through 2019 and 2020 data is anticipated in a few months, likely in the fall. Violent Crime Data Violent crime totals include homicide, rape, robbery, and aggravated assaults. Palm Desert, along with other neighboring communities, experienced a violent crime increase in 2019, specifically with aggravated assaults. An aggravated assault is defined as an unlawful attack by one person upon another for the purpose of inflicting severe bodily injury. This type of assault is usually accompanied by the use of a weapon (or other means ) likely to produce death or great bodily harm . Compared with other valley communities, Palm Desert ranks in the lowest percentile for violent crime and is similar to rates reported in Rancho Mirage and Indian Wells. Note: 1. In 2019, sixty percent (60%) of reported violent crimes in California were aggravated assaults, thirty percent (30%) were robberies, nine percent (9%) were rapes, and one percent (1%) were homicides. Nationwide, aggravated assaults also increased in 2019 1281661686466871402952911715323255858011727941152161225843786772752313712829216396791290281721043091495429127424144126255135306813626745CATHEDRAL CITY COACHELLA DESERT HOT SPRINGS INDIAN WELLS INDIO LA QUINTA PALM DESERT PALM SPRINGS RANCHO MIRAGE FBI VIOLENT CRIME DATA 2014 -2019 2014 VC 2015 VC 2016 ViC 2017 VC 2018 VC 2019 VC Page 847 May 26, 2021 - Staff Report FY 2021/22 Police Budget Page 4 of 7 Property Crime Data The FBI also maintains crime statistics for property related offenses, which include arson, burglary, larceny-theft, and motor vehicle theft. The City of Palm Desert ranks higher than other local communities for property theft, with approximately seventy-five (75%) of 2019 property crimes in Palm Desert being “larceny-theft” related. Larceny-theft is the unlawful taking of property from the possession of another. Examples include shoplifting, pocket-picking, or any stolen property that is not taken by force, violence, or fraud. Palm Desert is known as the retail center of the Coachella Valley with a regional mall, the high-end El Paseo shopping district, and numerous other corporate and small businesses. As a city with such an abundant mix of retail establishments, Palm Desert historically ranks higher in property crimes than other valley cities . 2.69 2.65 8.49 2.42 5.84 1.66 2.53 5.62 2.42 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 Cathedral City Coachella Desert Hot Springs Indian Wells Indio La Quinta Palm Desert Palm Springs Rancho Mirage 2019 Violent Crimes p/1,000 Residents 1,194 1,152 1,160 120 2,210 1,324 2,178 2,722 677 1,152 1,238 1,110 150 2,112 1,220 2,299 3,029 769 1,097 1,302 926 110 1,944 1,085 2,144 2,754 701 769 1,141 784 159 2,287 1,197 2,076 1,963 572 717 1,143 638 132 2,242 1,154 1,989 2,078 708 602 894 680 138 1,880 1,032 1,848 1,966 628 CATHEDRAL CITY COACHELLA DESERT HOT SPRINGS INDIAN WELLS INDIO LA QUINTA PALM DESERT PALM SPRINGS RANCHO MIRAGE FBI PROPERTY CRIME DATA 2014 -2019 2014 PC 2015 PC 2016 PC 2017 PC 2018 PC 2019 PC Page 848 May 26, 2021 - Staff Report FY 2021/22 Police Budget Page 5 of 7 Preliminary 2020 FBI UCR Data Although the 2020 FBI Uniform Crime Reporting data is not yet published, staff included the preliminary data for both violent and property crimes in 2020 for Palm Desert. Both violent crime and property crime decreased when compared to 2019, which is likely related to the yearlong pandemic and subsequent closure of many businesses and hotels. Five Year Violent Crime Data Five Year Property Crime Data City 2015 2016 2017 218 2019 2020 2019-2020 Variance Palm Desert 2,299 2,144 2,076 1,989 1,848 1,568 -15% Notes: 1. Although the total numbers decreased in both categories, there was an increase in motor vehicle related thefts (41%) and robberies (17%). 2. Motor vehicle theft includes both the theft and attempted theft of a motor vehicle. A robbery is defined as taking or attempting to take anything of value from another person(s) by force, threat of force/violence, and/or putting them in fear. 3. The two primary crimes committed in the community were down in 2020, with reported cases of aggravated assaults and larceny seeing a reduction of 10% and 20% respectively from 2019. 11.25 18.79 22.64 25.69 20.70 25.23 34.33 41.38 33.74 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 Cathedral City Coachella Desert Hot Springs Indian Wells Indio La Quinta Palm Desert Palm Springs Rancho Mirage 2019 Property Crimes p/1,000 Residents City 2015 2016 2017 2018 2019 2020 2019-2020 Variance Palm Desert 117 77 91 91 136 125 -8% Page 849 May 26, 2021 - Staff Report FY 2021/22 Police Budget Page 6 of 7 Traffic Collision History Over the course of the last five years (2015-2020), traffic collision data for Palm Desert has remained uniform. The majority of traffic collisions are non-injury related incidents with property damage only. Fatal and severe injury collisions account for approximately 2.5% of all traffic collisions over the last five years. Collisions Totals By Year Collision Severity 2015 2016 2017 2018 2019 2020 Grand Total 0 398 423 382 410 326 304 2,243 1 4 7 2 5 5 1 24 2 13 10 7 14 7 10 61 3 48 55 60 53 55 55 326 4 120 123 104 104 113 86 650 Grand Total 583 618 555 586 506 456 3,304 Legend: 1-Fatal; 2-Injury (Severe); 3-Injury (Other Visible); 4-Injury (Complaint of Pain) 0-Property Damage Only Conclusion The proposed FY 2021/22 Police Budget is estimated to be $20 million, which represents approximately a 4% increase over the prior year . As noted, there is a 4% anticipated increase to the FY 2021/22 fully supported rate that is based on various known factors , the most significant being pension obligations and salary increases. A five-year budget history and projection is provided below. Police Department Five Year Budget History FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 Patrol Hours 171.4 171.4 171.4 144 144 Patrol FTE's 36 36 36 30 28 Patrol Budget $11,687,208 $11,801,164 $12,060,510 $10,528,756 $10,817,689 Other Contract Sworn 25 25 25 19 19 Contracted Non-Sworn 10 10 8 11 11 Other Staff Budget $8,401,960 $8,552,100 $8,564,649 $7,368,396 $7,626,623 Other Costs Budget $1,689,234 $1,579,854 $1,651,068 $1,613,658 $1,570,816 Patrol Rate Increase %10%5%5%6%4% TOTAL $21,778,402 $21,933,118 $22,276,227 $19,510,810 $20,015,128 Page 850 May 26, 2021 - Staff Report FY 2021/22 Police Budget Page 7 of 7 Police Department Five Year Budget Projection ATTACHMENTS: 1. FY 2021/22 Police Budget Spreadsheet 2. Approved Law Enforcement Rate Sheet FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 Patrol Hours 144 144 159 159 159 159 Patrol FTE's 28 28 31 31 31 31 Patrol Budget $10,817,689 $11,466,750 $12,154,755 $12,884,041 $13,657,083 $14,476,508 Other Contract Sworn 19 20 20 20 20 20 Contracted Non-Sworn 11 11 11 11 11 11 Other Staff Budget $7,626,623 $8,472,584.24 $8,980,939.29 $9,519,795.65 $10,090,983.39 $10,696,442.39 Other Costs Budget $1,570,816 $1,602,232.32 $1,634,276.97 $1,666,962.51 $1,700,301.76 $1,734,307.79 Patrol Rate Increase %:4%6%6%6%6%6% TOTAL $20,015,128 $21,541,567 $22,769,972 $24,070,799 $25,448,368 $26,907,258 Page 851 Palm Desert Police Contract Current Level of Service Detailed Budget Appropriation Request FY 2021/2022 Page 1 LINE ITEM DESCRIPTION FTE Hours Per Day Days FY 20/21 Rate Est. Increase FY 21/22 Rate Per Position Request 1 General Law Enforcement (Patrol:SUP-B) 28 144 365 $197.90 4.00%$205.82 $387,757.34 $10,817,689 LINE ITEM DESCRIPTION Positions Hours Per Year Percent Staffed Estimated 20/21 Rate Estimated 20/21 Differential Estimated Increase FY 21/22 Est. Rate FY 21/22 Est. Differential Per Position Request 2 Dedicated Sheriff's Lieutenant 1 2080 100%$146.15 $0.00 4.00%$152.00 $0.00 $316,151.68 $316,152 3 Dedicated Sheriff's Sergeant - Admin 0 2080 100%$129.37 $0.00 4.00%$134.54 $0.00 $279,853.18 $0 4 Dedicated Sheriff's Sergeant - Motor 1 2080 100%$129.37 $2.86 4.00%$134.54 $3.00 $286,099.42 $286,099 5 Dedicated Sheriff's Sergeant - SET 0 2080 100%$129.37 $0.00 4.00%$134.54 $0.00 $279,853.18 $0 6 Dedicated Sheriff's Sergeant - BDT 1 2080 100%$129.37 $0.00 4.00%$134.54 $0.00 $279,853.18 $279,853 7 Traffic Team (commercial enforcement:SDP-B)0.69 1884 100%$197.90 $0.00 4.00%$205.82 $0.00 $387,757.34 $267,553 8 Dedicated Motorcycle Enforcement (SDC-B)4 2080 100%$169.37 $1.93 4.00%$176.14 $2.03 $370,596.30 $1,482,385 9 Dedicated Canine Officer (SDC-B)0 2080 100%$169.37 $1.93 4.00%$176.14 $2.03 $370,596.30 $0 10 Special Enforcement Team (SDC-B)3 2080 100%$169.37 $0.00 4.00%$176.14 $0.00 $366,381.18 $1,099,144 11 Business District Team (SDC-B)3 2080 100%$169.37 $0.00 4.00%$176.14 $0.00 $366,381.18 $1,099,144 12 Dedicated School Resource Officer (UDP-B)1 1440 100%$112.66 $0.00 4.00%$117.17 $0.00 $168,719.62 $168,720 13 Burglary Suppression (SDC-B)2 2080 100%$169.37 $0.00 4.00%$176.14 $0.00 $366,381.18 $732,762 14 CVVCGTF Deputy (UDC)1 2080 100%$95.59 $0.00 4.00%$99.41 $0.00 $206,780.29 $206,780 15 CVNTF Deputy (UDC)1 2080 100%$95.59 $0.00 4.00%$99.41 $0.00 $206,780.29 $206,780 16 Community Service Officer II 11 2080 100%$62.25 $0.00 4.00%$64.74 $0.00 $134,659.20 $1,481,251 LINE ITEM DESCRIPTION Per Position Request 19 Overtime $362,000 20 Palm Desert Station Facility Fee $387,000 21 Records Management System $120,000 22 Cal ID - Statewide Fingerprint ID System $52,986 23 Jail Access Fee (Exceeds 3 yrs. Average)$0 24 Mileage Cost - Patrol Units $434,130 25 Mileage Cost - Plain Units $22,500 26 Canine Daily Special Rate $0 27 BSU Fuel $12,000 28 Motorcycle Fuel $8,700 29 Motorcycle Maintenance $54,600 30 Police Contingency Fund Special equipment, materials, training, & program support $30,000 31 Explorer Post 507 contribution $6,900 32 Operational Reoccuring Costs $70,000 33 Shop with a Cop/YBFIT $10,000 TOTAL $20,015,128 Projected increase from FY 2020/21 Police Budget ($19,510,810) to the FY 2021/22, based on the current recommended level of service.$504,318 Increase/Decrease 2.58% $514.58 a booking above 3 year average of 455-Sheriff Not Charging DETAIL Officer extended shifts, Investigations, CSO's , Sergeants, Dedicated Cost Estimate (reduced level of service - rate went down) Cost Estimate (No estimate yet - added 4%) Billed at $1.00 per capita (52,986 as of 01/01/2020-DOF estimate) Funding for Palm Desert Explorer Post 507-Year 2 of a biannual budget Costs for blood draws, blood analysis, sexual assault exams, etc. Costs to participate in these annual events 499,000 miles $.87 per mile (based on current year average) 45,000 miles @ .50 per mile (based on current year average) 365 x $17.41 Avg. $1,000.00 per month x 12 months Avg. $145.00 monthly per motor x 12 months x 5 motors Avg. $7,800 per year x 7 motors Per an agreement with the DSUSD, 50% of actual cost is reimbursed directly to the city of Palm Desert (by DSUSD) for the SRO position at the PDHS. Productive Patrol Hours fluctuate most years. For FY 2021/22 1,884 "productive hours" are estimated under the new County shift model (3/12 & 4/12 less time estimated for vacation, sick, etc. because positions are backfilled). Page 852 Page 853 Page 854 Page 855 Page 856 Page 857 Page 858 Page 859 Page 860 PALM DESERT BUSINESS DISTRICT TEAM THE SECRET TO SUCCESS Page 861 THE TEAM: EXPERIENCE CANNOT BE TAUGHT; IT MUST BE LIVED •Sergeant Matthew Koser 20 Yrs. •Deputy Steven Nelson 11 Yrs. •Deputy Varon Potter 7 Yrs. Page 862 RESPONSIBILITIES: Conduct criminal investigations of organized retail crime, commercial burglary, point of sale fraud, and businesses operating as a front for criminal activity. Manage the Palm Desert businesses communication portals. Manage the Palm Desert commercial trespassing program. Conduct special enforcement programs and undercover investigations regarding prostitution, sales of alcohol and tobacco to minors, and massage parlor compliance. Coordinate and manage the yearly Holiday Theft Suppression program. Support Code Enforcement during municipal code enforcement actions and Quality of Life operations. Conduct saturation patrol operations including Bicycle, marked unit, unmarked unit, and foot patrols. Flexible schedule that allows for adjustment of schedule based on crime trend analysis, peak shopping times, and/or high-profile events. Assist with the planning and coordinating of special city events such as the 4th of July festival, Golf Cart parade, and numerous El Paseo based events. Plan, coordinate, and execute operations providing support services to reduce the impact of homelessness on the city, its residents, and its businesses. Plan, coordinate, and execute homelessness operations. These operations include providing available services, compliance sweeps and enforcement operations. Page 863 IS THERE A NEED? CALLS FOR SERVICE (2021) 49, 615 30-BEAT CALLS: 7,199 ARRESTS Misdemeanor Felony 789 393 Page 864 HOMELESS OUTREACH PROGRAM •4 “Quality of Life operations” since November 2021 •More than 100 arrests since June of 2021. •200 + outreach offerings during this time period. •Collaboration with Code Enforcement, H.H.O.P.E., R.I. International, C.V.A.G.. •Maintenance of the trespass letter program. •Attend weekly meetings with homelessness stakeholders' group. •Yearly Point in Time count. Page 865 SUCCESS STORIES: 01/12/21: Multiple retail burglars caught at Desert Crossings. 03/22/21: Arson at Westfield Mall. 07/14/21: Robbery at Affordable Design. 08/29/21: Fix restaurant on El Paseo. 10/21/21: Retail burgs on El Paseo leads to 4 in-custody after pursuit. 11/26/21: Retail burg at Saks. $10,000 in recovered property. 12/19/21: 2 robbery suspects at JC Penney caught after short pursuit. Page 866 YEAR TO DATE: Page 867 PREVIOUS CITY CONTRACT: Page 868 CURRENT CITY CONTRACT: Page 869 SUPPORTED VS. UNSUPPORTED Page 870 WHAT IS THE BENEFIT OF A DEDICATED BDT MEMBER VS. A TASK FORCE MEMBER? •Supported vs. Un-supported: •Supported: (Patrol, Special Teams, K-9s, Motors, Traffic) –in addition to the Salaries & Benefits of the position, as well as the cost of supplies/services, there is overhead of Professional Standards Bureau, Personnel, Information Services Bureau, Dispatch, Accounting & Finance, Technical Services Bureau, Grants and The Ben Clark Training Center (Range). Most of these are small amounts of the rate, Dispatch is the largest portion. These positions are responding to calls for service. •Unsupported positions: (SROs, GTF, Narcotics)–these positions include Salaries & Benefits of the position, as well as the cost of supplies/services, but the overhead included is only for Accounting and Finance, Personnel and Professional Standards Bureau. No overhead from Information Services Bureau, Dispatch, Technical Services Bureau, Grants or The Ben Clark Training Center are included in these rates. •Familiarity! •Dedicated Business District team members have a personal relationship with the business owners, their employees, and customers. •It is not uncommon to have business owners and employees contact BDT deputies directly when suspicious activities occur. •Availability. •BDT members create a close relationship with the businesses within the city. •Assignment to the BDT requires the member have an intimate knowledge of the business's special events, hours of operation, and nature of business conducted. Page 871 CONTINUED: •Flexibility: •BDT team members are available 24 hours a day, 7 days a week, 365 days a year. •Supplemental force •BDT members can be used to supplement all operations within the Palm Desert Station, Traffic, Investigations, and Patrol. Page 872 A LOT MORE THAN JUST CRIME: •Special events •YBFIT triathlon Guadalupe march Shop with a cop •Patriot bike ride Stuff the bus Clydesdales on El Paseo •Golf cart parade Tour De Palm Springs Little league opening day •Century bike ride Palm Desert ½ marathon 4th of July celebration •Turkey trot Panther 5K Funeral processions •National night out Holiday theft suppression program Every 15 minutes •Coffee with a Cop *Any additional special events that arise Page 873 CONTINUED: •When it comes to special events and investigation operations,the need for increased staffing levels becomes very apparent. A special event,such as the Fourth of July celebration,the Palm Desert Golf Cart Parade,or the Y-B-Fit triathlon,require attendance at planning meetings,operational plan development, and are often coordinated over a long period of time with several meetings.These factors reduce the number of officers available for enforcement operations. Page 874 2022 GOALS: •Enhance the relationship and availability between BDT members and business owners. •Continue Directed enforcement programs (High visibility, quality of life operations). •Reduce retail theft across the board through education, environmental design, and proactive enforcement. •Conduct bicycle patrols more frequently. •Increase exposure at city events, building a stronger, more personal relationship with city officials and residents. Page 875 Page 876 Page 877 Page 878 STAFF REPORT CITY OF PALM DESERT CITY MANAGER’S OFFICE MEETING DATE: February 24, 2022 PREPARED BY: Andrew Firestine, Assistant City Manager Heather Horning, Assistant to the City Manager REQUEST: Conduct Public Hearing on the Redrawing of Council Member District Boundaries Recommendation By Minute Motion: 1. Receive a report from staff and the City’s redistricting consultant on the redistricting process and permissible criteria to be considered to redraw district boundaries; and 2. Conduct a public hearing to receive public input on district boundaries. Background Pursuant to Election Code section 21621, charter cities with by-district election systems are required to redraw their district boundary maps to ensure compliance with the California and federal Voting Rights Acts. The process to complete redistricting requires a minimum of four public hearings and dedicated public outreach to ensure minority populations and communities of interest are aware of the redistricting effort and are provided with options to participate. The City held its first public hearing on January 13, 2022 and its second public hearing on January 27, 2022. At the January 27th hearing, the City’s redistricting consultant presented two draft map options for Council’s review. Discussion Every 10 years, cities with by-district election systems must use new census data to review and, if needed, redraw district lines to reflect how local populations have changed. This process, called redistricting, ensures all districts have a nearly equal population. The redistricting process for the City of Palm Desert must be completed by April 17, 2022. The City adopted its current district boundaries in 2020. The approved boundary map was drawn based on 2010 census data as required by law. The districts must now be redrawn using the 2020 census data and in compliance with the Fair Maps Act (the “Act”), which was adopted by the California legislature as AB 849 and took effect January 1, 2020. Page 879 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 2 of 10 Under the Act, the City Council must draw and adopt boundaries using the following criteria in the listed order of priority (Elections Code 21621(c)): 1. Comply with the federal requirements of equal population and the Voting Rights Act. 2. Be geographically contiguous. 3. Undivided neighborhoods and “communities of interest” (socio-economic geographic areas that should be kept together). 4. Display easily identifiable boundaries. 5. Be compact (do not bypass one group of people to get to a more distant group of people). 6. Shall not favor or discriminate against a political party. Once the prioritized criteria are met, other traditional districting principles can be considered, such as: 1. Minimize the number of voters delayed from voting in 2022 to 2024. 2. Respect voters’ choices/continuity in office. 3. Future population growth. By law, the City must hold at least four public hearings that enable community members to provide input on the drawing of district maps: • At least one hearing must occur before the city or county draws draft maps. • At least two hearings must happen after the drawing of draft maps. • The fourth hearing can happen either before or after the drawing of draft maps. • City or county staff or consultants may hold a public workshop instead of one of the required public redistricting hearings. To increase the accessibility of these hearings, cities and counties must take the following steps: • At least one hearing must occur on a Saturday, Sunday, or after 6:00 p.m. on a weekday. • If a redistricting hearing is consolidated with another local government meeting, the redistricting hearing must begin at a pre-designated time. • Local public redistricting hearings must be made accessible with people with disabilities. Determining population balance is typically done by measuring the spread, or deviation, between the least populated district and the greatest populated district. Deviations of 10% or less are generally considered acceptable under U.S. Supreme Court rulings on equal protection. In the City’s case, two districts were created and the population balance established under the terms of a redistricting settlement agreement. Under the terms of the Page 880 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 3 of 10 settlement agreement, District 1’s population is required to be between 18.4 – 21.6% of the City’s total population. One Council Member is elected from District 1. District 2 represents the remaining areas of the City and is permitted a population range of 78.4 – 81.6% of the City’s total population. Four Council Members are elected from District 2. Analysis of the City’s current district boundaries, adjusted for the 2020 Census data, shows the districts are no longer population balanced. The City’s population is 51,317. The allowable population for District 1 is 9,443 – 11,083. The current population for District 1 is 9,280, or 18.1%. The resulting population for District 2 is 42,037, or 81.9%, slightly above the permitted range under the terms of the settlement agreement. Purpose of this Public Hearing The purpose of this public hearing is to continue to review the initial draft maps prepared by the City’s consultant, inform the public about the districting process, and to hear from the community on factors to be taken into consideration for district boundaries. The public is requested to provide input regarding communities of interest and other local factors that should be considered for district maps. A community of interest under the relevant Elections Code provision for cities (Section 21621(c) is, “a population that shares common social or economic interests that should be included within a single district for purposes of its effective and fair representation.” Maps The map and accompanying demographic information of the City’s current districts is attached to this report (Attachment 2) and the current district boundary map is highlighted to the right. Page 881 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 4 of 10 Initial Draft Maps The City’s Redistricting consultant prepared two initial draft map options for Council’s consideration at the second public hearing on January 24, 2022. After receiving input from Council, the consultant prepared one additional map. Further, one map has been received from a member of the public. Each map is summarized below. A more detailed version of the maps and accompanying demographic information may be found attached to this report (Attachment 1). Further, an online tool for closely examining the boundaries, with zoom and search capabilities, may be found here: https://www.google.com/maps/d/u/0/viewer?mid=1JQIU0u_oPXTZxFvSus2XidWv- OhnOUuG&ll=33.72500667071419%2C-116.36707827727082&z=14 Map Option 1 Map Option 1 creates a two district plan that exhibits a 0% deviation from the ideal 80/20% population balance. District 1 falls within the ranges permitted by the Settlement Agreement with 20% of the City’s population, and the map otherwise complies with the Fair Map Act requirements of contiguity, communities of interest, and recognizable district boundaries. Because the population requirement is established by a settlement agreement, significant shift in the configuration of the districts is not possible. Option 1 greatly follows the boundaries of the current districts, with the addition of areas south of Highway 111 and west of Monterey Avenue being incorporated into District 1. It should be noted, however, that certain neighborhoods, while forming a community of interest, are comprised of multiple census blocks. These census blocks include populations that vary in terms of their ethnic background, and in order to preserve the majority/minority Hispanic Page 882 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 5 of 10 voting district in District 1, neighborhoods that may have been drawn together in the initial transition to districts, have been split, albeit slightly, in the proposed map. Every effort was made to keep communities of interest and neighborhoods together, where possible. District 1 is drawn with a Citizen Voting Age Population (CVAP) of 50.7% Non-Latino White, and 37.6% Hispanic. A zoomed-in version of the map and the complete demographic analysis of Option 1 may be found as an attachment to this report (Attachment 1). Map Option 2 Map Option 2 also creates a two district plan and largely resembles the boundaries of the current district map. Option 2 moves District 1 less significantly to the west along Highway 111 and south of Highway 111 than Option 1. In Option 2, District 1 represents 18.49% of the population while District 2 represents 81.51% of the population, bringing both within the permitted range under the settlement agreement. As with Option 1, certain neighborhoods that had been previously drawn together in a single district may have been divided to preserve the majority/minority Hispanic voting district population. District 1 is drawn with a Citizen Voting Age Population (CVAP) of 49.9% Non-Latino White, and 38.7% Hispanic. A zoomed-in version of the map and a complete demographic analysis of Option 2 may be found as an attachment to this report (Attachment 1). Page 883 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 6 of 10 New Maps Map Option 3 Option 3 creates a more compact District 1, removing uneven census blocks and maintaining defined communities of interest. The map closely aligns with the existing district boundaries in the area bordering Portola Country Club. The map also removes the block containing College of the Desert from District 1 and fills in blocks in the areas of Palm Desert Charter Middle School and Magnesia Falls Park. The map does not extend north beyond 42nd Avenue, as in the current boundary map. In Option 3 District 1 represents 20.21% of the population while District 2 represents 79.79% of the population, bringing both within the permitted range under the settlement agreement. District 1 is drawn with a Citizen Voting Age Population (CVAP) of 51.2% Non-Latino White, and 36.4% Hispanic. A zoomed-in map and the complete demographic analysis of Option 3 may be found as an attachment to this report (Attachment 1). Page 884 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 7 of 10 Map Option 4 Option 4 is a map submitted by a member of the public. It creates a compact District 1. However, it creates a non-contiguous District 2, which is not permitted under the Fair Maps Act. The population is balanced, with a deviation of 30 people from an 80/20% population balance. District 1 is drawn with a Citizen Voting Age Population (CVAP) of 62% Non-Latino White, and 28.5% Hispanic. A zoomed-in map and complete demographic analysis of Option 4 maybe found as an attachment to this report (Attachment 1). Next Steps Following this public hearing, the City’s redistricting consultant will revise any maps as directed by the Council, as well as evaluate any maps submitted by the public. The City has launched an online mapping tool which allows the public to draw and submit their own district maps for consideration. Prior to the published deadline of February 11, 2022, for maps to be submitted for consideration at the third public hearing, one map was received by the public, and is included as Option 4 summarized above. Any maps submitted by the public in the after that date will be evaluated and included with any revised maps considered at the fourth public hearing scheduled for March 10, 2022. If at the public hearing the Council requests additional revisions, those revisions will be presented at the fourth public hearing on March 10. The Council may, at the third public hearing, narrow their focus and identify a preferred map. In that instance, staff will also include introduction of an Ordinance approving a final map at the fourth public hearing. Should additional public hearings be necessary to identify and select a preferred map, they will be scheduled accordingly. As noted above, the deadline for the City of Palm Desert to complete the redistricting process is April 17, 2022. Page 885 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 8 of 10 A complete schedule is identified in the table below: Schedule January 13, 2022 1st public hearing Held prior to the release of draft maps January 20, 2022 1st public workshop at 6:00 p.m. to 7:00 p.m. at the Palm Desert Community Center on San Pablo January 27, 2022 2nd public hearing at 4:30 p.m. Initial draft map(s) will be reviewed January 27 - February 4 BB&K to revise draft maps using 2020 Census data, if directed at 2nd Public Hearing February 11, 2022 Deadline for the public to submit draft maps for consideration at 3rd public hearing February 17, 2022 Publish revised draft map(s) February 22, 2022 2nd public workshop at 5 p.m. to 6 p.m. via Zoom webinar Review of draft maps February 24, 2022 3rd public hearing at 4:30 p.m. Consideration and input on proposed draft maps February 25 - March 2 BB&K to prepare proposed final map(s) March 3, 2022 Publication of proposed final map(s) March 10, 2022 4th public hearing at 4:30 p.m. Council to introduce ordinance approving final maps April 17, 2022 City deadline to adopt ordinance after 2nd reading (effective immediately) and submit map to Registrar November 8, 2022 2022 election Page 886 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 9 of 10 Community Outreach A website has been created to coordinate all the redistricting information, including the list of public meetings and agendas, mapping tools, and draft maps upon their release. It also provides answers to frequently asked questions and links to additional resources. The website is available in both English and Spanish and is available both through Engage Palm Desert and mappalmdesert.org. In addition to the four public hearings, two public workshops have been scheduled. The first workshop was held on January 20, 2022, and was attended by approximately ten residents in person and 12 virtually. The purpose of the first workshop was to explain the redistricting process; to provide an overview of the mapping tools; and to solicit input on communities of interest. The workshop was conducted in-person and livestreamed via Zoom to allow virtual participation. It was also videorecorded and made available through the website following the meeting. A Spanish translator was available to provide simultaneous translation through headsets at the meeting for in person participants and via a Zoom Translation Room for virtual participants. The purpose of the second workshop is to view draft maps that have been prepared by the City’s consultant prior to third public hearing and before the deadline for the public to submit draft maps for consideration. The second workshop is scheduled for February 22, 2022. This meeting will be conducted virtually through a Zoom webinar. A live Spanish translation of the webinar will be accessible through a Zoom Translation Room. It will also be recorded and made available through the website after the meeting. The Development Services wing of City Hall will be open to those members of the public who would like to participate in the webinar at a City facility. There will be a conference rooms set up for both English and Spanish. The public workshops have been advertised through the website, social media, radio advertisements, and flyers provided to community organizations including schools and homeowner’s associations. Fiscal Analysis There is no fiscal impact associated with the recommended action. