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HomeMy WebLinkAbout2011-09-08MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING THURSDAY, SEPTEMBER 8, 2011 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Mayor Benson convened the meeting at 3:00 p.m. II. ROLL CALL Present: Councilmember Cindy Finerty Councilmember Jan C. Harnik Councilman William R. Kroonen Mayor Pro Tem Robert A. Spiegel Mayor Jean M. Benson Also Present: John M. Wohlmuth, City Manager/RDA Executive Director David J. Erwin, City Attorney Justin McCarthy, ACM for Redevelopment Stephen Y. Aryan, Assistant to the City Manager Rachelle D. Klassen, City Clerk Bo Chen, City Engineer Russell Grance, Director of Building & Safety Lauri Aylaian, Director of Community Development Paul S. Gibson, Director of Finance/City Treasurer Janet M. Moore, Director of Housing Frankie Riddle, Director of Special Programs Clayton von Helf, Information Systems Manager Gary Rosenblum, Risk Manager Andrew Shouse, Asst. Chief, Palm Desert Police/Riverside Co. Sheriffs Dept. Dorian Cooley, Division Chief, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Grace L. Mendoza, Deputy City Clerk III. ORAL COMMUNICATIONS - A (CLOSED SESSION ITEMS) None MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 IV. ADJOURN TO CLOSED SESSION Reauest for Closed Session: A. Conference with Real Property Negotiator pursuant to Government Code Section 54956.8: 1) Property: 72-240 Upper Way West (APN 628-130-007), Palm Desert Negotiating Parties: Agency: John M. Wohlmuth/David J. Erwin/City of Palm Desert Under Negotiation: x Price x Terms of Payment B. Conference with Legal Counsel regarding significant exposure to litigation pursuant to Government Code Section 54956.9(b): Number of potential cases: 2 Upon a motion by Spiegel, second by Finerty, and 5-0 vote of the City Council, Mayor Benson adjourned the meeting to Closed Session at 3:02 p.m. She reconvened the meeting at 4:00 p.m. V. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None VI. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA - Councilman William R. Kroonen VII. INVOCATION - Councilmember Jan C. Harnik VIII. ORAL COMMUNICATIONS - B MR. KENNETH DORAN, Palm Desert, said he would set aside his remarks here for Councilmembers Harnik and Kroonen, because they were not aware of them. However, he was concerned about the City Manager's recent comments on local television Channel 6 regarding the Redevelopment Agency and its activities. His understanding according to Assembly Bill 1290 was that creating public parks and public facilities was no longer a part of Redevelopment activities as defined by the State. In response to comment by Councilmember Finerty, he said he would be dealing with the City Council next year, because they were the ones who hired the City Manager and violated the rules governing recruitment and selection of City employees. He intended to bring up these issues next year at the Editorial Board, and he was still very upset after his telephone call to City Council for a response went unreturned. He asked the City Manager to be honest, show integrity, and 2 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 recant the aforementioned inaccurate statements. He admonished City Council that they were mere stewards of the City and could not make up rules to suit their purposes. DR. SHARON McGEHEE, Superintendent of Schools for the Desert Sands Unified School District, said that on behalf of the Board of Education, herself, and the myriad of students and their families who are positively impacted by the ASES (After School Education and Safety) Program that the City unfalteringly supports year after year, she wanted to personally express appreciation. She said Lincoln Elementary and Palm Desert Charter Middle Schools are recipients of both the City's financial and moral support with its visits and participation in After School activities, adding that they made a tremendous difference for the students. She said they were very pleased with the efforts on behalf of their students and, in turn, hoped the City was happy with the education being provided. IX. AWARDS, PRESENTATIONS, AND APPOINTMENTS A. PRESENTATION OF PROCLAMATION DECLARING THE WEEK OF SEPTEMBER 5 - 11, 2011, AS "NATIONAL PATRIOTISM WEEK" IN THE CITY OF PALM DESERT. On behalf of the City Council, Mayor Pro Tem Spiegel presented the proclamation to Estelle Layton, representing Elks Lodge 1905, Palm Springs. MS. LAYTON said she was honored to accept the proclamation on behalf of the Elks, adding that they were proud to do many things to promote Americanism and patriotism. They have a committee that develops and oversees such activities, including a Flag Day Ceremony at Cathedral City's City Hall, a project of folding miniature flags given to each member of the armed services leaving to fight for our country, and they provide a great deal of support to veterans at Loma Linda Hospital. Additionally, they sponsor a poster and essay contest promoting Americanism open to students of all schools in the area. This year they would also be working with the Cathedral City Rotary Club to promote the "Healing Fields" display of thousands of U.S. Flags at the intersection of Date Palm and Dinah Shore Drives. When asked what Elks do, she said their major projects are ones to benefit disabled children, conduct eye screenings at schools, along with providing scholarships and grants to students. Mayor Benson noted that along with recognizing National Patriotism Week, she invited everyone to the free concert on Sunday, September 11, that would be held in Civic Center Park. It would be a 90-minute program of music and speakers sponsored by the Palm Desert Sister Cities Foundation and the Cities of Palm Desert and Palm Springs to recognize anniversary of the attack on September 11, 2001, and honor all who lost their lives that day. 3 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 X. CONSENT CALENDAR A. MINUTES of the Regular City Council Meeting of August 25, 2011. Rec: Approve as presented. Continued to the meeting of September 29, 2011. B. CLAIMS AND DEMANDS AGAINST THE CITY TREASURY - Warrant Nos. 41, 42, 44, 48, 52, and 56. Rec: Approve as presented. C. APPLICATION FOR ALCOHOLIC BEVERAGE LICENSE by Bristol Farms Store 2319, 73-101 Country Club Drive, Palm Desert. Rec: Receive and file. D. ART IN PUBLIC PLACES COMMISSION MINUTES for the Meeting of March 16, 2011. Rec: Receive and file. E. REQUEST FOR ADOPTION of Resolutions - Setting Forth Findings and Authorizing the Destruction of Paper Records from the Department of Building & Safety that Have Been Digitally Imaged. Rec: Waive further reading and adopt Resolution Nos.: 1) 2011 - 78 - November 2010 Records; 2) 2011 - 79 - December 2010 Records; 3) 2011 - 80 - January 2011 Records; 4) 2011 - 81 - February 2011 Records. F. REQUEST FOR APPROVAL of Contract with Scott Burch Design for Creative Design Services Related to Tourism Ad Campaign Production (Contract No. C31160). Rec: By Minute Motion: 1) Approve the subject contract with Scott Burch Design, Indian Wells, California, in an amount not to exceed $5,500; 2) authorize the Mayor to execute the contract as approved by the City Attorney — funds have been budgeted and are available in Marketing Account No. 110-4417-414-3219. 4 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 G. REQUEST FOR AUTHORIZATION to Participate in the Community Video Tour Book Program Being Developed by CGI Communications in Partnership with the National League of Cities and the U.S. Conference of Mayors (Contract No. C31170). Rec: By Minute Motion, approve participation in the Community Video Tour Book Program with CGI Communications and authorize the City Manager to execute the agreement for said services. H. REQUEST FOR APPROVAL of Program Supplement Agreement No. 007-N for Congestion Mitigation and Air Quality (CMAQ) Funds Between the City of Palm Desert and the State of California Department of Transportation (Caltrans) for Construction of the Highway 111 Sidewalk Improvement Project and Authorize Director of Public Works to Advertise for Bids (Contract No. C23110A, Project No. 697-05). Rec: By Minute Motion: 1) Approve Program Supplement Agreement No. 007-N to the Administering Agency -State Agreement for Federal -aid Projects No. 08-5414R between the City of Palm Desert and Caltrans; 2) authorize the Mayor to execute same; 3) authorize the Director of Public Works to advertise the project for bids. Ms. Klassen asked that Item A - Minutes of the Regular City Council Meeting of August 25, 2011, be continued to the next meeting. Upon a motion by Spiegel, second by Finerty, and 5-0 vote of the City Council, the remainder of the Consent Calendar was approved as presented, with continuance of the Minutes of the last meeting to September 29, 2011. XI. CONSENT ITEMS HELD OVER None 5 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 XII. RESOLUTIONS A. RESOLUTION NO. 2011 - 82 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING THE FISCAL YEAR 2010-2011 BUDGET TO PROVIDE TRANSFER, APPROPRIATION, AND ESTIMATED REVENUES OF UNOBLIGATED FUNDS FROM THE GAS TAX, GOLF COURSE CAPITAL, TRAFFIC SAFETY, PROPERTIES CITY/RDA, PALM DESERT RECREATIONAL FACILITIES CORPORATION (PDRFC), CAPITAL PROJECT RESERVE, AND THE GENERAL FUND. Mayor Pro Tem Spiegel noticed the City's legal fees were $87,000 more than it had budget for last year, yet he didn't recall any major legal issues. Mr. Gibson responded some of the legals were: The rent control issue at Silver Spur Mobile Home Park; the lawsuit with Federal Home Loan Bank dealing with the Energy Independence Program (EIP); and a number of Code and other types of issues. He offered to provide the Council with the list that both Richards, Watson, & Gershon and Best, Best & Krieger provided to staff. Mayor Pro Tem