HomeMy WebLinkAboutResolution No. 2024-034 Spending Priorities - General Transactions and Use Tax (Sales Tax)RESOLUTION NO. 2024-034
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA EXPRESSING ITS INTENT TO PRIORITIZE
SPENDING OF TRANSACTIONS AND USE (SALES) TAX (TUT)
REVENUE FOR FIRE PREVENTION, PUBLIC SAFETY, PARKS,
LIBRARY, AND INFRASTRUCTURE PURPOSES.
WHEREAS, the City Council of the City of Palm Desert (“City”) is authorized to levy
a Transactions and Use (Sales) Tax (TUT) for general purposes pursuant to California
Revenue and Taxation Code section 7285.9, subject to approval by a majority vote of the
electorate pursuant to Article XIIIC, Section 2 of the California Constitution (“Proposition
218”); and
WHEREAS, pursuant to California Elections Code Section 9222, the City Council
has authority to place local measures on the ballot to be considered at a Municipal Election;
and
WHEREAS, based upon the above, on June 13, 2024, the City Council of the City of
Palm Desert called a General Municipal Election to be held on November 5, 2024, for the
purpose of submitting to the voters the question of whether to adopt an ordinance adding
Chapter 3.26 to the Palm Desert Municipal Code, which would enact a one percent (1%)
TUT until it is ended by voters; and
WHEREAS, pursuant to the proposed measure/ordinance, the TUT is a general tax
enacted solely to raise revenue for the general governmental use of the City and all of the
proceeds from the tax shall be placed in the City's general fund and used for the usual
current expenses of the City; and
WHEREAS, the general fund pays for important City services such as police and
public safety services, street and public right-of-way operations, maintenance and
improvement, community center and recreation services, and other general municipal
services to the public; and
WHEREAS, the City Council desires to adopt this resolution expressing this City
Council’s intent, if the TUT measure is enacted by the voters, to commit to spend future TUT
revenue for various purposes, with certain priorities for fire prevention, public safety, parks,
library, and infrastructure purposes as outlined in the 5-Year Spending Plan and Priorities.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT
DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
6(&7,21 1. Findings. The City Council finds that all of the preceding recitals
are true and correct.
6(&7,21 2. Priorities for Spending TUT Revenue. The City Council
hereby expresses its intent, if the TUT measure is enacted by the voters, to prioritize
spending of future TUT revenue as outlined in the “5 Year Spending Plan and
Priorities”, attached
Resolution No. 2024-034 Page 2
hereto as Exhibit “A” and incorporated herein by reference.
6(&7,21 3. TUT Not Deemed a Special Tax. The adoption of this
Resolution shall not be construed, and it is not the City Council’s intent, to convert the
proposed TUT into a “special tax”, as that term is defined Article XIIIC §1(d) of the
California Constitution, or California Government Code sections 53721 and 53724, or
any combination thereof. Although this Resolution expresses the intent of the
current City Council to prioritize spending future TUT revenues for certain purposes,
the TUT shall remain a “general tax” as that term is defined in Article XIIIC §1(a) of the
California Constitution and as set forth in the proposed TUT ordinance. In the event
this Resolution is determined to convert the proposed TUT into a special tax, it shall be
deemed void for all purposes.
6(&7,21 4. Certification. The City Clerk shall certify to the passage and
adoption of this Resolution and enter it into the book of original Resolutions.
ADOPTED ON JUNE 13, 2024.
KARINA QUINTANILLA
MAYOR
ATTEST:
ANTHONY J. MEJIA
CITY CLERK
APPROVED AS TO FORM:
ISRA SHAH
CITY ATTORNEY
Resolution No. 2024-034 Page 3
I, Anthony J. Mejia, City Clerk of the City of Palm Desert, hereby certify that
Resolution No. 2024-034 is a full, true, and correct copy, and was duly adopted at a
regular meeting of the City Council of the City of Palm Desert on June 13, 2024, by the
following vote:
AYES: HARNIK, KELLY, NESTANDE, TRUBEE, AND QUINTANILLA
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
RECUSED: NONE
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal
of the City of Palm Desert, California, on ___________________.
ANTHONY J. MEJIA
CITY CLERK
Resolution No. 2024-034 Page 4
EXHIBIT “A”
5 Year Spending Plan and Priorities
[attached behind this page]
PRIORITY - FIRE PREVENTION/EMERGENCY RESPONSE
Project #1: Fire Station 102 Construction and Staffing
The City has reallocated bond proceeds intended for lower priority projects to build Fire Station 102. Upon its
opening, the Fire Services costs are estimated to increase $7.5M in the first year to operate the new staion and
ladder truck. Additionally, Cal-Fire who provides the staffing for fire services in Palm Desert through the contract
with the County of Riverside, has implemented new requirements that require additional staffing to accommodate
the various changes including limiting the max number of hours each fire person is permitted to work. The
associated costs immediately increase costs by an additional $3M annually beginning in 2025-26. Revenues
associated with the growth in the North Sphere grow at a much slower pace and will not be able to support the
increased staffing needs to maintain current emergency service levels. Funding from the tax measure could be
used for these costs.
Project #2: Fire Station 33 Rehabilitation
Over a period of years, the City has transferred funds from the General Fund to reserve funds necessary to
rehabilitate the 30+ year old Fire Station 33. Current estimates are at $6M. Costs to house the staff during
rehabilitation have not been included in the budget. Funding from the Tax could be used to pay these costs, while
not limiting service to the community or risking the safety of the staff during that time.
