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HomeMy WebLinkAboutFiscal Impact Analysis Potential Annexation - Areas North of I-10CITY OF PALM D DEPARTMENT OF COMMUNI STAFF REPORT REQUEST: That the City Council receive and file a fiscal impact analysis and direct staff how to proceed regarding potential annexation of areas north of the Interstate 10 SUBMITTED BY: Lauri Aylaian, Director of Community Development DATE: 26 January 2012 CONTENTS: Fiscal Impact Analysis for Potential Annexation to the City of Palm Desert Recommendation That the City Council direct staff regarding further actions to take, if any, concerning annexation of areas north of Interstate 10. Executive Summary In September 2011, the City Council directed staff to obtain a feasibility study on territory north of Interstate 10 (140) for Sun City Palm Desert and the adjacent commercial -retail areas. They asked that the narrow strip of land between the current northern city limits and the centerline of 1-10 be included in the study, and later directed that the areas near the Classic Club and Xavier Preparatory High School, west of Palm Desert's current sphere of influence, be included in an alternative scenario. The City Council specifically excluded Bermuda Dunes from the areas to be studied, while acknowledging that LAFCO staff likely will not recommend to the LAFCO Commission annexation of Sun City without inclusion of Bermuda Dunes. This report provides the City Council with the results of the completed studies, and seeks direction on whether to further pursue potential annexation of any of the areas at this time. Discussion In response to direction from the City Council, staff retained Terra Nova Planning & Research to perform fiscal analyses of the potential annexation of territory to the city of Palm Desert. Such studies are generally undertaken by cities that are considering expansion to determine if -- and to what magnitude -- the area(s) under consideration will have a positive impact on the city's budget, or if they would require support'by the General Fund. In particular, these studies seek to establish the conditions once the area is built out, when one-time developer fees no longer provide short-term revenue enhancements. For the sake of this study, two different scenarios were considered. The first scenario analyzed revenues and expenditures for all of the Palm Desert sphere of influence land north of the current city limits. The boundaries of this option, called Scenario A, are as outlined in red on the following map. Potential Annexation Fiscal Impact Analysis 26 January 2012 Page 3 of 5 The results of this analysis show that for both scenarios, the revenues fall far short of the City's cost of providing services. This holds true for the present, when large portions of the areas are undeveloped, and for the future when all areas are built out. One of the fundamental reasons for this shortfall is the high percentage of residential lands in the area, and the comparatively small percentage of commercial sales tax -generating development. For comparison sake, ten percent of the land within Palm Desert's existing boundaries is devoted to commercial development, which accounts for 34% of the revenue to the General Fund. However, in Scenarios A and B, the percentage of sales tax -generating commercial land is less than half of that. The conclusions of a fiscal impact analysis can change significantly by changing the assumptions regarding land use, general administrative costs, sales tax generation, and the costs of providing public safety. Consequently, staff worked closely with Terra Nova to identify and quantify the most likely impacts of annexing territory north of 1-10. Specifically, the following precepts were judged to be key for a valid calculation of fiscal impact: Undeveloped lands are assumed to be developed with land uses consistent with those designated in approved specific plans or, where no specific plans have been approved, with the City of Palm Desert General Plan. Because some of the land is already developed, the City will see immediate revenues and costs with either Scenario A or Scenario B annexation. Police services will be required at the same officer -to -resident ratio as is provided in the rest of the city. Although Sun City itself may require lesser policing because it is a gated community with its own security, the converse is likely to be true in the remaining annexation areas, which are largely planned as medium -to -high density residential developments; this is true in other parts of the City that have a mix of country clubs and apartments or open subdivisions. The City will receive only 7% of the total 1 % property tax assessed projects in the annexation areas. Property tax revenues will be further reduced due to the City's mandated contributions to the Education Revenue Augmentation Fund (ERAF). Approximately half of the 7% property tax revenue collected by Riverside County is assumed to continue to be contributed to ERAF or an equivalent "revenue sharing" program. Some line items associated with the cost of general government will increase perceptibly as a result of annexation, while others will not. For instance, staffing levels, benefits, and overhead costs should not change for the City Manager's office, the City Council, and departments such as Finance, Special Events, and Risk Management. However, annexation would result in proportionally greater need for services such as: maintenance of roads, parks, storm drain and landscaping; police and fire services; code enforcement and animal control; and permitting, plan check, and inspections. For years, the Redevelopment Agency and the General Fund have subsidized the Capital Reserve Fund by paying for major public works maintenance projects, such as drainage, paving, reroofing, and landscaping. The true cost of maintaining the City's infrastructure must be calculated using all funds spent on maintenance, not gAplanningVauri aylaian\staff reports\sun city annexation fiscal impact analysis 1-26-12_docx Potential Annexation Fiscal Impact Analysis 26 January 2012 Page 4 of 5 just those monies that were spent from the General Fund. These subsidies are not reflected in this study. It is therefore likely that the true cost of providing services to the annexation area will be greater than shown. Fiscal Analysis The findings of the fiscal impact analysis are briefly summarized here. Scenario A Annexation of Scenario A will add an estimated 15,144 residents to the City of Palm Desert. Build out of this area is projected to occur in ten years, at which time potentially $6.9 million annually in revenues would be generated. The largest single revenue generator is expected to be local Sales Tax ($2.3 million annually at 10-year build out), which is related to the second highest revenue source, Structural Fire Tax ($1.5 million annually at 10-year build out). These revenues are dependent upon commercial sales tax volume in the annexation area. The costs associated with serving this new area and its population are projected to be approximately $12.6 million annually at the end of the 10-year build out period. The most significant costs are those from Police Protection ($5.2 million annually at build out), closely followed by those from General Government operations ($4.2 million annually at build out). As such, development of the area is expected to result in an annual revenue shortfall of approximately $4.7 million at the end of the first five-year period. The shortfall is projected to grow to $5.6 million by build out at the end of the second five-year period. This is, in part, associated with the high percentage of residential development in the area and the costs of providing services to residents, and a comparatively small percentage of commercial sales tax - generating development. Residential lands comprise nearly 47% of the entire annexation area, and commercial lands account for 4%. Developer impact fee (DIF) revenues are projected to be $5.09 million at phase build out of each of the two phases. This assumes that development occurs evenly over the 10-year build out period. The highest sources of DIF revenue will be from the New Construction Tax and the Park & Recreation Facilities Fund, which will benefit from the future construction of new single-family and mufti -family dwelling units in the annexation area, particularly those in the Mirasera Specific Plan. Scenario B Annexation of Scenario B will result in a population increase of approximately 15,779 to the City of Palm Desert. Build out of the undeveloped lands in Scenario B is expected to take 20 years. Revenues at the end of the 20-year build out period are projected to be approximately $9.86 million annually. As with Scenario A, the largest revenue source will be local Sales Tax ($3.9 million annually), followed by Structural Fire Tax ($1.8 million annually) and Transient Occupancy Tax ($1.5 million annually). At the end of the 20-year build out period, annual costs are projected to be $13.4 million. As with Scenario A, the highest costs are associated with providing police protection ($5.5 million) and general government services ($4.49 million) to existing and future residents. g:\planning\lauri aylaian\staff reports\sun city annexation fiscal impact analysis 1-26-12.docx Potential Annexation Fiscal Impact Analysis 26 January 2012 Page 5of5 Build out of Scenario B is expected to generate an annual revenue shortfall of approximately $3.9 million at the end of the first five-year build out period. However, the shortfall is projected to fall slightly to $3.5 million at the end of the fourth five-year period. Like Scenario A, residential development accounts for a much greater percentage of land in the annexation area (37%) than commercial development (5%), and sales tax -generating opportunities are limited. One-time revenues resulting from Developer Impact Fees in Scenario B are expected to be $4.3 million at build out of each phase, assuming development occurs evenly over the 20-year build out period. These revenues will constitute a significant revenue source to the City over the 20- year build out period, but they are one-time revenues that will be realized only as new development occurs. Submitted by: Lauri Aylaian Director of Community Development M. Wohlmuth, City Manager Rev" by: P Gibson Director of Finance gAplanning\lauri aylaian\staff repoits\sun city annexation fiscal impact analysis 1-26-12.docx FISCAL IMPACT ANALYSIS FOR POTENTIAL ANNEXATION to the CITY OF PALM DESERT Prepared for City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Prepared by r � -A Terra Nova Planning & Research, Inc.® 42635 Melanie Place, Suite 101 Palm Desert, CA 92211 January 2012 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation FISCAL IMPACT ANALYSIS for POTENTIAL ANNEXATION to the CITY OF PALM DESERT Table of Contents I. Introduction, Project Description and Demographics A. Introduction 3 B. Project Description 4 1. Scenario A Annexation Area 5 2. Scenario B Annexation Area 12 C. City of Palm Desert Demographics 16 II. Potential Revenue From Annexation A. General Fund 17 B. Special Revenue Funds 22 1. Annual Revenues 22 2. One -Time Revenues 23 C. Investment Income 26 III. Potential Costs From Annexation A. General Fund 27 B. Fire Fund 30 IV. Build out Assumptions A. Build out Phasing 32 B. Land Use Designations 33 C. Build out Calculations 33 V. Cost/Revenue Analysis A. Cost/Revenue Summaries 37 B. Conclusions 42 1 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation LIST OF EXHIBITS Exhibit 1: Scenario A Annexation Boundary Map 6 Exhibit 2: Sphere -of -Influence Map 7 Exhibit 3: Specific Plans Map 8 Exhibit 4: Land Use Map 11 Exhibit 5: Scenario B Annexation Boundary Map 13 LIST OF TABLES Table l: Scenario A Developed Acreage 9 Table 2: Scenario A Vacant Acreage 10 Table 3: Scenario B Developed Acreage 14 Table 4: Scenario B Vacant Acreage 15 Table 5: Average Value of New Construction in Palm Desert 19 Table 6: Components of the-8.75% Sales & Use Tax 20 Table 7: Low -Income Housing Mitigation Fees 24 Table 8: Child Care Facilities Impact Mitigation Fees 24 Table 9: Annual Road Maintenance Costs, 2002-2011 29 Table 10: Total Potential Costs/Revenues Summary Table — Scenario A 38 Table 11: Developer Impact Fees Revenues — Scenario A 39 Table 12: Total Potential Costs/Revenues Summary Table — Scenario B 40 Table 13: Developer Impact Fees Revenues — Scenario B 41 LIST OF APPENDICES Appendix A: Scenario A Detailed Cost and Revenue Tables Appendix B: Scenario B Detailed Cost and Revenue Tables 2 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation CITY OF PALM DESERT POTENTIAL ANNEXATION FISCAL IMPACT ANALYSIS I. INTRODUCTION, PROJECT DESCRIPTION AND DEMOGRAPHICS A. Introduction This Fiscal Impact Analysis is being prepared at the request of the Palm Desert City Council, which has received requests from property owners north of Interstate-10 (I-10) to consider annexation into the City limits. At the City's request, this report includes analysis of two scenarios (a detailed description is provided in section I.B., below): 1) Scenario A: the annexation of Sun City and land to the west that is within the City's sphere - of -influence, extending southerly across the Interstate 10 and railroads rights -of -way to the existing City limits, and 2) Scenario B: the annexation of Scenario A, and a larger expanse of land to the west extending beyond Cook Street to Jack Ivey Ranch, and southerly across the Interstate 10 and railroads rights -of -way to the existing City limits. The Riverside County Local Agency Formation Commission (LAFCO) is responsible for approving annexations proposed by cities in Riverside County. A comprehensive fiscal analysis is an integral part of this consideration, and Riverside County's "Guidelines to Preparing Fiscal Impact Reports" has been used as a basis for the analysis provided herein. This analysis addresses the costs and revenues that can be expected to be generated through build out of the potential annexation areas. The values, current revenues and costs associated with existing development have been calculated, and are assumed to occur immediately upon annexation. In addition, build out assumptions have been made for lands currently vacant in both scenarios. Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Both scenarios are analyzed in five year increments. Given that a significant portion of the parcels in scenario A are already developed, a ten-year build out period is assumed. Many of the parcels in scenario B are vacant, and therefore, a twenty-year build out period is assumed for that scenario. Land use and acreage data were obtained from Riverside County Assessor's parcel rolls (October 2011), aerial photography (June 2011), and the Palm Desert GIS Department. Revenue and cost factors were obtained from a variety of sources, including the City of Palm Desert 2011-12 budget, Palm Desert Comprehensive Annual Financial Report, Palm Desert staff, Riverside County Transportation Commission, and the State of California. Factors from the Riverside County "Guide to Preparing Fiscal Impact Reports," adjusted for inflation, have also been used. The analysis applies the appropriate revenue and cost factors to existing development and undeveloped land in the annexation areas using land use designations assigned by Palm Desert and Riverside County. The revenue and cost categories used to develop this fiscal analysis are described in Sections II and III of this document, respectively. Assumptions associated with each annexation scenario are described in Section IV. The cost/revenue analysis for each scenario is provided in Section V. Both costs and revenues throughout this analysis are calculated in current dollars. No inflation adjustment has been made. Although costs and revenues will rise over the build out period of the annexation areas, the ratio of costs to revenues is not expected to change significantly. As a result, the analysis in constant dollars is representative of the framework of costs and revenues likely to be experienced by the City throughout the build out of both scenarios, and beyond. B. Project Description The purpose of this fiscal analysis is to consider the potential financial impacts to the City of Palm Desert resulting from two potential annexation scenarios: 1) annexation of 2,181± acres encompassing Sun City, a resort residential community north of the City of Palm Desert, and adjacent parcels located north of the existing City limits to Avenue 38; and 2) annexation of 2,988± acres, including those described in Scenario A, and additional land to the west extending just beyond Cook Street. Under both scenarios, it is assumed that all lands from the existing City limits northerly, including the Interstate 10 and railroad rights -of -way, would be included in the annexation. All land considered in both scenarios is currently under the jurisdiction of Riverside County. Some land is currently in the City's sphere -of -influence. 4 Torre Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation 1. Scenario A Annexation Area Scenario A involves annexation of Del Webb's Sun City, an age -restricted resort -residential community north of Palm Desert, which encompasses ±1,600 acres and includes a population of approximately 9,000 residents. Sun City is generally bounded by the City of Indio on the east, I- 10 and Varner Road on the south, Washington Street on the west, and Frances Way on the north. The annexation boundary also includes land immediately south of Sun City, consisting of the Union Pacific Railroad and I-10 corridors, and ±39 acres adjacent to the southeast corner of Sun City. The boundary encompasses an additional 580± acres to the west, generally bounded by Avenue 38 on the north and the I-10 and railroad corridors on the south. Exhibit 1 illustrates the boundaries of Scenario A. Land in this area is currently under the jurisdiction of Riverside County and contained within the Palm Desert sphere -of -influence (SOI). Please also see Exhibit 2 for SOI boundaries. Two Specific Plans (SP) are located within the boundaries of Scenario A. Each is described below and shown in Exhibit 3. • SP-281, Del Webb Sun. City, is located in the eastern half of the annexation area. It contains approximately 1,600 acres and 4,985 residential units, golf course and other recreational amenities, community facilities, and retail commercial uses near the I- 10/Washington Street interchange. SP-281 is nearly 100% developed. • The Mirasera Specific Plan is generally bounded by Avenue 38 on the north, Varner Road on the south, and existing business park development on the east. It encompasses approximately 190 acres. Of these, 178.5 acres are located in the potential annexation area. Land use designations include high and very high density residential, business park, mixed use, hotel and commercial retail. Open space designations include a village green, parks and trails. The remaining 11.3 acres are located outside of the annexation area, immediately north of Avenue 38; these are undevelopable acres designated for drainage channel right-of-way. The parcels are currently vacant, with the exception of one manufactured unit owned by Mirasera. E Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation A land use map for both Scenarios A and B is provided in Exhibit 4 and serves as a basis for the following developed vs. vacant acreage calculations. The Scenario A annexation area encompasses a total of 2,181± acres. Of these, 1,485± are developed, and 696± are vacant/undeveloped. Table 1, below, describes developed acreage by land use category. Existing development includes 4,985 single-family homes, two golf courses, and three community clubhouses in Sun City. Commercial development is located along and in the immediate vicinity of Washington Street, and business park/light industrial structures are located west of Washington Street. Other development includes a fire station, two hotels, and an RV park. Table 1 Scenario A - Developed Acreage Existing Existing Existing Dwelling Square Hotel Existing Land Use Designation Acreage Units Footage Rooms Population SP-281 Single -Family Residential 792.0 4,985 SF -- -- 9,000 SP-281 Golf Course 435.3 -- -- -- -- SP-281 Commercial 29.0 -- 277,912 -- -- SP-281 Commercial (Hotel) 2.2 -- 50,0004 72 -- Riv. Co. Commercial Retail 21.1 -- 202,205 -- -- Riv. Co. Commercial (Hotel) 1.4 -- 40'0004 82 -- Riv. Co. Comm./Tourist (RV Park) 26.3 -- -- -- -- Riv. Co. Industrial - Light 56.6 -- 542,409 -- -- SP-281 Fire Station 3.5 -- -- -- -- 1-10 Corridor 79.2 -- -- -- "- Railroad Corridor 38.8 -- -- -- -- Total: 1,485.4 4,985 SF 1,112,526 154 9,000 Includes 4,869 detached units and 116 attached units. Source: Paul Brady, Sun City Palm Desert Community Association, October 2011. SF= single-family dwelling unit Z Assumes that commercial & industrial building square footage covers 22% of the lot, with the remainder of the lot available for access roads, parking, landscaping, and other ancillary uses. 3 Paul Brady, Sun City Palm Desert Community Association, Oct. 2011. 4 Estimate for 72-room and 82-room hotels. The Scenario A annexation area also includes 696± acres of vacant/undeveloped land. Table 2, below, describes how vacant acreage could develop in the future based on assigned land use designations. All land use designations within Sun City/SP-281 and Mirasera Specific Plan were assigned by Riverside County. Parcels within the Palm Desert sphere -of -influence are assumed to develop consistent with the land use designations assigned in the Palm Desert General Plan. Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 2 Scenario A - Vacant Potential Potential Potential Dwelling Square Hotel Potential Land Use Designation Acreage Units' Footage2 Rooms' Population Non -Developable SP-281 Community Association 271.0 -- -- -- __ Public Utility (11D, CVWD) 18.1 Public Agency (County, State) 5.3 -- -- -- __ Riv. Co. Open Space/Water 10.4 -- -- -- __ Mirasera Open Space/Parks/Roads 39.5 Non -Developable Subtotal: 344.3 Developable PD Medium Density Residential (4-10 du/ac) 113.3 963 SF -- -- 2,003 Riv. Co. Medium -High Density Resid.(5-8 du/ac) 30.8 209 SF -- -- 434 Mirasera High Density Residential (12 du/ac) 22.6 230 SF -- -- 478 Mirasera Mixed Use Residential (16 du/ac) 10.5 142 MF -- -- 295 Mirasera Very High Density Resid. (20-25 du/ac) 66.4 1,411MF -- -- 2,934 SP-281 Commercial 3.0 -- 28,750 -- -- PD Community Commercial 10.7 -- 102,540 -- -- PD Industrial — Business Park 28.0 -- 268,330 -- -- PD Industrial — Light 26.6 -- 254,913 -- -- Mirasera Commercial Retail 17.6 -- 168,664 -- -- Mirasera Mixed Use Hotel 3.1 -- 100,000 150 -- Mirasera Office/Business Park 18.8 -- 180,164 -- -- Developable Subtotal: 351.4 Total: 695.7 2,955 1,103,361 150 6,144 Assumes future residential development occurs at 85% of the maximum density permitted. SF = single-family dwelling unit. MF = multi -family dwelling unit. 2 Assumes future commercial & industrial building square footage will cover 22% of the lot, with the remainder of the lot available for access roads, parking, landscaping, and other ancillary uses. Hotel square footage estimate based on available acreage. 1 Hotel room estimate based on single hotel and available acreage. 4 Based on Palm Desert average of 2.08 persons/household (2010 U.S. Census). As described in the tables above, the Scenario A annexation area currently contains 4,985 dwelling units and a population of approximately 9,000. If buildout occurs according to the land use designations currently assigned, the annexation area could contain a total of 7,940 dwelling units and 15,144 residents at buildout. Commercial, business park, and industrial square footage could nearly double, from 1,112,526 square feet to 2,215,887 square feet. Similarly, the number of hotel rooms could increase by 50%, from 154 to 304 rooms. 10 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Scenario B Annexation Area Under Scenario B, the annexation area is expanded to include all of Scenario A (described above) and additional lands to the west, for a total of 2,988-+ acres. This annexation area is generally bounded by Palm Desert's existing City limits on the south, the Coachella Valley Preserve on the north, the City of Indio on the east, and the western boundary of the Center Pointe Specific Plan on the west. The boundaries of Scenario B are shown in Exhibit 5. Existing development in Scenario B includes 4,985 single-family residences, two golf courses, and three community clubhouses within Sun City. Other development includes a fire station, two hotels, an RV park, commercial structures along and in the vicinity of Washington Street, and business park/light industrial structures west of Washington Street. Further west are 9± acres of agriculture, a gravel/construction facility, a private school (Xavier High School), two general commercial lots, and the Classic Club golf course, clubhouse and maintenance building. Residential development is limited to one single-family home along Cook Street (Shadow Valley Road). A manufactured unit also occurs on land owned by Mirasera, which is designated for future residential development. Land in Scenario B is currently under the jurisdiction of Riverside County. That portion described in Scenario A, south and east of Frank Sinatra Drive (extended), is located within the Palm Desert SOI. That portion further west, north and west of Frank Sinatra Drive (extended) is located within the Cathedral City SOI. Please refer to Exhibit 2 for SOI boundaries as they pertain to the annexation area. In addition to SP-281 and the Mirasera Specific Plan described in Scenario A, two other Specific Plans approved by Riverside County are located in Scenario B. Exhibit 3 illustrates the boundaries of each Specific Plan, and each is described below. SP-225, Center Pointe, is located at the western edge of the annexation area. It encompasses 215 acres and was approved for golf course, residential, business park, and commercial development. Nearly half (96 acres) is now developed with a private high school. This analysis assumes the remainder of the Specific Plan will develop as originally approved. • SP-151, North Star Commerce Center and Golf Club, is located along the I-10 corridor in the western portion of the annexation area. It consists of 460 acres and was approved for golf course, business park, and highway commercial development, including hotels and motels. The golf course and clubhouse (The Classic Club) have been built, another parcel contains a gravel/construction site, and the remaining acreage is undeveloped. 12 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation The Scenario B annexation area encompasses a total of 2,988f acres. Of these, 1,987t are developed, and :0,001 are vacant/undeveloped. Please refer to Exhibit 4 for a land use map, which serves as a basis for the following developed vs. vacant acreage calculations. Table 3 Scenario B - Developed Acreage Existing Existing Existing Dwelling Square Hotel Existing Land Use Designation Acreage Units, Footage2 Rooms Population Inside Scenario A: SP-281 Single -Family Residential 792.0 4,985 SF -- -- 9,000 SP-281 Golf Course 435.3 -- -- -- -- SP-281 Commercial 29.0 -- 277,912 -- -- SP-281 Commercial (Hotel) 2.2 -- 50,0004 72 -- Riv. Co. Commercial Retail 21.1 -- 202,205 -- -- Riv. Co. Commercial (Hotel) 1.4 -- 40,000' 82 -- Riv. Co. Comm./Tourist (RV Park) 26.3 -- -- -- -- Riv. Co. Industrial - Light 56.6 -- 542,409 -- -- SP-281 Fire Station 3.5 -- -- -- -- I-10 Corridor 79.2 -- -- -- -- Railroad Corridor 38.8 -- -- -- -- Outside Scenario A: Single -Family Residential 1.3 1 SF -- -- 2 SP-151 Golf Course/Facilities 271.2 -- -- -- -- SP-151 Gravel/Construction Facility 32.2 -- -- -- -- SP-225 Private School 96.0 -- -- -- -- SP-225 RV Storage 5.2 -- -- -- -- Agriculture 9.3 -- -- -- -- I-10 Corridor 52.8 -- -- -- -- Railroad Corridor 34.1 -- -- -- -- Total: 1,987.5 4,986 1,112,526 154 9,002- Includes 4,869 detached and 116 attached units in Sun City, and one detached unit outside Sun City. SF = single-family dwelling unit. 2 Assumes commercial and industrial buildings cover 22% of the lot, with the remaining area available for access roads, parking, landscaping, and other ancillary uses. Includes an estimated 9,000 residents in Sun City (provided by Paul Brady, Sun City Community Assoc., Oct. 2011), and one additional dwelling unit at 2.08 persons/household (2010 U.S. Census). 4 Estimate for 72-room and 82-room hotels. Scenario B also includes approximately 1,001 acres that are vacant/undeveloped. Table 4 describes how vacant acreage could develop in the future based on assigned land use designations. Where Specific Plans have been approved by Riverside County, those land use designations are applied, as it is assumed that upon annexation, the City would honor the provisions of the approved Specific Plans. Parcels outside the Specific Plans have been assigned land use designations in the City's General Plan. 14 Torre Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 4 Scenario B - Vacant Acreage Potential Potential Potential Dwelling Square Hotel Potential Land Use Designation Acreage Units' Footage2 Rooms3 Population Non -Developable Inside Scenario A: SP-291 Community Association 271.0 -- -- -- -- Public Utility (11D, CVWD) 18.1 -- -- -- -- Public Agency (County, State) 5.3 -- -- -- -- Riv. Co. Open Space/Water 10.4 -- -- -- -- Mirasera Open Space/Parks/Roads 39.5 -- -- -- -- Outside Scenario A: SP-225 Regional Circulation 6.4 -- -- -- -- Non-Developable Subtotal: 350.7 Developable Inside Scenario A: PD Medium Density Residential (4-10 du/ac) 113.3 963 SF -- -- 2,003 Riv. Co. Medium -High Density Resid.(5-8 30.8 209 SF -- -- 434 du/ac) Mirasera High Density Residential (12 du/ac) 22.6 230 SF -- -- 478 Mirasera Mixed Use Residential (16 du/ac) 10.5 142 MF -- -- 295 Mirasera Very High Density Resid. (20-25 66.4 1,411MF -- -- 2,934 du/ac) SP-281 Commercial 3.0 -- 28,750 -- -- PD Community Commercial 10.7 -- 102,540 -- -- PD Industrial - Business Park 28.0 -- 268,330 -- -- PD Industrial - Light 26.6 -- 254,913 -- -- Mirasera Commercial Retail 17.6 -- 168,664 -- -- Mirasera Mixed Use Hotel 3.1 -- 100,000 150 -- Mirasera Office/Business Park 18.8 -- 180,164 -- -- Outside Scenario A: PD Low Density Residential (0-4 du/ac) 72.0 244 SF -- -- 507 SP-151 Service Commercial 30.8 -- 295,162 -- -- SP-151 Service Commercial (Hotel) 3.0 -- 200,000 250 -- SP-151 Business Park 103.0 -- 987,070 - -- SP-225 Medium -Density Residential (8 du/ac) 9.0 61 SF -- -- 126 SP-225 Golf Course 13.6 -- -- -- -- SP-225 Commercial 26.1 -- 250,121 -- -- SP-225 Business Park 41.0 -- 392,911 -- -- Developable Subtotal: 649.9 Total: 1000.6 3,260 3,228,625 400 6,777 Assumes future residential development will occur at 85% of the maximum density permitted. SF = single-family dwelling unit. MF = multi -family dwelling unit. 2 Assumes future building square footage will cover 22% of the lot, with the remainder of the lot available for access roads, Varking, landscaping, and other ancillary uses. Hotel square footage based on 2 hotels and available acreage. Estimates based on available acreage for highway -serving hotel land uses. 4 Based on Palm Desert average of 2.08 persons/household (2010 U.S. Census). 