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER Robert W. Hargreaves Robert W. Hargreaves City Attorney N/A L. Todd Hileman City Manager N/A Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager: L. Todd Hileman: L. Todd Hileman Page 887 February 24, 2022 Public Hearing – Redrawing of Council Member District Boundaries Page 10 of 10 ATTACHMENTS: 1. Demographic Analysis of Map Option 1, 2, 3, and 4 2. Demographic Analysis of Current Districts 3. Public Hearing Notice Page 888 1 Page 889 Map Option 1 Page 890 Map Option 1 Demographic Analysis NL = Non-Latino VAP = Voting Age Population AIAN = American Indian Alaskan Native District Total_Pop ulation Raw Deviation % Deviation % of Total Pop Latino NL White Alone NL Black Alone NL AIAN Alone NL Asian Alone NL Hawaiian Alone NL Other Alone NL 2+ Races 1 10,263 (0) 0.00%20.00% 5,629 3,682 210 25 381 5 48 283 2 41,054 0 0.00% 80.00% 7,747 28,902 759 98 1,983 52 177 1,336 Total 51,317 Ideal 10,263 Total VAP Latino VAP NL White Alone VAP NL Black Alone VAP NL AIAN Al one VAP NL Asian Alone VAP NL Hawaiian Alone VAP NL Other Race Alone VAP NL 2+ Races VAP Ideal Pop for 4 seats 41,054 District 1 7,972 4,005 3,237 169 17 303 5 35 201 District 2 36,322 5,777 26,928 648 88 1,696 31 145 1,009 18.4% of total 9,442 44,294 9,782 30,165 817 105 1,999 36 180 1,210 21.6% of total 11,084 Page 891 Map Option 2 Page 892 Map Option 2 Demographic Analysis NL = Non-Latino VAP = Voting Age Population AIAN = American Indian Alaskan Native District Total Population Raw Deviation % Deviation % of Total Pop Latino NL White Alone NL Black Alone NL AIAN Alone NL Asian Alone NL Hawaiian Alone NL Other Alone NL 2+ Races 1 9,486 -777 -7.57%18.49% 5,347 3,278 183 22 353 5 47 251 2 41,831 777 1.89% 81.51% 8,029 29,306 786 101 2,011 52 178 1,368 Total 51,317 13,376 32,584 969 123 2,364 57 225 1,619 Ideal 10,263 Ideal Pop for 4 seats 41,054 Total VAP Latino VAP NL White Alone VAP NL Black Alone VAP NL AIAN Alone VAP NL Asian Alone VAP NL Hawaiian Alone VAP NL Other Race Alone VAP NL 2+ Races VAP District 1 7,327 3,791 2,881 147 15 278 5 34 176 18.4% of total 9,442 District 2 36,967 5,991 27,284 670 90 1,721 31 146 1,034 21.6% of total 11,084 44,294 9,782 30,165 817 105 1,999 36 180 1,210 Page 893 Attachment 2 Demographic Analysis of Current Districts Page 894 Current Districts District Total_Popu lation % of Population Permitted Range Permitted Range of Movement Raw Deviation % Deviation CVAP19 Total CVAP19 NL White CVAP19 NL Black CVAP Hispanic CVAP19 Not Hispanic CVAP19 NL AIAN CVAP19 NL ASIAN CVAP19 NL Hawaiian CVAP19 NL Other 1 9280 18.10% 18.4% - 21.6% 163 - 1803 -983.4 -9.58%6531 3252 169 2529 3804 17 220 11 17 2 42037 81.90% 78.4% - 81.6% (163) - (1803) 983.4 2.40% 34343 27167 1085 4429 30057 25 1228 27 73 Page 895 CITY OF PALM DESERT NOTICE OF PUBLIC HEARING TO RECEIVE PUBLIC INPUT AND PROPOSALS REGARDING CITY COUNCIL DISTRICT BOUNDARIES NOTICE IS HEREBY GIVEN that, pursuant to California Elections Code Section EC 21627.1, the City Council of the City of Palm Desert will hold a public hearing to receive input regarding potential redistricting of Council Member districts. NOTICE IS FURTHER GIVEN that on Thursday, January 27, 2022, at 4:30 p.m., the City will hold a virtual public hearing (Public Hearing No. 2) at cityofpalmdesert.org/zoom in order to receive public comments, hear and consider all testimony. Instructions for remote participation will be listed on the posted agenda for the meeting at: https://www.cityofpalmdesert.org/our-city/mayor-and-city-council-/city-council-meeting- information-center. The public is invited to attend and/or submit information regarding their Communities of Interest, and proposed division boundaries for the 2022 redistricting process. Draft maps will not be available until census-block level 2020 U.S. census data is released and analyzed, at Public Hearing #2. Input may also be emailed to councilmeetingcomments@cityofpalmdesert.org. NOTICE IS FURTHER GIVEN that additional virtual public hearings and workshops are scheduled as follows: • Public Workshop No. 2: Tuesday, February 22, 2022 at 5:00 p.m. • Public Hearing No. 3: Thursday, February 24, 2022 at 4:30 p.m. • Public Hearing No. 4: Thursday, March 10, 2022 at 4:30 p.m. Complete redistricting information, including a schedule of upcoming public hearings and workshops can be found at https://mappalmdesert.org/. NIAMH M. ORTEGA, DEPUTY CITY CLERK CITY OF PALM DESERT, CALIFORNIA POSTED: January 20, 2022 Page 896 Option 1 Page 897 Option 2 Page 898 Option 3 Page 899 January 27, 2022 City of Palm Desert C/O: Councilmembers 73510 Fred Waring Drive Palm Desert, CA 92260 RE: January 27, 2022, Item 17 Request for Direction -Five District Voting Mayor and Councilmembers: As a resident who has spent most of my life in this City, I have written this letter is to express my opposition towards a 5-distirct voting scheme. I rarely agree completely (personally) with the actions of councils both past and present but have always tried to focus on the broader good of the City. In the past Palm Deserts culture has been to utilize its economic engine to better the lives of fill residents. One extremely vivid example is with the investment in parks throughout the City. There are hundreds of additional ways to illustrate how councils have focused on issues throughout the City, to suggest otherwise is simply an uneducated position. I also believe a fair amount of our City's residents are extremely busy, and want to know their council is managing the City responsibly. Sadly, I have taken the time to pen this letter today because I am concerned about our towns future. As someone who makes a living in local government I have yet to see an example of how segregating any subset of a population leads to more inclusion. There are plenty of examples locally, and regionally that illustrate that the focus on the City as a whole decreases once geographic districts have been implemented. As a resident I am not prepared to hear a councilmember tell me they don't care about an issue because it is not in their district. Moreover, I'm scared of the selfishness that will likely perverse a budget process. My hope is that the council recognizes the pressure they are receiving is from an extremely vocal minority, and simply utilize the word NO. As residents of Palm Desert, we should be focused on authentic ways to build community and togetherness not encourage policies that literally drive lines and wedges between us. :z� Stendell Family 75475 La Cresta Drive Palm Desert, CA 92211 Public Comments Page 900 From:D F Middleton To:CouncilMeeting Comments Subject:Item 22, Redistricting Date:Thursday, January 27, 2022 8:32:00 AM The plan to redraw the two City Council needs to be scrapped now as it is a waste of taxpayers money. The two-district “solution” not only perpetuates the dilution of the Hispanic vote by pitting one council member against four, it appears on its face to be unconstitutional. Since the Constitutional Convention of 1787, representation has been a vital component of American government at all levels. "At-large" elections do not represent all members of a community, especially when they result in the continued election of members to a city council from one small portion of a community. “At-large” elections perpetuate the dilution of other voices. The establishment of one Hispanic district is tokenism at its worst, as the majority of the City Council continue to represent one small portion of the greater community. In addition, the “at-large” district grants four votes on the City Council to members of that district, while residents of District One have only one vote. The U S Supreme Court established that one person is to have one vote to assure equal representation. District One residents do not have an equal voice on the City Council. The Palm Desert City Council needs to pass an ordinance to establish a Citizens Redistricting Commission made up of registered voters who volunteer to serve, randomly drawn to make up a panel that represents all of Palm Desert. The Commission would be charged with drawing a map of four districts from the one "at- large" district that now exists, using the methods of the state Citizens Redistricting Commission. The resulting map would then be incorporated into the Palm Desert elections code, with district elections beginning in 2024 and in full effect in 2026. David Middleton 72799 Arboleda DR PD 92260 Page 901 [This page has intentionally been left blank.] Page 902 CITY OF PALM DESERT DEVELOPMENT SERVICES DEPARTMENT CITY COUNCIL PUBLIC HEARING MEMORANDUM To: Honorable Mayor and Members of the City Council Todd Hileman, City Manager Robert Hargreaves, City Attorney From: Rosie Lua, Planning Manager Date: February 24, 2022 Subject: City Council Ordinance No. 22- ___, approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time-Share Projects. Staff requests a continuance of the Public Hearing for the Zoning Ordinance Amendment regarding Time-Share Projects to the next City Council meeting of March 24, 2022. Page 903 [This page has intentionally been left blank.] Page 904 CITY OF PALM DESERT DEPARTMENT OF DEVELOPMENT SERVICES CITY COUNCIL STAFF REPORT DATE: February 24, 2022 PREPARED BY: Rosie Lua, Planning Manager Randy Bowman, Deputy Director of Public Works REQUEST: Consideration of a request to approve an addendum to the Mitigated Negative Declaration and amendment to Tentative Parcel Map 37157 for Monterey Crossing, an 18-acre mixed use commercial development located at the northeast corner of Monterey Avenue and Dinah Shore Drive. Recommendation Waive further reading and adopt City Council Resolution No. 2022- ___ approving the addendum to a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program and an amendment to Tentative Parcel Map 37157 (TPM 37157) Strategic Plan An 18-acre commercial development accomplishes the following Priorities listed in the Envision Palm Desert – Forward Together - Strategic Plan: 1. Economic Development – Priority 1: “Expand job and business creation opportunities.” 2. Land Use, Housing, & Open Space – Priority 1: “Enhance Palm Desert as a first- class destination for premier shopping and national retail businesses.” Executive Summary The Monterey Crossing development, located at the northeast corner of Dinah Shore Drive and Monterey Avenue, was approved by the City of Palm Desert in May 2017 for an 18-acre mixed-use commercial development. The development’s approvals included a Final Initial Study/Mitigated Negative Declaration (MND) in accordance with the California Environmental Quality Act (CEQA), including a Focused Traffic Impact Analysis (TIA). As supported by the TIA and the MND, the development was conditioned to install an eastbound triple left-turning lane along the portion of Dinah Shore Drive. The addendum to the TIA demonstrates that the required triple left turning lanes are no longer warranted; therefore, may be removed as a condition of approval. Page 905 February 24, 2022 - Staff Report Addendum to the MND & TPM 37157 Amendment for Monterey Crossing Page 2 of 6 Background Analysis A. Property Location: The 18-acre site is located at the northeast corner of Monterey Avenue and Dinah Shore Drive. B. General Plan and Zoning General Plan Land Use Designation(s): Regional Retail District Zoning Designation(s): PC – 3: Planned Regional Commercial FCOZ – Freeway Commercial Overlay Zone C. Adjacent Zoning and Land Use: North: Riverside County – Interstate 10/Union Pacific Railroad South: PC-3 – Desert Gateway Shopping Center East: SI – Service Industrial/Vacant Land West: PC-3 – Monterey Shores Shopping Center Project Description On June 8, 2017, the City Council approved the Monterey Crossings project by Ordinance No. 1323 for a Specific Plan (SP 16-188), a MND and Mitigation Monitoring and Reporting Program (MMRP) in accordance with CEQA. The City Council approved Precise Plan (PP 16-188) and Conditional Use Permit (CUP 16-188) by Resolution No. 2017-38, and TPM 37157 by Resolution No. 2017-39. The Monterey Crossings Specific Plan established a regional commercial shopping center that accommodates drive-through restaurants, shop and pad buildings, an automotive repair center, a potential automotive dealership, and a four-story hotel. The project area is bounded by Monterey Avenue to the west, Dinah Shore Drive to the south and southeast, and Union Pacific Railroad to the north. Monterey Avenue and Dinah Shore Drive are public roads built out to their ultimate configuration. There is no vehicular access into the project site from Monterey Avenue. The project site includes three (3) vehicular access points into the project on Dinah Shore. One of the driveway alignments occurs at the intersection of Dinah Shore Drive and Toni Way, one east of that intersection, and another at the southeast corner of the project. The Dinah Shore Drive and Toni Way intersection is signalized and will be improved to accommodate two left-turn pockets from Dinah Shore Drive into the project site. The southeast project entry will also have an unprotected left turn in from Dinah Shore Drive, while the middle project entry is limited to Page 906 February 24, 2022 - Staff Report Addendum to the MND & TPM 37157 Amendment for Monterey Crossing Page 3 of 6 right-in and right-out vehicular movements. Dinah Shore Drive will also be improved to accommodate new sidewalks and landscape along the project perimeter. Tentative Parcel Map No. 37157 subdivided the project site into 11 parcels, each parcel containing at least one building pad and parking facilities. Reciprocal access and parking easements were required for all 11 parcels. For off-site improvement requirements, the conditions of approval were listed in Condition No. 12 of Resolution No. 2017-39 as follows: (a) Traffic signal modification at Toni Way and Dinah Shore Drive (b) Construction of an eight-foot (8’) curb adjacent sidewalk on Dinah Shore (c) Median modification on Dina Shore Drive (d) Traffic Signal vehicle detection and striping modification on Dinah Shore Drive for an eastbound triple left-turn and dual westbound left turn lanes on Monterey Avenue The above-listed conditions of approval are mitigation measures of the approved MND supported by the updated Focused Traffic Impact Analysis (TIA) report by Linscott, Law, & Greenspan, Engineers, LLC dated January 23, 2017. The TIA was prepared based on the analysis of potential impact evaluated in the context of cumulative impacts of all ongoing development in 2016, General Plan Circulation Element, General Plan Environmental Impact Report (EIR), and the Institute of Transportation Engineers 9th Edition Trip Generation Manual (2012). The mitigation in question is Condition of Approval No. 12 (d), and more specifically related to the striping modification of an “eastbound triple left turn.” All remaining conditions (a) through (c) have been fulfilled. This condition (d) relates to the 2016 General Plan EIR’s traffic analysis mitigation measure to create an eastbound triple left turn lane configuration at the intersection of Monterey Avenue and Dinah Shore Drive to address eastbound Dinah Shore Drive operations that project to be degraded to the Level of Service (LOS) E with projected 2040 conditions. The eastbound through lanes of Dinah Shore Drive west of the intersection are completely within the jurisdiction of Rancho Mirage while the eastbound turn lanes are shared jurisdiction between Palm Desert and Rancho Mirage. The City of Rancho Mirage has withheld approval of the plans to execute the required left-turn lanes; however, no concerns were raised at any time prior to the approval of this condition. In November 2021, after the Applicant attempted to obtain their encroachment permit approval through the City of Rancho Mirage to complete the triple left turn lane improvements within their jurisdiction, the Public Works Director of Ranch Mirage contacted the City to express their concern regarding the proposed installation of the triple left turn lane onto Monterey Avenue. In light of concerns by Rancho Mirage regarding the triple left improvement, the City contracted with Kimley-Horn Associates to provide a technical report that analyzed the traffic impacts of the proposed Monterey Crossing project under various traffic scenarios, including the data from the approved TIA of 2016, the City of Rancho Mirage’s General Plan traffic mitigation measures, and current 2021 traffic conditions. In its report, Kimley-Horn Associates concluded that the Monterey Crossing project does not cause the intersection of Dinah Shore Drive and Monterey Avenue to reach an Page 907 February 24, 2022 - Staff Report Addendum to the MND & TPM 37157 Amendment for Monterey Crossing Page 4 of 6 unacceptable level (LOS E) at the buildout of the project. Therefore, staff is recommending the development conditions of approval be amended to remove this requirement. The issue raised by Rancho Mirage points to a need for both communities to collaborate on improving operations and safety in area of the intersection of Monterey Avenue and Dinah Shore Drive. Palm Desert and Rancho Mirage staff are preparing to review the intersection of Monterey Avenue and Dinah Shore Drive for capacity and safety improvements. Palm Desert completed its Local Roadway Safety Plan (LRSP) in 2021, which identified the intersection as having the second-highest number of crashes in the City. Palm Desert was successful in obtaining $2.2 million in Highway Safety Improvement Program (HSIP) grant funding last year as an outcome of the LRSP. A portion of the grant will be invested in safety improvements at the intersection for crosswalks and traffic signal equipment. Rancho Mirage is conducting its own LRSP and will be coordinating its development with Palm Desert. Staff from both communities are collaborating on the LRSP and HSIP projects and have agreed to study additional improvements to mitigate capacity issues through Palm Desert’s Intersection Capacity and Traffic Operations Improvements program, which City Council funded in 2021. Analysis A. Environmental Analysis: The recommendation for removal of the requirement for a triple left turn lane on the Monterey Crossings project does not affect the 2016 City of Palm Desert’s EIR mitigation measure that states that “the City of Palm Desert will monitor operations at these facilities. Mitigation measures will be implemented when operations at these intersections reach unacceptable levels….” While the intersection has not reached the unacceptable traffic levels to warrant a triple left on Dinah Shore, the General Plan EIR will remain unchanged recommending a triple left turn by 2040. In addition, according to Section 15162 through 15164, CEQA Guidelines provide that an addendum to a previously adopted MND may be prepared if only minor technical changes or additions to the project are necessary or none of the conditions described in CEQA Guidelines Section 15162 call for the preparation of a subsequent environmental impact report or MND have occurred; and the Addendum to the Mitigated Negative Declaration demonstrates that: (a) there are no substantial changes proposed by the revised project or in the circumstances in which the project will be undertaken that require major revisions of the MND; (b) the proposed revisions do not require preparation of a new subsequent or supplemental MND, either due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and (c) the revised project is consistent with the previous MND and would involve only minor changes. Therefore, the technical report provided by Kimley Horn dated January 11, 2022, meets the criteria for preparation of an MND Addendum as the appropriate CEQA document and indicate that the changes to the MND made by the Addendum do not raise important new issues about the significant effects on the environment. Page 908 February 24, 2022 - Staff Report Addendum to the MND & TPM 37157 Amendment for Monterey Crossing Page 5 of 6 B. Tentative Parcel Map: Since the conditions of approval for the TPM No. 37157 included those mitigation measures within the MND, the conclusion that the triple left turning lane is no longer warranted and the addendum to the MND will be prepared to reflect that the Condition of Approval No. 12 (d) of Resolution No. 2017-39 may eliminate the triple left lane requirement. Public Input No public comments have been received prior to finalizing this staff report. Environmental Review For the purposes of CEQA, an addendum to the MND has been prepared in accordance with Section 15162 through 15164 and meets the criteria set forth that no substantial changes or circumstances have occurred, no new environmental affects have been identified, and the revision of this project remains consistent with the approved MND. Conclusion Staff recommends the City Council approve a resolution adopting the Addendum to the MND and approve the amendment to the TPM 37157 removing the condition of approval to install a triple left lane on Dinah Shore Drive for the Monterey Crossings project Findings of Approval Findings in support of the project can be made and are provided in the Resolutions attached to this staff report. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER RH Robert W. Hargreaves City Attorney Martin Alvarez Martin Alvarez, Dir. of Development Services N/A Janet Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager, Todd Hileman: LL. Todd Hileman APPLICANT: Fountainhead Shrugged, LLC c/o: Ms. Vasanthi Okuma 1401 Quail Street, Suite 100 Newport Beach, CA 92660 Page 909 February 24, 2022 - Staff Report Addendum to the MND & TPM 37157 Amendment for Monterey Crossing Page 6 of 6 ATTACHMENTS: 1. Draft Resolution No. ______ 2. Legal Notice 3. Addendum to Mitigated Negative Declaration & Updated TIA Analysis dated January 11, 2022, by Kimley Horn 4. Resolution No. 2017-39, Tentative Tract Map No. 37157 5. Approved Mitigated Negative Declaration Page 910 RESOLUTION NO. 2017-____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING THE ADDENDUM TO THE MITIGATED NEGATIVE DECLARATION AND AMENDED TENTATIVE PARCEL MAP 37157 FOR THE MONTEREY CROSSING PROJECT, LOCATED AT THE NORTHEAST CORNER OF MONTEREY AVENUE AND DINAH SHORE DRIVE CASE NO: TPM 37157 WHEREAS, the City Council of the City of Palm Desert, California, did on the 25th day of May 2017, hold a duly noticed public hearing approving the request by Fountainhead Shrugged, LLC, for approval by Resolution No. 2017-39 of the above noted Tentative Parcel Map (TPM); and WHEREAS,the City Council adopted the Monterey Crossings Specific Plan and approved an Initial Study/Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program pursuant to the State California Environmental Quality Act (CEQA) Guidelines by Ordinance No. 1323 on the 8 th day of June 2017; and WHEREAS,an addendum to the Mitigated Negative Declaration has been prepared pursuant to CEQA according to Section 15162 through 15164 which does not raise important new issues or significant effects on the environment; and WHEREAS, the Applicant submitted a request to amend the conditions of approval for the revised project; more specifically, Condition No. 12 (a) of Resolution No. 2017-39 related to a striping modification on Dinah Shore Drive for an eastbound triple left turn lanes and provided an updated Focused Traffic Impact Report (TIA) for the addendum to the Mitigated Negative Declaration for the project; and WHEREAS, the City Council of the City of Palm Desert, California, did on the 24th day of February, 2022, hold a duly noticed public hearing to consider the request for approval of the addendum to the Mitigated Negative Declaration (MND) and the TPM amendment; and WHEREAS, all of the findings, recommendations, and conclusions made by the City Council pursuant to this Resolution are based upon the oral and written evidence presented to it as a whole and not based solely on the information provided in this Resolution; and WHEREAS, prior to taking action, the City Council has heard, been presented with, reviewed, and considered all of the information and data in the administrative record, including by not limited to the findings of the addendum to the MND and TPM amendment, all of which is incorporated herein by this reference; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. Page 911 2 RESOLUTION NO. _______ (Amendment) WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, the City Council did find the following facts and reasons to exist to justify the approval of said request: 1. The amendment does not propose any changes to the Monterey Crossing Specific Plan, as proposed, is consistent with the goals and policies of the Palm Desert General Plan. 2. That the amendment to the Tentative Parcel Map is not detrimental to the public health, safety or general welfare, or be materially injurious to the surrounding properties or improvements in the City of Palm Desert. 3. The Tentative Parcel Map has complied with the provisions of the California Environmental Quality Act in that an addendum to the Mitigated Negative Declaration has been prepared for the project and all potentially significant environmental impacts have been analyzed. In addition, according to Section 15162 through 15164, CEQA Guidelines it provides that an addendum to a previously adopted MND may be prepared if only minor technical changes or additions to the project are necessary or none of the conditions described in CEQA Guidelines Section 15162 call for the preparation of a subsequent environmental impact report or MND have occurred; and the Addendum to the Mitigated Negative Declaration demonstrates that: (a) there are no substantial changes proposed by the revised project or in the circumstances in which the project will be undertaken that require major revisions of the MND; (b) the proposed revisions do not require preparation of a new subsequent or supplemental MND, either due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and (c) the revised project is consistent with the previous MND and would involve only minor changes. Therefore, the technical report provided by Kimley Horn dated January 11, 2022, meets the criteria for preparation of an MND Addendum as the appropriate CEQA document and indicate that the changes to the MND made by the Addendum do not raise important new issues about the significant effects on the environment. FINDINGS FOR APPROVAL: 1. That the density of the proposed subdivision is consistent with applicable general and specific plans. The amendment to the project does not propose changes to the density of the subdivision, therefore, the project continues to be consistent to the general plan and specific plan. Page 912 3 RESOLUTION NO. _______ (Amendment) 2. That the design or improvement of the proposed subdivision is consistent with applicable general and specific plans. The amendment to the project design and improvements of the parcel map have been reviewed by the Planning Department, Fire Department, and Public Works Department for consistency with the General Plan and emergency services. 3. That the site is physically suitable for the type of development. The amendment to the project includes the removal of a requirement to stripe a third lane on Dinah Shore as provided in the updated Focused Traffic Impact Report which results found that the removal does not affect the project’s suitability of the development of the 18-acre site. 4. That the site is physically suitable for the proposed density of development. The amendment to the project site remains physically suitable for the intensity of the development. 5. That the design of the subdivision and the proposed improvements are not likely to cause substantial environmental damage or substantial and unavoidable injury to fish or wildlife or their habitat. The amendment to the project does not affect the design of the subdivision and the improvements are not likely to cause substantial environmental damage or substantial and unavoidable injury to fish or wildlife or their habitat. 