Project #3: Fire Station 71 Reconstruction
Over a period of years, the City has transferred funds from the General Fund to reserve funds necessary to
rehabilitate the 30+ year old Fire Station 71. Current estimates are at $7M. Costs to house the staff during
rehabilitation have not been included in the budget. Funding from the Tax could be used to pay these costs, while
not limiting service to the community or risking the safety of the staff during that time.
PRIORITY - PUBLIC SAFETY
Project #1: Increase Public Safety Patrol Staffing (3)
The Public Safety Committee has identified additional patrols in the City as a priority to address traffic issues and
rising crime rates. The cost for 3 additional police officers is $1.3M in FY 2024-25. Overall public safety costs
typically increase at approximately 3-5% annually. As the City continues to grow, we anticipate the need for an
additional 3 police officers inYear 4 of the plan.
PRIORITY - INFRASTRUCTURE REPAIR AND EQUIPMENT REPLACEMENT
Project #1: North Sphere Flood Control Infrastructure and Emergency Plan
As a result of Tropical Storm Hilary, City staff has analyzed ways to address those areas of the City that were
adversely impacted. The North Sphere was impacted by flooding, silt, and debris that moved eastward from the
Morongo basin. The $6M in cleanup costs were covered by City emergency reserve funds. Staff hopes to recover
approximately $3-4M of those costs through insurance and FEMA claims. However, maintaining and improving
infrastructure, expanding retention basin areas, and ensuring the city's storm water infrastructure network is
properly maintained and improved will be paramount to managing long-term impacts for residents.
Project #2: North Sphere Public Works Staffing (3)
As the City continues to grow, additional public works crews are required to maintain the city's infrastructure
network . Staff estimates the cost for 3 additional crew members to be roughly $360,000 in 2024-25 dollars. The
growth in north PD including new roadways, sidewalk, drainage and park infrastructure and additional staffing or
contracts will be required to maintain new assets. The tax could pay for these costs.
PALM DESERT TRANSACTION AND USE TAX - 5 YEAR SPENDING PLAN AND PRIORITIES
PRIORITY - PARKS, RECREATION, AND LIBRARY EXPANSION
Project #1: Palm Desert Library Construction and Staffing
TheCityhasreallocated bondproceeds intendedfor lowerpriority projectsto helpbuild thePalm DesertMunicipal
Library. Costs are currently estimated at $30M for construction. There currently is approximately $20M in
proceeds available, with the remaining $10M requiring the use of reserves and/or funding from another source
such as the sales tax.
Project #2: North Sphere Regional Park and Staffing
A small portion of the costs for the construction of the North Palm Desert Regional Park is currently covered by
bond proceeds. However, the majority of the $20M estimated costs would be paid through the use of reserve
funds, or funding from another source, such as the sales tax to complete construction. Depending on the ultimate
design and use of the park facilities, additional staffing will be required, which could be paid from the sales tax
funding.
PRIORITY - FINANCIAL RESERVES
Project #1: Replenishment of Emergency and Operation Reserves
The City may be required to use reserve funds to pay for numerous facility maintenance and capital improvement
costsoverthenext5years. Additionally,planningandpreparingfornaturaldisasters,byreservingforemergencies
isimportant,asevidencedbytheswiftresponsetoTropicalStormHilary.PalmDesert'sabilitytorecover fromsuch
events is necessary to support community resilliency. Sales tax revenue would be allocated to replenish the
reductions to reserve in accordance with the reserve policy. This standard supports the City's conintued effort to
maintain fiscal responsibility and not having to rely on debt financing.
Category FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 Total 5-Yr Plan1 cent sales tax25,164,510 25,869,116 26,515,844 27,311,320 104,860,790 Current Planned CostsNew Fire Services Staffing Public Safety 900,000 10,657,440 10,971,472 11,232,818 11,496,338 45,258,067 Fire Station 33 Renovation/Temp Site Public Safety 1,200,000 1,200,000 Fire Station 71 Renovation/Temp Site Public Safety 1,200,000 1,200,000 New Police Services Staffing Public Safety 1,300,000 1,352,000 1,406,080 2,812,160 2,924,646 9,794,886 Storm Channel and Retention Basin Imps Infrastructure/H&S 5,508,000 8,000,000 5,000,000 18,508,000 City-Wide Facility and Equipment Replacement Infrastructure/H&S 8,397,001 9,944,665 7,798,734 12,865,305 9,264,802 48,270,506 New Public Works Staffing Public Works 360,000 370,800 381,924 786,763 810,366 2,709,854 Library Construction ($20M Pd from Bonds) Community Amenity 10,000,000 10,000,000 North Sphere Regional Park Community Amenity 15,000,000 15,000,000 30,000,000 Spending Contingency/Reserve Replenishment Fiscal Discipline/Responsibility2,815,167 2,815,167 Total Planned Costs 16,465,001 32,724,905 40,558,210 52,697,046 27,311,319 169,756,480 Additional Amount needed from Reserve or Other Source (16,465,001) (7,560,395) (14,689,094) (26,181,202) 0 (64,895,690) *Annual allocations are subject to City Council approval through the annual budget process. Spending will be audited annually.** Priority 1 costs will be implemented upon TUT (Sales Tax) Measure approval and Priority 2 costs will follow in years 2-5PALM DESERT TRANSACTION AND USE TAX (TUT) - 5 YEAR SPENDING PLAN AND PRIORITIESPrioirity 1** Prioirity 2 ***Annual allocations subject to City Council approval of Annual Budget