Spiegel stated that in total, the pluses versus the minuses, the City spent Tess than what was planned. Mr. Gibson agreed, stating the budget was decreased by $700,000 due to a decrease in the police budget and staff levels being lower than what was actually requested. Mayor Pro Tem Spiegel moved to waive further reading and adopt Resolution No. 2011-82. Motion was seconded by Finerty and carried by a 5-0 vote. XIII. ORDINANCES A. For Introduction: None 6 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 B. For Adoption: 1. ORDINANCE NO. 1225 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING A DEVELOPMENT AGREEMENT FOR AN 82-ROOM HOTEL AND 59-UNIT RESIDENTIAL CONDOMINIUM PROJECT WITH ANCILLARY USES AND AMENITIES ON 4.97± GROSS ACRES OF CURRENTLY VACANT LAND (4.27± ACRES) AND TO -BE -VACATED FRONTAGE ROAD (0.7± ACRES) LOCATED EAST OF HIGHWAY 74, WEST OF OCOTILLO DRIVE, AND SOUTH OF THE IMAGO ART GALLERY —SUBJECT PROPERTY ADDRESS KNOWN AS 45-640 HIGHWAY 74, Case No. DA 09-507 (PDH Partners, LLC, Applicant). Associate Planner Tony Bagato stated this was the second reading for the Development Agreement (DA) that was approved as part of the previous decision for the hotel. He said development agreements are adopted by an Ordinance and requires a second reading. Councilmember Finerty stated that since this was the second reading, the Council had the option to make changes. One of them was making the property non -transferable, and she would like to get the Applicant's answer on that. Also, many of the proponents were passionate about all the job creation, the Transient Occupancy Tax (T.O.T.), and revenue to the City, but the DA is written for ten years, which was too long a time. She previously had mentioned tightening up the DA, and one way to accomplish that was by making the term three years and adding a non -transferable clause so that the entitlements given to this particular project cannot be sold to another developer. MR. ANDREW K. FOGG, Cox, Castle, & Nicholson, Attorney for the Applicant, stated the terms of the DA was at the City's discretion, which can be 10, 20, 3, or 5 years, and it was up to the City and Applicant to work it out as a contract. However, given the current environment, they would have concerns with a shorter term. He said they would like the entitlements to be there and ready to go as soon as the market indicates it's ready, but they didn't know when that will occur. He said there is a strong market and demand for this product in the Desert, and it will come hopefully soon, but they could not predict the timing. He said the DA allowed those entitlements to stay in place for certainty for both the City and the developer so that the City knew what it was getting. He said the DA included significant protections to the City, in terms of the amount of Furniture, Fixtures & Equipment (FF&E) budget that will be spent per room, which was at least $75,000; a significant investment in a 5-star upscale hotel. 7 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 He said there are other commitments as well, so the ten-year term is an appropriate one in order to have certainty that the project can actually get built and the entitlements can be used in that time frame. On the transferability, the Applicant already stated they have no intention of transferring the property, they are not engaged in any discussions with anyone, and entitlements of this nature ran with the land. He said the DA can provide protection to the City, it can provide notice and information about a future buyer, which would not be a problem, but to hamstring and limit the entitlements to one specific developer is problematic, because they didn't know if that developer is going to be the best one at the time to build the project. He isn't talking about the Rosewood brand, but the actual person who will be pulling building permits, constructing it, and meeting all the obligations of the agreement and approvals, which is PDH Partners, LLC. He urged the Council to pass the DA as crafted today, stating it provided significant benefits and certainty to both parties, and it was a fair and balanced agreement. He said his firm had done many development agreements for terms much longer than ten years, because it's a commercially reasonable term for both a city and developer. Councilmember Finerty stated that if the Applicant had no plans to transfer or sell the property, she questioned why there would be reluctance to enter into a non -transferable clause. With respect to the terms of ten years, the proponents who spoke in favor of the project are thinking jobs will be created shortly to help them now, but that is not the case. She said the way to make that come to fruition is to tighten up the DA; therefore, she asked for a continuance of this item so that Mr. Fogg can talk to the Applicant with respect to the three-year term, and non -transferable language, unless he had a definitive answer at this time. MR. FOGG stated he understood her position and believed it was addressed at the last meeting when those issues were considered. However, they need to develop a project such as this one when the market is ready; otherwise, one can create a failed project. He said if they agreed to a three-year term and the market wasn't ready, it would be a disaster for the City and everyone involved. He said PDH Partners and Rosewood would love to be breaking ground in the next year or two, which would be great, but the market is substantially uncertain. However, they know this product can be financed, but they didn't want to develop a product when the market is not ready to absorb it. He said the ten-year term provides certainty that there is a window, and he really didn't think they could deviate down to a three-year term or even less than ten. He said it would be the same issue on the transferability, because it provides the ability for the developer, the right party, to be able to develop a product that meets 8 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 the needs of the City. He said if Friedman Equities went under two years from now, but there is another developer who is ready, willing, and able to meet all of the commitments of the DA, including the standard of the FF&E budget, standard of operations, and are ready to go, why would the City want to give up the opportunity and cause it to reconsider those entitlements. He said if the City is tied to one party, and due to changed circumstances something else happens, the City will receive notice because the property can be sold, but that is not the intention. He said they couldn't predict the future, but having a non -transferability clause places unnecessary constraints on entitlements that could ultimately work to the City's disadvantage. Councilmember Finerty disagreed. Additionally, she said Mr. Joblon provided the Council with five letters from companies that are willing to finance the project, and based on what Mr. Joblon said, they are ready to go and just need the entitlements; therefore, one out of five should come through. Another thing that is not locked, is the guarantee that it will be Rosewood. She said when a developer asks for a variance, the development agreement is where the City has an opportunity to protect the residents and properties to ensure it is getting what they are bargaining for. MR. FOGG responded that Mr. Jobion's actual statements were that three items were necessary in order for the lenders to commit, which is the entitlements, negotiated hotel operators' agreement, and approved construction documents, which shows the lender exactly what they will be financing. He said the lenders that submitted the letters have all expressed an interest based on the proposal and track record of this developer. He said the conceptual design with height, elevations, and setbacks are known, but the interior design, in terms of fits, finishes, and the various nuances included in creating a product of this type have not been solidified. He said that portion will go before the Architectural Review Commission twice at two different levels in order to ensure the ARC is comfortable with the materials selected. He said all of these things are part of the process and the project as a whole was not at the 85-yard line, they were closer to the 30-yard line and still working its way through. He said there was a lot yet to be done in terms of being ready to get $120 million of construction financed. Mayor Benson asked if she understood him to say they hadn't negotiated with Rosewood yet. MR. FOGG responded they had a letter of intent with Rosewood that outlines the terms of the agreement between Rosewood and the hotel developer. The standard practice in this field is that once the 9 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 entitlements are secured and they know exactly the square footage, the back of the house, the number of rooms, the common areas, and all the things that go into the hotel, that's the point where they can actually negotiate the hotel operating agreement, which is 300- to 400 plus pages once you get into the exhibits, regulations, and conditions. He said it was not something hotels ever negotiate prior to entitlements. Further responding to question about using Rosewood's name, he said PDH Partners has a letter of intent with Rosewood; therefore, they have a binding agreement and are bound to negotiate with them in good faith. It is both their intentions that the final hotel operating agreement gets completed, but that is the next step in the process. He said the basics of the terms are worked out, but if things didn't work out with Rosewood, there are a few other operators in the market that could potentially come in and be a 5-star type hotel like a Montage or something along that product type. He said the City has incorporated