6. That the design of the subdivision or the type of improvements is not likely to cause serious public health problems. The amended design and layout of the parcel map are in compliance with all grading, drainage, shared vehicle access and parking requirements and the properties will be developed in accordance with the Uniform California Building Code. 7. That the design of the subdivision or the type of improvements will not conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. The amended design of the project and type of improvements will not conflict with easements, acquired by the public at large, for access through or use of property within the subdivision. Page 913 4 RESOLUTION NO. _______ (Amendment) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: 1. That the above recitations are true and correct and constitute the findings of the City Council in this case. 2. That the City Council does hereby approve the amendment to Tentative Parcel Map 37157 and approve the addendum to the MND as proposed. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 24th day of February 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ________________________________ JAN HARNIK, MAYOR ATTEST: __________________________________ CITY CLERK CITY OF PALM DESERT, CALIFORNIA Page 914 5 RESOLUTION NO. _______ (Amendment) CONDITIONS OF APPROVAL CASE NO: TPM 37157 Amendment 1. Condition of Approval 12 (d) of Resolution No. 2017-83 is to be revised as the following: 12. Prior to City Council approval of final parcel map 37157, the applicant shall enter into an agreement and post security, in a form and amount acceptable to the City Engineer, guaranteeing the construction of all off -site improvements including but are not limited to: (d) “Traffic signal vehicle detection on Dinah Shore Drive and dual westbound left turn lanes on Monterey Avenue.” 2. All remaining conditions of approval as stated in Resolution No. 2017-83 approved by City Council on May 25, 2017, will remain effective. Page 915 CITY OF PALM DESERT LEGAL NOTICE NOTICE OF A PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF PALM DESERT TO CONSIDER APPROVAL FOR AN ADDENDUM TO THE MITIGATED NEGATIVE DECLARATION AND AN AMENDMENT TO TENTATIVE PARCEL MAP 37157 FOR THE MONTEREY CROSSING PROJECT, AN 18-ACRE COMMERCIAL DEVELOPMENT BOUNDED BY DINAH SHORE DRIVE TO THE SOUTH, MONTEREY AVENUE TO THE WEST, AND UNION PACIFIC RAILROAD TO THE NORTH AND EAST 7KH&LW\RI3DOP'HVHUW &LW\ LQLWVFDSDFLW\DVWKH/HDG$JHQF\IRUWKLVSURMHFWXQGHUWKH &DOLIRUQLD(QYLURQPHQWDO4XDOLW\$FW &(4$ KDVUHYLHZHGDQGFRQVLGHUHGWKHSURSRVHGSURMHFW DQGKDVGHWHUPLQHGWKDWDQ\SRWHQWLDOO\VLJQLILFDQWLPSDFWVFDQEHPLWLJDWHGWRDOHVVWKDQ VLJQLILFDQWOHYHODQGWKDWDPLWLJDWHGQHJDWLYHGHFODUDWLRQKDVEHHQDGRSWHGIRUWKLVSURMHFW Project Location/Description: 3URMHFW/RFDWLRQ 7KHSURMHFWLVORFDWHGDWWKHQRUWKHDVWFRUQHURI'LQDK6KRUH'ULYHDQG0RQWHUH\ $YHQXHDQGLVERXQGHGE\'LQDK6KRUH'ULYHWRWKHVRXWK0RQWHUH\$YHQXHWRWKHZHVWDQG 8QLRQ3DFLILF5DLOURDGWRWKHQRUWKDQGHDVW 3URMHFW'HVFULSWLRQ 7KH0RQWHUH\&URVVLQJGHYHORSPHQWORFDWHGDWWKHQRUWKHDVWFRUQHURI 'LQDK6KRUH'ULYHDQG0RQWHUH\$YHQXHZDVDSSURYHGE\WKH&LW\RI3DOP'HVHUWLQIRU DQDFUHPL[HGXVHFRPPHUFLDOGHYHORSPHQW7KHGHYHORSPHQW¶VDSSURYDOVLQFOXGHGD)LQDO ,QLWLDO 6WXG\0LWLJDWHG 1HJDWLYH 'HFODUDWLRQ 01' LQ DFFRUGDQFH ZLWK WKH &DOLIRUQLD (QYLURQPHQWDO 4XDOLW\ $FW &(4$ LQFOXGLQJ D )RFXVHG 7UDIILF ,PSDFW $QDO\VLV 7,$ $V VXSSRUWHGE\WKH7,$DQGWKH01'WKHGHYHORSPHQWZDVFRQGLWLRQHGWRLQVWDOODQHDVWERXQG WULSOH OHIWWXUQLQJ ODQH DORQJ WKH SRUWLRQ RI 'LQDK 6KRUH 'ULYH 7KH DGGHQGXP WR WKH 7,$ GHPRQVWUDWHVWKDWWKHUHTXLUHGWULSOHOHIWWXUQLQJODQHLVQRORQJHUZDUUDQWHG WKHUHIRUHPD\EH UHPRYHGDVDFRQGLWLRQRIDSSURYDO Recommendation: &LW\&RXQFLOWRDSSURYHDQDGGHQGXPWRD0LWLJDWHG1HJDWLYH'HFODUDWLRQ DQG0LWLJDWLRQ0RQLWRULQJDQG5HSRUWLQJ3URJUDPDQGDQDPHQGPHQWWR7HQWDWLYH3DUFHO0DS Public Hearing: 7KHSXEOLFKHDULQJZLOOEHKHOGEHIRUHWKH&LW\&RXQFLORQ)HEUXDU\DW SPYLD=RRP7KHKHDULQJZLOOEHFRQGXFWHGLQDFFRUGDQFHZLWKWKH&LW\¶VHPHUJHQF\ SURWRFROVIRUVRFLDOGLVWDQFLQJ2SWLRQVIRUUHPRWHSDUWLFLSDWLRQZLOOEHOLVWHGRQWKH3RVWHG$JHQGD IRU WKH PHHWLQJ DW https://www.cityofpalmdesert.org/our-city/mayor-and-city-council-/city-council- meeting-information-center. Comment Period:7KHSXEOLFFRPPHQWSHULRGIRUWKLVSURMHFWLVIURPFebruary 14, 2022WR February 24, 2022. Public Review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age 916 Addendum to the Initial Study and Mitigated Negative Declaration for the Monterey Crossings Project 1.0 INTRODUCTION This environmental document is an Addendum to Monterey Crossings Project Initial Study/Mitigated Negative Declaration (IS/MND), adopted in June 8, 2017 by the City of Palm Desert. Since adoption of the IS/MND, changes to the offsite improvements for the previously approved project have been proposed (i.e. removal of the requirement to install an eastbound triple left-turning lane along the portion of Dinah Shore Drive), thus requiring further environmental analysis. The proposed changes to the site plan and proposed onsite uses are addressed in this Addendum. As demonstrated in this Addendum, the IS/MND continues to serve as the appropriate document addressing the environmental impacts of these improvements pursuant to the California Environmental Quality Act (CEQA). 1.1 BACKGROUND The IS/MND was prepared to address construction-level and operational impacts of the proposed Monterey Crossings project, which included a regional commercial shopping center that accommodates drive-through restaurants, shop and pad buildings, an automotive repair center, a potential automotive dealership, and a four-story hotel uses at the northeast corner of Monterey Avenue and Dinah Shore Drive (“the Project”). The environmental analysis in the IS/MND addressed the various topics and mandatory findings of significance. All impacts in the IS/MND have been mitigated to below a level of significance through the implementation of mitigation measures. Since adoption of the IS/MND, there has been a reconsideration of the offsite improvements including the striping of the triple left lanes eastbound on Dinah Shore. However, overall, the development of the Monterey Crossings Project as proposed in the original Project would remain consistent with the uses, square footage, building heights, and overall layout as it was approved in 2017. This refinement is described in Section 2.0 of this document and is the subject of this Addendum. 1.2 PURPOSE OF ADDENDUM TO THE IS/MND When a proposed project is changed or there are changes in the environmental setting, a determination must be made by the Lead Agency as to whether an Addendum or Subsequent EIR or MND is prepared. CEQA Guidelines Sections 15162 and 15164 sets forth criteria to assess which environmental document is appropriate. The criteria for determining whether an Addendum or Subsequent MND is prepared are outlined below. If the criteria below are true, then an Addendum is the appropriate document: 1) No new significant impacts will result from the project or from new mitigation measures; 2) No substantial increase in the severity of environmental impact will occur; and 3) No new feasible alternatives or mitigation measures that would reduce impacts previously found not to be feasible have, in fact, been found to be feasible. Based upon the information provided in Section 3.0 of this document, the changes to the approved Project will not Page 917 Addendum to IS/MND for the Monterey Crossing Project Page 2 result in new significant impacts or substantially increase the severity of impacts previously identified in the IS/MND, and there are no previously infeasible alternatives that are now feasible. None of the other factors set forth in Section 15162(a)(3) are present. Therefore, an Addendum is appropriate, and this Addendum has been prepared to address the environmental effects of the refinement to the project. This Addendum addresses the environmental effects associated only with refinement to the approved Project that have occurred since adoption of the IS/MND. The conclusions of the analysis in this Addendum remain consistent with those made in the IS/MND. No new significant impacts will result, and no substantial increase in the severity of impacts will result from those previously identified in the IS/MND. 2.0 PROJECT DESCRIPTION The modified Project includes the originally land uses consisting of a Specific Plan to establish the land use, design standards and guidelines for the site; a Precise Plan for a proposed multi-building project on the site; a Conditional Use Permit application for hotel and automotive uses; and a Tentative Vesting Parcel Map and Waiver of Parcel Map to subdivide the site into multiple parcels consistent with the Specific Plan and site plan layout. The refinement to the project includes the removal of the mitigation measure to install striping for triple left turn lanes eastbound on Dinah Shore Drive. Additional project details are described below under Section 2.2. 2.1 PROJECT LOCATION AND SETTING The approximately 18-acre project site is located at the northeast corner of Monterey Avenue and Dinah Shore Drive within the City of Palm Desert. The project site is currently under construction of on-site and offsite improvements of the approved project. The perimeter wall was built around parcel number 694-060-010 between 2004 and 2005 which is still present including the wall around the well site at its southeastern corner. Monterey Avenue rises significantly along the property boundary, to cross over the I-10 and railroad rights-of-way. As a result, the project site occurs at a lower elevation than most of Monterey Avenue. Dinah Shore Drive is fully developed to the south of the site, including a free right turn at its northwestern intersection with Monterey Avenue. The project area is bounded by Monterey Avenue to the west, Dinah Shore Drive to the south and southeast, and Union Pacific Railroad to the north. Monterey Avenue and Dinah Shore Drive are public roads built out to their ultimate configuration. The project site includes three (3) vehicular access points into the project on Dinah Shore. One of the driveway alignments occurs at the intersection of Dinah Shore Drive and Toni Way, one east of that intersection, and another at the southeast corner of the project. The Dinah Shore Drive and Toni Way intersection is signalized and will be improved to accommodate two left-turn pockets from Dinah Shore Drive into the project site. The southeast project entry will also have an unprotected left turn in from Dinah Shore Drive, while the middle project entry is limited to right-in and right-out vehicular movements. There is no vehicular access into the project site from Monterey Avenue. Page 918 Addendum to IS/MND for the Monterey Crossing Project Page 3 2.2 PROJECT MODIFICATIONS SINCE IS/MND ADOPTION The IS/MND for the Approved Project describes the development as a whole. Subsequent to the approval of the IS/MND, the City of Palm Desert (“City”), determined that modifications to the Approved Project would be appropriate. The City contracted the services of Kimley-Horn & Associates to review the originally approved Traffic Impact Analysis to analyze the eastbound triple left turn onto Dinah Shore Drive. The results of the Focused Traffic Impact Analysis (TIA) technical report dated January 11, 20221 determined that the elimination of the “eastbound triple left turn” on Dinah Shore Drive was warranted. The recommendation for removal of the requirement for a triple left turn lane on the Monterey Crossings project does not affect the 2016 City of Palm Desert’s EIR mitigation measure that states that “the City of Palm Desert will monitor operations at these facilities. Mitigation measures will be implemented when operations at these intersections reach unacceptable levels….” While the intersection has not reached the unacceptable traffic levels to warrant a triple left on Dinah Shore; the General Plan EIR will remain unchanged recommending a triple left turn by 2040. 3.0 ENVIRONMENTAL ANALYSIS As explained in Section 1.0, this comparative analysis has been undertaken pursuant to the provisions of CEQA Sections 15162 and 15164 to provide the City with the factual basis for determining whether any changes in the project, any changes in circumstances, or any new information since the IS/MND was certified require additional environmental review or preparation of a Subsequent MND or EIR to the IS/MND previously prepared. As described in Section 2.0, Project Description, refinement to the project's proposed offsite improvement plan has occurred since the preparation and adoption of the IS/MND. Because of this, new analysis for impact within the project area is provided in this Addendum. It is important to note that the proposed Modified Project would not result in ground disturbance or construction activities beyond the area analyzed in the IS/MND for the Approved Project. The only proposed change relates to the elimination of the eastbound triple left lane. The environmental analysis provided in the IS/MND remains current and applicable to the proposed project in areas unaffected by the refinement for the environmental topics, as listed below: Transportation/Traffic:The Modified Project would not have impacts to transportation/traffic as identified in the IS/MND because the operational use of the Modified Project will not have effects to the Approved Project. The mitigation measures of the approved MND supported by the updated Focused Traffic Impact Analysis (TIA) report by Linscott, Law, & Greenspan, Engineers, LLC dated January 23, 2017. The TIA was prepared based on the analysis of potential impact evaluated in the context of cumulative impacts of all ongoing development in 2016, General Plan Circulation Element, General Plan Environmental Impact Report (EIR), and the Institute of Transportation Engineers 9th Edition Trip Generation Manual (2012). This mitigation measure relates to the 2016 General Plan 1 Technical Memorandum updated Focused Traffic Impact Analysis (TIA) prepared by Kimley-Horn & Associates dated January 11, 2022 Page 919 Addendum to IS/MND for the Monterey Crossing Project Page 4 EIR’s traffic analysis mitigation measure to create an eastbound triple left turn lane configuration at the intersection of Monterey Avenue and Dinah Shore Drive to address eastbound Dinah shore Drive operations project to be degraded to the Level of Service (LOS) E with projected 2040 conditions. The eastbound through lanes of Dinah Shore Drive west of the intersection are completely within the jurisdiction of Rancho Mirage while the eastbound turn lanes are shared jurisdiction between Palm Desert and Rancho Mirage. The City of Rancho Mirage did not raise concerns prior to the approval of the MND. The IS/MND did not identify any near term or cumulative impacts to transportation/traffic; therefore, mitigation was not required. No new mitigation measures are required. 3.1 SUMMARY OF FINDINGS Based on the information provided above, the proposed modifications to the Approved Project would not result in a measurable increase in environmental impacts over what was previously analyzed in the IS/MND, following the elimination of the traffic-related mitigation measure identified above. Based on the evidence included in the above analysis, the Modified Project as described in Section 2.0 would not result in a substantial change in the conclusions and analysis included in the IS/MND. The adopted MMRP for the Project shall be revised to remove the traffic mitigation measure. A copy of this document and the updated Focused Traffic Impact Analysis attached hereto is available for review at the City of Palm Desert Development Services Department at 73-510 Fred Waring Drive, Palm Desert, CA 92260. _________________________ _____________________ Rosie Lua, Planning Manager Date Page 920 Addendum to IS/MND for the Monterey Crossing Project Page 5 Attachment No. 1 Technical Memorandum updated Focused Traffic Impact Analysis (TIA) prepared by Kimley-Horn & Associates dated January 11, 2022 Page 921 TECHNICAL MEMORANDUM To: Randy Bowman, City of Palm Desert Bassam AL-Beitawi, City of Palm Desert From: Jean Fares, Kimley-Horn Rachel Tam, Kimley-Horn Kyle McGowan, Kimley-Horn Date: January 11, 2022 Subject: Monterey Avenue and Dinah Shore Drive Proposed Development Traffic Impact Study EXECUTIVE SUMMARY The purpose of this memorandum is to analyze the lane configuration for the Monterey Avenue and Dinah Shore Drive intersection; and recommend any modification to the obligation of the Monterey Crossing project with regard to implementing mitigation at the intersection. The Monterey Crossing Project prepared a Traffic Impact Analysis (TIA) and an Initial Study/Mitigated Negative Declaration. The City of Palm Desert’s project approval included the requirement to stripe a triple left turn lane for eastbound Dinah Shore Drive at Monterey Avenue. The City has questioned whether the eastbound triple left turn is required with existing and future traffic volumes at the intersection of Dinah Shore Drive and Monterey Avenue. The mitigation measure included in the developer’s TIA stems from the City of Palm Desert 2016 General Plan Update EIR traffic analysis, and would address eastbound Dinah Shore Drive operations, which were projected to degrade to LOS E with projected 2040 conditions. Subsequently, the City requested a traffic study in December 2021, which provides substantiation that the Monterey Crossing project coupled with cumulative projected traffic does not create a LOS E condition with the project. Based on this updated TIA, it is recommended the Monterey Crossing project conditions of approval be amended to remove the triple left turn requirement. Furthermore, it is recommended the City of Palm Desert and City of Rancho Mirage to collaboratively study and jointly determine an intersection lane configuration and signal operations to address efficient traffic operations along with pedestrian and vehicle safety. The City of Palm Desert 2021 Local Roadway Safety Plan (LRSP) identified this intersection as having the 2nd highest number of collisions in the Palm Desert. Page 922 Page 2 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 INTRODUCTION The purpose of this memorandum is to analyze the traffic impacts of the proposed Monterey Crossing Project under various traffic scenarios. These traffic scenarios include data from the Traffic Impact Analysis for Monterey Crossing study (Monterey Crossing study) performed by Linscott, Law & Greenspan Engineers in 2016, the City of Rancho Mirage’s General Plan traffic mitigation measures, and current 2021 traffic conditions. The proposed mixed-use development is located at the northeast corner of Monterey Avenue and Dinah Shore Drive in the City of Palm Desert. The Monterey Crossing study assumes three left-turn lanes on the eastbound (EB) approach and two left-turn lanes on the westbound (WB) approach. The Monterey Crossing study states that the “proposed left-turn pockets along Dinah Shore Drive at Monterey Avenue… will provide adequate storage and impacts to through traffic on Dinah Shore Drive will be minimal.” Figure 1 shows a map of the proposed project site location. Source: Linscott, Law and Greenspan Engineers Figure 1: Map of proposed project site location, shown in red Page 923 Page 3 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 METHODOLOGY Monterey Crossing Study Scenario Level of Service (LOS) Analysis and Comparison In the 2016 Monterey Crossing study, different analysis scenarios were studied to account for future traffic conditions, trips generated by the proposed project, and cumulative projects in the area. The study assumes an ambient traffic growth factor of 2.0% per year. The 2.0% yearly growth factor was applied over a period of three years from 2015 to 2018, resulting in a 6.0% total growth. Cumulative projects include other ongoing development projects within the vicinity of the proposed project and are not expected to have traffic impacts in the study area. For scenarios 2 and 3, the EB triple left- turn lane configuration was used to calculate LOS values. The analysis scenarios found in the study are listed below: 1. Existing (2016) 2. Existing (2016) Plus Ambient Growth (Year 2018) Plus Project 3. Existing (2016) Plus Ambient Growth (Year 2018) Plus Project with Cumulative Table 1: LOS values for analysis scenarios found in the Monterey Crossing study No. Scenario Peak Hour No. of EBL Lanes No. of WBL Lanes Intersection Delay (s/veh) Intersection LOS 1 Existing (2016) PM 2 1 49.5 D 2 Monterey Crossing (2016) Existing + Ambient Growth (2018) + Project PM 3 2 49.8 D 3 Monterey Crossing (2016) Existing + Ambient Growth (2018) + Project + Cumulative PM 3 2 54.4 D Source: Linscott, Law and Greenspan Engineers Additional Scenario LOS Analysis and Comparison To further the analysis done by the study, additional scenarios that assume an EB dual left-turn lane configuration rather than a triple left-turn lane configuration were analyzed. LOS values were evaluated using the Highway Capacity Manual (HCM) 2010 method on Synchro 11 software. Results are shown in Table 2. Page 924 Page 4 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 Table 2: LOS values for additional scenarios with dual eastbound left (EBL) and westbound left (WBL) lane configurations based on traffic volume data from the Monterey Crossing study No. Scenario Peak Hour No. of EBL Lanes No. of WBL Lanes Intersection Delay (s/veh) Intersection LOS 1 Existing (2016) PM 2 1 49.5 D 2 Monterey Crossing (2016) Existing + Ambient Growth (2018) + Project PM 2 2 55.8 E 3 Monterey Crossing (2016) Existing + Ambient Growth (2018) + Project + Cumulative PM 2 2 61.6 E The City of Rancho Mirage’s General Plan Update (2017) identifies the intersection of Monterey Avenue and Dinah Shore Drive as a critical intersection. The ideal configuration for a critical intersection identified in the City of Rancho Mirage General Plan traffic study is three through lanes, two left turn lanes and one right turn lane whenever feasible. Additional scenarios that include additional eastbound through (EBT) and westbound through (WBT) lanes and northbound right (NBR) lanes were analyzed. The Rancho Mirage General Plan’s recommendations are shown in detail in Figure 2. Traffic volumes were based on data from scenario 2, Existing (2016) Plus Ambient Growth (Year 2018) Plus Project with Cumulative, from the Monterey Crossing study. The scenarios are shown in Table 3. Page 925 Page 5 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 Source: Urban Crossroads Figure 2: City of Rancho Mirage General Plan Update recommended intersection improvements. Monterey Avenue and Dinah Shore Drive is outlined in blue. Page 926 Page 6 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 Table 3: LOS values for the City of Rancho Mirage’s recommended lane configurations based on traffic volume data from the Monterey Crossing study Existing Traffic Volumes Comparison At the intersection of Monterey Avenue and Dinah Shore Drive, traffic count data used in the 2016 Monterey Crossing study was compared with November 2021 traffic counts for the PM peak hour. All data was obtained from Counts Unlimited, Inc. Table 4 shows a comparison of the traffic volume data. Table 4: Monterey Avenue and Dinah Shore Drive PM peak hour traffic volumes for 2016 and 2021. Date Peak Hour Monterey Ave NB Monterey Ave SB Dinah Shore Dr EB Dinah Shore Dr WB NBL NBT NBR SBL SBT SBR EBL EBT EBR WBL WBT WBR November 15, 2016 4:30 PM 413 1074 32 274 823 441 603 326 349 39 362 569 November 9, 2021 3:45 PM 369 945 21 306 794 353 542 298 301 52 326 557 % Delta -11% -12% -34% 12% -4% -20% -10% -9% -14% 33% -10% -2% The traffic count data shows that on average, there has been a slight drop in traffic volumes from 2016 to 2021. The City has tracked the completion of area developments identified in the 2016 TIA, and not all developments have been constructed. The current status of these developments is shown in Table 5. In addition, and while the pandemic may contribute to a temporary drop in traffic volumes, there is no significant overall change between the two years. No. Scenario Peak Hour No. of EBL Lanes No. of WBL Lanes No. of EBT Lanes No. of WBT Lanes No. of NBR Lanes Intersection Delay (s/veh) Intersection LOS 1 Existing (2016) PM 2 1 2 2 0 49.5 D 2a Monterey Crossing (2016) Existing + Ambient Growth (2018) + Project PM 2 2 3 3 0 54.3 D 2b Monterey Crossing (2016) Existing + Ambient Growth (2018) + Project PM 2 2 2 2 1 53.1 D 2c Monterey Crossing (2016) Existing + Ambient Growth (2018) + Project PM 2 2 3 3 1 51.1 D Page 927 Page 7 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 Table 5: 2021 buildout status of developments identified in the 2016 TIA No. Description Location/Address Size % Built Out 1 Millennium Palm Desert North of Gerald Ford Drive between Portola Road and Technology Drive 228 Single-Family DU 550 DU Condominiums 152,000 SF Business Park 27-Acre Park Site 624,000 SF Commercial Retail Single-Family - 166 SFD constructed on PA 1 (72.8%) Multi-Family - 330 Apartments entitlement review on PA 7 241 Apartments under pre-app on PA 8 Business Park - 0% approved/constructed Park Site - 0% approved/constructed Commercial - PA 5 - Constructed - 58,147 SF Hotel - Approved 74,414 SF 21.2% of total 2 Marriott's Shadow Ridge 9002 Shadow Ridge 430 DU Timeshare 0% constructed 3 Starwood Vacation Ownership 39500 Portola Avenue 144 DU Timeshare 86 constructed (60%) 4 Desert Wells Between Portola/Cook/Frank Sinatra and Gerald Ford 270 SFDR 0% - Project expired 5 University Park 74255 Gerald Ford Drive 244 SFDR 0% - Project expired 6 Catavina 38301 Portola Avenue 159 SFDR 0% - Project expired 7 Ponderosa II South side of Dick Kelly Drive, between Cortesia Way and Dinah Shore Drive 111 SFDR 100% - Project under construction 8 Villa Portofino SWC Country Club Drive and Portola Avenue 161 bed skilled nursing facility 150 bed assisted living facility 470 DU condominium/townhomes 161 active senior apartments - 100% constructed 150 bed assisted living facility - 100% constructed 470 unit condominium - 145 under (30.8%) 9 Gallery 74000 Gerald Ford Drive 237 DU SFDR 100% - Project constructed 10 Dolce NEC Gerald Ford Drive and Gateway 159 DU SFDR 100% - Under construction 11 Encore 36333 Portola Avenue 32 DU SFDR 100% - Under construction 12 University Park South of Gerald Ford, east of Portola and West of Cook 1069 DU (623 SFDR, 110 Condo, 336 Apartment) 37.8% - Under construction 13 Lennar 196 South of College Drive and north of University Park Drive 196 DU 100% - Under construction Source: City of Palm Desert Page 928 Page 8 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 Monterey Crossing Proposed Project Traffic Impact The Monterey Crossing study calculated the number of trips generated due to the proposed project for the PM peak hour, which is displayed in Table 5. Table 5: PM peak hour project traffic volumes at Monterey Avenue and Dinah Shore Drive Peak Hour Monterey Ave NB Monterey Ave SB Dinah Shore Dr EB Dinah Shore Dr WB NBL NBT NBR SBL SBT SBR EBL EBT EBR WBL WBT WBR PM 0 0 76 87 0 0 0 22 0 77 22 88 To see if the project would have an impact on current 2021 traffic conditions, an LOS analysis was conducted using the HCM 2010 method interface on Synchro 11 software. Since HCM 2010 is the method used in the Monterey Crossing study, the HCM 2010 method was used for this analysis to maintain consistency. An eastbound dual left lane configuration was used rather than the eastbound triple left lane configuration that was used in the Monterey Crossing study analysis. The LOS analysis compares two scenarios: Existing 2021 PM Peak Hour Traffic Conditions and Existing 2021 PM Peak Hour Traffic Conditions Plus Project. The analysis results are shown in Table 6. Table 6: LOS values for current traffic condition scenarios based on 2021 traffic volume data Scenario Peak Hour No. of EBL Lanes No. of WBL Lanes Intersection Delay (s/veh) Intersection LOS Existing (2021) PM 2 2 43.2 D Existing (2021) + Project PM 2 2 46.9 D The results show that the intersection LOS remains the same with an increase in delay. The City of Palm Desert states that LOS must not exceed D at an intersection. Therefore, the project does not have a significant impact on traffic conditions at the intersection since the intersection LOS still meets the City of Palm Desert’s criteria. City of Palm Desert General Plan EIR Analysis In the City’s General Plan EIR, the Level of Service Analysis shows the intersection of Dinah Shore Drive & Monterey Avenue operating at an LOS E in Buildout Year (2040). See Figure 3 below. A triple left turn in the EB direction is identified as a mitigation measure in the EIR. Page 929 Page 9 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 Source: City of Palm Desert Figure 3: Draft General Plan EIR 2040 LOS Analysis Safety and Collision Analysis According to the Palm Desert Local Road Safety Program (LRSP) conducted by Kimley-Horn and Associates, Inc. in 2021, Monterey Avenue and Dinah Shore Drive is the intersection with the second- highest number of collisions within the City of Palm Desert. From 2015 to 2019, there have been 57 collisions with most occurring at the center of the intersection. This intersection also had the highest level of injury in the City with an Equivalent Property Damage Only (EPDO) factor of 688. Table 7 below shows the breakdown of collisions by injury, type, and other factors. Figure 4 shows the detailed collision diagram. The most common type of collision was rear-ends, followed by broadsides, and sideswipes. Aggressive driving behaviors such as speeding and tailgating contributed to about half of all collisions. There were 6 collisions in the study period involving drivers making the EB left- turn movement. This intersection also served as a ‘case study’ location in the City’s LRSP. Potential countermeasures identified in the LRSP included enhancing the crosswalk visibility, installing retroreflective backplates, installing advanced dilemma zone detection systems, implementing signal timing improvements, updating signal heads, and installing ‘congestion ahead’ signages. This intersection and others nearby have been recently re-timed and coordinated as part of the City of Rancho Mirage Highway Safety Improvement Plan (HSIP) project. Page 930 Page 10 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 The City of Rancho Mirage is currently