15 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation As shown in the tables above, the Scenario B annexation area currently includes 4,986 dwelling units and a population of approximately 9,002. If future buildout occurs according to currently assigned land use designations, the annexation area could contain an estimated 8,246 dwelling units and 15,779 residents. Commercial, business park, and industrial square footage could increase by 190% from 1,112,526 square feet to 3,228,625 square feet. The number of hotel rooms could increase by 260%, from 154 to 554 rooms. C. City of Palm Desert Demographic Profile The population of the City of Palm Desert increased from 23,252 in 1990 to 41,155 by 2000, according to U.S. Census data. This represents an increase of approximately 76.9%. Census data for 2010 report a population of 48,445, representing an increase of 17.7% over the last decade. Palm Desert's 2011 population, as estimated by the California Department of Finance, is 49,111 residents. The City is also home to a significant seasonal population that is not factored into permanent population data. The City's General Plan indicates that the City's 1999 seasonal population was estimated at between 21,000 and 28,225 residents, and the City currently estimates its seasonal population to be 32,000.1 The median age in Palm Desert in 1990 was 42.3 years, which increased to 48.0 years in 2000. By 2010, the median age had increased to 53.0 years. The number of housing units in the City was 18,248 in 1990 and 28,021 in 2000. This figure reached 37,073 by 2010. The 2010 Census reports that 28.1 % of housing units in the City are for seasonal, recreational, or occasional use, further illustrating the importance of the seasonal population to the local economy. In 1990 there were an average of 2.18 persons per household in Palm Desert; by 2000, the average was 2.13. The 2010 Census indicates there is now an average of 2.08 persons per household in Palm Desert. The median household income in Palm Desert in 1990 was $37,315. This had risen by approximately 29.4% in 2000, to $48,316. The 2010 Census has not, as of this writing, released household income data; however, the City estimates its current median household income to be $59,728.2 The 1990, the U.S. Census reported that the median housing unit value in Palm Desert was $172,600. By 2000, this figure increased by 9.5%, to $189,100. In the second quarter of 2011, the median new home price in Palm Desert was $249,123, and the median value of an existing home was $278,996.3 City's website, Demographic Information, accessed October 25, 2011. lbld: 3 "Inland Empire Quarterly Economic Report," prepared for WRCOG by John Husing, PhD., October 2011. 16 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation CITY OF PALM DESERT POTENTIAL ANNEXATION FISCAL IMPACT ANALYSIS II. POTENTIAL REVENUES FROM ANNEXATION Annexation of either Scenario A or Scenario B has the potential to generate revenues to the City of Palm Desert. These revenues include taxes and fees based on real estate values, consumer spending, and per capita allocations from other agencies, among others. This analysis focuses on recurring revenues that the City would expect to receive on an annual basis. One-time fees from Developer Impact Fees are also included. Revenues will include monies that will be available through the General Fund, and can be spent for any activities or services allowed under the General Fund, and revenues that are restricted for spending on specific, predetermined services. All revenue sources are identified as being either restricted fund or General Fund revenues. A. General Fund The General Fund is the general operating fund of the City that accounts for all financial resources typically associated with government, except those which must be accounted for in restricted funds. General Fund revenues include property tax, property transfer tax, sales tax, transient occupancy tax and motor vehicle in -lieu fees. These revenue sources, as they relate to development in the proposed annexation area, have been estimated in this fiscal impact analysis. Property Tax The County of Riverside collects property tax annually at a rate of 1% of assessed valuation. Property tax revenues are allocated between the County, the jurisdiction in which the land is located (if other than the County), and a variety of other public agencies. The City of Palm Desert is a No -Low Property Tax City and receives 0% of the County's 1 % collection for land within its original boundaries. However, under current State law, the City receives 7% of the 17 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation County's 1% collection on lands annexed after 1978. Property tax revenues go to the City's General Fund. Should annexation of Scenario A or B occur, the City would receive 7% of the l % property taxes collected for the area. It is important to note that property tax revenues will be reduced due to the City's mandated contributions to Education Revenue Augmentation Funds (ERAF). In fiscal year 1992, the State of California required cities and towns to shift a percentage of their property tax revenues to a countywide ERAF account to fund public schools. Based on prior annexations into the City of Palm Desert, the City receives approximately half (3.5%) of the 7% of property tax revenue collected by the County, and the remaining 3.5% is contributed to ERAF.4 In this analysis, properties flagged as "exempt" in Riverside County Assessor's parcel records are not included in property tax revenue calculations. In the annexation areas, these properties are largely owned by CVWD, California Department of Transportation (CalTrans), the County of Riverside, and Sun City Palm Desert Community Association. Additional properties owned by non-profit organizations receive tax exemptions and/or reductions. These include 90.4 acres owned by Xavier High School and 245.3 acres (Classic Club golf course, maintenance building, and clubhouse) owned by the Berger Foundations Property tax revenue calculations have been adjusted to account for these cases. The fiscal analysis assumes that all taxable properties within the annexation areas are taxed at a rate of 1% of valuation, and the collection rate is 100%. Future development in the potential annexation area will include residential, commercial and quasi -industrial development. In order to determine property value, and associated property tax generation for this development, a number of sources were utilized. The following table describes the average values of new residential, commercial and industrial development in Palm Desert. 4 Paul Gibson, Director of Finance/City Treasurer, City of Palm Desert, personal communication, October 27, 2011. 5 Based on property tax information provided by Mike Rover, Rover Armstrong, Berger Foundation representative, personal communication, November 29, 2011. 18 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 5 Average Value of New Construction in Palm Desert Type of Development Average Value Single-family Residential $249,123/unit Multi -family Residential $104,425/unit Commercial Lodging $110/sq. ft.2 or $68,512/room3 Commercial General/Retail $73/sq. ft. Office/Professional $169/sq. ft. Industrial $54/sq. ft. Golf Course $40,431 /acre¢ Source: 2"d quarter 2011 median new home value, "Inland Empire Quarterly Economic Report;' prepared for WRCOG by John Husing, Ph.D., October 2011. Includes value of land and structure. 2 Based on building permit data provided by the Palm Desert Building & Safety Department, Nov. 2011. Includes value of structure only. J Based on comparable existing highway -serving hotel in the annexation area, per Riv. Co. Assessor's records, Oct. 2011. 4 Based on average of multiple developed golf course parcels in annexation area, per Riv. Co. Assessor's records, Oct. 2011. All other values are based on building permit data provided by the Palm Desert Building and Safety Department, November 2011. Includes value of stricture only. Property Transfer Tax Property Transfer Tax revenues are generated when a change of property ownership occurs. For analysis purposes, estimated Property Transfer Tax revenues are calculated according to the instructions provided in the Riverside County "Guide to Preparing Fiscal Impact Reports." Factors set forth in the Guide include a tax rate of $1.10 per $1,000 (or 0.11 %) of the unencumbered property value. The County retains 50% of the tax, and 50% is transmitted to the City in which the sale occurred.6 Upon the sale of a new unit, 100% of the unit's market value is subject to the property transfer tax. Upon change of ownership of an existing unit, the unencumbered value (assume average is 80%) of the property is subject to the property transfer tax. Change in ownership is assumed to begin in the fourth year of the project, and 10% of existing residential properties are assumed to change ownership per year. Property values are stated in year 2011 dollars. The average value of existing residential units in Sun City is $364,653.7 For existing units outside Sun City, and future residential units, an average value of $249,123 is used (see table above for source). A resale rate of 1% is assumed for single-family development. As discussed in Section III, this analysis assumes no re -sales during the build out timeframe for commercial and industrial development, as such sales are infrequent and sporadic. Assessor's Office, County of Riverside, personal communication, November 9, 2011. Riverside County Assessor's parcel data, October 2011. 19 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Sales Tax Sales tax in Riverside County is collected at a rate of 8.75% by the State of California. The table below describes how sales tax revenues are allocated among public agencies. Table 6 Components of the 8.75% Sales and Use Tax Rate Jurisdiction 7.25% State of California 1.00% Local (City/County) 0.50% Riverside County Transportation Commission Source: "Detailed Description of the Sales and Use Tax Rate," California State Board of Equalization; and Palm Desert Budget 2010/11, p. 2-2. Of the sales tax collected by the State, one percent (1.0%) is allocated to the jurisdiction in which the sale occurred. The fiscal analysis estimates total taxable sales that could be generated from commercial development at build out of each proposed annexation scenario, then calculates 1 % of taxable sales to determine how much sales tax revenue would be generated to the City. The fiscal model addresses taxable sales generated by existing and potential future development for each annexation scenario. Where taxable sales for existing development are known, actual figures are used. This includes annual taxable sales of $2.46 million generated by restaurants and golf pro shops within the boundaries of Sun City,8 Where taxable sales are unknown, the analysis uses assumptions to estimate taxable sales. The analysis assumes that future retail commercial development will result in 22% lot coverage, and 90% of the net floor space will be dedicated to the sale of taxable goods. Average annual sales estimators from the Urban Land Institute's (ULI) 2008 "Dollars and Cents of Shopping Centers" are applied to the number of square feet dedicated to taxable sales. All existing and future commercial development in the annexation areas is considered Neighborhood Commercial in this analysis. The fiscal analysis calculates sales tax generation for Neighborhood Commercial development, based on the following ULI definition: "Neighborhood Commercial" development includes neighborhood scale shopping centers conveniently located near residential areas, and a variety of smaller commercial centers, specialty retail shops and personal service businesses. These centers sell merchandise for daily living, such as food, drugs, and hardware. This type of development generates an annual -average of $326.13 per square foot in taxable sales. In both scenarios, some lands are designated for "business park" development. It is expected that these lands will develop with. a mix of light industrial and office uses. Although small amounts of sales tax revenue are likely to be generated by this development, the amount is expected to be negligible. As a result, business park and industrial development is assumed to generate no taxable sales in this analysis. 8 Paul Brady, Sun City Palm Desert Community Association, personal communication, October/November 2011. 20 Terre Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Transient OccupancvTax Transient Occupancy Tax (TOT) is collected from individuals when they occupy a hotel or motel room. In Palm Desert, TOT is collected at a rate of 9%. Potential TOT revenues are based on the number of hotel/motel rooms that are or could be constructed on annexation lands, the average nightly room rate charged, and the average occupancy rate. There are currently two hotels with a combined total of 154 hotel rooms in the annexation areas. The room rates at these properties are lower than the current average room rate in the City. Therefore, room rates have been calculated at $95.00 per night. In addition, annualized occupancy has been assumed to be 65%. Approximately 3 acres are designated for fiuture hotel/motel development in SP-151, and this analysis assumes that two 125-room hotels will be constructed on these parcels in the future, for a total of 250 hotel rooms. An additional 3.1 acres are designated for hotel/motel development in the Mirasera Specific Plan, and this analysis assumes a single hotel/motel will contain 150 rooms. Therefore, future buildout of the annexation areas could result in the development of 400 new hotel rooms. Room rates for future development, particularly future development located near the Classic Club golf course, are expected to be consistent with current City average room rates of $145.00/night. This was determined using total hotel room sales for 2009/10 ($76 million), total number of hotel/motel rooms in Palm Desert (2,216), and an estimated occupancy rate of 65%. This rate is an average that reflects both the world -class hotels that characterize Palm Desert's resort and tourism industry, and more modest hotels/motels located throughout the city. The annexation areas contain 26.3 acres of developed RV Park parcels. In the City of Palm Desert, RV parks generate TOT revenue only during the high -tourism season from January through April, and only from visitors leasing for fewer than 30 days.9 Given the specific and limited nature of these parameters, this fiscal model does not estimate TOT revenue from RV parks. Motor Vehicle In -Lieu Fees Motor Vehicle In -Lieu Fees, or Motor Vehicle License Fees, are taxes on ownership of a registered vehicle. They are collected by the State of California and allocated to local jurisdictions on a monthly basis. These fees are levied on motorists in -lieu of a local property tax. During FY10/11, the City of Palm Desert received $167,177 in motor vehicle in -lieu fees.10 The State uses a City population figure of 52,067, which translates to $3.21 per capita annually. 9 Paul Gibson, Director of Finance/City Treasurer, City of Palm Desert, personal communication, December 2011. 10 Compilation of Motor Vehicle In -Lieu data from State Controller's Office, July 2010-June 2011. 21 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Other Revenue Sources Not Addressed The General Fund includes other revenue sources that will not be affected directly by annexation or will be one-time fees, and therefore, are not addressed in this analysis. These include timeshare mitigation fees, business license taxes, building and grading permit fees, plan check fees, and franchise fees. Timeshare development is not anticipated in the annexation area, so revenues from timeshare mitigation fees are not applicable to this project. Business license taxes will increase with annexation; however, these revenues are highly variable and development - specific, and estimates are not considered useful to this analysis. Building/grading permit fees and plan check fees are also based on specific development plans, which are determined at the time a project is proposed. B. Special Revenue Funds Special Revenue Funds are used to account for revenues/expenditures that are legally restricted for specific purposes. Each Special Revenue Fund that will be impacted by annexation is described below. 1. Annual Revenues The following Special Revenue Funds receive recurring revenues on an annual basis. Highway User Gas Tax Fund The State of California imposes a per gallon tax on all gasoline purchases. A portion of these revenues are allocated to counties and cities throughout the state. During FY10/11, the City of Palm Desert received $1,216,771 in Gas Tax revenue, or $23.37 per capita annually.' 1 Measure A Funds 12 Of the 8.75% sales tax collected in Riverside County, 0.50% is contributed to the Measure A Fund for regional and local transportation projects. Measure A funds are distributed by region; approximately 24% is distributed to the Coachella Valley region. Coachella Valley funds are further allocated for specific purposes: 50% for State highways and regional road improvements, 35% for local streets and roads, and 15% for transit (Sunline Transit Agency). Of the 35% for local streets and roads, about 20% goes to the City of Palm Desert. This percentage is based on a formula that accounts for Palm Desert's total number of dwelling units and total taxable sales. The trickle -down effect is illustrated below. 11 Compilation of Highway Users Tax data from State Controller's Office, July 2010-June 2011. 12 Andrea Zureick, Riverside County Transportation Commission, personal communication, November 1, 2011. 22 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation 8.75% sales tax 1 0.50% of sales tax goes to county -wide Measure A Fund 1 24% of county -wide Measure A Fund goes to Coachella Valley region 1 35% of Coachella Valley portion goes to local streets and roads 1 20% of Coachella Valley streets and roads fund goes to the City of Palm Desert Fire Fund The City's Fire Fund receives revenue from two sources: 1) Proposition A Fire Tax, and 2) Structural Fire Tax. Each is described below. In 1982, the residents of Palm Desert approved the Proposition A Fire Tax for upgrading the City's fire protection and prevention capabilities. Revenues are restricted for the purposes of obtaining, furnishing, operating and maintaining fire protection/prevention services, equipment and apparatus. Annual residential tax rates range from $30 per vacant residential lot, to $45 for rental apartments with 4+ units, to $60 per single-family dwelling unit. Non-residential rates are $60 for buildings equal to or less than 2,600 sq. ft. For larger non-commercial buildings, rates are building -specific and based on a formula that calculates fire flow requirements by square footage and takes into account the use of fire -resistive construction materials.13 This analysis estimates future Proposition A Fire Tax revenues for residential units, vacant parcels, and smaller non-commercial buildings. However, it does not attempt to project tax revenues for larger non-commercial buildings, given that the parameters required to project these revenues are building -specific and unknown at this time. The second revenue component of the Fire Fund is the Structural Fire Tax. For land not in a redevelopment area (this includes the proposed annexation areas), tax revenues are 5.87% of the 1 % property tax collected by Riverside County.14 They are remitted to the City's Fire Fund and restricted for the purpose of providing fire protection and prevention services. 2. One -Time Revenues The following Special Revenue Funds receive one-time revenues as a direct result of new development. These are typically paid to the City at the time building permits are issued. New development in the potential annexation areas would be required to contribute to these funds. Existing development would not pay these fees. Because they are one-time rather than recurring 13 Rates provided by Mark Dana, Willdan Financial, November 3, 2011. 14 ..Comprehensive Annual Financial Report," City of Palm Desert Finance Department, June 30, 2010, page 186. 23 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation annual, fees, they are not included in Cost/Revenue Summary Tables for the annexation scenarios. Instead, they are summarized separately in Table 10 for Scenario A, and Table 12 for Scenario B. New Construction Tax Fund Revenues to this fund are from taxes collected upon application for a building permit for the construction of any new building, addition or trailer space in the city. Funds are restricted for the acquisition and development of public facilities, such as parks, playgrounds and public structures. Fees are $0.40 per square foot. Art in Public Places Fund This fund is reserved for maintaining public artwork throughout the City. For residential development, the fee is 0.25 of 1% valuation of the structure; individual single-family dwellings not in a development are exempt for the first $100,000. For non-residential development, the fee is 0.50 of 1 % valuation of the structure. Low Income Housing Mitigation Fee Fund Revenues from this fund pay for projects and programs that benefit low and moderate income households. All commercial development must pay this fee at the issuance of building permits, according to the fee schedule below. Table 7 Low Income Housing Mitigation Fees Development Type Fee General Mixed Commercial $1.00/sq. ft. Professional Office $0.50/sq. ft. Industrial $0.33/sq. ft. Resort Hotel $1,000/room Non -Resort Hotel $620/room Source: Palm Desert Building & Safety Department. Child Care Program Fund This fund is used for the purpose of providing child care programs. Fees are collected for all new non-residential square footage according to the fee schedule below. Table 8 Child Care Facilities Impact Mitigation Fees Development Type Fee Light Industrial $0.47/sq. ft. HotelNisitor Uses $0.77/sq. ft. Retail/Service Commercial $0.90/sq. ft. Office Uses $1.15/sq.ft. Source: Palm Desert Building Department. 24 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Traffic Signals Fund Revenues to this fund are collected for residential, commercial and industrial developments either at the time grading pen -nits are paid or prior to the approval of the final map. Fees for residential development are $50 per unit. Fees for commercial development are $500 per 1,000 sq. ft. of building area, and fees for industrial development are $500 per acre.15 Planned Drainage Fund Drainage impact fees are collected to fund off -site drainage improvements.16 Fees are dependent upon the location of development, as described below: • South of Whitewater River = $4,000/acre • Between Whitewater and Sand Ridge = $1,500/acre • Between Sand Ridge and I-10 = $1,000/acre No fee has been established for land in the potential annexation areas (north of I-10). Since the annexation areas are most closely located to I-10, this analysis uses the $1,000/acre fee shown above. Park and Recreation Facilities Fund This fund is restricted for expenditures related to park development, maintenance and equipment. Fees are collected for residential subdivisions only, according to the following formula.17 Fee = (# of D.U.'s) 2.149)(5) X Current Land Value Per Acre 1,000 Other Funds Other Special Revenue Funds identified in the City Budget are impacted by new development, but do not apply to the annexation area. Landscape/Lighting District Funds only apply to specific neighborhoods or regions of the City for the purpose of providing landscape and lighting maintenance. These districts are established upon voter approval, and residents in the potential annexation area will contribute to such a fund only upon voter approval.18 Such funds are revenue -neutral and will not generate "extra" revenue for the City. New development in the potential annexation area will also generate revenues that are collected by the City, but transferred to other agencies. These include, but are not limited to, TUMF mitigation fees transmitted to CVAG, school impact mitigation fees remitted to the appropriate school district, and Strong Motion Instrumentation Program (SMIP) fees transmitted to the State. 15 Palm Desert Department of Public Works. 16 Ibid. 17 Ibid. 18 Lauri Aylaian, Community Development Director, City of Palm Desert, personal communication, October 26, 2011. 25 Terra Nova/City of Palm Desert Fiscal hnpact Analysis, Potential Annexation C. Investment Income The fiscal analysis assumes that the City will receive investment earnings on all annual revenues. To project potential investment earnings, the fiscal model applies the historical average interest rate of the 90-Day Treasury Bill. During the 25-year period from 1985 through 2010, the average interest earned on the 90-Day Treasury Bill was 4.39%.19 The fiscal model calculates investment income for all annual revenues calculated in this report. 19 Average historical interest rate determined using data from Table B.3, "Riverside County Guide to Preparing Fiscal Impacts Reports," January 1995; and "3-Month Treasury Constant Maturity Rates," from the Federal Reserve Board of Governors, as provided by The Financial Forecast Center. 26 Torra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation CITY OF PALM DESERT POTENTIAL ANNEXATION FISCAL IMPACT ANALYSIS III. POTENTIAL COSTS FROM ANNEXATION A. Potential Costs to the General Fund Annexation of developed and undeveloped acreage north of 1-10 will not only generate additional revenues, but will also generate additional municipal costs. There will be expenditures for general government services, as well as the expansion and/or extension of infrastructure, utilities, roads and other public services, particularly public safety. The fiscal model projects the City's costs of providing general government services, public safety, and transportation/roadway maintenance to lands in the annexation area. Costs of General Government Costs of General Government are funded through the City's General Fund. Costs associated with general government include city-wide services, such as employee salaries and benefits, postage, printing, travel, equipment maintenance and repairs, contract services, computers, vehicles and other items necessary for the day-to-day functioning of government. They also include public and community services, such as code compliance and animal control, as well as municipal and support services. The City's 2011/12 Budget allocates $13,853,664 for the above -referenced general government services. This does not include expenditures for police protection and roadway maintenance, which are discussed and calculated separately below, and does not include other general government services that are provided by the City but will not be directly impacted by annexation. For residential development, this fiscal analysis translates the costs of general government to a per capita figure. Given the City's 2011 population of 49,111, the annual cost of providing 27 Terra Nava/City of Palm Desert Fiscal Impact Analysis, Potential Annexation general government services to City residents is approximately $282 per capita. This factor is applied to the projected build out population of the annexation areas. The result is the estimated cost of providing general government services to residents living in the annexation areas. In order to capture costs for provision of General Government to commercial and industrial development, it was necessary to derive factors based on a per acre or per square foot basis. No such factors were available through the City. Therefore, this analysis uses factors provided in the Riverside County Guide, adjusted for inflation, to arrive at costs based on year 2011 dollars. Costs of Police Protection The same method used to calculate general government costs has been used to project costs of providing law enforcement services to existing and future residents in the annexation areas. The City contracts with the Riverside County Sheriff's Department for a wide range of police services, including patrol, traffic management, investigations, school resource programs, crime prevention, bike patrol and communications. The 2011/12 City Budget allocates $16,647,638 for police protection services. With a 2011 population of 49,111 residents, this equates to approximately $339 per resident annually. The fiscal model applies this per capita factor to the projected build out population of the annexation areas. Like General Government costs, to estimate the costs of providing police protection to commercial and industrial development, this analysis uses factors provided in the Riverside County Guide, adjusted for inflation. Costs of Roadway Maintenance Costs associated with repairing and maintaining future paved public roads in the annexation area are calculated using a per road mile cost factor. Costs associated with roadway maintenance include repairs and Americans with Disabilities Act retrofitting of sidewalks, resurfacing and restriping of roadways, and similar activities. These costs also include road improvement projects and the widening of roadways, which have averaged $6.1 million annually over the last ten years, as shown in the Table below 20. These costs are paid through the General Fund, and include funds from a reserve fund maintained by the Public Works Department for such projects. 20 City of Palm Desert Budget calculations Or roadway construction and maintenance calculations, January, 2012. 28 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 9 Annual Road Maintenance Costs, 2002-2011 Year Costs 2002 $1,610,521 2003 $9,026,890 2004 $3,587,830 2005 $10,216,200 2006 $4,220,000 2007 $6,236,627 2008 $10,437,052 2009 $7,558,700 2010 $5,257,500 2001 $2,764,936 10 Year Average $6,091,626 With 159 paved public road miles in Palm Desert, this translates to $38,312 per road mile. Scenario A: Should annexation of Scenario A occur, maintenance of private roads within the gates of Sun City will continue to be the responsibility of the homeowners association. Outside of Sun City, there are three areas that currently include, or can be developed to include, paved roads: 1) existing paved roads, 2) future paved roads in the Mirasera Specific Plan, and 3) future paved roads elsewhere in the annexation area. Existing road miles are estimated at 10.5 miles and include Washington Street, Varner Road, 38`h Avenue, 401h Avenue, and local roads that provide access to commercial and light industrial development near the I-10/Washington Street interchange. Buildout of the Mirasera Specific Plan will result in the construction of approximately 3.0 paved road miles. in addition, there are another 141.28 vacant acres available for development in Scenario A. To estimate the number of future road miles that could be constructed on these acres, the fiscal model uses a known road mile per square mile factor. There are currently 159 paved public road miles in the City of Palm Desert, and the existing City limits cover 25.5 square miles. 