provisions into the DA to assure a 5-star standard regardless of what the hotel flag is. He said the City will see a minimum of $75,000 per room in FF&E. He said an average 4-star hotel like a nice Western or one of that nature, may approach $50,000 per room. He said the City will likely see an excess twice that amount spent on this hotel on a per room basis. He reminded the Council that Rosewood submitted a video at the last meeting, and they expressed their strong interest in this property and strong interest to negotiate this hotel agreement. He said to bind the developer to a specific flag as part of the entitlements would create difficulties, because If Rosewood was to have a problem and not be able to go into the site, the developer would not have the option of doing a Montage. He said it would create different actions and unnecessary constraints, when the issue is how to get a 5-star hotel. He said Mr. Joblon was up front when they were doing the design of this building, and he spoke with Rosewood, Montage, and others in order to get them all to agree this was a product they could be excited about and one that represented their brand well. Ultimately, Rosewood appeared to be the best fit, but in the end, they want to have that flexibility to make the best decision for the product. He said they want a product that Palm Desert can be proud of and one that can succeed, which is what they are trying to accomplish. Mayor Benson stated it appeared to her there was some deceiving advertising, because the only thing heard was that it was going to be a 5-star Rosewood Hotel, which is not necessarily true - - it's false. Councilmember Finerty moved to, by Minute Motion, continue to the meeting of September 29, 2011, to allow Applicant to discuss: 1) Reduced term of Agreement from 10 to 3 years; 2) non -transferability clause; 3) possibility of how to identify the five-star operator (i.e., Rosewood, Montage, etc.). 10 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Councilman Kroonen stated he was in substantial agreement and believed the Council needed to probe in those areas further. Councilman Kroonen seconded the motion. Councilmember Harnik stated everyone was passionate about this project in one area or another. However, she was not necessarily married to Rosewood, but certainly did want the best operator for the site. She agreed there are some concerns about the time frame, but imagined that if the Council was pulled, each would vary in their opinion. She said it was in the best interest of this project to continue it until September 29 to look at this and make sure the City had an agreement that everyone was comfortable with and felt the very best going forward. Mayor Pro Tem Spiegel concurred. Mayor Benson called for the vote, and the motion carried by a 5-0 vote. Mayor Benson stated she had overlooked a speaker card and invited Bridget Zappia to the podium. MS. BRIDGET ZAPPIA thanked the Mayor for the opportunity to speak, but instead opted to write the Mayor a letter. 2. ORDINANCE NO. 1227 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, TO COMPLY WITH PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH IN ORDER TO PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM. Mr. Wohlmuth stated this item dealt with AB X1 27, which is the alternate financing where the City will pay the State between $17- to $20 million to keep the Redevelopment Agency; potential payments will be made January 15 and May 15, 2012. Councilman Kroonen moved to waive further reading and adopt Ordinance No. 1227. Motion was seconded by Spiegel and carried by a 5-0 vote. Mr. Wohlmuth noted that later under City Manager's Report and Remarks he would like to add two assembly bills relating to Redevelopment, stating he had received correspondence from Assemblyman Nestande requesting the City's comment on them. 11 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 XIV. NEW BUSINESS A. REQUEST FOR DIRECTION REGARDING PROPOSED CATHEDRAL CITY SPHERE OF INFLUENCE AMENDMENT 2011-03-4 AND REGARDING POTENTIAL GROWTH OF THE PALM DESERT SPHERE OF INFLUENCE NORTH OF INTERSTATE 10. Mayor Benson requested staff present the two issues as two separate items, because she didn't think the proposed Cathedral City's Sphere of Influence Amendment had anything to do with the potential growth of the Palm Desert Sphere of Influence areas north of Interstate 10. Ms. Aylaian stated Cathedral City recently expanded their city limits and Sphere of Influence (SOI) north of Interstate 10 (1-10). She displayed a map that showed the cities and the SOI. She said Palm Desert's SOI included areas in the Cahuilla Hills, Bermuda Dunes, and north of Interstate 10. Cathedral City currently has city limits on both the south and north sides of 1-10, and as a result of a two-year process, they expanded their SOI to the east. As part of that process, Local Agency Formation Commission (LAFCO) requested that the Thousand Palms (TP) area not be bifurcated and for Cathedral City to expand their SOI to include the rest of the TP area. Staff is looking for policy direction on the proposal that is now under consideration and will be subject of a public hearing. The area that is now proposed to be amended into Cathedral City's sphere includes the Jack Ivy Ranch and further to the east the Classic Club, along with the undeveloped areas. The TP residents and LAFCO are in favor of including all of TP and keeping it together as a single community. It will include the undeveloped areas, which would have the greater potential for growth and financial liability and is now under consideration. She said both the sphere of influence and city limits are determined by policy decisions that come from the City Council and staff is recommending against the expansion of Cathedral City's SOI for two technical reasons. One is based on a public safety concern, which ties into fire service. The second is based on land development and aesthetic control. She displayed a map and pointed to the green shaded area, which represented Cathedral City's proposed addition to its SOI and the marks in red are existing fire stations in the Coachella Valley. She explained the southeast portion of the proposed Cathedral City SOI Amendment is bound on the north by habitat conservation lands and on the south by the City of Palm Desert, and there is one fire station in that area. The blue shaded area is the planned and new fire station that are to be added in the not too distant future. She said at this time, it is not predicted there will be any growth in any city's SOI or any development; therefore, it is unlikely that a fire station will ever be added to serve. She said Palm Desert contracts with Riverside County Fire who provides fire services for the City and the unincorporated Riverside County areas. Consequently, if Cathedral City annexes the proposed SOI area, calls for assistance and responses will likely fall to Palm 12 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Desert fire stations or within Rancho Mirage, because the rest of Cathedral City's fire stations and their infrastructure are too remote for a timely response. Staff felt it would be placing an undue burden on Palm Desert's public safety to have such a small area north of 1-10 so adjacent to Palm Desert, but under the control and response of another city, which in this case was Cathedral City. The second concern is relative to land use and aesthetics, specifically the narrow strip of land that is 200-feet wide between the 1-10 and the railroad tracks that are near the Gateway and Walmart Center. She said this strip of land is not part of Palm Desert and is currently under the control of Riverside County, which has not always been a happy relationship due to the erected billboards in the past. She said technically the narrow strip is Riverside County, and the County did a General Plan Amendment and Zoned it appropriately, and went ahead and erected billboards from which they derived revenue. She said Palm Desert spoke against it at every opportunity and ultimately filed suit, but was unsuccessful. She said turning that space over to another city that is not located in Palm Desert will be loss of control that staff is concerned about. She said it is very uncomfortable having another jurisdiction have control over what your city looks like to the millions of people that passed by on 1-10 every year. She said another city's decision making would not necessarily be coincident with Palm Desert from a land use or aesthetics standpoint, and their decisions may derive upon revenue and not upon other concerns. She said the strip of land is currently not in the Palm Desert's control, which is something LAFCO would be willing to address at some point, if the City so desired; the City of Rancho Mirage has the same concern and would like to get control up to the central line of the freeway. She said it was not a good situation now, and turning it over to another city would probably just make the matter worse. She said for the two reasons stated, staff would recommend against Cathedral City's proposed SOI Amendment. Although staff was recommending against the Amendment, LAFCO would not want the proposed area to stay unincorporated and not in anyone's SOI, because then it will never be serviced and it will never be financially viable as its own city, but yet completely surrounded by other cities. Therefore, they would probably prefer to see it attached to either Palm Desert or Cathedral City SOL She said if the Council didn't want to see this portion of land attached to Cathedral City SOI, she asked if the Council was interested in having it attached to Palm Desert SOI and did it want to pursue that consideration. Councilmember Finerty asked who provided fire service for the unincorporated section of Riverside County. Ms. Aylaian answered County Fire whom the City contracted with. Councilmember Finerty stated she needed to understand the difference between whether the proposed area would be under Cathedral City SOI or unincorporated area, and how that would impact Palm Desert's resources. 