HomeMy WebLinkAboutSUPPTL INFO - BD Sphere of Influence CITY OF PALM DESERT
BERMUDA DUNES ANNEXATION
FEASIBILITY REPORT
SEPTEMBER 2007
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Bermudu Uuoe;tLtunicr�alSe�vire and InrtialFi.rialI'eruibrli[y Review
TABLE OF CONTENTS
ExecutiveSummary...............................................................................................................3
Introduction .......................................................................................................................3
Background.......................................................................................................................3
Purposeof Study...............................................................................................................4
2. Population, Employment, and Land Use..........................................................................5
DevelopmentTrends.........................................................................................................5
Regional Development Trends....................................................................................5
3. Analysis and Methodology ...............................................................................................6
MunicipalServices ............................................................................................................6
Cost of Services Methodology...........................................................................................7
Operating and Capital Costs.......................................................................................7
Service Level Assumptions.........................................................................................7
PerCapita Method......................................................................................................7
CaseStudy Method.....................................................................................................8
4. Revenue Analysis..............................................................................................................9
PropertyTax ...............................................................................................................9
AssessedValue ..........................................................................................................9
SalesTax....................................................................................................................9
PropertyTransfer Tax...............................................................................................10
7imeshareMitigation Fee..........................................................................................10
GasTax ....................................................................................................................10
Transient Occupancy Tax .........................................................................................10
Business Licenses .................................................................................................... 10
OtherRevenues..............................................................................................................11
Franchise Taxes and Fees........................................................................................11
TrafficFines..............................................................................................................11
InterestIncome.........................................................................................................11
Development Fees and Fees for Services.................................................................11
VehicleLicense Fees................................................................................................11
City of Palm Desert Special Taxes and Assessments...............................................12
5. Expenditures....................................................................................................................13
GeneralFund............................................................................................................13
Costsof Service........................................................................................................ 13
Capital improvements and Related Maintenance......................................................13
6. Initial Fiscal Review........................................................................................................14
KeyAssumptions.............................................................................................................14
Fiscal Neutrality Not Addressed................................................................................14
Conclusion ......................................................................................................................14
Exhibit A— Public Infrastructure Analysis ......................................................................A-1
ExhibitB— Boundary Map................................................................................................ B-1
Exhibit C—Tables of Revenues and Expenditures.........................................................C-1
Exhibit D— List of Commercial Properties......................................................................D-1
�frrnil•inuncza! ?
Bernruda Dune�.11uniaf�ul.Servire anr!Inilla!Fi.rcu/Frutil�ilrl� IZeview
EXECUTIVE SUMMARY
. . .
13crmtida llunes is an unincorporated arca, identified as a ccnsus-designated placc (C;DP), located in
southwcstcrn Riverside Counr��, adjacent to the cities of Palm Desert and l,a Quinta. CDPs are
delineatcd to provide data for established areas c>f a population that arc identifiable b}- namc, but are
not legally included under the laws c>f the state in which theti� are located. This CllP's name
originated from the Bermuda I�une� Cc>untry� Club, a golf course community,which initially opened
in 19G2 and was thc former site of thc 13ob Hope Chryslcr Golf Classic.
"1'he bounc�aries of the Bermuda I�unes communit}' are generally the arca alonp the Interstate 10
Freeway to the north, excluding the Indio city limits, the boundary of the Cir�� of Indio to the east,
I�red \�'arin� I�rivc and the La Quinta ciry limits to the south, and �ti'ashington Street from I�rcd
�ti'aring ro the Interstate 10 Prccway to the west. I�iost of the area is still of a scmi-rural nature, and
similar to c�ther areas of the Coachclla �'alley,is prcdominantlti•residential (rcfcr to Cxhibit "13").
"1'he City of Palm Desert has been asked b�� the Riverside Counry Local .�genc�� rormauon
Comrrussion (L.�1FC(�) to dctcrmine whether it would be feasible for the 13crmuda llunes area ro bc
anneKed to the Cit��. In order to make this determination thc Ciry has engaged i�luniFinancial to
undertakc a fiscal feasibilih� anal��sis of the financial impact to thc Cit}� of annesing this arca.
Prior ro determining�vhrther to pursue anncsauon, tlle Cih� wants to asccrtain the tiscal standin� of
the Bermuda l�unes communir��. This report will fc�cus on Ciry ser��ices that �vill be prc>eided�vithin
the Bermuda Dtines area, the forecasted cost of those ser�-ices, ancl thc re�•enues that could
rcasonably� be expected to bc available to fund thosc scr�•ices. '1'his Re�ort �vill focus on a
cc>mpilauon of the forecasteci re�-enues and expenditures of the annexauon arca projected to I-'iscal
Ycar 200J-10 using a rangc of potential fiscal impacts.
13ased upon 2000 c�nsus data, the populaaon of the Bermuda L�unes communiry�vas determined ro
be G,229. Thc subjcct area is compriscd of approrimately� 3? squarc milcs of territory. �1t the nmc of
this Report's creaaon, thc number of structures or dwcllin� units in the prop�sed anncxation area
included appro�imately 1,827 single farnily residenual units, 28 apartments, G53 condominiums, 71
commercial properues, an 18 hole golf course and clubhouse, and a 3� unit hotcl.
� . • • •
The Countt• of Riversic�e is currentl�� responsible for policvmaking and administrau�n; law
enforcement, animal control, planning and land usc re�,niladon, building inspecuon, flood control
and the maintcnance and improvement of roads. �treet lighung services �vithin thc Bcrmucia l�unes
area are currently provided through Count}� Service �1rea I�o. 121. '1'he landscaped meciian l�cated
along 42nd Strcet bct�veen Limahall Road and C71ass Dri�•e is currend�� being maintaincd b}�
Riverside C<�unn� through a special assessment ciistrict formed pursuant to the 1972 I_i�;hting and
I.andscape .1ct. Upon annexauon, the Ciry would administer the special ciistrict and the assessments
would be transfcrrcd to thc C;iry and detached from thc Cc>unr}-.
.tluniFinaniia/ 3
Bermudn Dune.c.Lfuni�z�ul.Servire und LritialFitialFeatiGilll}�Keyiew
��'atcr is currentl}� supplied in the I3crmuda Dunes area by the '�Iyoma Duncs Vi,'atcr Companti� and
the Coachella Vallcy \�G'ater I�istrict. L�on annexation, the I�1}�oma I�unes ��'ater Compan�� and
Coachella Valley� \k�'ater I�istrict will conunuc to supply �vater ro the Bermuda Dunes area as tlie
sen�ices are currently in place. Sewer sen�ices are currentl�� provided bp main line services owned by
CV�k�'L� and on-site sepuc systems. Sewer lines currentlp esist at rred \�'aring Drive, ��'ashin�;ton
Street,and -�2nd �lvenue.
'I'he County �f Riverside currentl}• pro�•ides fire protecac>n and police services to the Bermuda
llunes community. The la�v enforcement facilities currendy responsible for the Bermuda I�unes area
arc thc Palm llesert and Indio substauons. li�on annexauon, the Cit�� of Palm Dcscrt �vill pro��ide
the fire and police protecuon scrvices through contracts �vith the County of Riverside. '1'he Countv
of Ri�-erside currentl�� maintains thc roac3s �vithin the Bermuda lluncs arca. L'pc�n anncxation, the
Cit}� of 1'alm Dcscrt�vill be required to maincain thc csisting roads.
�1s part of the proposed anncxauon, thc Cit�- �vill re9uire that roads and othcr cxisting infrastructure
faciliues be brought up to cYisdng Cit�-of Palm Dcscrt standarcis.
:�Ian}• of the General I-�und revenucs and cspcnditures �vere either calculated on a per capita basis, a
marpinal cost basis using actual budget ti�ures from the C:iry of Palm Desert, or a case stud��
methodolog��.
' • • - • •
'I'hc purpose of the stud}'is ro evaluate thc fiscal feasibility of the annexation of thc 13crmuda Duncs
area to the Ciry of Palm Dcscrt. '11Ze srudy �vill providc a basis for thc policy� discussion that
L.�1rCO, the Counr}', the Ciry� of 1'alm Descrt, other affected public agencies, and community�
groups will need to conduct in order to reach a decision on the future ����ernance of the Bermuda
Dunes communin-.