drafting their Local Road Safety Plan. In order to foster cross- agency collaboration, it is recommended the City of Rancho Mirage should share the results and recommendations outlined in that report, particular in relation to the intersections & roadways that are shared with the City of Palm Desert. The intersections directly to the west of this intersection, Dinah Shore Dr & Shoppers Ln, and Dinah Shore Dr & Miriam Way, had 8 collisions and 2 collisions, respectively. According to the City’s Engineering & Traffic Survey, Average Daily Traffic along Dinah Shore at these intersections is 22,670. Table 7: Collisions at Monterey Avenue and Dinah Shore Drive (2015-2019) Number of Crashes (2015- 2019) Fatal Serious Injury Other Visible Injury Complaint of Pain PDO Broadside Sideswipe Rear End Head On Hit Object Overturned Other Pedestrian Bicycle Aggressive Distracted Impaired Dark Wet 57 0 3 4 20 30 15 14 19 2 2 1 0 2 1 28 1 0 0 3 Figure 4: Collision diagram of Monterey Avenue and Dinah Shore Drive Page 931 Page 11 kimley-horn.com 45-025 Manitou Drive Suite 11, Indian Wells, CA 92210 760-565-5103 CONCLUSION Overall, the 2016 City of Palm Desert General Plan EIR’s mitigation measure to create an eastbound triple left turn lane configuration at the intersection of Monterey Avenue and Dinah Shore Drive may not be necessary to address traffic impacts caused by the project. As the Draft EIR notes, “the City of Palm Desert will monitor operations at these facilities. Mitigation measures will be implemented when operations at these intersections reach unacceptable levels….” The Monterey Crossing project updated analysis demonstrates that a triple left turn is not necessary with implementation of the Monterey Crossing project. As the above traffic trip generation and Synchro analysis demonstrates, the project does not generate a substantive traffic volume increase and will not degrade to LOS E. The Monterey Crossing project does not impact eastbound Dinah Shore Drive requiring implementation of a triple left turn; therefore, the condition of approval is recommended to be amended to remove this requirement. Separately, there are notable safety concerns based on the existing traffic conditions at the intersection. To improve traffic conditions and safety at the intersection, it is recommended that both cities should investigate safety and capacity improvements at the intersection location and within the surrounding roadway network. Page 932 Page 933 Page 934 Page 935 Page 936 Page 937 Page 938 -1- CITY OF PALM DESERT CEQA Environmental Checklist & Environmental Assessment Project Title: Monterey Crossing, Specific Plan 16-166 Conditional Use Permit 16-166 Tentative Vesting Parcel Map 37157 Waiver of Parcel Map 16-166 Lead agency name and address:City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Contact persons and phone number: Eric Ceja, Principal Planner 760-346-0611 Project location:The northeast corner of Monterey Avenue and Dinah Shore Drive. Project sponsor’s name and address: Fountainhead Shrugged, LLC Vasanthi Okuma 1401 Quail Street Suite 100 Newport Beach, CA 92660 General Plan Designation: Regional Commercial (C-R) Zoning: Planned Regional Commercial (PC3) Freeway Commercial Overlay (FCOZ) Description of project: (Describe the whole action involved, including but not limited to later phases of the project, and any secondary, support, or off-site features necessary for its implementation. Attach additional sheets if necessary.) The proposed project is a commercial development comprised of a four story hotel building with 130 hotel rooms; and 73,200 square feet of single story commercial development comprised of a 6,815-square-foot automobile sales building, car wash and sales lot, an 12,185 square-foot tire store, two multi-tenant retail/restaurant buildings totaling 14,400 square feet, three fast-food restaurants with drive-through service totaling 11,200-square feet, and three contiguous buildings for retail uses totaling 28,600 square feet (See Exhibit 4; Table 1). The project is located on 17.79 acres of undeveloped land bounded by Dinah Shore Drive on the south, undeveloped desert land on the east, Monterey Avenue on the west, and the Interstate-10/Union Pacific Railroad to the north, in the City of Palm Desert, California. Access to the project site will be provided via one primary full-access driveway at Toni Drive and Dinah Shore Drive, one right-in/right-out only driveway on Dinah Shore Drive to the east of the primary entry, and one right-in/right-out/left-in only (left-turn egress is restricted) driveway at the east end of the property onto Dinah Shore Drive. Interior driveways will connect all buildings within the project site. Parking areas (651 spaces) will be provided for each building throughout the project site. An infiltration basin has been designed for the project site, located on the northern portion of the site paralleling the existing railroad tracks. The infiltration basin is a flat earthen basin and will capture the design capture volume from the site. The total capacity of the infiltration basin is approximately 14,223 cubic feet. Dry wells would be implemented throughout the project site at key locations. The project site consists of two parcels: 685-020-020 and 694-060-010. The County of Riverside owns parcel 685-020-020, and Coachella Valley Water District (CVWD) owns parcel 694-060-010. Both of these parcels together create a triangle-shaped parcel. Page 939 -2- The project site is being subdivided into 11 parcels (Tentative Parcel Map 37157) to allow mixed commercial development (hotel, restaurants, retail, and auto sales). Both a tentative and final map are required by the State Subdivision Map Act (Government Code Section 66410 et seq). The applicant has submitted “Parcel Map Waiver 16-166” along with the application package to allow the auto sales parcel to be created and to be purchased simultaneously with the closing of the property and ahead of the recordation of the parcel map. Existing Project-Site Conditions: The project site is currently undeveloped and vacant, with the exception of a walled well site at its southeastern corner. A perimeter wall was built around parcel number 694-060-010 between 2004 and 2005 which is still present. Monterey Avenue rises significantly along the property boundary, to cross over the I-10 and railroad rights-of-way. As a result, the project site occurs at a lower elevation than most of Monterey Avenue. Dinah Shore Drive is fully developed to the south of the site, including a free right turn “pork chop” at its intersection with Monterey Avenue. A CVWD sewer trunk line is located along the northern edge of the project site. A second sewer line, which enters the site at the corner of Monterey Avenue and Dinah Shore Drive and extends northeasterly to connect to the trunk line, will be relocated to Dinah Shore Drive, and will turn north into the site under the main access driveway. The site topography gently slopes at 1% towards the easterly end of the site towards an existing drainage channel which parallels the Union Pacific Railroad. A summary of the proposed building square footages and project components follows: Table 1 Monterey Crossing Proposed Building Square Footage Parcel No. Land Use Acres Stalls Required Stalls Provided Projected Building Square Footage/Hotel Rooms 1 Hotel 2.65 130 130 130 2 Retail 1.11 30 50 10,000 3 Fast Food Restaurant 0.73 24 29 3,000 4 Fast Food Restaurant 0.90 39 50 4,800 5 Retail/Restaurant 1.07 66 66 8,400 6 Retail/Restaurant 0.93 48 56 6,000 7 Fast Food Restaurant 0.85 27 32 3,400 8 Retail/tire store 1.59 12 33 12,185 9 Auto Sales 5.34 14 77 6,815 10 Retail 1.27 30 64 10,000 11 Retail 1.35 30 64 8,600 Total 17.79 450 651 73,200 s.f./ 130 rooms * Source: Monterey Crossing Site Plan by Bickel Group Architecture Zoning Standards The proposed site is currently zoned for Planned Regional Commercial (PC-3) which allows commercial Page 940 -3- development. A Conditional Use Permit (CUP) is required to allow the following uses: hotels (full service, limited service and extended stay), automotive sales (including car wash for sales lot and repair facilities), automotive repairs, automotive parts and service including tire store, medical office and laboratories, fast food restaurants with drive-through, and alcohol sales for restaurants (full service, fast casual and fast food). An additional CUP will be required to allow alcohol sales not a part of restaurant should a retail location propose alcohol sales. The City applies a Freeway Commercial Overlay Zone (FCOZ) district regulation to development close to freeways. The main purpose of FCOZ is to provide optional standards and incentives for the development of specific types of commercial uses on commercially zoned properties with freeway frontage. The site is located within the FCOZ. Project Applications The applicant has filed a Specific Plan application, to allow for variation from City zoning standards. A Conditional Use Permit has been filed to address the conditionally permitted uses in the zone. And a parcel map is proposed to subdivide the property for each land use/building proposed. Utilities and Service Providers The following utilities will provide service to the project: 1. Sewer: Coachella Valley Water District (CVWD) 2. Water: Coachella Valley Water District (CVWD) 3. Electricity: Southern California Edison (SCE) 4. Gas: Southern California Gas Company 5. Telephone: Frontier (Formally Verizon) 6. Storm Drain: City of Palm Desert Environmental Setting and Surrounding Land Uses The subject property is located in the northwesterly portion of the City. The site is undeveloped, vacant, relatively flat, and contains sparse native vegetation. Land uses nearby and adjacent to the site are mainly commercial and office uses. The nearest residential development is located approximately 0.159 miles (256 meters) northeast of the project site, on the north side of I-10. North: Union Pacific Railroad, Interstate-10 (I-10) South: Dinah Shore Drive, Commercial development East: Undeveloped desert land, SCE electrical poles, CVWD drainage and levee West: Monterey Avenue, Costco Wholesale Other public agencies whose approval is or may be required (e.g., permits, financing approval, or participation agreement.) None. Page 941 Page 942 -5- EVALUATION OF ENVIRONMENTAL IMPACTS: 1) A brief explanation is required for all answers except "No Impact" answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question. A "No Impact" answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e.g., the project falls outside a fault rupture zone). A "No Impact" answer should be explained where it is based on project-specific factors as well as general standards (e.g., the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis). 2) All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. 3) Once the lead agency has determined that a particular physical impact may occur, then the checklist answers must indicate whether the impact is potentially significant, less than significant with mitigation, or less than significant. "Potentially Significant Impact" is appropriate if there is substantial evidence that an effect may be significant. If there are one or more "Potentially Significant Impact" entries when the determination is made, an EIR is required. 4) "Negative Declaration: Less Than Significant With Mitigation Incorporated" applies where the incorporation of mitigation measures has reduced an effect from "Potentially Significant Impact" to a "Less Than Significant Impact." The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section XVII, "Earlier Analyses," may be cross-referenced). 5) Earlier analyses may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration. Section 15063(c)(3)(D). In this case, a brief discussion should identify the following: a) Earlier Analysis Used. Identify and state where they are available for review. b) Impacts Adequately Addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis. c) Mitigation Measures. For effects that are "Less than Significant with Mitigation Measures Incorporated," describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site-specific conditions for the project. 6) Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e.g., general plans, zoning ordinances). Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. 7) Supporting Information Sources: A source list should be attached, and other sources used or individuals contacted should be cited in the discussion. 8) This is only a suggested form, and lead agencies are free to use different formats; however, lead agencies should normally address the questions from this checklist that are relevant to a project's environmental effects in whatever format is selected. 9) The explanation of each issue should identify: a) the significance criteria or threshold, if any, used to evaluate each question; and b) the mitigation measure identified, if any, to reduce the impact to less than significance. Page 943 Page 944 Page 945 Page 946 Page 947 Page 948 -11- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact I. AESTHETICS -- Would the project: a) Have a substantial adverse effect on a scenic vista? X b) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? X c) Substantially degrade the existing visual character or quality of the site and its surroundings? X d) Create a new source of substantial light or glare which would adversely affect day or nighttime views in the area? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; Zoning Ordinance; Municipal Code; Project’s site plan and architectural design plans. Setting The City of Palm Desert, including the project site, is located in the Coachella Valley, surrounded by the San Bernardino, San Jacinto, and Santa Rosa Mountain Ranges in all directions. The San Bernardino, Santa Rosa, and San Jacinto Mountain Ranges have a significant rise over the valley floor and are visible from most locations in the City. The foothills of the San Bernardino Mountains extend along the northerly and easterly portion of the City, beginning approximately 2.85 miles northeast of the subject property. The foothills of the Santa Rosa and San Jacinto Mountains extend along the westerly and southerly portions of the City, beginning approximately 4.27 miles southwest of the subject property. Ultimate development of the site will result in the construction of mixed-use single story commercial buildings and a hotel of up to four stories in height. Discussion of Impacts a)Less Than Significant Impact. The subject property is located approximately 2.85 miles southwest of the San Bernardino Mountain foothills and approximately 4.27 miles east of the Santa Rosa and San Jacinto and Mountain foothills, which are considered a scenic vista for much of the Coachella Valley (See Exhibit 1 and 2). From the subject property, scenic views of the San Bernardino Mountains are to the north, northeast, and east. Views of the San Jacinto and Santa Rosa Mountains are to the south and west. Views of the lower elevations of the mountains are blocked by intervening development in all directions. However, middle and upper elevations of the mountains are visible above. Lands immediately to the east are currently undeveloped natural space (See Exhibit 2). The mountains are visible to the east and southeast, but are more distant, so their immediate scenic value is diminished. Surrounding views have been impacted to some extent by surrounding commercial development to the south and west and by the Union Pacific Railroad/Interstate-10 to the north. Currently, the subject property is vacant and undeveloped, and is surrounded by commercial buildings to the south and west, consistent with other urban development in the area in scale and Page 949 -12- height. The development of the proposed project will primarily affect scenic mountain views as seen from properties west and south of the subject site. Building height on the subject site can extend to 50 feet. The ultimate construction of mixed-use commercial buildings on the site would result in limited obstruction of views for viewers looking to the east and north from Dinah Shore Drive, insofar as four stories would result in short-range view blockage. However, views to the northwest would remain. Subdivision of assessor’s parcel numbers 685-020-020 and 694-060-010 into eleven parcels and project implementation will impact views from other properties in the project vicinity to a lesser degree. From the south and west, street level views of the Costco Wholesale and Sam’s Club will remain largely unchanged from current conditions. Building appearances and materials can be expected to be similar to existing structures in the area (See Exhibit 6, 7, 8, 9, and 10). The architectural design plan proposes hotel building heights of up to 50 feet (four stories) in Parcel 1, and up to 40 feet for the other mixed commercial planning areas (See Exhibit 6, 7, 8, 9, and 10). The proposed project will include full site improvements, including landscaping and architecturally treated buildings to enhance the site’s appearance (See Exhibit 11). Build-out of the proposed project would result in limited new obstruction to surrounding views. Proposed building appearance and materials will be consistent with surrounding development. Overall, although there will be some impact from the proposed project on short-range views to the west and south, impacts to views of scenic vistas from surrounding properties will be less than significant. b)No Impact. The project site is located south of Union Pacific Railroad/Interstate-10. It is not located within a state scenic highway or locally designated scenic corridor. It does not contain scenic resources such as rock outcroppings or trees. No impact is expected. c)Less Than Significant Impact. The project site is currently vacant and undeveloped. The ultimate commercial development of the site will result in the construction of a four-story hotel building and 30 to 40 foot high commercial buildings in a style that is expected to be consistent with the style of development in the area (See Exhibit 6, 7, 8, 9, 10). Commercial buildings to the west and south of the subject property have maximum heights of about 30 feet. For the proposed mixed-use commercial development, structure heights of up to 50 feet would be somewhat greater (up to 20 feet) than the building heights currently occurring in the immediate vicinity. Buildings to the south are located at a higher elevation than the proposed project site, and will appear consistent. Buildings to the west are located at an elevation equal to or less than the project site, but are separated by the Monterey Avenue right of way, and are of similar character. The Specific Plan zoning and design standards will be incorporated into the project to assure that project’s structure heights and associated visual impact will be less than significant. The visual character of Monterey Avenue and Dinah Shore Drive is similar to that proposed for the project, being dominated by commercial development immediately west and south of the site. The existing buildings are up to 30 feet in height (i.e. Costco Wholesale, Sam’s Club, and a gas station). The proposed project will increase the mass of the structures on Monterey Avenue and Dinah Shore Drive, but design review and the inclusion of view corridors, variations in building massing and high quality architectural treatment to the structures will improve the visual character. The impacts associated with visual character are expected to be less than significant. Page 950 -13- d)Less Than Significant Impact. The site is currently vacant and undeveloped and there is no lighting onsite. Implementation of the Specific Plan, Conditional Use Permit and Tentative Vesting Parcel Map can be expected to generate increased levels of light and glare from interior and exterior building lighting, safety and security lighting, landscape lighting, and vehicles accessing the site. However, lighting and glare levels are not expected to exceed typical levels within the surrounding urban environment, and will be regulated by the city’s lighting standards. The project will be designed according to the city’s zoning ordinance and will properly shield light fixtures to minimize spillage onto adjacent properties. The zoning ordinance and design standards will be incorporated to assure that project light and glare impacts will be less than significant. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 951 Page 952 Page 953 Page 954 Page 955 Page 956 Page 957 -20- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact II. AGRICULTURE RESOURCES: Would the project: a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to non- agricultural use? X b) Conflict with existing zoning for agricultural use, or a Williamson Act contract? X c) Conflict with existing zoning for, or cause rezoning of, forest land (as defined in Public Resources Code section 12220(g)), timberland (as defined by Public Resources Code section 4526), or timberland zoned Timberland Production (as defined by Government code section 51104(g))? X d) Result in the loss of forest land or conversion of forest land to non-forest use?X e) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of Farmland, to non-agricultural use? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; Riverside County Important Farmland Map, 2010. Setting The project site is located in an area of the City designated for commercial land use. There are no active agricultural lands within the vicinity of the project. Discussion of Impacts a-e)No Impact. Currently, the project site is designated as regional commercial (C-R) on City land use maps. According to the Riverside County Important Farmland, 2010 map, the area is considered Other Land and is not suitable for livestock grazing, confined livestock, or poultry. The site is not designated as Prime Farmland, Unique Farmland, or Farmland of Statewide or Local Importance by the California Department of Conservation. In addition, the site is surrounded by lands which are not in agricultural uses. The proposed development will not conflict with zoning for agricultural uses or a Williamson Act contract. It will not result in other changes that could result in the conversion of farmland to non-agricultural uses. There will be no impact to agricultural resources as a result of the proposed project. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 958 -21- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact III. AIR QUALITY: Would the project: a) Conflict with or obstruct implementation of the applicable air quality plan? X b) Violate any air quality standard or contribute substantially to an existing or projected air quality violation? X c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed quantitative thresholds for ozone precursors)? X d) Expose sensitive receptors to substantial pollutant concentrations? X e) Create objectionable odors affecting a substantial number of people? X Source:Palm Desert General Plan 2004; “Air Quality and Greenhouse Gas Technical Report for the NEC Dinah Shore and Monterey Avenue Development Project,” prepared by Dudek in August 2016;“Health Risk Assessment Impact Analysis” prepared by Kunzman Associates, Inc. in August 2016 Setting The project site is located in the Salton Sea Air Basin (SSAB), which is under the jurisdiction of the South Coast Air Quality Management District (SCAQMD). All development within the SSAB is subject to SCAQMD’s 2012 Air Quality Management Plan (2012 AQMP) and the 2003 Coachella Valley PM10State Implementation Plan (2003 CV PM10 SIP). The SCAQMD operates and maintains regional air quality monitoring stations at numerous locations throughout its jurisdiction. The proposed site is located within Source Receptor Area (SRA) 30, which includes monitoring stations in Palm Springs and Indio. The Indio station has been operational since 1985 and the Palm Springs station since 1987. A new station in Thermal was recently established, but has limited data collected at this time. The California Emissions Estimator Model (CalEEMod) Version 2013.2.2 was used to project air quality emissions that will be generated by the proposed project’s construction and calculate the maximum number of acres disturbed during peak hours per day using crawler tractors, graders, rubber tired dozers, and scrapers. Criteria air pollutants are contaminants for which state and federal air quality standards have been established. The Salton Sea Air Basin exceeds state and federal standards for fugitive dust (PM10) and ozone (O3), and is in attainment/unclassified for PM2.5. Ambient air quality in the SSAB, including the project site, does not exceed state and federal standards for carbon monoxide, nitrogen dioxides, sulfur dioxide, lead, sulfates, hydrogen sulfide, or Vinyl Chloride. Page 959 -22- Table 2 Ambient Air Quality Standards Pollutant Average Time California Standardsa National Standardsb Concentrationc Primaryc,d Secondaryc,e O3 1 hour 0.09 ppm (180 g/m3) — Same as Primary Standardf 8 hours 0.070 ppm (137 g/m3) 0.070 ppm (137 g/m3) f NO2g 1 hour 0.18 ppm (339 g/m3) 0.100 ppm (188 g/m3) Same as Primary Standard Annual Arithmetic Mean 0.030 ppm (57 g/m3) 0.053 ppm (100 g/m3) CO 1 hour 20 ppm (23 mg/m3) 35 ppm (40 mg/m3) None 8 hours 9.0 ppm (10 mg/m3) 9 ppm (10 mg/m3) SO2h 1 hour 0.25 ppm (655 g/m3) 0.075 ppm (196 g/m3) — 3 hours — — 0.5 ppm (1,300 g/m3) 24 hours 0.04 ppm (105 g/m3) 0.14 ppm (for certain areas)g — Annual — 0.030 ppm (for certain areas)g — PM10i 24 hours 50 g/m3 150 g/m3 Same as Primary StandardAnnual Arithmetic Mean 20 g/m3 — PM2.5i 24 hours — 35 g/m3 Same as Primary Standard Annual Arithmetic Mean 12 g/m3 12.0 g/m3 15.0 g/m3 Leadj,k 30-day Average 1.5 g/m3 — — Calendar Quarter — 1.5 g/m3 (for certain areas)k Same as Primary Standard Rolling 3-Month Average — 0.15 g/m3 Hydrogen sulfide 1-hour 0.03 ppm (42 µg/m3) — — Vinyl chloridej 24-hour 0.01 ppm (26 µg/m3) — — Sulfates 24-hour 25 µg/m3 — — Visibility reducing particles 8-hour (10:00 a.m. to 6:00 p.m. PST) Insufficient amount to produce an extinction coefficient of 0.23 per kilometer due to particles when the relative humidity is less than 70% — — Source: CARB 2016b. Notes: ppm = parts per million by volume; g/m3 = micrograms per cubic meter; mg/m3= milligrams per cubic meter.a California standards for O3, CO, SO2 (1-hour and 24-hour), NO2, suspended particulate matter—PM10, PM2.5, and visibility-reducing particles, are values that are not to be exceeded. All others are not to be equaled or exceeded. CAAQS are listed in the Table of Standards in Section 70200 of Title 17 of the California Code of Regulations.b National standards (other than O3, NO2, SO2, particulate matter, and those based on annual averages or annual arithmetic mean) are not to be exceeded more than once a year. The O3 standard is attained when the fourth highest 8-hour concentration measured at each site in a year, averaged over 3 years, is equal to or less than the standard. For PM10, the 24-hour standard is attained when the expected number of days per calendar year with a 24-hour average concentration above 150 micrograms per cubic meter (µg/m3) is equal to or Page 960 -23- less than one. For PM2.5, the 24-hour standard is attained when 98% of the daily concentrations, averaged over 3 years, are equal to or less than the standard. c Concentration expressed first in units in which it was promulgated. Equivalent units given in parentheses are based upon a reference temperature of 25° Celsius (°C) and a reference pressure of 760 torr. Most measurements of air quality are to be corrected to a reference temperature of 25°C and a reference pressure of 760 torr; ppm in this table refers to ppm by volume, or micromoles of pollutant per mole of gas.d National Primary Standards: The levels of air quality necessary, with an adequate margin of safety to protect the public health.e National Secondary Standards: The levels of air quality necessary to protect the public welfare from any known or anticipated adverse effects of a pollutant.f On October 1, 2015, the primary and secondary NAAQS for O3 were lowered from 0.075 ppm to 0.070 ppm.g To attain the 1-hour national standard, the 3-year average of the annual 98th percentile of the 1-hour daily maximum concentrations at each site must not exceed 100 parts per billion (ppb). Note that the national 1-hour standard is in units of ppb. California standards are in units of parts per million (ppm). To directly compare the national 1-hour standard to the California standards the units can be converted from ppb to ppm. In this case, the national standard of 100 ppb is identical to 0.100 ppm.h On June 2, 2010, a new 1-hour SO2 standard was established and the existing 24-hour and annual primary standards were revoked. To attain the 1-hour national standard, the 3-year average of the annual 99th percentile of the 1-hour daily maximum concentrations at each site must not exceed 75 ppb. The 1971 SO2 national standards (24-hour and annual) remain in effect until 1 year after an area is designated for the 2010 standard, except that in areas designated nonattainment of the 1971 standards, the 1971 standards remain in effect until implementation plans to attain or maintain the 2010 standards are approved. i On December 14, 2012, the national annual PM 2.5 primary standard was lowered from 15 g/m3 to 12.0 g/m3. The existing national 24- hour PM2.5 standards (primary and secondary) were retained at 35 g/m3, as was the annual secondary standard of 15 μg/m3. The existing 24-hour PM10 standards (primary and secondary) of 150 g/m3 also were retained. The form of the annual primary and secondary standards is the annual mean, averaged over 3 years.j CARB has identified lead and vinyl chloride as TACs with no threshold level of exposure for adverse health effects determined. These actions allow for the implementation of control measures at levels below the ambient concentrations specified for these pollutants.k The national standard for lead was revised on October 15, 2008, to a rolling 3-month average. The 1978 lead standard (1.5 μg/m3 as a quarterly average) remains in effect until one year after an area is designated for the 2008 standard, except that in areas