13 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Chief Cooley responded Cathedral City's resources are remote from anything being served out in the unincorporated areas; therefore, service will continue to come from Palm Desert. Currently, County Fire resources from Rancho Mirage and Palm Desert backup the TP station and that area, and because Palm Desert is part of the County Fire system, there is a lot of give and take. He said Palm Desert stations may run a few calls in Jack Ivy Ranch, but Palm Desert regularly received backup coverage from the Thousand Palms engine. However, when that TP station moves to an outside agency, Cathedral City Fire, it will no longer be part of the County Fire dispatch system and won't automatically get sent to calls in Palm Desert for backup, so there won't be that daily give and take of resources from Palm Desert's standpoint. He said there is always mutual aid and a little bit of reciprocity, but it will be fairly one-sided. Councilman Kroonen asked if the TP fire station went with the proposed Cathedral City SOI. Chief Dooley answered yes, stating there is legal precedence that determines that, and in a nutshell, the taxpayers pay for that station; therefore, the residents in the area still gain the benefit of it. He said County Fire wasn't concerned about losing the station and it didn't impact their training center there, this was more of a concern from a Palm Desert standpoint. Ms. Aylaian pointed out this transition would happen when and if Cathedral City was to actually annex into TP, and as long as it was only in the sphere, things will continue to operate as they are, but obviously pursuing a SOI was the first step toward incorporation. Responding to question about the County's position, she said she didn't know. Chief Dooley stated he spoke to the Fourth District Supervisor's office this afternoon and the Supervisor himself had not taken a position on this issue. Councilman Kroonen asked if the area that Cathedral City's is proposing abuts to the narrow strip area near the 1-10 corridor. Ms. Aylaian answered yes. However, she would not blame or say Cathedral City is responsible for actually asking to come across the freeway and take that portion of area, because that is how the previous annexations and previous decisions have been made that they left this peculiar strip there. Mayor Pro Tem Spiegel asked if the City can apply for that strip of area and make it part of Palm Desert SOI, because it made sense to do so. Ms. Aylaian answered yes, stating a feasibility study would be required. 14 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Mayor Benson noted that when the City conducted the last study, it specifically looked at not jumping to the other side of the freeway, because a lot of that land is undeveloped. Councilmember Finerty agreed, stating that if Palm Desert continued to the other side of the freeway, the City's public safety standard would need to be continued, but that would need to be weighed with what impact it would have to the current 50,000 residents. Councilmember Harnik and Councilman Kroonen asked for clarification on the 200-foot wide strip of land. Ms. Aylaian explained there was physically a 200-foot wide strip of land between Palm Desert and the freeway over which Palm Desert did not have control. Mr. Wohlmuth added the former City policy was that Palm Desert city limits ended at the south rail right-of-way. He said there is a rail right-of-way and a CalTrans rail right-of-way, and Cathedral City includes both in their SOI change. If Palm Desert wanted to take the center line of 1-10 to the south of the rail right-of-way, a feasibility study would be required. The prior Council's rationale was that it had a lot of public safety concerns, because of the potential for derailment and paramedic services it will need to provide due to the many accidents on the freeway. He said people get free transport in Palm Desert whether they're a resident or driving through, so that was a significant exposure to Palm Desert, which is why the prior Council did not include that area in Palm Desert city limits. Councilmember Finerty stated that when the City conducted a feasibility study for Bermuda Dunes, the Council faced essentially the same issues with public safety and the drain it will be on the 50,000 residents of Palm Desert, because the City would then be required to bring everybody up to standard. She said in today's economy, she would be concerned about taking on anything new and would prefer to take care of the existing 50,000 residents. Mayor Pro Tem Spiegel disagreed, stating the City needs do a feasibility study to see whether that area should be in Palm Desert's SOI, because that's where people think the city limit ends. Councilmember Harnik concurred, stating she would like more information. Mayor Pro Tem Spiegel moved to: 1) By Minute Motion, authorize staff to get feasibility study on the 200 feet of territory between the existing northern City limit and the freeway. Motion was seconded by Kroonen. 15 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Councilmember Finerty asked if the study on the 200-foot strip for the purpose of allowing Palm Desert to perhaps consider going across the freeway as a SOI. Mayor Pro Tem Spiegel responded he would like to see what the cost and ramifications are. Councilman Kroonen asked where did that leave the Council with the balance of the proposed Cathedral City SOI Amendment, because the Council is being asked to give staff direction. Councilmember Finerty asked how much would a feasibility study cost for 200 feet and/or continue until staff knew how much it would cost. Mayor Pro Tem Spiegel stated he would rather vote on this tonight. Ms. Aylaian agreed to come back with the cost, but the Council's input into Cathedral City's request needed to be in by the following day. Councilmember Finerty suggested a motion with not to exceed amount. Mr. Wohlmuth stated the process to do a feasibility study would take a couple of weeks to get a consultant and imagined their work will take 30 to 60 days to complete. He said LAFCO is looking for comments on this SOI issue and is being heard on September 29. He can initiate a Request for Proposal to find out what the cost and scope of work will be, but the Council will not have an answer by the time comments are needed to LAFCO. Ms. Aylaian confirmed the City couldn't meet the date LAFCO has set with a feasibility study in hand. Mayor Benson stated the City didn't have to comment on Cathedral City SOI Amendment, but it can go ahead on finding out the cost of the feasibility study for the 200 feet of land. Mr. Wohlmuth pointed out that by that time the strip may already be in Cathedral City's SOI. Ms. Aylaian agreed, stating the City may lose that opportunity. She offered to craft a letter to LAFCO letting them know Palm Desert is very concerned about this issue and it will be undertaking feasibility studies. Responding to question about who was attending the meeting, she said she was planning on attending the LAFCO meeting to deliver the City's comment. Mayor Benson called for the vote and the motion carried by a 5-0 vote. 16 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Responding to staff for clarification on what to convey to LAFCO, City Attorney Dave Erwin suggested staff indicate to LAFCO that the City is interested in looking at the 200-foot portion of land and would like for them to continue their decision to allow for that process to be completed, and if they are not willing to do that, it can object to the Cathedral City expansion. He believed that unless the City objected to that portion of it, it is possible that LAFCO can go ahead and approve the SOI as requested. He said LAFCO is looking for the Council's comment and hoped they will continue it, but in the abundance of caution, that at least as to the 200 feet, the City would object to that part of the sphere. Councilman Kroonen asked why not take that a step forward and say it objected to the entire assumption of that territory until Palm Desert had an opportunity to study it further. Councilman Kroonen moved to, by Minute Motion, formally object to the Cathedral City Sphere of Influence Amendment 2011-03-4 pending before LAFCO in order for the City to have sufficient time to give the matter further study. Motion was seconded by Finerty and carried by a 5-0 vote. Mr. Wohlmuth asked if the previously approved feasibility study was for the 200 feet plus the green shaded area of the map. Councilmember Finerty answered no, stating it was just the 200 feet to get the Council to the point where it can look at making that strip part of Palm Desert SOI, because that other portion couldn't even be entertained unless the 200 feet issue is resolved. Councilmember Harnik asked if it wouldn't be financially more efficient to do the entire feasibility study on both portions and break them down separately, but do them at the same time. Mr. Wohlmuth stated one of his thoughts was to look at Palm Desert's own SOI, which is Sun City, the areas west of Washington, and Bermuda Dunes, because LAFCO staff has attached Bermuda Dunes to any discussion of annexation of Sun City. He said the feasibility study for the 200 feet can be alternate one, a separate number could be added in for Sun City, and a third number for Bermuda Dunes, so that the Council can know what the total feasibility of Palm Desert's potential SOI request would cost. Councilmember Finerty stated this feasibility study can be taken in two separate votes and however staff puts it together for financial reasons was up to staff. 