�L1uniFrnanrral �i
Bernf�rdrr Ur�ne;Annexatron ti�ra/F'ea.ciGilitJ.StnAj�
2. POPULATION, EMPLOYMENT, AND LAND USE
Thc initial fiscal analysis is bascd on cstimatcs <>f c!:istin� and projected populauon, employment,
and land use. "1'his chapter describes how these esumates were dc��cloped for thc Bcrmuda Duncs
communir}�.
� - � • •
Regional Development Trends
C�ver the past decade, F3ermuda I�unes began capturing a share of tlie residcntial and relatcd
commercial developmcnc bcing attractcd to thc Inland Lmpirc re�ion of eastern Ri��erside Countv.
'l�his development is being driven by the continued populadon growth in thc California cconomy, a
state that has grown by 2.3 million residents (over six percent) since 2000 in spite of the recent
economic slow do�vn. '1'he State has c�nsistentlt• attracted ne« residents at about the same rate of
�00,00� per y�car since\�'orld V�'ar I I.
"l�he Inland 1-;mpireJCoachella ��alle�• offer, a compeduvc altcrnauvc for dcvclopment demand
within thc Los �ingcics, (�range and San lliego regions. "1'he coastal counues have bccomc
increasingl�� urban and generall�� high land prices are limitinp de��elopment potcntials. Thc Inland
Cmpirc/Coachclla �'alle}� offers substantial supplies of developable land and availablc infra�tructure
capaciry. Critical to the region's gro�vth has been a well-developed high�va}� nenvork that includes
east-�vest rouces benvecn thc coastal urban arcas and destinations throughout the south�vc st, and
n�rtli-south routcs bctwcen Inland 1-:mpire/Coachella Valle}� communiucs and to dcsunations in
nc>rthcm (:alif�rnia and the northwest. As described ab<n�c, thc I3crmuda l�unes communitti'
straddles Intrastate 10, the major cast-wcst highway in the region.
Growth �vithin Inland �:mpire communiues generally� follows a path n�ical of California suburban
de�•elopment. Residential "exurbs" connected t<> far off job centers graduall�� grow into their o�vn
indcpcndcnt ccc�nc�mic regions. The first phase is driven b}� workcrs from job centers near the coast
sccking aff<�rdable h�using and is accompanied by residcntial-scr��ing commercial development. "1'hc
second �hase is characterized by commercial, oftice, and industrial development such as
�varehousing and distribuaon centers that desire large sites and that dc� nc>t need an urban location.
The final phase includes attracuon c�f�r<�fessionals and other higher-incc>me h<�u�eh<�lds with more
expcnsi�•c residcntial devel��ment, and e�•cntuall5� thc officc �ark, that house thc companics thcy�
work f�r.
(�peratinp within thc sub-rcgi�nal market �f southwe�tern ltivcrsidc C�unr�-, Bcrmucla I�une, is
experiencing the first phase of this regional�ro�vtli pattern. Resiclendal devclopment is �lacing more
demand on aeailablc land supply while commercial devclopment is supporting the local communit}'
and do�s not provide a regi�nal exchange of commerce.
,Ilunrf•enuncia! �
l3ermur/n Dunrt.Iluniri�u/Se�vire and Ini/in/Fr.rra!heariGili�j fZeviPu� _ _ —
3. ANALYSIS AND METHODOLOGY
"l�he purpose of this chapter is to determine the municipal �ublic sen�ices that would be affected bS�
the proposed annexauon and esumate the cost to the Citv of pro�•iding such services. Specitically
thi> chapter�vill:
1. l�evclop reasonablc assumpuons regarding the ser�-ices likc15� to be transferred from affccted
public agencics ser��ing thc Bermuda Dunes area to thc Cin� of Palm L�esert;
2. For those sen�iccs transferred to the Cit}-of Palm l�esert,dcvelop a mcthod for e�timating
costs for purposes of the inival fiscal review
3. Idcntif�� any ca�ital unprovements necessar}� t<> bring the arca of Bermuda Duncs up ro thc
standards of thc C:it� of 1'alm De�ert.
• . - -
I�iunicipal services are local (less-than-counrywide) public services typically prorided to developed
areas by ciues, counties, special districts, and pri�*ate uulities. Common types of municipal ser�-ices
include land use regulati�n, parks and recrcarion, public safery�, roads, and utilities. Ser��ices provided
countylvide such as the courts, jails, and state and federal health and social programs are not
c�nsidered municipal services for the purposes of this study� because the}' �vould nc�t be transferred
to thc Cir�-of 1'alm Dcscrt.
'1'he follo�ving consideraaon> were used to dctermine�vhat scrvices should bc transferred the(:itv of
1'alm Dcsert:
♦ Statutory requirements: Statc la�v requirrs the cities providc the followin� scrvices, thou�;h
the}� can be pro��ided by contract �vith another endty�: general legislauve funcuons, land usc
planning and regulauon, la�v enforcement, animal contrc>l, and maintenaiice of roads and
other property-owned by thc cin�.
♦ Local control: �1 primary <�bjective of an annexation is to prcrvide the communiry �vith
�reater local control. C<>nsequentl}•, if it is feasible to transfer a service without significand��
affecting the effecuveness <�r efticiency of ser��ice deliverS•, then the service rypically is
transferrcd.
♦ Extended service territories: Some sen�ices rcl�� on broad infrastructure nenvorks that arc
currently provided b�� an agency �vith a service territory� that extends far be�•ond the local
community. I-�or Bermuda Dunes, these ser��ices include cable television, electricin•, flood
control, �as, �vater, and wastc�Later utilities. Thcsc sen•ices typicallj- are not transfcrrcd
because of the inefticiencies associateci with a new, smaller a�;enc�� delivering the sereice ro a
lirrutcd scr��ice area.
♦ Current city policy: ,111 serviccs currcntly provided b}' the Ciry of Palm L�cscrt are
transferred to the 13crmuda I�unes cc>mmuniry under this anncxauon scenario.
.1ItlI11FlIT0If[7Q� G
Rernruda Dunel.�9r�ni�rpal.Se�vire unrl Initra!I�i.ccul hearrGrlih Review
• • • • • • •
The current (fiscal year 2007-08) costs c�f serviccs to the 13ermuda Dunes communiry are estimated
for purposes of thc initial fiscal review in Chaptcr G. General cicments of the methodology for
estunatin� costs are described in this secuon. Detailed comments are pro�•ided in the secdons that
follow by t��pc of service.
Operating and Capital Costs
This stud}� focuse� on ongoin� (operaung and maintenancc) costs rcyuired in order to providc
public services to the Bermuda llunes communit}�. Ong�ing costs are rypically the focus of tlscal
revicws because of the necd for public agencies to generate a balanced budget continuallv on an
annual basis. This level of analysis is appropriate for an iniaal fiscal review such as the current stud}�.
�'1 more thorough discussion of capital costs is included as Cxhibit "�"at the end of this Reporc.
Service Level Assumptions
One criucal assumpdon in esumating ser��ice costs is the le��el of scrvice pro��ided to the communit��.
This srud��uscs the follo�vin�approach.
♦ Annexation: The costs of services transferred ro thc City of Palm llesert are based on the
City�'s current (fiscal 5�car 2007-2008) level c>f service and not the current le��cl or cost of
sen�ice pro��ided by the Counry. Sen�ice levels for some services arc higher than current
unincorporated levels of service, and therefore costs will typically bc higher as wcll. Capital
costs associated with bringing exisung public faciliues in F3ermuda l�unes up ro currenr (;ity
of Palm llesert standards are considered scparatel��.
Per Capita Method
r1 per capita modeling method is used t� esumate many� service costs (and re��enues) for the (;iry of
I'alm Desert and the Count�� of Ri��erside. Per capita cost factors represent the current averagc
cih��vide (c>r countylvide) cost of scrvice. 'I'his approach is used for services that likcli� would not
van' substantiall}� from currcnt average c<>sts when dcli��ered to thc Bermuda Dunes communin�. I�or
scrvice costs that could var�� substanuallS� from current average costs a case srudy� method is used
(see bcl<��v).