designated nonattainment for the 1978 standard, the 1978 standard remains in effect until implementation plans to attain or maintain the 2008 standard are approved. The proposed project impacts may include emissions of pollutants identified as Toxic Air Contaminant (TAC). The greatest potential for TAC emissions during construction would be diesel particulate emissions from heavy equipment operations and heavy-duty trucks and the associated health impacts to sensitive receptors. The project’s proximity to the railroad and high-volume of traffic on I-10 increase the TAC hazard for sensitive receptors, including hotel guests. These air pollutants are highly toxic and may pose health risks in human beings. The major concern is that TACs may cause cancer. For this reason, a “Health Risk Assessment Impact Analysis” was prepared by Kunzman Associates, Inc. in August 2016 for the proposed project to assess the possibilities of cancer risks from diesel particulate mater (DPM) emissions associated with the Interstate-10/Union Pacific Railroad, located north of the project site. Ultimate development of the site will result in short-term impacts associated with site disturbance and construction, and long-term impacts associated with mobile emissions and facility operation. Discussion of Impacts a)No Impact. The project site is located in the Salton Sea Air Basin (SSAB) and will be subject to SCAQMD’s 2012 Air Quality Management Plan (2012 AQMP) and the 2003 Coachella Valley PM10 State Implementation Plan (2003 CV PM10 SIP). The AQMP is based, in part, on the land use plans of the jurisdictions in the region. The AQMP is a comprehensive plan that establishes control strategies and guidance on regional emission reductions for air pollutants. The proposed project is consistent with the City of Palm Desert land use designations assigned to the subject property. Therefore, the proposed project is consistent with the intent of the AQMP and will not conflict with or obstruct implementation of the applicable air quality plan. No impact associated with compliance with applicable management plans is expected. Page 961 -24- b)Less Than Significant Impact. The California Emissions Estimator Model (CalEEMod) Version 2013.2.2 was used by Dudek to project air quality emissions that will be generated by the proposed project. Criteria air pollutants will be released during both the construction and operation of the proposed project, as summarized in Tables 4 and 5. Table 4 summarizes short- term construction-related emissions, and Table 5 summarizes ongoing emissions generated during operation. Construction Emissions The construction period includes all aspects of project development, including site preparation, grading, hauling, paving, building construction, and application of architectural coatings. For analysis purposes, and to provide a conservative analysis, it is assumed that construction will occur over 18 months’ period from early 2017 to mid 2018. The assumptions used for the construction period are shown in Table 3. Table 3 Construction Scenario Assumptions Construction Phase One-way Vehicle Trips Equipment Average Daily Worker Trips Average Daily Vendor Truck Trips Total Haul Truck Trips Equipment Type Quantity Usage Hours Site Preparation 18 0 0 Rubber Tired Dozers 3 8 Tractors/Loaders/Backhoe s 4 8 Grading 20 0 0 Excavator 1 6 Grader 1 6 Rubber Tired Dozers 1 6 Scrapers 1 6 Tractors/Loaders/Backhoe s 1 6 Building Construction 340 136 0 Cranes 1 7 Forklifts 3 8 Generator Sets 1 8 Tractors/Loaders/Backhoe s 3 7 Welders 1 8 Paving 16 0 0 Pavers 2 8 Paving Equipment 2 8 Rollers 2 8 Architectural Coating 68 0 0 Air Compressors 1 6 As shown in Table 4, emissions generated by construction activities will not exceed SCAQMD thresholds for any criteria pollutant. The model was run with two assumptions: that a fugitive dust control program, as required by SCAQMD Rule 403 and the Coachella Valley SIP would be implemented, and that low VOC architectural coatings would be employed. Page 962 -25- Table 4 Estimated Maximum Daily Construction Emissions Year VOC (pounds/day) NOx (pounds/day) CO (pounds/day) SOx (pounds/day) PM10 (pounds/day) PM2.5 (pounds/day) Summer 2017 6.17 69.67 47.82 0.10 10.00 6.46 2018 38.23 33.98 43.81 0.10 6.36 2.85 Winter 2017 6.16 69.68 47.82 0.10 10.00 6.46 2018 38.22 34.28 43.27 0.10 6.36 2.85 Maximum Daily 38.23 69.68 47.82 0.10 10.00 6.46 Pollutant Threshold 75 100 550 150 150 55 Threshold Exceeded? No No No No No No Notes:These estimates reflect control of fugitive dust required by Rule 403 requiring that active sites are watered three times daily which would result in a 61% reduction of fugitive dust emissions and Rule 1113 requiring architectural coatings to have low VOC content. Operational Emissions Operational emissions are ongoing emissions that will occur over the life of the project. They include area source emissions, emissions from energy demand (electricity), and mobile source (vehicle) emissions. Traffic generation trip rates were calculated by Linscott, Law & Greenspan, Engineers (LLC). It was assumed that the project would generate approximately 7,803 daily vehicle trips. Table 5 provides a summary of projected emissions at operation of the proposed project. Page 963 -26- Table 5 Estimated Daily Maximum Operational Emissions Emission Source VOC (pounds/day) NOx (pounds/day) CO (pounds/day) SOx (pounds/day) PM10 (pounds/day) PM2.5 (pounds/day) Summer Area 16.50 0.00 0.11 0.00 0.00 0.00 Energy 0.24 2.20 1.85 0.01 0.17 0.17 Mobile 20.21 39.12 153.43 0.38 25.26 7.12 Total Summer 36.95 41.32 155.39 0.55 25.43 7.29 Winter Area 16.50 0.00 0.11 0.00 0.00 0.00 Energy 0.24 2.20 1.85 0.01 0.17 0.17 Mobile 19.77 40.46 154.29 0.35 25.26 7.13 Total Winter 36.51 42.66 156.25 0.36 25.43 7.30 Maximum Daily 36.95 42.66 156.25 0.55 25.43 7.30 SCAQMD pollutant threshold 75 100 550 150 150 55 Threshold exceeded? No No No No No No Notes:These estimates reflect states goal of 20% reduction in indoor water use and 25% reduction in outdoor water use, compliance with 2013 Title 24 standards, City’s goal of exceeding Title 24 by 10%, and the City’s waste diversion goal of 74%. VOC = volatile organic compound; NOx = oxides of nitrogen; CO = carbon monoxide; SOx = sulfur oxides; PM10 = coarse particulate matter; PM2.5 = fine particulate matter. As shown in Table 5, operational emissions will not exceed SCAQMD thresholds of significance for any criteria pollutants. Impacts related to operation will be less than significant. c)Less Than Significant Impact. The project site is located in the Coachella Valley portion of the Salton Sea Air Basin, which is classified as a “non-attainment” area for PM10 and ozone. In order to achieve attainment in the region, the 2003 Coachella Valley PM10 Management Plan was adopted, which established strict standards for dust management for development proposals. The proposed project will contribute to an incremental increase in regional PM10 and ozone emissions. However, given its limited size and scope, cumulative impacts are not expected to be considerable. Project construction and operation emissions will not exceed SCAQMD thresholds for PM10 or ozone precursors (NOx and CO). The project will not conflict with any attainment plans and will result in less than significant impacts. d)Less Than Significant Impact with Mitigation Incorporated.The nearest sensitive receptors are single-family residences located approximately 0.159 miles (256 meters) northeast of the project site. To determine if the proposed project has the potential to generate significant adverse localized air quality impacts, the mass rate Localized Significance Threshold (LST) Look-Up Table was used. The City of Palm Desert and the project property are located within Source Receptor Area 30 (Coachella Valley). Maximum acres on the project site that would be disturbed by off-road equipment would be 4.0 acres per day. As SCAQMD does not provide allowable emission (lb/day) values for 4 acres of land, the LST values for 2 and 5 acres within SRA 30 were interpolated to generate LSTs for a disturbed acreage of 4 acres for the proposed project. Table 6 shows on-site emission concentrations for project construction and the associated LST. Page 964 -27- As shown in the Table 6, LSTs will not be exceeded under unmitigated conditions for all criteria pollutants. Therefore, air quality impacts to nearby sensitive receptors during construction will be less than significant. Table 6 Monterey Crossing Localized Significance Thresholds (pounds per day) CO NOx PM10 PM2.5 Project Emissions 47 70 7 4 LST Threshold 12,967 569 130 51 Exceeds? No No No No Source: SCAQMD 2009. Note: Localized significance thresholds are shown for a 4-acre project site corresponding to a distance to a sensitive receptor of 256 meters. These estimates reflect control of fugitive dust required by Rule 403. LST = localized significance threshold; NO2 = nitrogen dioxide; CO = carbon monoxide; PM10 = particulate matter; PM2.5 = fine particulate matter Health Risk Assessment A Health Risk Assessment Impact Analysis for the project was prepared by Kunzman Associates, Inc. in August 2016 to assess the possibilities of cancer risks from diesel particulate mater (DPM) emissions associated with the Interstate-10/Union Pacific Railroad, located north of the project site. DPM is considered a toxic air contaminant (TAC) which is defined as an air pollutant which may cause or contribute to an increase in mortality or serious illness, or may pose a hazard to human health. TACs are usually present in small quantities in the ambient air. However, these air pollutants are highly toxic and may pose health risks in human beings. The major concern is, TACs may cause cancer. South Coast Air Quality Management District (SCAQMD) and Air Resources Board (ARB) operate monitoring stations in the South Coast Air Basin (SCAB) to measure ambient concentrations of certain TACs, associated with important health-related effects. SCAQMD has established thresholds for cancer risk that apply to new development projects within SCAQMD jurisdictions. Generally, the threshold for cancer risk is 10 cancer cases per million of population. No such threshold has been developed for projects which do not generate TACs, but occur near TAC generating facilities. SCAQMD has conducted a survey of estimated risk throughout its basins. The SCAQMD MATES-IV Study determined that the average cancer risk in the South Coast Air Basin portion of Riverside County is 223 in one million of population. The nearest sensitive receptors to the project site are the Palm Estate and Country Club mobile home work park located approximately 860.12 feet northeast. The nearest sensitive receptor being developed within the project site is the hotel, close to northern boundary (See Exhibit 12). The proposed project site would be exposed to TAC emissions from diesel truck emissions generated by the Interstate-10/Union Pacific Railroad uses. The Health Risk Assessment analysis Page 965 -28- shows that the highest cancer risks (12.45 cancer cases per million of population) would occur along the northern portion of the project site which includes Pads 2A-2C. Hotel workers within 500 feet of the I-10/Union Pacific Railroad would experience a cancer risk of 11.44 cancer cases per million of population (Table 7). A cancer risk represents the probability (in terms of risk per million individuals) that an individual would contract cancer resulting from exposure to TACs continuously over a lifetime exposure period of 70 years for sensitive receptors. Risk characterization for non-cancer health hazards from TACs is expressed as a hazard index (HI). The HI is a ratio of the predicted concentration of the project’s emissions to a concentration considered acceptable to public health professionals, termed the Reference Exposure Level (REL). Table 7 Monterey Crossing MEIR – Adult Worker Exposure Scenario (25 years) Receptor Contaminant (e) Carcinogenic Hazards Non carcinogenic Hazards CPF (mg/kg/day) (f) Risk (per million) (g) REL (ug/m3) (h) RfD (mg/kg/day) (i) Index (j) Hotel area DPM 1.1E+00 11.44 5.0E+00 1.4E-03 0.035 Hot Pool DPM 1.1E+00 7.45 5.0E+00 1.4E-03 0.023 Commercial DPM 1.1E+00 12.45 5.0E+00 1.4E-03 0.038 Source: “Health Risk Assessment Impact Analysis,” prepared by Kunzman Associates, Inc. in August 2016 The cancer risk at the project site will be higher than other areas of Riverside/San Bernardino County, but much less than the average in the South Coast Air Basin, which is 260 in one million. However, to minimize the cancer risk at the project site, a mitigation measure is provided at the end of this section. Installation of high efficiency Minimum Efficiency Reporting Value (MERV) filters of MERV 16 will reduce 90% of particulates, including DPM, resulting in a cancer risk of 1.2 in one million, and the project-related impacts will be less than significance with mitigation. e)Less Than Significant Impact. The proposed project will be developed with commercial uses and is not expected to generate objectionable odors during any phase of construction or at project buildout. Short term odors associated with paving and construction activities could be generated; however, any such odors would be quickly dispersed below detectable levels as distance from the construction site increases. Therefore, impacts from objectionable odors are expected to be less than significant. Mitigation Measures As described above, the proposed project impacts may include emissions of pollutants identified as Toxic Air Contaminant (TAC). The following measure is required to reduce diesel particulate emissions: 1. Commercial uses within 500 feet of the mainline of the I‐10 Freeway shall be required to install high efficiency Minimum Efficiency Reporting Value (MERV) filters of MERV 16 or better as indicated by the American Society of Heating Refrigerating and Air Conditioning Engineers ASHRAE) Page 966 -29- Standard 52.2, in the intake of ventilation systems. Heating, air conditioning and ventilation (HVAC) systems shall be installed with a fan unit power designed to force air through the MERV 16 filter. To ensure long‐term maintenance and replacement of the MERV 16 filters, the following shall occur: i) The developer, sales, and/or rental representative shall provide notification to all affected commercial tenants of the potential health risk from I‐10 Freeway for all affected commercial units. ii) For commercial rental space within 500 feet of the I‐10 Freeway, the owner/property manager shall maintain and replace MERV 16 filters in accordance with the manufacture’s recommendations. The property owner shall inform prospective tenants of increased risk of exposure to diesel particulates from I‐10 Freeway while workers are outside, or if doors are open. Mitigation Monitoring and Reporting Program A. MERV 16 filters will be incorporated into building plans for all commercial buildings within 500 feet of the mainline of the I-10 freeway. Responsible Parties: Building Department Plan Check staff Page 967 Page 968 -31- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact IV. BIOLOGICAL RESOURCES -- Would the project: a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Wildlife or U.S. Fish and Wildlife Service? X b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations or by the California Department of Fish and Game or US Fish and Wildlife Service? X c) Have a substantial adverse effect on federally protected wetlands as defined by Section 404 of the Clean Water Act (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? X d) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? X e) Conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or ordinance? X f) Conflict with the provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; “Biological Site Assessment,” prepared by Dudek March 2016; Final Recirculated Coachella Valley Multiple Species Habitat Conservation Plan and Natural Community Conservation Plan prepared by CVAG in 2007. Setting The subject site is primarily characterized as stabilized shielded desert. The site is surrounded on all sides by development, including Interstate-10/Union Pacific Railroad, paved roads, parking lots, and commercial uses. Dudek prepared a biological resource assessment for the proposed project in March, Page 969 -32- 2016. There are no sensitive habitats present or potentially occurring within the project site. No avoidance or mitigation measures are required. During the biological assessment, a buffer zone of 500 feet was studied around the project site to assure consideration of biological resource movement. Based on the literature review and field assessment of the site, the subject property is located within the boundaries of the Coachella Valley Multiple Species Habitat Conservation Plan (MSHCP). The site is neither located within nor adjacent to any designated conservation areas. The nearest conservation area is Thousand Palms Conservation Area, located approximately 1.25 miles northeast of the project site. In the CVMSHCP, the project site is mapped as stabilized shielded sand fields. Discussion of Impacts a)Less Than Significant Impact with Mitigation Incorporated. The project site is predominantly comprised of stabilized shielded desert sand fields. This plant community is typically comprised of perennial species including Creosote Bush (Larrea tridentate), four-wing Saltbrush (Atriplex canescens), California croton (Croton californicus), and indigo bush (Psorothamnus arborescens). Other plant communities include Arrow Weed Scrub, Desert Saltbrush Scrub, disturbed Desert Saltbush Scrub, and disturbed habitat. Special-Status Plant/Wildlife Species on Project Site During site visit, no special-status plant species including USFWS-designated critical habitat were identified within the subject site. No special-status wildlife including USFWS-designated critical habitat was observed within the project area during the reconnaissance survey. Common wildlife species including American kestrel (Falco sparverius), American crow (Corvus brachyrhynchos), California harvester ant (Pogonomyrmex californicus), monarch butterfly (Danaus plexippus), house finch (Haemorhous mexicanus) Anna’s hummingbird (Calypte anna), common raven (Corvus corax), Say’s phoebe (Sayornis saya), and desert iguana (Dipsosaurus dorsalis) were observed on site. There is a low potential for the following special-status wildlife species to occur onsite: Loggerhead Shrike (Lanius ludovicianus), Golden Eagle (Aquila chrysaetos), Pallid San Diego Pocket Mouse (Chaetodipus fallax pallidus), and Pocketed Free-tailed Bat (Nyctinomops femorosaccus). These are not covered under the CVMSHCP. Nesting Birds There is a low potential for the project site to support nesting birds. Although potential nesting habitat is limited within the site due to sparse vegetation cover and the disturbed nature of the site, the potential for birds to nest on site still remains, and direct impacts to migratory nesting birds must be avoided for compliance with the Migratory Bird Treaty Act and Fish and Game Code 3516. There are ornamental trees and shrubs outside the project site but close to site boundaries that could provide potential nesting and foraging habitat for a variety of songbirds and raptors in the area. Nesting birds can be significantly affected by indirect impacts from short-term construction-related noise especially during the breeding season (January 15–July 31). This may result in decreased reproductive success or abandonment of an area as a nesting habitat. Page 970 -33- In conclusion, the proposed project will not have substantial adverse effect on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service. In order to protect nesting birds, mitigation measures are provided at the end of this section. With implementation of the mitigation measures, impacts associated with sensitive species will be less than significant. b, c) Less Than Significant Impact. The project site does not contain any streams, riparian habitat, marshes, protected wetlands, vernal pools or sensitive natural communities protected by the California Department of Fish and Wildlife or U.S. Fish and Wildlife Service. The man-made Mid-Valley Stormwater Channel runs beneath the project site and emerges at the northeastern corner of the site. A small patch of arrow weed scrub found at the northeastern corner of the site could be indicative of a potential jurisdictional feature because of its Facultative Wetland (FACW) indicator status. However, this small patch of arrow weed scrub does not appear in historic aerial views of the site. For this reason, it is a man-made feature in association with the construction of the channel not a Jurisdictional Water resource. d)No Impact. The subject property is located in an urban area and surrounded by roadways, the Interstate-10/Union Pacific Railroad, Monterey Avenue, Dinah Shore Drive, and commercial development. Habitat and other features onsite are not suitable for a migratory wildlife corridor. No project-related impacts will occur. e, f)No Impact. The subject property is located within the boundaries of the CVMSHCP, therefore, is subject to payment of the Development Mitigation Fee, which will mitigate potential impacts to covered species. The site is not within or adjacent to a CVMSHCP-designated Conservation Area, so no additional mitigation measures or provisions are required. The project will not conflict with any policies or ordinances that protect biological species, or any habitat conservation plans or natural community conservation plans. No project-related impacts will occur. Mitigation Measures 1. If ground disturbance, tree or plant removal is proposed between January 15 th and July 31th, a qualified biologist shall conduct a nesting-bird survey within 72 hours of initiation of grading onsite focusing on MBTA covered species. The survey shall consist of full coverage of the project site footprint and up to a 300-foot buffer. The specific survey buffer will be determined in the field by the project biologist and will take into account the species nesting in the area, the habitat present, and where access is permitted. If no active nests are found, no additional measures are required. If active nests are reported, then the qualified biologist with GPS equipment shall map nest locations, where feasible. The nesting bird species will be documented and, to the degree feasible, the nesting stage (e.g., incubation of eggs, feeding of young, near fledging). The biologist shall establish a no-disturbance buffer of 300 feet around each active nest. The qualified biologist based on the biology of the species present and surrounding will determine the buffer habitat. No construction or ground disturbance activities shall be conducted within the Page 971 -34- buffer until the biologist has determined the nest is no longer active and has informed the construction supervisor that activities may resume. 2. The limits of the Mid-Valley Stormwater Channel shall be flagged with silt fencing prior to the beginning of construction activities to avoid potential impacts to it. Mitigation Monitoring and Reporting Program A. The City Engineer shall assure that necessary nesting bird surveys are completed in compliance with the Migratory Bird Treaty Act. Responsible Parties: City Engineer Schedule: Between January 1st and August 31st and no more than 72 prior to site disturbance. Page 972 -35- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact V. CULTURAL RESOURCES -- Would the project: a) Cause a substantial adverse change in the significance of a historical resource as defined in '15064.5? X b) Cause a substantial adverse change in the significance of an archaeological resource pursuant to '15064.5? X c) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? X d) Disturb any human remains, including those interred outside of formal cemeteries? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; “Cultural Resource Technical Report,” prepared by Dudek, June, 2016. Setting At the beginning of the historic period, the City of Palm Desert fell within the vast lands of the Cahuilla Indian tribe where the Cahuilla Tribe typically lived in camps of between 75 and 100 individuals, preferentially located along the lower edges of alluvial fans near permanent sources of water. One such camp was the Palm Oasis at modern day Thousand Palms, north of and adjacent to the City’s boundaries. The camps characteristically contained community houses and sweat lodges, with houses being semi-excavated and having heavy and flat roofs supported by large cottonwood poles. In the 1930s, the City of Palm Desert was a cluster of a few homes located on the north side of Highway 111. After World War II, a group of businessmen (four brothers – Clifford, Randall, Phil, and Carl Henderson) came to the region between Indian Wells and Rancho Mirage. Instead of desert and scrubland, they visualized “fine homes and swimming pools, schools, churches, and culture that would draw visitors and families from far and wide,” and in 1945 they formed the Palm Desert Corporation. In 1946, they started constructing streets and commercial buildings which later became known as Palm Desert. The project site is located in an area designated as “relatively high sensitivity for historical structures or archaeological resources from pre-1940-era (General Plan; Exhibit IV-1).” Based on Eastern Information Center records, there are three previously recorded cultural resources within one-half mile of the project site, all of which consist of historic-age resources. One of these resources, the UPRR (CA- RIV-6381H) is outside but adjacent to the project site paralleling the northern perimeter of the proposed site. The remaining sites (CA-RIV-3440H and P-33-005625) are clustered around the UPRR nearly a quarter-mile northwest of the project site. Discussion of Impacts a-b)Less Than Significant with Mitigation Incorporated. Dudek prepared a cultural resource technical report for the proposed project site in June 2016. The survey included a comprehensive records search, historical research, consultation with Native American representatives, an on-site Page 973 -36- field survey. Two newly identified historic-age cultural resources were recorded by Dudek within the project site: NEC-AD-01 and NEC-ISO-01. These resources were further analyzed in a Phase II investigation. NEC-AD-01 consists of a widely dispersed and diverse assemblage of historic-age debris, splintered lumber and slag, fragments of glass insulators, sanitary cans, soft-top aluminum beer cans, a sun colored amethyst glass fragment, various glass bottles, and modern materials (such as plastic from buckets, caution tape, surveyor flags, paper and plastic food containers, and discarded clothing). NEC- AD-01 parallels the UPRR/SPRR but is separated from the railroad by approximately 80 feet. Results of Shovel Test Pit Excavations at NEC-AD-01 show that NEC- AD-01 has no apparent potential to yield important archaeological information due to its lack of a sub-surface component. The site appears to be of little scientific or cultural value. Most probably, it is associated with the maintenance and/or dismantling of the telegraph line that previously ran parallel to the UPRR/SPRR not with any significant events locally, regionally, or nationally, therefore, it is not eligible for listing on the CRHR or the local register. NEC-AD-01 is not a “unique” archaeological resource under CEQA, and is not significant under CEQA. No further cultural resource considerations are recommended. NEC-ISO-01 consists of three historic-age cans which are concentrated near the center of the project site. Two of the cans are the sanitary type and one can is a one-gallon paint type. These cans are crushed and are not suitable for measuring and chronological dating based on size and dimensions. Further analysis shows that NEC-ISO-01 has no potential to be an eligible resource, therefore, no additional cultural resources considerations are necessary. Nevertheless, resources could be uncovered during project construction, and Dudek recommended implementation of mitigation measures to conform to Section 15064.5 regulations. Mitigation measures are provided at the end of this section. c)No Impact. The subject site is not known to contain unique paleontological features. Also, there are no unique geological features (river, lake, hills, faults, and folds etc.) located on-site that can directly or indirectly be destroyed. The surface soils consist of light brown, fine-to-coarse alluvial sands mixed with small rocks. Recent deposits are not conducive to the location of paleontological resources. The proposed project will result in the development of four-story hotel building and other mixed-use commercial buildings which will not require deep excavation. The proposed project will not directly or indirectly destroy a unique paleontological resource or site or unique geologic feature. Therefore, no project-related impacts are anticipated. d)Less Than Significant with Mitigation Incorporated. No cemeteries or human remains are known to occur on-site, and it is unlikely that human remains will be uncovered during project development. However, if resources to be uncovered during ground disturbance activities then with the implementation of mitigation measures to conform to Section 7050.5 of the California Health and Safety Code, impacts to the resources will be less than significant. Mitigation Measures 1. In the event that archaeological resources (sites, features, or artifacts) are exposed during construction activities for the proposed project, all construction work occurring within 100 feet of the find shall immediately stop until a qualified archaeologist, meeting the Secretary of the Interior’s Professional Qualification Standards, can evaluate the significance of the find and Page 974 -37- determine whether or not additional study is warranted. Depending upon the significance of the find, the archaeologist may simply record the find and allow work to continue. If the discovery proves significant under CEQA, additional work such as preparation of an archaeological treatment plan, testing, or data recovery may be warranted. 