17 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Mayor Pro Tem Spiegel disagreed that Sun City and Bermuda Dunes are part of the same annexation, because they were not put in the SOI at the same time. Councilmember Finerty stated it was her understanding that LAFCO staff has indicated that Palm Desert had no direct link to hop from Palm Desert to Sun City and would have to take Bermuda Dunes. Mr. Wohlmuth agreed, stating LAFCO staff didn't want to see an island when there is only one point touching. He said the City could argue with LAFCO that it wants to look at annexing Sun City and not Bermuda Dunes, which is an application. MR. BUD ENGLAND, City of Cathedral City, stated the Council received excellent background on how the City of Cathedral City was asked to proceed into moving into a SOI over the entire region of Thousand Palms (TP). He said originally part of the application was the 4,100 acres, and attached to it was LAFCO's wisdom to take a look at the whole community of TP, because they didn't want to create an island, and the residents didn't want to get split up. Therefore, Cathedral City agreed to take a look at a feasibility study of what it's going to look like as far as the whole community of TP. He served as part of the 2x2 Committee and he and Gregg Pettis and staff have had ongoing discussions with community leaders, town council meetings, and with Supervisor's staff in moving forward. He said currently the City of Cathedral City provides dispatch communication with the City of Desert Hot Springs (DHS); it contracts with them to provide them service. Cathedral City also has joint agreements with Palm Springs, DHS, and Rancho Mirage, which is CalFire for mutual aid contracts, which came in place because of the Agua Caliente Casino, whereas they have a straight shot down Ramon Road into the Agua Caliente Casino. He said Cathedral City has all those things in place that Palm Desert City staff covered and has had concerns. He said because Cathedral City hasn't done a feasibility study yet, he was unaware of that small strip of land, but as a Councilmember he wouldn't want another city coming across the freeway and having a small strip. He said if Cathedral City was there, they wouldn't want it, because it wouldn't make sense to have it and not be able to do anything with it other than provide service. He said it would be a great opportunity to do a friendly amendment to LAFCO's desire with regard to the application that is on file to take out that particular portion; whether it was the 200 feet or the center of the freeway, because this was all in negotiations. Responding to question he confirmed Cathedral City has moved to include the yellow -shaded area into it's SOI, but it was pending. He said a few years ago that area was part of the City of Rancho Mirage and they removed their SOI back to the 1-10. He said Cathedral City looked at continuity, because they have some large land owners north of 1-10, Katrina Heinrich being the majority of the land owner, who is looking to provide services 18 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 coming through Thousand Palms through that 4,100 acres, which she is a part of and bringing it up into the northern sphere of their city limits. The concern with the community leaders of TP is they didn't want to give anything up, but they saw the writing on the wall that they wouldn't become a City. He said the Multiple Species Habitat Conservation Plan (MSHCP) is a very large buffer between Sun City Del Webb and the back side of TP, and that portion isn't thrown into the SOI, because there is no rationale for including it. He said the City of Cathedral City is trying to open it up in order to have ongoing communications with the residents, because it basically came down to a vote of the residents of TP on whether they would like to be part of Cathedral City's SOI. With regard to the 200-foot strip, he said a friendly amendment to LAFCO would be in order and didn't think the City of Cathedral City or LAFCO staff would object. MR. SERGIO L. NUNEZ, Thousand Palms, stated vision meant the act or power of anticipating what will come to be, a prophetic vision, or a vision entrepreneur. The success of a City should not diminish the ability of a municipality to have a vision of its future. He said if this Council can imagine a location within the City of Palm Desert that would elevate itself to an elite status among communities, perhaps the subject SOI can be zoned Mix -Use for equestrian use, entertainment, industrial, and affordable housing. He said an equestrian community anchored by a municipal polo field would open doors to needed revenue and perhaps holds private/public joint ventures, international polo championships, and horse shows during the season to draw more interest into the City of Palm Desert. He said this location is ideal due to its approximate center to the Valley with its supporting amenities and roads. He said maximizing the revenue of a community investment would be greatly improved by allowing the land to be used for polo field facilities and other venues. He said the Coachella Valley Music Festival will generate approximately $24 million in ticket sales alone in 2012. He said the City of Indio has already attached a $1 per ticket tax that would generate an additional $200,000 for City coffers, and sales tax from sold -out hotels. The zoning of the Mix -Use Master Plan Development is simplified if that location is vacant land. For example, the Ivy Ranch infrastructure can be laid out for that to attract research, science, technology, business, and real estate. He said this high -quality industrial park can also benefit from the existing Coachella Valley Enterprising Zone. He asked the Council not to miss an opportunity here to develop its own spectrum, because there have been many plans that have done no more than gather dust. He said the difference between effective and ineffective planning is more often than not politics. He said plans call for a vision to be successful. MS. PATRICIA SALEH, Thousand Palms Community Council Member, stated she came before the City Council prior to Cathedral City asking for a SOI. She met with then Councilmen Spiegel and Ferguson to ask them if they were interested in taking in TP, because Cathedral City was interested 19 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 in doing just that. At that time, the response from Palm Desert was that it was not interested. In further studying Cathedral City they learned it matched the demographics of TP very well. The only thing that TP was trying to avoid was being split up and cut down to a small island. With respect to the strip of land on the south side of the railroad, she agreed with Mr. England that it wouldn't be a problem to take that out of the Cathedral City proposal. However, if Palm Desert is considering changing its position about taking in the land north of 1-10, that would not be acceptable to Thousand Palms. She said their Chamber of Commerce, Shenandoah Springs, and Ivy Ranch is representative of the 4,400 people in TP that has indicated to LAFCO they would like to go with Cathedral City. She said Supervisor Benoit wrote a letter to LAFCO approving the original request as long as it took all of Thousand Palms. Ms. Aylaian stated Mayor Pro Tem Spiegel at the last City Council meeting stated he was interested in examining further the concept of bringing Palm Desert existing SO1 north of the 1-10 into the City through annexation, which staff is following up on. She said the SOI north of Palm Desert is bound by the MSHCP, Indio and Indio SOI on the east, and on the south in our existing SOI is the Bermuda Dunes area. She displayed a map and pointed to the locations of Sun City, residential, and commercial development. She said to examine the area, the City would need to do a feasibility analysis and determine what the implication would be for providing services and what the tax revenue would be associated with the areas north of 1-10. Staff has spoken at length with LAFCO staff and they have said they would not recommend in favor of annexation without Bermuda Dunes, because then it will be surrounded by incorporated cities and never have a chance to be able to be self-sufficient from a financial or fiscal standpoint. Therefore, LAFCO's staff recommendation to the Commission would be that the Sun City area only be allowed to be annexed if Bermuda Dunes was annexed as well. She said the Commission is made up of elected officials and sometimes their policy is not consistent with recommendations that are made to them from a technical level, and she didn't know how they voted. She said staff is looking to the City Council for direction and would welcome comments from the City's newest Councilmembers on their concept/vision for expansion or growth of the City, specifically knowing what their thoughts are on north of 1-10 and Bermuda Dunes and if they are interested in having a feasibility study on annexing any of the areas in Palm Desert's SOI. MR. DON HEIN, Vice President of the Board of Directors of Sun City, noted that many members of their Board, delegates, and residents were present this evening. He said they are obviously very interested in this feasibility study and would like to take part in reviewing and checking the facts and figures. 