Per capita c<�st factors are based on (1) current (tiscal �-ear 2U07-2008 budget) coscs and (?) current
cin•w-ide or counn-wide service populauons. Per capita factors are calculatec� b�� dividin� t�tal
expenditures for a given sen�ice by the appropriate scrvice populaaon. Scrvice po�uladon includes
current residents and employment. F.mplo��ment is �veighted depending on the specific sen�ice in
oraer t� rcflect the scrvicc demand �f one empl���cc rclative to onc resident. ;�iuldpl}'ing per capita
cost factors by a specific service populauon pr�vides an esdmate of the adciitional costs associated
�vith sen�ing that populauon. For this stud��, the per capita cost was calculated f�r certain budgeted
items, and extended ro thc populauon within Bcrmuda Dunes to dctcrmine thc cost associatcd ��-ith
the �roposed annexadon for that itcm.
Long-range planning studies, such as this, ty�icall�� use a commcm weighun� across all ser��ices and
revenucs anal��zed on a per capita basis that havc both a residcnt and employc� camponcnt.
Gathering and analyzing data on servicc dcmand, such as police and firc call data b�� tS�c <>f land
use, is a timr-intensivc ancl costly cffort. 1'rior analvsis c>f servicc dcmand data has not generatcd any�
common factors that seem to apply consistrntl�� across multiple jurisdicuons. Furtherm�re, the
,1�1uniFinan�Yrr!
Bermudo UuneJ.Ilunr�ipa!Se�vire und/nrtra/NiJi��/1�eari�ilrt�•Keviem
choice of a weighdng factor does not affect results significantly because (1) costs and re�•enues
receive similar weights so net fiscal impacts change little if�veighting factors change, and (2) m�.t
significant costs and revenues are analvzed indi��idually using a case srud}� analysis and t��icall}� do
n<�t rel}� on weighring factors. For these reasons, this stud}� assumes a reasonable weighting factor
and applies the factor c�nsistently across all costs and revenues that ha��e both a resident and
emplo5mcnt componcnt.
For the purposes of this stud�� wc: use a weighung factor of 0?-� cmployees per residcnt. '1'his
weighdng is based on the number of work hours per week (-�0) c�ivided b}' the total number of hours
in a week (1G8) to reflect the demand placed by businesses on municipal services relad��e to
residents. This weighung factor assumes that businesses primarily demand public services during
business hours while demand b�• residents is more constant throughout a 24-hour period.
Cmplo}�ment data for the Ciry of Pakn llesert and Bermuda I�uncs �vas obtained frc>m the
California F-:mplo��mcnt Development Dcpartment. 13ascd on fourth quartcr data of 200G, thcrc
were 30,G�? cmployees that v�orkcd in the Citp c>f 1'alm l�esert and 2,9-}-} employccs in Bermuda
Duncs.
Case Study Method
r1 case studv method is used for those costs that are not estunated using the per capita method
described above. The case study method is applicable to costs that could var}' substanuall}� fr<�m
avcrage costs ro dclivcr the same levcl of service. For this proposed anncxauon, a case study
approach was used t� adciress budgeted items that could not be calculated based on populauon, and
also for capital improvemcnt costs that would bc ncccssary to bring thc csisting infrastructurc�vithin
F3ermuda Diines up ro City oE Pal�n llesert standards and maintain that infrastrucrure going fonvard.
.�funif•inanc7u! b
Bermudu Dune�Alrrnirrpal.Servire nnd lnitra!Fi�ca!FeruiGilih�Keview
4. REVENUE ANALYSIS
'l�is secuon describcs thc approach used to cstimate additional revenucs for the Cir�- of I'alm I�esert
as a result of the proposed 13ermuda llunes annexation
Property Tax
Propert�� taa esrimates are bascd on a projection of rcal propert�� assessed value multiplicd by a local
public agency's share of the one percent as valorem property tax, called a tax allocaaon factor
(T�1I). C)nl�� assessed properr��valuc within a jurisdicuon gcncratcs properry tax for that jurisdicuon.
}�'or exam�le, in an incorporated area the city general fund, counry general fund, the public school
district, and possibly separate fire and library cii�trict funds would each have a T11T that in sum
�vould equal the one percent tax. "I',�Fs ma�� vary by rax rate area �vithin a jurisdiction and are
calculated b}� the County Auditor-Controller. Thc mctliodolc>gy used in this stud}� to cstimatc
property tax is cxplained belo�v.
Assessed Value
�ls�essed ��aluc is the value carried on the properry tax rolls for calculadng properry taxes. �4arket
value is rvpicall�� higher than assessed value brcausc Proposiuon 13 limits annual incrcascs in
assessed value to two percent unul thc property is resold. �ssessed ��alue is mulaplicd by the one
percent property tas rate and then by tlic tax allocadon factor ('1'�1F) applicable to the public apency
tc> calculate propert�� tax revenue.
Thc gcneral fund '1'.�1- tliat a city recei��cs frc>m the counry general Fund from an anncxation arca is
subject to negotiauc>n berwcen the ciry and the counry. The amount is not determined by a statutort•
formula. �I'he Counh• of Riverside and thc (;it�� of Palm Desert inidallti• agreed to cxchan�c properr��
taxcs upon annexauons into the Citv at a ratc c�f rivenry-tive percent (2�"4,) of the County's sharc of
the annesed properri' tax revenue. f�o�vever, in 1992 the State of Califomia cnacted legislauon that
shifted a pordon of the financial responsibilit}' fc>r funding eciucation to local agencies through a
shift of propern� tax revenucs to "educauonal revenue augmentadon funds" (F:R.��. �1s such,
GR.1T shifts ha��e resulted in renegouau�ns bet�vicen thc (;itti' and thc County� on the exchange of
propern' taxes upon annexations. 1~�or this Repc>rt, and based upon ciiscussions �vith the City's
rinance Department, we assume that the City will receive three and a half percent c�f the County�'s
share of thc annexcd propert}� taa re�-enue, based on negotiations bet�vccn thc CitS• and County f�r
the Palm I�esert (;reens and Suncrest Country Club annexation that occurred in 2003 (�nnexatic>ti
No. 37).
In addidon, thc allocauon of property tax revrnue between the Count}- and Ciry for properties
located in Bermuda llunes that are identified as a part of a rede�•el�pment area of the C:ounty� ma�•
be negouated separately, �vhicll could ultimately� further rec3uce the am�unt of propert`� taa re�•enue
that tlie Cit�� would receive as ic�enufiecl in tliis Report. Siiice it is not kno�vn wliat the re�ult �f the
negotiations would be, we a�sumed that the Cit}� �vould receive the same share of the propert�� tax
revcnuc as :lnncxaucm '�io. 37,which is a conservative assumpuon.
Sales Tax
The 5tatc I3oard of I�yualization (S13C)C) prc>vidcd salcs tas data for rcporting busincsscs with
operatin� addresscs in 13crmuda Duncs. Thc SBnr. supplicd thc data bascd on a list c>f addres�cs,
�vhich were obtained throiigh a variety of research and verification methods.
.11unrFinui�rrr�/ 9
Bermudu I�une.c�L1uni�ipn!Se�vi�e anA I nitiu!I~irru!t-rasrGiGt} Keview
13ermuda I�unes is anticipated ro attract adciitional neighborhood and communit}� rctail to scrvc
l�cal residents and businesses, but is unlikely to attract re�,nonal rctail dcvclopmcnt, therefore, a
consen�ati�•e escalauon�vas applied ro the sales tax revenue provided by the SI3OC.
Similar to the property taxes, the allocation of sales tax gcncrated by properties located in Bermuda
L�unes that are idenuficd as bcing �vithin a rcdevelopment area of the Counry �vould also be
determined through City and Counr�� negouations. �1s such, the amount of sales tax idenufied within
this Rc�ort may be hi�her than the amount the Ciry of Palm Dcsert would actually� receive upon
anncxad�n,�vhich �vill be deterinined througli negotiations bct�vicen the Cin� and Counh�.
Property Transfer Tax
Propertti� transfer tax revenues are esumated usinp the a��cragc resale value of property within the
13crmuda dunes areas that occurred in the past three years. Thc average price point of sale was thcn
used to estimate future sales based on the current cc>nciiaon of the real estate market and histc>rical
sales in thc arca. lipon annexation, the Counry and the Cir�- c>f Palm Dcsert would eveniti• split the
current Counh�unincorporated arca rate of S1.10 per$1,000 of value on each real estate transacuon.
Timeshare Mitigation Fee
In 1989, tlic Cit}' Council of 1'alm llescrt passed a 'Loning (�rdinance that establishcd standards and
related fees for dcvcloping ameshare de��clopmcnts within the City. It is not anucipatcd that there
will be an�� umeshare devclopmcnts built �vithin Bermuda Duncs at this tune and no revenuc has
bccn considered for this Report.