2. In accordance with Section 7050.5 of the California Health and Safety Code, if human remains are found, the County Coroner shall be notified within 24 hours of the discovery. No further excavation or disturbance of the site or any nearby area reasonably suspected to overlie adjacent remains shall occur until the County Coroner has determined, within two working days of notification of the discovery, the appropriate treatment and disposition of the human remains. If the remains are determined to be Native American, the Coroner shall notify the NAHC in Sacramento within 24 hours. In accordance with California Public Resources Code, Section 5097.98, the NAHC must immediately notify those persons it believes to be the MLD from the deceased Native American. The MLD shall complete their inspection within 48 hours of being granted access to the site. The designated Native American representative would then determine, in consultation with the property owner, the disposition of the human remains. Mitigation Monitoring and Reporting Program A. The applicant shall immediately notify the City if resources are identified. Responsible parties: Planning Department, City Engineer, Building Department. Page 975 -38- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact VI. GEOLOGY AND SOILS -- Would the project: a) Expose people or structures to potential substantial adverse effects, including the risk of loss, injury, or death involving: i) Rupture of a known earthquake fault, as delineated on the most recent Alquist-Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence of a known fault? X ii) Strong seismic ground shaking? X iii) Seismic-related ground failure, including liquefaction? X iv) Landslides? X b) Result in substantial soil erosion or the loss of topsoil? X c) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on- or off-site landslide, lateral spreading, subsidence, liquefaction or collapse? X d) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property? X e) Have soils incapable of adequately supporting the use of septic tanks or alternative waste water disposal systems where sewers are not available for the disposal of waste water? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; “Geotechnical Engineering and Infiltration Testing Report,” prepared by Earth Systems Southwest in March 2016. “Soil Survey of Riverside County, California, Coachella Valley Area,” U.S. Dept. of Agriculture Soil Conservation Service, 1980. Setting The Coachella Valley is located in the northwestern portion of the Salton Trough, a tectonic depression roughly 130 miles long and 70 miles wide that extends from the San Gorgonio Pass to the Gulf of Mexico. The valley is bounded by the San Bernardino Mountains on the northwest, San Jacinto Mountains on the west, Santa Rosa Mountains on the south, and Little San Bernardino Mountains and Indio Hills on the north. The Salton Sea is located to the southeast. The valley’s geologic composition is directly related to its proximity to the San Andreas Fault, which passes through the northeasterly portion of the valley, and other active faults. The region is susceptible to a range of geologic hazards, including ground rupture, major ground shaking, slope instability, and collapsible and expansive soils. Page 976 -39- Episodic flooding of major regional drainages, including the Whitewater River, results in the deposition of sand and gravel on the valley floor. Strong sustained winds emanating from the San Gorgonio Pass cause wind erosion and transport and deposit dry, finely granulated, sandy soils on the central valley floor. Regional soils range from rocky outcrops within the mountains bordering the valley to coarse gravels of mountain canyons and recently laid fine- and medium-grained alluvial (stream deposited) and aeolian (wind deposited) sediments on the central valley floor. Earth Systems Southwest prepared a, “Geotechnical Engineering and Infiltration Testing Report” for the project site on March 14, 2016. The exploration and testing methods included literature review, field exploration, and laboratory testing of the site. Results of the project site’s assessment are as follows: Soil Conditions The site predominantly consists of poorly graded sand, poorly graded sand with silt, and silty sand to the maximum depth of 51 ½ feet below the ground surface. Seven borings were extracted from the project site to investigate the subsurface soil conditions. In borings logs, loose to medium dense sandy soils were observed from the ground surface to a depth of approximately 12 feet. Below 12 feet (up to 23 feet), medium dense sandy soils were encountered. Below 23 feet (up to 33 feet), medium dense to very dense sandy soils were observed. Below 33 feet (up to 50 feet), the sands were very dense. The soils were dry to damp with moisture levels generally less than 2 percent. Overall, the site soils are classified as Type C in accordance with Cal OSHA. The project site lies within a recognized blow sand hazard area and fine particulate matter (PM10) which can create an air quality hazard if dust is blowing. Watering the surface, planting grass or landscaping, or placing hardscape normally mitigates this hazard. Groundwater Depth to the groundwater is greater than 100 feet in the project area. However, groundwater levels may fluctuate with precipitation, irrigation, drainage, regional pumping from wells, and site grading. Moisture content of soil ranges between dry and damp. Collapse Potential/Consolidation Potential The site is located in a geological environment where the potential for collapsible soil exists. Collapse potential tests were performed on few samples from the site which show low collapse potential (0.2 to 1.3%). Within the project site, the consolidation potential of the soil under the anticipated overburden and foundation loads is low. Expansive Soils The soil with the project site is granular with a “very low” Expansion Index. Corrosion Potential Two soil samples from the project site were tested for potential of corrosion of concrete and ferrous metals. Results revealed pH values between 8.5 and 9.3, chloride contents between 4 and 7 ppm, sulfate contents between 14 to 25 ppm, and minimum resistivities between 5,464 and 6,369 ohm-cm. Page 977 -40- Geologic Hazards The project site is not located within the Alquist‐Priolo Earthquake Fault Zone. No active faults are mapped in the immediate vicinity of the project site. However, segments of the San Andreas fault are located approximately 2.8 miles northeast of the project site. The project site is located within an active seismic area in Southern California where large numbers of earthquakes occur each year. Therefore, strong ground shaking can be expected onsite during earthquakes on surrounding faults. Infiltration and Percolation Testing Earth Systems Southwest further excavated three borings from the project site to perform infiltration and percolation testing to determine the absorption rate of site soil for a storm water runoff drain. The results show that the onsite soil is mainly loose fill up to 3 feet. Below that, the soil mainly consists of alluvial sediment to a depth of up to 30 feet. Conclusion The geotechnical analysis also included a number of recommendations for site and building construction, to assure that soils are properly sited and compacted, and that structures withstand groundshaking. These recommendations will be incorporated into the site-specific geotechnical analysis required for submittal of grading plans, and will be reflected in the City’s review of grading and building plans. These standard requirements will be imposed as conditions of approval by the City. Discussion of Impacts a.i)No Impact. The subject property is not located in an Alquist-Priolo Earthquake Fault Zone. The nearest earthquake fault is the San Andreas Fault (southern segment), which are capable of generating earthquakes of magnitude 5.5. Fault rupture is not expected on the project site. a.ii)Less Than Significant Impact. The project site is located in a seismically active region where earthquakes originating on local and regional seismic faults can produce severe ground shaking. Buildings proposed for the site will be required to be constructed in accordance with the most recent edition of the California Building Code (CBC) and Palm Desert Municipal Code to provide collapse-resistant design. The City has adopted several modifications to the CBC in accordance to local geology. The Palm Desert Municipal Code provides regulations for collapse-resistant design. Project-related impacts associated with seismic ground shaking are less than significance. a.iii)Less Than Significant Impact. The California Geological Survey does not identify liquefaction susceptible areas for the City of Palm Desert. The project site is located in an area that has a low susceptibility to liquefaction (General Plan, Exhibit V-5). Onsite underlying soils consist of poorly graded sand, poorly graded sand with silt, and silty sand, which are soft, expansive, and could be susceptible to liquefaction. The depth of the groundwater in the area is greater than 100 feet below the ground surface. For liquefaction to occur, groundwater levels must be within 50 feet of the ground surface. The City will require, with the submittal of grading and building plans, the preparation of site- specific soil analysis to address design loads specifically related to the site. These City Page 978 -41- requirements assure that project-related impacts associated with seismic related ground failure including liquefaction are less than significance. a.iv)No Impact. The project site lies on the Coachella Valley floor, and is just outside the landslide and rockfall hazard area (General Plan; Exhibit V-1). The site consists of, and is surrounded by, relatively flat terrain; therefore, no impacts associated with landslides are anticipated. b)Less Than Significant Impact. The project site is located in an area designated as an area “high wind erodibility” (General Plan; Exhibit V-3). The City will require the preparation and implementation of a dust management plan as part of the grading permit process for the project site. This plan will include wind erosion best management practices, as prescribed by the SCAQMD. Project related impacts associated with wind erosion will be less than significant. c) Less Than Significant Impact. Surface soils of the project site consist of poorly graded sand, poorly graded sand with silt, and silty sand. As described in Section VI a) iv., above, the site has low susceptibility to liquefaction due to groundwater levels greater than 100 feet below the ground surface. The site is not susceptible to lateral spreading, which requires a shallow water table or proximity to a water source that could cause inundation of onsite soils. The site is not susceptible to landslides due to its relatively flat terrain and distance from mountainous slopes. Land subsidence has been documented in the Coachella Valley due to extensive groundwater pumping. The project site is located north of a “USGS subsidence zone study area” which is monitored to record subsidence in the City of Palm Desert. The Coachella Valley Water District (CVWD) has indicated a commitment to groundwater replenishment programs intended to limit future subsidence within the Coachella Valley. However, subsidence is considered a regional problem requiring regional mitigation and not site-specific mitigation. Although there has been recent documentation of subsidence occurring in the Coachella Valley, Earth Systems Southwest found no fissures or other superficial evidence of subsidence on or near the project site. Therefore, current and near future impacts due to subsidence are expected to be less than significant. d)Less Than Significant Impact. Expansive soils typically contain large amounts of clay that expand when water is absorbed and shrink when they dry. As described in VI a) iv., above, the site’s underlying soils consist of poorly graded sand, poorly graded sand with silt, and silty sand, which have a low-moderate shrink-swell potential and “very low” Expansion Index. These values can potentially change based on several factors, such as importing soil from other site and the quality of water used during construction and subsequent landscape irrigation. Therefore, it is recommended that the samples of building pad soils should further be analyzed during site grading to test the volume change capacity under various moisture content. Implementation of City’s policies and programs will decrease the project-related impact. Furthermore, Earth Systems Southwest has provided several recommendations to improve the building foundation prior project’s construction which are provided at the end of this section. Therefore, less than significant impacts associated with expansive soils will occur. e)No Impact. The proposed project will connect to the CVWD existing sewer system. No septic tanks or alternative wastewater disposal systems are proposed. No adverse impacts associated with wastewater disposal systems will occur. Page 979 -42- Mitigation Measures: None. Mitigation Monitoring and Reporting Program None. Page 980 -43- VII. GREENHOUSE GAS EMISSIONS -- Would the project: Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact a) Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment? (CalEEMod)X b) Conflict with an applicable plan, policy or regulation adopted for the purpose of reducing the emissions of greenhouse gases? (Development Code; General Plan) X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; “Air Quality and Greenhouse Gas Technical Report for the NEC Dinah Shore and Monterey Avenue Development Project,” prepared by Dudek in August 2016. Setting Principal GHGs include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), O3, and water vapor (H2O). Some GHGs, such as CO2, CH4, and N2O, occur naturally and are emitted to the atmosphere through natural processes and human activities. Of these gases, CO2 and CH4 are emitted in the greatest quantities from human activities. Emissions of CO2 are largely byproducts of fossil fuel combustion, whereas CH4 results mostly from off-gassing associated with agricultural practices and landfills. Man-made GHGs, which have a much greater heat-absorption potential than CO2, include fluorinated gases, such as hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3), which are associated with certain industrial products and processes. Greenhouse gas emissions are generated by both moving and stationary sources, including vehicles, the production of electricity and natural gas, water pumping and fertilizers. State law mandates that all cities decrease their greenhouse gas emissions to 1990 levels by the year 2020. In June 2005, Governor Schwarzenegger established California’s GHG emissions reduction targets in Executive Order S-3-05. The Executive Order established the following goals: GHG emissions should be reduced to 2000 levels by 2010; GHG emissions should be reduced to 1990 levels by 2020; and GHG emissions should be reduced to 80% below 1990 levels by 2050. In furtherance of the goals established in Executive Order S-3-05, the legislature enacted AB 32 (Núñez and Pavley), the California Global Warming Solutions Act of 2006, which Governor Schwarzenegger signed on September 27, 2006. On April 29, 2015, Governor Jerry Brown issued an executive order which identified an interim GHG reduction target in support of targets previously identified under S-3-05 and AB 32. Executive Order B-30-15 set an interim target goal of reducing GHG emissions to 40% below 1990 levels by 2030 to keep California on its trajectory toward meeting or exceeding the long-term goal of reducing GHG emissions to 80% below 1990 levels by 2050 as set forth in S-3-05. The SCAQMD has not adopted recommended numeric CEQA significance thresholds for GHG emissions for lead agencies to use in assessing GHG impacts of residential and commercial development projects. The SCAQMD formed a GHG CEQA Significance Threshold Working Group to work with SCAQMD staff on developing GHG CEQA significance thresholds until statewide significance thresholds or guidelines are established. The SCAQMD proposed three tiers of compliance that may lead to a determination that impacts are less than significant, including the following: Page 981 -44- 1. Projects with GHGs within budgets set out in approved regional plans to be developed under the SB 375 process. 2. Projects with GHG emissions that are below designated quantitative thresholds: a. Industrial projects with an incremental GHG emissions increase that falls below (or is mitigated to be less than) 10,000 MT CO2E per year. b. Commercial and residential projects with an incremental GHG emissions increase that falls below (or is mitigated to be less than) 3,000 MT CO2E per year, provided that such projects also meet energy efficiency and water conservation performance targets that have yet to be developed. 3. Projects that purchase GHG offsets that, either alone or in combination with one of the three tiers mentioned above, achieve the target significance screening level. Because the proposed project consists of mixed-use development, the recommended SCAQMD threshold to apply to the project is the Option 1, 3,000 MT CO2E per year. This analysis added amortized construction emissions to the estimated annual operational emissions before comparing operational emissions to the proposed SCAQMD threshold of 3,000 MT CO2E per year. In 2010, the City adopted the Environmental Sustainability Plan (ESP), which demonstrates how the City has been involved on issues relating to environmental sustainability including, energy, waste management, storm water, water reclamation, transportation, and landscaping. The Plan sets out a series of goals for the City that are grounded in the principles of environmental soundness and sustainable development and addresses six resource areas, including the built environment. Discussion of Impacts a-b) Less Than Significant Impact with Mitigation Incorporated. The proposed project will generate greenhouse gas (GHG) emissions during both construction and operation. As described in Section III, the CalEEMod model was used to quantify air quality emission projections, including greenhouse gas emissions. Construction Emissions The estimated total GHG emissions during construction would be approximately 989 MT CO2E in 2017 and 343 MT CO2E in 2018, for a total of 1,332 MT CO2E over the construction period. Estimated project-generated construction emissions amortized over 30 years would be approximately 44 MT CO2E per year. However, construction related greenhouse gas emissions will be temporary and will end once the project is completed. Operational Emissions Operation of the proposed project will create on-going greenhouse gases through area source emissions, such as vehicle trips, landscaping and off-gassing from the pavement. The estimated annual project-generated GHG emissions would be approximately 6,042 MT CO2E per year as a result of project operation. Estimated annual project-generated operational emissions in 2019 and amortized project construction emissions would be approximately 6,086 MT CO2E per year. Table 8 provides a summary of the proposed projected short-term and annual GHG generation associated with the potential operational buildings and amortized construction phase on the site. Page 982 -45- Table 8 Monterey Crossing Estimated Annual Greenhouse Gas Emissions (Metric Tons per year) Phase CO2e Construction - 2017 989.13 2018 343.12 Total Construction 1,332.25 Operational - 2019 6,041.91 Amortized Construction Emissions - 2019 44.41 Total Operational 6,086.32 Source: CalEEMod Version 2013.2.2. GHG Thresholds In November 2009, during SCAQMD GHG working group meetings, SCAQMD staff had proposed a variety of thresholds for GHG emissions, including a “land use” threshold that would be 3,500 MTCO2e/yr for residential projects, 1,400 MTCO2e/yr for commercial projects, and 3,000 MTCO2e/yr for mixed-use projects. Based on this proposal, the annual operational GHG emissions with amortized construction emissions would exceed the SCAQMD screening threshold of 3,000 MT CO2E per year for the proposed project. However, as of August 2016, the SCAQMD Governing Board has not formally adopted the proposed interim tiered approach for evaluating GHG impacts, including the 3,000 MTCO2e/yr threshold for mixed-use projects. The SCAQMD draft threshold tiered approach states that a project would not have significant GHG emissions if it were consistent with a qualifying local GHG reduction plan. In August 2015, the City of Palm Desert updated its adopted Environmental Sustainability Plan (ESP) with approaches to reducing GHG emissions by a total of 35,829 MT CO2E, a reduction target of approximately 5.8% below the 2008 baseline. To reduce the generation of the GHG during project’s construction and operational phases, the updated ESP goals and policies (such as requiring that new development must exceed Title 24 standards by at least 5 to 15% and complying with the City’s current diversion rate of 74%) were incorporated into the CalEEMod modeling. The implementation of the mitigation measure provided below will assure that GHG emissions from the proposed project will meet the proposed thresholds of the SCAQMD, through compliance with the City’s ESP. As a result, impacts associated with GHG emissions will be less than significant. Mitigation Measures 1. The following GHG emissions reduction measures shall be implemented: Use light-colored surfaces and shading mechanisms in parking areas. Provide preferential parking for carpool, shared, electric, and hydrogen vehicles. Exceed 2016 Title 24 Building Energy Efficiency Standards by 10%. Page 983 -46- Implement energy-efficient design practices such as high-performance glazing, Energy Star compliant systems and appliances, radiant heat roof barriers, insulation on all pipes, programmable thermostats, solar access, and sealed ducts. Equip the pool(s) and spa(s) with active solar water heating systems. Use native species and drought tolerant species for a minimum of 50% of the ornamental plant palette in non-turf areas for to minimize water demand. Ensure recycling of construction debris and waste through administration by an on-site recycling coordinator and presence of recycling/separation areas. Mitigation Monitoring and Reporting Program A. Building plans shall incorporate the measures listed in mitigation measure 1. Responsible parties: Planning Department, City Engineer, Building Department. Page 984 -47- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact VIII. HAZARDS AND HAZARDOUS MATERIALS --Would the project: a) Create a significant hazard to the public or the environment through the routine transport, use, or disposal of hazardous materials? X b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? X c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? X d) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment? X e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? X f) For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working in the project area? X g) Impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan? X h) Expose people or structures to a significant risk of loss, injury or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; California Department of Toxic Substances Control Hazardous Waste,https://www.dtsc.ca.gov/HazardousWaste/; Accessed on 08.04.2016; State Water Resources Control Board, http://geotracker.waterboards.ca.gov/map/?CMD=runreport&myaddress=palm+desert ; Accessed on 08.23.2016. Setting The project site is flat, vacant, and undeveloped. In the City of Palm Desert, hazardous materials transport, storage, and use is strictly regulated for large quantity users, such as industrial processing plants and commercial dry cleaners. The City implements the General Plan’s Hazardous and Toxic Materials element through regular consultation with the Regional Water Quality Control Board (RWQCB) and Department of Environmental Health. The City also monitors and regulates industrial plants and commercial areas through the element’s goals, policies, and programs. The State Water Resources Control Board’s online database (Geo Tracker) indicates that the City of Palm Desert contains 53 sites that are either listed or permitted as hazardous material sites under the Page 985 -48- California Department of Toxic Substances Control (DTSC). The majority of these sites are located along Country Club Drive, Hovley Lane East, Cook Street, Hwy 111, Monterey Avenue, Cook Street, and Washington Street. According to GeoTracker, one permitted underground storage tank (UST) is located on the western side of the Monterey Avenue, located at 72800 Dinah Shore Drive, and named as Costco Wholesale# 441. Costco Wholesale# 441 (Facility ID No. 250) is permitted by Riverside County and is located in proximately to the project site. No further information was provided by the GeoTracker Database. Potential impacts to the project site are very limited due to distance (approximately 0.09 miles west) from the project area. Discussion of Impacts a, b) Less Than Significant Impact. The proposed project will result in the development of mixed- use commercial buildings. Cleaners, solvents, fertilizers and pesticides may be used on-site for routine cleaning and landscaping. The proposed project also includes automotive uses which may generate several different types of hazardous waste (e.g. engine oil, transmission oil, and lubricants/grease), however, they will be in small amounts, regulated by the Department of Environmental Health and the Fire Department. These materials, if used, shall be properly stored, handled and treated according to the regulations issued by the State of California (See Chapter 30, Title 22 of the California Code of Regulations. None of those cleaners, solvents, fertilizers and pesticides will be used in sufficient quantities to pose a threat to humans or cause a foreseeable chemical release into the environment. The construction phase would involve the use of heavy equipment, which uses small amounts of oil and fuels and other potential flammable substances. During construction, equipment would require refueling and minor maintenance on location that could lead to fuel and oil spills. The contractor will be required to identify a staging area for storing materials. The use and handling of hazardous materials during construction activities would occur in accordance with applicable Federal, State, and local laws including California Occupational Health and Safety Administration (CalOSHA) requirements. The proposed project would not result in a significant risk of explosion or accidental release of hazardous substances. The project site is immediately south of Pacific Railroad lines and the I-10. Hazardous materials are transported through the freeway and railroad which are the preferred transport route. Arterial streets are the preferred local truck routes. Designated truck routes in the City of Palm Desert include Dinah Shore Drive, Gerald Ford Drive, Monterey Avenue, and Highway 111 as well as portions of Bob Hope Drive, Frank Sinatra Drive, and Country Club Drive. The City, County and Highway Patrol have established and adopted emergency response plans for potential accidents on the freeway and on the railroad. These plans include the County’s Hazardous Materials Team, which is well trained in the proper handling of spills and similar hazards. Further, the railroad is separated from development areas on the project site by a drainage channel, and the property occurs at a higher elevation than the railroad track. The channel will therefore act as a physical barrier in the event of a railroad accident. Overall, the regulations, emergency response plans and physical features of the site will assure that impacts associated with the transport, storage or use of hazardous materials will be less than significant. Page 986 -49- c)No Impact: No schools are located within one-quarter mile of the project site. The nearest school is Xavier College Preparatory High School located approximately 2.03 miles northeast from the proposed site. There will be no hazardous materials-related impacts to schools. d)No Impact: The subject property is not included on a list compiled pursuant to Government Code Section 65962.3. The proposed project will not create a significant hazard to the public or environment. e-f)No Impact: The Palm Springs International Airport is located approximately 8.4 miles northwest of the subject property. The Bermuda Dunes Airport is located approximately 7.2 miles southeast of the project site. The subject site is not located within the boundaries of either of the airports’ land use compatibility plan. The site is not located in the vicinity of a private airstrip. The project will not result in safety hazards for people living or working in the area. g)No Impact: The proposed project will not significantly alter the existing circulation pattern in the project area or adversely impact evacuation plans. The primary project access point is on Dinah Shore Drive, which is currently fully developed. Proposed parking and circulation plans will be reviewed by the Fire and Police Departments to assure that driveways and roads are adequate for emergency vehicles. A construction plan will be required by the City to assure that the project does not interfere with emergency access during development. These standard requirements will assure that impacts associated with emergency response remain less than significant. h)No Impact: The project site is not located in a wildland fire hazard zone and is not susceptible to wildfires. Therefore, the proposed project will not expose people or structures to significant risks associated with wildfires. No related impact is expected. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 987 -50- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact IX. HYDROLOGY AND WATER QUALITY -- Would the project: a) Violate any water quality standards or waste discharge requirements? X b) Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? X c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial erosion or siltation on- or off-site? X d) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding on- or off- site? X e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff? X f) Otherwise substantially degrade water quality?X g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? X h) Place within a 100-year flood hazard area structures which would impede or redirect flood flows? X i) Expose people or structures to a significant risk of loss, injury or death involving flooding, including flooding as a result of the failure of a levee or dam? X j) Inundation by seiche, tsunami, or mudflow?X Source:Palm Desert General Plan 2004; https://rainfall.weatherdb.com/l/19812/Palm-Desert-California, Accessed on 08.03.2016; “Preliminary Hydrology Study for Monterey Crossing, Tentative Parcel Map 37157” prepared by Proactive Engineering Consultations West, Inc. July 2016; “Water Quality Management Plan for Monterey Crossing” prepared by Proactive Engineering Consultants West, Inc. June 2016; Coachella Valley Water Management Plan Update (Final Report), January 2012. Page 988 -51- Setting The Coachella Valley Water District (CVWD) provides domestic water to the City of Palm Desert, including the project site. Its primary source of fresh water is groundwater extracted by deep wells from the Whitewater River sub-basin. The Whitewater River Subbasin water resource consists of a combination of natural runoff, recycled water, imported water, inflows from adjacent basins, and ground water system. This subbasin is also artificially recharged through imported State Water Project Exchange and Colorado River water. The total storage capacity of the Whitewater River Subbasin is approximately 28.8 million acre feet and it currently contains approximately 25 million acre feet. It is capable of meeting the water demands of the Coachella Valley, including the City of Palm Desert, for extended normal and drought periods. CVWD’s domestic water system includes 50 wells with an average depth of 900 feet to serve the City of Palm Desert and its wider customer base. CVWD has a total of 27 reservoirs, with an average capacity of 1.8 million gallons. CVWD also provides wastewater collection and treatment services to the City of Palm Desert. CVWD treats and recycles Palm Desert wastewater at the Cook Street Wastewater Reclamation Plant, with a capacity of 20 million gal/day (mgd). CVWD continually increases the capacity of its wastewater reclamation facilities by constructing new treatment ponds, aeration, and other structures. CVWD implements all requirements of the Regional Water Quality Control Board pertaining to water quality and wastewater discharge. The project site is located in the northern portion of the Coachella Valley. It has an average rainfall of 3.76 inches per year. Several watersheds drain the adjoining elevated terrain of the San Jacinto and Santa Rosa Mountains towards the valley floor. The Whitewater River is the primary drainage course for the City of Palm Desert, which runs approximately 4 miles south of the project site. The Mid-Valley Stormwater Channel runs just south of the railroad tracks that make the northern boundary of the project site. At the subject site, the Mid-Valley Stormwater Channel runs beneath the ground and emerges at the northeastern portion of the project site. The Mid-Valley Stormwater Channel mainly collects runoff from the southern portion of the Southern Pacific Railroad. The project site and areas surrounding it are subject to City requirements relating to flood control. The City implements standard requirements for the retention of storm flows, and participates in the National Pollution Discharge Elimination System (NPDES) to protect surface waters from pollution. Development projects must retain the 100 year storm flow on site. Discussion of Impacts: a) Less Than Significant Impact.The project site is located in the Whitewater River watershed. All water providers in the watershed are required to comply with Regional Water Quality Control Board standards for the protection of water quality, including the preparation of site- specific Water Quality Management Plans (WQMP) for surface waters. The proposed project will connect to an existing 8 inch water line located in Dinah Shore Drive. The CVWD is required to meet water quality requirements in its production and delivery of domestic water. The CVWD is regulated by the State Water Resources Control Board Division of Drinking Water (DDW) and the U.S. Environmental Protection Agency (USEPA), and must maintain strict water quality standards in the treatment of effluent. Page 989 -52- Wastewater will be transported to and processed at the Cook Street Wastewater Treatment Plant (Water Reclamation Plant No. 10) located in the central portion of the City on Cook Street. The proposed project will extend an 8-inch sanitary sewer line from the project site to connect to an existing 8-inch line. The proposed project will not violate water quality standards or waste discharge requirements. The project will connect to existing sewer lines located in the immediate project vicinity. The project will also be required to comply with National Pollutant Discharge Elimination System (NPDES) regulations, which minimize the pollutant load associated with urban runoff. The imposition of conditions of approval, local, state and federal standard requirements and the requirements of law will assure that the project will not violate any water quality standards or waste discharge requirements. No impact is associated. b)Less Than Significant Impact.The proposed project will require water for commercial use and landscape irrigation. The Coachella Valley Water District has developed demand factors by land use that the City has deemed appropriate for this analysis. The commercial demand factor was provided by CVWD staff from the CVWD draft Supplemental Water Supply Program and Fee Study. Annual demand (consumption) factors were developed based on collected data specific to the Coachella Valley and local water purveyors. Commercial land uses are expected to generate a demand of 1.92 acre-feet per acre per year, which means the site has the potential to generate a demand of 34.15 acre-feet per year. The site’s proposed development is consistent with the land use designation for the property, on which CVWD’s water demand and supply analysis is based. Based on the District’s Urban Water Management Plan (2015-2016), CVWD will be able to fulfill the project’s water demand. Project impacts associated with domestic water demand are expected to be less than significant. The project will connect to existing water lines beneath Dinah Shore Drive and Monterey Avenue. No new wells or additional water infrastructure are proposed for the project water requirement. The project will be required to comply with the City’s water-efficiency requirements, including the use of drought-tolerant planting materials and limited landscaping irrigation. Implementation of these and other applicable requirements will assure that water-related impacts are reduced to less than significant levels. c-e) Less Than Significant Impact.The subject site is generally flat and contains no rivers or streams. Development of the proposed project will increase impermeable surfaces on site, and therefore increase on-site storm flows. Infiltration basins are proposed throughout the project site to capture the on-site runoff. Drainage System for the Project Site: Proactive Engineering Consultants West, Inc. has prepared the “Preliminary Hydrology Study” for the project site in July 2016. The study area is divided into six sub-areas (Areas “1”, “2”, “3”, “4”, “5”, “6”) (Exhibit 13). Onsite runoff from “Area 1” will be conveyed in the parking aisleways. From there, it will be collected at gutters to further convey the flow towards the north end of the project site. The strategic dry wells will be used to avoid gutter flow depths exceeding top of curb for 10-year flows or building pads for 100-year flows. These flows will be collected Page 990 -53- in infiltration basin “A”. The infiltration basin “A” will mitigate for water quality and retain the 100-year, 24-hour storm event. Onsite runoff from Areas “2” through “6” will be conveyed in the parking aisleways to an infiltration basin located within each area where the water quality will be mitigated, and the 100- year, 24-hour storm event retained. The proposed infiltration basins will mitigate for water quality, 100% retention of the 100-year, 24-hour storm event as well as the offsite flow from the adjacent slope on the west end of the project site. Infiltration Basin for the Project Site: The majority of the project site will be paved for parking lots and driveway access which can increase the runoff volumes and velocities to the existing downstream drainage channel. Also, stormwater runoff from the project site may contain numerous pollutants. The site topography gently slopes at 1% to the easterly end of the site towards an existing drainage channel which parallels the Union Pacific Railroad. To reduce discharge of pollutants into urban runoff from the proposed development, Proactive Engineering Consultants West, Inc. prepared the “Water Quality Management Plan (WQMP)” in June 2016. An infiltration basin “A” is designed for the site, located on the eastern portion of the site and parallels the existing railroad tracks (See Exhibit 13 and 14). An infiltration basin is a flat earthen basin designed to capture the design capture volume (Vbmp) from the site. The total capacity of infiltration basin “A” is designed to capture approximately 14,223 cubic feet of project runoff. The stormwater will infiltrate through the bottom of the basin into the underlying soil over a 72 hour drawdown period. Flows exceeding Vbmp will be discharged to a downstream conveyance system. Infiltration basins are highly effective in removing all targeted pollutants from stormwater runoff. The infiltration basin “A” will also capture the 100-year, 24-hour storm event as required by the City. In future as development occurs, dry wells would be implemented throughout the project site at key locations to mitigate the 100-year 24-hour storm event and the water quality volume. The proposed development project will be required to comply with the City’s requirements as they relate to storm water retention, including the approval of a project-specific hydrology study and water quality management plan. Implementation of these and other applicable requirements will assure that drainage and stormwater will not create or contribute water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff f) Less Than Significant Impact. The proposed project will be required to comply with all applicable water quality standards, and will implement a Water Quality Management Plan approved by the City and the Regional Water Quality Control Board for both construction activities and long term operation of the site. Adherence to the City’s standard requirements related to water quality will ensure impacts will be less than significant. g, h, i) No Impact.The project site is not located in the 100-year floodplain and will not place housing or other structures in an area that would impede or redirect flows (General Plan; Exhibit V-6). According to Flood Insurance Rate Maps (FIRM) prepared by the Federal Emergency Management Agency (FEMA), the site is located in Zone X, which represents “areas outside of 0.2% annual chance flood.” (FIRM Map No. 06065C1595G, August 24, 2016) Page 991 -54- i, j) Less Than Significant Impact.As noted above, the proposed project is located outside a FEMA or regionally designated floodplain. However, the Mid-Valley Stormwater Channel runs beneath the project site and emerges at the northeastern corner of the site. This project site is also in a seismic active region. As a result, seismic waves can cause oscillations in the enclosed water channel, beneath the site, called seiche. However, the onsite infiltration basin will be capable of accommodating the generated flow. Less than significant impact is expected. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 992 Page 993 Page 994 -57- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact X. LAND USE AND PLANNING - Would the project: a) Physically divide an established community? X b) Conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? X c) Conflict with any applicable habitat conservation plan or natural community conservation plan? X Source:Palm Desert General Plan 2004. Setting The project site is governed by the policies and land use designations of the City of Palm Desert General Plan and Zoning Ordinance. The site is designated as a Regional Commercial (C-R) in the General Plan Land Use Map. The site is zoned as Planned Commercial. Discussion of Impacts a)No Impact. The subject property is currently vacant and located in an area that is developed for similar commercial land uses. The proposed development will not physically divide an established community. No impact is expected. b)No Impact. The subject property occurs in an area designated for Regional Commercial (C-R) development in the General Plan. The project proposes a Specific Plan to address site specific regulations and standards for the site. The project includes a four story hotel building, automobile sales, tire store, restaurants, and retail buildings. The mix of land uses will not be substantially different from that planned in the General Plan. The proposed land uses are consistent with commercial land uses immediately surrounding the site. The proposed hotel building will extend up to 50 feet. Minor variations from the Ordinance include increased variations to setback requirements to improve sight distance within driveways. These variations, if approved, are not significant changes to the City’s standards, and are allowed with approval of a Specific Plan. All activities will be conducted pursuant to the City’s Municipal Code requirements and standards to avoid any conflict with any land use plan, policy, or regulation of an agency with jurisdiction. No impact is expected. Page 995 -58- Overall, the provisions of the Specific Plan and the development of the project are not expected to conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project. No impact is expected. c)No Impact. As described in Section IV, Biological Resources, the project site is located in the Coachella Valley Multiple Species Habitat Conservation Plan (MSHCP) boundaries. The proposed project is required to comply with its requirements, including payment of the MSHCP Local Development Mitigation Fee. No conservation plan-related conflict is expected. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 996 -59- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XI. MINERAL RESOURCES -- Would the project: a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state? X b) Result in the loss of availability of a locally-important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan? X Source:Palm Desert General Plan 2004. Setting The majority of the City of Palm Desert is made up of alluvial fans, which are mainly sand and gravel. Sand and gravels are considered an economic resource and commonly used for road base and other building materials. Small amounts of limestone, copper and gold have been explored from some parts of the city in past. No existing sand or gravel operations occur in the vicinity of the project site. Discussion of Impacts a, b) Less Than Significant Impact. The project site is located in Mineral Zone MRZ-3, which indicates an area containing mineral deposits, however the significance of these deposits cannot be evaluated from available data (Palm Desert General Plan; Exhibit IV-7). The site is designated for regional commercial development, and is not in an area designated for mining activities. Although development of the site has the potential to reduce the area available for sand and gravel mining, the reduction will be minimal, and impacts to mineral resources will be less than significant. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 997 -60- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XII. NOISE - Would the project result in: a) Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? X b) Exposure of persons to or generation of excessive groundborne vibration or groundborne noise levels? X c) A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project? X d) A substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project? X e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive noise levels? X f) For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to excessive noise levels? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016. Setting The project site is located on Monterey Avenue and Dinah Shore Drive. Both streets are designated an “Arterial” roadway as defined by the City’s General Plan Circulation Element. Noise levels on these roadways can be expected to be greater than would be typical of local streets. Primary sources of noise in the City of Palm Desert include traffic. As part of the development of the Noise Element of the General Plan, noise level measurements were collected at various locations throughout the City. The noise levels on Monterey Avenue from Varner Road to the I-10 Freeway were estimated to be 74.7 dBA CNEL at 100 feet from the centerline, and 74.2 dBA CNEL 100 feet from centerline north of Gerald Ford at General Plan buildout. Discussion of Impacts a, b)Less Than Significant Impact. The subject property is currently vacant and undeveloped. The main noise source in the area is vehicular traffic on adjacent and nearby roadways (Union Pacific Railroad, Interstate-10, Monterey Avenue, and Dinah Shore Drive). The nearest sensitive Page 998 -61- receptors are single-family residences located approximately 0.159 miles (256 meters) northeast of the project site. Impacts of Off-Site Noise Sources on the Proposed Project The proposed project will experience noise levels of 74.7 at buildout of the General Plan, which is below the City’s standard for commercial development. According to the Palm Desert General Plan, the noise levels on Monterey Avenue would be under 75 dBA, the established standard for commercial development. Structures will be required to meet the most recent version of the California Building Code noise insulation standards, which will assure that off-site noise impacts to the project are minimized to less than significant levels. Adherence to standards will ensure operations related noise would remain less than significant. The proposed hotel will occur adjacent to Monterey Avenue, near the I-10 freeway. Noise levels have the potential to be elevated for guests of the hotel. However, the City will require that project specific noise analysis be submitted with building plans that demonstrate that interior noise levels will be 45 dBA or less. The implementation of building standards, such as dual glazing, additional insulation and building orientation will be assessed as part of this analysis, thereby ensuring that noise impacts to the hotel’s residents will be less than significant. Impacts of the Proposed Project on Surrounding Development Primary project-related noise sources will include vehicular traffic accessing the site, grounds maintenance equipment, and heating, ventilation and air conditioning (HVAC) units. The vehicle mix will be comparable with existing vehicles on surrounding roads. Noise generated by the visitors and employees is expected to be consistent with noise levels at any commercial development, and will not exceed City standards. The proposed project is compatible with surrounding land uses, and operational noise impacts are not expected to exceed acceptable commercial noise standards. Groundborne Vibration Ground-borne vibration and/or ground-borne noise would be generated during construction of the proposed project, which could be felt by adjacent land uses. The primary source of ground- borne vibration will be operation of heavy equipment, such as bulldozers; however, the impacts will be temporary and will end once construction is complete. Furthermore, the site is isolated by roadways and railroad right of way, and groundborne vibration will dissipate prior to reaching existing development to the east. Long-term operation of the project is not expected to generate ground-borne vibrations or noise. Impacts will be less than significant. c)Less Than Significant Impact. As described above, the primary permanent noise sources will be vehicles traveling to and from the site, HVAC units, and grounds maintenance equipment. The proposed project is not expected to results a substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project. Project-related vehicles will be consistent with vehicles already using area roadways. Less than significant impacts are expected. d)Less Than Significant Impact with Mitigation. Temporary noise generated during the construction phase of the proposed project could exceed acceptable noise levels. Primary noise sources will be heavy equipment, some of which will operate in close proximity to sensitive Page 999 -62- receptors, including hotel guests if the hotel is built before the balance of the site. However, these impacts will be short-lived and temporary. The City will require that construction activity comply with Section 9.24.070 of the Municipal Code, which limits construction activity to between 6 a.m. to 7 p.m. on weekdays and 8 a.m. to 5 p.m. on Saturdays. No activity is permitted on Sundays and holidays. Construction of the project will therefore not occur during the sensitive evening hours, when hotel guests would be impacted. This standard requirement will assure that construction impacts on the proposed hotel will be less than significant. e-f)No Impact. The Palm Springs International Airport is located approximately 8.4 miles northwest of the subject property and its noise contours are localized, and not located in the vicinity of the proposed project site. No impacts will occur. Mitigation Measures 1. Project construction activities shall only occur between the permitted hours of the city’s Municipal Code. 2. During all project site construction, all construction equipment, fixed or mobile, shall be equipped with properly operating and maintained mufflers, consistent with manufacturers’ standards. The construction supervisor shall place all stationary construction equipment so that emitted noise is directed away from the noise-sensitive receivers nearest the Project site. Mitigation Monitoring and Reporting Program A. Project construction shall be monitored to assure compliance with City construction hours. Responsible Party: Building Department Page 1000 -63- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XIII. POPULATION AND HOUSING – Would the project: a) Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? X b) Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere? X c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? X Source:Palm Desert General Plan 2004; California Department of Finance, Report E-5 accessed July 2016. Setting The current population of the City of Palm Desert is 49,335 (2016), and the average household size is 2.14 persons. The City is composed of a mix of single family and multi-family development, but the majority (55%) of housing units are single-family homes. The proposed development will be a mixed- use commercial development which will result in a need for employees for hotel, retail stores, restaurants, and similar businesses. Discussion of Impacts a)Less Than Significant Impact. The proposed project will not directly generate population growth in the area. The proposed mixed-use commercial development will result in a number of hotel guests and/or visitors and need for employees for each commercial building development. The facility will generate a need for approximately 150 employees. New jobs are likely to be filled by existing residents, or new residents to the area who will move based on employment and housing opportunities. The Southern California Association of Governments (SCAG) estimates that the City will have a total population of 52,100 in 2020 and 56,00 in 2035. In addition, SCAG estimates that the City will have a need for 6,800 new jobs between 2008 and 2035. The project will provide for some of these jobs, and will expand employment opportunities in the City. Development of the project will not result in any major extensions of roads and other infrastructure that would directly or indirectly attract additional population to the area. Impacts to population growth are expected to be less than significant and will be absorbed by the natural growth of the City over time. The anticipated population growth will be considerably greater than that needed to supply employees to the proposed development. The project will benefit from anticipated population growth, and is not expected to induce it. Page 1001 -64- b-c)No Impact. Currently, the project site is vacant and undeveloped and no residents will be displaced, and no replacement housing will be required elsewhere. No project-related impact is expected. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 1002 -65- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XIV. PUBLIC SERVICES a) Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the public services: Fire protection? X Police protection?X Schools? X Parks? X Other public facilities? X Source:Palm Desert General Plan 2004. Setting Fire Protection: The City contracts with Riverside County Fire Department for its local service. The nearest fire station is Riverside County Fire Palm Desert Station 71 at 73995 Country Club Drive, approximately 4.2 mile southeast of the project site. The City of Palm Desert also receives additional fire support from station No. 55 in Indian Wells and Stations No. 50 and No. 69 in Rancho Mirage, in addition to the services provided by its own stations. The Cove Communities Fire Department has 84 personnel in total, distributed among the three cities, all of which operate under a Regional Fire Protection Program. The station physically closest to the emergency will respond even if it is outside the station’s official jurisdiction. Police Protection: The City of Palm Desert contracts with the Riverside County Sheriff’s Department for police protection services. The nearest police station is Palm Desert Police Department at 73705 Gerald Ford Drive, approximately 1.6 mile southeast of the project site. The police department consists of 70 sworn officers that include 45 deputies, 10 of which are dedicated to traffic enforcement. The City of Palm Desert currently provides about 1.75 sworn officers for every 1,000 residents. The average response time for the highest priority emergency calls was 4.6 minutes. Schools: The City of Palm Desert is located within the boundaries of the two school districts: Desert Sands Unified School District (DSUSD) and Palm Springs Unified School District (PSUSD). Most of the city is served by DSUSD. PSUSD includes the northwestern portion of the city. Both the school districts currently operate four elementary schools, one middle school, one continuation high school, and one high school within the City. The nearest school is Xavier College Preparatory High School, a private school located approximately 2.03 miles northeast from the proposed site. Page 1003 -66- Parks: In the City of Palm Desert, a total of 911 acres are dedicated for parks (General Plan Table III-2). The three types of parks serving the Palm Desert area are community, neighborhood, and mini/pocket parks. The nearest park to the project site is Palm Desert Civic Center Park, approximately 5.5 miles south. Discussion of Impacts XIV. a) Fire Protection Less Than Significant Impact.Development of the project will marginally increase the demand on fire service in the City. The project will not induce population growth requiring additional fire protection services. The project will require fire protection services comparable to surrounding commercial land uses. The development within the project, however, will contribute to the maintenance of fire services through the City’s structural fire tax, which is assessed on property tax bills, and assures that the City can continue to provide fire services as development occurs. Given the site’s proximity to a local fire station, fire personnel will be able to reach the site within the target five-minute response time. Emergency access will be provided to the property via the existing public roadway network. The Fire Department will review the project site plan to ensure it meets applicable fire standards and regulations. No construction of new or expanded fire services or facilities are required for the proposed project. Project-related fire protection impacts will be less than significant. Police Protection Less Than Significant Impact. The proposed project will result in a marginal increase in demand for police services. Project operations will require police services comparable to surrounding commercial land uses. Police personnel will be able to access the site using Monterey Avenue and Dinah Shore Drive. The project will be required to comply with all Police Department regulations and procedures. Project related impacts are expected to be less than significant. Schools No Impact. The proposed project will not require the construction of a new school facility. The project is a mixed-use commercial development that will not increase the City’s student population. The proposed project will be required to pay the mandated school development impact fees to offset increases in student population associated with the employees at the facility. Based on current PSUSD developer impact fees of $0.56 per square foot, Table 9 provides an estimate of developer impact fees that development within the proposed project could generate at build-out. These fees are designed to mitigate impacts to schools. No impact is anticipated. Page 1004 -67- Table 9 Estimated School Mitigation Fees at Buildout Parcel No. Land Use Acres Square Footage (SF) Estimated School Mitigation Fees 1 Hotel 2.65 63,500 $35,560.00 2 Retail 1.11 10,000 $ 5,600.00 3 Fast Food Restaurant 0.73 3,000 $1,680.00 4 Fast Food Restaurant 0.90 4,800 $2,688.00 5 Retail/Restaurant 1.07 8,400 $4,704.00 6 Retail/Restaurant 0.93 6,000 $3,360.00 7 Fast Food Restaurant 0.85 3,400 $1,904.00 8 Retail/Tire Store 1.59 12,185 $6,823.60 9 Auto Sales 5.34 6,815 $3,816.40 10 Retail 1.27 10,000 $5,600.00 11 Retail 1.35 8,600 $4,816.00 TOTAL $76,552.00 Source: Project’s site plan; Palm Springs Unified School District updated fee program (2016) Parks/ Other public facilities Less Than Significant Impact. Project buildout is not expected to impact local and/or regional parks significantly. The project proposes a mixed-use development that will not induce population growth in the area and therefore, would not result in the need for new parks and recreation facilities. No additional public facilities are required for the proposed project to accommodate the employees. Increase in demand for the city’s existing facilities will be less than significant. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 1005 -68- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XV. RECREATION -- a) Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? X b) Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016. Setting Within the City of Palm Desert, there are several mini, neighborhood, community, and school parks, one community center, a Community Health and Wellness Centers, a senior center, and a museum. Discussion of Impacts a, b) Less Than Significant Impact. The proposed project will include onsite recreational amenities at the hotel, as required in the Zoning Ordinance for that use. Hotel guests can be expected to utilize onsite recreational amenities as well as local and regional recreational facilities. The proposed development will not induce substantial population growth that would result in significant impacts to existing neighborhood and regional parks or other recreational facilities. Project-related impacts are expected to be less than significant. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 1006 -69- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XVI. TRANSPORTATION/TRAFFIC -- Would the project: a) Conflict with an applicable plan, ordinance or policy establishing measures of effectiveness for the performance of the circulation system, taking into account all modes of transportation including mass transit and non-motorized travel and relevant components of the circulation system, including but not limited to intersections, streets, highways and freeways, pedestrian and bicycle paths, and mass transit? X b) Conflict with an applicable congestion management program, including, but not limited to level of service standards and travel demand measures, or other standards established by the county congestion management agency for designated roads or highways? X c) Result in a change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks? X d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? X e) Result in inadequate emergency access? X f) Conflict with adopted policies, plans, or programs regarding public transit, bicycle, or pedestrian facilities, or otherwise decrease the performance or safety of such facilities? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; “Focused Traffic Impact Analysis for the I-10 & Monterey Mixed-Use Project”, prepared by Linscott, Law & Greenspan, Engineers (LLC) in June 21, 2016. Setting The project site is located on the northeast corner of Monterey Avenue and Dinah Shore Drive. Access to the project site will be provided via one full-access driveway at Toni Drive and Dinah Shore Drive, one right-in/right-out only driveway along Dinah Shore Drive, and one right-in/right-out/left-in (with restricted left turn) only driveway at the project’s southeastern corner on Dinah Shore Drive. The applied measures of effectiveness for the performance of the circulation system were derived from applicable City standards. The City of Palm Desert has established a goal for Monterey Avenue and Page 1007 -70- Dinah Shore Drive intersection operations and roadway link segment operations of Level of Service (LOS) D or better. The Trip Generation Handbook, published by the Institute of Transportation Engineers (ITE) was used to calculate trip generation for the project. The categories used for the existing site condition analysis are No. 310 (hotel), No. 820 (shopping center), No. 841 (automobile sales), No. 848 (tire store), No. 932 (high-turnover (site-down) restaurant) and No. 934 (fast-food restaurant with drive-through window rates), which correctly describes the proposed development. Linscott, Law & Greenspan, Engineers (LLC) prepared a “Focused Traffic Impact Analysis Report” for the proposed project in October 2016. The traffic analysis was based upon a variety of sources, including the General Plan Circulation Element and the Institute of Transportation Engineers’ 9th Edition Trip Generation Manual (2012). Discussion of Impacts a, b) Less Than Significant Impact with Mitigation Incorporated. The following traffic analysis was based upon a variety of sources, including the General Plan Circulation Element and the project specific Traffic Impact Analysis Report prepared by Linscott, Law & Greenspan, Engineers (LLC). Existing Traffic Conditions The site is currently undeveloped. Existing roadways in the vicinity of the project site include Monterey Avenue and Dinah Shore Drive. Both are designated as an “Arterial” in the General Plan. These roadways carried approximately 32,700 (avg.) and 20,500 (avg.) vehicles per day, respectively, based on year 2000 General Plan analysis. General Plan conditions and traffic analysis indicated that Monterey Avenue at Dinah Shore Drive was operating at LOS B (Palm Desert General Plan; Table III-3). Linscott, Law & Greenspan, Engineers (LLC) calculated existing traffic conditions (2016) along Monterey Avenue/Dinah Shore Drive based on existing traffic volumes and current street geometry. Monterey Avenue/Dinah Shore Drive currently operates at an unacceptable LOS F in the PM peak hour. Traffic Conditions at Project Build-out Four key intersections, in the project vicinity, have been selected to evaluate the potential trip generation as a result of proposed project: Monterey Avenue at Dinah Shore Drive, Toni Drive/Driveway A at Dinah Shore Drive, Driveway B at Dinah Shore Drive (Right-in/right-out only), and Driveway C at Dinah Shore Drive (Right-in/right-out/left-in only – left-turn egress is restricted). The proposed project will generate 7,803 daily trips, with 492 trips (275 inbound, 217 outbound) during AM peak hour and 439 trips (218 inbound, 221 outbound) during PM peak hour on a “typical” weekday (Table 10 & 11). The analysis includes adjustments for internal capture and pass-by. The pass-by reduction factors used in this report are based on information published in the Trip Generation Handbook, published by ITE (2014) and have been reduced by 50% based on engineering judgment. Page 1008 -71- Table 10 Monterey Crossing Project Traffic Generation Rates Daily 2-Way AM Peak Hour PM Peak Hour ITE Land Use Code Enter Exit Total Enter Exit Total Generation Rates: 310: Hotel,TE/RM 8.17 0.31 0.22 0.53 0.31 0.29 0.60 820: Shopping Center (TE/1000SF)4 95.18 1.42 0.88 2.30 3.99 4.33 8.23 841: Auto. Sales (TE/1000SF)32.30 1.44 0.48 1.92 1.05 1.57 2.62 848: Tire Store (TE/1000SF)24.87 1.82 1.07 2.89 1.78 2.37 4.15 932: High-TR1 (TE/1000SF) 127.15 5.95 4.86 10.81 5.91 3.94 9.85 934: Fast-FR2 (TE/1000SF) 496.12 23.16 22.26 45.42 16.98 15.67 32.65 1 High-Turnover (Sit-down) Restaurant2Fast-Food Restaurant with Drive-Through Window Notes: TE/1000 SF= Trip end per 1,000 SF of development and TE/RM= Trip end per room Table 11 Monterey Crossing Project Traffic Generation Forecast Daily 2-Way AM Peak Hour PM Peak Hour Project Description Enter Exit Total Enter Exit Total Generation Rates: Hotel (130 Rooms)806 40 25 65 29 30 59 Shopping Center (38,200 SF)2,520 45 27 72 75 87 162 Automobile Sales (6,815 SF) 176 9 3 12 5 9 14 Tire Store (10,140 SF) 211 19 11 30 12 18 30 High-TR1 (6,000 SF) 579 31 26 57 17 10 27 Fast-FR2 (11,200 SF) 3,511 131 125 256 80 67 147 Project Trip Generation (Sub-Total) 9,340 411 343 754 353 349 702 Total Project Net Trip Generation 7,803 275 217 492 218 221 439 1 High-Turnover (Sit-down) Restaurant2Fast-Food Restaurant with Drive-Through Window Notes: TE/1000 SF= Trip end per 1,000 SF of development and TE/RM= Trip end per room The analysis included two improvements planned as part of the proposed project. These improvements are: Monterey Avenue at Dinah Shore Drive: Eliminate the median and restripe the east leg of the intersection to construct westbound dual left-turn pockets of 160-feet with a 120-foot transition. Page 1009 -72- Toni Drive/Driveway A at Dinah Shore Drive: North leg (Project Driveway A) of the intersection shall be modified to include two inbound lanes, a southbound left-turn lane, and a shared through/right-turn lane. Eliminate the median and restripe the west leg of the intersection to construct eastbound dual left-turn pockets of 145-feet with a 120-foot transition. The existing traffic signal shall be modified as necessary. Multiple intersections, five intersections along Dinah Shore Drive and one intersection along Monterey Avenue, will be synchronized through signal coordination mechanism1 to further improve the overall flow of traffic in the project vicinity. The intersections that will be synchronized include: Miriam Way at Dinah Shore Drive Shoppers lane at Dina Shore Drive Monterey Avenue at Dinah Shore Drive Toni Drive at Dinah Shore Drive Monterey Avenue at Market Place Way The traffic report analyzed opening year (2018) plus ambient growth plus cumulative projects. The analysis assumes that all components of the project will be operational in 2018. This represents a conservative analysis, because project development is expected to occur over a longer time period, as tenants are secured. The analysis shows that with project-related improvements, all of the key intersections are forecast to operate at acceptable levels of service during the AM and PM peak hours, with the exception of the intersection of Monetary Avenue/Dinah Shore Drive which is forecast to operate at unacceptable LOS F in the PM peak hour. Although the intersection of Monterey Avenue/Dinah Shore Drive is forecast to operate at adverse LOS F, the proposed project will not significantly impact that condition, which currently exists. The planned improvements by the project to the intersection, described above, offset the impact directly associated with the project. Queuing Analysis A queuing assessment was also conducted for the proposed project to assess the potential impacts along Dinah Shore Drive associated with the proposed development and the construction of the east-bound left-turn pockets at Driveway A and Driveway C as well as the west-bound left-turn pockets at Monterey Avenue/Dinah Shore Drive. Queuing analysis shows that the proposed turn-pockets along Dinah Shore Drive will provide adequate storage to minimize impacts to through traffic along Dinah Shore Drive. Also, motorists entering and exiting the project site will be able to do so comfortably, safely, and without undue congestion. Site Access and Internal Circulation Evaluation Level of Service Analysis for Project Access Locations Access to the subject site will be provided via one full-access driveway at Toni Drive and Dinah Shore Drive, a right-in/right-out only driveway along Dinah Shore Drive, and a right-in/right- 1 Signal Coordination: The ability to synchronize multiple intersections to enhance the operation of one or more directional movements in a traffic system. Page 1010 -73- out/left-in only (left-turn egress is restricted) driveway at the eastern end of the project on Dinah Shore Drive. Analysis included assumptions allowing for the development of extensive other cumulative projects in the surrounding area, and for ambient growth. On the basis of these assumptions, the traffic study found that all three-project driveways are forecast to operate at an acceptable LOS B or better during the AM and PM peak hours. Overall, impacts associated with the ultimate development of the site will be less than significant with mitigation with onsite and offsite improvements and signal coordination. c)No Impact. The Palm Springs International Airport is located approximately 8.4 miles northwest of the subject property. The development of the proposed project will have no impact on the facilities or operations of regional airports, and will not result in a change in air traffic patterns, including an increase in traffic levels. It will also not create substantial safety risks. No project related impact is anticipated. d)Less Than Significant Impact.The project will be developed in accordance with City design guidelines and will not create a substantial increase in hazards due to a design feature. The project’s access point will be located with adequate sight distances, and project-generated traffic will be consistent with existing traffic in the area. Improvements along Dinah Shore Drive at Monterey Avenue and Toni Drive/Driveway A will be provided to offset the project related impact from the regular traffic. Therefore, project related impact would be less than significant. e)Less Than Significant Impact.Access to the project site will be provided via one full-access driveway at Toni Drive and Dinah Shore Drive and one right-in/right-out only driveway and one right-in/right-out/left-in (with restricted left turn) only driveway at the eastern end of the project on Dinah Shore Drive. A sight distance evaluation was also performed for all three project driveways as well as the proposed left-turn in median break at the easterly project driveway based on criteria and procedures set forth by the California Department of Transportation (Caltrans) in the State’s Highway Design Manual (HDM). Based on the evaluation, a posted speed limit of 45 mph along Dinah Shore Drive, a corner sight distance (7 ½ second criteria) of the Caltrans HDM, and a corner sight distance of 495 feet is required for the proposed project driveways. This will minimize the obstructions within the sight triangle provided by sight lines at the project driveways. Further analysis of existing conditions on Dinah Shore Drive along the project frontage indicates that obstructions, with the exception of landscaping/street trees, along the sidewalks are minimal. Any additional landscaping and/or hardscapes (i.e. monument signs) shall be designed such that a driver’s clear line of sight is not obstructed. All three driveways will also be available for emergency purposes, therefore, emergency access should not impact traffic flow along Dinah Shore Drive significantly. However, prior to construction, both the Fire Department and Police Department will review the project site plan to ensure safety measures are addressed, including emergency access. The proposed project will not result in inadequate emergency access. Less than significant impact is anticipated. f)Less Than Significant Impact.SunLine Transit operates bus routes along Monterey Avenue and Dinah Shore Drive and will provide public transit access to the proposed project. SunLine Page 1011 -74- has adequate capacity in its system to accommodate the proposed project. The project design will not conflict with adopted policies, plans, or programs regarding public transit, bicycle, or pedestrian facilities, or otherwise decrease the performance or safety of such facilities. Less than significant impact is anticipated. Mitigation Measures 1. The proposed project shall construct off-site intersection improvements described above, consistent with the requirements of the City. 2. Signal coordination shall be incorporated mitigate the overall flow of traffic in the project vicinity. Mitigation Monitoring and Reporting Program A. The project proponent shall submit improvement plans to the Public Works Department reflecting added turn lanes and signal coordination, for approval by the City Engineer. Responsible Party: Engineer of record, City Engineer. Page 1012 -75- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XVII. UTILITIES AND SERVICE SYSTEMS. Would the project: a) Exceed wastewater treatment requirements of the applicable Regional Water Quality Control Board? X b) Require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? X c) Require or result in the construction of new storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? X d) Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements needed? X e) Result in a determination by the wastewater treatment provider that serves or may serve the project that it has adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments? X f) Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs? X g) Comply with federal, state, and local statutes and regulations related to solid waste? X Source:Palm Desert General Plan 2004; Palm Desert General Plan 2016; Ordinance No. 1422.3 titled “Ordinance of the Coachella Valley Water District Imposing Revised and Additional Restrictions on Water Use to Comply with Statewide Drought Regulations.”, http://www.cvwd.org/ArchiveCenter/ViewFile/Item/511, Accessed on 08.23.2016. Setting Wastewater Treatment The City works with Coachella Valley Water District (CVWD) to treat and recycle wastewater at the Cook Street Wastewater Treatment Plant. This wastewater treatment plant also serves other communities and has a tertiary water capacity of 20 million gallons per day (mgd). CVWD continually Page 1013 -76- increases the capacity of its wastewater reclamation facilities by constructing new treatment ponds, aeration, and other structures throughout the Coachella Valley. CVWD implements all requirements of the Regional Water Quality Control Board pertaining to water quality and wastewater discharge. Domestic Water The Coachella Valley Water District (CVWD) provides domestic water to the project area. Its primary source of fresh water is groundwater extracted by deep wells from the Whitewater River sub-basin. CVWD’s service area lies in the Whitewater River Watershed, and adopted Ordinance No. 1422.3 titled “Ordinance of the Coachella Valley Water District Imposing Revised and Additional Restrictions on Water Use to Comply with Statewide Drought Regulations” to implement regional management of water supplies. CVWD, as an urban water supplier, is required to prepare an “Urban Water Management Plan (UWMP)” every five years in response to the requirements of the Urban Water Management Planning Act (UWMP Act), California Water Code Sections 10610 through 10656. CVWD’s UWMP is a planning tool that documents actions in support of long-term water resources planning and ensures adequate water supplies are available to meet existing and future urban water demands. In addition to its UWMP, CVWD prepares an annual report each year to document and analyze the region’s water needs and long-term demand for domestic water. This analysis includes conservation measures and replenishment programs to make it possible for CVWD to meet increasing demand of the services area. The proposed project will be required to implement all water conservation measures imposed by CVWD under both normal and drought conditions over the life of the project. In addition, the State Water Resources Control Board (SWRCB) has issued Emergency Order 2014-0718-01E, which mandates water suppliers enact certain water restrictions. On May 9, 2016, the Governor issued an Executive Order to direct the State Water Resources Control Board to adjust and extend its emergency water conservation regulations through the end of January 2017 in recognition of the differing water supply conditions for many communities. The project will also be required to implement the updated 2016 emergency measures, if in effect at the time construction occurs. The proposed project will tie into existing domestic water lines in Dinah Shore Drive. No new wells or additional water infrastructure or entitlements will be required. Storm Water Management Storm water drainage infrastructure within the City of Palm Desert consists of a network of regional and local drainage systems which are ultimately interrelated. The regional and local drainage system includes natural and improved streams, storm drains, storm channels, and catch basins intended to manage stormwater that flows into the Whitewater Storm Water Channel, Deep Canyon Stormwater Channel, Palm Valley Stormwater Channel, Mid-Valley Stormwater Channel, Dead Indian Channel, Ironwood Channel, and Portola and Haystack Channels. The Coachella Valley Water District (CVWD), the Riverside County Flood Control District, and the City of Palm Desert control this drainage system. In 1993, the “Palm Desert Comprehensive Storm Drain Master Plan” was prepared to better manage the storm water runoff in the City. In that Master Plan, the City is divided into four drainage areas (Zone 1, Zone 2, Zone 3, and Zone 4) to manage and divert the runoff into the regional and local drainage systems. The project site is located in the Zone 1 which mainly drains into the Whitewater Channel, Palm Valley Channel, Haystack, and San Pascual Channels. Page 1014 -77- The “Preliminary Hydrology Study” prepared for the project site in 2016 to fulfill the City’s drainage requirements for the entitlement of the proposed project evaluated the 10 and 100 year 1-hour storm runoff conditions. The project site is divided into six areas to divert the onsite runoff into infiltration basins for each area drainage area. Solid Waste Waste Management of the Desert provides solid waste disposal, through a franchise agreement with the City, and will be responsible for collection and disposal of solid waste from the project site. Trash and recycled materials are collected from customers in the City and transported to the Badlands Landfill, located at 31125 Ironwood Avenue, Moreno Valley. Other possible alternatives include the Lamb Canyon Landfill and El Sobrante Landfill. The County of Riverside operates all these landfills. Discussion of Impacts a)Less Than Significant Impact. Buildout of the planning area will include a four story hotel building with 130 hotel rooms, automobile sales building and sales lot, tire store, high turnover (site down) restaurant, three fast-food restaurants with drive-through service, and two additional buildings for retail uses. Development facilitated by the proposed project will result in increased wastewater flows. All development will be required to connect to the existing sanitary sewer system. The CVWD, which operates wastewater treatment facilities in the City of Palm Desert will serve the proposed project and is subject to wastewater treatment standards established by the Regional Water Quality Control Board. All components of the proposed project will be required to design facilities consistent with CVWD and Regional Board standards. These standards and requirements will assure that impacts associated with wastewater standards will be less than significant. b, d) Less Than Significant Impact. The proposed project will be required to connect to existing water lines in adjacent roadways. As previously identified, sanitary sewer service is available in the area of the proposed project along Dinah Shore Drive. The project site will be served by the Cook Street Wastewater Treatment Plant. The proposed project will be responsible for the connections necessary to tie into existing water lines to the standards set by the City and CVWD. The site is being developed with land uses consistent with the parcel’s land use designation for regional commercial uses, which is consistent with the assumptions made by CVWD in their UWMP. Build out of the project will result in an increase of less than 1% in demand over current conditions. This is within the CVWD’s capacity, and impacts associated with water supplies will be less than significant. The City’s and CVWD’s standards and requirements will assure that impacts associated with water conveyance and water supply will be less than significant. c)Less Than Significant Impact. The proposed project will be required to contain the 100-year storm on-site, as required by City standards. The site will be graded to drain to several infiltration basins. From there, concrete ribbon gutters will convey stormwater to the common retention basin in the eastern portion of the property. This system will be reviewed and approved by the City Engineer to assure that it meets City standards. These standards and requirements will assure that impacts associated with storm water management will be less than significant. e)Less Than Significant Impact. The City works with Coachella Valley Water District (CVWD) to treat and recycle wastewater at the Cook Street Wastewater Treatment Plant. This wastewater Page 1015 -78- treatment plant also serves other communities and has a tertiary water capacity of 20 million gallons per day (mgd). CVWD continually increases the capacity of its wastewater reclamation facilities by constructing new treatment ponds, aeration, and other structures. CVWD implements all requirements of the Regional Water Quality Control Board pertaining to water quality and wastewater discharge. There will be less than significant impact to wastewater treatment capacities associated with the proposed project. f, g) Less Than Significant Impact. The City has an exclusive franchise agreement with Waste Management of the Desert for its collection and disposal of solid waste from the project site. All waste generated on the project site will be collected and transported to the Badlands Landfill. This landfills is owned and operated by Riverside County. They have the capacity to accommodate waste generated by future development on the project site. Burrtec is also required to comply with local, regional and state requirements associated with solid waste disposal. Impacts will be less than significant. Mitigation Measures None. Mitigation Monitoring and Reporting Program None. Page 1016 -79- Potentially Significant Impact Less Than Significant w/ Mitigation Less Than Significant Impact No Impact XVIII. MANDATORY FINDINGS OF SIGNIFICANCE -- a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? X b) Does the project have the potential to achieve short-term, to the disadvantage of long-term environmental goals?X c) Does the project have impacts that are individually limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects)? X d) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? X a)Less Than Significant Impact with Mitigation Incorporated: Biological Resources The project site is not located within the boundaries of a CVMSHCP-designated conservation area, and does not contain any wildlife corridor or biological linkage area. However, mitigation measures have been included in this Initial Study to reduce potential impacts to migratory birds to less than significant levels. The proposed project will not significantly reduce fish or wildlife habitat or otherwise adversely impact a fish or wildlife species. Cultural Resources The site has a low probability of containing archaeological resources, and there are no historic structures on site. However, mitigation measures have been included in this Initial Study to assure that impacts associated with cultural resources remain less than significant. With implementation of the mitigation measures provided in this report, impacts will be less than significant. Page 1017 -80- b)Less Than Significant Impact with Mitigation Incorporated: The proposed project proposes a Specific Plan and Conditional Use Permit to support the planned land uses. The project also proposes Tentative Vesting Parcel Map to subdivide the subject site’s two parcel into 11 parcels to further support the mixed-use commercial development. The proposed project will be consistent with the land use designations for the site. The project is also consistent with the commercial development trends in the immediate vicinity. Public utility providers have indicated they will be capable of serving the project with existing and/or planned facilities. Potential environmental impacts are expected to remain at, or be mitigated to, levels below significance, and long-term environmental goals are not expected to be adversely impacted by the project. c)Less Than Significant Impact with Mitigation Incorporated: The project will contribute to the cumulative impacts of development in the City of Palm Desert and broader Coachella Valley. Project construction will contribute to the region’s current exceedances of PM10; however, these impacts will be mitigated to less than significant levels through implementation of City requirements, consistent with the region’s fugitive dust reduction measures. These impacts will be further mitigated to less than significant levels through implementation of air quality mitigation measures. d)Less Than Significant Impact with Mitigation Incorporated: This Initial Study document identifies potential impacts associated with greenhouse gas emissions and TACs, as well as noise impacts as a result of build out of the proposed project. Air Quality The proposed project site would be exposed to Toxic Air Contaminations (TAC) which increase cancer risk. The main source of generated TAC emissions would be diesel truck and railroad emissions generated by the Interstate-10/Union Pacific Railroad uses. Mitigation measures have been included in this Initial Study to assure that impacts associated with TACs remain less than significant. Greenhouse Gas The proposed project will generate greenhouse gas emissions during construction and operation. A set of mitigation measures is included in this Initial Study to minimize the greenhouse emissions and assure that GHG emissions from the proposed project will meet the proposed thresholds of the SCAQMD, through compliance with the City’s ESP. As a result, impacts associated with GHG emissions will be less than significant. Noise The proposed project has the potential to generate high levels of noise during construction; however, mitigation measures will be implemented to minimize the environmental effects and reduce substantial adverse effects on human beings. Suitable mitigation measures have been provided to mitigate the potential impacts to less than significant levels. Therefore, impacts to human beings are expected to be less than significant. Page 1018