21 This equates to an average of 6.2 road miles per square mile of land area. Therefore, at buildout, these 141.28 vacant acres (0.22 square miles) are projected to include approximately 1.5 paved road miles. At buildout, all of Scenario A could include an estimated total of 15.0 paved road miles. These estimates do not include commercial driveways, interior parking lots or other paved facilities that would be located on private property and be privately maintained. To project future roadway maintenance costs in Scenario A, the fiscal model applies the City's costs of $38,312/road mile to these 15.0 road miles. 21 "Comprehensive Annual Financial Report," City of Palm Desert Finance Department, June 30, 2010, page 201. 29 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Scenario B: The same methodology described above is used to project road maintenance costs for Scenario B. At buildout, Scenario B is projected to include: 1) 15.0 miles of paved roadways located within Scenario A boundaries (described above); 2) ±3.5 miles of. paved roadways currently existing outside Scenario A (largely limited to western Varner Road and Cook Street), and; 3) future roads constructed outside Scenario A during buildout, which are estimated below. There are approximately 301 vacant acres (0.47 square miles) outside Scenario A that could be built out to include paved roadways. Applying the ratio of 6.2 road miles per square mile of land area, this equates to 2.9 paved road miles. When added together with the miles described above, Scenario B is projected to include approximately 21.4 paved road miles at buildout. The fiscal model applies the City's costs of $38,312/road mile to these 21.4 road miles to estimate future maintenance costs. B. Potential Costs to the Fire Fund Annexation will also generate additional expenditures for fire and ambulance services. The City contracts with the Riverside County Fire Department for these services, which are accounted for in the Fire Fund (rather than the General Fund). The 2011/12 City Budget allocates $9,207,045 for Fire Fund expenditures. Costs of Fire Protection Services — Scenario A Parcels in Scenario A are currently served by Fire Station 81 on Washington Street, just north of Avenue 38. Upon annexation, the City would assume operation of this facility and its fire engine. The annual operating costs for this fire station are approximately $1.5 million.22 The station is adequately equipped, and no new or upgraded equipment, facilities or personnel would be required upon annexation. These operating costs will be assumed by the City under both Scenarios A and B. Costs of Fire Protection Services — Scenario B The eastern portion of Scenario B is served by Fire Station 81, as described above. Upon annexation, the City would assume annual costs of approximately $1.5 million for the operation of this fire station. The western portion of the annexation area in the vicinity of the Classic Club is currently served by a combination of three fire stations: 1) Station 71 in north Palm Desert, 2) Station 35 in Thousand Palms, and 3) Station 81 at Sun City (described above). A new fire station is planned in the north Palm Desert/College Park area, which is expected to directly serve this portion of the annexation area and other areas in northern Palm Desert.23 However, no construction date has been set; construction is expected to occur several years in the future. 22 Dorian Cooley, Division Chief, CALFIRE/Riverside County Fire, communication, November 14, 2011. 23 Ibid. 30 Terra Nava/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Because the actual costs of providing fire protection services to the western portion of the annexation area are unknown at this time, the fiscal model estimates future costs on a per capita basis. The City's 2011-12 Budget allocates $9,946,973 for Fire Fund expenditures. With a current City population of 49,111 residents, this equates to $203 per resident annually. The model applies this per capita figure to the potential buildout population of all land outside the Scenario A boundaries. Costs of Ambulance Services Because the annexation area includes a stretch of I-10 extending from Cook Street to Washington Street, costs associated with providing ambulance services to emergency incidents on I-10 must be considered. Between 2006 and 2010, the Fire Department responded to 372 traffic collisions along I-10 between Monterey Avenue and Washington Street .24 This equates to an average of 74 incidents per year. Fire Department data gathered for the I-10 corridor in neighboring Indio show that, over a 3-year period, an average of 54% of traffic accidents resulted in patient transport via ambulance .25 The Fire Department considers this a reasonable assumption for that portion of I-10 that would be annexed into Palm Desert. This means that, each year, ambulance personnel could expect to respond to an average of 40 emergency incidents on I-10 in the annexation area. Ambulances would also provide emergency services to residents and development elsewhere in the annexation area. At the City's direction, a medic unit could be added to Fire Station 81 near Sun City. According to the Fire Department, first -year start-up costs for a medic unit total approximately $190,000.26 This includes the costs of an ambulance ($140,000), medic equipment ($40,000), and incidentals, such as radios and shoreline ($10,000). Annual operating costs for one ambulance staffed by 6 firefighter II medics are $940,944. These costs would be assumed by the City under both Scenarios A and B. 24 Data provided by Dorian Cooley, Division Chief, CALFIRE/Riverside County Fire, communication, October 12, 2011. 25 Dorian Cooley, Division Chief, CALFIRE/Riverside County Fire, communication, October 25, 2011. 26 Dorian Cooley, Division Chief, CALFIRE/Riverside County Fire, communication, October 13, 2011. 31 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation CITY .OF PALM DESERT POTENTIAL ANNEXATION FISCAL IMPACT ANALYSIS IV. BUILDOUT ASSUMPTIONS AND COST/REVENUE ANALYSIS The build out assumptions used to calculate costs and revenues associated with potential annexation are presented in this section. A. Build Out Phasing This analysis assumes a 10-year build out projection for Scenario A. Nearly 68% of this annexation area is already built out. Where future development could occur, this analysis assumes an even distribution of development over the 10-year period. The analysis has been conducted in constant 2011 dollars; therefore, the relative costs and revenues will be as calculated at build out of the annexation area, regardless of exactly when build out occurs. A larger portion of the Scenario B annexation area is vacant and can accommodate future development. Therefore, this analysis assumes a 20-year build out for Scenario B. Depending on market conditions, growth and development in the City and the annexation area will rise and fall. An even distribution of development in 5-year increments has been assumed for the 20-year build out period. The analysis has been conducted in constant 2011 dollars; therefore, the relative costs and revenues will be as calculated at build out of the annexation area, regardless of when this occurs. That is to say that although inflationary and recessionary factors will affect the City's revenues and costs over time, the relative cost of providing services, the relative amount of revenues generated within the annexation area, and the surplus or shortfall to the City, are represented in this analysis. 32 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation B. Land Use Designations The annexation areas are currently under the jurisdiction of Riverside County, and much of the land contained within them is part of County -approved Specific Plans (see Exhibit 3). Where a Specific Plan has been approved, it is assumed that future build out will occur in accordance with the land use designations provided in the Specific Plan. Where development has taken place that is contrary to the original Specific Plan, as in the case of Xavier School in SP-225, existing development overrides the original Specific Plan. However, it is assumed that vacant land will still develop in accordance with the original Specific Plan. Where no Specific Plan exists, build out is assumed to occur in accordance with the Palm Desert General Plan land use map. C. Build out Calculations Residential For all residential land use categories, it is assumed that 15% of the currently vacant lands so designated would be needed for ancillary facilities, including streets, parking areas, parks and community open space. Based on this assumption, the development potential for these lands is equivalent to 85% of the maximum allowable density. Land designated for up to 12 dwelling units per acre is assumed to result in the development of single-family dwelling units, whether detached or attached. Land designated for 16 units per acre and higher is assumed to accommodate multi -family units. Scenario A: PD Medium Density Residential (4-10 du/ac) • total of 963 single-family units at build out (481.5 units in each five-year period) • Average value = $249,123 per unit Riv. Co. Medium -High Density Residential (5-8 du/ac) • total of 209 single-family units at build out (104.5 units in each five-year period) • Average value = $249,123 per unit Mirasera High Density Residential (12 du/ac) • total of 230 single-family units at build out (115 units in each five-year period) • Average value = $249,123 per unit Mirasera Mixed Use Residential (16 du/ac) • total of 142 multi -family units at build out (71 units in each five-year period) • Average value=$104,525 per unit Mirasera Very High Density Residential (20-25 du/ac) • total of 1,411 multi -family units at build out (705.5 units in each five-year period) • Average value = $104,425 per unit 33 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Scenario B: PD Low Density Residential (0-4 du/ac) • total of 244 single-family units at build out 61 units in each five-year period) • Average value = $249,123 per unit PD Medium Density Residential (4-10 du/ac) • total of 963 single-family units at build out (240.7 units in each five-year period) • Average value = $249,123 per unit Riv. Co. Medium -High Density Residential (5-8 du/ac) • total of 270 single-family units at build out (67.5 units in each five-year period) • Average value = $249,123 per unit Mirasera High Density Residential (12 du/ac) • total of 230 single-family units at build out (57.5 units in each five-year period) • Average value = $249,123 per unit Mirasera Mixed Use Residential (16 du/ac) • total of 142 multi -family units at build out (35.5 units in each five-year period) • Average value=$104,525 per unit Mirasera Very High Density Residential (20-25 du/ac) • total of 1,411 multi -family units at build out (352.7 units in each five-year period) • Average value = $104,425 per unit The average housing value for single-family units is based on the "Inland Empire Quarterly Economic Report" (October 2011). The average value for multi -family units is based on recent new multi -family residential construction in the City of Palm Desert. For residential property transfers, an annual resale rate of 1% change of ownership has been applied to single-family detached and attached units. These represent statistical averages that may be assumed to occur over the life of the annexation area, well beyond the build out year. This analysis also assumes that property transfer tax will begin in the 4th year of development (no resales in the first three years). The population of Sun City is estimated at 9,000 by the Sun City Palm Desert Community Association.27 The population of other dwelling units, existing and future, is based on 2010 U.S. Census data which indicates there are 2.08 persons/household in the City of Palm Desert. Commercial, Hotel, Business Park, and Industrial Commercial, business park, and industrial designations assume that building square footage will cover 22% of the lot. The remaining acreage accounts for driveways, surface parking lots, stormwater retention/detention facilities, and similar ancillary facilities. The following sub -sections summarize assumptions used to calculate various revenues that could be generated by build out of the annexation area. 27 Paul Brady, Sun City Palm Desert Community Association, November 2011. 34 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Commercial Scenario A: • 149,977 square feet developed in each five-year period, for a total of 299,954 square feet at build out. • Per square foot value of $73, based on recent new commercial (general retail) construction valuation in the City of Palm Desert. Scenario B: • 211,309 square feet developed in each five-year period, for a total of 845,237 square feet at build out. • Per square foot value of $73, based on recent new commercial (general retail) construction valuation in the City of Palm Desert. The analysis assumes no revenues from transfer of commercial properties in the annexation area. Hotel Scenario A: • 25,000 square feet developed in each five-year period, for a total of 100,000 square feet at build out. • Per square foot value of $110, based on recent new hotel construction valuation in Palm Desert; or room value of $68,512, based on comparable existing highway -serving hotel development in the annexation boundary. Scenario B: • 75,000 square feet developed in each five-year period, for a total of 300,000 square feet at build out. • Per square foot value of $110, based on recent new hotel construction valuation in Palm Desert; or room value of $68,512, based on existing, comparable, highway -serving hotel development in the annexation boundary. The analysis assumes no revenues from transfer of hotel properties in the annexation area. Business Park Scenario A: • 224,247 square feet developed in each five-year period, for a total of 448,494 square feet at build out 35 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation • Average value of $169 per square foot, based on recent new office/business park construction valuation in Palm Desert. Scenario B: • 457,118 square feet developed in each five-year period, for a total of 1,828,475 square feet at build out. • Average value of $169 per square foot, based on recent new office/business park construction valuation in Palm Desert. The analysis assumes no revenues from transfer of business park properties in the annexation area. Light Industrial Scenario A: • 127,456.5 square feet developed in each five-year period, for a total of 254,913 square feet at build out. • Average value of $54 per square foot, based on new industrial construction valuation in Palm Desert.28 Scenario B: • 63,728 square feet developed in each five-year period, for a total of 254,913 square feet at build out. • Average value of $54 per square foot, based on new industrial construction valuation in the City of Palm Desert.29 The analysis assumes no revenues from transfer of light industrial properties in the annexation area. 28 Average based on 5 months of new industrial development that occurred in 2006. According to the Palm Desert Building & Safety Department, this is the most recent industrial building permit valuation data available. 29 Ibid. 36 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation CITY OF PALM DESERT POTENTIAL ANNEXATION FISCAL IMPACT ANALYSIS V. Cost/Revenue Analysis A. Cost/Revenue Summaries The following conclusions are based on the assumptions described above. It should be noted that all amounts are in Year 2011 dollars and are subject to rounding. For Scenario A, the total projected annual costs and revenues to the City over each five-year phase of the 10-year build out period are shown in Table 10. This table also shows the total costs and revenues that are projected annually at build out of the annexation area. For Scenario B, these costs and revenues for the 20-year build out period are shown in Table 12. It should be noted that the cost/revenue summaries do not include revenues from developer impact fees, which are one-time fees that occur at the time permits are pulled. These projections are shown in Table 11 for Scenario A and Table 13 for Scenario B. All of the tables in this section are summary tables. More detailed calculations for each revenue and cost category can be found in Appendices A and B. 37 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 10 Total Potential Costs/Revenues Summary Table Annexation Scenario A Build out Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) ANNUAL REVENUES General Fund: Property Tax $836,415 $947,279 Property Transfer Tax $112,171 $125,579 Sales Tax $1,874,090 $2,314,298 Transient Occupancy Tax $544,596 $776,804 Motor Vehicle In -Lieu Fees $38,761 $48,632 Total Annual General Fund Revenue at Phase Build out: $3 406 032 $4 212 592 Restricted Funds: Highway Users Gas Tax $282,195 $354,059 Measure A Funds $15,742 $19,440 Prop. A Fire Tax $386,607 $467,813 Structural Fire Tax $1,402,787 $1,588,723 Total Annual Restricted Fund Revenue at Phase Build out: $2,087,331 $2,430 035 Interest Earnings: Total Annual Revenues at Phase Build out: $5,493,362 $6,642,628 Historic Average Interest Rate, 90-day Treasury Bill: 4.39% 4.39% Anticipated Interest on Revenues: $241,159 $291,611 Total Annual Revenues with Interest at Phase Build out: $5 734,521 $6,934,239 ANNUAL COSTS General Fund. General Government $3,413,867 $4,295,120 Police Protection $4,137,575 $5,251,483 Roadway Maintenance $488,478 $574,680 Total Annual General Fund Costs at Phase Build out: $8,039,920 $10,121,283 Restricted Funds: Fire Protection $1,500,000 $1,500,000 Ambulance Services $940,94430 $940,94426 Total Annual Restricted Fund Costs at Phase Build out: $2,440,94426 $2,440,94416 Totals: Total Annual Costs at Phase Build out: $10,480,864 $12,562,227 Projected Annual Cashflow at Phase Build out: -$4,746,343 -$5,627,988 30 Does not include one-time (year 1) start-up ambulance costs of $190,000. 38 Terre Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 11 Developer Impact Fee Revenues (One Time Only)' Annexation Scenario A Build out Phase Phase I (Yrs 1-5) Phase II Yrs 6-10 New Construction Tax $1,107,172 $1,107,172 Art in Public Places Fund $963,967 $963,967 Low Income Housing Mitigation Fee $350,661 $350,661 Child Care Program Fund $491,268 $491,268 Traffic Signals Fund $180,514 $180,514 Planned Drainage Fund $175,700 $175,700 Parks & Recreation Facilities Fund $1,823,916 $1,823,916 Total Developer Impact Fee Revenues at Phase Build out: $5,093,198 $5,093,198 Developer impact fees occur only once, at the time the unit is permitted. 39 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 12 Total Potential Costs/Revenues Summary Table Annexation Scenario B Build out Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Phase III (Yrs 11-15) Phase IV (Yrs 16-20) ANNUAL REVENUES General Fund. Property Tax $828,082 $915,621 $1,003160 $1090698 Property Transfer Tax $96,687 $97,980 $99,274 $100,568 Sales Tax $2,078,761 $2,698,991 $3,319,220 $3,939,446 Transient Occupancy Tax $621,998 $931,610 $1,241,221 $1 550,832 Motor Vehicle In -Lieu Revenue $34,343 $39,789 $45,235 $50 682 Total Annual General Fund Revenue at Phase Build out: $3 659 871 $4 683 990 $5 708 110 $6 732 226 Restricted Funds: Highway Users Gas Tax $250,028 $289,679 $329,330 $368,981 Measure A Funds $17,642 $22,672 $27,881 $33,091 Prop. A Fire Tax $351,356 $395,453 $439,549 $483,645 Structural Fire Tax $1,390,562 $1,537,377 $1,684,193 $1,831,008 Total Annual Restricted Fund Revenue at Phase Build out: $2,009,408 $2,245,180 $2,480,952 $2,716,725 Interest Earnings: Total Annual Revenues at Phase Build out: $5,669,279 $6,929,171 $8,189 062 $9,448,950 Historic Average Interest Rate, 90-day Treasury Bill: 4.39% 4.39% 4.39% 4.39% Anticipated Interest on Revenues: $248,881 $304,191 $359 500 $414 809 Total Annual Revenues with Interest at Phase Build out: $5,918,160 $7 233 361 $8,548,562 $9,863,759 ANNUAL COSTS General Fund. General Government $3,031,673 $3,517,392 $4,003,112 $4,488,831 Police Protection $3,701,198 $4,313,217 $4,925,236 $5,537,254 Roadway Maintenance $607,245 $678,122 $749,002 $819,879 Total Annual General Fund Costs at Phase Build out: $7,340 116 $8,508,731 $9,677,349 $10 845 965 Restricted Funds: Fire Protection $1,528,907 $1,557,408 $1,585,910 $1,614,411 Ambulance Services $940,94431 $940,94427 $940,94427 $940,94427 Total Annual Restricted Fund Costs at Phase Build out: $2,469,85127 $2,498,35227 $2,526,85427 $2,555,35527 Totals: Total Annual Costs at Phase Build out: $9,809,967 $11 007,084 $12,204 203 $13 401,320 Projected Annual Cashflow at Phase Build out: -$3,891,807 -$3,773,723 -$3 655,641 -$3 537,560 31 Does not include one-time (year 1) start-up ambulance costs of $190,000. 40 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Table 13 Developer Impact Fee Revenues (One time only)' Annexation Scenario B Build out Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Phase III (Yrs 11-15) Phase IV (Yrs 16-20) New Construction Tax $811,863 $811,863 $811,863 $811,863 Art in Public Places Fund $787,633 $787,633 $787,633 $787,633 Low Income Housing Mitigation Fee $522,899 $522,899 $522,899 $522,899 Child Care Program Fund $803,567 $803,567 $803,567 $803,567 Traffic Signals Fund $187,230 $187,230 $187,230 $187,230 Planned Drainage Fund $162,475 $162,475 $162,475 $162,475 Parks & Recreation Facilities Fund $1,080,338 $1,080,338 $1,080,338 $1,080,338 Total Developer Impact Fee Revenues F7 at Phase Build out: $4,356,004 $4,356,004 $4,356,004 $4,356,004 ' Developer impact fees occur only once, at the time the unit is permitted. 41 Terra Nova/City Of Palm Desert Fiscal Impact Analysis, Potential Annexation B. Conclusions 1. Scenario A Annexation of Scenario A will add an estimated 15,144 residents to the City of Palm Desert. The area is partially developed, and some costs and revenues will be realized almost immediately. Build out of land in Scenario A could potentially generate $6.9 million annually in revenues by the end of the 10-year build out timeframe. The largest single revenue generator is expected to be local Sales Tax ($2.3 million annually at 10-year build out), which is related to the second highest revenue source, Structural Fire Tax ($1.5 million annually at 10-year build out). These revenues are dependent upon commercial sales tax volume in the annexation area. The costs associated with serving this new area and its population are projected to be approximately $12.6 million annually at the end of the 10-year build out period. The most significant costs are those from Police Protection ($5.2 million annually at 10-year build out), closely followed by those from General Government operations ($4.2 million annually at 10-year build out). As such, build out of the area is expected to result in an annual revenue shortfall of approximately $4.7 million at the end of the first five-year period. The shortfall is projected to grow to $5.6 million by the end of the second five-year period. This is, in part associated with the high percentage of residential development in the area and the costs of providing services to residents, and a comparatively small percentage of commercial sales tax -generating development. Residential lands comprise nearly 47% of the entire annexation area, and commercial lands account for 4%. Developer impact fee (DIF) revenues are projected to be $5.09 million at phase build out of each phase. This assumes that development occurs evenly over the 10-year build out period. The highest sources of DIF revenue will be from the New Construction Tax and the Park & Recreation Facilities Fund, which will benefit from the future construction of new single-family and multi -family dwelling units in the annexation area, particularly those in the Mirasera Specific Plan. 2. Scenario B Annexation of Scenario B will result in a population increase of approximately 15,779 to the City of Palm Desert. The area is partially built out; some costs and revenues will be generated immediately, and others will be realized over the build out period. Projected revenues at the end of the 20-year build out period are projected to be approximately $9.86 million annually. The largest revenue source will be local Sales Tax ($3.9 million annually), followed by Structural Fire Tax ($1.8 million annually) and Transient Occupancy Tax ($1.5 million annually). 42 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation At the end of the 20-year build out period, annual costs are projected to be $13.4 million. As with Scenario A, the highest costs are associated with providing Police Protection ($5.5 million) and General Government services ($4.49 million) to existing and future residents. Build out of Scenario B is expected to generate an annual revenue shortfall of approximately $3.9 million at the end of the first five-year build out period. However, the shortfall is projected to fall slightly to $3.5 million at the end of the fourth five-year period. Like Scenario A, residential development accounts for a much greater percentage of land in the annexation area (37%) than commercial development (5%), and sales tax -generating opportunities are limited. One-time revenues resulting from Developer Impact Fees in Scenario B are expected to be $4.3 million at build out of each phase, assuming development occurs evenly over the 20-year build out period. These revenues will constitute a significant revenue source to the City over the 20- year build out period, but they are one-time revenues that will be realized only as new development occurs. 43 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Appendix A Scenario A Detailed Cost and Revenue Tables 44 Property Tax Revenue - Scenario A IFrom Existing Conditions TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Tax, Struc. Fire Tax Existing Conditions (developed parcels are taxed on value of land & structure; vacant parcels are taxed on value of land) Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Calculation of Property Tax Revenue Total Value of allparcels' $2,087,295,429 $2,087,295,429 (subtract) Value of tax exempt parcelS2 $7,112,668 $7,112,668 Total value of taxable parcels $2,080,182,761 $2,080,182,761 Property Tax Rate I % I % Total Property Tax Collected by County at phase buildout $20,801,828 $20,801,828 Percent of Property Tax Allocated to Cit 's General Fund 7.0% 7.0% Total Amount Allocated to City General Fund at phase buildout (prior to ERAF) $1,456,128 $1,456,128 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to CityGeneral Fund at phase buildout $728,064 $728,064 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% Property Tax Revenue collected by County $20,801,828 $20,801,828 Total Structural Fire Tax Revenue at phase buildout $1,221,067 $1,221,067 ' From Riverside County Assessors records, Oct. 2011. Includes value of land for vacant parcels, and value of land and structures for developed parcels. ' Tax exempt parcels, as flagged in Riverside County Assessors records, Oct. 2011. Includes 135.51 acres of land, primarily owned by CVWD, CA DOT, County of Riverside, and Sun City Palm Desert Community Association. From Future Residential Development Land Use Designation: Riv. Co. Medium High Density Residential (5- 8 duiac) Total No. Acres: 30.8 No. of Potential Buildout Units: 209' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Number of acres developed during phase 15.4 15.4 Maximum density permitted (units/acre) 8.0 8.0 Maximum potential units constructed during this phase 105 105 Number of total potential units constructed at buildout 105 209 Average value per unit' $249,123 $249,123 Total Value $26,088,161 $52,176,321 Property Tax Rate I % I % Total Property Tax Collected by County at Phase Buildout $260,882 $521,763 Percent of Property Tax Allocated to Cit 's General Fund 7.0% 7.0% Total Amount Allocated to City General Fund at phase buildout (prior to ERAF) $18,262 $36,523 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund at phase buildout $9,131 $18,262 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% ,Property Tax Revenue collected by County $260,882 $521,763 Total Structural Fire Tax Revenue at phase buildout $15,314 $30,627 'Assumes land will be developed at 85% of the maximum density permitted. ' "Inland Empire Quarterly Economic Report," prepared for WRCOG by John Husing, Ph.D., October 2011. Accounts for value of land and structure. Page 1 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Tax, Struc. Fire Tax From Future Residential Development Land Use Designation: PD Medium Density Residential (4-10 duiac) Total No. Acres: 1132 No. o Potential Buildout Units: 963' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Number of acres developed during phase 56.7 56.7 Maximum density permitted (units/acre) 10.0 10.0 Maximum potential units constructed during this phase 482 482 Number of total potential units constructed at buildout 482 963 Average value per unit' $249,123 $249,123 Total Value $119,958,953 $239,917,905 Property Tax Rate I% 1% Total Property Tax Collected by County at Phase Buildout $1,199,590 $2,399,179 Percent of Property Tax Allocated to Cit 's General Fund 7.0% 7.0% Total Amount Allocated to City General Fund at phase buildout (prior to ERAF) $83,971 $167,943 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund atj2hase buildout $41,986 $83,971 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% Property Tax Revenue collected by County $1,199,590 $2,399,179 Total Structural Fire Tax Revenue at phase buildout $70,416 $140,832 'Assumes land will be developed at 85% of the maximum density permitted. ' "Inland Empire Quarterly Economic Report," prepared for WRCOG by John Husing, Ph.D., October 2011. Accounts for value of land and structure. From Future Residential Development Land Use Designation: Mirasera High Density Residential (12 du/ac) Total No. Acres: 22.6 No. of Potential Buildout Units: 230' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Number of acres developed during phase 11.3 11.3 Maximum density permitted (units/acre) 12.0 12.0 Maximum potential units constructed during this phase 115 115 Number of total potential units constructed at buildout 115 231 Average value per unit' $249,123 $249,123 Total Value $28,713,917 $57,427,834 Property Tax Rate I% 1% Total Property Tax Collected by County at Phase Buildout $287,139 $574,278 Percent of Prop= Tax Allocated to Cit 's General Fund 7.0% 7.0% to ERAF) $20,100 $40,199 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund at phase buildout $10,050 $20,100 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% Property Tax Revenue collected by County $287,139 $574,278 Total Structural Fire Tax Revenue at phase buildout $16,855 $33,710 'Assumes land will be developed at 85% of the maximum density permitted. 