Gas Tax
Gas tax (highway� users tax) revenue is a sub��ention mllected by the state and allocated to ciue� and
counues based on a statutory formula. 'I'he gas tas pla5-s an important role in incrcasing re�•enues for
annexing ciues without generaung a negauec tiscal impact on counties. The State subvenuon
formula for gas tax does not adjust the share of state�vidc revenue allocated to c�unties because of
an annexauc�n. ,lnnesed areas receive gas tas revenue from the share of statewide revenue allocated
to cities. Thus, c�unties are able to transfer c�sts fc>r r<>ad maintenance t� the anne�:ing ciry while
still retaining this revenuc source.
Transient Occupancy Tax
'I'he I3ermuda llunes area has one thirn--four (3-�) room hotcl, which wc>uld be subject to thc C;it}�
of Palm I�cscrt Transient Occupanc}• T'ax (TO"1� rate of 9%. Thc rcvcnue that ma�� be �cncratcd
upon anne�auon through the T(�"1� was estimatcd based on the average daily� room rate equal to
5185 and a ri�ical occupancy factor of 7�°o.
Business Licenses
The (:ity� c>f 1'alm l�esert collects business license revenue based on the total amount of gross sales a
business gencratcs. Por this Report, thc amount of sales tax gencratcd �vithin F3ermuda Duncs was
used to calculate the total amount of gross sales generated within Bermuda I�unes. "1'he calculated
amount was thcn c�'enly distributed to all business to deternzinc the average amount of�ross sales
on a per busincss basis. Z�he busincss license fee relatcd tc> the calculated averagc gross sales per
business �vas then used t� determine the amount c>f revenue the Citv �vould collect for business
licenses.
,1lunit�rnanau! 10
Bern�uda Uuner��iuni�rpal.S'en.ice and lnilra!Fi,c�u!FeutrGillry Review
• �
For the Cit�� �f I'alm Descrt, annexauon area re�-enucs arc based on rcvcnues currendy collected
citywide by the City. Collection of these revenues would be extended at current rates to the
annexation area.
In all cases, the calculauon of other revenues is based on a per capita anal}'sis using FY 2007-2008
budKcted re��enucs. Details by revenuc n�e are discussed belrnv:
Franchise Taxes and Fees
This revenue is generated thrc>ugh franchise agreements for sen�ices such as solid �vaste collection.
Both the (;it}� of Palm L�escrt and the C�unry (in the unincorporated area only�) collect franchise
taxes and fccs. '1'he Ciry of Palm Desert is assumed co collect thc same re��enuc on a per capita basis
from the annexauon arca that it currentlS� collects ciry�vide.
Traffic Fines
'1'he Ciry of Palm l�esert is assumeci to recei��c the same revenue per capita for Bermuda Dunes that
it currendti'generates citylvide.
Interest Income
Interest eamings on general fund balances generate interest income. "1'he (;in� of Palm llescrt is
assumed to generatc thc same revenuc per capita for �3crmuda Dunes that it currcntl�� generates
cin•widc.
Development Fees and Fees for Services
recs imposed b�� the Cit}� for derelopment and services are calculated to offset the acrual costs for
addidonal infrastructure caused by new devclopment and the actual cost of pro��iding a parucular
service. "1'hereforc, this re�-enue sourcc is noc inctuded in rcvenue projecuons for thc Bermuda
I�unes anne�ation.
Vehicle License Fees
The vehicle license fee is a taa on o�vnership of a re�istered vehicle, �vhich is a percentage of the
value of a vehicle paid by owners ro the i�epartment of�'�i<�wr Vehicles. The percenta�;e has recend}'
been reduced from 2% �f tlie car's valuc ro O.G�%. Vehicle license fec (VI.F� reventie is collected b}�
the state and allocated to citics and counues based on a statutory formula. Sirnilar to the gas tax,
�'1,1-' plat�s an important role in incrcasing revenues for incorporaung or annexing ciucs while
reducing the potential negauve fiscal imPacts on counues. The State subvenuon formula for VLr
does n�t adjust the share of state�vide re��enue allocated to counnes because of an anne�au�n.
Annexed arcas reccive their VI.F re�-enuc from the share of statewidc revenuc allocated to ciues.
Z'hus, counues arc ablc to transfer service costs whilc still retaining a major revcnuc sourcc. Thc
addiuonal p�puladon in an annexaaon arca w<�uld increase the Citv's per capita VLf� revenue.
.11unrF'inancla! 11
L3ern�uda Uunet Annexntron Fitru/Feutibili!}•Slurly
City of Palm Desert Special Taxes and Assessments
The (;in� of Palm Desert currently� le�•ies a special tax referred to as the I'rop � 1-'ire "1'ax, which was
approved by at least 2/3rds of the registered voters in 1980. Thc tax is lcvicd a�ainst all properuc s
within thc Cir�� to fund a pordon of the firc protcction and prevendon services provided b�� the Ciry
throu�h contract with the County-.
Thc ratcs appro��ed by the��oters are as follows:
S-�8.00 per Single-Famil�� Residence
$3G.00 per ;�1ulu-I��amily Residence
S-�8.00+ per Commercial (based c>n size of structure)
S2-}.00 per Vacant 1'arcel
The city�vide special tax would be estended to the annexarion arca to fund thc samc scr�•iccs. �1
parccl database of the 13crmuda Dunes area was crcated and the amount of re��enue that �vould be
gcncratcd from the Fire"l�ax�vas calculated based on the rates idenatied above.
1'o fund services for individual subdivisions, the City anricipates establishing landscape and lighdng
districts and assessment clistricts in new subdivisions as the}� develop in Palm Desert, as it does in
thc <:itv currcntiv.
:L1uniFinu�r�rul 12
Bern�udu Du�ret�Iluni�rf�ul.Sriviie a�rd Initin!H�xa!FeariGili!} Review
5. EXPENDITURES
General Fund
The F3ermuda llunes communit�� is located in southwestern Riverside Count}�. Bermuda llunes has a
populauon of about G,229 based on the 2000 census and covers an area approximatcly 3.5 square
miles. "1'he commurut}� currendy receives general government services from the CountS�. General
government funcuons arc provided primarily from thc rounty's administraaon building in the Cit}�
of Riverside and include:
♦ :ldminiscrauon (CI-:O) ♦ I,and usc planning
♦ Clerk ♦ Lc�;al
♦ ]�inance (:lssessor,Trcasurer, Auditor) ♦ ].e�islative (Roard of Supemisors)
♦ Human resources ♦ Risk management
♦ Inf<�rmation tcchnolog,y
These funcrions are critical ro the operau�n of a l�cal public agenc� and therefore are fully
transferred to the Cit}� of Palm l�escrt upon annexation. Other serviccs such as police and firc are
also transferred, but in this case, police and fire service, are contracted back ro the County at the
level of ser�•ices cstablished by the city�of Palm Dcscrt.
Costs of Service
r111 gcneral �ovcrnment service costs for the Cit�� of 1'alm I�cscrt and thc Count�� of Riverside arc
esdmated using either a per capita method or case studj� approach as described in the Cost nf.Sendcrs
�tilelhodology section, abo��e. Cit�� costs are bascd on thc cxtension of gcneral govcrnment ser�•iccs to
thc annesation area.
Capital improvements and Related Maintenance
,1s part of this Repc>rt, capital facility� needs were identified to determine the cost necessary� to brin�
}3ermuda Dunes existing basic infrastructure up to the standards of the Ciry of Palm l�esert, upon
annexauon. Unincorporated areas tend to havc lcnver exisung facility- standards compared to thc
polic}' objcctiees of anncxing ciucs. The capital improvcmcnts addresscd in thi� sccuon includc
stc>rm drain faciliues, sewer facilities, street improvements, and maintenance related to such
improvements. '1'he expectcd annual c�sts associated with thcse unpro��cmcnts are summarized
below.
Sanitan� Sc�vcrs...................................................................29�,397
Stc>rm I�rains......................................................................7-�G,G67
�ic�v 5treet Impr���einents...............................................283,983
Traffic Si�mals.....................................................................-�80,00()
Road �4aintenance........................................................$l�13.770
Total �;xpected rinnual Cosc.......................................S3,31£�,817
�ttachcd, as 1-:xhibit ".1", is a detailcd descripdon of the nccc;sary capital improvements and related
cost identified above.