20 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 MS. ANNE LEACH, Treasurer of the Sun City Board, stated she along with members of the board hoped the Council will decide to take this opportunity to obtain current information by conducting a feasibility study on an issue that stands to affect so many. She hoped the perimeters of the study will include the Bermuda Dunes SOI as well as the north 1-10 SOI. Additionally, that these two areas are studied and reported on separately so that the numbers can be evaluated. MS. HELEN MCENERNEY, Sun City, Palm Desert, stated she was the former general manager and vice president of Del Webb California Corporation at Sun City, proudly housing nearly 5,000 homes. She commended the Council for at least considering a feasibility study and expenditure to see if it was fiscally viable to act at some future time as it relates to Sun City, Palm Desert. She said they would like to see some growth north of 1-10, because from their financial analysis both from several years ago and most recently, the growth has been positive. She trusted the Council will approve the feasibility study and will find the same fact both in the residential sector as it relates to homeowner taxes, but also the in the strong commercial property along the 1-10, including Stater Bros., Walgreens, restaurants, etc. She noted the budget at Sun City when Del Webb was there was about $11 million in terms of revenue they managed, which she believed was now closer to $15 million. She said $1 million covered security, because Del Webb made sure the wiring for security and alarm systems and patrol was covered in the budget. She said the Council needed to keep in mind that money has been set aside. She said for an active adult community, it was very safe, which they are proud of. Mayor Pro Tem Spiegel stated Sun City came into Palm Desert's SOI a few years ago, because they came to the City and asked for it. He said Sun City was afraid to be taken over by the City of Indio. He believed the Council voted unanimously to include them in Palm Desert SOL He said it's an area that takes care of itself, it has the infrastructure, roads, gutters, sidewalks, and things that are needed to be installed to make it part of the City. He personally would like to do a feasibility study to see what the results would be of taking in the area north of 1-10 that is currently Sun City with the adjacent commercial -retail area. Mayor Pro Tem Spiegel moved to, by Minute Motion, authorize staff to obtain feasibility study on territory north of 1-10 for Sun City and the adjacent commercial -retail area only. Motion was seconded by Kroonen. Councilmember Harnik stated she had an opportunity to go out to Sun City for a tour and was very impressed with their emergency preparedness, which was a wonderful model to learn from; they work together in voluntarism. She said Sun City has a library that is completely run and stocked by its volunteers, stating it is an impressive community. Additionally, they did their 21 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 own study in 2008, but of course, she felt it needs to be brought up to date. She agreed this was something the City should and needs to look at. Councilmember Finerty stated this wasn't the first time that it's been looked at, and as the City Manager and staff has indicated, LAFCO believes Bermuda Dunes needs to go with it. She said the City has studied Bermuda Dunes, and the fact is there isn't enough money to make it feasible. She said at that time, the Council talked with the County with then Supervisor Roy Wilson, and there wasn't enough money. Having been in a meeting today earlier with Supervisor Benoit, she learned the County would be receiving a briefing that basically will say the County wasn't doing any better and perhaps looking at making further cuts. Therefore, she didn't anticipate any assistance from the County, because they sometimes set aside funds for infrastructures and roads, which is currently lacking in Bermuda Dunes. She didn't know how the City can skip over Bermuda Dunes and whether that was a battle it should try to fight. She said the 5,000 homes in Sun City will require 10% of the City's revenue, which will impact Palm Desert public safety wise. She said the City spent $48 for paramedic service and is concerned with Palm Desert taking on additional responsibility in these economic times. She said whatever Palm Desert annexed, the City will be required to follow the General Plan and bring them up to the same level of service that everyone else in Palm Desert enjoyed. Mayor Pro Tem Spiegel noted Bermuda Dunes is surrounded on three sides by Indio and one side by Palm Desert. Councilmember Finerty responded Bermuda Dunes was in Palm Desert's SOI. She wondered what the City can put together internally before spending $20,000 for a feasibility study, as far as updating what has already been done, because this wasn't the first time the City was looking at this issue. Councilman Kroonen noted Bermuda Dunes also abuts the City of La Quinta. Councilmember Finerty agreed, stating the City of La Quinta had been cherry picking key parts of Bermuda Dunes, and LAFCO has said no more cherry picking by anyone and it's everything or nothing at all. Councilman Kroonen stated he understood the motion on the table was to do a feasibility study on the land north of 1-10, but it did not include Bermuda Dunes, which he still supported, because it wasn't the end of the process. Councilmember Finerty agreed it was not the end of the process, but the City has gone to LAFCO so many times, and as stated previously by City Manager and staff, LAFCO's position hadn't changed. 22 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Councilman Kroonen responded he understood, but many times one is told by this, that, or the other agency, whether it is Sacramento or Riverside County what it can or couldn't do, and he would like this Council to assert itself as a principal player in this process at this time. Mayor Benson agreed with Councilmember Finerty that the City has gone through this so many times, that it's almost ridiculous. She wasn't against looking at it, but was against spending $20,000 to do a feasibility study. She said the City has turned down so many things in the community that she thought it can take one of the old studies, dust it off, and see what has changed since the last one, and find out how much money has actually come in from that area. She believed the County can provide staff with that update information without spending $20,000. Councilmember Harnik noted Sun City did a study in 2008. Mayor Benson said if Sun City's brought their study in along with what the City already had, they can be reviewed to see if a feasibility study was needed before it spent $20,000. Mr. Wohlmuth stated it was worthwhile to study Bermuda Dunes, especially if the City asks LAFCO to consider just an annexation north of 1-10, because it will need to provide reasons why Palm Desert couldn't annex Bermuda Dunes, which would be the financial cost to provide those services. Therefore, he believed the City needed to look at a fiscal analysis of both Bermuda Dunes and Sun City area. Secondly, a lot could have changed in the last three years, not only redevelopment, but Stater Brothers was now twoY years old, and if it's a big tax generating commercial property. He said the City will need a consultant to get that information, because it couldn't get that type of information from the Board of Equalization. He said he wasn't sure the County could deliver sales tax information on Stater Brothers, because Palm Desert couldn't deliver that type of information on its own businesses. Mayor Benson reiterated the City should use Sun City's study and use one of the old ones. She said there are enough things that have happened to see what it was looking for, because she just couldn't justify spending $20,000 for a consultant to come up with something. Mr. Wohlmuth agreed the more information the City provided, the less it will cost. However, he would like to have someone organize all this information into a report, separating Bermuda Dunes from Sun City and looking at the 200 feet along the freeway, because this person will have to interview and obtain CalTrans accident reports, etc. 23 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Councilmember Harnik asked if it made sense, given the information just provided by the City Manager, to go ahead and do the feasibility study of Bermuda Dunes to be able to make the City's case if the feasibility for the area north of 1-10 turns out to be positive. Mayor Pro Tem Spiegel answered he didn't care and it didn't make any difference. Councilmember Finerty suggested updating the several feasibility studies already done on Bermuda Dunes, because there couldn't be much that's changed there. She said the infrastructure out there was poor, which is why she sat down with then Supervisor Wilson to see what kind of funds the County would have to assist with the infrastructure. She said foreclosure was one thing, but their infrastructure is in horrible state and nothing to the standard of Palm Desert. Responding to question about the most recent study on Bermuda Dunes, Ms. Aylaian responded it was done about three years ago, and at that time the study showed there was about a $42 million capital investment needed over 30 years. She said during the first year it was anticipated there would be a $7 million negative cash flow associated with Bermuda Dunes and that it would increase after that. However, she understood there have been some real investments in the infrastructure by the County. She said times and costing had changed enough that three years is a long time in feasibility analysis and it would be appropriate to update it. Mayor Benson called for the vote, and the motion carried by a 3-2 vote, with Benson and Finerty voting NO. B. CONSIDERATION OF ASSEMBLY BILL 742 (LOWENTHAL) AND APPROVAL OF A LETTER OF OPPOSITION TO ASSEMBLYMAN NESTANDE AND SENATOR EMMERSON. Councilmember Finerty stated this item is for approval to send a letter in opposition of AB 742, because Palm Desert believes this is a local land use decision that should be made locally. Councilmember