2 "Inland Empire Quarterly Economic Report," prepared for WRCOG by John Husing, Ph.D., October 2011. Accounts for value of land and structure. Page 2 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Tax, Struc. Fire Tax From Future Residential Development Land Use Designation: Mirasera Mixed Use Residential (16 du/ac) Total No. Acres: IOS No. of PotentialBuildout Units: 142' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs.6-10) Number of acres developed during phase 5.3 5.3 Maximum density permitted (units/acre) 16.0 16.0 Maximum potential units constructed during this phase 71 71 Number of total potential units constructed at buildout 71 143 Average value per unit' $104,425 $104,425 Total Value $7,455,945 $14,911,890 Property Tax Rate 1 % 1 % Total Property Tax Collected by County at Phase Buildout $74,559 $149,119 Percent of Property Tax Allocated to Cit 's General Fund 7.0% 7.0% Total Amount Allocated to City General Fund at phase buildout (prior to ERAF) $5,219 $10,438 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund at hase buildout $2,610 $5,219 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% Property Tax Revenue collected by County $74,559 $149,119 Total Structural Fire Tax Revenue at phase buildout $4,377 $8,753 'Assumes land will be developed at 85% of the maximum density permitted. ' Based on building permit data provided by the Palm Desert Building and Safety Dept., Nov. 2011. Includes value of structure only. From Future Residential Development Land Use Designation: Mirasera Very High Density Residential (20- 25 du/ac) Total No. Acres: 66.4 No. of Potential Buildout Units: 1,411' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Number of acres developed during phase 33.2 33.2 Maximum density permitted (units/acre) 25.0 25.0 Maximum potential units constructed during this phase 706 706 Number of total potential units constructed at buildout 706 1,411 Average value per unit' $104,425 $104,425 Total Value $73,671,838 $147,343,675 Property Tax Rate 1 % 1 % Total Property Tax Collected by County at Phase Buildout $736,718 $1,473,437 Percent of Profzx Tax Allocated to Cit 's General Fund 7.0% 7.0% to ERAF) $51,570 $103,141 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund at phase buildout $25,785 $51,570 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% Property Tax Revenue collected by County $736,718 $1,473,437 Total Structural Fire Tax Revenue at phase buildout $43,245 $86,491 'Assumes land will be developed at 85% of the maximum density permitted. ' Based on building permit data provided by the Palm Desert Building and Safety Dept., Nov. 2011. Includes value of structure only. Page 3 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Tax, Struc. Fire Tax From Future Commercial Development Land Use Designation: Commercial Total No. Acres: 313 No. of Potential Buildout S . Ft.: 299,954' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Number of acres developed during phase 15.7 15.7 Percentage of lot covered by structure' 22% 22% Square footage constructed during this phase 149,977 149,977 Square footage constructed at phase buildout 149,977 299,954 Average value per square foot' $73 $73 Total Value $10,948,327 $21,896,654 Property Tax Rate 1% 1% Total Property Tax Collected by County at Phase Buildout $109,483 $218,967 Percent of Property Tax Allocated to Cit 's General Fund 7% 7% Total Amount Allocated to City General Fund at phase buildout (prior to ERAF) $7,664 $15,328 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund at phase buildout $3,832 $7,664 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% Property Tax Revenue collected by County $109,483 $218,967 Total Structural Fire Tax Revenue at phase buildout $6,427 $12,853 'Assumes structure will account for 22% lot coverage. Remainder of lot will include access roads, parking facilities, landscaping, and other ancillary uses. ' Based on compilation of building permit data provided by Palm Desert Building & Safety Department, October 2011. From Future Hotel Development Land Use Designation: Commercial (Hotel) Total No. Acres: 3.1 No. of Potential Buildout Sq. Ft.: 100,000' No. of Potential Room: 150 Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) No. of rooms constructed at phase buildout 75 150 Average value per room' $68,512 $68,512 Total Value $5,138,400 $10,276,800 Property Tax Rate 1 % 1 % Total Property Tax Collected by County at Phase Buildout $51,384 $102,768 Percent of Property Tax Allocated to Cit 's General Fund 7% 7% to ERAF) $3,597 $7,194 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund at phase buildout $1,7981 $3,597 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% PropertyWroperty Tax Revenue collected by County $51,384 $102,768 Total Structural Fire Tax Revenue at phase buildout $3,016 $6,032 ' Terra Nova estimate based on single hotel and available acreage. '- Based on comparable existing highway -serving hotel in the annexation area, per Riv. Co. Assessor's records, Oct. 2011. Page 4 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Tax, Struc. Fire Tax From Future Business Park Development Land Use Designation: Business Park Total No. Acres: 46.8 No. of Potential Buildout S . Ft.: 448,494' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Number of acres developed during phase 23.4 23.4 Percentage of lot covered by structure' 22% 22% Square footage constructed during this phase 224,247 224,247 Square footage constructed at phase buildout 224,247 448,494 Average value per square foot' $169 $169 Total Value $37,897,723 $75,795,445 Property Tax Rate 1% l% Total Property Tax Collected by County at Phase Buildout $378,977 $757,954 Percent of Property Tax Allocated to Cit 's General Fund 7% 7% to ERAF) $26,528 $53,057 Percentage deducted for ERAF Contributions 3.5% 3.5% Total Amount Allocated to City General Fund at phase buildout $13,264 $26,528 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% jProperty Tax Revenue collected by County $378,977 $757,954 Total Structural Fire Tax Revenue at phase buildout $22,246 $44,492 'Assumes structure will account for 22% lot coverage. Remainder of lot will include access roads, parking facilities, landscaping, and other 'Based on compilation of building permit data provided by Palm Desert Building & Safety Department, October 2011. From Future Industrial Development Land Use Designation: Industrial Total No. Acres: 26.6 No. of Potential Buildout S . Ft.: 254,913' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) Number of acres developed during phase 13.3 13.3 Percentage of lot covered by structure' 22% 22% Square footage constructed during this phase 127,457 127,457 Square footage constructed at phase buildout 127,457 254,913 Average value per square foot' $54 $54 Total Value $6,882,654 $13,765,308 Property Tax Rate 1 % 1 % Total Property Tax Collected by County at Phase Buildout $68,827 $137,653 Percent of Property Tax Allocated to Cit 's General Fund 7% 7% to ERAF) $4,818 $9,636 Percentage deducted for ERAF Contributions 3.5%1 3.5% Total Amount Allocated to City General Fund at phase buildout $2,4091 $4,818 Calculation of Structural Fire Tax Revenue Structural Fire Tax Rate 5.87% 5.87% lProperty Tax Revenue collected by County $68,827 $137,653 Total Structural Fire Tax Revenue at phase buildout $4,040 $8,080 'Assumes structure will account for 22% lot coverage. Remainder of lot will include access roads, parking facilities, landscaping, and other ' Based on compilation of building permit data provided by Palm Desert Building & Safety Department, October 2011. Page 5 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Tax, Struc. Fire Tax Property Tax Revenue Surnmnumn ry Table Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Total property tax revenue to City General Fund at phase buildout from existing development $728,064 $728,064 ...from future Riv. Co. Medium High Density residential development $9,131 $18262 ...from future PD Medium Density residential development $41,986 $83,971 ...from future Mirasera High Density residential development $10,050 $20,100 ...from future Mirasera Mixed Use residential development $2,610 $5219 ...from future Mirasera Very High Density residential development $25,785 $51,570 ...from future commercial development $3,832 $7,664 ...from future hotel development $1,798 $3,597 ...from future business park development $13,264 $26528 ...from future industrial -light development $2,409 $4,818 Subtotal $838,929 $949,793 Adjustment for loss of property tax revenue on vacant Single -Family arcels after development occurs Value of land on currently vacant (but developable) Single -Family Residentialparcels' $14,365,301 $14,365,301 City's Property Tax revenue on value of land for currently vacant (but ,developable) Single -Family residentialparcels' $5,028 $5,028 (subtract) Property Tax Revenue Loss from line above, phased over entire buildout timeframe $2,5141 $2,514 Total Property Tax Revenue at Phase Buildout $836,415 $947,279 ' Refers to parcels that are currently vacant, but developable in the future for single-family residential development. Existing Conditions table includes property tax revenue currently generated by these parcels on their land value. Future Development tables projects future property tax revenue generated by these parcels on their land value and structure value. To avoid double -counting property tax revenue from land value, the current land value of these parcels is subtracted here. Page 6 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Transfer Tax Property Transfer Tax Revenue - Scenario A From Existing Residential Development Existing Single -Family Residential Units Buildout Phase No. of Acres: 792 Phase I Phase II No. of Dwelling Units: 4,985 (Yrs.1-5) (Yrs. 6-10) lExisting Units(80% of market value is subject to tax) Number of units existing in 1 st year of this phase 4985 4985 Number of existing units changing ownership in 1 st year of this phase 499 499 Number of units existing in 2nd year of this phase 4985 4985 Number of existing units changing ownership in 2nd year of this phase 499 499 Number of units existing in 3rd year of this phase 4985 4985 Number of existing units changing ownership in 3rd year of this phase 499 499 Number of units existing in 4th year of this phase 4985 4985 Number of existing units changing ownership in 4th year of this phase 499 499 Number of units existing in 5th year of this phase 4985 4985 Number of existing units changing ownership in 5th year of this phase 499 499 Total number of units existing during this phase 4985 4985 Total number of existing units changing ownership during this phase 2493 2493 Property Value per dwelling unit' $364,653 $364,653 Unencumbered Value per unit (80% of value) $291,722 $291,722 Amount subject to Property Transfer Tax for all existing units changing ownership during this phase $727,118,082 $727,118,082 Property Transfer Tax Rate 0.11 % 0.11 % Total Property Transfer Tax Collected at Phase Buildout $799,830 $799,830 Percent of Property Transfer Tax allocated to Palm Desert 50% 50% Total Property Transfer Tax Allocated to Palm Desert General Fund at phase buildout (for 5-year period) $399,915 $399,915 Number of years this phase ( to get annual average) 5 5 Total Annual Property Transfer Tax Allocated to Palm Desert at Phase Buildout $79,983 $79,983 ' Average value of residential units in Sun City, based on Riverside County Assessors data, includes value of land and structure. Page 7 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Transfer Tax From Future Residential Development Land Use Designation: PD Meal -um Density Residential (4-10 ulac) No. of acres: 1133 No. of potential buildout units: 963` Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs. 6-10) New Units (100% of market value is subject to tax) Number of acres developed during phase 56.7 56.7 Maximum Density permitted (units/acre) 10 10 Number of new units during thisphase' 482 482 Market Value per unit $249,123 $249,123 Amount Subject to Property Transfer Tax for all new units sold 1 $119,958,9531 $119,958,953 Existing Units(80% of market value is subject to tax) Number of units constructed in 1 st year of this phase 96 578 Number of existing units changing ownership in 1st year of this phase 0 58 Number of units constructed by end of 2nd year of this phase 192 674 Number of existing units changing ownership in 2nd year of this phase 0 67 Number of units constructed by end of 3rd year of this phase 288 770 Number of existing units changing ownership in 3rd year of this phase 0 77 Number of units constructed by end of 4th year of this phase 384 866 Number of existing units changing ownership in 4th year of this phase 38 87 Number of units constructed by end of 5th year of this phase 482 849 Number of existing units changing ownership in 5th year of this phase 48 85 Total number of existing units changing ownership during this phase 87 374 Market Value per unit $249,123 $249,123 Unencumbered Value per unit (80% of market value) $199,298 $199,298 $17,249,775 $74,439,945 New Units & Existing Units Combined Total amount subject to Property Transfer Tax (includes all new units sold & all existing units changing ownership) $137,208,727 $194,398,898 Property Transfer Tax Rate 0.11 % 0.11 % Total Property Transfer Tax Collected at Phase Buildout $150,930 $213,839 Percent of Property Transfer Tax allocated to Palm Desert General Fund 50% 50% Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5- year period) $75,465 $106,919 Number of years this phase (to get annual average) 5 5 Total annual Property Transfer Tax allocated to Palm Desert at phase buildout $15,093 $21,384 Page 8 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Transfer Tax From Future Residential Development Land Use Designation: Medium -High Density Res i entia (5-8 ulac) No. of acres: 30.8 No. of potential buildout units: 209' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs.6-10) New Units (100% of market value is subject to tax) Number of acres developed during phase 15.4 15.4 Maximum Density permitted (units/acre) 8 8 Number of new units during thisphase' 105 105 Market Value per unit $249,123 $249,123 Amount Subject to Property Transfer Tax for all new units sold $26,088,161 $26,088,161 Existing Units(80% of market value is subject to tax) Number of units constructed in 1 st year of this phase 20 125 Number of existing units changing ownership in 1 st year of this phase 0 12 Number of units constructed by end of 2nd year of this phase 40 145 Number of existing units changing ownership in 2nd year of this phase 0 14 Number of units constructed by end of 3rd year of this phase 60 165 Number of existing units changing ownership in 3rd year of this phase 0 16 Number of units constructed by end of 4th year of this phase 80 185 Number of existing units changing ownership in 4th year of this phase 8 18 Number of units constructed by end of 5th year of this phase 105 184 Number of existing units changing ownership in 5th year of this phase 10 18 Total number of existing units changing ownership during this phase 18 80 Market Value per unit $249,123 $249,123 Unencumbered Value per unit (80% of market value) $199,2981 $199,298 Amount subject to Property Transfer Tax for all existing units changing ownership during this phase $3,681,440 $16,001,270 New Units & Existing Units Combined Total amount subject to Property Transfer Tax (includes all new units sold & all existing units changing ownership) $29,769,601 $42,089,430 Property Transfer Tax Rate 0.11 % 0.11 % Total Property Transfer Tax Collected at Phase Buildout $32,747 $46,298 Percent of Property Transfer Tax allocated to Palm Desert General Fund 50% 50% Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5- yearperiod) $16,373 $23,149 Number of years this phase (to get annual average) 5 5 Total Annual Property Transfer Tax allocated to Palm Desert at phase buildout $3,275 $4,630 Page 9 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Transfer Tax From Future Residential Development Land Use Designation: Mirasera High Density Residential (12 dulac) No. of acres: 22.6 No. of potential buildout units: 230' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs.6-10) New Units (100% of market value is subject to tax) Number of acres developed during phase 11.3 11.3 Maximum Density permitted (units/acre) 12 12 Number of new units during thisphase' 115 115 Market Value per unit $249,123 $249,123 Amount Subject to Property Transfer Tax for all new units sold $28,713,9171 $28,713,917 Existing Units(80% of market value is subject to tax) Number of units constructed in 1st year of this phase 23 138 Number of existing units changing ownership in 1 st year of this phase 0 14 Number of units constructed by end of 2nd year of this phase 46 161 Number of existing units changing ownership in 2nd year of this phase 0 16 Number of units constructed by end of 3rd year of this phase 69 184 Number of existing units changing ownership in 3rd year of this phase �ji 18 Number of units constructed by end of 4th year of this phase 92 207 Number of existing units changing ownership in 4th year of this phase 9 21 Number of units constructed by end of 5th year of this phase 115 203 Number of existing units changing ownership in 5th year of this phase 12 20 Total number of existing units changing ownership during this phase 21 89 Market Value per unit $249,123 $249,123 Unencumbered Value per unit (80% of market value) $199,298 $199,298 Amount subject to Property Transfer Tax for all existing units changing ownership during this phase $4,130,659 $17,818,074 New Units & Existing Units Combined Total amount subject to Property Transfer Tax (includes all new units sold & all existing units changing ownership) $32,844,576 $46,531,991 Property Transfer Tax Rate 0.11 % 0.11 % Total Property Transfer Tax Collected at Phase Buildout $36,129 $51,185 Percent of Property Transfer Tax allocated to Palm Desert General Fund 50% 50% Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5- year period) $18,065 $25,593 Number of years this phase ( to get annual average) 5 5 Total Annual Property Transfer Tax allocated to Palm Desert at phase buildout $3,6131 $5,119 Page 10 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Transfer Tax From Future Residential Development Lan Use Designation: Mirasera Mixed Use Residential (16 ac) No. of acres: 10.5 No. of potential buildout units: 142' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs.6-10) New Units (100% of market value is subject to tax) Number of acres developed during phase 5.3 5.3 Maximum Density permitted (units/acre) 16 16 Number of new units during thisphase' 71 71 Market Value per unit $104,425 $104,425 Amount Subject to Property Transfer Tax for all new units sold $7,455,9451 $7,455,945 Existing Units(80% of market value is subject to tax) Number of units constructed in 1 st year of this phase 14 85 Number of existing units changing ownership in 1 st year of this phase 0 9 Number of units constructed by end of 2nd year of this phase 28 99 Number of existing units changing ownership in 2nd year of this phase 0 10 Number of units constructed by end of 3rd year of this phase 42 113 Number of existing units changing ownership in 3rd year of this phase 0 11 Number of units constructed by end of 4th year of this phase 56 127 Number of existing units changing ownership in 4th year of this phase 6 13 Number of units constructed by end of 5th year of this phase 71 126 Number of existing units changing ownership in 5th year of this phase 7 13 Total number of existing units changing ownership during this phase 13 55 Market Value per unit $104,425 $104,425 Unencumbered Value per unit (80% of market value) $83,540 $83,540 Amount subject to Property Transfer Tax for all existing units changing ownership during this phase $1,064,300 $4,608,066 New Units & Existing Units Combined Total amount subject to Property Transfer Tax (includes all new units sold & all existing units changing ownership) $8,520,245 $12,064,011 Property Transfer Tax Rate 0.11 % 0.11 % Total Property Transfer Tax Collected at Phase Buildout $9,372 $13,270 Percent of Property Transfer Tax allocated to Palm Desert General Fund 50% 50% Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5- year period) $4,686 $6,635 Number of years this phase (to get annual average) 5 5 Total Annual Property Transfer Tax allocated to Palm Desert at phase buildout $9371 $1,327 Page 11 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Transfer Tax From Future Residential Development Lan Use Designation: Mirasera Very High Density Residential (20-25 dulac) No. of acres: 66.4 No. of potential buildout units: 1,411' Buildout Phase Phase I (Yrs.1-5) Phase II (Yrs.6-10) New Units (100% of market value is subject to tax) Number of acres developed during phase 33.2 33.2 Maximum Density permitted (units/acre) 25 25 Number of new units during thisphase' 706 706 Market Value per unit $104,425 $104,425 Amount Subject to Property Transfer Tax for all new units sold 1 $73,671,8381 $73,671,838 Existing Units(80% of market value is subject to tax) Number of units constructed in 1 st year of this phase 141 847 Number of existing units changing ownership in 1 st year of this phase 0 85 Number of units constructed by end of 2nd year of this phase 282 988 Number of existing units changing ownership in 2nd year of this phase 0 99 Number of units constructed by end of 3rd year of this phase 423 1129 Number of existing units changing ownership in 3rd year of this phase 0 113 Number of units constructed by end of 4th year of this phase 564 1270 Number of existing units changing ownership in 4th year of this phase 56 127 Number of units constructed by end of 5th year of this phase 706 1245 Number of existing units changing ownership in 5th year of this phase 71 125 Total number of existing units changing ownership during this phase 127 548 Market Value per unit $104,425 $104,425 Unencumbered Value per unit (80% of market value) $83,540 $83,540 Amount subject to Property Transfer Tax for all existing units changing ownership during this phase $10,605,403 $45,754,858 New Units & Existing Units Combined Total amount subject to Property Transfer Tax (includes all new units sold & all existing units changing ownership) $84,277,241 $119,426,696 Property Transfer Tax Rate 0.11 % 0.11 % Total Property Transfer Tax Collected at Phase Buildout $92,705 $131,369 Percent of Property Transfer Tax allocated to Palm Desert General Fund 50% 50% Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5- year period) $46,352 $65,685 Number of years this phase (to get annual average) 5 5 Total Annual Property Transfer Tax allocated to Palm Desert at phase buildout $9,2701 $13,137 Page 12 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. Transfer Tax Property Transfer Tax Revenue Summary Table Buildout Phase Phase I (Yrs 1-5) Phase 1I (Yrs 6-10) Total tax revenue from existing resid. development $79,983 $79,983 ...from future PD Medium Density residential development $15,093 $21,384 ...from future Riv. Co. Medium -High Density residential development $3,275 $4,630 ...from future Mirasera High Density residential development $3,613 $5,119 ...from future Mirasera Mixed Use residential development $937 $1,327 ...from future Mirasera Very High Density residential development $9,270 $13,137 Total property transfer tax revenue at phase buildout $112,171 $125,579 Page 13 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Sales Tax, Measure A Sales Tax Revenue Measure A Revenue - Scenario A From Existing Commercial Development Lana useVesignanon: commerelai (aVes not Inc u e norey No. of Acres: 50.1 Square Feet of Bldg. Space: 480,118' Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Data Number of acres developed 50.11 50.1 Number of square feet constructed' 480,1181 480,118 Calculation of Total Leasable Square Feet Percent leasable space 90% 90% No. of leasable square feet 432,1061 432,106 "Neighborhood Commercial" Development Percent of leasable s . ft. considered Neighborhood Commercial 100% 100% No. of leasable s . ft. considered Neighborhood Commercial 432,106 432,106 Ave. annual sales volume per s . ft.Z $326.13 $326.13 Total annual sales from Neighborhood Commercial development $140,922,795 $140,922,795 Calculation of Total Sales Tax Revenues Total annual sales at phase buildout $140,922,795 $140,922,795 Total annual sales generated by commercial venues within Sun City' $2,465,338 $2,465,338 Total annual sales generated by all existing commercial development $143,388,133 $143,388,133 County sales tax rate 1% 1% Annual sales tax revenue collected by City at phase buildout $1,433,881 $1,433,881 Calculation of Measure A Revenues° County -wide Measure A tax rate 0.50% 0.50% Amount collected for County -wide Measure A fund $716,941 $716,941 Percent allocated to the Coachella Valley region 24% 24% Amount allocated to the Coachella Valley region $172,066 $172,066 Percent allocated to local streets and roads 35% 35% Amount allocated to local streets and roads 1 $60,2231 $60,223 Percent allocated to City of Palm Desert 20% 20% Amount allocated to City of Palm Desert $12,0451 $12,045 'Assumes building covers 22% of lot. The remaining area is used for landscaping, parking, roadway access, and other ancillary uses. 2 Based on definitions and average sales volumes for U.S. Neighborhood Shopping Centers (Table 6-1), provided in "Dollars and Cents of Shopping Centers," Urban Land Institute, 2008. ' Data provided by Sun City Palm Desert Community Association. ° Measure A distribution data provided by Riverside County Transportation Commission. 14 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Sales Tax, Measure A From Future Commercial Development Land Use Designation: Commercial No. of Acres: 31.3 Square Feet of Bldg. Space: 299,9541 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Data Number of acres developed during this phase 15.7 15.7 Number of square feet constructed during thisphase' 149,977 149,977 Number of acres developed at phase buildout 15.7 31.3 Number of square feet constructed at phase buildout 149,977 299,954 Calculation of Total Leasable Square Feet Percent leasable space 90% 90% No. of leasable square feet 1 134,9791 269,959 "Neighborhood Commercial" Development' Percent of leasable s . ft. considered Neighborhood Commercial 100% 100% No. of leasable s . ft. considered Neighborhood Commercial 134,979 269,959 Ave. annual sales volume per s . ft.2 $326.13 $326.13 Total annual sales from Neighborhood Commercial development $44,020,823 $88,041,645 Calculation of Total Sales Tax Revenues Total annual sales at phase buildout $44,020,823 $88,041,645 County sales tax rate 1% 1% Annual sales tax revenue collected by City at phase buildout $440,208 $880,416 Calculation of Measure A Revenues' County -wide Measure A tax rate 0.50% 0.50% Amount collected for County -wide Measure A fund $220,104 $440,208 Percent allocated to the Coachella Valley region 24% 24% Amount allocated to the Coachella Valley region $52,825 $105,650 Percent allocated to local streets and roads 35% 35% Amount allocated to local streets and roads $18,4891 $36,977 Percent allocated to City of Palm Desert 20%1 20% Amount allocated to City of Palm Desert $3,698 $7,395 Assumes building covers 22% of lot. The remaining area is used for landscaping, parking, roadway access, and other ancillary uses. 1 Based on definitions and average sales volumes for U.S. Neighborhood Shopping Centers (Table 6-1), provided in "Dollars and Cents of Shopping Centers," Urban Land Institute, 2008. ' Based on Measure A distribution data provided by Riverside County Transportation Commission. Sales Tax Revenue Summary Table Buildout Phase Phase I (Yrs 1-5) Phase II Yrs 6-10) Total sales tax revenue from existing commercial development $1,433,881 $1,433,881 Total sales tax revenue from future commercial development $440,208 $880,416 Total sales tax revenue from all development $1,874,090 $2,314,298 Measure A Revenue Summary Table Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Total Measure A revenue from existing commercial development $12,045 $12,045 Total Measure A revenue from future commercial development $3,698 $7,395 Total Measure A revenue from all development $15,742 $19,440 15 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: TOT Transient Occupancy Tax Revenue - Scenario A From Existing Hotel Development Land Use Designation: Commercial (Hotel) Total No. Acres: 3.6 Existing Rooms: 154 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed 3.601 3.60 Number of rooms developed 1 1541 154 Calculation of TOT Revenue Average room rate ($ per night) $95.00 $95.00 Average occupancy rate 65% 65% Annual revenue from all rooms at phase buildout $3,470,968 $3,470,968 City's Transient Occupancy Tax Rate 9% 9% City's annual TOT revenue at phase buildout $312,3871 $312,387 From Future Hotel Development Land Use Designation: Mirasera Mixed Use Hotel Total No. Acres: 3.1 Potential Rooms: 150 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed 1.551 1.55 Number of rooms developed 751 150 Calculation of TOT Revenue Average room rate ($ per night) $145.00 $145.00 Average occupancy rate 65% 65% Annual revenue from all rooms at phase buildout $2,580,094 $5,160,188 City's Transient Occupancy Tax Rate 1 9%1 90/( City's annual TOT revenue at phase buildout 1 $232,208 $464,417 Page 16 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: TOT Transient Occupancy Tax Revenue Summary Table Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Annual TOT Revenue from existing hotels at phase buildout 1 $312,387 $312,387 Annual TOT Revenue from future hotels at phase buildout $232,208 $464,417 Total Annual TOT Revenue from all development $544,5961 $776,804 Page 17 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh. In -Lieu Motor Vehicle In -Lieu Revenue - Scenario A From Existing Development Land Use Designation: SP-281 Residential Total No. Acres: 792.0 No. of Existing Units: 4,985 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed at phase buildout 7921 792 Number of total units developed at phase buildout 4,9851 4,985 Calculation of Annual Motor Vehicle In -Lieu Revenue Existing Population' 9,000 9,000 Anticipated Annual Per Capita Revenue $3.21 $3.21 Annual Motor Vehicle In -Lieu Revenue at phase buildout $28,890 $28,890 'Estimated population provided by Paul Brady, Sun City Palm Desert Community Association, October 2011. From Future Development Land Use Designation: PD Medium Density Residential (4-10 du/ac) Total No. Acres: 113.3 No. of Potential Buildout Units: 963 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 56.7 56.7 Maximum density permitted (units/acre) 10 10 Maximum potential units constructed during this phase 482 482 Number of total potential units constructed at phase buildout 482 963 Calculation of Annual Motor Vehicle In -Lieu Revenue Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 1,002 2,003 Anticipated Annual Per Capita Revenue $3.21 $3.21 Annual Motor Vehicle In -Lieu Revenue at phase buildout $3,215 $6,430 F 2010 U.S. Census. Page 18 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh. In -Lieu From Future Development Land Use Designation: Riv. Co. Medium -High Density Residential (5-8 