:LfunrFinuncial 13
Rermudu Dune;�nnexa�in�r Fr;ra!FeaciLi/ih�.Sludj�
6. INITIAL FISCAL REVIEW
The purposc of the inival fiscal revic�v is to provide esnmatcs of the nct fiscal impacts on the local
agency from potenual changes in gc>vernance. �iet fiscal impacts are the ongoing re��enues [hat
woulci become available to the City of Palm I�esert net of the Cin�'s operaung costs associated with
servin�the annexation area.
- • •
"1'his section describes se��eral key assumpuons not addressed in prior chapters.
titost cost factc�rs such as salary rates, non-personnel c�sts, and per capita costs include a one
percent annual real increase (before inflauon). For personnel costs, this increasc reflects standard
public agency� compensauon pc>licies that provide increases for length of service (often called "step"
increases). '1'hese incrcases can average five percent annuall�� in addidon to cost-of-living increases
(inflauon), but when a nc�v employ�cc is hired thc salar�� drops back to the first step. "r�7ng non-
personnel costs ro this samc real rate of increase integrates a small de�ree of conservausm in the
esumates. �lssuming a one F�crcent real increase in co;cs (before inflacion) is reasonable based on
analvsis of other cides.
Fiscal Neutrality Not Addressed
Statc la�v requires that L�11-�CO cannot approve the annexauon�vithout either dcmonstrating that thc
impact on an affecred agenc�-is fiscall}� neutrat, or in this case, recciving the approval of the agcncy.
"I'liis inival fiscal review does not acic�-ess the fiscal neutralit�� reyuirement. The issue w�uld be
a�propriatel� adciressed at the next sta�e during the compledon of a comprehensi�•e fiscal anal��sis
rcyuired by� statutc prior to an anncxarion.
• •
If thc annexation of 13crmuda Uuncs into the Cit}� of Palm I�esert is pursued, the impact of the
fiscal ncutralitti' requircmcnt on the County will reyuirc cvaluadon. This stud}' indicatcs that the
annexauon of l�ermuda Dunes to the Citti� of Palm llesert would result in a negative fiscal impact to
the Cin� approxirnatcly� cqual to S7,45�{,100 in fiscal j•car 20O7/2008, S7,727,037 in fiscal ycar
2008/2O09, and S8,OOH,212 in tiscal ��ear 2(109/2010. '1liereforc, addiuonal rc��cnues would bc
necessary� for tlie (;ity to miugate tlie potenual ne�;au��e financial impact caused by the prop�sed
anncxation.
.I funrl~inancia! 14
Be�murlu Uune.c,1luninpul.Servtte and Ini�iul Nirrnl Fea.riGrlilJ�Keviem
EXHIBIT A - PUBLIC INFRASTRUCTURE ANALYSIS
��'ater, se�vage ciisposal, natural gas, electrical, teleph<>ne, cable '1'.V., internet, flood control and
public streets are basic ameniacs and services necessar�� for an acceptable yuality of life for residents
in an arca. Z'hese services are provided bv a combination of regulated public utilities, special districts
and local go��ernment. �1 cit}� should consider what responsibiliry it �vill have in providin� these
services to che area. For the Bermuda Dunes area, natural gas, electricity, telephone, cable T.V. and
internet sen�ices will be prc>vided by specific regulated public udlities, resulring in no additional
burdcn on citti� funds.
Some of the earlier dcvelopments �vithin the 13crmuda I�unes arca have bccn served with csisting
c>verhead electrical and communicau<�n faciliues. Newer developments are ty�ically served b�•
undcrground cyuipment. Thc under�r�unding of thc e�isung overhead cicctrical and
communicauon facilities has becn desirable in other areas of the City of Palm l�escrt, but has
t}�pically been accomplished through assessment ciistrict funding mechanisms, with no adciitional
cost burden to the Cin�. Sinee utiliry undergrounciing is primaril�� an aesthetic benefit, and not a
required impro��ement to an area, and results in no cost to the City, �ve will focus on �vater, se�ver,
flood control and street impro��ements and maintenance.
In aniiexing am• area, a city should consider the costs of service for the area compared �vith the
revenues tc> be recei�-ed from the area prc�posed for annexadon. If the re��enues e�ceed the cost of
services, thcn funds are available to providc addiuonal improvements and/or ser��ices. On thc other
hand, the cost of services, which incluc�e the maintenance of the infrastnicture i.e. sewers, �vater
mains, streets and flooc� control s��;tcros, often cxcccds the revenucs rcceived from the area. "I'liis
can result in an addiuonal burden on residcnts�vithin thc cxistinp cit�� b<>unciaries.
Residents in any de�•cl�ped area espect certain infrastructure impr<�vements, and the locally
responsible �c>verning bodies are eYpected to pro�•ide these services. The basic services to be
considered are water, sanitarion, flood control and streets. u/ater and sanitary sewers serving
properucs in the Hcrmuda llunes arca are owned anci operated by thc Coachella Vallcy �ti'ater
I�istrict (CVVG'I�). CV�Y�'ll is also empowered ro pr���ide major flood control protecuon. I Iowever,
the Ic>cal go�-ernin�; bc>d�� installs local storm drains. These local drains transfer storm water from
streets anci carr�� it underground in pi�es or cuh•erts, or in abovegrounc� channels. St�rm water
rem�vcd fr�m streets makcs them safer and less costlti� to maintain.
WATER
t3uildings may- not be constructed on prc>perties �vith<�ut ci�mestic water and adequate fire
protecuon. CVVi-'I7 pro��ides thc nccessary�vatcr suppl�� and delivcry s}�stems to providc this service.
New �mpertics arc required to pa�� the cost of watcr main extensions to ser�-e s�ecific propertics.
'1'hese mains are then deciicated at no cost t� CV�t'I� f�r thcir repair and maintenance in per�etuit5�.
"1'herefore, there is no additional cost t� the Cit}• for water scrvice ro an area.
SEWAGE DISPOSAL/SANITARY SEWERS
Buildings on properues within thc 13cnnuda I�uncs arca are either servcd b�- public sanitary sc�vers
owncd and operated by C�'��'ll, or by individual on-site s�-stems,i.c. sepuc tanks and sccpage pits or
leach fields. I�iany of the earlier builciings ��;ere sen�ed by individual on-site systems prior to the
availabilit�� of public sewers. For nr�v development, parucularly subdivisions of larger parcels into
smaller residenual lots, or parcels with muluple buildings, public sewers are typicall�� a reyuirement
imposed b�- the local jurisdicdon and/or the I�epartment of Ilealth Sen�ices. l.ltimatelv all
,1�funiFinun�iu! A-l
L�ernu�da l�une.r il�iunicipal S'ervi�e und lnrlrnl t'itia!F'ea�i�ilih Krvic�m
properdcs �vill be connectcd to public sanitar}� se�vers o�vned, operatcc� and maintaincd b5� C:�'�Y�'I�.
�s with thc installauon of �vatcr mains, property owncrs �vill pay the cost of installarion �f thc
scwers and then dcdicatc them to CV��'D. ,1lthough the Cit�� of Palm llesert �vill not bc responsible
for the cost of providing sanitary� scwers to servc cxisting properues which currently have on-sitc
ciisposal systems, the}� �vill be invol��ed in establishing improvement districts to provide for the
installauon of sanitary scwers and the assessment of the cost of these to the individual properties
being served. There ma�� be some ex�ectauon by properry owners that thc (;it}��vill fund all or sc�mc
�ortion of the cost of thc se�vers.
�lpproximatcl�• one-half of thc �3crmuda l�unes arca is currentl5� scr��cc3 by sewers. In ordcr to serve
the entire area, approximately 92,-�00 lincar feet of sanitary� sewer pipe would need to be installcd.
Thc cstimated cost of this installation in ?007 dollars is as follows:
Sewcr pipc..................................................................... S�,��0,G44'"
:�lanholes............................................................................. �8-},000
Contingcncics.................................................................. 1,2G�,92()
Sub-total.........................................................................S7,0G5,�?0
Dcai�m,inspection and incidcntals...............................1.7C�G.:i80
Z'otal esamated cost.....................................................$8,831,�00
�'� Includes individual latcral to the street ri�ht-of-�vay line but
does not include the cost of connecting on-site building
sewers to the street lateral.
