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Home My WebLink AboutSR - Bermuda Dunes Sphere of Influence CITY OF PALM DESERT COMMUNITY DEVELOPMENT STAFF REPORT REQUEST: City of Palm Desert Bermuda Dunes Sphere of Influence Review Request from the Riverside County Local Agency Formation Commission (LAFCO) SUBMITTED BY: Lauri Aylaian, Director of Community Development Stephen Y. Aryan, Assistant to the City Manager DATE: October 11, 2007 CONTENTS: Bermuda Dunes Annexation Feasibility Report (September 2007) Recommendation: That the City Council, by Minute Motion: Provide Direction to the Riverside County Local Agency Formation Commission relative to the retention of the Bermuda Dunes Sphere of Influence. Executive Summary: The Riverside County Local Agency Formation Commission (LAFCO) has asked the City of Palm Desert to make known its future plans for retaining or removing the Bermuda Dunes Sphere of Influence (SOI). On April 12, 2007, the City Council moved to retain the services of a consultant to update the 1996 fiscal impact feasibility study performed for the Bermuda Dunes Region. This study was recently completed by MuniFinancial and not only focused on ongoing operating and maintenance costs required to provide public services to the Bermuda Dunes community, but also included a thorough analysis of capital costs to bring existing public facilities up to current City standards. The annexation of Bermuda Dunes into the City of Palm Desert would result in a negative fiscal impact of $7,454,100 for FY 2007-2008, and an initial 30-year capital improvement cost of $42,151,400 necessary to enact infrastructure improvements. The annual ongoing fiscal impact would continue to increase each subsequent year. The report indicates that additional revenues would be necessary for the City to mitigate the potential negative financial impact caused by annexing this region;therefore, staff cannot recommend annexing Bermuda Dunes and requests direction concerning retaining this sphere of influence. Discussion: Approximately ten years ago, members of the Bermuda Dunes community approached the City Staff Report City of Palm Desert Spheres of Influence Review October 11, 2007 Page 2 of 3 of Palm Desert concerning an annexation proposal. The City initiated a fiscal analysis on the impacts of annexing Bermuda Dunes into the City. The analysis indicated revenues generated by the annexation would fall well below service expenditures. In March 1996, the City informed the Bermuda Dunes Community Council that Palm Desert did not encourage or support the annexation of Bermuda Dunes within the City. In September 2000, LAFCO recommended that the area of Bermuda Dunes south of I-10 be within the Palm Desert SOI. However, LAFCO staff was concerned that this area could be relegated to permanent"island"status. Their recommendation was made with the hope that this would be the first step in opening up a new dialogue about annexation between residents, the County, and the City. The Riverside County Local Agency Formation Commission (LAFCO) is undertaking sphere of influence hearings for Coachella Valley cities, beginning with the western portion of the Valley. A sphere of influence is defined as a plan for the probable physical boundaries and service area of a local agency. At its April 12, 2007, meeting, the City Council indicated its desire to no longer retain the Del Webb Sun City sphere of influence. However, the Council directed staff to perform a fiscal feasibility analysis to ascertain the impacts of annexing the Bermuda Dunes sphere of influence. Munifinancial was retained to perform a fiscal feasibility study focusing on not only operating and maintenance costs required to provide general government services to Bermuda Dunes, but to also conduct a thorough analysis of capital costs with bringing exiting public facilities up to current City standards. This report was recently completed and indicated that annexing this region into the City of Palm Desert would result in a negative fiscal impact as follows: *ONGO/NG GENERAL GOVERNMENT SERV/CES COSTS FISCAL YEAR COST FY 2007/2008 $7,454,100 FY 2008/2009 $7,727,037 FY 2009/2010 $8,008,212 "The cosfs of annual infrastructure maintenance are included in this total. Infrastructure maintenance costs are identified below. ANNUAL /NFRASTRUCTURE MAINTENANCE COSTS MA/NTENANCE CATEGORY COST *Sanitary Sewers $294,397 Storm Drains $746,667 New Street Improvements $283,983 **Traffic Signals $480,000 Road Maintenance $1,513,770 TOTAL EXPECTED ANNUAL COST $3,318,817 *Sewer installation costs would likely be borne by property owners, via an assessment district mechanism, and would not be the City's responsibility. These construction &maintenance costs are presented for clarification purposes. *'Traffic signals annual costs calculated based on annual installment for a five-year period only. Staff Report City of Palm Desert Spheres of Influence Review October 11, 2007 Page 3 of 3 *COSTS TO CONSTRUCT PUBLIC INFRASTRUCTURE IMPROVEMENTS INFRASTRUCTURE COST Sanitary Sewers $8,831,900 Storm Drains $22,400,000 New Street Improvements $8,519,500 Traffic Signals $2,400,000 TOTAL EXPECTED 30 YEAR COST $42,151,400 "Costs are based on 2007 Dollars The County previously indicated the possibility of providing a considerable financial investment over two years for a major renovation of Bermuda Dunes'existing infrastructure. The sufficiency of this funding to bring Bermuda Dunes' streets, sidewalks, drainage systems, and infrastructure up to City of Palm Desert standards has not been determined. As this report indicates that additional revenues would be necessary for the City to mitigate the potential negative financial impact caused by annexing this region, staff cannot recommend annexing Bermuda Dunes and requests direction concerning retaining this sphere of influence. Submitted By: � � - �- Lauri Aylaian S phe Y. Aryan Director of Community Development Assistant to t Ci Manager Approval: Departmen ead: � Carlos L. Orte Ho er L. Cr City Manager ACM for D vel pment Services �� Paul S. Gibson Director of Finance/City Treasurer Mark Greenwood, P.E. Director of Public Works REGULAR PALM DESERT CITY COUNCIL MEETING OCTOBER 11, 2007 XVI. OLD BUSINESS A. CONSIDERATION OF THE CITY OF PALM DESERT- BERMUDA DUNES SPHERE OF INFLUENCE REVIEW REQUEST FROM THE RIVERSIDE COUNTY LOCAL AGENCY FORMATION COMMISSION (LAFCO). * By Minute Motion, direct that LAFCO be informed that the City of Palm Desert does not wish to have Bermuda Dunes removed from its Sphere of Influence; although, Palm Desert does not wish to annex Bermuda Dunes at this point, but the City is not opposed to annexing the area in the future if it is financially feasible. 5=0 --��Y �.�J�JIYLIL AC'I`I�N: .=.PPROVED DENIED R�CEIVED OTHfiR �� '1.ETING DATE / - �.- ��.�rrs: �� arz�ff2.�/ ��1;J. '.z�`TT: U :,�fiTAIN: .'L-::F:CFIED BY: � �-:�_r?.n�1 on Filp � h City Clerk' s Office