du/ac) Total No. Acres: 30.8 No. of Potential Buildout Units: 209 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 15.4 15.4 Maximum density ermitted (units/acre) 8 8 Maximum potential units constructed during this phase 105 105 Number of total potential units constructed at phase buildout 105 209 Calculation of Annual Motor Vehicle In -Lieu Revenue Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 218 436 Anticipated Annual Per Capita Revenue $3.21 $3.21 Annual Motor Vehicle In -Lieu Revenue at phase buildout $699 $1,398 2010 U.S. Census. From Future Development Land Use Designation: Mirasera High Density Residential (12 du/ac) Total No. Acres: 22.6 No. of Potential Buildout Units: 230 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 11.3 11.3 Maximum density permitted (units/acre) 12 12 Maximum potential units constructed during this phase 115 115 Number of total potential units constructed at phase buildout 115 231 Calculation of Annual Motor Vehicle In -Lieu Revenue Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 240 479 Anticipated Annual Per Capita Revenue $3.21 $3.21 Annual Motor Vehicle In -Lieu Revenue at phase buildout $770 $1,539 ' 2010 U.S. Census. Page 19 of 48 From Future Development Land Use Designation: Mirasera Mixed Use Residential (16 du/ac) Total No. Acres: 10.5 No. of Potential Buildout Units: 142 Land Use Buildout Data Number of acres developed during phase Maximum density permitted (units/acre) Maximum potential units constructed during this phase Number of total potential units constructed at phase buildout Calculation of Annual Motor Vehicle In -Lieu Revenue TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh.In-Lieu Buildout Phase Phase I Phase II (Yrs 1-5) (Yrs 6-10) 5.3 5.3 16 16 71 71 71 143 Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 149 297 Anticipated Annual Per Capita Revenue $3.21 $3.21 Annual Motor Vehicle In -Lieu Revenue at phase buildout $477 $953 1' 2010 U.S. Census. From Future Development Land Use Designation: Mirasera Very High Density Residential (20-25 du/ac) Total No. Acres: 66.4 No. of Potential Buildout Units: 1,411 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 33.2 33.2 Maximum density permitted (units/acre) 25 25 Maximum potential units constructed during this phase 706 706 Number of total potential units constructed at phase buildout 706 1,411 Calculation of Annual Motor Vehicle In -Lieu Revenue Average No. of Persons Per Household' 2.08 2.01 Potential Population at Phase Buildout 1,467 2,935 Anticipated Annual Per Capita Revenue $3.21 $3.21 Annual Motor Vehicle In -Lieu Revenue at phase buildout $4,710 $9,421 2010 U.S. Census. Page 20 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh. In -Lieu Motor Vehicle In -Lieu Revenue Summary Table Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Total Annual Motor Vehicle In -Lieu Revenue from existing residential development at phase buildout $28,890 $28,890 ....from future PD Medium Density residential development $3,215 $6,430 ...from future Riv. Co. Medium -High Density residential development $699 $1,398 ...from future Mirasera High Density residential development $770 $1,539 ...from future Mirasera Mixed Use residential development $477 $953 ...from future Mirasera Very High Density residential development $4,710 $9,421 Total Annual Motor Vehicle In -Lieu Revenue from all develo meat $38,7611 $48,632 Page 21 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh. In -Lieu Gas Tax Revenue - Scenario A From Existing Development Land Use Designation: SP-281 Residential Total No. Acres: 792.0 No. of Existing Units: 4,985 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed at phase buildout 792 792 Number of total units developed at phase buildout 4,9851 4,985 Calculation of Annual Gas Tax Revenue Existing Population' 9,000 9,000 Anticipated Annual Per Capita Revenue $23.37 $23.37 Annual Motor Vehicle In -Lieu Revenue at phase buildout $210,330 $210,330 ' Estimated population provided by Paul Brady, Sun City Palm Desert Community Association, October 2011. From Future Development Land Use Designation: PD Medium Density Residential (4-10 Buildout Phase du/ac) Total No. Acres: 113.3 Phase I Phase II No. of Potential Buildout Units: 963 (Yrs 1-5) (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 56.7 56.7 Maximum density permitted (units/acre) 10 10 Maximum potential units constructed during this phase 482 482 Number of total potential units constructed at phase buildout 482 963 Calculation of Annual Gas Tax Revenue Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 1,002 2,003 Anticipated Annual Per Capita Revenue $23.37 $23.37 Annual Motor Vehicle In -Lieu Revenue at phase buildout $23,407 $46,813 V 2010 U.S. Census. Page 22 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh. In -Lieu From Future Development Land Use Designation: Riv. Co. Medium -High Density Residential (5-8 du/ac) Total No. Acres: 30.8 No. of Potential Buildout Units: 209 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 15.4 15.4 Maximum density ermitted (units/acre) 8 8 Maximum potential units constructed during this phase 105 105 Number of total potential units constructed at phase buildout 105 209 Calculation of Annual Gas Tax Revenue Average No. of Persons Per Household` 2.08 2.08 Potential Population at Phase Buildout 218 436 Anticipated Annual Per Capita Revenue $23.37 $23.37 Annual Motor Vehicle In -Lieu Revenue at phase buildout $5,090 $10,181 ' 2010 U.S. Census. From Future Develo Land Use Designation: Mirasera High Density Residential (12 Buildout Phase du/ac) Total No. Acres: 22.6 Phase I Phase II No. of Potential Buildout Units: 230 (Yrs 1-5) (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 11.3 11.3 Maximum density permitted (units/acre) 12 12 Maximum potential units constructed during this phase 115 115 Number of total potential units constructed at phase buildout 115 231 Calculation of Annual Gas Tax Revenue Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 240 479 Anticipated Annual Per Capita Revenue $23.37 1 $23.37 Annual Motor Vehicle In -Lieu Revenue at phase buildout $5,603 $11,205 1' 2010 U.S. Census. Page 23 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh. In -Lieu From Future Development Land Use Designation: Mirasera Mixed Use Residential (16 du/ac) Total No. Acres: 10.5 No. of Potential Buildout Units: 142 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 5.3 5.3 Maximum density permitted (units/acre) 16 16 Maximum potential units constructed during this phase 71 71 Number of total potential units constructed at phase buildout 71 143 Calculation of Annual Gas Tax Revenue Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 149 297 Anticipated Annual Per Capita Revenue $23.37 $23.37 Annual Motor Vehicle In -Lieu Revenue at phase buildout $3,471 $6,941 ' 2010 U.S. Census. From Future Land Use Designation: Mirasera Very High Density Buildout Phase Residential (20-25 du/ac) Total No. Acres: 66.4 Phase I Phase II No. of Potential Buildout Units: 1,411 (Yrs 1-5) (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 33.2 33.2 Maximum density permitted (units/acre) 25 25 Maximum potential units constructed during this phase 706 706 Number of total potential units constructed at phase buildout 706 1,411 Calculation of Annual Gas Tax Revenue Average No. of Persons Per Household' 2.08 2.08 Potential Population at Phase Buildout 1,467 2,935 Anticipated Annual Per Capita Revenue $23.37 $23.37 Annual Motor Vehicle In -Lieu Revenue at phase buildout $34,294 $68,588 ' 2010 U.S. Census. Page 24 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Motor Veh. In -Lieu Gas Tax Revenue Summary Table Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Total Annual Gas Tax Revenue from existing residential development at phase buildout $210,330 $210,330 ...from future PD Medium Density residential development $23,407 $46,813 ...from future Riv. Co. Medium -High Density residential development $5,090 $10,181 ...from future Mirasera High Density residential development $5,603 $11,205 ...from future Mirasera Mixed Use residential development $3,471 $6,941 ...from future Mirasera Very High Density residential development $34,294 $68,588 Total Annual Gas Tax Revenue from all development at Phase Buildout 1 $282,1951 $354,059 Page 25 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. A Fire Tax Prop. A Fire Tax Revenue - Scenario A From Existing Conditions Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Tax from Existing Residential Units Number of residential units existing at end of phase 4,985 4,985 Prop. A Fire Tax (per unit)' $60 $60 Total Prop. A Fire Tax revenue from existing residential development $299,100 $299,100 Tax from Existing Non -Residential Development Less Than 2,600 sq. ft. No. of buildings less than 2,600 sq. ft.' 80 80 Prop. A Fire Tax (per unit)' $60 $60 Total Prop. A Fire Tax revenue from existing non-residential development less than 2,600 sq. ft. $4,800 $4,800 Tax from Existing Non -Residential Development Greater Than 2,600 sq. ft. See footnote below' Tax From Vacant Parcels No. of vacant parcels 50 50 Prop. A Fire Tax rate(perparcel)' $30 $30 Total Prop. A Fire Tax revenue for vacant parcels $1,500 $1,500 Total Prop. A Fire Tax Revenue - Existing Conditions $305,400 $305,400 'Tax rates provided by Willdan Financial Services. 2 Terra Nova estimate based on aerial photos and commercial characteristics in annexation area. 3 Prop. A Fire Taxes for non-residential development greater than 2,600 sq. ft. in area are building -specific and determined using a formula that accounts for actual square footage and the use of fire restrictive building materials. These parameters are unknown for larger existing non-residential buildings in the annexation area, including 3 golf clubhouses, a supermarket, and a hotel. This analysis, therefore, is conservative as actual Prop. A Fire Tax revenues will be greater than those shown here. From Future Residential Development Land Use: PD Medium Density Residential,(4-10 du/ac) No. of acres: 113.3 I No. ofpotential buildout dwelling units: 963 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) No. of Dwelling Units built during this phase 481.5 481.5 Total Dwelling Units at phase buildout 481.5 963 Prop. A Fire Tax (per SF dwelling unit) $60 $60 Total Prop. A Fire Tax revenue from future residential development $28,890 $57,780 ' Tax rates provided by Willdan Financial Services. 26 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. A Fire Tax From Future Residential Development Land Use: Medium -High Density Residential (5-8 du/ac) (Riv. Co. designation) No. of acres: 30.8 No. ofpotential buildout dwelling units: 209 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) No. of Dwelling Units built during this phase 104.5 104.5 Total Dwelling Units at phase buildout 104.5 209 Prop. A Fire Tax (per SF dwelling unit)' $60 $60 Total Prop. A Fire Tax revenue from future residential development $6,270 $12,540 Tax rates provided by Willdan Financial Services. From Future Residential Development Land Use: Mirasera High Density Residential (12 du/ac) No. of acres: 22.6 No. ofpotential buildout dwelling units: 230 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) No. of Dwelling Units built during this phase 115 115 Total Dwelling Units at phase buildout 115 230 Prop. A Fire Tax(per SF dwelling unit)' $60 $60 Total Prop. A Fire Tax revenue from future residential development $6,9001 $13,800 'Tax rates provided by Willdan Financial Services. From Future Residential Development Land Use: Mirasera Mixed Use Resr enha ( ac) No. of acres: 10.5 No. ofpotential buildout dwelling units: 142 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) No. of Dwelling Units built during this phase 71 71 Total Dwelling Units at phase buildout 71 142 Prop. A Fire Tax (per SF dwelling unit)' $45 $45 Total Prop. A Fire Tax revenue from future residential development $3,1951 $6,390 Tax rates provided by Willdan Financial Services. From Future Residential Development Land Use: Mirasera Very High Density Residential (20-25 du/ac) No. of acres: 66.4 No. ofpotendal buildout dwelling units: 1,411 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) No. of Dwelling Units built during this phase 705.5 705.5 Total Dwelling Units at phase buildout 705.5 1411 Prop. A Fire Tax (per SF dwelling unit)' $45 $45 Total Prop. A Fire Tax revenue from future residential development $31,748 $63,495 Tax rates provided by Willdan Financial Services. 27 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. A Fire Tax From Future Commercial Development Land Use: Commercial (includes hotel) No. of acres: 34.4 No. of potential square feet: 399,954 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Number of acres to be developed during this phase 17.2 17.2 Conversion of acres to number of lots/buildings Average acreage of developed commercial lot in annexation area' 1.3 1.3 Projected number of commercial buildings built during this phase 22 22 Projected number of commercial buildings built at phase buildout 22 45 Calculation of Fire Tax Revenue Prop. A Fire Tax (per commercial building)2 $60 $60 Total Prop. A Fire Tax revenue from future commercial development $1,342 $2,683 ' Average acreage of multiple developed commercial lots in annexation area. 'Tax rates provided by Willdan Financial Services. This analysis assumes that all future commercial development will be less than 2,600 sq. ft. and assessed a $60/building fee. Future development that is larger in size will be assessed a higher fee that is based on a formula which considers actual square footage and the use of fire restrictive building materials. These parameters are building -specific and are unknown at this time. From Future Business Park Development Land Use: Business Park No. of acres: 46.8 No. of potential square feet: 448,494 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Number of acres to be developed during this phase 23.4 23.4 Conversion of acres to number of lots/buildings Average acreage of developed commercial lot in annexation area' 1.3 1.3 Projected number of commercial buildings built during this phase 30 30 Projected number of commercial buildings built at phase buildout 30 61 Calculation of Fire Tax Revenue Prop. A Fire Tax(per commercial buildin )2 $60 $60 Total Prop. A Fire Tax revenue from future commercial development $1,825 $3,650 'Average acreage of multiple developed commercial lots in annexation area. z Tax rates provided by Willdan Financial Services. This analysis assumes that all future business park development will be less than 2,600 sq. ft. and assessed a $60/building fee. Future development that is larger in size will be assessed a higher fee that is based on a formula which considers actual square footage and the use of fire restrictive building materials. These parameters are building -specific and are unknown at this time. 28 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. A Fire Tax From Future Industrial Development Land Use: Industrial No. of acres: 26.6 No. ofpotential square feet: 254,913 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Number of acres to be developed during this phase 13.3 13.3 Conversion of acres to number of lots/buildings Average acreage of developed commercial lot in annexation area` 1.3 1.3 Projected number of commercial buildings built during this phase 17 17 Projected number of commercial buildings built at phase buildout 17 35 Calculation of Fire Tax Revenue Prop. A Fire Tax (per commercial buildin )Z $60 $60 Total Prop. A Fire Tax revenue from future commercial development $1,037 $2,075 'Average acreage of multiple developed commercial lots in annexation area. z Tax rates provided by Willdan Financial Services. This analysis assumes that all future industrial development will be less than 2,600 sq. ft. and assessed a $60/building fee. Future development that is larger in size will be assessed a higher fee that is based on a formula which considers actual square footage and the use of fire restrictive building materials. These parameters are building -specific and are unknown at this time. 29 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Prop. A Fire Tax Prop. A Fire Tax Revenue - Summary Table Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Potential Annual Prop. A Fire Tax Revenue from existing development $305,400 $305,400 ...from future PD Medium Density residential development $28,890 $57,780 ...from future Riv. Co. Medium High Density residential dev. $6,270 $12,540 ...from future Mirasera High Density residential development $6,900 $13,800 ...from future Mirasera Mixed Use residential development $3,195 $6,390 ...from future Mirasera Very High Density residential dev. $31,748 $63,495 ...from future commercial development $1,342 $2,683 ...from future business park development $1,825 $3,650 ...from future industrial development $1,037 $2,075 Total Annual Prop. A Fire Tax Revenue from all development (at phase buildout) 1 $386,607 $467,813 30 of 48 New Construction Tax Revenue - Scenario A Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) New Residential Development Number of dwelling units constructed durin this phase 1478 1478 Average square foota a of new dwellin unit 1,500 1,500 New Construction Tax rate (per square foot $0.40 $0.40 Total New Construction Tax collected on new residential development $886, 000 $886,500 New Commercial Development Number of square feet constructed during this phase 149,977 149,977 New Construction Tax rate(per square foot)' $0.40 $0.40 Total New Construction Tax collected on new commercial development $59,991 $59,991 New Commercial (Hotel) Development Number of square feet constructed during this base 50,0001 50,000 New Construction Tax rate(per square foot z $0.401 $0.40 Total New Construction Tax collected on new hotel development $20,000 $20,000 New Business Park Development Number of square feet constructed during thisphase 224,247 224,247 New Construction Tax rate (per square foot $0.40 $0.40 Total New Construction Tax collected on new business park development $89,699 $89,699 New Industrial Development Number of square feet constructed dun this phase 127,457 127,457 New Construction Tax rate (pers uare foot) $0.40 $0.40 Total New Construction Tax collected on new industrial development $50,983 $50,983 Total New Construction Tax Revenue at h!se buildout $1,107,172 $1,107,172 ' Terra Nova estimate based on permitted density and local residential characteristics. ' Palm Desert Building & Safety Dept. Page 31 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: City DIF Fees Art in Public Places Fund Revenue - Scenario A TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: City DIF Fees Buildout Phase Phase I Phase II New Single -Family Residential Development Number of dwelling units constructed during this phase 701 701 Average value(per unit ' $249,123 $249,123 Total value of dwelling units at phase buildout $174,635,223 $174,635,223 1 % of valuation of all new dwelling units' $1,746,352 $1,746,352 0.25 of 1% valuation $436,588 $436,588 Total Art in Public Places fees collected on new SF residential development $436,588 $436,588 New Multi -Family Residential Development Number ofdwelling units constructed during this phase 777 777 Averaizevalue (per unit)' $104,425 $104,425 Total value of dwelling units at phase buildout $81,086,013 $81,086,013 1% of valuation of all new dwelling units' $810,860 $810,860 0.25 of 1% valuation $202,715 $202,715 Total Art in Public Places fees collected on new MF residential development $202,7151 $202,715 New Commercial Development Number of square feet constructed during this phase 149,977 149,977 Averse value (per square foot)' $73 $73 Total value of commercial dev. at phase buildout $10,948,321 $10,948,321 1% of valuation of all new commercial development $109,483 $109,483 0.50 of 1% valuation $54,742 $54,742 Total Art in Public Places fees collected on new commercial development $54,742 $54,742 New Hotel Development Number of rooms constructed during this phase 75 75 Average value (per room) ° $68,512 $68,512 Total value of hotel dev, at phase buildout $5,138,400 $5,138,400 l% of valuation of all new hotel development $51,384 $51,384 0.50 of 1% valuation $25,692 $25,692 Total Art in Public Places fees collected on new hotel development $25,6921 $25,692 New Business Park Development Number of square feet stru concted during this phase 224,247 224,247 Averse value (per s uare foot) $169 $169 Total value of commercial dev. at phase buildout $37,897,743 $37,897,743 1%ofvaluationofallnew commercial development $378,977 $378,977 0.50 of 1% valuation $189,489 $189,489 Total Art in Public Places fees collected on new commercial development 1 $189,489 $189,489 New Industrial Development Number of square feet constructed during this phase 149,977 149,977 Averse value (per square foot' $73 $73 Total value of commercial dev. at phase buildout $10,948,321 $10,948,321 1% of valuation of all new commercial development $109,483 $109,483 0.50 of 1% valuation $54,742 $54,742 Total Art in Public Places fees collected on new commercial development $54,7421 $54,742 Total Art in Public Places Revenue from all new development at phase buildout $963,967 $963,967 'Assumes all dwelling units are in a development and, therefore, are not exempt for the first $100,000 of valuation. 'Based on compilation of building permit data provided by Palm Desert Building & Safety Dept., October 2011. ' Based on comparable existing highway -serving hotel in the annexation area, per Riv. Co. Assessor's records, Oct. 2011. Page 32 of 48 Low Income Housing Mitigation Fee Revenue - Scenario A Buildout Phase Phase I Yrs 1-5) Phase II rs 6-10 New Commercial Development Number of square feet constructed during this phase 149,9771 149,977 Low Income Housing Mitigation Fee rate (per square foot) $1 $ l Total Fees from Commercial Development at phase buildout $149,9771 $149,977 New Hotel Development Number of rooms constructed during this phase 751 75 Low Income Housing Mitigation Fee rate(per room $620 $620 Total Fees from Hotel Development at phas buildout $46,5001 $46,500 New Business Park Development Number of square feet constructed during this phase 224,247 224,247 Low Income Housing Mitigation Fee rate (per square foot) $0.501 $0.50 Total Fees from Business Park Development at phase buildout 1 $112,1241 $112,124 New Industrial Development Number of square feet constructed during this phase 127,457 127,457 Low Income Housing Mitigation Fee rate(per square foot)' $0.33 $0.33 Total Fees from Industrial Development at phase buildout $42,061 $42,061 Total Low Income Housing Mitigation Fees collected at phase buildout $350,661 $350,661 Palm Desert Building & Safety Dept. Child Care Facilities Impact Mitigation Fee Revenue - Scenario A Buildout Phase Phase I (Yrs 1-5) Phase II Yrs 6-10) New Commercial Development Number of s uare feet constructed durin this hase 149,977 149,977 foot) $0.90 $0.90 Total Fees collected from commercial development $134,979 $134,979 New Hotel Development Number of s uare feet constructed durin this hase 50,000 50,000 foot), $0.77 $0.77 Total Fees collected from hotel development $38,500 $38,500 New Business Park Development Number of s uare feet constructed durin this hase 224,247 224,247 qu— foot)` $1.15 $1.15 Total Fees collected from business park develo ment $257,884 $257,884 New Industrial Development Number of s uare feet constructed durin this hase 127,4571 127,457 foot ' $0.47 $0.47 Total Fees collected from industrial development $59,905 $59,905 Total Child Care Facilities Impact Mitigation Fee Revenue collected from all new development at phase buildout $491,268 $491,268 Palm Desert Building & Safety Dept. Page 33 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: City DIF Fees Traffic Sianals Fund Revenue - Scenario A TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: City DIF Fees Buildout Phase Phase 1 (Yrs 1-5) Phase II (Yrs 6-10) New Residential Development Number ofdwelling units constructed during this phase 1478 1478 Traffic Signals Fund fee (per dwelling unit) $50 $50 Total Traffic Signal fees collected on new residential development at phase buildout $73,875 $73,875 New Commercial Development Number of square feet constructed during this phase 149,977 149,977 Traffic Signal Fund fee (per 1,000 square feet) $500 $500 Total Traffic Signal Funds collected on new commercial development at phase buildout $74,989 $74,989 New Hotel Development Number of square feet constructed during this phase 50,000 50,000 Traffic Signal Fund fee(per 1,000 square feet)' $500 $500 Total Traffic Signal Funds collected on new commercial development at phase buildout $25,000 $25,000 New Industrial Development Number of acres constructed during this phase 13.3 13.3 Traffic Signal Fund fee (per 1,000 square feet)' $500 $500 Total Traffic Signal Funds collected on new commercial development at phase buildout $6,650 $6,650 Total Traffic Signal Fund Revenues at phase buildout $180,514 $180,514 Palm Desert Public Works Dept. Planned Drainage Fund Revenue - Scenario A Buildout Phase Phase I Yrs 1-5) Phase Il Yrs 6-10 All New Development Number of acres developed durin thisphase 175.7 175.7 Planned Drainage Fund fee eracre $I,000 $1,000 Total Planned Drainage Fund Revenue at phase buildout 1 $175,7001 $175,700 Palm Desert Public Works Dept. Park & Recreation Facilities Fund Revenue - Scenario A Buildout Phase Phase I Yrs 1-5) Phase II Yrs 6-10 New Residential Development (subdivisions only) Number ofdwelling units constructed durin this phase 1478 1478 Park & Recreation Facilities Fee (step 1) 15.88 15.88 Current Value of Residential Land (per acre) $114,887 $114,887 Park & Recreation Facilities Fee(step 2 $1,823,916 $1,823,916 Total Park & Recreation Facilities Fund Revenue at phase buildout $1,823,916 $1,823,916 ' This fee applies only to residential subdivisions. For analysis purposes, it is assumed that all acres designated for residential development will be subdivided. 'Palm Desert Public Works Dept. 'Average land value of multiple vacant parcels designated for residential development, from Riverside County Assessor's data, October 2011. Page 34 of 48 Costs of General Government - Scenario A From Existing Residential Develooment TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land Use: SP-281 Residential No. of Acres: 792 No. of Existing Dwelling Units: 4,985 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Number of acres developed at phase buildout 792 792 Number of dwellin units existing at phase buildout 4,985 4,985 Existing Population' 9,000 9,000 Cost of General Government (per capita)' $282 $282 Total annual cost of General Government at phase buildout $2,538,0001 $2,538,000 ' Estimate provided by Paul Brady, Sun City Palm Desert Community Association, October 2011. Terra Nova staff estimate based on population in City of Palm Desert and City Budget, General Government expenditures 2011-2012. From Future Residential Develooment Lana use Designation: FV mealum Density Resulentral- dulac) No. of Acres: 113.3 No. of Buildout Units: 963' Buildout Phase Phase I Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phaseMbuildout482 56.7 Maximum densitypermitted units/acre 10 Maximum potential units constructed duringt 482 Number of total potential units constructed at 963 Average number of persons per household' 2.08 Total no. of otential residents at phase buildo 2,003 Calculatin Annual Costs of General Government Cost of General Government er capita) $282 $282 Total annual cost of General Government at phase buildout 1 $282,4431 $564,887 'Assumes future residential development occurs at 85% of the maximum density permitted. ' 2010 U.S. Census. ' Terra Nova staff estimate based on population in City of Palm Desert and City Budget, General Government expenditures 2011.2012. From Future Residential Develooment Land Use Designation: Riu Co. Medium -High Density Residential (5-8 dulae) No. of Acres: 30.8 No. of Buildout Units: 209` Buildout Phase Phase I Yrs 1-5) Phase II Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 15.4 15.4 Maximum density permitted (units/acre) 8 8 Maximum potential units constructed during thisphase' 105 105 Number of total potential units constructed at phase buildout 105 209 Average number of persons per household' 2.08 2.08 Total no. ofpotential residents at phase buildout 218 436 Calculating Annual Costs of General Government Cost of General Government (per capita)' $282 $282 Total annual cost of General Government at phase buildout 1 $61,425 $122,849 'Assumes future residential development occurs at 85% of the maximum density permitted. 2010 U.S. Census. ' Tema Nova staff estimate based on population in City of Palm Desert and City Budget, General Government expenditures 2011-2012. Page 35 of 48 From Future Residential Development Land Use Designation: Mirasera High Density Residential (12 dulac) No. of Acres: 22.6 No. of Buildout Units: 13t Buildout Phase Phase I Yrs 1-5) Phase II Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 11.3 11.3 Maximum density permitted units/acre 12 12 Maximum potential units constructed during thisphase' 115 115 Number of total potential units constructed at phase buildout 115 231 Average number of persons per household' 2.08 2.08 Total no. ofpotential residents at phase buildout 240 479 Calculating Annual Costs of General Government Cost of General Government(per capita)' $282 $282 Total annual cost of General Government at phase buildout 1 $67,6071 $135,214 'Assumes future residential development occurs at 85 % of the maximum density permitted. ' 2010 U.S. Census. 'Tema Nova staff estimate based on population in City of Palm Desert and City Budget, General Government expenditures 2011-2012. From Future Residential Development Land Use Designation: Mirasera Mixed Use Residential (16 dulac) No. of Acres: 10.5 No. of Buildout Units: 142' Buildout Phase Phase I (Yrs 1-5) Phase II 1 (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 5.3 5.3 Maximum density permitted (units/acre) 16 16 Maximum potential units constructed during thisphase' 71 71 Number of total potential units constructed at phase buildout 71 143 Average number of persons per household' 2.08 2.08 Total no. of potential residents at phase buildout 149 297 Calculat ng Annual Costs of General Government Cost of General Government (per capita)' $282 $282 Total annual cost of General Government at hase buildout 1 $41,8801 $83,761 ' Assumes future residential development occurs at 85% of the maximum density permitted. ' 2010 U.S. Census. ' Terra Nova staff estimate based on population in City of Palm Desert and City Budget, General Government expenditures 2011-2012. From Future Residential Development Land Use Designation: Mirasera Very High Density Residential (20-25 dulac) No. ofAcres: 66.4 No. of Buildout Units: 1,411`(Yrs Buildout Phase Phase I 1-5) Phase Il Yrs 6-10 Land Use Buildout Data Number of acres developed during phase 33.2 33.2 Maximum density permitted (units/acre) 25 25 Maximum potential units constructed during thisphase' 706 706 Number of total potential units constructed at phase buildout 706 1,411 Average number of persons per househol& 2.08 2.08 Total no. of potential residents at phase buildout 1,467 2,935 Calculating Annual Costs of General Government Cost of General Government (per capita)' $282 $282 Total annual cost of General Government at phase buildout 1 $413,8181 $827,636 'Assumes future residential development occurs at 75% of the maximum density permitted. Page 36 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs From Existing Commercial Development TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land se: Commercial (includes hotel & Commercial -Tourist) No. of Acres: 80.0 No. o Existing Square Footage. 