The above costs are submittea without benefit of detailed design to deternune thr size c>f pipe or its
depth. Actual costs could be higher or lo�ver depending on final cicsign plans, and as menuoned,
would likcly be borne by propern�owners. {Iowever, thc abovic estimated cost docs provide an order
of magnitude and significance c>f the installation of public sanitar�- sewers to ser�c the area.
FLOOD CONTROL/FLOODING
The �3ermucla llunes area has been the subjecc oF pre��ious sruclies most notably the "L3ermuda
lluncs �1rca Drainage Stud1'' c�mplctcd in Scptember 1997. "1'he study concluded, "F3ecause currcnt
TC;�i�1 mappinp does not idcntify area within the study� boundaries as subject to flooding dceper
than one (1) fcx�t, during a 1(10-��ear storm, it is generally held that as dc��clopment �r�ceeds
responsibly, there urill condnue to be litde threat of inundation �f structures." .1lthough structures,
exisung and future, �vill not be inundated if de�•elopment pr�ceeas responsibl�•, local �treet floodin�
docs and will occur. Streets that are not passable during storm flo�vs do not all<�w residents t� access
their dwcllin�;s or businesses in the arca. �1 street free of flood water, is a ytialit}• �f life and service
le��el expectadon of residcnts.
'1'he Bctmuda Dunes Drainage Study� idenufies Drainagc �1rea "�", which is between �'ashington
Boulc��ard on the west,JefEerson Street on thc cast, tnterstate 10 on the north and Avcnuc -32 on the
south. It also includes an area south of :lvcnue �2 between Glass Drive and Jefferson Strect. It
inciicates storm drain impro�•ements to be constructed in �ti'ashington Street, �'ucca I,ane, Starlight
Lane, ,�dams Street, 1�ernutagc Drive and ���enue -}? The esrimated cost of these improvements in
1997 dollars is �9,Q�9,QOQ. 'Ihc outict for chis sy�stem is an open un-named channel that is a part of
thc regional s��stem in the I�1id Valle�� �torm�'ater I'roject. "11�e esumaced cost in 1997 d�llars of this
un-named channel oudet for the 13ermuda Dunes area is $2,��0,-}13. To pro�•ide a complete
.tiluniFinancta! /1 2
L3ermuda T�une;:tlunier�nlServrre and lrrilialTi;iul t-eaJil�ility Keview
funcdoning sti•stcm to removc storm water from the streets is thus a combination of the
construction of storm cirains in the Bermuda Dunes area, and construcuon of the un-named outlet
channel, a total cost of�1G,11�,000 in 2007 dollars. "1'his cost esrimate docs not include the cost c>f
right-of-�vay acquisiti�n for the unnamed channel since this �vould reyuire a stud� in and of itsclf
once thc actual desi�m is complctcd.
�lpproximately 7�°'0 of the arca includcd in this annc�cadon stud}' is desigr►atcd "Non-Tributar��" in
the Bermuda llunes �1rca llraina�c Snidy• This means that the area contributes no storm water
runoff to the streets, and ulumatcl}� to the �ropo:ed storm drains ro serve thc arca. "I'his is justified
in the Drainage Study� with; "In general, the major land use category, resort resic3enaal, if�roperly
de�•elo�ed, �vill cause a reducdon c>f storm water runoff. Further, ficld reconnaissance performed
�vithin the stud5� limits indicat�s the existence of numerous small to medium size retention basins
which cc�uld cause sunilar reducuon of peak runoff."
The Ciry has inciicated that this reduction in runoff is problemaric. �lreas west of Vi/ashington Street
in the City wcre also dcsignated as non-tributary�, but the (:iry is experiencing runoff from these
areas to the surrounciing streets. To further yuantifti� thc cffects of this situauon would require a nc�v
analysis and re��ic�v of the Bermuda I�uncs �rea I�rainage Study, which is bcy�nd the scope of this
report. Howe�•er, same recognition c�f this fact shc�uld be included in the srud}'� �n}' runoff from thc
non-tributar5� area �vould flo�v either tc> the �rea "�1" storm cirains or to the �1rea "1~�" storm drains.
.3rea "F" scrves the Cir�� of La Luinta and would be their respc>nsibility. Storm drains for.1rea "A"
may� need to be increased to double their current capaciry'• I Iowever, doubling the capaciry wc>uld
onl�� increase the size by� �0°'0. "1'herefore, �ve have included an additional �(1°% to the cc>st of the
currcnt proposal for :1rea "r1". �lgain, we bclic�•e this to bc a consen-ati��c esumatc �incc much of
thc area alreadti� rctains much of the runoff c>n the sitc, which is far lcss than wc �vould expect frc�m
arcas without onsite retenaon. "1'hus the cost of the stc>rm drains to sen•e tlic 13crmuda l�uncs
.�nncsauon �1rea mav be as much as �22,�00,000 in 2007 dollar�.
STREETS
Thc maintenancc �f public strcets is one of thc most significant cost burdcns that a city� must weigh
�vhen considering a proposed annexation area. We will only consider publicl�� dedicated, �r to be
dedicated streets. Pri�•atc screets, whcther gated or un-gated, arc not a ciry responsibilit��. .1s
discussed previously for �vater and sanitary se�ver systems, the installadon c�f streets is usuall�� a
rcyuirement for nc�v de�•elopmcnt to procecd. L�nlike new water and sc�ver s}-stems, �vhicll are
owncd ancl maintaincd by C��X�D, ncw J�ublic strccts will be owned and maintained b�� the Ciry at
the (;ity's expensc. Theref�re, for the 13ennuda Dunes area, �ve must consider the cost of
maintaining e�cisting paved streets, and anuci�ate the cost �f maintaining those streets that �vill be
installed for new developmcnt.
Currendy thcre are a��ro�cimatelv 19 centcrline miles �f full}' or paraally improved �ublic street�
within thc Bcrmuda I�unes arca. These are ciividcd into a litdc ovcr four and onc-half miles of major
high�vars such as ��'asliington Strcct, Country Club ctc. There are slightly over fc�ur miles of
secondarS� �r collector strerts such as ,ldams Strect, Yucca Lane etc. The largest group is local
streets, which account for more than 10 miles �f the total. �Y�'e expect that there will be six miles of
new streets added to the area as large parcels are subciivided inro buildable lots, �vhich will all necd
their own street fronta�c t<� be created fc>r access to the new lots. The end result will be an area
c�ntaining sli�htiv over 25 centerline miles of strccts.
Thcre are substanually more paved strccts in the 13crmuda L�uiies arca, but as we indicatcd abc>��e,
these added streets are private,and the (:it��has no res�c�nsibility for the c�st c>f their maintenance.
.11unrNinnn�rn! r1-?
Br�muda Dune��LfunnrpulServi�e und Iniliu/Fi.rculFeasiGilit��Keviem
"1'here are a numbcr of csisung public strects �vith full street improvements, curb gutter, sidewalks
and strcctlights. �lmong these streets are areas with only ininimal im�rovements, two lancs of
pavcmcnt for vchicular traffic. ,1 city' can andcipate that as ne�v developmcnt installs full strcct
improvements, thcrc �vill bc a dcsire to have full improvements constructed alon� thc cndre strcct
length, including the areas with minimal improvements. Because the exisung developed areas cannot
be conciiuoncd to install thc impr�vements across their property, these impro��cmcnts oftcnumes
arc installcd by the cir�� at its expense. "1'herefore, we need to include thc cost of full street
improvements in these exisun� de��clopcd arcas. Cxam�lcs of thcse areas include �'ucca Lane,
�lvcnuc -I1, and Darb�� Road.
S�me of the older exisung developed areas such as 1'�rt R�yal rlvenuc and Jamaica Sands Drivc arc
improved with rolled curb and gutter rather than stand up curb and gutter, and are without
sidewalks. Because the rolled curb and gutter currentl�� provides adcyuatc drainagc for thc strccts,
and thc�� have functioned for y-ears without sidewalks, we expect no addiuonal improvements to bc
addcd to thc�sc arcas.
New Street Improvements
Construction Cost ........................................................$G,197,700
Contin�encies.....................................................................G19.R0�
�ub-Total .......................................................................SG,817,500
I�esign, Inspection and Conan�encies......................S1,7�2,()()()
�1'otal Strcet Improvements.........................................S8,519,500
As the��acant properues �vithin Bermuda Uunes are developed, addiaonal eehicle tri�s �vill be added
ro the streets and intersecdons. The m<�rc hca��ily tra��cicd intcrsccuons �vill rcyuirc thc installation
of ne�v traffic signals to provide better traffic flow in the area. F3ased on the number of non-
si�malizcd intcrsccuons and anucipatcd incrcascd traffic flow, wc cxpcct that thcrc is a nccd fc>r six
(G) new signalized intersecuons over the nest tive (5) �•ears.