Finerty moved to, by Minute Motion, approve sending the recommended letter opposing AB 742 (Lowenthal) to Assemblyman Nestande and Senator Emmerson. Motion was seconded Kroonen and carried by a 5-0 vote. 24 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 C. CONSIDERATION OF SUPPORT FOR CONTINUATION OF THE ENERGY EFFICIENCY GAS SURCHARGE FUND AND A LETTER TO ASSEMBLYMAN NESTANDE AND SENATOR EMMERSON THEREFOR. Councilmember Finerty moved to, by Minute Motion, approve the recommended letter of Request to Assemblyman Nestande and Senator Emmerson. Motion was seconded by Benson and carried by a 5-0 vote. XV. CONTINUED BUSINESS None XVI. OLD BUSINESS None XVII. PUBLIC HEARINGS A. CONSIDERATION OF AN APPEAL TO A DECISION OF THE PLANNING COMMISSION, DENYING A CONDITIONAL USE PERMIT TO OPERATE A SHORT-TERM RENTAL LOCATED AT 44-600 SAN JOSE AVENUE (APN 627-164-005), Case No. CUP 11-244 (Alan and Susan Parker, Applicants/Appellants). Assistant Planner Missy Wightman stated this was an appeal of the Planning Commission decision for a short-term rental at 44-600 San Jose Avenue. On April 14, 2011, the City Council approved Zoning Ordinance Amendment 1223, revising standards for short-term rental. On July 19, 2011, the Planning Commission voted 3-2 to deny the first proposed short-term rental under the revised Ordinance. On August 2, 2011, the Planning Commission adopted the Resolution of Denial. She said no public comment was received in response to the 42 legal notices mailed July 1, 2011, to neighbors within 300 feet of the proposed property. At the public hearing, one neighbor spoke in opposition due to trash being left at the curb prior to pick up, noise, and additional cars from guests of the property owner. The Applicant was absent from the Planning Commission meeting and unable to respond to the complaint. Police researched records going back two years prior and there have been no calls on this property. Additionally, Code Compliance researched their records and found no calls on this property for the past six years. She said the property is located on the northwest corner of San Jose Avenue and De Anza Way. She said this was a consideration of a Conditional Use Permit (CUP) to operate a short-term rental in a non -gated Single -Family Residential Zone. The General Plan land use designation is Medium Density Residential, the Zoning is Residential Single Family as well as all the surrounding properties. Part of the Zoning Ordinance Amendment requires a 24-hour contact, and the Applicant did have a Property 25 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 Management Company called McLean Company Rentals for the neighbors to call if there's a problem with this house. The Applicant also complies with some of the more major issues like the minimum three-day rental occupancy. She said this four bedroom home allows for eight overnight guests maximum with four on -site parking spaces available. The remainder of the contract is in compliance with the Zoning Ordinance Amendment. Responding to question, she confirmed a three-day rental meant a two -night stay. She displayed photographs of the two-story house, which is kept in clean appearance. She said the Applicant provided a site plan, which shows the lot is 10,620 square feet and the total square footage for the two floors is 1,785. She said when staff formulates their recommendation to the City Council, it takes into consideration the number of people who spoke in opposition or in favor. She said there was one person that spoke in opposition out of the 42 notices that were sent out. Additionally, they look at police and code compliance reports, and in this case, there was no indication of calls on the property. She said the Applicant is in complete compliance with the Zoning Ordinance Amendment that was approved; therefore, staff recommended approval of the appeal of the Planning Commission denial of the Conditional Use Permit for a short-term rental at 44600 San Jose Avenue, Palm Desert. Mayor Benson asked if at the time the complaint was filed, if the Applicant already had a contract with the property management. Ms. Wightman deferred the question to the Applicant. Mayor Benson declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. MS. SUSAN PARKER, Applicant, stated she didn't want to rent her home, but is doing so because of the current economic situation. She said they've lived there ten years, and it's their second home. She and her husband work in Santa Monica and have another home there, but the home in Palm Desert is what they work for. She said her husband is in construction and has done all the maintenance on the home and continues to do it; therefore, they continue to be part of this house, which is why they are applying for a short-term rental as opposed to a long-term rental. She said they need help on the rental, because of the horrible mortgage and the effects this economy has had on their business. She said her kids are in college, the house is empty, and they need the additional income, so it just seemed like the logical thing to do. With regard to trash being left out, she said they never leave trash behind, she always takes it back with her to Santa Monica, and the only noise coming from her house is from her children playing in the pool. She called upon the McLean Property Management to help with the property and signed a contract in July, but she has never rented the house out as this is a brand-new endeavor for her. She has had friends and family who come 26 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 over from Europe to stay at the house. She said the Property Management Company will screen the renter thoroughly, because she is very particular. She asked the City Council for its approval, because this would be a means to an end. MR. PAUL GREEN, McLean Property Rentals in Palm Springs, stated they worked with the cities of Palm Springs, Rancho Mirage, and La Quinta on developing the Vacation Rental Ordinance. He said they screen all the renters, they are on call 24/7, and if there is a complaint of noise, too many vehicles, etc., they are required to respond within 45 minutes. He said it was his understanding that the person who complained about the trash and noise, there was no one using the property at that time. What they do as a rental company, they screen renters, collect the rent, inspect the property before and after the stay, and respond to any problem at that time. He said their business card is given to all the neighbors, but they have not rented this property yet, because they wanted to make sure it was approved by the City before it started renting it out. Councilman Kroonen asked staff how many requests have been received by the City to go through the CUP process. Ms. Wightman answered ten since the new process was adopted in May, but there were some that were grandfathered. Councilmember Harnik stated she recalled the Ordinance would be reviewed in six months to see how many people applied for a CUP. Ms. Aylaian agreed, stating staff is preparing to come back to the Council in October with an update on how many people have applied and how many have been grandfathered along with feedback received going through the process. Mayor Benson asked whether this property was under the rental service when the Planning Commission denied the CUP. The Applicant signaled that it wasn't. With no further testimony offered, Mayor Benson declared the public hearing closed. Councilmember Harnik stated she supported the short-term rental, because the last thing the City wanted was foreclosed homes. She knew the City of Rancho Mirage had done an ordinance, which she would like to take a look at and discuss in October. She felt it was important the City made it possible for people to get a CUP, but the Ordinance needs to include teeth where it can issue fines for noncompliance or violations. She said people will go underground if it's made difficult to obtain a CUP. She believed it was 27 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 important to get people registered so that the City was able to watch and track short-term rentals. She would appreciate staff looking into ways that teeth can be put into the Ordinance. She said the short-term renters on her street have never been a problem, but understood that was not everyone's experience. Councilmember Harnik moved to, waive further reading and adopt Resolution No. 2011 - 83, granting the Appeal and approving Conditional Use Permit No. 11-244, subject to conditions. Motion was seconded by Spiegel. Councilmember Finerty stated the Statement of Use included in the staff report indicates that for two nights for a four -bedroom house it has the potential for eight overnight guests. She said parking would be an issue for her, because if everybody on the street did the same, it will destroy the residential integrity of the neighborhood. She has always been and will continue to be opposed to short-term rentals. The letter received from Sabine Gaedt states, "Allowing a neighbor to turn their second home into a short-term rental will threaten the integrity of our neighborhood." She understood it was tough times for everyone, but it was important to keep the character of the neighborhood that everybody bought under and wasn't to turn it into a short-term rental or second units in the back yard. Therefore, she would be voting NO. She wished the Applicant luck with her financial position. Councilman Kroonen concurred, stating he was concerned this was a residential community and people bought their home under the premise that they would have quiet solitude and not be invaded. He complimented the work of Code Enforcement, because when he's brought issues to them, they have been cooperative and productive in bringing about resolution. He is not the least bit