570,117 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed at phase buildout 80.01 80.0 Calculating Annual Costs of General Government (City-wide Services) Per acre cost of General Government $29.80 $29.80 Total cost of General Government at phase buildout $2,384.17 $2,384.17 Calculating Annual Costs of General Government (Municipal Services) Per acre cost of General Government (Municipal Services)' $0.24 $0.24 Total cost of General Government (Municipal Services) at phase buildout 1 $19.39 $19.39 Calculating Annual Costs of General Government (Support Services) Per acre cost of General Government (Support Services Services) $63.14 $63.14 Total cost of General Government (Support Services Services) at phase buildout $5,050.95 $5,050.95 Total Annual Costs of Government Services at Phase Buildout $7,454.52 $7,454.52 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. From Existing Development Land Use. Industrial - Light No. of Acres: 56.6 No. of Existing Square Footage: 542,409 Buildout Phase Phase I (Yrs 1-5) Phase II 1 (Yrs 6-10) Land Use Buildout Data Number of acres developed at phase buildout 56.6 56.6 Calculating Annual Costs of General Government (City-wide Services) Per acre cost of General Government 1 $29.80 $29.80 Total cost of General Government atphase buildout 1 $1,686.80 $1,686.80 Calculating Annual Costs of General Government (Municipal Services) Per acre cost of General Government (Municipal Services)' $0.24 $0.24 Total cost of General Government (Municipal Services) at phase buildout $13.72 $13.72 Calculating Annual Costs of General Government (Support Services) Per acre cost of General Government (Support Services Services) $63.14 $63.14 Total cost of General Government (Support Services Services) at phase buildout $3,573.55 $3,573.55 Total Annual Costs of Government Services at Phase Buildout $5,274.07 $5,274.07 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. Page 37 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land Use: Commercial No. ofAcres: 31.3 No. o Potential Square Footage: 299,954 Buildout Phase Phase I Yrs 1-5 Phase II Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase 15.71 15.7 Number of acres developed at phase buildout 15.71 31.3 Calculating Annual Costs of General Government (City-wide Services) Per acre cost of General Government' 1 $29.80 $29.80 Total cost of General Government at phase buildout 1 $466.401 $932.81 Calculating Annual Costs of General Government (Municipal Services) Per acre cost of General Government (Municipal Services)' $0.241 $0.24 Total cost of General Government (Municipal Services) at phase buildout 1 $3.79 $7.59 Calculating Annual Costs of General Government (Support Services) Per acre cost of General Government (Support Services Services) $63.14 $63.14 Total cost of General Government (Support Services Services) at phase buildout $988.09 $1,976.19 Total Annual Costs of Government Services at Phase Buildout $1,458.29 $2,916.58 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. From Future Hatel Develnnment Land Use: Commercial (Hotel) No. ofAcres: 3.1 No. o Potential Square Footage: 90,000 Buildout Phase Phase I (Yrs 1-5) Phase II 1 (Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase 1.6 1.6 Number of acres developed at phase buildout 1.61 3.1 Calculating Annual Costs of General Government (City-wide Services) Per acre cost of General Govemment $29.80 $29.80 Total cost of General Government at phase buildout $46.191 $92.39 Calculating Annual Costs of General Government (Munici al Services) Per acre cost of General Government (Municipal Services) $0.24 $0.24 Total cost of General Government (Municipal Services) at phase buildout $0.38 $0.75 Calculating Annual Costs of General Government (Support Services) Per acre cost of General Government (Support Services Services) $63.14 $63.14 Total cost of General Government (Support Services Services) at phase buildout $97.86 $195.72 Total Annual Costs of Government Services at Phase Buildout $144.43 $288.86 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. From Fnh:re Rnsineaa Park Develnnment Land se: Business Park No. ofAcres: 46.8 No. of Potential Square Footage: 448,494 Buildout Phase Phase I (Yrs 1-5) Phase It (Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase 23.41 23.4 Number of acres developed at phase buildout 1 23.41 46.8 Calculating Annual Costs of General Government (City-wide Services) Per acre cost of General Government' I $29.80 $29.80 Total cost of General Government at phase buildout 1 $697.371 $1,394.74 Calculating Annual Costs of General Government (Municipal Services) Per acre cost of General Govemment (Municipal Services)' 1 $0.241 $0.24 Total cost of General Government (Municipal Services) at phase buildout 1 $5.67 $11.35 Calculating Annual Costs of General Government (Support Services) Per acre cost of General Government (Support Services Services $63.14 $63.14 Total cost of General Government (Support Services Services) at phase buildout $1,477.40 $2,954.81 Total Annual Costs of Government Services at Phase Buildout $2,180.43 $4,360.89 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. Page 38 of 48 From Future Industrial Develoament TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land se: Industrial No. ofAcres: 26.6 No. of Potential Square Footage: 254,913 Buildout Phase . Phase I (Yrs 1-5) Phase li (Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase I T.31 13.3 Number of acres developed at phase buildout 13.31 26.6 Calculating Annual Costs of General Government (City-wide Services) Per acre cost of General Government 1 $29.80 $29.80 Total cost of General Government at phase buildout 1 $396.371 $792.74 Calculating Annual Costs of General Government (Municipal Services) Per acre cost of General Government (Munici al Services) 1 $0.241 $0.24 Total cost of General Government (Municipal Services) at phase buildout 1 $3.22 $6.45 Calculating Annual Costs of General Government (Support Services) Per acre cost of General Government (Support Services Services $63.14 $63.14 Total cost of General Government (Support Services Services) at phase buildout $839.72 $1,679.44 Total Annual Costs of Government Services at Phase Buildout $1,239.31 $2,478.63 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for CommerciaUlndustrial uses, Table A.2. Costs of General Government Summary Table Buildout Phase Phase I Phase 11 Residential development Total Annual Govt. Costs from existing residential development at phase buildout $2,538,000 $2,538,000 ...from future PD Medium Density residential development $282,443 $564,887 ...from future Riv. Co. Medium -High Density resid. dev. $61,425 $122,849 ...from future Mirasera High Density resididential dev. $67,607 $135,214 ...from future Mirasera Mixed Use residential development $41,880 $83,761 ...from future Mirasera Very High Density residential dev. 1 $413,8181 $827,636 Non -Residential development Total Annual Cost from existing Commercial Development at phase buildout $7,455 $7,455 ...from existing Industrial -Light development $5,274 $5,274 ...from future commercial development $1,458 $2,917 ...from future commercial -hotel development $144 $289 ...from future business park development $2,180 $4,361 ...from future industrial development $1,239 $2,479 Total Annual Govt. Costs at Phase Buildout $3,413,867 $4,295,120 Page 39 of 48 Costs of Police Protection - Scenario A From Existing Residential Development TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land Use.- SP-281 Residential No. of Acres: 792 No. of Existing Dwelling Units: 4,985 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Number of acres developed at phase buildout 792 792 Number of dwellin units existing at phase buildout 4,985 4,985 [Lxisting Population 9,000 9,000 Cost of Police Protection(per capita) $3391 9 Total annual cost of Police Protection at phase buildout 1 $3,051,0001 $3,051,000 ' Estimate provided by Paul Brady, Sun City Palm Desert Community Association, October 2011. 'Tema Nova staff estimate based on population in City of Palm Desert and City Budget, Police Protection expenditures 2011- 2012. From Future Residential Development Lana Use esrgna ton: FV Medium Venstry Kesulenual- du/ae) No. of Acres: 113.3 No. of Buildout Units: 963' Buildout Phase Phase I (Yrs le5) Phase 11 (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 56.7 56.7 Maximum density permitted units/acre 10 10 Maximum potential units constructed during thisphase' 482 482 Number of total potential units constructed at phase buildout 482 963 Average number of ersons per household 2.08 2.08 Total no. of potential residents at phase buildout 1,002 2,003 Calculating Annual Costs of Police Protection Cost of Police Protection(per capita)' $339 $339 Total annual cost of Police Protection at phase buildout $339,5331 $679,066 'Assumes future residential development occurs at 85% of the maximum density permitted. ' 2010 U.S. Census. ' Terra Nova staff estimate based on population in City of Palm Desert and City Budget, Police Protection expenditures 2011- 2012. From Future Residential Development Land Use Designation: Riv. Co. Medium -High Density Residential (5-8 du/ac) No. ofAcres: 30.8 No. of Buildout Units: 20 Buildout Phase Phase I Yrs 1-5)(Yrs Phase II 6-10) Land Use Buildout Data Number of acres developed during phase 15.4 15.4 Maximum density permitted units/acre 8 8 Maximum potential units constructed during thisphase' 105 105 Number of total potential units constructed at phase buildout 105 209 Average number of persons per household' 2.08 2.08 Total no. of potential residents at phase buildout 218 436 Calculatin Annual Costs of Police Protection Cost of Manual (per capita)' $339 $339 Total annual cost of Police Protection at phase buildout $73,840 $147,680 'Assumes future residential development occurs at 85% of the maximum density permitted. ' 2010 U.S. Census. ' Tetra Nova staff estimate based on population in City of Palm Desert and City Budget, Police Protection expenditures 2011- 2012. Page 40 of 48 I Frnm Anfi— RnaW—H.l navalnnment TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land Use Designation: Mirasera High Density Residential (11 dalae) No. ofAcres: 22.6 No. of Buildout Units: 230' Buildout Phase Phase I Yrs 1-5)(Yrs Phase II 6-10) Land Use Buildout Data Number of acres developed during phase 11.3 11.3 Maximum density permitted (units/acre) 12 12 Maximum potential units constructed during thisphase' 115 115 Number of total potential units constructed at phase buildout 115 231 Average number ofliersons per householdZ 2.08 2.08 Total no. ofpotential residents at phase buildout 240 479 Calculating Annual Costs of Police Protection Cost of Police Protection(per capita)' $339 $339 Total annual cost of Police Protection at hase buildout $81,2721 $162,544 'Assumes future residential development occurs at 85% of the maximum density permitted. ' 2010 U.S. Census. ' Terra Nova staffestimate based on population in City of Palm Desert and City Budget, Police Protection expenditures 2011- 2012. From Future Residential Develnnment Land Use Designation: Mirasera Mixed Use Residential (16 dalac) No. ofAcres: 10.5 No. of Buildout Units: 142' Buildout Phase Phase I Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during phase 5.3 5.3 Maximum density permitted units/acre 16 16 Maximum potential units constructed during thisphase' 71 71 Number of total potential units constructed at phase buildout 71 143 Average number ofpersons per household' 2.08 2.08 Total no. of potential residents at phase buildout 149 297 lCalculating Annual Costs of Police Protection Cost of Police Protection (per capita)' $339 $339 Total annual cost of Police Protection at phase buildout 1 $50,346 $100,691 'Assumes future residential development occurs at 85% of the maximum density permitted. ' 2010 U.S. Census. ' Tema Nova staffestimate based on population in City of Palm Desert and City Budget, Police Protection expenditures 2011- 2012. l Frnm Firture Residential Develnnment Land Use Designation: Mirasera Very High Density Residential (10-25 dulac) No. ofAcres: 66.4 No. of Buildout Units: 1,411' Buildout Phase Phase I Yrs 1-5) Phase II Yrs 6-10 Land Use Buildout Data Number of acres developed during phase 33.2 33.2 Maximum density permitted (units/acre) 25 25 Maximum potential units constructed during thisphase' 706 706 Number of total potential units constructed at phase buildout 706 1,411 Average number of persons per household' 2.08 2.08 Total no. of potential residents at phase buildout 1,467 2,935 Calculatin Annual Costs of Police Protection Cost of Police Protection(per capita)' $339 $339 Total annual cost of Police Protection at phase buildout 1 $497,4621 $994,924 Assumes ruture resmennai aevctopment occurs at 63 ro or me maximum aensity permirrea. z 2010 U.S. Census. ' Terra Nova staff estimate based on population in City of Palm Desert and City Budget, Police Protection expenditures 2011- 2012. Page 41 of 48 From Existine Commercial Development TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land se: Commercial (includes hotel & Commercial -Tourist) No. ofAcres: 80.0 No. of Existing Square Footage: 570,117 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed at phase buildout 80.01 80.0 Calculating Annual Costs of Police Protection (City-wide Services) Per acre cost of Police Protection $417.21 $417.21 Total cost of Police Protection at phase buildout $33,376.80 $33,376.80 Calculating Annual Costs of Police Protection (Municipal Services) Per acre cost of Police Protection (Municipal Services $55.691 $55.69 Total cost of Police Protection (Municipal Services) at phase buildout $4,455.20 $4,455.20 Total Annual Costs of Police Protection at Phase Buildout $37,832.001 $37,832.00 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for CommerciaUIndustrial uses, Table A.2. From Existine Development Land Use: Industrial - Light No. ofAcres: 56.6 No. ofExisdng Square Footage: 542,409 Buildout Phase Phase I (Yrs 1-5) Phase II Yrs 6-10) Land Use Buildout Data Number of acres developed at phase buildout 56.6 56.6 Calculating Annual Costs of Police Protection (City-wide Services) Per acre cost of Police Protection' 1 $417.21 $417.21 Total cost of Police Protection at phase buildout 1 $23,614.09 $23,614.09 Calculating Annual Costs of Police Protection (Municipal Services) Per acre cost of Police Protection (Municipal Services)' $55.69 $55.69 Total cost of Police Protection (Municipal Services) at phase buildout $3,152.05 $3,152.05 Total Annual Costs of Police Protection at Phase Buildout $26,766.14 $26,766.14 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/industrial uses, Table A.2. Page 42 of 48 From Future Commercial Development TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land Use: CommerNa-F No. ofAcres: 31.3 No. of Potential Square Footage: 299,954 Buildout Phase Phase I Yrs 1-5 Phase II Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase 15.71 15.7 Number of acres developed at phase Buildout 1 15.71 31.3 Calculating Annual Costs of Police Protection (City-wide Services) Per acre cost of Police Protection' $417.21 $417.21 Total cost of Police Protection at phase buildout $6,529.34 $13,058.67 Calculating Annual Costs of Police Protection (Municipal Services) Per acre cost of Police Protection (Municipal Services)' $55.691 $55.69 Total cost of Police Protection (Municipal Services) at phase buildout $871.55 $1,743.10 Total Annual Costs of Police Protection at Phase Buildout $7,400.891 $14,801.77 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. From Future Hotel Development Land Use: Commercial ( ote) No. ofAcres: 3.1 No. of Potential Square Footage. 90,000 Buildout Phase Phase I Yrs 1-5) Phase II Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase 1.6 1.6 Number of acres developed at phase buildout 1 1.6 3.1 Calculating Annual Costs of Police Protection (City-wide Services) Per acre cost of Police Protection' 1 $417.211 $417.21 Total cost of Police Protection at phase buildout 1 $646.681 $1,293.35 Calculating Annual Costs of Police Protection (Municipal Services) Per acre cost of Police Protection (Municipal Services)' $55.69 $55.69 Total cost of Police Protection (Municipal Services) at phase buildout $86.32 $172.64 Total Annual Costs of Police Protection at Phase Buildout $733.00 $1,465.99 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. From Future Business Park Development Land se: Business Park No. ofAcres: 46.8 No. of Potential Square Footage: 448,494 Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase 23.41 23.4 Number of acres developed at phase buildout 1 23.41 46.8 Calculating Annual Costs of Police Protection (City-wide Services) Per acre cost of Police Protection' $417.21 $417.21 Total cost of Police Protection at phase buildout $9,762.711 $19,525.43 Calculating Annual Costs of Police Protection (Municipal Services) Per acre cost of Police Protection (Municipal Services)' $55.69 $55.69 Total cost of Police Protection (Municipal Services) at phase buildout $1,303.15 $2,606.29 Total Annual Costs of Police Protection at Phase Buildout $11,065.86 $22,131.72 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. Page 43 of 48 From Future Industrial Development TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Government Costs Land se: n ustrt No. ofAcres: 2&6 No. of Potential Square Footage: 254,913 Buildout Phase Phase l (Yrs 1-5) Phase lI (Yrs 6-10) Land Use Buildout Data Number of acres developed during this phase I T31 13.3 Number of acres developed at phase buildout 13.31 26.6 Calculating Annual Costs of Police Protection (City-wide Services) Per acre cost of Police Protection 1 $417.211 $417.21 Total cost of Police Protection at phase buildout 1 $5,548.891 $11,097.79 Calculating Annual Costs of Police Protection (Municipal Services) Per acre cost of Police Protection (Municipal Services) $55.69 $55.69 Total cost of Police Protection (Municipal Services) at phase buildout $740.68 $1,481.35 Total Annual Costs of Police Protection at Phase Buildout $6,289.57 $12,579.14 Cost factors based on Riverside County Guide General Fund Net Cost Multipliers for Commercial/Industrial uses, Table A.2. Costs of Police Protection Summary Table Buildout Phase Phase I Phase II Residential development Total Annual Police Protection Costs from existing residential development at phase buildout $3,051,000 $3,051,000 ...from future PD Medium Density residential development $339,533 $679,066 ...from future Riv. Co. Medium -High Density resid. dev. $73,840 $147,680 ...from future Mirasera High Density resididential dev. $81,272 $162,544 ...from future Mirasera Mixed Use residential development $50,346 $100,691 ...from future Mirasera Very High Density residential dev. $497,4621 $994,924 Non -Residential development Total Annual Cost from existing Commercial Development at phase buildout $37,832 $37,832 ...from existing Industrial -Light development $26,766 $26,766 ...from future commercial development $7,401 $14,802 ...from future commercial -hotel development $733 $1,466 ...from future business park development $11,066 $22,132 ...from future industrial development $6,290 $12,579 Total Annual Police Protection Costs at Phase Buildout 1 $4,137,575 $5,251,483 Page 44 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Roadway Maint. Costs Costs of Roadway Maintenance - Scenario A Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Roadway Data No. of existing public paved road miles in annexation area' 10.5 10.5 No. of future public paved road miles at phase buildoue 2.3 4.5 Total no. of paved road miles at phase buildout 12.8 15.0 Calculation of Roadway Costs Annual Costs of city-wide street maintenance, resurfacing Improvement Projects3 $6,091,625 $6,091,625 Number of paved road miles in current Palm Desert limits' 159 159 Annual Cost of Roadway Maintenance Per Road Mile $38,312 $38,312 Annual Cost of Roadway Maintenance at Phase Buildout $488,4781 $574,680 ' Terra Nova estimate based on aerial photography. Does not include private roads inside Sun City which will be privately maintained. 2 Expenditures for street maintenance & resurfacing, City of Palm Desert Budget, 2011-2012. ' "Comprehensive Annual Financial Report," City of Palm Desert Finance Dept., June 30,2010, p. 201. 4 Estimate based on 3.0 road miles in Mirasera and 1.5 miles elsewhere in annexation area. Page 45 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Fire, Ambulance Costs Costs of Fire Protection - Scenario A Buildout Phase Phase I Phase II (Yrs 1-5) (Yrs 6-10) Annual Costs of Operating Fire Station 81 at phase buildout' $1,500,000 $1,500,000 ' Chief Dorian Cooley, Palm Desert Fire Dept., October 2011. Costs of Ambulance Service - Scenario A Buildout Phase Phase II Phase I Phase I (Yrs 6- (Year 1) (Yrs 2-5) 10) Start-up costs for new ambulance service based out o Fire Station 81 (one-time fee) $190,000 $0 $0 Annual Costs of Ambulance Operation $940,944 $940,944 $940,944 Total Annual Costs of Ambulance Service at Phase Buildout $1,130,944 $940,944 $940,944 46 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Costs/Revenues Summary Table Total Potential Costs/Revenues Summary Table Scenario A Buildout Phase Phase I Yrs 1-5 Phase II rs 6-10 ANNUAL REVENUES General Fund: Property Tax $836,415 $947,279 Property Transfer Tax $112,171 $125,579 Local Sales Tax $1,874,090 $2,314,298 Transient Occupancy Tax $544,596 $776,804 Motor Vehicle In -Lieu Fees $38,761 $48,632 Subtotal Annual General Fund Revenue at Phase Buildout $3,406,032 $4,212,592 Restricted Funds: Highway Users Gas Tax $282,195 $354,059 Measure A $15,742 $19,440 Fire Fund - Prop. A Fire Tax $386,607 $467,813 Fire Fund - Structural Fire Tax $1,402,787 $1,588,723 Subtotal Annual Restr. Fund Revenue at Phase Buildout $2,087,331 $2,430,035 Total All Potential Revenues at Phase Buildout $5,493,362 $6,642,628 Interest Earnings: Historic Average Interest Rate on 90-Day Treasury Bills 4.39% 4.39% Anticipated Interest Earned on Revenues $241,159 $291,611 Total Potential Annual Revenue at Phase Buildout $5,734,521 $6,934,239 ANNUAL COSTS General Fund: Costs of General Government $3,413,867 $4,295,120 Costs of Police Protection $4,137,575 $5,251,483 Costs of Roadway Maintenance $488,478 $574,680 Subtotal Annual General Fund Costs at Phase Buildout $8,039,920 $10,121,283 Restricted Funds: Costs of Fire Protection $1,500,000 $1,500,000 Costs of Ambulance Service' $940,944 $940,944 Subtotal Annual Restricted Fund Costs at Phase Buildout $2,440,944 $2,440,944 Total Potential Annual Costs at Phase Buildout $10,480,864 $12,562,227 Potential Cashflow at Phase Buildout-$4,746,343-$5,627,988 Does not include one-time (year 1) start-up ambulance costs of $190,000. Page 47 of 48 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario A: Costs/Revenues Summary Table CITYDEVELOPER IMPACT FEES REVENUES (Onetime only) New Construction Tax $1,107,172 $1,107,172 Art in Public Places Fees $963,967 $963,967 Low Income Housing Mitigation Fees $350,661 $350,661 Child Care Program Fees $491,268 $491,268 Traffic Signals Fees $180,514 $180,514 Planned Drainage Fees $175,700 $175,700 Park & Recreation Facilities Fees $1,823,916 $1,823,916 Total Potential Developer Impact Fee Revenues at Phase Buildout $5,093,1981 $5,093,198 Page 48 of 48 Terra Nova/City of Palm Desert Fiscal Impact Analysis, Potential Annexation Appendix B Scenario B Detailed Cost and Revenue Tables 45 ~ �r- N V1 SSN M kn �00SMw M r-� Wl o0N v 00 M O� N 00 N M 00M M 7 ry N (:P� �, N N r- N N ~ a0 h M N N fR N 64 64 69 69 p= �+ 6s i^ O N N 'r �, 00 N r N �l •-� N M M N ---� N M 00 It t h M 7 Cl N 7 r-en N N W 6�9 v'7 69 Ni N U 69 N 69 69 a� C4 C4 0. O ao '-: V'l 00 00 O �O [� N D\ r- b\ 00 °� M N O 'b m OM r N r-r 00 N I� N h 00 M N N r 00 V1 M M 00 N M �D 7 N Y `p W 69 h 64 M N 69 64 N 69 69 @ i' 4 N .N-i rq 00 V1 0 �"' r M bn\ h N.W r M Cq m en O N rq [�, O N M N M M N N W . enO�OO 7 'n M It ►.� °� --� V1 N ri r 69 rl N m o0 69 U1 N N 6A 69 N 6R 69 °a o e a 1 y a�a y V > F y O ai ❑N ❑ O N abi 0 U O: U w U R; w U Q b X O O o> o a •R Lam. N a4ni N Q cUV cU3 t..' }}o.. W C G Q '3 ,C. L'. V] .n ° U V V 06 O W y U Z Z. 0) a O� S 7 s VM1 00 06 00 t` N �? M M 00 l O\ wl � Q� Vl HN b 6CN4 6c 664 6N9 6M4 � 69 l.J L 8 7 •--� <Y M M s so s Cp O^ ' M o0 00 tn M .�j � 6M4 69 6N4 yd ~ R ni d a �+ ca a Cq NW) S N 7 S r N Obi •� 00 n. D\ � � O � � � 6�N4 6R � 69 O a p`, 8 7 �p �O M 00 M S N S M tn 000 � � M 6�9 y ~ ca 69 3 0 'o b a ' F` y .CdIt •3 A c p� C7 c a 7 p O p C U y Nei, o k id bu C .� '-� o o d> v❑ a v U E, n u 7 a F. 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N Otr) b4 6N4 M -- C o I'o — 00 r wi O O �O N O 00 .b 0-4 rl O 69 y ^- pq � v, fA r-S tn O � 64 4EO bl4 o o t- 0 O 00 t- ON ,^ rQoqcqrs C) " wl a Gos � o b � b 13 •' � o � o U d bn W li O ~ ., U icu Q a `°rA o 0 0 0 0 A' UUUU 1 1 E-4 ALF .� CD It It > N a � sR3 It Cl ~ yV--4 I ro O O O (a��3- 6�9 69 00 O O� a1 aCU�o It a c rs ba � cu N C) C) 64 sg a o IT rs a Goq 0 0 w pq O � O a � O cl • � o v� cn ci U o U o ° o U 00 U 'y � o V) rA E� TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario B: Costs/Revenues Summary Table Total Potential Costs/Revenues Summary Table Scenario B Buildout Phase Phase I (Yrs 1-5) Phase II (Yrs 6-10) Phase III (Yrs 11-15) Phase IV 1 (Yrs 16-20) ANNUAL REVENUES General Fund: Property Tax $828,082 $915,621 $1,003,160 $1,090,698 Property Transfer Tax $96,687 $97,980 $99,274 $100,568 Local Sales Tax $2,078,761 $2,698,991 $3,319,226 $3,939,446 Transient Occupancy Tax $621,998 $931,610 $1,241,221 $1,550,832 Motor Vehicle In -Lieu Fees $34,343 $39,789 $45,2351 $50,682 Subtotal Annual General Fund Revenue at Phase Buildout $3,659,871 $4,683,990 $5,708,110 $6,732,226 Restricted Funds: Highway Users Gas Tax $250,028 $289,679 $329,330 $368,981 Measure A $17,462 $22,672 $27,881 $33,091 Fire Fund - Prop. A Fire Tax $351,356 $395,453 $439,549 $483,645 Fire Fund - Structural Fire Tax $1,390,562 $1,537,377 $1,684,193 $1,831,008 Subtotal Annual Restr. Fund Revenue at Phase Buildout $2,009,408 $2,245,1801 $2,480,952 $2,716,725 Total All Potential Revenues at Phase Buildout $5,669,279 $6,929,171 $8,189,062 $9,448,950 Interest Earnings: Historic Average Interest Rate on 90-Day Treasury Bills 4.39% 4.39% 4.39% 4.39% Anticipated Interest Earned on Revenues $248,881 $304,191 $359,500 $414,809 Total Potential Annual Revenues at Phase Buildout $5,918,160 $7,233,361 $8,548,562 $9,863,759 ANNUAL COSTS General Fund: Costs of General Government $3,031,673 $3,517,392 $4,003,112 $4,488,831 Costs of Police Protection $3,701,198 $4,313,217 $4,925,236 $5,537,254 Costs of Roadway Maintenance $607,245 $678,122 $749,002 $819,879 Subtotal Annual General Fund Costs at Phase Buildoutl $7,340,1161 $8,508,7311 $9,677,3491 $10,845,965 Restricted Funds: Costs of Fire Protection $1,528,907 $1,557,408 $1,585,910 $1,614,411 Service'Costs of Ambulance $940,944 $940,944 $940,944 $940,944 Subtotal Annual Restricted Fund Costs at Phase Buildout $2,469,851 $2,498,352 $2,526,854 $2,555,355 Total Potential Annual Costs at Phase Buildout $9,809,967 $11,007,084 $12,204,203 $13,401,320 Potential Cashflow at Phase Buildout-$3,891,807-$3,773,723-$3,655,641-$3,537,560 'Does not include one-time (year 1) start-up ambulance costs of $190,000. Page 75 of 76 TN PD Potential Annexation Fiscal Analysis City of Palm Desert Scenario B: Costs/Revenues Summary Table CITYDEVELOPER IMPACT FEE REVENUES (Onetime only) New Construction Tax $811,863 $811,863 $811,863 $811,863 Art in Public Places Fees $787,633 $787,633 $787,633 $787,633 Low Income Housing Mitigation Fees $522,899 $522,899 $522,899 $522,899 Child Care Program Fees $803,567 $803,567 $803,567 $803,567 Traffic Signals Fees $187,230 $187,230 $187,230 $187,230 Planned Drainage Fees $162,475 $162,475 $162,475 $162,475 Park & Recreation Facilities Fees $1,080,338 $1,080,338 $1,080,338 $1,080,338 Total Potential Developer Impact Fee Revenues at Phase Buildoutj $4,356,0041 $4,356,0041 $4,356,0041 $4,356,004 Page 76 of 76 Potential Annexation Fiscal Impact Analysis 26 January 2012 Page 2 of 5 s Glasslc , I IA . SCENARIO A The Scenario B analysis adds territory that is currently in the Cathedral City sphere of influence. It includes the Classic Club, Xavier Preparatory High School, and vacant lands on both sides of Cook Street, but excludes Jack Ivey Ranch. Scenario B boundaries are as shown below. g:\planning\lauri aylaian\staff reports\sun city annexation fiscal impact analysis 1-26-12.docx � e z � � Cl ul 9 p u v ILJ F I C O i w Table of Contents Executive Summary ............................................ 1 Background ................... 3 Investigation Methodology ...................................... 5 Feasibility of Annexation ........................................ 7 Impact of Annexation .......................................... 9 Remaining an Unincorporated Area ............................... 13 Summary and Conclusions ...................................... 19 Appendices A - BRIC II Members' Backgrounds .......................... 23 B - LAFCO Annexation Flowchart ............................ 25 C- Maps ............................................... 27 D - SCPDCA Facts and Figures .............................. 29 E - Burrtec Cost Comparison ............................... 31 F - Property Tax Bills ............................... ..... 33 G - Indio Agreement ...................................... 