Lach of thcsc public srrcccs, cithcr cxisung or ncwl�- constructcd, must bc maintaincd on a rcgular
basis to cnsurc that thcp arc cirivablc, and that thc}� will not dctcrioratc tc> a pc>int �vhcrc thcy fail
such as e�-idenced on portions of Starlight I.ane. �1t failure the eYisrin� roadway must be removed.
Thc gcncrall}' acccptcd pracdcc is t� pr��•idc a rcgular pr�gram of maintcnancc bcforc a strcct fails
and must bc rcconstructcd. Thc cc>st of rcconstruction can bc tcn timcs thc cost of rcgular
maiiitenance.
In addiuon to the cost of pavement maintenance, we must add the cost �f maintaining and
energizing traftic signals, maintaining the landscaping within the strect ri�ht-of-wa��, the cost of
signing and striping and street s�veeping.
"1'raffic signal lamps must be changed as necessar��. �'iring must be repaireci and c�ntr�llers serviced
so that theti� operate as intendeci for traffic demands. Clectricit�� is also an on-going addiuonal cost
sen�in�; the public streets. :�s ne�v eyuipment is developed, traffic signals are often modified to keep
up with modern technolo�n�.
Signing fades and must be replaced as necessary. Traffic striping, especiall�� �vith the em�ironmentally�
fricncll}�paint�, fades and mu�t be replaced on a regular basis.
I,andscapin�; within the roadway must be watered, weeded, trimmed anc3 replaced as necessary. The
cost of maintaining the landscaping is a City� street cost. Currently the Cit`• annual expencis 58�,392
J4�rnrNinanctu! fl-�
Bermr�da Duner.l funiripulServi�e unr!Inilin!Filiu!Feud�ili!}•IZevieu�
per syuarc milc for landscaping maintenance. Bermuda Dunes encompasses approximatcl�� 3.�
squarc milcs, cxtcnding the cost per square mile for the (:iry t� the Fiermuda I�unes arc results in an
expectec� annual landscape maintenance cost of S281,370.
Streets must be swept on a regular basis w keep ciebris <�ut of the stc>rm drain system, to discourage
places for the breeding of mosyuitocs, and for thc wclfarc of business and the residents who live in
the arca.
There are a number c>f acceptable street maintenance schedules used by various jurisciictions. These
mav include a slurry seal, chip and seal and ovcrla�• of nc�v as�halt pavement. The type of
maintenance program depends as much on the past experience of the jurisdicaon as an�� other
factor. ��'hat is essential is that monies be set aside to bc ablc to �ro��idc thc maintenance before the
strcct fails. Por the purposes of this analysis, we su�cst that thc major and secondar�� highwa�•s be
o��erlaid �vith onc inch of rubberized asphalt on an eight-��ear c�•cic. To adciress thc build up of the
street secuon to unacce�table cross fall slopes and drainage, cold planing ro remove asphalt build up
is included. ror local streets a one-inch asphalt rubber overla�� on a 30 5�ear cy-cle is acceptable. '1'he
extended c}�cle for lc�cal streets is possible because of thc low��olume of traffic on these street,.
'1'he annual expected cost of maintenatice is a cc�mbination c>f pa��ement, signal, signing, striping,
landscape maintenancc and street sweeping. The esumated costs are detailed as follc>�vs:
1'avement maintenance................................................S1,05-�,000
'I'raffic 5i�mals....................................................................... 85,000
Signing and striping............................................................. 3�,000
].andscapc maintcnance....................................................281,370
�trect s�vccping..................................................................... SR,-�(1()
�1'otal;lnnual Road �faintenance Cost......................$1,�13,770
Thc cost of providing infrastructurc unprovements and maintenance fc�r thc Bcrmuda l�unes area is
a combination of those costs that are well defined and certain, and those that may be necessary, but
arc not certain. In addition, somc costs are �n goin� and annual in naturc, and �thers are a one-dmc
expenditure. In order tc> makc a reasonable anal��sis, �ve necd to make the assumpuon that onc ume
costs could be funded over a 30-y�ar period. ��'e ma}' then add the annual maintenance cost to the
annualized cost of constructing the improvements. "1'he 30-y�ear period seems apprc>priate because
infras�ructurc imprc>�•ements ma5� be bondcd and func�ec3 o�•er a 30-��car peri�d, the �;eneral plan for
cities has a horiion of 30 years, and the infrastructure included in this study has a useful life in
excess of 30 }'ears. Thcrefore there �vill be somc furure 30-}�ear span of rimc when annual
maintenance and infrastructure payments will be combined. This combination of costs �vill be �vhat
thc (:it}'c�uld expect if it wcrc to annex the Bermuda l�uncs arca.
VG'e �vill also rank them in the order of certaintti- co p�ssibly. Road maintenance is a certaint��, srorm
drains are probabl��a certainty�, and sanitary� sc�Ler� are possiblc but n�t certain.
.�1uniNrnaurral i1-�
�rrnrud«Dunel.�lunrnj��il.Se�vire und IrritialHr.rra/I~'e�uiGilih�Retnew
SUMMARY
(ANNUAL COST)
Sanitary Sewers.................................................................29-�,397 '
Storm llrains......................................................................7-}G,GG7
:�icw Street Imprcrvcmcnts...............................................283,9£�3
Traffic Signals...................................................................48(l.(1Cl(1'
Road �faintcnance........................................................S 1,�l:i.77()
Total �'xpectcd�lnnual Cost.......................................S3,318,817
1. As discussed in the .S'ewage T�i��osal/Sa�tita�y .Sewers section �f this
exhibit, the cost of installing scwcrs �vould likcly be bome b}'
properry <�wners in the affected area using an assessment district
mechanism, and�voulc� not be the respc�nsibility of the Cin� c>f Palm
I�esert.
2. Traffic signal annual costs arc calculated bascd <>n annual
installments for an initial fi��e-y�car period. Thc overall annual
amount will be reduccd be S-�80,000, bcginning in }-car si�.
SUMMARY
(BASED ON 30 YEAR TOTAL)
Sanitary Se�vers................................................................8,831,900
Stc>rm Drains.................................................................22,-}00,000
'.�Icw•Street imprcrvecnents............................................H,�19,�00
Traffic�ignals..................................................................2,-�00,000
Roac� tifaintenance......................................................S-1�.413,1()(1
Total F�;xpcctcd 30 Year Cost....................................S87,�G�1,�00
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EXHIBIT D - SALES TAX REVENUE AND COMMERCIAL PROPERTY LIST
STATE OF CA�IFQRN�A �
''_-__' '_'_'--_ .- ..-._ ... .. . . ... _---:_:_..-'
STATE BOAFD OF E�UAIIZATION ecT^*•EE
RESEARCM AND STATIST�CS SELT�ON AMC.6� �������F��
•SO N STqEET $AC�7�NEHTO CA�IFORNIA &Ll�EONMO
�O BO%9�?8�9.SACfiAMENTO.CA�if OiW�A?1279�OOE7 ��P����w'���0
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WWW p00 Gd 8OV TAiO DJPO.Nb�Y�YY El1�IM
�pV LwV
ipyrin PfYK�lq Inp�M
August 30,2007 sw a;:
qAY�JN�HqSf.
Mr.George J.Spi6otis F�O�"�`�
Riverside LAFCO
3850 Yne Street,Suite 110
Riverside,CA 92507-4277
Dear Mr.Spiliotis:
Per your Jufy 23,20071etter request,the annua12006 total 19'0 local sales tax revenue
generated from the Bermuda Dunes commercial properties(list was provided by MuniFinancial)
in the possible annexation area to the City of Palm Desert was 5707,100.
Attached is a list of businesses included in this study. Should you have any questions,or'rf I
may be of any fuRher assistance,please let me know.