interested in seeing Palm Desert become known as the short-term rental capital of the world. He pointed out this issue had gone through the Planning Commission, which on a majority vote turned it down. Mayor Benson noted other people who have second homes in Country Clubs have been turned down that wanted to rent their home, but used the economic downturn as a reason to do so. She was against turning neighborhoods into rentals, because the City had rental places and hotels. She said the Planning Commission looked at this case first and her vote will also be NO. Councilmember Harnik commented she'd rather see a few renters in her neighborhood than a foreclosed home. Mayor Pro Tem Spiegel stated Palm Desert was a resort area, which couldn't be denied, and there are people that have purchased homes in the resort area to make them financially stable and eventually retire to them, but they 28 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 are living in Los Angeles or San Diego. He said there is approximately $200,000 in hotel occupancy tax that the City was not getting, which is the reason he wanted to put teeth in the Ordinance; otherwise, people will continue to rent their home and go underground. Councilman Kroonen pointed out that when this issue was being considered in the spring, he suggested a provision that it be for more than two nights, which is where the problem was created as far as he is concerned. He said that suggestion was declined by the majority of the Council, but he continues with his position that two nights was just too short. Councilmember Finerty concurred, stating the minimum for a homeowner association was 30 nights, and it was for the exact same reason, when people buy into an area/place, they are expecting a certain type of atmosphere. However, when you open it up to short-term rentals, it becomes an entirely different atmosphere. Mayor Benson called for the vote, and the motion FAILED on a 2-3 vote, with Finerty, Kroonen, and Benson voting NO. B. REQUEST FOR APPROVAL OF THE REALLOCATION OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS PREVIOUSLY AWARDED TO FAMILY YMCA OF THE DESERT AND REMAINING UNSPENT FUNDS FROM PREVIOUSLY FUNDED CDBG PROGRAMS/PROJECTS FOR FISCAL YEAR 2011-2012 TO RANCH RECOVERY CENTER. Ms. Riddle stated the subject request is to ask the Council to approve reallocation of the Community Development Block Grant to the Ranch Recovery Center. She said Housing and Urban Development (HUD) notified the City of their concern with the Family YMCA for monitoring. She said HUD's focused for CDBG is for abused, neglected, and homeless. Mayor Pro Tem Spiegel asked who made the recommendation to reallocate the funds to the Ranch Recovery Center. Ms. Riddle answered she made the decision based on the application and information provided. Further responding, she explained that the YMCA was going to use their funds for Capital Improvement to replace doors and flooring, etc., that equaled $28,000. She said previously capital improvement projects didn't have to track and monitor the users of the facility, but now HUD requires that regardless of the type of project, 51 % or more of the users of that facility need to be low income. She said the YMCA does not have participants fill out self -certification forms, and after talking to them, she confirmed they did not undertake that kind of tracking nor did they believe they could get 51 % or more low-income participants at that facility. She said 29 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 the City has funded the Ranch Recovery Center in the past, and they have always had more than 51 % low income participation at their facility. Further responding, she said the Recovery Center is located in Desert Hot Springs. Mayor Benson declared the public hearing open and invited anyone who wished to come forward to speak on the matter to do so at this time. With no testimony offered, she declared the public hearing closed. Mayor Pro Tem Spiegel moved to, by Minute Motion, approve the reallocation and reprogramming of CDBG funds in the amount of $29,253.87 to Ranch Recovery Center. Motion was seconded by Finerty and carried by a 5-0 vote. XV1II. REPORTS AND REMARKS A. CITY MANAGER 1. City Manager Meeting Summaries for the Period of August 17 - 30, 2011. Mayor Benson noted that the City Manager's Meeting Summaries indicated that she participated in a meeting with him on August 19; however, she was not in the office that day. It was only with the Mayor Pro Tem and City Attorney on August 19. With Council concurrence, the report was received and filed. 2. Consideration of Pending Legislation - Assembly Bill 1275 and Assembly Bill 450. Mr. Wohlmuth asked for City Council's consideration of adding an item to this agenda, having to do with sending letters of opposition/amendment on the aforementioned Assembly Bills. He said this was an urgency matter, because the City was notified that the Legislature was considering these matters after the 72-hour posting requirement for the agenda. On a motion by Finerty, second by Spiegel, and 5-0 vote of the City Council, the aforementioned Assembly Bills were added to this agenda. Mr. Wohlmuth explained that Assembly Bill 1275 would change the validation process for Redevelopment and for establishing or amending Project Areas. It would prevent the City from validating new Project Areas in Redevelopment, as it did with Project Area No. 4 a number of years ago. Responding to question, he said staff was asking for direction to draft a letter of opposition for AB 1275. On AB 450, staff was seeking direction to draft a letter of opposition 30 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 unless the Bill was amended; it deals with Housing Funds and Palm Desert's ability to retain funds for deferred maintenance of existing Housing stock. Upon a motion by Spiegel, second by Finerty, and 5-0 vote of the City Council, staff was directed to draft and send to Legislators: 1) A letter of opposition regarding Assembly Bill 1275; 2) a letter of opposition unless Assembly Bill 450 is amended. Mr. Wohlmuth advised that staff would be contacting Assemblyman Nestande first thing in the morning and have the draft letters sent to his office. 3. Local Power Outage Report Mr. Wohlmuth said he'd been notified that there is a reported power outage in the area. It was impacting all of San Diego and Orange Counties, the Cities of La Quinta and Indio in the Imperial Irrigation District (IID) Electrical Service Area, which also includes a portion of Palm Desert in the area of Washington Street - Interstate 10. Upon inquiry, he said it appeared that Southern California Edison's Service Area was not affected at this time. B. CITY ATTORNEY None C. CITY CLERK 1. Reminder of 2nd Regular City Council Meeting in September to Be Held Thursday, September 29, 2011, at 3:00 p.m. Councilmembers took note of the reminder. 2. Consideration of Request to Appoint Voting Delegate and Alternate for the National League of Cities Annual Business Meeting on Saturday, November 12, 2011, at the National Congress of Cities and Exposition in Phoenix, Arizona. Upon Ms. Klassen's explanation of the request, Councilmembers indicated no one was interested. No action taken. 31 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 D. PUBLIC SAFETY 1. Fire Department: None 2. Police Department: None E. MAYOR AND MEMBERS OF THE CITY COUNCIL 1. City Council Requests for Action: a) Plastic Baas — Councilman Kroonen hoped to see in the not - too -distant future a discussion about the prospect of helping the environment by controlling the use of non -disposable plastic bags. Right now it was a general concept in his mind, but he would like to see the City move in that direction. Mr. Wohlmuth said staff would bring back a report on the matter. He commented that several cities ban plastic bags, and staff will look at those regulations to see how they may be adapted for Palm Desert. Councilmember Harnik requested not only looking at cities that have banned the plastic bags, but those that have also come up with programs to reward the use of reusable bags. She asked to look at all facets of those types of programs. 2. City Council Consideration of Travel Requests and Reports: a) Mobility 21 Conference — Councilmember Harnik reported she attended the subject Conference, which addressed transportation and infrastructure issues in Southern California. She said it was very helpful, and she attended some sessions regarding bicycle use and how it could be implemented in the City. She also attended some sessions on the integration of technology into transportation services. 32 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING SEPTEMBER 8, 2011 b) Leaaue of California Cities Annual Conference — Councilmember Harnik noted that she would be attending the Annual Conference in a couple of weeks and would report back on her activities at the next meeting. 3. City Council Committee Reports: a) Housina Commission Meeting - Mayor Pro Tem Spiegel said he attended the Commission Meeting this week on behalf of the Mayor. He reported that the Catalina Gardens property was evidently over -planted as reported by two people, which he has already conveyed to Landscape Manager Spencer Knight, who was going to check on the matter. 4. City Council Comments: a) Shelter From The Storm — Mayor Pro Tem Spiegel reported that on the final intake report from the Shelter, a total of 626 people were served, 223 from the City of Palm Desert. 5. Suaaested Items for Future Citv Council Meetina Aaendas: Please refer to Item E-1(a) regarding a request for future consideration. XIX. ADJOURNMENT On a 5-0 vote of the City Council, Mayor Benson adjourned the meeting at 6:21 p.m. ATTEST: R HELLE D. KLASSEII, CITY CLERK CITY OF PALM DESERT, CALIFORNIA �%J AN M. BEN ��' , YOR 33