35 Executive Summary Sun City Palm Desert is located in an unincorporated area of Riverside County. It has been in and out of Palm Desert's sphere of influence (SOI), most recently returning in 2010. Last September the City of Palm Desert commissioned a study to determine the feasibility of annexing SCPD. In conducting its feasibility study, the City of Palm Desert will be looking at the issue in terms of whether such an action makes economic sense for the city. In order for annexation to proceed, the operation must provide benefit to all parties, though the benefits need not be equal on both sides. In response, the SCPDCA Board of Directors appointed a committee to study the pros and cons of annexation, to assist Palm Desert's consultant in their study and to report the results. The committee investigated annexation procedures and processes, the impact of annexation upon individual residents, and what options might be available to SCPD if annexation appeared impractical or unattractive. It seems likely that the feasibility study being conducted for the City of Palm Desert will report that annexation of SCPD will provide a positive cash flow to the city; however, it may not be sufficiently positive to cover the additional staffing required by the city to keep their police and fire staffing at its current ratios within the expanded city. A review of changes that might result for residents from annexation are generally posi- tive in nature: waste collection fees would be reduced and more waste collection services would be available. Pet licensing fees would be lower than the current county rates. Emergency ambulance transportation would be provided through an annual M fee of $60. Residents would be able to enjoy the Desert Willow golf courses at a very c reasonable cost and could participate in the city's solar program. N Alternatives to annexation by the City of Palm Desert were also investigated. From a purely economic standpoint, remaining unincorporated would result in the least re- -- turn on property tax dollars and leave SCPD vulnerable to the diminishing resources of a cash -strapped Riverside County. Currently SCPD pumps money annually in eight 41 figures to the county with little in return. The county has been hit hard by the recent c recession, and existing county services are likely to be cut severely or spent on the more a needy areas of the county. Q The Committee also studied other annexation options. The most logical and most likely would be Indio since we are nearly surrounded by that city. Because Indio still suffers somewhat from infrastructure shortages, it is unlikely annexation would provide E as many advantages as becoming part of Palm Desert would offer. It is one of the cities that must support the costs of its own emergency and administrative departments with the attendant pension problems. Another option, albeit less likely and much more distant in time, could be annexation by Cathedral City. Annexation by Cathedral City would not be an attractive proposi- tion for SCPD. The city's management and reserves do not begin to compare favor- ably with those of the City of Palm Desert. Cathedral City has numerous infrastructure problems, along with the costs of supporting its own emergency services and adminis- trative departments. Those services are based a long way from SCPD. In conclusion, from the standpoint of our residents, it seems clear that annexation to Palm Desert is a more attractive option than annexation to any other existing or po- tential neighboring city. It is also apparent that remaining an unincorporated island is becoming less attractive over time. The committee recommends that the Board of Directors: O Educate residents about the benefits of annexation and its alternatives. O Encourage the Palm Desert City Council to proceed toward annexation. O Take no action to pursue other options until the economy improves in the event Palm Desert does not proceed with annexation. Background This community has undergone more than one change in identity since its inception. When first launched by the Del Webb Corporation in the early 1990s, for marketing reasons they called it Sun City Palm Springs. However, because the community is in an unincorporated portion of Riverside County near Indio, it was served by the Indio post office and the mailing address was Indio. Before long, Del Webb accomplished two changes: first, the mailing address became Bermuda Dunes; second, Del Webb under- took and paid for the LAFCO-required studies to allow the community.to be claimed by the City of Palm Desert into its SOL Upon expansion of the SOI, the mailing address became Palm Desert and Del Webb renamed our community Sun City Palm Desert. LAFCO (the Local Agency Formation Commission, a state -mandated regulatory agency) has and will continue to impact our future. LAFCOs were established by state law in 1963 to assist in balancing orderly development with competing state interests and to discourage urban sprawl, preserve agricultural and open -space land and extend gov- ernment services efficiently. Nine years after approving the extension of Palm Desert's SOI to include SCPD, LAFCO requested that all cities review their spheres and relinquish any areas they did not intend to annex in the foreseeable future. As a result, Palm Desert indicated that it wished to release SCPD; in October 2007 the Riverside County LAFCO accepted this revision. Several reasons have been put forward for Palm Desert's having relinquished the community, and it is unlikely that the whole picture will ever be known. Removal v from Palm Desert's sphere meant SCPD was no longer available for annexation by that R city in the foreseeable future. -- N At the same time, Indio was aggressively expanding. With the Indio city limits abutting the community's east side along Adams St. and around the southeast corner to include the 1-10 Auto Mall, an extension of Indio's SOI at the northern boundary along Adams and Frances Way (now Coyote Song Way), then north along Washington Street to the N foothills, was approved by LAFCO in September of 2007. This northern area was subse- o quently annexed by Indio. SCPD is now bordered on the north and east and partially x on the south by Indio. c c The same September 2007 expansion of Indio's SOI included several thousand acres of land extending eastward along the foothills to the far side of Dillon Road. In late 2007 0 and again in March 2008, Indio indicated it was interested in annexing the commercial E area opposite the Newcastle gate. This westward expansionism is contrary to its 1996 ca 0- .. agreement with the Del Webb Corporation (Appendix G). This move would extend its area along SCPD's entire southern boundary, with the exception of the Marketplace and the vacant land near the corner of Adams and 40th Street. As a result of being removed from Palm Desert's SOI, a Blue Ribbon Investigation Com- mittee (BRIC) was appointed by the Sun City Palm Desert Community Association (SCPDCA) Board of Directors to investigate the options available to the community and to identify the issues of incorporation in February 2008. The committee's final report in May 2008 recommended expansion of the Government Relations Committee to pro- mote greater awareness of and involvement in the planning activities of neighboring agencies, establishment of a community council by Riverside County's District 4 Su- pervisor and reminding Indio of its agreement not to expand into our area. The Board implemented the report's recommendations and also approached the City of Palm Desert to request that they restore us to their SOI in order to provide protection from aggression by Indio. This request was approved by the Palm Desert City Council and ultimately approved by LAFCO on May 27, 2010. On September 4, 2011, The Desert Sun published an article which mentioned that the City of Palm Desert would be considering funding a study to determine the feasibility of annexing SCPD at its meeting on September 8. The study, approved by a three -to -two vote, was originally planned to cover the area recently added to their SOI by LAFCO but was modified to add approximately 650 acres in the vicinity of the Classic Club and Xavier Prep School. In response to the Palm Desert action, the SCPDCA Board of Direc- tors appointed a new Blue Ribbon Investigation Committee (BRIC II) at its meeting of October 4 to do the following: O To study the pros and cons of annexation of SCPD and its surrounding commercial area to the City of Palm Desert. O To assist the City of Palm Desert in its current annexation study by providing data and information concerning SCPD, its residents and its operations. O To report results to the Board and residents on a regular basis at Board meetings, on the web site and at town hall meetings if required. Investigation Methodology The committee began by identifying the types of questions residents would want an- swered. The questions fell into three categories: O How would annexation proceed if feasible? O How would annexation change residents' daily lives? O How would the refusal of annexation impact SCPD? The committee organized into three teams with three distinct assignments. One team investigated annexation procedures and processes. Another team investigated the im- pact of annexation upon individual residents, emphasizing the kinds of questions resi- dents were likely to ask. The remaining team investigated what options might be avail- able to SCPD if annexation appeared impractical or unattractive. The committee chair retained responsibility for scheduling appointments with individuals with information of interest to all teams and for interfacing with Terra Nova, the local company hired by the City of Palm Desert to conduct its feasibility study. Appended to this report, in addition to a list of committee members and their back- grounds and qualifications, are several supplemental reports, maps, and references. When the committee had fully researched all the questions residents might have, it as- sessed the information and drew its conclusions. The work on the annexation process is explained and discussed at length in the next section. The following section addresses the impact of possible annexation upon individual residents, and the findings on other options appear in the subsequent section. Final conclusions and recommendations fol- low. Feasibility of Annexation Introduction The City of Palm Desert is expected to determine the feasibility of annexing adjacent ar- eas using information from the study done at its request by Terra Nova. The areas being studied include one area currently in their SOI which includes SCPD, the commercial area south of the Newcastle gate and the business park triangle south of 38th Street, west of Washington, and northeast of Varner. A second area north of 1-10 between Cook and 38th Streets and south of the Nature Preserve is included in the feasibility study; this area includes the Classic Club and is currently within the SOI of Cathedral City. The key criterion for any action by the City of Palm Desert is that the financial im- pact post -annexation must be favorable to the city. In other words, the net cost of an- nexing must be more than offset by the additional revenue resulting from annexation. Time Line The Terra Nova study is scheduled to be complete in January 2012. SCPD will not have access to the report until the City of Palm Desert's staff or council releases it. If the city finds the facts emerging from the Terra Nova study to favor annexation of SCPD, the council would vote whether to proceed with an application to LAFCO for annexation proceedings. Palm Desert staff would then prepare a package of documents to ac- company the application. If LAFCO accepts the proposal, it will set a date for the com- mission's public hearing. At Feast 21 days before the hearing, all affected residents and property owners will be notified via a 1/8-page newspaper advertisement. If fewer than 25% of affected landowners and residents protest, the commission may approve or re- e ject the proposal at the public hearing. If 25% or more protest, LAFCO must call for an N election by resident -owner voters registered to vote in this locale. The entire annexation n process could take up to a year to complete. Sphere of Influence -=3 A prerequisite for annexation of an unincorporated area adjacent to an existing city is ) the designation of that area as being in that city's SOL It is important to note that the SOI area containing SCPD also includes the nearby businesses to the south of the New- castle gate and the business park triangle located west of Washington, south of 38th Q Street and northeast of Varner Road. It does not, however, include the area north of 1-10 between Cook and 38th Street that is currently included in Palm Desert's feasibility o study; that area is in Cathedral City's SOL See the precise extent of these SOI areas on E maps in Appendix C. Kel v ca N m V) 0 x (1) c c L a1 N a) 0 E Revenue Concerns In conducting its feasibility study, the City of Palm Desert will be looking at the issue in terms of whether annexation makes economic sense for the city. The next section of this report will address whether such an action makes sense for SCPD collectively and SCPD residents individually. In order for annexation to proceed, the operation must provide benefit to all parties, although the benefits need not be equal on both sides. This section of the report views the issue from the City of Palm Desert's perspective. Property tax, sales tax, transient occupancy tax, and vehicle license fees collected by the state or county from SCPD residents and nearby businesses are potential sources of new revenue to the city. The City of Palm Desert is also concerned that the streets, sewers and landscaping of any area that is annexed meet the city's standards without the need for new capital investments. Also, the City of Palm Desert has mandated that the same standards of police and fire services be furnished to residents in an area it annexes as it currently provides to its city's residents. The per capita demands for para- medic and ambulance services at SCPD are greater than the current levels within Palm Desert due to the age demographics. This demographic is not a problem as long as the new revenue covers these costs. The study undertaken by Terra Nova will summarize both the new cost burdens and the new revenue sources for the City of Palm Desert to determine feasibility. LAFCO Geographic Concerns Another criterion in determining feasibility of annexation is the geographic area itself. There are two potential areas in play: SCPD plus the business areas described previ- ously, and the area north of 1-10 between Cook and 38th Streets, excluding the Nature Preserve. Presumably, Palm Desert could choose to annex either or both areas, al- though the Cook-to-38th-Street area would require additional steps to transfer the SOI from Cathedral City to Palm Desert. Palm Desert's SOI also includes Bermuda Dunes, which is not included in the current study. Several years ago, the City of Palm Desert analyzed the financial considerations of annexing Bermuda Dunes; the idea was dropped when the city found that multi- million -dollar expenditures would be required to make infrastructure improvements. LAFCO could ask that Bermuda Dunes be included in any annexation proposed by Palm Desert before approving the proposal. Based on its previous study of Bermuda Dunes, Palm Desert would not agree to include Bermuda Dunes in its proposal. Impact of Annexation In an attempt to identify concerns and questions that SCPD residents might have re- garding the impact of potential annexation on their lives, the committee brainstormed the issues to be researched. Following are the questions they identified. O How will property taxes be impacted? With one exception, SCPD property taxes would remain unchanged if SCPD were annexed by Palm Desert. The exception is a $60 annual ambulance service fee imposed by the City of Palm Desert. The fee is essentially an insurance policy because the city in return provides free medi- cally necessary ambulance service to all its residents. It is not unusual fora short ambulance ride to cost more than $1000, depending upon the types of emergency services provided during the trip. • Will Palm Desert assess city taxes? Any governing body, including the county board of supervisors, can assess special taxes. Most general taxes within the con- trol of a local governing entity are imposed following a vote of residents. O Will we get hit with bond issues for schools or sewers? There would be no change in what we pay for schools. We already pay a school -district assessment, and any increase is not tied to what city we are located in, although we do pay a slightly lower rate because our community is age -restricted. Sewer bond issues are nor- mally assessed only upon the physical area where the sewers will be installed. Since our sewers meet Palm Desert standards there would be no change in services rn or assessments. O What will happen to our property values? Annexation to Palm Desert is unlikely to have any impact on SCPD property values. `V O Will we get to vote in the city's elections? Yes, upon annexation all locally regis- M tered residents will be eligible to vote in city elections. O Will we get to serve on the city's committees or run for a seat on the City Coun- cil? Upon annexation Sun City residents will be eligible to serve on all Palm Desert 0 boards and commissions and will be eligible to seek a City Council seat subject to a the municipal election process. Q O What will happen to police services? Will they be better or reduced or cost more? Q) If annexation were to occur, the Palm Desert contract with the .Riverside County p Sheriff's Department would be expanded to include our community. Since the Palm Desert Police Department staffing levels of 80 sworn deputies (of which 36 are assigned to patrol) far exceeds staffing levels currently provided by the county (two deputies patrolling all unincorporated areas from North Shore to SCPD), it is anticipated emergency response times and overall services would be significantly improved. In addition, Palm Desert's police department maintains a target team staffing of six officers to deploy to sudden crime increases. This team would pro- vide services to SCPD as well. The current Sheriff's POP (Problem Oriented Polic- ing) team servicing our area (and which was very helpful with our recent burglary problem near our Adams Street border) has been defunded at the County level. In addition to the target team, Palm Desert also maintains staff to provide crime prevention education and training services which would be available at no cost to SCPD residents. In conclusion, it appears the community would benefitfrom improved emergency and non -emergency services if annexation were to occur. O What will happen to fire/ambulance services? Will they be better or reduced or cost more? With respect to fire services, annexation of SCPD would result in ex- pansion of the contract between the county and Palm Desert to include Fire Sta- tion 81 housed on Washington at 38th Street. It is anticipated the staffing levels would remain unchanged. American Medical Response (AMR), staffed by civilian paramedics, provides the current ambulance response and transportation service and those costs are billed to the transported patient. If annexation were to occur, uniformed Palm Desert firefighter/paramedics would provide ambulance response and transportation and no fee would be incurred by SCPD residents. Ambulance response times and current emergency service levels should be equal or better. However, a $60 annual tax per household would be charged. The $60 annual fee could not be increased without a 2/3-majority vote of all Palm Desert city residents. Fire code enforcement issues would be handled somewhat differently if SCPD were annexed. Currently SCPD retains a fee -based annual inspection and code enforce- ment service from a private fire protection provider. If annexation were to occur, our clubhouses and maintenance and repair buildings would receive annual in- spections at no cost to Sun City. In addition, requested fire education and preven- tion services would also be provided at no cost. O Will Palm Desert police be patrolling within our gates? If so, will we have need for our present security patrol company? Palm Desert police would respond to calls as the Sheriff's personnel do now; we would continue our internal community service patrol unchanged. O Will any association monies have to go to the City of Palm Desert? No, the money to fund the additional services that Palm Desert provides its residents would come from the tax monies that we already pay in the form of property, vehicle and sales taxes. These funds are now being sent to the county, and a significant portion of them get spent in the western part of the county. O Will Palm Desert takeover any maintenance costs now borne by SCPD residents such as for street resurfacing and street sweeping? No, our streets are privately owned and maintained by the association in accordance with the tract map and CC&Rs. O What about maintenance of the Washington Street median which the association now pays for? SCPD agreed in the CC&Rs of the association to maintain the me- dian on Washington and all landscaping adjacent to the perimeter of the complex. O Will we be subject to Palm Desert code enforcement and, if so, how will it differ from our own LEC and Compliance Committees activities? Typically cities leave code enforcement inside a gated community to the respective homeowners asso- ciation. Construction modifications which currently require county permits would require city permits if annexation were to occur. O Will our Burrtec waste collection service be the same, and will its fees for services or waste collection change? The service will still be provided by Burrtec, but the charges to residents will be reduced and some additional services will be available. Burrtec has a franchise from the City of Palm Desert to provide all wet garbage,CU recyclables and green waste pickup from residences and commercial establish- c ments. At current rates, most residents would save about $100 annually; detailed N information is available in Appendix E. The Palm Desert Burrtec contract also M makes available to Palm Desert residents a number of special programs —such as hazardous waste, motor oil, electronics and sharps disposal —that are not available in unincorporated areas. Costs could be higher for the association, as Palm Desert n requires Burrtec to pick up all golf course green waste. The association currently o has a contract with a private hauler at a lower rate. x O Will our contracts with Time Warner for bulk cable and Dewey for pest control still a� be in effect? Existing contracts are still in effect and are not affected by city an- nexation. iv 0 O Will the Palm Desert Architectural Review Committee want to inspect our plans for E remodels, re -landscaping, etc.? Items requiring a building permit will be required to submit plans for architectural review as needed. O Will the one -month minimum rental periods now allowed by the CC&Rs change? No, Palm Desert is in the process of modifying its regulations for short-term rent- als, but the modifications will not impact monthly rentals in gated communities. O Will we be eligible for Palm Desert resident rates at their recreational amenities such as Desert Willow Golf Course and the new pool? What other amenities might be available to us as Palm Desert residents? Yes, upon annexation SCPD residents would be eligible for all services and amenities available to other Palm Desert resi- dents, including its solar program. A comprehensive list of city services is available on the city's website. O Will Palm Desert go to bat for us to lobby the Nature Preserve authorities to add blow -sand fencing when necessary? This is an unknown, but the city is likely to be more responsive than county government in this as well as other areas. O Will our mailing zip code or post office at Hovley change? No. O Will we lose Imperial Irrigation District as our electric provider? No, IID is a district with established boundaries that are unrelated to municipal limits. O Will we have to pay more to license our pets? Pet owners will experience some savings. The county currently charges $14 per animal for licenses, whereas Palm Desert residents pay $10 annually. It appears that annexation to Palm Desert has much to recommend it. Most residents would benefit from annexation financially; the savings in waste collection fees would more than offset the ambulance service fee. The significant increase in per capita law - enforcement personnel should improve residents' personal safety and response times when needed. A major advantage of annexation is that future planning and permitting around our community becomes local, the responsibility of Palm Desert, with stricter requirements than Riverside County. An example of how this could benefit our community is that the county has no height limits to protect our views, while Palm Desert does. And fol- lowing development, it will be the responsibility of the Palm Desert Police Department to address the inevitable traffic and public safety issues that will arise, not Riverside County. Remaining an Unincorporated Area County Services Since the committee cannot forecast whether or not Palm Desert will benefit from annexing us, it is necessary to look at the consequences and benefits of remaining an unincorporated area of the county. The major benefit of staying in the county is the lack of change. SCPD has been receiv- ing police and fire protection from the county for the community's entire existence; it is a known commodity. Many residents say, "If it ain't broke, don't fix it." However, that is a somewhat shortsighted view. The services the county has been providing this area, while stable to date, seem unlikely to remain stable in view of recent political and economic changes in the county. The county, like many governmental entities, has been hit hard by the recession of the last few years. In fact, Riverside County is one of the most heavily impacted areas in the entire nation from the standpoint of both unemployment and foreclosures. (Bad as things seem in the Coachella Valley, when compared to the rest of the county, it is in relatively good shape.) Although the current county budget managed to avoid cut- backs in public safety staffing, the sheriff's department is expecting to have to lay off as many as 800 deputies. The county has struggled in recent years to balance ongoing expenses with declining revenues. Discretionary revenue, which funds basic services such as police and fire protection, has dropped by $200 million from its peak in fiscal 2006-2007. At the same time, the county's reserves have plummeted from $350 million to $125 million. The county has maintained a branch office of the Transportation and c Land Management Agency in the business park across from the main gate to handle the valley's building, permitting and code enforcement activities for several years. Cost rn reduction plans currently under consideration would close this office, thereby requiring Coachella Valley residents to travel to Riverside to apply for building permits. Given the glacial speed of economic recovery, significant cuts seem likely next year. V% Should cuts be unavoidable, they are most likely to occur in patrols of unincorporated c 0 areas. The sheriff's department has three major areas of responsibility: (1) crime con- v trol in unincorporated areas, (2) contractually funded crime control in incorporated Q areas, and (3) staffing of jails. Because local municipalities fund the services provided by the sheriff's department on the basis of a specific number of man-hours per dollar, the department cannot reduce its services to cities without suffering additional losses E of funds. Since California prisons and jails are already under threat of legal actions c for inadequate services, this is not an area where further cuts can be made. The only remaining option is to reduce services in unincorporated areas. The likelihood that the reduction of services will occur disproportionately in the Coachella Valley is tied to recent political changes. Until this year's reapportionment actions, the Coachella Valley was under the aegis of two of the county's five supervisors. Most of the valley, including SCPD, was the responsibility of John Benoit in District 4; however, Desert Hot Springs was in Marion Ashley's District 5. On September 13, 2011, the board approved a redistricting map which adjusted the boundaries of District 4 to include Desert Hot Springs. In the future only a single voice will be concerned with representing the issues of the entire Coachella Valley. The valley has always been a minor part of the county's concerns; its influence will now be reduced even further. It should also be noted that the substation where officers covering this area are based has recently been relocated from Indio to Thermal. This relocation may negatively impact the response time on any call for service. In the long term, potential future an- nexations (such as annexation of Thousand Palms by Cathedral City) is likely to further reduce staffing for unincorporated areas because Cathedral City would assume polic- ing responsibility for the additional area and the sheriff's department would make fur- ther staff reductions with less area to cover and even less revenue. Such actions would make it even less likely that county staff could respond in a timely manner. SCPD is also subject to potentially suffering a reduction of county services in the area of fire suppression and emergency medical services. Budget negotiations for the cur- rent year did not threaten the local station (nor does a cut seem likely in future years c based on the amount of business SCPD provides). However, cuts in surrounding areas N now and in the future can impact us. If the jurisdiction of the local station is increased rn to help cover for closings nearby, it is likely to impact the time required to respond to calls. Fiscal o From a purely economic standpoint, remaining unincorporated would result in the X least return on property tax dollars. Currently SCPD pumps money annually in eight c figures to the county with little in return. Most of it will be spent on the more needy Q areas of the county. Becoming a county island like Bermuda Dunes is not considered to L.. be a good option. It makes providing needed services difficult and remotely managed. 