Sincerely,
�Uet��-�/����"�
Wun-chi Wan9
Research Program Specialist
1NW:ems
AttaChment
cc: MuniFinancial
Attn:Habib Isaac and Jennie Carter
27368�a Industria,Suite 110
Temecula,CA 92590
,1 funiFmrmcial U-�
Bernrur4�Duner I~iria!HeatihilitJ�Slurfj-
eusn�Ess N�ure � siw.yti,,., snw cnv �p
BERMUDA DUNES COUNTRV CLUB �2360 ADAMS ST BERMUDA DUNES 92203-8071
MURPM'S GASLIGMT 7986p AVENUE 62 BERMUDA DUNES 9220.3-1453
THE OESERT SUN 78p78 COUNTRV CLUB DR BERMUOA DUNES 92203-8172
DUNN�EDWARDS PAINTS 7gp7B COUNTfiY CLUB DR BERMUDA OUNES 92203�8172
,IACK SAUTER GOODVEAR 78105 CAUNTRY CLUB DR BERMUDA DUNES 92203-9202
VERDICON 79t41 COUNTfiY ClU6 Dfi BERMUDA DUNES 92203-�282
TUqF STAR 79253 COUNTRY CLUB OR BERMUDA DUNES 92203-t229
MACKLiN MiRROR 8 GLASS 79469 COUNTRY CLUB DR BERMUDA DUNES 92203-t206
INTERACCESS SVSTEMS 7952i COUNTRY CLUB OA BERMUDA DUNES 9Y203-12a9
GOLF VENTURES WEST 79833 COUNTRV ClUB DR BERMUOA DUNES 9P203-1290
ENGLAND'S F7EMOOEL DOOR 79893 COUNTqY CLUB DFi BERMUDA DUNES 92203-�290
EARLY LIGMTING 79993 COUNTRY CLUB OR BERMUDA DUNES 92203•1280
HENRY'S GLASS 8 MIRROti 799�9 CAUNTRY CLUB DR BERMUDA DUNES 92203-�279
CALIFORNIA OESERT NURSERV �8600 DARBY RD BERMUDA DUNES 92203�9665
VINTAGE NURSERY 787$S DARBY RD BERMUDA DUNES 92203-9621
CAMERON NURSERY-TUHF PRODUCTS 78850 DARBY RD BERMUDA DUNES 92203-9205
HILLES UNION 76 r0p10 WASHINGTON AVE BERMUDA DUNES 922 0 3-92 0�
CARLS JF RESTAURANT 40p�,�0 WASHINGTON ST BERMUDA DUNES 92203-9201
LILI'S CHINESE 4010p WASMING70N ST BERMUOA DUNES 92203-9645
GEORGE'S PIACE 40100 WASHINGTON ST BERMUDA DUNES 92203-9644
JOE'S SUSMI 40100 WASHINGTON ST BERMUDA DUNES 92203•9645
CIRCIE K FOOD STOfiES a0100 WASMINGTON ST BERMUDA pUNES 92203-964 0
PIaA HUT e0100 WASHINGTON ST BERMUDA DUNES 92203-96aa
SUBWAY SANDWICHES 40t00 WASHINGTON ST BERMUDA DUNES 92203-964a
MARIO'S ITAUAN CAFE a01 W WASHINGTON Si BERMUDA DUNES 92203-9201
DAIRYOUEEN 4t800 WASHINGTON ST BERMUOA DUNES 92203�8�50
TROPICAL iANNING 4t8pp WASHINGTON ST BERMU�A DUNES 92203-815p
KENTUCKY FRIEDCMICKEN atB00 WASHINGTON ST BERMUDA DUNES 922038�50
ONE PRICE OPTICAL 4180p WA$FIINGTON ST BERMUDA DUNES 92203-8150
SUB KING 4tb00 WASHING70N ST BERMUDA DUNES 92203•8750
ESTREILA'S BEAUTY SUPPLY 41800 WASHINGTON ST BERMUDA DUNES 92203-8�50
MAII BOXES ETC at8pp WI�SMINGTON ST BERMUDA DUNES 92203$150
RITE AID 4t8pp WA$HINGTON ST BERMUOA DUNES 92203-8150
WALGREENS 42p10 WASMINGTON ST BERMUDA DUNES 92203-9610
WIENERSCHNtTZEL d TAS7EE FREEZE 42092 WASHINGTON ST BERMUDA DUNES 92203-Btg4
&G•O TiRES 42098 WASHiNGTON ST BERMUDA DUNES 92203-816a
StiqC DOG 42098 WASMINGTpN 5T BEFiMUDA DUNES 92203-8164
JUST JAVA COFFEE a2102 WASHINGTpN ST BERMUOA DUNES 92203-Bt63
BLOCKBUSTEfi VIDEO 42140 WASHING70N ST BERMUDA DUNES 92203-96�1
R/LLPMS GROCERY CO. 42150 WA$HINGTON ST BEFMUDA OUNES 92203961 I
POST NET 42209 WASMINGTON 5T BERMUDA OUNES 92203•8155
CiTY LITES WOMEN'S APPAFiEL 42218 WASHINGTON ST BEqMUDA OUNES 92203-8�55
DREAMWORLD MATTRESS a22Pp WASHINGTON ST BERMUDA DUNES 92203-8�55
JACK IN TME BOX 42250 WASHINGTpN ST BERMUOA DUNES 92203-8755
MOME GOODS a2sOp WASHINGiON ST BERMUOA DUNES 92203�B156
h9uniFrnancia! p_?
Phone (760) 347-3629 46780 Clinton St; Indio, CA 92201
Fax {760) 347-4995 VALLEY PLUMBIIVG CSLB #273088
��.�.,
N r)
.,' TJ.._.z
The Honorable Carlos L. Ortcga and Respectcd Council Membcrs � T'�•"
Palm Desert City Manager � ':t��'
73510 Fred Waring — �%+ � `
Palm Desert CA 92260 � �n�'�'
�.��� . .
r�;
2 _.,:,�i�,-,
_ J C:�
October l 0, 2007 � �'�
— �'c�
— m
Dear Staff and Council:
My family owns six parcels of land in Bermuda Dunes totaling 1 1.2 acres. We are currently constructing a new industrial
park building on 2 of those acres, to which we plan to move our business operations, Vallcy Plumbing Company.
We are aware that there may be some consideration toward the annexation of thc Bermuda Dunes area by eithcr The City of�
La Quinta, The City of Indio, or The City of Palm Desert. If, and when this subject is brought to the tablc in the City of
Palm Desert, pleasc sound our desire to be annexed by the City of Palm Desert. Plcase also express our opposition to being
annexed by thc City of La Quinta or the City of Indio.
Though I write this letter on bchalf of my family, my business, and myself, I believe that I am of the same mind set as the
majority of the property owners of I3ermuda Dunes. I basc this statcment on the fact that, a few years ago, there was a vote
by the property owners of�3ermuda Dunes as to whether to become a part of Indio, La Quinta, or Palm Desert. The vast
majority of the property owners voted to be named to be in the sphere of influence of The City of Palm Desert.
Below, are a few reasons I believe the City of Palm Desert would benefit from thc annexation of Bermuda Dunes.
With the recent general plan amendments by the County of Riverside, and the re-designation of many parcels from
residential to commercial and industrial, the county has greatly increased the potential of commercial retail and industrial
sales in the area. That being the case, the Bermuda Dunes area ought to be very desirable to a city that would be looking
prospectively into annexation of other areas. The inevitable commercial and industrial growth in our area will surely result
in revenue from a larger tax base, sales tax, and annual licenses for each new and existing business in Bermuda Dunes.
New conunercial and industrial devclopers would also foot the bill for infrastructure improvements such as road widening,
sewer laterals, street lights, etc.
We have also seen Riverside County, very recently, stepping up the level and frequency of improvements to the area. It is
our understanding that there is a good possibility of further infrastructure installations and improvements that will be done
in the near future, thereby relieving the eventual annexing body of those potential expenses.
If you wish to discuss this, plcase feel free to contact me at any time on my cell phone at(760)399-6991.
Sincerely,
Rob Ferraud
Page 1 of 1
Klassen, Rachelle
From: Sarie Gonsalves [sarie@valley-plumbing.com]
Sent: Wednesday, October 10, 2007 10:10 AM
To: Klassen, Rachelle
Subject: cityofpalmdesert.pdf-Adobe Reader
Per your conversation ���ith Rob this morning, I have attached a letter regarding Palm Desert and
Bermuda Dunes. If�you have any questions. please feel fi•ee to contact me.
Thank vou.
Sai•ie Gonsalves
Vallcy Plumbing Company
46780 Clinton Street
Indio. CA 9??O1
(760) 346-4695
10/10/2007