0 It also minimizes involvement and control of surrounding developments. Finally, re- E maining unincorporated leaves SCPD vulnerable to the diminishing resources of a cash- 76 0 strapped Riverside County with the fourth or fifth highest foreclosure rate in the nation. On balance, remaining an unincorporated area in Riverside County at this time carries a significant risk. Police and fire services are likely to be undergoing reductions and options for other solutions will only be reduced over time. In addition, the community will remain dependent on Riverside County to deal with problems likely to arise from traffic increases from large future developments to our north and west. The bottom line is that staying in the county keeps SCPD at a distance from the seat of power and continues to keep many of its tax dollars from being used locally. Other Alternatives Annexation by Indio There are annexation options beyond those potentially offered by Palm Desert. The most logical and most likely would be annexation by Indio. With the annexation of the 730-acre Indio Trails development north of Sun City in 2009, the community is now surrounded on three sides by Indio. Indio Trails has already been approved for 1,150 homes along with a commercial development to support the community, while several parcels at the northeast corner of Washington Street and Coyote Song Way have been rezoned for business. Indio is not blind to the fact that Sun City is a major exporter of tax dollars to River- side County, while requiring relatively little in the way of services in return. Although Indio's aggressive growth under the former city manager appears tempered by the Ln current economy, a compelling argument could be made for Indio to expand west to a� R Washington Street or beyond, capturing those tax dollars for city coffers should Palm Desert take no action to annex Sun City. The oft -mentioned agreement between Del Webb and the City of Indio (Appendix G), whereby Indio agreed not to expand west of Adams Street, is potentially unenforceable. -- The name Sun City Palm Desert is ours to keep and need not change if the community were to be annexed by Indio. However, if we were to officially be annexed by Indio the N o Postal Service might be desirous of route modifications to make their life easier, and R the confusion of having Palm Desert in our name with an Indio mailing address might x Q) cause an identity crisis. Historically, Indio has not been viewed kindly. They are the largest city in the Coachella L a Valley and have been improving their management and financial pictures. Indio would 0 E view annexing us as a net money inflow, without the attendant cost of infrastructure c a� N M r- T c 0 ca x a� c c Q a) a) 0 E maintenance that we do ourselves. Because Indio still suffers somewhat from infrastruc- ture shortages, it is unlikely annexation would provide as many advantages as becom- ing part of Palm Desert would offer. Indio's reputation has undergone an upgrade in recent years with its higher -end development north of 1-10, but still much of Indio's infrastructure is in dire need of upgrading. A comparison of area property values per square foot in September 2011 showed SCPD values at $152, Sun City Shadow Hills at $134 and residential Indio north of 1-10 (excluding Sun City) at $82. While the resi- dential Indio figure includes a variety of properties that might make their value much lower, the homes in the two Sun Cities are virtually identical and should be comparable in value. Actually Shadow Hills should have a higher value than the Palm Desert loca- tion because its homes are newer and included more amenities such as granite kitchen countertops. On a more positive note, being part of Indio would provide us access to more plentiful local city services than the county offers and easier access to those in charge. Another reason to be cautious of any affiliation with Indio is that they are re- sponsible for the costs of supporting their own police and administrative departments and contract with the county for fewer services than most local cities. This situation means that the city cannot benefit from the economies of scale that can be derived from contracting with a larger organization and could also raise concerns over pension and health insurance for retirees. While annexation to Indio might be considered by some to be preferable to remaining unincorporated, it is probably not in our best interest. Annexation by Cathedral City Another option, albeit less likely and much more distant in time, could be annexation by Cathedral City. Cathedral City is the only city in the valley whose actions to date in- dicate an interest in expansion. The city has become a huge player in SOI and annexa- tion discussions north of the 1-10 in recent years. In March 2011, LAFCO approved an application by Cathedral City to expand their SOI to include a large area west of Rio del Sol Road and along the 1-10 freeway. Following LAFCO's approval, a discussion ensued between Cathedral City, several resident groups and the Thousand Palms Community Council. From those discussions came a consensus to request an amendment to the re- cently approved SOI to include all of Thousand Palms. On September 29, 2011, Cathe- dral City submitted an application to expand the city's SOI eastward to include 5,200 acres east of Rio del Sol Road along the 1-10 freeway, encompassing all of the develop- able portions of Thousand Palms. The area includes all the remaining areas south and west of the Coachella Valley Preserve, including the Classic Club, and extends east past Cook Street to the intersection of Avenue 38 and Varner Road, the western boundary of the recently restored Palm Desert SOL Should this be approved, it materially dimin- ishes the future tax base that would support Palm Desert annexing SCPD. Cathedral City's request to amend the SOI initially set the southern boundary of the SOI along the right-of-way of the railroad including the full width of the 1-10 freeway, which Palm Desert and Rancho Mirage opposed, citing concerns about fire protection and design issues along the freeway. Three members of the Palm Desert City Council cited this SOI expansion by Cathedral City as a reason to support funding of the Sun City SOI study. LAFCO is recommending approval of Cathedral City's request after agreement that the southern boundary of the SOI will be the freeway centerline. Annexation by Cathedral City would not be an attractive proposition for Sun City Palm Desert. The city's management and reserves do not begin to compare favorably with those of Palm Desert. It has numerous infrastructure problems. Along with the cost of supporting its own emergency services and administrative departments, it is one of only a few cities in the valley that do not contract with the county for most services. Its services are based a long way from SCPD, although outlying branches would no doubt be developed if Cathedral City expanded through Thousand Palms to Sun City. But without healthy commercial developments such as those planned in the vicinity of the Classic Club to support such expansions, the likelihood of Cathedral City's expansion as far east as Adams seems implausible. On balance, annexation by Cathedral City does not seem to be attractive at the present time, but the annexation of Thousand Palms and the addition of high -end develop- m ments in currently undeveloped. areas in conjunction with an improved economy could c make such annexation more attractive in future years. Other Options There are other governance options beyond annexation by Palm Desert or Indio or Cathedral City. One such option is the incorporation of Thousand Palms separate from N Cathedral City. This incorporation would only be viable in a strong economic climate o with a vigorous development in the vicinity of the Classic Club, an occurrence which X seems highly unlikely in the nearfuture. Another is an affiliation of SCPD and Bermuda c Dunes. However, any such relationship for the purposes of incorporation is highly un- c Q likely. Bermuda Dunes is an unlikely potential governance partner. At the Palm DesertLn L_ City Council meeting in September when the council voted to approve funding for the a) 0 annexation study, Bermuda Dunes was central to the discussion leading up to the vote. R In arguing against the motion, Council Members Finnerty and Benson pointed out that LAFCO, which is on record in opposition to "cherry picking", could require Palm Desert to include Bermuda Dunes in any application to annex the Sun City SOL The lack of infrastructure in Bermuda Dunes represents a huge expense that Palm Desert would be forced to take on and Council Member Finnerty rightly pointed out that given the eco- nomic outlook for the next few years, it was unlikely that Riverside County would agree to any cost sharing for infrastructure improvements should Palm Desert be required to include Bermuda Dunes in an annexation. The three council members supporting the study acknowledged that including Bermuda Dunes in an annexation was a possibility. Summary of Conclusions and Recommendations It seems likely that the Terra Nova feasibility study being conducted for the City of Palm Desert will report that annexation of SCPD will provide a positive cash flow to the city; however, it may not be sufficiently positive to cover the additional staffing required by the city to keep their police and fire staffing at its current ratios within the expanded city. A review of changes that might result.for residents from annexation are generally posi- tive in nature: waste collection fees would be reduced and more waste collection services would be available. Pet licensing fees would be lower than the current county rates. Emergency ambulance transportation would be provided through an annual fee of $60. Residents would be able to enjoy the Desert Willow golf courses at a very rea- sonable cost and could participate in the city's solar program. From the standpoint of our residents, it seems clear that annexation to Palm Desert is a more attractive option than annexation to any other existing or potential neighboring city. It is also apparent that remaining an unincorporated island is gradually becoming less attractive. There are options for SCPD if Palm Desert decides against annexation, but the options offer considerably fewer benefits and higher risk. The committee recommends that the Board of Directors: O Educate residents about the benefits of annexation and its alternatives. rn O Encourage the Palm Desert City Council to proceed toward annexation. O Take no action to pursue other options until the economy improves in the event Palm Desert does not proceed with annexation. M Appendix A Blue Ribbon Investigation Committee Member Backgrounds and Qualifications O Paul Brady, Chair - Paul has forty-five years of city and county government experi- ence, including positions as city manager, assistant city manager, director of public safety and chief of police, director of community services and director of adminis- trative services. He also served as SCPD's general manager for several years. O Shirley Allan - Shirley is a retired Legislative Advocate for the California State Personnel Board. She was named Legislative Advocate for SCPD in May 2007 and serves on the Government Relations Committee. She chaired the Library Committee for six years and served on the original BRIC and Community Clubs and Organization Committees. O Steve Bailey — Steve spent twenty years working in the field of business trade publications with experience on homeowners association boards. In more than four years of SCPD residence, he has served as a district delegate and vice chair of the delegate counsel; he is currently a member of the board of directors and the Party Wall Arbitration Committee. O Regina Cain -Regina is a former educator in Orange County and ten-year resident of SCPD whose tenure has included a term on the board of directors, chairing the Strategic Business Plan Committee and service on the Election Committee and three ad hoc committees. O Mike Coyne — Mike is a retired sales executive from AT&T with experience on ho- meowners association boards. An owner for eight years, Mike is active in several clubs and sports. O Ron Delgado -Ron has forty years' experience in fire and emergency management and also served as an assistant city manager. In the course of his eleven -year SCPD residence he served as a district delegate, a member of the board of directors and the Emergency Preparedness Committee; he also chaired the Public Safety Committee. O Carolyn Einung — Carolyn retired from municipal government as a systems analyst and project coordinator. She currently serves as secretary to the board of direc- tors and previously served on numerous committees, including the Strategic Busi- ness Plan Committee, the News Sr Views Committee, the Website Committee and a number of ad hoc committees. O Jacqueline Fogh - Jackie had a thirty-year career in banking, real estate develop- ment and planning in the public sector. O Bob Graham — Bob has more than thirty years of local government administration experience in town, city and county government, eight years as Assistant County Administrator of Riverside County. He is a thirteen year resident of SCPD and a member of the Insurance and Government Relation Committees. O Terry Kay— Terry is a retired aerospace systems engineer, and experienced in proj- ect management, working with diverse interests. He is a fifteen -year active resident of SCPD, founder of several clubs, and a five-year district delegate. O Elaine Leib - Elaine Leib obtained her broker's license, earned the designation of Certified Real Estate Specialist and is still engaged in real estate. A resident since 1997, she is involved in golf, mah jongg, bridge, walking, fitness and square danc- ing. O Kent McDonald — Kent is a retired aerospace systems engineer responsible for system design and project management of multi -computer systems. He has been active for eleven years at SCPD, serving on the boards of three chartered clubs and on six committees. O Mike O'Connor— Mike has extensive experience in local government manage- ment. He is an active member of the SCPD community. N N O Frank Riley — Frank has more than thirty years of local and federal government ad- c ministration experience along with a long history of community involvement. Since N moving to SCPD he has served as a district delegate and chaired the Government Relations Committee. Frank is currently president of the Desert Village Initiative, a 501(c)(3) nonprofit that organizes and delivers supportive services to residents of >, SCPD. V% O Colt Stewart - Colt has an enormous variety of experience in both state and mu- c o nicipal government, including focuses on economic development, transportation aand energy issues. He also has extensive experience in legislative tracking and the Qpublishing industry. He is a seven-year resident of SCPD and currently chairs the L Government Relations Committee. LM W, E ca OL Appendix B LAFCO Annexation Flow Chart CORTESE-KNOX-HERTZSERG LOCAL GOVERNMENT REORGANIZATION ACT OF 2000 ANNEXATIONIDETACHMENTIREORGANLZATION PROCEDURE DIAGRAM ---------- I, COMMISSION PROCEEDINGS -- •- AGENCY PRE -NOTICE NOTICE OF INTENT Mailed notice by proponent to May be initiated by resolution of TO CIRCULATE PETITION subject and interested agencies application by affected agency, or petition Must be filed with Executive at least 20 days before with required signature of landowners or Officer prior to circulation of resolution adoption unless t00% registered voters. the petition. consent (options,). RESOLUTION PETITION Resolution of application by Petition with required signatures of landowners affected local agency. - or registered voters w/LAFCO for specific } signature requirement, Application is submitted to LAFCO In form required by Environmental Review ;Commission to include resolution/petition, map, Pre- is performed if LAFCOlzoning (for city annexations) and legal description, is the lead agency. ±!applicable fees, CEQA compliance documents and !;comprehensive plan for services. Tax exchange resos i APPLICATION REVIEW are adopted by !Request for information from other agencies or affected agencies, if counties; Executive officer prepares report and applicable. recommendation on proposal; report mailed at least 5 days ;prior to hearing. NOTICE OF HEARING Notice of Commission hearing is given by Executive Officer: notice given by posting, publication and `mailing to property owners and registered voters within boundaries (within 300- 500 feet) w least 21 days before date of hearing. *(if >2,000 notices, 1/8 page display ad in rre, of mailed notice.) COMMISSION HEARING At the hearing the Commission will consider staff report and factors related to proposal, testimony of affected agencies and parties, service plan, CEOA documentation, and make COMMISSION DENIES PROPOSAL COMMISSION APPROVES PROPOSAL if denied, no similar proposal may be # May be approved with reveions/oonditions. Commission directs made I ! Executive Officer to conduct protest proceedings. Approval within one year. 1 1 expires wftNn one year if not completed (aft next page). ___.......__.... . WAIVER OF PROTEST HEARING Commission may waive hearing If 100% landowner consent and concurrence from affected agencies. (see next page) Page 1 *These are generalized procedures. Processing of specific proposals can vary slightly, REVISED V2011 N tv ZT ro L�. N r- e`— T V) C O ►7 ro X cJ C C Q +.' V) tv r) E ca t= CORTESE-KNOX-HERTZBERG LOCAL GOVERNMENT REORGANIZATION ACT OF 2000 ANNEXATION/DETACHMENTIREORGANIZATION PROCEDURE DIAGRAM PROTEST PROCEEDINGS A public hearing must be held to determine whether there is enough protest to warrant an election or terminate proceedings. NOTICE OF HEARING 'Notice is given by Executive Officer by posting, publication and `mailing to property owners and registered voters (if inhabited) within boundaries at least 21 days before date of hearing. >2,000 notices, 1/8 page display ad in lieu of mailed notice.) PROTEST HEARING Protest hearing is held by the Executive Officer on date and time of notice; written protests must be filed on LAFCO protest form with !Executive Officer prior to the conclusion of the hearing, and each 'must have proper date, signature, and address. Value of written ,protest determined by Executive Office within 30 days of hearing. 12 < 50% landowner (value) protest. 50% landowmer (value) protest. ,Inhabited (2: 12 registered voters) 1 ,< 25% voter protest an I< 25% landowner protest i between 25-50% voter protest, or z 25% landowner protest. voter protest. ' ELECTION Subject agency must call election by voters. A certificate of termination is WAIVER OF PROTEST HEARING If protest is waived, proposal may be completed. COMPLETION OF PROPOSAL ce all term and conditions have been met, a Certificate of Completion is orded, The change is effective upon recordation unless another date has set the Commission. 'These are generalized procedures. Processing of specific proposals can vary slightly. Page 2 F� 00 N QJ N T C LIP) C O m X QJ C C Q L Qi H E C. Appendix D SCPDCA Information Provided to Terra Nova Sun City Palm Desert Community Association Facts And Figures 2011 SCPD Budget $19,059,444 Operations fund revenues 16,129,687 Operations fund expenses $ 2,929,757 Revenues over expenses ($ 2,050,437) Other income and expenses $ 870,320 Revenues over expenses $447,143 Neighborhood cost center, club revenues $ 1,326,463 Excess revenues SCPD was incorporated on June 15, 1992, with 1,600 acres of residential properties SCPD board of directors consists of seven elected homeowners Monthly HOA assessments are $228 per lot; total revenue from monthly assessments is $13,336,860 SCPD has $9,995,238 in replacement reserve fund investments rn The most recent reserve study was prepared by an independent consultant in April 2011 N aU Total number of residential units is 4,985, with 4,869 detached and 116 attached units. Average lot CL size is 6,400 sq. ft. Smallest lot is 4,000 sq. ft.; largest is 8,250 sq. ft. -- N Number of full time residents i 10 - 12 Months 72% 7 - 9 Months 9% 4 - 6 Months 13% 3 1 - 3 Months 6% N c 0 1,405 homeowners have residence ouside the 92211 zip code area x a) Total number of full time employees =161 C: c Total number of part time employees flucuates depending on the time of the year Q SCPD has an adopted 5 year business plan with a mission statement, vision statement and strategic a) goals 0 E SCPD is guided by the provisions of the Davis -Sterling Act; has adopted CC&Rs and bylaws The value of each of the three clubhouses is: Mountain View - $16,651,284 Sunset View - $ 9,295,780 Lake View - $ 6,032,000 Figures provided by SCPD's insurance company The square footage of each clubhouse is: Mountain View - 78,478 Sunset View - 25,000 Lake View - 16,000 The value of the two golf courses is: Santa Rosa - $4,433,876 San Gorgonio - $5,035,157 Figures from SCPD's fixed asset schedule Taxable sales from operations in 2010 are: Boulevards - Daily Grind/Martini's - Catering - Automatic Gratuity - Charter Club Sales - Pro Shop - Fitness Centers - Post Office - Total Gross Sales - Subject to use tax - Total - Sales tax rate for 2010 - Additional taxes collected - Total sales/use taxes - Papa Dan's - $987,142.21 84,708.00 522,355.99 100,760.30 43,781.81 157,561.05 2,030.67 21,678.64 $1,920,018.67 122,426.75 $2,042,445.42 8.75% $ 178,713.97 43.03 $ 178,757.00 Outside vendor; SCPD does not have access to financials All parcels are developed within SCPD.; no information available on vacant lands outside SCPD or in the specific plan area Do not have information on assessed valuation of homes within SCPD. Information can be obtained from local realty board or by contacting a local realtor such as Coldwell Banker, the Horne Team (760-779-4495) or any other realtor doing business within SCPD Appendix E Burrtec Rates City of Palm Desert Unincor orated Count First Cart (64-gal) Second Cart (64-gal) Total First Cart (64-gal) Second Cart (64-gal) Total Monthly $8.46 $4.23 $12.69 $15.33 $6.78 $22.11 Quarterly $25.38 $12.69 $38.06 $45.99 $20.34 $66.33 Annually $101.52 $50.76 $152.28 $183.96 $81.36 $265.32 Appendix F Property Tax Bills City of Palm Desert Residence Tex bill meowed by _ Lass 1d�:N.iacatlan M�iiP)c Bllk I 71A Tax unr A^R PIScoc 13 9763.39 UNIFIED SCHO(0L, DEST 3V 11.19. 56 CCVM'U17ITY COLLEGE DRDT Sir 194. 77 COA(.-HEL':,& VAL INATF-it DEE: SERV 60) 398-2661 781. 07 fIT'e 0.F PALM DESERT a4BF.Gc.'NCY SV (66E) 807-6364D c0.00 .PAIL DESERP .PD 91-1 IEEE; 807-6864:0 1607.92 COACHELLA VALLEY MOSQUITO L P.IFA (E661 8C7-68641S 3.05 DESERT REC DIS_ AD 93-i. `:866) 80:-68644 9.90 ,-JMD SEViLF :'ERVICH CEARGI? -DEL .763; 391-960Cy6 i 331.so Items 1-4 are tied to the property value. Item 5 is PD ambulance fee. Item 6 is a service district fee, N/A in SCPD. Items 7-9 are service district per -parcel fees. .. ... i l.a.t>,.�s., a�il:,a:.l< - i �.� • a va�a a..�..�v 6 r L PAID PRIOR -YEAR TAXES (See (tern 16 or reverse) NONE LAND STRUCTURES 740,021 TRADE FIXTURES TREES &Y)TF.S BUSINESS PFR3011AL PROPERTY FULLVAL.L".E 983,339 rXENPT)OMS 140X 7 , { 0 0 NETtiALUE 9 76,339 TAXRA7EPERS700VAL11R 1, 21-462 TAX0 $11, 858.80 Speds) Aimoteres $2 , 012.66 TOTAL AIM 0UxT IP ow_r 13GAOC. see $6,935.74i $o,G35.74 Add 10% I Add 10% penally after pe ratty plus cost 12' 02011 af¢rO411012012 $5,935-74 $6,935.74 i Please note that the major differences between these property tax bills relate to the fact that the City of Palm Desert residence is valued at approximately 3.75 times that of the SCPD residence. SCPD Residence Tax bill requested by Lana Identification Multiple Bias 8035-0000000 197521294 1% TAX LIMIT PER. PROP 13 I 2603.23 UNIFIED SCHOOL DEBT SV 298.51 COMMUNITY COLLEGE DRST SV 51, 93 COACHELLA VAL WATER DEBT SERV (760) 398-2661 208.25 CSA #121 STREET LIGHTS- (888) 683-52344E 7.90 COACHELLA VALLEY MOSQUITO a RIFA (066) 807-6864% 3.06 DESERT REC DIST AD 93-1 (066) 807-68640 9.90 CVWO SEWER SERVICE CHARGE IUS1 (760) 391-96000 331.80 Items 1-4 are tied to the property value. Item 5 is a service district fee, N/A in PD. Items 6-8 are service district per -parcel fees. UNPAID PRIOR -YEAR TAXES (See item 16 on reverse) NET VALUE 260, 323 . TAX RATE PER$1f10VALUE .1.21462• TAXES 1 1.. ' A fix-d haws .692 TOTAL AMOUNT $ 3 , 514.5 8 $1,757.29 $1,757.29 Add 10% 4 Add 10% Qom',, petulty after Penalty Plus cost , <+ 12110fZ011 afterD411OW12 $1,757.29 $1,757.29 rn rn () Ql to C N P— M t� 7 a..r N C R X Q) C c a� H E C "Cr M O O1 cC L� N M T 7 a-+ V) C O m X a1 C C Q L CA H �c C Indio Agreement Appendix G AGREEMENT BETWEEN THE CITY OF INDIO AND DEL WEBB CALIFORNIA CORP. REGARDING ANNEXATION 70 THIS AGREEMENT ("Agreement") is made effective as of the 25th day of November,1996, by and between the City of Indio, a municipal corporation ("City") and Del Webb California Corp., an Arizona corporation ("Del Webb"), with reference to the following: A. The City has filed an annexation application with the Riverside County Local Agency Formation Commission ("LAFCO"). The application requests LAFCO approval of Annexation 70, which currently proposes to annex to the City the property indicated on Exhibit "A" attached. A portion of said property ("Westerly Area"), as indicated on Exhibit "B" attached, is located west of Adams Street. B. The City desires to have a commercial facility consisting solely of automobile dealerships ("Auto Mall") constructed on those properties within the Westerly Area designated as Doerschler and Blue Palms Trust on Exhibit "B" attached (collectively "Triangular Parcel"). The Triangular Parcel is intended to be separated by 40th Avenue (which is intended for future construction) from the properties designated as Kaptur and Del Webb on Exhibit "B". C. Del Webb is the owner and developer of a master planned community known as Sun City Palm Desert, which includes commercial property in the Westerly Area. Del Webb believes that the logical boundary for Indio would be Adarns Street, and that the City's annexation efforts should not extend into the Westerly Area. However, Del Webb recognizes that the creation of a new Auto Mall is extremely important to the future of the City and, accordingly, Del Webb supports construction of an Auto Mall on the Triangular Parcel and the annexation of the Triangular Parcel into the City. D. In view of the foregoing, and in an effort to promote the expeditious development of the Auto Mall and accommodate their respective interests, the parties have elected to enter into this Agreement. NOW, THE, IT IS AGREED AS FOLLOWS: 1. City Agreements Regarding Modification of Annexation 70 and Sphere of Influence. As expeditiously as possible subsequent to the execution of this Agreement, the City shall commence and complete all steps and actions reasonably necessary or expedient to (a) modify Annexation 70 so that it excludes all of the Westerly Portion except for the Triangular Parcel, and (b) modify its sphere of influence so that it excludes all property located west of Adams Street, except for the Triangular Parcel. 2. City Agreements Regarding Future Annexation Efforts. Subsequent to the date of this Agreement (a) the City agrees to and shall limit its annexation efforts west of Adams Street to those portions of the property designated as Kaptur on Exhibit "C" which are reasonably necessary for expansion of the Auto Mall northerly across 40th Avenue from the Triangular Parcel, and (b) should the City determine it WCE61590:1 M5196 necessary to annex substantially all of the property designated as Kaptur for such purpose, the City shall require that the developer of the Auto Mall to leave at least a 250 foot landscape buffer between the southerly boundary of Sun City Palm Desert and the Auto Mall. 3. Del Webb Agreements Regarding Annexations and Lot Line Adjustment. From and after the execution of this Agreement, Del Webb shall (a) support Annexation 70, modified as indicated in Section l above, and (b) not oppose future efforts by the City to annex portions of the property designated as Kaptur, in the manner provided in Section 2 above, and (c) execute, acknowledge and deliver to Granite Construction Company any grant deeds to be provided by Del Webb in connection with the completion of Lot Line Adjustment No. 3671, which was approved by the Riverside County Planning Department on March 2, 1994. 4. Cooperation. Each party agrees to and shall do and perfontt such other and further acts and execute, acknowledge, deliver and/or record such other and further documents as may be reasonably necessary or expedient to implement the intents and purposes of this Agreement. 5. Attorneys Fees. In the event of any litigation arising out of and/or relating to this Agreement, or the performance or breach of it, the party prevailing in such litigation shall be entitled, in addition to any other appropriate relief, to an award of reasonable attorneys fees. 6. Remedies. The parties agree that any material breach of this Agreement, or any term or provision hereof, will cause irreparable injury to the aggrieved party which cannot be adequately compensated in monetary damages and, accordingly, the aggrieved party shall, in addition to any other appropriate relief, be entitled to court ordered injunctive relief restraining and/or preventing such breach. IN WITNESS WHEREOF, the parties have executed this Agreement and made it effective as of the date first above written. ATTEST: iliz- - Deputy City cl WCE61590:11115:96 Del Webb California Corp., an Arizona,4=ratioA _ . By: [ ,w ice resident and General 2 Appendix C Sphere of Influence Maps CITY OF PALM DESERT AND SPHERE OF INFLUENCE AREA n _ L 'RANCHO PALM DESERTiY <j , { ',jOR k� INDIO _ i �[a — WELLS ("tTI raL—� PPALM SPRINGS LA QUINTA ) JI I lAKEI PALM DESERT SOI ^' Septem6er9 2009 2: 1- as x rea ro- wow ty MeD kaNes a ,a me ewrny rw.'e�vae mr w v e a n«�em Miles !/^\j 1 2 4iIS 0 N ,Rle,ewm:orry ar m. w... rb Ao�my-R, sal m.mro. COPMIGHT 0 20D3 Cu,nly of R'rvervCe. TLMAGIS t- 7 N C O .Z M X c v —1 N M CITY OF PALM DESERT AND SPHERE OF INFLUENCE AREA CATHEDRAL CITY n' Terra Nova - i Study Area - _ RAN(H.' - PALrv1 DESERT - �'INDIAN WELLS W { Al R_ p 1:7,� 14f � /ww PALM i.. LA QUINTA SPRINGSr PALM DESERT CAHUILu $ SQI - P x, KX Se Ycmher 9, 1009 l :dalmer Maps and data am to t,e u.ee dor Ilk— pomo.<a wIY, A P 4alvea {y w ale, and are rot ne«aady xwrate to aw y- p B�leedrp / Miles --. /_�• tl Ntla Tle CaulfyofRwnide m.NeamwertvrlY p as to the canpM .�� oM1en �tird PaM) awvracY timel rrss o p ofeny W do ds pr Eed, and anlanearokgel reawnapFy for dp- 1 coop rsd on Ilia ^I� P-nRr pIt aprod dnroapadm.mn row .neeme 2 4�S N ode respm bddy of Ine per. Do o wpY or reaN I a map. COPYRIGHT O ]IXP Court of Ri eraide. TWA IS 0 V) •Ln 0 a Qj CL 0 Ln 10 Ln (U X, E u LL Lt- r— — — — — — --- 0 IA Washington St. E w U) 0 Ln 0 0 u LL I 2 < CL .. . ....... A,,j Aa ,.� 0 in LU till Ahm. f �u r 9 D�Vali Dii 47�1 41 1 110 EXHIBIT 4"A" ® City oCMO m City ofj?alm Dcsct City of Indio Prop. Annex. 66 City f Indlo Prop.,oAnriex. 69 blty of Indlo Prof• Annex. 7D Warner engineering N M v N t— M e— N 0 0 X C C Q tt� 47 C) E 00 rn I I 45-025 Manitou Drive, Suite 3 - Indian Wells, CA 92210 Phone 760.360.7666 Fax 760.776.1760 Rob@RobBernheimer.com January 25, 2012 The Honorable Robert A. Spiegel, Mayor City of Palm Desert 73510 Fred Waring Drive Palm Desert, CA 92260 Re: H.N. and Frances C. Berger Foundation REQUEST TO CONTINUE AGENDA ITEM XVI Dear Mayor Spiegel: This firm has the privilege of representing the H.N. and Frances C. Berger Foundation, which requests the City continue Agenda Item XVI to a future meeting. As you may be aware, late last year the City expanded the scope of its fiscal assessment of the potential annexation for areas north of the I-10 with the understanding that the Berger Foundation pay that added cost. The Berger Foundation is pleased to participate with the City in this process. Unfortunately, we only just received the 170 page fiscal study. We will not have sufficient time to review the report to provide meaningful feedback to the City by its January 261h council meeting. This review is important to make sure the report and its assumptions are accurate, particularly since the Berger Foundation was not consulted with or interviewed about its development plans during the preparation of the fiscal report. Thank you for your consideration of this matter. Cordially, Robert A. Bernheimer cc: William Kroonen, Mayor Pro Tern Cindy Finerty, Council Member Jean Benson, Council Member o Jan Harnik, Council Member ^g -TJ John Wolmuth, City Manager Lauri Aylaian, Director of Community Development N - n `' rn { .. cn Ron Auen, H.N. and Frances C. Berger Foundation 3 w cri nz t 0 m